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

Sorry, it's still good morning here. I'm Tazeen Ahmad. I'm one of the senior SMid Biotech analyst here at Bank of America. It's my pleasure to have with us at the BofA Healthcare Conference. Our next presenting company Alnylam Pharmaceuticals. Sitting next to me and presenting for the company is CFO, Jeffrey Poulton. Jeff, good morning. Welcome to Las Vegas. Thanks for joining us at our conference.

It's nice to be here. I think everyone's probably seeing in person for the first time in a long time. Nice to be here.

Yes. First time in 3 years we're back. So I don't know that anyone needs an intro on Alnylam, but for the heck of it maybe you can spend a couple of minutes just talking about the company and the platform and some of the recent updates, and we can go into more detail.

Yes. Happy to give you just a quick intro. We're the leader in RNAi therapeutics. It's a whole new class of medicines that the company has really developed over the last 20 years or so. And where that puts the company today is 3 commercial products in the market that we're selling ourselves. We've got a fourth RNAi product that's sold through a partner. And we're hoping later this summer that we'll have a fifth RNAi product if we get a positive response from the FDA this summer. From an R&D perspective, I mean, I think this truly is a platform company. We've demonstrated the ability to sustainably organically innovate to drive long-term growth. I think if you look out on sort of the longer-term horizon, there's probably 3 specific areas that I see lots of growth potentially coming. One is the expansion of the TTR franchise, which I'm sure we'll talk about more here in our chat, expanding the cardiomyopathy part of the market. Second, longer-term driver of growth is that we are focusing more of our R&D efforts, not only on rare disease opportunities, but increasingly we're investing in prevalent disease opportunities as well. And the first one out there is zilebesiran for hypertension. I think we'll talk about that a little bit. And then lastly, just this -- again, this concept of a platform, the ability to sustainably innovate, whether that's new hepatic targets, extrahepatic targets, weeks to the platform. I think the company has demonstrated the ability to do that sustainably. So all of that, I think, puts us in a pretty good position. as it relates to the strategy that we shared with the market about 1.5 years ago, what we call P5x25, which is a set of 5-year goals that the company has put out. I won't go through the specifics on the goals, but really the objective over this 5-year period is to elevate Alnylam into a top 5 biotech. And I think we have the ability to do that.

Okay. Great. So let's delve into some of the things that are happening now. So First is this upcoming PDUFA that you have this summer now for vutrisiran for PN. Can you just clarify -- I know you've been asked this question already a couple of times. But you clarify how this 3-month PDUFA push came about?

Yes. We were -- we had an ongoing review with the FDA. We had an April 14 PDUFA date. And after the late cycle review meeting with the FDA, we learned about an inspection of a GMP inspection, not specific to ONPATTRO that had occurred at the packaging site that we had submitted for approval for vutrisiran. And based on the feedback that we got on that inspection, we had some dialogue with the FDA about the situation to better understand sort of options going forward. And based on that dialogue, there was a real risk that the inspection itself was not going to be fully resolved by the PDUFA date, which high likelihood that, that would have resulted in a CRL for us -- for vutrisiran, even though this was not specific to vutrisiran. So based on that dialogue, we chose to amend file, switch out the packaging side to a site in Europe that we're very familiar with. We -- it's a site in Europe that we use for both ONPATTRO and GIVLAARI, and we're actually moving to have OXLUMO package there as well. So we know the site well. That site was inspected by the FDA in 2020 and by the EMA in 2021, good results. And so we felt confident about that decision that this swap at the last second, would put us in the best position to get to the product to the market the fastest. So that's what resulted in the 3-month delays when we switched out the packaging site that was included in the file.

Okay. So since you were already familiar with the European site, why didn't you just go with that in the first place?

I mean it's a good question. Likely, it would have been somebody that we would have added at some point is a secondary site, but we also use this other site in the U.S. for other products, commercial products that are already in the market. So that wasn't a new site to us either. And that should not impact the products that are already there and approved. But the approval of this product would have been impacted if that inspection hadn't been resolved by the PDUFA date.

Okay. So given that both sites are familiar to [indiscernible], what's giving you the confidence that the move to that European site will resolve the specific issue that came up?

Well, I think it's the -- what I described is we've got experience with that site. It's good and the fact that inspected fairly recently by both the FDA and the authorities in the EU, right? And ...

Would you need another inspection?

We don't know that for sure, but our hope is no and that we'll get this approval by the revised date, yes.

And so what happens when there is a PDUFA push? Do you continue to have interactions with the agency?

Yes. And I think that the good news is here is the teams had interactions with the agency throughout this. And I think that's what helped us make the decisions that we've made. And so yes. Again, I think we're optimistic about the decision that we've made, and we're hopeful that we're going to have an approval this summer.

Okay. So assuming that it does get approved, you will have now 2 products available to treat PN. How are you thinking about the market dynamics of ONPATTRO once you do have vutri in the market?

Yes, we think that even though it's likely, I mean, this was studied in the same population, the data from HELIOS-A, which was the vutrisiran study in hereditary PN was remarkably similar to the data that we had for APOLLO -- for ONPATTRO and APOLLO. And so we'll likely have a label that looks similar and is in the same patient population. But we do think this is a growth opportunity for the franchise for a number of reasons. First and foremost is ONPATTRO is an LNP delivered product. So it's in every 3-week IV infusion. So pretty high burden on the patients that are on ONPATTRO. And vutrisiran is a GalNAc delivered products. So what that means today is that will be a once-a-quarter subcu. And we've got a study ongoing that we hope reads out by the end of the year that actually allows us to even move that to once every 6-month subcu delivery. So a big difference in terms of patient convenience. And we think that's what really sort of creates the growth opportunity for vutrisiran, probably sort of 3 specific areas. One is on patients that I would describe as wait and see. So when they get diagnosed, maybe they're earlier sort of in the course of the disease, perhaps younger patients where all of their life, freedom is much more important to them. Some of those patients are waiting, we're actually anecdotally we're hearing about those patients that are waiting for vutrisiran approval before they would start therapy. Second, patient -- or second type of patients that might be attracted by this are patients that would be looking to switch. In the U.S., that means patients that would be on inotersen, right? We've got, I would say, a pretty significant share of the patients in the U.S., but there are some that are on inotersen. And a more convenient profile once a quarter versus once a month and then hopefully less sort of safety and tolerability issues that will be attractive for those patients. Outside the U.S., actually, switching has been a big driver of growth for ONPATTRO since we launched outside the U.S. And the dynamic that's different there is tafamidis got approved outside the U.S. in the hereditary PN population. It never got approved in the U.S. And so ex U.S., half of the business that's on ONPATTRO today are roughly are switches from a stabilizer tafamidis. And so we think this could accelerate some switching as well, just because of the convenience factor. And then lastly, I would say are the mixed phenotype patients, so this is a spectrum disease. A lot of these patients have both polyneuropathy and cardiomyopathy complications depending on the mutation that they've got. And so they're making choices with their physician about how to treat the disease. In the U.S., we do see combination use where patients are on a stabilizer for cardiomyopathy and on ONPATTRO for polyneuropathy. We think in those patients that are making that choice about how to treat the disease that with a much more convenient way to treat the polyneuropathy. We're going to get more of those mixed phenotype patients that are going to start on vutri. So for all those reasons, we're really excited about the possibility for growth. We're still early in polyneuropathy, right? We got 2,200 patients on therapy at the end of Q1. This is a patient population globally that we think is 20,000 to 30,000. We did almost $500 million in revenue in that patient population with ONPATTRO last year. So there's a long -- a lot of growth to go here, and we think ultimately vutrisiran is going to drive a lot of that growth going forward.

So you did revise your full year sales estimates downward at the end of your last earnings call. Part of it was FX related. Part of it is that you did include some assumption of sales coming from vutri, assuming that an original PDUFA date. So how are you making a confident call on what proportion of sales in PN this year were going to be from ONPATTRO versus vutri because there could be some cannibalization?

So I'll just recap what we did on guidance, and then I'll talk to your question about sort of the implications of the vutri launch, the delay in that and how that may interplay with ONPATTRO. So our original guidance that we issued in February was $900 million to $1 billion for the year, and we guided down to $870 million to $930 million. So a $50 million reduction or about a 5% reduction midpoint to midpoint. And the 2 things that changed from February to April that impacted that were FX, the dollar got substantially stronger against both the euro and yen, which are the 2 currencies that we're most exposed to, really from the end of February until today. I mean, I think the dollar strengthened 7% or 8% against the euro and maybe more than 10% against the yen. And I think what's unique for us is that we've got about 50% of our revenues are ex-U.S. We don't explicitly hedge revenues. We do have a natural hedge in our P&L in terms of the expenses that we have outside the U.S. that offset about 50% of that. But that's one thing I think next year that we'll take a learning from is that we'll probably guide in constant currency so that we're not sort of whipsawed by movements in FX. But that's right now with where rates are relative to where they were in February, that's a headwind for us. And then the other impact was what you highlighted was in our initial guidance, we assumed vutri approval by the April 14 PDUFA date. And now that's delayed 3 months. And so that impacts us based on what I talked about earlier in terms of our view that vutri grows the franchise. We didn't quantify that for people in terms of how much was FX related, how much was from vutri, but both of those were contributors to the downgrade. Certainly, I do expect that there will be cannibalization of ONPATTRO when we launched vutrisiran, just again because of the convenience benefit. But I also think that there's going to be, as for the reasons I already cited, it's going to grow the brand as well. We're aware anecdotally of patients that are waiting for that approval before they start on therapy. So that had an impact on us as well.

Okay. So now let's move on to some time lines for a lead study that's going to read out.

Yes.

So APOLLO-B, you've guided to a midyear readout. Now I think people are going to try to really triangulate what you mean. So can you give us a little bit of update on that?

So maybe to start with Alnylam when we say midyear, that could be Q2 or Q3. So that obviously doesn't narrow it down a whole lot for folks. But we did say that the study completed enrollment last May, so about a year ago. It's got a 12-month endpoint. So now there is flexibility in when patients come in for that 12-month readout. It's not precisely at 12 months, particularly, I think with the advent of COVID, there's been more flexibility that have been given to patients. And so I don't know -- we don't know precisely when that last patient visit will occur. But I think that's as much data as we can give you. We completed enrollment in May. It's a 12-month endpoint. We've guided to midyear, which is Q2 or Q3. We're ready for the data, frankly.

In general, how long does it take to like slice and dice raw data in-house though?

I don't know if I can give you a specific time, but the team, as soon as that last patient visit occurs, we'll do what they need to do to lock the database, review the data. And obviously, as soon as we have this data, given the materiality of it, it is something that we're going to put out in the market as quickly as we can.

Is it safe to say it would be weeks, not months?

From the time that the last patient visit occurs. I don't even want to give you the wrong answer on that.

Okay. So you've answered so many different questions about the study. And I don't want to keep repeating the same questions over and over. But how are you thinking about the implications of whatever the results are for APOLLO-B, should there be a readout to HELIOS-B?

Well, I think the element of the study that's going to be most have the most impact and read through to HELIOS-B is the secondary endpoint. So we've got an out and got a hospitalization and mortality secondary endpoint APOLLO-B. It's not powered for that. I mean this is a 12-month study, and so you have to have a massive study to power it for that to be statistically significant. Hopefully, we'll see trends there that are positive, that will be a read-through for HELIOS-B, which is the outcome study with vutrisiran, which is a much longer study.

So, let me interrupt you for a second. So what kind of outcomes level data should we expect to see at the top line for APOLLO-B though?

I mean I think when we read out the top line data, our standard way that we provide top line data on a study is on the we'll provide safety data, first of all, but then we'll provide data on the primary endpoint. We will provide the p-value as well as key secondary endpoints. So for now, that's what I would expect that we'll provide. And then we'll provide the fuller data set at a medical conference as shortly or soon thereafter as we can. That's the expectation, I think, that people should have.

And then obviously, I guess, any safety that..

Safety as well. Absolutely. Safety will be part of it as well, yes.

Okay. Now in terms of safety, what kind of feedback does the DSMB provide? And with what frequency is that?

Yes. I mean I think this is -- we're running this study like we do every clinical study that we have. So there's nothing different or unique as it relates to feedback that we're getting from the DSMB or we get a lot of questions now about blinded data that people may see. And I think actually on our Q1 earnings call, we got that question and I thought Pushkal did a really good job of being very specific about how -- what happens. And it's not unique to the study. There's data that we look at on a blinded basis to make sure that the study is being conducted in a quality fashion, we're getting quality data, right? So there's people that review that and if they see inconsistencies then those are being addressed as quickly as possible. So nothing unique in that regard as it relates to the study. That's how we conduct all of our studies.

And if there's anything meaningful, would you be required to tend to make that public if the DSMB makes a particular comment?

Yes. I mean if there was something that was material, we would have to disclose that, yes.

Okay. So going back to now HELIOS-B, when is that top line data set to read out?

So that's our outcome study in vutrisiran. That's a 30-month study. And that study completed enrollment in August of last year. So if you just go 30 months from August, we're expecting that in early 2024 in terms of we would have the top line data. That assumes that we let the study run the full 30 months and that there's no interim readout, I think based on everything that's happened in the market, the last 6 months, I think there's certainly a feeling that it's more likely than not that we'd let it run the full length, but after APOLLO-B, when we have a look at and have an opportunity to adjust that data, in particular, what we talked about with the outcome data, that would be the opportunity if we were going to do an interim look because we would make that decision after APOLLO-B. I think the other thing to keep in mind is, we enrolled the HELIOS-B study probably 6 months faster than we anticipated that we would. So that makes the benefit of an interim readout less impactful because if you let the study run, that's sort of the time benefit has gotten less. So -- but we'll make that decision after we get the APOLLO-B data. But if we let it run 30 months, given the fact that the study was fully enrolled in August, that would be early '24.

When is the outcomes data for APOLLO-B expected?

I mean that -- we'll have the outcome data ...

The final outcome.

Yes. I mean we'll have that as part of the top line readout. That will be one of the key secondary endpoints that we would have included as part of the top line readout. When we'll present the full data set, we haven't announced that yet -- where and when that will happen.

Okay. So we've gotten some questions recently about whether or not the timetable that you've laid out for when HELIOS-B readout is practical? Is that enough time? And I think that's being spurred by one of your competitors Ionis recently modified its on trial design, upsized the trial. Could there be any risk to the early 2024 time table that you've provided being pushed out?

I mean I'll -- let me respond to what we understand about the reasons are for Ionis extending and expanding the size of their study and then let's sort of compare that to -- let's talk about the differences with HELIOS-B. So my understanding is they upsized the trial from 750 to 1,000 patients and they pushed out the study from 120 weeks to 140 weeks. And the reasons that they gave for doing that were related to events, right, wanting more time to compile more events. They wanted to better balance the study in terms of hereditary versus wild-type patients in the study, and they wanted to balance better patients on TAF versus no TAF. So let's talk about a couple of points of maybe differentiation with our study. Our study has 30-month endpoint. I think one thing that people don't fully appreciate is those are the last patients that are enrolled in the study are going to be on drug and are going to be evaluated for 30 months. Patients that are enrolled earlier in the study will be evaluated up to 36 months. study. So the average patient is going to have more data than 30 months. And so I think the change that they've made in terms of timing from 120 to 140 weeks puts them closer to where we are in terms of the length of our study, right? So they were shorter than we were. So they're more in line with where we are. The other thing with their study is they had no cap on the patients that could be in the study at baseline on TAF. We initially had a cap at 30%. We lifted that and then had an internal target of 50%. We ended up less than 50%. So I don't know exactly where they are, but that's another potential difference between the 2 studies. I think we feel good about how we've designed the study, how we've powered it conservatively. The other point for us is, we initially targeted 600 patients in the study. We ended up with 655. And that wasn't by design, the way we manage shutting down a study is, we will -- any patients that are on screen when we make the decision to shut down the study that ultimately get -- have the ability to get sort of randomized into the study. We let them in the study. So we ended up with more than we had originally anticipated. And I think that's also helpful in this regard as it relates to our study. So based on where we are today, I think we feel good about the study and how it's designed. We'll learn a lot more when we get the APOLLO-B data. But for now, I think we're comfortable with the study and the time lines that we just talked about.

Okay. Now if you do decide to take an interim read of HELIOS-B after you look at APOLLO-B, would it be immediately after? When we would be ...

It would probably be sometime in the second half of the year because we have to have some interactions with the regulatory authorities to sort of align on what that would look like, right? We're talking about midyear for the APOLLO-B readout, so it likely would be some time in the second half of the year if we were going to make that decision that, that would occur.

Yes. And so what would be the potential outcomes of doing an interim view of ...

I mean timing it would probably -- it would benefit us in terms of time line if we did the interim readout, you might bring it forward 9 months, something like that. That's probably what we're talking about. So again, is that time benefit worth it, that we're going to have to consider all that. I mean one of the things that's beneficial of the Ionis change is this pushes back their readout by about 6 months, right? They had been targeting an end of '24. Now they're talking first half of '25. And so if we let our study run all the way to conclusion, we're probably looking at a 12- to 18-month sort of head start on them and getting into the market. And so that's beneficial to us as well from a timing perspective, that -- the fact that they've delayed their study.

Okay. So to be clear and to wrap up this particular topic, do you feel confident with the sizing and timetable of the HELIOS-B study today?

We do, yes.

All right. So after we get the data for APOLLO-B, assuming it's positive, what would be the next steps after that?

Pilot and get ready to launch it, right? So hopefully, the filing will be sometime in the second half of the year, and then we'd be looking at a launch in cardiomyopathy for ONPATTRO in the second half of the year. And that would be the first product that would have sort of the full spectrum, hereditary wild-type cardiomyopathy, polyneuropathy. And so yes, we'd be ready to do that second half of next year.

So how important are the secondary endpoints for APOLLO-B, we spend a lot of time on 6-minute walk, but ...

I mean we get that question a lot, given that tafamidis, obviously has outcome data in the label, how successful can you be commercially with a product that doesn't have that? And look, I think that certainly, longer term, the real opportunity for growth is with vutrisiran not only because of the benefit around dosing, but also because it would have outcomes in the label. So that, we believe, is the real long time -- long-term driver of growth and really sort of the best-in-class profile. But with that being said, I think what we see with tafamidis as an example, in Europe in the hereditary polyneuropathy setting is patients continue to progress on tafamidis. And when patients are progressing and getting worse, they're willing to try other things. And so I think there would be an opportunity for us to get patients on therapy that maybe are not doing well on the existing therapies that they're on. Again, ultimately, longer term, I think having outcomes in the label is really going to be critical to driving long-term growth.

Okay. And then, I guess, theoretically, what is your view that some people have, which is ever since tafamidis launched, ATTR patients in general are being diagnosed much earlier than they used to, which is great for the patients. But do you think it makes designing trials complicated whether it be APOLLO or HELIOS?

Well, there's a lot of speculation about what happened in the BridgeBio study, right? And there's one theory that we hear often is that these are like you just said, these are earlier patients that are less advanced in the course of the disease. So maybe you need to follow them longer to see the impact of the disease. But if you look at the baseline characteristics of the BridgeBio study, right, on quality of life, on NT-proBNP and on 6-minute walk, and you compare that to the ATTR-ACT study, it's very similar. It is not a milder or less advanced patient population. So I don't think that's what happened in that study if you look at those baseline characteristics. And again, if you look at the other endpoints in that study, other than 6-minute walk, the placebo patients progressed as you would have thought on things like KCCQ and on things like NT-proBNP. So I don't know that anybody completely understands what happened there, but I don't think it's because those were milder or earlier patients, if you look at the baseline characteristics and compare those to the Pfizer study.

Okay. Let's move on to another pipeline product. You recently pushed out a readout for hypertension into 2023 citing slower enrollments in the COVID. Was that a surprise internally to you just because there's -- that population is not a rare disease?

Yes, it was really 2 things. So it was our -- this is our hypertension program, zilebesiran that we initiated 2 Phase II studies fairly recently. KARDIA-1 is the monotherapy study, and that was the first study to get going. The second study is KARDIA-2, which is a combination study. The KARDIA-1 got impacted both by COVID sort of launching into the peak of Omicron, but also the initial sites that we opened and started enrolling on Ukraine. So obviously, that -- given what's happening in Ukraine that has completely stopped. So that really hurt the initial early momentum we had. So it's really both of those things that had us change the timing for completion of enrollment from midyear this year to early next year. So it was really about a 6-month delay. So we've opened up more sites. We've looked at the protocol made a few adjustments to the protocol to sort of simplify getting patients in. And so we'll get there.

Was it just coincidence that you had opened in Ukraine first?

It was a coincidence. I mean, that had been -- obviously, we have been planning on that well before anything started in terms of the conflict. So that was unfortunate.

Okay. Well, let's just talk about what do you think the market opportunity is because you would be launching, if all goes well, a premium-priced product into a very large generic market? And that's kind of the area that gets all the pushback on pricing pressures and all of that. So what kind of data is really needed here in your mind to really justify moving this forward?

Yes. So let me just quickly talk about a few things on that program. It's -- this is our hypertension program. We had a Phase I study that read out last year that had really encouraging results, both in terms of knockdown and durability of knockdown target here as angiotensinogen as well as impact on blood pressure lowering we saw at sort of the mid- and higher level of doses that we tested in the study, 10 millimeters of mercury or higher -- blood pressure lowering. And at the highest dose, we saw 20 millimeters of mercury blood pressure lowering at 12 weeks and beyond, and 5 millimeters of mercury is considered clinically meaningful. So really good data there. We've talked about the initiation of the Phase II studies that were -- that are underway today. Maybe just a little bit about the unmet need here, even though there's lots of medicines in the market for hypertension. Two things. One is what I would say, the sort of sawtooth pharmacology of the existing meds in the market, so you get sort of that waxing and waning of effect. And then second, our patients are just not adherent. They're not compliant on their current medicines. And so RNAi has the potential to address both of those in terms of clamp pharmacology, so reducing the variability of effect and then the duration of effect, right? So this could be a once-a-quarter or once every 6-month dosed medicines, so almost a vaccine-like approach to treating a common disease like this. That's the opportunity. I would point to LEQVIO commercially, hopefully, over time, in terms of how Novartis is commercializing that. We've taken a different approach than sort of the standard approach. They're really looking at this as a population level agreements that they're negotiating -- they have negotiated a very innovative agreement in the U.K. And so let's see how that progresses. My hope is that creates a blueprint for us in terms of an effective way to commercialize a drug like this.

Okay. We are out of time. So with that, we will end the session. But Jeff, thanks so much for coming and presenting. And thanks, everybody, for joining us.

Thanks for having us. Take care.