Ionis Pharmaceuticals Inc Back in the Black (for Now)

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Ionis Pharmaceuticals (IONS 0.92%) reported third-quarter earnings on Wednesday, but investors are rightfully focused on the pending approval of Spinraza for spinal muscular atrophy (SMA) and its progressing pipeline.

Ionis Pharmaceuticals results: The raw numbers

Data source: Company press release. YOY = year over year.

What happened with Ionis Pharmaceuticals this quarter?

• Revenue increased mostly due to Biogen (BIIB -0.29%) licensing Spinraza, which earned Ionis $85 million. Lumpy payments causing Ionis to move back and forth from the black to the red are nothing new, but hopefully the pattern will end sometime in the near future as Ionis gets more drugs approved and can stay in the black.
• The milestone payment, as well as one from Johnson & Johnson helped pad Ionis' coffers. The biotech had $688 million in the bank at the end of the first quarter.
• Spinraza has now passed two phase 3 trials, one in infants with Type 1 SMA and a second trial in babies with later-onset Type 2 SMA. Ionis' partner Biogen has already submitted marketing application in the U.S. and EU. Given the unmet need, Ionis thinks Spinraza could be approved extremely quickly, allowing Biogen to launch in the U.S. as early as the end of this year.
• Last week, Ionis disclosed data from a phase 2 trial testing IONIS-FXIRx in patients with end-stage renal disease, which showed that the drug lowered Factor XI activity, which can predict a reduction in blood clots. IONIS-FXIRx, which is licensed to Bayer, appeared safe with no treatment-related major or clinically relevant non-major bleeding events, a common side effect of drugs that reduce blood clots.

What management had to say

When asked whether Biogen and Ionis had a sense of urgency after AveXis' (NASDAQ: AVXS) recent announcement that the FDA might only require a limited amount of data to get AveXis' SMA gene therapy approved, Ionis' chairman and CEO Stanley Crooke snipped, "We don't need commercial reasons to feel the sense of urgency to see these babies and children gain benefit -- nor does Biogen."

There's been some discussion about the most recent Spinraza data in Type 2 patients coming after Biogen submitted its marketing applications, which would normally trigger an FDA decision delay, but Ionis' chief operating officer, Lynne Parshall, said the FDA had been expecting the data, so "We definitely don't think it will slow anything down." Crooke added, "And that's based on lots of interactions with regulatory services."

Looking forward

Beyond the approval and launch of Spinraza, Ionis has plenty of data that could result in further approvals. The first phase 3 trial for its volanesorsen in patients with high triglycerides will read out at the end of this year. And then next year, we'll get more phase 3 data for volanesorsen and phase 3 data for IONIS-TTRRx which treats transthyretin-mediated amyloidosis.

Three new drugs approved by 2018 certainly would be impressive, especially since Ionis has only developed two approved drugs since it was founded in 1989.