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Ionis Pharmaceuticals Inc IONS

Morningstar Rating
$49.25 −0.27 (0.55%)
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Company Report

Ionis Earnings: Third-Quarter Results Show Growing Late-Stage Pipeline; Shares Remain Undervalued

Ionis revenue fell 10% to $144 million in the third quarter relative to the same period in 2022, due to fluctuations in the timing of payments from collaboration partners. We’re maintaining our $62 fair value estimate as the pipeline is moving forward as expected, and management reaffirmed 2023 guidance. We have raised our long-term sales estimates for amyloidosis drug eplontersen due to a delay in competition from Alnylam in the key cardiomyopathy indication and added the phase 3 Alexander disease drug candidate to our model, while also raising long-term SG&A expenses to support these launches, with no meaningful valuation impact overall. Spinraza royalties held relatively steady at $67 million, and we expect royalties from Biogen could see longer-term stability if the partners have success with a high-dose version of Spinraza or a next-generation product that could be dosed less frequently. Operating expenses are climbing as three in-house launches are potentially approaching, led by eplontersen (expected approval next month in polyneuropathy), high triglyceride drug olezarsen (filing in early 2024 in hereditary forms, additional data in late 2024 or early 2025 in broader high triglyceride market), and angioedema drug donidalorsen (data expected in the first half of 2024). Overall, despite significant competition with Alnylam for collaborations and upcoming likely direct commercial competition, we think Ionis’ platform provides a strong set of mid- to late-stage programs that look competitive on efficacy, safety, and convenience. We think shares look undervalued, as the market underappreciates the ability of Ionis to translate its antisense technology platform into multiple drug launches across rare diseases, neurology, and cardiology. We think approved spinal muscular atrophy drug Spinraza and ALS drug Qalsody provide solid proof-of-concept for Ionis’ technology, supporting a narrow moat.

Price vs Fair Value

IONS is trading at a 20% discount.
Price
$49.47
Fair Value
$87.00
Uncertainty
High
1-Star Price
$47.30
5-Star Price
$47.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Ionis' antisense technology and intellectual property estate have allowed the firm to create an entirely new class of therapeutics for difficult-to-treat diseases.

Bears

Beyond recent strong collaboration revenue, Ionis has historically been unprofitable, and RNA-based therapies have had a long path to market.

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News

Trading Information

Previous Close Price
$49.52
Day Range
$48.6349.43
52-Week Range
$32.7251.87
Bid/Ask
$49.18 / $49.29
Market Cap
$7.06 Bil
Volume/Avg
60,236 / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
11.49
Dividend Yield
Dividend Yield (Forward)
Total Yield

Company Profile

Ionis Pharmaceuticals is the leading developer of antisense technology to discover and develop novel drugs. Its broad clinical and preclinical pipeline targets a wide variety of diseases, with an emphasis on cardiovascular, metabolic, neurological, and rare diseases. Ionis and partner Biogen brought Spinraza to market in 2016 as a treatment for a rare neuromuscular disorder, spinal muscular atrophy, and Biogen launched ALS drug Qalsody in 2023. Ionis brought two additional drugs to market via its cardiovascular-focused subsidiary Akcea, including ATTR amyloidosis drug Tegsedi (2018) and cardiology drug Waylivra (Europe, 2019).
Sector
Healthcare
Industry
Biotechnology
Stock Style Box
Small Value
Total Number of Employees
796

Competitors

Valuation

Metric
IONS
AMGN
VRTX
Price/Earnings (Normalized)
15.0523.95
Price/Book Value
22.4918.965.53
Price/Sales
11.495.449.55
Price/Cash Flow
14.8023.64
Price/Earnings
IONS
AMGN
VRTX

Financial Strength

Metric
IONS
AMGN
VRTX
Quick Ratio
5.882.413.74
Current Ratio
6.392.864.08
Interest Coverage
−5.814.5484.99
Quick Ratio
IONS
AMGN
VRTX

Profitability

Metric
IONS
AMGN
VRTX
Return on Assets (Normalized)
−16.22%12.17%20.07%
Return on Equity (Normalized)
−93.01%178.84%26.24%
Return on Invested Capital (Normalized)
−21.65%20.51%22.40%
Return on Assets
IONS
AMGN
VRTX

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