Ionis Pharmaceuticals, Inc.

morning and welcome to the Ionis Pharmaceuticals first quarter 2020 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 Walks, Vice President, Investor Relations, to lead the call off. Please begin.

Thank you, Alyssa. Before we begin, I encourage everyone to go to the investor section of the Ionis website to find the press release and related financial tables. including a reconciliation of the GAAP and non-GAAP financial measures that we will discuss today. 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 our discussion today. With me on today's call are Brett Monia, Chief Executive Officer, Beth Haugen, Chief Financial Officer, and Richard Geary, Executive Vice President of Development. Additionally, Vanessa Catteray, Chief Corporate Development and Commercial Officer, and Eric Swayze, Executive Vice President of Research will join us for Q&A. I would like to draw your attention to slide three, which contains our forward-looking language statement. We'll be making forward-looking statements which 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 discussed in our SEC filings for additional detail. And with that, I'll turn the call over to Brett.

Thanks, Wade. Good morning and thank you for joining us on today's call. Our strong performance in the first quarter reflects the sustainability of our business and unwavering commitment of our team. Ionis was established to deliver transformational medicines to patients in need, which remains the foundation for everything we do. I'm proud of our dedicated employees who are going above and beyond to serve the patients who depend on our medicines. Because of the dedication of our organization, we have continued executing on our goals and have already achieved many successes across our business while effectively managing our response to the pandemic. We are approaching the rest of 2020 from a position of strength given our operational momentum and strong balance sheet. We remain on track to achieve our goals of advancing our late stage pipeline towards potential near term approvals, advancing our Iona's own pipeline broadening the reach of our technology and building our commercial capabilities. Moreover, we are reaffirming our financial guidance for this year. Now to briefly recap our recent achievements, we are pleased with the continued growth of our commercial medicine. Spenraza's strong performance continued with growth in global markets despite some impact in new patient starts and maintenance dosing from COVID-19. And both Tecseti and Wayliver maintain consistent quarterly growth with new country launches underway. Our pipeline has also continued to deliver many important successes. Enrollment in the phase three generation HD1 study of Tominersen in patients with Huntington's disease is now complete. While there's still much to do to bring this study to its planned completion, we're now one very important step closer to providing a treatment for people living with this devastating disease. The phase three program For Axia Apo little a, LRX continues to advance. Importantly, this medicine recently received fast-track designation in the U.S., reflecting the significant unmet need that exists for the millions of patients with Lp little a-driven cardiovascular disease with no approved treatment options. Additionally, earlier this year, we in Axia reported positive top-line results from Phase II proof-of-concept studies of AXIA APOC3-LRX and AXIA angiopoietin-like 3-LRX, which we will now refer to as rupinorsin. We plan to present full data from both studies later this year. We and our partners have over 40 clinical studies underway at sites around the world. While some of our studies have experienced limited disruptions, primarily in countries most impacted by COVID-19, we remain confident that the mitigation strategies we deployed early in the pandemic should minimize the impact to our clinical studies and business operations. Looking ahead, we are continuing to invest in our strategic priorities and remain on track to achieve our 2020 objectives. We at Nexia expect to initiate the Phase III study of APOC3-LRX in patients with SDS, bringing us to a total of six Phase III studies with five medicines. We're on track to refile the MDA for roid liver in the U.S., and we plan to report additional clinical proof of concept results from several programs this year. We are well positioned to achieve our goal of delivering 10 or more NDAs through 2025. I'll now turn the call over to Beth to review our financial performance, followed by Richard, who will discuss our pipeline progress, and then I'll open up the call for questions after some brief closing remarks. And now to you, Beth.

Thank you, Brett. We entered the COVID-19 pandemic in a position of substantial financial strength. Our first quarter financial results were in line with our projections, enabling us to reaffirm our 2020 financial guidance, including ending this year meaningfully profitable. During the first quarter, we earned revenue from multiple sources and continued to invest in our strategic priorities. Importantly, we remain well capitalized with $2.4 billion of cash and investments at the end of March. Over the last several years, we have consistently strengthened our financial position and constructed a balance sheet that is sustainable and will enable us to achieve our near and longer-term goals. Moreover, the prudent debt refinancing we undertook late last year resulted in a favorable debt maturity schedule. while substantially reducing our cash interest expense and potential future dilution. Our commercial revenue increased nearly 25% over the first quarter of 2019, of which Spinraza was the largest component. On Spinraza's strong first quarter performance, we earned $66 million of royalty revenue, an increase of approximately 10% compared to the same period last year. At the end of March, there were nearly 11,000 patients on Spinraza treatment worldwide. In the U.S., growth was driven primarily by adult patients initiating Spinraza treatment. Outside the U.S., growth was reported in all major regions. Importantly, because of the significant number of untreated patients in established and emerging markets, we in Biogen continue to see potential for further growth. Product sales of Texetti and Wayne Libra also continued to grow in the first quarter, more than doubling compared to Q1 2019. Today, Texetti is commercially available in 12 countries. In the U.S., over 1,800 physicians are now using Axia's genetic testing program, with a growing number of patients being tested and diagnosed with HATTR. Many physicians and patients are choosing Texetti due to its subcutaneous at-home administration, which is particularly attractive in the current COVID-19 environment. Additionally, Axia's market access efforts have continued to translate into broad tech study coverage, including long-term coverage secured for 75% of U.S. patients with commercial insurance. Axia has made progress expanding tech study access outside the U.S., including in Southern Europe. This is important because of the large endemic TTR amyloidosis patient population throughout this region. AXSIA has also made progress in obtaining pricing and reimbursement in additional countries, most recently in Spain and Austria. In Latin America, PTC Therapeutics is working to secure pricing in Brazil and expand tech study access in that region. We anticipate that expansion into new countries will help drive tech study growth this year. Now turning to Waylibera. Waylibera is now on the market in Austria, Germany, and in France through the ATU, a reimbursed early access program. This year, Axia plans to launch in additional EU countries, and PTC Therapeutics is working towards their goal of filing for marketing authorization in Brazil this year. Axia has a strong foundation in place for Texedi and WeLibra, which we believe supports growth as both medicines expand into new markets and broader access is achieved this year. We do not rely on a single product or partner for our revenue. The fact that we generate revenue from multiple sources is one of our many strengths and one that is particularly valuable during these uncertain times. In addition to revenue from our three commercial medicines, in Q1, we earned $49 million of revenue from numerous partnered medicines as they advance. We earned more than $25 million in R&D revenue for advancing medicines within our neurological disease franchise, including Ionis MAP-TRX for Alzheimer's disease and several other programs under our Biogen Collaborations. and we earned $15 million in R&D revenue from our cardiometabolic franchise. This included a $10 million milestone payment we earned when AstraZeneca advanced ION532 for the treatment of kidney disease. As we expected, Q1 R&D revenue was lower than the same period last year, given the $150 million we earned from Novartis when they licensed Axia APOA-LRX last year. We expect growth in revenue this year to be driven by continued significant commercial revenue and R&D revenues from numerous programs. Our first quarter non-GAAP operating expenses increased nearly 20% to $153 million compared to the same period last year. This increase is driven by our investments in the global launches of PICCETI and WayLibra, the Phase III program for Exia, TTR, Leica, RX, and our Ionis-owned pipeline. As the year goes on, we also expect to invest in technologies that could broaden the reach of our technology, as we did late last year when we made strategic investments in complementary technology. Our operating expenses in Q1 were lower than the fourth quarter of last year, principally because of these investments. These types of investments are an important objective for us this year and, as such, are included in our full-year operating expense guidance. With these results, we ended the first quarter nearing break-even with a net loss of $15 million on a non-GAAP basis. Our first quarter results and projections for the rest of this year enable us to reaffirm our 2020 financial guidance. including revenues in excess of $700 million and meaningful profitability. We project Q2 will be generally in line with Q1, with revenues increasing in Q3 and Q4. We also expect our non-GAAP operating expenses to increase as the year progresses, in line with our guidance. Looking ahead to the remainder of 2020, We remain well capitalized with a strong balance sheet and $2.4 billion in cash and investments. Enabled by our financial strength, we have the resources to execute on our near and longer-term strategic priorities, even in the challenging COVID-19 pandemic environment. And with that, I'll turn the call over to Richard to provide an update on our pipeline.

Thank you, Beth. While managing the challenges presented by COVID-19, we have continued to achieve significant advancements across our pipeline of over 40 medicines in development. As mentioned previously, Roche completed enrollment in the global generation HD1 phase three study for tomonersen, our medicine in development for the treatment of Huntington's disease. The rapid enrollment in this study reflects the profound commitment of Huntington's disease patients and caregivers to help us find an effective treatment for this devastating disease. We are especially pleased that Roche recently confirmed that this program remains on track with the potential for data in 2022. Biogen continued to advance clinical studies with two of our medicines addressing two genetic forms of ALS. The phase three study of Dofersen inside one ALS and the Phase II study of Iona C9RX in C9ALS. Iona C9RX was recently granted fast-track designation in the U.S. In addition to enabling an expedited regulatory path, fast-track designation underscores the substantial benefit this medicine may deliver to these patients with the most common inherited form of ALS who have no approved therapeutic option. We in Biogen have also expanded our ALS franchise to include ION541 for the treatment of patients with sporadic ALS. On track to enter the clinic later this year, we're particularly excited about this medicine, our first medicine to enter development addressing the vast majority of patients with ALS. Turning our attention to Spinraza, the body of evidence supporting the durable efficacy and well-established safety profile of Spinraza, also continues to grow. The first patient was treated in DEVOT phase 2-3 study with a higher dose of Spinraza. Based on the well-validated safety profile of Spinraza, this study has the potential to demonstrate even greater efficacy in SMA patients of all ages. And new data from an independent study published in Lancet Neurology demonstrated that teen and adult patients treated with Spinaraza for 14 months achieved clinically meaningful improvements in Hammersmith scores with a continued favorable safety profile. Also during the first quarter, we and our partners initiated phase two proof of concept studies for three medicines addressing a diverse range of neurological and rare diseases, including hereditary angioedema, beta thalassemia, and centronuclear myopathy. Additionally, we're particularly excited for the programs in our growing Iona's own neurological disease pipeline, including our programs for Alexander, Pafora, and Kryon disease, which continue to move closer to their first clinical trials. Our cardiometabolic pipeline continues to be a significant area of focus for us, addressing diseases ranging from rare to very large, and including both partner and ionosome medicines. Axia Apolytla LRX was granted fast-track designation, underscoring the significant value of this medicine. It may bring to millions of patients worldwide with established LPA-driven cardiovascular disease who have no effective therapeutic options. Importantly, the Phase III Horizon Cardiovascular Outcome Study of Axia Apolytla LRX is progressing with our partner Novartis. And as of today, Novartis expects no significant impact from COVID-19 on study timelines. And earlier this year, we reported positive top-line results from Phase II proof-of-concept studies of Excia ApoC3 LRX and Buprenorphine. Both medicines, which are part of our growing and advancing Leica pipeline, achieving their primary endpoints demonstrating robust triglyceride lowering and substantial reductions in additional key cardiovascular risk factors with favorable safety and tolerability profiles. And this year, we look forward to presenting the full data from these studies at a medical conference or other venue. We also advance new medicines into Phase I development, addressing very broad cardiometabolic diseases, including ION532, targeting APOL1 for the treatment of kidney disease, and our Ionis-owned LycaMedicine Ion224 targeting DGAT2 for the treatment of NASH. Enrollment is progressing in the phase three studies of Exia TTR-LRX, NeuroT Transform in patients with TTR polyneuropathy, and CardioT Transform in patients with TTR cardiomyopathy. In response to COVID-19, we briefly paused new patient enrollment in both studies in an effort to protect these patients, which are at high risk for COVID-19-related complications. It was also important for us to preserve data integrity at this early stage in the studies. However, enrollment has resumed in both studies, as sites have come back online, as local and regional restrictions have eased. Importantly, we do not expect this brief pause to significantly impact the timelines of these studies. COVID-19 presented us with a number of challenges, which we believe we are managing well. We are continuing to monitor each program and are ready to respond if needed as the pandemic evolves. Our dedicated team has successfully adapted to the current environment, enabling us to continue advancing our pipeline and remain on track to achieve our top 2020 priorities. We plan to initiate a Phase III study of Excia ApoC3 LRX in patients with FCS We remain on track to refile the NDA for Weylidra in the US this year. And we continue to expect clinical proof of concept data for at least four more programs this year. And we still are planning to add another five or more new medicines to our pipeline. And with that, I'll turn the call back over to Brett to close this portion of the call.

Thanks, Richard. Today, Ionis is stronger than ever. We are reaffirming our 2020 financial guidance and we remain well capitalized with a strong balance sheet. Our strength and sustainability are enabling us to continue delivering value to patients and shareholders while effectively managing the challenges presented by the COVID-19 pandemic. Already this year, we continued to deliver strong performance from our commercial medicines. We have made significant progress in advancing all of our Phase III programs, all of which remain on track. Preparations are well underway to initiate another Phase III program this year and to refile Waylibera for approval in the U.S. We reported positive data from two Phase II LICA medicines. We initiated numerous Phase I and Phase II studies, and we're on track to move five or more new programs into development this year. None of this would be possible without the dedication, resilience, and strength of our employees. I am incredibly proud of how the Iona's team has responded to overcome the challenges posed by COVID-19. Because of our employees, we're continuing to execute effectively on our mission to deliver transformational medicines to patients in need. As we continue to invest in our strategic priorities, including building and advancing the Ionis-owned pipeline and developing our commercial capabilities, we will remain on track to achieve our short and longer-term strategic goals, including delivering new drug applications for 10 or more of our medicines through 2025. We have tremendous momentum as we look towards the rest of this year and beyond. I'm excited about the future that we're creating and look forward to reporting on additional successes throughout this year and beyond. And with that, I'd like to open the call for Q&A.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. The first question today comes from Jim Birchnoff of Wells Fargo. Please go ahead.

Hi, guys. Congrats on all the progress and your work through the COVID-19 situation. A few questions. I guess, number one, Brett, if we could get maybe updated thoughts on internal commercialization versus the affiliate model and maybe some framework that Oneza may be working on to establish a commercial model at IONIS. And then for Richard, just on the CF program, the pulmonary program, Should we expect data by year end in CF patients, and what should we look for there? And then maybe just one final one for Beth, just in terms of R&D revenues, is that something we should consider remaining stable over time, or is there any reason to think that that could increase or decrease? Thanks.

Thanks for the questions, Jim. So I'll take, as you suggested, I'll take the first one. I'll start there, but I'll also toss it over to Ineza to give her perspective, who's on the call for Q&A. So As we stated just now in our call earlier, we are prioritizing and continuing to build and expand the Ionis on pipeline and identifying and characterizing each of the medicines in that pipeline as to the value and the synergies they create when bundled. together in various ways. These are principally focused on rare diseases, and we're identifying those opportunities in that growing pipeline that will bring the greatest value to IONIS and shareholders. And we're looking at various options on commercialization strategies this year, and we're hoping to present some of those strategies later this year towards the fall. With that, Oneza, please jump in and add to my comments.

Yeah, sure. Hi, Jim. How are you? Thanks for the question. So we're making just good progress, right, in developing our commercial strategy. As Brett just said, the Ionisone pipeline is large, and we're making continued investments, and we certainly expect it to even grow further in the future. So with such a rich portfolio, you can imagine the initial steps in the commercialization work have been on portfolio prioritization, and we're preparing a high-level strategy, such as laying out how our innovative products deliver on the high-end net need in the market, what our strategic positioning is, and identifying where we have customer-facing synergies. You know, as a result, the IONIST-owned neuro portfolio we talked about last time continues to be a priority, and we remain excited about the mid-stage portfolio as well, which include acromegaly, non-transfusion-dependent beta thalassemia, and hereditary angioedema. So I really look forward to providing a high-level commercial strategy for the IONISM portfolio later this fall, more likely at the investor day we currently have planned, and we can get a little bit deeper at that time.

Thanks, Ineza.

Richard, do you want to talk about our ENAC program a little bit? Yeah. So the ENAC program is moving forward at a pace that we expect will completely enrollment this summer, and so we do expect the cystic fibrosis portion of that study to be able to report out later this year. What should we expect? This is a relatively short-term exposure of six weeks, weekly inhalation of the product, and we expect safety and some efficacy based on the target engagement. So that's essentially what we'll know by the end of this. We have a fully completed phase one trial in normal volunteers that has shown excellent safety and tolerability, and we'll also be including that in the rollout.

And when we roll that out, Jim, I suspect we'll also be able to talk about additional potential phase two studies that are in planning phase right now for our ENAC inhibitor. We're not planning to develop that. we're quite excited about. Beth, do you want to take Jim's other questions?

Sure, absolutely. Hi, Jim. So as you know, R&D revenues tend to be lumpy, and this year is no exception. What I would anticipate is that, as I mentioned earlier, that Q2 is likely going to look like Q1 in terms of revenues. Our revenues from R&D partnerships tend to be more back-end loaded this year. So I would expect to see revenue growth in Q3 and also in Q4, primarily from our R&D revenues. And, of course, the commercial revenues I expect to grow quarter over quarter for the remainder of this year.

Great. Thanks for taking the questions, guys.

Thanks, Jim. Appreciate the questions.

The next question comes from Tyler Van Buren of Piper Sandler. Please go ahead.

Hey, guys. Good morning. Thanks for taking the question. I guess with respect to the four or more proof of concept results that we should expect as upcoming catalysts, I know you mentioned some of them, but could you just review at least those four for us and maybe specifically highlight the one or two that you read out that you're most excited about and what you'd need to see in order to achieve proof of concept?

Sure, happy to, Tyler, thanks. So just to back up a half step, as a reminder, our objective this year was to read out on six clinical proof of concept studies this year. We already have two in the bag, with two very successful Phase II outcomes with angiopoietin-like 3 Leica, which is now licensed and partnered with Pfizer, and our ApoC-3 Leica, which we're planning a Phase III study to initiate later this year in FCS. We have a number of opportunities for clinical readouts this year. and we're on track to achieve that six clinical readouts this year. We're expecting to read out on our acromegaly program, growth hormone receptor, which is in patients on SSAs who are not controlled, looking at endpoints such as IGF-1. Hereditary angioedema from our PKK-LICA program is also In addition, we have an exciting program in hypertension. Angiotensinogen is an exciting program where we have multiple phase two programs ongoing. And we're hoping to share some of that data later this year as well. In addition, there's the potential for some data coming out from our beta thalassemia program, TINFAR-6. whether that will go into next year. But in addition, the ENAC program for pulmonary diseases that Richard already mentioned, and, of course, we also have the ongoing study in which we're evaluating with AstraZeneca, our program determining whether evaluating an oral formulation for an undisclosed target. So, quite a rich set of pipeline updates coming in the second half of this year that we're really excited about.

Maybe just a quick follow-up on HAE. I guess the standard of care injectables that have launched for prevention are achieving pretty high reductions in terms of attack rate, so do you think you could improve upon that, or is the goal to extend treatment duration with the Leica?

You're absolutely right. The HAE landscape is quite competitive, and patients have received substantial benefit in reduction in attack rates with the current approved medicine. Our objective is to do as good as that or better with our mechanism of action blocking the calocrine pathway. And as you may have seen some of our phase one data, we have a very potent molecule. We're having large impact, greater than 90% reductions in pre-calocrine levels in normals. We think we can beat it, potentially. What we also have going for us is the convenience of a very infrequent low-volume injectable, subcutaneous injectable, with the potential, if we crack commercially viable oral bioavailability in the ongoing studies, to move that drug into an oral formulation as well, which would be a significant advantage from a convenience standpoint. So it is a competitive environment, and we think we're hopeful that we can compete. The other thing I'll just add to that is we are exploring additional potential indications for our calocrine inhibitor. And plans are coming together to move on those. And we're hoping to share some of our thoughts on this later this year, maybe at an investor day.

Very helpful. Thanks for taking the question.

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

Hi, this is Chi on for Jason. Thanks for taking our questions. I have a couple on the big 105 for sporadic ERS. I guess the first one on that, maybe, can you talk about, you know, how you envision the market opportunity for that will be? I guess how large is the sporadic population is within the broader ERS umbrella? Then I have a couple follow-up after that. Thanks.

Sure, Chi. So we're very excited about our ALS program. As you know, there are multiple causes of ALS, both genetic and sporadic. Our two lead programs are targeting genetic, C9, which is due to read out phase two data next year, and our phase three data for Tofersen, SOD1 ALS, also due to read out next year. This is our first of several sporadic ALS target drugs that we're planning to bring forward in the not too distant future. This is the first. It's targeting ataxin 2. The preclinical data looks very exciting and compelling, and one of our key objectives this year is to get the clinical study started with Biogen. As you know, the sporadic population represents the majority, the vast majority of patients with ALS. I believe that it's somewhere north of 75% patients with ALS are of the sporadic variety. And ataxin 2, there's no reason to believe that it couldn't, if it performed well, address the majority of that majority, quite simply. So it's really the majority of patients with ALS that this drug has the potential to treat.

Got it. I think you kind of bridged into my second question. My second question was how heterogeneous is the sporadic form? And it sounds like you are planning to do multiple studies for that population. Are you experimenting different mechanisms to address all the different mechanisms that could cause the sporadic ALS? And I think you said you believe the ataxia tube can address sporadic ALS. Are we thinking about maybe like 80%, 90% of it? If we can sort of quantify it, that would be great.

Thanks. It's hard to say how much of the sporadic population ataxin-2 would address our hope, and there's no reason to believe that we couldn't target the vast majority of that sporadic population, as I mentioned. We have a very exciting research program with Biogen in which we're evaluating multiple mechanisms, multiple targets in animal models for ALS, sporadic ALS. Maybe, Eric, you can add a little more color on the alternative types of mechanisms we're addressing and how we're going about doing this.

Yeah, I mean, so as Brett mentioned for the ataxin compound, I mean, I think we really have to figure that out in clinical trials and find out but the preclinical work, which has been published, by the way, is very exciting and very strong. And as Brett mentioned, we have a very broad program with Biogen looking at all forms of ALS, genetic, familial, sporadic, and all mechanisms that could potentially contribute to the pathogenesis of the disease. And so we're looking at all sorts of different pathways and trying to figure out which drugs or combination of drugs are best suited moving forward to treat the condition. So it's a very broad, deep program, and I'm certainly optimistic we'll have lots more programs coming forward.

Got it. Maybe just one final follow-up from me. I believe the plan is to advance 105 in the clinic this year. Can you talk about when we could possibly expect data next? You're referring to the sporadic?

I missed the beginning. Yeah, the sporadic program, yeah. Well, it's just starting this year, so I wouldn't expect I wouldn't expect data until next year at the earliest. Okay. I concur. Thanks so much. Yep. Thank you.

The next question comes from Chad Messer of Needham & Company. Please go ahead.

Great. Thanks for taking my questions, and it's certainly glad to hear the team at Ionis is managing things so well through this pandemic. I'd like to maybe start with... with Waylibra and the refiling. Can you sort of walk us through the steps that are left? Is it really just data collection, or are there any regulatory interactions that need to occur?

Thanks, Chad. So we're very excited about refiling Waylibra for the U.S. for potential approval for FCS. You know, we've been with Exeda collecting a substantial amount of additional data since the original CRL that we received on whey liver in the U.S. And we have our confidence that for approval for whey liver in the U.S. has grown as we continue to collect and evaluate that data. Our confidence grew even more based on our meetings with the FDA to talk about a refiling for whey liver. We feel good. about the discussions we've had with them, and those discussions have been very supportive and productive. So we're excited. What we're doing now is putting the data, packaging it up, and we're getting ready to refile later this year. Richard, do you want to add anything to that?

Only to affirm, we have no more regulatory interactions. We've met with our pre-resubmission meeting and then encouraged to resubmit that the data is there. And so we're just putting that package together.

Okay, great. Thanks. And then just on the APOC3 Leica, the upcoming SDS study, Is that pretty much, should we assume, going to look like approach, or were there some lessons learned from having gone through all of this before?

Certainly, we have so much experience in FCS, Chad, as you know, from our way labor experience, and we will use all of that information to build on our phase three study design for able to be like Richard mentioned.

So a couple of things as we were moving through the development of whey Libra. Axia has been hard at work developing a patient reported outcome which will be included in this study that was not included in the first study. So that's one difference. There will also be a real focus on prospectively on the pancreatitis and will enrich for patients for those who have ongoing and consistent pancreatitis. So that will be another piece that is a bit different. Otherwise, it will look a lot like the APPROACH trial.

Okay, thanks. Helpful. And then maybe just one on Spinraza on the DEVOTE study. I don't know how much of this you can share, but maybe talk us through what kind of efficacy delta we could potentially expect there. I mean, it seems like the efficacy that we already have in Spinraza may be hard to convincingly beat in a trial unless it was a really large one.

Yeah. You're absolutely right, Chad. The efficacy that Spinraza has demonstrated in all forms of SMA, that's a very high bar not only for our devote study, but also for all of us. But we do believe that going to higher doses, as does Biogen, has the potential to show even greater efficacy. I mean, as an example, in between maintenance dosing, sometimes patients will start to feel some symptoms start returning towards the end of a maintenance dose. That's just one example. Patients that we get too late later in their disease. We have the potential before, you know, later they have more, their disease has progressed before they've gone on Spinraza, we have the potential to show even greater efficacy in those patients, for example. And then there's others, and there's other ways to show greater efficacy. So, you know, based on the pristine safety that Spinraza has demonstrated, we have the luxury of going to a significantly, substantially higher dose in our question, Chad. We're also working, making great progress with Biogen on a follow-on drug, a potential follow-on drug for SMA, a follow-on test based on a new chemical entity that we think our objective is, and we're feeling pretty good, that we'll be able to get to biannual dosing or maybe even annual dosing with an intrathecal administered medicine. So, We're defending the SMA franchise, Ionis and Biogen, and we're excited about not only Speranza, but the higher dose, as well as follow-on medicine.

Okay, great. Thanks. I'll pass the mic. Appreciate all the updates. Thanks, Chad.

The next question comes from Esther Rajavillu of Oppenheimer. Please go ahead.

Good morning. Thank you for taking my question. Can you maybe give us some color on your partnered programs that may be experiencing COVID-19-related delays, the magnitude of that, as you think about the first half of the year versus the second half? And then I have another quick follow-up.

As we have stated with respect to the clinical programs we're running, which we've had a minimal impact on the progress we're making on our clinical trials. Similar story by our partners. We have always been and remain in close contact with our partners and have been meeting with them even more frequently once this crisis occurred. And we're not seeing substantial impacts on to take and certainly nothing of meaning. And as Richard mentioned earlier, the phase three programs, LP little a with Novartis and the cardiovascular outcome trial, side one phase three program with Biogen and the Huntington program are all on track to read out on time. So our partners are managing the situation quite well.

Awesome. Thank you. And then, um, you, you know, you, you're in an, you've always been in an enviable cash position recently. And do you have any updated thoughts on capital deployment in this current environment?

Um, yeah, sure. I'll, I'll, I'll comment on that and I'll, I'll, um, ask that to make some comments too. So we are in a very envious position. We're very proud of the strong financial position we are in. And, um, we, um, We will continue to invest in all of the areas, priorities that we planned on investing in last year and as we talked about earlier this year. That includes investing in our pipeline and investing in our later stage pipeline, the IONIS on later stage pipeline, such as the Phase III program for APOC III Leica and, of course, the TTR Leica Phase III studies and our mid-stage pipeline as well. We're also investing in building up commercial capabilities and identifying various options for maximizing commercial value of the medicines we bring to the finish line through phase three, as Onaza touched on earlier during this Q&A. And we continue to invest in the development as we did earlier this year, and we plan to continue to do so in new technologies, technologies that complement what we're doing in antisense to continue to ensure that our leadership position in RNA therapeutics not only is maintained, but it's extended. Genomics collaborations to continue to populate the pipeline with novel genetically linked targets for drug discovery, Leica chemistries, new Leica chemistries that we're collaborating with a new partner there, and we continue to look for other collaborations as well, and brand new technologies that we continue to survey and pursue and look at to potentially diversify our platform into new areas.

Great. Sorry, more specifically, maybe if you could comment. Can you hear me?

Yes, I can, Esther.

Sorry.

Don't worry. Just more specifically, maybe on that, if you can comment on share repurchases and what your thinking is for the remainder of the year.

Hi, Esther. It's Beth. So, you know, as we think about our our cash position. I think Brett did a really nice job of outlining our priorities. They're very clear. We're very clear internally about where we're going to invest our capital. When we think about share repurchases, our view at this point is, particularly given the uncertainty of the current environment, that holding on to our cash and having it available for some of these other opportunities that Brett was describing is, you know, really a better use of cash today. So we don't have any specific plans, but that being said, we'll certainly keep it always in mind.

Awesome. Thank you very much.

Thanks, Esther.

The next question comes from Ellie Merle of Cantor Fitzgerald. Please go ahead.

Hey guys, thanks so much for taking the question. Just in terms of the oral program, I know you mentioned that you're still hoping to get data in 2020. Could you give us a little bit more color just in terms of kind of what drives this, you know, if it's completed enrolling or if it's still enrolling and close to completion? And then in terms of the specific data that we could expect to get in terms of the oral, I guess what have you and AstraZeneca worked out in terms of what you would actually disclose If this, you know, data comes out in 2020, if we would see sort of, you know, levels of, you know, protein reduction, things like that in terms of what we should look for in the release thing.

Sure, Ellie. So, we're working very closely with AZ on a number of programs in the cardiometabolic space and including this one. What we're looking to do is to complete a phase of the study that we think will provide ample proof of concept, quite simply, so that we can make some calls on whether or not we think that we're well along our way in achieving commercially viable oral delivery. What you would expect, what form that would come in would be, of course, bioavailability, PK that is predicted based on our preclinical data, as well as biomarker data, so impact on biomarkers that are reflective of target engagement. But also, we have a parallel program that's ongoing to oral with the same drug, but administered subcutaneously. And we'll also have data from that study, we hope, to compare side by side with the oral program. So it'll actually tell us a great deal about how the oral is stacking up and will stack up with continued development for the subcutaneous formulation. The main, one of the breakthroughs, there were a number, but one of the breakthroughs that really allowed us to get oral, we think, to where it is now for testing and potentially achieving commercially viable oral bioavailability is potency. These are Gen 2.5 glycomolecules that are stable in the gut and remain intact upon absorption in the gut. And it's the potency that really allows us to get the bioavailability that we think we need. And our sub-Q data would be very important to show that what we've seen and predicted preclinically will translate to that level of potency. programs that I think will be very important.

Got it. Thanks. And then just in terms of, you know, thinking about COVID impact on the TTR, like a phase three program, I guess, you know, if you could characterize sort of how enrollment is going in each of those phase threes and, you know, how COVID is potentially impacting the enrollment timelines and just sort of your latest expectations for when you could complete enrollment in these studies and, you know, I know it's a competitive environment, so curious sort of the latest on what you're seeing with the timelines there.

Thanks. So, as Richard mentioned earlier, we did, so the enrollment is ongoing and the programs are going well. Both the T-transform cardiomyopathy, the cardiomyopathy study and the neuropathy study are both going well and they're on track. We did pause those studies very briefly, and we did that based on requests by our sites that were activated and up and running because they had to assess their own situation. They were being overloaded in their hospitals and their sites, and they didn't know what to expect from COVID patients that they were having to manage. So we obviously appreciated those challenges, and we were You know, we paused the enrollment briefly until they assessed the situation, and then they told us that they're ready to go and reactivated, and we're enrolling again. We don't expect significant impact on the timelines for either study going forward. We did implement a number of mitigation strategies as this developed to catch up, and we did quite a bit remotely during this brief process. impact on timelines.

Got it. Thanks.

Very helpful.

Thank you.

The next question comes from Yeltsin of Laidlaw & Company. Please go ahead.

Good morning, and thanks for taking the questions and impressed by your situation under the QX19. Just two quick ones. The first one is ION224, the DGAC programs in NASH. Do you guys have any, I know most of the DGAC2 was in earlier stage development, but what do you feel that some of the strengths you might have comparing to other programs in development? And then I'll follow up.

Sure. Yale, thanks. One of the advantages we have is building on the really impressive phase two data that we generated in patients with NAFLD, fatty liver disease, with the non-likely drug, which we had high statistical significance in reductions in liver fat with excellent safety and tolerability. That triggered us to go back and identify and bring forward the Leica version of that to allow us to go to even lower doses, less frequent dosing administrations. From a target standpoint, the advantage we have, I think, are multiple. There are multiple aspects to that. One is the fact that DGAT2 is the rate-limiting enzyme in the triglyceride synthesis pathway in the liver. We've demonstrated that. We've actually examined—we've actually looked at all the targets in the triglyceride synthesis pathway and concluded that our DGAT2 was the most— The second advantage we have is specificity. As you know, small molecules have difficulty in specificity against isoforms, such as DGAT1. You do not want to inhibit DGAT1, otherwise you'll get into some side effects that we've published on, actually. DGAT2, our inhibitor, is very specific, and we think that it'll measure up very well against competitions triglyceride pathway in MoviBUR.

Okay, great. That's very helpful. Maybe the next question really is a follow-up. The very first question really is that you guys are going to assess a lot of your rare disease pipeline in terms of their sort of commercialization or pathway to go. And as well as that, yesterday at the conference call, they were also probably anticipating or expecting some of these programs may be moving to their pipeline. So overall, how would you guys think about what to maintain on your own, what you may be move to a PS for their development? As a general principle or thought?

Sure. So, we're having very productive discussions with AXSIA on a potential asset to move into AXSIA, and their objective is this year. They, of course, have a very full agenda this year, too, with TXETI, Waylivera, the AOC3-LICA Phase III study, and the refiling of Waylivera in the U.S. Our discussions have been very productive, and we have whittled it down to a few potential rare disease programs from the ionosome pipeline. And I think you'll hear more about that later this year from AXIA and IONIS. Certainly one area of priority for us at IONIS is our rare neurological disease pipeline. It's a pipeline that we're very excited about. Prion, Alexander's, Leflora, as Richard mentioned earlier, more coming and expanding. And that's certainly a high priority for IONIS to prioritize for at least some of those for ourselves. So I think you'll be hearing more about that later this year as well, including at our investor day.

Okay, great. Thanks a lot. And again, congrats on the progress. Thanks, Ian.

The next question comes from Paul Matthews of People. Please go ahead.

Hi, this is Alex on for Paul. Just a couple questions from us. Thanks for taking the questions here. I guess the first one kind of related to this whole the way that you're thinking about partnerships. Just curious how you're thinking about your AGT program given it is another large market indication. What are your thoughts as they stand today on continuing development on your own or looking for partners moving forward? And then secondarily, I was hoping you could give us a little bit more background on your APOL1 program with AstraZeneca.

Thanks. Sure. Happy to. So, Alex, our strategy on partnering for large, broad indications remains the same, except that is, you know, we're not going to be taking on very large Phase III studies. antihypertensive would entail. Similarly, as we've done for LP little a, we'll seek a partner at the appropriate time. With that said, we're in no rush. We're in no hurry. We have the financial strength to be able to bring these large indications through clinical proof of concept and as far as we need to take them to maximize the economics that comes to Ionis for any such partner in the future. And so, you know, we're in no hurry to partner in this program. We're excited about what we're seeing, and we're looking forward to sharing some of the results of these studies later this year. And what was the second one? Oh, APOL01. Thank you. Yeah, APOL01 is very exciting. It's a program – that we initiated at IONIS a number of years ago. It's a target that is a genetic link to kidney disease, FSGS, and other kidney diseases. We did enter into our cardio metabolic collaboration after we did a lot of work here at IONIS on this target. We published on this target. kidney disease that we develop. That trial is in humans now and is in clinical testing. So we're hoping that AZ will have more to say about that program later this year or early next year. They certainly highlighted it in their own earnings call, so they're excited about it. Great, thanks.

Next question comes from Jessica Fye of JP Morgan. Please go ahead.

Hey, guys. Good afternoon. Thanks for taking my question. Question is on the acromegaly program heading into that proof of concept data later this year. How do you expect that product will differentiate from competitors, namely the SSAs, either from a mechanistic perspective or the target patient population? Thank you.

Richard, would you like to take that one? Sure, I'd be happy to. So the program, the proof of concept study, is in patients who are uncontrolled IGF-1 on the somatostatin analogs. And so quite a number, it turns out, as much as 40%, 50% of these patients don't get full control on their current therapies. So I think what you'll want to see is IGF-1 control with the addition of our acromelic GHR Leica program. It's also a much improved tolerability profile for this compound, and we are also initiating monotherapy studies in patients who are not on SSRLs or are weaned off and come on to this program. So the program is staggered a bit with the monotherapy coming after the add-on, but we're excited about what we're seeing and hope to have some real data in the second half of this year.

Yeah, Justice Oniza, that was great, and I would just say that we've done some initial work on kind of the product profile. And early on, in addition to the IGF-1 control, we're also seeing there's an unmet need on just breakthrough symptoms. And we believe, like, with our product, we can actually offer both and along with the monthly dosing that is turning out to be quite a differentiating profile.

Great. Thank you.

Anything else, Jess? Okay.

Thanks. That's it. Thank you. The next question comes from Manny Forohar of SBB Learing. Please go ahead.

Good afternoon, everyone. This is Rick on the call for Manny. Thanks for taking our questions. So first, I just wanted to touch on the oral ASO candidate again. Is the timing of that first clinical data disclosure going to be controlled by AstraZeneca, or is that a joint decision between the two companies? And secondly, I have a broader question about the opportunity for oral ASOs How do you think of an ideal therapeutic indication or end market for oral ASOs? And how does this compare to the way you think about targets for your conventionally administered drugs?

So the decision on the timing to talk about the program is joint. IONIS and AstraZeneca, we work very closely together on this program and our other cardiometabolic programs. As for the potential to exploit, take advantage of progress we're making in oral for our other programs, we're already moving other programs forward. Programs that are non-partnered, that have Gen 2.5 Leica chemistry, or we're identifying Gen 2.5 Leicas for existing programs as potential follow-ons. And the focus really is on, you know, Areas where oral would provide a significant either competitive advantage or convenience advantage for patients. Your chronic long diseases where patients are going to be on therapy for long periods of time. Diseases where, you know, it could be a severe disease, but patients are generally asymptomatic until they have an event of some sort. will be, you know, particularly well-suited for an orally administered agent. And in areas where we're competing with other technologies or other medicines where we think oral can provide a competitive advantage.

Great. That's it from us. Thank you.

Next question is from Ritu Baral of Cowen. Please go ahead.

Hey, guys. Thanks for taking the question. I want to just follow up on the Roche Huntington's data release. But I think you mentioned that they have done Phase 3 data in 2022. But I'm wondering about any interim data we could get in the meantime, whether it's an interim look in the Phase 3 or the Phase 1-2 open label extension data. Any timelines for that? And then I've got to follow up.

So, Roche has not indicated in any way that there would be an interim look at the Phase III data before the Phase III data reads out, which is expected in 2022. Next year, they are planning to share the open-label extension data from our Phase I-II study, which is that open-label extension study is completed, and they're evaluating the data. along with the natural history study, which has not completed yet, which will complete this year or early next year, and then they'll share that data alongside the OLE data next year. So that's what to expect for next year.

Got it. And then can you go into maybe a little more detail about the BNM-2 program for central nuclear myopathy? You indicated the Phase I-II started. Can you give us the trial design and the timelines for that data, and maybe just how you look at the indication.

So this is with our partner, Dynacure. Dynamin 2 is the target, and it's for the treatment of all forms of central nuclear myopathies. They published with us, joint publication, some very exciting preclinical data, models of CNM. This is a muscle target. And based on that data, we launched into clinical development. The study design is in older patients with CNM. And these patients have had a long history, natural history. We have a substantial amount of natural history data for each of these patients that are entering the study. So there's a lot of information to build off of in that study. And it's open label. So all patients are getting the drug. And then the goal is to move into infants next year, which is the more severe form of CNM.

Is there a particular biomarker or functional marker in these older patients that the phase 1-2 analysis will pay attention to?

These will be measures of mobility and quality of life. The vitamin 2 is not measurable in the blood. But other biomarkers are under development by Dynacure.

Got it. Thanks for taking the question.

Sure. Thanks, Richard. Maybe one more question. We're going quite long.

The last question today comes from Josh Shimmer of Evercore ISI. Please go ahead.

Thanks for putting me in. Just on Axia, the commercial performance has been below expectations, and it's still a drag on your ability to achieve profitability. Do you think that's going to change meaningfully over the next 12 months? How are you thinking about mitigating the burn and then deciding if and when more aggressive steps should be taken for that part of the business? Thanks.

Thanks, Josh. I'll ask Beth to address that question.

Sure. Hi, Josh. So, you know, as Axia mentioned on the earnings call yesterday and we reiterated, we see, you know, we see continued growth for both Tech City and WeLibra as they expand into new markets throughout Europe as well as in Latin America with PTC. It's, you know, as you know, it's really quite customary to invest ahead of revenue growth when you're launching new products and expanding into new markets. And that's what we're seeing right now. we are continuing to be sustainably profitable. We have a stated goal to be sustainably profitable and we've been able to do that the last several years and reaffirmed our guidance again this year to be meaningfully profitable. And so we are obviously committed to that and we're also committed to working with Axia and their new management team with Damien and Kyle Genet, their new commercial, chief commercial officers to build the Texedian Wayliver franchises. So stay tuned. Thank you.

Thanks. Thanks, Josh. Thanks, Beth. Okay. With that, I think we'll wrap it up. Thanks everybody again for joining us today. We're feeling really good where we are at Ionis. We're confident. We're taking the necessary steps to ensure financial strength to continue pursuing our short and long-term strategic priorities. And we look forward to updating you on our progress as the year unfolds. So take care, everybody, and we'll talk soon. Bye now.

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