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

Great. Thanks very much, everybody, for continuing on. It's my pleasure to be hosting Eric Swayze, Executive Vice President of Research at Ionis; and Holly Kordasiewicz, who runs their neurology research group. We have a lot of stuff to get into, a lot of programs. We can talk maybe a little bit about today's data release as well and any implications.

But do you want to maybe just kick it off, either Eric or Holly, and just talk a bit about your neuro pipeline right now and where the different programs stand?

Yes. I'd love to do that, and thanks for having us on, Paul. I think that a little overview of our neuro portfolio strategy and depth is probably a good way to start, especially given the news that hit the wires this morning regarding our C9 program. I think the depth of the program is very important. So we've been at this for a while. And really since we discovered that we could safely modulate gene expression in animals, the administration of oligos to the CSF. And that was really eye-opening for many of us because we realized we had a tremendous opportunity to do something that no one in the field had attempted to do before. And that's really attack a bunch of these severe neurodegenerative diseases precisely at the genetic level, looking at the root causes of the disease. And I really feel like we've pioneered in the space and have tested a lot of hypothesis in patients that no one was able to do previously. This includes SMN for SMA, which, of course, resulted in the blockbuster SPINRAZA; lower mutant Huntington in Huntington's Disease, with the tominersen program, SOD1 and SOD1-driven ALS. And now we've tested the C9 hypothesis in C9-ALS. I suppose the stunning success of SPINRAZA made this took easy to some. But truthfully, we understood that it was never going to be that easy. And even if you modulate the target in the right way, the biology is complex, and it's never a slam dunk that you're going to have a home run likely it was SPINRAZA. And that's in part why we partnered with lots of different partners and put down a lot of programs, and this helps us diversify our risk and has resulted in what I think is a really broad pipeline. Tominersen continues with Roche. Tofersen, as your last speaker alluded to, as a continuing program with -- partnered with Biogen, and they're continuing to look at the open-label extension and presymptomatic treatment ALS. We have a FUS-ALS program in a Phase II/III type of trial that's similar to SOD1-driven ALS and its pathophysiology. We have an Ataxin-2 program with Biogen in ALS that modulates TDP43 pathology, which may not be more relevant in C9-ALS and C9. We have a Biogen program in MAPT, where we'll be the first to test the lowering hypothesis of tau, where we have a drug that nicely lowers tau in the CSF. And if that's involved in the progression of Alzheimer's disease, Biogen is going to start Phase II and AD patients to test that hypothesis. We have multiple programs in Parkinson's disease, also partnered with Biogen. This is testing lowering of LRRK2 in alpha-synuclein and CNS. Both of these are genetic known causes of Parkinson's disease and could be broadly applicable. And we have our own internal programs. We have an -- an Alzheimer's disease program that is moving forward, targeting GFAP. We're going to start a [indiscernible] program later this year, and I'm sure you'll ask about our Angelman program as part with Biogen. So I think it's a pretty diverse basket of assets. And I feel like we have been and are leading the field with these innovative medicines. And we're -- as we're first to the clinic, we will have first results and first to testing hypothesis.

Yes. Yes. Okay. Great. Well, I'm sure there's going to be a million caveats, any sort of broad sweeping statement. But one thing, Eric, that you said that I thought that has really, really stuck with me was the difference between SMA and all these other dementias or neurodegenerative conditions is that SMA is a much more plastic system. Do you think that, that's a major reason why the success of SPINRAZA hasn't been replicated so far in ALS or HD?

Yes. It's possible. And I mean, certainly, it is a potential explanation. You also have a much younger patient who's more adaptable. And you have a disease where because of the unique biology of the SMN proteins and the SMN transcripts, you're able to replace the protein that's lost. And while we've seen good benefits in older patients using SPINRAZA as well, the most spectacular data was with the very young patients who were really just starting to have their disease or hadn't yet manifested their disease. And so you're adding the protein back before you have a problem. There is a difference if you look at pickup SOD1, where you have a fairly long-lived life, right? You have people in the middle age who are starting to develop ALS due to accumulation of the toxic protein and then you're taking it away and trying to get the system to revert. So I think it takes time. I don't think it necessarily means it won't work. I think it will take more time. And certainly, in a more plastic system then you could expect a quicker result.

Yes. Yes. Okay. If we talk about tofersen or tominersen, I know there are separate conversations. But can you just sort of talk about what you think the path could be for each of those drugs to showing more clear-cut clinical efficacy? And how hopeful should we be?

Well, that's a loaded question.

Well, I only ask loaded questions.

So I guess I'll talk to tofersen first. I mean, again, your last speaker covered this nicely. Biogen is running a presymptomatic Atlas study. They're continuing to collect open label data. The early access program is in place worldwide. And so -- and they're continuing to engage regulators. And so we're very encouraged that Biogen is doing that. I think they've been a great partner in this program and are hopeful that the program can stay alive and move forward. And I just want to highlight that there, the drug did what it was intended to do, right? We lowered SOD1 in the CSF. And I personally thought it was amazing how much it lowered neurofilament and those. It did everything it was supposed to do except decrease ALSFRS as much as we'd expected from the Phase I/II. So -- and that's what we're asking our drugs to do, right? And all these programs were saying, "Hey, you want to make a drug that modulates the genetic target, test the disease hypothesis and then design as good a clinical trial as we can given the label, we have at hand to figure out whether that hypothesis is valid. And SOD1 was an interesting one. And the -- it really looks like the end points in the disease onset let us arrive to me. And I guess I'll let Holly answer the Huntington question since she's been living Huntington pretty much her entire life.

Yes. So on the Huntington work, I'm sure, as you know, the released the data from the post-hoc analysis from the Phase II trial this year. And there's a group that looks like it's responding in a post-hoc analysis that doesn't pass statistical significance because it's not powered to do that, but it's the low age, low cap group. So it's exactly the group that you would expect could be benefiting from this kind of therapy in that it's early in a progressive adult onset neurodegenerative disease. So for likelihood of success, I think at this point, it's just a hypothesis to test. It is a hypothesis supported by data that we can't do statistics on. But it's a hypothesis and it's a hypothesis that makes a lot of sense. And so we're taking that forward and testing that is definitely has merit and is the right thing to do. If it will work is a different question. We'll need to do the study to find that out, but it makes a lot of sense.

Holly, does the fact that those patients were receiving this drug weaken the strength of that hypothesis at all to you?

What do you mean by that? I'm sorry.

I think those patients were receiving a lower -- they weren't the highest dose of drug where that data looked the best, right? With this genetic target like this does an inverse dose response, is that intuitive, I guess?

Well, it's a great question.

Well, in Huntington, that's been one of the key debates in the field, right? It was whether -- I mean you know we have a CAG repeat. You know that polyglutamine proteins are toxic. You also know that Huntington knockout is lethal, and we've had lots of discussions about whether lowering total Huntington or lower mutant Huntington is the best strategy and how much you want to lower Huntington and how fast and how far. So it's very difficult to disentangle the results of that trial. But you say you look at the data and the data we have, and the Roche says that if you have not so high dose and you treat less sick patients earlier and longer that they look like there might be a benefit there. And so I completely agree the right experiment is to run a Phase IIb study and try and dial in that question. And I also think that speaks to the fits and starts that we can expect to have when we're doing these things, and we're doing these things first and leading the field in that you might have the right hypothesis and get the dose and duration and treatment wrong in a clinical trial. And these are hard experiments to design. And that's what they're scientific experiments. And we're grateful for all the patients that are signing up for these scientific experiments to try and help make their disease better. But it's not necessarily always straightforward.

Yes, yes. Totally fair. What about on delivery? Are you working on innovations on the delivery side? I know that, that's something we've talked about, Eric, where relative to SMA, but named after the spinal cord, right, delivery to some of these whole brain diseases might be more difficult. What's your kind of view there and how that sort of relates into all the data we have to date?

Well, I mean, of course, the best distribution -- you can always make your distribution better, I suppose. But I also think that we have a slight disagreement of where our distribution sits. And so yes, SMA is named after the spinal cord, but there's more to the disease than just distribution to the spinal cord. You wouldn't lower neurofilament, which is produced by broadly across neurons in tofersen if you weren't hitting broadly the brain and the motor cortex and the cortical regions. You wouldn't lower Huntington or MAPT for that example -- for that. Or MAPT as much as we did in our clinical trials, if you weren't hitting the whole brain, right? The bulk of the brain is made up of the cortex, that's not in the spinal cord. That's up here. And we really think we're hitting the bulk of the brain and that our ratio of upper cord to cortex is about 1:1, and that's supported by our primate data, and we have had this debate multiple times. And we published this data and we now have autopsy data from our FUS program, which was recently published in Nature Medicine that shows target engagement of FUS broadly throughout the brain. So I think that we're targeting the bulk of the brain regions with CSF administration. And we'll give you that with Huntington, we're not hitting the caudate as well as we're hitting the cortex. And that we've been very transparent on that. So if you think that Huntington is solely a disease at the [indiscernible], which I don't, you wouldn't expect the drug to work as well as something like MAPT for targeting Alzheimer's disease.

Yes. Yes. Yes. Okay. All good. I appreciate it. Do you want to maybe briefly talk about MAPT before we get into the Angelman's program that I thought would be interesting to discuss? What data do we have to date, what are sort of the major questions in your mind going forward?

Sure. Do you want to take that one?

Sure. Yes. So the data we have to date is the data that we released last year, which is the target engagement data. So with just 2 doses a year, we can keep taus across for up to 9 months, if not longer, in efficient in the Phase I. It's well tolerated. It's moving into a Phase II trial that Biogen is leading in the second half of this year. So the big outstanding questions are going to be does lowering tau modulate the big one we all want to know.

Yes, totally.

And lowering tau the way that we think one should lower tau, which is inside of the cell by turning off all forms of the protein. And I just -- it's a hypothesis again that we're uniquely positioned to test. And MAPT is a good one. It needs to be turned off inside of the cell. I really firmly believe that to have an effect. So we'll see how it goes.

It seems like a much more compelling approach than an antibody extracellular tau. The question I'm sure you've gotten a million times, and I'm going to ask it for the millionth and one time is what gives you comfort in knocking down all forms of tau, given its role in the side of skeleton and keen on safety, neural film and things like that to date that kind of augment that comfort?

Yes. So we've looked at this really extensively in animal models, and we don't see any consequences of lowering endogenous tau and lowering tau levels. We only see the benefit in the preclinical models. And that's consistent with what's out there in the literature. That loss of function of tau, even genetic ablation of tau is safe and well tolerated. So of course, that's something that we'll have to keep an eye on and look at as we go into the clinic, but this is a very different scenario than some of the other programs we talked about like Huntington, whether there is embryonic recapitulation and Huntington tau is not that at all.

And there's other microtubule associated proteins. There's lots of -- there's some redundancy in that system.

Yes. Okay. Can you outline the design of the next study for MAPTRx and when we might get data?

So that hasn't been released or talked about yet. So just that it is planning to be started later this year.

Okay. All right. Sounds good. Well, I'd be really interested to talk about Angelman's. And again, Eric, your comment on neuroplasticity is what stuck with me and part of the reason why I think this could be such an interesting program, right? Hey, maybe genetic targets in pediatric neurology are a little bit easier. We'll see. But maybe to start it off, what did you make up? There's some potential proof-of-concept elsewhere from Ultragenyx. What did you make of that data? And I guess given concerns surrounding no placebo or whatever, like do you think that this is the kind of indication where you could show proof-of-concept like that, that quickly?

Okay. It would be need to do that...

It would be.

And I -- so like everyone in the field, I was intrigued by the data that they had. And -- but I do think it's -- it was -- it's too early to draw a definitive conclusions, right? And we need to complete a really robust study and get through all of the dosing we plan to get through to really ask that question. And I'm confident that the study that we have in concert with Biogen will answer that question. And comfortable we have a good drug to answer that question, and we'll see how it performs in the clinical experiment.

Yes. Do you want to maybe just kind of give a quick overview of the genetics of Angelman's? And I guess we talked about C9, or if there's the whole data function loss, a function in Huntington's, there's mutant wild-type. Like is there any nuance of the genetic debate in Angelman's? Or is it pretty clear cut what you need to accomplish?

I think it's pretty clear cut. So Angelman is a loss of function of the maternal UV [indiscernible]. And all of those what we're doing is restoring the function by targeting the antisense transcript to unsilenced the maternal B3A dose. So it's very reminiscent of SMA. You're upregulating something that's lost. And so I think here, it's pretty clear genetics and mechanism.

And we've shown very clearly that if you knock down that antisense transcript, you upregulate the B3A dose that's silenced. Mind-blowingly cool biology that's going on there, which is really nifty. I love the papers on that, but it's -- I think the biology of the disease is pretty clear. It's a loss of function disease and we're restoring the missing gene.

Okay. Okay. I know your competitor Ultragenyx has run into some tolerability -- or I guess not tolerability, safety issues with their compound that's narrowed their therapeutic index. Is there anything about this target that lends itself to being more difficult with an ASO from a chemistry or tox perspective?

No, we didn't experience that. I mean we -- it took us a little bit longer than we would like to make a drug truthfully.

Yes. Why is that?

And a lot of that was building the model. We firmly believe in having animal models of -- in vitro activity when we make our drugs because we think that gets us the best chance to understand the doses we'll need to optimize for the most potent molecule. And because of this antisense transcript, it's a little tricky to build the mouse truthfully and it took us a while. But that being said, this molecule looks to us, like many of our other molecules. And to me, the relevant comparator would be MAPT in terms of the profile, that's what we're shooting for with our drugs. And pretty happy with our -- the way our molecule is preclinically. But now, of course, we have to demonstrate that clinically.

Yes. Yes. Do you want to outline the design of the study, Phase I/II?

How much did we disclose?

I don't know.

I don't think we've disclosed...

I think there's some stuff in clinicaltrials.gov. But...

Yes. That's probably all that we've disclosed, and I know we haven't disclosed timing to data. And we're just getting started.

Fair enough. Okay. Any other CNS programs you want to talk about? Or can I ask a little bit about neuromuscular?

Well, we probably should talk a little bit about prion, which we're trying to get started this year.

Yes. Okay. Please.

And if you're interested in neuroplasticity, there's the Alexander program for Alexander's disease. Again, so there, we're targeting -- in the Alexander program, we're targeting GFAP, which is a toxic gain of function-driven disease that causes a leukodystrophy. And there, the biology is really interesting to me as well as that there's a bit of a toxic feed forward loop in the toxic aggregates of GFAP -- induced GFAP, which is now broken and causes the toxicity. And we're also targeting the astrocyte. So it's a different cell population for us, which we've shown we can target very well. So I think that's a neat program and has the potential to give some -- I mean if the preclinical data is supported in the clinic, it could be really neat. And Holly can talk about prion since she's been running that program since the beginning.

Yes. So prion, it's a really horrible disease. It's caused by misfolding of the prion protein, which becomes infectious and then misfold the endogenous of prion protein. So here, what we're doing is we're targeting the production of the prion proteins. We removed the substrate for the toxicity and for the spreading. Unfortunately, there's really beautiful animal models of prion disease, and we can show and publish really robust effects in all those systems. And then this is an extra cool program because given the strong ideology in the rapidly progressing nature of the disease, we're working with FDA and other regulators on explorating paths for accelerated approval, trying to use CSF prion protein as a surrogate endpoint for disease.

Okay. Great. And what's the timing there to POC?

So we haven't discussed timing anywhere yet.

Well, other than to say we're trying to get our program started this year.

Okay. All good. Okay. Great. Well, I want to ask you about muscle because this transference base has been pretty hot and you have multiple conjugation technologies that you've been working with and I thought I'd just be kind of interested in sort of get your perspective on whether or not some of these muscle like as rider as good as GalNAc and where sort of the state-of-the-art is and where Ionis fits in with the peptide work you're doing?

Yes. So well, certainly, the transferrin space has been hot. And I think deservedly so, the data that you can use a transferrin receptor 1 ligand to deliver a cargo into the muscle tissue is pretty strong and pretty compelling. It's been reproduced by lots of people. So that's one good sign. And we certainly have reproduced it. We've reproduced it with antibodies and with fabs and with other [indiscernible]. And you mentioned GalNAc, and that's exactly what I want to do with our program is to make transferrin receptor targeting as good as GalNAc. And that means getting the molecule engineered properly. And I've talked before about getting the size of the ligand down because if you have an antibody that's 150,000 molecular way conjugated to a 6,500 molecular way all to go, most all of the mass of your drug is the antibody. And if you have a GalNAc like ligand, it's maybe 15% or 20% of the weight of your drug, which gets the total dose down. And I think that will make a better drug and a better product. Now whether or not you can do that remains to be seen. The data we've shown with the Bicycle technology has really been great in that we had a small molecule ligand that binds as tight as the antibody. And it binds in a spot that's not competitive with transferrin, which we know will be a very bad thing to do and not binding there is a good thing, and it gets us in delivery into the muscle and the heart tissue and it works with all the modalities we've looked at. It works great with siRNAs, and it works great with ASOs. So we're enthusiastic about pushing it forward and getting some programs going with the best technology that we have. Of course, we have multiple technologies that you referenced. We're looking at the bicycle small peptides. We've got the technology with Arrow and our collaboration there using the Centurion, which are again smaller than antibodies and fabs. And we've also done work with antibodies and fabs and other platforms. So we're pushing broadly in the space to try and find the best ligands for each particular indication.

Yes. Okay. Okay. Great. Well, maybe just to round it off, the one other interesting question that I know a lot of investors are asking this space relates to payload. And for DM1, and I think FSHD, these are nuclear targets and there's this kind of question as it relates to, is an ASO, RNAi going to be better? I mean, I know I probably can guess what you think, but maybe you could at least talk a little bit more about why you're confident you can have a best-in-class offering in these spaces?

Well, so for DM1, there -- I understand the debate you're referring to. So mean there, you have a toxic RNA and the pathology of Alzheimer's disease is you have an expanded repeat, which is nuclear retained and sequester splicing factors in muscle line predominantly and then causes all a host of mis-splicing events. So if you then think about your target, it's in the nucleus, you'd like a drug that works there. And we know that ASOs work in the nucleus. SPINRAZA has to work in a nucleus because it modulates splicing. And we have lots of ASOs in the clinic that work in intronic region. So they have to work in the nucleus. And so we're very confident that our drugs work in the nucleus. Whereas with siRNAs, you can show that they work in the nucleus in certain systems, but I firmly believe that the potencies are shifting. And can't shift potency too far the wrong direction without starting to have trouble. So we'll see. And again, with DM1, the goal is to lower in the nucleus. So I'm confident that an ASO approach there should work if you can get enough drug in the target tissue. FSHD, there's a transcription factor that ultimately will be our target. So I don't necessarily think there's a new bit of retained issue there. And as far as the modality, we will identify the best modality and the best ligand to treat the disease, and our goal is to make the best drug at the end of the day agnostic to delivery mechanism and agnostic to modality.

Do you have any timing as it relates to having a muscle candidate?

Yes. We hope to have a muscle LICA candidate. We haven't given any specifics on what the drug will be or what the LICA it will be but start preclinical development this year. So that wouldn't be in the clinic, that will be preclinical development. But we're very interested in the space, and I love the technology and pushing the technology forward. So we're going as aggressively as we can.

Yes. Okay. Well, thank you, Eric, thank you, Holly, for the really interesting discussion. I appreciate it as always.

Okay.

All right. Thanks, everybody, for joining, and have a great rest of your day, Eric and Holly, and to everyone joining hopefully, I'll see in the next panel. So thanks so much.

Thanks all.