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

All right. Thanks, everybody. Super happy to be here doing a panel with 2 executives from Alnylam, Pushkal Garg, Chief Medical Officer; and Jeff Poulton, Chief Financial Officer. I'm going to have maybe each of these guys just kind of quickly chime in and give a quick snapshot of Alnylam on the pipeline side and then the financial side briefly, and then we will get into, as Pushkal said, the root canal on HELIOS-B. So let's do it. Thank you.

Well, Paul, thanks for having us here today. Really excited to be here with you and the team. Look, I think Alnylam was founded 22 years ago or so. And we couldn't be prouder of the progress we've made. We've basically developed a whole new class of medicines with 5 marketed products that are treating thousands and thousands of patients around the world. And we think we're still in the early innings of what we can do as a company. We're now going on the R&D side into new tissues. We've just gotten proof of concept in the CNS, and our research colleagues are working on accessing other tissues as well where we can extend the benefits of tonic control of disease-causing proteins through RNA interference. And we have a really rich pipeline of medicines, both for TTR amyloidosis as we'll talk about, but for hypertension, for CA cerebral amyloid angiopathy, Alzheimer's disease, type-2 diabetes. So we have a lot that's going on that we're really excited about. I'm sure we'll talk more about all of that in the next few minutes.

I'm Jeff Poulton. I'm the CFO. I'd say financially, the thing that we're really focused on at the company is transitioning the company to profitability. We put out goals at the start of 2021 that were 5-year goals called P5x25. 2 of the goals were financially oriented. First was around top line growth expected across the period of 40% CAGR at a minimum is what we had committed to and then transitioning the company to non-GAAP profitability in that window, which is essentially operating cash flow breakeven, and we think the balance sheet that we've got gets us to sustainability.

Excellent. All right. HELIOS-B. Let's look at it from every angle. We have 27 minutes. So what do you think the bar is from a regulatory and commercial perspective at this point?

Yes. Look, HELIOS-B is -- this trial that's designed to deliver cardiovascular outcomes benefit for AMVUTTRA, and that's really what we think the bar is. We want to bring forward a medicine that shows an improvement in mortality and CV hospitalizations. That's the primary endpoint of the study. And we think it's well designed and executed to deliver on that. And I think there are several aspects that I would draw attention to, Paul, in that regard. One is what we understand about this class of medicines in general for this disease and the biology, right? So you can start with ATTR polyneuropathy or hATTR polyneuropathy where ONPATTRO and AMVUTTRA are both approved already. And if you look at the profile that we understand about what silencing TTR upstream does, it halts or stabilizes the disease. And that's a really remarkable profile. And Jeff can talk more about the growth in that opportunity. But what we're seeing is something quite remarkable there. In cardiomyopathy we have the results from the APOLLO-B study, and while that didn't result in an FDA approval, what it does show is that silencing TTR in this disease has beneficial effects on pretty much every aspect of the cardiac disease that we measured in that short study, right? That was a 360-person study that was out for 12 months. We saw benefits on functional ability on quality of life, on cardiac biomarkers like NT-proBNP and troponin. We saw benefits in echocardiographic parameters. We saw evidence of potential amyloid regression from the heart with technetium scanning, and we saw encouraging trends on outcomes. So all of that in that short small study bodes really well for HELIOS-B, so then if we talk to HELIOS-B -- and what we're seeing actually is at 2 years in that study, we saw stabilization on 6-minute walk test in KCCQ, which while there's no head-to-head studies, I've never seen data like that emerge in this disease. So I think it's quite remarkable, the profile that's emerging there that could suggest a quite differentiated profile from other agents. And then you look at HELIOS-B, that was a study that was conservatively powered. And I think there's a number of tailwinds there as well. We overenrolled by 10%. Two, we had powered it actually assuming a somewhat conservative effect on top of tafamidis that was sort of built into our powering assumptions. And we wound up actually and planning for 50% of patients on tafamidis, we wound up south of that. And we've said prior that our drop in rates are also favorable to the assumptions that we made in terms of powering that study. So all of those are encouraging tailwinds. And then the last thing I'd point to is the recent attribute results, different class of medicine, et cetera. But I think the key take-home there is that in the modern era where patients are being diagnosed earlier because of technetium scanning, et cetera, that placebo patients continue to decline, and that was in a 30-month study, ours is somewhat longer, but that an effective therapy can show a benefit on outcomes. And so I think all of that gives us a lot of confidence going into HELIOS-B read-out.

Okay. I think as it relates to the investment community, if HELIOS-B were a monotherapy study. I think the perceived probability of success would be 90-plus percent. But I think with the tafamidis combo component of it, it's just created a lot of kind of confusion and perceived [ inevitability ] in, well, there wasn't a 6-minute walk test effect in 12 months, I can give them the weeds and all this kind of mechanistic stuff, but how can I really be confident that the hazard ratio in that group is going to be 1.8, 0.7, 0.9, like, how do you really know? And so from your perspective, for the study to actually work, even just forget the FDA for a second, statistically, how important is it that there's actually a clinically significant benefit on top of tafamidis?

Yes. So look, the study, as I said, is really powered for the overall population in the study, right? And so that's what it's designed for. And as I said, we powered it assuming a somewhat smaller effect on top of tafamidis conservatively. There could be synergy, right? But what we powered it for was assuming a more conservative effect that it would be smaller than the monotherapy effect. And that's built into our design assumptions, right? Now in terms of some of these questions, I think, have come up in part because of some of the discussions around APOLLO-B and I think one of the things that I would really point to as a difference, Paul, is that in that study, we were bringing forward a medicine with benefits on functional outcomes and quality of life. In the context of a marketplace or a clinical environment where there was an approved drug that had an outcomes benefit. And that leads to necessary and understandable questions that are, hey, how is this drug going to be used with " the life-saving" drug that's out there? I think that's quite different when we come forward with HELIOS-B and AMVUTTRA, which at that point have demonstrated its own outcomes benefit, right? And so there I think that benefit -- that issue becomes a very different kind of issue and much less sort of immediate than what we were talking about in the context of the regulatory discussions around APOLLO-B because the end points. We can talk more about it. I think what we also foresee is that for the next several years that we do see that there's going to be -- this is a growing, growing opportunity, and the monotherapy piece is going to be a very, very important aspect of that. Because of just the pricing, et cetera, and the nature of the opportunity and the prevalence of this disease. So what we will be able to show though in this study is that we think we have ample numbers of patients in both the monotherapy and the on-taf group, as well as sufficient duration of follow-up that we'll be able to show consistency of effect across all the key subgroups, whether that's taf use or age, race, gender, severity of disease, et cetera. We have a very well designed and adequately, powered set to show that consistency of effect across all those key subgroups.

When you think about your thesis around patient selection in HELIOS-B, it's a milder population than attract. From a powering perspective, is that an advantage or a disadvantage?

Look, I think any time you're designing a clinical trial, there's a balance, right? So the balance is you need to have a population that's sick enough, that's going to accrue events in the placebo arm, right? If you're too mild, you're not. And I think BridgeBio started to help address that question, right, that actually they do accrue enough events even in the modern era where you're earlier diagnosing patients. So attribute to answered that question, I think, quite clearly. And then two, you want a population that's not so sick that they can't benefit from your therapy. And it's interesting in the ATTRACT study, actually, some of the most sizable benefits actually happened in the NYHA Class I and II patients. So we took all that into account. And I think if you look at the population and the entry criteria, we really focused on, excluding NYHA Class IV patients and excluding the sickest of the sick NYHA Class III patients in our study. So it was purposeful in that regard. And I think that, again, very -- helps us very much. And so you've seen the APOLLO-B population, I think of the HELIOS-B population is fairly similar to that because they had very similar entry criteria. So I think that will help.

One question I get regularly that I'm sure other analysts and investors kind of always are asking is, how do we compare cross-trials? And let's even just forget the demographic differences for a second because maybe that's easier to control for in subgroups, but the primary endpoint of our study is different than the primary endpoint of Bridge's study and Pfizer's study. And my answer to this, and I want to hear if you agree or not, is what I'm going to be looking at is the absolute reduction in hospitalization, the absolute reduction in death and then the Kaplan-Meier curves and the time to separation. I feel like reasonably, you can tell if a drug is more or less potent based on that comparison. Is that the right way to think about it?

I think in general, that's right. Look, I mean, you can't formally make cross-study comparisons, right? That's sort of clinical trials 101 that you can't do that. They're going to be somewhat different populations, et cetera. A lot's been made about win ratios and Anderson Gill and all this sort of stuff. I think these are all very small differences in different analytic techniques. At the end of the day, these are quite similar, and there's reasons you might pick one or the other. But these are not substantive huge difference. And to your point, I think, yes, people are going to look and see in the population, what are the benefits that are conferred by AMVUTTRA in this population, in terms of mortality, in terms of hospitalization. But I think they're also going to look at other end points as well. I think they are going to look at things like 6-minute walk test and quality of life and NT-proBNP and things like that. And again, what we're seeing that comes out of the APOLLO-B study really suggests a quite differentiated profile around that. I think people are going to look at that totality of evidence to understand how do they think about the efficacy that's being seen in that drug?

One thing that a few investors have brought up and try to kind of figure out this question of which mechanism is more or less potent in the CV population is comparing BNP data across trials because doesn't care about placebo effects or things like that, right? It's a theoretically hard measure. And when you look at BNP data across some of these CV trials, it's like the effect size is not that different. Do you agree with that? How do you think about this as a reliable biomarker that predicts an outcomes effect?

Again, I think BNP does help predict an outcome. But I think trying to look across study and nuance a 5%, 10% difference here or there or the other thing and sort of say that you've now been able to say, oh, this is going to turn out positive, and this one is going to be -- the mortality effect is going to be 25% or 28% or 32%. I don't think that's at all reliable. There's more than enough differences between the populations, the studies, the duration, et cetera, to kind of opiate all that.

So on a couple of calls this topic has come up about your primary analysis plan and how you still could change it -- the statistical plan, but maybe not going to change it. And it's like interesting, right? Because on the one hand, if you change it, right, I mean, Bridge changed theirs certainly worked after that, right? On the other hand, the idea, generally speaking of changing analysis playing close to a readout is, freaks people out, I don't even know how to like make sense of this. Like I've been asked, is it good if they change it? Is it not? What's the thought process here? What can or can't you do? And what are you actually even monitoring right now to try to figure out whether or not you should modify something?

Yes. Look, we're laser-focused on delivering this study. As I've talked about, we think that we've got a drug and a mechanism that we absolutely believe in is really a differentiated and critical way to manage this disease. And we think we have a really well-designed and executed study. But our teams are looking at external data sets as they emerge and they're reviewing internal data as it comes in. And what their opportunities as we've done in all of our other studies that has come in the industry to make tweaks to the statistical analysis plan. We might decide whether you use a parametric or nonparametric test, there may be subset analyses that are subgroup analyses that incorporate. So there are things that we can do to deliver a profile we hope that will be compelling and really optimize trial success and the emerging profile that comes out of that study. So it's those sorts of things. And again, nothing to announce, but we -- it's really just to highlight that we're really on top of it, we're looking at closely, and we'll let people know if there are any of those tweaks that are made.

Like I thought with the ATTRibute like actually changing what's in the primary endpoint. That seemed like a pretty big change, close to data. Like do you agree?

Yes. Look, I don't want to comment on what anyone else has done. I'd really focus on what we're up to and...

But is that lately -- like is that -- when we're talking about the things that you could do, is that like the kind of thing you could do? Or are you really talking about more things on the margins?

I think we're talking about things in the statistical analysis plan that we -- and again, there's nothing that sort of contemplated at the moment. It's really just to say that we're on top of the monitoring [indiscernible].

You have the flexibility. Okay. All right. Fair enough. 13 minutes of HELIOS-B questions.

What other angles can we have at this point.

I guess maybe just the last thing is when you guys announced the data, given that the primary endpoint is not win ratio, do you feel like we'll get enough data off the bat in the top line announcement to not just draw a conclusion as to whether the study was a success statistically, but also that from the Alnylam-optimistic case in silencers that you've got a very competitive drug clinically or maybe even a better drug clinically and a great outcome?

Yes. Look, so I think we haven't sort of landed on exactly what's going to be in the top line release per se. I mean, in general, we focus on the primary and secondary results and really focusing on the p-values there. We'll certainly between the top line result, and I expect that we will have presentations in very short order after that, that we'll get those data out that we know everyone interested. And we certainly are going to be committed to doing that.

Okay. Okay. Jeff, I wanted to ask you about just Alnylam and what Alnylam looks like from an investment and profitability perspective. Obviously, it's on a spectrum, right? But at a high level, in a scenario where HELIOS-B works versus in a scenario where HELIOS-B fails? And how does the company adapt in those different outcomes?

Yes, we'll start with the one that we're confident is going to be the case, which is a positive study. I think certainly, we'll be investing given the size of the opportunity. Just a reminder that we're competing in the hereditary PN part of the market today. The cardiomyopathy part of the market is probably 10x the size. It's going to be a competitive space. We certainly have commercial infrastructure in place already to support the existing business, but we'll be building on top of that to drive an optimal launch profile. In a scenario where we don't get the outcome that we're anticipating, and we'll do this work internally. I think the 2 things that the market will be most interested in hearing from us is what's the growth profile of the company look like without CM. And just a reminder, again, I just mentioned PN, we're annualizing that franchise at about $1 billion in revenue today, and about 4,000 patients on therapy today, and we think they're somewhere between 20,000 and 30,000 patients from a prevalence standpoint. So I think the market would be interested to understand what's the growth profile look like going forward, driven predominantly by PN. So that's something that we would be prepared to talk to. And then what's the time line to profitability? How has it changed as a result of not having a cardiomyopathy launch? And again, we'd be prepared to speak to that understand the importance of that. So from a strategic standpoint, I'm sure we'd be in a position to talk about what are the priorities for the company, what are the things that we're going to focus on from an investment perspective. and how might the cost structure of the organization might need to be tweaked in order for us to get to profitability and still have cash that's on the balance sheet that gets us there. So those are the things that we'd be prepared to speak to.

Yes. Yes. Okay. Makes sense. Pushkal, on the TTR side, you have a next-gen silencer drug that's going to have data, I think, by the end of this year, right?

Exactly.

Or maybe early next year, I don't know. But based on the animal data and preclinical data, right, I think the modeling tells you that this could be once annual. Do you want to talk about that?

Yes. No, absolutely. I think I'm glad you brought it up. But look, we're -- this is a space that we're heavily committed to investing in and continuing to bring innovation to patients. And so as we move from ONPATTRO to AMVUTTRA, and now AMVUTTRA, we're going to move towards developing what we call -- well currently it's called TTRsc04. And this is based off of our new IKARIA platform, which allows for potent and durable silencing potentially even once annual dosing is what we're exploring here. And so this is currently in Phase I trials, the nonhuman primate data that you're alluding to really does show the potential for deeper knockdown and potentially annual dosing and so that is one of the goals for the end of this year, and we look forward to sharing those data shortly. But our hypothesis here is that we can actually get to even deeper levels of knockdown, over 90%, with annual or perhaps biannual dosing. And we think that, that really sets us up to actually have a best-in-class profile for patients. And then I think from a business perspective, it's also exciting because this is one that does not have the same royalties to Sanofi that we have for ONPATTRO and AMVUTTRA. So I think from a top line perspective, also, there's a benefit there.

And maybe it's helpful from an IRA perspective, too. Do you want -- like when you think about the predictive validity of animal data for RNAi therapeutics, how well does that tie? And one question I've gotten about this program is, okay, it sounds interesting, but there was hope at one point that vutrisiran could be every 6 months, and that didn't play out. So should that kind of be a cautionary tale or is it separate?

No. I think that's a very separate concept. I think, look, I think animal data, if anything, the trend has been that it underpredicts what we see in the clinic in terms of both potency and durability. That's played out for our liver targets, and that's actually played out in the CNS when we talk about ALN-APP what we're seeing in the clinic is very exciting, and frankly, outstrips what we saw nonclinically. So I think that's all good. I think what happened with vutrisiran in the Q6 months is a somewhat different issue there. And it was partly because we had SCO4 coming forward and made sense to really focus our energies there. And so this is something that we're very excited about, and we'll hopefully show the data. We plan to share the data very shortly.

Okay. How do you think about -- like let's say, HELIOS-B works, how do you think about the regulatory path for this next gen? And could there be a real path based on TTR lowering?

Yes. Look, I think we're going to be looking at every angle of this, right? I think you've seen us sort of pioneer innovation in this space, for example, when we bought HELIOS-A4 and AMVUTTRA in polyneuropathy and really were able to use basically a uncontrolled clinical trial with historical data comparing to the ONPATTRO placebo. We pioneered that approach. We were able to bring that from, I think, first in human to an approval and about 3.9 years or something like that. So it was very, very fast. And we have a wealth of data coming out of APOLLO-B now, HELIOS-B, et cetera, in the CM space, patient-level data that we're going to leverage. And so I think it's early today to announce what that development path is. But certainly, we're going to be looking at, a, how do we do that most expeditiously in the most efficient way possible. recognizing, as you said, there'll be multiple therapies at that point and hopefully showing TTR lowering is a benefit. But also, what are the data that we need to generate to enable guidelines and reimbursement, et cetera, right? So we look at all those factors together.

Okay. Great. Do you want to briefly talk about the hypertension data that you just showed for KARDIA-1? And what are the key outstanding questions ahead of KARDIA-2?

Yes. Look, I mean, the zilebesiran program is an incredibly exciting program. If you look at what's been called the number -- hypertension is the #1 addressable cause of cardiovascular morbidity mortality, that's the United States and that's around the world. And there's about 70 million people with uncontrolled hypertension and high CV risk. It's a huge, huge need. And what causes that? We can't get patients to [ goal ]. There's a lot of variability in blood pressure day to day, week to week, month to month, and it's poor adherence to blood pressure medicines and all of those factors independently promote cardiovascular morbidity and mortality. So what's the solution? Well, if you had an infrequently administered blood medicine that actually tonically lowered blood pressure. And what we revealed at AHA today, we're coming out of the KARDIA-1 Phase II study was as a monotherapy, zilebesiran lowered systolic blood pressure, about 15 to 16 millimeters of mercury at the highest doses tested. And that was durable. That was at 3 months, we saw durability out to 6 months, about 14 millimeters of systolic blood pressure lowering. So it's just basically dropping the AUC on blood pressure. It's a remarkable profile, and it was very well tolerated in that study as well. So this really sets us up for -- it's meeting all of our desired attributes in terms of its profile as being an infrequently administered medicine quarterly or every 6 months that can tonically lower blood pressure is well tolerated. And I would just point out that ultimately, our goal is to reduce cardiovascular morbidity and mortality. And there's a pretty linear sort of relationship there. For a 50 -- it's a 1:2 relationship. So for every 1 millimeter of blood pressure lowering, you get about 2% reduction in morbidity and mortality, cardiovascular morbidity and mortality. So 15 millimeters of mercury, you can do the math. It's a pretty sizable impact. So KARDIA-2, we'll be reading out early next year, and that's a study looking at zilebesiran in combination with commonly used other classes of medicines, diuretics, calcium channel blockers and an angiotensin receptor blocker. That will be very important, I think, and further showing these drugs are often used in combination. And then we're going to do a study called KARDIA-3 that will start up next year, which is looking at zilebesiran with 2 or more blood pressure medicines in a high CV risk population. And that then sets us up for a cardiovascular outcomes trial that we plan to do after that to establish the benefit on cardiovascular morbidity and mortality.

As we think about KARDIA-2 and the KARDIA-1 data, you did see some low rate of hyperkalemia. And I think the historical concern with dual RAS blockade is not only a smaller effect size than monotherapy, but also renal tox, any read-through or concern there?

No. I think, look, I think anytime you're actually working in the RAS cascade, you're going to see some amount of -- I think what was really remarkable actually is what we saw was very transient -- again, this is a medicine that's got pharmacology going on for months. And what you saw were a couple of blips here and there, but actually came back down while patients continued on therapy.

So do you think it's just noise?

I think there's a certain amount of noise. There's patients have -- using other medicines, there's diet. There's all sorts of things that are going on. So I think there's really -- what's emerged was actually a very encouraging safety profile out of K1. And we'll look for the K2 data to kind of further help understand that. But I think so far, everything is very encouraging in that regard.

You guys shifted your strategy to launch after outcomes data. Is that all IRA?

Look, I think it's a couple of factors and Jeff may want to comment as well. But I think look, we're trying to bring forward a medicine and the ultimate goal is to help address -- making them care about their blood pressure, they care about reducing cardiovascular morbidity and mortality. So that's point 1. Point 2 is as we look at trying to evolve practice patterns in what is a long-established -- there's ongoing guidelines and there's treatment patterns, et cetera. I think bringing forward cardiovascular outcomes data, I think, is going to be very compelling to change...

Totally, but you -- that wasn't originally the plan though?

No, but I think it's been influenced only by those considerations, I think what we've seen with LEQVIO and how when to change practice patterns, get on guidelines, et cetera. I think the outcomes data are very important. And I think IRA is a factor, right? I think that is a consideration. And look, if those things change, then we can certainly pivot, but I think that's our current plan for all those [indiscernible]...

I mean this is a heavy Medicare population. So IRA has to be in the calculus and the calculus is launch with the best profile you can.

Right Yes. Makes sense. Okay. On CNS, when are we going to get more APP data?

Well, we just put out data, I don't know, 3 weeks ago at the CTAD conference where we showed with APP that we previously announced that we can show up to 84%, 90% reduction in soluble APP alpha and beta. What we presented this last couple of weeks ago was showing actual reductions in the fragments that are involved in CAA, cerebral amyloid angiopathy, which is the second leading cause of intracerebral hemorrhage, stroke. We saw reductions in Aß40 and there are also Aß42, which are the fragments that are found in Alzheimer's plaque. So this is really exciting. And then we also showed additional durability data with knockdown lasting out to 10 months. So I think this is all -- and a good well-tolerated safety profile. So all of that's exciting. We're going to -- we're progressing in the Phase I study with a little bit more dose exploration. We've opened up Part B, which is multiple dosing that's been approved in Canada, the U.K. and the Netherlands. So that's all moving. We're looking at Q6-month regimens in that study right now. And then we are progressing to evaluate -- to start up Phase II studies in cerebral amyloid angiopathy and ultimately Alzheimer's disease as well. So there's a lot to come.

Before those Phase II's read out, are we going to get biomarker data with longer dosing to actually be able to kind of understand the downstream effect like get some P tower or PET data in Alzheimer's patients or anything else that gets to this question as to whether knocking down APP or is or isn't too upstream?

So the -- again, we've got the data on Aß40 and Aß42. In terms of actually things that you're talking about, there is a number of rich biomarkers and as well as imaging data that are built into the Phase I study design. I think we're going to get more of that when we start to look at the multiple dosing, right? And so part B data, I think, will reveal more of that. I also want to be cautionary, right? I think in the sense that what we're still talking about is a relatively small number of patients, right? But we'll share those data as they emerge. But again, it's not going to be -- it's a modest sample size that we're doing because we're trying to get into the real patient population where we can really assess these things more comprehensively.

All right. Last question. What's the next hot Alnylam target that no one's talking about?

I'm going to put a plug in for our R&D Day on December 13, where we'll come forward, and we'll talk to you a lot more about what's in the pipeline and what we're doing in terms of new targets, but also new tissues and keep updates on some of our active development programs.

So muscle?

I think you'll hear that we're actually -- look, what's emerged is the ability with RNAi silencing to actually very tonically reduce disease-causing proteins. So we want to extend that and deliver into very -- in a variety of other tissues. We've gone into CNS. That's opened up a whole space for us. We now have programs in combination with -- in partnership with Regeneron, again SOD1, Huntington's will be moving into the clinic shortly, and there's more behind that. And our plan is to actually look at a number of other tissues and bring that same benefit to diseases in those spaces as well. So muscle is definitely one that's under active development and exploration.

Okay. Great. Thank you, guys. Appreciate it.

Thank you, Paul.

Thank, Paul.