Ionis Pharmaceuticals Inc (NASDAQ:IONS) and Akcea Therapeutics, a wholly-owned subsidiary of Ionis, announced an exclusive, worldwide option and collaboration agreement with Novartis to develop and commercialize AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx.

Ionis and Akcea are eligible to receive $225 million in near-term payments, including an immediate $75 million up-front option payment and a $100 million equity investment in Ionis, which equates to 1,631,435 shares at $61.30 per share.  Ionis and Akcea are also eligible to receive a license fee as well as development, regulatory and commercial milestone payments as each drug advances.  In addition, Ionis and Akcea are eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of each drug.

“AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx are novel potential therapies to address the broad opportunities that still exist to treat cardiovascular disease, despite currently available therapies.  We believe that Novartis is the ideal partner for developing both drugs to their fullest potential,” said Paula Soteropoulos, chief executive officer at Akcea Therapeutics.

“We are advancing our pipeline of novel drugs to treat previously inadequately treated lipid disorders by pursuing indications that drive the greatest near- and long-term value.  This strategic partnership allows us to move more rapidly to Phase 3 cardiovascular outcomes studies with both therapies than our original development plan.  Our ability to benefit from Novartis’ global commercialization resources and complement them with Akcea’s specialized sales force focused on lipid specialists should allow us to maximize the commercial potential of each drug.”

Ionis and Akcea plan to conduct a Phase 2 dose-ranging study for each drug, to choose the optimal dose and evaluate alternative dose schedules, such as monthly dosing, for the Phase 3 study.  Following the successful completion of each Phase 2 dose-ranging study, and prior to initiation of the Phase 3 study, Novartis will be able to exercise its option to license and commercialize each drug.

For each drug, upon option exercise, Novartis will pay Ionis and Akcea a $150 million license fee, will initiate a global Phase 3 cardiovascular outcome study in a high-risk population and will be responsible for worldwide development and commercialization activities.  Akcea retains the right to co-commercialize any successful drug through its specialty sales force focused on lipid specialists on terms and conditions to be agreed with Novartis.

Ionis and Akcea are also eligible to receive up to $315 million and $265 million in development and regulatory milestone payments for AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx, respectively, as well as up to $285 million and $265 million in commercialization milestone payments, for each drug, respectively.  Novartis has an obligation to make a further equity investment of $50 million in the next 18 months in either Ionis at the same premium as the initial investment or in Akcea. (Original Source)

Shares of Ionis Pharmaceuticals Inc. are currently rising 5.86% to $49.85, or up $2.76 in pre-market trading Thursday. IONS has a 1-year high of $59.04 and a 1-year low of $19.59. The stock’s 50-day moving average is $47.48 and its 200-day moving average is $34.84.

On the ratings front, Ionis Pharmaceuticals has been the subject of a number of recent research reports. In a report released yesterday, Janney Montgomery Scott analyst Debjit Chattopadhyay maintained a Hold rating on IONS, with a price target of $44, which represents a potential downside of 7% from where the stock is currently trading. Separately, on December 27, Needham’s Chad Messer reiterated a Buy rating on the stock and has a price target of $64.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Debjit Chattopadhyay and Chad Messer have a yearly average loss of -2.4% and a return of 1.2% respectively. Chattopadhyay has a success rate of 45% and is ranked #3749 out of 4348 analysts, while Messer has a success rate of 42% and is ranked #2021.

Sentiment on the street is mostly bullish on IONS stock. Out of 10 analysts who cover the stock, 5 suggest a Buy rating , 4 suggest a Hold and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $54.00, which represents a potential upside of 15% from where the stock is currently trading.

Ionis Pharmaceuticals, Inc. engages in the development and commercialization of antisense drug discovery. It operates its business through the Ionis Core and Akea Therapeutics segments. The Ionis Core segment involves a a novel drug discovery platform generate a broad pipeline of drugs. The Akea Therapeutics segment develops and commercializes drugs for cardiometabolic disorders.