Full Press Release Details
Ionis reports first quarter 2020 financial results and recent business achievements
On track to achieve 2020 financial guidance
Webcast today, May 6, 2020, at 11:30 a.m. Eastern Time
CARLSBAD, Calif., May 6, 2020 - Ionis Pharmaceuticals, Inc. (Nasdaq: IONS)
today reported its financial results for the first quarter of 2020 and recent business highlights.
"We achieved numerous value-driving catalysts in the first quarter, setting us up to achieve our strategic objectives for the year. Our commercial medicines continued
to perform well, led by SPINRAZA. Our late-stage pipeline continues to advance, and we are particularly pleased that the tominersen Phase 3 study is fully enrolled, bringing us closer to potentially delivering this medicine to patients with
Huntington's disease. Additionally, AKCEA-APO(a)-LRx was granted fast track designation in the U.S., underscoring the significant value this medicine could deliver to the millions of patients with Lp(a)-driven cardiovascular disease,"
said Brett P. Monia, chief executive officer at Ionis. "Thanks to the commitment and resilience of our employees, we delivered strong first quarter results while effectively managing the challenges inherent with the global COVID-19 pandemic,
keeping us on track to achieve our 2020 goals. We plan to initiate the pivotal study for AKCEA-APOCIII-LRx in patients with FCS, bringing us to six pivotal studies underway this year. We also plan to refile the WAYLIVRA U.S. NDA and
report additional proof-of-concept data from several of our programs this year. Our significant financial strength enables us to invest in our highest priorities, including advancing our Ionis-owned pipeline and our technology, and strengthening
our commercial capabilities. Together, these achievements keep us positioned to deliver NDAs for ten or more of our medicines through 2025."
Financial Results and Highlights
"We are reaffirming our 2020 financial guidance, including ending 2020 meaningfully profitable. We expect our results to be driven by continued significant commercial
revenue and R&D revenue from numerous programs," said Elizabeth L. Hougen, chief financial officer of Ionis. "We remain well-capitalized, with a strong balance sheet and $2.4 billion in cash and investments. Enabled by our financial strength,
we have the resources to execute on our near- and longer-term strategic priorities, even in the challenging COVID-19 pandemic environment."
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 Medicine Highlights
Ionis' revenue was comprised of the following (amounts in millions):
| Three months ended, March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenue: | ||||||||
| Commercial revenue: | ||||||||
| SPINRAZA royalties | $ | 66 | $ | 60 | ||||
| Product sales, net | 15 | 7 | ||||||
| Licensing and royalty revenue | 3 | 1 | ||||||
| Total commercial revenue | 84 | 68 | ||||||
| R&D Revenue: | ||||||||
| Amortization from upfront payments | 21 | 36 | ||||||
| Milestone payments | 23 | 40 | ||||||
| License fees | - | 150 | ||||||
| Other services | 5 | 3 | ||||||
| Total R&D revenue | 49 | 229 | ||||||
| Total revenue | $ | 133 | $ | 297 |
R&D revenue in the first quarter of 2019 included $185 million from two large items, including $150 million for the license of AKCEA-APO(a)-LRx.
Operating expenses increased for the first quarter of 2020, compared to the same period in 2019, principally due to Ionis' investments in the global launches of
TEGSEDI and WAYLIVRA, the Phase 3 program for AKCEA-TTR-LRx and the Company's Ionis-owned pipeline.
Income Tax Expense (Benefit)
Ionis recorded an income tax benefit in the first quarter of 2020, compared to income tax expense in the same period in 2019. Ionis recorded an income tax benefit in
the first quarter of 2020 because it generated a pre-tax loss.
Net (Income) Loss Attributable to Noncontrolling Interest in Akcea
At March 31, 2020, 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 a net loss attributable to noncontrolling interest in Akcea in the first quarter of 2020 compared to net income in the first quarter of 2019. Net income attributable to noncontrolling interest in
Akcea in the first quarter of 2019 was due to the significant license fee revenue Akcea earned when Novartis licensed AKCEA-APO(a)-LRx.
Net Income (Loss) Attributable to Ionis Common Stockholders
Ionis' net loss attributable to Ionis' common stockholders for the first quarter of 2020 was primarily due to Ionis' investments in advancing its strategic priorities.
Ionis' net income attributable to Ionis' common stockholders for the first quarter of 2019 was primarily due to the $150 million in revenue the Company earned when Novartis licensed AKCEA-APO(a)-LRx combined with lower operating expenses
compared to the first quarter of 2020.
Ionis ended the first quarter of 2020 with cash, cash equivalents and short-term investments of $2.4 billion, nearly flat compared to $2.5 billion at December 31,
2019. During the first quarter of 2020, Ionis repurchased 1.5 million shares of its common stock under its share repurchase program for a total purchase price of $91 million.
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 potentially treat a broad range of diseases, including neurological, cardiovascular, infectious, and pulmonary diseases.
*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, including those related to the impact
COVID-19 could have on our business, and including but not limited to those related to our commercial products and the medicines in our pipeline, and 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, 2019, which is on file with the SEC. Copies of this 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 ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| Revenue: | ||||||||
| Commercial revenue: | ||||||||
| SPINRAZA royalties | $ | 66 | $ | 60 | ||||
| Product sales, net | 15 | 7 | ||||||
| Licensing and royalty revenue | 3 | 1 | ||||||
| Total commercial revenue | 84 | 68 | ||||||
| Research and development revenue under collaborative agreements | 49 | 229 | ||||||
| Total revenue | 133 | 297 | ||||||
| Expenses: | ||||||||
| Cost of products sold | 3 | 1 | ||||||
| Research, development and patent | 116 | 107 | ||||||
| Selling, general and administrative | 75 | 68 | ||||||
| Total operating expenses | 194 | 176 | ||||||
| Income (loss) from operations | (61 | ) | 121 | |||||
| Other income (expense): | ||||||||
| Investment income | 10 | 12 | ||||||
| Interest expense | (11 | ) | (12 | ) | ||||
| Income (loss) before income tax benefit (expense) | (62 | ) | 121 | |||||
| Income tax benefit (expense) | 3 | (31 | ) | |||||
| Net income (loss) | $ | (59 | ) | $ | 90 | |||
| Net (income) loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. | 11 | (6 | ) | |||||
| Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders | $ | (48 | ) | $ | 84 | |||
| Basic net income (loss) per share | $ | (0.35 | ) | $ | 0.63 | |||
| Diluted net income (loss) per share | $ | (0.35 | ) | $ | 0.62 | |||
| Shares used in computing basic net income (loss) per share | 139,429 | 138,582 | ||||||
| Shares used in computing diluted net income (loss) per share | 139,429 | 141,537 |
IONIS PHARMACEUTICALS, INC.
SELECTED FINANCIAL INFORMATION
Condensed Consolidating Statement of Operations
| Three months ended, March 31, 2020 (unaudited) | ||||||||||||||||
| Ionis | Akcea | Eliminations | Ionis Consolidated | |||||||||||||
| Revenue: | ||||||||||||||||
| Commercial revenue: | ||||||||||||||||
| SPINRAZA royalties | $ | $66 | $ | - | $ | - | $ | 66 | ||||||||
| Product sales, net | - | 15 | - | 15 | ||||||||||||
| Licensing and royalty revenue | 3 | - | - | 3 | ||||||||||||
| Total commercial revenue | 69 | 15 | - | 84 | ||||||||||||
| Research and development revenue under collaborative agreements | 48 | 1 | - | 49 | ||||||||||||
| Intercompany revenue | 1 | - | (1 | ) | - | |||||||||||
| Total revenue | 118 | 16 | (1 | ) | 133 | |||||||||||
| Expenses: | ||||||||||||||||
| Cost of products sold | - | 5 | (2 | ) | 3 | |||||||||||
| Research, development and patent expenses | 99 | 17 | - | 116 | ||||||||||||
| Selling, general and administrative | 29 | 46 | - | 75 | ||||||||||||
| Profit/ loss share for TEGSEDI commercialization activities | 7 | (7 | ) | - | - | |||||||||||
| Total operating expenses | 135 | 61 | (2 | ) | 194 | |||||||||||
| Loss from operations | (17 | ) | (45 | ) | 1 | (61 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Investment income | 9 | 1 | - | 10 | ||||||||||||
| Interest expense | (11 | ) | - | - | (11 | ) | ||||||||||
| Loss on early retirement of debt | - | - | - | - | ||||||||||||
| Loss before income tax benefit | (19 | ) | (44 | ) | 1 | (62 | ) | |||||||||
| Income tax benefit | 2 | 1 | - | 3 | ||||||||||||
| Net loss | $ | (17 | ) | $ | (43 | ) | $ | 1 | $ | (59 | ) | |||||
| Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. | $ | - | $ | - | $ | 11 | $ | 11 | ||||||||
| Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders | $ | (17 | ) | $ | (43 | ) | $ | 12 | $ | (48 | ) |
IONIS PHARMACEUTICALS, INC.
Reconciliation of GAAP to Non-GAAP Basis:
Condensed Consolidated Operating Expenses, Income (Loss) From Operations, and Net Income (Loss)
| Three months ended, March 31 , | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| As reported research, development and patent expenses according to GAAP | $ | 116 | $ | 107 | ||||
| Excluding compensation expense related to equity awards | (26 | ) | (25 | ) | ||||
| Non-GAAP research, development and patent expenses | $ | 90 | $ | 82 | ||||
| As reported selling, general and administrative expenses according to GAAP | $ | 75 | $ | 68 | ||||
| Excluding compensation expense related to equity awards | (15 | ) | (21 | ) | ||||
| Non-GAAP selling, general and administrative expenses | $ | 60 | $ | 47 | ||||
| As reported operating expenses according to GAAP | $ | 194 | $ | 176 | ||||
| Excluding compensation expense related to equity awards | (41 | ) | (46 | ) | ||||
| Non-GAAP operating expenses | $ | 153 | $ | 130 | ||||
| As reported income (loss) from operations according to GAAP | $ | (61 | ) | $ | 121 | |||
| Excluding compensation expense related to equity awards | (41 | ) | (46 | ) | ||||
| Non-GAAP income (loss) from operations | $ | (20 | ) | $ | 167 | |||
| As reported net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders according to GAAP | $ | (48 | ) | $ | 84 | |||
| Excluding compensation expense related to equity awards attributable to Ionis Pharmaceuticals, Inc. common stockholders | (39 | ) | (42 | ) | ||||
| Income tax effect related to compensation expense related to equity awards attributable to Ionis Pharmaceuticals, Inc. common stockholders | 6 | (1 | ) | |||||
| Non-GAAP net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders according to GAAP | $ | (15 | ) | $ | 127 |
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
| March 31, 2020 | December 31, 2019 | |||||||
| (unaudited) | ||||||||
| Assets: | ||||||||
| Cash, cash equivalents and short-term investments | $ | 2,384 | $ | 2,500 | ||||
| Contracts receivable | 29 | 63 | ||||||
| Other current assets | 145 | 158 | ||||||
| Property, plant and equipment, net | 164 | 154 | ||||||
| Other assets | 369 | 358 | ||||||
| Total assets | $ | 3,091 | $ | 3,233 | ||||
| Liabilities and stockholders' equity: | ||||||||
| Other current liabilities | $ | 137 | $ | 155 | ||||
| Current portion of deferred contract revenue | 121 | 118 | ||||||
| 0.125% convertible senior notes | 440 | 435 | ||||||
| 1% convertible senior notes | 280 | 275 | ||||||
| Long-term obligations, less current portion | 75 | 75 | ||||||
| Long-term deferred contract revenue | 468 | 490 | ||||||
| Total Ionis stockholders' equity | 1,360 | 1,471 | ||||||
| Noncontrolling interest in Akcea Therapeutics, Inc. | 210 | 214 | ||||||
| Total stockholders' equity | 1,570 | 1,685 | ||||||
| Total liabilities and stockholders' equity | $ | 3,091 | $ | 3,233 |
IONIS PHARMACEUTICALS, INC.
Condensed Consolidating Balance Sheet
| March 31, 2020 (unaudited) | ||||||||||||||||
| Ionis | Akcea | Eliminations | Ionis Consolidated | |||||||||||||
| Assets: | ||||||||||||||||
| Cash, cash equivalents and short-term investments | $ | 1,963 | $ | 421 | $ | - | $ | 2,384 | ||||||||
| Contracts receivable | 17 | 12 | - | 29 | ||||||||||||
| Other current assets | 121 | 26 | (2 | ) | 145 | |||||||||||
| Property, plant and equipment, net | 159 | 5 | - | 164 | ||||||||||||
| Other assets | 1,116 | 96 | (843 | ) | 369 | |||||||||||
| Total assets | $ | 3,376 | $ | 560 | $ | (845 | ) | $ | 3,091 | |||||||
| Liabilities and stockholders' equity: | ||||||||||||||||
| Other current liabilities | 104 | 35 | (2 | ) | 137 | |||||||||||
| Current portion of deferred contract revenue | 120 | 1 | - | 121 | ||||||||||||
| 0.125% convertible senior notes | 440 | - | - | 440 | ||||||||||||
| 1% convertible senior notes | 280 | - | - | 280 | ||||||||||||
| Long-term obligations, less current portion | 61 | 14 | - | 75 | ||||||||||||
| Long-term deferred contract revenue | 470 | - | (2 | ) | 468 | |||||||||||
| Total stockholders' equity before noncontrolling interest | 1,901 | 510 | (1,051 | ) | 1,360 | |||||||||||
| Noncontrolling interest in Akcea Therapeutics, Inc. | - | - | 210 | 210 | ||||||||||||
| Total stockholders' equity | $ | 1,901 | $ | 510 | $ | (841 | ) | $ | 1,570 | |||||||
| Total liabilities and stockholders' equity | $ | 3,376 | $ | 560 | $ | (845 | ) | $ | 3,091 |