Release Details
Isis Reports Financial Results and Highlights for Third Quarter of 2009
"We are projecting to end 2009 in the strongest financial position in our history, maintaining our momentum of strong financial performance with our second year of profitability. And, we believe that our business model will enable us to sustain a strong financial position beyond this year. In addition to our financial success, we are performing in all other areas of our business. To date, we have reported positive top-line clinical data from our two most advanced programs, Phase 3 data on mipomersen in patients with homozygous familial hypercholesterolemia and most recently Phase 2 data on ISIS 113715 in patients with type 2 diabetes. Further, we and our partners have advanced a number of antisense drugs into development and into the clinic. As we approach the end of 2009, our financial position ensures that we can continue to advance our technology, discover and develop a significant number of promising new drugs, and capitalize on our technology to continue to build our financial strength," said
Upcoming Key Milestones
-- Report full data at the upcoming American Heart Association (AHA) from a
Phase 3 study evaluating mipomersen in homozygous FH patients; positive
top-line data was reported in May 2009
-- Report data from additional mipomersen studies in other patient
populations
-- Isis will continue to expand its pipeline by moving at least three new
drugs into development in 2009
Financial Results
On a GAAP basis, Isis reported a loss from operations of
As a result of selling Isis' diagnostic subsidiary, Ibis Biosciences, to
Revenue
Revenue for the three and nine months ended
Operating Expenses
On a pro forma basis, operating expenses for the three and nine months ended
Interest Expense
In 2009, Isis adopted a new accounting standard for its 2 5/8% convertible notes, which required Isis to assign a value to its convertible debt without considering the conversion feature. As a result, Isis is recording its convertible debt at a discount, which Isis is amortizing over the expected life of the debt as additional non-cash interest expense. The new standard required retrospective application to all periods presented. Accordingly, the amount of interest expense Isis recorded in its statement of operations for the three and nine months ended
Net Income (Loss) from Continuing Operations, Net of Income Tax Benefit
Net loss from continuing operations for the third quarter of 2009 was
Even though Isis finished the first nine months of 2009 with a net loss from continuing operations, Isis had taxable income primarily resulting from the significant upfront payments that the Company received from its strategic alliance with
Net Income (Loss) from Discontinued Operations
The net income (loss) from discontinued operations represents the operating results of Ibis that are presented separately in Isis' financial statements as a result of the sale of Ibis to AMI in
Net Income (Loss)
Isis reported net income of
Balance Sheet
As of
Regulus Therapeutics
Regulus' revenue for the three and nine months ended
Excluding non-cash compensation expense related to stock options, operating expenses for Regulus were
Business Highlights
"We had numerous significant accomplishments during the last quarter that demonstrate the productivity of our technology, the therapeutic potential of antisense drugs to a number of different disease targets and our continued commitment to lead the field of RNA-targeted therapeutics," said Ms. Parshall.
"Last month, we reported positive Phase 2 data for ISIS 113715 in patients with type 2 diabetes who are unable to control their glucose levels on existing sulfonylurea treatment. We demonstrated that treatment with ISIS 113715 showed consistent and statistically significant reductions in multiple short and intermediate measures of glucose control. In addition, ISIS 113715 caused statistically significant and clinically meaningful reductions in LDL cholesterol. Consistent with our preclinical data, we also observed a tendency toward weight loss even in this short-term study without strict dietary control. All of these observations combine to create a favorable drug profile, and we look forward to advancing this program."
"An important component of our business strategy is to encourage innovation and support the advancement of antisense drugs, including those drugs our satellite company partners are developing. We are now in a financial position to make strategic investments in some of our satellite companies, which guarantees that our partners have the resources to advance the development of existing antisense drugs and add new antisense drugs into development. Consistent with our strategy, we have invested in Regulus Therapeutics to ensure that it has the capital to continue to explore the therapeutic opportunities of targeting microRNAs. This year we also invested in
"Finally, we are delighted to announce that we have been selected for two podium presentations at the upcoming AHA meeting, the premier cardiovascular symposium. In these presentations, mipomersen investigators will present detailed information from our first Phase 3 study on the performance of mipomersen, including the effect of mipomersen on important cardiovascular parameters such as LDL-C and Lp(a), which are generally accepted risk factors for cardiovascular disease. In May of this year, we reported the top-line data from this study, which met its primary endpoint with a 25 percent reduction in LDL-C in patients with homozygous familial hypercholesterolemia. The study also met each of its secondary endpoints of reductions in apolipoprotein B, total cholesterol and non-HDL cholesterol. We are very pleased with the performance of mipomersen in this first of three studies, and we look forward to reporting the complete data at the AHA. During the next year, we and our partner
Quarterly Highlights
Isis reported positive top-line Phase 2 data on ISIS 113715 in patients with type 2 diabetes on stable doses of sulfonylurea.
-- Treatment with 200 mg per week of ISIS 113715 for 13 weeks showed
consistent and statistically significant reductions in multiple short
and intermediate measures of glucose control.
-- ISIS 113715 also showed statistically significant and clinically
meaningful reductions in LDL-C and a tendency toward weight loss.
-- The safety profile of the drug remains positive with no exacerbation of
sulfonylurea-induced hypoglycemia or other clinically significant
adverse effects.
Isis' pipeline matures as antisense drugs continue to advance in development and show promise in clinical studies.
-- Altair reported the successful completion of a Phase 1 study that showed
AIR645 was safe and well tolerated. Altair intends on initiating Phase
2 studies on AIR645 soon.
-- OncoGenex initiated a Phase 1 study evaluating OGX-427 in patients with
bladder cancer.
-- Achaogen reported the successful completion of a Phase 1 study on
ACHN-490.
Isis supports its dominant patent estate and maintains an extensive and broad intellectual property position.
-- Isis received a notice of allowance that expands the scope of Isis'
Crooke patents and Isis, Alnylam and Regulus were granted a key microRNA
patent in Japan .
Conference Call
At
About
Isis is exploiting its expertise in RNA to discover and develop novel drugs for its product pipeline and for its partners. The Company has successfully commercialized the world's first antisense drug and has 19 drugs in development. Isis' drug development programs are focused on treating cardiovascular, metabolic and severe neurodegenerative diseases and cancer. Isis' partners are developing antisense drugs invented by Isis to treat a wide variety of diseases.
This press release includes forward-looking statements regarding
In this press release, unless the context requires otherwise, "Isis," "Company," "we," "our," and "us" refers to
Isis Pharmaceuticals, Inc.
Selected Financial Information
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
Three months ended, Nine months ended,
September 30, September 30,
2009 2008(1) 2009 2008(1)
---- ------- ---- -------
Revenue: (unaudited) (unaudited)
Research and development
revenue under collaborative
agreements $25,962 $28,488 $86,415 $69,750
Licensing and royalty revenue 809 975 2,923 7,790
--- --- ----- -----
Total revenue 26,771 29,463 89,338 77,540
------ ------ ------ ------
Expenses:
Research and development 33,832 26,024 94,520 73,096
General and administrative 3,335 3,263 10,685 9,428
----- ----- ------ -----
Total operating expenses 37,167 29,287 105,205 82,524
------ ------ ------- ------
Income (loss) from operations (10,396) 176 (15,867) (4,984)
Other income (expense):
Investment income 1,430 3,468 5,243 8,804
Interest expense (3,185) (3,084) (9,422) (8,902)
Gain on investments, net 123 - 2,794 -
--- --- ----- ---
Income (loss) from continuing
operations, before income
tax benefit (12,028) 560 (17,252) (5,082)
Income tax benefit 3,968 - 4,625 -
----- --- ----- -----
Net income (loss) from
continuing operations,
net of income tax benefit (8,060) 560 (12,627) (5,082)
Discontinued Operations:
Loss from discontinued
operations - (155) (29) (5,884)
Gain on sale of Ibis
Biosciences, Inc., net of tax - - 171,773 -
--- --- ------- ---
Net income (loss) from
discontinued operations,
net of tax - (155) 171,744 (5,884)
--- --- ------- -----
Net income (loss) (8,060) 405 159,117 (10,966)
Net loss attributable to
noncontrolling interest in
Regulus Therapeutics Inc. 1,136 1,208 2,907 3,056
----- ----- ----- -----
Net income (loss) attributable
to Isis Pharmaceuticals, Inc.
common stockholders $(6,924) $1,613 $162,024 $(7,910)
======= ====== ======== =======
Basic and diluted net
income (loss) per share:
Net income (loss) from
continuing operations
attributable to Isis
Pharmaceuticals, Inc.
common stockholders $(0.07) $0.02 $(0.10) $(0.02)
Net income (loss) from
discontinued operations - - 1.75 (0.06)
--- --- ---- ----
Basic and diluted net
income (loss) $(0.07) $0.02 $1.65 $(0.08)
====== ===== ===== ======
Shares used in computing
basic net income (loss)
per share 98,320 95,863 97,988 93,786
====== ====== ====== ======
Shares used in computing
diluted net income (loss)
per share 98,320 100,181 97,988 93,786
====== ======= ====== ======
(1) Adjusted for the required retrospective adoption of the accounting
standard for debt that became effective in 2009.
Isis Pharmaceuticals, Inc.
Reconciliation of Isis' 2008 Historical Statement of Operations
(In Thousands, Except Per Share Data)
Historical Isis
Pharmaceuticals, Adjusted
Inc. New nine
Nine months Accounting months
Ended Standard ended
Sept. 30, Discontinued for Sept. 30,
2008(1) Operations(2) Debt(3) 2008
----------------------------------------------
Revenue: (unaudited)
Research and development
revenue under
collaborative agreements $78,739 $(8,989) $- $69,750
Licensing and royalty revenue 7,790 - - 7,790
----- --- --- -----
Total revenue 86,529 (8,989) - 77,540
------ ----- --- ------
Expenses:
Research and development 89,611 (16,515) - 73,096
General and administrative 13,206 (3,778) - 9,428
------ ----- --- -----
Total operating expenses 102,817 (20,293) - 82,524
------- ----- --- -----
Income (loss) from
operations (16,288) 11,304 - (4,984)
Other income (expense):
Investment income 13,061 (4,257) - 8,804
Interest expense (4,297) - (4,605) (8,902)
------ --- ----- -----
Net income (loss) from
continuing operations (7,524) 7,047 (4,605) (5,082)
Net loss from discontinued
operations - - - (5,884)
--- --- --- -----
Net income (loss) (7,524) 7,047 (4,605) (10,966)
Net loss attributable to
noncontrolling interest in
Regulus Therapeutics Inc. 3,056 - - 3,056
Net loss attributable to
noncontrolling interest in
Ibis Biosciences, Inc. 1,163 (1,163) - -
----- ----- --- ---
Net income (loss) attributable
to Isis Pharmaceuticals, Inc.
common stockholders $(3,305) $5,884 $(4,605) $(7,910)
======= ====== ======= =======
Basic and diluted net
income (loss) per share:
Net income (loss) from
continuing operations
attributable to Isis
Pharmaceuticals, Inc.
common stockholders $(0.04) $(0.02)
Net income (loss) from
discontinued operations - (0.06)
--- ----
Basic and diluted
net income (loss) $(0.04) $(0.08)
====== ======
Shares used in computing
basic and diluted net
income (loss) per share 93,786 93,786
====== ======
(1) The historical condensed consolidated statement of operations
reflects the required retrospective adoption of the accounting
standard for non-controlling interests that became effective in
January 2009 .
(2) As a result of selling Ibis to AMI, Isis removed Ibis' operating
results from its continuing operations and reclassified them as
discontinued operations.
(3) Adjustment to reflect the required retrospective adoption of the
accounting standard for debt that became effective in 2009.
Isis Pharmaceuticals, Inc.
Reconciliation of GAAP to Pro Forma Basis:
Condensed Consolidated Operating Expenses, Income
(Loss) From Operations and Net Income (Loss)
(In Thousands)
Three months ended, Nine months ended,
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
(unaudited) (unaudited)
As reported operating
expenses according to GAAP $37,167 $29,287 $105,205 $82,524
Excluding compensation
expense related to stock
options pursuant to
SFAS 123(R) (3,546) (3,612) (9,814) (10,434)
----- ----- ----- ------
Pro forma operating expenses $33,621 $25,675 $95,391 $72,090
======= ======= ======= =======
As reported income (loss)
from operations according
to GAAP $(10,396) $176 $(15,867) $(4,984)
Excluding compensation
expense related to stock
options pursuant to
SFAS 123(R) (3,546) (3,612) (9,814) (10,434)
----- ----- ----- ------
Pro forma income (loss)
from operations $(6,850) $3,788 $(6,053) $5,450
======= ====== ====== ======
As reported net income (loss)
according to GAAP $(6,924) $1,613 $162,024 $(7,910)
Excluding compensation expense
related to stock options
pursuant to SFAS 123(R) (3,546) (4,050) (8,256) (11,815)
----- ----- ----- ------
Pro forma net income (loss) $(3,378) $5,663 $170,280 $3,905
======= ======= ======= =======
Reconciliation of GAAP to Pro Forma Basis
As illustrated in the Selected Financial Information in this press
release, pro forma operating expenses, pro forma loss from operations and
pro forma net income (loss) were adjusted from GAAP to exclude
compensation expense related to stock options, which are non-cash. Isis
has regularly reported non-GAAP measures for operating expenses and loss
from operations 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 its
operations.
Regulus Therapeutics Inc.
Statements of Operations
(In Thousands)
Three months ended, Nine months ended,
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
(unaudited) (unaudited)
Revenue:
Research and development
revenue under collaborative
agreements $625 $681 $2,388 $1,429
---- ---- ------ ------
Total revenue 625 681 2,388 1,429
Expenses:
Research and development 2,225 2,374 6,282 5,292
General and administrative 712 517 1,982 1,328
--- --- ----- -----
Total operating expenses 2,937 2,891 8,264 6,620
---- ---- ------ ------
Loss from operations $(2,312) $(2,210) $(5,876) $(5,191)
======= ======= ======= =======
Isis Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
September December
30, 31,
2009 2008(1)
---- ------
(unaudited)
Assets:
Cash, cash equivalents and short-term investments $607,840 $490,998
Other current assets 11,407 27,386
Property, plant and equipment, net 26,911 17,371
Other assets 34,420 37,021
------ ------
Total assets $680,578 $572,776
======== ========
Liabilities and stockholders' equity:
Other current liabilities $37,778 $32,037
Current portion of deferred contract revenue 76,941 92,662
2 5/8% convertible subordinated notes 123,265 117,993
Long-term obligations, less current portion 12,532 9,938
Long-term deferred contract revenue 125,237 172,766
Stockholders' equity 304,825 147,380
------- -------
Total liabilities and stockholders' equity $680,578 $572,776
======== ========
(1) Adjusted for the required retrospective adoption of the accounting
standards for debt and non-controlling interests that became
effective in January 2009 .
SOURCE
Kristina Lemonidis, Director, Corporate Communications, +1-760-603-2490, or Amy Blackley, Ph.D., Assistant Director, Corporate Communications, +1-760-603-2772, both of Isis Pharmaceuticals, Inc.