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

Good morning and thank you for joining us at Guggenheim's 5th Annual I&I and Neurology Conference, I am Debjit and it's our privilege to host Onaiza Cadoret, EVP and Chief Global Product Strategy and Operational Officer at Ionis along with Brett Monia, Chief Executive Officer. Thank you. Thank you both for your time today. Brett, why don't you sort of lead us off with an overview of the company heading into a very data-rich period for Ionis over the next 2 years?

Sure. Happy to, Debjit and good morning, everybody. Thank you for the opportunity to be here and speak on behalf of Ionis. So we -- Ionis is right now on the cusp of really driving substantial value for all Ionis stakeholders today. Looking back to last year, we had a very positive Phase III data for eplontersen in TTR amyloidosis with polyneuropathy. This year, we had a drug approval, QALSODY, for SOD1-ALS, which represents another win in our industry-leading CNS oligonucleotide platform. And then very recently, we had additional positive Phase III data for olezarsen in FCS allowing, for supporting our filing for potential approval in the first half of next year. We've had tremendous late-stage positive readout setting us up for potential approvals for eplontersen in December this year for TTR polyneuropathy, setting us up for potential approval next year, assuming priority review for olezarsen in FCS. We're looking forward to new Phase III data for donidalorsen as a prophylactic treatment for hereditary angioedema in the first half of next year. And this really just represents the tip of the iceberg. Today, we have 9 drugs in Phase III development that are all moving on track. And so far, have all delivered very positive results from the Phase III programs and we're looking forward to more. And this is for both rare and severe indications like FCS and TTR polyneuropathy but it's also for very large indications like SHTG and [indiscernible] in cardiovascular disease and HBV and more. So the pipeline is delivering and is set up to deliver a steady cadence of new products to the market in the near term and for many, many years to come. The other aspect that I think is worth highlighting is the technology. We've really invested in the technology over the last few years since I've moved into the CEO role in early 2020, recognizing the fact that although we were leaders in the pioneering the creation of the oligonucleotide therapeutic space, as a result of that and not surprisingly, a lot of competition emerged over the years, including antisense approaches well as RNAi approaches. And one of the things I felt was essential is -- was to solidify our position as leaders in this space and actually to extend our leadership position. And we've done that and we are -- and is delivering now with new chemistries that are allowing us to get to very infrequent dosing in the CNS, semiannual and annual dosing, for example, systemically, every 3 months, every 6 months dosing. Agnostic to different mechanisms of action, antisense, RNAi and even we're now beginning work in gene editing as well using all the capabilities at our fingertips that we've established over the years for oligonucleotide therapeutics and applying it to optimize all of these platform indications, enhancing our delivery, right, opening up new organ systems, new tissues like muscle, skeletal muscle, cardiac myocytes [indiscernible] to the lung and also overcoming the blood-brain barrier for CNS applications using IV or subcutaneous drug administration. And then the -- the final thing that I'll mention, that really is a big step forward for Ionis that is set up to really drive substantial value for all stakeholders is that we're ready to deliver our drugs, build our wholly owned pipeline ourselves and deliver our drugs that we choose to bring to the market ourselves to commercialize, to drive value for the programs, for the drugs that we receive, that we discover, we develop and then to commercialize them ourselves and bring them to the market and we're prepared for our first commercial launches starting next year in our first co-co arrangement with AstraZeneca for TTR amyloidosis. And then our first independent launches for olezarsen for FCS and SHTG [indiscernible] hereditary angioedema and more and more coming after that. So we're very pleased with the progress we're making. And we're -- really think we're -- really, I think we're really great success as we have had this year, extending well into the future.

So I just want to spend another couple of minutes on the technology platform. The perception has been that silencing RNAs are always going to be better than ASOs, primarily because of the durability of response. But you just highlighted, you know, you have 6-month, 12-month durable -- durability in the CNS and maybe in the liver as well. So what was that transition to get from step 1 to step 2?

So in RNAi, sRNA approaches have been validated really in 1 cell type to date. That's the hepatocyte, where both single-stranded ASOs as well as double-stranded RNAi molecules work very well. The single advantage that RNAi molecules offer in the hepatocyte is durability. We think we have a good handle on the mechanism for the extended duration of RNAi versus single-stranded oligonucleotides. Single-stranded oligonucleotides are generally dosing monthly or every 2 months dosing now. RNAi, every 3 months dosing and there's thoughts that it could go longer than that but so far, there's no clinical validation for that. So it's a slightly longer duration of action. And that can have advantages in certain situations. But for the most part, it's not a big leap forward. It's not a big step forward, when you think about other advantages that a drug discovery program can offer. With that said and as I mentioned and you just highlighted, Debjit, we have expanded our capabilities in RNAi. It's very important that we take full advantage of all of our capabilities in drug discovery. There are more similarities, far more similarities in the ability in developing drugs using an antisense approach or an RNAi approach. There's far more similarities than there are differences. And we have the capabilities of Ionis that we've established for decades on through medicinal chemistry, manufacturing, understanding distribution, knowing how to deliver these molecules that are applicable to both ASO and RNAi. Our strategy is, today, when we're going after a target in a specific cell type, is to identify the very best molecule, antisense or RNAi with utilizing the novel chemistries that we have there that are useful for both approaches to maximize potency, tolerability, safety and durability. The other thing I'll say about getting out of the liver, if we think about the platforms outside of the liver, far and away, the antisense approach in the liver -- in the CNS today is far and away ahead of any RNAi strategy out there today. It is a fully -- an antisense strategy. It is fully validated with 2 commercial products on the market today, real breakthroughs for neurological diseases. SPINRAZA for SMA. QALSODY, the first ever disease-modifying treatment for any cause of ALS, demonstrating for the first time that ALS is a treatable disease, right? Right behind that, our 12 clinical programs in progress for broad indications like Alzheimer's disease, rare indications like Angelman syndrome and more and more to come. We expect to advance our neurological disease pipeline wholly owned as well as partner pipeline to maybe 13, 14, 15, 16 more by the end of the year next year. We have characterized in detail the ability of RNAi to work in the CNS using intrathecal delivery as well as in -- in comparison to ASOs and we don't see very -- any real advantages for an RNAi approach over an antisense approach but we're continuing to evaluate it. And our strategy is still, let the best molecule win when we're conducting drug discovery activities.

Onaiza, turning to you, your team will be launching 3 medicines over the next 12 months, roughly, each going into different channels, right? Maybe starting on the eplontersen side, how involved is Ionis with your partner, AZN on the PN -- upcoming PN launch? And how are you targeting the broader PN population? And how quickly do you think that bears fruits on the commercial side?

Yes. So I think maybe there are 2 questions in there. So the one thing I would say is that we have been planning for these 3 wholly owned or co-co products to be launched by Ionis when we changed the business strategy. And we're planning for like positive Phase III readouts and we're starting to see them unfold. So we've been always expecting that we would be in a cadence of serial launches, as I call it. And when you have that vision, then you prepare for it very measurably over time. So I would give you some confidence that the commercial organization is very much ready to launch all of these 3 indications that are coming in the next 18 months. The first one is polyneuropathy. It is a co-commercialization with AstraZeneca and what it's enabled Ionis to do, is really be the expert in rare disease and lead some of the commercial strategy with AZ, where they brin a lot of strength in commercial depth and reach. We bring a lot of strength in commercial rare diseases. And it's been very, very complementary on the strategy side. On the execution side, what it's enabled us to do is, we've been able to set up some of our commercial infrastructure, if you so want to call it, which is very leverageable across the other indications. [indiscernible] to systems, commercial operations, data analytics, compliance analytics that we need to have as a commercial organization. So we've been able to do that in the focus for eplontersen for PN. We have field medical team out there, publication, scientific communications team. All of those things we've been leading actually on PN. As we go into the launch, we are not doing the field for sales capabilities with the exception of where we excel, which is in rare disease capabilities. And we know we need to have patient education managers, we call them our nurse case managers that hold the hands of the patient from beginning to end. We want to do that because we know how to do that really well. We didn't want that to be lost with the rare disease indication launch. And then AZ is actually leading the other field resources as well. So this is very complementary and that allows us to say, hey, some of the infrastructure we've build now, we can actually move some of that over to the upcoming FCS launch, which would be next for us. So we've built kind of our internal data warehouse for patient identification and going into launching FCS with a nice customer-facing model that will be focused on patient identification and really getting those patients diagnosed and treated. For PN, we see a lot of headroom, as you asked and there is only 20% of the patients who've been identified and treated with first generation. And even with Amvuttra out there, a lot of it's been switches from first generation, so we see a lot of room to grow for new to silencer therapies and that's where we're focused. We have made a bold ambition that we're going to find these patients. We're going to treat them with eplontersen and become the silencer of choice for newly diagnosed patients for eplontersen PN. With that comes a lot of investment in resources from AZ side, where it's a Tier 1 priority in AstraZeneca and we're investing across all the dimensions of medical systems, patient identification, data sources and really kind of also going out of the centers of excellence and making sure we're in the community to different types of practice settings. And here, we again have an advantage with not just AZ scale but also their current presence in cardiology offices because they're in there with Farxiga and a lot of the mixed phenotype patients for PN actually, actually are in cardiology offices as well. So we do believe we have a good advantage in getting to those undiagnosed and untreated patients.

Appreciate that. Just to follow-up on eplontersen PN side. Do you -- ONPATTRO has been in the market for quite a few years, Amvuttra is more recent. But like you said, only 20% has been penetrated. Is that because of the inherent challenges with ONPATTRO, where it was once a month in the clinic, in fusion versus focused primarily on the large cardiology offices and completely ignore the community practice, which is the gap you're trying to fill?

Yes. I think it's multifactorial. I really do. I do think the administration led itself to centers of excellence. And if you look at like where the patients are and who the treaters are, they're mostly all in the centers of excellence. So that kind of just created because the administration profile didn't allow it to get into the community, right? So that's where it is. The second phase is, yes, getting out with a self-administered injection allows you to actually penetrate the community and see these other physicians, be it neurologists, cardiologists, GI, right? So that I'd say is the third one. And then I think -- that's the second one. And then I think the third one, I don't think you see as much but there's a lot that goes behind the scenes in terms of investing to identify these patients, the data sources that you have to get, the work that you have to do with not just the KOLs but with kind of the health care professionals and nurse practitioners and all. That just requires investment and that's what a larger company can bring to growing a disease category that is so nascent.

So let's switch over to [ Donnie ], which will be -- the Phase III is going to read out sometime first half next year. The 1 study that I find really intriguing is the SWITCH study. What drove that? Is that more driven by your side of the organization where you want to see what the patient perceptions are and how -- does that impact a lot?

Yes. This is probably like one of the first areas that we really spend a lot of time with clinical development when we got the excellent, excellent Phase II data and we brought in the market insights and as we sat with them and planned the Phase IIIs in terms of what we needed. But we also saw that, well, a lot of these patients are already treated on prophylactic treatments and this is not a market growth one that I just described for PN. This is a switch market. In order to be able to switch, we have to do a couple of really key things, which is design the SWITCH study, alongside of it. It's not required for regulatory approval but we do believe it is a very important requirement and needed for penetrating commercially, this marketplace as well. There are a couple of things that are really great about that study, I mean, obviously, the great collaboration with our clinical development teams but also the fact that physicians need to be confident that they can switch patients without breakthrough attacks and we'd be able to demonstrate that. And in essence, we also get to show patient preference because we're doing some questionnaires at the end of the study and we will be able to also bring those types of data in for physicians saying, "Hey, not only can you transition them because of our really nice fast rapid onset that we've seen in our Phase IIs, right, and once you doses you get to kind of maximum clinical efficacy but also demonstrate the patient preference to the questionnaires. And in essence, you have back -- you switch patients from Takhzyro, Orladeyo and even [indiscernible] in that study. So it gives us a lot of confidence in how we can go out and really get these patients switched to a more efficacious and more convenient administration.

I think just to add to that, if I could, very briefly, Debjit, we were also very pleased by the fact that patients actually enrolled in the study very effectively, very efficiently. We actually have a very good enrollment in the study. It's not a --it's a rather large study, almost the size of our Phase II study outright. And I think it really demonstrates the fact that patients are willing to and want to switch. They're looking for better treatments, better convenience, better efficacy, better tolerability and they're very much willing to switch and we're very pleased with the fact that the patients have stayed on donidalorsen through the duration of the study and we're actually considering making the study bigger going forward.

Appreciate that. So Brett, going back to you, your competitors HELIOS-B study is going to read out sometime early next year. Your study is 2.15x larger than the HELIOS-B study. What levers have you put in place to win in the marketplace, assuming HELIOS-B hits on the primary?

First thing I'd like to say is that this is a very large market opportunity, a very large unmet medical need for TTR cardiomyopathy, estimated 500,000 patients plus with a high, high unmet medical need despite the fact that the drug that is out there is approved, tafamidis, there's still a very large unmet need for better efficacy for patients. There's a -- there are room for multiple silencers. I just want to say that outright. This is a -- that can offer more advantages to actually grow the market to beyond what I just said. With that said, we love our trial design. We think that we have the right trial design not only to help ensure for a positive outcome with respect to a p-value, if you will but more than that, to actually have the richest data set, to be able to drive claims, for example, how good is our silencer eplontersen on top of standard of care in the United States, tafamidis, how good is our drug as a monotherapy or even versus tafamidis in the subgroup analyses? How good is our drug in different [indiscernible] classes for patients suffering with cardiomyopathy and so on. And the richness of the data sets is what's really going to drive value for investigators, physicians and patients. And we think that, that's a huge advantage. And it's also -- we believe it's necessary because of the changing demographics that have happened in this population with better diagnostics, better ability to diagnose patients, more disease awareness, patients are being diagnosed earlier. It is one of the reasons -- it is the primary reason why we upsized our study to the largest ever conducted in this patient population. We have the right -- we believe strongly we have the right trial design. As far as what we're looking at very carefully, the #1 objective is to continue to monitor cardiovascular events -- blinded cardiovascular events during the course of the study as we have been from the beginning, events such as mortality, event -- not just total events but CV mortality, CV hospitalizations. What are the causes of those CV hospitalizations? Are they what we want them to be when this study reads out? We're very pleased with the event rate that we are at in the study to date. As a reminder, CV, cardiovascular outcome trials typically have the largest number of events occurring in the last stages of a CV outcome trial but we like where we are and we think we're right on track for the events that we need for a successful study based on the powering assumptions we have made. Our competitor has a program that's going to read out next year and that's also going to be very important. It will be the first time we'll be able to assess what the effect size, for example, is for a silencer in this patient population, that will teach us a great deal. The 2 drugs are really behaving very similarly with respect to TTR -- magnitude of TTR reduction. We think the demographics in the 2 studies are very similar because they've enrolled essentially around the same time. It's a smaller study but still it will be very informative to see what we might expect for eplontersen. So we're really focused on those 2 parameters. We're fully enrolled and the study continues to progress very nicely.

So as a follow-up to that question, I can think of 3 scenarios which could play out with Helios-B. It's a total bust. It hits on hospitalization or it's a complete win both on hospitalization and mortality. In which of those 3 scenarios, would you decide to do an early termination of CARDIO-TTRansform?

So we will -- the primary -- the most important decider in us completing our study, ending the study early, would be based on the event rates, the blinded event rates and the nature of those events in our study. A secondary impact could be the results of that study, the different scenarios you said. But honestly, Debjit, I'd prefer not to comment on what we would do in sort of a decision tree based on the 3 scenarios you played out for HELIOS-B. The devil will be in the details. It will be a data-driven decision whether that will impact our -- what we want to do with respect to an early readout. We have the ability to read out early in the study or we let it play out for 140 weeks fully, all patients, if we're at 140 weeks. We have a lot to review and to support making that decision. What's most important isn't a sprint to the finish line, right? This is an enormous unmet medical need globally for patients, enormous opportunity. And in no way will we compromise the quality of the data to save a few months in a data readout for an outcome, for a trial of this importance. So we will make sure that we're -- we have to be very confident that the study is going to give us what we needed to get us to win and be highly successful in this marketplace before we went into study early.

So Onaiza, back to you, the 1 medicine that we didn't talk about was olezarsen. From practice dynamics, are SHTG patients, are there aggressive prescribers for TG lowering therapies in the SHTG market? And do you have a sense of who these people are, when you read out the SHTG data sometime next year?

Yes. So again, just starting with SHTG overall, we have 2 sets of prescribers and that are really looking for this treatment option to reduce risk of acute pancreatitis for their patients. We have a medical guideline for ACC that says treat patients to below 1,000. We have endocrine guidelines that says treat below 880. But we know that the 880 marker is a very strong threshold for acute pancreatitis risk and creates even a higher risk than the 500 to 880 patients. So they are basically saying we have an unmet need that's profound over here. We have an unmet need in the 580 because the guidelines are saying, get down to 500, right? And there aren't any good tools that they have. Our data set, I think, it's going to be very exciting from triglyceride reduction because it's in background therapy of these standard of cares that have really marginal efficacy at the 20, 25-ish range as well and to show a magnitude effect like we showed in our Phase II is, I think it's going to be very tremendous for this physician set. The physician sets, as you said, are segmented by behavior. And the behavior we've classified are aggressive treaters that are just waiting for this. A good portion of them are endocrinologists and we're profiling them now from data sets and we'll profile them actually even more to our field medical team as we go out there, right, to see what their treatment patterns are. So that's an aggressive treater set. A lot of them, as I said, are endocrinologists but a lot of them are also preventive cardiologists. The mindset of prevention in cardiology, which isn't true for the entire 20,000 sets. So we're going to hone in on this as we get out to launch for SHTG. We're also going to learn more when we go out and launch FCS about the behaviors of the segments as well because we'll already be out there, there will be a field for us. So we'll make the data real, is what I call it. So that's going to be great. And then I wouldn't say that it's only the aggressive treaters. We have a set of behavior segment which is actually also pretty significant in size. We call them active treaters and then the kind of market development work is getting the active ones to become aggressive, right, over time. So that's kind of the plan from our early adopter launch strategy all the way down to continued growth of the product and we expect this to be a peak sales of over $1 billion where we only have to get a fraction of the epi that's in the 3 million plus population of 500 and above.

So Brett, back to you in the last few minutes that we have. Lot of incoming questions on Angelman syndrome. While the program is partnered with Biogen, Ionis was responsible for the dose escalation study. As you read out the data sometime in second quarter, midyear next year, could you sort of lay out what you expect to see and how well the program has gone, at least from your perspective, given that it's largely an open-label study?

Very exciting program. We're very much looking forward to the Phase II data midyear next year for our Angelman's program. As you said, we're operationalizing the Phase II study. We actually conceived this whole program many years ago and discovered our drug. And it's on track for the data to come out next year. We're very pleased with the performance of our program to date. We have not had any significant -- any meaningful tolerability or safety issues. There have been really no bumps in the road at all as we've conducted the study. The study is fully enrolled now. We've actually slightly over-enrolled the study. We're beyond 50 patients in the dose escalation stage. Treatment is -- the initial phase of the study was treatment for a period of 3 months. And then patients were -- had the option to roll over into a long-term extension study, at least 12 months of further treatment. I'm pleased to say that virtually every patient rolled over into the long-term extension study. And as I mentioned, it's going well and I'm not surprised that it's going well, Debjit, because it is the same platform. It's the same chemistry that we have utilized for all of our neuro programs to date, which have continuously shown reproducible efficacy and good safety and tolerability. Next year, we're looking at data on safety, tolerability, patient disposition. We're going to be sharing data on biomarkers, EEG data. As you know, these patients suffer from abnormal EEG patterns, these elongated delta waves as an example. We'll be looking closely at that. We'll be looking at measures of efficacy too, measures such as the SaaS CGI, the Bayley 4, measurements of patient symptoms, communication, sleep patterns, seizures, et cetera, all of which are pretty well documented. And we'll be comparing that to natural history data, natural history data that we -- this is an open-label study, as we mentioned, natural history data that we have generated ourselves working with academic centers of excellence in Angelman's syndrome, which we're running, as well as published non-natural history data. So all of that should come together for our data readout. And we're hopeful that, that data readout will support a decision to move to advance the Phase III development.

Well, unfortunately, I was just assigned half an hour and I have 100 other questions I can go with. Thank you so much, Brett and Onaiza for your time today.

Thank you, Debjit. It was a pleasure.

Thank you.