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

All right. Very good. It's my pleasure to be hosting this panel with Brett Monia, CEO of Ionis. I'm sure most folks know the Ionis story quite well. But maybe I can just have Brett give a quick 2- to 3-minute intro the scope of the pipeline, what's kind of key and that's upcoming, and then we can get into Q&A. So thank you.

It sounds good. Pleasure to be here, Paul. Thank you. So Ionis is a genetic medicines company traditionally has been focused on the antisense platform. Today, we're more diversified in our technology. Certainly, [antisense is a key to our] technology with 9 drugs in Phase III development for 11 indications. But we've also expanded our capabilities into RNAi and even gene editing now. It's been a very exciting year for the pipeline with several positive readouts and preparing for upcoming commercial launches next year and the following year. And we're well positioned for tremendous growth going forward based on the performance of our pipeline. So these are exciting times at Ionis and the future has never been brighter.

So the next key event for you guys is the eplontersen PDUFA. How do you feel heading into that? And what's the launch planning for that drug look like relative to how you had rolled out TEGSEDI a number of years ago?

Yes. So we couldn't be more pleased with the Phase III data for eplontersen in ATTR polyneuropathy. Last year, we reported positive data, very strong data at week 35 the interim analysis. And it was that interim analysis that we filed our NDA for the -- into the FDA for potential approval with a PDUFA date in several -- in a few weeks, December 22, to be specific. We are really pleased with how strong the data continued to be this year at week 66 and week 85. Actually -- we actually saw further improvements in performance with more and more patients actually improving on both the neurological measurement mNIS+7 as well as the Norfolk Quality of Life. We're well positioned to launch, assuming approval in December, launch in January in the United States. We're also under review today in Europe and in Canada with potential approvals in those jurisdictions next year with launches on track. We think we have a very competitive profile. We think it's eplontersen is well positioned to be the treatment of choice for ATTR polyneuropathy. And we base that statement or that position based on very strong data, highly -- very competitive data. In addition, we also have what we think is a significant advantage as a self-administered at-home administration profile by the patient themselves that they can inject using a simple auto-injector. It's a painless. You can even see the needle, low-volume injection, which we think is a significant advantage for eplontersen to really do well on the market for polyneuropathy.

Do you receive royalties milestones, but you also have this kind of opportunity to participate somewhat in the support of this launch. How are you thinking about that level of investment?

I think it's strategic for Ionis. When I moved into the CEO role in 2020, I recognize all the great things that Ionis had done for many years, which was science and innovation and really been leading the way in drug discovery and development in the field of RNA therapeutics. But what I also recognized was that we are leaving a great deal of value on the table by not commercializing our own drugs, bringing drugs to the market ourselves. I also felt like we were losing value -- a lot of value by not controlling a good part of our pipeline ourselves and relying too much on partners. So we made the step. And we started that process in 2020 to fully integrate. And I'm proud to say that today, we're ready to launch our first products in 2024, starting with the co-commercialization arrangement with AstraZeneca. And then our first independent launch expected in the second half of the co-commercialization arrangement for AstraZeneca helps us build our commercial capabilities faster for our first independent commercial launches. It allows us to build our medical affairs group, our market access group, which we've been heavily involved with in this co-commercialization agreement. Our nurse case managers will be responsible for our patient hub, digital and omnichannel. All of those capabilities are coming together because we're able to build alongside AstraZeneca who will provide the field team...

Can all of that stuff be leveraged then for your other launches? Or because those are in different indications, you can't -- it's not plug and play.

No, it is. It's directly applicable and for our other programs because it's back office capabilities. It's finding the patients. It's the digital omnichannel capabilities. It's the patient hub services and all of that medical affairs. We've already shifted. We started with using our medical affairs for TTR polyneuropathy. And as per agreement, we were going to shift those medical affairs responsibilities to AstraZeneca who are already in the field for polyneuropathy. And as we were approaching the cardiomyopathy Phase III results, that was the plan. So now we've shifted, as an example, our medical affairs team to olezarsen, Donidalorsen it's all in place. So it really does sort of catapult us and to really accelerate our ability to commercialize our own independent launches.

Okay. I pose a similar question [indiscernible] earlier. But as it relates to the cardiovascular outcomes trial for eplontersen, I think on the Wall Street side, the perceived probability of success would be extremely high if it was a monotherapy study. But I think there being such a large chunk of patients on tafamidis and both companies trials has created this overarching uncertainty related to what effects should we expect on top of tafamidis? If you are a research analyst and RCs, how would you actually do work on that question? How did Ionis do work on that question to arrive at powering assumptions?

What they say? No I am kidding. So we're very confident in the powering our study. I mean we put a lot of thought into the sizing of our study. One of the reasons why we upsized the study to the number that we said, which -- I mean, we ended up at, which is more than 1,400 patients, which is the largest Phase III study ever conducted in TTR cardiomyopathy. It's truly a landmark study to be able to have the powering, to be able to not only increase the probability for success in hitting our primary endpoint, which is a composite of cardiovascular mortality and hospitalizations, but also to support subgroup analysis, including mortality, specifically, hospitalization specifically and also monotherapy, eplontersen alone and on top of tafamidis. We think that this data is going to be essential to really maximize access to as many patients as possible globally. We don't share details on powering assumptions, but standard in the cardiovascular field, usually a risk reduction of 20% is what's expected, and that's certainly in the range of what we're expecting for eplontersen in totality. As far as on top of tafamidis, it's hard to say. It's really hard to say what the effect size would be but what I can say is that the powering assumptions that we built into this program assumed everybody was on tafamidis, right, from the get-go. That includes when we upsized the study. So we are well powered to see subgroup improvements.

And do you think it's going to ultimately be 50-50 about in the study?

Our demographics, we've completed enrollment. And I can tell you that we're well balanced between tafamidis as well as naive patients. The other thing, I think, Paul, that's important to remember is that tafamidis is -- in the U.S., the majority of patients are on tafamidis today for TTR cardiomyopathy. But that doesn't mean newly diagnosed patients. Well, I have to go on tafamidis in the future when silencers reach the market if the data supports it, right? So what we're really dealing with here is a combination of market for a period of time. And then it's -- there's no reason why a silencer wouldn't be using first line, right off the bat in newly diagnosed patients if the data supports it.

Right. Okay. Makes sense. I want to actually jump around a little bit because you just had some disclosures in your Angelman's program. Can you review that? And I thought the comments that were made in the CGI were super interesting, but it's early in the study. How do you interpret that?

Yes. Let me take a step back and provide some context. The FAST meeting is a patient meeting, right? This is a terrible disease, Angelman syndrome is a neurodevelopmental disease, which there are no treatment options available today. It's a very strong patient advocacy group that has been -- has had some disappointments over the last couple of years in which studies have been -- programs have been terminated or there's been delays and so on. And there's been a lot of anxiety in the Ionis community about treatments coming forward. And we wanted to -- this was a patient meeting at a medical meeting, and we really wanted to -- we made the decision to provide some confidence that our program is on track, right, for this patient community. We completed an enrollment that was message #1. Message #2 was it's been safe so far. We have not had any safety issues to date, and we are on track for the Phase II data readout midyear next year. Third, we're seeing encouraging evidence of. [Technical Difficulty] Encouraging evidence. It's early, but...

And that was in the 4-month data...

That was a 4-month data. Most of those -- all those patients are now in the long-term extension. Some of them have been now in nearly a year, the long-term extension. Because that was just a 4-month data, in which we saw improvements in EEG patterns. We know that EEG -- the abnormalities are associated with Angelman syndrome and the more severe the disease is, the more abnormal EEG delta patterns are in that disease. We've shown the majority of patients were improving. We also looked at 2 measures of clinical benefit, the Bailey 4 analysis as well as the SaaS CGI analysis, which are measures of the symptoms like sleep, communication, seizures, activities of daily living that really affect these patients severely. And we're seeing that the majority of patients are showing signs of improvement. So it's encouraging data. The data has to read out to midyear next year, but that is the reason why we shared some of the data last weekend, and we're very much looking forward to the data readout midyear, next year.

So I -- from my perspective, I mean, it all sounds great. I -- in the full data, right, I think CGI is certainly like interesting, but can be somewhat subject to bias, right? I mean, just by the nature of the measure. What are -- what else could this study show on the clinical side that you think it could kind of further add credence of being a real drug effect?

Well, I think it's going to be the totality of the data. I know that's not a satisfying answer...

No. But like what are the other...

I think the subcomponents of those composite scores such as the things that affect these patients the most. So the things that matter to the family is the most. Communication number one, right? -- sleep patterns is number two and certainly the seizures. And I really think that any of those -- we will slice that data up to identify whether or not these patients are truly benefiting and in what way are they benefiting -- so I don't know if it would be necessarily a whole composite necessarily, although the data supports that so far, it looks compelling. But I really think it will be the subgroup analysis on that, that would be really interesting.

The subcomponent now?

Yes. The subcomponent analysis [that is what I mean], yes.

What else are you going to say?

Just we will also be looking at biomarkers and CSF biomarkers that also would support that we're engaging the target and that kind of thing, too. So all that work in process.

For olezarsen, so you had positive data in FCS. I think it's generally believe in the investor community that drug is going to get approved there. And in hypertriglyceridemia, I mean, the early data looks very, very promising. How are you thinking about executing on a launch in FCS, which would lend itself to orphan pricing, balance with high triglycerides coming after, like strategically, what are the considerations and conversation there right now.

So we're thrilled with the Phase III results in FCS in patients with severely elevated triglycerides is a genetic disorder, which not only do we show substantial reductions in triglycerides, we also showed substantial reductions in cutane acute pancreatitis events, which was -- is really what these patients live in fear of and happens that can be fatal or put them in an ICU for over a week. We will file early next year for olezarsen and FCS. And we're assuming priority review, we expect approval towards the end of the year and launch towards the end of the year, and that will be our first independent launch. This drug is deserved a rare disease pricing. This is a rare disease. It also sets us up very nicely for the SHTG indication, which is a very large indication, millions of people in the United States suffer from some risk of acute pancreatitis due to severely elevated triglycerides, often of the same magnitude as FCS, it's just that it's not a genetic cause, a monogenic disease. It gives us confidence in the Phase III study for SHTG. That study will be completing enrollment soon and is scheduled then to read out in early 2025. So it adds to our confidence that we may not only show substantial reductions in TGs for NS HTG, but we may even have an outcome in acute pancreatitis benefit as we saw in FCS. As we approach that market, it also lets us get in the field early and build the relationships with the endocrinologists and the preventive cardiologists as we prepare for SHTG. We're first to market for these indications, and we think that, that's a big, big advantage for Ionis. As far as pricing, I mentioned rare disease pricing for FCS. We'll certainly tap that down, and it will be more in the order of specialized pricing for cardiovascular drugs as we get there. But we're still working on the pricing strategy for SHTG.

For SHTG, one of the debates in the investor community is kind of how this drug fits in and an increasingly crowded landscape in cardiometabolic, right? You obviously have the obesity drugs, you have lipid-lowering drugs, heartbeat drug. And if you look at the Phase II study for olezarsen, I think most patients at baseline had diabetes or were overweight, suggesting, right, that there's obviously other comorbidities here. How do you think about the population within elevated triglycerides for whom triglycerides are actually the #1 medical problem.

It's very important to think about this -- patients suffered from severe elevated triglycerides based on the magnitude of triglycerides that they are experiencing, right? Our Phase II study was actually 150 to 500, which are patients that are at risk for cardiovascular disease due to the makeup of triglycerides, triglyceride lipoproteins and it causes atherosclerosis. We're focused entirely on patients at risk for acute pancreatitis and metabolic problem and they've also had metabolic problems with the 500 and above and once you really get out to the 800s and 900s, these patients are at severe risk for acute pancreatitis. So this is not a cardiovascular indication that can be treated with a cardiovascular drug, an LDL drug or a heart failure drug or that kind of thing. The other thing to keep in mind is that these patients need a substantial reduction in triglycerides, which our drug olezarsen has shown, at least in FCS, so far. And we think we'll show it in SHTG. It's also important to remember that these patients are -- come into our study on standard of care. And despite being on standard of care like fibrates or fish oils, and some of these patients are even on GLP-1 agonists in the study. And there's this register through the roof, such that they qualify for our study. So I don't think obesity or cardiovascular or drugs at their current -- current standard of care really going to matter much because these patients can't get their triglycerides under control. They are severely elevated. Many of them are in the multiple thousands, even with SHTG and they need better options for reducing the risk for AP. So that's what we think all [sorting] is going to deliver. And based on the FCS data, our confidence has grown.

Do you want to talk about HAE briefly? Sure. Another kind of analogous question, right? It's a big market, but it's a crowded market. You've got Takhzyro, you've got CSL's emerging product, you've got Donidalorsen. Assuming this succeeds and you launch it, who are the low-hanging fruit to get this drug in the first 2 years of the launch?

So this is a different market than we're heading towards different than eplontersen for TTR or olezarsen we're expecting first to market. This is a market that -- in which treatments are available today that have a reasonably good efficacy in preventing HAE attacks. Procalcitonin antibodies like Takhzyro or rudaya, an oral drug, However, there's a big unmet need for patients that remains. Prior to us turning over the card for our Phase II study, we actually did a lot of market research, and that market research has continued since in which it's clear that patients won't need and want better efficacy. They want better reductions in prevention of HAE attacks. They want better tolerability, and they need better convenience as well. Donidalorsen check based on the Phase II data and our long-term OLE data checked all 3 of those boxes, right? It has the best efficacy that has been reported to date as the convenience of monthly or even bimonthly dosing and self-administration by the patient themselves with a simple auto injector at home. This is also -- this is a switch market, right? So it's a market in the U.S. in which the majority of patients are on treatment today. So the question then is, will patients be willing to switch. And we believe the answer to that is clearly, yes. We actually have a switch market, I mean, a switch study in progress, the first time anyone has ever done actually a clinical study, actually switching patients in HAE from one prophylactic I, prophylactic to another study in a clinical setting. It's a large study. Patients that are on standard of care today are switching over to donidalorsen. We've enrolled that study quickly. Patients are staying on drug through the duration of the study. We're actually extending it and expanding it. And I think it demonstrates that patients are willing to switch and they're staying on donidalorsen. And it's going to be very important once we get to that market to actually talk to physicians and say, this is how you do it. Here's the data. And then you're not going to have a gap in protection. So we're going to focus our commercial efforts on identifying those centers of excellence in which you're seeing these patients and letting them know that there are better options such as donidalorsen for both efficacy, safety and convenience. And we think that a substantial number of patients are going to want to and physicians are in to want to switch their patients to a drug like donidalorsen.

And when you think about building Ionis. How many reps do you think you might have for HAE, how many for triglycerides, like what is a fully integrated organization start to look like 3 years from now?

Yes. That's the work in progress. We're planning to start our -- build our field force around midyear next year for the FCS launch. Then SHTG is still working.

That's going to be pretty small.

That's pretty small. Yes, right. And that's pretty small. And then the SHTG will come -- will follow that, and we'll grow and we'll work through that. for HAE, it's a very specialized focused effort. I don't think it's going to be a big lift because these patients are mainly seeing in centers of excellence and are treated by allergists, and there's not a lot of them.

Closer to like 20 reps, 100 reps like what do you think you're...

Something near to 20, something less than 100.

Okay, fair enough. That sounds good. What if I said 20 and 60?

There's got to be better things we could talk about.

Yes, you're right. Okay. Fair enough. All right. Let's keep going. So a couple of other trial readouts, I wanted to ask you about Brett. So what is this GA readout that's coming next year. Complementing the eye, I mean, we've had a few successes, but there's been a lot of failures, right? And one of the learnings originally for the C5 approach was you got to go intraocular, you can't go systemic. So this factor B thesis is really interesting, right, because it's a systemic approach. It's a different complement factor. What's kind of the thesis there and why this could work?

Our Factor B drug is doing -- performing very well. I'm sure -- as you well know, we're in Phase III development in IgA nephropathy for that same drug, and it's enrolling based on very compelling Phase II data. The geographic atrophy study, same drug is in -- just completed enrollment this year in Phase II. And the GOLDEN study. It's a big study, nearly 300 patients treated for a year. And the primary endpoint there is slowing down or stock halting of geographic lesion size, efficacy endpoint. We think this drug has a really good shot to make a meaningful difference in geographic atrophy. The alternative complement pathway, Factor B in that pathway has been genetically linked to geographic atrophy. So there's a genetic component to this. Targeting the alternative complement pathway is actually, we believe, a safe approach for complement inhibition in that we're not targeting the common pathway, which is, of course, important for controlling infections and boarding infectious agents. And thirdly, we think that the systemic approach is the way to go for targeting the alternative pathway. There's very little alternative pathway complement proteins that are actually expressed in the ocular area. And so the primary source is the liver where Factor B actually accumulates in GA at the retinal blood barrier and causes destruction of the macular. So we think it's the right approach, and it's the hypothesis. We're going take. We think it's a big advantage to Intravitreal drugs is not preferred, and this would be a once-per-month subcu injection.

When does this read out?

Second half next year.

Second half of next year. Okay. Okay. Yes. So that's one we've been getting some more questions that, I think, a lot of interest and appreciate the upside if it works. Is there a compelling market for this drug in IgAN.

We think so, but more importantly.

How does that...

Yes. Roche certainly is excited about it, our partner. It's a very competitive profile. I think we've seen now in long-term extension data in Phase II around 50% reductions in proteinuria, good convenience with a monthly injection, good safety, no impact on GFR. So we're not having any renal toxicity issues, it looks competitive. But it is a crowded space. And I don't know love to say, Roche feels strongly that this drug has legs and will compete.

Okay. Lp(a). So that data is coming in 2025, right? There's some controversy in this space related to the right Lp(a) baseline level that you should be enriching for? And then also the right number when we think about risk reduction and the right like thresholds. And there's differences between companies and how they're thinking about this as I'm sure you know and have been asked about a number of times. What was Ionis in Novartis' thought process and kind of how you designed the trial and enriched it to try to really prove out this biomarker thesis?

So this is a very exciting program, obviously. I mean it's really ---- Lp(a) remains -- is really the last -- one of the last remaining risk factors for cardiovascular disease that affects nearly 10 million people globally with CVD, which there's no treatment options available for them. And we're well ahead in our Phase III HORIZON study, which was fully enrolled last year and due to readout in 2025. I don't think there's controversy as to the threshold for the [magnitude]. So this is a disease that is caused by super elevated levels of Lp(a). Everyone has Lp(a), but if you have abnormally high Lp(a) levels are at risk for CVD and the higher it is, the worse it is. But I think the threshold for -- is pretty well recognized by the heart associations and others of being around 70 milligrams per deciliter. And if you can get patients below that threshold, they're pretty much out of harm's way. And that's what we achieved in our Phase II study with about 99% of patients with CVD and high LP(a) we were able to get below that threshold. As far as what -- where do you want to -- how you want to enroll your studies, what is the level of Lp(a) that you want to focus on for CVD? Well, certainly, the higher the Lp(a) levels, the greater the risk for CVD. So if you want to do a smaller trial, you can enroll your study with higher Lp(a) levels base, you're going to have more events that are going to happen faster. However, you also may be limited in the market opportunity, the patient population that you can naturally treat from a labeling perspective because that's treatment -- that's the patient population being treated. I could also tell you that in our Phase III Horizon study that Novartis is conducting, we also have the ability to look at benefit for patients in which -- that are at different thresholds for entry. So one threshold being above 70, another one saying being above 100. And both of those are powered for success. So I think it's the right trial design in which we can look at the data in several different ways to maximize probability for success.

Okay. Great. In the last 40 seconds or so, anything really important at Ionis that we didn't cover?

There's a lot important -- there are a lot of things that are important.

Super topical that we didn't cover.

Well, I think I would just -- I'd like to take it up a level just for in 30 seconds to just say this has been a great year for the pipeline. We've had so many positive readouts this year. We're preparing. We have Qalsody approved for SOD1 ALS. We're expecting eplontersen approved for TTR polyneuropathy, FCS next year and HAE the following year, the pipeline is delivering. And 2024 is set up for an even better year with so many mid-stage and late-stage pipeline readouts, drug approvals and commercial launches. And we're looking to even expand our Phase III pipeline in neurology and in other areas this year and the next year. So we couldn't be more pleased with the performance of the platform and the pipeline to date. So looking forward to next year.

Great, Brett. Thank you. Appreciate it.

Thanks, Paul.