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Understanding Ionis Pharmaceuticals’ 2015 Revenue Stream

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Ionis’s revenues

As we saw in the previous parts of this series, Ionis Pharmaceuticals (IONS) reported revenues of $284 million in 2015. This converts to more than 32% revenue growth in 2015 compared to $214 million in 2014. Analysts are estimating that revenues will decline more than 16% to $237 million in 2016.

The above graph shows Ionis Pharmaceuticals’ revenues over the last five years.

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Revenue performance

Let’s break down Ionis’s 2015 revenues of ~$284 million:

  • $116 million from partners’ milestone payments
  • $91 million from the Bayer collaboration
  • $77 million from amortization of upfront fees and manufacturing services rendered to its partners in 2015

Ionis reports its revenues in two parts:

  • research and development revenues under collaborative agreements
  • licensing and royalty revenues

Research and development revenues

The company’s research and development revenues under collaborative agreements for 2015 were $281 million. This compares to $202 million for 2014. Here’s a breakdown of these revenues:

  • $91.2 million for the exclusive license agreement with Bayer for Ionis-FXI
  • $72.6 million for advancing nusinersen’s Phase III study, Ionis-DMPK, Ionis-BIIB, and validation of three new targets for neurological disorders from Biogen Idec (BIIB)
  • $22 million for the initiation of the Phase I/II study of Ionis-HTT from Roche (RHHBY)
  • $20 million for Ionis-TTR’s Phase III program and initiation of Ionis-GSK4-L’s Phase I program from GlaxoSmithKline (GSK)
  • $75.6 million from the amortization of upfront fees and manufacturing services performed for the company’s partners

Licensing and royalty revenues

Ionis Pharmaceuticals’ licensing and royalty revenues decreased to $2.3 million for 2015 compared to $11.6 million for 2014. Revenues for 2014 included $9.5 million in sublicensing revenues from Alnylam Pharmaceuticals for licensing one Ionis technology to its partners.

To divest the risk, you can consider investing in ETFs such as the iShares Nasdaq Biotech ETF (IBB), which holds ~1.0% of its total assets in Ionis. You might also consider the First Trust Health Care AlphaDex Fund (FXH), which holds ~1.4% of its total assets in Ionis. IBB also holds 8.2% of its total assets in Amgen (AMGN), 8.2% in Gilead Sciences (GILD), 7.7% in Celgene (CELG), and 7.8% in Biogen (BIIB).

Next, let’s look at Ionis Pharmaceuticals’ nusinersen for the treatment of patients with spinal muscular atrophy.

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