Yahoo Finance Why Is Ionis Pharmaceuticals (IONS) Down 16.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Ionis Pharmaceuticals (IONS). Shares have lost about 16.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Ionis Pharmaceuticals due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q3 Earnings & Sales Beat Estimates
Ionis reported a loss of 33 cents per share in third-quarter 2022, narrower than the Zacks Consensus Estimate of a loss of 74 cents. In the year-ago quarter, the company incurred a loss of 58 cents per share.
Reported earnings includes expenses related to the Akcea acquisition and restructured European and North American operations and other items. Excluding these non-recurring expenses, the loss per share was 16 cents versus 34 cents in the year-ago quarter.
Ionis reported total revenues of $160 million in the second quarter, up 20% year over year due to higher R&D revenues, which more than offset the lower commercial revenues. Sales also beat the Zacks Consensus Estimate of $151.0 million.
Quarter in Detail
Ionis earns commercial revenues, primarily royalty payments on net sales of Spinraza and R&D revenues from partnered medicines.
Commercial revenues were $73 million in the second quarter, down 15% year over year.
Commercial revenues from Spinraza royalties were $62 million, down 7% year over, due to rising competition in international markets and currency headwinds.
Revenues from Tegsedi and Waylivra from distribution fees were $6 million compared with $15 million in the year-ago quarter. License and royalty revenues were $5 million in the quarter compared with $3 million in the year-ago quarter.
R&D revenues of $87 million were higher than the year-ago revenues of $48 million, driven by significant partner payments Ionis earned across multiple partnered programs.
Adjusted operating costs were up 5.4% year over year to $195 million in the third quarter, mainly driven by higher R&D costs as the company advanced its wholly-owned late-stage pipeline. Ionis’ phase III studies doubled throughout 2022 from three to six. The SG&A expenses increased due to go-to-market activities for its late-stage pipeline candidates.
2022 Guidance
Ionis maintained its previously issued financial guidance for the year. The company expects total revenues to be more than $575 million in 2022 with commercial and R&D revenue roughly split 50-50. Its adjusted net loss is expected to be less than $275 million.
Adjusted operating expense is expected to be in the lower end of range of $825 million to $850 million. R&D costs are expected to increase in the range of 25-30% in 2022 compared with 2021. SG&A costs are expected to be in line with 2021.
The company, however, raised its cash and investment guidance to approximately $2 billion from the previous guidance of $1.7 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -10.27% due to these changes.
VGM Scores
Currently, Ionis Pharmaceuticals has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Ionis Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ionis Pharmaceuticals is part of the Zacks Medical - Drugs industry. Over the past month, Zoetis (ZTS), a stock from the same industry, has gained 7.8%. The company reported its results for the quarter ended September 2022 more than a month ago.
Zoetis reported revenues of $2 billion in the last reported quarter, representing a year-over-year change of +0.6%. EPS of $1.21 for the same period compares with $1.25 a year ago.
Zoetis is expected to post earnings of $1.15 per share for the current quarter, representing a year-over-year change of +15%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Zoetis. Also, the stock has a VGM Score of D.
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Ionis Pharmaceuticals, Inc. (IONS) : Free Stock Analysis Report
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