Q4 2019 Earnings Call
The mine during this call is being recorded.
Let's turn to call it over to gout, Kathleen Gallagher actually as a vice president of corporate Communications and Investor Relations Ms. Gallagher. Please begin.
Thank you Katrina Hello, everyone. Thank you for joining todays call with me today are daily in a given our interim Chief Executive Officer, Mike Mclean, Our Chief Financial Officer called the day, our Chief Commercial officer, Alan how with our Chief operating officer.
As a reminder, this conference call include forward looking statements regarding the financial outlook for Axio axiom business and therapeutic and commercial potential abaxis products in development.
These statements subscribing to be a gold.
The patients financial or put other projection intentions or beliefs, including the commercial potential it takes anyway liberal and our pipeline joint is a forward looking statement I should be considered as Patrick statements.
Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of discovering developing and commercializing drugs that are safe and effective for use of human therapeutics.
He endeavor building a business around such fun.
I feel forward looking statements also involve assumption, but if they never materialize correct could cause results to differ materially from those expressed or implied by such forward looking statement.
Although like these forward looking statements reflect the good thing Joe nothing that is right.
So based only on taxes doctors currently known but yes.
As a result, you are cautioned not to allow these forward looking statements. These and other like Concentrix. These programs are described in the additional detail and I see as most recent quarterly report on form 10-Q, and then the most recent annual report form 10-K on file with the as you see.
Copies of these other documents are available from the.
In addition earlier today, we issued a press release and related financial tables, including a reconciliation of GAAP to our reported non-GAAP financial measures that we will discuss today.
It was the need to maximize the slides that accompany today's call.
At the Investor section of our website now I'll turn the call over to Daniel.
Hi, good afternoon, everyone and thanks for joining todays call.
Historically coal by highlighting our achievements for 29 teams and our plans for Twentytwenty. After that calls a discussed for commercial efforts and Mike will discuss our financials I.
I will wrap up with some comments in the pipeline to provide the closing thoughts as we look ahead 2020.
Do you like gene was successful year for Akcea as we continue to advance.
Turning to build a ring true forms of treatments the full living Smith.
And where diseases.
We ended the year with $464 million of cash from the boundaries cutting else in a strong positions excuse on our strategic parties for twice each when she and beyond.
Our focus and 29 team was on the two to two climbed to commercial products two phase three programs a two medicines nearing phase two data I'm hopping.
She's this plan and exceeded it with our two positive phase two data read outs.
Let's start with our two commercial province Tech savvy and way Liberal.
We generated $42 million in told US you each once you might see.
Next I'd is commercially available in over 10 countries I'm whatever is approved in Europe and commercially available in Germany.
We're pleased with the progress we have already made and we expect continued to expand our launch for both products and additional countries in twentytwenty.
I'll provide more details later on the coal.
Our phase three studies are initiators enrolling for axiom teach youre lrx for both the cardio transform and euro transformed studies in patients with future me mediated amyloid Party my LC I'm fully yourself.
These studies expand their commitment to the teacher community and we're seeing a lot to be suzy them from the physician and patient communities for this new therapy more broadly address teach youre unlike doses.
In addition, we're pleased that Novartis was able to rapidly into shape. There akcea eats away Lrx phase three study in patients with L.P.A. driven heart disease.
Novartis is also administrating medication to patients in the study.
With this potential first in class mobile cardiovascular therapies, there's a tremendous amount of interest in the program.
To close out two to two initiative, we reported positive phase two results for both Akcea April see three Rx and next year and PTCL Stellarex.
With a complete so these two studies, we now have data from over 11 hunger people freezing the clinical settings with like in medicines todays over 500, a food or from the Akcea pipeline.
Well, those 1100 sounds from them or patients being treated for one year.
We're consistently seeing positive efficacy safety and tolerability across the like itself.
Another important highlights from 29 team was our successful expansion of our strategic partnerships.
[laughter] excuse me. In addition to Novartis is license of Akcea takes away Lrx at the beginning of year in the third quarter, we entered into a partnership with Pfizer for Akcea and PCL free Lrx.
We chose these partners for their ability to accelerate the development of the commercialization of these two important medicines and there are best ones and the likes of technologies could have extremists 'cause impacts on these large patient community.
We also announced that we retained the rights akcea equal see three Rx, we're thrilled to now be able to drive the development and commercialization strategy for this medicine.
Tom to focus our efforts on developing Akcea, if we'll see three lrx for FCS initiating a phase three studies this year as well as evaluating other indications that could be positively impacted by reducing eight to see three I'm triglycerides.
As we look to 2020 m. beyond our strategy is to successfully execute on our two commercial launches adds progress the transformational programs that we currently have in development.
In particular, we plan to aggressively pursued development a vaccine April see three Rx in FCF, while also adding additional rare disease medicines to our pipeline both from my own this time from third parties.
Critical to our strategy is ensuring that we have a strong team in place on the third quarter coal I know, we promoted called journey to Chief Commercial officer in December we added another key leader to the executive team. We now so Alex Howard joined as Chief operating officer overseeing.
In a broad range of operational areas, including corporate strategy business developments on the funds management legal and compliance and product supply chain.
In addition, we now see appointments of then partial as chair of the Akcea Board directors.
Well as additional Barber Jani number salzman as new members of the board.
As we build on the strength of the existing leadership team on board of directors, we have a strong foundation in place.
Skews on our strategy and drive our company's growth.
Looking ahead, we're excited about the number of upcoming milestones and Twentytwenty. We anticipate additional went live written tech city launches throughout the year.
Well they live right in the U.S. our goal is to refile and we hope to provide an update on this in the coming months.
For the pipeline, we anticipate sharing more detailed developing plans for Akcea APC three lrx as we look to initiate a phase three study for us yet this year.
We will also be presenting the phase two data for both Akcea hate to see three Lrx next year and P. T. L. Three lrx later this year.
Furthermore, we continue to closely collaborate with my own us to satisfy a potentially license a novel rare disease medicine from are wholly owned pipeline as the search for potential third party medicines that complements our rare disease focused and capabilities.
With that I'll now turn the call over to calls to discuss our commercial efforts in further detail.
Thank you Damian and good afternoon, everyone. We continue to make steady progress with our two commercial products Tech study and we liberal.
29 gene was a productive year for our team Tech said he is commercially available in over 10 countries in North America. Our focus was on launching take study well our team in Europe was launching Tech study and we liberal.
2019 was about physician education patient finding market access and rolling out the Akcea connect program internationally.
We've built a strong foundation for both commercial products as we entered 2020.
Of the $42 million, a total product revenue Damian mentioned earlier $14 million was generated in Q4, a 15% increase from Q3, which is a continuation of the steady quarter over quarter growth we saw throughout 2019.
Let's start with our progress with Tech study in the U.S.
Very pleased with the growth we saw from Q3 to Q4 in tech setting new patient starts. In addition, we achieved a 42% increase in new prescribing physicians.
Setting has positive momentum in the U.S. market and we continue to see a mix of cardiology neurology and hematology prescribing physicians in both the academic and community setting.
We are encouraged that physicians, who have experience with tech study are continuing to prescribe it and that physicians, who are new detect study are choosing chegg study over other options for their patients.
We saw a 17% increase in units shipped to U.S. patients in Q4 over the prior quarter.
We attribute this growth to the team's continued execution into our strategic approach focusing on a balance between the amyloidosis centers and community based positions.
One thing I'm very pleased with how we are competing when it comes to prescribers choosing chegg study for newly diagnosed patients.
We see prescribers choosy takes that even polyneuropathy of HIV TTR for newly diagnosed patients over other medicines based on the benefits of efficacy and the ability to self injection outside of a medical facility.
And we see patients choosing to switch to tech setting.
In addition, we see physicians prescribing tech savvy in combination with other medicines.
Our success in finding new patients and bringing them on detect study is in part due to our execution of the entry TTR compass genetic testing program.
We now have over 1400 physicians using ichi TTR compass physicians are excited to diagnose locally with HIV TTR compass, rather than having to syndication to an academic center and to treat patients locally with tech savvy.
The convenience of local diagnosis and treatment is also a benefit for patients experiencing a debilitating symptoms of autonomic neuropathy, which makes travel difficult for patients and for their caregivers.
Once patients are being treated with tech setting akcea connect is there to provide high levels of support to patients.
Patients are able to realize the benefits of the program and are doing well on therapy, which we attribute in part to the individualized support that the field based akcea connecting provides.
We continue to hear very positive feedback around their experiences was actually a connect which is an international program across all commercial geographies.
From a market access standpoint today, we have 94% of total us commercial lives covered protect setting.
Not only do we have.
Coverage for Tech said, he today, but our contracting efforts are going extremely well and we have negotiated long term coverage that secure 75% of commercial lives through the year 2023.
Outside of the U.S., we continue to work towards reimbursement an additional countries in Canada. We received a positive listing recommendation from both health technology assessment or H.T.A. bodies.
We have initiated prevention negotiations and have shipped commercial product.
We continue to engage with physician and patient groups across Europe in Canada.
Last month in Portugal, which has one of the largest populations of patients with ha TTR, we sponsored Ichi TTR, you Preceptorship program, which provided positions with an opportunity to connect with clinicians from different specialties and to learn best practices for managing patients diagnosed with HIV TTR amyloidosis.
Polyneuropathy.
In addition last quarter, we hosted an HIV TTR Southern Europe summit in Rome, where international experts stressed the importance of early diagnosis of Polyneuropathy.
Differential diagnosis and involvement of the management of patient by multiple specialists, we continue to roll out take steady across Europe, and look forward to launching additional countries throughout the year.
Finally, PTC therapeutics is launching in Brazil and continues to work toward access and additional Latin American countries.
Overall with Tech study, we continued to be optimistic about the steady progress, we're making and the momentum we are seeing in terms of new patient starts as well as the breadth and depth of physicians prescribing Tech study.
Turning to weigh lever up as you remember we launched we liver in Germany at the end of Q3, and we're continuing to enroll patients in our eight to you in France, which is a reimbursed early access program.
As we continue to broaden the launch for way liver into additional countries. It's important to remember that while there are no endemic populations in Europe. There are countries that have larger populations and others. So while there are not many people living with FCS in Germany. There are a larger number of people with FCS and France and the UK.
Our team is focused on disease education patient finding in securing market access as we follow the typical launch sequence in Europe.
In the UK, we're in the early stages of our process to secure reimbursement with nice nice issued an evaluation consultation document or E. C. D that did not recommend way lebara, which is not unusual at this stage of the process. We went through a very similar process would take study which was eventually recommended we are committed to continue.
During discussions with nice and with the HCV bodies across Europe as we're working to bring this only approved treatment to people living with Fcs.
Beyond Europe. The PTC team continues to work to provide access to a liberal to patients across Latin America and are working toward approval for we liver in Brazil by the end of this year.
Our team is working diligently as we execute on both the type study away liver launches and we look forward to keeping you updated on our progress I'll now turn the call over to Mike to discuss our financials.
Thank you tile in 2019, we had total revenue of approximately $489 million.
Including approximately $42 million and product revenue.
Mm $136 million in revenue from collaborations.
For the year, we had operating income of approximately $75 million.
The non-GAAP basis.
Including non-GAAP operating expenses of $413 million.
In addition.
Higher revenues driven by the Novartis option exercise for the license of Akcea people in Colorado.
In the Pfizer license.
Akcea Angiopoietin like three hour resulted in net income on a GAAP and non-GAAP basis for the year.
As we discussed on our last earnings call, we generated substantial upfront payment of $250 million when we license Akcea Angiopoietin like three Hell Iraq compliant.
We recognized almost the entirety of the payment as revenue in the fourth quarter.
We just put all economics of this arrangement 50 50 with Ioannis.
Settle their obligation to items.
For half of the upfront.
6.9 million shares of Akcea common stock.
In addition, PCC announced in October that they received approval for take setting in Brazil.
With the approval, we earned 4 million a $4 million milestone, which was recognized in the fourth quarter.
60% to battle.
So I on a per the terms of our profit sharing agreement.
Product revenues related to I'd sales and take study and we will.
Take study has been approved in the U.S., Canada, Andy you since 2018 and way liver and there's only approved in the medium since Q2 of this year.
Specifically, we deliver has only been sold commercially in Germany, thus far starting late in Q3.
Therefore, the preponderance of our product revenues come from sales of taking say.
Our product revenues of $14 million in the fourth quarter represents a 15% increase over the third quarter.
Driven by the expansion in penetration uptake setting and a lot simply liver and Germany.
We ended the year with approximately $164 million in cash and short term investment.
With our substantial liquidity, we're well positioned to continue to run our business and potentially broaden our pipeline.
I'll now turn the call in the thing.
Thank you Mike let me begin with the two positive data read outs that were recently announced for Akcea April C Lrx, Akcea and PTCL free Lrx.
In January we announced positive top line results from the Phase two study of Akcea acre feet three Rx in the treatment of patients with Hypertriglyceridemia.
You are at risk for our hub established cardiovascular disease.
We met the primary endpoint triglyceride lowering as well as multiple secondary endpoints.
At the highest monthly doses from more than 90% of patients reach triglyceride levels below the recognized threshold for cardiovascular risk, which is 150 megs per deciliter.
Akcea April see three Rx also had a favorable safety and Tolerability profile.
The most common adverse events were injection site reactions, which were mostly miles and infrequent.
Importantly for Akcea April C Rx and for the broader like a platform where no safety signals.
We plan to present, some more detail topline data at a conference later in the year.
These data are very encouraging as we finalize our plans to rapidly start phase three study in FCS This year, Marcus and patient community, we know really well.
The time to share more detailed development plans for SCS later this year.
And we're also looking at other indications in rare and common diseases associated with elevated triglycerides.
Next let's turn to Akcea and Tcl, three Rx, which is partnered with Pfizer.
We announced positive top line results from the Phase two study in a population of patients with Hypertriglyceridemia type two diabetes, a non alcoholic fatty liver disease our novel.
We met the primary endpoints forget stride lowering as well as significant reductions in additional lifted from fares and and PCL three.
We did not see reductions in liver fat or hemoglobin, a one c. We are pleased with the clear evidence of cardiovascular risk modification.
From a safety sound point, Akcea ANZ PCL tree Lrx was generally well tolerated with favorable safety and Tolerability profile.
Again, the most common adverse events was injection site reactions, which were mostly miles.
We plan to present detailed results for the future of medical Congress.
Given the results of this study we see a lot of potential for Akcea and feel free lrx treating cardiovascular disease, and we're now working Pfizer to design the best development path for this medicine.
Both phase two studies further validates the advantages of the liked it technology platform for large indications like cardiovascular disease.
We're pleased that we continue to seek consistent performance across or like a programs in terms of efficacy safety and patient tolerability.
Moving to axiom TTR Lrx cardio transform and your transform phase three studies are underway in patients with both the hereditary and was high forms of TTR amyloidosis.
This represents another important milestone that further demonstrating akcea analysis commitment to bring new you treatment options.
Since around the world living with TTR, amyloidosis, or a T T or.
Both the wildfire and Red Freeform they sure are under diagnosed unstable with limited treatment options available.
After talking to experts, we believe the teacher or lowering has potential to be more impactful for patients suffering from a secure and current treatments, which stabilize the protein.
We continue to build on our established expertise in this area and we're expanding our commitment to the TTR community.
We remain very encouraged by the progress of our clinical studies with axiom TTR Lrx, thus far I look forward to working with our team of outstanding Golden investigators to continue to advance this clinical program in the months ahead.
Finally, the Akcea April eight Lrx phase three Lpa Horizon studies is up and running with Novartis and the first patients have been treated.
Novartis continues to be a great partner and they are heavily invested in this program and in a success.
To wrap up we had a successful 29 team we achieved our two to two funds further advance our broad pipeline of Paula.
As for instance, our management team on board of directors.
We have a set of life changing medicines that we believe can have a significant impact on patients who are currently underserved.
The positive results from Akcea April C, Lrx, and Akcea and PCL free Lrx, our delays in a series of data read outs that continue to support the commercial potential of the like technology platform.
With launches an additional countries on the horizon for Tech said in my live risk the commitment from my eldest to potentially license of additional rare disease medicines that are complementary to our pipeline capabilities.
See it is well positioned in twentytwenty and beyond.
We will be celebrating rare disease say on Friday.
I want to close by thanking all of our employees patients caregivers and advocates in the rare disease community for their share dedication to advancing a supporting new therapies and unaddressed diseases.
I'll now open up the line for questions.
Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchstone telephone. If your question has been answered you always true move yourself from the Q. Please press the pound.
For the first question, we have had massler from Needham Chad Your line is open.
Great. Thanks, Good evening and thanks for taking my question.
We were just start with a with way Libra.
You said you've made the decision to refile.
In the U.S., perhaps yes, I think thats.
That's great.
Can you maybe talk a little bit about.
What factors live.
Led you to want.
To Refile and then also how are you thinking about that drug versus the HRC, which I presume is going to be a firewall follow on in a similar way to this is a CR program.
No those those two will be a couple of years apart.
You'll have one out there for patients and then im and try to get them or on the like that but just wondering your thoughts about how to how to handle that.
Then just one more on that and that's on F positive data back to this summer.
No. This is a less important indication for your we've talked about that I I've movies, not aware have you ever formally saying you wouldn't pursue it. So just wondering what your plans are there.
Okay.
Okay. Thank you Chad for the questions.
Let me for.
Restate the that with it being the comment around re filing.
I live in the U.S., so that our goal is to refile. This year. That's our goal. We we are discussions are continuing with the FDA and we're going to be providing an update in the coming up.
So that's that's way liver April C. Yeah, absolutely very excited about progressing that Ford in the FCF patient population also looking at other rare disease indications.
We have a a goal of starting phase three.
In FCS by the end of year and will will describe the study design and.
More information around that study as we you know in the coming months as well in terms of FPL. You know, we're still talking to our advisors are kalo internally around sort of what's the best path forward for that indication.
Great. Thanks, so to stuff to stay tuned there.
Then just on had said you make you made some.
I took this is very encouraging remarks about.
The market dynamic there you guys always very very careful to be flight respectful of your competition, but reading between the lines. It sounds like you're seeing some use on top of the family and maybe some patient retune from on Petro and made some encouraging signs for doctors choosing it over on patch referred for for new patient.
Okay can you give us any idea even qualitatively I mean are are there a lot of doctors out there.
Both in my try to decide between them based on on patients or are you looking to different that instead of practice or.
Position today, they often choose one I've talked to several dock myself for all.
Where a boat I havent really got extensive sort of in the market at large how back to playing out.
That dynamic.
Yeah, I know that Hum that question over to cost.
Yes, Thanks, Chad I appreciate the question and.
The first thing I'll say about competing in the market right now as we're very pleased with our performance and the progress that we've made.
We've got.
Focus on new patient starts so patients that are actually naive to therapy.
That's really why do we want to bring the drug to to begin with.
I believe that that is where we're going to win this battle over time as with the naive patient population keeping in mind that a lot of these patients with hereditary forms of the disease and polyneuropathy. They number one already been aware that they have the disease until we go out and educate the physician community and get them diagnose through our compass genetic testing program and.
Number two than they have to be aware of the benefits of tech study being subcu self inject as well as an effective product with a manageable safety profile in order to get them initiated on therapy.
In terms of use with other therapies, obviously, we will see patients moving from other therapies over to take study and we are seeing as I mentioned take city being used with other medicine. So overall I think it's kind of.
There are variables in the in the marketplace right now, but we're really focused on winning that battle with naive patients in the market.
Okay, all right great. Thank you.
For the next question, we have chamber to know from Wells Fargo. The line is open.
Well good afternoon, it to Nick on food, Jim softened. Thanks, taking my questions. That's what they mean its full.
C. Lorex, obviously doesn't novartis passed on this.
There are also large.
Tom or indication so equaled uncommon indications.
What is the current strategy for how you might address those and then I have a follow up.
Yeah.
Yeah. Thanks, Nick Thanks for the question. So look we're really excited about the data came out in the phase two.
And clearly the medicine has golf potential not just in rare disease indication for also big disease indications because of the profile ever seen with significant reductions not just in April see three and targets rise, but also additional.
Listen parameters, including the LDL C and Rem cholesterol and also were seen increases in high density life for protein as well, which is which is really exciting. So it's a very very exciting medicine, and where we're focused on trying to understand what indications we could we.
Use of medicine for we've made a decision on SCS when we're going to move forward the phase three and Fcs.
But we're also thinking about bigger disease indications on the team are working through that right now and.
Yeah, it's clearly golf potential.
On the very it seems indication, but it's just going to take a few months here to figure out the best course of action for the big disease indications.
And just follow up and then you mean.
Yeah, No bonuses declined was there and increased level of interest from other potential partners, who are you waiting to the fine we think the.
Program.
It's like before you seek additional partnership opportunities.
Yeah, No I mean, the theme seen a lot of interest in the program.
Since novartis decided not to exercise their option.
And when folks have seen the data as well and so we're we're still of the early stages are figuring out what to do there, but the thing that's been all of interest.
Thanks, and then in terms of.
Some of the covenants for expanding the pipeline.
He is there a particular target.
Oh particular compound within the pipeline take a very desirous of coal or you just going to be looking to see what's the best said and then outside of Novartis.
What are you thinking all.
So would not be amenable to nine cents type strategy given.
The level of expertise the company in the predictability on development now.
Like a conjugates.
Yes, so on your first question.
We're working closely with Ioannis on trying to determine.
Medicines that would be most appropriate for akcea is interesting capabilities and there are a number of medicines, obviously, you're familiar with that pipeline. There's a number of medicines that would fit very well into akcea and our focus is a rare diseases company and.
It's too early to say you know what exactly those medicines will be will provide you some more information in due course.
In terms of.
Additional third party medicines, we were keeping an open minds. Obviously, you know we were sort of modality agnostic doesn't have to be antisense oligonucleotides, but really it has to it has to fit into our capabilities and expertise for to make sense for.
Frac CS and so we're keeping an open minds, we continue to look for potential additional assets well I would say that they would be later stage assets rather than sort of early stage. You know 30 states preclinical early stage clinical.
Yes, there probably too far away for us to be very interested in them. So we're looking at phase three or close for approval or even approved medicines.
So very helpful. Thanks, Amy.
Now you're welcome.
Again, if you have a question at this time. Please press the star and then the number one key on your Touchtone tell us Alan.
We have a question from Paul Masson from Stifel signings open.
Hey, guys. Thanks for taking the question. This is made on for Paul.
Maybe maybe just to for me firstly on on FCS can you just talk about how big that market is for first versus prevalent.
And then second I'll have you been approaching the market for a while how many patients identified out there today.
And then just secondly.
I know you I can provide guidance on tech savvy, but how are you thinking about what successful 2020 might look like for that drug. Thanks.
Thank you named the questions on Fcs.
We you know we believe that there are.
Three to 5000 patients and that number hasn't changed.
And of course, yes, we've we've identified patients from you know that that could be appropriate for will live.
In the U.S. and then Europe.
In terms of guidance for Tech savvy 2020, we're not giving guidance out for Chegg study for Twentytwenty.
Thank you.
Hi, I'm showing no further questions at this time I would now like to turn the conference back to Mr. Damian Mcdevitt.
Okay. Thank you for joining today Akcea, we'll be attending the upcoming conferences. The Cowen annual Healthcare Conference next week on the Wells Fargo biotech corporate access day as wells, the Needham and company.
Health Care conference, both which are in April we invite you to visit us at these conferences or at our headquarters in Boston, We look forward to keeping you updated on our progress as we continue to execute on the tech savvy and more liberal launches and build upon the strong foundation at Akcea have a good afternoon.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.
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