Ionis Pharmaceuticals - Q2 2023

Transcript

Operator (participant)

Good morning, welcome to Ionis's Second Quarter 2023 Financial Results Conference Call. 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 off the call. Please begin.

Wade Walke (SVP of Investor Relations)

Thank you, MJ. Before we begin, I encourage everyone to go to the investors section of the Ionis website to view the press release and related financial tables we will be discussing today, including the reconciliation of GAAP to non-GAAP financials. We believe non-GAAP financial results better represent the economics of our business and how we manage our business. We have also posted slides on our website that accompany today's call. With me on the call this morning are Brett Monia, our Chief Executive Officer, Richard Geary, Chief Development Officer, and Beth Hougen, our Chief Financial Officer. Eric Swayze, Executive Vice President of Research, Eugene Schneider, Chief Clinical Development Officer, and Onaiza Cadoret-Manier, Chief Global Product Strategy and Operations Officer, will also join us for the Q&A portion of the call. I'd like to draw your attention to slide three, which contains our forward-looking statement.

During this call, we will be making forward-looking language statements that are based on our current expectations and beliefs. These 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 that, I'll turn the call over to Brett.

Brett Monia (CEO)

Thanks, Wade. Good morning, everybody, and thanks for joining us today. We achieved a great deal in the first half of 2023 as we continued to focus on our most important strategic priorities. We advanced our pipeline in many important ways. We made great progress in building our commercial capabilities. We are writing the next chapter for Ionis as we transform Ionis into a highly successful, fully integrated biopharma, focusing on delivering an abundance of new medicines to patients. Launch preparations for our three near-term commercial opportunities, Eplontersen, Olezarsen, and Donidalorsen, are right on track. Eplontersen is currently under regulatory review for ATTR polyneuropathy in the U.S., and we're on track to submit additional filings outside the U.S. before the end of the year. We and AstraZeneca share the goal of bringing eplontersen to ATTR patients globally, who today have limited treatment options.

We are also pleased with the longer-term week 85 data for eplontersen from the phase III NEURO-TTRansform study that we reported last month. These longer-term data showed continued improvements from baseline out to 19 months, highlighting eplontersen's durable efficacy and contributing further to its overall attractive profile. In a few minutes, Richard will dive deeper into the importance of these data. Just last week, we reported that our landmark CARDIO-TTRansform study of eplontersen in patients with ATTR cardiomyopathy completed full enrollment with more than 1,400 patients. This is the largest study ever conducted in this patient population. Our next major late-stage milestone is the top-line readout of the olezarsen phase III Balance study in FCS in the second half of this year. We expect olezarsen in FCS to be the first independent commercial launch for Ionis, we're well-prepared.

In parallel, we're advancing our olezarsen phase III pivotal studies in the much larger patient population, severe hypertriglyceridemia, or sHTG, which we're also well-prepared for. We also completed enrollment in the phase III OASIS-HAE study of donidalorsen earlier this year. This important milestone keeps us on track for data in the first half of next year. We continue to be encouraged by the efficacy data donidalorsen has generated to date. We recently announced two-year open label extension data that showed consistent and sustained protection against HAE attacks, in line with what we previously reported from our randomized phase II study and our open label extension study at one year. I also want to highlight the continued success we've achieved developing medicines for patients with neurological diseases. Spinraza continues to be the global market leader for the treatment of all types of SMA.

Just recently, Spinraza's proven strong efficacy was reinforced further with highly encouraging new data from the ongoing RESPOND study in SMA patients who had a suboptimal response to gene therapy. With the recent approval of QALSODY in the U.S., we now have two breakthrough commercial medicines on the market to treat two severe neurodegenerative diseases. The FDA's accelerated approval of QALSODY brings hope and a breakthrough treatment to people with SOD1-ALS and their families. QALSODY's approval further validates our capabilities to treat intractable neurological diseases. Today, we have 12 medicines in clinical development for neurological diseases, including treatments for other forms of ALS, dementias, neurodevelopmental diseases, and much more. Our industry-leading neurology research team is also making remarkable achievements to further advance our leadership in neuro, neurology therapeutics.

With a track record of driving innovation, we are focused and making great progress in advancing new cutting-edge medicines into development to address severe neurological diseases for patients in need. Additionally, for the second quarter in a row, our robust late-stage phase III pipeline has expanded. Roche recently initiated phase III development of IONIS-FB-LRx in IgA nephropathy, increasing our late-stage phase III pipeline to eight drugs being developed for 10 separate indications.... Our robust late-stage pipeline sets us up for a steady cadence of phase III data readouts over the next few years, positioning Ionis to deliver many new, important transformational products to the market for years to come.

Just last week, we were pleased to announce our expanded collaboration with Novartis, demonstrating their confidence in Ionis' capabilities to create a next-generation compound targeting Lp as a potential follow-on to Pelacarsen, utilizing our latest cutting-edge technologies. As a reminder, Pelacarsen is in an ongoing phase III cardiovascular outcome study called Lp HORIZON, which is fully enrolled with more than 8,000 patients. The HORIZON study is progressing well, with data and a potential filing plan for 2025. We also recently expanded our cardiovascular franchise when we advanced our first cardiac muscle drug into preclinical development. This muscle-targeting drug is our first to enter development utilizing our in-licensed bicycle technology. This achievement further highlights the potential for us to expand our drug discovery capabilities for cardiovascular and neuromuscular diseases.

Importantly, we remain on track to accomplish our other key strategic goals across the business, including achieving our 2023 financial guidance. With that, I'll turn the call over to Richard to discuss our recent pipeline progress and preview upcoming key events. Next, Beth will review our second quarter and first half financial results, and then I'll wrap things up before taking your questions. Richard?

Richard Geary (Chief Development Officer)

Thank you, Brett. Well, as Brett just mentioned, we've made important pipeline progress in the first half of this year, bringing us even closer to our goal to deliver an abundance of new medicines to patients and to the market. We believe that the positive data we have reported to date from the NEURO-TTRansform study demonstrate eplontersen's potential to provide substantial benefit for patients with ATTR polyneuropathy. The recent 85-week data further strengthened our confidence in eplontersen's competitive profile. Through 85 weeks, eplontersen continued to demonstrate a sustained and substantial reduction in serum TTR concentration case compared to baseline. As you can see from both the mNIS+7 and NORFO quality of life graphs, the changes from baseline through 85 weeks of treatment are very encouraging.

Importantly, a substantial number of patients treated with eplontersen continued to demonstrate improvement in neuropathy impairment and quality of life through the 85 weeks of treatment. These data further add to the totality of data supporting eplontersen's differentiated profile. We plan to report the full dataset at a medical conference later this year. Eplontersen is currently under review in the U.S., with additional filings outside the U.S., including the EU, planned for the end of this year. We and AstraZeneca recently expanded our agreement to include Latin America, further underscoring our and AstraZeneca's commitment to bringing eplontersen to patients around the world. Positive efficacy and safety results we've seen from NEURO-TTRansform study also support our confidence in eplontersen for ATTR cardiomyopathy. Notably, we recently completed enrollment in our phase III CARDIO-TTRansform study.

With more than 1,400 patients, this is the largest study ever conducted in this indication. We designed the study to demonstrate benefit on cardiovascular outcomes in a broad set of patients. Now that enrollment is complete in CARDIO-TTRansform, we expect to report data as early in the first half of 2025. As with most outcome trials, our timelines are based on a variety of factors, including event rates and the evolving clinical landscape. Following eplontersen, olezarsen is the next drug we expect to bring to the market and is the first we will commercialize ourselves. We are developing olezarsen for two indications, FCS and sHTG.

While FCS is a rare indication and sHTG represents a much broader population, both indications are characterized by severely elevated triglycerides, which can lead to fatal pancreatitis and atherosclerosis, and both are poorly managed by the current standard of care. We remain on track to report data from the phase III Balance FCS study in the second half of this year. Our development program to support the broader sHTG indication is also progressing well. With over 3 million patients in the U.S. with severe hypertriglyceridemia and first mover advantage, we believe olezarsen represents a blockbuster opportunity for Ionis. Following closely behind olezarsen is our next whole-owned medicine, donidalorsen, to treat patients with hereditary angioedema. We recently completed enrollment in the phase III OASIS-HAE study for donidalorsen, keeping us on track for data in the first half of next year.

In June, we reported top-line two-year results from the phase II open label extension study of donidalorsen, showing an overall sustained mean reduction in HAE attack rates of 96% from baseline through two years across dosing groups. We plan to present these data at a medical conference later this year. Based on the totality of the data generated to date, donidalorsen continues to demonstrate sustained protection in preventing potentially fatal HAE attacks. As a result, we are confident in donidalorsen's competitive profile, providing us with a meaningful commercial opportunity. Our industry-leading neurology franchise continues to deliver groundbreaking medicines. In April, the FDA approved QALSODY for patients with SOD1-ALS, making it the first approved treatment to target the genetic cause of ALS. In addition, we have 12 medicines in clinical development to treat neurological diseases, including two in phase III studies and eight in phase II.

One of our highest priorities is to expand our wholly-owned franchises in neurology and cardiology. We currently have several wholly-owned medicines that are moving quickly to the clinic. Our world-class neurology research team is working to turn great science into great medicines that we plan to develop and commercialize ourselves. As a result, we expect a steady cadence of new clinical study starts over the next several years, ensuring our neurology franchise continues to lead in innovation and positioning us to deliver a growing number of new medicines to patients and the market for years to come. Now, I would like to briefly touch on the recent positive interim results from the RESPOND study of Spinraza. RESPOND is an ongoing two-year phase IV open label study evaluating Spinraza in SMA infants and toddlers with suboptimal response to gene therapy.

Results from the interim analysis showed that most patients improved in measures of motor function with Spinraza treatment. Spinraza also continued to demonstrate a favorable safety profile on these patients previously treated with gene therapy. These data add to the extensive body of evidence demonstrating Spinraza's benefit for SMA patients, and that includes treating more than 14,000 patients with a well-established safety profile based on data in patients treated up to eight years. In addition to RESPOND, Biogen is conducting the ASCEND and DEVOTE studies that together aim to address remaining unmet need and inform treatment decisions for the SMA community. Our late-stage pipeline expanded for the second consecutive quarter with the start of a pivotal program for IONIS-FB-LRx in patients with IgA nephropathy. We now have eight drugs in late-stage development, advancing in a total of 10 separate indications.

GSK recently presented new data for bepirovirsen in chronic HBV patients. Our other medicine that started a robust phase III development program earlier this year. The data presented at EASL showed that bepirovirsen treatment resulted in a durable response in responders from the B-Clear phase II-B study. GSK plans to present new data later this year from the B-Together study, which is evaluating bepirovirsen in combination with pegylated interferon. In totality, we have had an eventful first half with many important positive data events and clinical advancements. In the second half of this year, we remain on track for a number of key additional events, including U.S. eplontersen approval and regulatory filings outside the U.S., as well as phase III data for olezarsen and FCS, our next potential medicine to launch after eplontersen.

We will keep you updated on our progress on these events and more throughout the rest of the year. With that, I'll turn the call over to Beth.

Beth Hougen (EVP and CFO)

Thank you, Richard. In the second quarter, we continued to make progress on our goal to further strengthen our financial foundation in support of our strategic priorities. Our financial results for the second quarter reflect our ability to generate meaningful revenue to fund investments in key growth opportunities across our business. We earned revenues of $188 million and $319 million for the second quarter and first half of this year, respectively. Our revenues increased 40% for the quarter and 16% year to date over the same periods last year, driven by significant partner payments. As anticipated, our operating expenses and operating loss for the second quarter and first half of this year increased over the same periods last year as we advanced our commercial readiness activities and our pipeline, especially our late-stage programs.

We remain well capitalized with $2.4 billion in cash and investments at the end of June, enabling us to continue deploying our financial resources to bring transformational medicines to the market. In the second quarter, we opportunistically refinanced our 2024 convertible notes and were able to accomplish all our objectives. We retained our cash to continue making key value-driving investments in our pipeline. We extended the maturity of our 2024 notes to 2028, while maintaining a low coupon. Importantly, we retained the flexibility to repay the new notes with cash, equity, or a combination of the two, enabling us to mitigate potential equity dilution.

We retired approximately 80% of the 2024 convertible notes, and as a result, our cash balance at the end of June included approximately $115 million we have earmarked to address the remaining 2024 notes. Spinraza's global sales were $437 million for the second quarter and $880 million year-to-date. We earned $61 million and $111 million in royalty revenue for the corresponding period. Spinraza's global sales were essentially flat compared to the same periods last year, reflecting Spinraza's resilience against emerging competition in the U.S. and abroad. By working to expand existing markets while also generating important efficacy data from Spinraza's robust lifecycle management program, Biogen is making good progress on their goal of returning Spinraza to consistent growth.

We earned R&D revenue of $110 million in the second quarter, and $173 million year-to-date, both of which increased substantially compared to the same periods last year. Our significant R&D revenue reflects the value Ionis' technology is creating as numerous partnered programs advance. Notable payments earned in the second quarter included $40 million from AstraZeneca for eplontersen, which included development cost-sharing payments and the $20 million license fee for Latin America rights, $20 million also from AstraZeneca for advancing ION 839 into a phase II-B study for NASH, and a $16 million milestone payment from Biogen for QALSODY U.S. approval. As planned and aligned with our goal to invest for revenue growth, our non-GAAP operating expenses increased in the second quarter and year-to-date compared to last year.

As most of our ongoing phase III studies are either fully enrolled or approaching full enrollment, as you would expect, our clinical study costs increased, which resulted in higher R&D expenses. Additionally, as we prepare to launch eplontersen, olezarsen, and donidalorsen, our SG&A expenses also increased modestly year-over-year. Our results for the first half of this year keep us on track to meet our 2023 financial guidance, including our P&L and cash guidance. Looking ahead, with many partnered programs advancing, we continue to have numerous opportunities to earn additional R&D revenue. We anticipate revenue in the second half will be weighted toward the back end of the year. For example, we are eligible to earn a $50 million milestone payment for the U.S. approval of eplontersen, and we expect to recognize additional amortization revenue from our recently expanded collaboration with Novartis.

We project operating expenses to continue to gradually increase over the course of this year. Consistent with our guidance, which includes expenses related to our capital-intensive phase III studies, we estimate our full-year R&D expenses will increase between 20% and 25% year-over-year, excluding the Metagenomi upfront payment from last year. We also continue to project our full-year SG&A expenses to increase approximately $35 million year-over-year as we prepare to bring eplontersen, olezarsen, and donidalorsen to the market. For example, as we move closer to launching eplontersen, assuming an approval in late December, our SG&A expenses will include our share of the cost to build out the eplontersen sales force, as well as additional launch readiness expenses. Over the next few years, we are poised to launch several medicines. As a result, we are in a period of investment.

We project our operating expenses to grow modestly, importantly, by keeping more programs for ourselves, we are positioned to deliver significant revenue growth. Additionally, we continue to expect our substantial base of R&D revenues to contribute meaningfully to our overall revenue as our partners continue to advance numerous programs. With 3 near-term commercial opportunities that have a combined $multibillion peak sales potential and a steady cadence of medicines poised to follow closely behind, we are well positioned to drive substantial revenue growth and long-term value for shareholders. With that, I'll turn the call back over to Brett.

Brett Monia (CEO)

Thanks, Beth. Looking forward to the rest of this year, we're laser-focused on advancing our key priorities with additional important regulatory and late-stage pipeline events planned for the second half. We're well on our way to achieving our goal of delivering an abundance of new medicines to patients. We now have two breakthrough medicines to treat devastating neurological diseases on the market. With a December PDUFA date, we could also add eplontersen to our commercial portfolio late this year. We're on track with our go-to-market activities for each of our near-term commercial opportunities. Our first planned launch of eplontersen with AstraZeneca in patients with ATTR polyneuropathy is quickly approaching, with our independent launches for olezarsen and donidalorsen following closely behind. With our rich late-stage pipeline, we're well positioned to bring additional medicines to patients for many years to come.

We also continue to make innovative technological advancements to enhance our leadership position in RNA therapeutics, positioning us to add to our steady cadence of new transformational medicines well into the future. Our strong financial foundation enables us to invest in the areas with the greatest potential to drive increasing value. Look forward to sharing our progress as we advance our priorities. With that, we'll now open it up for questions. Operator?

Operator (participant)

Thank you. We will now begin the question-and-answer session. To ask a question, you may press Star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw from the question queue, please press Star, then 2.

At this time, we will pause momentarily to assemble our roster. Today's first question comes from Myles Minter with William Blair. Please go ahead.

Myles Minter (Research Analyst)

Hey, thanks for taking the questions. Congrats on the quarter. First one's on olezarsen. I know that your stance in the severe hypertriglyceridemia trials is that you wouldn't need to conduct an outcome study or are not looking to. There's been some language put out there from one of the peer companies developing in the space as well, that they would be doing an outcome study. Has that language sort of changed your viewpoint on the need to conduct an outcome study in that population? Thanks.

Brett Monia (CEO)

Thanks, Myles. Absolutely not. We're focused on patients with severely elevated triglycerides. Either genetically caused FCS or severely elevated triglycerides where there's no known genetic cause of disease. These are patients that suffer from severe metabolic diseases, particularly acute pancreatitis, that can evolve to chronic pancreatitis, diabetes, and all kinds of other morbidities. There is also a cardiovascular component to severely elevated triglycerides, but our focus is on getting patients out of harm's way with, in, in the, that have are suffering from severely elevated triglycerides. We've done a lot of research. We're, we're, we're preparing the market, and we're ready. We're preparing for launching olezarsen press, FCS, and sHTG, and I'd like to just maybe ask for Onaiza to expand on, on Myles's question.

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Sure. Hi, Myles Minter. Yeah, as, as we've spoken before, we see a great unmet need for severely elevated triglycerides in the marketplace, over 500. This is a market where we have, you know, over 3.5 million patients. The standard of care is just not sufficient to actually meet the goals that these patients are required to meet per the medical guidelines, which is to get them below 500 or as close to 500 as possible, to get them out of harm's way for the risks that Brett Monia just highlighted, particularly acute pancreatitis risk. We have, we're really looking forward to getting the drug on market for that, both for the rare disease, genetically defined as FCS.

We expect to see the Balance data by the end of the year and then looking forward to launching into that and then, and ultimately into the severe hypertriglyceridemia space.

Myles Minter (Research Analyst)

Okay, cool. Second question is just on the week 85 data for eplontersen in polyneuropathy. I do also understand that there was some vitamin A deficiency-related ocular events that were discovered in, in that trial. you know, obviously known with TTR reduction, that you get vit A deficiency, and you can supplement that. My question is, have you submitted that data to the FDA just for safety purposes only? I, I don't think you've submitted it with the efficacy data, but will they see that safety data? Thanks.

Brett Monia (CEO)

Eugene?

Eugene Schneider (EVP and Chief Clinical Development and Operations Officer)

Yeah, thanks for your question, Myles. We submitted all of the comprehensive safety information, including the information that was routine with the Day 120 update, as part of the NDA. All of the safety data that was available at the time, as well as the updates related to the Day 120 update, were submitted to the FDA and are under review.

Brett Monia (CEO)

Everything is on track, right, Richard?

Richard Geary (Chief Development Officer)

Everything's on track. Absolutely.

Myles Minter (Research Analyst)

Beautiful. Thanks for the questions.

Operator (participant)

The next question comes from Debjit Chattopadhyay with Guggenheim Securities. Please go ahead.

Speaker 18

Hi, team. This is Robert on for Debjit. Thanks for taking our question. Does Ionis and AZN plan to compete against siRNA options in the ATTR-PN market? Does AZN's presence potentially allow eplontersen to be first approval in any significant global markets? Thank you.

Brett Monia (CEO)

Thanks, Robert. Nazia, would you take that?

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Yep. Yeah, sure, Robert. We're very excited with the data that we're seeing. The week 85 data was very encouraging. You know, we saw duration of effect, sustained TTR suppression, for TTR, and then obviously halting disease progression and seeing improvement in a substantial number of patients on both mNIS+7 and NRF quality of life. We've got a really great efficacy data package. We have, from all of the research we've done, the more preferred administration profile, which is self-administration at home, allows patients to be empowered in taking control of their disease and taking the medication wherever they are with them, and not relying on going into the HCP's office. The efficacy, combined with this self-administration profile, gives us a really strong way to enter the marketplace.

As I've said before, this is a market, where we still have 40,000 patients, and less than 20% of those patients have been either identified, diagnosed, and treated for polyneuropathy, including mixed phenotype. Our ability to get to, where these patients are, identify them, and get to the offices outside of the centers of excellence where they're presenting, is gonna be really important, and those are some of the strategies we're working on with AstraZeneca.

As to your question of whether we will be first in many global markets, yes, that is, that is the goal. We are planning to file in different markets outside of the US in the second half of the year, particularly Europe. As you know, we're also looking at expanding into markets such as Eastern Europe, Russia, China, Japan. Again, these are places where AstraZeneca's global scale will bring the ability to really penetrate and get these patients in care where there's needed.

Brett Monia (CEO)

As you know, Robert, we're very pleased that AstraZeneca also, you know, enthusiastically licensed Latin, Latin America rights, too, for eplontersen for, of course, for all indications, neuropathy as well as cardiomyopathy. It demonstrates their, their enthusiasm for eplontersen, our partnership, and their enthusiasm for the data that has been generated to date.

Speaker 18

Thanks, team.

Operator (participant)

The next question comes from Kostas Biliouris with BMO. Please go ahead.

Kostas Biliouris (Director of Biotech Equity Analyst)

Thanks for taking our question. One on pelacarsen, follow-on molecule that you recently announced. Can you discuss the potential technologies that you could leverage there to improve the efficacy and the dosing frequency of the first generation molecule? Approximately how many years did you expect this follow-on molecule to enter the clinic after to enter the, the market, sorry, after pelacarsen? Thank you.

Brett Monia (CEO)

Sure, Kostas. thanks. Very excited that Novartis came to us with a proposal to work on with them a follow-on strategy, follow-on program for pelacarsen. Let me just say right from the outset that pelacarsen, the pelacarsen phase III program is going well, very well, on track, and is on track for data readout and potential filing in 2025. The, the fact that Novartis came to us really demonstrates their enthusiasm, their added enthusiasm, for this Lp(a), this opportunity for Lp(a) cardiovascular disease. They expect to be assuming approval for pelacarsen, the first to the market, and to, and to have a substantial global reach. The follow-on program is to extend that reach. The, the purpose is to reach more and more patients with a follow-on program.

I, Novartis recognizes our expanded and vast capabilities in RNA-targeted therapeutics. We're bringing our full arsenal to the table. They appreciate that, and that's why they partnered with us on this. That includes all the great work that our research organization has been doing over the last few years in expanding our medicinal chemistry capabilities, including MsPA backbone that we've talked a lot about in the past, and other chemistries, as well as our rapidly emerging capabilities in RNAi technology and combinations of both. We can utilize chemistries that we utilize in ASO technology as well as for RNAi platforms. It's tough to beat the efficacy that pelacarsen has demonstrated in phase II, Kostas.

I mean, with 98%, 99% of patients, with CVD due to high LpL, we were able to get their LpL levels down below the threshold associated with CVD. Really, you know, we wanna, we wanna maintain that efficacy. We wanna, we wanna reproduce that efficacy in a potential follow-on molecule, but what we're really focused on is less frequent dosing. We're very confident in our ability to deliver a molecule with semiannual dosing, maybe annual dosing, utilizing a mixture of our, of our technology capabilities, and that is, that is the focus with Novartis. We're gonna be working hand in hand with them to bring, bring the best molecules forward to follow on, as follow-on to pelacarsen.

Operator (participant)

The next question comes from Michael Ulz. Please go ahead.

Brett Monia (CEO)

Sorry, Kostas, did you have another one?

Kostas Biliouris (Director of Biotech Equity Analyst)

Sorry, I... No, I was going to ask, approximately how many years behind is the follow-on molecule compared to pelacarsen?

Brett Monia (CEO)

Yeah. We haven't, we haven't stated, discussed that publicly, Kostas, on what the timelines are. Obviously, the molecule, we're still in research phase, so it'd be a little risky to actually speculate on that right now.

Kostas Biliouris (Director of Biotech Equity Analyst)

Very helpful. Thank you.

Operator (participant)

The next question comes from Michael Ulz with Morgan Stanley. Please go ahead.

Michael Ulz (Executive Director of Biotechnology Equity Research)

Hey, guys. Thanks for taking the question. just on eplontersen and cardiomyopathy, maybe you can comment on the recent Bridge data and sort of how that impacts your thinking in terms of the Cardio Transform study. Then maybe second, secondly to that, you know, is there potential for you to maybe stop the study earlier, or is the thinking still to go through sort of, you know, the full results there? Thanks.

Brett Monia (CEO)

Sure, Mike. BridgeBio data, obviously good for patients to have another potential option for TTR cardiomyopathy. To state the obvious, we need a lot more data. We need to see more data. We're looking forward to seeing more detailed data, you know, I think they're planning to present later this year. The demographics of the study supports our trial design. It further reinforces our trial design, gives us even greater confidence in our expanded trial design, in which we're going to have, we have now, as we have completed enrollment, a very good balance between tafamidis... patients who have one person on top of tafamidis as well as naive patients. It supports that.

you know, single mortality, mort- overall mortality is very important in this, in this population, and maybe I'll ask Onaiza to just really expand as on, on the importance of this from a physician standpoint, from a payer perspective.

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Yeah. As you know, in, in, eplontersen, Michael, that, you know, we love the breadth of our trial. We believe we're gonna it's a landmark trial. It's gonna generate the, the significant amount of data to really go in and arm, arm the physicians with the data that they need to actually treat these patients. This means anything from NYHA Class I through III, so mild to severe, hereditary and wild type, naive to silencer therapy, naive to cardiomyopathy therapies and TTR, as well as on top of standard of care tafamidis as well. We really love our endpoints. We have done a fair amount of work in recent times to really understand the, the difference in terms of how physicians view all-cause mortality versus cardiovascular death.

That is actually a more meaningful cardiovascular endpoint, along with the richness of cardiovascular hospitalizations, and then some of our secondary endpoints, obviously, in six-minute walk and other measures that are gonna be at play. The endpoint's just actually really meaningful. You know, all in all, we are really excited about our data set, our trial design, and, you know, looking forward to seeing the output of that in the coming times.

Brett Monia (CEO)

Yeah. Michael, there's no changes to our plans for when the study will complete, based on any new emerging data that has come out recently. We love our trial design. You know, there are several factors that will impact when we read the study out. The first, of course, was the complete enrollment. We've now achieved that, and we've achieved it very successfully. We have the demographics in the study that we intended to have to actually have the greatest data set when the study reads out. We'll also be looking at changing competitive landscape, new data as it emerges, that could potentially affect the time we read the study out.

We don't think the BridgeBio data will, is gonna impact that, but there may be other data that comes out. thirdly, our blinded event rates will be very important for us to continue to monitor as we decide when, when the study should complete. There's no change currently, there's no change in the timing of when that study, our CardioTransform study is due to read out.

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Let me just address one other question, which was on the payer reimbursement that I missed. Just to make sure that we've done a fair amount of testing with payers on the trial design. You know, again, if we show the cardiovascular risk reduction on top of tafamidis, there is clinical meaningfulness in that for physicians, and they are not going to be kind of standing in the way in terms of reimbursing a combo product here. Again, the data will bear out, and they're very favorable in making sure these patients who are highly at risk, it's a terminal disease, are getting the best medication and care possible.

We're really pleased to see them thinking about the disease and the patients this way and thinking about the landscape of reimbursement as either mono or combo in this space.

Michael Ulz (Executive Director of Biotechnology Equity Research)

Yeah. Thank you.

Operator (participant)

The next question comes from Yanan Zhu with Wells Fargo. Please go ahead.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Hi, thanks for taking our questions. I was wondering if you could share your thoughts on some recent development in Angelman syndrome field, where Roche decided not to move their ASO program into the next stage for clinical development. Wondering if you could share any update from your Angelman syndrome clinical study that is ongoing, and any thoughts around the program or the product candidate's efficacy and safety profile. Also, if you could also talk about your Ataxin-2 program and its ongoing study, that would be great. I think the data are expected around the same time as the Angelman syndrome program. Thanks.

Brett Monia (CEO)

Sure. Happy to, Yanan. Thanks for the question. The Angelman's program, the Ionis Biogen Angelman's program is going very well. We're operationalizing the phase I, II study, and we're continuing to enroll patients in the study. We are, with Biogen, are planning to have data around midyear next year from the Angelman's program. As I said, it's, it's, it's going very well so far. We haven't disclosed our... You know, we, we really don't have any insights into the reasoning behind why Roche ended their study. They obviously have said that it wasn't a safety issue. They said it didn't meet their minimum target product profile or minimum criteria, I assume, on efficacy.

We really don't have and shouldn't dis-- we're, we are, we're not disclosing anything, we may think on this. We're really focused on our program. Expect to read out from that study next year. We may be able to provide an update on, on the status of the program late this year. There's a, you know, we have a standing invitation to an Angelman's meeting called FAST, in which we always have a podium slot, and I'm sure we'll be present this year, too. We're not necessarily expecting data, new data at the meeting, but we haven't decided what we're going to present at that meeting yet. As far as Ataxin-2, this, of course, is another one of our ALS drugs.

This, this drug is particularly exciting because it's targeting a, a sporadic ALS, so no known genetic cause of ALS, study is enrolling. This is a, a study in which we're examining four dose cohorts, with the highest dose cohort having expanded to add more patients, to have the most robust data set to, to, inform on a potential phase III study, if the study is successful. That, as you mentioned, is also due to read out around the same time next year, around mid-year next year. All indications are that it's, that it's going well.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Great. Thanks for all the answers.

Operator (participant)

The next question comes from David Lebowitz with Citi. Please go ahead.

David Lebowitz (Senior Research Analyst of Biotechnology)

Thank you very much for taking my question. Given the HAE data is coming up earlier next year, could you, and assuming the, the phase II data is replicated, could you tell us what your efforts will look like for launching the therapy and, and trying to convince physicians to move to a new modality?

Brett Monia (CEO)

Sure, David. Onaiza?

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Hey, David. Yeah, no, we're very excited about our preparations for donidalorsen launch, and waiting for the phase III data next year. We are thinking about the market in a variety of ways. As you know, this is gonna be pretty much a switch market. We do actually have a switch study that's going alongside our phase IIIs, which will be very informative and give confidence for physicians to switch. Patients, the confidence piece is gonna come from the ability to make sure there are no breakthrough attacks in the process of the switch, and given our rapid onset, we believe we will be able to demonstrate that.

On the patient side, I think you can see the switching behavior already in the marketplace with Orladeyo, kind of, inciting more switches from Takhzyro, which is the standard of care. We see that patients are willing to try new treatments, and they want, they want zero attack rates, and they want more convenience, and we offer both with our profile as well. You know, the team's very active in understanding kind of, what will drive some of the switching behavior and their go-to-market strategies alongside of that.

David Lebowitz (Senior Research Analyst of Biotechnology)

Thank you for that. One additional question. Moving towards a potential eplontersen launch, do you have any thoughts on how market growth has shifted since the subQ was launched by Alnylam, and how that might apply to eplontersen and how you're thinking about the launch going forward?

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Yeah, you know, taking a look at how Amvuttra uptake is going on in the marketplace, I mean, they've got a good start. It's just important to note that, you know, they're working through a lot of Onpattro switches right now, right? We're really trying to understand, you know, how much market growth there is. As I said, this continues to be an underpenetrated marketplace, you know, lots of patients that are still not identified, diagnosed, or treated. I think, you know, Alnylam is doing their job of, you know, getting most of their patients onto their next generation silencer. We have a lot of work to get new patients to just silencer therapy overall in this marketplace. We expect it to grow readily.

This is when you have a couple of players in the marketplace. It's always a good thing for patients. They're looking forward to getting in in January and, and starting, starting the work. As I said earlier, we have a very exciting product profile, efficacy, as well as the self-administration profile, which we believe will, do very well in the market.

David Lebowitz (Senior Research Analyst of Biotechnology)

Thank you very much.

Brett Monia (CEO)

Thank you.

Operator (participant)

The next question comes from Allison Bratzel with Piper Sandler. Please go ahead.

Allison Bratzel (VP and Senior Research Analyst)

Hi, good morning, and thank you for taking the question. Just one for me on the phase II GOLDEN trial in GA. Just curious, is there any update on your view of the geographic atrophy space and potential opportunity for a therapy targeting complement Factor B? You know, just given some of the recent safety and regulatory updates in the GA space in recent weeks, could you just frame what you're looking for in the phase II readout next year to warrant further investment in that space? Thanks.

Brett Monia (CEO)

Thanks, Allison. Yeah, we're, we're, and our partner, Roche, are very enthusiastic about our GA study, our Facto B-LRx geographic atrophy study, GOLDEN. You know, we're pleased that there's a benchmark to get drugs approved for GA. This sets the, this helps set a path forward for all drugs that are being developed for GA, including ours. We, we like our drug, we like our profile. So far, the GOLDEN study is quite a large study, around 300 patients, two dose, dose cohorts, dosing groups, in which patients are gonna be treated for about 15 months. It's a good study, and, and what we're looking for is, is, is the primary change, you know, changes in geographic atrophy area in the study.

You know, it's, it's an efficacy study, a proof of concept study, and, and that study is due to read out next year. We like this, we like the target. Factor B in the alternative pathway, we think is the right target for GA. We think systemic approaches to the complement pathway, particularly Factor B, is the right approach for treating GA. And we think that the overall safety profile and tolerability profile that we're going to have with Factor B-LRx is going to be a very significant advantage versus IVT drugs, which are administered, you know, directly to the eye and have side effects as a consequence to that. We expect Factor B-LRx to have an excellent safety profile, much like the rest of our LICA platform that has eplontersen, pelacarsen, olezarsen, donidalorsen.

you know, that's, that it's in phase II, and we're, we're seeking to achieve, proof of concept for the next year. If the data is strong, or if the data supports, I should say, Roche is preparing, to go to phase III, and they're equally enthusiastic for the program as we are.

Operator (participant)

The next question comes from Paul Matteis with Stifel. Please go ahead.

Paul Matteis (Managing Director and Head of Therapeutics Research Biotechnology)

Thanks so much for taking my question, and congrats on all the progress. I wanted to ask about olezarsen, in light of how much the cardiometabolic space has really changed since you initiated the pivotal program. Just specifically looking back at the phase II baseline characteristics, I think most patients in the study had type 2 diabetes, most patients had comorbid hypertension, you know, BMI was overweight, on average. I guess, how do you think about the impact of this recent Wegovy data and, more broadly, the takeoff of these weight loss drugs on the market for olezarsen? I guess, you know, what % of patients with trigs above 500 would you say demographically wouldn't actually qualify for one of those drugs on label? Thanks so much.

Brett Monia (CEO)

Nathan, you want to take this?

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

Yeah. Hi, Paul. Yes, been on, it's a lot of good data for the GLP-1s recently as well. You know, a couple of important things to note. First of all, they're not going to be indicated, right, for triglyceride lowering. If you looked at some of their TG, just their TG lowering data, it's very much in line with what current standard of care is. They're not getting to the really high levels of TG lowering that APOCIII target can actually deliver here. That's kind of the first thing.

If physicians do use it off-label, it's a very important reminder, and I think most of the endocrinologists know this, that the GLP-1s are, have a warning in their label for not being used in patients with risk or a history of acute pancreatitis. As you know, in the 500 plus severely elevated triglycerides where olezarsen is being studied, we have many, many patients who are at risk for AP. We do think both the both the the magnitude of triglyceride reduction along with the with the risk for these patients who are over 500 for AP, we do not expect that to be a direct or indirect competitor.

Paul Matteis (Managing Director and Head of Therapeutics Research Biotechnology)

Okay. Thanks for the thoughtful reply.

Operator (participant)

The next question comes from Yaron Werber with Cowen. Please go ahead.

Yaron Werber (Managing Director of Senior Biotechnology Analyst)

Great. Thanks for taking my question. Just on Spinraza, the, the response by the, the, the interim results are, are definitely encouraging. Can you give us a sense, are, are these potentially label-enabling? Like, how, how do you, how do you think about it, just given your, your, your broad label? Do you even need sort of a label enabling, or is this just for a standard of care sort of change? Secondly, just in terms of some of the, the Ataxin-2 program and the Ataxin-3 programs, I, I know you touched a little bit on ALS. You also have a FUS program for ALS. Just maybe give us a little bit of a sense, what's the next data timing and what do you expect from the data?

I know the, the FUS ALS is a pivotal in 2025. Maybe the other two. Thank you.

Brett Monia (CEO)

Thanks, Yaron. It's our understanding that ASCEND or RESPOND, RESPOND being the data you're talking about, very encouraging data. Patients that haven't done that well on gene therapy moved on to Spinraza and really showing really good, strong signs of doing very well, improving muscle strength, neuromuscular function. Not surprisingly, there's been a lot of anecdotal data out there over the years that this is the case, but it's very helpful to, that Biogen actually did a study to demonstrate that, and the study is ongoing. It's our understanding that these studies in patients that perform suboptimally on either gene therapy or on Evrysdi, that then moved on to Spinraza, will be more for publication purposes and those sorts of things, and which are for certainly in line with, with promotion.

It's the DEVOTE study that has the potential to actually expand label. The DEVOTE study is a randomized, controlled phase III study looking at higher doses of Spinraza to demonstrate even greater efficacy in SMA patients of all kinds. That's, that's my understanding of the study. I'm getting head nods from my clinical folks here, too, so.

Operator (participant)

The next question comes from Luca Issi.

Brett Monia (CEO)

Oh, wait.

Operator (participant)

RBC Cap-, please go.

Brett Monia (CEO)

I just jumped in. Eric just reminded me I didn't answer the Ataxin-2 question, Yaron. The Ataxin-2 is enrolling for dose cohorts. The top dose is an expanded cohort to have more patients, and the dose that has the potential to be the dose that goes to phase III. That data is due to read out in the year, next year, Ataxin-2 for, for non-genetic ALS. I'm sorry.

Operator (participant)

The next question comes from Luca Issi with RBC Capital Markets. Please go ahead.

Luca Issi (Senior Biotechnology Analyst)

Great. Well, thank you so much for taking my question from on the progress. Maybe I'll Lp(a), if I may, following up with a prior question. Brett, you may have already alluded to it, but I want to make sure. Was far in license, the next generation molecule informed in any sort of form or shape by the blinded event rate they're seeing in the cardiovascular outcome trial, pelacarsen, or is this just truly lifecycle management? Question two, maybe Eugene, if I may, on TTR cardiomyopathy, wondering if you could comment on what statistical methodology are you using for the phase III for, for TTR cardiomyopathy. Are you using the [Finkelstein-Schoenfeld] method, similar to BridgeBio and Pfizer? Are you using the Anderson Gill method, which is similar to Alnylam, and maybe why do you choose one versus the other?

Then lastly, maybe on AGT, what was your reaction to Alnylam-Roche deal, and how are you thinking about BD for your molecule? Thank you.

Brett Monia (CEO)

Sure, Luca. Before turning it over to Eugene, I'll, I'll take two of those, and then you can talk about the statistical plan for CardioTransform. Lp(a) is entirely lifecycle management. The pelacarsen phase III study is going very well, on track for data in 2025, with a potential filing in 2025. It has nothing to do with any particular data from the study, except to say that the study is going very well. So that, you know, lends even greater confidence, by no part, is to, to pursue lifecycle management. We're, we're focused, Luca, on our own programs. Really don't have a reaction to any competitors in the AGT space or anywhere else in the partnering strategies. Our, our plans haven't changed.

We are planning to share new AGT data in the second half of this year at a medical meeting. We've said all along that we think a drug like this for indications like hypertension and heart failure are best suited with a partner to reach as many patients globally around the world. We haven't provided any details on the timing, when we're going to partner the program, nor with whom, of course, but stay tuned for that down the road. Eugene, could you talk a little bit about the Luca's question about our stats plan for CardioTransform?

Eugene Schneider (EVP and Chief Clinical Development and Operations Officer)

Sure. If I understood your question, it was related to the analysis of the primary endpoint. Is that right, Luca?

Luca Issi (Senior Biotechnology Analyst)

That's correct.

Eugene Schneider (EVP and Chief Clinical Development and Operations Officer)

Yep.

Luca Issi (Senior Biotechnology Analyst)

Yeah, that's correct.

Eugene Schneider (EVP and Chief Clinical Development and Operations Officer)

Yeah, as, as we said, the methodology that we're utilizing or planning to utilize for that analysis is a pretty tried and true, using Anderson Gill method to look at, both CV mortality and CV events, recurrent events, that are listed, in our SAP. Again, there's nothing, nothing fancy about this method. It's been tried and, and done in multiple outcome studies. It's a fairly classic way of looking at, at these events.

Luca Issi (Senior Biotechnology Analyst)

Got it. Thanks so much.

Operator (participant)

The next question is from Yale Jen with Laidlaw and Company. Please go ahead.

Yale Jen (Managing Director of Healthcare Equity Analyst)

Good morning, afternoon, and thanks for taking the question. The first question is for eplontersen that, if you get approved later until the end of this year in the polyneuropathy, do you anticipate the drug will also be used for treating the mixed type patients? I have another follow-up.

Brett Monia (CEO)

Absolutely, we do, provided they have, detectable polyneuropathy, Yale. Yes, this, this drug would be suitable for pure PN patients as well as mixed phenotype, patients, hereditary patients.

Yale Jen (Managing Director of Healthcare Equity Analyst)

Okay. My, another question is the, for olezarsen, that, in terms of the SHTG enrollment, can you provide any colors in terms of the status? Do you anticipate completed enrollment later this year?

Speaker 19

I missed the specific-

Brett Monia (CEO)

How are we doing on SHTG enrollment?

Speaker 19

Enrollment's going very, very well, and either very late this year or very early next year. It's kind of the guidance that we've been giving.

Yale Jen (Managing Director of Healthcare Equity Analyst)

Yeah. Okay, great. Thanks a lot. I appreciate it.

Brett Monia (CEO)

Let's see, I only have time for one more question.

Operator (participant)

The last question today comes from Joseph Stringer with Needham & Company. Please go ahead.

Joseph Stringer (Senior Analyst)

Hi, thanks for taking our question. Just a quick one on olezarsen phase III FCS3 later this year. Can you just frame expectations on what type of outcome you'd need to see to be successful commercially? What, what type of key metrics should we be looking at beyond the, the current primary endpoint from, that would be important from a physician or payer perspective? Thanks.

Brett Monia (CEO)

You want to take that, Eugene? I mean, obviously the primary endpoint is triglyceride lowering, % triglyceride lowering compared to placebo, and that's important. We expect, what will really drive this market, substantial TG lowering in, in this patient population. Eugene, and then Onaiza, maybe talk about the commercial also, what, what, what additional endpoints we're looking to see.

Eugene Schneider (EVP and Chief Clinical Development and Operations Officer)

Sure, happy to. We're, we're obviously going to also look at responder, at a variety of responder analyses. So looking at, you know, proportions of patients that get below particular clinically meaningful threshold, thresholds like 880, for instance, is the, the classic one, or 500. So again, achieving those, those, those reductions that are, are thought to be meaningful in terms of their risk for having acute pancreatitis events is, is something that we're, and future prescribers will be very keen to see. We're also looking at quality of life measures that, again, will, will indicate whether these patients are actually feeling better and they're able to function better, and those, again, are, are included as well.

Brett Monia (CEO)

Amy, anything to add?

Onaiza Cadoret-Manier (Chief Corporate Development and Commercial Officer)

We've, yeah, no, that, that's great. I think we've done obviously some, you know, good market understanding on this as well. It's just a reminder, this is a rare disease population for FCS. They really have no tools at their disposal. This is, this is where the first-line treatment is restrictive diet, it's, it's just not, you know, I mean, they just can't, can't continue on that level of restrictive diet that they're on for a while. There's just a huge unmet need. I really do think that this is going to be, let's get the product that's efficacious, but also really safe and easy to use. I think, you know, getting some of the safety tolerability in here is going to be really important versus first generation. It's going to be a real go.

A lot of, lot of lipidologists and a lot of patients are waiting.

Joseph Stringer (Senior Analyst)

Thanks, Jillian.

Eugene Schneider (EVP and Chief Clinical Development and Operations Officer)

Great. Thank you for the question.

Brett Monia (CEO)

Thank you. Thanks, everybody, for joining us today, for today's call. We're well on our way. We're planning to continue our strong momentum the second half of this year by delivering across all of our, all aspect, key aspects of our business, commercial pipeline, technology, and so on. Also, I want to highlight that we're looking forward to providing a comprehensive update on all the great progress we're making at Ionis at our Investor Day on October fourth. We really hope that many of you can join us in person, for that meeting. Hope to see you there. Until then, thanks and have a great day, everybody.

Operator (participant)

The conference has now concluded. Thank you for your participation. You may now disconnect your line.