Alnylam Pharmaceuticals Inc (ALNY) 2016 Q4 法說會逐字稿

Welcome to the Alnylam Pharmaceuticals conference call to discuss fourth-quarter and year-end 2016 financial results.

(Operator Instructions)

Please be advised that this call is being taped at Company's request.

I would now like to turn the call over to the Company.

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 Mike Mason, Vice President of Finance and Treasurer. In addition, Yvonne Greenstreet, Executive Vice President, Chief Operating Officer, is in the room and available for Q&A.

For those of you participating via conference call, the slides we have had 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 some general context. Akshay will review recent clinical updates. Mike will review our financials, and Barry will provide a brief summary of upcoming milestones before opening the call for 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 our 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 of any subsequent date. We specifically disclaim any obligation to update such statements.

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

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 toward the market. Setting up 2017 to be a pivotal year for the Company as we open the envelope on our first Phase 3 data set and prepare to make the anticipated transition to a commercial organization.

Specifically with patisiran, which we were developing for the treatment of patients with polyneuropathy due to hereditary ATTR amyloidosis, we look forward to reporting top line data from the APOLLO phase 3 trial in mid-2017. And, assuming positive results, expect to submit an NDA and MAA 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 of patisiran where we have seen evidence 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 in clinical activity, and we look forward to updating our results at the upcoming AAN meeting in April.

We have also recently made great progress with our other mid-stage to late stage clinical programs including fitusiran for hemophilia, givosiran for porphyria, and with our partners at the medicines Company, inclisiran for hypercholesterolemia. As we read out our phase 3 results with patisiran this year, we will also plan to advance these three programs into Phase 3 development. This potentially positions Alnylam to have a steady flow of Phase 3 readouts, and if positive, commercial launches on essentially an annual basis going forward.

We reported new data for both fitusiran and givosiran 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 givosiran, we have global development and commercial rights.

Our colleagues at the Medicines Company reported encouraging initial ORION 1 phase 2 90-day results at the AHA meeting in November and announced a top line green light for [1 Navy Day] data early in January. Based on data to date, we're excited about the potential for inclisiran, particularly in light of the positive Fourier 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 an important strategic and economic stake in inclisiran so we're very pleased to see the progress in this program.

In sum, we believe our mid-stage to late stage pipeline programs provide 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 an unfortunate setback during the fourth quarter. Specifically, we announced in early October that we discontinued development of revusiran, an investigational RNAi therapeutic that was in development for the treatment of patients with cardiomyopathy due to hATTR amyloidosis.

We're still in the process of conducting a comprehensive evaluation of the available data to try to understand what caused the imbalance and mortality. To date, we have 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, cardiotoxicity. 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 experience -- safety experience with RNAi therapeutics comprises over 1,000 patients or volunteers dosed for up to 3 years in over 10 distinct clinical programs.

As with revusiran, patisiran -- 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 at a low incidence and are monitorable. In addition, these events have generally been 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 oligos. While there have been no revenue 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 programs in more detail, I would like to reflect for a moment on recent developments that have hindered or altogether prevented people 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 workplace. 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'm 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. I look forward to working with the administration constructively to promote policies that bring the best of the best people from around the world to work tirelessly in our great ENDEAVOR of translating the best science into potentially transformative therapies for patients as potential cures and new therapeutic options.

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

Thanks indeed for those comments, John, and good afternoon, everyone. As John noted, we have 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 readout 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're 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 into the APOLLO OLE study.

Also, in the third quarter, we initiated our patisiran expanded access protocol. We view this as great news for patients with this disease, and we're 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 at our R&D day in December. TTRsc02 has the potential to achieve with once quarterly subcutaneous dosing regimen, which we believe would be a significant improvement over revusiran or the [IONSCTRx] program which both require weekly injections.

Our results, showed on slide 7, showed a potent, dose-dependent, and highly durable knockdown of TTR in normal healthy volunteers. For example, a single 50-milligram injection achieved potent and highly durable TTR knockdown greater than 80% for over 90 days.

The drug was generally well tolerated in healthy volunteers with no serious adverse events and no discontinuations 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 an over 100-fold improvement of potency and a meaningful improvement in durability. We'll now await the results of the APOLLO phase 3 study, and assuming positive results, will then plan to engage regulators to align on a development path for ALN-TTRsc02.

Let's now turn to our fitusiran program for 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 hemostatic support for all patients and a whole new treatment option for patients living with inhibitors. Moreover, as a once-monthly subcutaneous injection, fitusiran has the potential to address the significant treatment burdens of current management.

At ASH 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 lowering 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 one in patients without inhibitors and a median estimated ABR of zero in patients with inhibitors.

Importantly in the 32 patients across the 2 studies, fitusiran showed an encouraging safety profile through 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.

Just last week at the EAHAD meeting in Paris, we presented new results from an exploratory analysis of the fitusiran phase 1 study. In this analysis, treatment of all breakthrough bleed events with a replacement factor or bypassing agent resulting hemostasis without any thromboembolic events.

In addition, we presented results from stability studies of fitusiran which supported greater than 2-year shelf life at room temperature storage conditions. This stability profile could potentially facilitate treatment in regions where [cold chain] storage of climates represent a challenge to patient access.

We believe these later data sets are promising for fitusiran's potential as a treatment option for hemophilia patients with and without inhibitors. Moreover, the results continued to highlight what we believe to be a very competitive profile for this innovative investigational method. We expect to report additional data from the fitusiran phase 2 early study in the middle of the year likely at the ISTH conference in July.

We are now transitioning fitusiran into a comprehensive phase 3 program called Atlas which we aim to start in early 2017. The atlas program is expected to include three separate phase 3 trials running essentially in parallel toward 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 study 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 are a group of ultra-rare orphan diseases caused by genetic defects in the heme biosynthetic pathway. It's a devastating disease with enormous burden.

In this disease, buildup of toxic heme intermediates lead to incapacitating and potentially fatal attacks with symptoms that include severe abdominal pain, peripheral and autonomic neuropathy, and neuropsychiatric manifestations. Porphyria attacks typically last a day and often require hospitalization.

Patients describe the pain during an attack as incompatible with life, and the majority of patients report chronic pain in between their attacks. The only available treatment is hemin, a crude preparation of heme administered via a central line.

Givosiran targets the liver-expressed ALAS-1 gene which is upstream of the genetic defects in acute hepatic porphyria and the enzyme responsible for overproduction of ALA and PBG, the toxic heme synthetic intermediates that mediate porphyria attacks. Our therapeutic hypothesis is that silencing ALAS-1 with givosiran will lower levels of ALA and PBG and thereby has the potential to reduce the number, frequency, and severity of porphyria attacks in patients. [As] it's once-monthly or potentially once-quarterly subcutaneous investigational RNAi therapeutic to prevent debilitating porphyria attacks, givosiran could be a transformative therapy for patients with this disease.

At ASH this past December, we reported phase 1 part C data for givosiran in acute, intermittent porphyria patients with recurrent attacks. Part C was conducted as a randomized, double-blind placebo-controlled study where patients were monitored over a three-month [run-in] period and then randomized three to one to drug or placebo and monitored over a subsequent six-month treatment period.

During the run-in and treatment periods, we prospectively monitored the frequency and duration of porphyria attacks and the use of hemin to treat attacks. On the safety side, givosiran was generally well tolerated with no drug-related serious adverse events or discontinuation.

After the data cutoff, there was one death reported in the third cohort in the study which currently remains 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 unblinded. Givosiran resulted in a 63% to 94% decrease in the porphyria attack rate compared with each patient's own attack rate during the run-in period exceeding the change in attack rate reported for the single placebo patient which represents the small placebo effect. Overall, we believe this is an encouraging overall treatment effect.

To highlight these results further, let's turn to the right side of the slide that shows an example of givosiran's effect on a recurrent attack patient. Here, during the run-in period, this patient experienced eight porphyria attacks indicated by the blue circles with each attack occurring about [17] days apart. You can also see the fluctuations in ALA and PBG levels which spike during each attack.

Following a single subcutaneous injection of 2.5 mg per kg of givosiran on day zero, you can immediately appreciate that givosiran resulted in a [clamp] reduction in ALA and PBG levels and a dramatic halting of porphyria attacks. 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 cohorts.

We expect to present the next tranche of data at the international Congress on porphyrins and porphyrias, or ICPP, a meeting to be held in Bordeaux, France in late June pending abstract acceptance. We'll also be rolling patients over to the givosiran early study where we will generate long-term data on efficacy and safety.

Now, based on these encouraging results we reported to date, we committed to advancing givosiran to the market as quickly as possible, and without global right to givosiran, we'll aim to rapidly generate data to support approval in countries around the world so we can serve the greatest number of patients. We expect to start a phase 3 trial in late 2017. Pending formal discussions with regulators, we plan for a small, 6-month to 9-month placebo-controlled study using annualized attack rates as the primary endpoint which we believe could be sufficient from an [XC] perspective to support approval.

Let's now turn to inclisiran, our investigational RNAi therapeutic targeting PCSK9 that is being developed in collaboration with our partners at the Medicines Company. Initial data were presented at the AHA in November in the 501-patient 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.

With this type of profile, we believe that inclisiran could emerge as the best-in-class PCSK9 agent. More recently, the Medicines Company put out a top-of-line release on the complete Day 180 results confirming that inclisiran's safety profile remains encouraging, and that the clinical activity continues to support a once-quarterly or bi-annual dose regimen. Moreover, as John noted, the recent Fourier outcomes data for repatha confirmed the transformational potential for anti-PCSK9 therapies, one of the most important scientific and clinical discoveries of modern medicine.

Finally, we also continue to make progress in our other clinical programs including ALN-CC5 for complement-mediated disorders, ALN-GO1 for primary hyperoxaluria, and ALN-HBV for chronic Hepatitis B infection. We'll 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?

Thanks, Akshay. I will be referring to slide 18 for discussion of our fourth-quarter 2016 financial results. We maintained a solid balance sheet ending 2016 with approximately $1.09 billion in cash, cash equivalents, marketable securities, and restricted investments.

Our GAAP revenues for the fourth quarter of 2016 were $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 related to our 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 for fitusiran and inclisiran.

Moving to expenses. R&D expenses were $105 million in the fourth quarter of 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 period was due primarily to additional clinical trial 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 into later stage developments.

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 our product candidates into later stage development. But, that 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 candidates, 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 of 2015. G&A expenses for the quarter ended December 31, 2016 as compared 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 incurred a one-time, non-cash, stock-based compensation charge of approximately $5 million related to an expense recorded for a stock option award under the terms of our stock plan as a result of the unexpected death of an employee. We expect that G&A expenses will increase in 2017 as we continue to grow our operations including anticipated buildout of commercial capabilities to support a potential launch for patisiran in 2018.

The GAAP net loss for the fourth 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 expects that its cash, cash equivalents, and marketable securities including its restricted investment balance, will be greater than $700 million at December 31, 2017. We believe this provides Alnylam with a very strong balance sheet at the end of 2017 to support the development and commercial activity in 2018 and beyond.

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

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 biopharmaceutical industry. As part of this transition, we are very focused on expanding our medical affairs, 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 the 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 presentations. 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 dosing patients in our APOLLO phase 3 study and look forward to reporting top line data from this 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 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 in recurrent porphyria attack patients in mid-2017, likely at the ICPP meeting in June. Now, as Akshay mentioned, we plan to rapidly advance the program into 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 earlier this year -- the Orion 2 study in patients with homozygous familial hypercholesterolemia and the Orion 3, a phase 2 open-label extension 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?

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.

(Operator Instructions)

Alan Carr, Needham & Company.

Hello. Thanks for taking my questions. A couple of them. One of them is I wonder if you can elaborate more on your progress here in terms of sorting out the safety with revusiran. It sounds like you're fairly confident that it's not drug-related. I'm just wondering if you could expand on that a bit?

And then, also, I can appreciate your focus on the three late-stage programs moving into Phase 3. Is there any sort of strategic shift here? Does this come at the expense of some of your -- the rest of your pipeline? And then, wondering if you could talk a bit about HBV. What we might expect from that program this year? Thanks.

Yes. Great, Alan. Thanks for those questions. They are good ones. Let me start on the revusiran side, and just say, look, we're in the middle of an ongoing evaluation of the safety results. 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 there is no evidence of a broader cardiotoxicity 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 premature to make that 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?

I think you covered it, John.

That's good. And then, your other question. A very good one. Strategically, is how are we looking at our pipeline investments in 2017. And, Alan, we've got a really big year here: first pivotal data readout, first NDA submission, MAA submission. That's obviously the big part of the feast for 2017, and we have three additional programs that are going into Phase 3.

Even though Medicines Company is driving inclisiran, we're 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 are maximizing our focus and investment in those efforts, the patisiran, fitusiran, givosiran and supporting MedCo on inclisiran while we continue out other programs but with less, frankly, 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 HBV, there's no formal guidance that we are giving on the program, but we certainly will be reporting data in the course of the year, I fully suspect. And, hopefully, we will be able to report surface antigen data in patients, but we don't want to make any commitments to that at this point in time as those programs are advancing. Akshay, anything else to add to that?

I think you've covered it.

Yvonne?

Yes, thanks very much. That's perfect, thanks.

Ritu Baral, Cowen and Company.

Good afternoon. Thanks for taking the question. My first question is on the upcoming APOLLO data midyear. Obviously, you're going to top line the mNIS+7 data, but what do you see as the key secondary endpoints that will drive reimbursement, patient experience, et cetera? And, what is on the table for potentially secondary endpoint-wise revealing with the top line?

Great question. 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 yet shaped and framed what our top line will look like, but I would imagine that we will obviously report a P value for the primary endpoint and will provide some color on safety and secondary endpoints. Not any details, but maybe numerically how many of them hit or get in hit. We all have examples of best practice and top-line reports, and we're going to look to be a best-practice type top-line 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 endpoints, and then maybe Barry from a value perspective. So, Akshay?

Yes. I think from the viewpoint of clinical benefit beyond the mNIS+7, some of the key outputs we will be looking at in the secondaries [agree] to include a quality-of-life index, the [northfolk] quality-of-life index that's validated in TTR amyloidosis polyneuropathy. We'll also be looking at key components of the NIS index of NIS weakness which is the loss or gain in muscle strength that will have occurred in the study will be a point of interest. Walking, obviously, is an important activity of daily living, and the 10-meter walk test is part of the secondaries.

And then, there are other features such as the rods which is a composite assessing autonomic dysfunction so this constellation of outcomes will 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 mNIS+7 changes will translate to important changes in these other indices. Barry?

Yes. Rather than repeat all the endpoints that Akshay talked about, from a reimbursability perspective, it will depend heavily on what the APOLLO data actually are. If the APOLLO data are relatively similar to the open-label extension data that we are seeing, where in fact, we are stabilizing disease and often improving in certain patients.

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

Does that answer your question, Ritu?

Yes, it does. Especially, it will give me -- I think it will give us what we need to round 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, I guess, slide 4 and 5 of your EAHAD presentation, and slide 6. I'm just noting that when you look at the inhibitor patients and the ones that have taken either FIBA or Factor VII, I'm wondering if there was any specific rationale or direction or directive in the protocol to use a lower dose of FIBA and/or a similar dose of Novo 7? And, how you are looking at co-administration of that in your Phase 3 program going forward at this point? Any new thoughts?

Yes, those are great questions. Akshay, do you want to handle that?

Yes. Ritu, so clearly, the earlier experience in the study have taught us that patients after antithrombin knockdown 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 received the replacement factor or bypassing agent but at a lower dose, and indeed, that has been very effective in controlling any breakthrough bleeds or bleeds that may occur, particularly during that onset period. Just when antithrombin is going down to its fullest extent.

And, that knowledge has being used and discussed with key opinion leaders further, and we will have specific language around the use of both replacement factors and bypassing agents in the Phase 3 protocols. But, it has evidence from the data currently. It looks like we can support the usage of their replacement factors and bypass agents with safety and achieve hemostasis during the onset period before peak antithrombin knockdown.

Yes. Obviously, this is an area of great interest in light of the adverse events noted for emicizumab; so we're 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.

Got it. Are there any thoughts balancing that lower dose with the number of injections? Again, on slide 6, we see that there were a number patients that required three injections although it looked like 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?

Yes, so patients are used to governing their own treatment when it comes through to bleeds. And so, generally speaking, these [were all] patients determined repeat injections, and what we're finding is that patients are requiring both lower doses of replacement factor or bypassing agent and fewer injections relative to what they were used to in the past.

And so, that again is the impact of the lowered antithrombin. In essence, when patients do have a bleed during that onset period, or maybe rarely during the stable period of AT knockdown, there is effectively a sparing effect on the need for a bypass agent or a replacement factor.

Got it. Very helpful. Thanks for taking the questions.

Thanks, Ritu.

David Lebowitz, Morgan Stanley.

Thank you very much for taking the question. Quick question on the APOLLO trial. What cardio endpoints might you be looking at in patients with the appropriate mutations? And, how would those endpoints compare with what would have been used in the ENDEAVOR trial?

Great question. Akshay, you want to handle that?

The primary, or the co-primary in the ENDEAVOR study for revusiran will be six-minute walk distance. At that endpoint specifically, it's not incorporated in the APOLLO study. However, a 10-meter walk test is another measure of what working capacity is incorporated as are other key cardiac endpoints common to both studies including biomarkers such as DMP and troponin and a series of echocardiography measures.

So I think it's a pretty comprehensive analysis and based on the encouraging Phase 2 open-label extension findings from revusiran study, currently, we see, I believe, stabilization of cardiac disease in the subset of patients that have cardiac disease there. And we look forward to uncovering the APOLLO findings later in the year.

Thanks for that and then just a quick financial question. How should we look at R&D and SG&A expenses going forward in 2017?

Yes, Mike, do you want to handle that?

Sure. 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 [petuceran] in 2018, we expect an increase in expenses in G&A in 2017 as compared to 2016.

Thanks for that.

Thanks David.

Mike King, JMP Securities.

Thanks for taking the question. Two just brief ones. Wondering will we get an update some point this year from revusiran open-label trial or study?

Yes, Mike, absolutely. Nothing formally planned at this point. What -- at the ICPP meeting, we will certainly have additional cohorts unblinded from the Part C part of the study and while we haven't yet crafted the presentation, I'm sure that there will be open-label data that will roll into that presentation.

And then I wouldn't be surprised if our clinicians and scientists asks our team to do 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 in time. The key next meeting is indeed in June at ICPP and we'll present everything we've got in the usual Alnylam transparent fashion and that will probably include patients from Cohort 1 that have been in the open-label study. You agree with that, Akshay?

Yes, that's right.

He's nodding his head. (multiple speakers)

Anything from the -- sorry, the Natural History study in 2017?

Yes.

Would that would be part of it?

Let me look to my colleagues here. Did we submit an abstract on Explorer.

I don't believe we have (multiple speakers) I think the next big goal for Natural History study, Mike, frankly, is to submit the findings and publish them because we have a comprehensive [endpoint data].

Okay, terrific. Second question. I rarely ask this kind of question throughout the course of my career but I just couldn't help but notice that if you look at Alnylam's stock behavior relative to Medicines Company over the past 30 days, Medicines is up 31%, Alnylam is down about 7%, 6.5%. I'm just wondering what are we missing, we as analysts and investors?

Because if you think rational thought process predominates, you would at least get your share of the economic interest in inclisiran in terms 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.

I unfortunately, for the first time in my career, can say I have nothing I can say. (laughter)

Not the first time that John is going to be speechless? (laughter)

You sure did. Yes, Mike, obviously, it doesn't make any sense, does it? But we're really happy for our friends at the Medicines Company. The inclisiran story is really exciting and what a wonderful outcome for patients with FOURIER and frankly, for medicine and genetics and the pursuit of science and truth. What a wonderful outcome.

Yes, my hats off to you for recognizing the target so far in advance of everyone else and it looks like the injunction is going to stay against Regeneron so there's one less player in the marketplace, so congrats on that. Okay. Thanks, guys.

Gena Wang, Jefferies.

Thank you for taking my questions. First one is regarding the timing for revusiran ENDEAVOUR data. Just wondering, would that be before APOLLO readout?

Yes, Gena, we haven't yet formally decided where and when but I think that we probably will have that update sometime prior to APOLLO readout. 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

Okay, great and when would IONIS will have their SAT data ahead of APOLLO data so just wondering how do you see the IONIS data [recently] to the APOLLO date?

Yes, that's a great question, Gena. Let me make some comments then maybe Barry or Yvonne will add in here as well. Obviously we do think that the IONIS program will be positive we believe that based on ETR knockdown, there's reason to believe that it will be but it does have a shorter endpoint and they do have a smaller sample size, considerably smaller sample size than 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 -- our 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 that, they have co-primary endpoints for both the mNIS+7 and also with quality of life and that's a bit of a higher bar yet still. So I think they will be positive. We believe they will be positive but it is possible that they are borderline trending not be less than 0.05 and obviously from a commercial perspective, that would be better for us.

But we are assuming that they will be positive and all 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?

I think you summed it up. The only thing I will emphasize is that we're counting on them being positive in the market and we're applying for that. But as John said, there's a chance just to math that they don't hit the 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 knockdown, if that matters, for a very good readout of APOLLO.

So, Gena, does that answer your question?

Yes, yes. If I may just squeeze in one quick question for Fitusiran Phase 3 trial in hemophilia. Could you share with us your powering assumption for the [3] trial?

Let us do that when we initiate the study and present the detailed results, the detailed design because they're still -- as we align on the final matters here with the regulators, we don't want to put something out that doesn't -- that might change it a little bit. So let's just wait, Gena, on that question but it's a very important question.

Thank you.

I think it's fair to say, just to provide some color, the study is -- these studies are going to be way, way overpowered for efficacy based on the annualized [read] rate and they are really powered for the purposes of safety.

And that's in keeping with the ancillary landscape.

Exactly

Thank you.

Geoff Meacham, Barclays.

This is Evan on for Geoff. Thanks for taking the questions. Congrats on the progress; so just one on C-5 program. I noticed that you indicated that Sanofi Genzyme has elected not to opt into development. Can you just give me any color as to why they decided that and what your plans are to take that forward as a standalone?

Yes, yes, well, look, I mean, 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 be realistic about the opportunities for these products and the rest of the world where they, in some cases, is where they have a right.

So with C-5, their only available territory for the agreement is rest of world and I think as they look that rest-of-world opportunity in light of the portfolio opportunities, they have elected to not pursue that. So it's their decision. Frankly, we enjoy that outcome because it means that we retain global rights for the asset and we end up have 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, get along with fitusiran where we also have global rights becomes a foundations for Alnylam, extending beyond our immediate commercial territories in North America and Western Europe. And that's a great way to be able to build the business in a way that we think will be very exciting for us in the future.

And then just -- have your plans regarding the development of CC5 changed at all? I think the timeline is -- what are the next steps in that program now that you're going it alone?

Well, maybe, Yvonne, you want to answer that question?

We are reviewing our opportunities and we will be progressing C-5 into clinical development as we go through this year.

Okay. Then just with the recent data that Amgen [hopline]. Does that change kind of your thoughts with Orion? I know we had -- you had mentioned prior on the call but any other additional color as to how we can think about a Phase 3 trial design and when we should be looking on any updates with the [interest-run] program

Well, we happen to have an Alliance dinner with the Medicines Company on Thursday night when the data broke and then 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.

We're beginning to think that through but it's really the Medicines Company's program to really mark this out. I know and you can obviously expect that the FOURIER data impacted their thinking quite a bit and that will be reflected in how they advance the opportunity in the ASCVD indication.

Okay, great. Thanks for taking the questions. Appreciate it.

Christopher James, Ladenburg Thalmann.

Thanks taking the questions and squeezing me in. Could you or maybe how should we think about the baseline demographics and cardiac characteristics of patients in APOLLO and concomitant meds as well to that of ENDEAVOUR?

Yes, Akshay, you want to that one?

Yes so Chris, the APOLLO population, just to summarize, about 53% of the peripheral neuropathy, about 53% of them have cardiomyopathy discernible at baseline and those have been documented. They have essentially (inaudible) association one or two (inaudible) cardiomyopathy.

And the big difference there between that and the walking capacity in ENDEAVOUR is that in ENDEAVOUR, they had a much lower walking capacity and there was significantly more (inaudible) association classifications Class 3 patients, which there aren't any in APOLLO essentially. So it's -- we do have a significant number patients with mic cardiac and neuropathic phenotype but they general have a milder degree of cardiac severity but it's still a significant burden.

And concomitant meds?

Well, there, we're blinded as you know in APOLLO but we see the full range of com meds that you would expect to see in patients with cardiac disease just as we have seen in revusiran. That's about as much I can say right now (multiple speakers).

Thanks.

Madhu Kumar, Chardan.

Good afternoon, everyone. So my first question is for fitusiran, I sure you appreciate the unique drug in hemophilia as it goes out to both hemophilia A and B. So how do you consider the powering of patients with each disease that's necessary to demonstrate efficacy for both diseases?

And my second question is on ALN-TTRsc02. As you think about that drug in relation to APOLLO, how have you thought about future clinical development in terms of trial design and timing in a post-APOLLO world?

Why don't we have the first question go to Akshay and maybe Yvonne, you can handle the TTRsc02 question. Akshay?

As far as fitusiran is concerned, when it comes to efficacy in hemophilia, sadly, the signal is high because these patients have a lot of bleed so when they go on drug, either without drug or (inaudible) replacement factor you generally tend to get it very strong treatment effect. So it's relatively straightforward statistically showing efficacy in terms of changes in ABR.

And even a study with mixing phenotype of both hemophilia A and B patients within the study, we will be able to cover the data overall, looking at a whole population as well as individual subset and show statistically significant evidence of efficacy. So I think we feel pretty good about that, and to John's earlier comment, the issue with hemophilia studies is always not so much about showing clinical efficacy from a statistical sense, but how big the database have to be in terms of sufficient safety being demonstrated in those sufficient number of individuals long enough.

And there, of course, as I mentioned in our comments, we are engaged with discussions with regulators that are maturing now, we look for going to Phase 3 studies. But I think the final size of the package will be determined by safety considerations as opposed to efficacy.

Yvonne, do you want to comment on TTRsc02?

I think we're impressed with the emerging profile with sc02. We're looking at probably a 50-milligram dose given quarterly so in a great process in durability. In terms of next steps, we really have to look at the details of APOLLO before we can finalize what the study design might look like and clearly aligned with regulators before moving forward. So it really it's a post-APOLLO consideration.

The only thing -- I agree completely. The only thing I would add is that we've also -- the field has come to appreciate in the seven, eight years we've been working on hereditary TTR, that this is a one continuum of disease and not multiply different diseases so we may have an opportunity on ALN-TTRsc02 to understand the continuum the disease here and may have a broader opportunity there as well.

Thanks guys.

Alethia Young, Credit Suisse.

Thanks you take my question, one which you may not answer so I'll ask a couple. How do you think specifically about handling the dropouts in the APOLLO trial?

Yes. Akshay, do you want to handle that?

Yes, there are prescribed ways to handle dropouts and how they influence the primary endpoint at the end of the day. Outside physicians are working closely with the agency to make sure we're in concordance with the approach. We are going to very conservative but we know already from the overall dropout rate that compared to prior study for FAT with various other agents, we're comfortable with that we have the drug that (inaudible) and we're comfortable with the dropout rate, but I don't think that should be a major factor for us at the current time.

Yes I will 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 into the open-label study after they complete 18 months of dosing and that's been very encouraging as well as it relates to the overall story.

Great. Maybe just one more. I think someone before me asked a little bit about the commercial landscape for fitusiran but maybe could you talk about how many patients let's say, pure FAT patients you think are in a diagnose pool that's available now and then characterize that versus where you think you need to grow to get to somewhere closer to the prevalence, which may be 10,000 globally? But I wouldn't expect all those patients to readily be available so I'm just trying to figure out how to frame the opportunities so when the trial works, we've got the right numbers in 2018 or 2018 or beyond?

Barry?

Great question, Alethia. So as you know, the numbers of -- potential numbers of patients in US and Western Europe is about 50,000; but hereditary TTR will work like you see many orphan diseases work. There's a much lower number of those patients in the system and our job will be assuming on a positive APOLLO to ensure that we are educating the field on earlier and early diagnosis and patient findings activity.

So we think there's clearly a sufficient number of patients to complete multiple Phase 3 trials across multiple drugs and we'll be diligently working on ensuring that those patient finding activities are incredibly robust and leads to more and more diagnosis. It would be premature to actually name specific numbers at this point.

I think one thing to add is, I think, we've made great progress at Alnylam where we offer a diagnostic and I think about 900 patients will serve a lot of space in this program, with about [15]% diagnosis rate. I think is quite encouraging for commercial picture

Yes I think that's a really good point, Yvonne, and that's just the beginnings of our program. So it is -- obviously, if and when fitusiran makes it to market, the availability of the therapy will increase the interest in 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 patient which is what counts.

Thanks.

Paul Matteis, Leerink.

Hello, guys. Thank you very much for taking a couple of questions. My first one is on the revusiran safety analysis. I'm wondering if you think that, that -- if you're planning on submitting to FDA, and if you think FDA will want to look at that in the context of the fitusiran data and how they think about labeling fitusiran, both with respect to maybe 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 they have visibility into this, how balanced the rate of cardiac involvement is in the two arms, drug and placebo in APOLLO? Thanks a lot

Okay. Great questions, Paul. You want to handle them, Akshay?

We'll come back to the second one. I couldn't hear it fully but with respect to ENDEAVOUR and findings associated with revusiran and (inaudible) effects of how the agency might interpret that with respect to fitusiran relabeling. I think a few points. Firstly, the FDA and other regulators are very clear. That drug development is a case-by-case type of find so they look at each database in isolation and they certainly want to go through fitusiran very carefully in and of itself.

They have to do that because if we develop to ase inhibitors on two (inaudible), it doesn't mean just because XY happens with one, it's going to happen with the other one and if you look at the labels of different drugs within a class, they are not identical. We know that fitusiran is a different [ogliocyte] from revusiran, so it's a different drug substance itself.

We also know that and we discussed this in the aftermaket revusiran that the signal that we're seeing in association with revusiran, an imbalance in cardio mortality hasn't been seen in the rest of the petuseran database, nor the overall Alnylam [RnI] database.

And we know also that some of the (inaudible) events that were reported Phase 2 open-label extension study for revusiran haven't been seen associated with petuseran or the rest of our database in (inaudible) patients. So clearly, there is no obvious evidence of platform effect of the type that may or may not have occurred revusiran in the association of that drug at the end of that study.

So I think we feel pretty comfortable based on both scientific and also the guidance by the DMC for APOLLO that the APOLLO study can continue unaltered and so I think we already continue to be very excited about the outcomes for APOLLO later in the year. And I anticipate a good dialog with regulators around that. Now the second part of your question?

I heard it so maybe I'll answer it and you can color -- and add that in. So there is no stratification for cardiac disease in APOLLO but 54% of patients have cardiac symptoms, sorry 53%. So I would expect that the balance will be very good between the two arms at the end of the day but there was no stratification for those features at enrollment.

Okay, do bad patients -- are patients who are primarily FAT, but have cardiac involvement, do they progress more quickly or do they have a shorter lifespan than their counterparts that just have neuropathy?

Yes, 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 paint extremes, [V13m] patients in Portugal tend to do better, then V13m patients in northern Sweden or Japan. We don't know why that's the case but that is the case.

Part of it seems to be associated with (inaudible) cardiomyopathy but some of the V13m patients in Japan get, for example, than Sweden get. There other mutations like T-68 which is just an aggressive mutation and causes a more accelerated and severe form of both neuropathy and cardiomyopathy and there are other more rarer mutations still that cause either a very superior neuropathy or cardiomyopathy. So a lot of it seems to be mutation driven but also the age of the patient and the country where you live.

Okay, thank you guys. Appreciate the help.

Thank you. That concludes 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.

Thanks operator. Thanks everyone for joining us this afternoon. As I said at the beginning, 2017 is a pivotal year for Alnylam transition for a commercial stage Company. We're thrilled about that. We're thrilled 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. Goodbye.

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