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

Hello, and once again welcome to the 19th Annual Morgan Stanley Healthcare Conference. I'm one of the biotechnology analysts here. My name is David Lebowitz. Before we jump into the next session, let me just go through the requisite disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. I'm getting very good at that, reading the disclosure there.

So I'm very happy to have with me in the next session from Alnylam, CEO, John Maraganore. As always, I'm very happy to have you here. Let's start with the long-term vision. What is the long-term vision for Alnylam? And how has it evolved over the years?

Yes, David, first of all, thank you for having me. It's always a pleasure to be at this meeting even virtually. It is great to be here. It's great to see you. Well, listen, Alnylam is at a very exciting stage of its development. We are the leaders in RNAi therapeutics, a whole new class of medicines that we pioneered. We brought 4 RNAi therapeutic medicines to market, 3 that we're directly commercializing globally at Alnylam, and we have a potential fifth RNAi therapeutic that's in registration in the U.S. and very soon in other parts of the world. On top of it, we have over a dozen programs in clinical development and are delivering sustainable innovation at the company with 2 to 4 new INDs per year from an organic product engine, something which is actually quite unique in the biotech industry. Now in terms of our plans, it's pretty clear in our 5-year plan that we announced earlier this year, Alnylam P5x25 that we're committed to advancing transformative medicines for patients around the world with both rare and prevalent diseases, while also delivering exceptional financial performance. And that's our 5-year strategy and 5-year goals. And it really builds on a decade-long heritage of 5-year plans that we have traditionally performed quite well against. And so we're excited about this new 5-year installment.

So you started about excellent operating performance. You mentioned ONPATTRO approved a couple of years ago. Launch has clearly been successful for the drug. What do you think are the biggest barriers going forward for continued growth of the product? And how do you plan to deal with these hurdles?

Yes, absolutely. Well, first of all, let me remind the audience that ONPATTRO is indicated for the treatment of the polyneuropathy of hereditary ATTR amyloidosis in adults. We're obviously doing additional investments in patisiran which is the nonbranded name of the product in other parts of the disease indication, but our commercial execution really is in the polyneuropathy space. And to your point, we're really pleased with our performance. We did $114 million in global net product revenues in Q2, representing 12% growth globally versus Q1 and now have over 17 -- 1,725 patients that are currently on commercial product as of quarter end. Now in terms of the barriers, I think it really on the execution side, it really relates to COVID and how we navigate through COVID. We've done quite well on that, as you know. We -- obviously, Q2 of last year, was a bit more challenging, but we've seen growth ever since that point in time. And so that probably is the really only remaining barrier. Otherwise, we continue to find patients. We -- obviously, the growth is going to be driven by new patient finding in the case of the polyneuropathy setting. And we're still at a small fraction of the total potential when you look at the sort of 20,000 to 30,000 patients worldwide that have got polyneuropathy as part of hereditary ATTR. We're currently only at 1,725. So a lot of growth opportunity that we have going forward. Obviously, it's driven really by excellence in new patient finding.

So you had some positive data for the follow-on subcutaneous, which is clearly going to be a lot easier for patients than an intravenous that's delivered once every 3 weeks. Is there still a place for once fitusiran enters the market?

Yes. Well, first of all, I couldn't agree more that fitusiran is really going to be an important advance in the field. We had a very successful HELIOS-A study that we reported earlier in the year with our initial 9-month data. We'll have 18-month data that will be presented later in the year, and we filed our NDA and have a PDUFA date of April 14 of next year. What's exciting about fitusiran relative to ONPATTRO is that it really will provide very comparable levels of efficacy compared to what we've established with ONPATTRO, while giving patients a very favorable profile from a rooted administration standpoint, a quarterly injection, small volume injection once every 3 months. And as you know, we're also making investments to extend that to once every 6 monthly dosing as well. And so we think patients are going to have an almost unprecedented level -- if approved, of course, will have an unprecedented level of freedom from their disease given this very favorable treatment regimen that will happen with fitusiran. But we still expect ONPATTRO to continue to be used in many patients. Many patients who have done extremely well with ONPATTRO will elect to continue to receive ONPATTRO as their therapy of choice. Oftentimes, as you know, patients don't like to switch from a therapy if it's doing well for them. And then you also have to keep in mind that there are markets around the world where it will take time to get pricing and reimbursement for fitusiran. So we may have markets in Europe, for example, or in other parts of the world, where ONPATTRO will be the only product that is reimbursed for some time to come. So there will certainly be a switching that we expect to happen between ONPATTRO to fitusiran. There'll certainly be some adherence to ONPATTRO as the brand of choice for some patients. And then, of course, there will be this sort of transition that occurs naturally when we have to go through global pricing and reimbursement processes around the world.

Now the market is changing. You have stabilizers out there, more stabilizers that will eventually arrive. I guess -- and there's this overlap population for fitusiran that while there's -- it's indicated for polyneuropathy, a lot of patients with polyneuropathy also have cardiomyopathy. So how has your experience been with tafamidis thus far? And could you, I guess, compare that not only looking at what's going on in the U.S., but what's going on in Europe as well?

Yes. Your last point there, David, is really key because keep in mind that in the U.S., ONPATTRO and tafamidis have nonoverlapping labels. So obviously, tafamidis is approved for treatment of cardiomyopathy in hereditary and wild-type ATTR, and ONPATTRO is approved for the treatment of the polyneuropathy for hereditary ATTR. Compared to the rest of world where, as you know, tafamidis has a broader label, it includes polyneuropathy. So we compete more directly with polyneuropathy in the rest of world than we do in the U.S. where tafamidis is not approved for polyneuropathy. So that's an important distinction. What we see in the U.S. market is that for patients that have so-called mixed phenotype, if they've got a significant polyneuropathy burden of disease, they are often treated with ONPATTRO at the same time that they might be treated with tafamidis for the treatment of their cardiomyopathy. In the rest of world, what we see predominantly is a switching phenomenon. So about 50% of our ex-U.S. patients come on to ONPATTRO because they're being switched from tafamidis. Now presumably, that's because they're progressing in their polyneuropathy disease while on tafamidis, which has been described in the literature, and that's why they're being switched at that point in time. So different parts of the world have slightly different dynamic based on the nature of the approvals that have been given so far.

Now going over to cardiomyopathy, it's evolving there as well. Certainly, you have some data coming up in next year, and there could also be an interim analysis. So APOLLO-B data for ONPATTRO and an interim analysis potentially on the horizon although timing yet to be determined for fitusiran. There's also some additional stabilizer data coming on the market from another competitor. How is the cardio space going to evolve in the United States?

Yes. Well, first of all, I think you have to start by remembering that this is a very large opportunity, the broader cardio market, especially when you include wild-type ATTR, where there are perhaps hundreds of thousands of patients in the U.S. and Europe compared to the hereditary ATTR segment that we're currently approved in, which is somewhere between 20,000 and 30,000 patients worldwide. So it really is a 10x larger market. And overall, we do view this setting as a market growth story, not a market share story, one where we believe there will be multiple treatment options that emerge for the benefit of patients, depending on how clinical trials read out and how approvals take place globally. But there will be multiple programs that we -- or products that we expect to be on the market all at the same time. And it's not too dissimilar than what we've seen in other markets like MS or rheumatoid arthritis, where multiple agents can be available. We think with our TTR silencer mechanism of action that we have an opportunity in the cardiomyopathy space, again, pending clinical data to show a really attractive efficacy and safety profile. Of course, that has to bear out in the clinical studies. Our existing exploratory endpoint data from the APOLLO study really point to an ability to provide potential efficacy features that we think will be very attractive. Now we have to bear that out in the Phase III. And we've seen similar things with the fitusiran HELIOS-A study, where we had exploratory cardiac endpoints as well, and so very encouraging results there. So we think the mechanism of action of knocking down TTR is really going to be what differentiates the TTR silencer class that we, of course, are leaning in as a company compared to the TTR stabilizer category, which includes tafamidis, but also acoramidis which is the BridgeBio molecule that is expected to read out data later this year.

How do physicians view TTR silencing versus stabilizing? Do they -- can stabilizing achieve near the magnitude of benefit as silencing?

Well, our data here is really based on market research. And of course, we're -- our drugs are still investigational in the cardiomyopathy setting. But what we do hear from physicians and patients is that they identify significant unmet medical need in the cardiomyopathy setting even with the availability of existing drugs, namely the tafamidis TTR stabilizer class. And so there really is the view in the physician community that a TTR silencer mechanism of action potentially, again, depending on the clinical studies, can add additional treatment options for the benefit of patients. And we'll have to see how the data reads out ultimately. But if they fulfill our expectations, it will be a wonderful option for patients to have a silencer based agent available to them in addition, from a choice standpoint to the availability of a TTR stabilizer drug like tafamidis.

Do payers give any pushback when it does come to the overlapping patients to pay for both?

So what we've seen in the U.S. market is that patients are achieving reimbursement for their ONPATTRO even when they're receiving other drugs that could be obviously tafamidis or in some cases, patients are given diflunisal, which is a generic nonsteroidal, which is also used as a TTR stabilizer. But we're seeing -- we continue to see excellent reimbursement for ONPATTRO even in patients that might be treated with other agents for their cardiomyopathy. Of course, we're being used to treat the polyneuropathy. And I think that's a favorable aspect of the landscape right now that we'll see how that continues over time. It's a different story in Europe and other markets, where we don't see much evidence of combination use. But I think while at one level, it might be a reimbursement issue, I don't think it is. It's really the fact that the labels are not overlapping in the rest of world. And so when patients have advanced polyneuropathy, they oftentimes get switched on to ONPATTRO in the rest of the world.

Now later this -- next year, you have APOLLO-B data coming up. The primary endpoint is 6-minute walk. The key secondary end point, I think probably in a lot of investors mind is just comparing it as far as all-cause mortality and hospitalizations. How would you characterize the importance of these primary endpoints versus secondary endpoint? Do you need both of them ultimately to get approval? And obviously, not just getting approval, you want to be viewed as being the greatest therapy. So how will they compare?

Well, APOLLO-B, and we're excited about that study because it will be the first randomized clinical study of a TTR silencer drug in patients with both hereditary and wild-type ATTR cardiomyopathy. So really is an important study and a definitive study. As I said earlier, there's really quite a bit of encouraging data that supports the -- what we expect to be a positive result in the APOLLO-B study. The 6-minute walk distance data really are going to be important for physicians in terms of understanding the activity of fitusiran in that specific setting. And whether or not we're able to show clinical results in a relatively small study compared to HELIOS-B, which we'll get to, and I'm sure just in a minute, over a 1-year time period, which is relatively short, I think that's not what an expectation should be based on. I think the 6-minute walk distance primary endpoint is really what we're aiming to achieve significance on, which, if positive, we think, will support strong utilization of ONPATTRO in many patients with both hereditary and wild-type ATTR cardiomyopathy.

And with that, let's jump over to HELIOS-B. Certainly, one thing investors are focusing on is the interim analysis as I could theoretically pull forward when an approval could come. What can you tell us about the interim analysis. I mean, to some extent, I think you're waiting for APOLLO-B to decide what's going to happen. But what can you tell us about what we can expect?

So maybe just to remind everybody, HELIOS-B is a randomized, double-blind, placebo-controlled study of fitusiran, our subcu drug in patients with both hereditary and wild-type ATTR cardiomyopathy. And the primary endpoint is read out at 30 months, and it is mortality and CV events. So it's a hospitalization and mortality outcome study. So a very, very important study to really have the definitive evidence around the safety and efficacy of TTR silencer agent in this important clinical indication. We are, of course, in the protocol, we do have the design to do an interim analysis in the study. We can wait and we will wait till the APOLLO-B data readout so that we can have a sense of the mortality and CV event rate so that we can have a better read on when and how to conduct the interim analysis. And so when we have those data in hand, we'll be able to engage with regulators on achieving alignment about the interim analysis for HELIOS-B. Now in the meantime, we were able to complete enrollment of HELIOS-B way ahead of schedule just about a month ago. And the benefit of that is that we now have even with a 30-month endpoint, an early 2024 readout of that study. So the interim might be able to accelerate that into 2023. Probably realistically, that's the type of time frame that investors should expect if we do that interim analysis. But on the outside, we're really talking about early 2024 for the full study to read out.

Does the fast enrollment kind of run the possibility of creating a GIVLAARI effect? When the enrollment happened so quickly in that study, the amount of time between final data and interim data just condensed so much that it was just elected to wait for the final data. Is that something that could happen?

It certainly is a factor, David, but it's partially mitigated the HELIOS-B study with a much longer time period for the primary end point. As you remember, in the ENVISION study for GIVLAARI, the primary endpoint was at 6 months. And so that created the hockey puck shape of enrollment, which is also true with HELIOS-B, gets compressed in terms of the juice from the squeeze on an interim analysis in a short endpoint type of study. In the case of HELIOS-B, that's not the case because it's a longer endpoint period.

I like that, the juice from the squeeze, can I use that going forward?

You're welcome to it.

Let's go on to GIVLAARI. Launch has been successful to this point. Certainly, I think ahead of a lot of people's expectations. How easy has it been to find patients? That was certainly a question mark that everyone had about this indication? And has your opinion on the size of the market shifted at all since launch?

Yes. Well, first of all, GIVLAARI, we're really pleased with GIVLAARI's launch. It is our second product that we brought to market and did that in 2019 -- late 2019. So 2020 was its first full year. And as of June 30, we put over 270 patients on commercial therapy worldwide and reported $31 million in global net product revenues with 24% quarter-on-quarter growth versus Q1. So it really has been, I think, in our view, a successful launch so far, especially in an ultra-rare orphan disease where patient finding is so critical. We're doing a lot on disease awareness and medical education to help physicians find these patients. As you know, David, the disease symptoms of acute hepatic porphyria can be overlapping with a broad range of other diseases, IBS, other idiosyncratic diseases, unfortunately. So it is important to help educate the medical community around this disease as part of our overall patient finding effort. The other aspect of the growth opportunity for GIVLAARI is the fact that we're just at the beginning of P&R in a number of markets around Europe. So while we've been successful in some markets, Germany, France, also Italy, there are other markets to open up in Europe. And we just achieved approval in Japan. So we're obviously at the beginning of our Japan journey for GIVLAARI, and not too long ago, got approval in Brazil. So we do think that the benefits of geographic expansion from pricing and reimbursement, our disease awareness efforts as well to help improve medical education will continue to fuel steady and continued growth of this brand. And ultimately, we do expect this to be over $500 million annually at peak revenues in the future.

Let's jump over to OXLUMO. There's a lot of similar dynamics with that therapy. Could you compare and contrast what these 2 launches could look like versus each other?

Yes, absolutely. And you're right to say that there's a lot of overlap between the 2. They're both ultra-rare orphans compared to obviously ONPATTRO and fitusiran which is a more classic orphan market with tens of thousands of patients versus single-digit thousands of patients in both primary hyperoxaluria and acute hepatic porphyria. And as a reminder, OXLUMO is our RNAi therapeutic for the treatment of primary hyperoxaluria type I, and it got approved late last year in 2020. So we're not even a full year into the launch of this important product, which is also our first pediatric medicine. Here, of course, disease awareness also remains critical, particularly in the adult segment of the disease. In the pediatric segment, patients, young children that are demonstrating kidney stone events, they're going to be taken relatively quickly to a pediatric nephrologist, and relatively soon thereafter, will get diagnosed with PH1, and then they become eligible for a drug like OXLUMO. It's in the adult market really where there's a lot of disease education that's needed for patients that might have had a milder course of disease in their youth period, that over time is still progressing towards end-stage renal disease. And so that's the area where a lot more work has to go on to really improve disease awareness, and we're doing a lot of work in that area as a result. But so far, so good with that launch, and we're excited about the product. It too is only at the beginning of its pricing and reimbursement journey in Europe. And so there will be geographic expansion as part of how we grow that brand.

Now if we jump over to Leqvio. What I find interesting is that I believe it might be the first time I've ever seen a New Year's Day PDUFA date. I'm assuming they'll probably not do it on New Year's Day itself, but you never know.

I'll give you another thing. You probably haven't looked at your calendar, that happens to be a Saturday as well. So I think the likelihood of it happening at December 31 at the latest is pretty high.

Yes. I would tend to think so. With that in mind, update us on the process, clearly, this year has been kind of a challenge with it and what we can expect to see going forward?

Yes. Well, look, I mean, Leqvio is really going to be an important product for Novartis and because of our economic participation in the brand. It's going to be an important product for Alnylam as well. We have royalties up to 20% on the product, which we now share 50-50 with Blackstone. We did a partial monetization last year with that product. And they launched the product largely in Germany and Austria at this point in time. They've now opened up some other markets. They'll talk about that. But they are waiting for U.S. approval. And I think the U.S. approval is really going to be critical for the product, and they've resubmitted the NDA following the complete response letter that they received at the end of last year linked to the need for the FDA to do an inspection of a facility for drug product supply. And importantly, there were no issues from the FDA on clinical or any aspect of the product other than that, not clinical. So we're optimistic about its approval, certainly by the PDUFA date in the U.S. and obviously believe that Leqvio can be a very important medicine for the treatment of hypercholesterolemia globally, but also in the U.S. market. What I'm very excited about with Leqvio is the recent agreement with the National Health Service in the U.K., where, together with the U.K. government, Novartis has formed an agreement that will enable the treatment of over 300,000 people in the U.K. with Leqvio for the prevention or for the treatment of hypercholesterolemia, which obviously is identified as a public health risk for other CV morbidity and mortality. And that very, very innovative agreement is something which we believe will rapidly accelerate the availability of Leqvio to patients in the U.K., and it really forms a template for other types of agreements at Novartis, I'm sure, will look to form with other governments, but also system providers in the U.S. market. David, are you on mute?

If you could tell us about your progress on hypertension, that would be great.

Yes. Fantastic. Yes. No, we're excited about zilebesiran, which is our formerly ALN-AGT program. It's really an opportunity to reimagine the treatment of hypertension, a disease which has not really seen innovation in decades. It's fair to say. And what's really the problem in hypertension is that patients do not achieve control of blood pressure with existing antihypertensive drugs. And then on top of it, patients are poorly compliant, well over 70% of patients stop taking their antihypertensive meds within a short period of time after the initial prescription. And so if you don't take the medicine, as C. Everett Koop said, you're not going to get the benefit. And so a drug like zilebesiran really has the ability given its very infrequent dosing regimen, combined with the consistent plant pharmacology to provide both an adherence benefit as well as a benefit on achieving tighter control. And we just started our Phase II program with the product. We'll have more data that we'll present hopefully at the Heart Meeting in November, later this year from the Phase I. But the Phase II is now up and going, and we're well on our way with that program. We hope to have data by the end of next year from the Phase II program, which would then position the product to start going into Phase III, not too long after.

And with that, let's jump straight over to fitusiran with our 2 minutes left. You have data coming up next year. How does this space with emicizumab? How does the competition shape up for the therapy? I feel like it's been -- fitusiran has been long overlooked by The Street. And I'm certainly curious to hear what type of opportunity you think that is?

Well, look, I agree with your sentiment on its being overlooked. I think fitusiran can be a very transformational medicine in the hemophilia setting, especially in patients with inhibitors. But even in patients that are taking routine factor and in particular, in the hemophilia B space, where there really are no significant competitive agents out there like Hemlibra, which is emicizumab. So we believe that fitusiran is a once every 2 monthly subcutaneous injection, can really provide an exciting treatment option for young boys and men and older man with hemophilia A or B with and without inhibitors. But it's really in that hemophilia B segment where we think we can be very -- effectively be the only subcu treatment option that can emerge in the near term. And then in the hemophilia A segment, we will compete and that we have a very competitive profile to compete as data reads out against Hemlibra. There are also other advantages of fitusiran that are meaningful in this setting, including the fact that it doesn't require cold chain storage, which really is a very nice feature of the drug.

And with that, I've got 1 more question for you, and that is on cemdisiran for IgA nephropathy. You're expecting data later this year. What can we expect to see there?

Well, I think the key thing is to see really as a monotherapy, how cemdisiran performs in IgA nephropathy, which is really a leading cause of glomerulonephritis globally. But on top of it, the other part of the cemdisiran story is the work we're doing with Regeneron, combining it with Pozelimab which is their anti-C5 antibody, and they've committed to start a Phase III program on the cemdisiran/Pozelimab combination in myasthenia gravis later this year. And we believe that has a very, very attractive profile of achieving a subcutaneously delivered once monthly and potentially even less frequent dose regimen for the treatment of myasthenia gravis, which, of course, is a very attractive opportunity for an innovative anticomplement agent.

And with that, we've come to the end of our time. Again, thank you very much. Look forward to chatting again with you soon.

Fantastic. Thank you, David. Thanks, everybody. Bye-bye.

Cheers.