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

My name is Gena Wang. I'm SMid-Cap Biotech Analyst at Barclays. Welcome to our Second Virtual Global Healthcare conference. First, I wish everyone, stay healthy, and I would like to thank all the participants, investor companies and especially, our event team and the corporate access team who made this virtual healthcare conference possible. With that, I would like to introduce our next presenting company, Alnylam. With us today, we have John Maraganore, Chief Executive Officer. John, I hand over to you.

Thanks, Gena. Thank you so much. It's great to be here. Listen, in spite of the challenges that everybody had in 2020 with COVID and what it did for public health across the world, 2020 ended up being a remarkable year for Alnylam. We really embraced our challenge-accepted spirit at the company. We took it to heart, and we remain steadfast in our commitment to the patient communities that we serve. For example, we started 2020 with 2 products, 6 approvals and access in 14 countries. And we ended the year with 4 products on the market, 15 approvals and access in 41 countries, with top line revenue growth that also increased over 100%. So as we begin the first part of 2021, Alnylam is really poised to begin its transition toward becoming a leading biopharma company and what we believe can be a top 5 biotech company in market cap over the next 5 years. So as a reminder, I will be making forward-looking statements during my presentation. Now as many of you know, we recently announced a new 5-year vision and new strategy for Alnylam over the next 5 years. We've had a heritage of the company of having 5-year guidance that we provide to our investors. We started this back in 2011 with Alnylam 5x15. And then in 2015, we launched Alnylam 2020. And at the beginning of this year, we launched Alnylam P5x25. And this is a new guidance that we provided across patients, products, pipeline, performance and profitability that we believe enables Alnylam to build a leading top 5 company over the next 5 years. Some of these goals are outlined here on the slide. As you can see, but they include delivery of transformative medicines in both rare and common diseases for patients around the world, including additional label expansion for these products. It includes a robust and high-yielding pipeline of first and/or best-in-class product candidate from our organic product engine. And also important exceptional financial performance with over 40% revenue CAGR through year-end 2025 and also achieving sustainable profitability within the period. So let's now go to this slide here, which really is a bumper slide that highlights the key pillars of Alnylam's business. They include transformative medicines that we are bringing to patients around the world, again, with both rare and prevalent diseases. Second, a robust and high-yielding R&D pipeline of first and/or best-in-class product candidates. And third, an organic product engine that is capable of delivering sustainable innovation. So let me start with a discussion on the transformational medicines that we brought to market. Here on this slide, you can see an illustration of the 4 medicines that we've now brought to market ONPATTRO, GIVLAARI, OXLUMO and together with our partners, Novartis, Leqvio or inclisiran, which has been approved in the EU. And then also 2 additional late-stage programs, vutrisiran and fitusiran that we expect to bring to the market over the next 12 to 24 months. Starting with ONPATTRO. This is a product that's indicated for the treatment of the polyneuropathy or hereditary transthyretin-mediated amyloidosis. And this was launched in August 2018. This product has shown significant growth over the past 2.5 years, and we ended 2020 with $306 million in full year revenues for the product and with about 1,350 patients on commercial drug. The second product here is GIVLAARI. This is an innovative medicine for the treatment of acute hepatic porphyria, which was launched in November of 2019. GIVLAARI's performance to date has been very encouraging with our first full year of commercialization back in 2020. And here, we reported full year results with about $55 million in product revenues and about 200 patients on commercial products -- commercial drug. Late last year, we also launched our third RNAi therapeutic, namely OXLUMO, which is approved in the EU and then was approved in the U.S. for the treatment of primary hyperoxaluria Type 1, a devastating ultra-rare orphan disease. OXLUMO is also the first RNAi therapeutic approved in the pediatric indication. 2021 will be the first full year of OXLUMO launch, and we're pleased with the early demand that we've seen so far. Now as I mentioned before, in addition to these 3 marketed products that were directly taken to patients globally, we also have Leqvio approved, together with our partners at Novartis. It's approved in the EU, and we expect it to get approved as soon as possible by the U.S. FDA as well. And as I said earlier, also, we have 2 additional product launches that we expect over the next 12 to 24 months, vutrisiran and fitusiran, which we believe will meaningfully increase the overall number of revenue-generating opportunities that Alnylam has in its portfolio. Specifically, vutrisiran, as you all know, was recently evaluated in the HELIOS-A Phase III study with positive results that we announced in January. So let's now move to a discussion of our R&D efforts where we're advancing Alnylam RNAi innovation for a wide range of rare and common diseases. This slide shows a snapshot of the Alnylam clinical pipeline. I think one thing you can see here is that we have certainly a very robust development portfolio of clinical programs. 13 programs that are in Phase I, all the way to Phase IV. And obviously, we're particularly excited about our upcoming readouts that we'll have starting in mid '22 from our amyloidosis cardiomyopathy portfolio programs, APOLLO-B and HELIOS-B, which are obviously going to be important growth drivers for Alnylam in the years to come. You can also appreciate from this slide, the substantial amount of product rights that we have maintained across our portfolio with global rights on most products in the portfolio. So let's now turn to the third key pillar of Alnylam, which is our organic product engine. This is an important part of the story because it really is the source of our sustainable innovation at Alnylam. Our product engine is today able to deliver 2 to 4 new INDs per year. And per the goals that we've laid out with Alnylam P5x25, we aim to end '25 at a 4 or more IND per year clip going forward. So really, even increasing the productivity from our product engine even above and beyond what we're doing today. Currently, we have over 25 preclinical programs that are in active development across 4 different tissues, not just liver, but also CNS, eye and lung, and we're very excited that in the middle part of this year, we will be starting clinical development of our first CNS program, ALN-APP, an RNAi therapeutic targeting amyloid precursor protein, which obviously will be a landmark event for Alnylam's progress in extrahepatic delivery of RNAi therapeutics. The other point I'll make here on this slide is that, many of these programs are addressing not just rare disease opportunities, but common prevalent disease opportunities that we believe is an important part of how we grow the business for the future. We have programs in the portfolio that address diseases like gout or diseases like diabetes. So this is obviously an area of important growth going forward. Now as we think about the future and where Alnylam is going, this really is an exciting time for the business. We believe that we will be expanding our portfolio of marketed products to include both rare and prevalent disease products across multiple indications, in multiple therapeutic areas. We are today a country, a -- company that is active in 20 markets around the world. We expect this to grow over time. We'll also be growing our employee base. And in terms of manufacturing, we expect to expand our manufacturing beyond the use of third-party CMOs to also include the in-house manufacturing capability that we built at our Norton facility. But all of these components of our company strategy really are encapsulated with the P5x25 strategy of building a top 5 independent global biopharma company, something that we believe we can do with a commitment to patients with a very strong corporate culture, a commitment to scientific innovation and social responsibility and overall excellence in our company. So with that, Gena, I believe, we are now ready to go into Q&A, and I look forward to the fireside chat that we're about the have.

Thank you, John. So maybe we'll start with the commercial franchise. You do have really a very impressive speed of the drugs approval. So for the -- regarding the ONPATTRO, is the 4Q '20 U.S. revenue a good comp for 2021 revenue? Where do you see the major driver for 2021 revenue growth?

Yes. Thank you for that. ONPATTRO had a really good year in 2020. We ended the year with $306 million in global revenues, and we had a very strong Q4. Patient demand was up 13% in Q4 relative to Q3. We do expect steady and continued growth for ONPATTRO in 2021. We now have given combined guidance for our products. So it's not broken out by brand, given now that we have 3 products on the market. The combined guidance is that we'll have $610 million to $660 million of product revenues in 2021. Of course, the majority of that will be ONPATTRO, given that it's the most advanced product in the portfolio, although we'll also be having growth from the other assets as well. But ONPATTRO is definitely going to be a driver of growth in the course of the year. And a big -- a big component of how the growth will be materialized is from new patient finding. So we are sort of beyond the geographic expansion phase of growth for ONPATTRO. We've now achieved PNR in most countries in most of our markets, certainly most of the major markets for the product. And really, the biggest driver of growth is going to be new patient finding. The good news there is that we're seeing the health care system open up now. We've seen things get better and better and better as time has gone on. We're obviously very well equipped with our customer-facing teams to help engage with physicians around the benefits of ONPATTRO for the treatment of polyneuropathy. And we're also seeing -- in the U.S. market, we're also seeing a lot of concomitant use of ONPATTRO for the treatment of polyneuropathy, along with other drugs that are being used to treat cardiomyopathy with success and reimbursement of ONPATTRO in even that concomitant use type of setting. And so we think that will also grow in the U.S. Now outside the U.S., we see a lot of switching happening from TTR stabilizer drugs, where patients are progressing in their polyneuropathy and then are going on to ONPATTRO. But we also see a lot of patients coming on to ONPATTRO at the beginning of their diagnosis. So overall, we feel very good about steady and continued growth in '21, but a lot of it's going to come from new patient finding during the course of the year.

So the geographic expansion, did you see like a major driver of Japan, will that be the major contribution? And any COVID impacts that are to be different there versus the U.S.?

Well, it's a little bit different in Japan versus the U.S. COVID, of course, is playing a different impact in different markets around the world. I can say in Asia, probably the biggest difference in Asia is that, we can't really use home infusion in Japan. So that's a market where home infusion is not possible. Home infusion has been -- has increased quite a bit in the U.S. market and also in the European market. But in Japan, we've not been able to use home infusion. But we're still seeing growth. And as you know, Gena, hATTR amyloidosis is endemic in Japan. So we are still seeing growth in the Japanese market as well.

Okay. Perhaps, staying on -- continue with the commercial questions. So you're saying that the big drop guidance [ $620 million $616 million]. So what could be the upside scenario ONPATTRO, if you look at GIVLAARI, OXLUMO, any additional color you can give?

Yes. Well, this is going to be a big year for geographic expansion for GIVLAARI. We -- basically -- last year, 2020 was U.S. market and only about 8 or 9 months of sales in Europe because we got approval in April of last year in the European setting. And the only markets for the most part that were opened last year in Europe were Germany and France through our [indiscernible] in the French market. So there are a significant number of countries that will be opening up for GIVLAARI during the course of 2021. And also, we expect approval in Japan in the middle part of the year as well. And we expect to advance our pricing discussions in Brazil as well. So I'm -- I think the -- some upside potential, of course, exists, which is the timing of the success that we aim to have on pricing in different countries in different markets for GIVLAARI. And the same applies for OXLUMO. Right now OXLUMO is approved in Europe and in the U.S., but pricing and reimbursement will be happening during the course of the year in the European market for OXLUMO. And so in the back half of the year, when some of those discussions may materialize into pricing decisions, there could be some opportunity there in addition for that product. But I think the fact that we've demonstrated real excellence in how we can achieve market access globally with our products, I think is something that we're going to be able to leverage successfully for both GIVLAARI and OXLUMO that will represent additional opportunity on top of the success that we have in growing the ONPATTRO brand in the course of the year.

Should you expect OXLUMO follow similar trajectory as GIVLAARI in terms of revenue?

Can you say that again, Gena. I didn't hear you very clearly.

Yes. So do you expect OXLUMO follow similar trajectory -- revenue trajectory as GIVLAARI?

I do. I do. In general terms, yes. I mean it's like GIVLAARI, like AHP, PH1 is an ultra-rare orphan disease. There -- while there are a good number of patients that are diagnosed, there's still an important need for medical education to improve disease awareness, to help patients get diagnosed more quickly, especially, adult patients, where the disease can sometimes be more difficult to diagnose. So we think there's an opportunity there. And so we do think that there'll be steady and continued growth for that product, similar to what we've seen with GIVLAARI.

Can you share color on [indiscernible] distribution in terms of number of patients and geography?

Yes. I mean for OXLUMO, Gena specifically, you mean?

Yes.

Yes. So it's a few thousand patients that we -- based on prevalence that R&D U.S. and EU and so of course, many of these patients are not diagnosed. And so our mission in a setting like this is to assist the diagnosis. We are offering our Alnylam Act free genetic testing program for patients with PH1. And the goal there is to help patients get diagnosed more rapidly.

As we are prevalence-based pricing, can you give a little bit of in terms of like a different geographic region? Will that happen to be threshold? How successful that was?

Yes. Well, for both -- so taking a step back, as you know, we've been very successful with payers in introducing value-based agreements. And we now have over 30 value-based agreements that we have formed with commercial payers and with one state Medicaid payer as well across the U.S. And these value-based agreements in the case of GIVLAARI include something called the Prevalence-Based Adjustment, whereas more patients get diagnosed, we're willing to decrease price, and we negotiate this on a plan-by-plan basis. So every plan agreement is different. And we are doing the same thing with OXLUMO. So we also have a Prevalence-Based Adjustment that we do there with the payer. Now as part of these agreements that we form with the payer, the payers also agree to reimburse our products per the label. So they can't play games with the clinical trial inclusion/exclusion criteria. They agree to reimburse for the label. And they also agreed not to step at it, our product. So it is a give and take in these value-based agreements with payers. But we've been very successful right now with GIVLAARI, we have well over 90% of the U.S. population is able to get access to GIVLAARI, if it's prescribed. And we expect to have the same type of results with OXLUMO.

Okay. Now switching gear to the TTR program, the clinical data. Can you A -- so what level of detail you will be sharing with us at AAN.

Yes. We'll share with you all the data we've got at AAN. That will include the -- everything from baseline characteristics to safety to efficacy. We'll also share the exploratory cardiac data that we have from the study. Now at the 9-month time point, the cardiac data is limited to just NT-proBNP, which we've already told you was statistically significant. I'll share with you the actual data. Later in the year, we'll have data from the 18-month endpoint. And there, the cardiac data, which I know are great interest to people, are going to be much more extensive because we'll have data from echo cardiographic measures, we'll have data from PYP scans that are done both at baseline and also at that 18-month time period, we'll also have more NT-proBNP data. So there'll be quite a bit more data later in the year in addition to the 18-month results, of course, on mNIS+7 which is the polyneuropathy primary endpoint.

Okay. Very helpful. And what is the status of NDA submission? And related question is, since I think -- before they got approval, FDA should see already 18 months -- 18 months data will become available. Will there be any bar, or you think that we wanted to see some kind of trend in order to give approval?

I mean based on our discussions before with the FDA prior to starting the HELIOS-A, they were very much aligned with the 9-month data being the data that they would use and look at for an approval. So we are going to be filing the NDA very soon with the FDA. Now the European authorities were more interested in the 18-month data. So our plan in Europe is to submit on the 18-month data. But there are other markets where the 9-month data will also be used for the initial submission, including Japan and Brazil. So Europe will be the second part of how that advances, whereas the U.S. and some other markets will be based on 9-month data.

Okay. Okay. So HELIOS-B, can you remind us, what it achieved there related to interim analysis?

Yes. So we have alignment with both the U.S. FDA and the EMA on doing an interim analysis in the HELIOS-B study. But the details of that analysis were not specified in the initial protocol. So we're now beginning to engage with regulators on exactly what the interim analysis approach would be. And when we have clarity on that, we will certainly update people on what the interim analysis will look like. But obviously, the benefit of having an interim analysis in HELIOS-B is that, it can bring forward the timing for bringing vutrisiran to the market, assuming the results are positive in the cardiomyopathy setting, which is, of course, the largest part of the market.

Can you expect U.S. and Europe regulatory would be aligned with agreement which could trigger interim analysis that they do -- actually you're looking for?

So is your question, if they would be aligned on the interim analysis design?

Yes.

Yes. Well, obviously, when we engage in these discussions, we have to ultimately make sure that they're aligned because we want to have an interim analysis that will be acceptable to both major regulatory authorities that is important. And sometimes, we also go to the Japanese authorities to confirm with them. So typically, when we get alignment between the EMA, the FDA and the PMDA, then we have enough comfort around an approach that we would use in a clinical trial.

Okay. Just to ask, we have time, I'll ask one or -- early pipeline question, AGT program because that's also very exciting asset. You mentioned very large market optimism. So can you highlight the beta update for the remaining of this year? And also what could be the FDA in that, or could be the latency of reduction that you must consider within approval and it's going to...

Yes. So thanks for that, Gena. I mean, obviously, we're excited about the ALN-HTT program. It's RNAi therapeutic targeting angiotensinogen for the treatment of hypertension. We last reported data at our R&D Day showing an over 15-millimeter mercury reduction in systolic blood pressure with the durability that we think supports a biannual dosing regimen. Clearly, that type of a decrease is very clinically significant, even as little as a 5-millimeter mercury reduction of blood pressure is viewed to be clinically significant. So we're really showing an impressive effect. We're about to launch our Phase II program, Cardio 1 and Cardio 2 in about 1,000 patients combined. Which, of course, will evaluate not only ALN-AGT as monotherapy but also as combination therapy with a wide range of antihypertensive drugs. So it really is going to be a very comprehensive program that positions the product to become a foundational medicine for the treatment of hypertension, which will then, of course, evaluate in the Phase III study. But very importantly, blood pressure is going to be the approval endpoint in the Phase III, and it's the same endpoint that we've been using in the Phase I. So we have high confidence, just like we did with inclisiran, when that product was being developed, that this drug is going to provide meaningful efficacy in patients. And of course, we will prove that in additional studies that are randomized, and we'll obviously do that from -- we'll do additional studies to confirm safety in a much larger patient population, but we can take great comfort in the results that we've seen with inclisiran's development where using a similar platform approach. We obviously feel very good about our safety profile for the platform itself.

Great. Well, thank you very much, John, for this progressive discussion. And we're looking forward to a great 2021 ahead of us.

Yes. Looking forward to it. All right, Gena. Thank you. Bye-bye.

Bye.

Bye-bye.