使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主
Operator
Ladies and gentlemen, thank you for standing by.
Welcome to the Isis Pharmaceuticals third-quarter results 2006 conference call.
During the presentation, all participants will be in a listen-only mode.
Afterwards, we will conduct a question-and-answer session. (OPERATOR INSTRUCTIONS) As a reminder, this conference is being recorded Thursday, November 2, 2006.
It is my pleasure now to turn the conference call over to Dr. Stan Crooke, Chairman and Chief Executive Officer of Isis Pharmaceuticals.
Please proceed, sir.
Dr. Stan Crooke - Chairman, CEO
Thank you, Daniella.
Welcome everyone and thank you for joining us on today's conference call to discuss the financial results and highlights for the third quarter of 2006.
Participating with me today are Lynne Parshall, Executive Vice President and CFO;
Beth Hougen, our Vice President of Finance;
Michael Treble, President of our Ibis Biosciences division;
Kate Winkler Corcoran, our Vice President of Corporate Development.
As you know, 2006 has been an important year for 301012, our second generation antisense drug for the treatment of patients with high cholesterol.
We have also had considerable focus lately on our Ibis division -- the Ibis T5000 Biosensor System -- as we have met important commercial milestones for that business.
Because our third-quarter communications were to a large extent focused on Ibis, much of what we will discuss today will involve our Ibis division.
As we have told you, we have made significant progress in developing the Ibis T5000 System; have announced its commercial availability, together with our partner Bruker Daltonics; and importantly, we have received both our first purchase order for the Ibis T5000 Biosensor System this quarter as well as commercial orders for assay services.
So we're transitioning instrument manufacturing to our partner Bruker while building our own commercial manufacturing capability to manufacture and market the assay kits.
In short, it has been a busy and productive time for the Ibis business.
Over the last month or so, we have spent time communicating with investors the importance of these Ibis achievements to give greater visibility to this Isis asset, which we believe is still not widely known.
So this call we will discuss Ibis in some detail including, as many of you have requested, giving some further information about our financial projections for the Ibis business.
We will then switch gears and review the current status of ISIS 301012 development.
That will include an overview of the key trials in progress and a reminder of the role that the drug might play in treating patients with high cholesterol.
We plan to present new data on ISIS 301012 a week from Sunday at the American Heart Association meeting and want to remind you about our activities in this program to help you put these new data in context.
At the end of our prepared remarks, of course, we will be happy to answer your questions.
Now, let me turn the call over to Kate to review our forward-looking statements.
Kate Winkler Corcoran - VP Corporate Development
Thanks, Stan, and I would like to add my welcome.
It has been a really great quarter.
A reminder to everyone that this webcast includes forward-looking statements regarding our business, the financial outlook for Isis Pharmaceuticals and its Ibis division, and the therapeutic and commercial potential of Isis's technologies and products in development.
Any statement describing Isis's goals, expectations, financial projections, intentions, or beliefs is a forward-looking statement and should be considered an at-risk statement, including those statements that are described as Isis's goals or projections.
Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of discovering, developing, and commercializing drugs that are safe and effective for use as human therapeutics, in developing and commercializing systems to identify infectious organisms that are effective in commercially attractive, and in the endeavor of building a business around such products.
Isis's forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements.
Although Isis's forward-looking statements reflect the good safe judgment of its management, these statements based only on facts and factors currently known by Isis.
As a result you are cautioned not to rely on these forward-looking statements.
These and other risks concerning Isis's programs are described in additional detail in Isis's annual report on Form 10-K for the year ended December 31, 2005, and its quarterly report on Form 10-Q for the quarter ended June 30, 2006, which are on file with the SEC.
Copies of these and other documents are available from the Company.
Now, here is Lynne.
Lynne Parshall - EVP, CFO
Thanks, Kate.
I am assuming that you have all had an opportunity to read the press release we issued earlier this morning, so I'm not going to reiterate the financial details of the release.
Please feel free, though, to ask questions at the end on any points from the release that need additional clarification.
Today, I want to give you a better sense for why we are so excited about the Ibis business; what we have been doing to commercialize the Ibis T5000 Biosensor System; and why we agree with Garth Ehrlich, our industry expert in molecular pathogenesis.
Doctor Ehrlich spoke at our Ibis analysts' day in October and said that the Ibis T5000 has the potential to be a truly disruptive technology, or a game changer as he referred to it.
The Ibis T5000 Biosensor System can identify any infectious organism in a sample without pre-existing knowledge that one specific microbe or microbes might actually be present.
The system can identify and characterize all microbial families including bacteria, viruses, and fungi without any culturing or sequencing.
It can also be used for forensic analysis of human DMA samples.
Even better, it can do any of these things in as few as four hours.
There is no other system that can do this.
It is unique.
To illustrate the power of this technology, here is a hypothetical scenario with real implications.
Think of a fast-spreading virus like SARS, and recall the difficulty in identifying and controlling the virus following its outbreak in 2002.
Now in today's terms, what if we were to have an outbreak of bird flu.
With the Ibis T5000 one might take samples, for example, from every person boarding an international flight.
Before the flight landed, a technician could have identified a broad range of influenza viruses, including emerging strains, that might be carried by the passengers to determine whether it was a pandemic strain of flu or just a normal annual flu.
If it was determined it to be a pandemic strain, the CDC and other government agencies could then quarantine and treat the passengers upon landing to help limit transmission of the dangerous virus.
In 1999, when DARPA was reviewing Ibis technology for a research grant, the consensus was, we were told, and I quote -- this will never work; but if it does, it will be huge.
I am happy to report that it does indeed work, and as you will see from just one example I present, the market opportunity is significant.
So how does the Ibis T5000 work?
To prepare a sample for analysis, we extract nucleic acid using off-the-shelf methods that are readily available and common to almost any lab doing biological analysis.
We then conduct PCR using broad-range primers designed to amplify highly-conserved DNA sequences that flank variable genomic regions with high information content.
That is, sequences that allow us to distinguish one infectious agent from another down to the strain level.
We introduce the amplified products into a mass spectrometer, which determines the exact molecular weight of each product.
From those weights we calculate each product's base composition.
Using sophisticated proprietary algorithms and signal processing, we compare the base compositions against an extensive database containing information for over 5,000 microbes and microbe strains and provide the user with a direct answer or answers to the question -- what infectious organisms are present?
The Ibis T5000 can analyze very complex samples and still generate a simple readout that enables direct, informed decision-making by the user.
The development and commercial readiness of the Ibis T5000 has been largely financed by a number of U.S. government agencies.
Most of our current government funding is focused on application development and is enabling us to expand our menu of infectious organism assay kits, making the instrument even more attractive to prospective customers and setting the stage for a valuable potential revenue stream for the sale of Isis assay kits.
I promised to describe a real-life example of how the Ibis T5000 has already made a difference.
The one I have chosen is close to home and it involves the epidemic outbreak of severe pneumonia at a San Diego Marine recruiting depot in 2002 and 2003.
Hundreds of recruits became ill.
Over 150 were hospitalized and one recruit died.
Ibis was tasked with providing solutions to three challenges.
First, to quickly identify the pathogen and copathogens causing this very virulent infection.
Second, to determine the pathogen strain genotype to ensure effective treatment.
Third, to track the pathogen and determine if this very bad epidemic was spreading -- a classic example of a surveillance application.
First we analyzed direct patient specimens and identified the pneumonia-causing agents, as well as two additional contributing pathogens present in the sickest recruits.
Then we determined the specific pathogen strains, which allowed us to identify the reasons for the virus's virulence and the best treatment model.
Third, we monitored patients presenting with respiratory infections at military facilities around the country, to determine if the pneumonia epidemic had spread beyond San Diego.
The Ibis T5000 is now in routine use at San Diego's Naval Health Research Center for surveillance of infectious disease.
I want to continue my Ibis remarks with an overview of our commercial strategy and financial projection.
Our commercialization strategy is to focus on the development, manufacture, and sales of high-volume high-margin consumable assay kits, while our instrument partner, Bruker Daltonics, is responsible for instrument manufacture, order processing, installation, and service.
This relationship allows us to benefit from Bruker's high-quality worldwide sales and service networks, avoiding infrastructure development on our part, gaining quality and credibility, and allowing a much more rapid market entry than we could achieve on our own.
We are initially targeting non-regulated markets for the Ibis T5000 Biosensor System such as biodefense, forensics, disease surveillance, and most importantly hospital-associated infection or HAI control.
Ultimately we intend to enter the in vitro diagnostics market with an industry-leading IVD partner.
Our most important near-term market is hospital-associated infection control.
Hospital-associated infections cause over 90,000 deaths per year in the U.S.; and our healthcare system spends $5 billion in direct costs in treating these infections.
The number of hospital-associated infections continues to increase, and current technologies are not capable of identifying sources of contamination rapidly enough to efficiently curtail their spread.
The average cost of treating an infection is close to $15,000 per patient.
At least 5% of patients admitted to acute care hospitals -- over 2 million patients per year -- acquire infections while hospitalized.
So the real cost of hospital infections may be closer to $30 billion each year.
Cost to treat infections contracted in the hospital represents the single largest nonreimbursable cost for hospitals.
In a published study, administrators at Chicago's Northwestern Memorial Hospital determined that for every dollar invested in HAI control, they saved $5 dollars in costs.
Ibis is collaborating closely with Northwestern and other leading medical centers, including Johns Hopkins, to implement solutions to combat healthcare-associated infections.
The ultimate market opportunity for the Ibis T5000 is in vitro diagnostics.
With the Ibis technology we contemplate a dramatic shift and improvement in diagnostic practices and standards of care.
As I have said, we plan to select an IVD partner with whom to enter this market.
So with that backdrop, I would like to share with you some financial projections for the next several years for Ibis.
For your reference, we have posted several slides on our website that illustrate the revenue, expense, and operating profit and loss ranges for these years and underlying assumptions that drive the financials.
As we have been saying over time, we believe it is important to finance Ibis as a separate entity in order it to allow to operate independently, given its distinct business model and commercial opportunities.
Consistent with this, we are evaluating financing alternatives for Ibis.
We think it's important at this point to share with you our financial projections, to help you better understand Ibis's value and business potential.
Of course we're just entering the commercial phase of the business; and as we get more experience, we will be able to provide more specific guidance.
Our plan is to provide 2007 guidance during our year-end earnings conference call, which is when we traditionally provide guidance for the year.
The projections that I'm going to provide you today are in the form of ranges for three separate periods -- 2007; 2008 through 2009; and 2010 and beyond.
As we move out in time the ranges increase, reflecting the increasing uncertainties inherent in commercializing a revolutionary new technology such as the Ibis T5000 Biosensor System.
Ibis has three revenue-generating business segments.
We refer to the first of these as R&D contracts.
Ibis has received in excess of $53 million from numerous government agencies to support technology development, instrument design, and assay kit development.
Ongoing funding has allowed us to expand their product offering of assay kits in preparation for commercialization of the Ibis T5000.
We expect that future R&D contracts will provide funding to enhance existing applications and allow us to continue to develop new applications.
We anticipate that revenue from R&D contracts will be in the range of $10 million to $12 million in 2007; increasing in 2008 and beyond to a range of 10 to $15 million.
The increase in the top end of the range reflects our assumption that nongovernment partners and ex-U.S. partners, including potentially a future diagnostics partner, will provide us with funding to support applications development.
Our second business segment, our Assay Services Laboratory, represents a key part of the early Ibis business strategy by providing revenue to support initial commercialization activities while instrument installations and kit sales ramp up.
In addition, our services lab is an integral part of the Ibis T5000 sales process, providing customers with the ability to evaluate the capabilities of the Ibis T5000 prior to making a buying decision.
While our assay services business is an important component of our initial business strategy, we don't expect this segment to be a significant part of our long-term strategy.
With that in mind, we expect revenue from the assay services in 2007 to be between 2 and $4 million, growing slightly in subsequent years to between 3 and $5 million annually.
We estimate that assay services will be priced between $50 and $200 per sample, and that our service lab will have the capacity to run in excess of 60,000 samples per year once it's fully operational in 2008.
Importantly, we recently received our first contract, valued at up to $1.9 million, to analyze up to 10,000 samples for a government agency.
Our third and most significant business segment is instrument and assay kit sales.
Earlier this year we took an important step in the commercial of the Ibis T5000 Biosensor System by partnering with Bruker Daltonics.
Bruker will be the exclusive worldwide manufacturer of the Ibis T5000 and will also be responsible for order processing, system installations, and service in North America, Europe, and the Middle East.
In Europe and the Middle East, Bruker will have the exclusive rights to sell Ibis T5000 systems and Ibis assay kits for various government applications, and non-exclusive rights to sell to customers for all other applications except diagnostics.
We expect that the average purchase price for the Ibis T5000 will be between $350,000 and $450,000 and that we will receive from Bruker as our revenue approximately 25% of the purchase price as well as a portion of ongoing maintenance contract revenue.
To date, we have delivered four systems to our government partners for use in biodefense and epidemiological surveillance.
A fifth is planned for installation at Johns Hopkins early next year.
In addition, we recently received our first commercial order for two Ibis T5000 Biosensor Systems from a government agency for human forensic applications.
We plan to install the first system under this order before the end of this year and the second early in 2007.
We estimate that we will place eight to 15 instruments in 2007, bringing the total installed base to between 13 and 20 by the end of 2007, and resulting in between 1 and $3 million of revenue from instrument sales.
We have assumed a dramatic increase in instrument placements in 2008 and beyond as we enter the HAI market and ultimately IVD markets with a diagnostics partner.
This assumption results in instrument revenue growing to between 5 and $15 million annually during the 2008-2009 time frame, and between 15 and $30 million annually in 2010 and beyond.
Because we have ongoing maintenance obligations for the Ibis T5000 during the first year after installation, we expect to amortize instrument revenue over one year for each instrument sold.
Our Ibis T5000 assay kits are 96 well plates [with] proprietary reagents.
Generally, each assay kit is sufficient for approximately 10 sample analyses.
We expect a sample analysis to be priced between $40 and $80, translating to a pricing per plate of between $400 and $800.
Under our Bruker agreement, Bruker will purchase assay kits from us at 55% of the list price for resale to its Ibis T5000 customers in Europe and the Middle East.
We estimate that each instrument will run between 2,000 and 5,000 samples a year once it's fully integrated into the laboratory, which translates to between $80,000 and $400,000 in revenue per instrument per year.
In 2007, we estimate revenue from kit sales to be modest, as we are initially placing units, and will be between $1 million and $3 million.
Because kit sales are highly dependent on the instrument installed base and we have assumed that instrument placements will increase significantly beginning in 2008 and beyond, we have also estimated significant growth in kit sales.
In the 2008-2009 time frame, we project assay kit revenue to grow up to approximately $35 million annually.
This growth is fueled by an increase in instrument placements and the entry of a diagnostics partner.
We believe our diagnostics partner will begin making a significant positive impact on revenue by the end of 2010, resulting in significant revenue growth in the 2010 and beyond time frame.
We have assumed that we will receive approximately 40 to 50% revenue on assay kits sold by our diagnostics partner.
We estimate that assay kit revenue in this period to be between 50 and $150 million.
We expect our gross margins in 2007 to be primarily driven by our government contract margin of approximate 40 to 60%.
As our revenue mix shifts toward more profitable assay kit business, estimated margins are between 65 and 85%, which represents a significant improvement.
We anticipate that a mature manufacturing process combined with cost projection programs will also improve our margins.
By 2010 and beyond, we expect to see the benefit that our diagnostics partner will bring reflected in our margins, resulting in margins in the 70 to 80% range.
Our strategy of selecting diagnostics partner with which to address the IVD market has a positive impact not only on our revenues and margins but also on our projected operating expenses.
We have assumed that our diagnostics partner will be responsible for a substantial portion of the total R&D expenses for the business, allowing us to keep our internal R&D expenses essentially flat through 2010 and beyond at between 6 and $10 million annually.
Additionally, we expect that much of our R&D will be funded by our partners, including government agencies, resulting in revenue from R&D contracts as I described earlier.
Possibly the most important reason to partner with a leading diagnostics company is to leverage their sales and distribution expertise and infrastructure.
As I mentioned earlier, we believe this will result in revenue and margin growth significantly above what we could accomplish on our own, while allowing us to limit the growth in our SG&A expenses, keeping them at a modest percent of revenue.
We expect SG&A expenses to be between 4 and $5 million in 2007; between 5 and $8 million in the 2008-2009 time frame; and between 7 and $10 million in 2010 and beyond.
Based on all of the assumptions I have just discussed, we expect that we will spend between 10 and $15 million to reach profitability in the 2008-2009 time frame.
With this modest investment we believe that by 2010 and beyond we will have created substantial value, supported by operating profits in the 100 to $150 million range.
That concludes my in-depth discussion of our Ibis business, so now I will turn the call back to Stan.
Dr. Stan Crooke - Chairman, CEO
Thanks, Lynne.
I know that we have just provided a great deal of information that many investors have been anxious to learn about.
I know that it was in considerable depth; and I know there were a lot of numbers and a lot of words that tied to it.
So we will be very pleased to speak privately or on the conference call with any of you who have questions and need more specific answers.
Of course, I refer you to the financial table that we have posted on our website.
We know that we have just given you a load of information that will be important in assessing the value of Ibis.
We think the value of Ibis is only beginning to be realized and it is spectacular.
Having said that, in the third quarter, and this is concluding the third quarter, we have invested a great deal of time and energy in bringing you up to speed on the Ibis T5000 and the Ibis division.
With this conversation, we hope that we have provided all of the financial information that we can prudently provide today to help you assess it.
Now, we want to turn our attention to our pipeline.
Of course, while doing Ibis we have continued to make great progress on our pipeline, both our own pipeline and our partner pipeline.
The most important drugs, ISIS 301012 and ISIS 11375, have continued to make great progress.
I want to conclude today's remarks by focusing just on ISIS 301012.
I want to make sure that you all mark your calendars for our presentation of new Phase II data during the American Heart Association Annual Scientific Sessions in Chicago that occur in less than two weeks.
Just a very quick reminder of 301012.
Lowering cholesterol is of course a key component in the prevention and management of cardiovascular disease.
Of course, cholesterol can be carried in the bloodstream in several forms, with high-density lipoprotein or HDL-cholesterol being the good form, and low-density lipoproteins or LDL, and the very low-density lipoproteins or VLDL, being the bad forms.
Those bad forms are directly involved in heart disease.
Collectively, LDL and VLDL and other bad forms of cholesterol are referred to as non-HDL cholesterol.
ISIS 301012 reduces the production of apoB-100, which is the protein that you have to have if you're going to make non-HDL or bad cholesterol.
ApoB-100 also the protein that is involved in triglyceride particles; and obviously triglyceride, high triglyceride, is also associated with significant disease.
So apoB-100 is an obvious and exciting target for the pharmaceutical industry.
It is an ideal target for antisense because it is expressed in the liver.
It has long been recognized as an attractive target for intervention.
That has proven to be very difficult using traditional means, but is of course straightforward for antisense.
Now you know that we are in the middle of a prudent yet very aggressive development plan to bring ISIS 301012 forward as a new treatment for high cholesterol.
We plan to develop ISIS 301012 as the drug of choice for patients who are intolerant of statins or are unable to achieve targeted cholesterol levels with statins alone.
This is a large market opportunity.
Guidelines for target cholesterol levels continue to be revised downward.
The Adult Treatment Panel's updated LDL cholesterol goal for high-risk patients is now less than 100 milligrams per deciliter; and for moderate risk, moderately high-risk patients, the goal is less than 130 milligrams per deciliter.
Roughly 80% of the 20 million Americans -- or that means 16 million Americans -- in the high-risk category are today not meeting their LDL cholesterol targets using the maximum doses of lipid-lowering therapies that they are comfortable with. 5 million of the more than 10 million moderately high-risk patients are not achieving target levels taking statins.
In other words, 301012 could help more than 20 million patients in America alone as a complementary or add-on therapy to statin treatment.
The data plan to present next week will give us our -- the first look at ISIS 301012 efficacy and safety in combination with statins.
This combination trial is a critical gating step for further development of the drug for add-on, for the add-on market I just described.
Initially, this trial, which is randomized, double-blind, and placebo-controlled, called for doses of 30, 100, and 200 milligrams per week.
Because this was our first study in combination with statins, we started with just five weeks of treatments.
Enrollees had to have LDL levels between 100 and 220 milligrams per deciliter and to have been on stable doses of 40 milligrams or less of simvastatin or atorvastatin for at least three months.
As I mentioned in the last conference call, based on the excellent safety profile we have seen in this study, and the excellent safety that we are seeing in our familial hypercholesterolemia studies, we have amended this trial to add higher-dose cohorts of 300 and 400 milligrams for five weeks of treatment, and added cohorts to treat for three months at 200 milligrams and 300 milligrams per week.
We look forward to sharing with you the five-week results for doses of 30, 100, 200, and 300 milligrams per week at the AHA meeting a week from Sunday.
The early increase in dosing and the extension of dosing to 12 weeks in this combination trial has accelerated our timeline substantially for collecting longer-term data on combination dosing.
Of course that means that we have accelerated the development of this drug toward its most meaningful application substantially.
We also -- so we look forward to following up the five-week data in combination with longer-term data next year.
At the AHA meeting we will also present data from the continuation of our Phase II monotherapy trial.
Specifically, we plan to announce results from the 300 milligram per week dose cohort of patients treated with ISIS 301012 alone for three months.
This is the dose escalation that followed the Phase II results we presented in May, when we dosed at 200 milligrams and review the results at 50, 100, and 200 milligrams.
This study calls for three months of drug treatment of patients with stable LDL levels of at least 130 milligrams per deciliter when they to come into the study.
Since we have previously reported on this study, I will just remind you that the doses reported were 50, 100, 200 milligrams a week; and at those doses we saw an impressive dose-dependent reduction of apoB-100, LDL, total cholesterol, and triglycerides.
In patients who received 200 milligrams weekly for three months, we saw statistically significant 42% reductions in LDL and a 47% reduction in triglycerides, along with reductions in apoB-100 and all of the other bad cholesterol that you would expect.
So to summarize the data we plan to present at AHA, first, we will report results from the 300 milligram per week cohort of monotherapy in which we treat [the 12] for 13 weeks.
We will also present the first of the statin combination data in which we treat for five weeks.
That will include the 30, 100, 200, and 300 milligrams cohorts.
We will first present the data in a Cardiovascular Seminar Session on Sunday evening, November 12; then the following Monday morning, November 13, we will host a webcast to go over the data in much more detail for investors than certainly we will be able to do in a relatively brief presentation in the AHA seminar.
So please stay tuned for announcements about the timing of that webcast.
We are of course still pursuing our development of ISIS 301012 for patients with familial hypercholesterolemia, or FH, a genetic disorder that causes extremely high cholesterol levels, often exceeding 500 milligrams per deciliter, and clearly results in the early onset of heart disease and often death.
Earlier this year, the FDA granted ISIS 301012 open drug designation for patients with homozygous FH, providing a potentially accelerated pathway to commercialization because of the tremendous unmet medical need in this desperate patient population.
Both homozygous FH and heterozygous FH trials are progressing very well.
We are very pleased with the progress of those trials.
We plan -- we certainly hope to be able to share with you the data from those trials either very, very late this year or early next year.
In those trials, we are evaluating ISIS 301012 in combination with statins and other lipid-lowering therapies.
We are on track to initiate our registration directed homozygous FH trial in 2007 as planned, and we will be able to share more about that trial and the heterozygous trial with you in the near future.
Finally, I can also tell you that the rest of our development pipeline -- both internal and partnered -- is progressing well.
As always, we will keep you informed on these, as these drugs progress.
But given the time that we needed to spend on 301012 and Ibis, we felt that we would just focus on 301012 today.
In summary, we have had a great 2006 so far, and we expect to continue our positive momentum with important ISIS 301012 data in just a couple of weeks.
We appreciate your continued support.
We are now prepared to entertain your questions.
Daniella, if you can please review the procedure for our listeners.
Operator
(OPERATOR INSTRUCTIONS) Mark Monane with Needham.
Mark Monane - Analyst
Good morning, Stan; good morning, Lynn; good morning, Beth.
Congratulations.
And Michael and Kate, congratulations on your progress.
Dr. Stan Crooke - Chairman, CEO
Congratulations on remembering all of our names.
Mark Monane - Analyst
Let's talk about 301012 and some clinical pharmacology;
I know it is something you know well, Stan.
When you increase the dose, there is often a dose-dependent increase in the efficacy; but it may be even an exponential logarithmic increase expected in the side effect profile.
Can you talk about what side effects you have seen?
How will you know when you have reached a dose-limiting toxicity?
Dr. Stan Crooke - Chairman, CEO
What we have shown to date is that, in contrast to statins, ISIS 301012 has a linear dose-response curve.
That is, you double the dose, you get double the effect.
With statins you double the dose and you get about a 6% increase in effects.
That is one of the significant limitations of statins and that is why, even though using high-dose statins is entirely appropriate, it is very much a case of diminishing returns.
We have in the data that we reported shown no evidence of significant dose-dependency in side effects.
But of course, we have small numbers of patients and we really haven't seen that many side effects.
In the last conference call that we had, I mentioned that the progress in both the higher-dose single agent, and in the combination trials, and in FH was sufficient and the safety in those trials sufficient that we were prepared to extend combination dosing to three months and to increase dosing to 300 and 400 milligrams per week in both single agent and combination trials.
I think that tells you a great deal about the level of safety we are seeing at the higher doses and the safety of what we are seeing in combination -- and in combination in very, very sick patients.
Of course, at the AHA and then our investor day, when we present the 301012 data in more detail, we will present all of the safety data for you to evaluate yourself.
I should say today we are even more encouraged about the safety profile of ISIS 301012 based on the data we are looking at, blinded, today at the higher doses and the combination.
We are dosing at 400 milligrams per week today, and I suspect that that will be our maximum dose.
Whether that will be associated with side effects or not, only time and the results of the experiment will tell.
To date, certainly we are not experiencing any problem.
I think the reason for saying that 400 will be the highest induction dose that we will use is based on the efficacy that we are observing.
I think there is very little reason, if we continue to see the sort of increasing efficacy as we increase dose that we are giving, to think about going to more than 400 milligrams.
I don't know that we would want to cause patients to squeak.
I think lowering LDL by 80 or 70 or 80% would be probably as much as you would want to do.
So I suspect we will make the decision.
That is, I suspect -- because obviously we could find side effects as we go forward.
But I suspect we will make the decision not to go higher than 400 milligrams in induction based on the efficacy, not safety.
Remember that once we -- that this drug has a very long half-life.
So that our plan is a three-month induction period, probably at 200 or 300 milligrams a week for most patients; and then, a reduced maintenance schedule.
Our next series of experiments in human beings will be to define that maintenance schedule that assures stable drug levels and stable drug effect.
Though we suspect that the maintenance level will be about half of what an induction dose would be.
So anyway, I hope I answered all your questions, Mark.
I know I spent a long time doing it.
Mark Monane - Analyst
No, that was very helpful.
I want to let my colleagues go, but I want to ask one more question.
The heterozygous FH population, how big in the U.S. do you think that population is?
What is the opportunity?
How is Isis pursuing the opportunity there?
Dr. Stan Crooke - Chairman, CEO
The worldwide numbers that I have in my head for heterozygous FH are about 10 million.
About a third of those patients are -- have, if I understand it correctly, severe disease that requires treatment.
I want to emphasize I am not an expert on this and Mark is not here.
So if you want an expert's answer you should ask Mark.
So the homozygous FH is, of course, a very rare disease.
But the heterozygous FH, as Evan Stein said in our ISIS 301012 meeting, is actually fairly common.
We believe that -- I think it is roughly one in 500 human beings.
So we believe that the overall FH market can be a sizable initial market for this drug.
We believe that given the desperate unmet medical need that these people have, that the pathway to approval can be relatively brief, and that our sales can be significant.
Mark Monane - Analyst
Where is Isis in the developmental plan there?
I am sorry, I am not clear on where the Company is.
Dr. Stan Crooke - Chairman, CEO
We're finishing the initial phase of the development.
That is, the phase in which we look at increasing doses to determine if there is a difference in the dose-response curve for the drug in patients with homozygous or heterozygous FH.
Those studies have gone spectacularly well and have enrolled really with remarkable speed.
We are already have sufficient patients enrolled in those trials.
We are then now just evaluating the outcome.
When those trials are finished, we will report the data, and we will sit down with the FDA and review the commitment that we think we have with regard to the development of the drug, and firm up commitments that we need with regard to the development of both homozygous FH and heterozygous FH.
Mark Monane - Analyst
Fair enough.
I will let my colleagues go.
Thanks for the added information.
Dr. Stan Crooke - Chairman, CEO
And we expect to, as I said, report the results of those initial trials on homozygous and heterozygous FH early next year or very late this year.
Mark Monane - Analyst
Okay, great.
Thanks again for the added information.
Operator
Shiv Kapoor, Montgomery.
Shiv Kapoor - Analyst
I have got a couple of questions on ISIS 301012 and some quick questions on the pipeline as well.
So let me start on 301012.
Just a follow-up from Mark's question this morning.
You mentioned a three-month 200 to 300 mg per week dose followed by a maintenance dose.
You mean induction followed by maintenance.
You mentioned the maintenance dose might be half the induction.
Can you explain what you mean by that?
Does that mean that you will be dosing once in two weeks?
Or do you mean that you will be still dosing every week, but half the dose?
Dr. Stan Crooke - Chairman, CEO
In the induction phase, what we are doing is building up concentrations of the drug in the liver.
Given the fact that the drug has -- it takes 30 days to get rid of half the drug, or longer -- 30 or more days to get rid of half the drug.
If you dose weekly, you will accumulate drug.
Now at the end of induction then, what you want to do is maintain the drug levels that you have in the liver, so that you have no buildup of drug and a continuing level of efficacy.
We estimate, and that is based on the animal data we have and what we understand about this drug, that the doses to maintain the levels that you achieve with 200 or 300 milligrams in three months of treatment will be about half.
The experiments that we will do next will determine whether it is exactly 50% or 60% or 40% of the induction dose.
We will do those experiments with weekly dosing because we want to keep the experiments simple.
As we progress, we will explore in separate studies -- and I mean sometime probably as we are in late Phase IIb or III -- we will explore other dose schedules.
Do we want to give a lower dose?
Do we want to give the maintenance dose biweekly or monthly or so on?
But our primary of registration path, because of the simplicity of the approach is planned to be weekly induction, and then lower weekly maintenance doses.
Did I answer your question?
Shiv Kapoor - Analyst
Yes, that's good.
I want to ask you something on the volume of your injection.
Can you tell us roughly what the 200, 300, and 400 mg equates to in terms of volume of the injection?
Dr. Stan Crooke - Chairman, CEO
Yes, the simplest way for you to think of it is the maximum drug concentration that we can put in just water per mL is about 350 milligrams per mL.
So a maintenance dose of 100 milligrams or 150 milligrams would mean that you get a quarter to a half a mL injection.
Shiv Kapoor - Analyst
Okay, that's good.
Dr. Stan Crooke - Chairman, CEO
And by the way, we have tested this drug at volumes up to 2 mL, it is well tolerated.
And certainly, 1-mL injections with small needles so far have proven to be extremely well tolerated.
Shiv Kapoor - Analyst
Fair enough.
Another follow-up on FH.
You mentioned a possible meeting with the FDA after you have results from the ongoing increasing dose studies.
Will this be like an end of Phase II meeting where you decide what the game plan for a Phase II is?
Dr. Stan Crooke - Chairman, CEO
Yes, that is our plan.
Obviously, we cannot speak for the FDA.
But that is our plan.
Shiv Kapoor - Analyst
Okay, some quick questions on 715 and your OncoGenex collaboration.
You have had some ongoing studies in Israel looking at 715.
Can you remind us what those trials are and, given the past political turmoil there, what your current expectations are on the completion and data release?
Dr. Stan Crooke - Chairman, CEO
We did -- the study that was designed in Israel was the key combination study in which we add 715 to sulfonylurea in patients who are on controlled -- have fully-controlled Type II diabetes with just stable sulfonylurea dosing.
I think we reported last month or quarter that because of the war in Israel, that study was unable to be conducted.
We moved that study back to the sites were we did the original Phase II trial; that is in Poland and Russia.
The study is now enrolling nicely.
The war and the turmoil there probably cost us several months.
We have also powered the study a bit larger than we had planned earlier, so we are treating more patients, and so the study will take a bit longer.
We expect to have results from this critical combination trial at least for the lower dose, 100 milligrams per week, next year.
The 200-milligram dose is a little harder for me to judge yet, because enrollment in the 200-milligram program is dependent on getting the 100-milligram dose done and evaluated.
So it is a little harder to predict exactly when that will happen.
Shiv Kapoor - Analyst
Okay, a quick question on OncoGenex.
When do you expect results from the lung cancer and the prostate cancer trials?
I believe those are the two of the five trials that they are running that have 70 to 80 patients in them.
When do you expect results from that (multiple speakers)?
Dr. Stan Crooke - Chairman, CEO
As far as I -- it has been a while since I looked in on the OncoGenex collaboration.
But so far as I know, all those studies are progressing well; and they are projecting talking about them in 2007.
But I don't have more precise information than that yet.
I will be getting it in time for our setting up our goals for 2007.
Shiv Kapoor - Analyst
All right, thanks.
Dr. Stan Crooke - Chairman, CEO
Please don't hesitate to call our friends at OncoGenex if you want more detailed information.
Shiv Kapoor - Analyst
All right.
Operator
Larry Rifkin, Cumberland Associates.
Larry Rifkin - Analyst
Thanks for going through the Ibis business plan again.
That was helpful.
Really just a brief question, in terms of AHA and the data in both combo and monotherapy.
Are the time frames over which each of those drugs were tested at 300 milligrams -- I mean, the drug was tested at 300 milligrams both in combo and monotherapy.
Do those time frames match up with the time frames for the lower doses that you have already presented data on?
Meaning at five weeks in the combo and three months in the mono.
Dr. Stan Crooke - Chairman, CEO
We have only presented three-month data in the single agent.
That is all the data that have been presented to date.
The single agent 300 milligram is exactly the same time frame.
So you'll be able to make a direct comparison of 300 to 200 in 13 weeks of treatment, for example.
Larry Rifkin - Analyst
Great.
Dr. Stan Crooke - Chairman, CEO
The schedule in the 300 and 200 is exactly the same, so the comparison will be a little easier to make.
Because you know we were fiddling around with the schedule in the 50 and 100.
The combination data will be 30, 100, 200, and 300 milligrams, all of them for five weeks only.
We will not have 12-week data in combination or 13-week (indiscernible) three-month data in combination until sometime in 2007; and I don't know precisely when that will be.
Larry Rifkin - Analyst
Okay, great.
Thanks so much.
Operator
(OPERATOR INSTRUCTIONS) Mark Monane from Needham.
Mark Monane - Analyst
A question on the rest of the pipeline.
I know the [team] devoted to 301012, but very interested in the data from -- on survivin as a potential agent, neoplastic, anticancer agent.
Will there be any presentations from survivin or other molecules lent out to other companies, in collaboration with other companies, at the upcoming scientific meetings?
Dr. Stan Crooke - Chairman, CEO
We are excited about survivin and eIF-4 and the other drugs that we hope that will be in the Lilly collaboration.
We know that there is excellent progress being made at Eli Lilly.
But I can't tell you when Eli Lilly will be presenting the data.
We are -- and I'm sorry about that, but I can't.
With regard to the other drugs in various collaborations, the OncoGenex work continues to go spectacularly well.
ATL is back on track with a VLA4 antagonist; this is in clinical trials.
So in 2007, I think we should have quite a bit of partner drug news from both our cancer and anti-inflammatory drug pipeline.
Mark Monane - Analyst
The last question is --.
Dr. Stan Crooke - Chairman, CEO
I'm sorry, Mark, I can't be more specific.
Mark Monane - Analyst
No, I understand.
We will follow up and look forward to that.
The last question is, we saw recently a very large deal for Merck to get involved in the RNAi space.
I am hoping you could take this opportunity and give us your comments on the state-of-the-art of RNA medicines, be they antisense or RNAi or aptamer.
I know you have been in the field for while.
Can you talk us your thoughts on these RNA medicines as a platform?
Dr. Stan Crooke - Chairman, CEO
Antisense works.
Antisense works in cells, animals, and human beings.
We have shown it.
And 301012 continues to prove it in spades.
Antisense is a broad platform with many mechanisms, including siRNA.
We think we have patents that provide significant control of the entire antisense platform, including the medicinal chemistry and mechanisms that are part of the siRNA mechanism.
We think the siRNA mechanism is very exciting for the long term.
We have a great deal to learn before we know exactly how to use it and what kind of drugs will be made.
We are very excited that Merck invested in RNA-based drug discovery and acquired Sirna.
We think that reflects a continuing growth in interest and belief that the platform that Isis has pioneered is going to generate great value.
We also think it represents a continuing and increasing need to invest in novel technologies to improve the productivity of the pharmaceutical industry.
So we think it is great for the field, and we hope it will be great for Merck.
Mark Monane - Analyst
Again, thank you very much for the added information.
Operator
Dr. Crooke, I am not showing any further questions at the moment.
I will turn the call back to you.
Dr. Stan Crooke - Chairman, CEO
If there are no further questions, certainly I want to thank everyone for your attention and for your patience on this somewhat long conference call.
But we look forward to talking to you again at the AHA.
Bye-bye.
Operator
Thank you.
Ladies and gentlemen, this does conclude the conference call for today.
We thank you all for participation and ask that you please disconnect your lines.
Thank you and have a good day, everyone.