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

Great. So good morning, everyone, and thanks for joining us for day 3 of Oppenheimer's Annual Healthcare Conference. I'm Justin Kim, one of the research analysts at OpCo and it's my pleasure to host this fireside chat session with Ionis Pharmaceuticals and CEO, Dr. Brett Monia. So thanks for joining us, Brett. It's great to have you here.

Thank you, Justin. Good morning. Good morning, everybody. Thanks for joining.

Maybe just to start off, could you just give us an update on where the company stands today and sort of what lays ahead in 2023 and 2024?

Yes, sure. Happy to, Justin. We, at Ionis, I am very pleased with the progress we're making across all aspects of the business. We're making great advances in technology. The pipeline is delivering. The late-stage pipeline is growing. And we're looking forward to a lot of updates on the pipeline this year and for coming years. And I'm very excited about our upcoming new commercial launches. 2022, we made great progress, and we're building on that momentum in 2023. Some of the events I would highlight to your question, I would definitely -- we are definitely looking forward to the Tofersen Advisory Committee meeting, which is next week on -- for SOD1-ALS, with a PDUFA date of April 25. Tofersen has a potential to be the first disease-modifying agent for any close of ALS, and that's a big deal. That is a really big deal for that field. We're looking forward to the Phase III data for eplontersen, the full data set, which is coming up in the first half of this year. We're looking forward to presenting that data based on the week 35 data that we presented at ISA last year. We have high confidence in eplontersen, very high confidence that it will compete in a very attractive market for Ionis. We're looking forward to additional Phase III data in the second half of this year. Olezarsen, which is being developed for a rare indication and a broad indication by Ionis wholly owned. The FCS rare indication is -- the data is expected in the second half of this year. And we're doing really well in enrolling the sHTG broad indication as well, and that's on track. We're looking forward to completing enrollment in some of our Phase III studies this year on time. Our eplontersen for ATTR cardiomyopathy is expected to complete enrollment in the largest study ever done in ATTR cardiomyopathy by midyear this year. Our HAE prophylactic drug, donidalorsen, is actually a little ahead of enrollment. We're looking forward to completing enrollment in the first half of this year as well. And the pipeline has expanded. I think the Phase III pipeline continues to expand, which is our other notable events. We've already -- our partner, GSK, has already initiated Phase III study for bepirovirsen for HBV, and that's off and running. And they plan to present an update, a Phase II update in patients with HBV in combination with interferon this year, but they're very excited about that. And Roche is still on track to initiate Phase III development for our Factor B LICA medicine for IgA nephropathy this -- the first half of this year. That will expand our -- our Phase III pipeline to 8 medicines to, of course, 10 indications, which I think is -- I don't know many companies that have a rich late-stage pipeline of that magnitude. And of course, we'll have several mid-stage pipeline readouts throughout the year as well as we always do. So just to say 2023 is shaping up to be a highly eventful year, and we're very confident it's going to be a very really good year for Ionis.

Great. Great. No, that's really exciting times for the company. And maybe just to start with what you had mentioned at the beginning around eplontersen with the recent acceptance of the NDA for ATTR polyneuropathy. Can you just talk to us a little bit more about potential launch there? How you see the current sort of landscape and what features eplontersen sort of make it exciting for the team to be launching into?

Yes. We're in a very -- we're very proud of the progress we're making with AstraZeneca in our first co-commercialization co-development partnership and we're very much prepared -- well prepared for the initial launch in polyneuropathy. And of course, for cardiomyopathy it is underway as well. We believe -- we know that a very small percentage of patients with TTR polyneuropathy are actually being -- are diagnosed and treated today. So this is not a switch market. It's really a market that's focused on patient identification to get a new medicine to patients as effectively as possible, and we are well positioned to do that, capitalizing on our experience in TTR amyloidosis, genetic testing and all of that with the strength of AstraZeneca globally. We have several features that we're really excited about eplontersen and it starts with efficacy, right? We're anxiously and excitedly anticipating the week 66 data in polyneuropathy. But based on the week 35 data that we reviewed last year, we think efficacy is a big win for eplontersen. So I'd always start there, right? We like the convenience of at-home monthly self-administered medicine with an auto-injector, very simple tap on the thigh or on the arm that based on our market research, the vast majority of patients and caregivers prefer versus some other setting. And we also believe that, as I briefly mentioned, AstraZeneca brings with a significant advantage, too. Remember, most of these patients with polyneuropathy are mixed phenotypes. They have significant cardiomyopathy involvement with their disease. And therefore, they're seen by all kinds of caregivers. They're seen by neurologists. They're seen by cardiologists. They're seen by GI docs and they're seen by others. AstraZeneca has a big -- has a very strong presence in cardiovascular disease. So they're already in the offices, seeing doctors and so on, and we're working very closely -- jointly with our medical affairs team to really get the word out that eplontersen is coming, and we're excited about it. So it's a market that's untapped. It's a significant market, and we think we have several important advantages that we think will reach a lot of patients -- will reach a sizable amount of patients for polyneuropathy.

Okay. Great. And you did mention how the team is really excited to see and sort of unveil the 66-week data. How important will inclusion of those data be to the commercialization process? Is this something that will sort of naturally lend itself to an sNDA submission? Is it something that with a publication in a medical journal might be sufficient to sort of aide that effort? How should we think about those data and how it would be leveraged commercially?

We are -- as you know, our NDA was accepted by the FDA with a PDUFA date of December 22, no AdCom is expected. So we're preparing to launch in the U.S. based on the 35-week data. As you know, Justin, many geographies outside the U.S. really want to see the full data set, the week 66 data set. With respect to including additional data beyond week 35 for the U.S. market, that will be a data-driven decision, but we're confident that we're not going to delay approval and launch by submission of additional data. What will be data driven will be whether or not a supplemental NDA will bring significant value to the label for the U.S. And if so, we can do that aftermarket authorization if we choose to. We'll certainly publish no matter what. But -- that will be -- whether we want a supplemental NDA or not will be really a data-driven decision, but we're confident in the 35-week data. And we're confident that eplontersen will be approved in the U.S.

Okay. Great. The eplontersen's application could also extend into cardiomyopathy as well. And can you just sort of update us in terms of the thinking on the CM plan, and you noted that the company is running the largest study there, how important do you think the breadth and depth of that exploration in that population will be towards launching eplontersen in that indication? And in what way do you see those launches as being sort of linked with polyneuropathy? And do you think there would be any insights with the potential initial launch in polyneuropathy as it pertains to cardiomyopathy as well?

Yes, I think they're important -- I think they're linked importantly. So let me start there and then talk a little bit about the design of the cardiomyopathy study and why we think that's important. We and AstraZeneca were planning to launch in the U.S. prior to the week 35 data, and maybe 1 or 2 other geographies. However, once we actually reviewed the week 35 data, we decided to launch more globally. And that's because of the strength of the week 35 data and because we think it's important to get out there as quickly as possible and to tell our story quite simply and to talk about our drug with neurologists. As I mentioned before, it's a mixed phenotype. So we'll be speaking with cardiologists and so on. We want to get out there. And therefore, it's kind of like step 1 before a big launch in cardiomyopathy. So I think it's important. It really sort of greases the skids and gets us moving into this space. As you said, the cardiomyopathy study that we're conducting is the largest, by far, really ever done in TTR cardiomyopathy. Enrollment is going very well. As I said, we're expecting to complete enrollment by midyear this year. This field -- this space has changed. The patient demographics have changed in this space since tafamidis' ATTR-ACT study readout, actually, since it initiated. Patients are being diagnosed with milder disease due to better awareness of the disease as well as better methodologies to detect TTR cardiomyopathy. And as a consequence, not everybody, but the majority of patients are being diagnosed with earlier on in their disease. Therefore, they have milder disease. Therefore, the powering assumptions and all kinds of assumptions that led to clinical trial designs based on the ATTR-ACT study need to be updated, right, because there's a different patient population than ATTR-ACT. Our study, we believe, is the only study that takes into account this milder patient population, and therefore, increases the problem -- highly increases the problem -- not only the probability of success but the robustness of the data. What the size of -- not only are we being able to take advantage of the changing patient demographics to ensure success for this study, it also allows us to balance the amount of patients that are naive to tafamidis as well as patients on tafamidis. And that's really important to have a robust data set for both of those subpopulations because in the U.S., the vast majority of patients are on tafamidis and more -- and a lot of patients outside the U.S. are on tafamidis. So physicians and patients are going to want to know how does your drug do on top of a drug like tafamidis? Why should I prescribe both? Do you have the safety data? Do you have the efficacy data? And of course, there are a lot of markets where tafamidis is not available, naive patients, and we'll have that data, too. So we have a very -- and since we upsized the study, I'm very pleased to report that we are getting a very nice balance between tafamidis use and naive patients in this study. We're focused on areas where tafamidis is less available. We're also focused on areas where diagnosis is happening later. So we have patients that are less mild in their disease, and it's also allowing us to increase the percentage of patients that are hereditary, hereditary TTR cardiomyopathy. So all of this is going to provide, we believe, the most robust data set in this patient population, which is important for the label. It's not just about a p-value, right? When you do an outcome trial in a population of this size, it's a very large patient population. It's also about the robustness of your data, what goes in the label, and we think we're going to have the richest data set for the label of anyone. So the study is going very well, and that's sort of the rationale. And everything we had hoped to achieve based on the upsizing of the study seems to be happening.

Okay. Maybe said another way, is -- do you see that the sort of trial and the scope as informing how to address sort of the heterogeneity of patients out there when you could be launching that maybe it's not just a naive classical patient, but rather a variety of mild, severe on or off tafamidis population that you -- physicians have questions that you could then provide answers for. Is that the right way to think about it?

Absolutely, that is a very -- that is the right way to think about it as well. Based on the upsizing of the study, we've been able to reach out and emphasize, prioritize sites where diagnosis is happening later, right? So think about it this way, New York Class I, Class II, Class III patients, right? We're going to have a rich data set, we believe, of all those classes. So we'll be able to actually speak to the potential efficacy of eplontersen in late-stage TTR cardiomyopathy, mid-stage as well as in early stage. So that's a contributor to the robustness of the data set we expect to achieve. Yes.

Okay. Great. Maybe talking about other sort of Cardiology programs. You did mention the readout expected in the second half of this year with olezarsen. Can you talk a little bit about the -- I guess, the expectations there and sort of what might the hurdle be for FCS and how that may differ, I guess, from broadly sHTG?

Yes, sure. So the FCS Phase III study enrolled fully last year. It's a 6-month primary endpoint study with 12 -- 6 additional months follow-up. And we're looking forward to that data reading out in the second half of this year, and we're preparing to launch in FCS. These are patients that although you referred -- mentioned cardiovascular, like the broader cardiovascular, these patients definitely suffer as due to sHTG patients from atherosclerosis due to severely elevated triglycerides. But the main focus is really on the severe acute pancreatitis events that these patients suffer from that can be fatal. And a lot of these patients have recurring pancreatitis, not once, but once they have one, they're going to have another one, unless they can get their triglycerides substantially lower. And that's true for sHTG as well as FCS. FCS is our -- will be our first independent commercial launch, so it's very important to us, and we're very much looking forward to that. FCS will get us -- we're well known by the patient adequacy groups based on our prior experience with WAYLIVRA in FCS, and we want to reinforce that our position in this patient population with olezarsen. So it's very important that we get out there as quickly as possible with our first independent launch. And similar to what I referred to earlier with polyneuropathy setting up cardiomyopathy for eplontersen, we believe that FCS sets up sHTG very well for our launch. sHTG is a large patient population, estimated to be millions of patients in the U.S. with triglycerides above 500. They suffer from pancreatitis events just like FCS patients do, which can be fatal, and getting ourselves in the door with olezarsen and FCS, we believe will set us up very nicely for sHTG 1.5 years later or so for that readout and launch. So we think it's very important. It's a nice stepwise transition or advanced into this patient population.

In terms of that transition, I mean, for sHTG, do you then see that it's sort of this event-based population that is going to be sort of the initial adopters of potential therapy that people who have these pancreatitis events are going to be sort of the ones who in the sHTG population are most likely to get on to therapy?

Yes. Absolutely. We've done a lot of market research here in sHTG. We referred to that population, you just sort of described patients that know they need to really want a treatment because they have already suffered from pancreatitis events or they've seen others suffer from them, and they're very scared that they're going to suffer from and be hospitalized due to a pancreatitis event, which again can be fatal. We refer to those patients as sometimes as early adopters, they're the ones waiting for olezarsen to reach the market. That early adopter market itself, we believe, is a $1 billion-plus market opportunity in the United States. What we will -- so that's our target, FCS as well as the early adopters in sHTG. And then, of course, we have more work to do to further educate and expand that and the principal prescribers for that early adopter patient population, not only -- not exclusively, but primarily are endocrinologists, not cardiologists, but there's a lot of early adopter cardiologists for sHTG. But that's been our challenge, is then to even further expand beyond that $1 billion U.S. market opportunity to then reach and educate those patients and physicians who are less familiar with the need to lower your triglycerides in or above 500. And then that's a market expansion opportunity for Ionis. So -- that's the strategy, and we're building towards that.

How does that sort of expansion happen between early adopters and, let's say, more cardiologists or people who are looking at triglyceride levels more than sort of events. Is that sort of medically driven? Is it clinically driven? Is it commercially with payer work? Like just wondering what are some of the puts and takes around how you get to that expansion and where you see the biggest lift, I guess?

Data and education. We will and are conducting several investigational studies to really drive home the value of olezarsen in cardiovascular disease, pancreatitis is well accepted. Of course, we'll have data in pancreatitis from our clinical trials as well. But we will conduct -- invest -- and are conducting investigational studies to make the case that patients will do -- will benefit from a cardiovascular perspective with olezarsen as well and education. And drug performance and get out there -- once olezarsen launches and is successful, to really get out there and educate the cardiovascular community to really help manage target levels that are expected by institutions such as the AHA and so on. And to just drive home the message that olezarsen is a safe and highly effective drug and patients need it to avoid not only pancreatitis, but also to reduce the risk for cardiovascular disease. So it's data-driven, it's drug performance driven and it's education.

Okay. Great. I just wanted to touch on also the -- your comments on donidalorsen and the -- maybe better-than-expected enrollment for the Phase III study. This program strikes us as one that could provide the most meaningful revenue for the company being launched on its own in the near term. I was so curious, how do you see the market in prophylactic HAE -- among prophylactic HAE therapies today and where donidalorsen offers something unique? And is that -- do you think that's sort of somewhat reflected by the enrollment patterns that you've been observing?

Yes. A different strategy than what I just described for eplontersen, where very few patients with polyneuropathy are actually being diagnosed or on treatment. But for olezarsen in FCS and sHTG, where there really are no treatments available today, Donidalorsen for prophylactic HAE is a switch market, right, especially in the United States. Outside the United States, prophylactic treatments are just beginning to take hold. So that's a market -- an open market opportunity that we'll capitalize on. But in the U.S., it's really essentially a switch market. Most patients are on Takhzyro but patients and physicians want better treatment options. And they really want better treatment options based on the gamut -- the full gamut. They want better efficacy. They want better convenience, and they want better tolerability. And we believe, based on very strong Phase II data, as well as now a very long, very impressive, I think, open-label extension data that -- in which patients have been treated for a year or longer, the donidalorsen offers to tackle all 3 of those aspects. We have efficacy in reducing HAE attacks that appears to be superior than anything on the market today or emerging into the market. So we checked that box. The convenience of a self-administered at-home low-volume administration once per month with an auto injector is very attractive based on all the market research we've done to patients. It's painless injection, so the tolerability and as I mentioned, very low volume is also very attractive. And we do believe that our enrollment is going well because patients are very much looking for new treatment options, and they're willing to try and switch even in a placebo-controlled trial because they know that they'll have the opportunity to move on to donidalorsen in an open-label extension study. So yes, we think it bodes well and supports our conclusion that patients are ready to switch with a deferred drug like donidalorsen once it's available.

And I think 1 thing that sort of caught our attention has been the monthly administration that has flexibility to be extended further, where if I recall, Takhzyro only has maybe 20% achieving or less the sort of monthly frequency. I'm curious in terms of the ability to maybe even extend that further, is that data, something that you see maturing from the open label extension? And how long do you think after sort of a primary readout might those data be available as commercially that could be a really compelling sort of data point, let's say?

We think the dosing flexibility that donidalorsen will offer as a monthly or potentially as every 2-month dose -- self-administered dose, is another significant advantage. As you say, Takhzyro -- the vast majority of patients on Takhzyro are being dosed every 2 weeks, smaller percentage every month, but if they go to every month, their protection goes down substantially from HAE attacks. Our monthly is stacking up to be highly comparable, maybe leaving a little bit better than the every 2-week dosing. However, every 2-month data, based on a small sample but a small sample from our open-label extension study looks comparable to their every month dosing. So we do have that potential convenience. We won't need to open -- necessarily open-label extension data to make a case for every 2-month dosing as well as every month dosing. Based on open-label data, we actually have an arm in our Phase III trial that has every 2 months -- and it's powered for significance for every 2-month dosing as well as monthly dosing versus placebo. So we should have real clinically controlled data for bimonthly dosing when the data reads out next year.

Have you done any sort of physician market research in terms of what that trade-off looks like in the patient or clinician community of what level of protection a patient or a physician might be comfortable trading off?

What we know -- we know that based on -- yes, we've done a lot of market research and monthly dosing is highly, highly attractive to patients, especially in an auto-injector self-administered low volume. What we do know, and you referred to it earlier, is that patients are willing to try monthly dosing with Takhzyro even though their protection could go down substantially to -- in the 60%, 70% reduction in intact range for monthly versus more in the 80% range for every 2-week dosing. So that kind of gives you a threshold for what patients will try. On the other hand, once they start getting attacks, if they're not fully protected, they go back to the more frequent dosing at least based on the experience that we've seen with Takhzyro. So that kind of gives you a flavor a little bit. We'll see what the data is, but mid-90% reduction in attacks with monthly dosing, we think will drive patients towards donidalorsen.

Okay. Great. Well, it seems like we've already run out of time. We couldn't get to all of the really interesting things the company is working on, but it's a pleasure to have you, Brett, and looking forward to all the progress.

Thanks, Justin. It was a pleasure participating. Take care. Have a great day.

Thanks, everyone.