Full Press Release Details
Ionis provides fourth quarter and full year 2019 financial results
2019 revenues nearly doubled to more than $1.1 billion
Exceeded improved 2019 guidance
2020 guidance reflects investment in strategic priorities
Webcast today, February 26, 2020, at 11:30 a.m. Eastern Time
CARLSBAD, Calif., February 26, 2020 - Ionis Pharmaceuticals, Inc. (Nasdaq: IONS)
today reported its financial results for the fourth quarter and full year 2019 and recent business highlights.
"2019 was an exceptional year. We achieved our goals across the business, including advancing four medicines into pivotal studies and growing our Ionis-owned pipeline.
We also made significant progress across our broad pipeline, including in our neurological and cardiometabolic disease franchises, and further advanced our antisense technology through investments in new, complementary technologies. Together these
achievements position us to deliver on our goal of ten or more new drug applications through 2025," said Brett P. Monia, chief executive officer at Ionis. "This year, our
priorities include further growing and advancing our Ionis-owned pipeline, initiating additional Phase 3 studies, reporting clinical proof-of-concept results from six or more studies and further developing our commercial strategy to maximize the
value of each medicine in our pipeline."
2019 Financial Results and Highlights
2020 Financial Guidance
The Company's full year 2020 financial guidance consists of the following components (on a non-GAAP basis):
| Guidance | |
| Revenue | >$700 million |
| Operating Expenses | ~$650 million to $690 million |
| Meaningfully Profitable |
"2019 was also an exceptional year financially, with growth in both commercial revenues and R&D revenues. We delivered over $1 billion in revenue and more than $400
million in net income. Our revenue nearly doubled compared to 2018, driven primarily by nearly $400 million in revenue from licensing AKCEA-APO(a)-LRx and AKCEA-ANGPTL3-LRx, both of which could address very large patient populations. We achieved our third consecutive year of net income while investing substantially in our pipeline and technology," said Elizabeth L. Hougen, chief financial officer of
Ionis. "This year, we expect to be meaningfully profitable. We expect growth in commercial revenues, with another strong year for SPINRAZA combined with growing revenue from TEGSEDI and WAYLIVRA as we expand into new countries. We also expect to
achieve important milestones as we advance our medicines in development. Our projected increase in operating expenses reflects our plan to continue investing aggressively in all aspects of our business to generate substantial value, including growing
and advancing our Ionis-owned pipeline and further advancing and broadening our technology. With a 2019 year-end cash balance of $2.5 billion, we have the financial strength to fully execute on these strategic priorities."
All non-GAAP amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the
reconciliation of non-GAAP and GAAP measures, which is provided later in this release.
Commercial Medicines
Neurological Disease Franchise
Cardiometabolic Disease Franchise
Ionis' revenue increased by more than 85 percent in 2019 compared to the same period in 2018 and was comprised of the following (amounts in millions):
| Three months ended, December 31, | Year ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Revenue: | ||||||||||||||||
| Commercial revenue: | ||||||||||||||||
| SPINRAZA royalties | $ | 81 | $ | 70 | $ | 293 | $ | 238 | ||||||||
| Product sales, net | 13 | 2 | 42 | 2 | ||||||||||||
| Licensing and royalty revenue | 6 | 1 | 17 | 15 | ||||||||||||
| Total commercial revenue | 100 | 73 | 352 | 255 | ||||||||||||
| R&D Revenue: | ||||||||||||||||
| Amortization from upfront payments | 46 | 33 | 146 | 125 | ||||||||||||
| Milestone payments | 51 | 38 | 115 | 83 | ||||||||||||
| License fees | 292 | 38 | 490 | 102 | ||||||||||||
| Other services | 5 | 10 | 20 | 35 | ||||||||||||
| Total R&D revenue | 394 | 119 | 771 | 345 | ||||||||||||
| Total revenue | $ | 494 | $ | 192 | $ | 1,123 | $ | 600 |
Operating expenses increased for the year ended December 31, 2019, compared to the same period in 2018 principally due to Ionis' investment in the global launch of
TEGSEDI, the EU launch of WAYLIVRA and advancing medicines in the Company's pipeline.
Loss on Early Retirement of Debt
In December 2019, Ionis refinanced a significant portion of its 1% convertible senior notes due 2021 (1% Notes) for new 0.125% convertible senior notes due 2024 (0.125%
Notes). Ionis significantly reduced its interest rate, extended the maturity to December 2024 and increased the conversion price. As a result of the early refinance of the 1% Notes, Ionis recognized a $22 million non-cash loss in 2019.
Income Tax Expense (Benefit)
Ionis' income tax expense in 2019 was primarily because the Company generated U.S. federal and state taxable income in 2019. The tax benefit in 2018 was due to a
one-time non-cash tax benefit recognized in 2018 related the Company's deferred income tax assets.
Net (Income) Loss Attributable to Noncontrolling Interest in Akcea
At December 31, 2019, Ionis owned approximately 76 percent of Akcea. The shares of Akcea third
parties own represent an interest in Akcea's equity that Ionis does not control. However, because Ionis continues to maintain overall control of Akcea through its voting interest, Ionis reflects the assets, liabilities and results of operations of
Akcea in Ionis' consolidated financial statements. Ionis reflects the noncontrolling interest attributable to other owners of Akcea's common stock in a separate line called "Net (income) loss attributable to noncontrolling interest in Akcea" on
Ionis' statement of operations. Ionis recognized net income attributable to noncontrolling interest in Akcea in 2019 compared to a net loss in 2018. Ionis had net income attributable to noncontrolling interest in Akcea in 2019 primarily because
Akcea earned significant license fee revenue from Novartis and Pfizer in 2019 which led to Akcea having net income for 2019.
Net Income Attributable to Ionis Common Stockholders
Ionis' net income attributable to Ionis' common stockholders and basic and diluted earnings per share increased in 2019 compared to 2018 primarily due to the significant
increase in Ionis' revenue. Somewhat offsetting this increase was income tax expense the Company recognized in 2019 compared to a one-time non-cash tax benefit recognized in 2018 related to the Company's deferred income tax assets.
Ionis strengthened its balance sheet, ending 2019 with cash, cash equivalents and short-term investments of $2.5 billion, compared to $2.1
billion at December 31, 2018.
Today, at 11:30 a.m. Eastern Time, Ionis will conduct a live webcast to discuss this earnings release and related activities. Interested parties may access the webcast here. A webcast replay will be available for a limited time at the same address.
About Ionis Pharmaceuticals, Inc.
As the leader in RNA-targeted drug discovery and development, Ionis has created an efficient, broadly applicable, drug discovery platform called
antisense technology that can treat diseases where no other therapeutic approaches have proven effective. Our drug discovery platform has served as a springboard for actionable promise and realized hope for patients with unmet needs. We created the
first and only approved treatment for children and adults with spinal muscular atrophy as well as the world's first RNA-targeted therapeutic approved for the treatment of polyneuropathy in adults with hereditary transthyretin amyloidosis. Our sights
are set on all the patients we have yet to reach with a pipeline of more than 40 novel medicines designed to treat a broad range of diseases including cardiovascular diseases, neurological diseases, infectious diseases, pulmonary diseases and cancer.
*Spinraza is marketed by Biogen.
Ionis' Forward-looking Statement
This press release includes forward-looking statements regarding Ionis' business, financial guidance and the therapeutic and commercial potential of SPINRAZA
(nusinersen), TEGSEDI (inotersen) and WAYLIVRA (volanesorsen) and Ionis' technologies and products in development, including the business of Akcea Therapeutics, Inc., Ionis' majority-owned affiliate. Any statement describing Ionis' goals,
expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, particularly those inherent in the
process of discovering, developing and commercializing medicines that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such medicines. Ionis' forward-looking statements also involve assumptions
that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Ionis' forward-looking statements reflect the good faith judgment of its
management, these statements are based only on facts and factors currently known by Ionis. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Ionis' programs are described in additional
detail in Ionis' annual report on Form 10-K for the year ended December 31, 2018, and the most recent Form 10-Q quarterly filing, which are on file with the SEC. Copies of these and other documents are available from the Company.
In this press release, unless the context requires otherwise, "Ionis," "Company," "we," "our," and "us" refers to Ionis Pharmaceuticals and its subsidiaries.
Ionis Pharmaceuticals is a trademark of Ionis Pharmaceuticals, Inc. Akcea Therapeutics is a registered trademark of Akcea Therapeutics, Inc. TEGSEDI
is a registered trademark of Akcea Therapeutics, Inc. WAYLIVRA is a registered trademark of Akcea Therapeutics, Inc. SPINRAZA is a registered trademark of Biogen.
Ionis Pharmaceuticals Investor Contact:
D. Wade Walke, Ph.D.
Vice President, Investor Relations
Ionis Pharmaceuticals Media Contact:
Vice President, Corporate Communications
IONIS PHARMACEUTICALS, INC.
SELECTED FINANCIAL INFORMATION
Condensed Consolidated Statements of Operations
(In Millions, Except Per Share Data)
| Three months December 31, | Year ended December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Revenue: | ||||||||||||||||
| Commercial revenue: | ||||||||||||||||
| SPINRAZA royalties | $ | 81 | $ | 70 | $ | 293 | $ | 238 | ||||||||
| Product sales, net | 13 | 2 | 42 | 2 | ||||||||||||
| Licensing and royalty revenue | 6 | 1 | 17 | 15 | ||||||||||||
| Total commercial revenue | 100 | 73 | 352 | 255 | ||||||||||||
| Research and development revenue under collaborative agreements | 394 | 119 | 771 | 345 | ||||||||||||
| Total revenue | 494 | 192 | 1,123 | 600 | ||||||||||||
| Expenses: | ||||||||||||||||
| Cost of products sold | 1 | 1 | 4 | 2 | ||||||||||||
| Research, development and patent | 149 | 113 | 466 | 414 | ||||||||||||
| Selling, general and administrative | 83 | 67 | 287 | 245 | ||||||||||||
| Total operating expenses | 233 | 181 | 757 | 661 | ||||||||||||
| Income (loss) from operations | 261 | 11 | 366 | (61 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||
| Investment income | 13 | 11 | 52 | 30 | ||||||||||||
| Interest expense | (14 | ) | (11 | ) | (49 | ) | (45 | ) | ||||||||
| Loss on early retirement of debt | (22 | ) | - | (22 | ) | - | ||||||||||
| Income (loss) before income tax (expense) benefit | 238 | 11 | 347 | (76 | ) | |||||||||||
| Income tax (expense) benefit | (34 | ) | 292 | (44 | ) | 291 | ||||||||||
| Net income | $ | 204 | $ | 303 | $ | 303 | $ | 215 | ||||||||
| Net (income) loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. | (20 | ) | 17 | (9 | ) | 59 | ||||||||||
| Net income attributable to Ionis Pharmaceuticals, Inc. common stockholders | $ | 184 | $ | 320 | $ | 294 | $ | 274 | ||||||||
| Basic net income per share | $ | 1.31 | $ | 2.32 | $ | 2.12 | $ | 2.09 | ||||||||
| Diluted net income per share | $ | 1.28 | $ | 2.21 | $ | 2.08 | $ | 2.07 | ||||||||
| Shares used in computing basic net income per share | 141 | 138 | 140 | 132 | ||||||||||||
| Shares used in computing diluted net income per share | 153 | 150 | 143 | 134 |
IONIS PHARMACEUTICALS, INC.
SELECTED FINANCIAL INFORMATION
Condensed Consolidating Statement of Operations
| Year Ended, December 31, 2019 | ||||||||||||||||
| Ionis | Akcea | Eliminations | Ionis Consolidated | |||||||||||||
| Revenue: | ||||||||||||||||
| Commercial revenue: | ||||||||||||||||
| SPINRAZA royalties | $ | $293 | $ | - | $ | - | $ | 293 | ||||||||
| Product sales, net | - | 42 | - | 42 | ||||||||||||
| Licensing and royalty revenue | 7 | 10 | - | 17 | ||||||||||||
| Total commercial revenue | 300 | 52 | - | 352 | ||||||||||||
| Research and development revenue under collaborative agreements | 334 | 437 | - | 771 | ||||||||||||
| Intercompany revenue | 225 | - | (225 | ) | - | |||||||||||
| Total revenue | 859 | 489 | (225 | ) | 1,123 | |||||||||||
| Expenses: | ||||||||||||||||
| Cost of products sold | 2 | 11 | (9 | ) | 4 | |||||||||||
| Research, development and patent expenses | 379 | 293 | (206 | ) | 466 | |||||||||||
| Selling, general and administrative | 143 | 146 | (2 | ) | 287 | |||||||||||
| Profit/ loss share for TEGSEDI commercialization activities | 37 | (37 | ) | - | - | |||||||||||
| Total operating expenses | 561 | 413 | (217 | ) | 757 | |||||||||||
| Income (loss) from operations | 298 | 76 | (8 | ) | 366 | |||||||||||
| Other income (expense): | ||||||||||||||||
| Investment income | 47 | 5 | - | 52 | ||||||||||||
| Interest expense | (49 | ) | - | - | (49 | ) | ||||||||||
| Loss on early retirement of debt | (22 | ) | - | - | (22 | ) | ||||||||||
| Income before income tax expense | 274 | 81 | (8 | ) | 347 | |||||||||||
| Income tax expense | (41 | ) | (3 | ) | - | (44 | ) | |||||||||
| Net income (loss) | $ | 233 | $ | 78 | $ | (8 | ) | $ | 303 | |||||||
| Net income attributable to noncontrolling interest in Akcea Therapeutics, Inc. | - | - | (9 | ) | (9 | ) | ||||||||||
| Net income attributable to Ionis Pharmaceuticals, Inc. common stockholders | $ | 233 | $ | 78 | $ | (17 | ) | $ | 294 |
IONIS PHARMACEUTICALS, INC.
Reconciliation of GAAP to Non-GAAP Basis:
Condensed Consolidated Operating Expenses, Income (Loss) From Operations, and Net Income
| Three months ended, December 31 , | Year ended, December 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (unaudited) | ||||||||||||||||
| As reported research, development and patent expenses according to GAAP | $ | 149 | $ | 113 | $ | 466 | $ | 415 | ||||||||
| Excluding compensation expense related to equity awards | (23 | ) | (18 | ) | (95 | ) | (77 | ) | ||||||||
| Non-GAAP research, development and patent expenses | $ | 126 | $ | 95 | $ | 371 | $ | 338 | ||||||||
| As reported selling, general and administrative expenses according to GAAP | $ | 83 | $ | 67 | $ | 287 | $ | 245 | ||||||||
| Excluding compensation expense related to equity awards | (12 | ) | (15 | ) | (51 | ) | (55 | ) | ||||||||
| Non-GAAP selling, general and administrative expenses | $ | 71 | $ | 52 | $ | 236 | $ | 190 | ||||||||
| As reported operating expenses according to GAAP | $ | 233 | $ | 181 | $ | 757 | $ | 661 | ||||||||
| Excluding compensation expense related to equity awards | (35 | ) | (34 | ) | (147 | ) | (131 | ) | ||||||||
| Non-GAAP operating expenses | $ | 198 | $ | 147 | $ | 610 | $ | 530 | ||||||||
| As reported income (loss) from operations according to GAAP | $ | 261 | $ | 11 | $ | 366 | $ | (61 | ) | |||||||
| Excluding compensation expense related to equity awards | (35 | ) | (34 | ) | (147 | ) | (131 | ) | ||||||||
| Non-GAAP income from operations | $ | 296 | $ | 45 | $ | 513 | $ | 70 | ||||||||
| As reported net income attributable to Ionis Pharmaceuticals, Inc. common stockholders according to GAAP | $ | 184 | $ | 320 | $ | 294 | $ | 274 | ||||||||
| Excluding compensation expense related to equity awards attributable to Ionis Pharmaceuticals, Inc. common stockholders | (33 | ) | (31 | ) | (139 | ) | (120 | ) | ||||||||
| Income tax effect related to compensation expense related to equity awards attributable to Ionis Pharmaceuticals, Inc. common stockholders | 5 | 21 | 31 | 21 | ||||||||||||
| Non-GAAP net income attributable to Ionis Pharmaceuticals, Inc. common stockholders according to GAAP | $ | 212 | $ | 330 | $ | 402 | $ | 373 |
Reconciliation of GAAP to Non-GAAP Basis
As illustrated in the Selected Financial Information in this press release, non-GAAP operating expenses, non-GAAP income (loss) from operations, and non-GAAP net income
(loss) attributable to Ionis Pharmaceuticals, Inc. common shareholders were adjusted from GAAP to exclude compensation expense related to equity awards and the related tax effect. Compensation expense related to equity awards are non-cash. Ionis has
regularly reported non-GAAP measures for operating results as non-GAAP results. These measures are provided as supplementary information and are not a substitute for financial measures calculated in accordance with GAAP. Ionis reports these non-GAAP
results to better enable financial statement users to assess and compare its historical performance and project its future operating results and cash flows. Further, the presentation of Ionis' non-GAAP results is consistent with how Ionis' management
internally evaluates the performance of its operations.
IONIS PHARMACEUTICALS, INC.
Condensed Consolidated Balance Sheets
| December 31, 2019 | December 31, 2018 | |||||||
| Assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 2,500 | $ | 2,084 | ||||
| Contracts receivable | 63 | 13 | ||||||
| Other current assets | 158 | 111 | ||||||
| Property, plant and equipment, net | 154 | 132 | ||||||
| Other assets | 358 | 328 | ||||||
| Total assets | $ | 3,233 | $ | 2,668 | ||||
| Liabilities and stockholders' equity: | ||||||||
| Other current liabilities | $ | 155 | $ | 120 | ||||
| Current portion of deferred contract revenue | 118 | 160 | ||||||
| 1% convertible senior notes | 275 | 568 | ||||||
| 0.125% convertible senior notes | 435 | - | ||||||
| Long-term obligations, less current portion | 75 | 65 | ||||||
| Long-term deferred contract revenue | 490 | 567 | ||||||
| Total Ionis stockholders' equity | 1,471 | 1,049 | ||||||
| Noncontrolling interest in Akcea Therapeutics, Inc. | 214 | 139 | ||||||
| Total stockholders' equity | 1,685 | 1,188 | ||||||
| Total liabilities and stockholders' equity | $ | 3,233 | $ | 2,668 |
IONIS PHARMACEUTICALS, INC.
Condensed Consolidating Balance Sheet
| December 31, 2019 | ||||||||||||||||
| Ionis | Akcea | Eliminations | Ionis Consolidated | |||||||||||||
| Assets: | ||||||||||||||||
| Cash, cash equivalents and short-term investments | $ | 2,036 | $ | 464 | $ | - | $ | 2,500 | ||||||||
| Contracts receivable | 53 | 10 | - | 63 | ||||||||||||
| Other current assets | 138 | 23 | (3 | ) | 158 | |||||||||||
| Property, plant and equipment, net | 149 | 5 | - | 154 | ||||||||||||
| Other assets | 1,105 | 97 | (844 | ) | 358 | |||||||||||
| Total assets | $ | 3,481 | $ | 599 | $ | (847 | ) | $ | 3,233 | |||||||
| Liabilities and stockholders' equity: | ||||||||||||||||
| Other current liabilities | $ | 118 | $ | 40 | $ | (3 | ) | $ | 155 | |||||||
| Current portion of deferred contract revenue | 116 | 2 | - | 118 | ||||||||||||
| 1% convertible senior notes | 275 | - | - | 275 | ||||||||||||
| 0.125% convertible senior notes | 435 | - | 435 | |||||||||||||
| Long-term obligations, less current portion | 61 | 14 | - | 75 | ||||||||||||
| Long-term deferred contract revenue | 492 | - | (2 | ) | 490 | |||||||||||
| Total stockholders' equity before noncontrolling interest | 1,984 | 543 | (1,056 | ) | 1,471 | |||||||||||
| Noncontrolling interest in Akcea Therapeutics, Inc. | - | - | 214 | 214 | ||||||||||||
| Total stockholders' equity | 1,984 | 543 | (842 | ) | 1,685 | |||||||||||
| Total liabilities and stockholders' equity | $ | 3,481 | $ | 599 | $ | (847 | ) | $ | 3,233 |