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

Hi, everyone. My name is Maurice Raycroft, and I'm one of the Biotech Analysts at Jefferies. It's with great pleasure that I'd like to welcome the Alnylam management team. We've got Yvonne Greenstreet, the CEO; and Tolga Tanguler, the Chief Commercial Officer. Thanks so much for joining us today. And maybe to start off, it's been an exciting launch for you guys in the cardiomyopathy space. Maybe for those who are new to the story, if you can give a brief intro to Alnylam and talk about the launch so far.

Yes. I delighted to and really pleased to be here at Jefferies. I think it's becoming kind of an incredibly important meeting on the calendar. So delighted to be here. So, Alnylam, the leading RNAi company based on Nobel Prize-winning science, and we have been able really to build an extraordinary company over the last couple of decades, with respect to bringing forward 6 marketed products in a fairly short clip and build a very exciting clinical pipeline of over 20 programs and then all underpinned by what we believe is a very productive innovation engine that's going to continue to deliver new medicines actually for decades to come. And as we think about the company going forward, there are really 3 areas that we are absolutely focused on. The first is achieving TTR leadership. We'll talk about it more, but we've had a terrific start to the AMVUTTRA cardiomyopathy launch, and that really is just the beginning. We believe that we'll be able to achieve leadership with respect to TTR over the coming years by bringing forward a medicine AMVUTTRA that we believe has the potential to be standard of care and then following that up with the next-generation program, which is called Nucresiran, which really provides us durability for this TTR franchise out until the 2040. So really establishing a leadership position in TTR, point number one. Point number two is the opportunity that we have to grow through innovation. Built off the pipeline that we currently have, which has, we believe, the potential for 3 or 4 blockbuster transformative medicines that we're moving forward as expeditiously as possible to patients and an outsized probability of success from our R&D engine. And the third aspect that we've been focused on has been around our financial performance, growing revenues, but also building a pathway to becoming profitable as a company through really disciplined capital allocation, carefully prioritizing our pipeline and making sure that we're building a company that has all the foundations to continue to grow for decades to come.

Got it. That's a great intro. And 5 years ago, you set up the P5x25 goal and have achieved that as envisioned. What comes next for Alnylam over the next 5 years? And what are your top priorities?

I just want to say a few things about the P5x25 goals because setting goals has been an incredibly important part of Alnylam and who we are. Every 5 years, we really focus on what we believe that the company could achieve for the subsequent 5 years. And we've done this for 3 times now. And each time we've either met or exceeded the very audacious goals that we set for ourselves. And the reason why we do this, it's really important is actually it aligns the whole company, it focuses the whole company. It gives us a very clear pathway to what we're trying to do together. And I think by going out there and committing that to investors, I think also just strengthens the commitment that we have to achieving these goals. So pleased to say we really are on the cusp of delivering what we call the P5x25 goals, which refer to number of patients on RNAi therapeutics, the number of products that we have on the market, the size of our pipeline, our revenue performance and importantly, a commitment to achieving sustainable non-GAAP profitability within the period. And we really are literally on the cusp of being able to declare victory. So I couldn't be more excited about what we've been able to achieve together over the last 5 years. And it's now time to start to think about what might be around the corner. So I'm not going to say too much on that at this point in time, but we will commit to being able to deliver an exciting set of objectives for the company that will serve the needs of patients across a range of diseases, but we will also commit to value creation for investors. So we're very excited about what's to come. And I just want to finish by saying, in my mind, that's actually one of the most exciting things about Alnylam. Yes, we've had an incredible trajectory over the last couple of years, but we really are in the very early innings of what RNAi therapeutics can deliver to patients. And as I look forward to the future, really the best is yet to come.

Got it. It makes sense. And for those goals, we'll probably learn more at the beginning of next year. Is that fair to...

Yes, we will probably have something to declare, and I hope you'll stay tuned for that.

Understood. Okay. So let's dive into AMVUTTRA, in our ATTR cardiomyopathy. It's off to a great start. Are you providing any more granularity on how many patients are currently on therapy? And how sustainable is this U.S. ramp up?

So we're not really speaking to specific patient numbers at this point, but I will say the launch has gotten off to a terrific start. What we said as we were preparing for the launch that a very important first step was to unlock the opportunity for AMVUTTRA to be available in the 170 health care systems that account for about 80% of prescriptions for patients with TTR amyloidosis with cardiomyopathy. And in the first quarter of launch, that was Q2 this year, we actually more or less achieved that and achieve that more rapidly, we unlock that opportunity more rapidly than we had believed possible. And essentially, that allowed us to raise guidance kind of at Q2 because essentially we brought forward the revenues for the subsequent part of the year. So that was a really good start to the launch. And in the last quarter, we are really pleased to have actually doubled patient volume demand. And I think that's a substantial achievement that we're very proud of, thanks to the very good work that Tolga and his team are doing. And we've been able to grow the business, therefore, not just expanding the number of health care systems that we work with, but actually deepening the opportunity for patients to be prescribed AMVUTTRA in these health care systems. And I think that speaks to a couple of things. I think, one, it speaks to the strength of the profile that we have developed for AMVUTTRA with HELIOS B. I think it also speaks to the fact that we haven't really had any access barriers to patients receiving AMVUTTRA. Patient affordability is good with a large number of patients having 0 out-of-pocket costs. So we really have set up, I think, a tremendous foundation for the AMVUTTRA launch. And really, I think what we're seeing is just continued momentum with broad and balanced utilization prescriptions coming from both academic centers, community centers, physicians that have prescribed AMVUTTRA historically, but also physicians that are prescribing for the first time. So I think really good signals as we think about building this durable TTR business over the subsequent years. Tolga, anything else you want to add?

No. I mean the only point -- really nicely covered. Look, I mean, if you take a quick step back, the fundamentals are all there, right? If you think about it, this is a devastating disease. It's very fast progressing. So doctors really want to do something about it. And if you lose the cardiac function, you never take it back. So there is a sense of urgency in treatment. And yet, it's still underdiagnosed. So when you look at the category growth, the category growth is really accelerating as soon as newcomers come into play. And last but not least is exactly what you alluded to, it's execution. In execution, we looked at how we want to be able to make sure that the access is there. And remember, this is a category where we like to call, we had a running start. We've obviously had a good track record on Polyneuropathy. We understood the category, but we had to expand and we had to approach it differently. That's where the whole access to these centers was very important. And that's, I think, was one of the reasons why we've done so well in our first launch quarter. But in the second quarter, as Yvonne indicated, the what I see is a very healthy uptake. So this balanced and broad patient uptake suggests to us that this kind of growth is very sustainable.

Got it.

And obviously, this allowed us to increase guidance again after Q3, which we were pleased to be able to do. And I think, again, underscores the momentum that we believe we have around this launch.

Got it. Okay. All helpful. And for the types of patients you're getting on therapy, maybe talk about the naive patients that are going on drug versus second-line patient, progressors and how that could evolve over time?

No, look, I think what we're really pleased about actually and Tolga touched on this, is a broad and balanced utilization across all patient segments. I mean, our focus from the very beginning was to make sure that we're able to establish AMVUTTRA as a first-line therapy for patients because we believe as a progressive and devastating disease, it's really important to start to have -- physicians have the opportunity to start AMVUTTRA in patients as first line. And given the very strong data from HELIOS-B, we have a profile that we think is resonating physicians. And we're certainly earning a very healthy share of the first-line opportunity. And we also have another source of growth, which is the second-line opportunity. So, patients that are progressing on stabilizers that need an alternative therapy. And I think it makes perfect sense to us that in that scenario, and it's about 50% of patients that progress despite treatment with available therapies that many physicians, most physicians are probably going to reach for AMVUTTRA as an orthogonal mechanism of action to provide benefits to those patients as second-line. So really pleased with our position across both first-line and second-line. And our focus remains making sure that physicians understand the benefits. So what we find is that more physicians understand the details of HELIOS-B study, which is a very rich study, the more compelled they are to prescribe AMVUTTRA first-line. So we couldn't be more pleased with the mix of business that we're getting.

Got it. And for the types of patients, are you getting information from the real-world launch, I guess, on a regular basis, informing you about these frontline versus second-line and then also mixed patients as well.

Do you want to speak to that?

Yes. I mean Look, first of all, as Yvonne indicated, when I look at the first-line patients after a short 6-month period, we're already inching ahead as the second most preferred option. And as Yvonne indicated, given that our orthogonal mechanism of action, we're clearly the right address in terms of second line. We're really not even competing there. We're getting the lion's share. When you look at the type of patients we have, and that's also, again, very encouraging. You're getting some early patients. You're getting patients that are maybe diagnosed in the later stages of their disease. When I look at the community centers, we're getting a lot of those. There was a lot of debate whether those patients will actually have the sort of the Part B patients that are they going to be able to come in, outside of the centers of excellence. We're absolutely seeing that. So that's why I think we keep referring back to broad and balance because that's how you want to be able to sustain the level of growth. We're not actually seeing a one specific type of patient or one specific type of doctor that are preferring our drug over others. We're seeing this nice rise of broad range of patients coming into treatment.

And one of the questions we get more is like are we seeing much in the way of combination use. And I think we're seeing a little combination use. But I think as we said over a year ago that probably the combination opportunity would not really truly open up until their generic stabilizers available just given the cost of administering 2 medicines at the same time. And we feel really well positioned for that in the future because with the HELIOS-B data, demonstrated additive efficacy on top of tafamidis. And so when tafamidis goes off patent, which we believe is going to be in the 2028 time frame, we do believe that the obvious kind of combination is going to be with a generic TAF and with AMVUTTRA. So we're well situated for that scenario as and when it arises.

Got it. you think that could get pulled forward a little bit, the combo use just with what you're seeing...

We're seeing a little modest, I'd say, modest combo use, modest combo use.

Got it. And maybe jumping ahead a little bit, but the AstraZeneca, Ionis study that's reading out second half of next year, what could potential impact of that study be if they show stat benefit on top of stabilizers?

I mean, look, that's a good study, and I'm glad there's more data that's going to be generated on this. As Yvonne alluded to, if you look at the HELIOS-B data, you have already have background, starting 40% in the baseline and over 50% in the -- at the end of the trial that already demonstrated that stabilizers were leaving efficacy on the table. And when we communicate this and discuss this data set with the physicians, they actually appreciate this and they understand that this is more or less of a class effect. Now I think what we see is given that their size and our HELIOS-B trial was never really powered to actually demonstrate a significance of p-value. So what we anticipate coming out of the eplontersen study is probably you're going to see a little more tighter results in terms of the confidence interval. But at the end of the day, magnitude effect, there's no reason why we should see any real differentiator. And that's actually what the KOL community also sees. And if you look at sort of how we've been actually competing in our polyneuropathy One could argue that, look, I mean, we have maintained 70% of new patient share and the category continues to grow. So I think given that the diagnosis rates continue to grow, I think this is going to be a good addition in terms of the armamentarium for the physicians to have another option, but we believe we're going to be able to maintain our leadership, which obviously we've had 18 to 24 months head start in terms of CM data.

I think that head start is really important. I think there are also some aspects of differentiation, which we believe that patients -- physicians will understand over time in terms of kind of rapid the regimen, AMVUTTRA given quarterly, et cetera. So we think that we'll be able to maintain this momentum. And importantly, in a rapidly growing kind of category, where it's probably more about voices, more voices coming to the table to educate physicians in order that patients can be able to be diagnosed more quickly and more often.

And I think one of the things we're trying to also make sure we're establishing the differentiation is by generating a lot of real-world evidence. So you've seen at AHA, we've had some really exciting data that we generated that actually shows signals of reversal. We have shown a GI data, which we thought actually was helpful, but we saw incredible traction with the physicians, how excited they were because essentially it impacts quality of life. So a lot of this data that we're generating through outcomes is going to be really important as we continue to differentiate the product.

Got it. And you mentioned under diagnosis earlier in a lot of rare disease type situations, companies talk about underdiagnosis, but I think it's a major issue here that doctors are focused on trying to -- and I guess, where do you see some of the improvements in diagnosis rates going and some inflection points?

So I think it's a really important question because we know that the sooner patients are diagnosed and they get treated, the better outcomes they have. So clearly, it's very important for patients that diagnosis rates continue to increase. I mean, as we think about this market, what we've said historically is that there are probably about 300,000 patients around the world with TTR with cardiomyopathy, probably about 150,000 in the U.S., but only 20% of those patients are diagnosed. We do see real opportunity though for continued acceleration of diagnosis, given it's become so much easier for physicians to diagnose this disease with the ready availability of scintigraphy at low cost. We see diagnosis just continue to grow over time. So I think this is a market that we don't think is a flash in the pan that's going to grow for kind of 1 or 2 years and then peter out. We really see this as an opportunity to be able to continue to educate physicians, get more and more patients diagnosed and more and more patients treated. So this is a market that's going to grow for years to come. That's why actually our second-generation opportunity is so important. Maybe we'll come back to that later.

Yes. Yes. We will -- maybe just one other question just about the academic centers being familiar with the buy-and-bill strategy and community centers, maybe less so. Maybe just talk about the rollout there and...

Yes. No. I mean, I think, again, this is one of the sort of exciting insights that we were able to capture, especially in the second quarter of the launch. We're actually getting great traction in community centers. It's -- more than half our business is coming from those community centers because they are well equipped, frankly, to be able to do buy-and-bill. And they are seeing -- even their satellite centers of these academic centers are embracing this. So we really have not seen any challenges. Now in those centers that they may not have the buy-and-bill capability, we actually establish what we call these alternative side of care. Essentially, these are infusion centers across the United States. We've had contracted over 2,000 of them, which essentially puts about 90% of our patient population within 10 miles of distance so that they can have access to. And we've actually gained great success through that.

Got it. Okay. And also briefly, I just wanted to ask on EU reimbursement. I'm wondering just what the status update is there on pricing, even though you've already got established network for polyneuropathy.

Yes. I mean, look, we've established ourselves quite well in Europe with -- we were -- just to remind everyone, we were -- we have been competing with tafamidis in polyneuropathy, and we had upwards of 90% market share in that particular indication. Obviously, with the new indication, it opens up a new round of negotiations -- and Germany is a soft launch where we're still negotiating our final pricing, and we would see the uptake after that negotiations are concluded. Now in Japan, we actually have already concluded that negotiation. And when I look at the -- some of the analogs, it's actually one of the best launches in the Japan market in this type of category where you see a rare specialty category. So uptake is already happening. And the rest of Europe and Germany, you would see more of a mid- to late '26 story, and we'll obviously update that accordingly.

Do you see what the price is in Japan?

No. But obviously, we've been able to -- look, a lot of considerations taken into account, including the larger volume of CM, that's going to -- this whole volume price dynamic, we have to watch out for that. So you're probably not going to see a direct impact of the ex U.S. markets contribution to our markets rapidly, but we actually don't anticipate a significant slowdown because we think we can manage the volume accordingly, when we are managing the price.

Got it. Okay. And let's talk about Nucresiran.

That's really exciting.

Next-gen drug. You're in 2 Phase III studies. Maybe provide a status update on that.

I mean we couldn't be more excited about the opportunity that Nucresiran is going to provide to patients. Think about a medicine like AMVUTTRA, which has got a terrific profile. You get TTR knockdown of around about 85%. With Nucresiran, we're looking at kind of upwards of 95%. And we feel that increased knockdown actually has benefits to patients that will probably play through into improved outcomes for patients. We've seen that in our polyneuropathy studies. We've seen that in other amyloidotic conditions. So the hypothesis here is that with this better knockdown, okay, we're going to achieve better outcomes, and it's going to be in a regimen that's not 4 times a year, but it's twice a year. And it's also going to be free of the royalties due to Sanofi Genzyme. So we think there's a lot of reasons to be excited for Nucresiran from a patient perspective, but also from a corporate profile perspective over time. We're delighted that we've kicked those studies off. So we've got 2 studies, one is called TRITON cardiomyopathy. That's an outcome study because we really believe that if we're going to bring the next generation of opportunity to patients that we need to deliver outcomes, that obviously takes a little bit of time. It's an event-driven study, in about 11,000 patients. So it's a large -- sorry, 1,200 sorry. So it's a large study. It's about twice the size of HELIOS-B, but we'll be able to come to market with a compelling profile. We're thinking roughly in the 2030 time frame. Enrollment is going very well because obviously, we have a really strong track record in executing on TTR studies. So that's TRITON-CM. And then we've also imminently kicking off TRITON-PN, which is our polyneuropathy study, and that's got a creative study design, really borrowing from the learnings of study that we earlier did with HELIOS-A and this is a fast-to-market strategy where we're looking at a much smaller study and being able to bring this to patients in the 2028 time frame. So both those 2 studies, we're really excited about them and moving forward as we can.

Yes. Okay. And we haven't talked a lot about the rest of your pipeline, which you've got a lot going on there. Maybe a couple of quick questions for Huntington's disease. There's a lot of interest there. Maybe just provide a status update on what time lines could look like.

Yes. So if I think about our kind of clinical pipeline, I mean, just to say that we've got what we believe are a number of blockbuster opportunities that will bring transformative medicines to patients. We've got Zilebesiran for hypertension. We've got a raft of CNS programs, Mivelsiran for cerebral amyloid angiopathy and Alzheimer's and then a very interesting program that if you have time, it's worth taking a look at, which is ALN-6400, which we are positioning as a universal hemostatic agent with really strong genetics behind it and could actually be a pipeline and a product, if you like, if we think about the numbers of bleeding disorders that we could go after. But really to come back to Huntington's, we couldn't be more excited because this is a devastating condition. It's -- the unmet needs probably surpass kind of many other diseases that we can imagine. And we have in our hands what we believe is a program that could really impact the course of -- for these patients. It's got a mechanism that knocks down the full-length Huntington protein, but also the exon 1 fragment. We think that's differentiating. We've been able to deliver deep and broad distribution in the brain. And importantly, the safety and tolerability is encouraging thus far with what we've seen with our C16 platform. And it's likely to be administered just a couple of times a year intrathecally. So we kicked off the Phase I study, and we're really looking forward to be able to bring that forward as quickly as we can.

Got it. We're excited to see data from that. So we're out of time. Maybe in closing, if you -- we're going to get your goals probably beginning of next year, our guess, but maybe highlight the key catalysts ahead investors should be focused on.

Yes, we've talked about Huntington's. I think that's something that you should actually really be focused on watching the program, the progress there. We'll be updating data from our Alzheimer study in due course. But really, I mean, the message that I want to leave this audience with is that we have rapidly growing AMVUTTRA revenues, which requires us with the opportunity to continue to invest in this very rich and high-yielding clinical pipeline as well as continue to move forward INDs on an ongoing basis as we access all the major tissues in terms of delivery of our siRNA. So a really exciting kind of year ahead, and you'll hear more about it as we get into '26.

Sounds good. Thanks, Yvonne. Thanks, Tolga. Thank you for joining us.