Isis Pharmaceuticals, Inc. ISIS reported fourth-quarter 2014 earnings of 25 cents per share, easily beating the Zacks Consensus Estimate of 12 cents. Isis Pharma had incurred a loss of 21 cents per share in the year-ago quarter. Shares were up 1.8% following the announcement.
Total revenues in the quarter shot up 100.9% year over year to $84.9 million, above the Zacks Consensus Estimate of $83 million. Revenues were driven by milestone payments of about $70 million.
Isis Pharma’s full-year loss of 33 cents per share was narrower than both the year-ago loss and the Zacks Consensus Estimate of a loss of 55 cents.
2014 revenues increased 45.4% to $214.2 million, beating the Zacks Consensus Estimate of $208 million.
The Quarter in Detail
Research & development expenses increased 18.3% year over year to $68 million. General & administrative expenses increased 46% year over year to $6.8 million.
Isis Pharma has made significant progress with its pipeline so far. The company formed a wholly owned subsidiary, Akcea Therapeutics Inc., to develop and commercialize its lipid drugs, ISIS-APOCIIIRx, ISIS-APO(a)Rx, ISIS-ANGPTL3Rx and any follow-on drug from these programs.
Isis Pharma is conducting a phase III study on ISIS-APOCIIIRx in patients suffering from familial chylomicronemia syndrome (FCS). The company intends to initiate a phase III study on ISIS-APOCIIIRx for an additional indication, partial lipodystrophy, shortly.
Data from the phase III study (FOCUS FH) on Kynamro, being evaluated for the treatment of patients with heterozygous familial hypercholesterolemia (HeFH), is expected in the middle of this year.
Isis Pharma has partnership programs with Biogen BIIB and GlaxoSmithKline GSK among others. Under its collaboration with Biogen, Isis Pharma initiated phase III studies (ENDEAR and CHERISH) on ISIS-SMNRx for the treatment of spinal muscular atrophy in infants and children, respectively. The phase III program on ISIS-SMNRx is expected to be completed in 2016.
Isis Pharma is developing ISIS-TTRRx for the treatment of patients with the polyneuropathy form of transthyretin/TTR amyloidosis in collaboration with Glaxo. The phase III study is well underway and Glaxo intends to initiate a phase III cardiac study on ISIS-TTRRx shortly.
2015 Guidance
For 2015, Isis Pharma expects net operating loss in the mid $50 million range and a cash balance of more than $630 million. The company expects revenues of more than $220 million in 2015 including amortization of upfront fees and milestone payments.
Isis Pharma expects its expenses to increase by about $45 million in 2015.
Our Take
We are pleased with the company beating both top-and bottom-line estimates. Isis Pharma’s agreements with several companies including Biogen among others not only validate its antisense technology, they also provide the company with funds in the form of upfront, milestone and other payments. Moreover, Isis Pharma has several candidates in mid-stage clinical development that could trigger future licensing opportunities.
Isis Pharma expects several pipeline related news with multiple data readouts lined up for the rest of the year. We expect investor focus to remain on pipeline updates from the company.
Isis Pharma currently carries a Zacks Rank #1 (Strong Buy). An equally well-ranked stock in the health care sector is Theravance Inc. THRX.
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