Alnylam Pharmaceuticals Inc (ALNY) 2015 Q4 法說會逐字稿

Ladies and gentlemen thank you for standing by. Welcome to the Alnylam Pharmaceuticals conference call to discuss fourth quarter and year end 2015 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.

Good afternoon. I'm Christine Lindenboom, Vice President of Investor Relations and Corporate Communications at Alnylam. With me todayare John Maraganore, Chief Executive Officer, Barry Greene, President and Chief Operating Officer, Akshay Vaishnaw, Executive Vice President ofR&D and Chief Medical Officer; and Mike Mason, Vice President of Finance and Treasurer. In addition DA Gros, Senior Vice President and Chief Business Officer is in the room and available for Q&A. For those of you participating via conference call, theslides are available via webcast, and can also be accessed by going to the Investor page our website, www.Alnylam.com.

During today's call, as outlined on slide two, John will provide some introductory remarks and provide general context for some of our recent progress and activities. Akshay will summarize recent clinical results and pipeline progress, Mike will review financials and guidance, and Barry will provide a brief summary of goals for 2016 and beyond, before we open the call to your questions.

I would like to remind you that this call contains remarks concerning Alnylam's future expectations, plans, and prospects, which constituteforward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. Actual results maydiffer materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in our most recent quarterly reports on file with the SEC. In addition any forward-looking statements represent our views only as of the date of this recording, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. With that, I would like to turn the call over to John.

Thanks Christine, and thanks everyone for joining us this afternoon. During the fourth quarter 2015 and the recent period, we made excellent progress as we continue to execute on our Alnylam 2020 strategy, and advance investigational RNAi therapeutics to patients, and upon their approval, to the market. Before it Akshay goes into our recent pipeline progress in more detail, I would like to provide some context. First, I would like to make a few comments on the broader equities market and the biotech sector in particular. Despite recent market performance, we believe the fundamentals of our industry are as strong as ever.

These fundamentals are built on several components. A deeper understanding of human biology which is delivering highly innovative drugs, that are significantly improving patients lives. The receptive and productive regulatory environment, including a record setting year for NMEs approved by the FDA in 2015, more than in any of the past 15 years, as well as the emergence of new expedited approval pathways, like breakthrough therapy designations, and then an industry that is focused on novel and highly transformative not incremental therapies. The recent sell off in the sector has little to with our innovation ecosystem, and we firmly believe that biotech remains one of the most attractive sectors in the overall stock market, based on its strong potential for many years to come.

As for Alnylam, we believe our fundamentals have never been stronger. We remain focused on developing medicines that have the potential to be transformational for patients, and believe we are well on track to achieve our Alnylam 2020 goals, having just ended 2015 with eight programs in the clinic, two in Phase III, and six programs that have advanced to the point where we have established human proof of concept. The recent completion of APOLLO enrollment for Patisiran puts us firmly on track for our first Phase 3 data readout, and assuming that the data are positive, our first regulatory filings in 2017. As we end 2016, we anticipate having a profile of 11 programs in the clinic, three in Phase III, and nine programs with established human proof of concept. We believe the goals outlined earlier this year for 2015 of 10 or more anticipated major clinical data readouts, the start of Patisiran Phase 3 trials, and three new IND filings that are planned, are an important stepping stone on the path to Alnylam 2020, where we intend to be a multiproduct commercial stage company, with a robust and sustainable pipeline, across our three strategic therapeutic areas, or STArs, mainly genetic medicines, Cardio-Metabolic disease, and Hepatic Infectious disease, diseases that span the rare to the common, and to the global. Not surprisingly then, we could not be more excited about our prospects going forward.

So with those introductory comments, I would like to now turn the call over to Akshay to review our pipeline progress. Akshay.

Thanks John. Good afternoon everyone. We continue to make great progress with our pipeline on investigational RNAi therapeutics. Let me begin with our programs in our genetic medicines STAr, and start with our investigational line of RNAi therapeutic for the treatment of TTR amyloidosis, or ATTR amyloidosis. As you know, we have three product candidates in this area. Patisiran is our lead program, aimed at the treatment of ATTR patients with familial Amyloidotic poly neuropathy, or FAP. As John mentioned, we just completed enrollment in the APOLLO study, and reiterated our previous guidance that we expect to report data from APOLLO in 2017. Due to the competitiveness of this timing, the Ionis GSK program, we are not planning to perform an interim analysis for efficacy. If APOLLO is positive the Company expects to submit an NDA and MAA for Patisiran based on an analysis of the full APOLLO data set in late 2017. As a reminder the APOLLO Phase 3 trial is a randomized double-blind placebo controlled global study, designed to evaluate the efficacy and safety of Patisiran in patients with FAP. The primary endpoint of the study is the difference in the change in a modified neuropathy impairment score, or mNIS+7, from baseline to 18 months between Patisiran and placebo. The study was significantly over enrolled, with a total of 225 FAP patients with Stage 1 or Stage 2 disease, compared to the originally enrollment target of 200.

All patients completing the APOLLO Phase 3 study are eligible to enroll in the ongoing APOLLO Phase 3 open label extension study, APOLLO OLE. Also during the recent period positive initial 18 month clinical data were reported from 20 patients in the Phase 2 open label extension, or OLE study, which showed continued evidence or potential halting of peripheral neuropathy progression. Patisiran was also found to be well tolerated after nearly two years of drug administration. As we announced today, we plan to present complete 18 month data from all 27 patients in the Patisiran OLE trial in a oral presentation on April 20 at the American Academy of Neurology Meeting in Vancouver Canada. As you are aware, ATTR amyloidosis, including FAP is a generally fatal orphan disease, with limited treatment options. We believe data reported today in our clinical studies provide encouraging preliminary evidence for Patisiran's clinical activity and tolerability, while definitive evidence to support registration, awaits the results from our randomized placebo controlled study APOLLO.

Let me now turn to Revusiran, our most advanced subcutaneously administered investigational RNAi therapeutic in the clinic today. And which is being evaluated for the treatment of ATTR amyloidosis patients with familial amyloidotic cardiomyopathy, or FAC. As a reminder, we are currently conducting a Phase 2 early study in which TTR cardiomyopathy patients who participated in our Phase 2 trial, were eligible to roll over into the early study and receive Revusiran on an ongoing basis. In this early study, reevaluating the safety and tolerability of long term dosing with Revusiran for up to two years, and also measuring effects of treatment on a number of clinical endpoints, including mortality, hospitalization, and 6-minute walk distance, in addition to cardiac biomarkers.

Initial 6-month data reported in the recent period from the Phase 2 early study, showed sustained TTR knockdown, representing the longest dosing experience to date for target gene knockdown with GalNAc-siRNA conjugate. In the majority of patients in the early study, Revusiran was generally well tolerated out 10 months of administration through the data cutoff date. Based on the six months data, it is premature to make any conclusions related to effects on clinical endpoints, so we will need to see the results at four months, and ultimately results from our placebo controlled study. We expect to present initial 12 month data in mid-2016. Revusiran is also in a Phase 3 trial called ENDEAVOR, this is a randomized double-blind placebo controlled study where we are looking at two co-primary endpoints of the drug versus placebo measured at 18 months.

One being the change in 6-minute walk distance, and the other being reduction in serum TTR. Based on encouraging enrollment in 2015, we recently announced that we anticipate presenting data from ENDEAVOUR in 2018. Finally with our TTR programs, we soon expect to file a Clinical Trial Application for ALN TTRsc02, an ESC GalNAc-siRNA conjugate, targeting TTR. Based upon the emerging profile of this candidate we expect it to support a once quarterly subcutaneous dose regiment. We are moving fast on our development of TTRsc02, and plan to report initial clinical data later this year, and start Phase 3 studies in 2017. Our advancement of TTRsc02 represents our commitment to bring the best innovations to patients who would believe that TTRsc02 has the potential to emerge as the Best-in-Class approach for all ATTR related syndromes.

I would like to move on to discuss the latest progress with fitusiran, formerly called ALN-AT3, which is an RNAi therapeutic targeting antithrombin, in development for the treatment of hemophilia and rare bleeding disorders. We view this as a very exciting and innovative program designed to lower levels of AT, with the goal of sufficient thrombin generation to restore hemostasis, thereby preventing bleeding in patients with hemophilia. At the ASH conference in December, we reported positive interim results from our ongoing Phase I trial. Specifically in a study with 24 patients with moderate or severe hemophilia A or B, our new interim clinical data demonstrates that a subcutaneous administration of fitusiran achieved potent and dose dependent lowering of AT of up to 88%. Furthermore AT lowering was associated with statistically significant and clinically meaningful increases in thrombin generation, and decreases in bleeding frequency in patients with hemophilia. In particular fitusiran administration resulted in up to 85% to 92% reduction in median estimated annualized bleeding rates, or ABR. While exploratory and only in a limited number of patients, the reduction in the median estimated ABR resulted in bleeding rates that are comparable to those reported in the literature for prophylactic intravenous infusions of replacement factors or bypass agents in patients with hemophilia. We also reported that fitusiran was generally well tolerated, including no clinically significant increases in D-Dimer, a biomarker of excess clot formation. We are also encouraged by the overall safety results we reported that include patients with an aggregate of over 300 days of exposure, at levels of AT lowering greater than 75%. Patients are continuing dosing in our Phase 1 open label extension study of fitusiran, and we expect to present data from that study on an ongoing basis, at least once per year beginning in 2016. In addition we expect to start our fitusiran Phase 3 program in hemophilia A and B, including patients with inhibitors and without inhibitors in mid and late 2016. We have also enrolled additional hemophilia patients into the Phase I study, where we are administering fixed non weight adjusted doses of fitusiran. Furthermore we expect soon to start enrolling inhibitor patients into the ongoing Phase I study. Finally, we are pleased to announce our partner Sanofi-Genzyme elected to opt-in to the fitusiran program, for the development and commercialization of this drug outside of North America and western Europe. Let me turn to recent progress with ALN-CC5, subcutaneously administered RNAi therapeutic targeting complement component C5, for the treatment of complement-mediated diseases. Also at the ASH meeting in December, we presented positive initial data from our ongoing Phase I-2 clinical trials. Specifically new results show that ALN-CC5 achieved up to 99% knockdown of serum C5, and a mean maximum inhibition of serum sheet red blood cell hemolytic activity, an ex-vivo assay for complement activity of 84%. In addition, ALN-CC5 administration resulted in low levels of residual C5, which based comparisons from separate studies, were at or below the estimated levels of free C5, observed at therapeutic doses of eculizumab, an approved anti-C5 monoclonal antibody. Effects of ALN-CC5 were also found to be highly durable, with C5 knockdown and complement inhibition results supporting a once monthly, and possibly a once quarterly subcutaneous dose regiment. Importantly, ALN-CC5 was shown to be generally well tolerated, with no clinically significant drug related adverse events through the data cutoff date. We believe that these new ALN-CC5 results meet our goal of achieving both inhibition of serum hemolytic activity, and highly robust knockdown serum C5 to very low residual levels. We are also very pleased with the consistency and durability of ALN-CC5 clinical activity, which we believe supports at least a once monthly, and possibly a once quarterly subcutaneous dose regiment. With these data in hand, we have now initiated dosing in PNH patients, and have a number of patients enrolled in this part of the study.

In particular, we have successfully enrolled both treatment naive and eculizumab treated patients into the study. We look forward to presenting initial results from this new stage of our Phase 1/2 study, including the effects of ALN-CC5 on levels of lactate dehydrogenase, a marker of in-vivo red blood cell haemolysis in mid-2016. We also continue to refine our development strategy for ALN-CC5, since our goal is to maximize the number of patients who can benefit from C5 knockdown, we plan to develop ALN-CC5, both as an alternative to eculizumab, and also as a foundational therapy with provisional eculizumab in less frequent and lower doses. In the latter setting, we believe that patients could benefit from more consistent efficacy without breaks for haemolysis, and that reduced eculizumab dosing has the potential to reduce a significant burden for patients, and the broader healthcare system. Indeed our goal is to improve the management of PNH and other complement-mediated diseases with an innovative new approach, and we are excited about the potential to do so with the ALN-CC5. Also during this quarter we continue to advance our ALN-AS1 program in development for the treatment of acute hepatic porphyrias. We announced today that we have initiated Part C of the ongoing Phase I trial. As part of the studies being conducted in patients with acute intimate porphyria, they experienced recurrent attacks. It is designed to evaluate the safety and tolerability of multiple doses of ALN-AS1, as well as measures of clinical activity, including reduction in frequency and severity of attack symptoms, hospitalizations, quality of life, and reduction in the use of hem and pain medications. We expect to report initial data from this part of the study in late 2016, and if these data are positive, to initiate Phase 3 studies in 2017.

We have also continued dosing healthy volunteers in our ongoing Phase I trial of ALN-AAT in development for treatment of Alpha-1 Antitrypsin deficiency associated liver disease. In addition, we filed a CTA to initiate a Phase I study with ALN-GO1 in primary hyperoxaluria type 1, which has now been approved by the UK authorities, and we are very pleased to announce today, that we have received orphan drug designation for ALN-GO1 from the FDA. We expect to have clinical data updates from these two programs in mid and late 2016.

I will now turn to review of progress from our Cardio-Metabolic Disease pipeline. Our leading program is STAr is ALN-PCSsc, which targets PCSK9. As a reminder, ALN-PCSsc is an investigational RNAi therapeutic targeting PCSK9, genetically validated protein regulator of LDL receptor metabolism, being developed for the treatment of hypercholesterolemia. In contrast, an anti-PCSK9 monoclonal antibodies that bind to PCSK9 in blood, ALN-PCS is a first in class investigational medicine that acts by turning off PCSK9 in the liver . Interim results from our Phase I study in normal healthy volunteers with elevated baseline LDL cholesterol were announced at the American Heart Association meeting in November. Subjects in the study were randomized receiving three-to-one drug to placebo, and received either single or multiple doses of the drug in this study. Where we showed that subcutaneous administration of ALN-PSCsc resulted in an up to 83% lowering of LDL-C with up to 64% mean maximum reduction, comparable to those data published from the results from anit-PSCK9's monoclonal antibodies. The effects of ALN-PCSsc were found to be highly durable, with clinically significant and clamp reductions in LDL-C, supportive of a potential bi-annual subcutaneous dose regiment. Specifically an up to 53% maximal and 47% lee squared mean reduction in LDL-C was achieved at day 180, after just a single low volume injection.

In addition, ALN-PCSsc was shown to reduce a number of arthrogenic lipids, including LPA and total cholesterol, which are both associated with increased risk of cardiovascular disease. ALN-PCSsc was generally well tolerated with no clinically significant drug related adverse events through the data cutoff date. Recall that our ALN-PCSsc program is part of The Medicines Company, who will lead clinical development of the program from Phase 2 onward, and commercialization of the program if successful. At the beginning of this year The Medicines Company announced the initiation of the ORION-1 trial for ALN-PCSsc. The trial is expected to recruit 480 patients with atherosclerotic cardiovascular disease and elevated LDL-C. Of interest, ORION-1 will quickly become the largest ever study of a GalNAc-siRNA conjugate, providing important safety data for our overall platform.

Finally, we are also making strong progress in our hepatic infectious disease STAr. We have now completed the preclinical INDA enabling studies with the ALN-HBV that will enable the CTA filing expected in early 2016. Continue to be very excited about ALN-HBV as we believe that it will emerge as a best in class RNAi therapeutic in the field, with potential for a subcutaneous once monthly dosing profile, and a wide therapeutic window. We are now on track to file a CTA for this program in early 2016, with the start of our Phase 1 study expected at mid-year. If ALN-HBV is successful at increasing the rates of sero conversion in HBV patients, this program could become an important value driver for Alnylam in the future.

In summary, we believe we are making excellent progress on our investigational RNAi therapeutics pipeline across our three STArs. It has certainly been an especially exciting and productive time for us, as we continue to lead the translation of the signs of RNAi towards the development of innovative medicine. In this regard, I do want to thank all of the physicians and patients engaged in our clinical studies. With your commitment, we aim to advance important innovations for patients around the world. I will now turn the call over to Mike for a review of our financials. Michael.

Thanks Akshay. I will be referring to slide 21 for a discussion of the fourth quarter and year end 2015 financial results. We maintained a solid balance sheet ending 2015 with approximately $1.28 billion in cash, cash equivalents, and marketable securities. Our GAAP revenues for the fourth quarter of 2015 were $7.6 million, as compared to $24.0 million in the fourth quarter of 2014. GAAP revenues this quarter included $3.6 million from our alliance with Sanofi Genzyme, $2.9 million related to our alliance with The Medicines Company, and $1.1 million from other sources. The Company expects net GAAP revenue from collaborators to remain consistent for 2016, as compared to 2015.

Moving to expenses. R&D expenses were $82.8 million in the fourth quarter of 2015, as compared to $55.5 million in the fourth quarter of 2014. The increase in R&D expenses for the quarter ended December 31, 2015 as compared to the prior year period, is due primarily to higher clinical trial and manufacturing and external services expenses, resulting primarily from the significant advancement of the Company's pipeline. In addition, compensation and related expenses increased for the quarter ended December 31, 2015 as compared to the prior year period, due primarily to a significant increase in headcount during the period as the Company continues to expand and advance its development pipeline. The Company expects that R&D expenses will increase in 2016, as it continues to develop its pipeline and advance its product candidates into clinical trial.

G&A expenses were $17.2 million in the fourth quarter of 2015, as compared to $14.2 million in the fourth quarter of 2014. G&A expenses for the quarter ended December 31, 2015 as compared to the prior year period, increased due primarily to an increase in consulting and professional service expenses related to an increase in general business activities. The Company expects the G&A expenses will increase in 2016 as it continues to grow its operations. The GAAP net loss according to accounting principles generally accepted in the US for the fourth quarter of 2015 was $90.7 million, as compared to a net loss of $21.4 million for the same period in the previous year.

With respect to guidance for 2016, Alnylam expect that its cash, cash equivalents, and total marketable securities balance will be greater than $850 million at December 31, 2016. This reflects approximately $100 million in expenditures, primarily related to Alnylam's planned capital investment in a manufacturing facility. I will now turn the call over to Barry. Barry.

Thanks Mike. As you heard from both John and Akshay, we have had a tremendously productive 2015 and recent period, as we continue to build the industry's leading pipeline of RNAi therapeutics, and advance our innovative medicines to patients, and following approval to the market. Now let's turn to our 2016 goals and guidance announced in early January. As John mentioned, this will be a very data rich period, with ten major clinical readouts anticipated this year. With regard to our Patisiran program, we have achieved our goal of completing Phase 3 APOLLO enrollment. APOLLO will enable a possible NDA submission in the 2017 time frame. We also continue treating patients in our Patisiran Phase 2 OLE study, and plan to present additional data including complete 18 month data in an oral presentation at AAN in April. We also will present initial 24 month data in mid-2016.

With Revusiran, we are currently enrolling FAC patients in our Phase 3 ENDEAVOR study, and anticipate having data from this trial in 2018. We are also treating patients with Revusiran in a Phase 2 OLE study, and we plan to present 12 month data from that study in mid-2016. Additionally, we anticipate it will be a very important year for ALN-TTSCO2 with a CTA filing planned in the early part of the year, a Phase 1 start mid-year, and initial Phase 1 data in late 2016.

Moving to hemophilia and Fitusiran. We are continuing to enroll additional dose cohorts in the ongoing Phase 1 trial, including patients with hemophilia receiving a monthly subcutaneous fixed dose regimen. We anticipate presenting additional Phase I data in mid-2016, and Phase I OLE data in late 2016, we also plan to start our two Phase 3 trials in mind and late 2016 in patients with and without inhibitors respectively. With ALN-CC5, we continue dosing PNH patients in Part C of the Phase 1-2 study, and anticipate presenting data in mid-2016, and again in late 2016. Moving on to our Porphyria program with ALN-AS1, we anticipate presenting phase 1 data in recurrent attack porphyria patients in late 2016. With ALN-ATT we plan to present initial Phase 1 data in mid-2016. Now with our PH1 program, that is ALN-GO1 for the treatment of PH1, we expect to treat, to start our Phase 1 study in early 2016, and expect to present data in the late part of this year.

Turning to our other STArs. First, Cardio-Metabolic STAr with ALN-PSCsc, our partners at The Medicines Company expect to present initial Phase 2 data in late 2016. With the herpetic infectious disease STAr, we are planning to file our CTA for ALN-HBV in early 2016, and start a Phase 1 trial with midyear timing. Now finally, as Mike said, we plan to end the year with greater than $850 million in cash. In summary, we are now poised for an incredibly data rich 2016. We very much look forward to sharing more updates from our pipeline in the coming weeks and months. And I will now turn the call back over to Christine to coordinate our Q&A.

Thanks Barry. Operator, if you could open the line for your questions. As a reminder to those dialed in, we would ask that you limit your questions to two each.

(Operator Instructions). The first question from the line of Alethia Young of Credit Suisse. Your question please.

Thanks for taking the question, and congratulations on all of the progress over the past 12 months. As we get closer to the potential approval or hopeful approval of Patisiran, I just want to think about how doctors and patients alike will differentiate in FAP, sometimes there is cardiac involvement, and they could get access to the drug a little faster is they somehow have patisiran, is there an opportunity set of that? And then I have another question as well.

Thank you. I mean I think that is a great question, Alethia. And maybe Akshay, you can begin to answer, and then maybe Barry might want to comment as well.

Within the APOLLO study, we know and we see this already in the Phase 2 early study for patisiran, and similarly in the APOLLO study, patients have coexisting cardiac disease in addition to their FAP, and of course we are monitoring many of the endpoints there very carefully as well, and those would be read out at the time of the Phase 3. And based on the Phase 2 OLE, where we see substantial evidence for stabilization of the disease both in terms of the neuropathy, and some of those cardiac endpoints, we are optimistic that we hope to have clinical benefit associated with the drug on the cardiac aspects of the disease. How all of that will be taken and wrapped up into a label, and what that means for promotional, that is for a later time, but what we do know is that certainly there will be important readouts coming out of APOLLO, speaking to both, not just the neurological, but also the cardiac aspects of the disease.

I agree with that completely. And just to put a fine point on it, assuming the data points in a positive direction, we understand that those with the TCR mutation many patients have a mixed pathology. So obviously we will look at the data and take greatest advantage of the data to treat as many patients as possible.

Following discussions and agreement with the FDA on the right label, of course.

Yes. And I get this question a lot, so I wanted you to kind of talk about it up front, thinking about how to enroll a C5 study, if you were to have success in the middle of the year, kind of a lot of people kind of asking, won't it would be difficult to enroll, and I see that you are thinking about the monotherapy and the sparing as well, so maybe if you could give us some more color on that, that would be great? Thanks.

Akshay, maybe it is useful to highlight the two different types of studies. We could imagine one for monotherapy and the other for the foundational therapy on top of provisional eculizumab.

So I think the first thing to say, is that as we reported today, we have we begun to enroll PNH patients into Part C of the ongoing Phase 1/2 study, and they come in both of the flavors that John just spoke of. Patients naive to any drugs for PNH, including eculizumab, and so they are coming onto ALN-CC5 for the evaluation of ALN-CC5 from a safety and efficacy viewpoint as a monotherapy. In addition, we are dosing patients already on eculizumab, but for one or more reasons have active disease so to speak, with elevated LDH and other abnormalities. Turning to what lies for us beyond that in Phase 3, depending on the data and outcome from those studies, in the monotherapy we feel confident that we can enroll patients into a PNH monotherapy study with ALN-CC5, because the pharmacodynamic data that we have already shared, and more that will come, will demonstrate the potential for ALN-CC5 as a monotherapy, and more importantly, if we are going to a monotherapy study, for some of these patients we are dosing at the moment, we will provide evidence for the justification of ALN-CC5 on its own.

From the eculizumab sparing viewpoint, I think again we believe that the current data show that ALN-CC5 has rather important pharmacokinetic activity, in terms of C5 knockdown with up to 1% residual C5, that is highly comparable to some of the data of free C5 with eculizumab, and one can imagine a once monthly or a once quarterly, getting that kind of a pharmacodynamic profile, allowing for a significant degree of sparing of the amount of eculizumab needed, and so for example, one can imagine a once a month eculizumab infusion, which may be at a substantially lower dose, and I think that would be justifiable based on PKNCd, along with our once monthly or once quarterly ALN-CC5, so that is how we are beginning to think about it. But I think that the data coming out middle and later this year from the ongoing studies with PNH patients, will influence and help us design that study.

A very important point to add is that the human liver over a 90 day period produces about 4.5 grams of C5, and based on label doses of eculizumab, it requires 6 grams of eculizumab to basically sop up all of that C5 produced by the human liver. We have shown in our Phase 1 study already that a single injection of ALN-CC5 over the course of a whole quarter, substantially reduces the levels of C5 produced in the liver. So you can imagine the positive impact that would have on generating very low levels of C5, reducing the burden of eculizumab infusions, but very importantly also improving overall benefit for patients as this plays out, by reducing the frequency of breakthrough haemolysis. So it is a very compelling approach that of course really is consistent with our overall goal of maximizing the potential opportunity for ALN-CC5, in patients with complement-mediated diseases including PNH.

And just a follow-up on that, as far as like literally finding the patients, is it the assumption that we should be thinking there are patients in other parts of the world that maybe are not on therapy, help us understand like kind of the particular populations or what you are hearing from the community?

Yes, I think there should be patients both in parts of the world where eculizumab is approved, as well as other parts of the world where eculizumab is currently not available. I can share that some of the patients we are dosing now are certainly in territories where eculizumab is available.

Absolutely. And on top of it, don't forget at our R&D day, Anita Hill said that 21% of her patients in Leads are unable to get to effective control of their disease with label dose of eculizumab, and require either more frequent dosing, or higher doses, and that is a significant burden on the patients.

Great, thanks.

Thank you. Our next question comes from the line of Alan Carr from Needham & Company. Your question, please.

Thanks for taking my questions. I was wondering if you could comment on a couple of things. One of them on spend, what your thoughts are here in terms of long-term here, in terms of whether or not this will continue to escalate? And then also with respect to the porphyria trial, you just got that started in symptomatic patients, wondering if you can comment on what your expectations are for the results, when those come later this year. And then also around TTR-SCo2, what the Phase I trial is going to look like? Is that just healthy volunteers, and you are just looking for knockdown, or when it comes to the Phase 3 start, assuming a good outcome in Phase I, is the results of the Patisiran trial the gating event for the Phase 3 trial of TTR-SCO2. Thanks.

If I didn't like you so much I would have stopped you after the two questions, because I think we counted four in there. Let me start, and ask Mike and maybe DA to comment on the spend.

First looking at 2016, what we have guided is cash greater than $850 million. In that color on that for 2015, we expect R&D expenses as well as G&A expenses more so R&D expenses to increase in 2016, and along with that as part of the burn for 2016 is around $100 million in expenditures related to a planned capital investment in a manufacturing facility.

Maybe DA, do you want to comment a little bit on the ongoing horizon?

Sure. Looking forward obviously as the Company continues to advance programs into Phase 3, Phase 3s are more expensive than earlier stages of development, so thinking about spend, spend will increase proportionally. The key thing to remember is to recall that for our collaboration in rare diseases, we are partnered with Sanofi. So in terms of what means regarding burn, is that can vary based on the reimbursement levels that we are getting for it.

I think the long and short of it, Alan, is that the Sanofi partnership provides us with reimbursement from an R&D expense standpoint, and our cash position gives us cash to invest in this pipeline for many years to come. So we are in a very strong position from a balance sheet perspective. (multiple speakers)It is wonderful to be in this position in this climate.

Do you expect the reimbursement, is that something that we will start to see more of in 2017 going forward?

Well, it will be a significant component of this year. We don't give specific guidance on that, but it will be significant this year, and depending on how Genzyme opts in to the C5 program, how they opt into the Patisiran program, in other words, they go from their regional rights to their 50/50 rights, it depends how they how they opt in to the porphyria program, et cetera. An increasingly significant amount of spend will be reimbursed by Sanofi consistent with their rights.

Thank you.

Then you had three other questions. (laughter)And the other three go right to Akshay. Maybe start with the porphyria program, and just comment a little bit on the design of the study, and what we expect to see by year's end?

Alan, Part C of the study follows on from first two parts, which are single and multi-ascending dose studies in asymptomatic high excreter patients, and there I think we unequivocally demonstrated that the activity of the drug clearly reduces the level of the two toxic mediators that the disease is about, and caused the recurrent attacks and they are ALN-CBG, now knowing that and knowing the dose and regimen, where can bring about that robust reduction in ALN-CBG, we have moved forward into Part B which is dosing patients with recurrent attacks. There is a running phase, where we are documenting the number of attacks they get, for some of them it is as many as once a month, for others once every few months, so we are documenting the preexisting attack rate, and then they go on to dosing at the dosing regiment that gives you this substantial level of ALN-CGB knockdown, and then we shall count attacks in that context, with the placebo control on it as well, so that would give insight into reductions in attack frequency, and as we tend to report the data by year end. We are looking forward to doing that. We are excited about it. Certainly the early PD data from parts of A and B are very promising.

And then TTR-CO2.

Right. Yes, Phase I will be in healthy volunteers. Very straightforward, we need to demonstrate safety of course, with the TTR knockdown, and I think we look forward to an exciting result there later in the year, and in terms of Phase 3, obviously I think outcome with the patisiran program is a factor in how we think about the overall development of Sco2, but there are other factors to consider. The Revusiran program is doing well, those data will be important as well. But a central part of the SCO2 path going forward, would be on the back drop of demonstrating that TTR knockdown results in clinical benefit in TTR mediated syndromes. And I think that will be an important aspect to market that.

And we will obviously look forward to having discussions with regulatory authorities on that path forward. Thank you, Alan.

Thank you very much.

Thank you. Our next question from the line of Ted Tenthoff from Piper Jaffrey. Your question please.

Thank you very much for take my question.

Thanks.

Get a little bit more into patisiran for hemophilia, and what the Phase 3s could look like? I think you will mentioned it would both be in inhibitor patients and also non-inhibitor patients. Can you give us a sense of sort of how those studies may differ?

Absolutely. Akshay, do you want to comment?

In inhibitor patients, of course we look forward to enrolling patients in the high areas, hemophilia A or B, with pre-existing inhibitors, and the study design we will discuss at a later date, but we feel confident based on the preliminary evidence that we have in-vitro and also in the non-inhibitor patients, that we will get a good ABR signal there, the panel study will be non-inhibitor patients with hemophilia A or B, and again the primary endpoints like the first study will be the annualized bleeding rate, and much more to come on that.

I think R&D data, Akshay is of course completely right, but just to add a little bit more color. One should expect the inhibitor study to be less than 50 patients. The non inhibitor study to be about 150 patients in size. We can look at an ABR endpoint over a nine month period, which is what we shared for a similar type of period of time. Those are the types of endpoints, of course we want to go to the regulators, and talk to them about these designs, and get them nailed down. We will be having this discussion shortly, and we will update people as we launch those studies.

Sounds great. Thanks, guys.

Thank you, Ted.

Thank you. Our next question from the line of Ritu Baral from Cowen.

Hi guys, thanks for taking the questions today. First question on patisiran, and how you start thinking about the commercial positioning, versus the Ionis competitor, and what you might be able to do to assist the timeline? Would you be up for potential rolling NDA, et cetera? How do you see those two drugs specifically for FAP right now? And then I actually have another follow-up.

Well I'm going to transition it over to Barry. I will just start by saying, we were very interested this past November to see the initial Ionis data, in terms of TTR knockdown in patients, and as we look at those data compared to patisiran, or for that matter Revusiran, we see our profile being far better than what they are showing in terms of knockdown. Very specifically, we are getting a very deep and rapid knockdown of TTR at the 90% level, compared to a multi-month slow knockdown required for the Ionis GSK program, that gets to no more than a 70% effect, with a very wide error bars. So you probably have many patients that are in the 30% to 40% knockdown in their study, would be my guess. So that gives us a really strong foundation to have a Best-in-Class drug. So I will hand then commercially hand it over to Barry.

It starts with the best product profile, and as John mentioned, we believe that from an efficacy, safety, and patient experience perspective, we are going to have the best product profile, and we are going to do everything we can as we commercialize it as a Company, to ensure the right interface with our patients. Over and above that, in the orphan disease world the relationships with the key opinion leaders and the investigators is paramount. I would say that ours are outstanding. They have known us now for seven years, and working with this drug. They are not only excited about Patisiran and Revusiran, but they are incredibly excited by our commitment to continue to invest in the innovative medicines of TTRS-CO2, and that goes a long way. And we have also to the same regard have been building relationships with the patient advocacy community. So those matter. KOL relationships, patients, and the best product profile. In terms of timing, we have caught the exceptional work that our clinical medicine team has done, has brought APOLLO to full enrollment by the end of January, over enrolling the study, and we assuming a positive readout, are ostensibly at the same timing in the United States, and maybe even a little bit ahead, in terms of approval and then price negotiation in Europe. We are in really good shape.

I would just add to it of course, Ritu we are going to Alnylam-like urgency in the filing of this NDA, which I think will aid us significantly, compared to a large pharma company-type urgency. I think we will be in a good position there as well. You have one more question?

Yes. How do you see the prioritization right now of your earlier clinical programs and preclinical programs, particularly the ones that Genzyme doesn't have a partnership with? If we are in a protracted bear biotech market essentially, what are Alnylam's priorities, and when might you start prioritizing them?

A great question, Ritu. We drive all of our investment decisions in our pipeline, and we are driving these decisions based on data, and also commercial opportunity. I think our really top priorities are to really drive toward the Alnylam 2020 objective, and we are positioned to do that incredibly well, across our pipeline of clinical stage assets today, and that includes Patisiran and Revusiran, and the TTR programs in general, but clearly when you look beyond the TTR programs, the patisiran, C5, porphyria programs, and some of the other programs I really point to Bell 1, which might have a very rapid development path. Those are programs that are going to make a big impact, and have relatively spritely development paths going forward, and we have a lot of confidence based on the relationship of biomarkers with clinical relevance, that gives us confidence around that. And of course we understand you have many just being very high. So those are the drivers, those are the priorities at a very high level. Of course, there are other programs as well, the work that we are doing in cardio-metabolic and hepatitis is also incredibly important.

But they are not exactly spritely so to speak?

That's right. So we know how to invest to maximize value, and we will continue do that as a Company. From where we sit right now, we believe that the continued investment with our balance sheet is the right thing that do, and that is what we are doing as it stands.

Got it. Thanks for taking the questions.

Thank you.

Thank you. Our next question from Geoff Meacham from Barclays.

This is Carter on for Geoff. Thanks for taking our question.

How are you?

Nice to hear from you, John. Just a follow-up on the question on the time lines. Maybe just walk through the strategy of not pulling the trigger on the interim analysis? Is it as simple as you feel that you have caught up, or were there any other sort of strategic considerations that went into that choice? And then just on TTR-SCO2, is there any scenario in which you could I guess get away with not having to run sort of a longer APOLLO-like or ENDEAVOUR-like study, maybe something driven more on a biomarker on non-inferiority basis, or something lake that? Thank you.

Great questions. Let me start to answer the first one, and then Akshay can jump in, and he can answer the second one. It is a relates to the interim analysis decision, when we looked at our excellence in terms of finishing approval of APOLLO, and the fact that where as we look at GSK, Ionis at this point, where we are versus them from a timeline perspective, we have completely caught up. It is in fact really somewhat unclear actually, as to whether or not Ionis has even stopped their enrollment. They are currently listed as being active on ClinicalTrials. Gov. So we have really caught up. When you look at the benefit of what a potential interim might look like. Let's say that you did 100 patients at 18 months from an interim perspective, it would only buy you about six months of time at most, because of the nature of enrollment into a Phase 3 clinical trial, and of course, you would have to hit a P value that is a much, much, much, much higher standard, than what you would have to hit at the end of the day.

While we feel very bullish on APOLLO's powering, in light of our Phase 2 open label study, you don't have certainty on that. You have a smaller sample size, a higher P value that you have to hit, or a lower P value that you have to hit. So you start introducing some risk in that. In light of the fact that we have really caught up, we don't get that much additional time, it didn't seem to make sense for us to take the business risk of doing an interim analysis, with a smaller patient subset, with a much higher standard that is required. And on top of that, you would only submit off of that type of interim analysis, results off the primary endpoint of the MS7 score, not the additional clinical data that comes from the rest of the study, including some of these cardiac endpoint data, that might be important for getting a broad label. Those are all of the factors that weighed into it. I don't know Akshay, anything on that side, or go to the TTRCO2.

I think that you covered Patisiran. For SCO2, I think there are a number of ways to think about the further development of that drug beyond the Phase I. Is knockdown in FAP, knockdown of TTR in FAP patients sufficient to get approval on the backdrop of positive phase, from APOLLO and other studies. Is it that we need to do a small study in FAP patients, just to demonstrate knockdown safety and some preliminary stabilization of MNS, much as we have done in the Phase 2 early, or is something more required. I think a lot is this is pending regulatory discussions, and we will share with everybody as soon as we have more news on that. We are building a very strong foundational data with Patisiran, and that status of good stead has really accelerated the development of SCO2.

Great, appreciate the color. Thank you.

Sure.

Thank you. Our next question comes from the line of Gena Wang from Jefferies. Your question, please.

Thank you very much for taking my question. So I thought --

No problem.

I have one question for patisiran, and one for Revusiran. For patisiran, for ASH the analyzed bleeding rate was reported as 2.2 for Part C, cohort 2/3, so now with three more months of treatment, three more months follow-up what will be your expectation for ABR for update of this one data in mid year? And also, do you expect any difference in ADR for the six patients with inhibitors?

Those are great questions Gena, let me give some color on the first part. We were very happy with the ABR rate that we reported at ASH. That is very much in line with the ABR rates reported with routine prophy, so our once a month drug was showing, subcu was showing ABR rates that are similar to what has been reported with 2 to 3 IV infusions a week from the drugs like Advate and the ELOCTATE, et cetera, that are used for routine prophylaxis. Those data are very encouraging. We obviously will be updating data from all of the patients, as Akshay said in his comments. In addition to the 24 patients that we presented at ASH, we have enrolled a couple more cohorts, each having three more patients, with a fixed dose of drug, those data will be presented in the middle part of the year, and we will also present whatever data we have in inhibitor patients in the mid part of the year. And we certainly don't expect, and should not expect any difference in the ABR rate in inhibitor patients, because of the mechanism of action of patisiran. So I think that we can be reasonably confident, but of course we will pass that clinically, and report those data. So that is really what you can expect. Now in terms of the timing for the midyear release, there a World Federation of Hemophilia meeting in July, if our abstracts get accepted to that meeting, that is likely to be a good forum for us to present those updated data.

Okay, great. My next question is for Revusiran 12 months Phase 2 OLE data, which we should expect in mid-2016. Since the patient baseline 6-minutes walk was much higher than the natural history data, so how should we think about the data interpretation for 12 months? Would that be a full difference, or would that be the percentage of change? And how do you see these through to the Phase 3 outcome?

It is a very good question. Akshay, do you want to handle it?

Gena, I think we are always very transparent to the form and the basis as we release, we will obviously safety is first and foremost, we will show the safety data. And in terms of the 6-minute walk distance, we will present it in an upward way, including absolute change and percent of change, I think as we have guided today and previously, the anticipation that we would see dramatic changes at 12 months. I think we yet to wait and see. Because the tempo of the cardiac disease, and how quickly we can see a change in that endpoint within a period of months, we are still investigating. I think we are confident that in an 18 month timeframe, as we start the Phase 3 study, or the duration of the endpoint for the Phase 3 study should be a significant enough period of time. That is where things stand currently.

Yes. I would add to that, Gena, that the patients in the Phase 2 OLE are actually more advanced in their disease, than the patients that we expect to enroll, and are enrolling in ENDEAVOUR. Ultimately we will have to look at the randomized study results to really understand the impact,. I think it is a different disease than FAP. There is less natural history data that we can really point to, to understand it. These are all really factors that weigh in. But ENDEAVOUR is doing a very clean experiment, we are looking at the impact of TTR knockdown, which is very robust, and we will be able to see how the effect of the drug is versus placebo in that Phase 3 trial.

Great, thank you.

Thank you.

Thank you. Our final question from the line of Anupam Rama from JPMorgan. Your question please.

Hey guys, thanks for taking the question. Just looking through the PNA-CC5 data, help us understand what you are looking for on LDH here, and are these LDH data the gating factors to understanding the longer term development for this program, not only in PNH, but indications beyond even potential Solaris indications? Thanks.

That is a great question. Do you want to handle it?

I think, Anapam the LDH data are important in our evaluation of ALN-CC5 at this time, and I think just as they have been an important in evaluation of other agents in PNH, including eculizumab, LDH is an important biomarker for red cell haemolysis in-vivo, it is anticipated that it should go down substantially if there is an effective agent on board, and the agent wouldn't normalize the level of LDH, that is not seen with current therapies for PNH, but the level should approach within 10% or so of the normal. So I think a result like that would signify a significant early impact in DNA, or ALN-CC5 as a monotherapy. If we consider patients and John alluded to this, about 21% of patients with PNH have continued ongoing disease active, despite PNH, and I think we can speculate the reasons for that, I think the addition of ALN-CC5 on the background of eculizumab, and would become those kinds of patients as well. Again, we would anticipate seeing a substantial reduction in LDH in those patients as well.

Does that answer your question, Anapam?

Yes. And just the any gating factors, understanding the long term development of the program, like in Solaris, and beyond Solaris indications, or within the Solaris indications?

Yes. I think in terms of gating on the full extent and the scope of our PNH program, this LDH data will be important. With respect to non-PNH indications, I think that area is something we continue to study, and there are a number of factors involved, of course markets like LDH are more relevant in some of these other diseases, like myasthenia and neuromyelitis optica, where antiCC5 agents have shown promise. Those are topics for another day, but certainly for the PNH phase and the LDH phase are going to be quite important.

I think just to add a little bit of color to that, we are going to be doing more studies outside of PNH, probably starting in 2017. And what the PNH studies will show us is some clarity around dose-dose regimen, and so that is going to be very important for us, so we will put it all together. But 2017 will be a year where we do more outside of just PNH alone, because we think the opportunity here goes well beyond PNH, of course.

Thank you. This does conclude the question and answer session of today's program. I would like to hand the program back to the Company for any further remarks.

Great. Thanks for joining us this afternoon. We fully expect 2016 to be an exciting year for the Company, with many clinical data readouts, of course very important, but our focus really remains on the patients that we serve, and we are committed with our approach, to make an important difference in their lives. Thank you very much, we will talk to you soon.

Thank you ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.