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

Hello. Welcome to day 3 of the UBS Global Healthcare Conference. My name is Navin Jacob, senior analyst covering large-cap pharmaceuticals and mid-cap biotech. Our next presentation and fireside chat is with Alnylam. I'm happy to have with me Yvonne Greenstreet, Chief Operating Officer. Yvonne, thank you for joining us.

Thank you, Navin. I understand that I've got the prime slot, the last slot, so looking forward to be with everybody today on this call. I thought it may be helpful, just to say a few words about Alnylam before we get into the questions. I mean, clearly, we're really excited about Alnylam's progress, and we now are a global multiproduct commercial company with 2 products on the market, ONPATTRO and GIVLAARI. I know we'll be talking about those here in a few minutes. Yes, another 2 products in registration with lumasiran as well as inclisiran, which is in partnership with Novartis. We've got 2 additional programs in late Phase III, vutrisiran and ONPATTRO, ONPATTRO in the HELIOS-B study for hereditary and wild-type cardiomyopathy. And both these should be on the market in the next 1 to 2 years. And as we've discussed in prior calls and meetings, we feel very privileged to have both these marketed and late-stage programs but also with a rich clinical pipeline and a very productive platform. I thought it might be helpful just to start out by saying a few words on how we're thinking about framing the impact of COVID-19. Clearly, this is a topic that's on many people's minds and it's a very dynamic situation with a lot of uncertainty. But we're thinking about it really in terms of kind of 3 periods, the first period being the current pandemic phase which we're currently in and we believe will encompass most of quarter 2. And this is where we think there's going to be most pressure on health care systems, some disruption to the normal health care professional and patient interactions, diagnosis, genetic testing and patient compliance with therapies. When this is over, we think we'll enter into what we're calling a recovery phase in Q3 where we'll begin to see the gradual pickup of health care activities, where we'll start to see improved rates of diagnosis, et cetera. And then finally, we're hoping that we're able to move towards a new normal phase in Q4, where we'll begin to see much of the typical health care activities really take off with normalcy, obviously within the context of COVID-19 precaution. Really throughout all these challenges, we've been really working hard to mitigate the impacts of the pandemic, particularly on patients who are being treated with our medicines as well as the business. And I'm pleased to say that despite these challenges, we have been able to stay focused on helping patients get their medicines as well as advancing our pipelines of RNAi therapeutics. And this has allowed us to deliver what was a really strong first quarter of this year. So $66.7 million in global net product revenues from ONPATTRO, which is nearly a 20% quarter-on-quarter growth with 950 patients on commercial ONPATTRO treated worldwide and $5.3 million in the U.S. net product revenues for GIVLAARI in our first full quarter of launch. And so despite the challenges, we're very pleased with this picture. And we remain on track to achieving and most likely exceeding the Alnylam 2020 strategic goals that we set out for ourselves 5 years ago. So I thought that was a helpful just kind of context setting of where we are as a company and our commitment to considering to move our pipeline in the business forward. And maybe now's the time to kind of kick off into the question-and-answer section.

That's perfect. Thank you so much, Yvonne. So maybe just starting on ONPATTRO. Guidance for ONPATTRO 2020 sales were decreased a touch, 5%. What are the specific assumptions around that 5% cut? Was that all related to COVID? Was there anything beyond that, that was driving that reduction?

Yes. So I started off by framing how we're thinking about the pandemic. And clearly, Q2 was a peak hopefully of the pandemic phase. And in this spirit, not unanticipated, some reduced diagnosis and genetic testing because patients weren't able to see their doctors as normal and also patient flow through kind of global health care systems. And we think this dynamic is likely to negatively impact ONPATTRO revenues and thus expecting about a 10% drop in revenue in Q2 compared to Q1, but hope that as we go into Q3, we'll be able to pick up these rates again. With respect to the decrease of guidance, this is, as I said, primarily based on our thinking around COVID in Q2 but also a belief that our overall picture will be cushioned by ONPATTRO performance going through a copy phase in Q3 and into the new normal in Q4. I think it's also kind of worth saying that even with this 5% decrease, the midpoint of our new guidance range of $270 million to $300 million represents actually more than a 70% planned growth versus 2019. So as I said, pretty good performance. And I think this is thanks to the efforts of our global field teams who are able to very rapidly shift to virtual interactions with health care professionals, payers and patients. And we've been working on digital and virtual tools for a while. And so we're able to pivot fairly quickly in this direction. And also, I think very much a value of the company in terms of making sure that we support patients who are taking our medicine, working very hard to ensure that patients are able to have access to appropriate sites of care, including access to in-home infusion. So we're able to maintain dosing continuity as best as we can throughout this pandemic.

And so with regards to home infusion, that's a great segue to my next question, which is, do you have a sense of what percent of current ONPATTRO patients are able to receive or are receiving home infusion versus what percent are in the clinic? And how does that change moving forward? Is there a more permanent impact from COVID on the prescribing habits associated -- or not prescribing but just even the administrative habits associated with giving ONPATTRO?

Yes, that's a really good question. I mean, we were pleased that as the pandemic picked up, we found that payers and regulators have really kind of increasingly recognized the value of home care for patients, particularly those with life-threatening or disabling conditions, patients with a particularly at risk for pandemic and may be anxious about making hospital visits. And for instance, in the U.S., one of the sort of COVID-19-related changes in CMS allowed Medicare coverage options for home care. So we saw this as a really positive step which has allowed us to really facilitate a significant shift to home -- in home infusions and transition away from care centers. Specifically with respect to your question, in the CEMEA region, we saw that in-home infusions expanded from about 17% of patients at the end of 2019 to about 40% as of late April. In the U.S. again, given some of the changes in CMS, we saw in-home infusions expand from about 9% of patients at the end of 2019 to 16% as of late April. Now as we look out, we think that the trend will continue through quarter 2, but it's unclear how sticky in-home infusions will actually be amongst patients when we enter the new normal. And it was quite an interesting finding to us and maybe a bit counterintuitive, but prior to the pandemic, many patients actually kind of preferred to receive their ONPATTRO infusions at academic or local centers. Perhaps it was because they thought they were getting kind of more care from having closer interactions with doctors and nurses and particularly enjoying the peer environment with other patients whilst receiving ONPATTRO. It's really hard to say how things are going to unfold in the future, but our sense is that in the U.S., we will continue to see a move to home infusion. You may well end up being a little bit more stable, but that's our best guess for now. We'll just have to wait to see how this plays out.

I believe that you had stated that 15% to 30% of ONPATTRO patients are also on tafamidis. What has been the real-world experience in terms of measuring outcomes here for those combination patients versus those that are on monotherapy? Are you seeing the differentiated outcomes of those combo patients?

I think it's a really interesting trend and perhaps one that may not necessarily have been predicted. But you're absolutely right. Yes, we've seen that about 15% to 30% ONPATTRO patients are also on tafamidis. I think it's important to highlight that ONPATTRO is approved for the treatment of the polyneuropathy associated with hATTR. But as we know, ATTR is a multisystem disease and there will be patients with this so-called mixed phenotype who have both cardiomyopathy and polyneuropathy, and clearly, they could well receive both tafamidis and ONPATTRO. I mean, as we've seen this market unfold, it seems to be this combination use is primarily a U.S. phenomenon. And there really don't seem to be payer hurdles associated with this approach. Interestingly, in the EU and Japan, we're seeing more switches from patients who've been on stabilizers, progressed on stabilizers to ONPATTRO and so a slightly different dynamic, I think, in the U.S. and the rest of world. With respect to kind of improvements and outcomes, that's something that clearly would need to be studied in a -- in more of a trial setting for us to be definitive about the patient impact here, but taken at a very sort of basic level, the fact that you've got patients who've got -- some patients with birth cardiomyopathy and polyneuropathy, it actually makes sense for physicians to consider treating these patients with both agents.

In the near term, as you look to expand outside the U.S., can you remind us what the cadence of launches for ONPATTRO will be in the various different regions? Remind us also, which are some of the larger markets. Obviously, Japan, you've clearly highlighted the second largest market, but just clarify for us the cadence as well as which of the markets are important drivers for growth for ONPATTRO internationally.

Yes. No, that's a good question. I think you are right to highlight Japan as the second largest market for us exiting 2020. Obviously, this is driven by a number of factors versus epidemiology but also from the fact that you've got key opinion leaders and amyloidosis centers, where they're very familiar with diagnosing TTR amyloidosis. And so we're very excited about our performance in Japan. You may have noted that we've had recent launches in Italy, Sweden, Israel, Turkey and Spain. We're particularly excited about our newest region in Latin America with Brazil. Again there, the epidemiology is such that the large numbers of patients that are kind of affected with TTR amyloidosis.

So with regards to the reimbursement landscape in the U.S. as well as internationally, what are some of the differences that you're facing U.S. versus international? Any hurdles that you're facing internationally? Particularly wondering how COVID may be affecting health care budgets in Europe, for instance. Is that something that you're running into? Do you see the conversations with payers externally outside the U.S. being more challenging in a COVID environment or are you not yet seeing any dynamic like that?

Well, I think we're very proud of the approach that we've taken to engaging with payers using our kind of VBA approaches. And they've been really, really, very successful in allowing us to bring what we believe are transformational medicines to patients, both ONPATTRO and GIVLAARI. And we really haven't had anything in the way of headwinds in terms of being able to get these medicines reimbursed. And what I can say is that in recent times, there haven't been any challenges in terms of our interactions with payers, both in the U.S. and outside the U.S. But obviously, we'll have to wait to see over the long term how health care systems and budgets may become impacted by COVID-19, of course, depending on how long everything goes on for. But for now, we're actually very, very pleased actually with how our interactions have progressed even in the very recent period.

You mentioned GIVLAARI and that's a wonderful opportunity to switch over to that product. And at this point, I want to bring in my associates, Sriker Nadipuram and Jon Lim, give them an opportunity to participate here in the discussion. They work very hard for me. Sriker, do you want to go ahead and ask a few questions on GIVLAARI before Jon moves over to lumasiran?

Sure. Thanks, Navin, and thanks, Yvonne, for doing this. So on GIVLAARI, the launch has gone well thus far, and you stated that you received over 60 patient start forms for GIVLAARI. What percent of these are from newly diagnosed patients versus those already known to centers?

Well, Sriker, first of all, hello. It's a pleasure to meet you by phone. I don't believe we've met in person but really good to have you asking questions here. Look, you're absolutely right. We're very pleased with the GIVLAARI launch. I mean, GIVLAARI really is a transformational treatment for patients with AHP. And as most of you will know, this is a disease with really very high unmet need and where I think we've delivered very compelling data in our Phase III ENVISION study with a 90% reduction in the compressed median acute attack rate together with a really good profile. So with the level of medical need in these patients and the profile of GIVLAARI, I think not surprising that the launch has gone very well and both physicians and patients are very pleased with the profile. With respect to the start forms, while we haven't broken out kind of exact percentages in terms of those that come from newly diagnosed patients and those that are known to centers, I think what I can say is that the majority of the start forms in Q1 came from new patients. And we really are pleased to see actually a good mix of start forms from both centers of excellence and community centers at this very early stage in GIVLAARI's launch. Obviously, start forms are measured as a U.S. metric. I think I just want to note that we're very excited about the potential for GIVLAARI outside the U.S. as well. And we announced the approval of GIVLAARI in the EU with a recent launch in Germany. And we're looking to open up more countries and launching GIVLAARI and making sure we can get this important medicine to patients in other countries in the world throughout the rest of this year and beyond that.

Got it. And maybe -- so with that, you kind of gave us details about Alnylam -- about ONPATTRO, certain ex U.S. geographies that are important for GIVLAARI. Can you give us some detail on what are the key U.S. -- ex U.S. geographies?

I mean, what I can say is that we will be following very much the launch playbook that we initiated with ONPATTRO, so you will begin to see us roll out GIVLAARI in a very similar manner going forward.

Got it, okay. And you gave color on the COVID impact to ONPATTRO. Can you kind of give us some color on the COVID impact for GIVLAARI in the U.S. and maybe in Germany as well?

Yes. Obviously, much earlier in the launch of GIVLAARI compared to ONPATTRO. But as I've said, we've been really encouraged with the progress that we've seen to date. Yes. Having said that, I think it's reasonable to assume and anticipate a decrease in new patient starts due to reduced diagnosis rates. And as I've talked about with respect to ONPATTRO, interactions between kind of patients and doctors during this pandemic phase. But again, similar to what we've seen with ONPATTRO, we expect uptake will improve in Q3 and Q4 as things start to return to the new normal. It's interesting, I think, because many patients with GIVLAARI get admitted to hospitals with their acute attacks. We think that actually, with GIVLAARI's demonstrated ability to reduce hospitalizations and urgent care treatment for AHP patients, we think there is a strong rationale for patients to maintain dosing continuity in the current environment. And I think the formulation is well, given that GIVLAARI's a monthly subcu dosing, that's particularly amenable to being transitioned to in-home administration. So while we anticipate there'll be some impact of COVID on GIVLAARI, we think that due to some of these unique features, it might actually be somewhat mitigated.

Got it, that's helpful. And with GIVLAARI, you have the advantage of co-promoting with Ironwood. Thus far, has the Ironwood partnership yielded any patients? And what are your expectations for the number of patients that come from them in 2020? And maybe if you could just -- could give us some color on how you're able to verify for prescription was generated by Alnylam versus the Ironwood sales force?

Yes. No, we're very pleased with how the Ironwood partnership has progressed. I think the rationale for partnering with a company like Ironwood is very clear. They have a lot of expertise in GI, and we can look to leverage this expertise and the relationships they have to really expand our medical education and diagnosis efforts for patients with AHP. I mean, not surprisingly, we're not going to provide details on these numbers. We have very carefully thought through which physicians will be engaging with Ironwood and which ones with us. But I think we are seeing start forms from gastroenterologists. And clearly, this is the specialty group that's the focus for Ironwood and a very imported customer group for GIVLAARI in general. So I think it's hard to provide much more color but very pleased with how the relationship has developed.

Got it. I definitely understand there's only certain things that you can disclose. But maybe shifting to pricing. You've talked about having VBA agreements with payers for GIVLAARI. Can you give us some details on what are some of the key provisions or clinical benchmarks that are in these agreements? And do you expect the pandemic to affect...

Yes. Yes. I mean, what I can say is that our VBA approach has been very successful for GIVLAARI. And I think a yardstick for this actually is that the policies that have been instituted are absolutely consistent with our label. By that, I mean that no restrictions to the number of baseline attacks. So in terms of how the VBAs has been set up, we're actually really pleased with how things have gone here. And no, we haven't had any payer resistance. I think again, just given the impact that the profile of GIVLAARI has on patients with the very challenging condition, with severe recurrent abdominal attacks, abdominal pain where patients often end up in hospitals, et cetera. So things have gone very well actually on the payer front with respect to GIVLAARI.

Got it, okay. And you briefly talked about the ease of administration for GIVLAARI. If supplied in a vial, from my understanding, are there any plans to develop an auto injector? And I guess, are patients mostly self-administering GIVLAARI right now or is it home nurses being sent?

So I think given this stage in the GIVLAARI launch, I think we really want to understand how GIVLAARI is being used in the real-world setting. And what are the needs that physicians and patients have that we could then go on to explore further development for GIVLAARI? But I think given the kind of very early stage in the launch, we've only just -- we've really just delivered our first quarter of -- full quarter of sales for GIVLAARI. I think it's premature to provide too much more comments.

Got it, okay. Makes sense. And I just want to pass it to my colleague, Jon Lim now, to ask a few questions as well. Thanks, Yvonne.

Yvonne, I wanted to talk about lumasiran. Just had a quick question to start. How have -- so you're expecting FDA approval in late 2020 and we see that the EAP started pretty recently. What is the capacity of this EAP? And how quickly do you expect to convert these patients to paying patients?

Yes. Again, just to set the context for lumasiran, that's our RNAi therapeutic for PH1. This is a devastating ultra-rare orphan disease where you get excessive production of oxalate, get recurrent renal stones and eventually renal failure. I think importantly, treatments are not great. Many patients require a dual liver kidney transplant. And that's the setting. We have completed the NDA and MAA submissions. And as you highlight, we are proving -- we're expecting, sorry, FDA approval in late 2020. And obviously, this has an impact on the size of any EAP. We have opened up EAPs in both the U.S. and Europe for PH1 patients who are at least 60 years old with preserved renal function. But we can't really comment at this point on expected enrollment or predict the eventual size. I think as we look out though to a lumasiran approval, I think we can expect a similar dynamic to what we saw with ONPATTRO, where the first bucket of commercial patients may well be kind of EAP patients coming off the EAP and also those moved to sites. I think just also kind of just highlight the data from ILLUMINATE-A will be presented at the ERA-EDTA in June. And clearly, we're very pleased with the data that we saw in terms of the reduction of uri oxalate compared to placebo and great safety profile. So we're anticipating that hopefully, we will have an FDA approval by year-end.

I see. And do you have any color on how the EAP may shape up between the younger, the pediatric patients versus the adults?

As I said, the EAP will be for PH1 patients who are at least 60 years old so it will be kind of 60 years and beyond. Can't say at this time what the sort of breakdown of the ages is, but the EAP will be open to patients who are over 60 years old.

Okay. And how has the initial discussions with payers been? What types of data points are they most focused on?

Yes. It's probably a little early to comment in any detail on payer discussions. But just to emphasize that we've got 2 launches under our belt now. And we've got a pretty good track record, I think, of not encountering payer headwinds. So just given the -- again, that the nature of the disease, the impact that a medicine like lumasiran could have on these patients as well as the primary end point that we started doing ILLUMINATE-A of the reduction of uri oxalate compared to placebo, we also achieved all the secondary end points, which included the normalization or the normalization of uri oxalate. And of course, the safety looks good. So we think we have a really good package of a positive data from ILLUMINATE-A, and this is what will form the basis of our interactions with payers. We're also completing -- actually, we're doing the kind of larger study, separate studies that have been done in patients with PH1. ILLUMINATE-A is obviously the pivotal but we're also completing ILLUMINATE-B in patients who are less than 60 years old. I mean, this is a disease that impacts the pediatric population so an important study to do. So this group under 6 years with preserved renal function. And we should be in a position to report results from this study in mid-2020. We're also conducting ILLUMINATE-C in patients with kind of more impaired renal function, again, I think, interesting to kind of look at the safety and efficacy of lumasiran in all these important patient groups. But ILLUMINATE-A is the bedrock of the data that we will have. And we anticipate that it's going to be very well received by payers, just given the pediatric patient population, the impact of the disease and the benefits that lumasiran will hopefully provide these patients.

Got it. And so as we look to this launch, would you be looking to negotiate VBAs as there are for GIVLAARI?

I think VBAs have become very much part of our playbook. We think it's really kind of enabling way of working with the payer community to bring our transformational medicines to patients and stand by the benefit that we believe these patients will receive. So yes, I think we should expect that this is an approach that Alnylam will continue to use going forward.

Well, thank you, Jon. And Yvonne, maybe if we can move to the last few minutes here to touch upon some earlier-stage assets that you work on. You have a COVID collaboration with Vir. Could you provide some background for those on the line who are still not fully familiar with what your -- the approach that you're taking in combo with Vir? How is RNAi going to be utilized to attack the virus?

Yes. No, I'm really excited you asked me this question actually because this is a program that has been one that has motivated our scientists back at Alnylam, and they've really risen to the challenge. I'll just start off by summarizing the relationship that we had with Vir that started with HPV, and then we expanded it to include RNAi therapeutics for COVID-19. We have a development candidate already, ALN-COV, which is also known by Vir as VIR-2703. And the interesting thing about this is that it directly targets the SARS-CoV-2 genome. I mean, it's cross-reactive with 99.9% of over 4,000 SARS-CoV genomes that have been sequenced, including actually the coronavirus that led to the 2003 SARS outbreak. So we're clearly addressing a very preserved part of the genome. And it's an incredibly potent molecule. It's shown an IC50 of less than 100 picomolar as well as a 3-log reduction of viral particles in vitro. So very potent molecule and cost reactive. Our scientists were able to come up with this program really from an idea that obviously was stimulated when we saw what was happening in Wuhan at the start of this year. But being able to declare a development candidate within, I think, 3 months, I think, is just a testament to the capabilities that we have in our research organization at Alnylam. And in terms of the approach, we're using an inhalational formulation to be able to deliver the siRNA directly to the lungs. We're still figuring out all the details, of course. But this is an approach that could be used for early treatment, perhaps also prophylaxis and people who've been exposed. And our goal really here now is to accelerate this program to an IND filing before the end of this year and start clinical trials. So obviously, working very closely with our partners at Vir, and we've started the process of talking to regulators about the development plans. And a little bit too early to talk about all the details of the study, dosing, et cetera, but we believe that this drug again, just given the sort of power of the RNAi platform, we think this drug could potentially be given as a single nebulized administration. So that's the sort of focus right now, the collaboration with Vir. But I think we've also expanded the collaboration to include RNAi therapeutics that are directed towards human host factors, so ACE2 and TMPRSS2, which are both required for the entry of virus into human cells. These are clearly earlier programs, still preclinical. It could be an interesting avenue to explore as well. So I think, look, I'm just so proud to be in an industry where so many groups are focused on bringing the science and innovation that they have to address this pandemic. And I'm hopeful that with all the different approaches that are being progressed, we will be able to bring to people both therapeutic interventions as well as a vaccine. So exciting times.

Well, and with -- last question here on another program that looks interesting to me, ALN-AGT for treatment-resistant hypertension. You've shown a 10-millimeter mercury reduction in monotherapy or early Phase I data. What -- how -- could you put us -- give us context for what the clinical significance of that level of reduction is for this patient population?

Sure. Look, I mean, this is a program that we're very excited about. There are about 11 million patients just in the U.S. alone who've got resistant hypertension, so high blood pressure that can't be controlled with 3 or more antihypertensive drugs. And these patients are high risk for stroke, heart failure and renal failure and other tissue damage. And actually, hypertension is the #1 modifiable risk factor for cardiovascular disease, and we really haven't had much innovation in the field for decades. And so we're very excited that AGT could help make an impact to these patients with the potential to improve blood pressure control. So I think it's safe to say we're very excited and enthusiastically progressing this program. With respect to the data, actually pretty compelling. The initial top line results were positive. They were done in a study with 48 patients who had essential hypertension. We administered ALN-AGT as a single subcu dose and achieved an over 90% knockdown of angiotensin. And we -- as you point out, we saw over 10 millimeters of mercury reduction in mean 24-hour systolic blood pressure at 8 weeks relative to placebo. And this is actually a -- this is a significant reduction. As little as a 5-millimeter mercury reduction resistant hypertension patients would be a significant clinical result and this is obviously, at this early stage, we're achieving twice that. But it's also not just about the absolute blood pressure reduction. If we think about the durability of AGT knockdown and the blood pressure effects, that they look to be supportive of what could be a once-quarterly or perhaps even a biannual dose regimen. You also get the benefits of compliance as well as the pharmacodynamic profile, which is particularly important in these patients. So when we stand back and think about AGT, it looks very much like an inclisiran type of opportunity, large patient population, significant medical sequela and the potential to intervene with a very infrequent dosing regimen, and I should add, thus far, very encouraging safety and tolerability profile with no drug-related SAEs seen to date. So very important program for Alnylam with a potential to help millions of patients around the world. So we're progressing enthusiastically, so I think.

Yes. No, fair enough. And with that, we've bumped up against our time limit, and I want to sincerely thank Yvonne Greenstreet, Chief Operating Officer of Alnylam for joining us today. Thank you so much for everyone dialing in. Thank you, Yvonne.

Thank you for your time. Thank you.

Take care. Bye-bye.