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Ionis a buy on weakness over growth concerns: Needham

August 6, 2017

Needham & Company analyst Chad Messer is telling clients to buy Ionis Pharmaceuticals (NASDAQ: IONS) on weakness as growth concerns overlook the longer-term opportunity.

Messer notes partner Biogen reported $203M in 2Q SPRINRAZA sales, a dramatic increase from $47M in 1Q and well ahead of $75M consensus and our own $83M forecast. As a result, the firm is raising SPINRAZA 2017 forecast from $421M to $937M resulting in an estimated >$100M in royalties to Ionis this year.

“Despite all of this IONS shares are selling off on concerns that the launch trajectory isn’t sustainable as patients come off of induction dosing to the less frequent maintenance schedule and previous spinal surgeries slow penetration into type II patients,” Messer notes. “We believe these concerns overlook the fact that the less prevalent (but higher incident) type I patients represent the real long term growth. We would be buyers on today’s weakness.”

The firm maintained a Buy rating and price target of $64.00.


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