Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) Q2 2023 Earnings Conference Call August 9, 2023 11:30 AM ET Company Participants Wade Walke - SVP, IR Brett Monia - CEO Richard Geary - Chief Development Officer Beth Hougen - CFO Onaiza Cadoret - Chief Global Product Strategy & Operations Officer Eugene Schneider - Chief Clinical Development Officer Eric Swayze - EVP, Research Conference Call Participants Myles Minter - William Blair Robert Finke - Guggenheim Partners Kostas Biliouris - BMO Capital Markets Mike Ul ...

Revenue and Financial Performance - Total revenue for Q2 2023 was $188.4 million, a 40.8% increase compared to $133.8 million in Q2 2022[17] - Total revenues for Q2 2023 were $188.4 million, a 40.8% increase compared to $133.8 million in Q2 2022[108] - Total revenue for Q2 2023 was $188.4 million, compared to $133.8 million in Q2 2022, with a net loss of $85.3 million[105] - Total revenue for the six months ended June 30, 2023, was $318.9 million, compared to $275.7 million in the same period in 2022[17] - Total revenues for Q2 2023 were $188.4 million, a significant increase from $133.8 million in Q2 2022, driven by increased payments from partnered programs[108] - Total revenue for Q2 2023 was $188.4 million, compared to $133.8 million in Q2 2022, and $318.9 million for the first half of 2023, compared to $275.7 million in the same period of 2022[105] - The company has earned approximately $6.7 billion in revenue from inception through June 30, 2023, primarily from research and development collaborative agreements and commercial revenue[144] SPINRAZA Royalties - SPINRAZA royalties generated $61.0 million in Q2 2023, a 2.3% increase from $59.6 million in Q2 2022[17] - SPINRAZA royalties contributed $61.0 million in Q2 2023, slightly up from $59.6 million in Q2 2022[108] - SPINRAZA royalties generated $61.0 million in revenue for the three months ended June 30, 2023, compared to $59.6 million in the same period in 2022[17] - SPINRAZA royalties contributed $61.0 million in Q2 2023, with global SPINRAZA product sales reaching $437 million, showing resilience against competition[109] - SPINRAZA collaboration generated over $1.9 billion in revenues since inception, including $1.5 billion in royalties[99] Research and Development (R&D) Revenue and Expenses - Research and development revenue surged to $110.5 million in Q2 2023, a 98.7% increase from $55.6 million in Q2 2022[17] - R&D revenue for Q2 2023 was $110.5 million, up from $55.6 million in Q2 2022, primarily due to milestone payments of $51.1 million and license fees of $20.0 million[108] - R&D revenue doubled in Q2 2023 and increased over 35% in the first half of 2023 compared to the same periods in 2022[110] - Research and development revenue for the six months ended June 30, 2023, was $173.3 million, compared to $125.2 million in the same period in 2022[17] - R&D revenue for Q2 2023 essentially doubled compared to the same period in 2022, and increased more than 35% for the first half of 2023[110] - Eplontersen joint development revenue reached $19.5 million in Q2 2023, up from $17.4 million in Q2 2022[114] - Eplontersen joint development revenue for Q2 2023 was $19.5 million, compared to $17.4 million in Q2 2022, and $43.9 million for the first half of 2023, compared to $37.2 million in the same period of 2022[114] - Eplontersen Phase 3 development expenses for Q2 2023 were $38.3 million, compared to $35.0 million in Q2 2022, and $85.4 million for the first half of 2023, compared to $71.1 million in the same period of 2022[114] - Eplontersen development expenses rose to $28.7 million in Q2 2023, up from $24.3 million in Q2 2022[123] - Olezarsen development expenses surged to $31.3 million in Q2 2023, compared to $12.7 million in Q2 2022[123] - Donidalorsen development expenses increased to $7.2 million in Q2 2023 from $1.9 million in Q2 2022[123] - Drug development expenses for Q2 2023 were $145.5 million, compared to $103.2 million in Q2 2022, and $269.9 million for the first half of 2023, compared to $201.8 million in the same period of 2022[123] - Manufacturing and development chemistry expenses were $24.4 million in Q2 2023, down from $25.7 million in Q2 2022[128] - R&D support expenses increased to $23.0 million in Q2 2023, up from $17.7 million in Q2 2022, primarily due to higher occupancy and personnel costs[130] - Manufacturing and development chemistry expenses for the six months ended June 30, 2023, were $41.2 million, down from $44.7 million in the same period in 2022[128] - R&D support expenses for the six months ended June 30, 2023, were $45.8 million, up from $34.9 million in the same period in 2022, primarily due to increased occupancy and personnel costs[130] Operating Expenses and Net Loss - Net loss for Q2 2023 was $85.3 million, an improvement from $105.1 million in Q2 2022[17] - Total operating expenses increased to $278.6 million in Q2 2023, up 27.0% from $219.3 million in Q2 2022[17] - Operating expenses, excluding non-cash compensation, increased to $252.1 million in Q2 2023 from $194.8 million in Q2 2022[115] - Net loss for the six months ended June 30, 2023, was $209.6 million, compared to $170.3 million in the same period in 2022[17] - Total operating expenses for Q2 2023 were $278.6 million, up from $219.3 million in Q2 2022, and $523.3 million for the first half of 2023, compared to $418.7 million in the same period of 2022[115] - Net loss for Q2 2023 was $85.3 million, compared to $105.1 million in Q2 2022, and $209.6 million for the first half of 2023, compared to $170.3 million in the same period of 2022[105] Investment Income and Financial Assets - Investment income rose significantly to $20.8 million in Q2 2023, compared to $3.4 million in Q2 2022[17] - The company held $2.32 billion in fair value securities as of June 30, 2023, including $809.1 million in U.S. Treasury securities[62] - Investment income increased to $20.8 million in Q2 2023, up from $3.4 million in Q2 2022, driven by higher interest rates and increased cash available for investment[134] - Investment income for Q2 2023 was $20.8 million, compared to $3.4 million in Q2 2022, and $39.4 million for the first half of 2023, compared to $5.4 million in the same period of 2022[134] - The fair value of cash equivalents held by the company as of June 30, 2023, was $316.4 million[62] - Gain on investments for the three months ended June 30, 2023, was $0.7 million, compared to a loss of $6.3 million in the same period in 2022[137] - Investment gains for the three months ended June 30, 2023, were $0.7 million, compared to a loss of $6.3 million in the same period in 2022[137] Royalty Pharma Agreement - Company received an upfront payment of $500 million from Royalty Pharma for future SPINRAZA and pelacarsen royalties, with potential for up to $625 million in additional milestone payments[78] - Royalty Pharma will receive 25% of SPINRAZA royalty payments from 2023-2027, increasing to 45% in 2028, on up to $1.5 billion in annual sales[78] - Estimated effective interest rate for the royalty agreement was 13.5% as of June 30, 2023[80] - Net liability related to sale of future royalties was $510.174 million as of June 30, 2023[80] - The company received an upfront payment of $500 million from Royalty Pharma and is eligible to receive up to $625 million in additional milestone payments[78] - The estimated effective interest rate under the Royalty Pharma agreement was 13.5% as of June 30, 2023[80] - Interest expense related to the sale of future royalties was $17.7 million in Q2 2023, as part of the $500 million upfront payment from Royalty Pharma[136] Convertible Notes and Debt - Company completed a $575.0 million offering of 1.75% convertible senior notes in June 2023, with an effective interest rate of 2.3%[81][82] - Outstanding principal balance of 0% convertible senior notes was $632.5 million as of June 30, 2023, with an effective interest rate of 0.5%[84] - Company repurchased $434.1 million of 0.125% Notes in June 2023, resulting in a remaining principal balance of $114.8 million[86] - Effective conversion price for 0.125% Notes with call spread was $123.38 per share[87] - Company recorded a $11.3 million gain on the early retirement of 0.125% Notes[86] - The company completed a $575.0 million offering of convertible senior notes in June 2023, with an effective interest rate of 2.3% and a conversion price per share of $53.73[82] - The company repurchased $434.1 million of its 0.125% Notes in June 2023, resulting in a remaining principal balance of $114.8 million as of June 30, 2023[86] - The company recorded a $11.3 million gain on the early retirement of its 0.125% Notes in June 2023[86] - The company borrowed approximately $2.7 billion under long-term debt arrangements from inception through June 30, 2023[144] Stock-Based Compensation - Stock-based compensation expense totaled $26.6 million in Q2 2023, up 8.4% from $24.5 million in Q2 2022[74] - The weighted-average grant date fair value of RSUs granted to employees for the six months ended June 30, 2023, was $39.50 per share[69] - The weighted-average grant date fair value of PRSUs granted to executive officers for the six months ended June 30, 2023 and 2022 were $58.99 and $42.28 per share, respectively[74] - Total stock-based compensation expense for the six months ended June 30, 2023 was $53.51 million, compared to $50.74 million for the same period in 2022[74] - As of June 30, 2023, total unrecognized estimated stock-based compensation expense related to non-vested stock options, RSUs and PRSUs was $50.5 million, $70.7 million and $8.4 million, respectively[74] Tax and Valuation Allowance - Income tax expense increased to $7.8 million in Q2 2023 from $2.3 million in Q2 2022, primarily due to the Royalty Pharma transaction[76] - The company maintains a full valuation allowance on all net deferred tax assets[77] - The company recorded income tax expense of $7.8 million and $19.2 million for the three and six months ended June 30, 2023, respectively, compared to $2.3 million and $3.4 million for the same periods in 2022[76] Product Development and Approvals - QALSODY received FDA accelerated approval in April 2023 for SOD1-ALS treatment[97] - Eplontersen's PDUFA date for ATTRv-PN is set for December 22, 2023[97] - Phase 3 BALANCE study for olezarsen is on track for data release in H2 2023[103] - Eplontersen's Phase 3 NEURO-TTRansform study showed positive results, halting neuropathy disease progression and improving quality of life through 85 weeks[103] - QALSODY received accelerated FDA approval in April 2023 for SOD1-ALS treatment, with the EMA currently reviewing its Marketing Authorization Application in the EU[102] - The company has eight medicines in Phase 3 studies, including eplontersen, olezarsen, donidalorsen, and ulefnersen, targeting various indications[103] - Olezarsen received FDA fast track designation for FCS treatment in January 2023, with Phase 3 BALANCE FCS study data expected in H2 2023[103] - Donidalorsen's Phase 3 OASIS-HAE study completed enrollment in June 2023, with data expected in H1 2024[103] Corporate Strategy and Partnerships - Corporate partnering remains a key strategy, with potential revenue impacts if collaborative partners fail to fund development programs[210] - AstraZeneca is funding 55% of the Phase 3 development costs for eplontersen, with Ionis recognizing this as R&D revenue[111] Cost of Sales and Medical Affairs - Cost of sales decreased to $2.5 million in Q2 2023, down from $4.7 million in Q2 2022[118] - Medical affairs expenses were $5.4 million in Q2 2023, slightly up from $5.2 million in Q2 2022, with expectations of further increases as the pipeline advances[126] - Cost of sales for the three months ended June 30, 2023, were $2.5 million, a decrease from $4.7 million in the same period in 2022[118] - Medical affairs expenses for the six months ended June 30, 2023, were $10.7 million, up from $8.3 million in the same period in 2022[126] - Commercialization expenses for eplontersen for Q2 2023 were $2.5 million, compared to $0.5 million in Q2 2022, and $3.8 million for the first half of 2023, compared to $0.7 million in the same period of 2022[114] - Medical affairs expenses for eplontersen for Q2 2023 were $1.1 million, compared to $0.5 million in Q2 2022, and $1.8 million for the first half of 2023, compared to $0.8 million in the same period of 2022[114] Contractual Obligations and Capital Expenditures - Total contractual obligations as of June 30, 2023, amounted to $1,673.7 million, with $31.0 million due within one year[147] - The company has raised approximately $2.1 billion from the sale of equity securities since its inception through June 30, 2023[144] - The company borrowed approximately $2.7 billion under long-term debt arrangements from inception through June 30, 2023[144] - The company purchased its primary R&D facility for $79.4 million and its manufacturing facility for $14.0 million in July 2017, financed with $60.4 million in mortgage debt[149] - The company had outstanding purchase orders as of June 30, 2023, for services, capital equipment, and materials as part of its normal course of business[154] - Total contractual obligations as of June 30, 2023, were $1,673.7 million, with $31.0 million due within one year and $1,642.7 million due after one year[147] Legal and Settlement - The Court approved the Revised Settlement and dismissed the Shumacher and Cohen Actions on April 24, 2023, with no admission of wrongdoing by any defendant[93]

Robust Efficacy Anticipated with Pelacarsen in Phase 3 Lp(a) HORIZON Study QALSODY SOD1-ALS (SOD1) SPINRAZA SMA (SMN2) ION859 Parkinson's disease (LRRK2) ION464 Parkinson's disease and Multiple System Atrophy (alpha-synuclein) ION363 FUS-ALS (FUS) ION541 ALS (ATXN2) ION373 Alexander disease (GFAP) Eplontersen ATTR (TTR) ION582 Angelman syndrome (UBE3A-ATS) Tominersen Huntington's disease (HTT) ION260 Spinocerebellar Ataxia Type 3 (ATXN3) ION306 SMA (SMN2) IONIS-MAPTRx Alzheimer's disease (Tau) 24 MAA Accept ...

Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) Q1 2023 Earnings Conference Call May 3, 2023 11:30 AM ET Company Participants Wade Walke - SVP, IR Brett Monia - CEO Richard Geary - Chief Development Officer Beth Hougen - CFO Eugene Schneider - Chief Clinical Development Officer Onaiza Cadoret - Chief Global Product Strategy & Operations Officer Eric Swayze - EVP, Research Conference Call Participants Joseph Stringer - Needham and Company Jessica Fye - JPMorgan Yanan Zhu - Wells Fargo Mike Ulz - Morgan Stanley Yal ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 000-19125 Ionis Pharmaceuticals, Inc. (Exact name of Registrant as specified in its charter) Delaware 33-0336973 (State or oth ...

• Advanced new MsPA backbone chemistry with enhanced duration into preclinical development • Advance new routes of delivery 1. Non-GAAP – please see reconciliation to GAAP in FY 2022 press release 2. $500M from royalty monetization transaction in January 2023 15 million Establish an integrated commercial organization | --- | --- | --- | |------------------------------------------------------------|---------------------------------------------------------------------------------|----------------------------- ...

Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) Q4 2022 Results Conference Call February 22, 2023 11:30 AM ET Company Participants Wade Walke - SVP, IR Brett Monia - CEO Beth Hougen - CFO Eugene Schneider - Chief Clinical Development Officer Onaiza Cadoret - Chief Global Product Strategy & Operations Officer Eric Swayze - EVP, Research Conference Call Participants Yanan Zhu - Wells Fargo Securities Gary Nachman - BMO Capital Markets Do Kim - Piper Sandler Gena Wang - Barclays Yale Jen - Laidlaw & Co. Paul Matte ...

Commercialization and Market Challenges - The company has limited experience in commercializing medicines and will need to invest significant resources to develop marketing and sales capabilities[291]. - SPINRAZA revenue has decreased due to lower pricing in the U.S. and increased competition, impacting future sales potential[294][305]. - The company relies on third parties for commercialization, which may lead to lower product revenues and profitability compared to self-commercialization[292]. - The acceptance of the company's medicines by the medical community and third-party payers is crucial for generating substantial revenues[293]. - Regulatory limitations may be imposed on approved medicines, affecting marketing and distribution activities[310]. - The company is dependent on collaboration with Biogen for the development and commercialization of SPINRAZA, which poses risks if Biogen fails to fulfill its commitments[313][314]. - Future product sales may be subject to increased restrictions and pricing pressures from government and third-party payers[300][301]. - The company faces competition from numerous pharmaceutical firms, which may hinder the commercialization of its medicines[302][304]. - The need for post-marketing studies to demonstrate cost-effectiveness may require significant management time and resources[298]. - The company must comply with comprehensive government regulations regarding the manufacture and marketing of its medicines[307]. - The collaboration with AstraZeneca for the development and commercialization of eplontersen includes co-commercialization in the U.S. and AstraZeneca's sole rights in other countries, which may limit revenue if unsuccessful[315]. - A Joint Steering Committee (JSC) with equal membership from both companies oversees eplontersen's development, and disagreements could delay commercialization[316]. - The company is commercializing TEGSEDI and WAYLIVRA in multiple international markets, facing risks associated with regulatory, pricing, and reimbursement conditions[375]. Financial Performance and Position - Total revenue for 2022 was $587.4 million, a decrease of 27.5% from $810.5 million in 2021[406]. - Total operating expenses increased to $997.6 million in 2022 from $840.6 million in 2021, resulting in a loss from operations of $410.2 million[406]. - SPINRAZA royalties contributed $242.3 million in 2022, down from $267.8 million in 2021, with total SPINRAZA product sales decreasing 6% year-over-year[408]. - Total R&D revenue for 2022 was $284.0 million, significantly lower than $468.1 million in 2021, primarily due to a $200 million payment received in 2021 from AstraZeneca[408]. - Cash, cash equivalents, and short-term investments were $1,986.9 million as of December 31, 2022, compared to $2,115.0 million at the end of 2021[406]. - The company has an accumulated deficit of approximately $1.4 billion and stockholders' equity of approximately $0.6 billion as of December 31, 2022[348]. - The company recorded a net loss of $269.7 million in 2022, compared to a net loss of $28.6 million in 2021, indicating a significant increase in losses[441]. - Basic and diluted net loss per share for 2022 was $1.90, compared to $0.20 in 2021, reflecting a substantial increase in loss per share[442]. - The company has raised approximately $2.0 billion from equity securities and $2.1 billion from long-term debt since inception[443]. Research and Development - The company is currently developing seven medicines in Phase 3, focusing on cardiovascular and neurology franchises[405]. - For the year ended December 31, 2022, the company earned $77 million in joint development revenue and incurred $147 million in R&D expenses related to the eplontersen collaboration with AstraZeneca[410]. - R&D expenses, excluding non-cash compensation, rose to $759.4 million in 2022 from $547.4 million in 2021, driven by investments in the late-stage pipeline and licensing of Metagenomi's gene editing technologies[419]. - Total drug development expenses reached $457.7 million in 2022, up from $349.0 million in 2021, reflecting the expansion of Phase 3 studies from three to six[422]. - AstraZeneca is covering 55% of the costs associated with the ongoing global Phase 3 development program for eplontersen[410]. Manufacturing and Operational Risks - The company is expanding its manufacturing capabilities with a new facility in Oceanside, California, which will incur substantial expenditures and require additional staff[319]. - There is limited experience in manufacturing oligonucleotide-based medicines on a commercial scale, and reliance on a small number of suppliers for capital equipment and raw materials poses risks[320]. - Non-compliance with FDA's cGMP regulations could delay or prevent marketing authorizations for medicines, including SPINRAZA and TEGSEDI[321]. - The company relies on third-party manufacturers for TEGSEDI and WAYLIVRA, and any disruptions could limit commercial success[322]. - Distribution agreements with Sobi and PTC for TEGSEDI and WAYLIVRA may result in less revenue than direct commercialization[323]. Compliance and Regulatory Environment - Compliance with healthcare laws is critical, as violations could result in significant penalties and reputational harm[378]. - The company faces risks related to international operations, including regulatory compliance and currency exchange fluctuations[376]. - The company is subject to changing regulations for corporate governance, increasing costs and risks of noncompliance[380]. - Regulatory approval for medicines is uncertain, and failure to obtain timely approvals could negatively impact revenue generation[327]. - Clinical studies may face delays or failures due to various factors, including the COVID-19 pandemic and regulatory scrutiny[335]. - Ongoing geopolitical tensions, particularly the war between Russia and Ukraine, may restrict clinical trial operations and increase costs[337]. Corporate Governance and Internal Controls - The company has provisions in its certificate of incorporation that may discourage third-party acquisitions, potentially limiting shareholder value[366]. - The company assessed the effectiveness of its internal control over financial reporting as of December 31, 2022, and concluded that it maintained effective internal control[473]. - Ernst & Young LLP audited the effectiveness of the company's internal control over financial reporting as of December 31, 2022, and expressed an unqualified opinion[478]. - The company has established disclosure controls and procedures to ensure timely and accurate reporting of required information[470]. Stock and Financing - The market price of the company's common stock ranged from $48.82 to $28.25 per share over the 12 months preceding December 31, 2022, indicating significant volatility[364]. - The company completed a $632.5 million offering of 0% Notes and used $247.9 million of the net proceeds to repurchase $257.0 million of its 1% Notes[369]. - Future sales of approximately 17.5 million shares of common stock upon conversion of 0% Notes and 0.125% Notes could adversely affect trading prices of the company's securities[372]. - The ongoing war between Russia and Ukraine may adversely affect the global credit markets, impacting the company's liquidity and financial condition[374]. - The company may need to raise additional funds through public or private financing, which could dilute existing stockholders' shares[345]. Cybersecurity and Data Risks - The company has invested in cybersecurity measures, but risks remain regarding data breaches that could harm its reputation and lead to financial penalties[361].

Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) Q3 2022 Earnings Conference Call November 9, 2022 11:30 AM ET Company Participants Julie Tepper - Investor Relations Brett Monia - Founder, CEO & Director Richard Geary - EVP & Chief Development Officer Elizabeth Hougen - EVP, Finance & CFO Eric Swayze - EVP, Research Eugene Schneider - EVP & Chief Clinical Development Officer Onaiza Cadoret - EVP, Chief Global Product Strategy & Operations Officer Conference Call Participants Gary Nachman - BMO Capital Markets Yana ...

IONIS | --- | --- | --- | --- | --- | |------------------|-------|-------|-------|-------| | | | | | | | November 9, 2022 | | | | | | Nasdaq: IONS | | | | | | | | | | | On Today's Earnings Call 2 Brett Monia, Ph.D. Chief Executive Officer Richard Geary, Ph.D. Executive Vice President, Development Beth Hougen Chief Financial Officer Eric Swayze, Ph.D. Executive Vice President, Research Eugene Schneider, M.D. Executive Vice President, Chief Clinical Development Officer Onaiza Cadoret Executive Vice President, ...