Q1 2021 Ionis Pharmaceuticals Inc Earnings Call

[music].

Okay.

Good morning, and welcome to Ion is pharmaceuticals first quarter 2021 financial results conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.

After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on the Touchtone phone to withdraw your question. Please press Star then two.

As a reminder, this call is being recorded.

I would like to turn the conference over to Wade Walke, Vice President Investor Relations to lead off the call. Please begin.

Thank you Betsy.

Before we begin I encourage everyone to go to the investors section of the eye on its website to find the press release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures, we will discuss the base.

We believe non-GAAP financial results better represent the economics of our business and how we manage our business.

We have also posted slides on the website the company our discussion today.

With me on today's call are Brett <unk>, Chief Executive Officer.

Oh, good Chief Financial Officer, and Richard Geary, Executive Vice President of development and.

Joining us for Q&A will be on the days of category Chief Corporate development of commercial officer, and Eric Swayze Executive Vice President of research.

I would like to draw your attention to slide three of our presentation, which contains our forward looking language statement, we will be making forward looking statements, which 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 discussed in our SEC filings for additional detail.

And with that I'll turn the call over to Brett.

Thanks Wade.

Morning, and thank you for joining us on today's call.

Last year, we introduced a new strategy to drive growth by developing and commercializing medicines from our pipeline.

Pipeline.

Since that time, we've taken a number of key steps that have advanced our strategy and move us closer to successfully commercializing our own products.

Most recently, we expanded our sobey distribution agreement and restructured our tech city operations.

This transaction unlocks significant resources that we are redeploying to advance our wholly owned pipeline and prepare for commercialization of our highest priority medicines, which include GTR Leica enables the three like.

We are also using savings from the <unk> transaction to invest even more in our technology to further broaden the reach of our therapeutic capabilities.

Turning now to our pipeline.

We were particularly pleased with the phase II data from Iona speaking of R. F.

Hence with hereditary angioedema or a J E.

Based on these encouraging results, we're advancing into a phase III study, where we hope to further demonstrate the potential of this medicine as the best in class products that could change the standard of care for patients with this disease.

We also recently initiated pivotal studies with two wholly owned neurological disease medicines I on 36, three and I on $3 73 for patients with the fuss AOS and Alexander disease, respectively.

Given the severe unmet need of these patients and the progress we have made with regulators. Both medicines are on an accelerated path to the market.

And we are pleased with the progress, we're making across our rich phase III pipeline with medicines for the ATT, our amyloidosis S. C. S. L P little a driven cardiovascular disease and the AOS.

These phase III programs remain on track with data from the Phase III Valor study of <unk> in patients with side when the AOS expected this fall.

Positive TV results will demonstrate for the first time that of disease modifying treatment as possible for patients with AOS.

A positive outcome in the study would also moved over some one step closer to becoming our next commercial product.

And Additionally toll free some success with further solidify our leadership position in the development of first in class of medicines for the treatment of neurological diseases.

In support of our strategic and pipeline objectives earlier. This year, we launched the large capital project to expand our manufacturing and R&D capacity.

It's important as we move our late and mid stage medicines toward the market.

Also important as we advance our technology with new Chemistries, including novel Chemistry, and new routes of administration.

We have made significant progress in focusing on advancing our pipeline and our business strategy.

Our financial results reflect our strategic investments and keeps us on track to achieve our 2021 guidance.

And importantly, we remain well positioned to have 12 or more marketed products in 2026.

With that I'd like to turn the call of the Bath to review, our first quarter financial results and Richard will discuss recent pipeline updates from preview key upcoming catalyst through the rest of the of the year.

After Richard I'll wrap up our prepared remarks before taking your questions.

Now on over to Beth.

You bet.

In February we provided guidance this year the reflects our new strategy to maximize the value of our wholly owned medicines focused primarily on commercializing our rare neurological and cardio metabolic disease programs.

Our first quarter result of $112 million in revenue.

59 million of non-GAAP operating expenses and the non-GAAP net loss of $45 million reflected this new strategy and we're in line with our expectations.

Now to turn the square revenues, it's been around the generated over $521 million in global sales.

We earned $60 million in royalty revenue as of adult and virtually all of that revenue falls of our bottom line as profit.

Our first quarter spend rise of the revenue decreased slightly compared to the prior quarter because of royalty rate reset at the beginning of the chair.

In prior years, we expect to reach the highest royalty tier by mid year.

The response and the boat studies continued to progress Wow the.

These studies remain important elements of Biogen ongoing efforts to enhance SMA patient outcome and guide treatment decisions.

We look forward to additional financing plans to take to further reinforce its been rises proven efficacy and safety profile in SMA patients of all ages.

The amount of remains the SME market leader and with over 11000 patients on treatment and over 60000 SMA patients in markets, where Biogen has a commercial presence. We believe spin right that will continue to be a foundation of care for the treatment of SMA.

We also generated combined it takes 30 and we live on revenue of $20 million. As a reminder, our guidance reflects a shift in revenue protect study and weighted libra due to the change in the Confucian under our <unk>.

<unk>.

We are pleased with the smooth transition of our Tech study and we live our operations to Tobi, which are now complete in Europe, and well underway protect 30 in North America.

Under our new distribution model, our commercial revenues from these products shift from product sales to distribution fees based on some of these net sales.

In the first quarter of revenues reflected the shifts in Europe the.

Beginning in the second quarter revenue.

<unk> sales in North America will also reflect the shift.

In addition, we earned nearly $30 million of R&D revenues in the first quarter.

We generated from multiple sources related to our partnered programs.

Our non-GAAP operating expenses were $159 million in the first quarter, which represented a modest increase compared to the same period last year and was in line with our guidance the.

The increase was driven by higher R&D expense.

Related primarily to advancing the phase three studies of TCR, Leica and Apus he three like.

And development activities from multiple program across our wholly owned pipeline.

As expected our SG&A expenses decreased in the first quarter, primarily due to cost efficiencies, we realized from the integration of vaccine and the restructuring of our European operation.

An important element of our new strategy is our focus on investing internally for growth.

And our first quarter result, right. It is the aspect of our of our strategy.

With our first quarter results, we remain on track to achieve our 2021 guidance of a net loss of less than $75 million on the non-GAAP basis.

We expect our revenues in Q2 to be similar to the first quarter.

And we're projecting an increase in revenue in the second half of this year driven in part by increasing R&D revenues as we achieve key milestones for our partnered programs.

Already in the second quarter, we achieved a $10 million from Biogen for a day I am by four one of our medicine targeting of tax of two for the treatment of ally.

We project operating expenses to increase over the course of this year as our mid and late stage medicines advance in development.

We expect our R&D expenses to increase as the phase III studies of TCR, Leica and Apoc III like of progress.

As we initiate the apoc III like of Phase III study for patients with severely high triglyceride and as parents of advance key K K.

Into the phase III study.

We expect our SG&A expenses to decrease further in the second half of this year as we realize savings from our there'll be transactions.

Last month, we sit on their balance sheet, when we completed a $630 million convertible notes offering.

These notes carry a zero percent interest rate.

We completed this transaction to accomplish two primary goals.

To refinance the $310 million of 1% convertible notes due in November and second to fund a large capital project, we recently initiated.

We evaluated multiple financing options to achieve our goals and ultimately with the zero percent interest rate, we determined that the low cost of capital we secured through the convertible debt offering was our best financing option.

Importantly, we maintain a strong balance sheet to support our wholly owned pipeline and our technology.

He knew the portion of the proceeds from our debt offering for a large capital project to expand our manufacturing and R&D capacity.

We expect the multiyear project the cost between $250 million and $350 million.

We anticipate.

The project in 2024, and once complete we will have the manufacturing capacity to support the future needs of our wholly owned pipeline.

Additionally, we will increase our capacity to bring forward novel chemistry, including new like of chemistry.

The critical thing we advance our wholly owned pipeline to the market.

This project enables us to build on our leadership and development chemistry, and manufacturing of oligonucleotide therapeutics and to ensure we have the infrastructure, we need to achieve our strategic objectives.

As you can see we have taken important steps already this year to drive growth.

And to position us to achieve our goal of 12 or more marketed products in 2026.

And with that I'll turn the call over to Richard.

Well, thank you Beth.

We continued to execute on our pipeline goals this quarter, achieving a number of successes and advancing towards significant value driving catalysts.

We're particularly pleased with the positive phase II results from my honest L. Rx our once monthly subcutaneously administered medicine for the prophylactic treatment of hereditary angioedema or H E.

I honest PKK <unk> demonstrated the main reduction of up to 97% in the 8-K E attacks together with favorable safety and Tolerability.

Look forward to reporting the.

These phase two results in greater detail later this year.

We are now advancing I honest PKK L Rx into a phase III study and hope to.

Further demonstrate its potential to be the best in class prophylactic treatment for patients with HIV.

We look forward to sharing our phase III plans with you later this year. We also continue to be pleased with the progress of our phase III pipeline, including our partnered programs pellet Carson in tow person.

As well as our wholly owned programs I honest tea T. R. L. Rx remains on track and our studies in patients with Ctr Polyneuropathy and PTR cardiomyopathy.

Say per seat three L. Rx also remains on track in the Phase III study in patients with Fcs.

We expect to begin a second phase III study of April of <unk> later this year.

The second phase III study will be in patients with severe hypo triglycerides EMEA hasn't asked the prevalence of over 3 million patients in the U S.

We also expanded our late stage pipeline with the initiation of pivotal studies for eye on 36, three in patients with phosphate of loss.

And of eye on 373 in patients without others disease.

Because of the strong efforts of our development team both of these medicines for rare fatal diseases are on accelerated paths to patients.

From our mid stage pipeline just this week positive data from the phase II study of <unk> L. Rx in patients with resistant hypertension were published in the journal of American College of Cardiology.

We also plan to present these data as of the ACC Conference later this month.

Based on these income from phase II results, we've advanced die on a say G. T L Rx and do a larger phase <unk> study in patients with resistant hypertension on three or more anti hypertensive medications and of phase two study in patients with chronic heart failure with reduced ejection fraction.

In the Phase Iia study of eye on SGA L Rx and the acromegaly patients poorly controlled on somatostatin analogs, we achieved substantial reductions in growth hormone binding protein, which is the surrogate marker for G HR and of the <unk>.

The other with favorable safety and Tolerability.

We plan to discuss these results in greater detail together with interim results from our ongoing open label extension study later this year.

With eye on us in at two five Rx, we recently learned of of finding and a long term preclinical toxicology study.

While we believe we would've been able to work through this finding doing so would impact our timelines.

As a result, we have reevaluated the totality of available data.

And decided to continue further development of I honest enact to five Rx.

We are of a number of late stage research programs and our pulmonary pipeline.

We are now prioritizing and continuing to evaluate for further development.

Now to upcoming catalysts from <unk>.

<unk> the pipeline.

Very pleased with the progress of Iona Snap T. Rx, our medicine designed to reduce tau protein associated with Alzheimer's disease.

We were encouraged by the top line results from my honest map T. Rx phase one study in patients with all timers disease Biogen reported earlier this year.

I honest map T Rx demonstrated durable time and dose dependent reductions in CSF Tau protein and was generally well tolerated in this study Biogen plans to report. These results of the Alzheimers Association International Conference in July.

Our ALS program is also advancing well toe person has the potential to become the first disease modifying treatment for AOS and fun of change the treatment landscape.

We believe <unk> may also have the potential the slow progression or even to delay the onset of disease and pre symptomatic <unk> ALS patients similar to the profound effects demonstrated in pre symptomatic SMA patients treated with spin Rosa.

Biogen recently initiated the Atlas study to address this question and hopefully demonstrate a similarly profound effect.

With Topher sent in pre symptomatic ALS patients.

And with the programs for phosphate L. S C nine AOS and for the broader causes of AOS.

We are addressing essentially all forms of this disease.

Importantly, with our pipeline progress to date and our key upcoming data catalysts throughout this year and over the next few years.

We remain well positioned to achieve our goal of 12 or more marketed medicines in 2026, including potentially six or more wholly owned medicines.

And with that I will turn the call back over the breath to close this portion of the call.

Thank you Richard.

In the first quarter, we took important steps to maximize the value of our wholly owned pipeline, we continue to advance and expand our phase III pipeline with Aon is GTR L Rx and the <unk> advancing as planned.

<unk> through the initiation of pivotal the bus AOS and Alexander the disease.

We also delivered positive results of our islands PKK L Rx and the HPE and are planning to advance this medicine into the phase III study.

We have taken important steps to strengthen and streamline.

Through our acquisition of Ixia, and the restructuring of our Tech city in way liver operations.

We have accelerated our commercial strategy retained key commercial expertise and unlocked significant resources that we are reinvesting in our wholly owned pipeline.

All of <unk> and the Buildout of our commercial capabilities.

Importantly, we are financially strong and on track to achieve our 2021 financial guidance.

We are using our strength of a strong balance sheet to invest in our strategic priorities and execute on all of our calls.

I'm proud of the progress we've already made in these areas and we look forward to sharing more of this year as we advance our medicines and move closer to our goal of 12 or more marketed medicines in 2026.

And with that we'll now open it up for questions.

We will now begin the question and answer session to ask the question you May Press Star then one on your Touchtone phone.

The people using a speakerphone please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Our first question comes from the loop Lucchese with RBC.

Please go ahead.

All of a fantastic. Thanks, so much for taking my questions. Maybe two here of one maybe on the Huntington disease here for either Eric or Richard I think we saw the full data last week from Roche and it looks to me the at least the high dose may have unfortunately accelerated the disease given the the higher dose.

<unk> actually increased the trickle of volume over time versus the low dose and placebo wondering if you share the same view here and what are such data substantiate the hypothesis. The spirit of Wild type may matter here. So again the thought there would be helpful. In the second on <unk>. Congrats on the advantage of the program into phase three so again wondering if you could give us some color on.

Are you thinking about the phase III study design will it be placebo control when we need to run the head to head trial versus the ex Iroh are you exploring of monthly dosing of bi monthly dosing.

Any thoughts there would be great. Thanks, so much.

Hi, its Eric I guess I'll take the Huntington question, and then kick it over to Richard for.

Much more entertaining PKK the answer I hope.

On the Huntington Yeah of the data was at the CAH Gi and basically reinforce what the <unk> had and it was the same datasets that the drug wasn't working and providing a benefit.

It's true if you look at the absolute numbers that the the more frequent dosing was defending a little faster than placebo, but all of those of.

Curves, we're within the bounds of natural history as to what it means I think it's premature to tell Roche had some hypothesis that they discussed the all of which are valid and makes sense to investigate but I think we really need to unpack the data.

Their analyses and see what we can learn from the study.

We really do.

Don't know at this point.

So on the <unk> question, just a quick.

Quick upfront that we have some.

The regulatory meetings over the next couple of months and we will be bringing details of the phase III program later this year.

At this point.

We're moving forward with those regulatory and then into a phase III program.

Yes look let me just add to that a little bit so.

And I think it would be very helpful for our Nathan to provide some of her thoughts too on why we are so excited about the market opportunity for this drug because we really do think it's the has the potential to the the very best in class.

Certainly the of placebo controlled study I mean, that's what is expected in the phase III trial designed and there's precedent for that with tech zero and other other drugs as well and certainly.

The monthly dosing is what we're planning to do right now in the Phase II study, which offers a significant advantage we believe over therapies, which is.

Over to amazing.

Yeah, Yeah, I'd be happy to add some color over here you know I think going back to your question Luca.

Is it going to be placebo controlled or had had certainly a question for us as we went into the marketplace to kind of <unk>.

Just out of the profile of our PKK product and we looked at it versus current treatment options, including tendency of ROE and we really.

Got the feedback on based on the profile that we have on that this is a has the potential to be of best in class profile and really placebo control.

Study will be more than sufficient to really demonstrate that it can take a look at kind of the trifecta of efficacy data that we are able to deliver on the prevention of attacks on.

The fast onset of the box clinical efficacy.

And you know the reduction in kind of acute treatments that the trifecta of efficacy that's the theory mm mm.

Leasing and attractive for the HCP from in the marketplace too.

That along with the you know the more convenient administration.

Just a very highly valuable.

Compared to the profile. So we're feeling very great about what this is going to bring to the unmet need.

For hereditary angioedema.

Patients in prophylactic treatment.

Thanks, and then the guidance Richard standard.

As Richard said, we will provide the more details on the phase III design later this year.

Got it fantastic takes on my Super helpful. Thank you.

Thank you.

Our next question comes from Yaron Werber with Cowen. Please go ahead.

Alright, Thanks for taking my question I Hope all of a question specifically to start with on the acromegaly.

Sounds like the approval of cold correctly of the study was fully enrolled in December at the 12 week study of the pluses and open label extension of it.

Looks like you are planning on releasing the data in the second half of it says plus the Oh of Lee.

And the medical meetings that we should be aware of what this could be targeted or is this going to be in the press release.

And then any thoughts about what's the next steps with this program given what you know from the phase one day it already thank you.

Sure Yeah.

So.

We are.

Wrapping up the study now.

And we'll be going through the data and it's going to the analysis of that data will take us into second half of the year as I've mentioned.

And his.

And these statements earlier.

And then we're going to share of the data.

As soon as we can we'll probably will not wait for a medical meeting.

To share the results of that of study because we don't have one targeted right now.

Although we will look for such of such a place that we can share the data in detail.

But we'll figure out a way the summer to get the data out along with the open label extension data, which has accumulated more and more data which is of the rich data set that we didn't want to.

We side of that.

The view.

Remember that we also have the second study in progress for RG HR like of Medicine, and Acromegaly, which is in frontline monotherapy.

Phase two which is getting off the ground.

Now on getting started.

We're going to want to look at all of the data before we can make a decision on the next steps.

For either the patient population.

In the somatostatin treated patients that are poorly controlled versus monotherapy and then make decisions on what the next steps for the program would be.

Great and then also on any update on the potential phase one of these filing for Angelman syndrome. Thanks, so much.

Yeah, we're hoping you get of the clinical study started this year.

So you've definitely selected of construct of Youre planning on filing of 90, I mean of you've made the decision definitely to go forward.

Yes.

Thank you Greg accurately.

You got it thank you Yaron.

Yeah.

The next question comes from Yanan, Zhu with Wells Fargo. Please go ahead.

Hi, Thanks for taking my question I just have a first the question on the update from the Enoch of program I wanted to if you could share out of the more about of the findings from the toxicology studies long term Tox study and whether the toxicity of specific for the pulmonary.

Free route of fund administration, and whether it's related to the target or generally speaking that's the.

So our presence in the.

Thanks.

Sure Yeah on and so I want to just emphasize that the.

The clinical data for our <unk> in phase one two a day with very encouraging results. It has nothing to do of clinical data.

<unk> demonstrated target engagement in the phase one and good safety in in cystic fibrosis patients as well as in patients.

COPD in the cystic fibrosis data will be presented the ACS later this month.

We don't the preclinical finding was part of the long term toxicity of Richard stated in the statements.

It's going to take us time to figure out what that's about of and due to the delays that are just associated with that those types of investigations. We took a look at our emerging pipeline in pulmonary diseases, and we think we of better targets to invest and they don't have the will bring greater value.

On to the company and to the patients going forward and.

And we do not believe that this is read through to the platform for pulmonary disease at all it's of.

This is something that happens in preclinical Tox studies, sometimes and we're going to work through it.

Got it that's very helpful. And then a question on the TCR like of program.

Oh the island recently reported.

Chris ran a phase III study in.

M. A C T R a polyneuropathy.

Just wondering your take on.

On their data and of the three every three months.

Frequency of administration, and how you see.

On a product profile and whether there is the opportunity for the TCR My car T to petition against that profile.

Sure I can.

<unk> respect the question, but you're on it but it's not our position to comment on other People's data.

Okay.

We are very much.

We like our drug a lot.

And the phase III study in Polyneuropathy is enrolling very well and we're looking forward to the results of that study next year and the cardiomyopathy study.

Particularly on rolling very well and in addition.

And as.

We've done on quite a bit of market research on the frequency of administration and the value of that brings to the marketplace and I would love to have the needs of maybe.

Comment on that.

Yes, sure be happy to read them.

Think of your question with monthly versus quarterly you know in general I would say most of them kind of market condition, particularly from the patient perspective, as well as the as the HCP clinician perspective.

They're definitely you know some improvements in profile. When you go from a daily two of weekly you know and the weekly to of monthly, but after that I call. It. There's just a law of diminishing returns on more of extended frequency, particularly for us on Q.

And we've kind of found out here for T. T R. As well we've done some extensive market research to understand that dynamic a little bit more because it's really one.

Of our key products that we're bringing forward to commercialization.

And we're not seeing really a big difference between the monthly in the quarterly at all I think I think rightly. So physicians are more you know.

I'm excited about the profile of the product as well as you know the large clinical trial that we have on going in cardiomyopathy, and and really looking forward to seeing our data with them without standard of care I think that's gonna be the place of the differentiation here.

Got it. Thank you that's very helpful.

Good.

Yeah.

The next question comes from Yale Jen with Laidlaw and co. Please go ahead.

Hello, Good afternoon, good morning, and thanks for taking the questions.

We understood the kind.

Of the Huntington disease.

The trial and I believe you guys have a very great confidence on the.

The toughest in the ex.

Hey, Oh, Yeah. So would you mind just on maybe compare or contrast, a little bit between these two and besides the the different diseases and where your competence. The since the time from for the better of trials.

So all of all.

I'll open up and then.

Good question Yale.

Maybe Eric can expand so.

The confidence in our neurological disease platform, we think it's moving in the industry in many ways it's been Rosa.

And then the written until person coming right behind that and plus the AOS and a whole host of other drugs.

All of the drugs.

There are quite a number now not all had been presented yet all of the drugs that we took into clinical trials have shown target engagement and robust targeting engagement.

In our trials, we know we're hitting the root causes of diseases or the.

We're going after too.

The test our clinical of hypotheses in the San Juan AOS Stokers, and it's no different than that with some very nice production from San Juan and based on the phase II data.

That was published in the New England Journal of Medicine, and we've presented the presented.

Our confidence is high.

In two of person.

And our confidence in the Linzess, even greater confidence in.

For AOS in general.

Because you know do.

So for some of the successful and like I said, the preliminary non preliminary but the phase II data was very encouraging.

It bodes very well for the rest of our AOS franchise, which we have four drugs now in clinical trials two in phase III.

The other part of your question I think had more to do with.

Being able to target different regions of the brain how is the L S compared to the Huntington as compared to other drugs in our pipe and our pipeline for neurological diseases and there I'll ask.

Eric the jump into the weeds allude the deeper.

Yes sure.

Got it from Brett alluded to the great things person on the data packages that we have real evidenced.

Evidenced from the new in the journal paper for the improvement in disease, we didn't have that in the Huntington and while we havent target reduction.

And decided to look at it from the phase III as far as target ability.

We've talked about this at length before I think our our treasure trove of preclinical data has done a good job of teaching us where we can target and throughout the brain and we have a high level of confidence that we can target all the regions that are affected on AOS and we have a high level comments that we can target of <unk>.

Much of the brain regions that are affected in Huntington's disease, and Roche has talked about these extents.

Extensively at the medical meetings and presented a lot of the data.

It is true the regions like the car day are less susceptible but hello.

The case, it makes sense to us that we could target that region.

I have a very high level of confidence that the.

Especially on programs like the <unk> program and our map T program on others.

Our targeting of the whole brain and need to target the whole brand that we can engage those research.

And as a reminder.

As mentioned in Richard statements earlier of the map T. The town for the data.

We will be presented in July I believe.

The summer yes.

And I think that that will and even further confidence because of the Biogen has said the reductions in the tower have been substantial and durable.

Okay, Great. That's very helpful and maybe just the one more question here, what's the thought of that before were looking one.

In terms of the 8-K you guys.

I'm still sort of decided to move forward in phase III.

Let's just I still be.

Successful just curious whether this is the drug you got.

Want to particularly the launch of the by yourself or.

So the.

To be of partner doors at least at this early stage.

The thinking and the thanks.

It's a great question Yale.

It's one that we're working through right now.

We think this is of great drug really do and whether or not we will.

Keep this.

This ourselves.

We will provide an update that when we provide an update on the phase III design later this year, we're moving into the phase III study ourselves.

So just if you could just stay tuned on that.

You know right now on agencies conducting.

A lot of market research and competitive.

Net of profiling work to make the make the business case or not and if you just stay tuned we'll give you an update in a little while.

Okay, great. Thanks, a lot of end of again congrats for the quarter.

Thank you.

The next question comes from Paul Matisse with Stifel. Please go ahead.

Hey, this is Alex on for Paul Thanks for taking our questions I guess I have two the first one of the a clarification on <unk>.

It sounds like the preclinical tox.

With that it may be related to knocking down enact longterm do I have it right that you're no longer going to pursue any Enoch program either of this program are another follow on program in <unk> and then the.

Secondarily, just curious if you wanted to give any thoughts on business development with all of the cash you guys have now thanks.

So.

And earlier in the question that was posed.

We're still working through the data pre clinically we don't have.

Any evidence directly that this is related the neck and condition. Let me let me make this point is a very important point the.

The observations, we may have made pre clinically where not related to the same types of toxicities that were observed for small molecule systemically. The Friday night contributors were not seen of hyperkalemia or we're not seeing effects on the kidney and that sort of thing. So this is separate.

And again I think we'll work through it and we don't believe based on the data.

Data all of the data we have we don't think of that this is the read through to our pulmonary.

Our ability to go off the pulmonary diseases, but what it does represent is the delay and we have a lot of drugs coming with with other targets and although.

Although we're not slamming the door closed on the neck the future those targets will start approaching in catching up to the net.

Pretty quickly and we think that those are cigna.

Significantly better targets for pulmonary diseases and that's.

That was really the.

The that in totality was really the basis for why you discontinued <unk> net.

And really trying to focus in on the program to bring the greatest value and.

And I'll just leave it there.

Great and just sort of just to be clear, it's really more of a pause on the enact development rather than discontinuation.

Now we discontinued the neck.

This program.

In favor of.

Other programs.

Thank you.

The next question comes from Jason <unk> with Bank of America. Please go ahead.

Hey, guys. Thanks.

Thanks for taking my questions just one quick follow up on PKK, and then and.

And then the ADT question just the on PKK. So it sounds like you view kind of of diminishing return on dose convenience beyond the month, but that's the pertains to every two weeks versus the monthly that I guess, you would say that's a key point of differentiation as you think about characterizing the potential.

Best in class profile, because it looks like dosing convenience of sort of the main feature of that you'll be able to hang your hat on relative to the Takeda prophylactic agents and then.

Ahead of ACC, just wanted to probe a little bit.

Of what we're hearing from physicians in terms of what they want to learn about the profile of this drug and its you know how does it pertain to the consistency and durability of the impact on blood pressure you know one thing.

We're hearing of definition I, just want to make sure there aren't dramatic spikes in blood pressure on a week over week basis. So curious if you could set the table and we'll.

We will get any data data that might help us understand a little bit about that attribute of your ASO there. Thanks.

Good questions of the attributes of our PKK like are certainly key aspect of the attribute is the dosing.

On the frequency, but it goes beyond that and again I'll ask on Asia to expand.

The app to sue them.

Yeah, I think you're right I think the the important thing here and and I talk about the use of each medicines.

Pause in the market that they're entering hospice you know you have to take to look at.

Dosing and convenience in there and for the a T market as the.

You know with the with Tech zero. It's a you know high volume of injection every two weeks and you know most of the the market research and the physician said you know as as always the efficacy is only as good as its compliance. So we do believe that that will be a big player.

But we do think that is not the main thing we're going to hang our hat on as you saw but I think it goes back to what's really important for these patients and prophylactic treatment. It goes to again prevention of attacks. The number of the zero attack rates that you get and the ability of a product.

To deliver on that.

That with the faster onset of reaching Max clinical efficacy and in the third prong of our of a kind of an order of efficacy parameters is just the ability to reduce the number of the cute.

The medications that they take so when you think about it really it's just all three parts of the efficacy of paradigm that we're just waiting on along with the convenience that again.

Half of patients take this on the regular basis, the complaint and deliver on the efficacy.

Yeah, that's great and I think just to add to that the phase II study hit.

You hit the nail on the head on all three of those.

And we're and we've got all of those patients also rolling out rolled over into an open label extension and looking very carefully at long term.

The lack of a breakthrough in the that's also a very important component.

Right.

And then the.

On the ADT.

The good to talk over the balance to be presented the ace the ace.

But also.

The phase <unk> study on what we're hoping to get out of that yeah, I mean, you'll be able to actually go to the publication right now it's available in the <unk>.

I believe it's posted.

On the journal of American College of Cardiology and then.

The other piece to that.

Is the presentation net will be giving and there have been no either hypotension or hyper tension on recovery.

Events and absolutely that's an extremely important piece to the puzzle.

So the data is showing that that is a very clean profile and we've moved into a phase <unk> study that will further.

Elaborate on those those issues on the phase <unk> study is really powered to nail down the.

The magnitude of blood pressure.

Control, we expect to achieve in the phase III studies of its significantly larger studies of longer study.

Yeah.

Those per of Phase III study and to really rule out any of those of the concerns hopefully that physicians of raise you'd mentioned spikes in blood pressure hypotension and so forth. So.

That's the intent of the phase <unk> study, but first certainly the the publication and the ACC presentation.

The support the safety and the <unk>.

Fricassee of this mechanism in the stroke.

Got it thank you.

Good morning.

The next question comes from Jessica Fye with Jpmorgan. Please go ahead.

Hey, guys. Good afternoon. Thanks, so much for taking our questions.

On to belabor that sort of just following up on the prior questions on enact it.

It's the Tox he didn't notice is not related.

Related to the platform of our exposure in the long and it's not related to the target.

On what what's your current thinking about what it might be related to.

Well, we don't know Jeff that's the thing you have to work through.

Spurious.

Tox, finding sometimes happen long term Tox studies.

And you know it could be a sequence related effect of that particular molecule can be something like that but we really have to work through it the confidence comes from other experience without the other drugs.

Yeah.

Further.

The clinical experience I mean, the clinical experience was absolutely clean.

And we were into a longer term treatment in the clinic.

No.

Timelines can get significantly impacted by a preclinical finding and this was just one of those.

And we want to make sure that we're focused we're early in development and and we've got the Salt Lake and almost a.

The riches or beyond.

What we should be looking at and we have so many targets and some of these targets are really impactful in particularly COPD.

And some of these other very <unk>.

The interesting and areas that we want to focus on.

So we took the step back and we're looking very carefully at this and focusing on.

What we do in the midterm.

At the same time, we've got this incredibly rich phase III going on.

With with all of the products that have now moved into late stage development and we just want to make sure that we're not.

Diluting our efforts and we're focused.

Got it makes sense if I can.

Working two other questions just on the Alexander disease program can you talk about some of the efficacy measures do you have for eye on 373 of that give you the confidence to advance that until the pivotal study and the size of that opportunity and just how all of you think the product might be able to address the market.

Sure.

We haven't disclosed the the.

Full probe protocols are the.

<unk> for the the phase III program.

We're very confident that.

We can engage this disease being the known genetic cause of the disease. It's a toxic gain of function of the protein called G. F N P and Thats what were lower at and our preclinical work on this has been published and it's really remarkable improvements in what I think of pretty good preclinical models of disease. So.

Alright, thank you.

Based on the preclinical data on the known.

Pathophysiology of the disease I think we have a very high level of confidence.

We're in the right spots of us.

And do you have anything you can share on prevalence.

Yeah, we're looking at about.

400 patients globally from our pipeline.

Top line perspective, and again is as Eric said this would be the first and only therapy for Alexander's disease and I.

I think the preclinical data on the models that we have suggest that we're going to normalize the production of axis true fab and and you know improve of gross motor function reduction of significant symptoms of these patients are appealing both on the cognitive side and some of the Gi side didn't really prevent disease progression.

And on EBITDA and also be helpful. If we talked a little bit of Bell. If you don't mind jazzed about our rare disease neurological volume pipeline.

More broadly and then about how G fast and first in all of the synergize together as a franchise that we're planning to bring from the market Yeah, No absolutely really good point.

You know when we think about these when we see and prevalence.

Prevalence for an individual disease and condition, we are really looking about how we scale of these collectively together to get the significant commercial synergies that will be really important in the marketplace and we have them with great products Alexandria as being one of them, but we also have.

Yeah, just one portal of four disease and and you know later on where we're looking at them I don't know from dish.

Close the one other but we have won more than they did just a servicing kind of the severe pediatric diseases associated with epilepsy in the marketplace that have really come together as a whole and then when we add in you know fuston allies, even though you wouldn't think there there may be as many synergies there was actually a pretty high overlap on the physician towards trade.

On that as well so he comes together very very nicely for us with the portfolio in urology.

Got it and maybe just a last question and going back on the comment about reaching the peak royalty tier four spin of ahs that around mid year similar to last year.

Can you just unpack that a little on some of the assumptions underlying that in light of the competition Youre seeing in the U S from FERC.

Hi.

I think.

And as you can see when you look at the effective royalty rate on a quarterly basis over the past years, we get to our maximum royalty rate them very quickly. The tiers on there are four tiers and the very quickly.

And therefore, you know our sense is.

That's been right the you know.

We will continue to perform as it has.

The recently and therefore, we would get.

Into the into the highest tier.

On the similar path of similar timeframe that we have in the past the in the past few years.

And you know that that gets us up into that 15% very quickly.

Got it thank you.

Thanks Jay.

Yeah.

The next question comes from Manny for Peru, Haar with SVP Leerink. Please go ahead.

Hey, guys. Thanks for taking the question.

Hate to beat the dead horse, but I'm going to beat a dead horse a little bit.

So.

If you given that you were you on eniac.

In some ways in the lead of the closest competitive competitor in terms of the maturity of data is the.

The is the right interpretation of what you're saying that the going back and redesigning on moving forward with the different construct would've been required would've been requisite the felt comfortable getting around the preclinical box is that the right. What are the interpret what you said I don't know of another.

Did it get adopted the homes question.

We don't have an answer to the first question because we're still going through the data.

I'm trying to figure out.

What the next with the best path forward is.

So that might require a different from where it might not.

But.

We think we have we think that there are better targets out there that we're working on to bring great talent.

On the capital.

The only of sodium channel that was that was our lead drug <unk>.

That was furthest along but we have other.

Others that we think will be more provide even greater benefit too.

The broader and disease in the case that inaccurate.

Okay that makes a lot of sense and then on <unk>, obviously, you have a really exciting dataset.

Optically superior to what's on the label for any of the approved therapies, Although obviously cross trial comparisons of <unk>.

By nature.

But when you think about commercialization.

I was on the quality of therapies available of husband had improved from the time of reconnects kind of the lead asset.

How do you think about openness and willingness to switch it on commercialization would you see this primarily of a switch market versus the other the existing prophylactic therapies.

Do you see chapter in newly diagnosed patients of the lowest hanging fruit on.

Like how do you from a commercialization strategy presuming you continue to have what appears to be of best in class on Bakken production profile.

On Asia, Yeah, I'm happy to take that one really great question here. So.

So I think that when you're on prophylactic treatments.

We think about entering the market over here.

It's clearly per new patients this is the.

On the best choice rates for new patients.

We've kind of tested this we have the best in class profile, that's where it kind of go for patients who are already on therapy. I think you know they're in will be how do we get you know switches in the marketplace. So we're really thinking of this in and of variety of different ways.

Are there you know kind of breakthrough attacks happening there definitely would be a sense of patients. There are patients who are not compliant on the full set.

Net of therapist sit there on the so there is an opportunity there and then I do believe that we're looking at you know, particularly of switch design the.

Phase III as well, although it's not confirmed we are definitely evaluating whether that will be actually a nice added benefit to our design as well.

Right that makes sense the stomach the estimate.

Do we do we have a sense of where what proportion of patients you think on.

Modern it on the most modern of prophylactic therapy of Pixar et cetera on what proportion of them.

Based on your cable conversations interactions clinicians clinical trial experience, what proportion of those patients see meaningful enough breakthroughs.

The fall into that that early share of switch early adopter of population for you guys just.

Just ballpark I know, it's I know, we're far from being a commercial lots of it quite yet.

Yeah hard to give you percentages over here.

On that it's a really good question I think we're gonna do some claims database analysis into the retrospective love to get a better from better sense of that so it's definitely on our list to help evaluate but you haven't given you know again the the most.

I think profound part of the research and insightful for us was that.

The compliance piece right and given texture of is at two weeks and four weeks. You know there are a lot of patients who are actually you know trying to stretch this out over the four weeks just because it's a very high volume of administration, so reducing a lot of people who are not compliant and as a result of them have breakthrough attacks as the quantify that I think it's going.

Take a little bit more work on our part of the Frank will give you a better sense of where it about it.

No that makes a lot of sense, thanks and I'm on.

I'm going to hop back on the cube that all got a lot of them from the weighted.

Okay well.

But maybe maybe Betsy we'll take one more and then we'll have to close it out.

The next question comes from Myles Minter from William Blair.

Please go ahead of all hi, Thanks. Thanks for squeezing me in just a question on barge and sort of pushing for a higher dose for the St on off program.

I'm just wondering whether that's got any read through to the viola and whether there's any burn two might be pushed the dice afterwards kind of in the spin boss of the block scenario and so the fuss programs and the <unk> tax and programs of the earliest stage of the likely that we'll say of pushing the dosing and that the early clinical studies.

So the the.

Trained read is that the.

Is that the drug is very well tolerated, so and and and Biogen is very committed to Allison in particular is the nine analysts as more of a side one of ours.

And so before moving into phase III, you want to make sure you get the dose right. So they were.

They wanted to get more data and examine a higher dose.

So I don't really think the read through of anything more on that when you hear.

It's really that the drug is very well tolerated in the amount of get more experience before taking the plunge for phase III and I didn't quite get your first AOS question. We have selected the dose we have a single dose level for phase III that we're evaluating the program.

So we're not planning to look at multiple doses in the first day O S. We think we have the right dose and.

On the head, we don't plan to escalate the dose or the earthquake.

Okay.

Yeah, I guess that was that most of my question just like why the St on on both programs specifically the the testing of high of doses on either not involved in the fast program, but from the I tax of program on why wouldn't you just got with the highest dose here is the risk of Arbor shooting the knockdown of <unk> pricing.

No there's no risk of on target.

Toxicity over overdosing or anything like that each drug is different so miles per C&I.

We do have an on the Lille selective drug it only because of the the nuances of the way the transcripts of processed our drug only lowers the pathogenic expanded C&I of 72. So we don't we don't look for the the non pathogenic C&I norm.

Mhm.

That's the cool thanks for the questions.

Thanks miles.

And with that I'd like to thank everybody, who joined us on our call today, it's been the.

Highly eventful start to the year and we look forward of more you'd rather of the remainder of the year on sharing of those results with you.

So with that thank you and have a great day.

The conference has now concluded by.

Thank you for attending today's presentation you may now disconnect.

Yeah.