Ionis Pharmaceuticals, Inc. (IONS) Earnings Call Transcript & Summary

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Great. Well, thanks, everyone, for joining our Global Healthcare Conference here at Wells Fargo. We're sorry about the late start, but worth the wait. We've got Ionis Pharmaceuticals and their CEO, Dr. Brett Monia, on the line. He's joined by Beth Hougen, their CFO. And we have a bit of a shortened time frame. So we're going to do a little bit of a lightning round and maybe focus on the most relevant parts.

But, Brett, I guess maybe one question just to start it off is you've been one of the leaders in RNA therapeutics. And what we've seen is an evolution of the chemistry and an evolution of the pipeline and an evolution of the business model. And so maybe if we could go through each one of those and give a bit of a snapshot and what's changed over time. And starting with the pipeline. And as you look at the pipeline today at Ionis and the evolution you've seen in your chemistries and things like the LICA conjugation, maybe you could describe that in terms of how that chemistry's evolved and what advantages that gives you.

Sure, Jim. Very good questions, and thanks for the invitation to participate today. So starting with the pipeline as you asked about. So the pipeline has evolved tremendously over the 3 decades we've been at this as has our company, as has Ionis. I mean this is a technology that we pioneered, we created and we validated. And along the way, we've made many breakthroughs in advancing the technology that has led to drugs in our pipeline and on market with improved profile, improved profiles, efficacy-wise, safety-wise, tolerability-wise, time and time again over many years. This includes not just chemistry, but also new routes of delivery. And maybe I'll just start with routes of delivery, which is areas that we pioneered with all of the nucleotides as well. Starting with targeting the liver. We were really the first to show that the liver was sensitive to RNA-targeted therapeutics with antisense, and then other platforms came along. And then the LICA platform that you referred to just a few -- just a bit ago is a real breakthrough for the technology because instead of having to use doses, for example, liver LICA if we're targeting the liver in the range of 300 to 500 milligrams per week or so, LICA now allows us to go to very low doses on the orders of tens of milligrams once a month or even less frequent. If we wanted to do quarterly, we can do quarterly with LICA chemistries for the liver as well. And what this does is, obviously, the convenience for patients. But more than that, the potency that these LICA chemistries bring is very impressive, very high -- very low doses, as I mentioned, which brings with it a very impressive efficacy and tolerability profile because you're just minimizing drug exposure. You're also delivering the drug, the payload to the cells that matter most. You're reducing the exposure to around the body to other cell types and systems. So today, we have 15 drugs on -- in clinical development using our liver LICA strategy. And all of them have shown a reproducible profile, efficacy, potency, safety, tolerability, which is pristine. And many of these LICA drugs are now in Phase III, in the very final stages of clinical development for rare and broad diseases. The other big aspect that has really led to the evolution of the pipeline is new routes of delivery. That includes intravitreal delivery and so on. But really, the real breakthrough over the last few years has been in delivering our drugs directly to the CNS by intrathecal. And I believe that this has led to the premier platform for neurodegenerative diseases with many drugs for broad indications like Alzheimer's and rare indications like SPINRAZA, which is a blockbuster medicine on the market today. And even oral delivery, which we could touch on later. So the pipeline has evolved as we have developed these new ways of optimizing our chemistry and also optimizing routes of delivery. Regarding the technology, I've already kind of touched on it. Using these technological breakthroughs with new routes of delivery and these new chemistries and so on, it has really led to an evolution of the pipeline and real breakthroughs in the profile of these medicines for rare and very, very large indications, which where tolerability absolutely is -- good tolerability profile is absolutely required. So the technology continues to advance, and it continues to advance with new LICA medicines, like focused on the liver. We're developing LICAs for pancreas, where we've made some real breakthroughs; for muscle, including cardiac heart -- cardiac muscle cells; as well as skeletal muscle, where we're making great advances; and also in other organ systems and cell types too, which all are showing the same profile as liver LICA. So these 2 are expected to be real breakthroughs. And regarding the business, as we announced a little over a week ago, we reacquired Akcea recently. Akcea, it was our commercial affiliate. And this is a reflection of the evolution of Ionis and our business strategy. I would not refer to this as a pivot or a change in business direction. It really is an evolution, Jim, in what we are -- what we're accomplishing here at Ionis. We created Akcea 4 or 5 years ago or so at a time when we were a different company, we were at a different stage in the development of our technology. And at that time, we were still proving an asset technology. That was what our focus was here, R&D focused on scientific innovation, building this technology and proving it. At that time, we created Akcea to build commercial capabilities for certain drugs in our rare disease pipeline. And they did -- and they made many accomplishments. They build the infrastructure. They build tremendous commercial capabilities that we are impressed with while we prove the technology. And now with blockbusters like SPINRAZA and 40 drugs in development and many drugs in late-stage development and plans to reach -- many drugs to reach commercialization over the next several years, it's time to now take the next step in our evolution, and that includes building the commercial strategy now as the next component in our evolution. And the reacquisition of Akcea and their commercial capabilities is a key step in that evolution to build our next stage of commercialization. So I wouldn't call it -- I wouldn't refer -- think of this as a pivot, but it's more of an evolution in the strategy for Ionis.

So Brett, as you've moved -- as you brought your commercial affiliate, Akcea, back in-house, how do you think about the capabilities that, that organization has? And what products in your pipeline lend themselves best to feeding into that commercial infrastructure?

So obviously, the commercial capabilities that Akcea has built over the years is complementary to Ionis' capabilities. We haven't built our commercial capability. We really just started refocusing on this last year and start -- as we saw the successes we were having with the technology, we are [ starting ] now looking towards commercialization. We started to build those capabilities. And as I mentioned, Akcea, what they have built complements what we have done on the R&D side with the company. So there's real synergies there. There's real complementary capabilities and talent on both sides that we now are going to pull together and synergize with. We're in a very luxurious position of having a rich pipeline of drugs to decide on what to focus on for our own commercial strategies with utilizing next tier talent and capabilities. The Ionis-owned pipeline is a key focus for us today. It's a pipeline of more than 10 drugs in that pipeline now, and it's expected to expand rapidly. We are -- we have the ability to focus on -- to decide on which ones are best for us to keep, commercialize and which ones to partner in a strategic manner. What we will do for all these drugs, for all the drugs in our pipeline is to decide on what's the best plan for -- what's the best commercialization strategy to maximize the value to our shareholders and for our patients. With that said, I think it's pretty clear that for our commercial strategy going forward, we will focus on rare disease drugs. And we will identify opportunities that create synergies, single call points or common call points for commercialization. One area is, as an example, is the rare disease, neurological -- neurodegenerative disease pipeline that we're creating. We have drugs that are Ionis-owned for many different types of neurological diseases where there's large unmet medical needs, such as prion disease and Alexander's disease and ALS and many, many more coming. Obviously, there are synergies in focusing in a therapeutic area when you're building a commercial organization. And certainly, that is a high priority for us. But even in the cardiometabolic space, I see lots of synergies developing within the Ionis-owned pipeline that we'll take advantage of. And we're prioritizing which ones we're going to keep and commercialize ourselves now and then which ones we will partner at the right time. But certainly, I would pay close attention to the neurological disease frankly.

So Brett, you've mentioned Lafora, prion disease, Alexander's disease. In aggregate, could you talk about that opportunity? And what's the time lines for those programs moving into the clinic?

The -- those programs are the leading programs in our neurological disease, Ionis-owned pipeline. What all 3 of those have in common is that they represent very significant unmet medical needs for patients suffering from those diseases. Prion is particularly interesting in which there are both genetic forms of prion disease, and there are what they call sporadic forms of prion disease. Regardless if it's genetic or sporadic, they have one common outcome, and that's untimely death. And a process that leads to that is very disturbing, and there's no treatment options for this disease. We're pursuing -- and we have developed a drug for prion disease That has shown remarkable efficacy in not only preventing but also reversing symptoms in animal models of prion disease. We're developing this drug for both symptomatic patients, and also we have an eye on presymptomatic patients. We can identify those patients either through genetics or otherwise through biomarkers that we can predict will develop prion disease. We believe that we have a very, very attractive strategy here for a very -- fairly large segment of patients suffering from this disease. Lafora is an ultra-rare disease that results in -- that causes neurological disease and premature death due to accumulation of glycogen in the brain. And Alexander's is a severe seizure-related disease that causes premature death in teens and children. So what these diseases have in common are there's no treatments for these patients. And the drugs we're developing have transformed qualities associated with them. We're expecting to start -- all 3 of these drugs are expected to be in clinical trials early next year. We may even get to starting 1 or 2 of them this year.

And so with -- staying with that focus of neuro disease, 2 areas of interest for investors has been partnered programs, tominersen in Huntington's and tofersen in ALS with Biogen on the ALS side and Huntington's with Roche. Based on -- you guys have done a lot of the work in developing these molecules. And based on what you've seen in the performance of the molecules, you're understanding the biology of the disease. What should we expect for those programs going into 2021, both on the Huntington side and the ALS side?