Ionis reports third quarter 2020 financial results and recent business achievements

 

CARLSBAD, Calif., Nov. 4, 2020 /PRNewswire/ -- Ionis Pharmaceuticals, Inc.,  (Nasdaq: IONS) today reported its financial results for the third quarter of 2020 and recent business highlights.

"We took an important step forward in our evolution when we acquired Akcea. This transaction supports our commercial strategy, further enabling us to maximize the value of our Ionis-owned pipeline. As one company, we believe we are stronger and more efficient, with an enhanced ability to achieve even greater future success," said Brett P. Monia, Ph.D., chief executive officer at Ionis. "We made significant progress across our pipeline this year. Recently, we advanced inhaled delivery with IONIS-ENAC-2.5Rx, positioning us to bring new treatment options to patients with pulmonary diseases. We also initiated mid-stage studies for vupanorsen in cardiovascular disease patients and ION541, our medicine to treat nearly all forms of ALS. Additionally, our five Phase 3 studies continue to progress, with our sixth expected to begin by the end of this year. We believe our achievements this year move us closer to delivering 10 or more marketing applications through 2025. Our goal is to bring these medicines to millions of patients around the world."

Third Quarter 2020 Financial Results and Highlights

  • On track to achieve financial guidance of being meaningfully profitable this year
    • Net income of $5 million on a non-GAAP basis and a net loss of $31 million on a GAAP basis for the third quarter
  • Achieved quarter over quarter revenue growth
    • Commercial revenue from SPINRAZA® (nusinersen) royalties of $74 million, in line with the prior quarter
    • Product sales from TEGSEDI® (inotersen) and WAYLIVRA® (volanesorsen) increased more than 15 percent
    • R&D revenue increased more than 15 percent from advancing several partnered programs
  • Maintained a strong balance sheet with cash of $2.3 billion
    • Estimated pro forma cash following the Akcea acquisition of $1.8 billion

"Our acquisition of Akcea further strengthens our business and financial position in numerous ways. We now retain more value from Akcea's rich pipeline and commercial products. We are also able to use Akcea's current cash and future cash flows to advance Ionis' strategic priorities. And beginning next year, we expect to realize meaningful cost synergies as we continue to integrate the two companies," said Elizabeth L. Hougen, chief financial officer of Ionis. "Looking ahead, we are maintaining our 2020 financial guidance driven by the significant revenue and earnings growth we expect in the fourth quarter. We have already earned revenue from multiple sources this quarter, including $75 million from Pfizer for advancing vupanorsen. Importantly, we remain well capitalized with the financial resources to achieve our strategic goals."

All non-GAAP amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of non-GAAP and GAAP measures, which is provided later in this release.

Commercial Medicine Highlights 

  • SPINRAZA: a global foundation-of-care for the treatment of spinal muscular atrophy (SMA) patients of all ages
    • $495 million in worldwide sales in the third quarter
    • More than 11,000 patients were on SPINRAZA treatment worldwide at the end of the third quarter, including patients across commercial, expanded access and clinical trial settings
    • The open-label safety cohort of the DEVOTE study of higher-dose SPINRAZA is fully enrolled and the pivotal randomized treatment cohort will begin enrolling patients next
    • The Phase 4 RESPOND study in patients with a suboptimal clinical response to gene therapy is expected to begin early next year
  • TEGSEDI: the only approved at-home subcutaneous therapy for the treatment of hereditary transthyretin amyloidosis (hATTR) with polyneuropathy in adult patients
    • Commercially available in 15 countries
    • Secured pricing and reimbursement in multiple new EU markets and in Canada in the largest provinces and with multiple private payers
    • Won 2020 Prix Galien USA Award for the Best Biotechnology Product
  • WAYLIVRA: the only approved treatment in the EU for adults with genetically confirmed familial chylomicronemia syndrome (FCS) at high risk for pancreatitis
    • Commercially available in 4 countries
    • Finalized pricing negotiations in additional EU markets, including in the UK

Third Quarter 2020 and Recent Pipeline Highlights

  • Positive Phase 2 vupanorsen and AKCEA-APOCIII-LRx results presented at the European Society of Cardiology annual meeting
  • Advanced multiple programs into key mid-stage studies
    • Vupanorsen advanced into Phase 2b development with the initiation of the TRANSLATE-TIMI 70 dose-ranging study in statin-treated patients with dyslipidemia, resulting in a $75 million payment from Pfizer
    • IONIS-FXI-LRx advanced into Phase 2b development in patients with end-stage renal disease
    • IONIS-HBVRx advanced into Phase 2b development in patients with hepatitis B virus infection
  • Advanced inhaled delivery
    • Positive IONIS-ENAC-2.5Rx healthy volunteer results provided support for inhaled antisense medicine delivery
    • Dosing completed in the IONIS-ENAC-2.5Rx Phase 2 study in patients with cystic fibrosis
  • Advanced the IONIS-PKK-LRx program
    • Proof-of-concept data from the PKK development program in patients with hereditary angioedema were reported in the New England Journal of Medicine
    • Enrollment completed in the IONIS-PKK-LRx Phase 2 study in patients with hereditary angioedema
    • IONIS-PKK-LRx advanced into an investigator-initiated study in hospitalized COVID-19 patients in Brazil
  • Progressed multiple neurological disease medicines under Ionis' broad collaboration with Biogen, earning more than $50 million
    • ION541 advanced into Phase 1/2 development in patients with nearly all forms of ALS
    • ION464 advanced into Phase 1/2 development in patients with multiple system atrophy
    • IONIS-MAPTRx continued to advance in a long-term extension study in patients with Alzheimer's disease 
  • The U.S. FDA granted orphan drug designation to Ionis-owned medicines for people with Alexander disease, β-thalassemia and Lafora diseases  

Upcoming Catalysts 

  • Report clinical data, potentially enabling key programs to advance towards the market:
    • Subcutaneous and orally delivered ION449 targeting PCSK9 at the American Heart Association Scientific Sessions 2020
    • IONIS-AGT-LRx Phase 2 studies in patients with hypertension
    • IONIS-ENAC-2.5Rx Phase 2 study in patients with cystic fibrosis
    • IONIS-GHR-LRx Phase 2 study in patients with acromegaly
    • IONIS-PKK-LRx Phase 2 study in patients with hereditary angioedema
  • Advance the pipeline with numerous study initiations:
    • AKCEA-APOCIII-LRx Phase 3 study in patients with FCS
    • ION363 registrational study in patients with FUS-ALS
    • IONIS-ENAC-2.5Rx Phase 2 study in patients with chronic obstructive pulmonary disease
    • Phase 1/2 studies of Ionis-owned medicines:
      • ION251 for patients with multiple myeloma
      • ION373 for patients with Alexander disease
      • ION716 for patients with Prion diseases
  • Expand TEGSEDI and WAYLIVRA commercial availability in the EU and Latin America
  • Refile the WAYLIVRA application for marketing authorization in the U.S. next year

Revenue

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

   

Three months ended,

 

Nine months ended,

   

September 30,

 

September 30,

   

2020

 

2019

 

2020

 

2019

Revenue:

           

     Commercial revenue:

               

SPINRAZA royalties

 

$74

 

$82

 

$212

 

$212

Product sales, net

 

19

 

12

 

51

 

29

Licensing and royalty revenue

 

2

 

2

 

6

 

11

Total commercial revenue

 

95

 

96

 

269

 

252

R&D Revenue:

               

Amortization from upfront payments

 

19

 

23

 

68

 

100

Milestone payments

 

44

 

12

 

73

 

64

License fees

 

-

 

26

 

15

 

198

Other services

 

2

 

11

 

14

 

15

Total R&D revenue

 

65

 

72

 

170

 

377

Total revenue

 

$160

 

$168

 

$439

 

$629

Operating Expenses

Ionis' operating expenses for the third quarter of 2020 increased compared to the same period in 2019 driven by the Company's investments in advancing the Phase 3 program for AKCEA-TTR-LRx and other medicines in its Ionis-owned pipeline.  

Net Loss Attributable to Noncontrolling Interest in Akcea

Prior to completing its acquisition of Akcea in October 2020, Ionis owned approximately 76 percent of Akcea. The line titled "Net loss attributable to noncontrolling interest in Akcea" on Ionis' statement of operations reflects the portion of Akcea's net income or loss attributable to the other owners of Akcea's common stock. In October 2020, after the acquisition of Akcea closed, Ionis no longer recognizes any noncontrolling interest in Akcea on its statement of operations.  

Net Income (Loss) Attributable to Ionis Common Stockholders

Ionis recognized a net loss attributable to Ionis' common stockholders for the third quarter of 2020 compared to net income in the same period in 2019 primarily due to higher revenue in 2019, including a $150 million license fee Ionis earned from Novartis. Additionally, Ionis' operating expenses increased in 2020 compared to the same period last year as described above.

Balance Sheet

Ionis ended September 2020 with cash, cash equivalents and short-term investments of more than $2.3 billion, compared to $2.5 billion at December 31, 2019. In October 2020, Ionis used approximately $545 million of its cash for the Akcea acquisition.

Webcast

Today, at 11:30 a.m. Eastern Time, Ionis will conduct a live webcast to discuss this earnings release 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.

As the leader in RNA-targeted drug discovery and development, Ionis has created an efficient, broadly applicable, drug discovery platform called antisense technology that can treat diseases where no other therapeutic approaches have proven effective. Our drug discovery platform has served as a springboard for actionable promise and realized hope for patients with unmet needs. We created the first and only approved treatment for children and adults with spinal muscular atrophy as well as the world's first RNA-targeted therapeutic approved for the treatment of polyneuropathy in adults with hereditary transthyretin amyloidosis. Our sights are set on all the patients we have yet to reach with a pipeline of more than 40 novel medicines designed to potentially treat a broad range of diseases, including neurological, cardio-renal, metabolic, infectious, and pulmonary diseases.

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, including the business of Akcea Therapeutics, Inc., Ionis' wholly owned subsidiary. 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 but not limited to those related to our commercial products and the medicines in our pipeline, and particularly 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, 2019, 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" refers 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,

   

2020

 

2019

 

2020

 

2019

             
   

(unaudited)

Revenue:

               

     Commercial revenue:

               

SPINRAZA royalties

 

$74

 

$82

 

$212

 

$212

Product sales, net

 

19

 

12

 

51

 

29

Licensing and royalty revenue

 

2

 

2

 

6

 

11

Total commercial revenue

 

95

 

96

 

269

 

252

    Research and development revenue under
    collaborative agreements

 

65

 

72

 

170

 

377

Total revenue

 

160

 

168

 

439

 

629

Expenses:

               

       Cost of products sold

 

3

 

1

 

9

 

3

    Research, development and patent

 

125

 

104

 

364

 

317

    Selling, general and administrative

 

69

 

60

 

215

 

204

Total operating expenses

 

197

 

165

 

588

 

524

                 

Income (loss) from operations

 

(37)

 

3

 

(149)

 

105

                 

Other income (loss), net

 

(3)

 

1

 

3

 

4

Income (loss) before income tax benefit (expense)

 

(40)

 

4

 

(146)

 

109

                 
                 

Income tax benefit (expense)

 

(3)

 

14

 

1

 

(10)

                 

Net income (loss)

 

$(43)

 

$18

 

$(145)

 

$99

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

 

12

 

8

 

34

 

11

Net income (loss) attributable to Ionis Pharmaceuticals,
Inc. common stockholders

 

$(31)

 

$26

 

$(111)

 

$110

                 

Basic net income (loss) per share

 

$(0.22)

 

$0.19

 

$(0.80)

 

$0.81

Diluted net income (loss) per share

 

$(0.22)

 

$0.18

 

$(0.80)

 

$0.79

Shares used in computing basic net income (loss) per share

 

140

 

141

 

139

 

140

Shares used in computing diluted net income (loss) per share

 

140

 

143

 

139

 

143

 

IONIS PHARMACEUTICALS, INC.
SELECTED FINANCIAL INFORMATION

Condensed Consolidating Statement of Operations

(In Millions)

   
   

Nine months ended,

September 30, 2020

(unaudited)

   

Ionis

 

Akcea

 

Eliminations

 

Ionis
Consolidated

 

Revenue:

     

     Commercial revenue:

                 

SPINRAZA royalties

 

$212

 

$-

 

$-

 

$212

 

Product sales, net

 

-

 

51

 

-

 

51

 

Licensing and royalty revenue

 

6

 

-

 

-

 

6

 

Total commercial revenue

 

218

 

51

 

-

 

269

 

    Research and development revenue under 
     collaborative agreements

 

163

 

7

 

-

 

170

 

    Intercompany revenue

 

8

 

-

 

(8)

 

-

 

Total revenue

 

389

 

58

 

(8)

 

439

 

Expenses:

                 

       Cost of products sold

 

-

 

16

 

(7)

 

9

 

    Research, development and patent expenses

 

297

 

72

 

(5)

 

364

 

    Selling, general and administrative

 

88

 

127

 

-

 

215

 

Profit/ loss share for TEGSEDI
commercialization activities

 

12

 

(12)

 

-

 

-

 

Total operating expenses

 

397

 

203

 

(12)

 

588

 
                   

Loss from operations

 

(8)

 

(145)

 

4

 

(149)

 
                   

Other income, net

 

-

 

3

 

-

 

3

 

Loss before income tax benefit

 

(8)

 

(142)

 

4

 

(146)

 
                   

Income tax benefit

 

1

 

-

 

-

 

1

 
                   

Net loss

 

$(7)

 

$(142)

 

$4

 

$(145)

 

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

 

$-

 

$-

 

$34

 

$34

 

Net loss attributable to Ionis Pharmaceuticals, Inc.
common stockholders

 

$(7)

 

$(142)

 

$38

 

$(111)

 
                     

 

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,

   

2020

 

2019

 

2020

 

2019

   

(unaudited)

As reported research, development and patent
expenses according to GAAP

 

$125

 

$104

 

$364

 

$317

    Excluding compensation expense related to equity awards      

 

(25)

 

(24)

 

(77)

 

(72)

                 

Non-GAAP research, development and patent
expenses

 

$100

 

$80

 

$287

 

$245

 

As reported selling, general and administrative
expenses according to GAAP

 

$69

 

$60

 

$215

 

$204

    Excluding compensation expense related to equity awards      

 

(20)

 

-

 

(57)

 

(39)

                 

Non-GAAP selling, general and administrative
expenses

 

$49

 

$60

 

$158

 

$165

 

As reported operating expenses according to GAAP

 

$197

 

$165

 

$588

 

$524

    Excluding compensation expense related to equity awards      

 

(46)

 

(24)

 

(135)

 

(112)

                 

Non-GAAP operating expenses

 

$151

 

$141

 

$453

 

$412

                 

As reported income (loss) from operations according
to GAAP

 

$(37)

 

$3

 

$(149)

 

$105

    Excluding compensation expense related to equity awards

 

(46)

 

(24)

 

(135)

 

(112)

Non-GAAP income (loss) from operations

 

$9

 

$27

 

$(14)

 

$217

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

 

$(31)

 

$26

 

$(111)

 

$110

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

 

(42)

 

(25)

 

(126)

 

(104)

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

 

6

 

12

 

18

 

25

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

 

$5

 

$39

 

$(3)

 

$189

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 shareholders were adjusted from GAAP to exclude compensation expense related to equity awards and the related tax effect. Compensation expense related to equity awards are non-cash. 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,

 
   

2020

 

2019

 
   

(unaudited)

     

Assets:

         

  Cash, cash equivalents and short-term investments

 

$2,329

 

$2,500

 

  Contracts receivable

 

39

 

63

 

  Other current assets

 

169

 

158

 

  Property, plant and equipment, net

 

182

 

154

 

  Other assets

 

377

 

358

 

     Total assets

 

$3,096

 

$3,233

 
           

Liabilities and stockholders' equity:

         

  Other current liabilities

 

$140

 

$155

 

  Current portion of deferred contract revenue

 

105

 

118

 

  0.125% convertible senior notes

 

450

 

435

 

  1% convertible senior notes

 

289

 

275

 

  Long-term obligations, less current portion

 

76

 

75

 

  Long-term deferred contract revenue

 

430

 

490

 

  Total Ionis stockholders' equity

 

1,383

 

1,471

 

  Noncontrolling interest in Akcea Therapeutics, Inc.

 

223

 

214

 

  Total stockholders' equity

 

$1,606

 

$1,685

 

    Total liabilities and stockholders' equity

 

$3,096

 

$3,233

 
             

 

IONIS PHARMACEUTICALS, INC.
Condensed Consolidating Balance Sheet
(In Millions)

 
   

September 30, 2020

(unaudited)

               

Ionis

   

Ionis

 

Akcea

 

Eliminations

 

Consolidated

                 

Assets:

               

  Cash, cash equivalents and short-term investments

 

$1,963

 

$366

 

$-

 

$2,329

  Contracts receivable

 

23

 

16

 

-

 

39

  Other current assets

 

150

 

28

 

(9)

 

169

  Property, plant and equipment, net

 

176

 

6

 

-

 

182

  Other assets

 

1,125

 

92

 

(840)

 

377

     Total assets

 

$3,437

 

$508

 

$(849)

 

$3,096

                 

Liabilities and stockholders' equity:

               

  Other current liabilities

 

100

 

49

 

(9)

 

140

  Current portion of deferred contract revenue

 

105

 

-

 

-

 

105

  0.125% convertible senior notes

 

450

 

-

 

-

 

450

  1% convertible senior notes

 

289

 

-

 

-

 

289

  Long-term obligations, less current portion

 

62

 

14

 

-

 

76

  Long-term deferred contract revenue

 

432

 

-

 

(2)

 

430

  Total stockholders' equity before noncontrolling interest

 

1,999

 

445

 

(1,061)

 

1,383

  Noncontrolling interest in Akcea Therapeutics, Inc.

 

-

 

-

 

223

 

223

  Total stockholders' equity

 

$1,999

 

$445

 

$(838)

 

$1,606

     Total liabilities and stockholders' equity

 

$3,437

 

$508

 

$(849)

 

$3,096

 

 

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SOURCE Ionis Pharmaceuticals, Inc.

 
 
Company Codes: NASDAQ-NMS:IONS
 

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