Ionis Pharmaceuticals Inc (IONS) 2013 Q2 法說會逐字稿

Welcome to Isis Pharmaceuticals' second-quarter financial results conference call.

Leading the call today from Isis is Dr. Stan Crooke, Isis Chairman and CEO.

Dr. Crooke, please begin.

Good morning.

Thanks, everyone, for joining us on today's conference call to discuss our second-quarter financial results.

Our agenda for this call is, first, Beth will walk you through our financials, then Lynne will highlight recent news from our pipeline, and I'll close the call by focusing on some of our upcoming events.

Joining me on today's call are Lynne Parshall, Chief Operating Officer; Beth Hougen, Chief Financial Officer; and Wade Walke, Vice President of Corporate Communications and Investor Relations.

Since I just announced Wade's new title, I should take a minute to congratulate Wade.

It's a nice step, and I think a very well-deserved recognition.

And now, Wade, let's see if you are any better at this.

Will you read your forward-looking language statement, please?

Thank you, Stan.

A reminder to everyone that this webcast includes forward-looking statements regarding the financial outlook for Isis, Isis's business and financial plans, and the therapeutic and commercial potential licenses, technologies and products in development.

Any statement describing Isis's goals, expectations, financial or other projections, intentions or beliefs, including the commercial potential 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 as human therapeutics, and in the endeavor of building a business around such drugs.

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 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's programs are described in additional detail in Isis's annual report on Form 10-K for the year ended December 31, 2012, and its most recent quarterly report on Form 10-Q, which are on file with the SEC.

Copies of these and other documents are available from the Company.

Now, I'll turn the call over to Beth to discuss our financial results for the second quarter of 2013.

Thanks, Wade.

Good morning, everyone, and thank you for joining us.

I'm pleased to report that we ended the quarter in a very strong financial position, with more than $590 million in cash, which is a considerable increase over 2012 year end.

In addition, our pro forma net operating loss for the first half of the year was close to break-even, at less than $1 million.

Before I get into the details of these financial results, I'd like to outline the key messages.

First, our business model is working.

Second, we're in a healthy financial position because of the successful execution of our business model.

We received more than $90 million from our partners in the first half of this year, and we expect to exceed, or in the case of cash significantly exceed, our financial guidance for this year.

The improvement in our already-healthy cash position was primarily due to our recent equity offering, and the $93 million we've received from partners so far this year.

In the second quarter alone, we received $30 million from our new collaboration with Roche, $16 million from AstraZeneca, and $3.5 million from Biogen Idec.

As you can tell from this list, our business model provides us with cash and revenue from numerous sources.

The improvement in our NOL over last year was also driven by the success of our partnership strategy, from which we earned more than $70 million in revenue from the amortization of upfront fees and milestone payments in the first half of this year, while keeping our expenses nearly flat.

Let me spend a few minutes discussing how this will affect the rest of the year.

In our year-end call in February, we projected that our 2013 revenue would include $45 million from milestone payments as our partner drugs advance in development.

In the first half of this year, we've already exceeded our projections by earning nearly $50 million, including $32.5 million from Genzyme and GSK, $10 million from AstraZeneca, and $3.5 million from each of Biogen Idec and Xenon.

With numerous successful partnerships encompassing multiple drugs, we have many opportunities to earn additional milestone payments from our partners as we progress through the rest of the year.

For example, already in the third quarter, we've earned the latest milestone payment from GSK for advancing our Phase 3 study on ISIS-TTRRx.

While we're pleased to earn this milestone payment, we are even more pleased with the progress of the Phase 3 study that achieving this milestone represents.

We're looking forward to earning additional milestone payments as the ISIS-TTRRx Phase 3 study progresses, and as our other partner drugs progress as well.

Another significant component of our revenue is the amortization of upfront fees from our collaboration.

In our guidance, we included $40 million from this component of our revenue.

Here again, we are on track to meet or exceed our guidance.

Our revenue in the second quarter included new revenue from the amortization of the $30-million upfront fee from Roche for our Huntington's disease program.

In addition, we've earned approximately $22 million in revenue from our other collaborations, primarily AstraZeneca and Biogen Idec.

We are also on track to meet our guidance of revenue from the sale of drug to Genzyme to support KYNAMRO's commercialization.

The efficiency of our antisense technology, and our successful execution of our business model, drives our strong financial results for both revenue and expenses.

In the first half of this year, our expenses were nearly flat compared to the same period last year, despite the fact that we continue to advance our pipeline across a broad range of therapeutic areas.

For the second half of the year, we expect our expenses to increase modestly, as we prepare for Phase 3 programs on our wholly owned drug, ISIS-APOCIIIRx, and our partner drug, ISIS-SMNRx, and of course, we'll continue to advance the ongoing Phase 3 study for ISIS-TTRRx.

With more than $590 million in cash, we are in an excellent position to fund late-stage clinical development of drugs like ISIS-APOCIIIRx.

By retaining certain drugs longer in development, we keep control, and we have the opportunity to keep the larger portion of the commercial revenue for these drugs.

As you can see, we've had an excellent first half of the year.

Because of the effective execution of our business strategy, and the success of the drugs in our pipeline, we are on track to exceed our financial guidance for the year.

And we expect the momentum from the first half of the year to carry forward into the second half of the year.

We will provide you with more details when we have our update on guidance in the third quarter.

Now, I'd like to turn the call over to Lynne.

Thanks, Beth.

We predicted that 2013 would be a year of substantial growth and maturation for Isis, and the year is shaping up to be just that.

Of course, the most important event this year was the commercial launch of KYNAMRO in the United States to treat patients with homozygous familial hypercholesterolemia.

Beyond KYNAMRO, we've had a number of other important events that have added significant value to Isis.

ISIS-APOCIIIRx is one of the drugs in our pipeline with the potential to be in Phase 3 clinical development early next year, and a drug that is not partnered.

We plan to develop ISIS-APOCIIIRx internally through Phase 3. ISIS-APOCIIIRx is intended to treat patients with severely high triglycerides, either as a single agent or in combination with other triglyceride-lowering drugs.

Recently we presented two sets of Phase 2 data on this drug.

And the data from these two studies were remarkably consistent.

In both studies, ISIS-APOCIIIRx produced statistically significant reductions of APOCIII and triglycerides, as well as an increase of HDL, the good cholesterol.

In addition, the positive effect of ISIS-APOCIIIRx treatment on other lipid parameters, improvement in glucose control, and trends towards enhanced insulin sensitivity, suggest that this drug could have a broad and useful therapeutic profile.

We're also pleased with the tolerability profile of ISIS-APOCIIIRx, a newer generation 2.0 drug.

Not only are our newer generation 2.0 drugs more potent, but these drugs also have a lower incidence of injection site reactions and flu-like symptoms.

On our call last month, an investigator for both KYNAMRO and ISIS-APOCIIIRx discussed the improved tolerability profile he observed with the newer generation 2.0 drugs like ISIS-APOCIIIRx, and how these improvements should enhance the overall profiles of our drugs.

We're very enthusiastic about the potential of this drug, and we look forward to reporting at the ESC at the end of this month, the third set of data on ISIS-APOCIIIRx.

In this study, we evaluated ISIS-APOCIIIRx as a monotherapy in patients with very high to severely high triglycerides.

This is a patient population that is very much like the one we plan to study in Phase 3. Later this Fall, we plan to meet with regulators to discuss the Phase 3 program with the goal to get that program under way early next year.

We hope to be able to update you on our progress at the AAK meeting in November, where we will present a summary of all the Phase 2 data for ISIS-APOCIIIRx in an invited presentation.

Yesterday, we reported data from a Phase 2 study of ISIS-CRPRx in patients with rheumatoid arthritis.

CRP is an interesting but controversial target.

CRP is strongly associated with the presence and severity of many diseases, including numerous inflammatory and cardiovascular diseases.

In this study, by treating patients with chronically elevated CRP with ISIS-CRPRx, we had three goals.

First, to confirm in patients the substantial CRP-lowering activity we observed in our earlier clinical studies.

Second, to gain additional experience with the drug in a well-characterized disease where CRP is chronically elevated before testing in more severe indications.

And third, to evaluate whether lowering CRP correlates with an improvement in RA symptoms.

The study accomplished these goals.

Patients treated with ISIS-CRPRx achieved rapid dose-dependent mean reductions of up to 67% in CRP.

In addition, we observed improvements in the signs and symptoms of RA decorrelated with reductions in CRP.

Patients treated with ISIS-CRPRx showed improvements in their disease, however, these improvements were not statistically significant when compared to those observed in patients in the placebo group, which demonstrated a higher-than-expected response in both symptom score and CRP reduction.

Also in this study, the drug was safe and well tolerated.

So, while we were disappointed that we did not see a greater impact on RA symptoms in these patients, and do not plan to further develop ISIS-CRPRx for RA, the information we've gained from this and earlier studies will help us as we assess the opportunities for ISIS-CRPRx in more severe disease indications where elevated CRP is associated with worse symptoms.

One of these diseases is atrial fibrillation, in which high levels of CRP are associated with the duration and severity of the disease.

We plan to report data from our Phase 2 AF study next year in the first half.

Earlier this year, we reported the data from the first study of our SMA drug.

Although early stage, we observed meaningful improvements in measures of disease.

This is the first time an antisense drug has been given to children directly into the spinal fluid, and so we were very pleased that the drug was well tolerated.

We're currently evaluating ISIS-SMNRx in two clinical studies, one in infants with the most severe form of SMA, and a second study in older children with SMA.

Both of these studies will complete and report out later this year or early next year, and we plan to begin registration directed studies earlier next year.

ISIS-TTRRx is a drug in Phase 3 development to treat patients with transthyretin amyloidosis, a severe and rare genetic disease characterized by progressive dysfunction of peripheral nerve tissue.

This is a program that we were able to move rapidly over the course of two years from research stage to late-stage clinical development.

The study is progressing well, and we recently earned a milestone payment of $2 million associated with advancing the Phase 3 study.

As the study progresses, we have the potential to earn another $48 million in milestone payments prior to GSK exercising its option to license the program.

In addition to these drugs, we have a pipeline of maturing products with numerous opportunities to showcase the advances in our pipeline, and the productivity of our antisense drug discovery platform.

Our severe and rare disease franchise is continuing to expand and advance.

We recently added a new severe and rare drug, ISIS-PKKRx to treat patients with hereditary angioedema.

ISIS-PKKRx is of particular importance as it is one of the drugs like ISIS-APOCIIIRx that we may want to retain longer, and develop on our own.

Our partners are also making substantial progress with antisense drugs and our technology.

For example, Regulus, a company we cofounded to develop antisense drugs targeting microRNAs, has moved its first drug into development.

Xenon recently licensed an antisense drug from us to treat patients with anemia [and] chronic disorders, a common problem associated with a variety of diseases.

As our partner drugs succeed, we will continue to benefit from participating in license and sub-license fees, milestone payments and commercial revenue.

We also benefit in our investments beyond our pipeline through equity positions we have in our satellite company partners.

We believe that all these events add value to Isis and to our shareholders.

In summary, 2013 is shaping up to be a successful year for our technology and our pipeline.

We've demonstrated that our newer second-generation antisense drugs have significantly better tolerability profiles than our previous generation 2.0 drugs.

We've demonstrated that it's feasible and safe to dose antisense drugs intrathecally in children.

We showed in multiple therapeutic areas that antisense drugs can provide a positive effect on disease.

And we've been very successful in implementing our business strategy, which is built on the efficiency of antisense technology, and is designed to maximize the value of our products.

We look forward to an equally exciting second half of the year.

And with that, I'll turn the call back over to Stan.

Thanks, Lynne.

As Lynne mentioned, we've had a number of successes already this year.

It's been a very good first half of the year for us.

We believe that the value of our technology and our pipeline is just now beginning to be realized.

And we have the resources to continue to advance the drugs in our pipeline, add new drugs to our pipeline, and of course, continue to advance our technology.

We plan to continue this momentum through the end of the year with a number of pipeline events that we will be sharing with you.

First, at the end of this month, we will report the next set of Phase 2 data on ISIS-APOCIIIRx at the European Society of Cardiology meeting in Amsterdam.

In this study, we're evaluating ISIS-APOCIIIRx as monotherapy in patients with very high to severely high triglycerides.

We're hopeful that these data will be consistent with our earlier data on ISIS-APOCIIIRx in which we observed significant reductions from APOCIII and triglycerides, with reductions in other anthropogenic lipids, and significant increases in HDL.

In November, at the American Heart Association, we'll provide additional detail on the Phase 2 programs for ISIS-APOCIII, and hopefully we'll be able to share our Phase 3 plans with you at that time.

We're beginning Phase 2 studies on three drugs to treat type 2 diabetes.

Each of these drugs is designed to act through distinct and complementary mechanisms to improve glucose control in patients with diabetes.

We plan to complete and report the data from the ongoing ISIS-SMNRx trials by the end of this year or early next year.

Once these studies are complete, we'll move rapidly toward initiation of registration directed trials in infants and children through partner, Biogen Idec.

Finally, we will continue to move our pre-clinical programs into first-in-man studies, and we'll add new drugs to the pipeline.

With that, I want to thank everyone for joining us today, and we'd now like to entertain questions.

Denise, if you could set us up for questions, please.

Certainly, sir.

Ladies and gentlemen, we will now begin the question-and-answer session.

(Operator Instructions)

Chad Messer, Needham and Company.

Yes, thanks for taking my question.

It's regarding the trial you reported yesterday in rheumatoid arthritis for ISIS-CRP Rx.

My understanding from conversations with the guys is that RA was always kind of a more proof of concept.

And maybe not even the most practical place to move forward even before it the data had come out.

I just wanted to sort of confirm your thinking on that and sort of why, then, RA was sort of a good place to try to look for an early signal?

Chad, your recollection is correct.

We think that ultimately the most interesting opportunities for ISIS-CRP Rx are in cardiovascular and end-stage renal disease.

But, the cardiovascular indications that we're interested in our associated -- they are very severe indications, some forms of acute coronary syndrome for example.

So, we felt that before we went into those patient populations, we needed added experience.

We needed to demonstrate that we could lower CRP that was chronically elevated in -- associated with the disease while we had lowered CRP in normal volunteers and we had lowered CRP in a situation in which CRP was induced.

We had not demonstrated we could lower chronically elevated CRP.

That was a critical step that we needed to accomplish.

And then, we needed added experience just to be confident that we had a drug that was ready to go into these patients with more severe illnesses.

We needed that background information to deal with whatever potential events might happen in these patients unrelated to the drug early in trials.

RA was what we decided on as a feasible experiment.

We could get the experiment done, we would be able to do it in three months -- with three-month dosing and they are were ready measures and validated measures of disease activity.

RA was never a therapeutic focus for us because treatment for RA is pretty good.

There are some opportunities in RA, so if we had seen really good activity there we might have gone back and reconsidered our decision.

But, with all the TNF alpha's and everything else that are available -- that's available for RA patients, treatment is pretty darn effective today.

In contrast, diseases like atrial fibrillation, some of the acute coronary syndrome situations and end-stage renal disease are really in desperate need of improvements and therapy.

So they are much clearer, more direct routes to a commercial opportunity.

So, that was the logic and again, the way I try to encourage people to think about what we're doing with CRP Rx is an exploratory Phase II that will help us identify where the opportunities, where the commercial opportunities for this drug reside.

And today I think we could be confident commercial opportunity in rheumatoid arthritis is not right for this drug.

All right, thank you.

That is actually very, very helpful to hear.

Just as follow-up, any -- or what are your plans for getting the RA data out in a meeting or publication?

And also, when should we expect to hear more about your plans for development?

Are you, at this point in time, waiting for the atrial fibrillation trial to report out before making any further decisions or might we hear something before then?

Well we're just -- we just are finishing the analysis of the study and of course, then we'll look for opportunities to present the data.

We don't have a spot today.

With regard to next steps, what we're doing right now is considering all the potential next steps.

These are complex decisions and armed with the information we have, what we're now doing is sitting down now with experts and looking at various options.

And we will make sure that as soon as we feel we have some confidence that we know exactly what direction we're traveling.

It will take a little while, Chad, this could be a complex decision.

All right, thanks so much, Stan.

Nicholas Abbott, BMO Capital Markets.

Good morning, thanks for taking my question.

Questions on APOCIII and whether you think an injection device is going to be important?

Understandably there's a lot of partnering interest here and there's product, presumably if it's going to be used by diabetic patients at some stage who are used to bearing devices.

How important do you think a device is and how does that feature in potential partnering discussions?

Thank you.

I think we benefit a great deal here from our experience with KYNAMRO.

And, we agree that presentation and the device that's used with APOCIII Rx are important.

And, it's also very important, very early in trials, certainly for Phase III based on our experience with KYNAMRO, to have an optimal presentation and injection device available.

So that the experience in Phase III is representative of what you can expect with the right approach.

We think we've actually made that decision and I think we have a pretty good idea of what we're going to do in the sort of device that we'll use in Phase III.

Of course we'll continue to evaluate all the alternatives and there are a variety of alternatives, pens, needles, injectors, a lot of different things.

But we feel pretty comfortable with the choice that we've made for Phase III today.

And again, that's one of the benefits of having the KYNAMRO experience to learn from.

Just building off that, what do you envisage a Phase III program looks like and the associated timeline?

I'd like to defer answering the question until we have our end of Phase II meeting with regulators.

We are -- we have a clearer Phase III proposal but we want to be confident that we have the general agreement with the proposal we described for Wall Street.

You'll just have to give us a little time.

We're hopeful that we'll be able to do that sometime later this year.

That's understandable.

Thank you.

Eric Schmidt, Cowen & Company.

Thanks for taking my questions and good morning.

Is there anything you guys can say on the KYNAMRO ramp, leading indicators, market share, any up-tick trends you can provide or do we need to go to [Sanic] for that?

We can't provide details today.

What I would sort of comment on is that everything we're hearing about the marketplace and the competition and KYNAMRO's positions is very positive.

And, so we are encouraged by what we're out hearing from physicians, hearing from a variety of other sources and encouraged by the progress that Genzyme is making in the launch.

Lynne is closer to that than I am.

Lynne, do you want to add or subtract anything?

No but what I would say is we do plan, at our year-end conference call, to provide more color on the launch.

It is still, of course, early days in a new market for the drug but I would echo Stan's sentiments, everything we're hearing is encouraging.

We continue to believe KYNAMRO is a great drug and --

So that --

This position in these patients will get sorted out by the physicians and patients.

And I think that it may take a little while before we know exactly what that is.

We think it's a great drug and very much under appreciated in some corners of the world.

That would be better Q4 earnings call then?

Yes.

Yes --

And then -- go ahead --

I'm sorry.

Stan, I saw that there is a new candidate mentioned in the press release, ISIS-ANGTL3 Rx, could you provide a quick bit of background on that?

It's the next entry in our lipid franchise and I'm very, A, impressed that you noticed and, B, pleased you asked.

I'm really excited about our lipid franchise.

We have KYNAMRO which I think is a much better drug than is appreciated.

We have APOCIII that I think should be a major factor in fixing triglyceride problems.

And then we have LPa, which is very under appreciated cardiovascular risk factor but is tremendously important.

That Phase I study is finishing now and we'll be talking about that drug later this year.

ANGTL3 is the fourth entry into the lipid franchise.

In animals, ANGTL3 is the most effective lipid lowering agent we've identified.

That's from a company that was the first to identify apoB-100 as a target and KYNAMRO the first to show activity for PCSK9, the first to do LPa and the first to do APOCIII.

And ANGTL3 appears to reduce all of the cardiovascular risk factors and so we think of it as an agent, sort of panned dislipidemic agent.

We see that as sort of a wrap up of our lipid franchise and of course were not going to really know how that drug performs until we get into man and ask the question in man.

But, it's a very exciting drug on its own and very exciting in the context of the lipid franchise we're building.

Okay that's great and one quick financial question for Elizabeth, it looks like you've -- as you mentioned, you've already exceeded your expectations on the top-line for partnership milestone revenue.

You didn't really change the soft guidance you provided for the year.

Should we expect the second half of the year to see not as many milestone payments as we saw in the first half?

What kind of loose guidance would you provide on the top line for the remainder of 2013?

So, I think first of all we've got lots of opportunities as the drugs move through development with all of our partnership's to earn additional milestones.

So, to kind of give you a sense, I think you just want to plan for lots of opportunities.

We're not going to give specific guidance until later in the third quarter, but I think the second half of the year is going to be very exciting.

We're going to see a little bit of increase on our expenses and the revenue is going to continue to be strong.

We are of course -- obviously we're going to have to adjust our guidance in a positive direction and we'll do that later.

Okay, thanks, guys.

Stephen Willey, Stifel Nicolaus.

Hi, good morning, I just have a couple of pipeline questions.

First, are we still anticipating to hear eIF-4E data the second half of this year?

And, have you identified which -- I kind of understand there was a part one to each of these studies, correct?

Where there were a couple of different doses that were being evaluated and I'm guessing the data that we'll be seeing will be from the part two.

And do we know which doses were moved into that part two protocol?

The answer to your questions are yes.

Okay.

Yes, and for more granularity, we did move through the part one with no issues and so we took the maximum dose in that part one into the part two.

Okay.

And the part two's are in chemonaive patients, is that correct?

No not chemonaive.

So in one of the trials it has first line but after -- so it is after the first treatment and so they are castrate resistant prostate in one trial.

And the other trial, again, was second line in lung cancer, non-small cell.

These are pretty advanced disease, as you would expect for an early Phase II, and the studies are -- the dosing is finished and we're waiting until we have progression free survival data and survival data from the studies.

And we'll report all that out probably quite -- late this year when we actually have the information.

Okay.

But the long study is actually --

They are still blinded.

But the long study is actually on top of a plat and tax backbone correct?

That's correct and the prostate is with --

Prednisone and docetaxel.

Docetaxel, I think.

Okay.

And then, on the myotonic dystrophy program that you have a with Biogen, I know -- I think there was some guidance around maybe having a development candidate announced in 2013.

And I'm just trying to figure out kind of where we are pre-clinically and maybe when we might be getting an update on that and then if there is an opt in associated with that update?

You can expect us to provide new information about myotonic dystrophy in the near future.

We're on track to achieve the goals that we set out.

And, Lynne, can you --?

There is a significant milestone associated with that.

Did you ask opt in?

It's not the licensing time yet but there's a significant milestone associated with that.

So they don't opt in as a function of the pre-clinical data?

They do not.

The licensing for that compound is at the end of the Phase II.

In other words, the first clinical proof of concept and that's the way most of these transactions are structured, which is the first clinical proof of concept is when the actual license fee gets paid.

And we turn the reins over to the partner in terms of handling the development activities themselves.

Okay.

And just going back to the eIF-4E compound for one second.

Does Lilly still have opt in rights on that program as well?

Yes, they do.

They do?

Okay.

And they're opting rights happen when we disclose the first data from these studies.

Okay.

That's the trigger.

And one last question, any granularity around how much incremental STAT3 data we may be seen at ASH?

I know that they were the original five patients that were presented at ASCO and I know the dose escalation process is ongoing but any color around how much more data we might be seeing?

I don't think I can give you much more other than to tell you that the lymphoma trial is proceeding well, enrollment is risk.

And so we'll have quite a bit of information update.

And then the HTC trial that is been run by AZ is also off to a good start.

So, I can't tell you when that study will be at a place where it would be reportable but both of those efforts are going very well.

Okay, thank you.

(Operator Instructions)

Salveen Richter, Canaccord.

Hi, this is Andrew Goldsmith on the line for Salveen.

Thanks so much for taking my question.

I just had a follow up on the CRP data from yesterday.

I was just curious what's in the placebo, if it's random oligonucleotides or just water, kind of getting at why you think you saw stronger than expected response on that arm?

We never -- a placebo is a placebo.

A random oligonucleotide would inappropriate to use in patients as a control because that would be a different drug molecule that could have potential effects.

And, the placebo response, as you know, placebo responses in rheumatoid arthritis are actually large and common, especially in patients who have had rather poor care.

We wanted to do this study in patients who were not on TNF alpha inhibitors and of course most people are.

So this study was conducted in Russia and Eastern Europe and so we expected a pretty meaningful placebo response as these people came in, got good medical care, lost weight, just got attention in their RA.

And late in the study we did see quite a significant placebo response.

So it was a little greater than we expected and, therefore, the study wasn't powered sufficiently to detect a difference between placebo and treated.

Okay that's helpful, thank you.

Kind of related to that then, do you think -- I think the number, only number in the press release is we saw up to 67% reduction in CRP.

Was that in line with your expectations and do you think -- I'm getting at the retrial for the atrial fibrillation trial, if you think that will be sufficient to show a clinical benefit?

Yes, we're very pleased with the 67% reduction that is consistent with what we would have expected for this drug.

We saw very nice reductions at both doses with the drug.

So that part of the trial, and that was the primary end point, was very successfully accomplished which now means that we have seen reductions in normal volunteers with low CRP.

We've seen substantial reductions in subjects with very, very high acute levels of CRP.

And now in patients who have a chronic, ongoing disease process we were able to reduce CRP levels significantly.

And that's important because their background disease is causing the continued to generate CRP at a higher level than they should.

So, the question we asked was could we reduce it against that disease drive for CRP and the answer is yes.

Does that answer your question?

Yes that's very helpful, thank you.

That's it, thank you so much.

Doug Adams, Tocqueville Asset Management.

Thank you.

I have a few questions.

Good morning, everyone.

The first is, could you remind me, given KYNAMRO, the Phase III timeline on the heterozygous population?

The focus of age study is enrolling and we have said we expect to complete enrollment this year.

Remember, that is a one-year study so the time to actually being able to analyze data would be one year from when the last patient was enrolled.

Okay.

The new lipid target, will that be developed with the 2.5 chemistry or is that still a 2.0 chemistry?

That's 2.0.

It is one of the new 2.0's which is more potent and we expect better tolerated.

But, we don't think we have -- it's not appropriate to think of 2.5 chemistry for chronic diseases yet.

We want to get more human safety experience before we make -- before we develop our first chronic -- our first 2.5 drug for chronic administration.

And then, the FDA obviously on their breakthrough designations hasn't totally come up with what that means in terms of accelerated timelines and whatnot.

But of the candidates in your pipeline, other than the SMN, have any others been filed for breakthrough status?

We're looking at all of our rare disease programs for an opportunity for breakthrough.

As with you, I don't think anybody in the industry quite knows what it's going to mean but we think it can't hurt.

One of the requirements for breakthrough is that you have to have human clinical data, so obviously some of the programs aren't at that stage yet.

But the thing that we are finding with all of these drugs is that we're able to have very good dialogue with the agency and with Europe as well.

So we're getting a lot of regulatory support even absent having some specific monitor to breakthrough to put on it.

Particularly at the SMA program, we get -- we're getting a lot of guidance and attention from regulators on that program which is very useful.

I'm also going to say for TTR we had very good input from both Europe and the US.

And we're very pleased that in both venues, the move went straight to Phase III seemed to be fully accepted.

And then lastly in terms of your having to increase your milestone guidance given the results of the first half of the year.

On partnering activity in the past you've had some partnerships that have sort of come out of the blue and certainly your partner revenues have been higher as well.

Do -- should we expect or is there an opportunity that you would expect before the end of this year to have other partnerships announced?

We had the highest level of interest in partnering we've ever had in our history and I think we have a long, long track record of achieving what we set out to achieve in terms of partnerships.

So, I think the interest is there and we are highly selective with whom we partner, and what we partner, and when we partner and how we partner today.

But certainly, we think there is an extraordinarily high level of interest in our drugs, our technology and in general what we're doing at Isis.

The opportunities are present.

That's all the questions I have.

Thank you very much.

Ladies and gentlemen, this will conclude our question-and-answer session.

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

If there are no more questions, I want to thank everyone for participating.

I think the main messages today are that we're in a very strong financial position thanks to the power of antisense technology, the improved understanding of what antisense can do, and the successful execution of our business strategy.

And I think you should look for more of all of that as the second half of the year unfolds.

Thank you.

Ladies and gentlemen, the conference has now concluded.

We thank you for attending today's presentation.

You may now disconnect.