Ionis-Roche Join Forces To Compete In Neurodegenerative Disease Space, Analyst Sees Short-Term Challenges

Ionis Pharmaceuticals Inc IONS entered an agreement with Roche Holdings AG RHHBY for two undisclosed early-stage programs for RNA-targeting investigational medicines for the treatment of Alzheimer's disease (AD) and Huntington's disease (HD). 

Roche gains exclusive worldwide rights and will be responsible for clinical development, manufacturing, and commercialization. 

Under the terms of the agreement, Ionis will be responsible for advancing the two programs through pre-clinical studies; Roche will have sole responsibility for clinical development and, if approved, commercialization worldwide. 

Ionis will receive a $60 million upfront payment from Roche and is eligible to receive development, regulatory, and commercial milestone payments and tiered royalties.

Ionis and Roche have been partners for the past ten years, starting with their collaboration in 2013 for tominersen, an Ionis-discovered investigational medicine for HD. 

On Tuesday, Ionis Pharmaceuticals released positive topline results for the Phase 3 Balance study of olezarsen in people with familial chylomicronemia syndrome (FCS), a hereditary disease.

William Blair writes that Ionis continues to expand its partnered portfolio, generating nondilutive funds to support the growth and development of its wholly-owned pipeline and reiterates its Outperform rating.

The analysts see the company as the premier enterprise developing Antisense Oligonucleotides therapies but see near-term commercial headwinds. 

Spinraza will likely experience competition in spinal muscular atrophy from Novartis's AG NVS Zolgensma gene therapy but more meaningful competition from Roche's oral Evrysdi (risdiplam). 

In hATTR polyneuropathy, Tegsedi faces substantial competition primarily from Onpattro, a product of Alnylam Pharmaceuticals Inc ALNY. 

However, the enduring success of the Tegsedi franchise hinges on the progress of eplontersen's development. 

Notably, eplontersen has entered a lucrative co-commercialization partnership with AstraZeneca Plc AZN.

Price Action: IONS shares are up 1.31% at $46.89 on the last check Wednesday.