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Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)

Q2 2014 Earnings Conference Call

August 7, 2014 5:00 PM ET

Executives

Cynthia Clayton – VP, IR and Corporate Communications

John Maraganore – CEO

Akshay Vaishnaw – EVP and Chief Medical Officer

Mike Mason – VP, Finance and Treasurer

Barry Greene – President and COO

Laurence Reid – SVP and Chief Business Officer

Analysts

Alicia Young – Deutsche Bank

Mike King – JMP Securities

Edward Tenthoff – Piper Jaffray

Alan Carr – Needham & Company

Operator

Good day ladies and gentlemen and welcome to the Alnylam Pharmaceuticals’ Q2 2014 Earnings Conference Call. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session and instruction will follow at that. (Operator Instructions). As a reminder this conference call is being recorded.

I would now like to turn the conference over to the host of organization. Please proceed with your opening remarks.

Cynthia Clayton

Good afternoon. I am Cynthia Clayton, Vice President of Investor Relations and Corporate Communications at Alnylam. With me today are John Maraganore, Chief Executive Officer; Barry Greene, President and Chief Operating Officer; Akshay Vaishnaw, Executive Vice President and Chief Medical Officer; and Mike Mason, Vice President of Finance and Treasurer. Laurence Reid, our Chief Business Officer, is also here and available for Q&A.

For those of you participating via conference call, the slides we have made available via webcast can also be accessed by going to the Investors page of our website, at www.alnylam.com.

During today’s call, and as outlined on slide two, John will provide some introductory remarks and provide general context for some of our recent progress and activities. Akshay will summarize the clinical progress with our Alnylam 5x15 and broader genetic medicine pipeline. Mike will review our financials and guidance. And Barry will provide a brief summary of certain business highlights and goals for 2014, before we open up the call for your questions.

And before we begin, I would like to remind you that this call will contain remarks concerning Alnylam’s future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in our most recent quarterly report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements.

I will now turn the call over to John.

John Maraganore

Thanks, Cynthia. Welcome and thanks everyone for joining us this afternoon. The first-half of 2014 and recent period have been truly transformative for Alnylam and our continued efforts to advance RNAi therapeutics as a whole new class of medicines.

During this time we continue to execute on our expanded Alnylam 5x15 product development strategy and reported on multiple significant clinical and preclinical data sets.

Some key highlights during the period are initial data from our Phase 2 OLE study of Patisiran. Positive topline data from our ALN-AT3 program which we believe could become a functional cure in the treatment and management of hemophilia and promising data our preclinical pipeline including ALN-CC5 for complement mediated diseases ALN-PCSsc for Hypertriglyceridemia, ALN-AAT for Alpha-1 Antitrypsin Deficiency and ALN-AS1 in porphyria. We also shared key technical data on our ESC-GalNAc-conjugate platform that allows us to achieve subcutaneous delivery of RNAi therapeutics with highly potent and durable effects in addition to a wide therapeutic index. A profile that we believe is currently unmatched in the entire RNAi therapeutics field.

Finally, we added a new program to our pipeline ALN-HBV for the treatment HBV infection that we believe has the potential to one day become a significant product in an area of very high unmet need. Many of you have been hearing about the progress we’ve been making through our RNAi Roundtable Summer Series which is still ongoing through the end of August, I encourage all of you to spend some time to hear our clinical and scientific progress, of course Akshay will describe some of these results in more detail in just a minute.

We now enter a very data rich back half of the year. As Barry will highlight pending certain abstract acceptances we expect to have presentations in September, October, November and December across essentially all programs in our pipeline. This includes Patisiran clinical endpoint data from our Phase 2 OLE study at the ANA Meeting ALN-TTRsc pilot Phase 2 data at the American Heart Meeting and initial Phase 1 ALN-AT3 hemophilia data at ASH.

You’ll also hear updates from our preclinical programs including our C5, HBV and PCSK9 efforts and you’ll hear about new genetic medicine programs that we’ve been working on extending the breadth of our pipeline beyond the current 11 disclosed programs.

Regarding pipeline advancement we’re aiming to start our Phase 3 trial for ALN-TTRsc and TTR cardiomyopathy for year’s end and we’re having active discussion with regulators on a proposed Phase 3 design. In the meanwhile we’ll shortly open up our Phase 2 OLE study for TTRsc providing patients enrolled in the Phase 2 trial an opportunity for extended dosing.

In addition, we’re on track to file INDs or IND equivalents this year for ALN-CC5 and ALN-PCSsc and in the case of ALN-AS1 Porphyria program we’re on track for an IND filing either late this year or early next. So, we fully expect to end this year with five programs in the clinic but maybe six genetic medicine programs in the clinic. So, clearly a lot going on at Alnylam.

Finally I’d like to end my opening remarks by thanking the patients and their physicians who are participating our numerous clinical trials. We remain committed to making a difference in your lives.

I’ll now turn the call over to Akshay. Akshay?

Akshay Vaishnaw

Thanks John. We have indeed had a steady stream of data from our RNAi therapeutics our pipeline, certainly a lot going on. I’ll start with our Patisiran program.

Patisiran is our lead 5x15 program, and is aimed at the treatment of TTR-mediated amyloidosis or ATTR patients with familial amyloidotic polyneuropathy of FAP. This program is in a Phase 3. We now have over 25 open in nine countries.

As you can see on slide eight. The APOLLO Phase 3 trial is a randomized double-blind placebo-controlled study designed to evaluate the efficacy and safety of Patisiran in ATTR patients with FAP. The primary endpoint of the study is the difference in the change in the neuropathy impairment score QOL mNIS+7 between Patisiran and placebo at 18 months. Our [POET] trial is intended to demonstrate the efficacy and safety in Patisiran in supporting market authorization in countries the world.

Regarding ongoing enrollment and duration of study we continue to believe from this point in time that the study will take two to three years to read our results. Supporting an NDA filing in 2017 assuming the study is positive. At the International Symposium on amyloidosis in May we presented initial results from our Phase 2 open label extension or OLE study with Patisiran. In the OLE study we are measuring a number of clinical endpoints every six months including mNIS+7 which is the primary endpoint of the APOLLO Phase 3 study.

Enrollment in this trial is now complete with 27 patients and as of today with up to nine months of therapy we are very pleased to report that there will be no study drug discontinuations. At IFA amongst other data and we presented initial positive results from 23 patients showing sustained TTR knockdown of approximately 80% through today 168. This time period covers up to eight doses of drugs and these data provide the first clinical evidence of sustained RNAi to TTR knockdown in FAP patients beyond two doses of Patisiran.

Repeat dosing of Patisiran was found to be well tolerated with minimal adverse events and the use of our proprietary micro dosing in fusion regimen was found to significantly reduced instances of fusion related reactions. In fact we have been very encouraged with the overall safety profile of Patisiran in our clinical trial experience to-date.

Across our Phase 1, Phase 2 and OLE study Patisiran has been found to be generally well tolerated. We plan to report initial clinical endpoint data from OLE study at the upcoming American Neurological Association Annual Meeting being held in October.

The initial data is expected to include six month mNIS+7 results from approximately 20 patients. We also present additional endpoint and of course safety data at that time. We pretty much look forward to sharing these results, although we would like to remind you that the studies open label and that the initial results will be sharing a limited to only six months of dosing. Of course we will be sharing additional data from the OLE study at least once annually from this point onwards.

Also from our ATTR program we’re advancing ALN-TTRsc for the treatment of ATTR patients with cardiac amyloidosis. This program is in a pilot Phase 2 study aimed at evaluating the tolerability and preliminary clinical activity of ALN-TTRsc in patients with familial amyloidotic cardiomyopathy or FAC which is caused by autosomal dominant mutations in the TTR gene, or senile systemic amyloidosis or SSA, which is caused by idiopathic accumulation of wild-type TTR in the heart.

Based on the encouraging enrollment in this study to-date, we recently amended the protocol to enroll up to 25 FAC or SSA patients. The previous enrollment target has been 15 patients. The expanded enrollment will also allow us to add more FAC patients into the study where to-date we’ve had about a 2:1 split of SSA to FAC patients enrolled.

Pending abstract acceptance we expect to present data from this Phase 2 trial at the AHA meeting we held in November. At that time we’ll present all available safety, TTR knockdown and clinical endpoint data from the study. Any clinical endpoint result needs to be considered exploratory given the small sample size and the very limited duration of treatment of only six weeks in the Phase 2 study.

Patients completing the Phase 2 trial will be eligible to participate in a TTRsc OLE study for further assessment of general tolerability and clinical activity with long-term dosing and this study is on track to be initiated in the coming weeks.

We expect this TTRsc OLE study to provide more informative clinical endpoint data given the extended duration of treatment and we plan on presenting data from this study at least once annually starting in 2015.

In addition, we are aiming to be in a Phase 3 trial in TTR cardiac amyloidosis patients by the end of 2014. We’re actively engaged in discussions with U.S. and European regulators on the optimal Phase 3 design and look forward to updating you on this later in the year.

Of course there are many considerations that have gone into our thinking here, and we recently highlighted these in our TTR roundtable webinar in July. Importantly we’ve used the national history dataset from approximately 400 FAC and SSA patients to guide many of the designed consideration in the quarter we also made significant progress with our ALN-AT3 program for the treatment of hemophilia and rare bleeding disorders.

Just this morning, we held an RNAi roundtable webinar for this program and we are very pleased to see the strong level of interest in our SSA. We too view this as a very exciting and innovative program since we believe anti-thrombin knockdown have the potential to rebalanced the coagulation cascade in patients with hemophilia and other rare bleeding disorders resulting in the potentials for enhanced thrombin generation and improved hemostasis.

At the World Federation of Hemophilia meeting in May we reported initial positive topline data for our ongoing Phase 1 trial. In part A of this study human healthy volunteer subjects received a single subcutaneous dose of ALN-AT3 and [particle] the maximal allowable level of 80 knockdown was set at 40%. Initial results from the full dose cohort of four subjects showed that a single low subcutaneous AT3 dose of 0.03 milligram per kilogram resulted in up to 28% to 32% knockdown of AT at [NADA] that was statistically significant relative to placebo with a p value of less than 0.01.

This resulted in a statistically significant increase in peak thrombin generation which was temporarily associated and consistent with the degree of AT knockdown. ALN-AT3 was found to be well tolerated with most significant adverse events reported. We’re at the beginning stages of part B of the study which is designed as an open label multi-dose dose escalation study rolling up to 18 people with moderate to severe hemophilia A or B. the primary objective of this positive study is to evaluate the safety and tolerability of multiple doses, specifically three doses all subcutaneously administered ALN-AT3 in hemophilia subjects.

Secondary objectives include assessment of clinical activity as determined by knockdown of circulating AT levels and increase in thrombin generation at pharmacologic doses of ALN-AT3. Amongst other results will be quite interested to see the effects of the ALN-AT3 treatment on thrombin generation in hemophilia subjects. Since thrombin generations been shown to correlate with bleeding frequency of hemophilia.

Assuming abstract acceptance we intent to present initial clinical results from the Phase 1 study including all available results in hemophilia subjects at the ASH annual meeting in December. It’s worth noting that ALN-AT3 is our first program to enter the clinical development arena utilizing our enhanced stabilization chemistry GalNAc conjugate technology, which enable subcutaneous dosing with increased potency durability and a wide therapeutic index.

Our clinical data with ALN-AT3 demonstrate a ten-fold improvement in potency and translation from the non-human primate to human and as compared with our earlier GalNAc conjugate such as ALN-TTRsc these results adjusted over 50-fold improvement in potency. Clearly this has the potential to have profound implications for our entire pipeline which largely employees at out ESC GalNAc technology. Based on these data we presented back in May ties we have demonstrated that this improved potency and durability stems from a more stabilized as RNA molecule as well as attenuated nucleus environment in the human liver.

Finally, as we announced earlier today we received the orphan drug designation in the EU for ALN-AT3 for the treatment of dose hemophilia A and B.

I’d like to now turn briefly to our preclinical pipeline. As outlined in more detail in our press release we’ve made very significant progress in these efforts, specifically with ALN-CC5 of subcutaneously administered RNAi therapeutic targeting complement component C5 for the treatment of complement-mediated diseases we selected our development candidate and showed up to 98.7% knockdown of CMC5 and up to 96.8% inhibition of same complement activity in non-human primates with weekly subcutaneous dose administration.

Assuming abstract acceptance we intent to present additional preclinical results from this program at the ASH meeting in December. Also we’re on track to file a CTA for this program late this year and to present initial clinical results in mid-2015. We’re very excited about this program since we believe it could be highly competitive with monoclonal antibodies traveling C5 such as [inaudible].

In the case of our PCSK9 program we presented single dose data with ALN-PCSsc in primate sharing robust knockdown of PCSK9 of up to 96% and a reduction in LDL-C of up to 77%. These results were observed in the absence of statin code administration.

Notably a single dose of ALN-PCSsc maintain greater than 50% reduction in LDL-C for over three months a level of durability that we believe slows a once monthly and possibly once quarterly subcutaneous dosing regimen. This represents what we believe can be a highly competitive profile with an anti-PCSK9 monoclonal antibodies in what we believe is a significant emerging market.

We previously guided that we plan to file an IND or IND equivalent for this program by late 2014 or early 2015. We can now be more precise and are guiding that we expect to file a CTA in late 2014 with initial data expected in mid-2015. As a reminder this program is partnered with The Medicines Company with advanced program after we complete Phase 1.

We were pleased to publish data from our ALN-AS1 program in Porphyria in PNAS. This is an innovative approach in an ultra-rare disease when new medicines are solely needed. We expect to file an IND or IND equivalent for ALN-AS1 in late 2014 or early 2015. We presented some new data at DDW for our program in our alpha-1antitrypsin deficiency where we aim to treat the liver pathology associated with this orphan disease.

Specifically we selected our ALN-AT3 development candidate and presented non-human primate data supporting further program advancement. We aim to file an IND or IND equivalent for this program in mid-2015 and we expect this program to be the 7th clinical program in our expanded Alnylam 5x15 pipeline strategy effort.

Finally, we are pleased to announce the addition of new program to our pipeline ALN-HBV a subcutaneously delivered RNAi therapeutic for the treatment HBV infection. This new program comes from our acquisition of Merck’s RNAi assets, including the Sirna Therapeutics subsidiary. In the most comprehensive preclinical study results presented to-date with an RNAi therapeutic for the treatment of HBV, we reported significant multi-log reductions in HBV surface antigen and HBV viral titers, and showed evidence for an immune-mediated therapeutic effect in chronically infected chimpanzees.

Specifically, the new data, which was presented at TIDES Meeting in May demonstrated up to 2.3 log10 reduction in HBsAg. We expect to select a development candidate in late 2014 and plan to file an IND around here in 2015. As always each of these datasets and publication materials can be found on the Capella section of our company website.

And so, in summary I hope you all agree that there has been especially exciting and productive time for us as we continue to lead the translation of defined RNAi towards the development of innovative medicine.

I’ll now turn the call over to Mike for a review of our financials. Mike?

Mike Mason

Thanks, Akshay. I’ll be referring to slide 19 for a discussion of second quarter 2014 financial results. This quarter, we maintained a very strong balance sheet with $956 million in cash, cash equivalents and marketable securities. Our GAAP revenues for the second quarter of 2014 were $7.3 million as compared to $8.7 million in the second quarter of 2013.

GAAP revenues this quarter included $5.5 million related to our collaborations with Takeda, and $1.8 million related to our collaboration with Monsanto, The Medicines Company, Research Creative licenses and other sources.

Moving to expenses, R&D expenses were $44.7 million this quarter as compared to $24.2 million in the prior year period. This increase was due primarily to additional expenses related to the planned significant advancement of certain of our clinical and preclinical programs. We expect that R&D expenses will increase slightly for the second-half of 2014 as certain of our programs moving to late clinical stages.

In the second quarter of 2014 we recorded a reduction of $3.9 million to in process research and development expenses in connection with purchase of the Sirna RNAi assets from Merck. Upon the completion of certain technology transfer activity in the second quarter of 2014 we issued approximately 370,000 shares of common stock to Merck.

In the second quarter of 2014 we remeasure the expense recorded in the first quarter of 2014 in connection with these shares using the price of the company’s common stock on the issuance stake. In future periods there will be no additional charges recorded to in process research and development related to the purchase of the Sirna RNAi assets from Merck.

G&A expenses were $11.5 million in the second quarter of 2014, as compared to $5.8 million in the second quarter of 2013. The increase in G&A expenses in the second quarter of 2014 as compared to the second quarter of 2013, was due primarily through higher non-cash stock-based compensation expense. Excluding non-cash stock-based compensation expense, we expect the G&A expenses will remain consistent for the second-half of 2014.

The non-GAAP net loss for the second quarter of 2014 was $48 million as compared to a non-GAAP net loss of $18.2 million for the same period in the previous year. The non-GAAP net loss for the second quarter of 2014 excludes the $3.9 million reduction to in-process research and development expense for the purchase of the Sirna RNAi assets for Merck.

With respect to guidance for 2014, we expect we will finish the year with greater than $825 million in cash, which we believe provides us with a strong balance sheet to invest in a broad pipeline of genetic medicine and to maintain financial independence through to multiple product launches.

In starting in 2015, we expect a significant share of our expenses on our Patisiran and TTRsc programs to be shared with Genzyme pursuant to the terms of our alliance agreement. Accordingly, we see our non-GAAP net loss to be beneficially impacted by this alliance started in Q1 2015.

I will now turn the call over to Barry.

Barry Greene

Thanks Mike. As you’ve heard from John and Akshay, we had a tremendously productive first half of the year.

In addition to steady presentation of clinical and preclinical data we continue to advance our business objectives. In particular we had rather active quarter regarding our intellectual properties state. For example as part of our acquisition of Sirna from Merck earlier this year we obtained over 125 issued patents and a much larger number of pending applications in prostitution one of these is the McSwiggen 406 Patent which was recently upheld in Oral Opposition Proceedings in Europe. This patent includes claims that broadly cover chemically modified sRNA which we believe are critical achieve drug like properties with potent and durable effects such as those seen in our ESC-GalNAc-conjugate platform.

Another patent is the McSwiggen 277 patient which was recently issued by the U.S. patent office. This patent includes sequence independent claims that we believe are critical for the development of RNAi therapeutics for the treatment of HBV injection. This patent is not licensed to any third parties and we aim to build value from this patent through advancement of our proprietary ALN-HBV program.

In addition, we received a noticeable allowance for a patent broadly covering conjugate based deliver of RNAi therapeutics. The Manoharan 478 patent includes newly allowed claims directed to compositions including those comprising a modified RNA agent linked to a biantennary or triantennary ligand. Specifically the allowed application includes claims that broadly cover single-stranded or double-stranded, chemically modified RNA therapeutic conjugated with GalNAc ligand independent of length, sequence, or disease target. We believe that anyone developing GalNAc conjugates for RNAi therapeutics we require a license from Alnylam’s IP portfolio. Of course we’re open to providing such licenses on a target-by-target basis for diseases areas outside our core strategic interest.

I will now turn to our 2014 goals and guidance. As we now to start the year we now expect to exceed our 5x15 guidance and we stated that we expected to have five programs in clinical development by the end of 2015. We now expect to exceed that guidance with 6 to 7 programs in clinical development by the end of 2015 including at least two programs in Phase 3 and five to six programs that will achieve human proof of concept results.

With regard to our Patisiran program we’re on plan and continue to roll patients in our Phase 3 APOLLO study. As we’ve guided before we believe this study will be read out in about two to three years from now and a positive we expected this study will enable possible NDA submission in the 2017 timeframe. We also continue to – patients in our Phase 2 open label extension study and we remain on track to share more findings for this study at the ANA meeting on October. We also continue to enroll patients in our Phase 2 study with ALN-TTRsc and are on track to present data from that study late this year.

Finally, we plan to start a Phase 3 study ALN-TTRsc and a TTR cardiac amyloidosis indication by end of this year. Now regarding our ALN-AT3 hemophilia program, we expect to present initial data from hemophilia subjects later this year. We now plan to file an IND or IND equivalent for ALN-CC5 and ALN-PCS programs also late 2014 and from ALN-AS1 program either later this year or early next year. Over the course of the year, you can also expect us to continue advancing our pipeline as we’ve done recently with ALN-AAT which we now plan to file an IND in mid-2015 and ALN-HBV where we plan to select a development candidate by the end of this year and file an IND around the end of 2015. As Mike said, we plan to end the year with greater than $825 million.

In summary, the second half of 2014 promises to also be very data rich period with multiple presentations and data readouts in September, October, November and December.

With that I’ll now turn the call back to Cynthia

Cynthia Clayton

Thanks, Barry. We will now open the call to your questions. As a reminder, to those dialed in, we would like to ask you to limit your questions two each. Marcus you may now begin the Q&A.

Question-and-Answer Session

Operator

(Operator Instructions). And our first question comes from the line of Alicia Young from Deutsche Bank. Please proceed with your question.

Alicia Young – Deutsche Bank

Hey great, thanks for taking my question and congrats on all the progress guys.

John Maraganore

Thanks Alicia.

Alicia Young – Deutsche Bank

So I know I just want you guys talk a little bit about what you found most excited from the Sirna acquisition and also just talk a little about what things could come in the future because I feel like we’ve been surprised over the first half of the year but some of the many interesting things have come out of it?

John Maraganore

Yeah let me take a stab at that and then Lawrence Reed who obviously played a major role at that acquisition can also comment. As we said when we did the acquisition there are really three elements of value that we saw within Sirna the first was the presence of some pretty compelling preclinical programs, later stage preclinical programs and one of those was ALH-HBV and I think everybody has seen the dataset from that it’s really amazing data in the chronically affected chimps and there is another program of a similar stage that we haven’t disclosed yet.

In addition we commented that we acquired quite a bit of IT and Barry mentioned a 125 issued patent is a much larger number of pending applications and you’ve already begun to see the fruits of that in the context of the McSwiggen patent that was upheld in Europe and the McSwiggen 277 patent that was issued in the U.S. and you’re going to see a lot more coming out of that at States okay no question about it there is a lot of pending application that’s a very early and broad patent with significant inventive elements within it that you’re going to hear a lot more about that frankly is going to continue to make the RNAi Therapeutics feel that Alnylam is clearly in a position from a dominant position standpoint to build maximal value from.

The third element Alicia really relates to technology and some of the technology I think you’re going to start hearing a little bit more about later this year. There is an important meeting at OTS, the OTS meeting where it’s quite a bit around new technology that’s often discussed there around delivery and I think you’ll start seeing some of the fruits of the Sirna acquisition as it relates to technology advancements at the OTS meeting in October. And so a lot more to come for sure, we do like the surprise on the upside in these type of circumstances and obviously there is quite a bit that we’ve acquired from Sirna and we’re excited about that acquisition it was a very smart move. Laurence anything else to add to that.

Laurence Reid

No I think you’ve covered all the main pieces John as Alicia as we’re saying I mean I think we knew it was going to be a good move at the time, we’re excited about the breadth of opportunities there and HBV one has been the most noticeable so far generate a lot of interest in really something catapult to that program forward and carry a lot of interest in the outside world as well we’re excited about.

John Maraganore

Great does that answer your question Alicia.

Alicia Young – Deutsche Bank

Can I just ask another one.

John Maraganore

Sure. You get two.

Alicia Young – Deutsche Bank

Awesome. I just want to know a little bit more about I know I ask all the time but just how you’re thinking about the secondary endpoint from the FAC study and like what we might be able to see there?

John Maraganore

Yeah let me, do you mean the Phase 3 study or the Phase 2 study?

Alicia Young – Deutsche Bank

The Phase 2.

John Maraganore

Okay so do you want to comment Akshay?

Akshay Vaishnaw

Hi Alicia. So there are a number of exploratory endpoints that we’ll be looking at obviously TTR knockdown primary objective is safety, secondarily TTR knockdown and then other exploratory endpoints will be biomarkers such as BMP troponin and then also be interesting data we want to gather on ECO or MRI both of these changes in TTR cardiomyopathy so I’ll be interested to see what happened and there are also clinical data relating to – so all of these will be presented exploratory and as I am precise in the overview this was a short duration treatment six weeks so we need to bear that in mind as well.

John Maraganore

Yeah I’ll just add Alicia one of the two key reasons we did the study from my perspective one is, first and foremost patients with FAC or SSA or heart failure are on many, many concomitant meds they have impaired renal functions they’re obviously in a very tender stage and from my perspective it was very important and Akshay’s as well very-very important to absolutely evaluate the safety of our therapies in the context of disease patients before running into a Phase 3, it’s just no brainer to do that. So we’re very pleased we’ve done that and obviously the fact that you haven’t heard something bad means so far so good from the safety standpoint so I think that’s great. The other thing I think that was very, very important is that we needed to finish and are now finishing our chronic tox study, tox program with ALN-TTRsc again so far so good there because we will be having these discussions around Phase 3 without being confident around the safety profile coming out of our chronic tox programs and we needed to that before we could do extended dosing.

So the Phase 2 study is limited to six weeks a dose and so all of the clinical endpoint data I think needs to be kept in mind with regard to both the exploratory and small sample size intrinsic in the study but also the fact that it really relates to only six weeks of dosing in the patients. But that’s the only other context I provide actually if you agree.

Akshay Vaishnaw

Yes indeed.

John Maraganore

Thanks Alicia.

Operator

(Operator Instructions). Our next question is coming from the line of Mike King from JMP Securities. Please proceed with your question.

Mike King – JMP Securities

Hey guys thanks for taking the question and congrats on the progress can you hear me okay

John Maraganore

Yeah loud and clear.

Mike King – JMP Securities

Great. So apologies if you addressed this question I’ve been kind of hopping back and forth between a couple of different calls. I was wondering at some point where you, I thought that you were undertaking a natural history study for FAC is that still part of the plan for the development?

John Maraganore

It is in fact we have collected a very sizable dataset Akshay you want to describe a little bit?

Akshay Vaishnaw

Yeah sure we’ve collected data on up to 400 individuals with TTR cardiac amyloidosis both flavors, the FAC varieties of mutation based and well type SSA. And it’s actually very rich dataset comprising of centers from both U.S. and UK and we have a variety of endpoints gathered all the way from clinical parameters such as six minute walk hospitalization mortality kinds of things we’re featuring our failure of course as well as biomarkers BMP troponin and some radiologic datas while including ECO so it’s a very rich dataset in terms of we did with the FAP this year ISA reach the FAP natural history dataset and shared with people how it’s been very informative in guiding the Phase 3 design we will be sharing these FAC, SSA natural history data in due course.

John Maraganore

Probably sometime next year Mike.

Mike King – JMP Securities

Next year.

John Maraganore

Yeah we don’t have any immediate plan to share it I mean obviously we want to use it to our at least for the time to our competitive advantage but we will certainly share it in due course likely next year.

Mike King – JMP Securities

Okay and then a question on PCS as far as the durability and the potential for once per quarter dosing is that unique to the target, unique to the construct, unique to the particular chemistry for ALN-PCS because I’m just wondering assay can be done for PCSsc why could it not be done for some of the other clinical candidates.

John Maraganore

It’s a great question Mike and the answer is it can’t be done and it isn’t going to done for other clinical candidates. So we’re now clearly going with our ESC GalNAc conjugates we’re clearly in a very robust manner moving to once monthly dosing for essentially all the programs I think that’s going to be true with AT3 in hemophilia which would be very disruptive in that space that was subcutaneous dose administration given once a month in the case of PCSK9 it clearly once monthly supported I think there once quarterly is also going to be quite possible and so this is turning out to be a key feature for the entirety of our ESC GalNAc conjugate programs.

In some cases, we’ve targets where we really want to ratchet it down all the way down to the floor like C5 we may choose a step with weekly subcu dosing there given that, that would be extremely competitive but this contextually even there to go to monthly subcu dosing. So we’re feeling very excited about this profile, it’s clearly best in class across RNA therapeutics in terms of durability and dose frequency and it’s being achieved with low doses based extrapolating from our AT3 data that is going to be done with less than 1 ML subcu injections. So it’s really a very promising development and in the case of PCSK9 I mean quarterly dose administration in that emerging market could be pretty disruptive even though we’re further behind obviously then the antibodies it can be pretty disruptive in that whole emerging market and that’s going to be fun to watch.

Mike King – JMP Securities

Okay, great. And then finally just on AT3 I know that you get a fair bit of questions regarding overshoot on coagulation I am sorry on AT3. Can you remind us of the intra and inter patient variability and I know you’re maximizing that 40% inhibition but I just wonder if you could just remind us what kind of intra and inter patient, if you don’t have the patient maybe from the NHPs what the variability around the mean is there? Thank you.

John Maraganore

Sure. Thanks Mike. A couple of things one is obviously and you probably did we had our RNA webinar today roundtable today on AT3 and this question came up and actually I think you were on the call discussion came up and David who is the expert in the field emphasized what we believe for quite some time is that the risk of thrombosis in the background of hemophilia is incredibly low.

So, we feel that we have quite a bit of latitude for knockdown without undue risk at all for thrombotic events and we’re also clearly aiming for a level knockdown which is between 50 and 80% with that program based on a lot of data including data in animal models but also from human hemophilia plasma. So, the datasets are very robust.

Now interpatient variability from our AT3 Phase 1, we haven’t presented those data yet our data today had been topline so, I’ll encourage you to wait till the ASH Meeting in December to see those data along with hemophilia patient data but you can look at our animal model data from our – in our corporate deck and standard deviations even when we’re at the 50% range are essentially if I am recalling the numbers right plus or minus 5%-6% around each data point so, incredibly consistent effects with tight results across animals and I think we’re going to see the same type of things in humans if you look at our TTRsc human data you would see again also datasets that are in our corporate deck pretty remarkable, remarkably small standard deviations around each datapoint. So, we think that we’re going to see some very tight data but let’s wait till December to see for AT3 I mean Akshay anything else on that?

Akshay Vaishnaw

No I was just going to pick up a new point, what we think from previous that is for Patisiran and TTRsc as you dose ascend we clearly demonstrated that in fact the air get tighter and the individual consistency increases so, that’s history we will see the data obviously later in the year for ALN-AT3 but the science predicts that should be tight.

Mike King – JMP Securities

Okay, thanks a lot.

John Maraganore

Thanks.

Operator

Our next question comes from the line of Ted Tenthoff from Piper Jaffray. Your line is open.

Edward Tenthoff – Piper Jaffray

Great, thank you and I apologies if this question was already ask I actually just get off a plane so I didn’t get the chance to get the tail end of the call. When it comes to the hemostasis program can you give us a sense of when that can go into the clinic and what’s that competitive profile may look like ALN-HBV?

John Maraganore

Sure love to Ted. So, our guidance on that program is that we will select a development candidate by the end of this year and that we will be filing our IND or IND equivalent for that program around the end of 2015. So, we’re about a year and a few months away from filing an IND in that program. The program we inherited for Merck that was used in the chimpanzees was evaluated using Merck’s flipping out of particle technology we obviously want an approach that supports subcutaneous dosing with our ESC-GalNAc-conjugate. So compared to the other RNAi approaches out there this would be the only approach that is subcu and obviously an approach that we know has a very wide therapeutic index which we expect to be broader than the other competitive programs out there in the RNAi space and also in our opinion likely to be the case across other RNAi therapeutics strategies.

So, it’s going to be and on top of it Ted as you know it’s a very large market, very substantial market and multiple players if they’re successful will be able to reach the market in this case and if we have a profile that makes this best-in-class we’re going to stand ahead of the rest. So, we’re excited about it we’ve got the clinical proof obviously compared to sort of the other programs that are out there with untested platforms we have clinically validated approaches for knocking down genes in the liver. I think that’s important as well but clearly we’re in a position of strength and the program across technical features also intellectual property and so we’re going to build a lot of value from that program for sure.

Edward Tenthoff – Piper Jaffray

Great, well I look forward to all the data coming out in the second half on the other programs as well. So, thanks for the update.

John Maraganore

Terrific. Thank you, Ted.

Operator

(Operator Instructions) And our next question comes from the line of Alan Carr from Needham. Please proceed.

Alan Carr – Needham & Company

Hi, thanks for taking my questions.

John Maraganore

Hey, Alan, how are you?

Alan Carr – Needham & Company

Good, how are you?

John Maraganore

Good, good.

Alan Carr – Needham & Company

So a big picture question here. So, you made a lot of progress in targeting – sites obviously.

John Maraganore

Yeah.

Alan Carr – Needham & Company

How much work do you have underway in terms of other cell types or other tissues and obviously there is a lot of opportunities as it is with the cell that you’re targeting but I am curious if these other tissues fit into your long-term plans?

John Maraganore

Yeah, well you know at one level Alan you know in the cell craft but I could care a less if we ever knock down a gene and another tissue in the body because the liver is such a unbelievable treasure to disease targets and if you take today’s marketed product that are commercialized that target liver express genes is over a 50% billion market and so we’re going to be pretty busy for quite some time knocking down liver express target genes building a lot of value making a big difference at peoples life and patients life and building a lot of things to our shareholders

So, at some level if liver is all we ever get with robust and clear effects we’re going to be very happy, very busy and a very successful company. That said Alicia asked a question earlier about what might be in the back room from the Merck Sirna acquisition and certainly one of the things that Sirna spend a lot of time doing is looking at extra pad of deliveries.

So I am hopeful that you will hear more about that in the future and that there are some interesting opportunities there that we will explore in the future but for the foreseeable future defined it as next five years I don’t think you’re going to see us doing anything but continue to execute on our liver based strategy because of the fact there is such a modular and reproducible platform for developing innovative medicines and from a resource allocation standpoint there are so many great opportunities in liver that we’re going to be busy for quite some time but I am hopeful that in the future you will see other target cell types and organs access with our technology and that will happen.

Alan Carr – Needham & Company

Great. Thanks very much.

John Maraganore

Great. Thank you Alan.

Operator

I have no further questions in the queue at this time.

John Maraganore

Okay.

Operator

I would now like to turn the call back over to the company for closing remarks.

John Maraganore

Great, thank you and listen thanks everybody for joining us this afternoon. I think you can tell that we have a lot going on over here at the company we’re excited about the progress we’re making and we really look forward to updating you with our progress in the weeks and months to come. Thank you very much. Bye.

Operator

Ladies and gentlemen, thank you for attending today’s conference. This does conclude today’s program. Have a wonderful day. You may now disconnect.

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Source: Alnylam Pharmaceuticals' (ALNY) CEO John Maraganore on Q2 2014 Results - Earnings Call Transcript

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