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

I think we can get started. My name Yanan Zhu. Thanks, everyone, for being here. We are lucky to have the Ionis Pharmaceuticals team here at our conference. And with me for this fireside chat is CEO, Brett Monia. Thanks, Brett for being here. .

It's a pleasure to be here, Yanan. Thank you. .

Great. So I think for people who are familiar with the Ionis story, they appreciate the company that a very important stage today, you're looking to commercialize your first wholly-owned product in just a few months. And next year, we'll be hearing about data from couple of indications affecting millions of people. So that -- those are all big events. I mean at this juncture, could you talk about the setup of the Ionis story? And what's your vision for the company in one to two years from now?

Happy to, Yanan, and thanks again for the opportunity to speak on behalf of Ionis team. So we've accomplished a great deal over the last little bit, last couple of years, specifically in achieving our vision to be become a fully-integrated, including a commercial organization of excellence that matches our history of excellence in R&D. And to be fully-integrated and to solidify our position in RNA-targeted therapeutics. And that vision is -- it's not just that, of course, to enable that it is to deliver a steady cadence of really important, meaningful medicines to patients to drive value for all stakeholders, including our shareholders. And we're off to a great start. The approval of WAINUA in December of last year, now launched. It was launched in January of this year is off to a great start. And it was a key step forward to full integration. It's our first ever co-commercialization partnership in our history. We have a very meaningful role with our [ Coke Coco ] partner, AstraZeneca in the launch of renewal for ATTR polyneuropathy in the U.S., and it's going really, really well. We also had the approval of QALSODY for a genetic cause of ALS last year with our partner, Biogen, a drug that was conceived and discovered at Ionis and then licensed to Biogen as the only treatment today. The only disease-modifying treatment for any cause of ALS, let alone the only treatment for a genetic cause of ALS, solidifying our position or the validation of our platform to CNS diseases. Right behind SPINRAZA is now QALSODY a whole host of other CNS diseases. We've also had multiple too specifically this year, very positive Phase III readouts, which sets us up for our first independent commercial launches. Olezarsen for FCS, now under review with the FDA. Very positive Phase III readout and then donidalorsen as a prophylactic treatment for hereditary angioedema. Supporting these two programs, Olezarsen and donidalorsen, as well as WAINUA is the establishment of a really strong, solid commercial organization and medical affairs organization that's in place and prepared to launch FCS independently in December, assuming approval, and then donidalorsen next year and then more to come. Those are near-term big successes upcoming launches. We also have one of the richest Phase III pipelines in biotech, a strong pipeline of nine or so medicines for highly prevalent diseases, to your question, millions of people suffering with forms of cardiovascular disease and so on and metabolic diseases and also for severe rare diseases. And we expect that Phase III pipeline to expand actually next year when we move our Angelman's program into Phase III development in the first half of next year. The Angelman's data that we reported this year from Phase II was remarkably supportive of advancing to Phase III. And this represents what we believe are cornerstone of our wholly-owned CNS pipeline. So stay tuned for that. And then lastly, I'd say we're very proud and pleased with the advancements we're making in technology to expand and diversify our technology to strengthen our leadership in RNA-targeted therapeutics, advancing new chemistries for CNS diseases so that we can deliver our drugs intrathecally, but less frequently semiannually or even annually dosing with intrathecal delivery, and we're also approaching systemic delivery to CNS for CNS diseases. It's imminent. We're expecting our first candidates to come forward next year for systemic approaches for CNS diseases. And then targeted delivery to muscle is coming very soon for cardiac myocytes for heart failure for neuromuscular diseases to expand our neurology pipeline. All of this is setting us up to achieve our vision to be the leader in RNA-targeted therapeutics and a leading fully integrated biotech.

Well, that's a lot on company's plate. It is very exciting. Maybe let's just start with ATTR cardiomyopathy. I guess it's a topic on people's mind given competitor, Alnylam's presentation of data, Helios-B data at the ESC meeting last Friday. Could you share your overall thoughts on that data?

I think it's -- the data is strongly supportive of the silencer class for ATTR cardiomyopathy. The results were very strong on the primary endpoint, the composite of the cardio clause mortality plus CV hospitalizations. And I thought that there were other strong trends favoring the silencer requests in secondary endpoints and exploratory endpoints. I think it bodes very well for this class. Eplontersen the version of a WAINUA that's being developed for cardiomyopathy is the same drug. We don't refer to it as WAINUA until it's approved, is being evaluated in the largest, most comprehensive Phase III trial ever conducted in ATTR cardiomyopathy. So it's set up to provide the richest data set in not only for the primary endpoint, but the secondary endpoints, the subgroups, combination, monotherapy and imaging studies and so on. That are all underway. So the success of the first silencer to reach and get through Phase III development really bodes well for eplontersen, and we're evaluating all of our options right now.

Got it. Got it. Could you maybe talk about the -- based on Helios-B data, those initial insights on monotherapy activity versus combination versus tafamidis alone. And then what's the implication for commercialization? And how do you see the silencer class entering the market?

We believe that the silencer class will deliver the most meaningful benefit in all forms of TTR amyloidosis. I mean we're seeing it in polyneuropathy, right? The silencer class is delivering the greatest efficacy for TTR amyloid buildup that causes polyneuropathy. And we expect the same thing for cardiomyopathy. It's logical to block the production of a toxic protein is going to show greater, really, really strong efficacy. And I believe that the first silencer class that read out in Phase III last weekend, the full data strongly supports the class. That study was a relatively small study. We have a study that's more than doubled the size. So it's strongly powered for not only the primary endpoint, of course, because that was hit with a smaller study, but also the subgroups, as I mentioned before. As monotherapy, it looks strong. There was a positive outcome in monotherapy in the extended portion of the study into the open-label extension and there were strong trends in combination usage as well favoring combination usage. I think it's inappropriate to compare, however, Kaplan-Meier curves, timing to improvement in mortality, which I know everyone is -- many people are focused on, compared to drugs that were evaluated 10 years ago. And looking at timing of separation have occurred from 10 years ago to today, I'm referring to a stabilizer tafamidis. It's a very different patient population. Patients are being diagnosed much earlier on in their disease. So they live longer naturally so the placebo group is going to go longer before it starts to really inflect and you start seeing an -- this meaningful increase in mortality. So you have to do much, much longer studies or bigger studies to do that, which sometimes are impractical in clinical trial design. We believe that with -- with today's patient demographics that the silencer class will deliver better data than stabilizers. And I think that that's going to bear out in the real world. setting eventually. And we believe that based on the size of our study, we're going to have a lot of data to support that conclusion when we read out cardio transform. As far as market strategy, there's a strong unmet need for better treatments for TTR cardiomyopathy, all patients either get little benefit with stabilizers or they eventually progress within a few years. They need better treatment options. I believe the silencer class will support newly diagnosed patients as a monotherapy in many patients. I believe that for patients that progress in -- on stabilizers will go on to silencers and as I mentioned, all patients eventually progress. So that's a big, big unmet need. And then I also believe that there's going to be value in combination data. And as I said, there's strong trends that combination -- patients on combination in the study that read out was favorable. And we think that with our size of our study, we're going to have potentially even stronger data. So I think it's all on the table, monotherapy combination usage and progressors.

Great. That's super helpful. And then maybe to follow up on the last point about the trend in combo data set. That's admittedly the probably the weakest data from the whole data set in combination patients, you have a larger study. But I was wondering what is the benefit are you shooting for statistical significance in that subgroup? Or it doesn't have to be like with a stake to support combo use?

Like all clinical studies, our primary endpoint is what our statistical analysis plan is focused on. We're set up and we're designed to achieve statistical significance against the primary endpoint, which is CV hospitalizations and CV mortality a composite end point. Secondary endpoints include monotherapy include combination data and other endpoints, functional endpoints as well. And we have a lot of exploratory end points, too. So we're not necessarily powered to demonstrate statistically significant benefit in the randomized portion of the trial on a primary endpoint in combination use. That's a secondary endpoint. With that said, we're going to have the richest data set, the largest, by far, of combination usage, and we're going to be evaluating the combination usage of eplontersen with tafamidis in the composite endpoint in the mortality endpoint, hospitalization endpoint, biomarkers, functional endpoints like 6-minute walk test. And we also have several imaging studies. Large well-sized imaging studies, MRI, Scintigraphy as examples in which we have over 100 patients in those studies, both combination as well as monotherapy and those studies are going to be -- allow us to make potentially judgments claims on how's the amyloid buildup in the heart is being affected by monotherapy versus combination? Are we clearing the amyloid faster out of the heart. Is a heart functioning better, ejection fraction. Those types of echocardiography. Those types of endpoints. All that data is going to, we believe, will provide a compelling case for combination usage with or without that sake. It's going to be very important for cardiologists who are prescribing are going to advocate for combination usage if they believe that patients are going to do better based on the totality of the data.

Great. Great. Yes. That's super helpful again. So any thoughts on whether you might read out cardio transform early?

It have been [indiscernible] days since the data -- all the details came out. We and our [ Coco ] partner, AstraZeneca, are reviewing all of the data in detail as much as we can, of course, reviewing our own data, too. The study has gone very well. We're on track with our events in the study. We like what we're seeing. We're still evaluating the data. Our base case remains -- base case, meaning the plan still today as it has been, as we've been saying through this year, has still been to read out through 140 weeks, the full duration of the study, which would be around mid-2026. And in that base case, of course, allows us to take full advantage of the advantages -- one of the big advantages we have is the size of our study and the depth of data that we expect to come out of it. So we're still -- and we're still reviewing the data. That doesn't rule out the possibility of an early read out as we continue to review the data and really get into the nuts and bolts, but that's still our base case. If we did do something different either in the statistical analysis plan or an early readout from the study. We'd first obviously get a regulatory FDA advice and before making any announcements. But it's in process, and it's going well.

Great. Great. And lastly, when we anticipate that data read out and the data, you have articulated all the benefits of having a larger data set and also the differentiated point about imaging studies and what role that might play. But on the efficacy -- is your assumption or should our default assumption be that all silencer should be the same. Or could there be differentiation? .

Well, there's only two silencers that I'm aware of that are in late-stage development. So I wouldn't I can't speak for all silencers, but I believe that the two there in late-stage development, it appears to be one of them are showing equivalent reductions in transthyretin levels that are robust, greater than slightly above 80% for both with really good safety and tolerability. So I think the differentiation will come down to other factors for eplontersen, we're happy to have several potentially differentiators. We already touched on the data set that we're going to get from the largest Phase III trial ever conducted in this patient population and the subgroups and all of that. We really like the sustained rapid reduction in TTR, but the sustained durability of the TTR reductions. There's -- it's really clamped down at the 80% plus reduction. We're not seeing any waning of TTR. We think that that's going to really bode well for inefficacy long term. We also -- the imaging studies I mentioned I think are going to be very important to understand the mechanism, what's happening behind the clinical endpoints. What's really resonating well in the patient in the health care provider community is the ability of patients to self-administer using a simple auto injector, not having to rely on a health care provider to make an injection that they're perfectly capable of making themselves as infrequent as once per month, simple low-volume painless auto-injector. That's resonating really well in the polyneuropathy launch, and we think it's going to resonate really well in the cardiomyopathy launch. And then the last differentiator, I would say, and it was purposefully why we did this [ Coco ], one of the reasons why we did this [ Coco ] is the combination of our experience in TTR amyloidosis and in our RNA platform, coupled with the global presence of AstraZeneca commercially as a powerhouse in cardiovascular disease to reach markets fast around the globe will get to patients more patients faster. And all that we think will contribute to a profile that I think will be meaningfully differentiated.

Great. Great. I was going to ask about the at-home administration that convenience factor how had that borne out in we knew are launched. So I think you just mentioned it's resonated very well.

It has resonated extremely well. I mean, obviously, it starts with efficacy. WAINUA has shown remarkable efficacy in reversing polyneuropathy improving quality of life as well as neuropathy progression with excellent safety and tolerability. The auto injector is -- has resonated very well, not just with patients, but also with health care providers who are very busy staffs and physicians that don't need to have -- to see their patient to do a subcutaneous injection that takes 10 seconds. But it's not at home that's most important, that's nice. What's really most important is the ability of the patient to self-administer. Anybody can invite a health care provider to their home and ask them and schedule appointment to have them do a subcutaneous injection, what's the point. The ability of the patient to self-administer at home, at work, on vacation, while they're hiking, I mean really, but a simple pen in their backpack is what's really resonating with the health care providers and the patients.

Got it. Great. So let's move on olezarsen for FCS and also for SHTG. So Arrowhead just presented also at the ESC meeting Phase III data for FCS. Could you share your thoughts on the data? How should we compare their triglyceride reduction and acute pancreatitis benefit with olezarsen .

So as a reminder, recall that we reported highly detailed results for olezarsen in FCS at ACC in April and published in the New England Journal of Medicine two publications, actually. And what we reported was really substantial remarkable reductions in triglycerides, in FCS patients. Essentially elimination of acute pancreatitis in patients treated with olezarsen versus placebo. I think there was one event that happened a year after starting a olezarsen, one event of AP, a year after treatment started in the treatment group versus 11 that we're starting within a few weeks after -- in the placebo group. So it was a real shutdown of acute pancreatitis, all with excellent safety and tolerability, greater than 80% reduction in hospitalizations. These patients don't feel well, whether or not it's an AP event that drives into the hospital or they're just feeling awful. 86% reduction in hospitalizations compared to placebo and other advantages. The results we saw this week on a competitor program does not in any way reduce our excitement, our confidence our olezarsen will be the standard of care for FCS and eventually SHTG. When comparing the data, it is really important as we all know, to compare apples-to-apples, placebo-adjusted reductions, not versus baseline, but placebo-adjusted reductions across different programs. Of course, the caveat of the risks associated across trial comparisons understood. But let's just compare placebo-adjusted reductions in triglycerides at similar time points at the same time point, like at 12 months, for example, what we're seeing is that olezarsen producing equal or even slightly better triglyceride reductions when you look at placebo-adjusted reduction levels. We're also seeing greater reductions in acute pancreatitis and a faster onset of action of producing reductions, eliminating acute pancreatitis attacks in our study. All with excellent safety and tolerability and with the added advantage is the convenience of self-administered auto-injector that I already highlighted. So we're thrilled that olezarsen was accepted for priority review by the FDA with a PDUFA date of December 19 of this year. I'm also pleased to say that our commercial organization is in place and ready to launch as soon as we get approval for olezarsen, representing our first independent commercial launch for Ionis.

That's great. So I guess you also have the SHTG data next year and then launch after that. But of course, I think the competitor product also has the data obviously, are positive and will be also launched into FCS. How do we think about commercial launches of all those indications.

Well, I can't speak for competitive program what their strategy is or so on. I do want to emphasize that we're first to market. For FCS, we're 9 to 12 months ahead of the leading competitor program, and we don't see any advantages in that program from a differentiation standpoint. So a year ahead and in SHTG -- and as a reminder to everybody, SHTG is not a rare disease. It's millions of people in the United States alone that suffer from the same things that FCS patients suffer from, which is severe abdominal problems, pains, cognitive deficits, but mostly of high risk for acute pancreatitis that puts them in a hospital for a week plus at a time. For SHTG, really big, highly prevalent disease work 2 to 3 years ahead with first-mover advantage. So our strategy for Ionis is to get FCS launched to strengthen our position in this field of endocrinologists who treat patients with high triglycerides, establish our foundation there for this disease. And then with the SHTG Phase III data expected in the second half of next year with a submission expected next year as well for approval, then the transition into the large highly prevalent disease, SHTG rapidly. And again, first mover advantage, we think here is a key differentiator. The SHTG Phase III trial was fully enrolled this summer, and we're expecting and everything is going really well. .

Maybe switching gears again to donidalorsen for HAE. Mainly the question is how close are you to following that that NDA to FDA?

We have submitted. So it's in. It's been in for a little while now. And as soon as we get acceptance in the U.S. with the FDA, we'll put an announcement and we wait for acceptance, before we make announcements for submissions. And yet, and as a reminder, we have an ex U.S. commercial partner for donidalorsen as a prophylactic treatment for HAE Otsuka. Otsuka is planning to submit for approval in Europe soon and we expanded this year our partnership with Otsuka for donidalorsen for Pan Asia and they're working on submissions for Japan as well as in other territories as well later this year. We presented the Phase III program for donidalorsen in HAE at Yaki in July and we were very pleased with the comprehensive presentations we gave, both the primary endpoints of the Phase III trial, the long-term open-label extension data, which showed continued improvement for donidalorsen up to 90% plus reduction in HAE attacks with long-term treatment and then the switch cohort. Patients that are on current prophylactic treatments who switched over to donidalorsen in a prospective trial that we conducted purposefully because the U.S. market is a switch market, we wanted to gather the data and we wanted to know patient preferences. We had a very successful study. We saw more than 60% further improvements in reductions in HAE attacks versus standard of care in the U.S. market today, [indiscernible] and patient preferences at the end of the study, which do you prefer your previous treatment or donidalorsen. More than 80% of the patients said that they prefer donidalorsen versus their previous treatments. And I'm pleased to say that all these patients continue in the switch cohort essentially, all these patients in the switch cohort, which will continue to a potential launch as well as our open-label extension study. So we're really pleased with the overall profile for donidalorsen.

Got it. Got it. If we may touch on pelacarsen, this is your partner program with Novartis, targeting Lp(a). I think there's more and more interest as we're getting close to that data. So mainly people wanted to know what does success look like for this first-in-class study and what's the threshold for clinically meaningful change on the primary endpoint of CV event rate?

Yes. Pelacarsen is set up to be a first-in-class actually first in any class. There are no treatments for Lp(a)-driven cardiovascular disease. This is a disease caused by an independent risk factor, high levels of lipoprotein (a) that cause atherosclerosis and pro-inflammatory effects in the vasculature, causing heart attack, strokes, et cetera in which there are no treatments available. This is a disease that afflicts tens of millions of people around the globe who have normal cholesterol, nondiabetic, this is the cause of the disease. What we showed in Phase II development was that we were able to normalize 98% of patients with indication. We're drive their Lp(a) down to normal levels. This is a threshold effect, right? So lower is not necessarily better for Lp(a). If you get them below the threshold of risk, they should be fine and we think that we're going to replicate in Phase III. Secondary prevention patients with cardiovascular disease with high Lp(a) levels above 70 milligrams per deciliter. We want a statistically significant benefit in mortality and hospitalizations versus placebo. With that said, typical benchmarks for cardiovascular outcome trials are usually 20% or so outcome risk reduction, which, of course, would be very nice to see.

Got it. Great. And then perhaps on Angelman syndrome. I think this is very interesting topic. You reported positive data in July. But then before that, partner Biogen decided not to opt in. There has been a lot of questions around that. Could you talk about your -- what's the -- what's surrounding that Biogen decision and your excitement level for this program?

That's a question for Biogen. I don't -- Biogen is a great partner with Ionis. They've been a great partner for 10 years plus. We developed -- we discovered, conceived developed SPINRAZA. They've done a great job in launching SPINRAZA. It's a standard -- it's a standard of care for SMA. Today, I don't know if you saw an announcement came out. We now evaluated high-dose SPINRAZA in the DEVOTE trial. The high dose of SPINRAZA has shown even greater benefit in patients with SMA evidence of benefit compared to the commercial dose. So we're really excited about what Biogen is doing for SMA. QALSODY, they're doing a great job in launching QALSODY [indiscernible] program, et cetera. Angelman's program Biogen chose not to license the program and really I would need to ask leadership at Biogen as to why they didn't do that. Obviously, didn't meet their internal metrics to go to Phase III. But recognizing that people would have the exact question you just asked me Yanan, one thing that what we wanted to do because we conceived our ION582, our Angelman's drug and discovered it and developed it all along. Well, we want -- so we're in control of all the data. What we wanted to do is get that data out there, so people can see it to show that how compelling the data is. And that's what we did at ASF. We presented a comprehensive review of all the data. The clinical data, the biomarker data, various ways to measure progression of Angelman syndrome disease. Bayley-4 Vineland assessments, ORCA assessments, SAS CGI assessments. They're all favoring benefit across all subdomains, communication, cognition, motor function with excellent safety and tolerability. And we also had experts there to speak about the importance of the potential importance of this medicine for Angelman syndrome key investigators in this area. So that's a question for Biogen. The data is out there. It's very -- we believe it's very impressive. We are looking forward to having our end of Phase II meeting with the FDA soon and then to launch into Phase III development first half of next year. The Angelman program represents the cornerstone of the wholly-owned Ionis CNS pipeline. A pipeline that's validated with SPINRAZA, QALSODY and so on. So we're really excited about it, and we're looking forward to sharing updates on the program as we go forward.

That's great. That's great. So we didn't have time to really touch on any of the earlier-stage programs, I think you have MsPA backbone for longer duration in your neurology program, you have siRNA maybe for heart failure indication. Just in general, as you mentioned, the CNS, muscle, ortho, those are kind of new areas ASOs. Maybe just give us an overview -- a preview of what's to come in new technology front?

Absolutely. As I said in my opening when I moved into this role as CEO of Ionis in 2020, I focused the company on two key objectives to really drive value. One is to be fully-integrated and to hold on to our medicines ourselves and deliver them to the market, and that's in place. We're about to independently launch olezarsen with more to come and then to diversify and expand our technological capabilities, and we've done that. We're on the verge of initiating our first Ionis discovered using Ionis medicinal chemistry and screening capabilities siRNA into clinical development this year for a target that we think is better suited for SI versus ASO. We are also about to initiate our first new backbone chemistry called MsPA, in a clinical trial. And for CNS disease, that allows us to dose -- we think will allow us to dose semiannually, maybe annually intrathecally for CNS diseases. In addition, as I mentioned in my opening, we are making great progress in strengthening our leadership in CNS diseases to deliver our medicines potentially systemically, subcutaneously or intravenously using platforms that we in-license such as Bicycle and [indiscernible] and other capabilities to overcome the barrier, the blood-brain barrier for CNS diseases. And we're really pleased with the progress we're making in delivery of ASOs, siRNAs to skeletal muscle, to expand on neurology pipeline for neuromuscular diseases as well as for [ target ] cardiac myocytes directly for heart failure. And we have two of these muscle targeting programs either in IND-enabling toxicology studies right now or the first one. And then the second one about to reach IND-enabling toxicology studies very soon. So stay tuned for that. It's -- the investments we're making are panning out, paying off, and we're looking forward to getting them into the clinic really shortly.

Great. Great. With that, I think we're out of time. Thank you, Brett, for your time and insights.

Thanks, Yanan. It was a pleasure. .

Great.