Ionis Pharmaceuticals Inc (IONS) 2016 Q3 法說會逐字稿

Good day everyone.

And welcome to Ionis Pharmaceuticals, Inc.

third quarter financial results conference call.

All participants will be in a listen only mode.

(Operator Instructions)

leading the call today from Ionis is Doctor Stan Cook Ionis is Chairman and CEO.

Doctor Cook, please go ahead.

Good morning and thanks everyone for joining us on this surprising day.

For the conference call we'll discuss the third-quarter financial results and business highlights.

This morning Lynne will provide a little more color on our announcement for Monday following the results in our phase 3 clinical trial in children with later-onset SMA.

And the advancement of our new [Nusinersen] program.

Following Lynne's update, Richard will provide an update on our pipeline including more detail about the positive Ionis factor 11 RX data recently announced.

And then importantly Richard will provide a brief update on what we have learned about the (approximate side pedia] events in both phase 3 clinical trials that we've discussed before.

And that's for them, walk you through the financial results, I'll wrap up the call and of course then we will open it up for questions.

Joining me on today's call are Lynne Parshall, Chief Operating Officer; Beth Hougen, Chief Financial Officer; Richard Geary, Senior Vice President of Development; Sara Boyce, Chief Business Officer; and Paula Soteropoulos CEO of our whole (inaudible) subsidiary Akcea.

And Wade Walke, Vice President of Corporate Communication and Investor Relations.

Wade will you read our forward-looking language statement for me?

Yes.

Thanks Stan.

Reminder to everyone this conference call includes forward-looking statements regarding the financial outlook for Ionis's business, the business Akcea Therapeutix, and the therapeutic and commercial potential of Ionis's technology in product development.

Any statement describing Ionis's goal, expectations, financial or other projections, intentions or beliefs including the commercial potential of SPINRAZA, IONIS-TTR rx, Volanesorsen, and IONIS Factor XI Rx is forward-looking statement should be considered at risk statement.

Such statements are subject to certain risk and uncertainties.

Particularly those inherent to the process of discovery development and commercializing drugs that are safe and effective for use as human therapeutics and the endeavor of building a business around such drugs.

Ionis's forward-looking statements also involve assumptions that if they never materialize or prove correct could cause it's results to differ materially from those expressed or implied by such forward-looking statements.

Although Ionis' forward-looking statements reflects good faith judgment of its management.

These statements or based only on facts and factors currently known by Ionis.

As a result you could caution not to rely on such forward-looking statements.

Even though the risks concerning Ionis programs are described additional detail on Ionis's annual report on form 10K and for the year ended December 31, 2015, and it's most recent quarterly report of Form 10-Q which is on file with the SEC.

Copies of these other documents are available from the company.

And now I would like to turn the call over to Lynne.

Thank you Wade.

Ionis just recently announced the brand name for Nusinersen, SPINRAZA.

It's just one more step towards commercialization.

We will refer to Nusinersen as SPINRAZA from now on.

As well as I can't remember.

As you can imagine we are tremendously excited about the positive phase 3 data announced a few days ago from CHERISH.

Our set evaluating the effects of SPINRAZA on children with later-onset SMA.

In this interim analysis patients who receive SPINRAZA had a four-point improvement in the hammersmith scale.

Compared to a 1.9 point decline for their untreated contemporaries.

A difference of nearly 6 points.

This timing was highly statistically significant with a P value of0.0000002.

What this means is these children with SMA who were treated with SPINRAZA got stronger over there 15 months of treatment.

And were able to achieve motor milestones that they cannot achieve before the study.

As you know untreated these children would have been expected to lose motor function.

Because of these positive results the children of the CHERISH study now have the opportunity to be transitioned into the open label extension study named SHINE.

In which all of them will receive SPINRAZA treatment and the CHERISH study will be stopped.

Biogen will be presenting detailed data from the CHERISH study at an appropriate medical meeting.

These CHERISH data confirm what we have already seen across the entire clinical program.

Consistent benefits after treatment with SPINRAZA in patients with all forms of SMA.

In the most severe forms of the disease we are seeing increased survival and achievement of motor function never seen before in babies with SMA.

And all forms of SMA infants and children are getting stronger after treatment with SPINRAZA.

These effects of not plateaued in our studies.

With some children to be treated with SPINRAZA for nearly 5 years.

We've also observed good safety in they over 280 patients treated.

We're very proud to have designed and conducted a clinical program that is provided a large and robust set of data on the effects of treating infants and children with SMA with SPINRAZA.

On behalf of everyone at Ionis, I would like to thank the parents of infants and children with SMA who participated in our trials, and the physicians have cared of these infants and children for helping us achieve the success.

We enlarge and believe the extent of these data supports the potential broad use of SPINRAZA in patients with SMA.

Because of that Biogen is seeking a broad label.

Of course Biogen discussing the possibility of this new CHERISH data with the regulators, as they have been reviewing the marketing applications.

And we do not expect these new data to impact the regulatory review and approval timelines.

And the expedited review in both the US and EU is well underway.

I would like to take a minute to recap our SPINRAZA accomplishments.

First, per symptomatic infants with SMA and the NURTURE study who began treatment before six weeks of age are achieving developmental milestones such as sitting, rolling, standing, and walking on essentially the same schedule as infants without SMA.

In our ENDEAR study slightly older and already symptomatic infants who are treated with SPINRAZA shared a substantial and highly statistically significant improvement in achieving developmental milestones compared with the untreated babies.

Biogen plans to discuss these data in detailed with the British Pediatric Neurology Association meeting in January 2017.

This data compliments the data from our open label study, which infants with SMA are also achieving similar milestones and are living well beyond what will be predicted by natural history.

Eight of the babies in our open label study now toddlers are over three years old.

In our other open label study children with later onset SMA are continuing to improve in their motor functions, and have yet to reach a plateau.

Some of these children have been treated for nearly 5 years.

These observations are concerned by the control data we just announced from our CHERISH study.

In less than two months after reporting positive ENDEAR phase 3 data the joint Biogen and Ionis team submitted the final components of the NDA, and filed [MAA] less than two weeks after that.

The fastest filing in Biogen's 38 year history.

The FDA has accepted the SPINRAZA NDA and granted Biogen's request for priority review in just over a month after submission.

Which can typically take up to two months.

The [BMA] has also validated the MAA and granted accelerated assessment for SPINRAZA.

Biogen is preparing submit filings in multiple other regions in the coming months.

In short the breath and depth of data supporting our regulatory filings approvals and commercialization is significant.

As we designed it to be.

And we are pleased the regulators are responding accordingly.

It is a truly an exciting time for us and patients with SMA and their families to be on the verge of having of the first drug on the market to treat SMA.

SPINRAZA has the potential to change forever the conversation between a doctor and parents when diagnosing SMA.

As such Biogen's operating with a strong sense of urgency to bring SPINRAZA to patients in need.

Biogen early access program is active at multiple sites and countries around the world to enable infants and children with SMA to receive SPINRAZA while waiting regulatory approvals.

SPINRAZA drug supply is in place.

Further Biogen is prepared for the potential launch of SPINRAZA in the US as early at the end of this year.

Or first quarter next year.

We're very pleased to chosen Biogen as our partner for SPINRAZA.

And now I would like to turn the call over to Richard.

Thank you Lynne.

This year we have made substantial progress across our large and diversified pipeline of over three dozen drugs in development.

Just last week we reported positive results from a phase 2 study evaluating Ionis Factor XI Rx in patients with end-stage renal disease on dialysis.

IONIS FACTORE XI Rx is a [ two-prime mo] antisense drug targeting Factor XI.

Factor XI is a unique target for an antithrombotic drug because human genetic preclinical and clinical studies have shown in that decreased Factor XI activity result in decreased clot formation without increasing bleeding risk.

Just to remind everyone of our results today.

We've shown in a study that was published in the New England Journal of Medicine that patients undergoing total knee replacement treated with Factor XI Rx had a sevenfold lower incidence of venus thromboembilisms or VTE's compared to those treated with an [enoxaparin].

The most impressive finding was, however, this significant reduced incidence of VTE was accompanied with no increase in bleeding.

This is the first time an antithrombotic drug demonstrated that an antithrombotc effect could be disassociated from bleeding risk.

This means that Ionis factor Factor XI Rx has the potential to be useful in many different therapeutic settings.

Especially for patients who are at high risk for blood clots, and also high risk for bleeding.

The study we reported on last week was looking at 200 and 300 mg weekly doses of IONIS Factor XI Rx in patients with severe kidney disease who were receiving dialysis.

These patients are very fragile and at a high risk of bleeding.

The main goal of this study were first, to show that IONIS Factor XI Rx can be dosed safely in patients with severe kidney disease.

Second, to understand if a drug could effectively reduce Factor XI activity in patients on dialysis.

And third, to identify the best dose do in forward into longer, larger studies in this patient population.

We're pleased that this study met all three of these goals.

In this study, Factor XI activity was reduced up to a mean of 71% in patients to do with IONIS Factor XI Rx.

A result was highly statistically significant in both treatment groups.

In addition we observed a decrease in severe blood clots in the dialysis circuit after six weeks, compared to baseline in both treatment groups, but not seen in the placebo group.

And IONIS Factor XI Rx favorable safety tolerability profile in this study.

Patients treated with 200mg or 300mg per week had no clinically meaningful reduction in platelet levels, and no treatment related major our clinically relevant non major bleeding.

We did observe an increase in minor bleeds in patients treated with a 300 mg dose that was not consider clinically meaningful.

In addition there were no treatment related serious adverse events or clinically meaningful changes in lab values including those related to liver function.

Both 200 mg and 300 mg doses of IONIS factor 11 RX are well tolerated in the study with no flu like or injection site reactions.

So these results provide further support for the potential therapeutic benefit for IONIS Factor XI Rx could have for patients who need an antithrombotic, but are at increased risk of bleeding.

We are enthusiastic about the potential of Factor XI Rx to address this unmet medical need.

Earlier this quarter we also completed our randomized placebo-controlled phase 1 study evaluating IONIS-DGAT2 Rx in helping over weight volunteers.

IONIS-DGAT2 Rx is generation 2+ antisense drug is designed to reduce the production DGAT2, which is an enzyme that catalyzes the final step in triglyceride synthesis in the liver.

In the phase 1 study, IONIS-DGAT2 Rx was safe and well-tolerated after six weeks of dosing at doses up to 300mg per week.

Again we did not observe any clinically meaningful platelet declines in this study.

And based on the safety and tolerability profile of IONIS-DGAT2 Rx and it's differentiated approach for potentially treating patients with Nash by reducing triglyceride synthesis in the liver, we're currently planning a phase 2 study and will share a development plan update with you as we get closer to starting the next study.

We recently completed a randomized placebo-controlled phase 2 study evaluating IONIS-FGFR4 Rx in obese patients.

We designed this study to measure increase metabolic activity and weight loss in obese patients.

Unfortunately we did not see the robust activity that we had hoped to see.

And therefore we have decided to discontinue development of IONIS-FGFR4 Rx.

However, I would like to point out that the drug did show a good safety and tolerability profile.

We do not observe any clinically meaningful platelet declines in the study with doses at 300mg per week.

These safety data and those from IONIS-DGAT2 Rx provided two additional pieces of evidence that clinically meaningful platelet declines are not a platform issue for our second generation drugs.

We also recently completed a review of our overall development portfolio as we do every year.

We have decided not to advance IONIS-GCCR RX our glucocorticoid receptor drug.

Based on the current data package we have a high bar when we make a decision to move a drug forward, and in the case of IONIS-GCCR Rx we decided it makes more sense to focus our resources on other more important programs.

We remain very enthusiastic about our other diabetes program IONIS-GCGR Rx.

Targeting glucagon receptor.

Which has a compelling profile for severe diabetes.

We reported positive interim data in July from the ongoing dose range findings study, which is now coming to completion.

Results for both the previous phase 2 study an interim data from the current phase 2 dose ranging study show that the treated patients experience robust reductions in HPA 1C.

Importantly again there been no clinically meaningful platelet declines reported in either of our GCCR or GCGR programs.

Let me take a few minutes to update you on our latest findings on platelets.

Six months ago we reported that we had encountered a few serious strong [sarteni] events in our phase 3 studies with IONIS-TTR Rx and Vaolanesorsen.

Stan discussed at that time and again in quite a bit of detail at our RD day this summer the steps we are taking to assure continued patient safety in those trials.

Stan also provided information about our investigations into the potential causes of these events.

Including factors that might have contributed to the platelet declines.

Since that time we've made solid progress in our investigations and also I would like to give a brief summary of where we are today.

First and most importantly, there have been no new series thrombocytopenia events in any of the programs since the initial put report last May.

All of our programs continue on track.

Including the phase 3 studies with IONIS-TTR Rx in FAP, and Volanesorsen in FCS.

Also to told you today about results from five other programs with studies up to six months in which we have also not seen any meaningful platelet declines.

You will recall that Stan presented information derived from integrated safety database that showed had not seen serious thrombocytopenia events occur with 15 years of experience in our two-prime [mo] platform.

And supports our conclusion that serious thrombocytopenia is not class-effective or platform.

But when we talk about our class-effect, we mean an effect that is seen in most or all members of a chemical class.

Just a reminder, different chemical classes have different properties, and even minor chemical changes can have substantial effects on safety and efficacy.

Of course, the potential class related effects can only be identified as you obtain significant preclinical and clinical expense with a particular class.

So the experience we have with our two-prime mo antisense drugs, should only be applied to that chemical class.

And of course experience with other chemical classes should not be applied to our two-prime mo drugs.

Our confidence in our platform comes with the extensive experience we have with our [o] chemistry.

With our two-prime mo class we have substantially greater and longer-term experience than with any other chemical class.

Since we recorded preliminary analyses of the safety database we published the first review of our first safety database showing no evidence of clinically meaningful platelet declines in normal volunteers.

Just recently we have completed an investigation of our integrated safety database that includes data from 16 two-prime mo drugs that of completed phase 1, 2, or 3 studies.

And this database includes the full safety data from all of these completed placebo-controlled trials and their open label extension studies.

This database is a unique resource for us.

It allows us to look across clinical trials to help us better understand the safety and tolerability of our [in patients] platform.

This database represents a safety data from over 2,600 subjects dosed with two-prime mo antisense oligonucleotides of which about a 1,000 subjects have been dosed from three months to more than 4.5 years.

Representing a total exposure of more than 800 patient years.

We have now submitted for publication in a peer review journal a paper summarizing our findings from this review.

It shows that there are no serious thrombocytopenia events and no clinically meaningful platelet declines in the database.

Nor is there evidence of increased risk of bleeding.

These observations both from our integrated safety database and from our recently completed clinical studies support our view that what happened in the to ongoing phase 3 studies is unique.

Now let me tell you what we have learned about the unique characteristics of the IONIS-TTR Rx and Volanesorsen trials and diseases.

Both of these studies are ongoing and blinded.

Both are still on track to have data readout in the first half of 2017.

Let's first deal with Volanesorsen.

As we presented at RD day natural history shows patients with FCS experience substantial fluctuations in platelet counts.

Sometimes reaching as low as 40,000 platelets per Mel.

We believe these abnormal fluctuations in platelets may be related to the patients extremely high triglyceride levels.

Because extremely high triglyceride levels can result in increases platelet count and platelet production, variations in triglyceride's may lead to a greater and lower drive for the body to make platelets.

Of course when we treat with Volaneseorsen we know we can substantially lower triglycerides, and that could in turn result in a reduction in platelet levels.

The fact we have observed series thrombocytopenia events only in FCS patients, and not in any other patients treated with Volanesorsen in either phase 2 or phase 3 studies, provides further evidence that the disease background contributed to these events.

We're also exploring the fact that in the FCS study patients receive two high [voles] doses of heparin facilitating assay looking at lipoprotein lipase activity.

This heparin dose could also have contributed to the thrombocytopenia we have observed since one of the serious reductions occurred coincidentally with a heparin dosing.

This it does not exonerate Volanesorsen as a contributer.

But rather suggests that the combination of multiple drivers may have contributed to the serious platelet reductions.

Of course proving cause and effect for platelet declines is very challenging.

So we continue to work on this.

The situation with IONIS-TTR Rx is different.

We've looked at natural history studies of patients with FAP and confirmed that they do in general have lower platelets.

However these patients do not experience the broad fluctuations of very low platelets that FCS patients experience.

So we do not think the natural history of the disease is likely to have played a major role in the thrombocytopenia events we observed.

We believe instead that the back ground for inflammatory factors may be triggering the production of non-drug dependent anti platelet antibodies.

Which we have detected in some patients in our IONIS-TTR Rx FAP study.

This is something we are observing in a FAP patients in our IONIS-TTR Rx study but not in the FCS patients in our Volanesorsen studies.

Today we are working to understand what those pro-inflammatory factors might be, and to develop ways to identify the subset of FAP patients who may be at risk for platelet declines.

So as of today, we are confident first of all that there is no class effect on platelet with two-prime mo ASOs.

We believe that's what we have observed in our TTR and Volanesorsen programs are most likely unique events, and importantly, unique from each other.

With the disease is likely at committing factor for the FCS patients and the background inflammatory fracture likely contributing to some TTR FAP patients.

We have many ongoing investigations and will continue to keep you updated as we learn important new information.

Notably our platelet monitoring and both Volanesorsen and IONIS-TTR Rx program is working well.

It is will accepted by patients and physicians treating these very ill patients.

As we continue to advance our pipeline programs and add new drugs into our pipeline, you're going to see that the more and more of our drugs are more potent [like us], Gen 2.5, or like a plus Gen 2.5 drugs.

The substantial increase in potency from these drugs means that we can treat patients with doses that are tenfold or more lower than our standard two-prime mo drugs.

As such, low doses we believe the risk of potential safety and tolerability issues including clinically meaningful platelet declines is dramatically reduce.

And with that I would like to turn the call over to Beth.

Thank you Richard.

We ended of the third quarter with operating income and net income primarily because of the $85 million in license fees we earned.

This included the $75 million from Biogen for licensing of SPINRAZA, and $10 million from Janssen for our first development candidate under that collaboration.

We maintained our strong financial position by ending the quarter with more than $685 million in cash.

In the first nine months of this year, we earned $186 million in revenue comprised of $100 million from license fees, $46 million from amortization of out front payment, and $40 million from payments reflecting the progress of our partner program.

And we have the opportunity to earn revenue from additional milestone payments before the end of the year.

Our pro forma operating expenses of the first nine months of the year for $217 million, and as anticipated increase compared to the same (coughing) day [launch in store].

The increase in our operating expenses was due in large part the five phase 3 studies we're conducting.

In addition Akcea has continued to build the commercial organization and infrastructure needed to launch Volanesorsen.

As a result of the successes we have had in our business, we ended the first nine months of the year with a $31 million pro forma net operative loss and $688 million of cash.

Our financial results to date our in line with our expectations, and we remain on track to meet our financial guidance of a pro forma net operating loss below $60 million range and the year and cash balance in excess of $600 million.

Looking forward to the potential SPINRAZA approval and launch we are excited about adding SPINRAZA commercial revenue potentially as early as later this year or Q1 2017.

Potentially followed by commercial revenue from Volanesorsen and IONIS-TTR Rx in 2018.

Having these commercial revenues to our existing base of partner revenue positions us for continued and increasing financial strength.

And now I'd like to turn the call over to Stan for closing remarks.

Thanks Beth.

We at Biogen are profoundly committed to bringing SPINRAZA to patients in the SMA community as rapidly as possible.

These new most recently the developments that Lynne summarized for you bring us even closer to having -- bringing this important new medicine to patients who just really need it.

SPINRAZA is a great example of the power of antisense technology.

To design an antisense drug with a specific mechanism to treat a severe [unstable] diseases that other platforms can't address.

In fact, if you think about the remarkable profound effects that we're seeing in both infants and children, it is even more remarkable when we realize that is being accomplished by changing the splicing of the single pre-messenger RNA.

In my mind that is the epitome of precision medicine.

Beyond SPINRAZA we have much more to come from our broad pipeline of first-in class and best in class drugs in development.

Next up we will rephrase pre data from other phase 3 drug.

Volanesorsen, for patients with severe triglyceride disorders.

SES and FPL.

And IONIS-TTR Rx for patients with TTR amyloidosis.

In the first study readout for Volanesorsen will be our phase 3 study in patients with severely high triglyceride called compass.

At the end of this year.

Followed then by a phase 3 data in the first half of next year from Volansorsen and FCS, and from IONIS-TTR Rx and FAP.

We are well along in preparing regulatory filings so we will be in a position to file for marketing authorization soon after we analyze the phase 3 the data from these programs assuming the data is positive.

TSK continues to prepare for the potential launch of IONIS-TTR Rx.

And the Akcea team is actively preparing for the launch of Volanesorsen.

We believe these drugs have the potential to deliver therapeutic benefit to patients who have often fatal diseases with no available or inadequate -- or adequate therapies.

We look forward to substantial commercial success with these two drugs as we -- as doing with SPINRAZA.

We're also encouraged by last week's these two data for IONIS-Factor XI Rx which further supported IONIS-Factor XI Rx as the first and only antithrombotic in development to demonstrate robust activity without increased bleeding risk.

We have an exciting couple of months ahead with multiple [data] events across our pipeline.

We plan to hold a pipeline update webcast during the first week of January to provide additional color on these data readouts.

Along with new data from several of our LICA drugs in clinical development.

So in conclusion we believe we're creating great value.

All of us are thrilled to be able to offer hope to the SMA community even earlier than we had planned.

To have three potentially transformational drugs close to commercialization is an incredible achievement of which we're very proud.

We believe that each of these phase 3 programs has the potential to bring tremendous value to patients, physicians and shareholders.

A strong financial position today, and the potential for commercial revenue allows us to continue to advance our pipeline and the technology focused on providing value today and then well into the future.

With that's, I will open up the call for questions.

William, if you can set us up for Q&A please.

(Operator Instructions)

Our first questioner today is Chad Messer, Needham & Company.

Great, thanks.

Good morning.

Very exciting this new SPINRAZA data, congratulations.

Assuming a broad label, just wondering if you had any thoughts on how to handle dosing?

The ENDEAR and CHERISH studies used slightly different regimens.

And obviously if there is going to be patients on this for extended periods of time, what are you guys going to be recommending in terms of dose frequency?

Lynne, why don't you take that question, please.

Sure.

We did have different dosing in the type 1 infants or in the infantile ones, that patient population, both in terms of the induction dose, as well as in terms of the frequency of maintenance dosing.

And both of those dosing regimens we think should be included in the label.

And Biogen is working on detailed instructions to physicians about dosing.

Again, I think you should remember that work on this drug is still -- it is six years since we began the research program.

The research program, not development.

So, work will continue.

And we know that the doses we have, at least in the infants we have shown, we're getting the theoretically maximum conversion in splicing.

So we think we got the right dose.

And as we prolong treatments, certainly Biogen will be looking at lengthening dose intervals and all sorts of things to make it even more convenient for patients.

Okay.

Great.

Thanks.

Our next questioner today is Stephen Willey from Stifel.

Good morning.

Thanks for taking the questions.

Could you just provide a little bit of color around the period of time by which Bayer has to exercise its (inaudible) program.

They have -- I don't want to be too specific.

They are in that evaluation period now.

And when they complete that, we'll of course let you know what the next steps are.

Okay.

And then, I guess maybe for Richard, I know the minor bleeding events that were observed in that study were not deemed to be clinically meaningful.

But could you maybe just provide a little bit of characterization around those events?

Those minor bleeding events are common in this patient population.

In fact, the minor bleeding events were seen in all of the doses, including the placebo.

But the count was a bit higher in the 300 milligram.

In all cases these were of course considered not clinically significant.

Remember, Steve, these folks have indwelling catheters, shunts, and so they're getting heparin.

There's a lot going on with them.

So they have constant problems like that and what we saw mostly was that sort of thing, very, very minor stuff.

Okay.

And then maybe just lastly, there has been a lot of discussion around some of the regulatory feedback that a competitor of yours has received in the SMA space.

And just wondering if you could make any comment as to whether or not this now I guess changes the strategy with which Biogen goes to market in terms of urgency, in terms of just trying to accelerate rate of patient identification and onboarding?

Thanks.

I think Biogen and we are urgent and have been urgent since the first day we were introduced to SMA.

We don't need commercial reasons to feel a sense of urgency to see these babies and children gain benefit, nor does Biogen.

And we think we've got by far the best drug, with a drug that works in all forms of the disease, with solid randomized sham controlled data to say that the drug is unequivocally safe and efficacious.

So we like our position.

And we're looking forward to the drug bringing benefit, and being a commercial success.

Lynne, do you want to add anything to that?

I would like to add one thing, because obviously we are happy that any alternatives might exist for patients with SMA.

We've conducted a very robust clinical program looking at all forms of the disease, and shown very consistent and positive data in all of these studies.

But when you think about this from a commercial perspective, think it is important to put in perspective that the patients who could initially be available to a competitor should they get their drug approved eventually, is a very small portion of the commercial opportunity for this drug.

If Biogen is successful in achieving a broad label for SPINRAZA, which we hope and expect they will, based on the strong data package that we have, all of the patients who exist today who have SMA are potential patients for the drug, commercially.

Whereas if a drug were to get approved for just type 1 patients in their first 3 to 6 months of age, that is about 400 patients a year, 400 or 500 patients a year.

We think we've got a great drug.

And we hope that other drugs will come.

But we think our drugs are going to fundamentally change this disease.

That is what I think is important to take away.

All right.

I appreciate the commentary and congrats on the progress.

Thanks.

Our next questioner today is Eric Schmidt, Cowen and Company.

Good morning and congrats on the progress with SPINRAZA.

Maybe for Lynne, would you be able to quantify how many centers the drug is currently available at or how many centers you might be ready to launch with, if the launch did come toward year end?

And then when you look toward the launch, what do you think would be rate limiting?

Would it be reimbursement or the logistics of actually getting centers to dose the drug, or physician or patient education?

Thanks.

I can tell you -- give you information about the number of centers in the United States.

We had 20 centers in the United States involved in our trial.

There are about 40 to 50 SMA centers totally, about 150 neuromuscular centers in the United States.

All of those are potential sites to have capacity at launch.

Biogen is very actively working with these sites to make sure that the ones that didn't have experience with the drug in the clinical trial are ready.

And I think getting these sites up and ready as rapidly as possible is a high priority for them.

And that will obviously mean that the backlog of patients who are waiting to get access to the drug can be processed as rapidly as possible.

In terms of what could be rate limiting?

I think initially capacity is rate limiting.

And that is Biogen's highest focus right now.

And again, there are many, many patients out there, especially if we are successful in getting a broad label, who want access to the drug, and being able to bring those patients in and get them started on the drug as rapidly as possible is facilitated, the more synergy you have that can absorb those patients, and that is one of Biogen's highest priorities.

And you know, the NURTURE data -- Eric, the NURTURE data of course put tremendous emphasis on identifying the infants pre-symptomatically, genetically.

That is another important bit of work that is going on is to get the community educated and making sure that these babies are diagnosed much more rapidly than they are today.

And, Beth, will you be booking SPINRAZA royalties concurrently in the same quarter they are realized by Biogen?

That would be our expectation, Eric.

There will be a slight delay initially because we'll have to obviously get their reports.

We would expect to be booking them at the same time that they are booking the product sales.

Thank you.

Our next questioner is Yale Jen from Laidlaw.

Good morning.

This is Olivia Lamb covering for Yale.

I just have one question.

Would the recently reported child onset CHERISH data, in your opinion, still be a part of the approval consideration given it was reported about a month after both the US and EU filings?

Lynne, do you want to answer that?

Yes, I do.

We of course have been keeping the regulators apprised of the fact that these CHERISH data are coming as we've gone through the review process.

And the regulators do have these data.

As we said in the press release, we don't expect the new data to alter the timeline for approval.

We definitely don't think it will slow anything down.

Okay.

Thank you very much and congrats.

That is based on lots of interactions with regulatory agencies.

Thank you.

Our next questioner is Do Kim from BMO Capital Markets.

Good morning.

Thank you for taking my question.

I just wanted to confirm, if you could confirm for us which phase 2 drugs you think will be going into phase 3 next year, including any of those you haven't mentioned today?

If you have to pick one, which one would you say you are the most enthusiastic about?

Do you mind if we delay that until January when we do a pipeline update?

I want to do it justice.

I mean that's obviously where the meat is, and I want to make sure that we cover it thoughtfully for you.

I'm sorry to delay but I think it is just going to be a lot better when you see the whole pipeline put together with all of the data that are coming.

And then we can walk you through what we think is the next exciting round of drugs.

Certainly Factor XI Rx is one and Glucagon is another on our mind, but there are many others.

Okay.

Maybe then I could ask you about an earlier pipeline drug for your DMPK phase 1, phase 2 trial you're currently looking at the classic form of the disease.

Do you think that is the population that you will be going after in later stage development?

Or would it make sense to move into an earlier form, the childhood onset?

We're just finishing the molecular analyses now, looking at the level of activity and the potency and all of the other things.

We'll be telling you all about that in our pipeline update.

And you are certainly right, there's every reason to think about the earlier forms of the disease, as well as the type disease we're studying today.

We will talk about that in January as well.

Okay, great.

Definitely looking forward to your update.

Okay.

Thanks.

Our next questioner today is Paul Matteis from Leerink.

Great.

Thank you very much and congrats on all the progress and the recent data.

I had a couple, one general question and one specific commercial question.

I was wondering if you could expand a little bit on how you define clinically meaningful platelet declines?

When you talk about this across different diseases, is there a quantitative threshold, and does that vary based on the indication or the drug?

No.

It doesn't.

It is pretty standardized.

Of course the normal levels are, depending on the lab, either 150,000, 140,000.

And a meaningful change is a change -- and you know that platelet counts are variable, so you want to confirm them.

A clinically -- a meaningful change is a confirmed change that results in a grade 1 of thrombocytopenia.

It is very rigid.

Obviously that is a long way from being at bleeding risk.

Richard, you may want to amplify on that.

That was perfect.

Okay.

It is a very rigid requirement.

Okay.

Sounds good.

And then, for volanesorsen, I was just wondering if you could give an update on your patient identification efforts ahead of a launch, and where you're hoping to be at regarding that upon launch?

Thanks a lot.

Paula?

Sure, I am happy to answer that.

So we are actively doing a lot of work to help identify patients pre-launch.

And that is through various mechanisms starting first and foremost with education about the disease, peer-to-peer education, and actually also having field people on the ground, both in the US and Europe, meeting with these physicians and identifying patients, and really simplifying the diagnosis because the diagnosis of these patients is quite simple, high triglycerides, history of pancreatitis, with no other causes.

So we are working and building a database towards that tracking the patients that we are identifying.

That is something, the detail of which, we won't give numbers or anything, but obviously we are building momentum there.

And we will be in place to have those patients identified prior to launch.

One thing that helped us a lot in this space is that we built a true intellectual leadership franchise in the lipid space.

With all of the -- we have the largest group of lipid lowering drugs of any company of any size in the world.

We've now had seven, eight years of working with essentially all of the KOLs in the lipid space.

And as we expand the drugs, we move into new KOLs like FPL KOLs and so on.

I think that helps us a lot in both recruitment of patients, and understanding the patients.

And it also I think is going to be very helpful with the launch of volanesorsen and hopefully additional members of our lipid franchise.

That is great.

Thank you.

Our next questioner today is Roy Buchanan from Janney Montgomery Scott.

Thanks.

My question has been answered.

It was about DMPK.

We should look for that phase 2 data in January?

Yes.

Okay.

That is all.

Thank you.

You bet.

Our next questioner will be Jessica Fye, JPMorgan.

Hello, guys, this is Ryan on for Jess.

Appreciate you taking our questions.

For DMPK, I think you said you are using this trial to look for endpoints to study further.

So could you elaborate on what those endpoints could be?

And also, can you please remind us what the highest dose you're looking at?

And help us understand why you ultimately decided not to pursue the cohort with 12 weeks' worth of dosing?

I thin that suggested some excitement before, so just curious what changed?

There were a whole set of various molecular endpoints that are looking at the target that is being reduced, and the projected changes in splicing events that you would expect based on reduction of that target.

That involves muscle biopsies, and deep sequencing and PCR, and these are just studies that haven't been done before.

So it is taking some time to perfect all of those techniques, make sure we've got them validated and all that.

I think the highest dose we use, Richard, was 600 milligrams per week?

That is correct.

600 milligrams per week.

Remember that this is skeletal muscle, so even with a generation 2.5, which this is, skeletal muscle is a tissue that doesn't accumulate a lot of these drugs, the doses.

We expect it to be relatively high compared to a liver or kidney target, which is what we've got.

Okay.

And for SMA, I'm not sure if you can comment, but just curious which items of the hammersmith functional scale you saw improvements in, in CHERISH, and did any patients gain the ability to walk?

Yes, I should qualify that comment.

We've had type 2's walk for the first time, and we've had type 3's regain the ability to walk in the initial trial.

And what we are seeing in the later onset study is more or less the sorts of things that we saw in the infant trial, which is -- every sensitivity analysis and every significant end point is all in the same direction, all looking really very positive.

Great.

Thank you.

Biogen will be presenting the detailed data from CHERISH after the study concludes, which means after we get all of the patients rolled over into SHINE, and can have the final data base lock.

And you probably remember that we have both the hammersmith -- we also have what's called the upper limb module for patients who nearly -- very severely affected to look at upper limb strength.

And there is electrophysiology and a lot of other things that are in these studies.

Great.

Thank you.

(Operator Instructions)

And our next questioner is Salveen Richter, Goldman Sachs.

Hello.

Thanks for taking my questions.

This is actually [Carey] on the line for Salveen.

Congrats on the CHERISH data and all the progress.

I have a couple of questions.

First, for SPINRAZA can you elaborate on you and Biogen's regulatory strategy and timeline outside the EU and US?

What other countries are you prioritizing?

And are Japan and Latin America important markets you're looking at?

I do have a follow-up question.

Well, we submitted in Europe and we're submitting and Biogen is submitting in all of the major countries around the world, and Japan is -- all of the areas of the world are important and certainly Japan is on track.

Lynne, do you want to add or subtract anything from that?

I just want to confirm that Latin America and Japan are both very important, and Biogen is focused on both of those.

And we continue to be pleased with the regulatory response to the drug and the data we have, not just in the US, but around the world.

Thank you.

And just one follow-up question on DMPK 2.5: So will you be presenting protein knockdown data, and is this a predictor of efficacy?

And then just kind of more a general question about your platform, in terms of (multiple speakers).

We're lowering in RNA.

So the key things that we want to look at are both the reduction of the target RNA, and the changes in splicing.

It is essentially useless if we don't see the predicted changes in splicing as a result of reducing the target.

These are biopsy -- punch biopsies.

So you're working with very small amounts of tissue.

Remember, this is a disease of toxic RNA and it is not a protein disease.

It is the RNA itself that is causing the dysfunction in the muscle.

So very much the focus is on the RNA and the downstream effects.

Okay.

Does this usually translate into efficacy?

Yes.

At least -- we've never done a study like this before.

But we have a fairly broad program in looking at toxic RNA.

Huntington's, for example, the disease is probably related both to the toxic RNA and to the protein that's made.

And everywhere we have looked we see great correlation between a validated target reduction that is a validated toxic RNA and therapeutic benefit.

Each clinical trial and each disease of course is unique, and we have to ask it in the species of interest, ultimately in man, and look at the answer in the right trial in man.

But sure, there is zero reason it shouldn't.

Okay.

Thank you.

The next questioner today is Charles Polsky from William Harris Investors.

Hello, Stan and Lynne.

Congratulations on all of the great progress.

Stan, you just mentioned Huntington's and my question related to asking for a quick update on the status of the program, and when we might expect to hear some data in actual patients with Huntington's disease?

It is progressing really well, and I will let Richard give you a little more detail.

The Huntington study is progressing well, enrolling well.

And the expectation is that we will have data to share in the second half of 2017.

And these of course are Huntington's patients.

All of the folks being treated have Huntington's disease.

Is that delivered intrathecally?

Yes.

It is.

Thank you, Stan.

Good to hear from you, Charlie.

It has been a while.

It has.

Thanks.

(Operator Instructions)

This will conclude our question-and-answer session.

I would now like to turn the conference back over to Dr. Crooke for any closing remarks.

First of all, I want to thank everyone for joining us on the call today, and for paying attention to us in the midst of all of the other things that are going on.

And I think this is a pivotal moment for the Company.

We think SPINRAZA is going to make profound difference in patients with SMA and their families.

We think it is going to be a substantial commercial success.

And we are really focused now on the other phase 3 programs and bringing along the really exciting phase 2 pipeline that we have.

We'll pick the best of the lot moving forward, and we look forward to telling you all about that, as we said, in January.

There will be a good bit of news between now and then as well.

Thank you very much.

The conference has now concluded.

Thank you for attending today's presentation.

You may now disconnect your lines.