Analyst Conference Summary


Ionis Pharmaceuticals

conference date: November 7, 2017 @ 8:30 AM Pacific Time
for quarter ending: September 30, 2017 (Q3, third quarter 2017)

Forward-looking statements


Basic data (GAAP):

Revenue was $120.9 million, up 16% sequentially from $104.2 million, and 9% up from $110.9 million year-earlier.

Net income was negative $1.0 million, up sequentially from negative $11.2 million, but down from $7.4 million year-earlier.

EPS (diluted) was $0.00, up sequentially from negative $0.09, and down from $0.06 year-earlier.


"We remain on track to meet our financial guidance for 2017 of pro forma operating income in the mid $50 million range and more than $950 million in cash."

Conference Highlights:

COO Lynne Parshall said "With sales of over $520 million so far this year, Spinraza is on track to be one of the most successful rare disease drug launches in history. Demand for Spinraza remains strong in the U.S., with Biogen reporting a 75% increase in the number of patients on therapy in the third quarter compared to the second quarter. Notably, last month Biogen reported it had received hundreds of start forms for patients who were not yet on therapy." Lynn will transition to being an advisor in 2018, with other Ionis leadership changes. Stanley Crooke remains CEO.

Spinraza sales outside the U.S. were $73 million in the quarter.

Revenue consisted of: $32.9 million from Spinraza royalties; $0.9 million licensing and other royalties; $87.1 million R&D revenue from collaboration agreements.

Spinraza is approved in the US, EU, Japan and Canada. Spinraza sales by Biogen were $271 million, up 33% sequentially from $203 million. Biogen is doubling the size of its commercial team in the U.S. for Spinraza, to serve a rapidly increasing number of sites. Royalties are tiered.

With GSK, Ionis is preparing to file for approval of inotersen for Familial Amyloid Polyneuropathy before the end of 2017.

Starting in Q3, Akcea revenue and expenses, or 70% of them, will be included with Ionis's, as consolidated P&L. Except inter-company transactions like licensing fees. Ionis is licensing 4 potential drugs to Akcea.

Non-GAAP numbers: net income $16.6 million, up sequentially from $10.1 million, but down from $24.9 million year-earlier21.5. This excludes $ million of non-cash stock-based compensation.

Cash ended at $1.01 billion, up sequentially from $855.7 million. Debt was $525 million in 1% convertible senior notes. Cash included proceeds from the Akcea IPO.

Inotersen is now under review in the U.S. and EU for hATTR (hereditary TRR amyloidosis). Data shows a strong benefit. Believes will gain a significant market share if approved.

Volanesorsen is under review in the U.S., EU and Canada for familial chylomicronemia syndrome. It will be marketed by Akcea. Ionis owns 68% of Akcea.

Ionis has a pipeline of 39 potential drugs.

Operating expense was $107.0 million, consisting of $80.2 million for R&D and $26.8 million for selling, general and administrative. Operating income was $13.9 million. Investment income was $2.8 million, interest expense $10.8 million, other expense 9.8. Income taxes $1.0 million.

Ionis purchased the buildings it leases, which will reduce costs in the long run.


Inotersen partnership discussions, why not go alone? We are well along. There is competition in this indication. We are pleased with the partnering interest. There are a number of possible outcomes; we may still go global ourselves.

Biogen collaboration timelines? The number of drugs in the collaboration makes our participation in their pipeline among their most important. We also have neurological disease drugs for our own account. Together we want to improve our SMA franchise with new drugs. There is potential to expand the relationship with Biogen.

Huntington's data? We will communicate about this program in the near future. Roche and Ionis are enthusiastic. There will eventually be more detailed data at a science conference. We are looking for safety, and early indications of clinical benefit. But given the nature of the disease, mainly safety at first.

Volanesorsen launch prep? Akcea has been identifying potential patients. They have galvanized the FCS community. Educated regulators on the severity of the disease. The natural history study should be published "before long."

Inotersen addressable population? About 10,000 with polyneuropathy. About 40,000 with cardiomyopathy form, in both cases hereditary.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2017 William P. Meyers