$ISIS Analyst Blog

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Isis Pharmaceuticals’ Q1 Loss Narrower than Expected – Analyst Blog

Isis Pharmaceuticals, Inc. ISIS reported a first-quarter 2015 loss of 14 cents per share, substantially narrower than the Zacks Consensus Estimate of a loss of 19 cents and the year-ago loss of 27 cents. Higher revenues in the reported quarter led to the narrower loss.

Isis Pharmaceuticals Inc. – Earnings Surprise | FindTheCompany

Total revenues in the quarter shot up 122.2% year over year to $62.6 million, significantly above the Zacks Consensus Estimate of $52.3 million. Revenues were driven by milestone payments of about $46 million.

The Quarter in Detail

Research & development expenses increased 20.6% year over year to $64.4 million. General & administrative expenses increased 70.5% year over year to $7.5 million.

Isis Pharma expanded its partnership portfolio by announcing an agreement with Bayer’s BAYRY HealthCare division under which the latter will develop and commercialize the former’s ISIS-FXIRx for the prevention of thrombosis. Under the deal, Isis Pharma is entitled to receive up to $375 million in payments, including a $100 million upfront payment and a $55 million milestone payment upon the advancement of the program following completion of a phase II study. In addition to this, Isis Pharma will be eligible to receive tiered royalties in the low-to-high 20% range on gross margins on ISIS-FXIRx.

Meanwhile, Isis Pharma has made significant progress with its pipeline. Currently, ISIS-APOCIIIRx is in phase III development for the treatment of patients suffering from familial chylomicronemia syndrome and partial lipodystrophy. The company intends to provide further details on the candidate next month.

Isis Pharma has partnership programs with companies like Biogen BIIB among others. Under its collaboration with Biogen, enrollment in both phase III studies on ISIS-SMNRx for the treatment of spinal muscular atrophy in infants and children, respectively, remain on track. Data from the phase III program on ISIS-SMNRx is expected in the 2016-2017 timeframe. Biogen is also conducting two additional studies on ISIS-SMNRx for the same indication.

Isis Pharma is developing ISIS-TTRRx for the treatment of patients with the polyneuropathy cardiomyopathy forms of transthyretin/TTR amyloidosis in collaboration with one of its partners. Additional phase III studies on ISIS-TTRRx for the treatment of patients suffering from TTR-related cardiomyopathy and familial amyloid polyneuropathy are expected to commence in 2015.

Our Take

We are pleased with the company beating both top- and bottom-line estimates. We are also positive on the deal with Bayer. Isis Pharma’s agreements with leading health care companies continue to validate its antisense technology and provide the company with funds in the form of upfront, milestone and other payments. Moreover, Isis Pharma has several candidates in mid-stage clinical development that could trigger future licensing opportunities.

We expect investor focus to remain on pipeline updates from the company.

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