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

Good afternoon, and welcome to the 19th Annual Morgan Stanley Healthcare Conference. Before I get started, let me just go through the requisite disclosures. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. [Operator Instructions] And with that, I'm David Lebowitz, one of the biotechnology analysts here. And I'm happy to have with me from Ionis, CFO, Beth Hougen. Clearly, Ionis is one of the leaders in RNA medicine. Specifically, they have developed antisense technology and have a very, very large clinical pipeline of -- clinical-stage pipeline, over 40 drugs actually in the clinic at this point. And I guess, Beth, if you could start off just by telling me a little bit about the history of the company, some of the recent transition and strategically, what is Ionis looking to do going forward.

Happy to, and thank you for having us, David. Appreciate it. I think you did a really nice job of explaining that Ionis is the leader in RNA-based therapeutics and particularly the pioneer in antisense technology. And we've created a very deep and late-stage, frankly, pipeline from that as well as a very prolific drug discovery engine. Today, we're focused on really 3 strategic objectives. The first is bringing as many medicines forward to the market as we possibly can. Second, to -- we've really evolved to the place where we now want to add excellence in commercialization to our renowned excellence in research and development. So we would like to be commercializing medicines ourselves and are building capabilities and advancing towards that with a number of our wholly owned medicines. And then third, we have a very important strategic objective to continue to advance our technology and extend the reach of the technology so that we can address more and more tissue types and improve even further on the medicines that we bring to market and continue to have a very deep transformational pipeline of medicines. So that's where we are today. And we've made some -- we've made excellent progress this year so far with a lot of exciting catalysts still to come. Most recently, we announced 3 really important pipeline achievements in our Q2 earnings call. First, tofersen has completed the placebo-controlled aspect of that study, and we're looking forward to data soon. Second, eplontersen for TTR LICA and polyneuropathy completed enrollment. So we're looking forward to those data here later next year and then filing hopefully on positive data from that study. And last, the pelacarsen Phase III cardiovascular outcome study reached 50% enrollment, meaning we've got nearly 4,000 patients with Lp(a)-driven cardiovascular disease moving forward on that drug. And hopefully, we'll see data from that Phase III study in the 2024 time frame.

Excellent. Let's start with tofersen. Tofersen is a treatment for ALS, specifically SOD1-ALS. You're expecting to present Phase III data with your partner, Novartis, later this year. Could you, I guess, begin by talking about what the opportunity is for SOD1-ALS specifically?

Sure. So ALS, in general, is about -- it has a prevalent population of about 55,000 patients or so in the major markets, the G7, if you will. SOD1 is really a small genetic component of that. So there's about 1,000 to 1,500 patients in that market, in the G7 market. So it's relatively small, but it's also very fast progressing. It has generally a 3- to 5-year life expectancy, and there are certain mutations -- certain patients with mutations in SOD1 that actually progress even faster than that. And they could actually progress to death in 12 to 18 or 24 months. So it's a very devastating, fatal disease. And as I said, we're -- we know that tofersen represents -- is an important medicine or drug for ALS and particularly the SOD1-ALS patients. And so we're looking forward to those data this fall from Biogen.

Could you run us through -- I said Novartis earlier. I should have said Biogen. Could you run us through what this trial is studying specifically, what the primary end point is, what needs to be achieved?

Sure. So the primary end point is the same as what we studied in the Phase I/II study. It's the ALS Functional Rating Scale. And we -- this is an interesting study design because to move very quickly, what Biogen did was basically add an additional cohort to the Phase I/II study and created the VALOR study from that cohort to be the pivotal Phase III study. So it's a very similar protocol. It's a 28-week study. So that's the difference. It was -- the Phase I/II was only about 3 months. It's about 100 patients. And as I said, the primary end point is the ALS Functional Rating Scale. And of course, there are other secondary and exploratory end points that Biogen will be looking at when they get the data from that study.

Now you're also studying multiple other drugs with Biogen for ALS. How does the SOD1 therapy differ from these other therapies and the mutations they go after? And do you see this data release potentially providing read-through to any of those other therapies?

Yes. That's a great question. I think we have a very deep commitment to the ALS community, and I think that's demonstrated in the fact that we're actually studying with Biogen 3 ALS medicines, tofersen being obviously the most advanced. And then also, Ionis is pursuing an ALS medicine independent of Biogen, on our own. And so together, we have 4 ALS medicines advancing in the clinic, tofersen and then C9ORF, which studies a different genetic mutation in ALS; and then ataxin 2, which is really independent of genetic mutations. It's really for the broad patient population. And then FUS-ALS is Ionis' Phase III drug for a very small patient population with the genetic mutation in the FUS gene. And that is, as I said, in Phase III development. So in terms of read-through, while they're all being studied in ALS patients, they're all addressing different aspects of the disease, different genetic mutations. They have different mechanisms as -- because they're different drugs. And so you've got really different biology. And so it's, I think, very difficult to suggest that any one drug is going to have significant read-through when you -- to all of the others when you have so many different mutations and different aspects of the disease. For example, SOD1 does not necessarily show the TPD43 (sic) [ TDP43 ], which is something that we're looking at in the ataxin 2, the broad ALS patient population. So there's just a variety of those differences that make, I think, read-through a bit more complicated.

Collectively, all these different therapies together, what proportion of that 55,000 patients gets covered by these drugs?

We believe we've got ALS surrounded, and that's something that we're actually very excited about. And frankly, it's a deep commitment, as I said earlier. The ability to potentially treat many, if not all, forms of ALS with these 4 medicines is something that's been a key goal of ours for quite some time.

So let's jump on to another therapy, which you're going to have data by the end of the year, vupanorsen for dyslipidemia. Could you tell us about what the Phase III data you're expecting -- what you're expecting to present later on this year?

Sure. So Pfizer is actually conducting a Phase IIb study in -- with vupanorsen in patients with dyslipidemia. And it's a fairly large Phase II study. And if those data are positive, we would anticipate that, that would be a jumping-off point for a Phase III study, actually a broad Phase III program of multiple studies that Pfizer could initiate as early as next year. And so these are patients who have a variety of different lipid parameters that are causing cardiovascular disease. And so triglycerides are one, and there's a variety of others as well. And so we're essentially lowering angiopoietin-like 3. And by doing so, it's been demonstrated in the literature and in various different founder populations that by doing so, you actually can affect cardiovascular disease. And so we're -- Pfizer is testing that in this Phase IIb. They're doing dose range finding and potentially being able to pick a Phase III dose to be able to start the cardiovascular outcome and a severe high triglyceride Phase III study hopefully next year.

How large and long would such a trial be?

I don't know exactly. It would be a cardiovascular outcome study. So the patient population is millions of patients. And so you can imagine that a CVOT would be very large. Novartis is studying Lp(a), pelacarsen in about a 7,500-, 8,000-patient cardiovascular outcome study. So I would imagine you could see something that's similar sized. It would be very substantial.

Now let's jump on to acromegaly. Can you tell us about your asset in that area?

Sure. That's our GHR drug, and it's -- we're expecting data a little bit later this fall. The data would be out of our -- coming from our Phase II study as well as the open-label extension study. And it's on top of standard of care, which are the somatostatins. And what we're looking to show is, can we really lower the IGF-1 in these patients and really affect their disease? And these are patients who are resistant to really controlling their disease even on existing therapies. So we're going to report those data out a little bit later this fall. And in the meantime, we have a monotherapy study that's ongoing. And we're really going to need those data as well to determine the next steps for this drug. So I would say we'll have some data here shortly and then more data next year with the monotherapy. And at that point, we should be able to really understand where the opportunity is for this drug in the treatment paradigm.

How effective are the current standards of care at this point?

Not entirely, not all that effective. There are -- these patients certainly need additional therapies, and this is why we're looking at it on top of the standard of care first because there are a fairly substantial number of patients. I couldn't tell you the exact percentage, but a fairly substantial percentage of patients that don't reach their disease goals on just the standard of care. And so we're hoping that we can demonstrate a benefit and then obviously look at it as a monotherapy and see where we might be able to go with that.

At this point, how would you estimate the market opportunity given potential use as either monotherapy or as a combination therapy?

It's a rare disease. And so I would say we haven't -- we're still working through the market opportunity, but it fits in the sort of the rare disease space. And as we understand more about the opportunity either as in combination or as monotherapy, we'll be able to, I think, explain more about what we see the opportunity for the drug being at that point.

Now if we move over to TTR amyloidosis, you held an event last week. Could you tell us about what your activities currently are in TTR? Obviously, you do have TEGSEDI already approved, but you are also moving on with your LICA therapy. And I guess provide us an update on that area.

Sure. Absolutely. Eplontersen is our TTR LICA drug. It's the follow-on, if you will, to TEGSEDI. And it's actually a drug that we're really excited about. It's the drug that we're exploring in 2 Phase III studies, one in polyneuropathy that's now fully enrolled and for which we anticipate data in the first half of next year; and then in cardiomyopathy, which is the much larger patient population for this drug. And that study is enrolling very nicely right now. And we anticipate data from that study in the 2024 time frame. So we see this as being an important contributor to the therapy, the therapies that are out there. The study we're running in cardiomyopathy is the largest outcome study in this patient population. And as such, we're looking at patients that are not only naive to therapy, but also those patients that are on standard of care on tafamidis, on the stabilizer. And that will give us the opportunity to really understand how we can benefit these patients both in terms of just a silencer approach and the silencer and stabilizers. And given that it's a competitive space, we want to make sure that we have the most robust data package we can. So we're really focused on this drug and moving it forward. TEGSEDI is doing well in the hands of Sobi, and we're pleased with the work that Sobi has done. And what's important for us is it allows us to focus on our highest priorities, which are eplontersen and the rest of the Ionis' own pipeline.

So the LICA formulation should obviously make it so you could improve dosing and administration versus TEGSEDI. In theory, it allows you also to potentially reduce tolerability issues because of the way it's dosed. How does that LICA formulation compare with RNAi, which is out there, which also has an extended vutrisiran, which has an extended dosing approach as well? How should we look at one versus the other?

So I think the way to think about these is, as a class, I think silencers have, in our view, the best opportunity to really make a difference in these patients in the way that they're -- that they manage their disease and frankly, hopefully, to slow progression of the disease. We've got a -- with eplontersen a drug that is subcu once a month, small volume, easy to administer with -- potentially with an auto-injector at home or wherever you happen to be. We think that, that is a compelling profile for the drug. And we also believe that between the 2 -- or the 2 silencers, excuse me, that there's tremendous opportunity as this market continues to grow for both drugs to make a difference for these patients. And so we're continuing to be very excited about what eplontersen can offer for these patients. Looking forward to hopefully getting this moving forward into registration in Europe and the U.S. next year for polyneuropathy and then a year or 2 later with cardiomyopathy -- a couple of years later with cardiomyopathy. So we think it could be very competitive.

How do you think the market ultimately shapes up versus stabilizers? Is it, in the United States, these drugs will be used separately? Do you think that ultimately, they might be used in combination for the most part where their labels overlap? And similarly, do you think it shapes up in the same way in Europe?

In all of the market research that we've been doing and the conversations we've been having with payers, in particular, as well as with physicians, we don't see the need for really any step editing. We don't see sort of first line, second line, third line. What we're hearing very consistently is that physicians are going to use whatever combination of these medicines they can to benefit their patients, and the payers are going to pay for whatever is prescribed. Now it's still early. Obviously, we've got 2 new silencers coming to the market here shortly, and we'll see how that changes the landscape, if at all. But really, that's the feedback we're getting very broadly across physicians and payers. And frankly, it's very encouraging to us and to the opportunity for this drug and also, frankly, for these patients.

Would you say similar or different in Europe?

We're not really hearing a big difference in Europe either. We -- and tafamidis, as you know, is not widely used all over the world. And so there are lots of places where, frankly, the silencers are going to be the -- maybe the only drug available to these patients. And so I think it will be less of an issue in those regions.

So you were talking also earlier, to move on, about APO(a) with the Phase III trial going on. Why, in your mind, have so many companies really -- has it taken so long for companies to be interested in APO(a)? And how large do you think the market opportunity could be?

Sure. So pelacarsen is our medicine in Phase III development with Novartis for Lp(a), cardiovascular-driven disease from Lp(a). And the interesting thing about that is there's -- it's been well understood as a cardiovascular risk factor for quite some time, but it's been really undruggable. It's very difficult to address, and you can't manage it by lifestyle alone. So diet and exercise really don't affect your Lp(a) levels. You're born with those levels. And so it's very difficult to manage them other than with a therapeutic solution. And so the market opportunity right now is millions and millions of patients. I think Novartis has been saying in excess of 8 million patients could have cardiovascular disease driven by Lp(a) levels -- heightened Lp(a) levels. And so that's a substantial market. And that's why they're running this cardiovascular outcome study today of nearly 8,000 patients. So it really is the fact that it's been an undruggable target until very recently with our technology. And we're well ahead of the competition and are really excited about the opportunities this drug could bring to these patients.

So when the Phase III trial was designed, how did they determine inclusion criteria relative to Lp(a) levels before -- for the trial?

So we had -- so there's a couple of different things I'm sure they considered. There's a lot of studies that have been done on patients with Lp(a). And so those data are available. But we also ran a very large, for us, anyway, a very large Phase II study. It was about 300 patients, and we're able to show a very consistent dose response over the course of the study. And that helped us really, with Novartis, pick the dose for the Phase III study and ensure that we would get the maximum reductions. And the Phase III study, it's interesting. You've got -- they're looking at the reduction in Lp(a) for patients who have 60 mg per deciliter and those for 90 mg per deciliter or less and so -- or more, rather. And so you're looking at a couple of different aspects of Lp(a) levels.

So we've been going through all these pipeline assets. And I understand we could go on for 2 more hours, and we'd still be talking about pipeline assets. But I'm actually -- to go commercial now, SPINRAZA, tell us how the drug has been doing now that there is more competition on the market? And how should we expect things to evolve going forward?

Sure, happy to. I'm pleased to say that SPINRAZA is on track for another multibillion-dollar year. They had just over $1 billion in sales in the first half of this year, and that's in the face of a pandemic. And this is, as you know, an intrathecally delivered medicine. And so you have to go into a clinic to have your medicine administered, which is certainly challenging in this pandemic environment and also in the face of competition. And I think the reason that SPINRAZA has been able to maintain its multibillion-dollar standard of care, really blockbuster status is because of its efficacy, which has been well established in thousands and thousands of patients. There's more than 11,000 patients on SPINRAZA today, and it's been approved in more than 60 countries around the world. And of course, it's been in either development or on the market now for probably 8, 10 years. It's -- so it's got a very, very long track record of efficacy, combined with exceptional safety in all types of patients and all ages of patients with SMA. And when you look at it compared to the competitive products, efficacy always trumps. And in these patients, even more so because this is a fatal disease for many patients and a devastating, life-changing disease for others. And so being able to control and manage your disease means you have to have the most efficacious drug possible. And SPINRAZA is that. And you can see that in the data, not only the real-world data but also the clinical data. And Biogen is not sitting still. We're pleased with their postmarketing efforts. The DEVOTE study is studying SPINRAZA in higher doses for potentially even more efficacy for these patients, and that's possible because it is such a safe drug. And they're also looking in the RESPOND study at those patients who had a suboptimal response to gene therapy and then went on SPINRAZA and what does that mean for those patients and how can we benefit them in that type of a setting. And so we continue to see tremendous opportunity for SPINRAZA going forward and are pleased with the work that Biogen is doing around the world with this drug.

How has the emergence of an oral impacted on a quarter-by-quarter basis?

I think initially, as you'd expect, particularly in the pandemic, the theoretical benefits of an oral would be something that patients would be looking forward to, something that they want to try. And I think that we saw that. Certainly, a year or so ago, we saw patients moving over to the oral from SPINRAZA to really see if the oral would be -- give them the convenience that an oral would theoretically provide as well as the efficacy that they had come to appreciate with SPINRAZA. And I think what we're going to see and possibly are already starting to see is a shift back to SPINRAZA because the efficacy just isn't there, particularly in the type 2s and type 3s, your adolescent and your older adult patients who are heavier and, therefore, are maxed out in dosage on the oral. They're not getting the amount of drug that they need to manage their disease, and they know that they can manage their disease very effectively with SPINRAZA. And so I think you will continue to see patients come back to SPINRAZA simply because of its proven efficacy.

So has it been seen thus far that patients are starting to actually come back in the numbers?

I think it's a little bit early to say. We've heard anecdotally that, that's happening. But I really have to sort of punt that one off to Biogen. They've -- they're closest to it as the commercial -- the commercialization company. It's really their drug, and they're in the markets on a daily basis with that drug. So I would say we've heard anecdotally. But really, it's up to Biogen to talk more about what that means from a numbers perspective.

And last question here, you're certainly making a move towards being more commercial and not just being more of the R&D engine that historically the company was. Can you tell us about that evolution?

Sure, happy to. This is something we're really excited about. The acquisition of Akcea last year was a very important step in building out our commercial capabilities. We've been advancing a number of our wholly owned drugs, including eplontersen, APOCIII LICA, hopefully PKK LICA as well, and looking at the commercial opportunity and our ability to successfully bring those drugs to market ourselves. And we've been building internally our capabilities across a whole host of commercial functions that were previously not a part of Ionis. And as I said earlier, we really want to bring the excellence in R&D and extend that to excellence in commercial. And we think we're well along in that and look forward to sharing more of our strategies and our plans with folks as our drugs advance to the market.

Well, we have reached the end. Thank you so much for taking the time out to join us via video at our conference and look forward to chatting again soon.

Great. Thank you for having us.