Ionis Pharmaceuticals, Inc. (IONS) Presents at 17th Annual Morgan Stanley Global Healthcare Conference (Transcript)

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About: Ionis Pharmaceuticals, Inc. (IONS)
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Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) 17th Annual Morgan Stanley Global Healthcare Conference Call September 10, 2019 12:20 PM ET

Company Participants

Brett Monia - CEO

Beth Hougen - CFO

Conference Call Participants

David Lebowitz - Morgan Stanley

David Lebowitz

Thank you very much for attending the Morgan Stanley Healthcare Conference. Before I get started, I'm going to go to through the requisite disclosures. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures appear on the Morgan Stanley public website at www.morganstanley.com/researchdisclosures or at the registration desk.

And, I'd like to welcome to the stage, with us from Ionis Pharmaceuticals is CEO, Brett Monia; and CFO, Beth Hougen.

Of course, Ionis is a leader in RNA medicine. And frankly, they have a very, very, broad, broad pipeline of drugs. What's the count at now?

Brett Monia

40 plus in the pipeline.

David Lebowitz

40 plus. I always lose track. And, we’re going -- I guess, if we can start, we’ll probably go through and start on the commercial side and then delve into the pipeline.

Brett Monia

Sure. Sounds great, Dave. And thanks for the invitation today. Good afternoon, everybody. If you don't mind, let me -- I will just start with a few introductory comments on Ionis. This year represents our 30th anniversary since the creation of Ionis Pharmaceuticals. And the company is doing great and the future is bright. Just over the last few years, we’ve had three drugs approved, new medicines approved, SPINRAZA, TEGSEDI and WAYLIVRA.

The pipeline continues to perform exceptionally well with as mentioned 40-plus drugs in development from all phases, Phase 3 or early development. And new Phase 3 studies have just recently been initiated, pivotal studies, and more to come this year and next, more pivotal studies are on their way.

In addition, the technology continues to advance and really perform, and opening up new areas for drug discovery for the antisense platform at Ionis through new routes of delivery, new chemistries and so on. And all of this is on the backdrop of a very strong financial position, a financial position that has allowed us to achieve profitability at the bottom line for multiple years in a row now, and this year will be no exception, and years to come. And it allows us, because we have the capital to invest in our technology, to invest in our pipeline, and bring more and more medicines to the finish line. So, we're very excited about the future of Ionis. And we're really looking forward to continuing our discussions with all of you in the future.

Question-and-Answer Session

Q - David Lebowitz

So, let's start with SPINRAZA. SPINRAZA is clearly an amazing drug. It really changed treatment for spinal muscular atrophy. And I guess, could you update us as to how the drug has been doing? Specifically, where do things stand in SMA 1, but also where do things stand in SMA 2, 3 and beyond?

Beth Hougen

Can I take that?

Brett Monia

Please.

Beth Hougen

So, I think it's important to start with remembering that SPINRAZA is one of the -- it’s probably the most successful rare disease drug launch of all time. It is -- they had -- Biogen reported $1 billion worth of sales in the first half of this year. So, it's well on track for substantial growth year-over-year. As of the first half of this year, their growth was 30% over the same period in 2018. So, a substantial growth opportunity. And the growth is going to continue. From our perspective, you can look for growth in the United States, as we look to the older patient population, the adults who are 18 years and older represent about 60% of the prevalent population in the United States. And that's the population that Biogen is particularly focused on. It's a population that they're addressing now about 20% of. And so, there's a lot of room for growth there.

Outside the United States, the growth is coming from new patients in the major markets, as well as rapid uptake in the emerging markets, particularly in Latin America and in Asia. Importantly, Biogen now believes that the prevalent population is substantially larger than what they thought initially. Initially, they were estimating somewhere in the 20,000 to 25,000 patient size. They're now estimating that that patient population is in excess of 45,000 patients worldwide. And of particular importance is the fact that Biogen has a direct presence in those markets where they see that growth and see those increased patient numbers. So, it sets us up very nicely for continuing to see SPINRAZA sales increase year-over-year into the future.

David Lebowitz

So, the market is changing a little now because there's an emergence of the gene therapy. How, I guess, do you see things changing for SPINRAZA, if at all, going forward?

Beth Hougen

So, we do -- there is a competitor on the market. The indication statement is only addressing about 5% of the prevalent population. So, we haven't seen any impact from that competition on SPINRAZA, and we don't frankly expect to see any.

One of the things that's really important to remember about SPINRAZA is that we have been able to demonstrate in thousands of patients that the longer you treat, the better; the earlier you treat, the better. SPINRAZA has an amazing profile in terms of its efficacy and its safety.

And so, for example, we know with our NURTURE data in presymptomatic SMA patients that if you treat these babies before they're symptomatic, the vast majority of them will develop like normal healthy children. And in that instance, they would never actually be indicated for the competitive products. So, we believe that the competition right now is really not a material threat to SPINRAZA, and we see opportunities for continued growth. It is the totality of the data that we’ve been able to generate over the last six, seven years that we’ve been studying and commercializing SPINRAZA that leads us to such confidence about the future.

David Lebowitz

So, gene therapy ultimately is going to be much more -- it feels it’s present more in the incident population of new diagnosis, probably -- I mean, it’s kind of hard when a new born -- to really differentiate between SMA 1s and SMA 2, when they’re first, so...

Beth Hougen

Yes.

David Lebowitz

So, if one is diagnosed with SMA, are they just going to inoculate at that point with a gene therapy or would they begin this -- could begin it with SPINRAZA at that point?

Beth Hougen

I think, that’s going to be left to be seen at this point, because it’s so early in the launch for the competitive product. But our view is that -- what we know is that in the clinical trials for gene therapy that quite a few, more than half of those patients actually went on SPINRAZA. And we believe that there’s sound reason for that. If you look at the efficacy of the competitive product, you can see a waning. And we have anecdotal evidence that that is in fact occurring. And so, SPINRAZA continues to demonstrate in all of these thousands of patients in all of these years and years of administration that the earlier you treat, the better; and the longer you treat, the better. We’ve never seen a waning effect. And we believe that that is very compelling evidence for SPINRAZA as your foundation of treatment.

David Lebowitz

And I guess, one more question on SMA, potential of an oral therapy coming on the line. How do you see that as an impact?

Beth Hougen

Should I take that one Brett or you want to?

Brett Monia

Sure, I’m happy to. So, the other potential competition for SPINRAZA are the small-molecule splicing modulators like risdiplam. As Beth mentioned, SPINRAZA sets a very high bar for all forms of any modality to treat spinal muscular atrophy. For all the reasons Beth went into, it’s the foundational medicine for all forms of SMA. So, the bar is high. We like our mechanism better. The mechanism by which SPINRAZA works is the epitome of precision medicine. It targets only the defective gene and it corrects the gene. Small molecules that affects splicing are much more broadly acting. They are far less selective than antisense medicine like SPINRAZA.

So, there’s not only a long road to go, a very high bar for efficacy, it’s also going to be a long road to demonstrate long-term safety from a less selective mechanism of action compared to SPINRAZA. So, it’s early days. It’s hard to comment on the performance of other medicines when there’s so little data that’s been actually presented. But again, I think, we have many advantages and we have a very large, long head start with SPINRAZA.

David Lebowitz

So, let’s move on to TEGSEDI. How is the launch going?

Beth Hougen

It’s going well. I always try to remind people, we just finished our second full quarter of the launch in both the U.S. and Europe. So, it’s still very early days. But with that said, there are some important points to take away. First of all, we saw substantial growth quarter-over-quarter in revenues. We saw substantial growth in new prescriptions quarter-over-quarter. We’re seeing prescriptions being written by both -- by all of cardiologists, neurologists and hematologists. So, across the most important specialists we’re seeing prescriptions.

We've got a strong relationship with all of the payers across the country in the United States. I think that's very important. And as we continue through the launch, patient identification, disease awareness are going to be the real focus for TEGSEDI.

Outside the United States, we are now treating patients in London -- or in England rather. We have NICE approval, so we’re doing that. And we are expanding out into other countries in Europe. We have patients on TEGSEDI in Italy, Spain and Portugal. And Portugal is prioritized higher in the order of countries in Europe because of the large patient population that’s endemic to Portugal. So, there is a growth opportunity outside the United States.

We are also very excited by our partnership with PTC Therapeutics. They have filed in Brazil for TEGSEDI approval and anticipate that will be granted by the end of this year. And in Brazil, there is a very large patient population, primarily because of that Portuguese influence in Latin America. So, having -- being first-to-market in Latin America, a very large opportunity. It’s something that's very exciting to us.

David Lebowitz

So, you have a LICA follow-on for TEGSEDI in the work. And there is trials that are soon to be underway for that. Can you update us as to where things stand, and what advantages the LICA version could offer over TEGSEDI?

Brett Monia

Sue. I'll take that, Beth. So, we're very excited by the new chemical platform that you referred to, LICA, as you referred to, Dave. We have now 14, 15 drugs in development with this new chemistry that markedly improves the potency, the durability of our drugs, which allows us to dose subcutaneously once per month or even less frequently, and provides a what's been a pristine safety and tolerability record for all of these drugs in their own development. And our follow-on to TEGSEDI TTR LICA is no exception to that. We actually presented our Phase 1 data for TTR LICA last week at the Amyloid Meeting in Berlin. We're going to present the data again at the Heart Failure Meeting next week in Philadelphia. And what the Phase 1 data showed was really impressive potency, very low doses, reductions in TTR levels 90% or greater, pristine safety, tolerability with once a month dosing.

We selected our dose, and we are moving onto Phase 3, and we shared some of the results of the study design of our Phase 3 study, which we’ll be starting later this year. In fact we're planning to start two Phase 3 studies with TTR LICA, one for the polyneuropathy indication and one for the broader cardiomyopathy indication.

David Lebowitz

Now, when you look at the future market, there is already a stabilizer that's on the cardiomyopathy side and there will be two RNA players -- an antisense and an RNA player. How do you think the gene knockdown approach versus the stabilizing approach ultimately gets fit together in the marketplace? Are these the complementary therapies? Are these different populations of severity? How do we see this breaking down?

Brett Monia

Yes. It's a very good question, because it really demonstrates or it paints the landscape, which is one of, there is a lot going on in this space in TTR amyloidosis. TEGSEDI was the first medicine approved for TTR amyloidosis for all forms of hereditary polyneuropathy worldwide. And as you said, there's other RNA targeting mechanisms that are out there already on the market. Tafamidis was now approved for cardiomyopathy, wild-type and hereditary cardiomyopathy. So, it's a really shifting landscape today.

The new medicines, the TTR LICA, for example, that are coming, we believe, first of all, is complementary to the tafamidis mechanisms. They are very different mechanisms. Tafamidis is a stabilizer of the tetramer -- TTR tetramer, whereas our mechanism blocks the production of the disease causing protein. But you can imagine a scenario in which if you don't block all the production of that protein, you can stabilize the rest with a combination such as with tafamidis.

At the end of the day, we strongly believe, and I think, the data supports this conclusion, the clinical data, that the knockdown approach will be significantly more efficacious than the stabilizing approach. And it kind of makes sense. It's better to block the production of the disease causing protein than try to clean up, if you will, the protein after a disease causing protein gets made and try to stabilize it after the effect. But with that said, we're -- tafamidis was a significant advancement for TTR amyloidosis. There was no treatment for wild-type cardiomyopathy. And that's great for patients. But we think the TTR LICA will be, if not the drug of choice, it will be certainly one of the preferred drugs of choice for all forms of TTR amyloidosis eventually.

David Lebowitz

So, let's jump into the pipeline, Huntington's. You had interesting nine months data from the Phase 2 early trial. Could you run us through that data and…?

Brett Monia

Sure. Very exciting program, obviously. The cause of Huntington's disease has been known -- the genetic cause for more than 30 years now. There's never been a meaningful treatment for this disease. Our drug IONIS-HTTRx, or the RG number that Roche refers to -- if I’ve to sketch them right now, “Is a potential breakthrough” because it causes the form, the cause I should say, of Huntington's disease. It blocks the production of the Mutant Huntingtin Protein. We completed the Phase 2 study a couple of years ago, which showed durable reductions in Mutant Huntingtin Protein with excellent safety and tolerability. Those patients rolled -- and that triggered Roche to jump in and license the program and take over for -- take this drug -- the development of this drug over at that point. The patients from the Phase 2 study then rolled over into an open-label extension study where all patients are getting drug. And the data you’re referring to, Dave, is the nine months data that was -- in the open-label extension, which patients were treated for nine months in the OLE, and that data was presented at the AAN.

The objective of that study was to -- was safety, long-term safety and tolerability, which was achieved. And durable reductions in the Mutant Huntingtin Protein as measured in the cerebral spinal fluid. So, you can do a spinal tap and measure what's happening to HTT levels and we were able to show durable reductions in Mutant Huntingtin that were well below the levels necessary, based on a whole host of preclinical data that was predictive of being efficacious in humans in a longer term treatment study, which is now ongoing.

David Lebowitz

For the Phase 3 trial, the study was recently paused for a short period, while there were some dosing adjustments made. Could you run us through what adjustments were made in the study, so we understand? And I know there was data that support why you made those changes.

Brett Monia

Sure. So, our Phase 2 study was monthly dosing. Our preclinical data suggested we can get over with less dosing. Remember, our Huntington drug is administered intrathecally, so a bolus injection in the spinal cord. Based on our Phase 2 data, we showed great knockdown. And so, we started the Phase 3 study with Roche with monthly dosing. But our preclinical data suggested that we were able to get -- we are able to dose less frequently, bimonthly, or even less frequent than that.

When we started the open-label extension, we added a cohort of patients that would be treated bimonthly, in addition to monthly. And what that bimonthly data showed, as presented at the AAN, was that we’re getting excellent reductions in Mutant Huntingtin Protein with bimonthly dosing. We didn’t need to go to monthly dosing. In fact, we can even go to a quarter or a tri-annual dosing, every four months dosing, based on the open label data.

So, because the Phase 3 study had just begun, and intrathecal dosing isn’t your most routine -- route of administration, Roche decided to hold off on continuing -- on further enrollment, let’s get the study restarted with bimonthly and every four-month dosing, so that we can ease the burden on the sites and on the patients. And we’d probably even end up resulting in the study being completed potentially earlier because of the ease of burden of dosing, it’s certainly no -- there’ll be no delays in the completion of the Phase 3 study.

The other thing is that the patients that had been enrolled or initially in the Phase 3 study are continuing to be treated, right, in an open-label sort of setting. That’s a wealth of information that will continue to emerge that Roche will be able to rely on for potential future discussions with regulators.

David Lebowitz

Now, it’s administered intrathecally, it’s a disease -- certainly, it affects potential nervous system. Does the therapy effectively go up through the spinal fluid and actually get into like the brain and the central tissue?

Brett Monia

Yes, it does. We’ve shown in many different ways that when we administer an intrathecal bolus of an antisense drug, we get broad distribution to the spinal cord, in the outer layers of the brain as well as in the deep structures of the brain. We’ve shown this in preclinical models and rodent models, disease models, we’ve shown this in non-human primate studies extensively. We’ve published quite a bit of that data showing deep penetration of drug and knockdown of target in the brain. And we’ve even shown it in -- to a limited extent -- but it’s been pretty definitive results in some of our early SMA trials with SPINRAZA, where we were able to show in autopsies, in new borns that were born that unfortunately succumbed to the disease very early on, that in autopsies, it’s plenty of drug in the deep structures of the brain as well as the outer layers of the brain. And we were also able to affect the target expression in the brain as well. So, we’re very confident about the broad distribution of our drugs in the CNS.

David Lebowitz

So, let’s jump over to ALS tofersen. Could you tell us about that?

Brett Monia

Yes. This is another very exciting program from our neurodegenerative disease platform. Unlike Huntington’s disease, where there’s a single monogenic cause of the disease, the Mutant Huntingtin, there is lots of different causes of ALS, some genetic and some what they call sporadic, where the causes are not considered genetic. One of the genetic causes of ALS is due to mutations in the gene called superoxide dismutase, SOD1, superoxide dismutase 1. The mutations result in the unfolding of the protein, causing lesions and ALS. ALS of course is a rapidly progressing disease that after symptom onset death usually happens within 3 to 5 years. No significant disease modifying drugs have ever been approved for any form of ALS.

SOD1 appears to be different. Our SOD1 drug was shown in a short three months study in patients with SOD1 mutations, SOD1 ALS that after just three months, we were able to show durable reductions in mutant SOD1 protein in CSF, excellent safety. But more than that, we were able to show really striking -- generate striking evidence of efficacy on clinical endpoints, efficacy on endpoints such as respiration or rating scales that are linked to disease progression in ALS, after only three months compared to placebo. That resulted in Biogen jumping in and licensing that drug early from us, and now they’ve launched into a Phase 3 study in patients with SOD1 mutation.

The other point I want to make very briefly is that, although the current focus is on SOD1 ALS, there is evidence, scientific evidence in the literature that misfolded SOD1 could also play a role in sporadic ALS. So, this might not just be a drug for SOD1 ALS, but also potentially for even a broader population of ALS patients.

Lastly -- that's just the first of many ALS drugs to come from the Ionis platform in collaboration with Biogen. We have another drug for another genetic form of ALS, C9ORF that is in Phase 2 development now. And we're hoping to move a new drug forward, a third one for ALS for a sporadic form of ALS potentially next year.

David Lebowitz

Now, if we jump from smaller indication, let's go to APO(a), a much larger indication. Could you tell us about that? I know, you are going to be going into a Phase 3 trial pretty soon, so.

Brett Monia

Yes. That's an excellent point. The diseases we’ve talked about so far, have huge unmet medical needs and big opportunities for Ionis and our partners. But we're not just a rare disease company. We are well into very large patient populations, common diseases, if you will. And our most advanced one is for a cardiovascular indication, that's driven by a risk factor called lipoprotein(a), Lp(a). Genetically determined at birth, all of us have Lp(a) in our circulation in our blood. But if you have a very high levels of Lp(a), you're at high risk for cardiovascular disease, stroke, heart attack, so on, at a young age. And these are patients to have normal cholesterol, they are not diabetic, they're not obese, but they all have heart attacks in their 30s, 40s sometimes as a consequence of that.

What we showed in Phase 2 was that we can knock down the disease-causing Lp(a) protein in patients that had a risk of -- that have a history of cardiovascular disease, high Lp(a) levels. 98% of these patients, we were able to get them out of harm's way, in the sense that we were able to get them below the threshold for cardiovascular disease with excellent safety and tolerability. This is another LICA drug.

And this drug was then licensed by Novartis earlier this year for $150 million milestone payment that was based on an option that they paid for earlier. And now, they're preparing to launch into a CVD outcome study, in patients -- really the same patient population as the Phase 2 only with outcome endpoints now. History of cardiovascular disease, high Lp(a) levels, that Phase 3 study is starting to begin at the end of this year. And it's about 7,500 patients treated on for an amount of time that will collect some cardiovascular endpoints.

David Lebowitz

Lp(a) seems an interesting target, why hasn’t another companies really gone after?

Brett Monia

Yes. That's a very important point and a factor to remember about our platform. One of the advantages of the platform that we've invented, Ionis, is our ability to go after targets that are undruggable, if you will. Targets that are not druggable with small molecules, Lp(a) is not druggable with small molecules or antibodies, and because there are many isoforms of Lp(a) because of the genetic nature I referred to earlier, antibodies aren't very effective. And it's not very antigenic either. But with antisense, it doesn't matter. We can block it -- because we target RNA, we can block their production. So, we have the ability to go after undruggable targets. And we've done so in this case with Lp(a) and what that also means is that there's essentially no competition for this opportunity.

David Lebowitz

And we'll finish up on WAYLIVRA. You had some data in another indication, FPL. If you could just provide us an update on that data and how this might affect your plans in the U.S.?

Brett Monia

Yes. So, we're very excited about WAYLIVRA. WAYLIVRA is the third drug approved by Ionis in the last three years with -- by our company with our platform. It's approved for Familial Chylomicronemia Syndrome, FCS. But we had another study ongoing with WAYLIVRA and it was approved in Europe. We had another study ongoing in parallel with the FCS study in Familial Partial Lipodystrophy, FPL. And what we reported a few months -- or a couple months ago was very positive data. We were able to reduce -- this is patients that are affected with very, very high triglycerides and poor distribution of adiposity.

What we were able to show was that we were able to get triglyceride levels substantially down in these patients and reduce the amount of liver fat in their livers, the amount of fat in their livers, triglycerides in their livers, highly statistically significant.

We are now working with regulators, the FDA specifically to get potentially WAYLIVRA approved in the United States in the near future. Those discussions are going, I would say have been very productive. They're doing quite well from our standpoint. We have a lot more data. We have the approval of WAYLIVRA in Europe. We have a lot more data from our expanded access programs. And now, to your point, Dave, we have the FPL data. We have the FPL data, which is more and more patients showing safety, more and more patients showing benefit of triglyceride lowering and thus increasing our overall experience with WAYLIVRA. So, we think it'll help. We think it'll help with the potential approval in the United States.

David Lebowitz

What does the agency ultimately want to see?

Brett Monia

Well, I think ultimately, what they want to see is more data, so -- what they always want to see. They want to see more data, and I think we have it. We have it in areas I mentioned, the expanded access program, the FPL data. And specifically, I think, they want to see more data with respect to different -- looking at different dosing regimens and sustained reductions in triglycerides over the long haul.

David Lebowitz

Thank you very much for coming.

Brett Monia

Thank you, Dave.

Beth Hougen

Thank you.