Earnings Call Transcript - IONS Q1 2022

Julie Tepper, Investor Relations

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

Brett Monia, CEO

Thanks, Julie. Good morning, everyone, and thanks for joining us on today's call. This year, we are already off to a very strong start. We continue making excellent progress in building our commercial organization, advancing, and expanding our technology in moving towards delivering an abundance of new medicines to the market. This includes the great progress we're making with our near-term commercial opportunities at inotersen, olezarsen, and donidalorsen. The Phase III NEURO-TTRansform study of eplontersen in patients with TTR polyneuropathy remains on track for data midyear, and working hand in hand with AstraZeneca, we're preparing to file for regulatory approval by the end of the year, assuming positive data. At the same time, we're also advancing our go-to-market preparations. We recently achieved our original enrollment goal in our CARDIO-TTRansform study for patients with ATTR cardiomyopathy. Last week, we announced that we took a bold step by increasing the size and duration of our study. In doing so, we expect to generate even more robust data, better positioning us to successfully compete in this dynamic market estimated to grow to well in excess of $10 billion. Based on these updates on our current risk enrollment rate, we expect a modest shift in our timeline with data readout shifting from late 2024 to the first half of 2025. We also continued to advance our olezarsen Phase III program in patients with high triglycerides. The BALANCE study of patients with familial chylomicronemia syndrome or FCS remains on track for data next year. In the core study in patients with severe hypertriglyceridemia, sHTG continues to progress with data expected in 2024. Severely elevated triglycerides is a key independent cardiovascular risk factor for which current standard of care therapies are ineffective. With over 3 million patients in the U.S. with severe hypertriglyceridemia and our first-mover advantage, we believe olezarsen represents a blockbuster opportunity for Ionis. Our Phase II OASIS-HAE study with donidalorsen in patients with hereditary angioedema also continues to progress well with data expected in 2024. We believe donidalorsen has the potential to be a best-in-class prophylactic treatment for HAE patients. This represents a significant opportunity for us given the substantial unmet medical need of these patients in this growing $1 billion market. We also made excellent progress across our rich mid-stage pipeline. AstraZeneca presented positive Phase IIb data in ACC in April from the ITG study of ION449, our PCSK9 medicine in patients who are at high risk for cardiovascular disease with hypercholesterolemia. The study managed primary and secondary endpoints showing good safety and tolerability, and ION449 demonstrated a potential best-in-class profile. With more than 10 million patients in the U.S. who remain above their LDL-C goal despite maximum statin and ezetimibe therapy, we believe ION449 could be a significant opportunity for us. Additionally, we reached full enrollment in the Phase IIb study of IONIS-AGT-LRx in patients with treatment-resistant hypertension, with data expected in the second half of this year. We're also evaluating IONIS-TTRRx in a Phase II study in patients with chronic heart failure with reduced ejection fraction. These indications combined represent over 15 million patients in the U.S. alone. Despite advances in therapies, a significant need remains for more effective treatments to address treatment-resistant hypertension and heart failure. Looking ahead, we expect numerous additional catalysts highlighted by the Phase III Monteria readout midyear and our planned regulatory filing by year-end. We also expect three more Phase IIb data readouts, several key study initiations, and updates on important technology advancements. And with that, I'll turn the call over to Beth to review our first quarter financial results. Eugene will discuss our recent key pipeline updates and preview upcoming catalysts through the rest of the year. Now over to Beth.

Elizabeth Hougen, CFO

Thank you, Brett. Our first quarter financial results clearly demonstrate a key element of our financial strength, which is our ability to consistently generate substantial revenue and cash from numerous diverse sources. Our revenues increased more than 25% year-over-year to more than $140 million, split approximately 50-50 between commercial and R&D revenues. Our operating expenses and net loss, both on a non-GAAP basis, were in line with our expectations. We ended March with a healthy balance sheet, including cash and investments of $2.1 billion. These results keep us on track to meet our 2022 financial guidance. We earned $72 million in the first quarter in revenue from our marketed products, with the majority coming from SPINRAZA. SPINRAZA's global sales were $473 million, increasing more than 7% compared to last quarter. As a result, we earned $54 million in royalty records, and as a reminder, our royalty rate resets at the beginning of each year. In line with prior years, we expect to quickly move through the royalty tiers and reach the highest tier midyear. MASA revenue increased in both the U.S. and outside the U.S. in the first quarter compared to the fourth quarter last year. In the U.S., new patient starts for SPINRAZA reached a 2-year high while discontinuations continue to decrease. Outside the U.S., the increase in SPINRAZA revenue was driven by strong initial uptake in China. We recently presented updates from the ASCEND and RESPONSE study in patients previously treated with competitive products. Biogen also presented new results from the NURTURE presymptomatic study, which continued to show that patients receiving early and sustained SPINRAZA treatment achieved and maintained motor milestones consistent with normal development. Based on these results and SPINRAZA's attractive profile, we continue to see a bright future for SPINRAZA. We earned R&D revenue of $70 million, which more than doubled compared to the same quarter last year. Our R&D revenues came from several partners for advancing 15 programs, and revenue from our strategic collaboration with Biogen was the largest contributor, earning $40 million in the first quarter for advancing numerous neurological programs. Our R&D revenue also included $20 million in cost-sharing payments from AstraZeneca for their 55% share of eplontersen's first quarter development costs. We reported non-GAAP operating expenses of $173 million, which was a 9% increase compared with the same period last year. R&D expenses increased by more than 25%, driven in large part by the six Phase III studies we are currently conducting. Our R&D expenses also included increased spending for CMC and medical affairs activities to support our near-term commercial opportunities. SG&A expenses decreased year-over-year by about 40% due largely to substantial savings from the Akcea integration and Sobi transaction. These savings were offset in part by the investments we are making in our go-to-market preparations for eplontersen, olezarsen, and donidalorsen. Looking forward, we expect our revenues in Q2 to be similar to Q1, and we also anticipate the second half revenues will be more weighted towards the back end of the year. We project operating expenses to increase in Q2 and over the course of this year. Consistent with our guidance, we expect R&D expenses to increase between 25% and 30% this year compared to last year, as our Phase III studies continue to progress. We project our SG&A expenses to be in line with last year, even while we increase our investments in preparing to bring olezarsen and donidalorsen to the market. With $2.1 billion in cash and investments at the end of March, combined with our ability to generate substantial revenue from diverse sources, we have the financial strength to underwrite the investments we are making to drive significant future growth. And with that, I'll turn the call over to Eugene.

Eugene Schneider, Chief Clinical Development Officer

Thank you, Beth. I'm pleased to report on the continued pipeline progress we made during the first quarter. Our Phase III programs are progressing well. The Phase III NEURO-TTRansform study is expected to have data midyear, and as Brett said, we're preparing to file for regulatory approval in the second half of this year, assuming positive data. Additionally, we're looking forward to presenting baseline characteristics from the NEURO-TTRansform study at the Peripheral Nerve Society Congress later this month. Last week, we announced that we achieved our original enrollment goal in the Phase III CARDIO-TTRansform study. We also announced an important amendment to our study. The amendment includes expanding enrollment to approximately 100 patients from 750 patients and extending the blinded dosing period to 140 weeks from 120. The CARDIO-TTRansform study is the largest study in patients with ATTR cardiomyopathy and is designed to generate clinical evidence of eplontersen's benefit when administered alone or in combination with stabilizers. This should enable physicians and payers to make informed decisions. By increasing the size and duration of the study, our aim is to ensure a highly positive study outcome and to generate even more robust data from a broad patient population, which will help us successfully compete in this growing and dynamic market. The timing is right to implement these changes now because enrollment is occurring at a very high rate. We have accumulated a substantial amount of baseline demographic and clinical data, and our first patients are nearing entry into the open-label extension. Based on our current rate of enrollment, together with the updates to the study that I just outlined, we're projecting a modest shift in our timeline with data readout moving from late 2024 to the first half of 2025. Our olezarsen development program continues to advance and remains the leading program targeting APOCIII currently in clinical development. We designed the olezarsen development program to fully realize the potential of this medicine, including moving it towards the market in two indications: FCS and severe hypertriglyceridemia. We have two ongoing Phase III studies, the BALANCE FCS study, which is on track for data next year, and the core SHTG study, with data planned for 2024. In Phase II, we demonstrated robust reductions in triglycerides and APOC3 with the monthly 50-milligram dose. Our two Phase III studies, in addition to evaluating the 50-milligram monthly dose, are also assessing the higher dose, which we expect to result in even greater triglyceride reductions. The donidalorsen Phase II OASIS-HAE study also remains on track for data in 2024. Earlier this year, we reported additional data from the donidalorsen Phase II study demonstrating clinically meaningful and sustained improvements in quality of life in patients with HAE. Coming out later this year, we plan to report data from the ongoing Phase II open-label extension study, including data from the monthly and bimonthly dose groups. We believe the program has strong momentum. As I've just summarized, we have a number of important mid- and late-stage programs progressing. As the year unfolds, we're looking forward to a steady cadence of data readouts. And with that, I'll turn the call back over to Brett to close the portion of the call.

Brett Monia, CEO

Thanks, Eugene. We're off to an excellent start this year. We continue to execute on our three strategic priorities that I believe will drive substantial growth for Ionis. Building the Ionis commercial pipeline, including rapidly advancing our three near-term commercial opportunities: tofersen, olezarsen, and donidalorsen toward the market while making great progress in building out our commercial organization for these important medicines. We're also continuing to build on the substantial progress we made last year in expanding and diversifying our technology, including advancing our follow-on medicine for SPINRAZA that we announced earlier this year, as well as making other important technology advancements. I look forward to sharing further details on these advancements later this year. Our third strategic priority is delivering an abundance of new medicines to the market in the near term and the longer term, starting with our planned launch of eplontersen for patients with TTR polyneuropathy as early as late next year. Additionally, we're well-capitalized with the resources we need to continue executing on all our priorities. With up to seven key data readouts expected from our mid- and late-stage pipeline before the year-end, the remainder of 2022 looks to be highly productive and eventful. And with that, I'll now open up the call for questions. Operator?

Operator, Operator

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

Yanan Zhu, Analyst

Congrats on the progress in the quarter. So I hope you could elaborate a little bit more on the protocol change to the CARDIO-TTRansform study. Putting things into context a little bit more for us, I think you probably have been monitoring the cardiovascular event rate. And you probably also are looking at the patient overall patient mix in terms of disease severity, tafamidis use, and all that. So what have the observations been during those monitoring and how does that lead to the decision to expand the study? And also lastly, just curious, have you also looked at the six-minute walk data? And how does that compare with some of the data that we have seen from other companies?

Brett Monia, CEO

Thanks, Yanan, for the question. I appreciate it. I'll address it and then ask Eugene to expand on it. As we've been saying for quite some time now, we have been monitoring this study from the beginning, looking at the enrollment and the demographics for this study. The demographics relate to the severity of how sick patients are, New York Health Class Association 1, 2, 3, for example, how much tafamidis usage is in the study versus naïve patients, the balance between hereditary and wild-type patients. Those are the primary factors we are looking at. All along, we were projecting that we might make adjustments to the study to ensure that the study readout was as successful as possible in this growing and competitive market. And that's exactly what we did. There were no firearms that we altered, anything like that. We're doing something and pulling the trigger on something that we were planning to potentially do all along. We're not looking at the six-minute walk test as something that is related to this decision. This is all about ensuring we have the right patients in this study. The last thing I'll say before I ask Eugene to expand on is that this is the right time to implement these changes in the study. We are early on and can make this decision without really a significant impact on the study timing. The modest delay is outweighed by the substantial upside this provides, allowing us to have a very positive outcome. Enrollment is going very well, very strong. So this is the right time to do this in the study. Eugene, anything to add?

Eugene Schneider, Chief Clinical Development Officer

No, that was really well characterized. I would only add that this change also maximizes our ability to look at important subgroups within the study, which is also going to be critical for informing practice patterns and providing a meaningful data set for stakeholders when the study reads out.

Yanan Zhu, Analyst

That's very helpful. If I may inquire about the midyear aplontersen polyneuropathy data readout, can you share any updates on the current stage of locking the database, data analysis, and related processes? Additionally, could you provide insight on when we might expect to see the data?

Brett Monia, CEO

Yes. As we've been saying, Yanan, we're right on track for midyear this year, expecting the top line data from the NEURO-TTRansform Phase III study. We’re not providing much more color than that. What I can add is that in parallel with the study, we're preparing for the regulatory filing, as we stated in our prepared remarks, and we're also planning for the launch. Maybe I could ask Onaiza to provide some color on the preparations we're doing for the launch with our partner, AstraZeneca.

Onaiza Cadoret, Chief Product Strategy and Operations Officer

Yes, sure. Yanan, launch preparation takes a lot of effort across a lot of team members, and I'm pleased to say the teams just had a pretty robust launch readiness meeting last week with AstraZeneca out in their offices on the East Coast. We had everyone from clinical to CMC and obviously, the marketing teams, as well as the customer-facing teams and medical affairs to think through the overall launch preparedness. They are in great shape. It's a collaboration that leverages each other's strengths. Our knowledge of amyloidosis and being in the market for about a decade and rare disease combined with their broad reach and expertise has made for a great complementary collaboration. So we're in really good shape and ahead of the curve for getting this product launched next year, assuming everything goes well, and we're expecting to file by the end of the year as well. So teams are ready to go.

Operator, Operator

The next question will come from Yaron Werber with Cowen.

Brendan Smith, Analyst

This is Brendan on for Yaron. Congrats on the quarter, guys. Just a couple of quick ones from us. First, in human resistant hypertension. Can you maybe just remind us what the Phase II readout is going to look like there maybe in terms of the number of patients and what kind of data we can expect? And really, in that same program, I guess, as you're looking ahead to a potential Phase III, is there like a threshold? Or what are you really looking for in terms of efficacy target engagement there that would give you confidence to move forward with the drug?

Brett Monia, CEO

Eugene, would you like to take that?

Eugene Schneider, Chief Clinical Development Officer

Sure. Yes. The Phase II data is in patients with treatment-resistant hypertension. We’re hoping to see consistent effects that earlier smaller studies demonstrated, which ranged from about 10 to 15 millimeters of mercury. In a larger study, we do expect greater variability, so we’re hopeful to observe significant changes. The study is appropriately sized for this type of exploration, targeting approximately 150 patients.

Brett Monia, CEO

If I can just expand on that a little bit, thanks, Eugene. Just a reminder, Brendan, we have a comprehensive program ongoing for AGT right now. In addition to the Phase IIb study for refractory hypertension, we have an ongoing study with that drug in patients with heart failure. We're looking for that to read out next year. Coming behind our lead drug is a new molecule, our Gen 2.5 AGT molecule, which completed Phase I very successfully, and we’re planning to start Phase II. We plan to evaluate all the data, including from the lead molecule, the follow-on molecule, and heart failure, and treatment-resistant hypertension to decide on the next steps for Phase III. What we want to see is confirmation of proof of concept already achieved in refractory hypertension in a larger patient population and, of course, good safety.

Operator, Operator

The next question will come from Luca Issi with RBC.

Luca Issi, Analyst

Congrats on the progress here. So maybe I get your Palo. I think the primary endpoint is actually at 9 months. Will that be sufficient for filing both in the U.S. and in the EU? Or will you need to wait for the 18-month data point to file in the EU, similar to what has happened with Alnylam? And then maybe on PCSK9, I think pretty impressive knockdown. However, we did see for patients at the high dose experience some ALT elevations. Two of them, I think, discontinued the drug. So wondering how you're thinking about that in the context of inclisiran. At least, I'm not aware of that signal. Finally, any update on the pulmonary franchise post the Ene discontinuation?

Brett Monia, CEO

I think, Luca, you've squeezed a lot in there. We are very excited and pleased with the data readout for ION449, our PCSK9 drug as presented to ACC. There's enormous need for more effective LDL lowering drugs for patients at high risk for cardiovascular disease and in continued hypercholesterolemia despite current therapy. This molecule looks to be the most potent and efficacious PCSK9 lowering drug to date. AstraZeneca is very enthusiastic about this program, as it could be a real game-changer for the millions suffering from hypercholesterolemia. The Phase IIb study was a dose-ranging study and we achieved LDL-C reductions above 70% and even up to 90% at doses without significant safety signals. Our 50 mg monthly dose showed positive results without any concerning ALT elevations. It is worth noting that only a few patients experienced mild ALT levels that returned to baseline upon continued dosing. The Phase III doses are expected to be in the range of 50 mg, where we're achieving our LDL targets. Regarding eclisiran, I prefer not to comment on competition, but it is clear there is a need for more effective agents, and ION449 addresses this gap. Eric, do you want to talk about pulmonary?

Eric Swayze, Executive Vice President of Research

Sure. So in pulmonary, we're looking at new backbone chemistries that allow us to modify the properties of the molecule to reduce inflammatory effects. We've seen really good data on some of these compounds and are working hard to advance them into relevant species for further development. We see lots of potential applications with significant unmet medical needs.

Brett Monia, CEO

We are making solid progress in the areas Eric mentioned, and I remain very encouraged about our pulmonary programs’ potential. I apologize for jumping out of order; however, I also forgot to answer your question on eplontersen. We are planning to file our NDA this year. I should point out that you mentioned the 18-month data, as we have a full data set that will conclude in the NEURO-TTRansform study by 15 months. However, the European regulators have set a higher bar for approval and signaled that they would like to see the full data set. With that said, we haven’t ruled out ex-U.S. filing, and we're keeping that option open, but our focus is right now on the NDA.

Operator, Operator

The next question will come from Jessica Fye with JPMorgan.

Jessica Fye, Analyst

I wanted to follow up on a prior question about the changes to CARDIO-TTRansform. You talked about them being driven by patient demographics. Are you changing any of the inclusion or exclusion criteria and/or the regions you'll focus on for further recruitment in addition to just increasing the sample size and treatment duration?

Eric Swayze, Executive Vice President of Research

Thanks for your questions, Jessica. We’re keeping the eligibility criteria the same; however, we are looking into certain geographies with the intention of ensuring that the population we enroll is representative of the current landscape of ATTR patients as well as enabling us to make inferences on drug effects in important subgroups of patients.

Brett Monia, CEO

And that could involve prioritizing specific geographies. As we previously said, we want the naïve versus treated patients to be well-balanced. A 50-50 split would be optimal; however, we're focused on achieving a well-balanced environment regarding tafamidis usage.

Jessica Fye, Analyst

Okay. Because I think in the past, you’ve talked about your expectations for maybe a 50-50 split between patients who are on background tafamidis and those who are not, even though you're not limiting background treatments. Is that still your expectation that this will be the mix?

Brett Monia, CEO

What we've said, Jess, is that we want the naïve versus treated patients to be very well balanced. A 50-50 split would be perfect, but we are pursuing a balance that fits the treatment landscape.

Jessica Fye, Analyst

Were these changes to CARDIO-TTRansform prompted by a recommendation from the DSMB or were they made without DSMB input? And has there been an interim analysis at this point?

Brett Monia, CEO

There hasn't been an interim analysis. We still have the option to conduct an interim analysis after patient enrollment at the appropriate time, but no internal analysis has been conducted at this stage. This was driven entirely by Ionis; it had nothing to do with the safety oversight committee or AstraZeneca even, we’re implementing this option we have at this stage when timing and enrollment are ideal. AstraZeneca fully supports our decision, and we're closely collaborating with them to make this work. This was entirely driven by Ionis.

Operator, Operator

The next question will come from Paul Matteis with Stifel.

Alexander Thompson, Analyst

This is Alex on for Paul. Just one eplontersen polyneuropathy question and then one neuro question. For polyneuropathy, can you remind us if there is a pre-specified cardiac subgroup within the study? If so, do you expect to have any exploratory biomarker imaging data either at this readout or the full readout? And then on neuro, given that Biogen announced their pipeline prioritization, have you thought at all about reacquiring any rights to your neuro programs in collaboration with Biogen?

Brett Monia, CEO

You take the first one and I’ll take the neuro question.

Eric Swayze, Executive Vice President of Research

Yes, thank you for the question. Yes, there will be analysis that looks at a specific subgroup in the cardiac group within the polyneuropathy study in the EU TRANSFORM study. It's important to note that this population is not exactly the same as that in CARDIO-TTRansform; these patients do not have symptomatic heart failure but are largely characterized by mixed phenotypes and some evidence of cardiac cases. So that’s an important distinction. Nevertheless, we will have a subgroup analysis.

Brett Monia, CEO

As for our relationship with Biogen, we have a strong partnership that has developed well over more than ten years, starting with SPINRAZA. Our relationship has grown stronger over the years, despite management changes. I believe that the Ionis pipeline of drugs we’re working on with Biogen has become an even higher priority. I don’t see them giving these rights up; rather, we’re looking to grow and advance our relationship, especially with the follow-on programs. With that said, we’re very pleased with our neuro pipeline of drugs that we are developing at Ionis independently. One example of this is that we’re very much looking forward to starting our studies in prime in the second half of this year. This is one of our lead programs and while it’s not the only program, it’s a key initiative for us. Therefore, I don’t anticipate that we will be reacquiring assets from Biogen as a result of their management changes.

Alexander Thompson, Analyst

Do you expect any of the cardiac data at the top line midyear or not until later?

Eugene Schneider, Chief Clinical Development Officer

No, the top line data will focus on the full population. All subgroup analyses will be reported at a later time point.

Operator, Operator

The next question will come from Gary Nachman with BMO Capital Markets.

Gary Nachman, Analyst

So first, just another follow-up on eplontersen and adding more patients to the cardiomyopathy study. Why didn't you wait until the PN data before making a decision since the data are coming soon? It sounds like we will have some cardio data in there for some of the patients and it could have been informative to your decision. That’s one. And then also for Beth, the $20 million that you got from AZ for eplontersen development costs, is that the kind of number we should expect on a quarterly basis, or is there some upfront loading in there? Lastly, just what are the next steps for 449, the PCSK9 program? Do you have an idea what kinds of dyslipidemic patients you'll target in the next phase based on the Phase IIb data that read out?

Brett Monia, CEO

Eugene, could you take the first question?

Eugene Schneider, Chief Clinical Development Officer

Regarding the timing of this amendment, as Brett said, we’ve been considering this for quite some time. The timing of it was a key consideration. We felt that now was the right time for implementing these changes. Why not wait until NEURO-TTRansform? Primarily because it is a very different patient population enrolled. Thus, it wouldn’t inform our decisions in CARDIO-TTRansform. Additionally, the adjustments we made were driven by our desire to achieve particular balance in the patient characteristics defined previously.

Elizabeth Hougen, CFO

On the $20 million, the way to think about that is it represents 55% of our fully loaded eplontersen development expenses in Q1. This includes external expenses, internal SPE expenses, and CMC expenses. So that $20 million is essentially 55% of what we incurred in the Phase III program in the first quarter; therefore, as expenses grow, you can expect the $20 million to rise in line about each quarter.

Brett Monia, CEO

Regarding PCSK9, if you consider it like this, the same patient population treated in adhesion will be treated in the upcoming study; this will remain the same patient pool from that original study. Thus, the Phase III patient population will consist of patients with cardiovascular disease who have had an event, who are on moderate to maximum doses of statins and remain above their LDL cholesterol targets. That will be the targeted population for Phase III.

Operator, Operator

The next question will come from Mani Foroohar with SVB Securities.

Mani Foroohar, Analyst

Not to be an entirely dead horse, but I want to talk a little bit about the commercial opportunity and strategy surrounding your approach to TTR cardiomyopathy. There's a clear avenue for you guys to have the closest thing to a true add-on label for combination therapy on top of the stabilizer. How do you think about pricing strategy? Should you be approved with data that supports that use? And how do we think about the pricing opportunity prior to and then after tafamidis' genericization in the U.S. versus EU markets?

Onaiza Cadoret, Chief Product Strategy and Operations Officer

Sure. You bring up great points regarding the eplontersen strategy. I would start by highlighting that the amendment we filed is meant to accelerate our leadership in ATTR from early to late-stage disease. We are looking at around 300,000 patients with cardiomyopathy. The data we will obtain, as Eugene mentioned, will be critical for all parties involved, including payers and clinicians. As we’ve tested our target product profile out in the marketplace, it’s become increasingly important to generate data that encompasses both those patients on tafamidis as well as naïve patients. In a dynamic market such as this, clinicians will need clear clinical evidence for how to treat both demographics. We expect a relatively open environment from a payer perspective for this patient population due to the recognition of their dire condition. They will not manage these actively, so we believe physicians will have the discretion to prescribe as they see fit, irrespective of what therapies the patients have been on previously. Based on this context, we will set our pricing to where our clinical value proposition stands, which will be supported by robust data.

Operator, Operator

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

Joseph Stringer, Analyst

A quick update on Syndelirsen and Acromegaly: we expect the Phase II readout in the second half of this year. Will there be a reduction in IGF-1 or a percentage of patients who have normalized IGF-1 that would give you confidence in this program moving forward?

Brett Monia, CEO

Eugene, do you want to take that?

Eugene Schneider, Chief Clinical Development Officer

Sure. Ultimately, our remaining need is to demonstrate normalization of IGF-1 levels, which we have set as the bar for this drug both in the monotherapy and the at-home setting. Outside of that, I can’t speculate on what kind of response rate we’d need to be excited. We are anticipating positive outcomes to re-confirm our expectations of IGF-1 normalization.

Onaiza Cadoret, Chief Product Strategy and Operations Officer

I would add that obtaining data from both the monotherapy and combinations will be very important from a market perspective. We’ll have both sets of results. People have also noted some good breakthrough attacks, so while IGF normalization is indeed key, having data reflective of both treatment pathways will be pivotal.

Operator, Operator

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

Matt, Analyst

This is Matt on for Salveen. Going back to 449, could you guys discuss your thoughts on market strategy or pricing? Separately, could you give us an update on your ALS programs, specifically, when should we expect Phase I/II data for 541?

Brett Monia, CEO

541 is our ATXI drug in sporadic or nongenetic ALS, which Biogen is running. They have not disclosed timing, but I'd look towards next year for that data readout. We're looking forward to that, as it could potentially initiate a Phase III based on positive data we receive. Onaiza, do you want to comment on the commercial opportunity or pricing for PCSK9?

Onaiza Cadoret, Chief Product Strategy and Operations Officer

Certainly. We are seeing a large market with approximately 11-16 million patients still uncontrolled on maximal tolerated statins. The guidelines are becoming increasingly aggressive, targeting at least 70 mg/dL in the U.S. and 55 mg/dL outside the U.S. Our impressive LDL-C reduction of 70% at the high dose will yield a significant value proposition. We expect that our best-in-class efficacy will impact our pricing and provide a degree of leverage in reimbursement schemes.

Operator, Operator

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

Myles Minter, Analyst

Just in your prepared remarks on 449, you mentioned AstraZeneca is going to make a formal decision on the Phase III in the second half, but your commentary on the call today seems to suggest that's well and truly going ahead. Brett, can you clarify exactly what ‘prepping for Phase III development’ means? Does this involve getting these Phase II trials done, or have you seen some protocol? Lastly, could you share any thoughts about the muscle LICA program? Are you planning to take a single asset into IND-enabling studies, or would you take multiple programs into the tox studies?

Brett Monia, CEO

AstraZeneca is not planning to simply start Phase III development based on stock positioning from the ongoing Solana data readout. They’re preparing for Phase III in earnest. This means making the drug, developing the latest protocols, and preparing for regulatory interactions. We’re actively working with them, finalizing protocols and preparing for end-of-Phase II meetings. These wheels are in motion, and as for economics, Beth, what can you say?

Elizabeth Hougen, CFO

Certainly. We’ve realized a substantial amount of revenue from this program already. As we look forward, while there aren’t any milestones directly tied to Phase III, there are several milestones tied to common regulatory events, and a considerable amount of commercial milestones will accompany our tiered royalties, which reach into the teens.

Eric Swayze, Executive Vice President of Research

For muscle LICA, our goal is to advance into development this year. We have numerous promising preclinical programs, and we intend to move aggressively by selecting the best candidates and advancing them forward based on significant unmet needs.

Brett Monia, CEO

Just to reiterate, we're under pressure to move several LICA programs forward. We remain very encouraged by the progress we are experiencing in these areas, including our wholly-owned muscle LICA programs as well as collaborative programs with Biogen and AstraZeneca. While it’s less important what we prioritize as it is to confirm that we will have numerous LICA drugs in the pipeline in the future.

Operator, Operator

The next question will come from I-Eh Jen with Laidlaw & Company.

I-Eh Jen, Analyst

Congrats on the progress. Just two quick ones. The first one, just wanted to clarify that in terms of the CARDIO-TTRansform trials, does that include any patients with a mixed phenotype? In other words, with the polyneuropathy patients, or is it simply purely cardiomyopathy?

Eugene Schneider, Chief Clinical Development Officer

Yes, it includes patients with mixed phenotypes, as we are aware of the significant overlap between the two previously considered separate diseases. We will certainly maintain an eye on neurological endpoints that are appropriate for this patient population.

Brett Monia, CEO

It's an interesting question. There’s growing focus on the neuropathy symptoms seen in patients with wild-type cardiomyopathy. So we are monitoring this closely, as Eugene stated. Unfortunately, we have reached the end of our time for this call; however, I’d like to sincerely thank everyone for joining and engaging today. We're making great strides at Ionis, pleased with this quarter's performance, and we’re excited about the upcoming developments. We look forward to providing additional updates throughout the remainder of the year. Thank you, and everyone have a great day.

Operator, Operator

Goodbye.