Analyst Conference Summary


Ionis Pharmaceuticals

conference date: May 4, 2018 @ 8:30 AM Pacific Time
for quarter ending: March 31, 2017 (Q1, first quarter 2018)

Forward-looking statements

Overview: Continued revenue ramp and optimism on Biogen deal.

Basic data (GAAP):

Revenue was $144.4 million, down 16% sequentially from $172 million, and up 25% from $115.8 million year-earlier.

Net income was negative $1.4 million, down sequentially from $2.7 million, and down from $9.0 million year-earlier.

EPS (diluted) was negative $0.01, down sequentially from $0.02, and down from $0.07 year-earlier.


no specific guidance

Conference Highlights:

CEO Stanley Crooke said "Looking ahead, we are focused on launching Tegsedi this year, assuming approval. As Akcea announced yesterday, the FDA decided they needed additional time to review some of our responses to their standard information requests and, therefore, has extended the review period for Tegsedi. The new PDUFA date is October 6, 2018. We are working closely with the FDA to advance the review of our filing as quickly as possible. This year we also plan to launch Waylivra, assuming approval. The commercialization of these two Ionis drugs will solidify Ionis as a multi-product, profitable company delivering innovative antisense medicines to patients in need."

Elizabeth L. Hougen, Ionis CFO said "With the $2 billion in cash we expect to have on the closing of the Biogen transaction, we have the financial strength to invest in opportunities that we believe will increase shareholder value, such as advancing and expanding our portfolio of drugs, retaining our drugs longer, and building a growing pipeline of Ionis-owned drugs that we commercialize ourselves through commercial affiliates."

Inotersen has been renamed Tegsedi. Volanesorsen has been renamed Waylivra.

"Beginning in Q2 2018, Ionis' R&D revenue will include revenue from the amortization of the $500 million technology access fee and equity premium related to Ionis' expanded strategic research collaboration with Biogen."

The expanded collaboration with Biogen is expected to add about $1 billion in cash in Q2. Biogen will be responsible for all development costs.

Revenue consisted of: $41.1 million from Spinraza royalties; $0.9 million licensing and other royalties; $102.4 million R&D revenue from collaboration agreements.

Spinraza is approved in the US, EU, Japan and Canada. Spinraza sales by Biogen were $364 million in Q1. Royalties are tiered, so Q1 tends to be the low.

Akcea revenue and expenses, or 70% of them, are 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 $27.0 million, up sequentially from $25.1 million, but down from $29.9 million year-earlier . This excludes $28.5 million of non-cash stock-based compensation.

Cash ended at $1.04 billion, up sequentially from $1.02 billion. Debt was $542 million in 1% convertible senior notes.

Inotersen (Tegsedi) 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. The PDUFA date shifted out to October 6, 2018, but no new data was requested. Global launch is planned for mid-2018. Believes has significant commercial potential due to its once-per-week dosing. Licensed to Akcea, which is majority owned by Ionis.

Volanesorsen (Waylivra) is under review in the U.S., EU and Canada for FCS (familial chylomicronemia syndrome). It will be marketed by Akcea. Ionis owns 68% of Akcea. Launch planned for mid-2018. Focus is on identifying FCS patients. Advisory panel meeting on May 10. Could expand label to other diseases, with a trial in progress.

Positive data from Phase 1/2 study of IONIS-STAT3-2.5Rx in combination with AstraZeneca's Imfinzi was reported for people with head and neck cancer.

Ionis earned $60 million licensing two therapies, AZ5 and AZ6, to AstraZeneca for NASH.

Robust, dose-dependent reductions of mHTT observed in people with Huntington's disease treated with IONIS-HTTRx in Phase 2.

Positive Phase 2 clinical data on five LICA drugs for liver diseases reported, demonstrating consistent, positive performance and sustained target reduction with potential for monthly or less frequent dosing.

Ionis has entered a new collaboration with Biogen to discover and develop a swath of neurological therapies..

In 2018 Ionis expects to launch up to 9 new clinical trials. There could be 6 Phase 2 data readouts.

Ionis has a pipeline of 45 potential drugs. A growing number are wholly-owned.

Operating expense was $147.7 million, consisting of $104.1 million for R&D and $43.7 million for selling, general and administrative. Operating income was negative $3.3 million. Investment income was $3.5 million, interest expense $10.9 million. Income tax benefit $0 million. Net loss attributable to noncontrolling interest in Akcea $9.4 million.


Tegsedi review, mechanism for PDUFA extension, nature of questions? Questions focused on broad understanding of the drug. The used the mechanism by calling our submission a major amendment.

Waylivra advisory committee? They will be looking at benefits and risks. We think the benefits are extensive. They will want to know how we monitor patients and determine dosage. They want to understand platelet count excursions and how they are managed. Plus the usual list of concerns.

Use of $2 billion in cash? We want to ramp antisense technology and our pipeline, if possible commercializing some of our drugs rather than licensing them.

Patisiran may now get to market ahead of Tegsedi, any changes in marketing? We don't think that will have an impact on entering the market. We will be prepared to launch. The profiles of the two launches will determine market share, and some patients will prefer Tegsedi.

Oncology drug thoughts? We were able to get robust reductions in the tumor environment with Gen 2.5 chemistry. With generation 3 we are showing dramatic results with AstraZeneca. We expect more data in the second half of 2018.

We go through the Spinraza royalty tiers quickly, so you should see our royalties ramp nicely during the year. Tiers start at 11% each year, the maximum is 15%.

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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 2018 William P. Meyers