Analyst Conference Summary

biotechnology

conference date: August 6, 2019 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2019 (second quarter, Q2)

Forward-looking statements

Overview: Commercial sales are ramping fairly well, but have a long, long way to go to get this company to break-even.

Basic data (GAAP):

Revenue was $44.7 million, up 34% sequentially from $33.3 million, but up 49% from $29.9 million year-earlier.

Net income was negative $219.5 million, down sequentially from negative $181.9 million, and down from negative $163.6 million year-earlier.

Diluted EPS was negative $2.02, down sequentially from negative $1.73, and down from negative $1.63 year-earlier.

Guidance:

Alnylam updated its 2019 annual non-GAAP R&D expenses to be in the range of $550 to $575 million (previously $550 to $590 million) and non-GAAP SG&A expenses to be in the range of $390 to $400 million (previously $390 million to $410 million).

Conference Highlights:

John Maraganore, CEO of Alnylam, said: "We are pleased with the continued strong progress in the global launch of Onpattro. We believe that continued commercial execution with Onpattro and expected upcoming launches of other products puts us on a path toward attaining self-sustainability in our business, delivering on the promise of RNAi therapeutics for patients around the world. During this period we also achieved several key milestones with our late and earlier stage pipeline, including positive Phase 3 results with givosiran. We expect this track record of commercial and R&D execution to continue well into the future. Specifically, as we turn to the second half of 2019, we look forward to pivotal data readouts from two programs (inclisiran and lumasiran) and additional Phase 3 initiations, namely APOLLO-B with patisiran, HELIOS-B with vutrisiran, and ILLUMINATE-C with lumasiran. Each of these planned milestones will bring us closer to achieving our Alnylam 2020 vision of building a multi-product, global biopharmaceutical company."

Alnylam previously announced a partnership with Regeneron for CNS and Ocular RNAi therapies. 50-50 structure, but Alnylam to receive milestone payments, including the initial $800 million in Q2 2019.

Revenue from collaborators: $6.5 million from Genzyme/Sanofi.

Onpattro (patisiran) revenue was $38.2 million, up 45% sequentially from $26.3 million. $10 milllion was from the EU, $28 million from the US. Over 500 patients were on therapy at the end of the quarter. Received reimbursement approvals in England, Scotland, Germany, Canada, France and Sweden. Approved in Japan, which is expected to become the second largest national market.

Cash and equivalents balance at the end of the quarter was $1.97 billion, up sequentially from $1.29 billion. $30 million in long-term debt. Received $800 million in cash in Q2 from the Regeneron collaboration.

Non-GAAP net income negative $198 million, down sequentially from negative $149.9, and down from negative $162 million year-earlier. EPS negative $1.83, down sequentially from negative $1.42, and down from negative $1.61 year-earlier.

Onpattro (patisiran) will start a new Phase 3 study in mid-2019 for ATTR Amyloidosis in patients with cardiomyopathy.

Alnylam continued a Phase 1 trial for vutrisiran (ALN-TTRsc02), an ESC-GalNAc-siRNA conjugate targeting TTR for the treatment of ATTR amyloidosis, which is expected to enable a once-quarterly subcutaneous dosing regimen. A Phase 3 trial began in late 2018. Announced plans to initiate an additional Phase 3 study, HELIOS-B, in hereditary and wild-type ATTR amyloidosis with cardiomyopathy in late 2019.

Fitusiran for hemophilia and rare bleeding disorders Phase 3 ATLAS pivotal study continued. Additional Phase 2 data was presented in Q2 2019. Sanofi Genzyme is a partner in the program.

Vutrisiran (ALN-TTRsc02) subcutaneously administered ATTR treatement continued a Phase 3 study and will start one for a variant ATTR indication in late 2019.

Givosiran (ALN-AS1) for acute hepatic porphyrias (AHPs) Phase 3 trial completed enrollment and positive topline data was announced. The NDA was submitted to the FDA and an application was also made to the EU. Priority review was granted so the PDUFA date is February 4, 2020.

Lumasiran for PH1 (primary hyperoxaluria type 1) Phase 3 trial completed enrollment with topline results are expected in late 2019 and an NDA in 2020. Announced alignment with the FDA on the trial design for ILLUMINATE-B, a Phase 3 study of lumasiran in PH1 patients less than six years of age with preserved renal function.

ALN-GO1 for primary hyperoxaluria type 1 (PH1) Phase 1/2 study in Europe continued and updated positive data was presented.

ALF-F12 targeting factor XII is now in development for the treatment of hereditary angioedema and for thromboprophylaxis.

Inclisiran (ALN-PCSsc): Alnylam’s partner, The Medicines Company, announced in April 2019 that the Independent Data Monitoring Committee for the ongoing inclisiran Phase 3 clinical trials (ORION 9, 10, and 11) conducted its seventh planned review of safety and efficacy data from the ORION trials and recommended that the trials continue without modification. Topline results expected in mid-2019 with an NDA possible by year end. Alnylam could receive milestones and up to 20% royalties.

Cemdisiran (ALN-CC5) for aHUS (atypical hemolytic-uremic syndrome) had started a Phase 2 study, but enrollment has been slow, so cancelled. Instead initiated a Phase 2 study in IgA nephropathy.

In Q1 2019 received approval to initiate a Phase 1 study of ALN-AGT, an investigational RNAi therapeutic targeting angiotensinogen (AGT) for the treatment of hypertension in high unmet need populations, including patients with resistant or refractory hypertension, chronic kidney disease or heart failure.

ALN-HBV Phase 1 study continued.

ALN-AGT Phase 1 study for hypertestion was initiated in Q2 2019..

Alnylam continued a Phase 1 study of ALN-AAT02, for the treatment of alpha-1 antitrypsin deficiency-associated liver disease (alpha-1 liver disease), with initial results expected in 2019.

With Vir Biotechnology, initiated a Phase 1/2 study of ALN-HBV02 (also known as VIR-2218), with initial results expected in 2019.

See also Alnylam pipeline.

Operating expenses of $281 million consisted of: $4 million for cost of goods sold; $164 million for research and development; and $113 million for general and administrative expense. Operating loss $236 million. Interest & other income was $18 million. $1 million income tax benefit.

November 22, 2019 will be the R&D Day.

Q&A Summary:

Cardio doctor decisions, Pfizer drug? The emerging landscape, it is too early, but we are gaining new prescribers every quarter. Having multiple players has raised awareness. Tafamidis, it is too early in the launch, but we think Tafamadis is the choice for wild types, but Onpattro is the drug of choice for hereditary, mixed phenotype.

Onpattro 500 patients, by geography? We broke out revenue by region, not patients, for competitive reasons. 98% of prescribed patients are reimbursed.

Greater than $500 million givosiran opportunity buckets? Recurrent population is about 1000 in US and EU. 5000 patients with sporadic disease. One attack can be life threatening. Patient journeys last years, lots of misdiagnosis, so probably many more patients. Multiply that by an orphan drug price point and you get to the $500 million.

Onpattro pricing, US v. ex? We have held the price band tight.

US growth rate? Concern about US growth is wrong. We had consistent, solid growth in the US. Ex US should accelerate as new EU nations and Japan ramp.

1000 patients by year end guidance, confidence in? It includes expanded access program and open label study. We are roughly at 750 by that count now.

Alnylam Act is to help physicians identify the patients, it is a free genetic test. A patient often has relatives that want to take this test. It is an arms-length relationship, so it does not lead necessarily to an Onpattro prescription.

Alnylam Act id'd patients, path to be on drug, cardio patients? HTTR can bump into cardiologists and other specialties that can misdiagnose the disease. But cardio community has better diagnostics now, and physicians are becoming more aware. A very significant portion of patients have neuropathy, which Onpattro has a label for.

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