Ionis Pharmaceuticals - Q2 2024

Transcript

Operator (participant)

Good morning, and welcome to the Ionis second quarter 2024 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, Danielle. Before we begin, I encourage everyone to go to the investor section of the Ionis website to view the press release and related financial tables that we will be discussing today, including a 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've also posted slides on our website that accompany today's call. With me on this morning's call are Brett Monia, our Chief Executive Officer; Richard Geary, Chief Development Officer; Kyle Jenne, Chief Global Project Strategy Officer; and Beth Hougen, our Chief Financial Officer. Eric Swayze, Executive Vice President of Research, Eugene Schneider, Chief Clinical Development Officer, and Jonathan Birchall, Chief Commercial Officer, will also join us for the Q&A portion of our call.

I would like to draw your attention to slide three in our presentation, which contains our forward-looking language 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, everyone, and thanks for joining us on today's call. We've achieved a great deal during the first half of this year, delivering on many significant milestones as we continue to execute on our vision to bring better futures to people with serious diseases. Today, Ionis discovered and developed medicines are reaching more and more people, bolstered by two recent launches: Waynua, for people with hereditary ATTR polyneuropathy in the U.S., and Qalsody, the first approved treatment for genetic cause of ALS, currently available in the U.S. and now approved and available in Europe. And with the progress we're making across our pipeline, our medicines are well positioned to continue reaching more and more patients for years to come.

The U.S. launch of our first Ionis co-branded medicine, Waynua, is progressing well with AstraZeneca, and we expect to bring Waynua to even more patients across the globe with the recent approval in Canada, an anticipated approval decision in Europe later this year, and with additional regulatory submissions completed in many other geographies, with more coming. Today, we are even more confident in the potential of Waynua to address the larger ATTR cardiomyopathy population. As the largest study ever conducted in this patient group, our ongoing landmark CardioTransform trial is on track to deliver the most comprehensive and the most robust data set in this patient population. We believe Waynua has the potential to be the treatment of choice for the global ATTR population.

Our confidence is based on Waynua's strong efficacy profile, as demonstrated in hereditary ATTR polyneuropathy and the freedom of simple at-home self-administration, together with AstraZeneca's global cardiovascular commercialization leadership, along with our leadership in ATTR amyloidosis. As the Waynua launch accelerates, we're also preparing for the launch of olasarsen in FCS later this year, our first independent launch of a whole new medicine for Ionis. olasarsen represents one of the most meaningful opportunities in our pipeline today as we prepare to first launch in FCS, a severe rare disease with no approved treatments in the U.S., and then to expand to the much larger SHTG patient population. Our NDA submission for olasarsen was recently accepted with priority review. Our PDUFA date is set for December nineteenth, and we're ready to bring this groundbreaking medicine to people with FCS.

We also recently completed enrollment for our SHTG phase 3 program, keeping us on track for data in the second half of next year. Based on our significant first-mover advantage and our positive results demonstrated to date, if approved, we believe olasarsen could be the standard of care for both FCS and SHTG. We're building on the capabilities we've established for Waynua and olasarsen in preparation for our anticipated launch of donidalorsen for HAE prophylaxis next year. In our comprehensive clinical program, donidalorsen has demonstrated strong evidence of meaningful benefit across multiple measures of disease, with a favorable safety and tolerability profile. These data, together with the potential for monthly or every two months self-administration using an auto-injector, strengthen our belief that, if approved, donidalorsen has the potential to advance the treatment paradigm for people living with HAE.

With positive phase 3 data in hand, we expect to submit the NDA for donidalorsen soon as we look to independently bring donidalorsen to patients in the U.S. Outside the U.S., our commercial partner, Otsuka, is preparing to file for marketing approval in Europe later this year. And with our recently expanded license agreement, Otsuka is also working to bring donidalorsen to people with HAE in the Asia Pacific region. Following Waynua, olasarsen, and donidalorsen, our next wave of whole genome opportunities includes our program for Angelman syndrome. Based on the positive results from the HALOS phase 1/2 study that we presented last week, we are advancing this potentially transformational medicine into a phase 3 study, which we anticipate will begin in the first half of next year....

ION582 is positioned to become the cornerstone of our wholly owned neurology franchise, with which today includes five wholly owned medicines in clinical development, with more to come by the end of the year. Our accomplishments so far this year and the investments we're making move us closer to achieving our goal of bringing a steady cadence of new transformational medicines to patients for years to come and generating next-level value for all Ionis stakeholders. With that, I'll turn the call over to Richard to discuss our recent pipeline progress and preview key upcoming events. Next, Kyle will review the Waynua launch and our launch plans and progress for olasarsen and donidalorsen. Then Beth will review our financial results. I'll then wrap up things before taking your questions. With that, over to Richard.

Thank you, Brett. We are pleased that our pipeline delivered many important achievements to date this year. With Waynua reaching more and more people with hereditary ATTR polyneuropathy, I am proud of all that our Ionis team has accomplished to discover and develop this important new medicine and bring it to patients in need. Recent ATTR cardiomyopathy data further reinforce our confidence in the potential of Waynua to improve cardiovascular outcomes in this estimated worldwide patient population of approximately 300,000-500,000. With over 1,400 patients enrolled, our ongoing CardioTransform study is the largest and most comprehensive study ever conducted in ATTR cardiomyopathy. As a result, we expect the data we generate will enable physicians and payers to make informed treatment decisions in this dynamic treatment landscape.

In addition, as part of our phase 3 program, we're conducting advanced cardiac imaging substudies, including an MRI substudy and a scintigraphy substudy, which will generate valuable data about the potential benefits of Waynua in cardiomyopathy patients. We were delighted that our recent olasarsen NDA submission was accepted by the FDA for priority review, highlighting the potential of this medicine to make a profound difference in the lives of patients. Our submission was based on the positive phase 3 results in FCS that we presented and published earlier this year. In the phase 3 BALANCE study in patients with FCS, olasarsen showed substantial and durable triglyceride reductions, and importantly for patients, physicians, and payers alike, olasarsen demonstrated substantial and clinically meaningful reductions in acute pancreatitis attacks, a remarkable 84% reduction in hospitalizations, and a favorable safety and tolerability profile.

We look forward to our upcoming December PDUFA date and, assuming approval, bringing the olasarsen to people with FCS who currently have no approved treatments in the U.S. We are also developing olasarsen for the much larger, severe hypertriglyceridemia patient population, and we recently completed enrollment in our extensive phase 3 program for SHTG, with more than 2,500 patients enrolled across three studies. This puts us on track for data in the second half of next year, maintaining our multiyear first-mover advantage for this wholly owned blockbuster opportunity. Following closely behind olasarsen is donidalorsen for the prophylactic treatment of hereditary angioedema. We recently presented and published in the New England Journal of Medicine, positive phase 3 data from OASIS HAE, our placebo-controlled trial.

Additionally, we also presented positive data from OASIS Plus, our trial that includes an open-label cohort for patients rolling over from the Phase 3 study and a separate cohort that we refer to as the Switch study. donidalorsen treatment significantly reduced HAE attacks. The reduction in HAE attacks translated into significant and clinically meaningful improvements in quality of life across multiple validated measures and high levels of disease control in a vast majority of patients. And with longer-term treatment, patients improved further on all these measures. Additionally, as of our most recent data cutoff in February, 98% of OLE patients remain in the study. These positive data were further bolstered by the encouraging Switch results. The Switch study, through week 17, patients showed a substantial reduction in their HAE attack rate with donidalorsen treatment compared to baseline on their previous treatment.

donidalorsen treatment also resulted in improved quality of life measures and increased disease control. Importantly, more than 80% of patients surveyed reported a preference for donidalorsen over their prior prophylactic treatment, and nearly 90% of Switch study patients remain in the study as of the data cutoff in February. In addition to strong clinical results, donidalorsen offers the potential for simple, monthly, or every two months self-administration via an auto-injector. Based on these data, we believe donidalorsen could become a preferred prophylactic treatment for people with HAE. Our NDA, which we plan to submit soon, will include data from OASIS HAE, OASIS Plus OLE study switch and our phase 2 study. Outside the U.S., Otsuka is preparing to submit for marketing approval in Europe later this year. And with the recent expansion of our license agreement, Otsuka also plans to bring donidalorsen to patients in the Asia-Pacific region.

The rest of our rich Phase III pipeline is also advancing, positioning us to continue delivering a steady cadence of potentially transformational medicines to patients. We recently completed enrollment in the pivotal arm of our zilganertsen study for Alexander disease, keeping us on track for a Phase III readout next year. And GSK recently completed enrollment in the Phase III program for the bepirovirsen for chronic hepatitis B, which keeps the program on track for data in 2026. Coming right behind these programs, we have our next wave of medicines, including a number of medicines to treat both rare and broad neurological diseases, five of which are wholly owned, and we expect our wholly owned pipeline to expand later this year when two more medicines from our neuro disease franchise enter clinical development.

ION582, our medicine for Angelman syndrome, has transformational potential for the tens of thousands of people living with this serious rare disorder, who are in need of disease-modifying treatments. For this reason, ION582 is poised to become the cornerstone of our wholly owned neurology pipeline. We're encouraged by the recently presented positive early results from the HALOS study of ION582 in people with Angelman syndrome. In the study, we demonstrated evidence of consistent and meaningful improvement on all key functional areas across multiple assessments. This includes 97% of participants showing clinically meaningful improvement in overall Angelman syndrome symptoms on the SAS-CGI assessment. Improvements in measures of communication, cognition, and motor function exceeded natural history on the Bayley-IV, Mullen III, and ORCA assessments. Additionally, we observed consistent improvements across ages and genotypes.

We saw favorable safety and tolerability at all dose levels, including no discontinuations or adverse events that were considered related to study drug. Based on these positive data, we plan to advance ION582 into a well-controlled phase 3 study in the first half of next year. Alongside the positive phase 1/2 data for Angelman syndrome, several recent events have also occurred in our mid-stage pipeline. We were pleased to present positive phase 2 data at EASL for ION224, our medicine targeting DGAT2, for the treatment of metabolic dysfunction-associated steatohepatitis, or MASH. Additionally, based on the encouraging phase 1b data from IONIS-MAPTRx, also known as BIIB080, that were presented late last year, Biogen recently announced that they've amended the ongoing phase 2 CELIA study with the goal to accelerate a potential proof-of-concept outcome. As a result of this change, they are now projecting data in 2026.

Also, we and our partners recently discontinued development for ION541, targeting ATXN2 for ALS, and IONIS-FB-LRx for geographic atrophy. Both programs showed good target engagement and favorable safety, but did not meet their primary efficacy endpoints. Importantly, Roche continues to advance the IONIS-FB-LRx IgA nephropathy phase III study that they initiated last year based on positive phase II data. Looking ahead, we have several important milestones still to come this year. These include presenting new phase II open label extension data for donidalorsen and data from the DEVOTE study, which is evaluating a higher dose of Spinraza, as well as anticipated regulatory approvals and launches for Waynua and olasarsen, and regulatory filings for donidalorsen. With that, I'll turn the call over to Kyle.

Kyle Jenne (Chief Global Project Strategy Officer)

Thank you, Richard. We are pleased with the initial results of the Waynua launch with AstraZeneca following the U.S. approval at the end of last year, including the significant growth quarter-over-quarter. With an estimated 40,000 patients worldwide and fewer than 20% of patients on an approved treatment, people with hereditary ATTR polyneuropathy remain underdiagnosed and largely underserved. As a result, a high unmet need remains that we and AstraZeneca are uniquely positioned to address. The combined team is working together seamlessly with a shared goal to make Waynua the preferred choice for patients with ATTR polyneuropathy. We continued to see good uptake among patients in the second quarter, with an encouraging mix of new patient starts, including some who were new to this class of medicine, some switching from other treatments, and some using Waynua as an add-on treatment to their existing therapy.

Prescribers and patients are recognizing Waynua's strong clinical profile, and patients value the ability to easily self-administer Waynua from their home. We expect to reach a growing number of patients as we continue to educate prescribers about the value that Waynua brings. With our increased confidence in our ongoing CardioTransform study for ATTR cardiomyopathy, we and AstraZeneca are progressing our pre-commercialization activities... and investments to support the potential substantial opportunity Waynua represents. We are leveraging and building upon our efforts for the Waynua launch to prepare for our upcoming independent launches of olasarsen and donidalorsen. As Richard mentioned, we are developing olasarsen for two indications, the rare FCS indication and the broader SHTG indication, with anticipated first-mover advantage in both settings. We are pleased to receive positive feedback from key opinion leaders on the phase 3 FCS data that we presented at ACC.

They were particularly impressed with the reduction in acute pancreatitis attacks and the substantial reductions in hospitalizations and inpatient hospital days. We expect that these data will also be important in securing access from payers. In addition, the U.S. Expanded Access Program for olasarsen is in place, enabling patients to have access to treatment ahead of potential approval. We are putting the final touches on our independent launch plans to bring olasarsen to patients as soon as possible after anticipated approval. Our medical affairs team has been meeting with physicians and working to improve disease awareness through disease education. Earlier this year, we hired our first Ionis national sales director, and now with the December nineteenth PDUFA date set, we have recently hired and are now training our customer-facing team with extensive rare disease experience in preparation for the FCS launch.

To bolster our field team's efforts, we are deploying a tailored omni-channel strategy to further enhance our relationships with patients and healthcare professionals. Finally, we are building a world-class patient and caregiver support team to provide a seamless customer experience to help patients initiate treatment and remain on therapy long term. We plan to further scale our commercial capabilities as we prepare for the SHTG indication to realize the full blockbuster potential of olasarsen. donidalorsen for the prophylactic treatment of HAE is our next planned launch after olasarsen. Based on the positive results we have seen in the comprehensive development program, we are excited with what donidalorsen could mean for people with HAE. HAE is a well-defined patient population with an estimated 20,000 people affected in the U.S. and Europe.

While prophylactic treatment in the U.S. is well accepted by patients and physicians, there continues to be a need, and the market continues to grow. Outside the U.S., acute therapies have historically been the standard of care. However, prophylactic treatments are gaining ground, especially in Europe. Many people with HAE are unsatisfied with current treatments and are looking for the option that reduces frequency and severity of attacks, that also offers good tolerability and convenience. This is a disease that typically appears in childhood, so patients have to manage their disease throughout most of their life. As a result, patients have a history of switching treatments, seeking to find the best therapy for them. We believe donidalorsen could be a preferred prophylactic treatment for both patients new to therapy and patients currently on available therapy.

With strong clinical data, including switch data, and the simplicity of monthly or every two-month self-administration via an auto-injector, we believe donidalorsen combines the attributes that people with HAE are looking for in a single, attractive treatment, assuming approval. Today, I'm pleased to share that we are right where we should be in preparing for our upcoming launches. Our infrastructure to support commercialization is in place, and we will be ready to begin delivering our medicines to people in need as these new therapies come to the market. Now I'll turn it over to Beth.

Elizabeth L. Hougen (CFO)

Thanks, Kyle. Our results in the second quarter and first half of this year reflect the excellent progress we've made toward our goal to bring a steady cadence of medicines to the market. We continue to generate meaningful revenue while investing our capital to independently launch several new medicines over the next few years that have a combined multibillion-dollar peak sales potential. We are also investing in advancing our next wave of Ionis medicines, which continued to make great progress in the first half of this year. In addition to our recent pipeline achievements, we delivered strong financial results, keeping us on track to achieve our financial guidance. We earned revenues of $225 million and $345 million for the second quarter and first half of this year, respectively.

Spinraza remained the primary source of our commercial revenue, with $57 million and $95 million of royalties in the second quarter and year-to-date. Notably, Spinraza product sales increased 25% from the first quarter to the second quarter due to growth from both the U.S. and ex-U.S. market. Additionally, in the second quarter of the Waynua launch, product sales were $16 million, bringing year-to-date sales to $21 million. As a result, our Waynua royalty revenue increased quarter-over-quarter to $4 million for the second quarter and $5 million for the year-to-date period. R&D revenue also increased in the second quarter and year-to-date, reflecting the value that our pipeline and technology continue to generate. As planned, our non-GAAP operating expenses for the second quarter and year-to-date increased over the same periods last year, driven by higher SG&A expenses.

Our SG&A expenses increased 46% and 31% for the second quarter and first half of this year, respectively, as we continue to make investments to prepare for our upcoming independent launches of olasarsen and donidalorsen. Notably, we built out our commercial team, including our field organization, and they are enthusiastically preparing for our FCS launch. Our SG&A expenses also included our minority portion of Waynua US launch expenses. As planned, our R&D expenses decreased slightly for the second quarter and were flat for the first half of this year compared to the same period last year.

Our results for the first half of the year keep us on track to meet our 2024 financial guidance, including revenue of more than $575 million, of which approximately $175 million will come from non-cash amortization of partner payments we received in prior years. Looking to the second half of this year, we expect our total revenue to be slightly lower compared to the first half and weighted more to Q4. We expect commercial revenue to increase as the launches ramp for Waynua and Qalsody, and from higher anticipated Spinraza royalties as our tiered royalty rate increases. Additionally, we expect our R&D revenue, which often fluctuates from quarter to quarter due to the timing of achieving various collaboration milestones, to be lower in the second half of the year.

Importantly, however, we still have the opportunity to earn sizable payments, including a $30 million milestone payment from AstraZeneca, if Waynua is approved in the EU. We continue to project our full-year 2024 operating expenses to increase by a mid- to high single-digit % compared to 2023, excluding the impact of one-time costs last year. Similar to the first half of this year, the increase will be driven primarily from sales and marketing expenses as we prepare for our back-to-back independent launches of olasarsen and donidalorsen. We are on track to end the year with $1.7 billion in cash as we continue to make strategic investments in the substantial opportunities before us today, including our late-stage programs and our next wave of innovative medicines. As you can see, we delivered a strong second quarter and first half.

Before I turn it back to Brett, though, I'd like to provide you with a look beyond this year to our path to revenue growth and increasing value as we deliver on our goal to bring more medicines to more people. With our strong development and regulatory progress, Ionis is at a critical inflection point. We have several near-term commercial opportunities with significant potential to help patients in need. In parallel, we are advancing our next wave of potentially transformational medicines and our technology. As a result, we plan to continue to strategically invest our capital resources to ensure we unlock the full potential of our promising near and longer-term portfolio. Our investments are focused in four key areas. First, in our go-to-market activity, activities, enabling us to realize the full value of our medicines, which includes investing in our upcoming independent launches for olasarsen and donidalorsen.

Our expenses in this area also include our Waynua cost share with AstraZeneca for the hereditary ATTR polyneuropathy launch in the U.S. As we approach the anticipated olasarsen launch for the broader severe hypertriglyceridemia population, we will scale our capabilities and increase our go-to-market expenses to support the larger opportunity. And as we and AstraZeneca approach a potential ATTR cardiomyopathy launch for Waynua, our expenses will increase consistent with the much larger cardiomyopathy opportunity. Importantly, our planned investments are right-sized for the combined multibillion-dollar revenue potential that these important medicines represent. Second, we continue to advance our late-stage pipeline. All of our ongoing large phase 3 studies are fully enrolled, with more than 4,000 patients in all, and are currently in the heaviest period of investment.

We expect these investments to fuel our continued value generation and revenue growth as the data read out and we bring new medicines to patients over the next couple of years. Third, we are increasing our investments in our next wave of medicines, including development and pre-commercialization expenses for our growing, wholly owned pipeline of potentially groundbreaking neurology medicines, such as ION582 for Angelman syndrome. And finally, we are investing in cutting-edge technologies to ensure we continue to deliver innovative medicines with competitive profiles well into the future. So as you can see, we are strategically investing our capital toward growth opportunities. Importantly, we expect our investments to power strong revenue growth and positive cash flow as our medicines reach more and more patients in need, positioning us to deliver next-level value for all Ionis stakeholders for years to come. With that, I'll turn the call back over to Brett.

Brett Monia (CEO)

Thank you, Beth. As just summarized, we have made great progress in the first half of this year, and in the second quarter alone, we've achieved a great deal with many important successes, which include a continued strong start to the Waynua launch for hereditary ATTR polyneuropathy in the United States, approval in Canada, and submissions under review in many additional territories. Positive FCS data for olasarsen, which we presented at ACC, which were the basis for our NDA submission, which was recently accepted by the FDA with priority review. Positive HAE data for donidalorsen, presented at EAACI. That will be the basis of our upcoming regulatory submissions. We completed an enrollment for the phase 3 olasarsen SHTG program this past quarter, keeping us on track for data next year.

We also presented positive data from the HALOS phase I/II study in people with Angelman syndrome, and we are well along in preparing for our end of phase II meeting with the FDA, scheduled for this fall, with plans to advance this important medicine to phase III development next year. We delivered solid second quarter and first half financial results, keeping us on track to achieve our 2024 financial guidance. Based on the strong progress we've made across our business this year, we are well positioned to continue building on our positive momentum as we execute towards achieving all of our strategic priorities. We've arrived where we are today by being focused on a clear vision and a clear set of strategic objectives, which include building and advancing our pipeline and delivering medicines that we conceive, discover, and develop directly to patients. Our pipeline is delivering.

We achieved multiple marketing approvals and positive key data readouts over the past year, and we are poised to build on the strong momentum in the near term. We have prioritized building our wholly owned pipeline and are now advancing several of these medicines towards the market. In parallel, our partner programs are progressing on track with important Phase III readouts next year and beyond. We are also focused on extending our leadership position in oligo and peptide therapeutics by expanding and diversifying our technology, further optimizing our capabilities for existing therapeutic areas and opening up new areas for drug discovery. All of this sets us up to continue bringing a steady cadence of new medicines to patients for years to come. We're looking forward to sharing our progress as we build on our recent achievements and accomplish our strategic objectives.

With that, I'll now open the call up for questions. Before moving into the Q&A portion of our meeting, I just ask that our analysts please limit yourselves to a single question as we have quite a long queue, and we'd like to get as many people into the question and answer their questions as much as possible. With that, Danielle, we can open up for questions.

Operator (participant)

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Again, it's star one to ask a question. The first question comes from Akash Tiwari from Jefferies. Please go ahead.

Amy Li (SVP - Biotechnology/Large Cap Pharma)

Hey, this is Amy on for Akash. Thanks so much for taking our question. So one on ATTR-CM, there's been some debate on if you need a certain level of TTR to have a cardioprotective effect. Have you seen anything in your own data around this theory? And do you expect any differences with a silencer approach using an all-cause mortality versus a CV mortality composite primary endpoint? Finally, do you have the flexibility to change your primary endpoint if needed? Thanks so much.

Brett Monia (CEO)

Thank you, Amy. We have seen... We don't believe that there's any evidence of a threshold effect for TTR lowering to achieve benefit in either polyneuropathy or in cardiomyopathy endpoints. We're very pleased with the magnitude of TTR reductions that we have seen in all of our studies for Waynua for polyneuropathy. Very pleased with the level of magnitude of TTR lowering we're getting. But I don't believe that there's any believable evidence out there that suggests a specific threshold effect for TTR lowering to produce benefit either in polyneuropathy or in cardiomyopathy. We believe our primary endpoint is in cardiovascular mortality and hospitalizations, and that's what we're laser focused on.

We also have as secondary endpoints, specifically CV mortality as well as all-cause mortality, and we think they're both, both very important. Next, next study, or next question.

Operator (participant)

The next question comes from Myles Minter from William Blair. Please go ahead.

Myles Minter (Biotech Equity Research Analyst)

Hey, just on the timing of the CardioTransform readout, I mean, is it fair to say that you're at least waiting for data at ESC in London that might have read through to your trial? And if that is the case, you know, what exactly would you be looking for out of that data set to stick with the decision that you're going to read that out early or just wait until the full 140 weeks are up in that study? Thanks very much.

Brett Monia (CEO)

Thanks, Myles. So we're very pleased with the way the CardioTransform study is advancing. We are particularly pleased with the blinded events that we're continuing to evaluate, both CV hospitalizations as well as mortality. It's going very well, right on track. As the first silencer to read out in this indication, we're very much looking forward to any and all additional data that we can see, which we think, you know, will be a very nice read-through to our CardioTransform study.

As you know, you know, we have the largest, by far, study ever conducted in this patient population, and we think that anything we see from other molecules in the silencer class are gonna be very, very good read-throughs to what we expect to see in our study. So we're very much looking forward to any and all data that comes from future presentations on the silencer class. Next question, please.

Operator (participant)

The next question comes from Mani Foroohar from Leerink Partners. Please go ahead.

Ryan McElroy (Biotechnology Equity Research Associate)

Hey, guys, you have Ryan on for Mani. Thanks for taking our question. Can you just talk a little bit about any early insights from the Waynua launch and how you see that informing a potential launch strategy in cardiomyopathy? And kind of alongside that, you know, maybe what pre-commercialization activities you guys are undertaking in cardiomyopathy? Thanks.

Brett Monia (CEO)

Kyle, or I'm sorry, Jonathan?

Jonathan Birchell (Chief Commercial Officer)

Yeah, thanks for your question. We're very pleased with the early insights we're getting with the PM launch. As Kyle referenced, we're seeing patients who are new to treatment, we're seeing patients who are switching from existing treatments, and we're seeing patients having Waynua added on to their current treatment. So we're super pleased with what we're seeing. It's very early days. This is a foundation year for the launch of Waynua, but we think there's certainly significant opportunity here when you think through the potential patient population of both PM and CM, the number of patients who are potentially underdiagnosed, and fundamentally, the relatively small numbers today who are actually treated.

What we're pleased with is that we're seeing prescribing from both neurology and cardiology, and both centers of excellence as well as in the community. And that, I think, bodes well, not just for the PM launch and that progression, but also the transition, obviously, into future indications. Obviously, when it comes to some of those future indications, it's very premature to speculate as to what might happen there. We'll have to wait for future data readouts of our own pretty comprehensive programs.

Brett Monia (CEO)

Yeah, two quick things to add. First, on the payer access side of things, we're seeing payers cover Waynua very quickly. So from the prescription process, the patients actually starting on drug is going very, very well. That tells us that the right types of patients are being identified, and it's also telling us that physicians are justifying the prior authorization process with a sense of urgency, which tells you that these patients need treatment, and they see the value in Waynua. The second thing I'll just mention is around our patient engagement team. Our PEM team is directly interacting with these patients and getting feedback on a real-time basis. Patients are extremely pleased when they start Waynua, at the ability to self-inject with the auto-injector.

Very well tolerated, very easy to use, very convenient for those patients, and the profile of Waynua is really playing out the way that we expected it to in the market. Next question, please.

Operator (participant)

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

Yanan Zhu (Senior Equity Research Analyst - Small/Mid Cap Biotechnology)

Great, thanks for taking our questions. Wondering about what's your takeaway from Roche's recent presentation of their Angelman syndrome phase 2 data at the ASF meeting? And also separately, given the similar development timeline of your Angelman syndrome program and Ultragenyx program, do you think FDA will want to apply the same pivotal endpoint to both programs? Or is there a possibility that the agency could allow different primary endpoints based on strength of data? Thank you.

Brett Monia (CEO)

Thanks, Yanan. I'll take the first question, then I'll ask Eugene to comment on the primary endpoint and the harmonization in primary endpoints for Angelman. So, we were very pleased to see the data that Roche presented on their Angelman's program, and particularly, we were pleased with the fact that the data further supported our confidence in our phase 1/2 data that we presented at ASF. Specifically, that the rank order of improvements that they reported with respect to the magnitude of improvement was exactly what we reported. The biggest magnitude that they reported was in expressive communication, followed by receptive communication, followed by cognition, followed by motor function, and so on.

And that's exactly what we reported, which bolsters further confidence that, you know, in our results to date. We were also pleased with the magnitude of benefit we're seeing, compared to their program, which really it looks like when you really compare apples to apples, and you convert Bayley III to Bayley IV outcomes, it bodes very well. We look like we have even better efficacy at lower doses compared to what Roche presented. But we were pleased to see what they showed because of the consistency in sub-domain benefit, between the two programs. Eugene?

Eugene Schneider (Chief Clinical Development Officer)

Yeah, well, regarding the primary endpoints and conversations to be had with the agency, of course, we're looking forward to updating you after we've had our discussions. But there is... From our standpoint, there's this will be data-driven. We certainly do believe that the data and consistency of what we see in our phase 1/2 study gives us pretty good idea of what we would like to see in a pivotal study, but it's still to be seen what the specific primary endpoint will end up being. We'll certainly give you an update.

Brett Monia (CEO)

Yeah.

Yanan Zhu (Senior Equity Research Analyst - Small/Mid Cap Biotechnology)

Is there a precedent? ... to have a slightly different primary endpoint?

Eugene Schneider (Chief Clinical Development Officer)

Of course, there's plenty of precedent in neurology space as well as outside. I mean, if you look at ATTR-CM, that's another example where primary endpoint is not identical for two very similar programs. So, stay tuned. We will certainly be happy to provide you an update.

Kyle Jenne (Chief Global Project Strategy Officer)

Thanks, Yanan. Next question.

Yanan Zhu (Senior Equity Research Analyst - Small/Mid Cap Biotechnology)

Very helpful.

Operator (participant)

The next question comes from Jessica Fye from JP Morgan. Please go ahead.

Jessica Fye (Managing Director, Equity Research Analyst - Biotechnology)

Hey there. Thanks for taking my question. On the back of the top line Helios-B data, what's your latest expectation for whether silencers in TTR cardiomyopathy will mainly be used in combination with stabilizers versus as monotherapy? Thank you.

Kyle Jenne (Chief Global Project Strategy Officer)

Yeah, I'd be happy to talk to that. This is Kyle. Thanks, Jessica. The data ultimately is gonna drive this, we believe. That is a starting point. I think ultimately it will come down to physicians and patients making a decision around the profile of treatment that they want in that decision. But when we see it right now, we are seeing, we know a use in combination, obviously, as hATTR polyneuropathy indication combined with cardiomyopathy indication for the stabilizers currently. So we're seeing it happen now. We think that that will continue to progress over time.

And we also believe that based on the data and the way that that data plays out, will be justification for physicians to be able to justify that to the payers whenever they submit these requests and, try to get the drugs approved. So I think it's ultimately data and driven by physicians and patients.

Brett Monia (CEO)

And just to add to that, as you know, Jess, we have, you know, we're positioned to have the richest data set across the board on primary as well as secondary and sub endpoints and subgroups. And we're gonna have a great deal of data in combination usage as well as in monotherapy, second to none. And that includes data on, you know, key endpoints, clinical endpoints such as hospitalizations, mortality, six-minute walk test, biomarkers, and so on, but also in the imaging studies.

We have several imaging studies in process, and we think that if anyone is gonna be able to show really meaningful improvements in combination versus monotherapy across the board, whether it be imaging or clinical endpoints, we're gonna be in the best position to do so. And we think that that will, as Kyle said, because this is a data-driven, you know, environment, we're gonna be in the best position to actually have the data to support combination usage. Next question, please.

Operator (participant)

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

Allison Bratzel (Equity Research Analyst)

Hey, good morning, guys, and thanks for taking my question. Maybe one on pelacarsen, since that phase 3 data and regulatory filing are coming up next year. Could you just talk to or frame what you'd like to see in that readout? And maybe in broad strokes, you know, what gives you confidence in differentiation of this asset, you know, in what could be a competitive space? You know, color on that or the next gen program would be helpful. Thank you.

Brett Monia (CEO)

Yeah, Allison. So, you know, there's not... The only news on pelacarsen is really that the study is on track to read out as scheduled next year. Everything is going very well. And, you know, our partner, Novartis, is well positioned with first mover advantage in this first to market patient population, this enormous patient population. Everything we're seeing in the phase three study is very supportive of this being set up for a successful outcome. First mover advantage is really important, and we with Novartis have substantial lead to the market. Yeah, well, the program that our follow-on program to Novartis with Novartis on the follow-on program is advancing well.

Maybe I'll ask Eric Swayze to comment on how things are going.

Eric Swayze (Executive VP, Research)

Things are going great. We've been working closely with Novartis, looking at a variety of ways to extend the dosing interval and make a great Lp(a) lowering new drug. I'm sure we'll discuss it in some time as the program advances further, but I can't really say more than that at this time. Very pleased with the progress we've been making on new technologies, siRNAs in particular, and a broad range of other things beyond what would be meaningful for the Lp(a) program.

Brett Monia (CEO)

We feel very comfortable that we're gonna achieve our objectives with Novartis on a follow-on molecule. Things are going very well. There's obviously a lot of benchmarks out there today. So there's a lot, lot to compare to. We're pleased. Next question, please.

Operator (participant)

The next question comes from Yaron Werber from TD Cowen. Please, please go ahead.

Yaron Werber (Managing Director, Senior Biotechnology Analyst)

Great. Thanks for taking my question. I also have just a quick follow-up on Waynua. And as you look at the Helios-B data, and I'm totally obviously aware that you're probably gonna be waiting for the full Helios-B result, but as you think about with a much powered trial design, where could you potentially differentiate, and how important will that combo data be, just given that, overall, vutrisiran will get a broad label for TTR? Thank you.

Brett Monia (CEO)

Well, thanks, Yaron. As the largest study ever conducted in this patient population, by far, we think we have the opportunity to differentiate in several different areas. It'll be very interesting to see, you know, the onset of action for silencers and whether or not our onset of action is going to be similar or faster. It's going to be very interesting to see the combination data, as you alluded to just now, as we touched on earlier. Combination data is going to be very important in this patient population, and despite having a broad label, which we expect to have as well, cardiologists are data-driven, and they're gonna need to see data before advocating for combination usage. I think we're well positioned to have that data.

You know, NYHA class categories are gonna be very important to see how mild patients are doing, moderately ill patients and severely ill patients are doing. All this, when you have a well-powered study, a rich dataset, set up to have the rich dataset, you have the potential ability to differentiate across the board. Anything to add to that, Eugene?

Eugene Schneider (Chief Clinical Development Officer)

No, not really, Brett. You characterized it. I think the power really comes from the size of the study and also an ability to look at subpopulations, which we're really, well positioned to do.

Brett Monia (CEO)

Thank you, Yaron. Next question.

Operator (participant)

The next question comes from Jason Gerberry from Bank of America. Please go ahead.

Jason Gerberry (Managing Director and Equity Research Analyst)

Hey, guys. Thanks for taking my question. I wanted to come back to the CardioTransform timing question. So it sounds like we're gonna get pretty detailed and granular data from the main analysis at ESC in terms of multiple curves on overall mortality and subgroups with tafamidis background, including mortality. So it seems like you'll have everything you need to know post ESC on whether or not the 2025 interim is in the cards. So is it fair for investors to get or expect maybe a clear message as of the third quarter update on which way you're gonna go as the base case, 2026, or whether or not you'll look to 2025 interim? Thanks.

Brett Monia (CEO)

Thanks, Jason. So, Ionis and our partner, AstraZeneca, you know, have been thinking about this quite a bit. Our base case remains under 40 weeks of treatment, which brings us to mid-2026, if the study were to go to completion. But, you know, we are committed to bringing Waynua to patients as fast as possible if it makes sense to do so. And certainly, as I mentioned earlier, you know, following up on our blinded events and following up on the studies that we're running is most important. But any new information that we get from other treatments in the same class, the silencer class, is gonna be informative on what we do.

With that said, we can't get ahead of regulators. We're gonna want to get a buy-in on anything we do with respect to an earlier readout with the FDA, the EMA, before making any proclamations out there publicly. So timing is a bit uncertain right now, but rest assured that we and AstraZeneca are working on this very thoughtfully.

Jason Gerberry (Managing Director and Equity Research Analyst)

Okay, thanks so much.

Brett Monia (CEO)

Next question-

Operator (participant)

The next question comes from Jay Olson from Oppenheimer. Please go ahead.

Jay Olson (Biotechnology Equity Research Analyst)

Oh, hey, congrats on all the progress, and thanks for taking the question. Can you talk about your launch preparation for olasarsen in FCS, and how should we expect the launch uptake and eventual opportunity in FCS? And, also the early access program, how many patients you have, and will those patients switch over to, commercial product, soon after approval? Thank you.

Brett Monia (CEO)

Yeah, thanks for your question. We're really pleased with the progress we're making and have continued to make. Obviously, our preparation started a couple of years ago with the medical affairs team, and subsequent to that, we built out all the commercial functions that you would expect, whether that's, you know, marketing, market access, patient support that Kyle referenced. We're trying to build out, you know, industry-leading support there for our patients. And to bring you right up to date, we've now started hiring and training our field teams ready to engage with customers. So the build has gone very well and is certainly on track, aligned with our regulatory progress, which with breakthrough designation has been at this point very timely.

And that, we think sets us up for a positive launch. Obviously, to your question specifically about the expanded access program, we've got patients, let's be honest, before that, who've been in our pivotal registration studies that are obviously patients that at launch, we hope to provide the opportunity to move on to commercial drug. And the EAP is now in the hands of our medical team, and they're talking to customers today, and patients are progressing through the administration or the administrative side of getting access to olasarsen through that program. So all in all, we are doing a lot of work, as you can imagine.

... but very much on track to be ready to launch just as soon as the FDA provides approval. Fingers crossed.

Jay Olson (Biotechnology Equity Research Analyst)

Thank you.

Brett Monia (CEO)

Thanks, Jay. Next question, please.

Operator (participant)

The next question comes from Max Holtz from Morgan Stanley. Please go ahead.

Max Holtz (Market Risk Analytics, Macro)

Hey, guys. Thanks for taking the question. Maybe just one on the neurology pipeline. You know, with Angelman sort of emerging as your lead program, can you maybe highlight, you know, what you view as the next key opportunity there, and if there's any potential read-through from what you learned in Angelman? Thanks.

Brett Monia (CEO)

Eugene?

Eugene Schneider (Chief Clinical Development Officer)

Yeah, sure. Happy to. Thanks for your question. So certainly, we are delighted to have Angelman serve as kind of the linchpin of the neuroscience portfolio. But it is a very rich portfolio following the Angelman phase 3 program. Just to name a few that are most advanced currently, certainly the zilganertsen, which is now fully enrolled in its pivotal study, as we recently announced, is the next molecule that we're super excited about. It's an ultra-rare disease. It fits very well with our neurology portfolio. The study's progressing well. There's great feedback from sites and investigators on kind of the quality of the study conduct. And it...

And behind zilganertsen, of course, we are delighted to have our FUS ALS program progressing well, our Prion program really making great strides in first-in-human experiments that we're now conducting. So we're looking forward to sharing lots of data with you over the coming months, and certainly years in that rich area of research and development for us.

Brett Monia (CEO)

Our wholly owned neurology pipeline, thanks, Eugene, is positioned to grow and expand. In addition to the programs that are in the clinic today, we expect to start two additional wholly owned neurology programs by the end of this year, and more next year, for both rare as well as larger indications, or more highly prevalent indications. I also wanna highlight the great progress we're making to extend our leadership technologically in neurology. You know, our most advanced backbone chemistry, MSPA, is expected to enter clinical development for a CNS indication later this year, which is focused on reducing dose frequency very meaningfully. We're also making great progress in traversing the blood-brain barrier using subcutaneous or intravenous administration, infrequent administration.

And we're looking forward to maybe our first candidates overcoming the BBB early 2025, and we're looking forward to talking about that as well. So CNS is here now, and we're leading in this space, and we continue to expect to extend our leadership position in CNS going forward. Thanks, Mike. Next question, please.

Operator (participant)

The next question comes from Nary... I'm sorry, excuse me, Gary Nachman from Raymond James. Please go ahead.

Gary Nachman (Managing Director of BioPharma/Biotech Equity Research)

Great. Thanks, guys. For donidalorsen, when you submit the NDA, what indication will you be looking for on the label? And are you optimistic the switch data will actually be included on the label, which will be so important for these HAE patients? Any chance you could get a priority review, or is it likely a standard review? And when will you start building out that commercial team, how much could you fully leverage what you're doing currently with olasarsen? Thanks.

Brett Monia (CEO)

Thanks, Gary. Eugene will take the first couple of questions, and then Jonathan, you could touch on the build-out of the commercial team.

Eugene Schneider (Chief Clinical Development Officer)

Yeah, with regard to the indication, of course, we're seeking a broad indication for prophylaxis of attacks in hereditary angioedema, and we're pretty comfortable with how things are progressing. Obviously, it is to be determined what the final label looks like and the indication statement. Sorry, what was the second part of the question?

Brett Monia (CEO)

Whether we expect to have switch data.

Eugene Schneider (Chief Clinical Development Officer)

The switch data. That's right. And, yeah, along the same line, again, it's really early to speculate on what the final label is. We will do our best to. We believe our program, our pivotal program is very comprehensive, and we also believe that the data that we collected in the switch populations is important for physicians to be aware of. So we'll make sure that this data is shared broadly, whether it's publication or it ends up in the label. We can't really speculate today.

Brett Monia (CEO)

Yeah. And I'll just touch on that a little bit more, Gary. You know, the switch data is very important, we believe, from a safety standpoint, which we think bodes very well for including it in the label. I mean, these patients switch all the time, right? Actually having data that informs physicians on how to safely switch patients such that they avoid getting a gap in their protection against HAE attacks is gonna be very important. And we think that will... and of course, the FDA is focused on safety and protection against, you know, disease progression. So we think that that bodes very well for us to get in the label.

But as Eugene said, it's we don't, you know, it's risky to get ahead of the regulators on what a label will look like, but we think that we have a pretty good shot at that. Jonathan, how's the launch prep going?

Jonathan Birchell (Chief Commercial Officer)

Launch prep is going well. As you can imagine, this, this is coming so hot on the heels of the potential olasarsen launch that we talked about. But the launch prep on the commercial side for Doni is well advanced. There are a lot of capabilities that we've built for olasarsen that we can leverage for Doni, whether that's the medical affairs function, first and foremost, that's been well established for olasarsen, that's now leaning in in the HAE space. We've got brand teams, access teams building out the value dossiers. Patient services is also well advanced and ready to support patients in the HAE space. And omnichannel as well is a capability that we feel very confident that we've built well at Ionis now, and is a capability that's very applicable both to the FCS launch, but also the HAE launch.

So there's a lot of synergy there on the commercial side, albeit a lot of that is being appropriately built to best serve each of those launches and the markets and the challenges that they present.

Brett Monia (CEO)

We're also very pleased with the progress Otsuka is making for submission and preparing for launch in Europe. So stay tuned for that as well. Next question, please.

Operator (participant)

The next question comes from Salveen Richter from Goldman Sachs. Please go ahead.

Salveen Richter (Managing Director, Global Investment Research)

Good morning. Thanks for taking... Or good afternoon. Thanks for taking my question. Could you just speak to the work you're doing here on, on oligos with, next generation backbones and, and the other modalities you're looking at, and when these programs might enter the clinic? Thank you.

Jonathan Birchell (Chief Commercial Officer)

Sure. So as Brett mentioned earlier, the first compound that incorporates our MSPA backbone will enter the clinic for a neurology indication later this year. And the objectives there are to try and extend the dosing interval with the enhanced stability of that backbone, which it provides, and we'll see how it performs. We also have a compound in development with a partner, AstraZeneca, that uses our bicycle program to deliver drug to the cardiac muscle in this case. That program is moving forward and we look to start IND talks this year, and that's progressing nicely. And that's an siRNA coupled to the Bicycle program. And we also have an internal siRNA program for a follow-on indication for a liver target that we anticipate getting headed towards development this year.

And then beyond that, we've been making some really nice progress in our blood-brain work, both with our Bicycle collaboration and also the Vectoris collaboration, which we announced earlier this year or very late last year. And we had some scientists from the team present some of that data at a recent TIDES meeting with early mouse data in the Vectoris collaboration. It looks fantastic, and we'll continue to provide some more data updates. And hopefully, if everything goes according to plan, we can get some molecules that cross the blood-brain barrier program for our whole neurology pipeline into development early next year. Thanks, Eric.

Brett Monia (CEO)

And I'll just add to that, Salveen, you can expect to see in the not-too-distant future new programs advancing towards development focused on neuromuscular diseases, skeletal muscle, specifically, to further extend our leadership in neurology. And also, we're pleased with the progress we're making with Metagenomi on gene editing. We have several programs there that are advancing very nicely pre-clinically, and I think next year could be a very informative year, a very interesting year in our gene editing program with respect to new information coming out as to what our strategy is and what our first molecules will be. So stay tuned for that. We're making great progress across the board in diversifying and expanding our technological capabilities. And with that, I think we have time for one more question.

Operator (participant)

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

Kostas Biliouris (Director and Biotech Analyst)

Hello. Thanks for taking our question, and congrats on the progress. Can you talk a little bit about the CardioTransform enrolled population, and specifically the differences between the geographies and the follow-up from the originally enrolled population, and the population who were enrolled after the changes you made to the statistical design? If you expect any impact from the differences between these two populations. Thank you.

Brett Monia (CEO)

Thanks, Kostas. So, we of course haven't shared the demographics for our CardioTransform study yet. We look forward to doing that in the future. We really are pleased with the enrollment in the study. And as we've said, we have a nice balance in this big study, the largest study ever conducted in ATTR cardiomyopathy. Nice balance between monotherapy patients as well as patients on combination treatment. We're also very pleased with, you know, very small percentages of drop-ins and dropouts in the study. It's going exactly as planned. We're pleased with the percentages of patients we have with New York Heart Association Class one, two, and three in the study. And, you know, we...

Everything we've seen, that has come out in this space with respect to other people's patient demographics, supports our decision to, expand our study to take into account for a patient population that's been diagnosed, much earlier in their disease. So, we, you know, we couldn't be more pleased with the way the study is going, including our patient demographics. So, thanks for the question, Kostas, and I think it's time to wrap things up. I really, really want to thank everybody who joined us today, for your participation and your questions.

We're very proud of everything we've accomplished this past quarter, first half of this year, and we're planning to build on this momentum to achieve even greater successes in the second half of this year. And we're very much looking forward to providing you updates on the progress we continue to make this year as well as into next year. So thank you very much, everybody, and have a great day.

Operator (participant)

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.