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

All right. Good afternoon, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Michael Ulz, one of the biotech analysts here. And it's my pleasure to introduce Brett Monia, CEO from Ionis Pharmaceuticals. Just as a reminder, the format for today is a fireside chat. So if anyone has any questions, please feel free to raise your hand, and we'll address your question. But before we get started, I just need to read a quick disclaimer. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, Brett, thanks for joining us today. And maybe to start, I'll just hand it over to you for some introductory comments, and then we can hop into the Q&A.

Thanks, Mike. It's really a pleasure to be here and to discuss the great progress we're making at Ionis. And we've had a lot of success over the last couple of years in working towards achieving our vision to become a leading fully-integrated biotech company and solidifying our leadership position in RNA-targeted therapeutics. Over the last less than 2 years, we've had 2 very important drug approvals, that are now launched. The approval of WAINUA in hATTR polyneuropathy in December of last year, was launched in January. And we're really pleased with the uptake for -- that's occurring in the launch. There's a lot of enthusiasm for this drug. And it really sets us up for a highly successful outcome in the much more prevalent TTR cardiomyopathy space. Midyear last year, we also had the approval of QALSODY for SOD1 ALS, the first-ever treatment for a genetic cause of ALS, and really the only disease-modifying treatment for any cause of ALS, solidifying our leadership in CNS drug discovery and drug development. This year we also reported more positive data, positive Phase III data, olezarsen in FCS at the ACC. We're prepared to launch, assuming approval in December. And that represents our first independent commercial launch as we move to full integration for Ionis. And we also reported very positive Phase III data for donidalorsen in hereditary angioedema. And the NDA is now submitted and we're looking forward to a potential approval around this time next year. The Phase III pipeline is second to none in biotech with 9 drugs in Phase III development all firing on all cylinders. And we're looking forward to expanding the Phase III pipeline early next year when we advance our wholly-owned Angelman syndrome program into Phase III development, as early as possible next year, but certainly in the first half of next year. The commercial organization for our independent launches is in place. We're ready to launch. Everything is exactly where it should be. And we're making tremendous progress in really advancing our technology base, expanding and diversifying our technology, to really advance new chemistries for CNS diseases, cardiovascular diseases and more. And I'm happy to talk about that. So we're really excited about where we are and the successes we've had of late. And we're very much looking forward to the near term as well as the long-term future.

Yes. Great. Thanks for that introduction. And maybe we can start with WAINUA. As you mentioned, recently launched with your partner AstraZeneca. Maybe you can just talk about your responsibilities in the launch and maybe expand a little bit on some of those early favorable launch trends?

Yes. So just to level-set, as a reminder, WAINUA represents our first step for commercialization for Ionis. We've always been known to be for excellence in research and development. And we're now building and going to match that excellence in commercialization. And the first step was to do our first-ever co-commercialization partnership in our history. And that's with AstraZeneca for WAINUA, for TTR amyloidosis. The co-co is off to a great start. The roles and responsibilities between Ionis and AstraZeneca have evolved over time, as designed. We're running the Phase III programs. We ran the polyneuropathy Phase III study, NEURO-TTRansform, and we delivered. And we actually, we're responsible for regulatory and get the drug approved in the United States. We're running the CARDIO-TTRansform study as well. So that's a lot of responsibility. We've since passed over the regulatory responsibilities to AstraZeneca to handle ex U.S. approvals for neuropathy, and then ultimately, cardiomyopathy. Medical affairs, we started. We took the lead in medical affairs. We've since shifted that over to AstraZeneca. And on the commercial side, we're responsible for patient engagement responsibilities, so we're the face to the patient community. AstraZeneca is responsible for the sales team in the field. And of course, that's in the United States. Outside the United States, AstraZeneca is responsible for all commercial activities. We're focused on the U.S. market right now. The WAINUA launch is off to a fabulous start. We couldn't be more pleased. The launch is hitting or exceeding all of our, when I say our, Ionis-AstraZeneca, all of our preset KPIs or performance metrics that we set out in advance. The receptivity, the enthusiasm for WAINUA has been very strong. We're seeing a real, real strong liking for the data, of course, the efficacy, but also the ability of patients to self-administer. That's going very well. We like the mix of prescribers, neurologists, cardiologists, gastroenterologists and more. And our strategy to focus on newly-diagnosed patients versus really focusing on switches is paying off really well. More than 80% of patients today with TTR polyneuropathy are not on treatment, so it made sense to focus on newly-diagnosed patients. And the team of -- Ionis' expertise in our platform in TTR amyloidosis, coupled with AstraZeneca's commercial strength, their omni-presence around the globe, is really paying off to find patients. So we're really pleased with the launch. We're seeing -- and in addition to newly-diagnosed patients, we are seeing switches from other treatments and combinations too. But mostly, it's newly-diagnosed patients, and that's exactly what we set out to do.

Yes. Great. Maybe just sticking with WAINUA. You mentioned the ongoing CARDIO-TTRansform study in ATTR cardiomyopathy. Maybe you can just give us some update there on how that progress is going, and then any updated thoughts on potentially stopping that study early?

Certainly. The study is going very well. As you know, Mike, this is the largest study ever conducted in ATTR cardiomyopathy. And it is the largest to account for the fact that the patient demographics has shifted from years ago when patients were being diagnosed very late in their disease, and today they're being diagnosed earlier in their disease because of better disease awareness and better methodologies to diagnose the disease. And therefore, you need to do bigger studies to have the best datasets. And that's exactly where we are. We think the size of our study is very well designed to provide the most comprehensive, the richest dataset in this patient population. And the study is going very well. We're pleased with -- we fully enrolled the study earlier this year. And the whole, the tracking of events and conduct and safety and tolerability and adherence, compliance is going exceptionally well. So we're really looking forward to the readout. Our base case remains full completion of the study, which is through 140 weeks, which was the original -- which was our design. And we're continuing to assess the possibility of an early readout. But the new data that came out at ESC this weekend, we were all waiting to see. And certainly, we're analyzing that data, we and AstraZeneca, very carefully, as well as our own data from the ongoing CARDIO-TTRansform study, and we'll decide whether, at some point, whether it makes sense to read the study out early. But in no way do we want to compromise the real big advantage we think we have with eplontersen, WAINUA, in cardiomyopathy in having the -- potentially having the richest dataset because of the size of the study. So we're anxious to get to the market as fast as possible, but not at the cost of compromising our -- the rich dataset that we expect.

Maybe can you talk a little bit about the process you're going through in order to make that decision, and how long could that take? And I guess, what -- if you disclose anything, is no news means you continue to completion? Or do you make some announcement that you won't start?

Yes. It's a very competitive space. I can't get into the details too much about what specific types of data we're looking at and how that's going to factor into an early readout or not. We're looking at all the traditional endpoints that you would look at in a cardiovascular outcome trial. Mortality events in our own study, hospitalizations, nature of those events, and comparing them to competitors and how we fit. We're comparing demographics as well, and we like what we see so far. And if we make a decision to read the study out early, we're certainly going to get FDA input first before doing that, and then -- before we can make any announcement. So all I can say is we're working through it night and day with our partner AstraZeneca. And we like how it's going.

Makes sense. Maybe just based on some of the data you've seen so far internally for your program or even externally with the HELIOS-B data, just where do you think the silencers fit in relative to stabilizers? Are they front line, are they combo, both? Any thoughts there?

We think all of that. We were really pleased with the results that came out this past weekend. It's a real positive read-through for the silencer class, the first readout for the silencer class. And TTR cardiomyopathy is a highly prevalent disease indication. And we also believe that, because of the design of our trial, we're in a position to have an even richer dataset. Obviously, the study was very positive with respect to the primary outcome, the composite of all-cause mortality and CV hospitalizations. And we're certainly very well powered there. We had the same -- essentially the same primary endpoint. It's really the subgroups, the secondary endpoints, the exploratory endpoints where we're looking to really take advantage of the size of our study to have the richest data set there. We think that that will position us to be a treatment of choice for all forms of TTR amyloidosis based on the comprehensive nature of the data. We're really looking -- to your question, we believe that silencers will be the first choice for many patients with TTR cardiomyopathy. We believe that it will also be the #1 choice for patients that are progressing on current stabilizers, right? And all patients eventually progress, and they progress fairly rapidly within a few years. So basically that. And we also believe that if there's data to support the combination of a silencer with a stabilizer, there will also be a lot of use in combination too because patients are progressing and -- on stabilizers. And they're complementary mechanisms, it makes a lot of sense. And if you have the data, and we think we're going to be the best positioned to have convincing data that combination provides added benefit, there'll certainly be that segment as well. So this is a dynamic market. Treatments today are not adequate. And cardiologists are going to advocate for the very best medicines, whether it be a monotherapy, switches or combinations. And we think that the silencer class will ultimately be the treatment of choice.

Yes. Makes sense. And how do you view that market sort of changing when tafamidis potentially goes generic?

It will be easier to do combinations. What I was referring to before, I was really talking about today's branded medicines, tafamidis, before it goes off pans. But certainly, that will also provide a challenge, but with challenges that I think will be overcome in many cases. But certainly, when tafamidis goes generic, that bar gets lowered and it will be much easier to be able to prescribe and have payers pay for combination usage.

What do you think the bar is for a combination use before it goes generic? Is it -- do you need to show some statistical significance or are strong trends enough? Or just any thoughts there?

Yes. I absolutely do not believe that we need statistical significance for combination usage, whether it be branded pricing or generic pricing, for stabilizers. If you have convincing data that combination usage is going to provide greater benefit, whether it be secondary endpoints or biomarkers or imaging studies -- we have a lot of imaging studies in process, which we're actually going to be looking at amyloid burden by PET imaging or MRI and scintigraphy and so on. If you can show that you're clearing amyloid faster in combination usage, physicians are smart people, they know that that's going to result ultimately in better outcomes, whether or not you have statistical significance or not, and they will advocate for combination usage, as they should, and payers will do what's right.

Makes sense. Maybe we can shift gears to olezarsen, FCS. You're currently under FDA review. You've got a PDUFA date coming up later this year. Maybe just remind us what was so exciting about the data you showed and kind of where you are in preparing for the launch.

Yes. We were thrilled with the data we presented at ACC. To just level-set, olezarsen is a wholly-owned product that is in development for patients suffering with severely elevated triglycerides. And we're in development for olezarsen tackling a severe rare indication called FCS, familial chylomicronemia syndrome, and severe hypertriglyceridemia, sHTG. FCS is rare; sHTG is highly prevalent, millions of people suffering from this disease. And what they suffer most from, in addition to body aches and pains and brain cognitive disorders and so forth from these severely elevated triglycerides, their #1 risk is severe acute pancreatitis, which can be fatal. And if it's not fatal, it almost always lands an individual in an ICU for up to a week or so. We are thrilled with our first Phase III readout in FCS, which showed substantial reductions in triglycerides versus placebo, and remarkably, substantial reductions in acute pancreatitis. And in fact, we essentially eliminated pancreatitis events compared to placebo in the treatment group that's now under review by the FDA, the dose that's under review, which was never demonstrated before in history. It was always postulated to -- that we can do that potentially. But to do that in such a small trial was remarkable. We also demonstrated greater than 80% reduction in hospitalizations in the treatment group versus placebo. And that was mostly not AP. That was actually patients just not feeling well. They're worried that they're about to have an AP attack. They're having other problems. And they go to the hospital. And we reduced that almost 90%, greater than 80%. And overall, the safety profile was great. So the drug was -- olezarsen was accepted, rightly so, for priority review by the FDA, with a PDUFA date of December 19. And it is -- we're looking forward to expected approval late this year. And to your question, we are ready to launch, and this represents the first, in our history, the first independent commercial launch for Ionis. The first of many, but still a real landmark achievement for the company, and we're very much looking forward to it.

How important is educating patients and identifying the patients, since you'll kind of be the first to market here?

We have a long-standing presence in the field -- in the FCS community dating back many years. We have first-mover advantage in FCS. We have done a great job in working with centers of excellence that manage these patients and with the patient community. Our medical affairs team has been in the field for 3 years now, building the momentum. Virtually all the patients in our Phase III study have stayed on drug in the open-label extension. We've opened up an expanded access program. Finding patients will always be the greatest challenge for rare diseases. But I think we have a really good handle on this. And that will be the biggest challenge, but we think we're very well positioned. The other thing is the success we're having in FCS and the presence we're building for Ionis in this field is going to set us up really well for sHTG. We fully enrolled that study earlier this year. This is a big study, overall, more than 2,000 patients for this -- because it's a highly prevalent disease. Two pivotal studies, CORE and CORE2, plus a safety study, to round out the safety base that's necessary for approval. The drug -- the program is going exceptionally well and we're very much looking forward to the Phase III data for that drug around this time next year, second half of next year. And that's only about 2 years behind the rare indication, FCS. So olezarsen is really, really a big, very important program.

For the sHTG studies, can you talk about the potential of showing a benefit on pancreatitis and how important that is or isn't?

Yes. So the U.S. definition guidelines are sHTG is defined as triglycerides 500 and above. In Europe, it's 880 and above. The higher the triglycerides, the higher the risk of AP -- the greater the rate of AP, the higher the triglycerides. FCS patients are in several thousands always. So they have a very high rate of AP. sHTG patients, certainly, many of them are in the multiple thousands, but they can be pushing 1,000, 880 above, so forth. So the rate is lower. However, our study is 10x the size of our FCS Phase III trial. So we're accumulating AP events. And I can tell you that in a blinded manner, we're seeing a lot of AP events. If the olezarsen data is indicative of what to expect for sHTG, the vast majority of those AP events should be in placebo, not in the treatment group. So you don't know now, but we're pretty high -- our confidence is pretty high that we're going to see a meaningful benefit in AP.

Makes sense. Maybe just last question on olezarsen before we move on, is just competitive positioning. You could potentially have a competitor in the market maybe sometime next year or the year after. Just how's your -- what's the differentiation?

We have not -- we don't see anything on the competitive landscape that gives us pause. Our efficacy is second to none, including AP, triglyceride lowering, the hospitalizations in FCS that I referred to earlier. And we have a, very importantly, strong presence in this community, as I mentioned already, and first-mover advantage. In FCS, anywhere from 9 to 12 months; in sHTG, 2 to 3 years, to get to the market first. And really there are no treatments for either of these. There's nothing approved for FCS in the U.S. And for sHTG, these patients are treated with fibrates and fish oils, which have meaningless impact on triglycerides. So I would say great overall profile, nobody has matched us, and that we have first-mover advantage.

Makes sense. Maybe we can shift gears to donidalorsen, HAE. You presented some promising data earlier this year. Maybe just highlight some of the key takeaways there.

Happy to. So we presented a comprehensive review presentations at EAACI in Valencia, Spain in July. And in that meeting, we presented 3 trials -- 3 outcomes from 3 independent trials. The first was the Phase III trial, which we showed substantial reductions in HAE attacks, with 2 dosing regimens. Monthly dosing as well as every 2 months dosing, compared to placebo. Reduction's in the mid-80% range or so. The second -- with great tolerability and so forth. The second trial, it was really part of the first trial, but we call OASISplus, was the open-label extension, in which patients were treated up to a year in totality, in which the reduction in HAE attacks got even better for both monthly and bimonthly. We got into the 90% plus range of HAE attack reductions, which are as good or better than anything that's out there today on the prophylactic landscape. Good safety, good tolerability, good adherence, everyone was -- essentially everyone was staying on drug. So it bodes very well for long-term safety and efficacy for donidalorsen. The third study was a study that we conceived that would be very important to get into the U.S. market successfully. And that study we referred to as the Switch study. The U.S. market is -- most patients with HAE today in the U.S. market are on prophylactic treatment. So when we get to the market, we're going to want to switch patients to donidalorsen. So we felt that it would be very important to understand patient preference as well as how to safely switch patients from one treatment to another, and be able to instruct physicians to maybe even get that in our label, how to safely do that. The study was wildly successful. Not only did -- were we able to enroll the study fairly quickly, demonstrating that patients are looking for better options and they're willing to go into a study like this to try another treatment, and patients came in from prophylactic treatments across the board. Takhzyro, Orladeyo, Cinryze, we had good sampling of all them. They stayed on treatment. We were able to achieve our goal of protecting against HAE attacks with no slippage, no gaps in protection. And then when we read the study out, not only were we able to switch them safely over, we were actually able to reduce their HAE attack rates -- or HAE attack rate even greater than what they came in from, from their previous prophylactic treatment, by more than 60% further reduction in attacks for all the drugs that came in -- that they came in from. In addition, patient readouts, patient surveys that were done independently resulted in greater than 80% of the patients strongly endorsing or strongly saying that they prefer donidalorsen versus their previous treatment. That was the dataset that we presented. We published in the England Journal. That data, we think that that positions us very well for the U.S. market, which is, like I said, it's a switch market. NDA has been submitted, and we're looking forward to the acceptance soon. And when we do, we'll make an announcement.

Should we be anticipating standard review or a priority review there?

With other prophylactic treatments already on the market in the U.S., we would expect standard review.

Makes sense. A lot to talk about here, maybe we can switch to another pipeline asset. You recently shared some Angelman data earlier this year and decided to move that forward. Maybe just touch on that.

Yes. Our Angelman's program is a very important program for Ionis. We have a solid position as leaders in CNS drug development. SPINRAZA, QALSODY, I touched on before, so many drugs that have -- 11 in clinical development, many of which have already shown clinical proof of concept. Angelman's is a wholly-owned program that is tackling a disease with an enormous unmet need. This is a neurodevelopmental disorder that afflicts approximately 100,000 patients or so in major geographies. And what we -- we came forward with really the first -- the concept of target tackling mechanism to replace a protein that's missing in this disease. It's a genetic disease. And what we reported at the ASF meeting, the Angelman's meeting in July, was data from an ongoing study in which we demonstrated that we were able to improve essentially every aspect of the disease that afflicts these individuals. We showed improvement in -- these individuals have major defects in communication, cognition, motor function. And across the board, no matter how we measured it, whether it was various different instruments to measure these aspects of the disease and all the subdomains, they are all favoring improvement, benefit to patients across the board, with really, really excellent safety, tolerability and adherence in this study. So we are moving to Phase III development. This is wholly-owned, as I mentioned. We're looking to get end of Phase II advice from the FDA on our Phase III trial design very soon. Provide updates down the road on the ongoing long-term extension. And also to initiate Phase III development in the first half of next year. We really, really have -- this is a top priority for Ionis.

Maybe I'll just ask a broad question. Anything else in the pipeline that you think you want to highlight?

Yes, sure. Absolutely. I would start with pelacarsen. Pelacarsen is another first for -- first treatment -- potential first treatment for a highly -- a disease with a high unmet need that Ionis came first with. This is tackling a CV risk factor called lipoprotein (a). We all have Lp(a), it's an independent CV risk factor. If you have high levels of it, you're at high risk for cardiovascular disease. We developed pelacarsen. We conceived it and developed it. And we showed in Phase II that we were able to normalize Lp(a) levels in patients, hundreds -- the study was about 300 patients, normalize almost 100% of those patients, get their Lp(a) levels down to normal levels. It's like taking LDL-cholesterol down below 70. It's the same thing, only it's a different risk factor, with great safety and tolerability. Based on that, Novartis licensed the program and initiated a landmark study, another landmark study, called HORIZON, which is more than 8,000 patients enrolled in a cardiovascular outcome trial. Has gone exceptionally well. Great -- obviously, good safety along the way. And that data -- that study is going to read out next year, in 2025. So next year, I mean, we got a lot of Phase III success this year, we also had Phase II success in Angelman's and others, next year we're looking at several new Phase III trial readouts. I mentioned sHTG for olezarsen, Lp(a) for Lp(a)-driven -- pelacarsen for Lp(a) in cardiovascular disease. We also have another drug for a CNS neurodevelopmental disease called Alexander's Disease, which we're expecting to read out next year as well. And that's another wholly-owned program. So those are -- next year -- this year has been a really, really great year for Ionis, next year is shaping up to be even better.

Yes. So good, it looks like we're just about out of time, so why don't we end it there? Thanks so much, Brett. Appreciate your time.

Thank you, Michael.