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

Good morning, everyone. Thank you for your participation in this year's 44th Annual NASDAQ Investor Conference. We would not be able to be here without your involvement. We're excited to host you and to having to share your story with European investors. This is Ionis' first time currently at our London conference, and we are so thrilled to have you. We hope that all the speakers enjoyed their gift of Fortnum & Mason hamper filled with an assortment of tea and goodies, which will hopefully remind you of London and help in the early mornings of this conference. You are joined by several of your peers as we welcome around a record number of 51 companies to the conference, 15 of which are NASDAQ 100 companies. On the investor side, we are welcoming over 500 investors, representing approximately $13 trillion in assets under management, which far surpasses the 400 investors we posted last year. The all-time high demonstrates a very strong appetite for investors to connect you virtually in this format. The investors join us from across the globe. 52% of registrations are from the U.K., with the remaining 48% from 23 other countries. The NASDAQ investor conference is for your benefit as a large-cap NASDAQ issuer. We've been providing NASDAQ-listed companies with the global stage for 20 years by helping facilitate meaningful dialogue between NASDAQ-listed companies in the investment community. We're thrilled to have you join us and tell your unique story to European investors. If there's anything we can do to assist you with your conference experience over the next few days, please let us know. If you are joining the feedback meeting, your feedback is so important to us and helps us continuously improve and plan for the next conference in December. As a reminder, I will be joining after your last meeting wraps to discuss the experience at the conference. And without further ado, I'd like to please introduce Dr. Brett Monia, PhD, CEO of Ionis Pharmaceuticals.

Thank you, Ivonne, and thank you for the invitation to participate in today's health care conference. Very excited to be here and very excited to provide an update on Ionis Pharmaceuticals. So now I will share my screen, and I hope everyone can see the screen. So these are my forward-looking statements. I recommend them to you to take a look at and then review at your convenience. So Ionis Pharmaceuticals is a very successful biotech company delivering transformational medicines to patients for a variety of diseases today, and that's going to grow. That's going to grow substantially in the future. The success of Ionis today is based on our commitment to innovation, innovation across all aspects of our business, research, science and our business more specifically, and that's based on 30 years of innovation. And that innovation will always be core to the company. We'll always be committed to innovation. And this sets -- this is our foundation for the future growth. The 30 years of innovation is our foundation that we'll build off of going forward. And we will focus to ensure continued growth for the company focused on three key objectives. The first objective is to launch a new business model in which we will now commercialize assets in the pipeline that we will prioritize and bring to the market ourselves to bring in maximum value to the company as possible. And of course, as part of that is to build our own pipeline, our wholly owned pipeline. The second is to expand and enhance our ability to tackle diseases, many more diseases going forward by investing in our technology and in new technologies to expand our scope. And then the third is -- third key objective is to deliver many more transformational medicines to the market over the coming years. Our objective and our goal is to achieve 12 or more transformational marketed medicines in 2026. So how are we doing against these 3 key objectives today? Well, we're doing very well. First, in the evolution and focus on our new business model to commercialize products ourselves. Well, the first key step was to require a commercial affiliate, Akcea Therapeutics, which we did last year, which has gone very well. This was important because it helped to accelerate the growth of our wholly owned pipeline while also bringing in talent for commercialization to accelerate that aspect of the business. The second was to create a partnership with Sobi to distribute TEGSEDI and WAYLIVRA, and that was important because it allows us to focus on the medicines we want to focus on, which are our follow-on LICA medicines, which we think are -- is the real future for those disease areas that we're focused on. Building our commercial capabilities and expanding our infrastructure are all well along the way. As far as the second objective, advancing the technology. Great progress has been made in investments internally and externally in human genomics to ensure many new disease targets that are genetically linked for the future as well as targeted delivery using LICA chemistry and other medicinal chemistry investments to ensure that we have the very best products, very best medicines to reach patients in the future. And other investments in complementary technologies are all along the way. How are we in our -- against our objective of delivering 12-plus medicines to the market in 2026? Well, we're doing very well. We have 6 ongoing Phase III studies at present. One of those Phase III studies is due to readout in the second half of this year, tofersen, which I'll talk a little bit about in a moment. And we're expecting more Phase III study starts this year as well as next year. And you can expect Phase III readouts this year, next year and every year. Some years, several or multiple readouts, Phase III readouts in years coming through 2026 and actually beyond. Our 2 leading franchises today, therapeutic franchises are neurological disease franchise and our cardiometabolic disease franchise. Each of these franchises today has 3 ongoing Phase III studies. In neurology, we have 11 medicines in clinical development, 3 of which are wholly owned by Ionis today. In the cardiometabolic franchise, we have 14 medicines in clinical development today, 6 of which are wholly owned by Ionis today. Our neurology franchise, of course, is led by our commercial blockbuster, SPINRAZA, which is the foundation of care for all forms of spinal muscular atrophy. Today, we had more than 11,000 patients on SPINRAZA, and it's growing. Our first quarter sales for this year with our partner, Biogen, exceeded the revenue, the commercial sales from fourth quarter 2020. And we expect SPINRAZA to continue to perform as a blockbuster on the market for many, many years to come. In addition, we have 2 ongoing post-marketing studies that are in progress with both study, which is examining higher doses of SPINRAZA to demonstrate even greater efficacy beyond that which has been demonstrated already; and the RESPOND post-marketing study, which is treating patients that went on gene therapy and had a suboptimal response to gene therapy. The goal there is to show that SPINRAZA can rescue these patients and provide real value to patients with SMA. So now what I'd like to do is take you through our Phase III pipeline. 5 medicines in development in Phase III today across 6 Phase III trials. You can see the names of the drugs shown on the left and the disease indications. 2 of these drugs are partnered. 3 of them are wholly owned by Ionis today. You can also see is the disease prevalent -- or the disease, the prevalence that we're targeting for the disease indications that we're going after. And what's -- what you can see is that we are targeting both severe rare diseases as well as very large patient populations that are estimated in the millions. Also the Phase III readouts. As I said earlier, Phase III data expected this year, next year and every year as far as we can see going forward. So now I'd like to take you through the neurology Phase III programs, tofersen and ION363. Both of these drugs target a severe neurological neurodegenerative disease called amyotrophic lateral sclerosis or ALS, which is a fatal disease with a huge, huge unmet medical need. There are no disease-modifying therapies for treatment of ALS. This is a terrible disease that results in functional decline, paralysis and respiratory deterioration, usually respiratory death. Death typically ensues within a few years after symptom onset. And there are multiple causes of ALS. There are genetic causes, most commonly in genes such as SOD1 -- due to mutations in the gene SOD1, C9 or FUS, most commonly or none or broad ALS, which is a former ALs in which no genetic linkage has been identified as a cause of that form of ALS. Our most advanced drug for treatment of ALS is tofersen. Tofersen is targeting a genetic cause of ALS mutations in the gene called SOD1. So we're targeting the root cause of this disease by inhibiting the production of the toxic SOD1 protein. We've demonstrated in patients in a Phase I/II study substantial reductions in the SOD1 protein in these patients. But more than that, we've shown that -- we demonstrated strong trends in slowing progression of disease after only 3 months of treatment. This potentially is our next commercial product. The Phase III VALOR study is fully enrolled with data expected in the fall of this year. In addition, we and our partner, Biogen, have initiated a study called ATLAS, which is in patients with SOD1 mutations but have not developed symptoms yet, presymptomatic treatment for SOD1 ALS. So stay tuned for that. And then our second Phase III drug for ALS is ION363, wholly owned medicine by Ionis. This also targets the root cause of this form of ALS. This form is due to -- its caused by mutations in the gene called FUS, and we're targeting FUS. We're blocking the production of FUS. So we've shown in preclinical models robust activity in lowering FUS levels as well as slowing in preventing progression of disease. We also have clinical experience in a compassionate use study done at Columbia University that we supported, which gave us encouragement to start a Phase III study, which we did. And that study is now actively underway and enrolling with data expected in the time frame that's shown there, 2024. And certainly, tofersen and ION363, our most advanced ALS drugs today, but it's only 2 of 4 drugs in development today for targeting ALS. All 4 drugs are targeting independent causes of ALS. In addition to tofersen and 363, we have ION-C9Rx targeting the most common genetic cause of ALS, due to mutations in the gene called C9 or C9 -- IONIS-C9Rx is in Phase II development with data expected next year. And ION541 targeting broad ALS, with known genetic cause has been linked to this form of ALS, the most common form of ALS, throughout ALS, where we're here we're targeting ataxin 2. And that drug is in Phase I/II studies for broad ALS at this time. So now moving on to our Phase III pipeline from our cardiometabolic franchise. 3 drugs in development in Phase III: eplontersen, APOCIII-LRx and pelacarsen across 4 Phase III studies. All 3 of these drugs utilize our most advanced targeted delivery chemistry called LICA chemistry, which offers us tremendously attractive therapeutic profile regarding potent -- high potency, efficacy, safety and tolerability and convenience for patients. These drugs are targeting rare diseases as well as very large indications, and we're expecting data from this franchise to start coming out next year with eplontersen in TTR polyneuropathy. So now let me take you through these 3 drugs -- the first is eplontersen for the treatment of all forms of TTR amyloidosis. This is a devastating fatal disease characterized by toxic formation of amyloid deposits that are caused by the production of the protein called transthyretin, TTR. These patients suffer from multi-organ failure due to these deposits, predominantly severe progressive polyneuropathy and heart failure, cardiomyopathy. Typically resulting in progressive disease as well -- and eventually death. Eplontersen, as I said, use our most advanced LICA chemistry, offering real attractive -- an attractive profile regarding -- with respect to potency, convenience, tolerability. We're targeting the root cause of this disease, blocking the production of the TTR protein. And in fact, in Phase I development with eplontersen, we've demonstrated greater than 90% reductions in the TTR protein in normal volunteers and actively compared to our predecessor drug, precursor drug TEGSEDI, which demonstrated about 70% reduction. We think that this could translate to even greater efficacy in the Phase III study. So the Phase III studies are in progress. There are actually 2 Phase III studies evaluating eplontersen. The first is the NEURO-TTRansform study, which is in patients with progressive hereditary polyneuropathy. We're expecting data from that Phase III study next year in 2022. And then the CARDIO-TTRansform study in patients with both hereditary and wild-type cardiomyopathy is actively enrolling, and that data is expected in 2024. Our second Phase III drug from the cardiometabolic franchise targets diseases related to high triglycerides, severe triglycerides, which is known -- which are known, well documented because many, many different forms of types of diseases, including diseases related to cardiovascular risk as well as serious metabolic disturbances and dysfunction, including potentially fatal pancreatitis. Our target here is a master regulator of triglyceride production and levels, APOC3. And APOC3 has also been linked or has been identified as an independent cardiovascular risk factor. There are several different diseases that have been linked to high triglycerides. They include severe, rare, the severe rare disease, such as the severe rare disease, familial chylomicronemia syndrome or FCS as well as large indications that involve triglycerides above 500 milligrams per deciliter or greater. And these other indications have a prevalence in the millions of patients. So APOCIII-LRx is our LICA medicine in Phase III targeting diseases with high triglycerides. We demonstrated in Phase II development very robust reductions in triglycerides in patients with cardiovascular disease and high triglycerides. In fact, most -- many of those patients, most of those patients, we were able to normalize the triglyceride levels in the normal -- to get them into the normal range. Our Phase III study in FCS, the balance study is well along and on the way for enrolling patients now. And we're planning to start another Phase III study for APOCIII-LRx in the second half this year, targeting the broad patient population, severe hypertriglyceridemia as HTG. And then our third Phase III drug from our cardiometabolic franchise targets another risk factor. This risk factor is lipoprotein(a) or lipoprotein (a) actually. Elevated levels of Lp(a), post cardiovascular disease, severe cardiovascular disease and the higher the level, the greater the risk for disease. Elevated levels of Lp(a) have been identified as a major untreated bunch cardiovascular risk factor today. And there are no approved treatment therapies available today for the management of high Lp(a) levels despite the fact that this is a very large patient population with prevalence estimated to be greater than 8 million patients, people worldwide with Lp(a) cardiovascular disease. So our pioneering medicine is pelacarsen. Pelacarsen again, like our other drugs, targets the root cause of this disease. We target Lp(a). We lower Lp(a) levels with this LICA medicine. And in Phase II development, we demonstrated already 98% of patients with high Lp(a) levels with cardiovascular disease, if we were able to normalize nearly 100% of the patients where we are to normalize our Lp(a) levels in a very quiet big Phase II study. This led to the launching of the Phase III study with our partner, Novartis. The Phase III cardiovascular outcome trial is called HORIZON, and it will involve just under 8,000 patients. And that study is enrolling very nicely and with data due in 2024. So that's our Phase III pipeline today. What I'd like to now touch on is what we expect to be our next Phase III drug, which is IONIS-PKK-LRx, another LICA medicine, another medicine that enjoys the benefits of our LICA platform. The disease we're targeting here is hereditary angioedema, a severe rare disease due to -- caused by deficiency in a protein called C1-inhibitor. And this deficiency causes hyperactivation of a pathway called the prekallikrein bradykinin pathway, which causes excess production of bradykinin, resulting in a severe swelling of various tissue beds, including the throat, which can be fatal. These attacks are spontaneous and unpredictable and cause tremendous difficulties with quality of life for these patients. And as I said, potentially death. PKK-LRx targets the root cause of this disease, targets the prekallikrein pathway. We are targeting prekallikrein, lowering PKK prekallikrein levels, thereby, blocking bradykinin production. Earlier this year, we announced top line data from a Phase II study involving PKK-LRx in patients with HAE, a 17-week study. In that study, we announced 90% mean reduction in monthly HAE attacks versus placebo. And if we looked at weeks 5 to 17, which gives the drug few weeks to get on board and hit equilibrium so that it can -- we can -- it can have a maximum effect on efficacy. 97% -- during that time frame, 97% mean reduction in monthly HAE attacks versus placebo was demonstrated. Furthermore, we had a substantial number, 90 -- more than 90% of patients had 0 attacks that were on PKK-LRx, and that's compared to patients on placebo, which all patients suffered attacks. None of them had 0 attacks during that 5- to 17-week time period. So PKK-LRx for HAE, we expect to potentially be a real breakthrough and a best-in-class medicine for the prevention of HAE attacks. We're targeting root causes of the disease, the pathway, the PKK pathway. It's another LICA medicine, enjoying more benefits of our LICA platform. And we're planning -- right now, we're putting the final touches on our Phase III study design. And we're hoping to get that study started as soon as possible. So the Phase III programs are advancing very nicely on track with data readouts over the next several years, including this year. In 2021 also has been a highly eventful year and will continue to be a highly eventful year from our pipeline. Earlier in the beginning of the year, we said that there would be quite a number of pipeline data readouts as well as new study starts, key study start initiations, and we're well on our way to achieving all of our goals. So we already had several data readouts from our pipeline, and we're planning more in the second half of this year, including the full data set for PKK-LRx in hereditary angioedema, our tau program, MAPTRx and Alzheimer's at the Alzheimer's Meeting in July and of course, the Phase III data for tofersen in patients with SOD1 ALS. We've already had many key study initiations this year, and we're expecting more in the second half of the year, including the Phase III study for APOCIII-LRx in patients with severe hypertriglyceridemia. All of this done -- the performance of our late-stage pipeline as well as our mid-stage pipeline sets us up very nicely for our goal of 12 or more medicines on the market in 2026, including drugs, of course, principally from our leading franchises in neurology, in cardiometabolic diseases as well as other drugs outside of these franchises, such as PKK-LRx and HAE and contributed by our wholly owned pipeline as well as our partnered pipeline. So at Ionis today, our pipeline and our technology is advancing at an accelerated pace. We are delivering and are poised to deliver many, many new transformational medicines to the market in the coming years. Medicines that are opening up brand-new markets, pioneering new markets as well as medicines that are providing tremendous benefit for patients, changing and improving upon the existing standards of care. We're investing in all aspects of the business as it deserves investment, including our technology, our commercial plans as well as our building out our infrastructure to support all of our goals for the future. All of this is positioning our company, Ionis for tremendous growth, accelerated growth well into the future. And with that, I think I'll stop and move into any questions that the audience has.

Okay. Our first question is going to -- we're just loading up the first question here. With multiple data readouts expected later this year and so many programs in the pipeline, where should investors be focused in with the second half of 2021 and specifically into next year?

Well, there is a lot to focus on. But I would draw your attention to -- from the neurology franchise, the MAPT data. That's -- we'll have a Phase II update at the Alzheimer's disease meeting, AICC, I think it is in July. And of course, the tofersen Phase III data in the fall of this year is very important. Obviously, key event for the neurology franchise, our SOD1-ALS drug. And in the first half of next year from the neurology franchise, the C9-ALS drug is expected to readout. And of course, next year, the Phase III data from the polyneuropathy TTR, I should say, eplontersen for TTR polyneuropathy will readout as well next year. From the cardiometabolic franchise, I would -- I'll just look towards the big cardiovascular meetings this year, which hopefully, we'll have some updates. The ESC, American Heart Association meetings, I think, we'll be -- we always have a significant presence at those meetings with our rich cardiovascular pipeline. And of course, key Phase III study starts this year, APOC3 in LICA and sHTG, PKK LICA in HAE Phase III maybe late this year, if not early next year. And I would continue to monitor the performance of SPINRAZA, which we expect to be -- continue to perform as blockbuster on the market.

Okay. That was the only question I have thus far unless there's any last-minute ones that you'd like to submit. Okay. That concludes the question-and-answer portion then. Thank you so much.

Thank you, Ivonne. And have a nice day, everybody.

Thank you, everyone. Have a nice day.