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Top Picks 2019- Ionis Pharmaceuticals IONS

Ionis Pharmaceuticals (IONS) is my top pick as a conservative biotech recommendation in 2019; the company represents a unique blend with an exciting and broad pipeline of drug development candidates balanced by revenue generation from approved drugs, observes John McCamant, editor of The Medical Technology Stock Letter.

The revenue stream lead by Spinraza royalties helps stabilize the stock price by providing a valuation floor and the pipeline provides for significant upside on positive results or major partnerships. IONS also owns 75% of Akcea Therapeutics (AKCA) which was spun out to focus on commercial opportunities and maximize shareholder value by retaining more of the economics.

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Their huge pipeline of over 30 drug development candidates has allowed the company to strike numerous partnerships with elite biotech and pharma companies while also retaining full rights to many drug candidates.

Potential catalysts for IONS in 2019 include both better than expected revenue from newly approved drugs (Tegsedi or Waylivra) or positive clinical data from their broad pipeline. IONS is also a prime takeover candidate with a broad antisense technology platform backed by dominant IP that would fit nicely into most Bio Bio or Pharma Cos.  

IONS’ recent analyst day provided an excellent opportunity for the company to show off their impressive pipeline of over 30 drug development candidates. In our view, their continued progress with both their neurology drug development candidates and the next generation LICA platform which will use significantly less drug (log orders) to achieve its affect than the previous generation technology was clearly on display. 

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Importantly, LICA offers significantly improved safety for systemically delivered drug candidates opening up huge opportunities for IONS. To date, IONS one blockbuster drug Spinraza which is delivered intrathecally (spinal tap) avoiding any potential systemic side effects. Overall, we remain impressed by the breadth of the pipeline.

We are also impressed with the company’s ability to execute on multiple fronts as there are at least 10 programs set to enter pivotal trials over the next two years. Four of these should occur in 2019 including neuro products IONIS-HTTRx in Huntington’s disease (HD) and IONIS-SOD1Rx in ALS and LICA drug candidates for TTR amyloidosis and Lp(a).

Roche Holdings (RHHBY) is the company’s development partner for IONIS-HTT and the partners have guided for the initiation of two important clinical trials in HD patients late by early 2019.  The first will be a natural history trial to measure the correlation between mHTT protein and clinical measures of HD in 100 symptomatic HD patients.

IONS recently announced after a positive interim analysis of the Phase I/II trial of intrathecal IONIS-SOD1Rx (BIIB067) in patients with amyotrophic lateral sclerosis (ALS), Biogen (BIIB) has exercised its option to license and develop the drug. This announcement is a significant positive for IONS as it both validates IONS’ technology platform and improves their near-term pipeline.

Biogen is no stranger to IONS as they have already developed one blockbuster drug together in Spinraza that is delivered intrathecally avoiding any potential systemic side effects.  The partners will advance IONIS-SODRx into pivotal Phase III development later in 2019 as the Phase I/II data was just released. 

In our view, 2019 will be a big year for IONS with a slew of upcoming potential catalysts. The list of potential catalysts for IONS next year includes both better than expected revenue from newly approved drugs (Tegsedi or Waylivra) or positive clinical data from their broad pipeline.

IONS is also a prime takeover candidate with a broad antisense technology platform backed by dominant IP that would fit nicely into most Bio or Pharma Cos. Lastly, by starting so many pivotal clinical trials in 2019 the company is in position for a string of pivotal readouts over the next few years that should completely transform the company into a biotech powerhouse.

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