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

All right. Thanks, everybody. It's my pleasure to be moderating this panel with Brett Monia -- the overview of Ionis, covered so many things.

I take some time.

Yes. So I asked you just now offline. I said, what topic could we start with and you said Angelman is pretty cool. So to that point, do you want to just level set and give an update there on where you are with the design of the Phase III program, why you're excited, and then I can ask a follow-up or two.

Yes, absolutely. Sure. So our Angelman program, of course, is building on all the success we've had over the years in delivering innovative medicines for CNS diseases, right, SPINRAZA, QALSODY, our tau program and so much more. It's all the same platform. We're really excited about launching our Phase III study in Angelman syndrome in the first half of next year. We're pleased with the outcome of the end of Phase II meeting we had with the FDA just recently. We think we have a really strong Phase III trial design. We were able to achieve everything with the FDA that we had hoped to achieve with respect to the size of the study. The doses, we're going to be looking at 2 doses in this study with approximately 200 patients in the study treated for about a year. We have a placebo control in our study and 2 dosing cohorts, 40 milligrams and 80 milligrams quarterly. These are 2 doses we studied in Phase II in our HALO study, in which we demonstrated efficacy, strong evidence of efficacy at both dose levels. So we're excited about the outcome, and we are getting -- gearing up to initiate this Phase III study, like I said, first half of next year. And we're also really pleased with the fact that this is a wholly owned program in which there are multiples -- 30,000, 40,000 patients in the United States alone, in which there are no treatment options. So off we go, we're really looking forward to it.

Do you want to talk a little bit more about specific endpoint subscale selections? What was the conversation like inside Ionis? What else were you considering? And how did you end up where you did?

Yes. So as we reported last year -- early this year in July at the ASF meeting, we demonstrated strong evidence of benefit across all measures in the study we conducted and using all instruments such as Bayley-4, SAS-CGI, Vineland, ORCA. And we demonstrated benefit in communication, cognition as well as in motor function. We settled on expressive communication mainly for 2 reasons. The first is although we saw evidence of efficacy across all these measurements, all these subdomains, the greatest magnitude of benefit was in expressive communication. And that was true for Bayley-4, Vineland, ORCA and so forth.

It's true across subscales.

That's right. That's across subscales, across measurement instruments. In addition, it's been shown, it's been published by the patient community that the largest burden on these families is in expressive communication. If there is one thing that they can fix for these people living with Angelman syndrome, it is the ability for them to communicate, the ability to express their feelings, what's bothering them and so forth. So it also has the biggest burden on the families. So we thought it was the right outcome. Of course, we have secondary endpoints that include cognition and other aspects. But the FDA was fully behind expressive communication, and there we are.

Okay. Great. And I think for all neurology drugs going from an open-label study to placebo controlled, there's a question around placebo effect. This was a question with SPINRAZA historically. How do you get comfortable with that around not just that the efficacy signal you're seeing so far is real, but also how conservative you want to be with powering?

Yes. So the powering assumptions we've made to support the 200-plus patients, 1:1:1 randomization were based on a couple of things. One is the natural history data that is available for the progression of this disease, Angelman syndrome. There's a rich amount of natural history data. These patients really do not improve beyond intellectual capability of 2 to 4 years of life. So it's not like these patients continue to get better and better over time. And that really helps you with assessing how much benefit you're going to achieve because really any benefit is going to be considered clinically meaningful. The other, of course, is we based our assumptions on our HALO study on the outcome of our study. So we think we're well powered there. It's not a -- the other thing is expressive communication is considered to be one of the most objective measurements of these subdomains in Bayley-4. It's really difficult when a trained neurologist is assessing expressive communication to really be misled by a placebo effect. It's a very objective measurement. And we think all that bodes well for us as does the ability to evaluate 2 different dose levels in the study compared to a placebo. So we're looking to see dose response. We're looking to see strong evidence of benefit versus placebo.

Okay. Makes sense. And competitively, how should we try to stack up yours versus Ultragenyx's?

I really can't speak for their program. I don't want to really get into that in depth. There's -- this is an enormous unmet need. There's room for several players here. It's best for the community to have treatment options. It expands the market, expands the opportunity for everybody. The mechanisms are similar. We're both targeting the UBE3A antisense transcript with an antisense oligonucleotide approach to release the paternal transcript and replace the protein that's missing, the UBE3A protein. Our trial is bigger. We're looking at multiple dose cohorts. We have a placebo control, not a sham control in our study. We think that that's the right way to go. It's the gold standard in trial design. And we're also building up a platform, a chemical platform that has produced the likes of SPINRAZA and QALSODY, like I said before. So we like our trial design. We like our chemical platform. And -- but other than that, we're hopeful that there are multiple choices that patients get to take advantage of once we reach the market.

Yes. Okay. Makes sense. Let's cover olezarsen for a bit now. Maybe just walk us through the -- what you're doing on the commercial side, and then we can talk about the broader indication expansion.

Happy to. Just to really put this in perspective, Ionis is on the cusp of a really big change for the company. 4 or 5 years ago, we set out to build a leading fully integrated biotechnology company, right, to not partner programs, all of our programs, but actually to build a commercial organization that match the excellence we've always had in research and development and to commercialize drugs of our own, deliver the drugs that we develop, we discover directly to patients. And we're on the cusp of doing that right now. We're just a few weeks away from our first independent commercial launch. And we think we have the right drug and the right disease population to do this to get started. We were thrilled with the Phase III results for olezarsen in familial chylomicronemia syndrome, FCS. As a reminder, there are no treatments available for FCS in the U.S. market today. This is a severe, potentially fatal genetic disease. We are prepared to launch. Our commercial organization is in place. Our medical team has been in the field now for 2 to 3 years, working with treaters, working with patient groups and identifying patients. So our PDUFA date is December 19. Discussions with the FDA have gone very well. We're obviously at this stage in labeling discussions, and we think things are going very favorably. So stay tuned. And we're expecting -- assuming we get approval in December, we're going to -- we're prepared to launch this year.

How would you define success in the initial rare population launch?

Well, the key challenge here is in patient finding, right? There's estimated to be 1,000 to 3,000 FCS patients in the United States today. As I said, there's no treatment options available today. Our focus first will be to convert those patients that are ongoing in our open-label extension and in our expanded access program in the United States to convert them over to commercial drug as quickly as possible, and that will be our first shot. And then second is -- and this is really longer term how we will measure ourselves for success is how are we doing in finding patients? How are we doing in diagnosing patients? How well are we achieving coverage, market access to the patients? How quickly can we get them from a diagnosis to on treatment?

Do you have a guess at what the diagnosis rate might be right now?

It's low. I don't have a percentage, Paul, but it's quite low. Most patients with FCS today are not identified. Luckily, we do have a cadre of physicians, treaters who are well versed in this space, and they are very anxious to use olezarsen for the patients they have. And they are -- they have been now sensitized with once a drug comes to the market to be able to go out and find these patients faster than what has been happening prior to a treatment. As you know, when a treatment becomes available, -- the word gets out, patients are identified faster, and we're going to work towards making that happen.

Yes. Okay. And have you guys thought about what metrics you might share to help investors understand the launch?

It's early. We haven't laid that out yet. We haven't settled on that yet, Paul. Certainly, you'll be getting revenue measures and those kinds of things as to the details on patients and numbers and those sorts of things. That's to be determined.

Okay. As it relates to indication expansion, right, I mean, I think it feels self-evident that this drug works. What would you say is the biggest risk to the pivotal study?

The FCS outcome greatly derisked the outcome for SHTG. We're expecting a very strong positive outcome for SHTG. And the way to think about it is really FCS is a type of SHTG. It's a genetic cause of SHTG, but -- so we feel like we've already derisked the study. We are also very much liking what we're seeing in the study as the study is being conducted with respect to triglyceride reductions in the open-label extension in a blinded manner, of course, as well as the accumulation of acute pancreatitis events in the Phase III study. I'd say our biggest challenge isn't really the Phase III outcome. We're confident in that. It really is our go-to-market plans to really get beyond the early adopters. There's a set of physicians who we refer to as early adopters who are sold. These are mostly endocrinologists, some cardiologists who are convinced that they need to get their patients on a treatment like olezarsen for severe hypertriglyceridemia, SHTG. That's our first...

So is that like -- what defines those clinicians? Are they just of this specific view that triglycerides are of greater importance versus other doctors who are just focused on other biomarkers?

Absolutely. That's absolutely it. There are guidelines. If your patient has triglycerides above 500, they should be on a treatment -- an aggressive treatment if available, to get their triglycerides under control, to lower those triglycerides to get them out of harm's way for acute pancreatitis. And there is a group of physicians, endocrinologists, cardiologists, lipidologists who are convinced that they need to get their patients on treatment. These are physicians who have patients that have had acute pancreatitis events. They've been in ICU units, and they don't want those patients to have a second event and they don't want their other patients that they're managing to have a first event. The challenge after that then is to build that market beyond that. That alone is several hundred thousand patients.

That alone, that clinician...

The early adopters.

The believers market.

The believers are already managing hundreds of thousands of patients. And then our goal is to then build that market out from there. So this is really a blockbuster opportunity for Ionis. It's a perfect process for us to go from FCS to SHTG to get our presence in the field and strengthen that presence in the field and then to build into that larger market.

As it relates to the Phase III study, how should we think about the probability of you showing something robust enough where you can have a claim around pancreatitis attack reduction?

Well, it depends on what we see. We think we're...

But what are you going to see?

Well, if I could just think about FCS, just focus on that for a second, we saw remarkable reductions in acute pancreatitis events in that study. Virtually all events were in the placebo group. We had one event in the treatment group. We think that, that has a very high probability of translating to SHTG. Why? Well, we do know that the rate of AP in SHTG is somewhat lower than that in FCS. However, our trial is more than 10x the size. So we're accumulating these events, and we're seeing them. We're seeing AP events in the blinded study. And if the FCS outcome is any indication of SHTG, they should mostly be in the placebo group. We're also confident, feeling very good about the prospects of having AP in our label for FCS. So I think all that is going in the right direction.

Yes. Okay. Timing of that data?

Second half of next year.

Okay. And then in the meantime, the other question you get over and over with every program because you're in a bunch of hot areas is competition as it relates to the Arrowhead program. How are you weighing the way olezarsen stacks up?

We think it stacks up great from an efficacy, tolerability and administrative -- how the drug is administered very well. But the biggest aspect of our program that we're most pleased about is our first-to-market advantage. We're about a year ahead in FCS, and we're several years ahead in SHTG. So we're excited about the drug, but we're also excited about shaping this market to be the first to the market and really develop and establish our foothold in this market.

Yes. Okay. And what kind of sales force do you think you need to really monetize not just the believers, but also the broader prescriber community?

FCS is rare. We're looking at a sales team of about 20 to 30 people and about tenfold that in the U.S. for SHTG.

Okay. And when you talk about the incremental physician, right, who you still really need to sell on the value of aggressively treating triglycerides, with that physician, are you competing in terms of share of voice with like LDL therapies, GLP-1s? Like is that kind of a group where you're trying to fight the battle of just sort of the metabolic milieu of where this fits in?

We don't think so.

So what's different about that clinician that's not sold then?

The clinician who I wouldn't say is not sold needs to be educated as to what the guidelines are for triglycerides. Most of these -- and really now we're talking about moving from the endocrinologists who are sold on the need to manage triglycerides, because they understand the risk for acute pancreatitis is now moving into that cardiology community, a cardiology community that is focused on other types of lipids like LDL, VLDL and those sorts of things and to really, really educate them such that they understand the risks that are associated with severely elevated triglycerides that it's a different risk than LDL and that you need to get your patients under control if they have severely elevated triglycerides. So really, it comes down to now shifting from that endo to that cardio population of treaters.

Okay. Great. Anything else to add there?

No. I think we covered it.

Okay. All right. Let's talk about TTR. Do you want to maybe set the stage and talk a little bit about the eplontersen launch and how it's going relative to your expectations?

Yes, we're really thrilled with the launch of WAINUA for hereditary TTR polyneuropathy. This drug was approved in December of last year and was launched in early February of this year. And the launch has shown a steady quarter-over-quarter growth with -- in the third quarter compared to the second quarter, more than 40% increase in revenue for WAINUA. We think that speaks to several things. One is it's just a great drug profile. I mean we've shown remarkable efficacy, really good tolerability. And we thought going into this launch that the ability of patients to self-administer using a simple auto-injector was really going to resonate well with the patient community, and it certainly has. We're seeing patients wanting to get on WAINUA, calling for WAINUA. We're seeing treaters inquiring about WAINUA, how can they get their patients on treatment. We're seeing the time from diagnosis for a prescription to be written to getting access to WAINUA occurring very quickly. So we think that, that's -- we're really thrilled with the launch, and we think it's going to continue well into next year.

Okay. Great. In the meantime, what did you learn from Alnylam's outcomes data when it was presented at ESC. And specifically, I mean, I think the -- I say surprise, but somewhat surprised was just the time it took really to show real meaningful separation. How do you kind of incorporate that into the thinking around your trial and probability of success?

We were pleased that the first [ silencer ] that read out was positive, and it was quite positive. And we think that, that bodes very well for eplontersen, especially when you factor in the magnitude of TTR lowering we're getting for WAINUA is eplontersen is essentially the same as that of their drug. We have great tolerability and our trial is more than double the size of their study. So we are certainly well powered for a positive outcome. in their trial -- as they showed in their trial. The length of the studies are essentially the same. The fact that they -- it took more time to see an outcome data, say a more positive outcome data, say, on mortality, wasn't terribly surprising to us because the demographics in TTR cardiomyopathy has shifted substantially since the days of tafamidis. Patients are being diagnosed earlier. You're going to have to go longer into treatment to see the same type of benefit that you see with tafamidis. However, we truly do believe that for today's demographics, the silencer class will be the most efficacious ultimately when we get real-world evidence on the market. And because of the design of our Phase III trial, which is very large, as I mentioned, we also have the ability to have richer data in subgroups such as monotherapy, combination usage, imaging work that we're doing and so forth. That all coupled with the ability of patients to self-administer, we think, bodes very well for the cardiomyopathy indication.

Makes sense. I mean Alnylam definitely benefited from extending the study to 36 months and then having an endpoint be 36 to 42. Any concern that you're ending at 33 months? Or do you feel like that's outweighed by the bigger sample?

It's more than likely outweighed by the bigger size of the study. However, we'll do what's right for WAINUA. And certainly, if there's adjustments we need to make, we'll consider those.

Yes. Do you still have the opportunity to extend the study at this point?

Well, our study is not reading out to the second half of 2026. So let me just be clear, though, Paul, we're not going to extend the study beyond 140 weeks. I mean we...

That's 33 months.

Yes -- we have patients in the open-label extension.

Right. That's what I thought. So I didn't think you could extend it. So what could you change at this point, if anything?

We're still working through that with AstraZeneca. But I mean, Alnylam did look into their open-label extension, for example.

Right to incorporate that into the...

That's certainly an option.

Yes. Okay. Makes sense. Where should we go next?

Donidalorsen?

Okay. Sounds great.

Yes. We're thrilled to have -- so donidalorsen is a prophylactic treatment for hereditary angioedema. We are thrilled that with the Phase III data that we reported at EAACI early this year or midyear this year, remarkable reductions in hereditary angioedema attacks. We also reported really, really impressive data in patients switching from existing prophylactic treatments to donidalorsen. We were able to demonstrate for patients switching from TAKHZYRO or ORLADEYO greater than a 60% improvement in HAE attacks compared to their baseline values. Patients are staying on treatment. And in an independent patient survey at the end of the study, the question was which preference do you -- which medicine do you prefer and why? More than 80% of patients prefer donidalorsen over their previous treatments. And they did so for 3 reasons which donidalorsen -- is the advantages that donidalorsen offers, one is better efficacy; two was better tolerability; and three was convenience of once per month or once every 2-month dosing. So our NDA is now accepted in the United States with a PDUFA date of August 21 next year. And outside the U.S., we have a commercialization partner, Otsuka, and they're planning to file to the EMA by the end of this year. So we're looking forward to doni getting approved next year, and that would represent our second independent commercial launch.

What does the early adopter pool of this drug look like?

Patients that are unhappy on their existing treatment and most patients are. There are patients that -- this was thought of as a sticky market. It's clearly not. Patients are switching. They were very willing to switch or to give donidalorsen a try in our Switch study. We're also seeing patients switching from one treatment to another because they're looking for better efficacy, better tolerability or better convenience. So the early adopters are those that are unsatisfied with the current treatments. And based on everything we're seeing, most patients are unsatisfied with one or more of those aspects of their current treatment. So we're focused on switching patients in the United States. About 70% of patients are on a prophylactic treatment in the U.S. today. So it is a switch market, different than olezarsen for triglycerides, which is a new market. Now outside the U.S., it is a market that needs to be developed. Most patients are on on-demand treatment. So our commercial partner in Europe and Asia, Otsuka, their job, their goal will be to develop a prophylactic market outside the U.S. But in the U.S., it's a switch market.

Makes sense. Okay. Maybe to kind of round things out, do you want to talk about some of your other pipeline efforts in other tissues, including your cardiac program?

Yes, happy to. So we're making great progress in our platform technology. We continue to expand, diversify our capabilities, to really build on our strength in cardiovascular and in neurology as well as open up new disease areas. A few examples, new backbone chemistries for antisense oligonucleotides, our MsPA backbone chemistry, which is designed to improve durability for both systemic and CNS applications like intrathecal dosing called MsPA chemistry. We've now entered our first MsPA into the clinic, targeting APP for dementia associated -- Down syndrome with dementia. We expect semiannual dosing using MsPA, maybe less frequent. Secondly, new strategies to target muscle. Our first molecule target cardiac myocytes was licensed to AstraZeneca last year using Bicycle -- using a Bicycle siRNA approach for a target that's not disclosed yet. That drug is now in IND toxicology studies. And then for the wholly owned pipeline, we're expecting more of the same for cardiac myocyte targeting as well as for skeletal muscle targeting, neuromuscular diseases, they're coming, and we expect our first several candidates, not one, but several candidates to be selected soon and to reach IND toxicology studies early next year. Lastly, I'll say this for our CNS platform. We're leading the way in CNS with oligonucleotide therapeutics. We're making great progress in overcoming the blood-brain barrier. We expect our first molecules for BBB, overcoming the BBB next year and move those studies into preclinical development IND tox studies that is enabling us to deliver our drug subcutaneously or intravenously. So the platform continues to -- is we're making great strides in expanding and diversifying our capabilities.

Yes. Okay. Great. Maybe lastly, the other big readout we're waiting for next year is Lp(a). That one is super interesting. Maybe set that up for us. And in some sense, right, that outcome study is kind of proof-of-concept study for the target. How are you thinking about the probability of success?

This is probably one of the biggest events in -- if not -- I'm certain, it's the biggest event in the cardiovascular space next year. Lp(a)-driven cardiovascular disease is clearly the largest unmet medical need that remains in cardiovascular disease today. It's an independent risk factor. In our Phase II study with patients with cardiovascular disease due to high Lp(a), we were able to normalize more than 98% of these patients' Lp(a) levels. So now you mentioned proof of concept, this is a big deal for this field. This is the first interventional study ever conducted to show reduced CV risk by lowering Lp(a) in a cardiovascular outcome trial, more than 8,000 patients in this outcome trial, a study called HORIZON. We're very excited about it. Our partner who's running the study, Novartis, has said that they expect data next year. And if positive, they'll submit. Confidence? Well, we know we are convinced that this is an independent risk factor for CVD. And we think that the probability of success is high, but it's the first time anyone's ever done this. So we're going to have to prove it.

Makes sense. All right. Thank you, Brett. Appreciate it.

Yes. Thanks, Paul.

Thanks.