Ionis Pharmaceuticals Inc Q3 FY2021 Earnings Call

Good day, and welcome to the Ionis Pharmaceuticals Third Quarter 2021 Financial Results Conference Call. As a reminder, this call is being recorded. And at this time, I would now like to turn the call over to Jennifer Capuzela. Please go ahead.

Thank you, Tom. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to view the press release and related financial tables we will be discussing today, including a reconciliation of GAAP to non-GAAP financials. We believe non-GAAP financial results better represent the economics of our business and how we manage our business. We've also posted slides on our website that accompany today's call. With me on this call this morning are Brett Monia, Chief Executive Officer; Beth Hougen, Chief Financial Officer; and Richard Geary, Executive Vice President of Development. And joining us for the Q&A portion of the call are Eric Swayze, Executive Vice President of Research; and Onaiza Cadoret, Chief Corporate Development and Commercial Officer. I'd now like to draw your attention to Slide 3, which contains our forward-looking statements. During this call, we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors contained in our SEC filings for additional detail. And with that, I'll turn the call over to Brett.

Thanks, Jen. Good morning, everybody, and thanks for joining us on today's call. In the second half of 2021, Ionis has made important progress on several fronts. We expanded our late-stage pipeline at the start of our Phase III core study of olezarsen, which we previously referred to as IONIS-APOCIII-L Rx. This study will evaluate olezarsen in patients with severe hypertriglyceridemia, an indication with an estimated 3 million patients or more in the United States. We completed enrollment in the Phase III NEURO-TTRansform study of eplontersen in patients with TTR polyneuropathy, putting us on track for data in mid-2022. And we are on track to initiate our Phase III study of donidalorsen, which we previously referred to as IONIS-PKK-LRx in patients with hereditary angioedema before the end of this year. We also advanced our commercial strategy and go-to-market initiatives in anticipation of Phase III data readouts and potential commercial launches of these programs. Additionally, we further increased investments in our LICA platform through our transaction with Bicycle Therapeutics. While tofersen missed the primary endpoint in the placebo-controlled Phase III VALOR study in patients with SOD1-ALS, we are encouraged by the totality of evidence in VALOR and the open-label extension, which showed signs of slowing disease progression in these patients. Importantly, Biogen is now actively engaged with regulators and other key stakeholders to determine the next steps for this program. Biogen also plans to expand its early access program to the broader population of people living with SOD1-ALS. And given the importance of treating patients early in their disease as reinforced by top line data from VALOR in the OLE, we are pleased that the ATLAS study presymptomatic SOD1-ALS patients continues as originally planned. Coming up in the next 12 months, we're looking forward to a number of key catalysts, including our presentation summarizing the Phase II results for donidalorsen in patients with hereditary angioedema at the ACAAI Annual Meeting on Sunday. And at our Virtual Investor Day event on December 9, we look forward to sharing our strategy, plans, and progress, bringing our most advanced programs to market and achieve commercial success. Importantly, we remain financially strong, on track to achieve our financial guidance and have the resources to meet our strategic objectives. And with that, I'll turn the call over to Beth to review our financial results. And Richard will discuss recent pipeline updates and upcoming pipeline catalysts. After Richard, I'll wrap up our prepared remarks before taking your questions. So now over to Beth.

Thank you, Brett. During the first 9 months of this year, Ionis earned $370 million in revenue and recognized $499 million in non-GAAP operating expenses, reflecting our commitment to advancing our wholly-owned pipeline and our technology. This resulted in a non-GAAP net loss of $131 million. SPINRAZA's global sales in the first 9 months of this year were $1.5 billion, and we earned nearly $200 million in royalty revenue from SPINRAZA, virtually all falling to our bottom line as profit. We are pleased with Biogen's ongoing work to further inform SMA treatment and address the remaining unmet needs of SMA patients of all ages. Biogen recently announced plans to initiate the ASCEND study to evaluate the potential of high-dose SPINRAZA to benefit patients previously treated with risdiplam. The DEVOTE study is evaluating the potential of high-dose SPINRAZA to demonstrate even greater benefit compared to the currently approved dose. The RESPOND study is evaluating SPINRAZA's potential to benefit patients who had a suboptimal response to gene therapy. Together with the substantial and growing body of evidence supporting SPINRAZA's proven profile and over 60,000 SMA patients in markets where Biogen has a commercial presence, we believe SPINRAZA will continue to be the market-leading treatment for SMA patients of all ages and types. TEGSEDI and WAYLIVRA generated nearly $50 million of revenue in the first 9 months of this year. And as discussed on our last quarterly call, during the second quarter, we completed the transition of our commercial operations for these medicines to Sobi. As a result, our revenues from TEGSEDI and WAYLIVRA are now comprised of distribution fees based on net sales. Importantly, both medicines continue to make advances into new markets. TEGSEDI recently achieved innovative drug pricing in Brazil, reflecting the significant unmet medical need and prevalence of TTR polyneuropathy in that country. TEGSEDI's categorization as an innovative treatment is a key milestone toward optimizing its value in Latin America. And WAYLIVRA was approved in Brazil as the first and only treatment for patients with FCS, which triggered a $4 million milestone payment from PTC in the third quarter. We earned $115 million in R&D revenue in the first 9 months of this year from advancing more than 15 programs within our cardiometabolic and neurology franchises. This included a $25 million milestone payment from Novartis for achieving 50% enrollment in the Phase III outcome study of pelacarsen. Our ability to generate revenue from numerous diverse sources continues to be a key element of our financial strength. We reported non-GAAP operating expenses of $499 million in the first 9 months of this year. This was a 10% increase compared with last year and was in line with our expectations. R&D expenses increased by nearly 35% compared with last year. This increase was driven primarily by expenses related to our Phase III pipeline including the ongoing studies of eplontersen and start-up costs associated with the Phase III olezarsen CORE study. We also recognized $35 million of R&D expense in Q3 because of our license agreement with Bicycle Therapeutics. SG&A expenses decreased by nearly 35% compared with last year, driven by the substantial savings we realized from the Akcea integration and Sobi transaction. As planned, these transactions unlocked substantial cost savings that we are now reinvesting to drive future revenue growth. This includes funding our go-to-market initiative for our late-stage pipeline. Based on our results for the first 9 months of this year, today, we are reaffirming our 2021 financial guidance, which calls for revenue of more than $600 million, operating expenses in the range of $710 million to $750 million, and a net loss of less than $102 million, assuming the low end of our expenses and all on a non-GAAP basis. We are projecting higher R&D revenue in the fourth quarter from our advancing partner programs. Looking to our collaborations with Biogen and AstraZeneca. We have a deep pipeline of programs that provide us with several opportunities to achieve significant milestone payments this year. Further, we expect operating expenses to increase in the fourth quarter as our olezarsen and donidalorsen Phase III studies get underway. With $2 billion of cash, we believe we are well positioned to continue investing in our pipeline, our technology, and the go-to-market activities for our most advanced medicines. And with that, I'll turn the call over to Richard.

Thank you, Beth. We continue to be pleased with the overall performance of our pipeline. Already this year, we've achieved numerous milestones and look forward to more over the next 12 months. Looking first at our late-stage pipeline. Eplontersen is progressing well. We completed enrollment in the Phase III NEURO-TTRansform study in patients with TTR polyneuropathy, putting us on track for data mid-next year and an NDA filing by the end of next year, assuming positive data. The CARDIO-TTRansform study also continues to progress as do our pelacarsen and FUS-ALS studies. We expect data from all three of these Phase III studies in 2024 continuing the regular cadence of data readouts from our late-stage registration studies. We're also pleased with the progress we're making with LSRs. The balance FCS study remains on track for data in 2023. And just this week, we announced initiation of the Phase III core study in patients with severe hypertriglyceridemia, triglycerides over 500 milligrams per deciliter. As Brett mentioned, SHTG or severe high triglycerides represents a substantial opportunity with more than 3 million patients in the U.S. alone. CORE is the second study in our comprehensive olezarsen development program, which we designed to fully realize this medicine's potential to address a broad range of patients at risk for triglyceride-driven disease who currently have limited treatment options. And as our seventh Phase III study now underway, CORE further expands our late-stage pipeline. We've also made great progress with our donidalorsen development program for the treatment of hereditary angioedema. We look forward to presenting additional data from the donidalorsen Phase II study at the ACAAI Annual Meeting coming up on Sunday. These data will further demonstrate why we believe this medicine has the potential to be the best-in-class treatment for people with HAE. We're also on track to start the donidalorsen Phase III study before the end of this year. We have moved with urgency to begin this very important Phase III program, putting us on track to get up and running well ahead of our plan. The start of the study will further expand our deep Phase III pipeline to 6 medicines over 8 indications. We were disappointed that the Phase III VALOR study in patients with SOD1-ALS didn't reach statistical significance in the primary endpoint. We're encouraged, however, that trends favoring tofersen were seen across multiple measures of biologic activity and clinical function, including motor function, respiratory function, and quality of life compared with placebo. Additionally, the totality of data from VALOR and the ongoing OLE reinforce these findings and showed that patients who started tofersen earlier experienced better outcomes further suggesting a positive clinical effect. As Brett mentioned, we're encouraged that Biogen is now actively engaged with regulators and plans to expand tofersen's expanded access program to all patients with SOD1-ALS. And as we and Biogen continue to analyze these data, we look forward to applying the learnings from VALOR and the OLE to further optimize development of other programs in our AOS franchise. Now let's turn to the steady progress we're making within our mid-stage pipeline. We reported that Ionis MAPTRx achieved the primary endpoint of safety and tolerability in its complete Phase I/II study in patients with Alzheimer's disease. Ionis MAPTRx also offered the first clinical demonstration of antisense-mediated CSF tau protein suppression and achieved substantial durable and dose-dependent reductions of CSF total power and phosphotal. Based on these promising results, Biogen is actively planning a longer Phase II study of Ionis MAPTRx in Alzheimer's disease patients. We achieved proof of mechanism and a strong indication of proof of concept in our Phase II study of cimdelirsen previously referred to as IONIS-GHR-LRx and acromegaly patients who are uncontrolled on standard of care therapy. While the Phase II study was no longer powered to assess the primary endpoint due to COVID-related enrollment difficulties, results from this study and a preliminary assessment of the ongoing open-label extension study showed significant reductions in growth hormone binding protein, a measure of target engagement with no associated increase in growth hormone, a reduction in integrated IGF-1 response, and good safety and tolerability in patients treated with cimdelirsen all supportive of its continued development in patients with acromegaly. In addition to our ongoing open-label extension study, we are studying in a monotherapy study. Both of these studies are progressing on track with data expected next year. ION449 targeting PCSK9 is progressing on track, and we're looking forward to a data readout from the multiple ascending dose studies in individuals with high cholesterol at the American Heart Association Annual Meeting later this month. Vupanorsen is also on track for Phase IIb data readout in patients with dyslipidemia and cardiovascular disease by the end of this year. Enrollment in the Phase IIb end-stage renal disease study of fezomersen previously referred to as IONIS-Factor XI LRx is now complete, putting this study on track for data readout in the first half of next year. And finally, our Phase I/II study of ION582 in patients with Angelman syndrome is also on track to start by year-end. As I just summarized, we're rapidly advancing and expanding our Phase III pipeline with potential for new Phase III programs. We also look forward to a steady cadence of data readouts as we move into next year from our late-stage pipeline beginning with eplontersen, NTTR polyneuropathy patients mid-next year. And with that, I'll turn the call back over to Brett.

Thanks, Richard. Throughout this year, we have executed on our strategic objectives to advance our pipeline, expand the reach of our technology, and prepare to successfully commercialize our most advanced wholly-owned programs. All 3 of these objectives are central to my vision to bring Ionis to greater heights of success. And as we review this morning, we're well on our way. At our Virtual Investor Day coming up on December 9, I'll talk more about my vision and what makes me so optimistic for Ionis' future. You will also hear from many other Ionis leaders who will discuss our strategies and the progress we're making to achieve all our most important near- and long-term goals. We also aim to answer your questions, including questions about our commercial strategy and go-to-market initiatives. And while not the primary focus of our Investor Day, we also plan to discuss the investments we're making in our technology and how we see those investments paying off for years to come. It should be a great event, so please watch for details in the coming weeks. And with that, I'll now open the call up for questions. Tom?

And the first question comes from Yale Jen with Laidlaw & Co.

In terms of the TTR studies, my first question is that just either one for the polyneuropathy or cardiomyopathy improved mix type of patients?

Absolutely, yes. The polyneuropathy NEURO-TTRansform study has enrolled patients and is expected to provide results by mid-year next year. This study is quite similar to our previous research with inotersen, focusing on patients with polyneuropathy, many of whom also exhibit symptoms of cardiomyopathy. These patients have hereditary TTR polyneuropathy, which is the genetic form of the disease. In the CARDIO-TTRansform study, we will be examining the outcomes related to cardiomyopathy and will include both wild-type and hereditary patients, with many of the hereditary patients also representing a mixed type.

What is the current patient recruitment status for the cardiomyopathy TTR study?

Yes, Yale, we're not providing specific details on where exactly we are in enrollment, but we are planning to complete enrollment in the first half of next year.

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

This is Chi on for Jason, taking up questions. I have two questions. First, regarding the sHTG programs. You have your wholly owned APOC3 position for the Phase III study and also have an ANGPTL3 program in partnership with Pfizer, with Phase IIb data expected soon. Pfizer has some discussions about pursuing sHTG as a potential indication. Brett, you mentioned that you see the two programs coexisting, along with tominersen, and that INS may have the option to engage in certain commercialization activities with Pfizer in the U.S. regarding vupanorsen next year. My question is how and to what extent INS plans to maximize the value of these two assets, given the potential overlap. Does Ionis have any influence on the vupanorsen programs in terms of the development direction following the Phase IIb data? My second question is shorter and related to the AGT program; do you have an estimate for when the Phase II data might be available? Can we expect results in 2022 for the AGT program?

Yes. Great questions, Chi. So I'll ask Richard to talk a little bit about how we see angiopoietin-like 3 vupanorsen and APOC3 olezarsen differentiating in the market. We're very excited about both drugs and we're glad that we're developing and commercializing olezarsen ourselves, and we have a great partner in Pfizer with vupanorsen, but they do differentiate. And Richard, don't you take us through that.

So I think the best way to think about this, Chi, is that olezarsen is strictly a triglyceride play and is a very strong triglyceride lowering agent in severe high triglycerides and active in FCS. And they'll differentiate from angiopoietin-like 3 in that angiopoietin-like 3 is very much focused on a mixed dyslipidemic population that also suffers from increases in and/or increased and uncontrolled cholesterol. And so I think you'll see differentiation. It's also a very large population. And so you're going to be working in a place where really there's nothing else there today that substantially lowers triglycerides in patients with these severe high measures of triglycerides. So I see the differentiation. I'm not speaking to the positioning on the market necessarily, but you can see from the biology that they will differentiate.

Yes. And maybe Onaiza you could also talk a little bit more about that, but specifically with a view towards the market opportunity for olezarsen.

Yes, I'd be happy to. As mentioned on the call, we are addressing a significant population with severe hypertriglyceridemia over 500, which is a well-considered indication we are studying. This involves using an adjunct to diet to lower triglyceride levels in patients above 500. With more than 3 million patients in the U.S., we know that clinicians already have a mental segmentation of the market. This will influence how we position our two products, Pfizer's vupanorsen and Ionis's olezarsen, when we launch them. Richard highlighted that olezarsen is expected to be a best-in-class therapy for reducing triglycerides in patients at risk for cardiometabolic disease and acute pancreatitis due to elevated triglyceride levels. We see this potential developing well. There may be some overlap in the market, but we also see vupanorsen positioning well for patients with mixed dyslipidemia and elevated remnant cholesterol. Distinct segments are emerging, and overall, it represents a very large market with a significant opportunity.

Thanks, Onaiza. And just to add to that, olezarsen is substantially more potent and will produce much more potent reductions in triglycerides compared to both vupanorsen here too. So it's a much more attractive triglyceride reducer, if you will. Regarding the angiopoietin-like 3, yes, where data is expected out next year for both refractory hypertension as well as the exploratory heart failure study.

The next question comes from Yanan Zhu with Wells Fargo.

Congratulations on the progress. I have a few questions about the olezarsen program in sHTG. First, congratulations on starting the Phase III CORE study. I'm curious about the overall development program. Given the large indication size, will more studies be necessary? How many studies are required for the registration of this product? What is the required patient year exposure for the safety database? Additionally, while data for CORE is expected in 2024, what is the timeline for the overall program's data and approval?

Yes. Want me to take that?

Yes. So we've got quite a number of studies planned. I don't think we specified the number but certainly, more than 1,500 patients will be exposed in this database. So stay tuned. We've got a few more to start next year. That will be supportive, particularly for the severe high triglyceride larger population.

Will this be, sorry, go ahead, sorry, Brett.

I'm going to say again the data readout we're talking about 2024 would be to support registration. So it all come together around that time.

Great. That's great. And maybe a quick follow-up on the CORE study. The primary endpoint is the triglyceride reduction. Is that registry approvable, or do you need the acute pancreatitis event rate to secure the approval for the product?

Right. So the answer is yes. Triglycerides are approvable alone. The pancreatitis, of course, we believe, will be a profile-enhancing component for this drug. But only the triglyceride level is required for approval for this indication.

The next question comes from Esther Rajavelu with UBS.

I have a couple of questions. I'll begin with the Angelman program. Can you discuss that program and highlight how your molecule might differ from others currently in the clinic? Also, any information on the route of administration or other considerations regarding your trial and enrollment would be helpful. I have a few quick follow-ups as well.

Sure. I'll ask Eric to talk a little bit on what we know about how our molecule is different. We're very excited to get the study up and running by the end of this year. And as we dose for most of our drugs for neurological diseases, our drug will be dosed intrathecally. And Eric, why don't you talk a little bit about what we know about how we are different.

Yes, sure. So the mechanism that we're utilizing is the same as some of the other antisense molecules in the clinic. This is a mechanism that we pioneered along with our academic collaborators in lowering the ISIS transcript and increasing expression of UBE3A deficits of which are causal for Angelman syndrome. And we spent a fair amount of time optimizing our molecule and trying to find the most potent and best tolerated and safest molecule we could find and obviously have a different molecule than our competitors in the space. The chemistry and technology we use is the same as our other neurology drugs, the same chemical modification that's in SPINRAZA, and we're optimistic that the profile of our drug will look like our MAPT ASO, which we released some data on earlier this year and has been performing great. So hopefully, we'll have a best-in-class molecule that can address this disease.

Got it. And then on the tofersen FDA discussions, can you share your expectations on the timing for an update and what a realistic outcome could be from these discussions?

Yes, Esther, I wish I could, but I can't because Biogen has not indicated any specific time for providing an update on the next steps. I can only remind you that we, along with Biogen and Ionis, remain very encouraged by the overall data, as we stated in our opening remarks. They are continuing to work with regulators to review the data, discuss potential next steps, and plan to open the expanded Access program to all SOD1-ALS patients due to the significant unmet medical need, the safety profile, and the overall data. However, there is no specific timeline for updates at this moment.

Got it. And then lastly, if you can give us any color on the Flamingo agreement that was in the press release this morning. And what sort of milestone could be, that should be on our radar?

Yes. Let me just provide very briefly the strategy here. We have a rich pipeline, as you know. And what we are moving towards doing is a very high priority is to focus in those areas where we think have the potential to bring the greatest value to Ionis and all stakeholders. And those areas are in cardiovascular disease, neurology, and in certain indications like hereditary angioedema, where we think we have a best-in-class molecule. Oncology, although we've had a long history in oncology, and we've made great progress there, and we are enthusiastic about the drugs that have moved over to Flamingo, oncology drugs don't require substantial investment and laser-focused to give those drugs the best chance to win. Based on our commitment to focus on those therapeutic areas where we think bring it have the rate of success, we divested our oncology pipeline and moved it into a company that we helped create both from Flamingo therapeutics. And we're confident that we will do a very good job with the drugs that are revolver, the Flamingo we obviously have a vested interest economically and otherwise in Flamingo and see those drugs go forward. And we're very much involved in with Flamingo. As far as milestone and those sorts of economics, I don't know if those have been disclosed, Beth?

No, they are not public. To build on what Brett mentioned, in considering the economics of this transaction, we believe the true value lies in Flamingo's ability to fund and develop these medicines for various cancers. This allows us to maintain a focused approach in oncology, which in turn enables us to concentrate our efforts on cardiometabolic and neurology. Therefore, the economics are more about the long-term value of these medicines and the sustained financial benefits, as well as our equity investment in the company.

Got it. So should we be thinking about this as an Akcea model where it's spun out from an R&D standpoint and then eventually, you'll decide whether to bring it back into the Ionis fold?

No, not at all. Flamingo is an independent company. We have an equity ownership, but it's less than 20%. So I would not consider this an Akcea model, and that's not a model we plan to follow in the future.

The next question comes from Yaron Werber with Cowen.

This is Brendan on for Yaron. Just I think a couple of quick ones from us. First, mostly in HAE actually. I was wondering, what you might be able to tell us that the design of the Phase III. I know this is kind of a increasingly crowded space at this point. And I guess we're also kind of wondering where you really see the bar on efficacy for the Phase III, not really just for approval, but maybe more so it's really kind of differentiate yourself from some of these other late-stage and commercialized assets?

Sure. I'll ask Richard to talk a little bit about the Phase III design and also Onaiza on what we expect to get out of the study to win on the market with this potential best-in-class drug. Again, the data, a lot of the data and a significant amount of new data will be presented this weekend at a medical meeting. And I think that data will demonstrate why we're so excited about donidalorsen as a potential best-in-class medicine we think will be the best treatment for HAE. Look we share on Phase III design, Richard?

Yes. So the Phase III design is really patterned fairly closely after the Phase II. These are going to be patients that are treated who have frequent attacks. It will be placebo-controlled, of course. And patients will then get the treatment, and we'll be looking at percent of patients that go completely attack-free. One of the reasons we think this drug has really demonstrated in Phase II that it is, in fact, potentially best-in-class is that nearly all the patients went to attack-free. And now they've rolled over into open label and have gone long term attack-free, which is very different from the current standard of care in the industry in prophylaxis. So excited about it, the design of the study, if you follow a little bit more of the data that's going to be released this coming weekend. You'll see the design of that study and the endpoints are very, very similar.

Thanks. Onaiza, what are you looking forward to win on the market?

We have a strong profile based on the Phase II data, as Richard mentioned. We've done extensive work to understand the unmet needs given the current prophylactic treatments and their uptake. There are three key dimensions emerging, all of which we successfully address. The first is achieving zero attack rates. The quicker we can reach a zero attack rate for patients, the more confidence they will have and the less anxiety they will experience. Our Phase III data shows we excel in this area, achieving maximum clinical efficacy better than existing agents, and we aim to replicate these results in Phase III. As Richard pointed out, we also have impressive data on attack-free rates, with 92% observed from weeks 5 to 17, which will be crucial for adoption. Lastly, the market has injections that are administered every 2 to 4 weeks, which are highly viscous and often lead to injection site reactions. The convenience of our product, combined with its efficacy, will be highly valuable for adoption. This is an exciting product, and we look forward to advancing it.

Thanks, Onaiza. We're also looking forward to sharing in more detail the Phase III design and our go-to-market strategy at our Investor Day in December. So stay tuned for that.

The next question comes from Josh Schimmer with Evercore ISI.

I just want to clarify the operating expense guidance for the rest of the year. I guess, it assumes a pretty significant step-up quarter-over-quarter, especially, if we adjust for the Bicycle payment in the third quarter. I know you said you're starting up some trials, but it's still a pretty sizable jump. Maybe you can elaborate on the drivers for that?

Sure. I'm glad to provide an update. You're right to focus on our late-stage pipeline, particularly the progress of our Phase III studies. Starting with eplontersen, the polyneuropathy study is fully enrolled, as we mentioned in our second-quarter earnings call. It is now in an expensive phase, with data expected mid-next year. The cardiomyopathy study is also enrolling well, and as Brett noted, we expect complete enrollment next year. This study is the largest outcome assessment ever conducted in this patient population, involving 750 patients, which contributes significantly to expenses. Regarding olezarsen, the Phase III FCS study is ongoing and continues to enroll patients, while the CORE Phase III study for severe high triglycerides is ramping up. When we initiate a study, there is usually an initial spike in expenses to get it started, which then increases as more patients are enrolled. Additionally, the PKK Phase III study will begin soon, and we anticipate start-up expenses to occur in the fourth quarter. Overall, we have numerous late-stage study launches, which are quite costly. Looking ahead to next year, we plan to sustain this growth as studies continue to enroll and we add new trials, especially for olezarsen, expanding our Phase III program. This indicates continued growth in R&D expenses into the fourth quarter and beyond.

The next question comes from Gary Nachman with BMO Capital Markets.

So first on eplontersen for TTR-PN. Depending on the data in the Phase III mid-next year, how do you expect it will be used in that market? How much could it potentially expand addressable patients relative to TEGSEDI? And how will you promote it? Will you rebuild your infrastructure there? And then on SPINRAZA, just how long do you think it will take for Biogen to run the ASCEND study? Is that something that could potentially update the label? And are physicians currently using higher dosing on their own for risky failures to the extent that you're aware of that?

I would like Onaiza to share some insights on how we believe we have the opportunity to succeed in the market. Additionally, I'd like to discuss not only polyneuropathy but also cardiomyopathy related to tofersen. First, I want to emphasize that this is a LICA medicine, which comes with all the benefits and an appealing profile comparable to our other LICA products. It offers a convenient once-a-month subcutaneous injection at home using an auto-injector and has an excellent safety profile. In our Phase I study, we observed TTR reductions of up to 90%, which is a notable improvement compared to the 70% to 75% reductions seen with inotersen (TEGSEDI). We believe this will lead to even greater efficacy. We are thrilled about both the product profile and the market potential, and we are diligently working on our plans to introduce eplontersen into the market. I’d like Onaiza to elaborate on our strategy in this regard.

Yes. I'd be happy to. So as we think about launching with the initial indication, it's really important to know the market is really kind of advancing their thinking about this disease as a systemic disease. And we've seen that emerge a lot in our market research and just talking to our KOLs as well. And there's increasing recognition that the whole burden and prevalence of polyneuropathy in mixed phenotype patients is also really critical to address. So if you think about that, overall, you've got 40,000 patients initially, both in hereditary ATTR that we will be focusing in on. Currently, I think only 10% to 15% of these patients are receiving treatment. So there continues to be a lot of opportunity and unmet need. And as to your questions and last generation and second generation, we know that the first-generation silencers just didn't really have the ability to seamlessly integrate into a patient's lifestyle, and this will be well above and beyond that. So I think that's a very exciting place to be in terms of how we're looking forward to being in the marketplace. In addition, the broad part of the market is in wild-type cardiomyopathy. There, we are well positioned to win in the marketplace because of our clinical trial and the ability to generate clinical data with and without standard of care. And we think that will broadly position eplontersen. For physicians, if they actually have patients who are naive, we'll have the data for that. They have patients who are already on a stabilizer. We'll have the data for that so they can make the right decision for their patients. So really looking forward to the plunters and getting into the marketplace.

Regarding ASCEND, we are not aware of any SMA patients who have been treated with a higher dose while on ASCEND after previously being on risdiplam. Biogen would have that information if it were the case. I doubt it has occurred because the DEVOTE study, which is currently in progress, is examining the higher dose of SPINRAZA in a controlled manner. As a reminder, ASCEND is studying the higher dose of SPINRAZA, which I believe is 28 milligrams. Patients who were on risdiplam have chosen to wash out from risdiplam and switch to a higher dose of SPINRAZA. The assumption is that these patients feel the need for better disease control, prompting their transition to SPINRAZA and participating in the higher dose study, which has successfully cleared the dose escalation part of the DEVOTE study demonstrating safety and is now in the randomized portion. Additionally, beyond DEVOTE and ASCEND, we also have the RESPOND study ongoing, which Biogen is conducting with patients receiving gene therapy who had a sub-alpha response and subsequently started SPINRAZA at the commercial dose.

The next question comes from Jessica Fye with JPMorgan.

Just 2. First, how should we interpret the IGF-1 AUC data for cimdelirsen and acromegaly? Can you talk about how these patients IGF-1 levels looked relative to the upper limit of normal after treatment? And then on PCSK9, thinking beyond the subcu version to an oral. Are you still eager to pursue that path? Or is it still too early to say? And assuming you'll eventually need an outcome study for either agent, would you envision ultimately developing both subcu and oral in parallel or choose one over the other?

Thanks, Jess. I'll address the PCSK9 topic and then invite Richard to provide a more detailed summary of the acromegaly data with HRL. Regarding PCSK9, AstraZeneca will present an update on the Phase I study involving patients with high cholesterol at the upcoming AHA meeting in a couple of weeks. They are very excited about this study. The Phase II studies have essentially concluded, and they aim to share the results from those trials next year. This formulation is subcutaneous and administered once a month. Based on the data we have reviewed, we believe this has the potential to be the best-in-class PCSK9 inhibitor available today. AstraZeneca plans to initiate several Phase III studies, including a cardiovascular outcome trial, and they are developing a comprehensive strategy to compete in this market, as they consider this drug to be the most effective agent for lowering LDL levels, which is supported by the results seen in both patients and healthy individuals. As for an oral formulation, it is not part of the current PCSK9 program. AstraZeneca is fully focused on the subcutaneous formulation at this time. However, we are collaborating with AstraZeneca on oral delivery as a broader initiative, not exclusively tied to PCSK9. We have several drugs in development and research with AstraZeneca, and we remain hopeful about the advancements we are making in oral delivery. Nonetheless, it is not currently aimed at PCSK9. They believe strongly in the potential of the subcutaneous drug, which is their current focus. Any insights gained from the oral delivery efforts will be considered for the future, but that is not the immediate priority.

Cimdelirsen, let me highlight some key points. We have achieved significant reductions in growth hormone levels, as indicated by the growth hormone binding protein, which serves as a proxy measure without altering the actual growth hormone levels. This is particularly noteworthy because the patients in our study were previously uncontrolled on somatostatin, indicating they did not respond to standard treatment. Their IGF-1 levels were 2 to 3 times above the normal upper limit, with the goal being to lower them below 1.5 times that limit. We analyzed the area under the curve (AUC) for IGF-1 and found that the decline in IGF-1 was statistically significant at the highest dose when compared to placebo, which, in contrast, was on the rise. These patients, who were not responsive to somatostatin analogs, continued to deteriorate, whereas our treatment showed improvement by effectively lowering IGF-1 levels. Initially, many of these patients had levels around 400 nanograms per milliliter, while normal levels hover around 200. Getting below 300 is ideal, and we demonstrated that we could achieve this with our treatment in these difficult cases. This is promising progress, but it's not the conclusion of our efforts. We also have ongoing studies to extend treatment to these patients and explore options for those who have not received somatostatin analogs, including those who have dropped out of treatment or are newly diagnosed and still have uncontrolled IGF-1 levels.

Thank you, Richard. I’d like to highlight a couple of additional points. Firstly, to our knowledge, no one has previously studied a drug to control IGF-1 levels in this difficult patient population, particularly those who have not responded to somatostatin. We are truly breaking new ground here. Any reduction in IGF-1 levels, especially getting some patients into the normal range, is a significant advantage. We are also observing improvements in quality of life, which we will keep tracking during the open-label extension. Importantly, we did not observe any increases in growth hormone as a result of inhibiting the growth hormone receptor. This is crucial because elevated growth hormone can promote tumor growth, which is something we want to avoid, and we are pleased that this was not an issue.

The next question comes from Joseph Stringer with Needham & Co.

I would like to follow up on the Phase III HAE. I'm interested in your thoughts regarding potential enrollment rates and when that trial might be fully enrolled.

Which study was that, Joe?

HAE.

Yes. I don’t believe we have announced when we expect to finish enrollment in that study. We mentioned a possible launch in 2024, but we haven’t provided specific details on the timing of enrollment completion. I apologize for not being able to give you more details. However, we are starting that study this year, and we were very successful in enrolling participants in the Phase II study quickly. As Richard mentioned, there's a lot of enthusiasm for this drug's profile. Additionally, we are continuing to follow up with patients from the open-label extension of the Phase II study we presented on Sunday. We have great participation in the open-label extension, and people are eager for this drug. We're looking forward to sharing more data in the first half of next year at Medical Congress, including open-label evaluation, quality of life data, and other information to complement what we will present on Sunday. It really seems promising.

The next question comes from Luca Issi with RBC.

Great. I have 3 questions, all pretty quick. One on APOC3, the other one in acromegaly and the other one on FUS-ALS. So APOC3, obviously greater just starting a Phase III study on patients that they have triglycerides above 500-milligram per deciliter. Is there a future plan to start a trial also in patients with triglycerides above 150 milligrams per deciliter? And if so, are you planning to run a cardiovascular outcome trial there similar to what Vascepa has done? Maybe on acromegaly, exciting early signal. However, it doesn't sound like you're ready to commit to a Phase III study quite yet. Wondering if you can comment on that and maybe what's gating for a go-no-go decision there? And lastly, for FUS-ALS, I know the program is wholly owned and you're already recruiting patients in Phase III. In light of the tofersen data, are you planning any protocol amendment to maybe increase the problem of the success of that trial?

Thanks, Luca. I’ll have Richard provide insight on other patient populations as we explore around 150 outcome trials for olezarsen shortly. Regarding acromegaly, we will continue to monitor the open-label extension to gather comprehensive data on the refractory patient population throughout next year. Additionally, next year we will have data from the monotherapy trial, which I would categorize as frontline, although some of those patients, as Richard mentioned, may have previously failed somatostatin therapy before entering the trial. That monotherapy data will be available next year. Our next steps will be to evaluate the complete data set, including the somatostatin failure study, the open-label findings, and the monotherapy results to determine the appropriate next steps for that program, which would likely involve a Phase III trial and the identification of the right patient population. In summary, you can expect clarity on whether we will proceed to Phase III with cimdelirsen next year and our corresponding strategy. The monotherapy population presents the most promising opportunity compared to the refractory population, but we will need to assess the data first. As for FUS-ALS, we have already gained valuable insights from the tofersen trial that will inform our future ALS clinical trial designs to enhance their efficacy. It’s important to note that we believe the drug performed as intended, and now we must determine how to improve the effectiveness of tofersen in all our ALS therapies through the design of more optimal clinical trials. We are exploring new areas and gathering substantial learnings. Key insights from the tofersen trial include: first, the longer the treatment, the better the outcomes; second, earlier treatment during disease progression or at earlier stages yields better results; and third, neurofilament light chain serves as a better predictor of progression rates for fast progressors compared to regular progressors. We are applying these insights to all our ALS trials, and since the studies on ataxin-2, sporadic ALS, and C9 are in Phase II, we have the chance to implement these findings in Phase III trials. For the FUS-ALS, we are still in the early stages, and we certainly plan to make protocol amendments to incorporate the insights I've outlined to maximize the potential for success in that study.

Good. Thank you, Brett. Just one note on triglyceride lowering and cardiovascular disease. At the greater than 150 and looking at all the trials that have been done with triglyceride-lowering agents. There's been a lot of failures in cardiovascular. Just stated simply, we have no plans to go into a cardiovascular outcome trial with our APOC3 drug. What we know is that remnant cholesterol is a very important component. And it may be that we'll learn something from our Phase III programs in this regard that give us more input on this particular question. But right now, that's not where we're going. Vupanorsen, which is both a triglyceride and a cholesterol-lowering agent in mixed dyslipidemia seems like the best play in that market for actually impacting remnant cholesterol, where we think the bad actor is. Hope that's helpful.

Thanks, Luca. I want to express my gratitude to everyone who joined us today for the call. We are eager to see you again at our Virtual Investor Day in December, where we will provide more detailed insights into our commercial plans for several of our most promising late-stage programs. Until then, thank you once more for joining us, and have a wonderful day.

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