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Ionis reports third quarter 2021 financial results and recent business achievements

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Olezarsen (IONIS-APOCIII-L Rx) Phase 3 CORE study in patients with sHTG initiated

Donidalorsen (IONIS-PKK-L Rx) Phase 2 data to be presented at ACAAI Annual Meeting; Phase 3 initiation on track for year-end

Tofersen Phase 3 VALOR study missed primary endpoint; signs of reduced disease progression observed across multiple secondary and exploratory endpoints

Webcast today, November 3, 2021, at 11:30 a.m. Eastern Time

CARLSBAD, Calif., Nov. 3, 2021 /PRNewswire/ -- Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) today reported financial results for the three and nine months ended September 30, 2021 and recent business achievements.

(PRNewsfoto/Ionis Pharmaceuticals, Inc.)
(PRNewsfoto/Ionis Pharmaceuticals, Inc.)

"Among recent business highlights, we further expanded our broad late-stage pipeline to seven Phase 3 programs now that the olezarsen Phase 3 CORE study in patients with severe hypertriglyceridemia is underway. We were encouraged that while tofersen did not achieve the primary endpoint in the Phase 3 VALOR study, trends favoring tofersen were seen across multiple secondary and exploratory measures of disease progression in patients with SOD1-ALS. We also expanded our LICA platform capabilities by licensing technology from Bicycle Therapeutics," said Brett P. Monia, Ph.D., chief executive officer of Ionis. "We are looking forward to multiple near-term catalysts, beginning with the presentation of donidalorsen Phase 2 data in patients with hereditary angioedema at the ACAAI Annual Meeting this weekend. We anticipate initiating the donidalorsen Phase 3 study before year-end. We also expect multiple catalysts in 2022, including results from the eplontersen Phase 3 study in patients with TTR polyneuropathy mid-year 2022. Furthermore, at our virtual investor day on December 9th, we look forward to outlining commercial preparations for our lead programs ahead of our first potential launch with eplontersen in patients with TTR polyneuropathy in 2023. Based on our anticipated near- and mid-term catalysts, we remain on track to have 12 or more products on the market in 2026."

Third Quarter 2021 Financial Results

  • Third quarter results reflect Ionis' focus on its strategic objectives

  • Well capitalized with cash and investments of $2 billion as of September 30, 2021

"Since our last quarterly update, we further advanced our strategic objectives through investments in our expanding Phase 3 pipeline and technology. We also advanced our commercial readiness initiatives in anticipation of multiple product launches potentially beginning as early as 2023," said Elizabeth L. Hougen, chief financial officer of Ionis. "We remain on track to achieve our 2021 financial guidance driven by increased R&D revenue in the fourth quarter as several of our partner programs advance. We also project increased expenses in the fourth quarter as we continue to invest for growth. Importantly, with $2 billion in cash, we remain well-capitalized with the resources we need to achieve our strategic objectives."

(1)

All non-GAAP amounts referred to in this press release exclude non-cash compensation expense related to equity awards and expenses related to the Akcea Merger and restructured commercial operations and the related tax effects. Please refer to the section below titled "Financial Impacts of Akcea Merger and Restructured Commercial Operations" for a summary of the costs specific to these transactions. Additionally, please refer to the detailed reconciliation of non-GAAP and GAAP measures, which is provided later in this press release.

Third Quarter 2021 Marketed Products Highlights

  • SPINRAZA®: the global market leader for the treatment of spinal muscular atrophy (SMA) patients of all ages

  • TEGSEDI® and WAYLIVRA®: important medicines approved for the treatment of patients with severe rare diseases

Third Quarter 2021 and Recent Events

  • Advancing Ionis' leading cardiovascular and metabolic disease pipeline

  • Addressing substantial unmet medical need with Ionis' broad neurological disease pipeline

  • Investing in expanding the reach of Ionis' technology

2021 Pipeline Milestones(2)

Anticipated Key 2021 Data Readouts

Program

Phase

Anticipated Indication

H1

H2

Donidalorsen

2

Hereditary angioedema (top-line data)


IONIS-AGT-LRx

2

Hypertension


Tominersen

3

Huntington's disease


IONIS-ENAC-2.5Rx

2

Cystic fibrosis


IONIS-MAPTRx

1/2

Alzheimer's disease


Tofersen

3 (VALOR)

SOD1-ALS


Cimdelirsen

2 + OLE

Acromegaly


Donidalorsen

2

Hereditary angioedema (full data)


ION449 (PCSK9)

1 (MAD)

Dyslipidemia


Vupanorsen

2b

sHTG/CVD risk reduction


Anticipated Key 2021 Study Initiations

Program

Phase

Anticipated Indication

H1

H2

SPINRAZA

4 (RESPOND)

SMA, suboptimal gene therapy response


Tofersen

3 (ATLAS)

Presymptomatic SOD1-ALS


ION363

3

FUS-ALS


IONIS-AGT-LRx

2 & 2b

Heart failure & resistant hypertension


ION373

2/3

Alexander disease


ION224

2b

NASH


Olezarsen

3 (CORE)

Severe hypertriglyceridemia (sHTG)


Donidalorsen

3

Hereditary angioedema


SPINRAZA

3b (ASCEND)

SMA, previous risdiplam treatment


ION582

2

Angelman syndrome



√ = achieved • = planned


(2) Timing of partnered program catalysts based on partners' most recent publicly available disclosures

Third Quarter 2021 Financial Results

Revenue

Ionis' revenue was comprised of the following (amounts in millions):



Three months ended


Nine months ended



September 30,


September 30,



2021


2020


2021


2020

Revenue:







Commercial revenue:









SPINRAZA royalties


$67


$74


$199


$212

TEGSEDI and WAYLIVRA revenue, net


15


19


47


51

Licensing and royalty revenue


3


2


9


6

Total commercial revenue


85


95


255


269

R&D revenue:









Amortization from upfront payments


17


19


57


68

Milestone payments


28


44


48


73

License fees


-


-


-


15

Other services


3


2


10


14

Total R&D revenue


48


65


115


170

Total revenue


$133


$160


$370


$439

In the third quarter of 2021, the Company continued to advance its late-stage pipeline, including reaching 50 percent enrollment in the Phase 3 Lp(a) HORIZON study of pelacarsen for which it earned a $25 million milestone payment from Novartis. As its partnered programs advance, the Company expects R&D revenue to increase in the fourth quarter of 2021 compared with the third quarter of 2021.

In the second quarter of 2021, the Company successfully completed the transition of its TEGSEDI operations in North America to Sobi. As a result, the Company's commercial revenue from product sales shifted to distribution fees based on net sales generated by Sobi. In the third quarter of 2021, the Company earned a $4 million milestone payment from PTC Therapeutics when WAYLIVRA was approved in Brazil.

Financial Impacts of Akcea Merger and Restructured Commercial Operations

In October 2020, Ionis completed a merger transaction with Akcea such that following the completion of the merger Akcea became a wholly owned subsidiary of Ionis. Additionally, in December 2020 and April 2021, Ionis restructured its European operations and its North American TEGSEDI operations, respectively, as a result of entering into distribution agreements with Sobi. For the three and nine months ended September 30, 2021, the Company incurred $3 million and $24 million of costs in conjunction with the Akcea merger and restructuring of the Company's commercial operations, respectively. The Company excluded these costs from its non-GAAP amounts for those periods. Please refer to the detailed reconciliation of non-GAAP and GAAP measures that is provided later in this press release.

Operating Expenses

Ionis' operating expenses for the three and nine months ended September 30, 2021 increased compared with the same periods last year driven by an increase in R&D expenses, partially offset by a decrease in SG&A expenses. Higher R&D expenses were primarily driven by the Company's investments in advancing its late-stage wholly owned pipeline, including advancing the Phase 3 program for eplontersen and start-up costs associated with the Phase 3 study for a second indication for olezarsen. Additionally, the Company recognized $35 million in R&D expense in the third quarter of 2021 for licensing Bicycle's technology. Lower SG&A expenses primarily reflect operating efficiencies achieved from integrating Akcea and restructuring the Company's commercial operations. The Company projects its operating expenses to increase in the fourth quarter as it continues to invest for growth.

Net Loss Attributable to Ionis Common Stockholders

Net loss attributable to Ionis' common stockholders for the three and nine months ended September 30, 2021 increased compared with the same periods in the prior year for the reasons discussed above.

Balance Sheet

As of September 30, 2021, Ionis had cash, cash equivalents and short-term investments of $2.0 billion, compared with $1.9 billion as of December 31, 2020. The Company intends to utilize $62 million of its cash to pay the remaining principal balance of its 1 percent convertible notes at maturity in November 2021.

The Company revised its 2020 amounts to reflect the simplified convertible instruments guidance the Company adopted retrospectively on January 1, 2021.

Webcast

Ionis will conduct a webcast today at 11:30 a.m. Eastern time to discuss this announcement and related activities. Interested parties may access the webcast here. A webcast replay will be available for a limited time at the same address.

About Ionis Pharmaceuticals, Inc.

For more than 30 years, Ionis has been the leader in RNA-targeted therapy, pioneering new markets and changing the standards of care with its novel antisense technology. Ionis currently has three marketed medicines and a premier late-stage pipeline highlighted by industry leading neurological and cardiometabolic franchises. Our scientific innovation began and continues with the knowledge that sick people depend on us, which fuels our vision of becoming one of the most successful biotechnology companies.

To learn more about Ionis visit www.ionispharma.com or follow us on Twitter @ionispharma.

Ionis' Forward-looking Statement

This press release includes forward-looking statements regarding Ionis' business, financial guidance and the therapeutic and commercial potential of SPINRAZA (nusinersen), TEGSEDI (inotersen) and WAYLIVRA (volanesorsen) and Ionis' technologies and products in development. Any statement describing Ionis' goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, including those related to the impact COVID-19 could have on our business, and including those inherent in the process of discovering, developing and commercializing medicines that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such medicines. Ionis' forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Ionis' forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Ionis. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Ionis' programs are described in additional detail in Ionis' annual report on Form 10-K for the year ended December 31, 2020, and the most recent Form 10-Q quarterly filing, which are on file with the SEC. Copies of these and other documents are available from the Company.

In this press release, unless the context requires otherwise, "Ionis," "Company," "we," "our" and "us" all refer to Ionis Pharmaceuticals and its subsidiaries.

Ionis Pharmaceuticals® is a trademark of Ionis Pharmaceuticals, Inc. Akcea Therapeutics® is a registered trademark of Akcea Therapeutics, Inc. TEGSEDI® is a registered trademark of Akcea Therapeutics, Inc. WAYLIVRA® is a registered trademark of Akcea Therapeutics, Inc. SPINRAZA® is a registered trademark of Biogen.

IONIS PHARMACEUTICALS, INC.

SELECTED FINANCIAL INFORMATION

Condensed Consolidated Statements of Operations

(In Millions, Except Per Share Data)




Three months ended,


Nine months ended



September 30,


September 30,



2021


2020


2021


2020



(as revised*)


(as revised*)



(unaudited)

Revenue:









Commercial revenue:









SPINRAZA royalties


$67


$74


$199


$212

TEGSEDI and WAYLIVRA revenue, net


15


19


47


51

Licensing and royalty revenue


3


2


9


6

Total commercial revenue


85


95


255


269

Research and development revenue under
collaborative agreements


48


65


115


170

Total revenue


133


160


370


439

Expenses:









Cost of sales


3


3


9


9

Research, development and patent


185


125


464


364

Selling, general and administrative


31


69


148


215

Total operating expenses


219


197


621


588

Loss from operations


(86)


(37)


(251)


(149)










Other income (expense):









Loss on early retirement of debt


-


-


(9)


-

Other income, net


2


5


6


29

Loss before income tax benefit (expense)


(84)


(32)


(254)


(120)










Income tax benefit (expense)


2


(5)


1


(4)










Net loss


($82)


($37)


($253)


($124)

Net loss attributable to noncontrolling interest in Akcea
Therapeutics, Inc.


$-


$13


$-


$34

Net loss attributable to Ionis Pharmaceuticals, Inc.
common stockholders


($82)


($24)


($253)


($90)










Basic and diluted net loss per share


($0.58)


($0.18)


($1.80)


($0.64)

Shares used in computing basic and diluted net loss
per share


141


140


141


139


*The Company revised its 2020 amounts to reflect the simplified convertible instruments guidance the Company adopted retrospectively on January 1, 2021.

IONIS PHARMACEUTICALS, INC.

Reconciliation of GAAP to Non-GAAP Basis:

Condensed Consolidated Operating Expenses, Income (Loss) From Operations, and Net Income (Loss)

(In Millions)




Three months ended

September 30,


Nine months ended

September 30,



2021


2020


2021


2020




(as revised*)


(as revised*)



(unaudited)

As reported research, development and patent
expenses according to GAAP


$185


$125


$464


$364

Excluding compensation expense related to equity awards


(23)


(25)


(72)


(77)

Excluding Akcea merger and restructured commercial
operation costs**


(2)


-


(8)


-

Non-GAAP research, development and patent
expenses


$160


$100


$384


$287


As reported selling, general and administrative
expenses according to GAAP


$31


$69


$148


$215

Excluding compensation expense related to equity awards


(7)


(20)


(26)


(57)

Excluding Akcea merger and restructured commercial
operation costs**


(1)


-


(16)


-

Non-GAAP selling, general and administrative
expenses


$23


$49


$106


$158


As reported operating expenses according to GAAP


$219


$197


$621


$588

Excluding compensation expense related to equity awards


(31)


(46)


(98)


(135)

Excluding Akcea merger and restructured commercial
operation costs**


(3)


-


(24)


-

Non-GAAP operating expenses


$185


$151


$499


$453










As reported loss from operations according to GAAP


($86)


($37)


($251)


($149)

Excluding compensation expense related to equity awards


(31)


(46)


(98)


(135)

Excluding Akcea merger and restructured commercial
operation costs**


(3)


-


(24)


-

Non-GAAP income (loss) from operations


($52)


$9


$(129)


($14)


As reported net loss attributable to Ionis
Pharmaceuticals, Inc. common stockholders
according to GAAP


($82)


($24)


($253)


($90)

Excluding compensation expense related to equity awards
attributable to Ionis Pharmaceuticals, Inc. common
stockholders


(31)


(42)


(98)


(126)

Excluding Akcea merger and restructured commercial
operation costs**


(3)


-


(24)


-

Income tax effect related to compensation expense related
to equity awards attributable to Ionis Pharmaceuticals,
Inc. common stockholders


-


6


-


18

Non-GAAP net income (loss) attributable to Ionis
Pharmaceuticals, Inc. common stockholders
according to GAAP


($48)


$12


($131)


$18


* The Company revised its 2020 amounts to reflect the simplified convertible instruments guidance the Company adopted retrospectively on January 1, 2021.


** In October 2020, Ionis completed a merger transaction with Akcea such that following the completion of the merger Akcea became a wholly owned subsidiary of Ionis.

Reconciliation of GAAP to Non-GAAP Basis

As illustrated in the Selected Financial Information in this press release, non-GAAP operating expenses, non-GAAP income (loss) from operations, and non-GAAP net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders were adjusted from GAAP to exclude compensation expense related to equity awards and costs related to the Akcea merger and restructured commercial operations and the related tax effects. Compensation expense related to equity awards are non-cash. Costs related to the Akcea merger and restructured commercial operations include: severance costs, retention costs and other costs related to commercial operations. Ionis has regularly reported non-GAAP measures for operating results as non-GAAP results. These measures are provided as supplementary information and are not a substitute for financial measures calculated in accordance with GAAP. Ionis reports these non-GAAP results to better enable financial statement users to assess and compare its historical performance and project its future operating results and cash flows. Further, the presentation of Ionis' non-GAAP results is consistent with how Ionis' management internally evaluates the performance of its operations.

IONIS PHARMACEUTICALS, INC.

Condensed Consolidated Balance Sheets
(In Millions)









September 30,


December 31,




2021


2020






(as revised*)




(unaudited)


Assets:






Cash, cash equivalents and short-term investments


$1,987


$1,892


Contracts receivable


9


76


Other current assets


160


162


Property, plant and equipment, net


180


181


Other assets


79


79


Total assets


$2,415


$2,390








Liabilities and stockholders' equity:






Other current liabilities


$120


$183


Current portion of 1% convertible senior notes, net


62


309


Current portion of deferred contract revenue


98


108


0% convertible senior notes, net


618


-


0.125% convertible senior notes, net


542


540


Long-term obligations, less current portion


81


83


Long-term deferred contract revenue


363


424


Total stockholders' equity


531


743


Total liabilities and stockholders' equity


$2,415


$2,390



*The Company revised its 2020 amounts to reflect the simplified convertible instruments guidance the Company adopted retrospectively on January 1, 2021.

Cision
Cision

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SOURCE Ionis Pharmaceuticals, Inc.