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

All right. Welcome, everyone. It's Josh Schimmer from the Evercore ISI Biotech team. Pleased to welcome Brett Monia from Ionis Pharmaceuticals. I love Ionis. You've got such a powerful platform, such incredible biologists, and you're forging new ground into biology. And forging new ground comes with risk and some things work and some things don't work and you learn along the way. And Ionis is always patient with a little bit of my snarkier or cattiness when things don't go as well as planned. But there's always something exciting to talk about.

So thanks for joining us. Maybe we can start with tofersen. It's kind of one of the recent updates that didn't quite hit the mark, but it really did look like it came close. What are we -- what are you thinking in terms of the current data set, whether there's more we need to learn about this data set before we can make decisions as to whether it's fileable and/or approvable or whether we're going to need to wait for the earlier stage out for this trial to read out?

Thanks, Josh. Great to be here. Yes, tofersen for SOD1-ALS continues. We continue with Biogen to analyze the data from the Phase III VALOR study. Like you said, we saw some good trends favoring the conclusion that patients appear to be getting benefit from the drug. Certainly, the drug that was doing what it was intended to do. We got substantial reductions in the cause of SOD1-ALS, of the SOD1 protein, statistically significant reductions in a marker, a biomarker neurodegeneration, neurofilament light chain. And also a number of the clinical endpoints were trending in the right direction. I -- we're pleased at the fact that Biogen has reached out to the FDA and has engaged them and is in the midst of conversations on what potential next steps will be. In the meantime, patients continue in the open-label extension study. And more and more data is being gathered from that as well, which I think will be really important to further demonstrate potentially the patients are really doing better for this disease, where there's really no treatment options. It's hard to say, I'd say, at this point whether the existing data is approvable, fileable. Certainly, that's our goal, and that's Biogen's goal is to find a path forward for tofersen with the existing data. But I'd say it's a little -- it's too early to tell right now.

What are the time lines for the earlier interventional trial? When might we see data?

Yes. We don't have -- we have not put out time lines for that at this point. It's really just beginning to enroll. This is the study in patients with SOD1 mutations that are presymptomatic for ALS, but they have high NFL levels. So their entry criteria is based on them being monitored. And once they get to a point in which end result crosses a threshold, that will be randomized into the trial. It's going to be a difficult trial to enroll with respect to timing, as you might imagine, because SOD1 mutations are not just familial, they are also sporadic. So finding patients for ultra-rare disease, like this, could be a bit of a challenge, but it is enrolling, although timing of completion hasn't been put out yet.

Got it. How are you thinking about neurofilament as a biomarker now? It seems a little erratic in its performance. We're all trying to make sense as to what to do with it.

Yes. Well, there really is growing momentum in the field, in the neurology field for neurofilament as an important biomarker for measuring progression of neurodegenerative diseases, but not necessarily all neurodegenerative disease, particularly neurodegenerative diseases that are related to the destruction of motor neurons. So diseases like spinal muscular atrophy, where we demonstrated a very nice relationship between treatment with SPINRAZA and reductions in neurofilament light chain and clinical outcomes. And as I just mentioned, ALS, which is a disease of motor neuron destruction, so a substantial reduction in neurofilament light chain, we think, really is reflective of the fact that we're preserving neurons in this patient population. So although there's gaining momentum for this as a biomarker and potentially an approvable endpoint for certain forms of neurodegenerative diseases, there's still much more to do. But clearly, there's momentum and there's a lot of enthusiasm in the field to do more here.

Got it. How are you thinking about the lessons for the broader neuro portfolio? I guess it's always hard, right, for a readout like this and how much of the near miss was in trial, design and powering, how much was delivery, how much was target, how much was trial design? Like how are you -- what are the lessons here as you think about the rest of the portfolio?

A lot of lessons and there'll certainly be a lot more lessons learned as we continue to cull through all the data. I think the lessons learned apply principally to ALS drug development. I would say less so for neurodegenerative diseases. In general, they're all very different diseases, different causes, different symptoms, different clinical outcomes. For ALS, though, I think there is quite a bit of readings -- or learnings. I would say the first is be wary of potential for placebo effects in clinical -- in Phase II clinical trials, especially when you have really strong Phase II data. The progression rate in the placebo group, in the VALOR Phase III study was substantially less than that of the progression in placebos in the Phase II study, almost 5x slower. And whether that was a placebo effect or not, we won't be able to prove that. But certainly, the enthusiasm from the Phase II data was high and some of it could have contributed to that. And related to that is the second key learning is duration of treatment. As we know, placebo effects wane with time because the disease takes control and you can only get a placebo effect for so long. The original study design was -- well, the study design was 6 months, the randomized portion of the VALOR study, and that was well thought through based on all the data we got from natural history in the Phase II data. But in hindsight, it wasn't long enough. And had the patients been treated longer, we believe the open-label data is also supporting that, that the longer you treat the better. And we probably should have designed a longer trial in that study, which is why the open-label extension is so important. Another key learning, and not surprisingly, is early in the treatment disease. There are strong indications that patients are doing better earlier when you get to their disease earlier on in their progression. And then finally, the last thing you already touched on, you brought up briefly is neurofilament light chain. Neurofilament light chain in this study was clearly a better predictor of progression rates than the primary endpoint ALS functional rating scale. There was really no relationship in ALS functional rating, scale, progression at baseline and leading up to this randomization versus how those patients progress during the treatment portion of the study, whereas looking at elevations in neurofilament light chain correlated very nicely with progression rates. And again, that speaks to -- I think what's coming down the road is neurofilament light chain is an important predictor, an important marker for neurodegeneration for motor neuron types of diseases. We're applying these learnings to the rest of our ALS portfolio as we speak.

Got it. And what are the next ALS portfolio updates beyond one -- we should be looking for?

So there are 4 drugs for ALS in development that we have, 4 unique causes -- targeting 4 unique causes of ALS, 3 genetic and 1 for sporadic nongenetic ALS. The most advanced Phase II program in ALS today is targeting the most common genetic cause of ALS, C9ORF, ALS caused by mutations in C9ORF. That -- we're expecting data from that Phase II study next year, which then could lead to a Phase III trigger based on the results. For sporadic ALS, we have a Phase II study targeting ataxin 2. Although specific timing hasn't been put out for that study as to when Phase II data will be available, I think it's reasonable to assume that we'll get some data next year, if not very early in 2023, based on when we started that study. And then we have a Phase III study in targeting a genetic cause of ALS in progress due to mutations in the gene called FUS. That study is enrolling and it's due to read out in 2024. So that, coupled with the fact that we're looking forward to putting out with Biogen next steps for tofersen, presumably early next year, you could see a real steady cadence of news coming out from our ALS pipeline over the next few years.

And no reason to think the relationship with Biogen will change with Alexander [indiscernible] retirement?

Yes. Al is a great leader and a great advocate for our platform and for the collaboration, has been for years. He will be missed for sure. But the relationship is deep and strong at all levels, including at the top between the CEOs of the 2 companies. So we don't expect to miss a step in the partnership with Biogen, although we certainly will miss Al.

Maybe on SPINRAZA, and I will just flag again the incredible podcast by Brady Huggett, called Hope Lies in Dreams, about the history of SPINRAZA, it's just -- and the miracle of SPINRAZA. And I know there's a lot of life cycle management programs going on. Maybe just kind of take us through the different active kind of SPINRAZA enhancement programs, we'll learn more about those?

Sure. There is a lot going on with SPINRAZA. We and Biogen really believe, and we believe the data supports the conclusion, that SPINRAZA provides the greatest efficacy, benefit to patients for all forms of SMA versus any competitors that are out there today. And there are several post-marketing studies that are now underway to actually address that and to provide more data in support of that conclusion. The first is the DEVOTE study, which is examining higher doses of SPINRAZA, more than double the commercial dose. I think it's 28 milligrams versus a commercial dose of 12 milligrams. And that -- the intention there is to demonstrate even greater efficacy for SPINRAZA. And of course, we can do that because the safety record for SPINRAZA in the real world of nearly 12,000 patients on SPINRAZA today is impeccable. It's really quite safe and very well tolerated. We've actually cleared the random -- the dose escalation portion of that study. So we've now reached 28 milligrams, and now we're in the randomized portion, comparing 28 milligrams versus the commercial dose of 12 milligrams. And there may be some data coming out from that study late next year, if not early 2023. 2 other studies in progress are the RESPOND study, in which patients that are -- were on -- had a dose of Zolgensma, who were considered to be responding suboptimally, were then -- are now going on to SPINRAZA treatment. So that's not a controlled study, that's just the drug that patients will then go on to SPINRAZA, and efficacy will be measured to see if patients do better. That is in progress, and that's, of course, in infants because Zolgensma is only indicated in the Type 1 type patients. And then there is the ASCEND study, a similar study design, if you will, as RESPOND, only that is in patients that were previously treated with Evrysdi, Evrysdi plan, then go on to SPINRAZA. But in that case, the SPINRAZA dose they're treating is the high dose from the DEVOTE study, the 28 milligrams dose, whereas in RESPOND, the Zolgensma study, that's in the commercial dose. So those studies -- all 3 of those studies are progressing nicely. I'd also just take a moment to mention that we are very close to identifying and moving forward into the clinic a follow-on molecule to SPINRAZA that is projected based on all of our preclinical data to get us to 9 to 12 -- once dosing every 9 to 12 months, potentially annual dosing for SPINRAZA into the clinic. So keep an eye out for that. That should be coming very soon.

Right. Excellent. Maybe we can move over to the HAE program. You had some recent really promising data for that program. It's -- depending on how you look at it, it's maybe a bit of a crowded reasonably well-served markets. How do you think you can differentiate when you've got an oral therapy and a good IV therapy?

Yes. It's a great question. It's a great-looking drug. As you mentioned, the Phase II data was truly remarkable. Greater -- we were able to reduce attacks well into the 90% range in the mid-90% range. And between weeks 5 through 12 in the study, most of the patients were attack-free. And that takes a few weeks for the drug to get on board and reach steady state. This does look like it's the best -- the potential for a best-in-class medicine. And when we did our market research, which was extensive, this year following the readout of the data, it's very clear that both physicians, health care providers as well as patients want better treatments. They want more efficacy, better efficacy and prevention of attacks, so they don't have to live under the -- be anxious about a sudden, unpredictable attack occurring in opportune time as well as convenience. You're absolutely right. The market is well -- is being served pretty well right now, particularly with Takhzyro from Takeda. Takhzyro has shown reductions in attacks in their trials south of what we've showed in our Phase II study, about 80% or so in that range with every 2 weeks dosing and about -- in the 70% protection range in every monthly dosing. As I mentioned, we're in the 90% range in protection at these based on the Phase II data, and we are monthly or bimonthly. And that's the design of our Phase III study, we'll be looking at both monthly and bimonthly. So we think that our drug has the potential to offer a bit more convenience for patients that they desire as well as greater efficacy. And that's what we tend to prove in our Phase III study.

I'm surprised, I might have missed it, but I didn't see breakthrough designation for this product.

Yes. I mean, breakthrough designations is a bit of a subjective decision by FDA. You have to demonstrate enough substantial evidence of substantial improvement for patients. I think with drugs like Takhzyro and ORLADEYO on the market already, I do -- we do not believe that we would actually be granted that breakthrough designation. So we're sticking with a more traditional path forward, which is still a rapid path forward because it's a rare disease, single trial design, relatively small trial to get to a potential approval.

Maybe moving to the metabolic -- the cardiometabolic franchise. The recent PCSK9 data from your partner, AstraZeneca, look like you're getting PCSK9 and LDL levels lower than any other approach antibody or an AI cross trials. We don't have head-to-head. So it's -- that is a little speculative, but is there a way to explain why antisense would have a better effect profile than RNA [indiscernible]?

I think when we look at different RNA-targeted therapies, there's -- pretty consistently, we're seeing a molecule-by-molecule differences in how some perform versus others. And PCSK9 is an example where the molecule we came up with targeting PCSK9 does appear to be the best in class for lowering PCSK9 and correspondingly lowering LDL-C in patients that are on stable statins with cardiovascular disease. I do believe it's -- this particular molecule benefits -- benefits from the fact that it is a constrained ethyl chemistry, our Gen 2.5 chemistry, coupled with the GalNAc LICA targeting moiety. It's our most advanced Gen 2.5 LICA molecule in the clinic. And based on the data that was presented at the AHA, which is Phase I data in patients with high cholesterol, the more -- we've wrapped up Phase II studies as well. And AstraZeneca, our partner, plans to present that data in the first half of next year, Phase II data. We really believe that this is a best-in-class molecule for controlling PCSK9, LDL-C in patients that are -- can't be controlled with existing therapies and better than any of the PCSK9 inhibitors that are out there today, which we expect and aim to prove that, that will offer a substantial and important meaningful reduction in cardiovascular risk for patients.

And then a recent update on ANGPTL3 with the good lipid profile, but a little bit of a lower signal. It seemed like Pfizer was still kind of making up its mind. Any thoughts on that when it goes forward or not? And if Pfizer doesn't advance it forward, would you advance it on your own?

So yes, we announced the top line data from the Phase IIb angiopoietin-like 3 targeting study Vupanorsen in patients with high non-HDL-cholesterol, high triglycerides. And what we announced, as you know, is we hit high statistical significance at all doses tested on lowering the primary endpoint in non-HDL cholesterol, lowering triglycerides, lowering angiopoietin-like 3 and even LDL-C. So we knocked that out of the park. This study was intended to select a dose for Phase III, potentially to move into Phase III development by Pfizer in a broad Phase III program. And because of that, they really did some major dose ranging. They really looked at very high doses as well as moderate doses and early doses. And the purpose was to really determine what the maximum reductions in angiopoietin-like 3 that could be achieved, recognizing that some of these doses were going to be quite high and could produce some side effects. And that's what we saw at high doses. We saw some side effects on ALTs, for example. And that wasn't surprising because they really pushed the dose 7, 8-fold higher than our typical Phase III doses for our LICA medicines. But the lower doses and the mid-range doses were not different than placebo. What was surprising was the increase in liver fat that was observed in the study. And what we think we're doing is actually uncovering some new biology, targeting angiopoietin-like 3 in this particular patient population. And we don't understand the biology yet. And that's really the key objective for Pfizer going forward is to try to understand its biology, get through the data more and understand whether or not -- what's behind it so that they can better design potentially a Phase III study next year. So in biology, much more to learn there. As far as the drug, if they didn't go forward for Phase III and then they came back to Ionis, it's too early to -- I'd say it's too early to comment on that at this point, Josh.

Well, I think we covered maybe 10% to 15% of the Ionis pipeline, but some of them are the more important moving parts. Brett, thank you so much for taking the time to join us. Congrats on having so many successful moving parts. They're not always going to be successful in it. That comes with the territory, to your point, exploring and learning new biology. So all the best to the Ionis team in the year ahead and happy holidays.

Thank you, Josh. It was a pleasure. Happy holidays to you too and everyone else. Take care.

Thanks, everyone.

Bye.