Ionis (IONS) Q4 Loss Narrower Than Expected, Sales Surge Y/Y
Ionis Pharmaceuticals IONS reported a loss of 6 cents per share for fourth-quarter 2023, which was significantly narrower than the Zacks Consensus Estimate of a loss of 78 cents per share.
The bottom line includes compensation expenses related to equity awards. Excluding these special items, adjusted earnings per share were 12 cents against a loss of $1.18 per share in the year-ago quarter.
Total revenues were $325 million in the fourth quarter, which beat the Zacks Consensus Estimate of $184.0 million. Revenues rose 130% year over year, primarily driven by increased R&D revenues from partnered programs.
Quarter in Detail
Ionis licensed Spinraza to Biogen BIIB, which is responsible for commercializing it. Spinraza is approved for treating spinal muscular atrophy, or SMA, worldwide. Ionis receives royalties from Biogen on Spinraza’s sales. Ionis and Biogen also market Qalsody (tofersen) for amyotrophic lateral sclerosis (ALS) with superoxide dismutase 1 (SOD1) mutations. Qalsody was approved in April 2023.
Commercial revenues were $79 million in the fourth quarter, down 1.3% year over year. Commercial revenues missed the Zacks Consensus Estimate of $95 million.
Commercial revenues from Spinraza royalties were $62 million, down 7.5% year over. Spinraza royalties missed the Zacks Consensus Estimate of $67 million. Other commercial revenues were $17 million compared with $13 million in the year-ago quarter.
Other commercial revenues include revenues from Tegsedi and Waylivra distribution fees and license and royalty revenues. License and royalty revenues also include royalties from Qalsody U.S. product sales.
R&D revenues rose 242% year over year to $246.0 million. Collaborative agreement revenues were $179 million in the quarter compared with $51 million in the year-ago quarter. Joint development revenues for Wainua (eplontersen) from partner AstraZeneca AZN were $67 million in the quarter compared with $21 million in the year-ago quarter.
Ionis and partner AstraZeneca’s Wainua (eplontersen) was approved by the FDA in December for treating patients with hereditary transthyretin-mediated amyloid polyneuropathy, commonly called hATTR-PN or ATTRv-PN. AstraZeneca and Ionis market Wainua for ATTRv-PN in the United States, while AstraZeneca has exclusive rights to commercialize Wainua outside U.S. markets. The launch in the United States is underway. Following the approval in the United States, Ionis received a $50 million milestone payment from AstraZeneca. Applications seeking approval of eplontersen for ATTRv-PN are under review in the EU and some other countries.
Adjusted operating costs declined 9% year over year to $305 million in the quarter, mainly due to lower R&D costs, which offset higher SG&A costs for go-to-market activities for Wainua, olezarsen and donidalorsen.
2024 Guidance
Ionis issued financial guidance for 2024. The company expects total revenues to be more than $575 million in 2024. Adjusted operating loss is expected to be less than $475 million. Adjusted operating expenses are expected to increase in the mid-single-digit range year over year in 2024.
In the past year, Ionis’ shares have risen 18.6% against the industry’s decrease of 2.8%.
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Pipeline Update
Ionis has phase III studies ongoing for nine medicines (internal as well as partnered) across 11 indications.
Some of these candidates are pelacarsen for cardiovascular disease due to elevated Lp(a) levels, olezarsen for familial chylomicronemia syndrome (FCS) and severe hypertriglyceridemia, ulefnersen for ALS, with mutations in the fused in sarcoma gene, or FUS (FUS-ALS); donidalorsen for the prophylactic treatment of hereditary angioedema (HAE), bepirovirsen for chronic hepatitis B (CHB), IONIS-FB-LRx for IgA Nephropathy and zilganersen for Alexander’s disease.
Novartis and GSK GSK are its partners for pelacarsen and bepirovirsen, respectively. GSK and Ionis’ bepirovirsen was granted Fast Track designation by the FDA for CHB in the fourth quarter.
AstraZeneca and Ionis are also developing eplontersen for another form of amyloidosis called cardiomyopathy caused by hereditary TTR amyloidosis (ATTR-CM), which has a larger market than ATTRv-PN. Earlier this month, the FDA granted Fast Track designation to eplontersen for the ATTR-CM indication.
Ionis is advancing and expanding its wholly-owned pipeline to drive future revenue growth. Earlier this month, the FDA granted Orphan Drug designation to its wholly-owned pipeline candidate, olezarsen, for the treatment of FCS, a rare genetic disease. Management intends to file for marketing approval in the United States and EU this year based on results from the BALANCE study. If approved, olezarsen will be Ionis’ first medicine that it will launch independently.
Some of its other wholly owned pipeline candidates are ulefnersen and donidalorsen, which are also in late-stage development. While ulefnersen is being developed for FUS-ALS, donidalorsen has been developed for HAE.
In January 2024, Ionis reported top-line results from the phase III OASIS-HAE study on donidalorsen in HAE patients. The study achieved its primary endpoint of a statistically significant reduction in the rate of HAE attacks in patients treated with the drug once in every four weeks and eight weeks. Based on these results, Ionis is preparing to file a new drug application (“NDA”) for donidalorsen with the FDA. Additionally, Ionis’ partner, Otsuka, is preparing to submit for marketing approval in Europe.
Zacks Rank
Ionis currently has 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 and Consensus
Ionis Pharmaceuticals, Inc. price-consensus-chart | Ionis Pharmaceuticals, Inc. Quote
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