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

Good afternoon, everyone. Thanks for joining the 20th Annual Needham Healthcare Conference. My name is Joey Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next presenting company, Alnylam Pharmaceuticals. Joining us today from Alnylam is CEO, John Maraganore. And we'll start with a company overview, followed by a Q&A session. So for those of you joining on the webcast, if you [ wanted the answer to a question ], please do so at any time, you can submit a question using the chat feature in your web browser. So with that, we'll get started. I'll turn it over to John for a company overview.

Great. And Joe, we were just going to do more of a fireside chat, and so I'm going to do more of a verbal, again, on where the company is for everybody. Obviously, Alnylam is really at an exciting stage of its development. We have now brought 4 RNAi therapeutics coming from our laboratories to the market, 3 that we're directly commercializing ourselves, that's OXLUMO (sic) [ ONPATTRO ], GIVLAARI and OXLUMO, and then one that we're proudly partnered with Novartis, on Leqvio, for the treatment of hypercholesterolemia. But these are 4 very exciting medicines that really have made a difference in patients' lives, with -- based on the data that have been generated on clinical trials. So we're very proud to have this portfolio of commercial assets that we've brought to the market. As everybody knows, we had a top line positive Phase III result with our -- what promises to be our fifth RNAi therapeutic that we bring to market, that's vutrisiran, the HELIOS-A study that read out top line in early January. And this coming Monday, we'll provide the full data from that study, the HELIOS-A study, at the AAN meeting. So stay tuned for that. I'm sure, Joey, you've got some questions about that as well. But we're looking forward to that, and we'll file the NDA early this year. And that, if approved by the FDA, that will be our fifth RNAi therapeutic that we bring to market in just about 3 years of time since the first one was approved. So very, very promising portfolio. Now behind the commercial products, of course, we've got a clinical development pipeline of 13 medicines in clinical development. We then have a preclinical pipeline of 25 -- over 25 products in development and very importantly, an organic product entrant that can fuel sustainable innovation for the business, with 2 to 4 INDs per year. Now we recently announced our P^5x25 5-year goals. We can talk about that in Q&A, very exciting new vision for the company in terms of how we look at the next 5 years of bringing transformative medicines to patients with both rare and common diseases globally, of course, but also delivering very strong financial performance for the business and also achieving profitability during the period. So I'll stop there, Joe, and let you let us go into the fireside mode.

Yes. Great. Thanks, John. So I'll kind of start with the profitability topic. And you guided, in the past, and you have been reiterating the guidance for 2019 as sort of a trough year in terms of operating loss, but describe the key drivers behind this transition to a self-sustainable profitability kind of go -- now and then going forward.

Yes. Great, Joe. Well, maybe taking a step back, I mentioned this P^5x25 strategy. There are 2 -- 2 of the Ps are performance and profitability. And what we've said on performance is relevant to this discussion. We've committed to over 40% revenue CAGR from now through the end of '25 for top line revenue growth as a business, which is an exciting level of revenue growth by all accounts. And then on profitability, what we've committed to for now is that we're going to have profitability within the period. We haven't given more granular specifics. But certainly, within the period, we'll achieve profitability. Now in terms of the levers to get there, it really comes down to 2 things. It's top line growth and then moderated operating expense as a business. And for top line growth, we are excited with what we achieved in 2020 during the midst of the pandemic. We have provided guidance for 2021 of $610 million to $660 million of combined revenue guidance. That's for the 3 marketed products that we directly commercialize at Alnylam. And obviously, that represents significant growth over our 2020 performance. If you look at the midpoint, that's a 75% growth of product revenues compared to our 2020 performance, so 75% top line growth at the midpoint relative to 2020. And then you go to our OpEx, and we've guided -- we'll have OpEx between $1.175 billion and $1.275 billion in terms of both R&D and SG&A for the year. And at the midpoint, that represents 15% growth relative to 2020. So therein lies the equation toward profitability, Joe, of stronger top line growth relative to OpEx growth as a business. And as you said, we did commit, a while back, that 2019 was going to be our peak loss year, and we showed improvement in 2020 and we will show improvement in 2021. And we're absolutely going toward a self-sustainable profitability profile for the business, again, within that 2025 period, consistent with our P^5x25 goals. So hopefully, that gives you the color you were looking for, Joe, on that side of it.

Yes. That's great. And maybe just a little more, drilling down on OpEx and investment year, is there an equilibrium or a level where you think is sort of a sweet spot in terms of that OpEx to kind of keep driving the pipeline forward but meet your goals, as you mentioned?

Yes. I mean look, it's an important thing to get right, right? Because at one extreme, we could be profitable this year, and of course, the profitability that we generate would not be that attractive from a long-term growth perspective and that would be the wrong thing to do given the pipeline that we have in front of us. And also, along those lines, one of the things that is worth commenting on is the fact that we do have outsized returns for the investments that we make in R&D. We've shown now that we are achieving over 60% IND to positive Phase III result probabilities of success with the Alnylam platform, and that's the benefit of having a truly reproducible and modular platform, combined with human genetics that we use in all of our programs. And so that's something which is very attractive compared to the 10% or less probabilities that you see from the rest of the industry. But that doesn't take us away from the commitment to achieving a self-sustainable profile. But we just need to make sure that once we get to profitability, that we've got a growth trajectory based on investments that we make in R&D that will sustain attractive growth once we get there. And so that ultimately helps us in our long-range planning process to define an envelope of spend around OpEx that we, as a business, are staying disciplined about and will be willing to spend. And I think just the fact that we're showing a little bit of that this year with the 15% growth on OpEx relative to 75% growth on top line revenues gives you a way of thinking about how we look at that going forward.

Got it. Okay. Now let's go to the U.S. marketed therapies, and this is a multipart question and a lot to unpack here. But ONPATTRO, GIVLAARI and OXLUMO, maybe for each one of those, could you walk us through some of the initial launch metrics for each of these therapies and things like number of patients on drug and diagnosis rates and key factors that will help drive growth for each of those going forward?

Yes. Definitely lots to unpack, but let's dive in. Let's start with ONPATTRO. So as a reminder, ONPATTRO is indicated for the treatment of the polyneuropathy of hereditary ATTR amyloidosis. So it is approved in about 20 countries, over 20 countries now around the world. Some of the dynamics are different in the U.S. market versus the rest of the world, so I'll try to give you some answers that are reflective of some of those regional differences. In 2020, we did $306 million of global net product revenues for ONPATTRO. We're really pleased with that result given the tough year with the pandemic. And we ended the year with about 1,350 patients on commercial ONPATTRO globally, which is something we're also very pleased with. Going forward, the growth is really being driven by de novo new patient finding efforts. So we've gotten P&R in almost every major market now. There are some exceptions, like Brazil is not yet finalized. But in most major markets, we have achieved pricing and reimbursement. So the growth is really driven by de novo patient finding. The other dynamic that's happening, and this is where we see some split between the U.S. and rest of the world, is in the U.S. market, we see a greater recognition of polyneuropathy in more and more hereditary ATTR patients. This is that so-called mixed phenotype patient population. And there is greater recognition of the burden of polyneuropathy in those patients. And that's when we see prescribers prescribing ONPATTRO sometimes on top of other drugs that are used to treat other aspects of the multisystem disease, like the cardiomyopathy. So TTR stabilizers might be used on top of ONPATTRO. And that's a dynamic that we see in the U.S. market. Again, that's where ONPATTRO is being used to treat the polyneuropathy of the disease, in patients where that recognition is going -- is getting higher. In the rest of the world, the dynamic that seems to predominate is switching of patients from TTR stabilizer drugs, which have been on the market in the rest of the world for quite a bit longer. It's not -- they're not even been approved in the U.S. market for polyneuropathy, but they've been on the market longer in other parts of the world for treating polyneuropathy. And when those patients are progressing in their polyneuropathy, they are going -- they're being switched to ONPATTRO as a way to treat those patients. So that's a dynamic that we see there. And that dynamic will continue throughout all of 2021, from what we can tell at this point in time. So greater recognition of the burden of polyneuropathy overall and then recognition of patients that might be progressing in their disease while they might be on other therapies, who then get switched onto TTR silencer drugs. In general, I think the other part of the ONPATTRO story is that the broader ATTR marketplace, in general, in general terms, is something we view as a market growth story. This is an area that is generally underdiagnosed. That's true in hereditary ATTR, where we're currently labeled. It's also true in wild -- so-called wild-type disease, where we're currently not yet approved. But there's a broader recognition of the disease overall, which is helping lead to earlier patient diagnosis and earlier treatment of patients with whatever drug is approved for that specific segment. And that's a good thing because patients getting treated earlier have a much better opportunity for benefit than patients who might be treated too late. And that's a dynamic that is happening globally with the TTR landscape. So let me stop there on ONPATTRO, and we can come back to any other questions you have on it. But let me go on to GIVLAARI. So GIVLAARI, which was approved in -- first approved in late 2019 in the U.S. and then in early 2020 for Europe, is approved for the treatment of acute hepatic porphyria. And we did $55 million in sales, net product revenues in 2020. We ended the year with about 50 -- I'm sorry, about 200 patients on commercial product at the end of 2020. And this is a story in 2021 that's going to benefit quite a bit by geographic expansion. So again, we only got approval in April of last year in Europe. For European sales last year, it was mostly Germany and our French ATU. And now we're beginning to have quite a bit of P&R happening in European countries. And we also expect approval for GIVLAARI in Japan in middle 2021. So the story, a lot of the growth story for GIVLAARI in 2021 will be around geographic expansion on top of disease awareness and patient recognition and patient finding efforts as well. And then finally, OXLUMO, Joe, that was just approved. That was approved in November of last year for both -- in both the U.S. and EU. We commented that we were really pleased with our early demand that we saw. We're going to report Q1 soon. That will be the first full quarter of performance that we report for OXLUMO. Again, OXLUMO's approved for the treatment of primary hyperoxaluria type 1, which is a terrible ultra-rare orphan disease. And we look forward to presenting results from the first quarter, but I can't share them with you today.

Fair enough. Fair enough. Well, maybe spending a little bit more time on the TTR franchise here, what's the thinking -- you have ONPATTRO approved and you have -- you're running some additional trials with the next-gen vutrisiran, what -- maybe you can help us understand what the -- how much the TTR market can grow from the current ONPATTRO label to, let's say, as vutrisiran with those 3 HELIOS trials and ultimately reach its market. And so what that upside is there in terms of patients and yes, growth there.

Yes. Yes, yes. Well, vutrisiran is our subcutaneously delivered RNAi therapeutic targeting TTR. It's given once a quarter. We are doing studies. We'll be soon starting studies to enable a once every 6 monthly regimen, so a biannual regimen. But the initial approval that we expect, assuming FDA approval, is for -- will be a once-quarterly subcu. And it will also be initially for the ONPATTRO indication. So polyneuropathy of hereditary ATTR amyloidosis, that will be the initial expected approval if the FDA approves it. We're excited about what -- where this product can go even within the polyneuropathy and mixed phenotype segment, which is -- which will be enabled by the initial approval by the FDA because as a once-quarterly subcu product, it really offers the potential to expand our existing opportunity even before the HELIOS-B trials read out. And very specifically, the reasons for that are that as a once-quarterly subcu product that's physician-administered, it's going to have a far better treatment burden compared to ONPATTRO, which is given once every 3 weeks by intravenous infusion. So you're going to have an automatic benefit of a much better presentation, certainly a very welcome treatment option for patients who potentially can benefit from this product. And we think that, that lower treatment burden will also make it an easier decision for physicians who are thinking about treating their mixed phenotype patients, for example, that have polyneuropathy. And so we think that's going to be easier for physicians to consider for their patients given the fact that it's a once-quarterly subcu. And then also, similarly, for patients that might be progressing on a TTR stabilizer drug, the decision to switch them to a once-quarterly subcu product, again initially in the polyneuropathy segment, is going to be a far easier decision than having to take a patient onto an IV therapy. So for all those reasons, we believe that vutrisiran is not a zero-sum game with ONPATTRO in the hereditary ATTR polyneuropathy segment alone. And then, of course, when we complete HELIOS-B and assuming it's positive and assuming we get approval into that wild-type ATTR segment, that expands the opportunity quite a bit further. Again, the epi on wild-type relative to hereditary is 10 to 1. And so the prevalence there is quite substantially different for if and when we get that approval out of the HELIOS-B study for vutrisiran.

And you also mentioned the -- a biannual regimen is kind of [ in the works ]. And I'm just curious, maybe you can give us some time lines around the -- when that will be initiated and sort of progressing. And is there, I guess, a significant -- or maybe give us a sense, it seems obvious that less frequent dosing could lead to greater adoption. But would there -- based on your market research, is there a fair amount of TTR patients that would not take sort of a once every -- a quarterly subcu but would take a biannual? Or what's been your...

Well, I think it's fair to say quarterly is already a remarkable advance in the field because the only subcu alternative right now is once weekly and it requires monitoring. And that's -- and so that, going to once quarterly, of course, will be a fundamentally wonderful advance for patients. And again, if approved, it's going to give patients an opportunity to really imagine a totally different level of freedom from their disease by having a once-quarterly administration. But look, I mean, the data that we have are quite clear. If you can then go to once every 6 monthly, it's even going to be further competitive and preferred over once quarterly. So we are committed to doing the work that it will take to get to a once 6-monthly label expansion over time. And we've aligned with the FDA on what studies we would need to be able to do that, and we think that they're relatively straightforward. And so those 6-monthly studies will start early this year. So we're just -- very soon, we'll be starting those studies. And while we haven't given any further guidance beyond that, it's not out of the question that we would have data next year from that and potentially be able to roll that into a supplemental filing sometime thereafter. So it is something which will happen pretty quickly to get to a biannual dosing regimen if the data support it.

Got it. And maybe working a little bit backwards here. I want to kind of focus on the vutrisiran HELIOS trial. So maybe you can give us an overview of both HELIOS-A and HELIOS-B. And understanding you released initial data from HELIOS-A in January, you'll have some data upcoming this month. To kind of put that into context, what should we look for? What should we expect?

Yes. Yes. Well, I mean, the HELIOS trials are a comprehensive set of studies that are aimed at really evaluating the safety and efficacy of vutrisiran across literally the entire spectrum of ATTR amyloidosis disease. There's HELIOS-A, HELIOS-B, and there's also HELIOS-C, which we can talk about as well. HELIOS-A, which is the study that's reported out right now, let me come to that last. HELIOS-B is a study, a randomized placebo-controlled, double-blind -- or double-blind, placebo-controlled study in patients with both hereditary and wild-type ATTR cardiomyopathy. And that study uses mortality and CV events as the primary outcome measure for that study. It's a 30-month study. So it is designed to be comprehensive, looking at outcomes, and it is intended to enroll about 600 patients. The HELIOS-C study, which we're aiming to start at the end of this year, is really looking at prevention of disease. And so this is looking at patients that don't even have heart failure but who are at risk of developing heart failure from -- and this is both hereditary and wild-type patients. And that's a design of a study that we're working on closely with our experts to really think about how we might reimagine the treatment of ATTR amyloidosis. So that's a study that won't start until later this year, and we'll have more to say on it when we get better granularity. But the near-term [ sees the ] HELIOS-A, and that's the study that we'll report data on -- full data on Monday. And obviously, I can't go into the details of that. I won't on this call. But I can remind you what we've said already, which is that HELIOS-A is a randomized, double-blind, placebo-controlled study -- I'm sorry, it's not a double-blind, it's an open-label study, which uses the historical placebo group from the APOLLO study as the control. And so we aligned with the FDA and the EMA on the study design given the fact that it was really unethical to do a randomized, placebo-controlled study. So we agreed to doing an open-label study using the original APOLLO placebo group as the placebo control for the HELIOS-A study. We enrolled 164 patients with hereditary ATTR amyloidosis with polyneuropathy. So this is a polyneuropathy study. The treatment duration for the primary end point was 9 months. And the primary end point measure was the modified NIS+7, the mNIS+7 score, which is a measurement of neuropathy impairment. And if you recall, in the original APOLLO study, patients that progressed on placebo showed an increase in their mNIS+7 score over time, which relates to clinical worsening in their neuropathy. And if you remember, Joe, we were able to show with patisiran, out of the APOLLO study, now ONPATTRO, the ability of this drug to halt and in fact, in the majority of patients, show evidence of reversal of disease relative to baseline. So we'll look forward to reporting the data for HELIOS-A on Monday. We did, at the top line, say that we hit statistical significance on the primary end point. We met both secondary end points in the study, which include the Norfolk-QOL and also the gait speed 10-meter walk time measurement that we're doing in the study. And we also met the exploratory end points in the study, which includes the NT-proBNP measurement that we do in all patients, but also in a cardiac subpopulation that's prespecified. And at the AAN meeting, we'll present all of those data, including the NT-proBNP exploratory data as well as the safety data. And we'll look forward to that presentation on Monday.

Great. Well, I think everyone is looking forward to that though, to the exciting data presentation there. And just remind us again on the plan for vutrisiran here, the plan [ in the NDA ], the timing.

Yes. Well, we're on track to file the NDA for vutrisiran for -- based on the HELIOS-A data in early '21, which is our guidance. And so in the coming weeks or so, we'll be able to give you that announcement. It's very much on track. And then we would look toward an approval, assuming approval, in early '22 from that review with the FDA. And that would be, if approved, that would be our fifth RNAi therapeutic that we would be bringing to market, which is pretty exciting.

Yes. Yes. All right. Well, let's shift a little bit to some earlier-stage programs. You reported earlier this week on your ALN-AGT program, the Phase I study. Maybe provide us with an overview of that indication. What are the -- what's the unmet need in this large indication? And what would be the target patient population for AGT? And kind of review the interim Phase I results here.

Yes. Absolutely. Well, ALN-AGT is our RNAi therapeutic targeting angiotensinogen for the treatment of hypertension. And I think everybody understands that hypertension is the #1 modifiable risk factor for cardiovascular morbidity and mortality around the world. And even with many now-generic antihypertensive drugs, patients fail to achieve tonic control of their blood pressure. So they see quite a bit of variation within each patient and with these different drugs that are out there. And it's known that the variability that occurs with blood pressure management is, in fact, directly linked to cardiovascular morbidity. So being able to have more tonic control of blood pressure would be expected to provide better outcomes for patients. And the other challenge in the management of hypertension is compliance. Patients are generally nonadherent to therapy. And as a result of that, patients fail to achieve control. You can't get control of blood pressure if you don't take your medicine. And so that's another area of significant unmet need. So with ALN-AGT, we believe that we have an opportunity to reimagine the treatment of hypertension, to really bring innovation into this disorder for -- in a way that hasn't been ever achieved. Because with RNAi therapeutics, given their long durability of action, we have the potential for a once-quarterly, if not once every 6-monthly, treatment regimen for the drug, which, of course, would certainly help address the issues of tonic blood pressure control and also the issue of compliance in the patient population. And we also believe that by virtue of having a clamp pharmacologic effect, that we can really achieve better outcomes ultimately. Well, of course, we have to prove that in clinical studies, but we believe that we can achieve that with the drug. Now just this past Sunday, we provided an update. We were invited to give a break -- a late-breaker talk at the European Heart Hypertension meeting that occurred on -- over the weekend. We updated people on our Phase I results. We are achieving over 95% knockdown of angiotensinogen with single doses of ALN-AGT and with the durability of angiotensinogen knockdown that is going to be supportive of a once-quarterly or probably biannual dosing regimen for this drug. And we also presented blood pressure data, a more complete set of blood pressure data than what we showed last year at the American Heart meeting, showing over 15-millimeter mercury reductions in systolic blood pressure, with very significant reductions in diastolic blood pressure as well, with the top dose as a drug in the study. And that is a very impressive level of blood pressure reduction from the study. And then on the safety side, so far, so good. The safety profile looks really encouraging. We're not seeing any adverse events that cause us any concern whatsoever. So we're really encouraged by the profile that's emerging for the product. And again, we'll be soon starting our Phase II program, which will be a comprehensive program in about 1,000 patients with hypertension and will also include study of combination therapy with other antihypertensive drugs.

Got it. Now you have quite an extensive preclinical program here, a preclinical pipeline greater than 25 programs and across liver, eye, CNS, lung. So we certainly don't have time to go through -- run through all of them, but could you highlight a few other programs that you're most excited about and maybe some that could be entering the clinic soon?

Yes. Yes. Great question, Joe. Yes. No, we've got quite a bit of opportunities in front of us, which is terrific, and it's one of the beauties of a platform. Once you figure out -- once you open up a tissue with our, as we think about it, with our delivery approaches, you really have the ability of turning the crank and then really building an exciting pipeline. And we've done that over the years with the liver. And now, we're about to open that up with the CNS and also with the eye and also with the lung, as you said. Now I can't go through all 25 programs, so I'll just comment on a couple or maybe 3 that I think are really notable that people should watch out for. One is we're about to start and about to file our first CNS program IND that will happen in midyear, so sometime over the summer. And that is a program targeting amyloid precursor protein, which, of course, is the precursor protein for pathogenic Abeta fragments that are believed to be involved in the pathogenesis of Alzheimer's. Our interest in this target will initially be on genetic forms of Alzheimer's disease, like autosomal-dominant Alzheimer's disease or ADAD, but also cerebral amyloid angiopathy, which is caused -- which is genetically proven to be caused by duplication or mutation of the amyloid precursor protein. And this is a program. It's in partnership with Regeneron, who's our CNS partner. We actually lead the program in development. But we hopefully will get data from this program sometime next year, looking at knockdown of APP and cerebrospinal fluid in patients. And that will be a really important advance in our platform for CNS delivery because, obviously, what we've seen so far in animal models is the ability of achieving very robust knockdown of target genes. APP, we've knocked down 70%, 80% in nonhuman primates, with a durability that supports a biannual, if not even less frequent, maybe even an annual dosing regimen given intrathecal infusion. And that infrequent type of dosing regimen will really be important for our CNS program because it's been problematic for the ASO portfolio that our friends at Ionis had been trying to build. So that program, I think, is notable for many reasons. And I think the other feature that's really important is that unlike the antibodies that target only extracellular fragments of Abeta, we're turning off the production of APP upstream. And so we're going to impact both intracellular and extracellular Abeta formation, which is quite important pathogenically, we think. The next program I'll comment on is ALN-HSD, which is our RNAi therapeutic. It's currently in Phase I. It targets a protein called HSD17B13, rolls right off the tongue. It is, by my view, it is the PCSK9 of NASH. It is a genetically validated target, where loss of function mutations are known to be protective against liver fibrosis and inflammation across, frankly, a broad range of liver injury, not just steatosis but also other forms of liver injury. And this is an important target for us. It's a 50-50 collaboration with Regeneron. And we think we can open up -- finally open up the NASH indication using the power of human genetics and an RNAi therapeutic-based approach. And so that's in Phase I. That will be going into patients in the not-too-distant future. And obviously, we look forward to having data from those studies in the period to come. And then finally, just one quick mention. We have a gout program targeting xanthine dehydrogenase. So it's ALN-XDH, a very interesting program that we think can be disruptive in the management of gout. Gout's an area where there remains a lot of unmet need. Patients still have significant recurrence of their flares even with existing drugs that are out there. And so we think there's an opportunity here in another very prevalent disease to make an impact with RNAi therapeutics. So those are the 3 that I thought were notable, Joe, but I'm happy to answer any questions you have on the ones that I didn't mention as well.

No. That was great, John. Looking forward to seeing the initial data out of those programs. And we just have a minute or 2 left, but we do have a question from [ Gwen ] on TTR. How do you assess the competitive threat from gene therapy TTR programs?

Yes. I mean look, I think, presumably, that means gene editing in this case because that's the only other program that's in development. Look, I think it's -- gene editing is an exciting technology. It's really early, and I think people can just look at how challenging gene therapy has been to bring forward. So we'll have to see how the efficacy looks, especially variability, that we'll have to see how that looks. And we'll also have to see how the safety looks. But ultimately, the safety picture there is going to be a question mark around, unfortunately, malignancy that is a risk of off-target effects of a gene editing-based approach. I can tell you I'm really happy that we're targeting RNA. That is a, as far as I'm concerned, a much preferable approach. And when you have a drug like vutrisiran that's given once every quarter and possibly once every 6 months, I'm not sure how much room there is for a one-and-done type of therapy with all the technology challenges and then reimbursement challenges that, that will bring and so forth. So we're happy with our profile. I certainly wish them well. This is a big market, so there's ample room for many players to be out there. And if they're successful, which we hope they are, that will give patients more choices at the end of the day.

Okay. Well, unfortunately, we're out of time for this session. Thanks, everyone, for joining us on the webcast. And thanks again, John, to you and the rest of the Alnylam team for participating. And everyone, have a good day and a good rest of the conference.

Good. Thanks, everybody.