Ionis Pharmaceuticals (IONS) Stock Surges 36% On Clinical Trial Success

Shares of Ionis Pharmaceuticals (NASDAQ:IONS) stock soared over 36% on Monday on news that the company’s clinical drug trial for spinal muscular atrophy in infants was successful.

The Carlsbad, CA based firm is an RNA-targeted drug discovery and development company which focuses on developing drugs for rare and severe diseases. The company had been working in tandem with partner Biogen (NASDAQ:BIIB) to develop nusinersen, a drug meant to treat spinal muscular atrophy (SMA) in infants. It is a genetic condition that results in the loss of motor neurons in the brain and spine and eventually leads to paralysis.

Biogen and Ionisis stated that the trial met its goal of “a statistically significant improvement in the achievement of motor milestones compared to those who did not receive treatment.” As per the deal that the companies had with each other, BIIB will pay IONS $75 million for the success and will take over, filing for approval and handling the marketing of the drug.

“We are hopeful that nusinersen, if approved, will make a meaningful difference in the lives of patients and families affected by SMA. We look forward to working with Biogen on completing the clinical program and preparing for what we hope is a positive regulatory review,” said Ionis Chief Operating Officer B. Lynne Parshal.

According to Reuters, Ionis is eligible to receive royalties on any potential sales of nusinersen up to a certain percentage as well as up to $150 million in milestone payments.

Thirty days ago, Ionis had received downward earnings estimate revisions for both this quarter and fiscal year. Current quarter estimates stand at a loss of $0.56 per share, down from the previous -$0.55 estimate. Current fiscal year estimates are down a cent as well to a loss of $1.60 per share.

Ionis Pharmaceuticals currently sits at a Zacks Rank #4 (Sell). However, with today’s news this could be subject to change, given that the rank is driven entirely by estimate revisions. With a potentially new source of revenue (pending FDA approval), IONS may see some upward estimates in the near future.