Earnings call: Ionis highlights pipeline progress and financial outlook

Ionis Pharmaceuticals, Inc. (NASDAQ: NASDAQ:) highlighted significant advancements in its drug development pipeline and provided a financial outlook during its recent earnings call. The company reported positive Phase 3 data for two of its leading drug candidates, olezarsen and donidalorsen, and is planning regulatory submissions in the U.S. and Europe. Ionis also reported a non-GAAP operating loss of $247 million for 2023 but exceeded revenue expectations with $788 million, driven largely by R&D collaborations. Looking ahead, Ionis projects over $575 million in revenue for 2024, with anticipated revenue growth from the launch of WAINUA and ongoing R&D partnerships.

Key Takeaways

• Positive Phase 3 data for olezarsen in FCS and donidalorsen in HAE, with regulatory submissions planned.
• Olezarsen received Breakthrough Therapy Designation from the FDA and could be approved by year-end.
• Donidalorsen showed favorable safety and tolerability, with potential for extended dosing intervals.
• Expanded Phase 3 pipeline with 9 medicines in Phase 2 development, aiming for multibillion-dollar revenue opportunities.
• Financials: Non-GAAP operating loss of $247 million in 2023, revenues of $788 million exceeding guidance.
• 2024 revenue projection over $575 million, with WAINUA launch and R&D partnerships contributing.
• Anticipated year-end cash balance of approximately $1.7 billion despite increased SG&A expenses.

Company Outlook

• Ionis expects to deliver a steady stream of new medicines independently, driving significant revenue opportunities.
• The company is focusing on growth to increase value, with a revenue projection of over $575 million for 2024.
• WAINUA’s launch is underway, with expected royalties in the mid-20% range on U.S. sales.
• R&D revenue to include non-cash amortization from partner payments.

Bearish Highlights

• The company reported a substantial non-GAAP operating loss of $247 million for the year 2023.
• Operating expenses are projected to increase in the mid-single-digit range due to SG&A expenses.

Bullish Highlights

• Ionis plans to submit regulatory approvals for olezarsen and donidalorsen in the U.S. and Europe.
• Positive Phase 3 results could position olezarsen as a potential standard of care for FCS.
• Revenue growth was primarily driven by R&D revenue, with significant contributions from new collaborations.

Misses

• Enrollment in the U.S. study for tafamidis usage was slowed down a couple of years ago.

Q&A Highlights

• Discussions on payer reimbursement perspectives for various medication classes.
• Phase 3 trial for ataxin-2 and the primary endpoint for the CARDIO-TTRransform study were addressed.
• Data submission for the NDA on HAE and donidalorsen, and patient preferences for dosing frequency were discussed.
• Transition protocol for patients switching to donidalorsen was explained.

Ionis Pharmaceuticals, Inc. remains optimistic about its future, with a focus on delivering new medicines and achieving robust revenue growth. The company is looking forward to sharing more data at a mid-year conference and is excited about the potential market impact of its treatments, particularly in 2024.

Full transcript – Isis Pharma (IONS) Q4 2023:

Operator: Good morning, and welcome to the Ionis Fourth Quarter and Full Year 2023 Financial Results Conference Call. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Walke, Senior Vice President of Investor Relations to lead off the call. Please begin.

Wade Walke: 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’ve 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 Hougen, our Chief Financial Officer. Eric Swayze, our Executive Vice President of Research; Eugene Schneider, Clinical Chief Clinical Development Officer; and Onaiza Cadoret, Chief Global Product Strategy and Operations Officer, will also join us for the Q&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. With that, I’ll turn the call over to Brett.

Brett Monia: 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. 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 to 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 olezarsen for FCS. 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, QALSODY for SOD1-ALS, and WAINUA for ATTR polyneuropathy. QALSODY is the first drug approved to treat a genetic form of ALS. It was granted accelerated approval in the U.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 WAYNUA for ATTR polyneuropathy in late December. The WAINUA launch is well underway in the U.S. through our co-commercialization partnership with AstraZeneca (NASDAQ:), and we’re executing on our strategy to bring WAINUA to patients globally with 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 WAINUA is very well positioned to become the therapy of choice for ATTR patients who remain underserved by current therapies. With a larger ATTR cardiomyopathy indication, we continue to advance our CARDIO-TTRransform study as planned. As the largest study ever conducted in this patient population, CARDIO-TTRransform 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. 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 WAINUA to patients in the U.S. and around the globe. We also recently delivered positive Phase 3 top line data readouts for two additional important medicines: olezarsen in FCS and donidalorsen in HAE. In the Phase 3 BALANCE study in patients with FCS, olezarsen showed significant triglyceride reductions, substantial reductions in acute pancreatitis events and a favorable safety and tolerability profile. We remain on track to file for marketing approval in the U.S. and EU this year, positioning olezarsen for potential approval in the U.S. by the end of the year, assuming we get priority review. With this timing, we expect olezarsen 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 2 OASIS HAE study of donidalorsen for the prophylactic treatment of hereditary angioedema. In the Phase 3 study, donidalorsen 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. We expect donodolorsen to be our second, independent U.S. launch. Additionally, our partner, Otsuka, is preparing to submit for marketing improvement in Europe. Based on our Phase 3 results and a durable efficacy and favorable safety data seen long term in the ongoing Phase 2 open-label extension study, we believe donidalorsen could be an attractive new treatment option for patients with HAE. We look forward to presenting the full Phase 3 data for both olezarsen and donidalorsen 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 3 development. And this year, we began with 9 medicines in Phase 2. These new Phase 3 additions include Zilganersen, our wholly owned medicine for Alexander disease and two partner programs, Bepirovirsen for chronic HBV and IONIS-FB-LRx for IgA nephropathy. We also continued to make great strides last year in advancing our industry-leading RNA-targeting technology. We advanced our first Bicycle-siRNA muscle-targeting LICA drug for a heart failure indication into preclinical development, which AstraZeneca licensed in the fourth quarter. 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 Vect-Horus 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. 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. Three positive Phase 3 readouts and numerous upcoming Phase 3 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 advance 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. And with that, I’ll turn the call over to Richard to discuss our recent pipeline progress. Next, Beth will review our 2023 financial results and provide our 2024 financial guidance. And then I’ll wrap things up before taking your questions. Richard?

Richard Geary: Well, thank you, Brett. We had many notable pipeline achievements in 2023, some of which you heard with the highlight being the approval in December of WAINUA in the U.S. for patients with ATTR polyneuropathy. WAINUA was approved based on the NEURO-TTRansform results in Week 35. In this study, WAINUA demonstrated powerful and sustained TTR suppression, stop neuropathy disease progression and improved neuropathy impairment and quality of life. These highly positive results were reinforced at Week 66 and 85 and as the only approved medicine for the treatment of ATTR-polyneuropathy that can be self-administered via autoinjector. We believe WAINUA is well positioned to reach newly diagnosed patients and patients who remain underserved by current therapies. WAINUA’s robust profile also supports our confidence in the potential to benefit patients in the much larger ATTR cardiomyopathy patient population. Our conviction was reinforced with the data we presented at HFSA late last year, that showed improvements in cardiac structure and function in a predefined cardiac subpopulation of patients in NEURO-TTRansform. 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-TTRansform study. With over 1,400 patients, CARDIO-TTRansform is the largest and most comprehensive study ever conducted in ATTR cardiomyopathy patients. We designed the 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. We are also conducting advanced cardiac imaging substudies as part of our overall program. These include an MRI sub-study and a syntography substudy. We believe these data will generate even more valuable data about the potential benefits of WAINUA in cardiomyopathy patients by evaluating how WAINUA is affecting changes in the heart itself. The FDA recently granted WAINUA Fast Track designation for the treatment of ATTR cardiomyopathy, which can expedite the regulatory review process. Receiving this designation further reinforces our confidence in WAINUA’s potential to be a transformational treatment in this underserved and growing patient population. With CARDIO-TTRansform fully enrolled, we remain on track for data as early as 2025. olezarsen is poised to be the first medicine we bring to market independently. With the positive Phase 3 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 olezarsen 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 BALANCE study, the 80-milligram dose of olezarsen demonstrated statistically significant reductions in triglycerides, robust target engagement and a favorable safety and tolerability profile. Most importantly, olezarsen demonstrated unprecedented substantial and clinically meaningful reductions in acute pancreatitis attacks. We are looking forward to presenting the BALANCE study data at the American College of Cardiology Annual Scientific Session in early April. Based on these positive data, olezarsen is positioned to become the standard of care for patients with FCS. We’re excited to bring this important medicine to patients with olezarsen’s first potential approval late this year, assuming priority review. We’re also developing olezarsen for patients with severe hypertriglyceridemia or SHTG. Our ongoing Phase 3 studies for SHTG are progressing nicely, and we remain on track for data next year. Following closely behind olezarsen is donidalorsen, which we anticipate will be our second independent launch assuming approval. Donidalorsen 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 3 OASIS-HAE results, donidalorsen demonstrated statistically significant reductions in the rate of attacks in HAE patients, treated every 4 or every 8 weeks. In addition, donidalorsen achieved statistical significance on the extensive set of secondary endpoints in the Q4 week dose group and key secondary endpoints in the Q 8-week group, which we expect to be key differentiators for donidalorsen in the prophylactic market. Donadolorsen also demonstrated a favorable safety and tolerability profile in the study. And additionally, we are encouraged the following completion of the treatment period in the Phase 3 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 2 and Phase 2 OLE studies. In the Phase 2 open-label extension study, donidalorsen 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 donidalorsen could evolve the HAE prophylactic treatment paradigm. And what I mean by that, based on the Phase 3 results, donidalorsen 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 a syringe, and with an attractive efficacy, safety and tolerability profile demonstrated in the OASIS-HAE Phase 3 study, we expect donidalorsen 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 donidalorsen 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 (NYSE:) study. The Switch study is evaluating patients who have transitioned to donidalorsen 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; WAINUA, which was just recently approved for ATTR-polyneuropathy and QALSODY 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. By the end of this year, we expect to have 6 wholly owned neurology medicines in clinical development including ION717 for Prion disease, which recently began clinical testing. Among our partnered neurology programs late last year, we completed enrollment in the Phase 1/2 HALOS study for ION582 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. Also, a majority of patients in the study showed improvement compared to baseline and overall functioning on the total daily 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 [indiscernible19:35] study by midyear. With the successes we’ve achieved to date and the breadth of the pipeline in development, it’s clear that our neurology franchise sets IONIS 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 3 data presentations and regulatory submissions for olezarsen and donidalorsen, several expected marketing approvals, decisions for WAINUA in various countries and potential launch of olezarsen assuming priority review and approval late this year. We will keep you updated on our progress throughout the year. And with that, I’ll turn it over to Beth.

Beth Hougen: 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, olezarsen and donidalorsen to market. As a result, we delivered a non-GAAP operating loss of $247 million, a significant improvement compared to 2022 and our 2023 guidance. By significantly, we significantly exceeded 2023 revenue guidance by more than $200 million, earning revenues of $325 million and $788 million for the fourth quarter and full year, respectively. . Revenue more than doubled in the fourth quarter of 2023 and increased 34% for the full year, both compared to the same periods in 2022. These increases were primarily driven by increased R&D revenue, resulting from the business development successes we achieved last year. We earned $479 million of R&D revenue in 2023, which included revenue from our new collaborations with Otsuka, Roche and Novartis (SIX:). In addition, we earned significant payments from AstraZeneca, including $50 million for the U.S. approval of WAINUA for ATTR-polyneuropathy and $36 million for the licensing of ION826, a drug nearing clinical development designed to treat heart failure, both of these in the fourth quarter. The substantial R&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 million in commercial revenue with the majority coming from SPINRAZA. The sales of SPINRAZA and our associated royalties were comparable year-over-year. And while fourth quarter sales were impacted by the timing of shipments in certain markets, SPINRAZA remained the global market leader in SMA. Importantly, with WAINUA’s FDA approval and recent launch, we look forward to adding WAINUA to our commercial revenue streams, which currently includes SPINRAZA, QALSODY, TEGSEDI and WAYLIVRA. Our non-GAAP operating expenses of $1.35 billion 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 Vect-Horus in the fourth quarter. Excluding those one-time expenses, our operating expenses were within our guidance range at $994 million. As expected, our operating expenses increased for the full year compared to 2022 as we continue to advance key programs in our pipeline. The increase in our R&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&D expenses will stabilize near the current level as we move numerous wholly owned medicines through development. Also, as expected, our SG&A expenses increased year-over-year as we invested ahead of the WAINUA, olezarsen and donidalorsen launches. We expect our SG&A expenses to increase as we invest in our commercial infrastructure to support the launches of our Ionis-owned and co-commercialized medicines. In addition, we exceeded our 2023 cash guidance by ending the year with $2.3 billion 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 towards 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. We project to earn more than $575 million 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 at our royalties to reflect that. We’re excited that WAINUA 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-20% range on the U.S. sales. With significant focus on patient identification and education, we are looking forward to adding initial WAINUA 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&D revenue from our partnered programs this year, although we anticipate R&D revenue will be lower than it was last year. Notably, a significant portion of our R&D revenue in 2024 and approximately $150 million to $175 million will consist of non-cash amortization from partner payments we received in prior years. We have the potential to earn cash generating revenue for regulatory milestones such as the EU approvals of WAINUA and QALSODY, license fees and R&D funding from our partners. Our 2024 operating expense guidance reflects our commitment to independently bring our medicines to patients 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&A expenses. With the WAINUA launch underway, our SG&A expenses will include our minority portion of WAINUA’s sales and marketing costs, which are in the high teens to low 20% range. After having built our commercial capabilities over the last couple of years, we now have a fully integrated commercial organization capable of delivering Ionis own medicines to patients except of course for the necessary field team. Today, our commercial organization is enthusiastically preparing for our first independent launch, olezarsen for FCS. Assuming approval, we expect to add the olezarsen FCS field team later this year. We’re also scaling our capabilities as needed ahead of bringing donidalorsen to the market next year, also assuming approval. Our projected R&D expenses reflect the important investments we are making to grow our wholly-owned pipeline and advance our next wave of opportunities. We believe it’s important to make investments today in our wholly owned programs because of the potential multibillion dollar revenue opportunity these programs represent for us. And we can make these pipeline investments while keeping R&D expenses steady. Because in several of our late-stage studies then, 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 million. Additionally, we project a year-end cash balance of approximately $1.7 billion. 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 million 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 in our commercial infrastructure to support our goal to expand our proprietary pipeline and independently deliver our medicines to patients. 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 multibillion dollar 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. And with that, I’ll turn it back to Brett.

Brett Monia: 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 have 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. 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 WAINUA is off to a good start, and we’re very much looking forward to our upcoming independent launches for olezarsen and donidalorsen. In parallel, our partner programs are progressing on track with key Phase 2 data readouts planned this year, an important Phase 3 readouts next year and beyond. We’re extending our leadership position in oligonucleotide therapeutics by expanding, diversifying our technology, further optimizing our capabilities for existing therapeutic areas and opening up new areas for drug discovery. 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 will continue to make the necessary investments to ensure success and drive next level value for Ionis stakeholders with financial responsibility and discipline. We’re really looking forward to an outstanding year and sharing our progress along the way. And with that, we will now pause and open the call up for questions.

Operator: [Operator Instructions] Our first question will come from Jason Gerberry with BofA. Please go ahead.

Jason Gerberry: Thank you for taking my question. So Brett, mindful that you said CARDIO-TTRansform 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 ‘25 versus wait until the final analysis in 2026. And specifically, if Alnylam were to miss on its overall population composite end point, but shows a favorable trend, how might you approach this time in consideration?

Brett Monia: Thanks, Jason. We’re not going to comment on other companies’ programs. But what I will say is this. Nothing has changed in our plans to potentially read the CARDIO-TTRransform 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 will certainly use that information to the best of our ability to make a 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. 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 drive WAINUA to as many patients around the globe as possible.

Jason Gerberry: Got it. Okay, thanks, guys.

Operator: Our next question comes from Jessica Fye with JPMorgan. Please go ahead.

Jessica Fye: Great. Good morning, guys. Thanks for taking our question. Just following up on the last question. Can you talk about commercially how you expect TTRansform/silencers will be used in cardiomyopathy, both prior to 2020 when tafamidis is still branded. And then maybe also if you expect that to change at all once tafamidis goes generic? Thank you.

Brett Monia: Thanks, Jess. Very – it’s certainly a dynamic market with several players. I’d like Onaiza to jump in on this question.

Onaiza Cadoret: Yes, sure. Hi, Jess. 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. 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, 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 two 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. as well as outside the U.S. would reimburse it.

Brett Monia: Next question please.

Operator: Our next question comes from Yanan Zhu with Wells Fargo Securities. Please go ahead.

Yanan Zhu: Thanks for taking our question. And congrats on the 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, and you 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.

Brett Monia: Sure. Maybe I could ask Richard to weigh in on the importance of the overall in the CARDIO-TTRransform study and also with 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?

Richard Geary: 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 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.

Yanan Zhu: Got it.

Eugene Schneider: 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. 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.

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

Yanan Zhu: Very helpful. Thank you.

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

Sarah Schram: Hi, you’ve got Sarah on for Myles. Congrats on another great year. So a couple from us on CARDIO-TTRransform. Are patients in CARDIO-TTRransform 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 experienced patients in other studies from like a patient baseline demographic?

Brett Monia: Eugene, do you want to take that?

Eugene Schneider: 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. We – as Brett already mentioned, we remain pretty confident in the design of the 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 seen 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.

Brett Monia: 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 in combination or as a monotherapy to halt or reverse their disease. So there is a lot of room for improvement here, and we’re looking to fill that gap with WAINUA.

Sarah Schram: Great. Thank you for taking the questions.

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

Wade Walke: Debjit, you are Guggenheim. We are not hearing you.

Debjit Chattopadhyay: On Angelman, will the data include a decision on go/no go from Biogen? And also, what endpoints are most relevant to a potential Phase 2 trial design?

Brett Monia: Thanks, Robert.

Eugene Schneider: Sure. The natural history of Angelman patients has been quite well described various age groups within that population. So, we are – we included all of the standard measures of neuro-development 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 are conducting first. But the standard measures that are included are Bayley scale of development, Bayley-4, specifically and Vineland which probably has the richest natural history data set. In addition to that, of course, we are looking at clinical Angelman-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.

Debjit Chattopadhyay: Thanks Eugene.

Brett Monia: Thanks. Next question please.

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

Mike Ulz: Hey guys. Thanks for taking the question. Maybe just one on WAINUA, 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.

Brett Monia: Yes. Onaiza, would you like to take that?

Onaiza Cadoret: Sure. Hi Mike. Yes, we are really excited to see WAINUA market and available as a new treatment option for patients. The launch is going well. And I am very pleased to actually see how the joint teams are executing to plan. Importantly, right, when you are in the launch stage, you are really seeing how things are working with the customer-facing teams, the sales teams, the FRM teams and the Ionis 10 teams are working very collaboratively together and really leveraging each other’s unique skills to really ensure that the product actually gets to patients as well. Yes, we are very well positioned with the product profile as well as the self-administration profile that you just mentioned. And with AstraZeneca is really broad commercial reach and our deep TTR expertise, we are really opening up kind of the treatment option with WAINUA in the marketplace.

Mike Ulz: Great. Thank you.

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

Tommie Reerink: Thank you for taking our question. This is Tommie 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.

Brett Monia: So, that’s data that we are expecting in the second half of the year. Our primary efficacy endpoint is geographic atrophy lesion size. We have two dose levels in the study. It’s a study that involves nearly 300 patients randomized with a placebo group in two dose levels, monthly administration systemically, obviously, subcutaneously. We think that this is a big advantage versus intravitreal drugs. We are going to be able to avoid the side effects that tend to hinder our intravitreal administration as well as the inconvenience of intravitreal administration. It’s also a very novel mechanism, targeting the alternative complement pathway, targeting Factor B, and we think holds great promise. Roche is certainly excited about it. We are operationalizing the study, and we are very much looking forward to the data readout at the end of the year. But we think this is highly differentiated from anything else that is out there for GA and what we need is the data, and we are waiting on that.

Operator: Our next question comes from Luca Issi with RBC. Please go ahead.

Luca Issi: Great. Thanks so much for taking my questions. Congrats on all the progress. Maybe a quick one TTR cardiomyopathy, I think Alnylam is pretty definitive that payers will not pay for the combo of two branded drugs like tafamidis and stabilizers. One, will you agree with that. And two, 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 two branded drugs. In other words, what’s the hazard ratio you are hoping to see in that tafa subgroup, Again, any color there, much appreciated. And then second, maybe on ataxin-2, can you talk about that data readout for ALS, I think it’s coming in mid-2024. What are you hoping to see there? And maybe related, can you potentially get approved for this indication just on NfL similar to tofersen, or do you ultimately need to show a functional benefit given this is sporadic and not sub-1-ALS? Again, any color there much appreciated. Thanks so much.

Brett Monia: Thanks Luca. There is a lot of questions in there. Let’s try to unpack those. We are not going to be sharing hazard ratio data. But maybe first, to set it up, I would like Onaiza to touch on the payer question for combination usage in TTR cardiomyopathy as well as what data she thinks would convince payers to pay.

Onaiza Cadoret: Yes. Luca, so I think you have to actually convince the clinicians here. The clinicians view this as a very serious disease, as I have said, it’s terminal. If you are showing a clinically meaningful importance in terms of improvement in cardiovascular risk reduction over tafamidis, they are going to make the case with payers. The important thing to think about here is also there are two different classes of medications, right, from a payer reimbursement perspective, to have a stabilizer class and silencer class and usually those classes in terms of how payers are reimbursed – 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 have done and understanding how payers view this as well as what clinicians will need, we think the combination will actually get approved.

Brett Monia: Yes. And as far as the ALS question, the ataxin-2, so this is, as I recall, a three -month trial targeting ataxin-2. Obviously, this is a first-in-patient study. We are looking at safety and tolerability, biomarker knocked down of target, but also the efficacy that we will be looking at is both the ALS functional rating scale as well as neurofilament light chain. We are not projecting this to be a registrational trial. The next step – if the study is positive would be to go to Phase 3. And certainly, QALSODY has set the precedent that if a treatment for an ALS indication shows statistically significant reductions in neurofilament 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 3 study.

Luca Issi: Super helpful. Thanks so much.

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

David Lebowitz: Thank you very much for taking my question. Given that the impetus is to really push to be in the front line 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?

Brett Monia: Well, I will start there and then maybe Onaiza could talk about a little bit of what she believes physicians will be looking forward 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, so population of patients on tafamidis as well as in monotherapy. If we hit the primary endpoint, which we believe we are well powered to do based on the upsizing of the study and the lengthening of the study that we did 2 years ago that would include both patient populations, right, in patients with tafamidis, patients without tafamidis, we are seeing a CV risk reduction of x mortality, hospitalizations, etcetera, and we think that, that will bear very well as low our subgroup analysis, which is a key secondary stratified subgroup, which is both monotherapy as well as on top of tafamidis. So, we are going to have all that data as well as we are going to have imaging data. MRI and technetium pyrophosphate data that’s also going to speak to these different subpopulations, which we think will be extremely valuable when we bring – when we went to the market for TTR cardiomyopathy. Onaiza, would you like to weigh in on some of this?

Onaiza Cadoret: Yes, sure. I mean I think you covered it. I mean it’s just a reminder, David, that we have a really very large clinical study here, double the size of any other cardiomyopathy trial. Physicians view this as a landmark study. 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 patients who are naïve to a stabilizer and then patients on top of the 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 the type of patients that they are seeing and as a result, be able to communicate the effect size in the cardiovascular risk reduction in both of those different populations. I also think, again, we are getting data on mild and moderate and more severe TTR and being able to again generate data and different severities of disease will also be very informative to physicians in this year. If they are severe, should I treat 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 are really excited about the trial design that we have put into place and are looking forward and awaiting the data.

David Lebowitz: Thanks for taking my question.

Brett Monia: Thanks David.

Operator: Our next question comes from Joseph Stringer with Needham & Company. Please go ahead.

Joseph Stringer: Hi. Thanks for taking our questions. A couple on HAE and donidalorsen, 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 2 OASIS trial, just maybe frame expectations based on your market research, what metrics from prophylactic HAE therapy resonates most with patients, physicians and payers?

Brett Monia: Richard, can you talk about the data submission and presentation. Onaiza, you could talk a little bit about the – what resonates with the drivers?

Richard Geary: Yes. Sure. So, in the NDA, the switch data will definitely be included. So, we will 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. 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 two months, painless, small volume, auto-injector really makes a difference. Onaiza, would you like to carry that forward?

Onaiza Cadoret: Sure. Thanks Richard. Yes, I see the market research on this has been really consistent. We have been looking at this market for a while ever since we started the safety Phase 3s. And I think as your – 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. And we do believe that the donidalorsen 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 four weeks or eight 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 drug. So, very excited and look forward to sharing the data later on in the medical meeting.

Brett Monia: And when we present our plan to present data, Joey, later this year will include the – not only the Phase 3 data, but also the Phase 2 open label extension data as well as a really, really good robust presentation on the Switch study, everything that we are seeing there. So, stay tuned.

Joseph Stringer: Great. Thanks so much for taking our questions.

Operator: Our next question comes from Kostas Biliouris with BMO Capital Markets. Please go ahead.

Kostas Biliouris: Thanks for taking our question. A two-part question from us on CARDIO-TTRransform. Can you remind us how long is the minimum follow-up for its 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 months and 36 months in this population? Thank you.

Brett Monia: So, this is a highly competitive space, Kostas. We are not sharing follow-up data, what we expect when we re-up the study, of course, we don’t know we are going to be reading out the study early or later anyway. But we are 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?

Eugene Schneider: Yes. I would think so in comparison the proportion of the total time of observation. It’s difficult to say exactly what that is, but your question was related to just a couple of months. So, I am not sure we have really good answer. But as Brett said, it’s probably very minimal.

Brett Monia: Yes. We think we have the right trial design, trial duration and the size of the study, Kostas, we don’t think a few months is really going to matter that much. And we are very pleased that we made the decision we made a couple of years ago to upsize our study.

Kostas Biliouris: Very helpful. Thank you.

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

Yaron Werber: Great. I got a couple of questions. When you guys expanded essentially doubled the study of CARDIO-TTRransform, if I remember correctly, I think one of the reasons was to also go and enroll in areas with tafamidis wasn’t necessarily available. Just remind us if that’s correct? And is that so, do you have a sense, are you able to enroll New York Heart I and II, a lot of those patients? And any sense what the overall tafamidis drop is going to be? And then just quickly on OASIS, can you give us any color on how the Phase 3 stacks relative to the Phase 2 on efficacy is? Thank you.

Brett Monia: Thanks Yaron. So, you remember correctly, the sites that we opened up initially in the CARDIO-TTRransform study were largely U.S. sites, right, guys. And as you know, in the U.S., there is a lot of tafamidis usage. So, we actually slowed down, stopped enrollment at one point, a couple of years ago in the U.S., except for sites that had the hereditary patients that they were able to continue to bring in because we got a good percentage of those patients in the study, too. And we emphasize, we prioritize sites outside the U.S. or anywhere really, if we could find sites in the U.S., too, where tafamidis wasn’t available and that worked. We have a good balance between patients that are naïve to stabilizer as well as on tafamidis. We are also pleased with NYHA Class the proportion we have in Classes 1, 2 and 3 and Eugene should you [indiscernible] with that.

Eugene Schneider: Yes. We are not going to do comparisons, Jerome, on Phase 3 and Phase 2 data. We are going to look forward to sharing that data at a conference, as I mentioned earlier, around mid-year, this year. So, stay tuned to that. And then maybe we have time for one more question.

Operator: Our final question comes from Allison Bratzel with Piper Sandler. Please go ahead.

Allison Bratzel: Hey. Thanks for fitting me in and taking our question. So, just another one on donidalorsen, just on that switching study, can you remind us of the washout or weaning protocol prior to patients starting on donidalorsen. 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.

Brett Monia: Yes. Maybe I will ask Onaiza to take that second one on Q4, Q8-week dosing. But Eugene, I mean I don’t think of this as a washout, right. These patients are not being washed out. They would be at risk through 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 off of our prophylactic treatment, and we wean them on donidalorsen, which has a fast set of action to begin with, and that thereby, we can wean them off without putting them into harm’s way, if you will. So, it’s not really a wash out, it’s a – that will be different for each platform.

Eugene Schneider: Different for different prophylaxis. Half life is different for oral versus injectables. So, we will 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 different…

Brett Monia: These that really, we haven’t had any gaps in protection, I mean these patients are getting on very well as we transition them on to donidalorsen. So, very much looking forward to that our presentation. Onaiza, what do you think about every four weeks and every eight-week dosing from a competitive or a patient preference standpoint?

Onaiza Cadoret: Yes. Allison, I think here, the physicians are saying, listen, we want – if we are to kind of, for a 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 are migrating to a less frequent dose, but then they start having attacks and they go back to have 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 four-week and potentially have patients who are stable and not having any attacks go through the eight-week and keep them there for a long period of time. So, the compliance drives the efficacy of the product.

Brett Monia: Okay. Well, thanks Allison. Thanks Onaiza. Thanks everybody for participating, for joining us on our call today. We really are excited about the great progress we have already made this year and everything ahead of us. It’s really shaping up to be a really remarkable exciting 2024. And we are looking forward to sharing updates along the way. Until then, have a great day, everybody. Thanks.

Operator: Goodbye.

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