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

Hi, everyone. Thanks for joining our conference. We're very pleased to be hosting Alnylam today. My name is Liisa Bayko. I'm one of the analysts here at Evercore ISI, and this is HealthConX 2022 in case you're in the wrong place. And this is the Alnylam team. And Alnylam had -- I think it's such an interesting company and had great success so far with their RNAi platform and more to come and some great data that's really kind of, I think, woke people up and we're excited to dig in. So maybe we can start off by just some quick introductions. Jeff and Eric, do you want to briefly introduce yourself and then we'll get started.

Sure. Maybe I'll go first. I'm Jeff Poulton. I've been with Alnylam for about 3.5 years now. I'm the Chief Financial Officer.

Hello. I'm Eric Green. I've been with Alnylam almost 8 years now. Started out as the General Manager for our TTR franchise for the first 6 years probably. And then about the last 2, and in my current role as Head of Development programs, now we had a team of program leaders that are, themselves, responsible for all of our development stage assets.

Excellent. So for those maybe less familiar with Alnylam, just to frame it up, can you give us a brief overview of the company?

Yes, sure. I'll start. We're the leader in RNAi therapeutics today. And that's a whole new class of medicines that we pioneered over about the last 20 years based on Nobel Prize science. Where that's gotten us today commercially is we've got 5 commercial products based on that platform. 4 of those products -- and those have all been approved in the last 4 years. And 4 of those products are wholly owned and commercialized by Alnylam. So 2 of those are in the hereditary ATTR space. I'm sure we'll talk about that more over the next 20 minutes. And 2 of those are on ultra-orphan products, 1 for acute hepatic porphyria and 1 for primary hyperoxaluria type 1. And the fifth product is a product that we out-licensed to The Medicines Company that was acquired by Novartis, and we've got a financial relationship through a royalty in that, and that's LEQVIO that they're selling for hypercholesteremia. So that's the commercial part of the business. On the pipeline side, we've got a robust organic product engine that really drives the pipeline, which I think is pretty unique, a true platform company. So we've got lots of both preclinical and clinical programs, maybe a couple of programs worth highlighting. One is zilebesiran, which is a program in Phase II development for hypertension. So a prevalent disease program. We've got 2 ongoing studies there that we expect will complete enrollment and read out sometime next year. And then the second one is ALN APP, which is in development for Alzheimer's disease and cerebral amyloid angiopathy. That's in a Phase I study that's ongoing today that we expect to read out early next year and the significance of that is that's our first CNS-targeted program. And we think if we can demonstrate proof of concept, both safety and knockdown that, that could open up things for a lot of interesting new opportunities. And then last thing I would highlight is we put out a strategy for the company a couple of years ago now called P5x25, which is really all about moving the company towards being a top-tier biotech. Maybe just a couple of highlights on that financially. One is that we expect 40% or higher compounded annual growth, top line growth rate across that 5-year period. And then secondly, we expect to get to sustainable profitability within that 5-year window as well. And we're on track for both of those, I would say, after a couple of years.

Excellent. So I'm asking all the companies is one question this year for the conference and that's what's the #1 question you get from investors? Let's just clear that out right now, and we can address that the #1 question is.

Well, that's an easy question for us to answer, I would say. We get a lot of questions about our ATTR franchise, specifically questions about confidence level and expanding the franchise into the cardiomyopathy part of the market. And obviously, that's very interesting and important from an investor standpoint given the potential size of that opportunity, which is about probably 10x the addressable patient population compared to the part of the market that we're in today, which is the hereditary PN part of the market. So there's a lot of interest in that. We're confident in our ability to get there. And I think most of the interest is, frankly, around HELIOS-B, understanding our confidence level that, that study will read out positively. So that's our outcome study with vutrisiran that's currently underway, and we expect to have data from that in early '24. And I think there's a variety of reasons that we're confident about that study. And it really starts with most recently with the APOLLO-B data that led out, which was is the patisiran cardiomyopathy study, a very different study, a much shorter study. So a 12-month study where the primary endpoint was a functional endpoint, 6-minute walk, and then the first primary endpoint was KCCQ, how patients feel. We were really excited and pleased with the outcome of that study that we hit both the primary and the first secondary endpoint. And I think the way we look at that data is we see that as both the primary and the first secondary is potentially showing stabilization of the disease, which we think would be is a terrific outcome again on a 12-month study. There was also a number of very interesting secondary end points and exploratory endpoints looking at echocardiographic parameters, biomarker endpoints as well as imaging that all sort of trended in the right direction. We also saw some very interesting data on the mortality side that showed a benefit on the drug arm, not statistically significant, but encouraging as well as the CV safety profile was also very encouraging in the favor of ONPATTRO. So the totality of that, I think, has given us increased confidence for HELIOS-B. And we've also got additional data that has been collected in other studies prior to APOLLO-B that also gives us encouragement, the original APOLLO study, which was a study in hereditary patients only but there was a cardiac subgroup of patients where we had a post-hoc analysis where we showed pretty significant benefit on mortality and hospitalizations at 18 months, that was encouraging. And then the HELIOS-A study with vutrisiran, which also was in a hereditary population also had some encouraging cardiac data that we read out last year. And then the last thing that I would say that gives us confidence around HELIOS-B is the design of the study. So it's about twice as large and 3x as long as the APOLLO-B study, again, this is an outcome study, which is why it's bigger and longer. We think we designed it conservatively from a powering perspective. And we get a lot of questions about background TAF usage in that study. So the operational target for background TAF in that study was at 50% and we came in below that target. And so for the reasons sort of study design reasons, it also gives us confidence in the ultimate outcome there. But that's, without question, the #1 place that investors go with questions for Alnylam today.

Yes. So the TAF one is interesting. I mean I thought like in your prior study, there were differences, right? When you looked at your APOLLO-B study, right, there are differences that patients were on TAF or not in terms of the outcome. So how does that kind -- I don't know. Does that change your view in any way on kind of...

Maybe I'll jump in Jeff. So in Apollo-B correct, we did have a slightly different inclusion/exclusion criteria than HELIOS-B, in that, we want to have a -- we had a protocol maximum of 30% of patients could come in on tafamidis already in the study. We actually executed that a little bit less is only 25%. So a fairly small part of the study. And in the opinion of the investigator, they had to have progressed well on tafamidis. So that was kind of how we designed the study. That's what we enrolled. And then as we had the results that came out in particular, the presentation at HFSA, where we had our forest plots, you do see some point estimates that look a little bit different based on the TAF baseline or TAF naive, but the error bars are quite wide. So we think they are very small patient segments that is a little bit misleading to go too far in making broad assumptions or statements about what is or is not working in those subsets. So [ were, again, ] overall, is designed to show the difference between patisiran and placebo. And we just knew this would be a confounding factor. So we then controlled for it and obviously show the analysis based on that subgroup.

BridgeBio obviously increased their trial size for cardiomyopathy outcomes. And you haven't done that and you talked about your confidence level and you've designed it conservatively, can you -- I don't want to beat a dead horse because I'm sure you've been asked this question a million times, but maybe I can ask something this way, are you like done -- like you're not going to change the size of the study now? Is that...

So I think just to be clear -- I think the most recent notice I heard was Ionis actually had increased the size of.

Sorry. It's Ionis. Sorry, sorry.

No worries. I just want to make sure we're talking about the same study. And that would obviously be the second increase in study size. They were still obviously still enrolling and therefore, a little bit easier for them to do that. Previously, this year, they actually lengthened the endpoint also with which they assess their composite outcomes endpoint, but frankly, brought it more in line with what we had already done. So for HELIOS-B, we have designed it such that we will follow all patients up to 36 months in a double-blind period and therefore, count events that whole 36 months, but we'll run the primary analysis when the last patient enrolled hits 30 months. So those last 5, 10, 15, 20, whatever the patients are that enrolled in those last 6 months may not have a full 36 months, but a great number of patients will. So that helps us with our powering by being able to continue to count events in those extra 6 months. And that's different than ATTR-ACT, more in line with what Ionis has done more recently. We think based on the comments that Ionis has made publicly at least, which is all we obviously know is that they want to get more patients. They wanted to get them maybe to frankly, bring down the amount of tafamidis that is coming in at baseline that I'm aware of, they do not have any limit on that in their protocol, and they may have been overweighted on having patients with tafamidis concomitant use. And potentially, want to make sure that they have enough power, given maybe what they're seeing as they look at their data in the interim. So it's not totally clear why. I do believe it will push out their data when they have data. I don't think they've stated that publicly, but I have to believe, just logistically, it has to probably take a loan to enroll those next 300, 400 patients.

But you -- no plans to increase the trial?

We completed enrollment in HELIOS-B in about late summer last year. So to open up the study to start enrollment again and then do the 30-month clock is just -- does not make sense. And as Jeff alluded to in his previous answer, we're quite confident in the powering assumptions we made for Helios-B. We overenrolled by about 10% than what our target was. So all in all, we're confident the types of patients are consistent with what our protocol was looking for, and the design we feel is conservative. So we're not going to open up the study and continue to enroll.

Do you buy into the notion that the patients have changed from when study started for tafamidis back in the day, a decade ago or...

I think -- so it's -- the facts are there, right? They attract demographics of what those types of patients they enrolled in that study is different than what BridgeBio showed last year and is different than what we showed in our APOLLO B. On our studies, we intentionally, we're focusing on patients in A Class 1, 2 and 3, but we had exclusion criteria to essentially keep up the worst of the worst of NYHA IIIs. We know sometimes those patients are with heart failure are quite far gone, maybe nothing could help them. And we want to make sure that we didn't put in the sickest patients that didn't really have much of a choice. So we have enrolled a slightly more mild population compared to ATTRACT. I don't know that means the patient population broadly has changed, simply, that's how we executed our study.

Okay. And you've got some biannual dosing coming from vutrisiran, which I think it's just amazing to think about you could take a drug twice a year. How important do you see that for your competitive profile?

Maybe I'll take that. Where I would start, Liisa, is to look at the AMVUTTRA launch that just occurred in the U.S. in the third quarter, which is a quarterly subcu-dosed product, right, that we launched with. And the third quarter results for AMVUTTRA in the U.S. were quite good. We booked $25 million in sales. And really in terms of how to think about growth for vutri, you really need to look at this on a franchise basis now because there is cannibalization of ONPATTRO occurring with that business. And so you need to look at this on a combined basis. So when you look at this on a combined basis for the U.S., Q3 versus Q2, there was 30% growth quarter-over-quarter, which is much more rapid than what we had been seeing before we launched AMVUTTRA. About 20% of that growth in Q3 was demand-driven, and 10% of it was the initial stocking for AMVUTTRA in the channel. But there's a number of things that I think have really encouraged us related to that data in Q3. One of the things that we noted on the call on the Q3 call was that the average number of start forms for new patients that we had in the third quarter was about 60. That's double the rate that we were at prior to the launch of AMVUTTRA. So certainly, there was a significant upsurge in demand in the quarter with the launch of AMVUTTRA. And if you look at the patients that have come on to product in the quarter, there's newly diagnosed patients. There's patients that had previously been diagnosed but never started on therapy. There's switch patients both from ONPATTRO as well as other therapies. And then interestingly, there were some patients that had previously been on ONPATTRO that had stopped taking ONPATTRO that have now reinitiated therapy on AMVUTTRA. So all of those things are really encouraging in terms of expanding the overall opportunity given the profile of the product. I think from a 6-month dosing product perspective, it's a nice-to-have for sure in terms of additional patient convenience. And what we've said is based on the study that we're running that we expect to have that data by the end of this year, and we'll be looking at safety and knockdown. So yes, we're off to a good start there, and we're excited about it.

Are you willing to, I guess, give up any efficacy at all for that 6-month dosing or do you want to...

I don't think that's how we're thinking about it, no. I mean I think I don't think that that's -- with a disease like this with as serious as this is, I don't think we're thinking about compromising on efficacy.

The Stargardt program. Why do you think it could work here? What's the evidence?

So it's a really interesting hypothesis where in Stargardt disease because of a mutation in a certain protein vitamin A and frankly toxic metabolites of vitamin A build up inside the eye. With the reduction of liver express TTR, which is a transport protein for vitamin A, we've shown from our earlier studies, both with patisiran and with vutrisiran a nearly 1:1 reduction of vitamin A correlated to the reduction in TTR. Our hypothesis is by dramatically reducing the amount of TTR, you can reduce the amount of vitamin A transport, including to the eye and therefore, limit the continued production of this toxic metabolite. So it's a really elegant hypothesis that we now originally had planned to be able to study this with vutrisiran where we already had an extensive safety database. We did announce at the Q3 results call that we are pausing our Phase III study in Stargardt with vutrisiran as we continue to explore the implications of the investment -- Inflation Reduction Act. So we haven't decided exactly what we want to do with that disease. It's a really interesting hypothesis, but we're not ready yet to move forward into a Phase III.

How do you think about the Inflation Reduction Act? We didn't get to that question. I really wanted to talk to you about. It feels like you're on track to be a big drug here, and you may actually qualify to be on that target list. And how are you thinking about how you approach that?

Yes. Well, let me comment specifically as it relates to vutrisiran and what we announced on the third quarter call that Eric just mentioned, which is we had been planning to take vutrisiran and start a Phase III study in Stargardt and what we said is we're not going to do that now. And as we assess the implications, the IRA. The issue here is fairly unique. The IRA, if you have a single orphan designation for a product gives you an exemption from future price negotiations under the IRA and both ONPATTRO and vutrisiran have a single orphan drug designation, which is ATTR amyloidosis. So from an ATTR perspective, right now, patisiran or ONPATTRO and vutrisiran or AMVUTTRA, are protected from any future price negotiations under the IRA, which is really important for those products in those disease areas, given that about 70% of the patients in ATTR and Medicare patients and given the fact that we see significant commercial potential here longer term. And so that exemption is really meaningful for us. And so the challenge was if you get a second orphan indication, designation for the same product, you lose that protection. And so for moving vutrisiran into Stargardt would potentially give us that second orphan and we would lose the protection that we've got. So that's the reason that we're not moving forward right now in vutrisiran. I think the good thing about our platform, which Eric alluded to, is there may be other ways for us to do that with a different drug that doesn't create that financial risk, ATTR franchise. And so that's what we're exploring. We're not yet ready to announce what that might look like or what the might -- what that path forward might be, but we're hard at work on determining that now to avoid this issue.

Okay. So many questions I just not able to get through in 20 minutes. I guess, just very quickly, is your first foray into CNS disease. We've got Alzheimer data coming soon. Just very briefly, what should we be looking for to say, this mechanism is actually working? And does this provide, I guess, some derisking elements for other CNS diseases?

Yes. We're very excited about our ALN-APP programs, our first-ever small interfering RNA delivered to the CNS. We initiated that Phase I study earlier this year. We did announce that we expect data, top line data, initial data from that Phase I study in early 2023, primarily looking at safety and tolerability, obviously, also looking at biomarker indications of pharmacodynamics. So we're specifically looking at soluble APP alpha and beta and of course, imaging and various other exploratory biomarkers. But the initial data top line will be target engagement and safety, frankly.

They're very exciting. I hope you can chase all the way at that. It's just so important. We're not going to get in to -- be able to talk about the rest of the pipeline. So we'll earmark this for a Hump Day launch or you go to join us in our Wednesday list talk about the rest of the pipeline, it's so interesting. It includes [ idea neuropathy ] gout, NASH, hypertension. These are all areas I do a lot of work in and care deeply about. So I'm excited to do that at some later point. But to close out, maybe you can just kind of like key catalysts for Alnylam for 20 -- well, I guess, what remains in 2022 and for all of 2023.

Yes, I would say that the 3 things that I would point to for next year, the main catalyst one is we just talked about at the ALN-APP data, which we expect to read out early next year. And Eric highlighted the importance of that, not only for that specific study, but the fact that, that may open up more opportunities more broadly in CNS. So that's one. We touched briefly on the hypertension program earlier as well. We expect the Phase II, 2 Phase II studies to read out next year. So that's a second catalyst. And then the third catalyst, I would say, would be Apollo-B. Again, we expect to file the sNDA by the end of this year and have an action on that by the end of next year. So that would be the third catalyst that I would point towards.

Excellent. Okay, guys. Well, we're over time, but I want to thank you for joining. Thank you, everyone, for joining, and a lot to look forward to here with Alnylam. Thank you so much. Bye-bye.

Thank you.

Thank you.