Ionis (IONS) Q2 Loss Narrower Than Expected, Revenues Miss
Ionis Pharmaceuticals, Inc. IONS reported second-quarter adjusted loss per share of 23 cents, which was narrower than the Zacks Consensus Estimate of a loss of 28 cents. In the year-ago quarter, Ionis had recorded a loss of 1 cent per share.
Ionis reported total revenues of $146 million, down 11% year over year due to lower R&D revenues and royalties on Spinraza in the quarter. Sales also missed the Zacks Consensus Estimate of $151 million.
Ionis’ shares were down almost 3% on Wednesday after it reported mixed second-quarter results. This year so far, Ionis’ shares have declined 4.8% compared with the industry’s decrease of 4.6%.
Quarter in Detail
Ionis has three commercial medicines approved in major global markets, Spinraza, Tegsedi and Waylivra. It developed all three products and licensed Spinraza to Biogen BIIB and Tegsedi and Waylivra to Akcea Therapeutics AKCA, Ionis’ majority-owned affiliate.
Biogen is responsible for commercializing Spinraza, approved for treating spinal muscular atrophy, or SMA, worldwide. Ionis receives royalties from Biogen on Spinraza’s sales. Tegsedi (hereditary TTR amyloidosis, or hATTR) and Waylivra (genetically confirmed familial chylomicronemia syndrome, or FCS) are commercialized by Akcea.
Ionis earns commercial revenues primarily in the form of royalty payments on net sales of Spinraza and R&D revenues, which are revenues from partnered medicines. Ionis has collaboration deals with leading drugmakers/biotech companies namely AstraZeneca, Bayer, Biogen, Glaxo, J&J, Novartis, Pfizer and Roche for developing and marketing its medicines.
Second-quarter revenues comprised commercial revenues of $90 million, up 2.3% year over year and R&D revenues of $56 million, lower than $76 million in the year-ago quarter.
Commercial revenues from Spinraza royalties were almost flat at $72 million as Biogen reported softer sales of the drug. Product sales from Tegsedi and Waylivra were $16 million, compared with $10 million in the year-ago quarter. License and royalty revenues were $2 million in the quarter
R&D revenues included more than $26 million for advancing medicines within its neurological disease franchise, $13 million from the oncology franchise and more than $10 million from its cardio-renal franchise. R&D revenues from the oncology franchise included a license fee from AstraZeneca AZN for cancer candidate, ION736.
R&D expenses rose 15.1% to $122 million in the quarter. SG&A expenses declined almost 4% year over year to $73 million in the quarter.
Pipeline Update
Ionis has four medicines (internal as well as partnered) in pivotal phase III studies, tominersen for Huntington’s disease; tofersen for SOD1-ALS; AKCEA-APO(a)-LRx for cardiovascular disease due to elevated Lp(a) levels, and AKCEA-TTR-LRx for TTR amyloidosis. Its partners, Biogen, Roche and Novartis are now engaged in leading global development and commercialization activities related to tofersen, tominersen and AKCEA-APO(a)-LRx, respectively after Ionis developed them initially.
Ionis plans to initiate a pivotal phase III study for AKCEA- APOCIII-LRx in patients with FCS later this year. Ionis plans to report additional proof-of-concept data from four or more mid-stage pipeline programs through the rest of the year and plans to file 10 or more new drug applications through the end of 2025.
2020 Guidance
Ionis expects to be meaningfully profitable in 2020. It expects to record higher revenues and earnings in the second half of this year than the first half. R&D revenues are expected to be higher in the second half of 2020, compared with the first half of 2020.
Ionis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ionis Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ionis Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Ionis Pharmaceuticals, Inc. Quote
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