CARLSBAD, Calif., Nov. 9, 2015 /PRNewswire/ -- Isis Pharmaceuticals, Inc. (Nasdaq: ISIS) today reported consolidated financial results for the third quarter of 2015 and highlighted recent progress in advancing its pipeline.
“Our drugs in development have the potential to make fundamental changes in the way diseases are treated. Our pipeline is large, with numerous late-stage programs that represent potential near term commercial opportunities. We are conducting four Phase 3 studies which should complete enrollment in the next several months. And, we believe these programs have each been substantially de-risked by positive data from Phase 2 studies. Just last week, we reported encouraging data from two Phase 2 studies of ISIS-TTRRx, which support the potential benefit of ISIS-TTRRx for patients with familial amyloid polyneuropathy, FAP, and TTR amyloid cardiomyopathy. Together with our partner, GSK, we are conducting a broad Phase 3 program evaluating ISIS-TTRRx in all forms of TTR amyloidosis. As part of this program, GSK plans to initiate a Phase 3 study of ISIS-TTRRx in patients with TTR amyloid cardiomyopathy, both familial and wild type, early next year. Further, we expect to complete enrollment in our Phase 3 study of ISIS-TTRRx in patients with FAP by year end,” said B. Lynne Parshall, chief operating officer at Isis Pharmaceuticals. “Our other Phase 3 programs are also progressing well. We expect to complete enrollment in both of our Phase 3 studies of nusinersen, the generic name for ISIS-SMNRx, in infants and in children with spinal muscular atrophy by early next year. In addition, we and Akcea plan to complete enrollment in the Phase 3 study of volanesorsen in patients with familial chylomicronemia syndrome this year. We also plan to begin dosing patients in our Phase 3 study of volanesorsen in patients with familial partial lipodystrophy by the end of the year. As enrollment nears completion for the ongoing Phase 3 studies for ISIS-TTRRx, nusinersen and volanesorsen, we and our partners are working closely together to prepare for regulatory filings and to prepare the drugs for the market.”
“Yesterday, we reported positive clinical data on our APO(a) LICA program, showing that our LICA technology can create drugs that are 30-fold more potent in humans than our generation 2.0+ antisense drugs. The increase in potency of our LICA drugs could translate into a small and convenient dose that patients could administer weekly, monthly, quarterly or even less frequently. This, obviously, has implications for uptake, adherence and compliance and opens up broader patient populations for all of our LICA drugs. Importantly, the significantly improved potency from our LICA technology represents a major advancement in our pipeline. We currently have eight LICA drugs in development and plan to report clinical data on several of these drugs next year,” continued Ms. Parshall. “Given the attractive profile of ISIS-APO(a)-LRx, together with Akcea, we plan to aggressively develop this drug to maximize its value with near, mid and long-term opportunities in patients who are at significant cardiovascular risk due to high Lp(a) levels.”
The full list of Corporate and Drug Development Highlights can be found at the end of this press release prior to the financial tables.
Financial Results
“We ended the third quarter with pro forma operating income of $29 million and pro forma net income of $25 million both of which reflect a significant increase over the same period last year. In addition, our operating loss of $13 million and net loss of $17 million, both according to GAAP, were significantly improved over last year. Our continued strong financial performance reflects the successes of the drugs in our pipeline. As our drugs successfully advance, we generate cash and revenue from our partners. During the first nine months of the year, we earned over $230 million of revenue including nearly $90 million in revenue from milestone payments. Our revenue for the first nine months also included more than $90 million we earned from our license of ISIS-FXIRx to Bayer. We ended the third quarter with more than $800 million of cash as a result of the more than $300 million we received from our partners during the first nine months of 2015. Because of our financial performance so far this year, we expect to improve upon our revised financial guidance of a pro forma NOL in the low $30 million range and more than $750 million in cash,” said Elizabeth L. Hougen, chief financial officer of Isis Pharmaceuticals.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.
Revenue
Revenue for the three and nine months ended September 30, 2015 was $49.1 million and $232.1 million, respectively, compared to $44.1 million and $129.3 million for the same periods in 2014. Isis’ revenue in the nine months ended September 30, 2015 consisted of the following:
- $91.2 million from Bayer in connection with its exclusive license of ISIS-FXIRx;
- $51.7 million from Biogen for advancing ISIS-SMNRx in late-stage clinical development, advancing ISIS-BIIB4Rx into development and validating two new undisclosed targets for neurological disorders;
- $22 million from Roche for initiating a Phase 1/2 study of ISIS-HTTRx;
- $15 million from GSK for advancing the Phase 3 study of ISIS-TTRRx; and
- $49.5 million from the amortization of upfront fees and manufacturing services performed for its partners.
Already in the fourth quarter of 2015, Isis has earned $16 million in milestone payments from Biogen and GSK.
Isis’ revenue fluctuates 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.
Operating Expenses
Isis is conducting more later-stage clinical trials in 2015 than it did in 2014. As such, Isis’ pro forma operating expenses of $82.3 million and $203.0 million for the three and nine months ended September 30, 2015, respectively, were higher than the $57.4 million and $164.2 million in the same periods in 2014. On a GAAP basis, Isis’ operating expenses for the three and nine months ended September 30, 2015 were $97.3 million and $245.0 million, respectively, compared to $65.6 million and $187.1 million for the same periods in 2014. Isis’ operating expenses on a GAAP basis included non-cash compensation expense related to equity awards, which increased due to the increase in the Company’s stock price in January 2015 compared to January 2014.
Gain on Investment in Regulus Therapeutics Inc.
In the third quarter of 2015, Isis received nearly $26 million of cash and recorded a $20.2 million gain on its sale of a portion of the Regulus common stock it owns. Regulus is a satellite company partner that Isis co-founded to discover and develop antisense drugs targeting microRNAs. In total, Isis has received nearly $50 million since 2014 from its sale of Regulus’ common stock demonstrating the success of Isis’ satellite company strategy. Isis now owns approximately 2.8 million shares, or approximately 5%, of Regulus’ common stock.
Net Loss
Isis reported a net loss of $35.8 million and $16.8 million for the three and nine months ended September 30, 2015, respectively, compared to a net loss of $26.7 million and $70.0 million for the same periods in 2014. Basic and diluted net loss per share for the three and nine months ended September 30, 2015 was $0.30 and $0.14, respectively, compared to $0.23 and $0.60 for the same periods in 2014. Isis significantly improved its net loss for the first nine months of 2015 compared to the same period in 2014 primarily due to the revenue the Company earned from its exclusive license agreement with Bayer for ISIS-FXIRx, an increase in milestone payments earned from its partners and the gain from its investment in Regulus. The increase in operating expenses associated with the Company’s maturing pipeline of drugs and Akcea’s activities to prepare for the launch and commercialization of volanesorsen partially offset the Company’s increase in revenue.
Balance Sheet
As of September 30, 2015, Isis had cash, cash equivalents and short-term investments of $812.2 million compared to $728.8 million at December 31, 2014. Isis’ working capital was $746.1 million at September 30, 2015 compared to $721.3 million at December 31, 2014. The increase in the Company’s cash and working capital primarily relates to the nearly $300 million the Company has received from its partners through the end of September 2015.
Conference Call
At 11:30 a.m. Eastern Time today, November 9, 2015, Isis 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.isispharm.com. A webcast replay will be available for a limited time at the same address.
ABOUT ISIS PHARMACEUTICALS, INC.
Isis 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, Isis has created a large pipeline of first-in-class or best-in-class drugs, with over a dozen drugs in mid- to late-stage development. Drugs currently in Phase 3 development include volanesorsen, a drug Isis is developing and plans to commercialize through its wholly owned subsidiary, Akcea Therapeutics, to treat patients with familial chylomicronemia syndrome and familial partial lipodystrophy; ISIS-TTRRx, a drug Isis is developing with GSK to treat patients with all forms of TTR amyloidosis; and ISIS-SMNRx, a drug Isis is developing with Biogen to treat infants and children with spinal muscular atrophy. Isis’ patents provide strong and extensive protection for its drugs and technology. Additional information about Isis is available at www.isispharm.com.
FORWARD-LOOKING STATEMENT
This press release includes forward-looking statements regarding Isis Pharmaceuticals’ financial position and outlook, Isis’ business, the business of Akcea Therapeutics, Inc., a subsidiary of Isis Pharmaceuticals, and the therapeutic and commercial potential of Isis’ technologies and products in development, including ISIS-SMNRx, ISIS-TTRRx and volanesorsen. Any statement describing Isis’ 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. Isis’ 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 Isis’ forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Isis. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Isis’ programs are described in additional detail in Isis’ annual report on Form 10-K for the year ended December 31, 2014, and its most recent quarterly report on Form 10-Q, which are on file with the SEC.
Copies of this and other documents are available from the Company.
In this press release, unless the context requires otherwise, “Isis,” “Company,” “we,” “our,” and “us” refers to Isis Pharmaceuticals and its subsidiaries.
Isis Pharmaceuticals® is a registered trademark of Isis Pharmaceuticals, Inc. Akcea Therapeutics is a trademark of Isis Pharmaceuticals, Inc.
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