Alnylam Pharmaceuticals, Inc. Q2 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by. Welcome to the Alnylam Pharmaceuticals Conference Call Second Quarter 2020. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the company’s request. I would now like to turn the call over to the company.

Good morning. I’m Christine Lindenboom, Senior Vice President of Investor Relations and Corporate Communications at Alnylam. With me today on the phone are John Maraganore, Chief Executive Officer; Barry Greene, President; Akshay Vaishnaw, President of R&D; Jeff Poulton, Chief Financial Officer; and Yvonne Greenstreet, Chief Operating Officer; Andy Orth, Head of the US Business is also on the phone and available for Q&A. For those of you participating via conference call, the accompanying slides can be accessed by going to the event section of the Investor page of our website at www.alnylam.com/event. During today’s call, as outlined in Slide 2, John will provide some introductory remarks and general context. Barry will provide an update on our commercial and medical affairs progress. Akshay will review recent clinical and pre-clinical updates, Jeff will review our financials and Yvonne will provide a brief summary of upcoming milestones before opening the call for your questions. I would like to remind you that this call will contain remarks concerning Alnylam’s future expectations, plans and prospects, which constitute forward-looking statements for the purposes of Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent quarterly report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to provide such statements. With that, I would turn the call over to John.

Thanks, Christine, and thank you everyone for joining us on the call today. Let me start by expressing our support for Black Lives Matter and our commitment to efforts aimed at eradicating systemic racism within our country. At Alnylam, we stand against all forms of discrimination and, at our core, we believe in justice, equity, and inclusion. We support peaceful protests which aim to achieve real and sustainable change. Enough is enough; it is time to finally cure the refractory scourge of hate. I would also like to briefly comment on the Trump Administration’s recent announcement regarding drug prices. While we fully support the need to reduce or eliminate out-of-pocket costs for prescription drugs, the administration’s proposal for a so-called most favored nations executive order is unfortunate and misguided. Importing foreign price controls will harm American innovation and negatively impact patients. Even if this executive order is finalized, we don’t believe it will have long-lasting effects on our core business. As all of you know, the COVID-19 pandemic continues to be dynamic, uncertain, and unpredictable. However, we continue to see the situation within the same framework we discussed last quarter: pandemic phase in Q2, recovery phase in Q3, and a new normal starting in Q4. While the pandemic continues to worsen in many U.S. states, we believe Alnylam’s global presence benefits our business. Despite fluctuations, we see healthcare systems remaining open, and we do not expect to see another shutdown of healthcare systems like what we experienced in Q2, especially in April and May. Our confidence in the second half is reflected in our upward revisions to our ONPATTRO revenue guidance range. Overall, we are immensely proud of our field teams globally and their ability to adapt quickly and safely to meet the needs of patients, embodying our “challenge accepted” mentality. We are extremely pleased with the top-line performance of ONPATTRO and GIVLAARI in Q2, which Barry will elaborate on shortly. We are also proud of the significant progress made across our pipeline in the quarter, as Akshay will discuss. Another highlight was our strategic financing collaboration and royalty monetization agreement with Blackstone, worth up to $2 billion. We believe this partnership secures our bridge toward a self-sustainable financial profile without the need for future equity financing. Before I share my closing remarks, I want to take a moment to acknowledge the announcement made earlier this morning about Barry Greene’s planned departure from Alnylam at the end of the quarter. Barry and I have worked side by side for over 20 years, first at Millennium and then for 17 years at Alnylam, and I know I speak for everyone at the company in expressing gratitude for Barry’s exceptional contributions and dedication to Alnylam. We owe him tremendous thanks for his outstanding leadership and track record that have contributed to advancing RNAi therapeutics as a whole new class of medicines for patients. I have no doubt Barry will continue to be a highly impactful leader in life sciences. I’m thankful for his agreement to consult with Alnylam as needed for a two-year period, and I wish him the very best in his next endeavors. We are also very pleased to share that Yvonne Greenstreet, our current Chief Operating Officer, will step into the expanded roles of President and Chief Operating Officer on October 1st. We believe Yvonne is uniquely suited to this opportunity, given her strong business acumen, strategic leadership, and proven ability to drive results. We are initiating a search for a Chief Commercial Officer, and during that search, we anticipate no disruption in our ongoing commercial execution. Please join me in wishing Barry well as he moves on to the next chapter of his remarkable career and in congratulating Yvonne on her expanded role at Alnylam. I want to finish by sharing my vision for the big picture of our company. We continue to lead the advancement of RNAi therapeutics as a new class of medicines. We remain on track to achieve and exceed our Alnylam 2020 goals, exiting 2020 as a multi-product global commercial company with a robust clinical pipeline for future growth and a strong product engine for sustainable innovation. Without a doubt, we are excited about the promising future that Alnylam is poised to deliver as a top-tier biopharmaceutical company focused on advancing transformative medicines for patients around the world. With that, I will turn the call over to Barry for one last time to discuss our commercial progress and medical affairs activities in more detail. Barry, the floor is yours.

Thanks, John, and good morning, everyone. Before I provide the quarterly highlights, I would like to make some brief remarks about my planned transition from Alnylam. First, congratulations to Yvonne, a remarkable person who truly deserves the presidency. I know Yvonne will ensure that Alnylam continues to focus on doing the right things for patients and I am counting on that. It has been a tremendous privilege to serve as President of Alnylam for such a long time. I’m proud of what we have accomplished during my 17 years, having built a global, fully integrated, multi-product company. There has been recognition for excellence in R&D as well as our considerable commercial strength. My decision to transition is driven by my desire to assume a new leadership opportunity in the next chapter of my career. I am fully confident that Alnylam will achieve its ambitious goals with quality and excellence due to the exceptional team we have in place. I will continue to support Alnylam throughout this transition and have no doubts about the company’s prospects as a top-tier biopharmaceutical firm. Now, let’s move on to our results for ONPATTRO. We achieved $66.5 million in global net product revenues as of June 30th, with over 1,050 patients receiving commercial ONPATTRO worldwide, representing an increase of over 100 patients from the end of Q1. This impressive accomplishment occurred in the midst of the global pandemic in Q2. In the U.S., we anticipated that the COVID-19 pandemic would impact our business in the second quarter, leading to decreased patient demand due to reduced adherence as some patients skipped doses or experienced dose delays while transitioning to other therapies. We also witnessed a slowdown in the pace of new patients entering therapy due to reduced genetic testing, diagnosis, and patient flow through the healthcare system. Furthermore, our U.S. business faced challenges due to inventory destocking in the quarter. However, as we entered Q3, we are now seeing a healthy return of genetic testing and patient flow through the U.S. healthcare system, even in states where COVID-19 case numbers are rising. In fact, our July estimates showed nearly equivalent volumes to those seen in January, signaling a positive trend. In Q2, we also continued to observe excellent progress, with 40% of new writing coming from unique neurologists and cardiologists in the U.S. who prescribed ONPATTRO with future stabilizers during the quarter. We believe this trend will continue to grow as physicians comply with the progression of polyneuropathy in patients on stabilizers and actively treat various manifestations of hATTR amyloidosis. Looking at the international landscape, we made significant progress with ONPATTRO, benefiting from geographic expansions in markets like Spain, Italy, and others. Moreover, we saw remarkable strength from our international partners in Europe relative to effective pandemic management. An important achievement announced today is that we have secured pricing and reimbursement agreements in France, which enables access to ONPATTRO in all priority markets across Western Europe. Notably, we managed to secure access in all major European markets in under two years post the EMA approval, significantly faster than most orphan medicines can achieve. Japan has also proven to be a strong market for ONPATTRO, becoming our second-largest country after the U.S. in terms of sales, and we expect continued growth in patient numbers in this critical market. Furthermore, our medical affairs team has committed to addressing the challenges of disease awareness and improving diagnostic testing. We initiated third-party genetic screening initiatives in the U.S., Canada, and Brazil. As of July, over 27,000 samples have been submitted, with over 1,600 positive for pathogenic mutations, reflecting our 6-8% positivity rate. The numbers indicate that we are bouncing back from the testing slowdown we observed in Q2. The encouraging news is that third-party testing metrics have returned to levels comparable to those seen in January. In July, we reported strong progress in our launch efforts. We achieved $11 million in global net product revenues for GIVLAARI in Q2, with more than 85 start forms in the U.S. and over 100 patients globally receiving commercial treatment ever since the launch through June 30th. As we expand ex-U.S. territories, we will gradually discontinue providing start form metrics in future quarters, just as we did with ONPATTRO last year. We have seen a diverse prescribing landscape in the U.S., comprising various specialties, including neurologists and other high-volume centers. Encouragingly, 76% of our Q2 starts came from new prescribers. Our progress with value-based agreements has been robust, with successful negotiations completed with U.S. payers. We now have confirmed access for over 35% of U.S. payers covering ONPATTRO, with no more restrictive medical policies than what we’ve seen in our regular medication. As we approach Q3, we are pleased with the initial performance of our virtual launch in Germany and the positive patient uptake in other countries, including France. Overall, the second quarter posed challenges due to the pandemic, particularly in the U.S., but we performed better than the more downside scenarios we had anticipated as we entered Q2. The credit goes to our global teams for overcoming these hurdles to deliver our medicines efficiently. With that, I will now turn the call over to Akshay to discuss our recent R&D pipeline progress.

Yes. Good morning, everyone. And thank you, Barry. I must say thank you, Barry, for guiding me through the process of building our company and, most importantly, for working tirelessly to help all the patients we aim to serve. With that, I will update you on our efforts related to ATTR amyloidosis, where we are advancing two product candidates, patisiran and givosiran. ONPATTRO is approved in multiple markets worldwide to treat polyneuropathy associated with hATTR amyloidosis, and we are currently working to expand the product's label to include treatment for cardiomyopathy in both hereditary and wild-type ATTR amyloidosis patients. In this regard, we continue to enroll patients in the APOLLO-B study and expect to complete enrollment in 2021. We have seen enrollment accelerate over the last month as clinical sites begin to open again. Additionally, we are advancing vutrisiran, which is an investigational RNAi therapeutic administered by quarterly subcutaneous injection for treating ATTR amyloidosis. We are conducting two Phase III studies with vutrisiran. The HELIOS-A study is evaluating vutrisiran in patients with polyneuropathy, and enrollment is now complete. We remain on track to report top-line results early next year. The second Phase III study, HELIOS-B, is focused on patients with inherited and wild-type ATTR amyloidosis with cardiomyopathy; enrollment and site activation are now gaining momentum. If HELIOS-B yields positive results, it could open up the large wild-type ATTR amyloidosis market opportunity with a product label including cardiovascular outcomes. Moving on to GIVLAARI, which has received approval in the U.S., EU, and now Brazil to treat acute hepatic porphyria (AHP) in adults. A highlight for GIVLAARI in recent months was our Brazilian approval. We continue our geographic expansion with marketing authorization application submissions in Switzerland and Israel, and we plan to submit in Japan in the coming months. During Q2, we also shared new 12-month interim data from the Envision Phase III study, demonstrating sustained efficacy and acceptable safety through 12 months of treatment, with indications of potentially improving outcomes over time. Additionally, we are proud to have published pivotal results from the Envision Phase III study in the New England Journal of Medicine, our notable paper on RNAi therapeutics. Now let’s move to lumasiran, which is our investigational RNAi therapeutic being developed for treating Primary Hyperoxaluria Type 1 (PH1). At the ERA-EDTA meeting in June, we reported the positive outcomes from the ILLUMINATE-A study, which demonstrated that lumasiran decreased ureaoxide levels, the main cause of progressive kidney failure in PH1. Additionally, lumasiran showed an encouraging safety profile. Our overall lumasiran program also encompasses the ILLUMINATE-B study, which involves pediatric patients under six years of age; enrollment is complete, and we are on track to report top-line results soon in mid-2020. The ILLUMINATE-C study in severe PH1 is progressing well, even during the pandemic. We submitted our NDA and MAA during Q2. The FDA granted priority review for the NDA, setting an action date of December 3, 2020, while the EMA has given the application accelerated assessment status. We also have two late-stage programs developed in partnership. The first is inclisiran, aimed at managing hypercholesterolemia, which is currently undergoing review for approval in both the U.S. and EU. Novartis expects initial U.S. approval later this year, and their anticipated action date is set for December. The second program is FITUSIRAN, which is in development for hemophilia A or B, with or without inhibitors, in partnership with Sanofi. Sanofi recently disclosed that two of the ATLAS Phase III studies completed enrollment and remain on track to report top-line results in the first half of 2021. Sanofi also presented positive interim results from the Phase III study of FITUSIRAN, showing impressive reductions in the annualized bleeding rate alongside promising safety. Beyond our late-stage clinical programs, we are making notable progress in our early and mid-stage programs. A key highlight from the quarter was the positive top-line results from our ALN-AGT Phase I study in patients with hypertension. Specifically, ALN-AGT achieved over 90% knockdown of angiotensinogen, yielding over 10 mmHg reduction in systolic blood pressure with durability that permits quarterly or infrequent dosing regimens. We are also encouraged by the tolerability profile of ALN-AGT. We look forward to presenting more comprehensive data from this trial later in the year, pending abstract acceptance. We are very excited about ALN-AGT's potential to redefine the treatment of hypertension by ensuring controlled blood pressure, which we believe could offer significant benefits to patients. Our next clinical program is ALN-HSD, targeting NASH, for which we have recently filed a CTA. This program is advanced in collaboration with Regeneron. We are also making substantial progress on our many RNAi therapeutic opportunities beyond the liver. For our COVID-19 RNAi therapeutic collaboration with VIA, we selected the development candidate LNCRE or VIA2783, which exhibits potent and highly cross-reactive activity against SARS-CoV-2, the virus responsible for COVID-19. We anticipate filing an RND application towards year-end 2020. I'm pleased to report that Regeneron has opted into the ALN-APP program, and we aim to file an R&D application for ALN-APP in mid-2021, anticipating that this will be our first CNS program to enter clinical development. With that, let me now turn it over to Jeff to review our financial results.

Thanks, Akshay, and good morning, everyone. I’m pleased to present Alnylam’s Q2 2020 results. As Barry highlighted, we had a very strong quarter of commercial execution with outstanding results for both ONPATTRO and GIVLAARI. Starting with ONPATTRO, we generated $66.5 million in global net revenue for the quarter, impacted by the pandemic, particularly in the U.S., with global growth being flat compared to Q1 2020 and a 74% increase versus Q2 2019. U.S. growth decreased 13% this quarter compared to Q1, primarily due to the following: a 4% decrease in demand attributed to reduced patient adherence because of the COVID-19 pandemic; an 8% reduction owing to inventory destocking during the quarter, leaving us with an ending inventory of 1.5 weeks in the distribution channel at the close of Q2; and a 1% decrease resulting from a modest uptick in gross-to-net deductions during this quarter. We continue to expect that gross-to-net deductions will remain in the mid-20s globally for ONPATTRO throughout 2020. In our international markets, the performance was very strong despite the pandemic, yielding a growth rate of 16% over Q1. European growth was notable in newly launched markets in Italy and Spain, while in Asia, Japan continues to show robust growth, now representing our second-largest market for ONPATTRO, as Barry mentioned. For the first time this quarter, the contribution from international markets exceeded the U.S. contribution to global ONPATTRO sales. We are pleased to have developed a strong global brand, which we believe positively impacts long-term growth. Turning to GIVLAARI, the quarter was also favorable as we achieved $11 million in global net revenue, representing over 100% growth compared to Q1. This increase was driven by the ongoing success of the U.S. launch, where we experienced much less reduction in patient adherence relative to ONPATTRO, coupled with contributions from international markets benefiting from a successful launch in Germany and named patient sales in countries, including France. Our combined product sales for ONPATTRO and GIVLAARI totaled $77.5 million for the quarter, reflecting a 6% growth compared to Q1—a strong result amid COVID-19 challenges. Now, let’s summarize our full P&L results for Q2. Net revenue from collaborations reached $26.4 million, an encouraging rise from last year's figures, driven primarily by revenue recognized through our collaborations with Regeneron and VIR. The gross margin percentage of total revenue for the quarter was 81%, down from 90% in Q2 2019, primarily due to the current use of ONPATTRO full-cost inventory, while last year was benefited from zero-cost ONPATTRO inventory and a higher proportion of sales in Q2 2020 coming from lower-margin international markets, along with a write-off of ONPATTRO inventory at our contract manufacturer. Our R&D expenses decreased on a non-GAAP basis in Q2 2020 compared to the same period the prior year due to non-recurring costs from 2019 and license fees related to our collaboration agreement with Regeneron, alongside cost reductions for manufactured materials used in clinical trials. Conversely, SG&A expenses rose modestly on a non-GAAP basis in Q2 2020 compared to the previous year, primarily due to increased investments in commercial and medical affairs activities to support the ongoing launches of ONPATTRO and GIVLAARI, as well as initial launch preparations for lumasiran. Importantly, our non-GAAP operating loss for Q2 decreased by approximately $40 million compared to 2019, driven by a combination of strong top-line growth and very moderate operating expense growth. We firmly believe that 2019 represents our peak non-GAAP operating loss year, as we project continued strong top-line growth alongside moderate operating expense growth for the remainder of the year. At the end of the quarter, we held cash and investments totaling $1.95 billion, which includes $600 million in proceeds from the partial sale of future royalty streams and issuance of common stock to Blackstone. Lastly, regarding our financial guidance, we believe that Q2 results demonstrate the strength of our commercial teams amidst challenging circumstances. Thanks to ONPATTRO's strong performance, which surpassed our initial expectations back in the earlier pandemic phase in May, we are further revising our full-year revenue guidance for ONPATTRO. We have narrowed the range from $270 million to $300 million down to $280 million to $300 million. Guidance for combined non-GAAP R&D and SG&A expenses, as well as net revenues from collaborations, remains unchanged. Please note that we have revised downward the midpoint of our GAAP combined R&D and SG&A operating expense guidance by $25 million, reflecting a reduction in expected stock-based compensation during the year. Our strategic financing collaboration with Blackstone, potentially providing us with up to $2 billion in cash, ensures Alnylam's bridge toward a self-sustainable financial profile without requiring future equity financing. And with that, I will now turn the call over to Yvonne to discuss our goals for the second half of the year.

Thanks, Jeff. And hello everyone. As we look ahead to the second half of 2020, we have several important milestones lined up. We will continue our global commercialization efforts for both ONPATTRO and GIVLAARI. We are looking forward to GIVLAARI's launch in Brazil and an upcoming NDA filing in Japan. Additionally, we expect two additional regulatory approvals by year-end for lumasiran and inclisiran. We plan to keep enrolling patients in our ATTR cardiomyopathy studies, specifically APOLLO-B with patisiran and HELIOS-B with vutrisiran. With lumasiran, we expect to share top-line results from the ILLUMINATE-B Phase III study in mid-2020. We will also continue advancing our pipeline, alongside exciting preclinical assets. We will highlight these milestones as they occur throughout the year. Our upcoming presentations will include additional clinical results from the ongoing Phase I trial of ALN-AGT in hypertension—a program we are quite excited about. Moreover, we plan to initiate the Phase I trial for ALN-HSD for NASH, having already filed the CTA for that program. Regeneron intends to initiate the Phase I study of vutrisiran in combination with pozelimab, having filed for the respective study. Finally, we hope you will join us for our remaining RNAi roundtable discussions focusing on lumasiran, vutrisiran, and our TCR program, slated for later in August and September. Let me now turn it back to Christine to coordinate our Q&A session. Christine.

Thank you, Yvonne. I just wanted to quickly acknowledge the sound issue with Barry’s prepared remarks; there were some storms rolling through his area that impacted the audio quality, and we plan to have Barry rerecord his remarks for the replay of this call. So, Operator, let’s now open the call for questions to those participating. We would like to ask you to limit yourself to one question each and then get back in the queue if you have any additional questions.

Thank you. We will now take our first question from Paul Matteis from Stifel. Please go ahead. Your line is open.

Great. Thanks so much, and congrats, Barry. You will definitely be missed, and Yvonne, congratulations to you as well. I guess, just a couple of quick commercial things. So on the dynamics that impacted ONPATTRO this quarter, you grew patients on drug, but revenues were down. As you consider inventory net price while expanding globally and the compliance situation in the second half, given the pandemic, can you help us understand how this variable appears, perhaps, in July and what you expect later this year? Then on the commercial transition, it would be helpful if you could comment on your confidence at GIVLAARI's launch given the considerable administrative work required to find patients while we ramp up. So how do you manage that transition, in that context? Thanks.

Thanks, Paul. Great question. Jeff, do you want to start, and then maybe Andy can comment as well on some of the emerging Q3 dynamics in our performance? Jeff?

Yes, certainly. Barry made a few comments in his prepared remarks, and I would like to reiterate that we observed some encouraging signs towards the end of Q2 and into Q3, particularly concerning genetic testing. We have seen recovery rates that are close to pre-pandemic levels. We're observing improvements in adherence, which was a major headwind we faced earlier in the quarter in the U.S. Additionally, there was a question about inventory destocking. We ended up at the lower end of the range, with our distribution partners maintaining an inventory of one to three weeks, and we closed Q2 at just one and a half weeks. So we could see some build in the second half of the year.

Great. Andy, do you want to add anything further about the dynamics as we entered Q3?

Sure. Paul, as you pointed out, even amidst the healthcare shutdown in the U.S., we were able to grow patients on ONPATTRO. That said, adherence remained the primary driver of the demand impact, as Jeff highlighted. In June and July, we observed dramatic progress in both patient flow back to healthcare systems and improvements in adherence rates across all sites of care.

Yes. And I would like to add that, for example, Paul, PYP scans are essential for diagnosing disease in patients with polyneuropathy, and our July PYP scans were on par with those we recorded in January. This is a promising sign. Now regarding GIVLAARI, Barry, could you elaborate on our confidence in the second half of the launch given the pandemic's ebb and flow?

Absolutely. Paul, great question regarding GIVLAARI. As I mentioned, in rare diseases, diagnosis rates are low because physicians often overlook them, resulting in new patients coming from three buckets: transitions from EDP, known sites, and newly diagnosed patients. We prepared extensively for digitization and virtualization for GIVLAARI given the diverse prescribing landscape and the fact that patients can be geographically dispersed. Our virtual launches have shown strong results, and despite the restrictions posed by COVID, we have successfully interacted with healthcare providers and engaged with patient advocacy groups to help facilitate access to payers.

Moreover, the current situation has pushed healthcare providers to transition to online platforms, creating more receptiveness to digital interactions. While these initiatives haven't reached the effectiveness of in-person engagements, we have leveraged this to aid patients as best as we can during this time. In addition, GIVLAARI has demonstrated the capacity to lower hospitalization rates related to annualized attack reductions in clinical studies, which holds additional potential in the current climate. Paul, does that address your questions?

Absolutely. Yes, it does. Thanks so much for the added color. I appreciate it.

We will now take our next question from Alicia Young from Cantor. Please go ahead. Your line is open.

Hey guys, thanks for taking my question, and congrats Barry and Yvonne. We look forward to working with you further; it’s always a pleasure. I’d like to ask about the dynamics concerning hemophilia as you position patisiran in light of the gene therapies emerging. I recognize that it's Sanofi's product, but I am curious about your perspectives as we approach data release. Thank you.

Absolutely. Let me start with some comments, and then I would welcome Akshay’s insights as well. The hemophilia market is multifaceted, with numerous players and more than a dozen available products targeting hemophilia A or B. Patisiran, in our view, stands out as the only once-a-month subcutaneous treatment that has shown potential benefits in annualized bleeding rates, and we believe this positions the product uniquely. Should the supportive evidence hold in the Phase III trials and safety continues to prevail, this could make our offering significant within that landscape. Akshay, would you like to add anything further?

Certainly. The hemophilia field is dynamic, with promising developments in gene therapies. However, safety remains paramount, and this patient population is particularly sensitive given historical issues with safety events. While the gene therapy market has completed significant studies, long-term durability and safety remain subjects for scrutiny. Patisiran presents a compelling alternative in terms of convenience and safety, showing efficacy for patients in this sector. We look forward to seeing the Phase III data early next year, as you pointed out, Alethia, which will be exciting.

Yes, indeed. We believe that 2021 will bring exciting developments in this area. Does that satisfactorily answer your question?

Yes, very helpful. Thank you, guys.

We will now move to our next question from Anupam Rama from J.P. Morgan. Please go ahead. Your line is open.

Hey, guys. Thanks for your time today. Regarding APOLLO-B, what is the primary endpoint analysis? Given that there is a 12-month extension in the trial, will you be conducting this on a blinded basis, enabling you to obtain endpoints in a placebo-controlled manner, or will you mainly depend on vutrisiran for outcomes beyond 12-months? Thank you.

Yeah, Akshay, I think the APOLLO-B question is suited for you.

Right, Anupam. The principal focus for APOLLO-B will be on the 12-month analysis. Vutrisiran should yield data closely following the readout of the 12-month results for patisiran, and that will provide valuable information regarding morbidity and mortality over the long term.

I would just highlight that we are capturing not only mortality but also hospitalization data throughout the APOLLO-B study. While analyzing one year of treatment might not provide conclusive power to showcase significant results, we will certainly collect those data points.

Thanks for the clarification.

Thank you, Anupam.

We will now take our next question from Tazeen Ahmad from Bank of America. Please go ahead. Your line is open.

Hi, good morning, guys. Thanks for taking my questions. Just a brief one. With ONPATTRO sales now higher ex-U.S. compared to the U.S., do you think this is merely a short-term impact from COVID? Should we expect this trend to continue for the duration of the pandemic as a tangible factor in the U.S.? I’d like to also get your early insights on Regeneron opting in for your ALN-APP program. What are your plans for this program's development, and what do you foresee as an opportunity in IgAN?

Let me tackle the second part of your question about APP. This is our amyloid precursor protein program that they opted into, and we plan to have an IND filing or CTA by mid-2021. This will mark our first CNS program to enter clinical development. Now regarding ONPATTRO, Barry, would you like to address the first question regarding ONPATTRO's performance in the U.S. relative to international regions?

Absolutely. As previously mentioned, we updated our guidance based on our belief that we are entering a recovery phase. In particular, we foresee growth within the U.S. market. It’s essential to note that the U.S. is fundamentally a patient-find market at this juncture. Patients are now flowing back into healthcare systems, and we anticipate that the proportion of patients registered with polyneuropathy will continue to grow. Our outlook for all regions worldwide remains positive.

Absolutely, and Jeff, do you have anything to add?

No, I have nothing to add.

Yes, I got it; thank you.

We will now take our next question from Maury Raycroft from Jefferies. Please go ahead. Your line is open.

Hi everyone. Good morning and congratulations on the progress. Thanks for taking my question. First, regarding APOLLO-B, as you opened up the floor regarding the endpoints in Phase III, I'm curious if you are collecting data from commercial ONPATTRO patients that would offer insight applicable to APOLLO-B, and whether these data can be shared eventually. Can you comment on key baseline similarities between patients using commercial ONPATTRO versus those enrolled in APOLLO-B?

That is an excellent question. I’d like to provide context and then perhaps Akshay can add details too. In the original Apollo study, APOLLO-A, exploratory data indicated potentially encouraging findings for the cardiomyopathy subset, which underpins our confidence in APOLLO-B. To your point, interesting investigational data regarding patients with cardiomyopathy who are also treated with polyneuropathy are emerging, and this has been published by various centers. Barry, is there anything to add from a commercial standpoint?

No, I think you covered it well.

Yes, it certainly does. Thank you for the thorough answer. Additionally, on ALN-AGT, I know you registered top-line data on 48 patients; you plan to recruit upwards of 184 for that study. Any further thoughts on the patient enrollment targets and insights into data availability as we conclude the year?

Yes, our studies are typically designed with the flexibility of optional cohorts for adding additional subjects. We have not finalized what the completion timeline for this study will look like yet, but we continue to gather important data, especially regarding potential combinations with other antihypertensive medications, addressing both efficacy and safety. Akshay, do you wish to add anything else?

Nothing additional from my end.

That is helpful. I appreciate you taking my questions.

We will now take our next question from Ritu Baral from Cowen. Please go ahead. Your line is open.

Hi guys, thanks for taking my question. Barry, it’s been great collaborating over the years—best of luck—Yvonne, congratulations as well. I wanted to inquire about trends concerning home administration for ONPATTRO. Are there distinctions observed between what's happening in the U.S. versus Europe? What changes are being implemented in the U.S. regarding allowances for COVID and reimbursement? Could we expect better trajectories in the future?

That is an important question. Barry, could you share a global perspective on home infusion and then perhaps Andy could touch on the U.S. dynamics?

Yes, absolutely. Home infusion has become a critical care path utilized throughout the pandemic. The percentage of home use increased dramatically; previously, it was 17% pre-pandemic and has now risen to about 35%. In France, we’ve reported significant patient participation in home-infusion programs despite local COVID-19 cases. The U.S. has also seen similar increases, with double the percentage from 9% to around 20%. We are successfully transitioning patients to home infusions without significant dose interruptions.

Yes, in the U.S. specifically, we doubled the percentage from our Q4 2019 data, moving from 9% to roughly 20% currently, and we expect this trend to grow. Our teams have focused extensively on site of care optimization since COVID began, both through homecare channels and increasing local infusions if larger institutions are not viable. This trend should beneficially change how patients perceive home care.

And could you elaborate on reimbursement for home settings?

The growth we observe remains continual as the pandemic ebbs and flows. Many patients have transitioned toward home infusion. When possible, there are instances of patients returning to local infusion centers, but many patients enjoy the flexibility and social aspects of these therapies.

Yes. Ritu, does this address your inquiry?

Yes, thank you for your insights.

We will now take our next question from David Lebowitz from Morgan Stanley. Please go ahead. Your line is open.

Thank you for taking my question. Given your experiences thus far with GIVLAARI, have you made any decisions regarding lumasiran in terms of what to retain and what to modify considering the market's demands?

That is an informative question, David. Let me make some initial comments, and perhaps Barry can contribute further. Lumasiran, similar to GIVLAARI, targets a devastating condition with rare disease implications. Both face challenges related to prevalence and patient diagnosis. We are committed to delivering meaningful value through our medicines and proactively engaging with payers, establishing value-based agreements. Our approach employed for ONPATTRO and GIVLAARI will certainly apply to lumasiran as we prepare for its launch. Additionally, skills in digital and virtual care fostered while targeting COVID has notably boosted patient reach and finding strategies.

Moreover, with the digital and virtual pushes in place, we’ve become adept at optimizing sites of care and identifying new patient referrals, especially in diseases like PH1 where identification rates remain low. This is particularly beneficial given that many patients are home-tested during COVID.

David, does that clarify your question?

Yes, it does. Thank you for addressing my inquiries.

We will now take our question from Vincent Chen from Bernstein. Please go ahead. Your line is open.

Thank you for taking my question. Two inquiries—one commercial and the other R&D-related. Regarding GIVLAARI, we recognize the lack of guidance, but we are curious about the trajectory of start forms from Q2 to Q3. Incremental starts slowed in Q2 when compared to Q1, which stems from earlier patient bolus. Additionally, on the R&D side, concerning ALN-APP IND filing, watching developments concerning the DnA delivery. What obstacles remain before you can initiate human trials?

Let’s kick-off with ALN-APP. Akshay, can you speak to the readiness for the trial's initiation?

Definitely. We are pleased with our progress on ALN-APP; we are in an advanced stage. Next, we need to finalize both the toxicology and CMC packages. Our previous regulatory interactions have been fruitful, and we aim to formalize our IND filing in mid-2021.

Let's turn to your ONPATTRO revenue. The commercial landscape may impact GIVLAARI this quarter.

As we devised answers for incremental commercial forms—which prompted questions throughout Q3—expect a gradual build-up in trajectories as patients start again.

Thank you; that has been across both inquiries.

We will now take our next question from Salveen Richter from Goldman Sachs. Please go ahead. Your line is open.

Good morning. Thanks for taking my question. In terms of competitive dynamics in TNH, what are your considerations going into the upcoming studies, and what would be considered meaningful for competitive differentiation? Also, based on your research efforts across various tissues, where do you feel the most optimistic?

Great questions, Salveen. Let me start, after which Akshay can speak further on combination approaches and the exciting extras beyond hepatocytes. The combination research with Regeneron on different functionally awarded pathways will be a key focus as we introduce novel therapies that may reshape treatment options for patients with hemophilia. We are excited about the synergy between our RNAi therapy and antibodies. In a larger context, let’s look into our work regarding CNS development—and how it represents an opportunity for expanding therapeutic market access—focusing on instances like Huntington’s or Parkinson’s.

Indeed, frequent presentations for these combinations could offer better efficacy overall—combining our approaches to enhance quality of life and minimize the need for transfusions is critical. We're pursuing extensive trials to explore these synergies effectively, ensuring aggregated data solidifies our foundations in CNS development.

It's undoubtedly an exciting time for increasing engagement with CNS and non-hepatic programs, as we expect meaningful outcomes with ongoing research.

Thank you!

We will now take our next question from Gena Wang from Barclays. Please go ahead. Your line is open.

Thank you for taking my question! And Barry, it’s been a great opportunity working with you, best wishes on your future journey. Yvonne, I am looking forward to collaborating with you in the future. Two inquiries - firstly, ONPATTRO, what contribution does Japan make to the revenue? Secondly, on vutrisiran, how does the COVID-19 impact data collection?

Hi Gena, we don’t disclose revenue by country specifically, but I can say Japan made a meaningful contribution to our overall growth outside the U.S. in Q2. As mentioned in the prepared remarks, Japan has now become our second-largest market for ONPATTRO, as reflected in dollar sales from Q2 results.

Apart from that, throughout the COVID-19 phase, for both vutrisiran and patisiran, we've prioritized maintaining integrity while conducting studies, enabling us to address patient needs through various telemedicine initiatives by remotely engaging with patients when necessary. More importantly, we have seen enrollment trends pick up efficaciously in recent months, demonstrating our commitment to patient-centric strategies.

Thank you!

We will now take our next question from Alan Carr from Needham and Company. Please go ahead. Your line is open.

Hi, thanks for taking questions and congratulations, Barry! I was wondering if you could provide an update on ALN-HSD for NASH with regard to new strategies for differentiating your approaches?

Thanks, Alan! The main goal is to bring ALN-HSD into patients by showcasing its unique mechanism targeting HSD17B13, hypothesizing that a genetic validation of the target will provide safety and efficacy advantages compared to other NASH strategies that have faltered. We will hope to gather comprehensive data during the early clinical stage combined with exploratory biomarker assessment to ensure that we fully capitalize on the potential of the drug. Thanks for the question!

Thank you, Alan.

We will now take our next question from Mani Foroohar from SVB Leerink. Please go ahead. Your line is open.

Thanks for having me on the call, and congrats on everything, Barry, Yvonne! My question relates to how ONPATTRO managed engagement during the pandemic. Given the unique nature of the asset, is there potential to explore catch-up dosing for those who could benefit rather than solely adhering to label guidelines? How would you gauge adherence moving forward? Additionally, pertaining to HELIOS-B, when could we expect a decision for voluntary interim analysis, and could you provide a timeline for that?

This is a complex situation. Matters related to ONPATTRO would likely remain aligned with the expectations of the drug's prescribed protocol but currently are targeted at patient adherence following label parameters. As we transition out of the pandemic's early waves, we certainly aim to restore patients returning to their original drug schedules. As for HELIOS-B, it’s crucial to confirm statistical design and compliance, and it's something we take preliminary analysis well ahead concerning IR; we’ll remain focused on the forthcoming timeline, while interventional considerations will be definitive.

We regard HELIOS-B as a critical investigation and analysis of ongoing endpoints over the course of the next few months. In conjunction with APOLLO results, stable trial integrity across both studies will remain beneficial.

Does that help clarify your questions, Mani?

Yes, it does. Thank you for your answers.

We will now take our final question from Navin Jacob from UBS. Please go ahead. Your line is open.

Hi everyone. Thanks for taking my question! Just regarding ONPATTRO, Yvonne mentioned combination therapy; how does that work in terms of percentage? Are any observations around patient outcomes when administered in polychronic protocols versus monotherapy?

That is an important inquiry; the patient-monitored data indeed shows we’ve seen upwards of 15% to 30% of active cases on combination therapy right now, which might see further growth as providers become more accustomed to utilizing multiple therapies for optimal outcomes. In our preliminary published data from an open-label study, we recorded combination safety levels comparable to monotherapy, keeping close tabs on efficacy remain critical as it unfolds further.

Thanks for that; and on pricing, how should we approach overall pricing trends playing out through the rest of the year?

The slight uptick in gross-to-net deductions is seen as a headwind this quarter; however, we expect that to stabilize across the mid-20s region for 2020, as we did see this reflected in both ONPATTRO and GIVLAARI. Overall movements won’t drastically shift, given what we experienced last year.

Does that address your questions?

Yes, that is clear. Thanks again!

To conclude our session, I want to thank everyone for participating and reiterate our excitement for Alnylam's achievements. Barry, best wishes as you move forward, and Yvonne, congratulations on your expanded role. Until next time, please stay safe!

Ladies and gentlemen, this concludes today’s call. Thank you for your participation. You may now disconnect.