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How Ionis Pharmaceuticals’ Valuation Compares


Jul. 6 2018, Updated 6:02 p.m. ET

A look at Ionis Pharmaceuticals

Ionis Pharmaceuticals (IONS), an RNA[1.ribonucleic acid]-targeted therapeutics development leader, commercializes products in collaboration with other pharmaceutical companies. In Q1 2018, Ionis’s revenue grew 24.7% YoY (year-over-year) to $144.4 million from $115.8 million.

The chart below shows Ionis’s revenue and EPS since Q1 2017, and analysts’ estimate for Q2 2018. In the second quarter, analysts expect Ionis’s revenue to grow 30.6% YoY to $136.0 million. However, they expect its EPS to be negative, forecasting an adjusted loss of ~$24.3 million.

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Forward PE multiples

Ionis was trading at a forward PE multiple of ~92.0x on July 6, higher than the industry average of ~13.8x. Competitors Incyte (INCY), Vertex Pharmaceuticals (VRTX), and Regeneron Pharmaceuticals (REGN) had forward PE multiples of 37.1x, 41.5x, and 17.6x, respectively.

Forward enterprise value-to-EBITDA multiples

On a capital-structure-neutral basis, Ionis’s forward EV[2. enterprise value]-to-EBITDA multiple was ~362.8x on July 6, much higher than the industry average of ~10.4x. Incyte, Vertex, and Regeneron had forward EV-to-EBITDA multiples of 25.0x, 36.7x, and 12.8x, respectively.

Forward EV-to-revenue multiples

As of July 6, Ionis’s forward EV-to-revenue multiple was 6.6x, higher than the industry average of 4.2x. Incyte, Vertex, and Regeneron had forward EV-to-revenue multiples of 6.8x, ~13.0x, and 5.4x, respectively. The SPDR S&P Biotech ETF (XBI) invests 1.2% of its holdings in Ionis, 1.3% in Incyte, 1.4% in Vertex, and 1.5% in Regeneron.


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