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

Hi, my name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. It's with great pleasure that I'd like to welcome the CEO of Alnylam, John Maraganore. John, thanks for joining us today. We're going to do a fireside chat. Got a lot of questions, but for anyone who's tuned in and listening, if you have questions, you can send them through the WSW Chatbox, and I'll try to ask those as we go through the fireside chat.

So maybe to start off, John, if you can give us an intro to Alnylam for those who might not be familiar with the story.

Yes. Well, Maury, thanks, first of all, thanks for having me here today, and great to be here. I hope everybody is both safe and well. Alnylam is the leading RNAi therapeutics company. We've been pioneering RNAi therapeutics as a whole new class of medicine since 2002. Today, Alnylam is a multiproduct global commercial company. We have 2 products on the market. We have 2 products that are in registration and then a pipeline of 11 programs behind it. And then very importantly, a company that has an organic and robust product engine for sustainable innovation, delivering 2 to 4 new INDs per year as a business. So we're a company that we think has uniquely been able to build a platform that actually results in important medicines, ONPATTRO and GIVLAARI, the 2 products that we brought to market so far. And we look forward to continuing to deliver on the technology and the platform and making a big difference in patients' lives.

Got it. And for your lead commercial program ONPATTRO, it's being developed in ATTR. When I talk to investors about this one, I'm saying that this could be one of the largest market opportunities out there that still is untapped, and there's a lot of white space there. Maybe if you can talk about the disease setting, touch upon the number of patients out there that are immune, wild-type and mixed?

Yes, absolutely. Well, I agree with your comments on the market. I mean, when you combine the totality of ATTR amyloidosis, and keep in mind, we're labeled today for the polyneuropathy of hereditary ATTR amyloidosis. But when you look at the entirety of ATTR amyloidosis, it's a very large market indeed and very recently discovered or recently recognized as being a major driver of preserved ejection fraction heart failure altogether. So today, ONPATTRO is labeled for the polyneuropathy of hereditary ATTR amyloidosis, probably about 20,000 patients worldwide with that particular disease manifestation. 50,000 patients have hereditary ATTR amyloidosis. And then when you add patients with wild-type disease, that's another 300,000 patients around the world at least with wild-type ATTR. Now we're labeled in polyneuropathy. We're growing with additional studies that we're doing with APOLLO-B, in particular, for ONPATTRO. We're expanding into the cardiomyopathy setting, both the hereditary and wild-type setting. That's an important study for us. In addition, we're investing in our subcu product, vutrisiran, which also has -- is going to follow the same trajectory, first a polyneuropathy and then in the cardiomyopathy setting to realize the full potential of our products in that disease area.

Got it. And if you can talk about the number of patients that you're currently treating in the U.S. and ex-U.S. and anything else specific about the patient demographics?

Yes. Well, we're just at the beginning. We currently have over 950 patients that are on commercial ONPATTRO. There's a couple hundred other patients that are in open-label studies that we've traditionally done. So we've crossed the 1,000 patient mark, if you will, for people that are receiving ONPATTRO, again, commercial product is over 950. And we've been adding anywhere from 100 to 150 patients per quarter to-date. And we do expect that to continue with ONPATTRO. But of course, when we open up the cardiomyopathy opportunity with APOLLO-B and successful results of APOLLO-B, that number is going to expand quite significantly at that point.

Got it. And a majority of your prescribers are neurologists and then second, cardiologists, how has this trend evolved since you launched? And how do you expect this dynamic to shift when you get a label expectation for cardiomyopathy?

Yes. I mean, the data we have on the prescribers is really U.S.-based. And so let's just focus on the U.S. dynamic for this discussion. At the beginning of the launch, we had a mixture, a 50-50 mix of cardiologists and neurologists. Over time, we've seen more neurologists writing relative to cardiologists. Cardiologists are still a major writer for the product, but there's still more neurologists now over time. Part of that's because neurologists have become more comfortable with the product over time. They tend to be slower in prescribing new drugs, looking for more and more data as they now have generated that type of experience with the product. The other dynamic that's happening in the U.S. is we're seeing a lot of multidisciplinary teams becoming formed in major medical centers, where there is a cardiologist, a neurologist, a gastro, a hem/onc professional who are triaging their ATTR amyloidosis patients to make sure they get the right care. And so that trend, that dynamic we expect to continue in the U.S. as there's greater recognition of ATTR amyloidosis as a disease that is a multidisciplinary disease. And that's why the neurologists for the current label of ONPATTRO will probably continue to be the major writer of an ONPATTRO prescription.

Got it. Okay. And there's also another program out there. So Pfizer has got a stabilizer, tafamidis for the broader wild-type cardiomyopathy population. And that was approved in the United States last year and in the EU this year. How has the Pfizer launch impacted Alnylam in the United States and the EU?

Well, we've always viewed this disease as being a market growth opportunity, not a market share opportunity. And I think we're seeing that play out in real time. I mean what's going on, Maury, is that Alnylam is out there, improving disease awareness around hereditary ATTR amyloidosis. Pfizer is out there, improving disease awareness around ATTR amyloidosis very broadly. We're seeing an increasing recognition of the disease at major medical conferences all during last year and more virtually this year as well. And so physician awareness of the disease has gone up a lot. And patient diagnosis rates have also improved. Time to diagnosis has improved as well. And as a result, we're benefiting. So patients that are getting -- that have polyneuropathy where ONPATTRO is warranted, are getting ONPATTRO prescribed for the treatment of their polyneuropathy. And we're seeing a lot of mixed-use of both ONPATTRO and ATTR stabilizer, whether it's tafamidis or diflunisal. We're seeing a lot of mixed use, anywhere from 15% to 30% of our U.S. business is combination therapy at this point in time. And we expect that to grow to as much as 60% based on market research that we've done. And that's because many of these patients have a mixed phenotype. They've got both a wild -- they've got both a cardiomyopathy manifestation and a polyneuropathy manifestation and the labels for tafamidis and ONPATTRO are not overlapping.

Right. Right. I was just wondering if a wild-type patient progresses on stabilizer and has no other treatment option, can a doctor in the EU or U.S. get that patient ONPATTRO and can you get the drug reimbursed?

Well, if the patient has polyneuropathy, absolutely. And that's the dynamic that we see in Europe and Japan. Much of the business that we see in Europe and Japan is driven by tafamidis switches. Now part of the reason for that are the genotype differences that occur in the U.S. market versus the rest of world. The U.S. market is predominantly the V122I genotype, which is the genotype that predominates in African-American populations, and that has a cardiomyopathy predominant presentation. And yet 56%, based on studies out of Martha Grogan at the Mayo Clinic, of those patients have some underlying polyneuropathy, okay? So if a patient is in the U.S., has polyneuropathy, they're progressing well on tafamidis, they'll either get ONPATTRO for their polyneuropathy as an add-on, and potentially, the physician may choose to drop their tafamidis. That's up to them to choose to do, but they'll certainly get ONPATTRO added to treat the polyneuropathy. In Europe and Japan, where the predominant genotype is the Val30Met mutation, which predominates with a polyneuropathy phenotype, we're seeing a lot of patients that have progressed on tafamidis getting ONPATTRO for the treatment of their disease.

Got it. And just to clarify, are there patients that have polyneuropathy that don't have a mutation that can get treatment? Or do they have to have...

That have wild-type disease, that have polyneuropathy? That's an area -- yes, that's an area of increasing interest. We're not labeled for that, but there is increasing recognition of polyneuropathy in patients with wild-type ATTR. And that's an area of interest for us as well to investigate further and understand further.

Okay. Good. And do you have any patients currently on therapy?

Well, not that we know of, and it wouldn't be a labeled indication for the product. But I can't say that that's not the case at this point.

Got it. Okay. And just wondering for the drug, I don't know if you could talk about how many patients are paying out-of-pocket overall.

Yes. This is one of the great stories behind the ONPATTRO launch. Again, let's talk about the U.S. market. In rest of world, they're paying nothing out of pocket, as you know. But in the U.S., if you look at our out-of-pocket cost, 80% of our patients are paying 0 out-of-pocket. And the other 20% on average are paying $2,000 a year, okay? So being a Part B drug, and with the type of program that we put in place for patient assistance, we've reduced the burden of patient co-pays down to essentially 0. And that's been terrific news for patients. They're not burdened by -- economically burdened by receiving ONPATTRO, which is good. And that's one of the benefits of being a Part B drug.

Got it. And you commented in the past -- well, and we were just talking about some of the combo use and patients switching, too. I guess, how does some of the data that you're seeing from the combo use and the switching, how does that inform your plans going forward in the United States?

Well, I mean, there's not a lot of combo data that we have. We have about 20-or-so patients out of our original Phase II open-label study that were getting a stabilizer on top of ONPATTRO. And we know from those results that the 2 drugs can be given together safely. There's no safety signal that's emerged in a relatively small sample size. So we know that from a safety perspective, that can be done. As it relates to switching, well over 50% of the patients in the original APOLLO study had been on tafamidis and had progressed on tafamidis. So we have a lot of data around how effective ONPATTRO can be in patients that switched from tafamidis, and the drug has shown very nice efficacy and safety in patients that have progressed on tafamidis. But combo use is an area where there's relatively limited amounts of data to date, and most of the data really relates to safety. We haven't been able to see any discernible efficacy advantage. But we don't know if that's because of the fact that it's a relatively small sample size that we've been able to see in our original Phase II open-label study.

Got it. And going to the commercial estimates that you guys have put out there. So you lowered your ONPATTRO revenue estimates for 2020 due to COVID-19. Can you talk more about the impact of COVID on ongoing activities? And how are you bringing new patients and new markets online for ONPATTRO?

Yes. Well, I mean, we did lower our guidance by 5% for the full year. We went from $285 million to $315 million, to $270 million to $300 million as our guidance for ONPATTRO revenue for the year. We did also guide that Q2 would be the toughest period. That's the so-called pandemic phase that we're currently in the back end of at this point. We are seeing things opening up. And both in the U.S. and also rest of world, we're seeing countries opening up as well. So things are feeling like they're entering the recovery phase, where we do expect things to come back into the normal flow in Q3 and Q4 of the year. So while we do still expect Q2 to be weaker than we would have otherwise expected pre-COVID, we do think in Q3 and Q4, we'll see a nice pickup. And we're already seeing at the back end of Q2, some evidence of opening -- things opening up, which is quite favorable.

Got it. And just wondering, does your guidance incorporate potential for a second wave coming?

It depends on what you call a second wave. Is a second wave the type of shutdown that we've had just recently? Then that would be a different guidance, okay? Is the second wave an emergence of infections that requires some more testing and more isolation of cases with contact tracing? Then we account for that.

Got it. And do you anticipate pricing for your ATTR products could change once you get approved for the broader cardiomyopathy marketing opportunity? And how do you think about that?

Well, look, obviously, as we enter that broader patient population, we'll have to take a look at how pricing is currently set. And that, obviously, at that point in time, in a couple of years, 2, 3 years, we'll also be looking at how competitive products are priced at that point in time. So it's a little bit too early to say more exactly what would change. But I'll say this, one of the things that we did in the GIVLAARI approval is introduce this concept of a prevalence-based adjustment for pricing of GIVLAARI. GIVLAARI is in acute hepatic porphyria, and we know that the disease is very underdiagnosed relative to the true prevalence. And we price the drug as an ultrarare orphan product, but we've engaged with payers around a so-called prevalence-based adjustment, where if the number of patients in their plan increases a certain threshold amount, we will begin to decrease price of GIVLAARI. And that type of an innovative pricing model is something that we've internally thought about for ONPATTRO as we open up the wild-type ATTR opportunity, assuming APOLLO-B is positive as a study. And that's an approach we think would be attractive to use for the purposes of the product at that time.

Got it. That's interesting. And maybe moving on to your clinical studies. So if you could talk about the APOLLO-B trial design status of that program. And just with COVID 19 impact, do you still think you can show data in 2021?

Yes. Well, so APOLLO-B is a double-blind, placebo-controlled randomized study, where patients -- about 300 patients is the sample size, are randomized to get either ONPATTRO or placebo. And the primary endpoint is the 6-minute walk distance at 12 months. So it's a 6-minute walk distance study. It really is the fastest way we believe we can bring ONPATTRO into the cardiomyopathy setting, both hereditary and wild-type ATTR cardiomyopathy. And the study was enrolling quite nicely prior to COVID. Of course, with the COVID impact, enrollment did slow down quite a bit. And we expect about a 3- to 6-month delay on the overall program from the original time line. So the time line that we originally had of completing enrollment in 2020 is shifting into 2021, okay? So the data readout, given a 12-month endpoint, Maury, won't be until the 2022 time frame at this point in time. It would have been way end of '21 originally. So that's shifting the additional 3- to 6-month period.

Got it. Okay. And if you can provide an overview of vutrisiran and HELIOS-A trial, which is fully enrolled. And just, I guess, what is the latest with that one?

Yes. So just as a reminder, vutrisiran is our subcu follow-on molecule to ONPATTRO. It's given once a quarter subcutaneously. So it's got a very attractive dosing profile. That study -- the first study to get into market is HELIOS-A. HELIOS-A is an open-label study, where we are comparing the efficacy of vutrisiran treatment to the placebo arm of the original APOLLO study, very innovative design. And the mNIS+7 endpoint is the endpoint that we're using over 9 months of treatment. That study was fully enrolled in February. And right now, we are obviously well on its way to getting toward results in early 2021. We expect that to be on time. We're navigating the endpoint measurements that have to be done in a hospital setting is the mNIS+7 endpoint. We're navigating through the COVID period so that patients are still able to get to their endpoint assessment on time. We're doing a lot of the safety monitoring and laboratory monitoring more virtually in home for those patients. But we remain very much on track with that study to have results in early '21. And if that's positive, that would lead to an approval, hopefully, by the end of '21 for that product.

Got it. And is that going to be in a press release or in a medical meeting? Where should we be looking for that?

I mean, we'll do the top line in a press release and then have the full data presented at a medical meeting, depends on what meetings are in the vicinity of that period next year. There are a number of neurology meetings that would make sense for that product in the first half of 2021 to present the full data.

Got it. And for ONPATTRO or vutrisiran, is there a certain patient profile that you think would be better for either one of those drugs? Or will picking one versus the other be primarily about convenience or preference?

Well, I mean, look, there's no doubt that a once quarterly subcu product will be viewed favorably by patients. But there will be patients that are on ONPATTRO right now that have been getting the drug for quite some time, who don't view the infusion as being an inconvenience or a problem for them that will continue to get ONPATTRO. So we expect ONPATTRO to, even in the polyneuropathy setting, to be out there for the foreseeable future. And then on top of it, Maury, we're going to have cardiac data with ONPATTRO well before we have it with vutrisiran. So in the cardiac setting, we expect a lot of patients will get ONPATTRO for the treatment of cardiomyopathy, assuming APOLLO-B turns out as we hope and expect to be positive. So both products will coexist. We do expect that new patients with polyneuropathy will likely go on to vutrisiran versus ONPATTRO. There also might be some geographic differences in terms of how we introduce the products and the timing for how we introduce the products as well. But those are nuances that we don't need to get into right now.

Okay. Okay. Interesting. And maybe moving on to GIVLAARI. It seems to be off to a strong start commercially. Maybe if you could provide a status update with the launch.

Yes. So just a quick reminder, GIVLAARI is a medicine for the treatment of acute hepatic porphyria. The results out of the ENVISION Phase III trial showed an impressive over 70% reduction in the attack rate that these patients suffer every year. We got a wonderful label from the FDA, well ahead of schedule in November of last year, and the launch has got off to a great start. We had $5.3 million in Q1 revenues, which certainly exceeded our internal estimates as well as Wall Street consensus as well. And we're really pleased with the uptake that we're seeing. Now we've launched -- just now launched in Germany, and in other countries in Europe. We just starting -- we're just starting now our ATU in France, and we also have named patient sales in other countries in Europe as well. So we're seeing growth in the U.S. We're seeing new markets opening up in Europe. And we very much expect to leverage the execution that we showed with ONPATTRO for GIVLAARI and make this product a very successful product.

Can you go into a little bit more details on that on leveraging ONPATTRO, what you've built there? And then I guess, how that fits into the company bigger picture as well. And I think you've mentioned before too that with GIVLAARI, the start forms are much quicker now. So if you can provide any more specifics?

Yes. That was a great question. We are leveraging a lot of the global commercial infrastructure that we've built already for ONPATTRO to launch GIVLAARI globally in countries around the world. A lot of that relates to the marketing infrastructure that we built, the finance infrastructure that we've built as a company, the supply chain infrastructure that we built as a company. And all of that can be leveraged effectively for GIVLAARI as well as for lumasiran, which I'm sure we'll talk about in just a minute, our third product that we'll launch shortly. But in the case of -- now where we do have to add on something different is field teams, right? So we have a small field team that's dedicated to GIVLAARI that we've added on, we've built on in the U.S., and we're doing that country-by-country in Europe when we get reimbursement in Europe. So there is some incremental, but relatively small incremental adds that we put in place for the purposes of the GIVLAARI launch.

Got it. And we're kind of -- we're running out of time. So I'm going to ask a quick one about AGT. You showed some impressive data recently. This could be a large market opportunity. How do you envision next steps with this program?

Yes. Well, we're really excited about this program, Maury, because it already in a Phase I has demonstrated efficacy against the primary endpoint that will be used in a Phase III. So we know that just like our inclisiran story with the Medicines Company and now Novartis, transitioning from where we are today into our Phase III program is really all around safety data as well as differentiation, getting the right differentiation of the product in the space. But what we've seen is an over 10-millimeter mercury reduction in systolic blood pressure with the durability that we think supports at least a once quarterly subcu injection, but probably less frequent. I think that every 6 monthly is completely achievable from the data that we've seen at this point in time. And we're seeing over 90% reduction of angiotensinogen. We're going to present the full data likely in the second half of the year hopefully, at the heart meeting depending abstracts getting accepted. That will be in November. And then we're transitioning into Phase II and doing a lot of working out a plan for the Phase II program that will start in 2021. That program will be a relatively robust Phase II program. It will be north of 500 patients in total as you'd expect for a large market opportunity like this. But that will position the drug to start a Phase III program that we would likely start in the 2022 time frame for that product.

Got it. And for lumasiran. So you've got ILLUMINATE-A data coming up at ERA-EDTA.

Next week.

Set expectations for that? And how this program fits into the big picture at Alnylam?

Yes. So lumasiran is our third product that we're likely going to bring to market. It's a product for the treatment of primary hyperoxaluria, which is an ultra-rare orphan disease. Typically it affects kids due to excessive oxalate production and recurring kidney stones that leads to end-stage renal disease. We have positive top line data that we reported in December. We're going to present the full data just this coming Sunday. And the primary endpoint is the reduction in urinary oxalate levels. And clearly, anything over a 30% reduction of urinary oxalate is clinically meaningful. And so we'll see how that shows up in the full data that we present on Sunday. And also the other key endpoint that we are going to report on is the number of patients, the proportion of patients that achieve a near normalization or normalization of urinary oxalate because, obviously, if you can normalize urinary oxalate levels, you've essentially reduced any risk of disease in these patients. And so we'll report on those data as well. Again, anything over a 50% reduction in near normalization -- or near normalization would be a tremendous result. And then, of course, safety is important, and we'll report on safety on Sunday as well. So we look forward to the data coming up. And if all goes well, this will be our third product that we commercialize. We have a December 3 PDUFA date. The FDA has given us a priority review for the product. They've said no need for an adcom as a product, and they're obviously impressed with the data they've seen so far.

Great. John, there's a lot we didn't cover in the pipeline that we didn't get to. I guess, maybe closing remarks, what are key events ahead that investors should be focused on?

Well, I mean, just this coming Sunday, we'll have lumasiran Phase III data. So I think that's worth taking a look at. We talked about the hypertension program and data.