Alnylam Pharmaceuticals, Inc. (ALNY) Earnings Call Transcript & Summary

Good morning. I'm Mani Foroohar, managing director and senior analyst, genetic medicines here at SVB Leerink. And I am very fortunate to be joined by Yvonne Greenstreet, COO of Alnylam Pharmaceuticals. Yvonne, do you want to start with a couple of quick slides and overview?

Yes, sounds like a great idea. First of all, good morning, everybody. I'm absolutely delighted to be here. Glad we can still travel to conferences for now anyway. Obviously, there's the usual forward-looking statements that you can read on the screen. We're really excited at Alnylam to be the pioneers in translating Nobel Prize-winning science into a product engine for sustainable innovation. And I think one of the remarkable things about our approach is the reproducible and modular approach that we've developed. And focusing on genetically validated targets has allowed us to deliver success rates way in excess of industry norms. This has resulted in us being able to bring 2 RNAi therapeutics to market, ONPATTRO and GIVLAARI, as well as building a very rich clinical pipeline. So we're really excited about where we are. What I'm going to do this morning, just quickly run through our marketed products as well as our late-stage clinical pipeline. So I'll start with ONPATTRO. This is our RNAi therapeutic indicator for patients with polyneuropathy associated with hereditary ATTR amyloidosis. There are about 50,000 patients worldwide with this condition. It's a disease where misfolded amyloid gets deposited in mainly the heart, the nerves and the guts, causes a debilitating, progressive disease. And we have launched ONPATTRO for patients with this condition. The commercial performance is going very, very well. 2019, we delivered revenues of $166 million, 20% quarter-on-quarter growth. So we're really excited about where we are commercially with ONPATTRO. We're looking to continue to develop ONPATTRO to bring it to patients with cardiomyopathy, both wild-type and hereditary cardiomyopathy associated with TTR amyloidosis. We're doing this through a study called APOLLO-B, which is assessing the potential of ONPATTRO in patients with hereditary and wild-type cardiomyopathy. And we expect data to read out from that study in 2021. This will really open up the opportunity for ONPATTRO to address the very broad patient population who have both hereditary and wild-type cardiomyopathy, probably in excess of 300,000, 400,000 patients. So a very big opportunity for Alnylam. Our next launch program, GIVLAARI. This is the second RNAi therapeutic that we launched and the first GalNAc RNAi therapeutic. And this is for, indicated for adults and adolescents who have acute hepatic porphyria. It's a family of diseases where there's a disrupted heme biosynthesis, results in frequent, debilitating abdominal pain together with CNS features like paralysis, seizures as well as chronic pain. We've developed a method here, which we think has a very compelling profile in terms of reducing attack rates, 74% mean reduction of acute attacks. We're very excited about this. We believe there are about 3,000 active diagnosed patients that could be addressed by this. Launch is going very well so far. So we're very excited about that. Our third program is lumasiran for patients with primary hyperoxaluria, the condition caused by excessive production of oxalate in the liver that gets deposited in primarily the kidneys, results in recurrent renal stones and renal failure. We delivered Phase III data from our first set of our -- the first Phase III study at the back end of last year where we were able to significantly improve the reduction in urinary oxalate, together with achieving many of the -- all of the secondary end points, in fact, particularly near normalization and normalization of oxalate in patients with this disease and a well-tolerated safety profile. So we're very excited about bringing this to patients. The -- we have a rolling submission ongoing. We're expecting approval at the back end of this year. We've actually designed the most comprehensive set of studies for patients with primary hyperoxaluria. We're also doing a Phase III study called ILLUMINATE-B, which is in pediatric patients; and then a study called ILLUMINATE-C, which is in patients who have much more severe renal impairment. So looking forward to bringing this third medicine to patients towards the end of this year. And then we have a couple of partnered programs which are very important to us, inclisiran and fitusiran, inclisiran partnered now with the -- with Novartis for patients with hypercholesterolemia; and fitusiran partnered with Sanofi for patients with hemophilia with inhibitors and without inhibitors. We're very excited about these programs. They're both targeted for large diseases. And Alnylam retains significant economic opportunities from these programs, up to 20% for inclisiran and 15% to 30% for fitusiran. And then we're looking to continue to build on our TTR franchise with vutrisiran, which is our quarterly subcutaneous program for patients with TTR amyloidosis, both polyneuropathy and cardiomyopathy. The first study, in order to be able to help us bring this to patients as quickly as possible, is called HELIOS-A, and that's for patients with polyneuropathy. We're expecting data from that study in the 2021 time frame. That study is fully enrolled. And then the next step will be to bring vutrisiran to patients with cardiomyopathy, both hereditary and wild-type. And we're doing that through a Phase III study called HELIOS-B, and that study is ongoing. The primary end point there -- it's an outcome-based study, CV hospitalizations and mortality. It's a 13-month end point with an interim analysis in order to be able to allow us to see headline data from that study at a sooner time point. So an awful lot going on in our late-stage pipeline. And then obviously, we have our earlier-stage pipeline as well with AGT, our program for patients with hypertension; our C5 RNAi, which is currently in Phase II for patients with IgA nephropathy; the HBV program that we've partnered with Vir; our alpha-1 antitrypsin program. So you can see, Mani, we're going to be bringing medicines to -- our RNAi therapeutics to patients on an ongoing basis for the foreseeable future. We recently had our collaboration with Regeneron, which allows us now to access CNS and ocular diseases. And we've committed to delivering 2 to 4 INDs per year for the foreseeable future. The ones that we're expecting to be filed in 2020 is our HSD program partnered with Regeneron for patients with NASH; as well as our ALECT2 program, which is fully owned, for patients with ALECT2 amyloidosis. So I'm going to stop there, but you can probably tell, there's an awful lot going on at Alnylam. And we're very, very excited about bringing our platform to benefit patients.

Absolutely. Thank you so much. Let's start with the broadest question then go into detail. Obviously, you have a lot of programs going. You guys have talked about exercising progressively more financial discipline and the importance of becoming increasingly profitable over time. Disclosed that you expect last year to be your peak loss year going forward driven by revenue growth as well as a little bit of financial discipline. Jeff Poulton, your new CFO, gave some detail around that. Help us understand a little bit the operating leverage in the business as you launch multiple products and how that drives -- for you to get progressive margin expansion and improvement in the cash flow characteristics of these programs as you launch 2, 3, 4 products, have a couple of different products in different rare diseases where they can share some of the back office and reimbursement and other local, regional government resources that you need to commercialize rare diseases globally.

Yes. No, that's a good question. So you've mentioned the fact that we have guided that 2019 is going to be our peak operating loss year. And we believe that we can achieve a self-sustainable profile for the company in due course, driven really by 2 main levers. I think one is around the kind of revenues that we're going to continue to build across the programs. We're looking at ONPATTRO now, and then it's GIVLAARI, lumasiran. And we've got a steady cadence of launches over the next several years, which will continue to deliver revenues. We'll also get revenues from the partnered programs. I talked about the royalties associated with inclisiran and fitusiran. So I think from a revenue perspective, we see a continued growth of revenues over a period of time. And I think one of the things that we've really focused on has been investment discipline on the other side of the equation to really think very carefully about how we build our commercial footprint. I think one of the benefits of launching GIVLAARI has been our opportunity to leverage what we've learned from launching ONPATTRO as well as the infrastructure that we've built globally for ONPATTRO. We're using very much the same playbook in terms of patient identification and diagnosis, Alnylam Act, using the capabilities that we've built around agreeing -- value-based agreements, which have meant that we really have had no headwinds from a payer perspective. And I think it's really helped us build a kind of global commercial construct that we'll be able to utilize for other programs that come to market. I mean one of the interesting approaches that we developed for GIVLAARI, which is different from ONPATTRO, was the collaboration with Ironwood where we're able to access sort of 160 sales reps, GI-focused sales reps in order to help us address the needs in that physician population. So we're thinking quite carefully about how we construct this organization to maximize the platform that we've built globally.

Let's talk about a little bit on GIVLAARI, which I think is very interesting. So obviously, porphyria has been tremendously underserved, a remarkable unmet need, a lot of suffering for these patients. Talk about how you think about drawing more patients into therapy and shortening the patient journey to diagnosis, which can be up to a decade or so in the case of these porphyria patients, and how that Ironwood partnership plays into that.

Yes. No, you're absolutely right. Unfortunately, for these patients, despite the fact that they have a significant burden of disease, they have an incredibly long odyssey historically to find physicians who are able to make the correct diagnosis. I mean many of these patients end up having hysterectomies and appendectomies. And so I think having an effective therapeutic that can provide benefit to these patients, I think, will focus attention on diagnosing the patients. And clearly, we are focused on educating the relevant physicians around both the disease, how to diagnose the disease and the treatment option that we now have with GIVLAARI. And I think as with many rare diseases where you bring an effective therapeutic into the physicians' armamentarium, it starts to drive better understanding of the disease and therefore better diagnosis. So we're quite optimistic that given the compelling profile that we have with GIVLAARI, we'll start to see more and more patients coming into treatment.

That makes a lot of sense. And when we think about the tempo of GIVLAARI expanding into other geographies, give me a sense about how you think about that opportunity and the tempo of launches nationally we should expect for GIVLAARI.

I think you can expect a similar approach that we developed for ONPATTRO. Clearly, approval in the U.S. first, moving forward in the U.S. and then approvals and pricing reimbursement discussions in Europe, Japan and Brazil. We've already got a commercial kind of footprint in those markets, so I think you can anticipate that we will use a very similar playbook for GIVLAARI. Just of note, a little bit of news hot off the press actually for ONPATTRO is that we were able to get an approval in Brazil. So we're very excited about that market. As you know, Mani, the epidemiology of that market for ATTR amyloidosis is very favorable in terms of patients who have both the V30M mutation as well as the V122I mutation. So we're very excited about moving that forward. In case some of the audience hadn't become aware of that, I thought I would highlight that is news hot off the press.

No, that's definitely exciting. And the Brazilian market is actually quite substantial for TTR polyneuropathy...

That's correct.

Because of that epidemiology.

Yes.

Let's talk a little bit about HELIOS. So HELIOS-A is fully enrolled. You did give guidance around ONPATTRO revenues for the year. Does the fact that HELIOS-A is now fully enrolled imply that any concern around cannibalization of your identified patients into your studies are therefore reduced? Then how do we think about as a possible upside figure versus your announced guidance? Or is that already contemplated in the guidance band given?

I think we obviously had a plan around enrollment for HELIOS-A, so I think all the relevant factors have been considered in our guidance going forward. I mean if we think about the growth of ONPATTRO, I think as we've discussed, I mean there are a few kind of key levers for this. I mean one, of course, is geographic expansion, which we've touched on. I think the other is I think we're making really good progress with patient identification and diagnosis and actually having kind of other players in the mix like Pfizer with tafamidis. So it's really driving awareness of the disease. So I think we're seeing much more awareness in the marketplace of the disease. And I think we've touched on the additional studies that we're doing for ONPATTRO, which will expand the label and allow us to access patients with cardiomyopathy.