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

Great. Welcome, everyone. My name is Jess Fye. I'm a senior biotech analyst at JPMorgan, and we're continuing the 42nd Annual Healthcare Conference today with Ionis. I'm joined on stage by the company's CEO, Brett Monia. We're going to have a Q&A session after he gives a presentation on the business. [Operator Instructions] So with that, let me pass it over to Brett.

Thank you, Jess. Thank you, JPMorgan, for the opportunity to speak today on the great progress we're making at Ionis on behalf of the company. Ionis, today -- I'm very excited, very pleased to be presenting on the progress we're making at Ionis as this really great company enters into a new era, an era that's poised to transform human therapeutics to unlock better futures for patients and also to drive next-level value for all stakeholders. During my presentation, I will be making forward-looking statements. So at Ionis, we have been and will continue to drive great value for patients and for all stakeholders by continuing to execute on a clear vision: a vision to produce and to deliver a steady cadence of new treatments, new medicines for patients suffering with debilitating diseases, each of which has the potential to be transformational in its own right. And we have been doing this and we will continue to do this by focusing on 3 strategic objectives: the first is to prioritize the Ionis wholly-owned pipeline; the second is to take advantage of the commercial capabilities that we now have in place at Ionis to deliver medicines from our wholly-owned pipeline directly to patients; and thirdly, to extend and expand our leadership position in oligonucleotide therapeutics by expanding our drug discovery capabilities through technology, innovation and advances, all of this underpinned by our financial stewardship and our strong financial position that enables us to make all the investments we need to make to ensure for continued success. We are -- 2022 was a remarkable year of achievement -- or 2023 was a remarkable year of achievement for Ionis against a very ambitious set of goals that we set at the beginning of the year. This is just a snapshot of some of the accomplishments, strategic accomplishments that we achieved in 2023, by the numbers, if you will. In 2023, we achieved 2 FDA approvals: in the first half of the year, QALSODY for SOD1-ALS; and then right at the end of the year, WAINUA was approved by the FDA for a rare severe disease called ATTR polyneuropathy, which really capped a truly remarkable year right at the end. In addition, we had 2 very positive Phase III readouts in 2023. The very positive Phase III results for WAINUA in TTR polyneuropathy that was demonstrated at week 66 at the completion of the study, which then was reinforced at week 85; in addition, we reported very positive Phase III data for olezarsen, our treatment for FCS from the Phase III BALANCE study. We also initiated 3 new Phase III programs in 2023, in HBV, IgA nephropathy and in Alexander disease, and we completed enrollment in 4 very important clinical trials, including 2 Phase III trials, our OASIS Phase III trial in hereditary angioedema and our landmark CARDIO-TTRansform study for patients with TTR cardiomyopathy, and we had several additional positive clinical readouts as well. All of this created momentum and sets us up for an even more exciting and eventful, strategically eventful year for 2024. And these are, again, some of the highlights that we're anticipating that's going to happen this year that are really going to drive the needle in our view, two new commercial launches, including our first independent commercial launch by end of the year for olezarsen in FCS. We're looking forward to presenting 2 new Phase III readouts year: the full data set for BALANCE for olezarsen in FCS as well as Phase III data for donidalorsen in our OASIS Phase III trial in hereditary angioedema. We're looking forward to 2 NDA filings this year for FCS, for olezarsen and HAE for donidalorsen, and also from our mid-stage pipeline, several, 5 actually, clinical readouts that are expected this year, 4 programs of which can go to Phase III, advance the Phase III development, assuming the Phase II studies support that, and several additional regulatory filings and approvals both in the United States and outside of the United States. Really a great year that's coming. We are enormously proud of the approval of WAINUA right at the end of the year on December 21 for a severe, rare genetic disease called hereditary TTR polyneuropathy. This was a medicine that was conceived, discovered and developed at Ionis, and now for the first time in our history, we will participate in the delivery of a medicine directly to patients, commercialization, in our first-ever co-commercialization partnership, which is with AstraZeneca. There are very -- there are several very important first-time achievements for this approval that go in addition to the approval itself of WAINUA. The first is, this is the first approval for a chemical platform, a drug discovery platform, that we refer to as LICA for Ionis, with an excellent efficacy profile and a very clean safety profile, which not only bodes extremely well for the success of WAINUA, but it bodes very well for the rest of our LICA platform pipeline, that -- in which we have several drugs in Phase III development and in Phase II development. As I said, it's also the first time we will be participating in the delivery of a medicine that we conceive, discover and develop directly to patients in our co-commercialization agreement, and honestly, I have to say it feels darn good, for the first time in our rich history, to have the Ionis name and brand on the label and on the packaging. But what matters most, of course, is delivering WAINUA to the patients that are looking for a treatment like this for this severe disease, TTR polyneuropathy. We believe we are well positioned to potentially be the treatment of choice for TTR polyneuropathy for several reasons. The first, of course, is a strong, strong clinical profile. We achieved robust target engagement in our clinical trials, and we also demonstrated halting and reversal of disease that was sustained at week 35, week 66 and at week 85 throughout the study. In addition, we are in very well -- we are well positioned to deliver WAINUA around -- in the United States first and then around the globe, to reach as many patients for this severe debilitating disease as possible in our co-commercialization partnership with AstraZeneca. Both companies bring enormous capabilities to achieve exactly that. Ionis is a leader in TTR amyloidosis. We have been for over a decade now, and we will be playing a key role in taking advantage of that -- those capabilities to deliver and be responsible for many functional areas in the co-commercialization agreement, including leading patient services. And of course, being able to take advantage of and utilizing the global commercial reach of AstraZeneca to reach as many patients as possible in the United States and then around the globe will also allow us to reach and be successful in this market. And then finally, our administration profile is a very significant advantage. Not only do we have great efficacy, with a clean safety profile, we are the only silencer that's on the market today in which patients can self-administer themselves at home or wherever they want to be using a simple painless autoinjector infrequently, once per month. In addition, the WAINUA approval lends even greater confidence in a much larger patient population, the TTR cardiomyopathy patient population, which is a Phase III study that's fully enrolled and ongoing. This is a landmark trial called CARDIO-TTRansform. As I said, it was fully enrolled last year, and it is positioned to deliver the richest data set of any treatment for this indication as early as next year. And again, the approval of WAINUA really -- for polyneuropathy, really does set us up very nicely for this really large patient population. Right behind WAINUA are additional, 2 specifically, near-term commercial opportunities that are rapidly approaching, both of which represent the first independent commercial launches for Ionis. Olezarsen, our treatment in late-stage development for the management of diseases related to severely elevated triglycerides, is in Phase III development for a rare genetic form of this disease called FCS, and is also in Phase III development for a much larger prevalent patient population called SHTG. Donidalorsen is also in late-stage development. This is a prophylactic treatment for a rare genetic disease, hereditary angioedema. And then right behind these near-term commercial launches following WAINUA is the next wave of wholly owned medicines that are going to largely be driven by our industry-leading neurology platform. But first, let me say a few words about olezarsen and donidalorsen, starting with olezarsen. We could not have been more pleased with the Phase III data we reported in September of last year in -- for olezarsen in patients with a genetic cause of severe hypertriglyceridemia called FCS. Not only did we achieve robust, greater than 80%, reductions in APOCIII, our target in this study, we achieved statistically significant and robust reductions in triglycerides, the primary endpoint in this study, in the BALANCE study. But what was really remarkable is that we were able to statistically significantly lower, and robustly lower, an outcome measurement of acute pancreatitis in this study. This is what patients fear the most with severely elevated triglycerides, they are at risk for a potentially fatal acute pancreatitis attack. And we were actually able to show, for the first time anyone has ever shown, that a pharmacological lowering of triglycerides can actually reduce the risk of acute pancreatitis, all with a favorable safety and tolerability profile. So based on these great results, we are preparing our dossier to file the NDA for FCS very soon. And assuming we achieve priority review -- as a reminder, there are no treatments for FCS in the United States today -- if we achieve priority review, this would be an approval by the end of the year and would represent our first independent commercial launch. And then right behind FCS is the much more prevalent SHTG population that we're pursuing. This Phase III trial is enrolling well. There are more than 3 million people with SHTG in the United States alone who suffer from the same things that FCS patients from, not only comorbidity, all kinds of comorbidities, but they're at risk for potentially fatal acute pancreatitis event. We're about to complete enrollment in the Phase III trial for SHTG and we look forward to data next year from this trial. Right behind olezarsen is donidalorsen, our late-stage treatment for -- as a prophylactic treatment for hereditary angioedema. Patients are desperately looking for better treatment options for this potentially fatal severe genetic rare disease caused by unpredictable swelling that can be fatal, as I said. Donidalorsen has the potential to meet all the needs that patients are looking for better prophylactic treatments: better efficacy, with the possibility of being attack-free maybe even for the rest of their lives; better tolerability; and better simplicity of the way they administer their treatment and more convenience. And as I said, donidalorsen has the potential to check every one of those boxes. We are looking forward to Phase III data from this Phase III trial OASIS this quarter. And we're also looking forward to presenting additional data on donidalorsen in hereditary angioedema, including Phase III open-label extension data later this year. I can tell you that the vast majority of patients who entered the OASIS Phase II trial, completed the Phase III trial and elected to roll over into the open-label extension. That's a good sign. In addition, we're planning to share data from what we call the switch study for donidalorsen. This is the first time anyone who's ever conducted a clinical trial like this, in which patients who are on other prophylactic treatments for HAE were actually invited to enter a clinical trial for donidalorsen and switch their treatment from one treatment, from their existing prophylactic, to donidalorsen. We are very impressed with the -- how quickly the study enrolled. And we're also impressed with how much people are staying on the treatment and wanting to stay on the treatment, which obviously is also good news. And in fact, the news was -- there was so -- it caught our eye so much that we actually have now expanded the switch study to add more patients and to extend the treatment for these patients. Following WAINUA, olezarsen and donidalorsen is the next wave of wholly-owned medicines that we're planning to bring to Phase III and to the market, largely going to be driven from our industry-leading neurology pipeline. As you all know, the unmet need in -- for better treatments for neurodegenerative and neurodevelopmental diseases is vast, right? We have a leading, and not just a leading, a proven platform for delivering transformational medicines for neurological diseases with 3 approved products now, 2 of which address central nervous system diseases, SPINRAZA for spinal muscular atrophy, continues to be the treatment of choice for SMA. And then just last year, we had QALSODY approved, the only approved medicine for a genetic cause of ALS. Right behind these 3 medicines is a deep pipeline of 11 medicines in clinical trials today from Phase II to Phase III, for broad indications like Alzheimer's and Parkinson's to rare genetic diseases like ALS and Alexander's disease, 6 of which we anticipate will be wholly owned by the end of this year, wholly owned by Ionis. This is a vast area, neurology, and we are focused on creating efficiencies and synergies by focusing on specific areas of neurology to maximize success, to build synergies, as I said. And the 3 areas we're focused on today are in rare pediatric neurology and in dementia. In rare pediatric neurology, we already have a Phase III program for a disease -- a severe fatal leukodystrophy called Alexander disease, and we're planning to start -- there's 2 additional clinical trials this year in pediatric neurology, one for a disease called PMD, another fatal rare leukodystrophy, and for MECP2 duplication syndrome. And then secondly, for dementia, we already initiated our clinical program for Prion disease, and we're anticipating to start a new clinical trial, another clinical trial for a new drug, a new target for dementia for a large patient population, actually, by the end of this year. And then coming behind pediatric neuro and dementia will be the next wave of neurological diseases we plan on penetrating, including neuromuscular diseases and peripheral neuropathies as well as motor diseases, and they're not that far down the road before we start moving into those areas. In addition to making great progress against our corporate -- our strategic objectives of building the wholly-owned pipeline and delivering our medicines ourselves, we're also making great progress in our third strategic objective to expand and diversify our technological drug discovery capabilities to further extend our leadership position in oligonucleotide therapeutics. And we're doing that, shown here on this slide, by increasing the range, the capabilities for drug discovery, and we're already there. We have new backbone chemistries for antisense oligonucleotides that are in development today that are extending durability to allow for semiannual, potentially annual dosing. We have our first Ionis derived chemistries for siRNAs that will hit the clinic this year as well, and we're making great progress in gene editing as well. We're also making great progress in optimizing delivery for the technological advancements and investments we have made over the last few years, including opening up tissues and cell types that have historically been calcitrant to uptake of oligonucleotide, such as cardiac myocytes and skeletal muscle. And in fact, we've moved our first cardiac myocyte targeting -- targeted delivery molecule into development late last year, and we're making great progress in traversing the blood-brain barrier using targeted delivery approaches to further -- to allow us to be able to treat CNS diseases with subcutaneous administration, further extending our leadership position in neurological diseases. And all of this is focused on expanding our therapeutic opportunities for both existing franchises as well as creating new ones, such as in pulmonary diseases and in renal diseases. So 2024 is set up to be another great year, just like 2023 was, with many key value-driving events that are anticipated, including Phase III clinical data events that are -- that's highlighted by, this quarter, the Phase III results for donidalorsen in hereditary angioedema; several mid-stage pipeline readouts, any ones of which, if positive, would advance into Phase III development; many regulatory actions, including the potential approval of olezarsen in FCS late this year; and new product launches -- WAINUA for TTR polyneuropathy in the United States, olezarsen for FCS in the United States and then QALSODY for SOD1-ALS outside of the United States. We are laser-focused on achieving all of these objectives, but we're also laser-focused on continuing to produce great data and data on time from our rich Phase III pipeline. This time last year at the JPMorgan conference, I presented a pipeline that had 6 medicines for 8 disease indications in Phase III development. Today, I'm presenting you with a pipeline of 9 medicines for 11 disease indications in Phase III development for both large indications and severe rare indications, setting us up for a steady cadence of Phase III data readouts this year, next year and for many years to come. All of this sets us up to achieve our vision to deliver a steady cadence of transformational medicines to patients to the market in the near term, in the midterm and sustainably into the long term as shown on this slide, both from our wholly-owned pipeline, shown in purple, and from our partnered pipeline as well. So to conclude, we are well positioned to drive next-level value at Ionis. We're making tremendous achievements. The progress we're making is truly remarkable across the business, and we're doing so, and we'll continue to do so, by focusing on our wholly-owned pipeline to deliver our medicines directly to patients ourselves, through our commercial capabilities which are now in place, to expand and diversify our technological capabilities for drug discovery, and to continue to strengthen and utilize our strong financial position to be able to make all the investments we need to make to drive next-level value for all stakeholders. Now before finishing, I'd just like to say a couple of words. The progress and the achievements we've made at Ionis, really over the last couple of years, especially last year and setting us up for this year, have truly been remarkable. However, none of this would have been possible without the outstanding and deep collaborations with scientists and clinical investigators around the globe. None of this would be possible without the participation of patients and families who support our programs and participate in our clinical trials like the ones you see on this slide. And finally and equally important is that none of this will be possible without the dedication, perseverance and commitment of the Ionis employees, 1,000 strong, who work around the clock to deliver these medicines to patients and to deliver better futures for patients around the world. Thank you.

Great. Thanks for the presentation. So maybe we can start with eplontersen, or now WAINUA?

WAINUA.

Heading into this launch in ATTR polyneuropathy, can you just expand on the commercial strategy?

Yes. So for polyneuropathy, the prevalence is estimated to be about 40,000 people around the globe. Most of these patients actually have what we referred to as a mixed phenotype. So they have a heavy cardiac involvement, cardiomyopathy as well as polyneuropathy. What's striking is that the vast majority, more than 80% of these patients, are actually not on treatment today, right? So this isn't a switch market. This is actually a market or an area, a disease, that needs to be developed, right, a market that needs to be developed. And we have to go out and find those patients and deliver WAINUA to those patients. And we have good -- we have our strategies in place along with AstraZeneca to go global and to find these patients and to deliver WAINUA. So it's really a market that needs to be developed. It's not a switch market, like I said.

Maybe thinking about the U.S. Can you talk a little bit about how you and AstraZeneca intend to navigate the expected difference in out-of-pocket costs for patients in Part D relative to your competitor in Part B?

Yes. Part B versus Part D drugs, for many years, this has been an uneven playing field and really an unfair situation for patients who have significant out-of-pocket expenses for self-administered drugs versus drugs that are administered by a health care provider. And of course, as you said, this is a U.S. market thing and it's also only for Medicare patients. What we know is that a small portion of patients with TTR polyneuropathy are actually on Medicare. So the vast majority are actually in commercial. What we also know is that the Inflation Reduction Act is now leveling the playing field and really evening the playing field, if you will. The out-of-pocket expenses have greatly been reduced starting this year as the IRA kicks in to normalize, if you will, out-of-pocket expenses for patients on self-administered Part D drugs, and it's going to go down further next year. So we think that that unfair disadvantage for patients who want to be able to control their own disease and administer treatments themselves and not have to go to a health care provider is coming to an end quite honestly. So we're very pleased about that. We think that's what's best for patients.

Great. So if that's part of the U.S. commercial landscape, can you maybe compare and contrast the commercial landscape outside of the U.S. in ATTR polyneuropathy?

Yes. So I think the biggest differences for patients that are outside the U.S. versus inside the U.S., I guess there's a few. One is that most patients outside the U.S. are treated actually by centers of excellence, rare disease centers. They get assigned to those centers. So you'll see them concentrated in those, in centers of excellence, if you will. The second is that it's more endemic to specific geographies outside the U.S., Sweden, Portugal, Brazil, Japan, high concentrations of patients with TTR polyneuropathy. It's much more uniformly distributed in the United States. And you see a lot more treatment in the United States outside the centers of excellence in rural communities and so forth. And I guess the third thing is that there's a treatment that is on the market outside the U.S. that's not on the market in the U.S. It was not approved in the United States. That's tafamidis, which is approved for TTR cardiomyopathy. It's also approved in certain geographies outside the U.S. for TTR polyneuropathy. And I think it's only for stage 1 disease too, sort of -- a small segment. It did not have a positive Phase III readout in polyneuropathy, that's why it wasn't approved. But I think those are pretty much the main differences as I see it.

See, you mentioned cardiomyopathy, and we've got the first outcomes readout for a TTR silencer coming up in the next several months here. Can you talk about key differences between your CARDIO-TTRansform trial and the HELIOS-B trial?

Well, what we know, I mean focusing on our trial, is that we have the -- we strongly believe, as does our partner AstraZeneca, we have the right trial design for this large patient population, the CARDIO-TTRansform study. It's the largest, so that's a differentiator, by far. The largest study ever conducted in this patient population. Why is that important? Well, that's important because all contemporary programs, clinical programs that are developing new treatments for TTR cardiomyopathy, were powered originally based on powering assumptions derived from the tafamidis ATTR-ACT study that was done nearly a decade ago. At that time, patients were being diagnosed way late. And as a consequence, they were succumbing to their disease very quickly. Well, thanks to better disease awareness and better methodologies for diagnosing this disease, patients are being diagnosed much earlier and they're living longer. So that's okay, but you need to do bigger studies to get the risk reduction in cardiovascular outcome that you need to show to have a viable product. And that's what we have, we have the largest study ever conducted, which increases the probability for a successful outcome, period, and also provides -- will provide the richest data set ever conducted in this landmark trial, allowing us to be able to look at subgroups such as how does WAINUA provide value on top of tafamidis? How does WAINUA produce cardiovascular value for cardiovascular disease as a monotherapy, hereditary patients versus the wild-type patient population and so forth. So I think the biggest difference is really the fact that we have a landmark -- the largest study ever conducted, which is poised to produce the richest data set ever in this therapeutic area.

And you've talked about the potential for data from that trial as early as the first half of '25. What are the conditions that would trigger the earlier readout? And when should we expect the study to complete if it's not stopped early?