In the second quarter, Ionis Pharmaceuticals (NASDAQ:IONS) continued bringing in royalties from its spinal muscular atrophy drug Spinraza. Unfortunately, the cash and the revenue it receives from licensing deals wasn't enough to cover expenses as the biotech waits for approval for a pair of other drugs under review by the Food and Drug Administration. Despite the quarterly loss, management thinks it'll have an operating profit for this year -- at least on a pro forma basis.

Ionis Pharmaceuticals results: The raw numbers


Q2 2018

Q2 2017

Year-Over-Year Change


$117.7 million

$112.3 million


Income from operations

($50.3 million)

$6.5 million


Earnings per share




Data source: Ionis Pharmaceuticals.

What happened with Ionis Pharmaceuticals this quarter?

  • Royalties from Biogen (NASDAQ:BIIB) for sales of Spinraza came in at $57 million, more than double the year-ago quarter. The rest of the revenue comes from research and development revenue, which can vary from quarter to quarter due to milestone payments.
  • In July, Ionis' marketing partner Akcea Therapeutics (NASDAQ:AKCA) received EU approval for Tegsedi, the brand name for inotersen that treats hereditary transthyretin amyloidosis (ATTR).
  • Earlier this month, Akcea licensed the Latin American rights to Tegsedi and Waylivra, which treats diseases with high lipid levels, to PTC Therapeutics (NASDAQ:PTCT); Ionis gets 60% of the milestone and royalty payments from PTC Therapeutics for Tegsedi and 50% of the payments for Waylivra.
  • The larger loss came from an increase in R&D expenses, as Ionis and Akcea -- which is still included in Ionis' profit-loss statement because Ionis owns a majority stake -- continue to advance Ionis' pipeline. Selling, general, and administrative costs also increased as Akcea prepares to launch Tegsedi and Waylivra. Ionis' balance sheet can certainly absorb the quarterly loss; the biotech ended the quarter with $2 billion in the bank thanks to its latest deal with Biogen, which is plenty to get by as it waits for revenue to start rolling in.
Doctor talking to patient in exam room

Image source: Getty Images.

What management had to say

Akcea isn't willing to give prices for its drugs quite yet, but Sarah Boyce, the president of Akcea, laid out some framework: "According to a 2017 article published in the Rare Disease Report, rare disease drugs approved in the U.S. are typically priced within a range of $300,000 to $700,000 per year. We plan to price responsibly, and it is our expectation not to be in the upper end of that range."

A lot has been made about the potential completion between Tegsedi and Pfizer's (NYSE:PFE) ATTR drug tafamidis but Ionis Chairman and CEO Stan Crooke pointed out it may not be a winners take all scenario: 

The two mechanisms [of the drugs] are potentially complementary. We think that the great benefit will be brought by getting rid of the protein that causes the trouble, but the remaining protein could also benefit from a stabilizer. So we could imagine very easily that patients might be treated with both drugs.

Looking forward

All investors' eyes are rightfully turned toward Waylivra and Tegsedi. In the U.S., the FDA is expected to rule on Waylivra by Aug. 30 and on Tegsedi by Oct. 6. Those are only goals set by the agency, but they seem to be meeting them for the most part lately.

Looking to the pipeline, Ionis next major drug is likely to be IONIS-HTTRx to treat Huntington's disease, which partner Roche plans to quickly move into the final clinical trial before a marketing application can be submitted. All told, the company plans to advance three drugs into late-stage trials by the end of 2019.