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

Well, I'd like to thank TD Cowen for inviting Ionis to present today at their conference. I am Wade Walke, I'm the Head of Investor Relations at Ionis Pharmaceuticals. I would like to remind everyone that I will be making forward-looking statements, and I would encourage you to take a look at the risk factors that we've outlined in our SEC filings to get a better idea of the context. The Ionis of today is not the same company that I joined over 10 years ago. There's many key differences. Back then, Ionis was really focused on building an R&D engine, which still has today, one of the most astounding R&D engines I've ever seen. And -- but back then, they were focused on building a genetic medicines company that was focused on building a new platform technology for drug discovery, focused on antisense. And they did a remarkable job in that endeavor. I would just point you to SPINRAZA as an example of a blockbuster drug that came out of that effort. But back then, we were really focused on a partnering strategy that would help us to develop that technology and our pipeline. Several years ago, when Brett Monia took over as CEO, he said it was time for the company to pivot to becoming a fully integrated biopharma company. And those are the goals that he set out for the company are aligned with that strategy. And these are the strategic priorities that he laid out back then. So we wanted to deliver on an abundance of genetic medicines to the market, establish an integrated commercial organization, expand and diversify the reach of our technology platform and the fourth one was really to support those other 3 goals. Was to strengthen our financial foundation so that we could support our strategic priorities. And so far, we've made good progress on these goals. Last year, in our pipeline, we reported positive pivotal data from the eplontersen Phase III study that supported an NDA filing at the end of the year, which we just announced this morning, was accepted by the FDA with a standard review and no ADCOM required. So we're very excited about the progress we've made on that program. We also -- last year, olezarsen, our drug to treat patients with severely high triglycerides was given fast track designation for FCS, and we expect to report Phase III data in the second half of this year. Donidalorsen had remarkable data last year in Phase II that supported an emerging profile that makes it look like it's a potential best-in-class treatment, prophylactic treatment for patients with HAE. And we continue to build on our commercial infrastructure so that we could be ready to launch these 3 drugs. We're co-commercializing eplontersen with AstraZeneca, but for the other 2 drugs, we're independently launching those commercial efforts on our own. And last year, we completed 2 key strategic financial transactions that help support the investment that we're making this year and over the next several years in these late-stage programs and in preparing to commercialize these programs. The majority of my presentation today is going to talk about these 3 near-term commercial opportunities; eplontersen for patients with TTR amyloidosis, Olezarsen for patients with severely high triglycerides and donidalorsen for patients with hereditary angioedema. Eplontersen, as I just mentioned, is getting close to a potential approval. And we estimate for this particular indication that there's a multibillion dollar peak sales potential. For Olezarsen for patients with severely high triglycerides, where we estimate that there is a peak sales somewhere north of $1 billion. And for Donidalorsen, we estimate peak sales here greater than $500 million. So all very attractive commercial opportunities. First, I'll talk a little bit more about eplontersen. So eplontersen is our drug designed to treat patients with TTR amyloidosis. And TTR amyloidosis is caused by the misfolding of the TTR protein, which deposits into different tissues like nerves, cardiac tissue, GI track. And when these deposits occur, they cause damage to those tissues. So when you get deposits in peripheral nerves, you get polyneuropathy. When you get deposition in cardiac tissue, you get heart disease, cardiac failure. And so the indication itself is one indication, but it manifests in 2 different ways. So you see primarily either polyneuropathy and sometimes you also see a mixed pulmon-neuropathy and cardiomyopathy phenotype or you see principally a cardiomyopathy phenotype. And the way that it's divided up is that you see the vast majority of these patients fall into the cardiomyopathy indication. But overall, combined, we estimate that there's about 500,000 patients worldwide.  We're very excited to be partnering with AstraZeneca to commercialize eplontersen because we get to combine our industry-leading expertise in RNA therapeutics and some experience that we have in treating TTR polyneuropathy patients with AstraZeneca's global resources and reach, especially when it comes to cardiovascular disease. Last year, we presented data from the pivotal study, where we saw eplontersen show a very compelling competitive profile. There was robust and consistent reduction in the TTR protein, which again is the cause of the disease. Where we saw a greater than 80% reduction in patients treated for 35 weeks. We saw a highly statistically significant, clinically meaningful improvements in neuropathy and also in quality of life. And we saw a very favorable safety and tolerability profile. The clinical development program for eplontersen is pretty comprehensive. So recovering both the polyneuropathy patients and the cardiomyopathy patients with 2 different pivotal studies. In polyneuropathy patients, we have the NEURO-TTRansform study, which is a study that read out last year with its 35-week pivotal endpoint. And we have additional 66-week data that we're looking at that we plan to report this year. As a matter of fact, in the first half of this year, we plan to report more data from both the 35-week analysis and the 66-week analysis. And we are on track for additional ex U.S. filings this year as well. In the case of the cardiomyopathy patients, we have a Phase III study called the CARDIO-TTRansform study, and this is lining up to be one of the most comprehensive studies to date in this patient population. We have, I think, somewhere around 1,400 patients that we're enrolling in this study, so will be one of the largest studies in this patient population. And it's got a variety of subpopulations within this. You've got patients who are on tafamidis, which is the TTR stabilizer and patients who are naive. And you've got hereditary patients who are more severe as well as nonhereditary patients. So it's a good mix of patients in this study. We adjusted the study a couple of times in order to reach the goals that we're trying to get with the study.  We noticed that there was some emerging data coming out that patients these days with cardiomyopathy, TTR cardiomyopathy, we're getting diagnosed earlier and therefore, were less severe in their disease, and these patients were coming into our study with less severe disease. And so we needed to adjust the study to compensate for that. So we expanded the number of patients we are enrolling in the study and lengthened the treatment phase of the study as well. We also took the opportunity to work to try and balance the number of patients who were on tafamidis versus the number of naive patients in the study so that we could get a fairly balanced mix of those patient populations. And we took the opportunity to see if we could increase the number of hereditary patients in the study. So with the adjustments we've made, we're making good progress on all of those goals. This particular study is on track to complete enrollment this year with data readout in the study in 2025. In addition to these 2 pivotal studies, we have additional profile enhancing studies that are ongoing or soon to start that will give us additional data such as imaging studies looking at the effects of cardiac structure and function. Next, I want to talk to you about Olezarsen, a drug to treat patients with severely high triglycerides. And this particular drug is looking like it's going to be one of the most effective ways to reduce triglycerides in this patient population. A lot of people, I think, have some misunderstandings about severely high triglycerides. Some people think, well, you just eat less fatty foods or foods that are lower in fat. But the reality is that for somebody like me, I can eat a cheeseburger with bacon, which I love, by the way, unfortunately. And my body can process those fats, those triglycerides. They don't stay very long in my blood stream, and they get metabolized or stored as they get older, they get stored a lot, it turns out. And for somebody that has severe high triglycerides, they don't have that capabilities. They have problem processing fats. So the triglycerides stay in their bloodstream for a longer period of time. And that can lead to a lot of complications. First of all, you have to understand triglycerides when they're carried in the blood are primarily carried by 2 particles. The first one is a Chylomicron particle, which is a large fluffy, low-density particle. And that can actually clog up capillaries around the pancreas and cause pancreatitis attacks, which are kind of like heart attacks, they're very painful and they can be fatal. The other particle that gets carried around, carries triglycerides around is an Apo B particle, which we usually associate with carrying cholesterol, so like VLDL, LDL, HDL, these are Apo B particles. So, when these Apo B particles get loaded up with triglycerides, they tend to stay around in the bloodstream longer. They're difficult to metabolize. And so there's a higher risk for cardiovascular disease because these particles get loaded up with triglycerides. And so these are the 2 main risks that people with severely high triglycerides have. They have a risk of pancreatitis and they have a higher risk for cardiovascular disease.  We're looking at 2 different patient populations for developing this drug. One is in FCS patients. This is Familial chylomicronemia syndrome patients. This is a rare genetically defined disease. There's maybe 1 to 2 per million prevalence. So not a lot of patients that-- These are patients that have extremely had triglycerides. A lot of times the triglycerides are 1,000, 2,000 mg per deciliter, normal is below 150. So they're like 10x higher than normal triglyceride levels. The other population is those that have severe hypertriglyceridemia or SHTG. And these are patients that have triglycerides greater than 500, sometimes they get up above 1,000, but they're often somewhere between 500 and 1,000. And these patients also have a risk for pancreatitis as you get above 500, your risk continues to increase. And they also have a risk for cardiovascular disease. So these are the 2 patient populations that we're studying in our clinical trials with Olezarsen. And although FCS is a fairly rare disease, SHTG is actually much more common, we estimate that there's more than 3 million patients with its SHTG in the United States alone. And that leads us to market estimates of peak sales of greater than $1 billion. So in our Phase II study with Olezarsen, where we studied a patient population that had moderately elevated triglycerides, somewhere between 200 and 500. We saw a 60% reduction in triglycerides. And we know that as we go into more severe patient population, those above 500, we'll likely see even greater reductions because we've investigated this pathway before. We know that in FCS patients, if we target the Apo C3 pathway, which is what all are some targets, we can get triglyceride reductions closer to the 80% range. So we know that this is a very potent drug for decreasing triglycerides in patients that have severely high triglycerides. In the Phase III program where we'll be studying the FCS patients and SHTG patients. We're also looking at doses that are 50 milligrams a month and 80 milligrams a month. So in the Phase II study, we just looked at 50 milligrams in the Phase III study, we'll be looking at 80 milligrams a month. And so we do expect to see even more potent reductions in triglycerides in the Phase III studies. Speaking of the Phase III studies, we have several Phase III studies, including one for FCS patients, and that's the BALANCE study. And that's the study that we expect to read out in the second half of this year. And then we have 2 Phase III studies, 2 pivotal studies for severe SHTG, severe high triglyceride patients. The CORE and the CORE2 studies are 2 pivotal studies, which we need for this larger patient population. And then we had the ESSENCE study, which is a study in patients with mildly elevated triglycerides at risk for cardiovascular disease. And this is really something that we're doing to fill out the safety database because we need exposure to a certain number of patients in order to fill out the regulatory filings.  Next, I'll talk about Donidalorsen. This is a drug to treat patients with hereditary angioedema, and studies to date have shown a very, very compelling profile for this drug as well. HAE is a rare genetic disease. It's caused by a mutation in the sein esterase gene. And that results in overactivity of this pathway that results in inflammation. You can see fatal swelling of the arms, legs, face and throat and it's unpredictable. There's no real way to predict when it's going to happen. And so it's very scary. We estimate that there's more than 20,000 patients in the U.S. and Europe that have HAE. And we estimate that there is peak sales for this drug would be somewhere north of $500 million. In the Phase II study, what we saw were rapid and sustained reductions in HAE attacks in patients where they were treated prophylactically with this drug. The Phase II study was a study that went out 17 weeks and after only 2 doses, we saw a 97% reduction in monthly attack and monthly HAE tax versus placebo. And we continue with this patient population in an open-label extension study and found that, that reduction in HAE attacks continued out to a year. So it's a very potent drug when it comes to reducing the attack rate in these patients. The other advantage of this drug is it's a low-volume drug that we could administer with a Sub-Q injection through an auto-injector. So it doesn't require a large volume or frequent injections. And we saw a very favorable safety and tolerability profile, even out to those patients that were studied up to 1 year. In the clinical development program, we have the OASIS Phase III study, that's our pivotal study, and this one is expected to have data readout next year. And then we have a [ SWITCH ] study, which is taking patients that are currently on prophylactic treatment and switching them over to Donidalorsen to see if we have similar or better efficacy and a good safety profile.  This slide lists basically all of our late-stage programs, our Phase III programs. I've already discussed the ones here at the top, the ones that we're commercializing. I did want to remind you that we do have a lot of partnered programs as well. And if you look at the bottom part of this table, you see that we have tofersen, which is partnered with Biogen, has a PDUFA date in April. So we expect potential regulatory decision on that program this year. This is a drug to treat patients with a genetic form of ALS called SOD1 ALS. We also have pelacarsen, which is partnered with Novartis. This is targeting a cardiovascular risk factor called Lp(a) which is in a large pivotal study and Novartis is running that study, and we expect data in that study in 2025. This program is very interesting because of the fact that it's the first drug really to directly target Lp(a), and it could be one of those mega blockbuster drugs in cardiovascular disease. So we're pretty excited about the potential of that drug. Bepirovirsen is a drug that we're partnered with GSK on and it's targeting patients with chronic HBV infections. The Phase III study, GSK just started that a few weeks ago based on very positive Phase II data that was reported last year in patients with chronic HBV. And there's another Phase II study readout this year that's expected where they're looking at the bepirovirsen in combination with Interferon. And finally, we expect Roche to initiate a Phase III study in patients with IgA nephropathy this year for our drug IONIS-FB-LRx. So in addition to the work that we're doing to advance our pipeline, we continue to innovate and advance our platform technology. Just recently, we further optimized our medicinal chemistry for our drugs for CNS applications. We've advanced a muscle LICA program into preclinical development. So we're expanding the number of tissues we can target. And we advanced a new backbone chemistry we call MSPA, which enhances the duration of effect of our drugs so we can potentially dose our drugs less frequently with this chemistry. Work is ongoing now that we hope will benefit drugs of the future includes solving delivery across the blood-brain barrier. So we want to be able to deliver our drugs systemically and get those drugs to targets in the CNS. Right now, we have to deliver them intrathecally. We're also advancing additional muscle LICA programs using technology and chemistry from our partner Bicycle Therapeutics. We're advancing new routes of delivery, and we're very excited about our new collaboration with Metagenomi, where we're combining our expertise in the oligo-chemistry space, DNA, RNA chemistries with Metagenomi expertise with DNA editing. That looks like an exciting future potential for expanding our platform technology. Our 2023 financial guidance reflects several different things. One is we continue to see good revenue coming in from both commercial and R&D sources. So our commercial revenue primarily comes from our royalties from SPINRAZA, which lately have stabilized in their sales this last year, and we expect that trend to continue. We also see multiple sources of revenue coming from our partnerships. So like Biogen, for example, is a big source of R&D revenue. AstraZeneca is responsible for 55% of the Phase III development program for eplontersen. So those are 2 big contributors to our R&D revenue. On the operating expense side, we see some increases in operating expenses as we move into the late-stage development for these programs. So we've got multiple programs. I just talked to you about 3 that are in 5 different indications right now. It's pretty extensive clinical development programs that are really at the peak of their expense stage because they're either fully enrolled or they're about to be fully enrolled. And so those expenses are higher, plus we're also building our commercial capabilities to launch these drugs. And so you'll see our operating expenses at the higher end for probably the next few years because of these expenses. Luckily, we have a pretty solid cash balance sheet. So we're estimating we'll have $2 billion in cash by the end of the year, and this will enable us to continue to make our investments in these programs as we lead up to commercialization of these products. These are the key value-driving events for the year. I've pretty much reviewed all of them. So just to summarize, we expect several regulatory decisions for tofersen, eplontersen and additional ex U.S. filings this year for eplontersen. Clinical achievements, where we plan to report, as I mentioned, week 35, week 66 data from the pivotal study of eplontersen in polyneuropathy patients. For Olezarsen, we expect Phase III data in the second half of the year. And for Donidalorsen, we expect to reach full enrollment in the pivotal study this year. On Phase III initiations, GSK has already announced their initiation of the Phase III study for the bepirovirsen in chronic HBV patients. And we expect Roche to initiate the Phase III study for IONIS-FB-LRx in IgA Nephropathy patients this year. I'll like showing this slide because it really gives you an idea of the value potential that Ionis is creating over the next several years. Ionis is really positioned to deliver a steady cadence of new approved products, and you can really see them start to stack up here over the years over the next several years. And mixed in here, you can see products with peak sales potential of over $1 billion, multibillion dollars, even mega blockbusters in the mix. And so to me, this is a really exciting time to be at Ionis because we get to see the realization of all of the R&D effort, all that drug development for all those years start to come to fruition. And several of these we're going to commercialize ourselves. And so to me, this is very exciting. I'm excited. I hope you guys are excited to for the next 3 years of what Ionis looks like. And with that, if we have any time, I'll take questions.

[indiscernible]

Yes. That's just an estimate for our peak sales. So the question is on Olezarsen for SHTG, what are the market potential, the estimate that we have is that for the total market or for the drug itself and our estimate of more than $1 billion in peak sales is just for Olezarsen. The other question is they're not symptomatic. So is there really a need for this drug if are people going to take it if they're not symptomatic. And I think the answer is that just like cholesterol, patients who have high cholesterol are asymptomatic, but cardiologists understand the need, and I think patients have been well educated on the need to keep cholesterol down. And we know that endocrinologists and cardiologists understand that having severely high triglycerides is bad. If you you've ever had a pancreatitis attack, you definitely want to keep your triglycerides down. So if you're at risk for pancreatitis that's definitely a motivator. But the physicians understand that there's a high risk, not only for pancreatitis, but for increased cardiovascular disease. And so having a tool in their toolbox that will allow them to actually get triglycerides down and control triglycerides. It would be, I think, a very useful tool that physicians would avail themselves of. And I think there will be a matter of educating patients as to the need to control triglycerides. But I think there's a big market opportunity because the current treatments out there have very little effect in bringing patients with severely high triglycerides down into an acceptable range.

Last question is total market in [indiscernible].

Total market. I haven't seen estimates on that. So the total global market could be quite large. Like I said, if you're estimating about more than 3 million patients in the United States alone, and you're looking at like a PCSK9 type of drug as far as pricing goes, then you can kind of extend that out and see what the estimates would be for the global market.

Can you provide perspective on Ionis [ or ] antisense or [indiscernible].

That is still in development. Like I said, we've partnered with Roche on that one, so they're taking the lead on that. So the study in geographic atrophy is still ongoing, and we haven't reported the data out yet. So obviously, once we have the data, then we'll be able to determine what the next steps are for that program. In the meantime, Roche is pursuing IgA nephropathy as another indication for that drug.

[indiscernible]

It's just triglyceride lowering is the pivotal endpoint for the FCS study and SHTG studies. Or not essentially show intensions speak about.

[indiscernible]

So the study is not powered to show a statistically significant effect on pancreatitis, but we are hoping to see potential trends. It really depends on the severity of the patient population that's enrolled in the study, how frequently those events occur over the length of the treatment period.

Was there a base plan or [indiscernible] ...

Yes, pancreatitis attacks at baseline were studied and patients coming into the study.

[ Yes, an average commercial effort because we... ]

Sure. So with P1Person, we're putting in a lot of effort for a lot of the field medical. AZ is taking full responsibility for the sales force in that area. So we have field medical teams. We have nurse practitioners that are supporting that -- And the field medical team has been out there for several years now, preparing the market. And so we've also had some experience in TTR amyloidosis in the polyneuropathy area for several years with a previous product. So we have a lot of that expertise already established. And I think with AZ, taking out of the sales aspect of it, plus they're going to have a lot of expertise to bring when we get into the cardiomyopathy patient population because of their expertise in cardiovascular disease. I think we're going to have the ability to really reach a lot of patients with ATTR amyloidosis. I think we're out of time. So thanks, everyone. Appreciate it.