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

Let's go ahead and get started. So thanks, everyone, for joining us. My name is Ally Bratzel, one of the senior biotech analysts here at Piper Sandler, and it's my pleasure to introduce this morning Ionis. So joining us today, we have Brett Monia, CEO. So thanks for joining. Just to go over the format, this is meant to be informal. If anyone in the audience has a question, feel free, just raise your hand, speak up, and we will get your question asked.

But I will go ahead and get us started off. I have a couple of pages worth of questions here. So maybe, Brett, just kind of an intro question. I think we all know Ionis has a long history as a leading antisense and ASO company. So just to kick us off, go over the evolution of your key late-stage programs, eplontersen, donidalorsen and olezarsen, how that fits in the Ionis strategic shift towards retaining ownership and commercializing assets.

Yes. Thank you, Ally. It's a real pleasure to be here today and share with you some of the great progress we're making at Ionis. We're really wrapping up an extraordinary year for the company with so much progress, so much success across all functional areas of the company, and it's setting us up for an even greater 2024. The technology investments we've made over the last few years are really paying off and it's really delivering, time and time again, some really great-looking drugs with Phase II, Phase III data, over and over again, with excellent safety, excellent efficacy. We're proud of the fact that this year we expect to have 2 FDA-approved new medicines to reach the market. One is already in the bag, QALSODY for SOD1-ALS. And we're looking forward to the PDUFA date of December 22 for eplontersen for TTR polyneuropathy. We've made great progress in building the infrastructure for our commercial organization. We're prepared to launch in our first co-co partnership, co-commercialization partnership. This one being with AstraZeneca to launch eplontersen soon after potential launch for TTR polyneuropathy. And that's setting us up for several independent commercial launches that are coming rapidly right behind eplontersen today. We have one of the richest pipelines in the industry. We started the year with 6 drugs in Phase III development for 8 indications. We're finishing the year now with 9 drugs in Phase III development for 11 disease indications, really showing how prolific our technology is, our platform is, and everything in our Phase III pipeline are reading out and are progressing right on track. On the near-term commercial opportunities or the near-term real value drivers you asked about, Ally, is 3. There's eplontersen, we have a remarkable drug and tremendous efficacy, a lot of advantages that we think patients are going to prefer to make this the preferred treatment for TTR amyloidosis, and we're ready to launch, as I said, with AstraZeneca. We had positive Phase III data for olazarsen in FCS that we reported in September, remarkable efficacy for triglyceride lowering and reductions in acute pancreatitis attacks. And we're prepared to file for that indication early next year for potential approval, assuming priority review, late next year. And our large indication for that drug, SHTG, is progressing on track. And then finally, our other near-term commercial opportunity, donidalorsen as a prophylactic treatment for hereditary angioedema. We fully enrolled that study this year, and we're looking forward to Phase III data in the first half of next year. And that, too, can be an upcoming independent commercial launch for Ionis going forward. So -- and the business model has shifted, has evolved. We're excited about launching our own products to drive value for Ionis, and to be able to control the drugs and move them forward at the pace that we want to move them forward. So it's pretty exciting days at Ionis today. The pipeline continues to deliver. We're prepared to launch our own drugs, and the technology continues to expand and diversify.

Great. Well, yes, obviously a lot to cover. I am going to start with a couple of questions on eplontersen, just since that's top of mind with the PDUFA in ATTR polyneuropathy next month. I guess, first is any feedback or color on the review? Just can you characterize your overall level of confidence in an on-time U.S. approval?

I mean, what I could say is that every day goes by, our confidence gets higher and higher. Conversations, discussions with the FDA are proceeding on track. And we're prepared -- and we're looking forward to a potential approval in a few weeks, and as I said earlier, we and our partner, AstraZeneca, are ready to launch soon after an approval.

And then thinking about the launch and gaining market share in polyneuropathy against the more commercially established competitor, how are you thinking about that? It's my sense this isn't a zero-sum game. There's a lot to be said for improving patient identification, things like that. So maybe talk about how you expect the dynamics to play out for polyneuropathy? Are you really expecting to compete more in the cardiomyopathy space, where there's a larger addressable patient population?

Yes. So I think I've said it now 2 or 3 times of how excited we are about the profile for eplontersen for TTR amyloidosis. We expect eplontersen to be the preferred treatment for all forms of TTR amyloidosis once we hit steady state in the market today. We're developing, again, eplontersen for two indications. One is a rare indication, polyneuropathy you referred to, Ally, where we had great Phase III data last year and then that was confirmed with long term data from the Phase III study this year when we completed the study to its full outcome, and then the broad indication, cardiomyopathy, very, very sizable market opportunity, large unmet medical need, and that's progressing well. For polyneuropathy, I think we start with what kind of market is it. It's a market actually where the vast majority of patients are not on treatment today. So this isn't a switch market, for example. This isn't a market in which someone -- any particular company or drug has a very strong position in this market, in this disease indication. More than 80% of patients today with TTR amyloidosis with polyneuropathy are not on any treatment. So this is a market that we need to go find the patients and show them what eplontersen has to offer, which is a lot. We believe that with our strength in TTR amyloidosis, our strength in rare disease drug development and commercialization, like what matters most to patients, coupled with the sheer strength and resources that AstraZeneca brings to the table to help go find patients, we think that we have a great opportunity to find those patients, which is priority #1. Secondly, we like our administration profile. Based on all the market research we've done and AstraZeneca has done, which has been extensive, the self-administration at home, the subcu treatment using a simple, painless auto-injector that we offer, we think, has very, very significant advantages versus a treatment that has to be administered by a healthcare provider, which appointments need to be set up and so on, and so it's cumbersome, gives us a distinct opportunity here. And again, the efficacy and the safety profile for eplontersen is second to none. So that's our strategy for neuropathy, and we like our strategy. For cardiomyopathy, the larger indication, all of that applies, but in addition, we also believe that we have the preferred, the optimal study design. It's the largest cardiomyopathy -- it's the largest trial design ever done for TTR cardiomyopathy. We believe it will not only -- that it not only gives us the highest probability for a successful outcome, but also gives us the richest data set to be able to show and share data with patients and treaters that this is the preferred treatment option for TTR amyloidosis. So -- and that coupled with the fact that AstraZeneca is a powerhouse in cardiology already. Our medical teams and our field teams are already in the field talking about eplontersen, we think, represents a significant advantage for us to reach as many patients as possible globally, assuming approval for eplontersen.

So digging in a little bit just on the cardiomyopathy indication and the CARDIO-TTRansform trial design, I think the decision to upsize the trial seems to have been validated by some competitive updates. Could you help us understand if there are any competitive scenarios or just any scenarios at all in which the design or time line of that trial could be changed that could pull forward data? I think the guidance is the earliest we could get it is first half '25, but how should we be thinking about that?

So yes, I mean for the full study to read out to its completion, 140 weeks, more than 1,400 patients, treatment, we're looking at a first half 2026 read out. However, we continue to collect and monitor very carefully our blinded event rates, CV mortality, CV hospitalization. And as those event rates progress forward and we start getting into the range that our study was originally powered, based on, we could certainly end the study early if we chose to do that. We're also -- we'll pay very close attention to other treatments that are being developed today in the silencer class that could also teach us what the effect size might be for a silencer in this market, which can also impact our ability to read the study and [ put ] the study out earlier. Our goal is to bring eplontersen to the market with the richest data set but as fast as possible as well. And we and our partner, AstraZeneca, are working diligently on all kinds of scenarios that could end the study and bring the study to patients as rapidly as possible.

Okay. Maybe switching gears now to olezarsen. Obviously we saw the really strong data set in FCS earlier this year. Can you walk us through any gating factors to filing in FCS early next year? And what gives you confidence in receiving priority review, getting on the market maybe this time next year?

Yes. As I mentioned earlier, we're developing olezarsen, this is a wholly owned program that represents our first independent commercial launch for Ionis. We're developing it for 2 indications, a rare FCS indication, which is a genetically caused form of severely elevated triglycerides and then the broad market opportunity SHTG. We couldn't have been more pleased with the Phase III data in FCS. Our primary endpoint was lowering of triglycerides. And we saw a substantial and highly statistically significant lowering of triglycerides, all with great safety and tolerability and compliance. The -- what we were really excited about was the reductions in acute pancreatitis events that we saw in this study. We were hoping for trends; we saw highly statistically significant reductions [ and ] outcomes, acute pancreatitis in that study. This gets us -- made us very excited about the program, and we're preparing now to file for the FCS indication early next year. As far as priority review goes, if we get priority review, which we'll certainly seek in the U.S., that gives us the opportunity to have another drug approval towards the end of next year for this indication. Confidence in priority review, I don't think we've been actually signaling that we're confident we'll get priority review in the U.S. because we haven't had the opportunity to share the data with the FDA yet. That will happen once we have our first end of Phase III meetings with the FDA, which are coming up soon. With that said, there's no treatment options today on the market for FCS in the U.S. This is a severe, very severe rare disease indication. And that, coupled with the remarkable efficacy we've seen and a reduction in acute pancreatitis, we think gives us more confidence that we'll get priority review, but that's to be determined.

Okay. Maybe switching gears again -- there's so much to cover -- but donidalorsen. You had some 2-year data from Phase II presented recently. Can you talk to the kind of feedback you're getting on that just from the HAE field? And then also, just I'm curious how you -- how we should be thinking about the switching study that we -- I think should be seeing mid next year along with the Phase III OASIS readout? Can you just frame for us how that -- why that switching study is important, how you envision that switch market reacting to availability of donidalorsen?

Prophylactic treatment of hereditary angioedema is a different market than what I just covered with olezarsen, where we expect to be first, there's no treatment options, and for TTR amyloidosis, where there still remains a very large unmet medical need, but there's several players in the market. HAE prophylaxis is a switch market, especially in the United States. In the U.S., the vast majority of patients are on a prophylactic treatment to prevent these potentially fatal, sudden, unpredictable HAE attacks. Yes, the unmet medical need is -- remains very high. Donidalorsen, based on its Phase II data and the 2-year data that you just referred to, which was really strikingly positive, checks all the boxes that patients and prescribers want for better treatment options for TTR -- for HAE prophylaxis. One, efficacy. Despite the fact that there are effective treatments on the market today, patients are still having attacks, and they're having a lot of them, and they want better attacks. They don't want any attacks that can be fatal or land them in a hospital and that can occur at any time. Big unmet need there is better efficacy. Second is better convenience. Today's treatments are largely being done with a subcu treatment every couple of weeks of treatment. And the patients are still getting the attacks that I mentioned earlier. And thirdly, better tolerability. They don't like taking these treatments. They can be painful and inconvenient. Donidalorsen, based on long term -- based on our Phase II data and our long-term open-label extension now that's gone beyond 2 years, checks all 3 of those boxes. We have unprecedented efficacy that patients are going to be very attracted to, we have the convenience of monthly and even potentially every 2 months dosing, and with excellent safety and tolerability. It's a simple low-volume auto-injector that patients could take themselves at their convenience once per month. So we're excited about the profile and that -- and we're excited about the market research we've done, that really looks like this could be a preferred treatment for HAE prophylaxis. This is a switch market, however, as I mentioned, because the majority of patients in the U.S. are on existing prophy treatments. But we're confident that patients are willing to switch. And there's lots of evidence, lots of lines of evidence that patients want to try -- look for better options and try them, one of which is a study that we're doing ourselves, the switch study that you referred to, Ally. We actually initiated for the first time in HAE prophylaxis a switch clinical study, in which patients that are on prophylactic treatment, any one they wish to be -- most of them are on the standard of care today, which is Takhzyro -- come into our study with an agreement to switch and try donidalorsen, our drug. That study enrolled quickly, that study overenrolled, and that study continues to go well. In fact we're expanding it. That shows you that patients are not -- and patients are staying on donidalorsen throughout the study. That shows you that patients are willing to switch. They wanted better options and they're staying. They're choosing donidalorsen and they're staying on donidalorsen long term. So that's -- our strategy is to deliver donidalorsen and to inform that this is a better treatment option in this highly attractive switch market for HAE prophylaxis. And we're looking forward to the Phase III data in the first half of next year.

Okay. Yes, great. We've got a couple of minutes left, and we -- I do want to get to some of the earlier pipeline stuff. So maybe shifting gears again to Angelman's. I think you recently shared some preliminary data from your ongoing Phase I trial looking at 582 in Angelman's, including some EEG data, so -- and also some maybe directional commentary about [indiscernible] improvement on CDI and the Bailey scale. So can you frame the takeaways from that update and kind of what the read-through is or what we should be looking for when the full data set is available mid-next year and what would warrant further investment in this indication?

We couldn't be more thrilled with the performance of our CNS platform overall. It's a validated platform, it's a platform that differentiates from anything else that's out there today, whether it be in oligonucleotide therapeutics or traditional approaches, 2 proven drugs that are on the market today, SPINRAZA and QALSODY. Drugs in clinical development, several of which we've shared proof of concept data for already in mid-stage studies. Angelman's is another one of those drugs, same platform, that we're very excited about. We chose to share some preliminary data at the patient meeting in Miami a few weeks ago because we felt that it was important to demonstrate to the patient community that our study is on track. And we haven't had -- we're not experiencing setbacks, setbacks that have affected other drug discovery programs for Angelman's disease to lend confidence that -- we don't know if the study will end up being positive, but the results so far are very encouraging, and we're looking forward to the data midyear next year. What we reported was that we've fully enrolled the study. That patients -- all the patients that -- almost all the patients from the Part 1 of the study rolled over to a long-term extension and are staying on drug. Good tolerability and safety and that we have preliminary evidence that we're providing benefit. Benefit in the form of EEG data. These patients, it's known that EEG abnormalities are common, are consistent with the progression of the Angelman's disease. What we showed was dose-dependent normalization of EEG in patients treated for 4 months with our drug. Second, we also provided evidence that there was clinical benefit in the form of the Bailey 4, the CGI -- SAS CGI measurements as well, which is not definitive, but certainly, compared to natural history data that we have internally and our partner, Biogen, has internally, as well as that's been published, it looks encouraging, very encouraging, and we're looking forward to the data midyear next year, which -- the goal of which is to trigger a decision to go to pivotal with a Phase III study.

So maybe just to follow-up on that, and this is definitely like a cart before the horse question, but how do you see the competitive landscape there? Is it a winner-take-all market? Is it -- can we look to the SMA market as maybe as an analog? Or how are you thinking about this kind of playing out and what will ultimately differentiate therapies for Angelman's, if we're in the position where there are multiple options for patients?

Yes. I don't -- we don't believe that this is a winner-take-all market. This is a market that's substantially larger than spinal muscular atrophy, SMA. And we already see that in that market, there are several -- there are multiple drugs. SPINRAZA was the first to market. But now there's competitors, all of which are doing well. SPINRAZA continues to do great. We expect SPINRAZA to continue its path towards return to growth. And this is a bigger market for Angelman's. With that said, we love our -- as I touched on earlier, our chemical platform for CNS disease, a platform that is the only oligonucleotide platform that has been validated with FDA approvals, EU approvals, global approvals, and have done very well on the market and with a very robust pipeline of other drugs, the CNS pipeline. So it's a very attractive market. And it goes well beyond that of the SMA side.

Okay. I think maybe in the last minute or so, I did want to touch just on the wholly owned neurology franchise that you kind of unveiled, outlined at your Innovation Day a couple of weeks ago. Can you walk us through the strategic rationale for that expansion and then also kind of how you arrived at the 2 initial pillars within that that seem to -- rare pediatric -- pediatric neurology and dementia, that seem to be sort of the leading pillars there and what we can expect?

Yes. So very briefly in the last little bit of time we have, CNS is a big differentiator for Ionis. We're way ahead of any competition that's out there today for many potential breakthrough treatments for all kinds of rare and broad CNS disease indications. And it's because of that that I prioritize CNS as a key component of the Ionis wholly owned program -- pipeline that we're going to bring to market ourselves, the drugs ourselves, right, because we're leading the way. We've done extensive portfolio prioritization, characterization, reviews, and determined which programs we want to keep for ourselves and which ones we may choose or we may decide that are better somewhere else with a partner. CNS is a broad area, right? We believe that pediatric neurology and dementia are key areas for us based on the drugs that are in front of us today that we can bring to the -- into clinical testing and potentially in the market. There's a large number of crops there, or a large crop opportunity there for pediatric neurology and dementias. We think that focusing on thematic therapeutic schemes is very important to build expertise, capabilities, common call points with physicians and so on, and those are the 2 we chose going forward. Today, we have 2 drugs in development in pediatric neurology and more coming for dementias and pediatric neurology next year. But basically that was the rationale for us to really prioritize CNS for our wholly owned pipeline.

Fine. I don't think we even got through half the questions, but lots and lots to cover and lots more to dig into. But thank you so much for the time today.

Thanks, Ally. It was a pleasure.