Ionis Pharmaceuticals Inc Q3 FY2022 Earnings Call

Good morning, and welcome to the Ionis Pharmaceuticals Third Quarter 2022 Financial Results Conference Call. As a reminder, this call is being recorded. And at this time, I would like to turn the conference over to Ms. Julie Tepper, Investor Relations, to lead off the call. Please go ahead, ma'am.

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

Thanks, Julie. Good morning, everybody, and thanks for joining us on today's call. This year has been catalyst-rich and strategically important for Ionis, enabling us to conclude 2022 in a position of significant strength while setting us up for substantial growth. We're looking forward to potentially adding two new commercial products from our rich Phase III pipeline to our portfolio next year. These are, of course, eplontersen for ATTR polyneuropathy and tofersen for SOD1 ALS. In addition, we've made excellent progress advancing our late- and mid-stage pipeline. With eight positive key data readouts so far this year, our rich Phase III pipeline is poised to expand with two new Phase III starts expected in the first half of next year. Based on all our pipeline progress, we're well positioned to continue delivering a steady cadence of Phase III data readouts in 2023, 2024, 2025, and beyond. This year, we have also advanced our commitment to deliver transformative medicines to the market with our go-to-market commercial preparations for our near-term product opportunities, eplontersen, olezarsen, and donidalorsen. We have also made great progress expanding and diversifying our technology with the recent advancement of three new programs into IND-enabling development activities. These programs involve our first medicines incorporating LICA technology for enhanced delivery to muscle and our metal phosphoramidate, or MSPA, backbone chemistry designed to improve both efficacy and durability. These advancements further enhance and expand our drug discovery capabilities for both our new programs and our follow-on programs. We've also taken additional steps to support our future growth. We recently began work on a new state-of-the-art manufacturing facility. This facility will ensure we have the capacity we need to continue to successfully deliver our medicines to patients and continue to expand into new chemistries. We also recently capitalized on the record demand for life science real estate assets by monetizing several of our facilities through a sale-leaseback transaction. This transaction further strengthens our balance sheet to support our plans for accelerated growth. With that, I'll turn the call over to Richard to discuss our recent key data readouts pipeline updates and preview our upcoming catalysts. Then Beth will review our third quarter financial results, the financial impacts of our recent real estate transactions as well as review our full year financial guidance. And after that, I'll wrap up our prepared remarks before taking your questions. So now over to Richard.

Thank you, Brett. While our pipeline has certainly performed extremely well this year, we reported eight positive data readouts so far this year. As a result, we are looking forward to potentially having two new medicines on the market and expanding our rich Phase III pipeline next year. Over the next few minutes, I will review our recent achievements and then preview our upcoming catalysts. Our next potential medicine to reach the market is tofersen, our medicine for patients with SOD1-ALS. Tofersen is currently under priority review with the FDA and has the potential to become the first approved disease-modifying medicine for the treatment of a genetic form of ALS. Tofersen has a PDUFA date of April 25, 2023. In September, we presented positive eplontersen data from the Phase III neurotransfORM study in patients with ATTR polyneuropathy at the International Symposium on amyloidosis. In the eight-month interim analysis, eplontersen achieved a highly statistically significant and clinically meaningful change compared to historical placebo for its co-primary and key secondary efficacy endpoints including demonstrating robust TTR reduction from baseline with the improvements in neuropathy impairment and quality of life relative to baseline in a substantial portion of patients. With these very positive data, we and AstraZeneca look forward to filing for regulatory approval in patients with TTR polyneuropathy in the U.S. before the end of the year. Additionally, we are extremely pleased with the continued progress of CARDIO-TTRansform, the largest and longest study in patients with ATTR cardiomyopathy to date. Since we initiated CARDIO-TTRansform in late 2019, patients are being diagnosed much earlier in the course of their disease as a result of greater disease awareness and improved disease detection methods. This evolution in the ATTR-CM landscape is supported by new published and presented data from the scientific community. Based on these new findings, along with careful monitoring of patient demographics and blinded event rates in our study, we've increased the target enrollment goal to 1,400 patients. This increase will ensure our study fully reflects the entire population of patients, including those with less severe disease. We believe this further increases our probability of delivering a highly positive study outcome that best positions eplontersen to successfully compete and lead in this growing dynamic and global market. Importantly, based on our current rate of enrollment and the added power from additional patients, we remain on track to report data in the first half of 2025. Our broad olezarsen development program in FCS and severe high triglycerides is also progressing nicely. The Phase III BALANCE FCS study is fully enrolled as planned to read out in mid next year. Our broad clinical program supporting the larger severe high triglycerides indication also continues to progress well. CORE, our first pivotal study in patients with SHTG remains on track for data, and CORE 2, our confirmatory pivotal study in the same population is now underway with data expected in 2024. We recently initiated ESSENCE, a supportive Phase III study. ESSENCE is designed to build out the safety database for the larger SHTG indication. With our first-mover advantage, we remain very confident in the potential of olezarsen to be a substantial driver of future growth. Our donidalorsen OASIS Phase III program in patients with hereditary angioedema remains on track for data also in 2024. We will report new longer-term data from the Phase II OLE study at the American College of Allergy, Asthma and Immunology Annual Scientific Meeting. The goal of the OLE study is to reinforce donidalorsen's potential best-in-class profile by demonstrating long-term protection from HAE attacks along with longer-term safety and tolerability in patients treated for one year. We look forward to sharing our OLE data with you on Sunday. Recently, we and our partners presented positive data from several of our mid-stage programs further advancing our rich pipeline. We recently presented positive and competitive Phase II data from IONIS-FB-LRx in patients with IgA nephropathy at the American Society of Nephrology's Kidney Week. This study was designed to demonstrate clinical proof of concept for the potential to treat IgA nephropathy by targeting complement factor B and the alternative complement pathway. IONIS-FB-LRx met the primary endpoint demonstrating substantial and clinically meaningful reductions in 24-hour urinary protein in patients with IgA nephropathy with a mean reduction of 44%. Additionally, patients effectively maintained their EGFR throughout the study and achieved a favorable safety and tolerability profile. Based on these positive data, Roche already announced their plan to advance IONIS-FB-LRx into Phase III development by mid next year. Also at Kidney Week, Bayer reported positive Phase IIb study for fesomersen, or Factor XI LICA medicine for the treatment of thrombosis. The goals of the rethink ESRD study were to demonstrate dose-dependent and substantial reductions in Factor XI levels and no increase in bleeding risk compared to placebo in patients with end-stage renal disease. Safety and tolerability were also key outcomes. We were pleased that fesomersen exceeded all of the goals of the study, achieving dose-dependent and sustained median reductions in steady state Factor XI levels that exceeded 85% at the top dose, with no imbalances in major bleeding or non-major bleeding compared to placebo. Additionally, incidences of dialysis circuit clotting and AV access thrombosis diminished significantly with decreasing Factor XI levels, both of which were exploratory efficacy endpoints, and fesomersen demonstrated favorable safety and tolerability in the study. Despite these highly positive results, Bayer made the decision to only advance their small molecule Factor XI medicine to Phase III and therefore return fesomersen to Ionis. While we understand Bayer's decision not to move a second Factor XI drug forward, we and our clinical advisers believe that these positive data support advancing fesomersen into pivotal studies. Given the large potential addressable patient population and numerous potential indications to explore, we are focused on getting fesomersen into the hands of the right partner to deliver it to the market as soon as possible. Lastly, regarding the exciting bepirovirsen data GSK reported at AASLD, bepirovirsen is a potentially transformative treatment for chronic hepatitis B. HBV is responsible for approximately 900,000 deaths annually. The goal of the Phase IIb B CLEAR study was to assess efficacy, safety, and tolerability in HBV patients treated with bepirovirsen. This was an important study because it demonstrated for the first time that bepirovirsen alone or in combination with antiviral nucleotide or nucleoside inhibitors can deliver a sustained and substantial reduction in both viral DNA and HBV surface antigen, which together are key measures of success. The results show that 9% of patients on nucleoside nucleotide analog treatment and 1% of patients on bepirovirsen alone achieved the primary outcome of viral DNA and HBV surface antigen below the lower limit of quantification at 24 weeks after bepirovirsen treatment. These data strongly support the potential for bepirovirsen to achieve functional cures in people suffering from chronic HBV infection. Based on these encouraging data, GSK is currently in discussions with regulators on the design of the Phase III studies with plans to initiate a robust Phase III program in the first half of next year. It has been an eventful and catalyst-rich year, and we anticipate continuing the momentum with the remainder of the year and into the year ahead. We're looking forward to presenting our upcoming HAE data this coming Sunday, and we are on track to file the NDA for eplontersen by the end of the year. Next year, we are looking forward to more key catalysts, including the potential approval of tofersen in the first half of the year, the 66-week data from the NEURO-TTRansform study of eplontersen, the potential FDA approval of eplontersen later in the year, Phase III data from olezarsen in FCS patients, along with the initiation of two new Phase III programs among other important advances. With that, I will turn the call over to Beth.

Thank you, Richard. This morning, I'll provide a summary of our third quarter results, discuss our recent real estate transactions, and then touch on our full year guidance. We earned revenues of $160 million and $435 million for the third quarter and year-to-date, respectively, which is approximately a 20% increase over last year. Our revenue continues to be derived from numerous diverse sources with approximately half from our marketed products and the balance from numerous partner programs. Our operating expenses for the quarter and year-to-date reflect our continuing investments in advancing our rich pipeline and commercial readiness activities. Notably, we continue to maintain our healthy balance sheet with cash and investments staying steady at approximately $2 billion through the end of Q3. SPINRAZA's global sales were $431 million for the third quarter and $1.3 billion year-to-date. As a result, we earned $62 million and $175 million in royalty revenue for the corresponding periods. In the U.S., SPINRAZA sales continued to stabilize in the third quarter. Additionally, we continue to see positive trends in discontinuation rates. We expect to see the same dynamics play out in markets outside the U.S., which we see as a path for SPINRAZA to return to growth. SPINRAZA's potential to return to growth is further supported by Biogen's continued geographic expansion and their robust life cycle management program. This includes the work Biogen is undertaking to further characterize the remaining unmet medical need of patients with SMA with their ASCEND, RESPOND, and DEVOTE studies. We earned R&D revenue of $87 million in the third quarter and $212 million year-to-date, both of which increased substantially compared to the same periods last year. Year-to-date, we earned $85 million from Biogen for advancing neurological disease programs under our strategic collaboration. We also earned $63 million from Roche for licensing and advancing IONIS-FB-LRx and $55 million in cost-sharing payments from AstraZeneca for their portion of eplontersen's development costs. Our non-GAAP operating expenses increased in the third quarter and year-to-date compared to last year and were in line with expectations. The increase was driven by higher R&D expenses from advancing the six Phase III studies we are currently conducting with eplontersen, comprising our largest investment. Our R&D expenses also included increased spending for CMC and medical affairs activities to support our near-term commercial opportunities. SG&A expenses increased in the third quarter compared to last year as we ramped up our go-to-market preparation. Year-to-date, SG&A expenses were below the same period last year, which continues to reflect the substantial savings we realized from the Akcea integration and Sobi transactions. As Brett mentioned, we recently took two important steps to support our future growth. We entered into a long-term lease to construct a state-of-the-art manufacturing facility, significantly increasing our capacity to bring our medicines to market and to expand into new chemistry. We will oversee the design and construction of the facility, ensuring it will incorporate advanced sustainability and environmental protection features. For example, we expect that approximately 50% of the new facility's power requirements will come from renewable energy sources. We anticipate completing this project in 2025. Based on our early design work, we expect it to cost us approximately $350 million. We also entered into a sale-leaseback transaction, which took advantage of the record demand for high-quality life science real estate assets. This transaction bolstered our cash balance with approximately $240 million in net proceeds, plus funding to expand our R&D campus. It also enables us to retain control over the operation of our facilities. We used a portion of the proceeds to pay off our existing mortgage on these properties. In doing so, we reduced our long-term debt. By putting this cash to work, we believe we can generate substantially more value advancing our growth initiatives, including expanding and advancing our pipeline and technology, preparing for multiple product launches, and building our new manufacturing facility. Our Q3 results keep us on track to meet our 2022 revenue, operating expense, and net loss guidance. We continue to expect revenues of more than $575 million with commercial and R&D revenue roughly split 50-50. As our Phase III studies continue to progress, we expect our R&D expenses to increase between 25% and 30% this year compared to last year. We project our SG&A expenses to be in line with last year, even while we increased our investments in preparing to bring our near-term opportunities to market. In total, we expect our non-GAAP operating expense to come in at the lower end of our guidance, which is between $825 million and $850 million. And since our recent sale-leaseback transaction was not contemplated in our guidance, we are increasing our 2022 cash guidance from $1.7 billion to $2 billion. Looking to the future beyond 2022, we expect our strong financial foundation to continue to serve us well. As we continue to invest in advancing our strategic priorities, we are poised to deliver significant future growth. And with that, I'll turn the call back over to Brett.

Thanks, Beth. As summarized this morning, we made great progress this year in advancing our key priorities to grow our commercial pipeline, deliver an abundance of new transformational medicines to the market, and expand and diversify our technology. We're on track to file the eplontersen NDA by the end of this year. With tofersen currently under priority review with the FDA, we're positioned to add these two new medicines to our commercial portfolio next year, assuming approval. Our late-stage pipeline continues to advance and expand, setting itself up to extend our Phase III data readouts next year and for many years to come. We've made important advances to expand and diversify our technology with more advancements still to come, and we've taken additional steps to support our growth. Importantly, we have the resources to continue executing on our priorities to drive substantial value for all stakeholders. This has been a great year for Ionis so far, and I think next year and the years to come are going to be even better. We're looking forward to sharing more on our progress in the coming months. With that, I'll now open the call up for questions. Operator, if you could open up the queue, please.

And the first question will come from Gary Nachman with BMO Capital Markets.

So first on eplontersen, can you explain a little bit more the rationale for further expanding the cardiomyopathy study? What were you seeing in terms of having too many earlier-stage patients? Did you consider extending the duration of the study at all beyond what you did previously? And just how you're confident that the timeline won't change in terms of getting those data? So that's one. And then just on the first NDA, was the date extended by three months just to explain why if the FDA asked for any additional information. And if you guys are still anticipating a panel and how you and Biogen are preparing for that, what you think might be discussed if there is a panel?

Good question, Gary. Maybe I'll take a stab at the tofersen question, and then I'll turn it over to Eugene to discuss the rationale for expanding the eplontersen cardiomyopathy protocol. So for eplontersen, yes, there was an extension of the timeline for the NDA PDUFA date to April 25, a three-month delay, a major amendment, primarily because the FDA has communicated that they just need more time to review all the data. It's really not a request for any substantial or significant additional data they needed to do the review. It was really a bandwidth issue principally. They have a lot going on in the neuro division, especially this past fall for similar indications, and we suspect, although not definitive, that probably caused them to have to take more time to review the dataset. We're very much looking forward to the data readout, the decision, and the outcome from the review by the FDA. No new information on the position by the FDA on ADCOM. We haven't heard anything new. We're still assuming that they're planning to have an ad com at some point, and we're very much looking forward to that as well. Eugene, why don't you take us through the rationale and also the importance of the amendment change to the cardiomyopathy Phase III trial for TTR?

Sure, Brett. Thanks for the question. As Richard already mentioned in his remarks, it is clear to us and to many of the advisers we've been talking to that the population with ATTR cardiomyopathy has changed substantially over the past several years. As you recall, the primary source for us to power the study, the original study that we started back in 2019 was the ATTRACT dataset, which was the study that Pfizer conducted a few years back. The more data became available to us internally as well as externally, importantly, quite a few publications have now endorsed that the application population has changed in a meaningful way. Specifically, they now come to a definitive diagnosis earlier than they used to. As a result, and that's a factor of greater disease awareness and better diagnostic measures, the patient journey is relatively different from what it used to be. When ATTRACT was conducted, patients came to attention late in their clinical presentation and had multiple early events that were again used for the original powering study. So as we assimilate all of the data externally and internally coming from our study, it became clear that the study was not powered properly based on those updated assumptions, and we needed to resize the study accordingly. Of course, the question about duration is an important one, and we've looked at that as well. We've considered extending the duration even further because that would substantially delay the readout timing. We felt that, again, the upsizing of the study alone was sufficient to ensure that it's properly powered without taking a significant penalty in time.

And thanks, Eugene. I'll just add that we also have patients in the open-label extension of the Phase III CARDIO-TTRansform study, who have completed the 140 weeks, so we wouldn't want to lose those patients. So we can accomplish the same objective, the same goal by increasing the sample size, which we did. We think this is a strategically important move in the study to really help ensure the most successful outcome possible for CARDIO-TTRansform.

Okay. That's very helpful. And just to confirm, you don't need to increase the number of sites, and I guess, enrollment has been going quite well. Maybe just comment on that.

Yes, that's right; adding 400 patients does not change the timing for the readout. It means that we're well ahead in enrollment. So enrollments going very well, and we're not needing to open up new sites or change existing sites; we're just moving ahead rapidly to get to the 1,400 number.

The next question will come from Yanan Zhu with Wells Fargo.

Congrats on the progress in the quarter. I have a follow-up on CARDIO-TTRansform study and also a question on Lp(a). For CARDIO-TTRansform, how does the changing demographics change your powering assumption in terms of event rate in the control arm and the effect size? And what proportion of tafamidis patients did you assume in your powering assumption? For Lp(a), how do you and your partner, Novartis, view the data for eplontersen presented at the AHA meeting where they showed up to 100% Lp(a) reduction? How does that affect your outlook for pelacarsen?

Thanks, Yan. Those are two great questions. I'll ask Eugene to share what he can about the powering assumptions and so on, and then Richard to talk about pelacarsen.

Sure. Thanks, Yanan, for your question. So related to our original assumptions, you may recall, we did what we thought was responsible and conservative; we assumed that all of our placebo patients would be on the background of tafamidis. So we essentially took the tafamidis arm event rate in our original calculations. As I just said, even given that rate turned out to be quite a bit different from what we're seeing and what's been published recently, that appears to be the case in patients in general in today's care. We haven't really changed any of our other assumptions on the treatment effect. As you know, the true treatment effect is not known, and we're not prepared to change any of our assumptions, nor have we commented on what specifically we use, other than to say that we use what our advisers said would be considered clinically meaningful for them.

Thanks, Eugene. I'll just add that we're focused on the CARDIO-TTRansform study, of course, but this change in demographics for TTR cardiomyopathy, we believe, applies to all contemporary studies evaluating investigational medicines. We've made a very strategic move to ensure a successful outcome in the study. This is a very important move, and it gives us even greater confidence in a successful outcome. Richard, your thoughts on pelacarsen?

Speaking directly to the question, how does it change our view on pelacarsen? It doesn't change it at all. Just to take you back to a remembrance of Phase II for pelacarsen, the dose that we took into Phase III achieved taking 98-plus percent of the patients to goal. The goal is to get below that threshold of 50 milligrams; it's not to get to 0. So it's a little bit different than LDL. It's a different way of thinking; lower is not better, but getting below that threshold is the goal. We're going into Phase III with a product that gets nearly 100% of the patients to where they need to be out of risk, and we're well ahead of the competition. There's competition, and that just gives us the urgency that we've had all along to get this to market as quickly as possible.

It's probably worth noting, too, that the epidemiology data is substantial and continues to grow, reinforcing the conclusion that that threshold is where you need to be to get out of harm's way. As Richard said, pelacarsen delivers on that based on a very significant large Phase II study, and we are using the same patient population and the same Phase III dose. Additionally, there's now emerging published data indicating that if you go too low on Lp(a), you can also cause some problems. There are publications indicating that if you go very low on Lp(a), you can have an increased risk for diabetes. That's associated, not causal, not proven, but there's no need to go that low. All it does is bring further risk. I also want to add that the study is fully enrolled. The study is well on its way to reading out. This study gets reviewed by independent oversight committees regularly. That drives risk down. Competitors are going from a small Phase II study to a large Phase III outcome trial, and that brings risk. We like our risk profile today, fully enrolled, on our way to read out, and getting virtually all the patients into the safe zone for Lp(a) levels. So I hope that answers your question, Yan.

Yes, thank you. Congrats again on the progress this quarter.

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

Just a quick question on fesomersen. Just with your new partner, considering you did show the data in ESRD with dialysis, and it looks to be hitting everything that you set out to demonstrate, what sort of indications would you encourage a new sponsor to chase with that asset versus the oral inhibitor competitors that look to be going for a more acute setting?

Thanks, Myles. As we've been very transparent about over the last year, we were hoping Bayer was going to take this forward based on their really positive Phase IIb data, which ended up being very positive. But we were also anticipating preparing for the potential return because they had three independent modalities being developed for targeting Factor XI: their own small molecule, an in-licensed monoclonal antibody, and in-licensed fesomersen. As you know, some of the small molecule data has been presented already. A lot of aspects look good, but I think it's a bit of a mixed bag. We're pleased with the Phase IIb data for fesomersen, but the antibody data hasn't been released yet. So they made a decision to go forward with one drug. Bayer was focused on end-stage renal disease as a potential population for fesomersen, but we believe that's too limited. We believe that a once-a-month highly effective Factor XI inhibitor that achieves knockdown of Factor XI beyond 85% could be used for prophylactic treatment to prevent thrombosis, atrial fibrillation, secondary stroke prevention, end-stage renal dialysis, and so on. We think this has the potential to be used broadly, and that's what we are looking for in a partner, one that can bring it to market quickly but also maximize the opportunity as a thromboprophylactic treatment for thrombosis.

Okay, cool. And then a quick one on the CARDIO-TTRansform study. Just with the 400 patients that you're going to additionally enroll, will they be equally balanced across the patient subgroups like wild-type versus hereditary, tafamidis experienced versus naïve? Or are there specific subpopulations as you've seen in the demographics of the 1,000 patients currently that you might want to bolster with the addition of these 400 patients coming into the trial?

Yes. Thanks for your question, Myles. This is Eugene. Clearly, the opportunity here is to be fairly intentional with the remaining portion of the population that we're enrolling because we're in a position where all sites are open. We have the ability to be more targeted in the types of patients that are being brought in, and that's what we're doing. As you said, of course, if you look at the epidemiology data, the risk is different for certain types of patients regarding outcomes, and that's what we're trying to maximize here. We're prioritizing bringing in more hereditary patients, fewer patients on tafamidis therapy, and obviously patients at later stages of their cardiomyopathic compression is a priority.

The next question will come from Jessica Fye with JPMorgan.

Can you give us an update on the Angelman program? What's the status, and when can we expect an update?

Unfortunately, Jess, we don't have a whole lot new to provide. We're enrolling the study. As you know, it's an open-label extension study. We look forward to completing the studies as rapidly as possible. We're not really planning to share any data at this time other than it’s going according to plan. We're moving along.

The next question will come from Luca Issi with RBC.

Great. This is Lisa on for Luca. This question is for Brett. Just a bigger picture. I know you've talked in the past about broadening your reach to technologies beyond antisense oligonucleotides. So I was wondering if you can comment on your latest thinking in that area.

Sure. Lisa, thanks for the question. As I mentioned in my prepared remarks, we're making great progress in advancing our technology in many different ways. We've now moved forward with a partner on a new program using LICA aimed at targeting muscle. I can't talk more about the target or the indication at this point because it's a highly competitive area, but we're looking forward to providing an update, possibly next year. That has the potential to open up new diseases for Ionis as well as partners targeting muscle. We've also advanced a new backbone chemistry, MSPA, and are supporting toxicology studies for two CNS targets. This backbone is designed to increase efficacy, potency, and durability, so less frequent dosing. We expect that to translate to CNS as well as systemic applications. So stay tuned for that. Both are broad indications. One is with a partner, and one is wholly owned. We're looking to keep the latter ourselves. As for other approaches, we will continue, as we have been for the last couple years, evaluating siRNA strategies as well as ASO strategies. Our philosophy is to let the best drug win based on preclinical data, and we expect to move our first siRNA into development early next year, not early this year. There are specific applications where we see advantages for siRNA and specific areas where we see advantages for ASOs. We will be multi-modal here. As for new platforms, we're in the evaluation phase right now about diversifying our platform capabilities. I can't say much more than that at this time, other than stay tuned. We hope to make some progress in the future regarding some of our thoughts and ideas in that area.

The next question will come from Gena Wang with Barclays.

I just have one regarding the HAE update this Sunday. So you already see pretty impressive early efficacy. Based on this early data, should we expect further improvement in attack reduction given the longer follow-up? Also, which data point will be more important regarding the percentage of patients attack-free versus the percentage reduction in attacks?

I'll start to address this, and then I'll turn it over to Onaiza for a commercial perspective since we're planning to launch this drug ourselves. From an approval standpoint, as you know, tolerability as well as sustained efficacy are critical. We're expecting to show whether that unprecedented efficacy is actually sustained for a year, as well as compliance and long-term tolerability. It's hard to get better than the Phase II data; patients were essentially attack-free once we reached steady state after week five following one dose. However, I can't get ahead of the presentation on Sunday, but what we're really looking to show is that we can sustain that unprecedented efficacy. I think as far as what's most important to patients, Onaiza?

Yes, Gena. For both physicians and patients, efficacy is, first and foremost, the highest priority. Our tested hierarchy shows that the zero attack rate is the number one efficacy measure, followed by mean attack reduction, and then followed by how much you're able to withdraw patients from acute treatment. So that's the order of priority we see, but the zero attack rate is essentially what we are trying to achieve. In our Phase II trials, we've shown significant outcomes aiming for 97% zero attack rates through the first five weeks. It's worth noting that in the current marketplace, we recently completed market research to determine where patients are currently at with Takhzyro being the market leader. Notably, we're still seeing reports of approximately three HAE attacks per year among patients; that number is significant. We believe our treatment will fulfill this unmet need.

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

A quick one on the GSK partnered HBV program, the pelacarsen. Can you discuss how your approach differentiates from competitor approaches that may be using dual or even triple combo therapy, some of which are RNA inhibitory knockdown based?

Great question, Joe. I'm going to ask Eric to comment on that.

Yes, sure. The key differentiator is that pelacarsen, as a single agent, was able to accomplish things that other approaches haven't been able to achieve. This was evidenced by the B CLEAR study results, both showing around a 30% HBs antigen undetectable level at the end of treatment and then maintaining that for about 10% of patients at 24 weeks post-study. This highlights pelacarsen's potential to achieve the elusive functional cure in HBV, where patients could be removed from therapy. GSK is doing a great job with this program, contemplating combination approaches. They have two studies ongoing right now that add interferon on top of that. I think some of the competitive studies you're referring to use HBV RNA-lowering agents in combo with interferon and showed some S antigen loss, but that was at the end of the study, not after removal of treatment. The field is moving forward, and it’s great to see discussions around HBV functional cures at the recent meeting. I think it's beneficial for patients. GSK and we believe that BEP could form the foundation for HBV treatment, including combinations involving other agents to hopefully enhance the rate of patients who can remain therapy-free.

I want to emphasize that the 9%-10% functional or undetectable levels post-dosing at 24 weeks, reflects unprecedented results for monotherapy. That's a marketing point that can begin the conversation about potential treatment options and serves as a firm foundation for future examinations and combination treatments. We know that undetectable levels have had better results in patients with lower HBV burden coming into the study, so this is all just the beginning.

The next question will come from Paul Matteis with Stifel.

This is James on for Paul. Maybe just one on olezarsen. It looks like it could potentially be Ionis' first drug launch, and I guess, one, is that how you're thinking about it today? Would you plan to launch it yourself? If so, what would the investment look like? And then maybe just a quick thought on what you would want to see efficacy and safety-wise to be confident in a competitive drug profile there.

Sure. Onaiza, go ahead.

Yes, that is an accurate assumption that this is likely Ionis’ first self-commercialization outside of our previous collaborations. We are focused on two indications: the first is in FCS, and the second is severe hypertriglyceridemia, which encompasses a large patient population in the U.S. with close to three million patients having elevated triglycerides. The investment required is looking quite focused, particularly given the large patient base, enabling us to approach general practitioners, while also utilizing innovative tools across multiple channels and leveraging AI to identify patients through predictive analytics. We are preparing actively as these pivotal CORE trials are underway. As for the competitive profile, it’s worth noting that the standard of care consists of fibrates, niacin, and Vascepa, which provide only 20%-30% reductions in triglycerides. We expect olezarsen to achieve 2.5x-3x beyond those reductions. Our Phase IIs were substantial, despite not being on patients with significantly elevated triglycerides—they were around the 500 mg threshold. During those trials, we already demonstrated a 62% placebo-corrected triglyceride lowering. As a reminder, we are studying two doses, both the 50 mg and the 80 mg, and our original Phase IIs were conducted at 50 mg. We are indeed well ahead of our competition and possess first-mover advantages in the market, preparing to shape the market and drive pricing strategy.

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

This is Tommy on for Salveen. Our question is regarding tornado—could you envision sharing detailed functional data over time, such as mNIS+7 trajectories at 1, 1.5, and 2 years so that people can appreciate the benefit you're getting on these measures over time?

Yes. Thanks for your question. We anticipate providing a thorough update on all co-primaries and key secondary endpoints once we look at the primary endpoint data for week 66 next year. Until that point, the key results have been disclosed, but we won't be able to share additional details. However, we expect to present the week 66 data in mid-next year and prepare publications as well. We're excited about sharing the full data set when we obtain it.

The next question will come from Yaron Werber with Cowen.

This is Brendan on for Yaron. Just a quick one from us. First on sindelarson for acromegaly; I know you have many advancing programs we can't cover all of them here, but what is the latest timing and presentation of that data, and whether you are targeting a medical meeting for the release? Then, also, are there any updates on the Huntington's program with Roche, either on timing or the overall clinical plan with tominersen there?

For our acromegaly program, we’re still planning to review the Phase II data this year, right, Richard? However, we probably won’t get them out this year, especially due to the limited windows remaining. It’s a small Phase II study, and we likely won't identify significant insights until next year. For Huntington’s, Roche has shared much data from the post-hoc analysis recently. While it's post-hoc, it is compelling data showing patients with less disease burden performed better with less frequent dosing of tominersen. Roche has articulated their trial design, which consists of three cohorts with about 120 patients each on two doses, plus one placebo group. This is a large study, and they haven't yet provided timing on when the first participants will be dosed, but it's not far off.

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

For GSK as well as Roche, given they are advancing the program forward to pivotal Phase III studies, do we anticipate any milestone payments to the company later this year or early next year?

Yes, with the license fee and milestones we've already earned in the second and third quarter of this year, we are looking forward to regulatory approval milestones for that drug. For Roche, there may be additional milestones as the geographic atrophy study continues to advance with that same drug, IONIS-FB-LRx.

Okay, that's very helpful. Maybe one more question here, which is regarding the HGT for treatment-resistant hypertension. You will have a data readout; could we get some more color on what's to be expected later this year?

Yes, thanks, Yale. We have three studies in progress: the refractory hypertension with Gen 2, and a heart failure study with the same Gen 2 molecule, which is still ongoing, along with Gen 2.5 in hypertensive patients. We'll likely pull all the data together and plan a presentation or announcement early next year. We want to look at the full dataset across all drugs and indications. Therefore, we plan to finish at least one study this year while merging the outcomes of all studies to provide a neutral and coherent analysis.

Thank you all for attending today's presentation. You may now disconnect.