Ionis Pharmaceuticals Inc Begins to Shift Focus

By Markets Fool.com

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Ionis Pharmaceuticals' (NASDAQ: IONS) earnings conference calls are usually focused on what investors can expect from upcoming releases of clinical trial data, but with top-line results in hand showing that nusinersenhelps infants with spinal muscular atrophy, management shifted gears, focusing on getting nusinersenapproved and onto the market.

Ionis Pharmaceuticals results: The only metric that really matters

Metric

Q2 2016 Actuals

Q4 2016 Actuals

Cash Decline for First Half of 2016

Cash, Cash Equivalent, and Short-Term Investments

$664 million

$779 million

$115 million

Data source: Company press release.

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What happened with Ionis Pharmaceuticals this quarter?

  • Affter getting Kynamro back from Sanofi, Ionis licensed the drug back out to Kastle for $15 million. Ionis is eligible for royalties in the mid-to-low teens starting next year. There's also a $10 million payment in three years and the potential for $70 million in milestone payments.
  • While the cash war chest declined quite a bit in the first half -- running multiple phase 3 trials will do that -- Ionis expects higher payments from its partners in the second half of the year, putting it on track to end the year with more than $600 million. There's already $85 million more in the bank that the company received after the close of the second quarter from partners Biogen (NASDAQ: BIIB) and Johnson & Johnson.
  • The patients in the two nusinersen clinical trials will be switched over to an open-label study, which will allow infants that were previously receiving placebo to get nusinersen. That study will then be opened up to other infants, which is great for the infants and their parents, but should also make it easier for Biogen to transition patients to commercial product once the drug is approved.

What management had to say

Biogen said it plans to submit marketing applications -- called a New Drug Application (NDA) in the U.S. and a Marketing Authorization Application (MAA) in Europe -- for nusinersenin the coming months, but Lynne Parshall, Ionis Pharmaceuticals' chief operating officer pointed out the FDA could start reviewing the drug before the application is complete. "Because we believed there was a good chance the interim analysis would be positive, we and Biogen have already substantially completed most of the NDA and MAA dossiers and we plan to use our fast-track status with this program to submit sections of the NDA for review as they are completed which should help shorten the review timeline," Parshall said.

The platelet decline side effect seen withIONIS-TTRRx and volanesorsendisclosed earlier this year seems to be under control. "Our monitoring and management of platelet declines is working. We've had no new cases of serious platelet declines in any of these trials or in any other trial with any of our drugs," Stan Crooke, Ionis' chairman and CEO, said.

Looking forward

In addition to infants with spinal muscular atrophy, Ionis and Biogen are also testing nusinersenin patients with the childhood-onset version of the disease in a trial, dubbed CHERISH. Like the infant trial, CHERISH could be stopped early if it's clear the drug is helping older patients, but, as it did with the infant study, management wasn't willing to offer much in the way of details.

After nusinersen, which looks very likely to get approved given the unmet need for spinal muscular atrophy,Ionis could end up with two more drugs getting to market in short order. Clinical trials forIONIS-TTRRx in patients with transthyretinamyloid polyneuropathy and volanesorsen for patients with severe triglyceride disorders should read out next year. And with more than 25 programs in the pipeline, there's plenty of potential behind the current phase 3 drugs.

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Brian Orelli has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Biogen, Ionis Pharmaceuticals, and Johnson and Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.