Analyst Conference Summary


Ionis Pharmaceuticals

conference date: May 4, 2022 @ 8:30 AM Pacific Time
for quarter ending: March 31, 2022 (Q1, first quarter 2022)

Forward-looking statements

Overview: Focus is on the pipeline.

Basic data (GAAP):

Revenue was $142 million, down 68% sequentially from $440 million, but up 27% from $112 million year-earlier.

Net income was negative $65 million, down sequentially from $225 million, and up from negative $90 million year-earlier.

EPS (diluted) was negative $0.46, down sequentially from $1.41, and up from negative $0.64 year-earlier.


On track for prior 2022 guidance.

Conference Highlights:

CEO Brett Monia said "We are off to a strong start this year highlighted by progress in our rich late- and mid-stage pipeline. We remain on track for data from the NEURO-TTRansform study of eplontersen in patients with hereditary ATTR polyneuropathy by mid-year. Assuming positive data, we plan to file for regulatory approval by the end of this year. We recently increased the size and duration of our CARDIO-TTRansform study of eplontersen in patients with ATTR cardiomyopathy. Our aim is to generate even more robust data and ensure a highly positive study outcome to successfully compete in this growing and dynamic market. We also reported positive data from two potential best-in-class medicines. In the Phase 2b ETESIAN study, ION449, our investigational medicine targeting PCSK9, demonstrated robust LDL-C and PCSK9 reductions in statin-treated patients with hypercholesterolemia. ION449 was generally well tolerated in this study. Additional positive data from the Phase 2 study of donidalorsen demonstrated significant improvements in quality of life in people with hereditary angioedema. "

The sequential decrease in revenue was because of $353 million in collaboration R&D revenue during Q4 2021. The y/y increase was due to milestone and other collaboration payments, while sales and royalties declined. Q1 financial results also reflect investments in Ionis's late-stage pipeline and in activities to prepare for launches of eplontersen, olezarsen and donidalorsen,

Donidalorsen (PKK-LRx) Phase 2 data in patients with hereditary angioedema was presented at the ACAAI Annual Meeting the first weekend in November 2022. Phase 3 initiated in Q1 2022 with data expected in 2024.

Spinraza sales by Biogen were $473 million. Over 11,000 patients being treated. New patient starts hit a 2 year high in the US in Q1 2022. Spinraza royalty rate resets each year. Biogen plans to initiate the Phase 3b Ascend study evaluating the potential benefit of an investigational higher dose of nusinersen in children, teens and adults with later-onset SMA who were previously treated with Evrysdi (risdiplam).

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. Approved in Brazil in Q3 2021. Now distributed in Europe by Sobi. Not approved in U.S. Waylivra is under review in Brazil for the treatment of familial partial lipodystrophy (FPL). If approved, it will be the first approved treatment for patients with FPL in Brazil.

Tegsedi (Inotersen) is 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 2022 Q4 2021 Q1 2021 y/y
Spinraza royalty $54 $69 $60 -10%
Tegsedi + Waylivra 6 9 20 -70%
licensing and royalty 12 9 5 140%
R&D collaboration 70 353 27 159%

Non-GAAP numbers: net income negative $39 million, up sequentially from negative $248 million, and up from negative $45 million year-earlier. No non-GAAP EPS given.

Cash ended at $2.05 billion, down sequentially from $2.12 billion. Debt was $1.2 billion in convertible senior notes.

In Q1 2022 donidalorsen data for hereditary angioedema Phase 2 positive data was both published and presented.

In q1 2022 AstraZeneca presented positive data from the Phase 2b ETESIAN study of ION449 (AZD8233) targeting PCSK9 in statin treated patients with dyslipidemia at the ACC annual scientific session.

The Phase 2b study of IONIS-AGT-LRx in patients with treatment-resistant hypertension was fully enrolled in Q1 2022, with data expected in 2H 2022.

In Q1 2022 Biogen initiated a Phase 1/2 study of ION260 (BIIB132) targeting ataxin-3 (ATXN3) in patients with spinocerebellar ataxia type 3 (SCA3), resulting in an $8 million milestone payment.

Results from the eplontersen Phase 3 study in patients with TTR polyneuropathy are due mid-year 2022. Eplontersen is being jointly develped with AstraZeneca. In Q1 2022 increased the study size and duration in the Phase 3 CARDIO-TTRansform study of eplontersen in patients with ATTR cardiomyopathy to generate even more robust data and ensure a highly positive study outcomet. Data from this study are expected in the first half of 2025. Granted orphan drug status in ATTR.

In Q1 2022 Biogen advanced the Phase 1/2 study of ION859 (BIIB094) targeting LRRK2 in patients with Parkinson's disease, resulting in a $10 million milestone payment.

In Q1 2022 Ionis announced the discontinuation of IONIS-C9Rx (BIIB078) due to lack of patient benefit demonstrated in the Phase 1/2 study in patients with C9orf72-ALS.

In Q1 2022 Ionis published positive data from the Phase 2 study of olezarsen in patients with hypertriglyceridemia and either at high risk for or with established cardiovascular disease, in the European Heart Journal. Initiated a study of olezarsen in patients with hypertriglyceridemia to support the broad Phase 3 program. Currently in two Phase 3 studies. This is a very large economic opportunity.

In Q3 2021 reached full enrollment in the Bayer Phase 2b RE-THINc ESRD study of fesomersen (IONIS-FXI-LRx); data expected in the first half of 2022.

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

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

GAAP Operating expense was $199 million, consisting of $4 million for cost of goods sold; $161 million for R&D and $34 million for selling, general and administrative. Operating income was negative $57 million. Other expense was $7 million. Income tax $1 million.

Q&A selective summary:

Protocol change for eplontersen? Wanted to adjust demographics to be competitive in the market. Not driven by events, yet. Not looking at 6-minute walk test for this decision. We are early enough in the study to do this with only a modest delay and expense increase. Enrollment is strong. The change helps us look at critical subgroups, which will help in practice.

9 month data for polyneuropathy, is that sufficient to file in the EU? Will file FDA NDA this year. Full data set will include 18 month data. EU does have a higher bar for approval, could need full data set.

Our PKSK9 drug 449 looks to be the best in class to date, so it could be a real game changer for those suffering hypercholesterolemia. Achieiving LDL targets at very safe doses.

Eligibility for eplontersen study will remain the same, but looking at new regions or prioritization to get fuller subgroup information. AstraZeneca is fully supporting the decision.

Have you thought about reaquiring any rights from Biogen? We have a very strong partnership with Biogen. The Ionis partnered pipeline is likely to become a higher priority for Biogen.

Explained eplontersen joint expense revenue line mechanism.

Eplontersen payers view the population as very sick, willing to approve a combination therapy if that is what a physician decides on. We will price according to clinical value.

Cimdelirsen for acromegaly readout? Need to achieve normalization of IGF1. We have not set a threshold for responder rate. We will have monotherapy and combination data.

While we are advancing just one muscle program into the clinic this year, we have several LICA muscle programs, both our own and with parnters, that are headed to the clinic.

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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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