Good day ladies and gentlemen and thank you for standing by. Welcome to the Alnylam Pharmaceuticals conference call to discuss the second quarter 2012 financial results. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company’s request.
I would now like to turn the call over to the company. You may proceed.
Good afternoon. I’m 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; Jared Gollob, Vice President of Clinical Research; and Mike Mason, Vice President of Finance and Treasurer. Akshay Vaishnaw, our Chief Medical Officer could not be with us today due to travel plans.
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 www.alnylam.com.
During today’s call as outlined in slide two, John will provide some introductory remarks and provide general context. Jared will summarize the clinical progress with our Alnylam 5x15 program. Mike will review our financials and guidance, and Barry will provide a brief update on progress with our partner programs and also provide a summary of our business highlights and goals. We will then open the call for your questions.
Before we begin, and as you can see on slide three, 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.
Thanks Cynthia. Welcome everyone and thanks for joining us this afternoon. This quarter in recent period defined an exceptional period of scientific and clinical accomplishment for Alnylam and the field of RNAi therapeutics.
Indeed in recent months our clinical results with RNAi therapeutics have grown significantly. We have now demonstrated positive results in five clinical programs, including ALN-TTR01 and ALN-TTR02 for the treatment of ATTR, ALN-RSV for RSV infection, ALN-VSP for liver cancer and ALN-PCS for severe hypercholesterolemia.
Notably we are very pleased with our most recent data with ALN-TTR02, where we achieved rapid, dose dependant, durable and specific knockdown of serum trends by region, the disease causing protein in transthyretin-mediated amyloidosis after just a single dose.
Specifically, we showed TTR knockdown of up to 94% with a nearly 80% level of suppression sustained at one month. We believe these data document an unprecedented level of clinical activity for RNAi therapeutics and serve as an important industry milestone in the advancement of this new class of medicines to patients. We also reported encouraging clinical data from our Phase I ALN-PCS trial showing statistically significant and durable knockdown of plasma PCSK9 of up to 84% and lowering of LDL cholesterol of up to 50%.
Turning to slide five, these important accomplishments gave us great confidence in the continued execution of our Alnylam 5x15 product strategy, which focuses on advancement of RNAi therapeutics toward genetically defined targets for diseases where there are limited treatment options for patients and caregivers. We also believe that Alnylam 5x15 creates an important and compelling path forward through value creation for our shareholders.
As we stated earlier this year, we plan on executing on this strategy with a near term focus on ALN-TTR02 and ANL-TTR sub-cu for TTR amyloidosis and on ALN-AT3 for hemophilia. And that advancement of other 5x15 programs will be accomplished with partnerships that we aimed to form in the future.
We have also made important progress in our delivery efforts. To date our clinical experience has employed three distinct delivery approaches, including inhalation of SRNA in a simple formulation, first generation LMP technology or (inaudible) and Alnylam’s proprietary second generation LMP formulation.
And as we highlighted in an important announcement of data this morning, we are on the eve of adding a fourth delivery technology to our clinical pipeline efforts with our GalNAc SRNA conjugate approach that enables subcutaneous dose administration. We are employing this approach in a number of our Alnylam 5x15 programs and fully expect to employ it increasingly in the future. Jared will talk about that in just a moment.
So without a doubt, our recent clinical activity and delivery progress is a major step forward for RNAi therapeutics and these results have bolded us further in our efforts. Of course, there is much more to do in our efforts to bring RNAi therapeutics to patients in need, and everyone here at Alnylam is focused and passionate on making that happen.
I’ll now turn the call over to Jared for a more detailed review of our clinical activities, our pipeline and our scientific progress, but before I do that, I will have to start by congratulating Jared on his recent promotion. Congrats Jared.
Thank you John and hello everyone. As John mentioned, we have had an extremely rewarding and productive quarter and recent period on the clinical front. I am going to focus on the recent progress with our Alnylam 5x15 programs and we’ll start with a recap of the data we presented just a few weeks ago from our ALN-TTR02.
As all of you are aware ALN-TTR02 is the flagship program in our 5x15 product strategy and is aimed at the treatment of TTR mediated MLA doses or ATTR. ATTR is a devastating hereditary and often fatal disease caused by mutations in the TTR gene. As an orphan disease, ATTR afflicts approximately 50,000 people worldwide and is associated with significant morbidity and a mean life expectancy of just 5 to 15 years from symptom onset.
It is clear that new therapies are needed for the treatment of ATTR and we believe that our mechanism of action, namely silencing of the disease causing TTR gene, leading to knockdown of the circulating TTR protein, has the potential to generate a profound therapeutic impact.
As you can see on slide nine, the Phase I trial for ALN-TTR02 we reported on in July was a randomized, single blind, placebo controlled, single ascending dose study enrolling 17 healthy volunteer subjects. The primary objective of the study was to evaluate the safety and tolerability of a single dose of ALN-TTR02 with subjects being enrolled at the five sequential cohorts of increasing doses ranging from 0.01 to 0.50 mg/kg. In addition pharmacodynamic and clinical activities for ALN-TTR02 were measured based on circulating serum TTR protein levels through at least day 56 following a single dose.
As you can see on slide 10, results from this study showed that a single dose of ALN-TTR02 resulted in rapid, dose-dependant, durable and specific knockdown of serum TTR levels. The overall results were highly statistically significant with the P value of less than 0.00001. Even at doses as low as 0.15 mg/kg, substantial serum TTR suppression was achieved where a mean 82% reduction was observed at nadir. This was extended at the next dose cohort of 0.3 mg/kg, where we showed an 87% mean TTR knockdown and then at 0.5 mg/kg where we showed 94% TTR knockdowns.
Turning to slide 11, the data show that ALN-TTR02 exhibited a rapid onset of action and a very durable response. In fact over 50% knockdown in TTR was achieved by day three in all of the 0.15, 0.3 and 0.5 mg/kg subjects and nadir levels were achieved between day 10 and 15.
In terms of durability, ALN-TTR02 sustained a 67% TTR knock down at 28 days at 0.3 mg/kg dose and a nearly 80% TTR knockdown at 28 days at 0.5 mg/kg, all this after just one single dose of drug. We believe that this pharmacodynamic profile supports at least Q4 weekly and possibly even Q6 or Q8 weekly dosing going forward, a very compelling profile for a breakthrough therapy in this clinical setting.
In addition, ALN-TTR02 was found to be generally safe and well tolerated in this study, consistent with our broader clinical experience of RNAi therapeutics using LNP formulations, but we have now treated over 100 patients or subjects with over 325 doses of drug and for a duration of over two years.
All totaled, our ALN-TTR02 results provide T human proof of concept with associated clinical relevance as we advance this medicine to patients for the treatment of ATTR, a debilitating morphogenetic disease.
Moving forward, we recently initiated a Phase II multi ascending dose study of ALN-TTR02 in ATTR patients, but Phase II study is aimed at enrolling approximately 20 patients with ATTR and will look at the safety and tolerability of multiple doses available on TTR02 as well as serum TTR knockdown that occurs with two doses of drug.
In addition, we were pleased to have recently been notified that the FDA has granted orphan drug designation to ALN-TTR02. We look forward to continuing to share clinical data from our ALN-TTR02 program and assuming positive results in the Phase II study; our goal is to advance to a pivotal trial in 2013.
Another exciting development in our continued advancement with our ALN-TTR program is data presented earlier today with ALN-TTRsc that uses a GalNAc-conjugate siRNA delivery approach enabling subcutaneous delivery. Specifically as you can see on slide 13, we reported new data today showing potent, dose dependant and durable knockdown to serum TTR in non-human primate in our ALN-TTRsc pre clinical program.
Given recent data showing the predictability of non-human primate data for human data with RNAi therapeutics, we view these results as highly promising. We are aiming to file our IND for ALN-TTRsc by the end of this year and this RNAi therapeutic offers some compelling product expansion opportunities in our overall TTR efforts at Alnylam, including patients with familial amyloidotic cardiomyopathy and penile systemic amyloid doses.
Our second major development focus at Alnylam is on our Hemophilia efforts, where we are advancing ALN-AT3 and RNAi Therapeutic Targeting Antithrombin or AT. At the recent world federation of hemophilia meeting in July we showed key data from our hemophilia program, specifically pre-clinical results as seen on slide 15 showed our ability to target AT with a GalNAc siRNA conjugate that enables subcutaneous dose administration, a highly preferred mode of administration in the setting of hemophilia.
We showed the ability to potently knockdown plasma levels of AT in a robust dose dependant and durable manner with the administration of just a single dose of ALN-AT3 in rodent and non-human primates. We also showed that administration of ALN-AT3 and Alnylam models of hemophilia resulted in normalization of thrombin generation, thus generating important pre-clinical POC data in this program.
In aggregate, our data showed an exciting potential for ALN-AT3 as a transformative therapy for the treatment of hemophilia and inherited orphan bleeding disorder. Also today we presented new data with ALN-AT3 demonstrating the potency of this therapeutic strategy.
Turning to slide 16, we showed new data with ALN-AT3 demonstrating that weekly subcutaneous injections at doses as low as 0.75 mg/kg, provided sustained AT knockdown of approximately 80%.
In addition, studies in non-human primates showed a very durable response for ALN-AT3, with a single subcutaneous dose achieved nadir knockdown of AT plasma levels at about day 15, with effects lasting over 22 days. ALN-AT3 was found to be generally safe and well tolerated in all of these pre-clinical studies.
In aggregate, we’re very excited about the potential for ALN-AT3 in hemophilia and believe that these new data support a once a week or twice a month subcutaneous dosing paradigm for this subcutaneously administered RNAi therapeutic, which could become a game changer for the management of hemophilia patients. In terms of our development progress, we remain on track to advance ALN-AT3 in an IND filing in 2013.
I will now turn to our ALN-PCS program where we also have some important clinical data this quarter. ALN-PCS targets PCSK9 for the treatment of Severe Hypercholesterolemia. PCSK9 is perhaps one of the most exciting targets in molecular medicine today based on human genetic data, showing a critical role for this protein and regulation of LDL receptor and levels of LDL cholesterol or LDL-C.
Our Phase I study was conducted at a randomized placebo controlled, single ascending dose study in healthy volunteers with elevated baseline LDL-C. The primary objective of the study was to evaluate the safety and tolerability of ALN-PCS. Secondary objectives included assessment of pharmacodynamic effects of the drug on plasma, PCSK9, protein levels and evaluation of clinical efficacy as measured by LDL-C levels. A total of 32 subjects were enrolled at the six dose cohorts ranging from 0.015 to 0.4 mg/kg.
In this study as you can see on slide 18, a single dose of ALN-PCS resulted in rapid dose-dependent and durable knockdown of PCSK9 protein levels in plasma of up to 84% relative to baseline and placebo with a statistically significant mean reduction of 68% in the highest dose group.
In addition, ALN-PCS administration resulted in reductions in LDL-C of up to 50% relative to baseline and placebo, with a statistically significant mean reduction of 41% at the highest dose. ALN-PCS were shown to be generally safe and well tolerated in this study and there were no serious adverse events related to the study drug.
ALN-PCS has a unique mechanism of action as it inhibits the synthesis of PCSK9 in liver cells, thereby reducing both its intracellular and extra cellular functions and thus provides a differentiated strategy for PCSK9 antagonism in comparison to monoclonal antibodies under development for this target.
In essence, we are phenocopying human genetics with RNAi. Specifically, this mechanism of action results in potent and durable LDL-C reductions that we believe will enable once monthly dosing and potential enhanced synergistic effects with statins.
Further, our RNAi therapeutics approach results in knockdown of PCSK9 and reduction in LDL-C in a manner that is independent of baseline PCSK9 levels, which can vary four to five-fold amongst patients. We believe these differentiating factors could be very important in the development of PCSK9 agents and will be important to the partnership we aim to form prior to initiating a Phase II study.
So clearly we have made tremendous progress with our Alnylam 5x15 clinical programs and we look forward to continuing to share updates from these programs with you in the coming months. As you can see in our development pipeline, we are now executing on an exciting pipeline of product opportunities with established human POC.
And so with that, I’d like to now turn the call over to Mike for a review of our financials. Mike.
Thanks Jared and good afternoon everyone. I will be referring to slide 21 for an overview of our second quarter financials. We continue to maintain a strong financial profile, ending the second quarter of 2012 with $292.8 million in cash, cash equivalents and marketable securities.
Our GAAP revenues for the second quarter of 2012 were $20.9 million as compared to $20.6 million in the second quarter of 2011. Q2 revenues included $14 million of collaboration revenues related to our alliance with Roche, which has signed it’s rights and obligations to Arrowhead Research Corporation during 2011 and $5.5 million revenues related to our alliance with Takeda. Looking ahead, we will recognize the remaining deferred revenue balance related to the Roche Arrowhead alliance of $9.3 million during the third quarter of 2012.
Moving to expenses, R&D expenses were $21.7 million in the second quarter of 2012, as compared to $25.3 million in the prior year period. The decrease is due primarily to lower clinical trial and manufacturing expenses related to our ALN-RV and ALN-VSP programs, partially offset by additional expenses related to the advancement of our ALN-TTR program.
In addition, external services expenses decreased, due primarily to lower pre-clinical expenses for our ALN-TTR and ALN-PCS programs, which we advanced further in the clinic. We expect that R&D expenses will remain consistent with this quarter for the remainder of 2012.
G&A expenses were $11.2 million in the second quarter of 2012 as compared to $8.4 million in the prior year period. The increase was due primarily to an increase in consulting and professional services expenses related to business and legal activities. We expect that G&A expenses will remain consistent with this quarter for the remainder of 2012.
We believe we will end 2012 with greater than $250 million in cash, which will continue to provide us with a strong balance sheet as we advance our RNAi therapeutics through clinical trials and towards the market.
This concludes the financial highlights and I’ll now turn the call over to Barry. Barry.
Thanks Mike. As you’ve heard this afternoon, we are demonstrating the human clinical data that the RNAi pathway can be harnessed to create high impact innovative medicines. We continue to focus on our Alnylam 5x15 efforts with what we believe to be our highest value opportunities, driving key programs towards pivotal trials with plans to commercialize in important markets.
In this quarter, we also made some important progress with our partnered programs, specifically with ALN-VSP and ALN-RSV as noted on slide 23. In June we presented data from our ALN-VSP program at the ASCO 2012 Annual Meeting. The results, in addition of course to demonstrating safety and tolerability with long-term dosing of LNP-formulated RNAi therapeutics, demonstrated disease control, lasting more than six months in the majority of patients treated on the extension study protocol, including a complete response in endometrial cancer patient who had multiple liver metastases prior to treatment.
I am pleased to share with you that the endometrial cancer patient in the extension study has maintained her complete response and has completed dosing now after 50 doses and 26 months of therapy. We are so happy to see such a difference in this patient’s live and we wish her the best going forward. Additionally, one additional patient with stable disease remains on the extension study with 17 months of therapy received to date.
Recently, we also formed a partnership with Ascletis, a privately held US-China joint venture biopharmaceutical company, to further advance this promising liver cancer program. This collaboration is focused on continuing with the development of ALN-VSP for the treatment of liver cancers and including hepatocellular carcinoma. This agreement provides Ascletis with the exclusive rights to develop and commercialize ALN-VSP in China. Alnylam retain all rights in the rest of the world, and is eligible to receive milestones and royalties based on product sales.
We’re thrilled to form this new partnership with Ascletis, and as great confidence that they will be an excellent partner for the continued development of ALN-VSP in the Chinese market. With this collaboration, we are able to develop ALN-VSP globally through the products advancement in the region where HCC is a particular challenge and as we retain all right in the rest of the world. This partnering strategy provides future opportunities for Alnylam to advance its novel therapeutic in other markets.
We’re also pleased to report data from our Phase II (b) trial with ALN-RSV01 in lungs transplant on patients, which we did in May. As all you know, ALN-RSV01 is Alnylam’s first RNA therapeutic to entry clinical trials and is our latest stage program. Also programmed with Kyowa Hakko Kirin for Asia and with Cubist for rest of world.
We believe the recent data provide important evidence that treatment of RC infected lung transplant patients with ALN-RSV01 reduces the incidence of new or progressive bronchiolitis obliterans syndrome or BOS, replicating findings from our earlier conducted Phase II (a) study of ALN-RSV01 in the same clinical study.
Although this study narrowly missed the primary endpoint of reduced BOS in an intent-to-treat analysis of conformed RSV infected patients. The data demonstrated statistically significant reductions and prospectively defined analysis of patient with their last observed carry forward and of patients treated per protocol.
Importantly, in all analysis, ALN-RSV01 treatment was associated with a clinically meaningful treatment effect with the reduction of over 50% in the incidence of BOS at day 180 as compared to with placebo.
BOS as you are aware is an irreversible life-threatening complication of RSV infection in lung transplant recipients. So this large treatment effect of ALN-RSV is very meaningful as we think about this product going forward and this is the first multi-center randomized trial in this patient population to demonstrate impact on BOS. As reported, ALN-RSV01 was shown to be safe and well tolerated in this setting.
With these results in hand, as we’ve guided previously we are planning to meet with U.S. and European regulatory authorities later this year to determine next steps for the program. Pending the outcome of those discussions, we will determine the appropriate path forward for this program and will communicate them to you in the second half of this year. We also look forward to presenting the full data from this study early next month at the European Respiratory Society Meeting in Vienna.
In closing, as Mike mentioned, we continue to maintain a solid balance sheet and remain poised to execute on our goals, which prove the following as detailed on slide 24. We’re going to advance ALN-TTR02 through the current Phase II trial and start our pivotal study in 2013. We are going to file an IND for ALN-TTR sub-cu by the end of 2012 and for ALN-AT3 in 2013.
We aim to partner our PCS program prior to the start of Phase II and advance other 5x15 programs towards Phase I partnerships we aim to form, forming additional partnerships in programs and technology and importantly, ending the year with over $250 million in cash.
Clearly, this has been an exciting and extremely productive quarter and we are looking forward to sharing our continued progress, including clinical data over the coming months. We are clearly poised to drive an important innovative RNAi therapeutics to patients in need of better medicines.
With that, I’d like to turn the call back over to the operator for your questions. Derrick questions please.
(Operator Instructions) Our first question is coming from the line of Charles Duncan from JMP Securities.
Charles Duncan - JMP Securities
Hi guys. Congratulations on the progress in the quarter and thanks for taking my question.
Charles Duncan - JMP Securities
My first one is on the TTR program. There’s been some news lately with Pfizer’s Vyndaqel and some emerging progress out of mind-share competitor and I’m just wondering if you would share with us what the recent regulatory news does in terms of your strategy and the way that you are thinking about the clinical program and the market opportunity and then perhaps if you could also address what you think are the key features of your technology that could offer you some competitive advantage in the market?
Yes, well let me make some comments on that and then maybe Jared and Barry can chime in as well. I mean the decision by the FDA on tafamidis was one that obviously is distinct from what the European authorities decided on tafamidis and is a decision that we view as largely based on the fact that the study was somewhat underpowered.
What was important by the advisory panel was the validation by the FDA of the importance of the niser endpoint as a valid endpoint for measuring disease progression in patients with FAP, as well as I think the recognition of the significant of the disease and the importance of advancing new therapies that are proven to work in that clinical settling.
So, we fully expect Pfizer to continue to commit to tafamidis and to obviously continue to talk and discuss with the FDA ways to get their drug approved in the U.S. As they continue in parallel, there are efforts of commercializing the product in Europe and I think all signals point to that.
As it relates to other approaches out there, I mean clearly there is also an approach that’s related to tafamidis using diflunisal, which is an agent that also stabilizes the TTR tetramer. That is a generic drug that’s being developed through a academic network led by BU, and those type of data will be out -- sometime next year is the expectation. It’s looking at a slightly broader patient group than was examined in the tafamidis Phase III trial.
Then the other approach that’s out there is the approach of ISIS and GSK, which like Alnylam’s approach is focusing on TTR knockdown as the primary strategy and I think we believe strongly that TTR knockdown is the preferred therapeutic strategy for the treatment of ATTR and that’s why we are quite excited about it, and obviously ISIS and GSK are as well.
I think clearly we understand the ISIS and GSK technologies very well. We have an approach that we think will be the best-in-class approach based on the strong level of knockdown that we see, the rapid effects that we see, the fact that we see a very durable effect after just a single dose and obviously that’s what’s going to have to be shown in Phase III trials with our drug, as much as they have to demonstrate it for their drug.
So, we feel extremely excited about our drug. We think it’s going to be the winning therapy out there in ATTR, but there are other drugs out there that are being developed and it’s also indication of the marketplace that is one that will accept multiple players out there at the end of the day.
So those are my top-level thoughts. I mean Jared, maybe any other thoughts on the advisory panel on Vyndaqel and Barry on the commercial setting?
I think John as you mentioned, I mean the tafamidis Phase III study was very important, because it did provide very important natural history information in this particular population of patients with polyneuropathy, the FAP population, and its showed that this particular neuropathy end point was potentially attractable end point for a pivotal Phase III study, although as John mentioned the tafamidis study was unfortunately underpowered.
From the standpoint of lowering TTR, we believe that the precedent set by the tafamidis trial this is attractable neuropathy end point, I think bodes well for a TTR lowering approach to be able to have a real impact on that particular end point, and I think therefore I think it really set the stage for being able to show that a drug such as ours that lowers TTR can have a real impact on the natural history of the disease and have a clinically meaningful effect on the lives of these patients.
I think that’s pretty complete. We are talking about a genetic orphan disease that’s fatal and after clinical onset, patients live with horrific comorbidities, including not only motor loss but wasting. So this is a place where not only slowing the disease progression, but stabilizing reduction of the disease is necessary.
We are pretty excited that we’ve demonstrated reduction of TTR, both mutant and wild type, which is what we are aiming to do that was TTR01 and then fantastic knockdown as we reported with TTR02. I can tell you that a treating physicians and patients are very excited about the data they’ve seen.
Yes, and there is no data that is as good as our data at this point in time, and we expect that to continue going forward, Charles.
Charles Duncan - JMP Securities
You also mentioned pretty long-term exposure, at least in a few patients, do you think that safety or longer-term exposure is going to be an important potential differentiator?
Well look, one of the wonderful assets of the VSP liver cancer program was the fact that we did obviously treat patients for a long duration, as long as they responded the therapy and they also received drug twice a month as opposed to once a month, which is the minimal expectation for TTR2.
So that gives us considerable comfort and confidence as we move forward here with long-term exposure with our drug, the two years plus treatment, twice monthly versus once monthly is almost like a four year exposure experience for the comparable for TTR02 and so we feel – knock on wood, we feel that this is obviously emerging important data, but we feel increasingly confident about all that and we’ll see how that continues, but we believe that that’s going to be something, which clearly is an important element of our profile.
Now other approaches also appear to have some safety behind them, but we don’t see any injection side reactions or flu like symptoms, which have been reported in antisense oligo therapies and we think that’s important in terms of how our drug will be tolerated in the patient population.
Charles Duncan - JMP Securities
Makes sense. Last question for either you John or Barry regarding partnering for PCS. I’m wondering if you have any internal goals in terms of timelines. You’ve been pretty good at partnering for your platform, but I’m wondering when we could see a deal to emerge there?
Well, Charles we do have internal goals on that and the external goal is that we’ll form additional partnerships this year. We’ve got great discussions that are going on. I think that the TTR02 data, the PCSK9 data that we showed earlier this year are really widening the eyes of a lot of interested parties and I’m confident.
I think that we’ll see things materialize and in a way that’s consistent with our external goals and stay tune on that. That’s what we have to say at this point in time. It’s not done till it’s done. But I think very importantly we are not in a position where we have to do partnerships to raise the capital or to advance these programs. We have a very strong balance sheet.
We’re able to advance these programs without partnerships. We’re not going to just do partnerships to do partnerships. We’re going to do once that makes sense for the company and work for people that we believe can build value in the programs that we are aiming to advance and again the data, the clinical data has really widened the eyes of a
number of people that we’ve been talking to and I think that’s important.
Your next question, that comes from the line of Geoff Meacham, JPMorgan.
Geoff Meacham - JPMorgan
Hey guys, thanks for taking the question. One for you on dose, so for TTR02 looks like from the data a few weeks ago the 0.5 mg/kg looks like robust and still a good effect at 0.3 and when you look to the 83 tough, obviously it’s animal data but it looks like you had a lot higher dose there.
And so I guess the bigger question is, do you feel like you are pretty comfortable with maybe the book-end, the high-end low and sort of best and worst case with the AT3 when it comes to dosing and then maybe the bigger picture is, as you guys from animal models to Phase I POC and more programs, what do you guys seeing are learning in terms of a realistic therapeutic dose?
Yes, Geoff those are great questions. The first one on AT3 versus in doses and versus TTR02, keep in mind that TTRO2 uses a lipid nanoparticle delivery modality whereas AT3 uses our GalNAc conjugate technology and subcutaneous dosing. So they are basically two different technologies and the key thing there is that the dose requirements for our sub-cu platform are on a mg/kg basis are a little bit higher than the LNP technology, but we do get good bio-availability with sub-cu dosing.
So, the real opportunity for AT3 program in hemophilia, where there are no drugs that are given but for intravenous infusion, is to have a sub-cu drug in that setting, which is really enormously important in that context. Then obviously with TTR02, we are planning on giving ones monthly or one six weekly or eight weekly intravenous infusion to patients.
So, it’s a bit of an apples and oranges type comparison, and therefore you have to look at each one I think on its own right. But I think a very important question around, what are we learning on animal translation in humans is really key and you may recall some data we presented in our conference call around our TTR02 clinical data, which was a direct comparison of our human pharmacology at 0.3 mg/kg with non-human primate pharmacology at 0.3 mg/kg, and they were literally super imposed.
But I have never seen, let alone our human data, biological data that are so super imposal between two species, and that’s just a huge for us, because it’s given us a large level of confidence now that what we are seeing in non-human primates, at the very least is a very translate able into humans.
I mean Jared, do you want to comment any further on that?
No. I mean I think the point that you are making is a very important one. The translatability that we’ve seen really across multiple programs now, both in the TTR01 program and the TTR02 showing that the non-human primates really has a very, very good predictor of the pharmacology that we’re seeing in man, and so we have even more confidence now that the pharmacology we are seeing with the GalNAc conjugate in the non-human primate also has a excellent chance of also predicting what we expect to see in humans.
Does that answer your question, Geoff.
Geoff Meacham – JPMorgan
It does. Yes, I mean I guess that also begs the question John, when you mentioned the TTR02 the next steps here for Phase II. I know you guys have the detail on slide 12, but is there anything you think that you can still add to that, to the Phase II study ongoing with respect to number of patients or duration therapy or schedule etcetera, that you thought just when you have the final data, you don’t find yourselves wishing or I wish I had, something?
Yes, one more for me. There’s a couple of things there Geoff, which is this is going to be the two dose study as planned the goal is to enroll it quickly and obviously move quickly into our pivotals, because that’s where we think the real test of hypothesis will take place.
But you can rest assured that we are going to open up a new extension study on this protocol that will enroll patients that were initially enrolled in the protocol to continue to get dosing thereafter, and in that extension study, which will be an open label study, while we are enrolling in our Phase III, there will be a lot of data that’s coming out of that open label study going forward that we think we be very important and relevant and also create some ongoing news flow on this approach and this modality, which we think will be important.
So, long and short of it is, I think we’ll give you better guidance on the timing, probably in another quarter or so. We just started the study back in June. There is a lot of excitement in the field around this drug and we do believe that it will enroll in a timeframe that is very much on track with our expectations internally and we’ll give you some more guidance on that, but I think importantly we will open up an extension study off of this study that will look at the longer term dosing in these patients.
Geoff Meacham – JPMorgan
Okay, excellent. That’s helpful thanks.
Your next question that’s come up from the line of Marko Kozul, Leerink Swann.
Marko Kozul - Leerink Swann
Hey, good afternoon all, thanks for taking the question and congrats on your progress.
Marko Kozul - Leerink Swann
And the GalNAc data today. My question is Michael Merson is heading in front of an FDA Advisory Panel mid-October. I was wondering what your potential partner might be looking for in that Adcom to analog related to ALN-PCS?
Oh, I mean that’s an interesting question. Well first of all we’ll wish our friends at ISIS as well and as well as friends at (inaudible). I mean it will be interesting panel of discussions and I think both of those panel discussions will be of interest to our partner – potential partner for PCSK9, because independent of the modality, there is going to be discussion around end points in relationship to at least homozygous FH.
And I think obviously the hope and expectation out of those panel discussions is that both drugs are recommended based on the LDL reductions that are observed in those studies, and I think there is reason to believe that that will play out that way. Of course one doesn’t know from the outside where the FDA’s review might go, but certainly we’d like to see reaffirmation or call that affirmation around LDL as the end point in those studies, and we believe that, that will happen, independent of what decisions are made on the drugs themselves.
And that’s going to be important, because as we think about PCSK9, we think about segments of the severe hypercholesterolemia setting that would be amenable to our drug. It includes patients that has severe hypercholesterolemia, likely heterozygous and patients for example that might be otherwise (inaudible) eligible, and those are the types of target populations that we’ve been thinking through.
I mean Jared, any other colors on that?
No. I mean I think I really echo the views that you just expressed, John.
Yes, yes. So I mean those are the important meetings for I think everybody in this field and we look forward to seeing how those go.
Marko Kozul - Leerink Swann
And maybe just a quick follow-up. Can you give us a little more color in terms of what you might be looking for in a partnership or an ideal partnership structure?
Well, I think we want a partner that’s going to move aggressively and quickly in this setting and really one that’s going to be committed to the product and it’s differentiation from the monoclonal antibodies that are out there. I mean it’s a very, very big space. There’s going to be multiple drugs out there ultimately. We have very differentiated mechanism of action.
We’d like to see a partner who is committed to elaborating that difference in clinical studies and then there are just the usual bells and whistles Marko that we expect to see upfront payments and milestones or royalties, but I think importantly the nature of that partner is going to be key to us.
Who is the partner? What do they bring to the table? We believe in this product and frankly we’d like to see a lot of upside in our participation on the downstream value of this product versus just trying to load out the upside on the upfront. Not to say that the upfront isn’t important.
But this is a very well established mechanism and we are going to want to see value opportunities for Alnylam on the back end, which are significant given the de-riskiness taking place. But those are in general terms the key elements that we think of.
Marko Kozul - Leerink Swann
So thanks for taking the questions.
All right, Thanks Marko.
Your next question is come up from the line of Alan Carr from Needham.
Alan Carr - Needham
Hey all, congratulations on the GalNAc data. I wonder if you could comment a bit more on that, one, what’s the IP around GalNAc? And then also, when you are moving to subcutaneous injection, you are getting into more drug being administered there, but maybe up until any sense range. Wondering what you can tell us about accumulation in the liver and that sort of thing. Are there certain risks that you might run into, that any sense you may run into also?
Yes, so those are great questions Alan. First of all in terms of IP, this is really Alnylam homegrown discovery. There is some background IP that comes out of our broad relationship with ISIS that broadly covers the use of – conjugates on oligonucleotides that obviously we have an exclusive license to for the RNAi field.
But beyond those sort of early foundational IP elements from our friends at ISIS, this is really a very homegrown Alnylam discovery and development, and one with a lot of IP coverage than are Alnylam owned intellectual property element. So that’s clearly stuff from an IP standpoint, it’s really exclusively ours, without question.
Then as it relates to your question on tissue level, that’s an incredibly interesting question, and I’m glad you asked it. Because we know that in the advancement of antisense oligo that relatively high tissue levels need to be achieved in let say, target organs in general. So, if you take data in liver, based on the mipomersen experience.
It was important to achieve target levels of drug in excess of 200, 300 microgram per gram of liver to get a 50% knockdown effect of ApoB. What’s encouraging about the GalNAc approach, in part because we are using the asialoglycoprotein receptor as an up-tick mechanism, is we are achieving ED50 knockdown levels at single-digit microgram per gram of tissue.
In other words, hundred fold lower dose levels in the issue of our drug, and we think that’s important as it’s relates to long-term tolerability of this approach. Obviously that’s up and that will bear out over time, but we were encouraged by the safety profile so far. I mean we’ve gone up to 300 mg/kg we announced today in this program and have not seen any significant toxicity even in multi-dose studies, and so our NOEL is in excess of that amount and our therapeutic index is greater than 100 fold. So it’s a very promising approach and it’s a rational approach with a receptor-mediated uptake mechanism.
Alan Carr - Needham
All right and if a pretty wide window for 2013 for the AT3 program, would data be available next year or is that something that might take into 2014?
Alan, we haven’t given guidance on it. We are going to be dosing, going into a Phase I study in hemophilia patients. This is the approach that we wanted to do in the background of hemophilia, not in the background of a normal individual.
The types of data we’ll be generating in that study, it not only relate to knockdown of antithrombin levels in patients, but also increases in thrombin generation levels in patients. So we’ll have both a primary Phase I readout, which is the targeted itself, antithrombin, which could be measured in plasma, both by immunoassay assay, but also by activity assay and then we’ll also have a readout on increasing trauma generation, just like we’ve done to the hemophilia knockout mouse that we reported back to the World Federation of Hemophilia.
I think it’s too early to tell you when those data would come out, we haven’t given that guidance yet, but you can gather from the types of end points that we are going to be measuring that we’ll be able to get data relatively quickly in the study, it’s not going to take a long time to get those type of data and so stay tuned. We’ll give guidance later in the year or early next year on that, but it is the type of end point in our Phase I that is tractable early in clinical development, not something that takes a long time to generate.
Alan Carr - Needham
Okay, thanks very much.
Your next question is coming from the line of Ted Tenthoff from Piper Jaffray & Co.
Edward Tenthoff - Piper Jaffray
Maybe picking up on the Alan’s question there, how do you see this drug fitting into the current treatment paradigm for hemophilia? Where do you think it will play in and I know that’s kind of a tricky question to ask without clinical data yet, but how to you see that, and I know this is an area John you have a lot of experience in, but how do you see that ultimately playing out and where you hoping to target that compound?
Yes, let meet give you three areas of great interest to us, okay. One is clearly in the inhibitor patient population where these patients have no routine prophylaxis. These are patients that have auto antibodies against Factor VIII or the Factor IX, they bleed frequently. They really have no prophylactic opportunity for managing or minimizing the occurrence of bleeding.
When they being to have a bleed, they start administering recombinant factor VIIa by IV infusion and for recombinant factor VIIa has a very short half-life and they often get themselves large amounts of recombinant factor VIIa before they can establish hemostasis, okay.
So imagine now an inhibitor patient, who instead of having this sort of stochastic course of year with no hemostasis, treating themselves with counter factor VIIa, when they are starting to bleed, okay, having five, six bleeds a year, getting a set of weekly subcutaneous injection or twice monthly, sub-cu injection of our drug and having a significantly reduced incidence of bleeding. I mean that’s a very compelling profile.
The next profile that I’ll comment on is you know even patients that are receiving routine factor VIII or factor IX, but are doing it so-called on-demand as opposed to three time weekly type dosing. Many patients, about half the patients in the U.S. only give their replacement factor when they begin to feel bleed coming on, okay.
So, now you have an opportunity in the severe so-called on-demand hemophilia patients to receive a once weekly or once every two weekly sub-cu injection, small volume injection and minimize their needs for recombinant factor VIII or recombinant factor IX in the management of their disease, so that’s a second setting that we are quite interested in.
And the third is the ultra-orphans. There are a number of other congenital deficiencies in the blood coagulation cascade including factor X deficiency, factor VII deficiency, factor XI deficiency, where these patients have no prophylaxis; they have no ability to manage their bleed other than using plasma concentrates and it’s an ultra-orphan indication with nothing available for these patients and using a drug like AT3, that basically resets the clotting cascade by taking the break of the endogenous anticoagulant system can make a significant difference in those patients.
So those are three that we are quite excited about, and three that we’ll develop over time.
Edward Tenthoff - Piper Jaffray
That’s incredible, how full time, I appreciate that. One quick housekeeping question too if I may. With the transfer of the Roche RNAi assets to Arrowhead, when does that amortization and/or how should we be thinking – it’s a bit of an accounting housekeeping question, but how should we expect that $14 million or so per quarter that you’ve been recognizing. Will that continue or does that end in the third quarter?
I’ll let Mike handle that.
Hey Ted, that does enter the third quarter. So with the transfer from Roche to Arrowhead, actually no changes to our accounting model, so the $14 million that you’ve been seeing in there for the last five years will actually finish in the third quarter. So we have $9 million of revenue related to Roche/Arrowhead collaboration in Q3 then it will go down to zero in Q4.
Edward Tenthoff - Piper Jaffray
That’s really helpful. Thanks so much guys.
Your final question is coming from the line of George Devoiko, MLB & Company.
George Devoiko - MLB & Company
Hi everyone. Congratulations on a good quarter and the progress you made in the first half has really been impressive. A quick question about the GalNAc-conjugate, this delivery vehicle is very interesting. I am just really interested to find out how widely applicable is it and whether with was vast IP that you’ve developed, whether it’s something that you are considering licensing out since you may not be able to have the resources to apply it to everyone you’d like apply it to, perhaps even the drugs that aren’t oligos?
Yes, well that’s interesting. Well, I mean look, clearly there is – I mean, first of all to answer your first question, we’ve now used this technology pre-clinically for six or seven different distinct of parasite gene targets and you’ll hear more about that over time. So, it is tractable as you defined tractable; its very specific. It’s a receptor-mediated up tick mechanism and it’s pretty effective and it’s got a very wide index. So we are encouraged by that. We are going to see more of that in the future as we think about developing our 5x15 programs.
In addition to that, your question on licensing it out, its certainly something which we would be open to doing, including in the non-analogous space. There has been historically interest in using receptor-based mechanisms for uptake of other modalities. I mean, what comes to mind is some of the Endocyte work with folate targeting of chemotherapeutic drugs and obviously this is an approach that could be interesting for other modalities as well. We’ll entertain those discussions as they emerge over time George. In the mean time our focus is really on SRNAs and elaborating this technology for that platform.
George Devoiko - MLB & Company
The next question I have about your ALN-VSP, the data that you presented at ASCO certainly is very interesting, especially the durability you’ve seen in some of the patients that have been treated, and having said, that given everything else that’s happening in the liver cancer space, the emerging interest in a number of other drugs and development for liver, and could you describe a little bit about the involvement of your partner there and whether you might expand to look for the rest of world partnerships now, to advance that program a little bit faster perhaps?
Sure. I mean Jared, do you want to comment a little bit on the space first competitively in the oncology space and I can comment on the partnering strategy.
Sure. From the hepatocellular carcinoma standpoint there really is only one approved systemically administered drug for patients with advanced hepatocellular carcinoma and that is the Bayer’s Sorafenib that has modest effectiveness, improved survival by approximately two to three months and is only tolerated well above by two-thirds of the patients who receive it. So they really is a wide-open space and a huge continued unmet need for new systemically administered drugs to treat advanced HCC.
And because HCC is malignancy that over expresses vascular endothelial growth factor, one of our targets and is also a highly proliferative malignancy, but also over expresses kinesin spindle protein, which is the second target in VSP. This remains really an ideal target for our particular drug. We’ve seen really robust antitumor activity in our orthotopic liver animal tumor model of human hepatocellular carcinoma.
So the very encouraging safety data and efficacy data from our Phase I study combined with the efficacy data from this orthotopic liver tumor model of HCC and the continued very high unmet need in this space, really all make this a continued very attractive area for a development. Then of course the disease is especially endemic in China and Taiwan where there are 350,000 new cases of HCC diagnosed every year, and so our partnership with Ascletis for development in China and Taiwan is very appropriate given the endemic nature of the disease there.
In terms of future partnering George, I mean I think right now our focus is on enabling and working with Ascletis to get to next trials up and going. Frankly, we think that the best opportunity in the future for partnering is going to be on the heels of data that they generate in that setting and it’s probably wisest for us to let them move ahead and generate the key Phase II data and then with a even more robust package than we have right now, find a reservoir partner for the program.
George Devoiko - MLB & Company
Having proof of concept Phase II data would certainly help in setting deal terms, that’s for sure.
George Devoiko - MLB & Company
All right, thank you very much. I look forward to you continuing progress.
Right, thanks George.
Okay, so I guess that was the last question. Thanks everyone. Alnylam is really pleased with our last quarter and recent periods of accomplishments and we look forward to sharing with you more of our data in the second half of this year. Thank you very much.
Ladies and gentlemen, that concludes today’s conference. We thank you for your participation. You may now disconnect and have a great day.
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