Ionis Pharmaceuticals Inc (IONS) 2022 Q1 法說會逐字稿

Good morning, and welcome to the Ionis Pharmaceuticals First Quarter 2022 Financial Results Conference Call. As a reminder, this call is being recorded.

At this time, I would like to turn the call over to Ms. Julie Tepper, Investor Relations, to lead off the call. Please begin, ma'am.

Thank you, Chuck. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to view the press release and related financial tables we will be discussing today, including a reconciliation of GAAP to non-GAAP financials. We believe non-GAAP financial results better represent the economics of our business and how we manage our business. We have also posted slides on our website that accompany today's call.

With me this morning are Brett Monia, Chief Executive Officer; Beth Hougen, Chief Financial Officer; and Eugene Schneider, Chief Clinical Development Officer. And joining us for the Q&A portion of the call are Eric Swayze, Executive Vice President of Research; and Onaiza Cadoret, Chief Product Strategy and Operations Officer.

I would like to draw your attention to Slide 3, which contains our forward-looking statements. During this call, we will be making forward-looking language statements that 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 contained in our SEC filings for additional detail.

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

Thanks, Julie. Good morning, everyone, and thanks for joining us on today's call.

This year, we are already off to a very strong start. We continue making excellent progress in building our commercial organization, advancing and expanding our technology and moving towards delivering an abundance of new medicines to the market. This includes the great progress we're making with our near-term commercial opportunities, eplontersen, olezarsen and donidalorsen.

The Phase III NEURO-TTRansform study of eplontersen in patients with TTR polyneuropathy remains on track for data midyear. Working hand in hand with AstraZeneca, we're preparing to file for regulatory approval by the end of the year, assuming positive data. At the same time, we're also strongly advancing our go-to-market preparations. We recently achieved our original enrollment goal in our CARDIO-TTRansform study for patients with ATTR cardiomyopathy. And last week, we announced that we took a bold step by increasing the size and duration of our study. And in doing so, we expect to generate even more robust data, better positioning us to successfully compete in this dynamic market estimated to grow to well in excess of $10 billion.

Based on these updates and our current brisk enrollment rate, we expect a modest shift in our time line with data readout shifting from late 2024 to the first half of 2025. We also continue to advance our olezarsen Phase III program in patients with high triglycerides. The BALANCE study of patients with familial chylomicronemia syndrome or FCS remains on track for data next year.

And the CORE study in patients with severe hypertriglyceridemia, SHTG, continues to progress with data expected in 2024. Severely elevated triglycerides is a key independent cardiovascular disease risk factor for which current standard of care therapies are ineffective. With over 3 million patients in the U.S. with severe hypertriglyceridemia and our first-mover advantage, we believe olezarsen represents a blockbuster opportunity for Ionis.

Our Phase III OASIS-HAE study with donidalorsen in patients with hereditary angioedema also continue to progress well with data expected in 2024. We believe donidalorsen has the potential to be a best-in-class prophylactic treatment for HAE patients. And as a result, donidalorsen represents a significant opportunity for us given the significant unmet medical need of these patients in this growing billion-dollar-plus market.

We also made excellent progress across our rich mid-stage pipeline. AstraZeneca presented positive Phase IIb data in ACC in April from the ETESIAN study of ION449, our PCSK9 medicine in patients who are at high risk for cardiovascular disease with hypercholesterolemia. The study met its primary and secondary endpoints, showed good safety and tolerability and ION449 demonstrated a potential best-in-class profile. With more than 10 million patients in the U.S. who remain above their LDL-C goal despite maximum statin and ezetimibe therapy, we believe ION449 could be a significant opportunity for us.

Additionally, we reached full enrollment in the Phase IIb study of IONIS-AGT-LRx in patients with treatment-resistant hypertension with data expected in the second half of this year. We're also evaluating IONIS-AGT-LRx in a Phase II study in patients with chronic heart failure with reduced ejection fraction. These indications combined represent over 15 million patients in the U.S. alone. Despite advances in therapies, a significant need remains for more effective treatments to address treatment-resistant hypertension and heart failure.

Looking ahead, we expect numerous additional catalysts highlighted by the Phase III eplontersen data readout midyear and our planned regulatory filing by year-end. We also expect 3 more Phase IIb data readout, several key study initiations and updates on important technology advancements.

And with that, I'll turn the call over to Beth to review our first quarter financial results. And Eugene will discuss our recent key pipeline updates and preview upcoming catalysts through the rest of the year. After Eugene, I'll wrap up our prepared remarks before taking your questions. Now over to Beth.

Thank you, Brett.

Our first quarter financial results clearly demonstrate a key element of our financial strength. That is our ability to consistently generate substantial revenue and cash from numerous diverse sources. Our revenues increased more than 25% year-over-year to more than $140 million and were split approximately 50-50 between commercial and R&D revenues.

Our operating expenses and net loss, both on a non-GAAP basis, were in line with our expectations. And we ended March with a healthy balance sheet, including cash and investments of $2.1 billion. These results keep us on track to meet our 2022 financial guidance.

We earned $72 million in the first quarter in revenue from our marketed products with the majority coming from Spinraza. Spinraza's global sales were $473 million, increasing more than 7% compared to last quarter. As a result, we earned $54 million in royalty revenue. Just as a reminder, our royalty rate resets at the beginning of each year. And as in prior years, we expect to quickly move through the royalty tiers and reach the highest tier by midyear.

Spinraza revenue increased in both the U.S. and ex U.S. in the first quarter compared to the fourth quarter last year. In the U.S., new patient starts for Spinraza reached a 2-year high while discontinuations continue to decrease. Outside the U.S., the increase in Spinraza revenue was driven by strong initial uptake in China.

Biogen recently presented updates from the ASCEND and RESPOND study in patients previously treated with competitive products. Biogen also presented new results from the NURTURE presymptomatic study, which continued to show that patients receiving early and sustained Spinraza treatment achieved and maintained motor milestones consistent with normal development. Based on these results and Spinraza's attractive profile, we continue to see a bright future for Spinraza.

We earned R&D revenue of $70 million, which more than doubled compared to the same quarter last year. We earned R&D revenue from several different partners for advancing 15 programs and revenue from our strategic collaboration with Biogen was the largest contributor. We earned $40 million in the first quarter from Biogen for advancing numerous neurological programs. Our R&D revenue also included $20 million in cost-sharing payments from AstraZeneca for their 55% of eplontersen's first quarter development costs.

We reported non-GAAP operating expenses of $173 million, which was a 9% increase compared with the same period last year. R&D expenses increased by more than 25%, driven in large part by the 6 Phase III studies we are currently conducting. Our R&D expenses also included increased spending for CMC and medical affairs activities to support our near-term commercial opportunity.

SG&A expenses decreased year-over-year by about 40%. This was largely due to the substantial savings from the Akcea integration and Sobi transaction. These savings were offset in part by the investments we are making in our go-to-market preparation for eplontersen, olezarsen and donidalorsen.

Looking forward, we expect our revenues in Q2 to be similar to Q1, and we also anticipate that second half revenues will be more weighted toward the back end of the year. We project operating expenses to increase in Q2 and over the course of this year. Consistent with our guidance, we expect R&D expenses to increase between 25% and 30% this year compared to last year as our Phase III studies continue to progress.

We project our SG&A expenses to be in line with last year, even while we increase our investment in preparing to bring eplontersen, olezarsen and donidalorsen to the market. With $2.1 billion in cash and investments at the end of March, combined with our ability to generate substantial revenue from many diverse sources, we have the financial strength to underwrite the investments we are making to drive significant future growth.

And with that, I turn the call over to Eugene.

Thank you, Beth.

I'm pleased to report on the continued pipeline progress we made during the first quarter. Our Phase III programs are progressing well. Most advanced was eplontersen with data from the Phase III NEURO-TTRansform study expected midyear. And as Brett said, we're preparing to file for regulatory approval in the second half of this year, assuming positive data. Additionally, we're looking forward to presenting baseline characteristics from the NEURO-TTRansform study at the Peripheral Nerve Society Congress later this month.

Last week, we announced that we achieved our original enrollment goal that we had on eplontersen Phase III CARDIO-TTRansform study. We also announced an important amendment to our study. The amendment included expanding enrollment to approximately 1,000 patients from 750 patients and extending the blinded dosing period to 140 weeks from 120. The CARDIO-TTRansform study is the largest study in patients with ATTR cardiomyopathy. It was designed to generate clinical evidence of eplontersen's benefit when administered alone or in combination with stabilizers. This should enable physicians and payers to make the most important decisions. By increasing the size and duration of the study, our aim is to ensure a highly positive study outcome and to generate an even more robust data in a broad patient population to successfully compete in this growing and dynamic market.

The timing is right to implement these changes now because enrollment is occurring at a very high rate. We have accumulated substantial amount of baseline demographic and clinical data, and our first patients are nearing entry into the open-label extension. Based on our current rate of enrollment, together with the updates to the study that I just outlined, we're projecting a modest shift in our time line with data readout moving from late 2024 to first half of 2025.

Our broad olezarsen development program also continues to advance and remains the leading program targeting APOCIII currently in clinical development. We designed the olezarsen development program to fully realize the potential of this medicine, including moving it towards the market in 2 indications, FCS and severe hypertriglyceridemia. We have 2 ongoing Phase III studies, the BALANCE FCS study, which is on track for data next year and the CORE SHTG study with data planned for 2024. In Phase II, we demonstrated robust reductions in triglycerides and APOCIII with monthly 50-milligram dose. And our 2 Phase III studies, in addition to evaluating 50-milligram monthly dose, are also assessing an 80-milligram monthly dose, which we expect to result in even greater triglyceride reductions.

The donidalorsen Phase III OASIS-HAE study is also progressing and remains on track for data in 2024. Earlier this year, we reported additional data from the donidalorsen Phase II study demonstrating clinically meaningful and sustained improvements in quality of life in patients with HAE. Coming out later this year, we plan to report data from the ongoing Phase II open-label extension study, including data from the monthly and bimonthly dose groups.

In June, Biogen plans to present new integrated tofersen data on VALOR and the ongoing OLE in patients with SOD1-ALS who were treated for up to 1 year. Additionally, Biogen remains engaged with regulators to identify potential path forward focus.

We also have a rich mid-stage pipeline that we expect to continue to deliver. Here are some of the recent highlights. We're pleased with the positive Phase IIb data on the ETESIAN study for ION449, our PCSK9 LICA medicine, in patients who are at high risk of cardiovascular disease with hypercholesterolemia. The study met its primary and secondary endpoints. ION449 demonstrated dose-dependent reductions in mean LDL cholesterol levels by up to 79% and PCSK9 levels by up to 94%. The positive results from the ETESIAN study give us confidence that ION449 could change the current standard of care for patients affected by hypercholesterolemia who have cardiovascular disease.

Additionally, the SOLANO Phase IIb study of ION449 designed to confirm potential Phase III dose is ongoing. We believe that AstraZeneca will make a decision on further development later this year based on the ETESIAN and SOLANO study results.

We also recently completed enrollment in our Phase IIb study of IONIS-AGT-LRx, our medicine to treat patients with treatment-resistant hypertension, keeping us on track for data in the second half of this year. We're also advancing IONIS-AGT-LRx in a Phase II study in patients with chronic heart failure with reduced ejection fraction, which we expect to read out next year.

In addition to the programs I already mentioned, we expect several more data readouts this year, including GSK to report data from the Phase IIb study in our hepatitis B drug and Bayer to report data from our Phase IIb study of fesomersen, our Factor XI LICA medicine, in patients with end-stage renal disease.

As I just summarized, we have a number of important mid and late-stage programs progressing. As the year unfolds, we're looking forward to a steady cadence of data readouts.

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

Thanks, Eugene.

We're off to an excellent start this year. We continue to execute on our 3 strategic priorities that I believe will drive substantial growth for Ionis. Building the Ionis commercial pipeline, including rapidly advancing our 3 near-term commercial opportunities, eplontersen, olezarsen and donidalorsen, toward the market and making great progress in building out our commercial organization for these important medicines. We're also continuing to build on the substantial progress we made last year in expanding and diversifying our technology, including advancing our follow-on medicine of Spinraza that we announced earlier this year as well as making other important technology advancements. We look forward to sharing further details on these advancements later this year.

And our third strategic priority, delivering an abundance of new medicines to the market in the near term and the longer term, starting with our planned launch of eplontersen for patients with TTR polyneuropathy as early as late next year. Additionally, we're well capitalized with the resources we need to continue executing on all our priorities. With up to 7 key data readouts expected from our mid and late-stage pipeline before year-end, the remainder of 2022 looks to be highly productive and eventful.

And with that, I'll now open up the call for questions. Operator?

(Operator Instructions) And the first question will come from Yanan Zhu with Wells Fargo.

Congrats on the progress in the quarter. So I hope you could elaborate a little bit more on the protocol change to the CARDIO-TTRansform study, putting things into context a little bit more for us. I think you probably have been monitoring the cardiovascular event rate. And you probably also are looking at the patient, overall patient mix in terms of disease severity, tafamidis use and all that. So what have the observation been during those monitoring and how does that lead to the decision to expand the study? And also lastly, just curious, have you also looked at the 6-minute walk data? And how does that compare with some of the data that we have seen from other companies?

Thanks, Yanan, for the question, appreciate it. And I'll address it and then ask Eugene to expand on it. So as we've been saying for quite some time now, we have been, right from the onset of this study, from the get-go, monitoring the enrollment and the demographics for this study. Demographics that relate to, for example, the severity of how sick patients are, New York Heart Class Association 1, 2, 3, for example. How much tafamidis usage is in the study versus naive patients, the balance between hereditary and wild-type patients. Those are the primary things that we're looking at.

And all along, we were projecting that we would possibly make adjustments to the study to ensure that the study readout was as successful as possible in a really big market and a growingly competitive market. And that's exactly what we did. There were no fire alarms that went off or anything like that. We're doing something and pulling the trigger on something that we were planning to potentially do all along. It's really less about event rate. It's relatively early on in the study, Yanan. Those events really start accumulating in the second half of a cardiovascular outcome trial.

Sure. We're looking at events. But it's really driven by the demographics and the patient population that we want to have in our study that really ensures we're successful, a highly successful outcome. We're not looking at 6-minute walk test. That has nothing to do with this decision. This is all about making sure we have the right patients in this study.

And then the last thing I'll say before I pass to Eugene if he has anything he might expand on is the fact that this is the right time to do that in this study. This is the perfect time. We're early on in the study. We are well positioned to be able to make that decision without having a significant, really a significant impact on the study timing. It's a modest delay and the expense and the investments are small. You measure that up against the upside that this provides in allowing us to have a very positive outcome is very, very important, very significant. Enrollment is going very fast. We're starting strong. So this is the right time to do in this study. There's no point making that adjustment like this late. This is the time to do it and it's all for good reasons. Eugene, anything to add to that?

No. That's really, really well characterized. I would only also add that this change also gives us, maximizes our ability to look at important subgroups within the study, which is also going to be critical for informing practice patterns and providing a meaningful data set for stakeholders when the study reads out.

That's super helpful. If I may ask about the midyear eplontersen polyneuropathy data readout, would you be able to share any color on what stage are you currently in, in terms of locking the database, data analysis and all that? And any additional color around what time could we see, potentially see the data?

Yes. So as we've been saying, Yanan, and we're right on track to achieve, we've been saying midyear this year we're expecting the top line data from the eplontersen polyneuropathy Phase III study. And we're really not providing much more color than that. What I can add to that is that in parallel with the study coming through completion, we're preparing for the filing, regulatory filing, as we said in our prepared remarks. And we're also planning for the launch. And maybe I could ask Onaiza maybe to provide some color on the preparations we're doing on preparing for the launch with our partner, AstraZeneca.

Yes, sure. Yanan, launch preparation, it takes a lot of effort across a lot of team members. And I'm pleased to say the teams just had actually a pretty robust launch readiness meeting last week with AstraZeneca out in their offices in the East Coast, and we had really everybody from clinical to CMC and obviously, the marketing teams as well as the customer-facing teams and medical affairs to kind of think through the overall launch preparedness. They are in great shape. It's a collaboration that is really building on each other's strengths. Our knowledge of amyloidosis and being in the market for about a decade and rare disease along with kind of the broad reach and expertise is really great complementary collaboration made in heaven, I would say. So we're in really good shape and I would say well ahead of the curve for getting this product launched next year, assuming everything all goes well, and we're expecting to file by the end of the year as well. So teams are ready to go.

The next question will come from Yaron Werber with Cowen.

This is Brendan on for Yaron. Congrats on the quarter, guys. Just a couple of quick ones from us. First, in treatment-resistant hypertension, can you maybe just remind us what the Phase II readout is going to look like there maybe in terms of the number of patients and what kind of data we can expect? And really, in that same program, I guess, as you're looking ahead to a potential Phase III, is there like a threshold? Or what are you really looking for in terms of efficacy, target engagement there that would give you confidence to move forward with the drug?

Eugene, would you like to take that?

Sure. Yes. So the Phase II data, current data is in patients with treatment-resistant hypertension. We're hoping basically to see consistent effects with what the earlier smaller study had demonstrated, which range in the order of 10 to 15-millimeter mercury but again, in a larger study, of course, with greater variability, what we're hoping to see, of course, are highly statistically significant changes. The study is appropriately sized for this type of exploration. It's in 150, approximately 150 patients. So really, that's all I could tell you at this point.

And if I can just expand on that a little bit. Thanks, Eugene. Just a reminder, Brendan, we have a pretty comprehensive program ongoing for AGT right now. In addition to that readout for the Phase IIb study later this year in refractory hypertension, we have an ongoing study with that drug in patients with heart failure. And we're looking for that to read out next year.

And then coming up behind our lead drug is a new molecule, our Gen 2.5 AGT molecule that completed Phase I very successfully and now we're planning to start Phase II. And sometime next year, we plan to look at all the data, the lead molecule, the follow-on molecule, heart failure, refractory hypertension, and we will make a decision on what's the best molecule and what's the next step for Phase III. But what we're looking to see is what Eugene said, is confirmation of the proof of concept we already achieved in refractory hypertension in a bigger patient population and also with good safety, of course.

And when I say safety, I mean, on-target safety. We need to be very aware of the fact that inhibition of this pathway, the RAS pathway in the kidney can cause kidney issues. And we haven't seen it in our Phase II study. We don't expect to see it. It's a LICA which targets the liver, not the kidney, but we need to confirm that. And once we look at all the safety and the efficacy in the study, we'll make a call on the next step for potentially for Phase III.

The next question will come from Luca Issi with RBC.

Congrats on the progress here. So maybe on TTR polyneuropathy. I think the primary endpoint is actually at 9 months. Will that be sufficient for filing both in the U.S. and in the EU or will you need to wait the 18-month data point to file in the EU similar to what has happened to Alnylam? And then maybe on PCSK9, I think pretty impressive knockdown. However, we did see 4 patients in the high dose experiencing some ALT elevations. Two of them, I think, had discontinued the drug. So wondering how you're thinking about that in the context of inclisiran, at least I'm not aware of that signal. And then finally, any update on the pulmonary franchise post the ENaC discontinuation?

I think, Luca, you've squeezed a lot in there. Happy to do our best in addressing all 3 of those questions. So yes, we're very excited and very pleased with the data readout on ION449. Our PCSK9 drug was presented at ACC. There's such an enormous need for more effective LDL lowering drugs for patients that are high risk for cardiovascular disease and continued hypercholesterolemia despite being on statins, ezetimibe, despite being on monoclonal antibodies for PCSK9, despite being on inclisiran. This molecule looks to be the most potent, efficacious PCSK9 lowering drug, LDL-C lowering drug of any that has come out to date. And that is why AstraZeneca is so enthusiastic about this program. So it could be a real game changer for the millions of people suffering from hypercholesterolemia and GVD.

The Phase IIb ETESIAN study was a dose-ranging study. And we achieved reductions of LDL-C greater than well over 70% and PCSK9 in the 90% range at doses where there were no signals on ALT. So it was a 50 mg monthly dose in that study. And 90-milligram dose where we saw, I think, 4 patients with mild ALT elevations, a couple of things worth noting.

One is that they're mild. Two is that 2 of the patients continued dosing and ALT returned to baseline, towards baseline. So this isn't -- the toxicity and the ALT observation in a very small number of patients. They're tiny. But more importantly, it's not the Phase III dose. The Phase III doses are going to be in the range of 50 or so in that range because that's what we're achieving our LDL targets there. And there's an ongoing study called SOLANO that AZ is conducting to further confirm the Phase III dose. And that study is looking very good. And they're preparing for Phase III development. So the drug looks very good, very safe, and we haven't seen any bumps in the road.

With respect to inclisiran, I prefer not to comment on competition except what I already said. There's a need for more effective LDL-C lowering agents. Patients are not getting to their target. And so a drug like ION449 is needed in this patient community. Do you want to talk about pulmonary a little bit, Eric.

Sure. So what we're doing in pulmonary is picking up or looking at some of our chemical class. And the hope there is we can find some molecules that will become some of the clinical issues we saw with inflammatory effects in nonhuman primates. And here, we're thinking of some of the new backbone chemistries that we've talked about that allow us to tinker with the properties of the molecule, reduce the baseline potential for inflammatory effects. And we've seen really good data on some of these compounds across multiple programs and are working hard to try and get some data in the relevant species in the not-too-distant future to both advance new chemistries and also potentially move them into some pulmonary diseases where we think there's lots of potential applications with lots of unmet medical need.

And we're making solid progress in the areas that Eric said and we're encouraged. We're very encouraged that the pulmonary program is going to be reactivating soon on the development side.

I didn't answer your question about time line. I apologize. I just kind of went out of order. So we're planning to file the NDA this year on eplontersen in polyneuropathy. I should point out that you mentioned 18-month data, remember, our full data set complete 15 months, not 18 in the NEURO-TTRansform study. But what you're highlighting is the fact that ex U.S., European regulators have set a higher bar for approval. And they have signaled that they would like to see the full data set. With that said, we haven't ruled out ex U.S. filing, and we're keeping that option open. But we're focused right now on the NDA.

The next question will come from Jessica Fye with JPMorgan.

I wanted to follow up on a prior question about the changes to CARDIO-TTRansform. You talked about them being driven by patient demographics. Are you changing any of the inclusion or exclusion criteria and/or the regions you'll focus on for further recruitment in addition to just increasing the sample size and treatment duration?

Thanks for your questions, Jessica. So no, we're keeping eligibility criteria the same. We are, however, looking into sort of geographies with fairly specific intention of, again, as Brett said, ensuring the population we enroll is, number one, representative of sort of the current landscape of patients with ATTR, the full landscape. But also importantly, enables us to make some inferences for drug effect in important subgroups of patients.

And that could involve, and Jess, that could involve prioritizing certain geographies and territories to your second point.

Okay. So I guess...

In fact, I should say it will involve that. It will involve that, Jess.

Yes. Because I think in the past, you've talked about your expectations for maybe a 50-50 split between patients who are on background tafamidis and those who are not even though you're not limiting background tafamidis. So is that still your expectation that, that will be the mix?

With what we've said, Jess, is we want the naive versus tafamidis to be very well balanced. So 50-50 would be perfect, but we're looking for a well-balanced naive versus tafamidis usage.

Okay. And I guess last one on this topic. Were these changes to CARDIO-TTRansform prompted by a recommendation from the DSMB or were they made without DSMB input? And has there been an interim analysis in this trial at this point?

There's been no interim analysis. We still have an option to conduct an interim analysis after the patient enrollment at the appropriate time, but we have done no interim analysis at this stage. This was driven entirely by Ionis. This has nothing to do with the safety oversight committee or even AstraZeneca. We put this forward, as I said earlier in the call. So it's an option. This was always part of the plan not to necessarily do it, but to potentially do it. And we're now triggering that option that we have. And we're in excellent position time-wise and enrollment-wise to be able to trigger this today. Of course, we engaged AstraZeneca and they fully support the decision, and we're working hand in hand with them on implementing that. But no, this was entirely driven by Ionis.

The next question will come from Paul Matteis with Stifel.

This is Alex on for Paul. Just one eplontersen polyneuropathy question and then one neuro question. So for eplontersen, can you remind us, is there a prespecified cardiac subgroup within the polyneuropathy study? And if so, do you expect to have any exploratory biomarker imaging data either at this readout or the full readout? And then on neuro, given that Biogen announced their pipeline prioritization, have you thought at all about reacquiring any rights to your neuro programs in collaboration with Biogen?

You take the first one, the cardio subgroup and then neuro.

Yes. Thanks for the question. So yes, there will be an analysis, a look at specific subgroup predefined look in the cardiac subgroup and polyneuropathy study, the NEURO-TTRansform study. It's, again, just to remind you, it's not exactly the same population to CARDIO-TTRansform. These patients don't have symptomatic heart failure. They're largely polyneuropathy patients with mixed phenotype and having some evidence of cardiac disease. I think that's an important distinction. But yes, there will be an important subgroup down the line.

Yes. Now let me just take a step back with Biogen. We have a very strong partnership and relationship with Biogen that spans 10-plus years now and started with Spinraza and it's grown and gotten stronger and stronger over the years. The relationships are strong at all levels in the partnership. We've gone through management changes before at the top with Biogen and without a bump in the road, without any setbacks or anything like that. I actually think that the Ionis pipeline of drugs that we're working on with Biogen will become an even higher priority with Biogen. I don't think they're going to be willing to give those up easily. They're going to be turning the page and they're going to be looking at the drugs like MAPT, the follow-on with Spinraza, and everything else that we're working out with them. I think these will continue to be very high. I think these might be even higher priorities with Biogen.

With that said, we're very pleased with our neuro pipeline of drugs that we are growing here at Ionis, that wholly owned Ionis neurology pipeline. And one example of that is we're very much looking forward to starting our studies in Prion disease in the second half of this year. One of our lead programs, not our only program but one of the key programs that we've highlighted as a key study initiation this year. So no, I don't think we're going to be reacquiring assets from Biogen as a result of the change in management that they announced yesterday.

And just one clarification. Do you expect any of the cardiac data at the top line midyear or not until later?

No. So the top line will be data on the full population and all of the subgroups will be reported at a later time point.

The next question will come from Gary Nachman with BMO Capital Markets.

So first, just another follow-up on eplontersen and adding more patients to the cardiomyopathy study. So why didn't you wait until the PN data before making a decision since the data are coming soon? And it sounds like we will have some cardio data in there for some of the patients and it potentially could have been informative to your decision. That's one.

And then also for Beth. The $20 million that you got from AZ for eplontersen development costs, is that the kind of number we should expect on a quarterly basis or is there some upfront loading in there? And then lastly, just what are the next steps for 449, the PCSK9 program? Do you have an idea what types of dyslipidemic patients you'll target in the next phase based on the Phase IIb data that read out?

Want to take the eplontersen?

Sure. I'll take the first question. So related to timing of this amendment. As Brett said, again, we've been mulling this over for quite some time, and the timing of it was one of the key considerations. And we saw that the timing now was really kind of ideal for implementing the change such as this one. Why not wait until NEURO-TTRansform? Well, firstly, it's just a very different patient population that we enrolled in NEURO-TTRansform. So we just don't see how this would inform us whatsoever on what will go into CARDIO-TTRansform. Secondly, the CARDIO-TTRansform changes were really driven by the intentional desire for particular sort of balance in the population characteristics that Brett had outlined.

Beth?

Sure. So on the $20 million, the way to think about that is it's 55% of our, call it, fully loaded eplontersen broad Phase III development expenses in the first quarter. So when I say fully loaded, that means external expenses, internal FTE expenses and CMC expenses. So that $20 million is essentially 55% of what we incurred in that Phase III program in the first quarter.

So as we continue to see those expenses grow over the course of the remainder of the time, particularly with the cardiomyopathy study, and as we get closer to that data readout and to launching the drug, those expenses in that broad Phase III program are going to continue to grow. And so the 55% that AstraZeneca is responsible for will also grow, and you'll see that each quarter. And it's true that it's the same amount, let me say this differently. The development expenses and the 55% of revenue are for the same quarter. So there's no offset. There's no loading. There's no lag in that. They're in line. So as expenses grow each quarter, so will the 55% of revenue under the eplontersen joint collaboration revenue line.

And Gary, regarding PCSK9, you think about it like this, it's the same patient population that was treated in ETESIAN. That's why that study is so important. It's actually the same by patient population. Patients that have cardiovascular disease. So they've had an event in their life, have high LDL cholesterol on moderate to maximum doses of statins and Zetia that can't get to their LDL target. And that would be the Phase III patient population.

Okay. Great. And when is that study going to start? I may have missed it. I jumped on late.

No problem. Actual study start hasn't been disclosed, but what has been is that AstraZeneca will make a decision on Phase III development in the second half of the year. Remember, there's a study ongoing. The reason for that was a study ongoing to confirm the Phase III dose. And so that's not necessarily the same dose that we're going to do, right? They're looking to really solidify the Phase III dose in SOLANO. That study is wrapping up. It's really coming to a completion. And that's the basis of the delay in making that decision.

The next question will come from Mani Foroohar with SVB Securities.

Not to beat an entirely dead horse but I want to talk a little bit about the commercial opportunity and strategy around your approach to TTR cardiomyopathy. There's a clear avenue for you guys to have the closest thing to a true add-on label for combination therapy on top of the stabilizer. How do you think about pricing strategy should you be approved with a label that has data that supports that use? And how do we think about the pricing opportunity prior to and then after tafamidis genericization in the U.S. versus EU markets?

Onaiza, would you like to take that?

Sure. So yes, great thinking over here in terms of the eplontersen strategy. I'll kind of start off with, I think the amendment that we filed here is just to really accelerate our leadership position in ATTR from early to late-stage disease. We're looking at about 300,000 patients in cardiomyopathy. The data set that we're going to get, as Eugene said, is really important for all players, including payers as well as clinicians. So as we've gone out in the marketplace and really tested out the target product profile, it is extremely important to generate data that's on top of tafamidis as well as naive because we're going to have in this very dynamic market a set of patients that are going to be either naive to therapy or a lot, particularly in the U.S., treated on tafamidis. And they're going to look for what is your clinical evidence for these patients? And how do I actually treat them if they're already on tafamidis and how do I treat them if they're naive? And we will have both data sets to be able to do that.

The payer strategy and what we've learned from payers thus far is that they view this patient population as a very sick patient population and terminal disease. And they are not going to manage this actively to say what a physician should do if you're already on another standard of care or you're in combination to that. If the physician requires a combination therapy, that's what they're looking to approve and not necessarily have step-through in this situation, which is one of the questions, obviously, we had. So we are expecting actually a relatively open environment from a payer perspective. Obviously, they all go through prior auths, but nothing onerous in terms of future requirements and/or step-through therapies as well. So we'll price accordingly to where the clinical value proposition is coming out, which is going to be a very robust set of clinical evidence.

The next question will come from Joseph Stringer with Needham & Company.

A quick one from us on cimdelirsen in acromegaly. The Phase II readout second half of this year, monotherapy. What reduction in IGF-1 or perhaps a percent of patients that have normalized IGF-1 would you be looking for or that would give you confidence in this program going forward?

Eugene, do you want to take that?

Sure. So really, the remaining need here is being able to achieve normalization of IGF-1. That's really the bar that we set for this drug, both in the monotherapy setting as well as in the add-on setting. So outside of that, I can't really speculate what the threshold in terms of responder rate that would get us really excited, but we're obviously planning for a very positive readout in terms of IGF-1 normalization.

Yes. I would just add here that both sets of data on monotherapy and in addition to SSAs are going to be really important here from a market perspective as well. And we'll have both sets of data. And the people are still seeing good breakthrough attacks over here. So I do think that IGF normalization is a key goal, but having such data as monotherapy as well as in combination will be very important.

The next question will come from Salveen Richter with Goldman Sachs.

This is Matt on for Salveen. Just going back to 449, could you guys discuss your thoughts on market strategy or pricing? And then separately, could you give us an update on your ALS programs, in particular, when should we expect Phase I/II data for 541?

So for 541, that's our ataxin-2 drug in sporadic or nongenetic ALS. Biogen is running that study, and they haven't disclosed timing, but I would look towards next year for that data readout. And of course, we're very much looking forward to that. And that could go to Phase III based on if the results are positive. Onaiza, would you like to talk a little bit about commercial opportunity and not really touch on pricing much for PCSK9, but why don't you go over it?

Yes, sure. Really large market, you know about 11 million to 16 million patients. So a very large population that's still uncontrolled on maximal tolerated statins. The guidelines are really getting aggressive here because of the cardiovascular risk for these patients, particularly secondary prevention, and they're leading to about 70 milligrams per deciliter in the U.S. and 55, actually, milligrams per deciliter outside of the U.S. So really good momentum, I would say, in terms of aggressive guidelines to treat, which I think will help this entire market grow substantially.

ETESIAN showed you some tremendous LDL-C reduction, which is well above what the mAbs have shown and also well above what inclisiran has shown in this area. So just to put into context, we're looking at about the 50% range for Leqvio, about the 60s for the mAbs, and we're looking at in the 70s for our PCSK9, which is going to be a really substantial improvement in LDL lowering. And we expect with all the modeling, this will also translate into really good MACE reduction as well.

That positioning is what will drive the value proposition and kind of the pricing strategy and also which level of area that we actually want to go into in terms of the reimbursement scheme as well. So it's really well positioned to do well. But the efficacy profile, the best-in-class efficacy is what's going to kind of drive the go-to-market strategy for this agent.

The next question will come from Myles Minter with William Blair.

Just in your prepared remarks on 449, you did say AstraZeneca is going to make a formal decision on the Phase III in the second half, but the commentary on the call today seems to be like that's well and truly going ahead. So Brett, can you just clarify what prepping for Phase III development actually means? Is that just getting these Phase II trials done or have you seen a protocol? And then, Beth, can you talk to the milestone structure, if anything, on that deal if a Phase III is started up in the second half? And my last one is just on the muscle LICA program. Are you planning to take a single asset into IND-enabling studies there? I know you have multiple collaborations and programs there. Or would you take multiple programs into the IND tox studies?

Thanks, Myles. Yes. This is, AstraZeneca is not planning to start a Phase III development from a stop position after the ongoing SOLANO data reads out. They're very much preparing for Phase III now. That includes making the drug, getting the drug ready and then contemplating new protocol, sure, protocol is being developed and they're preparing for an end of Phase II meeting. And we're working very closely with them on this program. So all that is in motion. All that is happening. We're really just waiting on finalizing the protocols and getting ready for regulatory interactions. Obviously, they've had regulatory interactions previously, but now it's the end of Phase II interaction, prep for that and getting the drug ready. So yes, all those wheels are in motion. And as far as the economics of that, Beth?

Sure. So we've already earned a substantial amount of revenue from this program. So now as we look forward to the next step, there aren't any milestones associated with Phase III, but there are a substantial amount of milestones for sort of common regulatory type events. And then a very significant amount of commercial milestones that add to our tiered royalties that go up into the teens.

Muscle LICA, Eric?

Yes, sure. So what we stated is we have an objective to advance one muscle LICA into development this year. As you know, we have lots of programs. We have to start one first before we get to many, I think. And there's lots of great opportunities there. We have lots of preclinical programs. And we plan to be aggressive in picking off the best clinical opportunities and where there's the most unmet need and moving those programs forward.

Yes. I mean, just to put a fine point on that, Myles. Eric's under pressure to move several muscle LICA in development because the space is really looking great. I also want to remind you that we have our own muscle LICA programs, Ionis wholly owned. We also are working on neuromuscular diseases with Biogen. And we also have an excellent partnership with AstraZeneca in cardiovascular diseases aka cardiac. So we have a lot of balls here and things are moving forward. But what will be first is less important than, I think, just your question, which is, we expect to have a rich pipeline of muscle LICA drugs in development in the future.

The next question will come from Yale Jen with Laidlaw & Company.

Congrats on the progress. Just 2 quick ones. The first one, just wanted to clarify that in terms of the CARDIO-TTRansform trials, does that include any patient with a mixed phenotype? In other words, with the polyneuropathy patients or simply purely all in cardio side?

Yes. No. It very much includes some patients who have mixed phenotype. We are certainly aware of how significant of an overlap there is between the 2 sort of edges of the spectrum, if you will, that used to be considered very separate diseases, but really are manifestations of the same pathology in different organ systems. So yes, we are looking at neurological endpoints appropriate for the patient population.

And Yale, it's an interesting question. There's more and more attention in this field being paid to the neuropathy symptoms than patients with wild-type cardiomyopathy have. So it's a very relevant question and it's something that we are paying very close attention to, and it will be something we're assessing in the CARDIO-TTRansform study like Eugene said. So thanks for the question, Yale.

Unfortunately, we're overtime. So we're going to have to close the call. I really do want to thank everybody for joining today and participating on the call. We're making great progress at Ionis. We're very happy about the first quarter and we're very excited about the rest of the year ahead. And we look forward to providing additional updates throughout the rest of the year. So until then, thanks very much, and everybody, have a great day.

Goodbye.