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Ionis Pharmaceuticals Inc IONS

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Biogen and Ionis Present Disappointing ALS Data; No Significant FVE Changes

Karen Andersen, CFA Sector Strategist

Analyst Note

| Karen Andersen, CFA |

Biogen and Ionis announced mixed phase 3 data from the Valor study for ALS drug candidate tofersen on Oct. 17, as part of the annual meeting of the American Neurological Association, and we're not expecting to make any significant changes to our fair value estimates for either firm. As it stands, we include a 40% probability of approval for tofersen in 2022 in our valuation models, with probability-adjusted sales of $425 million (to Biogen) and royalties of $52 million (to Ionis) by 2030. While tofersen missed the key primary endpoint in this placebo-controlled study, which used the revised amyotrophic lateral sclerosis functional rating scale, there were trends toward reduced disease progression, particularly among patients who started treatment earlier. In addition, biomarkers appeared to point to the drug's ability to reach its target and plausibly slow neurodegeneration, as measured by reduced SOD1 levels and neurofilament. Biogen plans to expand its access program, which allows ALS patients to access the drug prior to approval, and will continue with the ongoing Atlas trial, which seeks to prevent clinical manifestation of ALS in presymptomatic patients diagnosed using SOD1 and filament levels. While we could see a path to approval for the drug, either with continued follow-up from the Valor study or with data from Atlas, we continue to see failure as slightly more likely. We see Biogen's broad neurology portfolio and pipeline as warranting a wide moat, and Ionis' antisense technology supporting a narrow moat. However, the failure of Ionis's Huntington's disease program and delays with its inhaled drug candidates could signal erosion of the firm's positive moat trend, and we're carefully watching for progress in the key areas of rare diseases and cardiology to find continued support for our trend rating.

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Company Profile

Business Description

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. Ionis subsequently brought two additional drugs to market via its cardiovascular-focused subsidiary Akcea, including ATTR amyloidosis drug Tegsedi (2018) and cardiology drug Waylivra (Europe, 2019).

2855 Gazelle Court
Carlsbad, CA, 92010
T +1 760 931-9200
Sector Healthcare
Industry Biotechnology
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Distressed
Employees 757