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

Good morning. My name is Ted Tenthoff, and I'm a senior biotechnology analyst at Piper Sandler. Thank you for joining us for this year's Virtual Healthcare Conference. As you well know, Alnylam is the leading RNAi company, now with 3 wholly owned approved medicines and a partner product with Novartis approved in Europe, plus a really rich and exciting pipeline of future therapies. Here with us today is CEO, John Maraganore, who recently announced his intention to retire from Alnylam. And before we begin, I just want to thank you, John, for everything you've done for patients, investors, biotech community, for me in teaching me this business over the last 18-plus years. I remember when we were taking Alnylam public in 2004, and you had a vision to create a novel therapeutic modality. Well, you've accomplish that ambitious goal and much, much more. Alnylam is now a $20-plus billion company with a clear path for future growth. And John, thank you for everything you've done sincerely.

Thank you, Ted. Those are very, very kind words. I really appreciate those words from you.

So John, start off by telling us, why is now the right time to transition? Maybe provide us a high-level view on where Alnylam is at?

Yes, absolutely. Well, Ted, first of all, let me just say for you and the audience, and you know this already, this is actually my last fireside chat or my last investor panel that I'll be doing as the CEO of Alnylam. And I so grateful to all of the investors who have supported us over the years and Ted to you as well. And one of the reasons I wanted this to be my last opportunity here to talk to people is that you have -- you took us public, you were part of the team that took us public back in 2004 and followed the company ever since then. And so it is completely fitting that this is happening today here at this wonderful conference. Now regarding my decision to transition, I was -- I've been the CEO of Alnylam for 19 years, which is -- the average life cycle for CEO is like 5 to 7 years, I've practically 4x-ed it. And so it really has been a remarkable journey, and I could not be more proud of what we have built here at Alnylam and what we've accomplished to bringing a whole new class of medicines, forward is such a rare event, as you know, in the industry. And I'm making this decision because I want to do another chapter before I can't any longer. And I'm turning 60 next year, and this is a good time to sort of start a new 10-, 15-year chapter in terms of my professional career. And it's also a great time to do this transition from an Alnylam perspective. Because the company could not be in a stronger position with 4 medicines that we brought to market with a remarkable clinical pipeline and a source of organic and sustainable innovation from the product engine that we built over the years. And to some extent, I have to say it's almost as if the company is in an autopilot mode, not -- that's nothing -- it's not completely true, there's nothing like autopilot in any aspect of running a company. But to some extent, there's just a steady flow of how this company will continue to deliver medicines to patients with very little doubt that it will continue to do that. And then finally, of course, I have a remarkable successor here that is just the right next person to take the company forward as it grows and scales as a global biopharma, and that's Yvonne Greenstreet. And she is a terrific leader. All of you are going to love getting to know her in the years to come, but she is a terrific leader. And I'm really proud of the fact that I'm leaving the baton with a woman leader who is also a diverse woman leader. And that's the way it should be, and we should find more of these type of leaders in the industry and do this more significantly across biotech. So this is the right time to do it. Alnylam is firmly on its path toward its Alnylam P^5x25 strategy. It's a really bold strategy, but it's one that is going to continue to deliver transformative medicines to patients around the world, not only in the rare disease setting, but also in the prevalent disease setting. And I have no doubt that the team here is going to meet or exceed those 5-year goals.

So John, ONPATTRA has been an unequivocal success, almost 1,900 patients on therapy in more than 30 companies, almost $0.5 billion in forecast sales this year and continuing to grow. Importantly, you have plans to expand the label to include hereditary ATTR cardiomyopathy and also wild-type patients. Tell us about the APOLLO-B trial? When could we get data? And what will that do for the market?

Yes. Well, look, we're very excited about the potential for patisiran in ATTR amyloidosis more broadly. Again, as a reminder, today, it's labeled for the treatment of the polyneuropathy of hereditary ATTR amyloidosis in adults. But with additional studies that we're doing -- randomized studies that we're doing, we're obviously aiming to expand the opportunity and expand the label. And to your point, APOLLO-B is our key study for Vutrisiran, which is a randomized, double-blind, placebo-controlled study with 6-minute walk distance as the primary end point. And we should have data from that study next year, in the middle of next year. It's going to be, I think, one of the major catalysts that come from Alnylam in 2022. And one that I'm really excited to see the results of when the results are presented. We completed enrollment in May of last year, so add a year for treatment, add a month or 2 for generating database lock and analysis. And we should all be seeing top line sometime in the July time frame of next year. So we're excited about the study. We believe that if positive and if regulators approve the drug, it will expand the opportunity for patisiran into the wild-type ATTR setting, which, of course, is probably a 10x growth opportunity from where we are today in the polyneuropathy segment. So it really is a meaningful opportunity for helping patients with more evidence and more support, and we're really looking forward to it.

Awesome. And Vutrisiran is a subcutaneous less frequently dosed version of Patisiran. And you reported positive Phase III HELIOS-A data in polyneuropathy and actually have a PDUFA date of April 22, if I remember correctly.

Correct.

Tell us what Vutrisiran does for patients with polyneuropathy and then we'll get into sort of your plans to move into cardiomyopathy?

Yes. Yes. Well, look, as a once a quarter subcu medicine, which we're also working to enable as a once every 6 monthly subcu medicine, we think it can be transformative for patients. I mean today, obviously, ONPATTRO is making a meaningful difference for patients with the polyneuropathy of ATTR amyloidosis, but it does require a once every 3 weekly intravenous infusion. It also requires premedication. And the ability of having a medicine like Vutrisiran, which is going to really change the overall burden of treatment story for patients, I think it will be really a welcome option for the patient community and the physician community as well. It will still be a physician-administered medicine. So it will still be covered under Part B for Medicare patients. We think that's a better way to do it anyway. And we think once quarterly will really provide patients with a whole new freedom from their disease, not only will they hopefully get the benefit and we know already for the top line that the data are extremely comparable to what we've seen with Patisiran historically in the original APOLLO study. So with all the nuances of cross-study comparisons, of course, we do think that everything has lined up very, very nicely. But of course, Vutrisiran is given once every 3 months as a subcu injection. And so that's going to be really exciting to bring to them.

And then you guys have completed enrollment, I believe, of HELIOS-B, again for cardiomyopathy and wild-type patients. How is about this trial and when we could get data from HELIOS-B?

Yes. Well, HELIOS-B is our outcome study that we're doing is with Vutrisiran, again, in a quarterly dose regimen. And we're using mortality and CV hospitalization as the primary endpoint that reads out at 30 months of treatment. So it is a large study compared to APOLLO-B, it's a 600-patient study. We've completed enrollment. The duration of treatment, as I said, is 30 months. And so if you look at the time from which we completed enrollment and fast forward to where we should have our top line, we're talking about early 2024 is when we should have top line. Now there is the opportunity to consider an interim analysis that we could do, we're going to make that decision or Yvonne will make that decision, I should say, after looking at the APOLLO-B data because we can see from APOLLO-B what we might expect on the mortality and CV event rate out of the APOLLO-B study that will be very informative to consider whether it would be prudent or not to do an interim analysis. But if we don't do the interim, it really would be early 2024 when that reads out. And that would enable -- if positive, that would enable Vutrisiran with outcomes data to support its use in the community, which we think would ultimately be very strong and very positive, again, if the study is positive for this medicine.

Yes, it's clearly working on target. At your R&D Day recently, you announced a new potential indication for Vutrisiran Stargardt's Disease. First, what is this condition? And how can Vutrisiran help?

Yes. Ted, I couldn't be more excited about this opportunity because it's a great example of how you can take a high-impact medicine like our TTR programs and begin to think about how you expand the opportunity beyond your initial focus area. And Stargardt is really the leading inherited retinal disease with enormous unmet need. It's a disease that leads to blindness effectively in patients. Its onset is typically in the teenage years and patients will progress over time to losing their sight, which is, of course, just a horrible thing to happen with people, young adults going into their adulthood. It is a disease caused by the production of bisretinoids that are toxic in the eye. And it's caused by a mutation in a gene, the ABCA4 gene, which normally transports retinal out of the back of the eye. And so the fact that this defect occurs, means that vitamin A becomes toxic to the eye. So by simply reducing the toxin, which we can do with Vutrisiran, we know that we lower vitamin A levels on a one-to-one basis with lowering of TTR, we effectively are going to starve the toxin from going into the eye and therefore, achieve we hope, a significant impact on the progression of Stargardt disease. Now we're not going to 0 vitamin A because that would potentially lead to night blindness in these patients, so it need some level of vitamin A in the system. But if we're getting 80%, 90% knockdown of TTR and vitamin A, we're starving the vitamin A levels at the right level. And we know that that's well tolerated in people that we treat for hATTR amyloidosis because they also have an 80% lowering of vitamin A. Although there, we also supplement with oral vitamin A supplementation. We wouldn't do that in the Stargardt study. So it's an opportunity to, in a near-term basis, because we'll start Phase III next year, expand even further the TTR franchise into a population that affects approximately 60 -- over 60,000 patients in the U.S. and EU, and it would really be a game changer in that setting.

Very, very interesting. So in the interest of time, I'm going to skip GIVLAARI and OXLUMO today, which are both growing very nicely. And really, you started to mention this, but Alnylam's really undergoing a major transition from orphan diseases to more common diseases with RNAi that was really initiated with Leqvio for high cholesterol. So tell us about Leqvio and Novartis' plans and your retained economics for this PCSK9 targeting RNA?

Yes. Well, we're really excited about Leqvio. It's got a January 1, 2022 PDUFA date, which happens to be both a holiday and a Saturday. So I'm guessing that we will have an action by December 31 of this year, and we're optimistic that it will get approved. Of course, it's approved in many countries around the world, but received a CRL last year due to an inspection related -- not issue, but inability to inspect the site related to COVID. Leqvio, we think, could be a game changer, well, already is approved and is a game changer in other markets. But what approved in the U.S. will be a game changer here. It is a once every 6 monthly treatment option that achieves over 50% lowering of LDL cholesterol, one of the leading causes of CV morbidity and mortality around the world. And we're really excited about how Novartis is innovating on the commercial side for this program. We've seen the relationship they formed with the National Health Service in the U.K. We're confident that they'll be able to expand that type of arrangement across the world, in many countries around the world and maybe even with provider systems here in the U.S. And it's really the -- I think, the future of how prevalent disease medicines will be commercialized going forward. We all have seen the challenges of these type of medicines from a commercial standpoint in the past. But we can work with systems -- governments or system providers and think about access in a fundamentally different way because we have a lot of value to deliver with these medicines as it relates to cardiovascular morbidity, mortality and costs of those terrible events. And so I think there's a very population health-based approach for these type of medicines and access, which, of course, Novartis is pioneering. And we certainly will be using that as we think about our prevalent disease products that are in our pipeline.

Yes. Excellent. And building on that success, you are conducting the Phase II cardiac trials of zilebesiran, targeting angiotensin for hypertension. Tell us about this target and your development plans?

Yes. So zilebesiran is an RNAi therapeutic that targets angiotensinogen and specifically the angiotensinogen made in the liver. And by having a liver targeting approach, we're sparing the renal production of angiotensinogen, which is believed to be involved with some of the toxicity that happens with RAAS inhibitors. And so this liver-specific silencing of angiotensinogen is really the key approach that we believe can achieve a robust and tonic control of blood pressure with a very infrequently delivered medicine that would not only have ultimately benefits, if shown in studies, benefits on CV morbidity and mortality because of the tonic control but it also have benefits by virtue of the ability to address the compliance issue that occurs. I mean, well over 50% patients stop taking their antihypertensive drugs. And therefore, they are not controlled in their hypertension. But if you have a medicine that's given once every 3 months, once every 6 months, which is what we expect zilebesiran to achieve, we're going to have a fundamentally new way of thinking about the treatment of hypertension, which really is the #1 cause of CV morbidity and mortality around the world. There's a public health issue, bar none.

Yes. And such a powerful mechanism there, too. Also on your recent R&D Day, you announced new bispecific siRNA technology called GEMINI. This is really cool stuff. Your first programs in cardiovascular disease. How does GEMINI work? And where do you envision employing this approach?

Yes. No, it's -- I'm very excited about this, Ted, because it's an approach to create a bifunctional molecule. I mean we're -- I like to refer to the antibody class sort of a predecessor class with RNAi. And just like you saw antibodies going to bifunctional categories over time, we're not going to be seeing RNAi going into bifunctional categories to develop very innovative medicines. And our GEMINI-CVR program -- the GEMINI platform overall basically links the sRNAs together covalently. And we've engineered how to do this in a way that maintains activity is very, very impressive what our scientists have done. But the GEMINI-CVR program is going to target both angiotensinogen for hypertension and ANGPTL3 for the reduction of atherogenic lipids. And we know that if you can reduce atherogenic lipids and blood pressure, you will have a significant impact on CV morbidity and mortality. And the vision here for this program is really to think about patients that are -- have risk factors, whether it's blood pressure, LDL, hemoglobin A1c, other risk factors for CV morbidity and to provide them a once annual treatment option, a vaccine for their CV risk. And it would be -- it might -- it could be the most important medicine ever created actually. And so it's very excited to see this come forward.

Yes, exciting. And that -- I think maybe I could know that coming late next year in 2023, if I'm not mistaken?

That's right. That's right.

Yes. I also add to R&D Day, you introduced new CNS targeting. And this is obviously building on some of the early work by Ionis and Biogen. But your lead program is ALN-APP, which targets amyloid protein, very important target. What do you envision developing this therapy? And how can it really be used to open up CMS for RNAi?

Yes. Well, Ted, we're -- we made a lot of progress on extrahepatic delivery of RNAi therapeutics. And one of the areas that we've been successful is in intrathecally delivered small interfering RNAs in the CNS. We have a novel conjugate approach that we've used. We've talked about that more recently. And in technical terms, it's a lipophilic conjugate and enables robust uptake of the sRNAs in neuronal cells. We broad biodistribution across the CNS. Even in deep regions of the brain, we see robust knockdown. And so the first program is ALN-APP, which is amyloid precursor protein, of course, a very well-known protein. But by targeting APP, upstream of where the antibodies currently target, we're able to not only address the production of extracellular beta-amyloid, but also very importantly, intracellular accumulation of amyloid fibrils. And in fact, there's a lot of data that shows that it's really the intracellular generation of amyloid that is toxic to the neuronal cells. And so we think this could be a completely different way of evaluating innovation around the A-beta amyloid hypothesis in Alzheimer's disease. And the initial study will be an early onset Alzheimer's disease patients, but we're also going to expand that in the future to more sporadic forms of Alzheimer's, always trying to go early in the disease because there's a lot of reasons why that always will make sense. But we're also looking at cerebral amyloid angiopathy, which is a vascular deposition of amyloid from A-beta [ fibers ], which results in a significant risk of stroke in patients. And so the ability of targeting not only Alzheimer's but also cerebral amyloid angiopathy is, I think, a very exciting opportunity for us. Obviously, with the antibodies, you wouldn't consider cerebral amyloid angiopathy because of the risk of ARIA. And that, of course, would be counter-indicated in current antibody programs. We would not have that issue because we're preventing the production of APP, not trying to grab APP out...

Yes. And again, this technology can be applied broadly across multiple other CNS programs and a lot of other places that you're working. So, John, you guys ended the third quarter with phenomenally strong cash position of $2.3 billion. How long does this fund the company? But maybe even more importantly, what does this enable Alnylam to accomplish?

Yes. Well, I mean, we will never have to go to the equity markets to raise capital. We have financed the company effectively. And with the growth of our revenues and the continued moderated discipline around our operating expense growth, we're heading toward profitability. And as you know, one of the P^5x25 is profitability within the period that we've committed to. And that's the plan and we're going to get there. There's no doubt about that. So there's no need to go back and raise more money. I won't have to do that or don't have to see Alnylam do that again. I'll have to do that in my new chapter again. But obviously, it's going to be we're in a very strong financial position here to get to profitability and to build a sustainable business. There's no -- nothing that's stopping us from getting there.

John, on my friend, it has been an amazing ride. You've created a new therapeutic modality and probably only a handful of people in the plant economics say that. On behalf of everybody, they think so much and wishing you nothing, but personal happiness and continued professional success. Thanks, John.

Thank you, Ted. Let's stay close and in touch, everybody. Bye-bye now.