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

Great. Good afternoon. Thank you, everyone, for joining us. We're really pleased to have Alnylam with us. And from Alnylam, we have Jeff Poulton, CFO. So Jeff, with that, I'll turn it over to you for any opening comments and jump in.

Thanks, Salveen. It's great to be here. This is -- when this conference comes up and it's in person, I always raise my hand first to come to this one. So thanks for having us. Great to be here. I did want to share one piece of good news that literally, I got about 5 minutes before I was supposed to come on stage that we got word from the FDA this afternoon that we've got approval for vutrisiran and the hereditary ATTR PN population. So this marks the fifth RNAi therapeutic that will be on the market. So we're very excited about that. We should have a press release out momentarily on this, and then we'll have an investor call tomorrow morning. So I just wanted to get the word out on that. So we're excited.

Great. Congratulations. So let's start with ONPATTRO in ATTR cardiomyopathy where we're going to see phase III APOLLO-B data midyear. And clearly, a big event for Alnylam.

It sure is. Yes.

And biotech, in general.

yes.

In the context, I guess of the past data that you've seen in -- with ONPATTRO in patients with cardiac involvement, but also noting what we've seen from BridgeBio and the miss on 6-minute walk test, how confident are you in the probability of success here?

Yes. I mean, this is a discussion that we've been having pretty continuously since the Bridge data last December. And I think we've been consistent in the way we've talked about this. We're confident. And I think there's a variety of reasons that we're confident in the ONPATTRO APOLLO-B study. It starts with the rigorous diagnostic approach that we've taken in terms of making sure that we got the right patients enrolled in the study. So it required a biopsy or a positive technetium scan. And for the positive technetium scan, it required a pyrogenic Grade 2 or Grade 3 uptake assessment. So we think that means we've got high confidence that we've got the right patients in the study. So I'd start with that. Second thing is, we've got a lot of experience in designing and executing studies in this space. We've been running clinical trials in this space for about the last 10 years. So that comes with lots of learning, I would say that we've applied to how we've designed this study. This study was designed conservatively from a powering perspective, one-to-one randomization. And we over-enrolled the study. The initial target for the study was 300 patients. We ended up with 360 patients. So we feel good about that. Let's see. I think the other thing is we've got experience running walking tests in studies, both in APOLLO and HELIOS-A, we ran 10-meter walk test. Now it's a different type of test. It's a sort of gait speed assessment rather than endurance. But I think it comes with some of the same potential challenges associated with running studies like that. And we had positive studies there. So we're confident in our ability to oversee and manage a study like this. Last thing I'd say is in terms of the approach that we took to the number of 6-minute walk tests that were done in screen and then at baseline, we did that in a way that minimize the number of tests that we ran, hopefully, to minimize the risk of a training effect on the study. Third thing I'd highlight is that we've got a broad patient population enrolled in the study. We haven't given baseline characteristics on the study yet. We won't do that until we read out the results on the study. But a couple of things to highlight. One is that we've targeted to have 20% hereditary patients in this study, which would be, I think, closer to where Pfizer was in a track than where BridgeBio was in their study. Second thing is as we've enrolled patients across the various NYHA 1 through 3 classes, and they all had to be heart failure patients. What else on broad patient population? We do allow back -- the TAF at baseline, up to 30%, but these have to be patients that are progressing for the physicians that are enrolling these patients. And the last thing I'd say about our confidence in this study is we have confidence in the mechanism of action. We have data across APOLLO, HELIOS-A and investigator studies out of the U.K. that demonstrate cardiac benefit in the hereditary population. So I think it's all -- it's not one thing in particular, but it's all of those things in totality that give us confidence in the design of the study and now we just need the data.

And the CRO that you're using in the sites that are being used to test for 6-minute walk, are they similar to those that you've used in the past?

Yes. I think the vendor that we've used in this case for the 6-minute walk is one that we've used in the past. And I think the sites are also sites that we've worked within the past over the last 10 years as we've been running studies in this space.

And any comment on overlap with other trials?

I think we've highlighted that the overlap in sites with BridgeBio was about 25%. That doesn't necessarily mean that's the overlap in number of patients enrolled in the study, but about 1/4, which again, was to be expected.

Right. Maybe we could try to understand the powering here around your different endpoints. So everyone's going to be looking at cardiac biomarkers and hospitalization and mortality in addition to the primary end point. And are you comfortable, I guess, firstly, with the 12-month duration to show these benefits? And I'll move from there.

Yes. I mean I'm glad you asked the question. I mean the study is powered for the primary endpoint 6-minute walk. It's also powered for KCCQ, one of the secondary endpoints. And so that will be the focus. If we get a positive statistically significant result on 6-minute walk in our eyes that will be a successful study. As it relates to the outcome data, which I understand the interest in, it's not powered for that, right? This is a 12-month study, as I mentioned before, about 360 patients. And so I'd be surprised if there was statistical significance on outcomes to begin because it's not powered for that. If you look at some of the mortality rates in APOLLO, the HELIOS-A or the [ ATTRACT ] study, again, it would be unlikely you didn't see separation on mortality in the Pfizer study until about 18 months. And so I wouldn't expect that. I think a good outcome would be positive trends in the outcome endpoint, and we'll certainly be looking for that when we read out the results. The study that's powered for the outcome endpoint is HELIOS-B, which is a much larger study, 655 patients. It's a longer study. It's got a 30-month endpoint. And that's one clarification that I think and not a lot of people understand completely is that the -- it's the last patient in that gets assessed for 30 months. Patients that enroll earlier in the study in the outcome study actually are followed for up at 36 months. So we'll have longer on average than 30 months for the patients that are enrolled in that study, but that's the study that was designed to show statistical significant outcome -- on outcomes as HELIOS-B. And that's a study that's fully enrolled now that would complete enrollment in -- or top line data would read out in early 2024.

And you're presenting the endpoint data in kind of a hierarchical situation. So if KCCQ hits or let's say, it doesn't hit, will you still give color on the other endpoints, even...

Yes. I mean I think we'll follow the standard approach that [ Yvonne ] has taken in the past in terms of how we provide top line data, which would be p-values on the primary and secondary endpoints in hierarchical fashion and we'll also provide top line safety data as well. So that's what we should expect when we provide the top line data on APOLLO-B.

And can you speak to the path forward in a scenario where you hit on 6-minute walk test? And -- but the trends in exploratory endpoints at 12 months are unclear on -- what's the likelihood, I guess, in that case with regard to kind of physician uptake and just use and read through to vutrisiran?

Yes. I mean the first thing I would say is that we've aligned with the regulatory authorities on the design and the study. So if we hit on 6-minute walk, we're confident that we can take that, that result forward to the regulatory authorities and we'd be confident in moving that forward. The question you're asking about though is really what would commercial uptake look like in a market where there's a drug on the market that does have heavy outcomes in the label? I think that there would still be an opportunity for us to take the drug forward and have some uptake commercially. I would say probably a number of areas based on the market research that we've done that I would expect to potentially see some traction. Probably I would start with patients that are on tafamidis that are progressing in terms of the disease would be patients that potentially could switch or would look to have ONPATTRO added on to tafamidis. So that would probably be the primary opportunity that I would see for uptake, but a couple of other areas. I think -- again, we're studying cardiomyopathy in both wild-type and hereditary patients in the APOLLO-B study. If we get an approval for cardiomyopathy in the hereditary population, we would -- ONPATTRO would be the only drug that would have both a PN and a CM in the label. And -- in that mixed phenotype patient population with that label. Now the hereditary part of the market is still the much smaller part of the market, but I do think that would drive some incremental uptake for ONPATTRO. And the last thing that I would highlight is the market research suggests that there's -- there are patients that have challenges from a reimbursement perspective on TAF, given that it's a Part D drug and that there can be a fairly significant out-of-pocket requirement for some patients that we think would not -- we would not face the same challenges with the Part B reimbursed drug that could also potentially drive some uptake in ONPATTRO. So longer term, I think HELIOS-B is going to be really important in terms of sort of creating that best-in-class profile because of the way the drug is administered, which would be -- right now would be once a quarter subcu. We're capturing data that we hope will support moving that to once every 6 months. But importantly, that's the outcome study. And if we have a successful study, we would have that in the label. That really is the most important study in terms of long-term uptake in the cardiomyopathy space for Alnylam.

What's the likelihood, though, that you would hit on 6-minute walk test and you wouldn't see trends on the secondaries?

I mean I don't know. We got to get the data. As I mentioned earlier that the study is not powered for that. And again, you did not see a separation in the Pfizer study until 18 months in mortality, you did see separation earlier on hospitals at about 9 months. And so I don't know. I mean, we're going to get the data. I'm hopeful. Again, the cherry on top would be if we got -- we hit the primary endpoint, and we showed trends, I think, and outcomes would be a fantastic outcome for APOLLO-B.

And if you were to miss the primary but show trends or [indiscernible] on your secondary, is there a regulatory path forward here?

It's probably challenging if you missed on the primary endpoint, I certainly think we would explore every opportunity and we might have conversations with regulatory authorities. But in that scenario, if we are not able to take ONPATTRO forward, the good news is we have a plan right for HELIOS-B and vutrisiran. And just a reminder as to why we're running 2 separate Phase III studies, the history on this is Alnylam made the decision to pursue APOLLO-B to do speed. It was the fastest way to get a cardiomyopathy drug into the market, right? And they chose vutrisiran, obviously for the outcome study for the reasons that I talked about previously in terms of really creating that potential best-in-class profile, not only with the dosing, but with the outcome data in the label. And so again, ONPATTRO was -- the path was about speed. This is really -- HELIOS-B is really the important study in terms of the long-term commercial uptake.

One last question here. With regard to the treatment paradigm that is believed to be shifting to earlier stage patients, how much of a factor is that in the study at this point?

I know there's been a lot of conversation about that since the failed BridgeBio study in December that, that was one of the hypotheses that maybe that's the reason that the placebo arm didn't progress as these were earlier patients, less severe and 12 months wasn't long enough for those patients to show progression. If you look at the baseline data for the patients in that study, I don't think that, that's the correct conclusion on 6-minute walk on KCCQ and on NT-proBNP relative to the ATTRACT study, the patients in the BridgeBio study were very similar in terms of where they were at baseline. So that sort of debunks the idea that these were milder patients, number one. The other thing that I would say debunks that somewhat is if you look at the ATTRACT results themselves, the Pfizer can you look at the NYHA I, II class patients and how they responded in that trial compared to the Class III patients. The Class I, II patients were the ones that showed the bigger drug effect in that study. So there's some data there that doesn't line up with the idea that the patients failed because they were earlier or less severe. Yes.

So let's say APOLLO-B is successful, and you're launching it in positioning versus Pfizer's drug -- in the market. Where do you expect the initial patients to come from? Do you think treatment-naive? Or switches or add-on here?

I mean, again, we've done market research on this, and I mentioned earlier, I think probably the most likely place that they would come initially would be from switches. Let's talk about the experience that we've had in the hereditary PN population outside the U.S. Outside the U.S., why I'm referencing that is tafamidis got approved 10 years ago in Europe for the hereditary PN population. So ONPATTRO and tafamidis compete directly in that -- outside of the U.S. in the hereditary part of the market. And what we've seen in the 3 years or so that we've had ONPATTRO on the market outside the U.S. is about half the business outside the U.S. has come from switches from tafamidis, and that's based on progression of disease. So that's sort of a backdrop then from my comments where I talk about the fact that in the U.S. that if we get ONPATTRO approved, based on the APOLLO-B clinical data, that my expectation is the most likely place that patients would come from initially would be patients that are progressing on tafamidis. And you see that in their clinical trial results that, that would be the most likely place we would see initial demand for ONPATTRO as a switch or as an add-on therapy. I also talked previously about in the hereditary population. Again, we're studying these cardiomyopathy studies are enrolling both wild-type and hereditary patients. And so in that hereditary population, ONPATTRO gets approval for cardiomyopathy, it would be the only drug on the market in the U.S. that has both PN and CM. And there's a lot of mixed phenotype patients in that part of the market that today are sort of choosing between therapies in terms of treating PN versus CM. Sometimes they're taking both products, sometimes they're choosing one or the other. I think we would compete much more effectively in that segment of the market as the only product on the market with both the PN and CM claim in the label. And then lastly, I mentioned that I think there could be some opportunity for ONPATTRO from a reimbursement perspective, in terms of out-of-pocket impact to patients. That for a Part D drug is challenging for some patients that are on that therapy. Those would be the sort of broadly based on the market research that we've done would be the areas that I would expect demand. Obviously, all this is contingent on the data itself. And hopefully, we're going to have that soon, and then we'll be able to be a little bit more clear about where we see the demand coming from.

How would oral versus IV delivery impact adoption here?

Yes. I mean, look, I think this is a serious disease. These are patients that this is a fatal disease. And so ultimately, I think physicians and patients are going to make decisions based on the data ultimately. And as I mentioned previously, in the hereditary PN population outside the U.S., we have a lot of switching from the oral to the IV, right? And that's based on the desire to get on ONPATTRO, which has a fantastic clinical profile. The other thing I would say about our experience with ONPATTRO since we've had it in the market. And I think this is remarkable is as an every 3-week IV-infused drug since we've had it on the market, and this is in the U.S. where we can get this kind of data, we've seen compliance rates consistently at 90% or above. And so I think patients for an every 3-week IV are not going to be that compliant if they're not feeling better on the drug. So that hasn't been a real issue for us to date in terms of sort of vaccine and waning compliance.

So moving to your hypertension program, you have pushed out the KARDIA-1 monotherapy results to mid-'23 due to COVID and Ukraine geopolitical issues here. Can you just give us an update on how enrollment is progressing? And then secondly, how comfortable you are on the safety and tolerability side, because it seems like on an efficacy side, we have a decent understanding here?

Yes, let me with a question on -- remind me if I don't answer the question on safety. But on enrollment, you're right. We initially on KARDIA-1, we anticipating having top line readout on KARDIA-1 by the end of this year. And then on our Q1 results call, we pushed that back. And what we've said now is that we expect to complete enrollment in KARDIA-1 early next year with data readout in the middle of next year. So we pushed it back about 6 months. And the reasons that we pushed it back were what you highlighted. One was Ukraine was sort of a key market for us in terms of sites where we were hoping to ramp up enrollment in the study. And obviously, given the ongoing situation in Ukraine, that has completely stopped. And so that was an impact for us. The other thing is that we started enrollment in the study about the time that Omicron was hitting its peak early in January and February. So that slowed things down a bit as well. So what we've done is we've gone back and opened up additional geographies, new sites in those additional geographies has also allowed us to streamline the protocol a little bit to make it just a little bit easier to get patients into the study. And I think that we're seeing good momentum now in enrolling the study. So we think things are on track there. KARDIA-2 was not as impacted. First of all, we didn't have sites in KARDIA-2 in Ukraine. So it wasn't impacted by the situation in Ukraine. And because it was a little bit later sequentially in terms of when we anticipated starting ramping up enrollment didn't get hit by the initial COVID wave either. So I would say things are more on track with the original plan there and the expectation on KARDIA-2, which is the combination study. I should have said that's the combination study. KARDIA-1 is the monotherapy study that's looking at different doses and dose ranges. KARDIA-2 is the combination study. We expect that study to complete enrollment at or around the end of the year. So again, I think for now, things are on a much better path in terms of enrollment than where we were back on our Q1 results call. So we're pleased with that. As it relates to safety, I think the important thing here that we want to be able to demonstrate is that Zilebesiran can be used safely with other standard of care medicines in this space. And we did have a small cohort in the Phase I study that looked at combination therapy with bases and ARBs. And the good news there is both from an efficacy standpoint, we saw added efficacy when Zilebesiran was added, and we didn't see any safety signals, which was really encouraging now. It's very small patient numbers, right? So as I mentioned earlier, the study is the combination study in Phase II. It's looking to enroll about 800 patients so much larger. So that will be really important. I think the hope is because Zilebesiran targets Angiotensinogen in the liver that it may be sort of avoiding some of the renal tox issues that sometimes plague therapies in this space. So we'll know a lot more, I think, when we get the KARDIA-2 results back should be sometime next year.

Great. And another area you're focused on is the extrahepatic delivery platform. And here, we're going to start to see data by year-end, potentially with the Alzheimer's program with Regeneron. Could you just speak to your strategy to CNS delivery and why we should be optimistic about this program? And just more broadly, where you're going?

Yes, this is an important program for us too. We've obviously got a lot of data -- clinical data in the liver, and this will be the first program that targets outside of the liver as you mentioned, CNS. And this is a program that's in partnership with Regeneron. We're the lead on this program and it's a 50-50 program. Look, the key here, I think, is delivery, and we've chosen a C16 conjugate path for delivery, and we have a number of reasons to be optimistic about that based on some preclinical data that we have. I think we've got rodent data that looks at that shows really good uptake across the brain and the CNS. So that's encouraging. That was recently published in the Nature Biotech journal. The other thing that we've got in terms of preclinical data is we've got NHP data in -- with ALN-APP where we show terrific target engagement, really strong knockdown and duration of effect out to 6 months. That's all really encouraging data preclinically. Now we hope to replicate that in the clinic. The study is up and running. We expect to have data in ALN-APP by the end of the year. And the patients that we're enrolling in that study are early onset Alzheimer's disease patients. The data that we would be looking to share by the end of the year, the top line data would be target engagement and safety. And if we're successful here. I think this really opens up potentially a lot of new opportunities down the road for us to investigate. I'd say the next 2 that would be up and CNS development would be Huntington's disease and then SOD1 ALS would be probably the next 2. So really important, I think, for the platform overall to demonstrate that we can be successful in the CNS more to come by the end of the year, we hope.

And what about outside of the CNS? So you're looking at C5 and other areas. So just curious.

Yes. And -- was the question on C5 about our cemdisiran program? Okay. So that's it's a liver-directed program. And we had good news on this last week. I think it was Thursday of last week, we issued a press release. Cemdisiran is a monotherapy targeting IgA nephropathy, is a partner program with Regeneron or the lead, it's a 50-50. And so we had Phase II top line results that we shared at the end of last week and very encouraging data. We showed 37% proteinuria lowering in the Phase II study. And I think prior to the readout of the study, we thought that 25% or greater reduction would be a win. So we think that's support our investigation moving into Phase III. All the secondary endpoints also trended positively in the direction of cemdisiran. So -- we'll now work with our partners at Regeneron on design of Phase III also have conversations with the regulatory authorities about the design of that program, but very exciting result for us. I'd say that's one that's really kind of flown under the radar for the last couple of years. So hopefully, that was a positive surprise for the market.

Great. With that, we'll open it up to the audience for any questions. So going back to C5 program, where you, I think, before mentioned that the 25% reduction would be an important bar. Could you just lay out for us what that benchmark is based on? And then I have one on the C16 conjugates for the CNS delivery. I think in the nature of paper that you mentioned, there was also some emerging evidence for ocular and for lung delivery. So if you could just provide some more detail on that, that would also be helpful?

Yes. I may pass on the second question just because I'm probably not the best person to answer that. But the first question about the cemdisiran program and why 25%, I'd say a couple of reasons why we thought that was an important threshold. One is just looking at the competitive situation in the market, we thought at least 25% was going to be necessary to move forward and be successful competitively commercially. And then secondly, I think at that threshold, we've seen evidence that the benefit then on EGFR, which is really the clinical benefit that we're looking for. If you get the 25% proteinuria reduction that typically translates into benefit for EGFR.

On Vutrisiran. So at this point, maybe help us understand the launch going forward and how to think about pricing versus ONPATTRO and the cannibalization aspect that could play out between the drugs?

I'll hold off on making any comments on pricing because I anticipate that, that's something that we'll talk about on the investor call tomorrow. But what I would say is that we see this as a grower. So it should grow the franchise, it should accelerate growth from based on what we've seen from ONPATTRO over the last 3 years, and there's 3 or 4 reasons why we see this as a growth opportunity. There is a wait-and-see segment of the patient population. And these are likely patients that are diagnosed earlier in the course of the disease, a little less symptomatic that sometimes are hesitant to start on every 3-week IV-infused products. So I do anticipate that we'll attract some of those types of patients onto therapy more quickly. We talked about that mixed phenotype patient population earlier. Again, these are patients that have the hereditary form of the disease. They have both PN and CM complications. And in some cases, they're trying to choose which therapy to go on. I think in every once a quarter subcu therapy is going to be more attractive for them than every 3-week IV. So I think we'll get a bigger share there. And then lastly, I think we'll see more switching, I think, both in the U.S. where there's another subcu product on the market for [ Alnylam ] today, I think that we'll probably compete effectively against in terms of potentially drawing some switches there. And then we already talked about outside the U.S., how switching has been a dynamic that's benefited ONPATTRO, I think with vutrisiran when we get approval and are able to launch outside the U.S., that could also drive incremental switching. So for a variety of reasons, we're really excited to get this product on the market and create some additional growth for the franchise.

And how do you expect reimbursement to play out here?

Look, I think Alnylam has always taken a very thoughtful approach in terms of how we've priced our products, and the VBA concept is something that I think Alnylam was one of the early pioneers with. And I -- again, I don't want to get into too much detail because I think we'll provide more color on this on the call tomorrow, but I would expect that we're going to take a similar approach in terms of the value-based agreements that we'll sign, which in the past has really facilitated pretty quick success in terms of reimbursement and has avoided headwinds from pricing and access issues for us.

And then on the commercial business here, could you provide some more detail on how the strengthening U.S. dollar may impact your revenue? I know you managed around that, but...

Yes. So this was something that we updated on the Q1 call. When we gave guidance on the February call for combined product sales for Alnylam, which is across the 3 commercial products that we have today, we guided to $900 million to $1 billion. And on the Q1 call, 2 months later, we lowered that to $870 million to $930 million. And there were 2 things specifically that we cited that changed between February and April that, that necessitated that update in guidance. FX was one of them. So the U.S. dollar really from the end of February on has strengthened pretty significantly. And the reason that's a challenge for us is that about 50% of our business today is ex U.S. So we've got a fair amount of exposure to strengthening of the U.S. dollar. We don't explicitly hedge the top line in our P&L. We do have the benefit of a natural hedge on the operating expense side, which offsets about 50% of that from a financial perspective, but we are exposed to that from a guidance perspective, given the strengthening in U.S. dollars. So that's what we flagged on the call. And the change in rates from February to where we were in April would result in about a $20 million reduction in the original guidance that we gave. What we said is from the time we gave the guidance, each 1% change in the strengthening of the dollar from that point, if it held through the rest of the year, it was about a $3 million hit to the guidance that we've given. I think one of the things that I will absolutely do differently next year is how we give guidance. We'll give constant currency guidance so that we're not facing the situation where we're having to constantly sort of chase FX either up or down. I think that will make things easier with the market. So there's a number of companies that do that very well. So we'll mimic that in the way we give our guidance next year. The other impact on our guidance that changed between February and April was the extension in the PDUFA for vutri, which we talked about today. We got the approval today. But the original PDUFA for vutri PN in the U.S. was April 14. And our guidance when we gave it in February, assumed approval by April 14. And so the fact that, that got delayed and the fact that we already talked about, we see vutri as a growth driver for that franchise, having it on the market for one quarter less was the other reason we lowered the guidance. This may be something else that we reconsider in terms of how we guide is that perhaps we give guidance for products that are approved and things that may be yet to come, we'll update when we get the approval rather than bake that into the original guidance. So a couple of -- maybe a couple of learnings there for us that we'll apply to guidance going forward.

And are you seeing, I guess, how is COVID impact on new patient adds and compliance?

Yes, I think we messaged about this on the Q1 call. We did see some impact particularly in the U.S., I would say, in January and February. And it impacted us on compliance, mostly on GIVLAARI, a little bit on ONPATTRO. Fortunately, as we got through the worst of that in the February time frame, we did see improvement in March in terms of those compliance rates improving. And I would say that point forward, it's continued to be strong. So hopefully, feel like we've said this a lot of times. So hopefully, the worst is behind us in terms of COVID. But we did have some impact in January and February.

Maybe a last question here. How are you thinking about BD strategy on the forward?

Yes. I mean I think the fantastic thing about Alnylam is we're not dependent on M&A or business development activity to drive our business. If you think about the [ P5 X '25 ] guidance that we gave, which included a couple of financial metrics, none of that is dependent on business development. I think we'll be opportunistic as it relates to business development, and we'll look for things that will be enabling for our current platform. That's most likely the types of deals that we'll do like the PeptiDream deal that we did that will allow us to explore different delivery mechanisms outside of the liver. That's the type of BD that I would expect us to generate going forward, but not things that -- again, our -- the guidance -- the long-term guidance that we've given is not dependent on it. We're very focused on our platform and continue to invest behind RNAi.

Perfect. Well, thank you so much, Jeff. Really appreciate the time today.

Thank you very much.