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

All right. Good morning. Thank you, everyone, for joining us for our next company presentation. We have with us Ionis, and it's my pleasure to welcome CEO, Brett Monia. Thank you, Brett, for being here. And just to start us off, a quick company overview and maybe to lead you a little bit. Ionis has a long history of being a leading antisense company. But could you go over the evolution of where you are now in the Phase III program, Phase III assets, the validation of the therapeutic targets and the LICA technology.

Sure. Thank you, Do. It's a pleasure to be here. Great to talk about Ionis. So Ionis, of course, for those that are familiar with us, we're the pioneer in the field we now refer to as RNA therapeutics -- RNA targeted therapeutics, using originally antisense -- the antisense platform to go after undruggable targets and develop the platform. And now we've expanded into RNAi in addition to ASO and now even DNA editing. So our vision is to be the leader in genetic medicine, DNA, RNA. We've tackled RNA. Now we're on to expand our capabilities into DNA as well. We have a rich, rich late-stage and mid-stage pipeline. We have 3 near-term commercial opportunities that we're really focused on today that are either in a co-commercialization arrangement between Ionis and a partner as AstraZeneca who are wholly owned by Ionis, and we're advancing those to market rapidly. When I became the CEO in 2020, I recognized that Ionis is a great success story, but to make it even more successful, we needed to focus on 2 things. One is to expand our technological capabilities, which I just touched on. And then the second was to move to full integration and bring commercial products to the market ourselves, to maximize the value for all stakeholders. The lead drug is eplontersen for TTR amyloidosis. That drug is currently in 2 Phase III studies, one for polyneuropathy indication and one for a much broader indication, the cardiomyopathy indication. We are very pleased with the week-35 interim analysis data for the polyneuropathy indication that we presented in September. That data was highly, highly statistically -- highly significantly effective. Very high statistical significance, excellent safety, tolerability, great efficacy. We're filing the NDA by the end of the year for the polyneuropathy indication. And that study will continue through its natural conclusion next year, week-66. And we're looking forward to presenting that data then. Our second drug is, that's a near-term commercial opportunity olezarsen, that's in 2 Phase III studies as well, wholly-owned by Ionis. And the 2 indications are both related to severely elevated triglycerides. One is in FCS, a genetic cause rare disease that has a genetic cause, that causes high triglycerides. And then the much broader indication severe hypertriglyceridemia. The FCS study is fully enrolled, and we'll read out midyear next year. And then the third is our HAE drug, which is in a Phase III study. It's a prophylactic treatment. The drug is donidalorsen for the prevention of HAE attacks. And our Phase III data was extremely compelling and our open-label extension data now supports the durability of the efficacy and the good safety we've seen for that drug. So we are planning to read that Phase III study out in 2024 as well. So the near-term commercial opportunities are moving along on track with and we're expecting a steady cadence of Phase III data for many years to come.

If I could just follow up on building Ionis into a genetic medicine company. The collaboration you have with Metagenomi, how does that fit into the Ionis R&D efforts? And what was the basis in the decision to use the capital allocation to go after that?

So, as I mentioned just a moment ago, one of the things that I felt was really important for Ionis to maintain and extend its leadership position in genetic medicine was to continue to diversify and expand our capabilities. And in biotech, if you -- I strongly believe and we do at Ionis that if you kind of just sit on your platform and let it play out, somebody is going to come along with new modalities and be highly competitive to -- against you or potentially could take you out with new modalities. We don't think that's the case in RNA therapeutics. We're very excited about our pipeline, which I already touched on, we're expecting to continue to deliver for many, many years to come. But with that said, there are emerging technologies that you need to pay attention to and we are. DNA editing is an area that we have been investigating for years now and deciding whether or not we should get in, and if so, how and with whom. It's a perfect complement to what we've done in RNA therapeutics to now expand our capability to DNA because many of the learnings and applications, and know-how that we've developed at Ionis over the years such as medicinal chemistry for nucleic acid therapeutics is directly applicable to improving the efficiency of DNA cutting, the specificity of DNA cutting. And we also have a wealth of experience in delivering genetic medicines to novel routes of delivery and formulations that we can also apply to maximize the potential value of DNA editing. So it's a move -- it's a strategic move we've made to really expand our capabilities and tackle more diseases in the future and to extend our leadership position in genetic medicine for years to come. We think it's the proper use of capital for Ionis because it will bring, we think it will, like I said, maintain our, and extend our leadership position in genetic medicine, which will be great value to all stakeholders. We partnered with Metagenomi after years of diligence on various companies, and we felt that they were the right partner. They are the right partner based on the capabilities that they're bringing to the table on DNA enzymes, their experience even in chemistry, in delivery. And also, we just had a great common vision on where we think DNA editing needs to go in the future.

Okay. Great. Moving to your Phase III programs. The nearest to the market is eplontersen. You said, you're on track for an NDA filing by year-end. The top line data that you released for the neural trial, you have shown us what the TTR reduction was. I've gotten some pushback that there's not necessarily a direct correlation between TTR reduction and the efficacy endpoints. How do you see that? And how can we look at how much eplontersen reduced TTR and think of it relative to mNIS+7.

So, the fact is that the efficacy for eplontersen in the week-35 with polyneuropathy data was -- is very attractive, highly statistically significant. And as we've been saying, we have a substantial number of patients that after 35 weeks of treatment actually improved in their disease compared to their baseline values in neuropathy as well as in quality of life. So we're seeing at week-35, a highly competitive -- highly competitive profile for eplontersen in efficacy with a pristine safety and tolerability record up to week-35. And we're looking forward to sharing the week-35 data next year, as well as the week-66 data next year. Now the final results of this study. And it's because of that, that we and our partner -- co-commercialization partner, AstraZeneca, are being so aggressive to file the NDA now, because we think it's a very highly competitive profile. TTR reductions were substantial and right there with the competitors and the amount of TTR that's been reduced, the mean values at the interim time point are right there. The data is very tight. And the reductions in the mid-80% range are continuing to go down. So we expect TTR to actually even be further down at week-66 when the study completes. At a macro level, clearly, TTR reductions correlates with efficacy, right? You have to have TTR reductions to have efficacy. And there are -- there's a compelling amount of data suggesting that the greater the TTR reductions you get, the greater the efficacy. However, it's not 1:1. There are patients that require less TTR reduction to have -- to show improvements. And there are patients that you have to get the TTR reductions down even more to show improvement. So, at the micro level, there's a little bit of variability there. But at the macro level, you clearly need to have good substantial reductions in TTR to show benefit. And at the end of the day, the efficacy we're seeing, we think, is going to be right there and be highly competitive.

That's completely fair. When we do get the 66-Week data, it's just going to be natural for us analysts to just compare it across studies to the competitor, which we all know we should do. But how should we think about the differences in study design when it comes to the polyneuropathy study, the difference in treatment duration and also, I think, there's differences in the components of mNIS+7.

Yes. I mean, we're focused on our study, much less so on competition. We think we have a great drug in eplontersen for polyneuropathy and for cardiomyopathy, and we have several advantages over competition. Study designs between us and our primary competitor are quite similar. Theirs is a little longer. It's an 18-month full data readout. Ours is 15 months. They have a slightly different mNIS+7 score. At the end of the day, I think we'll be able to compare this trial -- outcomes for these studies, and we're looking forward to it. But it's -- there aren't any silencing class we believe, will be the most efficacious class for both neuropathy and cardiomyopathy. And we like our drug. We like our program. We like our competitive profile. So we're looking forward to sharing the data. And if people want to compare across studies were the caveat that you laid out, happy to have them do it.

So let's talk about the cardio study that's ongoing. It's a much bigger population. And I think the market will be a lot more competitive as you have a lot more patients. Could you tell us why increasing the enrollment size of that study and increases its treatment duration or the study duration was the right now?

Yes. We think it was a required move, an essential move for this very large indication. I mean, this is a growing population that's estimated to be 500,000 patients suffering from TTR cardiomyopathy, a very high unmet medical need. The only drug approved today for this indication is tafamidis, of course, which is a breakthrough for these patients, but there's a lot of room for improvement. Patients are still suffering and dying from TTR cardiomyopathy. And again, as I mentioned earlier, we believe that the silencing mechanism will be superior to stabilizers at the end of the day for all indications. The clinical trials that are being conducted today in this space were uniformly based on the progression rates of the ATTR-ACT study, the tafamidis Phase III study. The powering assumptions were based on that. But the fact of the matter is just that, because of much better disease awareness, and much better noninvasive diagnostic methodologies to detect this disease, patients are being diagnosed much earlier in their disease. Therefore, they're coming into clinical trials, which is less severe disease on average. So milder disease is being detected and they're coming to those studies. Therefore, the powering assumptions based on ATTR-ACT no longer apply, right? So you really need to base your powering assumptions based on your own data, how you're enrolling? What are your patient demographics look like? What does your blinded event rates look like? What are KOLs saying? Publications are now coming out saying that patients are being diagnosed with milder disease. Therefore, if you're going to conduct a study with an investigational medicine, you need to take this into account. Based on all this data -- all the data that's come out in this space, as well as our own data, it was the responsible thing to do from a drug development perspective to increase the size of your study, increase the power of our study. It's not like there are fire alarms that are going off. Its responsible drug development, and you need to do this, it's in an outcome trial. It's not uncommon to do it in an outcome trial. So, we think that this is a strategic advantage for our program to actually increase the power in the study that we cannot just hit a p-value, right? It's not just about p-values, it's about the robustness of the data you get. We're going to have strong data based on the upsizing of our study in naive patients, patients on top of tafamidis. We are now increasing the number of hereditary patients in the study in addition to wild type. And we're also bringing in patients from globally around the world to have more and more patients in the study. And the last thing is we're getting a very good balance now by increasing the size of the study between naive patients and tafamidis patients. So we can have an equal patients on both so we'll be able to make claims to how good is eplontersen doing on top of tafamidis, as well as compared to naive patients. So that's why we did it, and we think it's a big advantage for the program.

It sounds like the additional analysis that you're planning for this study will have a huge commercial impact, especially if you're able to get label claims on them. Are they pre-specified? And what kind of role do you expect all these additional data to have in competing in this market where you lag your closest competitor probably by a year.

So, it is -- so the study does have -- is pre-specified to determine the outcome in naive patients, eplontersen only as well as on top of tafamidis. And we expect to be able to make claims that will reach our label on the benefit -- the CV risk reduction that we're going to get on top of tafamidis versus tafamidis alone as well as in naive patients compared to tafamidis. That's a big advantage because tafamidis is widely used and its usage is growing. And based on all the market research we've done over the last several years, physicians are going to want to know what data do you have and what data is in your label supporting your claims. That my patients are going to be safe when we combine them, as well as you're going to show better efficacy. And that's also going to be important for payers, right? Payers to be able to say, well, we're going to -- we'll reimburse your drug patient -- we're already paying for tafamidis, whether it's generic or not generic yet. What's the advantage of your drug on top of tafamidis for reimbursement? I think that's a big advantage to have that data in your label, so that you can actually point to it, speak to it when speaking with physicians and with payers.

That makes sense. The next program that could potentially reach the market is olezarsen. You have data in FCS next year, and that's followed by severe hypertriglyceridemia next year, which are 2 very different populations. Hypothetically, if you hit on both studies, how do you envision the commercial launch of olezarsen in such 2 different populations?

So, olezarsen like eplontersen is a LICA medicine is a LICA platform -- it's from our LICA platform, targeted delivery to the hepatocyte. Thousands of patients for several -- now many years treated with excellent safety and reproducible potency olezarsen is a drug targeting APOCIII for management of severely elevated triglycerides. And there's 2 populations, as you said, though, that we're targeting. One is the rare population called familial chylomicronemia syndrome, which have genetic causes of severely elevated triglycerides, which causes a high risk for pancreatitis, which can be fatal. That FCS study is now fully enrolled, and we'll read out, as you say, midyear next year, and that will be our next Phase III readout. And we're planning to file NDA into next year or year following, depending on the timing and launch it. Soon thereafter, about a year, 1.5 years after that, is a much broader indication called severely hypertriglyceridemia. This is not a rare disease. This is a disease that affects millions of patients in the U.S. They too are a high risk for pancreatitis, severe, which can be fatal. Our Phase III study in sHTG is going on in parallel, and that will read out about 1.5 years after the FCS read out. We're well ahead of any competition in this space. And the magnitude of triglyceride reductions that we're getting are unprecedented. And based on our Phase I and Phase II data with olezarsen and we expect that to translate in even better in Phase III because we're looking at the same dose as well as a higher dose in Phase III. As far as the launch goes, we'll start in the rare disease population and then we'll transition into the broader indication. With time, it gets us started. It gets us into this space -- the triglyceride space and gets us present in this space, and then we'll move into the much broader population when we launch for sHTG. And when it comes to pricing and that kind of thing, rare versus common, we'll work that all out. We haven't finalized what our plans are for rare yet. But certainly, once we get to the broad population, we'll be in broad pipe -- population like pricing at that time. It's a big, big opportunity that we don't think -- we think it's flying below the radar a little bit because there's some misunderstandings about triglyceride management and the need for new drugs. We're confident based on all the market research we've done with endocrinologists and cardiologists that there's a high, high unmet need for olezarsen then we plan to really hammer that home over the next year or 2.

And that will be your first wholly owned drug launch and commercialization on your own. Following that will be donidalorsen and HAE, you recently presented LOE data that had decent efficacy for every 8 weeks bimonthly dose. Do you see yourself advancing that schedule? It would be a clear step-up in convenience to the available therapies. And on the efficacy scale, it will be comparable. What are your thoughts on that?

So, when we -- we're in the midst of our Phase II study. We did a lot of market research on what kind of target product profile would be attractive to physicians and patients in this -- in the prophylactic treatment for -- for new prophylactic for HAE. And we laid out an efficacy profile, a tolerability profile and convenience profile. And they said -- and the results were that if you can hit that profile, that's a drug we need for our patients. We exceeded that profile in our Phase II data. And now that profile has extended long term in our open-label extension now that we presented it on last month up to a year of treatment, great safety and efficacy. Our focus is on monthly dosing. Our main competitor in this space, the leader in prophylactic HAE is actually most commonly used every 2 weeks, not every 4 weeks. And if they go to every 4-week dosing, they have a substantial reduction in protection against HAE attacks. Our 4-week data is based on the Phase II data with all the caveats across trial comparisons looks superior than either of those regimens for the current benchmark. And our bimonthly data in the open-label extension every 2 months data is also very competitive, not as good as monthly, but still very competitive with the competition. So we don't need bimonthly dosing. It is in our Phase III study. We're looking at monthly and bimonthly dosing. We think both will be highly statistically significant, and both will reach the label. But monthly will be a big advantage, a breakthrough for patients with HAE based on the convenience of monthly dosing, based on the tolerability of a self-administered at-home auto-injector pen, prefilled pen as well as unprecedented efficacy in reduction of HAE attacks with the vast majority of patients being attack-free for up to a year of treatment based on our Phase II data.

Unfortunately, we only talked about a few of your Phase III programs, and you have a lot more and an early and mid-stage pipeline, but we're pretty much run out of time. I appreciate your time here, and thank you for coming.

Thank you, Do. It was a pleasure.