On August 4, 2021 Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) reported its financial results for the second quarter of 2021 and recent business achievements (Press release, Ionis Pharmaceuticals, AUG 4, 2021, View Source [SID1234585703]).
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"Since our last quarterly update, we continued to execute on our strategic objectives to prepare for multiple Ionis commercial launches, expand our drug delivery capabilities and advance new products towards the market. Biogen completed dosing in the tofersen Phase 3 VALOR study and began offering tofersen to SOD1-ALS patients on an individual compassionate use basis. We achieved full enrollment in the eplontersen Phase 3 NEURO-TTRansform study and 50 percent enrollment in the pelacarsen Phase 3 Lp(a) HORIZON study. Additionally, we licensed Bicycle Therapeutics’ technology to expand the capabilities of our LICA technology," said Brett P. Monia, Ph.D., chief executive officer of Ionis. "Looking ahead, we expect data from multiple pipeline programs, including additional data supporting the potential for our IONIS-PKK-LRx program to change the standard of care for patients with hereditary angioedema. And by this fall, we expect data from the Phase 3 VALOR study of tofersen in patients with SOD1-ALS. If results from the VALOR study are positive, we expect tofersen to be our next commercial medicine. These key recent achievements and upcoming catalysts keep us on track for a regular cadence of Phase 3 data and new drug applications, leading to 12 or more products on the market in 2026."
Second Quarter 2021 and Recent Summary Financial Results
Second quarter results reflect focus on Ionis’ strategic objectives
$126 million in total revenues
$154 million of operating expenses on a non-GAAP basis(1) and $199 million on a GAAP basis
Net loss of $36 million on a non-GAAP basis(1) and $81 million on a GAAP basis
Well capitalized with cash and investments of $2.1 billion at the end of the second quarter
"In addition to advancing our pipeline and expanding our drug discovery capabilities, we have taken multiple steps to streamline our operations in support of our wholly owned medicines. We have completed the integration of Akcea, entered distribution arrangements with Sobi and restructured our commercial operations. These steps enabled us to unlock significant resources that we are redirecting towards our highest priority programs," said Elizabeth L. Hougen, chief financial officer of Ionis. "We remain on track to achieve our 2021 revenue guidance of more than $600 million. We continue to expect increased R&D revenue in the second half of this year. Already in the third quarter, we earned $25 million from Novartis for the pelacarsen enrollment milestone. We are revising our 2021 operating expense and net loss guidance because of our license of Bicycle’s technology. Importantly, we remain well-capitalized with the resources we need to achieve our strategic objectives."
Revised 2021 Financial Guidance
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 acquisition and restructured commercial operations and the related tax effects. Please refer to the section below titled "Financial Impacts of Akcea Acquisition 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 release.
Second Quarter 2021 Marketed Products Highlights
SPINRAZA: The global market leader for the treatment of spinal muscular atrophy (SMA) patients of all ages
$500 million in worldwide sales in the second quarter
More than 11,000 patients worldwide on therapy at the end of the second quarter across commercial, expanded access and clinical trial settings
New data presented at CureSMA reinforce the potential for higher-dose SPINRAZA to improve SMA patient outcomes and further support SPINRAZA’s potential long-term benefit for SMA patients of all ages
TEGSEDI and WAYLIVRA: important medicines approved for the treatment of patients with severe rare diseases
Successfully completed the transition of North American TEGSEDI operations to Swedish Orphan Biovitrum AB (Sobi)
Second Quarter 2021 and Recent Events
Phase 3 Pipeline: Six Phase 3 studies on track for a regular cadence of data readouts beginning this year
Completed dosing in the Phase 3 VALOR study of tofersen in patients with SOD1-ALS, with data expected by this fall
Opened individual compassionate use access for SOD1-ALS patients with the most rapidly progressive disease
Achieved full enrollment in the Phase 3 NEURO-TTRansform study of eplontersen in patients with TTR polyneuropathy, with data expected by mid-2022
Achieved 50 percent enrollment in the Phase 3 Lp(a) HORIZON study of pelacarsen for patients at risk for Lp(a)-driven cardiovascular disease, resulting in a $25 million payment from Novartis
Advanced ION363 into a Phase 3 study in patients with FUS-ALS
Mid-stage Pipeline: multiple medicines with potential to change the standard of care for patients with severe diseases
Continued to advance the Phase 2b RE-THINc ESRD study of IONIS-FXI-LRx, with data expected in the first half of 2022
Reported data from the Phase 1/2 study of IONIS-MAPTRx in patients with Alzheimer’s disease, demonstrating durable, time and dose-dependent reductions in CSF tau protein; IONIS-MAPTRx was generally well tolerated
Advanced the ongoing Phase 2 study of ION541 in patients with ALS regardless of family history, resulting in a $10 million payment from Biogen
Advanced ION224 into a Phase 2b study in patients with non-alcoholic steatohepatitis (NASH)
Advanced ION373 into the Phase 2 portion of a pivotal study in patients with Alexander disease
Strategic and Business Events
Entered a license agreement with Bicycle Therapeutics for exclusive rights to Bicycle’s peptide technology to expand the capabilities of Ionis’ LICA technology
Announced changes to the Ionis board of directors
Joseph Loscalzo, M.D., Ph.D., appointed as chairman and Allene M. Diaz as a member of the board
Joseph Wender appointed as lead independent director
Ionis founder and executive chairman, Stanley T. Crooke M.D., Ph.D. and Breaux B. Castleman retired from the board
Upcoming 2021 Pipeline Catalysts(2)
Second Quarter 2021 Financial Results
Revenue
Ionis’ revenue was comprised of the following (amounts in millions):
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.
The Company’s R&D revenue decreased in the second quarter of 2021 compared to the same period last year primarily because the Company earned more milestone payments in the second quarter of 2020 than the same period this year. The Company expects its R&D revenue to increase in the second half of 2021 compared to the first half as its partnered programs advance. Already in the third quarter of 2021, the Company earned a $25 million milestone payment from Novartis when Novartis achieved 50 percent enrollment in the Phase 3 Lp(a) HORIZON study of pelacarsen.
Financial Impacts of Akcea Acquisition and Restructured Commercial Operations
In the second quarter of 2021, the Company incurred $15 million of costs in conjunction with the Akcea acquisition and restructuring of the Company’s commercial operations. The Company excluded these costs from its non-GAAP amounts for the period. Refer to the detailed reconciliation of non-GAAP and GAAP measures that is provided later in this release.
Operating Expenses
Ionis’ operating expenses for the second quarter of 2021 increased slightly compared to the same period last year driven by an increase in R&D expenses, partially offset by a decrease in SG&A expenses. Ionis’ increased R&D expenses were primarily driven by the Company’s investments in advancing its late-stage wholly owned pipeline. Ionis’ decreased SG&A expenses were primarily from operating efficiencies achieved from integrating Akcea and restructuring the Company’s commercial operations.
Net Loss Attributable to Ionis Common Stockholders
Ionis’ net loss attributable to Ionis’ common stockholders for the second quarter of 2021 increased compared to the same period in the prior year for the reasons discussed above. Additionally, the Company recognized an $8.6 million non-cash loss from the early retirement of a significant portion of its 1 percent senior convertible notes.
Balance Sheet
Ionis ended June 2021 with cash, cash equivalents and short-term investments of $2.1 billion, compared to $1.9 billion at December 31, 2020. In April 2021, Ionis issued $632.5 million of 0 percent senior convertible notes due in April 2026 and repurchased $247.9 million of its 1 percent senior convertible notes. The Company’s remaining $62 million of 1 percent senior convertible notes mature 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
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.