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

Hi, everyone. Welcome to the Cowen Healthcare Conference fireside chat with Alnylam. I'm covering analyst, Ritu Baral. And with us today is CEO, John Maraganore, who I'm sure most of you, if not all of you, already know. Thanks, John, for joining us today.

I guess we -- let's kick it off. I think most of the folks who've dialed in don't necessarily need to level set. You've already reported the quarter. You did really well for -- I mean, let's just start there. ONPATTRO is doing really surprisingly well for every 3-week IV drug during COVID when people don't really want to go out or go into infusion centers, et cetera. What do you believe -- what does your marketing team believe is driving this? And is this -- we're a couple of years out from launch at this point. Is this sustained? Like is this despite COVID headwinds? Or are there no COVID headwinds for this product?

Yes. Well, Ritu, let me just start by thanking you for inviting me to come and do a fireside chat. Your meeting last year was my last physical meeting for many of us probably as well, so it's good to relive this in a more virtual way. Look, I mean, 2020, obviously, because of COVID, was a remarkably tough year in general, but we're very proud of how our commercial team globally was able to continue to execute ONPATTRO, and you know the numbers. I mean, we're approved in polyneuropathy and hereditary ATTR. We achieved $306 million in revenues. We had about 1,350 patients on commercial drug at the end of last year. Patient demand in Q4 increased 13% over Q3, which we're really proud of, and patient compliance remained very high, over 90%, during the course of the year, which really is impressive. So the question...

Yes. And i think John...

The answer is why did it do so well -- yes. Sorry -- yes.

Right. That 13%, while COVID was -- the COVID -- 13% fundamental demand while COVID was doing this for an IV therapy that's been out there for a couple of years, I haven't seen that nor have my colleagues at Cowen. So can you help us dissect that demand a little bit?

So -- absolutely. So part of it is we've got an amazing patient services organization that was able to -- in Q2, was able to adjust patient side of care, in some cases, the home infusion, and I know we'll talk about that later. But in other cases, to just local infusion site, so our patient services organization did a great job. And obviously, we're really happy about that. The other thing is we saw the health care system in Q3 and Q4, and in Q4, in particular, where the rates -- COVID rates were going up, we saw the health care system remain pretty adaptive during that period of time. They just didn't shut down. Patients were still getting treated. But the other parts of this that I think are really important is, number one, hATTR is a severe life-threatening disease like cancer, and so there's a real urgency by patients and health care professionals to get treated with a drug like ONPATTRO. And then on top of it, ONPATTRO is really a very transformative medicine, and it provides symptomatic relief to patients. And so they feel better when they're on ONPATTRO. We get -- we have those data from our APOLLO study clinical results. We also hear that in the field all the time. And so when you've got a severe life-threatening disease with a drug that's providing symptomatic relief for patients, you're going to have high adherence and high commitment to the product, which is, of course, manifest by the adherence rates being over 90%. So I think all of those factors played a major role in why we were able to be successful in Q4 and in 2020, overall, relative to what other products might have experienced.

Okay. Just for folks out there, if you guys have questions, please feel free to e-mail me at [email protected]. One of my clients already e-mailed me going, why are you mad at him. You haven't outperformed? No, no. I'm not mad. It's just -- it's so surprising. Let's put it this way. Let's just put it that way. But let's talk about home infusion reimbursement. I mean, that was one of our big fears within my team at Cowen when COVID sort of rolled on. And now as COVID -- we might be in a -- hopefully, the COVID off environment in the second half, will those allowances for home infusion, especially in public plans, stay? And if so, are they permanent?

Yes. Well, I mean, obviously, we did a lot this past year in converting and getting patients to be able to include the home as an infusion site. In the U.S., we ended 2019 with 9% of patients on home infusion, and we ended 2020 with roughly 20%. In Europe, we went from 17% to about 36% by the end of the year. And in Japan, there's no home infusion. Unfortunately, there's no ability to do it. But to your point about the public plans, Medicare, in particular, they did put some rules in place during the pandemic that allowed patients to get home infusion through Medicare. It's a bit of a clunky system to be clear, and we continue to work with Bio as well as directly with CMS to make sure that home infusion can remain an option for patients on Medicare. So we continue to do that. And obviously, that is a priority on the policy side of what we've been doing. For our commercial patients, we've been able to get a significant number of patients on home infusion, and that's obviously been a very attractive venue for receiving ONPATTRO. But don't forget, a lot of patients still like going to their infusion sites, which don't have to be in a hospital. That could be in a local infusion center. And they've developed relationships with the nurses and developed relationships with their patients. And so oftentimes, going to the infusion site remains the preferred site of care for many of our patients. And of course, for them, they're not interested in home infusion. So they get the benefit of going to those infusion sites.

Got it. Okay. So congratulations on your recent HELIOS-A data. The -- I guess, the expectation is that you're going to file that NDA really, really shortly for polyneuropathy. Do you think that drug, vutrisiran, is less frequent dosing will grow the market opportunity for TTR polyneuropathy? Yes. Just because...

Yes, we do, and let me tell you why. But first, real quickly, just a reminder for the audience. So HELIOS-A, randomized, open-label study, 164 patients with hereditary ATTR, polyneuropathy, primary endpoint mNIS+7. We hit the primary endpoint with a really small p-value, with a lot of zeros after the decimal point. We also hit both secondary endpoints in the study that we measure at 9 months. So very robust results, and we'll present those data at the AAN Meeting in April, and we're excited -- we'll be excited to present those data. I think you'll be happy to see them. And then on top of it, to your point, we'll be filing the NDA for vutri as a once quarterly subcu injection very shortly. Now yes, we do believe this will grow the opportunity, and let me tell you why, okay? First of all, a once quarterly subcu drug, okay, with no pre med is going to be a very welcome treatment option for patients with hATTR polyneuropathy. It will continue to be HCP administered, so it will be continue -- it will continue to have the benefits of Part B in terms of very low patient co-pays, especially for the Medicare patients on supplemental plans, they basically have 0. And then on top of it, for physicians, there'll still be the opportunity for physicians to use a buy-and-build practice to administer vutrisiran. So we think for that reason, it will be a very attractive option for patients. The second point is it obviously has a lower treatment burden compared to ONPATTRO. And as a result of that, we do expect that it will be used more in mixed phenotype patients with or without a concomitant TTR stabilizer for the treatment of polyneuropathy, of course, but the benefit of the fact that it's a relatively easy treatment option product for mixed phenotype patients, I think, will support increased use in that segment of the population. And then a third point here is the lower treatment burden will also support easier decision-making by HCPs when they have a patient who's progressing on TTR stabilizer. The decision to switch them onto vutrisiran should be a far easier decision than going on to a drug like ONPATTRO, which is an IV infusion. And then, of course, finally, the other area of growth is that a drug like vutri will be widely adopted by any patient, we don't have that, but any patient on inotersen will obviously very readily switch on to vutrisiran as well. So those are all the reasons why we expect, in just the polyneuropathy segment alone, to see a lot of growth for vutrisiran above and beyond ONPATTRO.

So curiously, and this is something that I haven't modeled at all, you're mentioning that 50% of those patients who progress, maybe I'm not saying precisely that, 50% of patients who progress don't seem to switch. They seem to be on both. You're seeing combination treatment of ONPATTRO plus a stabilizer. What -- like what are the mechanics of that? Because I think most people never modeled it because they were assuming that the cost would never be borne essentially by payers or the doctors. I guess, KOLs wouldn't even try. So can you talk about the drivers behind that much, much, much higher-than-expected combination therapy rate?

Yes. It's actually north of 30% right now in the U.S., but it's important that we -- that my answer to this question, number one, starts with a very clear statement that in all cases, to our knowledge, ONPATTRO is being used to treat polyneuropathy, that's number one. And number two, it's very important to make it clear that there are differences between the U.S. market and the rest of the world, okay? So for example, in the rest of world, we don't see a lot of concomitant use exactly for the reasons you stated, which is the economic considerations, okay? And what we do see in the rest of world, there's a lot of switching from patients that are on a stabilizer drug to get onto ONPATTRO because they're progressing in their neuropathy, they're then put on to ONPATTRO. We also see a lot of patients that are naive to any treatment coming on to ONPATTRO as the first treatment option. That's in the rest of world. In the U.S. market, where there's a lot of patients with the V122I genotype, where many of those patients have cardiomyopathy on top of polyneuropathy, that's where we see the combined use of both agents for treatment of polyneuropathy with ONPATTRO and for treatment of the cardiomyopathy with the TTR stabilizer drug. And remember, Ritu, the -- these 2 drugs have nonoverlapping labels in the U.S., okay? So for those reasons, that's why you're seeing concomitant use, and you're seeing reimbursement occurring by the payer community as well.

Okay. Right, right. I think many of the investors are sort of getting ahead of ourselves, and the KOLs say you're going to have a label at some point, so we assume you have a label now.

We don't have one now.

You don't have one now. But speaking of that data, your cardiac subset from HELIOS-A, will we get like proBNP at AAN? Or is that going to be later this year with the 18-month data?

Yes. We'll show you the 9-month NT-proBNP data at AAN because we think that's -- obviously, it was a 9-month endpoint, and we'll share that at that time in April.

But not the 10-month.

Yes. But I'm very excited about the 18-month data because not only will there be more NT-proBNP data, but there will be substantial additional data, including echocardiographic data and, perhaps, most interestingly, serial PYP scans. So patients -- a good number of patients at baseline will have had PYP scans. And then after 18 months of treatment, there'll be another PYP scan. And we'll be very interested to see if we can find evidence for cardiac amyloid regression, which has been reported in -- by Fontana, et al, in JACC for ONPATTRO in a case series study done with ONPATTRO. So it will be very interesting to see if that could be reproduced with vutrisiran as well. And all of those data will be presented in the second half of the year at a forum TBD.

Okay. But the 10-meter walk will only be at the 18-month. It will not be at AAN.

So there'll be 10-meter walk time data at AAN because it's one of the secondary endpoints at 9 months. And then there'll be more 10-meter walk time data at 18 months as well. And to your point, obviously, 10-meter walk time, which is also referred to as gait speed clinically, it is obviously going to be very interesting as a potential relevant measure for 6-minute walk as well.

Yes. Got it. What is good data on the 10-meter walk as we think about -- the 9-month data and the 18-month data, like, we're all used to 6-minute walk, and we don't even like that. How to think about 10-meter walk?

Yes. Well, I mean, look, I think good data is a p-value less than 0.05. But obviously, what we'd like to see is we'd like to see results where -- as we've seen with the exploratory endpoint data for APOLLO, we'd like to see a stabilization of decline in 10-meter walk time and/or -- and, in some cases, an improvement in 10-meter walk time. So to the extent that we can show that type of evidence at 9 months at AAN, and then show that consistently at 18 months later in the year, that will be very important and strong data for the product. And obviously, it's a measure of function in the patients, and it's clinically meaningful because gait speed has been correlated with survival in a range of different indications.

So is it fair to say that stability is good and improvement is great?

I think stability relative to placebo is great, and improvement is even greater. I mean, I think that we'll -- I mean, we have a p-value at 9 months, which we've shared already, so you know that it's statistically significantly different than placebo. But let's wait to see the data. But obviously, stability is itself an amazing result. But having a significant number of patients that actually improve is even more impressive for sure.

So can you review for us current time lines for APOLLO-B and HELIOS-B, factoring in all the COVID delays that you, unfortunately, or fortunately, for the sake of conduct had? But now that, hopefully, we are entering a COVID off period with the light at the end of the tunnel, maybe you could -- you have a better sense of when this data is coming.

Yes. Yes, absolutely. Well, first of all, APOLLO-B, which is our randomized double-blind, placebo-controlled study of ONPATTRO in ATTR cardiomyopathy, both hereditary and wild-type, with 6-minute walk distance as the primary endpoint, we're going to complete enrollment in just the next couple of months or so. So early '21 is what we've guided for that study. And we've guided -- yes. We're very much on track, and we've guided that we'll have top line data in mid-'21 -- mid-'22, rather, from that study because that's a 12-month cycle, if you will. And obviously, if those data are positive, we'll file an NDA for ONPATTRO for a label expansion. And we should have that on the market, knock on wood, if approved, sometime in early '23. So that's an important milestone for the growth of our franchise. HELIOS-B, which is the study with vutrisiran, it's an outcome study. That is enrolling. We've simply guided for this year that it will be enrolling throughout 2021, but I can tell you that it's enrolling quite well, and we're optimistic. But we're very, very focused on doing everything we can to complete that study as well. We think that HELIOS-B, especially with the interim analysis that you may want to talk about as well, is an opportunity for having a subcu TTR silencer drug on the market, which we think would be a valuable treatment option for patients.

So we have 10 minutes left to go through the rest of your 8 programs, so we -- let's -- I do want to ask you questions just about financial strategy. Just to reaffirm, you guys, over the last couple of years, have talked about a strategy towards breakeven. You've maintained it even through COVID. What are your latest thoughts about -- when -- what are the biggest variables that feed into the when is breakeven equation? And how are you thinking about potential timing?

Yes. Well, we've -- since late 2019 and Jeff Poulton, our CFO, has been the architect of this, we've expressed a very strong commitment to achieving a self-sustainable financial profile. 2019 was our peak loss year as a business, 2020 had a better operating loss, and 2021 will be even better. But getting to the profitability, which we certainly are committed to and as part of our Alnylam P5x25 commitment that we will achieve profitability during the period, there really are 2 levers. One is top line growth, okay? And in 2021, we've guided that we'll have 75% at the midpoint of our guidance range, 75% -- over 75% growth in top line revenues in 2021 relative to 2020. And then the other lever is a moderated expense profile. And in 2021, the midpoint of our expense guidance range is a 15% increase relative to 2020. So you can see 75% on the top line, 15% in the bottom line or the expense line. And obviously, you can do the math, Ritu, as you have done, to basically forecast how the company can very strongly and, without much time, get the profitability, which is a priority for Alnylam.

Got it. So let's quickly at least go through GIVLAARI and OXLUMO. GIVLAARI is doing remarkably well. Again, it's an inpatient -- even though it's subcu, it's an in-patient delivery drug launched during COVID, or at least a couple of months into -- right into the peak of COVID. Can you talk about the drivers? And again, are there -- there's implications for growth as to whether there are COVID headwinds that will come off, like breaks coming off at the end of the year or if there's just no particular headwind such that growth may remain steady. How are you seeing that -- how are you seeing GIVLAARI?

Well, I mean, look, GIVLAARI had a very strong year. Last year was its first full year of launch. To your point, we only launched in Europe in April or May of last year, so it didn't even have a full year in Europe. A lot of the growth that's going to happen in 2021 is going to be geographic expansion. So you're going to see P&R happening in a number of countries in Europe, where, today, we're only in Germany, and new patient sales in France. And so we'll have P&R happening across Europe in a significant manner. We'll also expect approval in Japan in mid-'21 as well. And we're approved in Brazil. And toward the end of this year, we might get to P&R in Brazil as well. So geographic expansion alone is going to grow the GIVLAARI opportunity significantly in 2021. Now look, it'd be great if COVID worked around because we can have more engagement with HCPs and -- in a physical manner to help the disease awareness because this remains a very underdiagnosed disease. But I think the second half of the year will very likely get back to some more normality in terms of all that. And in the meantime, we've got a very strong product profile, and we're doing a lot of work digitally and virtually to engage patient communities and HCPs. And we've been very successful, and we'll continue that success into 2021 in the first half and then hopefully get some additional benefit in the second half with COVID attenuating in the U.S. and rest of world.

So not to give OXLUMO short shrift, but we do only have 6 more minutes. High-level conversations with your investors have focused around hypertension and NASH, with your ALN-AGT program and your NASH programs, especially since it all kind of fits together in sort of a commercial bag, so to speak. So can you talk about why are you pivoting to these larger indications now? And for ALN-AGT, in particular, when might we get more Phase I/II data before you start the official cardio Phase II studies?

Yes, absolutely. Well, we're going to have more -- let me start with the second part first. We're going to have more AGT data in early '21. We have an opportunity for presenting some more data in the early part of the year, so stay tuned on that, and then in late '21 as well. And the data we have in early part of the year will largely be additional data from the single-dose study that we -- that extends what we presented last year. The data towards the second half of the year will be in additional cohorts, including a low salt intake cohort as well as a concomitant therapy cohort using a RAS inhibitor on top of AGT. So that will be the second half of the year. But in terms of the opportunity and why we're doing it, I mean, we were very excited about how inclisiran paved the trail for RNAi therapeutics in chronic prevalent disease opportunities. And what I think was very clear about the inclisiran story was the transformative potential of an infrequently dosed drug, once every 6 monthly dose drug, that provides a clamped knockdown of the disease target, with the ensuing pharmacological benefits on the biomarker like LDL. And the opportunities in many prevalent diseases are to deal with tonic control, for example, of blood pressure, which is the big issue in blood pressure management, how do you get intra-patient consistency of a blood pressure effect, and current medicines aren't able to do that. We believe AGT can do that. And then on top of it with the drug given once every 6 months, we believe we can deal with the adherence issue, which is also a major problem with blood pressure medicine. So we -- and then, of course, the safety side of this was so beautifully derisked by inclisiran from the ORION Phase III trials, where we saw a wonderful safety profile that is consistent with the type of profile that you need to have to be able to go with these large prevalent disease opportunities. So we're excited about how RNAi therapeutics can be disruptive in these chronic prevalent markets with product profiles that we think are transformative for patients. And we believe that the time is now to make this transition to not only continue what we're doing on the rare disease space, but to be able to expand in these prevalent disease markets.

So why NASH? I mean, it's a very dramatic feel. There are NASH companies that don't even want to talk about their NASH program. So what's the appeal that you would -- what's the appeal there? And are you committed to growing this alone? Or is this something at some point you're going to say, okay?

Well, first of all, we're doing it with Regeneron, so we're 50-50 with Regeneron on HSD. So we're not doing it alone. But I would argue this. Everybody that's been doing drug development in NASH so far has been working on targets where there's no human genetic validation. So the 2 programs that we've disclosed already, HSD17B13, it will roll off your tongue soon, as well, is the PCSK9 of NASH, okay? And then the other target that we're going after, PNPLA3, also has very strong genetic validation. So I'm inspired by applying a genetically validated approach to the treatment of NASH, which remains a disease of significant unmet need and growing in overall prevalence. And we're excited to partner with Regeneron as a way of sharing the risk and costs and doing this together and, obviously, having a stronger program because of their expertise in genetics.

So we've got one minute left, and we've gotten to the favorite part of the fireside chat that I always do to you where you have to pick your favorite child. This time, you're going to be nice, and I'm just going to make you restrict yourself to your favorite child within your CNS program. What are you most excited about there?

Well, I'm excited about CNS overall because this is the year where we'll start our journey with CNS delivery of RNAi therapeutics. And obviously, the data readouts that come from that will be very meaningful and derisking for really the broader opportunities of RNAi in neurodegenerative diseases overall. I'm excited about APP, amyloid precursor protein. It's a genetically validated target in cerebral amyloid angiopathy as well as in -- which is a vascular dementia, as well as an early onset Alzheimer's disease. And we're going upstream of where aducanumab goes. Aducanumab is only targeting extracellular a-beta -- APP fragments. We are targeting intracellular and extracellular APP fragments in a way that we think can generate a more significant clinical benefit at the end of the day. Now we're not going to go into sporadic forms of Alzheimer's until we've genetic -- walk through the genetics, the defined populations, but we'll eventually get there if we're successful. And that's going to be a very large opportunity for the company.

Great. Well, we are at time. John, thank you so much for your time today and look forward to a really eventful 2021, really watching ACC and AHA for the cardiac data. So I'm not saying you promised it there. I'm just saying ACC and AHA are there. So look forward to speaking to you again.

Same here, Ritu.

Take care. Bye.

All right. Bye-bye, everybody.