Ionis plunges 23% as trial failure triggers shareholder investigation

Ionis Pharmaceuticals Inc. shares lost $3.3 billion in market value after a late-stage trial for its experimental heart disease therapy failed, prompting a shareholder rights investigation into whether the company was transparent about the study's design.

"The investigation is focused on when Ionis and its management first knew about the apparent problems with the trial data or its design and whether they were sufficiently transparent to investors," Reed Kathrein, the Hagens Berman partner leading the probe, said.

The Phase 3 CARDIO-TTRansform study tested eplontersen in patients with transthyretin amyloidosis cardiomyopathy, or ATTR-CM, a rare heart condition. Ionis and partner AstraZeneca said the drug did not provide a statistically significant benefit in a patient population where more than 80% were on a stabilizer treatment — 57% at baseline and an additional 24% who initiated one during the trial. The stock fell $20.19 to about $67 on July 9, its worst single-day drop.

The failure removes a potential revenue stream from Ionis's pipeline as the Carlsbad, California-based company transitions from a research-and-development licensing model to a commercial-stage biotech. Ionis is now betting on Tryngolza (olezarsen), which won expanded US Food and Drug Administration approval in June for severe hypertriglyceridemia, opening a market of more than 3 million patients. The company reported first-quarter revenue of $246 million, up 86% from a year earlier, and narrowed its net loss to $118 million from $146 million.

The setback puts more pressure on Ionis's remaining late-stage pipeline. The FDA accepted with Priority Review its New Drug Application for zilganersen to treat Alexander disease, a rare neurological disorder, and a Phase 3 readout is expected for pelacarsen, partnered with Novartis, targeting Lipoprotein(a) as a cardiovascular risk factor. Cathie Wood's ARK Genomic Revolution ETF bought $15.3 million of Ionis shares after the decline, betting on the company's long-term prospects. Ionis held $1.9 billion in cash at the end of the first quarter, down from $2.7 billion, partly due to maturing convertible debt. The company has guided to reach cash flow break-even by 2028.

This article is for informational purposes only and does not constitute investment advice.