Analyst Conference Summary


Ionis Pharmaceuticals

conference date: May 1, 2021 @ 8:30 AM Pacific Time
for quarter ending: March 31, 2021 (Q1, first quarter 2021)

Forward-looking statements

Overview: Revenue decline y/y. ENAC program discontinued, and Roche tominersen program halted, but some good data readouts too.

Basic data (GAAP):

Revenue was $112 million, down 61% sequentially from $290 million, and down 16% from $133 million year-earlier.

Net income was negative $90 million, up sequentially from negative $340 million, and down from $50 million year-earlier.

EPS (diluted) was negative $0.64, up sequentially from negative $2.44, and down from $0.28 year-earlier.


Believes on track to achieve prior 2021 guidance.

Conference Highlights:

The main reason for revenue decreases both sequentially and y/y was a drop in collaboration R&D revenue.

CEO Brett Monia said "In the first quarter, we took important steps to maximize the value of our wholly owned pipeline. We recently initiated pivotal studies with our wholly owned FUS-ALS and Alexander disease programs. We delivered positive results from our IONIS-PKK-LRx program, demonstrating its potential to change the standard of care for patients with hereditary angioedema. We also further strengthened the business and continued executing on our strategic priorities. This summer, we expect data from our IONIS-MAPTRx program in Alzheimer's disease patients. And later this year, we look forward to data from the Phase 3 VALOR study of tofersen in patients with SOD1-ALS. If results from the VALOR study are positive, we expect tofersen to be our next commercial medicine. These key upcoming catalysts, together with our recent achievements, position us well to have 12 or more products on the market in 2026." Expanding manufacturing capacity and R&D capacity in preparation for large market launches.

Akcea was reabsorbed back into Ionis on October 12, 2020.

Spinraza sales by Biogen were $521 million. Some impact from competition, some from pandemic. Over 11,000 patients being treated. Spinraza royalty rate resets each year, which is why there was a sequential decrease.

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.

Ionis sales and royalties, $ millions
therapy Q1 2021 Q4 2020 Q1 2020 y/y
Spinraza $60 $75 $66 -9%
Tegsedi + Waylivra 20 19 15 33%
licensing and royalty 5 2 3 150%
R&D collaboration 27 194 49 -45%

Non-GAAP numbers: net income negative $90 million, down sequentially from $114 million, and down from negative $40 million year-earlier. No non-GAAP EPS given.

Cash ended at $1.82 billion, down sequentially from $1.9 billion. Debt was $788 million convertible senior notes. Ionis repurchased no shares of common stock for a total purchase price of $0 million. In Q1 2021 made a convertible notes transaction ending with $633 million due April 2026 and repurchased 80% of outstanding 1% November 2021 convertibles.

In Q1 2021 advanced ION363 into a Phase 3 trial for patients with FUS-ALS.

In Q1 2021 advanced ION373 into Phase 2 for Alexander disease.

In Q1 2021 advanced ION541 into Phase 2 for ALS, resulting in a $10 million payment from Biogen.

In Q2 2021 Roche reported tominersen data related to the halting of the Phase 3 program.

IONIS-ENAC-2.5Rx Phase 2 study in patients with cystic fibrosis 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. The IONIS-ENAC-2.5Rx program has been discontinued as of May 2021 because of toxicology issues.

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. Also launched Phase 3 Atlas trial for presymptomatic SOD1-ALS.

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

IONIS-PKK-LRx Phase 2 study in patients with hereditary angioedema reported positive topline data in Q1 2021. Advancing into a Phase 3 study. IONIS-PKK-LRx advanced into an investigator-initiated study in hospitalized COVID-19 patients in Brazil in 2020.

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. In Q1 2021 initiated 2 Phase 2 trials: for hypertension uncontrolled with three or more medications, and for chronic heart failure with reduced injection fraction.

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 $204 million, consisting of $3 million for cost of goods sold; $140 million for R&D and $61 million for selling, general and administrative. Operating loss was $92 million. Other income was $2 million. Income tax $0 million.

Expects R&D expense to increase as larger trials progress.

Q&A summary:

Huntington's Roche data, tominersen high dose issue? Data reinforced the drug was not working. Waiting for further analysis.

PKK plan? We will be meeting with regulators re Phase 3 program. But monthly dosing, placebo controlled.

Acromegaly data timeline? Wrapping up study. Data analysis will take us into 2H, will not likely wait for a medical meeting.

ENAC update, toxicology just pulmonary, target related? It has nothing to do with clinical data. CF data will be presented later this month. It will take time to investigate, which makes us want to focus on other targets. The preclinical observations do not appear to be related to ENAC inhibition. We are not slamming the door on ENAC, but we have significantly better targets for these diseases that are moving forward quickly. It is a discontinuation, not a pause.

We believe our neurological platform is the industry leader. All the drugs have shown robust target engagement. SOD1 Phase 2 data gives us high confidence in tofersen and for ALS in general. We are confident we can target all the brain regions involved in ALS and Huntington's, though the caudate is more difficult. Biogen has said the reductions in Tau have been substantial and durable.

We really don't know yet what is causing the toxic preclinical effects in the ENAC program.

Alexander disease efficacy measures? Phase 3 program endpoints not disclosed yet. Lowering TFAP. Preclinical data is very good. About 400 patients globally. It would be the first and only therapy for the disease.

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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.

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