SPINRAZA launch one of the most successful in rare disease history FY 2017 GAAP operating income of $25M; FY 2017 pro forma operating income of $111M 2017 year-end cash over $1B
CARLSBAD, Calif., Feb. 27, 2018 /PRNewswire/ -- Ionis Pharmaceuticals, Inc.. (NASDAQ: IONS) today reported its financial results for the fourth quarter and full year 2017 and highlighted recent progress in advancing its business and drug pipeline. “In 2017, our accomplishments were remarkable. The historic launch of SPINRAZA and the acceptance of our regulatory filings for inotersen and volanesorsen, which set up potential launches of these two drugs in 2018, combined with our strong financial performance, demonstrate our ability to execute across all areas of our business. We also advanced our pipeline of novel drugs with positive data readouts from 11 clinical studies, including five with our LICA drugs, and introduced eight new drugs to the pipeline, further highlighting the broad capabilities and potential of our antisense technology platform,” said Stanley T. Crooke, M.D., Ph.D., chairman of the board and chief executive officer. “Looking ahead, we believe 2018 could be an important turning point for Ionis. Most important will be the launch of inotersen and volanesorsen, if approved. We also expect to report data from at least six Phase 2 studies, initiate at least five Phase 2 programs and report data from multiple proof-of-concept clinical studies. These important events build on our recent momentum, solidifying Ionis as a multi-product, commercial company delivering innovative antisense medicines to patients in need,” continued Crooke. “As we advance our pipeline of antisense drugs and achieve important milestones in our collaborations, we expect to continue to provide substantial value to our shareholders and the patients we serve.” Financial Results and Highlights
“2017 was our first year of commercial revenue in which we earned $113 million in SPINRAZA royalties. It was also our sixth consecutive year of revenue growth, driven by our focus on high-value, innovative drugs like SPINRAZA and multiple other exciting programs in our pipeline,” said Elizabeth L. Hougen, chief financial officer of Ionis. Our goal is to be a multi-product, sustainably profitable company. Consistent with this goal, we project 2018 will be our third consecutive year of pro forma operating profitability even as we prepare to launch two new drugs. For 2018, we are projecting R&D expenses of $360 million to $390 million and SG&A expenses of $180 million to $210 million both on a pro forma basis. We project that we will end 2018 with more than $800 million in cash.” All pro forma amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of pro forma and GAAP measures, which is provided later in this release. Recent Pipeline and Technology Highlights
“In 2017, we and our partners advanced key programs in all of our therapeutic areas, including cardiometabolic, oncology, neurology and, severe and rare disease. Of the eight new drugs we added to the pipeline, six were drugs that use our more potent LICA technology or Generation 2.5 chemistry, and two were drugs to treat neurodegenerative disorders. We also added to our pipeline our second orally delivered, locally acting drug for a GI autoimmune disease. These achievements demonstrate the success of our wholly owned and partnered programs,” said Brett P. Monia, Ph.D., chief operating officer and senior vice president of antisense drug discovery and translational medicine at Ionis Pharmaceuticals. “Looking ahead, we plan to pursue only those partnerships with infrastructure and resources that complement our own. Simultaneously, we plan to continue to build our wholly owned pipeline of drugs to treat patients with rare and serious diseases.” Expected Events Through Mid-2018
Revenue Ionis’ revenue for the fourth quarter and full year 2017 was $172.3 million and $507.7 million, compared to $160.3 million and $346.6 million for the same periods in 2016. Ionis’ revenue in 2017 consisted of the following: Commercial Revenue:
R&D Revenue:
Ionis’ R&D revenue may fluctuate quarterly based on the nature and timing of payments under agreements with its partners and consists primarily of revenue from the amortization of upfront fees, milestone payments and license fees. At the beginning of 2018, Ionis adopted the new revenue recognition accounting standard on a retrospective basis, which means that starting with the first quarter, Ionis will begin showing all periods presented using the new standard. The Company does not anticipate that there will be a significant impact to its previously reported revenue. Under the new standard, Ionis’ revenue for 2017 will increase by approximately 3%. Operating Expenses Operating expenses for the fourth quarter and full year 2017 on a GAAP basis were $174.0 million and $483.1 million, respectively, and on a pro forma basis were $151.7 million and $397.2 million, respectively. This is compared to GAAP operating expenses of $119.2 million and $392.9 million and pro forma operating expenses of $104.0 million and $320.8 million for the same periods in 2016. Operating expenses increased in 2017, compared to 2016, principally due to higher SG&A expenses as Ionis prepares to commercialize volanesorsen and inotersen in 2018. The Company’s SG&A expenses also increased in 2017 compared to 2016 because of fees it owes under its in-licensing agreements related to SPINRAZA. Net Income (Loss) Ionis reported a net loss of $4.7 million and $17.3 million for the fourth quarter and full year 2017, respectively, compared to net income of $25.9 million and a net loss of $86.6 million for the same periods in 2016, all according to GAAP. On a pro forma basis, Ionis reported net income of $17.7 million and $68.7 million for the fourth quarter and full year 2017, respectively, compared to net income of $41.0 million and a net loss of $14.4 million for the same periods in 2016. Ionis’ GAAP and pro forma net loss improved for 2017 compared to 2016 primarily due to the addition of commercial revenue from SPINRAZA royalties and increased R&D revenue. Additionally, in 2017, Ionis recorded two non-cash, non-recurring items in other expenses, which contributed to the Company’s net loss. These two items were the previously capitalized fair value of the potential premium Ionis would have received from Novartis if Akcea had not completed its IPO and the loss the Company recognized on the purchase of its primary R&D facility. In 2016, Ionis recorded a $4.0 million non-cash loss related to the early repurchase of its 2¾ percent convertible senior notes, which contributed to the Company’s net loss for 2016. Net Loss Attributable to Noncontrolling Interest in Akcea Therapeutics, Inc. Akcea sold shares of its common stock to third parties in its IPO in July 2017. From the closing of the IPO through the end of 2017, Ionis owned 68 percent of Akcea. The shares held by third parties represent an interest in Akcea’s equity that Ionis does not control. However, because Ionis continues to maintain overall control of Akcea through its voting interest, Ionis reflects the assets, liabilities and results of operations of Akcea in Ionis’ consolidated financial statements. Ionis reflects the noncontrolling interest attributable to other holders of Akcea’s common stock in a separate line called “Net loss attributable to noncontrolling interest in Akcea” on Ionis’ statement of operations. Ionis’ net loss attributable to noncontrolling interest in Akcea for the fourth quarter and full year 2017 was $7.4 million and $11.3 million, respectively. Ionis also added a corresponding account in its stockholders’ equity section on its balance sheet called “Noncontrolling interest in Akcea Therapeutics, Inc.” Net Income (Loss) Attributable to Ionis Common Stockholders Ionis reported net income attributable to Ionis’ common stockholders of $2.7 million for the fourth quarter of 2017, compared to $25.9 million for the same period in 2016. For the full years 2017 and 2016, Ionis reported a net loss attributable to Ionis’ common stockholders of $6.0 million and $86.6 million, respectively. For the fourth quarter of 2017, basic and diluted net income per share were $0.02 compared to basic and diluted net income per share of $0.21 for the same period in 2016. For the full year 2017, basic and diluted net income per share were $0.08 compared to basic and diluted net loss per share of $0.72 for the same period in 2016. Webcast and Conference Call Today, at 11:30 a.m. Eastern Time, Ionis will conduct a live webcast conference call to discuss this earnings release and related activities. Interested parties may listen to the call by dialing 877-443-5662 or access the webcast at www.ionispharma.com. A webcast replay will be available for a limited time. ABOUT IONIS PHARMACEUTICALS Ionis is the leading company in RNA-targeted drug discovery and development focused on developing drugs for patients who have the highest unmet medical needs, such as those patients with severe and rare diseases. Using its proprietary antisense technology, Ionis has created a large pipeline of first-in-class or best-in-class drugs, with over three dozen drugs in development. SPINRAZA® (nusinersen) has been approved in global markets for the treatment of spinal muscular atrophy (SMA). Biogen is responsible for commercializing SPINRAZA. Drugs that have successfully completed Phase 3 studies include inotersen, an antisense drug Ionis is developing to treat patients with hereditary TTR amyloidosis (hATTR), and volanesorsen, an antisense drug discovered by Ionis and co-developed by Ionis and Akcea Therapeutics to treat patients with familial chylomicronemia syndrome or familial partial lipodystrophy. Akcea, an affiliate of Ionis, is a biopharmaceutical company focused on developing and commercializing drugs to treat patients with serious cardiometabolic diseases caused by lipid disorders. If approved, volanesorsen will be commercialized through Ionis’ affiliate, Akcea. Inotersen filings for marketing approval have been submitted in the U.S. and EU. Volanesorsen filings for marketing approval have been submitted in the U.S., EU, and Canada. Ionis’ patents provide strong and extensive protection for its drugs and technology. Additional information about Ionis is available at www.ionispharma.com. IONIS PHARMACEUTICALS’ FORWARD-LOOKING STATEMENT This press release includes forward-looking statements regarding Ionis’ business, financial guidance and the therapeutic and commercial potential of SPINRAZA, inotersen, volanesorsen and Ionis’ technologies and products in development, including the business of Akcea Therapeutics, Inc., Ionis’ majority 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, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. 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, 2016, and its most recent quarterly report on Form 10-Q, 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 trademark of Ionis Pharmaceuticals, Inc. SPINRAZA® is a registered trademark of Biogen. IONIS PHARMACEUTICALS, INC. SELECTED FINANCIAL INFORMATION Condensed Consolidated Statements of Operations (In Thousands, Except Per Share Data) Three months ended, Year ended, December 31, December 31, 2017 2016 2017 2016 ---- ---- Revenue: (unaudited) Commercial revenue: SPINRAZA royalties $52,073 $883 $112,540 $883 Licensing and royalty revenue 4,537 150 9,519 19,839 ----- --- ----- ------ Total commercial revenue 56,610 1,033 122,059 20,722 Research and development revenue under collaborative agreements 115,689 159,316 385,607 325,898 ------- ------- ------- ------- Total revenue 172,299 160,349 507,666 346,620 ------- ------- ------- ------- Expenses: Research, development and patent expenses 128,285 101,151 374,644 344,320 Selling, general and administrative 45,707 18,043 108,488 48,616 ------ ------ ------- ------ Total operating expenses 173,992 119,194 483,132 392,936 ------- ------- ------- ------- Income (loss) from operations (1,693) 41,155 24,534 (46,316) Other income (expense): Investment income 654 1,561 8,179 5,472 Interest expense (10,787) (9,934) (44,752) (38,795) Loss on extinguishment of financing liability for leased facility - (3,983) (7,689) (3,983) Other expenses - - (3,548) - --- Income (loss) before income tax benefit (expense) (11,826) 28,799 (23,276) (83,622) Income tax benefit (expense) 7,164 (2,934) 5,980 (2,934) ----- ------ ----- ------ Net income (loss) (4,662) 25,865 (17,296) (86,556) ====== ====== ======= ======= Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. 7,406 - 11,326 - ===== === ====== === Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders $2,744 $25,865 $(5,970) $(86,556) ====== ======= ======= ======== Basic net income (loss) per share $0.02 $0.21 $0.08 $(0.72) ===== ===== ===== ====== Diluted net income (loss) per share $0.02 $0.21 $0.08 $(0.72) ----- ----- ----- ------ Shares used in computing basic net income (loss) per share 124,818 121,340 124,016 120,933 ======= ======= ======= ======= Shares used in computing diluted net income (loss) per share 126,862 123,953 126,098 120,933 ======= ======= ======= =======
IONIS PHARMACEUTICALS, INC. Reconciliation of GAAP to Pro Forma Basis: Condensed Consolidated Operating Expenses, Income (Loss) From Operations, and Net Income (Loss) (In Thousands) Three months ended, Year ended, December 31, December 31, 2017 2016 2017 2016 ---- ---- ---- ---- (unaudited) As reported operating expenses according to GAAP $173,992 $119,194 $483,132 $392,936 Excluding compensation expense related to equity awards (22,333) (15,158) (85,975) (72,108) Pro forma operating expenses $151,659 $104,036 397,157 $320,828 ======== ======== ======= ======== As reported income (loss) from operations according to GAAP $(1,693) $41,155 $24,534 $(46,316) Excluding compensation expense related to equity awards (22,333) (15,158) (85,975) (72,108) Pro forma income (loss) from operations $20,640 $56,313 $110,509 $25,792 ======= ======= ======== ======= $2,744 $25,865 $(5,970) $(86,556) As reported net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders according to GAAP Excluding compensation expense related to equity awards (22,333) (15,158) (85,975) (72,108) Pro forma net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders $25,077 $41,023 $80,005 $(14,448) ======= ======= ======= ======== Reconciliation of GAAP to Pro Forma Basis As illustrated in the Selected Financial Information in this press release, pro forma operating expenses, pro forma income (loss) from operations, and pro forma net income (loss) were adjusted from GAAP to exclude compensation expense related to equity awards, which are non-cash. Ionis has regularly reported non-GAAP measures for operating results as pro forma results. These measures are provided as supplementary information and are not a substitute for financial measures calculated in accordance with GAAP. Ionis reports these pro forma 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’ pro forma results is consistent with how Ionis’ management internally evaluates the performance of its operations. IONIS PHARMACEUTICALS, INC. Condensed Consolidated Balance Sheets (In Thousands) December 31, December 31, 2017 2016 ---- ---- Assets: Cash, cash equivalents and short- term investments $1,022,715 $665,223 Contracts receivable 62,955 108,043 Other current assets 82,314 24,666 Property, plant and equipment, net 121,907 92,845 Other assets 32,133 21,690 ------ ------ Total assets $1,322,024 $912,467 ========== ======== Liabilities and stockholders’ equity: Other current liabilities $118,276 $82,504 Current portion of deferred contract revenue 106,465 51,280 1% convertible senior notes 533,111 500,511 Long-term obligations, less current portion 72,745 87,409 Long-term deferred contract revenue 72,708 91,198 Total Ionis stockholders’ equity 330,872 99,565 Noncontrolling interest in Akcea Therapeutics, Inc. 87,847 - ------ --- Total stockholders’ equity 418,719 99,565 ------- ------ Total liabilities and stockholders’ equity $1,322,024 $912,467 ========== ========
IONIS PHARMACEUTICALS, INC. SELECTED FINANCIAL INFORMATION Condensed Consolidating Statement of Operations (In Thousands) Year ended, December 31, 2017 ----------------- Ionis Akcea Eliminations Ionis Consolidated ----- ----- ------------ ------------------ Revenue: Commercial revenue: SPINRAZA royalties $112,540 $- $- $112,540 Licensing and royalty revenue 9,519 - - 9,519 ----- --- --- ----- Total commercial revenue 122,059 - - 122,059 Research and development revenue under collaborative agreements 330,398 55,209 - 385,607 Intercompany revenue 54,407 - (54,407) - ------ --- ------- --- Total revenue 506,864 55,209 (54,407) 507,666 ------- ------ ------- ------- Expenses: Research, development and patent expenses 302,281 126,890 (54,527) 374,644 Selling, general and administrative 71,507 36,981 108,488 Total operating expenses 373,788 163,871 (54,527) 483,132 ------- ------- ------- ------- Income (loss) from operations 133,076 (108,662) 120 24,534 Other income (expense): Investment income 8,097 1,813 (1,731) 8,179 Interest expense (44,752) (1,731) 1,731 (44,752) Loss on extinguishment of financing liability for leased facility (7,689) - - (7,689) Other expenses (3,652) 104 - (3,548) --- Income (loss) before income tax benefit (expense) 85,080 (108,476) 120 (23,276) Income tax benefit (expense) 7,255 (1,275) - 5,980 ----- ------ --- ----- Net income (loss) 92,335 (109,751) 120 (17,296) ====== ======== === ======= Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. - - 11,326 11,326 === === ====== ====== Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders $92,335 $(109,751) $11,446 $(5,970) ======= ========= ======= =======
IONIS PHARMACEUTICALS, INC. Condensed Consolidating Balance Sheet (In Thousands) December 31, 2017 ----------------- Ionis Ionis Akcea Eliminations Consolidated ----- ----- ------------ ------------ Assets: Cash, cash equivalents and short-term investments $762,585 $- $1,022,715 $260,130 Contracts receivable $57,542 5,413 - 62,955 Receivable from Akcea Therapeutics, Inc. 14,365 - (14,365) - Other current assets 81,012 1,302 - 82,314 Property, plant and equipment, net 121,830 77 - 121,907 Other assets 304,494 1,882 (274,243) 32,133 ------- ----- -------- ------ Total assets $1,341,828 $268,804 $(288,608) $1,322,024 ========== ======== ========= ========== Liabilities and stockholders’ equity: Other current liabilities $102,367 $30,274 $(14,365) $118,276 Current portion of deferred contract revenue 55,886 50,579 - 106,465 1% convertible senior notes 533,111 - - 533,111 Long-term obligations, less current portion 72,733 12 - 72,745 Long-term deferred contract revenue 66,101 8,306 (1,699) 72,708 Total stockholders’ equity before noncontrolling interest 511,630 179,633 (360,391) 330,872 Noncontrolling interest in Akcea Therapeutics, Inc. - - 87,847 87,847 --- ------ ------ Total stockholders’ equity 511,630 179,633 (272,544) 418,719 ======= ======= ======== ======= Total liabilities and stockholders’ equity $1,341,828 $268,804 $(288,608) $1,322,024 ========== ======== ========= ==========
SPINRAZA 2017 Patient Dynamics US Patient Dynamics* Q1:17 Q2:17 Q3:17 Q4:17 ---------- ----- ----- ----- ----- Total patients 210 710 1,240 1,650 --------- --- --- ----- ----- New patient starts 210 500 530 420 ----------- --- --- --- --- Average doses per patient 2.3 2.5 1.8 1.5 ------------- --- --- --- --- % Loading doses 100% 100% 90% 75% --------- --- --- --- --- % Maintenance doses 0% 0% 10% 25% ------------- --- --- --- --- % Free doses 25% 20% 20% 20% ------------ --- --- --- --- *As announced by Biogen in their Q4:17 earnings call
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Company Codes: NASDAQ-NMS:IONS |