Ionis Pharmaceuticals Inc. Sets Itself Up for Growth

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Ionis Pharmaceuticals' (NASDAQ: IONS) third-quarter earnings were a bit humdrum considering partner Biogen (NASDAQ: BIIB) spilled the beans on sales of Spinraza a few weeks ago when it reported its earnings. Nevertheless, the biotech is setting itself up for solid growth with two additional drugs under review by regulators.

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Ionis Pharmaceuticals results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$120.9 million

$110.9 million

9%

Income from operations

$13.9 million

$16.1 million

(14%)

Earnings per share

$0.00

$0.06

N/A

What happened with Ionis Pharmaceuticals this quarter?

  • Third-quarter sales of Spinraza came in at $271 million, up 33% quarter over quarter. The sales netted Ionis $32.9 million in royalties. Revenue also included a $40 million milestone payment for Spinraza gaining pricing approval in Japan. The rest of the revenue was from license and collaboration agreements, which was down year over year, but those tend to be lumpy.
  • Ionis provided more detail on the phase 3 NEURO-TTR trial for inotersen, showing that 50% of treated patients with hereditary TTR amyloidosis had an improvement in their quality of life from baseline. Marketing applications have been filed with the FDA and EU regulators.
  • Akcea Therapeutics (NASDAQ: AKCA), which Ionis spun off in July, has submitted marketing applications in the EU, U.S., and Canada for volanesorsen for the treatment of patients with familial chylomicronemia syndrome. 
  • Ionis made an investment in Seventh Sense, a company developing at at-home test to measure complete blood counts, including platelet levels, which are a concern for patients being treated with inotersen and volanesorsen. Seventh Sense is shooting for launching device in 2019, which should make platelet monitoring more convenient for patients.
  • IONIS-STAT3-2.5Rx, which is being developed by AstraZeneca (NYSE: AZN), produced a nearly 28% overall response rate in patients with head and neck cancer when used in combination with AstraZeneca's Imfinzi. The phase 1b/2 trial is enrolling more patients, but the efficacy looks decent so far considering these are advanced patients.

What management had to say 

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Lynne Parshall, Ionis' chief operating officer, hinted that the company is in talks to find a partner to market inotersen, but left all the options on the table:

We're well along in discussions to complete a commercial partnership, the plan to maximize the commercial potential of inotersen either through a partner, through commercialization ourselves or through combination of the two.

Inotersen is about to go up against Alnylam Pharmaceuticals' (NASDAQ: ALNY) patisiran, which also posted solid phase 3 trial results, but Sarah Boyce, Ionis' chief business officer, said it's still too early tell which drug will come out on top:

Because of the differences in the designs of clinical trials, direct comparisons are challenging between inotersen and patisiran. And we believe both drugs will be used, but we are optimistic that inotersen should command a significant share of the market.

Looking forward

Spinraza sales will be most import for Ionis' future over the next couple of quarters, but with the potential launch of inotersen and volanesorsen next year, the biotech will have a diversified revenue stream, which will help support its pipeline of nearly 40 drug candidates.

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Brian Orelli has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alnylam Pharmaceuticals and Ionis Pharmaceuticals. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.