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Executives

Lynne Parshall – COO and CFO

Isis Pharmaceuticals, Inc. (ISIS) Citi Global Health Care Conference February 28, 2012 2:00 PM ET

Lynne Parshall

Thank you and thank you for joining us this afternoon. Our strategy from the beginning in pioneering the development of antisense technology has been to create an environment for innovation, to be innovative, to structure that innovation and moving forward, what we think is a unique technology platform for drug discovery and one that can be very productive. To utilize that productivity to create a large and growing pipeline of novel drug. We're right now 26 drugs in development and to build around that you need business strategy to allow us to really leverage the technology platform and create as many opportunities for the technology as we can. Our goal has been to create as many drugs as we can for as many different diseases so that we can help as many patients as possible, lead healthier and more hopeful lives.

So ISIS has created, the antisense technology platform and antisense technology works, it works and is proven by data and numerous different animal models, numerous different clinical models and with numerous partners. We control this technology platform. We're one of the most innovative companies in United States with over 1,500 issued patents I think on a per capita basis that would make us far and away the most productive and innovative company.

We’ve used the technology platform as I said to create a pipeline that's large, diverse, growing and currently includes 26 different drugs and we do this with a small and focused R&D organization. We have 300 people in not only R&D but also our SG&A organization; we've had another 60 in our manufacturing organization. So what is a relatively small company with a very manageable cost structure has been able to utilize this very efficient and productive technology platform to create a large and growing pipeline.

Our business strategy that has supported this is also unique. Our goal is to do what we do best, to stay small, to stay innovative, stay focused, to make as many drugs as we can and move them forward to clinical proof of concepts and then work together with pharmaceutical company or biotechnology company partners to do the latter stages of development and commercialize the drug. This has allowed us to create this kind of a pipeline with variable means of financing and be a financially strong company as we enter into the prospects this year of our very first systemic antisense drugs being launched in the market.

Antisense technology is the only direct route from genes to drugs. We make uniquely specific drugs but knock out a single disease causing protein without affecting other related proteins. The early development and discovery and development is extremely efficient because improvements that we make in one part of the platform are directly applicable across the board through all of our research and development programs. So if we improve manufacturing, we applied to all of our programs. If we improve in analytical method, we apply to all of our programs. If we find a chemical medication that improves potency, we can apply across all of our research programs, so the efficiency and effectiveness of technology platform improvement gets amplified throughout the programs that we have. That's allowed us to generate a continuing pipeline again with a very small R&D organization.

This is the pipeline, it's hard to read. I am not going to spend too much time on it but you can see our principal area to focus are cardiovascular disease led by our lead drug Kynamro metabolic disease, so we have drugs not only for type 2 diabetes but also our first peripherally acting anti-obesity drugs. A large cancer franchise, a much newer but very exciting severe disease franchise and a variety of other programs that we are working on with companies who want to exploit antisense technology in their own particular therapeutic area.

Kynamro is our most advanced product. We have filed in Europe last summer for homozygous familial hypercholesterolemia as well as a severe heterozygous FH patients and we plan to submit the US NDA this quarter. Our partners at Genzyme and Sanofi are very actively preparing for the commercial launch of this drug this fall and as well Genzyme and Sanofi are investing in the future of this drug with our focus FH study that's underway. This is the study that intended to create data that will allow us to broaden the indications both in the US and Europe as well as to include alternative dosing regimen so that we can provide patients with multiple different choices of how they get to take Kynamro.

As we said, our first filing in the United States is for homozygous FH, that's about 3,000 patients in the US and the focus FH study is intended to support expansion of that indication to that sever heterozygous FH patients which will add another 15,000 patients to our US market.

Our initial filing in Europe encompasses both of these markets, both the homozygous FH and the severe heterozygous FH for a total of approximately 18,000 patients. And the next potential filing in Europe would be a filing that would look at the next layer of severity of LDL cholesterol, patients who are 160 and above and we hope that data from the focus FH study will be part of the data to support a potential expansion of the indication in Europe.

Kynamro was a first in class product. It is not only a drug that lowers LDL cholesterol it works all estrogenic weapon. So LDL, Lp(a), VLDL, FOB, broadly across the spectrum to help these patients who frequently have multiple different aspects contributing to their severe cardiovascular risk. This is a significant commercial opportunity even just the initial indications in patients who did an extraordinarily high risk of death from cardiovascular disease. We were very robust day sets supporting our filings in the US and Europe. We have completed four positive placebo controlled randomized double blinded clinical trials each of which was positive and primary, secondary and tertiary end points with exclusive statistical significant. So we think this is a robust repeatable and consistent efficacy of this drug combined with the emerging safety profile which grows as we get more and more long term experience with the drug, definitely support our focus on our planned patient population.

As I said Kynamro has a beneficial effect on all of the different estrogenic lipids that can be contributing to cardiovascular disease in these very high risk patient populations. In the two patient populations that form our initial indication, the homozygous FH and the severe heterozygous FH we will do still the cholesterol by over 100 milligrams per deciliter. So lots of people in this room probably don't have LDL cholesterol over 100 milligrams per deciliter. We dropped these patients by a 100. That could translate into a reduction in cardiovascular risk of as much as 50%. So this represents a very significant potential therapeutic benefit for the patients who are at risk of dying early death from cardiovascular disease.

In the other patients study, we also got highly statically significant and positive reductions of both LDL cholesterol as well as the other estrogenic lipid. In the broader heterozygous FH patient population, nearly half of the patients achieved LDL levels less than 100 milligrams per deciliter and in the polygenic patient population at high cardiovascular risk over half of the patients reduced their LDL cholesterol to the low 70 milligrams per deciliter.

Again, very consistent and very significant LDL cholesterol reductions across the board regardless of the patient population in which we test as a drug.

Most common side effects of the drug are injection site reactions and flu like symptoms. The injection site reactions are principally cosmetic. They resolve rapidly and really at the mild side of the scale when you think of injection side reactions from other subcutaneously delivered drug.

The drug that weights were well within what we had planned for the study and very similar to drop out rates in other studies of injectable drug, so we're very pleased with that that the studies came in right in on our planning objective.

We now have quite a bit of experience with long term dosing of Kynamro and one of the things that you know about developing drugs is that drugs really get better the more experience you have with them. But Kynamro is continuing to show us very, very consistent data. So we have robust lipid lowering effects in patients that are treated for one year, two years, three years, their LDL continues to stay down. All of the other estrogenic lipids that are going down also continue to stay down, so efficacy is continuing with long term treatment.

In addition pre-clinical observations that we had about the drug are continuing to be born out in long-term data. We have predicted based on our preclinical data that in the short-term we could see an increase in delivery of some patients, because what you're doing is altering the shuttle mechanism that shuttle lipids had to deliver and into circulation and in fact we saw that in a small number of patients we saw mild to moderate increases in liver fat. Now that we have long-term data on these studies we're seeing normal to patients deliver fat levels off and then it goes down. So exactly what our animal studies has predicted is what we're now observing in clinical studies.

So to wrap up on Kynamro, our MAA filing is submitted. We're on track for our NDA filing this quarter. This is the drug that we think has a substantial competitive advantage in this very high risk cardiovascular patient population and there's lots of work that's been done by both our partners at Genzyme and Sanofi as well as by industry organizations to increase awareness of this disease, hypercholesterolemia as potential therapies for these patients come towards the market. The NLA just last year put a recommendation for early diagnosis, aggressive screening of families of patients who are diagnosed with FH and aggressive treatment through referral to lipid specialist and all of this is very consistent with the Genzyme and Sanofi marketing plan.

Genzyme obviously is a great partner to have in a rare disease space and we're really pleased that that focused dedicated patient centric Genzyme approach which has been so successful with other drugs is being supported by a very large global infrastructure from the Sanofi organization. So we feel like we kind of have the best of both worlds in our marketing partners.

And we to talk a little bit more about some of the other aspects of the pipeline and I want to focus on some drugs which we think represents very attractive short-term value creating opportunities in the pipeline, but before I do that, I am going to just tell you what sorts of dynamics you might expect in 2012 by just showing you some of the things we did in 2011. In 2011 we started face clinical trials in eight different programs, diverse programs both severe and rare diseases in our metabolic pipeline, in our cardiovascular pipelines. We initiated three phase two clinical, again one in cancer, one in cardiovascular disease and another in ocular disease.

We had six new drugs to pipeline where diseases, cancer, metabolic disease, cardiovascular disease saw very diverse therapeutic opportunities in very unique drugs.

We had clinical data not only from mipomersen but from seven other drugs that we reported throughout the course of the year. in our cardiovascular franchise beyond mipomersen as we look at next year, we plan to have data from our CRP program. We plan to initiate phase two clinical trial in both our ApoC-III program and our Factor VIII program and we have two drugs that will go into phase one clinical trials our LP(a) drug and our Factor VII drug. ApoC-III we think is a very interesting short-term opportunity. We're employing for this drug a development strategy that's similar to the one's that we employed for mipomersen, in other words identify the patients who are at the highest medical unmet need and pursue a development plan that can rapidly get the drug to the market for those patients while continuing to explore the broader opportunities for the drug. Our ApoC-III inhibitor is a triglyceride lowering drug. Obviously elevated triglycerides are a risk factor for cardiovascular disease. ApoC-III itself is an independent risk factor for cardiovascular disease and very high grade with our patients started extremely high risk of pancreatitis.

In terms of identifying very high risk patient populations, obviously there are about 90,000 patients in the US with triglyceride over a 1000 milligrams per deciliter. Of those, about 2,500 suffer from pancreatitis. In addition, there is an identified patient population of the LDL deficiency patient population who is a very interesting target for this drug as well. So we're planning a rapid development pass initially for patients at high risk of pancreatitis. We have Phase II studies that will start this year as well as the second Phase II study it will start in the homozygous LP(a) patients and we have additional Phase II studies that are planned.

Just to give you an idea of what this drug does, we presented this data late last year as well as at our R&D day in January and you can see that what the drug does is produce a really, lovely dose dependent reduction of ApoC-III down actually below the limits of detection of the assay in some patients and then you can see when you look beyond the grey period, that this reduction of ApoC-III is very prolonged even after the dosing is stopped. So the dosing goes during the grey period after dosing stopped the ApoC-III stays down. So this is the drug that produces very robust ApoC-III reductions and for very long time. And I don't have the data with me today but it produced a commensurate reduction in triglyceride including post perennial triglyceride reductions.

Our Factor 11 drug is a drug that we think represents an enormous potential commercial opportunity. This is a drug that some people that we're talking about hemophilia drug when I talk about Factor 11 but this is a drug that reduced Factor 11 not that augments it, so this is a drug that's an anti-clotting drug. Obviously the Factor 10-A inhibitors have made really fundamental changes in this market and we think our Factor 11 drug has a profile that will improve upon the profile of the Factor 10-A inhibitors because as we've looked at our drug head to head with the Factor 10-A inhibitors in all kinds of preclinical model of clotting and bleeding, what we've seen is equivalent clotting profile with no increase at all in bleeding and this is something that we've done over and over again in lots of different models. So it’s a profile that we're very excited about.

High levels of Factor 11 are a risk factor for clot formation and contribute obviously for embolic disease. Blood clot formation is a big formation, it’s the leading cause of mortality and death both in patients with vascular disease as well as associated with surgery and it’s a very large market in over $7 billion market that this drug will be participating in.

Our development plan as we've completed Phase I clinical data and shown profound reductions of Factor 11 and we will start our first Phase II clinical study this year in total knee replacement surgery, the validated model that lots of drugs in the space have been tested in where VTE is obviously a very significant problem and the incidence of VTE corresponds very directly with Factor 11 activity. So this will be a study that will start this year and that will finish up next year.

We think with this proof of concept study and with the wealth of indication for which a novel plotting inhibitor with a very strong safety profile could participate that this represents a really strong potential partnering opportunity. These are the data which I was speaking about from our Phase I clinical trial and you'll notice that they look a lot like the ApoC-III data during the grey dosing period we're able to reduce Factor 11 in these individuals by up to 80%. It’s a very nice dose dependent and as you can see the right of the grey area the effects are prolonged even following cessation of dosing. In our metabolic disease franchise we have four different Type-II diabetes drugs each of which works through a unique mechanism, we've got an insulin sensitizer. We’ve got drugs that directly reduce blood glucose. Our glucagon receptor drug has put one activity and we expect to have data from all of those drugs this year. In addition to newest entrance to our metabolic disease franchise of the drug (inaudible) which we planned as an initiate Phase-I clinical trials on this year and I forgot about actually data from our first really acting anti-obesity drug or our receptor 4 drug, the first drug on the list that have lots of data on this year.

In our cancer franchise we're obviously very excited about our partners OncoGeneX who have OGX-O11 in two Phase-III clinical trials with their partners in TIVA both in prostate cancer and are planning to initiate Phase-III clinical trial this year and non-small cell lung cancer. OncoGeneX is expecting data from the two prostate cancer trials next year.

Behind that, our partners at Lilly are expecting data this year from their drug LY21881308 and we have our e-inhibitor in Phase-II clinical trials for a variety of cancers as well. Our partners OncoGeneX already this year have put out very nice data on OGX-427 and our SAT-III inhibitor is important both as a very exciting entrant in the oncology area but also as a first generation 2.5 drug that will start clinical trials very shortly.

Our severe rare disease franchise is our newest but also very exciting and I think one of the things that's exciting about is in addition to obviously, the opportunity to provide therapeutic benefit in diseases where there are virtually no options for patients, a lot of these drugs represent very rapid potential development points. So for example, in our TPR program and our SMA program, we have development plans that we believe will get these drugs to the markets as effectively and efficiently as possible and we think out of this severe and rare disease, program may come, our next commercial opportunities Transthyretin.

Transthyretin doses is a disease that has both cardiomyopathy form as well as polyneuropathy form. The polyneuropathy form is our form indication and we are preparing with our partners at GSK to go into a Phase-II III clinical trial for that program. This is a disease that's in desperate need of therapy for these patients. Again, we showed data at our R&D day from this program in which we profoundly reduced TTR protein, again it looks all of these data slides look alike, we chose that our docs are very consistent and were very consistently reducing their target from model to model including in human subjects.

We also have had a lot of partnership successes in 2011. We've hit significant milestones in our Glaxosmithkline relationship. That's a relationship that's only two years old and we already have two drugs in clinical trials and we expect a third and possibly a fourth this year. Pfizer brought our satellite company that we started up, Excaliard, that's who has the drug to locally treat scarring associated with surgery. And that's a drug on which will get milestones and royalties we're really pleased that Pfizer will have the resources behind that program moving forward.

And we announced in January a new collaboration with Biogen Idec on our spinal muscular atrophy program. This is a collaboration that's an auction type collaboration which is very much like our GlaxoSmithKline collaboration where the partner takes an option upfront, we control the development so we make sure it doesn’t get stuck in any large company bureaucracy. At the time we have clinical proof of concept, then the partner has the opportunity to license the drug to us and move it forward.

We couldn’t be more thrilled with Biogen Idec as a partner. Obviously the global development and commercialization capabilities they are extremely well recognized. They are practical, efficient and effective and already are adding value to this program.

SMA you may know it better as floppy baby syndrome, it’s a not particularly well known disease although it's about the same size as cystic fibrosis or muscular dystrophy or cyclocosmia. There are no treatments available. The patients who have the most severe types of the disease die in infancy. Children with less severe types of the disease are generally in wheel chairs and suffer serious and progressive nerve degeneration. We plan to go directly from our Phase-I studies which are in progress to two parallel Phase-II, III studies again representing we think the most rapid, efficient and effective route to get this drug to the market into the patients who desperately need therapy.

In 2012, we're looking forward to commercial revenues from Kynamro launch. Continued success in our business strategy, continuing to broaden and mature the pipeline, clinical data events from eight different programs as we go through the year in addition obviously to continuing moves about mipomersen putting our first generation 2.5 drug in man and adding three to five new drugs to the pipeline.

With that I'll thank you for coming and we do have a breakout on the fourth floor. Thank you.

Question-and-Answer Session

[No Q&A session for this event]

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