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Good morning, ladies and gentlemen, and welcome to the Alnylam Pharmaceuticals Fourth Quarter Full Year 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. I would now like to turn the conference call over to the company. Please go ahead.

Good morning. I'm Christine Lindenboom, Chief Corporate Communications Officer at Alnylam. With me today are Yvonne Greenstreet, Chief Executive Officer; Tolga Tanguler, Chief Commercial Officer; Pushkal Garg, Chief Medical Officer; and Jeff Poulton, Chief Financial Officer. For those of you participating via conference call, the accompanying slides can be accessed by going to the Events section of the Investors page of our website, investors.alnylam.com/events. During today's call, as outlined on Slide 2, Yvonne will offer introductory remarks and provide some general context. Tolga will provide an update on our global commercial progress. Pushkal will review pipeline updates and clinical progress, and Jeff will review our financials and guidance, followed by a summary of upcoming milestones before we open the call to your questions. I would like to remind you that this call will contain remarks concerning Alnylam's future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent periodic reports on file with the SEC. In addition, any forward-looking statements represent our views only of the date of this recording and should not be relied upon representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. With that, I'd like to turn the call over to Yvonne. Yvonne?

Thanks, Christine, and thank you, everyone, for joining the call today. 2024 was a fantastic year for Alnylam with strong research, program development and commercial execution and significant progress across the business. This includes the highly positive results from the HELIOS-B Phase 3 study, leading to submission of global regulatory filings for vutrisiran in ATTR cardiomyopathy. We also continue to advance and expand our robust and high-value pipeline of clinical programs, and we continue to demonstrate strong commercial and financial performance achieving combined net product revenues of over $1.6 billion at the upper end of our revised guidance range and we delivered $95 million in non-GAAP operating income for the full year, marking a significant milestone for the company. Furthermore, we maintained our award-winning culture, which has been a critical enabler of our success. As we look for year ahead, 2025 has the potential to be a landmark year for Alnylam. We believe that there are three core elements of our business that will drive sustainable growth and value creation, not just in 2025 but for years to come and will take Alnylam into its next exciting chapter. The first is TTR leadership where vutrisiran, if approved, has the potential to become a new standard of care in ATTR cardiomyopathy and establish a flagship franchise for our company with the advancement of our next-generation TTR assets, nucresiran, following along. Next is growth through innovation, including a pipeline with numerous multibillion dollar opportunities and an R&D engine set up to deliver sustainable innovation and value creation. The third pillar is strong financial performance where we project that our robust commercial delivery and disciplined approach to capital allocation will enable us to sustain profitability going forward. All of this is underpinned by a best-in-class team and our award-winning culture. All of this represents tremendous progress against our Alnylam P5x25 goals, launched back in 2021. We are now on the cusp of turning these goals into reality and believe that in doing so, we're on track to become a top tier biotech. Furthermore, the progress we make in 2025 will set us up for the second half of the decade and our next era of significant growth. We are entering a new and exciting chapter in our Alnylam's history and truly believe the best has yet to come. With that, let me now turn the call over to Tolga for a review of our commercial performance. Tolga?

Thanks, Yvonne, and good morning, everyone. Q4 was another strong quarter for our commercial portfolio with our combined TTR and rare franchises delivering 30% growth compared with the fourth quarter of 2023. On a full year basis, we delivered $1.646 billion in combined net product revenue at the very upper end of our 2024 product revenue guidance range, which translates to a 33% growth compared to 2023 as we continue to consistently increase the number of patients on therapy in both our TTR and rare franchises. Let me now turn to a summary of our fourth quarter TTR performance. Our TTR franchise achieved $343 million in global net product revenues during the quarter, representing a 35% increase compared with the fourth quarter of 2023 as we continue to increase the number of hATTR-PN patients on our therapy. In the U.S., during our first full year of competition in hATTR-PN, combined sales of ONPATTRO and AMVUTTRA in the fourth quarter increased by 10% compared with the third quarter and finished the year with a robust 42% year-over-year increase, driving strong growth momentum. The 42% year-over-year growth was primarily driven by the following; a 34% increase in demand driven by the strength of ongoing AMVUTTRA patient uptake as well as continued switches from ONPATTRA. We are pleased with the growth in demand which was consistent throughout the year, despite new competition entering the market at the end of 2023. The remaining growth in the quarter related to favorable adjustments in gross to net deductions, which were offset modestly by stocking dynamics as inventory in the distribution channel decreased in Q4. I'd like to take a moment to reflect on our full year hATTR performance in the U.S., where we generated $705 million in full year revenue, representing 39% growth compared with 2023 and almost $200 million in dollar growth. The dollar growth in 2024 represents an increase relative to the dollar growth we generated in 2023 of $180 million despite the new competition that entered the market at the beginning of the year. We believe this is reflective of the leadership position we have established in the PN market over the last six years, the strength of AMVUTTRA safety and efficacy profile, which is underpinned by rapid knockdown of TTR and solid commercial execution. Now let me turn to our international markets, where the TTR franchise grew 12% in the fourth quarter compared to the third quarter of 2024 and increased by 25% year-over-year compared with the fourth quarter of 2023. Similar to the U.S., the year-over-year growth was primarily driven by increased demand for AMVUTTRA as patient uptake remained robust. Before we discuss our Rare business, I'd like to take a few minutes to review our readiness for our upcoming PDUFA target action date and the potential expanded label and launching TTR-CM in late March. We're excited about the potential of bringing in RNAi therapeutics to a patient population that is desperately in need of a product with a new mechanism of action. We've been preparing for this opportunity, which may now be only weeks away pending successful completion of the ongoing U.S. regulatory review. We recently announced full year 2025 product revenue guidance at JPMorgan. Our guidance of over $0.5 billion in absolute growth versus 2024 is driven by mainly by our TTR franchise that includes our anticipated label accession into ATTR-CM and reflects our confidence and excitement about the launch. For 2025, we've guided for TTR product sales of between $1.6 billion and $1.725 billion. This would represent a 36% increase in an annual revenue compared with 2024 at the midpoint of our guidance, reflecting an acceleration from the 34% growth, our TTR business achieved in 2024. Now let me share with you a few reasons for our optimism and a sense of what's to come. As we said before, ATTR is an orphan disease. The category is rapidly growing and is still largely underserved. This will be a market growth story, an opportunity to help more patients in need, whether they are newly diagnosed or currently on a stabilizer therapy and experiencing disease progression. It is a category right for an entirely new treatment option. In this context, we have the potential to introduce a disruptive treatment. Assuming approval, AMVUTTRA will be the first and only RNAi silence approved for both ATTR-CM and hATRR-PN, one that delivers rapid knockdown of TTR, working upstream at the source of disease, demonstrated profound impacts on CV outcomes in HELIOS-B, including a 36% reduction in all-cause mortality versus placebo in a study population representative of today's patient with 40% on a stabilizer and a significant number on other background therapies like diuretics and SGLT2 inhibitors. Early and consistent preservation of functional capacity and quality of life impacts that are critically important to patients and that they can feel. All of this achieved with just 4 doses per year and uniquely positioned for seamless access for patients. And while there is still much work still in front of us, we are building on a strong foundation in hATTR-PN and a demonstrated track record of consistent commercial execution, as you have seen from our Q4 and full year results. As we approach this important launch, we are building for durable long-term success of our TTR franchise and building on our experience and success over the past six years in this category. This means taking the time to enable smooth access and to create a seamless experience for patients and providers alike. Toward that end, we have already been at work optimizing the access and patient onboarding experience. This means, optimizing access pathways and health systems, where patients are actively managed today. given 80% of the population is being treated at 170 health systems, we are focusing on optimizing access pathways at these health systems so that health care professionals can easily prescribe AMVUTTRA with the knowledge that the patient will receive it at an optimal location, be it an office, at an infusion center or at home. We made good progress, laying the groundwork in this regard and it is important to note that following FDA approval for the expanded indication, it can take several months for the product to be added to the system's formulary and for the access pathway to be fully optimized, which will result in a ramp-up in demand as the year progresses. In parallel, we've also been building a broad ecosystem of alternative sites of care to expand optionality for how patients can initiate therapy in a seamless way and adhere to it. As we previously shared at our 2024 TTR Investor Day, there currently are over 1,000 alternative sites of care available for patients. This is in addition to health systems group practices and clinics and at home administration. Now our goal is to expand these provider sites and ultimately for greater than 90% of patients to be within 10 miles of a treatment side. With regard to our field readiness, we've already scaled up all our customer teams cross-functionally that includes world-class sales, field reimbursement, key account management and medical and award-winning patient services teams. Looking ahead to post approval, we will pivot our focus to securing health systems formulary approval via their pharmacy and therapeutics committee reviews and finalizing access pathway optimization, which again, could also take several months once we have an approved label. Expanding our value-based agreement in ATTR-CM, we've been an industry pioneer in establishing VBAs across our portfolio to deliver value and enable broad patient access. We are focused on expanding these existing ATTR VBA partnerships to cover our expanded label. Finally, driving disciplined and compliant execution across our teams following approval. In short, we see tremendous opportunity in this category. We are on the cusp of a regulatory decision for what has the potential to become a transformational product for patients in need. And we have an -- commercial organization deeply engaged and experienced in the ATTR market. We plan to share relevant operational details over the course of the year to provide clarity on the progress of our launch, as we aim to achieve or exceed our full year revenue guidance. Now turning to our rare franchise and the performance of GIVLAARI and OXLUMO which delivered $108 million in combined product sales in the fourth quarter, representing a 3% decline compared with the third quarter of 2024, driven by purchase patterns and 18% growth compared with the fourth quarter of 2023. For GIVLAARI, Q4 product sales decreased by 9% compared with the third quarter of 2024, primarily due to the timing of a large orders in the partner market in Q3, which did not recur in Q4. On a year-over-year basis, GIVLAARI sales increased by 9% compared with the fourth quarter of '23 with the following regional highlights. A 14% increase in the U.S., primarily driven by growth in new patients on therapy with additional growth driven by inventory stocking dynamics, a 1% increase in our international market where demand growth in our European markets was offset by gross adjustments in our partner markets. For OXLUMO, Q4 product sales increased by 8% compared with the third quarter of '24, primarily due to continued demand growth and increased by a solid 33% compared with the fourth quarter of 2023 with the following year-over-year regional dynamics. Despite emerging competition, a 77% increase in the U.S., primarily driven by strong demand growth with additional growth driven by favorable gross to net pricing adjustments and inventory stocking dynamics, a 12% growth from rest of world markets, primarily driven by strong growth in patient demand. In conclusion, we delivered strong results in the fourth quarter with both our TTR and rare franchises, driven by continued robust growth in patients on therapy, which enabled us to close the year at the upper end of our '24 product revenue guidance range. With that, I will now turn it over to Pushkal to review our recent R&D and pipeline progress. Pushkal?

Thanks, Tolga, and good morning, everyone. As you all know, 2024 was a very exciting year for our TTR franchise. We shared the landmark results from HELIOS-B at several conferences throughout the second half of the year. Together, these data presentations highlighted vutrisiran's potentially transformational profile in today's population of patients with ATTR-CM with benefits across a comprehensive series of assessments. Based on these compelling data, we've completed several regulatory submissions that are now under review. In the United States, we have a PDUFA date of March 23, and parallel filings were achieved in all major regions, including Europe and Japan. Our goal is to bring this new and important therapeutic option to patients around the world as quickly as possible. We also continue to look ahead and innovate in TTR beyond vutrisiran with Nucresiran, formerly known as ALN-TTRsc04. At AHA in November, we presented updated Phase 1 results, showing rapid knockdown of serum TTR that was robust and highly durable greater than 90% at 6 months, supporting the potential for an annual or biannual subcutaneous dosing regimen and an encouraging safety profile, which in addition to offering convenience for patients, could enable broad payer coverage. Together, we believe these data support a potential best-in-class profile. I'm also happy to announce today that the FDA has granted Nucresiran orphan drug designation for ATTR Amyloidosis, encompassing both polyneuropathy and cardiomyopathy. As Yvonne announced at JPMorgan, we plan to quickly advance Nucresiran to a Phase 3 study in ATTR Amyloidosis with cardiomyopathy that is expected to start in the first half of 2025. Additional details regarding the study design will be shared at our R&D Day on February 25. Beyond TTR, our R&D efforts have enabled us to build one of the most robust pipelines in the biotech industry today positioned to deliver strong growth and innovation across a broad range of disease areas and indications at all stages of development. In the fourth quarter, we continued to make great progress in advancing our pipeline. Let me highlight a few key milestones. We continue to advance

Thanks, Pushkal, and good morning, everyone. I'm pleased to be presenting Alnylam's full year 2024 financial results and providing our complete financial guidance for 2025. Starting with a summary of our P&L results for the full year. Total global net product revenues for 2024 were 1.646 billion, representing 33% growth versus 2023 with both TTR and Rare franchises reporting strong growth of 34% and 29%, respectively. These results came in at the top end of our 2024 product revenue guidance which we had raised more than 10% at midyear from our original 2024 guidance. For the full year, net revenue from collaborations was 510 million, including a $60 million sales milestone in Q4 from Novartis due to LEQVIO exceeding 600 million in annual sales. Compared with 2023, collaboration revenues decreased 7%, primarily attributed to differences in certain revenue items between 2023 and 2024. During 2023, we recognized 310 million of revenue from the upfront payment received from Roche in connection with execution of our

Thank you, Jeff. Operator, we will now open the call for questions. Those dialed in, we would like to ask you to limit yourself to one question each and then get back in the queue if you have any additional questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. And your first question is from Tazeen Ahmad from Bank of America. Your line is now open.

Hi, good morning. Thanks for taking my question. I wanted to get a sense from your team about how long you think it's going to take to establish payer policies after the approval of vutri and how do you think that could impact the initial trajectory of the launch? Thanks.

Thanks, Tazeen. That's a great question. I mean, clearly, we're in a strong position, having already a TTR franchise supporting patients with polyneuropathy. And this really gives us a strong foundation on which to build. Tolga, perhaps you could ask a specific question around time to plan approvals.

Hi, Tazeen. Look, obviously, we're really excited about the upcoming potential launch and our -- frankly, excitement is confirmed by the guidance that we've already provided. Now when it comes to the payer policies and formulary uptake, I think as you can see from my prepared remarks, this is really going to be a second half story. We're very much committed to the growth that we've already committed to, and we have value-based agreements that we know is going to be extended with some of these payer policies that’s going to accelerate. But the formulary piece takes a little bit time. So I would expect the uptake really to be meaningful in the second half of the year. Thanks.

Thanks, Tazeen.

Thank you. And your next question is from Kostas Biliouris from BMO Capital Markets. Your line is now open.

Thanks for taking our question. A quick one on AMVUTTRA from us. If we assume premium pricing for AMVUTTRA compared to silence, which are approved already, what are your thoughts around step edits for commercial insured patients who represent about 20% of the ATTR cardiomyopathy population? Thank you.

Tolga, that's a question for you.

Yes. Great question. Look, I mean, first and foremost, we really appreciate and like the product profile that AMVUTTRA still offer which is underpinned now by the HELIOS-B results. And in our engagements with payers at the pre-pricing discussions, we're also encouraged that they see, one, obviously, the value of this product can bring to the market. Second of all, the predictability of how we are actually being positioned as a Part B product. So all these combined, we actually expect our uptake to be very consistent with what we have seen in the past with PN in terms of how payers will cover the product. And as we've already shared, very much committed to the guidance that we provided, which again underpins how we really see the growth, which is going to be accelerated in 2025.

Thank you. Very helpful.

Thank you. Your next question is from Gena Wang from Barclays. Your line is now open.

Thank you. I know you cannot comment on the actual price for AMVUTTRA will be into the approval day, but wondering if you can share the key factors that impact your decision on pricing adjustment for AMVUTTRA. And related question, I know a few already asked, can you share with us what percentage of the current sites already have a J-code place that you can use for AMVUTTRA in ATTR cutting ops?

Thanks, Gena, for the question and recognizing that it's too early to be specific about price. And as you know, we have our patient access principles. And when we think about price, we obviously consider the value that our product is bringing to patients and the ecosystem as well as assuring optimal access. And I think we've done a great job in PN along those dimensions, and we continue to plan to do an equally good job for CM, don't we, Tolga? Do you want to add? Tolga, maybe the specifics.

Yes, I mean one maybe answer to your last point, which we already have a J-code for AMVUTTRA, which is going to be used. Therefore, we don't expect any changes or any disruption on that. And in respect to our coverage, look, as we shared earlier on our TTR Day and other forums, the current makeup of our business from a Medicare perspective as well as commercial, we expect that to remain the same. And therefore, which we believe is going to result in rather smooth coverage for our product. As Yvonne indicated, we're really excited about the orthogonal mechanism and how that's going to actually bring additional value and alternative, the disruptive treatment for payers as well as patients. And then actually, frankly, most importantly, the affordability for the patient. As you know, 70% of our patients currently pay zero co-pay, and we expect that dynamic to remain the same, which we believe is going to be an important driver for our patient uptake.

Thanks, Tolga. Next question.

Thank you. Your next question is from Maury Raycroft from Jefferies. Your line is now open.

Hi. Congrats on the progress and thanks for taking my question. Just wondering if there's any perspective you can provide on label discussion progress. And in addition to reduction of mortality and hospitalizations, are you advocating to have anything unique on the front page of the label and the indication and usage section such as wording related to preservation and quality of life and functional capacity.

Yes. Thanks, Maury. Look, first of all, we're really very enthusiastic about how the FDA review is going and we remain fully on track and for an approval date by the PDUFA. So we're excited about the progress that's been made on that front. In terms of the label, look, we believe that the study was designed and clearly demonstrated the benefit on mortality and hospitalization events. And we expect that that will be reflected in the label as well as the ancillary benefits that we saw in terms of preservation of functional ability, quality of life and benefits across a series of endpoints there. So look at the end of the day, we want a label that reflects the study that was designed and where we saw statistically significant results in predefined endpoints across a whole series of attributes that we think are a benefit and that we're able to actually then go and educate providers and patients on so we look forward to sharing that when an eventual approval occurs.

Got it. Okay. Thanks for taking my question.

Thank you. Your next question is from Ritu Baral from TD Cowen. Your line is now open.

Good morning, guys. Thanks for taking the question. My question was actually a really good follow-up to Maury on label language. Tolga, do you think about the language in the label, specifically mortality but potentially having that mortality clinical data later in the label in the clinical data section? What sort of potential advantage could that give you or not, either detailing the product or with payers?

Okay. Ritu, look, we have a pretty clear view of the understanding of how we're going to be able to promote, communicate this. Mainly, obviously, what Pushkal indicated, we had reached significant results on all prespecified endpoints, 10 out of 10. And our ability to communicate that is going to be relatively smooth. We're pretty confident on how we can actually differentiate the product from a product profile perspective, given that this is an orthogonal mechanism of action that rapidly knocks down the disease-causing protein and has the ability to actually then demonstrate those clinical outcome benefits on both mortality as well as hospitalization coupled with the fact that we actually have four times a year subcutaneous injectable that really provides great adherence as we've seen on polyneuropathy as well as our relatively smooth access given that 70% of patients pay zero co-pay. All those perspectives will be carrying through how we're going to actually communicate this exceptional medicine to the prescribers, which are very much in need of a disruptive treatment.

Do you still expect that to be in the actual labeling language though? Those data?

Look, at the end of the day, we think that the label will reflect the things that we've shown in the clinical trial. That's traditionally what is done, and we would expect this, as we've said, Ritu, that we had a whole series of prespecified endpoints that show the impact of this drug on this disease. And so we would expect that to be generally reflected in the label. And again, consistent with labeling, Tolga's team, our medical teams will be able to speak about those attributes and the results of HELIOS-B study to providers and patients and payers.

Thanks, Ritu. Next question, please.

Thank you.

Thank you. Your next question is from Greg Harrison from Scotiabank. Your line is now open.

Good morning. This is Teraesa Vitelli on for Greg Harrison. Congrats on all of the updates and thanks for taking our question. I was just curious to hear what your expectations are for vutrisiran's potential revenue mix among naive patients in the first-line setting and versus switches from tafamidis?

Tolga, that question is for you.

Yes. So I think to the best of our abilities, we were able to provide a pretty clear and ambitious guidance that really shows how we're going to actually accelerate this RTTR franchise and post 36%. Now how that mix is going to happen is, look, we believe this is a product well positioned to be a standard of care and to be cost the first line. But like any categories, we do also know that there is a need of another product with orthogonal mechanism of action beyond the stabilizers. So we certainly expect a good mix of patients so from naive patients that are coming in the door that are newly diagnosed and some perhaps eligible for switches or in a rare instances, some combination. So we do expect that, and obviously, as we built our guidance, all these elements were incorporated.

Great. Thank you. Next question.

Thank you. Your next question is from Gary Nachman from Raymond James. Your line is now open.

Hi, good morning. Maybe you could talk about the competitive dynamics you're seeing with Wainua in polyneuropathy with both products growing at this point? And how is the difference between Part B and Part D playing out? And how you think that's going to translate over to cardiomyopathy with that approval?

Thanks for the question. I mean, clearly, we're very pleased with our strong TTR performance in 2024 and that was with competition in the market. So I think we're doing a good job continuing to build the business. Tolga, perhaps you want to add some color to the specific dynamics?

Yes. So we just posted our full year results for '24, which happened to be the first year, actually, we faced competition. In this relatively narrow category where we always said this is going to be a growth story - category growth story. And I think what you can see, particularly in our U.S. numbers, where U.S. business from a pretty good healthy base, grew 42%year-over-year. And that was with the competition. And as far as I can tell Wainua also getting their fair share of growth which is, again, very consistent with the growth story that we've been telling all along. We believe we have a highly differentiated product profile versus Wainua given that it's four times a year, and it's HCP administered. And we had not seen any significant access headwinds. And we anticipate, frankly, this type of dynamic continue as we expand our expanded indication to cardiomyopathy.

Thanks, Tolga. Next question, please.

Thank you. Your next question is from Jessica Fye from JPMorgan. Your line is now open.

Hi, guys. Good morning. What do you think the early acoramadis scripts imply for the TTR cardiomyopathy market dynamics, market expansion and interest in agents beyond tafamidis as it relates to AMVUTTRA? And I think folks have been kind of trying to ask this in a few different ways, but maybe just to try one more time. What's the right way to think about the evolution of AMVUTTRA's net price as you move into this much larger patient population?

Okay. I mean two questions there. Clearly, as Tolga said, I mean we believe this is the market growth opportunity which makes a very exciting category to be playing and obviously becomes a cardiomyopathy with a strong track record in the TTR space. Tolga, perhaps that's the color to the first question and then the specific question around the evolution of net price?

Yes. I mean, I think, look, the first sentiment that comes to mind is encouragement. Effectively seeing another stabilizer coming into the market and they've shared some numbers on the prescription that are early innings obviously. We're very encouraged because if and other stabilizer that is four times a year with not really significant clinical data, obviously, they've actually shown that this is actually a growth category. Now when I think about AMVUTTRA product profile that has really strong clinical profile as well as the fact that it's four times a year annual dosing, we're really well positioned to be in the access, we're very excited about what AMVUTTRA can do given that the category is going to be continue to be growing, given the undiagnosed patient numbers.

Thank you. Your next question is from Paul Matteis from Stifel. Your line is now open.

Hi, thanks so much for taking the question. On payer dynamics and how they evolve in this category, are you expecting the average insurer to cross manage between Part B and Part D? And I think, again, the underlying question that everyone is trying to get to on pricing is you're at a significant premium right now. Does it have to go down or not? There's a lot of moving parts, right, like the payer liability on Part D is one of them. But just as it relates to how insurers are going to manage their formularies in this space, like could tafamidis or acoramidis actually be a step at it or is that just not something that's normal in practice at this point?

Yes. Thank you for the question. Look, I mean there's a lot of noise around how the payers will be managing this. What we've seen is this is a rare condition, highly devastating condition and we expect the payers to cover the product and how the market is going to evolve. I think we have a pretty clear eye view given how we've been actually managing polyneuropathy as a Part D product. And how Wainua has launched in the Part D product. We expect similar dynamics in terms of our payer mix. And we do anticipate that given the - given the patient affordability is a key driver of how patients stay on therapy is to be very favorable for AMVUTTRA.

Thank you. Next question.

Thank you. Your next question is from Salveen Richter from Goldman Sachs. Your line is now open.

Good morning. Thanks for taking my question. You plan to initiate a Phase 3 study for Inclisiran in ATTR-CM in the first half. How are you thinking about the timing of enrolment and events given the availability of new options and how do you plan to conduct an interim here?

Yes. So thanks for the question. I mean, clearly, we'll be providing more detail around on Inclisiran program at R&D Day at the end of this month. Pushkal maybe you can share a little bit about how we're thinking about forward Inclisiran which we're very excited about.

Yes, Salveen, look, I think Inclisiran the profile that we've seen so far really sets it up, we think, to be a best-in-class therapy for patients with this disease, building on -- what we've seen with Inclisiran this now is a derisked asset. We think we can get deeper knockdown. We've already shown that over 90%, 95% knockdown, less frequent administration and we think that's going to help patient outcomes. When we think about the development plan for it, I think there's a number of factors. A, we want to develop, bring this to market as quickly as possible because of the value that it brings. Two, we want to think about how do we develop a clinical profile for that and a label that allows for broad uptake and a very durable franchise, right? And so you'll see those -- how we've kind of brought those factors together at R&D Day. We will talk more about the development program there in CM and PN and our overall approach to this disease. So stay tuned. It will just be a couple of weeks, and we'll be able to share more.

Next question.

Thank you. Your next question is from Ellie Merle from UBS. Your line is now open.

Hi, guys. Thanks so much for taking the question. Just a couple for me. So how would you characterize the mix of growth in the TTR guidance from polyneuropathy versus cardiomyopathy and then Tolga, you mentioned that post approval, you'll be finalizing value-based agreements in cardiomyopathy, can you elaborate a bit on how these could work and what this could look like for cardiomyopathy relative to polyneuropathy? Thanks.

Tolga, two questions there. Polyneuropathy, cardiomyopathy and then a little bit more detail on how we're thinking about buying bill post approval?

Look, unusual to our tradition, we actually at JPM broke down our guidance between TTR and rare -- but I think we'll stop there. We'll obviously continue to provide more color about how the launch is going in the -- particularly in the second half of the year where we do see -- where we do anticipate the growth to take place. Now can you remind me the second question?

First approval, how we're thinking about buy and bill.

Value-based agreements, right? So look, we're very, very proud about the value-based agreements that we set out. Approximately, we have about 60% of the lives that are currently covered on the PN is dependent on the value-based agreements. And the value-based agreements are actually essentially really provide our commitment to the clinical outcomes. So we have this experience already with PN, and we anticipate that to actually also carry over in most instances, for cardiomyopathy, which should actually provide a level of predictability for the payers about how the product is going to perform and the clinical outcomes that the payers expect us to achieve. So I think that's a great -- one of the great best practices that we've established over the years. And we anticipate that to carry over with our cardiomyopathy indication in most cases.

Thank you.

Thank you. Your next question is from Mani Foroohar from Leerink Partners. Your line is now open.

Thanks for taking the question. Congrats on great results commercially and otherwise. I know that there's probably two more questions about AMVUTTRA and pricing in the line. So I'm going to ask actual financial question. Could you clarify the driver of the tax benefit that was noted here? And would that be recurring? Is this an NOL dynamic OUS, if you could just dig into how -- what drove that benefit and how it might recur or not flash over the course of the year?

Yes, that's a question for you. You give me another break.

Good question, Mani. We noted in the press release that we had a release of a valuation allowance ex-U.S., and that's really related to our Swiss entity. This is something that we have to do every quarter with our deferred tax assets as we have to assess whether or not it's more likely than not that, that value is going to ultimately be recognized. And the Swiss entity has had profitability for a number of periods now. So that gave us the confidence to release that. We've not released all the valuation allowances either in Switzerland, and we've not released anything in the U.S. yet. It's very difficult this point to predict further, Mani. So I'd probably just leave it at that for now.

Thanks, Mani. I think we've got time for one more question. I think we couple of last questions coming up.

Yes, your last question is from Luca Issi from RBC Capital Markets. Your line is now open.

Great. Thanks so much for squeezing me in. Maybe I'll follow Mani here I guess. But Jeff, how should we think about gross margin here going forward? I mean the same of the oral TC is very meaningful at 15%, 30%, but we obviously don't know the exact hearing of the royalty fee. Do you think that modeling gross margin compressing from 80% now, I think it's a low 80s now to like low 70s, so even upper 60s. Is that a reasonable assumption in your mind? Any call there much appreciated. Thanks so much.

Yes, I appreciate the question. So in my prepared remarks, I mentioned that we expect -- gross margin on product sales to be lower in 2025. You're right. 2024, our gross margin on product sales was 81%. And I do think that will be the direction of travel for a period of time, really driven by 2 things that relate to AMVUTTRA. One is -- it's our lowest margin product right now, given the royalty burden to Sanofi, and it's our fastest-growing product. So that will put pressure on margins as we move forward. And secondly, as that business grows, we also start to move up higher in the royalty tiers. So the average royalty rate will likely also increase over time. The royalty that we paid on average across 2024 for AMVUTTRA was 21%. Again, my expectation as this moves forward is, over time, that number is going to probably be mid- to high 20s. So that's just sort of the incremental amount that I would expect. Now there's a couple of things that will move the other way, I would say, on margins. If you look at our gross margin on a total revenue basis, that also includes the impact of collaboration and royalty revenue. That's revenue that's very high margin, probably close to 100%. As an example, in 2024, the margin on product sales was 81%. But if you looked at margin on total revenue, it was 86%. So that uplifted it. And then secondly, I think the most important thing is that the issue with this high royalty burden, if we're successful in developing Nucresiran, we'll hear more about that at R&D Day, as Pushkal said, there's no royalty burden to Sanofi on that. So that would obviously offset this in the future if we're successful in bringing that to market. So hopefully, that gives you a little more clarity on direction of travel on margins.

That's super helpful. Thanks so much.

Very good. Well, look, thanks everybody, for joining the call. 2024 is really a very good year for Alnylam. As I said, just the beginning of the success we believe we're on track to realize in 2025. So thanks, everybody, and have a great day.