Analyst Note| Karen Andersen, CFA |
Ionis reported solid third-quarter results that put it on track to meet our full-year estimates, and we’re maintaining our $62 fair value estimate for the firm. Revenue grew 20% despite declines in royalties for spinal muscular atrophy drug Spinraza, as collaboration revenue from partners Roche, AstraZeneca, and Biogen drove growth. Management maintained its full-year guidance, although we think operating expenses are tracking well below management’s targeted range, despite supporting additional phase 3 programs. Ionis is also sitting on roughly $2 billion in cash, which should support further in-house phase 3 programs and any bolt-on acquisitions necessary to support further advancement of its pipeline of antisense drugs and support its narrow moat.