Ionis Pharmaceuticals - Q3 2023

Transcript

Operator (participant)

Good morning, and welcome to the Ionis Third 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 Mr. Wade Walke, Senior Vice President of Investor Relations, to lead off the call. Please begin, sir.

Wade Walke (SVP of Investor Relations)

Thank you, Chuck. 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 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 have also posted slides on our website that accompany today's call. With me this morning are Brett Monia, Chief Executive Officer, Onaiza Cadoret, Chief Global Product Strategy and Operations Officer, Richard Geary, Chief Development Officer, and Beth Hougen, Chief Financial Officer. Eric Swayze, Executive Vice President of Research, and Eugene Schneider, Chief Clinical Development Officer, will also join us for the Q&A portion of the call. I would 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 details. 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. Since taking the helm at Ionis nearly four years ago, we have executed on a strategy to deliver next-level value, and we have done so with a clear vision and laser focus on our strategic objectives to bring our medicines directly to patients, build our wholly owned pipeline, and to extend our leadership in oligonucleotide therapeutics.

Our successes this year, which are a direct result of our efforts in these key areas, move us closer to achieving our ultimate goal: to deliver a steady cadence of new transformational medicines to patients and to generate next-level value for all Ionis stakeholders. We are on the cusp of delivering our near-term commercial medicines to patients, starting with the first potential approval of eplontersen this year. We and our co-commercialization partner, AstraZeneca, are prepared to launch eplontersen following U.S. approval. We're also executing on a global regulatory strategy with potential approvals in the EU and Canada next year. Additional filings are also planned, positioning us for a steady cadence of approvals around the world. We recently achieved another of our key objectives for eplontersen with the publication of a comprehensive review of the phase III NEURO-TTRansform study results in JAMA.

Publishing our results in a highly respected journal like JAMA reflects the importance of our phase III NEURO-TTRansform study for the treatment of ATTR polyneuropathy and showcases the strength and quality of our results. Based on its strong overall profile, including highly positive phase III data, together with the freedom of a simple, at-home, monthly self-administration profile, we believe eplontersen is well-positioned to become the therapy of choice for ATTR patients who remain underserved by current therapies. Following closely behind eplontersen are olezarsen and donidalorsen, our wholly owned near-term commercial opportunities. We were very pleased with the positive top-line data we reported last month from our olezarsen phase III BALANCE study in patients with FCS. Olezarsen showed significant triglyceride reductions, which was the study's primary efficacy endpoint, along with a favorable safety and tolerability profile.

But most importantly for patients, olezarsen demonstrated substantial reductions in acute pancreatitis events, making olezarsen the first lipid-lowering therapy to achieve this result in a clinical setting. With these highly positive results, we are on track to file for marketing approval in the U.S. and EU early next year, positioning olezarsen for its first potential approval as early as the end of next year, assuming priority review in the U.S. We also continue to be encouraged by the performance of donidalorsen, our medicine for the prophylactic treatment of HAE. We recently reported 2-year open-label extension data, which demonstrated favorable safety and tolerability, along with durable and sustained protection against HAE attacks, consistent with the previously reported 1-year OLE results and our phase II results. We are getting closer and are looking forward to our phase III readout, with data expected in the first half of next year for donidalorsen.

We also made significant progress recently in further strengthening our wholly owned neurology pipeline by advancing zilganersen, our treatment for Alexander disease, into phase III development. Advancing zilganersen further expanded our rich phase III pipeline to a total of nine drugs in development for eleven separate indications. And 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 Onaiza to discuss our expectations for the eplontersen launch and to briefly review the status of our go-to-market activities for olezarsen and donidalorsen. After Onaiza, Richard will discuss our recent pipeline progress, and after that, Beth will review our third quarter financial results. And then I'll wrap things up before taking your questions. And with that, over to Onaiza.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Thank you, Brett. As Brett outlined, and as you will hear from Richard in more detail in a moment, Ionis's pipeline holds tremendous promise, and today, we are ready to begin delivering our medicines to patients. With an estimated 40,000 patients worldwide and fewer than 20% of patients on an approved treatment, hereditary ATTR polyneuropathy remains significantly underdiagnosed and a largely underserved disease. In large part, the low rate of diagnosis is driven by the systemic nature and the heterogeneous presentation of this disease. While peripheral neuropathy may be the most important symptom in many patients, others may present with cardiomyopathy and still others with symptoms like GI disease, leading to muscle wasting. By leveraging Ionis' deep knowledge of ATTR and AstraZeneca's significant commercial reach, we are uniquely positioned to recognize ATTR in undiagnosed patients and get them on treatment early in their disease progress.

In doing so, we are well-positioned to grow this largely untapped market. Our field team is built and deployed and already executing on our strategy to drive eplontersen growth through disease education and brand awareness. Additionally, we recently launched our unbranded disease education campaign called See the Patterns, aimed at accelerating diagnosis by helping HCP spot potential ATTR in patients with seemingly disparate symptoms. We also recently launched our healthcare professional website, aimed at driving disease and brand awareness among ATTR treaters. Additionally, we are investing in rich data sources with the potential to identify ATTR-PN patients and support the field team's effectiveness to improve the diagnosis and treatment rates. With its potential approval in about six weeks, we and AstraZeneca are ready to deliver eplontersen to patients with ATTR polyneuropathy.

As our launch gets underway, a key measure of our success will be in achieving our goal of eplontersen becoming the preferred choice for newly diagnosed patients with ATTR polyneuropathy. We expect olezarsen to be the first medicine we launch independently. We are developing olezarsen in two indications: the rare FCS indication and the broader SHTG indication, with potential first-mover advantage in both settings. Additionally, the Fast Track designation we have for FCS gives us the potential for an expedited review. And together with the extremely positive results we reported from the phase III BALANCE study in patients with FCS in hand, we are moving forward with our launch preparations with even greater pace. With the capabilities established for the eplontersen launch, we are in strong position to build upon this foundation and enable stronger launch readiness for FCS.

As we prepare for the follow-on SHTG indication, we plan to further scale these capabilities to realize the full potential of the product, pending phase III trial results and FDA approval. We expect our next independent launch to be with donidalorsen for the prophylactic treatment of HAE. This is an attractive market for us because it involves a fairly concentrated set of prescribers, allowing us to deliver donidalorsen to HAE patients with an efficiently sized field team. With the compelling phase II and OLE data we have seen to date, together with a once-monthly self-administration profile, we believe donidalorsen is positioned to be an important new prophylactic treatment for HAE patients once approved. I'm pleased to say that we are right where we should be in preparing for our first independent launches of olezarsen and donidalorsen.

Our commercial infrastructure is in place, and we are ready to begin delivering our medicines to people in need as they come to the market. This is a very exciting time for Ionis. I'm proud to be part of it, and I look forward to keeping you up to date as our next important steps unfold. Now, over to Richard.

Richard Geary (EVP and Chief Development Officer)

Thank you, Onaiza. We could not be more pleased with the performance of our pipeline. Eplontersen has continued to perform exceptionally well, demonstrating durable and sustained efficacy and safety through 85 weeks of treatment in patients with ATTR polyneuropathy. Just this morning, we presented new data at the European ATTR Amyloidosis Meeting that further reinforces these results, demonstrating improvements in measures of neuropathy, impairment, and quality of life that were seen in a substantial number of patients at 35 and 66 weeks and were sustained through the 85-week analysis. Benefit across secondary endpoints at 85 weeks showed improved neuropathy-specific and physical health-related patient quality of life, stabilized or improved ambulatory status, and stabilized nutritional status with eplontersen treatment. Last month at HFSA, we showed data demonstrating improvement in cardiac function and structure in a predefined cardiac subpopulation of polyneuropathy patients from the NEURO-TTRansform study.

The positive results from NEURO-TTRansform also support our confidence in the potential for eplontersen to benefit patients in the larger ATTR cardiomyopathy indication. With CARDIO-TTRansform fully enrolled, we remain on track for data as early as the first half of 2025. As a reminder, with over 1,400 patients, CARDIO-TTRansform is the largest study in this patient population to date, designed to generate the data physicians and payers want and need to understand the value eplontersen offers for patients and to enable the best possible treatment decisions for patients. Following eplontersen, olezarsen is the next drug we expect to bring to the market and is the first we expect to commercialize independently. In the BALANCE study, the 80 mg dose of olezarsen demonstrated statistically significant reductions in triglycerides, robust target engagement and a favorable safety and tolerability profile, consistent with the profile seen with our other glyco medicines.

In addition, olezarsen demonstrated unprecedented, substantial, and clinically meaningful reductions in acute pancreatitis attacks. This is remarkable because it's the first time a lipid-lowering therapy has ever achieved this result in a clinical trial setting. Based on the positive data we reported from the phase III BALANCE study, we believe that olezarsen is poised to become the standard of care for patients with FCS. Our next step will be to file for marketing approval in the U.S. and EU in the first half of next year, positioning olezarsen for its first potential approval in late 2024, assuming priority review in the U.S. In addition to our clinical development program for FCS, we also have an ongoing program for patients with severe hypertriglyceridemia or SHTG.

Phase III studies in SHTG patients are ongoing, and we expect those studies to read out in late 2024 or early 2025, depending on enrollment. Following closely behind olezarsen is our next wholly owned medicine, donidalorsen, to treat patients with hereditary angioedema. Despite several treatments already on the market, HAE continues to represent a significant unmet need. For example, in a study recently conducted by the Hereditary Angioedema Association of over 500 patients with HAE, only 13% of these patients reported having good control of their disease, with more than 85% reporting two or more attacks per year. Data reported from the ongoing phase II open-label extension study of donidalorsen show sustained and durable reductions in HAE attacks and favorable safety and tolerability over two years, and support donidalorsen's potential to address the unmet need.

We look forward to presenting a comprehensive look at the 2-year OLE data next week at the ACAAI conference. With enrollment complete in the phase III OASIS-HAE study, we remain on track for data in the first half of next year. From our robust late-stage pipeline, we look forward to updates from bepirovirsen and IONIS-FB-LRx. Next week at AASLD, GSK plans to present new data from the phase II-B [B together] study of bepirovirsen in combination with pegylated interferon. This weekend at Kidney Week, we plan to present new interim results from our ongoing phase II study of our Roche-partnered medicine, IONIS-FB-LRx, in patients with IgA nephropathy. We also made significant advances with our industry-leading neurology franchise this year.

Today, we have two approved breakthrough medicines for neurological disease on the market, SPINRAZA and QALSODY, and we have another 12 in clinical development and more than 10 new programs in preclinical development or lead optimization. Among our partner neurology programs, we recently completed enrollment in the phase I-II study of ION582 in patients with Angelman syndrome, putting us on track for data around the middle of next year. We were encouraged by the positive data our partner, Biogen, recently reported from the phase I-B and long-term extension studies of IONIS-MAPTRx in patients with early Alzheimer's disease. Data presented at the Clinical Trials on Alzheimer's Disease conference showed numerical improvements on multiple cognitive and functional scales and continued favorable safety and tolerability in this small, early-stage study.

Data published in JAMA Neurology showed a rapid, substantial, and sustained reduction in tau and phosphorylated tau in CSF, as well as reduced tau pathology on PET imaging with up to 100 weeks of IONIS-MAPTRx treatment. And we're particularly excited with the progress we're making in building and advancing our wholly owned neurology pipeline, which represents one of our highest priorities. As Brett mentioned, we advanced zilganersen into phase III development in patients with Alexander disease, a rare, debilitating pediatric leukodystrophy with no approved treatment. We're on track to advance ION717 into phase I-II first-in-human study in patients with prion disease before the end of the year. And following ION717, we expect to advance three more wholly owned neurological disease medicines into the clinic next year.

This has been an eventful year so far, and we're looking forward to several additional key events in the coming months, including the U.S. eplontersen approval, launch and additional regulatory filings and approvals outside the U.S., olezarsen regulatory filings in FCS, and donidalorsen phase III data. We will keep you updated on our progress on these events and more throughout the coming year. And with that, over to Beth.

Beth Hougen (SVP of Finance and CFO)

Thank you, Richard. Our year-to-date financial results keep us on track to achieve our 2023 financial guidance, while we continue to execute on our strategy to unlock next-level value. Revenue continued to be substantial and sustained, with revenues of $144 million and $463 million in the three and nine months ended September 30, 2023, reflecting a 10% decrease and a 6% increase, respectively, compared to the same periods last year, and driven by the timing of certain partner payments. As anticipated, our operating expenses and operating loss for the third quarter and year-to-date 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 $2.2 billion in cash and investments at the end of September, enabling us to continue investing in our strategic goals. Our commercial revenue from SPINRAZA royalties was $67 million and $179 million in the third quarter and year-to-date, respectively. Reflecting SPINRAZA's resilience against emerging competition in the U.S. and abroad, SPINRAZA's global sales in the third quarter demonstrated a low single-digit increase compared to last quarter and compared to the same quarter last year. As a result, our revenue from SPINRAZA royalties increased by 9% compared to last quarter and 8% compared to the same quarter last year. We earned R&D revenue of $60 million in the third quarter and $233 million year-to-date.

The significant R&D revenue we continue to generate reflects the value that Ionis' technology is creating as numerous partnered programs advance. In line with our goal to invest for revenue growth, our non-GAAP operating expenses increased in the third quarter and year-to-date compared to last year. With most of our ongoing phase III studies fully enrolled, our study costs increased as expected, which resulted in higher R&D expenses. And as we prepare to launch eplontersen, olezarsen, and donidalorsen, our SG&A expenses also increased modestly year-over-year. Our year-to-date results keep us on track to meet our 2023 financial guidance. We continue to project revenues of more than $575 million.

We expect our fourth quarter R&D revenue to be driven by the potential $50 million milestone payment from AstraZeneca for the U.S. approval of eplontersen, R&D revenue from continued development of eplontersen, and additional revenue from Biogen and from our recently expanded collaborations with Novartis and Roche. We project our 2023 non-GAAP operating expenses to come in at the higher end of our guidance, which is between $970 million and $995 million. Looking ahead, we expect to generate a substantial and sustained base of R&D revenue from multiple sources in 2024 as our partnered programs advance. We expect eplontersen will continue to be an important source of revenue in 2024. We have the potential to earn a milestone payment for an additional eplontersen approval outside the U.S.

We also expect to begin generating modest royalty revenue next year, with growth expected as the launch ramps up. We project our expenses to grow modestly next year, with our R&D expenses approaching steady state as our late-stage programs are fully enrolled, and our SG&A expenses to ramp up in line with the planned launches of eplontersen, olezarsen, and donidalorsen. We have a strong financial foundation, substantial recurring R&D revenues, plus substantial and sustainable royalty revenue that can continue to grow, and we expect to add new product revenue from our advancing and expanding wholly-owned pipeline. Together with our prolific technology, we believe we are on a path to successfully bring our medicines to patients and to unlock next-level value. With that, I'll turn the call back over to Brett.

Brett Monia (CEO)

Thanks, Beth. We are very proud of the remarkable progress we've made this year. We believe that the successes we've achieved so far this year position us to drive substantial value for patients, our shareholders, and all Ionis stakeholders. Strategically, we have arrived where we are today by being focused on a clear vision and by being focused on all our supporting strategic objectives necessary to achieve our vision. We've now established all of the functional capabilities we need to deliver a steady cadence of new and potentially transformational medicines to the market. We are advancing and growing our wholly-owned pipeline and have established Ionis as a leader in cardiovascular and neurology drug development. We continue to extend our leadership position in oligonucleotide therapeutics by expanding and diversifying our technology, further optimizing our capabilities for existing therapeutic areas and opening up new areas for drug discovery.

We continue to strengthen our financial foundation, providing the means to support all our strategic objectives. Today, with one of the most robust late-stage pipelines in the industry, with nine medicines in development for eleven indications, we're turning that promise into new medicines for patients in need. Not just one or two, but a steady and growing cadence of new transformational medicines over the mid and long term. In achieving this goal, we are positioned to drive great value for all Ionis stakeholders. With that, I'll now open the call 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 one on your touch-tone phone.

If you're 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. At this time, we'll pause momentarily to assemble our roster. The first question will come from Gary Nachman with Raymond James. Please go ahead.

Gary Nachman (Managing Director and Equity Research Analyst on BioPharma /Biotech)

Hi, thanks for taking the question. So on eplontersen for ATTR-PN, any additional updates regarding your interactions with the FDA, and how everything is progressing in front of the PDUFA? Have they requested any additional data and are label discussions progressing in the way you would like them to? And then just on the commercial plans, given the competitive dynamics in the space with Amvuttra and Onpattro, how will payers be viewing eplontersen? What's your work telling you there? Will all these drugs be covered on most formularies? And where is AstraZeneca on the hiring of the sales force? Just give us a sense of how big you think that'll be. Thanks.

Brett Monia (CEO)

Thank you, Gary. I'll take the first one and briefly give you an update on regulatory, and then I'll ask Onaiza to cover the second part of your question on competitive dynamics. So it's, it's, you know, we don't comment on ongoing regulatory discussions for drugs under review for potential approval. But what I can say with, with high confidence is that we're very pleased with the progress we're making with the FDA in bringing up eplontersen to an on-time potential approval on our PDUFA date on December twenty-second. So there's been really everything is, is moving on track with that.

I also want to remind you, everybody, that we are now under review with our filings accepted in Canada and in Europe, with potential approvals for those markets as well for next year for eplontersen and ATTR polyneuropathy. Onaiza?

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Yeah. Hi, Gary. Yeah, launch plans are really underway. I would say they're actually in place. We have hired all the necessary people for a very effective launch. The salespeople, as you know, is being led by AstraZeneca, are hired and deployed in market. They are in the field. They are working on disease and brand awareness. Really, given that this is a very growth market, identifying with different physician sets, the types of symptoms that ATTR-PN patients present with is very much underway. You've seen some of the campaigns on, you know, see the patterns. So they're out there, really, since the last month, in field. And we are just awaiting approval. PDUFA is December 22, and all things are in motion.

Our nurse case managers on the Ionis side are hired and have been trained, and since they're mostly post-approval, we would deploy them right after. And as you know, the field medical team has been in place for the last, you know, 18 months to two years. So, all signals are ready to go. From a payer perspective, I think we have a very strong payer strategy. We've done a lot of research with the majority of the payers in the U.S. We don't expect anything different than other kind of PN agents that have been, you know, priced on the analogs of rare disease pricing. Again, we believe this is a really active rare disease. We do not expect tons of beyond the normal prior authorization for a rare disease to get through.

We haven't seen much shift in the landscape here so far.

Gary Nachman (Managing Director and Equity Research Analyst on BioPharma /Biotech)

All right, great. Thank you. Oh.

Operator (participant)

The next question will come from Luca Issi with RBC Capital. Please go ahead.

Luca Issi (Senior Biotechnology Analyst)

Oh, great. Thanks so much for taking the questions. Maybe two quick one. One, on hepatitis B, what was your reaction to GSK in licensing the siRNA from Arrowhead and J&J? Given that they already had a silencing agent with you, why do you think they need a second one? And then maybe, circling back on the prior questions on TTR polyneuropathy and the PDUFA, any color on manufacturing? Has the tech transfer to AstraZeneca been successfully completed? Has the FDA inspected the facility that would provide the commercial supply? Just trying to understand if there is anything that keeps you up at night, ahead of the PDUFA. Thanks so much.

Brett Monia (CEO)

Thanks, Luca. So, you know, we have a very good relationship with GSK, so, we, you know, we're aware of what was coming, what was announced this week. The way to think about it is that, the acquisition of the RNAi molecule from Janssen really represents a double down, a triple down, if you will, on bepirovirsen. Bepirovirsen is the only treatment that has produced a meaningful percentage of patients achieving a functional cure, patients with HBV, chronic HBV. And in the phase II-B CLEAR study, what we demonstrated with GSK was about a 10% functional cure rate.

However, in patients with a lower HBV burden, like below 1,000 IUs per ml, I think per milliliter, that functional cure rate was well into the 20%+ range, which is really impressive. So the strategy that GSK has stated for bringing in the RNAi molecule, which has not shown functional cures, but what it has shown is reductions in HBV antigen levels to levels that a substantial percentage of patients could get below that 1,000 IU level, is to do a sequential treatment to reach even more patients, to achieve even greater percentage of functional cures by bringing patients down to a level maybe below 1,000, more patients below 1,000 IUs per ml, and then coming in with bepirovirsen.

So this is an added dimension to a very comprehensive clinical program for bepirovirsen to reach as many patients as possible and to achieve the highest percentage possible for functional cures for bepirovirsen. And it's also consistent with everything GSK has been saying, in which they will be exploring different combinations for bepirovirsen to maximize success on this market, which, as you know, is hundreds of millions of people suffering from chronic, chronic HBV. So, we're very pleased. We're very pleased about this new outcome for GSK, for bepirovirsen. And Beth, maybe you could talk a little bit about where we are with the on our launch preparations for commercial supply.

Beth Hougen (SVP of Finance and CFO)

Sure, absolutely. We are, we are all ready to go, just as we are on the commercial side, and the medical affairs side. All of the product, needed for launch has been manufactured. It was manufactured through the registration process, regulatory process, has been reviewed. It is ready to go. We just are waiting for a final label to do label and packaging and get product into channel, shortly after approval. And all of the tech transfer necessary from Ionis to AstraZeneca with the commercial manufacturer, the contract manufacturer, is done, and all of that has gone extremely well. So we are all systems ready to go.

Luca Issi (Senior Biotechnology Analyst)

Great. Thanks so much!

Operator (participant)

The next question will come from Yao Huang with Laidlow & Company. Please go ahead.

Speaker 19

Good morning, and thanks for taking the questions. I've got two quick ones here. The first one is for the SPINRAZA sales. I believe that will be ultimately announced by Biogen. But nevertheless, as you indicated that the slow growth quarter-over-quarter, should we believe that this is, again, consistent with the stabilization of their franchise in the larger SMA space? Then I have a quick follow-up.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

So, what I would say is, we're very pleased with the low single-digit growth in against last quarter and against the previous quarter, same quarter last year. We believe that demonstrates SPINRAZA's continued resiliency, even in the face of emerging competition. Beyond that, Yao, I really need to respect Biogen's earnings call next week, and I really can't go any further.

Speaker 19

Okay, great. That's helpful. And in terms of the JAMA publication regarding the eplontersen sustained benefits, how should we think about that to incorporate into the marketing strategy, particularly for untreated newly treated or untreated patients? And thanks.

Brett Monia (CEO)

The publication specifically? I mean, that's, that's gonna be a really effective tool.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Yeah.

Brett Monia (CEO)

Right, right, Onaiza?

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Yeah, I think with the promotional and regulatory kind of, you know, guidance, looking at the JAMA publication and where our promotional messages are headed, it's going to be highly supportive. The JAMA publication is also very consistent with the label that we expect, so that will allow for use by both the medical teams as well as the sales teams as well, and that's what we expect.

Brett Monia (CEO)

Yeah. So in other words, Yao, although our package that's under review at the FDA is based on the week 35 interim data that we reported last year, having this publication for week 66 and week 85 is very, very helpful from a marketing standpoint, and we expect to utilize that publication very effectively. I think that was the basis of your question.

Speaker 19

Okay, great. Thanks a lot, and congrats.

Operator (participant)

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

James Van Steenhuyse (Managing Director on Investments)

Hi, this is James on for Paul. Thanks for taking our question. Just one on olezarsen quickly. You know, I guess, hey, you know, as we get ready for the FCS launch, I guess, how are you thinking about pricing, just given that, you know, the higher trigs opportunity may be coming behind it and assuming there'll be different price points there? And I guess just as you've kind of put some of this commercial infrastructure in place for the FCS launch, how much, I guess, leverage, either from like a sales force or spend perspective, do you anticipate getting from this FCS infrastructure as you think about launching the higher trigs opportunity? Thanks so much.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Sure. So you know, we've done some extensive work with payers, to understand kind of this dual indication that we're going after, in prevalent and rare disease. Does that actually really make a shift in your pricing strategy? We know that once we, you know, once we have the more prevalent price, prevalent indication, the pricing will obviously be in line with good kind of cardiovascular premium price products. We see, really no indication in terms of, of thinking about this differently as a result of the two indications. If they were, two single indications and different molecules, we price the rare disease along rare disease pricing corridors and the broader indication along the corridors of a good, you know, cardiovascular premium price benchmark as well. So you should, you know, think about it that way.

I would say that the FCS account sales team will be calling on obviously a much smaller portion than the total universe of physicians you would call on for SHTG. It will be, you know, more focused on the lipidologist, but extend out a bit beyond that as well, for where we believe the FCS patient population is. We're doing a lot of work from our integrated data analysis and qualifying where those physicians are that actually have FCS patients. And then as we get into the broader indication, those sales teams will obviously stay on board, and we will extend the size of the sales team for the broader SHTG market to incorporate some of the other physician specialties that we believe will be very important for the uptake of that product.

James Van Steenhuyse (Managing Director on Investments)

Makes sense. Thank you.

Operator (participant)

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

Allison Bratzel (Equity Research Analyst)

Hi. Thanks for taking the question. So first, I guess I just wanted to ask on the anti-tau update last week for BIIB080. I know Biogen is responsible for development of the asset, but I'd still be curious just to get your thoughts on how that approach could fit into the Alzheimer's treatment paradigm. You know, be it in combo or monotherapy or what have you. And then hoping you could also just describe how that data maybe influences your confidence in the wholly owned neurology assets. And then just second, on a second front, just on the complement factor B program, you know, looking at that interim phase II data being presented at ASN in a couple of days.

Is there any update just on your view of the IgA nephropathy market, and potential opportunity in IgAN, just given the context of an evolving competitive landscape there? Thank you.

Brett Monia (CEO)

Thank you, Allison. So, the phase II study evaluating tau in patients with Alzheimer's disease is underway and enrolling, and it's a really quite a extensive study with more than 700 patients to be treated for well over a year, with the primary endpoint really being efficacy, improvement in cognition. And the purpose of that phase II study is to really make a decision to set up in support of a path forward to go to phase III development for a pivotal study. And in this study, we are exploring different dose levels as well as different dose regimens, including twice-a-year dosing.

That's based on the data that you're referring to, which is the phase I/II study that is now published in JAMA Neurology and was presented at CTAD last week and is incredibly supportive of that phase II study and the tau program overall. We and our partner, Biogen, could not be more thrilled with the data that has, was generated from the long-term extension of the phase I/II study in patients with Alzheimer's disease. You know, tau is considered by [inaudible] essentially all the experts in the field as being the most important target for Alzheimer's disease, based on you know, the neurofibrillary tangles that appear just before cognition impairment occurs. It's downstream of beta amyloid, which, which can be present long before cognition deficits occur.

But it's difficult to drug target because what matters most is intracellular tau, and that, of course, is the neurofibrillary tangles and neurodegeneration. What we've shown for the first time is not only can we substantially lower all forms of tau and CSF, we can actually reverse tau pathology in the long-term extension data in patients by PET imaging. But now we also have, from the long-term extension data, actually, you know, signs, trends that patients are actually improving in cognition. So we couldn't be more thrilled about the data, and this has built on our confidence from the CELIA phase II study that's underway, that I referred to earlier.

As far as combination, monotherapy, that kind of thing, that's, you know, this is the start of a, of a development program for a, a drug that's leading the way to target tau. The phase two study is intended to assess the, the benefits of tau on cognition as a monotherapy. That does not preclude future studies looking at different combinations as this field evolves, whether it be with a beta amyloid treatment in combination with a tau drug and so on. That will require further development and, but it can make sense. We can see how those two mechanisms can actually, you know, complement each other, maybe even synergize with each other. So all that is on the table. But right now, Biogen and Ionis are focused on the phase two study to bring that, forward as quickly as possible.

As far as confidence in neuro, this is just another piece of data, evidence, validation of our leading neurology platform. I would start with SPINRAZA and QALSODY, two approved breakthrough treatments for neurodegenerative diseases. Using the same platform as tau, using the same platform as our Angelman’s program, using the same platform as all of our 12 drugs that are currently in clinical development for all kinds of different neurodegenerative, neurodevelopmental disorders. As Richard highlighted in his earlier remarks, we expect to start a prion program, wholly owned program, by the end of this year, and three more next year that are wholly-owned neurology programs for diseases that have a high unmet medical need for both rare and large indications.

So, you know, it just adds to our confidence in our leading neurology platform. As far as IgAN, IONIS-FB-LRx to be presented at Kidney Week coming up, this will be a, you know, an additional data cut that was presented at Kidney Week last year in patients with IgA nephropathy, just showing, you know, more data, more patients, longer treatment, showing reductions in proteinuria in that study. As far as the competitive landscape, it's crowded. There's no question, and we're glad Roche is taking the lead on this because they have a tremendous global might, global strength, global presence to, you know, if the drug is successful to bring it to as many patients as possible.

But, you know, I really think that that's to be determined once we see the phase III data and to see how this positions itself. But really, we couldn't be more pleased to have, you know, when you're in a competitive market like this with a high unmet need, it's great to have the global strength of a partner like Roche.

Operator (participant)

The next question will come from Yanan Zhu with Wells Fargo. Wells Fargo, please go ahead.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Great. Thanks for taking the questions. Three questions, if I may. On eplontersen, what launch metrics would you provide so that we can have an understanding of how the drug is performing in the market in the early launch quarters? On the tau program, can you talk about how you see the feasibility of the intrathecal route of an administration in this very large indication? Lastly, on the Angelman syndrome program, following the recent updated data from Ultragenyx, any insights you could share regarding how your program could be differentiated from that program as we look forward to data in mid-2024? Thank you.

Brett Monia (CEO)

Thanks, Yanan. Maybe we'll start with launch metrics for eplontersen.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Sure. So, Yanan, I think, you know, the way to think about this market, as I said, is it's a growth market, and we have a lot of patients to get diagnosed and get treated on eplontersen. And, and I think the phenomenon that you might be seeing now, with switches is very temporary, and I think we will have, they will have worked through that. We're squarely focused on growth, and growth mindset on newly diagnosed patients. As such, our launch success will be measured on getting eplontersen as the preferred choice for newly diagnosed patients new to silencers.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Got it. Thank you.

Brett Monia (CEO)

So, you know, next year, we'll be providing some metrics, and we'll see how, you know, with that. So stay tuned for that, Yanan. Regarding the tau program. So Alzheimer's disease, despite the, you know, the really remarkable progress that's been made recently on delivering medicines to the market, to patients for AD, this is still a very severe neurodegenerative disease with a very high unmet medical need. And, like, I touched on earlier, we think tau is the best target for treating this disease broadly. And with that comes the need for treatments, and we don't, we believe the intrathecal delivery will be well accepted if the drug is efficacious and as efficacious as we expect it to be.

With that said, the tau program is an example of the great progress we're making in further optimizing and advancing our neuro, neurological disease drug discovery capabilities with through medicinal chemistry and just experience. In the tau program, we actually have a treatment arm that we expect will be efficacious with twice-a-year dosing. So we've moved from monthly to every three months for many programs, and now we're even moving some programs to twice per year dosing, intrathecal. That is part of the tau program that's in phase II development today. In addition, as we highlighted at Innovation Day a few weeks ago, we're making great progress on our research organization in overcoming the blood-brain barrier as an obstacle for delivery of our treatments, our drugs, for using subcutaneous or intravenous administration.

And, you know, obviously, programs like tau are on our radar, as are other programs. So, we also think that that could be in the future for a large population, chronic disease indication like Alzheimer's disease. So no promises there yet, but we're very pleased with the progress we're making there. Regarding Angelman syndrome, prefer not to comment on other people's programs, other companies' programs. What I will say is that, we are fully enrolled in our Angelman's program. We've actually over-enrolled the study a bit. We expect data midyear next year. We expect data on, you know, efficacy as well as, of course, safety and biomarker data from that trial, and that the trial is designed to set up a potential phase III decision based on all that.

And then what I'll also say is that, it's kind of related to the earlier question that I got, that I tried to address, which is we have a vast amount of experience with our platform in neurological diseases. Thousands and thousands and thousands of patients have been treated for very extended periods of time with our chemical platform, with our know-how, with everything. And we think that that bodes very well for the Angelman patient community because they're gonna be able to take it. They're gonna benefit from the vast experience that we have at Ionis, with delivering neuro disease drugs for the treatment of severe neurological diseases like Angelman syndrome. So stay tuned for all that. We're very much looking forward to the data next year.

Yanan Zhu (Senior Analyst of Biotechnology Equity Research)

Great. Very helpful. Thank you.

Operator (participant)

The next question will come from Debjit Chattopadhyay with Guggenheim. Please go ahead.

Speaker 18

Hey, good morning, team. This is Robert on for Debjit. Thanks for taking our questions. Two from us this morning. First, could you share any pricing thoughts on eplontersen? Specifically, would you anticipate launch price in line with current PN treatments on the high end or CM treatments on the low end? And for the Alexander program, what patient enrollment would you hope to see in the phase III, and subsequently, when would you potentially anticipate a phase III readout based on those timelines? Thank you.

Brett Monia (CEO)

Would you want to take the launch price, PN, CM?

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

Yeah, so Robert, I think that, you know, we would expect that again, the two indications are both rare disease indications, but they are priced differently if you looked at analogs in the marketplace. You know, based on all the work that we've done, we don't believe there is any reason to kind of shift from that in terms of our pricing strategy. So, I would expect that, as the price is set by AZ, that we would expect polyneuropathy to be priced according to the analogs and benchmarks of other polyneuropathy products.

Brett Monia (CEO)

Regarding our newest phase III program, our Alexander disease program, you know, sometimes, not sometimes, but most of the time, we're enrolling rare disease indications can be challenging because they are rare. And finding patients to get into your study obviously can present challenges. But what's unique about our phase III program for Alexander disease is that we designed a seamless phase I through III design, such that it's all the same sites, it's all the same. The protocol's already been baked and everything like that. And after our phase II results, which was, you know, when we reviewed it, we had two decisions to make, really. One was to dose escalate or to move into phase III development.

During that review process, when you go through all the data, you're collecting the data, you're cleaning the data, and before we actually review the data, enrollment is put on pause, right? Because we don't know what the next step will be for the program. What happened in this situation is that patients were on the sideline waiting to get into either the dose escalation phase of the next step or the phase III part of the program. So with that said, we think actually enrollment will go well for the Alexander program because we have patients on the sideline waiting to qualify to enter our phase III program now that we've activated it. So, yeah, enrollment is going, is ongoing, and we expect data in 2025.

Operator (participant)

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

Brendan Smith (VP of Biotechnology Equity Research)

Hi, guys. This is Brendan on for Yaron. Thanks so much for taking the question. Just a couple quick ones from us. Just another one on MAPT, excuse me. Sorry if I missed this, but just wondering if there's any plan for any interim look at the phase II study or any possibility of any additional data updates there before the full phase II readout, assuming maybe 2026 for the full phase II. So just wondering if we can expect anything new there in the meantime. And then quickly on donidalorsen. Obviously, you have a few different studies ongoing there that I think you're planning to incorporate into one filing, maybe including the switching study, et cetera.

Can you just maybe give us a sense of timing for data beyond the top-line readout in the first half of next year? Maybe how long thereafter you think you'd need to collect and analyze data? And if you're thinking to maybe file in the second half of next year, if that's fair to assume. Thanks very much.

Brett Monia (CEO)

Sure. So, there's no plan for an interim look in the phase II study for the tau program at this time. So that's a short answer, quick answer. It's very important to get this study right and get the richest data set as you possibly can. And as I mentioned earlier, this is what we're looking for here is actually evidence to support a phase III decision that we're improving cognition impairment. So that's gonna take time. That study is over a year long, as I mentioned earlier, more than 700 patients. So no interim look at this time. For donidalorsen, I don't think we've said that we're expecting to include switch data in the filing for the NDA.

Really, the phase III data, along with all the other data that we've generated from phase I and phase II, will be sufficient to support a filing, assuming a positive outcome. With that said, we expect switch data from our switch study, which, as a reminder, to our knowledge, we're the only sponsor that has actually conducted a true switch study in which patients that are on an existing treatment therapy, prophylactic treatment, are switched over to our investigational medicine, donidalorsen, to an investigational medicine, which in our case is donidalorsen.

And then we assess everything, including, you know, protection against HAE attacks, on identifying, you know, demonstrating that there's no gaps between one treatment switching to another treatment, tolerability, sustained efficacy, and actually be able to generate the information that prescribers are going to want to have to understand: How do I do this? Okay, I want to switch to your drug. I want my patient to go on your drug, but how should I do this? And that's really the, that's really the goals of the switch study. We expect that data to be out next year, or at least a cut into that data next year. That's going to really allow us to actually demonstrate the value of donidalorsen in this market, which is a switch market.

But we have no plans to include that at this time, to my knowledge, in the NDA filing.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

If we believe that the publication will be more than sufficient to be consistent with label, to be used actively by our sales teams in promotion. And to the extent, if it's all ready alongside of it, we could actually add it in, but it's really not a requirement, nor do we think it's really necessary for commercial uptake. We like it in the publication. That's what we're really looking for as our strategy going forward.

Brendan Smith (VP of Biotechnology Equity Research)

All right, great. Thanks very much.

Operator (participant)

The next question will come from Jessica Fye with JP Morgan. Please go ahead.

Jessica Fye (Managing Director and Equity Research Analyst on Biotechnology)

Hey, guys. Good afternoon. Thanks for taking my questions. Can you remind me of your expectations around whether, in addition to a clear impact on triglycerides, whether you believe you could show an impact on pancreatitis for olezarsen in SHTG? And then second, and forgive me if you stated this, but for CARDIO-TTRansform, I believe the follow-up is up to 140 weeks. I just wanted to clarify, is there a minimum planned follow-up for those who do not reach 140 weeks? I noticed some of the endpoints are assessed at week, I think, 121. Is that the minimum, assuming the study is not stopped early? Thanks.

Brett Monia (CEO)

Eugene, you want to take those?

Eugene Schneider (EVP and Chief Clinical Development Officer)

Sure. Happy to. Maybe I'll start with the last one. So as you said, of course, there is excruciating level of detail on the statistical analysis plan. But just to summarize it, the exposure in the study is up to 140 weeks, which means that in some patients, if the study reads out early, the exposure will be less than that. We've defined the minimal exposure and the time points, specific time points, for those early looks in our SAP, and I don't think that we've come out and included specific timelines on those other than sort of the general statement about early opportunity for closing the study earlier based on some specific conditions being met. And then.

Jessica Fye (Managing Director and Equity Research Analyst on Biotechnology)

[crosstalk] I was asking more.

Onaiza Cadoret (Chief Global Product Strategy and Operation Officer)

In the event you don't stop the study early, what the minimum would be.

Eugene Schneider (EVP and Chief Clinical Development Officer)

Well, if we don't stop the study early, we go, all patients will be treated for 140 weeks. That's the double-blind period.

Jessica Fye (Managing Director and Equity Research Analyst on Biotechnology)

Okay.

Brett Monia (CEO)

Then, likelihood of achieving AP in SHTG.

Eugene Schneider (EVP and Chief Clinical Development Officer)

Yeah. So SHTG, again, it's a very different population from FCS in terms of risk for AP events. Having said that, again, the program that we designed, the two very large studies, certainly we believe will have an opportunity to show an effect. And what we are also going to be looking at is combination of those two studies. So looking at sort of integrated analysis of efficacy, combining those two large studies, which together amount to about almost 1,000 patients. So we're fairly confident, of course, today, we don't know what the data will show.

What we can say is that we were extremely pleased with the effect on AP events in our FCS population, so we do believe that the thesis is very strong, but we need to wait until the data read out.

Brett Monia (CEO)

Yep.

Operator (participant)

The next question will come from Kostas Biliouris with BMO Capital Markets. Please go ahead.

Kostas Biliouris (Director and Equity Analyst in Biotechnology and Healthcare)

Hi, everyone. Thanks for taking our question. One quick question from us on ATTR. This morning, Intellia presented data from the literature demonstrating that in addition to the percentage of TTR reduction, the absolute serum TTR levels after treatment are also very important, as they can contribute to the ongoing fibrin formation, and they actually have an impact on survival. That said, I'm wondering whether you have any thoughts around that, given that most of the discussions in this space focus on the percentage of TTR reduction rather than the absolute levels of TTR post-treatment. Thank you.

Brett Monia (CEO)

Thanks, Kostas. Not a lot of, you know, thoughts on gene editing efforts in the TTR space. I mean, the progress that they're making, you know, is steady. Percent reductions in TTR are absolutely important for efficacy. I don't think there's a, I think we've known for a long time that there's not a threshold effect, if that's your question, that there's a specific magnitude threshold by which if you lower TTR, that you'll achieve benefit on neuropathy or cardiomyopathy or whatever. But that it's actually individualized per patient, and percent reductions is very important. And we're very pleased with the mid-80% mean reductions that we've achieved in the NEURO-TTRansform study for eplontersen in polyneuropathy patients, mid-85% range.

As you know, we've actually a substantial number of patients actually improved in both mNIS+7 and in quality of life. So I don't know what else to say about those other programs, except that they have a long way to go. You know, cardiomyopathy indications are going to require an outcome trial, in our view, to not just be approvable, but to actually compete. And it's going to take a long time to get there. And it's a new platform that you never know what'll come up. So I don't know what else to say about it other than that, Kostas, but we love our program, and we're very much ahead.

Kostas Biliouris (Director and Equity Analyst in Biotechnology and Healthcare)

Thank you very much.

Operator (participant)

The next question will come from Joseph Stringer with Needham and Company. Please go ahead.

Joseph Stringer (Managing Director)

Hi, thanks for taking our question. Just a quick one on the phase two GOLDEN trial and geographic atrophy. When can we expect top-line data, and given some of the competitor data that's out there, can you handicap expectations on what a successful phase two outcome looks like? And if the results are sufficiently positive, what would be the next steps in the program collaboration with Roche?

Brett Monia (CEO)

You want to take that, Richard?

Richard Geary (EVP and Chief Development Officer)

Yeah, I'll take a stab at it. I think, of course, we want a positive trial on geographic atrophy and comparable, if not better, results than have been presented by other competitors. So that's the goal. We have no insight into, you know, what that is today, but the data will be out next year, second half.

Brett Monia (CEO)

Yeah. So, second half, as Richard said, second half of next year. What I can add to that, Joey, is that, you know, we also had an interim look in this phase II study that allowed us to select the doses to complete this study, right? We started with a number of doses, and then whittled those down to two doses to complete the GOLDEN phase II study, bring it to the finish line. Seeing excellent tolerability. We're seeing profound reductions in factor B and in downstream effects like split products, exactly where we expect to be. So we're getting great target engagement. We're not seeing any risk associated with that target engagement by blocking the alternative complement pathway. It's going great.

What we expect to see is, what we hope to see is, you know, slowing down of lesion formation and improvement in visual acuity. I mean, these are the outcomes that we're expecting to support a decision whether to go to phase III, or not. As far as competitive landscape, this is a subQ once per month drug, which could use an auto-injector once it got to the market, if it gets there. Simple at-home in auto-injector like eplontersen, whereas the drugs that are under review or have recently been approved are intravitreal, and they have side effects, as you well know.

So I think, although there's been progress made in GA, I think patients are desperately waiting for a drug that's not so invasive and simple and convenient, like a subQ at-home administration.

Joseph Stringer (Managing Director)

Great. Thank you for taking our questions.

Operator (participant)

The next question will come from Myles Minter with William Blair. Please go ahead.

Myles Minter (Biotech Equity Research Analyst)

Hey, I just had a question on ION904. I think you've got an upcoming presentation at American Heart Association. Just wondering whether we should be thinking about similar AGT knockdowns to the previous like molecule and just more infrequent dosing, or is there potential to get more than that sort of 75% that we're seeing with that molecule? Thanks very much.

Brett Monia (CEO)

You got it, Miles. So, our presentation on our AGT program at AHA will really focus on, you know, the dose-dependent reductions in AGT that, you know, we sought to achieve in the phase II study. This is a molecule that is being dosed monthly. Our earlier generation molecule that you mentioned is, was weekly. And we expect to see greater reductions than our earlier generation molecule because it's a more advanced chemistry. So that's what we're seeing.

Myles Minter (Biotech Equity Research Analyst)

Cool. Thanks for the question.

Operator (participant)

The last question will come from David Lebowitz with Citi. Please go ahead.

David Lebowitz (Senior Research Analyst in Biotechnology)

Thank you very much for taking my question. With respect to olezarsen, given the recent pivotal data, as you look forward to severe hypertriglyceridemia, how, I know that you achieved benefits with respect to pancreatitis, you achieved the reductions, but given dynamics and differences in that population, how easy do you think it's going to be to show a pancreatitis benefit?

Brett Monia (CEO)

That's a great question, David, and it's a question that our answer today is a lot different than it would have been earlier this year. The FCS data, you know, we, in our wildest dreams, we hoped to see the AP reductions that we saw in FCS. And those wildest dreams turned into reality. So, it's, you know. And as we mentioned in our remarks earlier, you know, we couldn't have been more pleased, and this is the first time anyone has demonstrated that lowering a lipid, like triglycerides, can actually result in positive outcome in AP. My point is that our confidence has grown because the efficacy was so remarkable on reduction in AP events.

That lends confidence to the SHTG population, which although it's not a genetic form of severely elevated triglycerides, at least no known genetic causes, it's not a monogenic disease like FCS. These patients still suffer from highly elevated triglycerides, much like FCS patients. Sure, some of those patients could be in the above 500 range to a 1,000 range, but many, many of these patients are in the multiple thousands, or at least above 1,000, which puts them at very high risk for AP. So, I think we're gonna get AP events in the phase III SHTG study and based on the effect size or the effect that we saw with olezarsen in FCS, our confidence has grown, but we have to see that.

Even and despite the fact that the number of AP events per patient may be less in SHTG versus FCS, so it's such a bigger study. It's a much bigger study, so we're gonna have much more data that we're gonna collect. And as Eugene said, we have the ability to combine two phase III studies, CORE and CORE2, to really look at overall the impact of olezarsen on AP events in SHTG, so.

David Lebowitz (Senior Research Analyst in Biotechnology)

Thanks so much for taking my question.

Brett Monia (CEO)

Thank you, David. And thanks, everybody, for joining us today and who, everyone who's participated in our call. We really are proud of all the progress we've made this year, and we [know,] we believe that the future has never been brighter, here at Ionis. And we plan to continue our momentum by delivering on additional key commercial updates, pipeline updates, technology updates, objectives, as we go forward. And we very much look forward to it. But until then, thank you again, and everybody have a great day.