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

Thank you, and good afternoon, everyone. Welcome back to another session here at the third day of Oppenheimer's 33rd Annual Healthcare Conference. I'm Leland Gershell, one of the analysts on the biotech equity research team here at Oppenheimer, and we're very delighted to have with us Alnylam Pharmaceuticals, will be having a fireside chat with Akshay Vaishnaw, who's the President of Alnylam. We do cover Alnylam stock with an outperform rating. And we will have about half an hour to have a good discussion. If you do have any questions, feel free to send those over. I will see if I can work those in. But I think we're pretty good in terms of our road map for this. So Akshay, thank you very much, and welcome to the chat.

Leland, thanks so much for inviting me. And it's my pleasure.

Wonderful. I think we'll maybe touch a bit on kind of some of the current dynamics in the market with AMVUTTRA. That's a launch that's been proceeding very well, and it's been really encouraging to see that product bring more people into treatment. Maybe wondering if you could discuss kind of how the AMVUTTRA ONPATTRO dynamic has been shaping up so far as we've been getting into the first few months of 2023?

Yes, yes. I mean, just to do some scene setting for folks, AMVUTTRA approved last year in hATTR with peripheral neuropathy, delighted with this profile that we have with the drug once quarterly subcu, the results look very, very similar to the original ONPATTRO drug in the APOLLO study. The launch has gone exceptionally well. The franchise revenues for TTR last year grew to $651 million, which is a 37% growth year-on-year, which is super and almost 3,000 patients on drug between ONPATTRO and AMVUTTRA. And if you look at the scripts, it looks like a 50-50 where at the end of the year, about 53% of the start forms were on AMVUTTRA new prescriptions and 47% were ONPATTRO patients switching. And so the new patient number is really interesting and encouraging because about -- when we look at the U.S. prescriber base last year, there seems to have been a 30% growth in terms of U.S. prescribers attracted largely by AMVUTTRA. And so that is a really terrific start, and we're hoping to obviously build on those numbers this year, although its early in Q1, so not much to say yet, but exciting times.

Great. And let's talk a bit about ONPATTRO's near-term prospects for its label expansion to TTR cardiomyopathy for which you do have an October 8 PDUFA although the APOLLO-B trial met its primary 6-minute walk endpoint, there are a few lingering concerns among some investors related to that endpoint itself as well as perhaps to factors such as background use of tafamidis, which I believe was around 30%. Might you be able to briefly speak to some of those concerns as we head into this FDA decision?

Absolutely. Look, we read the study out last year, the top line data where we think very exciting and very supportive, lots of internal consistency in the study, with the primary endpoint being around 6-minute walk distance. I think one of the concerns we've already batted away some people said we might get a refusal to file. And well, we're delighted that the FDA has accepted the application for review. And the data themselves, if we look at the primary endpoint of 6-minute walk distance, the significant -- statistically significant difference between patisiran and placebo was notable. And in fact, the patisiran arm showed an almost flattening in terms of decline in 6-minute walk distance. And in other words, patients maintained by and large their 6-minute walk distance from baseline across the 12-month period. Now there was a slight decline of about 8 meters, but this population at this age of this type declines by 5 meters per year anyway. So in other words, the difference between placebo and ONPATTRO was so significant, statistically, but also restoring we think, patients on patisiran to something like the kind of decline they would have experienced through age anyway. So we really couldn't have done much better than that. In this particular study, we feel so, we regard is a rather notable result that primary endpoint was then supported by a lot of other endpoints in the study like the KCCQ, which was the first secondary quality of life. That too was statistically significant, whole host of biomarkers like BNP and echo and technician scans, all of them favoring patisiran. And then finally, mortality 10 patients died, I believe, in the placebo arm and 4 in the patisiran arm. And so you look at that kind of internal consistency and the impact on functionality of the 6-minute walk distance, quality of life, pretty exciting package. And so we're looking forward to further talking about our data. There's going to be an advisory committee, which everyone knows and so we are ready to engage with the FDA at that time.

Great. And with obviously, that outcome to come up obviously some time before the October FDA action date, any updates there on when we may see that meeting being held?

Yes, I mean it's hard to predict, they schedule it, the PDUFA date is October 8. Typically, these adcoms occur about 60 days or so prior to that. So one could anticipate late July, early August, some kind of time frame like that, if things go to form. But we just have to wait for FDA to give us more on the scheduling, yes.

Great. And as we look forward to hopefully ONPATTRO coming in to serve this part of the population with oral tafamidis having demonstrated benefit to outcomes, and it's already obviously quite familiar to cardiologists who have been prescribing it, I wonder if you could relate your view as to how you see ONPATTRO segmenting into the TTR cardiomyopathy population?

Yes. The APOLLO-B study was done both in wild-type and hereditary TTR patients. So we've covered the full gamut with cardiomyopathy there, and the study was positive. So we hope that all these patients are available to access drug. In the specifics of how tafamidis has done and as you noted, the outcomes data, the drug reduces mortality and hospitalizations, but there's still plenty of unmet need, unfortunately. It's not like people stop dying or stop going to hospital because of tafamidis. And so clearly, more drugs are needed in the space. Patients who are progressing on tafamidis, obviously, will be of concern to physicians and people can't access to families for 1 more reasons, whether it's the co-pay or other reasons. So this is -- especially when we consider the wild-type cardiomyopathy, a large disease with a growing number of patients, relatively easy to diagnose via a technician scan. And so as we look at the kinds of segments I've mentioned there are a lot of patients we think we can help both with wild-type and hereditary TTR cardiomyopathy.

And to that point, again, with the breadthening not just to the indication but to the type of background, whether hereditary or wild-type, as you mentioned, did you see kind of the mixed phenotype patient as being the one who offers kind of the greatest prospects for at least ONPATTRO uptake in the near term? Have you done any kind of market studies or market research to help maybe understand that?

Yes. We haven't shared a lot of that kind of market research data yet. But clearly, with ONPATTRO being so impactful in neuropathy, from our estimates, people seem to -- not our estimates, but what people tell us, they regard it as one of the most potent drugs for the neuropathy by far. I mean, if you look at the Phase III data for APOLLO, it's quite clear that this is a very, very important drug for patients with hereditary TTR-related disease and the neuropathy. And if you combine that now with the cardiomyopathy data, I agree with you, that the mixed patient population when we talk about the hereditary space is very important and one that all the organs should benefit, we think, with what is a drug that's been on the market for 4-plus years now and with a very nice safety profile, which was further validated in the APOLLO-B study in the cardiomyopathy population. So that's definitely a segment of import, provided ONPATTRO is approved, it would be the drug with the broadest label in some senses in the U.S. because tafamidis is not approved in hereditary neuropathy. So let's see. But I think there's a lot of opportunity to help patients both in terms of the different types of patients, some of the segments we've discussed as well as quantitatively because you did look at the size of the wild-type opportunity.

Great. And AMVUTTRA is making its way in the HELIOS-B trial, and that's also in TTR cardio. That's going to read out, I believe you guys expect early next year, so maybe about a year's time that does have outcomes data built into the primary analysis. Obviously, that's not going to come too long after what you could have as ONPATTRO with its label expansion. When might you see a label expansion for AMVUTTRA then come assuming that the HELIOS-B is positive?

Yes. So those data, as you so expected, early next year, we're super excited about that study. I mean, the APOLLO-B data are encouraging, but let's recall HELIOS-B is twice as large and 3x as long. So the power to really demonstrate impact on the full range of endpoints is significantly here. And so we're looking forward to that readout. If we get the data early next year, as I said, it could lead to an approval late '24 or early '25. Obviously, we'll guide closer to the time once we filed the NDA and so forth. But that would be pretty exciting.

Question that I wanted to ask just came up from the last quarter's update with respect to GIVLAARI. You've been reporting kind of the consistently growing number of patients on GIVLAARI, yet the sales have been a bit flattish over the past few quarters. Just would this suggest that we should see kind of a catch-up like a robust, maybe inflection for GIVLAARI sales as revenue may kind of true up to the patients who are actually being treated?

Yes. I mean we've got about 500 -- over 500 patients on drug at the end of '22. There was -- the U.S. growth, in particular, was -- revenue growth looked flattish. The demand growth was 3%, driven by an increase in patients on therapy, but offset by modest changes in the inventory stocking. Rest of the world has done better with GIVLAARI in terms of growth, 10% -- oops, let me turn this off, sorry. And so overall, the picture is this is a really important impactful drug that's helping a significant number of patients. And we expect steady and continuous growth for GIVLAARI in this year and in the coming years. Obviously, the TTR franchise is dominant, but this is an important part of the portfolio. And it will be a meaningful contribution to the top line this year, which we've said would be between 1.2 and 1.28. So that's the outlook currently on GIVLAARI.

Let's move over to some of the pipeline opportunities in the later stages of your portfolio and moving certainly much more toward the common condition direction. We've seen very supportive data out of zilebesiran to date. Could you just review for us the designs of the ongoing Phase II cardio studies, which you have 2, 2 that are ongoing and what your goals are here? I think we'll be seeing data from those kind of middle to then late this year.

That's right, yes. So one of the things about zilebesiran that is so interesting and exciting is we're now in a space of hypertension for which there are literally dozens of drugs. But despite that, we haven't had any true innovation for patients with hypertension a very long time. And another thing that we should all be familiar with and is very important in terms of the unmet need is 50% or more of patients with hypertension just don't take their drugs after 1 year. And this is a terrible situation because it's not like antihypertensive oral meds don't help, they do help, but you've got to take the drug. And if patients aren't taking the drug, they're not getting the benefit. And so with zilebesiran, our product concept is to create something that will help both qualitatively and quantitatively. So in terms qualitative, how can we give this injection once every 3 or 6 months, it can be a very infrequent med? You forget that disease in between and don't take tablets every day? And can we have a significant impact on blood pressure? The Phase I results were, we think, really quite impressive, over 90% reduction in angiotensinogen, that's the target associated with more than 20 millimeters of mercury drop in systolic blood pressure. And single injection can give those kinds of numbers beyond 3 months out, 6 months is really mind-boggling and exciting. So the Phase II studies have been underway for a little while now. But the 2 studies, as you said Cardio 1, which is a kind of dose ranging and regimen finding study, different doses and regimens being evaluated against placebo. That will help us figure out the dose regimen for Phase III, 375 patients in that study fully enrolled. We expect data in mid-'23. So that's coming up fast on us now. And then in addition to that Cardio 2, which looks at zilebesiran as an add-on therapy in patients with hypertension, not adequately controlled by standard of care. And so we're looking at the 3 major classes of agents. You've got your RAS access inhibitors, so ACEs and ARBs, calcium antagonist like amlodipine and then you've got diuretics. And so how does zilebesiran behave on top of those drugs in patients with hypertension that's not well controlled. So that study is larger, about 630 patients, and we expect enrollment to complete early 2023 and top line at year-end or around there. And so between the two, we'll get a very complete picture of the safety and efficacy in large numbers of patients, both the monotherapy, but also in combination with other drugs, most importantly RAS access inhibitors. And so that rather complete picture really gives us a great springboard to go into Phase III.

And do you think -- and obviously, you're testing this with several of the commonly used antihypertensives. But do you think given the mechanism of this drug with respect to the RAS and angiotensin system that the efficacy, let's say, in patients who are on ARBs or ARB resistant, would that be most interesting to look at? What would you expect to see maybe out of that kind of subsegment?

If I got to your question, right, Leland, let me just reiterate. Are you saying that do we expect to see efficacy in combination with ACEs and ARBs, is that what you...

Yes. I was just wondering, since that's kind of a particular case with respect to that pathway, would you expect -- could zilebesiran have a particularly good opportunity in patients who are resistant to the orals, but maybe if you hit them with a much heavier like a silencing type of growth inhibitors that actually restores the ability to show an improvement?

Yes. No, look, that's going to be one of the key questions in Cardio 2 in the Phase II study because first of all, we know that patients who -- even if they are taking their drugs, patients that take their ACE or ARB and they're kind of cornerstones of treatment don't always achieve the level of blood pressure reduction they need. So we're going to have to evaluate whether additional zilebesiran can help that, both drugs would be in the same axis, the RAS axis, but the current oral medications, whether it's ACE inhibitors or ARBs, they're acting down here at the level of the kidney essentially, what we are doing is turning the tap off at the top, right? So the angiotensinogen that feeds the whole cascade and so there's plenty of reasons to believe that the 2 might in concert give a better impact on blood pressure reduction. Now specifically, if you go back to our R&D Day presentation for December, we go a little bit into the mechanistic aspects here where when you give conventional ACEs and ARBs, you often get escape of renin and angiotensin 1 and angiotensin 2, depending on which drug you take. And that's not desirable. That's creating a countervailing effect to your intent to reduce blood pressure. And we showed that when you give zilebesiran that doesn't happen. And so one would imagine that by starving the system with the substrate, you prevent that counterregulation and it would be very interesting to see those results and whether they add up to meaningful additive effects on blood pressure in Cardio 2 Phase II study in that specific arm when we combine with the oral RAS axis inhibitors. So let's see. The data currently awaited but plenty of reasons to believe mechanistically that we should see an impact.

And thinking kind of downstream, given that hypertension is a market that even if it's not well served, it certainly has a number of therapies available, lots of generics and so forth. Even though one could perhaps use this as a product which would address a number of issues that keep people from getting benefit. In other words, you can't forget to take -- it's like you're taking a daily pill versus your RNAi, it's a very different type of picture. So you have kind of platonic control. But I guess, I'm wondering in the marketplace, given pricing pressures and payer reluctance, would you expect to see how this one kind of being first used in those types of patients who really clinically aren't able to improve by any other means? Or do you think there will be allowance for patients who don't necessarily have to have failed or become refractory to all of these drugs to get access to zilebesiran?

Yes. There are many areas of unmet need and high potential, Leland, right, where a drug like zilebesiran can help. And ultimately, we're only going to know once all is said and done, we have the Phase III data. But some segments to think about are patients that are on existing 2, 3 meds and not getting good blood pressure control, they clearly need help. There's an unmet need argument. There's a medical argument, there's a payer argument to help those individuals and one where a new powerful therapeutic like zilebesiran could be accommodated. The other area that's of great interest to KOLs as we've been wondering around it and discussing the future of zilebesiran with them, they're all intensely interested, all saying how we can help patients who are on 1 or more med, and have already demonstrated cardiovascular issues in terms of morbidity, angina, heart attack, stroke, those kinds of events. I mean those patients sadly, they're taking time off, right, but unless we can help their blood pressure control further and control their other cardiovascular risk factors that they're going to have more events. And obviously, ultimately, there could be terminal events. So these kinds of segments are where the unmet need, medical feedback says we want drugs and payers would be motivated, we think, because these patients are doing badly, despite, as you say, the availability of rather cheap oral drugs. So let's get on with the Phase III after we get the data later this year, and we'll share more about the exact positioning. But there's a lot of opportunity here and a lot of ability to do good, and we're talking about just the kinds of segments I'm talking about are tens of millions of individuals, so even if we can make a small dent in that, that's a significant contribution by our line.

We look forward to seeing the Cardio, Cardio 1 will be midyear. So it's not too far away. Very interesting earlier candidates coming forward, ALN-APP partnered with Regeneron, that's in development for neurodegenerative conditions, Alzheimer's and works upstream with amyloid beta in the CNS. Obviously, this is an area where we've seen some antibody drugs, which themselves target that protein gain approvals. I wanted to know, actually, if you could maybe highlight some of the differences here with ALN-APP versus those and any thoughts you may have on your strategy versus those other drugs?

Yes. So the APP data around the corner, we've said by midyear '23, the Phase I data, there'll be early data, a single dose. And the good news is that on top of safety, which is very important, this is our first CNS drug. The other really sort of insightful piece will come from the biomarker data and with amyloid precursor protein the target host of biomarkers that will be available to us, including APP alpha, APP beta, Abeta itself to show that we've engaged the target and that in fact RNAi can be harnessed in nervous system and knock down target very specifically. So there's the future of the APP program, but also the future of our whole CNS pipeline. We will be able to say something about that once we see the data. I think the advent of antibodies for Alzheimer's is obviously an exciting step in the recent events at Biogen. We hope to add to that and build on that because in every disease we've been in, going very proximally and getting right at the start of things as strength have the greatest impact. And by contrasting antibodies, which are kind of the tail end of what's happened where the Abeta fragment has been proteolytically processed, comes out, deposits, creates a plaque, and then you're trying to -- after all of that happened, you're trying to clean it up with the antibody. And that process of ligating the target with an antibody whether it's Fc-mediated clearance or no one really knows what's happening can lead to inflammatory events as we know called ARIA. And to what extent that then is a countervailing factor, it doesn't help you to what you're trying to do in terms of improving cognitive function, I don't know if it's well understood, what we want to do is cleanly turn off the tap in a substantial way in the production of Abeta. And what we know from a lot of work now is that APP processing within the neuron results in a host of neuropathic petuletic fragments, not just Abeta, but others as well. And we have shown data of which either you can go to our website or look at the R&D data from December showing the impact of these other APP-related fragments on neuronal function and survival. And so by going proximally we're able to impact all the intraneuronal aspects of APP processing that harm these patients and also reduce the extracellular deposition of Abeta. So this would be a, think a step-up on what the antibodies are doing, doing it more cleanly, we hope without inflammation. And in the long run, I think, could be clinically much more impactful than just sort of mopping up the floor after you've got a flood going on and getting Abeta's deposited. So we'll see. But I think the first step is to get these Phase I data out there, and we look forward to doing that by mid-year.

It could be some very important clinical proof of concept, for sure. At the same time, the drug is given intrathecally. So wondering, should we see great things come out of those initial reveals? Would there be a tactical strategy by which you could move to what would be a CNS targeted, but systemically delivered RNAi therapy?

Yes. So I mean there are 2 points there, Leland. One is that the intrathecal administration is not as much of a barrier as we might think for the following reasons, provided is done in expert hands and most neurologists can give intrathecal drugs. So it's -- although it sounds exotic, it's quite a manageable procedure in most settings. Secondly, provided it is not frequent. And so clearly, giving an intrathecal administration, I can see it's not like in your subcu and IV, which you can give relatively frequently over days or weeks kind of frequency, this would have to be less frequent, the good news is that our animal data, including the monkey data suggests that these can be once every 6 or 12 months intrathecal administration. And so that really makes the value proposition much more attractive and doable, particularly in settings like these neurodegenerative disorders, where the unmet need is so high. And just discussing Alzheimer's that despite the Biogen antibody, we know that we need more agents in this disease. Not to mention all the other disorders like Parkinson's and Huntington's and others where clearly more agents are required. Okay. So I think we feel rather optimistic. And I think another aspect of the Phase I data that we bring out is if we see knockdown that we'll also see as the durability of the knockdown. And so the viability of what I'm talking about in terms of infrequent administration intrathecally. Separately, and again, as we shared December last year, we have a lot of efforts going on in delivery now. And one of them is, in fact, to explore systemic administration for CNS delivery. So as I think we all know, there's been a holy grail in the industry, right, not just for sRNAs, but for all sorts of modalities and how we improve CNS delivery. So it's not an easy nut to crack. But we've solved quite a few delivery problems before now. And so we feel like we've got to give that a go because, clearly, if we can unleash that, then that's just wonderful for patients and physicians and really opens up lots of possibilities. So it's in the research shop right now. We'll -- we're in animals testing various approaches, but we'll keep you updated as we get data.

In the last few minutes, just to touch on 1 pipeline program of yours that's caught my attention is ALN-KHK. Just an early development for type 2 diabetes and Alnylam has global rights. Maybe just spend a moment or 2 telling us a bit about the target for this candidate?

Yes. Ketohexokinase is a target expressed in the liver and the gut for the metabolism of fructose and one of the things that people will be familiar with is, if you read the label on the side of pretty much anything we eat or drink now, you get to a supermarket, you'll see fructose in there. And fructose increasingly, I think, people believe is the ultimate evil in terms of allowing massive empty calories to be accumulated in our bodies. And those calories all go via the gut to the liver, and then turn via the ketohexokinase pathway into fat basically. So you accumulate fat in the liver and predisposes to fatty liver. And you also create a liver that is now profoundly pro diabetic. It is metabolic profiling. So these individuals are very predisposed to type 2 diabetes. So this phenotype of hyperglycemia or diabetes and somewhat fatty liver is extremely common and largely driven by fructose in our diets, not just in the U.S., but around the world. And so here's an agent that by stopping the pathway right at the top in the hepatocyte prevents the entry and metabolism of fructose from the diet. And we know from hereditary fructose urea, which is an inherited disorder, which is relatively benign, where people are missing this enzyme ketohexokinase that they just pee the fructose out. So we think that this is a way to prevent the excess exposure of the liver to this highly effectively toxic substance fructose and just getting rid of it in the urine and in doing so helping with the metabolic aspects in the liver, being an antidiabetic compound, and also reducing fat accumulation in the liver, certainly we have a wealth of animal data suggesting that would be the case. Phase I study is underway. The first part, which we'll report out later this year, is just to kind of show the target engagement. And then we will go on after that to do work in the diabetic population itself and explore how much of an antidiabetic effect we can have once we have the dosing regimen figured out.

Terrific. Well, a number of other candidates that are interesting at Alnylam, I wish we had more time, but I think we're right up at the end of the session here. So actually, thanks so much for the discussion, and thanks, everyone, for zooming in, and wish everyone enjoys the rest of the Oppenheimer Conference. Thanks.

Thanks, Leland. Thanks for the conversation. Cheers, Leland.

Take care. Bye-bye.

Bye-bye.