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

Good morning, and welcome to the Morgan Stanley 18th Annual Global Health Care Conference. I'm one of the biotech analysts here. My name is David Lebowitz. Before I get going, I'm going to do the requisite disclosures. Please note that the webcast is for Morgan Stanley's clients and appropriate Morgan Stanley employees only. The webcast is not for members of the press. If you are a member of the press, please disconnect, and reach out separately. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. [Operator Instructions] I'm happy to have here, for our next session, wearing my mask for this session, is CEO John Maraganore from Alnylam. Always happy to have John here. And I guess, just to start off, if you could give us kind of the top level rundown of what's been going on with Alnylam for the last year.

Thanks, David, and good to see you. And I'm also wearing a mask here in the office, which is our requirement. Alnylam is, as you know, the leading RNAi therapeutics company. We have emerged now as a multiproduct global commercial stage company with two products on the market. A deep pipeline behind it, a robust product engine delivering sustainable innovation. And excitedly, we're, hopefully by the end of the year, going to have two more products that get approved. So we'll end the year with four products on the market, fulfilling our Alnylam 2020 strategy, and continuing to execute not only on our commercial performance, but also on our pipeline activities and growth as a business.

So the first drug approved for Alnylam and then, frankly, the first approved for this entire class of drugs, RNAi, is ONPATTRO. And ONPATTRO was approved in August of 2018. I guess how has the market evolved from that point, where, frankly, it was a relatively new market to this point where there's several competitors that, while not necessarily all in the same area of the TTR amyloidosis market, there's a lot more activity going on?

Yes. Thanks, David. Well, actually, it's pretty exciting that it's just been over 2 years since ONPATTRO was approved as the first RNAi therapeutic ever approved. And also the first medicine approved in the U.S. market for the treatment of hereditary ATTR and specifically patients with polyneuropathy. So we're labeled for the treatment of the polyneuropathy and hereditary ATTR amyloidosis. And I'll highlight 4 dynamics that have emerged over that 2-year period that I think are worth commenting on. First of all, there's been pretty substantial increase in disease awareness for ATTR amyloidosis, overall, and importantly, for us, for hereditary ATTR amyloidosis in patients with polyneuropathy. And a lot of that improved disease awareness has come from the promotional activities and medical education activities from multiple players that are now in the market, and I'll touch on that in just a minute. But the other dynamic that's been very important is the emergency PYP scans for diagnosis of cardiac amyloid, which often leads to the diagnosis of polyneuropathy in these patients as well as genetic testing availability, which has also increased as well. So clearly, that's been a substantial change over the 2-year period that we've seen, certainly in the U.S., but also more globally. The second point is that hATTR amyloidosis is now considered to be one disease. When we started back in 2018, there was this concept of familial amyloidotic polyneuropathy, or FAP, and familial amyloidotic cardiomyopathy, or FAC. People now understand that this is really one disease caused by one disease-causing protein, namely TTR in the case of hereditary disease mutations in the TTR protein. And importantly, it's increasingly recognized that patients with either one or the other predominant manifestation as the primary disease manifestation often has the other. In fact, over 50% of patients with cardiomyopathy, for example, have been documented to have polyneuropathy. And that change in understanding and understanding of the disease, but understanding of what to look for, has been very, very important to the market. Third point is something you mentioned earlier. While we started it first in the market, now there are 2 other approved drugs in the U.S. market. Of course, when we got approved in the rest of world, the drug tafamidis was already approved in most of the rest-of-world markets. But now we are in a multi-product landscape. And importantly, I think what we've seen, and we've been saying this for quite some time, is that this is not a market share story, it's really a market growth story. And we've been seeing market growth even with the availability of a number of different products. And finally, outside the U.S., I want to highlight the fact that tafamidis progression is viewed as being a major feature. Many of our patients outside the U.S. come on to ONPATTRO because they're -- they've been identified as progressing on tafamidis. And the other dynamic in the U.S. market, which is notable, is the use of concomitant therapy, which is often happening in the U.S. market specifically.

So one of the characteristics about ONPATTRO is that it's very effective, but it's also given via infusion. And it certainly enjoyed strong growth since launch. But the fusion aspect, given the COVID environment, does have an impact. Could you elaborate on that?

Yes. Well, maybe I'll start by just reminding you and the audience that back in our Q1 call in May, we outlined our framework for thinking about the pandemic as Q2 being the pandemic phase, Q3 being the recovery phase and Q4 being the new normal and beyond that being the new normal as well. And we did, also in the Q1 call, guide that we expected weakness in our ONPATTRO sales in Q2 related to this very point that you're bringing up, specifically the need to shift site of care for patients. And that happened globally, not just in the U.S. but also in Europe. And that was an important change that resulted in some missed doses that occurred in Q2 and some need to -- due to the site of care change, obviously, adjust for the patients. But we're now through that, and we were really pleased ultimately with the performance that we saw in Q2, which certainly beat our internal expectations, but also the internal -- external expectations as well. Now with home infusions, we've seen that increase during the pandemic. We think that it will stay sticky. After the pandemic, the infusion rates have gone up in the U.S. to about 17% at this point in time and in Europe, to about 35%, in Europe. So it's a substantial increase in the number of patients that are now getting home infusion on ONPATTRO.

Should we expect the home infusion rates to go up, not just as the pandemic increases, but even once the pandemic concludes?

Well, I think that's still unclear. I think the pandemic was a clear driver for the move to home infusion, and how much as the pandemic now enters into the recovery stage and the new normal, I think it's still unclear, David, how that will change.

Now there's several competitors in the market. And I guess one of them is Pfizer's drug. Now technically, you're not really competing for the same part of the market right now. But in practice, how are physicians using it? I mean in theory, a stabilizer can be used with RNAi.

Yes. Well, it depends on the market. So if we just start with the U.S., okay? Tafamidis is approved for the treatment of cardiomyopathy in both hereditary and wild-type ATTR, and ONPATTRO is approved for the treatment of polyneuropathy and hereditary ATTR. So we have nonoverlapping labels in the U.S. And what we see is that, obviously, many patients are being treated with tafamidis appropriately, especially wild-type patients where we don't have a label at this point in time, and we don't have for cardiomyopathy either. But for wild-type, it's a distinct segment that we don't have any usage in that we're aware of. And -- but what we do see in the U.S. market is some patients are being treated with both agents, with both a TTR stabilizer, which could be, by the way, not just tafamidis, but also Ethylanisole and ONPATTRO. And they're given ONPATTRO if they have polyneuropathy symptoms. What's encouraging is that we've seen continued reimbursement of ONPATTRO even when given together with other TTR stabilizer drugs, okay? Now in rest of world, we don't -- we see a different dynamic. We don't see a lot of concomitant use taking place in the rest of the world. There's probably some, but not a lot that we've seen. What's happening in the rest of world is we're seeing more of a tafamidis switch approach, where patients are progressing on their stabilizer, and they're coming on to ONPATTRO because of the data that we've generated with ONPATTRO showing the ability to actually achieve reversal of disease.

You had indicated that typically about 50% of the patients come from cardiologists. But the label is not for cardiomyopathy. Obviously, these patients must have some level of polyneuropathy. But what is it about the cardiologist office that makes it so they're so successful in finding these patients?

Yes. Again, this is also different by region. And I'll remind everybody that in the U.S., the predominant number of hereditary ATTR patients have the so-called V122I mutation, which is a cardiomyopathy -- primarily a cardiomyopathy mutation from a phenotype perspective, okay? And -- but what's happening in the U.S. market is these patients get identified, they have a genetic cause. And then typically, multidisciplinary teams will assemble within medical groups to assess other symptoms or other features of the disease, including polyneuropathy, both sensory motor neuropathy, but also autonomic neuropathy. And cardiologists often are the prescribing physicians for the treatment of the polyneuropathy and the prescribing physicians for ONPATTRO and they do account for roughly 50% of our prescriptions in the U.S., maybe a little bit less than that because there's some other disciplines as well, but they do account for that. And so they're prescribing the ONPATTRO for the treatment of the polyneuropathy that they feel comfortable evaluating directly themselves or with the neurology console as well.

Now you are studying it in cardiomyopathy in the APOLLO-B trial. What's the status?

The status of APOLLO-B is that it's enrolling. Just as a reminder, it's a double-blind, randomized, placebo-controlled study of ONPATTRO, where we have a 12-month endpoint with the 6-minute walk distance, specifically. And the study did, like at all clinical studies across the industry, run into some headwinds during the Q2 period. But we very nicely have seen recovery of enrollment happening in Q3. And the original goal was to complete enrollment in 2020. But in Q1, we pushed that goal into 2021. So we do expect to complete enrollment of APOLLO-B in 2021, and we're doing everything we can to make up for any lost time that we had during the pandemic. But we're excited about the study. It's an important study because it opens up ONPATTRO into both the hereditary cardiomyopathy setting, where we have encouraging exploratory data, but also into the wild-type ATTR setting, which, of course, is a very significant market opportunity.

Now the follow-on is vutrisiran. And that's being studied in both polyneuropathy and cardiomyopathy and also wild-type. Could you, I guess, elaborate on the differences between the molecules and on those studies as well?

Yes. Well, vutrisiran is an ESC GalNAc-conjugate molecule, so it uses our GalNAc-conjugate platform. And what's important about that is unlike ONPATTRO that requires infusion, that enables subcutaneous administration for vutrisiran. It's being evaluated as a once-quarterly subcu injection. But very recently at our RNAi Roundtable, we showed very important data, which we're now acting on that enables potential once every 6 monthly subcu injection, something which obviously could be very important in terms of a patient treatment option that would be, I'm sure, very favorable for them. It's being evaluated broadly across the spectrum of ATTR disease, both for hereditary and wild-type ATTR using either polyneuropathy, which is in our HELIOS-A Phase III study, or cardiomyopathy, which is being evaluated in our HELIOS-B study as the different phenotypes and segments that we're assessing with vutrisiran. When we think that vutrisiran, given as a once quarterly or even once every 6 monthly subcutaneous injection, would be a very attractive profile for a product in this important market.

What happens at some point in the future if vutrisiran is successful and it's on the market at the same time as ONPATTRO?