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

Good morning, and welcome to Ionis conference call to discuss the FDA approval of ZANVASTRO for treatment of Alexander disease. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Walke, Senior Vice President of Investor Relations, to lead the call. Please begin.

Thank you, Joel and thank you to everyone joining us today as we discuss ZANVASTRO, which is now the first and only FDA-approved disease-modifying therapy for the treatment of Alexander's disease. Please be sure to visit the Investors section of the Ionis website to see the press release Ionis' issued earlier today, along with the slides accompanying today's webcast. Before we begin, I would like to remind you that our discussion today will contain forward-looking statements that are based on our current expectations and beliefs. Such statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors contained in our SEC filings for additional detail. With me on the call today are Brett Monia, Chief Executive Officer; Holly Kordasiewicz, Chief Development Officer; and Kyle Jenne, Chief Global Product Strategy Officer. Our agenda today will be as follows: Brett will provide opening remarks Holly will provide a brief review of the unmet need associated with Alexander's disease as well as the data that support the approval and label of ZANVASTRO. And Kyle will review our launch strategy for ZANVASTRO, which represents Ionis' first independent commercial launch in neurology. After Brett's brief conclusion, we will open the call for your questions. And with that, I'll turn the call over to Brett.

Thanks, Wade. Good morning, and thanks, everybody, for joining us on today's call. Today is a landmark day for people with Alexander disease and Ionis as the FDA has approved ZANVASTRO, the first and only disease-modifying treatment for this ultra-rare progressive and often feel neurological disorder. The FDA approves ZANVASTRO with a broad label enabling treatment of both children and adults with Alexander disease. And with today's approval coming nearly 3 weeks early, we are positioned to bring ZANVASTRO to patients even sooner than anticipated. ZANVASTRO was approved based on positive data from our pivotal study in children and adults with Alexander disease. This achieved a statistically significant and clinically meaningful benefit on the primary endpoint measuring motor function. Additionally, trends favoring ZANVASTRO across key symptom domains were also observed along with a favorable safety and tolerability profile. For Ionis, this approval builds on our long history of discovering and developing first-in-class treatments for rare neurological diseases, such as Spinraza, first therapy ever approved to treat SMA and QALSODY, the only disease-modifying treatment approved for a genetic form of ALS. ZANVASTRO builds on our legacy of innovation and reinforces the transformational power of our technology. And as the first independent launch from our industry-leading neurology pipeline, that today includes 8 wholly owned medicines addressing similarly challenging diseases like Dravet syndrome, Prion disease and Angelman syndrome, ZANVASTRO provides a strong foundation to support these potential future lunches. Furthermore, as Ionis' third wholly owned commercial medicine, ZANVASTRO joins TRYNGOLZA and DAWNZERA in demonstrating our ability to successfully capitalize on the opportunities from our rich and growing pipeline. We were pleased to receive a priority review voucher from the FDA in connection with ZANVASTRO's approval. This voucher provides an opportunity to accelerate the FDA review of a future Ionis medicine and potentially accelerate our ability to bring it to patients sooner. In addition to launching in the U.S., we are also expanding access to ZANVASTRO to people with Alexander disease outside the U.S. through our commercial partner, Recordati, which remains on track to file for approval in the EU and Japan next year with additional submissions to follow. Before I turn the call over to Holly, I want to extend my sincere thanks to the Alexander disease community, including the patient families, investigators, advocacy organizations and research partners who help make disapproval possible. I also want to recognize the Ionis team for their innovation, dedication to patients and commitment in bringing this important medicine forward. And with that, I'll turn the call over to Holly.

Thank you, Brett. Before I begin, I would also like to thank the Alexander disease community with our partnership support that made the approval of ZANVASTRO possible. It is a powerful determined community and it has been a privilege to work with them. Alexander disease is an ultra-rare progressive and severe neurological disease caused by pathogenic variants in the GFAP gene. Because it affects the brain's white matter, Alexander disease can involve multiple regions of the brain and present with complex symptomology. While symptoms often present first in infancy or childhood, onset can occur at any age with most patients experiencing progressive motor and cognitive dysfunction, loss of mobility and independence and difficulty controlling the muscles needed for swallowing airway protection and purposeful movement. And sadly, it is almost always fatal. Alexander disease is estimated to affect approximately 1 and 1 to 3 million people worldwide. And until today, in the absence of any approved disease-modifying treatments, care for people with Alexander disease has largely focused on symptom management and support as the disease progresses. Given the smaller size of this population and the urgent need treatment and with the support of the FDA and Alexander disease community, we took an innovative approach in designing our investor registrational trial. We combined first-in-human dose finding and pivotal studies into one control integrated trial protocol, which provided the results that supported today's approval. The ZANVASTRO trial enrolled 54 people ages 2 to 53, the majority of whom are under the age of 18 at enrollment, reflecting the real-world Alexander disease population. The primary objective of this study was to evaluate ZANVASTRO's impact on stabilization of gross motor function in children and adults with Alexander's disease. The primary endpoint in the study measures stabilization of gate speed and participants aged 5 and up using the 10-meter walk test, a commonly used measure of gross motor function and neurological diseases. The study also measured growth motor function in younger participants as well as a number of secondary and exploratory endpoints into capturing the constellation of Alexander disease symptoms. The approved doses of ZANVASTRO is 50 milligram and is administered quarterly by intrathecal injection, the same well-established route of administration as our other approved neurology medicines. We initially tested a lower 25-milligram quarterly intrathecal dose in a small cohort of patients, which enabled us to establish ZANVASTRO's safety and pharmacokinetic profile. Once complete, we tested the approved ZANVASTRO 50-milligram dose in a larger cohort of patients, which represented the pivotal portion of the trial. The study met its primary endpoint, showing a statistically significant and clinically meaningful stabilization of gait on the 10-meter walk test in participants treated with ZANVASTRO 50 milligram. This was a very exciting outcome as it represented the first time a medicine demonstrated disease-modifying benefit in this patient population. Secondary and exploratory endpoints also consistently favored ZANVASTRO. In participants aged 2 to 4, ZANVASTRO improved gross motor function compared with control on the gross motor function measure 88 or GMFM-88, a well-established measure appropriate for this age group. ZANVASTRO also substantially reduced plasma GFAP compared with control, providing evidence that ZANVASTRO engaged the intended target and is modulating the underlying mechanism of Alexander disease in ZANVASTRO-treated patients. ZANVASTRO also demonstrated a favorable safety and tolerability profile in the trial. Most adverse reactions observed in the trial were mild to moderate in severity and serious adverse reactions occurred less frequently with ZANVASTRO compared to control. Efficacy and safety results accorded a broad label for children and adults reflecting a real-world Alexander disease population. And importantly, we believe ZANVASTRO is well positioned to become an important new treatment option and the standard of care for people living with Alexander disease. With that, I'll turn the call over to Kyle.

Thank you, Holly. We are thrilled to bring ZANVASTRO, the first disease-modifying treatment for Alexander disease to people in the U.S. who are living with this ultra-rare progressive neurological disorder. This represents an important new method for a community with significant unmet need. We are launching ZANVASTRO with a broad label, enabling children and adults diagnosed with Alexander disease to access treatment and we are working quickly to get product into the channel so we can bring this important treatment to patients and need shortly. With our customer-facing team already in the field, we are ready to launch ZANVASTRO. Although exact prevalence is not well understood, we estimate that approximately 300 people in the U.S. are living with Alexander disease, approximately half of whom have been identified through medical claims. And among the patients who are currently -- who currently receive supportive treatment for their disease, many do so at one of the approximately 12 leukodystrophy centers of excellence in the U.S. At launch, our team will focus on the centers to ensure identified patients can gain access to ZANVASTRO, if appropriate. In parallel, we will work to reach treaters in neurology centers outside this concentrated network in an effort to identify new patients who may benefit from ZANVASTRO. We will do this strategically, leveraging omnichannel resources as needed to extend our team's reach. We have four initial launch priorities. First, the team will work to transition patients currently receiving ZANVASTRO in the clinical study and expanded access program to commercial drug, while ensuring continuity of care for these patients throughout the process. Second, we will work to get patients who have already been diagnosed with Alexander disease and identified through ICD-10 codes and patient registries on treatment. Third, we will work to raise disease awareness among physicians who care for people with this rare neurological disease to drive new patient identification. Finally, we will work payers to ensure coverage and access for ZANVASTRO. We also tailored our Ionis every step patient and HCP support program to meet the unique needs of the Alexander community. For health care providers and site staff, we have adapted our access and reimbursement support services, specifically for ZANVASTRO, which is intrathecally administered, dosed quarterly and will be reimbursed mostly under the patient's medical benefit. And for patients and families, they will have access to a comprehensive suite of education and reimbursement support services designed to help patients start and stay on treatment. Reflecting the value of ZANVASTRO can bring to the ultra-rare Alexander disease community, we are launching with a price of $25,000 per dose. We have financial assistance and reimbursement support programs in place to help eligible patients access treatment. Out-of-pocket costs for commercially insured patients may be reduced to as little as $0 per prescription. With our focused commercial approach, and experienced customer-facing team in a high-touch patient services model, we are positioned to support timely access to ZANVASTRO for people living with Alexander disease. More broadly, the ZANVASTRO launch represents an important step in Ionis' continued growth, expanding our commercial capabilities, establishing a foundation for future independent neurology launches and advancing our goal of delivering a steady cadence of new transformational medicines for people in need. And with that, I'll turn the call back over to Brett.

Thanks, Kyle. Today's approval is an important milestone for the Alexander disease community and for Ionis. Over the years, we've had the privilege to hear directly from many families impacted by this disease and today, we want to again extend our heartfelt gratitude for their insights, support and partnership in making this monumental breakthrough possible. For Ionis, with ZANVASTRO now approved, we are expanding our commercial portfolio and laying a solid foundation for our future neurology launches. We are laser-focused on delivering launch success for ZANVASTRO and across our entire commercial portfolio, thereby driving accelerating value for patients, shareholders and all stakeholders. And with that, we'll open the call up for questions. Given the importance of today's news, we'll keep the Q&A session focused entirely on ZANVASTRO or if you want, questions applying to our wholly-owned neurology pipeline as they relate to ZANVASTRO. Operator?

[Operator Instructions] Your first question comes from Yaron Werber with TD Cowen.

Thank you very much. This is Steven Ionov on for Yaron. And congratulations again, management on the approval. One question from us. Of the roughly 150 identified U.S. patients, of which 54 were enrolled in the study? And how many more are in the OLE or expanded access program and potentially positioned for near-term conversion? And how quickly do you expect that conversion to happen?

Let me start with the numbers, and I'll let Kyle comment on the time it will take for the conversion. So we're not providing specific numbers on the expanded access program or how many patients are continue to be in the OLE at this time. As Kyle mentioned, they are one of the key areas of focus to convert patients over to commercial as quickly as possible. I can say that -- and Holly, please add anything you want to this, the enthusiasm and the number of patients that rolled over into the open-label extension in the Phase III study was very robust. Do you want to jump in really quick?

No, that's exactly it. So the majority of patients have rolled over the OLE and all have continued.

And they all have continued. And the EAP has gone quite well. We're really, really pleased with how enthusiastic and how efficient it's been to bring in a good number of patients in the expanded access program. Kyle, when you think about converting those over to commercial product.

Yes. Just in terms of timing, the back half of this year, it's going to take us a little bit of time, right? These are quarterly dosed patients, number one. Number two, we don't expect a bolus here at the beginning. There are some logistical as well as reimbursement dynamics that the institutions will have to navigate through. So that's the second piece to this. And then the other part is some of these patients that have been diagnosed might end up being referred back to local centers where they result. So there are some dynamics there in terms of making sure that they can find and identify a treater within their local community that can get on to therapy. But we will work as quickly as we can. Product will be in channel as quickly as we can get that in. And we obviously will be supporting all of the patients that are on drug today to make sure that there's no disruption in treatment.

And I'll just add one last thing, Steven. Our partner, Recordati, is working with us very closely and aggressively to open up an EAP in Europe as well. So stay tuned for that.

Your next question comes from Gary Nachman with Canaccord Genuity.

This is Denis Reznik on for Gary. Congrats on the approval. So while I recognize these are fully different therapeutic areas and different launch strategies, but maybe talk about some of the learnings you've gotten from the successful TRYNGOLZA and DAWNZERA launches that could be applied to this launch, particularly maybe with the Ionis Every Step program. And then maybe talk a little bit more about how conversations with the payers have progressed with regards to your WACC price and what the overall path to full reimbursement access looks like?

Yes, I'm happy to touch on that. Let me -- I'll just first start the execution on the launches that you referenced with TRYNGOLZA and DAWNZERA, have really been very, very strong. So we've got all of our back-office capabilities and operational components that are in place, and the team has done a very, very good job of making sure that we can do things like a drug and channel quickly. Make sure that, that drug can obviously get to patients when the prescriptions come in, et cetera. So we've learned a lot in terms of the operational dynamics of commercialization, and that's gone extremely well. As it relates to the Ionis Every Step program, that is really one of the differentiators and one of the things that we really take to here at Ionis. We map what we described as the patient journey for every single program that we have. And we think about from the very beginning of when a patient either needs to be diagnosed or is diagnosed all the way through to when that patient ends up going on to therapy and remaining on therapy. How can we support them along the way. and what's needed from a disease state standpoint, what's needed from a product education standpoint, obviously, access and imbursement is important and making sure that out-of-pocket expenses and things can be managed appropriately. But those are the types of ways that we design our patient services program. Ionis Every Step. And we've done exactly that with ZANVASTRO. And I think that's a really important piece here for us is this is going to be the first time that we're moving into a buy-and-bill model. We understand the distribution. We understand the needs from the payer standpoint, we understand the institutions and also the patient community in terms of what they're going to need in order to have support from an access and reimbursement standpoint. So that's a very strong focus for us. As it relates to working with the payers, we took a very similar approach we've taken with our previous programs. We go out and we speak to the ADPs that are the treaters of this disease. How are they -- how are they going to use the product and what do they need in terms of reimbursement and support and then we go to the payers, and we have conversations about the prevalence of the disease, which as we've talked about, is an ultra-rare condition here. And we also look at other analogs within similar disease areas as well as outside of those disease areas to make sure that we can parallel that and that we ultimately end up with a price that is in alignment with what the value recognizes for the therapy. And so we're very pleased with the conversations we've had with payers early on. We believe this is going to be a medical exception access the institutions are very familiar with the way that they go through that process and how they manage this. And obviously, we have the resources and capabilities to help support the institutions in that process moving forward.

Your next question comes from Salveen Richter with Goldman Sachs.

Could you speak to the overlap, the Centers of Excellence that you're targeting have with Angelman treaters and how you can use this launch to establish referral networks for pediatric neurology more broadly?

Yes. So there is some overlap. The focus here are going to be in the leukodystrophy centers, which there will be a little distinction there. But beyond the leukodystrophy centers, we're also going to be focused on about 25 of the key neurological centers that are out there. And in those neurology centers that's where we see some of the overlap between what we're working on here and then the program with Angelman. I'll also mention our medical affairs team that has been out working in the neurology space for several years now. a very strong team, well educated. They know the key opinion leaders in the Alexander disease space as well as in the Angelman space and they're appropriately going out and educating on the disease and supporting those HCPs and the science and the needs that they have in order to learn and understand how to diagnose and treat these patients.

And just to remind everybody, this disease also is a disease very similar like Angelman and that affects both children and adults. So about 2/3 are children and the other 1/3 are adult similar to the Angelman population. So those are -- seeing those neurologists and have a lot of those same challenges with converting from doctors, from the pediatric neurologists to the more standard neurologists, and those are all communities that are talking and working together because it is a unique challenge for some of these diseases.

Your next question comes from Jason Gerberry with Bank of America.

This is Chi on for Jason. Congrats on the approval. I think when I ask the pipeline related to ZANVASTRO question. So if you may, can you remind us what ASO backbone technology is ZANVASTRO based on? What other key neuro pipeline programs of yours use the same backbone technology and how today's approval changed your confidence of the delivery mechanism for the broader neuro pipeline, given perhaps renewed focus on this topic in light of recent competitive news?

So thank you for the question. So this is a mixed backbone gapmer oligonucleotide. So it's the same chemistry as diranersen, our tau program that is partnered with Biogen. Within our wholly owned pipeline, it's the same chemistry as our Angelman syndrome program as well as our PH Merge Blockers disease and MECP2 duplication syndrome program, all in our pediatric neurology pipeline. So it's a chemistry that we're extremely familiar with. It's a similar chemistry that was used for QALSODY between QALSODY now and ZANVASTRO, we had improved our screening paradigm. So ZANVASTRO is using the latest optimized screening techniques as similarly to our Angelman syndrome program. Like our Alexander program, our Angelman program is also quarterly dosed and at a similar dose range. ZANVASTRO was dosed at 50 milligrams and our Angelman syndrome program, which is in Phase III right now, is dosed at 80 milligrams.

So just to put a fine point on that. Thanks, Holly. It's a proven platform. Chemistry is absolutely critical. And it goes beyond chemistry, however, we also have, what I believe is by far the most rigorous approach to selection, screening and identification of optimized molecules to maximize potency and avoid off-target effects of oligonucleotides. That, coupled with the chemistry that Holly highlighted is also very, very important to safe and effective molecules. And that's what we do with it and vascular -- that's what we did with Angelman's and the other programs that are in our wholly owned pipeline that Holly just touched on.

Your next question comes from Mike Ulz with Morgan Stanley.

This is Avi Novick on the line for Mike. Congratulations on the approval. I guess, one, can you talk about feedback you've heard from KOLs and how -- and how enthusiastic are they about prescribing ZANVASTRO to their patients. And then second, can you also maybe speak to your efforts to identify the approximately 50% of patients who are not yet diagnosed.

Yes. So I can touch on the first point. So the community is overjoyed. The flooding of e-mails and notes that we have gotten is extremely strong. The KOLs, as soon as we saw the data have been encouraged and looking forward to this day today. And you can see that also in our EAP program where we have had significant demand from the patients as well as the KOLs to participate in that and to get their patients on drug. So the enthusiasm is absolutely there from the community and the KOLs.