Ionis Pharmaceuticals Inc (IONS) 2011 Q4 法說會逐字稿

Welcome to Isis Pharmaceutical year-end financial results conference call. Leading the call today from Isis is Dr. Stan Crooke, Isis' Chairman and CEO. Dr. Crooke, please begin.

Good morning and thanks everyone for joining us on today's conference call to discuss our year-end financial results. Lynne will walk you through our financials for 2011 and our guidance for 2012. After that, I'll focus on what looks like a very busy year that we have ahead for us and our key goals for 2012. Joining us on today's call are Lynne Parshall, COO and CFO; Beth Hougen, Vice President of Finance; and Kristina Lemonidis, Director of Corporate Communications. Kris, will you read the forward-looking language statement please?

Sure, thanks, Stan. Good morning everyone. A reminder to everyone that this webcast includes forward-looking statements regarding Isis' business, the financial outlook for Isis and the therapeutic and commercial potential of Isis' technology and products in development. Any statement describing Isis' goals, expectations, financials, or other projections, intentions, or beliefs including the planned commercialization of KYNAMRO, is a forward-looking statement and should be considered an at-risk statement. 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 in human therapeutics, and in the endeavor of building a business around such drugs.

Isis' forward-looking statement also involves assumptions that if never materialized or proved correct could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Isis' forward-looking statements reflect the good-faith judgment of its Management, these statements are 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' programs are described in additional details on Isis' Annual Report Form 10-K for the year ended December 31, 2010, and its most recent quarterly report on Form 10-Q, which are on file with the SEC. A copy of these and other documents are available from the Company. And with that, I will turn the call over to Lynne.

Thanks, Kris, and good morning everyone and thank you for joining us. On today's call I want to review our 2011 financial results and discuss our 2012 financial outlook. 2011 was another successful year in which we achieved many accomplishments, the most important of which was Genzyme's submission of the marketing application for KYNAMRO in Europe. We maintained a strong financial position with nearly $344 million in cash, and a pro forma NOL of $61 million. Had we received the $25 million milestone payment related to FDA filing of the KYNAMRO NDA, we would have significantly exceeded our guidance, and ended the year with nearly $370 million in cash and a pro forma NOL of approximately $36 million. The NDA submission is on track for this quarter, so we expect to earn this milestone shortly.

Our continued financial strength is the best evidence of our unique and successful business strategy, which provides us with numerous ways to generate cash and revenue while prudently managing our expenses. First I'd like to focus on revenue. As a reminder, our revenue consists of several components including amortization of upfront fees we receive from our partners, R&D revenue we earn from our collaborative relationships, milestone payments, and the sale of drug to our partners. In 2011 we had new revenue from all of these sources, including revenue from amortization of fees from GSK for expanding that collaboration to include a six target and from CHDI for extending that partnership.

We also earned revenue from milestones from GSK, as we advanced our TTR drug into Phase I studies and our alpha-1 antitrypsin drug into development. We received almost $6 million from Genzyme for the sale of drug in preparation for the KYNAMRO launch. In total, we earned revenue of nearly $100 million. As you can see our business strategy provides us with many opportunities to generate revenue and cash as we form new partnerships and advance partner drugs. This provides us with a consistent and predictable revenue stream. In 2012 we expect our revenue to increase by more than $30 million, driven primarily by the $50 million in KYNAMRO milestone payments.

Upon the FDA's acceptance of KYNAMRO's NDA submission, we will earn a $25 million milestone payment from Genzyme. Genzyme plans to submit the NDA this quarter, so we expect to earn this milestone in the first half of 2012. Genzyme also plans to request priority review for KYNAMRO, so that we can get this drug on the market rapidly in the US for patients who are in desperate need. Priority review would create an opportunity for approval and launch this year, and that is what Genzyme is planning for. Upon US approval of the NDA, we will receive a second $25 million milestone payment from Genzyme. Although the two KYNAMRO milestone payments will be the most significant source of revenue for us in 2012, we have numerous opportunities to earn milestone payments for many of the other drugs in our pipeline.

The nature of our business strategy and partnerships ensures that we have a steady stream of milestone opportunities each year, although year-over-year they come from different sources. Over the last several years, we've earned between $10 million and $15 million in milestone payments each year, as we and our partners advance drugs in our pipeline. For example, last year we earned $10 million in milestone payments from GSK for our TTR drug and our alpha-1 antitrypsin drug. In 2012, we plan to initiate a clinical study of our TTR drug in patients with familial polyneuropathy. We also plan to begin a Phase I clinical study of our alpha-1antitrypsin drug. Upon achievement of these two events, we will earn $15 million in milestone payments from GSK. Of course, we anticipate we'll have other milestone events. While it's difficult to know which specific milestone payments we may earn in any given year, this year we're projecting that we'll earn non-KYNAMRO milestone payments in the $15 million range, consistent with the amounts we've earned in the last several years.

Because of our successful implementation of our partnership strategy, a large and predictable component of our revenue year-over-year is the amortization of up-front fees from our partners. In 2011, we recognized new revenue from the amortization of fee we received from GSK and CHDI. Already this year, we've began amortizing the $29 million we received from Biogen Idec when we entered into a new collaboration with them in January. So this year, we project revenue from amortization of upfront fees of over $40 million. This compares to $75 million in 2011, which was higher because it contained a full year of amortization from our Genzyme collaboration.

Our progress in 2011 positions us for another busy year. In 2011, we advanced eight drugs into first-in-man clinical studies. We initiated a Phase II program on our CRP drug and we and added six new drugs to the pipeline. We reported positive clinical data on eight drugs, demonstrating that our drugs are performing consistently across many disease areas. We plan to advance five drugs including our TTR, ApoCIII, and Factor XI drugs into Phase II or Phase II/III studies this year. You may recall that we presented data, demonstrating that these drugs worked as we expected and were well tolerated, at our R&D day in January. We also plan to initiate to more first-in-human studies and bring three to five new drugs into our development pipeline.

With all of this work for 2011, we're still projecting only a nominal increase in our operating expenses of approximately $10 million, which is about a 7% increase over 2011. The increase is primarily in development because drug development gets more expensive as drugs advance into later stages of clinical trials. We believe that this additional investment is valuable to maintain a strong, diverse pipeline of drugs in many different therapeutic areas, and to ensure that we can quickly move these important drugs to clinical proof of value, positioning them for licensing opportunities. At the same time we're carefully looking at every drug in our pipeline to ensure that it's an asset worthy of the next level of investment.

In years past, KYNAMRO was a significant portion of our development expenses, as we completed the Phase III studies to support the initial regulatory filings. In 2011, these KYNAMRO-related development expenses decreased by almost 50% compared to 2010. In addition in 2011, we met our $125 million funding obligation. So that going forward, we will share development expenses 50/50 with Genzyme until KYNAMRO is profitable. In 2012 we expect our KYNAMRO-related development expenses to continue to decrease. In the development costs of KYNAMRO that we will be sharing with Genzyme will be primarily related to the FOCUS FH study to support expansion of the KYNAMRO market beyond our initial indication. This decrease in KYNAMRO expenses was timed perfectly, as it allows us to increase our investments in the rest of the pipeline at a time in which we have so many exciting drugs to invest in without making significant changes in our costs.

We're keeping our research and support functions essentially flat compared to 2011. Over the past couple of years we've reached a steady state spending level that supports our research objectives of adding three to five new drugs to our pipeline every year, and continuing our technology leadership. In fact, we added six new drugs to our pipeline in 2011, two of which were generation 2.5 drugs, including our first-generation 2.5 drug, ISIS-STAT3, which will enter Phase I any day now. The key strategic point that you need to understand to put our financial performance in context is that our financial plan for the years prior to the launch of KYNAMRO was to manage our cash use so that we could progress KYNAMRO, the rest of the pipeline, and the technology without having to raise equity capital. This year we're building on our successes from 2011.

As we transition KYNAMRO from a development program to a commercial drug, we have the potential to earn a significant amount of revenue from milestones this year, a shift that illustrates the maturation of our pipeline. We'll continue to invest our resources in the areas that could provide substantial commercial opportunities and we project that we can do all these activities with a cash burn that is significantly lower than previous years. We're projecting to end 2012 with $300 million or more in cash and a pro forma NOL in the low $40 million range. As in the past, we've based our guidance on a conservative projection of our financial results, which does not include any significant new transactions. We're meeting our objectives, moving our drugs forward, and managing our cash. As we look beyond this year, we expect to begin to realize the financial benefits from our share of KYNAMRO profit. With that, I'll turn the call back over to Stan.

Thanks, Lynne. As I discussed in our R&D day in December, we believe that 2011 was a year of successes across the board for Isis. Of course, the continuing progress with KYNAMRO was key. We reported that with continued dosing in our long-term dosing study where we have dosed numerous patients now for three, or four, or more years, the efficacy of KYNAMRO continued. In the small fraction of patients who had elevations in liver fat, liver fat either stabilized or declined as these patients continued treatment with KYNAMRO. Furthermore, with increased experience, we're seeing fewer and fewer dropouts. Or said another way, our patients are staying on study, and their atherogenic lipids continue to be reduced. Great news for KYNAMRO.

Of course the filing of the MAA in Europe and the progress on that registration were gratifying as we progress toward filing the NDA. We also reported that we and Genzyme has reached an agreement with the FDA on a special protocol assessment for the study that is required for broadening the indication in the US, and it will support broadening the heterozygous FH indication in Europe. Late last year we initiated the study. The important point is that we believe with the first indication KYNAMRO will be a significant commercial success and we have a clear path toward broader indications that should result in substantial growth in KYNAMRO revenues.

2011 was also a remarkable with regard to the performance of our pipeline. We reported positive clinical data on eight different drugs. Based on these encouraging data, we and our partners have initiated three new Phase II programs, all of which are moving along nicely, and we have a number of Phase II programs that we will be initiating in the first half of this year. So this means that we ended 2011 with KYNAMRO and registration and continuing Phase III trials; a second drug, OGX-011 in Phase III; six drugs in Phase II; and five drugs poised to move to Phase II this year. In other words, our pipeline is maturing.

By this time next year, the pipeline will have shifted so that a majority of drugs currently in our pipeline will be in Phase II trials or beyond. This means that in our pipeline, there are drugs that could potentially reach the market in the years following KYNAMRO's launch. As the year progresses, we'll be highlighting those for you. The breadth of the pipeline and this maturity assure that 2012 will be another important year for Isis. We've already announced a new partnership on our drug to treat spinal muscular atrophy with Biogen Idec. Our partners and OncoGenex announced positive data on OGX-427 in patients with prostate and bladder cancers.

Of course, the most important events to come in 2012 relate to KYNAMRO. In 2012, we look forward to KYNAMRO been approved for its first indications in both Europe and the United States. The European filings are progressing well. The US NDA will be submitted shortly, and Genzyme plans to seek priority review. Genzyme continues to make solid progress in preparing to launch KYNAMRO. We believe that the most important step to take is to enhance awareness of FH and the need to treat it aggressively both in the physician and the patient population communities.

Here again the progress is very gratifying. Genzyme's efforts have been greatly enhanced by the strong emphasis reasonably placed on the disease by several organizations including the National Lipid Association. When this is coupled with the strong physician support for KYNAMRO as shown by the numerous favorable reviews written by academic lipidologists around the world, it gives us great confidence that KYNAMRO should be a significant success initially and should continue to grow substantially as added countries approve it and we gain broader indications. We look forward to adding our share of KYNAMRO commercial revenue to our financial performance. Obviously in the near term, KYNAMRO is the key to our success.

But with a pipeline of 26 drugs, we're prepared to answer the question, what's next? In the near term we hope to begin to have revenues from Ibis. Remember, we sold Ibis to Abbott, but we receive 5% of sales. The progress at Ibis continues to be very impressive, so we're very excited about that. We're also looking forward to the completion of OGX-011 Phase III trials, the rapid commercialization of our TTR and SMN drugs, both of which are targeting severe and rare diseases and the commercialization by Pfizer of EXC 001 for scarring.

Additionally we're pursuing the stage development path similar to the past we chose for KYNAMRO for our ApoCIII drug. This is a path that we hope will bring it to the market relatively rapidly for patients with very severe hypertriglyceridemia. Finally, of course, we don't have to wait for commercialization of our drugs to begin to see revenues. Our business model is to license our drugs at optimal moments, generate immediate revenues, reduce risk, reduce costs, and generate then more opportunities. As you can imagine, given the breadth, positive data that we have presented, there is a strong interest across-the-board in all of our programs.

So now, let's take a closer look at what we hope to accomplish in 2012. First, KYNAMRO. We expect the NDA submission for KYNAMRO to occur in the very near future. Dr. Raal Santos will be updating our experience with long-term dosing of KYNAMRO at the end of March. We're very excited about what we are learning, and we look forward to sharing that with you. We will present data throughout the year at major US and international lipid meetings, so we will have data to share with you about mipomersen several times this year and we are very encouraged by all the data that we're seeing. Obviously, we look forward to tangible progress on registrations in both the US and Europe.

Now let's look at the rest of the pipeline. Our partners at OncoGenex have already reported encouraging data with OGX-427. With our partners at GSK, we're mapping out a development strategy through registration for TTR, and we look forward to sharing those plans with you in the very near future. Our cardiovascular program should make great strides. We hope to have additional positive clinical data from our CRP drug this year. We will initiate Phase II studies on our ApoCIII drug and may have data from one or more of those studies this year. We will initiate our Phase II program on our Factor XI drug, and we hope to initiate a Phase I trial on the next drug in our anti-lipid portfolio, our Lp(a) agent late this year or early next year. Like ApoCIII and mipomersen or KYNAMRO and other drugs, we'll be able to know very early in clinical trials whether this drug is reducing Lp(a)and other atherogenic lipids. So that's very exciting for us.

Our metabolic pipeline will also advance. We hope to report proof-of-concept clinical data on our novel insulin sensitizer, our PDB1b drug. Similarly we hope to report proof-of-concept Phase I data with our glucagon receptor drug and our glucocorticoid receptor drug, both of which are designed to treat Type 2 Diabetes. We plan to complete our Phase I study on our first peripherally acting anti-obesity drug, our FGFR4 agent. Finally, our DGAT2 drug to treat NASH will be completing preclinical studies necessary to initiate the clinical program.

Our cancer franchise is also progressing. In addition to OGX-427, we hope to report progress on Phase II studies for our Survivin drug, and our EIF4E drug. We are initiating a Phase I study in patients with cancer on a STAT3 drug. This drug is doubly important because it is the first of our generation 2.5 drugs to be dosed in man.

Our severe and rare disease franchise will also have an important year. In addition to the important steps that we will take with our TTR and SMN drugs, our partners at ATL hope to initiate Phase II trials on ATL 1103, the growth hormone receptor antagonist for which they reported positive Phase I data last year. We look forward to reporting our Phase I experience with our SOD1 drug to treat ALS. And finally, with our partners at GSK, we look forward to initiating a Phase I study on our alpha-1 antitrypsin drug to treat this rare liver disease caused by mutant alpha-1 antitrypsin protein.

Of course we will continue to evaluate and balance the portfolio. We'll continue to invest in the drugs that merit investment. With our substantial and broad pipeline, we can make the choice to invest only in drugs that really display strong efficacy, where we can identify a reasonable development path and where we clearly have a competitive advantage. We are investing in drugs that have substantial commercial markets, including severe and rare diseases, where we may have rapid timing to the market. In general, we want to be first to the market for these diseases. We want to be a leader; we want to work on targets amenable primarily to antisense technology.

Additionally we will advance three to five new drugs into our pipeline. As always, we will continue to advance the technology across a broad front, including gaining much more information about generation 2.5 chemistry all of which will extend and broaden our patent state. Finally, we'll continue to execute our business strategy. Our model is to innovate, develop, and license. This is a cycle that we've repeated many times, and every time we repeat the cycle the value of the technology in the pipeline increases. Our business model assures that we focus on the highest value activities which are innovation, innovating new medicines, and early development, while we retain a manageable cost structure and a small innovation-focused innovation-driven organization.

So, as you can see this is a very exciting year we have ahead of us. Not just with the commercial revenue from KYNAMRO on the horizon, but for the entire pipeline and the technology. We expect that this will be the year that KYNAMRO moves Isis to a new place, and begins to demonstrate the enormity of the opportunity that we have created here at Isis. With that I want to thank everyone for participating, and we'll now open it up for Q&A. Kim, if you can set us up for Q&A, I'd appreciate it.

(Operator Instructions)

Jim Birchenough, BMO Capital.

Two questions. First, just on KYNAMRO, I'm wondering if you can update us on where we are with alternate dosing schedules that Genzyme's pursuing and whether we will see any data this year for the alternate dosing schedules? And then I have a follow-up.

Yes. As you know, FOCUS FH includes a three times a week dose schedule. So, we're progressing very nicely on offering patients alternatives. As you know, Jim, we believe that patients will vary in their preference, and our goal is to offer patients the opportunity to dose weekly if they prefer that, or use smaller doses three times a week, and eventually, to offer very low daily doses. So, all of that work is progressing.

I don't think you will see any additional data on the alternative dosing regimens this year, because that will be studied in the FOCUS FH study, which is a one-year treatment study. But remember that we've already shown that KYNAMRO behaves exactly as predicted. Of course, you can divide the doses into smaller portions and give the doses more frequently. And of course, we see activity that's roughly equal. And obviously, you have slightly different levels of injection site reaction. So, we're very confident it's going to work.

And then, Stan, just on quantifying the long-term experience a bit more with KYNAMRO, can you tell us how many patients are still receiving continuous dosing of KYNAMRO? And then maybe walk us back in terms of how many patients have 18 months of dosing experience, how many patients have a year? Just so we can get a sense of the aggregate long-term dosing data you'll put in front of FDA? Thanks.

I don't have the precise numbers in front of me, and I don't -- of course, the longer people continue dosing, those numbers change every day. But, Jim, we have between 30 and 40, if I remember correctly, that have been treated three years or longer. We have well over 100 that have been treated for longer than a year. So, we have quite substantial experience, and this is the largest experience, I think, in history of following patients serially with MRIs to measure liver fat.

So, we'll be reporting the update of that study in March, Dr. Raal Santos will be reporting that. And the only changes are that the drug looks ever better the longer we look. Dropouts decline, liver fat declines, ALTs you can dose through, and efficacy continues. And that's what we reported the last time last time we updated the analysis and we're looking forward to reporting the updated analysis in March.

Great. Thanks for taking the questions.

You bet.

Eric Schmidt, Cowen and Company.

In terms of the priority review on KYNAMRO, has Sanofi been told or suggested to by the FDA that it will get priority review?

Lynne, Do you want to take the question?

Genzyme is requesting priority review and they feel confident that they will get it.

Okay. And then, Lynne, a financial question, with the joint sharing of KYNAMRO expenses going forward, will we see R&D take a step down in Q1, as they pay their share and then gradually ramp up through the rest of 2012 as programs in your pipeline advance? Or how should we look at that on a quarterly basis?

I don't expect it to take much of a step down because of the nature of the timing of different study starts and whatnot. I would expect the first quarter to look a lot like the fourth quarter and then to see a small increase, the 7% increase that we're projecting, as we go through the year.

And then last question on TTR, do you have a better sense what constitutes now a proof of concept endpoint, and what the route to market might be for an FDA-approval endpoint as well?

Yes. I think it's -- it seems pretty -- the TTR reductions in blood represent proof of concept, and I think the endpoints are also straightforward in the polyneuropathy, which is the place that we will travel. What I'd ask, Eric, is just give us a little bit more time, because the plans -- we're working on them every day, with our friends at GSK, and they're all moving wonderfully, and we'll share all of that in quite some considerable detail with you in just a little bit.

Certainly happy to be patient, Stan, but I thought that just reduction in TTR wasn't enough to show proof of concept under the partnership with GSK. Am I mistaken?

Yes. So, maybe I'm answering two different questions. I think the key step that we had to take was to demonstrate that there was a dose-dependent reduction of TTR in blood. We did that, and of course we took TTR down tremendously and in a beautiful dose-dependent fashion.

Now, the next step is to move to Phase II or Phase II/III, and the efficacy studies will include measures of disease progression. And what I'd like to do is leave it there, because, as I say, we're going to give you a pretty detailed plan in the very near term.

Okay. But just so that I'm clear, GSK has not yet been required to make an opt-in decision, because you have not yet achieved proof of concept under the relationship? Or is that incorrect?

Lynne, you want to answer it --

Do you want me to answer, Stan? The proof of concept decision that triggers GSK's licensing is proof of concept in patients, Eric. So you're correct, it will be the next study that will form the basis for that.

Okay. Thanks a lot, guys.

Salveen Richter, Collins Stewart.

It's Laura Ekas on behalf of Salveen. Just two questions, first on the FOCUS FH study, how long do you expect it to take for this study to enroll?

I think we expect it to be substantially enrolled this year.

Okay. And then just --

Remember, it's a one-year dosing study. And all we're doing is asking KYNAMRO to lower atherogenic lipids, as it's done in 20 studies before. So, it's a study we're very confident will meet its primary endpoints, and secondary and tertiary.

Sure. And then just a question on the $15 million potential milestone payments from GSK. Do you have any clarity of whether that's a first-half event or a second-half event that you might recognize those?

Lynne.

So, those have to do with the start of the TTR study, and the start of the next TTR study and the start of the Phase I study for the alpha-1 antitrypsin drug. And both of those events are scheduled to happen in the second half of the year.

Great. Thank you.

Ted Tenthoff, Piper Jaffray & Co.

Lynne, I apologize. I got on just a minute or two late. Does the guidance that you're providing assume any profit share from KYNAMRO this year?

It does not, Ted. Genzyme is planning to launch the drug in the fall in both the US and Europe. But when you look at traditionally what the marketing and sales costs are pre-launch that a company expands, and Genzyme and Sanofi are doing, I think a great job preparing for the launch of this drug, I don't expect that the revenue will ramp up so quickly in a very short period of time that will cover all those expenses and it is a profit share.

Great. And then if I may, Stan, kind of a 30,000-foot question. With respect to the partnering strategy, you've been very successful in partnering drugs. You have, I think, articulated clearly that your goal is to advance these to proof of concept and partner them.

Can you give us a sense of where pharma's head is? Obviously, you did the nice SMA deal this year. Are they more interested in these orphan-type indications? Is there excitement around CRP? Just giving us some flavor, if you can, in terms of what's really catching potential partners' interest out there.

There's broad interest. There's certainly a lot of interest in severe and rare disease. That's a current keen interest across the pharmaceutical industry. And we have lots of opportunities that we can present.

But there is tremendous interest in the cardiovascular program with ApoCIII and Factor XI. Everyone who's in the business understands that treating triglycerides is now the next big task in cardiovascular medicine, and that while the Factor X inhibitors are better, they're not answer. And Factor XI looks very exciting.

There continues to be significant interest in the metabolic program. We've delayed partnering conversations with metabolics because we think we're going to have important clinical data on essentially all of our metabolic programs this year. But there is significant interest in that.

And as you might imagine in cancer, the interest is tied to how Generation 2.5 performs and the performance of the drugs in Phase II. Obviously, with Phase II experience, Phase I experience in cancer is not terribly relevant, and Phase II experience provides modest direction. So, there is very broad, very broad interest in all of our programs.

And as you know, we've been doing this successfully for 23 years. And the interest in what we're doing is an octave or two higher than it's ever been, as you might expect, because everything 's working. I don't know if I answered your question or not, Ted.

It sure did. Thank you so much, Stan.

It's an exciting time. This is a great time to be at Isis.

(Operator Instructions)

Jim Birchenough, BMO Capital.

Stan, just wanted to follow up on the spinal muscular atrophy program that you partnered with BIIB. There was an interesting publication in the New England Journal of Medicine very recently looking at what seemed to be an interesting finding, that peripheral levels of SMN2 were perhaps a better predictor of improvement than CNS levels.

And I know there's an intrathecal study going on right now, but I guess, A, do you have any explanation for why the peripheral levels in the liver of SMN2 might be predictive of a clinical benefit? And how quickly do you think BIIB is going to be able to move into a systemically-dosed program there? Thanks.

Yes. This is very interesting, and I'm by no means an expert, so, Jim, I think -- I'll answer it as best I can, and then I want to put you in touch with Frank Bennett, who really knows the disease and understands what's going on. Just stepping back, and this is all obvious but I'll say it anyway. Very often, you see diseases that are lethal or terribly progressive that are lethal and progressive because of some effect inordinate or another. In the case of SMA, it's neurological and neuromuscular development. But the disease is usually body-wide and multisystem. And so, as you improve the primary organ of dysfunction, then you uncover other manifestations of the disease. So it would surprise, I think, no one who's experienced that SMA might travel that course.

Secondly, we reported, I think, in Cell, or maybe Science Translational Medicine or Nature -- Nature, I think it was, that our SMA drug in mouse model of SMA produced both, when dosed systemically, produced a very significant reduction in the abnormal protein and that prolonged life in those mice significantly.

That was an important observation to us, and to many people in the field, suggesting that systemic administration might have additional benefits that go beyond just neurological deficits. So, I think there is lots of reason to speculate that both an intrathecal administration and a systemic administration could bring benefit. So, our focus with Biogen Idec right now is to move the intrathecal program along as aggressively and rapidly as is prudent, and that is really moving very nicely. Enrollment is really very good. And so far, the drug is performing well.

And as we understand the peripheral manifestations of the disease in more detail, and we get a little more experience with the drug, then of course we're looking very actively at the potential of systemic administration, as well. So, again, I think the notion of walk then run is a very apt notion for here, and it's actually very real. We'd like to get these kids able to walk. And then we'd like to get them to be able to run.

Any sense, Stan, if a systemic study might be initiated this year? Or do you think that's more going to be next year?

Next year. I don't think we'll do it this year. We've got our hands full in just getting the intrathecal study going. Don't forget that there is a lot of work going on to understand in more detail the natural history of the disease in modern times and a lot of basic science going on that will inform us about the right systemic study and the right parameters to use. So, I think there's real value in getting intrathecal moved aggressively, and continuing to advance the science so that we design the right systemic study when we do the systemic study.

Just a final question, Stan. Just on the ApoCIII program, is there a fast to market strategy there? And if there is, maybe describe that and when you think you could initiate a study that could support regulatory approval? It seems like it's much like mipomersen, you see triglyceride reductions that are pretty predictable. How quickly do you think you could move to a registration-enabling study? And what is that fast-to-market strategy?

We are in the process of really finalizing all of that more detailed planning today, and considering a variety of options to be sure that we try to retain as much of the back-end of this product and all of our products. Our approaches to licensing become quite different, as well. So the simplest way to think about it is that just as there are severe LDL problems, there are severe triglyceride problems.

Severe hypertriglyceridemia is typically defined as greater than 500 mg per deciliter, some people think 1000 mg per deciliter. Those levels of triglycerides are associated with acute pancreatitis, and the consensus opinion is that the acute pancreatitis that happens in those patients is more severe than the acute pancreatitis that happens in others. And then these people get recurrent pancreatitis if they can't get their triglycerides down.

So, there is a clear differentiation between severe and less severe high triglycerides, and we believe a clear route toward an approval process that focuses initially on severe. There's also a genetic abnormality in which you have a mutation and the enzyme that is used to degrade triglycerides in blood, LPL, and there are homozygous LPL people, and heterozygous LDL people, just like there are homozygous and heterozygous FH patients. And so again that's another opportunity for us.

So, we think there are lots of opportunities to create an attractive stage development process, and we also think there are geographical opportunities, as well, where approval criteria in Europe and other places may differ from the US.

So it's a little complicated. We will go through it in more detail. In the meantime, the initial Phase II work is getting underway, both, first in people with high triglycerides, and some of these genetic defect patients. And then in addition, we're also going to be looking at the potential value the drug can bring in diabetes.

Don't forget, lowering triglycerides typically is thought to enhance insulin sensitivity. So we're going to have Phase II quality answers to a lot of those types of questions, and be ready to talk about a rapid route to the market in various parts of the world here by the end of this year, I would say.

Okay. Great. Thanks, Stan.

Lynne, do you want to add or subtract anything from what I just said there?

No.

Okay.

Carol Werther, Summer Street.

Are we expecting an advisory panel for KYNAMRO? And can you just discuss why the filing has been delayed?

Well, I can't add any more information to what we described in December. There's a routine assay that needed some additional validation. And unfortunately, that assay wasn't completed and validated on schedule, and that caused a delay. That's very disappointing and greatly frustrating to all of us.

But I will say the benefit is that it I think has allowed us a few more months to make an even stronger filing, especially the opportunity to update the long-term open label dosing experience, which I think as we hope to show you, is very encouraging. So, that's the delay. And we're operating on the assumption that an advisory panel will be required; certainly that is the indications that we have seen from the FDA. But of course no one can know until the FDA decides whatever it decides.

Okay. Thank you.

There are no further questions at this time. I would now like to turn the call back over to Dr. Crooke for closing remarks.

If there are no further questions, just to sum up, we have an exciting year in which we expect KYNAMRO to be commercialized. You'll be seeing additional data on KYNAMRO throughout the year. In addition, our pipeline is going to move along in many, many data events that I described for you. And we're on track to finish with sufficient cash so that we don't need to consider a financing. And look forward to KYNAMRO revenues making us financially a very attractive place. Thank you very much.

Ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may now disconnect, and have a great day.