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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Akcea Therapeutics, Inc.
(Name of Registrant as Specified In Its Charter)

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Special Meeting of Stockholders
April 16, 2018

March 26, 2018

Dear Stockholders:

Akcea cordially invites you to attend a special meeting of the stockholders of Akcea Therapeutics, Inc. (the “Company,” “Akcea,” “we” or “us”) to be held at Akcea Therapeutics, Inc., 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142, on April 16, 2018, at 10:00 AM Eastern Time.

The purpose of the special meeting will be to seek your approval for a proposed transaction, which the Company announced on March 15, 2018, to collaborate with its affiliate, Ionis Pharmaceuticals, Inc. (“Ionis”), with respect to the commercialization of inotersen and IONIS-TTR-LRx, which the Company refers to as AKCEA-TTR-LRx. These product candidates are both antisense oligonucleotide drugs, also referred to herein as antisense drugs, in development for the treatment of hereditary TTR amyloidosis.

On March 14, 2018, the Company entered into a development, commercialization, collaboration and license agreement (the “License Agreement”) and a stock purchase agreement (the “Stock Purchase Agreement”) with Ionis, and amended its Investor Rights Agreement and Services Agreement, each originally entered into with Ionis on December 18, 2015. Pursuant to the License Agreement, the Company would receive rights to (a) commercialize inotersen and perform other non-commercial activities with respect to inotersen, in each case, in accordance with a global strategic plan; (b) participate in the development, through the completion of all pivotal studies, including paying 50% of the associated costs, of a follow-on drug to inotersen, AKCEA-TTR-LRx, and perform other non-commercial activities with respect to AKCEA-TTR-LRx; (c) commercialize AKCEA-TTR-LRx following receipt of regulatory approval in accordance with a global strategic plan; and (d) share in profits and losses with respect to inotersen and AKCEA-TTR-LRx. In addition, the Company would have the right to manufacture (including through a third party) each product following receipt of its regulatory approval.

Pursuant to the Stock Purchase Agreement, the parties agreed that at the closing of the transaction, as payment for the grant of rights to the Company under the License Agreement, the Company will pay an upfront licensing fee of $150 million, payable in shares of its common stock priced by reference to a recent trading average. To support the Company’s commercialization of inotersen and AKCEA-TTR-LRx, Ionis will purchase $200 million of common stock at the same price per share. The Company agreed to share inotersen and AKCEA-TTR-LRx profits and losses with Ionis as follows: for inotersen, beginning on the earlier of (i) the first day of the quarter after receipt of regulatory approval of inotersen in the United States, or (ii) January 1, 2019, the parties will share profits and losses from the development and commercialization of inotersen (A) on a 60/40 basis (60% to Ionis and 40% to the Company) through the end of the quarter in which the first commercial sale of AKCEA-TTR-LRx occurs, and (B) on a 50/50 basis commencing on the first day of the first quarter thereafter; and for AKCEA-TTR-LRx, beginning January 1, 2018, the parties will share all profits and losses from the development and commercialization of AKCEA-TTR-LRx on a 50/50 basis. Further, pursuant to the License Agreement, the Company is obligated to make certain payments (the “Milestone Payments”) to Ionis in connection with the achievement of certain development, regulatory and commercialization events (the “Milestone Events”). The Company may elect to pay each initial Milestone Payment in cash or shares of common stock (and notwithstanding this election, Ionis may require payment in shares of common stock). If the Company achieves the Milestone Event for aggregate worldwide annual net sales of the products of $750 million, all subsequent Milestone Payments must be paid in cash.

At the special meeting, holders of shares of the Company’s common stock will be asked to consider and vote upon the following matters described in this letter and the accompanying proxy statement:

1. a proposal to approve the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement, each dated March 14, 2018 between the Company and Ionis and the consummation of the transaction contemplated thereunder;
2. a proposal to approve the issuance of the shares of common stock to Ionis pursuant to the License

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Agreement and Stock Purchase Agreement as required by and in accordance with Nasdaq Listing Rule 5635, which is conditioned upon the approval of proposal no. 1;

3. a proposal to amend Article IV of the Amended and Restated Certificate of Incorporation to increase the Company’s authorized common stock from 100,000,000 shares to 125,000,000 shares, which is conditioned upon the approval of proposal no. 1; and
4. a proposal to approve an adjournment of the special meeting, if necessary or appropriate, to permit solicitation of additional proxies in favor of the above proposals.

In considering the proposals, stockholders should be aware that Ionis and certain of the Company’s directors may have interests that may be different from, or in addition to, the interests of other stockholders, as further described in the enclosed proxy statement.

The enclosed proxy statement provides detailed information about the special meeting, the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder, which the Company urges you to read carefully and in its entirety. A copy of each of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement is attached to this proxy statement as Annex A, Annex B, Annex C and Annex D, respectively.

Because Ionis owns approximately 68.2% of the Company’s common stock, the Company’s board of directors authorized a special transaction committee (the “Special Committee”) composed entirely of independent and disinterested directors to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis. The Special Committee determined that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interests of the Company and recommended the transaction to the board. Based upon the recommendation of the Special Committee, the board approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder, declared each of the foregoing advisable and in the best interests of the Company and determined to submit it to the stockholders of the Company other than Ionis and its affiliates (the “Interested Stockholders”).

The board recommends that the stockholders of the Company vote “FOR” each of the proposals set forth in this proxy statement.

The transaction contemplated by the License Agreement and the Stock Purchase Agreement cannot be completed unless all of the first three proposals are approved. The Stock Purchase Agreement contains a non-waivable condition, with respect to proposal no. 1, requiring the approval of the Stock Purchase Agreement, the License Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement the transaction contemplated thereunder by a receipt of the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers. Whether or not you plan to attend the special meeting in person, to ensure that your shares are represented at the special meeting, please vote via the internet or by telephone as instructed in the accompanying proxy materials or complete, date and sign and return a proxy card as promptly as possible. Even if you plan to attend the special meeting, please take advantage of one of the advance voting options to ensure that your shares are represented at the special meeting. You may revoke your proxy at any time before it is voted by following the procedures described in the accompanying proxy statement. If you hold your shares in “street name”, you should instruct your broker how to vote in accordance with the voting instruction form you will receive from your bank, broker or other intermediary.

Thank you for your continued support of Akcea Therapeutics, Inc.

Sincerely,
   
Paula Soteropoulos
President & Chief Executive Officer

The accompanying proxy statement is dated March 26, 2018 and, together with the enclosed proxy card, is being mailed to stockholders on or about March 26, 2018.

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Akcea Therapeutics, Inc.
55 Cambridge Parkway, Suite 100
Cambridge, MA 02142
(617) 207-0202

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 2018

To the stockholders of Akcea Therapeutics, Inc.:

NOTICE IS GIVEN that a special meeting of the holders of the common stock of Akcea Therapeutics, Inc., a Delaware corporation (“Akcea” or the “Company”), is scheduled to be held at Akcea Therapeutics, Inc., 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142 on April 16, 2018, at 10:00 AM Eastern Time to consider and vote upon the following matters described in this notice and the accompanying proxy statement:

1. a proposal to approve the development, commercialization, collaboration and license agreement, dated March 14, 2018 (the “License Agreement”), between the Company and Ionis Pharmaceuticals, Inc., a Delaware corporation (“Ionis”), a stock purchase agreement, dated March 14, 2018 (the “Stock Purchase Agreement”) between the Company and Ionis, an amended and restated services agreement, dated March 14, 2018 (the “Amended and Restated Services Agreement”) between the Company and Ionis and an amended and restated investor rights agreement, dated March 14, 2018 (the “Amended and Restated Investor Rights Agreement”) between the Company and Ionis and the consummation of the transaction contemplated thereunder, including the following:
(a) an exclusive license to develop and sell inotersen and AKCEA-TTR-LRx, and a non-exclusive license to manufacture inotersen and AKCEA-TTR-LRx;
(b) an upfront licensing fee, payable by the Company in the issuance of 8,000,000 shares of common stock, par value $0.001 to Ionis (the “License Issuance”) and to support the Company’s efforts to commercialize inotersen and AKCEA-TTR-LRx, the issuance of 10,666,666 shares of common stock to Ionis for $200 million in cash (together with the License Issuance, the “Initial Issuance”);
(c) a sharing of profits and losses with Ionis pursuant to which beginning on the earlier of (i) the first day of the quarter after receipt of regulatory approval of inotersen in the United States, or (ii) January 1, 2019, the parties will share profits and losses from the development and commercialization of inotersen (A) on a 60/40 basis (60% to Ionis and 40% to the Company) through the end of the quarter in which the first commercial sale of AKCEA-TTR-LRx occurs, and (B) equally on a 50/50 basis commencing on the first day of the first quarter thereafter;
(d) a sharing of profits and losses with Ionis, pursuant to which, beginning January 1, 2018, the parties will share all profits and losses from the development and commercialization of AKCEA-TTR-LRx on a 50/50 basis; and
(e) payment (the “Milestone Payments”) to Ionis in connection with the achievement of certain development, regulatory and commercialization events (the “Milestone Events”), which the Company may elect to pay in cash or shares of common stock (and notwithstanding this election, Ionis may require payment in shares of common stock); provided if the Company achieves the Milestone Event for aggregate worldwide annual net sales of the products of $750 million, all subsequent Milestone Payments must be paid in cash.
2. a proposal to approve the issuance of the shares of common stock to Ionis pursuant to the License Agreement and Stock Purchase Agreement as required by and in accordance with Nasdaq Listing Rule 5635, which is conditioned upon the approval of proposal no. 1;
3. a proposal to amend Article IV of the Amended and Restated Certificate of Incorporation to increase the number of shares of authorized common stock from 100,000,000 to 125,000,000 shares, which is conditioned upon the approval of proposal no. 1; and
4. a proposal to approve an adjournment of the special meeting, if necessary or appropriate, to permit solicitation of additional proxies in favor of the above proposals.

The board recommends that the stockholders of the Company vote “FOR” each of the proposals set forth in this proxy statement.

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In considering the proposals, stockholders should be aware that Ionis and certain of the Company’s directors may have interests different from, or in addition to, the interests of other stockholders, as further described in the enclosed proxy statement.

The enclosed proxy statement provides detailed information about the special meeting, the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder, which the Company urges you to read carefully and in its entirety, including the appendices and the documents incorporated by reference in this proxy statement. A copy of each of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement is attached to this proxy statement as Annex A, Annex B, Annex C and Annex D, respectively.

Because Ionis owns approximately 68.2% of the Company’s common stock, the Company’s board of directors authorized a special transaction committee (the “Special Committee”) composed entirely of independent and disinterested directors to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis. The Special Committee determined that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interests of the Company and recommended the transaction to the board. Based upon the recommendation of the Special Committee, the board approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder, declared each of the foregoing advisable and in the best interests of the Company and determined to submit it to the stockholders of the Company other than Ionis and its affiliates (the “Interested Stockholders”) with a recommendation that the stockholders vote “FOR” each of the proposals set forth in this proxy statement.

The transaction contemplated by the License Agreement and the Stock Purchase Agreement cannot be completed unless all of the first three proposals are approved. The Stock Purchase Agreement contains a non-waivable condition, with respect to proposal no. 1, requiring the approval of the Stock Purchase Agreement, the License Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder by a receipt of the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock other than the Interested Stockholders which shall exclude a vote of any of the Company’s directors and officers. Whether or not you plan to attend the special meeting in person, to ensure that your shares are represented at the special meeting, please vote via the internet or by telephone as instructed in the accompanying proxy materials or complete, date and sign and return a proxy card as promptly as possible. Even if you plan to attend the special meeting, please take advantage of one of the advance voting options to ensure that your shares are represented at the special meeting. You may revoke your proxy at any time before it is voted by following the procedures described in the accompanying proxy statement. If you hold your shares in “street name”, you should instruct your broker how to vote in accordance with the voting instruction form you will receive from your bank, broker or other intermediary.

Pursuant to a stockholder voting agreement, Novartis Pharma AG (“Novartis”) agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock, representing approximately 9.4% of the shares issued and outstanding and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders. Pursuant to the Stock Purchase Agreement, Ionis has agreed to vote, or cause to be voted, all of its shares of common stock in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment). Accordingly, proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) will not require the affirmative vote of any stockholder other than Ionis or Novartis.

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All stockholders are cordially invited to attend this special meeting, although only holders of record of common stock at the close of business on March 21, 2018 are entitled to receive notice of and to vote at the special meeting or any adjournment thereof. A list of stockholders who are entitled to receive notice of and to vote at the special meeting will be available in the Company’s offices located at 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142, during ordinary business hours for a period of at least ten days preceding the special meeting. A stockholder list will also be available at the special meeting.

By Order of the Board of Directors
   
Paula Soteropoulos
President & Chief Executive Officer

March 26, 2018
Cambridge, Massachusetts

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ANNEX A LICENSE AGREEMENT
 
 
ANNEX B STOCK PURCHASE AGREEMENT
 
 
ANNEX C AMENDED AND RESTATED SERVICES AGREEMENT
 
 
ANNEX D AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
 
 
ANNEX E FAIRNESS OPINION
 
 

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Akcea Therapeutics, Inc.
55 Cambridge Parkway, Suite 100
Cambridge, Massachusetts 02142

This proxy statement contains information related to a special meeting of stockholders of Akcea Therapeutics, Inc. to be held at Akcea Therapeutics, Inc., 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142, on April 16, 2018, at 10:00 AM Eastern Time, and any adjournments or postponements thereof. The Company is furnishing this proxy statement to its stockholders as part of the solicitation of proxies by the board of directors for use at the special meeting.

SUMMARY TERM SHEET

This following summary term sheet highlights selected information contained in this proxy statement and may not contain all of the information that is important to you. The Company urges you to read this entire proxy statement carefully, including the appendices and the documents incorporated by reference in this proxy statement, before voting. Except as otherwise specifically noted in this proxy statement or as context otherwise requires, the “Company,” “Akcea,” “we” or “us” refers to Akcea Therapeutics, Inc. All information contained in this proxy statement concerning Ionis Pharmaceuticals, Inc. (“Ionis”) has been provided by Ionis and has not been independently verified by Akcea.

On March 14, 2018, the Company entered into a development, commercialization, collaboration and license agreement (the “License Agreement”) and a stock purchase agreement (the “Stock Purchase Agreement”) with Ionis, and amended its Investor Rights Agreement and Services Agreement, each originally entered into with Ionis on December 18, 2015. Pursuant to the License Agreement, the Company would receive rights to (a) commercialize inotersen and perform other non-commercial activities with respect to inotersen, in each case, in accordance with a global strategic plan; (b) participate in the development, through the completion of all pivotal studies including paying 50% of the associated costs, of a follow-on drug to inotersen, AKCEA-TTR-LRx, and perform other non-commercial activities with respect to AKCEA-TTR-LRx; (c) commercialize AKCEA-TTR-LRx following receipt of regulatory approval in accordance with a global strategic plan; and (d) share in profits and losses with respect to inotersen and AKCEA-TTR-LRx. In addition, the Company would have the right to manufacture (including through a third party) each product following receipt of its regulatory approval.

Pursuant to the Stock Purchase Agreement, at the closing of the transaction, the Company will pay an upfront licensing fee of $150 million, payable in shares of common stock priced by reference to a recent trading average (the “License Issuance”). To support commercialization of inotersen and AKCEA-TTR-LRx, Ionis will purchase $200 million of the Company’s common stock at the same price per share (together with the License Issuance, the “Initial Issuance”).

The Company agreed to share inotersen and AKCEA-TTR-LRx profits and losses with Ionis as follows: For inotersen, beginning on the earlier of (i) the first day of the quarter after receipt of regulatory approval of inotersen in the United States, or (ii) January 1, 2019, the parties will share profits and losses from the development and commercialization of inotersen (A) on a 60/40 basis (60% to Ionis and 40% to the Company) through the end of the quarter in which the first commercial sale of AKCEA-TTR-LRx occurs, and (B) on a 50/50 basis commencing on the first day of the first quarter thereafter; and for AKCEA-TTR-LRx, beginning January 1, 2018, the parties will share all profits and losses from the development and commercialization of AKCEA-TTR-LRx on a 50/50 basis. Further, pursuant to the License Agreement, the Company is obligated to make certain payments (the “Milestone Payments”) to Ionis in connection with the achievement of certain development, regulatory and commercialization events (the “Milestone Events”). The Company may elect to pay each Milestone Payment in cash or shares of common stock (and notwithstanding this election, Ionis may require payment in shares of common stock); provided if the Company achieves the Milestone Event for aggregate worldwide annual net sales of the products of $750 million, all subsequent Milestone Payments must be paid in cash (collectively, the “Payment Election”).

License Agreement

Under the License Agreement, the Company will receive rights to (a) commercialize inotersen and perform other non-commercial activities with respect to inotersen, in each case, in accordance with a global strategic plan; (b) participate in the development, through the completion of all pivotal studies including 50% of the

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associated costs, of a follow-on drug to inotersen, AKCEA-TTR-LRx and perform other non-commercial activities with respect to AKCEA-TTR-LRx; (c) commercialize AKCEA-TTR-LRx, following receipt of regulatory approval in accordance with a global strategic plan; and (d) share in profits and losses with respect to inotersen and AKCEA-TTR-LRx. In addition, the Company will have the right to manufacture (including through a third party) each product following receipt of its regulatory approval.

Pursuant to the License Agreement, Ionis will grant to the Company (i) an exclusive, world-wide license under Ionis’ patents and know-how (other than manufacturing patents and know-how) to develop and sell inotersen and AKCEA-TTR-LRx and (ii) a non-exclusive, world-wide license under the Ionis manufacturing patents and know-how. The Company may grant sublicenses under the rights granted to it with Ionis’ prior written consent, not to be unreasonably withheld and with certain exceptions. In addition, the parties have agreed to certain exclusivity covenants that will prevent (A) each company from clinically developing or commercializing products that use the same mechanism of action as the products and (B) the Company from clinically developing or commercializing products that are reasonably expected to decrease the market share for a product and treats or is intended to treat transthyretin amyloidosis or any other indication for which a product under that Agreement is being Developed or Commercialized, in each case ((A) or (B)), without the other party’s consent.

The Company will grant to Ionis a fully-paid, royalty-free, irrevocable, worldwide, non-exclusive, sublicensable license under any collaboration technology the Company develops under the License Agreement to develop, manufacture and commercialize products that include an oligonucleotide as an active pharmaceutical ingredient (other than competing products during the term of the License Agreement).

The License Agreement will become effective on the date on which the closing of the Stock Purchase Agreement occurs. The License Agreement may be terminated under certain circumstances, including: (i) by mutual written consent of the parties; (ii) by either party if the transaction contemplated by the Stock Purchase Agreement does not close by June 30, 2018; (iii) by either party if any applicable law makes the transaction documents illegal or otherwise restrains transaction consummation; (iv) by either party, for the other’s uncured material breach under the License Agreement; (v) by the Company for convenience with written notice to Ionis; or (vi) by Ionis if the Company disputes the validity of any Ionis patent right licensed to the Company under that License Agreement. The parties have initiated collaborative, pre-commercial preparations given the near-term expected regulatory approval and commercial launch of inotersen. If the transaction is not consummated, then the Company intends to unwind these preparations, which will require a transition services agreement. For more information regarding the License Agreement, see “The Transaction — The License Agreement.”

Stock Purchase Agreement

Pursuant to the Stock Purchase Agreement, the parties agreed (i) as an upfront licensing fee, that the Company will issue 8,000,000 shares of common stock to Ionis and (ii) to support the Company’s efforts to commercialize inotersen and AKCEA-TTR-LRx, that the Company will issue 10,666,666 shares of common stock to Ionis for $200 million in cash.

In addition to customary closing conditions, the respective obligations of each party to consummate the transaction contemplated by the Stock Purchase Agreement are subject to the approval of proposal no. 1 (disinterested stockholder approval), proposal no. 2 (share issuance) and proposal no. 3 (certificate amendment). Proposal no. 1 requires the approval of the holders of at least a majority of all issued and outstanding shares of the Company’s common stock other than Ionis and its affiliates (the “Interested Stockholders”), which shall exclude a vote of any of the Company’s directors and officers. This condition cannot be waived. Pursuant to the Stock Purchase Agreement, Ionis agreed to vote, or cause to be voted, all of its shares in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment). Accordingly, proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) will not require the affirmative vote of any stockholder other than Ionis.

The Stock Purchase Agreement may be terminated under certain circumstances, including the mutual written consent of the parties; by either party if the closing has not occurred on or prior to June 30, 2018; by either party if a governmental entity prohibits the consummation of the transaction; or by either party if the other party materially breaches the agreement, subject to a sixty-day cure period. For more information regarding the Stock Purchase Agreement, see “The Transaction – The Stock Purchase Agreement.”

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Certificate Amendment

The Company currently has a sufficient number of authorized shares of common stock to satisfy its obligations pursuant to the Stock Purchase Agreement with respect to the Initial Issuance. However, it will not have a sufficient number of shares of common stock to satisfy all of its obligations with respect to the Milestone Payments, if it achieves the Milestone Events payable in shares of common stock and makes such Milestone Payments in shares of common stock. To reduce this shortfall, at the special meeting, holders of shares of the common stock will be asked to consider and vote on a proposal to amend the Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 100,000,000 shares to 125,000,000 shares (the “Certificate Amendment”), which is conditioned upon the approval of proposal no. 1. For more information regarding the certificate amendment, see “The Transaction−Certificate Amendment”.

Voting Agreement

The Company has entered into a stockholder voting agreement with Novartis Pharma AG (“Novartis”) whereby Novartis agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock, representing approximately 9.4% of the shares issued and outstanding and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders. This agreement will terminate when the transaction contemplated by the Stock Purchase Agreement closes or on the date the Stock Purchase Agreement terminates in accordance with its terms. For more information regarding the stockholder voting agreement, see “The Transaction – Voting Agreement.”

Amended and Restated Investor Rights Agreement

Given the proposed increase to Ionis’ equity ownership of the Company in connection with the proposed transaction and its increased reliance on the Company as a commercialization partner, now that the Company could be commercializing at least two products that Ionis had developed (volanesoren and inotersen), the Company has amended and restated its Investor Rights Agreement, entered into with Ionis on December 18, 2015. For more information regarding the amended and restated Investor Rights Agreement, see “The Transaction – Amended and Restated Investor Rights Agreement.”

Amended and Restated Services Agreement

In connection with the proposed transaction, the Company has also amended and restated its Services Agreement, originally entered into with Ionis on December 18, 2015. For more information regarding the amended and restated Services Agreement, see “The Transaction – Amended and Restated Services Agreement.”

Interests of Ionis and Certain Directors

Ionis has interests in the transaction contemplated under the License Agreement and the Stock Purchase Agreement that may be different from, or in addition to, the interests of the Company’s other stockholders, as described in this proxy statement. Furthermore, because of their affiliation with Ionis, you should be aware that certain of the Company’s directors may have interests in the transaction that are different from, or in addition to, the interests of stockholders generally, as described in this proxy statement. The Special Committee and the members of the board of directors who voted on the transaction were aware of these additional interests, and considered them, when they approved the License Agreement and Stock Purchase Agreement and recommended that stockholders vote in favor of approving the transaction and the License Agreement and Stock Purchase Agreement. For more information regarding these interests, see “Special Factors — Interests of Ionis and Certain of the Company’s Directors.

Special Committee and the Board

Because Ionis owns approximately 68.2% of the Company’s common stock, the Company board authorized a special transaction committee (the “Special Committee”) composed entirely of independent and disinterested directors to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis. The Special Committee determined that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated

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thereunder, are advisable and in the best interests of the Company and recommended approval of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder to the Company’s board.

Based on this recommendation, the board (i) approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder; (ii) declared that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder is advisable and in the best interest of the Company; (iii) declared that the issuance of the shares pursuant to the proposed transaction is advisable and in the best interest of the Company; (iv) declared that the amendment to Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares is advisable and in the best interest of the Company; and (v) determined to submit the matters to the stockholders of the Company with a recommendation that the stockholders vote for each of the proposals set forth in this proxy statement. For more information regarding the Special Committee, see “Special Factors — Background of the Proposed Transaction” and “Special Factors —Reasons for the Proposed Transaction; Recommendations of the Special Committee and the Board.

Fairness Opinion

Cowen and Company, LLC (“Cowen”) acted as financial advisor to the Special Committee of the board in connection with the transaction contemplated by the License Agreement and Stock Purchase Agreement. The Special Committee requested that Cowen render an opinion as to the fairness, from a financial point of view, to the Company of the consideration to be paid by the Company in the proposed transaction. At a meeting of the Special Committee held on March 14, 2018, Cowen rendered its oral opinion, which opinion was confirmed by delivery of a written opinion dated March 14, 2018, that, as of that date and based upon and subject to certain assumptions, factors and qualifications set forth in the written opinion, the consideration (as defined in “Special Factors−Opinion of Cowen”) to be paid by the Company in the proposed transaction is fair, from a financial point of view, to the Company. The full text of the written opinion of Cowen, dated March 14, 2018, is attached as Annex E and is incorporated by reference. Stockholders are urged to read the opinion in its entirety for the assumptions made, procedures followed, other matters considered and limits of the review by Cowen, including the definition of consideration used therein. The summary of the written opinion of Cowen set forth herein is qualified in its entirety by reference to the full text of such opinion. Cowen’s analyses and opinion were prepared for and addressed to the Special Committee and are directed only to the fairness, from a financial point of view, to the Company, of the consideration to be paid by the Company in the proposed transaction, and do not constitute an opinion as to the merits of the proposed transaction or a recommendation to the Company’s board or to any stockholder or any other person as to how to vote with respect to the proposed transaction. The consideration to be paid by the Company in the proposed transaction was determined through negotiations between the Special Committee and the Company and Ionis and not pursuant to recommendations of Cowen.

Potential Effects of the Transaction on Stockholders

If the stockholders that are disinterested with respect to the transaction approve the License Agreement and Stockholder Agreement and the transaction contemplated thereunder, Ionis’ percentage ownership of the Company will increase as a result of the Initial Issuance. In particular, following the issuance of shares of common stock at the closing of the transaction contemplated by the Stock Purchase Agreement (i.e. excluding any Milestone Payments), the Company expects that Ionis will own approximately 75.2% of the outstanding common stock and the other stockholders will own approximately 24.8% of the outstanding common stock. For more information regarding the ownership percentages following the transaction, see “The Transaction — Potential Effects of the Transaction on Stockholders.”

No Appraisal Rights in Connection with the Transaction

Appraisal rights are not available to stockholders in connection with the transaction contemplated by the License Agreement or the Stock Purchase Agreement or any of the proposals to be considered at the special meeting of stockholders described in this proxy statement. For more information, see “The Transaction – No Appraisal Rights in Connection with the Transaction.

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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS,
SPECIAL MEETING AND VOTING

Why am I receiving these proxy materials?

The board is soliciting your proxy to vote at the special meeting of stockholders of the Company because you owned shares of common stock at the close of business on March 21, 2018, the record date for the special meeting, and are therefore entitled to vote at the special meeting. This proxy statement, along with a proxy card or a voting instruction card, is being mailed to stockholders on or about March 26, 2018. This proxy statement summarizes the information that you need to know in order to cast your vote at the special meeting.

When and where will the special meeting be held?

The special meeting will be held at Akcea Therapeutics, Inc., 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142 on April 16, 2018, at 10:00 AM Eastern Time.

What items will be voted upon at the special meeting? How does the board recommend that I cast my vote?

At the special meeting, you will be asked to approve four proposals.

“Proposal no. 1” is a request for you to vote to approve the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the consummation of the transaction contemplated thereunder, including, as an upfront licensing fee, the issuance of 8,000,000 shares of common stock to Ionis and, to support the Company’s efforts to commercialize inotersen and AKCEA-TTR-LRx, the issuance of 10,666,666 shares of common stock to Ionis for $200 million in cash. The Company agreed to share inotersen and AKCEA-TTR-LRx profits and losses with Ionis as follows: for inotersen, beginning on the earlier of (i) the first day of the quarter after receipt of regulatory approval of inotersen in the United States, or (ii) January 1, 2019, the parties will share profits and losses from the development and commercialization of inotersen (A) on a 60/40 basis (60% to Ionis and 40% to the Company) through the end of the quarter in which the first commercial sale of AKCEA-TTR-LRx occurs, and (B) on a 50/50 basis commencing on the first day of the first quarter thereafter; and for AKCEA-TTR-LRx, beginning January 1, 2018, the parties will share all profits and losses from the development and commercialization of AKCEA-TTR-LRx on a 50/50 basis. Further, the Company is obligated to make certain payments to Ionis in connection with the achievement of certain development, regulatory and commercialization events. The Company may elect to pay each initial Milestone Payment in cash or shares of common stock (and notwithstanding this election, Ionis may require payment in shares of common stock). If the Company achieves the Milestone Event for aggregate worldwide annual net sales of the products of $750 million, all subsequent Milestone Payments must be paid in cash.

“Proposal no. 2” is a request for you to vote to approve the issuance of shares of common stock to Ionis pursuant to the License Agreement and the Stock Purchase Agreement as required by and in accordance with Nasdaq Listing Rule 5635, which is conditioned upon the approval of proposal no. 1.

“Proposal no. 3” is a request for you to vote to approve an amendment to the Amended and Restated Certificate of Incorporation to increase the Company’s authorized shares of common stock from 100,000,000 shares to 125,000,000 shares, which is conditioned upon the approval of proposal no. 1.

“Proposal no. 4” is a request for you to vote to approve any adjournment of the special meeting, if necessary or appropriate, to permit solicitation of additional proxies in favor of each of proposal no. 1 (disinterested stockholder approval), proposal no. 2 (share issuance) and proposal no. 3 (certificate amendment).

No matters will be presented for action at the special meeting other than the items described in this proxy statement. The board recommends that you vote “FOR” each of the Proposals.

Who is entitled to vote?

Only holders of record of common stock at the close of business on March 21, 2018 are entitled to notice of and to vote at the special meeting.

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Have any stockholders already agreed to vote for the proposals?

Pursuant to a stockholder voting agreement, Novartis agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock, representing approximately 9.4% of the shares issued and outstanding and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders.

Pursuant to the Stock Purchase Agreement, Ionis agreed to vote, or cause to be voted, all of its shares of common stock, representing approximately 68.2% of the shares issued and outstanding, in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment). Pursuant to a stockholder voting agreement, Novartis agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock, representing approximately 9.4% of the shares issued and outstanding and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders. Accordingly, proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) will not require the affirmative vote of any stockholder other than Ionis and Novartis, except that proposal no. 2 and proposal no. 3 are conditioned upon the approval of proposal no. 1.

Who is soliciting my proxy?

The board is soliciting your proxy to vote on all matters scheduled to come before the special meeting of stockholders, whether or not you attend in person. By completing and returning the proxy card, or by casting your vote via the internet or by telephone, you are authorizing the proxy holders to vote your shares at the special meeting as you have instructed.

What are the voting requirements to approve each of the proposals?

As of March 21, 2018, the record date for the special meeting, there were 66,720,111 shares of common stock outstanding. Ionis holds approximately 68.2% of the outstanding shares of common stock. Ionis has agreed, pursuant to the Stock Purchase Agreement, to vote, or cause to be voted, all of its shares in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment). Pursuant to a stockholder voting agreement, Novartis, holding approximately 9.4% of the outstanding common stock and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders, has agreed to vote, or caused to be voted, all of its shares in favor of each proposal. Accordingly, proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) will not require the affirmative vote of any stockholder other than Ionis and Novartis.

Proposal no. 1: The Stock Purchase Agreement contains a non-waivable condition requiring the approval of the Stock Purchase Agreement, the License Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder by a receipt of the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers.

Proposal no. 2: Proposal no. 2 requires the vote of a majority of the votes cast at the special meeting.

Proposal no. 3: Proposal no. 3 requires the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock.

Proposal no. 4: Proposal no. 4 requires the vote of a majority of the shares present in person or represented by proxy at the special meeting.

Why is the board recommending approval of each of the proposals?

After evaluating the transaction contemplated by the License Agreement and Stock Purchase Agreement, the Special Committee determined that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interests of the Company and recommended the transaction to the board. Based upon the recommendation of the Special Committee, the board approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder, declared each of the foregoing advisable and in the best interests of the Company and determined to submit it to the stockholders of the Company other than the Interested Stockholders. The board recommends that the stockholders vote “FOR” each of the proposals set forth in this proxy statement. In making this recommendation, the board considered a number of factors, including the following:

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the opportunity presented by the proposed transaction to enhance the Company’s pipeline, including the opportunity to commercialize two products in the near term (volanesorsen and inotersen), if approved, which offers the potential to create significant benefits for the Company’s stockholders, including diversifying product offerings, allowing the Company to better leverage its infrastructure, expanding the markets about which the Company will develop expertise and creating prospects for further growth opportunities;
that Ionis would purchase $200 million of the Company’s common stock priced by reference to a recent trading average, with no discount, to support the Company’s efforts to commercialize inotersen and AKCEA-TTR-LRx;
the terms of the License Agreement and the Stock Purchase Agreement, including the non-waivable requirement that the Stock Purchase Agreement must be approved by the affirmative vote of holders representing a majority of the issued and outstanding common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers;
the belief of the Special Committee that the terms of the proposed transaction were the most favorable that could reasonably be obtained and that further negotiation would have created an unacceptable risk that Ionis would withdraw its offer and abandon the License Agreement, in which event the Company’s stockholders would lose the present opportunity to create long-term value and position the Company for future opportunities;
the belief of the Special Committee that the consideration being paid to Ionis is fair and reasonable in relation to the market potential and expectations for the products and is expected to have an accretive impact on the long-term value of the Company accruing to the Company’s stockholders; and
the procedural fairness of the proposed transaction, including the formation of a special committee of independent disinterested directors with authority to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis.

For more information regarding the Special Committee, see “Special Factors — Reasons for the Proposed Transaction; Recommendations of the Special Committee and the Board.

What happens if stockholders do not approve proposal no. 1?

If proposal no. 1 (disinterested stockholder approval), a non-waivable condition to the closing of the transaction, is not approved by the affirmative vote of the holders of at least a majority of all issued and outstanding shares of common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers, the Stock Purchase Agreement and License Agreement will be terminated and the transaction contemplated thereby cannot be completed. Pursuant to the Stock Purchase Agreement, Ionis agreed to vote, or cause to be voted, all of its shares in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment). Pursuant to a stockholder voting agreement, Novartis agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock, representing approximately 9.4% of the shares issued and outstanding and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders. Accordingly, proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) will not require the affirmative vote of any stockholder other than Ionis and Novartis, except that proposal no. 2 and proposal no. 3 are conditioned upon the approval of proposal no. 1.

How many shares are eligible to be voted?

As of the record date of March 21, 2018, there were 66,720,111 shares of common stock issued and outstanding, each of which is entitled to one vote.

How many shares must be present to hold the special meeting?

Under Delaware law and the Amended and Restated Bylaws (the “bylaws”), the presence in person or by proxy of a majority of the outstanding shares of common stock entitled to vote is necessary to constitute a quorum at the special meeting. The inspector of election will determine whether a quorum is present. If you are a beneficial owner of shares of common stock and you do not instruct your bank, broker or other intermediary how

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to vote your shares on any of the proposals, your shares will not be counted as present at the special meeting for purposes of determining whether a quorum exists. Shares of stockholders of record who are present at the special meeting in person or by proxy will be counted as present at the special meeting for purposes of determining whether a quorum exists, whether or not such holder abstains from voting on any of the proposals. A quorum will be present at the special meeting because each of Ionis and Novartis, representing approximately 68.2% and 9.4% of the shares issued and outstanding, respectively, have agreed to vote, or cause to be voted, its shares at the meeting.

How do I vote?

Stockholders of Record

If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, you are the stockholder of record of those shares, and the Company has mailed these proxy materials to you. You may vote your shares by internet, telephone or by mail as further described below. Your vote authorizes each of Paula Soteropoulos, Michael MacLean and Jeffrey Goldberg as your proxies, each with the power to appoint his or her substitute, to represent and vote your shares as you directed.

Vote by Internet — www.proxyvote.com

Vote by Telephone — 1-800-690-6903

Use the internet or the telephone to transmit your voting instructions 24 hours a day, seven days a week up until 11:59 PM Eastern Time on April 15, 2018.

Please have your proxy card available and follow the instructions to obtain your records and create an electronic ballot.

Vote by Mail — Complete, date and sign your proxy card and return it in the postage-paid envelope provided to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

Only the latest dated proxy received from you, whether by internet, telephone or mail, will be voted at the special meeting. You may also vote in person at the special meeting.

Beneficial Owners

If your shares are held in a stock brokerage account, by a bank, broker or other intermediary, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your bank, broker or other intermediary that is considered the holder of record of those shares. As the beneficial owner, you have the right to direct your bank, broker or other intermediary on how to vote your shares via the internet or by telephone if the bank, broker or other intermediary offers these options or by signing and returning a proxy card. Your bank, broker or other intermediary will send you instructions for voting your shares. For a discussion of the rules regarding the voting of shares held by beneficial owners, see the questions below entitled “What happens if I return a proxy but don’t vote for a Proposal? What is discretionary voting? What is a broker non-vote?”

What happens if I don’t return a proxy or don’t attend the special meeting and vote my shares?

If you fail to vote on proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment), the effect will be the same as a vote against these proposals, but such failure to vote will not affect the outcome of proposal no. 2 (share issuance) or proposal no. 4 (adjournment).

What happens if I return a proxy but don’t vote for a proposal? What is discretionary voting? What is a broker non-vote?

If you properly execute and return a proxy or voting instruction card, your shares will be voted as you specify. If you are a stockholder of record and you make no specifications on your proxy card, your shares will be voted in accordance with the recommendations of the board, as provided above.

If you are a beneficial owner and you do not provide voting instructions to your bank, broker or other intermediary of record, your shares will not be voted with respect to any proposal for which your broker does not have authority to vote under the rules of the Nasdaq. Banks, brokers or other intermediaries of record have the authority under the rules of the Nasdaq to vote stock for which their customers do not provide voting instructions on certain routine matters.

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The Company believes that each of the proposals presented in this proxy statement is a non-routine matter. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your bank, broker or other intermediary of record, your shares will not be voted with respect to any of the proposals presented in this proxy statement. Without your voting instructions on these matters, a broker non-vote will occur with respect to your shares. A broker non-vote will have the same effect as a vote against proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment) but will not have an effect on proposal no. 2 (share issuance) or proposal no. 4 (adjournment). In addition, such shares will not be considered present at the special meeting for purposes of determining the existence of a quorum.

What is an abstention?

An abstention is a properly signed proxy card that is marked “ABSTAIN”. Abstentions will be counted for purposes of determining whether a quorum is present. In the case of proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment), abstentions do not constitute votes “FOR” the proposals, so will effectively count as votes “AGAINST” the proposals. In the case of proposal no. 2 (share issuance) and proposal no. 4 (adjournment), abstentions do not constitute votes “FOR” or votes “AGAINST” the proposals and, therefore, will have no effect on the outcome of such proposals.

Can I revoke or change my vote after I deliver my proxy?

Yes. Your proxy can be revoked or changed at any time before it is voted if you provide notice to the Company before the special meeting, if you timely provide to the Company another proxy with a later date or if you vote in person at the special meeting or notify the Company in writing at the special meeting of your wish to revoke your proxy.

Who pays for soliciting proxies?

The Company pays all expenses incurred in connection with the solicitation of proxies for the special meeting. The Company will also request banks, brokers, and other intermediaries holding shares of common stock beneficially owned by others to send this document to, and obtain proxies from, the beneficial owners and will reimburse holders for their reasonable expenses in so doing. Solicitation of proxies by mail may be supplemented by telephone, email and other electronic means, advertisements and personal solicitation by the Company’s directors, officers and employees. No additional compensation will be paid to the directors, officers or employees for such solicitation efforts.

Can any other business be conducted at the special meeting?

No. Under the bylaws and Delaware law, the business to be conducted at the special meeting will be limited to the purposes stated in the notice to stockholders provided with this proxy statement.

What happens if the special meeting is adjourned?

The special meeting may be adjourned for the purpose of, among other things, soliciting additional proxies. Pursuant to the bylaws, a special meeting of stockholders may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. Under Delaware law and the bylaws, the Company is not required to notify stockholders of any adjournments of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. Unless a new record date is fixed, your proxy will still be valid and may be voted at the adjourned meeting. You will still be able to change or revoke your proxy until it is voted.

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Where can I find the voting results of the special meeting?

The Company intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports that the Company files with the SEC are publicly available when filed. See the section entitled “Where You Can Find More Information” below.

Who should I call if I have questions or need assistance voting my shares?

If you have any questions or need assistance in voting your shares, please contact MacKenzie Partners, Inc., the firm assisting the Company in the solicitation of proxies, at:


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement includes forward-looking statements regarding the Company’s business, including with respect to the potential transaction and the therapeutic and commercial potential of inotersen and AKCEA-TTR-LRx. Any statement describing the Company’s 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, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. The Company’s forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause the Company’s 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 the section entitled “Risk Factors” in this proxy statement and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which is incorporated by reference into this proxy statement, including those identified in Item 1A entitled “Risk Factors”. Although the Company’s forward-looking statements reflect the good faith judgment of management, these statements are based only on facts and factors currently known by the Company. As a result, you are cautioned not to rely on these forward-looking statements.

In this proxy statement, unless the context requires otherwise, “Akcea,” “Company,” “we,” “our,” and “us” refers to Akcea Therapeutics, Inc. and its subsidiaries.

Although it is not possible to identify all of the risks and factors, they include, among others, statements relating to the following:

the success, cost, timing and potential indications of the Company’s drug development activities and clinical studies, including the ongoing and later studies of inotersen and AKCEA-TTR-LRx;
the Company and its partners' ability to obtain and maintain regulatory approval of the Company’s drugs, including inotersen and AKCEA-TTR-LRx, in any of the indications for which the Company plans to develop them, and any related restrictions, limitations, and/or warnings in the label of an approved drug;
the future results of ongoing or later clinical studies, including of inotersen and AKCEA-TTR-LRx;
the risk that the transaction will divert management’s attention and result in a potential disruption of the Company’s ongoing business;
the ability to integrate Ionis’ inotersen commercial team personnel into the Company, in connection with the transaction;
failure to obtain the disinterested stockholder approval contemplated by proposal no. 1, or to satisfy other conditions to closing of the transaction in a timely manner (or at all);
the risk that the key assumptions made in the financial projections, relating to, among other things, the consideration the Company paid for inotersen and AKCEA-TTR-LRx, the size of the patient population indicated for the products and the rate and degree of market acceptance of the products, do not materialize or prove correct;
the Company’s plans to research, develop and commercialize its drugs;
the size and growth potential of the markets for the Company’s drugs, and the Company’s ability to identify target patient populations and serve those markets, especially for diseases with small patient populations;
the Company’s ability to successfully commercialize the Company’s drugs;
the rate and degree of market acceptance of the Company’s drugs;
the Company’s ability to grow its organization and increase the size of its facilities to meet its anticipated growth;
the Company’s ability to develop and maintain sales and marketing capabilities, whether alone or with potential future strategic partners;

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the Company’s ability to maintain third-party suppliers and manufacturers and their ability to perform adequately;
the success of competing therapies that are or become available;
the Company’s ability to attract and retain key scientific, commercial or management personnel;
the accuracy of the Company’s estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
the Company’s expectations regarding its ability to obtain and maintain intellectual property protection for its drugs and its ability to operate its business without infringing on the intellectual property rights of others;
the risk of an adverse outcome of any legal proceedings that may be instituted against the Company; and
regulatory developments in the United States and foreign countries.

These risks are not exhaustive. The Company operates in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for management to predict all risk factors nor can the Company assess the effects of all factors on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

In light of these risks, uncertainties and other factors, the forward-looking statements contained in this proxy statement might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this proxy statement, the appendices and the documents that incorporated by reference in this proxy statement, with the understanding that the Company’s actual future results, levels of activity, performance and achievements may be materially different from what the Company expects. Statements that “we believe” and similar statements reflect the Company’s beliefs and opinions on the relevant subject. These statements are based upon information available to the Company as of the date of this proxy statement, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

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RISK FACTORS

The proposed transaction contemplated by the License Agreement and Stock Purchase Agreement involve significant risks, many of which cannot be predicted and will be beyond the Company’s control. In addition to the other information contained in this proxy statement, you should carefully consider the risks described below and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, which is incorporated by reference into this proxy statement, before deciding how to vote your shares of the Company’s common stock.

Risks Related to the Transaction

The Company may not realize the benefits of the proposed transaction if the Company is unable to successfully transition, integrate and support the development and commercialization of inotersen and AKCEA-TTR-LRx.

If the proposed transaction is consummated, the Company will need to successfully transition, integrate and support the assets it would acquire related to the commercialization and development of inotersen and AKCEA-TTR-LRx if the Company is to realize any of the potential benefits of the proposed transaction. The failure to meet these integration challenges, including the addition of inotersen commercial team and other employees from Ionis and the coordination across geographies between the Company’s headquarters in Massachusetts and its commercialization team in other locations, including major global markets, could seriously harm the Company’s results of operations. The Company’s failure to implement an orderly integration could result in failure of, or delays in, the development or commercialization of inotersen and AKCEA-TTR-LRx. Such failure or delay could adversely impact the Company’s business, results of operations, financial condition and prospects for future growth.

The terms of the License Agreement may limit the Company’s ability to achieve the expected benefits of the transaction.

While the Company expects that, if consummated, the proposed transaction will, on the whole, bolster the Company’s capabilities, certain terms of the License Agreement and its other agreements with Ionis may limit the Company’s ability to achieve the expected benefits of the transaction, including:

a Joint Steering Committee, or JSC, having equal membership from the Company and Ionis, sets the development strategy for the Company’s drugs by mutual agreement. A Regulatory Sub-committee, established by the JSC and having equal membership from the Company’s company and Ionis, will set the regulatory strategy for each of the Company’s drugs by mutual agreement. If the JSC or the Regulatory Sub-committee cannot come to a mutual agreement, then this could delay the Company’s ability to develop and commercialize inotersen and AKCEA-TTR-LRx. In the event of a disagreement at the JSC, Ionis has final decision making authority on decisions relating to development matters, Akcea has final decision making authority on decision relating to commercial matters, and the holder of the regulatory approvals for a product in a country has final decision making authority for regulatory affairs;
the Company will need Ionis’ consent prior to granting any sublicense to a third party for inotersen or AKCEA-TTR-LRx. If Ionis does not grant such consent with respect to a sublicense, then the Company would not be able to enter into such arrangement, which could delay or prevent the Company’s ability to develop and commercialize inotersen and AKCEA-TTR-LRx;
the Company will need to obtain Ionis’ approval to in-license a product, acquire a product or acquire another company, until the time Ionis ceases to hold at least 50% of the Company’s outstanding capital stock;
the Company only has the right to lead the prosecution and enforcement of certain of the patent rights licensed to the Company under the License Agreement, so called product-specific patent rights. Ionis will control the prosecution and enforcement of other patent rights licensed to the Company, and they may do so in a manner that does not advance or is inconsistent with the Company’s interests; and
although the Company’s agreements with Ionis prohibit Ionis from developing and commercializing drugs that modulate TTR via the binding of such drug to the RNA that encodes TTR using the technology licensed to the Company under the License Agreement, Inonis is free to pursue other products that treat the same indications that would be treated by inotersen and AKCEA-TTR-LRx.

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Each of the foregoing terms and Ionis’ other rights under the license agreement, could limit the Company’s ability to realize the expected benefits of the license agreement or otherwise limit the Company’s ability to pursue transactions or development efforts other stockholders may view as beneficial.

The development and commercialization of inotersen and AKCEA-TTR-LRx may place strain on the management team’s time and attention and may divert the management team’s attention from the Company’s other existing products.

Although the Company has personnel with experience commercializing drugs, the Company itself has never obtained regulatory approval for, or commercialized, any product. If the proposed transaction is consummated, and if regulatory approval is obtained, the Company plans to commercially launch both inotersen and volanesorsen during 2018. The commercial launches of the products will require significant efforts and the devotion of substantial resources, as the Company will need to finalize regulatory submissions, ensure the manufacturing of sufficient quantities of product to support long-term commercial sales and integrate, optimize or maintain, as applicable, the global sales, marketing, medical, for each of volanesorsen and inotersen, and patient support infrastructure, which may place pressure on the management team’s time and attention. These efforts may also divert the attention of the management team from the Company’s other business operations, such as the development or commercialization of the Company’s other pipeline products, including volanesorsen, AKCEA-APO(a)-LRx, AKCEA-ANGPTL3-LRx and AKCEA-APOCIII-LRx. As a result, the Company’s business, results of operations, financial condition and prospects for future growth could be adversely impacted and the market price of the Company’s common stock may decline.

The transaction, including the Initial Issuance and the potential payment of certain Milestone Payments in shares of the Company’s common stock pursuant to the Payment Election, will further increase Ionis’ ownership of the Company, and the increased ownership concentration and increased importance of Akcea, Ionis may prevent the Company’s other stockholders from influencing significant decisions for a longer period of time.

As of March 1, 2018, Ionis owns approximately 68.2% of the Company’s outstanding common stock. If the proposed transaction is consummated, immediately following the Initial Issuance, Ionis will own approximately 75.2% of the Company’s common stock, which ownership will be expected to increase further if the Company achieves certain Milestone Events and pays the associated Milestone Payment in shares of common stock pursuant to the Payment Election. As long as Ionis beneficially controls a majority of the voting power of the Company’s outstanding common stock, Ionis will generally be able to determine the outcome of all corporate actions requiring stockholder approval, including the election and removal of directors. Even if Ionis were to control less than a majority of the voting power of the Company’s outstanding common stock, it may influence the outcome of such corporate actions so long as it owns a significant portion of the Company’s common stock. If Ionis continues to hold its shares of the Company’s common stock, it could remain the Company’s controlling stockholder for an extended period of time or indefinitely. The proposed transaction will increase Ionis’ ownership percentage, and this increase, along with Ionis’ increased reliance on Akcea as a commercialization partner, given that Akcea could now be commercializing at least two Ionis-developed products (volanesorsen and inotersen), may increase the length of time during which Ionis will control the Company.

Among the proposed terms of the transaction are several changes to the Company’s Investor Rights Agreement with Ionis in light of Ionis’ increased ownership percentage and increased investment in and reliance on the Company. For more detail regarding these changes, see “The Transaction−Investor Rights Agreement” on page 54. As a general matter, these changes increase Ionis’ control over the Company’s affairs. In addition, the License Agreement requires Ionis’s consent to the budget related to the commercialization of inotersen and AKCEA-TTR-LRx.

Ionis’ interests may not be the same as, or may conflict with, the interests of the Company’s other stockholders. You will not be able to affect the outcome of any stockholder vote while Ionis controls the majority of the voting power of the Company’s outstanding common stock, unless Ionis agrees to seek approval of matters by minority stockholders, as is the case with the proposed transaction. As a result, Ionis can control, directly or indirectly and subject to applicable law, all matters affecting the Company, including:

any determination with respect to the Company’s business strategy and policies, including the appointment and removal of officers and directors;
any determinations with respect to mergers, business combinations or disposition of assets;

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the Company’s financing and dividend policy; compensation and benefit programs and other human resources policy decisions;
termination of, changes to or determinations under the Company’s agreements, including the License Agreement and the Services Agreement, with Ionis;
changes to any other agreements that may adversely affect the Company; and determinations with respect to the Company’s tax returns.

Because Ionis’ interests may differ from the Company’s or yours, actions that Ionis takes with respect to the Company, as the Company’s controlling stockholder, may not be favorable to the Company or you.

You will experience dilution of your minority ownership position as a consequence of the issuance of shares of the Company’s common stock in connection with the transaction, including the Initial Issuance and the potential payment of certain Milestone Payments in shares of the Company’s common stock pursuant to the Payment Election. Dilution of your minority ownership position may further reduce the influence that you have on the Company’s management, and could cause the Company’s stock price to decline.

If the proposed transaction is consummated, the Company’s stockholders other than Ionis will experience dilution of their minority ownership positions upon the issuance of the Company’s common stock pursuant to the Initial Issuance and if the Company pays for certain Milestone Payments in shares of the Company’s common stock pursuant to the Payment Election. Such dilution could, among other things, further limit your ability to influence the Company’s management, including through the election of directors following the consummation of the transaction, and could cause the Company’s stock price to decline.

Certain of the Company’s directors may have actual or potential conflicts of interest because of their positions with Ionis.

Stanley T. Crooke, Chairman of the Board and Chief Executive Officer for Ionis, and B. Lynne Parshall, Senior Strategic Advisor and board member for Ionis, serve on the Company’s board of directors and retain their positions or engagements with Ionis. In addition, these individuals own Ionis equity and Ionis equity awards. Ionis common stock, options to purchase Ionis common stock and other Ionis equity awards represent a meaningful portion of these individuals' net worth. Their position at Ionis and the ownership of any Ionis equity or equity awards creates, or may create the appearance of, conflicts of interest when the Company asks these individuals to make decisions that could have different implications for Ionis than the decisions have for the Company. In addition, the Company’s certificate of incorporation provides for the allocation of certain corporate opportunities between the Company and Ionis. Under these provisions, neither Ionis or its other affiliates, nor any of their officers, directors, agents or stockholders, will have any obligation to present to the Company certain corporate opportunities. For example, a director of the Company’s who also serves as a director, officer or employee of Ionis or any of its other affiliates may present to Ionis certain acquisitions, in-licenses, potential development programs or other opportunities that may be complementary to the Company’s business and, as a result, such opportunities may not be available to the Company. To the extent attractive corporate opportunities are allocated to Ionis or its other affiliates instead of to the Company, the Company may not be able to benefit from these opportunities.

Risks Related to Clinical Development, Regulatory Review and Approval

Clinical studies for either inotersen or AKCEA-TTR-LRx may not demonstrate safety or efficacy at the level required by the FDA and foreign regulatory authorities for product approval.

The FDA and EMA are currently reviewing the Company’s application for regulatory approval for inotersen. If the proposed transaction is consummated, the Company and Ionis intend to conduct clinical studies for AKCEA-TTR-LRx and may conduct further clinical studies for inotersen.

Even if positive results on the endpoints for the clinical studies are achieved, the FDA or foreign regulatory authorities may believe the clinical studies do not show the appropriate balance of safety and efficacy in the indication being sought or may interpret the data differently than the Company does, and may deem the results insufficient to demonstrate the appropriate balance of safety and efficacy at the level required for product approval. For example, the FDA or foreign regulatory authorities could claim that the Company has not tested either inotersen or AKCEA-TTR-LRx in a sufficient number of patients to demonstrate that the drug is safe and

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effective in patients with hATTR or other indications to support an application for marketing authorization for the applicable indication. In such a case, the Company may need to conduct additional clinical studies before obtaining marketing authorization, which would be expensive and delay the development and commercialization of the drug.

Any failure to obtain approval for inotersen on the timeline that the Company currently anticipates, or at all, would have a material and adverse impact on the Company’s business, prospects, financial condition and results of operations and could cause the Company’s stock price to decline.

If the results of clinical testing indicate that AKCEA-TTR-LRx is not suitable for commercial use, the Company may need to abandon AKCEA-TTR-LRx.

Drug discovery and development have inherent risks and the historical failure rate for drugs is high. Antisense drugs are a relatively new approach to therapeutics. If the Company cannot demonstrate that AKCEA-TTR-LRx is safe and effective for human use in the intended indication to the satisfaction of the FDA, the Company may need to abandon AKCEA-TTR-LRx.

If AKCEA-TTR-LRx does not show sufficient safety and efficacy in patients with the targeted indication, it would negatively affect the Company’s development and commercialization goals for the drug and the Company would have expended significant resources with little or no benefit to the Company.

The Company may not be able to benefit from orphan drug designation for either inotersen or AKCEA-TTR-LRx.

The FDA has granted inotersen Orphan Drug Designation for the treatment of patients with polyneuropathy due to hereditary TTR amyloidosis (hATTR), and the EMA has granted Orphan Drug Designation to inotersen for the treatment of patients with ATTR. In the United States, under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process, but it can provide financial incentives, such as tax advantages and user-fee waivers, as well as longer regulatory exclusivity periods.

The FDA granted inotersen Orphan Drug Designation and Fast Track Status, and on January 8, 2018, the FDA accepted inotersen’s New Drug Application and set a Prescription Drug User Fee Act (“PDUFA”) date of July 6, 2018. The EMA also granted accelerated assessment to inotersen, which may reduce standard review time.

The Company may lose orphan drug exclusivity for inotersen, for example, if the FDA determines that the request for designation was materially defective or if the Company cannot maintain sufficient quantity of the applicable drug to meet the needs of patients with the rare disease or condition.

Even if the Company maintains orphan drug exclusivity for inotersen or obtains orphan drug exclusivity for the AKCEA-TTR-LRx, the exclusivity may not effectively protect the drug from competition because regulatory authorities still may authorize different drugs for the same condition.

The Company may expend the Company’s limited resources to pursue the development and commercialization of inotersen and AKCEA-TTR-LRx and fail to capitalize on drugs or indications that may be more profitable or for which there is a greater likelihood of success.

If the proposed transaction is consummated, the Company will dedicate a substantial amount of the Company’s resources to commercialize, if approved, inotersen and support the continued development of AKCEA-TTR-LRx. As a result, the Company may forego or delay pursuit of opportunities with the Company’s other drugs or for other indications that later prove to have greater commercial potential. The Company’s resource allocation decisions may cause the Company to fail to capitalize on viable commercial drugs or profitable market opportunities. The Company’s spending on development and commercialization plans for either inotersen or AKCEA-TTR-LRx may not generate profits.

Either inotersen or AKCEA-TTR-LRx could be subject to regulatory limitations following approval.

Even if inotersen or AKCEA-TTR-LRx is approved, the Company and the Company’s partners must comply with comprehensive government regulations regarding the manufacture, marketing and distribution of drug

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products. Promotional communications regarding prescription drugs must be consistent with the information in the product's approved labeling. The Company and the Company’s partners may not obtain the labeling claims necessary or desirable to successfully commercialize either inotersen or AKCEA-TTR-LRx.

The FDA and foreign regulatory authorities can impose significant restrictions on an approved drug product, including inotersen or AKCEA-TTR-LRx, through the product label and on advertising, promotional and distribution activities.

In addition, when approved, the FDA or a foreign regulatory authority may condition approval on the performance of post-approval clinical studies or patient monitoring, which could be time consuming and expensive. If the results of such post-marketing studies are not satisfactory, the FDA or a foreign regulatory authority may withdraw marketing authorization or may condition continued marketing on commitments from the Company or the Company’s partners that may be expensive and/or time consuming to fulfill.

In addition, if the Company or others identify side effects after either inotersen or AKCEA-TTR-LRx is on the market, if manufacturing problems occur subsequent to regulatory approval, or if the Company, the Company’s manufacturers or the Company’s partners fail to comply with regulatory requirements, with respect to either inotersen or AKCEA-TTR-LRx, the Company or the Company’s partners could be subject to:

restrictions on the Company’s ability to conduct clinical studies, including full or partial clinical holds on ongoing or planned clinical studies;
restrictions on the manufacturing processes of either inotersen or AKCEA-TTR-LRx;
changes to the product label;
restrictions on the marketing of either inotersen or AKCEA-TTR-LRx;
restrictions on the distribution of either inotersen or AKCEA-TTR-LRx;
requirements to conduct post-marketing clinical studies;
Untitled or Warning Letters;
withdrawal of either inotersen or AKCEA-TTR-LRx from the market;
refusal to approve pending applications or supplements to approved applications that the Company submit;
recall of either inotersen or AKCEA-TTR-LRx;
fines, restitution or disgorgement of profits or revenue;
suspension or withdrawal of regulatory approvals;
refusal to permit the import or export of either inotersen or AKCEA-TTR-LRx;
product seizure;
injunctions; or
imposition of civil or criminal penalties.

Any one or a combination of these events could prevent the Company from achieving or maintaining market acceptance of either inotersen or AKCEA-TTR-LRx or could substantially increase the costs and expenses of commercializing either inotersen or AKCEA-TTR-LRx, which in turn could delay or prevent the Company from generating any revenue or profit from the sale of either inotersen or AKCEA-TTR-LRx.

Risks Related to the Commercialization of inotersen and AKCEA-TTR-LRx

If the Company cannot establish effective marketing and sales capabilities or enter into agreements with third parties to market and sell either inotersen or AKCEA-TTR-LRx, the Company may not generate product revenue from either inotersen or AKCEA-TTR-LRx.

If the proposed transaction is consummated and if either inotersen or AKCEA-TTR-LRx is approved, for the Company to successfully commercialize the drugs, the Company must successfully manage its marketing, sales and distribution capabilities or make arrangements with third parties to perform these services. The Company

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may not be successful in doing so. To commercialize either inotersen or AKCEA-TTR-LRx in the initial indications the Company plans to pursue, the Company will need to optimize and maintain a specialty sales force in each global region the Company expects to market the applicable drug, supported by case managers, reimbursement specialists, partnerships with specialty pharmacies, injection training, routine platelet and renal monitoring and a medical affairs team. The Company may seek to further penetrate markets by expanding the Company’s sales force or through strategic partnerships with other pharmaceutical or biotechnology companies or third-party sales organizations.

Even though certain members of the Company’s management team and other employees have experience commercializing drug products, the Company has no prior experience marketing, selling or distributing drug products, and there are significant risks involved in building and managing a commercial infrastructure. It will be expensive and time consuming for the Company to maintain the Company’s own sales force and related compliance protocols to market either inotersen or AKCEA-TTR-LRx. The Company may never successfully optimize or manage this capability and any failure could delay or preclude the launch of either inotersen or AKCEA-TTR-LRx. The Company and the Company’s partners, will have to compete with other companies to recruit, hire, train, manage and retain marketing and sales personnel.

The Company will incur expenses prior to the respective launches of inotersen and AKCEA-TTR-LRx to integrate and manage the marketing and sales infrastructure. If regulatory requirements or other factors cause a delay in the commercial launch of either inotersen or AKCEA-TTR-LRx, the Company would incur additional expenses for having invested in these capabilities earlier than required and prior to realizing any revenue from sales of either inotersen or AKCEA-TTR-LRx. The Company’s sales force and marketing teams may not successfully commercialize either inotersen or AKCEA-TTR-LRx.

To the extent the Company relies on third parties to commercialize any drug products, the Company may receive less revenue than if the Company commercialized either inotersen or AKCEA-TTR-LRx by itself and the Company would have less control over the sales efforts of any other third parties involved in the Company’s commercialization efforts for either inotersen or AKCEA-TTR-LRx.

The Company plans to rely on third-party specialty channels to distribute either inotersen or AKCEA-TTR-LRx. If the Company cannot effectively manage this distribution process, it could harm or delay the commercial launch and sales of either inotersen or AKCEA-TTR-LRx.

If the proposed transaction is consummated, the Company and the Company’s strategic partners may contract with, and rely on, third-party specialty pharmacies to distribute either inotersen or AKCEA-TTR-LRx. A specialty pharmacy is a pharmacy that specializes in dispensing medications for complex or chronic conditions, a process that requires a high level of patient education and ongoing management. The Company’s management team will need to devote a significant amount of its attention to managing this distribution network. If the Company cannot effectively manage this distribution process, the commercial launch and sales of either inotersen or AKCEA-TTR-LRx will be delayed or less successful, which would harm the Company’s results of operations.

In addition, the use of specialty pharmacies involves certain risks, including, but not limited to, risks that these organizations will:

not provide the Company with accurate or timely information regarding their inventories, the number of patients who are using either inotersen or AKCEA-TTR-LRx or complaints regarding either inotersen or AKCEA-TTR-LRx;
not effectively support either inotersen or AKCEA-TTR-LRx;
reduce or discontinue their efforts to support either inotersen or AKCEA-TTR-LRx;
not devote the resources necessary to support either inotersen or AKCEA-TTR-LRx in the volumes and within the time frames that the Company expects;
not satisfy financial obligations to the Company or others; or
cease operations.

Any such events may result in decreased sales and lower revenue for either inotersen or AKCEA-TTR-LRx, which could have a material adverse effect on the Company’s business, prospects, financial condition and results of operations.

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If the market does not accept either inotersen or AKCEA-TTR-LRx, the Company is not likely to generate substantial product revenue from either inotersen or AKCEA-TTR-LRx, and this may hurt the Company’s profitability.

Even if the Company obtains a marketing authorization for either inotersen or AKCEA-TTR-LRx, the Company’s success will depend upon the medical community, patients and third-party payors accepting inotersen and AKCEA-TTR-LRx as applicable, as medically useful. Even if the FDA or foreign regulatory authorities authorize the Company’s drugs for commercialization, doctors may not prescribe either inotersen or AKCEA-TTR-LRx to treat patients.

Additionally, in many of the markets where the Company may sell either inotersen or AKCEA-TTR-LRx in the future, if the Company cannot agree with the government or other third-party payors regarding the price the Company can charge for either inotersen or AKCEA-TTR-LRx, then the Company may not be able to sell either inotersen or AKCEA-TTR-LRx in that market. Similarly, cost control initiatives by governments or third-party payors could decrease the price received for either inotersen or AKCEA-TTR-LRx or increase patient coinsurance to a level that makes commercializing either drug economically unviable.

The degree of market acceptance for inotersen and AKCEA-TTR-LRx depends upon a number of factors, including the:

receipt and scope of marketing authorizations;
establishment and demonstration in the medical and patient community of the efficacy and safety of inotersen and AKCEA-TTR-LRx and their potential advantages over competing products;
cost and effectiveness of inotersen and AKCEA-TTR-LRx compared to other available therapies;
patient convenience of the dosing regimen for inotersen and AKCEA-TTR-LRx;
competition from competing therapies; and
reimbursement by government and third-party payors.

Based on the profile of either inotersen or AKCEA-TTR-LRx, physicians, patients, patient advocates, payors or the medical community in general may not accept and/or use either inotersen or AKCEA-TTR-LRx.

The patient population suffering from hATTR is small and has not been established with precision. If the actual number of patients is smaller than the Company estimates, or if the Company cannot raise awareness of the disease and diagnosis is not improved, the Company’s revenue and ability to achieve profitability from either inotersen or AKCEA-TTR-LRx may be adversely affected.

The Company’s estimate of the sizes of the patient populations are based on published studies as well as internal analyses. If the proposed transaction is consummated and if the results of these studies or the Company’s analyses of them do not accurately reflect the number of patients with hATTR, the Company’s assessment of the market potential for either inotersen or AKCEA-TTR-LRx may be inaccurate, making it difficult or impossible for the Company to meet the Company’s revenue goals, or to obtain and maintain profitability. In addition, as is the case with most orphan diseases, if the Company cannot successfully raise awareness of these diseases and improve diagnosis, it will be more difficult or impossible to achieve profitability. For these initial indications, the Company may not maintain or obtain sufficient sales volume at a price high enough to justify the Company’s product development efforts and the Company’s sales and marketing and manufacturing expenses.

If the Company fails to compete effectively, either inotersen or AKCEA-TTR-LRx will not contribute significant revenue.

There are several pharmaceutical and biotechnology companies engaged in the development or commercialization of products that may compete with either inotersen or AKCEA-TTR-LRx. For example, if approved, inotersen could face competition from drugs like patisiran and ALN-TTRsc02 in development by Alnylam, Tafamidis commercialized in Europe and in development by Pfizer and Tolcapone in development by SOM Biotech, and the generic drug Diflunisal. If either inotersen or AKCEA-TTR-LRx cannot compete effectively with products with common or similar indications, the Company may not be able to generate substantial revenue from either inotersen or AKCEA-TTR-LRx.

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The Company’s competitors may succeed in developing drugs that are:

safer than either inotersen or AKCEA-TTR-LRx;
more effective than either inotersen or AKCEA-TTR-LRx;
priced lower than either inotersen or AKCEA-TTR-LRx;
reimbursed more favorably by government and other third-party payors than either inotersen or AKCEA-TTR-LRx; or
more convenient to use than either inotersen or AKCEA-TTR-LRx.

Many of these competitors have substantially greater financial, technical and human resources than the Company does. In addition, many of these competitors have significantly greater experience than the Company does in conducting preclinical testing and human clinical studies, in obtaining FDA and other regulatory authorizations and in commercializing pharmaceutical products. Accordingly, the Company’s competitors may succeed in obtaining regulatory authorization for products earlier than the Company does for its products, including either inotersen or AKCEA-TTR-LRx. Marketing and sales capability is another factor relevant to the competitive position of inotersen and AKCEA-TTR-LRx, and many of the Company’s competitors will have greater marketing and sales capabilities than the Company’s capabilities. Further, inotersen and AKCEA-TTR-LRx are delivered by injection, which may render them less attractive to patients than non-injectable products offered by the Company’s current or future competitors.

These competitive developments could make either inotersen or AKCEA-TTR-LRx obsolete or non-competitive.

If government or other third-party payors fail to provide adequate coverage and payment rates for either inotersen or AKCEA-TTR-LRx, revenue and prospects for profitability for either inotersen or AKCEA-TTR-LRx will be limited.

If the proposed transaction is consummated, in both domestic and foreign markets, sales of inotersen and AKCEA-TTR-LRx will depend in part upon the availability of coverage and reimbursement from third-party payors. The majority of patients in the United States who would fit within the Company’s target patient populations for either inotersen or AKCEA-TTR-LRx have their healthcare supported by a combination of Medicare coverage, other government health programs such as Medicaid, managed care providers, private health insurers and other organizations. Coverage decisions may depend upon clinical and economic standards that disfavor either inotersen or AKCEA-TTR-LRx when more established or lower cost therapeutic alternatives are already available or subsequently become available. Assuming coverage is approved, the resulting reimbursement payment rates might not be enough to make either inotersen or AKCEA-TTR-LRx affordable. Accordingly, if approved, either inotersen or AKCEA-TTR-LRx may face competition from other therapies and drugs for limited financial resources. The Company may need to conduct post-marketing studies to demonstrate inotersen or AKCEA-TTR-LRx cost-effectiveness to satisfy third-party payors. These studies might require the Company to commit a significant amount of management time and financial and other resources. Third-party payors may never consider either inotersen or AKCEA-TTR-LRx as cost-effective. Adequate third-party coverage and reimbursement might not be available to enable the Company to maintain price levels sufficient to realize an appropriate return on investment in product development.

Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In addition, in the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for drug products, including inotersen and AKCEA-TTR-LRx, can differ significantly from payor to payor. Further, the Company believes that future coverage and reimbursement will likely be subject to increased restrictions both in the United States and in international markets. For example, in the United States, recent health reform measures have resulted in reductions in Medicare and other healthcare funding, and there have been several recent U.S. Congressional inquiries and proposed federal legislation designed to, among other things, reform government program reimbursement methodologies for drug products and bring more transparency to drug pricing. Third-party coverage and reimbursement for either inotersen or AKCEA-TTR-LRx may not be available or adequate in either the United States or international markets, which would negatively affect the potential commercial success of either inotersen or AKCEA-TTR-LRx, the Company’s revenue and the Company’s profits.

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Risks Related to Dependence on Third Parties

If the Company cannot manufacture either inotersen or AKCEA-TTR-LRx or contract with a third party to manufacture inotersen or AKCEA-TTR-LRx, as applicable, at costs that allow the Company to charge competitive prices to buyers, the Company will not be able to operate profitably.

If the proposed transaction is consummated, to successfully commercialize either inotersen or AKCEA-TTR-LRx, the Company will need to maintain commercial manufacturing capabilities either on the Company’s own or through a third-party manufacturer. The Company has no direct experience manufacturing pharmaceutical products of the chemical class represented by inotersen and AKCEA-TTR-LRx, called oligonucleotides, on a commercial scale for the systemic administration of a drug. The Company expects to rely on third party commercial manufacturing organizations (“CMOs”) to produce inotersen and AKCEA-TTR-LRx if the transaction is consummated. The Company’s business could be negatively affected if one or more of these CMOs ceased to provide the Company with this capability for any reason. Further, if the Company cannot continue to acquire raw materials from these suppliers on commercially reasonable terms or at all, the Company may be required to find alternative suppliers, which could be expensive and time consuming and negatively affect the Company’s ability to develop or commercialize either inotersen or AKCEA-TTR-LRx in a timely manner or at all. The Company may not be able to have either inotersen or AKCEA-TTR-LRx manufactured at a cost or in quantities necessary to make commercially successful products.

The Company cannot guarantee that the Company will have a steady supply of inotersen to satisfy market demand if commercialized at prices that are commercially acceptable, or to complete clinical studies, make registration batches for approval or commercialize AKCEA-TTR-LRxat prices that are commercially acceptable. In addition, if the Company needs to change manufacturers for any reason, the Company will need to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. The delays associated with verifying a new manufacturer could negatively affect the Company’s ability to develop and commercialize these drugs in a timely manner or within budget.

Also, manufacturers must adhere to the FDA's current Good Manufacturing Practices regulations and similar regulations in foreign countries, which the applicable regulatory authorities enforce through facilities inspection programs. The Company’s contract manufacturers may not comply or maintain compliance with Good Manufacturing Practices, or similar foreign regulations. Non-compliance could significantly delay or prevent receipt of marketing authorization for either inotersen or AKCEA-TTR-LRx, including authorizations either inotersen or AKCEA-TTR-LRx, or result in enforcement action after authorization that could limit the commercial success of either inotersen or AKCEA-TTR-LRx.

The Company anticipates that it will depend on Ionis and third parties to conduct the Company’s clinical studies for AKCEA-TTR-LRx, and any failure of those parties to fulfill their obligations could adversely affect the Company’s development and commercialization plans.

If the proposed transaction is consummated, the Company expects to depend on Ionis and independent clinical investigators, contract research organizations and other third-party service providers to conduct the clinical studies for AKCEA-TTR-LRx. The Company relies heavily on these parties for successful execution of the Company’s clinical studies, but does not control many aspects of their activities. For example, typically, the investigators are not the Company’s employees. However, the Company is responsible for ensuring that these third parties conduct each of the Company’s clinical studies in accordance with the general investigational plan, approved protocols for the study and applicable regulations. Ionis and these third parties may not complete activities on schedule or may not conduct the Company’s clinical studies in accordance with regulatory requirements or the Company’s stated protocols. The failure of these parties to carry out their obligations or a termination of the Company’s relationship with these third parties could delay or prevent the development, marketing authorization and commercialization of AKCEA-TTR-LRx.

Risks Related to Intellectual Property

If the Company materially breaches the Company’s obligations under the License Agreement, the Company could lose the Company’s rights to inotersen and AKCEA-TTR-LRx.

If the proposed transaction is consummated, the Company will obtain the Company’s rights to inotersen and AKCEA-TTR-LRx pursuant to the License Agreement with Ionis. If the Company materially breaches the Company’s obligations under the License Agreement and, as a result, Ionis subsequently exercises its right to

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terminate it, the Company generally would not be able to continue to develop or commercialize inotersen and AKCEA-TTR-LRx, and Ionis would receive a royalty-free, nonexclusive license to the Company’s improvements to those programs, if any, meaning the Company would lose the benefits of the Company’s investment in these programs.

If the Company cannot protect the Company’s patent rights or the Company’s other proprietary rights related to inotersen and AKCEA-TTR-LRx, others may compete more effectively against the Company.

The Company’s success depends to a significant degree upon whether Ionis has secured, and the Company can continue to secure and maintain, intellectual property rights that protect the Company’s product candidates, including, if the proposed transaction is consummated, inotersen and AKCEA-TTR-LRx. Under the License Agreement, the Company licensed from Ionis rights in patents and patent applications related to inotersen and AKCEA-TTR-LRx, and the Company may in the future own or license additional patent rights. All such patents and patent applications, collectively, are referred to as the Company’s patents and patent applications. Additional patents related to inotersen and AKCEA-TTR-LRx may not issue from any currently pending patent applications or from any patent applications that may be filed in the future in the United States or in other countries, and the Company may not be able to obtain, maintain or enforce the Company’s patents and other intellectual property rights which could impact the Company’s ability to compete effectively. In addition, the scope of any of the patents that have or may issue related to inotersen or AKCEA-TTR-LRx may not be sufficiently broad to provide the Company with a competitive advantage. Furthermore, other parties may successfully challenge, invalidate or circumvent the applicable issued patents so that the Company’s patent rights do not create an effective competitive barrier or revenue source.

If the proposed transaction is consummated, the Company will receive an exclusive license to develop and commercialize inotersen and AKCEA-TTR-LRx under a patent portfolio related to inotersen and AKCEA-TTR-LRx that will include:

issued and pending patent claims covering inotersen as a composition of matter, formulation and/or method of use in numerous jurisdictions worldwide, including in the United States and Europe;
pending patent applications designed to specifically protect the AKCEA-TTR-LRx composition in the United States and numerous other jurisdictions; and
issued and pending patent claims covering the technology underlying AKCEA-TTR-LRx in numerous jurisdictions worldwide, including in the United States and Europe.

The natural term of the last expiring issued U.S. patent covering the composition of matter of inotersen will expire in 2031. Patents issued in other countries will have the same natural term. The Company plans to seek to extend the term of one patent covering each product candidate, if approved, in the U.S. and any other jurisdictions where such extension is available, based upon the development and regulatory review periods for such product candidates and in accordance with applicable laws.

The Company cannot be certain that the U.S. Patent and Trademark Office (the “U.S. PTO”) and courts in the United States or the patent offices and courts in foreign countries will consider the claims in the Company’s patents and applications covering inotersen and AKCEA-TTR-LRx as patentable.

If the Company, Ionis or any other licensor partner loses or cannot obtain patent protection for inotersen or AKCEA-TTR-LRx, it could have a material adverse impact on the Company’s business.

Intellectual property litigation could cause the Company to spend substantial resources and prevent the Company from pursuing the development and commercialization of the products.

If the proposed transaction is consummated, the Company, either alone or in collaboration with Ionis, may have to defend the intellectual property rights related to inotersen and AKCEA-TTR-LRx. If the Company is involved in an intellectual property dispute, the Company may need to litigate to defend the Company’s rights or assert them against others. Disputes can involve arbitration, litigation or proceedings declared by the U.S. PTO or the International Trade Commission or foreign patent authorities. Issuance of a patent is not conclusive of its validity, scope or enforceability. In any such dispute, there is a risk that a patent could, for example, be invalidated or interpreted in a manner adverse to the Company's interests. Even if resolved in the Company’s favor, litigation or other legal proceedings relating to intellectual property claims may cause the Company to

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incur significant expenses, and could distract the Company’s technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of the Company’s common stock. Such litigation or proceedings could substantially increase the Company’s operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. The Company may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of the Company’s competitors may be able to sustain the costs of such litigation or proceedings more effectively than the Company can because of their greater financial resources and more mature and developed intellectual property portfolios.

Third parties may initiate legal proceedings alleging that the Company is infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of the Company’s business.

The success of this transaction depends upon the Company’s ability, to develop, manufacture, market and sell inotersen and AKCEA-TTR-LRx and to use the Company’s proprietary technologies related to inotersen or AKCEA-TTR-LRx without infringing the proprietary rights and intellectual property of third parties. Extensive litigation regarding patents and other intellectual property rights is common in the biotechnology and pharmaceutical industries especially in highly competitive markets for rare diseases. An adverse result from patent litigation could result in substantial damages or enjoin the Company from selling inotersen and AKCEA-TTR- LRx. Third parties, including competitors, may assert a claim in an attempt to delay or burden the Company’s commercialization of inotersen or AKCEA-TTR-LRx. For example, a potential competitor was recently issued a patent which they have broadly characterized in their most recent annual report on Form 10-K as being directed to single-stranded antisense polynucleotide molecules capable of inhibiting expression of the human transthyretin gene, and having certain combinations of structural features. This third party has also attempted to broadly characterize certain other patents that they hold. While the Company believes that it would have substantial defenses in the event this competitor brought a claim against the Company with respect to inotersen or AKCEA-TTR-LRx, patent litigation is inherently uncertain, involves substantial cost and is a distraction to management. Moreover, the Company’s stock price may be impacted by the existence of or developments during a litigation, even developments that are preliminary in nature.

The Company may in the future become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to inotersen and AKCEA-TTR-LRx, including interference, derivation, reexamination, post-grant review, opposition, cancellation or similar proceedings before the U.S. PTO or its foreign counterparts. Third parties may assert infringement claims against the Company based on existing patents or patents that may be granted in the future. The Company may not be aware of all such intellectual property rights potentially relating to inotersen and AKCEA-TTR-LRx and their uses, or may incorrectly conclude that an issued third party patent is invalid, not infringed or unenforceable. If a third party claims that inotersen or AKCEA-TTR-LRx or the Company’s proprietary technology related to inotersen or AKCEA-TTR-LRx infringe its patents or other intellectual property rights, the Company may have to participate in litigation and other proceedings. If a third party claim is successful, and the Company is found to infringe a valid and enforceable patent, the Company may have to discontinue the development or commercialization of inotersen or AKCEA-TTR-LRx, alter the products or processes, pay license fees or cease certain activities. The Company may not be able to obtain a license to needed intellectual property on favorable terms, if at all. There are many patents issued or applied for in the biotechnology industry, and the Company may not be aware of patents or patent applications held by others that relate to the Company’s business. This is especially true since patent applications in the United States are filed confidentially for the first 18 months. Moreover, the validity and breadth of biotechnology patents involve complex legal and factual questions for which important legal issues remain. Thus, the Company does not know with certainty that the Company’s drugs or the Company’s intended commercialization thereof, does not and will not infringe or otherwise violate any third party's intellectual property.

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The Company will not seek intellectual property protection for inotersen and AKCEA-TTR-LRx in all jurisdictions throughout the world and the Company may not be able to adequately enforce the intellectual property rights for inotersen and AKCEA-TTR-LRx even in the jurisdictions where the Company seeks protection.

If the proposed transaction is consummated, filing, prosecuting and defending patents covering inotersen and AKCEA-TTR-LRx in all countries and jurisdictions throughout the world would be prohibitively expensive, and the Company’s intellectual property rights in some countries outside the United States could be less extensive than those the Company could obtain in the United States. Although many of the key patent families protecting these product candidates were filed and are being pursued broadly in a large number of jurisdictions, that may not be the case for all relevant patent families. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States. Consequently, the Company may not be able to prevent third parties from practicing the Company’s inventions in all countries outside the United States, or from selling or importing products made using the Company’s inventions in and into the United States or other jurisdictions.

Competitors may use the Company’s technologies in jurisdictions where the Company does not pursue and obtain patent protection for inotersen or AKCEA-TTR-LRx to develop their own products. In addition, competitors may export otherwise infringing products to territories where the Company has patent protection, but enforcement is not as strong as that in the United States. These products may compete with inotersen and AKCEA-TTR-LRx and the Company’s patent rights or other intellectual property rights may not be effective or sufficient to prevent them from competing. Even if the Company pursues and obtains issued patents for inotersen and AKCEA-TTR-LRx in particular jurisdictions, the Company’s patent claims or other intellectual property rights may not be effective or sufficient to prevent third parties from so competing.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to biotechnology. This could make it difficult for the Company to stop competitors from infringing the Company’s patent rights or misappropriating the Company’s other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the Company’s right to enforce the Company’s patent rights against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. The Company must ultimately seek patent protection on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, the Company may choose not to seek patent protection in certain countries, and the Company will not have the benefit of patent protection in such countries.

In addition, proceedings to enforce the Company’s patent rights in foreign jurisdictions could result in substantial costs and divert the Company’s efforts and attention from other aspects of the Company’s business, could put the Company’s patent rights at risk of being invalidated or interpreted narrowly, could put the Company’s patent applications at risk of not issuing and could provoke third parties to assert claims against the Company. The Company may not prevail in any lawsuits that the Company initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, the Company’s efforts to enforce the Company’s intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that the Company develops or licenses.

If the Company does not obtain additional protection under the Hatch-Waxman Amendments and similar foreign legislation by extending the patent protection for inotersen and AKCEA-TTR-LRx, the Company’s business may be materially harmed.

Depending upon the timing, duration and specifics of the first FDA marketing authorization of inotersen and AKCEA-TTR-LRx, if the proposed transaction is consummated, a United States patent that the Company owns or license may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. Subject to satisfying various requirements, the Hatch-Waxman Amendments allow the owner of an approved product to extend patent protection for up to five years as compensation for patent term lost during product development and the FDA regulatory review process; provided, that the total term of the patent cannot be extended to a period exceeding

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fourteen years from the first approval of the product candidate. During this period of extension, the scope of protection is limited to the approved product and approved uses. Only one patent per approved product can be extended, and the same patent cannot be extended based on more than one product.

Although the Company plans on seeking patent term restoration for the Company’s products, if approved, the Company may not succeed if, for example, the Company fails to apply within applicable deadlines, fails to apply prior to expiration of relevant patents or otherwise fails to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than the Company requests. If the Company cannot obtain patent term restoration or the term of any such patent restoration is less than the Company requests, the Company’s competitors may enter the market and compete against the Company sooner than the Company anticipates, and the Company’s ability to generate revenue could be materially adversely affected.

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SPECIAL FACTORS

Background of the Proposed Transaction

As a general matter, Ionis’ strategy is to discover, research and develop pharmaceutical product candidates and to out-license or otherwise partner with other companies, including, without limitation, affiliated companies formed for the purpose of commercializing Ionis pharmaceutical product candidates, to market and sell products that have been discovered, researched and developed by Ionis.

On March 30, 2010, Ionis Pharmaceuticals, Inc. (“Ionis”), a leader in RNA-targeted technology for the treatment of severe and rare diseases, entered into a collaboration agreement with Glaxo Group Limited (“GSK”), pursuant to which Ionis would develop inotersen, a generation 2.0+ antisense drug for the treatment of TTR amyloidosis. The collaboration agreement required GSK to make an election to retain its rights to further develop and commercialize inotersen under an exclusive license from Ionis after inotersen completed its Phase 3 clinical trial. Inotersen is currently under regulatory review by the U.S. Food and Drug Administration (the “FDA”) and the European Medicines Agency (the “EMA”). The FDA granted inotersen Orphan Drug Designation and Fast Track Status, and on January 8, 2018, the FDA accepted inotersen’s New Drug Application and set a Prescription Drug User Fee Act (“PDUFA”) date of July 6, 2018. The EMA also granted accelerated assessment to inotersen, which may reduce standard review time. If approved, inotersen is expected to launch in 2018 in the United States and Europe.

In December 2014, Ionis formed Akcea Therapeutics, Inc. (“Akcea” or the “Company”), as a wholly-owned subsidiary of Ionis. Akcea was formed by Ionis to be the commercialization party for Ionis’ lipid drugs, volanesorsen, AKCEA-APO(a)-LRX, AKCEA-ANGPTL3-LRX and AKCEA-APOCIII-LRX, as well as any follow-on drugs for these programs. Akcea remained wholly-owned by Ionis until July 2017, when Akcea completed its initial public offering. Following the completion of Akcea’s initial public offering, Ionis retained a majority ownership position in Akcea. In addition, two of Ionis’ directors, Dr. Stanley Crooke, Ionis’ Chief Executive Officer and Chairman of Ionis’ board of directors, and Lynne Parshall, a Senior Strategic Advisor at Ionis (and Ionis’ Chief Operating Officer until January 2018), are currently members of Akcea’s board of directors. Akcea and Ionis have ongoing contractual obligations to one another pursuant to a Services Agreement, an Investor Rights Agreement and a Development, Commercialization and License Agreement, all of which were entered into in December 2015. Under these agreements, Akcea has rights to Ionis’ proprietary technologies for use with Akcea’s drugs, including an exclusive license from Ionis to globally commercialize Akcea’s development pipeline of drugs, including volanesorsen. Volanesorsen is under regulatory review in the United States, Canada and Europe for the treatment of familial chylomicronemia syndrome (“FCS”) and is currently in Phase 3 clinical development for the treatment of patients with familial partial lipodystrophy (“FPL”). The FDA set a PDUFA date of August 30, 2018 for volanesorsen, and an advisory committee meeting is scheduled for May 10, 2018. In Canada, the Company’s New Drug Submission was granted Priority Review by Health Canada. If approved, Akcea is expected to launch volanesorsen in the United States, Canada and Europe in 2018.

From time to time, the Company’s management team expressed its interest to Ionis in being a partner for inotersen and/or IONIS-TTR-LRX in the event that GSK did not exercise its option.

On August 8, 2017, Ms. Soteropoulos received notice from Ionis that GSK had declined its option to acquire the rights to inotersen, noting that following the appointment of a new CEO, GSK expressed a change in strategy and was exiting the rare disease therapeutic area. Following receipt of this information, the Akcea board of directors, not including Dr. Crooke or Ms. Parshall, discussed the possibility of collaborating with Ionis to commercialize inotersen, but acknowledged that Ionis was actively considering partnerships with third parties, including neurology-focused companies.

On September 26, 2017, members of the board of directors of the Company continued their discussion of a potential relationship with Ionis to commercialize inotersen, but acknowledged that at this point, Ionis was engaging with other third parties for commercialization of inotersen.

On October 27, 2017, Dr. Crooke and Ms. Parshall met with Christopher Gabrieli, Chairman of the Company’s board of directors, to discuss the possibility of a collaboration between the Company and Ionis to commercialize inotersen. Mr. Gabrieli expressed to Dr. Crooke and Ms. Parshall that if Ionis was interested in such a collaboration, Ionis should inform the Company in writing of its intention.

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On October 30, 2017, Dr. Crooke wrote to Mr. Gabrieli and Ms. Soteropoulos to formally extend to the Company an opportunity to bid for the rights to inotersen. Dr. Crooke acknowledged that any transaction would need to be negotiated on an arm’s-length basis and further noted that Ionis continued to have discussions with and consider other partnerships, and as such, there was the possibility that Ionis would choose another partner to commercialize inotersen. Over the next several days, Ms. Soteropoulos communicated with Ms. Parshall to express that the Company was interested in exploring a potential partnership regarding inotersen.

On November 7, 2017, Mr. Gabrieli informed the board of directors, not including Dr. Crooke and Ms. Parshall, that Ionis had discussed potentially licensing inotersen to the Company. Mr. Gabrieli reported to the board of directors that Ionis would respond within approximately one week with respect to whether Ionis was willing to enter into discussions with the Company. Mr. Gabrieli highlighted for the board of directors several of the considerations he and Ms. Soteropoulos had with respect to the potential transaction, including the requirement for additional capital and potential challenges to the Company’s infrastructure in launching two commercial products simultaneously (volanesorsen and inotersen). Mr. Gabrieli suggested a board of directors meeting to discuss how to respond in the event Ionis confirmed a willingness to engage with the Company on the proposed basis.

On November 16, 2017, Elizabeth Ackermann, Executive Director of Clinical Development at Ionis, and Joseph Baroldi, a business development executive at Ionis, met with members of the Company’s management to provide the same confidential management presentation regarding inotersen that Ionis had delivered to other potential commercial partners.

On November 17, 2017, Ms. Soteropoulos began to conduct a series of telephonic diligence meetings regarding inotersen with ATTR Amyloidosis consultants and investigators, as well as physicians who had experience with both inotersen and patisiran, the competitive drug for ATTR Amyloidosis then in development by Alnylam Pharmaceuticals, Inc. Similar diligence meetings continued through mid-January 2018.

On November 28, 2017, Dr. Crooke and Ms. Parshall spoke with Mr. Gabrieli and informed him that Ionis was prepared to enter into discussions, expedited due to the expected near-term regulatory approval of inotersen, in furtherance of a potential license of inotersen to the Company, and reviewed with him a summary of the terms Ionis was considering proposing to the Company for the potential transaction. Ionis noted to Mr. Gabrieli that Ionis continued to have discussions with other parties with respect to the European rights to commercialize inotersen. Dr. Crooke and Ms. Parshall informed Mr. Gabrieli that Ionis was considering a 60/40 profit share, with Ionis entitled to 60% of the profits and losses from inotersen and the Company entitled to 40% of the profits and losses from inotersen, beginning with the approval of inotersen; a $250 million license fee payable by the Company to Ionis in the form of debt, with a 10% interest rate and principal repayable from the Company’s revenue (not merely revenue from inotersen); a $100 million common stock investment by Ionis into the Company at closing valued at the fair market value; Sarah Boyce becoming president of the Company with full responsibility for commercial operations, reporting to Ms. Soteropoulos, who would remain the Company’s Chief Executive Officer; and for a term sheet to be negotiated and signed by December 15, with the potential transaction to close in January 2018. Ionis further noted that the Company would need to retain independent counsel, investment bankers and a consultant to evaluate the market opportunity for inotersen in connection with the Company’s evaluation of the potential transaction. After the discussion, Mr. Gabrieli transmitted a written summary of the preliminary terms of Ionis’ proposal to the members of the board of directors, not including Dr. Crooke and Ms. Parshall.

Also on November 28, 2017, Ms. Soteropoulos spoke with Ms. Parshall regarding several of the proposed transaction terms as reflected in the summary Mr. Gabrieli distributed earlier in the day, including the amount of the upfront payment Ionis had indicated.

Also on November 28, 2017, Ms. Soteropoulos had an introductory telephonic meeting with a representative of Cowen and Company, LLC (“Cowen”) to discuss the potential transaction, including the possibility of Cowen being engaged as financial advisor with respect to the potential transaction.

On November 29, 2017, Ms. Soteropoulos and Ms. Boyce began to hold a series of telephonic discussions regarding potential integration issues and organizational synergies in the event any transaction occurred. These discussions continued throughout the month of December, and included an in-person meeting in California on December 12, 2017.

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On November 30, 2017, Ms. Soteropoulos spoke with Ms. Parshall to provide her preliminary perspective on certain aspects of the potential transaction.

On December 1, 2017, Ms. Soteropoulos and Jeffrey Goldberg, Chief Operating Officer of the Company, held an introductory meeting with Ropes & Gray LLP (“Ropes & Gray”) to discuss the potential transaction, including the possibility of Ropes & Gray being engaged as legal advisor with respect to the licensing component of the potential transaction.

Also on December 1, 2017, Ms. Soteropoulos and Mr. Gabrieli spoke with representatives of Cowen by telephone regarding the potential transaction and further discussed the possibility of Cowen being engaged as financial advisor with respect to the potential transaction. Ms. Soteropoulos and Mr. Gabrieli requested that representatives of Cowen attend a meeting of the board of directors on December 4, 2017, and present to the board of directors a preliminary perspective on its valuation of the proposed transaction.

On December 2, 2017, Ms. Parshall sent Ms. Soteropoulos a term sheet containing proposed terms on which Ionis would be willing to license inotersen and IONIS-TTR-LRx to the Company. The term sheet proposed, among other terms, an upfront license fee of $150 million, payable in the Company’s common stock valued at fair market value; Ionis’ purchase of $200 million of the Company’s common stock valued at fair market value; a series of milestone payments totaling $180 million that would be payable by the Company to Ionis upon the approval of inotersen in a variety of markets, payable in cash out of 10% of all the Company’s revenue or in Company stock valued at fair market value; additional development milestones payable at 50% of the level of the core milestones upon approval of inotersen for additional indications in the indicated geographies; a series of milestone payments totaling $150 million payable at Ionis’ option in cash or the Company’s stock valued at fair market value, upon achievement of inotersen annual net sales in excess of specified levels ranging from $400 million to $1 billion; a 60/40 (Ionis/Company) sharing of profits and losses from inotersen activities, beginning in 2019; establishment of a joint steering committee to manage the development and commercialization of inotersen; and for Ms. Boyce to join the board of directors and become president of the Company, reporting to Ms. Soteropoulos, who would remain the Company’s Chief Executive Officer. Ms. Soteropoulos promptly shared the Ionis proposal with the board of directors, not including Dr. Crooke and Ms. Parshall, in anticipation of a discussion of the proposal by the board of directors at a board of directors meeting planned for December 4th and December 5th.

Also on December 2, 2017, Mr. Gabrieli held an introductory meeting with Ropes & Gray to discuss Ropes & Gray’s licensing capabilities with respect to the potential transaction. Later that same day, Mr. Gabrieli and Ms. Parshall exchanged emails in which Mr. Gabrieli asked several questions regarding the Ionis proposal, and Ms. Parshall answered those questions.

Also on December 2, 2017, Beth Hougen, Senior Vice President of Finance and Chief Financial Officer of Ionis, provided to Ms. Soteropoulos a copy of the Ionis financial model for inotersen, which Ionis and its investment bankers intended to present to the remainder of the board of directors at its upcoming meeting on December 5. That same day, Ms. Soteropoulos provided the model to the board of directors, not including Dr. Crooke and Ms. Parshall.

On December 4, 2017, the board of directors held a meeting attended by board of directors members Mr. Gabrieli, Ms. Soteropoulos, Ms. Parshall, Ms. Hougen, Elaine Hochberg, Sandford Smith and Edward Fitzgerald, as well as Jeffrey Goldberg, Chief Operating Officer of the Company, Patrick O’Neil, General Counsel of Ionis, Michael MacLean, Chief Financial Officer of the Company, representatives of Stifel Financial Corp. (“Stifel”), which had been retained by Ionis as its financial advisor for the potential transaction, and representatives of Cowen. Dr. Crooke did not attend the meeting. Ms. Parshall provided the board of directors with Ionis’ primary objectives in connection with the potential transaction, including ensuring maximization of inotersen’s potential and maintaining the value of inotersen after having brought it to filing. Ms. Parshall, Ms. Hougen, Mr. O’Neil and Stifel then departed the meeting so that the board of directors could discuss a preliminary assessment of Ionis’ proposed terms. After a break, representatives of Ropes & Gray joined the meeting and Ms. Parshall, Ms. Hougen and Mr. O’Neil re-joined the meeting. Ropes & Gray proceeded to describe to the board of directors the application of their fiduciary duties in the context of a transaction between a majority stockholder and its affiliate. After discussion, the board of directors resolved to establish a special transaction committee (the “Special Committee”) and delegated to the Special Committee the authority to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis. Ms. Parshall recused herself

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from this vote, given her connections to Ionis. The Special Committee was authorized to retain independent financial and legal advisors at the Company’s expense, and to further delegate, in whole or in part, the power and authority delegated to it to any officer or employee of the Company. After disclosure by each director of potential conflicts of interest with Ionis and the potential transaction, the board of directors deliberated and appointed Messrs. Smith and Fitzgerald to serve on the Special Committee. After this discussion and establishment of the Special Committee, Ms. Parshall proceeded to present to the board of directors the Ionis proposal and shared with them Ionis’ perspective on the proposed terms.

On December 5, 2017, the board of directors held a meeting attended by Mr. Gabrieli, Mr. Fitzgerald, Mr. Smith, Ms. Hochberg, Ms. Parshall, Ms. Hougen, Ms. Soteropoulos, Mr. MacLean, Mr. O’Neil, Mr. Goldberg, and representatives of Cowen, Ropes & Gray and Stifel. Dr. Crooke did not attend the meeting. Ionis and Stifel presented to the board of directors the Ionis financial model for the inotersen opportunity. Members of the board of directors and representatives of Cowen asked questions throughout the presentation, including with respect to the assumptions reflected in Ionis’ financial model for inotersen. Members of the board of directors and representatives of Cowen sought to further understand Ionis’ perspective on its financial model and the commercialization of inotersen more generally. Before Ms. Parshall, Ms. Hougen and Mr. O’Neil left the meeting, Ropes & Gray noted that a decision had not been reached on whether the potential transaction would be subject to a non-waivable condition that a majority of the Company’s disinterested stockholders approve the transaction. Ms. Parshall indicated that she was supportive and believed Ionis would be supportive of such a condition, but wanted to understand further the effect of such a condition on the potential timing of any transaction. The board of directors and Ionis both recognized that, to provide an opportunity for a smooth launch of inotersen upon its anticipated regulatory approval in 2018, Ionis needed to identify a potential commercialization partner quickly and expedite any related potential transaction. After Ms. Parshall, Ms. Hougen and Mr. O’Neil left the meeting, representatives of Cowen shared with the board of directors, not including Dr. Crooke and Ms. Parshall, their perspective on the Ionis/Stifel model and analysis, as well as its preliminary analysis of the inotersen opportunity.

On December 6, 2017, the Special Committee held a meeting attended by both members of the Special Committee and Ms. Soteropoulos, and representatives of Ropes & Gray attending telephonically. At the request of the Committee, Ms. Soteropoulos provided the Special Committee with her perspective on Cowen as a potential financial advisor in connection with the potential transaction. Ms. Soteropoulos noted that Cowen had served the Company well as lead underwriter in the Company’s 2017 initial public offering and that, in her view, Cowen was sufficiently independent of Ionis to advise the Special Committee with respect to the potential inotersen transaction. After a brief discussion, Ms. Soteropoulos departed the meeting. The Special Committee proceeded to discuss the experience and conflict disclosure materials that representatives of Cowen provided in advance of the meeting, as well as their own past experiences with Cowen. At that point, the meeting ended and the representatives of Ropes & Gray left. The Special Committee then held a telephonic conference with representatives of Cowen to discuss Cowen’s qualifications as a financial advisor to the Special Committee, as well as Cowen’s independence with respect to the potential transaction. Following the call with representatives of Cowen, the Special Committee reflected on their discussion with representatives of Cowen regarding Cowen’s qualifications and independence with respect to the potential transaction. They then further discussed potentially engaging Cowen as the Special Committee’s financial advisor in connection with the potential transaction. Given the Special Committee’s positive view of Cowen, the presentation that the representatives of Cowen had provided at the previous day’s board meeting and the timing considerations relating to the expected near-term regulatory approval of inotersen, the Special Committee concluded that it would not consider other potential financial advisors and that it would seek to engage Cowen as its financial advisor. Then, the Special Committee considered whether to retain Ropes & Gray as legal advisor to the Special Committee in connection with the potential transaction. After brief discussion, the Special Committee decided to engage Ropes & Gray as its legal advisor. Lastly, the Special Committee directed Ropes & Gray to review and negotiate Cowen’s engagement letter.

Also on December 6, 2017, the Company’s management team met with representatives of L.E.K. Consulting (“L.E.K.”) to discuss potentially retaining L.E.K. to perform a market study of the potential inotersen transaction.

On December 7, 2017, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos, Mr. MacLean, Mr. Goldberg and representatives of Cowen to review and

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discuss a potential timeline proposed by representatives of Cowen and the Company’s management team for the Company’s consideration of the inotersen opportunity. The Special Committee also discussed the financial assumptions underlying the Stifel model that had been presented at the December 5 board of directors meeting, especially with respect to the newness of the product and the competitive market landscape. Following that discussion, the Special Committee directed the management team to work with L.E.K. and Cowen to assist with the development of projections that the Special Committee could evaluate and that Cowen could potentially use in connection with its analysis of the fairness of the potential transaction.

On December 8, 2017, the Special Committee held a telephonic meeting attended by both members of the Special Committee and Ms. Soteropoulos to prepare for an upcoming call with Ionis to review the timeline of the potential inotersen transaction. After discussion, the Special Committee decided that providing Ionis with preliminary feedback on its proposal could be helpful as a sign of the Company’s engagement and potential interest, and discussed which aspects of the proposal it would highlight to Ms. Parshall.

On the same day, at the request of the Special Committee, Ms. Soteropoulos participated in the first of a series of telephonic conferences with Ionis to review the inotersen model and discuss assumptions contained in the model.

On December 11, 2017, the Special Committee held a telephonic conference with Ms. Parshall. They reviewed the timeline of the potential transaction, including logistical updates such as the diligence process and timing of management calls. That same day, Mr. Fitzgerald provided Mr. Gabrieli and Ms. Hochberg with a timeline of the potential transaction.

On December 15, 2017, the Special Committee held a telephonic meeting attended by both members of the Special Committee and Ms. Soteropoulos, at which Ms. Soteropoulos updated the Special Committee with respect to the Company’s progress in evaluating projections for inotersen. The Special Committee also prepared for a meeting of the board of directors, not including Dr. Crooke and Ms. Parshall, at which the Special Committee would provide the board of directors with an update regarding the potential transaction.

Later that same day, the board of directors held a telephonic meeting attended by Ms. Soteropoulos, Ms. Hochberg, Mr. Gabrieli, Mr. Fitzgerald and Mr. Smith. Dr. Crooke and Ms. Parshall did not attend the meeting. The Special Committee shared with the other assembled members of the board of directors its perspective of the key terms of the potential transaction, focusing on concerns regarding the timing of milestone payments, profit sharing and potential management issues. The board of directors engaged in a discussion of these topics. The Special Committee also informed the other directors that it had formally retained Ropes & Gray and Cowen as its advisors with respect to the potential transaction.

On December 16, 2017 the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos and representatives of Cowen to prepare for a planned conference with Ms. Parshall of Ionis later that day at which the Special Committee planned to share with Ionis preliminary feedback with respect to Ionis’ proposed terms of the potential transaction. Later that same day, the Special Committee had a discussion with Ms. Parshall, Ms. Hougen and Ms. Soteropoulos at which the Special Committee provided preliminary feedback on certain of the terms proposed by Ionis. Ms. Parshall acknowledged the Special Committee’s feedback but declined to engage in any negotiations until the Company was prepared to provide a comprehensive response on all of Ionis’ proposed terms.

On December 20, 2017, the board of directors held a telephonic meeting attended by Ms. Soteropoulos, Ms. Hochberg, Mr. Gabrieli, Mr. Fitzgerald and Mr. Smith. Dr. Crooke and Ms. Parshall did not attend the meeting. The Special Committee and Ms. Soteropoulos updated the other members of the board of directors present regarding the Special Committee’s recent discussion with Ionis and L.E.K.’s progress regarding its market study of inotersen.

During late December 2017, at the direction and with the authority of the Special Committee, Ms. Soteropoulos, Mr. Goldberg and Mr. MacLean corresponded with Cowen on several occasions to discuss Cowen’s financial models and transaction structure.

On December 31, 2017, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos and a representative of Ropes & Gray, who again reviewed for the Special

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Committee the Special Committee’s fiduciary duties as applied to the potential transaction with Ionis, and certain process matters related to a potential transaction. After discussion, the Special Committee concluded that any potential transaction should be subject to a non-waivable condition that a majority of the Company’s disinterested stockholders approve the transaction.

On January 2, 2018, the board of directors held a telephonic meeting attended by Ms. Soteropoulos, Ms. Hochberg, Mr. Smith, Mr. Fitzgerald, Mr. MacLean, Mr. Goldberg, Ms. Parshall, Mr. O’Neil, and representatives of Cowen and Ropes & Gray. Dr. Crooke and Mr. Gabrieli did not attend the meeting. Ropes & Gray advised the group on the board’s fiduciary duties as applied to the potential transaction with Ionis, and certain process matters related to a potential transaction. Ropes & Gray and the board of directors then discussed timing considerations associated with the stockholder approval process. The Special Committee expressed to the board its view that any potential transaction should be subject to a non-waivable condition that a majority of the Company’s disinterested stockholders approve the transaction.

On January 3, 2018, Ms. Parshall, Ms. Boyce, Ms. Soteropoulos and Dr. Brett Monia, Ionis’ head of Drug Discovery and Translational Medicine, discussed organizational and infrastructure efficiencies and plans associated with Ms. Boyce and her team joining the Company in connection with the potential transaction. The group also discussed the path forward to integrate work streams in connection with the potential transaction. As a result of the negotiations, in connection with entering into the transaction agreements, in anticipation of the potential transaction, the Company agreed to hire certain Ionis employees, including Ms. Boyce, who were part of the commercial inotersen team at Ionis.

Also on January 3, 2018, the Special Committee telephonically provided Mr. Gabrieli, Ms. Soteropoulos and Ms. Hochberg with an update of its work on the analysis of the deal terms, as well as its anticipated steps moving forward. Later that same day, the Special Committee held a telephonic conference with representatives of Cowen to confirm alignment with the proposed timeline and discuss anticipated next steps. Later, the board of directors held a telephonic meeting attended by Ms. Soteropoulos, Mr. Fitzgerald, Mr. Smith, Mr. Gabrieli, Ms. Hochberg and representatives of Cowen and Ropes & Gray. Dr. Crooke and Ms. Parshall did not attend the meeting. The board initially discussed the L.E.K. revenue model and market analysis report that L.E.K provided earlier in the day, including impacts of the model on the terms of the potential transaction. Ropes & Gray reviewed for the assembled members of the board of directors the application of Delaware fiduciary duties in the context of the potential transaction, and the role of the Special Committee. The Special Committee requested that Ropes & Gray contact Ionis’ counsel to confirm that Ionis was aligned with the Special Committee’s process. The Special Committee also determined that Ms. Soteropoulos and Mr. Fitzgerald would jointly call Ms. Parshall to inform her that the Special Committee needed time to review the L.E.K. report, in conjunction with management’s assessments and Cowen’s analysis, and would respond to Ionis regarding the potential transaction the following week.

On January 4, 2018, representatives of L.E.K. presented their revenue model and market analysis report to Ms. Soteropoulos, Mr. MacLean, Mr. Goldberg, Mr. Smith, Mr. Fitzgerald, Ms. Parshall, Ms. Hochberg, and representatives of Cowen and Stifel. Discussion ensued as to how L.E.K.’s materials impacted the key financial terms of the potential transaction. Later that same day, Ionis’ counsel exchanged correspondence with Ropes & Gray, confirming Ionis’ agreement that the potential transaction would be subject to a non-waivable condition that a majority of the Company’s disinterested stockholders approve the potential transaction.

On January 5, 2018, Ms. Boyce, Ms. Parshall, Ms. Soteropoulos, Mr. Goldberg, Ms. Hougen and representatives of L.E.K., Cowen and Stifel held a telephonic conference to discuss the assumptions underlying L.E.K.’s model and why they differed in some respects from the assumptions underlying the Ionis model.

On January 6, 2018, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos, and representatives of Cowen. The Special Committee reviewed and discussed the merits of a series of potential counterproposals that representatives of Cowen had prepared at the request of the Special Committee, including a counterproposal that included a transition from a 60% Ionis / 40% Company profit split to a 50%/50% split following launch of IONIS-TTR-LRx. Later, Mr. Goldberg, Mr. MacLean and representatives of Cowen and Ropes & Gray joined the meeting. The Special Committee proceeded to discuss a number of topics regarding the potential transaction, including patient population as

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reflected in the L.E.K. model and minimum equity investment by Ionis. Regarding Ms. Boyce’s potential addition to the board of directors, the Special Committee determined that the members of the board of directors other than Dr. Crooke and Ms. Parshall should interview Ms. Boyce to ensure that she would be a good fit for the board of directors.

On January 7, 2018, the board of directors held a telephonic meeting attended by Ms. Soteropoulos, Mr. Gabrieli, Ms. Hochberg, Mr. Fitzgerald, Mr. Smith, and representatives of Cowen and Ropes & Gray. Dr. Crooke and Ms. Parshall did not attend the meeting. Representatives of Cowen presented their analysis of the Ionis proposal, which was informed by management’s projections for inotersen and the L.E.K. market study. The board of directors asked several questions, and discussion ensued regarding various financial matters such as operating expense projections and cost of capital. The Special Committee advised the board of directors that it had provisionally decided to develop a counterproposal to Ionis. After Ms. Hochberg and Mr. Gabrieli left the meeting, the Special Committee led a discussion of whether to adjust the base case projections with respect to assumptions underlying the base case projections and potential adjustments. The Special Committee concluded that it would direct Cowen to update its financial model accordingly.

Between January 9 and January 10, 2018, Ms. Soteropoulos held several in-person meetings with Ms. Boyce at the J.P. Morgan healthcare conference, in which they discussed organizational synergies that could be achieved were the Company to proceed with a license of inotersen from Ionis.

On January 10, 2018, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean, and representatives of Cowen and Ropes & Gray. The Special Committee discussed the updated L.E.K. model and solicited guidance from the representatives of Cowen as to the impact of the revised model on various deal terms. The Special Committee discussed potential counterproposals to Ionis and related strategy. Following that discussion, the Special Committee instructed Ropes & Gray to prepare a proposed revised term sheet for the license of inotersen, and to prepare a revised cover letter to accompany the Special Committee’s counterproposal.

On January 11, 2018, Ms. Soteropoulos called Ms. Parshall to provide a summary of the January 9 and January 10 discussions between Ms. Soteropoulos and Ms. Boyce regarding organizational synergies.

Also on January 11, 2018, Ropes & Gray delivered to Ionis the Special Committee’s counterproposal to the Ionis proposal delivered to the Company on December 2, 2017. The counterproposal included, among other terms, an upfront license fee of $150 million, payable in the Company’s common stock valued at fair market value; Ionis’ purchase of $200 million of the Company’s common stock valued at fair market value; a series of milestone payments totaling $110 million that would be payable by the Company to Ionis upon the approval of inotersen in a variety of markets; a series of milestone payments totaling $90 million that would be payable by the Company to Ionis upon the approval of IONIS-TTR-LRx in a variety of markets; a series of milestone payments totaling $225 million payable at the Company’s option in cash or the Company’s stock valued at fair market value upon achievement of inotersen and IONIS-TTR-LRx sales in excess of specified levels ranging from $400 million to $1 billion; a series of sales milestone payments totaling $1 billion payable at the Company’s option in cash or the Company’s stock valued at fair market value upon achievement of inotersen and IONIS-TTR-LRx sales in excess of specified levels ranging from $2 billion to $4.5 billion; beginning in 2018, a 60/40 (Ionis/Company) sharing of profits and losses from development and commercialization of inotersen and IONIS-TTR-LRx, and, following the first calendar quarter in which the first commercial sale of IONIS-TTR-LRx occurred, a 50/50 sharing of profits and losses; Ionis having responsibility for all inotersen costs incurred prior to 2018; Ionis having responsibility for development activities and costs with respect to IONIS-TTR-LRx; establishment of a joint steering committee to manage the development and commercialization of inotersen and IONIS-TTR-LRx; and for Ms. Boyce to join the board of directors and become president of the Company, reporting to Ms. Soteropoulos, who would remain the Company’s Chief Executive Officer.

On January 12, 2018, the Special Committee held a telephonic discussion with Ms. Parshall, with Ms. Soteropoulos, Mr. Goldberg and representatives of Cowen and Ropes & Gray participating, to provide an overview of the Special Committee’s counterproposal.

On January 15, 2018, the Special Committee, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean, and representatives of Cowen and Ropes & Gray met with Ms. Parshall, Ms. Boyce, Ms. Hougen, Mr. O’Neil and other representatives of Ionis and Stifel to negotiate the key terms for the potential license by the Company of inotersen. Over the course of the day, the parties exchanged various proposals. Representatives of Cowen

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provided the Special Committee with an internal economic analysis of each subsequent proposal made by Ionis and each counterproposal made by the Special Committee. At the conclusion of the day, Ionis and the Special Committee agreed on the following key terms: an upfront license fee of $150 million, payable in the Company’s common stock valued at fair market value; Ionis’ purchase of $200 million of the Company’s common stock valued at fair market value; a series of milestone payments totaling $110 million that would be payable by the Company to Ionis upon the approval of inotersen in a variety of markets; a series of milestone payments totaling $145 million that would be payable by the Company to Ionis upon the acceptance of filing, and approval, of IONIS-TTR-LRx in certain markets; a series of milestone payments totaling $225 million payable at Ionis’ option in cash or the Company’s stock valued at fair market value upon achievement of inotersen and IONIS-TTR-LRx sales in excess of specified levels ranging from $400 million to $1 billion (the first $125 million of milestone payments which is payable in cash or the Company’s common stock valued at fair market value and the remainder of which is payable in cash); a series of sales milestone payments totaling approximately $1.1 billion payable in cash upon achievement of inotersen and IONIS-TTR-LRx sales in excess of specified levels ranging from $1.5 billion to $4 billion; beginning April 1, 2018, the Company having responsibility for all inotersen costs incurred through the end of the calendar quarter in which regulatory approval of inotersen in the United States is received; beginning on the earlier of January 1, 2019 or the first day of the calendar quarter after receipt of the first regulatory approval of inotersen, a 60/40 (Ionis/Company) sharing of profits and losses from development and commercialization of inotersen and, beginning in the first calendar quarter following the first commercial sale of IONIS-TTR-LRx, a 50/50 sharing of profits and losses; beginning January 1, 2018, shared responsibility on a 50/50 basis for development activities with respect to IONIS-TTR-LRx; establishment of a joint steering committee to manage the development and commercialization of each of the Products; and for Ms. Boyce to join the board of directors and become president of the Company, reporting to Ms. Soteropoulos, who would remain the Company’s Chief Executive Officer.

The Special Committee had a series of calls between the finalization of the term sheet and March 2, 2018 to provide guidance to Ropes & Gray and direct the negotiations on behalf of the Company.

On January 16, 2018, Ms. Soteropoulos, Mr. Goldberg, Ms. Boyce, Molly Harper, the Company’s Vice President of Commercial Development, and Michael Stevenson, the Company’s Vice President of Medical Affairs, met to discuss integration considerations. That same day, Ms. Soteropoulos, Mr. Goldberg and Ms. Harper presented to Dr. Crooke, Ms. Parshall, Mr. Baroldi and Dr. Richard Geary, Ionis’ Senior Vice President of Development, regarding the Company’s commercialization capabilities and a commercial launch plan for inotersen.

Also on January 16, 2018, Ms. Boyce interviewed with members of the Company’s board of directors, not including Dr. Crooke and Ms. Parshall.

On January 17, 2018, Ms. Soteropoulos held the first of a series of telephonic calls with Mr. Goldberg and Ms. Boyce to discuss the combined organization and the Company’s launch of inotersen and IONIS-TTR-LRx.

On January 22, 2018, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean and Ms. Boyce presented to Ionis management about infrastructure and organization. During that week, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean and Ms. Boyce discussed various integration and operational matters.

On January 25, 2018, Ms. Soteropoulos held a telephonic discussion with Ms. Parshall regarding a potential compensation package for Ms. Boyce if she were to join the Company in connection with the potential transaction.

During January 2018, potential European partners presented to Ionis regarding their commercialization capabilities in the European market. On January 20, 2018, Ms. Soteropoulos held a telephonic discussion with Ms. Parshall and Mr. Smith to discuss the Company’s strong preference that the potential transaction would include Europe as a commercialization market for inotersen. On January 26, 2018, Dr. Crooke asked Ms. Soteropoulos and Ms. Boyce to prepare materials and provide projections of inotersen sales in Europe. Between January 27 and January 30, Ms. Soteropoulos, Ms. Boyce, Mr. Goldberg, Mr. MacLean and Ms. Hougen participated in a series of telephonic discussions to prepare projections of inotersen sales in Europe and project a budget for such sales.

On January 29, 2018, Ionis provided a draft of the License Agreement to the Special Committee and Ropes & Gray.

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On January 31, 2018, Ms. Soteropoulos, Mr. Gabrieli, Ms. Boyce, Mr. Goldberg and Mr. MacLean held a telephonic discussion with Dr. Crooke, Ms. Parshall, Dr. Monia, Dr. Geary, Ms. Hougen and Mr. O’Neil to discuss the Company’s capabilities and infrastructure to launch inotersen in Europe. Following this presentation, Ionis informed the Company that the potential transaction would include rights to commercialize inotersen in Europe as previously contemplated.

Throughout the month of February 2018, Ms. Soteropoulos and other members of Company management held a series of telephonic meetings and discussions regarding the potential transaction and operational issues.

On February 6, 2018, Ropes & Gray provided to Ionis drafts of the Stock Purchase Agreement and stockholder voting agreement with Novartis.

On February 8, 2018, given the proposed increase to Ionis’ equity ownership of the Company in connection with the proposed transaction, and its increased reliance on the Company as a commercialization partner, now that the Company could be commercializing at least two products that Ionis had developed (volanesorsen and inotersen), Ionis provided Ropes & Gray and the Special Committee with a draft of an Amended and Restated Investor Rights Agreement, originally entered into with Ionis on December 18, 2015. Ionis also provided Ropes & Gray and the Special Committee with a draft of an Amended and Restated Services Agreement, also entered into with Ionis on December 18, 2015.

On February 9, 2018, Ropes & Gray reviewed with the Special Committee a summary of the material points raised in the License Agreement. Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean and representatives of Cowen were also present for the discussion, and the Special Committee discussed the upcoming negotiations with Ionis over the detailed terms contained in the License Agreement.

On February 11 and February 12, 2018, Ionis, Ropes & Gray and members of the Company’s management team met in person to negotiate key aspects of the License Agreement. The Special Committee participated in aspects of the meeting telephonically. On February 12, 2018, Ms. Soteropoulos provided an email update to the board of directors (not including Dr. Crooke and Ms. Parshall) regarding the negotiations.

On February 20, 2018, the Special Committee, Ms. Soteropoulos, Ms. Goldberg, Mr. MacLean and representatives of Ropes & Gray discussed the License Agreement in advance of sending Ionis a revised draft the following week.

On February 23, 2018, a call occurred between the Special Committee, Company management, Ionis and representatives of Ropes & Gray to discuss both parties’ issues concerning the License Agreement, including the non-commercialization activities that the Company would lead. Later that same day, a call occurred between Ms. Soteropoulos, Mr. O’Neil, Ms. Parshall, Dr. Monia, Mr. Baroldi, Josh Patterson, Deputy General Counsel at Ionis, Ms. Hougen, Morgan Schapiro, a business development employee at Ionis, Ms. Boyce, Mr. McLean, Mr. Goldberg and representatives of Ropes & Gray. The parties primarily discussed the terms in the current draft of the License Agreement, and briefly discussed Ionis’ proposed changes to the Investor Rights Agreement.

On February 26, 2018, representatives of Ropes & Gray held a telephonic discussion with the Special Committee, Ms. Soteropoulos and Mr. Goldberg to discuss legal due diligence findings.

On February 27, 2018, representatives of Ropes & Gray held a telephonic discussion with the Special Committee and Ms. Soteropoulos to discuss Ionis’ proposed changes to the Investor Rights Agreement. Also on February 27, the parties entered into a common interest agreement to facilitate discussion of certain diligence matters.

On February 28, 2018, Ionis provided a revised draft of the License Agreement to the Special Committee and Ropes & Gray.

On March 1, 2018, a call occurred between the Special Committee and representatives of Ropes & Gray and Cowen to discuss aspects of the Cowen opinion. Later that same day, representatives of Ropes & Gray and the Special Committee continued its discussion of Ionis’ proposed changes to the Investor Rights Agreement.

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On March 2, 2018, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean and representatives of Ropes & Gray and Cowen to discuss the legal due diligence findings, the timing of the potential transaction and issues remaining subject to negotiation between the parties. The group discussed certain adjustments made to the inotersen projections.

On March 4, 2018, the Special Committee held a telephonic discussion with Ms. Parshall regarding the Amended and Restated Investor Rights Agreement.

On March 5, 2018, representatives of Ropes & Gray held a telephonic discussion with the Special Committee, Ms. Soteropoulos, Mr. Goldberg and Mr. MacLean to discuss legal due diligence findings. Later that day, the group reconvened to discuss Ionis’ revised draft of the License Agreement and to prepare for the upcoming negotiations with Ionis. On March 7, 2018, Ropes & Gray sent a revised draft of the License Agreement to Ionis.

On March 8, 2018, representatives of Ropes & Gray, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean, and representatives of Ionis including Ms. Parshall met to negotiate the terms of the License Agreement. The parties reached agreement on most of the terms. Later that same day, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean, and representatives of Cowen and Ropes & Gray. Cowen presented a preview of its valuation of the proposed transaction to the Special Committee. Representatives of Cowen discussed the key assumptions relating to inotersen and AKCEA-TTR-LRx, as well as revenue projections and expense assumptions, and the Special Committee asked the representatives of Cowen questions regarding its valuation.

Later that same day, the board held a telephonic meeting attended by Mr. Gabrieli, Ms. Hochberg, Ms. Soteropoulos, Mr. Fitzgerald, Mr. Smith, Mr. Goldberg, Mr. MacLean, and representatives of Cowen and Ropes & Gray. Dr. Crooke and Ms. Parshall did not attend the meeting. The Special Committee provided the board with an update of the proposed transaction, including that representatives of Cowen had presented to the Special Committee its valuation of the proposed transaction. Representatives of Cowen summarized for the board the assumptions underpinning its valuation analysis. Ropes & Gray then provided the board with an update of legal due diligence review and on the negotiations with Ionis.

On March 9, 2018, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean and representatives of Ropes & Gray met with representatives of Ionis, including Ms. Parshall and Mr. Patterson (with Mr. O’Neill and Ms. Hougen participating telephonically) to negotiate remaining terms of the License Agreement. Mr. Fitzgerald was present for some of those negotiations. In the course of such meetings, Mr. Fitzgerald, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean and representatives of Ropes & Gray had a number of conference calls with Mr. Smith.

On March 10, 2018, Mr. Fitzgerald, Mr. Goldberg, Mr. MacLean and representatives of Ropes & Gray had a conference call regarding final negotiating points in the transaction, following which Mr. Smith was consulted and provided input by email.

From March 10, 2018 to March 14, 2018, additional drafts of the documents were exchanged between the parties.

On March 14, 2018, the Special Committee held a telephonic meeting attended by both members of the Special Committee, Ms. Soteropoulos, Mr. Goldberg, Mr. MacLean, and representatives of Cowen and Ropes & Gray. Representatives of Cowen delivered its oral fairness opinion to the Special Committee which was subsequently delivered in writing. After discussion, the Special Committee determined that each of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement were advisable and in the best interest of the Company. The Special Committee then determined to recommend the proposed transaction to the board.

Also on March 14, 2018, the board held a telephonic meeting attended by Ms. Hochberg, Ms. Soteropoulos, Mr. Fitzgerald, Mr. Smith, Mr. Goldberg, Mr. Maclean, and representatives of Cowen and Ropes & Gray. Dr. Crooke, Ms. Parshall and Mr. Gabrieli recused themselves from the meeting, citing potential conflicts of interests. The Special Committee confirmed that it had received Cowen’s oral fairness opinion which was subsequently delivered in writing. The Special Committee then recommended the proposed transaction to the board. Based on the Special Committee’s recommendation to the board, the board, other than Dr. Crooke, Mr. Gabrieli and Ms. Parshall, (1) approved the License Agreement, the Stock Purchase Agreement, the Amended

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and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder; (2) declared that each of the foregoing is advisable and in the best interest of the Company; (3) declared that the issuance of shares pursuant to the proposed transaction is advisable and in the best interest of the Company; (4) approved the amendment to Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares, and declared that such amendment is advisable and in the best interest of the Company; and (5) determined to submit the matters to the stockholders of the Company, other than the Interested Stockholders and the Company’s officers and directors, in the case of the approval of the overall transaction, with a recommendation that the stockholders approve the proposed transaction.

Following the meeting of the board to approve the proposed transaction, Ropes & Gray and Ionis prepared final definitive transaction documents. On the evening of March 14, 2018, the Company and Ionis executed the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement. Also on the evening of March 14, 2018, the Company and Novartis executed the stockholder voting agreement.

On the morning of March 15, 2018, the Company and Ionis issued a joint press release announcing the transaction.

Reasons for the Proposed Transaction; Recommendations of the Special Committee and the Board

Akcea’s purpose and reasons for undertaking the proposed transaction at this time are to augment its pipeline of RNA-targeted drugs to treat serious underserved diseases with the addition of inotersen to its commercialization platform. Inotersen represents another rare disease product that aligns with Akcea’s mission of bringing transformative medicines to patients.

Both the Special Committee and the board believe, based on their consideration of the reasons described below, that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement the transaction contemplated thereunder are advisable and in the best interest of the Company. Further, the board declared advisable and in the best interests of the Company the issuance of the shares pursuant to the proposed transaction and an amendment to Article IV of the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares.

In the course of reaching its determination and making its recommendations, the Special Committee relied on its expertise and knowledge of the Company and industry, was advised by independent legal, financial and market strategy advisors, and considered information with respect to the Company’s financial condition, results of operations, businesses, and competitive position and business strategy. The Special Committee also considered the following reasons being generally positive or favorable, each of which the Special Committee believed supported its determination and recommendations:

(a) the opportunity presented by the proposed transaction to enhance the Company’s pipeline, including the opportunity to immediately commercialize two products (i.e. volanesorsen and inotersen), if approved, which offers the potential to create significant benefits for the Company’s stockholders, including diversifying product offerings, allowing the Company to better leverage its infrastructure, expanding the markets about which the Company will develop expertise and creating prospects for further growth opportunities;
(b) that Ionis would purchase $200 million of the Company’s common stock priced by reference to a recent trading average, with no discount, to support the Company’s efforts to commercialize inotersen and AKCEA-TTR-LRx;
(c) the terms of the License Agreement and the Stock Purchase Agreement, including:
(1) the fact that much of the consideration that the Company would pay to Ionis in the proposed transaction, including the profit and loss sharing component and the payments due upon achievement of specified development and commercial milestones, is only required to be paid to Ionis in the event that inotersen is a further developmental and commercial success, significantly mitigating the financial risk of the proposed transaction to the Company;
(2) the fact that the Company is able to make the “upfront” payment to Ionis in shares of its common

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stock, issued without a discount to a current average market trading price, and the fact that Ionis will purchase $200 million of the Company’s common stock on the same terms;

(3) the non-waivable condition requiring the approval of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder by the affirmative vote of holders representing a majority of the issued and outstanding common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers;
(4) the limited termination rights available to Ionis and the requirement that Ionis agreed to vote its 68.2% of the Company’s outstanding common stock in favor of proposal no. 2, proposal no. 3 and proposal no. 4; and
(5) other terms and conditions of the License Agreement and the Stock Purchase Agreement, as discussed in the section entitled “The Transaction – The License Agreement” and “The Transaction – The Stock Purchase Agreement”, which the Special Committee, after consulting with its legal counsel, considered to be reasonable and consistent with precedents it deemed relevant;
(d) the belief of the Special Committee that the terms of the proposed transaction were the most favorable that could reasonably be obtained and that further negotiation would have created an unacceptable risk that Ionis would withdraw its offer and abandon the License Agreement, in which event the Company would lose the present opportunity to create long-term value for its stockholders and position the Company for future opportunities;
(e) the belief of the Special Committee that the consideration being paid to Ionis is fair and reasonable in relation to the market potential and expectations for the products and is expected to have an accretive impact on the long-term value of the Company accruing to the Company’s stockholders;
(f) the addition of Sarah Boyce, Chief Business Officer of Ionis, to the Company’s management team and board of directors, along with a sales and medical affairs team with commercialization experience and knowledge of inotersen to support the Company’s efforts to commercialize inotersen and AKCEA-TTR-LRx;
(g) the presentation by representatives of Cowen to the Special Committee on March 8, 2018 and March 14, 2018 and the oral opinion delivered by representatives of Cowen to the Special Committee on March 14, 2018, which was subsequently confirmed by delivery of a written opinion dated March 14, 2018, that based upon and subject to assumptions made, matters considered, and limitations on the scope of review undertaken by Cowen as set forth in its opinion, including the definition of consideration, as of such date, each of the consideration to be paid by the Company in the proposed transaction is fair, from a financial point of view, to the Company, as more fully described in the section entitled “Special Factors — Opinion of Cowen”;
(h) the ability of the stockholders that are disinterested with respect to the proposed transaction to vote against the proposed transaction if they do not agree with the Special Committee’s and the board’s recommendations, with the result that the transaction will not be consummated in the absence of approval by holders of a majority of the shares held by the stockholders other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers; and
(i) the likelihood that the proposed transaction would be completed, and that it would be completed in a reasonably prompt time frame, based on the limited conditions precedent to each party’s obligation to effect the proposed transaction, given the near-term expected regulatory approval and commercial launch of inotersen.

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Procedural Safeguards Considered by the Special Committee

The Special Committee also considered a number of reasons that are discussed below relating to the procedural safeguards that it believes were and are present to ensure the fairness of the proposed transaction. The Special Committee believes these reasons support its determinations and recommendations and provide assurance of the procedural fairness of the proposed transaction to the stockholders that are disinterested with respect to the proposed transaction:

(a) the authority granted to the Special Committee to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis;
(b) the non-waivable condition requiring the approval of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder by the affirmative vote of the holders of a majority of the issued and outstanding common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers; and the requirement that the effectiveness of the License Agreement is conditioned upon the closing of the transaction contemplated by the Stock Purchase Agreement, conditions that the Special Committee believes:
(1) incentivized Ionis, in the face of its conflicts and different interests, to negotiate with the Special Committee and agree upon terms that are expected to gain the approval of the stockholders that are disinterested with respect to the proposed transaction; and
(2) allows the stockholders that are disinterested with respect to the proposed transaction to reject the proposed transaction if they do not agree with the terms that the Special Committee negotiated or its recommendation, with the result that the proposed transaction would not be consummated;
(c) the ability for the Special Committee to determine not to pursue a potential transaction with Ionis;
(d) the Special Committee consists solely of independent and disinterested directors who (a) are not employees of the Company; (b) are not affiliated with Ionis; and (c) have no financial interest in the proposed transaction that are different from that of the stockholders that are disinterested with respect to the proposed transaction;
(e) the Special Committee held numerous meetings over three months with its independent financial and legal advisors to discuss and evaluate the proposed transaction and to vigorously direct the negotiation of the terms of such transaction, and both members of the Special Committee were actively engaged in the process on a regular basis;
(f) despite business demands to accelerate its process in evaluating the proposed transaction and to come to a decision more quickly, the Special Committee evaluated and negotiated the proposed transaction at an appropriate and deliberate pace;
(g) the Special Committee approved retention of L.E.K. Consulting to assist the Special Committee and the board in evaluating the commercial opportunity regarding inotersen, by providing a report that was substantively incorporated as a key component into the financial models and analyses prepared by Cowen;
(h) the Special Committee retained and received the advice of Cowen as its independent financial advisor;
(i) the opinion, dated March 14, 2018, of Cowen to the Special Committee as more fully described in the section entitled “Special Factors — Opinion of Cowen”; and
(j) the limited termination rights available to Ionis and the requirement that Ionis agreed to vote its 68.2% of the Company’s outstanding common stock in favor of proposal no. 2, proposal no. 3 and proposal no. 4.

In the course of reaching its determinations and making its recommendations, the Special Committee also considered the following uncertainties, risks and other factors concerning the proposed transaction as being generally negative or unfavorable:

(a) the Company’s stockholders other than Ionis will own only approximately 24.8% of the outstanding common stock immediately following the closing, and, assuming that all Milestone Events are achieved

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and if the Milestone Payments eligible to be paid in shares of common stock are paid in shares of common stock, and assuming such shares are issued at the same price per share of $18.75 as the price per share in the Initial Issuance, the Company’s stockholders other than Ionis will own 20.1% of the outstanding common stock, and thus will participate proportionally less in the Company’s future earnings or growth, if any, and will benefit less from increases, if any, in the value of the common stock or any potential future sale of the Company to a third party;

(b) the risk that, while the proposed transaction is expected to be completed, there can be no assurance that all conditions to the parties’ obligations to complete the proposed transaction will be satisfied, and as a result, it is possible that the proposed transaction may not be completed even if approved by the holders of a majority of the issued and outstanding shares of common stock that are disinterested with respect to the proposed transaction, which may require unwinding certain integration efforts between the companies given the near-term anticipated regulatory approval of inotersen;
(c) the risks and costs to the Company if the proposed transaction does not close, including the potential effect of the diversion of management and employee attention from the Company’s business and the substantial expenses which the Company will have incurred;
(d) the terms of Ionis’ participation in the proposed transaction and the fact that certain of the Company’s directors may have interests in the proposed transaction that are different from, or in addition to, those of stockholders that are disinterested with respect to the proposed transaction; and
(e) the issuance of the common stock pursuant to the proposed transaction, including the Initial Issuance and any Milestone Payments, may have an adverse effect on the market price of the Company’s common stock and any sale of such shares by Ionis, or the anticipation or possibility of such sales, could create downward pressure on the market price of the common stock.

This discussion of the negative or unfavorable reasons considered by the Special Committee is not intended to be exhaustive or to address all the risks associated with continuing to own common stock.

Recommendations of the Special Committee

The foregoing discussion of the information and reasons considered by the Special Committee and by the board in evaluating the proposed transaction is not intended to be exhaustive, but it does include the material reasons considered by the Special Committee and the board, respectively. In view of the wide variety of reasons considered, the Special Committee did not find it practicable or attempt to quantify, rank or otherwise assign relative weights to the foregoing reasons in reaching its conclusions. In addition, individual members of the Special Committee may have given different weights to different reasons and may have viewed some reasons more positively or negatively than others. The Special Committee based its recommendations and actions upon the totality of the information that it considered.

While the Special Committee considered potentially positive and negative reasons, it concluded that, overall, the potentially positive reasons outweighed the potentially negative reasons, and at a meeting held on March 14, 2018, the Special Committee unanimously:

(a) determined that each of (a) the License Agreement, (b) the Stock Purchase Agreement, (c) the Amended and Restated Services Agreement and (d) the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder were advisable and in the best interest of the Company; and
(b) determined to recommend the transaction to the board of directors.

Reasons Considered by the Board

Following presentations by the Special Committee and its legal and financial advisors and questions from and discussion among the members of the board, the board determined that the proposed transaction was advisable and in the best interest of the Company. In reaching these determinations, the board considered:

(a) the procedural fairness of the proposed transaction, as described in more detail above;
(b) the Special Committee’s analysis, as described in more detail above, conclusions and unanimous determination that the proposed transaction was advisable and in the best interest of the Company; and

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(c) the Special Committee’s unanimous recommendation that the board approve the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction, submit the matters for consideration by the Company’s stockholders other than the Interested Stockholders, and recommend that the stockholders approve such matters at the special meeting.

Recommendations of the Board of Directors

The board of directors consists of seven directors, several of whom may have interests in the proposed transaction different from the interests of the stockholders of the Company that are disinterested with respect to the proposed transaction. The board of directors established the Special Committee of independent, non-employee directors that are disinterested with respect to the proposed transaction and empowered it with the authority to evaluate and negotiate, as it deemed desirable, a potential transaction with Ionis, and, if appropriate, make a recommendation to the board of directors regarding the proposed transaction. On March 14, 2018, at a meeting at which Dr. Crooke, Ms. Parshall and Mr. Gabrieli recused themselves, citing potential conflicts of interest, on the basis of the Special Committee’s recommendation and the other reasons described below, the board of directors:

(a) approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder;
(b) declared that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interest of the Company;
(c) declared that the issuance of the shares pursuant to the proposed transaction is advisable and in the best interest of the Company;
(d) approved the amendment to Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 and declared such amendment shares is advisable and in the best interest of the Company; and
(e) determined to submit the matters to the stockholders of the Company, including with respect to proposal no. 1 to the stockholders other than the Interested Stockholders, with a recommendation that the stockholders vote for each of the proposals set forth in this proxy statement.

Interests of Ionis and Certain of the Company’s Directors

When considering the recommendation of the board of directors, you should be aware that, as the controlling stockholder and as the counterparty in the proposed transaction, Ionis may have interests in the transaction contemplated under the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement that are different from, or in addition to, the interests of the Company’s other stockholders, as described below and throughout this proxy statement. Furthermore, because of their affiliation with Ionis, you should be aware that certain of the Company’s directors, including Dr. Crooke and Ms. Parshall, may have interests in the transaction that are different from, or in addition to, the interests of the Company’s stockholders generally, as described below and throughout this proxy statement. The Special Committee and the members of the board of directors who voted on the proposed transaction were aware of these additional interests, and considered them, when they approved the License Agreement and Stock Purchase Agreement and the transaction contemplated thereunder, including the issuance of additional shares of common stock and the amendment to the Company’s Amended and Restated Certificate of Incorporation, and recommended that stockholders vote in favor of the proposals.

Ionis’ interests that may be different, or in addition to, interests from the stockholders generally include:

(a) Ionis, as the counterparty, was directly adverse to the Company in the negotiation of the proposed transaction;
(b) Ionis’ percentage ownership of the Company will increase as a result of the Initial Issuance;
(c) Ionis will be eligible to receive Milestone Payments made in connection with the achievement of Milestone Events, which is an interest not shared by the Company’s stockholders generally; and

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(d) Ionis’ percentage ownership of the Company is likely to increase if certain Milestone Payments, if achieved, are paid in shares of common stock as contemplated by the terms of the License Agreement.

Interests by Dr. Crooke, Ms. Parshall and Mr. Gabrieli that may be different from the stockholders include:

(a) Dr. Crooke is Ionis’ Chief Executive Officer and Chairman of Ionis’ Board of Directors;
(b) Ms. Parshall is currently a Senior Strategic Advisor for Ionis, and she formerly served as Chief Operating Officer for Ionis from December 2007 until January 2018 and Chief Financial Officer for Ionis from June 1994 until December 2012;
(c) Mr. Gabrieli was a partner of Bessemer Venture Partners, the founding investor in Ionis, and Mr. Gabrieli served on Ionis’ board of directors for approximately 18 years until 2006; and
(d) Dr. Crooke, Ms. Parshall and Mr. Gabrieli beneficially own, respectively, 1,322,209, 317,227 and 68,296 shares of Ionis common stock as of March 1, 2018.

Certain Unaudited Financial Forecasts

The Company does not, as a matter of course, publicly disclose financial forecasts or projections. However, in connection with the transaction, members of the Company’s management prepared certain unaudited prospective financial information that projects revenue and expenses related to the development and commercialization of inotersen and AKCEA-TTR-LRx through the final patent expiration in 2031 (the “forecasts”). The forecasts were reviewed and approved by the Special Committee on January 10, 2018 and March 2, 2018. The forecasts were also provided to the Special Committee’s financial advisor for its use and reliance in connection with its financial analysis and opinion as described below in “Special Factors—Opinion of Cowen.”

The forecasts were not prepared with a view toward public disclosure and do not necessarily comply with GAAP or the guidelines published by the SEC or established by the American Institute of Certified Public Accountants with respect to prospective financial information. Neither the Company’s financial advisor, Cowen, nor the Company’s independent auditors or any other independent accountants have audited, compiled, examined or performed any procedures with respect to the forecasts, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information. The forecasts contain non-GAAP financial measures within the meaning of applicable rules and regulations of the SEC. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures the Company uses may not be comparable to similarly titled amounts used by other companies. In light of the foregoing factors and the uncertainties inherent in the forecasts, stockholders are cautioned not to place undue reliance on the forecasts.

The forecasts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those predicted, and should be read with caution. Although presented with numerical specificity the forecasts were based on numerous variables, estimates and assumptions that are inherently uncertain and many of which are beyond the Company’s control. The estimates and assumptions upon which the forecasts were based were made at the time the forecasts were prepared and necessarily involve judgments of the Company’s management that were made at the time they were prepared, which involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions and future business decisions that may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among other things, the inherent business and economic conditions affecting the industry in which the Company operates, the risks and uncertainties described in the sections of this proxy statement entitled “Risk Factors” and “Special Note Regarding Forward−Looking Statements”, and in the reports that the Company files with the SEC from time to time, all of which are difficult or impossible to predict. There can be no assurance that the forecasts will be realized, and actual results may vary materially from those shown. The forecasts were prepared by members of management based on information available at the time the forecasts were prepared and do not take into account any circumstances or events occurring after the date they were prepared. Given that the forecasts cover multiple years, by their nature they become less predictive with each successive year.

The summary of these forecasts set forth below is included solely to give the Company’s stockholders insight into the management projections that were used by Cowen in its opinion and to provide stockholders with management’s view on the financial opportunity presented by inotersen and AKCEA-TTR-LRx. The inclusion of

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this information in this proxy statement should not be regarded as an indication that the Company, Ionis or any of the Company’s or Ionis’ respective affiliates, advisors or representatives has considered or consider the forecasts to necessarily reflect actual future events, and the information should not be relied upon as such. Neither the Company, Ionis, nor any of the Company’s or Ionis’ respective affiliates, advisors, officers, directors or representatives has made or makes any representation to any of the Company’s stockholders or other person that the forecasts will be achieved. Ionis has made no representations to the Company concerning the forecasts.

There is inherent conditionality in projecting year-on-year commercial performance of the inotersen and AKCEA-TTR-LRx program because of, among other reasons, the risks associated with the development and commercialization of a product in highly competitive markets for rare diseases, as well as the reasons discussed in further detail in the section of the Proxy entitled “Special Factors—Reasons for the Proposed Transaction; Recommendation of the Special Committee and the Board”. In view of that conditionality, the Company believes that the most reliable forward-looking view of the financial performance of the inotersen and AKCEA-TTR-LRx program is a presentation of the Company’s anticipated trends in revenue and cash flow that the Company expects to generate from its proposed commercialization of the inotersen and AKCEA-TTR-LRx program.

Using the forecasts of operating profit(loss) subject to the sharing of profits and losses, and based on the years in which the management team projected the revenue would be generated and expenses would be incurred, the inotersen and AKCEA-TTR-LRx program is expected to recover the non-sales based Milestone Payments (comprised of the up-front payment of $150 million and of the development and regulatory Milestone Payments for AKCEA-TTR-LRx of $220 million) when cumulative revenue of approximately $2 billion has been achieved. These projections assume that inotersen is approved in multiple markets and that AKCEA-TTR-LRx meets meaningful endpoints of its registrational trial and is, also, approved in multiple markets. Revenues are forecast to increase in a generally linear fashion from 2019 until 2024, when management expects the products would achieve peak sales level. Other than the initial launch years, revenues and free cash flow are generally evenly allocated across all years, with no unusual events or singularly significant annual period (disregarding any Milestone Payments). The forecasts anticipate the Company would earn such $2 billion of cumulative revenue in either 2022 or 2023. From the time cumulative revenues of $2 billion are projected to be achieved through expiration of the relevant patents in 2031, the forecasts anticipate cumulative revenue in excess of $13 billion, generating cumulative cash flow to 2031 in excess of $3 billion.

Opinion of Cowen

Pursuant to an engagement letter dated December 21, 2017, the Special Committee retained Cowen and Company, LLC to render an opinion to the Special Committee as to the fairness, from a financial point of view, to the Company, of the consideration (consisting of $150 million, payable up-front in shares of the Company’s common stock, together with the Milestone Payments projected by management to be paid in the product forecasts provided by management of the Company (collectively, the “Consideration”)) to be paid by the Company in the proposed transaction.

On March 14, 2018, Cowen delivered certain of its written analyses and its oral opinion to the Special Committee, subsequently confirmed in writing as of the same date, to the effect that and subject to the various assumptions, qualifications and limitations set forth therein, as of March 14, 2018, the Consideration to be paid by the Company in the proposed transaction was fair, from a financial point of view, to the Company. The full text of the written opinion of Cowen, dated March 14, 2018, is attached as Annex E and is incorporated by reference. Stockholders are urged to read the opinion in its entirety for the assumptions made, procedures followed, other matters considered and limits of the review by Cowen. The summary of the written opinion of Cowen set forth herein is qualified in its entirety by reference to the full text of such opinion. Cowen’s analyses and opinion were prepared for and addressed to the Special Committee and are directed only to the fairness, from a financial point of view, to the Company, of the Consideration to be paid by the Company in the proposed transaction, and do not constitute an opinion as to the merits of the proposed transaction or a recommendation to the Company’s board or to any stockholder or any other person as to how to vote with respect to the proposed transaction. The Consideration to be paid by the Company in the proposed transaction was determined through negotiations between the Special Committee and the Company and Ionis and not pursuant to recommendations of Cowen.

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In arriving at its opinion, Cowen reviewed and considered such financial and other matters as it deemed relevant, including, among other things:

a draft of the License Agreement dated March 14, 2018;
a draft of the Stock Purchase Agreement dated March 14, 2018;
certain publicly available financial and other information concerning the Company and certain other relevant financial and operating data concerning the Company furnished to Cowen by management of the Company;
certain publicly available financial and other information concerning Ionis’ inotersen and AKCEA-TTR-LRx and certain other relevant financial and operating data concerning inotersen and AKCEA-TTR-LRx furnished to Cowen by management of the Company;
certain internal financial analyses, financial forecasts, reports and other information concerning inotersen and AKCEA-TTR-LRx prepared by the management of the Company (the “product forecasts”);
certain information concerning inotersen and AKCEA-TTR-LRx and the Company in Wall Street analyst reports;
discussions Cowen had with certain members of the management of the Company concerning the prospects of inotersen and AKCEA-TTR-LRx and such other matters Cowen deemed relevant;
certain financial and stock market information for the Company as compared with similar information for certain publicly traded companies Cowen deemed relevant; and
such other information, financial studies, analyses and investigations and such other factors that Cowen deemed relevant for the purposes of its opinion.

In conducting its review and arriving at its opinion, Cowen, with the Company’s consent, assumed and relied, without independent investigation, upon the accuracy and completeness of all financial and other information provided to it by the Company or which was publicly available or was otherwise reviewed by Cowen. Cowen did not undertake any responsibility for the accuracy, completeness or reasonableness of, or independent verification of, such information. Cowen relied upon, without independent verification, the assessment of the management of the Company as to the viability of, and risks associated with, inotersen and AKCEA-TTR-LRx. In addition, Cowen did not conduct, nor assume any obligation to conduct, any physical inspection of the properties or facilities of the Company or Ionis. Cowen further relied upon the Company’s representation that all information provided to it by the Company was accurate and complete in all material respects. Cowen, with the Company’s consent, assumed that the product forecasts were reasonably prepared by the management of the Company on bases reflecting the best available estimates and good faith judgments of such management as to the future performance of inotersen and AKCEA-TTR-LRx, and that such product forecasts utilized in Cowen’s analyses provided a reasonable basis for its opinion. Cowen expressed no opinion as to the product forecasts or the assumptions on which they were made. Cowen expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which Cowen becomes aware after the date of its opinion.

Cowen did not make or obtain any independent evaluations, valuations or appraisals of inotersen and AKCEA-TTR-LRx or of the assets or liabilities of the Company, nor, with the exception of the report prepared by L.E.K., was Cowen furnished with such materials. In addition, Cowen did not evaluate the effect of the proposed transaction on the solvency or fair value of the Company under any state or federal laws relating to bankruptcy, insolvency or similar matters. Cowen’s opinion did not address any legal, tax or accounting matters related to the License Agreement or the Stock Purchase Agreement or the proposed transaction, as to which Cowen assumed that the Company, the Special Committee and the Company’s board have received such advice from legal, tax and accounting advisors as each has determined appropriate. Cowen’s opinion addressed only the fairness, from a financial point of view, to the Company of the Consideration to be paid by the Company in the proposed transaction. Cowen expressed no view as to any other aspect or implication of the proposed transaction or any other agreement, arrangement or understanding entered into in connection with the proposed transaction or otherwise. Cowen’s opinion was necessarily based upon economic and market conditions and other circumstances

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as they existed and could be evaluated by Cowen on the date of its opinion. It should be understood that although subsequent developments may affect its opinion, Cowen does not have any obligation to update, revise or reaffirm its opinion and Cowen expressly disclaimed any responsibility to do so.

Cowen did not consider any potential legislative or regulatory changes being considered or recently enacted by the United States or any foreign government, or any domestic or foreign regulatory body, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the Securities and Exchange Commission, the Financial Accounting Standards Board, or any similar foreign regulatory body or board.

For purposes of rendering its opinion, Cowen assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the License Agreement and the Stock Purchase Agreement are true and correct, that each party will perform all of the covenants and agreements required to be performed by it under the License Agreement and the Stock Purchase Agreement and that all conditions to the consummation of the proposed transaction will be satisfied without waiver thereof. Cowen assumed that the final form of the License Agreement and the Stock Purchase Agreement would be substantially similar to the last drafts received by Cowen prior to rendering its opinion. Cowen also assumed that all governmental, regulatory and other consents and approvals contemplated by the License Agreement and the Stock Purchase Agreement would be obtained and that, in the course of obtaining any of those consents, no restrictions would be imposed or waivers made that would have an adverse effect on the contemplated benefits of the proposed transaction. Cowen assumed that the proposed transaction will be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations.

Cowen’s opinion does not constitute a recommendation to the Company’s board on whether or not to approve the proposed transaction or to any stockholder or any other person as to how to vote with respect to the proposed transaction or to take any other action in connection with the proposed transaction or otherwise. Cowen’s opinion is limited to the fairness, from a financial point of view, to the Company of the Consideration to be paid by the Company in the proposed transaction. Cowen’s opinion did not imply any conclusion as to what the value, price or trading range of the Company’s common stock actually will be following consummation of the proposed transaction or otherwise, which may vary depending on numerous factors that generally influence the price of securities. Cowen was not requested to opine as to, and its opinion did not in any manner address, the intrinsic value of the Company or of the shares of the Company’s common stock to be issued to Ionis in the proposed transaction, and Cowen did not perform any analysis, including any intrinsic value analysis, regarding the intrinsic value of the Company or such shares. Cowen assumed, with the Special Committee’s consent, that the market capitalization of the Company at all times relevant to its opinion represented the intrinsic value of the Company that would have been derived from an intrinsic value analysis of the Company. Cowen expresses no opinion, and was not asked by the Special Committee to express any opinion, as to the underlying business reasons that may support the decision of the Special Committee to approve, or the Company’s decision to effect, the proposed transaction or the relative merits of the proposed transaction as compared to other business strategies or transactions that might be available to the Company. Additionally, Cowen was not engaged to be involved in any determinations of the Special Committee, the Company’s board or the management of the Company to pursue strategic alternatives, nor did Cowen investigate any other alternative transactions that might be available to the Company. In addition, Cowen has not been requested to opine as to, and Cowen’s opinion does not in any manner address, (i) the fairness of the Consideration or any other component of the proposed transaction to any constituencies of the Company, including the holders of any class of securities or creditors of the Company or (ii) whether the Company or Ionis has sufficient cash, available lines of credit or other sources of funds to enable it to pay any amounts that are to be payable in cash in connection with the proposed transaction.

The following is a summary of the principal financial analyses performed by Cowen to arrive at its opinion. Considering any data set forth in the summary without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses. Cowen performed certain procedures, including each of the financial analyses described below, and reviewed with the management of the Company the assumptions on which such analyses were based and other factors, including the historical and projected financial results of the Company and inotersen and AKCEA-TTR-LRx.

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Stock Trading History. To provide contextual data and comparative market data, Cowen reviewed the historical market prices of the Company’s common stock from July 14, 2017 (the date the Company’s common stock began trading on the NASDAQ Global Select Market following its initial public offering) to March 13, 2018. Cowen noted that over the indicated period the high and low prices for shares of the Company were $31.23 and $8.10, respectively.

Pro Forma Ownership Analysis. Cowen analyzed the pro forma ownership of the Company by Ionis based on the volume weighted average share price of the Company’s common stock for the twenty trading days prior to March 13, 2018, and noted that on that basis Ionis would own approximately 71.9% of the Company on a fully-diluted basis following the Initial Issuance, an increase of approximately 7.4% from its fully-diluted ownership interest of approximately 64.4% on March 13, 2018.

Net Present Value Analysis. Cowen performed an analysis that estimated the net present value of inotersen and AKCEA-TTR-LRx to the Company through the year 2031. Cowen’s analysis was based on projections by the Company’s management as of March 2, 2018, and, with the consent of the Special Committee, assumed that the Milestone Events specified in the License Agreement would be achieved to the extent the projections indicated they would be achieved and that the related Milestone Payments would be paid by the Company to Ionis in cash. Cowen’s analysis also assumed that, pursuant to the terms of the License Agreement, operating expenses to complete the development of AKCEA-TTR-LRx would be paid 50% by the Company and 50% by Ionis, and, solely for the purposes of this analysis, that profits and losses would be shared with Ionis on a 60/40 basis (60% to Ionis and 40% to the Company) prior to an assumed launch date and equally on a 50/50 basis thereafter. Utilizing these assumptions, Cowen estimated a range of values of inotersen and AKCEA-TTR-LRx to the Company based upon the net present value of the projected unlevered free cash flows of inotersen and AKCEA-TTR-LRx described in the financial product forecasts provided by management of the Company, for the fiscal years ended December 31, 2018 through December 31, 2031. In performing this analysis, Cowen utilized discount rates ranging from 15.0% to 17.0%, which were selected based on the weighted average cost of capital calculated using the median levered beta from certain other companies (the “Selected Companies”) whose securities are publicly traded and which Cowen believes have operating, market valuation and trading valuations similar to what might be expected of the Company. The Selected Companies were Adamas Pharmaceuticals, Inc., Agios Pharmaceuticals, Inc., Alnylam Pharmaceuticals Inc., Array BioPharma Inc., GW Pharmaceuticals Plc, Neurocrine Biosciences, Inc., Radius Health, Inc. and Sarepta Therapeutics, Inc. Unlevered free cash flow was calculated by taking projected earnings before interest expense and income taxes (“EBIT”) and subtracting from this amount projected taxes and projected capitalized Milestone Payments and adding back projected amortization of capitalized up-front consideration and Milestone Payments (Milestone Payments made to Ionis prior to regulatory approval in any jurisdiction are expensed immediately and all Milestone Payments made after approval are capitalized and amortized over the life of the patent). Utilizing this methodology, Cowen compared the upfront portion of the Consideration to the projected net present value of inotersen and AKCEA-TTR-LRx, taking into account the Milestone Payments, projected to be paid in the product forecasts provided by management of the Company as reductions in the cash flows that would otherwise have been realized by the Company, of approximately $684 million, based on a discount rate of 15.0%, $619 million, based on a discount rate of 16.0% and $561 million, based on a discount rate of 17.0%.

Has/Gets Analysis. Cowen performed an analysis to estimate the impact of the proposed transaction on the Company’s equity value per share. Cowen’s analysis was based on the Company’s standalone intrinsic value, plus the net present value of inotersen and AKCEA-TTR-LRx, plus the $200 million of gross proceeds received by the Company from Ionis pursuant to the Stock Purchase Agreement. Cowen assumed, with the Special Committee’s consent, that the market capitalization of the Company represented the intrinsic value of the Company that would have been derived from an intrinsic value analysis of the Company, and calculated an estimated standalone intrinsic value for the Company of approximately $1.386 billion (using the closing market price of the Company of $19.64 on March 13, 2018). Cowen used $619 million as the net present value of inotersen and AKCEA-TTR-LRx, which is the mid-point of the net present value analysis set forth above. Using those inputs, Cowen calculated an estimated intrinsic value of approximately $2.205 billion for the Company after the closing of the proposed transaction, which implied an equity value per share of the Company’s common stock of $24.50, an increase of approximately 24.8% from the $19.64 per share used in determining the Company’s standalone intrinsic value.

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The summary set forth above does not purport to be a complete description of all the analyses performed by Cowen. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of these methods to the particular circumstances and, therefore, such an opinion is not readily susceptible to partial analysis or summary description. Cowen did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, notwithstanding the separate factors summarized above, Cowen believes, and has advised the Special Committee, that its analyses must be considered as a whole and that selecting portions of its analyses and the factors considered by it, without considering all analyses and factors, could create an incomplete view of the process underlying its opinion. In performing its analyses, Cowen made numerous assumptions with respect to industry performance, business and economic conditions and other matters, many of which are beyond the control of the Company. These analyses performed by Cowen are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses or products do not purport to be appraisals or to reflect the prices at which businesses, products or securities may actually be sold. Accordingly, such analyses and estimates are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors. None of the Company, Ionis, Cowen or any other person assumes responsibility if future results are materially different from those projected. The analyses supplied by Cowen and its opinion were among several factors taken into consideration by the Special Committee in making its decision to enter into the proposed transaction and should not be considered as determinative of such decision.

Cowen was selected by the Company and the Special Committee to render an opinion to the Special Committee because Cowen is a nationally recognized investment banking firm and because, as part of its investment banking business, Cowen is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. Cowen is providing financial services for the Company and the Special Committee with respect to the proposed transaction for which it will receive customary fees. In addition, in the ordinary course of its business, Cowen and its affiliates may actively trade the equity securities of the Company and Ionis for their own account and for the accounts of their customers, and, accordingly, may at any time hold a long or short position in such securities. Cowen and its affiliates in the ordinary course of business have from time to time provided, and in the future may continue to provide, commercial and investment banking services to the Company, including serving as a financial advisor on potential acquisitions and as an underwriter on equity offerings, and have received and may in the future receive fees for the rendering of such services. In particular, in the two years preceding the date of its opinion, Cowen served as lead-left underwriter in the Company’s initial public offering and received customary compensation for the rendering of such service. In the two years preceding the date of its opinion, Cowen has not performed any commercial or investment banking services for Ionis for which Cowen has received compensation. The Company has also agreed to offer to engage Cowen to serve as one of the Company’s lenders or arrangers, lead underwriters, lead purchasers or lead placement agents, as the case may be, in connection with any debt financing, public offering, Rule 144A offering or any private placement of securities to finance the Consideration, and Cowen would receive fees for the rendering of any such services. As of the date of Cowen’s opinion, Cowen was not aware of any plans by the Company to raise any such financing. The issuance of Cowen’s opinion was approved by Cowen’s Fairness Opinion Review Committee.

Pursuant to the Cowen engagement letter, if the proposed transaction is consummated, Cowen will be entitled to receive a transaction fee equal to $2.25 million. The Company has also agreed to pay a fee of $1 million to Cowen for rendering its opinion, which fee shall be credited against any transaction fee paid. Additionally, the Company has agreed to reimburse Cowen for its out-of-pocket expenses, including attorneys’ fees, and has agreed to indemnify Cowen against certain liabilities, including liabilities under the federal securities laws. The terms of the fee arrangement with Cowen, which are customary in transactions of this nature, were negotiated at arm’s length between the Company and Cowen, and the Special Committee was aware of the arrangement, including the fact that a significant portion of the fee payable to Cowen is contingent upon the completion of the proposed transaction.

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THE TRANSACTION

While the Company believes that the summary below of the transaction documents describes the material terms of such documents, it may not contain all of the information that is important to you. The summary of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement are qualified in their entirety by the relevant agreements themselves, which are attached to this proxy statement as Annex A, Annex B, Annex C and Annex D, respectively. The Company urges you to read this entire proxy statement carefully, including the appendices, and the documents incorporated by reference in this proxy statement, before voting. Further, representations, warranties and covenants in the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement are not intended to function or to be relied on as public disclosures. For more information about accessing the information the Company files with the SEC, please see the section entitled “Where You Can Find More Information” below.

Inotersen

Inotersen is a Generation 2+ antisense drug designed to treat people with hereditary TTR amyloidosis, or hATTR, a rare, progressive, fatal disease.

In people with hATTR, both the mutant and wild type, or wt, TTR protein builds up as fibrils in the tissues, such as peripheral nerves, heart, gastrointestinal system, eyes, kidneys, central nervous system, thyroid and bone marrow. The presence of TTR fibrils interferes with the normal function of these tissues. As the TTR protein fibrils enlarge, more tissue damage occurs and the disease worsens, resulting in poor quality of life and eventually death. Inotersen is designed to reduce the production of the TTR protein, the underlying cause of ATTR. Inotersen is proposed to be administered as a once weekly, self-administered, at-home, subcutaneous injection.

TTR amyloidosis that is the result of inherited mutations in the TTR gene is referred to as hATTR. There are an estimated 50,000 people worldwide with hATTR. There are two primary manifestations of hATTR: polyneuropathy and cardiomyopathy. Many people with hATTR often experience both manifestations, but often one symptom or the other is diagnosed first and is more pronounced. Polyneuropathy due to hATTR is caused by the accumulation of misfolded mutated TTR protein in the peripheral nerves. People with polyneuropathy due to hATTR experience ongoing debilitating nerve damage throughout their body resulting in the progressive loss of sensation in the extremities that progresses centrally, and progressive loss of motor functions, such as walking. These people also accumulate TTR in other major organs, which progressively compromise their function and eventually leads to death within five to fifteen years of disease onset. ATTR cardiomyopathy is caused by the accumulation of misfolded TTR protein in the cardiac muscle. ATTR can also result from normal, non-mutant, TTR protein forming fibrils, primarily in the heart. This form of the disease is referred to as wt-ATTR. It is estimated that more than 200,000 people worldwide have wt-ATTR. People with hATTR cardiomyopathy and wt-ATTR experience ongoing debilitating heart damage resulting in progressive heart failure, which results in death within 3 to 5 years from disease onset.

In May 2017, Ionis completed the NEURO-TTR study, a randomized, double-blinded, placebo-controlled, international Phase 3 study in patients with polyneuropathy due to hATTR. Results from the study demonstrated benefit compared to placebo across both primary endpoints of the study: the Norfolk Quality of Life Questionnaire-Diabetic Neuropathy, or Norfolk QoL-DN, and the modified Neuropathy Impairment Score +7, or mNIS+7, at both eight and 15 months of treatment. In addition, consistent and significant benefit was observed in both the Norfolk-QoL-DN and mNIS+7, independent of disease stage, types of mutation, previous treatment with TTR protein stabilizers or presence of cardiomyopathy. Inotersen-treated patients benefited significantly in the quality of life primary endpoint with 50 percent demonstrating improvement from baseline. Inotersen-treated patients achieved a mean 11.68 point benefit in the Norfolk QoL-DN score at 15 months of treatment compared to placebo-treated patients (mean change from baseline of 0.99 vs. 12.67, p=0.0006). In addition, clinically meaningful benefit compared to placebo was observed in the SF-36 physical component score, a measure of general health and quality of life. Inotersen-treated patients also benefited significantly in the co-primary endpoint of disease control, mNIS+7, with a mean 19.73-point benefit observed after 15 months of treatment, compared to placebo-treated patients (p = 0.00000004).

Two key safety issues were identified during the study: thrombocytopenia and safety signals related to renal function. Enhanced monitoring was implemented during the study to support early detection and management of these

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issues. Serious platelet and renal events were infrequent and manageable with routine monitoring, which has proven effective since implementation. Other serious adverse events were observed in 24.1 percent of inotersen-treated patients and 21.7 percent of placebo-treated patients. No cumulative toxicities have been identified with long-term exposure. Adverse events occurring in ≥ 10 percent of patients and twice as frequently in inotersen-treated patients compared with placebo-treated patients, included thrombocytopenia/platelet count decreases, nausea, pyrexia, chills, vomiting, and anemia. Injection site reactions accounted for less than 1 percent of all injections and were mild or moderate in severity. There were no discontinuations due to injection site reactions.

The overall mortality rate in the NEURO-TTR study was 2.9 percent and was lower than mortality rates reported in other studies in patients with hATTR. There was a total of five deaths in the study, five (4.7 percent) in the inotersen arm and zero in the placebo arm. Four deaths in the inotersen arm were associated with disease progression and considered unrelated to treatment. There was one fatal intracranial hemorrhage in conjunction with serious thrombocytopenia. No serious thrombocytopenia was observed following implementation of more frequent monitoring.

Regulatory Review

Inotersen is currently under regulatory review for marketing authorization in the U.S. and EU for the treatment of hATTR. Inotersen has been granted Priority Review by the FDA and has a PDUFA date of July 6, 2018. The EMA also granted accelerated assessment to inotersen, which may reduce standard review time. In addition, an open-label extension study, or OLE, is ongoing for patients who have completed the NEURO-TTR study, in which all patients are treated with inotersen. Ionis has also opened an expanded access program, or EAP, for eligible patients, beginning with sites in the U.S.

Competition

The Company believes the following drugs could compete with inotersen:

Drug
Company
Drug
Description
Phase
Admin/Dosing
Efficacy(1)
Safety(1)
Patisiran
Alnylam
An RNAi drug formulated with lipid nanoparticles to inhibit TTR mRNA
Registration
Infusion every 3 weeks with pre-treatment with steroids
84.3% mean reduction in TTR at 18 months
Most common adverse events more frequently observed in patisiran arm vs. placebo were peripheral edema (29.7% vs.
22.1%) and infusion-related reactions (18.9% vs. 9.1%)
Tafamidis
Pfizer
A small molecule drug to stabilize TTR Protein
3 to support refiling in the U.S., Approved in the EU
Daily oral capsule
In 45% of people taking Tafamidis, nerve function either improved or stabilized, compared with 30% of patients taking placebo
Urinary tract infection, vaginal infection, upper abdominal pain and diarrhea
Diflunisal
N/A Generic
A non-steroid anti-inflammatory agent
Approved (but not for ATTR)
Daily oral capsule/doses
Improved nerve function as shown by lower Neuropathy Impairment Score plus 7 nerve tests, or NIS+7. The NIS+7 score increased by 25.0 points in the placebo group versus 8.7 points in the diflunisal group
In two studies repurposing diflunisal for use in TTR amyloidosis, drug-related adverse events that led to discontinuation were: gastrointestinal bleeding, low platelets, deterioration of renal function, congestive heart failure, glaucoma and nausea.
Tolcapone
SOM Biotech
Small molecule repurposed generic drug
2
Daily oral dose
Shows binding and stabilization of TTR in humans
No drug related adverse events reported
ALN-TTRsc02
Alnylam
An RNAi drug conjugated with GalNAC to inhibit TTR mRNA in liver cells
1
Monthly or quarterly
In healthy volunteers, a single dose showed mean max TTR knockdown of 97%
Injection site reactions were reported
(1) Taken from public documents including respective company press releases, company presentations, and scientific presentations. Diflunisal efficacy and safety came from the published papers of two investigator sponsored studies, Berk JL, Suhr OB, Obici L, et al. Repurposing Diflunisal for Familial Amyloid Polyneuropathy: A Randomized Clinical Trial. JAMA. 2013;310(24):2658-2667 and Sekijima YS, Toja K, Morita H, et al. Safety and efficacy of long-term diflunisal administration in hereditary transthyretin (ATTR) amyloidosis. Amyloid. 2015;22(2):79-83.

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The Company believes that of the drugs that are in development or on the market, inotersen’s closest competitor is patisiran. Alnylam is developing patisiran for hATTR. Patisiran is an intravenously administered RNAi molecule that is formulated with lipid nanoparticles to enable delivery of the drug to the liver. It is administered via an infusion by a healthcare provider in a clinical setting every three weeks. People receiving patisiran are pretreated with steroids to prevent infusion related reactions. In October 2016, Alnylam discontinued development of revusiran, its drug for the cardiomyopathy form of TTR amyloidosis, due to a safety finding in its Phase 3 study. Revusiran was a subcutaneously administered RNAi molecule that was Alnylam’s first generation GalNAc drug and was dosed at 500 mg per week as two subcutaneous injections. Alnylam completed Phase 1 studies of its second generation GalNAC, ALN-TTRsc02. Because inotersen has a PDUFA date of July 6, 2018 and Alnylam’s PDUFA date for patisiran is August 11, 2018, the Company believes that inotersen could be the first RNA-targeted drug on the market for the treatment of people with hATTR. The Company also believes that the overall product profile of inotersen. as a once weekly, subcutaneous injection with no pretreatment has advantages to the drugs detailed above, however potential platelet and renal monitoring requirements in the commercial setting, which have yet to be determined, could impact the future competitive profile of inotersen.

Manufacturing

For inotersen’s commercial launch, the Company plans to use Contract Manufacturing Organizations (“CMOs”) to produce custom raw materials, Active Pharmaceutical Ingredients (“API”) and finished goods. Its CMO partners have extensive technical expertise and cGMP experience. The Company believes the current network of CMO partners developed by Ionis is capable of providing sufficient quantities to meet anticipated commercial demands. Additionally, the Company will evaluate further relationships with additional suppliers to increase overall capacity as well as reduce further risks. While the Company believes that there are alternate sources of supply that can satisfy its commercial requirements, it cannot be certain that identifying and establishing relationships with such sources, if necessary, would not result in significant delay or material additional costs. The Company also cannot provide assurance that it will not experience a disruption in supply from its current CMO partners.

CMOs are subject to the FDA’s cGMP requirements and other rules and regulations prescribed by foreign regulatory authorities. The Company depends on its CMO partners for continued compliance with cGMP requirements and applicable foreign standards.

Patents

Ionis obtained issued claims covering inotersen in the United States. The issued U.S. claims protect inotersen from generic competition in the United States until at least 2031. Under the License Agreement, each of the Company and Ionis has the right to pursue different types of patents applications designed to protect inotersen in foreign jurisdictions. The table below lists the current issued patents protecting inotersen in key jurisdictions:

Jurisdiction
Patent No.
Title
Expiration
Description of Claims
United States
8,101,743
MODULATION OF TRANSTHYRETIN EXPRESSION
2025
Antisense sequence and chemistry of inotersen
United States
8,697,860
DIAGNOSIS AND TREATMENT OF DISEASE
2031
Composition of inotersen
United States
9,061,044
MODULATION OF TRANSTHYRETIN EXPRESSION
2031
Sodium salt composition of inotersen
United States
9,399,774
MODULATION OF TRANSTHYRETIN EXPRESSION
2031
Methods of treating transthyretin amyloidosis by administering inotersen
Japan
JP5896175
MODULATION OF TRANSTHYRETIN EXPRESSION
2031
Composition of inotersen
Europe
EP2563920
MODULATION OF TRANSTHYRETIN EXPRESSION
2031
Composition of inotersen

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AKCEA-TTR-LRx

AKCEA-TTR-LRx is a ligand conjugated antisense (LICA) drug currently in preclinical development for all forms of ATTR amyloidosis, including the hereditary and wild-type forms of the disease. AKCEA-TTR-LRx is planned to enter clinical development in 2018. LICA, a chemical technology Ionis developed, involves the attachment of a molecule called a ligand that binds with receptors on the surfaces of cells in a highly specific manner. Because these receptors are often found only on certain cell types, LICA increases effective delivery of antisense drugs with higher specificity to certain cell types that express these receptors relative to non-conjugated antisense drugs.

License Agreement

The Company will receive rights to (a) commercialize inotersen and perform other non-commercial activities with respect to inotersen, in each case, in accordance with a global strategic plan; (b) share in profits and losses incurred with respect to inotersen; (c) participate in the development, through the completion of all pivotal studies, of a follow-on drug to inotersen, AKCEA-TTR-LRx and perform other non-commercial activities with respect to AKCEA-TTR-LRx; (d) commercialize AKCEA-TTR-LRx, following receipt of regulatory approval in accordance with a global strategic plan; and (e) share in profits and losses incurred with respect to AKCEA-TTR-LRx. In addition, the Company will have the right to manufacture (including through a third party) each product following receipt of its regulatory approval. The terms of the License Agreement are described below, and these terms are qualified in their entirety by reference to the text of the License Agreement, which is attached as Annex A to this proxy statement.

License Grants. Ionis will grant to the Company (i) an exclusive, world-wide license under Ionis’ patents and know-how (other than manufacturing patents and know-how) to develop and sell inotersen and AKCEA-TTR-LRx; and (ii) a non-exclusive, world-wide license under the Ionis manufacturing patents and know-how. The Company may grant sublicenses under the rights granted to it with Ionis’ prior written consent, not to be unreasonably withheld and with certain exceptions. In addition, the parties have agreed to certain exclusivity covenants that will prevent (A) each company from clinically developing or commercializing products that use the same mechanism of action as the products and (B) the Company from clinically developing or commercializing products that are reasonably expected to decrease the market share for a product and treats or is intended to treat transthyretin amyloidosis or any other indication for which a product under that Agreement is being Developed or Commercialized, in each case ((A) or (B)), without the other party’s consent. In addition, the Company will grant to Ionis a fully-paid, royalty-free, irrevocable, worldwide, non-exclusive, sublicensable license under any collaboration technology that the Company develops under the License Agreement to research, develop, manufacture, have manufactured, and commercialize products that include an oligonucleotide as an active pharmaceutical ingredient (other than competing products during the term of the License Agreement).

Exclusivity Covenants. The Company (including its affiliates and sublicensees) agrees not to work independently or with any third party to develop or commercialize any product that is competitive to the products under the License Agreement, including any product that is intended to treat transthyretin amyloidosis or any other indication for which a product under the License Agreement is being developed or commercialized and is reasonably expected to decrease the market share for a product under the License Agreement until the expiration of all of the Ionis patents that cover the applicable product occurs in each applicable country. Additionally, Ionis (including its affiliates and sublicensees) will not practice, or grant any license to any third party to practice, any Ionis licensed technology to develop or commercialize any competing product until the expiration of all Ionis patents covering the applicable product occurs in each applicable country.

Consideration. In consideration for the licenses granted pursuant to the License Agreement, the Company agreed to pay consideration in the following forms: (i) as an upfront payment for the grant of rights to it under the License Agreement, the Company will issue 8,000,000 shares of common stock to Ionis (the “License Issuance”) and (ii) will make certain payments (the “Milestone Payments”) to Ionis in connection with the achievement of certain regulatory and sales events for inotersen and AKCEA-TTR-LRx. The Company may elect to pay each initial Milestone Payment in cash or shares of common stock (and notwithstanding this election, Ionis may require payment in shares of common stock). If the Company achieves $750 million in aggregate worldwide annual net sales of the products, all subsequent Milestone Payments must be paid in cash.

Sharing of Profits and Costs. Ionis will be responsible for all of Ionis’ inotersen costs and expenses accrued by or on behalf of Ionis prior to April 1, 2018. The Company will be responsible for all of the Company’s

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inotersen costs and expenses accrued by or on behalf of the Company on April 1, 2018 through the earlier of: (i) the last day of the calendar quarter in which inotersen is approved in the U.S.; or (ii) December 31, 2018. Following receipt of approval of inotersen in the U.S., the Company will share with Ionis profits and losses from the development and commercialization of inotersen on a 60/40 basis (60% to Ionis and 40% to the Company) through the end of the calendar quarter during which the first commercial sale of AKCEA-TTR-LRx occurs and will share such profits and losses on a 50/50 basis thereafter. With respect to the AKCEA-TTR-LRx profits and losses, Ionis will be responsible for all AKCEA-TTR-LRx costs and expenses accrued prior to January 1, 2018. The Company will then be responsible for half of the AKCEA-TTR-LRx costs and expenses accrued on and after January 1, 2018. Once AKCEA-TTR-LRx is approved, the Company will share with Ionis profits and losses from the development and commercialization of the AKCEA-TTR-LRx on a 50/50 basis.

Regulatory Activities. The Company will share responsibilities related to devising a regulatory strategy under the License Agreement, and it will jointly agree with Ionis on the global regulatory strategy for the products. Ionis will assign and transfer to the Company all regulatory approvals (including INDs and NDAs) upon receipt of regulatory approval for such product in a jurisdiction. The party that holds the IND (or NDA, as applicable) for a product will lead and have final decision making authority with respect to regulatory activities for such product. Ionis will be responsible for filing all marketing authorizations for inotersen until Ionis agrees to transfer responsibilities to the Company. The Company is responsible for filing marketing authorizations for AKCEA-TTR-LRx. After approval of a product in a country, Ionis will assign to the Company each marketing authorization and associated regulatory documentation for such product in such country. The Company will collaborate with Ionis on all important regulatory filings, responses to documents and communications received from any regulatory authorities in certain countries, as set forth in the License Agreement and the label for each product.

Governance. The License Agreement requires formation of a Joint Steering Committee (“JSC”), comprised of Company- and Ionis-appointed representatives. The JSC is tasked with, among other things, providing advice and making recommendations on the conduct of activities related to certain development, manufacturing, and commercialization activities related to inotersen and AKCEA-TTR-LRx. In the event of deadlock at the JSC, if a disagreement persists following escalation to the parties’ senior executives, Ionis will have final decision-making authority with respect to product development matters (other than the development budget), and the Company will have decision-making authority with respect to commercial matters (other than the commercialization budget).

Representations and Warranties. In the License Agreement subject to disclosures made to the Company, Ionis has made representations and warranties with respect to, among other things:

the corporate existence and power to enter into the License Agreement;
the corporate and governmental authorizations to perform the License Agreement obligations;
sufficient title and ownership right to license the Ionis patents licensed to under the License Agreement;
to its knowledge, no proceedings concerning certain Ionis patents are currently pending or threatened with an adverse effect on Ionis’ ability to grant the license or perform under the License Agreement;
all Ionis employees and contractors performing services with respect to products have assigned to Ionis all rights, title, and interest in and to any inventions developed by them and claimed in patents licensed to Akcea under the License Agreement, to Ionis as the sole owner;
to its knowledge, no additional licenses under any intellectual property owned or controlled by Ionis would be required for the Company to develop, manufacture or commercialize a product;
the Ionis technology licensed to Akcea under the License Agreement constitutes all of the patents and know-how controlled by Ionis necessary for product development under the License Agreement;
all disclosed lists of the Ionis core technology patents, product specific patents, and manufacturing patents licensed to Akcea under the License Agreement are complete and correct;
to the best of Ionis’ knowledge, no fact or circumstance known by Ionis would cause Ionis to reasonably conclude that any Ionis patent is invalid or unenforceable or that any patent licensed to Akcea under the License Agreement does not accurately list all of its inventors;

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the disclosed list of Ionis in-license agreements is complete and correct;
to the best of Ionis’ knowledge, no issued patent or published patent application will be infringed by the development, manufacture, and commercialization of inotersen and AKCEA-TTR-LRx under the License Agreement, and Ionis has not misappropriated any third-party know-how in connection with the development on inotersen and AKCEA-TTR-LRx;
all material regulatory submissions and correspondence has been disclosed to the Company;
all development of inotersen and AKCEA-TTR-LRx has complied with applicable law and no proceeding, to Ionis’ knowledge, is pending to impede product development under the License Agreement; and
all material product safety and efficacy information has been provided to the Company.

The Company has made representations and warranties with respect to, among other things:

the corporate existence and power to enter into the License Agreement; and
the corporate and governmental authorizations to perform the License Agreement obligations.

Closing Conditions. The License Agreement provides that it becomes effective on the date on which the closing of the Stock Purchase Agreement occurs.

Termination. The License Agreement may be terminated under certain circumstances, including: (i) by mutual written consent of parties; (ii) by either party if the transaction contemplated by the Stock Purchase Agreement does not close by June 30, 2018; (iii) by either party if any applicable law makes the transaction documents illegal or otherwise restrains transaction consummation; (iv) by either party, for the other’s uncured material breach under the License Agreement; (v) following effectiveness by the Company for convenience with written notice to Ionis; or (vi) by Ionis if the Company disputes the validity of any Ionis patent right licensed to the Company under that License Agreement.

The parties have initiated collaborative, pre-commercial preparations given the near-term expected regulatory approval and commercial launch of inotersen. If the transaction is not consummated, then the Company intends to unwind these preparations, which will require a transition services agreement.

In the event that the Company has the right to terminate the License Agreement because of a breach by Ionis of any representation, warranty, covenant or agreement contained in the License Agreement, Stock Purchase Agreement and the other documents and instruments to be executed and delivered in connection therewith, the Company would have the right to pursue Ionis for equitable relief including an injunction or to terminate the agreement and seek damages, with limitations as set forth in the License Agreement.

Stock Purchase Agreement

Pursuant to the Stock Purchase Agreement, at the closing of the transaction, as payment for the grant of rights to the Company under the License Agreement, the Company will pay an upfront licensing fee of $150 million, payable in shares of common stock priced by reference to a recent trading average. To support commercialization of inotersen and AKCEA-TTR-LRx, Ionis will purchase $200 million of common stock priced by reference to a recent trading average. The terms of the Stock Purchase Agreement are described below, and these terms are qualified in their entirety by reference to the text of the Stock Purchase Agreement, which is attached as Annex B to this proxy statement.

Representations and Warranties. The parties have made customary representations and warranties with respect to, among other things, existence and power, corporate authority and authorization, and non-contravention of certain laws or their respective organizational documents.

Voting Agreement. Ionis agreed to vote, or cause to be voted, all of its shares of common stock in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) and has appointed the Company and each of its executive officers or other designees as Ionis’ proxy and attorney-in-fact. This voting obligation will terminate when the transaction contemplated by the Stock Purchase Agreement closes or on the date the Stock Purchase Agreement terminates.

Covenants. Ionis has agreed not to sell the shares of common stock that it will receive in connection with the transaction, other than as permitted in the Amended and Restated Investor Rights Agreement with the

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Company, which generally requires Ionis to sell such shares pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration. Ionis has also agreed that prior to the closing of the transaction, among other things, to only take actions in the ordinary course of business with respect to the development and commercialization of inotersen and AKCEA-TTR-LRx, and to use reasonable best efforts to preserve intact the rights granted to the Company pursuant to the License Agreement. In addition, Ionis has agreed to permit the Company reasonable access to relevant books, records and financial information, and to furnish information to be included in this proxy statement. The Company has agreed, among other things, to hold the special meeting for the purpose of obtaining stockholder approval of the proposals contained within this proxy statement, and to effect a listing of the shares issued to Ionis pursuant to the Initial Issuance on Nasdaq. The parties have both agreed to use respective reasonable best efforts to cause the closing conditions set forth in the Stock Purchase Agreement to be satisfied, to mutually agree upon all press releases or public disclosures related to the Stock Purchase Agreement, and to only disclose confidential information belonging to the other party in specified instances. In the event there is a shortfall of authorized common stock for the purpose of making any of the Milestone Payments in shares of common stock pursuant to the Payment Election, the Company has agreed that it will use its reasonable best efforts to amend its Amended and Restated Certificate of Incorporation to increase the number of shares of common stock authorized. Ionis has also agreed that it will vote in favor of any such amendments to the Amended and Restated Certificate of Incorporation to increase the number of shares of common stock authorized.

Closing Conditions. The respective obligations of each party to consummate the Stock Purchase Agreement are subject to customary closing conditions including (i) the representations and warranties are true and correct in all material respects as of the date of the closing, (ii) the covenants and agreements are complied with, (iii) no governmental entity shall have promulgated any applicable law that makes the transaction illegal, (iv) the Company’s receipt of funds, (v) the issuance of shares to Ionis and (vi) the filing with Nasdaq of a notification form for the listing of the shares issued to Ionis, and completion of Nasdaq’s review of such notification form.

Closing Conditions – Stockholder Approval. The respective obligations of each party to consummate the Stock Purchase Agreement are subject to (i) a non-waivable condition requiring the approval of the Stock Purchase Agreement, the License Agreement the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder by a receipt of the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers; (ii) the approval of the issuance of the shares of common stock to Ionis pursuant to the License Agreement and Stock Purchase Agreement by a majority of the total votes of the issued and outstanding common stock cast on the proposal, which is conditioned upon the approval of proposal no. 1; (iii) the approval of the proposal to amend the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares by a majority of all issued and outstanding shares of common stock, which is conditioned upon the approval of proposal no. 1; and (iv) the approval of the adjournment of the special meeting, if necessary or appropriate, to permit solicitation of additional proxies in favor of the above proposals. The disinterested stockholder approval is not waivable by either party.

Termination Rights. The Stock Purchase Agreement may be terminated under certain circumstances: (i) if the required stockholder approval is not obtained for the proposals set forth in this proxy statement, including in the case of proposal no. 1 (disinterested stockholder approval); (ii) by mutual written consent; (iii) if the closing of the Stock Purchase Agreement has not been consummated on or before June 30, 2018; (iv) due to material breaches of the other party’s representations, warranties or obligations; (v) if any governmental entity has enacted, issued, promulgated, enforced or entered any law making the transaction contemplated by the License Agreement or the Stock Purchase Agreement illegal or otherwise restrain the consummation of such transaction; or (vi) if the Special Committee or the board changes its recommendation regarding the transaction.

Status of Shares Issued in the Transaction. The shares will be issued to Ionis in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act for the issuance of shares not involving a public offering and Rule 506 of Regulation D promulgated thereunder. Accordingly, Securities and Exchange Commission rules provide that the shares may not be resold in the public market for at least six months after the transaction. Thereafter, any sales of those shares in the public market by a stockholder who is a controlling stockholder of the Company, including Ionis, will be subject to public availability of certain financial and other

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information about the Company, and the volume and manner of sale limitations pursuant to Rule 144. Ionis may, however, require the Company to register such shares of common stock pursuant to the Amended and Restated Investor Rights Agreement. Even if such shares of common stock are not registered, Ionis may be able to sell such shares of common stock pursuant to an exemption.

Voting Agreement

The Company has entered into a stockholder voting agreement with Novartis whereby Novartis agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock, representing approximately 9.4% of the shares issued and outstanding and approximately 29.5% of the shares issued and outstanding other than the Interested Stockholders. This agreement will terminate when the transaction contemplated by the Stock Purchase Agreement closes or on the date the Stock Purchase Agreement terminates in accordance with its terms.

Amended and Restated Services Agreement

In connection with the proposed transaction, the Company has also amended and restated its Services Agreement, originally entered into with Ionis on December 18, 2015. Under the Amended and Restated Services Agreement, Ionis will provide the Company with certain office and facility services and appropriate personnel to support the Company’s office and facility infrastructure. Ionis will also provide services related to the development, regulatory and manufacturing in support of inotersen and AKCEA-TTR-LRx. This summary of the Amended and Restated Services Agreement is qualified in its entirety by reference to the text of the Amended and Restated Services Agreement, which is attached as Annex C to this proxy statement.

Amended and Restated Investor Rights Agreement

Given the proposed increase to Ionis’ equity ownership of the Company in connection with the proposed transaction and its increased reliance on the Company as a commercialization partner, now that the Company could be commercializing at least two products that Ionis had developed (volanesorsen and inotersen), the Company has amended and restated its Investor Rights Agreement, entered into with Ionis on December 18, 2015. The Amended and Restated Investor Rights Agreement added or amended certain terms, including the following: (1) for so long as greater than 50% of the Company’s revenue is derived from products licensed from Ionis, and subject to the execution of confidentiality agreements, Ionis may appoint one non-voting observer to the Company’s audit and compensation committees; (2) Ionis’ approval will continue to be required for the Company to in-license any product, acquire any product or acquire any company until the time Ionis ceases to hold at least 50% of the Company’s outstanding capital stock; (3) subject to certain exceptions, equity issuances by the company, including the issuance of common stock, will be subject to a right of first refusal by Ionis until the time Ionis ceases to hold at least 50% of the Company’s outstanding capital stock; and (4) the Amended and Restated Investor Rights Agreement will terminate if either party is subject to a bankruptcy event or when Ionis ceases to own at least 20% of the outstanding shares of the Company’s outstanding capital stock. This summary of the Amended and Restated Investor Rights Agreement is qualified in its entirety by reference to the text of the Amended and Restated Investor Rights Agreement, which is attached as Annex D to this proxy statement.

Stockholder Approval Pursuant to Nasdaq Listing Rule 5635

The Company’s common stock is listed on the Nasdaq Global Select Market, and it is subject to the Nasdaq listing standards. The Company is required to obtain stockholder approval in connection with the issuance of the Initial Issuance and any Milestone Payments paid in shares of its common stock under Nasdaq Rule 5635(a), which requires stockholder approval of the acquisition assets of another company involving an issuance of common stock equal to 20% or more of the common stock outstanding before the issuance, or where any substantial stockholder has a 5% or greater interest in the consideration to be paid in the transaction and the potential issuance could result in an increase in outstanding shares of 5% or more.

Certificate Amendment

The Company currently has a sufficient number of authorized shares of common stock to satisfy its obligations pursuant to the Stock Purchase Agreement with respect to the Initial Issuance. However, it will not have a sufficient number of shares of common stock to satisfy all of its obligations with respect to the Milestone Payments, if it achieves the Milestone Events payable in shares of common stock and makes such Milestone

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Payments in shares of common stock. To reduce this shortfall, at the special meeting, holders of shares of the common stock will be asked to consider and vote on a proposal to amend the Amended and Restated Certificate of Incorporation to increase the authorized number of shares of common stock from 100,000,000 shares to 125,000,000 shares (the “Certificate Amendment”), which is conditioned upon the approval of proposal no. 1.

The Company expects to issue 18,666,666 additional shares of common stock to satisfy its obligations pursuant to the Stock Purchase Agreement with respect to the Initial Issuance. If the Company achieves the Milestone Events payable in shares of common stock and makes such Milestone Payments in shares of common stock, pursuant to the Payment Election, it would be required to issue additional shares of common stock to Ionis with an aggregate value of $380 million. Assuming a price per share of $18.75, such price being the price per share for the Initial Issuance, the Company would be required to issue 20,266,665 shares of common stock to satisfy the Milestone Payments eligible to be paid in shares of its common stock. Together with the shares to be issued in the Initial Issuance and assuming a price per share of $18.75, it may be required to issue up to 38,933,331 shares of common stock pursuant to the Initial Issuance and the Milestone Payments, which amount exceeds the number of shares of common stock currently available for issuance under the Amended and Restated Certificate of Incorporation. Further, if the stock price were to decrease, it could be required to issue substantially more than 20,266,665 shares of common stock to Ionis to satisfy its obligations to make such Milestone Payments.

Assuming approval of proposal no. 3 (the certificate amendment), the Company would have 39,695,260 additional authorized shares available for issuance after giving effect to the Initial Issuance. Such additional authorized shares could be issued from time to time at the discretion of the board, including to make Milestone Payments in shares of common stock, without further stockholder action, except as may be required for a particular transaction by law or the Nasdaq listing standards. The shares would be issuable for any proper corporate purpose. The board believes that these additional shares will provide the Company with needed flexibility to issue shares in the future in a timely manner and under circumstances considered favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance.

Other than as described above in connection with the Initial Issuance and any potential Milestone Payment paid in shares of common stock pursuant to the Payment Election, the Company does not have any present plan, understanding, arrangement, commitment or agreement regarding the issuance of any of the shares of common stock included in the proposed increase. However, issuances of the authorized shares of common stock in the future, including the Initial Issuance and any potential issuance of shares of common stock with respect to any Milestone Payment, will dilute the Company’s stockholders’ percentage ownership in the Company and may dilute the value of current stockholders’ shares. The proposed Certificate Amendment does not change the terms of the common stock.

Potential Effects of the Transaction on Stockholders

If the License Agreement and Stockholder Agreement and the transaction contemplated thereunder are approved by the Company’s stockholders, it could have the following effects on the stockholders:

Ionis’ percentage ownership of the Company will increase as a result of the Initial Issuance;
Ionis will be eligible to receive Milestone Payments paid in connection with the achievement of Milestone Events, which is an interest not shared by the stockholders generally; or
Ionis’ percentage ownership of the Company will increase if the initial Milestone Events are achieved and if those Milestone Payments are made in shares of common stock pursuant to the Payment Election.

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The table below shows the beneficial ownership of Ionis of the Company’s common stock as of March 1, 2018 and the pro forma ownership of Ionis of the Company’s common stock assuming all Milestone Payments eligible to be made in shares of common stock are made in shares of common stock at a price of $18.75 per share, the same as the price in the Initial Issuance, and assuming no other issuances of common stock to any stockholders for any purpose have occurred.

Description
Shares
Held by
Ionis
Approximate
Percentage Held
by Ionis
Actual Ownership as of March 1, 2018
 
45,447,879
 
 
68.2
%
Pro forma Ownership Following:
 
 
 
 
 
 
Initial Issuance
 
64,114,545
 
 
75.2
%
Regulatory Milestones: Inotersen
 
69,981,211
 
 
76.8
%
Regulatory Milestones: AKCEA-TTR- LRx
 
77,714,544
 
 
78.6
%
Sales Milestones(1)
 
84,381,210
 
 
79.9
%
(1) Only includes Milestone Events for $400 million in aggregate worldwide net sales of inotersen and AKCEA-TTR-LRx in a calendar year and $750 million in aggregate worldwide annual net sales of inotersen and AKCEA-TTR-LRx in a calendar year, which are the only two sales Milestone Events for which Milestone Payments may be paid in shares of common stock pursuant to the terms of the License Agreement. All subsequent sales Milestone Events must be paid in cash.

The issuance of shares of common stock for the Initial Issuance or pursuant to the payment of Milestone Payments will increase the number of shares of outstanding common stock. The shares issued to Ionis, in each case, are in reliance on an exemption from registration and will not be registered under the Securities Act. Ionis may, however, require the Company to register such shares of common stock pursuant to the Amended and Restated Investor Rights Agreement. Even if such shares of common stock are not registered, Ionis may be able to sell such shares of common stock pursuant to an exemption.

No Appraisal Rights in Connection with the Transaction

Appraisal rights are not available to the stockholders in connection with the transaction contemplated by the License Agreement or the Stock Purchase Agreement or any of the proposals to be considered at the special meeting of stockholders described in this proxy statement.

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THE SPECIAL MEETING

Date, Time and Place

The special meeting of the stockholders of the Company will be held at Akcea Therapeutics, Inc., 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142 on April 16, 2018, at 10:00 AM Eastern Time.

Purpose of the Special Meeting

The special meeting is being held for the following purposes:

to approve proposal no. 1, approval of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder;
to approve proposal no. 2, approval of the issuance of shares of common stock to Ionis pursuant to the License Agreement and Stock Purchase Agreement, as required by Nasdaq Rule 5635, which is conditioned upon the approval of proposal no. 1;
to approve proposal no. 3, amendment to the amended and restated certificate of incorporation, which is conditioned upon the approval of proposal no. 1; and
to approve proposal no. 4, adjournment of the special meeting.

The License Agreement contains a non-waivable condition, with respect to proposal no. 1 (the disinterested stockholder approval), requiring the approval of the Stock Purchase Agreement, the License Agreement and the transaction contemplated thereunder by a receipt of the affirmative vote of holders representing a majority of the issued and outstanding shares of common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers. If proposal no. 1 is not approved by the requisite vote of stockholders, the Stock Purchase Agreement and License Agreement will be terminated and the transaction contemplated thereby cannot be completed. Pursuant to the Stock Purchase Agreement, Ionis has agreed to vote, or cause to be voted, all of its shares of common stock in favor of proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment). Pursuant to a stockholder voting agreement, Novartis agreed to vote, or cause to be voted, in favor of each proposal, its shares of common stock. Accordingly, proposal no. 2 (share issuance), proposal no. 3 (certificate amendment) and proposal no. 4 (adjournment) will not require the affirmative vote of any stockholder other than Ionis and Novartis. A copy of each of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement is attached to this proxy statement as Annex A, Annex B, Annex C and Annex D, respectively.

Recommendations of the Special Committee and the Board

After evaluating the transaction contemplated by the License Agreement and Stock Purchase Agreement, the Special Committee determined that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interests of the Company, and recommended the transaction to the board. Based upon the recommendation of the Special Committee, the board (i) approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder; (ii) declared that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interest of the Company; (iii) declared that the issuance of the shares pursuant to the proposed transaction is advisable and in the best interest of the Company; (iv) approved the amendment to Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares and declared such amendment advisable and in the best interest of the Company; and (v) determined to submit the matters to the stockholders of the Company with a recommendation that the stockholders vote “FOR” each of the proposals set forth in this proxy statement. See “Special Factors — Background of the Proposed Transaction” and “Special Factors — Reasons for the Proposed Transaction; Recommendations of the Special Committee and the Board.

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Voting Rights; Quorum

Stockholders of record at the close of business on March 21, 2018, the record date for the determination of stockholders entitled to notice of and to vote at the special meeting, are entitled to notice of, and to vote at, the special meeting. On the record date, there were approximately 99 holders of record of common stock and 66,720,111 shares of common stock outstanding. Each share of common stock entitles the holder to cast one vote at the special meeting. There are no other voting securities.

No matter may be considered at the special meeting unless a quorum is present. Stockholders who hold a majority of the shares of common stock outstanding as of the close of business on the record date for the special meeting must be present either in person or by proxy in order to constitute a quorum to conduct business at the special meeting. Shares of common stock represented by proxies reflecting abstentions (if any) will be counted as present and entitled to vote for purposes of determining a quorum. However, shares represented by proxies reflecting properly executed broker non-votes (if any) will not be considered present at the special meeting for purposes of determining the existence of a quorum. A broker non-vote occurs when a bank, broker or other intermediary does not vote on a particular matter because such bank, broker or other intermediary does not have the authority to vote under the rules of the Nasdaq. Banks, brokers or other intermediaries of record have the authority under the rules of the Nasdaq to vote stock for which their customers do not provide voting instructions on certain routine matters. The Company believes that each of the proposals presented in this proxy statement is a non-routine matter. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your bank, broker or other intermediary of record, your shares will not be voted with respect to any of the proposals presented in this proxy statement. A quorum will be present at the special meeting because Ionis and Novartis have each agreed to vote in favor of each of the proposals.

Voting and Revocation of Proxies

If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Company, LLC, you are the stockholder of record of those shares and these proxy materials have been mailed to you by the Company. You may vote your shares by internet, by telephone or by mail as further described below. Your vote authorizes each of Paula Soteropoulos, Michael MacLean and Jeffrey Goldberg, as your proxies, each with the power to appoint his or her substitute, to represent and vote your shares as you direct. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “AGAINST” proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment), but will have no effect on the outcome of proposal no. 2 (share issuance) or proposal no. 4 (adjournment).

Vote by Internet — www.proxyvote.com

Vote by Telephone — 1-800-690-6903

Use the internet or the telephone to transmit your voting instructions 24 hours a day, seven days a week up until 11:59PM Eastern Time on April 15, 2018.

Please have your proxy card available and follow the instructions to obtain your records and create an electronic ballot.

Vote by Mail — Complete, date and sign your proxy card and return it in the postage-paid envelope provided to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

Only the latest dated proxy received from you, whether by internet, telephone or mail, will be voted at the special meeting. You may also vote in person at the special meeting.

If your shares are held in a stock brokerage account, by a bank, broker or other intermediary, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your bank, broker or other intermediary that is considered the holder of record of those shares. As the beneficial owner, you have the right to direct your bank, broker or other intermediary on how to vote your shares via the internet or by telephone if the bank, broker or other intermediary offers these options or by signing and returning a proxy card. Your bank, broker or other intermediary will send you instructions for voting your shares.

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Your proxy is revocable. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the special meeting by:

submitting a new proxy with a later date, by using the telephone or Internet proxy submission procedures described above, or by completing, signing, dating and returning a new proxy card by mail to the Company;
attending the special meeting and voting in person; or
if your shares are held in “street name” by a bank, broker or other intermediary and you have instructed such bank, broker or other intermediary to vote your shares, by following the directions received from your bank, broker or other intermediary in order to change those voting instructions.

Attending the special meeting in person will not itself revoke a proxy. You must take one of the actions specified above prior to the vote at the special meeting to validly revoke a proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company, you should ensure that you send your new proxy card in sufficient time for it to be received by the Company before the day of the special meeting.

Abstentions and Broker Non-Votes

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of common stock represented at the special meeting for purposes of determining whether a quorum has been achieved. Assuming a quorum is present at the special meeting, abstaining from voting will have the same effect as a vote against proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment), but will not affect the outcome of proposal no. 2 (share issuance) or proposal no. 4 (adjournment).

Broker non-votes occur when shares held in “street name” by banks, brokers and other intermediaries are present or represented by proxy at the special meeting, but with respect to which the bank, broker, or other intermediary is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such bank, broker or other intermediary does not have authority to vote under the rules of the Nasdaq. Banks, brokers or other intermediaries of record have the authority under the rules of the Nasdaq to vote stock for which their customers do not provide voting instructions on certain routine matters. The Company believes that each of the proposals presented in this proxy statement is a non-routine matter. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your bank, broker or other intermediary of record, your shares will not be voted with respect to any of the proposals presented in this proxy statement. Without your voting instructions on these matters, a broker non-vote will occur with respect to your shares. A broker non-vote will have the same effect as a vote against proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment), but will not have an effect on proposal no. 2 (share issuance) or proposal no. 4 (adjournment). In addition, such shares will not be considered present at the special meeting for purposes of determining the existence of a quorum.

Failure to Vote

If no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will have the same effect as a vote “AGAINST” proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment) but will have no effect on the outcome of proposal no. 2 (share issuance) and proposal no. 4 (adjournment).

If you fail to return your proxy card, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting (unless you are a record holder as of the record date and attend the special meeting in person) and will have the same effect as a vote “AGAINST” proposal no. 1 (disinterested stockholder approval) and proposal no. 3 (certificate amendment). Failure to return your proxy card will not affect the outcome of proposal no. 2 (share issuance) and proposal no. 4 (adjournment), assuming a quorum is present.

Other Matters at the Special Meeting

Under the bylaws and Delaware law, the business to be conducted at the special meeting will be limited to the purposes stated in the notice to stockholders provided with this proxy statement.

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Adjournments and Postponements

The special meeting may be adjourned for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time with the approval of the affirmative vote of the holders of a majority of the outstanding shares of common stock, present in person or represented by proxy and entitled to vote at the special meeting. Under Delaware law and the bylaws, the Company is not required to notify stockholders of any adjournments of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. Unless a new record date is fixed, your proxy will still be valid and may be voted at the adjourned meeting. You will still be able to change or revoke your proxy until it is voted.

Proxy Solicitation

The Company will pay all expenses incurred in connection with the solicitation of proxies for the special meeting. Mackenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016, has been retained to assist in the solicitation of proxies by mail, telephone, and electronic communication and will be compensated in the estimated amount of $12,500 plus reasonable out-of-pocket expenses. Solicitation of proxies by mail may be supplemented by telephone, email and other electronic means, advertisements and personal solicitation by the Company’s directors, officers and employees. No additional compensation will be paid to the Company’s directors, officers or employees for such solicitation efforts.

Additional Assistance

If you have any questions or need assistance in voting your shares, please contact MacKenzie Partners, Inc., the firm assisting the Company in the solicitation of proxies, at:


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PROPOSAL NO. 1

APPROVAL OF THE LICENSE AGREEMENT, THE STOCK PURCHASE AGREEMENT, THE AMENDED AND RESTATED SERVICES AGREEMENT AND THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT AND THE TRANSACTION CONTEMPLATED THEREUNDER

The stockholders of the Company other than the Interested Stockholders are being asked to approve the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder. For a detailed discussion of the terms and conditions of the foregoing agreement, including the transaction contemplated thereunder, see the section entitled “The Transaction.” A copy of each of the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement is attached to this proxy statement as Annex A, Annex B, Annex C and Annex D, respectively.

As discussed in the section entitled “Special Factors — Reasons for the Proposed Transaction; Recommendations of the Special Committee and the Board”, after evaluating the transaction, the Special Committee determined that the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder are advisable and in the best interests of the Company and recommended the transaction to the board. Based upon the recommendation of the Special Committee, the board approved the License Agreement, the Stock Purchase Agreement, the Amended and Restated Services Agreement and the Amended and Restated Investor Rights Agreement and the transaction contemplated thereunder, declared the each of the foregoing advisable and in the best interests of the Company and determined to submit this proposal to the stockholders of the Company other than the Interested Stockholders. As discussed in the section entitled “Special Factors – Interests of Ionis and Certain of the Company’s Directors”, Ionis and certain directors, because of their relationship with Ionis, may have interests different from, or in addition to, the interest of the stockholders generally. The board recommends that you vote “FOR” this proposal.

Vote Required and Board Recommendation

The Stock Purchase Agreement contains a non-waivable condition to closing requiring the approval of the Stock Purchase Agreement, the License Agreement and transaction contemplated thereunder by a receipt of the affirmative vote of holders of a majority of the issued and outstanding shares of common stock other than the Interested Stockholders, which shall exclude a vote of any of the Company’s directors and officers. The License Agreement will not become effective unless the Stock Purchase Agreement is approved. If proposal no. 1 is not approved by the requisite vote of the stockholders of the Company other than the Interested Stockholders, the Stock Purchase Agreement and License Agreement will be terminated and the transaction contemplated thereby cannot be completed. Novartis, a holder of approximately 9.4% of outstanding common stock and approximately 29.5% of the shares issued and outstanding, other than the Interested Stockholders, has agreed to vote, or caused to be voted, all of its shares in favor of this proposal pursuant to the stockholder voting agreement. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” this proposal.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL NO. 1.

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PROPOSAL NO. 2

APPROVAL OF THE ISSUANCE OF SHARES OF COMMON STOCK TO IONIS PURSUANT TO THE LICENSE AGREEMENT AND STOCK PURCHASE AGREEMENT AS REQUIRED BY AND IN ACCORDANCE WITH NASDAQ LISTING RULE 5635

The stockholders of the Company are being asked to approve an issuance of shares of common stock to Ionis, pursuant to the License Agreement and Stock Purchase Agreement, to satisfy the Initial Issuance and any Milestone Payments upon achievement of the Milestone Events paid in shares of common stock according to the Payment Election as required by and in accordance with Nasdaq Listing Rule 5635. For a detailed discussion of the issuance of shares, see the section entitled “The Transaction – The License Agreement”, “The Transaction – The Stock Purchase Agreement”, The Transaction – Stockholder Approval Pursuant to Nasdaq Listing Rule 5635”.

As discussed in the section entitled “Special Factors — Reasons for the Proposed Transaction; Recommendation of the Special Committee and the Board”, the Special Committee determined that the share issuance is advisable and in the best interests of the Company and recommended the share issuance to the board. Based upon the recommendation of the Special Committee, the board declared the share issuance advisable and in the best interests of the Company and determined to submit this proposal to the stockholders of the Company. As discussed in the section entitled “Special Factors – Interests of Ionis and Certain of the Company’s Directors”, Ionis and certain directors, because of their relationship with Ionis, may have interests that are different from, or in addition to, the interests of the stockholders generally. The board recommends that you vote “FOR” this proposal.

Vote Required and Board Recommendation

Approval of the issuance of shares of common stock pursuant to the License Agreement and the Stock Purchase Agreement as required by and in accordance with Nasdaq Listing Rule 5635 requires a majority of the votes cast at the special meeting and is conditioned upon the approval of proposal no. 1. Abstentions and broker non-votes will have no effect on the outcome of this proposal.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL NO. 2.

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PROPOSAL NO. 3

AMENDMENT TO THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

The stockholders of the Company are being asked to approve a proposal to amend Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares. For a detailed discussion, see the section entitled “The Transaction - Certificate Amendment.”

As discussed in the section entitled “Special Factors — Reasons for the Proposed Transaction; Recommendation of the Special Committee and the Board”, the Special Committee determined that the amendment is advisable and in the best interest of the Company and recommended the amendment to the board. Based upon the recommendation of the Special Committee, the board approved that the amendment to Article IV of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 shares to 125,000,000 shares and declared such amendment advisable and in the best interests of the Company and has determined to submit this proposal to the stockholders of the Company. As discussed in the section entitled “Special Factors – Interests of Ionis and Company’s Directors”, Ionis and certain directors, because of their relationship with Ionis, may have interests that are different from, or in addition to, the interests of the stockholders generally. The board recommends that you vote “FOR” this proposal.

Vote Required and Board Recommendation

Approval of this amendment to the certificate of incorporation requires the affirmative vote of a majority of all issued and outstanding shares of common stock and is conditioned upon the approval of proposal no. 1. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” this proposal.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL NO. 3.

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PROPOSAL NO. 4

ADJOURNMENT OF THE SPECIAL MEETING

In the event that the number of shares of common stock voting in favor of the other proposals is insufficient to approve such proposals, the Company may adjourn the special meeting, and any adjourned session of the special meeting, if necessary or appropriate, to permit the solicitation of additional proxies in favor of the proposals.

Vote Required and Board Recommendation

Approval of the proposal to approve one or more adjournments of the special meeting requires the vote of a majority of the shares present in person or represented by proxy at the special meeting. Abstentions and broker non-votes will have no effect on the outcome of this proposal.

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THIS PROPOSAL NO. 4.

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PRINCIPAL STOCKHOLDERS

The following table sets forth the beneficial ownership of common stock as of March 1, 2018 for:

each person, or group of affiliated persons, who is known by the Company to beneficially own more than 5% of the common stock;
each of the Company’s named executive officers;
each of the Company’s directors; and
all of the Company’s executive officers and directors in a group.

The Company has determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules take into account shares of common stock issuable pursuant to the exercise of stock options that are either immediately exercisable or exercisable within 60 days of March 1, 2018. These shares are deemed to be outstanding and beneficially owned by the person holding those shares for the purpose of computing the percentage ownership of that person, but not for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

Except as otherwise noted below, the address for persons listed in the table is c/o Akcea Therapeutics, Inc., 55 Cambridge Parkway, Cambridge, Massachusetts 02142.

Name and address of Beneficial Owner
Number of Shares
Beneficially
Owned
Percentage of
Shares Beneficially
Owned
5% or greater stockholders:
 
 
 
 
 
 
Ionis Pharmaceuticals, Inc.(1)
 
45,447,879
 
 
68.2
%
Novartis Pharma AG(2)
 
6,250,000
 
 
9.4
%
FMR LLC(3)
 
9,981,244
 
 
15.0
%
Directors and named executive officers
 
 
 
 
 
 
Stanley T. Crooke, M.D., Ph.D.
 
0
 
 
0
%
B. Lynne Parshall
 
0
 
 
0
%
Edward Fitzgerald
 
0
 
 
0
%
Christopher Gabrieli
 
13,210
 
 
 
*
Elaine Hochberg
 
13,210
 
 
 
*
Sandford D. Smith
 
13,210
 
 
 
*
Paula Soteropoulos(4)
 
1,612,483
 
 
2.4
%
Jeffrey M. Goldberg(4)
 
355,221
 
 
 
*
Michael F. MacLean
 
0
 
 
0
%
Louis St. L. O’Dea MB Bch BAO. FRCP(C)(4)
 
428,494
 
 
 
*
All executive officers and directors as a group (10 persons)(4)
 
2,435,828
 
 
3.7
%
* Represents beneficial ownership of less than 1%.
(1) The address of Ionis is 2855 Gazelle Court Carlsbad, California 92010.
(2) The address of Novartis is Lichtstrasse 35, 4002, Basel, Switzerland.
(3) The address of FMR LLC is 245 Summer Street, Boston, Massachusetts, 02110. Abigail P. Johnson is a Director, the Vice Chairman, the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds' Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds' Boards of Trustees.
(4) Represents shares of common stock issuable upon the exercise of options.

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INFORMATION ABOUT THE PARTIES

Akcea Therapeutics, Inc.

Akcea Therapeutics, Inc.
55 Cambridge Parkway, Suite 100
Cambridge, MA 02142
Telephone: (617) 207-0202

Akcea is a late-stage biopharmaceutical company focused developing and commercializing drugs to treat patients with serious cardiometabolic diseases caused by lipid disorders. Its goal is to become the premier company offering treatments for these inadequately treated diseases. Akcea is advancing a mature pipeline of novel drugs with the potential to treat multiple diseases. Its drugs volanesorsen, AKCEA-APO(a)-LRx, AKCEA-ANGPTL3-LRx and AKCEA-APOCIII-LRx are all based on antisense technology developed by Ionis Pharmaceuticals, Inc. Akcea’s most advanced drug, volanesorsen, is currently under review by regulatory agencies in the United States, European Union and Canada for the treatment of people with familial chylomicronemia syndrome, or FCS. In the United States, the FDA assigned a Prescription Drug User Fee Act (“PDUFA”) goal date of August 30, 2018 and scheduled an advisory committee meeting for May 10, 2018. In Canada, its New Drug Submission was granted Priority Review by Health Canada. Akcea is preparing for approval and launch of volanesorsen in mid-2018. Volanesorsen is also in Phase 3 clinical development for the treatment of familial partial lipodystrophy, or FPL. FCS and FPL are both severe, rare, genetically defined lipid disorders characterized by extremely elevated levels of triglycerides. Both diseases have life-threatening consequences and the lives of patients with these diseases are impacted daily by the associated symptoms. Akcea’s other three drugs are currently in Phase 2 clinical development. Akcea is a Delaware corporation, and its shares are traded on the Nasdaq Global Select Market under the symbol “AKCA.” As of the date of this proxy statement, approximately 68.2% of its equity is owned by Ionis.

Ionis Pharmaceuticals, Inc.

Ionis Pharmaceuticals, Inc.
2855 Gazelle Court
Carlsbad, CA 92010
Telephone: (760) 931-9200

Ionis is the leading company in RNA-targeted drug discovery and development focused on developing drugs for patients who have the highest unmet medical needs, such as those patients with severe and rare diseases. Using its proprietary antisense technology, Ionis has created a large pipeline of first-in-class or best-in-class drugs, with over three dozen drugs in development. SPINRAZA® (nusinersen) has been approved in global markets for the treatment of spinal muscular atrophy (SMA). Biogen is responsible for commercializing SPINRAZA. Drugs that have successfully completed Phase 3 studies include inotersen, an antisense drug used to treat patients with hereditary transthyretin amyloidosis (hATTR), and volanesorsen, an antisense drug discovered by Ionis and co-developed by Ionis and Akcea Therapeutics to treat patients with either familial chylomicronemia syndrome or familial partial lipodystrophy.

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DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS

Only one copy of the proxy statement for the special meeting will be delivered to an address where two or more stockholders reside unless the Company has received contrary instructions from a stockholder at the address. A separate proxy card will be delivered to each stockholder at the shared address.

If you are a stockholder who lives at a shared address and you would like additional copies of this proxy statement, or any future proxy statements, please contact the Company by calling or writing the Company’s Corporate Secretary at the address or telephone number below and the Company will promptly mail you copies:

Investor Relations
Akcea Therapeutics, Inc.
55 Cambridge Parkway, Suite 100
Cambridge, MA 02142
(617) 207-0202

STOCKHOLDER PROPOSALS

The Company does intend to hold an annual meeting for stockholders in 2018. The stockholders holding a majority of the outstanding shares of common stock intend to execute a written consent in lieu of the annual meeting for 2018.

To be presented at the 2019 annual meeting or to be eligible for inclusion in the proxy materials related thereto, if the Company holds a 2019 annual meeting, stockholder proposals submitted pursuant to Rule 14a-8 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) must be received by the Company no later than the close of business 120 calendar days prior to the first anniversary of the date the Company’s information statement is released to stockholders in connection with the 2018 annual meeting. Such proposals can be mailed to the Company’s Corporate Secretary at Akcea Therapeutics, Inc., 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142.

The bylaws prescribe the procedures that a record stockholder must follow to nominate directors for election at an annual meeting or to bring other business before an annual meeting (other than matters submitted pursuant to Rule 14a-8 under the Exchange Act). The following summary of these procedures is qualified by reference to the bylaws, a copy of which can be obtained, without charge, upon written request to Akcea Therapeutics, Inc. at 55 Cambridge Parkway, Suite 100, Cambridge, MA 02142.

Pursuant to Article III, Section 5(b) of the Company’s bylaws, a record stockholder must provide timely notice of any stockholder proposal (including nominations or other business to be properly brought before an annual meeting) other than those submitted pursuant to Rule 14a-8 of the Exchange Act to be properly brought before an annual meeting. To be timely for consideration at the 2019 annual meeting, if the Company holds a 2019 annual meeting, such notice must be delivered no later than the close of business 120 days prior to the first anniversary of the date the Company’s information statement in connection with the written consent in lieu of the 2018 annual meeting is released to stockholders. The notice must contain the information specified in the Company’s bylaws regarding the stockholder giving the notice and the business proposed to be brought before the meeting. For director nominations, the notice must also contain the information specified in the bylaws regarding each person whom the stockholder wishes to nominate for election as director and be accompanied by the written consent of each proposed nominee to serve as director if elected. Such stockholder proposals must also be in compliance with the additional requirements set forth in the bylaws.

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WHERE YOU CAN FIND MORE INFORMATION

The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. These SEC filings are available to the public over the Internet at the SEC’s website at www.sec.gov and the Company’s website at www.akceatx.com. References to these websites do not constitute incorporation by reference of the information contained therein and should not be considered part of this proxy statement. You may also read and copy any document the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for further information on the public reference room.

As permitted by Item 13(b) of Schedule 14A of Regulation 14A under the Exchange Act, the Company is “incorporating by reference” into this proxy statement specific documents that it filed with the SEC, which means that it may disclose important information to you by referring you to those documents that are considered part of this proxy statement.

The Company incorporates by reference into this proxy statement its Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2017. It will provide a copy of such document to each person to whom a proxy statement is delivered.

This proxy statement or information incorporated by reference herein contains summaries of certain agreements that the Company has filed as exhibits to various SEC filings, as well as certain agreements that the Company will enter into in connection with the transaction discussed in this proxy statement. The descriptions of these agreements contained in this proxy statement or information incorporated by reference herein do not purport to be complete and are subject to, or qualified in their entirety by reference to, the definitive agreements.

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ANNEX A

LICENSE AGREEMENT

DEVELOPMENT, COMMERCIALIZATION, COLLABORATION, AND LICENSE AGREEMENT
   
between
   
IONIS PHARMACEUTICALS, INC.
   
and
   
AKCEA THERAPEUTICS, INC.
   
Dated March 14, 2018

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DEVELOPMENT, COMMERCIALIZATION, COLLABORATION, AND LICENSE AGREEMENT

THIS DEVELOPMENT, COMMERCIALIZATION, COLLABORATION, AND LICENSE AGREEMENT is made and entered into as of March 14, 2018 (the “Execution Date”), by and between Akcea Therapeutics, Inc., a Delaware corporation (“Akcea”), and Ionis Pharmaceuticals, Inc., a Delaware corporation (“Ionis”). Akcea and Ionis each may be referred to herein individually as a “Party,” or collectively as the “Parties.

RECITALS

WHEREAS, Ionis has rights to, and has filed an NDA and MAA to support commercial launch of, inotersen for hereditary transthyretin amyloidosis (“hATTR”);

WHEREAS, Ionis seeks a partner that has expertise in Commercializing human therapeutics and, in particular, experience treating patients with rare diseases to globally Commercialize inotersen;

WHEREAS, Ionis formed Akcea as a subsidiary to serve as the Commercialization entity for Ionis’ portfolio of lipid drugs, and Akcea is focusing its efforts primarily on Commercializing on its own the rare disease assets in this portfolio, including volanesorsen;

WHEREAS, Akcea is building an organization with resources and expertise to globally Commercialize volanesorsen, and Akcea and Ionis desire to leverage Akcea’s commercial resources to globally Commercialize inotersen;

WHEREAS, Akcea and Ionis desire to enter into a strategic TTR collaboration under which Akcea will Commercialize inotersen in accordance with a global strategic plan;

WHEREAS, in addition to Commercializing inotersen, the Parties will conduct a Development program to Develop a follow-on drug to inotersen, IONIS-TTR-LRx, to expand and extend Ionis’ and Akcea’s leadership position in the TTR amyloidosis market; and

WHEREAS, following receipt of marketing approval of IONIS-TTR-LRx, Akcea will Commercialize IONIS-TTR-LRx in accordance with the Strategic Plan.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties do hereby agree as follows.

ARTICLE 1
DEFINITIONS

The terms used in this Agreement with initial letters capitalized (and the term “inotersen”), whether used in the singular or the plural, will have the meaning set forth in Appendix 1, or if not listed in Appendix 1, the meaning designated in places throughout this Agreement.

ARTICLE 2
AGREEMENT OVERVIEW

The intent of the strategic Collaboration is (a) for Akcea to Commercialize inotersen in accordance with the Strategic Plan approved by the Joint Steering Committee and for the Parties to share profits from the Commercialization of inotersen, (b) for the Parties to develop IONIS-TTR-LRx under the Strategic Plan approved by the JSC through completion of all Pivotal Studies necessary to obtain Approval throughout the world, and (c) following receipt of Approval of IONIS-TTR-LRx, for Akcea to Commercialize IONIS-TTR-LRx in accordance with the Strategic Plan and for the Parties to share profits from the Commercialization of IONIS-TTR-LRx. The JSC will review and determine whether to approve all Material Changes in the Strategic Plan. The purpose of this ARTICLE 2 is to provide a high-level overview of the roles and responsibilities and rights and obligations of each Party under this Agreement and therefore this ARTICLE 2 is qualified in its entirety by the more detailed provisions of this Agreement set forth below.

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ARTICLE 3
DEVELOPMENT and Commercialization - Strategy and management

Section 3.1   Initial Development and Commercialization. Prior to approval of the initial Strategic Plan the Parties will conduct the Development and Commercialization of the Products in accordance with those plans and budgets for the Products as may be agreed and updated by the Parties from time to time (the “Initial 2018 Plans and Budgets”).

Section 3.2   Strategic Plan.

3.2.1   The Strategic Plan. The Parties will Develop and Commercialize the Products in accordance with this Agreement and pursuant to a global strategic Development and Commercialization plan (the “Strategic Plan”).

(a)   Development and Commercialization. The Strategic Plan will provide that Akcea will be responsible for Commercializing inotersen in each country where it receives Approval and for conducting all Akcea Non-Commercial Activities for inotersen, and Ionis will be responsible for Developing inotersen until the receipt of Approval in certain countries throughout the world, other than the performance of Akcea Non-Commercial Activities. The Strategic Plan will also provide that Ionis will be responsible for Developing IONIS-TTR-LRx through completion of all Pivotal Studies, and Akcea will be responsible for Commercializing IONIS-TTR-LRx in each country where it receives Approval and for conducting all Akcea Non-Commercial Activities for IONIS-TTR-LRx; provided that the JSC will periodically evaluate each Party’s experience, expertise, and resources and may determine to allocate any such Development activities for IONIS-TTR-LRx to either Party (and include such allocation in the Strategic Plan) based on such experience, expertise, and resources of each Party at such time. The Strategic Plan will cover both the long-term global Development and Commercialization strategy for each of the Products separately and collectively as a suite of products and will also detail the specific Development and Commercialization activities to be performed over the course of the upcoming 24 months, on a rolling basis. Without limiting the foregoing, Schedule 3.2.1 contains a list of examples of content that may be included in the Strategic Plan, as appropriate, based on the stage of Development or Commercialization of the applicable Product.

(b)   Manufacture and Supply. The Strategic Plan will provide that Akcea will be responsible for the Manufacture and supply of API and Drug Product (i) of inotersen to support Commercialization and Akcea Non-Commercial Activities, other than any inotersen API and Drug Product purchased by Akcea from Ionis pursuant to Section 3.8, and (ii) of IONIS-TTR-LRx to support Commercialization and Akcea Non-Commercial Activities under the Strategic Plan, in each case ((i) and (ii)), subject to Ionis’ compliance with Section 3.8.2(a). The Strategic Plan will provide that Ionis will be responsible for the Manufacture and supply of API and Drug Product of IONIS-TTR-LRx to support Development activities under the Strategic Plan through completion of all Pivotal Studies for IONIS-TTR-LRx. In addition, to facilitate the foregoing allocation of responsibilities between the Parties for the Manufacture and supply of the Products, the Strategic Plan will include the strategy for Manufacturing and supply of API and Drug Product sufficient to support Commercialization of each Product (and to perform any Akcea Non-Commercial Activities) and a sequence of activities and associated timelines for the orderly transition from Ionis to Akcea of CMC activities for each Product on or before the receipt of Approval for each such Product from the FDA and the EMA, including, as contemplated under Section 3.8.2(a), the assignment from Ionis to Akcea of Ionis’ supply agreements with CMOs for inotersen API and Drug Product as of the Effective Date and, at the applicable time, Ionis’ supply agreements with CMOs for IONIS-TTR-LRx API and Drug Product.

(c)   Commercial Activities and Budget. The Strategic Plan will address, among other important Commercial matters, (i) pre-launch, launch, and subsequent Commercialization activities for inotersen (which may include, as appropriate at any given time based on the stage of Commercialization, market access strategy, messaging, branding, pricing, advertising, education, publication planning, marketing, compliance, and field force training), (ii) key decisions and timelines for Commercialization activities, (iii) key strategies and tactics for implementing those activities, and (iv) a budget approved by the JSC for all inotersen Commercial activities set forth in the Strategic Plan, which budget will include costs associated with each Party’s FTEs and out of pocket expenses (consistent with the terms set forth in Schedule 6.4.1) necessary for each Party to conduct its Commercialization activities under the Strategic Plan (such budget, the “Commercial Budget”). The Commercial activities and strategy in the Strategic Plan will be driven by the shifting competitive landscape over time, reimbursement environment, medical factors that impact

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Commercialization strategies, patient experiences that inform TTR amyloidosis treatment, and emerging data generated from Clinical Trials of IONIS-TTR-LRx. As such, the Parties anticipate that the Commercial components of the Strategic Plan for each Product will evolve over time and become more detailed as inotersen and IONIS-TTR-LRx move closer to launch in, and thereafter penetrate, each market. The Commercialization activities under the Strategic Plan will initially cover inotersen only and at the appropriate time the Commercial sections of the Strategic Plan will be updated to include Commercial activities for IONIS-TTR-LRx as set forth in Section 3.2.3. In addition to the Commercial activities to be included for IONIS-TTR-LRx, at the appropriate time, the Parties will also discuss and update the Strategic Plan to reflect strategies and activities for Commercializing both Products, including synergies that may result from having each Product on the market.

(d)   Development Activities and Budget. The Strategic Plan will address, among other important Development matters, (i) all non-clinical and preclinical studies and Clinical Trials to be conducted through completion of the last Pivotal Study for IONIS-TTR-LRx, (ii) all Akcea Non-Commercial Activities for each Product, and (iii) a budget approved by the JSC for all such activities for each Product set forth in the Strategic Plan, which budget will include costs associated with each Party’s FTEs and out of pocket expenses (consistent with the terms set forth in Schedule 6.4.1) necessary for each Party to conduct the foregoing activities set forth under the Strategic Plan (such budget, the “Development Budget”).

(e)   Regulatory Matters under the Strategic Plan. The Strategic Plan will also address, among other important regulatory matters, regulatory strategy and communication management, transfer of Regulatory Documentation, submissions to Regulatory Authorities, meetings with Regulatory Authorities, regulatory communications, Product labeling, and safety reporting and pharmacovigilance, in each case, which regulatory matters included in the Strategic Plan will be subject to and in accordance with Section 3.5 (Interactions with, and Submissions to, Regulatory Authorities).

3.2.2   Developing the Initial Strategic Plan. The JSC will review, discuss, and determine whether to approve the initial Strategic Plan (other than the Development Budget and Commercial Budget to be included therein), which will be a separate written document from this Agreement, by September 1, 2018. Following such approval of the initial Strategic Plan, the Parties will prepare and submit to the JSC for its review, discussion, and approval by November 15, 2018 (as part of its annual budget process) (a) an initial Commercial Budget and Development Budget for Calendar Year 2019, in each case, that reflect the Commercialization and Development activities set forth in the initial Strategic Plan to be performed in Calendar Year 2019, and (b) a preliminary forecast of the budgets for the Development and Commercial activities (including all Akcea Non-Commercial Activities) set forth in the initial Strategic Plan for Calendar Year 2020. Akcea will have primary responsibility for developing those sections of the initial Strategic Plan related to the Commercialization activities and Akcea Non-Commercial Activities for each Product and the associated Commercial Budget and portion of the Development Budget covering the Akcea Non-Commercial Activities, in each case, other than regulatory matters. Ionis will have primary responsibility for developing those sections of the initial Strategic Plan that set forth the (i) Development activities for IONIS-TTR-LRx through completion of the first Phase 1 Clinical Trial for IONIS-TTR-LRx (other than the Akcea Non-Commercial Activities) and the associated Development Budget (other than the portion of the Development Budget covering the Akcea Non-Commercial Activities), other than regulatory matters, and (ii) the strategy for Manufacturing and supply of API and Drug Product sufficient to support Commercialization of inotersen (and any Akcea Non-Commercial Activities) and a sequence of activities and associated timelines for the orderly transition from Ionis to Akcea of CMC activities for inotersen. The Regulatory Sub-Committee will have primary responsibility for developing those sections of the Strategic Plan that set forth important regulatory matters for the Products and the portion of the Development Budget or Commercial Budget (as applicable) covering such regulatory matters. The JSC will review, discuss, and determine whether to approve each section of the initial Strategic Plan, which discussion will afford each Party the opportunity to review and comment on those sections of the Strategic Plan developed by the other Party.

3.2.3   Updating the Strategic Plan. Following the JSC’s approval of the initial Strategic Plan, each Party (including through the Regulatory Sub-Committee) will develop updates to those sections of the Strategic Plan for which it is responsible every six months to account for the progression of Development, Manufacturing, and Commercialization of each Product, which updates will include an update to the Strategic Plan prior to completion of the first Phase 1 Clinical Trial for IONIS-TTR-LRx and an update in September of each Calendar Year (to enable each Party to timely complete its internal annual budget process). Akcea will also be responsible,

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following Ionis’ development of such section in the initial Strategic Plan, for updating the Strategic Plan to include (a) the strategy for Manufacturing and supply of API and Drug Product (i) of inotersen sufficient to support Commercialization (and any Akcea Non-Commercial Activities), and (ii) of IONIS-TTR-LRx, following receipt of Approval therefor in the U.S., and (b) a sequence of activities and associated timelines for the orderly transition from Ionis to Akcea of CMC activities for IONIS-TTR-LRx following receipt of Approval therefor in the U.S. Ionis will remain responsible for updating such strategy for the Manufacturing and supply of IONIS-TTR-LRx through receipt of Approval therefor in the U.S. Without limiting the generality of the foregoing, the Parties will discuss (through the JSC), and Ionis will take into consideration and not unreasonably refuse to implement Akcea’s comments relating to aspects of Development (including designs and protocols of Clinical Trials) of IONIS-TTR-LRx that are likely to affect Commercializing of IONIS-TTR-LRx, such as trial site selection, health economic outcomes, quality of life measures, endpoints, market access, and optimal reimbursement. In addition, at the appropriate time, but no later than at the completion of the first Phase 1 Clinical Trial for IONIS-TTR-LRx, Akcea will update the Development section of the Strategic Plan to account for Akcea Non-Commercial Activities for IONIS-TTR-LRx and the Commercial section of the Strategic Plan to account for Commercial activities for IONIS-TTR-LRx. Each Party or the Regulatory Sub-Committee, as applicable, will submit those sections of the proposed updated Strategic Plan developed by it to the other Party at least 15 days prior to the next JSC meeting. Subject to Section 3.4.4, the JSC must determine whether to approve any material changes to the Strategic Plan included in any update (each, a “Material Change”).

Section 3.3   Diligence. Akcea will use Commercially Reasonable Efforts to (a) conduct the Commercialization activities assigned to Akcea as set forth in the Strategic Plan in accordance with the timelines specified therein, and (b) Commercialize the Products following receipt of Approval therefor in a country. Both Parties will use Commercially Reasonable Efforts to Develop the Products, including conducting the activities assigned to each Party as set forth in the Strategic Plan in accordance with the timelines specified therein.

Section 3.4   Development and Commercialization Management.

3.4.1   Joint Steering Committee. The Parties will establish a Joint Steering Committee (the “JSC”) to oversee and manage the conduct of activities related to the Development and Commercialization of the Products. The JSC will consist of four representatives appointed by Ionis and four representatives appointed by Akcea each with Development or Commercialization expertise with one JSC representative from each Party being such Party’s chief financial officer. The JSC will determine the JSC operating procedures at its first meeting, including policies for participation by additional representatives or consultants invited to attend JSC meetings, and the timing and location of meetings, which will be codified in the written minutes of the first JSC meeting. Each Party may replace one or more of its representatives on the JSC from time to time upon written notice to the other Party.

3.4.2   Meetings. During the first 12 months after the Execution Date the JSC will meet on an ongoing basis (as often as reasonably necessary but at least monthly) to prepare for and to effectively execute the launch of inotersen, which will include the review and discussion of and determination as to whether to approve the initial Strategic Plan and associated Development Budget and Commercial Budget. Thereafter, the JSC will meet on a quarterly basis. The JSC may hold meetings in person or by audio or video conference as determined by the JSC. In addition, upon prior approval of the other Party, each Party may invite its employees or consultants to attend JSC meetings. Each Party will be responsible for the costs of its own representatives attending such meetings, and such costs will not be “Expenses” under Schedule 6.4.1.

3.4.3   Role of the JSC. Without limiting any of the foregoing, the JSC will perform the following functions, some or all of which may be addressed directly at any given JSC meeting:

(a)   review Akcea’s progress on performing the Commercialization and Akcea Non-Commercial Activities under the Strategic Plan;

(b)   review each Party’s progress on performing the Development activities for IONIS-TTR-LRx assigned to it under the Strategic Plan;

(c)   review and discuss the strategy for Manufacturing and supply of API and Drug Product sufficient to support Commercialization of each Product (and to perform any Akcea Non-Commercial Activities) and a sequence of activities and associated timelines for the orderly transition from Ionis to Akcea of CMC activities for each Product;

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(d)   review and provide advice on the execution of activities and strategies set forth under the Strategic Plan with respect to each Product;

(e)   review, discuss, and determine whether to approve the initial Strategic Plan and all updates thereto that contain Material Changes, as described in Section 3.2.2;

(f)   discuss key regulatory interactions and strategy for the Products;

(g)   review, discuss, and determine whether to approve the Commercial Budget for each Product, including any updates thereto, as described in Section 3.2.2;

(h)   review, discuss, and determine whether to approve the Development Budget, including any updates thereto, as described in Section 3.2.2;

(i)   establish the Allowable Overage for each Calendar Year;

(j)   review and provide advice on Clinical Trial designs for each Product;

(k)   if referred by a Party following the JPC’s failure to reach consensus, determine the strategy with regard to the defense against actual or potential allegations of infringement of any Patent Controlled by a Third Party, including the institution of any inter partes review, opposition or other proceeding related to any such Patent;

(l)   establish subcommittees as necessary to conduct the activities set forth in the Strategic Plan, including a Regulatory Sub-Committee, and, as may be determined necessary by the JSC, clinical development sub-committee, a manufacturing sub-committee, and a clinical operations sub-committee (with the expectation that such sub-committees will evolve as required by the status of Development or Commercialization of the Products); and

(m)   such other review, approval, and advisory responsibilities as may be assigned to the JSC under this Agreement.

3.4.4   Decision Making.

(a)   Committee Decision-Making. Decisions by the JSC will be made by unanimous consent of each Party with each Party’s representatives having, collectively, one vote. At any given meeting of any such committee, a quorum will be deemed reached if two voting representatives of each Party present or participating in such meeting. No action taken at any meeting of any such committee will be effective unless there is a quorum at such meeting. Unless otherwise specified in this Agreement, no action will be taken with respect to a matter to be approved by the JSC if the JSC has not reached unanimous consensus.

(b)   Final Decision-Making. Each Party will give due consideration to, and consider in good faith, the recommendations and advice of the JSC regarding the conduct of the activities under the Strategic Plan. The JSC will endeavor in good faith to reach consensus on all decisions, however, if the JSC cannot unanimously agree on a matter to be decided or approved by the JSC, then, except as otherwise set forth in Schedule 6.4.1, the matter may be referred to the Senior Representatives for resolution. If the Senior Representatives cannot reach agreement, then (i) without limiting Akcea’s obligations under Section 3.3, Akcea will have final-decision making authority with respect to (A) matters relating to the Commercialization or Akcea Non-Commercial Activities (other than Pre-Approval Akcea Development Activities) of any Product and Manufacture of the Products for such purposes, including approval of those sections of the Strategic Plan covering Commercialization, Akcea Non-Commercial Activities (other than Pre-Approval Akcea Development Activities), and Manufacturing of the Products for such activities (but not the Commercial Budget), and how to implement the JSC’s recommendations with respect thereto, and (B) matters relating to the strategy with regard to the defense against actual or potential allegations of infringement of any Patent Controlled by a Third Party, including the institution of any inter partes review, opposition, or other proceeding related to any such Patent, and (ii) Ionis will have final-decision making authority with respect to matters relating to the Development (other than Akcea Non-Commercial Activities that are not Pre-Approval Akcea Development Activities) of any Product and the Manufacture of the

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Product for such purposes, including approval of those sections of the Strategic Plan covering Development other than Akcea Non-Commercial Activities that are not Pre-Approval Akcea Development Activities (but not the Development Budget) and Manufacturing of the Products for such purposes, and how to implement the JSC’s recommendations with respect thereto.

(c)   Limitations on Decision-Making. Notwithstanding anything to the contrary set forth in this Agreement, a Party may not exercise its final decision-making right to (i) increase the Commercial Budget or Development Budget or the other Party’s Internal Expenses, External Expenses, or obligations under the Strategic Plan, or (ii) increase the other Party’s commitments to a Regulatory Authority; provided, however, that neither Party will unreasonably withhold its consent to an increase in the Commercial Budget or Development Budget that is reasonably necessary to fund the activities contemplated by the most recent Strategic Plan approved by the JSC. In addition, and notwithstanding anything to the contrary set forth in this Agreement, Ionis may not exercise its final decision-making authority with respect to Pre-Approval Akcea Development Activities in a manner that causes or would reasonably be expected to cause Akcea to violate or act in a manner inconsistent with any of Akcea’s standard operating procedures or codes of conduct or Applicable Law. The JSC will solely have the decision-making authority expressly assigned to it under this Agreement, and, notwithstanding anything to the contrary set forth in this Agreement, will not have the authority to make any decision (A) in a manner that excuses a Party from any obligation specifically enumerated under this Agreement, (B) in a manner that negates any consent right or other right specifically allocated to a Party under this Agreement, (C) to resolve any dispute involving the breach or alleged breach of this Agreement or to amend or modify this Agreement or any of the Parties’ respective rights and obligations hereunder, (D) to resolve a matter if the provisions of this Agreement specify that unanimous or mutual agreement of the Parties (and not the JSC) is required for such matter, or (E) in a manner that would require a Party to perform any act that would cause such Party to breach any of its obligations hereunder.

3.4.5   Term of the JSC. Each Party’s obligation to participate in the JSC will continue for the Agreement Term.

3.4.6   Briefing the JSC. At each regularly scheduled meeting of the JSC each Party will provide to the JSC a progress update on each Party’s performance of activities related to each Product under the Strategic Plan, which progress update can take the form of a PowerPoint presentation.

3.4.7   Alliance Managers. Each Party will appoint a representative to act as its alliance manager, which alliance manager will promote the overall health of the relationship between the Parties and oversee the conduct of the Collaboration.

3.4.8   Dispute Resolution. Other than those matters to be approved or determined by the JSC, disputes related to regulatory matters, or as otherwise set forth in Schedule 6.4.1, the Parties will resolve all Disputes related to the Development or Commercialization of the Products in accordance with Section 13.4.

3.4.9   Status Updates to the Ionis Board of Directors. Upon Ionis’ reasonable request, Akcea will present updates to Ionis’ board of directors (and answer any reasonable questions posed by such directors) regarding the status of the Development or Commercialization of the Products, including presenting any proposed Commercial Budget or Development Budget for the upcoming Calendar Year.

Section 3.5   Interactions with, and Submissions to, Regulatory Authorities.

3.5.1   Regulatory Strategy and Communication Management. The Parties will, through the JSC, establish a committee comprised of two members from each of Akcea and Ionis with requisite experience in Regulatory strategy and communications (the “Regulatory Sub-Committee”). The Parties acknowledge that, subject to Section 3.5.6 and Section 3.5.8 (a) Ionis and Akcea will share responsibilities related to devising and implementing regulatory strategy under this Agreement, (b) Akcea will lead all regulatory activities related to Akcea Non-Commercial Activities (other than Pre-Approval Akcea Development Activities), (c) the Party that holds the IND (and the NDA following receipt of Approval for the Product in a country) (the “Regulatory Responsible Party”) for the applicable Product will lead all other regulatory activities for such Product (including with respect to Manufacturing), (d) Ionis will be responsible for filing the NDA, MAA, and other marketing authorization applications with Regulatory Authorities for inotersen until such time as the Parties may

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agree to transfer such responsibilities to Akcea, and (e) Akcea will be responsible for filing the NDA, MAA, and other marketing authorization applications with Regulatory Authorities for IONIS-TTR-LRx. The Regulatory Sub-Committee will be responsible for determining by mutual agreement:

(a)   The overall regulatory strategy for each of the Products;

(b)   The content of each submission to a Regulatory Authority related to the Products;

(c)   The attendees, roles, and responsibilities of such attendees and strategy for all important interactions with Regulatory Authorities related to the Development and Commercialization of the Products; and

(d)   The strategy and content of all material correspondence with Regulatory Authorities related to the Development and Commercialization of the Products.

3.5.2   Transfer of Regulatory Documentation. No later than 30 days after the receipt of Approval for a Product in a country, unless otherwise agreed by the Parties, Ionis will assign to Akcea all rights, title, and interests in and to each IND and NDA for such Product filed in such country. The date of such transfer will be the “NDA Transfer Date.” After the NDA Transfer Date for a Product in a country, Ionis will transfer to Akcea in accordance with the regulatory plan to be established by the Regulatory Sub-Committee copies (in electronic or other format) of other Regulatory Documentation (including drafts) Controlled by Ionis as of the NDA Transfer Date related to such Product (collectively, with the Regulatory Documentation transferred to Akcea pursuant to this Section 3.5.2 the “Assigned Regulatory Documentation”). Ionis will execute all letters, attestations, forms, confirmatory assignments, and other documentation reasonably requested by Akcea to give effect to the assignment and transfer of INDs, NDAs, and Assigned Regulatory Documentation contemplated by this Section 3.5.2. If any Approval for a Product in a country cannot be transferred to Akcea within such 30 day period, then, to the extent it would be helpful to hasten the Commercialization of such Product in such country, at Akcea’s request, Ionis will appoint Akcea as its exclusive distributor of the applicable Product in such country and grant Akcea the right to appoint sub-distributors until such time as such Approval in such country has been transferred to Akcea, and the Parties will enter into a distribution agreement on reasonable and customary terms to memorialize such appointment.

3.5.3   Submissions to Regulatory Authorities. Subject to Section 3.5.6, the Parties will mutually agree on the content of all important written submissions to Regulatory Authorities for the Products, including INDs, Investigator Brochures, CTDs, and NDAs. The Regulatory Sub-Committee will mutually develop and agree to a detailed plan for coordination and preparation of regulatory filings for market approval for the Products (including establishing responsibilities for provision of all sections of the electronic common technical document (“eCTD”) modules, and plan activity timelines) to accelerate eCTD completion and facilitate rapid completion of regulatory filings to obtain Approval for the Products. Once the Parties mutually agree upon such a plan, each Party will use Commercially Reasonable Efforts to execute its respective tasks and responsibilities under such plan in accordance with the time frames set forth in such plan.

3.5.4   Meetings with Regulatory Authorities. The Parties will mutually agree on the strategy for all meetings with Regulatory Authorities, including pre-IND meetings, end of Phase 2 Clinical Trial meetings, scientific advice in the EU, and the preparatory sessions therefor. The Regulatory Sub-Committee will mutually agree on the attendees for each such meeting (with Ionis having up to three representatives and the goal of equal representation from Akcea and Ionis), each attendee’s role and responsibilities, and the strategy for addressing the issues to be discussed with the Regulatory Authority for each such meeting. In addition, Akcea will promptly disclose to the Regulatory Sub-Committee any planned substantive interactions with a Regulatory Authority in a Major Market reasonably in advance of such interaction to provide the Parties with sufficient time to discuss the strategy with respect to such interaction.

3.5.5   Regulatory Communications for Products. The receiving Party will provide to the other Party for its review all important documents and communications received from Regulatory Authorities in Major Market countries that impact the Development, Commercialization, or potential Approval of Products as soon as reasonably practicable. Akcea and Ionis will mutually agree on the content of all responses to such documents and communications received from any Regulatory Authorities in a Major Market country.

3.5.6   Product Label and Class Generic Claims. The Parties will work collaboratively, and Akcea will lead the effort, to create the label for each Product for submission to Regulatory Authorities, including the

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proposed label for inotersen and IONIS-TTR-LRx included in each NDA. Akcea will submit any proposed Product label to Ionis for Ionis’ review and comment and the Parties will endeavor to mutually agree on the final label for each Product to be submitted to each Regulatory Authority in each country. If the Parties cannot mutually agree on a Product label, then Akcea will have final decision-making authority with respect thereto, other than with respect to any statement to be included in the proposed label for a Product that Ionis reasonably determines is not supported by the data generated from Clinical Trials of such Product, for which statements Ionis will have final decision-making authority. In addition, to the extent Akcea intends to make any claims in a label or regulatory filing for a Product that are class generic to antisense oligonucleotides, Ionis’ generation 2.0 or 2.5 chemistry platform(s), or Conjugate Technology the Regulatory Sub-Committee will adopt Ionis’ language for such class generic claim in such label or regulatory filing.

3.5.7   Safety Reporting, Pharmacovigilance, and Regulatory Coordination. The Parties acknowledge and agree that Ionis and Akcea will coordinate their respective Development activities for the Products, including with respect to the conduct of all Clinical Trials (including the collection and reporting of adverse events and pharmacovigilance), regulatory activities, and nonclinical and pre-clinical activities.

3.5.8   Disputes Related to Regulatory Matters. If the Parties cannot come to a mutual agreement through the Regulatory Sub-Committee on an issue related to regulatory matters, then the Regulatory Responsible Party for the applicable Product at such time will have the final decision-making authority over such matter, except as otherwise set forth in Section 3.5.6 with respect to decisions regarding the label for a Product and class generic claims included in any regulatory filings for a Product.

Section 3.6   Collaboration Costs. Costs incurred by Ionis or Akcea associated with inotersen or IONIS-TTR-LRx under this Agreement will be handled in accordance with Schedule 6.4.1.

Section 3.7   Subcontracting. Subject to the terms of this Section 3.7, each Party will have the right to engage Third Party subcontractors to perform its obligations under this Agreement. Any subcontractor to be engaged by a Party to perform a Party’s obligations set forth in the Agreement will meet the qualifications typically required by such Party for the performance of work similar in scope and complexity to the subcontracted activity and will enter into such Party’s standard nondisclosure agreement consistent with such Party’s standard practices. Any Party engaging a subcontractor hereunder will remain responsible and obligated for such activities and will not grant rights to such subcontractor that interfere with the rights granted to the other Party under this Agreement.

Section 3.8   Manufacturing, Supply and CMC.

3.8.1   Sale of Existing Inotersen Supply. Ionis will sell to Akcea, and Akcea will purchase from Ionis, the commercial and clinical-grade inventory of API and Drug Product for inotersen set forth on the inventory schedule disclosed by Ionis to Akcea via the electronic data room hosted in connection with the transactions contemplated hereunder, in each case, in accordance with a purchase schedule to be mutually agreed by the Parties. The price for such inotersen API and Drug Product is the price equal to Ionis’ Cost of Goods (or, if made by a Third Party, the price Ionis was charged for such material) calculated based on the pricing methodology Ionis uses for its other partners, which cost will be handled in accordance with Schedule 6.4.1. Akcea will take delivery of such material at times to be agreed by the Parties.

3.8.2   Manufacturing Agreements.

(a)   Assignment of Existing CMO Agreements. In accordance with the process and timelines set forth in the Strategic Plan with respect to the applicable Product, Ionis will assign to Akcea any agreements with Ionis’ CMOs for the applicable Product, unless any such agreement with a CMO expressly prohibits such assignment, in which case Ionis will cooperate with Akcea in all reasonable respects to secure the consent of the applicable Third Party to such assignment. If any such consent cannot be obtained with respect to such an agreement with a CMO, then Ionis will facilitate the introduction of Akcea to the applicable CMO and obtain for Akcea substantially all of the practical benefit and burden under such CMO agreement until such time as Akcea is able to enter into its own agreements with one or more CMOs for the supply of the applicable Product sufficient to enable Akcea to comply with its Manufacturing obligations for such Product set forth under this Agreement and the Strategic Plan, including by (i) entering into appropriate and reasonable alternative arrangements on terms agreeable to each of Ionis and Akcea, and (ii) subject to the consent and control of Akcea, enforcing for the account of Akcea, any and all rights of Ionis against the other party thereto arising out of the breach or cancellation thereof by such other party or otherwise.

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(b)   Additional Manufacturing Agreements. In connection with Akcea’s selecting and engaging one or more CMOs to perform its Manufacturing obligations set forth in the Strategic Plan with respect to each Product, the Parties will cooperate in good faith to negotiate and execute any agreements with CMOs for the Manufacture of API or Drug Product for use in the Commercialization of a Product and the performance of Akcea Non-Commercial Activities (each such agreement, a “Manufacturing Agreement”). Akcea will have the final decision-making authority regarding the selection of the CMO and the terms of any such Manufacturing Agreement. As between the Parties, Akcea will enter into such Manufacturing Agreements with CMOs. Under each Manufacturing Agreement at Akcea’s election, Ionis will either (i) grant a license to the selected CMO under the Ionis Manufacturing Patents and Ionis Manufacturing and Analytical Know-How to the extent necessary for such CMO to Manufacture Products in such Third Party’s own manufacturing facility, or (ii) permit Akcea to grant a sublicense from Akcea to the selected CMO under the Ionis Manufacturing Patents and Ionis Manufacturing and Analytical Know-How. Each Manufacturing Agreement will include provisions permitting Ionis to elect to have such agreements assigned to Ionis in the event of a termination of this Agreement. Other than in connection with such an assignment upon termination of this Agreement, and except as set forth in the Strategic Plan, Ionis will have no obligations under such Manufacturing Agreements. Prior to execution of any such Manufacturing Agreement, Akcea will provide a copy of any proposed Manufacturing Agreement to Ionis for Ionis’ review and will consider in good faith all comments and recommendations provided by Ionis with respect to such Manufacturing Agreement. Akcea will provide Ionis with a true and complete copy of any Manufacturing Agreement that it enters into with a CMO within 30 days after the execution thereof.

Section 3.9   Ionis Internal Oligonucleotide Safety Database.

3.9.1   Ionis maintains an internal database that includes information regarding the tolerability of its drug compounds, individually and as a class, including information discovered during pre-clinical and clinical development (the “Ionis Internal Oligonucleotide Safety Database”). In an effort to maximize understanding of the safety profile and pharmacokinetics of Ionis’ compounds, Akcea will reasonably cooperate in connection with populating the Ionis Internal Oligonucleotide Safety Database. To the extent collected by Akcea and in the form in which Akcea uses/stores such information for its own purposes, Akcea will provide Ionis with information concerning toxicology, pharmacokinetics, safety pharmacology study(ies), serious adverse events, and other safety information related to a Product reasonably promptly following the date such information is available to Akcea (but not later than 90 days after Akcea’s receipt of such information). In connection with any reported serious adverse event, Akcea will provide Ionis all serious adverse event reports, including initial, interim, follow-up, amended, and final reports. In addition, with respect to a Product, Akcea will provide Ionis with copies of annual safety updates filed with each IND and the safety sections of any final Clinical Trial reports within 90 days following the date on which such information is filed or is available to Akcea, as applicable. Furthermore, Akcea will promptly provide Ionis with reasonable supporting data and answers to follow-up questions requested by Ionis. All such information disclosed by Akcea to Ionis will be Akcea Confidential Information; provided, however, that Ionis may disclose any such Akcea Confidential Information to (a) Ionis’ other partners if such information is regarding class generic properties of oligonucleotides pursuant to Section 3.5.6, or (b) any other Third Party, in each case, so long as Ionis does not disclose the identity of a Product or Akcea or any information from which the identity of a Product or Akcea can be derived. Akcea will deliver all such information to Ionis for the Ionis Internal Oligonucleotide Safety Database to:

Ionis Pharmaceuticals, Inc.
2855 Gazelle Court
Carlsbad, California 92010
Attention: Head of Drug Safety Monitoring

(or to such other address/contact designated in writing by Ionis). Akcea will also require its Affiliates and Sublicensees to comply with this Section 3.9.

3.9.2   From time to time, Ionis utilizes the information in the Ionis Internal Oligonucleotide Safety Database to conduct analyses to keep Ionis and its partners informed regarding class generic properties of oligonucleotides, including with respect to safety, without compromising the confidential information of the contributing partners. As such, if and when Ionis identifies safety or other related issues that may be relevant to a Product (including any potential class-related toxicity), Ionis will promptly inform Akcea of such issues and, if requested, provide the data supporting Ionis’ conclusions.

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3.9.3   During the Agreement Term, Akcea may submit written requests to Ionis for Ionis to run queries of the Ionis Internal Oligonucleotide Safety Database relevant to one or more Products, and Ionis will use Commercially Reasonable Efforts to promptly run such queries and deliver to Akcea the results of such queries. Any information disclosed between the Parties under this Section 3.9.3 will be treated as Confidential Information in accordance with ARTICLE 8.

ARTICLE 4
GRANT OF RIGHTS

Section 4.1   License Grants From Ionis to Akcea. Subject to the terms and conditions of this Agreement, including the conditions and limitations set forth in Section 4.5 below, Ionis hereby grants to Akcea:

4.1.1   an exclusive, world-wide, royalty-bearing license, with the right to grant sublicenses as set forth in Section 4.2 below, under Ionis’ rights in the Ionis Product-Specific Patents, Ionis Product-Specific Know-How, Ionis Core Technology Patents, Ionis Core Technology Know-How, and Joint Patents to Develop, make, have made, use, sell, have sold, offer for sale, import and otherwise Commercialize Products; and

4.1.2   a non-exclusive, world-wide, royalty-bearing license, with the right to grant sublicenses as set forth in Section 4.2 below, under the Ionis Manufacturing Patents and Ionis Manufacturing and Analytical Know-How to Manufacture Products (a) by Akcea in Akcea’s own manufacturing facility, (b) by a CMO previously granted licenses to practice the Ionis Manufacturing Patents, or (c) in the facility of a CMO selected and engaged by Akcea under a Manufacturing Agreement and subsequently granted licenses or sublicenses in accordance with Section 3.8.2(b), as applicable, to practice the Ionis Manufacturing Patents and Ionis Manufacturing and Analytical Know-How.

Section 4.2   Sublicenses. The licenses granted to Akcea under Section 4.1 are sublicensable only in connection with the grant of rights to any Third Party or Affiliate, in each case, for the continued Development and Commercialization of a Product in accordance with the terms of this Agreement. Akcea will not enter any agreement with a Third Party that sublicenses, transfers, grants a security interest in, or otherwise encumbers any of the Products, including the Patents or Know-How licensed to Akcea under this Agreement Covering such Products, in each case, without Ionis’ prior written consent (including with respect to the terms of any such an agreement with a Third Party), such consent not to be unreasonably withheld, delayed, or conditioned. Akcea will provide Ionis with written notice of any Sublicense granted pursuant to this Section 4.2 within 30 days after the execution thereof together with a true and complete copy of any such Sublicense or any other Sublicense entered into by Akcea, subject to Akcea being entitled to make such appropriate redaction for information that does not relate to a Product to the extent not relevant to Ionis’ enforcement of such Sublicense and not reasonably necessary for Ionis to determine Akcea’s compliance with the terms of this Agreement. Notwithstanding the foregoing, Ionis’ consent will not be required for Akcea to enter into a Distribution Agreement with respect to one or more countries outside of the Major Market countries that is consistent with the scope of the licenses granted to Akcea hereunder (with or without packaging rights).

Section 4.3   Enforcing Sublicense Agreements. If Akcea fails to take any action to enforce the applicable terms of a Sublicense granted pursuant to Section 4.2 for a period of 15 days following receipt of written notice of such failure from Ionis, which failure, in Ionis’ good faith determination, could cause a material adverse effect on Ionis or Ionis’ technology, then Akcea hereby grants Ionis the right to enforce such Sublicense terms on Akcea’s behalf and will cooperate with Ionis (which cooperation will be at Akcea’s sole expense and will include Akcea joining any action before a court or administrative body filed by Ionis against such Sublicensee if and to the extent necessary for Ionis to have legal standing before such court or administrative body) in connection with enforcing such terms.

Section 4.4   Effect of Termination on Sublicenses. If this Agreement terminates for any reason, then any Sublicensee will, from the effective date of such termination, automatically become a direct licensee of Ionis with respect to the rights sublicensed to the Sublicensee by Akcea; so long as (a) such Sublicensee is not in breach of its Sublicense, (b) such Sublicensee agrees in writing to comply with all of the terms of this Agreement to the extent applicable to the rights originally sublicensed to it by Akcea, and (c) such Sublicensee agrees to pay directly to Ionis such Sublicensee’s payments under this Agreement to the extent applicable to the rights sublicensed to it by Akcea. Akcea agrees that it will confirm clause (a) of the foregoing in writing at the request and for the benefit of Ionis and if requested, the Sublicensee.

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Section 4.5   License Limitations; Retained Rights.

4.5.1   The licenses granted under this ARTICLE 4 are subject to and limited by the (a) Prior Agreements, (b) Existing In-License Agreements, and (c) Future In-License Agreements, in each case ((a) – (c)), to the extent the provisions of such obligations or agreements have been specifically disclosed to Akcea in writing (or via electronic data room).

4.5.2   All rights in and to Ionis Licensed Technology not expressly licensed to Akcea under this Agreement are hereby retained by Ionis or its Affiliates. All rights in and to Akcea Technology not expressly licensed to Ionis under this Agreement are hereby retained by Akcea or its Affiliates. In addition, notwithstanding the exclusive licenses granted under this ARTICLE 4, Ionis retains the right to: (a) perform any activities pursuant to the Prior Agreements as in effect on the Effective Date; and (b) grant licenses to any Third Party under the Ionis Core Technology Patents to (i) conduct pre-clinical research, or (ii) enable such Third Party to Manufacture or formulate oligonucleotides, where such Third Party is primarily engaged in providing contract manufacturing or services and is not primarily engaged in drug discovery, development, or commercialization of therapeutics.

Section 4.6   Technology Transfer.

4.6.1   Ionis Know-How. Ionis will promptly deliver to Akcea or one or more designated Affiliates all Know-How in Ionis’ possession related to the Products that has not previously been provided to Akcea for use solely in accordance with the licenses granted to Akcea under Section 4.1.1 and Section 4.1.2.

4.6.2   Ionis Manufacturing and Analytical Know-How. Ionis will promptly deliver to Akcea or one or more designated Affiliates or any mutually agreed upon Third Party CMOs all Ionis Manufacturing and Analytical Know-How in Ionis’ Control relating to the Products that is necessary for the exercise by Akcea, its Affiliates, or a Third Party of the Manufacturing rights granted to Akcea under Section 4.1.2, in each case, solely for use by Akcea, its Affiliates, or a Third Party acting on Akcea’s behalf under a Manufacturing Agreement (or an agreement with a Third party CMO assigned by Ionis to Akcea) to Manufacture API or Drug Product (including any mutually agreed upon contract manufacturers). Upon Akcea’s request, and provided such request is consistent with the supply chain strategy set forth in the Strategic Plan, Ionis will provide Ionis personnel to transfer such Manufacturing and Analytical Know-How under this Section 4.6.2 to any Third Party Manufacturing API or Drug Product on Akcea’s behalf solely to enable such Third Party to Manufacture API or Drug Product in accordance with the terms of this Agreement.

Section 4.7   No Implied License. Except as expressly provided in this Agreement no Party will be deemed by estoppel or implication to have granted to the other Party any license or other right with respect to any intellectual property.

Section 4.8   License to Ionis under Akcea Collaboration Technology. Subject to the terms and conditions of this Agreement (including Ionis’ exclusivity covenants under Section 5.1.2 and without limiting the licenses granted to Akcea under Section 4.1), Akcea hereby grants Ionis a fully-paid, royalty-free, irrevocable, worldwide, non-exclusive, sublicensable license under any Akcea Collaboration Technology to Develop, Manufacture, have Manufactured, and Commercialize products that include an oligonucleotide as an active pharmaceutical ingredient, other than a Competing Product.

ARTICLE 5
EXCLUSIVITY COVENANTS

Section 5.1   Exclusivity; Limitations.

5.1.1   Akcea’s Exclusivity Covenants. Akcea, its Affiliates, and its Sublicensees will not work independently or for or with any Third Party (including the grant of any license to any Third Party) with respect to the Development or Commercialization of any product (including an ASO) that (a) is a Competing Product, or (b) is reasonably expected to decrease the market share for a Product and treats or is intended to treat transthyretin amyloidosis or any other Indication for which a Product is being Developed or Commercialized under this Agreement, in each case ((a) and (b)), until, on a Product-by-Product and country-by-country basis, the expiration of the last Valid Claims in an Ionis Patent Covering a Product in a country.

5.1.2   Ionis’ Exclusivity Covenants. Except in the exercise of its retained rights under Section 4.5.2 or the exercise of its right in accordance with the last sentence of this Section 5.1.2, Ionis, its Affiliates, and its Sublicensees will not practice any Ionis Licensed Technology or Joint Patents or grant any license to any Third

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Party to practice any Ionis Licensed Technology or Joint Patents to Develop or Commercialize any Competing Product until, on a Product-by-Product and country-by-country basis, the expiration of the last Valid Claims in an Ionis Patent Covering a Product in such a country. Notwithstanding the foregoing, if Ionis alleges that Akcea has materially breached its obligations under Section 3.3 and Akcea disputes the occurrence of such a material breach and submits such dispute for resolution pursuant to Section 13.4, then, during the pendency of such dispute in any country in which this Section 5.1.2 applies, Ionis, its Affiliates, and its Sublicensees may practice the Ionis Licensed Technology and Joint Patents and grant licenses to Third Parties to practice the Ionis Licensed Technology and Joint Patents, in each case, to Develop (but not Commercialize) any Competing Product.

5.1.3   Pre-Existing Competitive Programs of an Acquirer. If, at any time during the Agreement Term, a Change of Control of a Party occurs involving a Person that, at the time of the completion of such Change of Control, is Developing or Commercializing a product that would violate the terms of Section 5.1.1 or Section 5.1.2, as applicable (such pre-existing competitive product, a “Pre-Existing Competing Product,”), then such Party shall not be deemed in breach of its obligations under Section 5.1.1 or Section 5.1.2, as applicable, with respect to such Pre-Existing Competing Product (and the restrictions set forth therein will not apply to such Pre-Existing Competing Products); provided that, following such Change of Control, such acquired Party will separate its Development and Commercialization activities under this Agreement from its development and commercialization activities relating to such Pre-Existing Competing Product (“Competing Activities”) and such Party will, and (if applicable) will cause the acquiring Affiliate to, (a) establish separate teams to conduct Development activities under this Agreement and development activities related to such Pre-Existing Competing Product, (b) prevent any Know-How that is Confidential Information relating to the Development or Commercialization of the applicable Product from being disclosed to, or used by, individuals performing such Competing Activities, and (c) not use or reference any Know-How that is Confidential Information or conduct any activities Covered by any Patents, in each case, Controlled by the Party involved in the Change of Control or the acquisition or its Affiliates prior to the effective date of the Change of Control or the acquisition, as applicable, in the development, manufacture, or commercialization of the Pre-Existing Competing Product.

ARTICLE 6
FINANCIAL PROVISIONS

Section 6.1   Up-Front Fee. In partial consideration for the licenses granted under Section 4.1, on the Effective Date, Akcea will pay to Ionis an up-front fee equal to $150,000,000 through the issuance of Akcea common stock in accordance with the terms of the Stock Purchase Agreement.

Section 6.2   Inotersen Commercialization Funding. To support Commercialization of inotersen and IONIS-TTR-LRx, in addition to the Akcea common stock issued to Ionis under Section 6.1, on the Effective Date, Ionis will purchase $200,000,000 of Akcea common stock in cash in accordance with the terms of the Stock Purchase Agreement.

Section 6.3   Milestone Payments.

6.3.1   Milestone Payments for Achievement of Regulatory Milestone Events by inotersen. Akcea will pay to Ionis the Regulatory Milestone Payments set forth in Table 6.3.1 below when Akcea, its Affiliates, or its Sublicensees first achieve a Regulatory Milestone Event listed in Table 6.3.1 for inotersen.

Table 6.3.1 – inotersen Regulatory Milestones
Inotersen Milestone Event
Milestone Payment
NDA Approval of inotersen in the U.S. 
$
50M
 
MAA Approval of inotersen in the EU
$
40M
 
JNDA Approval of inotersen in Japan
$
20M
 

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6.3.2   Milestone Payments for Achievement of Regulatory Milestone Events by IONIS-TTR-LRx. Akcea will pay to Ionis the Regulatory Milestone Payments set forth in Table 6.3.2 below when Akcea, its Affiliates, or its Sublicensees first achieve a Regulatory Milestone Event listed in Table 6.3.2 for IONIS-TTR-LRx.

Table 6.3.2 - IONIS-TTR-LRx Regulatory Milestones
IONIS-TTR-LRx Milestone Event
Milestone Payment
Acceptance of Filing for IONIS-TTR-LRx in the U.S.
$
20M
 
Acceptance of Filing for IONIS-TTR-LRx in the EU
$
15M
 
NDA Approval of IONIS-TTR-LRx in the U.S. 
$
50M
 
MAA Approval of IONIS-TTR-LRx in the EU
$
40M
 
JNDA Approval of IONIS-TTR-LRx in Japan
$
20M
 

6.3.3   Payment for Achievement of Regulatory Milestone Events. Akcea will notify Ionis promptly upon achievement of a Regulatory Milestone Event, and will pay to Ionis the applicable Milestone Payment within 45 days after the date of achievement of such Regulatory Milestone Event. Each Regulatory Milestone Payment shall be payable no more than one time.

6.3.4   Milestone Payments for First Achievement of Sales Milestone Event. Akcea will pay to Ionis the milestone payments set forth in Table 6.3.4 below (each, a “Sales Milestone Payment” and, together with the Regulatory Milestone Payments, the “Milestone Payments”) when any combination of Akcea, its Affiliates, or its Sublicensees first achieve a sales milestone event set forth in Table 6.3.4 (each, a “Sales Milestone Event” and, together with the Regulatory Milestone Events, the “Milestone Events”). Notwithstanding the definition of “Net Sales,” for the purposes of this Section 6.3.4, “Net Sales” will includes sales of the Products by Sublicensees as determined in accordance with GAAP and reported by such Sublicensees to Akcea.

Table 6.3.4 – Sales Milestones
Sales Milestone Event
Sales Milestone Payment
$400M in aggregate worldwide Net Sales of Products in a Calendar Year
$
50M
 
$750M in aggregate worldwide Net Sales of Products in a Calendar Year
$
75M
 
$1B in aggregate worldwide Net Sales of Products in a Calendar Year
$
100M
 
$1.5B in aggregate worldwide Net Sales of Products in a Calendar Year
$
150M
 
$2B in aggregate worldwide Net Sales of Products in a Calendar Year
$
200M
 
$3B in aggregate worldwide Net Sales of Products in a Calendar Year
$
300M