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Ionis Pharmaceuticals(IONS) - 2023 Q2 - Quarterly Report
IONSIonis Pharmaceuticals(IONS)2023-08-08 16:00
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Revenue and Financial Performance - Total revenue for Q2 2023 was 188.4million,a40.8188.4 million, a 40.8% increase compared to 133.8 million in Q2 2022[17] - Total revenues for Q2 2023 were 188.4million,a40.8188.4 million, a 40.8% increase compared to 133.8 million in Q2 2022[108] - Total revenue for Q2 2023 was 188.4million,comparedto188.4 million, compared to 133.8 million in Q2 2022, with a net loss of 85.3million[105]−TotalrevenueforthesixmonthsendedJune30,2023,was85.3 million[105] - Total revenue for the six months ended June 30, 2023, was 318.9 million, compared to 275.7millioninthesameperiodin2022[17]−TotalrevenuesforQ22023were275.7 million in the same period in 2022[17] - Total revenues for Q2 2023 were 188.4 million, a significant increase from 133.8millioninQ22022,drivenbyincreasedpaymentsfrompartneredprograms[108]−TotalrevenueforQ22023was133.8 million in Q2 2022, driven by increased payments from partnered programs[108] - Total revenue for Q2 2023 was 188.4 million, compared to 133.8millioninQ22022,and133.8 million in Q2 2022, and 318.9 million for the first half of 2023, compared to 275.7millioninthesameperiodof2022[105]−Thecompanyhasearnedapproximately275.7 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 61.0millioninQ22023,a2.361.0 million in Q2 2023, a 2.3% increase from 59.6 million in Q2 2022[17] - SPINRAZA royalties contributed 61.0millioninQ22023,slightlyupfrom61.0 million in Q2 2023, slightly up from 59.6 million in Q2 2022[108] - SPINRAZA royalties generated 61.0millioninrevenueforthethreemonthsendedJune30,2023,comparedto61.0 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 61.0millioninQ22023,withglobalSPINRAZAproductsalesreaching61.0 million in Q2 2023, with global SPINRAZA product sales reaching 437 million, showing resilience against competition[109] - SPINRAZA collaboration generated over 1.9billioninrevenuessinceinception,including1.9 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 110.5millioninQ22023,a98.7110.5 million in Q2 2023, a 98.7% increase from 55.6 million in Q2 2022[17] - R&D revenue for Q2 2023 was 110.5million,upfrom110.5 million, up from 55.6 million in Q2 2022, primarily due to milestone payments of 51.1millionandlicensefeesof51.1 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 173.3million,comparedto173.3 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 19.5millioninQ22023,upfrom19.5 million in Q2 2023, up from 17.4 million in Q2 2022[114] - Eplontersen joint development revenue for Q2 2023 was 19.5million,comparedto19.5 million, compared to 17.4 million in Q2 2022, and 43.9millionforthefirsthalfof2023,comparedto43.9 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 38.3million,comparedto38.3 million, compared to 35.0 million in Q2 2022, and 85.4millionforthefirsthalfof2023,comparedto85.4 million for the first half of 2023, compared to 71.1 million in the same period of 2022[114] - Eplontersen development expenses rose to 28.7millioninQ22023,upfrom28.7 million in Q2 2023, up from 24.3 million in Q2 2022[123] - Olezarsen development expenses surged to 31.3millioninQ22023,comparedto31.3 million in Q2 2023, compared to 12.7 million in Q2 2022[123] - Donidalorsen development expenses increased to 7.2millioninQ22023from7.2 million in Q2 2023 from 1.9 million in Q2 2022[123] - Drug development expenses for Q2 2023 were 145.5million,comparedto145.5 million, compared to 103.2 million in Q2 2022, and 269.9millionforthefirsthalfof2023,comparedto269.9 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 24.4millioninQ22023,downfrom24.4 million in Q2 2023, down from 25.7 million in Q2 2022[128] - R&D support expenses increased to 23.0millioninQ22023,upfrom23.0 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 41.2million,downfrom41.2 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 45.8million,upfrom45.8 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 85.3million,animprovementfrom85.3 million, an improvement from 105.1 million in Q2 2022[17] - Total operating expenses increased to 278.6millioninQ22023,up27.0278.6 million in Q2 2023, up 27.0% from 219.3 million in Q2 2022[17] - Operating expenses, excluding non-cash compensation, increased to 252.1millioninQ22023from252.1 million in Q2 2023 from 194.8 million in Q2 2022[115] - Net loss for the six months ended June 30, 2023, was 209.6million,comparedto209.6 million, compared to 170.3 million in the same period in 2022[17] - Total operating expenses for Q2 2023 were 278.6million,upfrom278.6 million, up from 219.3 million in Q2 2022, and 523.3millionforthefirsthalfof2023,comparedto523.3 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 85.3million,comparedto85.3 million, compared to 105.1 million in Q2 2022, and 209.6millionforthefirsthalfof2023,comparedto209.6 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 20.8millioninQ22023,comparedto20.8 million in Q2 2023, compared to 3.4 million in Q2 2022[17] - The company held 2.32billioninfairvaluesecuritiesasofJune30,2023,including2.32 billion in fair value securities as of June 30, 2023, including 809.1 million in U.S. Treasury securities[62] - Investment income increased to 20.8millioninQ22023,upfrom20.8 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 20.8million,comparedto20.8 million, compared to 3.4 million in Q2 2022, and 39.4millionforthefirsthalfof2023,comparedto39.4 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 316.4million[62]−GainoninvestmentsforthethreemonthsendedJune30,2023,was316.4 million[62] - Gain on investments for the three months ended June 30, 2023, was 0.7 million, compared to a loss of 6.3millioninthesameperiodin2022[137]−InvestmentgainsforthethreemonthsendedJune30,2023,were6.3 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 6.3millioninthesameperiodin2022[137]RoyaltyPharmaAgreement−Companyreceivedanupfrontpaymentof6.3 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 625millioninadditionalmilestonepayments[78]−RoyaltyPharmawillreceive25625 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 510.174millionasofJune30,2023[80]−Thecompanyreceivedanupfrontpaymentof510.174 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 625millioninadditionalmilestonepayments[78]−TheestimatedeffectiveinterestrateundertheRoyaltyPharmaagreementwas13.5625 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 500millionupfrontpaymentfromRoyaltyPharma[136]ConvertibleNotesandDebt−Companycompleteda500 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 632.5millionasofJune30,2023,withaneffectiveinterestrateof0.5632.5 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 114.8million[86]−Effectiveconversionpricefor0.125114.8 million[86] - Effective conversion price for 0.125% Notes with call spread was 123.38 per share[87] - Company recorded a 11.3milliongainontheearlyretirementof0.12511.3 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]−Thecompanyrepurchased53.73[82] - The company repurchased 434.1 million of its 0.125% Notes in June 2023, resulting in a remaining principal balance of 114.8millionasofJune30,2023[86]−Thecompanyrecordeda114.8 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 2.7billionunderlong−termdebtarrangementsfrominceptionthroughJune30,2023[144]Stock−BasedCompensation−Stock−basedcompensationexpensetotaled2.7 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 24.5millioninQ22022[74]−Theweighted−averagegrantdatefairvalueofRSUsgrantedtoemployeesforthesixmonthsendedJune30,2023,was24.5 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 58.99and58.99 and 42.28 per share, respectively[74] - Total stock-based compensation expense for the six months ended June 30, 2023 was 53.51million,comparedto53.51 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 50.5million,50.5 million, 70.7 million and 8.4million,respectively[74]TaxandValuationAllowance−Incometaxexpenseincreasedto8.4 million, respectively[74] Tax and Valuation Allowance - Income tax expense increased to 7.8 million in Q2 2023 from 2.3millioninQ22022,primarilyduetotheRoyaltyPharmatransaction[76]−Thecompanymaintainsafullvaluationallowanceonallnetdeferredtaxassets[77]−Thecompanyrecordedincometaxexpenseof2.3 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 19.2millionforthethreeandsixmonthsendedJune30,2023,respectively,comparedto19.2 million for the three and six months ended June 30, 2023, respectively, compared to 2.3 million and 3.4millionforthesameperiodsin2022[76]ProductDevelopmentandApprovals−QALSODYreceivedFDAacceleratedapprovalinApril2023forSOD1−ALStreatment[97]−Eplontersen′sPDUFAdateforATTRv−PNissetforDecember22,2023[97]−Phase3BALANCEstudyforolezarsenisontrackfordatareleaseinH22023[103]−Eplontersen′sPhase3NEURO−TTRansformstudyshowedpositiveresults,haltingneuropathydiseaseprogressionandimprovingqualityoflifethrough85weeks[103]−QALSODYreceivedacceleratedFDAapprovalinApril2023forSOD1−ALStreatment,withtheEMAcurrentlyreviewingitsMarketingAuthorizationApplicationintheEU[102]−ThecompanyhaseightmedicinesinPhase3studies,includingeplontersen,olezarsen,donidalorsen,andulefnersen,targetingvariousindications[103]−OlezarsenreceivedFDAfasttrackdesignationforFCStreatmentinJanuary2023,withPhase3BALANCEFCSstudydataexpectedinH22023[103]−Donidalorsen′sPhase3OASIS−HAEstudycompletedenrollmentinJune2023,withdataexpectedinH12024[103]CorporateStrategyandPartnerships−Corporatepartneringremainsakeystrategy,withpotentialrevenueimpactsifcollaborativepartnersfailtofunddevelopmentprograms[210]−AstraZenecaisfunding553.4 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 4.7millioninQ22022[118]−Medicalaffairsexpenseswere4.7 million in Q2 2022[118] - Medical affairs expenses were 5.4 million in Q2 2023, slightly up from 5.2millioninQ22022,withexpectationsoffurtherincreasesasthepipelineadvances[126]−CostofsalesforthethreemonthsendedJune30,2023,were5.2 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 4.7millioninthesameperiodin2022[118]−MedicalaffairsexpensesforthesixmonthsendedJune30,2023,were4.7 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 8.3millioninthesameperiodin2022[126]−CommercializationexpensesforeplontersenforQ22023were8.3 million in the same period in 2022[126] - Commercialization expenses for eplontersen for Q2 2023 were 2.5 million, compared to 0.5millioninQ22022,and0.5 million in Q2 2022, and 3.8 million for the first half of 2023, compared to 0.7millioninthesameperiodof2022[114]−MedicalaffairsexpensesforeplontersenforQ22023were0.7 million in the same period of 2022[114] - Medical affairs expenses for eplontersen for Q2 2023 were 1.1 million, compared to 0.5millioninQ22022,and0.5 million in Q2 2022, and 1.8 million for the first half of 2023, compared to 0.8millioninthesameperiodof2022[114]ContractualObligationsandCapitalExpenditures−TotalcontractualobligationsasofJune30,2023,amountedto0.8 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 31.0millionduewithinoneyear[147]−Thecompanyhasraisedapproximately31.0 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 14.0millioninJuly2017,financedwith14.0 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 1,673.7million,with1,673.7 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]