What happened

Shares of Ionis Pharmaceuticals (NASDAQ:IONS), a commercial-stage biotech focused on RNA-targeted therapeutics, dropped 6% in May according to data from S&P Global Market Intelligence.

So what

Here's a look back at the key events from May that caused the share price to swing:

  • Ionis reported its first-quarter earnings results on May 9. Investors learned that the company's share of Spinraza profits for the period were $5.2 million. That represents an 11% royalty rate, since its partner, Biogen (NASDAQ:BIIB), already reported that first-quarter sales of the drug were $47 million. When combined with other partnership payments from Novartis and Bayer, Ionis' first quarter sales jumped 199% to $110 million. That was large enough increase to allow the company to report a $0.03 profit. 
  • Ionis and its future spin-off Akcea announced upbeat results from the Phase 3 Approach trial. This study is testing a compound called volanesorsen as a possible treatment for familial chylomicronemia syndrome (FCS). The two companies plan on having volanesorsen in the FDA's hands by the third quarter, which puts it on pace to be on the market in early 2018.
  • On the downside, Ionis reported disappointing news from a Phase 3 study involving inotersen (IONIS-TTRRX). While the drug met the study's primary endpoints, it also showed worrisome side effects. Specifically, it was revealed that a patient taking inotersen died due to an intracranial hemorrhage. 

The bummer inotersen news overshadowed the good-looking earnings results and Approach data, leading shares to take a step back in May.

doctors looking concerned at data

Image Source: Getty Images.

Now what

While the inotersen data shouldn't be ignored, I still think that Ionis has provided investors with plenty of reasons to be bullish. Biogen and Ionis recently got the green light to market Spinraza in Europe, which opens up a brand new market for the drug, and triggered a $50 million milestone payment to Ionis. Since Spinraza royalties are tiered, Ionis is poised to receive a lot of high-margin revenue as the drug's rollout continues. Meanwhile, the upcoming Akcea spin-off promises to lower Ionis' operating costs since it is transferring three of its cardiovascular disease product candidates to the new company. When combined with regular milestone payments from its partners and its enormous pipeline, Ionis looks poised to finally become a profitable company.

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