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

Good morning, everyone, and thank you for joining us. I'm Salveen Richter, a biotechnology analyst at Goldman Sachs, and we're really pleased to have Alnylam here with us. And with us from Alnylam, we have John Maraganore, CEO of the company.

With that, John, to start, can you review your P5x25 vision for 2025? And just comment on how you attain your goal of becoming a top 5 biotech company?

Yes. Well, Salveen, first of all, thanks for having us. Always a pleasure to be at this meeting even when it's virtual. So the P5x25 vision for Alnylam really is part of a decade-long heritage of setting 5-year goals at our company. We first started with Alnylam 5x15, which we launched in early 2011 and then Alnylam 2020, which we launched in early 2015. And this new set of 5-year goals, which we announced in January, is really focused on bringing transformative medicines to patients around the world for rare and common diseases, while delivering exceptional financial performance. There are 5 Ps that we highlight as part of these goals that includes: patients, performance, profitability, products as well as pipeline. There are specific metrics that we've outlined for each of those 5. And it really, I think, paints an exciting vision for what Alnylam can look like by the end of '25 if we achieve all of those goals, I mean, including 6 or more marketed products, pipeline -- clinical pipeline of over 20 programs in active clinical development with 10 or more that would be in late stages at that point in time. We're committing to over 40% of revenue growth, revenue CAGR between now and end of the year. So a very -- end of 2025. So a very attractive profile. And when we look at the profile that we'll achieve by the end of '25, when we look at other metrics, we believe that would support the top 5 company.

And maybe help us understand how you're thinking about business development? And I'm curious, is Alnylam an RNAi company? Or would you go beyond this in terms of therapeutic modalities? And how are you thinking of the toolkit?

Yes. Let's dissect that a little bit. So we have partnerships that we have formed with companies like Novartis, which is formerly the medicines company with Leqvio and Sanofi. For fitusiran, we have a very broad partnership that we have with Regeneron for CNS and ocular diseases. But partnering is not a core part of our strategy. We are, at this point, focused on retaining significant rights to the medicines that we discover and put into our pipeline. We have an organic product engine that's capable of delivering 2 to 4 INDs per year. And by the end of '25, we expect to be putting in 4 or more INDs per year. Again, organically, with no need for anything -- any innovation from the outside. So we are really very committed to RNA interference. We think it's a remarkable approach to target disease-causing genes at the level of mRNA. And we see no need for other modalities to build our business for the many, many foreseeable future years that we have in front of us. So it is to focus on RNAi, it is to build the pipeline, leveraging the advances we're making in our platform, not only targeting liver-expressed disease genes now, but also going after extrahepatic targets. We have been very, very successful in being able to achieve that. And candidly, Salveen, we think targeting RNA is the right place to go for medicine. There are many foils that are inherent in targeting other parts, if you will, of the genetic machinery like D&A and for example, with targeting RNA, we don't have to worry about unintended off-target effects that can lead to mutations or insertions or deletions, inversions, translocations, whatever the case might be, at the DNA level. And we think that's really important about the medicines that we bring to patients.

And how are you thinking -- or how are you evolving as a company to kind of stay at the forefront of this field where you are right now? And I think, secondly, you've really shown that you can target the liver. And when -- as you look to potential and other tissues, why did you start, I guess, with neuro as kind of your first approach? And then have you looked at kind of other modes of delivery here, too?

Yes. Well, I mean, look, we have been very successful in expanding beyond the liver. There's still a lot of wood to chop in the liver, Salveen, to be very, very clear. There's still a large number of targets. And for example, this year, we'll be putting in a program in gout that targets a liver-expressed disease gene, xanthine dehydrogenase. And we have a pipeline of programs that are liver specific. But on top of that, because of the success we've had on extrahepatic delivery, we are able to look at other tissues and other organs. And we've been successful most recently in the CNS as well as in the eye and the lung. We're particularly excited about the CNS opportunities because, as you know, there are many neurodegenerative diseases that are well-defined genetically and are characterized by a toxic gain of function of a specific protein. And we're about to put in our first RNAi therapeutic for CNS diseases in the coming months, that will be our first CNS program targeting amyloid precursor protein, which, of course, as of this week, has become a very exciting prospect. But obviously, we'll go into this in a very high quality, science-based manner and look at targeting APP for early-onset Alzheimer's as well as cerebral amyloid angiopathy. But obviously, the expansion opportunity into sporadic Alzheimer's is one that we've looked at as well and could advance sooner versus later. But clearly, the initial steps would be to show that we can get robust knockdown of amyloid precursor protein with our RNAi platform.

And then maybe just lastly, I just want to touch on this idea of coexistence with different technologies. So if you have knockdown as we may see in the liver now with gene editing, how do you think about how these 2 technologies coexist in the marketplace going forward?

Yes. I mean, look, I think that, first of all, it's wonderful to have new options for patients and new modalities that emerge. I think it's always great for patients, it's great for the industry as well. When we think about markets like ATTR amyloidosis, we think it's a market growth story, not a market share story. So from our perspective, there will be multiple approaches that reach the market and ultimately help patients that certainly today includes stabilizer drugs as well as silencer drugs like RNAi. But even in the silencer class, there's also antisense oligos in there as well, like inotersen and I think we've demonstrated our ability to compete very effectively in that market, and we intend to continue that leadership. When we think about gene editing in the space like ATTR, I think, obviously, there's a lot of stuff that has to get done there. It's still very early. Again, as I said before, even though we expect to see very strong knockdown based on the primate data, so we expect to see very strong results in humans from knockdown perspective. There's a lot of open questions on the safety side that will take years to really work out. And that's because the unintended consequences of cutting DNA and, of course, potential for unintended side effects due to that. With RNAi, we're targeting at the mRNA level that we love being at that stage of the overall process because we can get a very profound effect on protein levels without irreversibly targeting DNA. But even beyond that, when we look at a modality like gene editing, there's a lot to get done on the access side, for example, in that space. I mean ATTR is a disease afflicting people in their 60s, 70s and 80s and 90s. And the concept of having a one-and-done therapy that costs millions of dollars from an access perspective is going to be very challenging in that patient population. So we feel very good about the innovation that we brought forward, and we will continue to be very successful we project with the medicines that we bring forward for patients in that space in other markets as well.

Perfect. So moving to your TTR platform here. So ONPATTRO was the first approved therapy in the U.S. for ATTR with polyneuropathy and has been on the market for almost 3 years now. How should we think about the trajectory from here? What are the levers that are still there for growth?

Yes. Well, listen, we're very excited about ONPATTRO and how it's performed in the marketplace since we launched it back in late 2018. A reminder that ONPATTRO is indicated for the treatment of the polyneuropathy of hereditary ATTR amyloidosis. So it really is currently labeled for the treatment of a portion of the disease, namely polyneuropathy, in the hereditary segment alone, we're not yet approved and broader parts of the opportunity. We reported in Q1, $102 million in sales. That's our first triple-digit revenue for ONPATTRO. That represents 13% growth quarter-over-quarter. And in terms of where we see this going, certainly for this year and beyond, it's really around new patient finding. And new patient finding here is facilitated by post COVID by increasing flows of patients through the health care system. We've seen very nice recovery of patient flow-through, through hospital systems starting in March, in particular, and it's only increasing month-on-month as we progress past the pandemic. We also believe that there will be increased patient demand based on improved disease awareness, new prescribers is a source of growth for the ONPATTRO brand. And in terms of geographic expansion, there are really only a small number of markets left. We've been very successful in gaining access in over 30 countries around the world at this point in time. So in terms of growth, it's really going to be new patient finding versus geographic expansion for ONPATTRO.

So on that point, can we just talk a bit about diagnostics and how you can further enhance that to identify new patients? It always surprises me when I look at how many patients there really are in this disease area, but then where the diagnosis rates currently are. Could you just speak through this? Well, a, if you could just speak to that and what effort -- what levers you have there? But then also how the pandemic has been impacting you currently?

Yes. Well, I mean, let's unpack that question a little bit. For starters, we project for -- that there are approximately 25,000 to 30,000 patients with polyneuropathy and hereditary ATTR amyloidosis. And we've said publicly that as of the end of Q1, we had about 1,500 patients on commercial product. So we're just at the way beginning of penetrating that existing market opportunity. And what's really needed their, Salveen, is just better disease awareness, which is going to be facilitated by better medical education. We're making a lot of progress there, but there's a lot more that can be done. We have -- since we launched the product, we have been providing a free genetic testing through a third-party vendor for diagnosis -- for genetic diagnosis of patients. That, of course, helps physicians diagnose hereditary ATTR. They then have to, of course, identify whether the patient has polyneuropathy or not, which would make them amenable to ONPATTRO being prescribed. But the free genetic testing program, of course, is meant to help patients get identified more readily. The other aspect of diagnosis in this disease, which is really important, is the use of technetium scans. Many of the patients, especially in the U.S. market, who have the so-called V122I mutation, have a mixed phenotype. They have cardiomyopathy as well as polyneuropathy. And many of those patients are found through the detection of cardiac amyloid with technetium scans. And then when they're evaluated for having hereditary disease and then further evaluated for having polyneuropathy, they become potential patients that could benefit from ONPATTRO. But that dynamic has also been favorable over time. And while it did slow down during the pandemic, we've seen a nice recovery in the PYP scan rates across the country.

And just maybe how COVID is impacting your launch currently and what you think second half is going to look like?

Yes. I mean, look, I think we think the second half is going to be a lot better. I mean the first quarter, I think we did very well. We're really proud of the performance for ONPATTRO. But we did comment in our Q1 call that we saw things get only better in March compared to January-February. And let's not forget that January and February were the worst months on the pandemic and especially in the U.S. market, but also in other markets around the world. And so we do expect to see continued growth in a steady and continuous manner for ONPATTRO, and we aim to deliver on the revenue guidance that we've given for our combined product sales for the rest of the year.

And as you look to kind of the overall commercial landscape here for TTR, what's the current thinking in the field on silencers versus stabilizers versus combinatorial?

Yes. Well, look, I think, again, it's wonderful that patients and physicians have options here. Let's be clear that in the U.S. market, the stabilizers are labeled for cardiomyopathy and the silencers are labeled for polyneuropathy. So there is -- they're completely nonoverlapping labels. And of course, the silencer drug tafamidis is also labeled for wild-type ATTR and that currently does not exist for the silencer category. Now we're doing a lot of work and assuming clinical trials are successful, we aim to be, hopefully, knock on wood, approved in the cardiomyopathy setting, both hereditary and wild-type. But for right now, we're focused on the wild-type setting. The dynamic is actually quite interesting in rest of world. And the rest of world, tafamidis is approved in many markets for both polyneuropathy and cardiomyopathy. And it's interesting there. We see a lot of patients come on to ONPATTRO because they're progressing in their polyneuropathy while being treated with tafamidis. In fact, about 50% of our OUS patients are so-called tafamidis switches, again, because patients are progressing their tafamidis and are coming on to -- in their polyneuropathy and are coming on to ONPATTRO. And we don't see that dynamic as much in the U.S. because of the fact that, again, we have nonoverlapping labels. So instead, what we see a little bit in the U.S. is concomitant use. So patients who will have a mixed phenotype of hereditary ATTR are getting treated for their polyneuropathy with ONPATTRO and are presumably getting treated for their cardiomyopathy with tafamidis. And so that's a U.S.-based dynamic. And in the rest of world, we see more of the switch dynamic that occurs.

And as you mentioned, when you look to the expansion of ONPATTRO, you have the Phase III APOLLO-B study that's investigating the drug in patients with cardiomyopathy. What are the risks in your mind to that being a successful outcome?

Well, I mean, I think we are enthusiastic about the data that supports a positive outcome for the APOLLO-B study. If you look at the original APOLLO study, there were a number of exploratory cardiac endpoints that were published by Solomon et al. in circulation that point to an encouraging hypothesis generating set of results, including improvement in echocardiographic measures like left ventricular strain as well as intraventricular wall thickness. We saw improvements in NT-proBNP and we also saw a stabilization of 10-meter walk time in that study. And more recently, in a paper published by Fontana et al. in JACC, we've looked at serial imaging of cardiac amyloid in patients treated with ONPATTRO. And after 1 year of treatment, there is some rather impressive evidence of cardiac amyloid regression, both by serial technetium scans, but also by cardiac MRI. And so those data are encouraging and certainly support the hypothesis that we're testing in the APOLLO-B study. And the good news is that we've now completed enrollment in APOLLO-B. And in the middle of next year, we should have top line results from that study. And as a reminder, APOLLO-B is looking at 6-minute walk distance after 1 year of treatment is the primary endpoint.

And then you have the second-generation therapy, vutrisiran. How should we think about read through HELIOS-A data to APOLLO-B and HELIOS-B and just remind us of the design and status of this HELIOS-B trial?

Yes. While HELIOS-B is a double-blind randomized study, placebo-controlled study with vutrisiran. And vutrisiran is our subcu delivered RNAi therapeutic. It's already shown positive clinical results in the HELIOS-A study, which is aimed at getting vutrisiran approved in polyneuropathy. And the HELIOS-B study is evaluating it in cardiomyopathy. And here, we're using cardiac events and mortality as the primary endpoint after 30 months of treatment. Vutrisiran is a subcu drug given once a quarter. We've now recently initiated studies that will enable a biannual dosing regimen for vutrisiran. So it's going to -- if successful, it will bring an unprecedented level of freedom to patients with initially hATTR polyneuropathy, but then in the future, ATTR more broadly, if those -- the HELIOS-B study is successful. We -- with HELIOS-B, we recently announced that we're going to have it completed enrollment by the end of this year, which really represents a very significant acceleration from what we originally were expecting. And we're really pleased with how well the enrollment is going. It's a -- I think it's a good sign for how well the drug is being received by the physicians and the patient community. I mean a once quarterly subcu injection for that disease, which is a life-threatening disease, is obviously a very welcome option for patients.

So moving to GIVLAARI. What is the status here at the launch both in the U.S. and EU? And how are you leveraging lessons from ONPATTRO?

Yes. I mean GIVLAARI is a second RNAi therapeutic that we brought to market. It gained approval in late 2019, in November of 2019. And in Europe, it only got approval in April of 2020. So it's still a baby in its launch. Obviously, it did very well in its first full year of launch last year. We're really pleased with the performance. We achieved about $50 million in revenues. And in Q1, we reported $25 million in revenue. So we are looking forward to Q1 -- Q2 results as well. It also suffered a little bit in January and February from the peak of the pandemic, but we're eager to see its growth continue throughout the rest of the year. In the case of GIVLAARI, we also have the benefit of geographic expansion. So we're opening up new markets with pricing and reimbursement across Europe. And we also expect to have approval in Japan in the middle part of the year. So we should be selling product toward the end of the year in Japan as well. Japan might be a very attractive market for GIVLAARI. So we're obviously very committed to the product. It is providing a very important benefit for patients with acute hepatic porphyria. One of the opportunities, of course, is to also expand beyond the patients with the most severe numbers of attacks into patients with more moderate and even less frequent attacks. And part of the reason for that is that we know that patients have chronic pain in between their actual attack symptoms. And we believe that GIVLAARI can help them as well. And of course, GIVLAARI is indicated very broadly for the treatment of acute hepatic porphyria.

And how is the partnership with Ironwood helping yield more patients?

Yes. I mean we formed the partnership with Ironwood back in 2019 just when we launched the product. We really wanted to take advantage of their excellent engagement with gastroenterologists. We know that many AHP patients are initially seen by a gastro and the disease is often confused for IBS early on. And so helping with disease awareness in the gastroenterology community was what we were aiming to do with our friends at Ironwood, and it did lead to a significant number of patients being found. And the way the agreement is structured is they get compensated based on patients that they find through their channel and we pay them a royalty based on that as well. So it's been a win-win between the 2 companies. And obviously, we can always choose to reevaluate whether or not that's the right way to promote the drug with them or not. But so far, it's been successful for us.

And on OXLUMO here, remind us again what the status of the launch looks like? And how the VBA agreements are being received from payers?

Yes, absolutely. Well, OXLUMO is the baby in our portfolio, only got approved last November in the U.S. and the EU. And we're really proud of it in the sense that it's the first pediatric drug, RNAi therapeutic that's been ever approved. And the launch is going really well. We had a very strong first full quarter in Q1, showing about $9 million in sales for Q1, with a very strong performance out of Europe as well, mostly out of Germany, where we, of course, get reimbursement right away and also out of our French ATU and some new patient sales as well. But the U.S. results was strong in the first quarter. So I'd say the launch is going well. This is a patient community, where diagnosis rates are a bit higher than, let's say, GIVLAARI, for example, in porphyria. Especially in the pediatric segment, where if the child is having kidney stones, it doesn't take them long to get to a pediatric nephrologist to get diagnosed with PH1. And obviously, we're really pleased with the clinical results that we presented for OXLUMO showing very striking reductions of urinary oxalate. And more recently, we've shown some data looking at improvements in nephrocalcinosis, which really is a very encouraging sign, especially after a year of treatment with OXLUMO. So, so far, so good. To your point, we do have VBAs. Actually, all of our products have VBAs. We have over 30 VBAs, and we've set them up with OXLUMO as well, and they are being very well received. The payer community has adopted -- has really embraced the approach that we've taken to put our money where our mouth is on reimbursement. And we're pleased with how that's going. We've seen no significant payer headwinds right now for any of our products and certainly not for OXLUMO either.

And on inclisiran, what is the status of the resubmission of the NDA at this point?

Yes. Novartis has guided that they'll resubmit in the second or third quarter of this year. More recently, Vas had a commentary in an analyst conference and indicated that they had a successful meeting with the FDA. They are encouraged by that meeting. So our fingers are crossed that the CRL will be addressed relatively soon. Again, there was nothing about the clinical side of it that led to the CRL. It was completely related to inspection of a foreign site by the FDA, where they weren't able to visit the site due to COVID. And we believe that Novartis is completely all over it. It's a very important product for them. And they've already launched in Europe, and they're doing filings around the world. So this will be probably the most widespread RNAi therapeutic until our hypertension program in the future.

So turning to that hypertension program here, where you showed, I think, a greater than 15-millimeter market reduction in monotherapy Phase I data. Can you just review for us the opportunity here of using this drug on top of oral therapies versus monotherapy? And just how the Phase II trials will really kind of lay out the commercial strategy?

Yes. Well, I mean, we're extremely excited about this program, Salveen. It is an opportunity to reimagine the treatment of hypertension, a disease where there's really been no innovation for decades, as you know. And the reason we're optimistic about how we can provide differentiated impact in that disease is that the unmet needs today are driven by really 2 things: one is the absence of tonic control of blood pressure as well as the problem of adherence to therapy that is seen by patients. Over 50% of patients stop taking their antihypertensive drugs within a year of their initial prescription. And in terms of tonic control of blood pressure, this is a major problem with orally administered drugs that have peak and trough pharmacokinetics. And of course, the consequence of that is patients experience significant problems with nighttime blood pressure control, in particular. And that's an opportunity for ALN-AGT because we achieve clamp pharmacology, clamp knockdown of angiotensinogen, and we've shown with the once quarterly or once biannual type of treatment regimen, the ability of achieving very impressive blood pressure lowering after just a single injection given months prior to the measurement that we take. So we think that this is going to be a very potentially disruptive approach to deal with what is today the #1 cause of cardiovascular morbidity and mortality around the world and a real public health crisis, to say the least.

And then with the CNS franchise that we're going to start to see the first data coming up with ALN-APP, any clarity here on what indication you plan to target? And I guess, the read that you would have from this program to the rest of the CNS portfolio?

Yes, absolutely. So ALN-APP targets amyloid precursor protein, and it's based on work that we've done at the company to extend our platform into the CNS with intrathecal administration. And we've shown in nonhuman primates the ability of achieving the 70% to 80% of knockdown of amyloid precursor protein as measured in the CSF of primates with the durability that we think supports at least a biannual dosing regimen, if not even a less frequent dosing regimen, which is, of course, really important if you're giving an intrathecally administered drug, as you can appreciate. So the initial IND will go in shortly over the next few months. Midyear is our target. And we should have clinical data sometime next year. And if we were able to reproduce the primate result, of course, it will be a milestone event for RNAi therapeutics because just like we achieved hepatic delivery with our platform, being able to show CNS delivery and knockdown of a target gene in the CNS will, of course, be itself a very important milestone for the field without a doubt. But as it relates to the clinical development of this program, the focus really is initially on adult -- I'm sorry, autosomal dominant Alzheimer's disease as well as cerebral amyloid angiopathy. But obviously, we can look at more sporadic forms of Alzheimer's disease, especially if the approach for approval might really relate to reducing amyloid plaque, and that certainly supports the consideration that we'll look at very early on with this program.

And so when we see this data, I guess, what is the clinical bar for success here? Or what gets you comfortable to kind of move forward into next steps?

Well, if we're able to achieve over 50% lowering of amyloid precursor protein in humans as measured in CSF and that includes a beta fragments that we would measure in the CSF, that really is a home run because it tells us that in the anatomy of a human, that we're able to get sufficient distribution of our drug across the CNS, including deep regions of the brain that allow us to lower CSF levels of APP by at least half, right? And that would be a very important achievement. And certainly, a biomarker that would support further development going into a Phase III program.

All right. And I guess, maybe just a final question here. From your pipeline, what are you most excited about? And what do you think is this underappreciated by The Street?

Well, I'm excited about our transition into more prevalent diseases, whether it's the cardiomyopathy opportunities with our ATTR effort or the AGT effort, but also a program in NASH, targeting HSD17B13, which is a genetically validated target in NASH, also a program targeting PNPLA3 and then a program that will go in the clinic this year in gout, targeting xanthine dehydrogenase, a lot of unmet need for a drug that could provide more effective control of flares in patients with gout as well. And these are all exciting programs that are going to be part of Alnylam's transition beyond rare diseases to more prevalent diseases as well.

And then, I guess, as you think about the earlier stage pipeline, how are you allocating resources to these various kind of tissue types or disease areas as you validate that target or that tissue target?

Yes. I mean, look, it's a great part of the story because once you open up a tissue, you then obviously can start building in a very modular fashion a series of programs. So in the CNS, for example, we'll start with APP, but soon after we have program in Huntington's and there are at least a dozen programs as part of our relationship with Regeneron in the CNS. In the eye, we have a number of programs, half a dozen programs that we're advancing with Regeneron. And so we look at every tissue that we open up as a door to a pipeline across the broader portfolio. Going forward, we'll have 1 to 2 INDs per year of our 2 to 4 that will be extra hepatic, all right? So in terms of how we think about the capital allocation, it's roughly 50-50 between hepatic and extrahepatic. And as we get to 4 or more INDs in the -- per year starting in 2025, we'll obviously look at across where we've achieved good delivery to see where else we might expand our portfolio.

Great. Well, with that, thank you so much, John. Really appreciate your time today.

Great to see you, Salveen. Bye-bye, everybody.

Bye.