Cowen Top Analyst Cautious on Ionis Pharmaceuticals Inc (IONS); Here’s Why

Ionis Pharmaceuticals Inc (NASDAQ:IONS) posted second-quarter financial results and provided a clinical progress update. Despite many of the drug maker’s pipeline candidates continuing to make strides and pivotal Phase III data due soon, Cowen top analyst Eric Schmidt reiterates a Market Perform rating on shares of Ionis, without providing a price target.

Though remaining neutral on Ionis, Schmidt does feel positive on its main pipeline drug nusinersen, an investigational drug designed to treat spinal muscular atrophy (SMA). IONS and its partner Biogen (BIIB) are expected to submit global regulatory filings on the drug for SMA in the near-term. Meanwhile, three Phase III trials are anticipated to release data by the end of H1:17, including TTR-Rx for FAP, volanesorsen for FCS and nusinersen in Type 2 SMA. Schmidt affirms, “Our confidence remains highest in nusinersen’s developmental and commercial success.”

Just last week, IONS and BIIB indicated a positive interim analysis of Phase III ENDEAR study for nusinersen in infantile-onset Type 1 SMA. Following the success of this analysis, the trial was ended early with Biogen now choosing to exercise its option on the drug. The biotech leaders intend to bring nusinersen to patients suffering from SMA as quickly as possible, readying for both U.S. and EU regulatory submission, with the objective to apply for Breakthrough designation in the U.S. and accelerated assessment in the EU.

Schmidt believes, “Ionis Pharmaceuticals has validated its antisense platform by successfully shepherding systemic antisense drugs to commercial feasibility. We believe antisense candidates have the best chance of success when directed at treating orphan diseases that lack treatment alternatives. Prime examples within Ionis’s pipeline include candidates for spinal muscular atrophy (SMA), TTR amyloidosis, and familial chylomicronemia syndrome (FCS).”

However, Schmidt acknowledges the problem arises with not one, but two of the firm’s three leading candidates having encountered safety issues, specifically with cases of severe thrombocytopenia. From the analyst’s standpoint, this has not simply damaged crucial prospects for the company, but also has shrouded other opportunities in development in a cloud of skepticism, leaving him cautious on the future of IONS.

Additionally, Ionis reported second-quarter revenue of $38.5MM, compared to Schmidt’s expectation of $28MME. Ionis hit a GAAP Net Loss of $56.9MM, compared to the analyst’s estimate of $72.5MME. The firm closed the quarter with $664MM in cash flow, reiterating its financial guidance for 2016.

According to TipRanks, Eric Schmidt is a top five-star analyst, having reached a high ranking of #56 out of 4,110 analysts. Schmidt sustains a 55% success rate and realizes 22.2% in his yearly returns. When recommending IONS, Schmidt earns 61.4% in average profits on the stock.

TipRanks analytics demonstrate IONS as a Buy. Based on 8 analysts polled by TipRanks in the last 3 months, 4 rate a Buy on Ionis shares, 3 maintain a Hold, and 1 issues a Sell. The 12-month average price target stands at $37.17, marking a 3% upside.

Recommended Article: Barclays Boosts Price Target on Ionis Following Positive Nusinersen Phase 3 Results

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