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

Welcome to the Wells Fargo Bank and Tech Pop-up Virtual Conference. Before we get started, if you are a member of the press or media, please disconnect at this time. This is a restricted line. Any unauthorized party in this meeting or any unauthorized use of the information communicated in this meeting is subject to prosecution to the fullest extent of the law. Any unauthorized person, including the media that is on the line at this time, please disconnect. Please note, today's call is being recorded

Hi, everyone. Thank you for joining us. My name is Yanan Zhu, and I'm a senior biotech analyst here at Wells Fargo. Today, we are very fortunate to have Brett Monia. Chief Scientific Officer of Ionis Pharmaceuticals being with us in a fireside chat session. Hi, Brett. Welcome, and thanks for being with us.

Hi, Yanan. It's a pleasure to be here. Thank you.

So could you provide an overview to kick -- to start it off, an overview of the company's programs and initiatives before we dive into more specific topics?

Sure. Absolutely, pleasure to. So we're very, very pleased with and excited really, frankly, about the progress we're making in real aspects of the company. Especially regarding our 3 most strategic initiatives, great progress across all 3. Those initiatives our objective to deliver a substantially large number of new products, both rare and large indications over the next several years. And I can talk a little bit about the pipeline, of course. The second initiative is to make Ionis into a fully integrated biotech company to capitalize and to complement our excellence in research and development to now add excellence in commercialization for products we choose to commercialize ourselves. And then the third initiative is to really expand the reach of our technology through investments in technology. to expand the scope of the types of diseases we can tackle. So maybe I'll just take a minute and dig into those 3 initiatives a little bit more. Our late-stage pipeline is doing very well. Today, we have 6 Phase III trials in progress across 5 drugs for rare diseases in large indications. Those Phase III studies are progressing very nicely. Some are ahead of schedule earlier this year -- earlier this summer, we announced the completion of the enrollment in the eplontersen, TTR polyneuropathy study ahead of schedule, data readouts expected next year, first half of next year. We also announced achieving a 50% enrollment in the pelacarsen Phase III study for LP(a)-driven cardiovascular disease with Novartis. And that's significant because that's an 8,000 -- nearly 8,000 patient cardiovascular outcome trial. So a very large patient study. That's also ahead of schedule. And our other Phase III studies are also progressing nicely. And of course, with data -- and most notably, a Phase III readout is imminent or tofersen drug with Biogen for SOD1-ALS is due to read out soon. and we're very much looking forward to this. This drug, of course, is the -- has the potential to be the only drug to show benefit in patients that have genetic causes of ALS in a meaningful way. And of course, that's 1 of 4 ALS drugs in our development pipeline today targeting distinct causes -- each targeted distinct causes of ALS. And then we're also planning to initiate additional Phase III studies, soon. Our APOCIII LICA drug, which is in Phase III for FCS is planned to start a much larger patient population for Phase III in severe hypertriglyceridemia, and that will start this year. Our hereditary angioedema drug will start Phase III development soon. And next year from our mid-stage pipeline, we expect several Phase III starts as well. And we can talk about those later. Regarding our initiative to move into bringing forward drugs from the Ionis [ olio ] pipeline and to commercialize those drugs ourselves, making great progress. And the acquisition of Akcea, a commercial subsidiary last year has proceeded very nicely. And we are nearly fully integrated. But more than that, we're building our internal commercial capabilities through talent we brought in from Akcea as well as building out our strategy, and we're very much preparing the market and preparing ourselves for the launches of eplontersen for TTR doses, APOCIII LICA for FCS and sHTG and potentially also our PKK LICA drug for hereditary angioedema. So the integration and commercialization objective is going very well. And then the final key strategic initiative, of course, is to expand the reach of our technology. Today, our main focus, our leading franchises are in cardiometabolic and neurodegenerative and those are going very well. Our cardiometabolic is focused on LICA delivery to the hepatocyte primarily, targeted delivery to the liver. And that LICA platform is now being developed in the clinic in 16 different clinical trials, many of which are in Phase III that I touched on some of them already. And then neurodegenerative diseases, which involves intrathecal delivery of our drugs every severance over, of course, 3, 4 or 5 months frequency. And that's a very exciting pipeline as well. But through investments in new chemistries, backbone chemistries as well as new LICAs that are opening up new organ systems like muscle, we're making great progress to open up new disease areas. We announced a partnership with Bicycle Therapeutics to complement our partnership with Arrow Therapeutics to develop new LICAs. We're focused on skeletal muscle and heart muscle right now. Great progress of being made. We're expecting new drugs to reach development soon for those -- in those areas. And we're very close to settling on a new backbone chemistry to add to our existing chemistry that we think is going to not only increase the potency of our molecules further but also to extended durability for our molecules, allowing us to get to biannual dosing for molecules we choose to develop with that chemistry. So making great progress across those 3 big initiatives. And then the final point I'll make is SPINRAZA. Our commercial -- our lead commercial product continues to perform exceptionally well as the blockbuster deserves to perform as in all forms, all ages of SMA, and we expect continued growth for SPINRAZA for many years to come with our partner, big. So things are looking really good in the pipeline as well as on the commercial front.

Got it. I guess I'll start with the SPINRAZA question and then a lot of questions on the pipeline, of course, because that's where the excitement is. But for SPINRAZA, what are you seeing in the current market dynamics between [ doganzuma ], Evrysdi and SPINRAZA? The sales of SPINRAZA has been stable, but the U.S., ex-U.S. mix has been changing and perhaps stabilized in the last quarter. But overall, what has been driving this kind of U.S., ex-U.S. mix change? And also, do you think at what point we might reach a steady state?

Sure. So SPINRAZA has done very well this year. In the first half of the year, we and Biogen reported a little bit above $1 billion in sales already for SPINRAZA. And as you pointed out, Yanan, U.S. sales have been essentially flat. The growth first SPINRAZA has really come ex-U.S. principally so far. The reasons for a little bit of a flattening in the U.S. market is really for 2 reasons, primarily. One was the the pandemic certainly had an impact on there. Remember, SPINRAZA has delivered intrathecally. So it requires an office visit for the procedure. And as we all know, office procedures were a little more challenging during the pandemic. And therefore, there was an advantage was magnified by competition that allows for oral delivery of an SMA therapeutic. We think that, that will change as the pandemic comes to a conclusion. And related to that is the attractiveness -- the theoretical attractiveness, I think -- we think than an oral offers versus an intrathecal delivered drug. However, we also believe that, that enthusiasm will wane with time because SPINRAZA -- the data indicates SPINRAZA is the most efficacious treatment for all forms of SMA regardless of age or type. And at the end of the day, efficacy will [indiscernible] and we believe that as the pandemic winds down and as more and more data emerges in the real world that SPINRAZA will continue to grow going forward. And certainly, it really has done well. Even with those headwinds, SPINRAZA continues to perform exceptionally well, showing why it's so attractive. The other point I'll mention about SPINRAZA is that our partner, Biogen, has already launched a couple of post-marketing studies that demonstrate even greater value for patients with SMA for treatments with SPINRAZA. The DEVOTE study is examining higher doses of SPINRAZA in patients with SMA to demonstrate even greater efficacy. And of course, we can do that because SPINRAZA has shown pristine safety in the rail world, more than 11,000 patients on SPINRAZA with a prevalence greater than 60,000, so a lot of room to grow. And looking at higher doses to show efficacy, we already completed the dose escalation phase, so it's safe. And now they've gone into the randomization phase in the DEVOTE trial. That data is expected to read out in the 2023 time frame. And then in addition, the post-marketing study respond is in progress. This is examining the benefit of -- potential benefit of SPINRAZA in patients on gene therapy that don't perform so well, that don't do so well on gene therapy. Some optimal performance on gene therapy, they go over to SIMRAZA and the goal there is to show that these patients can be rescued to some extent and do better on SPINRAZA. And of course, that's based on real-world data information that we've -- has been -- that's out there that have many patients on gene therapy do go over to SPINRAZA to try to achieve better benefit, greater benefit for their disease. So we think that's the market dynamics, and we do believe that the market dynamics will continue to change a little bit with time. And I believe that it will change in favor of SPINRAZA.

Great. Thank you for that insight. Looking forward to continued development. With regard to the SOD1-ALS tofersen program, I guess the Phase III VALOR data is probably expected any time is my impression. And I think you've been very vocal about your confidence for the Phase III study. And I think for that conference is the Phase I/II study where publishing in New England Journal, you have in a fast progressor, there were striking treatment effect on the functional end point. So my question is what we expect for the Phase II? Because Phase III, I think, enrolled both fast progressor as well as other patients. Was the -- will the success be dependent on difference between the arms in the overall population? Or you have the leeway to have the analysis done on fast progressors?

Yes. Yes. So we're very, very excited about and we're very committed to developing treatments for all causes of ALS. We have 4 drugs in development today for ALS, 2 in Phase III targeting genetic costs of ALS. Tofersen, is one of them targeting SOD1 mutations and ALS, that cause ALS. And then we have a third genetic cause of ALS drug in development and then sporadic, a drug for sporadic ALS that's in Phase II development. So very excited about ALS in general. And you're right, the Phase I/II data was very encouraging in SOD1-ALS for tofersen. That was a 3-month study in patients that were symptomatic with ALS and had -- and they had mutations in the SOD1 gene that caused ALS. And in that study, there were what we referred to -- what we refer to as, as you mentioned, fast progressors, which typically are associated with a particular mutation that causes the disease to progress quite fast. By fast progression, I mean death typically ensues within a year or 2 following onset. And then normal progressors that have SOD1-ALS. And I should also mention that SOD1-ALS, if you don't have a fast-progressing mutation, it's still an aggressive form of ALS. It still progresses quite fast. 3 to 5 years, typically death following symptom onset. So in the Phase I/II study, there are several elements that provide comfort -- confidence. One, good safety and tolerability; two, statistically significant and robust reductions in SOD1 protein in patients; three, where robust reductions in neurofilament light chain, a biomarker that has been associated with neurodegenerative disease progressions, particularly diseases related to motor; and then four, evidence that patients on tofersen were experiencing disease stabilization compared [indiscernible] after 3 months of treatment using an endpoint called the ALS Functional Rating Scale, which is the same endpoint, primary endpoint as in the Phase III study that's in progress. And as you pointed out, Yanan, an patients that were deemed fast progressors because of the mutation they had the evidence that they were doing better than placebo was even -- was greatly magnified. It was even better. And that's because when you compare to placebo, it's easier to differentiate treatment versus placebo because the placebo group high fast progressors progress faster. So differentiated treatment versus placebo is more straightforward. The Phase III study is essentially an extension of the Phase I/II study. And in fact, it's really in the addition of an added cohort to that study. So we were able to move it along much faster to get the Phase III study started. It's about 100 patients. That includes a good sample of fast progressors as well as regular progressors with SOD1-ALS, placebo-controlled, same primary endpoint ALS Functional Rating Scale. And our objectives, what we hope to see is that all patients on treatment benefit what regardless of whether they have fast progressing mutations or other mutations with SOD1-ALS. We also recognized, Yanan, that ALS has been a tough disease to have success over many, many years. A lot of drugs have not done well in ALS. However, we also recognize the fact that our strategy is unique. It's different. We're targeting the root cause of ALS with our -- with tofersen targeting SOD1. And we also recognize the fact that the unmet need is substantial and significant. And we believe that this drug will show benefit in patients with SOD1-ALS. And it's really based on its mechanism and what we've seen based on the Phase I/II data to date.

Got it. That's very helpful. Thank you. I wanted also to talk about eplontersen, another Phase III asset. Obviously, this is going to be used for 2 indications: TTR doses polyneuropathy as well as cardiomyopathy. And you have trials ongoing. So -- but we also are aware of the competitive landscape with siRNA approach, which I think is a little bit ahead in terms of clinical development and as well as the gene editing approach, also targeting these 2 indications. So where do you see eplontersen fit in this treatment changing evolving treatment landscape? Where do you think the efficacy will land relative to vutrisiran? And how should we think about the dosing frequency difference and the value proposition?

So eplontersen, great questions. We're very excited about our platform. Eplontersen, again, is 1 of the drugs that I mentioned before that utilizes our targeted delivery LICA platform, where we've shown highly reproducible potency safety and tolerability with the convenience of once per month self-administered subcutaneous injection, low volume using an auto-injector. And then the Phase I study for eplontersen and we showed reductions in TTR protein that were -- that exceeded -- that were dose-dependent and exceeded 90% reductions in normal volunteers. And we expect that to translate to patients as well in the Phase III studies. So we think this drug has a potential to be a best-in-class or the best-in-class drug for all forms of TTR amyloidosis. The polyneuropathy is coming first. That's the smallest segment patient population for TTR amyloidosis is still very significant. With the prevalence estimated to be about 50,000 patients, probably more -- a little bit more than that, with TTR-related hereditary TTR polyneuropathy. As I mentioned in my opening comments, we've enrolled and completed enrolling that study ahead of schedule, with data coming out first half of next year. And it's the data successful we plan to file next year as well for approval. So we think our drug will show great efficacy based on the reductions in TTR that we've already demonstrated and with high convenience and with excellent, excellent safety and tolerability, like all of our LICA drugs. How it competes versus the competition versus RNAi is to be determined. We'll see how that will be a data-driven decision or data-driven process with -- from the Phase III results versus SIs. We think that this mechanism of action, however, is will be superior to stabilizers just based on the fact that we're blocking production of the disease-causing protein. And we're doing so in a very, very substantial way. Where the real biggest opportunity, of course, is in cardiomyopathy, hereditary TTR-related cardiomyopathy or nonhereditary wild-type cardiomyopathy related to TTR amyloid buildup in the heart. And again, we think eplontersen has the potential to be a best-in-class or the best-in-class medicine for the treatment of TTR cardiomyopathy as well based on its pristine safety, the reductions in TTR we're achieving but also the design of our Phase III cardiomyopathy study. It's the largest TTR cardiomyopathy study ever conducted. And it allows us to include a very unique patient population that is, in particular, patients that are on stabilizers that go on to eplontersen in addition as well as naive patients, patients that are not on stabilizers who go on eplontersen, and stratified accordingly. So we believe that based on the size, the robustness of the study, we will be able to actually assess how eplontersen does in combination with stabilizers as well as a single treatment for TTR amyloidosis, which we think is very important as do our advisers because that's the real-world setting. These drugs are going to be used in combination. There's no step expected for -- in this space. We're not expecting 1 choice to be first and then your second line or third line, we expect physicians to prescribe the drugs that they think will provide the greatest benefit, and we think we'll be able to demonstrate that because of the robustness that our drug in combination will have that the data that physicians are looking for so that they know what and how to prescribe the drug. And for cardiomyopathy, we're looking at a 2024 data readout, which is really within target -- within the same range as the competition. As for our DNA editing, a lot of new -- more data, I think we all need to see before we get comfortable with the safety profile of DNA editing in large patient populations, especially and as well as the durability of the effects, right? Are these really one and done? Or will multiple treatments be necessary? Are there immunological responses to Cas -- Cas9 proteins that will limit efficacy in certain patients that will that will cause these drugs to lose efficacy over time. There's so much to be learned and understood with this platform before we can really size them up to be meaningful competitors in the long run, especially for large patient populations. And then I would just leave it with this. By the -- if they reach the market by the time they get there, the question will be what market are they serving? The RNA silencers that I just discussed that you asked about, including plans we believe we're going to meet the market. The market's needs. And from a safety, tolerability and convenience standpoint, the question is what market is there to serve by that -- by the time they get there.

Got it. Got it. insights. Then maybe a question on the mid-stage pipeline program for HAE the PKK-LRx, I think you are going to share the full data readout later this year. So what will be the additional information that we will learn beyond the top line release in March?

Yes. We -- as you mentioned, Yanan, we really just put out the top line data, which included the fact that we had a highly statistical significant benefit on the primary endpoint. The number of HAE attacks over a 4-month period compared to placebo. We were able to suppress these attack rates by 97% during that period. Also the severe attacks were greatly improved. In fact, more than 90% of the patients had no attacks that were on PKK LICA and the LICA drug. And we believe that, that stacks up better than the best drugs that are out there today for hereditary angioedema from an efficacy standpoint. And this is a LICA drug. So as I've already said several times, like all of our like drugs, we've seen excellent safety, tolerability and reproducibility on potency. So it's a very low volume injectable that's being developed now in Phase III as a once-a-month subcu self-administered injection. The full data set that we're planning to present at a medical meeting later this year as well as potentially a publication, which is now under review. We'll share all aspects of the data, the kinetics, if you will, the time over the 4 months, how do patients fare in preventing their attacks when they're on drug versus placebo. What does the severity of the attacks mean? What kinds of aspects of severity are we improving? Quality of life instruments? These patients live with significant anxiety concerns that they can have an unexpected unpredictable severe attack at any time, that's during their normal daily activities. And quality of life measurement that addresses that in other aspects of the disease, how they do it on quality of life, how are they feeling about the drug. Open-label extension data potentially as well, virtually all the patients in the Phase II study rolled over into the OLE. And then finally, what are they in the quality life, how do they feel about the very convenient once per month, low-volume injectable compared to standard of care, which as right now, as indicated, Takhzyro was indicated as a once a month or once every 2-week treatment option. But the data demonstrates that for patients that are on monthly Takhzyro, they're actually having attacks. And they're living a life of anxiousness that they're going to have an attack at any time. So most of those patients were actually on every 2-week dosing, and they don't like it. They want more convenience. So all that's going to play out as well, we will discuss the design of our Phase III trial. And why we're so excited about it. So -- and which we're planning to get it started early next year, if not late this year. So that we're planning to share on the HAE program.

Right. Got it. Yes, certainly, a very, very compelling profile for that product candidate. And lastly, it looks like we were approaching the end. I think you have some indications that have very large target patient populations. Most notably, the Lp(a) is a -- could be a very paradigm-changing treatment. But maybe people haven't been totally catching up on that. From my perspective, I wanted to ask a little bit about your second indication for APOCIII-LRx, which might have the same potential, but why should we be excited about it? And how does this drug differentiate?

Yes. APOCIII is another LICA drug. It's a wholly owned asset in the Ionis pipeline. We already have that drug in Phase III development in familiar chylomicronemia syndrome. We're expecting to complete enrollment in that study early next year. And with data readout probably in early '23. But the sHTG population is a very large population that we're planning to develop this drug in. The sHTG is severe hypertriglyceridemia. So these are patients that are have triglycerides 500 and above, typically 700, 800. They live with high risk of pancreatitis, which can be severe and legal as well as many metabolic problems as well. In Phase II development, we showed we're able to be likely that we can normal essentially normalize triglycerides in patients with high triglycerides in that Phase II study. So we're excited about this program because we have high confidence that it will be successful. It will hit its primary endpoint, which is triglyceride reductions, and it's a very sizable patient population estimated to be greater than 3 million in the United States alone. This is the most potent mechanism, we believe targeting APOCIII for reducing triglycerides in patients with severely high triglyceride levels. and we're well ahead of any competition that we know of that has a program targeting on APOCIII that -- or any program that has a really major impact on triglycerides. So very much excited to get this Phase III study started, and we're planning to get the study started, possibly as early as next month to get sites up and activated and patients enrolled. So stay tuned. It's a very exciting program indeed.

Exactly. With that, I think we will come to the end of the session. Brett, thank you again so much for sharing your thoughts and company updates with us.

Thank you, Yanan. It was a pleasure. Take care.

Take care.