The Key Reason Ionis Pharmaceuticals, Inc. Gained Another 24% in September

By Markets

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What happened

Shares of Ionis Pharmaceuticals (NASDAQ: IONS), a biopharmaceutical company that utilizes its proprietary antisense drug development platform to tackle a variety of disorders, rocketed higher by 24% during the month of September, according to S&P Global Market Intelligence. The reason for the strong performance can be traced to growing optimism surrounding experimental spinal muscular atrophy (SMA) drug, nusinersen.

So what

Shares of Ionis Pharmaceuticals have demonstrated strength for more than two months following the release of interim data from the ENDEAR trial on Aug. 1. On that date, Ionis and its licensing partner Biogen (NASDAQ: BIIB) announced that nusinersen met the primary endpoint in a pre-specified interim analysis of ENDEAR for infantile-onset SMA. The positive results coerced Biogen to continue moving forward with the possible commercialization of nusinersen by paying Ionis a $75 million licensing fee.

On Sept. 26, Ionis announced that Biogen had completed the rolling submission of a new drug application (NDA) for nusinersen to the Food and Drug Administration. Biogen also applied for priority review, which could shorten the review process by up to four months. On top of its NDA filing with the FDA, Biogen is preparing to submit a marketing authorization application with the European Medicines Agency (EMA) in a few weeks. The EMA's advisory panel recently granted nusinersen an accelerated assessment, which could speed along its entry into more than two dozen European nations.

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If approved, industry analyst Mark Schoenebaum at Evercore ISI believes nusinersen could hit $1.7 billion in peak annual sales by 2025.

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Now what

This could be just the tip of the iceberg for Ionis, and Wall Street is well aware of it. Ionis' antisense platform allows the company to predict how certain therapies should perform well in advance, which has been key in its ability to bring around five new clinical candidates to trial each year. With 30 ongoing clinical studies, Ionis has plenty of potential to hit a home run.

Another under-the-radar reason to like Ionis are its numerous licensing opportunities. Ionis' one dozen licensees can help shoulder some of the burden of clinical trial costs while also injecting Ionis with upfront capital, milestone payments, and eventually royalties on approved products.

The biggest question mark for Ionis remains GlaxoSmithKline and what it'll do with IONIS-TTRrx as a treatment for TTR amyloid cardiomyopathy. Instances of low platelet levels put the kibosh on pursuing phase 3 studies for the time being, with GlaxoSmithKline waiting on data from the NEURO-TTR study. It's quite possible everything will continue as planned next year, but shareholders do need to be aware that a failure here could push Ionis lower.

Even with this risk, I'd encourage risk-tolerant investors to take a closer look at Ionis Pharmaceuticals.

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Sean Williamshas no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.

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