Ionis Pharmaceuticals, Inc.

Good morning, and welcome to IONIS Pharmaceuticals' fourth quarter and full year 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 Walk, Vice President of Investor Relations, to lead off the call. Please begin.

Thank you, Tom. 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 gap to non-gap financial measures that we will discuss today. We believe non-gap financial results better represent the economics of our business and how we manage our business. We also have 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. And joining us for Q&A are Onesa Kateray, Chief Corporate Development and Commercial Officer, and Eric Swayze, Executive Vice President of Research. I would like to draw your attention to slide three, which contains our forward-looking language statement. We will 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 details. 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. Last year marked a new beginning for Ionis. With new leadership in place, we laid out a bold new vision for the business and took important steps towards realizing our goal of having 12 or more medicines on the market in 2026. Key to our new vision is our strategy to maximize the value of each medicine in our wholly owned portfolio. Today, our focus is primarily on commercializing our rare neurological and cardiometabolic disease medicines. For those opportunities outside these core areas, we will set a course forward that maximizes the value of each medicine, which may include Ionis commercialization or partnering. Last year, we accelerated our commercial strategy by acquiring Axia. This transaction also enabled us to strengthen our organization and to recognize the full value from Exia's rich product portfolio. Further, our distribution agreement with Sobe made it possible for us to restructure our European operations, which further streamlined our business. We were able to unlock substantial resources through these transactions, which we are investing in the business in the following three key areas. First, we're advancing and expanding our Holyoke pipeline. Second, we're building our commercial capabilities in support of our rich pipeline as we prepare to launch prioritized medicines from the Ionis Holyoke pipeline. And third, we're broadening the reach of our technology through investments in medicinal chemistry, human genomics, validation of new routes of delivery, and through other means. We believe investing in these three key areas provides the greatest potential to drive future growth and to achieve our goal of 12 or more medicines on the market in 2026. Last year, we made substantial progress towards achieving this goal with numerous significant advances across our rich, late, and mid-stage pipeline. We now have six phase three studies underway, including three studies with whole new medicines. We also have a prolific mid-stage pipeline of medicines advancing towards phase three development, many of which are expected to reach pivotal trials in the near term. With so many programs in mid to later stages of development, together with our historically high rate of clinical success, today we are in the enviable position of delivering a steady cadence of phase three data readouts for many years to come. And we're especially excited about the upcoming phase three readout of the VALOR study for Tofersen in patients with SOD1 ALS, with data expected in the second half of this year. Positive results from this study would put us one step closer to providing the first-ever disease-modifying therapy for ALS. And importantly, positive Topherson results would also provide, for the first time, tangible clinical evidence that treatment is possible for patients with ALS, providing hope for all patients suffering from this devastating disease. And more broadly, Topherson's success once again demonstrates the power of our antisense technology to pioneer new markets and deliver transformational medicines to patients. In addition to advancing our pipeline, we're also expanding the utility of our technology, having now demonstrated proof of concept for aerosol delivery of antisense medicines to the lung. Based on these results, we're well on our way in building a new pulmonary disease franchise with the potential to treat conditions such as cystic fibrosis, COPD, IPF, and asthma. We've only scratched the surface of the unique capabilities of our NSS platform. With the medicines advancing in our pipeline today, we have the potential to continuously pioneer new markets in areas of significant unmet medical need and change the standards of care for diseases needing better treatment options for many years to come. As we began the year in 2020, we of course could not have imagined the challenges society would face from the global COVID-19 pandemic. Because of the dedication of our employees and strength of our technology and our business, we were able to successfully manage the evolving pandemic and achieve our key goals for 2020. This includes achieving our 2020 financial guidance while advancing our pipeline and our technology. As Beth will describe in more detail, we plan to put our substantial financial resources to work even more this year by increasing our investments in our medicines and our technology. We believe this has the greatest potential to drive future revenue and earnings growth. And with that, I'd like to turn the call over to Beth to review our 2020 financial results and our 2021 financial guidance, which is focused on maximizing the value of our wholly owned pipelines. Then Richard will discuss our key recent pipeline achievements and highlight important areas of focus for this year. After Richard, I'll wrap up. I'll prepare remarks before taking your questions. Now over to Beth.

Thank you, Brad. I'm pleased to say that we exceeded our 2020 guidance with revenues in excess of $700 million and net income of $111 million on a non-GAAP basis. We achieved these results while continuing to invest heavily in our rich pipeline with a focus on our wholly owned medicine. And we're particularly pleased with these results given the challenging global pandemic environment. In the fourth quarter of 2020, we took important steps toward our goal of creating a stronger, more efficient company when we acquired Axia and moved our European operations to a distribution model. Together, these transactions unlocked substantial cost savings that we plan to reinvest to drive future revenue growth. I'll talk more about that in a few minutes, but first I'll walk through our 2020 financial highlights, beginning with revenue. Last year, about 50% of our total revenue came from our marketed products, with the majority coming from Spinraza. Most of the remaining 50% of our revenue came from eight different partners, as together we advanced more than 20 programs. Our ability to generate revenue from numerous diverse sources is a key element of our financial strength. Finraza continued its blockbuster performance last year, generating over $2 billion in global sales. We earned $286 million in royalty revenue as a result, and virtually all of that revenue falls to our bottom line as profits. Biogen remains committed to enhancing patient outcomes and reinforcing the proven efficacy and safety profile of Spinraza in SMA patients of all ages. The response study and the devote study are two examples of this commitment. The response study, which is now underway, is evaluating Spinraza's potential benefit in SMA patients who have experienced a suboptimal response to gene therapy. And the devote study, which is evaluating the potential to deliver even greater benefits with higher doses of Spinraza compared to the currently approved dose, is now enrolling patients in the pivotal blinded cohort. Given Spinraza's robust efficacy and safety profile established in SMA patients of all ages, Spinraza continues to be a foundation of care for the treatment of these patients. And with over 11,000 patients on treatment at the end of last year and over 60,000 SMA patients in markets where Biogen has a commercial presence, we believe Spinraz's future remains bright. Texedi and WeLibra had combined product sales of $70 million, an increase of more than 65% compared to 2019. As these medicines launched into new markets, and new patients began treatment in existing markets. Txeti has demonstrated consistent quarterly growth since launch, driven by new patient growth in established markets, such as the U.S., and in new markets across Europe. Last year, we achieved pricing and reimbursement in numerous new countries, bringing the markets in which Txeti is commercially available to 15. Notably, we began generating revenue in countries across Southern Europe, including Portugal, which is strategically important because of its large endemic HATTR patient population. We began recognizing revenue in Canada, and we continue to expand into Latin America. Patients in Brazil and Argentina are being treated with Tecseti under a named patient program administered by our partner, PTC. In its first full year of commercial sales, WayLibra achieved important successes despite the pandemic. Through the efforts of our European team, we achieved pricing and reimbursement in six major European markets. WayLibra is under review for marketing authorization in Brazil through PTC, and we are optimistic about a potential approval this year. PTC is continuously continuing its efforts to expand access in other Latin American markets as well. During 2020, we earned R&D revenues of approximately $365 million, slightly above our annual average of $350 million. Approximately 80% of our R&D revenues from medicines in our leading cardiometabolic and neurology franchises, with more than $165 million from our cardiometabolic franchise, and over $125 million from our neurology franchise. Additionally, we earned nearly $50 million from Alnyland last year. This included $41 million in sublicense fee revenue we earned in the fourth quarter when we obtained a favorable award in our arbitration proceeding. As 2020 once again demonstrated, our ability to consistently earn revenue from multiple sources is a key pillar of our financial strength. As we projected in our 2020 guidance, our non-GAAP operating expenses increased compared to 2019. The increase was driven by growth of just over 10% in non-GAAP R&D expenses related to advancing our phase three programs for TTR-LICA and APOC-3-LICA, plus our wholly owned medicine. Our SG&A expenses on a non-GAAP basis were slightly lower year over year, primarily from reduced travel and related expenses due to the pandemic. We exceeded our net income guidance of meaningfully profitable with net income of $111 million on a non-GAAP basis. And we ended 2020 with nearly $2 billion in cash, enabling us to increase our investments across our business. As a result of our AXIA and SOBI transactions, we recognized approximately $400 million of related expenses in Q4 last year. Importantly, most of these expenses were non-cash and non-recurring. We excluded these expenses from the non-GAAP results I just reviewed with you because they do not reflect our normal ongoing operations. These expenses were comprised of $31 million of severance and retention costs, $59 million of non-cash stock-based compensation expense, and $312 million in a non-cash adjustment of our valuation allowance for our federal deferred tax assets. I'd like to just take a couple minutes to provide some additional information about the adjustments to our valuation allowance. Since XEA's IPO, we've been required to report our federal taxes as two separate companies. That meant that XEA's operating losses and R&D tax credits were not available to reduce Ionis' taxable income during that time. As a result of the acquisition, we were able to reconsolidate the two companies for federal tax purposes, and we'll now combine Axia's expected losses with Ionis' taxable income, resulting in tax losses for the next few years as we make significant investments to drive future revenue growth from our rich pipeline. Additionally, this means XC's pre-acquisition federal tax assets of nearly $300 million are now available to us to reduce our consolidated taxable income in the future. However, because we anticipate consolidated tax losses in the near term, we are required to establish a valuation allowance against these deferred tax assets. So while it's a large number, It's important to note that this is a non-cash adjustment based on technical accounting guides and reflects the substantial tax benefits we have available to us to reduce our consolidated taxable income in the future. Now I'd like to provide some color on the financial benefits from our AXIA acquisition and the restructuring of our European operations. Last year, we put our strong balance sheet to work when we reacquired Axia. The acquisition provided us with significant financial benefits. First, we retained the full value of Axia's rich portfolio, which we expect to drive considerable revenue growth in the future. Second, we are realizing significant cost savings from the efficiencies we are achieving by operating as a single company. Third, we gained full access to Axia's substantial cash balance of nearly $400 million at the time of the acquisition, enabling us to freely use it to maximize the value of our medicine. And fourth, we gained access to the nearly $300 million of Axia's deferred tax assets I discussed a few moments ago. We are also realizing significant financial benefits from our SOBI transaction. Restructuring our European operations Improves our bottom line by enabling us to distribute tech study and we live in a more cost effective manner by leveraging. So these commercial infrastructure and reach across Europe. As a result, we expect to realize substantial savings. In aggregate, we expect to realize more than $50 million of savings in 2021. And we are putting these substantial savings to work. by reinvesting them in other value-driving areas of our business. Now turning to our 2021 financial guidance. We are projecting to earn more than $600 million in revenue, incur operating expenses in the range of $675 million to $725 million, and end 2021 with a net loss of less than $75 million, assuming the low end of expenses. all on a non-GAAP basis. Our 2021 guidance reflects our new strategy to maximize the value of our wholly-owned medicine, focused primarily on commercializing our rare neurological and cardiometabolic disease program. Our guidance also reflects the shift in revenue for Tixeti and Weylibera in Europe from product revenue to royalty rates. As I mentioned a few moments ago, our restructured European operations will provide us with substantial savings, which we are redeploying to achieve our growth objectives. As we've always done, our R&D revenue is probabilized based primarily on the anticipated timing of the many different milestone payments we anticipate achieving as we advance partnered programs. Because of this approach, we have upside opportunities particularly since we expect our R&D revenues to be higher in the second half of the year compared to the first half. We expect our operating expenses to increase as we invest in driving future growth. That means investing our resources in three key areas, advancing and expanding our wholly-owned pipeline, building our commercial capabilities, and broadening the reach of our technologies. Our investments in our pipeline are focused on advancing our ongoing Phase III studies for TTR Leica and ApoC3 Leica, starting a new Phase III study for ApoC3 Leica in a larger patient population, advancing ION363 in patients with FUS-ALS into Phase III development, and continuing to progress our multiple mid-stage programs. We are also investing in building our commercial capabilities. With Axia, we acquired a strong commercial foundation, and we continue to build on that foundation. Specifically, we have established a new product strategy team, which is focused on go-to-market strategies and indication optimization ahead of launching our wholly-owned benefits. And we are investing to broaden the reach of our technology, ensuring our platform remains innovative and competitive. we expect our R&D expenses to increase approximately 25% to 35% in 2021 compared to last year. And because most of our synergies are within SG&A, we expect our SG&A expenses to decrease. We can increase our investments, as I just described, while projecting a modest net loss this year because of our multiple sources of revenue and the significant cost savings we realized from acquiring XCM. and restructuring our European operations. Our capital allocation strategy is focused on investing internally for growth. We strongly believe this is the best use of our capital. We are confident that investing in our medicines can grow future revenues at double-digit rates as we bring more and more new medicines to the market and achieve our goal of 12 or more marketed products in 2026. And with that, I'll turn the call over to Richard.

Thank you, Beth. We made important progress across our portfolio in 2020, including moving many of our wholly-owned programs closer to market. We're pleased with the performance of our Phase 3 assets with several key achievements last year. The Phase 3 studies of Tominersen for Huntington's disease and Tofersen for SAD1 ALS achieved full enrollments. We initiated phase three studies with two of our rare, wholly-owned cardiometabolic disease programs, TTR-LRX for patients with TTR cardiomyopathy and APOC3-LRX for patients with FCS. And importantly, all six of our phase three studies continued to progress well. We also made substantial progress with our mid-stage programs, including reporting positive data from six studies, initiating more than 10 new Phase II studies, and expanding the reach of our technology by demonstrating our ability to safely deliver antisense medicines by aerosol to the lung. We are well positioned for a very busy year of Catalyst, the first significant of which is the Phase III data for the Valor study of Tofersen in patients with SOT1 ALS. ALS is a disease particularly of importance for us, because antisense technology is ideally suited to address the root causes of ALS. We have leveraged our platform to develop medicines to treat all forms of this disease. Today, with four medicines in development, we believe we could truly have ALS around. Copersen has the potential to become the first disease-modifying treatment, for ALS, which we believe will fundamentally change the ALS treatment landscape. Positive Tofersen data would also give us greater confidence for our programs for the treatment of other forms of ALS. We believe Tofersen may also have the potential to slow progression or even delay the onset of disease in pre-symptomatic SOD1 ALS patients, similar to the profound effects demonstrated by pre-symptomatic SMA patient treated with Spinraza before symptom onset. Biogen plans to initiate the ATLAS study this year to address this question and hopefully demonstrate a similarly profound benefit for Tofersen in pre-symptomatic ALS patients. Our next ALS program to enter development is ION363 for the treatment of FUS ALS, which we plan to move directly into a pivotal study shortly. FUS ALS is a devastating, rapidly progressive form of ALS caused by mutations in the FUS gene. So we are pleased to be moving so rapidly to evaluate this medicine in patients with such a clear unmet medical need. And importantly, ION363 is IONIS' first wholly owned ALS medicine to enter the clinic. In addition to these exciting ALS catalysts, we have a busy agenda from programs across our wholly-owned portfolio. Coming up in the first half of this year, we look forward to multiple catalysts, including key data readouts and study initiations. We plan to report top-line Phase II data from PKK-LRX and GHR-LRX for the treatments of HAE and acromegaly, respectively. We also plan to present more detailed data from our ENAC 2.5-RX and the AGT-LRX programs at upcoming scientific meetings taking place in May. At the American Thoracic Society meeting, we plan to present phase two data for ENAC 2.5-RX in patients with cystic fibrosis. And at the American College of Cardiology conference, we plan to present phase two data for AGT-LRX in patients with resistant hypertension. Each of these medicines has the potential to change the standard of care for these indications. Additionally, these medicines have the potential to address additional indications, representing further opportunities for growth. Looking at upcoming study initiations, we are very close to starting a Phase II study for ION373 in patients with Alexander disease. Together with ION363 for patients with FUS ALS, These programs represent significant advancement among our wholly-owned neurological disease medicines. We plan to advance AGT-LRX into a larger Phase IIb study in resistant hypertension patients on three or more antihypertensive medications, a population representative of real-world patients. This study is expected to get underway soon. We also plan to study AGT-LRX in patients with heart failure, in a Phase II study expected to start midyear. And also in the first half, we look forward to advancing ION224, our wholly-owned medicine targeting VGAT2, and our most advanced medicine in development for NASH into a Phase IIb study. Looking to the second half of this year, we expect even more key value-driving events. We plan to further expand our pulmonary disease franchise based on our growing body of data supporting aerosol delivery and antisense medicines to the lung. In addition to continuing to advance our Phase II study in patients with COPD, we look forward to advancing our cystic fibrosis development program with the initiation of a larger Phase IIb study of ENAC 2.5 Rx in cystic fibrosis patients not amenable to CFTR modulators. Biogen recently offered an early preview of our Alzheimer's disease program, noting that MAP-T-RX demonstrated durable time and dose-dependent reductions in CSF tau protein, and was generally well-tolerated in the Phase I-II study in Alzheimer's disease patients. With Biogen, we look forward to reporting these results later this year. And as I mentioned, we, of course, look forward to data from Phase 3 VALOR study of dofusin in patients with SAD1 ALS later in the second half. In addition, in the first half of this year, we plan to host a series of disease-focused educational webinars with invited experts who will discuss current treatment options and needs for patients with cystic fibrosis, hereditary angioedema, and acromegaly. We look forward to hosting these webinars prior to top-line data reports for each of these programs. Around the middle of the year, we plan to wrap up this series with an investor-focused webcast to talk specifically about data from these programs in the context of the unmet market need. Importantly, with our pipeline progress to date and our key anticipated data catalysts this year, we are well positioned for a steady cadence of Phase III data for years to come. These data support our goal of 12 or more medicines on the market in 2026, including potentially six or more wholly owned medicines. And with that, I'll turn the call back over to Brett to close this portion of the call.

Thanks, Richard. This is an exciting time for Ionis as we expect to accelerate our next stage of growth and deliver a growing number of new transformational medicines to patients in need. we have the potential to bring three new medicines to market by 2023. And looking further ahead, we're well on our way to achieving our goal of 12 or more medicines on the market in 2026, over half from our wholly owned pipeline. In support of our new vision to commercialize our wholly owned medicines, we're making significant investments to aggressively advance these programs forward. And also as part of our strategy, as the wholly owned pipeline develops, We're setting our plans to determine the best path forward for each asset to maximize value to patients and to shareholders. And from across our entire pipeline, we look forward to a continuous flow of Bay Street data readouts for many years to come. In addition to investing in our wholly owned pipeline, we're investing in building our commercial capabilities and implementing our plans to commercialize our own medicines, advancing our technology, and potentially expanding it with new technologies that complement our anti-sense platform. We believe these investments will provide substantial returns, including double-digit revenue growth. And this growth will be driven as successful phase three programs enter the market, generating more value from the wholly owned programs we commercialize and from those programs partnered today and those we retain longer before we partner in the future. Before we close this portion of the call, I want to take a moment to recognize Rare Disease Day, which is being celebrated around the world this week. For many years, IONIS has dedicated and continues to dedicate substantial resources to serve patients suffering from rare diseases such as SMA and ALS. We're proud to say that in the case of SMA, we at IONIS pioneered a new market and brought the first disease-modifying medicine And in the case of ALS, in just a few short months, we again have the potential to deliver the first disease-modifying medicine to treat ALS. We're proud of these achievements, but we're only at the beginning. Of course, Rare Disease Day is about the patients and families living with rare diseases. Through our strong partnerships with these brave people, we're confident that we will continue to provide transformational medicines for more patients for many years to come. With that in mind, please join me in recognizing and celebrating the dedication and accomplishments of the brave patients suffering from devastating rare diseases, as well as the families who care for them. And with that, I'll open the call for questions.

We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, we will pause momentarily to assemble our roster. And the first question comes from Yarin Werber with Cowan. Please go ahead.

Great. Thanks so much for taking my progress and really nice progress. Two questions. Beth, maybe just for your housekeeping and then a question more about the pipeline. Just in terms of top line, your guidance for more than 600 in revenues, can you give us a little bit of a sense, how are you looking at Spinraza? Are you kind of expecting it to be kind of flattish in the growing segment, or are you expecting a little growth? And I know collaborative revenues you mentioned are going to ramp more in the second half, but anything you can guide us there. And then a quick question on the ENIX 2.5 technology. I mean, it sounds like we're going to get data – shortly, the study is fully dosed to phase 2A, and you're noting that you'll start a phase 2B now, which is new in CF this year. Can you just remind us, are we mostly going to be looking at expression in the CF patients, or are we going to be able to also look at some kind of pulmonary function like FEV1, or is the study just too small, the phase 2A? Thank you.

Sure, Yaron. Good morning. So thinking about our top-line guidance for this year, When you think about the commercial revenue stream, you know, really the only impact to commercial revenue is the transition for Tech City and WeLibra from a product sales top line in Europe to royalty revenue in Europe. You know, we continue to think that Spinraza has a very bright future, as I mentioned. We see the opportunity to continue to expand the numbers of patients on treatment, primarily outside of the United States. But I think the strong efficacy of Spinraza that's been, you know, well established in more than 11,000 patients for, you know, seven plus years for many of those patients, you know, really bodes well for Spinraza's future. And so, you know, we're not anticipating, you know, a negative impact at all on the top line with regard to Spinraza. And then on R&D revenues, you know, as we always do, we probabilize the many, many milestone opportunities we have over the course of the year. And by doing that, you know, we know that we have lots of opportunity to overachieve on our top line as the year progresses and we achieve those milestone events and the payments that go with them. So, you know, starting here in February, you know, we like to make sure that we have guidance that we can achieve. But consistently in the past, we have outperformed that guidance and we certainly have those opportunities this year as well.

Thanks, Beth. And to address your question,

I'm sorry, was there a follow-up? I was just going to ask, Beth, just remind us, if you don't mind, with SOBI, the royalty and milestone agreement and what you've disclosed, so we'll make sure everybody gets this correct in the models. Thank you.

Yep, sure. We haven't disclosed the actual royalty percentage, but think about it in the general range of royalties associated with a drug that we share in many of the post-marketing activities. So we continue to supply drug and handle the distribution. We continue to manage safety. We continue to be actively involved with KOLs and with setting the global strategy and working very closely with SOBI. So think about it really as a as a relationship in which we share in the opportunity for top line growth.

And then to address your questions, Yaron, on ENAC. So as a reminder, last year, We demonstrated and presented data on demonstrating robust reductions of ENAC levels in the lung of normal volunteers following aerosol weekly delivery with excellent safety and tolerability. This year, at the ATS meeting in May, we plan to present our first data in patients with cystic fibrosis in our Phase II study, which is complete now, and we'll share the results from that study. In that study, indeed, because this is our first experience in patients, safety and tolerability will be very important to demonstrate, and we're looking forward to sharing those results. In addition, as you said, it's a small study. It's also a short study. I think it's three months or so in duration. But we will be presenting data on lung function, and we're very much looking forward to presenting that data at ATS this year. So stay tuned for that. And then in addition, just as a reminder, ENAC is the first of several drugs moving into development for pulmonary diseases delivered by aerosol. We're planning to start another clinical trial this year to coincide with the ENAC studies and also the ENAC. We also have a phase two study for ENAC and COPD that's ongoing. And then more coming behind the clinical start this year. So we're very much looking forward to building this franchise out for pulmonary diseases.

The next question comes from Paul Mattheis with Stiefel. Please go ahead.

Hey, this is Alex. I'm for Paul. Thanks for taking the question. I was just curious about this new HFREF program for the AGT product and what the rationale is for that mechanism of action and whether development there is pending anything in hypertension or if You plan to go in that direction regardless of how the hypertension program goes. Thanks. Richard, would you like to take that?

Sure. Happy to. So, as you know, RAS inhibitors have been used in heart failure, and our preclinical work certainly points to a robust effect by targeting angiotensinogen in heart failure models. In addition to that, the idea here is certainly not a new one, but the design of the study in the HFREP patients allows us in a population where a lot is known about heart failure and the effects of RAS inhibitors, as well as safety in that regard, will allow us to do a strong proof of concept study It's powered to get us a bit more information, not only on biomarkers, but also on functional output. So we're excited about getting our first look in heart failure in humans with the reduced effect.

And as a reminder, Alex, again, we're planning to present much more detailed data, full data set from our Phase II study in patients with refractory hypertension at ACC. Great. Thank you.

You're welcome. The next question comes from Jim Bertino with Wells Fargo. Please go ahead.

Hey, guys, congrats on all the progress. Terrific stuff. Maybe on the financials and then a pipeline question. On the financials, just, Beth, does the Spinraza royalty outlook contemplate some COVID recovery and less spacing out of intrathecal injections? Just interested in how you're thinking about that. And then remind us if you're at the point with PTC where you've reached the sales threshold where you're participating in some of the upside from Latin America. for pig study and white liver.

Sure. Hi, Jim. So with Spinraza, you know, I think we and Biogen certainly anticipate that the COVID environment is going to ease over the course of this year. And as Biogen noted in their year-end earnings call a few weeks ago, they're already seeing patients move back to Spinraza from a competitive product primarily because they're seeing the need for the efficacy that Spinraza affords. And so the fact that that's already started in the fourth quarter, and we anticipate that to continue throughout this year and to be aided by the fact that the pandemic is starting to ease, certainly in the U.S. and around the world as well. For PTC, we were, you know, we hit that point where we started the clock on the 12 months, and so we would anticipate that we may be able to see some contribution from PTC sales in Latin America this year, but it will be late this year.

Great. That's helpful. And then maybe on the pipeline and for Richard, just on FUS1 ALS, could you speak about you know, the strength of supportive data, whether it's just, you know, the biologic rationale or any preclinical data and how that compares to the strength of support for SOD1 ALS. Just trying to get a sense of how validating, you know, one may be for the other. And then second part is just on your chart of catalysts or milestones. Huntington's update in terms of natural history study and open label extension is listed sometime in 2021. And so just maybe to give us a sense of what you would expect to see in contrasting those two groups. Thanks.

Yeah, I'll give a high level and then I'll pass it over to my colleague, Eric, to flesh it out a little bit. Plus ALS, of course, is a monogenic form and hereditary form of ALS. And because there is a known causative genetic component here, that we can directly target. We believe that the FUS ALS compound, which we've shown is a very good drug for lowering FUS, the FUS genetic component, bodes well for us and allows us, in fact, with our conversations with regulatory to move directly into a study that is registrational. And I'll pass it over to Eric for any other comments.

Yeah, thanks, Richard. It's mostly right. FUS is the known genetic cause of ALS, much like SOD1 drives SOD1 ALS. It's known to be a pathogenic protein which accumulates and aggregates in cells. And so it's similar to Tobersen in that we're reducing a genetic cause and reducing a pathogenic protein. And we do have preclinical data that supports that. in that regard. And then I think you asked about Huntington and what Grosh is planning to present. And I can just really refer you to their statements where they are continuing to plan to present some data from the open label study and the natural history study at some point in 2021. And then beyond that, we're really focused on the phase three study, which is progressing and scheduled for its readout in 2022

Great. Thanks for taking the questions, guys. Thanks, Kenny.

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

Hey, guys. Good morning. Just a couple questions. On the financial side, you guys have been profitable over the last few years. So I guess based on the guidance, this would be the first year you guys would be you know, turning a net loss. And obviously, that's justified by having, you know, pushing the wholly owned programs moving forward. But should we expect kind of a modest net loss like this for the foreseeable future in the next several years? Or should, you know, will it continue to grow? And then the second question on the pipeline is just related to The phase two programs, we have a decent amount of clarity on the phase three programs, when we'll get those readouts, when they could reach the market. But I guess as we look across the four phase two readouts over the course of the first half, which one of those do you think could make it to market first, or which one or two, and when might that be?

So thanks for the questions, Tyler, and good morning. We have, you know, we're in an enviable position with a very strong balance sheet at Ionis to invest in all aspects of the pipeline and our commercial strategy and our technology to really maximize the value for Ionis, to grow Ionis for the benefit of patients, shareholders, and the like. And that's exactly what we're doing now, as you know. And we're going to continue to do that to maximize our upside in all possible ways. We're not really projecting right now what next year or the year after will look like, but we will continue to invest over the next few years. Of course, we also have the benefit of multiple sources of revenue as Beth will as well as she reminds us of all the time through R&D revenue partnerships, as well as our commercial revenue. And we expect our next commercial product to be Toperson and TTR-like polyneuropathy and Huntington. potentially those three medicines reaching market in 2023. So you can see how the commercial revenue as well as the R&D revenue really offset those investments in the future. Too early to project profitability for 2022, but certainly we're going to be continuing to invest. Beth, would you like to add anything to that?

No, I think that was extremely well said, Brett. Maybe the only thing I will add is that we have a long history of financial discipline. and we will continue to exercise that discipline while investing deeply in our wholly owned pipeline and our technology and really ensuring that our medicines are prepared and ready to successfully launch when they get to market.

And as far as your, Tyler, your question on phase two readouts, which we have a lot coming, In the first half of this year, we have three wholly owned rare disease programs, hereditary angioedema, acromegaly, as well as the ENAC, cystic fibrosis program. I think, you know, based on what we see as the next step for those programs and the size of the next studies that would require them, that would allow them to be registered and approved, I would have to say that the acromegaly program, wouldn't you, Richard, is the furthest along that pending positive data from the study that's going to read out this year, this first half of this year, is probably positioned well to move to a pivotal study. Would you say, Richard? Sure.

I would say that after the Phase IIb for cystic fibrosis, there would be positioning for Phase III, but there's work to be done there. And then for PKKL, you're also in a position – depending on the results of this phase two study. But if positive, that too could move relatively quickly.

Right. Thanks for taking the questions. Thank you, Tyler.

The next question comes from Vincent Chen with Bernstein. Please go ahead.

Hi, congrats and thank you very much for taking the question. Maybe just one quick question. I was wondering, now that you've had a little more experience dosing RNA into the CNS, how do you think about likely dosing regimens for this? I noticed, for example, that the FUS ALS program is dosed, I guess, after the initial loading dose every two months, which is kind of the, I guess, the midpoint of the doses you tried in something, for instance, somewhat less frequent dosing than the SOD1 program. How do you think about the dosing required to treat CNS diseases?

Eric, you want to go? Yes, sure. I mean, we're always looking at extending our dosing regimen and making them consistent with the duration of action of the drug. And so in earlier programs, we were working out how to dose the CNS and learning how to get the drugs delivered in a way that they could reduce their targets, understanding those relationships. And as we learn more and more, we're understanding how to extend the dosing regimen. So I would look for continued expansion and extension of our dosing regimens in the clinic. It's a key objective, and we think the profile of the drug supports it. And we're working across all of our clinical programs to try and understand how we can best extend dosing, because obviously extended dosing is much more convenient for patients. And an example of that would be in the Huntington program, where we work with Roche to get the every four-month dosing into the phase three program that's ongoing and scheduled to read out in 2022. So we think that's a good benefit, and we can transfer that and hopefully extend it across more programs.

And if I could just add to that, if I could just add to that really quickly, Vince, you know, our strategy to enhance durability and reduce dosing frequency is coming in two forms, right? We're learning how to select molecules, more optimally, that allows us to have a longer duration of effect, and also through medicinal chemistry, new chemistries that are coming down the pipe. And then the last thing I would mention is, as we in Biogen have said, we have demonstrated very durable reductions in tau in our study with MAPT in patients with mild Alzheimer's disease. And that data will be presented this year, and I think it's going to be very telling how durable that is, the effects we're seeing with that molecule.

Have you gained any insight into, I guess, using the Huntington's data where you do now have some patients who have been treated on every four months dosing, and I guess the open label extension of the initial generation HD1 patients, Have you gained incremental sort of PKPD insights into sort of what, I guess, feasibility of longer dosing? And is there a reason why FUS is dosed more frequently than, I guess, what you're doing in Huntington's? Does it matter? For example, are you trying, does it matter if I'm knocking down further? Just kind of curious what the thinking is there.

Well, for some of the diseases like ALS, they're very aggressive diseases. And so you want to get enough drug on board quickly to make a difference. are progressing fairly rapidly. And so that's been some of the thinking in ALS. Huntington is a much slower progressing disease. And so you can take some time to get the drug to steady state and dial in the level of target reduction that we want. And I really think that some of it is a matter of, as you say, understanding the PKPD of the drug. And it takes time and some good human clinical experimentation to get that and really understand how our drugs are working in the CNS of humans as opposed to preclinical species. And so in addition to what Brett said in terms of optimizing the chemistries and understanding how to design the drugs, there's also just optimizing our dosing regimen and understanding how our existing drugs work. And that's what we did along with Roche in some of the hunting experiments that led us to that extended interval.

Great. Thank you very much for the discussion. And congrats again on the program. Thank you.

The next question comes from Joel Beattie with CITI. Please go ahead.

Hi, congrats on the progress. Could you tell us more about the Phase II trial that's ongoing for ENAC and COPD? And, I mean, the first part of that question is when could we see data from that trial? And then the second part is how predictive is your cystic fibrosis clinical data in predicting efficacy for COPD? Richard, thanks so much.

Yeah, so with our phase one, phase two A experience with the ENAC molecule, we were able to look at a broad spectrum of genetic modifications. And that led us to move into COPD because in addition to the ENAC target gene going down, we saw other important genes I don't think we've disclosed at this point, but there will be more information coming out in regard to what else we saw in that early work that led us to move fairly rapidly into a COPD trial. COPD trial likely reporting out, I don't know what we've put out publicly, probably early next year, as well as the phase 2B also would be next year.

And Joel, that's a study in COPD patients, nearly 200 patients for a little over three months or so of treatment, which the primary change will be FDD1. So we're looking at real clinical function outcomes in that COPD study.

And just to add, if you think about ENAC inhibition as a way to rehydrate the lungs, And so there's a strong rationale for using it in COPD, just like in cystic fibrosis, because you can restore the hydration balance by inhibiting ENAC.

Great. Thank you for all that. Thank you, Joel.

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

Good morning, and thanks for taking questions as well as congrats on the progress. My first question is that in terms of RD revenue anticipation for the 2021, are you guys not including any possible ownership, and that's why you have the current projection, or that's part of things already sort of included in?

Yael, sorry, could you repeat your question? I didn't quite hear you.

For the R&D revenue of 2021, are you guys not including any revenues from potential new partners, and that's what the current estimate to be?

Great question. I WANT TO REITERATE THAT OUR TOP LINE GUIDANCE REALLY REFLECTS THE NEW STRATEGY TO HOLD ON TO OUR DRUGS LONGER, PARTNER IF WE DO PARTNER LATER IN DEVELOPMENT, AND TO REALLY ADVANCE broad pipeline of homeo medicines to the market, um, primarily in neuro and cardio. Um, so really our, as we think about our R and D revenue, um, it's based off of, you know, amortization from, you know, prior upfronts and milestones, um, as well as, you know, a whole host of potential milestones, um, and licensing fees across our current partner programs in, um, in drugs and later stage research programs.

Okay, that's very helpful. Maybe just one question for Brett, which is that you mentioned that you also contemplate potential new technology to complement the current technology you have. What's likely to be an ideal technology that may be fitting into the bill?

So, thanks, Yael. Think about the technology investments that we're making in two ways, or in two buckets, if you will. The first are technologies or investments in technology that expand the reach of our current technology, antisense. So new chemistries, new like chemistries that open up new tissues like muscle, cardiac tissue, immune cells, cancer cells. We're working on that with partners, as well as heavy investments internally. New routes of delivery is another example of that to expand the scope of our technology, like we do with pulmonary and before that intrathecal, and we're doing more. Genomics is a third where, you know, everybody knows genomically linked targets are the best targets from a validation standpoint prior to validating a target with a drug. And we're investing in that. We have lots of hits. We have a lot of genomic targets that we're very excited about that are very novel. And these are through partnerships, as well as work we're doing with our functional genomics group internally. That's bucket one. Bucket two is what I think you were really asking about, which is new platforms. outside of antisense. And I really can't provide much detail there, except that we are investing in reviewing and conducting proof of concept studies and doing work in various areas to do things, to invest in technologies that can do things maybe more effectively, more efficiently that antisense can do. has less success in doing. So technologies, for example, that can more effectively upregulate the expression of change. Of course, we can do that with our technology. SpinRoz is the perfect example of that. But it's less robust to be able to do that. And technologies that do that will help us complement the things we can do to expand our reach for antisense. And that's a little further out, but we're working on it. And we're working on it in a very seriously. So stay tuned.

Okay, great. And thanks a lot. Again, congrats. Thank you.

The next question comes from Luca Isi with RBC. Please go ahead.

Oh, terrific. Thanks so much for taking my questions. Congrats on all the progress. I have two, one on HAE and one on AGT. So on HAE, I think there was some interesting back and forth on the editorial of the New England Journal of Medicine a couple weeks ago, where essentially the debate was around inhibiting liver PKK versus inhibiting plasma calocrine, which is what Texira is doing, and whether maybe knocking down liver PKK. PKK is less preferable than what Exira is doing. So wondering if you have any thoughts on that, and maybe bigger picture, if you can offer any color on how should we think about the upcoming Phase 2 data. And then on AGT, I know you have two molecules in development at this point. Wondering if you can comment on how you're thinking about the relative prioritizations of one versus the other, given, again, one is already in Phase 2 versus the other just entered Phase 1 in Healthy Volunteer. So any call there will be helpful. Thank you.

Thanks, Luca. Maybe I'll take a stab at the HAE question. Richard can fill in and then take the AGT question, the two molecules. So, you know, by far, the vast majority of calocrine is derived from the hepatocyte, the liver, whether it's in the plasma or what's, you know, elsewhere or what's in tissues. We are blocking pre-calocrine with our mechanism of action that essentially prevents the production of pre-calocrine into the plasma as well as the metabolite of pre-calocrine, calocrine, the active molecule that leads to bradykinin production and hereditary angioedema attacks. So we're doing, we're actually, we feel that our mechanism, our approach, is superior to an approach targeting calocrine because we prevent the molecule from ever being made. We don't have to mop it up after it's been made. And we think that this is potentially a superior approach to prophylactic treatment of hereditary angioedema. And we're really looking forward. The New England Journal data you referred to is very encouraging, and we look forward to presenting that Phase II data this first half of this year. Richard, if you want to add to that, please do or jump into AGT.

No, I think you covered that nicely. So, I'll jump into AGT for just a minute. We have two molecules, one that is phase 2B ready and one that is not yet in the clinic or has just started in the clinic, I should say. Our phase 1 study for ion 904 has started. And so we're moving forward with the 2.5 Leica. Now, a thing to remember is that the 2.5 Leica is a, based on all of our preclinical data, significantly higher potency molecule. So we think of it in two ways. First, in heart failure, it would be highly likely perhaps beneficial to have a molecule that we can administer very infrequently with a sub-Q approach. And in addition to that, the 2.5 Leica gives us a potential for oral. So it's really a play on really moving into a best, first and best in class. for that indication. And so we're moving that one forward quickly and we'll have data along the way in the phase one trial to be able to read out exactly what that potency looks like in man, potency and duration of action. So look for that. Thank you.

The next question comes from Jessica Fai with J.P. Morgan. Please go ahead.

Good morning. This is Daniel for Jessica Fai. Thanks for taking our question. Focusing on near-term readout in acromegaly, given that growth hormone receptors are found in multiple tissues throughout the body, do you see a risk in targeting a liver-specific growth hormone receptor expression alone with your Leica product? And then when it reached out, what should we expect with the top line data?

So, I can take that. Okay. Yeah. Thank you, Daniel. So, first of all, yes, we are targeting liver where the majority of the receptor, at least systemically, lies. And so the initial is in addition to somatostatin analogs, which have already, you know, gathered up inhibition of majority of receptors. And now what we're doing is significantly reducing the activity in the liver. Again, I think, you know, wait for the data, but the top line data is going to be IGF-1. And we'll be looking at also a... probably not top line, but later we'll be able to report out all of the information on quality of life where we're seeing some exciting kind of results. So I think that's what you're going to be able to see as we move forward and why we think liver targeting is likely to be not only additive, but potentially even as a single agent. We've started our single agent study.

Yeah, and I just add to that, liver is also the primary source of IGF-1, in addition to the growth hormone receptors in hepatocytes, which of course drives this disease. And, you know, what we're hoping to show is that patients who are poorly controlled on somatostatin analogs, that we can get a fair number of those patients, a good number of those patients, under control to normal IGF-1 levels. And that's what we're hoping to do. And we think this mechanism... has the, you know, has the potential to do that. So we're looking forward to sharing those results.

Thank you.

The next question comes from Mani Faruhar with SVP Learing. Please go ahead.

Hey, thanks for taking the question, guys. We'll start with a specific one and then go to a more general one. There's a little discussion about the HAE opportunity on this call. Can you get into more detail on where you see the opportunities that commercially and clinically in terms of frequency of administration, depth of attack reduction, where you see that opportunity and how that would translate into a clinical trial design that can generate a label that could support a success in a pretty competitive market? And then the second question more broadly is, There's a lot of discussion around all the therapeutics outside of the liver expanding into other areas of therapy. Most of our competing companies seem to be unaware of your success in CNS. As you think about producing data of effective knockdown and therapy in lung and other indications, how should we think of other target tissues? How should we think about the tempo with which that could translate into into an acceleration on the R&D partnership side as you sort of expand out the aperture of potential target tissues that you could find, in which you could find partnerships?

So, thanks, Bonnie. Great questions. So, I'd like to, Onesa, who's on the call, hasn't had a chance to speak up, to talk about the opportunity that we see in HAE. As you say, it's a You know, there's drugs out there already that are treating this disease. But we think we like the potential of our current model. But I'd like Oneza to maybe speak to this.

Sure, I'd be happy to. Hi, Mani. So as I think it's already been said, but I think it's worth reiterating is that we're really looking at a treatment that's designed to prevent attacks rather than simply kind of treat acute episodes on demand, right? And we expect an improved tolerability profile than existing therapies as well. I think the name of the game over here in this marketplace has really been about zero tax. And as you said, Tax Zero has done a nice job as they've entered the market with that. What we see as a continued opportunity from an efficacy perspective is the durability of response. We know that initially you can get down to zero tax, but can you actually maintain the zero tax over time? And we really believe that the PKK, you know, again, the mechanism and what's already been described on the call will help us achieve that. And, of course, we'll see that as the Phase II data comes out. But that is really where the positioning competitively of the product will be. And then, of course, you know, we know that the current treatments on the marketplace have, you know, a more viscous, difficult-to-inject profile as well, and we'll certainly, you know, beat that profile as well. So that's why we're looking at it.

And so we're excited. We think our PKK-like molecule has potential to be the best in the class. We have to prove it, of course. with respect to reduction in attack rates, but we shall see. We're certainly getting great reductions in PKK, which is the cause of this disease. I mean, bradykinin is, but PKK is the promoter of bradykinin levels. Regarding other target tissues, Mani, there are a lot of questions in your question, so let me take a stab at it, and if I don't get it right, I'll just follow up, but yeah, our CNS platform, We've just begun to scratch the surface of new molecules, new drugs for devastating neurodegenerative diseases that are coming into our pipeline. Our pipeline's already very rich, and it's going to get richer with more and more neurodrugs as we continue to validate the platform, showing again and again robust reductions in target in CSF, as we're doing again this year with the TAO program, as we've done in the past with Huntington and SAD1 and Spiraza. And more is coming. And as Eric referred to earlier, we're continuing to optimize delivery to the CNS with less frequent dosing, and we continue to move forward with new molecules to do that. Lung is a potential new franchise. We're very excited about this. You know, years ago, we had a lung program, and we showed We had evidence of activity, but it wasn't good enough. And we went back to the lab and developed new chemistries, Gen 2.5, which seems to be getting it done. We're getting great target engagement, excellent safety and tolerability, and that's a new franchise that we're very excited about opening up new organs and tissues. And then with respect to, you know, outside of new routes of delivery, we're continuing to look at routes of delivery all the time. But outside of that are, you know, new chemistries to open up new organ systems and tissues. And, you know, we believe that we will be in development this year for a muscle like a program. That's our plan. That's our goal. And we can't provide more details on that at this time, but that's just one of several that we think are going to be coming for targeting muscle. And not just skeletal muscle, but also heart failure, cardiac tissue. and we're very encouraged by the work we've done so far, the data we've generated. And more are coming, too. And, you know, we've also talked about our pancreatic beta cell program. We've done work with AstraZeneca. We're doing our work ourselves. And we have other life that's coming for new cell types and tissues that we're very encouraged by the data we've generated so far. And with respect to partnerships, I'm not sure if you meant – um uh bringing you know partnering out licensing or in licensing but i'll assume you mean in licensing we've already established partnerships in um with companies and investing our um our capital to broaden our scope in leica chemistries and we're planning um hoping to do more of that um so that uh we're going to take advantage of partnerships um to expand our leica platform and to complement um all the great work we're doing here at Ionis under our roof in our medicinal chemistry program. I hope that answered your question.

Yeah, that's helpful. I think what I was thinking about is if you look at consensus estimates looking out forward, they don't contemplate acceleration in your R&D revenue from expansion into a broader universe of out-licensing opportunities for you. I was thinking, should we think about Other opportunities, should you prove out delivery in lung, delivery in muscle, serial and other tissue types? Should we be thinking about changing the top line sort of CAGR, as it were, of growth of R&D? Should we think of this as more of a step function as one of your smaller RNAi competitors who discussed it? Just how do you think about the size and the speed with which you guys could capitalize on potential expansion R&D revenue if you're attacking different tissue types? That was more of my question. Sure.

Well, expanding the scope of the platform certainly will drive even more interest by other companies wanting to partner with us to take advantage of all the great progress we're making. I mean, there's so much interest already in what we're doing today. And then there's also tremendous interest in working with us to develop these technologies. You know, we're working with AstraZeneca on new chemistries and new routes of delivery. We're working with Biogen on new chemistries to maximize delivery to muscle as well as CNS. And there will certainly be interest as we expand this scope by other companies that will want to take advantage of this in the future. And sure, we'll be doing more partnerships in the future. But as we emphasized earlier in the call today, you know, we're going to be very selective in the partnerships we do. Not just for the R&D revenue that you referred to, of all that's nice. It's really to bring strategic value to the company, you know, to really expand the scope of our technology and to really, you know, strengthen our leadership position in this space. So, you know, I do think that partnerships based on advancements we're making in the technology that you referred to are likely in the future. I also think that partnerships for some of the broader indications that we're working on are possible too, even without those, you know, within the existing pipeline. So lots of potential for partnerships down the road, lots of interest, and we will be selective and we'll not just do financial return, but also for strategic value.

Great. That's really helpful. Thanks. Thank you.

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

Oh, hi. This is Chiang for Jason. Thanks for taking the question. I guess the first one on Huntington. Can you outline some of the things you've been looking at with your natural history cohort and open label data that are going to be presented sometime this year? What can get you comfortable in ability to show improvement of functional endpoints and safely ultimately? Curious how important it is to see your matching natural history cohort is deteriorating over 15-month observation periods. I guess the second question on HAE, just to confirm, to generate competitive data and to compete in the space, is the thought that you will need to generate longer-term follow-up data beyond the typical six-month trial to prove better maintenance of ATT&CK reduction benefits? Thank you. Eric, would you like to talk about the Huntington?

AND I'LL TAKE THE H8.

YEAH, SO WE TOUCHED ON THIS A LITTLE BIT EARLIER ON THE CALL, AND AGAIN, ROCHE HAS STATED THAT SOMETIME THIS YEAR THEY'RE GOING TO DISCUSS SOME DATA FROM THE OLE AND NATURAL HISTORY STUDIES, AND WE'LL SEE WHAT THEY PRESENT, AND BEYOND THAT, I REALLY CAN'T COMMENT, BUT I DO THINK THAT THE KEY END POINT AND THE KEY THING TO FOCUS ON IS THE ONGOING PHASE THREE THAT'S SCHEDULED TO READ OUT IN 2022. Huntington's a slowly progressing disease, and this study is powered to give the drug the time to lower mutant Huntington, which we know it does, and have a disease benefit and really test the hypothesis that lowering mutant Huntington will make a disease benefit. So that, to me, is the key experiment.

And regarding the HAE question, the phase two study, as we said, we'll read out and we'll present top-line data at least. hereditary angioedema. We're looking at frequency of attack rates in over about a three-month period of time. There's a wealth of data published with existing therapies on attack rates that we will, you know, we'll compare to. We'll look at it and we'll ask ourselves, and we'll answer, you know, ask ourselves whether or not we're competing, we're competitive, or potentially even superior in reducing attack rates. And based on the data, we have to review the data, we'll decide on the next steps. We obviously have already had various options in place based on the data outcome, but I would not rule out this program We have to look at the data, and then we have to decide what the best phase three strategy would be.

One other piece of information to add to that, Brad, is that we have moved all eligible patients into an open-label extension that allows us to continue to monitor attack rates on the long term. So we have an open-label extension for the phase two program. that is ongoing, has already started. Many of these patients have been in the open-label extension for many months. And so that is where we're going to get long-term data very quickly.

Yeah, and I will just add to the need, I think you said, beyond six months. So if you take a look at the real-world data and how patients are doing currently, you start seeing excursions from their therapies as early as three months And then, you know, more substantial declines between that three- to six-month period. So we don't think that, you know, we would need data well beyond that period to demonstrate it. Yeah. Thanks. Thanks, Denise.

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

Hi, thank you so much for taking our question. This is Sonia on for Salveen. A few quick questions from us. I was wondering, could you give us the status on your prion disease asset and when you can expect data there? I think there was going to be a trial initiation sometime mid-year. And then also on the muscle Leica, if you could give us some color on what indications you would potentially go into, that would be really helpful. Thank you.

Eric, would you like to run with that? So I'll start with muscle-like. We're not really prepared to discuss exactly what indications we're going into at this time on the muscle program, but we're very excited about what we're doing in terms of being able to target the muscle, and there's lots of opportunities there across various spaces of neuromuscular disease. And as for the pre-on program, I can't provide too much color on timing, but we have identified several candidate molecules and working as hard as we can to rapidly get the best candidate forward and move it to patients.

Thank you.

Thank you, Sonya. This concludes our question and answer session. I would now like to turn the conference back over to Brett Monea for any closing remarks.

Well, thank you, everybody, for joining us on today's call, and thank you for all the questions in the Q&A session. Obviously, here at IONIS, we're very excited about the future, the present and the future of the company, and we're very much looking forward to providing additional information updates on the progress, the great progress we're making at IONIS throughout the remainder of the year. So, thank you again for joining and have a great day.

This concludes our conference. Thank you for attending today's presentation. You may now disconnect.