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spk09: Good morning and welcome to Iona's Pharmaceuticals fourth quarter and full year 2022 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. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Walk, Senior Vice President of Investor Relations, to lead off the call. Please begin, sir.
spk12: Thank you, Vaishnavi. Before we begin, I encourage everyone to go to the Investors section of the ONIS website to view the press release and related financial tables we will be discussing today, including reconciliation of GAAP to non-GAAP financials. We believe non-GAAP financial results better represent the economics of our business and how we manage our business. We've also posted slides to our website that accompany today's call. With me this morning are Brett Monia, our Chief Executive Officer, Eugene Snyder, Chief Clinical Development Officer, Oneza Katare, Chief Global Product Strategy and Operations Officer, and Beth Haugen, our Chief Financial Officer. And Eric Swayze, our Executive Vice President of Research, will join us for the Q&A portion of the call. I would like to draw your attention to slide three, which contains our forward-looking statement. During this call, we will be making forward-looking language statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially. I encourage you to consult the risk factors contained in our SEC balance for additional detail. With that, I'll turn the call over to Brett.
spk19: Thanks, Wade. Good morning, everybody, and thanks for joining us today. As we begin this year, we are building on the significant momentum from the key successes we achieved in 2022, highlighted by our progress in advancing our three near-term commercial opportunities towards the market. With Eplon-Tersen, we delivered positive data from the 35-week interim analysis, which formed the basis for our MDA submission in December. With Olazarsen, we completed enrollment in the phase three balance study for FCS, putting us on track for data in the second half of this year. The FDA recently granted fast track designation for Olazarsen for FCS, underscoring the significant unmet medical need for these patients. We also advanced and expanded our clinical program supporting olzarsen for the broader SHTG indication. And with Donna DeLorsen, we delivered multiple positive data readouts, all further strengthening our belief in this medicine's potential best in-class profile for the prophylactic treatment of HAE. And we're pleased to report that the phase three study of Donna DeLorsen continues to progress well, keeping us on track to complete enrollment this year. We've also made excellent progress in building our commercial organization. As a result, we are well-positioned to successfully launch these medicines beginning with co-commercializing at von Thursen with AstraZeneca. We're also on track for our first independent launches of Olizarsen and Donny Dolorsen. Beyond our three near-term commercial opportunities, our partner pipeline also continues to make great progress. which is partnered with Biogen, is under review in the U.S. and EU, positioning it to be added to our commercial portfolio this year. And our rich late-stage pipeline recently grew this year when GSK initiated phase 3 development for papiroversin for HPV. Further, we expect our late-stage pipeline to grow even more later this year when Roche advances Ionis FDL-RX into phase 3 development in patients with IgA nephropathy. Indeed, our strong pipeline progress sets us up very well to deliver a steady cadence of new products to the market for many years to come. We also took important steps last year to broaden and diversify our technology, including advancing programs utilizing muscle Leica and programs utilizing novel MSPA backbone chemistry. Furthermore, Biogen recently initiated an SMA follow-on phase one study that utilizes advanced ionist chemistry, potentially enabling long interval dosing. And we entered into a collaboration with Metagenome, an industry leader in next generation gene editing. By adding gene editing capabilities to complement our existing platform, we expect to tackle more diseases, reach more patients, and further strengthen our leading position in genetic medicine. Importantly, we further strengthened our financial foundation recently to support our future cash needs. The capital we raised from the royalty monetization and sale leaseback transactions will directly support the investments we're making in advancing our late stage programs and building our commercial organization ahead of our planned upcoming launches. With that, I'll turn the call over to Eugene to discuss our recent pipeline progress and preview our upcoming key events. Next, Onesa will provide an update on our commercialization efforts, and then Beth will review our 2022 financial results, as well as review our 2023 financial guidance. And after Beth, I'll wrap up our prepared remarks before taking your questions. So now, over to Eugene. Thank you, Brad.
spk22: Our pipeline continues to perform very well. Last year was highlighted by many positive data readouts, and we expect the same to continue this year. Over the next few minutes, I will review our recent achievements and preview our key upcoming data and regulatory events. A recent NDA submission for Upland-Turson was based on positive data from the Phase III interim analysis. We're planning to share 35- and 66-week data in the first half of this year. Importantly, we're also looking forward to the potential approval of Upland-Turson in the U.S. for ATTR polyneuropathy late this year. We and AstraZeneca are also planning to file additional regulatory submissions outside of the US later this year. We're also pleased with the continued progress of Cardiotransform study. By conducting the most comprehensive study in patients with ATTR cardiomyopathy to date, we expect to deliver a rich data set for this broad patient population. We believe these data will be a key differentiator, positioning us to successfully compete and lead in this growing dynamic and global market. We expect to complete enrollment this year, keeping us on track for data in the first half of 2025. Our broad all is ours in development program targeting two different but related indications is also progressing very nicely. Both FCS and SHTG patients have severely elevated triglycerides, which can lead to fatal pancreatitis and atherosclerosis. Phase III balanced FCS study is fully enrolled, and we expect it to read out in the second half of this year. And our broad Phase III program designed to support the SHTG indication is also continuing to progress well with data expected next year. With first mover advantage in both indications, we remain confident in a potential for Folizarsen to be a substantial driver of future growth for Ionis. Our Donny Delorsen OASIS Phase III program in patients with hereditary angioedema remains on track for full enrollment this year with data to follow next year. We've continued the steady cadence of positive data from the Phase II program with new positive long-term data that demonstrate rapid reductions in HAE attacks that were sustained in patients treated for at least one year with an overall sustained mean reduction in HE attack rates of 95% from baseline. Importantly, more than 85% of patients in the open-label extension reported a clinically meaningful improvement in their angioedema quality of life scores with improvements observed in all domains. Additionally, 75% of patients who transitioned to bimonthly dosing remained attack-free demonstrating the potential for dosing flexibility. Over this extended time period, we also continue to observe the favorable safety and tolerability profile. We believe that these data reinforce the potential for Donny-Doloresen to be best-in-class prophylactic treatment in HAE. The rest of our rich late-stage pipeline is also advancing, including our partner drugs, Tofersen, our medicine partnered with Biogen for patients with SAD1 ALS is under regulatory review in the US and in the EU. The advisory committee will meet in March to review the data supporting Tofersen's NDA. If approved, Tofersen will be the first approved disease modifying medicine for the treatment of a genetic form of ALS and our next commercial medicine. Novartis also continues to advance LPA horizon study, keeping Pelocarsin on track for data and potential regulatory filing in 2025. With more than 8 million people estimated worldwide to have elevated LPA and cardiovascular disease, Pelocarsin represents a multibillion dollar opportunity. And recently, our late stage pipeline expanded when GSK announced the start of a broad phase three program for Bepiravircin. Based on the phase two B data reported last year, Bepiravircin has the potential to provide a first in class functional cure for people living with chronic hepatitis B. Worldwide, 300 million people have HPV with approximately 900,000 dying annually. GSK's aim is for beproversin to become a foundation of future HPV therapy. Furthermore, our late stage pipeline is poised to further expand when Roche initiates their planned phase three study for Ionis FBLRX in patients with IgA nephropathy. As I just previewed, we expect that 2023 will be a highly productive year led by important regulatory milestones and late-stage pipeline progress. Given the richness of our pipeline, there's potential for even more important events. We look forward to updating you on our progress throughout the year. With that, I'll turn the call over to Oneza.
spk04: Thank you, Eugene. We have made tremendous progress in building our commercial organization. hiring top talent, and integrating commercialization processes into the fabric of IONIS. Today, we are finalizing preparations for each of our near-term products, starting first with our launch of Eplon Tursyn. And we are right where we should be in preparing for our first independent launches of Olazarsson and Donna DeLorsen. One of my first priorities at IONIS was building a strong global product strategy and portfolio planning team. Since 2020, this team has integrated new product planning, global market access, and health economics and outcomes research into IONIS' R&D operations. Together with R&D, this team is helping to drive pipeline prioritization, indication strategy, development and commercial planning, and other key strategic decisions. My next priority was to add medical affairs to our organization. This team is focused on data dissemination, disease education, as well as collecting and integrating customer insights into our product plans. And for the last two years, our field medical team has been engaging with thought leaders and educating HTPs on ATTR, elevated triglyceride diseases, and more recently, hereditary angioedema. Last year, we began building the inline commercial team to prepare for the launches of Eplon-Tersen Olazarsen, and Donna DeVorsen. These teams include market access and reimbursement, inline marketing, commercial operations, patient services, and omnichannel engagement. And as our launch windows approach, we plan to add our customer-facing teams. Now I'd like to spend a few minutes on each product, starting first with Eplon-Tersen. Currently, there are an estimated 40,000 addressable patients with ATTR polyneuropathy worldwide. However, less than 20% of those patients are currently receiving approved treatments. With our deep expertise in ATTR, together with AstraZeneca's global scale, we are confident in our ability to capture a significant portion of these patients around the world. Today, we already have the majority of the infrastructure for the U.S. launch in place. And this year, we plan to complete our build out for Eplon-Turcin, including fully staffing our nurse educators. We expect Olazarsson to be our first independent launch. With Olazarsson, we have first more advantage for both FCS and SHTG indication and fast track designation for FCS. We plan to enter the market for the rare indication and then expand into the broader indication, which provides us with significant revenue potential. We are leveraging our app launchers and capabilities and customizing them for the FCS market. As we approach our launch of olazarcin for SHTG patients, we plan to further scale these capabilities to realize the full potential of the product. We expect donodilorsin to be our second independent launch. In the U.S., the prophylactic HAE market has a concentrated prescriber base with a small number of allergens prescribing the majority of HAE products today. With an efficient and growing market for prophylactic treatment, our expertise in rare diseases, and a potentially best-in-class profile, we continue to see Donna DeLorsen as a very attractive opportunity for us. As with Olazarsen, we are leveraging our existing capabilities and customizing those specifically for the HAE market. It's an exciting time at Ionis. We are building upon our excellence in our research and development with our medical affairs and commercial teams to successfully deliver our medicines to the market. Now I'll turn the call over to Beth.
spk05: Thank you, Anissa. This morning I'll provide a summary of our fourth quarter and full year results for 2022 and then review our 2023 guidance. I am pleased to report that we earned revenues of $152 million and $587 million for the fourth quarter and full year respectively. We earned revenue from numerous diverse sources with just over half from our commercial products and the balance from numerous partnered programs. Our operating expenses for the quarter and full year reflect our continued investments in advancing our commercial readiness activities and our pipeline, especially our late stage programs. And our 2022 non-GAAP net loss was $311 million. Additionally, we ended the year with cash and investments of $2 billion, which we further added to in January with the $500 million we received from our royalty monetization transaction. Binraza performed well in 2022, demonstrating its resilience and long-term growth opportunity both in the United States and internationally. Spinraza global sales increased 6% in the fourth quarter compared to the third quarter and also increased 4% compared to the fourth quarter of 2021. The increases were driven by stabilization in the U.S. and growth in Asian markets, partially offset by competition in Europe. Importantly, U.S. Spinraza sales increased in the fourth quarter and the full year. compared to the same periods in 2021. This positive trend was particularly meaningful, especially when considering competitor results. Biogen is continuing to expand into new markets and is also concentrating on expanding in existing markets. Within existing markets, Biogen is particularly focused on the growing adult SMA population, which has limited treatment options. Additionally, Biogen continues to generate important efficacy data as part of its robust lifecycle management program. Based on these efforts and Spinraza's strong efficacy and safety profile, we in Biogen believe Spinraza can return to growth. We earned R&D revenue of $72 million in the fourth quarter and $284 million for the year for advancing numerous programs partnered with Biogen, AstraZeneca, and Roche, among others. Our ability to generate revenue from numerous diverse sources remains a key element of our financial strength. Our non-GAAP operating expenses increased in the fourth quarter and full year compared to 2021 as expected. Increase was driven primarily by higher development, CMC, and medical affairs expenses to support our three near-term commercial opportunities. Our R&D expenses also included the upfront payment under our metagenomic gene editing collaboration. And as Oneza discussed, we have taken important steps to build our commercial capabilities to be ready for our planned launches. As a result, our SG&A expenses increased in the third and fourth quarters compared to the same periods in 2021. Importantly, we bolstered our balance sheet by adding more than $700 million in cash from our recent royalty monetization and sale leaseback transactions. As a result of these transactions, our cash in January was approximately $2.5 billion. Looking at our plans for this year, We are projecting to earn more than $575 million in revenue. We have a substantial base of commercial revenue with Spinraza royalties as the cornerstone. And given the recent stabilization of Spinraza product sales, we anticipate this will continue in 2023. Additionally, assuming Toperson is approved, we would add Toperson royalties to our commercial revenue this year. We also anticipate having a substantial base of R&D revenue from our partnerships that will contribute to our 2023 total revenue. One of the most significant elements of our R&D revenue this year will come from AstraZeneca for its 55% share of the global phase three development costs for Appalachian. Additionally, with a rich pipeline and many advancing programs, we have the potential to earn numerous milestone payments As we've always done, our R&D revenue is probabilized, based primarily on the anticipated timing of the many different milestone payments we expect to earn as we advance partner programs. So far this year, we have already earned a $15 million milestone payment when GSK initiated the phase three program for Vapiravirsan. And with many important regulatory events this year, We are eligible to earn milestones for Toverson's approval in the U.S. and EU, as well as a sizable Eplon-Turson U.S. approval milestone in late 2023. We're projecting operating expenses in the range of $970 to $995 million on a non-GAAP basis. As you would expect, our advancing late stage pipeline is the most significant driver of our operating expense projections. We are conducting six phase three studies for four medicines, nearly all of which are either fully enrolled today or expected to reach full enrollment this year. As a result, the bulk of our phase three studies are at or nearing their most capital intensive stage. Additionally, as our various launch windows approach for Eplon-Tersen, Olazarsen, and Donita-Lorsen, the investments we make in our commercial preparations will continue to increase. We expect our non-GAAP R&D expenses to increase approximately 20 to 25% this year compared to last year, excluding the upfront payment under our metagenomic collaboration. And we expect our non-GAAP SG&A expenses to increase approximately 25 to 30% year over year. Our 2023 operating expense guidance underscores our commitment to these near-term value-driving investments. Our revenue and expense guidance translates to a non-GAAP operating loss of less than $425 million and a year-end cash balance of approximately $2 billion. Our 2023 guidance reflects the confidence we have in our ability to continue generating significant revenue while retaining our most valuable assets to drive growth. As we look beyond this year, we anticipate the completion of multiple phase three studies and preparations for multiple commercial launches. For the next several years, we expect to be in a period of increasing investment. This is one of the most important reasons why we substantially bolstered our balance sheet with our recent financial transactions. The capital we raised from the royalty monetization and sale leaseback transactions will directly support the investments we are making in advancing our late stage programs and building our commercial organization ahead of our planned upcoming launches. Importantly, we anticipate our strong financial foundation combined with our accelerating investments, will enable us to bring a steady stream of products to the market. And in doing so, we expect to drive greater value for IONIS and our shareholders. With that, I'll turn the call back over to Brett.
spk19: Thank you, Beth. Looking ahead, we expect the strong momentum at IONIS to continue with several key regulatory and late-stage events coming up this year. We're excited about the work already underway and the progress we've made to advance our following key priorities. We are well positioned to deliver an abundance of new genetic medicines to the market with the potential to add two new products to our commercial portfolio this year with a steady cadence of additional products to come in the near and in the longer term. Our integrated commercial organization is on track to successfully co-commercialize up on Tersen and independently launch Olizarsin and Ditalorsin. We're leveraging our recent technological advancements for medicines and development today. Additionally, our collaboration with Metagenomic positions us to expand our technological capabilities for future drugs as well. And finally, we substantially strengthen our financial foundations for our pipeline and commercial plans, all of which we believe will drive increasing value. We're looking forward to a great year at Ionis and sharing our progress along the way. Before closing, I want to mention Rare Disease Day, which is Tuesday, February 28th, a day where we recognize all the patients and families living and struggling with rare diseases.
spk18: I'm now open to call for questions. Operator?
spk09: Thank you. 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 two. At this time, we will pause momentarily to assemble our roster. The first question comes from Yanin Zhu with Wells Fargo Securities. Please go ahead.
spk03: Hi, thanks for taking our questions and congrats on the progress. We have mainly a couple, two questions for the PTR program. First, the NDA for aplomb person in polyneuropathy. I think you submitted the NDA in December. Just curious how is that process going with FDA and when can we expect the announcement of NDA acceptance? if you plan to announce that. And are you expecting priority review or adcom meeting associated with the NDA acceptance? Thanks.
spk19: Thanks, Yan. And we're very much looking forward to the completion of the NDA process with the FDA. As you said, we submitted the NDA in December. We've now cleared the the standard 60-day review period with the FDA. And we're just waiting on the official notification from the FDA, the day 74 letter, if you will. In that letter, details will be provided on PDUFA date, for example, whether there'll be a standard or an accelerated review. We expect, to your question, a standard review for epinephrine and polyneuropathy and whether or not they would want an ADCOM. We don't expect an ADCOM. The process has gone very smoothly with the FDA. There's been no concerns whatsoever. So it's really just we're waiting for the final notification, the official notification from the FDA, and we will announce that with all the details that we get in that notification at that time. So that'll be coming up pretty soon.
spk03: That's great to hear. And if I may ask a question also on aplantersens, but on the CardioTransform study, do you still expect to complete the enrollment for the study in first half? And I think following the modification of study size and enrollment strategy, are you getting the desired result in terms of the balance of various patient subtypes? And what's your expected rate of on to FAMDAS versus naive patients? from this enrollment strategy, and how does the cardiovascular event rate trend on a blinded basis, of course? Thanks.
spk19: Thanks, Yanin. We're expecting complete enrollment around mid-year this year. Enrollment is going very well. As you know, we upside the study to ensure for the most robust and successful outcome in the outcome trial possible. and we upsided the study to achieve three objectives. The first objective was to ensure that we have strong powering for the study to have the successful study and a most robust outcome in the study based on the fact that patients with TTR cardiomyopathy are being diagnosed much earlier in their disease, and therefore patients are generally more mild when they are diagnosed with the Second was to ensure that we have a good balance, a relatively equal balance between naive patients and concomitant patients. And thirdly, to help ensure that we have the preferred percentage of patients that are hereditary, hereditary TTR, amyloidosis with cardiomyopathy. And I'm very pleased to say that not only are we on track to complete enrollment as planned around mid-year this year, that we're achieving so far all of our objectives. We're seeing a significant uptick in blinded event rates in the study, as we expected when we upsized the study. We're seeing a really nice balancing of naive versus defamous usage in the study, as we had planned to have. And we're also seeing a very nice uptick in the percentage of patients with hereditary TTR amyloidosis with cardiomyopathy. Everything is progressing very well in the study, and we're very much looking forward to the data readout on track in 2025.
spk02: Got it. Thanks, Brett, for the color. Thank you.
spk09: The next question comes from Luca Esai with RBC. Please go ahead.
spk16: Oh, great. Thanks so much for taking my question. Congrats on all the progress. I have three quick ones. The first on TTR cardiomyopathy, wondering if you can comment on your reaction yesterday from the news that Al-Nalam will have an advisory community meeting and how you're thinking about implications for your program. The second one is AGT. What's the latest on that molecule? Are you still planning to invest in both the first gen and the second gen? Or at some point, are you going to pivot to the second gen? And maybe more broadly, what's the latest on BD for AGT? And maybe the last one on HAE. I think at American College last year, three of the eight patients, there were those every eight weeks, sorry, every two months, QAW switched back to monthly. However, I think in the abstract at Quad AI, it's two out of the eight that actually switched back to monthly. So from three to eight to two to eight. So wondering what happened there. Thanks so much.
spk19: Sure, Luca. So I prefer not to comment very, you know, in significantly on competitor products and outcomes by the FDA. What I could say is that, you know, in hindsight, not terribly surprised. The results were a little complicated. Six-minute walk test, the magnitude of benefit, the benefit in patients' antithalamus versus naive patients is pretty complicated. So not terribly surprised that the FDA is going to want to get input publicly from experts in the field You know, we welcome it because it gives us more information. We have very strong relationships with all the key KOLs and investigators around the world for this disease, but we're always welcome to hear more. And I think it can help us set us up for an even better, more successful cardiomyopathy outcomes trial. Regarding AGT, we're still planning to present data on the two molecules in the second half of this year. The hypertension study is wrapping up, and we're planning to start a cardio heart failure study for the second molecule, the Gen 2.5 molecule, in the second half of this year. We won't wait for that study. We'll share the data from the two molecules in hypertension, the first molecule in heart failure, by the end of the year. And as far as business development activities, we're kind of on pause because we want to generate all the data. for those three studies before we start responding to inbounds, and there's been certainly interest in the program. Regarding HAE, the correct number of patients that were attack-free in the bimonthly is correct in the Quad AI presentation, six of eight patients. The previous data that was presented last year was five of eight patients, and it was really just a timing effect and when you make the cutoff. One-year treatment, six of eight patients were attack-free in the bimonthly, whereas the timing for that included the five of eight patients that was presented last year was just beyond one year. So it was just a technical thing. If anything, it favors the efficacy in bimonthly for Donald and Larson. With that said, it's really the monthly, Dosing that we really are very excited about. Bi-monthly gives you an option for dosing, but monthly dosing really is one of several key advantages for Donna DeLorsen versus competition. The convenience of monthly self-administration, excellent tolerability, fast onset of action, and the unprecedented efficacy with 95% mean reductions in HAE attacks for now for a year of treatment.
spk07: Got it. Thanks so much.
spk09: The next question comes from Gary Nachman with BMO Capital Markets. Please go ahead.
spk15: Hi, guys. First, a few more on Eplon Thurston. So what do you plan to do with the 66-week data when that's available? Talk about the timing of filing to ex-U.S. And does that impact the PN filing in the U.S. at all, or is that completely separate? And then if you have the PDUFA late this year for PN, how soon would you and AZ be able to launch the product? And then on cardiomyopathy, what's the likelihood that you might have early readouts for that data? And then I have a follow-up for Beth. Okay.
spk19: So maybe I'll ask Najah after I touch on this. to your other questions to talk a little bit about launch planning for Eplon-Turson and PN. The week 66 data we're planning to present in the first half of this year at a medical meeting. Of course, we'll put out top line results ahead of that as soon as we have it. We're very much looking forward to that. That data will be very important for XUS filings for potential approval for Eplon-Turson. And that is the plan is to file I have additional filings for approvals outside the U.S. with week 66 data as a key component of those filings. We don't see any meaningful impact of the week 66 data for the NDA that's currently under review by the FDA based on the week 35 data. We don't plan on submitting a supplemental NDA With that data at this time, the data that, the week 35 data we believe is very, more than sufficient to get the outcome that we desire by the FDA for epinephrine and polyneuropathy. It doesn't rule out the possibility of a future supplemental NDA after approval. That will be data driven. Regarding the cardiomyopathy early readout, We will continue to monitor any changes in the landscape, the competitive landscape, that could influence a decision by Ionis AstraZeneca to read the study out earlier. We also will be focused on blinded event rates and patient demographics. All that will be driven, will be factored in to a decision to potentially read the study out early. We do have several, we do have the option to read the study out early based on a review of all of that. Anaza, maybe you could talk a little bit about, you know, the late year PDUFA date that we're anticipating and then plans for launching at one person.
spk04: Yeah. Hi, Gary. We're preparing for success for the PN launch. So there are a lot of pre-commercial investments that are already being made for the U.S. We have, as you know, a field medical team that's been in place for over two years, really ensuring that there's enough disease education out there over the last two years. We plan and have already actually hired out our field directors for the nurse educator team. And then as we look to the second half of the year and we hear back on the, you know, on the 74-day filing, Astra will start, you know, building out the sales capabilities. So basically, we are going to be very ready to go upon approval and not have a lot of time between approval and launch as well.
spk15: Okay, great. Very helpful. And then for Beth, just the greater than $575 million revenue guidance, you know, you talked about some of the key factors directionally. So will the overall mix and quarterly cadence be similar to 2022? And then how will you be reporting the Royalty Pharma Agreement? How is that factored in the guidance? And then can you still hit the guidance if Tofersen is or Eplon-Turston are delayed into next year at all? Thank you.
spk05: Great question. So first in terms of the mix and the cadence on a quarterly basis, I would say anticipate that 2023 will look very similar to 2022. I anticipate the mix of commercial and R&D revenue to be very similar. I expect it will be likely back end loaded. And then in terms of can we, you know, can we hit this guidance even if, Topherson approvals or Appalachian approvals are delayed into next year. I think it's important to remember, as I think I've mentioned, we have consistently probabilized our R&D revenue items. And we typically probabilize based on when in the year an event might occur. So lower probabilities for those items that would likely fall late in the year. And so that gives us a lot of that combined with the fact that we have, you know, just a really robust pipeline of partnered programs that generate milestones on a very consistent basis gives us a lot of flexibility if, you know, certain items are delayed slightly. So I'm comfortable that our guidance is achievable. And let's see, did I miss any of your questions? I think I got them.
spk15: Yeah, no, the last one was the Royalty Pharma Agreement, so just how that's factored into the guidance.
spk05: Yes, thank you for reminding me. The Spinraza royalties under our Royalty Pharma Agreement will continue to be booked into our top-line revenue, so 100% of the royalties from Spinraza will continue to be booked on our top-line revenue, and then the cash payments to royalty pharma will really be a balance sheet item for the company. I'll have more details when we get to our Q1 earnings because at that point we'll have finalized all of the more detailed accounting with our auditors. But I think it's a great point to make that Spinraza royalties will all hit our top line revenue as they always have.
spk18: Okay, great. Thanks, guys. Thanks, Teri.
spk09: Next question comes from Jessica High with J.B. Morgan. Please go ahead.
spk17: Great. Good afternoon. Thanks for taking my questions. Thinking ahead to the Acker Remedies data later this year, what are you going to be most focused on when those results read out? And second, can you remind me where you are with for Acromegaly and when we could expect the next update? Thank you.
spk19: Well, for-thanks, Jess. At Graham and this, we're looking for the outcome data and what that's going to look like. I mean, Eugene, maybe you should comment on this.
spk22: No, absolutely. That's what everyone is waiting to see is how the functional benefits translate into hard outcome data. And that's what is due soon. And we're all obviously going to be, focused on also similarities of the population enrolled in that study and the Cardiotransform study. So that's probably the second most important aspect is to see how representative the population that they've enrolled is to what we're seeing today in our study.
spk19: Yeah. So patient demographics will be very interesting in addition to, of course, the main endpoints, the primary endpoints. Jess, on the acromegaly, the monotherapy study is continuing and wrapping up. We're planning to share data hopefully at a medical meeting, but we'll get it out in the second half of this year for the monotherapy data. As you know, we presented data in patients that were poorly controlled on somatostatin analogs last year. So we'll have the monotherapy data in the second half of this year. And with that, next steps.
spk07: Thank you.
spk09: The next question comes from Miles Minter with William Blair. Please go ahead.
spk10: Thanks for taking the questions. Just on Biogen's claims that Spinraz is going to return to growth, and they're citing that only 20% of adults, presumably type 3 patients, are actually treated with disease-modifying therapy. What's the cadence, I guess, of return to growth that we can expect? It doesn't seem that it's going to happen this year. And it seems as if for the Spinraza franchise that you really like to back this up with clinical data. And I think the type three patients, particularly the adults, is probably where there's a lack of Spinraza efficacy data. So can we expect some clinical studies to be launched by Biogen to support that thesis?
spk19: Start with that, Beth, on the return metrics for return to growth?
spk05: Sure, absolutely. Absolutely. So thanks for the question, Miles. You know, I think you're already starting to see what we had, you know, really anticipated, that this return to growth is starting in the United States with, you know, stabilization and even, you know, really a little bit of increase year over year and quarter over quarter, Q3, Q4. And that's what you would expect because that was the first launch for both Spinraza as well as for, you know, for the competitor product. We would anticipate that that will continue to see those same dynamics across other geographies, similar to the cadence of the various launches across various geographies. So that would be our anticipation of the cadence. And I think it's really important to focus on the fact that the teens and adults are where, you know, Spinraza has already a very strong efficacy and safety profile, but it's particularly strong in those teens and adults. And it's particularly in comparison to the competitor products, which, you know, really don't adequately address those patients, or in fact, in the case of Zolgensma is, you know, isn't really even approved for those older patients, right? So you would expect that's a great place for Spinraza to see growth. And in fact, that's the largest prevalent population. There's about 60% of the prevalent population is made up of these teens and adults. So it gives tremendous opportunity for growth, not only in the U.S., but in other markets across the world. Biogen is particularly focused on expanding in Asia. as well as in other geographies around the world, Latin America, Eastern Europe, some other geographies as well. So I think all of those things are going to be factors in Spinraza's return to growth.
spk19: And the post-marketing studies, Miles, the other part of your question, we think will only contribute to and further enhance the potential to run to significant growth for Spinraza. And those studies are going really well. Two studies are examining higher doses of Spinraza. The DEVOTE study, some of that data, some data was shared last year looking at higher doses of Spinraza that showed even greater efficacy in SMA patients. The ASCEND study in patients that their disease progresses on Avrisdine, we're also, Biden's also looking at a higher dose in those patients to show Patients will do better and will benefit. And then the response study, looking at the commercial dose of Spinraza today in patients whose disease progresses that are on gene therapy, is also going well. Biogen hasn't laid out timing or expectations on timing to share data, but the study's going well. And the purpose of those studies is to further enhance the market performance for Spinraza. And so far, everything's going on track.
spk10: And just a quick follow-up for Beth, how much of the OPEX guidance is factored into building the new manufacturing facility for this year versus just underlying R&D costs for the business?
spk05: Sorry Miles, I didn't hear that, you cut out.
spk10: How much of the current OPEX guidance is accounting for the new manufacturing facility that you're building versus the underlying R&D of the business?
spk05: So none of the OPEX guidance includes any costs associated with the new manufacturing facility. That's all balance sheet at this point. It's using some of our cash as we construct the facility. And we'll be, you know, building the costs associated with that asset over the course of the construction period. we'll begin amortizing those costs in the sort of 26 time frame once the building is online and operational. And at that point, you'll start to see some of those expenses from the amortization flow into our OPEX.
spk10: Thanks for the clarification. Cheers. Thank you.
spk09: The next question comes from , Morgan Stanley. Please go ahead.
spk13: Hey, guys. Thanks for taking the question. Just one from me on Bepiravircin in HBV. You highlighted your partner GSK recently started the Phase III study. Just curious, you know, how the recent J&J decision to deprioritize their HBV program might impact your thinking on potentially the opportunity here or maybe your go-forward strategy. Thanks.
spk18: Eric, do you want to take a stab at that?
spk21: Yeah, sure. Well, it really doesn't impact our program, GSK's program at all. We're very pleased that GSK is nicely enthusiastic about this program. They started their phase three program. Again, Bipiraviricin in the BeClear study in the phase two data did things that the other drugs, the competitive siRNAs for lowering S antigen have not done, which has caused these, of S antigen that are sustained for a long period of time. And that's the reason GSK is taking it forward. So we're very enthusiastic about our program and really don't see any read through from other programs at all.
spk19: Yeah. Michael, I think in short, the competition from the J&J drug was kind of discounted already because we have seen, as Eric said, greater efficacy in Phase 2B. for Bepiribus, and this just helps clarify that situation. So, if anything, it's, it clarifies the competitive landscape for Bepiribus, and it just further enhances it.
spk07: Got it. That's helpful. Thank you. You're welcome.
spk09: The next question comes from Paul Matthies with Staple. Please go ahead.
spk00: Hi, this is James. I'm for Paul. Thanks for taking our question. Just a quick one on Angelman's. I guess, what's the latest thinking on when we may see that data? And again, how are we thinking about, you know, whether or not this trial is suited to get a sense on efficacy? And then maybe just quickly, you know, taking a step back from a strategic perspective, as you look at all of your non-partnered assets, how are you thinking about the balance of, you know, potentially monetizing them versus launching them and pursuing them independently and, you know, from a BD perspective, thinking about, you know, other technologies in light of the metagenomic partnership. So, thanks.
spk19: Sure, James. There was a lot there, especially in the second part of your question, we could talk about, but I'll try to be brief. So, Angelman's will be brief because we don't have anything more to report at this time except that we feel very good. We feel very confident in the execution of the study. It's going very well. IGEN has not laid out a timeline for data dissemination for the Phase 1-2 study. We are working through the, you know, potential efficacy endpoints that would support a Phase 3 study now. We are making great progress with regulators as to what would constitute a clinically meaningful benefit endpoint. for patients with Angelman syndrome for a potential phase restart. I have to leave it at that right now. Hopefully Biogen will provide an update later this year. But we're feeling very good about the Angelman study. With respect to monetization, what we partner, what we keep, and so forth, I'll take a stab at that. Maybe Dendronasia could chip in a little bit, too. So, you know, our... Today, we have a wealth of assets that are in front of us from IONIS, from our R&D organization. We focus on the late-stage pipeline. We have a really rich mid-stage pipeline, as well as a lot of new drugs coming into development right now. And we are very carefully deciding on, as we did recently with Eplon-Tersen, Olazarsen, and Donalorsen, which of those assets make sense for IONIS to keep and to bring to the market ourselves. And we're looking forward, versus those that we think will be, will do better, will be better off with a potential partner down the road. We're looking forward to providing an update on what I refer to as the next wave of Ionis commercial opportunities in the second half of this year, beyond Eplon, Tersen, Olisar, and Dondalursen. Right now, we're laser focused on launching those drugs. As far as monetization goes, I think you asked, we're not planning, there are no plans to do any royalty work at this royalty monetization like we did for Pellicarson and Spinrazda earlier this year, or Royalty Pharma. But talk a little bit about prioritization, how we go through that.
spk04: Yeah, sure. I think you covered most of it. Maybe I think I'll give you a lens into the second half of the year. You know, as we're focused on these three near-term commercial opportunities, we're also looking from a line of sight as to what comes next in the mid-stage pipeline. And, you know, we look at a lot of factors. I think Brett mentioned a couple. We have... in the timeframe within which they would be on market. Can we maximize the full potential of the product? If we can, then does that actually fit with some of the kind of customer-facing synergies that we see? And if they don't, can we actually do it in a very efficient way? So that's probably a bit of our schematic over here in terms of criteria to make those selections. We see a really nice cadence of products coming in from the neurology franchise. So it's very exciting. There's a really nice team that works on early to mid-stage neurology here. So you'll hear more about that in the second half of the year. And then we also have some things that can move into our specialty franchise, just like we have Donna DeLorsen in specialty. We do have a couple of other specialty products, such as you know, Sapa Blurson for polycythemia vera. So we're looking forward to seeing some of the data there, which is, you know, looking encouraging at this point in time. So that's kind of our way to kind of market in the near term and then the midterm. And then we work very closely with R&D, as I said, integrating kind of our early stage pipeline as well to understand kind of what indication strategy could look like and how we want to think about going to market with that for ourselves and where we think there's more benefit for partners to actually, again, realize the full potential of the product.
spk07: Thanks, Amaysa. Thanks for all the color.
spk09: The next question comes from Yale Jen with Laidlaw and Co. Please go ahead.
spk11: Good afternoon, and thanks for taking the question. In terms of the Factor B, I know Roche is advancing the study into a Phase 3 study this half. And I'm curious whether there's also a geographic atrophy indication. How would the company think, given that there's one product that's recently approved and the other one is in late stage right now?
spk18: Both programs, thank you, E.L., for the question. Both programs are going very well.
spk19: Maybe Eugene will want to add to this, but, you know, the IgA nephropathy, there's really nothing new to report there except that the news we reported late last year and early this year that Roche still plans on initiating the phase for studying IgA nephropathy is on track. That's a rare indication. And then for geographic atrophy, it's going really well, right, Eugene?
spk22: Yeah, the enrollment certainly had picked up post-pandemic and we're very pleased with how the study is progressing. So, it is a large study, one of the largest eight phase two studies we've conducted recently. So, we're quite optimistic and also Roche obviously is very interested and keen to make a decision on the next steps for that particular program.
spk19: The phase two GA study is, designed to set up a potential phase three study based on the outcome of the study. And if your question was asking about how Roche is going to handle a rare indication versus a broad indication, that's a question for Roche. I can't answer that one for you. Sorry.
spk11: No problem. Thanks for the call. Maybe one more question come from investors. In terms of a person in ATTR-CM, You guys already upsized the trial study. It seems like that if you have the data later on, you may not do that. But just curious whether there are still options to change, you know, upsize the study if you feel that could be needed in the future. And thanks.
spk19: We don't expect to upsize the study. We think we're right where we need to be, you know. The study is on, we have, you know, the CardioTransform open-level extension study is well underway. We have patients now that have entered the OLE. All of this is why the timing for the decision we made last year to upsize the study when we did was so important. And as I said in my opening, I think my first question I had, everything is going according to plan with respect to blinded event rates, balance of the feminist versus naive and heredity enhancing the number of patients with hereditary CTR cardiomyopathy. So there are no plans to further upsize the study. We're approaching the finish line.
spk11: Okay, great. Thanks a lot, and congrats for all the progress. Thank you.
spk09: The next question comes from Joseph Stringer with Needham & Company. Please go ahead.
spk14: Hi, thanks for taking our questions. Just a quick one from us on the broad pipeline prioritization here. Just given the company's pipeline breadth, do you consider the current pipeline size and R&D spend as sort of right-sized at this time? And is this an evolving outlook as you go forward? Thanks. Thanks, Joey.
spk19: You know, since I moved into the CEO role, one of my key objectives, as well as my team here, has been to really focus the organization on what is going to bring the greatest value to the company. That has been really important. If you think about it, prior to our evolution to full integration, we partnered all of our programs. So You know, prioritization and focus was less important. It's vastly more important as we make investments to bring products through phase three into the market ourselves. So, although I cannot say whether or not the size of our pipeline today will be the same size, you know, five years from now, what I can tell you is that we will focus the pipeline as we have done over the last couple of years. when we announced and we said we were moving away from indications like oncology, for example, which we moved away from because we don't think that that's the best use of our resources. And we'll continue to do that. I don't know what that magical number will be, that size, but we are focusing and prioritizing, and I wouldn't be surprised if the pipeline was proactively reduced in size based on number of drugs, and maybe even for those drugs we will expand the indication as an example to really maximize the value of each asset. You want to add anything to that, Anaysa?
spk04: You know, just again, I think I spoke about this briefly in the last question. I do, I think to emphasize, you know, some of Brett's vision and how we're putting it into a process to give you a little bit more color is that, you know, we took on a more rigorous approach to prioritization, you know, last year and it's continuing this year as well. And what I really like about the process is that included really, you know, a large portion of the IONS team from research development and commercialization, manufacturing talks, you know, all the way through to really think through not just the quantitative aspects of each of our programs, but also strategically and qualitatively what's most important to bring forward and how do we bring it forward. So we have some really nice ways to think about what we want to keep all the way to market. We also have some really good distinctions on where we think some programs will, again, belong with partners and realize their full potential. So, you know, stay tuned. We continue to kind of, you know, bring in the focus that Brett talked about, and you'll see more of it in our pipeline.
spk18: And, Joey, you had another part to that question, which I forget. No, that was it. Thanks for taking our questions, and thanks for the detail.
spk07: Thank you.
spk09: The next question comes from Yaron Werther with Cowen. Please go ahead.
spk20: Great. Thanks for taking my questions. Brad, I just got two. The first one is just maybe just to follow up on the Factor B question. I believe you guys ran a study that started in 2018, 120 patients, obviously smaller than the current study, which is 330. That started and then I think that study was terminated. Just give us a sense kind of what happened there. I think the primary endpoint was also different. That was a factor B levels, whereas the current study is obviously looking at change in GA. And then second, just your thoughts and then that's preliminary on the IRA. Eplan-Tarrasin potentially will have two indications in the future, hopefully. What does that mean from a negotiation standpoint or Can you ultimately get a broad TTR label? Thank you.
spk19: Thank you, Yaron. So for FACT-B, and Eugene, you can chime in, there have been those studies that have been terminated that didn't conclude to their natural conclusion, the design conclusion study. We did a phase one study. Maybe that's what you're referring to. Two phase ones, a single dose and a multiple dose. Two phase ones, a single dose and a multiple dose as your standard to measure safety as well as, you know, pharmacodynamic activity, reductions in factor B. That's what set us up for the current geographic atrophy phase two study, which as Eugene said earlier, enrollment has really picked up and is going very well. I'm not sure I can say much about it. There have been no study terminations that were not planned. for the factor B programs, either in GA or IgA nephropathy. The program's going really well. Anais, you want to talk a little bit about IRA?
spk04: Yeah. So, you know, as you know, we've kind of been looking at the implications of the IRA for our portfolio. For Eplon-Tersen specifically, as you know, there's an orphan direct designation exclusion for single disease orphan drugs. And for Eplon-Tersen, both indications of PEN and CM qualify as a single disease. And that is because of the way we got the ODD exemptions. Our orphan drug designation is for ATTR, not necessarily for one indication or the other. So you should, you know, think that through as you're thinking about, And we would then be excluded from that maximum fair price negotiation as well. The other thing to keep in mind is, you know, this is a really good thing for patients. In a way, you know, we took away the disadvantage for patients for out-of-pocket costs under Medicare Part D. So the so-called donut hole catastrophic care really kind of goes away. And we do believe that really allows patients to kind of make the right choice for their product. and not leave it up to kind of cost between a Medicare Part D or a Medicare Part B benefit as well. So we think both of those are playing really well for Epi-1 Tersen as we look into the IRA implications.
spk07: Thanks, Neza. Next.
spk09: The next question comes from Jenna Wong with Barclays. Please go ahead.
spk08: Thank you for taking my question. Just a few very quick ones. First, I wanted to confirm that upon milestone would be reported as part of the R&D revenue. Second, regarding the manufacturing facility construction, what is the estimated cost of that facility? And then lastly, quickly, regarding the cardio transform, I remember you mentioned in the past your goal is patient on tefadimus. Can you remind us of percentage of patient, the hereditary patient? What is the goal regarding the percentage of a patient in the final enrollment?
spk19: So, Gina, you were breaking up a little bit, but I think I got your questions. Thanks for the questions. Beth, you want to take the epilenters and milestone and manufacturing facility?
spk05: Sure, absolutely.
spk19: Okay.
spk05: Yep, thanks for the questions, Gina. So the F-1 Tourism Approval Milestone will be reported as an R&D revenue item. And on the manufacturing facility cost, we're anticipating that'll be about $350 million. We are already in, you know, well along in the construction process with design, programming, engineering, architectural efforts underway. And so you should anticipate that cost to be spread out over the next several years. We expect to be manufacturing API in that facility and up and running in late 25, mid-26 time frame.
spk19: And then for CardioTransform, I'll ask Eugene to comment on, you know, what our targets are, goals for hereditary. But for the tefamidase, again, you broke up a little bit, but our goal, as I think I stated earlier, is to get a relatively equal balance between naive patients and tefamidase patients. And right now, the upsizing of the study is delivering exactly that. We're well on our way. Hereditary?
spk22: Yeah, hereditary, of course, is what we're trying to target is we have the ATTRACT study of tithamidus as a sort of a guidepost. It's, remember, it was done at a different time with different diagnostic options and attention to this disease. So just because they've enrolled roughly 25% of hereditary patients as a percentage of total population, That's kind of the guidepost. It's going to be difficult to achieve that, but that's what we're targeting somewhere in the 2025 range.
spk07: Thank you.
spk18: Thank you, Gina. Maybe we have time for one last question.
spk09: And the last question comes from Du Kim with Hypershandler. Please go ahead.
spk01: Hi. Thanks for taking my question. I'll keep it to one. I just want to follow-up on the Royalty Pharma agreement and how best you're going to recognize the upfront payment and if any of that is factored into the revenue guidance for this year.
spk05: Sure. So the $500 million payment we received in January is essentially increasing our cash. So you'll see that in our Q1 cash balance. There'll be an offsetting liability for the payments we need to make to Royalty Pharma. And 100% of our Spinraza royalties will continue to be booked to the top line in revenue. So it's already factored into our revenue guidance. You know, again, assuming a similar split of commercial and R&D revenues really reflects that 100% of the Spinraza royalties on the top line revenue. And we'll give some more detail at Q1 once we complete the detailed accounting treatment with our auditors.
spk01: Great. Thank you.
spk18: Thank you, Del. Thanks, everybody.
spk19: Thanks for joining us on today's call and for participating. We're really looking ahead to a very successful 2023. We plan to continue our positive momentum in delivering on our key commercial pipeline and technology objectives for the year. And we look forward to providing updates to all of you as we make progress throughout the year.
spk18: So until then, thanks very much for participating and have a great day.
spk09: Goodbye. This concludes our conference. Thank you for attending today's presentation. You may all now disconnect.
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