Morningstar | Ionis' Potential Launches and Pipeline Support Positive Moat Trend; Shares Remain Fairly Valued
We are reiterating our fair value estimate of $49 per share for no-moat Ionis following in-line second-quarter results that included $118 million in revenue, up 15% from last year. While operating income dipped into the red this quarter, Ionis is still on track to post positive operating profits in 2018, which would be its second consecutive year thanks to consistent milestones and revenue from Spinraza for spinal muscular atrophy. Spinraza revenue contributed $57 million, up nearly 40% from the first quarter, and Ionis is on track with our expectations of $204 million in commercial revenue from the drug in 2018. Despite this momentum, we expect Spinraza sales growth to waver after 2018 as a result of potential competition from Novartis' gene therapy, AveXis.We expect Ionis' best near-term growth opportunity to be the firm's therapy for familial chylomicronemia syndrome, Waylivra (volanesorsen), which is pending approval in the United States and Europe and expected to launch later this year. Tegsedi (inotersen) for hereditary transthyretin amyloidosis is also expected to launch this year, pending approval, but we believe that Alnylam's patisiran has a more attractive efficacy and side effect profile than inotersen. On Aug. 4, Ionis subsidiary Akcea Therapeutics announced a collaboration agreement with PTC Therapeutics that will commercialize Waylivra and Tegsedi in Latin America, which represents an eligible patient population of about 6,000 people. We believe this was a necessary step to get the drug to market as quickly as possible, given that patisiran is awaiting approval in both the U.S. and Europe, with decisions to be announced by next week.
We continue to view Ionis' pipeline positively as the firm demonstrates its ability to leverage its antisense drug platform in a range of indications, including Huntington's disease, dementia, cardiovascular disease, diabetes, nonalcoholic steatohepatitis, and several others.
Ionis Pharmaceuticals is engaged in discovering and developing RNA-targeted therapeutics. The company has two commercial medicines, SPINRAZA and TEGSEDI. SPINRAZA (nusinersen) injection for intrathecal use is a survival motor neuron-2, directed antisense oligonucleotide indicated for the treatment of spinal muscular atrophy in pediatric and adult patients. TEGSEDI (inotersen) injection is a Generation 2+ antisense medicine and an approved subcutaneous RNA-targeting medicine designed to treat people with polyneuropathy caused by hereditary transthyretin amyloidosis.
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