On May 5, 2021 Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) reported its financial results for the first quarter of 2021 and recent business highlights (Press release, Ionis Pharmaceuticals, MAY 5, 2021, View Source [SID1234579178]).
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"In the first quarter, we took important steps to maximize the value of our wholly owned pipeline. We recently initiated pivotal studies with our wholly owned FUS-ALS and Alexander disease programs. We delivered positive results from our IONIS-PKK-LRx program, demonstrating its potential to change the standard of care for patients with hereditary angioedema. We also further strengthened the business and continued executing on our strategic priorities," said Brett P. Monia, Ph.D., chief executive officer of Ionis. "This summer, we expect data from our IONIS-MAPTRx program in Alzheimer’s disease patients. And later this year, we look forward to 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 upcoming catalysts, together with our recent achievements, position us well to have 12 or more products on the market in 2026."
First Quarter 2021 and Recent Summary Financial Results
On track to achieve 2021 financial guidance reflecting investments in Ionis’ wholly owned pipeline, based on the following first quarter results
$112 million in total revenues
$159 million of operating expenses on a non-GAAP basis(1) and $204 million on a GAAP basis
Net loss of $45 million on a non-GAAP basis(1) and $90 million on a GAAP basis
Further strengthened the Company’s balance sheet with pro forma cash of $2.1 billion, after reflecting the convertible notes transaction
Enables expansion of manufacturing and R&D capacity
$632.5 million principal due in April 2026 with 0% interest and an effective conversion price of $76.39 after the purchase of a call spread
Will realize interest expense savings while keeping potential future dilution nearly flat
Repurchased approximately 80% of previously outstanding 1% convertible notes due in November 2021
"So far this year, we have taken important steps in support of developing and commercializing our wholly owned medicines. In addition to completing the restructuring of our European operations, we expanded our Sobi distribution agreement to include North America. These transactions unlocked significant resources that we are now redirecting towards our highest priority programs, including IONIS-TTR-LRx and IONIS-APOCIII-LRx," said Elizabeth L. Hougen, chief financial officer of Ionis. "We are on track to meet our 2021 financial guidance. In the second half of this year, we expect R&D revenue to increase as many of our partnered programs continue to advance. Importantly, we are well-capitalized with the resources we need to expand our manufacturing and R&D capacity to support the future needs of our wholly owned pipeline. This large capital project, which is now underway, is necessary to successfully execute on our goal to drive growth."
(1)
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 European operations and the related tax effects. Please refer to the section below titled "Financial Impacts of Akcea Acquisition and Restructured 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.
First Quarter 2021 Marketed Products Highlights
SPINRAZA: a global foundation-of-care for the treatment of spinal muscular atrophy (SMA) patients of all ages
$521 million in worldwide sales in the first quarter
More than 11,000 patients worldwide were on therapy at the end of the first quarter across post-marketing, expanded access and clinical trial settings
Higher-dose SPINRAZA demonstrated safety and tolerability consistent with the currently approved dose in the open-label safety cohort of the DEVOTE study, enabling enrollment in the blinded, pivotal cohort to get underway
TEGSEDI and WAYLIVRA: important medicines approved for the treatment of patients with severe rare diseases
Completed the transition of European operations to Swedish Orphan Biovitrum AB (Sobi) and expanded the distribution agreement to include North American TEGSEDI operations
First Quarter 2021 and Recent Pipeline Events
Phase 3 Pipeline: growing and positioned for 12 or more products on the market in 2026
Advanced ION363 into a Phase 3 study in patients with FUS-ALS
Advanced tofersen into the Phase 3 ATLAS study in presymptomatic SOD1-ALS patients
Roche reported tominersen data related to the dosing halt in the Phase 3 program
Mid-stage Pipeline: advancing multiple medicines with potential to change the standard of care for patients with severe diseases
Reported positive topline IONIS-PKK-LRx results in patients with hereditary angioedema
Advanced ION373 into the Phase 2 portion of a pivotal study in patients with Alexander disease
Advanced the IONIS-AGT-LRx development program:
Reported positive Phase 2 data in JACC: Basic to Translational Science
Advanced into a Phase 2b study in patients with hypertension uncontrolled with three or more antihypertensive medications
Advanced into a Phase 2 study in patients with chronic heart failure with reduced injection fraction
Advanced the ongoing Phase 2 study of ION541 in patients with ALS regardless of family history, resulting in a $10 million payment from Biogen
Upcoming 2021 Pipeline Catalysts(2)
(2) Timing of partnered program catalysts based on partners’ most recent publicly available disclosures
First Quarter 2021 Financial Results
TEGSEDI and WAYLIVRA revenue, net
Amortization from upfront payments
20The Company’s commercial revenue in the first quarter of 2021 was consistent with the same period last year. As the Company completes its transition of TEGSEDI operations in North America to Sobi, the Company’s commercial revenue from product sales will shift to distribution fees based on net sales generated by Sobi.
The Company’s R&D revenue decreased in the first quarter of 2021 compared to the same period last year primarily because the Company earned more milestone payments in the first 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.
Financial Impacts of Akcea Acquisition and Restructured Operations
In conjunction with the Akcea acquisition and restructured European operations, in the first quarter of 2021, the Company incurred $7 million of costs, which it excluded 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. The Company expects to incur additional expenses in the range of $11 million to $14 million related to the restructuring of its North American TEGSEDI operations from the expanded distribution agreement with Sobi. The company will reflect the North American TEGSEDI restructuring costs primarily in the second quarter of 2021.
Operating Expenses
Ionis’ operating expenses for the first quarter of 2021 increased compared to the same period last year driven primarily by the Company’s investments in advancing its late-stage wholly owned pipeline.
Net Loss Attributable to Ionis Common Stockholders
Ionis’ net loss attributable to Ionis’ common stockholders for the first quarter of 2021 increased compared to the same period in the prior year for the reasons discussed above.
Balance Sheet
Ionis ended March 2021 with cash, cash equivalents and short-term investments of $1.8 billion, compared to $1.9 billion at December 31, 2020. In April 2021, Ionis issued $632.5 million of 0% senior convertible notes due in April 2026 and repurchased $247.9 million of its 1% senior convertible notes. After reflecting these transactions, Ionis’ pro forma cash, cash equivalents and short-term investments was $2.1 billion.
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.