Analyst Conference Summary


Ionis Pharmaceuticals

conference date: May 3, 2023 @ 8:30 AM Pacific Time
for quarter ending: March 31, 2023 (Q1, first quarter 2023)

Forward-looking statements

Overview: Qalsody (tofersen) approved by FDA in April.

Basic data (GAAP):

Revenue was $131 million, down 14% sequentially from $152 million, and down 8% from $142 million year-earlier.

Net income was negative $124 million, down sequentially from negative $52 million, and down from negative $65 million year-earlier.

EPS (diluted) was negative $0.87, down sequentially from negative $0.37, and down from negative $0.46 year-earlier.


Reaffirmed for 2023.

Conference Highlights:

CEO Brett Monia said "With Qalsody's approval, it joins Sprinraza as a new groundbreaking medicine to treat a devastating neurological disease, further validating our RNA-targeting therapeutic platform. We also achieved another important milestone with our recent positive eplontersen Phase 3 data. We believe the positive efficacy and safety data, and the attractive self-administered dosing profile, position eplontersen to be an important treatment for ATTRv-PN patients, who today are underserved. We look forward to the first potential approval of eplontersen in the U.S. in December. In addition, we further expanded our industry-leading late-stage pipeline to seven programs across nine indications following the start of GSK's bepirovirsen hepatitis B program. In the second half, we plan to report results from our olezarsen Phase 3 FCS study, which if positive, positions us for our first independent commercial launch." In 2023 Ionis hopes for an FDA approval of Eplontersen. Building a commercial organization for launches. Expects many data readouts in 2023. Expects olezarsen to be a substantial driver of future growth.

Q1 revenue was in line with expectations. Op ex increased for pipeline development and preparing for marketing. Ionis is planning to keep more therapies for itself, which implies a period of further investment.

In Q2 Biogen presented data demonstrating IONIS-MAPTRx (BIIB080) substantially reduced tau protein in patients with early-stage Alzheimer's disease.

In Q1 Ionis discontinued two programs that did not meet its target product profile: cimdelirsen for acromegaly and sapablursen for beta-thalassemia.

In Q1 2023 Ionis increased its balance sheet with over $700 million from royalty monetization and sale and leaseback transactions.

In Q4 2022 submitted the NDA for FDA approval of eplontersen. PDUFA is December 22, 2023. In Q1 2023 presented additional positive data from the Phase 3 NEURO-TTRansform study of eplontersen in patients with polyneuropathy caused by hereditary TTR amyloidosis; on track to file a with partner Astra-Zeneca outside the US this year. Cardiomyopathy trial continues, with enrollment completion expected midyear, but data not expected until 2025.

In April 2023 the FDA approved Tofersen for SOD1 ALS. The EU has accepted an MAA for review. Tofersen is licensed to Biogen.

In Q1 2023 GSK advanced bepirovirsen into Phase 3 development in patients with chronic hepatitis B. Ionis earned a $15 million milestone payment in Q1 from that event. In Q3 2022 GSK presented positive end of study data from the Phase 2b B-Clear study of bepirovirsen, demonstrating potential for functional cures in patients with chronic hepatitis B.

In Q1 2023 partner Biogen initiated a Phase 2 study of IONIS-MAPTRx (BIIB080) in patients with mild cognitive impairment or mild dementia due to Alzheimer's disease

In Q1 2023 partner Roche initiated a Phase 2 study of tominersen in patients with prodromal or early manifest Huntington's disease

In Q1 2023 partner Biogen initiated a Phase 1 study of ION306 (BIIB115) for the treatment of SMA (spinal muscular atrophy) with the potential for long interval dosing

R&D revenue for Q1 2023 included $24 million from AstraZeneca for its share of the global Phase 3 development costs for eplontersen, $20 million from Biogen for advancing several neurology disease programs and $15 million from GSK for advancing bepirovirsen into Phase 3 development. Already in Q2, earned $16 million in a milestone payment from Biogen for Qalsody approval in the U.S.

In Q1 2023 Biogen sales of Spinraza were $443 million, down from $473 million year-earlier. Biogen continues to work to expand sales.

Ionis sales and royalties, $ millions
therapy Q1 2023 Q4 2022 Q1 2022 y/y
Spinraza royalty $50 $67 $54 -7%
Tegsedi + Waylivra 7 7 6 17%
licensing and royalty 11 6 12 -8%
R&D collaboration 63 72 70 -10%

Non-GAAP numbers: net income negative $ million, down sequentially from negative $168 million, and down from negative $ million year-earlier. No non-GAAP EPS given.

Cash ended at $2.3 billion, up sequentially from $2.0 billion. Increase was mainly due to $500 million from Royalty Pharma. Debt was $1.17 billion in convertible senior notes.

Phase 3 donidalorsen study for hereditary angioedema should complete enrollment soon (Q2?)

The Phase 3 Familial chylomicronemia syndrome trial of Olezarsen is fully enrolled with data expected in 2H 2023. Fast Track designation. Also enrolling in sever hypertriglyceridemia trials.

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 $245 million, consisting of $1 million for cost of goods sold; $198 million for R&D and $46 million for selling, general and administrative. Operating income was negative $114 million. Other income was $1 million. Income tax $11 million.

Q&A selective summary:

Discontinued programs? There were no safety issues. It was about efficacy. Acromegaly mechanism did not sufficiently reduce the problem. Sapablursen for beta-thalassemia had shown some early encouraging efficacy data in normal volunteers, but then did not in sick patients. The biology did not translate from preclinical to clinical. Saw some encouraging PB data, but not enough to continue investing in it.

Eplontersen, IRA, out-of-pocket costs? Payer mix is important. About one-third of polyneuropathy patients are Medicare. Rest are private payers, where we will offer some level of copay relief. There is a $2000 cap for Medicare Part D. Will continue to provide access to foundations for patients. Home self administration greatly reduces the burden on patients and physicians.

Pricing eplontersen? Price for best access for patients. We will be first to launch in markets outside the US, so setting prices there.

Olezarsen commercial specifics? Strong connection to downstream events of pancreatitis. It is more potent than Waylivra.

Donidalorsen timeline, etc.? Expect data readout early 2024, filing 2024, launch in 2025. Believes will be best in class, so good for switches and uptake in new patients. Best for minimizing attacks.

BIIB080? Biogen showed Tau reduction. So going into a large Phase 2b study. Question is will it make a difference in clinical outcomes. We have other programs coming up behind the Tau program.

Long-acting v. oral treatments in cardiovasular markets? We look at the value proposition for the specific disease condition. Price appropriately. Our triglyceride reduction is about 3x that of orals, so we think we can offer good value.

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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 2023 William P. Meyers