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

Good morning, everyone, and thanks for joining us at the Morgan Stanley Global Healthcare Conference. I'm Mike Ulz, one of the biotech analysts, and it's my pleasure to introduce Brett Monia, CEO of Ionis Pharmaceuticals. Just a reminder, the format for today is a fireside chat. But before we start, I just need to read a quick disclosure for important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I'll hand it over to Brett. Thanks for joining us. And maybe you can start with a couple of introductory comments.

Thanks, Mike. Good morning, everybody. It's great to be here, Mike. Thanks for the invite. So as expected and not surprising with the pipeline is deep and rich as ours, we were expecting a highly eventful year for Ionis, and that's exactly where we are with a lot more to come in the remaining months of the year. We're on track this year to push 3 breakthrough medicines across the finish line through the FDA, 3 drug approvals. We already have 2 severe hypertriglyceridemia, breakthrough medicine Tryngolza, was approved few days early in June. And just last week, we had the approval of our first wholly owned neurology medicine Zanvastro for Alexander's disease, the first disease modifying treatment ever ever approved by the FDA. And we're expecting a third FDA approval in October with our partner, GSK, for chronic HBV, a real breakthrough that's actually producing unprecedented functional functional cures in this patient population. We've also had expanding our Phase III pipeline. We initiated we completed enrollment in our Phase III Angelman's trial, which is on track for data in the second half of this year. And we're pleased to see new Phase III starts from our partners, [indiscernible], the first follow-on to SPINRAZA for SMA that is on track for -- to produce a medicine with deeper -- even deeper efficacy than SPINRAZA, based on biomarker data with once per year administration and then Sapablursen started Phase III development with our partner, Ono this year, with a profile that has the potential to be best-in-class for polycythemia vera. Mid-stage pipeline continues to produce as well. We are thrilled with the first ever proof of concept for our tau program with Biogen, Diranersen, which showed unprecedented improvements in cognition, and other functional benefits as well. And then our follow-on to Tryngolza proof-of-concept as a once a year or twice a year administration as a follow-on to Tryngolza, ION775 in severe hypertriglyceridemia, which is in Phase II development. With the pipeline as deep and with so many events happening, there's always disappointments. We are disappointed with the negative outcome of the cardio transform study for Eplontersen and TTR cardiomyopathy. Despite the fact that we had remarkable reductions in TTR that were as good as anything that's out there today, approximately 80% reduction with good safety and tolerability, but didn't hit the composite primary end point that was a key focus at ESC a couple of weeks ago where the conclusions were clear. The reason why we didn't hit the primary end point was because there was no added benefit on top of a stabilizer. However, the monotherapy group that is patients that weren't on stabilizer at baseline were a hazard ratio that's as good as anything that's out there in TTR cardiomyopathy, a hazard ratio of approximately 30% reduction. And we're working on potential next steps there. And then last week, we were also disappointed with the outcome of the pelacarsen Phase III trial and Lp(a) cardiomyopathy and we're looking forward to our partner Novartis presenting the full data set there. But on top of those disappointments, we have a really, really pipeline, and we're really proud of all the successes we've had and the launches that are in progress, which are going quite well.

Great. Thanks for that introduction. And a lot going on and a lot to cover here. So maybe we'll start just with the SHTG launch. I think the 2 months in now, still very early here, but maybe just talk about what you're seeing there in terms of trends and how that's all progressing?

We're pleased to have delivered the first real breakthrough for severe hypertriglyceridemia with an incredibly strong positive clean label, unprecedented reductions in acute pancreatitis, the -- this is the outcome that patients are most fearful of, that physicians are most fearful of a potentially fatal acute pancreatitis attack. There has been no meaningful treatments for severe hypertriglyceridemia before Tenda emerged and was approved by the FDA. As a reminder to everybody, this is a label expansion, our first indication was familial chylomicronemia syndrome, FCS, a rare population of about 3,000 people in the United States. That launch was going exceptionally well right up to the label expansion right up to the approval for severe hypertriglyceridemia. And then we expanded the label, adjusted the price from a rare disease price to a price that's more suitable for a highly prevalent disease, prevalence of more than 3 million people in the United States. So this has the -- this is positioned to be a blockbuster. And we're on track to achieve our goal of $3 billion-plus pre-peak product sales in the United States. The launch is going well. We're liking what we're seeing on all aspects of the launch to date, the metrics that we're assessing. First of all, we're thrilled with the excitement by the HCP community. I'm sure you've done your research, you've talked to your docs, they're all saying how excited they are about Tryngolza and their enthusiasm to want to treat and write scripts and get their patients on this drug, particularly those patients that are at high risk for acute hepatitis. The launch is going well. We're excited about the enthusiasm. We're excited about the scripts that are coming in. July and August were very good months. And we're excited about what we're seeing from the payer community, the coverage that we're getting for for Tryngolza. Although, of course, at this stage of the launch, most coverage is going through a medical exception process with prior authorizations. But we are getting policies in place. And based on those policies as well as all the other conversations we're having with payers, we're getting coverage to label, right, not just the high-risk patient population, but the label that is anyone that is -- has triglycerides above 500. We have prior -- we expected the patients that were going to be prioritized in this study would be those high-risk patients by physicians, endocrinologists, cardiologists, lipid specialists and that's what we're seeing. These are the patients that have triglycerides through the roof, about 880 milligrams per deciliter, a high risk for acute pancreatitis attack with debilitating effects on the pancreas. Of course, long term, and those that have had a history of acute pancreatitis, about 700,000, 800,000, 900,000 patients that are high risk. Those are the ones that are -- we're seeing the scripts written for first, not surprisingly, could also tell you though, we are seeing some scripts coming in that are in the non-high risk category. Patients that are in the 500 to 800 range without a history of acute pancreatitis. So that's getting out there, too. But the priority for us and the priority with HCPs is the high-risk patient population. I could also say that we're excited -- or we're really pleased how well the dosing is resonating with the HCP community. We are the only medicine that offers dosing flexibility of 50 milligrams or 80 milligrams per month. So administered using a simple auto injector. That dosing flexibility, as I said, has resonated really well. And we're seeing scripts come in with the 50-milligram dose and physicians are looking at the response to 50 milligrams. And seen if their patients are at goal, that is below 500 milligrams per deciliter, they're fine. We're also seeing scripts coming at 80 milligrams right out of the gate. Remember, the 80-milligram dose is what's approved in FCS. We have a lot of docs that are managing FCS patients and are really pleased with the performance of Trengolza in FCS, and they're saying, why start at 50 milligrams, in my SHTG patients, just roll it right through. and bring on the -- and get those patients to the MAX dose. We're also pleased that how the response by the community, the physicians and the patients that -- because we require no monitoring in the study. It's a simple administration, really no significant step edits. Your patients will need to be on a triglyceride drug, like a fibrate or fish oil or something like that before going out to Tryngolza. But all these high-risk patients are already on these drugs, right? There are still not at goal. So it's not really a step edit. It's just getting those patients identified and bringing them on to Tryngolza. So this is a new category. We're developing a new category. We're going to build this market. It's going to take a little bit of time, but we're pleased with the way the enthusiasm for the drug. -- and we're pleased with everything we're seeing with the launch today. We're looking forward to providing a more detailed update at our -- our Q3 earnings in a few weeks.

Great. Sounds like things are on track there. But maybe you could talk about keys to driving the continued success of the launch kind of near term and then longer term.

The keys are disease awareness and drug awareness, making the physicians aware of the remarkable profile that Tryngolza offers efficacy, convenience, tolerability and the dosing flexibility that I highlighted with no monitoring in the study or for the drug. That has resonated really well. Launching off of FCS. Well, the FCS -- all the docs that manage FCS patients who also manage SHTG patients. And that experience has been so positive that we've really been able to build off of that leverage. -- focusing in addition to physician HCP awareness and education is patient awareness, now your triglycerides, get them measured. Omnichannel, direct-to-consumer dissemination of information, the risks of high triglycerides. So we're going from the top pushing down, we've gone through the bottom, pushing up patients and as I mentioned already, focusing on payer coverage and ensuring that we have a strong HCP and patient support program. We are emphasizing and prioritizing, making the scripts that docs want to write bringing that all the way through the process in the most seamless, easiest way possible. It's really important to us. And our patient support program is a top priority, and it went -- it served us very well in FCS and off to a good start in SHTG, and we think it will serve us very well in the SHTG launch today. I want to emphasize we remain very confident our peak product sales of $3 billion plus in the U.S. It's going to take a little time to get there, but we're confident we're going to get there, and we're really looking forward to a big, big 2027.

Great. I also wanted to just ask your view on sort of these third-party scripts a lot of people are taking a look at them. What's your sort of sense there?

Yes. We don't believe that like the Symphony scripts and IQVIA are a good measuring stick for what's happening in the launch. We -- like most companies do, we block our data. And we have several specialty pharmacies now that we're utilizing, not just one that we use for FCS. So you really can't compare the FCS data with the SHTG data and extrapolate. It's dangerous. It's unreliable. We really caution against that. Instead, I'd point you to the color we're looking forward to providing at our end of Q3 earnings and then next year at our end of our full year earnings, I think, in February of next year. So we're very cautious of that. We don't believe the data is reliable.

Yes. Understood. Can you maybe talk about the reaction to the safety profile of Tryngolza that you're seeing? And I guess, liver fat has been one area. Is that an issue, not an issue? What are you hearing?

We're hearing everything is positive about the safety profile for Tryngolza. Again, I said it twice now, I'll say it again, there's no monitoring for anything, LFTs. We have a very clean profile. Liver enzymes are clean. Everything is clean. We're really pleased with the adherence. Patients are getting on to drug. They're seeing their triglycerides plummet, get to normal and in most cases, in many cases, and the adherence is excellent. he HCPs are enthused about it. Liver fat is small. It's on target, and it wanes with continued treatment while triglycerides are being maintained and highly controlled and AP is being -- continued to be controlled. It's an on-target effect. We know how APOC3 works by inhibiting APOC3 , we're substantially and very rapidly lowering triglycerides in these patients. And one of the pathways that were lowering triglycerides through the liver and the clearance. We see a small increase in liver fat. It's not even statistically significant at 50 in many patients, most patients get to goal at 50 milligrams. And at 80, we saw a slight increase that was statistically significant at the end of the Phase III study. But then with continued dosing, it wanes and comes back to baseline. The liver is adapting to this. We have a competitor program that there's a competitor that is following us. They're behind us by almost about a year or so. We expect to come out on SHTG and get approval. Although they didn't evaluate nearly the number of patients that we did, we evaluated because we really wanted to flesh out the full profile, like what do we need to know for Tryngolza. We evaluated 250 patients by MRI. They evaluated a few dozen. But even with a few dozen at ESC, it was clear that you saw a numerical increase in hepatic fat. So it's an on-target effect. It's completely manageable. Most importantly, by the HCP community, it's a nonissue. It really never was an issue. And now the fact that it's coming -- they see it come back down to baseline with continued treatment, it's even less of an issue.

Yes. Makes sense. You mentioned the competitor. I don't know if you can maybe talk a little bit more about key points of differentiation. And since they might get to the market next year, kind of what impact could that have on your sort of launch?

SP1 Yes. So we're first to market by about a year, like I said. And we actually believe that having 2 players like a duopoly is very few in this massive market opportunity. More than 3 million people that are inadequately -- are not adequately being addressed with current treatment. We actually think that that's going to provide an opportunity to grow the market, share of voice, better disease awareness by having 2 players actually expand the market with all of that. But we're going to take advantage of of first-to-market strategy. Our strategy is to build those contracts with payers, build first mover advantage to get to those high-risk patients first, bring them on to Tryngolza, we are confident once they come on to Tryngolza, they're going to be really pleased with the experience that they have, the ACPs as well as the patients. As far as differentiation, the 2 drugs look very similar. Efficacy, very, very highly efficacious AP reductions. We think that we like our data a lot. We are looking forward to more details of our competitors' data. We saw what was presented at ESC, but we really don't want to see the publication. It's really important to really get into the details and that kind of thing. So it's hard to say. But overall, there's no surprises, the 2 drugs should work similarly. We're getting identical reductions of target APOC3, they should translate to similar efficacy. And we welcome 2 players in this in this really large market opportunity.

Yes. Makes sense. Also in your prepared remarks, you mentioned 775, your sort of next-gen program. Maybe talk a little bit more about that, in terms of the data you've seen and time lines and path forward.