B. Lynne Parshall – Chief Operating Officer & Chief Financial Officer
Ying Huang – Barclays Capital
ISIS Pharmaceuticals Inc. (ISIS) Barclays Capital 2012 Global Healthcare Conference Call March 14, 2011 11:00 AM ET
Ying Huang – Barclays Capital
Good afternoon everyone. My name is Ying Huang and I’m the Senior Analyst here covering U.S. Valtech at Barclays. It’s my pleasure to introduce our next presenting company ISIS Pharmaceuticals. On behalf of Company to present here is Lynne Parshall, the CFO of the company. So, Lynne?
B Lynne Parshall
Good afternoon and I’m glad I could keep at least somebody off the beach this afternoon. I’m happy to be here to be able to present about ISIS pharmaceuticals. ISIS is the leading company in antisense technology and we’ve built that leadership position by starting with innovation. Innovation is the core of our company, it’s the reason we’ve been able to persevere and create what we think is the third new platform for drug discovery and that technology platform is now a proven platform.
We have utilized the technology platform to create a pipeline of over 26 drugs and development and we’ve built around that as a unique business strategy that enables us to continue to add the pipeline, while maintaining a small and highly innovative workforce. Our goal for antisense technology is to use the technology platform, to create as many drugs in as many different disease areas to help as many patients as possible live healthier life.
So, ISIS is the leader in RNA therapeutics. We create an antisense technology and antisense technology networks. It works in cell culture, it works in animal and more importantly it works in many, many different models of diseases in human including four very robust Phase III clinical trials that have been completed for our lead drug KYNAMRO.
We control antisense technology through continued innovation and patent. We’re one of the largest patent holders in the United States with over 1,500 issued patents, which on a per capita basis makes us far and away of the most innovative company around. We’ve used this technology platform to create a pipeline of 26 exciting drugs in numerous different therapeutic areas in development. We’ve done all of this with a workforce of fewer than 350 people and that includes our manufacturing group, which enables us to maintain a very manageable cost structure and minimize our cashes.
Our partnership strategy also supports this by maximizing long-term return and minimizing short-term risk and creating sustained financial strength. Antisense technology is the only direct root from genes to drugs. If you know the gene that’s associated with the disease you can create an antisense drug to inhibit it. It’s uniquely specific and then an antisense drug stops the production of a single disease-causing protein without affecting other related proteins. But it’s very broadly applicable. So many, many, many different diseases are minimal to antisense.
Because it’s a platform technology, early drug discovery and early development are extremely efficient because we know about the physical, chemical properties of our drugs and what that means in terms of what they do in the human body, that allows us to have dramatically reduced costs in our early drug discovery, increased success because of lot of the question marks that you would have about, for example a traditional small molecule drug or question marks with antisense technology and it also allows us to move drugs more rapidly into development.
Every time we make an investment, that investment is amortized across our entire pipeline, so if we develop a new analytical method, if we develop an improvement to our manufacturing technology, if we develop a chemical modification that enhances potency. We can turn around and take the research investment in that improvement and apply it to all of our programs in research. So it provides tremendous efficiency benefits and this allows us to generate a robust diverse pipeline by adding three to five new drugs a year.
This is the pipeline. You can see our principle focuses are in cardiovascular, metabolic disease, and cancer and our newest franchises are severe and rare disease franchise. And then we have numerous other collaborations and drugs that we’ve worked on with partners to target some interest for them.
KYNAMRO or mipomersen is our most advanced drug and it really represents a very significant initial commercial opportunity with lots of opportunities for growth in the future. We’ve filed our MAA in Europe last summer for both homozygous familial hypercholesterolemia and severe heterozygous FH. Our U.S. NDA will be for homozygous FH will be filed this month.
And our partners at Genzyme and Sanofi are very actively preparing for the commercial launch of this drug this year. But importantly, we’re also investing in the future of this drug with our focused FH study underway, which will support potential expansion of the market for the drug in both the U.S. and Europe, as well as introducing a new dosage form of the drug to provide alternatives for patient in terms of the dose form.
Mipomersen represents as I said a very significant near-term commercial opportunity. Our first filing in the U.S. will be for homozygous FH, which is about 3,000 patients. Our first filing in Europe is for the homozygous FH patient population, plus the severe heterozygous FH population so that’s about 18,000 patients in Europe. And as I said we’re conducting the FOCUS FH study, which could provide support for the potential expansion of the U.S. indication to also include the severe heterozygous FH patient population adding 15,000 additional patients in the U.S.
KYNAMRO is a drug that lowers LDL cholesterol, but it not only lowers LDL cholesterol, it lowers all of the different independent atherogenic lipids that are independent risk factors for cardiovascular disease. So it lowers apoB, Lp(a), triglycerides, VLDL and it has no negative impact on HDL. So there are patients who can get their LDL cholesterol under control, but continue to have high Lp(a), for example. Those patients for me had a very significant cardiovascular risk, a drug with a profile to reduce all of the atherogenic lipids could be a significant positive entrant into the lipid lowering market.
This is the first-in-class product opportunity and it’s initially targeted for very high risk patients with severely high cholesterol who have a genetic pre-disposition to severely high cholesterol. We’ve had four positive placebo-controlled Phase III studies to support our U.S. and European filings.
In these studies, all primary, secondary, and tertiary end points were met and more highly statistically significant. We have over 800 drug-treated patients in the initial filing with over 100 of those patients treated for more than a year. We think this robust efficacy package combined with the safety profile that we’ve observed supports our focus on these planned patient populations.
Our initial populations are the homozygous FH and the severe heterozygous FH patients. You can see in this table that in the Phase III studies we conducted in those – in those patients we had an average LDL cholesterol reduction of over 100 milligrams per deciliter. Based on meta-analysis that are – been done on all of the different lipid lowering studies that could translate into as much as a 50% reduction in cardiovascular risk for these patients. You can also see that in the less sick patient population too we have treated with this drug in the general heterozygous FH population, as well as in just a general high cholesterol, high risk patient population, we were able to reduce in the first instance 45% of the patients’ to LDL cholesterols at goal at a 100 million grams per deciliter and in the second instance we got more than half of the patients down to a goal that physicians would like to set for high risk patients, which is 70 milligrams per deciliter. So, a very important drug producing very substantial reductions not only in LDL cholesterol, but also in the other atherogenic lipids.
Principal side effects of the drug are mild-to-moderate injection site reactions. They’re principally cosmetics, they don’t incur with every injections. We’ve had about 5% discontinuations in our Phase III studies from ISRs.
We also see occasional flu-like symptoms and have had about 2.7% of the patients in the overall Phase III program discontinue for achy, feverish feelings, headaches and those types of things. The drug works in the lever, so the principal side effect that we see in the liver is that we have about 8% of the patients who get ALT elevations above three times upper limit of normal. And you know all lipid lowering drugs produce some amount of ALT elevations and it's part and parcel of working in liver and reducing lipids.
These ALT elevations that we’ve observed principally happen early on in dosing and they happen in the patients who are getting the most rapid and most profound reductions of their LDL cholesterol. They’re monitorable, they’re manageable. In many cases they’ve been dosed through and go back down again. So, this is a side effect that we of course are paying attention to, but we don’t think it’s particularly troubling.
We now have a lot of experience with long-term treatment with mipomersen for KYNAMRO and its all good news. In other words, we are continuing to see in long-term treatment what we saw early on and that’s of course what we always hope for in your Phase III programs. So, we are seeing robust lipid lowering activity with long-term treatment. In order words all of the measured atherogenic lipids that go down with treatment stay down with continued treatment.
Our pre-clinical observations of liver adaptation to lipid transport changes in the liver are turning out to be just what we see in the clinic. In other words, a very small number of patients will have short-term increases in liver fat, which is just what we observed in animals and over time they stabilize and now they are going down.
So that again is all good news with the continuing data that we are getting out of our long-term dosing. So, the bottom line is we maintain the reductions in lipids, increases in ALTs and liver fat associated with the greatest reductions in LDL cholesterol. They are monitorable, they’re manageable and we are feeling very good about the profile of the drug for the patients for whom we’re registering.
Our MAA filing is submitted. We are well along in the European process. We are on track for the NDA filing this month. The profile of the drug we think is very positive and Genzyme and Sanofi are very much focusing on disease awareness and patient-centered treatment, which is the Genzyme hallmark and so we’re very happy with the plans that are being made to launch this drug globally.
With the pipeline as large as ours of course we always have a lot going on and just to give you some examples of what we had going on in 2011. Our pipeline matured, we started eight new Phase I clinical trials last year and a broad variety of different diseases and rare diseases, metabolic disease, cardiovascular disease, as well as initiating three Phase II studies.
Our pipeline grew by six drugs. The drugs are very diverse, our first anti-obesity drug, a cancer drug, some, a rare disease drug, cardiovascular drug and a new entrant in our metabolic disease drug and franchise a drug to treat NASH. In addition to the data that we have on an ongoing basis from KYNAMRO, we had clinical data. So, clinical data in humans coming out of seven different additional programs last year. And so I’m just going to focus a little bit on the other franchise and what you might expect going forward in 2012.
In 2012, in addition to a planned commercial launch of KYNAMRO, which obviously is a big highlight for us for the year, we expect data from our CRP program. We’re going to start Phase II clinical trials in both our triglyceride lowering drugs, as well as our novel clotting disorder drug, which is a Factor XI Inhibitor and we’ll start Phase I clinical trials either at the end of this year or early next year in our LP(a) lowering drug ISIS-APOARx, as well as our second clotting disorder drug our Factor VII inhibitor.
We presented data on the APOCIII drug at our R&D Day in January and I just wanted to go over that. Obviously, you know that high triglyceride are a very important cardiovascular risk factor and very high triglycerides are associated with an increased risk of pancreatitis. There is a significant unmet medical need in the highest risk portion of this patient population, patients with triglycerides that are over a thousand who have high risk of not only cardiovascular rents, but also pancreatitis.
So, we have designed a rapid development path starting with the top of the risk pyramid as we did with mipomersen, in other words starting with the most severely at risk patients those with the triglycerides over a thousand. So, we plan this year to start a Phase II study in those severely elevated triglycerides patients, which will start in the first half of the year. In addition, in the middle of the year, we plan to start a study in the LPL patient and we’re looking at additional Phase II proof-of-concept studies to begin.
Just to give you an idea of the data that we’re so excited about, you can see in our Phase I clinical trial, with just one month of dosing we’ve rapidly and profoundly reduced apoC-III in a dose-dependent fashion to down more than 80%. We also present a date on our Factor XI inhibitor, which is broadening the scope of our cardiovascular franchise in January at our R&D day.
Obviously, high levels of Factor XI are associated with risk for aberrant blood clot formation. The Factor Xa inhibitors, I think have been a really important entrant in improving therapy in this area. But we think our Factor XI inhibitor has a profile that could be even better than that certainly based on preclinical data that we have. We can show equivalent anti-clotting activity with no increase in bleeding at all and so this is a drug that we’re also very excited about.
Our development plan is to rapidly achieve a partnering opportunity by showing clinical proof-of-concept, which we plan to do with our initial study, which we’re starting this year. This is a study in VTE prevention in total knee replacement surgery, which will begin early in the second half of the year.
Again just to show you the data from the Phase I study that we are excited about and this is going to look very much like the apoC-III data and I’m going to show you another piece of data that will look very much like this because our drugs very regularly and reproducibly reduced their targets in a dose-dependent fashion.
So you can see a nice 80% reduction at the highest dose and a nice dose response curve associated with Factor XI dosing. You can also see, if you look to the right of the grey area that the reductions in Factor XI that we saw in this study continue and for quite a long time following the cessation of dosing.
In our metabolic disease franchise, we’ll have data on four different drugs this year. Our first anti-obesity drug that’s a novel peripherally acting anti-obesity drug, so it’s not a CNS based drug. It’s a drug that increases fat burning and energy utilization in fat cells. So, we think again and a very novel approach to enter what’s an important new market, as well as data from three type 2 diabetes drugs and we plan to put our NASH inhibitor into clinical trials late this year or early next year.
Cancer is one of our most mature franchises with OncoGenex drug OGX-011 in Phase III clinical trial. Our EIF4E inhibitor and Lilly’s Survivin inhibitor and OncoGenex Heat Shock Protein drug are also all in Phase II clinical trial and we expect data from both the Lilly drug and we’ve actually already had data from the OncoGenex drug this year. In addition, we just initiated our Phase I clinical trials with our STAT-3 inhibitor last week.
Our severe and rare disease franchise is one that’s getting quite a lot of attention. It’s our newest franchise, but we have quite a lot of activity going on there. Our spinal muscular atrophy program, which we partnered this year with Biogen Idec will start Phase II, III studies next year and is moving quite rapidly through clinical trials. We’ll have data from our STAT-I inhibitor this year. Our TTR program will initiate a Phase II, III program this year and we plan to take the Alpha 1-Antitrypsin drug, which we are working on with GlaxoSmithKline into Phase I clinical trials this year.
We presented data on the TTR program also in January and transthyretin amyloidosis is a fatal, severe, rare genetic disease that affects about 50,000 patients worldwide. Our initial indication is a subset of these patients who have a peripheral neuropathy, that’s caused by plaque formation.
In this genetic disease, a TTR mutation causes your TTR protein to be unstable and fold abnormally and that lays down plaques in your periphery and your nervous system that causes the generative nerve loss motor function and actually many of these patients die from wasting.
We think this drug has the potential for best-in class for all forms of the disease both the polyneuropathy, which is our initial indication, as well as the cardiomyopathy and we are planning on starting studies designed for rapid route to the market around the middle of the year.
Again the data from the Phase I clinical trial, we showed that 80% reduction in TTR in this study after a month of dosing and those reductions continue to be profound and again a lovely dose response in the study. Our business model is founded on partnering and we’ve had a lot of partner successes this year, numerous milestones out of our GSK collaboration.
Pfizer acquired the company that we started Excaliard who has a scaring drug for scaring associated with surgery. And we are really pleased to have the Pfizer organization now behind with the continued development of that drug, which should go into Phase III clinical trials either late this year or early next year. In addition, already this year, we’ve announced a new preferred partner transaction with Biogen Idec for our Spinal Muscular Atrophy drugs.
We think Biogen Idec is a great partner for this drug in addition to the fact that it’s a very attractive transaction for us in which we received $29 million upfront, for if we have the opportunity to get $45 million in pre-licensing and development milestone payments and then Biogen Idec can make a decision to license with a substantial license payment in double-digit royalties. Obviously, their global development, commercial capabilities are a perfect fit for this opportunity.
SMN is a severe genetic neuromuscular disease that infants and children have. Many infants who get the Type I disease die from their disease. It’s a patient population about the size of cystic fibrosis or DMD or sickle cell anemia. This is a drug that’s in a Phase I clinical trial in patients and we have an expedited Phase II, III program plan and there are no treatments available today for this drug.
So, again our plan is to go directly from the Phase I studies into two parallel Phase II, III studies, one in the Type I patients who are – you may have heard of them, infants with floppy baby syndrome. These are infants who typically die in infancy or immediately go on to around the clock ventilation. They have a very short life expectancy. The Type II, III patients are typically in wheelchairs and severely disabled. And so we plan a second Phase II, III study in the Type II, III patients.
In 2012, we are looking forward to commercial revenue from KYNAMRO being on the horizon to start next year. Our business strategy continued successes already. We’ve done one deal this year and all of the transactions that we do support our solid cash position.
You’ve seen that we are going to have a lot of activity in the pipeline broadening it, expanding it, maturing it, as well as multiple clinical programs with data events as we go through the year. Just last week, we put our first generation 2.5 drug in man and we plan to add three to five new drugs to the pipeline as we go through the year.
So, I want to thank you for that and we do have a break-out session at one floor up? Okay.