IONS - NASDAQ

Good morning, and welcome to the Ionis First Quarter 2025 Financial Results Conference Call. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Walke, Senior Vice President of Investor Relations, to lead off the call. Please begin.

Thank you, Amy. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to view the press release and related financial tables that we will be discussing today, including a reconciliation of our GAAP to non-GAAP financials. We believe non-GAAP financial results better represent the economics of our business and how we manage our business. We've also posted slides on our website that accompany today's call. With me this morning are Brett Monia, our Chief Executive Officer; Kyle Jenne, Chief Global Product Strategy Officer; and Beth Hougen, Chief Financial Officer. Richard Geary, Chief Development Officer; Eugene Schneider, Chief Clinical Development Officer; Eric Swayze, Executive Vice President of Research; and Jonathan Birchall, Chief Commercial Officer, will also join us for the Q&A portion of our call. I would like to draw your attention to Slide 3, which contains our forward-looking language statement. During this call, we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consider the risk factors contained in our SEC filings for additional detail. And with that, I'll turn the call over to Brett.

Thanks, Wade. Good morning, everyone, and thanks for joining us today. Before we discuss our Q1 earnings and recent progress, I want to take a moment to acknowledge the rapidly evolving environment we're living in today. Recent changes at the FDA and the introduction of new tariff policies have introduced a degree of uncertainty with the potential for a disruption in our industry. Despite these external uncertainties, Ionis remains well positioned to execute on our strategic priorities, including all of our many value-driving catalysts coming up this year and next. We remain focused on our purpose to drive meaningful value for all Ionis stakeholders by successfully bringing better futures to people with serious diseases. We are executing very well against all our strategic priorities. A clear example of our ongoing successes is the completion of two strategic licensing transactions recently which enabled us to substantially increase our 2025 financial guidance. This includes higher expected revenue and cash along with improved operating loss. Raising guidance this early in the year reflects our confidence in our ability to continue executing well, including our ability to deliver transformational medicines to patients even amid the current volatility and our commitment and expectation to drive long-term value for shareholders. We achieved a major milestone for Ionis with our first independent commercial launch now successfully underway. I'm pleased to share that in its first full quarter on the market, TRYNGOL

Thank you, Brett. With our first independent launch underway and three additional independent launches planned in the next two years, our commercial team is executing on a focused agenda with substantial growth potential. We're well positioned to build on the early success of TRYNGOL

Thank you, Kyle. I am pleased to share today that we are increasing our 2025 financial guidance across all metrics, including raising revenue by more than 20% due to our strong first quarter results and recent successful licensing transactions. We earned $132 million of revenue in the first quarter, which increased 10% year-over-year. More than half of our revenue came from commercial products which grew 28% compared to the same period last year. Our increasing revenue reflected the encouraging early performance of the TRYNGOL

Thank you, Beth. We've accomplished a great deal to get us where we are today, a fully integrated, commercial-stage biotech company with our first independent launch well underway. Slide 25 is off to an excellent start, including the U.S. TRYNGOL

[Operator Instructions] We'll just go straight to Jay Olson from Oppenheimer.

We're curious about olezarsen and any overlap between physician prescribers for FCS and sHTG and how you plan to leverage that? And then related to that, would approximately 20% pancreatitis history for the patients enrolled in your pivotal sHTG studies provide sufficient power to show AP reduction and what level of AP reduction are you targeting?

Thanks, Jay. Kyle will take the overlap of prescribers for FCS, sHTG, and I'll touch on the AP question you had.

Yes. Thanks, Jay. First, I mean, the TRYNGOL

Thanks, Kyle. Jay, obviously, you're referring to the AP baseline event data that we reported in our baseline demographics clinical trial design study that we published earlier this month, where we had 22% in CORE and 13% in CORE2 patients with a history of AP over the last 10 years. The -- I want to emphasize before I get into expectations for AP data from those studies that this is a substantial unmet medical need, large patient population that health care providers are ready to treat patients with sHTG even without AP data in hand. This is a large market opportunity, a large unmet need and what we heard in our HCP panel, and we've heard from other HCPs that they are looking for a medicine that will substantially reduce triglycerides on top of standard of care, which is exactly how our trial is designed and that is the opportunity there. Now with that said, AP is, of course, is a secondary endpoint and our study as a secondary endpoint, is not powered for AP. But we're doing everything we can to increase the powering for the study. For example, we are combining CORE and CORE2 in our secondary analysis of AP events. And we're looking at AP events at 12 months, whereas the triglyceride primary endpoint is at 6 months. We're extending -- we're looking at the maximum amount of time in patients to look at AP data. And of course, the FCS data is also encouraging for TRYNGOL

The next question comes from Gary Nachman at Raymond James.

So on donidalorsen, just talk a bit more about what you're doing ahead of the PDUFA date internally to prepare for that launch. For patients that are going to be switching, how you're thinking about that transition, I guess, in the first year of launch? And just in terms of access, how long do you think that process is going to take? And then just as a follow-up here, Brett, on the macro dynamics. You just highlighted it briefly, but just talk a bit more what you think the expected impact from tariffs is going to be to the overall business just based on the current trade policy? And just in terms of your conversations with FDA, if you're seeing any sort of signs of potential delays, whether with PDUFA dates or starting clinical studies?

Great. Kyle, donidalorsen launch?

Yes. What we know about the HAE market is this is largely an unsatisfied market. We see approximately 20% of patients that are moving between prophylactic treatments in the U.S. on an annual basis. We also recently released the Harris Poll that showed that 9 out of 10 patients are interested in trying new therapies in this space. So there's definitely an opportunity here in the donidalorsen profile in terms of efficacy, tolerability and convenience is offered all in one single treatment. And when we start talking about switching patients and the dynamic of why patients want to switch, it's one of those three reasons that they're looking for something new and different. We're going to be able to provide donidalorsen in a way that demonstrates reductions in attacks, improve tolerability, and they're only going to have to take the treatment every 4 or every 8 weeks. So the profile is very, very strong there. In terms of switching patients, what we need to do is we need patients to advocate for themselves and we need physicians to understand what these patients are experiencing. And that's the work that we're doing right now. we're being informed by patients, and we're also beginning to communicate directly with HCPs what the need is in this market and setting ourselves up to be able to talk about how and why to switch these patients and why it's important for that to happen. But this is a switch market. We will begin the ramp, hopefully, in Q4, and we anticipate peak sales being greater than $500 million for donidalorsen. And with the concentrated prescriber base, we can have a very targeted sales force to go out and do that, which is currently being hired and trained and going to be deployed well in advance of the PDUFA date.

Thanks Kyle. To your other question, Gary, we are obviously carefully monitoring changes that the new administration is bringing both at the FDA and at the macro level on tariffs, et cetera. At the FDA, today, we're pleased to report that we've had no changes in any of the programs that we've been discussing with the FDA. Everything is on track. As mentioned earlier, donidalorsen's PDUFA is on track for August 21, and the discussions we're having are the exact -- the discussions we should be having at this stage of the review process. Same is true for our other discussions with the FDA INDs and so on. So everything appears to be going well with the FDA at this time despite the changes that are occurring that we'll, of course, keep on monitoring that. With respect to other changes, tariffs, et cetera, that too, we have not seen any meaningful impact on our business to date. That includes costs or that we have to potentially absorb for drugs that are already launched or future drugs. With respect to commercial supply and clinical supply, that was also going very well. We have sufficient supplies in place to support the TRYNGOL

The next question comes from Debjit Chattopadhyay at Guggenheim.

On the FCS launch, how confident is the team on the 2,000-plus FCS patient estimate and how quickly can you convert these patients to commercial therapy before you have significant price erosion with the launch in sHTG?

[Indiscernible] take that, please?

Yes. Happy to take that. I think while the epidemiology varies between 1 and 13 per million, we're fairly confident in those 3,000 that genesis of your question, though, really is how quickly can we identify them. I think as Kyle outlined, we obviously had clinical trial patients that we've been able to convert on to cover product very quickly. In the prelaunch phase, we were definitely very successfully engaging with our target audience and identifying FCS patients, and that's helped drive our initial uptake in the product. But in every month as more and more physicians become aware, we're finding more and more patients. And that's very encouraging for the outlook that we've got for FCS. I definitely think this is an underserved community with a very debilitated disease. And as that awareness grows, both amongst HCPs, but importantly, through a lot of the work we're doing with omnichannel, we're going to find more and more patients in the next 18 months prior to the sHTG launch. Obviously, with positive data and potential approval from the FDA. As soon as that indication expands, we'll be addressing the far larger population. The specifics of FCS become less apparent.

And price erosion?

Yes. In terms of price, we priced at the FCS launch appropriately with the 3,000 patient population out there, right? And that's how we ended up at the price point that we did and the value that TRYNGOL

Yes. Again, we're very encouraged by the TRYNGOL

The next question is from Jessica Fye at JPMorgan.

I just had a couple. Forgive me if I missed this, but was there any channel stocking for TRYNGOL

Sure. So channel stocking, Kyle, for TRYNGOL

Yes. The TRYNGOL

You want to add anything to that, Beth, as well as then talk about the revenue guidance?

Sure. I would just second what Kyle said that the team has done a wonderful job at managing inventories. And of course, with a rare disease drug like TRYNGOL

Yes. And regarding manufacturing, Jess, we have number of sources for supplying our drugs for both clinical trials as well as for the commercial launches, including South Korea, Europe and the U.S. As I mentioned earlier to one of the other questions, we're well stocked in supply already to support the TRYNGOL

The next question is from Jason Gerberry at Bank of America Merrill Lynch.

This is Chi on for Jason. Maybe just on a follow-up on TRYNGOL

Okay. Thanks, Chi. I'll take the Angelman's question as it's a brief answer, and then Kyle will take the question with respect to conversion of EAP, OLE patients and so I'll start. So the Angelman Phase III study is on track for a time on-time initiation. As a reminder, we had excellent discussions and completion of conversations with the FDA last year. We aligned on our Phase III trial design. We think we have the right trial design. We have the right drug, the right chemical platform to get the study started in the first half of this year, which means it will get started in this quarter. So very soon. We're well on our way. And what we've also said is that our expectation is to complete enrollment in 2026. So we expect to enroll fairly quickly.

Yes. Thanks, Brett. In terms of the TRYNGOL

Yes. Perhaps a little bit of color. We're definitely having success engaging with HCPs to actually find both patients that were identified prior to launch and converting them to cover product, number one. But also number two is the awareness gets out there finding new patients and becoming aware of patients that we weren't aware of at launch. So that's super encouraging in the first quarter of our launch.

The next question comes from Yaron Werber at TD Cowen.

Maybe just a couple of questions from me. This one's on WAINUA, can you give us a little bit of a sense, the Part D redesign, now that it's in effect and it's capping patients to $2,000 out of pocket. How does that going to -- do you think sort of impact uptake under Part D? And then on TRYNGOL

Yes. Let me touch on WAINUA first. Astra

Thanks, Kyle. Remember Yaron that WAINUA is now launched outside the U.S. and Europe as well. So we're expecting continued revenue growth. And based on strong patient demand, not only in the U.S. but also in other geographies as well for -- in 2025 and going forward.

Our next question is from Luca Issi at RBC Capital Markets.

This is Cassie [ph] on for Luca. And this question will be on TTR cardiomyopathy. We appreciate the early days as cardio transform has yet to read out. But were you surprised by an item not lowering pricing when they got label expansion for cardiomyopathy. And are you planning to follow the same playbook? Or is there a scenario where you compete with them by lowering the price? Any color there would be much appreciated.

Yes. In terms of [indiscernible] strategy, I wasn't too surprised by that. I believe they've got a balance of patients that are hereditary polyneuropathy patients. And I think they're trying to maintain a price in order to manage their revenues now and moving forward. And it's up to them kind of how that market evolves, I think, and what they're able to get coverage on for cardiomyopathy, I think that's yet to be determined. In terms of the strategy for WAINUA, that's ultimately Astra

The next question comes from David Lebowitz at Citi.

When you look at the core trials and the baseline AP data, I'm curious as to how the analysis in the trials will actually be carried out. Is it going to be strictly based on baseline for the overall population relative to reductions, whether it be additional studies or analysis on patients that actually had baseline AP events to reduce but over the smaller denominator. I'm curious to what's prespecified and what could possibly be accepted by the FDA for labeling consideration?

Eugene?

Yes. Thanks for the question. So certainly, the analysis of AP events, the prespecified analysis, we'll look at all events happening during the 12 months exposure in a trial and obviously comparing the active arm versus placebo. We will look at population that had a baseline or at baseline reported historical events, but that's a much smaller subgroup. So I guess, the answer is that the overall analysis will look at all events happening during the trial comparing the olezarsen patients.

And I believe, if I recall, Eugene, we'll also be looking at AP in patients above and below 80 in the analysis as well.

Right. Yes.

So we'll be carving up the AP data based on history of AP and without and so on. As far as the labeling discussions and getting AP in the label, I mean that's a data-driven outcome that we'll have to talk about with the FDA. But again, as I emphasized earlier, we believe that this is a very substantial unmet need and a very sizable market opportunity for Ionis based on triglyceride lowering. But these patients are suffering from acute pancreatitis, and we have a substantial number of patients with a history of AP enrolled in our study. So we think we have the right trial design that if we can see it, we have a potential to see it.

Yes, I'll just add, we have AP in the label now for TRYNGOL

The next question comes from Mani Foroohar from Leerink.

This is Lily Young [ph] on for Mani. First question, digging a little more into the patients and the scripts for TRYNGOL

I don't have too much additional color to add. We're not going to disclose the exact patient numbers or the percentages at this point in time. But we are encouraged the patient finding work that we've done, the identification of new patients so far, and we believe we'll be able to add incremental patients quarter-over-quarter as we move forward throughout the year. The launch is going very well, as we talked about, strong patient uptake and strong demand and good payer coverage. So I think we're in a great place.

Yes. And just to clarify, I don't think we said that the majority of patients are from the open-label extension. What we said was that we have that we have, obviously, patients in the open-label extension study from the Phase III trial, which had 66 patients in balance. And in the U.S. -- and then, of course, we're focused on the U.S. segment of that and the majority of those patients have converted over to commercial, but that doesn't necessarily represent the overall patient population that is on TRYNGOL

Yes. One thing I'll add is we're definitely finding new patients just to be transparent around that. I mean it's very difficult to seek a diagnosis for a condition where it doesn't ultimately change the treatment. So as awareness builds, clinical experience builds, there's far more motivation to see these patients, and they're definitely out there, they definitely exist.

I think we have time for one more question.

The last question comes from Mike Ulz at Morgan Stanley.

Maybe just a follow-up on olezarsen and sHTG. It looks like you narrowed the timing of that data slightly for the CORE and CORE2 studies, the 3Q from the second half previously. Just curious. Any reason behind that? And then secondly, maybe just clarify, will that initial update from those studies include the 12-month AP data?

Thanks, Mike. No, nothing really behind it, just as we get closer to the data readouts, and we get through everything we need to get through all the blocking and tackling to read out the top line data, we provide more clarity. So yes, we are -- we have provided more precision. Q2 ESSENCE data, Q3 CORE and CORE2 top line data. With respect to AP readouts, we don't expect AP in the ESSENCE study, of course, just to confirm that. These are mildly elevated patients with triglyceride, they don't have them in many AP events. This is a safety study to support these exposure database that's necessary for a highly prevalent disease in the eyes of the FDA. So really, we're focused on triglyceride lowering in that study and safety. And I just also want to emphasize that the percent reductions in triglycerides that we expect in essence is not a reflection of what we would expect in CORE sHTG and that's because these patients are only mildly elevated. So we get good -- we're expecting good substantial reductions in TGs, but not to the magnitude of what we would expect in CORE. In the top line data for CORE and CORE2. We're still working that out, whether we will have the AP data in time for that top line data, but we'll be focused on there principally triglyceride reductions and safety for CORE and CORE2. And if we have the AP data at that time, we will certainly share it in our top line announcement later this year. So thanks for the question, Mike. Thanks, everybody, for participating in all the great questions. I'd like to really emphasize that looking forward, we're excited about building on our momentum throughout the year and sharing our additional achievements with all of you along the way. So thanks again for participating, and we'll talk soon. Have a great day.