Earnings Call Transcript - IONS Q1 2024

Operator, Operator

Good morning, and welcome to Ionis' First Quarter 2024 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 off the call. Please begin.

Wade Walke, Senior Vice President of Investor Relations

Thank you, Keith. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to view the press release and the related financial tables we will be discussing today, including the 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; and Beth Hougen, Chief Financial Officer. Richard Geary, our Chief Development Officer; Eric Swayze, Executive Vice President of Research; Eugene Schneider, Chief Clinical Development Officer; and Jonathan Birchall, Chief Commercial 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 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. With that, I'll turn the call over to Brett.

Brett Monia, Chief Executive Officer

Thanks, Wade. Good morning, everybody, and thanks for joining us today. 2024 is off to a great start for Ionis as we continue to execute on our vision to bring better futures to people with serious diseases. With the recent U.S. launch of our first Ionis co-branded medicine, WAINUA, Ionis discovered medicines are now reaching even more people living with serious diseases. And we're on the cusp of independently delivering a steady stream of new transformational medicines to patients, beginning with our planned launches of olezarsen and donidalorsen. By uniting groundbreaking science and technology with a relentless passion to discover, develop, and deliver new transformational medicines to people in need, we believe Ionis is well positioned to unlock next-level value. The renewal launch for ATTR polyneuropathy is on track in the U.S. with our co-commercialization partner, AstraZeneca. While it's early days in the launch, we're pleased with the collective team's progress. The approval decisions in Europe and Canada are expected later this year, and additional regulatory submissions have already been completed. We expect to soon bring WAINUA to even more patients around the globe. Based on what we know, the strong efficacy profile, together with the freedom of simple, at-home monthly self-administration, we believe WAINUA is poised to become the therapy of choice for ATTR patients. We continue to advance our cardio transform study of WAINUA for the larger ATTR cardiomyopathy indication, with the potential for data as early as 2025. As the largest study ever conducted in this patient population, the landmark cardio transform trial is on track to deliver the most comprehensive and robust dataset. We expect the data we generate will enable physicians and payers to make informed treatment decisions in this dynamic treatment landscape. With AstraZeneca's global leadership in the commercialization of novel cardiovascular treatments, coupled with our leadership in TTR amyloidosis, we believe we are well positioned to bring WAINUA to patients in the U.S. and around the globe. Our next planned launches for olezarsen in familial chylomicronemia syndrome (FCS), a severe rare disease with no approved treatments in the U.S. Olezarsen is also in development for the much larger severe hypertriglyceridemia (SHTG) patient population, with more than 3 million estimated patients in the U.S. alone. By addressing these two indications, olezarsen represents one of the most meaningful opportunities in our pipeline today. Last month, we presented and published very positive Phase III results for olezarsen in FCS. In the Phase III BALANCE study in patients with FCS, olezarsen showed substantial triglyceride reductions. Importantly, for patients, physicians, and payers, olezarsen also demonstrated substantial and clinically meaningful reductions in attacks of acute pancreatitis as well as a favorable safety and tolerability profile. BALANCE is truly groundbreaking as it is the first trial to demonstrate that reducing triglycerides can reduce the incidence of acute pancreatitis. In addition to the Phase III BALANCE study, we presented and published positive data from the BRIDGE study in patients with high cardiovascular risk and moderately elevated triglycerides. In this study, 93% of patients with moderately elevated triglycerides at baseline achieved normal triglyceride levels, reinforcing our confidence in olezarsen's potential for success in FCS and SHTG. I'm pleased to report that we submitted the NDA for olezarsen in FCS with the FDA last month, putting Ionis one step closer to our first independent launch. Assuming priority review, we're on track for a potential U.S. approval by the end of this year. We're also preparing to file for regulatory approval in Europe later this year. Olezarsen is poised to be the first approved medicine for FCS in the United States, and our strong results to date further increase our confidence that if approved, olezarsen could be the standard of care for both FCS and SHTG. Our ongoing Phase III studies for SHTG continue to progress well. I'm pleased to also report that we have now completed enrollment in two of the three Phase III studies in SHTG, CORE and ESSENCE, with our remaining study CORE II expected to complete enrollment very soon. This puts us on track for SHTG Phase III data mid-next year. Following closely behind olezarsen and FCS is our next expected commercial launch with donidalorsen, our potentially first-in-class prophylactic treatment for hereditary angioedema. Early in the first quarter, we reported positive top-line data from the Phase III OASIS-HAE study. Donidalorsen met the primary endpoint with a statistically significant reduction in the rate of HAE attacks in patients treated every four weeks and patients treated every eight weeks. The study also met other important secondary endpoints and had a favorable safety and tolerability profile. We're looking forward to presenting data from the Phase III OASIS and OASIS-Plus studies in the late-breaker oral session at the European Academy of Allergy and Clinical Immunology Congress, the EAACI Congress at the end of this month. OASIS-Plus includes an open-label cohort for patients rolling over from the Phase III study and a separate cohort that we refer to as the Switch study. The Switch study is a first-of-its-kind study evaluating patients who have transitioned to donidalorsen from other prophylactic HAE medications. We plan to hold a webcast in conjunction with the clinical data presentation at EAACI. With these positive data in hand, we're working to finalize our regulatory submission to the FDA, which will include both four-week and eight-week dosing options. Additionally, our European commercial partner, Otsuka, is preparing to file for marketing approval in Europe. Based on our Phase III results and the long-term efficacy and favorable safety data seen in the ongoing Phase II open-label extension study, we believe donidalorsen, if approved, could evolve the HAE prophylactic treatment paradigm. Beyond our near-term opportunities, we have made important progress in advancing additional areas of our rich pipeline, including our leading neurology franchise. Our leading neurology pipeline today includes 12 medicines and we remain on track to have six wholly owned neurology medicines in clinical development by the end of this year. We just recently added one of these medicines to our neurology pipeline with the initiation of the Orbit study, a first-in-patient study for ION356, targeting PLP1 for PMD, a rare X-linked recessive leukodystrophy. In addition to our neurology franchise, we also reported positive Phase II data for ION224, our medicine targeting DGAT2 in development to treat metabolic dysfunction-associated steatohepatitis or MASH. These data provided clinical evidence demonstrating for the first time that targeting DGAT2 to reduce hepatic fat production can improve MASH histological endpoints, including improving fibrosis. Study minutes primary and key secondary endpoints, while also demonstrating that ION224 was safe and well-tolerated. These results support advancing this program to the next stage of development. This program is outside of our key focus areas, we intend to license ION224 to maximize its value for the millions of people living with MASH today. Our accomplishments this year and the investments we're making over the next few years move us closer to achieving our goal of bringing a steady cadence of new transformational medicines to patients for years to come and generating next-level value for all Ionis stakeholders. With that, I'd like to introduce Kyle Jenne, who recently rejoined Ionis to lead our global product strategy and spearhead our next phase of growth. With his extensive commercial and biopharma leadership experience and familiarity with our programs, Kyle hit the ground running and has already seamlessly added value to our commercial and medical organizations during this very important time. After Kyle provides a brief update on the WAINUA launch and the status of our go-to-market activities for olezarsen and donidalorsen, that overview our financials, including our first quarter results. And then I'll wrap things up before taking your questions. And with that, over to Kyle.

Kyle Jenne, Chief Global Product Strategy Officer

Thank you, Brett. I'm excited to be back at Ionis, working with a highly accomplished team with deep commercial experience who are ready to bring our important medicines to patients in need. Over the last four years, we have approached our commercial build in a thoughtful and purposeful manner, focusing on hiring the right roles at the right time. We now have a team in place executing on the co-commercialization of WAINUA with AstraZeneca and preparing for the upcoming independent launches of olezarsen and donidalorsen. The capabilities we've established include medical affairs as well as commercial expertise and marketing, market access, patient services, commercial operations, and sales. We also recently appointed the first Ionis National Sales Director to the team and are beginning to hire our field organization in preparation for the FCS launch. Following the U.S. approval at the end of last year for WAINUA, we started bringing this important medicine to patients in the first quarter. As Brett noted, WAINUA represents Ionis’ first co-branded medicine and is poised to be the treatment of choice for hereditary ATTR polyneuropathy based on its efficacy and safety profile and the ability to self-administer. With an estimated 40,000 patients worldwide and fewer than 20% of patients on an approved treatment, patients with hereditary ATTR polyneuropathy remain significantly underdiagnosed and largely underserved. As a result, a high unmet need remains that we and AstraZeneca are uniquely positioned to address. Overall, the launch is tracking to plan based on predefined launch performance indicators. We are seeing good uptake among patients, some of whom are new to this class of medicine and some of whom have switched from other brands. The cross-functional teams that Ionis and AstraZeneca are working well together and the early phase of the launch is benefiting from the expertise of both organizations. Under our co-commercialization partnership with AstraZeneca, we have a one-customer team approach that's designed to drive broad uptake. We are leading the patient support aspect of the launch, while AstraZeneca is leading the other customer-facing commercial and medical teams. The combined team is working together seamlessly with a shared goal to make WAINUA the preferred choice for newly diagnosed patients with ATTR polyneuropathy. Prescribers and patients are recognizing WAINUA's strong clinical profile and value the ability to easily self-administer WAINUA from their home. We are pleased with the initial phase of the launch and expect to continue reaching a growing number of patients as more prescribers learn about the value that WAINUA brings. Establishing our co-commercialization partnership with AstraZeneca for WAINUA was an important step to efficiently prepare Ionis for our upcoming independent commercial launches of olezarsen and donidalorsen. We are developing olezarsen for two indications: the rare FCS indication and the broader SHTG indication with anticipated first-mover advantage in both settings. We expect the approval of olezarsen for FCS by the end of this year, assuming priority review. Last month, we presented the positive FCS Phase III data, which were simultaneously published in the New England Journal of Medicine. These data generated very positive feedback from key opinion leaders. They were especially impressed with the reduction in acute pancreatitis attacks. Additionally, they were encouraged that the reductions in triglycerides translated to substantial reductions in hospitalizations and inpatient hospital days, supporting the potential for olezarsen to make a profound difference in the lives of people with FCS, and we expect that these data will also be very important in securing access with payers. And I'm happy to report that we recently initiated an expanded access program for olezarsen in the U.S., enabling patients to have access to treatment ahead of potential approval. Our launch preparations are well underway for FCS. We are building for this launch using the substantial capabilities we've already established for WAINUA. Our medical affairs team has been out connecting with physicians for nearly three years, improving disease awareness and urgency around identifying and diagnosing FCS through disease education. We have conducted extensive market research to identify the physicians most likely to diagnose FCS and treat patients with olezarsen. These are the physicians that we will focus on initially after launch. Additionally, we aim to build meaningful relationships with patients and healthcare professionals through a differentiating omnichannel strategy. And by leveraging our omnichannel capabilities, we expect to efficiently broaden our access to a larger base of treating physicians and accelerate the patient journey process. We are building a world-class patient and caregiver support team to help patients through every step of their treatment journey. This includes helping patients to understand their disease, be informed about their medication, and provide the appropriate support for access and reimbursement programs. The goal of this team is to provide a seamless customer experience that helps patients initiate treatment and remain on therapy long-term. With our national sales director in place, we plan to hire our customer-facing account champion team leading up to the launch. The team will be sized appropriately for this rare disease population focusing on FCS disease education, product information, and reimbursement and access once approved. In addition, we are also expanding our market access capabilities with trade and distribution and account management teams to interact directly with payers, integrated delivery networks, and other essential reimbursement channels. As we prepare for the SHTG indication, we plan to further scale all of these capabilities to realize the full potential of olezarsen. Donidalorsen for the prophylactic treatment of HAE is our next planned launch after olezarsen. And just like olezarsen, we recently initiated an expanded access program for donidalorsen in the U.S. so that patients have access to treatment ahead of potential approval. HAE is an attractive opportunity for Ionis. There are more than 20,000 patients with HAE in the U.S. and Europe. Within the U.S., prophylactic treatment is well accepted by patients and physicians. We know where this concentrated base of treating physicians is, and they are primarily located in large centers of excellence. Many patients with HAE are unsatisfied with their current treatments and looking for an option that reduces frequency and severity of attacks with attractive tolerability and convenience. We plan to build an efficiently sized field team to reach prescribers and support the needs of these patients. Based on the Phase III results, we anticipate donidalorsen could evolve the HAE prophylactic treatment paradigm and address the unmet needs of patients. Patients tell us that they would welcome a medicine that provides strong efficacy along with an attractive tolerability and administration profile. And we believe that donidalorsen could be that medicine. Donidalorsen has the potential to extend dosing at intervals to every four to eight weeks using an auto-injector. The current standard of care is dosed every two to four weeks using a vial and syringe. We're looking forward to the upcoming Phase III OASIS-HAE and OASIS-Plus data presentations for donidalorsen at the end of this month. The OASIS-Plus presentations will include open-label extension data in patients treated for up to 1.5 years. In addition, we will be presenting data from the first-of-its-kind Switch study, which we believe will be very informative for physicians and patients for two important reasons. First, we expect these data will assist physicians in understanding how to manage patients effectively when switching to donidalorsen. And second, these data will include a patient preference survey answering the important question, 'Do you prefer donidalorsen or your prior treatment?' With positive Phase III and long-term Phase II OLE data, together with every four or eight-week self-administration, we believe donidalorsen could be an important new prophylactic treatment for HAE if approved. I'm pleased to say that we are right where we should be in preparing for our upcoming launches. Our commercial infrastructure is in place, and we will be ready to begin delivering our medicines to people in need as these new therapies come to the market. This is a very exciting time for Ionis, and I'm proud to be a part of it. Now over to Beth.

Beth Hougen, Chief Financial Officer

Thank you, Kyle, and I couldn't agree more. This really is an exciting time at Ionis as we launched our first co-commercialized medicine. And we are closer than ever to bringing a steady cadence of our own medicines to the market. Our first quarter financial results reflect our progress toward achieving this important goal. We earned revenues of $119 million in the first quarter. Half of our revenue was from commercial products comprised primarily of substantial SPINRAZA royalties. Our commercial revenue also included the addition of royalties from the U.S. launch of WAINUA. The other half of our revenue was from programs under our R&D collaborations, reflecting the value that our pipeline and technology continue to generate. Our non-GAAP operating expenses modestly increased year-over-year as we continue to invest our capital resources toward growth opportunities. As expected, our SG&A expenses increased as we and AstraZeneca initiated the launch of WAINUA in the U.S. and as we made investments ahead of the olezarsen and donidalorsen launches. Our R&D expenses also increased due to the timing of our late-stage program activities. We expect our R&D expenses to stabilize this year as several late-stage studies have ended. We ended the first quarter with cash and investments of $2.2 billion. Our first-quarter results keep us on track to meet our 2024 financial guidance. Looking ahead, we project our revenues in subsequent quarters to be modestly higher compared to the first quarter based on anticipated regulatory milestones, license fees, and R&D funding from partners. For example, we will earn $20 million if QALSODY is approved in the EU and $30 million if WAINUA is approved in the EU. Additionally, we expect our royalty revenue to grow as the WAINUA launch ramps up and as the QALSODY EU launch gets underway, assuming approval. We continue to project our full-year 2024 operating expenses to increase in the mid- to high single-digit percent range compared to 2023, excluding the impact of one-time costs last year. This increase will be driven primarily from SG&A expenses as we continue investing in our go-to-market activities to support our planned independent launches and our minority portion of WAINUA's sales and marketing costs, which are in the high teens to low 20% range. We expect to end the year with $1.7 billion in cash and investments. As we invest in the substantial opportunities before us today, we expect that will unlock next-level value. So as you can see, we delivered a solid first quarter. And now I'd like to provide you with a compelling financial vision of our clear path to drive increased value. With a rich pipeline that includes a growing number of wholly owned programs, we have a clear path to positive cash flow powered by sustained revenue growth. To fully realize the opportunities before us, we will continue to make significant investments over the next few years. We are investing efficiently in four key areas: First, as you just heard from Kyle, we are making significant investments in the launch of WAINUA in the United States. To execute on a successful launch for this important medicine, we built key commercial functions and are gaining important experience that we can leverage as we prepare for our upcoming launches for olezarsen and donidalorsen. Second, we will continue to invest in advancing our late-stage medicines. We expect that our level of investment in this area will be relatively stable over the next few years. Because, first of all, all of our large Phase III studies today are at or near full enrollment, which is the heaviest period of investments. We have concluded several studies recently and are now able to reallocate R&D resources from these programs to our third area of investment: our earlier-stage wholly owned programs. Our investments in advancing these programs set us up to deliver our next wave of medicines to patients. Finally, we are investing in cutting-edge technologies to ensure we continue to deliver innovative medicines with competitive profiles. With these investments, we have an outsized opportunity to deliver medicines to patients in need, which in turn positions us to earn multibillion-dollar revenues and achieve positive cash flow on a sustained basis. This slide depicts these opportunities. As you can see, we have many medicines that can power our revenue growth. Beyond our upcoming launches for olezarsen for FCS and donidalorsen for HAE, we have several additional wholly-owned medicines in development that could reach patients over the next several years. This includes our planned launch of olezarsen, our wholly owned medicine for the treatment of severe high triglycerides, which has blockbuster potential. Additionally, we have a growing pipeline of potential groundbreaking disease-modifying neurology medicines we expect to bring to patients over the near to midterm, including zilginersen for Alexander's disease, which is currently in Phase III development. We also have multiple partnered programs that are poised to provide substantial future royalty revenue and sales milestones, assuming continued advancement. These include pelacarsen, a first-in-class investigational medicine that Novartis is developing to address the millions of patients with Lp(a)-driven cardiovascular disease. Data and a regulatory submission for pelacarsen are planned for next year. Bepirovirsen, an investigational medicine that GSK is developing in a large Phase III program to treat the millions of patients with HPV infection. Of course, we have WAINUA with the ATTR polyneuropathy launch on track and our landmark CARDIO-TTRansform study progressing well. We believe that WAINUA has the potential to become the preferred treatment for ATTR in the substantial and growing market. All of these programs combined could generate up to $6 billion in milestone payments, in addition to royalties up to the mid-20% range. All of this is on top of our substantial and sustainable current revenues. Over the next few years, we plan to make strategic investments in our commercial opportunities in advancing our rich pipeline and in our technology. We expect these investments to power strong revenue growth and positive cash flow as our medicines reach more patients in need, positioning us to deliver next-level value for all Ionis stakeholders for years to come. And with that, I'll turn the call back to Brett.

Brett Monia, Chief Executive Officer

Thank you, Beth. Indeed, Ionis is well positioned to continue building on our positive momentum as we execute on all our strategic priorities. We have arrived where we are today by being focused on a clear vision and a clear set of strategic objectives, which include building and advancing our pipeline and delivering medicines that we conceive discover and develop directly to patients. We've established Ionis as a leader in organically tied therapeutics with several approved drugs and one of the richest mid- and late-stage pipelines in the industry. Our pipeline is delivering. We achieved multiple marketing approvals and positive key data readouts over the past year and are poised to build on the strong momentum in the near term. We've prioritized building our wholly owned pipeline, and we expect to advance several of these medicines into clinical development this year. In parallel, our partner programs are progressing on track with key Phase II data readouts planned this year and important Phase III readouts next year and beyond. We're extending our leadership position in oligonucleotide therapeutics by expanding and diversifying our technology, further optimizing our capabilities for existing therapeutic areas, and opening up new areas for drug discovery. All of this sets us up to continue bringing a steady cadence of new transformational medicines to patients for years to come. We're looking forward to sharing our progress as we build on our recent achievements and accomplish all our strategic objectives. And with that, I'll now open the call up for questions. Keith, we can take questions now.

Operator, Operator

And the first question comes from Debjit Chattopadhyay with Guggenheim Securities.

Debjit Chattopadhyay, Analyst

Firstly, on donidalorsen and olezarsen. Between the expanded access, the OLE and Switch, how many FCS and HAE patients do you currently have on therapy who could be low-hanging fruits for the early commercial adoption?

Brett Monia, Chief Executive Officer

For olezarsen, nearly all the patients, around 60, in the Phase III study transitioned into the open-label extension and are currently participating in that trial. This is a strong indicator. The expanded access program for olezarsen and familial chylomicronemia syndrome is just beginning, so it's still early. We will provide an update later, but the initial feedback has been very positive. The situation is quite similar for donidalorsen. Almost all the patients who completed the trial, which was over 90%, chose to roll over into the open-label extension and remain part of it. The expanded access program for donidalorsen has also just started.

Debjit Chattopadhyay, Analyst

Got it. And one quick one. Are there any Part D dynamics we should be monitoring with respect to the WAINUA launch versus Amvuttra.

Brett Monia, Chief Executive Officer

Yes, I'd be happy to talk about that. Thanks for the question. So First, I'll just say the launch is going really well. The payers are covering the medication as expected. There's experience in the space already with polyneuropathy, and so the criteria for use is largely understood from the majority of payers. On the Part D side of things, we're continuing to navigate that very efficiently. AstraZeneca is leading the way on the market access side of things, and they're doing a fantastic job. Our patient services program is really supporting patients effectively to educate them on the process and also provide out-of-pocket support where appropriate for commercial patients and supporting them just through the regular reimbursement process that you would expect, and also working directly with the offices. Overall, I think the payer landscape is positive. The patient experience is very positive. And we're continuing to execute the launch very effectively.

Operator, Operator

And the next question comes from Gary Nachman with Raymond James.

Gary Nachman, Analyst

So on olezarsen, when will you know the exact review timeline for FCS? I know you're assuming a priority review, but when will that be confirmed? And then talk a bit more about the commercial launch preparations for olezarsen for FCS. How big of a team will you need overall and describe some of the synergies with the infrastructure already built in there for WAINUA, how that could be leveraged.

Brett Monia, Chief Executive Officer

Thanks, Gary. I'll take the first question, and Kyle can discuss the field preparations and commercialization plans. Jonathan might want to add his thoughts as well. We anticipate receiving feedback from the FDA approximately 60 days after our submission, which was in April. After we hear from the FDA, we will learn about our PDUFA date. Although we don’t expect an outcome regarding an advisory committee meeting, that information will be included in the update we receive. Additionally, we are looking to find out if we qualify for priority review. We will share all of this information at the same time when we receive the FDA's response on the NDA acceptance. Kyle, could you provide some details on the launch for FCS?

Kyle Jenne, Chief Global Product Strategy Officer

Yes. I will talk about the synergies, and then I'll turn it over to Jonathan to talk about some of the field force sizing and the thinking around the go-to-market strategy there. But the synergies with WAINUA, I think what's important within the organization is, first of all, we've been very calculated and very measured in terms of the way that we build the internal infrastructure so that we're efficient and being smart about the capabilities that we're building and the timing of that build. But we've currently got in place marketing capabilities, which I think are very robust, with strong leadership and experience in the marketing capacity. Our commercial operations group has stood up, so things like the CRM and data and analytics and those types of infrastructures are in place. Our market access team is doing a fantastic job of doing market insights work and understanding the way that the market is anticipated to look from a payer standpoint and trade and channel and distribution. And finally, and really importantly, is the medical affairs group; we established that team a little over three years ago. That team has been interacting with KOLs. They've had a strong presence at Congresses. There's been a lot of data in dissemination. We've collected a lot of information externally and brought that knowledge back into the organization as well. Overall, I think what you're hearing is the capacity and the ability and the infrastructure and the timing of all of this is really coming together nicely. And the execution. I've been very impressed with and very pleased with where we're at right now. So Jonathan, maybe specific to FCS?

Jonathan Birchall, Chief Commercial Officer

Yes. I think there are, as Kyle alluded to, a lot of synergies between the capabilities we've built to support the WAINUA launch, particularly around areas such as patient services, that will transfer very relevantly to the FCS launch. A bit of background, as I'm sure you're aware, the FCS launch is a rare disease. There are a relatively small number of patients who are managed by a relatively small number of HCPs. So as you can imagine, the footprint or the scale of our commercial build will meet the needs of that customer group. That customer group and indeed those patients. So given the rare disease nature, it will be appropriately built to service that population.

Gary Nachman, Analyst

All right. Great. And then on donidalorsen, just describe the latest thinking on the data you'll be including in the NDA. How are you thinking about positioning the drug from a competitive standpoint in terms of switches versus getting naive patients in that market? And Kyle, how large of an effort you'll need there from a commercial standpoint relative to olezarsen?

Kyle Jenne, Chief Global Product Strategy Officer

Yes. Let me start by talking a little bit about the market. We strongly believe, based on the profile of donidalorsen, that we'll be able to evolve the prophylactic treatment paradigm. This is a very competitive market, as you just outlined. It is a Switch market. A lot of these patients are already identified, currently being treated, and we anticipate Switch. The Switch data that we're going to roll out at the end of the month to be very, very relevant in this space and also innovative and different. The prevalence overall, we're looking at 20,000-plus patients between the U.S. and EU. The data sets in terms of differentiation and the way that we're going to go about this really support a couple of things. Number one, the primary endpoint, obviously, around reduced rates of HAE attacks. But the durability of that, I think, is really, really important to note in the data. We've got four- or eight-week dosing that's differentiated versus the competition. We've got a safe and tolerable therapy, and the Switch data and being able to show patient preference is going to be really critical, I think, not only to patients but also to prescribers in terms of how to do this and to payers in terms of what is the cost of doing this and how do we do this effectively to make sure that it's efficient in terms of making that transition. Overall, I think between the data and the marketplace and the way things are setting up, we're going to be really poised to do a great job here in this space. In terms of the commercial size, we'll probably be competitive in terms of the sizing, 50 to 100 ballpark in terms of field infrastructure. I expect to be able to start putting that team in place later this year, pending the regulatory timelines and process that will be outlined later.

Brett Monia, Chief Executive Officer

Yes. And regarding Gary, the NDA, thanks, Kyle. We plan to submit for approval both for every four-week dosing as well as every eight-week dosing. We'll include open-label extension data to support the safety database that is necessary for approval. We're also expecting to include instructions based on the Switch data on how physicians will be able to Switch patients from an existing prophylactic over to donidalorsen. We're very much looking forward to sharing in-depth the Switch data along with the open-label Phase III extension data in the Phase III data at EAACI on May 31 of this month. The Switch data is really the first prospective study ever conducted in patients with HAE, switching them from one prophylactic to another. We look forward to sharing data not only on how well patients are protected from HAE attacks compared to baseline rates, but also compliance, how long they stay on treatment, and a preference—whether patients prefer donidalorsen over their previous treatment. And why they choose that. So it's a very important study—it's the first of its kind, and it's also a litmus test for the market in the United States, which is a Switch market.

Operator, Operator

And the next question comes from Jessica Fye with JPMorgan.

Jessica Fye, Analyst

On that path to sustained positive cash flow, can you talk a little bit about over what time horizon you see the company being able to achieve that? And then just a quick second one for ION541, your ataxin-2 asset for ALS, can you set the stage for what to watch for in those Phase II results? And just remind me the timing for that readout?

Beth Hougen, Chief Financial Officer

Sure, Jess. So as you think about Ionis, if you think about our opportunities. Obviously, we've got a substantial opportunity ahead of us with the rich pipeline that we have, particularly the late-stage pipeline—a multibillion-dollar revenue opportunity. It's going to take us a few years of continued investment to bring those drugs through development, through the regulatory process, and launch those medicines. We want those launches to ramp up. But the strength of multiple sources of revenue are sustained and substantial base of revenue today, the ability for that to grow, and the ability for partnered programs to reach the market and generate substantial royalties and sales milestones. Then to build on that with our product revenues with our wholly owned medicines, as those come to market and those launches ramp up, will really drive the positive cash flow. I think what's important to remember about Ionis, which is very unique for us versus others in our space, is that we're not that far away. Unlike a lot of companies who are launching their first medicines, we already have a very substantial base of revenue that generates cash for the company and helps offset our investments today. We anticipate that will continue. That means the delta that we have to cover when we finally get these products to market is actually fairly modest, and it's a very achievable goal for us. So hopefully, that gives you a perspective on how to think about it.

Brett Monia, Chief Executive Officer

Looking forward to the other part of your other question, Jess, having data results from the Phase II study for ataxin-2 in nongenetic ALS around midyear this year. Eugene, please comment on what we're looking for.

Eugene Schneider, Chief Clinical Development Officer

Yes, thanks for the question, Jess. It's our first inpatient experience. This is primarily a safety study; it's a dose-ranging study. We're obviously assessing the safety of increasing doses of oligo in patients with sporadic ALS, as Brett said. The key goal of that study is to demonstrate NSS safety of various dose levels of intrathecal medicine. We're obviously, or Biogen is looking at other surrogates of ALS progression, and those have been well described, such as neurofilament. Some of those exploratory endpoints will be used to assess whether there is any activity on key ALS progression measures.

Brett Monia, Chief Executive Officer

Based on the QALSODY outcome, we expect neurofilament light chain to be a key measure on that. There will also be exploratory measures of the ALS functional rating scale and other subdomains within there.

Operator, Operator

And the next question comes from Joseph Stringer with Needham & Company.

Joseph Stringer, Analyst

Just a follow-up on donidalorsen. In the Switch study, you mentioned a patient survey and some other data. But maybe can you put a little bit finer point on what data specifically you will need to see from the Switch study that would resonate most from a commercial uptake perspective?

Brett Monia, Chief Executive Officer

I'll start and Kyle can jump in. It's really the totality of the data, Joey. We're first going to share data with current treatments that are available on the market today. It won't just be one treatment that we're switching. We're looking at patients who have previously been on TAKHZYRO, ORLADEYO, or other prophylactic treatments. We'll examine their baseline HAE attack rates before entering the study and observe how the HAE attack rate changes as they continue with donidalorsen treatment. This data is crucial for the commercial launch. Additionally, we're planning to ask patients which treatment they prefer in the trial and the reasons behind their preferences. We are looking forward to sharing that survey in the study as well. Lastly, we will have the data, instructions, and algorithms, which vary for different prophylactic treatments, indicating how long patients need to be on and wean off existing treatments before transitioning to donidalorsen. It's vital to have this data for the launch of donidalorsen, right, Kyle?

Kyle Jenne, Chief Global Product Strategy Officer

Yes. I think first, it's highly differentiated. This hasn't been done before. I think that differentiation is going to help us. This is an unsatisfied market. Patients are moving between therapies as it is right now. They're often doing this because they're either not adequately controlled or they're having breakthroughs, or sometimes it's because of the way that the delivery mechanism works for the treatment they are currently on. When we're thinking about the data, it's going to be helpful for us to know in a very formal way, the feedback from patients. Number one, and number two, to help inform physicians about how to do this safely and effectively. Finally, on the payer side, payers want to make sure that they're not paying for multiple medications at the same time. This will help us with the payer messaging, to talk about how effectively to get on to donidalorsen and stay on donidalorsen without them having to have multiple therapies overlapping or that they're having to pay for and cover for these patients.

Operator, Operator

And the next question comes from Jason Gerberry with Bank of America.

Jason Gerberry, Analyst

Two for me. Just can you comment on the Phase III SHTG trials and how acute pancreatitis events are accruing on a blended basis versus events you've seen in other trials or your best estimate of what that event rate may look like? And then my second question is around TTR cardiomyopathy and the potential for combination therapy. Alnylam seems pretty adamant that payers won't cover a stabilizer and a silencer. There's questions if tafamidis will even go generic this decade. I'm just curious about what work you've done around combo that it will get covered and that there's an attainable clinical bar for combo. I know there's a lot in that, but just love if you can address that?

Brett Monia, Chief Executive Officer

All right. Before handing over to Kyle and Jonathan about the dynamic TTR cardiomyopathy market and combination monotherapy, let me comment on the SHTG. As a reminder, Jason, we saw remarkable reductions in acute pancreatitis in our FCS balance study for olezarsen. Not only was the reduction substantial, but the number of acute pancreatitis events in the placebo group was much more than we anticipated going into that study. A very important point I want to emphasize is that we don't know people. It's not well understood what the acute pancreatitis event rates are in FCS or SHTG. These trials that we're conducting are going to shed a lot of light on the true acute pancreatitis events for both FCS and SHTG. Virtually all of the acute pancreatitis events that occurred in the FCS study were in the placebo group. Certainly, in SHTG, we would expect and do expect fewer acute pancreatitis events just based on the fact that the mean triglyceride reductions are lower in SHTG than they are in FCS. With that said, we have many patients in our SHTG trial that are in the thousands in the FCS range in the study. But the mean reduction in triglyceride levels will be lower, and therefore, you would expect the rate of events to be a bit lower in SHTG. That said, we are seeing, in a blinded manner, acute pancreatitis events accruing in a pretty robust line study. If we can replicate anything like what we saw in FCS, we would expect the majority of those patients to be in the placebo group because olezarsen is expected to reduce triglycerides even better from a magnitude standpoint in SHTG versus FCS. The balance, FCS study certainly gave us more confidence in a positive acute pancreatitis outcome in the study. A reminder, the primary endpoint is triglyceride reductions, and acute pancreatitis events in the SHTG study is a key secondary endpoint.

Jonathan Birchall, Chief Commercial Officer

Yes. I think the specific question for me around that is willingness to cover the combination. I guess my first point is very difficult to answer the question since we don't yet have any data and therefore, don't really understand the profile of the combination. That said, I think there are plenty of other therapy areas, whether it's Gilead's work in hep C or various oncology drugs, where there are expensive combinations that are still covered by payers. What I can tell you specifically with regards to cardio transform and the combination usages is that the market research that we've completed has shown that there is a willingness from payers to cover the combination. Obviously, the caveat to that is it will be data dependent. But as long as we can demonstrate a benefit with the data from what will effectively be the largest study in this area, we're fairly confident that if we're able to demonstrate that benefit, then that will ultimately be covered by the payers.

Brett Monia, Chief Executive Officer

We are very well positioned to demonstrate an added benefit in combination, based on the design of our trial, the size of our trial, and the percentage of patients we have on tafamidis versus monotherapy.

Operator, Operator

And the next question comes from Yanan Zhu with Wells Fargo.

Yanan Zhu, Analyst

Great. Maybe to follow up on ATTR cardiomyopathy. Just curious, any color on the blinded event rate? Any update there? And any thinking about the primary endpoint analysis? Also, as a competitor readout their data, what are the key data points that you will be focused on learning?

Brett Monia, Chief Executive Officer

Thank you, Yanan. The blinded event rates in the cardio transform trial are tracking well. They're on track for what we expected. When I say that, I'm referring to both mortality as well as hospitalizations and the nature of those hospitalizations. We're looking at it very carefully. There's no changes to our plans on primary endpoint or timing, as we said in our presentation. As early as next year, still on track. The study will go to its completion, 140 weeks of treatment—midyear 2026. We're focused almost very much on the blinded event rate to drive the decision with our partner, AstraZeneca, when this readout occurs. We're very much looking forward to the readout of the first silencer in TTR cardiomyopathy from a Phase III trial later this year. If we learn something from it, it could influence our timing for reading out the study. We're very much looking forward to it and I really can't say much more about it than that at this point.

Yanan Zhu, Analyst

Great. If I may ask a follow-up on Angelman syndrome readout. What might be the value? And how do we think about the relative importance of the biomarker EEG versus clinical endpoints like CGI and Bayley-4 when we learn the data?

Brett Monia, Chief Executive Officer

Yes. Eugene will comment on the clinical endpoints, biomarker EEG, and other Bayley-4, etc. We haven't settled on how and when exactly we will report out the next step for the Angelman program. As you know, Yanan, Biogen has an option to license this program. When we do announce the next step for the program, when the data reads out, we will also be planning to comment on what Biogen's plans are for the next steps if they option in for the program. As far as forum, we have not settled on that either. There is an Angelman conference in August of this year, which we regularly attend each year. That could be a forum, but we haven't made any firm decisions. Of course, if Biogen licenses this program, they will be in the driver's seat to make those calls ultimately. Eugene, talk a little bit about the endpoints that we're looking at in Angelman?

Eugene Schneider, Chief Clinical Development Officer

Yes, sure. Thanks for your question, Yanan. Yes. This is a truly a learning study for us. We're really exploring a range of different outcomes, including, of course, EEG, which has built quite a bit of data both through natural history as well as some of the early data that was shared with the community. Importantly, the clinical assessments that include standard scales, such as Bayley-4, of course, Vineland, is another very common scale used in neurodevelopmental disorders. We're also looking at other aspects of this disease, essentially covering a very broad range of presentation and symptoms for Angelman. We're truly trying to learn as much as possible about the impact that our drug may have on all of those features of this pretty complex disorder.

Operator, Operator

And the next question comes from Luca Issi with RBC.

Luca Issi, Analyst

Great. Congrats on the progress. Maybe one on TTR cardiomyopathy, Eugene, if I may. What was your reaction to AstraZeneca powering their Phase III trial for the monoclonal antibody at 1,000 patients? Basically, we now have Alnylam HELIOS-B has 665 patients. Your trial is 1,400 patients, and AstraZeneca's monoclonal antibody is in 1,000 patients. Does this mean that Alnylam is under-powered; you are overpowered? On the purpose of power, any thoughts there, most appreciated. And then maybe on AGT, what's the latest thinking on this target? Roche is clearly very excited about it and even willing to run a cardiovascular trial, while it feels that your target is not getting the same amount of airtime that it once did. Am I off here? If so, what's the next sort of this program? And finally, on HAE. I think on Page 17, you're citing that these assets obviously include near elimination of attacks. Wondering if you can comment on whether that applies to both Q4W and Q8W or only Q4W?

Brett Monia, Chief Executive Officer

A lot to unpack there. Coming on the question of trial design. We're not that close to AstraZeneca's antibody depleter for TTR cardiomyopathy, Luca. The size of their study, the powering assumptions that went into all that, is not in our area. We, of course, talk to them pretty regularly about how these two mechanisms could synergize down the road. Certainly, we're not involved in the design of their trial. I don't think powering assumptions are anything we can comment on. It's a different mechanism. We believe in our trial design. We believe that we have the right size of the trial design and the makeup and the demographics in our cardio transform study. With that, I can't comment any more on what others are doing.

Unknown Executive, Unknown

No. Just on our trial, as you know, we spoke about it a lot—and certainly, we feel pretty confident in our assumptions that are based on emerging data. That's what I feel comfortable speaking about. I can't speculate on what others use in their assumptions.

Brett Monia, Chief Executive Officer

AGT, no change. We are continuing to progress our plans, as we've stated earlier, and we plan to partner this program, and we're still planning to do that, making progress. For HAE, as we will share with you at EAACI at the end of this month, both every four-week and every eight-week dosing showed a highly statistically significant benefit in reducing HAE attack rates, but every four-week dosing had a greater reduction in HAE attacks. So when we refer to near elimination, I certainly believe the every four-week data comes closer to that than through every eight-week dosing.

Operator, Operator

And the next question comes from Salveen Richter with Goldman Sachs.

Unknown Analyst, Analyst

This is Tommy on for Salveen. Just to follow up on the previous commentary about the Medicare Part D design. How are you thinking about the possibility that there could be a higher level of scrutiny, especially in cardiomyopathy, given the entrance of another stabilizer potentially this year?

Unknown Executive, Unknown

For the Medicare D population, things are evolving a little bit, right, with the IRA regulations and things that have come into play. Historically, there's been quite a bit of distinction around the out-of-pocket expenses for patients and the way that those had to be paid in terms of timing and timelines around that. Where we're at right now with Medicare Part D is a much more favorable position than we have been historically, and it's only anticipated to get better in the coming years. Out-of-pocket expenses are going to be limited for those patients, either $3,000 or so this year. It goes down to $2,000 or so next year. There's also the ability to spread those costs over time. It's not a one-time assessment for the patient, which I think is very positive. When we think about WAINUA and other programs that we have that will go through the Medicare Part D channel, we're encouraged that we'll be able to work effectively within that system and support patients appropriately. It's not just about our treatment for Medicare Part D, but it's the combination of all of the therapies that those patients are on that will hit that ultimate cap of $3,000 or $2,000, respectively. We're well-positioned in a good place with the reimbursement channels to allow patients to have access and appropriate access to our treatments.

Operator, Operator

And the next question comes from David Lebowitz with Citi.

David Lebowitz, Analyst

Would you be able to comment on ION224 and DGAT2 in terms of the data that you recently presented and what you think about that therapy, given the burgeoning MASH landscape?

Brett Monia, Chief Executive Officer

Sure, David. Yes, we couldn't have been more pleased with the Phase II data we reported earlier this year on DGAT2 in patients with MASH. This is the first time. Our target of DGAT2—by targeting DGAT2 and blocking the triglyceride synthesis pathway in the liver. We certainly expected robust reductions in liver fat based on this mechanism. We were pleasantly surprised to see not only that; we also saw reductions in MASH resolution, that is inflammation of the liver by biopsy, as well as a turnaround of fibrosis, with a positive reduction in fibrosis in these patients. This is the first time ever a treatment that blocks fat synthesis was shown to actually achieve this. As we mentioned, this program, as exciting as it is, doesn't fit really well within our focus, Ionis on for our wholly owned pipeline in neurology, cardiovascular, and maybe specialty rare opportunities. We think this program fits best with a partner, and that's what we're doing, moving towards partnering this program to take it to the next stage of development, which could certainly be a Phase III program. There's certainly interest, and those conversations are progressing pretty well. It's early in the discussions, but they are progressing well.

Operator, Operator

Last one comes from Kostas Biliouris with BMO.

Kostas Biliouris, Analyst

Can you remind us what is the status of sapablursen in polycythemia vera? When should we expect updates from this program given the increasing activity in that space and the multiple readouts in 2024? Also, any thoughts around the commercial opportunity of that program would be helpful?

Brett Monia, Chief Executive Officer

Thank you, Kostas. Yes, the sapablursen program in polycythemia vera Phase II continues to progress well. I think we've said before it's an open-label study, and we've been clearly seeing evidence of robust activity and efficacy in this study. What we're doing in this Phase II study is reductions in hematocrit, red cell counts normalizing in many cases. In many patients, we're conducting dose-ranging to understand what the right dose and dose regimen will be for potential advancement into Phase III development. So we're looking forward to sharing that data potentially this year. As for the market opportunity to create a question, we're assessing that now. We don't have an answer for you. It's a very interesting area, and our commercial organization is well on its way in doing all the market research for the opportunity in the United States and outside of the United States. We have not decided on where this program fits best at Ionis or with the partner. We plan to provide an update by the end of the year on the program. Thanks for the question, Kostas, and thanks, everybody, for joining us today who participated in our call. We plan to continue all this great momentum throughout the year, focused on next-level value for our shareholders and all stakeholders. We're also looking forward to providing a comprehensive overview recap of the Phase III donidalorsen data we are presenting at EAACI on May 31. So stay tuned for that, and we're looking forward to the webcast on that day. We hope you can join us on the webcast. And until then, thank you, everybody, for joining in, and have a great day.

Operator, Operator

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.