Alnylam Pharmaceuticals, Inc. Q4 FY2020 Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the Alnylam Pharmaceuticals Conference Call to discuss Fourth Quarter and Full Year 2020 Financial Results. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the company’s request.

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; Tolga Tanguler, Chief Commercial Officer; Akshay Vaishnaw, President of R&D; Jeff Poulton, Chief Financial Officer; and Yvonne Greenstreet, President and Chief Operating Officer. In addition, Andy Orth, Senior Vice President and Head of the U.S. Business, is on the line and available for Q&A. For those of you participating via conference call, the accompanying slides can be accessed by going to the Events section of the Investors page of our website investors.alnylam.com/events. During today's call, as outlined on slide two, John will provide some introductory remarks and provide some general context. Tolga will provide an update on our global commercial progress. Akshay will review recent clinical and preclinical updates. Jeff will review our financials and Yvonne will provide a brief summary of upcoming milestones, before opening the call to your questions. I would like to remind you that this call will contain certain remarks concerning Alnylam's future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the 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 recently quarterly reports on file with the SEC. In addition, any forward-looking statements represent our views only 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 update such statements. With that, I'd like to turn the call over to John.

Thanks, Christine, and thank you everyone for joining the call today. Despite the challenges we all faced in 2020 with the COVID-19 pandemic, Alnylam had one of its strongest years ever as a successful global commercial organization with a highly productive R&D platform. We delivered on our commercial expansion, growing top line product revenues by over 100%, driven by strong continued execution for ONPATTRO and GIVLAARI. We continue to advance the pipeline, which includes programs across both rare and common disease populations. And we remained focused on financial discipline to help us reach our goal of achieving a self-sustainable financial profile.

Thanks, John and good morning everyone. I appreciate the warm welcome, and couldn't be more excited to join the Alnylam team. Let's get started with a review of our commercial performance. For ONPATTRO, we achieved $90.4 million in global net product revenues in the fourth quarter, representing approximately 10% quarter-on-quarter growth compared with Q3. And we achieved $306.1 million in global ONPATTRO revenues for the full year 2020.

Thanks Tolga and good morning, everyone. I'll start with our efforts in ATTR amyloidosis where we're advancing our two product candidates patisiran and vutrisiran. ONPATTRO is currently approved in multiple markets around the world to treat the polyneuropathy associated with hereditary ATTR amyloidosis. We're committed to expanding the product's label for the treatment of cardiomyopathy in both hereditary and wild-type ATTR amyloidosis patients.

Thanks, Akshay and good morning, everyone. 2020 was an unprecedented year that underscores Alnylam's strong commercial capabilities and operational excellence, as we delivered robust top line growth while managing disciplined investment across our business. After commenting on our fourth quarter and full year 2020 results, I will also provide our financial guidance for 2021. As Tolga highlighted, U.S. sales of ONPATTRO increased 10% versus Q3 2020, and were impacted by the following: Patient demand increased 13% driven by the addition of new patients on therapy, with patient compliance remaining consistent with Q3 when we returned to pre-pandemic levels. Inventory destocking during the quarter compared with modest stocking in Q3 reduced reported growth during the quarter. We ended the quarter with just over one week of inventory in the channel in the U.S. We're really pleased with the continued strength in our U.S. results, with two consecutive quarters of double-digit growth, following a pandemic-challenged Q2 and with Q4 sales representing the highest level since launch. In our international markets, ONPATTRO performance remained strong with growth of 9% versus Q3 2020, primarily driven by increased patient demand broadly across Europe and Japan. Additionally, there was a modest benefit from inventory stocking in Japan at year-end. Turning to our results for GIVLAARI. We had a strong fourth quarter, generating $22.1 million in global net revenue, representing 33% growth compared to the third quarter of 2020. Revenue in Europe during 2020, as expected, was primarily generated from two markets, Germany and France. As we saw with ONPATTRO in year two of its commercialization, as we secure pricing and reimbursement, we anticipate additional markets for GIVLAARI coming online across Europe and Asia in 2021. Turning now to a summary of our full P&L results for the quarter and full year. Total product sales for 2020 were approximately $362 million, which were more than double 2019 with ONPATTRO delivering more than 80% growth versus 2019 and GIVLAARI contributing $55 million in its initial launch year.

Thank you, David. I think that was you David. I think that's a good question. Obviously, GIVLAARI was really off to a good start and had a very strong year, its first full year of launch last year and we look forward to its launch into continued launch in 2021. And we do expect continued growth in 2021, driven not only by new patient finding, but significant geographic expansion that will be occurring by virtue of PNR. And also, approvals we expect in major markets like Japan in 2021. Let me turn it over to Tolga and Andy Orth maybe to comment further. Let's start with Tolga, anything to add to that?

Thanks, John. Good morning, David. It's great to see the strong performance of GIVLAARI, especially during the pandemic, which highlights the organization's capabilities in launching this product both in the U.S. and internationally. We do expect an approval in Japan as well. Overall, the trends look promising, and this reflects the value the medicine brings to patients who have previously gone without proper treatment.

Andy, anything to add to that?

Yeah. I would just add that we continue to be really excited about the opportunity. We still think this is a half-billion-dollar opportunity for the company globally. And the learnings we're gaining here, as we go through 2020, will hopefully allow us to accelerate that as we get into 2021 and 2022.

Right. Thank you. David, does that answer your question?

Thank you. Thanks for taking my question.

Thank you. Our next question comes from the line of Joel Beatty from Citi. Your line is now open.

Hi. Thanks for taking the question. I'm curious, could you share any insight into the ability to have combination therapy in TTR with any competing drugs in the U.S. and how that compares with ex-U.S. markets?

Yeah. That's a great question. A very important one and one that defines an important part of the dynamics of the ONPATTRO execution and market dynamics in the U.S. and rest of the world. So, why don't we go to Tolga to add some more color on that question?

Yeah. Would you be able to repeat the question again? I wasn't quite sure if you were asking about the sort of the concomitant use.

Yeah. Concomitant use of ONPATTRO with competing TTR agent, is that different in the U.S. versus ex-U.S.?

Right. No, it is. It is different. What we see in the U.S. in particular is that there's about 20%, 25% of the utilization of current ONPATTRO patients are actually also on tafamidis. We do see that in ex-U.S., we tend to see a much rapid switch from TTR stabilizers to silencers. That's what we've experienced. However, in some markets, we also see some minor level of concomitant use as well, when it comes to using a stabilizer than a silencer.

And just to emphasize the point, obviously, the use of ONPATTRO is for the treatment of the polyneuropathy that exists in these patients, which is where it's indicated. So, these are hereditary ATTR patients that have polyneuropathy and likely have a mixed phenotype, which is why they may be getting both drugs.

Absolutely. Yes.

Great. Thank you.

Thank you. Our next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open.

Good morning. Thanks for taking my question. I'm just curious if we're going to see an interim analysis here on HELIOS-B and when we can expect that and what we should expect to see.

Yeah. Great question, Salveen. So, just as a reminder, and I'm going to hand this over to Akshay in a second. But as a reminder, HELIOS-B is our randomized double-blind placebo-controlled study of vutrisiran compared to placebo on top of standard-of-care for the treatment of ATTR amyloidosis with cardiomyopathy. So that includes both hereditary as well as wild-type disease. The study is enrolling quite well. We are going to be enrolling throughout 2021, but we're really pleased with how well the enrollment is going. But your point about interim analysis, let's turn it over to Akshay.

Yeah. Thanks, Salveen. So, I think we have a wonderful option to do an interim analysis in HELIOS-B. There are a number of approaches we can consider. But importantly, we want to use all data elements to inform that interim analysis. And we have data from the original patisiran APOLLO study itself. We now have data from HELIOS-A, nine months to 18 in patients with mixed ATTR disease with cardiomyopathy, those were exploratory data on BNP, which we've shared showing improvement in BNP. And we're going to get 18 months data later in the year that will encompass, not just BNP and echo data, but some technetium scan data and also can be to test another element. So there are a lot of datasets coming, that continue to inform us about the potential for RNAi based approaches for ATTR cardiomyopathy. And most importantly, next year, as we've just guided, we'll get APOLLO-B data on the six-minute walk distance. And so, these are the elements that will go into our thinking. There are lots of options. We're excited about it and we will update you when we have finalized the approach.

Great. Does that answer your question, Salveen?

Yes. Thank you.

Excellent. Thank you. Our next question comes from the line of Paul Matteis from Stifel. Your line is now open.

Thank you for taking my question. I wanted to ask about the overall pipeline. Last year, AGT gained significant attention. If you had to choose one of your earlier programs from R&D Day or within the CNS pipeline that isn't being discussed much right now, but you believe could be significant by the end of this year or early next year, which would that be? Additionally, I’m a bit surprised that there isn't anything in neuromuscular given the investment in conjugation approaches. Is that area of interest to you with RNAi? Thank you.

Okay. Great questions, Paul. So, I'm going to give you my view and then we'll go to Akshay and then we'll go to Yvonne. So you get three different perspectives on it. And then, we'll come back and Akshay will address the question on neuromuscular. Look, from my perspective, a program in our pipeline that, I think, we'll get a lot of attention this year is ALN-APP. That's our RNAi therapeutic targeting amyloid precursor protein. It's our first CNS program. It's really going to be a defining moment for extra hepatic delivery of RNAi therapeutics. And we're leading the way on the translation of this remarkable technology for the treatment of neurodegenerative diseases, where there's just enormous unmet need. And so, I think that's going to be a landmark program for the field and for Alnylam and for the future of our pipeline. So that's my pick. Let's go to Akshay next.

I was going to choose that. Okay, I'll choose something else. We have many interesting targets we’re addressing to meet a significant unmet medical need. I trained as a rheumatologist, and the SDH program, which we highlighted at R&D Day, will focus on gout. Gout is a very common global condition that not only affects the joints but can also have detrimental effects on the kidneys and their function. This is a crucial disease that is rapidly becoming more common. We are optimistic about the animal data, which shows over 95% reduction at the target SDH, alongside a more than 50% decrease in peripheral blood urea levels. The Phase 1 trials will be very telling, helping us understand how to best position ourselves to assist the most patients. As we expand into common diseases, this is another aspect in addition to AGT and the NASH programs like SDH. John's mentioned APP and others as well. So, I would choose the SDH program. Yvonne?

Yvonne?

Okay. Well, I'm going to pick the HBV program for three reasons. One, HBV is enormous opportunity. It's a disease that afflicts close to 300 million people around the world. So, incredibly important. Second reason is I think the encouraging base that we've had from our Phase 2 study with the one and a half log reduction in HB surface antigen. And obviously, in partnership with Vir, that's now being studied in combination. And I think has the opportunity to affect functional cure for these patients, which would be absolutely tremendous. And then the third reason is the fact that we have a 50/50 three option and a right price to Phase 34. So, I think this could start some kind of program that we spend a little bit more time talking about it as the year goes on.

Absolutely. And we're encouraged by the progress that Vir has been making. And I'm sure there'll be quite a bit of new data this year on that program. So, Akshay, do you want to handle the neuromuscular question?

We are making significant progress in neuromuscular diseases. Specifically, our efforts in ATTR amyloidosis focus on the polyneuropathy aspect, which is a type of peripheral neuropathy and qualifies as a neuromuscular disorder. This is particularly relevant in hereditary cases, and we are increasingly hearing about neuropathy in the wild type, which is also important to address. ONPATTRO is approved for hereditary polyneuropathy in ATTR. We plan to initiate a study called HELIOS-C later this year with vutrisiran to prevent the onset of hATTR amyloidosis, and more information will be provided on that soon. Additionally, we are involved in programs for ALS, where there are several genetically validated targets we are exploring in collaboration with Regeneron. We are also working on Myasthenia Gravis with Cemdisiran and Pozelimab targeting C5. We will share more details about the collaborative programs with Regeneron later this year. Moreover, we are engaged in research and preclinical work on various other neuromuscular disorders that we will discuss once we have more mature data. There are ongoing programs focusing on other conditions, including common inherited peripheral neuropathy, indicating that we have a lot happening in the neuromuscular disease space. We are excited about the advancements we have made, particularly in addressing hATTR amyloidosis polyneuropathy.

Thanks, Akshay. Paul, does that answer your question?

Yeah. Thank you.

Thank you. Our next question comes from the line of Tazeen Ahmad from Bank of America. Your line is now open.

Hi, guys. Good morning. Thank you for taking my question. Wanted to get your thoughts on how you think the ATTR market in general is developing? Do you have a better sense of how much of being addressable patients have been diagnosed, and how the stabilizers are helping to develop that market? Thanks.

That's a great question, Tazeen. We have a multi-product, multi-year perspective on the broader ATTR franchise at Alnylam, where we aim to be an industry leader, providing patients with innovative medicines. Currently, we have one approved product for treating the polyneuropathy associated with hereditary ATTR amyloidosis. ONPATTRO has made a strong entrance into the market and is leading in this area. We're very pleased with its performance and anticipate continued growth in the polyneuropathy segment. Additionally, we recently shared positive Phase 3 data with HELIOS-A, which will allow us to introduce vutrisiran as a once-quarterly subcutaneous treatment, with the potential to extend that to a once-every-six-months drug through further efforts. We expect approval next year for ATTR polyneuropathy, which we believe will broaden the treatment opportunities beyond ONPATTRO. Furthermore, as Akshay mentioned earlier, we plan to explore the APOLLO-B study in the middle of next year, pending positive data on cardiomyopathy for both wild-type and hereditary forms. This represents a significant multi-year growth opportunity for our innovations in treating this disease. Tolga, would you like to add anything? Andy, would you like to provide your insights on how we foresee this evolving over time?

No, I think you expressed it very well. We definitely see this category changing over time. As mentioned, we now have an indication with ONPATTRO, which is leading the market for silencer therapy in polyneuropathy. However, we recognize that there are essentially two different areas to consider. Polyneuropathy is a rare disease with lower prevalence due to its hereditary nature. In contrast, we do not yet have an indication for cardiomyopathy related to wild-type. The diagnostics are likely following a similar path, mainly through an affordable PYP scan. This access has greatly enhanced our capacity to diagnose more polyneuropathy patients. If HELIOS-A and APOLLO-B are successful, we will be able to tap into a much larger cardiomyopathy segment. From Alnylam's perspective, the success we are showing with ONPATTRO and its leading position in polyneuropathy is an encouraging sign for how we can engage in this market and provide effective treatments for other segments if our products receive approval. Andy?

Yeah. And just to add, the hereditary and the wild-type markets are in the very early stages of their growth for what we expect them to be. And that's going to happen over the next one, two, five to 10 years. And as John and Tolga highlighted, our portfolio that we're going to bring to bear here puts us in an excellent position. So, we're really pretty excited about it.

And Tazeen, I agree with everything that Tolga and Andy just said. I have often made the analogy of where the ATTR marketplace will go over time to what happened with multiple sclerosis, and with many products, many mechanisms of action and obviously major patient impact at the end of the day, along with obviously significant revenue and overall value of that market. So, I think you will see that materializing in a way that will accommodate multiple opportunities for patients at the end of the day. And Alnylam is going to be a major leader in this space.

Okay. Thank you.

Thank you.

Thank you. Our next question comes from the line of Ritu Baral from Cowan. Your line is now open.

Hey, guys. Thanks for taking the question. I'm going to be upfront. It does have a couple of different parts, but it's all on ONPATTRO performance, which continues to be really strong. One, how much does home infusion present a tailwind to what we've seen over, especially over Q4, and long-term, can you maintain coverage of home infusion? Are you planning on potentially expanding the sales effort with the vutrisiran approval in early 2022? And then lastly, just any color on a policy Akshay, you sort of threw it out there, prevention of symptoms, but anything else you can say about that?

Okay, Akshay, could you briefly address the HELIOS-C question? After that, we'll give Tolga and Andy some time to consider the ONPATTRO inquiries before moving on to them. So, Akshay, please go ahead.

Sure. When we examined the original APOLLO data, it was evident that there was a significant reduction of TTR, around 80%, which led to impressive outcomes for polyneuropathy and cardiac aspects in those with mixed disease. The drug was approved for treating the polyneuropathy of hATTR, which is appropriate. However, upon reviewing the detailed data, we found that patients with very early disease and a lighter disease burden fared exceptionally well, with their M&A scores dropping to single digits, nearly zero. This sparked the hypothesis that administering the drug even before the apparent onset of disease in patients with minimal or no evident polyneuropathy could prevent the development of symptomatic disease. We are quite optimistic about this possibility. Additionally, patients are now being diagnosed with TTR deposits in the heart prior to the onset of clinical disease, identified through technetium scans. This presents a reasonable hypothesis, one that seems promising. If we can significantly lower TTR levels, we believe we can greatly reduce the occurrence and onset of this disease. Therefore, we are working on this and plan to initiate a study called HELIOS-C with vutrisiran later this year, utilizing a subcutaneous injection given every six months. More details will be shared soon. It is indeed an exciting hypothesis, especially in the context of a rare disease, to have the opportunity to potentially prevent the onset of symptoms for patients.

Great. And let's go to Tolga first on the commercial questions on ONPATTRO, and then vutrisiran and the sales effort. Tolga?

Thank you, John. That's a great question, and you're correct. We're very happy with the quarter-over-quarter growth of ONPATTRO. This will be supported by ongoing patient identification efforts, as well as appropriate transitions from current treatments. Regarding patient access, we have noted a steady increase in the ability for patients to access home infusion, especially in the United States and Europe, despite the pandemic. These rates have risen, and we believe that both patients and healthcare systems have quickly adapted to provide alternative care locations and easy access to infusion clinics. We're glad to have the capability to either redirect patients to alternative care sites or offer our home infusion network, particularly in the U.S. and Europe. This is definitely a positive factor for us. Moreover, we have not observed any decline in our compliance rates, indicating that the pandemic did not negatively affect patient retention or compliance. Regarding your second question about expansion, we are always looking into the cardiomyopathy indication once it's approved. We're committed to ensuring effective communication with healthcare professionals about earlier indications and will continue planning for this. I'll pass it over to Andy to see if he has anything additional to share.

Thanks, Tolga. You accurately captured the situation with home infusion. We have it running smoothly and have maximized our commercially insured patients, and many are taking advantage of it. Regarding Medicare, the rule passed last year isn't particularly favorable for hospitals and some physicians, but we've managed to leverage it where possible. Our ability to infuse patients at common locations like infusion centers and hospitals is strong, and many patients prefer this option due to social factors or simply because they don't want someone in their home. As for your second question, were you asking about HELIOS-A in neuropathy or HELIOS-B in cardiomyopathy?

No, it's …

Yeah. It actually was for HELIOS-A. I'm just wondering if you are planning any commercial expansion just for vutrisiran and FAP even before your cardiomyopathy labels that come online.

Got it. And as you know, right, overlapping labels with ONPATTRO, and while we're not exactly releasing any plans on that front. We love the promotional efforts we've got out there today and are really excited about what HELIOS-A is going to bring to our portfolio.

Great. Okay. Good. Thank you, Ritu. We should move on to the next question I think.

Thank you. Our next question comes from the line of Anupam Rama from JPMorgan. Your line is now open.

Good morning. This is Tessa on the call for Anupam. Thanks for taking our question. As you consider launch dynamics between GIVLAARI and OXLUMO, what are the similarities and differences worth considering here? And then second part of the question is on GIVLAARI, anything more granular you can provide on your assumptions around 2021 U.S. versus the rest of world growth in 2021 versus 2020. Thanks so much guys.

Okay. Thank you, Tessa. Those are great questions. Obviously, I think we covered GIVLAARI as an introduction earlier. We're excited about this year as being the second full year of launch for that important medicine. And then in the case of OXLUMO, which only got approved in November of last year for the treatment of primary hyperoxaluria, this will be the first full year of launch. So, that's an exciting milestone. So, let's go to Tolga to answer this great question.

Sure. Thanks, John. If you look at both of those products and what they are addressing, both diseases are rare and very severe. As John mentioned, we had a strong year with GIVLAARI during the pandemic, and we have been able to reach many patients who were waiting for this therapy. We anticipate a similar situation with OXLUMO, considering the relevant number of patients worldwide. Therefore, from a business model perspective, we expect a comparable uptake for OXLUMO.

I was just — Andy, I was going to add. I guess one of the main differences here is that OXLUMO is going to be treating a lot of pediatric patients. And I also see patients with different populations that needs to be addressed. But sorry — Andy, over to you.

Yeah. The only thing I would add here is the level of excitement we are seeing right now in the PH1 communities, physicians, patients, patient advocacy groups, et cetera, is just incredible and frankly matches that we saw with GIVLAARI a year ago. So, we're off to a really, really good start. And as Yvonne mentioned here, this is a more so pediatric population than we saw with GIVLARRI early.

Terrific. So I think we have time for one more question.

Thank you. Our next question comes from the line of Gena Wang from Barclays. Your line is now open.

Thank you for taking my question. I have a broad question. Alnylam is clearly a leader in the RNAi field, and you've made significant progress in identifying key targets and candidates, some of which have already succeeded. Would you consider applying this expertise to other technology areas, such as gene editing, where we could see some synergy?

Thank you, Gena. We are excited about the numerous prospects we have with RNAi for the foreseeable future. There's a lot of work to be done with this science and technology, and the potential for innovation is limitless. We will always explore other technologies that might complement our efforts, particularly in areas where we have a commercial presence, as we consider ways to strengthen and expand our leadership beyond a solely RNAi approach. We are currently presented with countless opportunities and have plenty on our plate. Now, I’ll turn it over to Yvonne to provide additional insights on this topic. Yvonne?

Yeah. No, that's great, John. Yes. So we do keep a careful watch on what's going on outside Alnylam as well, for sure. I think one additional point to make on gene editing that's probably where you were going, I think, this approach has a lot of potential for patients, I think it is still in the very early stages of clinical development. There's a lot that we need to learn about long-term durability and efficacy and safety, et cetera. So, we continue to stay engaged and be aware of what's going on. But as John says, we have an awful lot to do with what we have in our hands at the moment.

Terrific. Thank you, Yvonne. I agree. So I think that's the last question, right, Christine?

Correct.

Okay. Good. All right. So, let me then just close. I want to thank everybody for joining us on the call. We're obviously very pleased with our results for the fourth quarter. And what we did in 2020 was a remarkable year, despite the headwinds from COVID-19. But we're now on a new chapter with Alnylam P5x25, aiming to build a top five company in market capitalization over the next five years, with remarkable science and technology and innovation. So, thank you all and have a great day. Bye-bye now.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.