Ionis Pharmaceuticals, Inc. ($IONS)

Great. Good afternoon, everyone. I'm Ellie Merle, one of the biotech analysts here at Barclays. Very happy to have Ionis here with us today for a fireside chat, but we should call it a beachside chat since we are in Miami. Joining us from Ionis is Brett Monia, Chief Executive Officer. Brett, thank you so much for making the time and joining us today. Before we dive into questions, and I know there's a lot of programs to cover and a very catalyst-rich year for you. Maybe if you could give us an overview of the Ionis platform and portfolio and some of the key catalysts for the company over the next 12 to 18 months.

That sounds great. It's great to be here, Ellie. Thanks. Let me provide a brief intro on where we are today and where we're headed at Ionis. So as I think most people in the audience are aware, we're an RNA -- we're a genetic medicines company focused on novel treatments targeting RNA for clinical medicine, diseases where there's a high unmet need. And 2026 is really set up to be a big year for the company, a transformational year for the company. We have so much coming. And that's really built on tremendous momentum that we established last year in 2025. In 2025, we launched our first 2 independent medicines, the first ever FDA-approved medicine for familial chylomicronemia syndrome, FCS, Tryngolza. And as our first independent launch in our history, it was a spectacular success. Quarter-over-quarter growth, $108 million in total revenue for the year, clearly beating all estimates. We also had our second independent launch with the August approval of DAWNZERA in hereditary angioedema, a prophylactic treatment for that disease, which really, really serves patients incredibly well, meeting the needs of patients. And that launch, too, is off to a very good start. We also had several pipeline readouts last year that is going to really serve us well this year. The breakthrough, the most notable Phase III readout we had was a wholly owned program of the second indication for Tryngolza to follow FCS, which was for severe hypertriglyceridemia, a disease that's not rare that afflicts millions of people in the United States that are in desperate need for new treatments to substantially lower triglycerides and avoid acute pancreatitis, and we hit it out of the park. We shared the full data at the American Heart Association presented the data. And indeed, this is really set up to be a really big drug for the company, for patients, a blockbuster potential. And then also right around the same time, we announced positive Phase III data for a new medicine for the treatment of a neurodegenerative disease called Alexander's disease, a rare condition in which there are no effective treatment options that's commonly fatal. We showed highly statistically significant benefit in all endpoints in the study essentially, including the primary endpoint of motor function. And as I said, that momentum just sets us up great for this year. This year, we're looking forward to the approval and launch of Tryngolza for severe hypertriglyceridemia, a blockbuster opportunity, as I mentioned, wholly owned. And just recently, just last week, we received priority review from the FDA, recognizing the importance and the unmet need here. So we're going to launch in July. And that's obviously a big event for the company. We're also expecting the Alexander drug -- Alexander's disease drug to be approved this year, and we'll launch that in the fall. And from our partnered pipeline, the beat goes on, we're expecting 5 Phase III readouts this year, one of which has already been achieved with our partner GSK for chronic HBV which is -- which was highly positive. We announced that in January with GSK. And then we're expecting the Phase III readouts for eplontersen for TTR cardiomyopathy and pelacarsen for Lp(a) cardiovascular disease, and IgA nephropathy drug and another -- a second ALS drug. We have one approved already. So great year last year. This year is going to be even better, and we're off to a fantastic start.

Great. Yes, definitely, we're probably the company with the most catalyst in my entire coverage, a lot going on. Maybe starting with Tryngolza and the commercial trajectory in FCS and potentially soon sHTG.an you give us more color on kind of the cadence of revenues you expect over the course of the year?

Yes. It's going to be really interesting. And very -- we're very much looking forward to it. It's going to be a big year for Tryngolza for severe hypertriglyceridemia. As I mentioned in my opening comments, the FCS launch is incredibly strong and quarter-over-quarter growth, beating all consensus estimates on total revenue. And this is continuing into this year with FCS -- with the FCS indication as we prepare for sHTG. The demand for Tryngolza continues to ramp up for FCS. Patient stories, physician experiences are so incredibly strong. We're seeing reauthorizations come in over and over again. Patients are staying on drug, and we're seeing continued growth demand -- patient demand for Tryngolza in FCS. Despite the emergence of a competitor that came late last year, we're continuing to see this go really well. We are experiencing some pricing pressure. This is a rare disease drug with a rare disease price and a competitor came in with a much lower price for FCS. So we're managing that effectively. And it's different payers are requiring different things. All of them recognize the fact that we're just a few months away from launching in sHTG, which is really the key event. When we get to sHTG, when we get to the launch in July with approval in late June expected, we'll announce price, but there'll be a step down in price because we're going to go from a population that's estimated to be 3,000 in the United States to a population that's estimated to be 3 million in the United States. So it warrants a -- obviously, a significant step down in price. We're working through that right now. We'll announce price. Our job is to maximize value, highest price possible, while ensuring that patients -- more patients -- the maximum number of patients can access Tryngolza without physicians having difficulty in prescribing the drug or payers creating roadblocks for the drug to really maximize the full potential of this blockbuster opportunity. So that's going really well. We're managing it effectively, and there's a lot more to come.

Great. And feel free to answer this how you will. I know it's a sensitive topic, but price there's a lot of conversation amongst investors around how to think about the sHTG pricing. How is your thinking on price evolved over time? And to what extent are you thinking about how this price decrease will work in practice?

Yes. So I think it was almost 2 years ago when we first introduced the opportunity in severe hypertriglyceridemia, an opportunity that was not appreciated by really almost anybody. And we were making the case that this is a big opportunity, a big unmet need. Of course, everybody recognizes that now. But one of the questions we continue to get was price. How are you going to price it when you go from FCS. And we did some back-of-the-envelope estimations, large patient population. And what we put out there at that time was $10,000 to $20,000 price net, very important that that's a net price for sHTG. That was before we had data. That was before we did really extensive market research, HCP demand research, payer research and so on. And now that we have the Phase III data, groundbreaking results, we've been able to go and do more informative HCP demand research and payer research. And we're coming to the conclusion there. We'll announce a WACC price. We're going to move away from net price announcements and disclosures. But we're going to focus on the WACC price. And we'll announce that, as I said before, when we launch the drug this summer. And again, we're threading that needle, maximize price while maximize the ability for physicians to prescribe without a hassle and payers to not provide roadblocks and access.

And the sHTG population is very large. How are you thinking about the initial focus population for the launch? And what you're expecting, frankly, from the initial cadence of the sHTG launch?

So as I mentioned, 3 million-plus people with severe hypertriglyceridemia. That's defined as triglycerides 500 milligrams per deciliter and above normal triglycerides or below 150. These patients suffer from many, many issues. Most importantly is the risk of a potentially fatal acute pancreatitis attack. It's not fatal, it tends to lead to additional AP attacks, which caused pancreatic -- eventually pancreatic failure if they continue. High unmet need. We showed an 85% reduction in acute pancreatitis attacks in our Phase III study, unprecedented. Number needed to treat to prevent an AP attack in the highest risk population was 4 patients. treat 4 patients, you'll prevent potentially fatal AP attack, really remarkable results. Out of the gate, that's the population we're going to focus on, is that highest risk patient population. And that's based on what we're hearing also from the physicians, the cardiologists, the endocrinologists, the lipid specialists that manage these patients. First out of the gate are going to be those patients that have got a history of acute pancreatitis or have such high triglycerides that they're going to have an AP attack sooner or later. We want to prevent that first attack from happening. That's typically above 880 milligrams per deciliter. That's the high-risk population that's estimated to be about 600,000, 700,000 patients in the United States. And then when you add to that patients with other comorbidities. They may not have had an AP attack. They have sHTG, but they have cardiovascular disease or diabetes, that rounds up to about 1 million in the United States. That's the focus for us out of the gate. As far as revenue guidance and those sorts of things, we're going to be going from a rare disease price to a specialty price out of the gate. So there's going to be some impact initially on revenue out of the gate as we make up for volume in this indication, which will start to really take hold in the second half of this year and then really accelerate next year. We estimate $2 billion plus in peak product sales in the United States alone, and we're very confident we're going to achieve that based on the profile of Tryngolza for sHTG, based on the fact -- based on what we've experienced with FCS, which has been highly, highly positive for this medicine based on the HCP demand, what we're hearing from it and based on the awareness, everybody in the cardiology and endocrinology community is aware of Tryngolza and they just can't wait to get -- to be able to treat their patients, sHTG patients with Tryngolza. So it will dip a little bit in revenue as we begin to get to that acceleration phase when we really increase volume.

So -- but dipping prior to the launch because we should see price decreases even before the approval in sHTG.

Well, we're getting some price pressure, as I mentioned before, in FCS between now and the late June PDUFA date, which we're managing effectively. And then we'll have a step down to the sHTG price at launch. So it will be a slow drop in revenue, but then we're expecting in the second half of the year for it to pick up.

Certainly a very exciting opportunity and could be a major growth driver for you. So we look forward to seeing that launch. Turning to some of the major clinical readouts this year. So you have a lot of them. Maybe starting with CARDIO-TTRansform, I guess, what's the latest on your expectations for what good data would look like and your thinking on how the patient population, whether it's the patients on baseline tafamidis or other factors in terms of sort of the severity of the disease might compare to other trials in the space?

Yes. So ATTR cardiomyopathy is a -- in our -- is a growth market. We've estimated 500,000 patients plus that have ATTR cardiomyopathy heart failure due to a buildup of TTR in the cardiac tissue. And -- but we don't really know what the prevalence is. This is clearly a growth market. There are several treatments out there today. There are 2 classes, stabilizers and silencer that's on the market will be the second silencer, assuming positive Phase III data in the second half of this year. And just a quick reminder for everybody that this same medicine is already approved in many geographies around the globe, including the United States for the hereditary form of polyneuropathy. And that launch is going very well. The demand is very high, continues to grow in patient demand quarter-over-quarter, going very well. I think that speaks to the profile of the drug. It's a really, really effective and well-tolerated medicine. For cardiomyopathy, we have the largest study ever conducted in ATTR cardiomyopathy. We were pleased with the results of the first silencer that read out for Phase III in TTR cardiomyopathy and how well the launch has gone because that bodes really well for us because we're -- we have the same mechanism of action, very similar profile, virtually identical reductions in TTR in this population. So it greatly derisked the outcome of our Phase III study. But based on the size of the study and the design of the study, we're going to have several aspects of data that could be highly differentiating. Most notable, you highlighted the combination data, right? Tafamidis is the standard of care for TTR cardiomyopathy today in the United States. And there's been some usage of silencers -- a silencer plus stabilizers out there. But there's clearly going to be and there has been more recently pushback, particularly by payers to combine these data because they're expensive drugs, right? And there's no data. There's absolutely 0 data supporting combination usage will create added benefit to patients. Everybody progresses on stabilizers. The breakthrough treatments, no mistake about it. But everybody is progressing and some -- many patients progress rapidly and quickly. So -- and adding another mechanism of action like a silencer to a stabilizer could really add benefit, but there's no data. All previous studies that -- were vastly underpowered. We have the potential to generate data for the first time that can show potentially if the mechanisms are indeed additive, we need to learn that. first time to really provide convincing evidence that combination adds greater benefit to patients with TTR cardiomyopathy, great unmet high unmet need. Our peak product sales for eplontersen when we get to this market, we've announced it with our co-development and co-commercialization partner, AstraZeneca, to be $5 billion plus, $5 billion range. That's based on replicating the previous silencer, if you will. Having added data like combination data or other subgroup data, which we are in a good position based on the size of our study is just upside to that product sales revenue that have been projected. In addition, we have the ability -- patients have the ability with our medicine to self-administer, which is unique, right? It does not have to be administered by a health care provider. Ours will be the only silencer that can be administered by a patient themselves in the United States. That, too, is resonating incredibly well in the neuropathy, polyneuropathy launch. And we think that, that will be amplified in the cardiomyopathy launch.

Great. That's helpful. What are your latest expectations in thinking about whether you will reach statistical significance on the combination?

Well, that's a high bar. Our -- what we think will be a big win is if we can provide data that is -- that appears clinically meaningful and believable by HCPs that my patient is progressing, but they're getting some benefit from a stabilizer, show me the data -- and of course, we publish and so on that patients are going to do better. I'm going to fight for this. I'm going to advocate for this combination usage. And of course, once tafamidis goes generic, then the headwinds on using combination data, if there's data out there to support it or combination usage, if the data is out there to support it will be easier to justify. With that said -- so that's our hope. Again, assuming the mechanisms are additive, we have to prove that. If we hit statistical significance, and that's a grand slam, if you will, right out of the gate. We're not necessarily, of course, powered for that. We're powered for our primary endpoint. Secondary endpoints, you don't typically are powered for. However, in case we underestimate the effect size of combination versus monotherapy in our study, we did make the decision to elevate the secondary endpoint on combination usage as a prespecified secondary endpoint. So we will have in our hierarchical statistical analysis plan just in case. But our guidance is we're looking to see if we can just have believable really meaningful data showing strong trends favoring combination usage.

Interesting. Well, certainly a large and growing market. So we look forward to seeing that data. Another major cardiovascular readout coming this year, Lp(a), massive population. How are you thinking about what would be clinically meaningful from a relative risk reduction here? Like if we see something like 15%, is that clinically meaningful? And how are you thinking about that readout?

Clinically -- clinical meaningfulness is always hinged on the unmet need, right? 8 million to 10 million people today have cardiovascular disease, often fatal myocardial infarction, strokes due to an independent risk factor, Lp(a), high levels of Lp(a) are at high risk for cardiovascular disease. And it's a big unmet need because no other treatments effectively lower Lp(a) to get them out of harm's way for an event, right? So we're in the Phase III study. We did the Phase II. We licensed the drug to Novartis. The HORIZON Phase III study will read out in the second half of this year, maybe by midyear. And we're expecting 80% plus reductions of TTR -- of Lp(a) that gets the vast majority of patients into the normal range of Lp(a) getting them out of harm's way. We hope and first to market by a significant length of time if the study is. So a groundbreaking study in cardiovascular medicine. We -- the study is powered, designed to achieve a 20% relative risk reduction in the overall population, 25% relative risk reduction in a slightly sicker patient population based on slightly higher Lp(a) levels in the study. That's all been published now, the demographics for the study. Your question, what's clinically meaningful? Yes, sure, 10%, 15% is going to be a big deal. The unmet need is enormous. There's no other treatment. Physicians are seeing patients that have had 1, 2 cardiovascular events, sometimes in their 20s, 30s, 40s of age because of this independent risk factor, any statistically significant reduction -- statistically significant benefit on the primary outcome is going to be important and it's going to be meaningful for HCPs who are trying to manage these patients and they have no weapons and there's no ability to manage Lp(a) CVD. So it's powered for 20%.ow me stat sig, and I think we have a real breakthrough in cardiology.

Definitely exciting. We look forward to seeing that data. Turning to your tau program with Biogen. I guess, what are your expectations for data this year? And what would give you confidence to move forward?

Yes. Our 2 therapeutic areas of priority for Ionis are in cardiology, cardiometabolic diseases, we just talked a lot about that. And then in neurology, a platform that has delivered SPINRAZA for SMA QALSODY for SOD1-ALS, our Zilganersen program, positive Phase III data in Alexander disease that I mentioned in my opening. Next up is the Phase II data for tau. Tau is considered to be one of the most relevant targets for dementia, Alzheimer's disease. The problem is that approaches like antibody approaches have not been able to target intracellularly produce tau, only extracellular, mopping up the extracellular. But we know that tau intracellular causes a severe neurodegenerative disease as well as extracellular. And by blocking production, we're going to address both of those for the first time. In fact, we already did. Two years ago or so, we reported results of Phase I/II in patients with AD, where we showed not only substantial reductions in tau and CSF, we showed reversal of tau pathology by PET imaging. Neurofibrillary tangles, reversal with evidence of improved cognition in that study. And that's exactly what the Phase II study that's going to read out midyear this year in studies called CELIA, a large Phase II study with the primary endpoint of being CD sum of boxes, which is the cognition primary endpoint in the study. We're looking at 2 dose levels. We're looking at dose intervals, 3 months or 6 months in intrathecal dosing. And it will be the first validation of a tau targeting approach blocking production in the neurology field. You asked expectations. I expect the study to be positive based on the Phase I/II data where we have already generated evidence of reversal of pathology and some evidence of improved cognition.

Okay. Great. Turning to Angelman's, not readout from you this year, but a readout from Ultragenyx, which I think a lot of investors view as a meaningful read-through to your program. How are you thinking about the size of the opportunity in Angelman's? And what gives you confidence that some of the Phase II data that you've seen or that Ultragenyx has seen could translate into a successful Phase III study?

Yes. So there's about 100,000 -- this is a rare disease, but there's about 100,000 people living with this severe neurodevelopmental disease, Angelman syndrome. There are no effective treatments available for this disease. We and others, 2 others sponsors have reported positive early clinical data. Same mechanism of different drugs, but utilizing the same mechanism of action to address the root cause of the disease, strong evidence of benefit in open-label studies compared to natural history data. Now we have the fortune of the natural history data in Angelman's is really strong. People have been working on this for years. So we have really good baselines to compare to, but it's still open label. With that said, we have a proven platform in neurology. We know how to discover neurology drugs very effectively. And our Phase I/II data compared to natural history is very, very strong. We've seen evidence of benefit across all symptoms, whether it be communication, cognition, motor function, just whatever instrument you use, Bayley-4, CGI, ORCA, others, we're seeing very consistent benefit. And we're seeing now in long-term extension data that we reported last year, patients that are rolled over into the OLE from that study, continued benefit in endpoints. So the first readout is going to be the second half of this year. We're very much looking forward to it. We believe in our medicine. We believe in our trial design. And we don't believe -- we believe that our drug is called Obudanersen is really has a strong potential to really make a meaningful difference for the Angelman's community.

Great. Well, I know we're at time, but exciting year ahead and certainly a very large pipeline. So exciting things to come. I appreciate you making the time.

Thank you, Ellie. It was a pleasure.