Analyst Conference Summary


Ionis Pharmaceuticals

conference date: February 24, 2021 @ 6:00 AM Pacific Time
for quarter ending: December 31, 2020 (Q4, fourth quarter 2020)

Forward-looking statements

Overview: Reabsorbed Akcea. Large revenue decline y/y due to much larger collaboration revenue in 2019; 4% decline in commrercial revenue. Still operating mostly in the red.

Basic data (GAAP):

Revenue was $290 million, up % sequentially from $160 million, and down 41% from $494 million year-earlier.

Net income was negative $340 million, down sequentially from negative $43 million, and down from $184 million year-earlier.

EPS (diluted) was negative $2.44, down sequentially from negative $0.22, and down from $1.28 year-earlier.


Full year 2021 revenue is expected to be over $600 million. Non-GAAP operating expenses expected between $675 and 4725 million. Net loss expected to be less than $75 million.

Conference Highlights:

Exceeded 2020 guidance. See full year results below.

CEO Brett Monia said " Our acquisition of Akcea was an important step in building our commercial capabilities while enabling us to further strengthen our organization. Last year, we also advanced our late-stage pipeline and expanded the utility of our technology. Looking ahead, we expect data from multiple wholly owned programs in the first half of this year, followed by Phase 3 tofersen data in patients with SOD1-ALS in the second half. These key upcoming catalysts, together with our recent pipeline and technology achievements, position us well to have 12 or more products on the market in 2026. "

Akcea was reabsorbed back into Ionis on October 12. This resulted in $402 in related GAAP expenses, much from non-cash tax losses, which were excluded from non-GAAP results. Should result in some expense savings in 2021. In Q4 Ionis earned revenue from multiple sources, including $75 million from Pfizer for advancing vupanorsen.

Spinraza sales by Biogen were $na million. Some impact from competition, some from pandemic. Over 11,000 patients being treated.

Waylivra (volanesorsen) is approved in the EU for the treatment of adults with genetically confirmed familial chylomicronemia syndrome (FCS) at high risk for pancreatitis. Commercially available in Germany, Austria, Greece, and France. Filed in Brazil. Now distributed in Europe by Sobi. Not approved in U.S.

Tegsedi (Inotersen) is licensed and sold by Akcea. Tegsedi was approved in the EU for polyneuropathy in adults with hATTR (hereditary transthyretin amyloidosis). Now commercial in 15 countries, including Portugal, with additional EU launches planned. Now distributed in Europe by Sobi. Expanding into Canada and Latin America.

A court decision resulted in a licensing fee from Alnylam of $41 million in Q4 2020.

Ionis sales and royalties, $ millions
therapy Q4 2020 Q3 2020 Q4 2019 y/y
Spinraza $75 $74 $81 -7%
Tegsedi + Waylivra 19 19 13 46%
licensing and royalty 2 na 6 -66%
R&D collaboration 194 65 394 -51%

Non-GAAP numbers: net income $114 million, up sequentially from $5 million, and but down 46% from $212 million year-earlier. No non-GAAP EPS given.

Cash ended at $1.9 billion, down sequentially from $2.33 billion. Debt was $749 million convertible senior notes. Ionis repurchased no shares of common stock for a total purchase price of $0 million. In Q4 2020 used $545 million of cash to acquire Akcea, but in turn acquired $400 million of cash from Akcea.

In Q3 2020 positive IONIS-ENAC-2.5Rx healthy volunteer results provided support for inhaled antisense medicine delivery. Dosing was completed in the IONIS-ENAC-2.5Rx Phase 2 study in patients with cystic fibrosis with data expected in 1H 2021. Ionis initiated an IONIS-ENAC-2.5Rx Phase 2 study in patients with COPD (chronic obstructive pulmonary disease) in Q4 2020.

Huntington's and ALS therapies are in Phase 3 studies partnered with Biogen. ION541 advanced into Phase 1/2 development in patients with nearly all forms of ALS. Has multiple preclinical programs in development for ALS. ION464 advanced into Phase 1/2 development in patients with multiple system atrophy.

Tofersen (IONIS-SOD1Rx) Phase 3 study continues for ALS patients with SOD-1 mutation with data expected in 2H 2021. Enrollment was completed in Q4 2020.

Vupanorsen positive Phase 2 results were presented at ESC 2020. In Q4 2020 Vupanorsen advanced into Phase 2b development with the initiation of the dose-ranging study in statin-treated patients with dyslipidemia, resulting in a $75 million payment from Pfizer

Enrollment was completed in the IONIS-PKK-LRx Phase 2 study in patients with hereditary angioedema with data expected in 1H 2020. IONIS-PKK-LRx advanced into an investigator-initiated study in hospitalized COVID-19 patients in Brazil.

The Phase 3 study of AKCEA-APOCIII-LRx in patients with FCS began in Q4 2020. Positive Phase 2 results were presented at ESC 2020. Granted Fast Track designation by FDA.

In Q4 2020 Ionis reported positive topline Phase 2 results in IONIS-AGT-Lrx for uncontrolled hypertension. ION904, a follow up with the same target, began its Phase 1 trial.

In Q4 2020 ION449 (AZD8233) for PCSK9 dyslipidemia advanced to Phase 2b.

In Q4 2020 AstraZeneca licensed ION455 for the treatment of nonalcoholic steatohepatitis (NASH), resulting in a $50 million payment.

In Q3 2020 IONIS-FXI-LRx advanced into Phase 2b development in patients with end-stage renal disease

In Q3 2020 IONIS-HBVRx advanced into Phase 2b development in patients with hepatitis B virus infection

The Phase 3 study for the AKCEA-TTR-LRx continued enrollment.

BIIB080 (IONIS-MAPT) Phase 1/2 data showed safety and tau reduction in Alzheimer's in Q4 2020.

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

Ionis expects to initiate 8 Phase 2 or 3 studies in 2021.

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

GAAP Operating expense was $313 million, consisting of $3 million for cost of goods sold; $171 million for R&D and $139 million for selling, general and administrative. Operating loss was $23 million. Other loss was $25 million. Income tax $318 million. Net loss attributable to noncontrolling interest in Akcea $2 million.

Full year 2020 revenue $729 million, down 35% from $1.12 billion in 2019. Net income negative $451 million, down from $294 million. GAAP EPS negative $3.23, down from $2.12 for 2019. Non-GAAP 2020 net income $111 million.

Q&A summary:

Spinraza revenue in 2021? Only impact to commercial revenue is from Europe transition for Tegsedi and Waylivra from product sales to royalty revenue. We remain optimistic about Spinraza, with expansion continuing outside the U.S. On milestone revenue we might overachieve on our guidance. Not disclosing Sobi royalty rate.

ENAC-2.5 CF? We demonstrated robust ENAC levels from aerosol delivery. First CF data will be presented this year, including lung function. First of several aerosol drugs planned.

Hefrep? Study for heart failure should provide proof of concept on biomarkers and functional output.

Pandemic and Spinraza? We anticipate Covid environment to ease, and Biogen said seeing patients already moving back to Spinraza from a competitor.

Tegsedi and Waylivra in Latin America? PTC patnership could result in some contribution from sales late in 2021.

FUS ALS? It is a monogenic hereditary form of ALS we directly target. Moving directly into a registrational study based on preclinical data.

We have new chemistries coming down the pipe.

Phase 2 ENAC COPD trial details? We were looking at a broad spectrum of target genes in CF, leading us to move to COPD. Could report out early 2022, will have 200 patients. Think about ENAC inhibition as a way to rehydrate the lung, similar for COPD.

HAE (hereditory angioedema) debate? The majority of kallikrein is derived from the liver. We are blocking pre-kallikrein. We feel our approach is superior to mopping kallikrein up after it has been made.

AGT? We are aiming for first and best in class. Phase 1 trial will show potency and duration of action.

We have a variety of LICA compounds in development that could treat a variety of tissues. We are working with current and potential partners, which could result in increase R&D revenue. But we will be very selective to bring strategic value to the company.

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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 2021 William P. Meyers