Ionis Earnings: Maintaining Our $62 Fair Value Estimate as Series of New Launches Begins

Ionis reported a larger net loss in the first quarter of 2024 than in the first quarter of last year, due to lower royalties on rare disease drug Spinraza from partner Biogen as well as higher operating expenses as the pipeline advances. This was relatively in line with our expectations, and we’re maintaining our $62 fair value estimate, as we think the firm’s $2.2 billion in cash will help support the firm as it begins a series of key drug launches. We still expect Spinraza is capable of mid-single-digit growth annually, based on solid global demand, although we do expect a slight dip in 2024 due to the timing of orders and competition. Amyloidosis drug Wainua, partnered with AstraZeneca, generated $5 million in sales among polyneuropathy patients in its first quarter on the market, with launches outside the US coming later this year and data for the larger potential indication, cardiomyopathy, still likely in 2025. Alnylam’s similar drug Amvuttra also reduces production of the disease-causing protein; it already competes with Wainua in polyneuropathy and will generate phase 3 data in cardiomyopathy this summer. We expect the firms to share this multi-billion-dollar potential market relatively equally if both are approved, given Wainua’s convenient monthly self-injections. Overall, we think Ionis is making solid progress with its pipeline and commercialization strategy, which should help it build a larger portfolio of medicines that help support the firm’s narrow moat.