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

All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, one of the biotech analysts here. And it's my pleasure to introduce the team from Alnylam Pharmaceuticals including Yvonne Greenstreet, CEO; and Tolga Tanguler, CCO. So just a quick reminder, format for today is a fireside chat. And before we get started, I just need to read a quick disclaimer. 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 Morgan Stanley sales representatives.

With that, Yvonne and Tolga, thanks for spending time with us today. We know you've been very busy. So we really appreciate it. And obviously, the question on people's minds is just key takeaways from the ESC meeting over the weekend, and then maybe we can start there.

Why not? Well, hello, everybody, and a real pleasure to be here and reflections on the ESC. Look, we are really excited about the data set that we've generated for [ furbitrason ] in the HELIOS-B Study. And the other wonderful thing that happened at the ESC was not only did we get a chance to present the full data to the medical community, but we also had the New England Journal of Medicine people coming out at exactly the same time. So amazing timing, we're delighted by that. Look key takeaways. I think the first thing to note is just how remarkable the data is that we've generated for fitusiran, hitting the primary endpoint, every single secondary endpoint, demonstrating really profound and unequivocal impact on patients with TTR cardiomyopathy. And that's in a patient population that has evolved over the last several years as patients have been diagnosed earlier and are highly treated with a range of background therapies, not only were around about 50% of the patients in the study on tafamidis, but they're also treated with SGLT2 inhibitors with diuretic treatments. And so for vutrisiran we have been able to deliver the magnitude of benefit that we showed in the study at the upper end of really what has been achieved in heart failure studies, 35%, 36% reduction will cause mortality is really, we believe, is a game changer. I think the other, I think, key point that came out of the study was the impact on measures that matter a lot to patients as well. So quality of life, functional status really rapid onset of effect, thanks to the mechanism of action of RNAi with a rapid knockdown leading to stabilization of the [indiscernible] preservation of function, which actually was well noted by the physicians has been very important to them when they treat their patients. And it was the consistency of the results across all the subgroups, including the tafamidis subgroup, where there was an indication of additive effects of vutrisiran on top of taf. And so when you sit back and think about what we've achieved with the study, it really is, I think, the most comprehensive data set in recent times of patients with TTR cardiomyopathy. And we believe that this sets us up really well to potentially become the next standard of care for patients with TTR cardiomyopathy. With the first-line monotherapy, it's a condition where patients progress, they -- it's a debilitating condition. It's ultimately fatal. So physicians want to treat with the best drug first and treat it earlier, I think we believe the data set that we've generated with vutrisiran we're absolutely in a strong position for vutrisiran to become first-line monotherapy. But also given the benefits we saw on top of tafamidis potential to be used as combination therapy and switch as well. So we think when we stand back, what we've been able to deliver to the field is potential for the next standard of care for the treatment of these patients.

Makes sense. Very promising data. Maybe just talk a little bit about -- you mentioned opportunity in the frontline and the be standard of care. Is there a particular data point or that maybe resonates more with physicians that sort of tells them, okay, you should use this in frontline?

I think I've covered the key data points, the magnet to affect 35%, 36% reduction in all cause mortality effects on all the important measures to patients as well as biomarkers, the consistency of the results. I think taken together, the physicians that we've spoken to many of them really do see the potential of vutrisiran as first-line monotherapy based on the efficacy data set that we've been able to deliver here.

Makes sense. I guess another thing we're all trying to figure out is sort of the differentiation maybe versus an existing competitor or a competitor that could be on the market soon. How should we think about that -- what data points should we look at?

Yes. So it's really important to note that the studies that have been done with other medicines, so tafamidis and acoramidis. We're looking at a very different patient population in HELIOS-B. We're looking at an earlier patient population, a healthier patient population. And the fact that even the backdrop of patients, as I said, so heavily treated, being able to deliver the benefits that we saw with vutrisiran really quite unusual. But the important thing to note is that given those differences in patient population, it really is not possible to make really good kind of cross-study comparisons. Having said that, I think it's important to note that we're bringing a completely new mechanism of action to patients with vutrisiran assuming regulatory approval, the [ norfobinal ] mechanisms of action. I think that's going to be very important to physicians. And I think from the data that we saw of vutrisiran on top of tafamidis really achieving a 41% reduction in all cores mortality on top of tafamidis. I think really gives 1 the insight that there's a lot of efficacy that's placed on the table with the silence, and I think it's really important that we're able to bring a new therapeutic to patients. Tolga, is there anything you want to add?

Yes. Good to see you, Mike. So I think the key point is what Yvonne highlighted, all cause mortality is going to be a key driver of differentiation and the fact that we have this contemporary patient population, obviously, is important. And to be able to demonstrate that 41% efficacy over taf, clearly, it's going to be very compelling. One of the key points, I think, that we knew is going to be important, but didn't appreciate that key appealing leaders would actually appreciate as much as we do, which is the quality of life metrics. So if you look at the totality of the data, when you look at the 6-minute walk distance test as well as the KCCQ, we are more or less stabilizing the patient. And I think Dr. Scott Solomon highlighted during the call, that's really unheard of in a heart failure study. We're very encouraged by that because also that's another key metric that you know that when Amvuttra is put on for treatment, patients starting to feel better, they're going to start functioning. They're going to be able to preserve their function. I think that's really going to be important.

Makes sense. Another area of focus for investors has just been timing of the curve separation, but I think there's some sort of issues with sort of doing that comparison. Maybe you can just describe your thoughts there.

I think an important point to note, is actually we saw very early separation of curves with respect to a number of the endpoints of quality of life, 6-minute walk test, NT-proBNP. And I think that speaks to Tolga's point that given the mechanism of action of vutrisiran rapid knockdown, patients are feeling benefits really very early on. I think that is incredibly important from a patient perspective. When you talk about time to separation of mortality, I think it's important to reflect on the patient population that we studied -- patient population, which was healthier than in some other studies. And really to see separation in curves. You need to be able to accrue a sufficient number of events early in the study to be able to achieve a separation. If we actually got a healthier population with fewer events, it will take longer for those benefits to demonstrate themselves. But what we saw in the study is absolutely what we expected and we believe it provides a very compelling overall proposition for physicians.

You also highlighted the taf combination data sort of having a very relative risk reduction on mortality. But maybe you could just -- and you alluded to it in your earlier comments, but just put that in the context of how meaningful that really is?

Well, as I said, I mean, the study wasn't kind of set up in order to -- wasn't powered in order to deliver a p-value in this regard. But nevertheless, seeing such profound trends to us was very, very impactful. And I think the numbers speak for themselves. 45% reduction in all cause mortality at 42 months, I think, is it's actually a very, very encouraging result.

Can you talk about some of the feedback you've gotten at the meeting if you presented the data and kind of what's resonating with physicians?

I think in general, the physicians that we've spoken to are incredibly excited about the data and can't wait for us to move this through the regulatory process and have this available for use, assuming positive regulatory approval. I think Tolga touched on one aspect of the data that I think really impressed not just the magnitude of the impact on mortality. But actually, the rapid and sustained benefits on parameters that are very important to patients. The quality of life and functional status and really have told us that they think this will be really important as they talk to patients about the benefits of vutrisiran that patients will be able to actually feel and experience those benefits early in the course of the disease and have measures of disease progression slow down and maintain so you actually get sort of a stabilization of function because patients are obviously interested in mortality but they're also interested in how they feel whether their disease progresses or not. And the fact that we were able to demonstrate the impacts on multiple measures of disease progression. NT-proBNP, NYHA class, et cetera. It's something that actually the physicians really focused on, I think, even more than we'd expect to going into the meeting.

Yes. I mean I think if you think about the treatment of cardiomyopathy and the key operators that treat this, they also are very familiar with polyneuropathy and [ exenatide ]. So they already had experience in the polyneuropathy with Amvuttra. In that way, when HELIOS-B results come out, it was very confirmatory to what they've been hearing, and they were very pleased. And what they were pleased about is Yvonne indicated, consistency of data, looking at the total and mono population and particularly the benefit over tafamidis is a confirmatory not for combination but why actually you don't want to leave efficacy on the table and why do you want to use it -- use this product as first line. So those were, I think they were really excited about to see that finally, there's a confirmatory evidence that it actually works well.

I think one of the aspects that impressed was the insight that it's really important for patients to be treated early in the course of the disease, exactly. And we were able to share some data where in patients that had NT-proBNP is less than 2,000. Actually, vutrisiran was able to deliver more benefits. We're talking about a 65% reduction in all-cause mortality. And I think this is a really important kind of takeaway for physicians that we need to put more effort behind diagnosis, get patients treated, get patients treated early and to allow them to have the best possible outcome. So we're very excited about being able to hopefully, assuming regulator approval will be able to start working with physicians and helping physicians underside the red flags of the disease and therefore, achieve earlier diagnosis.

Early diagnosis and early treatment is really critical just to contextualize what Yvonne highlighted is because of the disease. This disease is highly progressing. It kills as many, if not more, people compared to cancer. So when you think -- this is not one of those diseases like rheumatoid arthritis where doctors want to wait and see. They want to be able to hit early and hit hard with the right medication. And we believe this data package that we were able to provide provides that context.

I wanted to maybe follow up on one of your comments, Tolga, about just the familiarity with the program in peripheral neuropathy and now you've had some good feedback from physicians and confirmation that you work in cardiomyopathy now. Like how does that translate into the early launch potentially and maybe even if there's enough excitement already, like could it be some earlier use ahead of launch?

Yes. I'm glad you asked that question, and I'm happy to attempt some of those expectations. As you can imagine, we're still in the regulatory discussions, and we will not be promoting -- not only promoting or insinuating any off-label promotion. But just to give you some context, if a physician decides, let's say, "Oh, I wanted to treat this patient with cardiomyopathy." And if they were to send a start form to enroll in our patient support program, we would immediately actually deny that. So I think even though I'm sure doctors will look and see if there are any patients available for them, a, we will never communicate anything around the cardiomyopathy. We don't have the label we can't. And b, we will not support those patients. So I think the good growth that you've seen last quarter came before the HELIOS-B data and we'd like to be able to maintain that level of growth with polyneuropathy until the indication comes in.

Yes. Maybe just talk a little bit about the patient population. How many patients are diagnosed, what percent are on treatment and kind of where the opportunity is?

I'll start, I'm sure the Tolga will run -- I mean the other exciting aspect of this category is really just how large and rapidly growing this area is. And what's been interesting is how our understanding of the area has really improved over the last 5 to 6 years. So 80% of patients with TTR cardiomyopathy remain untreated. But the diagnosis rate has gone up significantly over the last 5 years from what about 5%, 6% to 20%. And I think what this tells us is the level of unmet medical need there is, the efforts that need to be put into helping to diagnose patients and get them treated. So I really do think it's one of the exciting growth categories in the industry going forward. So we're really excited to be able to move forward, vutrisiran assuming regulatory approval into continuing to grow this market. I think the more companies that are in the space, I think the more we'll see diagnosis rates and treatment rates go up.

Maybe just on diagnosis. As you mentioned, it's been improving. Are there other things you can do to sort of accelerate that?

Yes. I mean shall I just take that?

Yes.

Most certainly. I mean, as Yvonne indicated with tafamidis, I think in the U.S., diagnostic rates went up by tenfold, as Yvonne highlighted. Now that happened because mainly noninvasive diagnostic tools have been -- and accurate tools made available, widely available and it's inexpensive. So scintigraphy pretty much you can find the excess in every key academic centers, including other multidisciplinary centers but obviously, it doesn't stop there. We know that more competition that comes in, increase the share of voice, the more acceleration of diagnosis and treatment rates. You've seen it in multiple therapy areas. I think that will certainly help. Also, the industry has been very diligent on working with large delivery systems make sure that we have electronic medical records that includes incorporates retrospectively and prospectively, red flags. So if you are -- I mean, one of the red flags is if you have bilateral carpal tunnel syndrome or you have spinal stenosis. If those patients are actually then suspected of cardiomyopathy and it quickly go through the diagnostic procedures you start seeing that acceleration. And look, I think we're just scratching the surface. And this is, I believe, a little bit on the look, we often focus on the competition and different products that's going to be available. That's good. But this is not going to be a zero-sum game. This is going to be a growth play.

Yes. Can you maybe talk about your sort of initial launch strategy and what are kind of the key points as you kind of think about that?

I mean, look, one of the great advantages that we have that we really like sort of discussing is the fact that we have over a decade of experience in TTR and we've been fairly successful in building a good growth, sustainable growth franchise in polyneuropathy. Now polyneuropathy, obviously, is significantly smaller in terms of prevalence than cardiomyopathy. But if you look at the diagnosis and treatment flow of diseases, polyneuropathy is at the end of the diagnostic journey. If you're suspected of either cardiomyopathy, wild-type or hereditary, you first need to be suspected of the disease. You go through a scintigraphy and then you go through the genetic testing. So because of that, we've already had built significant capabilities and presence and footprint in all of these centers. Now obviously, with cardiomyopathy, it's a larger indication. We're going to scale up. In fact, we already have scaled up our organization, whether it's working with key centers or our customer-facing organization, medical affairs. This is a well-oiled machine that's working very collaboratively. And the fact that we've grown 35% year-over-year in its fifth year for a narrowly indicated product is a testament to that. So I would say that's going to be our effort to make sure that as soon as if product is approved, we would start commercializing with all these roles that we have built in a much more scaled-up version, not only in the U.S. But obviously, we're available in 36 markets across the world and another 35 markets through the distributors where we're seeking regulatory approvals.

Yes, I'd just like to underscore the robustness of the commercial engine that we've built, given our kind of 10-year now proven track record in both developing and commercializing medicines for patients with TTR amyloidosis, obviously polyneuropathy to start and now hopefully moving into cardiopathy. We'll be able to build on this foundation. And we have a good understanding of the market, the key opinion leaders, the centers that we're going to need to access. And so we feel that we are uniquely positioned actually to bring a new therapeutic opportunity to patients with cardiomyopathy.

And none of these are essentially hypothetical or theoretical, right? We have the practical experience and understanding. If you follow the patient journey, we have the right people on the treatment diagnostic journey part. And then in terms of supporting these patients in access, making sure that their patients adhere to is another important element. And again, the numbers that we have over 90% of our patients get seamless access, over 95% of our patients end up having actually continue on their treatment. These are important numbers, and we believe we can actually continue to do that with the cardiomyopathy indication.

Is anything notably different about cardiomyopathy versus peripheral neuropathy? In other words, as you're trying to bring in patients, are there other capabilities you need to build?

Clearly the size of the opportunity, and that's why we are so excited about it is that 10x-sized markets. I think that's probably the most important aspect here. But I mean, what I would say is that as we thought about building the commercial engine, it's not just the engagement with the physicians, but it's the support that we provide the patients is the access capabilities that we've been able to bring to bear is the system understanding to understand how we can orientate our organization to engage with the broader health care system in a very meaningful way. So I think the advantage of having had ONPATTRO first and then vutrisiran on the market for patients with TTR polyneuropathy is it's given us a really good understanding of the market and of the key stakeholders that we're going to need to work with going forward.

And in terms of -- I mean, obviously, the biggest difference is I would characterize polyneuropathies an ultra-rare disease, and cardiomyopathy is a rare disease. And the kind of team and the capabilities and skill sets that we built was never just about polyneuropathy. We always had our eye on the ball, which was the cardiomyopathy. So in a way, look, on one hand, we love the fact that we understand these centers and have built the right capabilities, that's great. But we also recognize and, frankly, humble about the size of the opportunity and what we need to do, and that's how we really approached our scaling.

As you scale up and prepare for the launch, I think, mid next year, first half is what you've sort of been suggesting. But just when you get to market, what are the -- who are the early adopters? Is it naive patients? Is it switches? Is it combo? And just how does that sort of evolve?

I mean, look, clearly, for the last several years, and I'm giving you some U.S. numbers given that, that's going to be the first launch market. There are thousands of patients that have been coming in as naive, thanks to all the diagnostic efforts that has been taking place. And we like to make sure that we're firmly position as a first-line standard of care therapy in the eyes of the -- in the minds of the physicians and the patients. That's clearly goal #1. We also know there's a good number of patients that are progressing on stabilizers, and physicians know that. We know that. And we need to make sure that we are actually exploring and understanding when those patients needs to be switched over to alternative therapies and obviously firmly on Amvuttra. So that's going to be the source of business. And look, there will be some patients that physicians that want to use combination. I think, obviously, we have data, and I think that's going to be compelling enough. But given some of the access dynamics in the United States, that's probably not going to be as large of an opportunity early on. But when and if tafamidis goes generic, we believe that combination opportunity will get larger.

And that's what's so tremendous about the data set that we've generated. It sets us up to be able to support patients with first-line monotherapy today. Also support patients who continue to progress on tafamidis as well as have data to support the use of combination when the payer environment facilitates that. So we think we're in a really good position today and for the future and actually even thinking beyond vutrisiran Amvuttra. You know we're developing TTRsc04, which is our next-generation opportunity for patients with TTR amyloidosis with demonstrated TTR knockdown in the mid-95% 95% also reduction. And looking at a 6 months you got an annual regimen, this is going to be another huge advance for patients. And I think, again, it's a testament of our commitment to being leaders in this field, and we're currently working on the details of what that TTRsc04 Phase III program might look like, and we have more to say on that as we get to year-end.

Yes. Maybe just to follow up on the sort of combination use, and that's kind of off in the future depending on when tafamidis goes generic, but just what's the current thinking there in terms of time frame or what's the range of time frame?

Well, I think probably the best way of thinking about this is to acknowledge what Pfizer has indicated it's going to be loss of exclusivity for tafamidis, and that's going to be 2028 in the U.S. And we've heard nothing that would persuade us otherwise at this point in time. So we're assuming that we'll see taf LOE in the U.S. in 2028. From a vutrisiran perspective, as we think about the market unfolding, actually the exact time of tafamidis LOE is not going to have a huge impact on how we think about our business. As Tolga said, in the near term, we're going to be focused on establishing vutrisiran, assuming regulatory approval as first-line monotherapy given the payer dynamics and constraints that we see will be put in place with respect to combination use. But of course, when taf becomes off-patent, it will be easier for physicians to think about potential combination use. So we think we're very well set up for the market as it looks like today, but also going forward. Tolga, anything else?

No. I mean, as you pointed out, timelines for taf genericization is not existential for us. We believe we have the right data set, the right mechanism of action, right capabilities to be able to position this product as a first line and then everything will flow through that. And some physicians want to use that, and they have the right access archetype, that's great.

Makes sense. Another question we get sometimes is just labeling and any issues with the randomized period versus the longer period? And how does that all translate into the label? Are there any issues around that?

It's a great question. I mean, we expect that with prespecified endpoints, data from those end points. should find their way into the label. That's normally how it happens. You have your primary endpoint and you have your prespecified secondary endpoints. So we expect that this data will be featured in the label, but obviously, we have a way to go through the regulatory processes before that's obviously confirmed. But what I think is really supportive with respect to our all cause mortality data is not only did we demonstrate statistical significance on all cause mortality in the study at 42 months but that was also corroborated by a strategically significant and clinically meaningful impact in the 33 to 36 months period. So I think if you sit back and think about what we've achieved with the study, I think it gets a 10 out of 10, 10 out of 10 in points, and that is a remarkable outcome for a study in heart failure.

Yes. In a contemporary patient population indeed.

Maybe another question we get sometimes is just thoughts on pricing. You mentioned obviously 10x the size. So the thought is maybe the price goes down. I don't know if you want to make any comments there? And then maybe over time, as you get a generic players, is there another opportunity to change the price? Or does that not make sense?

Look, before even commercialization is Alnylam, we laid out a clear patient access philosophy. That's on our website, you can take a look at this how we price our products, which is always based on value and unmet need and the transformational nature of our products. So that's how we set the price for polyneuropathy, and that's how we'll assess whether how we're going to price the cardiomyopathy. The other important piece is within the polyneuropathy, what you see is the affordability on a patient level. So if you look at our patient burden right now, nearly 70% of our patients pay 0 co-pay and up to 80% of our patients pay less than $2,000. We believe that makeup of the source of reimbursement will remain the same for cardiomyopathy given the demographics and the patient type that we have. So those are the two key drivers that we're going to be evaluating and establishing our price.

Got it. Maybe in the last 2 minutes here, you're going to have a couple of updates coming up SA meeting. Maybe just talk a little bit about what to expect there? And then also at Investor Day, what should we expect there?

Yes. No, we're really excited about sharing more data from HELIOS-B, what we've delivered is a really rich data set. And obviously, we're able to show a portion of that at ESC. So kind of lots more to come and we look forward to presenting additional analysis at HSA. We're also really excited about our TTR Investor Day, it will allow us to have an opportunity to dig actually into some of the questions that you've asked about how we're thinking about the market, how that's going to evolve, how we see vutrisiran being positioned assuming regulatory approval. So I think some very exciting meeting coming up with respect to TTR over the next month or 2.

Okay. Great. Why don't we end it there. Thanks so much, Yvonne and Tolga. I really appreciate your time today.

Thank you.

Thank you.