Q4 2022 Ionis Pharmaceuticals Inc Earnings Call
With that I'll turn the call over to Brett.
Thanks, Wayne Good morning, everybody and thanks for joining us today.
As we began this year we are building on the significant momentum from the key successes, we achieved in 2022.
Highlighted by our progress in advancing our three near term commercial opportunities towards the market.
Yeah.
With <unk>, we delivered positive data from the 35 week interim analysis, which form the basis for our NDA submission in December .
With <unk>, we completed enrollment in the phase III balanced study for FCS putting us on track for data in the second half of this year.
The FDA recently granted fast track designation for <unk> for FCS underscoring the significant unmet medical need for these patients.
We also advanced and expanded our clinical program supporting <unk> for the broader S. H T G indication.
And with Don and the Lorson, we delivered multiple positive data readouts all further strengthening our belief in this medicines potential best in class profile for the prophylactic treatment of HAE.
And we're pleased to report that the phase III study of <unk> continues to progress well keeping us on track to complete enrollment this year.
We've also made excellent progress in building our commercial organization as a result, we are well positioned to successfully launch these medicines beginning with co commercializing upon person with Astrazeneca.
We're also on track for our first independent and launches of <unk> and <unk>.
Beyond our three near term commercial opportunities our partner pipeline also continues to make great progress.
<unk>, which is partnered with Biogen is under review in the U S and EU positioning it to be added to our commercial portfolio. This year.
And our rich late stage pipeline recently grew this year when GSK initiated phase III development for <unk> and for HBV.
Further we expect our late stage pipeline to grow even more later this year when Roche advances Iowa's FBL Rx into phase II development in patients with Iga nephropathy.
Indeed, our strong pipeline progress sets us up very well to deliver a steady cadence of new products to the market for many years to come.
We also took important steps last year to broaden and diversify our technology, including advancing programs utilizing muscle Leica and programs utilizing novel MSP a backbone chemistry.
Furthermore, Biogen recently initiated an SMA follow on phase <unk> study that utilizes advanced Iowa's chemistry, potentially enabling long interval dosing.
And we entered into a collaboration with meta genomics and industry leader in next generation gene editing.
By adding gene editing capabilities to complement our existing platform, we expect to tackle more diseases reach more patients and further strengthen our leader leading position in genetic medicine.
Importantly, we further strengthened our financial foundation recently to support our future cash needs.
The capital we raised from the royalty monetization and sale leaseback transactions will directly support the investments, we're making in advancing our late stage programs in building our commercial organization ahead of our planned upcoming launches.
With that I'll turn the call over to Eugene to discuss our recent pipeline progress and preview our upcoming key events.
Next and Asia will provide an update on our commercialization efforts and then Beth will review, our 2022 financial results as well as review, our 2023 financial guidance and after Beth I'll wrap up our prepared remarks before taking your questions. So now over to Eugene.
Thank you Brett.
Our pipeline continues to perform very well.
Last year was highlighted by many positive data Readouts and we expect the same to continue this year.
Over the next few minutes I will review, our recent achievements and preview our key upcoming data and regulatory events.
The recent NDA submission for <unk> was based on positive data from the phase III interim analysis for.
We're planning to share 35, and <unk> 66 week data in the first half of this year.
Importantly, we're also looking forward to the potential approval of up on tourism in the U S for <unk> Polyneuropathy late this year.
We and Astrazeneca are also planning to file additional regulatory submissions outside of the U S. Later this year.
We're also pleased for the continued progress of cardio transform study.
By conducting the most comprehensive study in patients with <unk> cardiomyopathy to date.
We expect to deliver a rich dataset for this broad patient population.
We believe these data will be a key differentiator positioning us to successfully compete and lead in this growing dynamic and global market.
We expect to complete enrollment this year keeping us on track for data in the first half of 2025.
Our broad <unk> development program targeting two different but related indications.
It is also progressing very nicely.
Both Fcs and <unk> patients have severely elevated triglycerides, which can lead to fatal pancreatitis and atherosclerosis.
Phase III balance FCS study is fully enrolled and we expect it to readout in the second half of this year.
And our broad phase III program designed to support the <unk> indication is also continuing to progress well with data expected next year.
With first mover advantage in both indications we remain confident in the potential for <unk> to be a substantial driver of future growth for Iona.
Dani Tillerson Oasis phase III program in patients with hereditary angioedema remains on track for full enrollment this year with data to follow next year.
We've continued the steady cadence of positive data from the phase II program with new positive long term data.
The demonstrated rapid reductions in <unk> attacks that were sustained in patients treated for at least one year with an overall sustained mean reduction in attack rates of 95% from baseline.
Importantly, more than 85% of patients in the open label extension reported a clinically meaningful improvement in their angioedema quality of life scores with improvements observed in all domains.
Additionally, 75% of patients who transitioned to bi monthly dosing remained attack free.
Demonstrating the potential for dosing flexibility.
Over this extended time period, we also continue to observe a favorable safety and Tolerability profile.
We believe that these data reinforce the potential for Dani Dolores and to be best in class prophylactic treatment.
<unk>.
The rest of our rich late stage pipeline is also advancing including our partner drugs.
So person or medicine partnered with Biogen for patients with <unk> ALS is under a regulatory review in the U S and in the EU.
The Advisory Committee will meet in March to review the data supporting <unk> NDA.
If approved <unk> will be the first approved disease modifying medicine for the treatment of a genetic form of ALS and our next commercial medicine.
Novartis also continues to advance LTA horizon study, keeping pellet Carson on track for data and potential regulatory filing in 2025 with.
With more than 8 million people estimated oral Dwight.
Have elevated LTA and cardiovascular disease, Hello, Carson represents a multibillion dollar opportunity.
And recently, our late stage pipeline expanded one GSK announced the start of a broad phase III program for <unk>.
Based on the phase II data reported last year.
<unk> has the potential to provide a first in class functional cure for people living with chronic hepatitis b.
Worldwide 300 million people have HBV with approximately 900000 dying annually.
Gsk's aim is for better reversion to become a foundation for future HPV therapy.
Furthermore, our late stage pipeline is poised to further expand on Roche initiated their planned phase III study for <unk> <unk> L. Rx in patients with Iga nephropathy.
As I just previewed we expect that 2023 will be a highly productive year led by important regulatory milestones and late stage pipeline progress.
Given the richness of our pipeline towards potential for even more important events.
We look forward to updating you on our progress throughout the year.
With that I will turn the call over to in Asia.
Thank you Jean <unk>.
<unk> made tremendous progress in building, our commercial organization hiring top talent and integrating commercialization processes into the fabric of Ireland.
Today, we are finalizing preparations for each of our near term product starting first with our launch of ethylene testing.
And we are right, where we shouldn't be in preparing for our first independent launches of <unk> and down until ourselves.
One of my first priority that I honestly building, a strong global product strategy and portfolio planning team.
In 2020, it team has integrated new product planning global market access and health economics and outcomes research into ion is R&D operations.
Together with R&D. This team is helping to drive pipeline prioritization indication strategy.
Development and commercial planning and other key strategic decisions.
My next priority was to add medical affairs to our organization.
This team is focused on data dissemination disease education.
I'll ask collecting and integrating customer insights into our product plans.
And for the last two years, our field medical team has been engaging with thought leaders and educating HCP on ATR elevated triglyceride diseases, and more recently hereditary and J D.
Last year, we began building the inline commercial team to prepare for the launch of that contract.
And turning to Boston.
These teams include market access and reimbursement inline marketing commercial operations patient services and Omnichannel engagement.
And as our launch Windows approach, we plan to add our customer facing teams.
Now I'd like to spend a few minutes on each product starting first with <unk>.
Currently there are an estimated 40000 addressable patients with <unk> polyneuropathy worldwide.
However, less than 20% of those patients are currently receiving approved treatments.
With our deep expertise and <unk> together with Astrazeneca has global scale, we are confident in our ability to capture a significant portion of these patients around the world.
Today, we already have the majority of the infrastructure for the U S launch in place and this year, we plan to complete our build out for Atlanta, Austin, including fully staffing our nurse educators.
We expect <unk> to be our first independent launch.
With <unk>, we have first mover advantage for both FCS and SHT Chi indication.
And fast track designation for Fcs.
We plan to enter the market for the rare indication and then expand into the broader indication, which provides us with significant revenue potential.
We are leveraging our <unk> capabilities and customizing them for the SCS market.
As we approach our launch of <unk> for <unk> patients. We plan to further scale these capabilities to realize the full potential of the product.
We expect <unk> to be our second independent launch.
In the U S. The prophylactic HAE market has a concentrated prescriber base with the <unk>.
<unk> number of allergists prescribing the majority of ETE products today.
With an efficient and growing market for prophylactic treatment our expertise in rare diseases.
And a potentially best in class profile, we continue to see <unk> as a very attractive opportunity for us.
As with <unk>, we are leveraging our existing capabilities and customizing the specifically for the HDD market.
It's an exciting time at <unk>, we are building upon our excellence in our research and development with our medical affairs and commercial teams to successfully deliver our medicines to the market.
Now I will turn the call over to Matt.
Thank you Nathan this.
This morning, I'll provide a summary of our fourth quarter and full year results for 2022, and then review our 2023 guidance.
I am pleased to report that we earned revenues of $152 million and $587 million for the fourth quarter and full year respectively.
We earned revenue from numerous diverse sources with just over half from our commercial products.
The quarter and full year reflect our continued investment in advancing our commercial readiness activity and our pipeline, especially our late stage programs.
And our 2022 non-GAAP net loss was $311 million.
Additionally, we ended the year with cash and investments of $2 billion, which we further added to in January with the $500 million, we received from our royalty monetization transaction.
This also performed well in 2022, demonstrating its resilience and long term growth opportunity both in the United States and internationally.
<unk> global sales increased 6% in the fourth quarter compared to the third quarter.
And also increased 4% compared to the fourth quarter of 2021.
The increases were driven by stabilization in the U S and growth in Asian markets, partially offset by competition in Europe .
Importantly, U S. <unk> sales increased in the fourth quarter and the full year.
Compared to the same periods in 2021.
This positive trend was particularly meaningful, especially when considering competitor results.
<unk> is continuing to expand into new markets and is also concentrating on expanding in existing markets.
Within existing markets Biogen is particularly focused on the growing adult SMA population, which has limited treatment option.
Additionally, <unk> continues to generate important efficacy data as part of its robust lifecycle management program.
Based on these efforts and spin around the strong efficacy and safety profile, we and Biogen believes can rosset can return to growth.
We earned R&D revenue of $72 million in the fourth quarter and $284 million for the year for advancing numerous programs partnered with Biogen Astrazeneca and Roche among others.
Our ability to generate revenue from numerous diverse sources remains a key element of our financial strength.
Our non-GAAP operating expenses increased in the fourth quarter and full year compared to 2021 as expected.
The increase was driven primarily by higher development fee.
<unk> and medical affairs expenses to support our three near term commercial opportunities.
Our R&D expenses also included the upfront payment under our <unk> genomic gene editing collaboration.
And as the needs of discussed we have taken important steps to build our commercial capabilities to be ready for our planned launches.
As a result, our SG&A expenses increased in the third and fourth quarters compared to the same periods in 2021.
Importantly, we bolstered our balance sheet by adding more than $700 million in cash from our recent royalty monetization and sale leaseback transactions.
As a result of these transactions our cash in January was approximately $2 5 billion.
Looking at our plans for this year, we're projecting to earn more than $575 million in revenue.
A substantial base of commercial revenue with spin rozzer royalties as the cornerstone and.
And given the recent stabilization of spin rather product sales. We anticipate this will continue in 2023.
Additionally, assuming <unk> is approved we would add <unk> and royalties to our commercial revenue this year.
We also anticipate having a substantial base of R&D revenue from our partnerships, we will that will contribute to our 2023 total revenue.
One of the most significant elements of our R&D revenue. This year will come from Astrazeneca for a 55% share of the global phase III development costs for <unk>.
Additionally, with a rich pipeline and many advancing programs, we have the potential to earn numerous milestone payments.
As we've always done our R&D revenue is probably <unk>.
Primarily on the anticipated timing of the many different milestone payments, we expect to earn as we advance partner programs.
This year, we have already earned a $15 million milestone payments when GSK initiated the phase III program for <unk> in person.
And with many important regulatory events. This year, we are eligible to earn milestones for tougher since approval in the U S and EU as well as the sizable upon test and U S approval milestone in late 2023.
We're projecting operating expenses in the range of $970 million to $995 million on a non-GAAP basis.
As you would expect our advancing late stage pipeline is the most significant driver of our operating expense projections.
We are conducting six phase III studies for for medicine, nearly all of which are either fully enrolled to date are expected to reach full enrollment this year.
As a result, the bulk of our phase III studies are at or nearing their most capital intensive stage.
Additionally, as our various launch windows approach for Avalon person, all those arson and Denis to loosen.
The investments we make in our commercial preparations will continue to increase.
We expect our non-GAAP R&D expenses to increase approximately 20% to 25% this year compared to last year.
Excluding the upfront payment under our <unk> genomic collaboration.
And we expect our non-GAAP SG&A expenses to increase approximately 25% to 30% year over year.
Our 2023 operating expense guidance underscores our commitment to these near term value driving investment.
Our revenue and expense guidance translates to a non-GAAP operating loss of less than $425 million and a year end cash balance of approximately $2 billion.
Our 2023 guidance reflects the confidence we have in our ability to continue generating significant revenue globally.
While retaining our most valuable assets to drive growth.
As we look beyond this year, we anticipate the completion of multiple phase III studies and.
In preparation for multiple commercial launches.
For the next several years, we expect to be in a period of increasing investment.
This is one of the most important reasons why we substantially bolstered our balance sheet with our recent financial transactions the.
The capital we raised from the royalty monetization and sale leaseback transactions.
Will directly support the investments we are making in advancing our late stage programs and building our commercial organization ahead of our planned upcoming launches.
Importantly, we anticipate our strong financial foundation combined with our accelerating investments.
Will enable us to bring a steady stream of products to the market and in doing so we expect to drive greater value for Iona and our shareholders.
That I will turn the call back over to Brad.
Thank you Beth looking ahead, we expect the strong momentum at ion is to continue with several key regulatory and late stage events coming up this year.
We're excited about the work already underway and the progress we've made to advance our following key priorities.
We are well positioned to deliver an abundance of new genetic medicines to the market with the potential to add two new products to our commercial portfolio. This year.
With a steady cadence of additional products to come in the near and the longer term.
Our integrated commercial organization is on track to successfully co commercialize upon persons and independent we launch <unk> and <unk>.
Leveraging our recent technological advancements for medicines in development today. Additionally, our collaboration with meta genomics positions us to expand our technological capabilities for future drugs as well.
Finally, we substantially strengthened our financial foundation to support our pipeline and commercial plans all of which we believe will drive increasing value.
We're looking forward to a great year at Aon and sharing our progress along the way.
We're closing I want to mention rare disease day, which is Tuesday February 28, a day, where we recognize all the patients and families living in struggling with rare diseases.
Yes.
I'll open the call up for questions operator.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been actress and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
The first question comes from Yanan, Zhu with Wells Fargo Securities. Please go ahead.
Hi, Thanks for taking our questions and congrats on the progress.
We have mainly a couple of two questions for the Ctr program first.
The NDA for Epsilon Interestingly in Polyneuropathy I think he has submitted the NDA.
NDA in December just curious how is that process going with FDA.
And when can we expect the announcement.
NDA acceptance.
If you plan to announce that and are you expecting a priority review or at committing associated with the NDA acceptance. Thanks.
Thanks Shannon.
So we're very much looking forward to.
The completion of the NDA process with the FDA as you said, we submitted the NDA in December we have now.
Third the.
The standard 60 day review period with the FDA and we're just waiting on the official notification from the FDA. The day 74 letter if you will.
In that letter details will be provided.
<unk> date for example.
Whether there'll be a standard or an accelerated review we expect to your question a standard review for <unk> Polyneuropathy.
And whether or not they would want an AD com, we don't expected outcome.
The process has gone very smoothly with.
The FDA has been no no concerns whatsoever. So it's really just we're waiting for the final notification.
Actual notification from the FDA and we will announce that with all the details that we get in that notification at that time, so that'll be coming up pretty soon.
That's great to hear.
I may ask a question also on Epsilon.
But on the cardio cardio transform study I used to do you still expect to complete the enrollment.
The study in the first half and.
I think following the modification of the study size and enrollment strategy are you getting the desired result in terms of the balance of various patient subtypes and how how does the.
Oh Wow.
What's your expected rate of Alt, a <unk> naive patients.
From this enrollment strategy and how does the cardiovascular event rate trend.
On a blended basis of course thanks.
Thanks again.
We're expecting to complete enrollment around mid year. This year enrollment is going very well.
As you know we upside this study two insurer for the most robust and successful outcome in the outcome trial possible.
And we Upsized the study to achieve three objectives. The first objective was to ensure that we have.
Strong powering for the study to have the successful study and our most robust outcome. In this study based on the fact that patients with <unk> cardiomyopathy are being diagnosed much earlier in their disease.
And therefore patients are generally more mild when they are diagnosed with the disease.
<unk> was to ensure that we have a good balance of relatively equal balance between naive patients into famine as patients and thirdly to help ensure that we have the preferred percentage of patients that are hereditary hereditary <unk> amyloidosis with cardiomyopathy and I'm very pleased to say that not only are we on track to complete enrollment.
Moment as planned around midyear this year that we're achieving so far all of our objectives.
<unk>.
Significant uptick in blinded event rates in the study as we expected when we upsize the study.
We are seeing.
A really nice balancing of buy versus the famous usage in the study as we had planned to have.
And we're also seeing a very nice uptick in the percentage of patients with.
Hereditary <unk> amyloidosis with cardiomyopathy, so everything is progressing very well in the study and we're very much looking forward to the data readout on track in 2025.
Got it thanks, Brett for the color.
Thank you.
The next question comes from Luca <unk> with RBC. Please go ahead.
Oh, great. Thanks, so much for taking my question Congrats on the progress I have three quick one maybe the first one <unk> myopathy wondering if you can comment on your reaction yesterday from the news that <unk> will have an advisory committee meeting and how youre thinking about implications for your program.
One is the ADT, what's the latest on that molecule are you still planning to invest in both the first Gen and second Gen or at some point you got to pivot to the second Gen and maybe more broadly whats the latest on BD for ADT and maybe a last one on <unk> I think that American College last year three of the.
Eight patients that were dosed every eight weeks sorry.
Sorry every two months to a W. Switch back to monthly however, I think in the abstract at Quad AI. It's two out of the eight directors switchback. The monthly from three to eight two to eight so I'm wondering what happened there. Thanks so much.
Sure Luca.
So.
I prefer not to comment.
Yeah.
Significantly on competitive products in outcomes by the FDA.
What I can say is that.
In hindsight not terribly surprised the results were a little complicated six minute walk test the magnitude of benefit.
Yes.
The benefit in patients on prepayments versus naive patients is pretty complicated so not terribly surprised that the FDA is going to want to get input.
Publicly from experts in the field.
We welcome because it gives us more information we have very strong relationships with.
All the key Kols and investigators around the world for this disease, but it's we're always welcome to hear more.
I think it can help us set us up for an even better more successful cardio myopathy.
The outcomes trial.
Regarding IGT, we are still planning to present data.
The two molecules in the second half of this year the hypertension study is.
Wrapping up.
And we're planning to start a cardio heart failure study for the second molecule. The Gen. Two five molecule.
In the second half of this year, we won't wait for that study, we will share the data from the two molecules in hypertension.
So the first molecule in heart failure.
By the end of the year and as far as business development activities.
Kind of on pause because we want to generate all the data.
So those three studies.
Before we start responding to inbound and there has been certainly interest in the program.
Regarding the.
Correct number of patients there.
Were attack free in the bi monthly remained is correct in the Quad AI presentation six of eight patients.
The previous.
Data that was presented last year was five of eight patients that was really just a timing effect and when you make the cutoff one year treatment six of eight patients were attack free into bi monthly.
Whereas.
The timing for that included a $5 eight patients that was presented last year was just.
Beyond one year.
So it was just a technical thing if anything it favors.
The efficacy by monthly for predominant Larson with that said, it's really the monthly dosing that we really are very excited about by month. It gives you an option for dosing, but monthly dosing really is one of several key advantages for Donald doors versus competition.
<unk> monthly self administration excellent tolerability fast onset of action.
And the unprecedented efficacy with 95% mean reductions in hte attacks for now for a year of treatment.
Got it thanks, so much.
The next question comes from Gary Nachman with BMO capital markets. Please go ahead.
Hi, guys.
First a few more on Epsilon Trust.
No.
What do you plan to do with the 66 week data when Thats available click about the timing of filings ex U S and does that impact the <unk>.
<unk> filing in the U S at all or is that completely separate.
And then if you had looked to do for late this year for Pn, how soon would you be able to launch the product.
And then on cardiomyopathy, what's the likelihood that you might have early readouts for that data and then I have a follow up for Beth.
Okay.
So.
Maybe I'll ask needs.
Touch on two of your other questions to talk a little bit about launch planning for <unk> in Pn.
The week 66 data, we're planning to present in the first half of this year at a medical meeting partial put out top line results ahead of that as soon as we have it.
We're very much looking looking forward to that.
That data.
We will be very important for ex U S filings for potential approval for <unk> and that is the plan is to file I have additional filings for approvals outside the U S.
<unk>.
We used 66 data is a key component of that of those filings.
We don't see any meaningful impact of the week 66 data.
For the M.
NDA that is currently under review by the FDA based on the week 35 data.
We don't plan on submitting a supplemental NDA with that data at this time.
The data that <unk> 35 data, we believe is very more than sufficient to get.
The outcome that we desire by the FDA for <unk> Polyneuropathy doesn't rule out the possibility of a future supplemental NDA after approval.
That will be data driven.
Regarding the cardiomyopathy early readout.
We will continue to monitor.
Any changes in the landscape the competitive landscape that could influence the decision by ion is astrazeneca to read the study out earlier. We're also will be focused on blinded event rates and patient demographics that will all of that will be driven will be factored in to a decision to potentially.
We read the study out early.
We do have several we have the option to read the stay out early.
Based on our review of all of that.
In Asia, maybe you could talk a little bit about the late year Purdue date that we're anticipating in our plans for launching at one person.
Yes, Hi, Gary we are preparing for success for the Pn launch. So there are a lot of pre commercial investments that are already being made.
For the U S. We have.
As you know our field medical team that's been in place for over two years.
Really ensuring that there is enough.
These education out there over the last two years, we plan and have already actually hired out R. R.
Field directors for the nurse educator team and then as we.
We look to the second half of the year and we hear back on.
The 74 day filing Astra will start Dana on building out the sales capabilities. So basically we are going to be very ready to go upon approval and not have a lot of time between approval and launch.
Okay, Great very helpful and then for Beth just the greater than $575 million revenue guidance.
You talked about some of the key factors Directionally.
The overall mix and quarterly cadence be similar to 2022.
How will you be reporting the royalty pharma agreement how is that factored in the guidance.
And then can you still hit the guidance is still for us.
Epsilon Charleston are delayed into next year at all.
Great question so.
So first in terms of the mix and the cadence on accordingly from a quarterly basis I would say anticipate that 2023 will look very similar to 2022.
And to anticipate the mix of.
Our commercial and R&D revenue to be very similar.
Expect that it'll be likely back end loaded.
And and then in terms of.
Can we can we hit this guidance.
Even if <unk> approvals or <unk> approvals are.
Are delayed into next year I think it's important to remember as I as I think I've mentioned.
We have consistently probable lives our R&D revenue items.
And we typically probable is based on.
When in the year and event might occur so lower probabilities for those items that would likely fall late in the year.
And so that gives us a lot of that combined with the fact that we have just a really robust pipeline of partnered programs that generate milestones on a very consistent basis gives us a lot of flexibility.
If certain items.
Our delayed slightly so I'm comfortable that our guidance is achievable.
And let's see did I Miss any of your questions I think I got them.
Yes, another lessor was the royalty pharma agreement just how that's fine and then for the guidance. Yes, yes. Thank you for thank you for reminding me.
<unk> royalties under our royalty pharma agreement will continue to be booked into our topline revenue saw a 100% of the royalties from spin raso will continue to be booked on our topline revenue and then the cash payments to royalty pharma will will really be a balance.
Key items for the company I will have more details when we get to our Q1 earnings.
Because at that point, we will have finalized all of the more detailed accounting with our auditors.
But I think it is.
Great point to make that's been RASM royalties will all hit our topline revenue as they always have.
Okay, great. Thanks, Scott.
Thanks Terry.
Next question comes from Jessica Fye with JP Morgan. Please go ahead.
Great. Good afternoon. Thanks for taking my questions thinking ahead to the ACA reminisce data later this year what are you going to be most focused on when those results read out and second can you remind me where you are with simpler for acromegaly.
And when we could expect the next update thank you.
Well for thanks, Jess for accuracy at parameters, we're looking for the outcome there.
What that's going to that's going to look like.
But maybe you should comment on this.
That's.
What everyone is waiting to see.
How the.
Functional benefits.
Translate to into a hard outcome data on that that's worth it.
Too soon and we're all obviously going to be.
Focused on also similarities of the population enrolled in that study.
Cardio transform study so that's probably the second most important aspect is to.
See how.
A representative of the population of the boots enrolled as to what we're seeing.
Today.
In our study yeah, so patient demographics will be very interesting in addition to of course.
Main endpoints the primary endpoints.
Just on the acromegaly.
The monotherapy study is continuing and ramping up.
We're planning to share data.
Hopefully at a medical meeting, but we'll get it out in the second half of this year from the monotherapy data as you know, we we presented data.
In patients that were poorly controlled on somatostatin analogs last year. So we'll have the monotherapy data in the second half of this year and with that our next steps.
Thank you.
Okay.
The next question comes from Myles Minter with William Blair. Please go ahead.
Oh, hi, thanks for taking the questions just on <unk> clients. That's been Ross is going to return to growth in net citing the irony, 20% of adults, presumably type III patients are actually treated with disease modifying therapy.
What's the sort of cadence I guess of return to growth that we can sort of expect it doesn't seem that it's going to happen this year.
It seems as if for the spin Rozzer franchise that.
You really like to back this up with clinical data and I think the type three patients, particularly the adult is probably where there's a whack.
Rods or efficacy data sorry can we expand some expect some clinical studies to be launched by Biogen to support that thesis.
Start with that Beth on the return metrics that return to growth sure absolutely. So thanks for the question miles.
And I think you're already starting to see.
But we had really anticipated that this return to growth is starting in the United States with.
Stabilization and even really a little bit of increase year over year and quarter over quarter Q3 Q4.
And that's what you would expect because that was the first launch for both Cinryze as well as for the competitor products and we would anticipate that that will continue to see those same dynamics across across other geographies similar to the cadence of the <unk>.
<unk> launches across various geographies.
So that would be that would be our anticipation of the cadence.
And I think it's really important to focus on the fact that the teens and adults are aware.
It's been rather has already a very strong efficacy and safety profile, but it's particularly strong in.
Those teams in adults.
And it's particularly in comparison to the competitive products, which you know really don't adequately address those patients or in fact in the cases of <unk>.
Isn't really even approved for for those older patients right. So you would expect that as a great place for Cinryze.
To see growth and in fact, that's the largest prevalent population there's about 60% of the prevalent population is made up of these teams in adult so its gives tremendous opportunity for growth not only in the U S but in.
In other markets across the world.
Biogen is particularly focused on expanding in Asia as.
As well as in other geographies around the World Latin America Eastern Europe .
There are geographies as well so.
I think all of those things are going to.
B factors in spin rises returning to growth.
And the post marketing studies Myles.
The other part of your question, we think will only contribute to and further enhance the potential to return to significant growth for spin rosin and those studies are going really well two studies are examining higher doses of spin rosin. The devote study some of that data some data with shared last year.
Looking at higher doses of <unk> showed that even greater efficacy in SMA patients. The ascend study and patients that their disease progresses. On <unk> are also Baidu is also looking at a higher dose in those patients to show that patients will do better and we'll benefit and then the response study looking at the commercially commercially the commercial doses.
As of today in patients.
Whose disease progresses that our own gene therapy is also going well.
<unk> hasnt laid out timing or fixed.
Expectations on timing to share data, but study is going well and the purpose of those studies is to further enhance.
The market.
Performance for spin rosin, and so far everything is going on track.
And just a quick follow up for Beth how much of the Opex guidance is factored in our building the new manufacturing facility.
This year versus just underlying R&D cost for the business.
Sorry, Myles I didn't hear that you cut out.
How much of the current Opex guidance is.
Accounting for the new manufacturing facility that you're building versus the underlying R&D of the business.
So none of the Opex guidance includes any costs associated with the new manufacturing facility. That's all.
Our balance sheet at this point.
It's using some of our cash.
As we construct the facility and will be.
Building the costs associated with that that asset over the course of the construction period and then we will begin amortizing those costs in the 2006 timeframe. Once the building is online and operational and at that point, you'll start to see some of those expenses from the amortization flow into our opex.
But thanks for the clarification.
Thank you.
The next question comes from Mike <unk> with Morgan Stanley . Please go ahead.
Yes.
Hey, guys. Thanks for taking the question.
Just one from me on the pure reverse in HBV.
You highlighted your partner GSK recently started the phase III study.
Just curious how the recent J&J decision to de prioritize their HBV program.
Might impact your thinking on potentially the opportunity here or maybe your go forward strategy.
Eric do you want to take a stab at that.
Yes sure.
It really doesn't impact our program Gsk's program at all.
We're very pleased that GSK is.
Nicely enthusiastic about this program has started their phase III program again, the peer of Ericsson in the be clear study and the phase II data did things that the other drugs for competitive.
<unk> for lowering S antigen, if not done which has caused these.
Loss of S. Antigen that are sustained for a long period of time and Thats. The reason GSK has taken it forward. So we're very enthusiastic about our programming, but we don't see any read through from Aw.
Other programs at all.
Yes.
Michael I think in short.
<unk>.
The competition from the J&J drug.
Kind of discounted already because we are seeing that as Eric said greater efficacy in phase <unk>.
For <unk>. This just helps clarify that situation. So if anything it's upstate clarifies the competitive landscape for <unk>. So it just further enhances it.
Got it that's helpful. Thank you.
Welcome.
The next question comes from Paul Matteis with Stifel. Please go ahead.
Hi, This is James on for Paul Thanks for taking our question.
Just a quick one in on Angelman.
What's the latest thinking on when we may see that data and again, how are you thinking about.
Whether or not this trial soon to get a sense on efficacy.
Then maybe just quickly taking a step back from a strategic perspective.
If you look at all of your non partnered assets. How are you thinking about the balance of potentially monetizing them versus launching them in pursuing them independently.
From a BD perspective thinking about other technologies and in light of the meta genomics partnership or so thanks.
Sure James.
There was a lot there, especially in the second part of your question and we can talk about but I'll try to be brief. So angelman will be brief because we don't have anything more to report at this time, except that we feel very good we feel very confident in the execution of this study is going very well.
Jen has not laid out a timeline for data dissemination from the phase <unk> study.
We are working through.
The potential efficacy endpoints that would support a phase III study now.
We are making great progress in with regulators as to what would constitute.
Clinically meaningful benefit endpoint for patients with Angelman syndrome for a potential phase III start I have to leave it at that right now hopefully by June we will provide an update later this year, but we're very feeling very good about the human study.
With respect to monetization, but we partner, what we keep and so forth.
I'll take a stab at that maybe then on the ASIC chip in a little bit too.
So.
<unk>.
Today, we have a wealth of assets.
That are in front of us at for my honest from our R&D organization.
We focus on the late stage pipeline, we have a really rich mid stage pipeline as well as a lot of new drugs coming into development.
<unk> right now.
And we are very carefully deciding on as we did recently with <unk> and which of those assets makes sense for ion is too cheap.
And.
And to bring to the market ourselves and we're looking forward versus those that we think will be.
We'll do better will be better off with a potential partner down the road.
We're looking forward to providing a update on what I referred to as the next wave of ion as commercial opportunities in the second half of this year beyond upon personal assortment on the Lewis and right now we're laser focused on launching those drugs.
As far as monetization goes I think you asked we're not planning there are no plans to do.
Any royalty work at this growth monetization like we did for our pellet Carson and Cinryze that earlier this year a royalty pharma.
But.
Talk a little bit about prioritization and how we go through them, yes sure.
I think you covered most of it maybe I think I can give you a lens into the second half of the year.
You know as we are focused on the three near term commercial opportunities. We're also looking from a line of sight as to what comes next in the mid stage pipeline and we look at a lot of factors I think Brent mentioned a couple of do we have.
In the in the timeframe within which they would be end market can we maximize the full potential of the product. If we can then does that actually sat with some of the products.
Customer facing synergies that we see and if they count can we actually do it in a very efficient plant. So that's probably a bit of our schematic over here in terms of criteria to make a selection.
We see a really nice cadence of.
Our products coming in from the neurology franchise, so it's very exciting there.
A really nice team that works on early to mid stage and neurology here. So you'll hear more about that in the second half of the year and then we.
I also have some things that can move into our specialty franchise, just like we have done at a loss in specialty we do have a couple of other specialty products such as <unk>.
Separate Larson for Polycythemia Vera So we're looking forward to seeing some of the data there, which as you know.
Encouraging at this point in time, so that's kind of our way to kind of a market in the near term and then the mid term and then we work very closely with R&D as I said integrating kind of our our early stage pipeline as well to understand kind of what indication strategy could look like.
And how we want to think about going to market with that for ourselves and where we think theres more benefit for partners to actually again realize the full potential of the product. Thanks I mentioned.
Thanks for all the color.
The next question comes from Yale Jen with Laidlaw <unk> co. Please go ahead.
Good luck.
Good afternoon, and thanks for taking the questions.
In terms of the effective fee I know Roche is advancing.
Uh huh.
Sure.
Two three studies.
And I'm curious what it is also good.
Graphic atrophy indication of where they are.
Hi.
The company thanks.
Given that there is the one product just recently approved and the other one in life cycle.
Clinical stage right now.
Both programs. Thank you Yale for the question both programs are going very well.
Maybe you didn't want to add to this but.
The Iga nephropathy, there is really nothing new to report there except that the news we reported late last year and early this year.
We still plan on initiating the phase II study in Iga nephropathy is on track that's a rare indication and then for geographic atrophy.
It's going it's going really well right yes.
The enrollment certainly have picked up post pandemic and we're very pleased with how the study is progressing so it is a.
A large study and one of the largest.
Eight phase II studies, we've conducted recently so.
Quite optimistic and.
Also Russia, obviously is very interested and keen to make a decision on on the next steps for that particular program. The phase III. <unk> study is designed to set up a potential phase III study based on the <unk>.
Some idose study the outcome of that study.
And if your question was asking about how Roche is going to handle a rare indication versus a broad indication. That's a question for Roche.
Kim can answer that one for you sorry.
Bob Thanks for the color and maybe one more question.
For all investors.
In terms of the person in <unk>.
You guys already upside.
Study it seems that you have the data.
Later on you may not.
But just curious what are the other.
We're still option to.
Upsize. The study if you will fill that could be needed in the future.
Thanks.
We don't expect to upsize the study.
We think we're right where we need to be.
The studies on the.
The cardio transform open label extension study is well underway. We are patients now that have entered the OLED.
All of this is why the timing for the decision we made last year to upsize. The study when we did was so important.
And as I said in my opening I think my first question I had everything is going according to plan with respect to blinded event rates balance of preparedness versus naive and heritage.
Enhancing the number of patients with hereditary <unk>.
Ctr cardiomyopathy. So there are no plans to further upsize the study.
We're approaching the finish line.
Okay great.
All the provinces.
Thank you.
Yes.
The next question comes from Joseph Stringer with Needham and company. Please go ahead.
Hi, Thanks for taking our questions just a quick one us.
From us on.
The broad pipeline prioritization here, just given the company's pipeline Brad do you consider the current pipeline size and R&D spend is sort of right sized at this time and as this is an evolving outlook as you go forward. Thanks.
Thanks Joey.
Since I moved into the CEO role one of <unk>.
My key objectives as well as my team.
Here.
It has been to really focus the organization on what is going to bring the greatest value to the company.
That is that has been really important is if you think about it prior to our evolution to full integration we partnered all of our programs so prioritization.
Organization and focus with less important.
Lastly, more important as we make investments to bring products through phase III into the market ourselves so although I cannot say when.
They are not the size of our pipeline today will be will be the same size five years from now.
What I can tell you is that we will focus the pipeline as we have done over the last couple of years, when we announced and we said we're moving away from indications like oncology.
For example.
Which we moved away from because we don't think that that's the best use of our resources and we'll continue to do that I don't know what that magical number will be that size, but we are focusing and prioritizing and I wouldn't be surprised if the pipeline.
Was proactively.
Reduced in size based on number of drugs and maybe.
Those drugs, we will expand the indications as an example to really maximize the value of each asset.
You want to add anything to that Nathan.
Just again I think I spoke about this briefly in the last question.
Do I think to emphasize you know.
Brad's vision, and where how we're putting it into our process to give you a little bit more color is that we took on a more rigorous approach to prioritization.
In the last year and its continuing this year as well and and what I really like about the processes that included really.
A large portion of the Io and his team from research development and commercialization manufacturing Tox all the way through to really think through not just the quantitative aspects of each of our programs, but also strategically and qualitatively what's most important to bring forward and how do we bring it forward. So we.
Have some really nice ways to think about what we want to keep all the way to market. They also have some really good distinctions on where we think some programs will again, along with partners and realize their full potential.
So.
Stay tune, we continue to kind of.
Bring in focus that Brad talked about and that Youll see more of it in our pipeline.
And Joe you got it.
Another part to that question, which I forget.
No that was it thanks for taking our questions and thanks for the detail.
Thank you.
The next question comes from our own or with Cowen. Please go ahead.
Great. Thanks for taking my questions, but I just got two the first one is just maybe just to follow up on the sector B question.
I believe you guys win a study that was started.
Started in 2018 and 120 patients.
Obviously smaller than the current study which is 330.
It started and then I think that study was terminated just give us a sense kind of what happened there.
I think the primary endpoint was also different that was.
Sector be levels, whereas in the current study is obviously looking at.
Change in G&A, and then second just your thoughts in and that's preliminary on the IRA airplanes or some potentially will have two indications in the future hopefully what does that mean from a negotiation standpoint or can you ultimately get a broad <unk> label. Thank you.
Thank you your own.
So perfect be imaging chime in.
There has been those studies that have been terminated.
That didn't that didn't concur.
Conclude net to their natural come to their natural conclusion to design conclusions study, we did a phase I study.
Maybe that's what you're referring to that two phase ones with single dose on a multiple to phase one as a single dose in a multiple dose is that your standard to measure safety as well as.
Pharmacodynamic activity reductions in factor B, that's what set us up for the current geographic atrophy Phase II study, which as Eugene said earlier enrollment has really picked up and is going very well.
And I'm not sure I'd say much about it the there've been no study terminations that were not planned.
For the factor B programs, either MGA or Iga nephropathy.
The program is going really well and as you want to talk a little about IRA yeah.
So you know.
As you know we've been looking at the implications of the IMA for our our portfolio.
<unk> specifically as you know there is an orphan drug designation exclusion for a single disease orphan drugs and for Epsilon person, both indications of Pn and C. M qualify as a single disease and that is because of the way we got the ODT exemptions are orphan drug.
Designation is for <unk>, not necessarily for one indication and the other.
So you should.
Think that through as Youre thinking about.
That and we would then be excluded from that maximum fair price negotiation as well the other thing to keep in mind is.
This is really good thing for patients in a way.
We took away the disadvantage for patients for out of pocket costs under Medicare part D.
The so called Donut hole catastrophic care really kind of goes away and we do believe that really allows patients to kind of make the right choice for their product and not leave it up to kind of costs between the Medicare part D or Medicare part B benefit as well. So we think both of those are playing really well for Epsilon Torsten ethylene looking too.
The IRA implications thanks.
Nathan.
Yeah.
Thanks.
The next question comes from Gena Wang with Barclays. Please go ahead.
Thank you for taking my question just a few very quick one.
First I wanted to confirm that.
<unk> milestone will be reported as part of the R&D effort.
Second regarding the.
Yeah.
Manufacturing facility.
Structure, what is the cost.
Facility.
Lastly quickly regarding the cardio transform.
You mentioned in the past.
Yes.
Adam.
Can you remind us percentage of patients.
Jeremy patient.
Patient.
Cool.
Got it.
And the final.
Okay.
So gena.
You were breaking up a little bit, but I think I got your questions. Thanks for the questions that you want to take the at once there's a milestone in manufacturing facility sure.
Absolutely, yes, so thanks for the questions Gena so the upon <unk> approval milestone will be reported as an R&D revenue item.
And on the manufacturing facility costs, we're anticipating that will be about $350 million, we are already well along in the.
And the construction project process with <unk>.
Design.
Programming engineering architectural efforts underway.
And so you should anticipate that that cost to be spread out over the next several years, we expect to be.
Manufacturing API in that facility up and running in.
Late 'twenty five mid 26 timeframe.
And then for cardio transform I'll ask Eugene to comment on what our targets are goals for hereditary but for the families. Again, you broke up a little bit but our goal as I think I said stated earlier is to get a relatively equal balance between 90 patients and determine patients and right now the upsizing of the study is delivering exactly that we are well on our.
Wei hereditary.
Hereditary of course is what we're trying to target as we have the attract study to families.
Our guidepost.
Remember it was done.
<unk> time.
Diagnostic options and attention to this disease. So so because they've they've enrolled roughly 25% of hereditary patients as a percentage of total population.
That's kind of the guidepost, it's going to be difficult to achieve that but were and thats what were targeting.
Targeting somewhere in the 2025 range.
Thank you.
Thank you Janet maybe we have time for one last question.
And the last question comes from do Kim with Piper Sandler. Please go ahead.
Hi, Thanks for taking my question I'll keep it to one I just wanted to follow up on the royalty pharma agreement and how best you're going to recognize the upfront payment and if any of that is factored into the revenue guidance for this year.
Sure. So the $500 million payment we received in January is it.
Is essentially increasing our cash.
So youll see that in our Q1 cash balance there'll be an offsetting liability for the payments, we need to make to royalty pharma.
And 100% of our spin raws have royalties will continue to be but to the topline.
In revenue so it's already factored into our revenue guidance.
You know again assuming.
A similar split of commercial and R&D revenues really reflects that 100% of the spin roset royalties on the topline revenue.
And we'll give some more detail at Q1 once we complete that.
The detailed accounting treatment with our auditors.
Great. Thank you.
Thank you Joe.
Thanks, everybody. Thanks for joining us on today's call and for participating.
We're really looking our.
I had a very successful 2023, we plan to continue our positive momentum and delivering on our key commercial pipeline and technology objectives for the year and we look forward to providing updates to all of you as we make progress throughout the year. So until then thanks very much for participating and have a great day.
Goodbye.
This concludes the conference. Thank you for attending today's presentation you may all now disconnect.
Okay.
[music].