Ionis Pharmaceuticals, Inc. ( IONS Quick Quote IONS - Free Report) reported first-quarter 2021 adjusted loss per share of 32 cents compared with loss of 7 cents per share in the year-ago period.
Adjusted earnings exclude expenses related to the Akcea acquisition and restructured European operations and other items. Including these non-recurring expenses, loss per share was 64 cents per share. The Zacks Consensus Estimate stood at a loss of 48 cents per share.
In October 2020, Ionis had acquired the remaining stake in Akcea Therapeutics and the latter became a wholly owned subsidiary of Ionis. Prior to completing its acquisition of Akcea, Ionis owned approximately 76% of Akcea. In 2020, the company also signed a distribution agreement with Swedish Orphan Biovitrum AB, or Sobi for commercializing Tegsedi and Waylivra in Europe. In the first quarter, the company expanded the distribution agreement to include North American Tegsedi operations. With these deals, its European and North American operations for Tegsedi and Waylivra were restructured from direct sales to a distribution model.
Ionis reported total revenues of $112 million, down 15.8% year over year due to lower R&D revenues and royalties on Spinraza in the quarter. Sales missed the Zacks Consensus Estimate of $133 million.
Ionis shares were down around 5% on Wednesday in response to the disappointing earnings results. This year so far, Ionis’ shares have declined 29.4% compared with the
industry’s decrease of 10.9%.
Quarter in Detail
Ionis has three commercial medicines approved in major global markets, Spinraza, Tegsedi and Waylivra. It has licensed Spinraza to
Biogen ( BIIB Quick Quote BIIB - Free Report) .
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 its own products. While Tegsedi is marketed in both the United States and EU, Waylivra is marketed in European countries.
Ionis earns commercial revenues, primarily royalty payments on net sales of Spinraza and R&D revenues, from partnered medicines.
First-quarter revenues comprised commercial revenues of $85 million, up 1.2% year over year. R&D revenues of $27 million declined 45% from the year-ago quarter due to higher milestone payments in the year-ago quarter. Ionis expects R&D revenues to be higher in the second half as its partnered programs are advancing.
Commercial revenues from Spinraza royalties were $60 million, down 9.1% year over year as Biogen reported softer sales of the drug. Product sales from Tegsedi and Waylivra were $20 million, compared with $15 million in the year-ago quarter. License and royalty revenues were $5 million in the quarter compared with $3 million in the year-ago quarter.
Adjusted operating costs rose 3.9% year over year to $159 million in the first quarter of 2021 mainly driven by higher R&D costs. SG&A expenses decreased in the first quarter.
Ionis has some pivotal phase III studies ongoing for medicines (internal as well as partnered), which include tofersen for SOD1-ALS (amyotrophic lateral sclerosis); pelacarsen for cardiovascular disease due to elevated Lp(a) levels; IONIS-APOCIII-LRx for FCS and IONIS-TTR-LRx for TTR amyloidosis. Its partners, Biogen and
Novartis ( NVS Quick Quote NVS - Free Report) are now engaged in leading global development and commercialization activities related to tofersen, and pelacarsen, respectively after Ionis developed them in early stages of development. Ionis is eligible to receive milestone payments and royalties on sales of these medicines if they are approved. Data from the phase III VALOR study of tofersen in patients with SOD1-ALS is expected later this year.
Ionis is developing IONIS-APOCIII-LRx for FCS and IONIS-TTR-LRx for TTR on its own. Also, Ionis expects to begin a second phase III study of APOCIII-LRx for hypertriglyceridemia in 2021.
Meanwhile, Ionis is advancing IONIS-PKK-LRx for hereditary angioedema or HAE into a phase III study. Also, Ionis initiated pivotal late-stage studies with two wholly-owned neurological disease medicines, ION363 and ION373 for patients with FUS-ALS, and Alexander disease.
In March, Ionis’ partner
Roche ( RHHBY Quick Quote RHHBY - Free Report) announced its decision to stop dosing in a phase III study of tominersen in Huntington’s disease (HD) on the recommendation of an Independent Data Monitoring Committee (iDMC). iDMC’s recommendation was based on potential benefit/risk profile for study participants. Meanwhile, Roche said that dosing will also be paused in the open-label extension study (GEN-EXTEND) of tominersen. Meanwhile, the phase I PK/PD study (GEN-PEAK) of tominersen and the observational Roche HD Natural History Study will continue.
Ionis also has several other candidates in phase II development, which it is developing in partnership with Biogen, Roche or on its own. Ionis is advancing and expanding its wholly-owned pipeline and data from several of these programs is expected in the first half.
Ionis expects to have 12 or more products on the market in 2026 over half of which will be from itswholly-owned pipeline.
Ionis maintained its 2021 total revenue guidance to be more than $600 million while adjusted net loss is expected to be less than $75 million.
Adjusted operating expense are expected to be in the range of $675 million to $725 million as Ionis invests in expanding its wholly-owned pipeline and utility of its technology, and building its commercial capabilities. Ionis expects R&D expenses to increase approximately 25% to 35% in 2021 compared with the last year while SG&A expenses are expected to decrease.
Ionis currently carries a Zacks Rank #4 (Sell).
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