LCI Lannett CO

Isis Pharmaceuticals Inc. (ISIS) reported a net loss of 3 cents per share in the first quarter of 2013, in line with the Zacks Consensus Estimate. The loss was narrower than the year-ago loss of 23 cents, benefiting from higher revenues.

Revenues increased 86.6% to $43.4 million, missing the Zacks Consensus Estimate of $52 million. Revenues include license fees, milestone-related payments and other payments.

In the first quarter of 2013, the company received a milestone payment of $25 million from its partner Sanofi (SNY). The payment was received following the US approval of Kynamro (mipomersen sodium) for the treatment of familial hypercholesterolemia (FH).

In Feb 2013, Isis Pharma received a $7.5 million milestone payment from GlaxoSmithKline (GSK). The payment primarily relates to the initiation of a phase II/III clinical study of ISIS-TTR. The study will span 15 months enrolling 200 patients. Isis is developing ISIS-TTR in collaboration with Glaxo for the potential treatment of transthyretin (TTR) amyloidosis.

Operating expenses remained flat during the first quarter of 2013 at $41.7 million. Research and development expenses decreased 1.0% to $38.3 million and general and administrative expenses were up 15.0% to $3.4 million.

We note that in the second quarter of 2013, Isis Pharma is expected to record significant milestone revenues. The company has already received an upfront payment of $30 million from the Huntington's disease (HD) collaboration. Additionally, Isis Pharma is also expected to record $3.5 million of milestone payment related to ISIS-SMN.

Isis Pharma boasts of a promising pipeline of 28 candidates with several candidates expected to reach the market by 2017. Key near-term events include: release of top-line data from the phase II study evaluating ISIS-APOCIII for the treatment of severe hypertriglyceridemia and data from a phase II study evaluating the use of ISIS-CRP in rheumatoid arthritis (RA) patients.

Meanwhile, Isis Pharma has also announced its plans to initiate a public offering of 10.35 million shares of common stock including an over-allotment option for 1.35 shares.   

Isis Pharma currently carries a Zacks Rank #2 (Buy). Stocks such as Lannett Company, Inc. (LCI) look more attractive in the pharma sector with a Zacks Rank #1 (Strong Buy).

 
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