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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported):  August 9, 2023
 
IONIS PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Charter)
 
Delaware
(State or Other Jurisdiction of Incorporation)
 
000-19125
33-0336973
(Commission File No.)
(IRS Employer Identification No.)

2855 Gazelle Court
Carlsbad, CA 92010
(Address of Principal Executive Offices and Zip Code)
 
Registrant’s telephone number, including area code: (760) 931-9200
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock, $.001 Par Value
“IONS”

The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).
Emerging growth company ☐  
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
 
Item 2.02.
Results of Operations and Financial Condition.
 
On August 9, 2023, Ionis Pharmaceuticals, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended June 30, 2023.  In addition to disclosing results that are determined in accordance with Generally Accepted Accounting Principles (“GAAP”), the Company also discloses pro forma or non-GAAP results of operations, which are adjusted from GAAP to exclude non-cash compensation expense related to equity awards and the related tax effects. The Company is presenting pro forma information excluding non-cash compensation expense and the related tax effects because the Company believes it better enables financial statement users to assess and compare its historical performance and project its future operating results and cash flows.  A copy of the release is furnished with this report as an exhibit pursuant to “Item 2.02. Results of Operations and Financial Condition” of Form 8-K in accordance with SEC Release Nos. 33-8216 and 34-47583.
 
The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01.
Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit No.
Description
Press Release dated August 9, 2023.


104
Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Ionis Pharmaceuticals, Inc.
   
Dated:  August 9, 2023
By:
/s/ Patrick R. O’Neil


Patrick R. O’Neil


Executive Vice President, Chief Legal Officer and General Counsel


Exhibit 99.1


Ionis reports second quarter 2023 financial results

Reported Phase 3 data showing eplontersen continued to show improvement in ATTRv-PN
through 85 weeks; December 22, 2023 PDUFA date
 
Completed enrollment in donidalorsen OASIS-HAE study and eplontersen CARDIO-TTRansform
ATTR-CM study keeping Phase 3 data readouts on track
 
On track to achieve 2023 financial guidance
 
CARLSBAD, Calif., August 9, 2023 – Ionis Pharmaceuticals, Inc. (Nasdaq: IONS) (the “Company”), today reported financial results for the second quarter of 2023. Financial results are summarized below:
 
   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
   
(amounts in millions)
  
Total revenue
  
$
188
    
$
134
    
$
319
    
$
276
  
Operating expenses
  
$
279
    
$
220
    
$
523
    
$
419
  
Operating expenses on a non-GAAP basis
  
$
252
    
$
195
    
$
469
    
$
368
  
Loss from operations
  
$ 
(91
)
  
$ 
(86
)
  
$ 
(204
)
  
$ 
(143
)
Loss from operations on a non-GAAP basis
  
$ 
(64
)
  
$ 
(61
)
  
$ 
(150
)
  
$ 
(92
)

Financial Highlights

•
Revenue increased for the second quarter and first half of 2023 by 40% and 16% compared to the same periods last year, respectively, driven by significant partner payments
 
•
Operating expenses increased in the second quarter and first half of 2023 compared to the prior year as planned, reflecting investments in advancing Ionis’ pipeline and go-to-market activities for eplontersen, olezarsen and donidalorsen
 
•
Cash and short-term investments of $2.4 billion as of June 30, 2023 enables continued investments to drive increasing value
 
•
Well-capitalized balance sheet reflects 2024 convertible note refinancing that extended maturity to 2028 while maintaining a low coupon and retaining the flexibility to mitigate potential equity dilution
 
•
Reaffirmed 2023 financial guidance
 
1
“Ionis is creating significant value in 2023 as we successfully execute on our strategy to bring a steady cadence of transformational medicines to the market. Our growing late-stage pipeline now includes eight medicines for 10 indications, highlighted by eplontersen. Based on the strong and consistent data generated to date and an attractive self-administration profile, we expect eplontersen to be an important new medicine for people with ATTRv-polyneuropathy. We also added QALSODY to our commercial portfolio, a breakthrough treatment for people with SOD1-ALS further strengthening Ionis’ leadership in RNA-based therapies for neurological diseases,” said Brett P. Monia, Ph.D., chief executive officer of Ionis. “In the second half, we expect continued positive momentum including the Phase 3 readout for olezarsen in familial chylomicronemia syndrome and the potential approval of eplontersen for ATTRv-PN in December.”
 
Recent Highlights From Commercial Medicines

•
Biogen presented interim data from the Phase 4 RESPOND study of SMA patients demonstrating improved motor function in most participants treated with SPINRAZA who had unmet medical needs after treatment with gene therapy
 
•
FDA granted Biogen accelerated approval of QALSODY (tofersen), a first-in-class medicine for patients with SOD1-ALS
 
Recent Highlights From Near-Term Commercial Opportunities

•
Reported positive results from the Phase 3 NEURO-TTRansform study in patients with ATTRv-PN showing eplontersen continued to halt neuropathy disease progression and improve quality of life through 85 weeks
 
•
Completed enrollment of the Phase 3 CARDIO-TTRansform study of eplontersen in patients with ATTR cardiomyopathy, the largest study ever conducted in ATTR-CM; on track for data readout as early as H1:2025
 
•
Licensed eplontersen Latin America rights to AstraZeneca
 
•
Completed enrollment of the Phase 3 OASIS-HAE study of donidalorsen in patients with hereditary angioedema; on track for data readout in H1:2024
 
•
Reported positive topline Phase 2 open label extension data of donidalorsen in patients with hereditary angioedema treated for two years
 
Recent Highlights From Partnered Programs

•
Roche advanced IONIS-FB-LRx into Phase 3 development in patients with immunoglobulin A nephropathy
 
•
GSK presented durable response data from the Phase 2 B-Sure long-term follow-up study of bepirovirsen in complete responder patients from the Phase 2b B-Clear study of patients with HBV
 
•
Completed enrollment in the Phase 2 GOLDEN study of IONIS-FB-LRx in patients with geographic atrophy
 
•
AstraZeneca initiated a Phase 2b study of ION839 (AZD2693) targeting PNPLA3 to treat patients with NASH
 
•
Entered collaboration with Novartis to advance a next generation program targeting Lp(a) for cardiovascular disease
 
2
Second Quarter 2023 Financial Results
 
“Our results for the first half of the year keep us on track to achieve our 2023 guidance. We continued to generate substantial and sustained revenue, that together with our well-capitalized balance sheet, allows us to continue investing in key opportunities across our business,” said Elizabeth L. Hougen, chief financial officer of Ionis. “With three near-term commercial opportunities that have a combined multi-billion-dollar peak sales potential and a steady cadence of medicines poised to follow closely behind, we are positioned to drive substantial revenue growth and long-term value for shareholders.”
 
Revenue

Ionis’ revenue was comprised of the following:

   
Three months ended
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
Revenue:
  
(amounts in millions)
  
Commercial revenue:
                        
SPINRAZA royalties
  
$
61
    
$
60
    
$
111
    
$
113
  
Other commercial revenue:
                                
TEGSEDI and WAYLIVRA revenue, net
    
11
      
10
      
17
      
17
  
Licensing and royalty revenue
    
6
      
8
      
18
      
20
  
Total commercial revenue
    
78
      
78
      
146
      
150
  
Research and development revenue:
                                
Amortization from upfront payments
    
15
      
18
      
29
      
36
  
Milestone payments
    
51
      
18
      
74
      
45
  
License fees
    
20
      
-
      
20
      
2
  
Other services
    
4
      
3
      
6
      
6
  
Collaborative agreement revenue
    
90
      
39
      
129
      
89
  
Eplontersen joint development revenue
    
20
      
17
      
44
      
37
  
Total research and development revenue
    
110
      
56
      
173
      
126
  
Total revenue
  
$
188
    
$
134
    
$
319
    
$
276
  

Ionis’ revenue increased in the second quarter and first half of 2023 compared to the same periods in 2022 because of increased payments from partnered programs. Ionis believes its substantial and sustainable revenue is an important source of funding that supports the Company’s investments to bring potentially transformational medicines to the market.

Commercial revenue for the second quarter and first half of 2023 included $61 million and $111 million from SPINRAZA royalties, respectively. Global SPINRAZA product sales of $437 million and $880 million were essentially flat for the second quarter and first half of 2023, respectively, compared to the same periods last year reflecting SPINRAZA’s resilience against emerging competition. Ionis’ commercial revenue in the second quarter and first half of 2023 also included royalties from the U.S. launch of QALSODY.

R&D revenue essentially doubled for the second quarter of 2023 and increased more than 35% for the first half of 2023 compared to the same periods in 2022 reflecting the value Ionis’ technology is creating as numerous partnered programs advanced.

3
Operating Expenses
 
Ionis’ operating expenses increased in the second quarter and first half of 2023 compared to the same periods in 2022, consistent with expectations. As Ionis advanced its robust pipeline, study costs increased as most of the Company’s Phase 3 studies were either fully enrolled or approaching full enrollment resulting in higher R&D expenses year over year. Additionally, as Ionis prepares to launch eplontersen, olezarsen and donidalorsen, the Company’s SG&A expenses also increased year over year.

Balance Sheet

As of June 30, 2023, Ionis’ cash, cash equivalents and short-term investments increased to $2.4 billion compared to $2.0 billion at December 31, 2022 primarily due to the $500 million Ionis received from Royalty Pharma in January 2023. Ionis’ working capital also increased over the same period primarily due to the Company’s higher cash and short-term investments balance. In the first quarter of 2023 the Company recorded a long-term liability for future royalties due to Royalty Pharma. In June 2023 Ionis issued $575 million of senior convertible notes due in June 2028 with an interest rate of 1.75%. Ionis used the majority of the proceeds to repurchase $434 million of its 2024 convertible notes. The Company plans to utilize the residual proceeds to settle the 2024 notes that remain outstanding.

Webcast

Management will host a conference call and webcast to discuss Ionis’ second quarter 2023 results at 11:30 a.m. Eastern time on Wednesday, August 9, 2023. Interested parties may access the webcast here. A webcast replay will be available for a limited time at the same address. To access the Company’s second quarter 2023 earnings slides click here.

About Ionis Pharmaceuticals, Inc.
 
For more than 30 years, Ionis has been a leader in RNA-targeted therapy, pioneering new markets and changing standards of care. Ionis currently has four marketed medicines and a promising late-stage pipeline highlighted by cardiovascular and neurological franchises. Our scientific innovation began and continues with the knowledge that sick people depend on us, which fuels our vision to become the leader in genetic medicine, utilizing a multi-platform approach to discover, develop and deliver life-transforming therapies.

To learn more about Ionis visit www.ionispharma.com or follow us on Twitter @ionispharma.

Ionis’ Forward-looking Statement
 
This press release includes forward-looking statements regarding Ionis’ business, financial guidance and the therapeutic and commercial potential of QALSODY (tofersen), SPINRAZA (nusinersen), TEGSEDI (inotersen), WAYLIVRA (volanesorsen), eplontersen, olezarsen, donidalorsen, ulefnersen, pelacarsen, bepirovirsen, IONIS-FB-LRx, Ionis' technologies and Ionis’ other products in development. 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 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, 2022, and most recent Form 10-Q, which are on file with the Securities and Exchange Commission. Copies of these and other documents are available from the Company.

4
In this press release, unless the context requires otherwise, “Ionis,” “Company,” “we,” “our” and “us” all refer to Ionis Pharmaceuticals and its subsidiaries.

Ionis Pharmaceuticals® is a registered 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. QALSODYTM is a trademark of Biogen. SPINRAZA® is a registered trademark of Biogen.

Ionis Investor Contact:
D. Wade Walke, Ph.D.
info@ionisph.com 760-603-2331

Ionis Media Contact:
David Polk, J.D.
ionis_ca@ionisph.com 760-603-4679

5
IONIS PHARMACEUTICALS, INC.
SELECTED FINANCIAL INFORMATION
Condensed Consolidated Statements of Operations
(In Millions, Except Per Share Data)
 
   
Three months ended,
    
Six months ended
  
   
June 30,
    
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
   
(unaudited)
  
Revenue:
                        
Commercial revenue:
                        
SPINRAZA royalties
  
$
61
    
$
60
    
$
111
    
$
113
  
Other commercial revenue
    
17
      
18
      
35
      
37
  
Total commercial revenue
    
78
      
78
      
146
      
150
  
Research and development revenue:
                                
Collaborative agreement revenue
    
90
      
39
      
129
      
89
  
Eplontersen joint development revenue
    
20
      
17
      
44
      
37
  
Total research and development revenue
    
110
      
56
      
173
      
126
  
Total revenue
    
188
      
134
      
319
      
276
  
Expenses:
                                
Cost of sales
    
3
      
5
      
4
      
9
  
Research, development and patent
    
230
      
181
      
428
      
342
  
Selling, general and administrative
    
46
      
34
      
91
      
68
  
Total operating expenses
    
279
      
220
      
523
      
419
  
Loss from operations
    
(91
)
    
(86
)
    
(204
)
    
(143
)
                                 
Other income (expense):
                                
Interest expense related to the sale of future royalties:
    
(18
)
    
-
      
(33
)
    
-
  
Other income (expense), net
    
32
      
(17
)
    
47
      
(24
)
Loss before income tax expense
    
(77
)
    
(103
)
    
(190
)
    
(167
)
                                 
Income tax expense
    
(8
)
    
(2
)
    
(20
)
    
(3
)
                                 
Net loss
  
$ 
(85
)
  
$ 
(105
)
  
$ 
(210
)
  
$ 
(170
)
                                 
Basic and diluted net loss per share
  
$ 
(0.60
)
  
$ 
(0.74
)
  
$ 
(1.47
)
  
$ 
(1.20
)
Shares used in computing basic and diluted net loss per share
    
143
      
142
      
143
      
142
  

6
IONIS PHARMACEUTICALS, INC.
Reconciliation of GAAP to Non-GAAP Basis:
Condensed Consolidated Operating Expenses, Loss From Operations, and Net Loss
(In Millions)

   
Three months ended
June 30,
    
Six months ended
June 30,
  
   
2023
    
2022
    
2023
    
2022
  
   
(unaudited)
  
As reported research, development and patent expenses according to GAAP
  
$
230
    
$
181
    
$
428
    
$
342
  
Excluding compensation expense related to equity awards
    
(19
)
    
(19
)
    
(39
)
    
(38
)
Non-GAAP research, development and patent expenses
  
$
211
    
$
162
    
$
389
    
$
304
  
                                 
As reported selling, general and administrative expenses according to GAAP
  
$
46
    
$
34
    
$
91
    
$
68
  
Excluding compensation expense related to equity awards
    
(7
)
    
(6
)
    
(14
)
    
(13
)
Non-GAAP selling, general and administrative expenses
  
$
39
    
$
28
    
$
77
    
$
55
  
                                 
As reported operating expenses according to GAAP
  
$
279
    
$
220
    
$
523
    
$
419
  
Excluding compensation expense related to equity awards
    
(27
)
    
(25
)
    
(54
)
    
(51
)
Non-GAAP operating expenses
  
$
252
    
$
195
    
$
469
    
$
368
  
                                 
As reported loss from operations according to GAAP
  
$ 
(91
)
  
$ 
(86
)
  
$ 
(204
)
  
$ 
(143
)
Excluding compensation expense related to equity awards
    
(27
)
    
(25
)
    
(54
)
    
(51
)
Non-GAAP loss from operations
  
$ 
(64
)
  
$ 
(61
)
  
$ 
(150
)
  
$ 
(92
)
                                 
As reported net loss according to GAAP
  
$ 
(85
)
  
$ 
(105
)
  
$ 
(210
)
  
$ 
(170
)
Excluding compensation expense related to equity awards and related tax effects
    
(27
)
    
(25
)
    
(54
)
    
(51
)
Non-GAAP net loss
  
$ 
(58
)
  
$ 
(80
)
  
$ 
(156
)
  
$ 
(119
)

Reconciliation of GAAP to Non-GAAP Basis
 
As illustrated in the Selected Financial Information in this press release, non-GAAP operating expenses, non-GAAP loss from operations, and non-GAAP net loss were adjusted from GAAP to exclude compensation expense related to equity awards and the related tax effects. Compensation expense related to equity awards are non-cash. 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.
 
7
IONIS PHARMACEUTICALS, INC.
Condensed Consolidated Balance Sheets
 (In Millions)
 
   
June 30,
    
December 31,
  
   
2023
    
2022
  
   
(unaudited)
        
Assets:
            
Cash, cash equivalents and short-term investments
  
$
2,385
    
$
1,987
  
Contracts receivable
    
28
      
26
  
Other current assets
    
203
      
190
  
Property, plant and equipment, net
    
92
      
74
  
Right-of-use assets
    
177
      
182
  
Other assets
    
86
      
75
  
Total assets
  
$
2,971
    
$
2,534
  
                 
Liabilities and stockholders’ equity:
                
                 
Other current liabilities
  
$
192
    
$
221
  
Current portion of deferred contract revenue
    
96
      
91
  
1.75% convertible senior notes, net
    
561
      
-
  
0% convertible senior notes, net
    
624
      
622
  
0.125% convertible senior notes, net
    
114
      
545
  
Liability related to sale of future royalties, net
    
510
      
-
  
Long-term lease liabilities
    
175
      
178
  
Long-term obligations, less current portion
    
17
      
16
  
Long-term deferred contract revenue
    
254
      
288
  
Total stockholders’ equity
    
428
      
573
  
Total liabilities and stockholders’ equity
  
$
2,971
    
$
2,534
  

8
2023 Key Value Driving Events(1)

Regulatory Actions
Program
Indication
Regulatory Action
Achieved
QALSODY
SOD1-ALS
NDA approval
EU approval2
  
Eplontersen (TTR)
ATTRv polyneuropathy
NDA approval
  
OUS filings
  

Key Clinical Data Events
Program
Indication
Event
Achieved
Eplontersen (TTR)
ATTRv polyneuropathy
Phase 3 data (week 35, 66 & 85)
Olezarsen (APOCIII)
FCS
Phase 3 data
  
Donidalorsen (PKK)
HAE
Phase 2, OLE 1-year data
Donidalorsen (PKK)
HAE
Phase 2, OLE 2-year data

Enrollment Achievements
Program
Indication
Event
Achieved
Eplontersen (TTR)
ATTR cardiomyopathy
Phase 3 full enrollment
Donidalorsen (PKK)
HAE
Phase 3 full enrollment
IONIS-FB-LRx
Geographic Atrophy
Phase 2 full enrollment

Phase 3 Initiations
Program
Indication
Achieved
Bepirovirsen (HBV)
Hepatitis B virus infection
IONIS-FB-LRx
Immunoglobulin A nephropathy


(1)
Timing expectations based on current assumptions and subject to change.

(2)
CHMP opinion anticipated in Q4:2023.

#   #   #


9