Alnylam Pharmaceuticals' (ALNY) CEO John Maraganore on Q4 2016 Results - Earnings Call Transcript

Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY)

Q4 2016 Earnings Conference Call

February 08, 2017 04:30 PM ET

Executive

Christine Lindenboom - VP, IR

John Maraganore - CEO

Barry Greene - President

Akshay Vaishnaw - EVP, R&D

Mike Mason - VP, Finance and Treasurer

Yvonne Greenstreet - EVP and COO

Analyst

Alan Carr - Needham & Company

Ritu Baral - Cowen & Company

David Lebowitz - Morgan Stanley

Mike King - JMP Securities

Gena Wang - Jefferies

Christopher James - Ladenburg Thalmann

Madhu Kumar - Chardan Capital Markets

Alethia Young - Credit Suisse

Paul Matteis - Leerink Partners

Operator

Welcome to the Alnylam Pharmaceuticals Conference Call to Discuss Fourth Quarter and Year End 2016 Financial Results. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the company's request. I would now like to turn the call over to the Company.

Christine Lindenboom

Thank you and good afternoon. I'm Christine Lindenboom, Vice President of Investor Relations and Corporate Communications at Alnylam. With me today are John Maraganore, Chief Executive Officer; Barry Greene, President; Akshay Vaishnaw, Executive Vice President of R&D and Chief Medical Officer; and Michael Mason, Vice President of Finance and Treasurer. In addition, Yvonne Greenstreet, Executive Vice President and Chief Operating Officer is in the room and available for Q&A.

For those of you participating via conference call, the slides we have made available via webcast can also be accessed by going to the Investor page of our website, www.alnylam.com. During today's call, as outlined in slide 2, John will provide some introductory remarks and provide some general context; Akshay will review recent clinical updates; Michael will review our financials; and Barry will provide a brief summary of upcoming milestones before opening the call for your questions.

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 Safe Harbor provisions 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 on any subsequent date. We specifically disclaim any obligation to update such statements.

With that, I will now turn the call over to John.

John Maraganore

Thanks, Christine and thank you, everyone, for joining us this afternoon. During the fourth quarter of 2016 and recent period, we made important progress in advancing RNAi therapeutics through clinical trials and towards the market setting up 2017 to be pivotal year for the company as we open the envelope on our first phase 3 dataset and prepared to make the anticipated transition to a commercial organization, specifically with patisiran, which we are developing for the treatment of patients with polyneuropathy due to hereditary ATTR amyloidosis.

We look forward to reporting topline data from the APOLLO phase 3 trials in mid-2017, and assuming positive results, expect to submit an NDA and NAA application for Patisiran at year-end.

We believe we have strong reasons to be encouraged by APOLLO based on the promising results from our ongoing phase 2 open label extension or OLE study o Patisiran, where we’ve seen for potential halting and improvement of neuropathy progression in patients. Further, our OLE study results have included a number of other objective measures for Patisiran clinical activity and we look forward to updating our results at the upcoming AAN meeting in April.

We’ve also recently made great progress with our mid to late stage clinical programs, including fitusiran for hemophilia, revusiran for Porphyria and with our partners at the medicines company inclisiran for hypercholesterolemia.

As we read out our phase 3 results with Fitusiran this year, we’ll also plan to bring these three programs in to phase 3 developments. This potential positions Alnylam to have a steady flow of phase 3 read-outs and a positive commercial launches on essentially an annual basis going forward.

We reported new data for both Fitusiran and revusiran at ASH this past December, and we are very excited for what we believe to be the transformative potential of these investigational medicines.

With fitusiran, we will be co-developing and co-commercializing with Sanofi Genzyme in the United States, Canada, and Western Europe and they will be responsible for commercialization in the rest of the world and in the case of revusiran we have global development and commercial rights.

Our college at the medicines company reported encouraging initial ORION-1 Phase 2 90-day results at the AHA meeting in November, and announced a topline, green light for one (inaudible) data early in January. Based on data today, we are excited about the potential for inclisiran particularly in light of the positive (inaudible) outcomes data for Repatha and we look forward to the full ORION 1 data which the medicines company expects to present as a late breaker at ACC next month.

We have important strategic and economic stake in inclisiran, so we are very pleased to see the progress in this program. In sum, we believe our mid-to-late stage pipeline programs provide a strong foundation for Alnylam to achieve its Alnylam 2020 goals of being a multi-product commercial stage company with a deep pipeline behind it by the end of 2020.

Of course as you know we did experience unfortunate setback during the fourth quarter, specifically we announced in early October that we discontinued development revusiran, an investigational RNAi therapeutic that was in development for the treatment of patients with cardiomyopathy due to hATTR amyloidosis.

We are still in the process of conducting and comprehensive evaluation of the available data to try to understand what caused the imbalance to mortality. To-date we’ve learned that the mortality events were concentrated in the study patients with more advanced end stage heart failure.

Further, based on our assessment to date, the majority of mortality events were due to progression of heart failure and there is no evidence for a drug-related cardio spasticity. We plan to continue our investigation and report our findings when our assessment is more advanced. Nevertheless, we remain confident that the revusiran findings have no [read-through] to the rest of our platform.

Our overall human safety experience with RNAi therapeutics comprises over 1,000 patients or volunteers dose for up to three years in over 10 sustained clinical programs. As compared with revusiran, patisiran and our ESC-GalNAc programs are administered at substantially lower overall exposure levels. These investigational RNAi therapeutics have been generally well tolerated with adverse events including injection site reactions and transaminase elevations which occur in a low incidence and are monitor-able. In addition these events have been generally asymptomatic and reversible.

Also we’ve seen no evidence for a broader neuropathy signal in our programs. In our view, this is an encouraging tolerability profile especially in the high unmet need indications that we pursue, while we continue to remain vigilant and highly transparent on this matter. Moreover the safety profile of our GalNAc siRNA conjugates compares favorably with published and FDA reported data for antisense oligo. While there have been no head-to-head human studies, we see no thrombocytopenia, no renal toxicity and no systemic inflammatory effects to date with our therapeutic candidates.

Now before I turn it over to Akshay to review our clinical progress in more detail, I would like to reflect for a moment on recent developments that have hindered or altogether prevented from certain Muslim majority nations from entering the United States. One of our core values at Alnylam is our commitment to people. We live our values and celebrate the many benefits from a diverse workforce.

More importantly we reject all forms of discrimination and limitations that prevent us from benefiting and growing as a diverse work place. We have many international employees and we will continue to have an inclusive company culture across the world, and to value and respect the many nationalities, religions, preferences and cultures represented by the people who make us who we are.

I am proud to have joined over 160 biotech CEOs, entrepreneurs and academic scientists associated with our industry to oppose the immigration ban advanced by President Trump’s administration. And I look forward to working with the administration constructively to promote policies that brings the best of the best people from around the world to work tirelessly in our great endeavor of translating the best science in to potentially transformative therapies for patients as potential curers and new therapeutic options.

Now with those introductory comments, I’d to now turn the call over to Akshay to review our pipeline progress in more detail. Akshay?

Akshay Vaishnaw

Thanks indeed for those comments John and good afternoon everyone. As John noted, we’ve made strong progress with our pipeline of investigational RNAi therapeutics. Let’s begin with our programs in hATTR amyloidosis which include patisiran and ALN-TTRsc02. This is certainly a big year for patisiran with our phase 3 APOLLO study read-out expected later this year in the September timeframe.

As John commented, we believe we have good reasons to be encouraged by the prospects for patisiran based on our Phase 2 OLE study results. We are pleased with the recommendation in October from the APOLLO data monitoring committee to continue dosing in the trial without modification. In the meantime, we continue to execute on our patisiran program with our team focused on registration and product launch objectives.

In addition, we are encouraged by the low APOLLO discontinuation rate today and the high rate of patient transition from APOLLO in to the APOLLO OLE study. Also in the third quarter, we initiated our patisiran expanded access protocol. We viewed this as great news with patients with these disease and we are pleased to provide an opportunity for eligible patients to receive patisiran treatment until the drug becomes commercially available pending regulatory approval.

Turning to ALN-TTRsc02 and ESC GalNAc conjugate in development for hATTR amyloidosis, we reported our initial Phase 1 data for the program and our R&D data in December.

TTRsc02 has the potential to achieve a once quarterly subcutaneous dosing management which we believe would be a significant improvement over revusiran or the IONIS-TTR program which both require weekly injections.

Our results shown on slide 7 showed a potent, dose dependent and a highly durable knock down on TTR in normal healthy volunteers. For example, a single 50 milligram injection achieved potent and highly durable TTR knockdown for 80% for over 90 days. The growth (inaudible) was tolerated in healthy volunteers with no serious adverse event and no discontinuation due to adverse events.

All AEs reported were mild or moderate in severity and there were no clinically significant changes in hematologic or laboratory parameters. We are encouraged by these initial results from ALN-TTRsc02 and the broader advances of our ESC GalNAc platform which have enabled in over 100 fold improvement of potency and a meaningful improvement in durability.

We’ll now wait the results from the APOLLO Phase 3 study of patisiran and assuming positive results, we’ll then plan to engage regulators to align on a development path for ALN-TTRsc02.

Let’s now turn to our fitusiran program for the treatment of hemophilia and rare bleeding disorders where we’ve continued to make great progress. Fitusiran is an investigational RNAi therapeutic targeting antithrombin or AT, and is designed to increase thrombin generation and thus help achieve hemostasis in people with hemophilia.

We believe that fitusiran has the potential to address unmet needs in hemophilia by providing consistent and durable hemostasis support for all patients and a whole new treatment options for patients living with inhibitors. Moreover, as a once monthly subcutaneous injection fitusiran has the potential to address the significant treatment (inaudible) of current management.

And as this past December, we reported on Phase 1 fitusiran data in inhibitor patients and Phase 2 early data in non-inhibitor patients. Fitusiran demonstrated robust slowing of AT of over 90% and showed evidence for significantly improved hemostasis in severe hemophilia A or B patients with or without inhibitors.

Specifically, once monthly subcutaneous administration of fitusiran achieved a median estimated annualized bleeding rate or ABR of 1 in patients without inhibitors and a median estimate d ABR of zero in patients with inhibitiors. Importantly, in the 32 patients across the two studies, fitusiran showed an encouraging safety profile for up to 14 months of dosing; in particular there have been no thromboembolic events or laboratory evidence of pathologic clot formation even when bypassing agents were used to treat breakthrough bleeds. Furthermore no instances in anti-drug antibodies were detected.

At just last week at the EAHAD meeting in Paris, we presented new results from an (inaudible) analysis of fitusiran Phase 1 study. In this analysis treatment of all breakthrough bleed events with the replacement factor or bypassing agents resulting in hemostasis without any thromboembolic events. In addition, we presented results from stability studies of fitusiran which supported greater than two year shelf life at room temperatures (inaudible) conditions. This stability profile could potentially facilitate treatment in region where cold chain storage (inaudible) represents a challenge to patient access.

We believe these late stage bears a promising for fitusiran’s potential as a treatment option for hemophilia patients with and without inhibitors. Moreover, the results continue to highlight what we believe to be a very competitive profile for this innovative investigational (inaudible). We expect to report additional data from the fitusiran Phase 2 early study in the middle of the year likely at the ISDH conference in July.

We’re now transitioning fitusiran in to a comprehensive Phase 3 program called ATLAS, which we aim to start in early 2017. The ATLAS is expected to include three separate Phase 3 trials running essentially in parallel towards the goal of obtaining broad based approval for fitusiran in hemophilia A or B patients with or without inhibitors. We’re currently engaging with regulatory authorities on the final (inaudible) design, and expect to start ATLAS in the coming months.

Let me now turn to recent progress with givosiran, which we are developing for the treatment of acute hepatic porphyrias. Porphyrias is a group of ultra-rare orphan diseases caused by genetic defects in the heme biosynthesis pathway. It’s a devastating disease and an enormous burden. In this disease (inaudible) of toxic (inaudible) lead to incapacitating and potentially fatal attack with symptoms that include severe abdominal pain, peripheral and autonomic neuropathy and neuropsychiatric manifestations.

Porphyria attack simply last for days and often require hospitalization. Patients describe the pain during an attack as incompatible with life. And the majority of patients reported chronic pain in between their attacks. The only available treatment is hemin a group preparation of heme administered via a central line.

Givosiran targets the liver-expressed, ALAS1 gene which is upstream of a genetic defect in acute hepatic porphyria and the enzyme responsible for over production of ALA and PBG the toxic heme synthetic intermediate that mediate porphyria attack. Our therapeutic hypothesis is that silencing ALAS1 with givosiran with lower levels of ALA and PBG and thereby has the potential to reduce the number, frequency and severity of porphyria attack in patients.

Other once monthly or potentially once quarterly subcutaneous investigational RNAi therapeutic to prevent debilitating porphyria attack, givosiran could be a transformative therapy for patients with this disease. As this past December, we reported Phase 1 Part C data for givosiran in acute intermediate porphyria patients with recurrent attacks.

Part C was conducted as a randomized double blind placebo controlled study where patients were monitored over a three months running period and then randomized 3:1 drug of placebo and monitored over subsequent six months treatment period.

During the running three month periods, we prospectively monitored the frequency and duration of porphyria attacks and the use of hemen to treat attacks. On the safer side, givosiran was generally well tolerated with no drug related serious adverse events or discontinuation. After the date cut-off, there was one death reported in the third cohort in the study which currently remain blinded to treatment assignment. The death was due to acute pancreatitis complicated by pulmonary embolism and deemed unlikely related to drug or placebo.

Turning to the clinical activity data on slide 13, on the left you can see the results from the first cohort of four patients that we’ve currently unblended. Givosiran resulted in the 63% to 94% decrease in the porphyria attack rate compared with each patients’ own attack rate during the run-in period exceeding the change in attack rate reported for the single placebo patient which were (inaudible) form of placebo effect.

Overall we believe this is an encouraging overall treatment effect. To highlight these results further, lets’ turn to the right of the slide that shows an example of givosarin’s effect on a recurrent attack patient. Here during the run-in period this patient eight porphyria attack indicated by the blue circle with each attack occurring about 70 days apart.

You can also see the fluctuations in ALA and PBG levels which spiked during each attack. Following a (inaudible) subcutaneous injection of 2.5 mg/kg givosarin on day zero, you can immediately appreciate the givosarin result in the clamp reduction in ALA and PBG levels and a dramatic halting of porphyria attack, a result we hope to achieve in many more patients with further testing and dose escalation.

Our plan is to now complete dosing of additional (inaudible). We expect to present the next tranche of data at the International Congress on the Porphyrins and Porphyrias or ICPP at meeting we held in Bordeaux, France in late June pending abstract acceptance. We’ll also be rolling patients to givosarin early study, where we’ll generate long term data on efficacy and safety.

Now based on these encouraging results we’ve reported today, we are committed to advance givosarin to the market as quickly as possible. And with our global rights for givosarin, we’ll enter rapidly generate data to support approval in countries around the world so that we can serve the greatest number of patients.

The effects of our Phase 3 trial in late 2017 and pending formal discussions with regulators, we plan for a small six to nine months placebo controlled study using annualized attack rate as the primary end point, which we believe could be sufficient from an efficacy perspective to support approval.

Let’s now turn to inclisiran, our investigational RNAi therapeutic targeting PCSK9 has been developed in collaboration with our partners with The Medicines Company. Initial data were presented at the AHA in November in the 501 page ORION-1 Phase 2 trial where inclisiran demonstrated an encouraging safety profile and a 52% lowering of LDL with a once quarterly dosing regimen as highlighted on slide 15.

And with this type of profile, we believe that inclisiran could emerge as the best-in-class PCSK9 agent. More recently Medicines Company put out a topline release from the complete day 180 results confirming that inclisiran safety profile remains encouraging and that the clinical activity continues to support a once quarterly or bi-annual based regimen. Moreover as John noted, the recently full year outcomes data for Repatha confirm the transformational potential for antitrypsin kind of therapies, one of the important scientific (inaudible) of discoveries of modern medicine.

Finally, we also continue to make progress in our other global programs including ALN-CC5 to complement-mediated disorders ALN-GO1 for primary hyperoxaluria and ALN-HDV for chronic HDV infection. We look forward to sharing those data from these programs during the course of 2017.

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

Mike Mason

Thanks Akshay. I will referring to slide 18 for a discussion of our fourth quarter 2016 financial results. We maintained a solid balance sheet ending 2016 with approximately 1.09 billion in cash, cash equivalent, marketable securities and restrictive investments. Our GAAP revenues for the fourth quarter of 2016 was 17.5 million as compared to 7.6 million in the fourth quarter of 2015. GAAP revenues this quarter included 14.8 million from our alliance with Sanofi Genzyme, 2.6 million relate to the alliance with The Medicines Company and 0.1 million from other sources.

We expect net revenues from collaborators to increase during 2017 as compared to 2016, due primarily to an expected increase in revenues from Sanofi Genzyme related to increased reimbursement as well as potential milestone payments under our agreements with Sanofi Genzyme and The Medicines Company which will be dependent on the progress of clinical development of fitusiran and inclisiran.

Moving to expenses, R&D expenses were 105 million in the fourth quarter 2016, as compared to 82.8 million in the fourth quarter of 2015. The increase in R&D expenses for the quarter ended December 31, 2016 as compared to the prior year was due primarily to additional clinical trials and manufacturing and external services expenses resulting from the advancement of our genetic medicine pipeline.

In addition, compensation and related expenses increased for the quarter ended December 31, 2016 as compared to the prior year period, as a result of an increase in headcount during the period as the company expands its pipeline in to later stage development.

We expect that R&D expenses will remain relatively consistent in 2017, as compared to 2016 as we continue to develop our pipeline and advance the product candidate in to later stage development. But such expenses will be variable on a quarterly basis depending on the timing of manufacturing batches, clinical trial enrollment and results, regulatory review of our product candidate and non-cash stock based compensation expenses.

G&A expenses were 27.9 million in the fourth quarter of 2016 as compared to 17.2 million in the fourth quarter 2015. G&A expenses for the quarter ended 31, 2016 as compared to the prior year period increased due primarily to an increase in compensation and related expenses and non-cash stock based compensation expenses.

During the fourth quarter of 2016, we entered a one-time non-cash stock based compensation charge for approximately $5 million related to an expense reported recorded for stock option award under the terms of our stock plan as a result of an unexpected death of an employee.

We expect that G&A expenses will increase in 2017 as we continue to grow our operations including anticipated build-out of commercial capabilities to support a potential launch for patisiran in 2018. The GAAP net loss for the first quarter of 2016 was 112.9 million as compared to a net loss of 90.7 million for the same period in the previous year.

With respect to guidance for 2017, Alnylam expected its cash, cash equivalent and marketable securities including its restrictive investment balance will be greater than 700 million at December 31, 2017.

We believe this provides Alnylam with a strong balance sheet at the end of 2017 to support development and commercial activity in 2018 and beyond.

With that I will now turn the call over to Barry. Barry?

Barry Greene

Thanks Mike. As you heard from John and Akshay, we’re looking forward to some critical data points this year, which if positive will push us ever closer to our Alnylam 2020 profile marking our transition from a late stage R&D company to a multi-product commercial organization and achieving a profile rarely seen in the bay of pharmaceutical industry.

As part of this transition, we are very focused on expanding our medical thirst, manufacturing and commercial capabilities to support the potential for multiple consecutive product launches in 2018, 2019 and 2020. These efforts include building our capabilities in United States, Canada and Western Europe for patisiran and fitusiran and thereafter growing globally with givosiran and future products.

Let’s now turn to our 2017 goals and guidance and upcoming data presentation. With our patisiran program, we announced in our press release that we plan to present complete 24 month data and additional analysis from our Phase 2 OLE study at the AAN meeting on April 26. We continue (inaudible) patients in our APOLLO Phase 3 study and look forward to reporting top line data from the study in mid-2017. With more complete data in late 2017.

Assuming these data are positive we expect APOLLO will enable possible NDA and MAA filings at year end putting us in the position assuming regulatory approval to launch our first commercial product in 2018.

With fitusiran, we expect to initiate the ATLAS Phase 3 program in early 2017. We also plan to present additional data from the Phase 2 OLE study of fitusiran in mid-2017 likely at the ISTH meeting in July and then again later this year.

Turning to givosiran, we look forward to presenting additional data from Part C of the Phase 1 trial a recurrent portfolio of attack patients in mid-2017 likely at the ICPP meeting in June. Now as Akshay mentioned, we plan to rapidly advance this program in to a Phase 3 trial, which we expect to start in late 2017.

Regarding inclisiran, our partners at the Medicines Company will be presenting complete follow-up data for all 501 patients in the ORION 1 Phase 2 study at the ACC meeting in March. They also initiated two trials over this year. The ORION 2 study in patients with homozygous familial hypercholesterolemia and the ORION 3, a Phase 2 open label extensive study for Repatha an active competitor. They have guided that they plan to initiate a Phase 3 study in patients with ASCVD in mid-2017.

We also expect to advance additional programs from our early and mid-stage pipeline and to report additional clinical data for these programs throughout the year. Finally, as Mike said, we expect to end 2017 with greater than 700 million in cash.

With that, I’ll now turn the call back to Christine to coordinate our Q&A. Christine.

Christine Lindenboom

Thanks Barry. Operator, we will now open the call for questions. As a reminder to those dialed in, we would like to ask you to limit your questions to two each.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from Alan Carr from Needham & Company. Your line is open.

Alan Carr

Thanks for taking my questions; a couple of them, one of them is when are you going to elaborate a bit more on your progress here in terms of starting out safety with revusarin. It sounds like you’re literally confident that it’s not drug related and I was hoping if you could expand on that a bit. And then also I can appreciate your focus on the three late stage program moving in to Phase 3. Is there any sort of strategy shift here or does this come at the expense of the rest of your pipeline and then wonder if you could sort of talk a bit about HPV what we might expect from that program this year thanks.

John Maraganore

Let me start on the revusarin side, and just say look, we’re in the middle of an ongoing evaluation of the safety results. So I think it would be premature to make any firm conclusions one way or the other. We have taken note and we have disclosed obviously that the mortality events were concentrated in the most advanced patients.

I think that does give us a sense that - and that there is no evidence of a broader cardio toxicity at this point based on the data review. So I think that does suggest the potential that there might have been imbalance in how patients were enrolled in the study. But I think it’s pretty immature to make the conclusion definitively at this time.

So as this investigation goes on, we’ll obviously report more and we look forward to doing that in a very transparent manner. Akshay anything you want to add to that?

Akshay Vaishnaw

No, no I think you covered it all.

John Maraganore

Yeah, so that’s good. And then your other question a very good one, strategically is how are we looking our pipeline investments in 2017. Alan we’ve got a really big year here. First, pivotal data readout, first NDA submission, MAA submission, plus obviously the big part of the feast for 2017, and we have three additional programs that are going in to Phase 3. Even though Medicines Company is driving inclisiran we are working very closely with them to help them and facilitate that.

So we have a lot of heavy lifting and we’ve made the portfolio decision to basically make sure that we’re maximizing our focused investment in those efforts, the patisiran, fitusiran, givosiran and supporting Med Co on inclisiran while we continue our other programs, but with less guidance around the specific events there because it’s less in our view less important for investors to have that type of hyper granularity.

And that’s how we’ve decided to make that shift really back at our R&D day in December of last year. Specifically on HPV there’s no formal guidance that we’re giving on the program, but we certainly will be reporting data in course of the year, I fully suspect and hopefully we’ll be able report surface management in patients. But we don’t make any commitment to that at this point in time, as those programs are advancing.

Akshay anything else to add.

Akshay Vaishnaw

No, no I think you covered it.

Operator

Our next question comes from Ritu Baral from Cowen & Company. Your line is open.

Ritu Baral

My first question is on the upcoming APOLLO data mid-year. Obviously you’re going to topline the mNIS plus 7 data, but what do you guys see as the key secondary end point that will drive reimbursement, patient experience etcetera and what is on the table for potentially secondary endpoint wise revealing with the top line?

John Maraganore

Let me have Akshay and Barry answer the question from both a regulatory and commercial perspective. Let me just start by saying, we haven’t shaped and farmed what our topline will look like, but I would imagine that we will obviously report a key value for the primary endpoint and we’ll provide some color on safety and secondary end points, not any details but maybe numerically how many have been hit or didn’t hit.

We all have example of best practice in topline reports and we’re going to look to be a best practice type topline report along those lines. So with that let me turn it first to Akshay to comment on from a regulatory and patient impact standpoint, the secondary end points and then may be Barry from a value perspective. So Akshay?

Akshay Vaishnaw

Yeah, I think from the view point of clinical benefit beyond the M&S plus 7, some of the key outputs we’ll be looking at in the secondary really to include a quality of life index, the Norfolk Quality of Life index that’s validated in to amyloidosis for polyneuropathy. We’ll also be looking at key component for the NIS index, NIS-weakness which is the loss of gaining muscle strength that will have occurred in the study will be a point of interest.

Walking obviously is an inform activity of daily living and the 10 meter walk test is part of the secondary and then there are other features such as the (inaudible) which is the composite assessing autonomic dysfunction. So this constellation of outcomes should be very important to build a full picture of just how the patients are benefiting and based on the Phase 2 early data we imagine that the (inaudible) for sudden change will translate to important changes in these other industries. Barry?

Barry Greene

That’s a repeat of the endpoints that Akshay talked about. From reimbursability perspective it will depend heavily on the APOLLO data actually are. If the APOLLO data are relatively similar to the open label extension data that we’re seeing, in fact we’re stabilizing disease and often improving in certain patients.

We’re pretty confident that the body of data mNIS plus 7, the activities of daily living and all the measures we’ve built in the Phase 3 assuming those positive data will result in an incredibly enthusiastic global value dossier which will have ready to submit soon after we have the more detailed APOLLO data analyzed.

John Maraganore

Does that answer your question Ritu?

Ritu Baral

Yeah, it does, especially it will - I think it will give us what we need to ramp back when the data is revealed. My second question has to do with the data presented at EAHAD recently, specifically the slide deck that you have on Capella on the bleed events. Looking at slide 4 and 5 of your EAHAD presentation, just noting that when you look at the inhibitor patients and the once that have taken either (inaudible) or Factor VII, I’m wondering if there was any specific rationale or direction or directive in the protocol to use a lower dose (inaudible) or and/or similar dose of number VII and how you are sort of looking at co-administration of that in your Phase 3 program going forward at this point, any new thoughts?

John Maraganore

Those are great questions. Akshay do you want to handle that?

Akshay Vaishnaw

Yeah, clearly the earlier experience in the study have taught us that patients after Antithrombin knock down require significantly lower doses of replacement factor to stop any bleeds that may occur. And so with that knowledge patients both in the non-inhibitor and inhibitor segments receive the replacement factor of bypassing agent whatever lower dose and indeed that’s been very effective in controlling any breakthrough bleeds or bleeds that may occur particularly during the onset period just when anti-thrombin is going down to its fullest extent.

And that knowledge has been used and discussed with key opinion leaders further and will have specific language around the use of both replacement factors and bypassing agent in the Phase 3 protocols. But as evidenced from the data currently, it looks like we can support the usage of the replacement factor and bypass agents with safety and achieve human spaces during the (inaudible) period before peak Antithrombin knock down.

John Maraganore

Yeah, obviously this is an area of great interest in light of the adverse events noted for emicizumab. So we are quite pleased with our experience to date in achieving effective hemostasis in these patients when they have a breakthrough bleed with any of the agents that are at their disposal. So that’s very encouraging.

Ritu Baral

Got it. And are there any thought to sort of balancing that lower dose with the number of injections? Again on slide 6 you see that there were a number of patients that required three injection, although it looked that they were getting low doses. Was that per clinician judgment in the Phase 1, 2 and will it be more strictly defined in Phase 3?

John Maraganore

So patients are used to govern their own treatment when it comes to bleed and so generally speaking these were patient determined repeat injections. And what we are finding is that patients are requiring both lower doses of replacement in fact all bypassing agent and few rejection relative to what they were used to in the past. And so that again is the impact of the load antithrombin. So in essence when patients do have a bleed during that offset period or maybe rarely during the stable period of (inaudible) those effects were staring effect on the need for bipartisan or replacement factor.

Operator

Our next question comes from David Lebowitz from Morgan Stanley. Your line is open.

David Lebowitz

A quick question on the APOLLO trial, what cardio endpoints might you be looking at in patients with the appropriate mutations and how are those endpoints compared with what have been used in the ENDEAVOR trial?

Akshay Vaishnaw

The primary or the co-primary in the ENDEAVOR (inaudible) takes them at (inaudible) business. That endpoint specifically is not incorporated in the APOLLO, so however a 10 meter walk is another measure of walking capacity is incorporated as are other key cardiac endpoints commented both by including biomarkers such as BNP and Troponin and a series of echocardiography measures. So I think it’s a comprehensive analysis and it’s based certainly on the encouraging Phase 2 open label extension finding with patisiran study.

Currently we see I believe stabilization of cardiac disease in some sort of patient that have cardiac disease there, and we look forward to uncovering the APOLLO findings later in the year.

David Lebowitz

And just a quick financial question, how should we look at R&D and SG&A expenses going forward in 2017?

Mike Mason

So from an R&D expense perspective we plan that expenses will be relatively consistent in 2017 as 2016 was and for G&A with the plan build out from the commercial function with the expected launch of patisiran in 2018, we expect an increase in expenses in G&A in 2017 as compared to ’16.

Operator

Our next question comes from Mike King from JMP Securities. Your line is open.

Mike King

Two just brief ones, wondering will we get an update at some point this year from the givosiran open-label trial or study?

John Maraganore

Yeah Mike, absolutely. Nothing formally planned at this point. At the ICPP meeting we’ll certainly have additional cohorts unblinded from the Part C part of the study. And while we haven’t yet crafted the presentation, I am sure that there will be open label data that will roll in to that presentation. And then I wouldn’t be surprised if our clinicians and scientists are keen to another presentation towards the end of the year and so I’m sure we’ll have one there. But that’s not part of any formal guidance at this point. The key next meeting is indeed in June at ICPP and we’ll present everything we got in the usual Alnylam transparent fashion. And that will probably include patients from cohort 1 that have been in the open label study. Do you agree with that Akshay?

Akshay Vaishnaw

Yeah, that’s right.

John Maraganore

He’s nodding his head.

Mike King

Anything from the natural history study in ’17? Let me part of it.

John Maraganore

Let me look to my colleagues here, do we submit then abstract unexplored.

Mike Mason

I don’t believe we have ICPP. I think the next to go for the natural study Mike frankly is (inaudible) findings and publish them because we have a comprehensive (inaudible).

Mike King

And second question I really would ask this kind of question throughout the course of my career. But I just can’t help but notice that if you look Alnylam’s stock behavior relative to Medicines Company over the past 30 days, Medicines is up 31% and Alnylam is down about 7%, 6.5%. I’m just wondering what are we missing, we as analyst and investors, because if you think rational thought process predominates, you will at least get your share of the your economic interest in inclisiran in terms of your stock movement, but that doesn’t appear to have been the case. So I’m just looking for a little help from you guys on that front.

John Maraganore

I unfortunately for the first time in my career can say I have nothing I can say. Yeah Mike obviously it doesn’t make any sense does it. But we’re really happy for presence in the Medicines Company. The inclisiran story is really exciting and what a wonderful outcome for patients with [4:EA]. And frankly for Medicine and genetics and the pursuit of science and (inaudible), what a wonderful outcome.

Mike King

My hats off to you guys for recognizing the target so far in advance of everyone else, and it looks like the injunction is going to stay against for Generon. So just one less player in the market place. So congrats on that.

Operator

Our next question comes from Gena Wang from Jefferies. Your line is open.

Gena Wang

The first one is regarding the timing for revusiran ENDEAVOR data. Just wondering would that be before APOLLO readout?

John Maraganore

Yes Gena, we haven’t yet formally decided where and when, but I think that we probably will have that update sometimes prior to APOLLO read-out. So that is likely going to be the case. But we haven’t yet decided when and where. But it will be happening and likely before APOLLO readout.

Gena Wang

And want to know the owners will have their FAT data ahead of APOLLO data, so just wondering how do you see the [owners] data read through to the APOLLO data?

John Maraganore

That’s a great question Gena. Let me make some comments so there maybe barrier of either one and (inaudible) as well. Obviously we do think that the Ionis program will be positive. We believe that based on TTR knock down there’s reason to believe that it will be. But it does have a shorter end point and they do have a smaller sample size considerably smaller sample size that ours.

And as a result you can just do the math and assume the same potential discontinuation rate between the two drugs then they have to hit a much bigger treatment effect close to 50% with their product versus our treatment effect that can be achieved or P value that can be achieved with as little as a 33% treatment effect.

So they do have a higher bar that they have to hit. And then on top of it they have co-primary endpoints for both the mNIS plus 7 and also with quality of life, and that’s a bit of higher bar yet still. So I think they will be positive, we believe they will be positive, but it is possible that they are border line trending not P less than 0.5 and obviously from a commercial perspective that would be better for us. But we are assuming that will be positive and all of our commercial work is prepared with the expectation that they will be in the market along with us.

Barry do you want to or Yvonne, anything to add?

Barry Greene

I think you summed it up. The only thing that I will emphasize is that we are counting on them being positive in the market and we’re planning for that. But as John said, there is a chance just due to math that they don’t hit statistics and we don’t think that’s a good read through for APOLLO. We think we’ve got a very robust study that’s well powered with a drug that has better (inaudible) if that matters for a very good [rehab] at APOLLO.

Gena Wang

If I may just squeeze in one quick question for interim (inaudible) hemophilia. Could you share with us your powering assumption for this (inaudible).

John Maraganore

Let us do that when we initiate the study and present the detailed design, because as we’ve aligned on the final matters here with your regulators, we don’t want to put something out that might change a little bit. So lets’ just wait Gena on that question, but it’s a very important question.

I think it’s fair to say just to provide some color, the studies are going to be way, way over powered for efficacy based on the annualized bleed rate and they are really powered for the purposes of safety.

Barry Greene

And that’s in keeping with the hemophilia landscape --.

Operator

Our next question comes from Geoff Meacham from Barclays. Your line is open.

Unidentified Analyst

This is Evan on for Geoff. Thanks for taking the question and congrats on the progress. So just one on the C35 program, I noticed that you indicated that Sanofi Genzyme has elected not to opt in to development. Can you just kind of give me any color so why they decided that and what your plans are to take that forward as a standalone?

John Maraganore

Well I think in general I think our colleagues over at Sanofi Genzyme continue to be very excited about the pipeline and where we are going. But they also have to realistic about the opportunities for their products and the rest of the world where they in some cases are - is just where they have their rights. So with C35 their only available territory for the agreement is rest of the world. And I think as they looked at that that rest of the world opportunity in line of other portfolio opportunities they have elected to not pursue that.

So its fair decision, frankly we enjoy that outcome because it means that we retain global right for the asset and we end up having the opportunity of pursuing the global development and commercialization of the program which is our plan. And that becomes more valuable to us and it gets along with givosiran where we also have global rights becomes the foundations for Alnylam extending beyond our immediate commercial territories in North America and Western Europe. And that’s a great way to build a business in a way that we think will be very exciting for us in the future.

Unidentified Analyst

And how are plans regarding the development of C35 changed at all in to the timeline. So I guess what are next steps in that program now that you’re going at it alone?

Yvonne Greenstreet

Reviewing our own (inaudible) and we’ll be progressing C35 in to clinical development it has to be basically this year.

Unidentified Analyst

Then just with the recent data that Amgen top lined. Does that change your thoughts with ORION. I know you had mentioned it prior on the call, but any other additional color as to how we can think about our Phase 3 trial design or what we should be looking, any updates with the on (inaudible) program.

John Maraganore

Well we happen to have an alliance dinner with the Medicines Company on Thursday night when the data broke and Friday we had a whole day meeting with our friends at the Medicines Company where we reviewed the full ORION results. And I think we’re all quite pleased with Amgen’s kind timing of their press release. And we’re beginning to think that through. But it’s really the Medicine Company’s program to really mark this out.

I know and you could obviously expect that the (inaudible) data impact are taking quite a bit and that will be reflected in how they advance the opportunity in the ASCVD indication.

Operator

Our next question comes from Christopher James from Christopher James from Ladenburg Thalmann. Your line is open.

Christopher James

How should we think about the baseline demographics in cardiac characteristics? Patients in APOLLO and basically comment may as well to that of ENDEAVOR?

Akshay Vaishnaw

So Chris the APOLLO population just to summarize about 53% of the portfolio have neuropathy, but last 53% of them have kind of (inaudible) baseline and that’s been documented. They have essentially neo consultation one or two stages, one or two (inaudible) and the big different there between that and the walking capacity in ENDEAVOR is that in ENDEAVOR they had a much lower walking capacity and there are significantly more new consultations plus three patients which there aren’t any in APOLLO extensively.

So we do have a significant number of patients with (inaudible) cardiac and hepatic phenotype, but they generally have a milder degree of cardiac severity but still a significant burden.

Christopher James

Any recombinant meds?

Akshay Vaishnaw

We’re blinded as you know in APOLLO, but we see the full range of (inaudible) that you’d expect to see in patients with cardiac disease just as we had seen in revusiran. So that’s about as much as I can say right now.

Operator

Our next question comes from Madhu Kumar from Chardan. Your line is open.

Madhu Kumar

My first question is for [revusiran] I’m sure you guys are appreciating it’s a unique drug in hemophilia, how did it (inaudible) after both hemophilia A and B. So how do you guys consider the towering of patients with each disease sort of necessary to demonstrate efficacy for both diseases. And my question is on ALN-TTRsc02. So thinking about that drug in relation to APOLLO, how do you talk about future clinical development in terms of trial design and timing in a post-APOLLO world?

John Maraganore

Why don’t we have the first question go to Akshay and may be Yvonne you can handle the TTRsc02 question subsequently? So Akshay?

Akshay Vaishnaw

Yeah as far as (inaudible) is concerned model, when it comes to efficacy in hemophilia sadly the signal is high because these patients have a lot of bleed and so they may go on drug either without drug or previously as a replacement factor. So generally tend to get a very strong treatment effect and so its relatively straight forward statistically showing efficacy in terms of changes in ADR and even in a study with mix genotype or both hemophilia A and B patients within the study will be able to cut the data overall looking at a whole population as well as the individual subset and to show statistically significant evidence of clinical efficacy.

So I think we feel pretty good about that and so John really a comment, the issue is hemophilia study is always not so much about showing clinical efficacy from a statistical sense, but how big does the database have to be in terms of sufficient safety being demonstrated in a sufficient number of individuals long enough. And there of course as I mentioned in our comments, we’re engaged with discussion with regulators that are maturing now and we look forward starting the Phase 3 study.

But I think the final size of the package will be determined by safety consideration as opposed to efficacy.

Yvonne Greenstreet

Yeah, we are very (inaudible) with the emerging group on sc02. We are looking at probably a 50 milligram dose (inaudible). Incentive next step we really have to (inaudible) out of APOLLO before we can finalize what the study design might look like and clearly align with regulators before moving forward. So it really is a first APOLLO consideration.

Barry Greene

The only I’d add is that we’ve also - we feel it’s come to appreciate in the 7-8 years we’ve been working on hereditary TTR. That’s just is one continuum of disease and not multiply different diseases. So we may have an opportunity with ALN-TTRsc02 to understand the continuum disease there and may have a broader opportunity there as well.

Operator

Our next question comes from Alethia Young from Credit Suisse. Your line is open.

Alethia Young

How do you think statistically about like handling the dropout in the APOLLO trial and then I’ve a follow-up.

Akshay Vaishnaw

There are prescribed ways to handle dropouts and have influence the primary endpoint at the end of the day. Our statistician are working closely with the agency to make sure we have concordance with the approach. We’re going to be very conservative, but we know already from the overall dropout rate that compared to prior study for SAP with those other agents, we’re comfortable that we have a drug that’s included here as a drug and we’re comfortable with the drop-out rate. But I don’t think that should be a major factor for us with the current [pace].

John Maraganore

I’ll just also add, it’s not directly related to it, but it’s another important point, which is that we’ve had very strong numbers of patients that have gone from the study in to the open label study after they complete a few months of dosing and that’s been very encouraging as well as it relates to the overall story.

Alethia Young

So maybe just one more, I think someone before me asked a little bit about the (inaudible) landscape for patisiran, but may be could you talk about how many of these patients look like pure fat patient do you think are kind of like in a diagnose pool its available now and then characterize that versus like where you think you need to grow to get to like somewhere closer to the prevalent which maybe like 10,000 globally. But I wouldn’t expect all those patients to readily be available. So I guess I’m just trying to figure out how to frame the opportunity so when the (inaudible) works, you got to have the right numbers until ’18 or 2019 and beyond.

John Maraganore

As you know the potential numbers of patients in kind of US and Western Europe is about 50,000. But hereditary TTR will work like you’ve seen many orphan diseases work. There’s a much lower number of those patients kind of in the system and our job will be assuming on a positive APOLLO to ensure that we are educating this field on earlier and earlier diagnosis and patient finding activity. So we think there has clearly been a sufficient number of patients to complete multiple Phase 3. Our trials across multiple drugs and we’ll be diligently working on ensuring that those patient finding activities are incredibly robust and lead to more and more diagnosis. It would be premature to actually name specific numbers at this point.

Yvonne Greenstreet

I think to add is our great progress of our anonymous (inaudible) program where we offer a diagnostic and I think about 900 patients or so offer (inaudible) program it’s been about15% diagnosis rate. I think it’s quite encouraging for commercial picture.

John Maraganore

I think that’s a really good point Yvonne and that’s just the beginning of that program. So it is - what obviously if and when patisiran makes it to market, the availability of the therapy will increase the interest and a program like that. And I think that will be important from the standpoint of helping the diagnosis of this disease which will help the patients which is what counts.

Operator

Our next question comes from Paul Matteis from Leerink. Your line is open.

Paul Matteis

My first one is on the revusiran safety analysis. I am wondering if you think that that - if you are planning on submitting that the FDA and do you think the FDA would want to look at that in the context of the patisiran data and how they think about labeling patisiran both with respect to may be just a neuropathy drug or a drug as a broader label.

And then secondarily I was curious if you could talk a little bit about to the extent the visibility for this, how balanced the rate of cardiac involvement is in the new ARMS, drug and placebo and APOLLO?

Akshay Vaishnaw

We’ll come back to (inaudible) here, but with respect to ENDEAVOR and findings associated with rivusarin and then knock-on effect of how the agency might interpret that with respect to the patisiran labeling. I think a few points, firstly the FDA and other regulators are very clear that drug development is a case by case type of science and so they look at each database in isolation and they will certainly want to go through patisiran very carefully in and of itself.

They have to do that because if we develop to ace inhibitors or two (inaudible) that doesn’t mean that just because X, Y, Z happen with one it’s going to happen with the other one. And if look at the labels of different drugs within a class they are not at all identical. We know that patisiran is a different (inaudible) from rivusarin so it’s a different drug substance itself. We also know that and we discussed both in the aftermath of rivusarin that the signal that we’re seeing in association with rivusarin an imbalance in cardiac mortality hasn’t been seen in the rest of the patisiran database nor the overall ALN and RNAi database.

And we know also that some of the peripheral neuropathy (inaudible) reporting the Phase 2 open label expansion study for rivusarin haven’t been fully associated with patisiran or the rest of that database of over a 1000 patients. So clearly there is no obvious evidence of platform effect of the type that may or may not have occurred in rivusarin in association with that drug in the end up of study.

So I think we feel pretty comfortable based on both scientific and also the guidance by the DMC for APOLLO that the APOLLO is really going to continue, and so I think we are really continuing to be very excited about outcomes for APOLLO later in the year, and anticipate good type of regulators around that.

Now the second part of your question.

John Maraganore

I heard it. Maybe I will answer it and you can add in. so there is not stratification for cardiac disease in APOLLO. Looks like 53% of patients have cardiac symptoms. So I would expect that the balance will be very good between the two R like the other day, but there was no stratification for those features (inaudible).

Paul Matteis

Do fat patients or patients who are primarily SAP but have cardiac involvement, do they progress more quickly or do they have shorter lifespan then their counterpart that just have neuropathy?

John Maraganore

It’s hard to generalize on that front Paul and really prognosis depends on a number of things. The mutation itself that you have is a major determinant, the age of onset, the country of origin of the patient. So if I go in to extremes V30M patients in Portugal tend to do better than V30M patients in northern Sweden or Japan. We don’t know why that’s the case but that is the case. Part of this seems to be associated with claims in cardiomyopathy from V30M patients in Japan there for example and Sweden there. There are other mutations like 268 which is just an aggressive mutation and causes are more accelerated and severe form of both neuropathy and cardiomyopathy and there are other more rarer mutation still that cause either a very severe neuropathy or cardiomyopathy.

So a lot of it seems to be mutation driven, but also the age you present at and the country where you live.

Operator

And that does conclude our question-and-answer session for today’s conference call. I would now like to turn the conference back over to John Maraganore for any closing remarks.

John Maraganore

Thanks Operator. And thanks everyone for joining us this afternoon. As I said at the beginning, 2017 is a pivotal year for our Alnylam’s transition towards a commercial stage company. We are thrilled about that and we are thrilled also about the rest of the pipeline which continues to advance building our company for the future. So with that have a good rest of the day and good evening. Bye, bye.

Operator

Ladies and gentlemen thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.

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