Three decades after Ionis Pharmaceuticals was founded, the Carlsbadbiotech company is going through its first change of leadership.
Stanley T. Crooke, the only CEO Ionis has ever known, steps down in January to become executive chairman. Crooke, 73, will be replaced by another Ionis veteran, chief operating officer Brett Monia, 57.
The transformation during these 30 years has been huge.
When Crooke founded what was then Isis Pharmaceuticals, the company had just a handful of employees. It had no products. And even when its drugs began reaching the market, Ionis kept racking up heavy losses.
Today, Ionis is becoming a top-tier biotech company. With a growing number of drugs approved and nearing approval, its market value recently exceeded $11 billion for the first time. (It has since dropped back to about $10 billion, largely due to positive news from a competitor.)
And it now foresees continuous and growing profits as its drugs reach patients.
Ionis’ most successful drug, Spinraza, halts a wasting disease called spinal muscular atrophy. Marketed by Biogen, Spinraza brought in $1.72 billion in 2018. Biogen, which sells the drug, paid Ionis nearly $240 million in royalties.
Another Ionis drug, for Huntington’s disease, has shown early signs in experimental human testing that it may be effective against the invariably fatal illness.
Many Ionis employees and collaborators at academic centers such as UC San Diego made this possible. But Crooke has been the single most essential person to the success of Ionis, said John McCamant, editor of the Medical Technology Stock Letter in Berkeley.
“The story’s about Stan,” McCamant said. “It’s his company, his patents, the whole deal.”
The Medical Technology Stock Letter, a company then led by his father Jim McCamant, recommended buying Ionis stock in its 1991 initial public offering.
This transformation was driven by a drug technology Ionis pioneered called antisense. The technology blocks or modifies production of proteins involved in diseases.
Antisense drugs intercept specific sequences of RNA, which bring to cells the genetic instructions encoded in DNA. Complementary molecules Ionis calls “designer DNA” bind to the targeted RNA. This can suppress the effect of a certain gene or change how it works.
From the beginning, Crooke was known as antisense’s staunchest advocate. In the late 1980s, when antisense was strictly a laboratory tool, Crooke dreamed of turning that technology into a new platform to make genetically targeted drugs.
Turning that dream into reality required answering a number of hard questions. How to produce stable molecules? How to safely administer them? How to get them into cells in therapeutic doses? Which RNA molecules are the best targets for each disease?
The answers, discovered over the lifespan of Ionis, are documented in the patents Ionis holds.
Different styles
Monia, the incoming CEO, has led the company’s programs in oncology and rare diseases, the latter of which yielded Spinraza.
Another rare disease drug, Tegsedi, treats hereditary transthyretin-mediated amyloidosis, which causes nerve damage. FDA approval of Tegsedi was announced in October.
Both Monia and Crooke began as academics before crossing over into industry. However, they have different styles.
“Stan is a much more direct individual than I am,” Monia said. “He’s very detail-oriented. I tend to step back a little bit and delegate more to my individuals, but monitor very closely and jump in if I feel like I need to.”
The differences aren’t an issue.
“He has said multiple times that’s fine,” Monia said. “There’s no one way to manage an organization and it might be time for a new approach.”
As executive chairman, Crooke’s role will be a “strategic adviser,” looking for the long-term view, Monia said.
Monia said he understands the challenge ahead.
“I’ve learned a great deal from him and we have common core principles that we follow for the organization. However, I don’t plan on walking in Stan’s shoes. I brought my own shoes.”
The transition began a few years ago with conversations between Crooke and the Ionis executive team, including Monia. The conversation was broadly centered on preparing a succession plan.
“He got a lot of input from the executive team, including me,” Monia said. “And the conversations became less of group discussions (and) more sort of individual discussions that I started having with him.”
It was agreed that whoever succeeded Crooke should know antisense well, and should know the company’s history. And since Monia fit that picture, Crooke encouraged him to throw his hat into the ring.
To prepare for the CEO role, Monia became chief operating officer at the beginning of 2018. This job required Monia, trained as a drug research and development scientist, to become more familiar with the financial aspects of Ionis.
“I had to make sure that this was an aspect of the business that I liked,” Monia said. “Toward the end of last year it started coming together.”
Monia’s succession was formally announced in December, starting the year-long transition.
Mentor
For Monia, leading Ionis caps a career that he decided at the outset would center on discovering and developing new drugs.
Monia prepared by getting degrees in molecular biology and analytical chemistry at Stockton State College in New Jersey. He then got a Ph.D. in pharmacology at the University of Pennsylvania. There he met Crooke, who in addition to teaching also headed research at SmithKline Beckman.
Crooke impressed Monia with his multiple roles, teaching graduate-level course in pharmacology while handling worldwide research for a major pharmaceutical company.
“I decided that the best way for me to make an impact in the industry as rapidly as possible, would be to work with Stan,” Monia said. “We spent a lot of time together and talked about science and patients.”
Monia went on to earn his doctoral degree in Crooke’s laboratories.
By that time, Crooke had become fascinated by antisense. This technology allowed precise control over genetic activity, affecting only the desired genes while leaving others unaffected.
From his pharmaceutical experience, Crooke knew that even one drug could transform a company. He made that point in a May 1984 New York Times article about the stomach acid blocker Tagamet.
“SmithKline Beckman is in transition,” Crooke said in the article. “And that transition is driven by Tagamet. It’s hard to fathom, but the truth is this company is being changed by a drug.”
Five years later, Crooke was faced with even bigger possibilities. Antisense wasn’t just one drug, it was what pharma industry people call a platform technology that could give rise to a multitude of drugs.
Crooke decided antisense deserved its own company to exploit that potential. He founded Isis Pharmaceuticals, moved to San Diego and asked Monia to join his quest.
Carlsbad was a deliberate choice, because it had open space and was less expensive than San Diego’s biotech hub in La Jolla, Monia said.
The cross-country move was meant to be temporary.
“I told my mother I’ve got to come out here for five years, and then I’ll go back to the East Coast where my family was,” he said. “That obviously didn’t pan out.”
Ionis Pharmaceuticals Quotes by TradingView
By the numbers
A major selling point for a company like Ionis is the social benefit of treating severe diseases. But in strictly financial terms, has Ionis been a good stock? That depends on many factors, including how long ago the stock was purchased.
In general, those who bought within the last year, and for much of the last three years, should be happy. But those who bought at the $10 IPO price have seen mixed results. Their shares have increased in value, but massive dilution has taken even more.
The market capitalization of Ionis has increased by 100 fold since its IPO, from slightly over $100 million to more than 11 billion. That equals about 18 percent compound growth per year.
By comparison, during that 28-year period the Nasdaq index has increased from 500 to 7,600, or 15-fold
However, Ionis shares have been heavily diluted with repeated offerings — something normal for growing biotech companies. So that share purchased at the $10 IPO price didn’t increase nearly 100 times. Instead, per-share price has increased less than eight-fold.
So was the call to invest in Ionis made too soon? “That’s not an answerable question,” McCamant said. All biotech companies face setbacks from factors they don’t control.
For example, the first Ionis drug, for an AIDS-related eye infection, reached the market about the same time as the first effective HIV drugs. That dramatically lowered the market potential for the drug, Vitravene.
Ionis kept a focus on developing antisense and securing patents, McCamant said.
“One has to give them some odds of success when you have 35-plus drugs in the pipeline, with easily 10 new drugs coming into the market over the next five to 10 years,” McCamant said.
While Ionis has grown dramatically over the years, it still faces competition. Sales of its blockbuster Spinrase are likely to decline starting in 2020 as other drugs reach the market, wrote Morningstar analyst Karen Andersen in a Feb. 27 report.
“In addition, despite strong data in clinical trials to date and multiple partnerships, Ionis is just reaching sustainable profitability,” Andersen wrote.
As for Monia, Andersen wrote that his science background and seven years of executive experience at Ionis should serve him well.
Monia says he’s using the transition period to continue learning from Crooke about being a CEO.
“At the end of this year, I’ll essentially be doing this on my own,” Monia said.
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