Royalty Pharma Expects No Ionis Milestones After Pelacarsen Trial Miss

What changed

Based on reporting by Quiver Quantitative, Novartis’ Phase 3 HORIZON trial of pelacarsen missed its primary endpoint of reducing cardiovascular events versus placebo in the overall study population. Royalty Pharma said the result means it does not expect to make milestone payments to Ionis under their January 2023, $500 million funding agreement.

That agreement assigned $150 million of value to pelacarsen royalties and $350 million to Spinraza royalties. Royalty Pharma says Spinraza payments should still let it recover its total funding and make a modest positive return; its royalty interest reverts to Ionis once payments reach $550 million, a stated 1.1x return.

Why This Matters

Our view: this is a crisp reminder that a royalty deal can be less binary than the drug development story beneath it. Pelacarsen’s lost upside matters. But Royalty Pharma says it built the transaction around Spinraza’s more stable royalty stream, leaving the trial failure painful for Ionis’s milestone path without necessarily turning Royalty Pharma’s full $500 million commitment into a loss.

The more consequential near-term question is therefore contractual, not rhetorical: whether the Spinraza stream performs well enough to deliver the return Royalty Pharma expects. Novartis has yet to present HORIZON’s detailed data, so pelacarsen’s broader path remains unresolved.

How the effects could spread

The missed HORIZON endpoint removes the pelacarsen upside Royalty Pharma had expected from its Ionis agreement. Royalty Pharma’s stated response is that no milestone payments to Ionis are anticipated.

That shifts immediate pressure onto Ionis, which loses that potential payment route. It also makes Spinraza the load-bearing asset in Royalty Pharma’s account of the deal: the royalty stream is meant to carry the investment toward the $550 million reversion threshold.

Impact assessment

• Royalty Pharma: Mixed. Pelacarsen-related upside has been impaired, but the company expects Spinraza royalties to support full investment recoupment and a modest positive return.
• Ionis: Negative. Royalty Pharma says it does not anticipate milestone payments following the HORIZON result.
• Novartis: Exposed. Its Phase 3 outcomes trial missed the primary endpoint, while the detailed data await presentation at a medical congress.

Scenarios

Most likely: If Spinraza royalty payments support Royalty Pharma’s expectations and the agreement continues to operate as described, Royalty Pharma maintains that it can recoup its investment with a modest positive return, without pelacarsen milestone payments.

Upside: If Novartis’ detailed HORIZON presentation identifies a clinically meaningful path beyond the reported overall-population result, pelacarsen-related rights could retain some future value.

Downside: If Spinraza royalties fall short of the assumptions behind Royalty Pharma’s outlook, its expected modest positive return becomes harder to achieve.

What to watch next

• Novartis’ promised detailed HORIZON data at an upcoming medical congress.
• Future Royalty Pharma or Ionis disclosures confirming, revising, or contradicting the expectation that no milestone payments are due.
• Spinraza royalty-payment progress toward the $550 million threshold, particularly as Royalty Pharma’s share rises from 25% through 2027 to 45% in 2028.