Isis Reports Financial Results and Highlights for First Quarter 2013
- Conference Call Webcast Tuesday, May 7, 4:30 p.m. ET at www.isispharm.com
CARLSBAD, Calif., May 7, 2013
CARLSBAD, Calif., May 7, 2013 /PRNewswire/ -- Isis Pharmaceuticals, Inc.
(Nasdaq: ISIS) today reported pro forma operating income of $4.5 million and
pro forma net income of $1.2 million for the three months ended March 31, 2013
compared to a pro forma net operating loss of $16.2 million and a pro forma
net loss of $21.7 million for the same period in 2012. The significant
improvement in the Company's financial results was driven primarily by
milestone payments Isis earned in the first quarter, including a $25 million
milestone payment from Genzyme and a $7.5 million milestone payment from
GlaxoSmithKline (GSK). In addition, Isis maintained its cash position by
ending the first quarter of 2013 with approximately $372 million compared to
approximately $374 million at December 31, 2012. On a GAAP basis, Isis
reported income from operations of $1.6 million and a net loss of $1.7 million
for the three months ended March 31, 2013 compared to a loss from operations
of $18.5 million and a net loss of $24.0 million for the same period in 2012.
"The most significant event for Isis this quarter was the approval and launch
of KYNAMRO™ in the United States to treat patients with homozygous familial
hypercholesterolemia. The approval of KYNAMRO is an important event for these
patients who have a severe disease and who struggle daily to control their
LDL-C levels. Genzyme has commercially launched KYNAMRO and has physicians
qualified under the REMS program. KYNAMRO approval is also an important
milestone for Isis and our antisense technology. KYNAMRO is the first
systemically delivered antisense drug to be sold commercially and is the
culmination of many years of hard work and scientific achievements. We are
looking forward to updating you on KYNAMRO's commercial progress later in the
year," said B. Lynne Parshall, chief operating officer of Isis. "Isis' value
extends well beyond KYNAMRO. We have created a pipeline of promising products
to treat severe and rare, neurological, cardiovascular, metabolic and
inflammatory diseases, and cancer. Because we have such a robust pipeline, we
have numerous events to report throughout the year, including Phase 2 data
that we will report within the next couple of months."
"In addition to ending the quarter with both pro forma operating and net
income, we maintained our cash position by using only $2 million net during
the quarter. We were able to achieve these financial results because of the
success of our partnerships with Genzyme and GSK from which we earned $32.5
million in milestone payments in the first quarter. And, we have continued
this momentum into the second quarter. We have already received a $30 million
upfront fee from Roche for our Huntington's disease program and will earn a
$3.5 million milestone payment from Biogen Idec when we dose the first infant
with spinal muscular atrophy in the Phase 2 study for ISIS-SMN[Rx]," said
Elizabeth L. Hougen, chief financial officer of Isis. "With numerous
successful partnerships encompassing multiple drugs, we have continuing
opportunities to earn additional milestone payments from our partners as we
progress through the year. Our maturing pipeline of unpartnered assets
together with our prolific research programs enables us to explore new
collaborations as well."
Upcoming Key Milestones
oReport clinical data on ISIS-CRP[Rx] in patients with rheumatoid arthritis
oReport clinical data on ISIS-APOCIII[Rx] in patients with high
All pro forma amounts referred to in this press release exclude non-cash
compensation expense related to equity awards. Please refer to the
reconciliation of pro forma and GAAP measures, which is provided later in this
Revenue for the three months ended March 31, 2013 was $43.4 million compared
to $23.2 million for the same period in 2012. Isis' revenue fluctuates based
on the nature and timing of payments under agreements with Isis' partners,
including license fees, milestone-related payments and other payments. For
example, Isis' revenue in the first quarter of 2013 was significantly higher
than in the first quarter of 2012 primarily as a result of the $25 million
milestone payment from Genzyme for FDA approval of the KYNAMRO NDA and the
$7.5 million milestone payment from GSK for the initiation of the Phase 2/3
study of ISIS-TTR[Rx]. Also in the first quarter of 2013, Isis began
amortizing revenue from its new alliance with AstraZeneca and its third
collaboration with Biogen Idec. Isis' increase in revenue was offset, in
part, by the completion of the amortization of the upfront payments associated
with Isis' Genzyme collaboration.
On a pro forma basis, Isis' operating expenses for the three months ended
March 31, 2013 of $38.9 million were essentially flat compared to $39.4
million for the same period in 2012.
On a GAAP basis, Isis' operating expenses for the three months ended March 31,
2013 and 2012 were $41.7 million.
Gain on Investments
Isis' gain on investments for the three months ended March 31, 2013 wasdue to
the $1.1 million Isis realized when it sold the stock it held in Sarepta
Therapeutics. This gain demonstrates the value that Isis is realizing from its
satellite company strategy.
Isis reported a net loss of $1.7 million for the three months ended March 31,
2013 compared to $24.0 million for the same period in 2012. Basic and diluted
net loss per share for the three months ended March 31, 2013 was $0.02 per
share compared to $0.24 per share for the same period in 2012. Isis' net loss
was significantly lower than in 2012 primarily due to the milestone payments
it received from its partners in the first quarter.
As of March 31, 2013, Isis had cash, cash equivalents and short-term
investments of $371.9 million compared to $374.4 million at December 31, 2012
and had working capital of $361.5 million at March 31, 2013 compared to $349.1
million at December 31, 2012. Isis maintained its cash position primarily due
to the $32.5 million in milestone payments it received in the first quarter
while continuing to invest in its pipeline. Isis' cash at March 31, 2013 does
not include the $30 million upfront payment Isis received from Roche for Isis'
HTT collaboration. Isis' working capital increased in 2013 primarily due to
an increase in current assets resulting from an increase in Isis' investment
in Regulus. At March 31, 2013, the carrying value of Isis' investment in
Regulus was $44.9 million compared to $33.6 million at December 31, 2012.
"We have had a number of important accomplishments already this year.
Together with Genzyme we brought KYNAMRO to the market in the United States
for patients with HoFH. We continued to mature and expand our severe and rare
disease franchise, reporting early encouraging data on our first splicing
drug, ISIS-SMN[Rx], in children with spinal muscular atrophy and initiating
Phase 2/3 programs for ISIS-SMN[Rx] with Biogen Idec and ISIS-TTR[Rx] with
GSK. We plan to continue this momentum through the year. Over the next
couple of months we plan to report Phase 2 data on both ISIS-CRP[Rx] and
ISIS-APOCIII[Rx]," continued Ms. Parshall.
"We continue to be successful in implementing our business strategy and
establishing strategic partnerships that provide us with significant value.
The performance of our drugs in the clinic and the broad applicability of our
antisense technology have generated significant interest in Isis. One of our
partnering goals is to select high-quality partners for our severe
neurological disease and cancer programs to augment our own efforts in these
two newest areas of our pipeline. We have been successful implementing this
strategy. Since January of last year, we have initiated five new partnerships
that involve neurological diseases and cancer, bringing in more than $125
million in upfront payments and adding partners that are significantly
enhancing our drug discovery and development efforts in these therapeutic
areas," continued Ms. Parshall. "We believe that our partnerships are
structured to provide the best support and ultimately the best value for each
drug. Our partnership with Roche for our Huntington's disease program is a
very good example of how we benefit from the expertise and resources that our
partner brings while we maintain control over the discovery and early
development of the program. We look forward to broadly evaluating this
program with Roche and developing antisense drugs to treat Huntington's
Corporate and Drug Development Highlights
oIsis and Genzyme were successful in bringing KYNAMRO to the market in the
United States for patients with HoFH. These patients are at high
cardiovascular risk and may not be able to reduce their LDL-C sufficiently
with currently available lipid-lowering therapies.
oGenzyme launched KYNAMRO in the United States for the treatment of
patients with HoFH.
+Isis received a $25 million milestone payment from Genzyme
related to the marketing approval of KYNAMRO by the FDA.
oGenzyme continues to enroll the FOCUS FH study, which is designed to
provide 60-week safety and efficacy data in FH patients to support an
additional regulatory filing. Genzyme reached an agreement with the
FDA on the design of the FOCUS FH study via a Special Protocol
Assessment, or SPA.
oIsis and its investigators reported positive data from a number of drugs
in Isis' pipeline.
oDr. Claudia Chiriboga reported Phase 1 data on ISIS-SMN[Rx] at the
American Academy of Neurology. In this open-label study conducted in
a small population, ISIS-SMN[Rx] was well tolerated in children with
spinal muscular atrophy (SMA) and functional activity improvements
in muscle function were observed in a number of these children.
oIsis reported positive Phase 1 data on ISIS-CRP[Rx] demonstrating
that, in healthy volunteers, ISIS-CRP[Rx] can selectively blunt
severe increases in CRP following an endotoxin challenge, which
produces immune responses similar to those seen with bacterial
oIsis published data in the journal Circulation Research demonstrating
that antisense inhibition of ApoC-III produced significant reductions
of ApoC-III and triglycerides in multiple species including man.
Isis presented these data in an oral presentation at the 2013 Duell
Meeting in March 2013.
oIsis continued to advance its pipeline by initiating clinical studies in
numerous disease areas.
oIsis initiated a Phase 2 study of ISIS-SMN[Rx] in infants with SMA
and will earn a $3.5 million milestone payment from Biogen Idec when
the first patient is dosed in this study.
oIsis initiated a Phase 2/3 study of ISIS-TTR[Rx] in patients with
familial polyneuropathy and received a $7.5 million milestone payment
from GlaxoSmithKline related to the initiation of this study.
oAstraZeneca initiated a Phase 1b/2a study of ISIS-STAT3[Rx] in
patients with advanced metastatic hepatocellular carcinoma.
oIsis initiated a Phase 1 study of ISIS-APOA[Rx], an antisense drug
designed to reduce levels of Lp(a), an atherogenic lipoprotein.
oIsis formed a new alliance with Roche to discover and develop antisense
drugs to treat Huntington's disease.
oIsis received a $30 million upfront payment and is eligible to
receive up to $362 million in a license fee, pre-licensing and
post-licensing milestone payments, including up to $80 million in
oIn addition, Isis is eligible to receive up to $136.5 million in
milestone payments for each additional drug successfully developed
plus up to $50 million in commercial milestones if a drug using
Roche's proprietary brain shuttle technology is successfully
oIsis is also eligible to receive tiered royalties on sales of drugs
arising from the alliance.
At 4:30 p.m. Eastern Time today, May 7, 2013, Isis will conduct a live webcast
conference call to discuss this earnings release and related activities.
Interested parties may listen to the call by dialing 1-866-652-5200 and
provide the conference identification number "10028266", or access the webcast
at www.isispharm.com. A webcast replay will be available for a limited time
at the same address.
ABOUT ISIS PHARMACEUTICALS, INC.
Isis is exploiting its leadership position in antisense technology to discover
and develop novel drugs for its product pipeline and for its partners. Isis'
broad pipeline consists of 28 drugs to treat a wide variety of diseases with
an emphasis on cardiovascular, metabolic, severe and rare diseases, and
cancer. Isis' partner, Genzyme, is commercializing Isis' lead product,
KYNAMRO™, in the United States for the treatment of patients with HoFH.
Genzyme is also pursuing marketing approval of KYNAMRO in other markets.
Isis' patents provide strong and extensive protection for its drugs and
This press release includes forward-looking statements regarding Isis
Pharmaceuticals' financial position and outlook, Isis' business, and the
therapeutic and commercial potential of Isis' technologies and products in
development. Any statement describing Isis' goals, expectations, financial or
other projections, intentions or beliefs, including the commercial potential
of KYNAMRO, is a forward-looking statement and should be considered an at-risk
statement. Such statements are subject to certain risks and uncertainties,
particularly those inherent in the process of discovering, developing and
commercializing drugs that are safe and effective for use as human
therapeutics, and in the endeavor of building a business around such drugs.
Isis' forward-looking statements also involve assumptions that, if they never
materialize or prove correct, could cause its results to differ materially
from those expressed or implied by such forward-looking statements. Although
Isis' forward-looking statements reflect the good faith judgment of its
management, these statements are based only on facts and factors currently
known by Isis. As a result, you are cautioned not to rely on these
forward-looking statements. These and other risks concerning Isis' programs
are described in additional detail in Isis' annual report on Form 10-K for the
year ended December 31, 2012 and its most recent quarterly report on Form
10-Q, which are on file with the SEC. Copies of these and other documents are
available from the Company.
In this press release, unless the context requires otherwise, "Isis,"
"Company," "we," "our," and "us" refers to Isis Pharmaceuticals and its
Isis Pharmaceuticals® is a registered trademark of Isis Pharmaceuticals, Inc.
Regulus Therapeutics™ is a trademark of Regulus Therapeutics Inc. KYNAMRO™ is
a trademark of Genzyme Corporation.
ISIS PHARMACEUTICALS, INC.
SELECTED FINANCIAL INFORMATION
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three months ended,
Research and development revenueunder collaborative $41,921 $21,818
Licensing and royalty revenue 1,439 1,417
Total revenue 43,360 23,235
Research and development 38,312 38,714
General and administrative 3,423 2,976
Total operating expenses 41,735 41,690
Income (loss) from operations 1,625 (18,455)
Other income (expense):
Equity in net loss of Regulus Therapeutics Inc. - (976)
Investment income 376 600
Interest expense (4,795) (5,179)
Gain on investments, net 1,058 17
Loss before income tax expense $(1,736) $(23,993)
Income tax benefit (expense) 64 (2)
Net loss $(1,672) $(23,995)
Basic and diluted net loss per share $(0.02) $(0.24)
Shares used in computing basic and diluted net loss per 101,875 100,157
Isis Pharmaceuticals, Inc
Reconciliation of GAAP to Pro Forma Basis:
Condensed Consolidated Operating Expenses, (Income) Loss From Operations, and
Net Income (Loss)
Three months ended,
As reported operating expenses according to GAAP $41,735 $41,690
Excluding compensation expense related to (2,869) (2,267)
Pro forma operating expenses $38,866 $39,423
As reported income (loss) from operations $1,625 $(18,455)
according to GAAP
Excluding compensation expense related to (2,869) (2,267)
Pro forma income (loss) from operations $4,494 $(16,188)
As reported net loss according to GAAP $(1,672) $(23,995)
Excluding compensation expense related to (2,869) (2,267)
Pro forma net income (loss) $1,197 $(21,728)
Reconciliation of GAAP to Pro Forma Basis
As illustrated in the Selected Financial Information in this press release,
pro forma operating expenses, pro forma income (loss) from operations, and
proforma net income (loss) were adjusted from GAAP to exclude compensation
expense related to equity awards, which are non-cash. Isis has regularly
reported non-GAAP measures for operating results as pro forma results. These
measures are provided as supplementary information and are not a substitute
for financial measures calculated in accordance with GAAP. Isis reports these
pro forma results to better enable financial statement users to assess and
compare its historical performance and project its future operating results
and cash flows. Further, the presentation of Isis' pro forma results is
consistent with how Isis' management internally evaluates the performance of
Isis Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
March 31, December 31,
Cash, cash equivalents and short-term investments $371,911 $374,446
Investment in Regulus Therapeutics Inc. 44,863 33,622
Other current assets 15,055 15,370
Property, plant and equipment, net 89,694 91,084
Other assets 31,438 31,164
Total assets $552,961 $545,686
Liabilities and stockholders' equity:
Other current liabilities $35,051 $38,397
Current portion of deferred contract revenue 35,244 35,925
2 3/4% convertible senior notes 145,533 143,990
Long-term obligations, less current portion 77,226 77,952
Long-term deferred contract revenue 58,816 66,656
Stockholders' equity 201,091 182,766
Total liabilities and stockholders' equity $552,961 $545,686
SOURCE Isis Pharmaceuticals, Inc.
Contact: Isis Pharmaceuticals, D. Wade Walke, Ph.D., Executive Director,
Corporate Communications and Investor Relations, 760-603-2741; or Amy
Blackley, Ph.D., Associate Director, Corporate Communications, 760-603-2772
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