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spk11: Good morning and welcome to Ionis Pharmaceutical's first quarter 2021 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. As a reminder, this call is being recorded. I would like to turn the conference over to Wade Walk, Vice President, Investor Relations, to lead off the call. Please begin.
spk04: Thank you, Betsy. Before we begin, I encourage everyone to go to the Investor section of the IOMIS website to find the press release and related financial tables, including a reconciliation of the GAAP to 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 have 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. And joining us for our Q&A will be Oneza Katarae, Chief Corporate Development and Commercial Officer, and Eric Swayze, Executive Vice President of Research. I would like to draw your attention to slide three of our presentation, which contains our forward-looking language statements. 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 detail. And with that, I'll turn the call over to Brett.
spk06: Thanks, Wade. Good morning, and thank you for joining us on today's call. Last year, we introduced a new strategy to drive growth by developing and commercializing medicines from our the own pipeline. Since that time, we have taken a number of key steps that have advanced our strategy and moved us closer to successfully commercializing our own products. Most recently, we expanded our SOVI distribution agreement and restructured our Texetti operations. This transaction unlocked significant resources that we are redeploying to advance our wholly owned pipeline and prepare for commercialization of our highest priority medicines, which include GTR-Leica and ApoC3-Leica. We are also using savings from the SOBI transaction to invest even more in our technology to further broaden the reach of our therapeutic capabilities. Turning now to our pipeline, we were particularly with hereditary angioedema, or HAE. Based on these encouraging results, we're advancing into a phase three study where we hope to further demonstrate the potential of this medicine as a best in-class product that could change the standard of care for patients with this disease. We also recently initiated pivotal studies with two wholly-owned neurological disease medicines, ION363 and ION373, for patients with FUS ALS and Alexander disease, respectively. Given the severe unmet need of these patients and the progress we have made with regulators, both medicines are on an accelerated path to the market. And we are pleased with the progress we're making across our rich phase three pipeline with medicines for patients with ATTR amyloidosis, FCS, LP little a driven cardiovascular disease, and ALS. These phase three programs remain on track with data from the phase three Valor study of Tofersen in patients with side one ALS expected this fall. Positive Tofersen results would demonstrate for the first time that a disease-modifying treatment is possible for patients with ALS. A positive outcome in this study would also move Tofersen one step closer to becoming our next commercial product. And additionally, Tofersen's success would further solidify our leadership position in the development of first in-class medicines for the treatment of neurological diseases. In support of our strategic and pipeline objectives, earlier this year we launched a large capital project to expand our manufacturing and R&D capacity. This project is important as we move our late and mid-stage medicines toward the market. It's also important as we advance our technology with new chemistries, including novel Leica chemistry and new routes of administration. We have made significant progress in advancing our pipeline and our business strategy. Our financial results reflect our strategic investments and keep us on track to achieve our 2021 guidance. And importantly, we remain well positioned to have 12 or more marketed products in 2026. With that, I'd like to turn the call to Beth to review our first quarter financial results, and Richard will discuss recent pipeline updates and preview key upcoming catalysts through the rest of the year. After Richard, I'll wrap up our prepared remarks before taking your questions. So now, on over to Beth.
spk13: Thank you, Brett. In February, we provided guidance for this year that reflects our new strategy to maximize the value of our wholly-owned medicine, focused primarily on commercializing our rare neurological and cardiometabolic disease programs. Our first quarter results of 112 million in revenue, 159 million in non-GAAP operating expenses, and a non-GAAP net loss of $45 million reflected this new strategy and were in line with our expectations. Now to turn to our revenues. Spinraza generated over $521 million in global sales. We earned $60 million in royalty revenue as a result, and virtually all of that revenue falls to our bottom line as profit. Our first quarter Spinraza revenue decreased slightly compared to the prior quarter because our royalty rate resets at the beginning of each year. As in prior years, we expect to reach the highest royalty tier by midyear. The RESPOND and DEVOTE studies continue to progress well. These studies remain important elements of Biogen's ongoing efforts to enhance SMA patient outcomes and guide treatment decisions. We look forward to additional steps Biogen plans to take to further reinforce Spinraza's proven efficacy and safety profile in SMA patients of all ages. Spinraza remains the SMA market leader, and with over 11,000 patients on treatment and over 60,000 SMA patients, in markets where Biogen has a commercial presence, we believe Spinraza will continue to be a foundation of care for the treatment of SMA. We also generated combined Tecseti and Weylibera revenue of $20 million. As a reminder, our guidance reflects a shift in revenue for Tecseti and Weylibera due to the change in under our with SOBI. We are pleased with the smooth transition of our Texetti and Waylibera operations to SOBI, which are now complete in Europe and well underway for Texetti in North America. Under our new distribution model, our commercial revenues from these products shift from product sales to distribution fees based on SOBI's net sales. In the first quarter, our revenues reflected this shift in Europe. Beginning in the second quarter revenue sales in North America will also reflect this shift. In addition, we earned nearly $30 million of R&D revenues in the first quarter, which we generated from multiple sources related to our partnered programs. Our non-GAAP operating expenses were $159 million in the first quarter. which represented a modest increase compared to the same period last year and was in line with our guidance. The increase was driven by higher R&D expense related primarily to advancing the phase three studies of TTR-LICA and APOC3-LICA and development activities for multiple programs across our wholly owned pipeline. As expected, our SG&A expenses decreased in the first quarter. primarily due to cost efficiencies we realized from the integration of Axia and the restructuring of our European operations. An important element of our new strategy is our focus on investing internally for growth, and our first quarter results highlighted this aspect of our strategy. With our first quarter results, we remain on track to achieve our 2021 guidance of a net loss of less than $75 million on a non-GAAP basis. We expect our revenues in Q2 to be similar to the first quarter, and we're projecting an increase in revenue in the second half of this year, driven in part by increasing R&D revenues as we achieve key milestones for our partner programs. Already in the second quarter, we achieved a $10 million payment in Biogen for Advane Ion 541, our medicine targeting a taxon 2 for the treatment of ALS. We project operating expenses to increase over the course of this year as our mid- and late-stage medicines advance in development. We expect our R&D expenses to increase as the Phase III studies of TTR Leica and ApoC3 Leica progress as we initiate the ApoC3 Leica Phase III study for patients with severely high triglycerides. And as we prepare to advance KKL, into a phase three study we expect our sgna expenses to decrease further in the second half of this year as we realize savings from our sobe transaction last month we send our balance sheet when we completed a 630 million dollar convertible notes offering these notes carry a zero percent interest rate we completed this transaction to accomplish two primary goals. To refinance the $310 million of 1% convertible notes due in November. And second, to fund a large capital project we recently initiated. We evaluated multiple financing options to achieve our goals. And ultimately, with a 0% interest rate, we determined that the low cost of capital we secured through the convertible debt offering was our best financing option. We maintain a strong balance sheet to support our wholly owned pipeline and our technology. We use a portion of the proceeds from our debt offering for a large capital project to expand our manufacturing and R&D capacity. We expect this multi-year project to cost between $250 million and $350 million. We anticipate complete project in 2024, and once complete, we will have the manufacturing capacities to support the future needs of our wholly owned pipeline. Additionally, we will increase our capacity to bring forward novel chemistries, including new Leica chemistry. Continue critical functions as we advance our wholly owned pipeline to the market. This project enables us to build on our leadership in development chemistry and manufacturing of oligonucleotide therapeutics and to ensure we have the infrastructure we need to achieve our strategic objectives. As you can see, we have taken important steps already this year to drive growth and to position us to achieve our goal of 12 or more marketed products in 2026. And with that, I'll turn the call over to Richard.
spk15: Thank you, Beth. We continue to execute on our pipeline goals this quarter. achieving a number of successes and advancing towards significant value driving catalysts. We're particularly pleased with the positive phase two results from Ionis PKK LRX, our once monthly subcutaneously administered medicine for the prophylactic treatment of hereditary angioedema or HAE. Ionis PKK LRX demonstrated a mean reduction of up to 97% in HAE attacks. together with favorable safety and tolerability. We look forward to reporting these Phase II results in greater detail later this year. We are now advancing Ionis PKK-LRX into a Phase III study. We hope to further demonstrate its potential to be the best in class prophylactic treatment for patients with HAE. We look forward to sharing our Phase III plans with you later this year. We also continue to be pleased with the progress of our Phase III pipeline, including our partnered programs, Pellicarsen and Tofersen, as well as our wholly-owned programs. Ionis TTR-LRX remains on track in our studies in patients with TTR polyneuropathy and TTR cardiomyopathy. And ApoC3-LRX also remains on track in the Phase III study in patients with FCS. We expect to begin a second phase three study of APOC3-LRX later this year. This second phase three study will be in patients with severe hypertriglyceridemia, KSNS prevalence of over three million patients in the U.S. We also expanded our late stage pipeline with the initiation of pivotal studies for ION363 in patients with FUS-ALS and of ION373 in patients with Alzheimer's disease. Because of the strong efforts of our development team, both of these medicines for rare, fatal diseases are on accelerated paths to patients. From our mid-stage pipeline, just this week, positive data from the Phase II study of Ionis AGT-LRX in patients with resistant hypertension were published in the Journal of American College of Cardiology. We also plan to present these data at the ACC conference later this month. Based on these phase two results, we've advanced Ionis AGT-LRX into a larger phase two B study in patients with resistant hypertension on three or more antihypertensive medications and a phase two study in patients with chronic heart failure with reduced ejection fraction. In a Phase IIa study of Ionis GHR-LRX in acromegaly patients, poorly controlled on somatostatin analogs, we achieved substantial reductions in growth hormone binding protein, which is a surrogate marker for GHR inhibition, together with favorable safety and tolerability. We plan to discuss these results in greater detail, together with interim results from our ongoing open-label extension study later this year. With IONIS ENAC 2.5 Rx, we recently learned of a finding in a long-term preclinical toxicology study. While we believe we would have been able to work through this finding, doing so would impact our timelines. As a result, we have reevaluated the totality of available data and decided to continue further development of IONIS ENAC 2.5 Rx. We have a number of late-stage research programs in our pulmonary pipeline. which we are now prioritizing and continuing to evaluate for further development. Now to upcoming catalysts for neurological disease pipeline. We're very pleased with the progress of IonisMap TRX, our medicine designed to reduce tau protein associated with Alzheimer's disease. We were encouraged by the top line results from IonisMap TRX Phase 1 study in patients with Alzheimer's disease biogen reported earlier this year. IonisMap TRX demonstrated durable time and dose-dependent reductions in CSF tau protein and was generally well tolerated in this study. Biogen plans to report these results at the Alzheimer's Association International Conference in July. Our ALS program is also advancing well. Tofersen has the potential to become the first disease-modifying treatment for ALS and fundamentally change the ALS treatment landscape. We believe Topresin 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 in pre-symptomatic SMA patients treated with Spinraza. Biogen recently initiated the ATLAS study to address this question and hopefully demonstrate a similarly profound effect with Tofersen in pre-symptomatic ALS patients. And with the programs for FUS ALS, C9 ALS, and for the broader causes of ALS, we are addressing essentially all forms of this disease. Importantly, with our pipeline progress to date and our key upcoming data catalysts throughout this year and over the next few years, we remain well positioned to achieve our goal of 12 or more marketed medicines 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.
spk06: Thank you, Richard. In the first quarter, we took important steps to maximize the value of our wholly-owned pipeline. We continue to advance and expand our Phase III pipeline, with Ionis TTR LRX and APOC3 LRX advancing as planned. and through the initiation of Pivotal Plus ALS and Alexander Disease. We also delivered positive results for Ionis PKK LRX and HAE and are planning to advance this medicine into a phase three study. We have taken important steps to strengthen and streamline through our acquisition of Axia and the restructuring of our Texedi and whey liver operations. We have accelerated our commercial strategy retained key commercial expertise and unlocked significant resources that we are reinvesting in our wholly owned pipeline technology in the build-out of our commercial capabilities. Importantly, we are financially strong and on track to achieve our 2021 financial guidance. We're using our strong balance sheet to invest in our strategic priorities and execute on all of our I'm proud of the progress we have already made in these areas, and we look forward to sharing more this year as we advance our medicines and move closer to our goal of 12 or more marketed medicines in 2026. And with that, we'll now open it up for questions.
spk11: 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're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Luca Izzi with RBC. Please go ahead.
spk09: Oh, fantastic. Thanks so much for taking my questions. Maybe two here. One, maybe on Huntington's disease here for either Eric or Richard. I think we saw the full data last week from Roche, and it looks to me that at least the high dose may have unfortunately accelerated the disease given that the higher dose actually increased ventricular volume over time versus the low dose in placebo. Wondering if you share the same view here and whether such data substantiate the hypothesis that sparing the wild type may matter here. So again, any thoughts there would be helpful. And then second on HAE, congrats on advancing the program into phase three. So again, wondering if you could give us some color on how you're thinking about the phase three site design. Will it be placebo control? Will we need to run a head-to-head trial versus Dexiro? Are you exploring monthly dosing or bimonthly dosing? Again, any thoughts there would be great. Thanks so much.
spk05: Hi, it's Eric. I guess I'll take the Huntington question and then kick it over to Richard for a much more entertaining PKK answer, I hope. On Huntington, yeah, the data was presented at CHDI, and it basically reinforced what the IDMC had, and it was the same data set. It said the drug wasn't working and providing a benefit. It's true if you look at the absolute numbers that the more frequent dosing was descending a little faster than placebo, but all of those curves were within the bounds of natural history. As to what it means, I think it's premature to tell. Bosch had some hypotheses that they discussed, all of which are valid and make sense to investigate, but I think we really need to unpack the data and do their analyses and see what we can learn from the study. We really don't know at this point.
spk15: So on the HAE question, just a quick up front that we have some regulatory meetings over the next couple of months, and we will be bringing details of the Phase III program a bit later this year. At this point, we're moving forward with those regulatory and then into a Phase III program.
spk06: Yeah, and let me just add to that a little bit. So, and what I think would be very helpful for Arneza to provide some of her thoughts, too, on why we are so excited about the market opportunity for this drug, because we really do think it has the potential to be the very best in the class. It will certainly be a placebo-controlled study. I mean, that's what is expected in phase three trial designs, and there's precedent for that with Tech Zero and other drugs as well, and certainly monthly. over therapies, which is right over to Anais.
spk01: Yeah, I'd be happy to add some color over here. I think going back to your question, Luca, of is it going to be placebo-controlled or head-to-head, it's certainly a question for us as we went into the marketplace to kind of test out the profile of our PKK product, and we looked at it versus current treatment options, including Tech Zero. We really got the feedback based on the profile that we have that this has the potential to be a best-in-class profile, and really a placebo control study will be more than sufficient to really demonstrate that. If you take a look at kind of the trifecta of efficacy data that we are able to deliver on this, prevention of attacks, the fast onset of max clinical efficacy, And the reduction in kind of acute treatments, that's a trifecta of efficacy that's very pleasing and attractive for the HCPs in the marketplace. So that along with the more convenient administration is just a very highly valuable and competitive profile. So we're feeling very great about what this is going to bring to the unmet need for hereditary angioedema. patients in prophylactic treatment.
spk06: Thanks, Anaza. Got it. And as Richard said, we'll provide more details on the base redesign later this year. Got it. Fantastic. Thanks so much. Super helpful. Thank you.
spk09: Thank you.
spk11: Our next question comes from Yaron Werber with Cowan. Please go ahead.
spk16: All right. Thanks for taking my question. I have a question specifically to start with on acromegaly. It sounds like, if I recall correctly, the study was fully enrolled in December. It's a 12-week study, but plus there's an open label extension, and it looks like you're planning on releasing the data in the second half, and it says plus the OLE. Any medical meetings that we should be aware of where this could be targeted, or is this going to be in a press release? And then, any thoughts about what's the next steps with this program, given what you know from the phase one data already? Thank you.
spk08: Yeah.
spk06: So, we are wrapping up the study now, and we'll be going through the data, and it's going to, the analysis of that data will take us into the second half of the year, as mentioned in his statements earlier. And then we're gonna share the data as soon as we can. We'll probably will not wait for a medical meeting to share the results of that study because we don't have one targeted right now. Although we'll look for such a place so we can share the data in detail. But we'll figure out a way this summer to get the data out along with the open label extension data which has accumulated more and more data. So it's a rich data set that we didn't want to We cite up that review. Remember that we also have a second study in progress for our GHR-like medicine, Nacromegaly, which is in frontline monotherapy phase two, which is getting off the ground now and getting started. You know, I think we're going to want to look at all the data before we can make a decision on the next steps. for either the patient population in the somatostatin-treated patients that are poorly controlled versus monotherapy, and then make decisions on what the next steps for the program would be.
spk16: Great. And then also, any update on the potential Phase I or IND filings for Angelman syndrome? Thanks so much. Yeah. We're hoping to get the clinical study started this year. You've definitely selected a construct and you're planning on filing an IND? I mean, have you made a decision definitely to go forward? Yes.
spk06: Thank you, Rick. Definitely. You got it. Thank you, Yarin.
spk11: The next question comes from Yanin Zhu with Wells Fargo. Please go ahead.
spk00: Hi. Thanks for taking my question. I just have a first question on the update from the EMAC program. I wanted to under-if you could share a little more about the findings from the toxicology studies, long-term tox study, and whether the tox is specific for the pulmonary route of administration, and whether it's related to the target, or generally speaking, the ASO presence in the lung. Thanks.
spk06: Sure, Yann. And so I want to just emphasize that the clinical data for our ENAC in Phase 1 and 2A gave us very encouraging results. It has nothing to do with clinical data. We demonstrated target engagement in Phase 1 and good safety in cystic fibrosis patients as well as in patients with COPD. And the cystic fibrosis data will be presented to ATS later this month. The pre-clinical finding was part of the long-term talks, as Richard stated in his statements. It's going to take us time to figure out what that's about, and due to the delays that are just associated with those types of investigations, we took a look at our emerging pipeline in pulmonary diseases, and we think we have better targets to invest in that will bring greater value to the company. and to the patients going forward. And we do not believe that this is read-through to the platform for pulmonary disease at all. This is something that happens in preclinical tox studies sometimes, and we're going to work through it.
spk00: Got it. That's very helpful. And then a question on the TTR-LICA program. Alnylam recently reported Vutristeran Phase III study in TTR polyneuropathy. Just wondering your take on their data and their, you know, every three months frequency of administration and how you see that product profile and whether there's opportunity for the TTR Leica to position against that profile. Thanks.
spk06: Sure. Completely respect the question, but it's not our position to comment on other people's data. What I can say is that we love our very much, we like our drug a lot. And the phase three study in polyneuropathy is enrolling very well, and we're looking forward to the results of that study next year. And the cardiomyopathy study for TTR enrolling very well in addition. Onaysa, we've done quite a bit of market research on frequency of administration and the value that brings to the marketplace, and I would love to have Onaysa maybe comment on that.
spk01: Yeah, sure, I'd be happy to, Ray. I think your question was monthly versus quarterly. You know, in general, I would say most kind of market conditions, particularly from a patient perspective as well as an HCP clinician perspective, you know, there are definitely, you know, some improvements in profile when you go from a daily to a weekly, you know, and a weekly to a monthly. But after that, I call it there's just a lot of diminishing returns on more, you know, extended frequency, particularly for a subcube. And we've found that here for TTR as well. We've done some extensive market research to understand that dynamic a little bit more because it's really one of our key products that we're bringing forward to commercialization. And we're not seeing really a big difference between the monthly and the quarterly at all. I think rightly so. Physicians are more... I'm excited about the profile of the product as well as, you know, the large clinical trial that we have ongoing in cardiomyopathy and really looking forward to seeing our data, you know, with and without standard of care. I think that's going to be the place of big differentiation here.
spk00: Got it. Thank you. That's very helpful. Thank you.
spk11: The next question comes from Yale Jen with Laidlaw and Co.
spk07: Please go ahead. Good morning, and thanks for taking the questions. We understood the failure of the Huntington's disease trial, and I believe you guys have a very great confidence on the in the AIS. Would you mind just maybe compare or contrast a little bit between these two and besides the different diseases and where your confidence seems to stem from for the VALOR trials?
spk06: So I'll open up and then it's a very good question, Yael, and then maybe Eric can expand. and confident in our neurological disease platform. We think it's leading in the industry in many ways. Spinraza and Entopressin coming right behind that and plus ALS and a whole host of other drugs. All of the drugs, and there are quite a number now, not all have been presented yet, All of the drugs that we've took into clinical trials have shown target engagement and robust target engagement in our trials. So we know we're hitting the root causes of diseases or the type we're going after to test our clinical hypotheses. And SAD-1 ALS, Stokersen, is no different than that. We've shown very nice reductions in SAD-1. And based on the TASE-2 data that was published in the New England Journal of Medicine and we've presented presented, our confidence is high in Toperson. And our confidence is, and it lends us even greater confidence for ALS in general. Because, you know, if Toperson is successful, and like I said, the preliminary, not preliminary, but the phase two data was very encouraging. it bodes very well for the rest of our ALS franchise, which we have four drugs now in clinical trials, two in phase three. The other part of your question I think had more to do with being able to target different regions of the brain. How is ALS compared to Huntington? Is it compared to other drugs in our pipeline for neurological diseases? And there I'll ask Eric to jump into the weeds a little bit deeper.
spk05: Yeah, sure. Yeah, and Brett alluded to one of the great things in the data packages is that we have real evidence in the New England Journal paper for improvement in disease. We didn't have that in Huntington and all we had was target reduction and decided to look at it in the phase three. As far as targetability, we've talked about this at length before, I think our Treasure Trove of preclinical data has done a good job of teaching us where we can target in throughout the brain. And we have a high level of confidence that we can target all the regions that are affected in ALS. And we have a high level of confidence that we can target much of the brain regions that are affected in Huntington's disease. And Roche has talked about these extensively at medical meetings and presented a lot of the data. It is true that regions like the caudate are less susceptible, but have a case that makes sense to us that we could target that region. So I have a very high level of confidence that, especially in programs like the Toverson program and our MAP-T program and others that are targeting the whole brain and need to target the whole brain, that we can engage those regions.
spk06: And as a reminder, Yale, as mentioned in Richard's statements earlier, the MAP-T, the tau data, will be presented in July, I believe, this summer. Yes. And I think that that will end even further confidence because, as Biogen has said, the reductions in tau have been substantial and durable.
spk07: Okay, great. That's very helpful. And maybe just one more question here, which is a little bit forward-looking one. In terms of the HAE, you guys seem to sort of decide to move forward with phase three. Let's just assume it's successful. Just curious whether this is a drug you guys want to potentially launch it by yourself or potentially to be a partner at least at this early stage of thinking. And thanks.
spk06: It's a great question, Yale, and it's one that we're working through right now. We think this is a great drug, we really do, and whether or not we will keep this to ourselves or not, we will provide an update that will provide an update on the phase three design later this year. We're moving into the phase three study ourselves. So just, if you could just stay tuned on that, it's, you know, Right now, Anais' team is conducting a lot of market research and competitive profiling work to make the business case, or not. And if you just stay tuned, we'll give you an update in a little while. Okay, great.
spk07: Thanks a lot, and again, congrats for the quarter.
spk11: Thank you. The next question comes from Paul Matias with CIFOL. Please go ahead.
spk10: Hey, this is Alex on for Paul. Thanks for taking our questions. I guess I have two. The first one is a clarification on ENAC. It sounds like the preclinical talks with that, it may be related to knocking down ENAC long-term. Do I have it right that you're no longer going to pursue any ENAC program, either this program or another fall-on program in ENAC? And then... Secondarily, just curious if you wanted to give any thoughts on business development with all the cash you guys have now. Thanks.
spk06: So, as I said earlier in the question that was posed, we're still working through the data pre-clinically. We don't have any evidence directly that this is related to ENAC inhibition. Let me make this point. This is a very important point. The observations we may have made preclinically were not related to the same types of toxicities that were observed for small molecules systemically applied ENAC inhibitors. We're not seeing hyperkalemia. We're not seeing effects in the kidney, that sort of thing. So this is separate. And again, I think we'll work through it. And we don't believe, based on the data, all the data we have, we don't think that this is a read-through to our pulmonary, our ability to go after pulmonary diseases. But what it does represent is a delay. And we have a lot of drugs coming with other targets. And although we're not slamming the door closed on ENAC in the future, those targets will start approaching and catching up to ENAC pretty quickly. And we think that those are significantly better targets for pulmonary diseases and that in totality was really the basis for why we discontinued ENAC. We're really trying to focus on the programs that bring the greatest value and I'll just leave it there.
spk10: Great. And just to be clear, it's really more of a pause on the ENAC development rather than a discontinuation?
spk06: No, we discontinued the ENAC, this program, in favor of other programs. Thank you.
spk11: The next question comes from Jason Gerberry with Bank of America. Please go ahead.
spk14: Hey, guys. Thanks for taking my questions. Just one quick follow-up on PKK and then the AGT question. Just on PKK, so it sounds like you know, you view kind of a diminishing return on dose convenience, you know, beyond a month, but as it pertains to every two weeks versus a monthly that, you know, I guess you would say that's a key point of differentiation as you think about characterizing a potential best-in-class profile because it looks like dose inconvenience is sort of the main feature that you'll be able to hang your hat on relative to the Takeda prophylactic agent. And then ahead of ACC, Just wanted to probe a little bit, you know, just in terms of what we're hearing from physicians and in terms of what they want to learn about the profile of this drug and, you know, as it pertains to consistency and durability of impact on blood pressure. You know, one thing I think we're hearing is that physicians just want to make sure there aren't dramatic spikes in blood pressure on a week-over-week basis. So I'm curious if you could set the table, if we'll get any data that might help us understand a little bit about that attribute of your ASO there. Thanks.
spk06: Good questions. The attributes of RPKK-like, certainly a key attribute is the dosing frequency, but it goes beyond that. And again, I'll ask Oneiza to expand.
spk01: Yeah, I'd be happy to. So, yeah, I think you're right. I think the important thing here, and I talk about these as each medicine has in the market that they're entering, also has just, you know, you have to actually look at and convenience in there. And for the HAE market, as you know, with Tag Zero, it's a high volume injection every two weeks. And most of the market research and the physicians said, as always, the efficacy is only as good as its compliance. So we do believe that that will be a big play, but we do think that is not the main thing we're going to hang our hat on, as you said. I think it goes back to what's really important for these patients in prophylactic treatment. It goes to, again, prevention of attacks, the number of zero attack rates that you get, and the ability of our product profile to deliver on that with a faster onset of reaching max clinical efficacy. And the third prong of kind of an order of efficacy parameters is just the ability to reduce the number of acute medications that they take. So when you think about it, really it's just all three parts of the efficacy paradigm that we're just winning on, along with the convenience that will, again, you know, have patients take this on a regular basis, be compliant, and deliver on the efficacy of the product.
spk15: Yeah, that's great. And I think just to add to that, the Phase 2 study hit the nail on the head on all three of those. And we've got all those patients also rolled over into an open-label extension and looking very carefully at long-term lack of breakthrough. And that's also a very important component.
spk06: Right. And then the AGT, you could talk a little bit about what is to be presented at ACC, but also the Phase 2B study and what we're hoping to get out of that.
spk15: Yeah. I mean, you'll be able to actually go to the publication right now. It's available in the, I believe it's posted the Journal of American College of Cardiology. And then the other piece to that is the presentation that we'll be giving. And there have been no either hypotension or hypertension on recovery events. And absolutely that's an extremely important piece to the puzzle. So the data is showing that that's a very clean profile. And we've moved into a phase 2B study that will further elaborate on those issues.
spk06: Yeah, the phase 2B study is really powered to nail down the magnitude of blood pressure control we expect to achieve in a phase 3 study. It's a significantly larger study. It's a longer study. Select those for a phase 3 study. And to really rule out any of the concerns, hopefully, that physicians have raised. You've mentioned spikes in blood pressure, hypotension, and so forth. So that's the intent of the Phase IIb study, but certainly the publication and the ACC presentation will support the safety and the efficacy of this mechanism and this drug. Got it. Thank you. You're welcome.
spk11: The next question comes from Jessica Fry with JP Morgan. Please go ahead. Hey, guys.
spk12: Good afternoon. Thanks so much for taking our questions. Not to belabor this, but just following up on the prior questions on ENAC, if the tox you notice is not, you know, related to the platform or exposure in the lung and it's not related to the target, what's your current thinking about what it might be related to?
spk06: Well, we don't know, Jess. That's the thing we have to work through. Spurious tox findings sometimes happen in long-term tox studies. And it could be a sequence-related effect of that particular molecule. It could be something like that. But we really have to work through it. The confidence comes from other experience with other drugs.
spk15: Yeah, and I think further, it's the clinical experience. I mean, the clinical experience was absolutely clean. And we were into a longer-term treatment in the clinic. But, you know, timelines can get significantly impacted by a preclinical finding. And this was just one of those. And we want to make sure that we're focused. We're early in development. And we've got almost a – the riches are beyond what we should be looking at. We have so many targets, and some of these targets are really impactful in particularly COPD and some of these other very interesting areas that we want to focus on. So we took a step back and we're looking very carefully at this and focusing what we do in the midterm. At the same time, we've got this incredibly rich phase three going with all of the products that have now moved into late stage development and we just wanna make sure that we're not diluting our efforts and we're focused.
spk12: Got it, makes sense. If I could work in two other questions, just on the Alexander disease program, can you talk about some of the efficacy measures you have for ION 373 that give you the confidence to advance that into a pivotal study and the size of that opportunity and just how well you think the product might be able to address the market?
spk05: We really haven't disclosed the full protocols or the endpoints for the phase three program. We're very confident that we can engage this disease being the known genetic cause of the disease. It's toxic gain of function of the protein called GFAP and that's what we're lowering. And our preclinical work on this has been published and it's really remarkable improvements in what I think are pretty good preclinical models of disease. So here I think we have Based on the preclinical data and the known pathophysiology of the disease, I think we have a very high level of confidence that we're in the right spot for this.
spk15: Amanda, do you have anything you can share on prevalence?
spk01: Yeah, we're looking at about 400 patients globally from a prevalence perspective. And again, as Eric said, this would be the first and only therapy for Alexander's disease. I think the preclinical data and the models that we have suggest that we're going to, you know, normalize the production of excess GFAP and, you know, improve gross motor function, reduction of significant symptoms that these patients are feeling, both on the cognitive side and some of the GI side, and really prevent disease progression.
spk06: And, Aneza, it would also be helpful if we talked a little bit about, if you don't mind, Jess, about our rare disease neurological holionine. pipeline more broadly and about how GFAP and FUS and all these synergize together as a franchise that we're planning to bring to the market.
spk01: Yeah, no, absolutely. Really good point. So, you know, when we think about these, when we see a prevalence for an individual disease and condition, we're really looking about how we scale these collectively together. to get the significant commercial synergies that, you know, will be really important in the marketplace. And we have them with three products, Alexandria's being one of them, but we also have just one for Lephora disease. And, you know, later on we're looking at, I don't know if we've disclosed one other, but we have one more. And they just are servicing kind of the severe pediatric diseases associated with epilepsy. in the marketplace that really come together as a whole. And then when we add in FUS and ALS, even though you wouldn't think there may be as many synergies, there's actually a pretty high overlap on the physicians who are treating that as well. So it comes together very, very nicely for us as a portfolio in neurology.
spk12: Got it. And maybe just a last question. Going back to the comment about reaching the peak royalty tier for Spinraza around mid-year, similar to last year, can you just unpack that a little, some of the assumptions underlying that in light of the competition you're seeing in the U.S. from Eversi? Hi.
spk13: So I think as you can see when you look at the effective royalty rate on a quarterly basis over the past years, we get to our maximum royalty rate very quickly. The tiers, there are four tiers, and they vary quickly. And therefore, our sense is that Spinraza will continue to perform as it has recently. And therefore, we would get into the highest tier you know, on a similar path, a similar timeframe as we have in the past few years. And you know that that gets us up into that 15% very quickly.
spk12: Got it.
spk11: Thank you.
spk04: Thanks, Liz.
spk11: The next question comes from Manny Ferrujar with SVP Learing. Please go ahead.
spk02: Hey, guys, thanks for taking the questions. I hate to beat a dead horse, but I'm going to beat a dead horse a little bit. So given that you're where you are in ENAC, in some ways in the lead of your closest competitor in terms of maturity of data, is the right interpretation of what you're saying that going back and redesigning and moving forward with a different construct would have been requisite to feel comfortable getting around this preclinical talk? Is that the right way to interpret what you said? And then I have another not being a dead horse question.
spk06: We don't have an answer to that first question because we're still going through the data and trying to figure out what the best path forward is. So that might require a different drug or it might not. but we think that there are better targets out there that we're working on to bring greater value in the epithelial sodium channel. That was our lead drug that was furthest along, but we have others that we think will provide even greater benefit to broader disease indicators than ENAC could.
spk02: Okay, that makes a lot of sense. And then on HA, obviously you have a really exciting data set, optically superior to what's on the label for any of the approved therapies, although obviously cross-fault comparisons are fraught by nature. When you think about commercialization, obviously the quality of therapies available has improved from, you know, the time where we can ask kind of the lead asset. How do you think about openness and willingness to switch? And in commercialization, would you see this primarily as a switch market versus other existing prophylactic therapies? Do you see captain newly diagnosed patients as the lowest hanging fruit? Like how do you think about commercialization strategy? Presuming you continue to have what appears to be a best-in-class event reduction profile. Oneza?
spk01: Yeah, I'm happy to take that one. Really great question here. So I think that when you're on prophylactic treatments, you know, as we think about entering the market over here, it's clearly for new patients, this is the best choice, right? So for new patients, we've kind of tested this, we have the best in class profile, that's where it's gonna go. For patients who are already on therapy, I think they're in will be, how do we get switches in the marketplace? So we're really thinking of this in a variety of different ways. Are there, you know, kind of breakthrough attacks happening? There definitely would be a sense of patients there, patients who are not compliant on the full, you know, set of therapies that they're on. So there's an opportunity there. And then I do believe that we're looking at, you know, particularly a switch design in our phase threes as well, although it's not confirmed. We're definitely evaluating whether that will be actually a nice added benefit to our design as well.
spk02: All right, that makes sense to me. And do we have a sense of where, what proportion of patients do you think on modern, on the most modern of prophylactic therapy, Taxira, et cetera, what proportion of them, based on your KOL conversations, interactions with clinicians, clinical trial experience, what proportion of those patients see meaningful enough breakthroughs to fall into that early share switch, early adopter population for you guys? Just ballpark. I know we're far from being a commercial asset quite yet.
spk01: Yeah. Hard to give you percentages over here on that. It's a really good question. I think we're going to do some claims database analysis and do a retrospective look to get a better sense of that. It's definitely in our list to help evaluate. But given, again, the most, I think, profound part of the research and insightful for us was that compliance piece, right? And given tech zeros at two weeks and four weeks, you know, there are a lot of patients who are actually, you know, trying to stretch this out over the four weeks just because it's a very high volume administration. So we do see a lot of people who are not compliant and as a result then have breakthrough attacks, right? As to quantify that, I think it's going to take a little bit more work on our part before I can give you a better sense of where that is.
spk02: No, that makes a lot of sense. Thanks, and I'm going to hop back into the queue because I know I've got a lot of people waiting.
spk06: Okay, well, maybe Betsy will take one more, and then we'll have to close it out.
spk11: The next question comes from Miles Mintar from William Blair. Please go ahead.
spk03: Hey, thanks for screwing me in. Just a question on Biogen sort of pushing forward a higher dose for the C9-ORF program. Just wondering whether that's got any read through to Vela and whether there's any room to maybe push the dose afterwards kind of in a spin browser-like scenario. And for the FUS programs and the ataxin programs at an earlier stage, is it likely that we'll see a push in the dosing in those early clinical studies?
spk06: So the sign is that, you know, is that the drug is very well tolerated. So, and Biogen is very committed to ALS, and in particular C9 ALS as well as Cy1 ALS. And so before moving into phase three, you want to make sure you get those right. So they wanted to get more data and examine a higher dose. So I don't really think the read-through is anything more than that. It's really that the drug is very well tolerated and they want to get more experience before taking the plunge for phase three. And I didn't quite get your FUS ALS question. We have selected the dose. We have a single dose level. that we're evaluating to program. So we're not planning to look at multiple doses and plus ALS. We think we have the right dose, and we're plowing ahead. We don't plan to escalate dose or de-escalate.
spk03: Okay. Yeah, I guess that was my question, just like why the C-9-4 program specifically that they're testing a higher doses. I know they're not involved in the FOSS program, but even the ataxin program, like why wouldn't you just go with a higher dose here? Is there a risk of overshooting the knockdown of this protein?
spk06: No, there's no risk of on-target toxicity, overdosing, or anything like that. Each drug is different.
spk05: So, Miles, for C9, we do have an allele-selective drug. It only, because of the nuances of the way the transcripts are processed, our drug only lowers the pathogenic expanded C9R72. So we don't lower the non-pathogenic C9R.
spk03: Okay, cool. Thanks for the questions.
spk06: Thanks, Miles. And with that, I'd like to thank everybody who joined us on our call today. It's been a highly eventful start to the year, and we look forward to more throughout the remainder of the year and sharing those results with you. So with that, thank you, and have a great day.
spk11: The conference is now concluded. Goodbye. Thank you for attending today's presentation. You may now disconnect.
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