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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2010	Dec. 31, 2009
Current assets:
Cash and cash equivalents	$ 70,052	$ 105,255
Short-term investments	402,301	469,057
Contracts receivable	1,242	10,899
Inventories	2,484	2,768
Other current assets	7,058	8,147
Total current assets	483,137	596,126
Property, plant and equipment, net	35,703	27,338
Licenses, net	12,288	14,542
Patents, net	15,821	15,909
Deposits and other assets	3,528	3,269
Total assets	550,477	657,184
Current liabilities:
Accounts payable	6,523	4,696
Accrued compensation	6,831	7,135
Income taxes payable		7,323
Accrued liabilities	12,389	12,339
Current portion of long-term obligations	5,645	4,270
Current portion of deferred contract revenue	74,502	75,681
Total current liabilities	105,890	111,444
Long-term deferred contract revenue	50,413	107,097
2 5/8 percent convertible subordinated notes	132,895	125,100
Long-term obligations, less current portion	5,720	11,478
Long-term financing obligation	10,147
Investment in Regulus Therapeutics Inc.	870
Total liabilities	305,935	355,119
Stockholders' equity:
Common stock, $0.001 par value; 200,000,000 shares authorized, 99,393,780 and 98,850,934 shares issued and outstanding at December 31, 2010 and 2009, respectively	99	99
Additional paid-in capital	1,000,181	985,620
Accumulated other comprehensive income	949	2,153
Accumulated deficit	(756,687)	(696,150)
Total Isis Pharmaceuticals, Inc. stockholders' equity	244,542	291,722
Noncontrolling interest in Regulus Therapeutics Inc.		10,343
Total stockholders' equity	244,542	302,065
Total liabilities and stockholders' equity	$ 550,477	$ 657,184

Investment in Regulus Therapeutics Inc.

12 Months Ended

Dec. 31, 2010

Investment in Regulus Therapeutics Inc.

2. Investment in Regulus Therapeutics Inc.

In September 2007, we and Alnylam established Regulus as a company focused on the discovery, development, and commercialization of microRNA-based therapeutics. Regulus combines our and Alnylam’s technologies, know-how, and intellectual property relating to microRNA-based therapeutics.

We and Alnylam each granted Regulus exclusive licenses to our respective intellectual property for microRNA therapeutic applications, as well as certain early fundamental patents in the microRNA field, including the “Tuschl III”, “Sarnow” and “Esau” patent series. Alnylam made an initial investment of $10 million in Regulus to balance both companies’ ownership. In October 2010, sanofi-aventis invested $10 million in Regulus. From this investment sanofi-aventis acquired less than 10 percent ownership of Regulus, leaving us with 46 percent ownership. Alnylam owns the remaining equity. Regulus operates as an independent company with a separate board of directors, scientific advisory board and management team. We and Alnylam retain rights to develop and commercia lize on pre-negotiated terms microRNA therapeutic products that Regulus decides not to develop either itself or with a partner.

Regulus Collaborations

sanofi-aventis

In June 2010, Regulus entered into a global, strategic alliance with sanofi-aventis to discover, develop, and commercialize microRNA therapeutics. The alliance includes $640 million of potential milestone payments in addition to a $25 million upfront fee, a $10 million equity investment in Regulus that sanofi-aventis made in October 2010 and annual research support for three years with the option to extend two additional years. In addition, Regulus is eligible to receive royalties on microRNA therapeutic products commercialized by sanofi-aventis. sanofi-aventis also received an option for a broader technology alliance that provides Regulus certain rights to participate in development and commercialization of resulting products. If exercised, this three-year option is worth up to an additional $50 million to Regulus. We and Alnylam are each eligible to receive 7.5 percent of the upfront payment and all potential milestone payments, in addition to royalties on product sales. As a result, in July 2010 we received a payment of $1.9 million representing 7.5 percent of the $25 million upfront fee from Regulus.

GlaxoSmithKline

In April 2008, Regulus entered into a strategic alliance with GlaxoSmithKline, or GSK, to discover, develop and commercialize novel microRNA-targeted therapeutics to treat inflammatory diseases such as rheumatoid arthritis and inflammatory bowel disease, or IBD, and in February 2010, Regulus and GSK expanded this alliance to include microRNA therapeutics targeting microRNA 122, or miR-122, for the treatment of hepatitis C virus infection, or HCV. The alliance utilizes Regulus’ expertise and intellectual property position in the discovery and development of microRNA-targeted therapeutics and provides GSK with an option to license drug candidates directed at four different microRNA targets, including miR-122 for HCV. Regulus will be responsible for the discovery and development of the microRNA antagonists through completion of clinical proof of concept, unless GSK chooses to exercise its option earlier. After exercise of the option, GSK will have an exclusive license to drugs Regulus develops under each program for the relevant microRNA target for further development and commercialization on a worldwide basis. Regulus will have the right to further develop and commercialize any microRNA therapeutics which GSK chooses not to develop or commercialize.

Regulus received $28 million in upfront payments from GSK, including $18 million in option fees and two $5 million notes. The notes plus interest will convert into Regulus common stock in the future if Regulus achieves a minimum level of financing with institutional investors. In addition, we and Alnylam are guarantors of the notes, and if the notes do not convert or if Regulus does not repay the notes by February 2013, we, Alnylam and Regulus may elect to repay the note plus interest with shares of each company’s common stock or cash. Regulus is eligible to receive from GSK up to $144.5 million in development, regulatory and sales milestone payments for each of the four microRNA-targeted drugs discovered and developed as part of the alliance. In May 2009, Regulus received a $500,000 discovery milestone payment from its collaboration with GSK for demonstrating a pharmacological effect in immune cells by specific microRNA inhibition. In addition, Regulus would receive from GSK tiered royalties up to double digits on worldwide sales of drugs resulting from the alliance.

As part of the HCV collaboration, Regulus granted GSK a limited license to develop and commercialize the miR-122 antagonist SPC 3649, if GSK acquires rights to this compound. Regulus will receive development and regulatory milestones as well as royalties if GSK develops and commercializes SPC 3649.

Equity method of accounting

On January 1, 2010, as a result of adopting the new accounting standard for identifying which enterprise has the power to direct activities of a variable interest entity, we prospectively changed the way we account for our variable interest in Regulus. Since we and Alnylam share the ability to impact Regulus’ economic performance, we are no longer the primary beneficiary of Regulus. Beginning in 2010, we deconsolidated Regulus from our consolidated financial statements and began to account for our ownership interest in Regulus using the equity method of accounting. Below is a table summarizing the accounting impact to our balance sheet as of January 1, 2010 as a result of adopting the equity method of accounting (in thousands):

	As Originally Reported		As Adjusted		Effect of Change
Total Assets	$	657,184	$	626,006	$	(31,178	)
Total Liabilities	$	355,119	$	335,524	$	(19,595	)
Total Stockholders’ Equity	$	302,065	$	290,482	$	(11,583	)

In October 2010, sanofi-aventis invested $10 million in Regulus. From this investment sanofi-aventis acquired less than 10 percent ownership of Regulus, leaving us with 46 percent ownership. Under the equity method of accounting, when Regulus issued shares to sanofi-aventis we recorded a gain of $4.7 million and adjusted the carrying value of our investment in Regulus to reflect the increased valuation of Regulus and our new ownership percentage.

Under the equity method of accounting, we are required to suspend recognizing losses if the carrying amount of our investment in Regulus exceeds the amount of funding we are required to provide to Regulus. Since we and Alnylam are guarantors of both of the convertible notes that Regulus issued to GSK, we will continue to recognize losses in excess of our net investment in Regulus up to the principal plus accrued interest we guaranteed, which was $5.3 million at December 31, 2010. If we had been applying the equity method from inception, we would have suspended recognizing our share of Regulus’ losses in 2008 because it would have exceeded the amount we guaranteed under the first GSK convertible note. When we made the $10 million investment in March 2009, we would have recognized all of the suspended losses. ;/p/td/tr/table

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Revenue:
Research and development revenue under collaborative agreements	$ 102,921	$ 108,131	$ 98,853
Licensing and royalty revenue	5,552	13,469	8,337
Total revenue	108,473	121,600	107,190
Expenses:
Research and development	145,160	134,623	106,439
General and administrative	11,669	14,515	13,811
Total operating expenses	156,829	149,138	120,250
Loss from operations	(48,356)	(27,538)	(13,060)
Other income (expense):
Equity in net loss of Regulus Therapeutics Inc.	(2,228)
Investment income	3,370	6,361	11,318
Interest expense	(13,232)	(12,672)	(11,812)
Gain (loss) on investments, net	(713)	2,084	(965)
Loss from continuing operations, before income tax expense	(61,159)	(31,765)	(14,519)
Income tax expense	(92)	(3,191)
Net loss from continuing operations	(61,251)	(34,956)	(14,519)
Discontinued operations:
Loss from discontinued operations		(29)	(8,387)
Gain on sale of Ibis Biosciences, Inc., net of tax		185,657
Net income (loss) from discontinued operations, net of tax		185,628	(8,387)
Net income (loss)	(61,251)	150,672	(22,906)
Net loss attributable to noncontrolling interest in Regulus Therapeutics Inc.		4,394	4,734
Net income (loss) attributable to Isis Pharmaceuticals, Inc. common stockholders	$ (61,251)	$ 155,066	$ (18,172)
Basic and diluted net income (loss) per share:
Net loss from continuing operations attributable to Isis Pharmaceuticals, Inc. common stockholders, Basic (in dollars per share)	$ (0.62)	$ (0.31)	$ (0.10)
Net income (loss) from discontinued operations, Basic (in dollars per share)		1.89	(0.09)
Basic net income (loss) attributable to Isis Pharmaceuticals, Inc. common stockholders (in dollars per share)	(0.62)	1.58	(0.19)
Net loss from continuing operations attributable to Isis Pharmaceuticals, Inc. common stockholders, Diluted (in dollars per share)	(0.62)	(0.31)	(0.10)
Net income (loss) from discontinued operations, Diluted (in dollars per share)		1.89	(0.09)
Diluted net income (loss) attributable to Isis Pharmaceuticals, Inc. common stockholders (in dollars per share)	$ (0.62)	$ 1.58	$ (0.19)
Shares used in computing basic net income (loss) per share (in shares)	99,143	98,109	94,566
Shares used in computing diluted net income (loss) per share (in shares)	99,143	98,109	94,566

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Increase (Decrease) in Stockholders' Equity
Balance	$ 302,065	$ 147,380	$ 59,585
Adoption of accounting standard to deconsolidate Regulus Therapeutics Inc.	(11,583)
Comprehensive income (loss):
Net income (loss)	(61,251)	150,672	(22,906)
Change in unrealized gains (losses), net of $0.8 million of tax expense in 2009	(1,342)	2,819	444
Reclassification adjustment for realized (gains) losses included in net income (loss)	138	(1,648)
Comprehensive income (loss)	(62,455)	151,843	(22,462)
Options exercised and employee stock purchase plan issuances	4,356	13,156	12,551
Warrants exercised			163
Excess tax benefits on share-based compensation		278
Share-based compensation expense	12,159	11,827	15,063
Sale of Ibis to AMI		(32,419)
Issuance of common stock to Genzyme			49,961
Alnylam's capital contribution to noncontrolling interest		10,000	100
AMI's capital contribution to noncontrolling interest			32,419
Balance	244,542	302,065	147,380
Common stock
Increase (Decrease) in Stockholders' Equity
Balance	$ 99	$ 97	$ 87
Balance (in shares)	98,851	97,172	87,239
Comprehensive income (loss):
Options exercised and employee stock purchase plan issuances		$ 2	$ 2
Options exercised and employee stock purchase plan issuances (in shares)	475	1,670	1,510
Warrants exercised			$ 3
Warrants exercised (in shares)	68	9	3,423
Issuance of common stock to Genzyme			$ 5
Issuance of common stock to Genzyme (in shares)			5,000
Balance	$ 99	$ 99	$ 97
Balance (in shares)	99,394	98,851	97,172
Additional paid in capital
Increase (Decrease) in Stockholders' Equity
Balance	$ 985,620	$ 960,361	$ 882,633
Adoption of accounting standard to deconsolidate Regulus Therapeutics Inc.	(1,954)
Comprehensive income (loss):
Options exercised and employee stock purchase plan issuances	4,356	13,154	12,549
Warrants exercised			160
Excess tax benefits on share-based compensation		278
Share-based compensation expense	12,159	11,827	15,063
Issuance of common stock to Genzyme			49,956
Balance	1,000,181	985,620	960,361
Accumulated other comprehensive income
Increase (Decrease) in Stockholders' Equity
Balance	2,153	982	538
Comprehensive income (loss):
Change in unrealized gains (losses), net of $0.8 million of tax expense in 2009	(1,342)	2,819	444
Reclassification adjustment for realized (gains) losses included in net income (loss)	138	(1,648)
Balance	949	2,153	982
Accumulated deficit
Increase (Decrease) in Stockholders' Equity
Balance	(696,150)	(851,216)	(833,044)
Adoption of accounting standard to deconsolidate Regulus Therapeutics Inc.	714
Comprehensive income (loss):
Net income (loss)	(61,251)	155,066	(18,172)
Balance	(756,687)	(696,150)	(851,216)
Regulus
Increase (Decrease) in Stockholders' Equity
Balance	10,343	4,737	9,371
Adoption of accounting standard to deconsolidate Regulus Therapeutics Inc.	(10,343)
Comprehensive income (loss):
Net income (loss)		(4,394)	(4,734)
Alnylam's capital contribution to noncontrolling interest		10,000	100
Balance		10,343	4,737
Ibis
Increase (Decrease) in Stockholders' Equity
Balance		32,419
Comprehensive income (loss):
Sale of Ibis to AMI		(32,419)
AMI's capital contribution to noncontrolling interest			32,419
Balance			32,419
Comprehensive income (loss)
Comprehensive income (loss):
Net income (loss)	(61,251)	150,672	(22,906)
Change in unrealized gains (losses), net of $0.8 million of tax expense in 2009	(1,342)	2,819	444
Reclassification adjustment for realized (gains) losses included in net income (loss)	138	(1,648)
Comprehensive income (loss)	$ (62,455)	$ 151,843	$ (22,462)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Millions	12 Months Ended
	Dec. 31, 2009 USD ($)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Change in unrealized gains, tax expense (in dollars)	$ 0.8

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Operating activities:
Net income (loss)	$ (61,251)	$ 150,672	$ (22,906)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	4,840	3,935	2,868
Amortization of patents	1,961	3,024	1,610
Amortization of licenses	2,376	2,344	2,339
Amortization of premium (discount) on investments, net	5,075	2,026	(225)
Amortization of debt issuance costs	507	507	529
Amortization of 2 5/8 percent convertible subordinated notes discount	7,795	7,107	6,477
Share-based compensation expense	12,159	13,385	15,063
Equity in net loss of Regulus Therapeutics Inc.	2,228
Loss attributed to noncontrolling interest in Ibis Biosciences, Inc.			(2,103)
Gain from sale of Ibis Biosciences, Inc. to Abbott Molecular Inc.		(185,657)
Gain from derivative instruments issued to Abbott Molecular Inc.			(5,326)
Gain from the sale of property, plant and equipment	(72)
(Gain) loss on investments, net	713	(2,084)	965
Non-cash losses related to patents, licensing and property, plant and equipment	1,512	696	1,877
Excess tax benefits on share-based compensation		(278)
Changes in operating assets and liabilities:
Contracts receivable	10,479	(6,778)	1,238
Inventories	284	(17)	(1,323)
Other current and long-term assets	(943)	(955)	(2,657)
Accounts payable	1,325	(3,652)	962
Accrued compensation	394	(4,371)	(3,255)
Income taxes payable	(7,178)	(10,013)
Accrued liabilities	1,013	4,318	4,923
Deferred contract revenue	(46,810)	(82,650)	210,975
Net cash (used in) provided by operating activities	(63,593)	(108,441)	212,031
Investing activities:
Purchases of short-term investments	(530,137)	(776,381)	(483,129)
Proceeds from the sale of short-term investments	577,533	578,886	265,951
Purchases of property, plant and equipment	(13,237)	(13,414)	(13,665)
Proceeds from the sale of property, plant and equipment	185
Proceeds from land sold to BioMed	10,147
Reduction of cash due to deconsolidation of Regulus Therapeutics Inc. upon adoption of a new accounting standard	(16,228)
Acquisition of licenses and other assets	(4,319)	(2,880)	(3,402)
Purchases of strategic investments, net of proceeds received	(250)	(1,349)
Proceeds from the sale of strategic investments		2,848
Net cash (used in) provided by investing activities	23,694	(212,290)	(234,245)
Financing activities:
Net proceeds from issuance of equity	4,356	13,156	12,714
Excess tax benefits on share-based compensation		278
Proceeds from issuance of convertible promissory note to GlaxoSmithKline			5,000
Proceeds from equipment financing arrangement	4,694	6,394	7,048
Principal payments on debt and capital lease obligations	(4,354)	(2,827)	(7,239)
Proceeds from stock purchase by Genzyme Corporation, net of fees			49,962
Proceeds from sale of Ibis Biosciences, Inc to Abbott Molecular Inc.		175,000	40,000
Proceeds from Alnylam's capital contribution to Regulus Therapeutics Inc.		10,000	100
Net cash provided by financing activities	4,696	202,001	107,585
Net (decrease) increase in cash and cash equivalents	(35,203)	(118,730)	85,371
Cash and cash equivalents at beginning of year	105,255	223,985	138,614
Cash and cash equivalents (including cash and cash equivalents classified as assets from discontinued operations of $0, $0 and $6.1 million at December 31, 2010, 2009 and 2008, respectively) at end of year	70,052	105,255	223,985
Supplemental disclosures of cash flow information:
Interest paid	4,889	4,883	4,607
Income taxes paid, net of refund received	7,270	13,205
Supplemental disclosures of non-cash investing and financing activities:
Amounts accrued for capital and patent expenditures	922	$ 870	$ 2,873
Capital lease obligations	$ 770

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash and cash equivalents classified as assets from discontinued operations (in dollars)	$ 0.0	$ 0.0	$ 6.1
Convertible subordinated note interest rate (as a percent)	2.625%	2.625%	2.625%

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2010	Dec. 31, 2009
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	99,393,780	98,850,934
Common stock, shares outstanding	99,393,780	98,850,934