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

Good morning, and we're continuing actually the presentations here at this year's Global Healthcare Conference. I'm Mani Foroohar, a senior analyst covering drug medicines here at SVB Leerink. I'm very fortunate to have Yvonne Greenstreet joining us from Alnylam. Yvonne, how are you doing today?

Yes. Good morning, everybody. Delighted to be here. We had a year of incredible performance at Alnylam in 2020. Commercial performance was great, delivered $306 million of global net product sales from ONPATTRO with 1,350 patients. And we're pleased with our innovative approaches to access. We've got 98% coverage of lives in the U.S. GIVLAARI also did really well. First full year sales, $55 million, 200 patients. And again, great access, 94% in the U.S., but also sales in Germany, ATU in France and some other name patient sales And OXLUMO was launched. It got approved in November. It's off to a great start. We've got -- had 8 start forms in the U.S. with $300,000 of revenue, very early in the stage of launch, obviously. And then delighted with the progress in our clinical pipeline as well, especially the sort of 2 important cardiomyopathy studies, APOLLO-B from ONPATTRO, completing enrollments in early 2021 with top line in mid-2022. And then, of course, HELIOS-B for vutrisiran. That study is progressing well. So as we look back on the year, I feel really pleased about where we landed. And of course, we exceeded our Alnylam 2020 objectives and are looking forward to 2021.

That was definitely a remarkable year for Alnylam and for everyone globally.

Yes.

Let's talk a little bit about where you guys are at the company. I think one of the common questions that I get from investors is around your approach to guidance, going from a single commercial asset company to a multi-asset company with partnered, presumably meaningful partner revenue from Novartis, et cetera. Give us a sense of how you -- what your philosophy around product guidance is? And how that's evolved over the last years.

Yes. No, that's a really good question. Just to provide some context for the audience. We've guided for full year net product revenues of $610 million to $660 million. And obviously, this includes our expected 2021 revenues from ONPATTRO, GIVLAARI and OXLUMO. And one thing that's probably worth pointing out is at the midpoint of this guidance range of $635 million represents 76% growth when compared to the $362 million that we achieved I've just been talking about in 2020. In terms of our philosophy around guidance, we're not going to be providing full year guidance on a product-by-product basis. As we've grown as a company, we're now a multiproduct global organization. And we think it's a good time to transition to providing combined product revenue guidance. And this is what many other multiproduct biopharma companies do, companies like Vertex, like Gilead. So we think this is the right direction of travel for us. But of course, on a quarterly basis, we'll continue to report individual product revenue and give the color that we always do in the calls that we have.

That's helpful. So I guess in that same vein, zooming out a little bit. Walk us through how we should think about P^5x25. I've been calling it P5 by 25 because it looks that way on your presentation. How do you -- what assumptions are baked into that? Where is the -- where are there opportunities to outperform even those projections? And what you guys learned from your experience with your 2020 goals that you exceeded? And how that informed the process of putting together this sort of implied long-term guidance and vision?

Yes. That's a great question. And just to remind the audience, actually that we've got a decades-long history of coming up with a 5-year guidance. So I'm pleased to say that with each set of guidance that we've committed to, we've actually exceeded our objective. So we take how we construct 5-year guidance very thoughtfully. Just to remind everybody what we said would be in our 5-year goals, which, as you mentioned, we're calling P^5x25. And they're focused on 5 categories: patients, products, pipeline, performance and profitability. So we're planning for over 0.5 million patients on our Alnylam therapeutics globally. That includes our partnered products as well, 6 or more marketed products in rare and prevalent disease indications. And importantly, one of the directions of travel for Alnylam is as we've demonstrated the robustness of our technology in rare diseases we feel much more emboldened to think about some larger indications as well. Very rich pipeline, over 20 clinical pipeline programs, 10 or more in late stages and 4 or more INDs per year. And we can commit to this because of the robustness of our platform. We're benefiting, I think, from all the investments we've made over the last couple of decades and really optimizing this technology and our success rates really quite impressive when you compare them to the industry average from an attrition perspective. So we think that this is something we can definitely aim for. And then we know that it's important, our stage of company, to grow revenues. So a greater than or equal to 40% revenue CAGR through year-end 2025. And yes, we do intend to achieve sustainable non-GAAP profitability within this 5-year period. And all of these different parameters, we thought about quite carefully in terms of how we look at resource allocation, how we think that the commercial opportunities for our products can unfold. And importantly, when we think about profitability, there are just a couple of levers, right? It's top line revenue growth and the investments that we make. And we think we're in a unique situation as a company to have had this rapid succession of product launches. I don't think there are that many biopharma companies are able to speak to 3 product launches in less than 3 years. And obviously, this is going to be a big driver for our revenue opportunity over the next several years. And you pointed out, there's also opportunity for royalty revenue from our partners. We have 2 great -- many great collaborations with Regeneron; with Vir; with Sanofi; and more recently, with the Novartis Company. And with Leqvio's recent approval in Europe and hopefully not in the too distant future, in the U.S., we do anticipate growth in royalty revenue going forward. But for 2021, we are sort of assuming about $150 million to $200 million of collaboration revenue. So I think some really exciting opportunities for us from the revenue perspective. And then, of course, from the expense perspective, we are very disciplined about our investments. We have a lot of opportunity in our company to move programs forward, both in the pipeline and also to ensure commercial success in the marketplace. And we really have been quite thoughtful about this. And I think what's been clear is that we've been able to improve our operating leverage over the last 3 years. We put quite a lot of investments into our global commercial infrastructure. And now with just a number of products that we're being able to bring to patients, we're really beginning to see the benefits of this play through. And the other thing that I think we're quite proud of is what we've said for a while now, which is that 2019 would be our peak non-GAAP operating loss year. And since then, we've seen those operating losses continue to decrease. So I think given our set of revenue opportunities, both fully owned and commercialized products as well as the partnerships that we have and the approach that we've taken to ensuring getting -- maximizing our return on investment on our investments, I think we're in a really, really, really good position, and I'm very excited about this next chapter.

And as we think about the next chapter for the company, obviously, a lot of growth thus far has been driven by the first couple of generations of delivery in the liver, a lot of discussion around expanding RNAi, and [ algotherapy ] more broadly into other target tissues. You talked about the Regeneron collaboration. How should we think about the tempo of which we'll get further insight into your targeting of other tissue types? And should we look to a general collaboration as [ archytypical ] of what your approach would be? Or is that very -- or is that more unique? And as you move into different tissue types, there are likely to be less partner value, retained more internally in a complete way?

I mean, look, that's a great question. I think the first thing to say is that we're very excited by the continued opportunity that we have in the liver. There is no shortage of exciting targets for us in the liver, and we're going to continue to progress those programs and bring them to patients. We've clearly had a great track record in doing this over the last several years, and we don't see us running out of liver targets in the foreseeable future. Having said that, we really do think that the potential for of RNAi in really a broad range of diseases is enormous, and we're still in the very early stages of unlocking these opportunities. But as you said, we're also -- we're doing well in terms of accessing additional tissues. So with the Regeneron collaboration, the CNS and I -- important to say is that we retain 50% of the opportunity in the CNS, and we intend to take some of those programs forward. And obviously, Regeneron will take some of the programs forward as well, but the economics are shared. So that is incredibly attractive from a growth perspective. And also the lung. You may be aware of the history of Alnylam with an RSV program several years ago. And then more recently, some progress with respect to a COVID program, really, I think, again, confirming the opportunity to deliver RNAi to lung tissues. And actually, when we look across the pipeline, we've got around 15 programs that are underway across these 3 additional tissues. And of course, all the lessons that we've taken from our experiences in the liver can be applied to some of these extrahepatic tissues as well. So really exciting. I mean, I'm particularly excited about the opportunities in CNS as huge medical need. The platform that we have with likely efficacy. And very importantly, when you're thinking about CNS disease as an intrathecal administration, I think the durability that we have that could lead to very frequent dosing, I think, is going to be really important in the CNS arena. And you probably know that our first CNS program for clinical developments is ALN-APP for the treatment of early onset Alzheimer's disease. And we're on track to file a CTA for that middle of this year with some clinical POC data next year, which is -- which we're all looking for forward to. And that could open up a whole panoply of additional CNS opportunity for the company and for patients. So lots going on. And our challenge, of course, is ensuring that we prioritize the most exciting opportunities that we resource the programs that we feel have the highest chance of success and the greatest impact for patients. And as we move forward along this journey, we will, for sure, update folk around our progress. And I can talk a little bit about the Regeneron partnerships. I think people are very interested to see how that's going. I'm really excited about the collaboration. And I was obviously very involved in shaping the contours of the agreement. And it really is, I think, proving to be exactly what we'd hoped it to be at the outset. We're very happy working with Regeneron. They're a very science-focused company. Just like us, they're very committed to advancing important therapeutics. And they have a lot of expertise from the Regeneron Genetics Institute, which is proving helpful. So we're very, very pleased with kind of where things have progressed, and we've got around a dozen programs that we're actively working on as part of the collaboration. So that's where we are. And I think I've talked about AI and APP, and I think that's going to be a really important defining program for us as we think about our opportunity in CNS.

That's helpful. I think I have a little bit of a narrower question one that came in from the investing audience. When you -- how do you think about the COVID impact on recruitment in sensitive patient populations, elderly comorbid, et cetera, elevated risk? And what is the potential impact of re-acceleration recruitment on your announced time lines with rollout of multiple COVID vaccines? And how do we think about the impact that different levels of broad vaccination have potentially accelerating your clinical trial pipeline in some of these patient populations. APP might be one, for example.

Yes. So look, as with most companies, in 2020, when the pandemic first hit and health care systems were really kind of reeling in terms of how they responded to the crisis, we saw a slowdown in our clinical trial enrollment efforts. I have to give a shout out for our team who did, I think, a phenomenal job responding to that and putting in place approaches that allowed those clinical trials to continue in terms of home monitoring, in terms of reducing the number of visits and really supporting patients to stay in clinical trials. But yes, there's no doubt that there was some impact. We're delighted that, that really seems to have turned the corner, and enrollment has picked up. And we think that we're confident that we'll be able to deliver to the timelines that we have shared externally. So for our important cardiomyopathy studies with APOLLO-B, we've indicated that we should be completing enrollment early in 2021, which obviously give us top line data in 2022. As I said, HELIOS-B is going very well. We're going to be kicking off our cardio A and cardio B studies for ALN-AGT for hypertension. So I think we have evaluated how we think that the general health care system is going to unfold. It obviously has different impacts in different parts of the world. So the U.K., for instance, which has done a phenomenal job with respect to vaccination, we've really seen that part of the world more or less return to some semblance of normality, whereas other parts of the world are facing much more challenging times. But hopefully, as vaccine rollout takes hold, we'll start to see improvements more generally. I have to say that it is one of the benefits of having built a global infrastructure here and that we're not -- we have a presence in many countries around the world, and this allows us to kind of be very thoughtful about how we think about our clinical trial recruitment. So I'm actually increasingly optimistic, but nobody wants to call this pandemic at this point in time. So we'll keep fingers crossed. And we hope that the health care system has been able to figure out in the U.S. how to work reasonably effectively through the ongoing pandemic. So I'm hopeful. I'm hopeful, but we're not quite there yet. So let's keep fingers crossed that as we get through the summer and more and more people get vaccinated. We'll start to see the pandemic truly recede without the threat of further waves.

And that makes sense. Let's pivot to NASH. So we're looking to have data from your HSD program. There is some compelling genetic evidence, but some initially out of Regeneron -- from Regeneron actually with a different modality, but in the academic culture as well from various labs. And the challenge on NASH for a lot of players, admittedly with perhaps less innovative approach than an RNAi approach, has been clinical development and what regulatory pathways and what endpoints you look at. So it's perhaps a little bit less clear and linear of an extrapolation from knockdown to whatever endpoint regulators that we're comfortable with than it is in very rare diseases, for example.