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Ionis Pharmaceuticals stock surges on Q2 earnings beat

Ionis Pharmaceuticals (NASDAQ: IONS) reported better-than-expected second quarter results pushing the stock above 3% in the pre-market trading hours. The share price has recovered 56% in the past 12 months after it touched a new 52-week low of $41 mark in August last year.

Revenue rose 39% to $164 million aided by solid contribution from the product sales and research fees. Loss per share contracted to 1 cent per share compared to loss of 29 cents last year. The reduction in loss is primarily attributed to improvement in top line in the second quarter. For the Q2 period, Wall Street was anticipating revenue of $145.5 million and loss per share of 27 cents per share.

Talking about the strong quarterly results, CEO Stanley Crooke said, “We enter the second half of 2019 in a position of substantial financial strength driven by revenue growth of more than 75 percent. SPINRAZA’s blockbuster performance, with over $1 billion in net sales in the first half, contributed significantly to our strong financial results.”

Product Sales

SPINRAZA drug continues to be a money spinner for Ionis. The drug which is used to treat patients who are diagnosed with spinal muscular atrophy (SMA) saw its sales surpassing $1 billion in the first six months of 2019 and joined the blockbuster drug club. Royalty revenue from SPINRAZA rose 25% in the second quarter.

The royalty fee from Biogen is expected to increase consistently in the near future as Biogen believes there are about 45,000 patients to target globally where it has a direct presence. As more number of patients are treated using SPINRAZA from the current level of 8,400 patients, it’s going to be accretive to earnings in the long-term for Ionis.

Polyneuropathy drug TEGSEDI brought in $10 million in the Q2 period, up 43% from the first quarter. Ionis is planning to launch TEGSEDI in European Union and Latin America, which is expected to beef up the bottom line, reducing the dependency for Ionis from SPINRAZA.


Ionis’ affiliate Akcea Therapeutics is planning to launch WAYLIVRA in the European Union region this month. The drug is used for the treatment for patients who are diagnosed with familial chylomicronemia syndrome (FCS) and at high risk for pancreatitis.

The company is also preparing for getting the nod from the Food and Drug Administration (FDA) for launching the drug in the US. If all goes well, WAYLIVRA would be boosting the top line in the fiscal 2020 period.

Drug Pipeline

Ionis has a healthy pipeline of drugs in various stages of clinical trials. Currently, there are two drugs in Phase 3 trials and couple more are going to start the Phase 3 studies this year. Apart from this, two drugs has commenced their Phase 2 trials. In the next couple of years, a few of these drugs in the late-stage pipeline could be hitting the market, depending upon the outcome of the trials.

Looking Ahead

For the third quarter, analysts are anticipating revenue of $158.8 million and loss per share of 29 cents. For the fiscal 2019 period, top line is projected to come in at $772.7 million while loss per share is expected to be 29 cents.

The company has earlier guided 2019 revenue of above $725 million, out of which 64% is already achieved in the first half. Investors would be expecting the management to revise the guidance in the third quarter. 

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