Alnylam Pharmaceuticals, Inc. Q2 FY2021 Earnings Call

Ladies and gentlemen, thank you for standing by. And welcome to the Alnylam Pharmaceuticals Q2 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I'd now like to turn the call over to your, Christine Lindenboom. You may begin.

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. 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 investor.alnylam.com/events. During today's call, as outlined in slide two, John will provide some introductory remarks and 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'd 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 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 recent annual 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 update such statements. With that, I'd like to turn the call over to John. John?

Thanks, Christine, and thank you everyone for joining the call today. In the second quarter and recent period, we made tremendous progress bringing RNAi therapeutics to patients around the world with our commercial, medical, and R&D efforts while delivering solid financial performance. To start, our teams delivered steady ongoing commercial execution and continued revenue growth, including 12% quarterly growth for ONPATTRO strengthening of GIVLAARI performance and the continued impressive uptake for OXLUMO. On our pipeline efforts, highlights include excellent progress building our ATTR Amyloidosis franchise. We completed enrollment in the APOLLO-B Phase 3 study of Patisiran and expect to complete enrollment in the HELIOS-B Phase study of Patisiran within the next two weeks, significantly ahead of schedule, with more than 600 patients already enrolled.

Thanks, John, and good morning, everyone. We're very pleased with our second quarter performance. For ONPATTRO, we achieved $114 million in global net product revenues, representing approximately 12% quarter-on-quarter growth compared with the first quarter. We ended the quarter with over 1,725 patients on commercial treatments. In the US, we continue to see strength on many fronts, including a 12% growth in demand and notable growth in new prescribers. We have also seen encouraging signs of the healthcare system reopening. For example, in the second quarter, we received more stock forms for ONPATTRO in the US than we have seen since early 2019. We're also seeing an uptick in face-to-face interactions between our field team and healthcare professionals, indicating that the healthcare system is continuing to open up. Further, speed to patient diagnosis is continuing to improve with ongoing growth in the use of QRT scans, which is often the start of the patient journey toward a polyneuropathy diagnosis. Patient compliance also remains high and stable at pre-COVID levels. We continue to observe a trend in the concomitant use of ONPATTRO to treat the polyneuropathy of hATTR amyloidosis, along with the use of hATTR stabilizer to treat the cardiomyopathy of this disease in mixed genotype patients. Regarding the rest of the world, market access has now been achieved in over 30 countries worldwide. In Q2, we saw significant 17% quarter-on-quarter growth in our rest of world markets, with particular strength in Europe and Canada. We're also observing a good balance of first-line use and switches from stabilizers in these markets.

Thanks, Tolga, and good morning, everyone. I'll start with our efforts in ATTR amyloidosis, where we're advancing two clinical stage 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 products labeled for the treatment of cardiomyopathy in both hereditary and wild-type ATTR amyloidosis patients. To this end, we're conducting the APOLLO-B Phase 3 study. During the second quarter, we completed enrollment in APOLLO-B and expect to report top-line results in mid-2022. We are also advancing Vutrisiran, an investigational therapy delivered by a quarterly subcutaneous injection, which is also in development for ATTR amyloidosis. Here, we're conducting two Phase 3 studies. The first is HELIOS-A, evaluating Vutrisiran in hATTR amyloidosis patients with polyneuropathy. At the AAN conference in April, we presented our positive nine-month HELIOS-A results. Based on those results, we submitted our NDA to the FDA, which was accepted with a PDUFA date of April 14, 2022. Patient dosing continues in HELIOS-A, and we look forward to reporting top-line results from the 18-month endpoint in late 2021, which will further characterize Vutrisiran's impact on exploratory cardiac endpoints. We plan to make additional regulatory submissions, including in the EU, in the late 2021 period based on the HELIOS-A results. The other Phase 3 Vutrisiran study is HELIOS-B, which is our ongoing Phase 3 cardiac outcomes study with Vutrisiran in hereditary and wild-type ATTR amyloidosis with cardiomyopathy. We're excited to announce that due to high interest amongst physicians and patients, we now expect to complete enrollment within the next two weeks, well ahead of schedule, with more than 600 patients randomized to date. HELIOS-B has a 30-month endpoint of all-cause mortality and CV events, and we expect the full results in early 2024. The study design includes the potential for an interim analysis, and we'll consider these results from APOLLO-B in alignment with regulatory authorities. Lastly, we're very excited about the potential opportunity for a biannual dosing regimen for Vutrisiran, which could further differentiate it from other products and provide yet another dosing regimen option for patients.

Thanks, Akshay, and good morning, everyone. I'm pleased to present Alnylam's Q2 2021 financial results, which reflect another strong quarter of operational excellence across the business. Turning to our results for ONPATTRO, we generated $113.8 million in net revenue for the quarter, representing 12% growth from the first quarter of 2021 and 71% growth compared with Q2 2020. This marks the fourth consecutive quarter of double-digit growth following one quarter of flattened growth that we experienced during the onset of the pandemic in Q2 of last year. US ONPATTRO sales increased 6% versus Q1 2021. An approximate 12% increase in demand drove this growth, representing acceleration from the 4% demand growth delivered in Q1, driven by the addition of new patients on therapy and continuation of greater than 90% patient treatment compliance. Demand growth was offset by a higher level of gross-to-net deductions and less inventory stocking in the quarter compared with Q1 2021. In our international markets, ONPATTRO performance remains very strong with growth of 17% versus Q1 2021 and 79% versus Q2 2020, primarily driven by increased patient demand broadly across our markets in Europe and Canada. Sales from our international markets comprise 54% of our global total in Q2, reflecting the benefit of our global commercial footprint.

Thanks, Jeff, and hello, everyone. Let me start by reviewing an exciting partnership we announced with PeptiDream. PeptiDream is an industry leader in the discovery and optimization of peptide ligands against a wide variety of receptors. Through this collaboration, we and PeptiDream will discover and develop peptide-siRNA conjugates to create multiple opportunities to deliver RNAi therapeutics to tissues outside the liver. The collaboration has the potential to create multiple training opportunities by targeting disease-causing mRNA transcripts across a wide variety of tissue types. Let me now turn to a review of our remaining goals for 2021. ONPATTRO within our TTR programs, we plan to present 18-month top-line results from the HELIOS-A Phase 3 study with Vutrisiran. We also plan additional regulatory submissions for Vutrisiran in the EU, Japan, and Brazil in late 2021. Based on the excellent progress in enrollment, we also plan to complete enrollment in HELIOS-B in the coming weeks, as we announced today. With Zilebesiran, as Akshay mentioned, we plan to present additional data from the Phase 1 study later this year, hopefully at the American Heart meeting in November, pending abstract acceptance, and we plan to initiate the KARDIA-2 Phase 2 combination study later this year as well. For Lumasiran, we plan to initiate a Phase 2 study for renal stone events in late 2021. We believe this Phase 2 study represents meaningful lifecycle management of OXLUMO with potential to significantly expand the overall opportunity. We also plan to submit supplemental regulatory applications in both the US and EU based on ILLUMINATE-C results. With ALN-HSD, we expect to report initial Phase 2 results in healthy volunteers from the Phase 1 study. Turning to cemdisiran for complement-mediated diseases, our partner Regeneron plans to initiate a Phase 3 study of the cemdisiran and pozelimab combination in myasthenia gravis, in addition to multiple Phase 2 studies in PNH. We believe the combination of cemdisiran and pozelimab represents an attractive therapeutic strategy for complement-mediated diseases. We're very excited to file our first CNS CTA for ALN-APP now expected in late 2021 for the treatment of dominant Alzheimer disease and cerebral amyloid angiopathy. This sets us up for potential initial PSC data in 2022. Given the exciting preclinical progress, we plan to advance ALN-XDH in development for the treatment of gout toward a CTA filing in late 2021. Let me now turn it back to Christine to coordinate our Q&A session. Christine?

We will now open the call for questions.

Thank you for taking my question and also congrats on the very strong quarter. So I have a big picture question: Alnylam has been very successful as a standalone company with an established platform, several approved drugs, and numerous high-quality pipeline assets. So just wondering going forward, are you willing to be under a bigger umbrella? Or do you want to continue being a standalone company and to grow into a top-five biotech company as your goal?

Hi, Gena. Thank you, first of all, for your comments on the quarter. And thank you for your comments on what we've been able to achieve as a company. I think it's fair to say that we believe we have a path forward as a company to build significant value. It's evident in the P5x25, five-year goals and plans that we outlined earlier this year, as to how we believe that we can build a top-five biotech company in market cap over the next five years through execution with our organic product engine and our capabilities to achieve sustainable innovation. So it's our plan to continue on that path. But we have a fiduciary duty to shareholders, and we will always consider that component as we have an obligation to our shareholders. But our plans right now are very focused on our P5x25 goals and our abilities to execute continuously on that sustainable source of innovation. So that's how we're focused, Gena.

Hey, guys, thanks for taking my question. You guys performed exceptionally well this quarter. I guess, I wanted to talk a little about how you view the investment and commitment to profitability as you start to undertake bigger programs like in hypertension and as you build your business. Do you see these as opportunities for potential partnerships, or do you plan to go at it alone?

Yes, first of all, thanks, Alethia, for the comments on the quarter. We're really pleased with the results, obviously a real credit to our overall organization for delivering as they did. We're excited about the opportunities for RNAi therapeutics in more prevalent diseases. The data with cemdisiran really points to the ability to reimagine the treatment of hypertension, a leading cause of cardiovascular morbidity and mortality around the world. How can you not get excited about transformational medicines that can make a fundamental impact on a major public health issue? We're excited about that direction; we have a great team and a proven track record of execution on the R&D side. There's simply no reason why we need any capabilities or funding from third-party partners. We are very thoughtful about how we balance our OpEx investments along with the growth in our revenues towards a financially sustainable profile. That's a core part of our strategy. Let me first start with Jeff, and then transfer over to Yvonne, to comment on our going forward views. But Jeff, do you want to talk first on the financials?

Yes, I think I agree with everything you said, John. One of the metrics of the P5x25 goals is getting to profitability across the period, and we're committed to doing that. From a commercial standpoint regarding cemdisiran, our hope is that we'll be able to leverage infrastructure that we hopefully will have built by then to support an expansion of the TTR franchise for successful APOLLO-B and HELIOS-B studies and to get into a larger cardiomyopathy footprint. So that's one factor.

And Yvonne, do you want to comment a little more strategically going forward? How we think through this?

No, I think both of you have covered this well. We believe we're a unique company. We have every intention of building a top-five biotech company and progressing all of our opportunities in a thoughtful fashion.

Hi, good morning, everyone. Congrats on the quarter and thanks for taking my question. I was wondering if you can discuss the parallels between zilebesiran and inclisiran. Is there anything additional you could say about the KARDIA-2 design, including whether it will be dosing every three months or six months? Lastly, could you provide any perspective on what the timeline looks like for both KARDIA-1 and KARDIA-2?

Fantastic. Let me start my comments. Akshay, you can chime in on some of the specifics of the KARDIA program and dosing regimen. Regarding zilebesiran, we're very excited and we believe it has great potential in reimagining the treatment of hypertension. The data indicate that we can create an attractive treatment option for hypertension, similar to inclisiran. Both have infrequent dosing regimens to control these leading causes of cardiovascular morbidity and mortality. The strategic importance of both efforts hinges on the exact endpoints measured in our Phase 2 studies being the same for Phase 3 trials. This de-risks the primary endpoint, so I believe we have a very attractive profile for zilebesiran. So with that, I'll hand it over to Akshay to discuss KARDIA.

Thanks, John. So, Maury, zilebesiran will execute two Phase 2 studies. KARDIA-1 is looking at zilebesiran as mono therapy in patients with mild to moderate hypertension involving around 400 patients. KARDIA-2 will evaluate zilebesiran in combination with other antihypertensive medications including Ras inhibitors, calcium channel blockers, and diuretics, with about 650 patients planned. More details will come later this year, but we're anticipating quick enrollment. We will be evaluating both three- and six-month dosing regimens in these studies to ensure we have a comprehensive look at pharmacology. We believe the rapid enrollment reflects the tremendous work of our team and the attractiveness of the hypothesis regarding Vutrisiran.

Good morning, thanks for taking my question. Given your agreement with PeptiDream, could you discuss extrahepatic targets that you're looking to target beyond CNS?

Thanks, Salveen. Let me start and then I'll hand it over to Akshay. We're excited about the agreement with PeptiDream because it represents a continued investment in extrahepatic delivery. Akshay, do you want to elaborate on how we view the future delivery systems and target tissues?

Of course, we aim to target a range of organs because RNAi pharmacologic activity can extend to any tissue in the body. We can target siRNA to specific cell types to achieve validated targets in many tissues. Our partnership with PeptiDream opens up new possibilities for targeting and broadening our focus beyond the liver. We have existing options in the CNS and ocular space and can expect to build upon those with PeptiDream. This collaboration is strategic in extending RNAi leadership, and we anticipate demonstrating broader efforts to deliver RNAi therapeutics across multiple tissues by the end of the decade.

Great, thanks so much. I was wondering if you could comment on the expansion of the executive chair role. Is there any relationship to the prior ONPATTRO investigation announced earlier this year? Also, could you comment on the APOLLO-B study in terms of the number of events concerning mortality and hospitalization?

I’ll address the first part, Paul, regarding Mike Bonny’s expanded role. This new position aims to strengthen our ethics and compliance function, an area we are committed to enhancing. Mike brings vast experience to this governance role. Akshay, can you address the APOLLO-B study?

Yes, Paul. The primary endpoint is the six-minute walk distance, which is how we powered the study from the start. We expect results in the middle of next year. The study is fully enrolled. It’s challenging to anticipate mortality and hospitalization specifics due to the study being blinded. We hope to identify positive trends from the data.

Hi guys, thanks for taking the question. Given the rapid timelines for HELIOS-B, especially relative to APOLLO-B, what are your current thoughts on a potential interim analysis? The Delta variant is approaching Q3. What might be the impact?

Regarding the interim analysis, we designed HELIOS-B with guidance from the FDA and EMA. An interim analysis could be beneficial, and we’ll guide that decision based on trends from APOLLO-B when results come in. Akshay, do you want to comment on the interim analysis aspect?

No, I think you covered it well.

Regarding the Delta variant, we’ve built capabilities that include alternative sites of care, allowing us to engage with patients despite challenges. We don't anticipate significant impacts but will remain vigilant given learnings from 2020. We’re focusing on maintaining our growth.

Our confidence is reflected in the new guidance we provided, which shows our commitment to continue performing well for the rest of the year.

Good morning. Given the rapid enrollment in HELIOS-B, what led to its quicker rate than expected? How do the enrollments compare with APOLLO-B in terms of patient profiles?

Great questions, Tazeen. Let’s pass them over to Akshay to address both.

The enrollment in HELIOS-B has gone extremely well due to the validated platform and great interest in TTR knockdown’s effectiveness in hATTR amyloidosis. We expect a high quality of enrolled patients, reflecting the attractiveness and capabilities of our clinical development team.

There should be no concern regarding the quality of enrollment in HELIOS-B.

Thanks for taking my question. Can you provide insights on the PeptiDream collaboration's advantages for targeting extrahepatic tissues? Also, what’s the potential for recovery in clinical volumes in the current environment?

Akshay, can you handle the PeptiDream question? Tolga, you can address Mani’s question on recovery.

We have established diverse delivery systems for RNAi therapeutics with PeptiDream opening new avenues for targeting various tissues. The collaboration will help expand our leadership in RNAi therapeutics.

Our growth has remained strong, with a 12% quarter-over-quarter increase. We've adapted to engage with healthcare professionals regardless of COVID challenges. We expect patient volume to improve as more individuals return to healthcare as restrictions ease.

The return of patients to the healthcare system over time will create positive tailwinds for future growth.

Can you provide more details on the IKARIA platform? What are the implications of it being long-acting and reversible? Also, what are Patisiran's market opportunities given the competitive landscape?

We are thrilled about the IKARIA platform. The scientific basis of it will be presented in detail at an upcoming scientific meeting. The mechanism allows for long action and reversibility of effects. Regarding Patisiran, there are meaningful market opportunities in both Hemophilia A and B despite increasing competition.

No additions, John. You covered it well.

I want to thank everyone for joining us today. We are pleased with our Q2 results and are looking forward to delivering our commitments in the next six months while focusing on our P5x25 goal, which is an exciting time for Alnylam.

Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.