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

Luca Issi, senior biotech analyst here at RBC Capital Markets. And today is a great privilege to have Ionis with a fireside chat. Representing the company, we have Brett Monia, Chief Executive Officer. Brett, thanks so much for joining us. How are you doing today?

I'm doing great. Thanks, Luca. It's really, really great to be here, and thanks for the opportunity.

Fantastic. We have a long list of questions here, but maybe before I ask you about the individual programs, can you just talk big picture about what progress has the organization made over the last few months? And maybe most importantly, what's ahead here for Ionis?

Sure. Happy to. So I think it's really exciting today at Ionis. In our business, the biotech, focused on therapeutics. What's really important is -- to drive value is to deliver transformational medicines to the market over and over again in a sustained manner. And we're doing exactly that. We -- today, we have 7 medicines in Phase III development, really leading in our sector with such a rich pipeline. These 7 medicines are being developed across 9 specific indications, both rare indications as well as broad indications. Many of these are wholly owned by Ionis. Some are partnered. These -- this Phase III pipeline is mostly derived from our rich industry-leading -- what we think is industry-leading neurology franchise as well as cardiovascular franchise. And we're really thrilled to have reported great success already this year. We've had our drug QALSODY approved for a genetic cause of ALS just a few weeks ago. It's now launched with our partner Biogen. They're doing a great job. It's the first disease-modifying treatment for any cause of -- genetic cause of ALS ever approved. We're also very pleased to have reported very positive Phase III data for eplontersen at the AAN just a few weeks ago. That medicine is under regulatory review by the FDA with a PDUFA date of December of this year. We're prepared to launch with our inter-co commercialization partnership with AstraZeneca early next year. And we're planning to file for other regulatory approvals throughout this year and next year. So the late-stage pipeline as well as the mid-stage pipeline is really firing on all cylinders, and we're seeing strong potential to deliver more medicines time and time again in a sustainable manner this year, next year and for many years to come. So we're in good shape.

Fantastic, great review. Maybe if I may, on TTR polyneuropathy, you already talked about it, again, congrats on the impressive data. Can you just maybe highlight -- recaps on the highlights from that data and maybe how should we think about that data in the context of some of your competitors?

Sure. So the highlights of the data are this. The efficacy and the safety was everything we had hoped it would be. Safety was pristine, very clean, excellent compliance throughout the 66 weeks of treatment, and the efficacy is highly competitive. What we saw was, in our co-primary endpoints, a highly statistically significant benefit against both the measure of neurological disease progression, mNIS+7, where we essentially halted the progression of the disease compared to historical placebo. And we had more than 50% of the patients actually improve, so their disease actually reversed compared to their baseline values. And the other co-primary endpoint, Norfolk Quality of Life, it was even better. We actually showed a mean slowing reduction of disease progression in Norfolk that was below baseline, with 60 -- more than 60% of the patients improving compared to their baseline measures. And that's -- what that means is patients are actually reversing their disease. We also -- it's a very competitive profile from an efficacy and safety standpoint. We also hit on all 4 key secondary endpoints, including a measure of cachexia, which is really what these patients usually succumb to, wasting of disease, highly statistically significant. This is a market that is essentially untapped today. The prevalence for TTR polyneuropathy is estimated to be about 50,000 patients. It's a fatal disease. Far less than 20% of the patients actually have been put on treatment today. So this is a market creating. This is a market-building opportunity. We're well positioned to take advantage of this open market. We have great efficacy. As I said, the other advantages that we think that patients were really asking for that we can provide is the ability to -- for the patients to self-administer the drug themselves using a simple subcutaneous auto-injector, monthly treatment. The medicine is very stable. It's stable at room temperature. It's easy to use. And what we have learned from extensive market research as has our partner, AstraZeneca, with their market research, is that this is what patients want. They want the ability to control and manage the disease the themselves, not rely on a health care provider to make an appointment and to have their drug administered by a health care provider. Physicians, too. Physicians do not want the cumbersome setup of appointments and having to schedule and all that, and they have to hire staff for this as well. So we think this is a very competitive profile for a market that's wide open. And it also bodes very well for the larger indication, TTR cardiomyopathy, which is, of course, a much larger indication. As I said, 500,000 or so patients with prevalence worldwide and the safety and the efficacy, we think, is kind of read right through to that.

Great. Great. Super helpful. Since you already mentioned maybe TTR cardiomyopathy, that's a good way to maybe a pivot to cardiomyopathy. Can you just remind us the rationale behind your recent decision to upsize the Phase III and making it longer? What was behind that decision? And was that informed in any sort of form or shape by maybe an event rate that was a little bit lower than you originally anticipated? Or any thoughts there?

So what I just highlighted as what we think is a competitive advantage for polyneuropathy holds for cardiomyopathy as well. But in addition, a very significant competitive advantage for this very large market opportunity, TTR cardiomyopathy, is the design of our Phase III cardiomyopathy trial design. This is a landmark trial design. This is the largest trial that's ever been done in this patient population, the largest and the longest. We upsized the trial last year for several very important reasons: first, recognizing the fact that all investigational medicines that are in development today for TTR cardiomyopathy were powered, were designed based on the original ATTR-ACT study that Pfizer conducted for tafamidis. However, those patient demographics today largely do not exist today as they did back then. That trial was designed nearly a decade ago Based on our better disease awareness in this disease area as well as better diagnostics today than they were back then, disease awareness really didn't exist for TTR cardiomyopathy back when tafamidis was developed. Patients are being diagnosed with much milder disease today, right? And it's clear. It's now published by several KOLs in the field. And this was really what drove our understanding of the evolving landscape of patients. The demographics of TTR cardiomyopathy is really what drove us to say we need to resize this study to account for a changing patient demographics to ensure for a successful study outcome and to ensure for the richest data set that we can possibly get from this study, including subpopulations of patients. That's really what drove it, not so much about blinded event rates, Sure, we were tracking blinded event rates. That was early in the study, and those events usually really kick in, in the last third of a cardiovascular outcome trial. This has been very well received by the KOL community. It's been said that this is necessary with the changing demographics to ensure for a very successful study. What it also allows us to do -- has allowed us to do was to give us the space with the size of the study to be able to prioritize sites and slow down or stop enrollment in sites where tafamidis is used heavily as well as where diagnosis is happening in much milder disease. So we can -- we were prioritizing sites where disease awareness is less well as well as where tafamidis usage isn't available. And that's working exactly well. What we wanted to do in this study was to have about 50% of the patients naive on top -- that will be treated with eplontersen and about 50% of the patients in the study in which we're using eplontersen on top of tafamidis so that we can make claims when we get to the market, what added benefit does to eplontersen offer to patients on top of standard of care? And how does our drug eplontersen compare to tafamidis directly? And that's exactly the way it's playing out right now. So we're very pleased with the trial design. We think that, that is an added -- really an added advantage for eplontersen in this really, really big market.

Right. Great, great. Super helpful. I think investors are on the edge of their seats waiting for both the BridgeBio data, I think, in July as well as the AdCom for Alnylam. What do you think is best-case scenario versus worst-case scenario for Ionis into those events?

We're -- just to say, Luca, we are 100% focused on eplontersen, less on competitive market, especially in the stabilizers, which is a very different mechanism, acoramidis being a stabilizer compared to a silencer. But to try to answer your question for acoramidis, I think the readout's this summer, cardiovascular outcome trial stabilizer, not a silencer, I don't see a downside to whatever that outcome is. What we're particularly interested in seeing is -- whether the demographics, which is a milder patient population, which I just covered. The fact is that the information that now supports the fact that these patients with cardiomyopathy are of a milder patient population is actually reflected in the demographics of the acoramidis Phase III trial. So there's a lot of data supporting this. So what we're really interested in seeing is in the placebo group, does that milder patient population translate to fewer cardiovascular events, right? Because that would bode very well for our trial design. It actually provides added support for our -- the reasoning why we upsized our study as well. Of course, we'll be interested to see how a silencer like acoramidis compares to tafamidis, cross-trial comparisons with all those caveats, but that's really what we're interested in there. And as far as the APOLLO-B AdCom really, we don't see this as having any real readthrough to silencers that are in development with hard endpoints looking at cardiovascular mortality, cardiovascular events. This is -- this was a trial that was done as a functional readout, a short trial, 12 months, looking at a 10-minute or 6-minute walk distance. Very little readthrough because what's -- the standard of care today is outcome. Tafamidis proved a reduction in mortality. That's what you're going to need to show, not an improvement in a walk test. That's the bar. So very little readthrough there. I think the main focus will be -- is -- will be the clinical meaningfulness of the increase, which, I think, is like 15 meters compared to placebo, and how meaningful that is to a cardiologist, which will be interesting to hear the discussion. I think the other key aspect of that AdCom will be why the patients that were on tafamidis not do better on top of the silencer and stuff. So -- but those are small numbers. So I don't really see much readthrough there. We're focused on our Phase III program.

Got it. Super helpful. Maybe last one on TTR cardiomyopathy. How are you thinking about the commercial strategy there? It's my understanding, obviously, Alnylam is usually Medicare Part B versus maybe you guys are thinking more Medicare Part D. Walk us through what's your thinking there -- you and AstraZeneca's thinking on the commercial opportunity. And what's the market access strategy for that market?

The market access strategy is global. We think another big advantage for our program is to -- is utilizing the global strength, the presence of AstraZeneca commercially in the cardiovascular setting. Of course, cardiovascular -- I mean AstraZeneca is a powerhouse already in heart failure. We're already with AstraZeneca, Ionis and AstraZeneca in the field with our medical affairs teams, building the case for eplontersen. The polyneuropathy data is a great tool to be able to speak to KOLs and investigators about how great this program is, what's coming for cardiomyopathy. A lot of these patients present not in neurology offices, the polyneuropathy patients. They present in cardiology offices, nephrologists, GI docs and so on. We are having the strength of AstraZeneca already in doctors' offices talking about their heart failure drugs and saying -- talking also about eplontersen for this mixed phenotype patient population is a big, big advantage. Our drug, eplontersen, as well as our other drugs are -- will be classified as Part D drugs, right? However, regarding the IRA, the fact of the matter is that TTR amyloidosis is defined as an orphan drug disease for TTR amyloidosis. It's not been carved out in neuropathy versus cardiomyopathy. So it's one orphan disease. And therefore, it's not subject to maximum fair price negotiations. So we're free and clear there for TTR amyloidosis to not have any negative impact by the Inflation Reduction Act. But in fact, we actually have an advantage from the Inflation Reduction Act. One of the things about Part D drugs that were disadvantaged versus Part B drugs in the past was the out-of-pocket expenses that patients were subjected to until they got to a certain point, which could have been very expensive for Medicare patients, of course, very expensive for these patients. However, that's largely gone away with the Inflation Reduction Act, which makes our at-home, self-administered product by patients administering to themselves even more advantaged. The cap is at $2,000 annually, and that is easily manageable for -- by the manufacturer, with patient communities and so on. So we don't see any hindrance with the IRA effect. We see advantages for eplontersen.