Ionis Pharmaceuticals Inc Q2 FY2025 Earnings Call

Good morning, and welcome to Ionis Second Quarter 2025 Financial Results Conference Call. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Walke, Senior Vice President of Investor Relations, to lead up the call. Please go ahead.

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

Thanks, Wade. Good morning, everyone, and thank you for joining us on today's call. We have continued to build strong momentum across our business, highlighted by the excellent early commercial performance of our first independent launch Tryngolza, the first and only FDA-approved treatment for familial chylomicronemia syndrome. Tryngolza exceeded revenue expectations during the second quarter on the market, underscoring its strong therapeutic profile, our well-executed commercial strategy as well as the significant unmet need Tryngolza is addressing. The revenue and commercial performance of Tryngolza to date, along with our confidence in Tryngolza's continued commercial success supports the increase in our financial guidance for 2025 which Beth will cover in more detail shortly. We're also pleased that Tryngolza recently received deposits of CHMP opinion paving a way to bring this transformative therapy to patients. Shifting gears, we anticipate Donidalorsen for hereditary angioedema or HAE will be our second independent launch by receiving FDA approval next month. Based on the progress of the review, we believe the approval and subsequent launch remain on track. Donidalorsen has the potential to become a preferred prophylactic therapy for many HAE patients with strong efficacy and safety and tolerability in the pivotal studies, a patient-friendly autoinjector and a convenient dosing schedule of monthly or every other month self-administration. We're well positioned to launch Donidalorsen following approval. Additionally, our Phase III pipeline continues to advance well, with data expected later this year from two wholly owned Ionis programs. If positive, these results would support the continued steady cadence of independent launches next year, bringing important new treatments to patients. These include a second indication for Olezarsen in severe hypertriglyceridemia or sHTG, a condition with a large patient population and significant unmet need, and Zilganersen for Alexander's disease or severe lipodystrophy with no approved disease-modifying therapies. Together, these programs in addition to Donidalorsen and HAE represent major breakthroughs for patients and a multibillion-dollar revenue potential for Ionis. Additionally, by the end of 2027, we anticipate four potential launches from our rich late-stage partner pipeline, targeting serious, life-threatening conditions for both rare and highly prevalent diseases. These will further expand the impact and reach of Ionis discovered medicines and have the potential to meaningfully increase total revenue. With our strong momentum across the business, including Tryngolza and our upcoming independent and partner launches, Ionis is well positioned to bring transformative medicines to patients for years to come and, in turn, achieve sustained revenue growth.

Thank you, Brett. With our first independent launch now well underway and a second launch right around the corner, our commercial team is executing on our strategy to capitalize on these significant growth opportunities. Tryngolza reported $19 million in net product sales for the second quarter, reflecting a threefold increase in revenues quarter-over-quarter. In the second quarter, Tryngolza continued to build launch momentum. This was a result of several factors, including effective patient identification efforts, a strong product profile, favorable payer dynamics and overwhelmingly positive HCP reported experience. Our patient identification initiatives are paying off. The breadth and depth of unique physicians prescribing Tryngolza continues to grow, with prescribers treating two or more patients underscoring the positive experience of both clinicians and patients. This demand also expands a broad mix of specialties, with cardiologists and endocrinologists representing roughly 50% and 30% of prescribers, respectively, and lipidologists and internal medicine providers making up the balance. Overall, physician feedback remains highly favorable, with significant benefits reported. To date, the coverage mix for patients entering Tryngolza is approximately 60% commercial and 40% government. Importantly, patients whether clinically diagnosed or genetically confirmed have gained access. Patients have obtained coverage through a growing number of formal policies or via the medical exception process. This highlights both the urgent unmet need and payers' willingness to support access even before formal policies are in place. Additionally, over 90% of patients have paid $0 out-of-pocket since launch, and timelines for patients obtaining the medicine are consistently beating our aggressive internal benchmarks. Nearly all patients have opted into our Ionis Every Step Support program, a testament to the value the program is providing. We established the Ionis Every Step Support program to ensure a positive patient experience by providing disease and nutrition education, autoinjector training, and reimbursement support among other offerings. For health care providers, the program provides helpful support from insurance authorizations and coverage coordination to reauthorizations and refills. We are proud of Tryngolza's early momentum and focus on our patient finding efforts and HCP education. Our customer-facing team has reached over 3,000 physicians and over 30,000 HCPs have been targeted through our omnichannel capabilities, both intended to further increase awareness of FCS, expand patient identification and educate on the potential benefits of Tryngolza treatment. Backed by an experienced and high-performing team, we are well positioned to continue to take advantage of our first-mover position to bring Tryngolza to patients in need and keep them on treatment. Just in FCS, we are advancing toward a potential blockbuster opportunity in severe hypertriglyceridemia with Olezarsen. SHTG represents a large patient population, many of whom struggle to manage their triglyceride levels with current treatments. In the U.S. alone, more than 1 million people have high-risk sHTG, which includes individuals with triglyceride levels above 880 or above 500 with a history of acute pancreatitis. With a significant first-mover advantage, we believe Olezarsen is well positioned to address the unmet needs of patients with severe hypertriglyceridemia. Our commercial team is making excellent progress as we prepare for a potential launch next year. Donidalorsen, our second independent launch, has the potential to transform the treatment paradigm for individuals with HAE as the first and only RNA-targeted prophylactic medicine. More than 20,000 people in the U.S. and in Europe are estimated to have HAE, with approximately 7,000 people in the U.S. alone. Most patients are currently on prophylactic treatment. However, many HAE patients remain unsatisfied, with up to 20% of patients switching therapies each year in search of a more effective and convenient option, highlighting a need for new treatments with enhanced profiles. We believe Donidalorsen is uniquely positioned to meet this demand. The Donidalorsen clinical data have shown durable efficacy and a favorable safety and tolerability profile with a patient-friendly monthly or every other month self-administration using an autoinjector. Importantly, as we prepare to bring Donidalorsen to market, we are applying the same disciplined and innovative approach that has made the Tryngolza launch a success. We have deployed our field team who are educating in anticipation of Donidalorsen's approval, and we are energized to successfully execute the launch. Meanwhile, our market access team is actively engaging with payers and continues to lay the essential groundwork to ensure a smooth and successful launch. Our experience and scalable commercial organization is already delivering excellent results, so the early success seen with the launch of Tryngolza in FCS. As we build on this momentum, we remain focused on maximizing Tryngolza's full potential while preparing to successfully execute launches including Donidalorsen in the coming weeks, enabling Ionis to reach more people in need of our medicines.

Thank you, Kyle. We are making excellent progress across our pipeline, positioning Ionis to deliver on our mission of bringing transformational medicines for years to come. Let me start with the recent updates from our wholly owned pipeline. As a reminder, Donidalorsen is currently under regulatory review in both the U.S. and EU, with submission supported by its robust clinical data. We remain confident in the August 21 PDUFA date based on the engagement we've had with the FDA at this stage in the process. Pending approval, we look forward to making this potential best-in-class prophylactic treatment available to people living with HAE. Beyond its approved use in FCS, Olezarsen is also being evaluated for the treatment of severe hypertriglyceridemia or sHTG, with three separate Phase III studies supporting our planned supplemental New Drug Application (sNDA) filing, assuming positive data. Line results from the ESSENCE study which will help satisfy the regulatory safety requirements for the broad HTG population. ESSENCE primarily enrolled patients with triglyceride levels between 150 and 500 milligrams per deciliter, a level of triglycerides that is generally not associated with high risk for acute pancreatitis. In contrast, the CORE and CORE2 studies exclusively enrolled sHTG patients. Participants in these studies had triglycerides that were greater than 500 milligrams per deciliter, with approximately 43% of the participants across both studies having triglycerides greater than 880 milligrams per deciliter at baseline, triglycerides at this level pose a risk for acute pancreatitis. The ESSENCE study met its primary endpoint, showing statistically significant placebo-adjusted mean reductions in triglyceride levels of 61% and 58% at 6 months with the 80- and 50-milligram monthly dosing, respectively. The vast majority of participants thus reaching the normal range. The study also met all key secondary endpoints, demonstrating a favorable safety and tolerability profile. The results from this study were recently accepted as a hotline session at the ESC Congress 2025, and we look forward to sharing additional details from the study then. The Phase I studies remain on track with top line results expected in September. We believe this indication represents a critical option for patients who do not adequately manage their triglycerides with current therapies. Physician feedback continues to highlight strong interest, underscoring the potential value of Olezarsen in this population. Importantly, this feedback indicates that physicians understand that lowering triglycerides will reduce the risk of acute pancreatitis and that they would prescribe Olezarsen, if approved, based solely on its ability to substantially lower triglycerides. Although the CORE and CORE2 studies were not designed as acute pancreatitis outcome studies, we are seeing acute pancreatitis events on a blinded basis. As a result, we expect to have accumulated more combined pancreatitis events for CORE and CORE2 than we had in the FCS BALANCE study. This gives us confidence we could have sufficient data to observe a favorable trend in Olezarsen's impact on acute pancreatitis within these studies, and we look forward to discussing more when we read out the data in September. Zilganersen, our medicine to treat Alexander's disease, an ultrarare leukodystrophy that profoundly impacts patients and families who today have no approved disease-modifying treatments, remains on track with its Phase III study, and we're looking forward to sharing data later this year. Given the ultra-rare nature of this disease, we implemented an innovative clinical development strategy for Zilganersen using a seamless Phase I to Phase III study design. This is the first study of a disease-modifying therapy ever conducted in this patient group. And while this approach allows us to move efficiently toward a potential registration-enabling study, it also means that the upcoming readout will represent the first clinical data in patients with Alexander's disease. As such, there is a higher degree of uncertainty associated with this readout compared to other medicines we are advancing in late-stage development. Assuming positive data and approval, Zilganersen would represent the first of what we expect to be many more independent launches from our leading neurology pipeline. ION582, an investigational medicine for the treatment of people living with Angelman syndrome, is the newest addition to our late-stage pipeline. Angelman syndrome is a serious and rare neurodevelopmental disorder that leads to significant and lifelong physical and cognitive impairments, affecting tens of thousands of people living with this disorder. Supported by the Phase I/II open-label HALOS study results, we recently dosed the first patient in the global Phase III REVEAL study. We plan to have this study fully enrolled next year. Turning to our partnered programs, we are pleased that higher-dose nusinersen is one step closer to market with FDA and EMA regulatory submissions under review. If the well-characterized profile of SPINRAZA established over the past 10-plus years holds, we believe SPINRAZA is well positioned to continue to bring benefit to SMA patients around the world. Our partner, Biogen, also recently shared positive top-line interim results from the Phase I study of Salanersen, an investigational antisense medicine being developed for the potential treatment of spinal muscular atrophy. Leveraging the same mechanism of action as SPINRAZA, we designed Salanersen with novel Ionis chemistry to achieve strong efficacy and once yearly dosing. In children previously treated with gene therapy, once yearly dosing with both the 40- and 80-milligram doses were well tolerated and led to rapid and substantial slowing of neurodegeneration as shown by reductions in neurofilament. Exploratory clinical outcome data also showed that children in the study achieved meaningful improvements in function and attained new milestones. Biogen is actively engaging with the regulatory agency to align on the Phase III study design. Notably, the initiation of a Phase III study would trigger a $45 million milestone payment to Ionis. Additionally, this program is relatively higher than for SPINRAZA. If approved, Salanersen would also substantially extend the life of the Ionis Biogen SMA franchise. The progress of this program underscores Ionis deep expertise in oligonucleotide medicinal chemistry and reinforces the strength of our broader neurology pipeline. It also validates our approach as we advance new medicines with next-generation chemistries, including follow-on medicines for our wholly owned programs. With multiple data readouts and regulatory milestones expected this year and next, our advancing pipeline underscores the strength of our science and our commitment to addressing serious diseases.

Thank you, Richard. I'm pleased to report that for the second time this year, we are significantly raising our 2025 financial guidance. This time driven by strong revenue performance to date, including the early launch success of Tryngolza and an improved outlook for the year. In the second quarter, we earned revenue of $452 million, a twofold increase year-over-year and $584 million for the first 6 months of 2025, an increase of nearly 70% versus prior year. The strong second quarter revenue we earned also enabled us to generate $154 million in non-GAAP net income for the quarter. As you heard from Kyle, the early Tryngolza launch continues to perform $19 million in product sales, representing a threefold increase over the first quarter. Royalty revenues increased by approximately 10% to $70 million in the second quarter, anchored by meaningful contributions from both SPINRAZA and Wainua. We also generated substantial revenue from our R&D collaborations, including the $280 million upfront payment for the sapablursen license, a medicine outside of our core areas of focus. Nearly 100% of this revenue dropped directly to the bottom line, underscoring the important financial contributions of our partner pipeline. Total non-GAAP operating expenses in the second quarter increased 8% year-over-year, highlighting our commitment to disciplined investment and driving operating leverage. As planned, our sales and marketing expenses increased year-over-year, driven by our investments in the U.S. launch of Tryngolza and preparations for the upcoming launch of Donidalorsen. Our SG&A expenses also included our minority portion of Wainua's sales and marketing costs. R&D expenses decreased year-over-year as several of our late-stage studies have recently concluded. Importantly, we continue to strategically fund our advancing pipeline with more than two-thirds of our top expenses funding our late-stage programs. Based on our continued execution across the board, we have increased our revenue guidance range by $100 million and now expect to generate $850 million in revenue this year. Importantly, our improved revenue guidance is driving our improved operating loss and cash guidance for the year. Our revenue guidance includes sizable commercial revenue supported by SPINRAZA and the continued strong Tryngolza performance. We expect to generate between $75 million and $80 million in Tryngolza product sales this year. We are also on track to add initial product revenue from our second launch, with the FDA action date for Donidalorsen set for August 21. Given the timing of approval, we anticipate Donidalorsen will modestly contribute to revenues this year with a greater contribution next year. We continue to project our full-year 2025 operating expenses to increase in the high single-digit percentage range compared to last year, driven by investments to support the success of our multiple ongoing and planned launches. With the increase to our revenue guidance, we now project an operating loss between $300 million and $325 million, and a year-end cash balance of approximately $2 billion, both substantially in guidance as full year projected revenue is growing faster than projected operating expenses. The strength of our balance sheet reinforces our disciplined capital management, which enables us to continue to invest for growth. To maintain the strength we plan to refinance our 2026 convertible debt ahead of the maturity date. As always, we are rigorously evaluating a number of options against our objectives to minimize cost of capital, preserve our cash to support our products and pipeline and maintain operational flexibility. We have historically used convertible debt and believe it remains an attractive option for us. With multiple product launches ahead, a rich pipeline, and continued disciplined investments, we are well positioned to achieve significant revenue growth resulting in sustained positive cash flow in the next few years, positioning Ionis for substantial value creation in both the near and longer term. And with that, I'll turn the call back over to Brett.

Another period of strong execution and momentum for Ionis. The continued excellent performance of Tryngolza highlights the strength of our commercial execution and the value of our innovative science in addressing serious unmet needs. As we prepare for the potential approval and launch of Donidalorsen, the deep and advancing Phase III pipeline, we are well positioned to deliver a steady cadence of independent and partnered launches over the next few years. These upcoming milestones reflect the significant progress we're making towards delivering additional transformative medicines to people with serious diseases and building a sustainable, high-growth company. Before I conclude, I'd like to provide two additional announcements. On October 7, we will be hosting an Innovation Day in New York City to highlight our pipeline, our drug discovery capabilities, and will provide additional insights into our ongoing and upcoming independent launches. We'll provide additional information as we get closer to what we believe will be a highly informative event. Additionally, we are eager to report the results from the CORE and CORE2 Phase III studies in HAE. Given that we expect to report the results of both studies at one time in September, we will be initiating a quiet period starting tomorrow, July 31. Our quiet period will be lifted upon data announcement and with that, we'll now open it up for questions.

Our first question comes from Gary Nachman with Raymond James.

Congrats on the strong quarter. So first, just talk a bit more about how the Tryngolza FCS launch is going in terms of finding these new patients and getting them through the reimbursement process and on drug. So what gives you confidence we'll see that strong sequential growth in the back half of the year based on the fiscal year guidance of $75 million to $80 million? So for us a little bit more on that. And then on the upcoming sHTG readout in September just what level of triglyceride lowering are you expecting to see? What are you powered to see? And what do you believe will be considered clinically meaningful in these patients that physicians want to see? And it sounds like you're still confident there will be enough pancreatitis events across both studies to show a positive trend. Do you think physicians need to see that to use it for severe high triglycerides bearing in the physician community on that?

Thanks, Gary. Kyle, would you start with the FCS launch? What we expect in the second half of the year?

Thanks, Gary. So as we communicated, we're really off to an encouraging start, again, with the FCS launch in Tryngolza for the first half of the year. The $19 million in Q2 and a threefold increase over the previous quarter really demonstrates the early momentum that we're very proud of. The product profile, first of all, is playing through very effectively. The reductions in APOCIII, reductions in triglycerides, improvements in acute pancreatitis or reduction in risk of acute pancreatitis and reductions in hospitalizations, I mean all of these things stack up very, very favorably in terms of the receptivity for Tryngolza and the FCS population. In addition to that, a very strong commercial strategy, as I referenced, our customer-facing team has over 3,000 physicians that they're interacting with currently. Our marketing and our omnichannel capabilities were reaching greater than 30,000 HCPs right now with that education. And then you also asked about reimbursement, access is going extremely well, either clinically diagnosed or genetically confirmed patients are going through the process and getting reimbursement very quickly. Patient out-of-pocket expenses, greater than 90% of those patients are paying $0 out-of-pocket. So overall, what we're seeing is very strong execution from a very strong program. In terms of the second half, the real focus is on additional patient identification and continuing to get those patients diagnosed. And through the activities of our commercial team, be it customer-facing and/or our omnichannel marketing capabilities, we expect that to continue, but to continue to identify these upwards of 3,000 patients that potentially have FCS is going to require some work, and we expect that we'll continue that growth throughout the rest of the year.

Thanks, Kyle. Gary, the triglyceride lowering that we're expecting in sHTG is probably going to be similar to what we saw in ESSENCE where we saw a 58% to 62% reduction based on the doses of 50 and 80 milligrams. And what we know based on extensive work we've done with lipid specialists, cardiologists, and endocrinologists who manage these patients is that they are looking for substantial reductions in triglycerides on top of the treatments they're already giving their patients, like omega-3 fatty acids or fibrates. So they're already recognizing that these patients need to be treated, and they are not getting much triglyceride lowering from the existing treatments, so they want something to produce a substantial lowering of triglycerides. Anything north of 50% is a big win in this patient population on top of standard of care, and that is what we expect. With respect to acute pancreatitis events and what we're hearing from physicians, we're hearing exactly what I just said, that substantially lowering triglycerides will help keep these patients from acute pancreatitis which can be fatal, and we need to lower their triglycerides substantially to get them out of harm's way. They don't need to see the acute pancreatitis events. However, with that said, although the CORE and CORE2 studies were not designed as acute pancreatitis outcome studies, we are seeing, as Richard mentioned in his formal remarks, we are seeing acute pancreatitis events on a blinded basis. And we expect to have more cumulative acute pancreatitis events in the combined CORE and CORE2 studies than we had in the FCS BALANCE study. This gives us confidence we could have sufficient data to observe at least a favorable trend in Olezarsen's impact on pancreatitis within these studies, and we look forward to discussing more when we read out the data in September.

Okay. Great. And then just one quick one on Donidalorsen with the PDUFA coming up on August 21. Just you're in labeling discussions. So how do you feel relative to your expectations, if you think the switch data will make it on there if it will be once every month and once every other month dosing, that option will be available for patients? And it sounds like you're ready to launch basically right after approval. So just confirm everything is in place for that?

I'll start. This is Richard. We're definitely on track for the PDUFA date on August 21; everything that we've been discussing with FDA indicates that this date is on track. I can't speak to the launch, although everything looks to be in place, and we're excited about it. I think your other question in regard to what we get in the label is a matter of negotiation. It always is. And so we work with the agency. That's certainly been our position, let's get that in there, but we don't need it in the label because it is published. Now that we have a publication related to the work that was done in the clinical trials, we have an opportunity to promote on that.

In terms of launch readiness, we're building on the synergies from our FCS capabilities. Our medical affairs teams have been out interacting with allergists and immunologists treating HAE. Our sales team is now in place, and our market access capabilities are ready. Everything is prepared for the launch. As Richard was describing the program from a regulatory standpoint, the overall totality of the data here for Donidalorsen is very, very strong from an efficacy standpoint in terms of the durability and control of attacks, the tolerability using the easy-to-use, self-administered autoinjector by the patient. Here, we have a program with the longest dosing interval available or potentially that will be available for patients living with HAE. The Switch study is going to be helpful. This study in the United States illustrates that the majority of patients are on a prophylactic treatment today. What we were able to demonstrate is that, number one, patients are willing to switch, and two, they can do so safely while also experiencing an additional reduction of upwards of 62% from baseline on existing treatments. Eighty-four percent of the patients said that they preferred Donidalorsen over the existing treatment they were on after switching. So the totality of the data combined with the upcoming launch timing, hopefully, on August 21, we will be ready to go.

The next question is from the line of Yanan Zhu from Wells Fargo Securities.

Great. Congrats on a very strong quarter. Perhaps a first question about CORE and CORE2. So I think I heard in the prepared remarks that cumulative acute pancreatitis rate on a blended basis is now above what you saw in FCS. So I just want to confirm. It seems like in the BALANCE study, you had 13 events and just wanted to get a sense of in the CORE and CORE2 was across 1,000-plus patients. Are we thinking about the rate above that? And could you also give us a sense that based on the CORE, CORE2 patient profile, what is the expected AP rate in the untreated population like that so that we can help us prepare for the data and the AP data? And I have a follow-up on the FCS and sHTG launch dynamic.

Yanan, you mentioned that the rate is higher, while it is actually lower in HAE. I believe you were aware of that. We are discussing the total number of acute pancreatitis events recorded in the CORE and CORE2 studies combined. I can confirm that there will be a larger number of events in CORE and CORE2 together compared to the FCS BALANCE study. Regarding the acute pancreatitis rate, we are not certain what it is at this point; this study will be the first to truly provide definitive information on the acute pancreatitis event rate in sHTG, is that correct, Eugene?

Yes, that's absolutely right. There's no prior outcome data can inform us. We're awaiting the CORE and CORE2 readout.

Got it. Yes, yes. And on the FCS launch and potentially the later launch of sHTG. Congrats on a very strong second quarter of launch in FCS. It feels like the opportunity in FCS is actually pretty sizable given this momentum. Can you talk about whether this opportunity is relative to your anticipation? Is it bigger or in line? And more importantly, as we think about you going into sHTG with a much broader pricing strategy presumably across the board for both indications, any strategy to protect the FCS opportunity in terms of timing of launch and also any way to manage the pricing change? That would be super helpful.

Yes. Let me first talk about the FCS population that you described. I still believe that it's representative of up to 3,000 potential patients. It's still early innings. The majority of these patients still are not diagnosed. Obviously, several hundred patients have either participated in clinical trials or are waiting for a medication because they have been previously diagnosed and needed a treatment. The first-mover advantage here is very important, not only in FCS but also sHTG. Our work for the first half of this year was to convert our clinical trial patients, which we did effectively to help those patients that were previously identified with FCS to go on to treatment. We continue to expand our patient identification efforts, and we've been spending a lot of time on that, as I referenced in terms of reaching greater than 3,000 HCPs with our sales team and targeting greater than 30,000 HCPs through education related to our marketing and omnichannel efforts. So we're continuing to educate. The time that we're spending on FCS specifically is with physicians that are also treating sHTG patients and we're having conversations around the implications of high triglycerides and how these patients present, ultimately looking for a phenotype of an FCS patient to clinically diagnose them or get a genetic confirmation of their disease. That work is ongoing, and we will need to continue through the second half of this year. We provided the guidance of $75 million to $80 million this year, which represents not only the patients that we've converted already in the first half but the ongoing efforts that we believe will be successful through the second half of the year. So I believe that the FCS population is in line with the 3,000 that we've represented up to this point. As it relates to sHTG, this is a much broader patient population, obviously, in the treating physician population is much more significant. Greater than 1 million patients have high-risk sHTG, which includes patients with triglycerides over 500 milligrams per deciliter or over 880 milligrams per deciliter with a history of acute pancreatitis. There's a lot of effort already around education in this population and working to identify these potential patients within these practices as we go out and have these interactions. As it relates to the pricing dynamic, we're still working through that. There's more work for us to understand regarding the data, which we are still awaiting. We will work with the payer community to understand the budget impact of the patient population and their interpretation of the data, and the value that represents to patients. So that's the work that we will do going into next year, and ultimately, we will announce pricing upon the approval of sHTG pending a positive outcome.

Congrats on the quarter again.

The next question is from the line of Steven Idoff from TD Securities.

This is Stephen Ido on for Yaron Werber. Congrats again on a fantastic quarter. One more on Doni and on competition specifically. It looks like TAKHZYRO seems to be growing well on the Andembry launch, which was approved on June 16. Obviously, that drug has a couple of disadvantages including monthly dosing compared to your Donidalorsen, which is every month or every other month and also requiring a loading dose, which Donidalorsen does not. Any visibility on the competition and maybe insights from there on what the Donidalorsen launch could look like?

Yes, I'd be happy to talk about that. What we know in this marketplace and what's coming through very clear is that patients on existing prophylactic treatments are not completely satisfied and that they would be willing to switch to a new therapy. A recent Harris Poll said that greater than 90% of patients actually would look to switch to an improved therapy. I think you're seeing that play out with the newly approved treatment already, and we would expect to see the same from Donidalorsen. The profile overall with Donidalorsen is very strong, as I mentioned, not only the efficacy data but also the ability for patients to self-administer. As you pointed out, this therapy is going to be potentially prescribed every 4 weeks or every 8 weeks depending upon how patients present and how stable they are with their disease. That is, again, another key differentiator here. Finally, I'll just mention the switch study. What we have demonstrated is that patients are willing to switch, and when they do so, they can do so safely while also having the potential to improve the control of their disease. Ultimately, when they have ended up on Donidalorsen, they prefer it over the treatment that they were on. From a competitive standpoint, we're in really good shape, and we've got a great team. We've hired a sales organization that has experience in the allergy and immunology space, many of whom have direct HAE experience for many years. They know the treating physicians, and they have existing relationships, and they understand how to competitively sell. We're really excited about the upcoming launch, potentially with the approval on August 21.

The next question is from the line of Mike Ulz with Morgan Stanley.

Congratulations on a strong quarter. I have a question regarding the Phase III sHTG core data. Previously, you indicated that data would be available in the third quarter, but now you're specifying September. What is the rationale behind this change? Additionally, last quarter, you mentioned that acute pancreatitis data might not be included in the top line release. Could you clarify what level of acute pancreatitis data you plan to share in the top line release in September?

Sure, Mike. So just refining the timeline to September from the second half of the year is just blocking and tackling, getting the studies completed, database locked, cleaned all that. We just felt it was appropriate to provide more specificity on the exact timing. So nothing significant behind there except operational in conducting studies. We will provide a statement on acute pancreatitis in our top line press release. Our primary endpoint, again, is triglyceride lowering. We will provide top-line information on triglycerides as well as overall safety, and we'll provide a statement on acute pancreatitis. What's also, I think even more important is that we will provide and present the full data set at a medical congress in the second half of this year. We look to publish the data in the second half of this year as well.

The next question is from the line of Andy Chen from Wolfe.

Brandon on for Andy. On Wainua polyneuropathy, where do you think those patients are coming from? Do you think that they are winning new to brand share or stealing patients from Alnylam? If you can provide any quantitative splits on those details, that would be great.

I'd be happy to talk about that, Brandon. Thanks. This is Kyle again. First, I'll just say, Wainua continues to perform very well. From demand, the polyneuropathy market is a growth market. The majority of these patients are not diagnosed yet, and that's exactly where AstraZeneca is spending the time looking for and educating HCPs around hereditary polyneuropathy patients. $44 million in Q2, which obviously was growth over Q1. The feedback that we're getting from HCPs continues to be very positive around the quality of life, efficacy, and control of the polyneuropathy symptoms consistently. The ability to self-administer with an autoinjector continues to be a differentiating factor. Physicians and patients greatly appreciate the opportunity to manage their disease on their own without having to come into the HCP's office for an injection. In a simple response here, these are new-to-brand patients. These are predominantly newly identified patients. We are seeing some switches, as you would expect, along with some combination use with patients that are progressing on treatment today. But really, our focus is growing the polyneuropathy market and ensuring that newly identified patients get prescribed Wainua.

The next question is from the line of Gena Wang from Barclays.

Congratulations on a very strong quarter. I have two questions regarding Tryngolza. Looking at the guidance of $75 million to $80 million, even if we consider $80 million, it appears that for every quarter, we're only seeing $75 million growth in Q3. Could you provide more insight into this? Is the guidance overly conservative, or is there a specific reason for the slowdown in new patient additions compared to Q2 and Q1? For my second question, I'm not sure if you can comment, but I believe that the total cumulative events for Q1 and Q2 will exceed 13%. Given the different disease contexts and the price history of AP in the two studies, how does this translate? Are we still expecting total AP events to remain in the teens, or could they rise into the 20s?

Thanks, Gena. Beth, do you want to touch on the $75 million to $80 million guidance?

Yes. Actually, I think I'll just pass that to Kyle because that's in his hat. He's responsible for that.

So I think what's most important here is the way that we progress throughout the launch, right? As I referenced, we converted the clinical trial patients, we have been working very effectively with patients that were identified prior to the approval in order to get those patients formally diagnosed and put on to treatment. So, what we're at right now at the launch is really looking for newly identified and newly diagnosed patients, right, in order to penetrate deeper into that up to 3,000 FCS patient population that we believe exists in the U.S. So that takes some time. It takes a lot of education and it takes a lot of conversations. It also takes a little bit of time for physicians to get potential patients into the practice in order to be either clinically or genetically confirmed with their condition. We have done a nice job throughout the first half of the year. We expect to continue to identify these patients, but it just might take us a little bit of time because of the complexity of the rare disease that we're dealing with in being first to market. Having a great product with positive physician and patient experience is helping us to increase that patient identification over time.

Yes. Thanks, Kyle. On your second question, Gena, we're not going to go more than that. I mean, in this call today, we confirmed that we will see more acute pancreatitis events in the quarter or the two studies combined than we saw in the FCS BALANCE study when we confirmed there will be a statement summarizing to some extent the top line summary of acute pancreatitis findings in CORE and CORE2. We're not going to go further than how many more acute pancreatitis events we see. We look forward to sharing the data in September.

Next question is on the line of Luca Issi from RBC.

Congratulations on a strong quarter. Brett, can you clarify your earlier comment regarding physicians' understanding that triglycerides are problematic? Do you believe this perspective is specifically relevant to the U.S., or does it extend to other regions as well? In a situation where there is no statistical evidence or clear trend concerning acute pancreatitis, how should we view the adoption of this drug internationally? Additionally, you mentioned a forthcoming statement regarding acute pancreatitis in the press release—will this statement be qualitative or quantitative?

We won't provide further details at this time, Luca. We'll discuss our findings from CORE and CORE2 regarding acute pancreatitis in our upcoming press release and present the complete data set at a medical congress this year. Your first question is significant as it relates to payer dynamics beyond the U.S., which Kyle will address. However, I can share that in the U.S., I've spent considerable time over the past two years with specialists treating sHTG patients. They believe it's crucial to use the most effective triglyceride-lowering medications for sHTG patients because of the risks of acute pancreatitis. They are currently utilizing all available treatments, including fibrates and omega-3s, though these have limited effectiveness. Therefore, they are seeking additional options beyond the standard care. Our CORE and CORE2 studies are intended to complement existing care and focus on reducing triglyceride levels. This perspective is also true for payers in the U.S. When it comes to Europe, the situation is more complicated.

It is. From a regulatory standpoint, obviously, triglyceride lowering is going to be sufficient for a label in the EU, and that filing is there. We've received a positive CHMP opinion and are optimistic about the outcome. In terms of the payer and reimbursement dynamic standpoint in the European countries, for example, it's really about the breadth of the population that you're ultimately going to be able to treat. Who to treat and why to treat those patients is the key thing here in order to demonstrate outcomes in the patient population. One thing that's very positive is that if we are able to secure an indication in Europe, we've got data from FCS. FCS already has acute pancreatitis data. It has very strong hospitalization data and so we've gathered information to substantiate pricing and reimbursement from an FCS standpoint. We have a strong partner in Sobi for many years, and they've navigated pricing and reimbursement very successfully in the FCS population already across numerous countries in Europe. We are optimistic that we'll be able to continue that success with a program like Tryngolza. So, then the question becomes sHTG; if you have a potential label expansion, what do you need to show there? Outcomes in acute pancreatitis are going to be important for the broader population, but could you potentially look at a different population, maybe a little bit more narrow than anyone observed over 500, for example, patients that are at high-risk sHTG such as patients over 880 or patients over 500 with a history of acute pancreatitis or potentially patients with other comorbidities. There are many dynamics and considerations. Pending the data, we'll work through putting that body of evidence together and supporting Sobi in their pricing and reimbursement efforts across each country as they go to launch.

The next question is from the line of David Lebowitz from Citi.

Given the strong early ramp of Tryngolza and FCS, how are you considering the pricing change that will inevitably occur once it's approved for severe hypertriglyceridemia? Will it result in a quick price drop, or are you planning a strategy to manage revenues while lowering the price and increasing distribution?

Yes, thanks, David. Our pricing work is ongoing. We've got more work to do there. What we've communicated up to this point is in a disease that has three to four million patients that typically, the U.S. payers are accepting of a price somewhere in the $10,000 to $20,000 price range. However, when looking at sHTG specifically and the data that Olezarsen can demonstrate in the sHTG population, we'd like to go back to the payers and do more testing and understand precisely where this price point could land based on the value to patients and the value to the payers. So, there is more work to do. In terms of the execution of that, the FCS population ultimately will be consumed within the sHTG population. It will become anyone over 500 that will be within the sHTG population. So there is a question around how to execute that and the pricing dynamics? And do we bring the price down? I think regardless of what the decision is there, whether it's done immediately or over time, the sHTG population is substantial. I believe we will maintain enough patient population to continue the revenues that we're at consumption of sHTG approval.

The next question is from the line of Jay Olson from Oppenheimer.

Congrats on the quarter, and thank you for providing this update. Now that you have early successful launch experience with Tryngolza and you have several other launches that you're planning in the near term, how does that impact your thinking about your earlier-stage pipeline and deciding between out-licensing earlier-stage assets versus retaining full ownership and launching them independently? And then as a follow-up, can you discuss any plans to build out your ex-U.S. infrastructure for any future global product launches in the long term?

Thank you, Jay. We have an abundance of riches when it comes to our late-stage pipeline, our wholly owned pipeline, and our partner pipeline. It's a nice combination, and our first independent launch is off to a really good start, and we're expecting Donidalorsen to be equally successful as well as sHTG coming up next year. With that said, our research organization is incredibly innovative and prolific. We have to continue to bring in potentially transformational medicines continuously into the early-stage pipeline and bring them to Phase III development in due course. Our focus remains, as we set out five years ago, to prioritize the wholly owned pipeline. We'll continue to do so, and we will focus on cardiology, cardio metabolic diseases, as well as neurology. We will always have room for exceptions like hereditary angioedema; we have such an excellent-looking drug like Donidalorsen, but those will be our focus. Those areas will be our focus. And it will be the priority. However, we still need to ensure that we live within our means. Our resources are limited. We are committed to achieving positive cash flow in the next few years. Although we will prioritize our wholly owned pipeline early stage through Phase III development, there will always be assets that either are outside of our means or outside of our priority areas where we will decide to partner. There is a lot of interest in partnering with Ionis these days. Our platform is delivering over and over again. A great example of that is the transaction we did earlier this year for Polycythemia vera with Ono, which resulted in a $280 million upfront payment. We did that because it's outside of our core focus area. Hematology is not a focus area for us. You'll see us continue to partner, but that's not our priority. Our priority is our wholly owned pipeline early to late stage and our launches. With respect to outside the U.S., I'd like to just put that one on pause. We're thrilled with the early launch of Tryngolza, and we're looking forward to Donidalorsen and sHTG launches in the U.S. We'll know when it’s feasible to emerge from the U.S. and perhaps start building external or ex-U.S. commercial infrastructure. But now is not the time to be distracted from that. We need to get these launches right.

The last question comes from the line of Akash Tewari from Jefferies.

This is Aki on for Akash Tewari. So in the BALANCE study, it looks like there was a kind of leaked through towards the end of the study in the 80-milligram arm in a patient who did have triglycerides lowered on the drug whereas placebo events seem to cluster earlier on in the first half of the study. I understand it's really small in here, but how do you have ESSENCE some sense of how blinded events are tracking in CORE 1 and 2 how confident are you that this kind of variability won't be a swing factor on AP powering in CORE 1 and 2?

I'll start and then Eugene, please jump in. We're doing everything we can to power the analysis to increase the power for acute pancreatitis in our study possible. Acute pancreatitis analysis will be combined in CORE and CORE2, and will be at the 12-month time point. That's correct, right, Eugene? So although the primary endpoint for triglycerides is six months, the acute pancreatitis secondary endpoint will be in 12 months with CORE and CORE2 combined. We're trying to maximize time and patient numbers.

The maximum power will be achieved by combining CORE and CORE2 and ensuring that the end is much larger than two separate studies.

Our last question comes from Debjit Chattopadhyay from Guggenheim Partners.

I'm just wondering if the second interim analysis in the LPA Horizon study has happened already, and I believe this was after 745 events?

Yes, it has, and there are no more interim analyses planned for the pelacarsen HORIZON study. We're fully expecting that study to read out in the first half of next year. We're very much looking forward to the results that we completed. With that, I think we'll close the call. I'd like to thank everybody for joining us today. We look forward to building on our strong momentum throughout the year, sharing additional achievements, and progress along the way until we talk next time. Thank you again for joining, and have a great day, everybody.