Press Releases
Ionis Reports Fourth Quarter and Full Year 2017 Financial Results
"In 2017, our accomplishments were remarkable. The historic launch of SPINRAZA and the acceptance of our regulatory filings for inotersen and volanesorsen, which set up potential launches of these two drugs in 2018, combined with our strong financial performance, demonstrate our ability to execute across all areas of our business. We also advanced our pipeline of novel drugs with positive data readouts from 11 clinical studies, including five with our LICA drugs, and introduced eight new drugs to the pipeline, further highlighting the broad capabilities and potential of our antisense technology platform," said
"Looking ahead, we believe 2018 could be an important turning point for Ionis. Most important will be the launch of inotersen and volanesorsen, if approved. We also expect to report data from at least six Phase 2 studies, initiate at least five Phase 2 programs and report data from multiple proof-of-concept clinical studies. These important events build on our recent momentum, solidifying Ionis as a multi-product, commercial company delivering innovative antisense medicines to patients in need," continued Crooke. "As we advance our pipeline of antisense drugs and achieve important milestones in our collaborations, we expect to continue to provide substantial value to our shareholders and the patients we serve."
Financial Results and Highlights
- Revenues for 2017 increased by more than 45%
- For the fourth quarter and full year 2017, revenue was
$172 million and$508 million , compared to$160 million and$347 million for the same periods in 2016. - Commercial revenue for 2017 was
$113 million from SPINRAZA royalties and$9 million from other licensing and royalty payments. R&D revenue for 2017 was$386 million and increased by nearly 20% from 2016.
- For the fourth quarter and full year 2017, revenue was
- Operating income for 2017 increased by more than 150%, driven by strong revenues and reflecting prudent expense management
- GAAP operating income was
$25 million for 2017, compared to a GAAP operating loss of$46 million for the same period in 2016. Pro forma operating income was$111 million for 2017, compared to$26 million for the same period in 2016. - Operating expenses increased at a much slower rate than revenue with the increase primarily due to higher SG&A expenses as Ionis prepares to commercialize volanesorsen and inotersen this year.
- GAAP operating income was
- Substantial cash position enabled pipeline progress
- As of December 31, 2017, Ionis had cash, cash equivalents and short-term investments of more than $1 billion compared to $665 million at December 31, 2016.
- During 2017 Ionis received over
$580 million in partner payments. Additionally, Ionis' cash balance at December 31, 2017 included proceeds from Akcea's 2017 IPO andNovartis' strategic investment in Akcea.
"2017 was our first year of commercial revenue in which we earned
All pro forma amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of pro forma and GAAP measures, which is provided later in this release.
Recent Pipeline and Technology Highlights
- SPINRAZA for SMA – one of the most successful orphan drug launches in history
- SPINRAZA®, commercialized by Biogen, generated 2017 global sales of
$884 million - Results from the ENDEAR study and CHERISH study, in which people with infantile-onset and later-onset SMA, respectively, were treated with SPINRAZA, were published in
The New England Journal of Medicine - Prestigious 2017
Prix Galien USA Award for Best Biotechnology Product awarded to Ionis and Biogen for SPINRAZA - New collaboration with Biogen initiated to discover new antisense drugs with enhanced properties to treat SMA
- SPINRAZA®, commercialized by Biogen, generated 2017 global sales of
- Inotersen for hATTR – potential to transform the lives of people with hATTR
- Marketing applications accepted, no
FDA Advisory Committee recommended, Priority Review in the U.S. and Accelerated Assessment in the EU - Preparations for global launch, planned for mid-2018, progressing
- Phase 3 NEURO-TTR study met both primary endpoints demonstrating benefit compared to placebo in multiple measures of quality of life and disease severity; 50% of inotersen-treated patients experienced improvement from baseline in quality of life
- Marketing applications accepted, no
- Volanesorsen for FCS and FPL – potential first treatment for people with FCS
- Marketing applications accepted in the U.S., EU and
Canada with Promising Innovative Medicine designation in theUK and Priority Review inCanada - Preparations for global launch for FCS, planned for mid-2018, progressing
- Phase 3 APPROACH study met primary endpoint of reducing triglyceride levels in people with FCS
- Marketing applications accepted in the U.S., EU and
- Pipeline Programs (early and mid-stage) – advancing wholly owned and partnered programs
- Positive results from seven Phase 2 studies reported, including:
- Positive data from Phase 1/2 study of IONIS-STAT3-2.5Rx in combination with
AstraZeneca's Imfinzi reported for people with head and neck cancer - Robust, dose-dependent reductions of mHTT observed in people with Huntington's disease treated with IONIS-HTTRx
- Positive data from Phase 1/2 study of IONIS-STAT3-2.5Rx in combination with
- Positive clinical data on five LICA drugs reported, demonstrating consistent, positive performance and sustained target reduction with potential for monthly or less frequent dosing
- Positive results from six Phase 1 studies reported
- Nine Phase 2 studies and four Phase 1 studies initiated across multiple therapeutic areas to treat people with both broad and rare diseases
- Positive results from seven Phase 2 studies reported, including:
"In 2017, we and our partners advanced key programs in all of our therapeutic areas, including cardiometabolic, oncology, neurology, and severe and rare disease. Of the eight new drugs we added to the pipeline, six were drugs that use our more potent LICA technology or Generation 2.5 chemistry, and two were drugs to treat neurodegenerative disorders. We also added to our pipeline our second orally delivered, locally acting drug for a GI autoimmune disease. These achievements demonstrate the success of our wholly owned and partnered programs," said
Expected Events Through Mid-2018
- Launch of inotersen for people with hATTR, if approved
- Launch of volanesorsen for people with FCS, if approved
- Report results from five Phase 2 programs, including data from studies with IONIS-HTTRx in people with Huntington's disease and data from a 6-12 month study with AKCEA-APO(a)-LRx in people with high Lp(a) and cardiovascular disease
- Initiate up to six Phase 2 or Phase 3 studies and three Phase 1 studies, including the initiation of a clinical study with follow-on LICA drug, IONIS-TTR-LRx
Revenue
Ionis' revenue for the fourth quarter and full year 2017 was
Commercial Revenue:
$113 million from SPINRAZA royalties; and$9 million from other licensing and royalty payments.
R&D Revenue:
$118 million in milestone payments from Biogen, including$90 million in milestone payments for SPINRAZA,$15 million for validating two undisclosed neurological disease targets and$10 million for initiating a Phase 1/2 study of IONIS-MAPTRx;$65 million from Bayer for the license of IONIS-FXI-LRx;$48 million fromRoche primarily for the license of IONIS-HTTRx;$10 million from Janssen for license of IONIS-JBI2-2.5Rx and initiation of Phase 1 study of IONIS-JBI1-2.5Rx;$115 million from the amortization of upfront fees; and$30 million from services Ionis performed for its partners, of which more than half related to manufacturing services.
Ionis' R&D revenue may fluctuate quarterly based on the nature and timing of payments under agreements with its partners and consists primarily of revenue from the amortization of upfront fees, milestone payments and license fees.
At the beginning of 2018, Ionis adopted the new revenue recognition accounting standard on a retrospective basis, which means that starting with the first quarter, Ionis will begin showing all periods presented using the new standard. The Company does not anticipate that there will be a significant impact to its previously reported revenue. Under the new standard, Ionis' revenue for 2017 will increase by approximately 3%.
Operating Expenses
Operating expenses for the fourth quarter and full year 2017 on a GAAP basis were $174.0 million and $483.1 million, respectively, and on a pro forma basis were $151.7 million and $397.2 million, respectively. This is compared to GAAP operating expenses of $119.2 million and $392.9 million and pro forma operating expenses of $104.0 million and $320.8 million for the same periods in 2016. Operating expenses increased in 2017, compared to 2016, principally due to higher SG&A expenses as Ionis prepares to commercialize volanesorsen and inotersen in 2018. The Company's SG&A expenses also increased in 2017 compared to 2016 because of fees it owes under its in-licensing agreements related to SPINRAZA.
Net Income (Loss)
Ionis reported a net loss of $4.7 million and
Additionally, in 2017, Ionis recorded two non-cash, non-recurring items in other expenses, which contributed to the Company's net loss. These two items were the previously capitalized fair value of the potential premium Ionis would have received from Novartis if Akcea had not completed its IPO and the loss the Company recognized on the purchase of its primary R&D facility. In 2016, Ionis recorded a
Net Loss Attributable to Noncontrolling Interest in
Akcea sold shares of its common stock to third parties in its IPO in
Net Income (Loss) Attributable to Ionis Common Stockholders
Ionis reported net income attributable to Ionis' common stockholders of $2.7 million for the fourth quarter of 2017, compared to
Webcast and Conference Call
Today, at
ABOUT
Ionis is the leading company in RNA-targeted drug discovery and development focused on developing drugs for patients who have the highest unmet medical needs, such as those patients with severe and rare diseases. Using its proprietary antisense technology, Ionis has created a large pipeline of first-in-class or best-in-class drugs, with over three dozen drugs in development. SPINRAZA® (nusinersen) has been approved in global markets for the treatment of spinal muscular atrophy (SMA). Biogen is responsible for commercializing SPINRAZA. Drugs that have successfully completed Phase 3 studies include inotersen, an antisense drug Ionis is developing to treat patients with hereditary TTR amyloidosis (hATTR), and volanesorsen, an antisense drug discovered by Ionis and co-developed by Ionis and
This press release includes forward-looking statements regarding Ionis' business, financial guidance and the therapeutic and commercial potential of SPINRAZA, inotersen, volanesorsen and Ionis' technologies and products in development, including the business of
In this press release, unless the context requires otherwise, "Ionis," "Company," "we," "our," and "us" refers to
Ionis Pharmaceuticals™ is a trademark of
IONIS PHARMACEUTICALS, INC. |
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SELECTED FINANCIAL INFORMATION |
|||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||||||||||||||||||||||
(In Thousands, Except Per Share Data) |
|||||||||||||||||||||||||||||||
Three months ended, |
Year ended, |
||||||||||||||||||||||||||||||
December 31, |
December 31, |
||||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||||||||||||||
Revenue: |
(unaudited) |
||||||||||||||||||||||||||||||
Commercial revenue: |
|||||||||||||||||||||||||||||||
SPINRAZA royalties |
$52,073 |
$ 883 |
$112,540 |
$ 883 |
|||||||||||||||||||||||||||
Licensing and royalty revenue |
4,537 |
150 |
9,519 |
19,839 |
|||||||||||||||||||||||||||
Total commercial revenue |
56,610 |
1,033 |
122,059 |
20,722 |
|||||||||||||||||||||||||||
Research and development revenue under collaborative agreements |
115,689 |
159,316 |
385,607 |
325,898 |
|||||||||||||||||||||||||||
Total revenue |
172,299 |
160,349 |
507,666 |
346,620 |
|||||||||||||||||||||||||||
Expenses: |
|||||||||||||||||||||||||||||||
Research, development and patent expenses |
128,285 |
101,151 |
374,644 |
344,320 |
|||||||||||||||||||||||||||
Selling, general and administrative |
45,707 |
18,043 |
108,488 |
48,616 |
|||||||||||||||||||||||||||
Total operating expenses |
173,992 |
119,194 |
483,132 |
392,936 |
|||||||||||||||||||||||||||
Income (loss) from operations |
(1,693) |
41,155 |
24,534 |
(46,316) |
|||||||||||||||||||||||||||
Other income (expense): |
|||||||||||||||||||||||||||||||
Investment income |
654 |
1,561 |
8,179 |
5,472 |
|||||||||||||||||||||||||||
Interest expense |
(10,787) |
(9,934) |
(44,752) |
(38,795) |
|||||||||||||||||||||||||||
Loss on extinguishment of financing liability for leased facility |
- |
(3,983) |
(7,689) |
(3,983) |
|||||||||||||||||||||||||||
Other expenses |
- |
- |
(3,548) |
- |
|||||||||||||||||||||||||||
Income (loss) before income tax benefit (expense) |
(11,826) |
28,799 |
(23,276) |
(83,622) |
|||||||||||||||||||||||||||
Income tax benefit (expense) |
7,164 |
(2,934) |
5,980 |
(2,934) |
|||||||||||||||||||||||||||
Net income (loss) |
(4,662) |
25,865 |
(17,296) |
(86,556) |
|||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. |
7,406 |
- |
11,326 |
- |
|||||||||||||||||||||||||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders |
$2,744 |
$25,865 |
$(5,970) |
$(86,556) |
|||||||||||||||||||||||||||
Basic net income (loss) per share |
$0.02 |
$0.21 |
$0.08 |
$(0.72) |
|||||||||||||||||||||||||||
Diluted net income (loss) per share |
$0.02 |
$0.21 |
$0.08 |
$(0.72) |
|||||||||||||||||||||||||||
Shares used in computing basic net income (loss) per share |
124,818 |
121,340 |
124,016 |
120,933 |
|||||||||||||||||||||||||||
Shares used in computing diluted net income (loss) per share |
126,862 |
123,953 |
126,098 |
120,933 |
IONIS PHARMACEUTICALS, INC. |
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Reconciliation of GAAP to Pro Forma Basis: |
||||||||
Condensed Consolidated Operating Expenses, Income (Loss) From Operations, and Net Income (Loss) |
||||||||
(In Thousands) |
||||||||
Three months ended, December 31, |
Year ended, December 31, |
|||||||
2017 |
2016 |
2017 |
2016 |
|||||
(unaudited) |
||||||||
As reported operating expenses according to GAAP |
$173,992 |
$119,194 |
$483,132 |
$392,936 |
||||
Excluding compensation expense related to equity awards |
(22,333) |
(15,158) |
(85,975) |
(72,108) |
||||
Pro forma operating expenses |
$151,659 |
$104,036 |
397,157 |
$320,828 |
||||
As reported income (loss) from operations according to GAAP |
$(1,693) |
$41,155 |
$24,534 |
$(46,316) |
||||
Excluding compensation expense related to equity awards |
(22,333) |
(15,158) |
(85,975) |
(72,108) |
||||
Pro forma income (loss) from operations |
$20,640 |
$56,313 |
$110,509 |
$25,792 |
||||
As reported net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders according to GAAP |
$2,744 |
$25,865 |
$(5,970) |
$(86,556) |
||||
Excluding compensation expense related to equity awards |
(22,333) |
(15,158) |
(85,975) |
(72,108) |
||||
Pro forma net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders |
$25,077 |
$41,023 |
$80,005 |
$(14,448) |
Reconciliation of GAAP to Pro Forma Basis
As illustrated in the Selected Financial Information in this press release, pro forma operating expenses, pro forma income (loss) from operations, and pro forma net income (loss) were adjusted from GAAP to exclude compensation expense related to equity awards, which are non-cash. Ionis has regularly reported non-GAAP measures for operating results as pro forma results. These measures are provided as supplementary information and are not a substitute for financial measures calculated in accordance with GAAP. Ionis reports these pro forma 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' pro forma results is consistent with how Ionis' management internally evaluates the performance of its operations.
IONIS PHARMACEUTICALS, INC. |
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Condensed Consolidated Balance Sheets |
||||||
(In Thousands) |
||||||
December 31, |
December 31, |
|||||
2017 |
2016 |
|||||
Assets: |
||||||
Cash, cash equivalents and short-term investments |
$1,022,715 |
$665,223 |
||||
Contracts receivable |
62,955 |
108,043 |
||||
Other current assets |
82,314 |
24,666 |
||||
Property, plant and equipment, net |
121,907 |
92,845 |
||||
Other assets |
32,133 |
21,690 |
||||
Total assets |
$1,322,024 |
$912,467 |
||||
Liabilities and stockholders' equity: |
||||||
Other current liabilities |
$118,276 |
$82,504 |
||||
Current portion of deferred contract revenue |
106,465 |
51,280 |
||||
1% convertible senior notes |
533,111 |
500,511 |
||||
Long-term obligations, less current portion |
72,745 |
87,409 |
||||
Long-term deferred contract revenue |
72,708 |
91,198 |
||||
Total Ionis stockholders' equity |
330,872 |
99,565 |
||||
Noncontrolling interest in Akcea Therapeutics, Inc. |
87,847 |
- |
||||
Total stockholders' equity |
418,719 |
99,565 |
||||
Total liabilities and stockholders' equity |
$1,322,024 |
$912,467 |
||||
IONIS PHARMACEUTICALS, INC. |
||||||||
SELECTED FINANCIAL INFORMATION |
||||||||
Condensed Consolidating Statement of Operations |
||||||||
(In Thousands) |
||||||||
Year ended, |
||||||||
Ionis |
Akcea |
Eliminations |
Ionis Consolidated |
|||||
Revenue: |
||||||||
Commercial revenue: |
||||||||
SPINRAZA royalties |
$112,540 |
$- |
$- |
$112,540 |
||||
Licensing and royalty revenue |
9,519 |
- |
- |
9,519 |
||||
Total commercial revenue |
122,059 |
- |
- |
122,059 |
||||
Research and development revenue under collaborative agreements |
330,398 |
55,209 |
- |
385,607 |
||||
Intercompany revenue |
54,407 |
- |
(54,407) |
- |
||||
Total revenue |
506,864 |
55,209 |
(54,407) |
507,666 |
||||
Expenses: |
||||||||
Research, development and patent expenses |
302,281 |
126,890 |
(54,527) |
374,644 |
||||
Selling, general and administrative |
71,507 |
36,981 |
108,488
|
|||||
Total operating expenses |
373,788 |
163,871 |
(54,527) |
483,132 |
||||
Income (loss) from operations |
133,076 |
(108,662) |
120 |
24,534 |
||||
Other income (expense): |
||||||||
Investment income |
8,097 |
1,813 |
(1,731) |
8,179 |
||||
Interest expense |
(44,752) |
(1,731) |
1,731 |
(44,752) |
||||
Loss on extinguishment of financing liability for leased facility |
(7,689) |
- |
- |
(7,689) |
||||
Other expenses |
(3,652) |
104 |
- |
(3,548) |
||||
Income (loss) before income tax benefit (expense) |
85,080 |
(108,476) |
120 |
(23,276) |
||||
Income tax benefit (expense) |
7,255 |
(1,275) |
- |
5,980 |
||||
Net income (loss) |
92,335 |
(109,751) |
120 |
(17,296) |
||||
Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc. |
- |
- |
11,326 |
11,326 |
||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders |
$92,335 |
$(109,751) |
$11,446 |
$(5,970) |
IONIS PHARMACEUTICALS, INC. |
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Condensed Consolidating Balance Sheet |
||||||||||||||||||||||||
(In Thousands) |
||||||||||||||||||||||||
December 31, 2017 |
||||||||||||||||||||||||
Ionis |
||||||||||||||||||||||||
Ionis |
Akcea |
Eliminations |
Consolidated |
|||||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Cash, cash equivalents and short-term investments |
$762,585 |
$260,130 |
$- |
$1,022,715 |
||||||||||||||||||||
Contracts receivable |
$57,542 |
5,413 |
- |
62,955 |
||||||||||||||||||||
Receivable from Akcea Therapeutics, Inc. |
14,365 |
- |
(14,365) |
- |
||||||||||||||||||||
Other current assets |
81,012 |
1,302 |
- |
82,314 |
||||||||||||||||||||
Property, plant and equipment, net |
121,830 |
77 |
- |
121,907 |
||||||||||||||||||||
Other assets |
304,494 |
1,882 |
(274,243) |
32,133 |
||||||||||||||||||||
Total assets |
$1,341,828 |
$268,804 |
$(288,608) |
$1,322,024 |
||||||||||||||||||||
Liabilities and stockholders' equity: |
||||||||||||||||||||||||
Other current liabilities |
$102,367 |
$30,274 |
$(14,365) |
$118,276 |
||||||||||||||||||||
Current portion of deferred contract revenue |
55,886 |
50,579 |
- |
106,465 |
||||||||||||||||||||
1% convertible senior notes |
533,111 |
- |
- |
533,111 |
||||||||||||||||||||
Long-term obligations, less current portion |
72,733 |
12 |
- |
72,745 |
||||||||||||||||||||
Long-term deferred contract revenue |
66,101 |
8,306 |
(1,699) |
72,708 |
||||||||||||||||||||
Total stockholders' equity before noncontrolling interest |
511,630 |
179,633 |
(360,391) |
330,872 |
||||||||||||||||||||
Noncontrolling interest in Akcea Therapeutics, Inc. |
- |
- |
87,847 |
87,847 |
||||||||||||||||||||
Total stockholders' equity |
511,630 |
179,633 |
(272,544) |
418,719 |
||||||||||||||||||||
Total liabilities and stockholders' equity |
$1,341,828 |
$268,804 |
$(288,608) |
$1,322,024 |
SPINRAZA 2017 Patient Dynamics |
||||||
US Patient Dynamics* |
Q1:17 |
Q2:17 |
Q3:17 |
Q4:17 |
||
Total patients |
210 |
710 |
1,240 |
1,650 |
||
New patient starts |
210 |
500 |
530 |
420 |
||
Average doses per patient |
2.3 |
2.5 |
1.8 |
1.5 |
||
% Loading doses |
100% |
100% |
90% |
75% |
||
% Maintenance doses |
0% |
0% |
10% |
25% |
||
% Free doses |
25% |
20% |
20% |
20% |
*As announced by Biogen in their Q4:17 earnings call |
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SOURCE
Ionis Pharmaceuticals Investor and Media Contacts: D. Wade Walke, Ph.D., Vice President, Corporate Communications and Investor Relations, 760-603-2741