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Morningstar | IONS Updated Forecasts and Estimates from 27 Mar 2019

Ionis Pharmaceuticals is a pioneer in designing therapeutics based on antisense technology, an approach that can silence overexpressed or harmful genes, including ones that are cancer-inducing or viral. The potential to treat at the genetic level makes antisense an ideal technology for diseases that are difficult to target with traditional drugs. We think this can be a game-changing technology that could follow in the footsteps of previous classes of innovative drugs, such as Amgen's recombinant proteins and Roche's monoclonal antibodies. Intellectual property will be critical in determining who benefits from the commercialization of RNA therapeutics such as antisense and RNA interference. Ionis appears to have a leading position alongside Alnylam, which has focused on RNAi technology. While the development of the technology has been challenging, Ionis managed to gain approval for its first drug, Kynamro, in 2013 and sign multiple partnership deals with Big Pharma players (including Biogen, GlaxoSmithKline, Roche, Novartis, Bayer, AstraZeneca, and Johnson & Johnson) to develop and commercialize its numerous pipeline opportunities. These deals have allowed the firm to speed development, diversify risk, leverage its discovery platform, and generate cash through up-front and milestone payments. Kynamro was slow to add revenue because of competition and slow uptake in HoFH, a rare genetic disease causing extremely high cholesterol, and Ionis sold its rights to the drug in 2016. In addition, Ionis expected a 2018 launch of volanesorsen in patients with extremely high triglycerides, but regulatory delays have pushed back potential approval to at least 2020, in our opinion. However, drivers for the company include $1.7 billion drug Spinraza (approved in late 2016 and partnered with Biogen) in spinal muscular atrophy and Tegsedi, which was approved in 2018 as a treatment for hereditary ATTR amyloidosis. Late-stage pipeline drugs target rare diseases and broader indications like diabetes and blood clotting, and we're encouraged by progress to pivotal studies for programs targeting cardiovascular disease, ALS, and Huntington's disease.