What happened

After reporting better-than-expected results in the fourth quarter and providing investors with an update on its R&D progress, shares in Ionis Pharmaceuticals (NASDAQ:IONS) increased more than 12% last month, according to S&P Global Market Intelligence

So what

Ionis Pharmaceuticals has a lot of drugs in clinical trials, and many of those drugs are partnered up with bigger peers that pay the company licensing and milestone revenue. 

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In Q4, payments from its peers propelled the company's top line up 213% year over year to $159.3 million. The windfall allowed the company to report quarterly net income of $25.9 million, up 136% from the same period in 2015. Both figures were better than what industry watchers were predicting. Overall, revenue was $347 million in 2016, up 45% from 2015. 

The company also updated investors on its clinical trials, offering an outlook that suggests this year will be rich in study data. The company hopes to file volanesorsen for FDA approval for use in familial chylomicronemia syndrome following its reporting of positive phase 3 results earlier this month.

It also hopes to see regulatory applications get filed for IONIS-TTrx, a drug in trials evaluating its use in familial amyloid polyneuropathy. Results from phase 3 studies are expected in the first half of this year, and if they're good, that could allow collaboration partners GlaxoSmithKline to pitch it to regulators.

Management hopes to add as many as five new drug candidates to its clinical-stage drug pipeline this year. 

Now what

In December, the FDA gave a green light to Spinraza, a drug licensed to Biogen that targets spinal muscular atrophy, a rare disease. Sales should grow throughout this year, and given a lack of treatment alternatives, and a six-figure price tag, royalties in the teen percentages could be meaningful to Ionis Pharmaceuticals relatively quickly.  

The company's volanesorsen phase 3 data was good enough for management to say it will advance it to the FDA. Investors should find out if IONIS-TTrx phase 3 trials were a success in Q2. 

Overall, Ionis Pharmaceuticals' target is to become profitable on a pro-forma basis in 2017, and if it does, it will mark an important milestone for this mid-cap biotech stock, and for that reason, investors are right to be optimistic.

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