Ionis Pharmaceuticals Prepares for Launch

Ionis Pharmaceuticals (NASDAQ: IONS) reported first-quarter earnings with revenue up substantially, but expenses rising even faster, as it prepares to launch two drugs this year.

Ionis Pharmaceuticals results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Change


$144.4 million

$115.8 million


Income from operations

($3.3 million)

$19.5 million


Earnings per share




What happened with Ionis Pharmaceuticals this quarter?

  • Revenue increased thanks to $41 million in royalties from Biogen's (NASDAQ: BIIB) sales of Spinraza, up from just $5 million in the year-ago quarter. Because the tiered royalty rates reset each year, the royalties as a percentage of sales will end up being higher in the quarters to come this year.
  • Despite the higher revenue, earnings turned negative on a GAAP (generally accepted accounting principles) basis: Ionis and Akcea Therapeutics (NASDAQ: AKCA) increased spending in preparation for the launch of Tegsedi for hereditary transthyretin amyloidosis (hATTR), and Waylivra for familial chylomicronemia syndrome, a rare disease that causes the buildup of lipids. Ionis is still the majority owner of Akcea, so its financials are incorporated into Ionis' financials.
  • The Food and Drug Administration pushed back its goal for making a decision on the marketing application for Tegsedi (the new brand name for inotersen) to Oct. 6, 2018. Ionis provided additional data analysis that the FDA needs additional time to review.
  • In April, Ionis signed another deal with Biogen to develop antisense drugs for neurological disorders. In the deal, Ionis gets $1 billion up front, including an equity investment, in exchange for Biogen having first choice of neurology targets on which to exclusively collaborate with Ionis. Biogen is paying for everything beyond the initial discovery stage, with Ionis eligible for royalties and milestone payments as the drugs advance.

What management had to say

Ionis' CFO Beth Hougen laid out the company's plans for its new cash from Biogen: "The best use of our cash is to invest in the technology, in our pipeline, in retaining our drugs longer, building our Ionis-owned pipeline and investing and commercializing drugs out of our own pipeline for our own account."

The delay in an FDA decision for Tegsedi puts it behind competitor Alnylam Pharmaceuticals (NASDAQ: ALNY), which expects to hear from the FDA by Aug. 11 for its hATTR drug patisiran. But Sarah Boyce, the president at Akcea Therapeutics, doesn't think a few months will really matter: "We don't really feel that's going to have any impact and the drugs will be close enough together from a launch perspective. So not really [going] to make any adjustments, and we're very well prepared to be ready to launch following approval."

Looking forward

The FDA is scheduled to hold an advisory committee meeting with outside experts for Waylivra tomorrow, which should give investors a good indication of whether the drug will be approved.

Looking further back in the pipeline, there will be more than six phase 2 readouts this year, offering the potential for plenty of growth in the years to come. It's a good thing Ionis has all that cash to fund more phase 3 trials.

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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, Biogen, and Ionis Pharmaceuticals. The Motley Fool has a disclosure policy.