Wade Walke - Investor Relations Stan Crooke - Chairman of the Board & Chief Executive Officer Beth Hougen - Chief Financial Officer Brett Monia - Chief Operating Officer Damien McDevitt - Chief Business Officer.

Tyler Van Buren - Piper Jaffray Ben Burnett - Stifel Chad Messer - Needham & Company Gena Wang - Barclays Jessica Fye - JPMorgan Yanan Zhu - Wells Fargo Vincent Chen - Bernstein Ritu Baral - Cowen & Company Yale Jen - Laidlaw & Company David Lebowitz - Morgan Stanley.

Good morning, and welcome to the Ionis Pharmaceuticals Third Quarter 2018 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, Vice President, Investor Relations to lead off the call. Please begin..

Thank you, Cole. Before we begin, I encourage everyone to go to the Investor section of the Ionis website to find our press release and the related financial tables, including the reconciliation of the GAAP to pro forma financial measures that we will discuss today.

We believe pro forma financial results better represent the economics of our business and how we manage our business. We have also posted slides on our website that accompany our discussion today.

With me on the call are today are Stan Crooke, Chairman of the Board and Chief Executive Officer; Beth Hougen, Chief Financial Officer; Damien McDevitt, Chief Business Officer; and Brett Monia, Chief Operating Officer.

I would like to draw your attention to slide three which contains our forward-looking language statement which we'll be making today, forward-looking language statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially.

I encourage you to consult the risk factors discussed in our SEC filings for additional details. And with that, I'll turn the call over to Stan..

Thanks, Wade, and good morning, everyone. Thanks for joining us. In the third quarter, we achieved a number of important milestones, and in the aggregate that results in continued financial strength for the Company.

We're on track for our third consecutive year of pro forma operating income, and we're doing this while launching TEGSEDI and preparing to launch WAYLIVRA. Our solid financial performance results from more sources of revenue including growing SPINRAZA revenue on top of our substantial base of R&D revenue from numerous successful partnerships.

With the TEGSEDI launch under way, we look forward to adding commercial revenue from this drug and potentially WAYLIVRA. We expect SPINRAZA sales to continue to grow globally, given the positive new data Biogen reported from the nature study in pre-symptomatic infants.

We also expect to see continued growth in key patient segments such as the adult patients in the US which make up 60% of the SMA population, with only a fraction of those patients now being treated.

Positive impact of SPINRAZA has now been recognized with several Prix Galien awards around the world, and was also recently recognized again by the scientific community with the awarding of the breakthrough prize in life sciences to Frank Bennett, our SVP of Research and Head of Neurological Disease Franchise. Frank shared this honor with Dr.

Adrian Krainer of Cold Spring Harbor Laboratory.

The TEGSEDI launch is now under way in multiple countries, and we and our affiliate Akcea are encouraged by the continuing enthusiasm we are seeing from the amyloidosis community for this drug with strong team, the necessary infrastructure and global strategy in place, we are confident in Akcea's ability to successfully launch TEGSEDI.

With WAYLIVRA, we and Akcea are in active discussions with EMA, and we continue our conversations for path forward with the FDA. All of these review processes are progressing.

Our EAP program is going well, and we continue to work to bring all the patients with FCS, the first-ever treatment of this ultra-rare, debilitating and potentially fatal disease.

In the Phase 2 study of AKCEA-APO(a)-LRx, the drug demonstrated substantial dose-dependent reductions in a Lp(a) in patients with established cardiovascular disease and elevated Lp(a). We also observed the favorable safety and tolerability profile. We're very encouraged by the drug's performance using convenient low-volume monthly doses.

We and Akcea, along with our partner Novartis, now have what we need to select a dose and advance the drug into a large cardiovascular outcome study to demonstrate the cardiovascular benefits of lowering Lp(a), genetically validated driver cardiovascular disease affecting millions of patients worldwide.

Phase 2 study of APO(a)-LRx is the largest and the longest study of a LICA drug today, with nearly 300 patients dosed up to 12 months. Robust target reduction and favorable safety and tolerability profile observed in this study adds to our confidence in the potential of LICA drugs to treat a broad range of diseases with convenient dosing regimens.

Roche expects to initiate the Phase 3 program for IONIS-HTTRx in patients with Huntington disease before the year-end, including a pivotal study and a natural history study. Building on our successful relationship with Roche, we entered a new collaboration to the development of Ionis factor B LRx.

For the treatment of patients with a broad range of complement-mediated diseases beginning with geographic atrophy, the advanced stage of dry age-related macular degeneration.

We believe Roche is the right partner to maximize the potential for success of this program, and the substantial level of participation we retain in the drug's commercial success is another example of the strong value of our antisense platform.

Beyond these important highlights, we've had numerous other pipeline achievements which not only contribute to our significant financial strength, but more importantly show that important new drugs we are advancing closure to patients who desperately need it.

Our focus remains on delivering innovative new medicines to patients in need, while positioning the Company for continued growth. I'll now turn the call over to Beth..

an increase in the number of partnerships, an increase in partnered program and larger payments as partnered programs advance. Let me give you some examples. First, our R&D revenue increases as the number of collaborations we have increases. We recently entered into a second collaboration with Roche.

Under this collaboration, we received a $75 million upfront payment. Together with Roche, we will be conducting a Phase 2 study in patients with geographic atrophy. Therefore, we will be amortizing the upfront payment over the course of the study beginning in the fourth quarter.

We currently have 13 collaborations with large pharmaceutical companies, a number that has more than doubled over the last six years. Second, we are progressing more and more programs under our successful collaboration. For each program we advance, we are eligible to earn milestone payments and license fees.

We currently have 22 partnered programs, a number that has nearly tripled since 2012. In 2012, we earned $51 million of revenue related to license fees and milestone payments. That's compared to over $135 million in license fees and milestone payments we have earned so far this year.

Third as our partnered programs advance, the dollar amount we earn for milestone payments and license fees increases, reflecting the increase in value of the advancing program. For example, when we initiated the Phase 1/2 study in Huntington's patients, we received a $22 million milestone payment from Roche to help fund our cost to conduct the study.

When Roche doses the first patient in the pivotal study, we will earn a $35 million milestone payment. Importantly, the $35 million will be all profit to us since Roche will be conducting the study. In summary, we are sustainably profitable and cash accretive with a manageable expense structure.

Our growing commercial revenues together with our substantial base of R&D revenue, positions us to finish 2018 in a strong financial position and sets us up for growth in 2019. With that, I'll turn the call over to Damien to provide a commercial update..

Great. Thank you, Beth. Good morning, everyone. While it is early days in the TEGSEDI launch, we are pleased with the progress the Akcea team is making to get TEGSEDI to the patients in need in the U.S., EU and Canada. While we are not providing sales guidance today, we and Akcea will keep you updated on how the launch is going.

TEGSEDI was recently approved in the U.S. with a broad label for treatment of polyneuropathy of hATTR amyloidosis in adults, regardless of stage of disease. Akcea's patient support program has launched and is enrolling patients.

AKCEA CONNECT was built to support patients through every step of their treatment journey, dedicated nurse case managers guide patients in establishing their monitoring routine as part of the REMS program, help navigate insurance coverage options, provide home injection training and more.

And together with Akcea's lab service partner Quest, patients have the option for at-home services. Akcea's U.S. field team is making good progress in connecting with treating physicians and we are pleased that the first prescriptions have been received.

In addition, the TEGSEDI market access team is well along with their efforts to partner with payors. Importantly, the team is working with those payors who cover the majority of lives in the U.S.

to develop the strategy that best fits the goals and the patient population they serve while ensuring that financial barriers did not negatively impact patients in need. Akcea's specialty pharmacy Accredo has experienced in supporting this unique need of rare disease communities helping to simplify access to therapy.

Today, Accredo has been certified into the REMS program and is ready to assist patients. Accredo has a team of specialty clinicians, pharmacists, and over 600 field-based nurses located throughout the US, who will augment the Akcea connect team of nurse case managers to provide support and address the needs of the hATTR community.

In Germany, patients are now receiving TEGSEDI in the commercial setting. Akcea's goal is to ensure that patients who need TEGSEDI have access to this. To accomplish this goal, Akcea is working to make TEGSEDI available to patients across numerous countries in the EU as quickly as possible.

Additionally, Akcea Connect is rolling out in the EU to provide the optimal level of support for patients in each country. In Canada, Akcea Connect is in place and we look forward to delivering the first drug to treat polyneuropathy caused by hATTR amyloidosis to these patients.

Given TEGSEDI's robust efficacy and simple self-administration, we believe TEGSEDI will be the treatment of choice for people with hATTR and their physicians. Beyond the US, EU and Canada, we and Akcea look forward to PTC Therapeutics moving TEGSEDI forward in Latin America.

We are also looking to expand beyond these initial regions as part of our strategy to enable global access to TEGSEDI. This weekend, at the International Society for Pharmacoeconomics and Outcomes Research meeting, Akcea is presenting more detailed analysis from the neuro TTR study demonstrating TEGSEDI's positive impact on patient's quality of life.

These analyses look at TEGSEDI's effect on patient's ability to complete day-to-day activities, as well as positive changes in physical and mental health. Now turning to WAYLIVRA. In the EU, our review process is ongoing. In the US and Canada, we plan to work with regulators to confirm a path forward.

As Akcea continues to work to bring the first ever treatment to patients with FCS, the EAP program is ongoing and Akcea is prepared to launch in the EU as quickly as possible assuming approval.

In addition, Akcea is making progress with patient identification with a focus on diagnosis which provides support for our estimate of 3,000 to 5,000 FCS patients worldwide. Now, over to Brett, to review key highlights from our pipeline..

Thanks, Damien. So, we achieved several additional successes since our second quarter update that I'll now review briefly, and we look forward to providing a detailed update at our Investor Day next month. Biogen recently provided an exciting update from the NURTURE study in pre-symptomatic infants with SMA.

As of May 2018, all patients in this study were alive without the need for permanent ventilation, all were sitting independently, and nearly all were able to walk. And importantly, every participant in this study has continued to make progress and achieved milestones more consistent with normal development.

These long-term data provide further evidence that early diagnosis of SMA in treatment with SPINRAZA can fundamentally alter the course of this disease for pre-symptomatic infants and adds to the body of evidence supporting SPINRAZA as it would be standard of care for all patients with SMA.

Shifting gears a bit, in the Phase 2 study of AKCEA-APO(a)-LRx, patients with established cardiovascular disease in elevated Lp(a) levels achieved dose-dependent reductions in Lp(a) with most patients in the active group attaining levels below the established threshold of risk for cardiovascular disease.

Additionally, APO(a)-LRx demonstrated a favorable safety and tolerability profile consistent with our other LICA drugs. As is well documented, elevated Lp(a) levels is a driver of cardiovascular disease that affects millions of people worldwide.

It cannot be controlled with lifestyle modifications such as diet or exercise, and there are no approved therapies that specifically target and reduce Lp(a) levels.

The Ionis and Akcea team with our partner Novartis are now preparing for an end-of-Phase 2 meeting with the FDA followed by the potential initiation of a large cardiovascular outcome study which will be designed to demonstrate the cardiovascular benefits of lowering Lp(a) levels in patients with established cardiovascular disease.

Novartis, of course, is highly experienced in conducting large CV outcome studies, and they have been actively preparing to initiate the study once they exercise their option. And importantly with royalties up to the low 20% range, we retain significant value in the commercial success of the drug.

We look forward to presenting additional data from the Phase 2 study this Saturday at AHA and at our Investor Day next month. Shifting attention, our partner AstraZeneca recently reported positive Phase 2 data for danvatirsen, our STAT3 inhibitor at this year's ESMO conference.

In combination with durvalumab, AstraZeneca's PD-L1 blocking antibody in recurrent metastatic head and neck cancer treatment resulted in 7% of patients achieving a complete tumor response and 23% achieving either a partial or a complete tumor response.

This response rate is estimated to be double that of durvalumab alone, based on previous studies in this difficult to treat patient population. And our partnership with Roche continues to go well also. Roche announced the study design for the IONIS-HTTRx pivotal program which they plan to initiate before the end of the year.

Working closely with regulators, Roche has designed a highly innovative pivotal study to generate a robust data set. We get this important medicine to people with Huntington's disease as rapidly as possible. The program will include two studies with patients beginning to enroll by early 2019.

The first study is a Phase 3 study which will be the world's first to measure the effect of a drug that will directly reduce the amount of the protein that causes Huntington's disease in patients. This three-year study will evaluate long-term safety and efficacy in up to 660 symptomatic Huntington's disease patients around the globe.

The second study is a 15-month natural history study in up to 100 symptomatic patients designed to further our understanding of the correlation between changes in new huntingtin protein and clinical measures.

As a reminder, IONIS-HTTRx is the first and only drug to demonstrate a substantial lowering of the new huntingtin protein [Indiscernible] in clinical benefit in patients with Huntington's disease which together support the drug's potential to slow or perhaps half disease progression.

As Stan mentioned, we've recently built upon our successful relationship with Roche with a new collaboration for the development and commercialization of Ionis FPL or actually for the treatment of people with a broad range of complement-mediated diseases beginning with geographic atrophy, the advanced stage of dry AMD.

As a reminder, for each product in our pipeline, we see the commercialization strategy that maximizes the drug's commercial success while optimizing our participation in that success.

When partnered with IONIS-FB-LRx requesting for development of drugs for renal disease and particularly geographic atrophy is complex and requires specialized experience. Roche has a substantial development infrastructure and experience in developing and commercializing medicines for renal diseases.

Furthermore, Roche is prepared to pursue additional complement mediated disease indications well-suited for IONIS-FB-LRx. Importantly, with royalties of up to 20% we participate substantially in the commercial success of this drug.

And in the coming months, we look forward to showing more of the data we have generated from our LICA programs, our other LICA programs, in clinical studies, and publishing the full integrated safety database for these LICA drugs which are performing exceptionally well.

In clinical studies, our LICA drugs had demonstrated increases in potency of 30-fold or greater enabling low volume and less frequent dosing. We've also reserved good safety and tolerability potent target production.

These results are consistent with those observed in the Phase 2 study of our APO(a)-LRx drug in nearly 300 patients treated for up to a year. Finally, we have had many additional achievements since our second quarter update.

We completed our enrollment of a Phase 2b study of IONIS-FactorXIRx in patients with end-stage renal disease on dialysis and initiated a Phase 1 study of the LICA version IONIS-FactorXI-LRx both with data expected in the second half of 2019.

AstraZeneca initiated a Phase 1 study of our first generation 2.5 LICA drug to enter the clinic IONIS-AZ4-2.5-LRx, which is one of the three drugs in development under our highly productive cardiometabolic renal disease collaboration with AstraZeneca.

And Biogen initiated a Phase 1/2 study of IONIS-C9Rx, our second familial ALS drug which is in addition to IONIS-SOD1Rx, which is in a Phase 1/2 study in familial ALS and patients with SOD1 mutation with data expected in Q1 2019. As shown on this slide, we successfully completed many key milestones this year.

In the fourth quarter and into 2019, we're looking forward to numerous important catalysts including several regulatory decisions, data readouts and study initiations. We also look forward to discussing many of these events at our Investor Day in December. And now, I will turn the call back over to you, Stan..

Thank you, Brett. So, the third quarter was another very strong quarter for the Company. We continue to demonstrate the power of the financial model that we built with continuing financial strength even while launching TEGSEDI and preparing the launch of WAYLIVRA.

So, we are -- we continue to be substantially profitable and we believe we are positioned for continued growth. We believe WAYLIVRA demonstrates a positive benefit/risk profile for patients suffering with FCS with no therapeutic options. Regulatory process continued in the EU, and we are in conversations with the FDA and Canadian authorities as well.

Akcea is ready to launch WAYLIVRA as quickly as possible once we have approval in the EU and other territories. We have a number of near-term value drivers including plans to initiate at least three pivotal studies before the end of the year.

These are programs with the potential to change of course fatal genetic diseases, such as Huntington's disease, TTR amyloidosis, as well as diseases that affect millions of patients such as Lp(a) driven cardiovascular disease.

We also have multiple mid-stage programs in a number of therapeutic areas that we're excited about which have the potential to drive longer-term growth. We look forward to discussing more about these programs as they progress. With that, I'll turn the call over to Cole to set us up for Q&A.

Cole, would you please set us up?.

[Operator Instructions] Our first question comes from Tyler Van Buren with Piper Jaffray. Please go ahead with your question..

I guess, the first one was with respect to the TEGSEDI REMS program, specifically regarding logistics for docs who aren't I guess as familiar with the REMS programs how easy is it going to be for them to sign up? What specifically do they have to do? How are you guys helping them? And how long could that take? I noticed that some of the questionnaires online are actually quite simple with less than 10 questions, but just wanted to better understand that process..

Yes. So, this is why we've set up Akcea Connect to help physicians and patients work through the paperwork associated with the REMS program. So, as you spotted, it's very straightforward going through these paperwork. And to date, there's been no issues. We've had physicians and patients certified through REMS and registered on Akcea Connect..

Just to add to that Tyler, I actually went through the process myself, and so there was a lot of effort at reducing the burden everywhere on the patient, on the physician and the physician's office. And so I feel very, very uncomfortable with how easy it is to enroll in the program that Akcea has put together.

I think it's quite an exciting advance in managing these processes..

Are you able to say how many doctors are certified on the REMS or how many patients are on the REMS?.

No, we're not providing numbers. We have had patients and physicians certified to-date, but we're not giving out the exact numbers at this point..

We're encouraged by what received. We're encouraged by what received..

And the second question was with respect to the platelet monitoring.

I guess, I'm assuming that the samples need to be taken by a nurse and that the patient can't do it themselves, or maybe you can correct me if I'm wrong, but specifically and logistically, how will it happen? How long will it take? And if someone is on a business trip how would you get their platelet levels monitored on a weekly basis?.

So, the platelet monitoring will happen, the blood draws will be done at home, and with nurses, and so does that help..

So, platelet monitoring is designed so it will be as convenient as possible. We'll go where the patient wants us to go. The patient is near a lab and they prefer going in and getting their blood drawn there.

Great if they are traveling, why, of course, there are clinical laboratories everywhere, and a set up so that the patient can go there and get the job done. And of course we're providing the opportunities to have the platelets determined or blood drawn in, in the home as well. At least, once a week, it's over in a matter of just a couple of minutes.

It's rapid easy. Certainly, speaking for myself, I would rather do that and go to an infusion center and spend a day getting an IV infusion..

I guess if you're having nurses go to the patient's home or if they're on a business trip and wherever location they are, don't you guys have to have a lot of nurses on staff or be plugged into some large network? Just I guess curious to hear a little bit about that..

Yes. So, when we are plugged into the large network and through Accredo, there are 600 nurses on staff throughout the US. So that's fairly large network available..

And Quest. Of course, we have a partnership with Quest, so that there's a lab. It's not Starbucks, but it's almost Starbucks, except the lines are shorter..

And our next question comes from Paul Matteis with Stifel. Please go ahead with your question..

Hi, thank you, this is Ben Burnett on for Paul Matisse. Just a question on the SOD1 program, the upcoming readout here.

Can you discuss what level of knockdown you would constitute as sufficient as supportive of advancing the program? And then I guess secondly, are you able to speak to the level of enrollment to the extension study? And I guess, can you just remind us of the regulatory path forward for this assuming positive data in 2019?.

I will take that call -- that question. So, as I think you inferred, we can measure SOD1 levels. We validated SOD1 levels in the CSF much like we did for the Huntington program, where we were able to demonstrate market reductions in the CSF for Huntington. So that will be part of the clinical study.

It's a three-month study in patients with symptomatic ALS with SOD1 mutations. And based on a pre-clinical data, we can -- that reductions on the order of 30% to 50% much like Huntington have shown significant benefit in animal models of SOD1 ALS.

In fact those types of reductions have shown complete halting of disease progression in SOD1 animal models. Regarding the study, the study is enrolled. And we're looking at data readout in the first quarter of next year. And as for regulatory path, it's hard to say, how we see the data.

But as I mentioned, the study design is very similar to the Huntington study. And as you know, the Huntington study went from Phase 1 to pivotal Phase 3 study. So, it's not outside the wrong possibility that based on the data that comes out, Biogen would move in that direction..

And our next question comes from Chad Messer with Needham & Company. Please go ahead with your question..

I have one on danvatirsen, the STAT3 program.

What can we expect from that next maybe in terms of other indications? And any idea when that might join the ranks of Phase 3 along with some of the other programs?.

Yes, our immuno-oncology program -- our oncology program in general is really showing a lot of great potential. Our STAT3 leads the way. It was our first-generation 2.5 molecule to enter the clinic.

And we've recently with AstraZeneca recently reported very encouraging results as I highlighted in the script in the presentation we just gave in patients with refractory head and neck cancer in combination with durvalumab.

That study -- that drug in that combination has also now started a steady non-small cell lung cancer, so that's another indication to your question, and bladder cancer. And AstraZeneca is exploring other oncology indications produced for this program.

AstraZeneca is collecting more and more data in this study, in the second line refractory study, as well as in first line head and neck cancer patients in combination with durvalumab.

And over the next few months, they're planning to make a decision on the next stage of development for the program in the head and neck cancer which could certainly be a pivotal study..

And our next question comes from Gena Wang with Barclays. Please go ahead with your question..

One question regarding SPINRAZA, I know the World Muscle, NURTURE data was very impressive.

Just wondering what will be the next step to expand label to the pre-symptomatic patients? And then a very quick question regarding the WAYLIVRA, any plan for the FDA regulatory path for the next step?.

Thanks. The SPINRAZA label supports administration of SPINRAZA to patients of any sort with SMA. And certainly more and more babies are being treated presymptomatically because the data are so overwhelmingly positive. So that's happening as we speak..

And, of course, just to add to that Stan, as you know Gena, the newborn screening has incorporated now officially nationally SMN2 as a genetic measurement in the newborn screen panel to identify the patients that are presymptomatic that will develop SMA. And now that's becoming incorporated into a statewide system and nationally as well.

So all this bodes very well for treating more and more patients presymptomatically both the genetic testing as well as the data, the NURTURE data that was presented in World Muscle..

The other thing that's sort of been forgotten, but it's tremendously impressive to me is that it's not just in the NURTURE study that we see would continue to -- treatment patients continue to get better and better.

We're seeing the same sort of behavior in less severe infants and infants that are treated asymptomatically and we're seeing it in the type two and the adult patients as well. So, today SPINRAZA has delivered incredible value. And the longer we treat, the better it is for essentially all the patient types that have been treated with SPINRAZA.

So, it looks quite exciting..

Our next question comes from Jessica Fye with JP Morgan. Please go ahead with your question..

Can you help us think about when we could see extension data from the Huntington's Phase 1/2 trial? I think clinical trials like I've said it's 14 months of treatment with completion in December of 2019.

Is it possible we could see incremental update sooner given that it's open label? Also can you talk to the dose levels and dosing frequency in that extension trial?.

Sure, Jess. Roche is not -- well the open label extension study is going very well. All the patients are obviously enrolled into the study, and they're in the study. They are continuing to be treated, and it's going well as I said.

Roche has been very transparent, and has worked very closely with patient advocacy, patients, doctors, physicians, and has been very transparent in the information they've provided.

They haven't said specifically when and in what cadence they're going to actually share data from the open label extension, but we believe that they'll be sharing data over the course of 2019 because it's so important to the patient community to share that data and know how the program is going.

The dosing is the same as it was in Phase 1/2 which is monthly dosing, and they're administering the top dose and that was from the Phase 2 study..

Okay.

And apologies, if I missed this, but for the two-year Phase 3s for that product, what specifically will be the primary clinical efficacy endpoint?.

So the clinical endpoints are now -- have been disclosed by Roche. They're going to involve both cognitive measures, motor function measures, autonomic measures of neurological functions as well as MRI scans of brain size, and those sorts of things, quality-of-life measures. It's a composite scoring system that we're using in US and EU.

It is slightly different in US and EU, and but it's now been fully vetted through the FDA, the EMA and it's been posted..

Okay. Great. And last one for me is just Novartis made some comments yesterday that they are not especially focused on combining splice modulators with gene therapy and SMA.

So just curious as the leader in SMA what was your reaction to that view?.

Well, we are leaders in SMA, and we do think that there are opportunities in the future to use a variety of agents in combination. Whether a gene therapy agent would add any value to SPINRAZA given the results that we have is hard for me to know today. So, we're watching the progression of the gene therapy as well as small molecule.

And if there appears to be some spot in which SPINRAZA doesn't bring sort of remarkable value, I'm sure, that Biogen and others will look at combinations. There's nothing to preclude any combination with any of the drugs that are in development that we're aware of..

And our next question comes from Jim Birchenough with Wells Fargo. Please go ahead with your question..

Yeah. Sorry about that. Thanks. This is Yanan in for Jim.

So first question regarding SPINRAZA revenues, could you describe the driver for the growth? Is it patient number or some other factors such as change in the early patients building schedule versus longer intervals in previously enrolled patients? So, any color on that?.

It's patient numbers. There hasn't been any change in dosing schedule. So what's happening is that more patients are being treated, and the patients that have been treated are continuing to be treated. So it's -- I think just correlates with benefit. More patients are being treated and more patients are being treated longer..

Got it. And you described an increase in adult patients.

Would you be able to comment whether the pediatric patients whether that portion of the market is stable?.

It continues to grow..

Got it. And you were just talking about the combinations -- potential combination the possibility with gene therapy between SPINRAZA and gene therapy. I thought Novartis mentioned a price tag of $4 million to $5 million potentially for their gene therapy.

What's your view on that, and how might that impact the ability to combine the two drugs?.

Well, I think it's early days. And I think I'll let Novartis discuss their pricing and its impact on whether patients of sort uses drug, and whether would make sense to combine it. At that price obviously any combination would have to show an extraordinary benefit compared to SPINRAZA.

That's going to be very difficult to do given the fact that the vast majority of presymptomatic patients who were treated are developing like normal children.

How do you do better than that?.

And the last question on the Huntington's disease Phase 3 trial design by Roche.

Would you be able to comment on whether the Phase 3 study the 660-patient study would that be a controlled or uncontrolled study?.

It's 660 and it's a controlled study, yes..

And our next question comes from Vincent Chen with Bernstein. Please go ahead with your question..

So, I guess, one question about SPINRAZA and sort of the future of the SMA market, how are you and your partners with Biogen thinking about defending against Roche's oral compound in SMA for example whether that's next-generation agents with profiles building up with the SPINRAZA and trying to demonstrate areas of potential superiority whether with SPINRAZA or follow-on potentially using the novel biomarkers, et cetera? Could you just provide us with more color on how you think about a market defense strategy here?.

Well, I think the first order of business is to continue to learn more about SPINRAZA. And today the more we learn the better the drug appears to be in all patients. Second, of course, we are collaborating with Biogen to look at various follow-ons to SPINRAZA that might have lower doses or might have less frequent dosing.

I think what needs to happen now, before we comment on whether oral agents might be used, might be used in combination and how they might be used is one to watch how SPINRAZA does over the next year. We continue to watch that. And then second, to evaluate the clinical trials that are in progress both in terms of benefit and safety.

I think, there's not very much yet really know about the small molecule drugs and we're looking forward to seeing the data..

And our next question comes from Ritu Baral from Cowen. Please go ahead with your question..

Going back to the Huntington's endpoint, the Phase 3 endpoint that we were talking about before, I think you guys mentioned, it was a composite cognitive motor functions autonomic, MRI volume and quality of life.

How are those weighted within the composite? Is there any requirement for one element to show certain threshold effect for that composite endpoint to be positive? How does that primary endpoint work?.

Yes. Ritu, we will have to -- I don't have those details in front of us on how the various components to the composite score are weighted.

Why don't we get back to you on that?.

And then a quick follow-up on WAYLIVRA in Europe.

Can you remind us where you are on that process? Have you received like the 120-day questions as they progressed -- as there have been progress made between 120 and 180 days? Any details that you can share?.

We're late in the process. We do -- we've had a number of meetings and conversations and responses to a variety of questions 120-day and others. So we're late in the process and we're looking forward to bring it to a conclusion here in the next quarter..

And apologies if I just wasn't writing fast enough here. You do have commercial patients on TEGSEDI. I know you have German commercial patients treated.

Do you have US commercial patients treatment already started? Or is that going to be imminent given accretive just got it licensed?.

We have patients and physicians that are certified through REMS and registered on Akcea Connect. And we have specialties -- our specialty pharmacy certified through REMS as well and is up and running. And we have meetings with physicians and their teams and we received the first set of scripts. That's where we are today..

And then I guess last question is -- sorry, the end of Phase 2 meetings that you and Novartis will have on Lp(a), given that we're all expecting just sort of a really plain vanilla boring endpoint Phase 3.

Are there other topics to discuss any aspect of the compound or Lp(a) that are worth noting outside just the pure relatively boring Phase 3 time?.

That's the first time I've heard an outcome study described as relatively boring, but OK. We're kind of excited about it, and I think, I'll just leave it there. It's a good question, but it's a little more detailed than I think would be appropriate to go into here.

I'm sure that once we have the meeting that we have to discuss all that in a little more detail. I will encourage everyone to make the late-breaker that's coming this Saturday that Sam Tsimikas is presenting. We're really, really excited about the data we have to share both in terms of the potency of the agent as well as the safety tolerability.

And so we look forward to being able to share much more detailed data with the community..

And our next question comes from Yale Jen with Laidlaw & Company. Please go ahead with your question..

And I think a lot have been answered, I've got two here. The first one is that for the NASH you have two data releases later both regarding the NASH. One is the DGAT2 and the other is the ANGPTL3. Could you differentiate the specific indications that these two drop may have a target..

Yes, that is a very interesting question. We have quite a pipeline of different agents focused on either the lipid component of NASH or the fibrotic component of NASH or all the above. The way I think of DGAT2 is that it's highly specific to reduce triglycerides in the liver.

And so we think of it as a very specific reagent that should have a high substantial benefit in liver fab without any of the sort of issues that trying some of the other drugs such as increasing LDL and that sort of thing. With ANGPTL3 that's a general dyslipidemia agent in our mind. We know that it lowers LDL, we know that it lowers triglycerides.

We know that it lowers ApoB100. And so in the study that we're conducting we're asking you the question, does that translate to a significant reduction in triglycerides in the liver? And then we'll look at the composite benefit of that drug grams.

It could be a candidate for use as a general agent to reduce triglycerides in people with moderately elevated triglycerides. It could be used to treat patients with a broad range of dyslipidemias and it could be used to treat NASH.

So if you think about DGAT2, is a very selective and specific liver triglyceride drug primarily, and ANGPTL3 is more a general dyslipidemia drug with NASH as opportunity among the several that we will pursue. That will be the way I think about it..

So would that be -- may be in more specific to say that was targeting to a early disease process of the NASH, but not necessarily into the fibrosis progress into the fibrosis condition?.

Well, that's correct. These two drugs are focused on the lipid which is the driver of the disease, and so we believe that as we lower the liver triglycerides, we will affect the progression of the disease and reduce the progression of disease. We have other agents that are coming that are focused on the fibrotic part of the process as well.

So what we are going to be doing over the next little bit, is looking at the data that we have in each of these drugs and sliding down for the best patient population for each of the drug. We think this part of -- this component of our pipeline is really quite exciting. And it also demonstrates the power of antigens.

We can create selective drugs to target different targets, different parts of pathways, different parts of causes of these complex multi-factor diseases. And then let the data speak and tell us where we should be positioned each one of our opportunities..

Yes, maybe one more question regarding the Huntington disease. You say there's two studies and the first study mainly focus on the reduction of the Huntington proteins. And -- but that study you're also monitoring some kind of symptomatic differences over times and maybe have some sort of readout even before the second study is fully enrolled.

Is that the plan or does that..

No, that's correct. That's the open label extension and we are encouraged by what we've been seeing. And as Brett said, we do believe that Roche will be providing updates on the progress in that study in 2019 although I can't speak for Roche in more detail..

And does the drug have two different -- there is a cohort A and B is at different level of the -- as that tend to be administrated..

I think the open label extension is going simply at the highest dose..

Correct..

And our next question comes from David Lebowitz with Morgan Stanley. Please go ahead with your question..

Thank you very much for taking my question.

With respect to TEGSEDI reimbursement, could you run us through I guess what types of -- what pieces of information payers in the early run have requested regarding patients and discovering the reimbursement process understanding that you haven't actually finished the whole process yet with patients? And then beyond that, what is your expectation for turnaround time from when a patient initially meets with the doctor regarding potentially getting prescribed TEGSEDI to beginning the REMS process and eventually becoming paid and reimbursed it on drug?.

I'm going to suggest that you address those questions primarily to Akcea. There are a lot of detail in the process. I can give you my sense of what I understand. I know that our colleagues at Akcea have met with many payors before and after launch. And the focus of payors was sort of where you would expect it to be in the benefit versus the cost.

And I understand that those conversations have gone extremely well.

And the Akcea Connect program is really a very robust highly focused on getting patients into treatment with the easiest process and the shortest time possible, and facilitating the practitioners' entry into the treating of the patient and taking advantage and taking care of the time of the practitioner who manage these patients.

So, it's short, but I can't tell you the exact time between start and finish. And I suspect that we really won't know for a while just how it's all going to work until we did a lot more experience. And I'm sure as we gain experience, we'll be able to be even shortened it further..

Yes. If that is the last question, so I'd like to bring the call to a close. Once again, thanks everyone for joining us today. I very much appreciate your interest and the questions that you've asked. We encourage you to stay tuned for APO(a)-LRx deal that will be presented in more detail this Saturday at AHA.

And we look forward to seeing you at our Investor Day in New York in which we'll have the opportunity to provide a significantly greater update on essentially everything that we're doing.

What we are really excited about is that we're progressing to commercializing our two new drugs while SPINRAZA continues to perform well, advancing our pipeline continuing to advance the technology.

We're witnessing the improvements in the technology being manifested in the performance of our drugs across the board, and we're doing all that while we're growing operating profits and we're cash accretive. We think that's an exciting story, and we're looking forward to telling it in more detail in our Investor Day. Thanks very much..

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