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

Good morning, everyone. Thanks for joining the 22nd Annual Needham Healthcare Conference. My name is Jerry Stringer, and I'm one of the biotech analysts at Needham & Company. It's my pleasure to introduce our next presenting company, Ionis Pharmaceuticals. Joining us today from Ionis is Head of Investor Relations, Wade Walk. [Operator Instructions] So with that, we'll get started. Wade, thank you so much for joining us today.

Thank you, and thanks for having us here today. I appreciate being here.

Yes. So Ionis, it's been one of the leaders in developing RNA-targeted therapeutics for a long time. Just wondering if you could give us your perspective on the past, the present and the future of Ionis' ASO approach.

You bet. Happy to. I actually joined Ionis over 10 years ago and recently returned to the company. And I can tell you like one of the key differences of what the company was like when I joined back 10 years ago and where it is today, is that back then, Ionis was really focused on building an R&D engine, which is still has today as one of most incredible R&D engines I've ever seen. But in the past, Ionis was focused on building a new platform technology for drug discovery, focused on antisense, RNA-targeted therapy. And I understand a remarkable job in that endeavor. For example, SPINRAZA, which came out of that effort remains one of blockbuster drug. And Ionis' pipeline now has 7 Phase III drugs in 9 indications and many more following these. Many like tofersen for SOD1-ALS or pelacarsen for LPA-driven cardiovascular disease, has the potential to be the first drugs to treat their respective indications. But in the past, Ionis was really focused on a partnering strategy that would help develop that technology and our pipeline. That all changed a couple of years ago when Brett Monia took over as CEO. He decided that it was time for the company to pivot to becoming a fully integrated pharma company. And the goals that he set out for the company today are aligned with that strategy. Ionis' goals today are to deliver an abundance of genetic medicines to the market, establish an integrated commercial organization and expand and diversify the reach of our technology platform. And so far, we're making good progress on all of these goals. For example, we have 2 drugs with PDUFA dates this year, one with a Phase III data readout and several more with Phase III data readouts over the next couple of years. And we're preparing to co-commercialize our first drug, eplontersen with AstraZeneca followed by independent commercial launches with olezarsen and donidalorsen. And we've made excellent progress in building our commercial organization. And as a result, we're now well positioned to successfully launch all of these medicines. And with regard to the technology platform, Ionis has continued to innovate and create better and better RNA-targeted therapies over the years, and we'll continue to innovate. For example, last year, we took important steps to broaden and diversify our technology, including advancing programs using RNAi, muscle LICA program, so drugs targeting muscle and programs incorporating our novel MSPA backbone chemistry, which we think will give us the ability to dose less frequently. Today, we have CNS drugs in the clinical trials that are being dosed every 6 months and Biogen recently initiated a Phase I study with an SMN follow-on drug that utilizes advanced panels chemistry, potentially enabling long interval dosing. And then late last year, we entered into a collaboration with Metagenomi, an industry-leading -- industry leader in next-generation gene editing. And this has added gene-editing capabilities to complement our existing platform. We expect to tackle with all of these advances, more diseases, reach more patients and further strengthen our leading position in genetic medicines.

Great. Wade, You have a significant -- Ionis has a significant pipeline across many disease areas. And you did mention a little bit of shift in strategy once Brett Monia took over as CEO. Can you talk about the overall company strategy going forward for partnering programs versus keeping them in-house?

Sure. And it's important to note that the shift in strategy has just started over the last couple of years. So there's still a lot of programs that we've partnered in the past that are continuing to move through the pipeline. So a lot of the things that you look at as far as new advances in our current strategy are going to take place as the pipeline evolves and as programs come into the clinical development. But as we look at the overall strategy, on things that we plan to commercialize, really, our initial focus is on neuro and cardiovascular therapeutic areas. And you can see that from our pipeline is where most of our efforts are focused today. We have like 12 clinical stage drugs in our neuro franchise. Two of those are wholly owned when we expect to add several more wholly owned neuro programs in the next few years to that. In cardio, we have 6 clinical stage drugs in 8 indications, and we plan to continue going after cardiovascular risk factors that are produced in the liver as well as pursuing new drug discovery efforts enabled by our new LICA capabilities in different tissues. For example, LICA as the target cardiac myocytes will help us to get additional cardiovascular diseases. Looking further down the road, we plan to expand into additional therapeutic areas that will be enabled by advances in delivery to more tissues and our advanced chemistry.

And in terms of the more advanced programs in your pipeline, you have 3 -- rather consider 3 late-stage programs, key ones, eplontersen, and olezarsen and donidalorsen . Do you see these as sort of the key drivers over the near to medium term in terms of commercial or top line contribution to the Ionis?

Yes. I think you're right. Those 3 programs are important. I think pelacarsen is also an important program partnered with Novartis, but let's focus on those 3 eplontersen is getting close to potential approval, as you mentioned, for TTR polyneuropathy. We have a PDUFA date for that drug in December in that indication. And we estimate that for polyneuropathy and cardiomyopathy indications, we also have a second Phase III study ongoing in cardiomyopathy that combined those indications are greater than $1 billion, somewhere to the multibillion dollar peak sales potential. I think it's important to note that probably less than 20% of polyneuropathy patients today are currently receiving an approved therapy. So this is largely an untapped market and cardiomyopathy patient population is much larger. There's probably about 40,000 patients worldwide with polyneuropathy, but there's at least 500,000 patients worldwide with cardiomyopathy. So it's quite a large market. With olezarsen, this is for -- a drug for patients with severely high triglycerides. We estimate there's peak sales potential somewhere north of $1 billion. And this drug covers both FCS indication, which is a rare disease, about 1 to 2 per million. And also the larger -- much larger indication, the severe high triglyceride patient papulation, or SHTG, which we estimate has a patient population in the millions. And then the third one that I mentioned donidalorsen, that's for HAE patients. We estimate peak sales greater than $500 million with a patient population in U.S. and Europe of more than 20,000. So all of these really very attractive commercial opportunities. Of course, eplontersen were co-commercializing with AstraZeneca, but olezarsen and donidalorsen will be independently commercializing.

And so more on the eplontersen program. Obviously, the NDA for TTR polyneuropathy lets directly review U.S. approval decision in December of this year. Can you provide us with any updates on the review process and additionally, any updates on potential AdCom or additional data requests for that?

Sure. I can give you a little bit of info on that. We submitted our NDA based on the 35-week data in the study back in December, which we believe is sufficient for approval in U.S. In its acceptance letter, I think we had in March, the FDA stated that it had not identified any review issues and did not make any additional data requests. And the FDA also noted that it's not planning to hold an advisory committee meeting to discuss the application. So all in all, it looks like a pretty smooth, smooth sailing to the PDUFA date.

And also for eplontersen, you're set to report some additional data coming up or very soon, back to next week at the AAN meeting, can you set the stage for that data release, given that competitor has shown changes in mNIS+7 is it a fair comparison to [indiscernible] drug in terms of what you'd be looking for in terms of the treatment effect there. What is the threshold for success ahead of next week's stay release?

You bet. So we're very excited about the Phase III data, and we're excited to be able to present it in more detail at the AAN next week. As we noted in our top line press release, we're very pleased with the substantial number of eplontersen-treated patients that showed improvement in both the neuropathy impairments, that's the mNIS+7 and in the quality of life, the Norfolk Quality of Life assessment in the Phase III study. Eplontersen on demonstrated highly statistically significant and clinically meaningful improvements in both of those measures compared to placebo. And so it's -- I can't get ahead of the data and give you more details on that, but we are looking forward to present that data in addition to the -- to that efficacy data that we'll be presenting. We're also pleased that eplontersen demonstrated a favorable safety and tolerability profile, consistent with what we saw at week 35, which we reported on last year. And these safety data are very consistent with our other LICA drugs that we have in development. We've treated over 5,000 subjects now with LICA drugs. And we believe the results substantially support strength of our LICA technology. But together with all -- but together with the efficacy and the safety that we've seen so far and the attractiveness of a simple at-home self-administration using an objector, we believe, if approved, eplontersen will be an important and attractive treatment for a largely untapped and growing patient population. And in addition to presenting the data at AAN next Monday, we'll be having a webcast on Tuesday at 1:00 p.m. that will go through all those results in detail and answer questions. So I encourage everyone that's interested to watch that.

You also have the Phase III program ongoing in TTR cardiomyopathy for eplontersen. Can you summarize some of the changes to that trial that have been made? And what effects do you think those will have on the outcome or at least what was the rationale for making those changes to that cardiomyopathy trial?

Yes. That's a good question. We did adjust the study last year, and we did this because we saw some emerging data that indicated that TTR cardiomyopathy patients were getting diagnosed earlier. There's new less-invasive techniques for diagnosing patients now. And thus, they were being diagnosed earlier and coming into our study with less severe disease, and this is matched what we were seeing as we were seeing enrollment continue. And so we realized that we needed to adjust the study to compensate for the fact that these patients were getting diagnosed earlier and we're coming in with less severe disease. And so we expanded the number of patients we were enrolling in the study and lengthen the treatment phase of the study as well. So we expanded the study from 750 to 1,400 patients and we extended the study from 120 weeks to 140 weeks. And we also took the opportunity at this time to try and achieve a fairly balanced number of patients who are on tafamidis versus naive patients in the study. And also to look at -- see if we can increase the number of hereditary patients in the study as well. So with those goals in mind, our enrollment is going well, and we're making good progress on all those goals. And we do expect that will complete enrollment -- full enrollment mid-year.

And that was kind of my next question on enrollment. How is that tracking? And when can we expect the top line data? Any changes in that? And secondly, what type of data -- what will be announced at the top line data announcement?

Yes, it's a little ways out for the top line data announcement but obviously some outcome study. So it will likely be something along the lines of the primary outcome measure and also safety and tolerability for the top line. Hard to say beyond that at this point in time, if there'll be additional details beyond that.

And I guess just for your future question on the TTR market. Obviously, you have polyneuropathy, cardiomyopathy mixed patient populations. Just wanted to give -- ask your latest thoughts or the company's latest thoughts on how that market has evolved over the last 4 or 5 years? And how do you think about it in terms of market segmentation for each of those types of indications? And maybe what's your current thinking on the competitive landscape and what's going to play out well in the market in the long term?

Great. Yes. As I mentioned, polyneuropathy is the more severe -- I wouldn't say really more severe, but the more rare and genetically defined patient population with about 40,000 patients, whereas cardiomyopathy is much larger, includes patients with a genetic form and also wild-type patients who don't have a mutation in the TTR gene. And so that's probably about 500,000-or-so patients worldwide. And in both of these markets, as treatments become available and as patients -- it becomes easier to diagnose these patients. These -- you find this in several indications where the estimates tend to grow as you get good treatments and better ways of finding these patients. But that's the current estimate that we have. And like I mentioned before, it's important to note that a lot of these patients aren't on therapy right now. So there's still a large and growing market, and there's lots of opportunity for treatments for these patients. And so as we look at our drug, which is one of the silencer classes, where you get stabilizers and you got silencers for TTR. The silencer class look pretty attractive being able to completely eliminate or almost completely eliminate, I should say, the TTR protein that's circulating is the root cause of the disease and to be able to do that with a fairly simple at-home self-administration using an auto-injector, we think that's going to be an attractive treatment option for patients, especially patients who may be earlier on in their disease and so they're very active and working and like the attractiveness of a self-administered product. And for those -- even for those that are for the long in disease that maybe have difficulty getting out of the house or getting to a doctor's office, that could be attractive for them as well. With cardiomyopathy patient population, we think one of the advantages we have is that we have the largest study to date in this patient population. It's about twice the size of the next largest study and the size and design of our study allows us to analyze the effect of eplontersen in an important subgroups of patients, such as those with or without hereditary ATTR, those treated or not treated with tafamidis. And we anticipate this rich data set should enable physicians and patients and payers to make the most informed decisions for patients with ATTR cardiomyopathy. For both of these indications, we like having AstraZeneca is our co-commercialization partner by combining industry-leading expertise in RNA therapeutics, our deep expertise in ATTR, patient identification tools and rare disease marketing with AstraZeneca's global reach and commercial depth, I think we're uniquely positioned to penetrate and expand this largely untapped ATTR mark around the world.

Well, let's kind of shift to one of the other late-stage Phase III programs we have ongoing. And that's olezarsen. Can you provide us with an overview of both of the 2 Phase III programs that you have ongoing? First, can you describe both of these indications in a little bit more detail? And then secondly, what's the commercial opportunity for each of those indications?

Sure. So olezarsen is being developed to treat patients with severely elevated triglycerides. This includes patients with FCS, or familial chylomicronemia syndrome, which is a rare genetically defined patient population. And patients with severe hypertriglyceridemia, or SHTG, which is a much larger patient population. With FCS, there's probably 1 to 2 per million out there. So it's fairly rare. As you might imagine, there's a few hundred patients in the U.S., for example, whereas SHTG the estimate is that the patient population is in the millions. So that's quite a difference. Given the differences in the patient populations, the Phase III programs for each of these indications are also very different in design. So for example, if you look at the FCS program, we have a single Phase III study in FCS patients called BALANCE study and that was fully enrolled in the second quarter of last year and is expected to read out in the second half of this year. So launch preparations are already underway for that indication. So that's a rare disease type of -- obviously, of commercial opportunity. And then with SHTG program, there's 2 Phase III studies called the CORE and the CORE II studies in SHTG patients and a third study called the ESSENCE study, which is in patients with mildly elevated triglycerides and CVD risk. And that's designed to -- basically there to strengthen the safety database necessary for approval. And I think for the commercial opportunity, I mean, you're looking at an opportunity where there isn't really good treatment options for patients with these really severely high triglycerides, whereas we've seen by targeting the ApoC-III pathway in clinical studies that you can get anywhere from 60% to 80% reduction in triglycerides. So most of the currently available drugs can't get patients down into the target range, whereas when you can get 60% to 80% reductions in triglycerides, you can get pretty much all of the patients, even if the triglycerides are a 1,000 or 2000 mg per deciliter, which is extremely high. You can get those patients down into a good target range to put some out of risk for pancreatitis. Just to put it in perspective, normal triglyceride is usually less than 150 mg per deciliter. So this is a pathway that's been shown to be very potent when it comes to reducing triglycerides. And so we think we can have a very profound effect on the risk that these patients have with those very high triglycerides.

And on the FCS Phase III readout in the second half of this year, can you walk us through the trial [indiscernible] #1? And then walk us through the registrational endpoint for that one?

You bet. So the FCS Phase III study has a treatment duration of 6 months, and the primary endpoint is triglyceride lowering. And so we're looking, like I said, forward to that data readout in the second half of this year. It's about 66 patients enrolled that are genetically diagnosed with FCS. It's randomized 2:1. And we're basically looking for -- change from baseline in triglyceride levels at 6 months with another 6-month follow-up after that, but the primary endpoint at 6 months of treatment.

In terms of the ideal target product profile in FCS, what would be the percent change in trades that would put the drug in a good competitive position in the marketplace?

Well, as I mentioned, most of the currently available therapies when it comes to patients with very high triglycerides, they're actually less effective, the higher the triglycerides go. And so you might get on average around 20%, 30% or so reduction in triglycerides, which is just not enough to these patients to target. So really, anything greater than standard of care would be considered pretty attractive for this patient population. And we've already seen in -- with our previous ApoC-III drug that we could get in the 60% to 80% range in the Phase II study that we just ran with olezarsen, which was in only mild to moderately elevated triglycerides, we got a 60% reduction. We expect that reduction will be even greater in the Phase III study because, number one, we're looking at patients with much higher triglycerides. And number two, we're actually using a higher dose in that study that we're investigating as well. So we think that that's actually pretty easily achievable given the pathway that we're targeting. And so I think for us, we're feeling pretty confident in the ability of this drug to have a pretty attractive profile for these patients.

And donidalorsen, one of your other late-stage pillar programs for HAE, first set the stage for what the unmet need is in HAE. And how do you plan to position donidalorsen in the treatment landscape?

Right. Now unlike eplontersen, olezarsen, donidalorsen has an established prophylactic treatment. So this is really much more of a switch market when we're looking at donidalorsen. So we're really pretty excited about the Phase II data that we've seen, which shows that the drug is actually able to see given 97% reduction, I think, in monthly attacks versus placebo. This is granted, given the caveat, this is still a Phase II study. We still need to do the Phase III study, that's a pretty attractive profile. And that's with monthly dosing. I think the current standard of care doesn't even reach that level of efficacy with every 2-week dosing. And so we have the potential to have, again, a small volume, self-administered with an auto-injector treatment in monthly administration that can give a very attractive profile for HAE patients that we think that the HAE patients would like to switch to given the opportunity, assuming it's approved.

Yes. As you mentioned, the Phase III program is ongoing, in particular the Phase III OASIS trial, can you give us an update on how enrollment is tracking there and when we could see the initial results?

You bet. So we're actually on track to complete enrollment in the Phase III study in the middle of this year, which puts us on track to have data next year. And just to give a little bit of detail, it's the 84 patients enrolled 12 years and older, type 1 and type 2 HAE and the primary outcome for that is time normalized number of HAE tax over a 24-week period.

And what would...

By the way, really get 2 doses, I should say, 2 dose intervals 80 milligrams every Q4 week and 80 milligrams QA week, so basically monthly and bimonthly dosing.

And in terms of the monthly attack rate, what's the bar for success on that endpoint, not only clinically meaningful, of course, but what do you think is going to be needed for a potential commercial success?

I think if we see anything similar to what we saw in the Phase II study, we've got a very attractive drug. So I think that's what we're looking for.

Great. Very helpful. So in terms of -- you have -- as a vast pipeline, what are the top 1 or 2 mid-stage programs that you think will have higher value creating events over the next year or 2?

Yes. I don't want to leave that. I mentioned earlier, pelacarsen, that's Phase III program. [indiscernible] targeting cardiovascular risk factor called Lp(a), and it's in a pivotal study that Novartis is running, and we expect data from that in 2025. So that's not too far off. And that one is very exciting because of the fact that it's the first drug to directly target LPA and there's more than 8 million patients estimated worldwide to have an elevated LPA-driven cardiovascular disease. So that could be a pretty big market, pretty big mega blockbuster drugs and people are calling it. So -- and then to tofersen for SOD1-ALS patients has a PDUFA date next week, Tuesday, actually. So if that's approved, that would be the first and only disease-modifying therapy approved for genetic from ALS. And it would be the second RNA-targeted therapy from our pipeline to be approved for a rare and deadly neurological disease. So I think that really bolsters our platform when it comes to treating neurological diseases. One other I'd say is there's Ionis 363 for FUS-ALS, which also has a Phase III readout in 2025. [ Depaversin ], GSK just started a Phase III study and that's expected to have Phase II data from the B-Together study, which is a combo study with pegylated interferon and that's for HBV patients. There's others that I can talk about but our pipeline is pretty exciting, and we probably don't have enough time, but I'd say those are some of the ones that I think are interesting.

Yes. Very helpful. And also just in terms of the preclinical pipeline, what are some of the interesting programs that you see there? And are there 1 or 2 that can enter the clinic over the next year that you think are most exciting.

You bet. We don't talk too much about our earlier stage programs because we have so much going on in the late-stage and mid-stage pipeline as well. I'd say we probably don't have time to cover all of them, but I think there's several in there that are coming along that I think are pretty interesting in the neurological disease space. Like there's one for prion that's coming along. It looks pretty interesting. It's a devastating obviously, a disease that has a very rapid progression once it's diagnosed. So it's tricky. It's a tricky one to develop as far as a clinical development program, but one that could have a pretty major impact. There's several others, but I don't really want to get into them too much until we start the Phase I study. So I think we'll talk about those more once the clinical studies start.

Well, Wade, thank you so much for joining us today for the fireside chat. I appreciate you taking time to answer the questions. I also want to thank everyone for joining on the webcast. And have a good rest of your conference. Everyone have to good day.

Thank you.