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Ionis Pharmaceuticals (IONS): 2019 Top Picks' Mid-Year Update

07/19/2019 5:00 am EST

Focus: HEALTHCARE

John McCamant

Editor, Medical Technology Stock Letter

John McCamant, editor of The Medical Technology Stock Letter, selected Ionis Pharmaceuticals (IONS) as a more conservative idea idea for 2019. The stock has risen 21%. Here's his latest update on this biotech firm.

IONS started off the year strong as their execution on recent FDA approvals and broad clinic progress has increased expectations for the company overall.  Since the strong start to the year, the stock has been under some pressure due to competitive concerns regarding Spinraza. 

While there is no denying the competitive threats, the combination of an experienced partner in Biogen and the growing body of excellent efficacy and safety data for Spinraza make it the drug to beat.  In our view, very few SMA patients will want to switch medications after having such wonderful results with Spinraza. 

Importantly, IONS and their Biogen partner have not been twiddling their thumbs as the competition advanced, the two companies already have a next generation drug development candidate for SMA ready to enter human clinical testing that has the potential to offer less frequent dosing over Spinraza.

IONS’ pipeline is advancing rapidly with potentially ten drug development candidates poised to enter pivotal Phase III testing by end of 2020.  This sets up IONS for huge value creation from a string of pivotal readouts in the early 2020s that would serve as significant stock catalysts. 

Investors will certainly be on the lookout for Phase II data which offers the potential for de-risking before we actually receive the Phase III read outs. One of the more important data readouts near-term will be the 15 month open-label extension data for IONIS-HTTRx in Huntington’s Disease in the 2H19. 

Other important near-term data points will be the Phase I/II data for of AKCEA-TTR-LRx (hATTR) in 2H19, Phase II data for IONIS-FXIRx, and Phase I data for IONIS-FXI-LRx (clotting disorders).   Lastly, partner AZN expects to complete a Phase II trial for danvatirsen (IONIS-STAT3-2.5Rx) and advance the product into pivotal cancer studies. 

With the pipeline rapidly shifting towards LICA technology, IONS’ future growth will be driven by assets based on this potentially safer and more potent technology platform. LICA allows for significantly less drug to be used (as much as a log order), which in our view, will provide substantial safety/tolerability improvements over their first generation technology. 

A great example of LICA progress is the confidence that partner Novartis has shown by committing to start the long and expensive Phase III CV outcomes trial for AKCEA-APO(a)-LRx later this year. Bigger picture, we see potential for substantial long-term value creation with the IONS platform and view the maturing next generation LICA technology as the key to unlocking IONS huge potential. 

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