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The Key Reasons Behind Ionis Pharmaceuticals' 25% Gain in July


Image source: Getty Images.

What: Shares of Ionis Pharmaceuticals (NASDAQ: IONS), a predominantly clinical-stage drug developer that utilizes its proprietary antisense drug development platform to tackle oncologic, metabolic, and a host of other disorders, skyrocketed 25% in July, according to data from S&P Global Market Intelligence. The reason for Ionis' superior monthly performance can be traced to a host of positive clinical developments.

So what: To begin with, on July 7, Ionis reported positive clinical data for IONIS-TTRRx at the XV International Symposium on Amyloidosis. Of note, new data from an open-label extension study of patients with familial amyloid polyneuropathy (FAP) who had completed dosing in the phase 3 NEURO-TTR study showed a dramatic reduction in wild-type and mutant TTR levels as measured by liquid chromatograph-mass spectrometry. This study is expected to be completed by the first half of 2017. 

If you recall, in May, collaborative partner GlaxoSmithKline (NYSE: GSK) put the (temporary) kibosh on advancing IONIS-TTRRx to phase 3 studies for patients with TTR amyloid cardiomyopathy because of instances of low platelet levels in some patients with FAP. GlaxoSmithKline chose to hold off on pursuing phase 3 studies until the data from the NEURO-TTR study was complete. With new data suggesting positive benefits for IONIS-TTRRx, Ionis' shareholders can breathe a little easier that Glaxo will likely choose to advance IONIS-TTRrx into CARDIO-TTR next year.

Also, on July 19, Ionis announced that it earned a $10 million payment from Johnson & Johnson subsidiary Janssen Biotech for licensing IONIS-JB1-2.5rx, an oral antisense drug designed to inhibit an undisclosed target in the gastrointestinal tract. Johnson & Johnson's subsidiary will take over the development of the oral compound following Ionis' completion of investigational new drug-enabling studies, with Ionis becoming eligible to receive up to $800 million in development, regulatory, and sales-based milestone payments, as well as tiered royalty payments if it reaches pharmacy shelves.


Image source: Johnson & Johnson.

Now what: Ionis also started August off the on the right foot by announcing that its ENDEAR study, which was examining nusinersen as a treatment for infantile-onset spinal muscular atrophy, met its primary endpoint at the interim analysis, thus ending the study early on account of efficacy. Biogen, which is the collaborative partner for nusinersen, will fork over $75 million to Ionis to exercise its option to develop and market nusinersen globally. According to seasoned industry analyst Mark Schoenebaum at Evercore ISI, nusinersen could hit $1.7 billion in peak annual sales by 2025. 

Though GlaxoSmithKline withholding its support for advancing IONIS-TTRRx was a bit of a shock for long-term shareholders, the more than two dozen drugs currently in development, and the roughly one dozen collaborative partners Ionis Pharmaceuticals is working with, make it a drug developer worth considering for your portfolio.

Ionis has ample cash -- $723.5 million as of its latest quarter -- with which to further its pipeline, and its multiple collaborative partners gives it access to fairly regular milestone payment cash flow. Furthermore, having a proprietary platform that allows it to crank out between three and five clinical-quality drug candidates each year likely puts Ionis on the radars of big drugmakers looking to possibly boost their own growth rate.

While the ride could be bumpy, I'd suggest Ionis remains a solid stock to consider buying and holding over the long run.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle 

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