Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Ionis Pharmaceuticals (IONS) -- Ignore unavailable to you. Want to Upgrade?

To: Scott H. Davis who wrote (1982)	5/10/1998 5:46:00 PM
From: Scott H. Davis	Read Replies (1) \| Respond to of 4676

Latest update report from Lehman Bros: Fyi Scott Headline: Isis Pharm: Reports 1Q98 loss of $0.43; changing #s Author: CA Butler,PhD/E.Ende(212)526-4410 Rating: 1 Company: ISIP Country: OPR CUS Industry: BIOTEC Ticker : ISIP Rank(Prev): 1-Buy Rank(Curr): 1-Buy Price : $13 7/8 52wk Range: $19-11 Price Target: $25 Today's Date : 04/29/98 Fiscal Year : DEC ------------------------------------------------------------------------------ EPS 1997 1998 1999 2000 QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr. 1st: -0.33A -0.49E -0.43A - -E - -E - -E - -E 2nd: -0.36A -0.51E -0.47E - -E - -E - -E - -E 3rd: -0.08A -0.52E -0.48E - -E - -E - -E - -E 4th: -0.41A -0.55E -0.51E - -E - -E - -E - -E ------------------------------------------------------------------------------ Year:$ -1.17A $ -2.06E $ -1.89E $ -1.43E $ -1.16E $ - -E $ - -E Street Est.: $ -1.35E $ -1.36E $ -1.38E $ -1.33E $ - -E $ - -E ------------------------------------------------------------------------------ Price (As of 4/28): $13 7/8 Revenue (1998): 28.8 Mil. Return On Equity (98): N/M Proj. 5yr EPS Grth: N/M Shares Outstanding: 26.7 Mil. Dividend Yield: N/A Mkt Capitalization: 370.5 Mil. P/E 1998; 1999 : N/M; N/M Current Book Value: $0.92 /sh Convertible: None Debt-to-Capital: 56% Disclosure(s): C, A ------------------------------------------------------------------------------ * Isis Pharmaceuticals reported results for its first quarter of a $0.43 per share loss versus a $0.33 loss a year ago and our estimate for a $0.49 loss. * Recall that Isis announced positive phase III data pertaining to Fomivirsen for CMV retinitis at an AIDS conference. The company filed an NDA with the FDA early this month based on the results. Approval is expected in 1999. * We are adjusting numbers to reflect a decrease in R&D revenues and associated expenses. We are changing our FY98 EPS estimate from a loss of $2.06 to a loss of $1.89 and FY99 from a loss of $1.43 to a loss of $1.16. * With such a broad list of news events to anticipate and an attractive valuation, we remain confident in our 1-Buy recommendation at this time. ------------------------------------------------------------------------------ FINANCIAL SUMMARY Isis Pharmaceuticals reported results for its first quarter of a $0.43 per share loss versus a $0.33 loss a year ago and our estimate for a $0.49 loss. Contract R&D revenues of $5.8 million rose $1.0 million from last year. Operating spending was led by a 26% increase in R&D to $14.9 million (less than our $17.8 million estimate), while SG&A grew 9% to $1.9 million (less than our $2.5 million estimate). After the effects of net interest income, the resulting net loss of $11.5 million compared to a $8.5 million loss in the comparable period a year ago and our projected loss of $13.1 million. Isis ended the quarter with cash and equivalents of roughly $70 million, or $2.62 per share. We are adjusting numbers to reflect a decrease in R&D revenues and associated expenses as a result of the NDA filing. We are changing our 2Q98 EPS estimate from a loss of $0.51 to a loss of $0.47, 3Q98 EPS estimate from a loss of $0.52 to a loss of $0.48, 4Q98 EPS estimate from a loss of $0.55 to a loss of $0.51, FY98 EPS estimate from a loss of $2.06 to a loss of $1.89 and FY99 EPS estimate from a loss of $1.43 to a loss of $1.16. CONCLUSION Recall that Isis announced positive phase III data pertaining to Fomivirsen for CMV retinitis at an AIDS conference. The company filed an NDA with the FDA early this month based on the results. Approval is expected in 1999. The breadth of Isis's clinical efforts will be demonstrated over the coming months via a host of clinical and regulatory milestones. Such milestones, which should provide momentum for the valuation of ISIP shares, include the following: ISIS2302: the Phase IIb program in Crohn's is ongoing and will have an interim analysis in mid-98, the results of which will be important to the timing of beginning a second potentially pivotal trial (likely in 2H98); data for the Phase IIa trials for rheumatoid arthritis, psoriasis, ulcerative colitis and organ transplant studies will be presented in mid-98. ISIS3521/ISIS5132: A Phase II program in cancer has begun with ISIS3521 and ISIS5132; multiple other studies for these compounds are also planned over the coming months to include early combination studies as well as in other tumor types. Others: A phase I trial using ISIS2503 (in cancer) and a phase I/II study using ISIS13312 (the second-generation CMV retinitis product) have begun. Approval of fomivirsen should provide a proxy for antisense, as it may become the first such drug to utilize the new technology. With such a broad list of news events to anticipate and an attractive valuation, we remain confident in our 1-Buy recommendation at this time. BUSINESS DESCRIPTION: Isis Pharm. is a biotech/biopharmaceutical company developing 'antisense' and combinatorial chemistry technology. Isis has 4 antisense compounds in clinical trials and several others in development. ------------------------------------------------------------------------------ Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities.