Ionis Pharmaceuticals Inc (IONS) 2020 Q1 法說會逐字稿

Good morning, and welcome to the Ionis Pharmaceuticals First Quarter 2020 Financial Results Conference Call.

As a reminder, this call is being recorded.

At this time, I would like to turn the call over to Wade Walke, Vice President, Investor Relations, to lead the call off.

Please begin.

Thank you, Alisa.

Before we begin, I encourage everyone to go to the Investors section of the Ionis website to find the press release and related financial tables, including a reconciliation of the GAAP and non-GAAP financial measures that we will discuss today.

We believe non-GAAP financial results better represent the economics of our business and how we manage our business.

We've also posted slides on our website that accompany our discussion today.

With me on today's call are Brett Monia, Chief Executive Officer; Beth Hougen, Chief Financial Officer; and Richard Geary, Executive Vice President of Development.

Additionally, Onaiza Cadoret, Chief Corporate Development and Commercial Officer; and Eric Swayze, Executive Vice President of Research, will join us for Q&A.

I would like to draw your attention to Slide 3, which contains our forward-looking language statement.

We'll be making forward-looking statements, which are based on our current expectations and beliefs.

These statements are subject to certain risks and uncertainties, and our actual results may differ materially.

I encourage you to consult the risk factors discussed in our SEC filings for additional detail.

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

Thanks, Wade.

Good morning, and thank you for joining us on today's call.

Our strong performance in the first quarter reflects the sustainability of our business and unwavering commitment of our team.

Ionis was established to deliver transformational medicines to patients in need, which remains the foundation for everything we do.

I'm proud of our dedicated employees who are going above and beyond to serve the patients who depend on our medicines.

Because of the dedication of our organization, we have continued executing on our goals and have already achieved many successes across our business while effectively managing our response to the pandemic.

We are approaching the rest of 2020 from a position of strength given our operational momentum and strong balance sheet.

We remain on track to achieve our goals of advancing our late-stage pipeline towards potential near-term approvals, advancing our Ionis-owned pipeline, broadening the reach of our technology and building our commercial capabilities.

Moreover, we are reaffirming our financial guidance for this year.

Now to briefly recap our recent achievements.

We are pleased with the continued growth of our commercial medicine.

SPINRAZA's strong performance continued with growth in global markets despite some impact to new-patient starts and maintenance dosing from COVID-19.

And both TEGSEDI and WAYLIVRA maintained consistent quarterly growth with new country launches underway.

Our pipeline has also continued to deliver many important successes.

Enrollment in the Phase III Generation-HD1 study of tominersen in patients with Huntington's disease is now complete.

While there is still much to do to bring this study to its planned completion, we're now one very important step closer to providing a treatment for people living with this devastating disease.

The Phase III program for AKCEA-APO(a)-LRx continues to advance.

Importantly, this medicine recently received fast-track designation in the U.S., reflecting the significant unmet need that exists for the millions of patients with Lp(a)-driven cardiovascular disease with no approved treatment options.

Additionally, earlier this year, we and Akcea reported positive top line results from Phase II proof-of-concept studies of AKCEA-APOCIII-LRx and AKCEA-ANGPTL3-LRx, which we will now refer to as vupanorsen.

We plan to present full data from both studies later this year.

We and our partners have over 40 clinical studies underway at sites around the globe.

While some of our studies have experienced limited disruptions, primarily in countries most impacted by COVID-19, we remain confident that the mitigation strategies we deployed early in the pandemic should minimize the impact to our clinical studies and business operations.

Looking ahead, we are continuing to invest in our strategic priorities and remain on track to achieve our 2020 objectives.

We and Akcea expect to initiate the Phase III study of AKCEA-APOCIII-LRx in patients with FCS, bringing us to a total of 6 Phase III studies with 5 medicines.

We're on track to refile the NDA for WAYLIVRA in the U.S., and we plan to report additional clinical proof-of-concept results from several programs this year.

We are well positioned to achieve our goal of delivering 10 or more NDAs through 2025.

I'll now turn the call over to Beth to review our financial performance, followed by Richard, who'll discuss our pipeline progress, and then I'll open up the call for questions after some brief closing remarks.

And now to you, Beth.

Thank you, Brett.

We entered the COVID-19 pandemic in a position of substantial financial strength.

Our first quarter financial results were in line with our projections, enabling us to reaffirm our 2020 financial guidance, including ending this year meaningfully profitable.

During the first quarter, we earned revenue from multiple sources and continued to invest in our strategic priorities.

Importantly, we remain well capitalized with $2.4 billion of cash and investment at the end of March.

Over the last several years, we have consistently strengthened our financial position and constructed a balance sheet that is sustainable and will enable us to achieve our near- and longer-term goals.

Moreover, the prudent debt refinancing we undertook late last year resulted in a favorable debt maturity schedule while substantially reducing our cash interest expense and potential future dilution.

Our commercial revenue increased nearly 25% over the first quarter of 2019, of which SPINRAZA was the largest component.

On SPINRAZA's strong first quarter performance, we earned $66 million of royalty revenue, an increase of approximately 10% compared to the same period last year.

At the end of March, there were nearly 11,000 patients on SPINRAZA treatment worldwide.

In the U.S., growth was driven primarily by adult patients initiating SPINRAZA treatment.

Outside the U.S., growth was reported in all major regions.

Importantly, because of the significant number of untreated patients in established and emerging markets, we and Biogen continue to see potential for further growth.

Product sales of TEGSEDI and WAYLIVRA also continued to grow in the first quarter, more than doubling compared to Q1 2019.

Today, TEGSEDI is commercially available in 12 countries.

In the U.S., over 1,800 physicians are now using Akcea's genetic testing program with a growing number of patients being tested and diagnosed with hATTR.

Many physicians and patients are choosing TEGSEDI due to its subcutaneous at-home administration, which is particularly attractive in the current COVID-19 environment.

Additionally, Akcea's market access efforts have continued to translate into broad TEGSEDI coverage, including long-term coverage secured for 75% of U.S. patients with commercial insurance.

Akcea has made progress expanding TEGSEDI access outside the U.S., including in Southern Europe.

This is important because of the large endemic TTR amyloidosis patient population throughout this region.

Akcea has also made progress in obtaining pricing and reimbursement in additional countries, most recently in Spain and Austria.

In Latin America, PTC Therapeutics is working to secure pricing in Brazil and expand TEGSEDI access in that region.

We anticipate that expansion into new countries will help drive TEGSEDI growth this year.

Now turning to WAYLIVRA.

WAYLIVRA is now on the market in Austria, Germany and in France through the ATU, a reimbursed early access program.

This year, Akcea plans to launch in additional EU countries, and PTC Therapeutics is working towards their goal of filing for marketing authorization in Brazil this year.

Akcea has a strong foundation in place for TEGSEDI and WAYLIVRA, which we believe supports growth as both medicines expand into new markets, and broader access is achieved this year.

We do not rely on a single product or a partner for our revenue.

The fact that we generate revenue from multiple sources is one of our many strengths and one that is particularly valuable during these uncertain times.

In addition to revenue from our 3 commercial medicines, in Q1, we earned $49 million of revenue from numerous partnered medicines as they advance.

We earned more than $25 million in R&D revenue for advancing medicines within our neurological disease franchise, including IONIS-MAPTRx for Alzheimer's disease and several other programs under our Biogen collaboration, and we earned $15 million in R&D revenues from our cardiometabolic franchise.

This included a $10 million milestone payment we earned when Astrazeneca advanced ION532 for the treatment of kidney disease.

As we expected, Q1 R&D revenue was lower than the same period last year given the $150 million we earned from Novartis when they licensed AKCEA-APO(a)-LRx last year.

We expect growth in revenue this year to be driven by continued significant commercial revenue and R&D revenues from numerous programs.

Our first quarter non-GAAP operating expenses increased nearly 20% to $153 million compared to the same period last year.

This increase is driven by our investments in the global launches of TEGSEDI and WAYLIVRA, the Phase III program for AKCEA-TTR-LICA Rx and our Ionis-owned pipeline.

As the year goes on, we also expect to invest in technologies that could broaden the reach of our technology as we did late last year when we made strategic investments in complementary technology.

Our operating expenses in Q1 were lower than the fourth quarter of last year, principally because of these investments.

These types of investments are an important objective for us this year and, as such, are included in our full-year operating expense guidance.

With these results, we ended the first quarter nearing breakeven with a net loss of $15 million on a non-GAAP basis.

Our first quarter results and projections for the rest of this year enable us to reaffirm our 2020 financial guidance, including revenues in excess of $700 million and meaningful profitability.

We project Q2 will be generally in line with Q1 with revenues increasing in Q3 and Q4.

We also expect our non-GAAP operating expenses to increase as the year progresses, in line with our guidance.

Looking ahead to the remainder of 2020, we remain well capitalized with a strong balance sheet and $2.4 billion in cash and investment.

Enabled by our financial strength, we have the resources to execute on our near- and longer-term strategic priorities even in the challenging COVID-19 pandemic environment.

And with that, I'll turn the call over to Richard to provide an update on our pipeline.

Thank you, Beth.

While managing the challenges presented by COVID-19, we have continued to achieve significant advancements across our pipeline of over 40 medicines in development.

As mentioned previously, Roche completed enrollment in the global GENERATION HD1 Phase III study for tominersen, our medicine in development for the treatment of Huntington's disease.

The rapid enrollment in this study reflects the profound commitment of Huntington's disease patients and caregivers to help us find an effective treatment for this devastating disease.

We are especially pleased that Roche recently confirmed that this program remains on track with the potential for data in 2022.

Biogen continued to advance clinical studies with 2 of our medicines addressing 2 genetic forms of ALS; a Phase III study of tofersen in SOD1 ALS, and the Phase II study of IONIS-C9Rx in C9 ALS.

IONIS-C9Rx was recently granted fast-track designation in the U.S. In addition to enabling an expedited regulatory path, fast-track designation underscores the substantial benefit this medicine may deliver to these patients with the most common inherited form of ALS, who have no approved therapeutic options.

We and Biogen have also expanded our ALS franchise to include ION541 for the treatment of patients with sporadic ALS.

On track to enter the clinic later this year, we're particularly excited about this medicine, our first medicine to enter development addressing the vast majority of patients with ALS.

Turning our attention to SPINRAZA.

The body of evidence supporting the durable efficacy and well-established safety profile of SPINRAZA also continues to grow.

The first patient was treated in DEVOTE Phase II/III study with a higher dose of SPINRAZA.

Based on the well-validated safety profile of SPINRAZA, this study has the potential to demonstrate even greater efficacy in SMA patients of all ages.

And new data from an independent study published in Lancet Neurology demonstrated that teen and adult patients treated with SPINRAZA for 14 months achieved clinically meaningful improvements in Hammersmith scores with a continued favorable safety profile.

Also during the first quarter, we and our partners initiated Phase II proof-of-concept studies for 3 medicines addressing a diverse range of neurological and rare diseases, including hereditary angioedema, beta-thalassemia and Centronuclear myopathy.

Additionally, we're particularly excited for the programs in our growing Ionis-owned neurological disease pipeline, including our programs for Alexander, Lafora and prion disease, which continue to move closer to their first clinical trials.

Our cardiometabolic pipeline continues to be a significant area of focus for us, addressing diseases ranging from rare to very large and including both partnered and Ionis-owned medicines.

AKCEA-APO(a)-LRx was granted fast-track designation, underscoring the significant value of this medicine may bring to millions of patients worldwide with established Lp(a)-driven cardiovascular disease with no effective therapeutic options.

Importantly, the Phase III HORIZON cardiovascular outcome study of AKCEA-APO(a)-LRx is progressing with our partner, Novartis.

And as of today, Novartis expects no significant impact from COVID-19 on study time lines.

And earlier this year, we reported positive top line results from Phase II proof-of-concept studies of AKCEA-APOCIII-LRx and vupanorsen.

Both medicines, which are part of our growing and advancing LICA pipeline, achieving their primary endpoint demonstrating robust triglyceride lowering and substantial reductions in additional key cardiovascular risk factors with favorable safety and tolerability profiles.

And this year, we look forward to presenting the full data from these studies at a medical conference or other venue.

We also advanced new medicines into Phase I development addressing very broad cardiometabolic diseases, including ION532, targeting APOL1 for the treatment of kidney disease, and our Ionis-owned LICA medicine, ION224 targeting DGAT2 for the treatment of NASH.

Enrollment is progressing in the Phase III studies of AKCEA-TTR-LRx, neuro T transform in patients with TTR polyneuropathy and cardio T transform in patients with TTR cardiomyopathy.

In response to COVID-19, we briefly paused new patient enrollment in both studies in an effort to protect these patients, which are at high-risk for COVID-19-related complications.

It was also important for us to preserve data integrity at this early stage in the studies.

However, enrollment has resumed in both studies as sites have come back online as local and regional restriction eased.

Importantly, we do not expect this brief pause to significantly impact the time lines of these studies.

COVID-19 presented us with a number of challenges, which we believe we are managing well.

We are continuing to monitor each program and are ready to respond, if needed, as the pandemic evolves.

Our dedicated team has successfully adapted to the current environment, enabling us to continue advancing our pipeline and remain on track to achieve our top 2020 priorities.

We plan to initiate Phase III study of AKCEA-APOCIII-LRx in patients with FCS.

We remain on track to refile the NDA for WAYLIVRA in the U.S. this year.

And we continue to expect clinical proof-of-concept data for at least 4 more programs this year.

And we still are planning to add another 5 or more new medicines to our pipeline.

And with that, I'll turn the call back over to Brett to close this portion of the call.

Thanks, Richard.

Today, Ionis is stronger than ever.

We are reaffirming our 2020 financial guidance, and we remain well capitalized with the strong balance sheet.

Our strength and sustainability are enabling us to continue delivering value to patients and shareholders while effectively managing the challenges presented by the COVID-19 pandemic.

Already this year, we continued to deliver strong performance from our commercial medicines.

We have made significant progress in advancing all of our Phase III programs, all of which remain on track.

Preparations are well underway to initiate another Phase III program this year and to refile WAYLIVRA for approval in the U.S.

We reported positive data from 2 Phase II LICA medicines.

We initiated numerous Phase I and Phase II studies.

And we're on track to move 5 or more new programs into development this year.

None of this will be possible without the dedication, resilience and strength of our employees.

I am incredibly proud of how the Ionis team has responded to overcome the challenges posed by COVID-19.

Because of our employees, we're continuing to execute effectively on our mission to deliver transformational medicines to patients in need.

As we continue to invest in our strategic priorities, including building and advancing the Ionis-owned pipeline and developing our commercial capabilities, we will remain on track to achieve our short- and longer-term strategic goals, including delivering new drug applications for 10 or more of our medicines through 2025.

We have tremendous momentum as we look towards the rest of this year and beyond.

I'm excited about the future that we're creating and look forward to reporting on additional successes throughout this year and beyond.

And with that, I'd like to open the call for Q&A.

(Operator Instructions) The first question today comes from Jim Birchenough of Wells Fargo.

Congrats on all the progress and your work through the COVID-19 situation.

A few questions.

I guess number one, Brett, if we could get maybe updated thoughts on internal commercialization versus the affiliate model and maybe some framework that Onaiza may be working on to establish a commercial model at Ionis.

And then for Richard, just on the CF program, the pulmonary program.

Should we expect data by year-end in CF patients?

And what should we look for there?

And then maybe just one final one for Beth.

Just in terms of R&D revenues, is that something we should consider remaining stable over time?

Or is there any reason to think that could increase or decrease?

Thanks for the questions, Jim.

So I'll take -- as you suggested, I'll take the first one.

I'll start there, but I'll also toss it over to Onaiza to give her perspective who's on the call for Q&A.

So as we stated in our -- just now in our call earlier, we are prioritizing and continuing to build and expand the Ionis-owned pipeline and identifying and characterizing each of the medicines in that pipeline as to the value and the synergies they create when bundled together in various ways.

These are principally focused on rare diseases.

And we're identifying those opportunities in that growing pipeline that will bring the greatest value to Ionis and shareholders.

And we're looking at various options on commercialization strategies this year, and we're hoping to present some of those strategies later this year towards the fall.

With that, Onaiza, please jump in and add to my comments.

Yes, sure.

Jim, how are you?

Thanks for the question.

So we're making just good progress, right, in developing our commercial strategy.

As Brett just said, the Ionis-owned pipeline is large, and we're making continued investments.

We certainly expect it to even grow further in the future.

So it's a rich portfolio.

You can imagine the initial steps in the commercialization work have been on portfolio prioritization.

And we're preparing a high-level strategy, such as laying out how our innovative products deliver on the high unmet need in the market, what our strategic positioning is in identifying where we have customer-facing synergies.

As a result, the Ionis-owned neuro portfolio we talked about last time continues to be a priority, and we remain excited about the mid-stage portfolio as well, which include acromegaly, nontransfusion-dependent beta-thalassemia and hereditary angioedema.

So I really look forward to providing high-level commercial strategy for the Ionis-owned portfolio later this fall, more likely at the Investor Day we currently have planned, and we can get a little bit deeper at that time.

Thanks, Onaiza.

Richard, do you want to talk about our ENaC program a little bit?

Yes.

So the ENaC program is moving forward at a pace that we expect will complete enrollment this summer.

And so we do expect the cystic fibrosis portion of that study to be able to report out later this year.

What should we expect?

This is a relatively short-term exposure of 6 weeks, weekly inhalation of the product.

And we expect safety and some efficacy based on the target engagement.

So that's essentially what we'll know by the end of this.

We have a fully completed Phase I trial in normal volunteers that has shown excellent safety and tolerability, and we'll also be including that in the rollout.

And when we roll that out, Jim, I suspect we'll also be able to talk about additional potential Phase II studies that are in planning phase right now for our ENaC inhibitor.

We're not planning to develop that drug only for CF, but actually, there's quite a few other opportunities in the pulmonary front that we're quite excited about.

Beth, do you want to take Jim's other questions?

Sure, absolutely.

Jim, so as you know, R&D revenues tend to be lumpy, and this year is no exception.

What I would anticipate is that, as I mentioned earlier, that Q2 is likely going to look like Q1 in terms of revenues.

Our revenues from R&D partnerships tend to be more back-end loaded this year.

So I would expect to see revenue growth in Q3 and also in Q4, primarily from our R&D revenues.

And of course, the commercial revenues, I expect to grow quarter-over-quarter for the remainder of this year.

The next question comes from Tyler Van Buren of Piper Sandler.

I guess with respect to the 4 or more proof-of-concept results that we should expect as upcoming catalysts, I know you mentioned some of them, but could you just review at least those 4 for us?

And maybe specifically highlight the 1 or 2 that you are -- readouts that you're most excited about and what you'd need to see in order to achieve proof-of-concept?

Sure.

Happy to, Tyler.

Thanks.

So just to back up a half step, as a reminder, our objective this year was to read out on 6 clinical proof-of-concept studies this year.

We already have 2 in the bag with 2 very successful Phase II outcomes with angiopoietin-like 3 LICA, which is now licensed and partnered with Pfizer, and our APOCIII LICA, which we're planning a Phase III study to initiate later this year in FCS.

We have a number of opportunities for clinical readouts this year.

And we're on track to achieve those 6 clinical readouts this year.

We're expecting to read out on our acromegaly program, growth hormone receptor, which is in patients on SSAs, who are not controlled, looking at endpoints such as IGF-1.

Hereditary angioedema, from our PKK LICA program is also another program that we're expecting to have a readout on later this year.

In addition, we have an exciting program in hypertension.

Angiotensinogen is an exciting program where we have multiple Phase II programs ongoing.

And we're hoping to share some of that data later this year as well.

In addition, there's the potential for some data coming out from our beta-thalassemia program, TMPRSS6, remains to be seen if that will be ready to go this year or not or whether that will go into next year.

But in addition, the ENaC program for pulmonary disease that Richard already mentioned, and of course, we also have the ongoing study in which we're evaluating with AstraZeneca, our program determining whether evaluating an oral formulation for an undisclosed target that is in clinical testing now, which we hope to read out later this year as well and present data with our partner.

So quite a rich set of pipeline updates coming in the second half of this year that we're really excited about, Tyler.

Maybe just a quick follow-up on HAE.

I guess is the goal -- the standard of care injectables that have launched for prevention are achieving pretty high reductions in terms of attack rate.

So do you think you could improve upon that?

Or is the goal to kind of extend treatment duration with the LICA?

So you're absolutely right.

The HAE landscape is quite competitive.

And patients are -- have had received substantial benefit in reduction in attack rates with the current approved medicine.

Our objective is to do as good as that or better with our mechanism of action blocking the kallikrein pathway.

And as you may have seen some of our Phase I data, I mean, we're really having a very -- we have a very potent molecule.

We're having large impact, greater than 90% reductions in prekallikrein levels in hormones.

We think we can beat it potentially.

What we also have going for us is the convenience of a very infrequent low-volume injectable, subcutaneous injectable with the potential, if we crack commercially viable oral bioavailability in the ongoing studies, to move that drug into an oral formulation as well, which would be a significant advantage from a convenience standpoint.

So it is a competitive environment, and we think we're hopeful that we can compete.

The other thing I'll just add to that is we are exploring additional potential indications for our kallikrein inhibitor, and plans are coming together to move on those.

And we're hoping to share some of our thoughts on this later this year, maybe at Investor Day.

The next question comes from Jason Gerberry of Bank of America.

This is [Chi] on for Jason.

I have a couple on the -- for sporadic ALS.

I guess the first one on that, maybe can you talk about how we envision the market opportunity for that will be?

I guess how large is the sporadic population is within the broader ALS umbrella?

Then I have a couple follow-up after that.

Sure, [Chi].

So we're very excited about our ALS program.

As you know, there are multiple causes of ALS, both genetic and sporadic.

Our 2 lead programs are targeting genetic, C9 or -- and -- which is due to read out Phase II data next year, and our Phase III data for tofersen SOD1 ALS, also due to read out next year.

This is our first of several sporadic ALS target drugs that we're planning to bring forward in the not-too-distant future.

This is the first.

It's targeting ataxin-2.

The preclinical data looks very exciting and compelling, and one of our key objectives this year is to get the clinical study started with Biogen.

As you know, the sporadic population represents the majority -- the vast majority of patients with ALS.

I believe that it's somewhere north of 75% patients with ALS are of the sporadic variety.

And ataxin-2, there's no reason to believe that it couldn't, if it performed well, address the majority of that majority, quite simply.

So it's really the majority of patients with ALS that this drug has the potential to treat.

Got it.

I think you kind of bridged into my second question.

My second question was how heterogeneous is the sporadic form?

And it sounds like you are planning to do multiple studies for that population.

Are you experimenting different mechanisms to address all the different mechanisms that could cause the sporadic ALS?

And I think you said that you believe the ataxin-2 can address (inaudible) a little bit?

Are we thinking about maybe like 80%, 90% of it?

If you can sort of quantify, that'll be great.

It's hard to say how much of the sporadic population ataxin-2 would address.

Our hope -- and there's no reason to believe that we couldn't target the vast majority of that sporadic population, as I mentioned.

We have a very exciting research program with Biogen, in which we're evaluating multiple mechanisms, multiple targets in animal models for ALS, sporadic ALS.

Maybe, Eric, you could add a little more color on the alternative types of mechanisms we're addressing and how we're going about doing this.

Yes.

I mean, so as Brett mentioned for the ataxin compound, I mean, I think we really have to figure that out in clinical trials and find out exactly which patient populations respond the best, but the preclinical work, which has been published, by the way, is very exciting and very strong.

And as Brett mentioned, we have a very broad program with Biogen looking at all forms of ALS, genetic, familial, sporadic and all mechanisms that could potentially contribute to the pathogenesis of the disease.

And so we're looking at all sorts of different pathways and trying to figure out which drugs or the combination of drugs are best for moving forward to treat the condition.

So it's a very broad, deep program.

And I'm certainly optimistic we'll have lots more programs going forward.

Got it.

Maybe just one final follow-up from me.

I believe the plan is to advance [105] in to clinic this year.

Can you talk about when we could possibly expect data on that?

You're referring to the sporadic?

I missed the beginning.

Yes.

In sporadic program, yes.

Okay.

Well, just starting this year or so, I wouldn't expect data until next year at the earliest, yes.

The next question comes from Chad Messer of Needham & Company.

And it's certainly glad to hear the team at Ionis is managing things so well through this pandemic.

Like to maybe start with WAYLIVRA and the refiling.

Can you sort of walk us through the steps that are left?

Is it really data collection?

Or are there any regulatory interactions that need to occur?

Thanks, Chad.

So we're very excited about refiling WAYLIVRA for the U.S. for potential approval for FCS.

We've been with Akcea, collecting a substantial amount of additional data since the original CRL that we received on WAYLIVRA in the U.S., and we have our confidence that, for an approval for WAYLIVRA in the U.S., has grown as we continue to collect and evaluate that data.

Our confidence grew even more based on our meetings with the FDA to talk about a refiling for WAYLIVRA.

We feel good about the discussions we've had with them.

And those discussions have been very supportive and productive.

So we're excited.

What we're doing now is putting the data, packaging it up.

And we're getting ready to refile later this year.

Richard, do you want to add anything to that?

Only to affirm, we have no more regulatory interactions.

We've matched with our preresubmission meeting and then encouraged to resubmit that the data is there.

And so we're just putting that package together.

Okay.

Great.

And then just on the APOCIII LICA, the upcoming FCS study, is that pretty much should we assume going to look like APPROACH?

Or were there some lessons learned from having gone through all of this before?

Certainly, we have so much experience in FCS, Chad, as you know, from our WAYLIVRA experience.

And we will use all of that information to build on our Phase III study design for APOCIII LICA.

Richard?

So a couple of things.

As we were moving through the development of WAYLIVRA, Akcea has been hard at work developing a patient reported outcome, which will be included in this study that was not included in the first study.

So that's one difference.

There will also be a real focus on, prospectively, on the pancreatitis and will enrich for patients for those who have ongoing and consistent pancreatitis.

So that will -- another piece that is a bit different.

Otherwise, it will look a lot like the APPROACH trial.

Okay.

That's helpful.

And then maybe just one on SPINRAZA on the DEVOTE study.

I don't know how much of this you can share.

But maybe talk us through what kind of efficacy delta we could potentially expect there?

I mean, it seems like the efficacy that we already have in SPINRAZA maybe hard to convincingly beat in a trial unless it was a really large one?

Yes.

We're -- you're absolutely right, Chad.

The efficacy that SPINRAZA has demonstrated in all forms of SMA, that's a very high bar, not only for our DEVOTE study but also for all our competitors.

But there -- but we do believe that, going to higher doses, as does Biogen, has the potential to show even greater efficacy.

I mean, as an example, in between maintenance dosing, sometimes patients will start to feel some symptoms start returning towards the end of the maintenance dose.

That's just one example.

The patients that we get to later in their disease.

We have the potential for -- later, they have more -- their disease has progressed before they've gone on SPINRAZA, and we have the potential to show even greater efficacy in those patients, for example.

And then there's others, and there's other ways to show greater efficacy.

So based on the pristine safety that SPINRAZA has demonstrated, we have the luxury of going to significantly, substantially higher dose in our DEVOTE study.

And that study, as you know, is underway.

So it does have a high bar of efficacy, and we do -- but we do believe that there's the opportunity to show even greater efficacy.

And I'll just add also to if I can expand on your question, Chad, we're also working, making great progress with Biogen on a follow-on drug, a potential follow-on drug for SMA, follow-on to SPINRAZA based on a new chemical entity that we think our objective is, and we're feeling pretty good that we'll be able to get to biannual dosing or maybe even annual dosing with an intrathecal administered medicine.

So we're defending the SMA franchise, Ionis and Biogen, and we're excited about not only SPINRAZA but the higher idose as well as follow-on guys.

The next question comes from Esther Rajavelu of Oppenheimer.

Can you maybe give us some color on your partner programs that may be experiencing COVID-19-related delays, the magnitude of that as you think about the first half of the year versus the second half?

And then I have another quick follow-up.

As we are -- as we've stated with respect to the clinical programs we're running, which we had a minimal impact on the progress we're making on our clinical trials, similar story for buyer partners, where we are -- have always been and remain in close contact with our partners and have been meeting with them even more frequently once this crisis occurred.

And we're not seeing substantial impacts on any of our pipeline -- or partner pipeline programs to-date and certainly nothing of meaning.

And as Richard mentioned earlier, the Phase III programs, Lp(a) with Novartis and the cardiovascular outcome trial, SOD1 Phase III program with Biogen in the Huntington program are all on track to read out on time.

So our partners are managing the situation quite well.

Awesome.

And then you're in an -- you've always been in an enviable cash position recently.

And do you have any updated thoughts on capital deployment in this current environment?

Yes, sure.

I'll comment on that, and I'll ask Beth to make some comments, too.

So we are in a very envious position.

We're very proud of the strong financial position we're in.

And we will continue to invest in all of the area's priorities that we planned on investing in last year and as we talked about early this year.

That includes investing in our pipeline and investing in our later-stage pipeline, the Ionis-owned later-stage pipeline, such as the Phase III program for APOCIII LICA and, of course, the TTR LICA Phase III studies, and our mid-stage pipeline as well.

We're also investing in building of commercial capabilities and identifying various options for maximizing commercial value of the medicines we bring to the finish line through Phase III as Onaiza touched on earlier during this Q&A.

And we continue to invest as we did earlier this year, and we plan to continue to do so in new technologies, technologies that complement what we're doing in antisense to continue to ensure that our leadership position in RNA therapeutics, not only is maintained but is extended, genomics collaborations to continue to populate the pipeline with novel genetically linked targets for drug discovery, LICA chemistries, new LICA chemistries that we're collaborating with a new partner there, and we continue to look for other collaborations as well, and brand-new technologies that we continue to survey and pursue and look at to potentially diversify our platform into new areas.

Sorry . More specifically, maybe if you could comment -- can you hear me?

Yes, I can Esther.

Sorry, I was (inaudible).

No worries.

And just more specifically, maybe on if you can comment on share repurchases and what your thinking is for the remainder of the year?

Esther, it's Beth.

So as we think about our cash position, I think Brett did a really nice job of outlining our priorities.

They're very clear.

We're very clear internally about where we're going to invest our capital.

When we think about share repurchases, our view at this point is particularly given the uncertainty of the current environment that holding on to our cash and having it available for some of these other opportunities that Brett was describing is really a better use of cash today.

So we don't have any specific plans.

But that being said, we'll certainly keep it always in mind.

Our next question comes from Ellie Merle of Cantor Fitzgerald.

Just in terms of the oral program, I know you mentioned that you're still hoping to get data in 2020.

Could you give us a little bit more color just in terms of kind of what drives this, if it's completed enrolling, or if it's still enrolling and close to completion?

And then in terms of the specific data that we could expect to get in terms of the oral, I guess, what -- have you and AstraZeneca worked out in terms of what you'd actually disclose if this data comes out in 2020, if we would see sort of levels of protein reduction, things like that in terms of what we should look for in the release?

Sure, Ellie.

So we're working very closely with AZ on a number of programs in the cardiometabolic space and including this one.

Our -- what we're looking to do is to complete a phase of the study that we think will provide ample proof of concept, quite simply.

And -- so that we can make some calls on whether or not we think that we're well along our way in achieving commercial -- commercially viable oral delivery.

What you would expect -- what form that would come in would be, of course, bioavailability PK that is predictably based on preclinical data as well as biomarker data, so impact on our biomarkers that are reflective of target engagement.

But also, we have a parallel program that's ongoing to oral with the same drug but it's administered subcutaneously.

And we'll also have data from that study, we hope, to compare side-by-side with the oral program.

So it'll actually tell us a great deal about how the oral was stacking up and will stack up with the continued development with the subcutaneous formulation.

The main -- one of the breakthroughs -- there were a number, but one of the breakthroughs that really allowed us to get oral, we think, to where it is now for testing and potentially achieving commercially viable oral availability is potency.

These are Gen 2.5 LICA molecules and that are stable in the gut, and remain intact upon absorption in the gut.

And it's the potency that really allows us to get the bioavailability that we think we need.

And our subcu data would be very important to show that what we've seen and predicted preclinically will translate to that level of potency in humans.

So both programs that I think will be very important.

Got it.

And then just in terms of thinking about COVID impact on the TTR LICA Phase III program, I guess, if you could characterize sort of how enrollment is going in each of those Phase IIIs and how COVID is potentially impacting the enrollment time lines and just sort of your latest expectations for when you could complete enrollment in these studies?

And I know it's a competitive environment.

So curious sort of the latest on what you're seeing with the time lines there.

So as Richard mentioned earlier, we did -- so the enrollment is ongoing and the programs are going well, both the T transform cardiomyopathy -- the cardiomyopathy study and the neuropathy study are both going well, and they're on track.

We did close those studies very briefly.

And we did that based on requests by our sites that were activated and up and running because they had to assess their own situation.

They were being overloaded in their hospitals and their sites, and they didn't know what to expect from COVID patients that they're having to manage.

So we obviously appreciated their -- those challenges, and we're -- we closed the enrollment briefly until they assessed the situation, and then they told us that they're ready to go and reactivated, and we're enrolling again.

We don't expect significant impact on the time lines for either study going forward.

We did implement a number of mitigation strategies as this developed to catch up.

And we're doing -- and we did quite a bit remotely while -- during this brief pause.

So we're not expecting significant impact on time lines.

The next question comes from I-Eh Jen of Laidlaw & Company.

And impressed by your situation under the COVID-19.

Just 2 quick ones.

The first one is Ionis -- ION224, the DGAT2 program in NASH.

Do you guys have any -- I know most of the DGAT2 was in earlier stage development.

But what do you feel that some of the strength you might have comparing to other programs in development?

And then I have a follow-up.

Sure.

Yale, thanks.

So one of the advantages we have is building on the really impressive Phase II data that was -- that we generated in patients with NAFLD liver disease with the non-LICA drug, which we had high statistical significance and reductions in liver fat with excellent safety and tolerability.

That triggered us to go back and identify and bring on -- bring forward the LICA version of that to allow us to go to even lower doses, less-frequent dosing administration.

From a target standpoint, the advantage we have, I think, are multiple.

There are multiple aspects to that.

One is the fact that DGAT2 is the rate-limiting enzyme in the triglyceride synthesis pathway in the liver.

We've demonstrated that.

We've actually examined -- we've actually looked at all the targets in the triglycerides, in this pathway and have concluded that our DGAT2 was the most appropriate sensitive target for managing liver fat.

The second advantage we have is specificity.

As you know, small molecules have difficulty in specificity against isoforms, such as DGAT1.

You do not want to inhibit DGAT1.

Otherwise, you get into some side effects that we've published on actually.

DGAT2, our inhibitor is very specific.

And we think that it will measure up very well against competition for other agents that are targeting triglyceride pathways in November.

Okay.

Great.

That's very helpful.

Maybe the next question really is a follow-up to very first question really is that your guys going to assess a lot of your rare disease pipeline in terms of your sort of commercialization or pathway to go, and as well as that yesterday in Akcea's conference call, they were also probably anticipate or expecting some of these programs may be moving to their pipeline.

So overall, how would you guys think about what to maintain on your own?

What you may be moved to other party -- Akcea for their development as a general principle or thought?

So we're having very productive discussions with Akcea on a potential asset to move into Akcea, and their objective is this year.

They, of course, have a very full agenda this year, too, with TEGSEDI, WAYLIVRA, the APOCIII LICA Phase III study and the refiling of WAYLIVRA in the U.S. So -- but our discussions have been very productive, and we have little -- we're down to a few potential rare disease programs from the Ionis-owned pipeline.

And I think you'll hear more about that later this year from Akcea and Ionis.

Certainly one area of priority for us at Ionis is our rare neurological disease pipeline.

It's a pipeline that we're very excited about, prion, Alexanders, Lafora, as Richard mentioned earlier, more coming and expanding.

And that's certainly a high priority for Ionis to prioritize for -- at least, some of those for ourselves.

So I think you'll be hearing more about that later this year as well and including at our Investor Day.

And again congrats on the progress.

Thanks, Yale.

Next question comes from Paul Matteis of Stifel.

This is Alex on for Paul.

Just a couple questions from us.

I guess the first one kind of related to this whole -- the way that you're thinking about partnerships, just curious how you're thinking about your AGT program given it is another large-market indication?

What are your thoughts as they stand today on continuing development on your own or are looking for partners moving forward?

And then secondarily, I was hoping you could give us a little bit more background on your APOL1 program with AstraZeneca?

Sure.

Happy to.

So Alex, our strategy on partnering for large broad indications remains the same, except that is -- we're not going to be taking on very large Phase III studies of the type that an antihypertensive would entail.

Similarly as we've done for Lp(a), we'll seek a partner at the appropriate time.

With that said, we're in no rush.

We're in no hurry.

We have the financial strength to be able to bring these large indications through clinical proof of concept.

And as far as we need to take them to maximize the economics that comes to Ionis for any such partnering in the future.

And so we're in no hurry to partner in this program.

We're excited about what we're seeing, and we're looking forward to sharing some of the results of these studies later this year.

And what was the second one?

APOL1.

APOL1,thank you.

Yes, APOL1 is very exciting.

It's a program that we initiated at Ionis a number of years ago.

It's a target that is -- it's a genetic link to kidney disease, FSGS and other kidney diseases.

We did enter into our cardiometabolic collaboration after we did a lot of work here at Ionis on this target.

We published on this target, I forget where, but we published on it about a year or so ago, some very exciting data models APOL1 in the kidney disease that we develop.

That trial is in humans now and is in clinical testing.

So we're hoping that AZ will have more to say about that program later this year or early next year.

They certainly highlighted it in their own earnings calls.

So they're excited about it.

Next question comes from Jessica Fye of JPMorgan.

Question is on the acromegaly program heading into that proof-of-concept data later this year.

How do you expect that product will differentiate from competitors, namely the SSAs, either from a mechanistic perspective or the target patient population?

Richard, would you like to take that one?

Sure.

I'd be happy to.

So the program, the proof-of-concept study is in patients who are uncontrolled IGF-1 on the somatostatin analogs, and so quite a number it turns out as much as 40%, 50% of these patients don't get full control on their current therapies.

So I think what you'll want to see is IGF-1 control with the addition of our acromegaly GHR LICA program, also a much improved tolerability profile for this compound, and we are also initiating monotherapy studies in this -- in patients who are not on SSRLs or are weaned off and come on to this program.

So the program is staggered a bit with the monotherapy coming after the add on.

But we're excited about what we're seeing, and we hope to have some real data in the second half of the year.

Yes.

Just -- this is Onaiza.

I was -- that was great, and I would just say that we've done some initial work on kind of the product profile.

And early on, in addition to the IGF-1 control, we're also seeing there's an unmet need on just break-through symptoms.

And we believe, like with our product, we can actually offer both, and along with the monthly dosing, that is turning out to be quite a differentiating profile.

Anything else, Jess?

That's it.

The next question comes from Mani Foroohar of SVB Leerink.

This is Rick on the call for Mani.

So first, I just wanted to touch on the oral ASO candidate again.

Is the timing of that first clinical data disclosure going to be controlled by AstraZeneca?

Or is that a joint decision between the 2 companies?

And secondly, a broader question about the opportunity for oral ASOs.

So how do you think of an ideal therapeutic indication or end markets for oral ASOs?

And how does this compare to the way you think about targets for your conventionally administered drug?

So the decision on the timing to talk about the program is joint, Ionis and AstraZeneca.

We work very closely together on this program and our other cardiometabolic programs.

As for the potential to exploit -- take advantage of progress we're making in oral for our other programs, we're already moving other programs forward.

Programs that are nonpartnered, that have Gen 2.5 LICA chemistry, or we're identifying Gen 2.5 LICAs for existing programs as potential follow-ons.

And the focus really is on areas where oral would provide a significant either competitive advantage or convenience advantage for patients, your chronic [long] diseases where patients are going to be on therapy for long periods of time.

Diseases where it could be a severe disease but patients are generally asymptomatic until they have an event of some sort.

We'll be particularly well suited for an orally administered agent.

And in areas where we're competing with some -- with other technologies or other medicines where we think oral can even provide a competitive advantage.

Next question is from Ritu Baral of Cowen.

I wanted to just follow up on the Roche content and data release.

But I think you mentioned that they have [set] Phase III data in 2022.

But I'm wondering about any interim data we could get in the meantime, whether it's an interim look in the Phase III or the Phase I/II open-label extension data.

Any time lines for that?

And then I've got a follow-up.

So Roche has not indicated in any way that there would be an interim look at the Phase III data before the Phase III data reads out, which is expected in 2022.

Next year, they are planning to share the open-label extension data from our Phase I/II study, which is that open-label extension study is completed, and they're evaluating the data.

Now along with the natural history study, which has not completed yet, which will complete this year or early next year, and then they'll share that data alongside the OLE data next year.

So that's what to expect for next year.

Got it.

And then can you go into maybe a little more detail about the DNM2 program for centronuclear myopathy?

You indicated the Phase I/II started.

Can you give us the trial design and the time lines for that data and maybe just how you look at the indication?

So this is with our partner, Dynacure.

Dynamin 2 is the target.

And it's for the treatment of all forms of centronuclear myopathies.

They published with us joint publications, some very exciting preclinical data, models of CNM.

This is a muscle target.

And based on that data, we would launch into clinical development.

The study design is in older patients with CNM.

And these patients have had a long history, natural history, where we have a substantial amount of natural history data for each of these patients that are entering into the study.

So there's a lot of information to build off from that study.

And it's open label.

So all patients are getting the drug.

The end goal is to move into infants next year, which is the more severe form of CNM.

Is there a particular biomarker or functional marker in these older patients that the next Phase I/II analysis will pay attention to it?

So these will be measures of mobility and quality of life.

Dynamin 2 is not measurable in the blood.

But other biomarkers are under development by Dynacure.

The last question today comes from Josh Schimmer of Evercore ISI.

Just on Akcea, the commercial performance has been below expectations, and it's still a drag on your ability to achieve profitability.

Do you think that's going to change meaningfully over the next 12 months?

How are you thinking about mitigating the burn and then deciding if and when more aggressive steps should be taken for that part of the business?

Thanks, Josh.

I'll ask Beth to address that question.

Sure.

Josh, so as Akcea mentioned on the earnings call yesterday and we reiterated, we see continued growth for both TEGSEDI and WAYLIVRA as they expand into new markets throughout Europe as well as in Latin America with PTC.

It's -- as you know, it's really quite customary to invest ahead of revenue growth when you're launching new products and expanding into new markets.

And that's what we're seeing right now.

We are continuing to be sustainably profitable.

We have a stated goal to be sustainably profitable, and we've been able to do that the last several years, and we affirmed our guidance again this year to be meaningfully profitable.

And so we are obviously committed to that.

And we're also committed to working with Akcea and their new management team with Damien and Kyle Jenne, their new Chief Commercial Officers, to build the TEGSEDI and WAYLIVRA franchises.

Thanks, Josh.

Thanks, Beth.

Okay, with that, I think we'll wrap it up.

Thanks, everybody, again, for joining us today.

We're feeling really good where we are at Ionis.

We're confident.

We're taking the necessary steps to ensure continued success this year.

We have the financial strength to continue pursuing our short- and long-term strategic priorities.

And we look forward to updating you on our progress as the year unfolds.

So take care, everybody, and we'll talk soon.

Bye now.

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