IONS - NASDAQ

Good morning, and welcome to Ionis' Fourth Quarter and Full Year 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, Keith. 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 we will be discussing today, including a reconciliation of 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 to accompany today's call. With me on the call this morning are Brett Monia, our Chief Executive Officer; Holly Kordasiewicz, Chief Development Officer; Kyle Jenne, Chief Global Product Strategy Officer; and Beth Hougen, Chief Financial Officer. Eugene Schneider, Chief Clinical Development Officer; and Eric Swayze, Executive Vice President of Research will also join us for the Q&A portion of the 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 consult the risk factors contained in our SEC filings for additional detail. With that, I'll turn the call over to Brett.

Thanks, Wade. Good morning, everybody, and thanks for joining us today. 2025 was a defining year for Ionis, marked by the successful execution of our first 2 independent launches and multiple positive data readouts across our rich pipeline. These achievements, together with our expectation for multiple additional value-driving events this year positions Ionis for continued success through 2026 and beyond. TRYNGOL

Thank you, Brett. I'm honored to lead our world-class development team, which has recently delivered multiple concept data readouts. I've had the privilege of working closely with many members in the development team over the years, and I look forward to building on that strong foundation. Looking ahead, our focus remains on innovation and ensuring strong execution to enable Ionis to continue delivering a steady cadence of transformational medicines to people with serious diseases for years to come. Olezarsen is a clear example of our leadership in discovering and developing transformational medicines. The ground breaking Phase III data generated from the CORE and CORE2 trials position Olezarsen to a new standard of care for the broad sHTG patient population. As previously presented and published, our pivotal studies evaluated Olezarsen and people with sHTG who had triglyceride levels substantially higher than the 500 mg per deciliter despite being on standard of care with the lowering therapies that they find, putting them at risk of life-threatening acute pancreatitis. In CORE and CORE2, olezarsen demonstrated highly statistically significant and clinically meaningful mean reductions of up to 72% and placebo-adjusted fasting triglycerides at 6 months, the primary end point. Olezarsen also significantly reduced acute pancreatitis events, making it the first and fully treatment to achieve this positive outcome in people with sHTG. Olezarsen achieved a highly statistically significant 85% reduction in adjudicated acute pancreatitis events. It's important to remember that the main goal of triglyceride management in sHTG is to prevent AP attacks and olezarsen is the first medicine to demonstrate it can do just that. This remarkable reduction in AP attack rate was also reflected in the number of patients needed to treat to prevent a potentially fatal pancreatitis attack. Just 4 patients needed to be treated with olezarsen for only 12 months to prevent 1 AP attack in the highest risk subgroup. For context, statins used for primary prevention have a number needed to treat in a range of 500 to 100 to prevent 1 cardiovascular event over 5 years. We believe these unprecedented results position olezarsen to meet the substantial unmet need of people with sHTG. We submitted the sNDA at the end of 2025 and it is currently within the FDA filing review period. We requested priority review and expect a decision from the FDA shortly. As Kyle will highlight, launch preparations are already well underway, and we look forward to bringing olezarsen to people with sHTG later this year. In addition to olezarsen, we're poised for another independent launch later this year. We plan to bring to zilganersen to patients with Alexander disease an ultra-rare leukodystrophy that profoundly impacts patients and families who today have no approved disease-modifying therapies. Our positive Phase III results for zilganersen mark the first time any therapy demonstrated a disease-modifying impact in this condition. We recently submitted our NDA based on these groundbreaking data. In the interim, we have initiated an expanded access program to provide eligible patients with access to zilganersen while the review is ongoing. We expect zilganersen to be the first of the numerous additional independent launches from our leading neurology pipeline. Underscoring Ionis' ability to consistently translate scientific leadership into important medicines for our patients. Turning now to our Phase III program for Obudanersen, previously referred to as ION582, our investigational medicine for Angelman Syndrome. Late last year, we received breakthrough therapy designation from the FDA. In recognition of Obudanersen promising mid-stage data and the serious unmet need in this disorder. Angelman Syndrome is a rare neuro developmental disorder that causes profound and lifelong physical and cognitive impairment. Estimated effect more than 100,000 people globally. Obudanersen is advancing in the Phase III REVEAL study with full enrollment expected this year and data next year. In addition to zilganersen and obudanersen, we have a rich neurology pipeline advancing in development, including ION464 for multiple system atrophy and ION717 for Prion disease. We're evaluating both investigational medicines and ongoing studies in patients. Based on the data generated to date, we're encouraged by the level of target engagement in the safety and tolerability profile. As a result, we plan to add additional dose cohort student programs to fully explore the therapeutic potential of these medicines. With these expansions, we now expect to report data from both programs next year. As we look to key upcoming events, in addition to those highlighted by Brett, we're looking forward to the anticipated approval of high-dose SPINRA

Thank you, Holly. With a strong first year for TRYNGOL

Thank you, Kyle. 2025 was a defining year for Ionis across our business, resulting in our impressive financial performance. We exceeded our guidance across all metrics through exceptional execution and disciplined financial management. This performance was underpinned by accelerating revenue growth from our marketed medicines, alongside sustained progress across our pipeline. We generated $944 million in revenue in 2025, representing a 34% increase year-over-year. Revenue was split between commercial products, which generated $436 million or 46% of our total revenue and R&D collaborations, which generated $508 million or 54% of our total revenue. These results underscore the value of our diversified revenue streams. Our marketed medicines provide growing recurring revenue and increasing operating leverage. While revenue from R&D collaborations acts as a financial accelerator. Together, our diversified revenue streams mitigate risk, enhance financial flexibility and create multiple pathways to sustained growth. 2025 was a strong first year for the TRYNGOL

Thank you, Beth. 2025 was indeed a defining year for Ionis. We successfully transitioned into a fully integrated commercial stage company. Our first 2 independent launches were initiated, highlighted by TRYNGOL

[Operator Instructions] And this morning's first question comes from Yaron Werber with TD Cowen.

Congrats really a lot of solid progress. Maybe just one question, Beth, for you on the guidance. I mean, so it sounds like you're not -- your guidance right now is not assuming any sHTG sales. You're assuming really not a lot of new royalty income from all the potential milestone payments and you're expecting that TRYNGOL

So let me kind of -- there were a few things in there, so let me see if I can break it all down. So we are assuming sales and revenue from olezarsen in the sHTG patient population. But with the assumption of standard review, that would be in really just the fourth quarter of the year. So it will be a FCS driven revenues for TRYNGOL

And as it relates to pricing for this year, we are continuing to actively engage with payers. Obviously, those are confidential discussions. But really, what we want to make sure first and foremost is that we continue to ensure broad access for TRYNGOL

Yaron you had a question about...

Yes. Just on the cardio transform as we're now beginning to really kind of focus on that next everybody. Can you give us a sense of what percentage of patients are honest, a stabilizer at baseline because it was mostly an add-on strategy? And maybe what percent will only be on WAINUA alone essentially head-to-head against placebo, if you can, any color.

I'll start. Eugene, please jump in if you want to add anything. So Yaron what we've been saying and is playing out very nicely is that we have a good balance at baseline of patients not on stabilizer tafamidis versus patients on tafamidis at baseline. It's not quite 50-50, we have more patients on tafamidis than naive at baseline, but it's well balanced. It's not capped, but we do not have -- but that's where we ended up. We have had some drop-ins during the course of the study, but it's not meaningful. It hasn't been that many. And we are working on a baseline presentation. We don't know the timing of that presentation yet. But we are working on it, and we'll be able to share that data hopefully at some point soon. Eugene, anything more to add?

No, great one Brett.

And the next question comes from Salveen Richter with Goldman Sachs.

Just maybe help us understand what you're seeing for reimbursement in FCS given the competitors' lower price. And then just help us understand kind of this end pricing dynamic between the competitor and yourselves for sHTG and how that would essentially provide broader population access for yourselves. But I'm just trying to understand how to think about the differential there.

Yes. So let me first say, again, what a strong year that we had last year, $108 million in total, $50 million in Q4, a 56% increase quarter-over-quarter. We continue to see very, very strong patient demand, even as we kick off 2026. So there's been no meaningful impact from a competitive standpoint, and we continue to have very broad access for our patients in FCS today. The work is ongoing. The goal that we have, as I mentioned, is to maximize the value, so the highest price possible, but also provide the broadest access possible when we get to sHTG. So we're having the right conversations today. We're leading the way with payers in those engagements. We did a great job in 2025 to execute that. We're doing the same in 2026. But it will take us a little bit more time before we complete the conversations and our research with the payers so that we come to a final decision on pricing.

And I'll just add to that, Salveen, again, as Kyle mentioned in his prepared remarks, we've had no meaningful impact of a new market entrant on the demand for TRYNGOL

And the next question comes from Jason Gerberry with Bank of America.

This is Chi on for Jason. I want to go back to a comment that you made, Kyle. You said you -- obviously, you guys have recently increased the peak revenue for olezarsen to over $2 billion. And I recall is based on higher volume assumption. And today, Kyle, you mentioned you're even more confident in the blockbuster opportunity. Is it more confident in hitting that $2 billion number? Or is it more confident in hitting a potentially higher peak number? What drove the higher confidence? Is it based on any reason research? And is it high assumption on price or volume? And if I may squeeze in a quick one on the second question. I wanted to ask about ION532, which was licensed to Astra

Yes. On the $2 billion, Chi, we shared this last month, we had these conversations. That $2 billion is really based on the strength of the product profile and the positive Phase III data. In addition to that, we've done extensive prescriber demand research, and that's what drove us to increase to greater than $2 billion. I think what's increasing our confidence is the strong underlying demand trends that we're seeing that I just explained, not only ending last year, but also that are continuing here early in 2026.

And your second question, Chi, I'll take is really best ask for Astra

And the next question comes from Michael Ulz with Morgan Stanley.

Congratulations on all the progress as well. Maybe just one related to the sHTG filing. Just wondering if you can give us any color on any recent FDA interactions there? And then secondly, has your thinking on the potential for a priority review changed at all recently?

I'll start with the second one and I'll ask Eugene to talk about how things are going. So for priority review, we can't speak for the FDA, but we believe that based on the unmet medical need and the compelling product profile, for olezarsen and sHTG that it deserves priority review designation, but we're in that window, we're in that evaluation window right now. And of course, again, I will remind you, we did receive breakthrough therapy designation. As far as regulatory interactions been on track, right?

So far, so good. It's early days, of course, as you said.

Yes. We're within that window, Mike.

And the next question comes from Luca Issi with RBC Capital.

I don't want to maybe just double down here on this prior review versus standard review. I think in the past, you came across as pretty confident about prior overview, but obviously, you're now guiding assuming a standard review. So just wondering kind of hinting has changed? Or maybe this is just kind of standard conservatism? Like any thoughts there, I'd be much appreciated. And then maybe on Angelman, Holly, I think when I go on clinicaltrial.gov, I don't see any European sites there for your program, I think, except for the U.K., so versus, I think, your competitor Ultragenyx has many European sites. So is that because the European regulators prefer sham controlled trials? Is that a placebo-controlled trial? Or is that kind of more complex than that? Any thoughts much appreciated.

I'll let Holly address the Angelman in a moment, Luca. But as far as priority review, there's not really much more to add beyond the answer that we described from the previous question. We're in the evaluation period by the FDA. We submitted our supplemental NDA late last year. We're in that window. We believe the medicine deserves priority review, but we can't speak for the FDA. And the FDA usually takes the time that they need to draw a conclusion and I think we'll just leave it there. And as far as assuming standard review for guidance, we think that's the responsible thing to do at this stage. As Beth mentioned, we will adjust guidance if we receive priority review, and we'll inform everybody. Holly?

For Angelman, you hit on it. So we have submitted to Europe. We're waiting to hear back from them for that and we need that approval of spending forward with those sites. But we do plan to open up sites in Europe as soon as that approval comes through.

And the next question comes from [indiscernible] with Guggenheim Securities.

This is Moritz on for Debjit. First, a quick follow-up on TRYNGOL

On the pricing question, we're finalizing the payer research. We'll provide those details once we finalize everything and get that out. But 20,000 net is what we had assumed in the greater than $2 billion peak sales revenue number that we've been using. So that's still consistent. We haven't updated that at this point in time.

And as far as the BBB work, it continues to go exceptionally well. I think as we mentioned previously, we selected our first BBB wholly owned molecule that's now in manufacturing. It does utilize the VHH technology. We're making great progress on bicycle as well for BBB overcoming the BBB for CNS diseases. We anticipate initiating IND supporting toxicology studies later this year for the VHH BBB molecule. And although we have not laid out definitive plans yet, I expect you'll get an update in the second half of this year on where we are with our BBB strategy.

And the next question comes from Joseph Stringer with Needham & Company.

A quick one on the GSK partnered HBV program. When can we see functional cure rates from the Phase III program? And what are your GSK's expectations for potential peak sales as a functional cure? And maybe more directly, what net revenue assumptions to Ionis are baked into your projected peak royalty revenues from this partner program.

Yes. Sure. Beth will take the peak sales estimates because I can't keep them all straight from our partners and the revenue what they're projecting. But as far as the presentation, yes, the data is will impress. The data shows it's unprecedented functional cure rates in this massive patient population with very high unmet medical need, millions of people. And GSK plans to present the data at EASL in May, the European Association for the Study of the Liver. And what they've said is that the functional cure rates are clinically meaningful. Beth?

So GSK has talked about peak sales in the about USD 2.5 billion range. We've got a royalties that go from 10% to 12% in addition to the regulatory milestones, many of which we anticipate earnings this year as they move through the regulatory filing acceptance and approval process in multiple countries. So we've baked their peak sales estimate with our royalty tiers 10% to 12% into our overall peak royalties from -- from sorry. We've baked their peak sales and our royalties into our estimated peak royalties, which are about, I think, several billion dollars.

Next question comes from Andy Chen with Wolfe Research.

So I know you talked about Alexander quite a bit today. So just curious how fast that ramp would be or how big the eventual opportunity would be? And if you can compare the opportunity to other rare diseases, such as DAWN

I'd let Holly just talk about what she's hearing from the community first with

Just quick to remind everybody, last year, we read out our Phase III study, and we hit statistical significant clinical meaningful differences on our primary endpoint, which is a motor functional test. And then we also, in key secondary endpoints had favorable results all favoring

Yes. And related to the launch, there are approximately 300 people living with Alexander disease in the United States today. We believe that about 50% of those have been identified. There are about a dozen or so major leukodystrophy centers that we'll focus on at the launch. So we can do that with a very modest-sized team. Our medical affairs group is already out. We have a neurology-focused group that's been working in this area for quite some time, that and on other programs that we have. We'll add some account specialists and then some of our patient education managers to help the reimbursement and transition on to treatment and keep patients taken care of, et cetera, through the process. We have guided to greater than $100 million in peak revenue for this program. And we'll work on that launch later this year with an expected approval sometime towards the fourth quarter. We'll get the team in place and get launched. And so it will be modest this year and then grow into 2027.

The

And the next question comes from Akash Tewari with Jefferies.

This is Manoj on for Akash. Just one from our end. Can you provide some color on your expectations around the upcoming HORI

Yes. I'll let Eric talk about the next gen and why we're so excited about its profile. With respect to the HORI

Yes, sure. Because we believe in the market opportunity and the indication and that lowering LP(a) can give value for patients with cardiovascular disease. Some years ago, we started looking for drugs that extend the dosing interval. And that really was the goal of our program was to extend the interval of dosing. We've been working with siRNA technology for some time now. We recently reported some nice positive data on ION775 with siRNA that extends dosing frequency in -- for lowering ApoC-III and triglycerides in humans. And we've been making equal better progress on LP(a) with our siRNA platform. Goal is to get it to 6 months extended dosing or perhaps a year depending on how the drugs perform. We're very encouraged by the ION775 performance. And preclinically, the LP(a) siRNA looks better. So hopefully, we can demonstrate that in humans soon.

We have several programs coming forward into the clinic that are offering strong durability twice a year, once a year dosing 775, of course, is the olezarsen follow-on for ApoC-III, we reported data last year in Phase I. It looked excellent, and we're going to be in sHTG patients in Phase II this year. And we believe that, that will be replicated with the pelacarsen follow-on, which is now in IND supporting toxicology studies.

And the last question comes from Jay Olson with Oppenheimer. Oppenheimer has dropped off the line. That does conclude the question session. So I would like to turn the floor back over to Brett Monia for any closing comments.

Great. Thank you for all the great questions. Thanks for everybody's participation. Obviously, we are incredibly proud of the pivotal year we had in 2025 for Ionis, and we're building on that momentum to set us up for an even more pivotal, more exciting year for Ionis in 2026. We've already achieved a great deal and we're well positioned to achieve a great deal more. And with that, we'll close the call. Thank you again for your participation. We look forward to providing further updates throughout the year. Goodbye for now.