Ionis Pharmaceuticals Inc (IONS), Akcea Strike Favorable Deal with Novartis AG (ADR) (NVS): Cowen Top Analyst

Ionis Pharmaceuticals Inc (NASDAQ:IONS) shares were initially up 6% this morning after the biotech firm and its wholly-owned subsidiary Akcea Therapeutics signed an exclusive cardiovascular disease treatment collaborative agreement with Novartis AG (ADR) (NYSE:NVS). The deal centers on drug contenders APO(a)-LRx and APOC3-LRx for the treatment of dyslipidemias.

Ionis and Akcea are eligible to receive near-term payments in the amount of $225 million, as well as milestones and tiered royalties on each drug’s net sales. In return, Novartis will lead the development and commercialization for the drugs globally. Novartis can exercise its options to license and commercialize the two candidates should the firm decide by the completion of Phase II dose-ranging trials set to commence this year, should they prove to be successful.

In reaction, though top analyst Eric Schmidt at Cowen is not budging from the sidelines for now, he views the deal as “favorable” and commends Novartis for its strength in the cardiovascular playing field.

Cautious, yet optimistic, the analyst reiterates a Market Perform rating on shares of IONS without listing a price target.

Schmidt underscores, “Based on the deal terms, Novartis will be responsible for paying and executing large cardiovascular outcomes studies on APO(a)-LRx and APOCIII-LRx and potentially commercializing these agents to a broad physician base. These tasks would likely be beyond the scope and scale for Akcea, which aims to focus on rare or orphan lipid disorders such as familial chylomicronemia syndrome and familial partial lypodystrophy.”

Therefore, “As a result, today’s collaboration will enable Akcea/ Ionis to meaningfully accelerate their efforts into broader CV risk populations while retaining meaningful economics and reducing risk to large outcomes-oriented studies. Novartis’s willingness to spend aggressively on APO(a)-LRx and APOCIII-LRx also provides some comfort that any thrombocytopenia risk associated with Ionis’s advanced chemistry antisense candidates is of lesser concern,” Schmidt surmises.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Eric Schmidt has achieved a high ranking of #99 out of 4,369 analysts. Schmidt upholds a 53% success rate and realizes 18.1% in his yearly returns. When recommending IONS, Schmidt yields 77.6% in average profits on the stock.

TipRanks analytics indicate IONS as a Buy. Out of 10 analysts polled by TipRanks in the last 3 months, 5 are bullish on Ionis stock, 4 remain sidelined, and 1 is bearish on the stock. With a loss potential of 4%, the stock’s consensus target price stands at $46.86.

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