Good day, and welcome to the Ionis Pharmaceuticals Third Quarter 2021 Financial Results Conference Call. As a reminder, this call is being recorded. And at this time, I would now like to turn the call over to Jennifer Capuzela. Please go ahead..

Thank you, Tom. 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 that accompany today's call.

With me on this call this morning are Brett Monia, Chief Executive Officer; Beth Hougen, Chief Financial Officer; and Richard Geary, Executive Vice President of Development.

And joining us for the Q&A portion of the call are Richard -- sorry, Eric Swayze, Executive Vice President of Research; and Onaiza Cadoret, Chief Corporate Development and Commercial Officer. I'd now like to draw your attention to Slide 3, which contains our forward-looking statements.

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.

And with that, I'll turn the call over to Brett..

Thanks, Jen. Good morning, everybody, and thanks for joining us on today's call. In the second half of 2021, Ionis has made important progress on several fronts. We expanded our late-stage pipeline at the start of our Phase III core study of olezarsen, which we previously referred to as IONIS-APOCIII-L Rx.

This study will evaluate olezarsen in patients with severe hypertriglyceridemia, an indication with an estimated 3 million patients or more in the United States. We completed enrollment in the Phase III NEURO transform study of eplontersen in patients with TTR polyneuropathy, putting us on track for data in mid-2022.

And we are on track to initiate our Phase III study of donidalorsen, which we previously referred to as IONIS-PKK-LRx in patients with hereditary angioedema before the end of this year. We also advanced our commercial strategy and go-to-market initiatives in anticipation of Phase III data readouts and potential commercial launches of these programs.

Additionally, we further increased investments in our LICA platform through our transaction with Bicycle Therapeutics.

While tofersen missed the primary endpoint in the placebo-controlled Phase III VALOR study in patients with SOD1-ALS, we are encouraged by the totality of evidence in VALOR and the open-label extension, which showed signs of slowing disease progression in these patients.

Importantly, Biogen is now actively engaged with regulators and other key stakeholders to determine the next steps for this program. Biogen also plans to expand its early access program to the broader population of people living with SOD1-ALS.

And given the importance of treating patients early in their disease as reinforced by top line data from VALOR in the OLE, we are pleased that the ATLAS study presymptomatic SOD1-ALS patients continues as originally planned.

Coming up in the next 12 months, we're looking forward to a number of key catalysts, including our presentation, summarizing the Phase II results for donidalorsen in patients with hereditary angioedema at the ACAAI Annual Meeting on Sunday.

And at our Virtual Investor Day event on December 9, we look forward to sharing our strategy, plans and progress, bring our most advanced programs to market and achieve commercial success. Importantly, we remain financially strong, on track to achieve our financial guidance and have the resources to meet our strategic objectives.

And with that, I'll turn the call over to Beth to review our financial results. And Richard will discuss recent pipeline updates and upcoming pipeline catalysts. After Richard, I'll wrap up our prepared remarks before taking your questions. So now over to Beth..

Thank you, Brett. During the first 9 months of this year, Ionis earned $370 million in revenue and recognized $499 million in non-GAAP operating expenses, reflecting our commitment to advancing our wholly-owned pipeline at our technology. This resulted in a non-GAAP net loss of $131 million.

SPINRAZA's global sales in the first 9 months of this year were $1.5 billion, and we earned nearly $200 million in royalty revenue from SPINRAZA, virtually all falling to our bottom line as profit. We are pleased with Biogen's ongoing work to further inform SMA treatment and address the remaining unmet needs of SMA patients of all ages.

Biogen recently announced plans to initiate the ASCEND study to evaluate the potential of high-dose SPINRAZA to benefit patients previously treated with Arista plan. The DEVOTE study is evaluating the potential of high-dose SPINRAZA to demonstrate even greater benefit compared to the currently approved dose.

And the RESPOND study is evaluating SPINRAZA's potential to benefit patients who had a suboptimal response to gene therapy.

Together with the substantial and growing body of evidence supporting SPINRAZA's proven profile and over 60,000 SMA patients in markets where Biogen has a commercial presence, we believe SPINRAZA will continue to be the market-leading treatment for SMA patients of all ages and types.

TEGSEDI and WAYLIVRA generated nearly $50 million of revenue in the first 9 months of this year. And as discussed on our last quarterly call, during the second quarter, we completed the transition of our commercial operations for these medicines to Sobi.

As a result, our revenues from TEGSEDI and WAYLIVRA are now comprised of distribution fees based on net sales. Importantly, both medicines continue to make advances into new markets. TEGSEDI recently achieved innovative drug pricing in Brazil, reflecting the significant unmet medical need and prevalence of TTR polyneuropathy in that country.

TEGSEDI's categorization as an innovative treatment is a key milestone toward optimizing its value in Latin America. And WAYLIVRA was approved in Brazil as the first and only treatment for patients with FCS, which triggered a $4 million milestone payment from PTC in the third quarter.

We earned $115 million in R&D revenue in the first 9 months of this year from advancing more than 15 programs within our cardiometabolic and neurology franchises. This included a $25 million milestone payment from Novartis for achieving 50% enrollment in the Phase III outcome study of pelacarsen.

Our ability to generate revenue from numerous diverse sources continues to be a key element of our financial strength. We reported non-GAAP operating expenses of $499 million in the first 9 months of this year. This was a 10% increase compared with last year and was in line with our expectations.

R&D expenses increased by nearly 35% compared with last year. This increase was driven primarily by expenses related to our Phase III pipeline including the ongoing studies of eplontersen and start-up costs associated with the Phase III olezarsen CORE study.

We also recognized $35 million of R&D expense in Q3 because of our license agreement with Bicycle Therapeutics. SG&A expenses decreased by nearly 35% compared with last year, driven by the substantial savings we realized from the Akcea integration and Sobi transaction.

As planned, these transactions unlocked substantial cost savings that we are now reinvesting to drive future revenue growth. This includes funding our go-to-market initiative for our late-stage pipeline.

Based on our results for the first 9 months of this year, today, we are reaffirming our 2021 financial guidance, which calls for revenue of more than $600 million, operating expenses in the range of $710 million to $750 million and a net loss of less than $102 million, assuming the low end of our expenses and all on a non-GAAP basis.

We are projecting higher R&D revenue in the fourth quarter from our advancing partner programs. Looking to our collaborations with Biogen and AstraZeneca. We have a deep pipeline of programs that provide us with several opportunities to achieve significant milestone payments this year.

Further, we expect operating expenses to increase in the fourth quarter as our olezarsen and donidalorsen Phase III studies get underway. With $2 billion of cash, we believe we are well positioned to continue investing in our pipeline, our technology and the go-to-market activities for our most advanced medicines.

And with that, I'll turn the call over to Richard..

Thank you, Beth. We continue to be pleased with the overall performance of our pipeline. Already this year, we've achieved numerous milestones and look forward to more over the next 12 months. Looking first at our late-stage pipeline. Eplontersen is progressing well.

We completed enrollment in the Phase III NEURO-TTRansform study in patients with TTR polyneuropathy, putting us on track for data mid next year and an NDA filing by the end of next year, assuming positive data. The CARDIO-TTRansform study also continues to progress as do our pelacarsen and FUS-ALS studies.

We expect data from all three of these Phase III studies in 2024 continuing the regular cadence of data readouts from our late-stage registration studies. We're also pleased with the progress we're making with LSRs. The balance FCS study remains on track for data in 2023.

And just this week, we announced initiation of the Phase III core study in patients with severe hypertriglyceridemia, triglycerides over 500 milligrams per deciliter. As Brett mentioned, SHTG or severe high triglycerides represents a substantial opportunity with more than 3 million patients in the U.S. alone.

CORE is the second study in our comprehensive olezarsen development program, which we designed to fully realize this medicine's potential to address a broad range of patients at risk for triglyceride-driven disease who today have limited treatment options. And as our seventh Phase III study now underway, CORE further expands our late-stage pipeline.

We've also made great progress with our donidalorsen development program for the treatment of hereditary angioedema. We look forward to presenting additional data from the donidalorsen Phase II study at the ACAAI Annual Meeting coming up on Sunday.

These data will further demonstrate why we believe this medicine has the potential to be the best-in-class treatment for people with HAE. We're also on track to start the donidalorsen Phase III study before the end of this year.

We have moved with urgency to begin this very important Phase III program, putting us on track to get up and running well ahead of our plan. The start of the study will further expand our deep Phase III pipeline to 6 medicines over 8 indications.

We were disappointed that the Phase III VALOR study in patients with SOD1-ALS didn't reach statistical significance in the primary endpoint.

We're encouraged, however, that trends favoring tofersen were seen across multiple measures of biologic activity and clinical function, including motor function, respiratory function and quality of life compared with placebo.

Additionally, the totality of data from VALOR and the ongoing OLE reinforce these findings and showed that patients who started tofersen earlier experienced better outcomes further suggesting a positive clinical effect.

As Brett mentioned, we're encouraged that Biogen is now actively engaged with regulators and plans to expand its tofersen's expanded access program to all patients with SOD1-ALS.

And as we and Biogen continue to analyze these data, we look forward to applying the learnings from VALOR and the OLE to further optimize development of other programs in our AOS franchise. Now let's turn to the steady progress we're making within our mid-stage pipeline.

We reported that Ionis MAPTRx achieved the primary endpoint of safety and tolerability and its complete Phase I/II study in patients with Alzheimer's disease.

Ionis MAPTRx also offered the first clinical demonstration of antisense-mediated CSF tau protein suppression and achieved substantial durable and dose-dependent reductions of CSF total power and phosphotal. Based on these promising results, Biogen is actively planning a longer Phase II study of Ionis MAPTRx in Alzheimer's disease patients.

We achieved proof of mechanism and a strong indication of proof of concept in our Phase II study of cimdelirsen previously referred to as IONIS-GHR-LRx and acromegaly patients uncontrolled on standard of care therapy.

While the Phase II study was no longer powered to assess the primary endpoint due to COVID-related enrollment difficulties, results from this study and a preliminary assessment of the ongoing open-label extension study showed significant reductions in growth hormone binding protein, a measure of target engagement with no associated increase in growth hormone, a reduction in integrated IGF-1 response and good safety and tolerability in patients treated with cimdelirsen all supportive of its continued development in patients with acromegaly.

In addition to our ongoing open-label extension study, we are studying we are studying in a monotherapy study. Both of these studies are progressing on track with data expected next year.

ION449 targeting PCSK9 is progressing on track, and we're looking forward to a data readout from the multiple ascending dose studies in individuals with high cholesterol at the American Heart Association Annual Meeting later this month.

Vupanorsen is also on track for Phase IIb data readout in patients with dyslipidemia and cardiovascular disease by the end of this year. Enrollment in the Phase IIb end-stage renal disease study of fezomersen previously referred to as IONIS-Factor XI LRx is now complete, putting this study on track for data readout in the first half of next year.

And finally, our Phase I/II study of ION582 in patients with Angelman syndrome is also on track to start by year-end. As I just summarized, we're rapidly advancing and expanding our Phase III pipeline with potential for new Phase III programs.

We also look forward to a steady cadence of data readouts as we move into next year from our late-stage pipeline beginning with eplontersen, NTTR polyneuropathy patients mid next year. And with that, I'll turn the call back over to Brett..

Thanks, Richard. Throughout this year, we have executed on our strategic objectives to advance our pipeline, expand the reach of our technology and prepare to successfully commercialize our most advanced wholly-owned programs. All 3 of these objectives are central to my vision to bring Ionis to greater height to success.

And as we review this morning, we're well on our way. At our Virtual Investor Day coming up on December 9, I'll talk more about my vision and what makes me so optimistic for Ionis' future.

You will also hear from many other Ionis leaders who will discuss our strategies and the progress we're making to achieve all our most important near long-term goals. We also aim to answer your questions, including questions about our commercial strategy and go-to-market initiatives.

And while not the primary focus of our Investor Day, we also plan to discuss the investments we're making in our technology and how we see those investments paying off for years to come. It should be a great event, so please watch for details in the coming weeks. And with that, I'll now open the call up for questions.

Tom?.

[Operator Instructions] And the first question comes from Yale Jen with Laidlaw & Co..

In terms of the TTR studies, my first question is that just either one for the polyneuropathy or cardiomyopathy improved mix type of patients?.

Absolutely, yes. So the polyneuropathy NEURO-TTRansform study that's enrolled and now due to read out by midyear next year is very similar to the study we did previously with inotersen in which it involves patients that have to have polyneuropathy, but a good number of those patients will also have symptoms of cardiomyopathy as well.

That's patients with hereditary in TTR polyneuropathy. So that's the hereditary form of the disease. In the CARDIO-TTRansform study, the cardiovascular -- cardiomyopathy outcome trial, that will include both wild-type and hereditary patients. And certainly, the hereditary patients will also be mix in the type as well.

Many of them will be mixing type as well..

Okay. Great.

And maybe one more question on the same -- on the same compound product, which is that -- what's the current sort of a recruitment status -- patient recruitment status for the cardiomyopathy TTR study at the moment?.

Yes, Yale, we're not providing specific details on where exactly we are in enrollment, but we are planning to complete enrollment in the first half of next year..

The next question comes from Jason Gerberry with Bank of America..

This is Chi on for Jason, taking up questions. Two from me. First one on the sHTG programs. You have your wholly owned APOC3 position for Phase III study. And you also have an ANGPTL3 program partner with Pfizer with [Indiscernible] Phase IIb data due soon. And Pfizer has some point talk about sHTG as a potential indication pursuit.

So I understand, Brett, you talked about that you see the 2 programs can coexist as also with tominersen from what we call INS or at the time next year has the option to participate in certain commercialization activities with Pfizer in the U.S. with vupanorsen.

So ultimately long-winded question, but curious how and to what extent INS plans to maximize the value of the 2 assets given perhaps some overlap between them. Does Ionis have any input to the vupanorsen programs in terms of the direction of development following Phase IIb data? Second question, shorter one on the AGT.

Curious, do you have a sense of timing when the Phase II might be reading out? Can we expect data in 2022 with the AGT program?.

Yes. Great questions, Chi. So I'll ask Richard to talk a little bit about how we see angiopoietin-like 3 vupanorsen and APOC3 olezarsen differentiating in the market.

We're very excited about both drugs and we're glad that we're developing and commercializing it olezarsen ourselves, and we have a great partner in Pfizer with vupanorsen, but they do differentiate. And Richard, don't you take us through that..

So I think the best way to think about this, Chi, is that olezarsen is strictly a triglyceride play and is very strong triglyceride lowering agent in severe high triglycerides and active in FCS.

And they'll differentiate from angiopoietin-like 3 in that angiopoietin-like 3 is very much focused on a mixed dyslipidemic population that also suffers from increases in and/or increased and uncontrolled cholesterol. And so I think you'll see differentiation. It's also a very large population.

And so you're going to be working in a place where really there's nothing else there today that substantially lowers triglycerides in patients with these severe high measures of triglycerides. So I see the differentiation. I'm not speaking to the positioning on the market necessarily, but you can see from the biology that they will differentiate..

Yes. And maybe Onaiza you could also talk a little bit about that a little bit more, but specifically with a view towards the market opportunity for olezarsen..

Yes, sure. I'd be happy to. As everyone has already said on the call, this is -- it's a really large population, severe hypertriglyceridemia greater than 500 is a well-thought-out indication that's being studied, right? It's an adjunct to diet to reduce TG levels in patients over greater than 500.

As we look at the market of this over 3 million patients in the U.S., we see that clinicians already have like a segmentation in their mind. And I think that's where some of the positioning will eventually play when we do actually launch these 2 products in the marketplace, Pfizer, vupanorsen and Ionis on olezarsen.

And as Richard said, where we see this really playing out for olezarsen is that it is best-in-class therapy to reduce triglycerides in patients, both at risk for cardiometabolic disease and acute pancreatitis, right, due to the elevation of the trig levels as well. So we're seeing that emerge really nicely.

There might be a bit of a Ven diagram, but we do see vupanorsen positioning themselves very nicely in patients with mixed dyslipidemia, with elevated remnant cholesterol. So we are seeing some distinct segments actually emerging right now. And as everyone has said, very large market and really great opportunity..

Thanks, Onaiza. And just to add to that, olezarsen is substantially more potent, will produce much more potent reductions in triglycerides compared to both in vupanorsen here too. So it's a much more attractive triglyceride reducer, if you will.

Regarding the angiopoietin-like 3, yes, where data is expected out next year for both refractory hypertension as well as the exploratory heart failure study..

The next question comes from Yanan Zhu with Wells Fargo..

Congrats on the progress. A few questions again on the olezarsen program in sHTG. So of course, congrats on initiating the Phase III CORE study. I have a few questions on the overall development program. Given the large indication size, I think probably more studies are needed.

So just curious, how many studies are needed for the registration of this product? How many patient year exposure are -- is needed for the safety database? And also the data for CORE is expected in 2024. I think you previously have mentioned.

What about the data for the overall program and the time line to approval?.

Yes.

Want me to take that?.

Yes. So we've got quite a number of studies planned. I don't think we specified the number but certainly, more than 1,500 patients will be exposed in this database. So stay tuned. We've got a few more to start next year. That will be supportive, particularly for the severe high triglyceride larger population..

Will this be -- sorry, go ahead, sorry, Brett..

I'm going to say again the data readout we're talking about 2024 would be to support registration. So it all come together around that time..

Great. That's great. And maybe a quick follow-up on the CORE study. The primary endpoint is the triglyceride reduction.

Is that registry approvable, do you need the acute pancreatitis event rate for -- to secure the approval for the product?.

Right. So the answer is yes. Triglycerides are approvable alone. The pancreatitis, of course, we believe, will be a profile enhancing component for this drug. But only the triglyceride level is required for approval for this indication..

The next question comes from Esther Rajavelu with UBS..

I have a couple -- I'll start off with the Angelman program.

Can you talk about that program and give us some color on how your molecule is perhaps different from some of the others in the clinic? And maybe anything you can share on the route of administration or other considerations as you're planning your trial and enrollment would be helpful? And then I have a couple of quick follow-ups..

Sure. I'll ask Eric to talk a little bit on what we know about how our molecule is different. We're very excited to get the study up and running by the end of this year. And as we dose for most of our drugs for neurological diseases, our drug will be dosed intrathecally.

And Eric, why don't you talk a little bit about what we know about how we are different..

Yes, sure. So the mechanism that we're utilizing is the same as some of the other antisense molecules in the clinic. This is a mechanism that we pioneered along with our academic collaborators in lowering the ISIS transcript and increasing expression of UBE3A deficits of which are causal for Angelman syndrome.

And we spent a fair amount of time optimizing our molecule and trying to find the most potent and best tolerated and safest molecule we could find and obviously have a different molecule than our competitors in the space.

The chemistry and technology we use is the same as our other neurology drugs, same chemical modification that's in SPINRAZA, and we're optimistic that the profile of our drug will look like our MAPT ASO, which we released some data on earlier this year and has been performing great.

So hopefully, we'll have a best-in-class molecule that can address this disease..

Got it.

And then on the toferson FDA discussions, can you share your expectations on the timing for an update and what a realistic outcome could be from these discussions?.

Yes, Esther, I wish I could, but I can't because Biogen has not stated any point in time in which they plan to provide an update on the next steps.

I can just -- what I'll do is just remind you that what we have said and what Biogen has said and Ionis has said is that we're still -- we remain very encouraged, as we said in our opening remarks by the totality of the data.

They continue to engage regulators to review the data, discuss potential next steps and they're planning to open up the expanded Access program to all SOD1-ALS patients based on the high unmet medical need and the safety profile and the totality of the data. But there's no specific point in time in which updates have been stated as of yet..

Got it. And then lastly, if you can give us any color on the Flamingo agreement that was in the press release this morning.

And what sort of milestone could be, that should be on our radar?.

Yes. Let me just provide very briefly the strategy here. We have a rich pipeline, as you know. And what we are moving towards doing is a very high priority is to focus in those areas where we think have the potential to bring the greatest value to Ionis and all stakeholders.

And those areas are in cardiovascular disease, neurology and in certain indications like hereditary angioedema, where we think we have a best-in-class molecule.

Oncology, although, we've had a long history in oncology, and we've made great progress there, and we are enthusiastic about the drugs that have moved over to Flamingo, oncology drugs don't require substantial investment and laser-focused to give those drugs the best chance to win.

Based on our commitment to focus on those therapeutic areas where we think bring it have the rate of success, we divested our oncology pipeline and moved it into a company that we helped create both from Flamingo therapeutics.

And we're confident that we will do a very good job with the drugs that are revolver, the Flamingo we obviously have a vested interest economically and otherwise in Flamingo and see those drugs go forward. And we're very much involved in with Flamingo.

As far as milestone and those sorts of economics, I don't know if those have been disclosed, Beth?.

No, they're not public. And just to maybe amplifying what Brett said, what we're -- when you think about the economics in this transaction, the real value in our view is the ability of Flamingo to fund and advance these medicines for a variety of different cancers.

And to move them forward with a full focus in oncology, which I think really helps us internally focus our energies in cardiometabolic and neurology in particular.

And so the economics, I think, are really less about the milestones and more about the long-term value of those medicines and the longer-term economics as well as the equity investment we have in the company..

Got it.

So should we be thinking about this as an Akcea model where it's spun out from an R&D standpoint and then eventually, you'll decide whether to bring it back into the Ionis fold?.

No, not at all. Flamingo is an independent company. We have an equity ownership, but it's less than 20%. So I would not -- this is not an Akcea model, and that's not a model we intend to follow going forward..

The next question comes from Yaron Werber with Cowen..

This is Brendan on for Yaron. Just I think a couple of quick ones from us. First, mostly in HAE actually. I was wondering, what you might be able to tell us that the design of the Phase III. I know this is kind of a increasingly crowded space at this point.

And I guess we're also kind of wondering where you really see the bar on efficacy for the Phase III, not really just for approval, but maybe more so it's really kind of differentiate yourself from some of these other late-stage and commercialized assets?.

Sure. I'll ask Richard to talk a little bit about the Phase III design and also Onaiza on what we expect to get out of the study to win on the market with this potential best-in-class drug. Again, the data, a lot of the data and a significant amount of new data will be presented this weekend at a medical meeting.

And I think that data will demonstrate why we're so excited about donidalorsen as a potential best-in-class medicine we think will be the best treatment for HAE.

Look we share on Phase III design, Richard?.

Yes. So the Phase III design is really patterned fairly closely after the Phase II. These are going to be patients that are treated, who have frequent attacks. It will be placebo-controlled, of course. And patients will then get the treatment, and we'll be looking at percent of patients that go to completely attack-free.

One of the reasons we think this drug has really demonstrated in Phase II that it is, in fact, potentially best-in-class is that nearly all the patients went to attack-free. And now they've rolled over into open label and have gone long term attack-free, which is very different from the current standard of care in the industry in prophylaxis.

So excited about it, the design of the study, if you follow a little bit more of the data that's going to be released this coming weekend. You'll see the design of that study and the endpoints are very, very similar..

Thanks.

Onaiza, what are you looking forward to win on the market?.

Yes. It's a winning profile from what we've seen from the Phase II data as Richard just expressed. We've done some really thoughtful work in understanding kind of where the unmet need is, given the prophylactic treatments currently on market and where kind of the uptake has been.

And I think there are -- it's 3 dimensions that are really emerging, and we actually meet all of those 3 dimensions. The first one is that when you're looking -- it's the name of the game is 0-attack rates. And the sooner you can get patients to a 0 attack rate, obviously, the more confident they are and the less anxiety that's putting on the patient.

And we just do that really well in our Phase III, as we get to max clinical onset of efficacy better than the other agents that are out there, and we hope to replicate that in the Phase III. We also, as Richard said, show really great data on attack-free, 92% in weeks 5 to 17, which is also going to be very important in terms of adoption.

And then lastly, this is a market that has injections that are 2 to 4 weeks, highly viscous and injection site reactions. And do you think that the convenient profile that this offers in addition to the efficacy is going to be really valuable in terms of adoption of our agent out there. So very exciting product.

We're looking forward to moving this forward..

Thanks, Onaiza. We're also looking forward to sharing in more detail the Phase III design and our go-to-market strategy at our Investor Day in December. So stay tuned for that..

The next question comes from Josh Schimmer with Evercore ISI..

I just want to clarify the operating expense guidance for the rest of the year. I guess, it assumes a pretty significant step-up quarter-over-quarter, especially, if we adjust for the Bicycle payment in the third quarter. I know you said you're starting up some trials, but it's still a pretty sizable jump.

Maybe you can elaborate on the drivers for that?.

Sure. Happy to. I think you're right, focus on our late-stage pipeline on the fact that the Phase III pipeline has continued to grow and continue to mature. So if we start with eplontersen, polyneuropathy study is fully enrolled now. We announced that in our second quarter earnings call.

So that is at its most expensive phase with data expected mid next year. The cardiomyopathy study continues to enroll nicely. And as you heard Brett say with complete enrollment next year.

So again, that expense is growing pretty sizably, particularly given that, that is the largest outcome study in that patient population ever conducted at 750 patients. And then as you think about olezarsen, we've got the FCS Phase III study ongoing and continuing to enroll patients.

Severe high triglycerides is getting up and running that CORE Phase III study. And when we start a study, we tend to have a bolus of expenses just to get the study up and running, and then those expenses grow as we enroll more and more patients. And then, of course, PKK Phase III will be getting underway here very shortly.

And as -- and again, we'll have those start-up expenses that will be a bolus in the fourth quarter. So as you can see, just a lot of study starts and late-stage studies, which are all quite expensive. And then as we move into next year, we're going to continue to build on that as the study continue to enroll.

And as we add new studies, particularly related to olezarsen and we build out that Phase III program. So that's why we see continued growth into the fourth quarter and beyond in R&D..

The next question comes from Gary Nachman with BMO Capital Markets..

So first on eplontersen for TTR-PN.

Depending on the data in the Phase III mid next year, how do you expect it will be used in that market? How much could it potentially expand addressable patients relative to TEGSEDI? And how will you promote it? Will you rebuild your infrastructure there? And then on SPINRAZA, just how long do you think it will take for Biogen to run the ASCEND study? Is that something that could potentially update the label? And are physicians currently using higher dosing on their own for risky failures to the extent that you're aware of that?.

So I'll ask Onaiza to comment a little bit why we -- how we think we have the opportunity to win on the market. And if I take the liberty, I would like for to talk not just about polyneuropathy, but also cardiomyopathy we get on tofersen.

But I will remind -- I want to remind you first that this is a LICA medicines that has all the advantages, has the highly attractive profile of all of our LICA medicines as a very frequent once-a-month subcu low-volume injection at home with an auto-injector, with pristine excellent safety profile.

And as I mentioned, as we've seen with all of our drugs. In our Phase I study, we were getting TTR reductions on the order of up to 90%. In the Phase I study that you can compare to about 70%, 75% for inotersen TEGSEDI, and we think that will translate into even greater efficacy.

So we're excited about the profile, and we're also excited about the market, and we're working on our plans to move into the market with eplontersen. I'd like Onaiza maybe talk a little bit about our strategy there..

Yes. I'd be happy to. So as the -- as we think about launching with the initial indication, it's really important to know the market is really kind of advancing their thinking about this disease as a systemic disease. And we've seen that emerge a lot in our market research and just talking to our KOLs as well.

And there's increasing recognition that the whole burden and prevalence of polyneuropathy in mixed phenotype patients is also really critical to address. So if you think about that, overall, you've got 40,000 patients initially, both in hereditary ATTR that we will be focusing in on.

Currently, I think only 10% to 15% of these patients are receiving treatment. So there continues to be a lot of opportunity and unmet need.

And as to your questions and last generation and second generation, we know that the first-generation silencers just didn't really have the ability to kind of seamlessly integrate into a patient's lifestyle, and this will be well above and beyond that.

So I think that's a very exciting place to be in terms of how we're looking forward to being in the marketplace. In addition, the broad part of the market is in wild-type cardiomyopathy. There, we are well positioned to win in the marketplace because of our clinical trial and the ability to generate clinical data with and without standard of care.

And we think that will broadly position eplontersen. For physicians, if they actually have patients who are naive, we'll have the data for that. They have patients who are already on a stabilizer. We'll have the data for that so they can make the right decision for their patients.

So really looking forward to the plunters and getting into the marketplace..

And regarding ASCEND, Gary, so I'm not -- we are not aware of any patients -- SMA patients they have been treated with higher dose that have been on the ASCEND, they have been on risdiplam previously, Biogen would know that if that would happen.

I doubt very much we have it because DEVOTE study is just -- it's in process, which is examining the higher dose of SPINRAZA in a controlled study. And as a reminder, ASCEND is a study of the higher dose of SPINRAZA, I think it's 28 milligrams.

And in patients that were on risdiplam they have chosen to be washed out the risdiplam go on to a higher dose of SPINRAZA. The assumption, of course, is that patients feel like they need better control of their disease.

So they're moving on to SPINRAZA and we'll try the higher dose study, which has already cleared the dose escalation portion of the DEVOTE study showing safety and now it's the randomized portion of the study.

And then in addition to DEVOTE and ASCEND, we also have the RESPOND study in patients that's ongoing with Biogen is conducting in patients that are on gene therapy that had a sub-alpha response and then went on to the SPINRAZA at the commercial dose of SPINRAZA..

The next question comes from Jessica Fye with JPMorgan..

Just 2. First, how should we interpret the IGF-1 AUC data for cimdelirsen and acromegaly. Can you talk about how these patients IGF-1 levels looked relative to the upper limit of normal after treatment? And then on PCSK9, thinking beyond the subcu version to an oral.

Are you still eager to pursue that path? Or is it still too early to say? And assuming you'll eventually need an outcome study for either agent, would you envision ultimately developing both subcu and oral in parallel or choose one over the other?.

Let me -- thanks, Jess. I'll take the PCSK9, and I'll ask Richard to comment on -- and provide a more fulsome sort of summary of the acromegaly data with HRL. So for PCSK9, as we said in the script that AstraZeneca as provide an update AHA in a couple of weeks on the Phase I study in patients with high cholesterol.

They're very excited about this study. The Phase II studies are essentially complete now as well. They're trying to share results from the Phase II next year. This is the subQ formulation once a month.

They believe that this is -- and we believe, based on all the data we've seen, that this is a -- this has the high potential to be the best-in-class PCSK9 inhibitor of anything that is out there today.

They do plan to conduct or planning to conduct several Phase III studies, including a cardiovascular outcome trial, and they actually are building a comprehensive program to win on this market is they do think that this drug is the best lower -- a lowering agent for PCSK9, and that will correspond to the best LDL lower effects too, which we're seeing in patients and in normals.

Regarding oral, it's not part of the PCSK9 program today. Their -- AZ is 100% committed to the subQ formulation today. With that said, we and AstraZeneca are working on oral delivery as a platform play not necessarily a PCSK9 play, but a platform play. As you know, we have several drugs in development and in research with AstraZeneca.

And we continue to work on oral delivery. And we're somewhat optimistic on the progress we're making with oral. But it's not a specific for PCSK9. They believe that this subQ drug is a winner on the market, and that's what they're focused on and specifically.

Of course, any learnings from oral always we think about for the future, but that's not the current focus..

Okay. Cimdelirsen let me just take you through a few things. Yes. I think it's very important, looking at the data that we were able to achieve significant growth hormone lowering. So look growth hormone binding protein, which is a surrogate measure for the target itself with no change in growth hormone. So that's a very significant thing.

These patients, to get to your question, were uncontrolled on somatostatin. So they were resistant to or recalcitrant to standard of care treatment. Their levels of IGF-1 were 2 to threefold higher than upper limit of normal. As you probably know, getting them below 1.5x upper limit of normal is kind of the goal.

And so the -- we looked at AUC or integration of IGF-1. What that shows is that you're getting lowering of IGF-1 that was actually significant at the highest dose compared to placebo and placebo is going up. So these patients who are recalcitrant to somatostatin analogs continue to get worse. And on our drug, we're getting better.

So the drug was lowering IGF-1. The levels that they came in were like 400 nanogram per ml. If you're familiar with the levels of IGF-1, normal would be 200. And I'm generalizing because the levels are determined by sex and age. So it can be different for each individual. But around 200 would be normal, 1.5 would be 300.

Most of these patients came in around 400. So you really want to get these patients under 300, and you want to be able to lower their IGF-1 and in this case, in recalcitrant patients, we were able to show that. And I think it's very encouraging in the hardest to treat patients. Of course, it's not the end of the story.

We have the OLE where we're extending treatment in these patients as well as looking at naive patients or patients who are not on somatostatin analogs, which is another population. Many who have either failed somatostatin analog is no longer on treatment or are naive coming in and just having their surgery but still being IGF-1 uncontrolled..

Yes. Thanks, Richard. And I'll just add a couple -- it might be worthwhile adding a couple of other things. One, to our knowledge, no one's ever studied a drug to get IGF-1 under control in this recalcitrant patient population. So in somatostatin failures. So we're really pioneering a new patient population here.

So any IGF-1 lowering, let alone getting some patients in the normal range is its benefit. We're also seeing signs of improving quality of life that we'll continue to focus on as we go through the open-label extension.

And very importantly, we didn't see any increases in growth hormone as a consequence of inhibiting the growth hormone receptor, and that's very important because elevation of growth hormone can contribute to tumor growth. And that's the last thing we want to do, and we didn't see it. So we're very pleased about that..

The next question comes from Joseph Stringer with Needham & Co..

Just a quick follow-up on the Phase III HAE.

Just curious in your thoughts on potential enrollment rates and when that trial could potentially be -- are fully enrolled?.

Which study was that, Joe?.

HAE..

Oh, HAE..

Yes.

HAE?.

Yes. I don't think we've put that out yet, Joe, on when we expect to complete enrollment in that study. I think we have said a potential launch in the 2024 time frame. I think it was on our -- yes, I think we've said that, but we haven't put out specific timing on completion of enrollment and so on.

So sorry, I just can't give you that deep level of detail. But as you know, we're getting that study started this year. And we were very successful enrolling that study very expeditiously -- the Phase II study very expeditiously. And as Richard said, there's a lot of enthusiasm for this profile -- for this drug.

And also remind you probably something else we should mention is that we continue the open-label extension -- evaluation of patients from the open label extension from the Phase II study that will be the full -- the Phase II study we presented on Sunday. But the open-label extension, we're continuing to follow from that.

We have excellent participation in that OLE. People want this drug. And we're looking forward to sharing furthermore data next year in the first half of next year at Medical Congress as well, OLE, quality of life and other data to complement what we're going to present on Sunday. It really looks like a winner..

The next question comes from Luca Issi with RBC..

Great. I have 3 questions, all pretty quick. One on APOC3, the other one in acromegaly and the other one on FUS-ALS. So APOC3, obviously greater just starting a Phase III study on patients that they have triglycerides above 500-milligram per deciliter.

Is there a future plan to start a trial also in patients with triglycerides above 150 milligrams per deciliter? And if so, are you planning to run a cardiovascular outcome trial there similar to what Vascepa has done? Maybe on acromegaly, exciting early signal. However, it doesn't sound like you're ready to commit to a Phase III study quite yet.

Wondering if you can comment on that and maybe what's gating for a go-no-go decision there? And lastly, for FUS-ALS, I know the program is wholly owned and you're already recruiting patients in Phase III.

In light of the tofersen data, are you planning any protocol amendment to maybe increase the problem of the success of that trial?.

one, the longer you treat, the better; number two, the earlier treats in disease progression earlier symptoms, the earlier disease state, it's the better off you are; and thirdly, neurofilament light chain is a better predictor of progression rates for fast progression versus regular progressors.

We're applying all those learnings to all of our ALS trials. And yes, since the bus ALS -- ataxin-2, the sporadic ALS and the C9 studies are in Phase II, so we have the opportunity to apply those to Phase III.

For the FUS-ALS, we're still early on in the trial, and that gives us -- and certainly, we're planning to make some protocol amendments to incorporate the learnings that I just sort of outlined for you -- to maximize potential for success from -- for that study..

Good. Thank you, Brett. Just one note on triglyceride lowering and cardiovascular disease. At the greater than 150 and looking at all the trials that have been done with triglyceride-lowering agents. There's been a lot of failures in cardiovascular. Just stated simply, we have no plans to go into a cardiovascular outcome trial with our APOC3 drug.

What we know is that remnant cholesterol is a very important component. And it may be that we'll learn something from our Phase III programs in this regard that give us more input on this particular question. But right now, that's not where we're going.

Vupanorsen, which is both a triglyceride and a cholesterol-lowering agent in mixed dyslipidemia seems like the best play in that market for actually impacting remnant cholesterol, where we think the bad actor is. Hope that's helpful..

Thanks, Luca. And I'd like to thank everybody who joined us and participated on the call today. We look forward to seeing you again at our Virtual Investor Day in December where we'll discuss, as I said earlier, our commercial plans for several of our most exciting late-stage programs in -- and much more detail.

Until then, thanks again for joining, and have a great day..

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