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

Good afternoon, and welcome to Guggenheim's Fourth Immunology and Neurology Conference. My pleasure to host Onaiza Cadoret, EVP of -- and Chief Global Product Strategy and Operations Officer at Ionis; and Eric Swayze, EVP of Research. So welcome. Thank you -- thank you both for joining us today.

Thank you for inviting us. I appreciate it.

So if I could start with you, Eric. Sure. So the dosing array of news items over the last 2 months or so, maybe just for the audience frame us on the overall business -- sort of a business update from the company.

Yes, it'd be great. We have had a pretty event-filled year. I guess, I'd just kind of highlight some of the later-stage programs and maybe a little bit of the technology advancements we've had, starting with eplontersen, which we had positive interim Phase III data out earlier this year. That's in for polyneuropathy, and we expect to file for NDA approval of that this year with our partner, AstraZeneca. That drug is also in Phase III cardio transform trial for cardiomyopathy and also for TTR cardiomyopathy. And there, we recently have expanded our trials, such that we think we now have the most robust and fullest Phase III program in cardiomyopathy, competitive space where we hope to be able to compete in a competitive market with our partners, AstraZeneca. We also had positive Phase III -- Phase II OLE data on our Donidalorsen asset for PKK in hereditary angioedema. That drug is in a Phase III trial -- ASOs trial with data expected sometime in 2024. And we have olezarsen, which is another late-stage asset. This a drug which lowers apoC-III that has -- is in 2 Phase III programs. One is for FCS, where we'll have data out next year. That's fully enrolled. And then we have 3 studies, all started now for a severe high triglyceride market, which is patients in the U.S. that are greater than 500 for this indication. Also announced our partner, Novartis, has full enrollment in the pelacarsen program, which is an LPA drug, lowers Lp(a), which is in a cardiovascular indication that's fully enrolled with 8,000 patients now that will be dated in 2025. I think last year our Tofersen program partnered with Biogen, where we had some positive open-label extension data after the Phase III program. The NDA has been filed and accepted by the FDA with a PDUFA early next year. So there's a lot going on at Ionis. And I suppose I should highlight some of the technology advancements since I'm a Antisense technology nerd like my first love. And there, we have made some new -- some advancements with the new backbone chemistry, which we think has got the potential to really improve the profile. The first 2 development candidates employing that technology have transitioned into development for neurology indications where we think one of the key advancements will be increased duration of effect, one partnered program, one Ionis wholly owned. We have our muscle LICA programs that we're moving forward, and we hope to have our first siRNA drug coupled with our bi-cycle muscle LICA program under development early next year. And then lastly, probably should mention the metagenome collaboration we announced this morning, where we've added gene editing as a new modality that we can utilize to attack the drug targets. So we view ourselves as a multimodality company and aspire to be able to practice the best approach, and we've added gene editing, targeting DNA as one of those approaches in addition to a more traditional ligament [ effect ] therapy.

I think you forgot to mention the IgAN and the HBV program, which moves into Phase III next year. We're losing count anyway. So maybe over to you on this. Over the next 2 to 3 years, Ionis will transition into being a commercial stage company. That's your forte. How are you planning for it?

Yes. No, it's exciting, right? I came on board just about 3 years ago when Brett took over as CEO, and he had the vision to take this very prolific platform and pipeline and bring forward medicines to patients ourselves. And we have the opportunity to kind of actually look at the entire portfolio and say, "Okay, well, where should kind of the plethora of focus be?" It'd be hard to take over 30 clinical candidates. So taking a look at the late-stage pipeline and what was coming behind it, it was pretty obvious that the 2 areas that are mainstay for us are cardiovascular and neurology. So we actually spent, like I say, those are kind of the 2 mainstays. That's where we're going to go for a commercial strategy perspective. And then the last area, we've left open. We said we're going to be a bit opportunistic. And if we see data that we believe is first-in-class, best-in-class, really kind of delivers on an unmet need and really surpasses what's available and differentiates from the competition. We'll go ahead and choose that one as well. So hence, our late-stage portfolio, we're looking at 4 indications over the next 3 years that we would launch. So the first 1 is in the co-commercialization with AstraZeneca for eplontersen for polyneuropathy. So we decided to do a co-co deal first, just to kind of -- for a couple of reasons, and I can go into it a little bit better, but it really helps us get some of our infrastructure build on and operationally get out there and really get that done in a co-co environment and then prepare and be really ready for doing it on our own for our next 2 launches, which would be for olezarsen. And as Eric just described for elevated triglyceride diseases and then the next wholly-owned maybe just around the same time, for hereditary [indiscernible] as well. So yes. So that's kind of the strategy. And then the build is like, the one thing to think about is you've got to build an infrastructure underneath all of this stuff as well. So we're already building. We've already built our medical affairs team, we've taken a lead on that, publication strategy, IoT's field medical's already out there. And all of the underlying systems that it takes to kind of be a commercial organization, it's your CRMs, your compliance, and then now we're looking at, what are the next stages of building for rare diseases? We'll do a lot of that in '23 and in '24, to be ready.

So it's a great segue into the HAE data, which came out open-label data over the weekend. Just frame the data, both the less frequent dosing that once every Q8 -- once every 8 weeks rather versus the once every 4 weeks? And how does that compare versus takhzyro?

Yes. So takhzyro has done a nice job. First of all, I would say in kind of growing the prophylactic market overall. It used to be very much of on-demand treatment, and you've seen a lot of growth there, close to billion dollar drug, it's the market leader. And they have 2 options available for patients. It's a Q2-week dosing and a Q4 week. The majority of their patients are in the Q2 week because that's where they get their peak efficacy. If you take a look at the data in terms of 2 aspects of efficacy, I think, that are really important to watch in this marketplace that are really important. First and foremost, it is the attack-free rate that the patients are on. And the second is, how quickly do you get there? And if you take a look at the attack-free rate for takhzyro, they're at 75% at their Q2 week. Our data just read out into early over a year period showing attack-free rates at the 98% range. And on the study period, virtually 99.6% rate. So think about it, we are well above the competition at the monthly dosed, and they are at the Q2-week dose and much below. So we surpassed with better efficacy, better tolerability, less injection site reactions and a much more convenient frequency of the Q4-week dose. So that is kind of where we're looking at. The other thing I would note in this data set that we had seen along, but we were very explicit about it in the poster that happened, that we released. That was yesterday actually, at the college meeting. And there, you can see that we get there pretty rapidly. So as quickly as one dose -- after one dose, we're at a 95% mean attack-reduction rate. At 2 doses, we are at 98%. So it's a very rapid onset as well, which in a prophylactic market is really important for us too.

Awesome. So in the HAE market, just to wrap that segment up, is that a concentrated prescriber base that you're dealing with?

Yes. That's a good question. So one of the nice parts about this is a really efficient model. So only allergists prescribe this. They are 1,100 allergists overall in the U.S. that prescribed HAE medications and half of them prescribed by 80% of HAE products. So we can go out there just to -- you could take a look at the Takeda and they have about 52 reps really, concentrated in calling in the entire United States. It's a very, very efficient model.

Awesome. So maybe switching to you, Eric. One of the programs of interest, which was not listed in your initial introduction is the Angelman program partnered with Biogen. At some point in '23, we expect to see some data from that. Sort of walk us through the challenges that you've had to address. and in general, the intrathecal administration of ASOs.

Yes, sure. We haven't given timing on when we'll have data, but we're excited, the program is up and running, and we're doing a good experiment with what we hope is a great molecule. Angelman, we think, is a great opportunity. We were invested in the space early and Ionis scientists were actually on 1 of the key publications that show that all it goes intervening in this pathway can upregulate the UBE3A gene, which is -- loss of which is responsible for the disease. We took a while to get a molecule we felt was good enough to develop for these patients. Unfortunately, it took us a while longer. We worked pretty hard. And our screening approach is to optimize the molecule for potency, safety and duration of effect. In this case, the transgenic model was a little tricky to get and took a while to get the system up and running. But we have what we think is a great molecule right now. We think hopefully it will look like our MAPT drug, which is also in partnership with Biogen, which has shown nice target engagement and great duration in humans and look forward to seeing if it's effective in Angelman patients. As for all about distribution. I think we'll have great distribution to the regions of the brain that are responsible for both, Alzheimer's disease with the tau program and also Angelman. We've characterized it extensively, understand the right volumes to use for intrathecal dosing, how the drug distributes up into the CSF of the brain, and how it diffuses down to the vascular space and accesses the brain region. So I'm pretty confident that we understand that, and hopefully, the drug will perform like 1 or 2.

And is my understanding correct that when you do have the data, you will have some degree of target engagement insights?

Yes, working with Biogen, we try and develop a good target engagement biomarkers for all of our programs. This is no exception. Very important to understand that if you're engaging the target, and then associated, make sure you're on the dance floor in the -- with the right dose and then hopefully, ultimately correlate that to clinical effects and clinical benefits.

Awesome. So you've also had a pretty interesting transition from, let's call it, the old Ionis to the more like a conjugated ASOs which are remarkably safe, based on the available data, much higher potency. Now you're moving into the MSPA backbone. Help us understand, what's driving that? And what are you trying to achieve there?

Yes. So basically, the MSPA backbone is something that we've been working on for a long time. And actually, my first task at Isis Pharmaceuticals when I got offered a job in 1994 of all times, was to try and make a different backbone than the ones we were using. I didn't very well because just did it now. And this was this internal quest to try and reduce the phosphorothioate content of the antisense molecules where we kind of have this love-hate relationship with phosphorothioate because it gives you good distribution properties, but it also has -- it's the weak point in the molecule where it's degraded. And so it's a barrier to a very long duration of action. And it also has a nonspecific protein binding component, which if not controlled well, can lead to side effects like immune stimulation. And so we think this backbone can address some of those and are really tickled to be moving it forward. We've shown in preclinical species that we can really use it to tailor the phosphorothioate content, reduce it, and that reducing it importantly improves duration. And so the first 2 molecules that enter development, and I talked about our neurology indications, we're stretching the duration frequency from 3 months to 6 months or 6 months to longer, what would be a big win for the patients?

Got it. So Onaiza, maybe on olezarsen. DG market is pretty big, right? 3-plus million patients, how are you planning to tackle that? And what do you need to show clinically, to make olezarsen as big a drug as the company thinks it should be?

Yes, yes. It's one of my favorites in the pipeline, I have to say. So you're right. $3 million just in the U.S. actually, right? So that's where kind of our initial focus is for triglyceride reductions. So first of all, we have a first-mover advantage. So we're well ahead of the competition. Our clinical efficacy, which is measured by a biomarker triglyceride reduction is an approvable endpoint. So we had several conversations with the FDA, and that is what's needed for these patients who are over 500 as they're exiting this intro. So severely elevated. These patient segments are -- there are at least 2 or 3 that are forming in the 3 million. So it's not like a single type of patient that you're going to see if you're over like 800 to 1,000, you've got like the segment of patients that have acute pancreatitis risk, and they show up in an endocrinologist office. And then you have the others who are highly elevated triglyceride in the show up in the cardiologist office. So what we're do right now is understand where the referral patterns are, and where they're actually percentage depending on the patient segment? And that helps us through just a lot of data analytics and predictive analytics to figure out where the patients are. So we get very, very focused in our go-to-market model. So our go-to-market model will be very specialty oriented and we're going to have a bit of good understanding of where the patients are. And then we're also going to use a lot of digital here. Omnichannel is really big new innovative capability in go-to-market. So you complement it with kind of on-the-street type of people as well with your salespeople and what you're doing digitally. And we're seeing it really effective post-COVID because a lot of physicians are virtually seeing their patients as well. So that's kind of how we're getting to this very large prevalent population. And it's not a single type of reason why they're showing up to get treated as well. So we're being very specific. Very excited. I don't think we need to get -- we need to get a fraction of the 3 million to reach our peak sales ambitions over here as well. So very, very exciting for us. We'll first launch with a small indication in familial chylomicronemia syndrome. So that is reading out next year and then '24, we don't expect to get data in this -- in the large severe hypertriglyceridemia market.

So in HAE, sort of indicated less than 60, who's on the ground? Should be enough to saturate that market. How does this compare to that?

That's a good question. We haven't sized the sales team. So I'll give you maybe an analog, and I used to work in specialty markets at Genentech. So they'll all have reps around the 150-ish to 200 range. And then if we complement that with digital, it could be plus or minus. But we haven't sized it yet.

Got it. So Eric, back to you. The cardio transform TTR study. Beginning of the year, it was 700. Now it's 1,400 after stopping at 1,000 for a few months. What drove that? Is it because, one, you're really chasing a survival advantage of the overall label? Or two, you have enough powering to pull off an interim in the 2024 timeframe and not wait until say, mid-'25.

Yes. I mean I think what really drove it for us was looking at the demographics of the patients and how they've changed over time. We think the patient landscape has changed. Patients are being diagnosed earlier, so they're less severe, and they're healthier overall. And so we felt like it was important to get the right demographics and the patients in for the right time and the right number of patients to have the best chance of showing a great cardiovascular risk reduction benefit, both on top of tafamidis and by itself. And I can let Onaiza comment on the commercial landscape while I try and get a drink of water before I [ jump ] into that.

Yes. So I think it was an AM actually. So we're excited about the design of the study because of the way that the market is moving from a -- it's a very dynamic market. So cardiomyopathy, again, is being diagnosed earlier. There are just better tools out there and they are not being diagnosed in the centers. So you're seeing it out in community cardiology. The bones [indiscernible] are really uptake measure of diagnosis. So you're seeing patients earlier. And you're seeing patients at different places in the community. Then there is a geographical difference, here in the U.S., a lot of the patients have been diagnosed on a stabilizer, just tafamidis. Outside of the U.S., tafamidis is still not reimbursed in very many countries. So you're going to get a lot of patients who are naive to any treatment at all. So the way that the study is going to be really important for us is we're taking the long game over here, right? We want to have a lot of data for the different types of patients that these physicians are seeing to walk into a U.S. position who already has a patient on tafamidis for cardiomyopathy. You're going to have to say, "What's my additional CVRR benefit on top of tafamidis?" That's what they're going to ask you. And so we're powering our study to be able to get some of that subgroup data and in other markets, it will be, "What are you doing? What can I see that it's naive to any treatment?" and we'll have that data as well. So that's actually a very rich, robust data set, along with hopefully some really good cuts on the different types patient [indiscernible] Class I, II, III. So we're really generating, I think, a very, very large robust study. And yes, if we overpowered it, great, we'll get results earlier, and we'll go a go to market a little bit earlier as well. But this was -- we're enrolling really rapidly. So it wasn't really a big shift in our timeline as a result of expanding the study of 1,400 patients.

And in your market research, is there any sort of pushback on a once every month subcu versus once every 3 months subcu?

Now this is going to be -- tell me what the cardiovascular risk reduction is for these patients. We've tested it in terms of dosing frequency. So listen, I always go, this is like efficacy, safety, tolerability and then the administration profile of the product. That's the way all markets really work. And then here, relative to competition, we do have an advantage. We're going to be in the -- they're going to be in the office, and we're going to be at home, self-administered, and that's so much higher preference rate than how you once a month or quarterly, it's actually showing up as virtually no difference at all. It's really about the auto-injector low volume in ease and at home is just easier as well. So really nice profile.

Awesome. So maybe, Eric, back to you, the LP(a) Horizon study is fully enrolled. Do you think you've got the right mix of patients there? Or given that it's the first study, it's sort of overweighted towards patients with 90 mg/dl or higher Lp(a).

Well, I mean -- so I certainly think we have the right mix of patients in the study. We're asking, do patients who have had cardiovascular events and have high Lp(a) respond to an interventional therapy that lowers their Lp(a)? And this is the key science question to ask in what is clearly a great genetic association, has great epidemiology, great human genetic support for this target. And we need to ask the question, does lowering it to goal in this patient population makes sense? And it's important to think about Lp(a) as kind of the threshold where you want to get them back to normal, not necessarily get them to 0 or lower is better. And we think that our drug will get 98% plus of patients in the trial and in the marketplace to goal. So we think it's a great-looking drug and a great program. Excited Novartis just got it moving really fast, and that it's fully enrolled with 8,000 patients. That speaks to the overall safety of the LICA [indiscernible] platform that we can ask this kind of question in this large patient population.

So it's sort of an interesting segue given that GSK moved a non-LICA program into Phase III in HBV, what's the immunologic rationale for moving a non-LICA program versus a LICA?

Yes. I think that one looks like it's probably a special case where perhaps the inflammatory profile of that particular molecule, of that particular oligo and the particular cell type is giving us an extra benefit. So GSK at ESAL presented a poster, showing and linking that cytokine activation profiles in patients with TLR-8 activation of that particular molecule. We actually ran in parallel with GSK, developed a GalNAc drug. It worked to lower S-antigen, but it didn't perform any better than the parent. And the key with the perversion was that we saw these patients, a fraction of the patients dropped undetectable levels of HBV DNA and S-antigen, which has been very, very difficult to do, and other S-antigen owing therapies really haven't accomplished that. So you can start to think of a dual mechanism rationale for that drug. But the profile of the molecule looks great and maintains some reduction in patients that 24 weeks after treatment and the latest update. And of note, GSK has done an analysis looking at patients of an S-antigen threshold of less than 3,000 PFU per mil, I think it is where they responded better, and had 16% and 25% sustained responses at the end of treatment. So I think it's an encouraging program. GSK is really fired up about it. They like this molecule. They are very committed and varying to HBV. And as you mentioned, they're starting their Phase III with that molecule next year.

So maybe the last minute or so, just quickly on the Bicycle program, going after what I believe is a rare cardiac indication.

Yes. We haven't discussed exactly what indication it would be, but it's a muscle-targeting program. We have interest in the bicycle program for both, cardiac indications as well as heart muscle indications. We've shown that they deliver drugs to both those muscle tissues and can reduce them and engage them. And we're looking at it broadly now and we'll have the first one, and then hopefully, we'll have many more. That's the idea of LICA is that they're amenable to use over and over again for different targets within the tissues that you can approach them for.

Awesome. So in the last seconds, then 2023, what are we looking at?

We've got PDUFA for 12%. We've got our 66-week data coming up for polyneuropathy and eplontersen. That's good. We have our balanced studies reading out for familial chylomicronemia syndrome. So those are all big catalysts for us for '23. What else we got? I'm not putting dates down.

And we continue to advance a multitude of Phase III programs to data read-outs on schedule and we think we have a great suite of later-stage assets, many of which are on our own commercial account, as we discussed earlier, and as we transition to a commercial company with Ionis label on the box. So that's where we're headed.

I appreciate the time. Thank you so much.

Thank you. Thanks for your time.