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Is Ionis Pharmaceuticals a Buy?

By Brian Orelli, PhD – Oct 19, 2020 at 12:46PM

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Here's what it takes to justify the current valuation.

In this Fool Live video, Healthcare and Cannabis Bureau Chief Corinne Cardina and longtime Motley Fool contributor Brian Orelli discuss the potential of Ionis Pharmaceuticals' (IONS -0.68%) antisense platform, which has already resulted in a few drug launches. The company is working to lower the level of specific RNAs, which can ultimately turn off a gene that's potentiating a disease. The simplicity of Ionis' antisense platform has helped the biotech create a broad pipeline of drugs.

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Corinne Cardina: Let's start with Ionis Pharmaceuticals. This was actually asked at 2:01, so props to this person who is really excited about Ionis. Do you have any thoughts on this stock?

Brian Orelli: Yeah, I own it. It's an antisense play. Most drugs attack at the protein level. So proteins are what are doing things in the cell and they perpetuate the disease. You would have an antibody that binds to a protein or you have a small molecule that binds them and inactivates the protein. There's some other classes, but that covers probably 80 or 90 percent of all drugs.

Ionis is working one step up at the RNA level, so from DNA or genes, and then you're making an intermediate called an RNA, doesn't really do anything except make the protein. So they're working at the RNA level. They have technology that binds to RNA and causes it to get degraded. Alnylam (ALNY 1.58%) has a similar situation, they're using RNAi, Ionis uses antisense.

But the reason why I like these companies so much is that RNA structure is basically all the same and it's just the sequence of the RNA, which is based on the sequence of the gene. So it's really easy to develop new drugs once you've decided what protein target you want to go after. Ionis has been able to develop 30-something drugs in its pipeline and it's licensed a lot of them out, which has helped fund that, because how do you fund 30 drugs? But they have drugs on the market and so the technology has been proven and they've been working on getting them more and more potent. I really like the company as a long-term investment.

Brian Orelli, PhD owns shares of Ionis Pharmaceuticals. Corinne Cardina has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alnylam Pharmaceuticals and Ionis Pharmaceuticals. The Motley Fool has a disclosure policy.

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