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Ionis (IONS) Q2 Earnings & Sales Miss Estimates, Stock Down
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Ionis Pharmaceuticals (IONS - Free Report) reported second-quarter 2022 loss of 74 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 61 cents. In the year-ago period, the company had incurred a loss of 57 cents per share.
The bottom line includes expenses related to the Akcea acquisition and restructured European and North American operations and other items. Excluding these non-recurring expenses, loss per share was 56 cents versus 26 cents in the year-ago quarter.
Ionis reported total revenues of $134 million in the second quarter, up 6.3% year over year due to higher R&D revenues, which made up for lower commercial revenues. Sales however missed the Zacks Consensus Estimate of $148.0 million.
Ionis’ shares were down 3.2% on Tuesday in response to the worse-than-expected earnings announcement. This year so far, Ionis’ shares have risen 45.5% in contrast to the industry’s decrease of 17.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Ionis has licensed Spinraza to Biogen (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.
Ionis earns commercial revenues, primarily royalty payments on net sales of Spinraza and R&D revenues, from partnered medicines.
Commercial revenues were $78 million in the second quarter, down 9.3% year over year.
Commercial revenues from Spinraza royalties were $60 million, down 16.7% year over, due to rising competition in international markets. Revenues from Tegsedi and Waylivra from distribution fees were $10 million compared with $12 million in the year-ago quarter. License and royalty revenues were $8 million in the quarter compared with $2 million in the year-ago quarter.
R&D revenues of $56 million were higher than the year-ago revenues of $40 million, driven by significant partner payments Ionis earned across multiple partnered programs.
Adjusted operating costs rose 26.6% year over year to $195 million in the second quarter, mainly driven by higher R&D costs as the company rapidly advanced its wholly-owned late-stage pipeline. Ionis’ phase III studies doubled over the course of 2021 from three to six. The SG&A expenses decreased in the quarter due to cost efficiencies realized from integrating Akcea and restructuring commercial operations.
2022 Guidance
Ionis maintained its previously issued financial guidance for the year. The company expects total revenues to be more than $575 million in 2022. Its adjusted net loss is expected to be less than $275 million.
Ionis expects revenues in the third quarter to be similar to the second.In the third quarter, Ionis has already earned nearly $45 million from partners Roche and Biogen.
Adjusted operating expense is expected to be in the range of $825 million to $850 million. R&D costs are expected to increase in the range of 25-30% in 2022 compared with 2021. SG&A costs are expected to be in line with 2021.
Pipeline Update
Ionis has phase III studies ongoing for six medicines (internal as well as partnered) across eight indications, which include tofersen for SOD1-ALS (amyotrophic lateral sclerosis); pelacarsen for cardiovascular disease due to elevated Lp(a) levels; olezarsen for familial chylomicronemia syndrome, or FCS and severe hypertriglyceridemia, eplontersen for TTR amyloidosis, ION363 for amyotrophic lateral sclerosis, or ALS, with mutations in the fused in sarcoma gene, or FUS (FUS-ALS) and donidalorsen for hereditary angioedema or HAE.
Biogen, AstraZeneca (AZN - Free Report) and Novartis (NVS - Free Report) are its partners for tofersen, eplontersen and pelacarsen. In June 2022, Ionis announced results from the phase III NEURO-TTRansform study on eplontersen in TTR polyneuropathy. The study met its primary endpoints of serum TTR concentration in mNIS+7 as well as the key secondary endpoint, Norfolk quality of life. The interim analysis of 35-week data revealed that Eplontersen led to highly statistically significant and clinically meaningful changes from baseline in each of these endpoints compared to historical placebo. Based on these results, Ionis and AstraZeneca will file a new drug application (NDA) seeking approval of eplontersen for TTR polyneuropathy later this year. Ionis and AstraZeneca are also developing eplontersen for the treatment of cardiomyopathy in the phase III CARDIO-TTRansform study.
An NDA for Biogen/Ionis’ tofersen in SOD1-ALS is currently under FDA’s priority review and a decision is expected by Jan 25, 2023. The NDA was submitted by Biogen, which had in-licensed the drug from Ionis in 2018.
Ionis’ partner Novartis recently completed enrollment in the phase III cardiovascular outcome study, HORIZON, on their partnered drug, pelacarsen, in patients with established cardiovascular disease and elevated lipoprotein(a), or Lp(a). Top-line data from this study is expected in 2025.
Ionis is advancing and expanding its wholly-owned pipeline to drive future revenue growth and data from several of these programs is expected in 2022.
Ionis is developing olezarsen for FCS and severe hypertriglyceridemia, ION363 for FUS-ALS and donidalorsen for HAE on its own in pivotal late-stage studies. Enrollment in the phase III BALANCE study of olezarsen in patients with FCS is now complete, with data expected in 2023.
Ionis also has several other candidates in phase II development, which it is developing in partnership with Biogen, Roche or on its own. A key wholly-owned candidate is IONIS-AGT-LRx for treatment-resistant hypertension and chronic heart failure with reduced ejection fraction, while a key partnered candidate (with AstraZeneca) is ION449, a PCSK9 LICA medicine to treat dyslipidemia, in phase IIb studies. Data from a phase II study on IONIS-AGT-LRx is expected in the second half.
Image: Bigstock
Ionis (IONS) Q2 Earnings & Sales Miss Estimates, Stock Down
Ionis Pharmaceuticals (IONS - Free Report) reported second-quarter 2022 loss of 74 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 61 cents. In the year-ago period, the company had incurred a loss of 57 cents per share.
The bottom line includes expenses related to the Akcea acquisition and restructured European and North American operations and other items. Excluding these non-recurring expenses, loss per share was 56 cents versus 26 cents in the year-ago quarter.
Ionis reported total revenues of $134 million in the second quarter, up 6.3% year over year due to higher R&D revenues, which made up for lower commercial revenues. Sales however missed the Zacks Consensus Estimate of $148.0 million.
Ionis’ shares were down 3.2% on Tuesday in response to the worse-than-expected earnings announcement. This year so far, Ionis’ shares have risen 45.5% in contrast to the industry’s decrease of 17.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Ionis has licensed Spinraza to Biogen (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.
Ionis earns commercial revenues, primarily royalty payments on net sales of Spinraza and R&D revenues, from partnered medicines.
Commercial revenues were $78 million in the second quarter, down 9.3% year over year.
Commercial revenues from Spinraza royalties were $60 million, down 16.7% year over, due to rising competition in international markets. Revenues from Tegsedi and Waylivra from distribution fees were $10 million compared with $12 million in the year-ago quarter. License and royalty revenues were $8 million in the quarter compared with $2 million in the year-ago quarter.
R&D revenues of $56 million were higher than the year-ago revenues of $40 million, driven by significant partner payments Ionis earned across multiple partnered programs.
Adjusted operating costs rose 26.6% year over year to $195 million in the second quarter, mainly driven by higher R&D costs as the company rapidly advanced its wholly-owned late-stage pipeline. Ionis’ phase III studies doubled over the course of 2021 from three to six. The SG&A expenses decreased in the quarter due to cost efficiencies realized from integrating Akcea and restructuring commercial operations.
2022 Guidance
Ionis maintained its previously issued financial guidance for the year. The company expects total revenues to be more than $575 million in 2022. Its adjusted net loss is expected to be less than $275 million.
Ionis expects revenues in the third quarter to be similar to the second.In the third quarter, Ionis has already earned nearly $45 million from partners Roche and Biogen.
Adjusted operating expense is expected to be in the range of $825 million to $850 million. R&D costs are expected to increase in the range of 25-30% in 2022 compared with 2021. SG&A costs are expected to be in line with 2021.
Pipeline Update
Ionis has phase III studies ongoing for six medicines (internal as well as partnered) across eight indications, which include tofersen for SOD1-ALS (amyotrophic lateral sclerosis); pelacarsen for cardiovascular disease due to elevated Lp(a) levels; olezarsen for familial chylomicronemia syndrome, or FCS and severe hypertriglyceridemia, eplontersen for TTR amyloidosis, ION363 for amyotrophic lateral sclerosis, or ALS, with mutations in the fused in sarcoma gene, or FUS (FUS-ALS) and donidalorsen for hereditary angioedema or HAE.
Biogen, AstraZeneca (AZN - Free Report) and Novartis (NVS - Free Report) are its partners for tofersen, eplontersen and pelacarsen. In June 2022, Ionis announced results from the phase III NEURO-TTRansform study on eplontersen in TTR polyneuropathy. The study met its primary endpoints of serum TTR concentration in mNIS+7 as well as the key secondary endpoint, Norfolk quality of life. The interim analysis of 35-week data revealed that Eplontersen led to highly statistically significant and clinically meaningful changes from baseline in each of these endpoints compared to historical placebo. Based on these results, Ionis and AstraZeneca will file a new drug application (NDA) seeking approval of eplontersen for TTR polyneuropathy later this year. Ionis and AstraZeneca are also developing eplontersen for the treatment of cardiomyopathy in the phase III CARDIO-TTRansform study.
An NDA for Biogen/Ionis’ tofersen in SOD1-ALS is currently under FDA’s priority review and a decision is expected by Jan 25, 2023. The NDA was submitted by Biogen, which had in-licensed the drug from Ionis in 2018.
Ionis’ partner Novartis recently completed enrollment in the phase III cardiovascular outcome study, HORIZON, on their partnered drug, pelacarsen, in patients with established cardiovascular disease and elevated lipoprotein(a), or Lp(a). Top-line data from this study is expected in 2025.
Ionis is advancing and expanding its wholly-owned pipeline to drive future revenue growth and data from several of these programs is expected in 2022.
Ionis is developing olezarsen for FCS and severe hypertriglyceridemia, ION363 for FUS-ALS and donidalorsen for HAE on its own in pivotal late-stage studies. Enrollment in the phase III BALANCE study of olezarsen in patients with FCS is now complete, with data expected in 2023.
Ionis also has several other candidates in phase II development, which it is developing in partnership with Biogen, Roche or on its own. A key wholly-owned candidate is IONIS-AGT-LRx for treatment-resistant hypertension and chronic heart failure with reduced ejection fraction, while a key partnered candidate (with AstraZeneca) is ION449, a PCSK9 LICA medicine to treat dyslipidemia, in phase IIb studies. Data from a phase II study on IONIS-AGT-LRx is expected in the second half.
Ionis currently carries a Zacks Rank #2 (Buy). 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