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

Great. I'm Andrew Galler, one of the biotech analysts here at Morgan Stanley, and I'm pleased to be joined by Alnylam. Joining us from the company, we have Akshay Vaishnaw, the President. And we say Rena Denoncourt who is VP and Head of the TTR franchise. Before we begin, I would like to read the disclosure statement. 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. So first of all, thank you both for joining us today.

Thanks for having us.

And so Akshay, I think just a broad question for you. How do you view the company position on the other side of the APOLLO-B readout? And what do you think are some of the next key value drivers for the company?

Yes. I think it's just such an incredibly exciting time for Alnylam. You know, we have had a string of successes over the last few years, 5 products approved, these very exciting APOLLO-B data showing that the TTR franchise can hopefully now go from the inherited setting to the wild-type cardiomyopathy setting. And putting us well on track along with the approval of AMVUTTRA for hATTR-PN for our P5x25 goal, which is looking forward to a time where by 2025, we're profitable, self-sustainable company and we can continue with the innovation engine with our own organic product stream. And beyond the TTR franchise, there's so much happening there's Zilebesiran for hypertension. We've got ALN-APP, our first CNS program. We've got a number of additional programs targeting - liver targets such as gout and others. So there's plenty to talk about plenty of growth drivers coming in the next few years beyond TTL.

Great. So glad you take on the ALN-APP because Alnylam is a leader in liver targets. We're going to have some data later this year for ALN-APP, which could de-risk the potential for siRNAs in the CNS and your new ligand. Can you maybe comment on your longer-term view on different tissue targets for siRNAS and the work you're doing there?

Yes. I think we've now learned over the last 10 years that conjugates can be devised for a variety of tissues. Our first conjugate, we call it the GalNAc conjugate helped us get drugs to the liver. But we've devised novel conjugates to get drugs to the central nervous system, into the eye, and ALN-APP for Alzheimer's disease, an example of the CNS program. Now the same kinds of conjugate technologies where we replace the conjugate with a different ligand can help direct the siRNA to different tissues. And we have a variety of in-house efforts, as well as collaborations with companies like PeptiDream, to create novel conjugates for targeting a range of tissues, including lung, muscle, heart, adipose tissue kidney. So there's a lot of stuff going on. And I think you can anticipate that by the end of this decade, both from work we do at Alnylam and from others, we'll see RNAi therapeutics addressing diseases across a whole range of tissues beyond the liver. And that really is exciting to fully realize, you know, the dream we started with Alnylam 20 years ago.

Absolutely. And so some other genetic medicine companies we've talked to this conference, they mentioned that they want to build a broad toolbox with things like ASOs, short interfering RNA, potentially crispers, gene therapies. How do you think about Alnylam growing as toolbox going forward?

Yes. I mean, we're very fortunate that our organic product engine just keeps giving us wonderful opportunities to bring transformative products to the clinic. We see no, you know, end in sight for that, frankly, both with respect to liver targets and our investment in genetics is throwing up new liver targets like [indiscernible], which we talked about at the last R&D Day. So, you know, the organic product engine will continue for the liver, for the CNS, for the eye and as we get to new tissues, there'll be novel programs there as well. So, we don't need to go an in-license or establish new technologies to keep our pipeline growing. However, you know, it only makes sense that if we see opportunities on the outside that are a good fit and a good synergy with our pipeline or our technology, we're obviously going to bring them into the fold. But there's no rush and we're obviously in great places to keep going with our technology and our product engine.

Absolutely. Now if we can move to the TTR franchise. I guess broadly, what's been physician investor feedback on the APOLLO B top line data or the full data that you recently presented at ISA.

Well, we're lucky to have Rena with is. Rena, you want to start?

Yes, the ISA international [propose] amyloidosis last week. I mean the response has just been phenomenal. The physician community, we spoke with investigators, as well as broad KOLs. They're very pleased with the data. They're very pleased to see what we saw after just 12 months of a study. And really pleased to see on end points that really matter to patients about how they feel and function. So both the 6-minute walk test and the KCCQ and how we're able to maintain a lot of the benefit of Patisiran showing from baseline to month 12 across both of those endpoints really with a limited change from baseline has been really something that they've honed in on and been impressed by.

Absolutely. So as prescribing physicians look at the data, how do you think they weigh 6-minute walk test data for your drug against having hard cardiovascular outcomes data for the current market incumbent Tafamidis?

Right. So let's first and foremost, emphasize the APOLLO-B study did exactly what it was intended to do, validating the therapeutic hypothesis that TTR silencing with an RNAi therapeutic has the potential to benefit patients with cardiomyopathy. That we conducted with the endpoint of 6-minute walk test and secondary endpoint of KCCQ. And as you look at the totality of that data package in the context of what is happening in the market, there's certainly a potential position for Patisiran to be a treatment option for these patients. That's in the context of what is the standard of care today where patients are progressing on therapy. And there's an inadequate response. We're hearing that from physicians and from patients and knowing that additional treatment options are needed.

And to their decision to view a TTR silencer is a more efficacious therapy as far as reducing TTR activity then a stabilizer?

At can add on to this for certain, but there's a lot that we see. We've seen in the polyneuropathy space with the dynamic of RNAi therapeutics as well as stabilizers and we're starting to see an emerging body of data in the cardiomyopathy space that really shows encouraging and significant potential for RNAi therapeutics as being an additional option for cardiomyopathy patients.

Yes, Andrew, I mean, that's an important question, but we have to remember there'll be no head-to-head studies. If we look, however, at our work, there are a number of features, I think, that are important for patients and exciting for physicians. So if you look at Patisiran in the original neuropathy study in hATTR, we were very excited that over 50% of patients actually improve with respect to the mNIS+7 you're off the endpoint. Those kinds of landmarks have never been seen before in TTR. So, that establishes a threshold for what our drugs can do now in the cardiomyopathy setting, Rena was just talking about improving the quality of life. So, we saw that with Patisiran, the KCCQ is completely flat basically as compared to placebo, which declined. I don't think that's been seen in the TTR space before with any drug. So there have be no head-to-head studies, and we should be very cautious about making comparisons between drugs. But as we look at our data, there are certainly a lot of features that are very promising with respect to the individual endpoints, both in the neuropathy and cardiomyopathy settings.

I think another piece that's interesting is in our HELIOS-A studies and in the original APOLLO study as well as obviously in APOLLO-B. You had patients who are on stabilizers who decided to join a clinical study and I think that speaks to their hope and potential for seeing an additional benefit of -- relative to what their existing treatment option is that they want to engage in a clinical trial for an RNAi therapeutic.

Yes, absolutely. So I mean I know it's difficult to talk about it in the absence of a head-to-head study. But how do you view ONPATTRO and Tafamidis segmenting the market right now? I know that you mentioned patients still progress on stabilizers. So are these the ideal patients for ONPATTRO?

So a couple of things about the market dynamics that are unfolding as we see today. The market is growing, which is a great thing. There's an increase in disease awareness and increase in diagnosed patients. That represents a significant increase from where Alnylam plays today in the polyneuropathy for hereditary ATTR amyloidosis space, seeing the cardiomyopathy market opportunity is quite a significant opportunity for us. And then, as you were suggesting, many patients on standard of care today are either receiving an inadequate response to that treatment or they're having difficulties even accessing the treatment in the first place. So, I think if you look at the totality of the data coming out of the APOLLO-B study, assuming approval down the line and you look at what we're hearing through our market research, there is that opportunity for Patisiran to be included in the treatment paradigm.

But I think, you know, in the ultimate once all is said and done, we've got the APOLLO-B data now, we'll have HELIOS-B data in early 2024 with Vutrisiran. Our hope is that TTR silences like Vutrisiran and Patisiran can be used both as monotherapy and as an add-on. You know, these patients need help, they need treatment options at the time of diagnosis. They also need treatment options if they're progressing. And we, you know - based on the data we hope there's sufficient there to show promises on monotherapy and as an add-on. And, you know, pointing to things like the recent technetium scan data from HELIOS-A that showed, that in the cardiac patients within HELIOS-A, we saw diminution in the technetium signal associated with TTR deposition in the heart. That's an interesting and provocative sign that something important is happening and I don't believe anything like that has been seen with other drugs. So, you know, adding to those data, ultimately having the outcomes with vutrisiran, I hope will position us well both as a monotherapy and as an add-on because certainly, patients are progressing.

Yes. And then patient and physician choice are obviously important factors in use of treatment. But how do you [indiscernible] payer hurdles, especially just given you don't have this cardiovascular outcomes data. Do you think there could be a step through dynamic with Tafamidis?

Right. So on the polyneuropathy side, we've seen great market access for ONPATTRO. We're very encouraged by the existing footprint that we have there. On the cardiomyopathy side, there's a lot of hurdles we need to get through first as far as getting the label and working through what that commercial approach would look like. But I think that, as is important to Alnylam and our patient access philosophy overall, we'll work very hard to make sure that they're -- that patients who could have the potential to benefit from therapy have access to it. And we'll be working through those dynamics over the coming years.

Yes. And then in just over 2 weeks, we have an updated presentation at HFSA.

That's right, 2 of them in fact.

Perfect. Maybe you could give a high level of what we should expect to see there and how you think that's going to impact the physician reception of the drug?

Sure. So one is on the primary and secondary endpoints. Again, as was presented at ISA, but there'll be more granularity to those data. And then the exploratory endpoints will be reviewed in the second poster, and that will be a lot of things like our biomarker data, imaging, et cetera.

Should we expect to see any subgroup analyses that are - especially relevant subgroups?

There will be some subgroups provided, yes.

I think in addition to, you know, the interest in the subgroup, you'd also see interest in the biomarker presentation and the imaging presentation. The BNP data that Rena and colleagues shared with Dr. [indiscernible] and others at ISA last week were very well received. And you saw that the BNP, which is a biomarker of cardiac stress, has continued to send an increase in patients on placebo, whereas in Patisiran-treated patients, it was flat or rising very slowly. There are a number of additional biomarkers I think that will flesh out the full picture, and it will be interesting to see how people receive those. But we're excited about both presentations and in addition to that, there will be imaging data from echocardiography and technicians. So, I think it really fill out the whole picture of what this drug is doing in the disease.

Great, absolutely. And then I guess one question I had around the APOLLO-B top line data. was the clinical significant on your 6-minute walk test data. I know that in literature, we a lot of the time see 20 to 30 minutes meters as the [indiscernible] MCID. So, you came in a little bit below that. How does that -- do you think that's affecting reception of it?

I think if we focus -- one area to focus on is that Patisiran benefit and how the decline relative to baseline was only 8 meters as a median. And when you think about what you see from a normal healthy adult population, it's approximately about 5 meters. And so restoring that ability to walk for these patients is actually quite significant and very clinically meaningful for the actual patients treated. If you look at kind of other numbers that are cited in the literature as far as what the delta could potentially be. They're all different patient populations and certainly you need to focus on one individual study and the benefit that is seen, you know, of the Patisiran treated patients. The other element is that it's after only 12 months. And if you kind of, you know, look at that and that quick response, there's a lot of encouragement there for what could also be in the future.

Yes. And then I think your curves crossed a few times on cardiac events and 6-minute walk test or at the time of first cardiac event. So what do you attribute that to? Is it just a function of the time to achieve functional knockdown? Is it a function of the short-term follow-up, the disease state or something else?

Yes. So you know, if you look at the totality of the data, and again, I said from ISA and the HFSA presentations will help here. Essentially, the drug comes on board and TTR knockdown is rapid within weeks. But it takes about 6 months before you really start to see the effects of TTR knockdown on the various parameters. And you talk about the curves crossing and really what happened is in those first few months, there were a few extra events in the Patisiran arm which, over time, as the drug kicked in beyond 6 months, you start seeing the impact of Patisiran on the disease and now the placebo continued to decline in the -- by 12 months - the 2 curves appear to separate in favor of Patisiran. Now it's not statistically significant, but I think what we have to do is in our mind say, 0 to 6 months, the drug is still getting on board and doing its thing. Then we start seeing drug action and then what if we fast forward to 2, 3 years, what are we going to see then? And that starts giving us ideas for what we hope to see in HELIOS-B. And frankly, we're very confident based on, you know, what we were seeing at 12 months for the future of both Patisiran and Vutrisiran in the indication.

Great. And then I just wanted to ask, do you plan to run any sort of combo study between stabilizers and silencers?

Well, so remember, both this study, APOLLO-B and HELIOS-B, some patients have background to [indiscernible] therapy. So, the factor, there is some combination group there for analysis. We're not going to run additional, you know, combination studies at the present time. We haven't set anything on that.

Yes, absolutely. And I think that's covered basically everything in cardiomyopathy, but I'd like to talk about another TTR opportunity that I think flies under the radar despite the size, Stargardt for AMVUTTRA. So let's just first discuss broadly the rational for targeting TTR in this disease.

Yes. So Stargardt disease is, I think, is the commonest inherited retinopathy globally. It seemed in every territory, also recessive disorder they're due to mutation in a gene called ABCA4 or ABCA4. ABCA4 is involved in the metabolism of vitamin A during the visual cycle. Deficiency of that enzyme leads to buildup of toxic vitamin A metabolite that result in accumulation of something called Lipofuscin or Foscin, I never know how to pronounce it. That results in geographic atrophy that damages the macula and so you get blindness. So, the hypothesis is what if we can reduce vitamin A transport to the eye and reduce the production of these toxic vitamin A metabolite? Would that impact the geographic atrophy - Lipofuscin accumulation geographic atrophy. There's a very nice mouse model of this disease with the ABCA4 knockout and in that setting, we're very excited to see what happens in the eye when you dose these animals with a TTR silencer. So, that's the rationale for it and the idea would be to take patients once they're diagnosed early in the course of disease and do a randomized study to compare placebo to, there are no treatments for this disease at the other time, and look at over a period of time, what happens to the macular. And there are a number of endpoints there which we'll discuss in due course when we share more details. But it's surprising to say this is a common retinopathy numbering in the tens of thousands around the world. The blinding disorder, and the mouse data, and the scientific rationale are strong and suggest that we could hopefully reduce deterioration in the eye once the drug gets on board.

It's a really compelling commercial opportunity. As being a completely distinct patient population from our ATTR amyloidosis world, without an existing treatment as Akshay mentioned, but we're leveraging a potential product that we have in hand to address these patients.

And we know that the dose, the regimen, the degree of TTR knockdown is safety. So it's a very exciting hypothesis.

Absolutely. And then do you think TTR stabilizers or a risk for you in this indication? I know there's not an ongoing study for Tafamidis, but just theoretically, I guess.

I don't think so because, remember, TTL stabilizes. The therapeutic rationale there is that you have TTR tetramers coming out of the liver that tend to fall apart and misfold in deposit in the nerves and the heart. And with the drug like Tafamidis or the TTR stabilizes, the goal is to stabilize the tetramer and prevented disintegrating, creating amyloid fibrils that deposit in the heart. So it can't really influence Vitamin A transport in the therapeutic mode that we can by reducing TTR levels. Which will aggregate delivery of vitamin A to the eye by a substantial degree, but not completely. There's enough to allow ocular function but reduce the transport of vitamin A sufficiently to prevent the buildup of these toxic metabolites.

Yes. But I guess if it binds to the tetramer in a way that's competitive to RBP4, you can't really translate - you can't really transfer the vitamin A to the eye. So, you don't have that complex anymore.

Okay. So, TTR stabilizers typically binding the thyroxin groove of the tetramer, right? That's my understanding. And so they don't disturb a vitamin A metabolism in any fashion or you don't see any changes in serum vitamin A, as you do with our drugs, with TTR silences if you have Tafamidis on board.

That's fair. And then just maybe a commercial question. Do you think you're rightsized with your commercial footprint right now to compete against large biopharma players like AstraZeneca and Pfizer in this increasingly growing and prevalent population?

So I think we've had 10 years of history in the TCR space, and we've spent a lot of time really honing our commercial approach, we're focused on the polyneuropathy space at this time, but we have a lot of scalable capabilities that have been implemented in order to be successful in that space, and we'll be leveraging those and building them out accordingly. We will potentially need to grow, but we'll be a learning organization, take what we learn as we go and then build the right capabilities at the right time in the right way.

I also think it's exciting that AMVUTTRA is already approved in the U.S. soon in Europe, and we have the presence already, and we'll be considerably ahead of AstraZeneca in the hATTR-PN space. And also we imagine in the cardiomyopathy space.

Absolutely. So if we can move now to Oxlumo. One of your new big opportunities now is recurrent kidney stone disease. So as we kind of think about this relative to PHType-1, how does the importance of dietary oxalate intake change the risk reward of these studies?

Yes. So, you know, serum oxalate steady state is influenced by intake through the diet. There's no question. But these patients with recurrent kidney stones, almost all of which are calcium oxalate, it's very hard to manage dietary oxalate. And so really, the more remediable factor is pharmacologically to try and reduce endogenous oxalate production, and that's what we're trying to do with our drug Lumasiran. And so the hypothesis is we do that by targeting the GO-1enzyme in the liver to reduce the production of Oxalate sufficiently, to reduce the urinary oxalate levels, and thereby prevent formation or development of renal stones.

Absolutely. And then just commercially, I think moving from PH1 to a more prevalent disease like recurrent kidney stone disease. The current pricing for Lumasiran will be probably a nonstarter. So what would be your strategy to address that?

Well, I think we need to get the data first and understand degree and type of clinical benefit. But there's no question that if we can see an impact on renal stones, a disease that affects literally millions of people around the world. And I'm talking about recurrent renal stones, renal stone -- an isolated renal stone event probably occurs in hundreds of millions of people around the world. So we will, you know, have to address that at the time, and I'm sure there'll be ways to do that. But just the sheer size of the market and the unmet need dictates that we're going to need to help patients if we have that kind of efficacy date.

Great. And let's move into the pipeline ahead of some of your Phase I, Phase II readouts by the end of the year. So regarding the ALN-APP, as we talked about, it has the potential to drive a broader expansion into the CNS by derisking its ligand. Can you maybe discuss some of the high-value targets you're thinking about in CNS right now?

Yes. So APP itself is a genetically validated target for Alzheimer's disease. No one has ever tested the hypothesis of reducing intraneuronal APP production as well as extra cellular. You know, the antibody-based approaches, of course, of antagonized extracellular APP and reduce the plant burden. But we know that APP fragments within the neuron are neurotoxic. We know they also influence synaptic function and so that's a very exciting hypothesis - preliminary data by the end of this year or so in terms of safety and knockdown. Beyond that, there's a very rich pipeline we're developing with Regeneron. So Huntington is a program that is a great interest to us and Huntingtin, of course. SOD1 is another program of interest. MAPT is another program of interest. And there's a whole range of other targets for pain and Parkinson's and other -- these are genetically validated targets that are of interest. And so beyond this APP news, you're going to see filings increasing in tempo from [indiscernible] from the range of other CNS targets in the future.

Yes. And then if you think about your choice of indication for APP, are you targeting early onset Alzheimer's disease just as a test case? Or is it because you think that it's more amyloid driven form of the disease?

Yes. I mean I think that there's much more thinking to do about the exact patient segment in late development and how to develop the drug. For now, what we're very focused on is - certainly the early patients are of interest because in some senses, they're probably the most remediable. But most important of all is to establish safety and to show translation of technology from very promising animal data into the human setting and show target knockdown. And if we see target knockdown with APP, I think we would interpret that as evidence of widespread [indiscernible] CNS by distribution of our drug and significant suppression of the target in a range of CNS lows. Which is important, not just for the APP program, but for the future of the platform because to reach the full potential of these CNS drugs, we're going to have to get to a variety of places in the nervous system.

And then I know that you mentioned APP processing knockdown hasn't been tested a hypothesis before, but at least amyloidogenic APP processing with BACE1 inhibitors has been tested. And these obviously were all discontinued due to a reduction in whole brain volume and decline in cognitive scales. Are you concerned that you'll see the same thing with ALN APP?

Well, you know, safety is always going to have to be closely monitored. It's a new part of our platform. But the BACE inhibitors, they're small molecules. There are a number of important off-target effects. They're also -- the target is counter-regulated and upregulated. So it's not a clean test of the hypothesis from our perspective. And that's why we like an RNAi-based approach where we are focusing exclusively on the APP message. Knocking it down, reducing the production of the amyloidogenic fragments, which damage both intraneuronal and extracellularly . So we'll see but we believe and the experts are very interested in testing this hypothesis in a very unique way, which they feel has never been tested before.

Absolutely. And for ALN-XDH and Gout, it is a strong biologic rationale given XDH is a [indiscernible] synthesis. But I guess looking more broadly, where do you think the unmet need is in Gout today with recent data from trials like mirr for KRYSTEXXA?

Yes. The issue with gout is that we have drugs that can reduce serum urate -- but the problem is are patients able to take the drugs at the doses that they need to be taken at consistently enough to prevent gouty attacks. And as a result, there are millions of people around the world who get recant flares of gout and/or damage their kidneys with elevated serum urate levels. And so the unmet need is still there. And we believe that a once every 3 or 6 month agent that can reduce serum urate substantially would be a very important addition to the [indiscernible] because it will aid - provide consistent reduction of urate without missed doses, compliance issues. It'd be very convenient, and it could be administered the doctor's office or in the pharmacy. And so provide a new paradigm for the treatment of gout. And given the size of the problem, and it's a growing problem, we think it's a very exciting program.

Absolutely. So I think when I think about gout, at least, one of the big unmet need in the earlier lines of therapy where Allopurinol is very inefficacious for [indiscernible] Febuxostat has the black box warning. But, do you see a position where you could actually go into early lines of therapy with the siRNA?

Well, we'll see the Phase I data anticipated around the end of this year, and we will wait to see what kind of serum urate reduction we have. And then there are a number of development possibilities ahead. You know, everything from monotherapy, of the type that you describe in patients with hyperuricemia and gout, or patients who are on therapies and still struggling to control their serum urate. It could be added to Allopurinol or Feboxastat. But, you know, we'll be guided by the data as they come out later in the year.

Absolutely. And then moving now to ALN-AGT. I think just how should we think about the shift for siRNAs from rare diseases historically to more prevalent indications. Where do you see there being hurdles, I guess, obstacles?

Yes. I mean I think it's just such an exciting time. I've been at the company for almost 17 years. And from where we started with what was essentially an in vitro phenomenon to be able to see it come to realization, knocking down liver targets in rare disease, the kinds of benefits we've spoken about in the TTR space. And now to bring it to large indications with unique product profiles that are transformative. You know once every 3-6 month administration of the drug, tonic control of the parameter in question. So, we know blood -- there are many medicines for blood pressure or elevated blood pressure, but they don't control blood pressure qualitatively and quantitatively in a way that patients need it managed. You get nighttime elevations in blood pressure, you get a lot of ups and downs, whether you're taking your medicines or not. And so I think that this whole theme of going into prevalent disease with more consistent control of the disease, with convenience and with the ultimate benefits that should accrue from that will provide fully differentiated medicines that will be important in a range of common diseases. And in ALN-AGT's Zilebesiran will be the first of many. And of course, we're all keenly watching the progress of Inclisiran with Novartis, which has a very exciting profile too.

Yes, absolutely. But just given in cardiology, you're going from a market dominated by self-administered oral drugs to external - at least currently are physician-administered. So are you -- do you have initiatives working on self-administration of these drugs?

Sure. I mean there's nothing to stop the self-administration of any of our products. But we've got to look at each indication and setting and divide the right solution for patients and doctors. So that's how we're guiding out the development of our drugs. And where appropriate, we will have self-administered in-home medications.

Great. I see we're out of time. So thank you so much for joining us today.

Thank you Andrew.

Thank you.