A month has gone by since the last earnings report for Ionis Pharmaceuticals (IONS Quick QuoteIONS - Free Report) . Shares have lost about 2.2% 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 catalysts.

Ionis Q2 Loss Narrower Than Expected, Revenues Miss

Ionis reported second-quarter adjusted loss per share of 23 cents, which was narrower than the Zacks Consensus Estimate of a loss of 28 cents. In the year-ago quarter, Ionis had recorded a loss of 1 cent per share.

Ionis reported total revenues of $146 million, down 11% year over year due to lower R&D revenues and royalties on Spinraza in the quarter. Sales also missed the Zacks Consensus Estimate of $151 million.

Quarter in Detail

Ionis earns commercial revenues primarily in the form of royalty payments on net sales of Spinraza and R&D revenues, which are revenues from partnered medicines.

Second-quarter revenues comprised commercial revenues of $90 million, up 2.3% year over year and R&D revenues of $56 million, lower than $76 million in the year-ago quarter.

Commercial revenues from Spinraza royalties were almost flat at $72 million as Biogen reported softer sales of the drug. Product sales from Tegsedi and Waylivra were $16 million, compared with $10 million in the year-ago quarter. License and royalty revenues were $2 million in the quarter.

R&D revenues included more than $26 million for advancing medicines within its neurological disease franchise, $13 million from the oncology franchise and more than $10 million from its cardio-renal franchise (includes partnered programs with Pfizer & AstraZeneca). R&D revenues from the oncology franchise included a license fee from AstraZeneca for cancer candidate, ION736.

R&D expenses rose 15.1% to $122 million in the quarter. SG&A expenses declined almost 4% year over year to $73 million in the quarter.

2020 Guidance

Ionis expects to be meaningfully profitable in 2020. It expects to record higher revenues and earnings in the second half of this year than the first half. R&D revenues are expected to be higher in the second half of 2020, compared with the first half of 2020.

Pipeline Update

Ionis plans to initiate a pivotal phase III study for AKCEA-APOCIII-LRx in patients with FCS later this year. Ionis plans to report additional proof-of-concept data from four or more mid-stage pipeline programs through the rest of the year and plans to file 10 or more new drug applications through the end of 2025.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -113.67% due to these changes.

VGM Scores

At this time, Ionis Pharmaceuticals has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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.