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

Welcome, everyone, to the Cowen Health Care Conference and to the Alnylam fireside chat. Here with us today for this session is CEO, John Maraganore, which I'm sure many -- who I'm sure many of you know. And looking forward to getting started on the main topics of investor interest, mostly, which revolve around how the ONPATTRO launch is going. How that will feed into the fitusiran development program and that launch as well as your GIVLAARI launch. And congratulations on the formal EU approval. And all the other programs you have inclisiran, fitusiran, lumasiran, which will be under regulatory review pretty shortly.

Yes.

So let's start with ONPATTRO, how is the mixed phenotype launch going? I mean, how are you seeing new growth? Your 2020 guidance is $285 million to $315 million.

That's right.

Representing 80% growth at the midpoint. Where is this growth coming from? What's the average new patient? What does that patient look like?

Yes. So I mean, obviously, for -- as a quick reminder, ONPATTRO is our RNAi therapeutic that targets TTR for the treatment of the polyneuropathy associated with hereditary ATTR amyloidosis. And so for patients that have these polyneuropathy manifestations, which is quite common in patients in the U.S. and globally, with hereditary ATTR, ONPATTRO really is a treatment option for physicians that can make a difference for patients. The real drivers of growth -- I mean, obviously, we're really happy with our performance last year. It was our first full year, we generated over $166 million of product revenues, really showing strong performance over 20% quarter-on-quarter growth in 2019. In 2020, we very much expect a continued -- steady and continued growth for the brand. It's going to be driven by new patient finding activities that we're doing globally for the product. It's also going to be driven by geographic expansion. For example, we have a number of countries in Europe that are still -- where we're approved, but where we're still generating reimbursement decisions. Most recently, that occurred in Italy. We also have other countries like Brazil, where we expect approval in 2020. So the opening of new markets for ONPATTRO will be the second source of growth in 2020. And the third source of growth is really around evidence-generating activities. We've done quite a bit to demonstrate the value of ONPATTRO in patients. For example, we completed a study in orthotopic liver transplant patients. These are patients that have received a wild-type liver, but they can still progress, and that's a population where there's really significant unmet need. There are few hundreds of these patients around the world. And that's an example of where, within the existing label, new evidence can generate support for safety and activity of the drug that would help, obviously, expansion of the product into those type of segments of the TTR population. So new patient finding, geographic expansion, evidence-generating activity, those are the real drivers for 2020.

That transplant data, that would underscore the liver safety of the whole platform, wouldn't it?

Oh, yes. I think it certainly has that benefit as well. Those were data that we were hoping to present at the ISA meeting that just got canceled.

Right.

So we'll find another venue to present those data, but we're obviously very encouraged by the overall safety profile for ONPATTRO, and then more broadly for the whole platform.

Can you talk to why the prescriber mix is changing, the cardiologist proportion seems to be, maybe, getting a little smaller. It goes up and goes down.

Yes.

But -- and how are you seeing cardiologists prescribing behavior? Are they looking for the neuropathy? Do they run genotyping? Are they just looking at symptoms? Do they rope in a colleague, a neurologist colleague?

Yes. Well, this is changing in the U.S., and the U.S. is where we have the greatest visibility of physician subtypes. In other parts of the world, we can get some data on that, but it's not as clear. And that's because in the U.S., we have these start forms through our patient hub that allows us to understand the prescribing physician's background and specialty at the end. So these are, generally speaking, U.S. data. And we have seen up -- sort of a choppiness in terms of the prescriber base. During the course of the year of 2019, it was evenly matched between cardiologists and neurologists in terms of prescribers, but we do see some choppiness in that number overall. There's a couple phenomenon that's going on right now. One is that neurologists who are typically relatively conservative physicians -- my brother is a neurologist, so I can...

Compared to cardiologists, yes.

Well, compared to a cardiologist. My brother is a neurologist so I know exactly what they're like. But neurologists tend to be a little bit more conservative. And so over time, they've gotten to be more comfortable and more aware of ONPATTRO. And so therefore, they're more active, they're more evolved now looking for this. The other dynamic that's occurring right now is we're seeing a lot more multidisciplinary efforts going on in major medical centers. I was at Duke last week, and there's a group of cardiologists that we met with and also their neurologists that you meet with. And they're all involved in this multidisciplinary triaging a patient.

Did they set up a distinct center, an amyloidosis center [indiscernible] yet?

They are in the process of doing that.

Okay.

I would say, regardless, they have a distinct triaging approach where they involve neurology, they involve cardiology. A lot of the cardiologists, of course, are also looking for the polyneuropathy of this disease. They recognize it. They know it's a significant burden for the patients.

Do they know what to look for? Like, can they do it themselves?

They -- well, many of them do, many of them do it on their own. They prescribe for polyneuropathy, that's the only way that can happen through our patient.

Safety -- okay.

So it is being done, and it's being done with cardiologists, hematologists, neurologists, gastroenterologists. So it's across many specialties, even general practitioners.

How are you seeing rates of genotyping, like the willingness to even do a genotype?

Yes.

One of your competitors is saying that's not relevant because now it's more...

It's being done. Every...

And then [ are now on track ].

Every -- yes, every physician, if they suspect TTR amyloidosis, they will do genetic testing to understand if it's hereditary or wild type, okay? And that's important. And when guidelines get published, and they will, I'm sure, in the not too distant future, doing genetic testing will be a core part of that.

Of -- okay.

It would be medically wrong and, frankly, not at all good for the patient if a genetic test is not part of the overall diagnosis [indiscernible]

So that will be part of -- they would have to do this as part of the paradigm. Okay.

Absolutely. No doubt.

And then Alnylam Act, how is the -- how do the TTR test numbers stand? Is utilization of that aspect of your hub going up and -- up or down?

Yes. It's going up. I mean, we're -- have now 21,000 samples that have been submitted to the free genetic testing program that we help support called Alnylam Act. It's done through Invitae as a third-party provider, and the positive hit rate remains around 6% to 8%.

Okay.

So we're -- a lot of patients are being found through that route. Now we don't know who those patients are. We can't. We -- it's a third-party genetic testing program that we just financially support. But obviously, the information around that is helpful for the patient to get diagnosed by the physician. And if the physician decides that ONPATTRO is the best medicine for that patient, then that obviously is beneficial for Alnylam. But that's ultimately the doctor's choice, and whatever is right for the patient is what is administered.

How is uptake of home infusions going? Could this drive additional patients?

Yes. I mean, there is a lot of home infusion out there, but it's less than I would have thought at this point in time, not by lack of availability in the U.S but frankly, mostly by patient choice. A lot of the patients are being treated in the hospital setting or in more local infusion centers where they're receiving their every 3-weekly IV infusion. We still make home infusion option available to applicable patients, and we hope to continue that. But it's quite interesting to see that, that is not as much of a driver of uptake as I would have expected at the beginning of launch.

So how are you viewing competition from tafamidis at this point? From your market intelligence, who are the patients who choose tafamidis? And more specifically, who are the mixed phenotype patients that might be choosing tafamidis? And why?

Yes. I mean, look, I've always viewed -- I've been consistent on this from day 1 that the competition is actually a good thing. This is more about market growth than it is market share in this disease. I mean, this is a very underdiagnosed disease. So having Alnylam and Pfizer and Axia out there, basically helping educate the medical community, helping improve disease awareness, helping improve patient diagnosis is a great thing for everybody involved. It certainly, most importantly, helps the patient. So that increased competitive promotional activity out there really does drive improvement of disease awareness. I mean, we're seeing TTR amyloidosis being major sessions in medical conferences now, whereas before, it was sort of a little cottage industry, in very niched conferences. So that's just good for physician education and ultimately, for patients. Now ONPATTRO, we believe, is a terrific option for patients that have polyneuropathy. And for patients that have manifestations of polyneuropathy as part of their disease, we're seeing significant prescription of ONPATTRO for that type of patients, regardless of whether they have other manifestations, including cardiomyopathy.

Okay.

So for patients that have a significant polyneuropathy component, we believe that ONPATTRO is the drug of choice for the management of that patient at the end.

Okay. So let's talk about how Europe is contributing or will contribute and how Japan will contribute and how you see those relative opportunities? And this might be the right point to, sort of, wrap in how you think there may or may not be impact from coronavirus, COVID-19, and supply chain or, sort of, demand and compliance?

Yes. Well, let's maybe just touch on the supply chain issue right away.

Yes.

I mean, we've done -- obviously, as all companies are doing right now, done a systematic review of our supply chain in light of the COVID-19 epidemic, and we are in a very good position. We don't see any implication for our commercial or clinical products. Most of our -- we do no drug substance manufacturing or drug product manufacturing in China. And we do that in either the U.S. or in Europe as a company. And we have no -- we have sufficient inventory of all of our commercial products as well as clinical development programs as well. So there's no supply chain implications. Now turning to specific markets and where there might be issues, let's speak and talk about Japan. Japan is a big market for us. It probably will exit 2020 as our second largest market. So far, we haven't seen any implication of the COVID-19 epidemic in Japan.

On demand?

On demand. We obviously look at that closely, and we'll monitor that very closely. But Ritu, so far, so good on that side of it.

Okay.

I think that, obviously, we're going to keep our eyes out on other endemic or other epidemic regions like Italy. We just recently got reimbursement in Italy. So we'll keep our eyes. It's too soon to say if there'll be any implication of the epidemic that's ongoing in Italy at this point in time. So we're just going to monitor that very closely.

Okay.

But getting back to the original question around the geographic activities in Europe, we're really pleased with, number one, the market access results that we've had in many European countries, Germany, for example. The per vial price in Germany is very robust compared to the U.S. Price, for example, and we've also gotten very favorable technology assessment ratings in other countries, including France and Italy. We don't yet have reimbursement in France. But we do have a paid ATU that's allowing us to generate. So...

You're still in the 1-year GDA negotiations?

No. We're done.

You're done? And still comparatively, it's good.

Absolutely.

German price -- sorry. That's the German price.

I can proudly say that the German government is paying more per vial than the U.S. government.

After full negotiations?

Correct.

Okay.

And that includes the 23% statutory U.S. discount for Medicare related to the 340B. So that gives you a sense of -- and the German price is publicly available, if you search for it. And we're really happy with that price at the end of the day.

So as we look out into the future for your TTR franchise, patisiran, ONPATTRO, segueing into vutrisiran, we're looking at 3 additional datasets. We're looking at HELIOS -- I'm sorry, APOLLO-B, which is the cardiac study of ONPATTRO.

Yes.

Primary endpoint, 6-minute walk. We're looking at HELIOS-A, which is the open-label FAP study for once-quarterly vutrisiran.

Correct.

Which will generate mNIS data, which is now fully enrolled...

Yes.

As of a week ago or something like that. And then we are looking at the big one, HELIOS-B...

Right.

which is the cardiac wild-type vutrisiran study, which is more of a 2022, 2023 time frame dataset.

Yes.

As we look at those 3, can you order them in -- can you first order them in terms of timing of the data?

Yes.

And then can you order them in terms of how much of a growth inflection it could mean for TTR franchise sales?

Yes. Absolutely. So the first readout will be from HELIOS-A. And as you said, that's the -- I like to colloquially call it the bridging study for getting vutrisiran to the market as quickly as possible in the polyneuropathy setting, okay? And that study is fully enrolled. It's got a 9-month endpoint, and we should see data in early 2021 from that study. And if that's positive -- and by the way, it's an open-label study. If that's positive, we should be in a position to get vutrisiran approved for the treatment of the polyneuropathy of hereditary ATTR amyloidosis. Basically, the label that we have with ONPATTRO would now be extended for vutrisiran, which is a once-quarterly subcutaneous drug. And what's exciting about that, Ritu, is it opens up a new treatment option for patients. So instead of getting an IV infusion every 3 weeks, they would get a subcu injection every 3 months. Obviously, a very nice type of option and change for patients. And we think it will help in our overall competitiveness of our product offering for patients around the world, okay? So that's the HELIOS-A study. Now the 2 cardiac studies, APOLLO-B and HELIOS-B, you'll enjoy the fact that we colloquially, internally call them the Cardi Bs, okay? And the first Cardi B is APOLLO-B. And of course, that's with ONPATTRO, where we're using 6-minute walk distance as the primary endpoint after 12 months of treatment. It's a randomized, double-blind, placebo-controlled study of about 300 patients. And we believe that if that study reads out, which should be the end of '21 time frame, okay? That, obviously, that opens up the ONPATTRO opportunity for the cardiomyopathy segment, both hereditary, but also very importantly, wild-type ATTR cardiomyopathy, again, assuming positive results. And that is what we believe the beginning of Alnylam accessing a very significant commercial opportunity for our TTR franchise that goes beyond the already attractive but relatively smaller polyneuropathy segment of what we have right now. So we really look forward to generating those data. As you know, from the original APOLLO study, we generated a significant and encouraging amount of exploratory endpoint data on cardiac effects of ONPATTRO. We really are encouraged by those data. There have been some more recent data, looking at cardiac imaging that have shown clear evidence for cardiac amyloid regression with administration of patisiran, which is the nonbranded name for ONPATTRO. So those type of data give a strong encouragement to then confirm the hypothesis in the APOLLO-B study, which again, should read out in the late '21 time period. But ultimately, getting a CV hospitalization and mortality outcomes label is what we're aiming to do with the HELIOS-B study. And that is going to be a study at 600 patients. It's been started, Phase III study, global study. We hope to have that enrolled in due course and hope to have data coming out of that in the -- more in the '24 time frame.

2024, okay.

But there's an opportunity for an earlier readout through an interim analysis that we may well do, we plan to do, that could generate data more in the time frame that you were talking about before.

Is that at 9 months?

No. The -- in HELIOS-B, we haven't decided that yet. HELIOS-B is a 30-month study.

Okay. So it would be like a...

It's the same duration of time as the ATTR-ACT study we've done with tafamidis.

But you could see separation after a certain number of patients at 9 or 12 months?

Absolutely. And herein lies some meta to our madness, which is in the APOLLO-B study, okay? We'll be able to see where the mortality and CV hospitalization curves separate. And that will be very informative.

Okay. So APOLLO-B will help inform the interim for HELIOS-B?

Absolutely. Absolutely. And that's something which I don't think people fully appreciate. But it does open up the opportunity for having a very informed point in which we would do an interim analysis on HELIOS-B.

Got it. Okay. We got 10 minutes left. I want to move to GIVLAARI, how that launch is going. You haven't given us a whole lot of details. But as you think about really taking advantage of Q1 because your approval came 2.5 months early, you weren't sort of positioned, so to speak, with all your materials. But ostensibly now you are. So how are the porphyria centers sort of commercially coming online? How has the interaction been? How is the Ironwood partnership for the community setting going, et cetera?

Yes. Well, I mean, we -- obviously, I'll limit my comments to what we can say about it from Q4. I know you don't want me to do that, but I'm going to do that. And what we said around our Q4 results, Ritu, is that we're really happy with the demand that we've seen for this product. And we, obviously, very early in the launch, only 6 weeks after the approval, had already been able to report on 13 start forms that we received, which is, of course, just the very beginning of where this is going to go. But the physician and patient awareness and demand for the product, it was something that we were actually a bit surprised by at the very beginning. We were seeing start forms coming in from sites that we didn't even know were out there from the standpoint of patients with acute hepatic porphyria. So we're off to a good start based on those Q4 results. We'll see how Q1 goes and look forward to reporting those results in due course. But I think the important thing is that GIVLAARI really is going to be an important medicine for patients with acute hepatic porphyria. And we do believe that over time, it will generate over $0.5 billion in annualized peak sales. It's a type of ultrarare orphan product, where there's really limited treatment options available for patients, where we think that we can be an important product for these patients.

How was...

We just got approval, by the way, in Europe. We want to advertise that point. You said it at the beginning.

Yes.

And so now the effort will begin in Europe, and this year, we expect to get approval in Brazil and Canada. And next year, we probably will get approval in Japan.

How is Alnylam Act utilization going forward with that condition?

It is growing. We are seeing -- we have hundreds of patient samples that we've received for evaluation for the potential genetic defects that are associated with acute hepatic porphyria. We see about a 10% hit rate with that genetic testing program. So it's actually higher than what we're seeing with ATTR, but the number of samples are still at the beginning...

Sure.

Of where that we expect that to go. Now that we've deployed our field teams out there in the U.S., we expect the numbers around Alnylam Act to go up quite a bit. So in the coming quarters, I think it'll be interesting to track...

Interesting, yes.

That diagnostic and see where we are.

Can Ironwood send patients to Alnylam Act?

They can.

They can.

Absolutely. Yes. So Ritu is referring, of course, to a co-promotional agreement that we formed with Ironwood. Ironwood has an established marketing and sales effort in the gastroenterology community with over 150 field-based employees. We have an arrangement with them where essentially, our entire gastroenterology promotional effort is being driven by Ironwood, while we focus on other specialties like neurologists and hematologists and hepatologists. But for the gastro community, we're leveraging the Ironwood sales reps, and they're finding a lot of patients out there.

Let's spend a minute on inclisiran. Obviously, you have a partnership -- a licensing agreement with formerly Medicines Company, now Novartis. How -- and I think investors are really looking to this really potential blockbuster asset to help you leverage the funding gap between now and where you have your sights for cash flow breakeven. How do you balance the importance of bridging that funding gap with preserving some of the upside on the conversation. Is it a $1.5 billion compound? Or is it like a $5 billion compound? How do you think of balancing the 2?

Yes. Well, I mean, inclisiran is our PCSK9 sRNA that is administered every 6 months for the treatment of hypercholesterolemia. So it's really just sit back and think about that, from a patient management perspective, especially in a very nonadherent patient population for the treatment and management of hypercholesterolemia. So we believe it's going to be a game changer. Novartis agrees with us as well. Novartis, at the beginning of the year, announced a relationship with the National Health Service of the United Kingdom, where basically, the U.K. is going to put a big chunk of the U.K. population onto inclisiran and also co-fund a primary prevention study in 40,000 people. So this is going to be a big product. And we believe in that. Novartis believes in that very strongly. They -- Vas has made comments around how he views this product as being potentially the largest product in the Novartis portfolio, and we would agree with him. So now, in the meantime, we have to look at this asset and about whether or not there could be balance sheet opportunities for Alnylam in a partial monetization of the royalty that we receive from Novartis. And that's something which we've talked about. We're going to explore it as a company. Obviously, for the right set of conditions, we would consider that. We would never consider a complete sale of the royalties. We think there's too much upside in the product to not want to participate in where that product can go. And we certainly would be eager to find arrangements that allow us to consider a partial monetization of inclisiran as a way of essentially allowing Alnylam to never have to go to the equity markets...

Right.

Between now and profitability.

Breaking every investment banker's heart.

We would break some hearts on the investment banker community, but we would make some friends with our shareholders.

Yes. Lighting round, cemdisiran.

Yes.

The IgA nephropathy data was pushed out a little bit? How do you see that opportunity, the partnership with Regeneron and going after additional complement indications?

Yes. So this is our C5-targeting sRNA. We're doing 2 things with it right now. One is as monotherapy. We're exploring it in an IgA nephropathy study. It's a Phase II study. We hope to have data toward the end of this year. The second thing we're doing with it is we're combining it with Regeneron's anti-C5 antibody called pozelimab. And we believe that by combining -- and there's a lot of terrific data on this. By combining the sRNA approach to deplete C5 in the circulation, combined with the antibody approach to mop up whatever is left will actually enable a very infrequent subcu dosing regimen for the treatment of complement-mediated diseases. And we think that, that will be a highly competitive commercial profile for the 2 companies that would be very competitive with Alexion's efforts both with Soliris and as well as ultomiris as well.

And that data is first -- the IgA nephropathy data, the monotherapy data is first half of 2021 at this point, correct?

That's the current guidance. That's right.

Okay. Got it. Let's move to lumasiran.

Yes. Phase III positive data.

Phase III positive data, now waiting for the filing.

We are waiting for the for the -- well, the filing has already started in the U.S. We have a...

Rolling.

Rolling submission.

Right.

This is our drug in primary hyperoxaluria. We had positive Phase III top line data that we announced back in December. The full data are going to be presented on March 31 at the OxalEurope Meeting in Amsterdam, assuming it's still on. If not, we'll find some other venue to do that. But it is a really exciting third product that we -- Alnylam will bring to the market ourselves. Obviously, the fourth this year will be inclisiran, but this will be the third product that we bring to the market ourselves. And a drug that dramatically lowers urinary oxalate levels in patients with primary hyperoxaluria will be a very, very important, potentially transformative medicine for patients with this very devastating rare disease.

How are -- internally, how are you thinking about those potential peak sales? I mean, I would think it would have to be a bigger magnitude [ in dollar ] just based on the population.

Well, yes. I mean, we think that when we look at the prevalence, the unmet need, the pharmacoeconomic considerations with this disease, when we look at all those factors, we also believe it could exceed $0.5 billion a year in sales even with potential competition out there.

Okay.

And this is a disease where the overall burden of disease is extremely high. So all of those line up with an ultrarare orphan disease opportunity that we think is in that price -- in that value range from a company perspective.

Fitusiran, the Sanofi partnership.

Yes. Correct.

How do you think of the opportunity there? You've got royalties. You've got royalties from Sanofi. Sanofi has royalties on fitusiran.

Correct. Well, we have...

Worth speaking about.

Yes. So fitusiran is our program in hemophilia, both for hemophilia A and B with and without inhibitors, high-profile program within Sanofi. It is a subcu -- once-monthly subcu drug. Sanofi is committed to that as a product that would be competitive with emicizumab, which is Hemlibra, which already has achieved $1 billion potential in the hemophilia space. The benefit of -- the potential benefit, obviously, of fitusiran is the fact that it's given once a month. We've seen in Phase II studies really encouraging control of bleeding rates. Sanofi has presented recent data where the ABR in these patients is rather dramatically released. And so far, the safety -- after we've introduced heme management -- bypass management guidelines, the safety has been encouraging. So we look forward to data from their Phase III study in the early 2021 time period, which is when they're expected to have those data. And obviously, if that study is positive, this is the ATLAS Phase III program, that would lead to a potential approval of fitusiran in the late '21, early '22.

How are you thinking about the essential hypertension program? And that's the favorite discussion point of investors.

Very exciting program in the pipeline in Phase I, but it's an ALN-AGT for the treatment of hypertension. Hypertension is an area that has not had innovation for decades. And the ability of having a once every 6 monthly dosing regimen for the treatment of refractory and resistant hypertension is something that we think could be transformative in that space. It's very much like an inclisiran program for Alnylam that we intend to keep forward and ultimately commercialize on our own.

And that's 2021 data?

We'll have data in 2020. Additional data.

In 2020. That's the knockdown data.

Looking at blood and blood pressure.

Okay. So you will get a blood pressure signal this year out of that program?

Absolutely. Absolutely. That's correct.

Last question, your CNS platform.

Yes.

Favorite programs and when we can see first data.

Well, we have 2 programs that we've disclosed. One is amyloid precursor protein for -- initially for cerebral amyloid angiopathy, which is the vascular amyloid disease that occurs in that situation. It's genetically validated in that indication. But we also have a program targeting Huntington's. And I'm quite excited about that program because I think we can have potentially a once every 3 monthly or 6 monthly dosing regimen for Huntington's without potentially the sort of neurofilament light chain increases that have been seen in the ASO program. We'll work to confirm all that. But that's the vision for where we're going with that program. And obviously, a very devastating genetic disease, where we have an approach that could be transformative for patients.

Great. Well, we are over time. John, thank you. I did want to get that CNS question in. And appreciate everybody for coming. Thank you so much.

Thank you. Good to see you.