Isis Pharmaceuticals' Management Presents at UBS Global Life Sciences Conference (Transcript)

| About: Ionis Pharmaceuticals, (IONS)

Isis Pharmaceuticals, Inc. (ISIS) UBS Global Life Sciences Conference Call September 19, 2012 1:30 PM ET


Lynne Parshall - COO & CFO


Matthew Harrison - UBS

Matthew Harrison - UBS

I am Matthew Harrison biotech analyst here at UBS. Next up is Lynne Parshall, CFO at Isis and that she can give a presentation and then we’ll have a breakout in the [Gillard Room].

Lynne Parshall

Thank you and thank you for coming this afternoon. I am really happy to be able to talk to you about Isis Pharmaceuticals today.

Isis is the leader in building a platform technology that we believe really has the opportunity to be preferred platform for drug discovery, antisense technology. We’ve led the development of antisense technology really by focusing on substantial innovation which takes to pioneer a new way of looking at drug discovery. We use that innovation to create and protect with patent the technology platform, but of course we are not just research based company and we’ve focused the technology platform on creating a pipeline of novel drugs which I think is really unparalleled in the biotechnology space with over 25 drugs in development right now and a large research pipeline fueling that pipeline, we really think we're very prolific and have a lot of opportunities in the therapeutics space.

We built around the pipeline a novel business strategy which has helped us to be able to transform the technology platform into the substantial pipeline and put us in a position of being a very well funded biotechnology company. Our goal at Isis is to create as many different drugs as possible in as many therapeutic areas the technology is amendable to so that we can help as many patients as possible lead healthier lives.

As I said, when we started Isis, we started out to create a new platform for drug discovery and we believe today we can say with confidence that antisense technology is validated, but as very broad therapeutic potential and we’ve shown that potential being realized in quite a number of different therapeutic area and we're continuing to enhance the technology, to enhance the different opportunities available for the platform.

Antisense is really a true technology platform and so it enables us to be very efficient in both the discovery and development phases, so every time we make a new invention whether it’s an analytical method, whether it’s a chemistry improvement that enhances potency or specificity, whether it’s a formulation improvement, every single one of those inventions that we create, we can turnaround and apply broadly to our entire platform and that gives us tremendous economies of scale associated with developing and discovering new drugs. Because of that with fewer than 350 employees we have been able to create a pipeline of drugs in development of over 25 drugs. We are continuing to focus our internal expertise on the things that we do best, which is drug discovery and our early stage drug development. We work closely with partners for the later stages of drug development and commercialization of our assets.

We have protected what we have invented in the technology platform. We have over 1,500 patents. The vision which actually makes us one of the large patent holders in the United States and these patents are broad, they not only cover our drugs, but also many other different aspects of the technology platform enabling us to have a very significant competitive benefit in this area.

This is a pipeline, pretty soon we are going to have put it on two slides and I am going to spend the next two hours actually going through every single one of these drugs; I didn’t ask Matt for extra time, but I am sure he will give it to me. But in fact on this slide what I want to focus on our key areas of focus. Our key areas of focus are cardiovascular diseases. Our newer program, the one that’s garnering a lot of excitement which is our severe and rare disease program; we have three different drugs in Type II diabetes in our metabolic disease program.

Our cancer program again is one of our more mature programs, but Isis’ individual entrants into this area is relatively new in the cancer program in terms of focusing on personalized medicine approaches to cancer is the program that we are very excited about and down below is actually one representation of our unique business strategy. You can see under implementation and others a wide variety of different programs with different types of targets and different types of diseases. All of these programs are programs that are in one way or another brought to us by third parties who had undrugable targets. That's one of the advantages of antisense technology is we can drug undrugable target. So companies come to us with the target and say we've go brilliant biological insights, we've got intellectual property, but we can't make a drug of this target and Isis has been able to do that for all those programs.

In recent highlights, KYNAMRO or mipomersen which many of you know is at the later stages of regulatory filings. We are expecting approval in Europe this year and we are planning for approval in the US with PDUFA date in January of next year. We're investing in the future of this drug together with our partners with Genzyme and Sanofi; we've a large study, the FOCUS FH study underway to help us expand our indications both in the US and Europe.

With a pipeline of 25 drugs of course we always have a lot of data events and recently we've had positive clinical data from eight different programs including our TTR amyloidosis program, our apoC-III program for triglyceride lowering and our Factor XI program for antithrombosis. In addition, because of our novel business strategy, we also have a continuing stream of events happening with our partners, so just in recent times we have received several different success milestones from our partners at GSK; Pfizer brought a satellite company that we created that has a very interesting antiscarring drug that will go into Phase III clinical trials late next year, the company called Excaliard and we have done two different transactions with Biogen Idec this year; one for spinal muscular atrophy and one for DM1.

To talk about KYNAMRO a little bit, KYNAMRO is really a transformative therapy for patients who are genetically predisposed to extraordinarily high LDL cholesterol. Now when I say extraordinarily high, I don’t mean your LDL is 130 and you really feel like you ought to eat less ice-cream because that will get it down to where it ought to be. These are patients, the homozygous FH patients, are patients who untreated will have LDL cholesterols of a thousand.

Before statens, the life expectancy of this patient population was at 18 years old and they all died of cardiovascular events. Statens has made a tremendous difference to this patient population, now their average life expectancy is 33. So you can see there is still a tremendous need for additional improvement in the cardiovascular health disease patients and we think that KYNAMRO which not only lowers LDL cholesterol, but also lowers all of the other key estrogenic lipids has the opportunity to provide that benefit to these patients.

KYNAMRO has showed in four randomized double-blind placebo control Phase III clinical trials robust efficacy data. We have met all the primary, secondary and tertiary endpoint for those studies and have over 800 drug treated patients in the filings that we have made with both the U.S. FDA and the European regulatory agencies with over a 100 patients treated for more than a year.

Our initial filings as I said is made in the U.S. we filed for homozygous FH. In Europe, we filed for broader indications, that it also includes the severe heterozygous FH; patients were planning for approval in Europe this year and for the U.S. early next year and we have an FDA Advisory Panel on October 18th.

This is a drug where we have a worldwide commercialization relationship with Genzyme and Sanofi and we think the combination of Genzyme’s experience and focus on rare disease together with the Sanofi global infrastructure actually is a terrific set of partners for us to have to move this drug forward on to the market.

In terms of efficacy, this drug lowers LDL cholesterol in our Phase III trial it’s on average about 33% of trial data range from 25% to 37% with significant lipid lowering activity maintained with long-term treatments, so there is no rebound affect. As I said all of the measured estrogenic lipids are lowered in statistic with significant ways with no negative impact on HDL cholesterol.

The principle side effect of the drug is injection side reactions; it is given as a once weakly at home subcutaneous injection; it is a small volume injection with a needle that’s one gauge bigger than the insulin needle. Injection side reactions occur in most patients some of the time, so about 10% of injections it’s a low incident rate that are principally cosmetic, they are mild and they result rapidly. We have occasional flu like symptoms in about 2% of injections and about 8% of the patients in the study had ALT elevations, above three times the upper limit of normal. These were not associated with any other evidence of liver toxicity, so no albumin changes or bilirubin changes, no high (inaudible) cases. And so we believe this is a monitor-able and manageable side effect. So in general, we actually think that the risk benefit profile of this drug is very positive for the patients with extraordinary high cardiovascular risks that we’re planning on treating.

So in addition to KYNAMRO, which we think represents a significant initial commercial opportunity with the opportunity for commercial market expansion supported by the FOCUS FH study, Isis actually has quite a lot more going on. We have five different drugs which we believe have the potential to be able to launch in the next five years and I am going to talk to talk to you about each of those and in addition, our pipeline is expanding by three to five new drugs every year.

Over the next 12 to 18 months, we have seven different programs out of which we expect Phase II efficacy data. So again, lots of data is coming out of very a broad and rich pipeline. Our satellite companies, those small companies with the undrugable targets continue to be successful and those drugs continue to march forward as well and of course all of that represents economic and commercial upside for us and we continue to pioneer the technology opening up more and more opportunities for our technology platform.

With regard to short-term opportunities and I’ll talk a little bit more about each of these programs. Our ISIS-TTRRx is a drug to treat transthyretin amyloidosis. Our initial indication which we are pursuing with GlaxoSmithKline is for the polyneuropathy version of this disease or about 10,000 patients worldwide and we get license fee payments, milestones and double-digit royalties on this drug as it moves forward.

Our apoC-III drug is very unique triglyceride lowering drug and our initial indication for this drug is patients with extraordinarily high triglyceride, so triglycerides is over 880 milligrams per desolater and these are patients who not only have extremely high cardiovascular risk but also a very high risk of pancreatitis. So a much shorter term and more acute health problem faces these patients.

Our strategy is to approach our initial indication patients who are [maxed] out on other triglyceride lowering therapy and despite that are still at this very, very high triglyceride levels and they are about 200,000 patients in the US and Europe who meet this criteria.

Our spinal muscular atrophy drug which we are developing with Biogen Idec is a very interesting drug to treat a lethal disease in infants and a very disabling disease in children’s spinal muscular atrophy. This is a disease in which there are about 35,000 patients worldwide. Our partners OncoGenex are developing a prostate cancer drug with their partners Teva that is in two phase, three clinical trials right now and they are planning on starting a trial on non-small cell lung cancer later this year. And EXC 001 is kind of a sweeper in our portfolio as I said this is a drug that came out of the company one of our satellite companies that we help to start.

It’s a drug to treat scarring associated with surgery that company was bought by Pfizer and we are very pleased to have Pfizer’s balance sheet behind moving this drug forward into broad Phase 3 clinical trails.

ISIS-TTRRx is a drug where we showed in Phase I clinical trails extremely robust reductions of TTR and TTR of course is the protein that in its mutant form is responsible for this disease. So we showed over 80% reduction in TTR protein in normal volunteers. On the basis of that, we and GSK are taking this drug directly into a Phase 3 clinical trial which should start later this year.

ISIS-TTRRx has the possibility to be a best in class treatment for TTR amyloidosis. As the opportunity to treat both our initial indication which is the polyneuropathy form of the disease as well as the larger indications the cardiomyopathy form of the disease which represents about 40,000 patients. It’s a convenient once weekly subcutaneous self administration. And as I said the Phase 3 study should start this year and with a potential for a commercial launch as early as 2016.

Our apoC inhibitor is treating patients with very high cardiovascular risk as well as very high risk pancreatitis. In that study we showed nearly 80% reduction of apoC-III which is the target and nearly 50% reductions in triglycerides both fasting and postprandial triglycerides which we believe that this drug has a very attractive profile in another patients population which also has high cardiovascular risks.

We doing in Phase 2 study right now which will finish up next year and our plans is to start the Phase 3 clinical program for this drug next year. ISIS-SMNRx our drug to treat spinal muscular atrophy treats a severe and rare but fatal childhood disease the results really in severe nerve degeneration. What happens is the two forms of this disease is that the patients don’t make a protein that is necessary for normal neuromuscular growth which is called SMN1 and I am excited about this drug because it actually works through a very normal antisense mechanism that is different from anything else that we have in our pipeline.

Your body makes a related protein to SMN1 called SMN2 and SMN2 usually doesn’t do much many things because it’s missing an exon. So it differs it’s a truncated form of SMN1 that’s dysfunctional. This drug ISIS-SMNRx works by utilizing a splicing mechanism to cause the missing exon to be edited back into the protein. So the body makes some instead a full length protein which can perform the same function as the missing SMN1 protein. So we are utilizing the splicing mechanism to replace the SMN protein by causing the SMN2 protein to be become a functional protein.

So this has the opportunity, we hope to make a very big difference in the neuromuscular growth of these patients. SMN is a significant disease; it’s about the same size as cystic fibrosis, its 35,000 patients worldwide and obviously if we can increase the survival of the infant who die of this disease early on and we have the opportunity to expand that market.

We do have orphan drug designation in both the US and the EU and the Fast Track Status in the US for this program. The drugs in Phase I clinical trials right now that we will finish up this year, we plan on starting with phase II this year and then we have an accelerated path to a phase III program which would start the phase III study in infants late next year and the phase III study in childhood on set version of the disease in early 2014. As I said, with such a large pipeline, we have numerous other opportunities for Phase II data of the next 12 months to 18 months.

Our Factor XI drug is our first anti-clotting drug and this is a drug that is initiating a large Phase II study in total knee replacement therapy that should end up in the middle of next year. ISIS- CRPRx is a broad anti-inflammatory drug, which we think has tremendous market opportunity potential.

We are investigating that drug in three different Phase II clinical trails, one that’s endotoxin challenge study that we’ll look at the impacts down regulating CRP on a very variety of different cytokines and chemokines study in NRA and a study in atrial fibrillation. We begin to get data out of this phase II programs this year and with the remainder of it coming next year. ApoC-III for high triglycerides I’ve talked quite a bit about. Our EIF4E drug in cancer we expect to have data out of the phase II study next year. And behind that we have three different type II diabetes drugs all of which we expect to have data on in 2013 or in 2014. So quite a number of data opportunities coming out of the pipeline, along with that the opportunity to move these drugs forward in the later stages of the clinical development.

Our satellite company strategy really is providing a tremendous amount of benefit and I think for most investors it’s probably a little bit below the radar screen. One thing that many of you might have been exposed to recently is progress by a company that we formed with our partners Alnylam and Regulus which is in the process to go in public.

Regulus has recently done transactions with not only Sanofi and GSK but more recently with AstraZeneca and Biogen Idec. It's a company with a different RNA target then the messenger RNAs that we typically target. So this is a company targeting micro RNAs and we earn 46% of that company.

Some other highlights of the satellite company strategy. I’ve talked about our partners at Excaliard being brought by Pfizer who is moving anti-scarring drug forward in to aggressive Phase 3 program and our partners are OncoGenex who are working on a Phase 3 program for their prostate cancer drug. In addition to that, we have continuous news events coming out of this robust set of collaborations. And as I said, we’re well funded. We ended last quarter with that $336 million and our guidance for the year is to end the year with more than $300 million and we’re right on track for that.

And we have a lot of things coming up for the remainder of the year. We have commercial revenue from KYNAMRO on the horizon. We're looking forward to plan European approval this year and approval in the US early next year. Our business strategy continues to be successful. We have done numerous collaborations already this year and have a lot of opportunities for additional partnerships with a very large pipeline, the majority of which is unpartnered. We continue to broaden, mature and expand the pipeline. Our goal is to add three to five new drugs to our pipeline every year. We already added one this year and we’re on track to hit our goal.

And in addition, we have numerous data events including the ones that I laid out for you earlier, a number of data events that have already happened, including data events from our first generation 2.5 Chemistry drug, or step 3 drug which is in our oncology pipeline.

So with that, we got a couple of minutes left to ask me to save for questions in this room and then we can go to the breakout room.

Question-and-Answer Session

[No Q&A session for this event]

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