Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Ionis Pharmaceuticals Inc. Slipped This Morning

By Cory Renauer - Oct 24, 2017 at 12:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors think it's awfully early for sales of this company's first blockbuster to stagnate.

What happened

Shares of Ionis Pharmaceuticals Inc. ( IONS 0.66% ) dipped 13% lower in early morning trading on Tuesday after its most important collaboration partner reported some disturbing third-quarter sales figures. Although Biogen ( BIIB -0.36% ) recorded a quarter-to-quarter gain in global Spinraza sales, stagnant U.S. sales of the partnered drug suggest it could hit a saturation point earlier than expected. The stock has fallen 10.4% as of 11:03 a.m. EDT on Tuesday.

So what 

Ionis has received about $94.4 million from Biogen in the first half of this year in royalty and milestone payments associated with Spinraza, the first and only approved treatment for Spinal Muscular Atrophy. That works out to about 46% of the company's total revenue during the first half of the year.  

Person with laptop making an anxious gesture with hands on head.

Image source: Getty Images.

In the second quarter, U.S. Spinraza sales reached $195 million, which included about $30 million related to an inventory build Biogen chalked up to "strong demand" for the recently launched therapy. Investors are beating down Ionis stock today because third-quarter Spinraza sales came in just $3 million higher than the previous quarter, while inventory levels stayed flat.

Now what

Although most analysts expect global sales of Spinraza to keep rising, just how much further is hard to say. The FDA approved the drug for all forms of spinal muscular atrophy last December. At a list price of $750,000 for the first year of treatment and $375,000 each year thereafter, it's one of the world's most expensive drugs and far less likely to find customers among larger patient groups with less severe forms of the inherited disorder. 

While the first sign of a U.S. launch slowdown is less than encouraging, Ionis Investors have a great deal to look forward to. The company's $6.96 billion market cap at the moment isn't as astronomical as it looks. The company's clinical-stage pipeline sports a whopping 37 potential new drugs, including its wholly owned candidate for the treatment of rare lipid disorders, volanesorsen.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ionis Pharmaceuticals, Inc. Stock Quote
Ionis Pharmaceuticals, Inc.
IONS
$25.78 (0.66%) $0.17
Biogen Inc. Stock Quote
Biogen Inc.
BIIB
$228.67 (-0.36%) $0.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
634%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.