What happened

After phase 3 data for its volanesorsen revealed some cases of low platelet counts, Goldman Sachs cut its rating on the company, and management announced a spin-off of some of its drugs, Ionis Pharmaceuticals (IONS -3.49%) shares declined 18.7% in March, according to S&P Global Market Intelligence.

So what

On March 6, Ionis Pharmaceuticals reported that volanesorsen successfully lowered triglyceride levels in patients with familial chylomicronemia syndrome (FCS), a rare lipid disorder affecting between 3,000 and 5,000 people worldwide.

Scientists work together in a lab on medicine.


The good news, however, was somewhat blunted by news that some patients participating in the phase 3 study suffered dangerously low platelet counts. These patients platelet levels returned to normal after discontinuing volanesorsen. Patients with less severe drop-offs in platelets were also observed, requiring dose adjustments.

The news raises questions regarding unintended side effects with the drug that could derail an eventual Food and Drug Administration approval. 

Among critics questioning the company are Goldman Sachs analyst Salveen Richter, who, according to Bloomberg, cut Ionis Pharmaceuticals rating to a sell and warned of a potential 45% downside in its share price after volanesorsen's news.

On March 27, Ionis Pharmaceuticals filed an S-1 with the SEC detailing its IPO of Akcea Pharmaceuticals. Akcea Pharmaceuticals is being spun off to develop and commercialize a handful of Ionis Pharmaceuticals' lipid disease drugs, including volanesorsen and drugs partnered up with Novartis.

Now what

Akcea Pharmaceuticals expects to file for volanesorsen approval later this year, and an FDA decision timeline suggests that regulators could weigh in with a decision in 2018. If approved, Akcea Pharmaceuticals will pay milestones and royalties to Ionis Pharmaceuticals.

In the meantime, Ionis Pharmaceuticals' share price will depend significantly on how successful Biogen is out of the gate in marketing Spinraza and on news flow associated with other drugs Ionis Pharmaceuticals is developing. For example, GlaxoSmithKline is expected to report data from a registrational study of IONS-TTRRx this quarter. 

Unquestionably, this is an important year for Ionis Pharmaceuticals. If Spinraza wins over doctors and insurers, management thinks the company can be profitable this year on a pro forma basis. That would be an important step given its long history of drug development and related losses.