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

Okay. Thanks, everyone, for being here. My name is Yanan Zhu. I'm one of the biotech analysts here at Wells Fargo. It is my great pleasure to be joined by Brett Monia, CEO of Ionis Pharmaceuticals. Thank you, Brett, for being here.

Thank you, Yanan, and good morning, everybody. It's great to be here.

I was wondering if you can start us off with the overview of the company, and then we can jump into questions.

Sure. Happy to. I'll be brief, though, because I know you have a lot of questions, Yanan, and we want to get to those. But as expected, this has been a highly eventful year for Ionis. We've had several really important positive strategic outcomes this year. And we've also had some disappointments, not surprising when you're consistently seeking to deliver breakthrough treatments in therapeutic areas -- new therapeutic areas, sometimes you have disappointments. But I really do want to emphasize the incredible success we've had this year already. We've had 2 FDA approvals, both in areas where there is high unmet need, and we're first. Tryngolza for severe hypertriglyceridemia, Zanvastro for Alexander disease, both wholly owned products. And we're anticipating a third FDA approval by our partner, GSK, later this year in chronic HBV. Again, another breakthrough, producing unprecedented clinical functional cure rates in patients with chronic HBV. We've had 3 Phase III readouts this year, and we are on track for 2 more. And the pipeline, in addition, continues to deliver and go very well. We initiated a Phase III study for ION-775 in severe hypertriglyceridemia that supports twice or once a year dosing. As a follow-on to Tryngolza, we started a Phase II study in Dravet syndrome using a very important new chemistry that we've created that supports potentially once per year dosing, twice a year or once a year dosing. And I can go on, but maybe we should just open up for questions, but it truly has been a strategically successful year so far.

Right, right. It's been a very eventful year for sure. I actually wanted to start with Angelman syndrome, one that you didn't have any update, but I think a lateral update from Ultragenyx programs has caused some investors to react I don't know if you can touch on when you saw that result, were you surprised? And anything that you think investors should not read through to your program?

Yes. So sad for the Angelman's community, we really feel for them. This is a community that has been in desperate need for a treatment. They've been disappointed many times with unsuccessful clinical readouts. With that said, we see 0 read-through to our program. Prior to the readout from the program that you just referred to, we've been signaling to the investor community and to anybody that listened to us for well over a year that although we are hopeful that the study would show signs of success, we are very -- not very optimistic that it would be successful for several reasons. But most notably, Yanan, is the fact that despite the fact that their molecule and our molecule are using similar mechanisms of action, a mechanism of action that we actually pioneered and published on for the first time, and they have similar potencies based on a whole host of data that we've generated, they were dosing substantially lower than us. And that's because that they ran into toxicity issues in the clinic and preclinically that forced them to be capped, their dose to be capped. Substantially lower dose, and we were concerned that they were under dosing. We do believe that, that was the culprit in their study at the end of the day. Our program, of course, rides the heels of a proven platform in CNS diseases. Let's not forget that Ionis is the only company that has delivered oligonucleotide successes that have been FDA approvals in the clinic to date, proven platform that has delivered SPINRAZA, Zanvastro, now, QALSODY and proof of concept even in Alzheimer's disease with our tau program. So we're dosing at the maximum dose that we think -- at the maximum dose we set out to dose at. And we think that we've maxed out -- we will max out on efficacy when our study reads out next year. We have fully enrolled this year, the study, and we're looking forward to data in the second half of next year.

Got it. Got it. That's very, very helpful. Let's touch on Lp(a). So this is a very surprising result. It's a very -- it's a good target with a lot of backing from human genetics. When this data readout from Novartis, your partner, can you share your thoughts on what might be the cause for the study to not turn up a positive result? And what does this mean for the program and perhaps also for the Lp(a) field?

Yes. So this is another first for an Ionis-discovered medicine to test the Lp(a) hypothesis, if you will. That is to address an independent risk factor that's been strongly associated with cardiovascular disease. High levels of Lp(a) are strongly associated with cardiovascular disease. So we set out to determine whether or not it could be modifiable with a pharmacological intervention, pelacarsen, by lowering pelacarsen to normal levels. And that's what we did in the study. We got substantial lowering of Lp(a) that were similar to what we reported in our Phase II study on the order of 75% to 80% reductions in Lp(a). We saw good safety in the study, and those reductions in Lp(a) really normalize a lot of patients. Unfortunately, it didn't result in a successful outcome on MACE, a 4-point MACE endpoint. And the study was -- did not achieve statistical significance in the primary endpoint. It also didn't achieve demonstrate benefit in the subgroup of patients that were at higher risk in the study. So it's unfortunate that the drug did what it was supposed to do with respect to lowering Lp(a) with good safety, but it may implicate Lp(a) as an independent risk factor, but one that may be unmodifiable, at least in this patient population that all other risk factors are well controlled, LDL, hypertension are very well controlled. And as a secondary prevention, maybe it's just not modifiable. We'll see. We don't see a path forward for pelacarsen. Novartis is going to be presenting the full Phase III data at a medical congress as soon as they can, so maybe later this year. So stay tuned for that. But unfortunately, we don't see a path forward for pelacarsen.

Got it. Yes. Thanks for those thoughts. Let's touch on another recent development, CARDIO-TTRansform. So I know you and I'm sure everyone in the field has hoped for the combination to produce even greater efficacy than silencer or stabilizer alone. However, the result did not point that way. So could you help us understand the results in the combo part of the study and also help us understand what the path or the next steps for the program?

Yes. So I really want to highlight that we had 3 presentations related to eplontersen and ATTR cardiomyopathy, ESC last week, all high-quality presentations in large forums at the meeting. The overall study outcome and then the subgroup -- focus on the subgroup in combination with tafamidis, if you will, or stabilizers. The study did not hit its primary endpoint in the overall -- the composite of cardiovascular mortality and events, serious CV events in the overall population. However, in patients that were not on stabilizer at baseline, we call this the monotherapy group, we saw a remarkable efficacy. We saw efficacy that's similar to the only other silencer that's on the market today with respect to a risk reduction of nearly 30% risk reduction. We saw TTR reductions that were as good as anything that's been out there today, around 80% TTR reductions, all good safety in the Phase III study. So the monotherapy worked very well. But unfortunately, there was no added benefit in combination with stabilizers. We had more than 50% of patients on stabilizer at baseline. And then that -- the involvement of tafamidis or stabilizer in the study grew as the study continued with lots of drop-ins as tafamidis became the standard of care, not only in the United States, but in Europe and elsewhere. That would have been fine had there been added benefit on top of the stabilizer. But unfortunately, there was none. That was not only the conclusion of Ionis at AstraZeneca, that was the conclusion of an independent academic group that presented a meta-analysis at ESC last week when they said there's no added benefit in any studies conducted to date in combination of a silencer with a stabilizer, including this one and other ones that have come out. Recently, that is one reason that the study didn't hit its primary endpoint. The second reason is that tafamidis actually performed pretty well in the study. Remember, patients are being diagnosed much earlier in disease today, unlike the Phase III study for tafamidis and ATTR-ACT 10 years ago, where patients were being diagnosed with late-stage disease and it was difficult to impact their disease course. Patients are being diagnosed much earlier today. The stabilizers actually performed very well as monotherapy. And we just couldn't add to the benefit that tafamidis was achieving in our study, but the study was executed very well. The monotherapy group performed exceptionally well. And AstraZeneca is weighing their options. They haven't made any definitive decisions. We're helping them, of course, in any preparations and discussions with path forward. But I would hold off and wait to hear from AstraZeneca later this year on whether there is a path forward as a monotherapy for eplontersen in ATTR cardiomyopathy. I do want to say that in polyneuropathy, the launch continues and the drug is very effective and patient uptake continues to be relatively strong. And it's a good drug. Unfortunately, the study design caused it not to be successful in the overall population.

Great. Great. So I was wondering, of course, it's all pending the decision-making by your partner and you on the path forward. I was wondering in that process, could you walk us through the justifications perhaps arguing for next steps for the monotherapy? And also perhaps in the -- if that path works, what is the use set and use case for monotherapy?

It's a great question. My personal opinion, I think there's significant justification to bring eplontersen to ATTR cardiomyopathy patients because patients deserve options. Today, there's 2 stabilizers and there's 1 silencer. Patients deserve other options and eplontersen offers -- it differentiates from the other silencer that's on the market in several ways. Most notably, they can be administered by the patient themselves, doesn't have to -- self-administration using a simple auto-injector doesn't rely on the administration by a health care provider. We think that that's important for patients as a choice. But the bar is high. I mean, let's not fool ourselves here. FDA generally does not accept submissions with failed primary endpoints in studies. But you're asking in my opinion, I think patients deserve choices. I see no reason why silencer cannot be used as first-line treatment. It's the combination that we and experts that were -- it was highlighted at ESC last week, there's probably no path forward for combination usage of a stabilizer and a silencer. Let's not lose sight of the fact that we're targeting the same pathway with a silencer and a stabilizer, right? We're targeting TTR, whether we stabilize it or we knock it down, we silence it. We maxed out. But I see silencers as they can be used as frontline therapy, absolutely. The risk reduction was as good as stabilizer, just there was no added benefit on top or you can use a stabilizer as frontline and some physicians, it's going to be on patient preference or do they want an injection once every month or a few months or do they want to take a pill a couple of times a day. It's really going to come down to preference, I think, but there's no reason why it can't be used as frontline or second-line treatment. I also want to add, Yanan, that this is a big market, and there is room for multiple players, first line, second line. And we don't really know what the ceiling is for ATTR cardiomyopathy. It's a big market opportunity.

Great. Great. Let's talk about Tryngolza in severe hypertriglyceridemia. You have a launch going on. This is the first quarter for this indication, only started a couple of months ago. But I hope you -- could you -- I'm wondering if you could share with us what have you been seeing regarding the launch momentum. I guess some focus could be patient demand, which patient population are being prescribed the drug currently? Any insurance hurdles? And any pushback on the liver fat finding...

Yes. Sure. As I mentioned in my opening comments, we've had several very important strategic successes at Ionis this year. The FDA approval of Tryngolza for severe hypertriglyceridemia was an enormous breakthrough in this massive patient population. In the U.S., 3 million people plus are being treated with sHTG or have sHTG, many of whom are being treated, but the treatments are inadequate. They're fibrates or fish oils or statins, which barely lower triglycerides at all, unlike Tryngolza, which shows 70%, 80% reductions in triglycerides on top of those medicines and the FDA approval included a reduction, highly statistically significant and really powerful reduction in acute pancreatitis events, the outcome that is most significant for people with severe hypertriglyceridemia in the indication statement, even though AP, acute pancreatitis, was a secondary endpoint. And the approval was 6 days early. So we are very pleased with this breakthrough treatment, wholly owned medicine that we launched within a few days after the approval. We're pleased with the momentum of the launch to date in the U.S. We received -- we put -- we had drug in channel within a day. We had scripts received the day of approval, and the momentum is good. We're seeing lots of -- we're seeing prescriptions coming from cardiologists, endocrinologists, lipid specialists. And not surprisingly, as we expected, they are prioritizing those patients with the highest risk. Let me remind everybody that the label is for -- is the definition of sHTG. It's for people with severe hypertriglyceridemia as an adjunctive diet and exercise, which is defined as triglycerides 500 milligrams per deciliter and above with -- as a treatment to reduce risk of acute pancreatitis. That's the label. But as we expected, physicians are prioritizing those patients with -- that are at the highest risk to come into Tryngolza. Those are patients with a history of acute pancreatitis. Those are patients with triglycerides that are so high, 880 or above that they're at very high risk of acute pancreatitis, whether or not they've had an event or not in the past. And that's what we're seeing come in primarily from the physicians. Payer discussions are going quite well. We're very pleased. We did a lot of payer research prior to setting price, as we went from a rare indication, FCS to a prevalent indication, sHTG. And we've had many productive discussions with payers since then as well. And we're pleased that payers are not pushing back on covering to label, not just the high-risk patients or anything like that, it's pay to label 500 milligrams per deciliter and above. But with that said, physicians, rightfully so, are prioritizing those high-risk patients. And we're expecting a steady launch, physicians need to be educated on the label. They need to be educated on the dose options that we have approved. They -- some of them like to bring their patient in to do a triglyceride measurement prior to prescribing or getting their patient on drug and then just the normal operations that are -- happen in a launch in a highly prevalent disease with very busy doctors. But we're pleased with the enthusiasm, the sentiment, the need that we're hearing for Tryngolza for sHTG. And we're pleased with the momentum that we've built so far.

Great. Definitely looking forward to a quarterly update for continued momentum on that launch. I was wondering how reliable are the third-party vendors that capture prescriptions. This is a specialty pharmacy situation. So it's not always reliable, but we see some increases in scripts through those third-party channels. Can we use that kind of to triangulate and trying to predict sales?

No. We advise against it. We've been advising against it because we believe that the Symphony, IQVIA data is inaccurate, and we would recommend against that. We block our data. We have several different specialty pharmacies, not just one, so several. And the data is unreliable. So we've been advising against using that data. But I want to emphasize that we're pleased with the momentum that we've created for the launch to date.