Ionis Pharmaceuticals Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 21, 2024

There are 13 speakers on the call.

Operator

Good morning, and welcome to the Ionis 4th Quarter and Full Year 2023 Financial Results Conference Call. After today's presentation, there will be an opportunity to ask questions. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Wolk, Senior Vice President of Investor Relations to lead off the call. Please begin.

Speaker 1

Thank you, Megan. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to view the press release and related financial tables we will be discussing today, including a reconciliation of GAAP to non GAAP financials. We believe non GAAP financial results better represent the economics of our business and how we manage our business. We have also posted slides on our website that accompany today's call. With me this morning are Brett Monia, Chief Executive Officer Richard Geary, Chief Development Officer and Beth Haugen, our Chief Financial Officer.

Speaker 1

Eric Swayze, our Executive Vice President of Research Eugene Snyder, Chief Clinical Development Officer and Onezza Cadarey, Chief Global Product Strategy and Operations Officer will also join us for the Q and A portion of the call. I would like to draw your attention to slide 3, which contains our forward looking language statement. During this call, we will be making forward looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially. I encourage you to consult the risk factors contained in our SEC filings for additional detail.

Speaker 1

With that, I'll turn the call over

Speaker 2

to Brett. Thanks, Wade. Good morning, everybody, and thanks for joining us today. At Ionis, we are proud of our scientific heritage. We have united groundbreaking science and technology with a relentless passion to discover and develop new transformational medicines.

Speaker 2

And now that we have validated the broad applicability of our RNA targeting platform, we're on the brink of independently delivering our medicines directly to patients. Over the next several years, we expect successfully launch multiple medicines on our own while continuing to expand our technology so that we can address the needs of even more patients. This will be a key driver of our next phase of growth and we're committed to investing in all capabilities needed to accomplish this. Last year was a remarkable year for Ionis and we're already off to a great start in 2024. In fact, just yesterday, the FDA granted breakthrough therapy designation to olsarsen for FCS.

Speaker 2

This is a very important outcome as breakthrough therapy designation is designed to expedite development and review of therapies intended to treat serious conditions that have preliminary clinical evidence showing that the therapy may offer substantial improvement over available treatments. Before we get to all the other exciting things planned for this year, I'll first recap some of our key achievements in 2023. First, we received 2 FDA approvals for Ionis Discovered Medicines, CalSati for SOD1 ALS and WAYNEUVA for ATTR polyneuropathy. KALSADA is the 1st drug approved to treat a genetic form of ALS. It was granted accelerated approval in the U.

Speaker 2

S. Early last year for patients with SOD1 ALS. And we are also pleased to cap off a highly successful year with the approval of WAYNUWA for ATTR polyneuropathy in late December. The WAYNEUWA launch is well underway in the U. S.

Speaker 2

Through our co commercialization partnership with AstraZeneca and we're executing on our strategy to bring WAYNEUWA to patients globally with the additional potential approvals in Europe and Canada this year and more regulatory submissions and approvals on the way. Based on its strong overall profile including highly positive Phase 3 data which we reported last year together with the freedom of simple at home monthly self administration, we believe WAYNUWA is very well positioned to become the therapy of choice for ATTR patients who remain underserved by current therapies. With the larger ATTR cardiomyopathy indication, we continue to advance our Cardio Transform study as planned. As the largest study ever conducted in this patient population, Cardio Transform is positioned to be a landmark study designed to deliver a very rich data set. We expect the data we generate to enable physicians and payers to make informed treatment decisions in this dynamic treatment landscape.

Speaker 2

And with AstraZeneca's global leadership in the commercialization of novel cardiovascular treatments coupled with our leadership in TTR amyloidosis, we believe we are very well positioned to bring RENUWA to patients in the U. S. And around the globe. We also recently delivered positive Phase 3 top line data readouts for 2 additional important medicines, olezarsen in FCS and dongelorcin in HAE. In the Phase 3 BALANCE study in patients with FCS, olarsen showed significant triglyceride reductions, substantial reductions in acute pancreatitis events and a favorable safety and tolerability profile.

Speaker 2

We remain on track to file for marketing approval in the U. S. And EU this year, positioning olezarsen for potential approval in

Speaker 3

the U. S. By the end of

Speaker 2

the year assuming we get priority review. With this timing, we expect olsarsen to be our next approved medicine and our first independent launch. We were also pleased with the positive top line data we reported last month from the Phase 3 OASIS HAE study of for the prophylactic treatment of hereditary angioedema. In the Phase 3 study, domivolorsin met the primary endpoint with a statistically significant reduction in the rate of HAE attacks in patients treated every 4 weeks or every 8 weeks along with a favorable safety and tolerability profile. With these positive data now in hand, we're preparing our regulatory submission to the FDA, which will include both every 4 week and every 8 week dosing.

Speaker 2

We expect onadoloresin to be our 2nd independent U. S. Launch. Additionally, our partner Otsuka is preparing to submit for marketing approval in Europe. Based on our Phase III results and adorable efficacy and favorable safety data seen long term in the ongoing Phase II open label extension study, we believe donopulirsen could be an attractive new treatment option for patients with HAE.

Speaker 2

We look forward to presenting the full Phase 3 data for both olosarsen and onadolarsen later this year. We also made significant progress expanding our rich Phase 3 pipeline. Last year, we began the year with 6 medicines in Phase III development and this year, we began with 9 medicines in Phase III. These new Phase 3 additions include zilganersen, our wholly owned medicine for Alexander disease and 2 partner programs, epiravirsen for chronic HBV and Ionis FBLRx for IgA nephropathy. We also continued to make great strides last year in advancing our industry leading RNA targeting technology.

Speaker 2

We advanced our first bicycle siRNA muscle targeting LICA drug for a heart failure indication into preclinical development, which AstraZeneca licensed in the Q4. And we expect to advance additional medicines utilizing our muscle targeting technology this year. We also made substantial progress in our efforts to deliver our CNS medicines across the blood brain barrier. Most recently, we established a new partnership with Vectura to utilize their novel protein based approaches to systemically deliver our medicines to the CNS. This adds to our multipronged approach to traverse the blood brain barrier with our novel treatments to further strengthen our leadership position in treating CNS diseases.

Speaker 2

Our accomplishments throughout 2023 provide great momentum and position us well for a catalyst rich 2024. Today, Ionis is at a key inflection point with the recent approvals of 2 medicines, 3 positive Phase III readouts and numerous upcoming Phase III readouts expected over the next couple of years. And at the same time, we've also made great progress across the rest of our rich pipeline and advanced our leading technology for our future medicines, all of which sets us up to bring a steady cadence of new transformational medicines to patients for years to come. We will continue to focus on building and advancing our wholly owned pipeline, which will position us to deliver even more medicines directly to patients. We expect that the investments we're making over the next few years will drive an outsized opportunity to earn multibillion dollar revenue from our proprietary pipeline, generating next level value for all Ionis stakeholders.

Speaker 2

And with that, I'll turn the call over to Richard to discuss our recent pipeline progress. Next, Beth, we'll review our 2023 financial results and provide our 2024 financial guidance. And then I'll wrap things up before taking your questions.

Speaker 4

Richard? Well, thank you, Brett. We had many notable pipeline achievements in 2023, some of which you've heard, with the highlight being the approval in December of WAYNEUWA in the U. S. For patients with ATTR polyneuropathy.

Speaker 4

WAYNEUWA was approved based on the NEURO T Transform results in week 35. In this study, WAYNEUA demonstrated powerful and sustained TTR suppression, stopped neuropathy disease progression and improved neuropathy impairment and quality of life. These highly positive results were reinforced at week 60 685 and as the only approved medicine for the treatment of ATTR, polyneuropathy that can be self administered via auto injector. We believe Waynewa is well positioned to reach newly diagnosed patients and patients who remain underserved by current therapies. WAYNUWA's robust profile also supports our confidence in the potential to benefit patients in the much larger ATTR cardiomyopathy patient population.

Speaker 4

Our conviction was reinforced with the data we presented at HFSA late last year that showed improvement in cardiac structure and function in a predefined cardiac subpopulation of patients in NEURO TTRANCE form. And in January, additional data was published in the Journal of American Heart Association showing encouraging results in a cohort of patients with hereditary ATTR cardiomyopathy from the NEURO T Transform study. With over 1400 patients, Cardio T Transform is the largest and most comprehensive study ever conducted in ATTR cardiomyopathy patients. We designed this study to generate a rich data set that we believe will be key for physicians and payers in this evolving and dynamic treatment landscape. This includes generating data for key subgroups such as patients on a stabilizer and those naive to stabilizers.

Speaker 4

We are also conducting advanced cardiac imaging sub studies as part of our overall program. These include an MRI substudy and a scintigraphy substudy. We believe these data will generate even more valuable data about the potential benefits of WAYNEUWA in cardiomyopathy patients by evaluating how WAYNEUWA is affecting changes in the heart itself. The FDA recently granted Wayneuwa Fast Track designation for the treatment of ATTR cardiomyopathy, which can expedite regulatory review process. Receiving this designation further reinforces our confidence in Waynewa's potential to be a transformational treatment in this underserved and growing patient population.

Speaker 4

With CardioT transformed fully enrolled, we remain on track for data as early as 2025. Olosarsen is poised to be the 1st medicine we bring to market independently. With the positive Phase III results from the BALANCE study in patients with FCS, we are preparing our NDA and MAA submissions. Additionally, we're pleased that the FDA has granted olosarsen both orphan drug designation and breakthrough therapy designation, which can help expedite the review of this new medicine for the treatment of FCS. As a reminder, in the VALENCE study, the 80 milligram dose of ulcersarsson demonstrated statistically significant reductions in triglycerides, robust target engagement and a favorable safety and tolerability profile.

Speaker 4

Most importantly, oasarsen demonstrated unprecedented, substantial and clinically meaningful reductions in acute pancreatitis attacks. We are looking forward to presenting the VALENCE study data at the American College of Cardiology Annual Scientific Session in early April. Based on these positive data, olosarsen is positioned to become the standard of care for patients with FCS. We're excited to bring this important medicine to patients with olosarsen's first potential approval late this year assuming priority review. We're also developing olosarsen patients with severe hypertriglyceridemia or SHTG.

Speaker 4

Our ongoing Phase III studies for SHTG are progressing nicely and we remain on track for data next year. Following closely behind olasarsen is Donadulorcin, which we anticipate will be our 2nd independent launch assuming approval. Donna Doloresen has the potential to be an attractive new prophylactic treatment option for hereditary angioedema patients, many of whom continue to experience unpredictable, painful and severe attacks despite currently available prophylactic treatments. In the recently reported Phase III OASIS HAE results, Donna Doloresen demonstrated statistically significant reductions in the rate of attacks in HAE patients treated every 4 or every 8 weeks. In addition, Donna Doloresen achieved statistical significance on the extensive set of secondary endpoints in the Q4 week dose group and key secondary endpoints in the Q8 week group, which we expect to be key differentiators for donadulorsen in the prophylactic market.

Speaker 4

Donadulorsen also demonstrated a favorable safety and tolerability profile in the study. And additionally, we are encouraged that following completion of the treatment period in the Phase III study, over 90% of the randomized patients entered the ongoing OASIS plus open label extension. These positive Phase 3 results build on the positive durable results we have seen in the Phase II and Phase II OLE studies. In the Phase II open label extension study, Donna Doloresen demonstrated substantial reductions in HAE attacks that were sustained and durable over 2 years in addition to a favorable safety and tolerability profile. We anticipate Donna De Larson could evolve the HAE prophylactic treatment paradigm.

Speaker 2

And what

Speaker 4

I mean by that based on the Phase III results, Donadelorsen has the potential to extend dosing intervals to monthly or every 2 months using an auto injector from the current standard of care, which is dosed every 2 to 4 weeks using a vial and syringe and with an attractive efficacy, safety and tolerability profile demonstrated in the OASIS HAE Phase III study, we expect onadulursen to be a treatment of choice for many HAE patients. We're busy preparing the NDA, which will include both 4 week and 8 week dosing options. Additionally, Otsuka is preparing to submit for marketing approval in Europe, and we're pleased that we just recently received orphan drug designation for Donut Coulorsen in the EU. We're really looking forward to presenting the Phase 3 OASIS data at a medical congress by midyear along with the Phase 3 results, we're also planning to present results from the OASIS Plus study. The OASIS Plus study includes an open label cohort for patients rolling over from the Phase 3 study and a separate cohort that we refer to as the SWITCH study.

Speaker 4

The SWITCH study is evaluating patients who have transitioned to donadourcin from other prophylactic HAE medications. Turning now to our leading neurology franchise, which today includes 3 marketed breakthrough medicines that we discovered and developed: SPINRAZA, the leading medicine for the treatment of SMA Waynua, which was just recently approved for ATTR polyneuropathy and KALSAIDI approved to treat SOD1 ALS patients in the U. S. Last year. Behind our approved neurology medicines is a robust and growing clinical pipeline of medicines to treat both rare and broad neurological diseases.

Speaker 4

By the end of this year, we expect to have 6 wholly owned urology medicines in clinical development, including ION-seven seventeen for prion disease, which recently began clinical testing. Among our partner neurology programs, late last year, we completed enrollment in the Phase III HALOS study for ION-five eighty two in patients with Angelman syndrome. We also shared some encouraging initial observations from this study at the FAST meeting in November. These data included a reduction in slow wave EEG delta activity in approximately 70% of patients and an increase in faster frequency rhythms in over 80% of the patients, both compared to baseline activities. While direct comparisons are difficult and should be viewed with caution, this improvement in EEG activities exceeds what is observed in natural history studies over the same time period.

Speaker 4

Also a majority of patients in the study showed improvement compared to baseline in overall functioning on the total Bayley score, a direct measure of functioning across multiple domains and on the Angelman syndrome CGI change scale, which captures clinical impression of the patient. We look forward to reporting more data from the HALO study by mid year. With the successes we've achieved to date and the breadth of the pipeline in development, it's clear that our neurology franchise sets Celonis apart as a leader in this space. The Angelman study is one of several mid stage data readouts we have planned for 2024 that if positive could further add to our rich Phase 3 pipeline and bolster our ability to deliver a steady cadence of transformative medicines to patients for years to come. This year, we're looking forward to many key catalysts, including detailed Phase III data presentations and regulatory submissions olefarsen and donadularsen, several expected marketing approvals decisions for WAYNEUWA in various countries and potential launch of olosarsen assuming priority review and approval late this year.

Speaker 4

We will keep you updated on our progress throughout the year. And with that, I'll turn it over to Beth.

Speaker 5

Thank you, Richard. 2023 was a strong year underscored by similarly strong financial results in which we delivered substantial revenue while simultaneously advancing our pipeline and preparing to bring Wainua, olsarsen and daunadolursen to market. As a result, we delivered a non GAAP operating loss of 2 $47,000,000 a significant improvement compared to 2022 and our 2023 guidance. By significantly, we significantly exceeded 2023 revenue guidance by more than $200,000,000 earning revenues of $325,000,000 $788,000,000 for the Q4 and full year respectively. Revenue more than doubled in the Q4 of 2023 and increased 34% for the full year, both compared to the same periods in 2022.

Speaker 5

These increases were primarily driven by increased R and D revenue resulting from the business development successes we achieved last year. We earned 4.79 $1,000,000 of R and D revenue in 2023, which included revenue from our new collaborations with Otsuka, Roche and Novartis. In addition, we earned significant payments from AstraZeneca, including $50,000,000 for the U. S. Approval of WAYNEUVA for ATTR polyneuropathy and $36,000,000 for the licensing of ION-eight twenty six, a drug nearing clinical development designed to treat heart failure, both of these in the 4th quarter.

Speaker 5

The substantial R and D revenue we continue to generate reflects the value that our pipeline and technology are creating as numerous partnered programs advance. We also earned $309,000,000 in commercial revenue with the majority coming from SPINRAZA. Sales of SPINRAZA and our associated royalties were comparable year over year. And while 4th quarter sales were impacted by the timing of shipments in certain markets, SPINRAZA remained the global market leader in SMA. Importantly, with WAYNEUWA's FDA approval and recent launch, we look forward to adding WAYNEUWA to our commercial revenue streams, which currently includes SPINRAZA, KALSATI, TEGSEDI and WAYLIVRA.

Speaker 5

Our non GAAP operating expenses of $1,035,000,000 were slightly or approximately 4% above guidance, primarily due to certain one time costs, including the non cash charge associated with the lease exit and the license fee we paid to Vectoris in

Operator

the 4th

Speaker 5

quarter. Excluding those one time expenses, our operating expenses were within our guidance range $994,000,000 As expected, our operating expenses increased for the full year compared to 2022 as we continued to advance key programs in our pipeline. The increase in our R and D expenses was due to increased clinical study costs, which were higher because our Phase 3 studies were fully enrolled or nearly fully enrolled throughout last year. For the next several years, we expect our R and D expenses will stabilize near the current level as we move numerous wholly owned medicines through development. Also as expected, our SG and A expenses increased year over year as we invested ahead of the WAYNEUWA, olicarsen and Donadolurisan launches.

Speaker 5

We expect our SG and A expenses to increase as we invest in our commercial infrastructure to support the launches of our Ionis owned and co commercialized medicine. In addition, we exceeded our 2023 cash guidance by ending the year with $2,300,000,000 in cash and investments. Our ending cash was higher than projected primarily due to the significant payments from the business development transactions we completed last year and the successful convertible note refinancing we opportunistically completed last June, which provided us with cash earmarked to repay the remaining convertible notes due this year. We expect to carry the positive momentum generated by our strong 2023 performance into this year by deploying our capital resources toward growth opportunities to unlock next level value. This is the foundation for our 2024 full year financial guidance, which we're pleased to announce today.

Speaker 5

We project to earn more than $575,000,000 in revenue. Our total expected revenue for 2024 includes a sizable base of commercial revenue with SPINRAZA as the cornerstone. We expect the resilience SPINRAZA has demonstrated to continue and our royalties to reflect that. We're excited that WAYNU is on the market and the launch is off to a good start. AstraZeneca is responsible for booking product sales and we will earn royalties in the mid-twenty percent range on the U.

Speaker 5

S. Sales. With significant focus on patient identification and education, we are looking forward to adding initial WAYNEUER royalty revenue this year. And as more new patients are identified and the launch ramps up, we expect revenue to grow. We project meaningful R and D revenue from our partnered programs this year, although we anticipate R and D revenue will be lower than it was last year.

Speaker 5

Notably, a significant portion of our R and D revenue in 2024, approximately $150,000,000 to $175,000,000 will consist of non cash amortization from partner payments we received in prior years. We have the potential to earn cash generating revenue from regulatory milestones such as the EU approvals of Waynewa and while also continuing to exercise sound fiscal stewardship. As a result, we expect our 2024 operating expenses to increase in the mid single digit range compared to 2023, excluding the impact of one time costs last year. Our planned expense growth will come almost entirely from increases in our SG and A expenses. With the Waynew launch underway, our SG and A expenses will include our minority portion of Waynewa's sales and marketing costs, which are in the high teens to low 20% range.

Speaker 5

After having built our commercial capabilities over the last couple of years, we now have a fully integrated commercial organization capable of delivering ionosome medicines to patients, except of course for the necessary field team. Today, our commercial organization is enthusiastically preparing for our 1st independent launch, olosarsen for FCS, assuming approval. We expect to add the olosarsen FCS field team later this year. We're also scaling our capabilities as needed ahead of bringing danadolorsen to the market next year also assuming approval. Our projected R and D expenses reflect the important investments we are making to grow our wholly owned pipeline and advance our next wave of opportunities.

Speaker 5

We believe it's important to make investments today in our wholly owned programs because of the potential multi $1,000,000,000 revenue opportunity these programs represent for us. And we can make these pipeline investments while keeping R and D expenses steady because as several of our late stage studies end, we can reallocate resources toward our earlier stage programs as they advance into later stages of development. With meaningful revenues and modest expense growth, we are projecting a non GAAP operating loss of less than $475,000,000 Additionally, we project a year end cash balance of approximately $1,700,000,000 The vast majority of the projected year over year change in our cash reflects the investments we are making in our pipeline and our commercialization activities. In addition, we have $45,000,000 earmarked to address our remaining 2024 convertible notes that are coming due late this year. Looking beyond 2024, we expect to continue making significant investments infrastructure to support our goal to expand our proprietary pipeline and independently deliver our medicines to patients.

Speaker 5

As more and more of our Ionis own medicines come to market, we expect the proportion of product revenue to increase significantly. We estimate that the programs in our pipeline today have a combined multi $1,000,000,000 peak sales potential. And following behind these are additional attractive opportunities coming from our prolific research engine. Finally, we plan to continue to invest in technology that will enable us to expand our therapeutic opportunities and optimize delivery of our medicines. Our investments in 2024 and for the next few years reflect our plan to strategically deploy our resources to achieve the robust revenue growth and positive cash flow that we believe our pipeline can deliver.

Speaker 5

And with that, I'll turn it back to Brett.

Speaker 2

Thanks, Beth. We are very proud of the remarkable progress we made last year and we're very much looking forward to building on this positive momentum this year. We have arrived where we are today by being focused on a clear vision and a clear set of strategic objectives to achieve our vision, Building and advancing our pipeline and delivering medicines that we conceive, discover and develop directly to patients is a top priority for Ionis. We've established Ionis as a leader in cardiovascular and neurology drug discovery and development with one of the richest mid and late stage pipelines. Our pipeline is delivering.

Speaker 2

We reported multiple positive key readouts over the past year and are positioned to deliver additional important results in the near term. We also expect to add more wholly owned medicines to our pipeline this year and for many years to come. We are pleased that our first co commercialization launch of WAYNUWA off to a good start and we're very much looking forward to our upcoming independent launches for Olazarsen and Domigdorasen. In parallel, our partner programs are progressing on track with key Phase 2 data readouts planned this year and important Phase 3 readouts next year and beyond. We're extending our leadership position in oligonucleotide therapeutics by expanding and diversifying our technology, further optimizing our capabilities for existing therapeutic areas and opening up new areas for drug discovery.

Speaker 2

All of this sets us up to continue bringing a steady cadence of new and potentially transformational medicines to the market for many years to come. As I mentioned at the start of this call, Ionis is at a key inflection point. We have great momentum and a substantial number of upcoming value driving catalysts. To support all of our strategic priorities, we'll continue to make the necessary investments to ensure success and drive next level value for Iona's stakeholders with financial responsibility and discipline.

Speaker 6

We're really looking forward to

Speaker 2

an outstanding year and sharing our progress along the way. And with that, we'll now pause and open the call up for questions.

Operator

We will now begin the question and answer session. Our first question comes from Jason Gerber with BOA.

Speaker 3

BoA. So Brett, mindful that you said Cardio Transform will will continue as planned. My questions are just how you're thinking about scenarios that will dictate whether you wait to unblind the study in early first half twenty twenty five versus wait to the final analysis in 2026? Specifically, if Alnylam were to miss on its overall population composite endpoint, which shows a favorable trend, how might you approach this time and consideration?

Speaker 4

Thanks, Jason. We're not going

Speaker 2

to comment on other companies' programs, but what I will say is this, nothing has changed in our plans to potentially read the CARDIA Transform study out early. It's the same plan that we laid out last year and earlier this year as well. The key driving factor that will weigh into our decision along with our partner AstraZeneca to read out in 2025, which will be early is really the blinded event rates, which are progressing on track. And, of course, if we see additional information out there, from other programs, we'll certainly use that information to the best of our ability to make the proper decision on when to read the study out earlier or let the study play out to its completion. Jason, we really are pleased with the decision we made nearly 2 years ago when we lengthened our study and we greatly expanded the size of the patient population to account for the changed demographics in the ATTR cardiomyopathy patient population.

Speaker 2

This was a very wise decision and we believe we have the optimal trial design to not only ensure for a highly successful outcome, but to provide the richest data set of any medicine that's out there today on the market or in development, to provide the data that patients want, physicians want, payers want to drive, WAYNUWA to as many patients around the globe as possible.

Speaker 3

Got it. Okay. Thanks guys.

Operator

Our next question comes from Jessica Fiele with JPMorgan. Please go ahead.

Speaker 7

Hey, good morning guys. Thanks for taking the question. I'm just following up on the last question. Can you talk about commercially how you expect TTR silencers will be used in cardiomyopathy both prior to 2028 when tafamidis is still branded? And then maybe also if you expect that to change at all once tafamidis goes generic?

Speaker 7

Thank you.

Speaker 2

Thanks, Jess. It's certainly a dynamic market with several players. I'd like Ineza to jump in on this question.

Speaker 5

Yes, sure. Hi, Jess.

Speaker 8

So I think this is a market that's ripe for the clinical data for these patients. We have to remind ourselves that cardiomyopathy patients, this is a serious disease and it's a terminal illness. So with a 3 to 6 year survival rate, it's all going to depend on the mortality data you generate. And that's what we are really striving for in the positioning of our clinical trial. And that's why we extended the trial and have the duration and power that we put in to generate the best data set.

Speaker 8

So we expect that silencers based on their mechanism and the clinical data, again, with our composite endpoint showing the effect size that we anticipated showing would be used first line on patients that are naive to tafamidis and other stabilizers. And then for patients who are on tafamidis, it's all going to be dependent on the clinical data that we are able to show. On top of tafamidis, showing a robust cardiovascular risk reduction will really drive clinical adoption in this space. And based on the payer research that we've done, we're very confident that the physicians will be making the case for the use of 2 different classes of medications, again, based on that clinical data and that payers from what we've heard also in our research in the U. S.

Speaker 8

As well as outside of the U. S. Would reimburse it.

Speaker 3

Next question please.

Operator

Our next question comes from Yanan Xu with Wells Fargo Securities. Please go ahead.

Speaker 3

Thanks for taking our questions and congrats on progress in 2023. In your view, I guess a quick follow-up to the prior questions. What is the importance of achieving benefit in the overall population versus the monotherapy population only? And maybe in ATTR cardiomyopathy? And then a question on Angelman study readout, what would be a strong or definitive signal given that the study is not controlled and also included several age groups?

Speaker 3

And you've touched upon EEG. Could you talk about how that endpoint will be prevented? And what is the expected natural history or placebo response? And what level of change is considered meaningful? Thank you.

Speaker 2

Sure. Maybe I could ask Richard to weigh in on the importance of the overall endpoint in the cardiOTRANSFORM study and also what value to subgroups the monotherapy would have. And Eugene, you could jump in on the data that we think is going to be most important for the Angelman's readout later this year. Richard?

Speaker 4

Yes. Happy to. So we designed this study to give us a positive readout in a combined population. So our primary endpoint is on the totality of the data across both populations. And we expect that, that will be positive.

Speaker 4

And based on the numbers and on the duration that we put into this 2 years ago, we're very confident in the readout of this study.

Speaker 3

Got

Speaker 6

it. So with regard to Angelman, again, just a reminder, we completed enrollment of the multiple ascending dose study and that study was really the first in human experiment to describe the safety of this product as well as select the right dose and the right population for the pivotal study. It included, as you mentioned, it is an open label study. So of course, any kind of signal will need to be taken very carefully. But the goal of that study was to really enable us with a decision to progress into pivotal development.

Speaker 6

With regard to EEG specifically, of course, there is ample natural history data that exists across various age groups. Generally speaking, the AEG findings, EEG findings, abnormalities are fairly stable in this population. So again, seeing any improvement or differentiation from the natural history will be meaningful, certainly if it correlates, especially if it correlates with clinical improvement, which we will also be assessing.

Speaker 2

And I could just add to that, again, very briefly, a step slightly higher level. We have a lot of experience in developing our platform for neurological diseases. As you know SPINRAZA, KALSI, the tau program continues to go well as this the annuance program, many other programs progressing on track. We believe we have the right platform. This is the same chemical platform as SPINRAZA, as Kalsate, as the rest of our pipeline.

Speaker 2

We think it's the right chemistry for CNS diseases. So we're very much looking forward to the readout from our first inpatient study in Angelman's by midyear this year.

Speaker 8

Very helpful. Thank you.

Operator

Our next question comes from Myles Minter with William Blair. Please go

Speaker 9

ahead. Hi, it's Sarah on for Myles. Congrats on another great year. So a couple from us on Cardio Transform. FORM.

Speaker 9

Are patients in CardioTRANSFORM that are receiving tafamidis required to demonstrate some sort of disease progression to be eligible to enroll? And how do you think this particular subgroup will compare to families experienced patients in other studies from like a patient baseline demographic?

Speaker 6

Eugene, you want to take that? Sure. So the first question was related to requirement for any kind of disease progression. That's certainly not the case as long as the eligibility criteria have been met. Patients are eligible to enroll whether they are on tafamidis or not.

Speaker 6

We as Brett already mentioned, we remain pretty confident in the design of study and all of the changes that were made quite some time ago to react primarily to the changing demographics. And that really addresses your second point. The demographics that we're seeing over the last couple of years are quite different from what was seen in very early days of ATTR, therapeutic development. So we're seeing very similar trends that have been described recently in the literature.

Speaker 2

Yes. And then just to add to the disease progression answer from Eugene. Remember, I think it's important to realize that the vast majority of patients on tafamidis do progress and many of those patients don't get much benefit to begin with. So these patients are progressing. They need better treatment options either combination or as a monotherapy to halt or reverse their disease.

Speaker 2

So there's a lot of room for improvement here and we're looking to fill that gap with WAYNEUWA.

Speaker 9

Great. Thanks for taking the questions.

Operator

Our next question comes from Debjit Chattopadhyay with William Blair. Please go ahead.

Speaker 2

We're not hearing you.

Speaker 3

On Angelman, will the data include a decision on gono go from Biogen? And also what endpoints are most relevant to a potential Phase 2 trial design?

Speaker 2

Thanks, Robert. I think you cut off a little bit there

Speaker 4

in the beginning, but

Speaker 2

I think I got your first question. We're very much looking forward to the data readout for the Angelman program around mid year this year. And at that, Biogen as you rightly pointed out, has an option to license the program. Next step for the program is to go to Phase 3 development. When we share the top line data, will also be able to lay out the next steps whether Biogen will take the program forward or Ionis or some other scenario.

Speaker 2

So yes, all that's planned will come out at once. And then the second part of the question, what's most important do you think in the clinical endpoints for Angelman instance?

Speaker 6

Well, again, if you Robert, if you look at natural history that

Speaker 2

might weigh into a Phase 3 design, sorry. Sure.

Speaker 6

The natural history of Angelman patients has been quite well described various age groups within that population. So we're we included all of the standard measures of neurodevelopment and function in that study. And again, we will be data driven and we will be looking at response in all of the age groups that we included in the study. That was the purpose of the learning study that we're conducting first. But the standard measures that are included are, you know, Bayley scale of development, Bayley-four specifically in Vineland, which probably has the richest natural history data set.

Speaker 6

In addition to that, of course, we're looking at clinical angioblin specific clinical global impression of change. Again, that's been well described and validated as well as some of the more surrogate measures of activity like EEG signatures, etcetera.

Speaker 2

Thank you, Eugene. Thanks Robert. Next question please.

Operator

Our next question comes from Mike Ulz with Morgan Stanley. Please go ahead.

Speaker 10

Hey, guys. Thanks for taking the question. Maybe just one on Waynewa just given the early launch here. I know it's early, but any feedback you can provide there and what are you hearing specifically related to your monthly at home dosing, which is pretty differentiated here? Thanks.

Speaker 2

Yes. Oneida, would you like to take that?

Speaker 8

Sure. Hey, Mike. Yes, we're really excited to see a renew on market and available new treatment options for patients. The launch is going well. And I'm very pleased to actually see how the joint teams are executing to plan.

Speaker 8

Importantly, right, when you're in a launch stage, you're really seeing how things are working with the customer facing teams, the sales teams, the FRM teams and the Ionis PEM teams are working very collaboratively together and really leveraging each other's unique skills to really ensure that the product actually gets to patient as well. Yes, we're very well positioned with the product profile as well as the self administration profile that you just mentioned. And with AstraZeneca's really broad commercial reach and our deep TTR expertise, we're really opening up kind of the treatment option with WAYNEU in the marketplace.

Speaker 6

Great. Thank you.

Operator

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

Speaker 7

Thank you for taking our question. This is Tommy on for Salveen. Can you just speak to your expectations here for the upcoming Phase 2 GA data? In particular, how are you thinking about efficacy and maybe speed of onset relative to drugs that are administered into the eye? Thank you.

Speaker 4

So that's data that we're expecting in

Speaker 2

the second half of the year. Our primary efficacy endpoint is geographic atrophy lesion size. We have 2 dose levels in the study. It's a study that involves nearly 3 100 patients randomized with a placebo group in 2 dose levels, monthly administration systemically, obviously subcutaneously. We think this is a big advantage versus intravitreal drugs.

Speaker 2

We're going to be able to avoid the side effects that tend to hinder intravitreal administration as well as the inconvenience of intravitreal administration. It's also a very novel mechanism targeting the alternative complement pathway. By targeting factor B, we think holds great promise. Roche is certainly excited about it. We're operationalizing this study and we're very much looking forward to the data readout to the end of the year.

Speaker 2

But we think this is highly differentiated from anything else that is out there for GA. And all we need is the data and we're waiting on that.

Operator

Our next question comes from Luca Izzo with RBC. Please go ahead.

Speaker 11

Great. Thanks so much for taking my question. Congrats on all the progress. Maybe a quick one for TTR cardiomyopathy. I think Alnylam is pretty definitive that payers will not pay for the combo of 2 branded drugs like tafamidis and stabilizers.

Speaker 11

1, would you agree with that? And 2, if you don't, what's the magnitude of the benefit that you need to show on top of Tafamidis to really convince the payers that they can pay for 2 branded drugs? In other words, what's the hazard ratio you're hoping to see in that TAVA subgroup? Again, any call there much appreciated. And then second, maybe on ATAX T2, can you talk about that data readout for ALS?

Speaker 11

I think it's coming in mid-twenty 24. What are you hoping to see there? And maybe related, can you potentially get approved for this indication just on NfL similar to toplersen or do you ultimately need to show a functional benefit given this is sporadic and not SUD1 ALS? Again, any color there, much appreciated. Thanks so much.

Speaker 11

Thanks, Luca. There's a lot

Speaker 2

of questions in there. Let's try to unpack those. We're not going to be sharing hazard ratio data, but maybe first to set it up, I'd like Onaza to touch on the payer question for combination usage in TTR cardiomyopathy as well as what data she thinks would convince payers

Speaker 3

to pay?

Speaker 8

Yes, Luca. So I think you have to actually convince the clinicians here. The clinicians view this as a very serious disease. As I said, it's terminal. If you're showing a clinically meaningful importance in terms of improvement in cardiovascular risk reduction over tafamidis, they're going to make the case with payers.

Speaker 8

The important thing to think about here is also there are 2 different classes of medications, right, from a payer reimbursement perspective. They have a stabilizer class and silencer class. And usually those classes in terms of how payers reimburse are viewed mechanistically different as well, which allows for reimbursement in that particular class as well. So again, based on kind of both the work that we've done in understanding how payers view this as well as what clinicians will need, we think the combination will actually get approved.

Speaker 4

Yes. And as far as the ALS question, ataxin-two, so

Speaker 2

this is a, as I recall, a 3 month trial targeting ataxin-two. The obviously this is a first in patient study. We're looking at safety and tolerability, biomarker knockdown of target, but also the efficacy that we'll be looking at is both the ALS Functional Rating Scale as well as neurofilament light chain. We're not projecting this to be a registrational trial. The next step, if the study is positive, would be to go to Phase 3.

Speaker 2

And certainly, Chalsati has set the precedent that if a treatment for an ALS indication shows statistically significant reductions in Northland Light Chain with strong trends in clinical efficacy as well that could be a basis for approval. So certainly that's in the cards, but that would require a Phase III study.

Speaker 1

Super helpful. Thanks so much.

Operator

Our next question comes from David Lebowitz with Citi. Please go ahead.

Speaker 4

Thank you very much for taking my question. Given that the impetus is to really push to be in the frontline for the treatment of cardiomyopathy, How does a primary endpoint that includes tafamidis actually play into that? Is there a necessity to actually have defined monotherapy data to make it more comparable in effect for physicians to make a decision on what is a frontline treatment?

Speaker 2

Well, I'll start there and then maybe Oneida, you could talk about a little bit of what she believes physicians be looking for to prescribe on top of a stabilizer, for example. So David, as you know, our primary endpoint is the total patient population, which includes a reasonably balanced population, subpopulation of patients on tafamidis as well as in monotherapy. We hit the primary endpoint, which we believe we're well powered to do based on the upsizing

Speaker 3

of the study and the lengthening of

Speaker 2

the study that we did 2 years ago, that would include both patient populations, right? In patients with famidis, patients without famidis, we're seeing a CV risk reduction of X mortality, hospitalizations, etcetera. And we think that that will bear very well. As well our subgroup analysis, which is a key secondary stratified subgroup, which is both monotherapy as well as on top of tafamidis. So we're going to have all that data as well as we're going to have imaging data, MRI and technician pyrophosphate data that's also going to speak to these different subpopulations, which we think will be extremely valuable when we bring WAYNUWA to the market for TTR cardiomyopathy.

Speaker 2

Onasia, would you like to weigh in on some of this?

Speaker 8

Yes, sure. I mean, I think you've covered it. I mean, it's just a reminder, David, that we have a really, very large clinical study here. It's double the size of any other cardiomyopathy trial. Physicians view this as a landmark study.

Speaker 8

It's going to generate data that's, again, as Brett said, pre specified secondary key secondary subgroups, which will give us the data in the overall total population, but also the patients who are naive to a stabilizer and then patients on top of a stabilizer. So from a promotional perspective, you can see that sales representative will be able to bring in both sets of data depending on the physician and type of patient that they're seeing. And as a result, be able to communicate the effect size and the cardiovascular risk reduction in both of those different populations. I also think, again, we're getting data on mild and moderate and more severe TTR and being able to again generate data in different various disease will also be very informative to physicians in this year. If they're severe, should I treat?

Speaker 8

At what point should I treat? And those will be again very informative data sets along with MRI data that Brett said. So again, landmark study, lots of data to go to market with. We're really excited about the trial design that we have put into place and are looking for and awaiting the data.

Speaker 4

Thanks for taking my question.

Speaker 2

Thanks, David.

Operator

Our next question comes from Joseph Springer with Needham and Company. Please go ahead.

Speaker 3

Hi, thanks for taking our questions. A couple on HAE and Donnie Deloresen. Can you just remind us what will be included in the data submission package for the NDA? Will the switch data be included in that? And then looking ahead to the data presentation this year on the Phase 3 OASIS trial, just maybe frame expectations based on your market research, what metrics from prophylactic HHE therapy resonates most with patients, physicians and payers?

Speaker 2

Richard, would you talk about the data submission and presentation? Maisie, you could talk a little bit about the, what resonates with prescribers?

Speaker 4

Yes, sure. So in the NDA, the switch data will definitely be included. So we'll have OASIS Plus and the switch data as well as the registration study. And importantly, the Phase 2 study has been included and guided by FDA as a confirmatory study for us. So it could also be implemented and we think the label would be strengthened by having all of the data, the totality of data.

Speaker 4

So that's the NDA. I think I caught everything. And then, as far as what resonates with patients, I would say it's really control, whether they feel controlled by a prophylactic and of course, tolerability. And we think that the once monthly and every 2 months, painless small volume auto injector really makes a difference. Onezza, would you like to carry that forward?

Speaker 8

Sure. Thanks, Richard. Hey, Joey.

Speaker 5

Yes, I think the market research

Speaker 8

on this has been really consistent. We've been looking at this market for a while ever since we started the Phase 3s. And I think the patients are really looking for that efficacy and tolerability and convenience in a single drug. And they just don't have that right now. And that is the biggest unmet need.

Speaker 8

And we do believe that the done of the Larson data will actually provide that with our positive top line results from the OASIS study, hitting on a multitude of different efficacy parameters, safety, tolerability and self administered dual volume injection either every 4 or 8 weeks, we can actually really change the treatment paradigm here. And then complementary to that will be the switch data that you already asked about and Richard addressed as well as the OLE data, which will continue to show the durability of the cell. So, yes, very excited and look forward to sharing the data later on in the medical meeting.

Speaker 2

And when we present our plan

Speaker 3

to present the

Speaker 2

data, Joey, later this year will include the not only the Phase 3 data, but also the Phase 3 open label extension data as well as a really, really good robust presentation on the switch study, everything that we're seeing there. So stay tuned.

Speaker 3

Great, great. Thanks so much for taking our questions.

Operator

Our next question comes from Costas Bilyaris with BMO Capital Markets. Please go ahead.

Speaker 3

Thanks for taking our question. A 2 part question from us on Cardio form. Can you remind us how long is the minimum follow-up for each patient in this study? And what will be the maximum follow-up that you will have there in some patients? And the second part, how important do you think is the number of events that occurred between 30 and 36 months in this population?

Speaker 3

Thank you.

Speaker 2

So So this is a highly competitive space, Costas. We're not sharing follow-up data what we expect when we read up the study. Of course, we don't know we're going to be reading up the study early or later anyway, but we're not sharing expectations for what percentage of patients would be on treatment for what length of time at this point. We would look forward to doing that when the study reads out. As far as number of events over a few months, I mean, Eugene, it's pretty negligible, isn't it?

Speaker 2

Yes, I would think so in comparison

Speaker 6

as a proportion of the total time of observation. It's difficult to say exactly what that is, but it's your question was related to just a couple of months. So I'm not sure we have really good answer. But as Brett said, it's probably very minimal.

Speaker 2

Yes. We think we have the right trial design and trial duration and the size of the study cost us. We don't think

Speaker 3

a few months is really going

Speaker 2

to matter that much. And we're very pleased that we made the decision we made a couple of years ago to upsize our study.

Speaker 3

Very helpful. Thank you.

Operator

Our next question comes from Yaron Werber with Cowen. Please go ahead.

Speaker 3

Great. I got a couple of questions. When you guys expanded essentially doubled the study of cardio transforms, If I remember correctly, I think one of the reasons was to also go and enroll in areas with Afamidis wasn't necessarily available. Just remind us if that's correct. And if that's so, do you have a sense, are you able to enroll New York Heart 1 and 2, a lot of those patients and any sense what the overall tafamidis drop in is going to be?

Speaker 3

And then just quickly on OASIS, can you give us any color on how the Phase III stacks relative to the Phase II efficacy? Thank

Speaker 2

you. Thanks, Aaron. So you remember correctly, the sites that we opened up initially in the cardio transform study were largely U. S. Sites, right, guys?

Speaker 2

And as you know, in the U. S, there's a lot of fafamidis usage. So we actually slowed down, stopped enrollment at one point a couple of years ago in the U. S. Except for sites to add the hereditary patients that they were able to continue to bring in because we got a good percentage of those patients in this study too.

Speaker 2

And we emphasize, we prioritize sites outside the U. S. Or anywhere really, if we could find sites in the U. S. Too that where tafamidis wasn't available and that worked.

Speaker 2

We have a good balance between patients that are naive, not on stabilizer as well as on the past. We're also pleased with NHYA class, the proportion we have in classes 1, 2 and 3. I'm looking at you, Shneesh, Nani has said yes with that.

Speaker 3

Yes, we're

Speaker 2

not going to do comparisons, Yaron, on Phase III and Phase II data. We're going to look forward to sharing that data at a conference, I mentioned earlier around mid year this year. So stay tuned for that. And then maybe we have time for one more question.

Operator

Our final question comes from Allison Bratzel with Piper Sandler.

Speaker 12

So just another one on, Donnie Delorsen. Just on that switching study, can you remind us of the washout or weaning protocol prior to patients starting on Donnydulersen? And just how well does that represent a feasible real world switching strategy for patients currently on injectable or oral prophylaxis? And then just separately, from your conversations with the field, how does Q8 week versus monthly dosing change patients' and physicians' view of the drug's convenience profile? Thank you.

Speaker 3

Yes. Maybe I'll ask Anais to take

Speaker 2

that second one on Q4, Q8 week dosing. But Eugene, I mean, I don't think of this is a washout, right? These patients are not being washed out. They would be at risk for attacks if they were being washed out. It's really just knowing what the half life of the drug is, how long it lasts and we bring them we wean them off of our prophylactic treatment and we wean them on to domedulirsen, which has a fast onset of action to begin with.

Speaker 2

And that thereby we can wean them off without putting them into any harm's way, if you will. So there's not really a washout. It's a and that will be different for each prophylaxis. Different for different prophylaxis. Right.

Speaker 2

Different half life.

Speaker 6

Half life is different for oral versus injectable. So we'll publish all of that data in detail. The point of that study was really to provide some specifics around how these patients could be transitioned to them.

Speaker 2

And I'm pleased that really we haven't had any gaps in protection. I mean these patients are getting on very well as we transition them onto done Doloresen. So I'm very much looking forward to that our presentation. Oneza, what do you think about every 4 weeks and every 8 week dosing from a competitive or patient preference standpoint?

Speaker 8

Yes. Allison, I think, here the physicians are saying, listen, we want in order to kind of for prophylactic to really prevent the breakthrough attacks is for the patient to be compliant. And they see a lot of switching off currently with the current therapies where they're migrating to a less frequent dose, but then they start having attacks and they go back to a more frequent dose and they go back to a less frequent dose. So they see that cycle and what they really want is the compliance and with the efficacy as well. So we really do think that this gives them another treatment paradigm shift where you can start on a 4 week and potentially have patients who are stable and not having any attacks go through the 8 week and keep them there for a long period of time.

Speaker 8

So the compliance drives the efficacy of the product.

Speaker 2

Okay. Well, thanks, Allison. Thanks, Enezah. Thanks, everybody, for participating, for joining us on our exciting 2024. And we're looking forward to sharing updates along the way.

Speaker 2

Until then, have a great day everybody. Thanks.

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Key Takeaways

  • Two FDA approvals in 2023: Ionis achieved accelerated approval for KALSADIÆ (sod1 ALS) and late-December approval of WAYNUWA (ATTR polyneuropathy), with the WAYNUWA U.S. launch underway via AstraZeneca.
  • Positive Phase III readouts for olsarsen in familial chylomicronemia syndrome and donadulorsen in hereditary angioedema set the stage for NDA/MAA filings and Ionis’s first independent launches by year-end.
  • Cardio Transform, the largest ATTR cardiomyopathy trial ever, is fully enrolled and on track for an early 2025 readout to support both monotherapy and combination use with tafamidis.
  • Strong 2023 financials: non-GAAP revenue of $789 million (34% growth), year-end cash of $2.3 billion, and a non-GAAP operating loss of $247 million; 2024 guidance forecasts >$575 million revenue and <$475 million non-GAAP loss.
  • Pipeline and technology expansion continued with nine Phase III programs (up from six), advancement of LICA muscle-targeting siRNA and CNS delivery partnerships, positioning Ionis for a steady cadence of transformational medicines.
AI Generated. May Contain Errors.
Earnings Conference Call
Ionis Pharmaceuticals Q4 2023
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