Analyst Conference Summary

biotechnology

conference date: October 31, 2019 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2019 (third quarter, Q3)

Forward-looking statements

Overview: Strong Onpattro sales.

Basic data (GAAP):

Revenue was $70.1 million, up 57% sequentially from $44.7 million, and way up from $2.1 million year-earlier.

Net income was negative $208.5 million, up sequentially from negative $219.5 million, and up from negative $245.3 million year-earlier.

Diluted EPS was negative $1.92, up sequentially from negative $2.02, and up from negative $2.43 year-earlier.

Guidance:

reiterated prior

Conference Highlights:

John Maraganore, CEO of Alnylam, said: "In the third quarter of 2019 and recent period we saw strong execution on the global commercialization of Onpattro. In the final months of 2019, we aim to extend this encouraging track record with pivotal data from our lumasiran program, continued enrollment in our HELIOS-A Phase 3 trial and initiation of the HELIOS-B Phase 3 study with vutrisiran." We realize some of our stakeholders want to hear how we will balance revenue growth with investment in the pipeline. The management team of focussed on this.

Inclisiran (ALN-PCSsc): Alnylam’s partner, The Medicines Company, announced positive Phase 3 results for inclisiran for hypercholesterolemia in three Phase 3 studies Q3 2019.

Alnylam received Priority Review from the FDA for the givosiran New Drug Application (NDA) for AHP (actue hepatic porphyria). The FDA set an action date of February 4, 2020, and the agency has indicated that it is not currently planning an advisory committee meeting as part of the NDA review.

Revenue from collaborators: $24.0 million from Genzyme/Sanofi.

Onpattro (patisiran) revenue was $46.1 million, up 21% sequentially from $38.2 million. Over 600 patients were on therapy at the end of the quarter. Received reimbursement approvals in England, Belgium, and Germany. Approved in Japan, which is expected to become the second largest national market. We are seeing stronger disease awareness and growth in potential patient numbers. Payers have been supportive. We are seeing some patients taking both a stabilizer (tafamidis) and onpattro.

Cash and equivalents balance at the end of the quarter was $1.74 billion, down sequentially from $1.97 billion. No debt.

Non-GAAP net income negative $163 million, up sequentially from negative $198 million, and down from negative $157 million year-earlier. EPS negative $1.50, up sequentially from negative $1.83, and down from negative $1.56 year-earlier.

Onpattro (patisiran) 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.

Cemdisiran (ALN-CC5) continued 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, continued 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 $286 million consisted of: $5 million for cost of goods sold; $161 million for research and development; and $120 million for general and administrative expense. Operating loss $216 million. Interest & other income was $7 million. $0.4 million income tax benefit.

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

Q&A Summary:

When might you start giving sales guidance? We are thinking about it. We could give guidance on the year-end call.

Helios B and Onpattro trials, how will you get enough patients? We are opening the trials to wild type patients, who are relatively common compared to inherited patients.

Cash statement confidence? We are not providing specific guidance, but are focussed on the issue of financial sustainability. We believe 2019 will be the peak loss year.

Tafamidis is still ramping, and we are allowing patients on it into the studies. But the main comparison will be with placebo.

Givosiran for AHP, how will it be introduced? Attacks come at different frequencies. Any given attack can be life threatening or cause a disability. We tested on patients with 4 or more attacks per year. We await the FDA to see what the label is, and physicians will have to consider that.

Competition in field from tafamidis? We expect prescriber base to evolve over time. Cardiologists are now talking about TTR cardiomyopathy. There are more and more centers of excellence popping up around the country. In Europe tafamidis was already available, used mostly for wild type polymyopathy. New prescribers are now mainly in community sites. Physicians are beginning to realize they can get reimbursement for onpattro for tafamidis patients. Switching from tafamidis to onpattro after progression is taking place mainly in Europe.

Cash flow break even? We have no guidance, but believe there are several factors, including royalties from partners if they get drug approvals, that will result in strong revenue growth.

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