Akcea Reports Financial Results and Highlights for Second Quarter 2020
BOSTON, Aug. 4, 2020 /PRNewswire/ -- Akcea Therapeutics, Inc. (NASDAQ: AKCA), a majority-owned affiliate of Ionis Pharmaceuticals, Inc., focused on developing and commercializing medicines to treat patients with serious and rare diseases, today reported financial results for the second quarter ended June 30, 2020. The company reported a net loss for the three and six months ended June 30, 2020 on a GAAP basis of $50 million and $92 million, respectively. On a non-GAAP basis, the company reported a net loss for the three and six months ended June 30, 2020 of $33 million and $69 million, respectively. Akcea had $390 million of cash, cash equivalents and short-term investments as of June 30, 2020.
"We achieved important commercial milestones during the second quarter and continued to see consistent revenue growth with both TEGSEDI and WAYLIVRA," said Damien McDevitt, chief executive officer of Akcea. "We also continued to enhance and build upon the strength of our management team with the addition of several key leaders. We now have a full team in place and look forward to their many contributions as we move the company forward. Our focus remains on executing on our commercial launches, expanding our pipeline, and delivering our robust portfolio of medicines to patients living with serious and rare diseases."
"In the second quarter, we achieved commercial product revenues of $16 million from TEGSEDI and WAYLIVRA, an increase of 66% from the prior year quarter, and an increase of 8% from the first quarter 2020," said Michael Price, chief financial officer of Akcea. "We remain well capitalized with $390 million in cash and short-term investments as of the end of June, putting us in a strong financial position to execute on our strategic priorities going forward."
Upcoming Events
-- Launch of TEGSEDI in additional E.U. countries, and through PTC
Therapeutics in Latin America
-- Launch of WAYLIVRA in additional E.U. countries
-- Refile marketing application for WAYLIVRA in the U.S. with the Food and
Drug Administration, or FDA
-- Initiate a Phase 3 study of AKCEA-APOCIII-L(Rx) for Familial
Chylomicronemia Syndrome, or FCS, this year
-- Present the positive Phase 2 results of AKCEA-APOCIII-L(Rx) and
vupanorsen (AKCEA-ANGPTL3-L(Rx)) at an upcoming medical congress in Q3
Recent Organizational Developments
-- Strengthened and expanded the management team
-- Michael Price as EVP and Chief Financial Officer
-- Carla Poulson as SVP and Chief Human Resources Officer
-- Dr. William Andrews as Chief Medical Officer
-- Tracy Palmer Berns as Chief Compliance Officer
-- Dr. Kia Motesharei as SVP, Business Development and Corporate
Strategy
-- Dr. Christophe Hotermans as SVP, Global Medical Affairs
Recent Commercial Achievements
-- Achieved total product sales of $16 million, maintaining consistent
quarter over quarter sales growth
-- Finalized pricing and reimbursement in Spain, Portugal, Italy and
Austria for TEGSEDI
-- Secured listing for TEGSEDI in several Canadian provinces, clearing the
path to reimbursement following the signing of the Letter of Intent with
the pan-Canadian Pharmaceutical Alliance, or pCPA
-- Added first patient on commercial therapy in Greece for WAYLIVRA
-- Successfully concluded pricing and reimbursement negotiations in Germany
for WAYLIVRA
-- Marketing Authorization Application submitted to ANVISA in Brazil
through PTC Therapeutics for WAYLIVRA
Recent Pipeline Achievements
-- AKCEA-APO(a)-L(Rx) granted Fast Track Designation for the treatment of
Lp(a)-driven cardiovascular disease; trial readout is currently expected
in 2024
-- Results from the NEURO-TTR Phase 3 Open-Label Extension (OLE) study in
Patients with Polyneuropathy Driven by Hereditary Transthyretin
Amyloidosis were published in the European Journal of Neurology. Find
more info at www.doi.org
Financial Results
All non-GAAP amounts referred to in this press release exclude non-cash compensation expense related to equity awards. Please refer to the reconciliation of non-GAAP and GAAP measures, which is provided later in this release.
Revenue
Akcea's total revenue for the three and six months ended June 30, 2020 was $22 million and $38 million, respectively, which was comprised of product revenue and research and development collaboration revenue. Revenue from sales of TEGSEDI and WAYLIVRA during the three and six months ended June 30, 2020 was $16 million and $32 million, respectively, compared to $10 million and $17 million for the same periods in 2019. Akcea did not recognize licensing revenue in 2020, whereas licensing revenue totaled $6 million from PTC Therapeutics for the three and six months ended June 30, 2019. Akcea's research and development collaboration revenue for the three and six months ended June 30, 2020 was $6 million and $7 million, respectively, compared to $11 million and $168 million for the same periods in 2019. The decrease in research and development collaboration revenue for the six months ended June 30, 2020 compared to the same period in 2019 was primarily related to the $150 million license fee the company earned in the first quarter of 2019 as a result of Novartis' exercise of its option to license AKCEA-APO(a)-L(Rx).
Expenses
Akcea's operating expenses, net of the reimbursement due from Ionis through the companies' profit/loss share arrangement, for the three and six months ended June 30, 2020 on a GAAP basis were $73 million and $135 million, respectively, and on a non-GAAP basis were $57 million and $111 million, respectively. These amounts compare to GAAP operating expenses of $65 million and $203 million and non-GAAP operating expenses of $51 million and $170 million for the same periods in 2019. The decrease in operating expenses for the six months ended June 30, 2020 compared to the same period in the prior year was primarily due to the one-time $75 million sublicense fee paid to Ionis as a result of Novartis' license of AKCEA-APO(a)-L(Rx) in 2019 and lower development costs as a result of studies completed in 2019.
Net Loss
Akcea reported a net loss of $50 million and $92 million on a GAAP basis for the three and six months ended June 30, 2020, respectively, compared to a net loss of $37 million and $10 million for the same periods in 2019. Akcea reported a non-GAAP net loss of $33 million and $69 million for the three and six months ended June 30, 2020, respectively. This compared to a non-GAAP net loss of $23 million and non-GAAP net income of $23 million for the same periods in 2019. The change from non-GAAP net income to non-GAAP net loss was due to the decrease in research and development collaboration revenue described above.
For the three and six months ended June 30, 2020, basic and diluted net loss per share of common stock owned by Ionis were $0.49 and $0.91, respectively. For the three and six months ended June 30, 2020, basic and diluted net loss per share of common stock owned by others was $0.49 and $0.91, respectively. For the three and six months ended June 30, 2019, basic and diluted net loss per share of common stock owned by Ionis was $0.40 and $0.06, respectively. For the three and six months ended June 30, 2019, basic and diluted net loss per share of common stock owned by others was $0.40 and $0.26, respectively.
Balance Sheet
As of June 30, 2020, Akcea had cash, cash equivalents and short-term investments of $390 million compared to $464 million at December 31, 2019. With its strong balance sheet, the Company believes it is well positioned to continue to execute on its strategy and potentially broaden its pipeline.
Conference Call
At 4:30 p.m. Eastern Time today, August 4, 2020, Akcea will conduct a live webcast conference call to discuss this earnings release and related activities. Interested parties may listen to the call by dialing 888-317-6003, passcode 9496130 or access the webcast at www.akceatx.com. A webcast replay will be available for a limited time at the same address.
ABOUT AKCEA THERAPEUTICS
Akcea Therapeutics, Inc., a majority-owned affiliate of?Ionis Pharmaceuticals, Inc. (NASDAQ: IONS), is a biopharmaceutical company focused on developing and commercializing medicines to treat patients with serious and rare diseases. Akcea is commercializing TEGSEDI(®) (inotersen) and WAYLIVRA(®)?(volanesorsen), as well as advancing a mature pipeline of novel medicines, including AKCEA-APO(a)-L(Rx), vupanorsen (AKCEA-ANGPTL3-L(Rx)), AKCEA-APOCIII-L(Rx), and AKCEA-TTR-L(Rx), with the potential to treat multiple diseases. All six medicines were discovered by Ionis, a leader in antisense therapeutics, and are based on Ionis' proprietary antisense technology. TEGSEDI is approved in the U.S., E.U., Canada and Brazil, and WAYLIVRA is approved in the E.U. Akcea is headquartered in Boston, Massachusetts, and is building the infrastructure to commercialize its medicines globally. Additional information about Akcea is available at?www.akceatx.com and you can follow the Company on twitter at @akceatx.
FORWARD-LOOKING STATEMENT
This press release includes forward-looking statements regarding the business of Akcea Therapeutics, Inc. Any statement describing Akcea's goals, expectations, financial or other projections, intentions or beliefs, including the commercial potential of TEGSEDI(®), WAYLIVRA(®), and Akcea's other medicines in development 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 medicines that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such medicines. Akcea's 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 Akcea's forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Akcea. In particular, we caution you that our forward-looking statements are subject to the ongoing and developing circumstances related to the COVID-19 pandemic, which may have a material adverse effect on our business, operations and future financial results. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Akcea's programs are described in additional detail in Akcea's quarterly reports on Form 10-Q and annual reports on Form 10-K, 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, "Ionis", "Akcea," "Company," "Companies," "we," "our," and "us" refers to Ionis Pharmaceuticals and/or Akcea Therapeutics.
Ionis Pharmaceuticals(TM) is a trademark of Ionis Pharmaceuticals, Inc. Akcea Therapeutics(®) TEGSEDI(®) and WAYLIVRA(®) are trademarks of Akcea Therapeutics, Inc.
AKCEA THERAPEUTICS, INC.
SELECTED FINANCIAL INFORMATION
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
June
30, June
30,
2020 2019 2020 2019
(unaudited)
(unaudited)
Revenue:
Commercial revenue
Product revenue, net $
16,364 $
9,865 $
31,523 $
16,619
Licensing revenue 6,036 6,036
Total commercial revenue 16,364 15,901 31,523 22,655
Research and development and license revenue
under 6,013 10,722 6,928 167,784
collaborative agreements
Total revenue 22,377 26,623 38,451 190,439
Expenses:
Cost of sales and license 5,046 5,783 9,829 8,227
Research and development 29,731 20,271 47,086 119,890
Selling, general and administrative 42,139 50,740 88,385 95,342
Net loss share from commercial activities under
arrangement (3,448) (11,465) (10,499) (20,521)
with Ionis Pharmaceuticals, Inc.
Total expenses 73,468 65,329 134,801 202,938
Loss from operations (51,091) (38,706) (96,350) (12,499)
Other income (expense):
Investment income 1,055 1,571 2,826 2,795
Other expense (146) (28) (276) (140)
Loss before income tax expense (50,182) (37,163) (93,800) (9,844)
Income tax benefit (expense) 605 (160) 1,373 (292)
Net loss $
(49,577) $
(37,323) $
(92,427) $
(10,136)
Net loss per share of common stock owned by
Ionis, basic and $
(0.49) $
(0.40) $
(0.91) $
(0.06)
diluted
Weighted-average shares of common stock
outstanding owned by 77,095 70,221 77,095 69,406
Ionis, basic and diluted
Net loss per share of common stock owned by
others, basic and $
(0.49) $
(0.40) $
(0.91) $
(0.26)
diluted
Weighted-average shares of common stock
outstanding owned by 24,382 22,574 24,196 22,351
others, basic and diluted
AKCEA THERAPEUTICS, INC.
Reconciliation of GAAP to Non-GAAP Basis:
Condensed Consolidated Operating Expenses, Loss from Operations, and Net Loss
(In Thousands)
Three Months Ended Six Months Ended
June
30, June
30,
2020 2019 2020 2019
(unaudited)
(unaudited)
As reported operating
expenses according to GAAP $
73,468 $
65,329 $
134,801 $
202,938
Excluding compensation
expense related to equity
awards 16,121 14,363 23,402 32,923
Non-GAAP operating expenses $
57,347 $
50,966 $
111,399 $
170,015
As reported loss from
operations according to GAAP $
(51,091) $
(38,706) $
(96,350) $
(12,499)
Excluding compensation
expense related to equity
awards 16,121 14,363 23,402 32,923
Non-GAAP (loss) income from
operations $
(34,970) $
(24,343) $
(72,948) $
20,424
As reported net loss
according to GAAP $
(49,577) $
(37,323) $
(92,427) $
(10,136)
Excluding compensation
expense related to equity
awards 16,121 14,363 23,402 32,923
Income tax effect related to
compensation expense related
to equity awards 478
Non-GAAP net (loss) income $
(32,978) $
(22,960) $
(69,025) $
22,787
Reconciliation of GAAP to non-GAAP Basis
As illustrated in the Selected Financial Information in this press release, non-GAAP operating expenses, non-GAAP (loss) income from operations, and non-GAAP net (loss) income were adjusted from GAAP to exclude compensation expense related to equity awards, and non-GAAP net (loss) income was adjusted from GAAP to also exclude the income tax effect associated with compensation expense related to equity awards, both of which are non-cash expenses. Akcea has regularly reported non-GAAP measures for operating results as non-GAAP results. These measures are provided as supplementary information and are not a substitute for financial measures calculated in accordance with GAAP. Akcea reports these non-GAAP 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 Akcea's non-GAAP results is consistent with how Akcea's management internally evaluates the performance of its operations.
AKCEA THERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(In Thousands)
June December
30, 31,
2020 2019
(unaudited)
Assets:
Cash and cash equivalents $
135,744 $
306,866
Short-term investments 254,144 156,806
Accounts receivable 14,049 10,496
Receivable from Ionis Pharmaceuticals, Inc. 3,231
Inventories 13,756 8,817
Other current assets 10,480 10,689
Property, plant and equipment, net 5,895 5,261
Operating lease right-of-use assets 10,646 11,094
Intangible assets, net 80,127 83,051
Deposits and other assets 3,096 2,939
Total assets $
527,937 $
599,250
Liabilities and stockholders' equity:
Accounts payable $
4,253 $
10,216
Payable to Ionis Pharmaceuticals, Inc. 5,320
Accrued compensation 8,313 12,793
Accrued liabilities 12,316 14,191
Deferred revenue 263 2,165
Other current liabilities 4,716 2,633
Long-term portion of lease liabilities 13,545 14,248
Other long-term liabilities 183
Stockholders' equity 479,028 543,004
Total liabilities and stockholders' equity $
527,937 $
599,250
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SOURCE Akcea Therapeutics, Inc.
