Ionis Pharmaceuticals Inc Q3 FY2023 Earnings Call

Good morning, and welcome to Ionis' Third Quarter 2023 Financial Results Conference Call. As a reminder this call is being recorded. At this time, I would like to turn the call over to Mr. Wade Walke, Senior Vice President of Investor Relations, to lead off the call. Please begin, sir.

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; Onaiza Cadoret, Chief Global Product Strategy and Operations Officer; Richard Geary, Chief Development Officer; and Beth Hougen, Chief Financial Officer; Eric Swayze, Executive Vice President of Research; and Eugene Schneider, Chief Clinical Development Officer will also join us for the Q&A portion of the call. I would like to draw your attention to Slide 3, which contains our forward-looking statement. During this call, we will be making forward-looking language 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, Wade. Good morning, everyone, and thanks for joining us on today's call. Since taking the helm at Ionis nearly four years ago, we have executed on a strategy to deliver next-level value. We have done so with a clear vision and laser focus on our strategic objectives to bring our medicines directly to patients, build our wholly-owned pipeline, and to extend our leadership in oligonucleotide therapeutics. Our successes this year, which are a direct result of our efforts in these key areas, move us closer to achieving our ultimate goal to deliver a steady cadence of new transformational medicines to patients and to generate next-level value for all Ionis stakeholders. We are on the cusp of delivering our near-term commercial medicines to patients starting with the first potential approval of eplontersen this year. We and our co-commercialization partner AstraZeneca are prepared to launch eplontersen following U.S. approval. We're also executing on a global regulatory strategy with potential approvals in the EU and Canada next year. Additional filings are also planned, positioning us for a steady cadence of approvals around the world. We recently achieved another of our key objectives for eplontersen with the publication of a comprehensive review of the Phase 3 neurotransform study results in JAMA. Publishing our results in a highly respected journal like JAMA reflects the importance of our Phase 3 neurotransform study for the treatment of ATTR polyneuropathy and showcases the strength and quality of our results. Based on its strong overall profile, including highly positive Phase 3 data together with the freedom of a simple at-home monthly self-administration profile, we believe eplontersen is well positioned to become the therapy of choice for ATTR patients who remain underserved by current therapies. Following closely behind eplontersen are olezarsen and donidalorsen, our wholly-owned near-term commercial opportunities. We were very pleased with the positive top-line data we reported last month from our olezarsen Phase 3 BALANCE study in patients with significant elevated triglycerides. Olezarsen showed significant reductions, which was the study's primary efficacy endpoint, along with a favorable safety and tolerability profile. But most importantly for patients, olezarsen demonstrated substantial reductions in acute pancreatitis events, making olezarsen the first lipid-lowering therapy to achieve this result in the clinical setting. With these highly positive results, we are on track to file for marketing approval in the U.S. and EU early next year, positioning olezarsen for its first potential approval as early as the end of next year, assuming priority review in the U.S. We also continue to be encouraged by the performance of donidalorsen, our medicine for the prophylactic treatment of hereditary angioedema. We recently reported two-year open-label extension data which demonstrated favorable safety and tolerability along with durable and sustained protection against HAE attacks. Consistent with the previously reported one-year OLE results and our Phase II results, we are getting closer and are looking forward to our Phase III readout with data expected in the first half of next year for donidalorsen. We also made significant progress recently in further strengthening our wholly-owned neurology pipeline by advancing zilganersen, our treatment for Alexander's disease, into Phase 3 development. Advancing zilganersen further expanded our rich Phase 3 pipeline to a total of nine drugs in development for eleven separate indications. And importantly, we remain on track to accomplish our other key strategic goals across the business, including achieving our 2023 financial guidance. With that, I'll turn the call over to Onaiza, to discuss our expectations for the eplontersen launch and to briefly review the status of our go-to-market activities for olezarsen and donidalorsen. After Onaiza, Richard will discuss our recent pipeline progress and after that Beth will review our third quarter financial results. And then, I'll wrap things up before taking your questions. And with that, over to Onaiza.

Thank you, Brett. As Brett outlined, and as you will hear from Richard in more detail in a moment, Ionis' pipeline holds tremendous promise, and today we are ready to begin delivering our medicines to patients. With an estimated 40,000 patients worldwide and fewer than 20% of patients on an approved treatment, hereditary ATTR polyneuropathy remains significantly under-diagnosed and largely underserved. In large part the low rate of diagnosis is driven by the systemic nature and the heterogeneous presentation of this disease, while peripheral neuropathy may be the most important symptom in many patients; others may present with cardiomyopathy and still others with symptoms like gastrointestinal disease leading to muscle wasting. By leveraging Ionis' deep knowledge of ATTR and AstraZeneca's significant commercial reach, we are uniquely positioned to recognize ATTR in undiagnosed patients and get them on treatment early in their disease progression. In doing so, we are well-positioned to grow this largely untapped market. Our field team is built and deployed and already executing on our strategy to drive eplontersen growth through disease education and brand awareness. Additionally, we recently launched our unbranded disease education campaign called "See the Patterns" aimed at accelerating diagnosis by helping healthcare professionals spot potential ATTR in patients with seemingly disparate symptoms. We also recently launched our healthcare professional website aimed at driving disease and brand awareness among ATTR treaters. Additionally, we are investing in rich data sources with the potential to identify ATTR-PN patients and support the field team's effectiveness to improve the diagnosis and treatment rates. With this potential approval in about six weeks, we and AstraZeneca are ready to deliver eplontersen to patients with ATTR polyneuropathy. As our launch gets underway, a key measure of our success will be in achieving our goal of eplontersen becoming the preferred choice for newly diagnosed patients with ATTR polyneuropathy. We expect olezarsen to be the first medicine we launch independently. We are developing olezarsen in two indications: the rare FCS indication and the broader sHTG indication with potential first-mover advantage in both settings. Additionally, the fast-track designation we have for FCS gives us the potential for an expedited review. Together with the extremely positive results we reported from the Phase 3 BALANCE study in patients with FCS, we are moving forward with our launch preparations with even greater pace. With the capabilities established for the eplontersen launch, we are in a strong position to build upon this foundation and enable stronger launch readiness for FCS. As we prepare for the follow-on sHTG indication, we plan to further scale these capabilities to realize the full potential of the product pending Phase 3 trial results and FDA approval. We expect our next independent launch to be with donidalorsen for the prophylactic treatment of HAE. This is an attractive market for us because it involves a fairly concentrated set of prescribers, allowing us to deliver donidalorsen to HAE patients with an efficiently sized field team. With the compelling Phase 2 and OLE data we have seen to date, together with a once-monthly self-administration profile, we believe donidalorsen is positioned to be an important new prophylactic treatment for HAE patients once approved. I'm pleased to say that we are right where we should be in preparing for our first independent launches of olezarsen and donidalorsen. Our commercial infrastructure is in place and we are ready to begin delivering our medicines to people in need as they come to the market. This is a very exciting time for Ionis. I'm proud to be part of it, and I look forward to keeping you up-to-date as our next important steps unfold. Now, over to Richard.

Thank you, Onaiza. We could not be more pleased with the performance of our pipeline. Eplontersen has continued to perform exceptionally well, demonstrating durable and sustained efficacy and safety through 85 weeks of treatment in patients with ATTR polyneuropathy. Just this morning, we presented new data at the European ATTR amyloidosis meeting that further reinforces these results, demonstrating improvements in measures of neuropathy impairment and quality of life seen in a substantial number of patients at 35 and 66 weeks that were sustained through the 85-week analysis. Benefit across secondary endpoints at 85 weeks showed improved neuropathy-specific and physical health-related patient quality of life, stabilized or improved ambulatory status, and stabilized nutritional status with eplontersen treatment. Last month at HFSA, we showed data demonstrating improvement in cardiac function and structure in a predefined cardiac subpopulation of polyneuropathy patients from the neurotransform study. The positive results from NEURO-TTRansform also support our confidence in the potential for eplontersen to benefit patients in the larger ATTR cardiomyopathy indication. With CARDIO-TTRansform fully enrolled, we remain on track for data as early as the first half of 2025. As a reminder, with over 1,400 patients, CARDIO-TTRansform is the largest study in this patient population to date, designed to generate the data physicians and payers want and need to understand the value eplontersen offers for patients and to enable the best possible treatment decisions. Following eplontersen, olezarsen is the next drug we expect to bring to market, and is the first we expect to commercialize independently. In the BALANCE study, the 80-milligram dose of olezarsen demonstrated statistically significant reductions in triglycerides, robust target engagement, and a favorable safety and tolerability profile consistent with the profile seen with our other like medicines. In addition, olezarsen demonstrated unprecedented, substantial, and clinically meaningful reductions in acute pancreatitis attacks. This is remarkable, because it's the first time a lipid-lowering therapy has ever achieved this result in a clinical trial setting. Based on the positive data we reported from the Phase 3 BALANCE study, we believe that olezarsen is poised to become the standard of care for patients with FCS. Our next step will be to file for marketing approval in the U.S. and EU in the first half of next year, positioning olezarsen for its first potential approval in late 2024, assuming priority review in the U.S. In addition to our clinical development program for FCS, we also have an ongoing program for patients with severe hypertriglyceridemia, or SHTG. Phase 3 studies in SHTG patients are ongoing, and we expect those studies to read out in late 2024 or early 2025 depending on enrollment. Following closely behind olezarsen is our next wholly-owned medicine donidalorsen to treat patients with hereditary angioedema. Despite several treatments already on the market, HAE continues to represent a significant unmet need. For example, in a study recently conducted by the Hereditary Angioedema Association of over 500 patients with HAE, only 13% of these patients reported having good control of their disease, with more than 85% reporting two or more attacks per year. Data reported from the ongoing Phase 2 open-label extension study of donidalorsen show sustained and durable reductions in HAE attacks and favorable safety and tolerability over two years and support donidalorsen's potential to address the unmet need. We look forward to presenting a comprehensive look at the two-year OLE data next week at the ACAAI Conference. With enrollment completed in the Phase 3 OASIS-HAE study, we remain on track for data in the first half of next year. From our robust late-stage pipeline, we look forward to updates from bepirovirsen and IONIS-FB-LRx. Next week at AASLD, GSK plans to present new data from the Phase 2b B together study of bepirovirsen in combination with pegylated interferon. This weekend at Kidney Week, we plan to present new interim results from our ongoing Phase 2 study of our Roche partnered medicine IONIS-FB-LRx in patients with IgA nephropathy. We also made significant advances with our industry-leading neurology franchise this year. Today, we have two approved breakthrough medicines for neurological disease on the market: SPINRAZA and QALSODY. We have another 12 in clinical development and more than 10 new programs in preclinical development or lead optimization. Among our partner neurology programs, we recently completed enrollment in the Phase ½ study of ION582 in patients with Angelman syndrome, putting us on track for data around the middle of next year. We were encouraged by the positive data our partner Biogen recently reported from the Phase 1b and long-term extension studies of IONIS-MAPTRx in patients with early Alzheimer's disease. Data presented at the clinical trials on Alzheimer's disease conference showed numerical improvements on multiple cognitive and functional scales and continued favorable safety and tolerability in this small early-stage study. The data published in JAMA Neurology showed a rapid, substantial and sustained reduction in tau and phosphorylated tau in CSF as well as reduced tau pathology on PET imaging with up to 100 weeks of IONIS and MAPTRx treatment. We're particularly excited with the progress we're making in building and advancing our wholly-owned neurology pipeline, which represents one of our highest priorities. As Brett mentioned, we advanced zilganersen into Phase 3 development in patients with Alexander's disease, a rare debilitating pediatric leukodystrophy with no approved treatment. We're on track to advance ION 717 into a Phase 1/2 first-in-human study in patients with prion disease before the end of the year. Following ION 717, we expect to advance three more wholly-owned neurological disease medicines into the clinic next year. This has been an eventful year so far, and we're looking forward to several additional key events in the coming months, including the U.S. eplontersen approval launch and additional regulatory filings and approvals outside the U.S. Olezarsen regulatory filings in FCF and donidalorsen Phase 3 data. We will keep you updated on our progress on these events and more throughout the coming year. And with that, over to Beth.

Thank you, Richard. Our year-to-date financial results keep us on track to achieve our 2023 financial guidance while we continue to execute on our strategy to unlock next-level value. Revenue continued to be substantial and sustained with revenues of $144 million and $463 million in the three and nine months ended September 30, 2023, reflecting a 10% decrease and a 6% increase, respectively, compared to the same periods last year and driven by the timing of certain partner payments. As anticipated, our operating expenses and operating loss for the third quarter and year-to-date increased over the same period last year as we advanced our commercial readiness activities and our pipeline, especially our late-stage programs. We remain well capitalized with $2.2 billion in cash and investments at the end of September, enabling us to continue investing in our strategic goals. Our commercial revenue from SPINRAZA royalties was $67 million and $179 million in the third quarter and year-to-date, respectively, reflecting SPINRAZA's resilience against emerging competition in the U.S. and abroad. SPINRAZA's global sales in the third quarter demonstrated a low single-digit increase compared to last quarter and compared to the same quarter last year. As a result, our revenue from SPINRAZA royalties increased by 9% compared to last quarter and 8% compared to the same quarter last year. We earned R&D revenue of $60 million in the third quarter and $233 million year-to-date. The significant R&D revenue we continue to generate reflects the value that Ionis' technology is creating as numerous partnered programs advance. In line with our goal to invest for revenue growth, our non-GAAP operating expenses increased in the third quarter and year-to-date compared to last year. With most of our ongoing Phase 3 studies fully enrolled, our study costs increased as expected, which resulted in higher R&D expenses. As we prepare to launch eplontersen, olezarsen, and donidalorsen, our SG&A expenses also increased modestly year-over-year. Our year-to-date results keep us on track to meet our 2023 financial guidance. We continue to project revenues of more than $575 million. We expect our fourth-quarter R&D revenue to be driven by the potential $50 million milestone payment from AstraZeneca for the U.S. approval of eplontersen, R&D revenue from continued development about eplontersen, and additional revenue from Biogen and from our recently expanded collaborations with Novartis and Roche. We project our 2023 non-GAAP operating expenses to come in at the higher end of our guidance, which is between $970 million and $995 million. Looking ahead, we expect to generate a substantial and sustained base of R&D revenue from multiple sources in 2024 as our partnered programs advance. We expect that eplontersen will continue to be an important source of revenue in 2024. We have the potential to earn a milestone payment for an additional eplontersen approval outside the U.S. We also expect to begin generating modest royalty revenue next year with growth expected as the launch ramps up. We project our expenses to grow modestly next year, with our R&D expenses approaching steady state as our late-stage programs are fully enrolled and our SG&A expenses ramping up in line with the planned launches of eplontersen, olezarsen, and donidalorsen. We have a strong financial foundation, substantial recurring R&D revenue, a substantial and sustainable royalty revenue that can continue to grow, and we expect to add new product revenue from our advancing and expanding wholly-owned pipeline. Together with our prolific technology, we believe we are on a path to successfully bring our medicines to patients and to unlock next-level value. And with that, I'll turn the call back over to Brett.

Thanks, Beth. We are very proud of the remarkable progress we've made this year. We believe that the successes we've achieved so far this year position us to drive substantial value for patients, our shareholders, and all Ionis stakeholders. Strategically, we have arrived where we are today by being focused on a clear vision and on all our support and strategic objectives necessary to achieve our vision. We've now established all of the functional capabilities we need to deliver a steady cadence of new and potentially transformational medicines to the market. We are advancing and growing our wholly-owned pipeline and have established Ionis as a leader in cardiovascular and neurology drug development. We continue to extend our leadership position in oligonucleotide type therapeutics by expanding and diversifying our technology, further optimizing our capabilities for existing therapeutic areas, and opening up new areas for drug discovery. We continue to strengthen our financial foundation, providing the means to support all our strategic objectives. Today, with one of the most robust late-stage pipelines in the industry, with nine medicines in development for eleven indications, we're turning that promise into new medicines for patients in need and not just one or two, but a steady and growing cadence of new transformational medicines over the mid and long term. In achieving this goal, we are positioned to drive great value for all Ionis stakeholders. With that, I'll now open the call up for questions. Operator?

Thank you. We will now begin the question-and-answer session. The first question will come from Gary Nachman with Raymond James. Please go ahead.

Hi. Thanks for taking the question. So, on eplontersen for ATTRPN, any additional updates regarding your interactions with the FDA? And how everything is progressing in front of the PDUFA? Have they requested any additional data and are label discussions progressing in the way you would like them to? And then, just on the commercial plans. Given the competitive dynamics in the space with similar products, how will payers be viewing eplontersen? What's your work telling you there? Will all these drugs be covered on most formularies? And where is AstraZeneca on the hiring of the sales force? Just give us a sense of how big you think that will be? Thanks.

Thank you, Gary. I'll start with the first part and provide a brief update on regulatory matters, and then I will ask Onaiza to address the second part of your question regarding competitive dynamics. We typically do not comment on ongoing regulatory discussions for drugs under review for potential approval. However, I can confidently say that we are very pleased with the progress we are making with the FDA in bringing eplontersen towards a timely potential approval by the PDUFA date of December 22. Everything is proceeding as planned in that regard. I also want to remind everyone that our filings have been accepted in Canada and Europe, and we are seeking potential approvals for those markets as well for eplontersen in the treatment of ATTR polyneuropathy. Onaiza?

Hi, Gary. Your launch plans are really underway. I would say they're actually in place. We have hired all the necessary people for a very, very effective launch. The salespeople, as you know, are being led by AstraZeneca, are hired and deployed in the market. They are in the field. They are working on disease and brand awareness, really given that this is a very growth market, identifying with different physician sets the types of symptoms that ATTRPN patients present with is very much underway. You've seen some of the campaigns like "See the Patterns." They’re out there really since the last month in the field. We are just awaiting approval; PDUFA is December 22 and all things are in motion. Our nurse case managers on the Ionis side are hired and have been trained. Since they’re mostly post approval, we will deploy them right after. And as you know, the field medical team has been in place for the last 18 months to two years. So, all signals are ready to go. From a payer perspective, I think we have a very strong payer strategy. We've done a lot of research with the majority of the payers in the U.S. We don't expect anything different than other types of agents that have been priced based on the analogs of rare disease pricing. We believe this is a really active rare disease, and we do not expect tons of beyond the normal prior authorization for rare disease to get through. We haven't seen much shift in the landscape here so far.

All right. Great. Thank you.

The next question will come from Luca Issi with RBC Capital. Please go ahead.

Great. Thanks so much for taking the questions. Maybe two quick ones. One on Hepatitis B. What was your reaction to GSK inlicensing the ex-RNAi from Arrowhead and J&J, given that they already have a sound thing agent with you? Why do you think they need a second one? And then maybe circling back on the prior question, so TTR polyneuropathy in PDUFA, any color on manufacturing? Has the tech transfer to AstraZeneca been successfully completed? Has the FDA expected the facility that will provide the commercial supply? Just trying to understand if there is anything that keeps you up at night ahead of PDUFA? Thanks so much.

Thanks, Luca. So we have a very good relationship with GSK, so we're aware of what was coming and what was announced this week. The way to think about it is that the acquisition of the RNAi molecule from Vanson really represents a double down, a triple down if you will on bepirovirsen. Bepirovirsen is the only treatment that has produced a meaningful percentage of patients achieving a functional cure in patients with chronic hepatitis B. In the Phase IIb CLEAR study, we demonstrated with GSK about a 10% functional cure rate. However, in patients with a lower HBV burden, such as 1,000 IUs per milliliter, our functional cure rate was well into the 20% range, which is really impressive. The strategy that GSK has stated for bringing in the RNAi molecule, which has not shown functional cures, but what it has shown is a reduction in HBV antigen levels to levels that a substantial percentage of patients can get below that 1,000 IU level is to do sequential treatment to reach even more patients to achieve a greater percentage of functional cures by bringing patients down to a level maybe below 1,000, and then coming in with bepirovirsen. This is an added dimension to a very comprehensive clinical program for bepirovirsen to reach as many patients as possible and achieve the highest percentage of functional cures. We are very pleased about this new outcome with GSK for bepirovirsen. Beth, maybe you could talk a little bit about where we are with our launch preparations for commercial supply?

Sure. Absolutely. We are all ready to go just as we are on the commercial side and the medical affairs side. All of the products needed for launch have been manufactured. It was manufactured through the regulatory process, has been reviewed, and is ready to go. We just are waiting for a final label to do labeling and packaging and get product into channel shortly after approval, and all of the tech transfer necessary from Ionis to AstraZeneca with the commercial manufacturer has been done. All of that has gone extremely well. So we are all systems ready to go.

Great. Thanks so much.

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

Good morning and thank you for the opportunity to ask questions. I have two quick ones. The first is regarding the SPINRAZA sales, which I believe will typically be reported by Biogen. However, you mentioned a small quarter-over-quarter growth. Should we interpret this as a sign of stabilization for the franchise in the broader SMA market? I have a quick follow-up after this.

What I would say is we're very pleased with the low single-digit growth against last quarter and the previous year’s same quarter. We believe that demonstrates SPINRAZA's continued resiliency even in the face of emerging competition. Beyond that, I really need to respect Biogen's earnings call next week, and I can't go any further.

Okay, great. That’s helpful. In terms of a JAMA publication regarding the eplontersen to sustain the benefit, how should we think about that to incorporate into the marketing strategy, particularly for newly treated or untreated patients?

The publication specifically? I mean, that's going to be a really effective tool to, right, Onaiza?

Yeah, I think with the promotional and regulatory guidance, looking at the JAMA publication and where our promotional messages are headed. It's going to be highly supportive. The JAMA publication is also very consistent with the label that we expect, so that will allow for use by both the medical teams as well as the sales teams, and that’s what we expect.

So in other words, although our package that's under review at the FDA is based on the week 35 interim data that we reported last year, having this publication for weeks 66 and 85 will be very, very helpful from a marketing standpoint, and we expect to utilize that publication very effectively. I think that was the basis of your question.

Thanks, Onaiza and Brett.

The next question will come from Paul Matteis with Stifel. Please go ahead.

Hi, this is James on for Paul. Just one on olezarsen, quickly. I guess as we get ready for the FCS launch, how are you thinking about pricing just given that the higher trade opportunity may be coming behind it? And assuming there will be different price points there. And I guess, just as you've kind of put some of this commercial infrastructure in place for the FCS launch, how much leverage either from like a sales force or spend perspective do you anticipate getting from this FCS infrastructure as you think about launching the higher triglycerides opportunity? Thanks so much.

Sure. We've done some extensive work with payers to understand this dual indication that we're going after in prevalent and rare disease. Does that actually really make a shift in your pricing strategy? We know that once we have the more prevalent indication, the pricing will obviously be in line with good cardiovascular premium-priced products. We see really no indication in terms of, thinking about this differently as a result of the two indications, if they were to be single indications in different molecules. We've priced the rare disease along rare disease pricing corridors and the broader indication along the corridors of a good cardiovascular premium price benchmark as well. So, you should think about it that way. I would say that the FCS account sales team will be calling on a much smaller portion than the total universe of physicians you would call on for SHTG. It will be more focused on lipidologists, but extend out a bit beyond that as well for where we believe the FCS patient population is. We're doing a lot of work from our integrated data analysis and qualifying where those physicians are that actually have FCS patients. As we get into the broader indication, those sales teams will obviously stay on board, and we will extend the size of the sales team for the broader SHTG market to incorporate some of the other physician specialties that we believe will be very important for the uptake of that product.

Excellent. Thank you.

The next question will come from Allison Bratzel with Piper Sandler. Please go ahead.

Hi. Thanks for taking the question. I just wanted to ask on the anti-tau update last week for BIIB080. I know Biogen is responsible for the development of the asset. But I'm still curious just to get your thoughts on how that approach could fit into the Alzheimer's treatment paradigm, be it in combo or monotherapy or what have you. I'm then hoping you could also just describe how that data may influence your confidence in the wholly owned neurology assets. And then on a second front, just on the complement Factor B program looking at that interim Phase 2 data being presented at ASN in a couple of days. Is there any update just on your view of the IgA nephropathy market and potential opportunity in IgAN just given the context of an evolving competitive landscape there? Thank you.

Thank you, Allison. The Phase 2 study evaluating tau in patients with Alzheimer's disease is underway and enrolling. It’s a very extensive study with more than 700 patients to be treated for well over a year, with the primary endpoint really being efficacy improvement in cognition. The purpose of that Phase 2 study is to really make a decision to set up and support a path forward to go to Phase 3 development for a pivotal study. In this study, we are exploring different dose levels as well as different dose regimens including twice a year dosing. That's based on the data that you're referring to published in JAMA Neurology, which was presented at CTAD last week and is incredibly supportive of that Phase 2 study and the tau program overall. We and our partner Biogen could not be more thrilled with the data generated from the long-term extension of the Phase 1/2 study in patients with Alzheimer's disease. Tau is considered by exploring essentially all the efforts in the field as being the most important target for Alzheimer's disease, based on the neurofibrillary tangles that appear just before cognitive impairment occurs. It’s downstream of beta amyloid, which can be present long before cognition deficits occur. However, it’s a difficult-to-drug target because what matters most is intracellular tau that closes the neurofibrillary tangles from neurodegeneration. What we have shown for the first time is not only can we substantially lower all forms of tau in CSF, but we can actually reverse tau pathology in the long-term extension data in patients, as supported by PET imaging. We also have signs and trends that patients are actually improving in cognition. So we couldn't be more thrilled about the data. This builds on our confidence from the CLIA Phase 2 study that's underway. As far as combination or monotherapy, that's the start of a development program for a drug leading the way to target tau. The Phase 2 study is intended to assess the benefits of tau on cognition as a monotherapy. That does not preclude future studies looking at different combinations as this field evolves, whether in combination with beta amyloid treatment or other therapies. That will require further development, but it can make sense. We can see how those two mechanisms can actually complement each other and possibly synergize. So all that is on the table, but right now Biogen and Ionis are focused on the Phase 2 study to bring that forward as quickly as possible. As far as the IgAN landscape, FB-LRx to be presented at Kidney Week coming up will be an additional data cut that was presented at Kidney Week last year in patients with IgAN nephropathy showing more data, more patients, longer treatment showing reductions in proteinuria. The competitive landscape is crowded; there's no question. We're glad Roche has taken a lead on this because they have tremendous global strength and presence to bring the drug to as many patients as possible. The hope is to see how this positions itself in the Phase 3 data, as this will be the determining factor.

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

Great. Thanks for taking the questions. Three questions if I may. On eplontersen, what launch metrics would you provide so that we can have an understanding of how the drug is performing in the market in the early launch quarters? On the tau program, can you talk about how you see the visibility of the Inotersen route of administration in this very large indication? Lastly, on the Angelman syndrome program, following the recent updated data from Ultragenyx, any insights you could share regarding how your program could be differentiated from that program as we look forward to data in mid-2024? Thank you.

Thanks Yanan. Maybe we’ll start with launch metrics?

Sure. So Yanan, the way to think about this market, as I said, it’s a growth market and we have a lot of patients to get diagnosed and treated on eplontersen. The phenomenon that you might be seeing now with switches is very temporary. We have a focus on growth and a growth mindset on newly diagnosed patients. Our launch success will be measured on getting eplontersen as the preferred choice for newly diagnosed patients who are new to silencers.

Next year, we’ll be providing some metrics and we’ll see how that – so stay tuned for that Yanan. Regarding the tau program, Alzheimer's disease, despite the remarkable progress made recently on delivering medicines to the market for patients, is still a very severe neurodegenerative disease with a very high unmet medical need. Like I touched on earlier, we think tau is the best target for treating this disease broadly, and with that comes the need for treatments. We believe that intrathecal delivery will be well accepted if the drug is as efficacious as we expect it to be. The tau program is an example of the great progress we're making in further optimizing and advancing our neurological disease drug discovery capabilities with medicinal chemistry and experience. In the tau program, we have a treatment arm expected to be efficacious with twice a year dosing, so we've moved from monthly to every three months for many programs and now we've been moving some programs to twice per year dosing, which is part of the tau program in Phase 2 development today. As we highlighted at Innovation Day, we're making great progress from our research organization in overcoming the blood-brain barrier as an obstacle for delivering our treatments for using subcutaneous or intravenous administration. Tau is on our radar as are other programs in our pipeline. So no promises there, but we are pleased with the progress we're making there. Regarding the Angelman syndrome, I prefer not to comment on other companies' programs. What I will say is that we are fully enrolled in our Angelman's program, having actually over-enrolled the study. We expect data mid-year next year, which we expect to include data on efficacy as well as safety and biomarker data from that trial. This trial is designed to set up a potential Phase 3 decision based on all that. What I can say is that we have vast experience with our platform in neurological diseases. Thousands of patients have been treated for long periods of time with our chemical platform, and we believe that bodes well for the Angelman patient community, as they'll benefit from this experience we have at Ionis with delivering neuro drugs for severe neurological diseases. So stay tuned for data next year. We are very much looking forward to it.

Great. Very helpful. Thank you.

The next question will come from Debjit Chattopadhyay with Guggenheim. Please go ahead.

Hey. Good morning, team. This is Robert on for Debjit. Thanks for taking our questions. Two from us this morning. First, could you share any pricing thoughts on eplontersen? Specifically, would you anticipate launch price in line with current PN treatments on the high end or CM treatments on the low end? And for the Alexander program, what pace of enrollment would you hope to see in the Phase 3? And subsequently, when would you potentially anticipate a Phase 3 readout based on those timelines? Thank you.

Yes. We expect that again the two indications are both rare disease indications, but they are priced differently if you looked at analogs in the marketplace. Based on all the work that we've done, we don't believe there's any reason to kind of shift from that in terms of our pricing strategy. So I would expect that as the price is set by AstraZeneca that polyneuropathy would be priced according to the analogs and benchmarks of other polyneuropathy products.

Regarding our newest Phase 3 program, our Alexander disease program, most of the time enrolling rare disease indications can be challenging because finding patients for your study can obviously present challenges. However, what's unique about our Phase 3 program for Alexander disease is that we designed a seamless Phase 1 through 3 design, so it’s all done at the same sites. The protocol has already been established. After our Phase 2 results, we had two decisions to make, one being to dose escalate or to move into Phase 3. During that review process, we paused enrollment since we didn't know what the next step would be for the program. Patients were on the sidelines waiting to get into either the dose escalation phase or the Phase 3 part of the program. With that said, we think enrollment will go well for the Alexander program because we have patients on the sidelines waiting to qualify to enter our Phase 3 program now that we've activated it. Thus, enrollment is ongoing, and we expect data in 2025.

The next question will come from Yaron Werber with Cowen. Please go ahead.

Hi, guys. This is Brendan on for Yaron. Thanks so much for taking the question. Just a couple of quick ones from us. Just on tau, excuse me, sorry if I missed this, but just wondering if there's any plan for any interim look at the Phase 2 study or any possibility of any additional data updates there before the full Phase 2 readout, assuming maybe 2026 for the full Phase 2. So just wondering if we can expect anything new there in the meantime? And then quickly on donidalorsen. Obviously, you have a few different studies ongoing there, but I think you're planning to incorporate into one filing, maybe including the switching study, etc. So can you just maybe give us a sense of timing for data beyond the top-line readout in the first half of next year? Maybe how long thereafter do you think you'd need to collect and analyze data, and if you're thinking to file in the second half of next year if that's fair to assume? Thanks very much.

Sure. There's no plan for an interim look in the Phase 2 study for the tau program at this time. That's a short answer. It’s important to get this study right, and for that we require the richest dataset possible. The goal is to show evidence in supporting a Phase 3 decision to improve cognitive impairment. This study will take time. It's over a year long and consists of more than 700 patients. Thus, no interim look at this time. For donidalorsen, I don’t think we’ve stated that we're expecting to include switch data in the filing for the NDA. Really, the Phase 3 data along with all the other data we've generated from Phase 1 and Phase 2 will be sufficient to support a filing assuming a positive outcome. The switch data from our study, which, to our knowledge, we’re the only sponsor that has conducted a true switch study in which patients already on an existing treatment switch to donidalorsen, is anticipated to yield data we expect to see in the next year. We will generate information that prescribers will want to understand before switching treatments. Essentially, we are gathering tolerability and sustained efficacy information in this market which is a switch market. But we have no plans to include that in the NDA filing for donidalorsen at this time.

We believe that the publication will be more than sufficient to be consistent with the label to be used actively by our sales teams in promotion. If it occurs all ready alongside of it, we could potentially add it in, but it's really not a requirement nor do we think it's necessary for commercial uptake. We like it in the publication. That’s our strategy going forward.

Okay. Great. Thanks very much.

The next question will come from Jessica Fye with JPMorgan. Please go ahead.

Hey guys, good afternoon. Thanks for taking my questions. Can you remind me of your expectations around whether in addition to a clear impact on triglycerides, whether you believe you could show an impact on pancreatitis for olezarsen in sHTG? And then second, forgive me if you stated this, but for CARDIO-TTRansform, I believe the ball is up to 140 weeks. I just wanted to clarify if there’s a minimum planned follow-up for those who do not reach 140 weeks. I noticed some of the endpoints are assessed a week, I think 121. Is that the minimum assuming the study has not stopped early? Thanks.

Sure. Happy to. Maybe I'll start with the last one. As you said, the exposure in the study is up to 140 weeks, which means that in some patients, if the study reads out early, the exposure will be less than that. We've defined the minimal exposure and time point specifics for those who got an early look in our SAP. I don't think we've come out with and included specific timelines on those, other than the general statement about opportunities for closing the study early based on conditions being met. As for the likelihood of achieving acute pancreatitis (AP) in sHTG, it's a very different population from FCS in terms of risk for AP events. However, the program we designed with two very large studies, we believe we will have an opportunity to show an effect. What we are also looking at is a combination of those two studies. Looking at integrated analysis of efficacy combining both studies which together examine almost 1,000 patients. So we’re fairly confident; today, we don't know what the data will show. What we can say is how pleased we are with the effects we've seen on AP events in our FCS population. So we do believe that the thesis is strong for the SHTG population, but we need to wait until the data readout.

The next question will come from Kostas Biliouris with BMO Capital Markets. Please go ahead.

Hi, everyone. Thanks for taking our question. One quick question from us on ATTR. This morning, data was presented from the literature demonstrating that in addition to the percentage of TTR reduction, the absolute serum TTR levels after treatment are also very important as they can contribute to ongoing fibril formation, and they actually have an impact on survival. That said, I'm wondering whether you have any thoughts around that given that most discussions in this space focus on the percentage of TTR reduction rather than the absolute levels of TTR post treatment? Thank you.

Thanks, Kostas. Not a lot of thoughts on gene editing efforts in the TTR space. The progress they're making is steady. Percent reductions in TTR are absolutely important for efficacy. I don't think there’s a specific threshold that guarantees benefit for neuropathy or cardiomyopathy or any conditions. Our findings show mid-85% mean reductions that we've achieved in the neurotransform study for eplontersen in polyneuropathy patients have already yielded substantial improvements in quality of life. I don't have much else to say about those other programs except that they have a long way to go. Cardiomyopathy indications will require an outcome trial in our view to not only be approvable but also to compete. It’s going to take a long time to get there, and it's a new platform that you never know what may come up. So I’m very pleased with our program and how we occupy an advantageous position.

Thank you very much.

The next question will come from Joseph Stringer with Needle & Company. Please go ahead.

Hi, thanks for taking the question. Just a quick one on the Phase 2 GOLDEN trial and geographic atrophy. When can we expect top-line data? And given some of the competitor data that's out there, can you handicap expectations on what a successful Phase 2 outcome looks like? If the results are sufficiently positive, what would be the next steps in the program in collaboration with Roche?

Sure. Of course, we want a positive trial on geographic atrophy and results that are comparable, if not better than, results presented by other competitors. That's the goal. We have no insight into what that is today, but the data will be out next year, second half.

Yes. So as Richard said, the data will be out in the second half of next year. As I mentioned, we also had an interim look in this Phase 2 study that allowed us to select the doses to complete the study. We started with a number of doses and whittled down to two doses in order to finish the GOLDEN Phase 2 study effectively. We’re seeing excellent tolerability and profound reductions in Factor B and downstream effects. We’re getting great target engagement and not seeing risks related to that engagement in blocking the alternative complement pathway, so it's going great. What we expect to see—and what we hope to see—would be a slowing down of lesion formation and improvement in visual acuity. These are the outcomes we expect to support a decision on whether or not to proceed to Phase 3. In a competitive market like this, for patients seeking a less invasive option, it’s beneficial to get a subcutaneous solution into the market.

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

I just had a question on ION904. I think you’ve got an upcoming presentation at American Heart Association. Just wondering whether we should be thinking about similar AGT knockdown to the previous kind of molecule and just more infrequent dosing, or is there potential to get more than that sort of 75% we’re seeing with that molecule? Thanks very much.

You got it, Myles. Our presentation on our AGT program at AHA will really focus on the dose-dependent reductions in AGT that we expect to achieve in our Phase II study. This is a molecule that is being dosed monthly. Our earlier generation molecule that you mentioned was weekly, and we expect to see greater reductions in our earlier generation molecule because of its more advanced chemistry. So that's what we're expecting.

The last question will come from David Lebowitz with Citi. Please go ahead.

Thank you very much for taking my question. With respect to olezarsen, given the recent pivotal data, as you look forward to severe hypertriglyceridemia, how— I know that you achieved benefits regarding pancreatitis through reductions. But given the dynamics and differences in that population, how easy do you think it’s going to be to show a pancreatitis benefit?

That's a great question, David. Our answer today is a lot different than it would have been earlier this year. The SCS data have exceeded all expectations; we hope to achieve similar AP reductions that we saw in FCS. Our findings achieved remarkable results, and this gives us confidence in the SHTG population despite it not being a genetic form of raised triglycerides, as observed in our studies. Many of these patients are well above 1,000 mg/dl, which puts them at high risk for AP; thus, we anticipate gathering AP event data in our Phase III SHTG study. Together with the effect size, we’re optimistic. Despite the number of AP events per patient being lower in SHTG versus FCS, we aim to have significant data through a larger study. We plan to combine both Phase III studies, CORE and CORE2, to analyze the effect of olezarsen on AP events in SHTG holistically. Thank you, David. And thanks, everybody for joining us today and everyone who participated in our call. We really are proud of all the progress we've made this year, and we believe that the future has never been brighter here at Ionis. We plan to continue our momentum by delivering on additional key commercial updates, pipeline updates, and technology objectives as we go forward. We very much look forward to it. Until then, thank you again, and everybody have a great day.