Analyst Conference Summary


Ionis Pharmaceuticals

conference date: November 6, 2018 @ 8:30 AM Pacific Time
for quarter ending: September 30, 2018 (Q3, third quarter 2018)

Forward-looking statements


Basic data (GAAP):

Revenue was $145 million, up 23% sequentially from $117.7 million, and also up 23% from $118 million year-earlier.

Net income was negative $4.6 million, up sequentially from negative $40.4 million, and down from negative $2.6 million year-earlier.

EPS (diluted) was negative $0.03, up sequentially from negative $0.29, and down from negative $0.02 year-earlier.


$1.8 billion or more cash at year end.

Conference Highlights:

CEO Stanley Crooke said " In 2019 and beyond, we are positioned for continued growth bolstered by the addition of TEGSEDI commercial revenue. Beyond our commercial-stage drugs, we have a broad and growing pipeline of innovative programs we are advancing toward the market. We continue to advance our antisense technology, expanding its application to more diseases, both rare and common. An example of this is our LICA technology, which was further validated by the results from the Phase 2 study of AKCEA-APO(a)-LRx, our largest and longest study to date with a LICA drug, which demonstrated significant reductions in Lp(a) and an attractive safety profile. We also continue to expand our Ionis-owned pipeline and our existing relationships with partners."

Commercial revenue was 45% of total revenue in the first nine months of 2018 compared to less than 20% for the same period in 2017, reflecting Ionis' transition to a commercial-stage company.

Expects Spinraza sales to continue to grow globally. Tegsedi launch is now underway and should contribute to Q4 revenue. Prepared if Waylivra is approved in Europe. We are cash accretive and set up for growth in 2019.

Inotersen has been renamed Tegsedi. Volanesorsen has been renamed Waylivra. Tegsedi was approved in the EU for polyneuropathy in adults with hATTR (hereditary transthyretin amyloidosis), and was launched in Q3 2018, starting in Germany. PTC Therapeutics will market Tegsedi in Latin America. Waylivra is on track for approval and launch in the U.S. and EU in 2018.

"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."

Operating expenses increased due to the launches of Tegsedi and Waylivra.

Revenue consisted of: $70 million from Spinraza royalties; $13 million licensing and other royalties; $63 million R&D revenue from collaboration agreements.

Spinraza is approved in the US, EU, Japan and Canada, with reimursement approved in 24 countries. Spinraza sales by Biogen were $468 million, up from $423 million in Q2. Royalties are tiered.

Akcea revenue and expenses, or 75% of them, are included with Ionis's, as consolidated P&L. Except inter-company transactions like licensing fees. Ionis is licensing drugs to Akcea.

Non-GAAP numbers: net income $30.3 million, up 33% sequentially from $22.7 million, and up 60% from $18.9 million year-earlier.

Cash ended at $1.96 billion, down sequentially from $1.98 billion. Debt was $559 million in 1% convertible senior notes.

Inotersen (Tegsedi) was launched in the U.S, EU and Canada for hATTR (hereditary TRR amyloidosis). Believes has significant commercial potential due to its once-per-week dosing. Licensed to Akcea, which is majority owned by Ionis. Launch is going well so far.

Volanesorsen (Waylivra) is under review in the U.S., EU and Canada for FCS (familial chylomicronemia syndrome). It will be marketed by Akcea. Focus is on identifying FCS patients. Could expand label to other diseases, with a trial in progress.

IONIS-HTTRx was granted EU designation for possible accelerated assessment for Huntington's disease. Robust, dose-dependent reductions of mHTT have been observed in people with Huntington's disease treated with IONIS-HTTRx in Phase 2. Partner Roche planning a Phase 3 study.

IONIS-MAPT was granted EU orphan drug designation for frontotemporal dementia.

AKCEA-APO(a)-LRx for CVD (cardiovascular disease) reported positive Phase 2 results in Q3 2018.

Positive Phase 1b/2 data for danvatirsen (IONIS-STAT3-2.5Rx) in combination with durvalumab were presented at ESMO, demonstrating a response rate approximately double that of durvalumab alone, based on previous studies in patients with refractory head and neck cancer. Ionis earned a $17.5 million milestone payment from AstraZeneca. A separate undisclosed oncology program with AstraZeneca earned a $10 million milestone payment.

The Phase 2b study of IONIS-FXIRx in patients with end-stage renal disease on dialysis completed enrollment, with data planned for mid-2019.

Ionis or its partners initiated clinical studies with IONIS-GHR-LRx (Phase 2), IONIS-C9Rx (Phase 1/2), IONIS-FXI-LRx and IONIS-AZ4-2.5-LRx (Phase 1).

New collaboration started with Roche for IONIS-FB-LRx for complement-mediated diseases. Received $75 million upfront payment, could get milestones worth $684 million, and royalties of up to 20%.

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 the future Ionis expects to launch trials of up to 13 new drugs.

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

GAAP Operating expense was $164 million, consisting of $95 million for R&D and $69 million for selling, general and administrative. Operating income was negative $19 million. Investment income was $10 million, interest expense $11 million. Income tax benefit $0.5 million. Net loss attributable to noncontrolling interest in Akcea $16 million.

Investor day will be November 9.

Q&A summary:

Tegsedi rems program logistics? We set up Akcea Connect to help physicians with the rems program. To date there have been no issues. We made efforts to reduce the burden on patients and physicians. No specific data yet, except that there are doctors and patients who are already certified on the program.

Platelet monitoring has been designed to be as convenient as possible. Blood can also be done at home. Believe that is preferable to going to an infusion center [as for the rival drug].

Sod1 knockdown level target? We can measure Sod1 levels, which will be part of the ALS study. Based on preclinical data we expect reductions of 30% to 50%. Data should read out in Q1 2019. The data will determine the regulatory path.

Stat3 program? Our io program is showing a lot of potential. Encouraging results for head & neck cancer. Started studies for bladder cancer and NSCLC. AstraZeneca will determine next steps.

Roche open-label extension study is going very well. They have not announced a timeline for data release. Dosing is monthly at the top dose.

SMA, reaction to Novartis statement yesterday? We think there are future opportunities for combinations of agents, it is hard to know what value gene therapy will have. Given the stated pricing of the Novartis gene therapy, the market for it, compared to Spinraza, may be limited.

Roche oral SMA compound as competition? The more we learn about Spinraza, the better it appears to be about patients. With Biogen we are looking for follow-on products. We don't have much data about the oral drugs yet, so it is hard to predict.

Waylivra timeline? We are late in the process, we have received some questions from regulators.

Talked a bit about the various NASH therapies being investigated.


OpenIcon Analyst Conference Summaries Main Page



More Analyst Conference Pages:



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