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Ionis (IONS) Q2 Loss Narrower than Expected, Issues Outlook
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Ionis Pharmaceuticals, Inc. (IONS - Free Report) reported a loss of 47 cents per share in the second quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 48 cents but wider than the year-ago loss of 29 cents.
Total revenue in the quarter declined 68.1% year over year to $38.5 million. However, revenues were slightly above the Zacks Consensus Estimate of $38 million. The company’s revenues vary on the basis of the timing of payments under its agreements with other companies.
Quarter in Detail
Research, development & patent expenses increased 14.1% year over year to $77.6 million. General & administrative expenses also rose 26.4% to $9.8 million.
In the reported quarter, Ionis entered into an agreement with Kastle Therapeutics, LLC, under which Kastle acquired the global rights to develop and commercialize Kynamro. Under the terms of the agreement, the company received an upfront payment of $15 million from Kastle.
In the U.S., Kynamro is approved for the treatment of patients with homozygous familial hypercholesterolemia to reduce low-density lipoprotein-cholesterol, apolipoprotein B, total cholesterol and non-high-density lipoprotein-cholesterol, as an adjunct to lipid lowering medications and diet.
Pipeline Update
Ionis has made significant progress with its pipeline. The company is currently evaluating volanesorsen in two phase III studies in familial chylomicronemia syndrome (FCS) and familial partial lipodystrophy (FPL).
We note that Ionis has partnership programs with companies like Biogen Inc. (BIIB - Free Report) and GlaxoSmithKline plc (GSK - Free Report) among others. Under its collaboration with Biogen, the company reported positive results from an interim analysis of a phase III study (ENDEAR) on nusinersen in infantile-onset (consistent with type 1) spinal muscular atrophy (SMA). Marketing applications for nusinersen are anticipated to be filed in the U.S. and the E.U. within the next few months.
On the other hand, IONIS-TTRRx is being developed in collaboration with Glaxo for all forms of transthyretin (TTR) amyloidosis. Data from a phase III study (NEURO-TTR) on IONIS-TTRRx in patients with familial amyloid polyneuropathy (FAP) are expected in the first half of 2017.
2016 Guidance
Ionis projects revenue of above $240 million. Revenues are projected to be slightly higher in the second half of the year compared to the first half. Moreover, with five ongoing phase III studies, the company anticipates expenses to rise modestly in the second half.
Meanwhile, Ionis continues to expect net operating loss in 2016 in the low $60 million range and a cash balance to be above $600 million.
Ionis’ second-quarter results were encouraging with the company reporting a narrower-than-expected loss and revenues beating expectations. Ionis’ agreements with leading health care companies continue to validate its antisense technology and provide the company with funds in the form of upfront, milestone and other payments. We are also positive on the Kastle deal for Kynamro.
The company anticipates several milestone payments during the second half of 2016, along with a number of pipeline updates. We expect investor focus to remain on these updates by the company.
Ionis is a Zacks Rank #2 (Buy) stock. Geron Corp. (GERN - Free Report) is another favorably placed stock in the health care sector with a Zacks Rank #1 (Strong Buy).
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Ionis (IONS) Q2 Loss Narrower than Expected, Issues Outlook
Ionis Pharmaceuticals, Inc. (IONS - Free Report) reported a loss of 47 cents per share in the second quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 48 cents but wider than the year-ago loss of 29 cents.
Total revenue in the quarter declined 68.1% year over year to $38.5 million. However, revenues were slightly above the Zacks Consensus Estimate of $38 million. The company’s revenues vary on the basis of the timing of payments under its agreements with other companies.
Quarter in Detail
Research, development & patent expenses increased 14.1% year over year to $77.6 million. General & administrative expenses also rose 26.4% to $9.8 million.
In the reported quarter, Ionis entered into an agreement with Kastle Therapeutics, LLC, under which Kastle acquired the global rights to develop and commercialize Kynamro. Under the terms of the agreement, the company received an upfront payment of $15 million from Kastle.
In the U.S., Kynamro is approved for the treatment of patients with homozygous familial hypercholesterolemia to reduce low-density lipoprotein-cholesterol, apolipoprotein B, total cholesterol and non-high-density lipoprotein-cholesterol, as an adjunct to lipid lowering medications and diet.
Pipeline Update
Ionis has made significant progress with its pipeline. The company is currently evaluating volanesorsen in two phase III studies in familial chylomicronemia syndrome (FCS) and familial partial lipodystrophy (FPL).
We note that Ionis has partnership programs with companies like Biogen Inc. (BIIB - Free Report) and GlaxoSmithKline plc (GSK - Free Report) among others. Under its collaboration with Biogen, the company reported positive results from an interim analysis of a phase III study (ENDEAR) on nusinersen in infantile-onset (consistent with type 1) spinal muscular atrophy (SMA). Marketing applications for nusinersen are anticipated to be filed in the U.S. and the E.U. within the next few months.
On the other hand, IONIS-TTRRx is being developed in collaboration with Glaxo for all forms of transthyretin (TTR) amyloidosis. Data from a phase III study (NEURO-TTR) on IONIS-TTRRx in patients with familial amyloid polyneuropathy (FAP) are expected in the first half of 2017.
2016 Guidance
Ionis projects revenue of above $240 million. Revenues are projected to be slightly higher in the second half of the year compared to the first half. Moreover, with five ongoing phase III studies, the company anticipates expenses to rise modestly in the second half.
Meanwhile, Ionis continues to expect net operating loss in 2016 in the low $60 million range and a cash balance to be above $600 million.
IONIS PHARMACT Price and EPS Surprise
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Our Take
Ionis’ second-quarter results were encouraging with the company reporting a narrower-than-expected loss and revenues beating expectations. Ionis’ agreements with leading health care companies continue to validate its antisense technology and provide the company with funds in the form of upfront, milestone and other payments. We are also positive on the Kastle deal for Kynamro.
The company anticipates several milestone payments during the second half of 2016, along with a number of pipeline updates. We expect investor focus to remain on these updates by the company.
Ionis is a Zacks Rank #2 (Buy) stock. Geron Corp. (GERN - Free Report) is another favorably placed stock in the health care sector with a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>