Ionis Pharmaceuticals(US:IONS)2023-08-08 16:00Revenue 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]