Maintaining Our $62 Fair Value Estimate for Ionis Following Eplontersen Licensing Deal

AstraZeneca has licensed Ionis's next-generation TTR amyloidosis drug eplontersen (Ionis-TTR-LRx), paying $200 million upfront, up to $485 million in approval-related milestones, as well as hefty payments tied to future sales of the drug. Ionis is already relying on Sobi to market its first-generation TTR amyloidosis drug, Tegsedi, and given the tough competitive landscape, we think it was wise to partner with a larger firm capable of supporting a broad rollout (Ionis will retain co-commercialization rights in the U.S.). Alnylam already has Onpattro approved and will likely launch next-generation version vutrisiran in April 2022, potentially putting Ionis and Astra about a year behind, and we assume Alnylam sales will peak in 2030 at roughly double the potential peak sales for Ionis programs in TTR amyloidosis (roughly $900 million for Ionis/Astra and $1.7 billion for Alnylam). We're maintaining our $62 per share fair value estimate for Ionis, and we continue to see shares as undervalued, despite a broad late-stage pipeline and a marketed blockbuster with spinal muscular atrophy drug Spinraza that help support a narrow moat.