Ionis Inventory: Alternative Abounds (NASDAQ:IONS)

I’ve been a follower and a fan of Ionis (NASDAQ:IONS) since 04/2018’s Ionis article “Ionis: Money, Catalysts And Extra”. In 03/2022’s “Ionis: At A Present-Me Crossroads” (“Crossroads“), I mirrored on why Ionis had fallen again from its glory days when it had confirmed promise of buying and selling as much as $100 and mentioned its then ahead prospects .

On this article, I replace Crossroads primarily based on newest out there Ionis developments, together with its Q3,2022 Earnings name (the “Call“) and CEO Monia’s presentation on the 01/2023 forty first Annual J.P. Morgan Healthcare Convention (the “Presentation“).

Ionis’ ALS SOD1 PDUFA is quick approaching.

Ionis has lengthy generated wholesome royalty revenues from its SPINRAZA (nusinersen) deal with Biogen (BIIB). They totaled ~$268 million in 2021 in comparison with ~$287 million in 2020. Its Q3, 2022 10-Q reported its product revenues from Spinraza, and lesser revenues from WAYLIVRA and TEGSEDI as set out beneath:

This off kilter tri-legged stool of product revenues, with SPINRAZA because the workhorse and TEGSEDI and WAYLIVRA because the distant also-rans, has been the case for a number of years.

As described in Crossroads, Ionis has not too long ago been on one thing of a dropping streak with late stage candidates. Examples embrace its:

1. Vupanorsen (PF-07285557), that was being evaluated for potential indications in cardiovascular [CV] danger discount in growth with Pfizer’s (PFE);
2. Tominersen (HTT) (RG6042, IONIS-HTT_Rx) that was being evaluated by Roche in remedy of Huntington’s Illness [HD].

In 10/2021 Ionis’ tofersen didn’t hit the first endpoint in its part III trial in remedy of superoxide dismutase 1 (SOD1) amyotrophic lateral sclerosis. It regarded as if it have been going to rely as a 3rd failure. Nevertheless Biogen parsed the information and located favorable traits in secondary and exploratory markers.

Accordingly it went forward and filed an NDA. In 07/2022 Ionis announced that the FDA accepted Biogen’s NDA for tofersen in remedy of SOD1-ALS. The FDA granted the appliance precedence evaluation with a PDUFA date of 01/25/2023. Tofersen is at present beneath submission to the FDA with a PDUFA of 04/25/2023, extended three months from 01/25/2023.

If tofersen is permitted it is going to be a feather in Ionis’ cap and enhance to its credibility. ALS isn’t a typical illness; solely a small share of ALS sufferers have the SODI variation. Accordingly, tofersen might not present an excessive amount of of a monetary enhance even when permitted. Ionis’ deal with Biogen was entered into in 2013 and requires unspecified milestones and “tiered royalties as much as the midteens”.

Ionis has extra interesting alternatives over the subsequent few years.

Educated Ionis bulls are trying past the SOD1 PDUFA to Ionis’ subsequent three alternatives teed up in its bullpen. These are every ligand-conjugated (LICA) investigational antisense molecules. They embrace:

1. Eplontersen, a medication designed to scale back the manufacturing of transthyretin (TTR protein), to deal with all sorts of TTR amyloidosis (ATTR), a systemic, progressive and deadly illness.;
2. Olezarsen to deal with cardiometabolic illness and acute pancreatitis because of elevated triglyceride ranges; and
3. Donidalorsen designed to scale back the manufacturing of prekallikrein, which performs a key position within the activation of inflammatory mediators related to acute assaults of hereditary angioedema [HAE] .

Of those three, eplontersen is the kingpin when it comes to potential when it comes to each market dimension and imminency. Its key attributes are set out in its panel beneath from Presentation slide 6.

Importantly and never talked about on the slide is the Ionis’ 12/2021 eplontersen collaboration with AstraZeneca (AZN). the monetary preparations on the deal are richer than the sooner SOD1 deal. They embrace:

…upfront fee of $200m and extra conditional funds of as much as $485m following regulatory approvals. It should additionally pay as much as $2.9bn of sales-related milestones primarily based on gross sales thresholds between $500m and $6bn, plus royalties within the vary of low double-digit to mid-twenties share relying on the area. The collaboration contains territory-specific growth, business and medical affairs cost-sharing provisions.

The deal seems and sounds candy as proven by the Presentation; I’ve a nagging eplontersen concern; if permitted it could possibly be a low precedence for AstraZeneca. Its 09/2022 Uncommon Illness Investor Presentation has a number of Amyloidosis targeted slides; none of them point out eplontersen.

There’s all the time a danger that good royalty offers backfire when the licensee prefers to spend promotion {dollars} by itself wholly owned therapies. From a licensee’s perspective a royalty is a tax. Everyone knows how taxpayers hate taxes and go to nice lengths to keep away from them.

Olezarsen is at present wholly owned by Ionis. Its key attributes from its Presentation slide 6 panel embrace potential blockbuster gross sales, nevertheless its first pivotal readout can be for remedy of familial chylomicronemia syndrome [FCS]. Sadly FCS is a uncommon illness with ~1,500 US sufferers it’s nonetheless ready on knowledge from its first pivotal trial anticipated in mid-2023.

Olezarsen’s bigger indication, extreme hypertriglyceridemia TG >500 mg/dL [SHTG], is being investigated in a number of trials. Through the Name EVP & CDO Geary reported:

CORE, our pivotal — our first pivotal examine in sufferers with SHTG stays on observe for knowledge CORE 2, our confirmatory pivotal examine in the identical inhabitants is now underway with knowledge additionally anticipated in 2024. We not too long ago initiated ESSENCE a supportive Section III examine. ESSENCE is designed to construct out the protection database for the a lot bigger SHTG indication. With first-mover benefit, we stay very assured within the potential of olezarsen to be a considerable driver of future development.

I learn this as indicating that Olezarsen is unlikely to be a giant income driver till 2025 or past.

As for its third and final upcoming pivotal readout for donidalorsen, its Presentation slide 18 reveals that it provides great, albeit lower than blockbuster, income potential.

Through the Name Geary reported that he additionally anticipated a key knowledge readout from it in 2024.

The Ionis story is present process a prolonged gestation; its funds are stable however a good distance from worthwhile

Ionis, based in 1989, has tantalized its shareholders with its outsized potential through the years. Frustratingly it has but to attain profitability. It has confirmed to be a wholly completely different breed of cat from the run of a mill growing biotech.

Its “Liquidity and Capital Assets” (p. 39) from its Q3, 2022 10-Q makes for fascinating studying:

Now we have financed our operations primarily from analysis and growth collaborative agreements. We additionally finance our operations from business income from SPINRAZA royalties and TEGSEDI and WAYLIVRA business income. From our inception by September 30, 2022, now we have earned roughly $6.3 billion in income. Now we have additionally financed our operations by the sale of our fairness securities and the issuance of long-term debt. From the time we have been based by September 30, 2022, now we have raised internet proceeds of roughly $2.0 billion from the sale of our fairness securities. Moreover, from our inception by September 30, 2022, now we have borrowed roughly $2.1 billion beneath long-term debt preparations to finance a portion of our operations.

That may be a ratio few fledgling biotechs can match — revenues of $6.3 billion, financings aggregating $4.1. The very title to Ionis’ Presentation slide 25 beneath offers a reassuring capstone to the Ionis story:

Conclusion

I’ve rated Ionis as a maintain though I’m fairly bullish about its long-term prospects. It has catalysts aplenty, together with these I’ve mentioned and others mentioned within the Name, as for instance: imminent Section 3 trial initiations for:

1. Bepirovirsen, a doubtlessly transformative remedy for individuals dwelling with persistent hepatitis B:
2. IONIS-FB-LRx which met its major finish level demonstrating substantial and clinically significant reductions in 24-hour urinary protein in sufferers with IgA nephropathy with a imply discount of 44%.

I do not fee Ionis a purchase solely as a result of it carries a market cap (01/12/2023) of $5.39 billion. It’s primed for disappointment following a choice on its SOD1 PDUFA. If the ruling is optimistic, it’s going to solely present modest income. Whether it is damaging, it’s going to solid doubt on its total pipeline.