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Ionis Pharmaceuticals (IONS) Up 3% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Ionis Pharmaceuticals (IONS). Shares have added about 3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ionis Pharmaceuticals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Q2 Earnings & Revenues Fall Short of Estimates

Ionis reported second-quarter 2021 loss per share of 57 cents, which was wider than the Zacks Consensus Estimate of a loss of 56 cents. Loss per share was 18 cents per share in the year-ago period.

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 26 cents per share. In the year-ago quarter, earnings totaled 11 cents per share.

Ionis reported total revenues of $126 million, down 13.7% year over year due to lower R&D revenues. Sales missed the Zacks Consensus Estimate of $139 million.

Quarter in Detail

Ionis earns commercial revenues, primarily royalty payments on net sales of Spinraza and R&D revenues, from partnered medicines.

Commercial revenues were $86 million in the second quarter, down 4.4% year over year.

Commercial revenues from Spinraza royalties were $72 million, flat year over year. Revenues from Tegsedi and Waylivra from distribution fees were $12 million compared with $16 million in the year-ago quarter. License and royalty revenues were $2 million in the quarter same as in the year-ago quarter.

R&D revenues of $40 million declined 28.6% 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. Already in the third quarter, the company has earned $25 million milestone payment from Novartis after it completed 50% enrollment in the phase III Lp(a) HORIZON study of pelacarsen.

Adjusted operating costs rose 2.7% year over year to $154 million in the second quarter mainly driven by higher R&D costs as the company rapidly advances its wholly-owned late-stage pipeline. SG&A expenses decreased in the quarter due to cost efficiencies realized from integrating Akcea and restructuring commercial operations.

2021 Guidance

Ionis maintained its 2021 total revenue guidance of more than $600 million. However, it widened its adjusted net loss expectations to less than $100 million from less than $75 million expected previously.

Adjusted operating expense are expected to be in the range of $710 million to $750 million versus $675 million to $725 million previously to include the cost of the licensing partnership with Bicycle Therapeutics' peptide delivery technology. R&D costs are expected to increase in the second half of the year.


How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -7.81% due to these changes.

VGM Scores

Currently, Ionis Pharmaceuticals has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ionis Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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