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.
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.
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.
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.