Analyst Conference Summary


Ionis Pharmaceuticals

conference date: August 5, 2020 @ 8:30 AM Pacific Time
for quarter ending: June 30, 2020 (Q2, second quarter 2020)

Forward-looking statements

Overview: On plan.

Basic data (GAAP):

Revenue was $146 million, up 10% sequentially from $133 million, and down 11% from $164 million year-earlier.

Net income was negative $32 million, up sequentially from negative $59 million, and down from negative $1 million year-earlier.

EPS (diluted) was negative $0.23, up sequentially from negative $0.35, and down from negative $0.01 year-earlier.


On track to achieve financial guidance of being meaningfully profitable this year. Expects revenue to increase in second half.

Conference Highlights:

Product and royalty revenue was up y/y. R&D revenue was down $20 million y/y, resulting in the overall revenue decline.

CEO Brett Monia said "Our Phase 3 programs progressed, we advanced our cardio-renal, metabolic and neurological disease franchises and added new medicines to our Ionis-owned pipeline. Together, these catalysts moved us closer to delivering 10 or more marketing applications through 2025, which we expect to result in a number of new commercial medicines. In the second half of this year, we are expanding the reach of our technology in neurological and pulmonary diseases, as studies in sporadic ALS and COPD get underway. We also look forward to proof-of-concept data from additional mid-stage programs." Five Phase 3 programs on are track.

Spinraza sales by Biogen were $495 million, up 1% y/y. New positive data continues to be generated, in patients of all ages.

Waylivra (volanesorsen) was approved in the EU for the treatment of adults with genetically confirmed familial chylomicronemia syndrome (FCS) at high risk for pancreatitis. Launched in Germany by Akcea in Q3 2019. Also available in Austria, Greece, and France, to be followed by other EU nations in 2020. Filed in Brazil. Will refile for marketing authorization with the FDA in 2020. PC Therapeutics wil file for approval in Brazil.

Tegsedi (Inotersen) + Waylivra sales were $16 million, up sequentially from $15 million, and from $10 million year-earlier. Tegsedi is licensed and sold by Akcea. Tegsedi was approved in the EU for polyneuropathy in adults with hATTR (hereditary transthyretin amyloidosis). Now commercial in than 15 countries, with additional EU launches planned for 2020.

Recorded $7 million in milestone revenue in the quarter, but milestones achieved were considerably higher (see below).

Ionis sales and royalties, $ millions
therapy Q2 2020 Q1 2020 Q2 2019 y/y
Spinraza $72 $66 $71 1%
Tegsedi + Waylivra 16 15 10 60%
R&D collaboration 56 49 76 -26%

There is a wave of Ionis medicines heading to Phase 3 this year. We have at least 10 medicines with the potential to enter Phase 3 trials by the end of 2020.

SMA population treatable with Spinraza is larger than originally estimated, more than 45,000 patients in markets already established.

Huntington's and ALS therapies are in Phase 3 studies partnered with Biogen.

A Phase 1 study of ION224 for NASH was initiated in Q1 2020.

Akcea revenue and expenses are included with Ionis's, as consolidated P&L. Ionis owns about 76% of Akcea. Except inter-company transactions like licensing fees. Ionis is licensing drugs to Akcea. Ionis plans to introduce 8 new drugs to the Akcea pipeline in 2020.

Non-GAAP numbers: net income $8 million, up sequentially from negative $15 million, and but down 67% from $24 million year-earlier.

Cash ended at $2.3 billion, down sequentially from $2.4 billion. Debt was $730 million convertible senior notes. Ionis repurchased million shares of common stock for a total purchase price of $ million.

Ionic plans to initiate a Phase 3 study of AKCEA-APOCIII-LRx in patients with FCS some time in 2020. Granted Fast Track designation by FDA.

In Q2 2020 Roche completed enrollment of patients in a Phase 3 study for IONIS-HTTRx (now Tominersen). It had been granted EU designation for possible accelerated assessment for Huntington's disease. Roche released data from the OLE study of IONIS-HTTRx in patients with Huntington's disease and changed dosing to once every four months.

AKCEA-APO(a)-LRx for CVD (cardiovascular disease) initiated its Phase 3 study. Novartis licensed this. Phase 2 results were publishing in the New England Journal of Medicine.

Tofersen (IONIS-SOD1Rx) Phase 3 study continues for ALS patients with SOD-1 mutation.

With Biogen, progressed the IONIS-MAPTRx long-term extension study in patients with Alzheimer's disease and achieved a $12 million milestone payment.

IONIS-C9Rx for the treatment of C9orf72-ALS was granted Fast Track designation by the FDA in Q1 2020.

IONIS-DNM2-2.5Rx for centronuclear myopathies advanced into a Phase 1/2 study in Q1 2020.

Ionis and Akcea initiated the Phase 3 study for the AKCEA-TTR-LRx in Q1 2020.

Ionis is in a collaboration with Biogen to discover and develop a swath of neurological therapies. In Q2 2020 advanced ION464 into a Phase 1/2 study in patients with multiple system atrophy and achieved an $18 million milestone payment. Biogen plans to initiate a first-in-human study of ION541 in patients with sporadic ALS.

In Q2 2020 Licensed ION736 to AstraZeneca for the treatment of cancer and achieved a $13 million license fee.

In Q2 2020 Initiated a Phase 1 study of ION253 for the treatment of immune-mediated GI disease and achieved a $5 million milestone payment from Janssen.

In 2020 Ionis hopes to: Initiate a Phase 3 study of AKCEA-APOCIII-LRx in patients with FCS; Initiate a registration study of ION363 in patients with FUS-ALS; Initiate a Phase 1/2 study of ION541 in patients with sporadic ALS; Initiate a Phase 2 study of IONIS-ENaC-2.5Rx in patients with chronic obstructive pulmonary disease (COPD); Initiate a Phase 2 study of IONIS-FXI-LRx in patients with clotting disorders; Initiate a Phase 2 study of IONIS-HBVRx in patients with hepatitis B virus infection.

Ionis continues to develop technologies that allow RNA therapies to almost any part of the body, including inhaled agents.

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

GAAP Operating expense was $198 million, consisting of $3 million for cost of goods sold; $122 million for R&D and $73 million for selling, general and administrative. Operating loss was $52 million. Other income was $8 million, interest expense $0 million. Income tax benefit $0 million. Net loss attributable to noncontrolling interest in Akcea $12 million.

Q&A summary:

Inhaled CF program, level of knockdown? Each disease program will be unique. Our ENAC program to read out later this year showed a 50% reduction worked, so that is our target. We are confident in our ability to penentrate a CF or COPD lung.

Oral formulation? We look forward to sharing data later this year, with AstraZeneca. We are working on new formulations for other targets.

We expect to continue to grow our R&D revenue over time, including with current parnters like Biogen.

It is too early to say what structure might be put in place for the neuro assets, but we can say we want to retain as much value as possible, by retaining products more or longer. We are at a much better place that when we created Akcea a few years ago. We are better set to commercialize our pipeline ourselves.

Our CF drug should work on all mutations since it addresses a different mechanism of action. It could also help with COPD, so there is a lot of upside potential.

LPa Phase 2b purpose? Because Phase 2 was not conducted in our intended treatment population. It can be done quickly.

Acromegaly program? LICA program. 50% to 60% reduction brings down the target.

We see a lot of interest by other pharma companies in our technology. We do not make deals any more just for money. We look for what they bring to Ionis. We will continue to partner strategically while we build our own pipeline.

We are looking at other indications involving triglycerides. SDS is just the first.

We believe a substantial portion of our pipeline, particularly liver targetted, could work with oral dosing. Gen 2.5 + LICA brings good potency for this. We are looking for reductions comparable to sub-cutaneous reductions.

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 2020 William P. Meyers