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

Okay. Well, good morning, everybody, and thank you once again for joining us for the 45th Annual TD Cowen Healthcare Conference. I'm Yaron Werber from the biotech team. And it's a great pleasure to moderate the next fireside chat with Brett Monia, Chief Executive Officer. And I think, Brett, you're one of the longest standing employees at Ionis, too.

Thanks, Yaron. It's pleasure to be here and yes, I'm a founding scientist and I moved into the CEO role in January of 2020, thrilled to be here. Thanks.

And ran science and R&D and development for a long time. There's a lot to talk about. I'm actually going to reverse the order. Actually, let me turn it over to you first, but maybe make some opening remarks, and then I will start the Q&A.

Happy to. So things are going very well at Ionis the last several years. the pipeline continuously delivering. We've had 3 drug approvals over the last 20 months with the WAINUA approval for TTR polyneuropathy, QALSODY for SOD1 ALS. And then in December, Tryngolza for familial chylomicronemia syndrome. And maybe I just want to touch on Tryngolza briefly. This is the first ever FDA-approved medicine for a severe rare genetic disease called familial chylomicronemia syndrome, FCS. And that's, of course, is very important for the patient community, but also it's a really monumental event for Ionis as it represents now our evolution to become a fully integrated commercial stage biotechnology company, having now launched our first product, a medicine that we conceived, discovered and did not partner, but we kept ourselves and have launched the drug ourselves. And the launch is off to really good start so far. And the approval at Tryngolza represents 4 anticipated independent launches for Ionis over the next few years, including donidalorsen for HAE, Tryngolza for a much broader indication, sHTG in our Alexander disease program. And when you couple that with 4 anticipated launches for our partnered pipeline, it's really setting us up for a really remarkable future. We're laser-focused on the continuous revenue growth over the next few years and also to start moving towards profitability. So we're not that far away. And the pipeline continues to deliver, and the launches are going well. So it's exciting times at Ionis.

Great. So usually, we start with WAINUA and we sort of go chronologically. Actually, I'm going to maybe reverse engineer it in the order of questions. And I want to talk about 2 assets that are going to have data this year. You mentioned one of them, Zilganersen for Alexander's disease, the data is expected in the second half of the year. And the mechanism is that GFAP. Can you talk about maybe what is the biology? What's the primary endpoint in the study and this potentially is a registrational study, right? Talk a little bit about Alexander disease too.

Well, let me begin by just touching on our CNS platform overall. We have a really exciting and transformational CNS platform for neurodegenerative, neurodevelopmental diseases, it's validated. This is the platform that delivered SPINRAZA, first-ever treatment for spinal muscular atrophy, a blockbuster. QALSODY, I mentioned for SOD1 ALS. Our tau program has shown proof of concept as has our Angelman program. It's all the same platform. The Phase III study for Alexander's disease is, as you said, is due to readout in the second half of this year. The mechanism is mutations in a protein called GFAP, as you mentioned, Yaron, and we're targeting the cause of the disease, the root cause. We're knocking down production of GFAP in this patient population. This is a ultrarare leukodystrophy that is extremely severe and there are no treatment options available. The preclinical data is very strong. We have shown that we can actually halt the disease progression and even reverse it if we get in there early enough. It is ultra rare. So it's not a lot of people in the United States. But with that said, the understanding of the prevalence is not very good. And we think that the prevalence numbers are probably on the lower end of expectations. But we have to get out there and educate on the disease, the symptoms of this disease. The trial is a registrational trial. The primary endpoint is 10-meter walk distance, but we will also be looking at seizures and other aspects of the disease. And it also sets us up for several other pediatric neurology drugs that are in our pipeline that are going forward as well. So it's a starting point for our wholly owned neurology programs, which are coming forward, followed by -- which will be followed by our Angelman's program.

And so the -- can you just remind us the trial design? How many patients are in the study and what the design is on the primary endpoint?

Yes, it's about 60 or so patients in the trial. The primary endpoint is 10-meter walk distance, and we'll be looking at several secondary endpoints as well as biomarkers like GFAP reduction in neurofilament light chain and so on.

And is it against placebo? Or is it against baseline?

It's a placebo-controlled trial.

When you talk with the FDA, can you get -- I mean, you're looking at seizures as well. This is a neurodevelopmental disorder -- and similar change are when they're probably aphasic, some motor deficits, but probably not as severe. They are ambulatory, they do have seizures. Do you need to hit the primary? Or can you do trends in the primary and also hit with biomarkers and NFL?

It is a severe -- it is a disease that severely impacts motor function, which is why the 10-meter walk distance is the primary endpoint in the study. We will be looking at other secondary endpoints as well. We expect to hit the primary endpoint in this study. With that said, this is a rare disease indication with no treatment options available. We have a strong relationship with the neurology division at the FDA. We do believe that they will be flexible for the outcome of this trial because they understand the unmet need and our track record with developing and bringing to market neurology drugs.

And based on just your understanding of the prevalence as of now, how many patients are in the U.S. and what's their longevity?

It's less than 1,000 in the U.S., but as I mentioned before, we don't believe that diagnosis is where it should be and the prevalence isn't very well understood. And again, it's a stepping stone toward other neurology drugs that are coming from our wholly owned pipeline.

Okay. The other data we're going to get this here that I think it's in many ways overlooked is the sapablursen, the impression polycythemia vera study. This is a 50-patient that's a Phase IIa, the injections monthly. The primary endpoint is change in phlebotomy in the last 20 weeks of 37 week treatment period versus baseline. Can you talk about -- this is the TMPRS -- TMPRSS6, yes, TMPRSS6. Can you talk about maybe how that genetic manifestation impact PV?

Sure. Polycythemia vera is a disease that is regulated by -- through -- caused by a dysfunctional iron system, iron metabolism. And the key mechanism that we are seeking to control by targeting TMPRSS6 is the hepcidin pathway, which is the master regulator of iron homeostasis and therefore, because it regulates iron homeostasis, it regulates erythrocyte production from the bone marrow. And this disease is driven by excessive production of red blood cells causing super high hematocrit levels causing risk of thrombosis and other problems. And today, the treatment of -- the treatment, really, the most common treatment is lobotomy. There are some other drugs that are poorly tolerated that are also used for polycythemia vera. There's a huge unmet need here for better, more effective, more better tolerated drugs. Our study is, as you said, is a primary endpoint is to reduce phlebotomy compared to placebo. It's placebo-controlled -- I'm sorry, it's not placebo-controlled, it's an open-label study. We're looking at compared to baseline, values of reduction in phlebotomy. We're also looking at normalization to about the standard of care, what's clinically meaningful is to get hematocrit down below 45% or so. That's a key secondary end point. And of course, we're also looking at increases in hepcidin or the biomarker that we're trying to regulate. We showed in our Phase I normal volunteer study that by targeting TMPRSS6, we can produce very significant increases in hepcidin, which is exactly what we want to do. And that's our objective in the study. This is an open-label study, so we are seeing some data. And right now, what we're seeing is very encouraging results in this dose finding study in PV. And this is one of the mid-stage pipeline readouts we plan to share later this year with other news coming later this year.

Can you remind us in the Phase I and how they admitted healthy volunteers, what was the level of hepcidin increase that you are able to see?

So the ability to elevate hepcidin in normal volunteers is more challenging than it is in polycythemia vera where it is dysregulated and we did see variability. But we saw about a 4- to 5-fold increase in hepcidin levels that was dose-dependent in normal volunteers, and we expect even greater elevations in PV.

And what do you think is clinically meaningful in terms of the primary endpoint and the reduction in phlebotomy? Is it sort of 25%, 30% or is it higher?

That's about the right range for reductions in phlebotomy, which is considered to be clinically meaningful. We're hopeful we'll get even above that based on the data we're seeing so far. And hematocrit below 45% is also clinically meaningful.

Okay. By the way, for the audience, if you have any questions, feel free to just raise your hand. Okay. So let's move to the next question. And again, I kind of what I'm trying to focus on things that are maybe not typically discussed. I want to talk about pelacarsen, which is obviously as discussed. A couple of things. Number one, with the HORIZON study, which is a secondary prevention study has gotten pushed out a little bit to the first half of '26 from the second half of '25 obviously, because of the event rates are may be accruing a little slower than expected. Can you just remind us how the study is powered by Novartis? And what percent benefit on MACE do you think is clinically meaningful?

So just for level setting, so pelacarsen is being developed to reduce the production of an independent risk factor called lipoprotein (a). There are -- is the probably the one remaining risk factor that's a significant cause of cardiovascular disease that's not controllable today. If you have high levels of Lp(a), which is estimated to afflict of around 8 million to 10 million people worldwide, you're a high-risk for cardiovascular disease, heart attacks, stroke and so on. In our Phase II study, we showed that in patients with CBD due to high Lp(a), we were able to normalize their Lp(a) levels in more than 98% of patients. It wasn't an outcome trial. It was a dose-finding trial to set up Phase III development. Based on that data, Novartis licensed the program for us, and they have initiated the Phase III HORIZON study in more than 8,000 patients a cardiovascular outcome trial with high Lp(a) and CBD. So secondary prevention in cardiovascular disease. The study was originally planned to read out this year. It's an event-driven study. which means that we have to accumulate CV events to a specific number to support the powering design of the study. Novartis announced last month, I think it was a little while ago, that the study will be delayed, the readout will be delayed to the first half of 2026. And there's no concern in the study with respect to safety or whether the study is going to read out on time in the first half of next year. It's just that the events are accumulating a little slower than what was originally expected. It's not terribly surprising, and it's the first time anyone has ever conducted a randomized controlled trial in this patient population. The original estimates were based on epidemiology in natural history data. These patients are very well managed. Their LDL is controlled. Their blood pressure is controlled. And we're learning for the first time what the -- what a pure Lp(a) population looks like with respect to CV event accumulation. We're still well in position with Novartis to be the first to market. Novartis hasn't shared their powering the assumptions for this study, but cardiologists in the field have pretty -- it's been kind of consensus that a 15% or greater relative risk reduction in this patient population would be highly clinically meaningful because there are no ways to manage Lp(a) CBD. Statins don't control it very effectively, blood pressure, diabetes, it's not associated with anything else except Lp(a), so there's an enormous unmet need and 15% and above would be considered clinically meaningful.

And in terms of LDL control, I am confusing with Lp(a). The LDL control, what level are they targeting? The secondary prevention, since patients with risk, there's obviously going to be different risk parameters. Are they targeting less than 70 and make sure everybody is controlled. There's less than 100? Or is it lower?

The details on that haven't come out, Yaron, but patients have to be on stable LDL lowering therapy and to meet the desires of their managing position that their LDL is under control. Maybe some of that data will be coming out on the demographics soon before the Phase III readout.

Okay. Has Novartis talked about plans to commence a primary prevention. I think Amgen is talking about starting it this year. Lilly has now commenced their primary prevention engines, obviously about 1.5 years behind us, so are behind that?

Yes. So Novartis is all-in on pelacarsen, not only is this a very large cardiovascular outcome trial, they've also initiated a Phase II study with pelacarsen in patients with calcific aortic stenosis, which is enrolling. Recently, they initiated a study done in combination -- on background therapy with inclisiran, their LDL drug, which is now a Phase III study underway. It's to just look at LDL and Lp(a) level control in that study. So they're all in on this. With respect to primary prevention, I can't speak for our partner get ahead of them, but certainly, primary prevention is obviously on their radar. I'd also point out that we have an expanded partnership with Novartis on LP(a). Not only have we delivered pelacarsen and it is in Phase III development as I described, we also provided to them based on an expansion of our partnership and they licensed the program a follow-on program that has the potential to be semiannual or annual dosing. It's consistent with the inclisiran dosing regimen, which is semiannual today. It wouldn't be surprising to see a less frequent administered drug be a better option for primary prevention versus secondary prevention. But they haven't said anything specifically.

I want to move to Tryngolza and specifically the sHTG data coming up. So you're running 3 different study CORE1 and CORE2 with the actual Phase III. The ESSENCE study is the sort of the Phase IIb, which is in a slightly different population with lower triglycerides at baseline with slightly higher cardiovascular disease. It's also a safety study. Data from ESSENCE, you might have that midyear and then CORE1 and CORE2 our second half. Is the thinking to have all 3 data sets out at the same time? Or would you put out ESSENCE first and then CORE1 and CORE2 together?

Yes. So this is a really exciting program. This is -- severe hypertriglyceridemia is the next step for Tryngolza following FCS. Both diseases are caused by severely elevated triglycerides. FCS is a genetic disease. SHTG is a highly prevalent nongenetic cause of severe hypertriglyceridemia, inflecting millions of people in the United States alone with no good treatment options. Most of these patients are on fish oils or fibrates to try to manage their triglycerides and they're not effective. Our Phase III study is on top of these drugs. So these patients are above 500 or greater. Most of these patients are much higher than 500 in our Phase III study. They are at severe risk for acute pancreatitis. They have severe abdominal pain and cognitive defects and so forth. So it's a big unmet need. And the FCS success that we had actually derisks the study for sHTG tremendously. Our Phase III program has 3 studies and the ESSENCE study that you referred to is a safety study to support the safety database that's necessary in the eyes of the FDA for a highly prevalent disease. It's more than -- it's about 1,400 patients. These are patients with mildly elevated triglyceride. So it's not our target population. Our target population is 500 and above. The ESSENCE study is looking at 150 to 500. This is really to round up the safety database, and we expect that data midyear, and we'll put out top line data on that, but that's a safety study. The pivotal studies are CORE and CORE2, which is sHTG 500 and above. It's about 1,000 patients in total between the 2 studies and we're expecting that data in the second half of this year. The primary endpoint is triglyceride lowering. Based again on the FCS data, we're very confident we're going to have a highly positive outcome on triglycerides. We're focused on subpopulations of patients, how many patients can we get below that threshold of acute pancreatitis, 880 and 500. And can we replicate what we saw in the FCS Phase III study on acute pancreatitis. We showed remarkable reductions first time ever in acute pancreatitis in FCS, and we're hopeful to see strong trends at least, if not more, in reduction of acute pancreatitis in the sHTG Phase III trial.

In the FCS study, can you just remind us what was the reduction, obviously, different population, but what was the triglyceride reduction? And in that study, if I remember correctly, there were 7 cases of acute pancreatitis and placebo versus maybe 1 only. And on Tryngolza, was there a correlation to a certain threshold reduction of triglycerides, just to see that?

So there were 7 people versus 1. The actual number of events were there were 11 AP events in total in the placebo group, and there was 1 acute pancreatitis event in the commercial dose of Tryngolza. And that 1 event happened -- it was a 1-year study, and it literally happened late in the 12 months of the study. So we almost had 0 events in AP. It was a remarkable demonstration of the belief in the cardiology community that if you lower triglycerides, you will lower the acute pancreatitis risks there. No, sorry, what was the other part of your question?

In that population, do you remember was there a correlation between triglycerides levels?

Right. There wasn't a clear correlation of what level you had to get to in triglyceride reductions. The majority of -- it is generally accepted that 880 is a key threshold for risk of acute pancreatitis. But you also asked me about triglyceride reductions, and that's important. Is there some misunderstanding on competitive programs, I really would just want to clarify. It's very important to review your data, to present your data that was placebo-controlled, placebo-adjusted data, not compared to baseline, right? And to compare similar time points in data, 12-month data competitor program has shared. And when you look at our 12-month data, placebo adjusted were about 59% reduction in triglycerides, which is very, very competitive, and our acute pancreatitis reduction is superior to anything that we've seen out there today. In the eyes of the FDA, it's all about placebo-controlled data. So this will all be harmonized eventually in the labels. We have first mover advantage in FCS by a year or so, a little under a year. That's a big advantage. And in sHTG, we're at least 2 years plus in building this market and get into market. So we're excited about this program. And again, it's a wholly owned Ionis program.

Yes. Okay. I'm going to shift to Angelman. And by the way, we're doing a panel today, 3:50 with KOLs. It's going to be about a half hour on epilepsy and about 20 minutes or so on Angelman. The REVEAL study is going to start enrollment, I believe, first half of this year, randomized 2:1. This is the Phase III of ION582, you're targeting essentially all mutations, your competitors targeting the UBE3A deletions, and you're going to be targeting both adolescents, peds and adults. But is the primary endpoint of expressive communication going to be in all patients? Or is it going to be really in the adults and peds while you're actually including adults for safety, et cetera, and obviously, efficacy?

So our Phase III -- we think we have the right Phase III trial design, and we have the right drug. And of course, we have -- as I mentioned before, we have a validated platform for CNS diseases. This is the same platform that produced SPINRAZA and QALSODY and the like. We are looking at a broad range age group, a broad range of ages. We're also looking at, as you said, mutations and deletions in the UBE3A gene. The prevalence of mutations is far less than that of deletion. So although we're looking at both, we expect the vast majority of our patients to be deletions in our study. Our pivotal study, our age is between 2 and 17 years of age. That's a placebo-controlled trial, about 200 patients or so, 2 doses, 2 dose levels plus the placebo, so 3 cohorts in this study. We think it's the right trial design, and it will go for about 12 months and then patients will roll over into an open-label extension. We also will be evaluating ION582 in our adult patient population as a separate cohort that is also placebo-controlled, and we will also be looking at efficacy on the primary endpoint of expressive communication. Lastly, we will also be evaluating in a separate group newborns, 0 to 2 year olds as well. And again, with SPINRAZA, we have tremendous experience in newborns in our study that allow us to get SPINRAZA approved in newborns using our platform. So expressive communication is our primary endpoint in the study. It is the endpoint where we saw the greatest magnitude of benefit in the Bayley-4 subdomains. That was the subdomain that showed the greatest benefit, but we also saw a strong benefit in receptive communication, in cognition and motor function as well. But we chose expressive because we saw a dose-dependent improvement in expressive. The greatest magnitude in expressive. It's also the most objective measure. These patients essentially do not move at all in expressive communication benefit in natural history data, and there's a lot of natural history data. And they start basically at 0, so you have a complete -- you don't have a ceiling effect, whereas in endpoints like cognition, they may come in at different points, and you may -- could potentially have a ceiling effect to show benefit. It's also the biggest burden on these families. The inability of a person with Angelman syndrome to be able to communicate and tell their caregivers or their parents, what is bothering them, what's working, what's not working? It helps with education, if you can improve it and so on. So we think we have the right endpoints. With that said, we are measuring all of these subdomains in Bayley-4 as secondary endpoints.

And in the adult cohort against placebo, I assume that's randomized against placebo, but I think you said that. Is that 100 patients in that cohort? Or is the next 100 are spread between the adults and the 0 to 2-year olds?

There's fewer patients in our adult cohort. I don't think we've disclosed what the exact number is in that cohort for the adult group. The randomized, the pivotal study, the 2- to 17-year-olds is about 200 patients. But I don't know if we've disclosed the number that we're expecting in the adult cohort.

Okay. Is the adult cohort powered for efficacy? Or is that going to be mostly supportive?

It's really a supportive study, Yaron. We have had very productive discussions with regulators. And we believe that a study in all age groups outside of the pivotal study if they are going in the same direction as the pivotal outcome that we'll have a broad label across age groups, mutations, deletions, and so on.

And the 0 to 2-year olds, I mean that there -- is there a placebo controlled in that study? Or is that -- that's very hard to do a placebo-controlled in that age group?

No, that's an open-label study.

And that's a separate cohort, and that's purely supported based on safety mostly?

We'll also be looking at efficacy in that study as well. Compared to natural history, the natural history data in this patient population is very, very strong.

Okay. No placebo. Okay. Any questions from the audience? Last.

So many exciting catalysts on at horizon, which ones would you point investors to specifically over the next 12-24 months? 1 or 2 that have the most significant either derisking or value creating impact in terms of driving [indiscernible]

I think that monitoring the continued launches of WAINUA for TTR polyneuropathy, which is going very well and the Tryngolza FCS launch as well are big, big events to monitor carefully. Those launches we expect are going to continue to go really well. And the FCS launch is a signal to what we expect in the much broader sHTG population, which is a potential blockbuster opportunity that was fully owned. So the second thing I would say is the Phase III for severe hypertriglyceridemia, which we expect in the second half of this year. And then looking into next year, I think it's going to be very important to the pelacarsen Phase III readout for LP(a)-driven cardiovascular disease is a big one as is our partner program with GSK for chronic HBV. Those are big highly prevalent disease indications that expand the Ionis scope from severe rare indications to broad indications like sHTG, Lp(a) CBD in chronic HBV.

If you don't mind a quick follow-up, also larger indications -- and as you shift to partner programs, the wholly owned programs, you see economies of scale in that regard to further make those programs more efficient and more lucrative.

Absolutely. We've wound down a few Phase III studies, our HAE donidalorsen study is now wound down as is our hATTR polyneuropathy. And they're being replaced with new Phase III studies like in Angelman syndrome. So we expect R&D to be flat going forward. The commercial build for FCS and HAE because these are rare indications, are relatively modest. And we're ready to go for both of these, obviously, FCS and HAE were ready to go in the second half of this year. There's a lot of efficiencies with respect to like commercial operations, market access. We have a great rare disease organization that we built over the last year, which has a lot of commonalities for treating rare diseases. And the FCS segment, the FCS commercial organization is well positioned to then expand into sHTG, which is the same core points, endocrinologists, cardiologists and so on. So there are a lot of efficiencies for the programs that we're bringing forward.

Great. I think we're exactly at time. So Brett, thanks so much for coming. We appreciate it.

Good to see you, Yaron. It was a pleasure.