At $14.5 million, global sales of Ariad Pharmaceuticals’ (ARIA) Iclusig (ponatinib) came in below consensus expectations for $16 million in the quarter. Though sales are up 22% from the same period last year, the Iclusig ramp is proving more modest than investors had hoped. ARIA dropped 5% in early trading on Wednesday.
Ariad sold $10.5 million of Iclusig in the U.S. and $4 million in Europe. Notably, the company did lower guidance on cash use for the full year, from $165-175 million to $150-155 million. As a result, the company expects its cash and equivalents at year-end will be in the $250 million to $255 million range, sufficient to fund operations into the second half of 2016.
At a $1.1 billion valuation, Ariad’s valuation already reflects Iclusig becoming a 400+ million product, in our view, which leaves little room for error in the drug’s launch. When the company reaches profitability isn’t clear given a relatively high spend, thus a financing may in the cards next year.
