Hi everyone, good morning. I'm Gary Nachman, a Senior BioPharma Biotech Analyst at Raymond James, and we're very excited to have Beth Hougen, CFO of Ionis with us. Ionis is focused on developing RNAi-targeted therapies and has a very robust portfolio with several products already approved and on the market, and a lot of high-value opportunities in the pipeline across both rare diseases and also larger markets as well. Ionis started out with more of a partnership-driven model but is now in the process of transitioning to become a commercial company and just launched its first wholly owned product, TRYNGOLZA, for FCS, with more launches to come, and there are a lot of important catalysts coming up in the next 12 to 18 months, so it's great to have you here, Beth, to talk through the Ionis story, and thank you for coming.
Thank you for having us. We're excited to be here.
Great. So this is a little bit of a generalist audience. People may not be as familiar with Ionis. So first, just spend a few minutes giving a high-level view of the company's strategy and how it's been evolving, and then touch on what the key value drivers are going forward and when you expect to realize those.
Great. Happy to. As Gary mentioned in his introduction, Ionis started out about 35 years ago with the intention of developing a new technology for drug discovery and development called Antisense Technology. And as a part of that journey, our business model was to partner all of the drugs that came out of our research and early development pipelines. In the last five years or so, we've transitioned from that business model to one in which we're commercializing medicines ourselves. And that means that now we're taking our very prolific research engine and all of our development experience, and we're pairing that with commercial capabilities, and we're bringing those medicines directly to patients ourselves. So our first independent launch happened in late December with the approval of TRYNGOLZA for FCS, and that's going very well.
We're excited to have that launch underway, and we can talk about that maybe a little bit later. In addition to TRYNGOLZA, we're anticipating three additional wholly owned medicines to launch in the next three years. That includes donidalorsen for HAE. It includes zilganersen for a very rare leukodystrophy. And very importantly, it includes a broad patient population called severe high triglycerides for olezarsen, which is effectively TRYNGOLZA. We'll be expanding that out here, we hope, later next year. In addition to that, we anticipate that there will be four of our partnered medicines that will reach the market in the next three years as well. And many of those are for very large patient populations. Pelacarsen for Lp(a)-driven cardiovascular disease, bepirovirsen for HBV, also IgA Nephropathy drug, Factor B. And we also have WAINUA eplontersen for cardiomyopathy, for ATTR cardiomyopathy.
That's another expansion to a new indication because we're on the market right now with WAINUA in polyneuropathy. Combined, we anticipate multi-billion-dollar revenue opportunities from that. We are looking forward to the opportunity to treat thousands of patients with these medicines that are very transformative for life-threatening diseases for all of these patients. What all that means for us from a financial perspective is substantial revenue growth as we bring these drugs to market ourselves or with our partners, and ultimately positive cash flow, and we hope eventually down the road profitability on a sustained basis as well.
Excellent. Very good overview. Thank you. Understanding you're the CFO and not the Head of R&D, but maybe just for people not as familiar, just what sets you apart in terms of your RNAi technology? There are a few companies out there that have similar types of technology and capabilities. What do you see as your main strengths? And then maybe just talk briefly about you've been targeting the liver mainly over the years and now moving more into CNS and muscle and the importance of that thinking farther down the road.
Sure. So we, as I mentioned in my earlier remarks, we started out with the intent of developing our technology, antisense technology, for drug discovery. Over the years, in particular over the last several years, we've expanded beyond Antisense and into siRNA. We've expanded our technology very broadly to include additional delivery mechanisms. We've expanded the chemistries that we're using. So, what we believe differentiates us is the fact that we've got such a very long, long history of really building on the technology over all of these years. Right now, we're focused on advancing our technology for three reasons, or three purposes. One is to ensure that we can really protect the franchises that we're building right now with our current medicines and have longevity into the future with additional, maybe even more potent, more durable drugs for those same indications.
We want to open up new therapeutic areas, and we also want to extend the duration of our medicines. So we've got a variety of different things we're working on from a technology perspective. And that, I think, is one of the things that sets Ionis apart, is this focus on constantly improving the technology and pushing on the boundaries. We've got probably the world's leading medicinal chemistry team, and they are phenomenal at finding ways of enhancing the properties of our drugs. I think the other thing that's really important that's unique to Ionis, we've got two key franchises, cardiology and neurology. And I think from, as an RNA-based therapeutics company, we are leading in neurology.
I think that's, as I look forward, you know, three, five, seven, 10 years from now, I really believe that neurology is going to be a key focus for the company, and you're going to see tremendous opportunities for Ionis in that area and for patients in those areas.
That's great. A lot of exciting opportunities there in neurology. So then let's shift gears. So describe what the process has been like transitioning to a commercial company, how you guys prepped for it over the last year leading up to the TYRNGOLZA launch, and how you feel you've been executing thus far with it and some of the early read on key metrics, even though it's a small indication, but getting you started?
It is. It's important. You're right, and to your point, it's getting us started down that path. You can imagine taking a company that for 30 years was focused on partnering everything that came out of research and development. That is a massive task and undertaking, and I think we did it exactly the way Ionis does these things. We jumped in, we thought about what we needed to do, we decided we wanted to transition this company, we knew we needed to do this broadly across the whole organization. We couldn't just bolt on a commercial organization. This had to be fully integrated. It had to be able to mesh with the expertise we have in research and development so that we really had the best of all three of those key functions in the organization.
I think our TRYNGOLZA launch is a great example of the fact that that is actually working. The launch is off to a great start right now. It's early days. We were approved on December 19th. The team has been executing flawlessly. We had really one of our first prescriptions within a day or two of the approval. We had drug in channel within a week of the approval. Remind you, this is during the Christmas holidays. We have had patients really being able to administer drug within a couple of weeks. That's a really aggressive timeline, and it sets a high bar for all of the drugs that are coming behind it, and the launch is coming behind it. As far as the launch goes, as I said, it's early days, but it's going well.
All of the key metrics that we're paying attention to are performing as we would expect. We are identifying patients. We're getting them into their physician's offices to be diagnosed with FCS, and that can happen either genetically or clinically through a scoring tool. And then from there, we're able to help those patients and those healthcare providers get those patients on therapy through a whole suite of services we provide, including our Ionis Every Step program, which helps patients and physicians get on drug and stay on drug with a whole host of different offerings. So the launch is going well. We're seeing a broad range of physicians prescribing: endocrinologists, cardiologists, lipidologists. We are seeing specialists in lipids, which is great. We're really exceeding our expectations on getting reimbursement for these patients, which is really good to see.
That tells us that the physicians are prescribing to the right patients and the payers are understanding the value that TRYNGOLZA is bringing for these patients. So early days, but things are going as we would expect, and we're looking forward to the addition of TRYNGOLZA revenues to our already pretty robust revenue sources.
Excellent. Maybe just touch on the partnership with AstraZeneca for WAINUA and how that's helped in terms of your learnings and what your level of involvement has been with that launch. And that's been ramping up quite nicely, it seems, based on the numbers that they're reporting in a competitive space. Initially, when you announced that partnership, people were saying, "Well, you're giving up a lot of the economics on an important asset," but now you have the partnership helping you out commercially. So maybe talk to that a little bit.
Sure. Happy to. You know, I'm glad you brought up WAINUA because when we talked about and focused on this transition from an R&D organization that partnered everything to an organization that's going to hold on to its medicines and bring them directly to patients, we wanted to approach it in a very thoughtful way and in a stepwise fashion. So the first thing we did is we took WAINUA and we partnered it with AstraZeneca. Now, WAINUA initially is in ATTR polyneuropathy and is in a phase III study now for the broader patient population in ATTR cardiomyopathy. So having AstraZeneca, a powerhouse in cardiology as our partner, is exactly the right partner. So when we first were stepping into the partnership, we were doing all of the medical affairs work.
We had an entire medical affairs team in the field, and they've been there for several years building the market and the understanding of the disease. And we also then did, we were doing all of the global strategy work for the brand, and we were building a variety of different customer-facing teams, if you will. We transitioned all of that over to AstraZeneca. So they now have the customer-facing teams, including medical affairs, with one really important exception. We basically have the patient education managers. These are nurse case managers who, with the AstraZeneca program, are actually meeting with patients and with healthcare providers to help them understand the benefit of WAINUA and get on the drug, do self-administration training for the injections, all sorts of different services, just as we're doing with Ionis Every Step for TRYNGOLZA .
That's a really important function for us to have because it means we're getting direct feedback from our nurse case managers about how things are going in the field, in addition to what we hear from AstraZeneca on the commercial-facing sales team side, if you will. So that's been very, very beneficial to us, and it's helped us build our internal capabilities in order to be able to bring TRYNGOLZA and the other drugs to market. So the launch has been going great for WAINUA. We delivered accelerated sequential growth last year, including nearly doubling sales between Q3 and Q4. So, you know, again, very substantial growth quarter over quarter. We anticipate that's going to continue. A really important metric I want to share with this group on Q3 to Q4.
If you think about the growth between Q3 and Q4 in polyneuropathy broadly across WAINUA and the competitor product, there was $37 million worth of growth quarter over quarter. WAINUA delivered $19 million of that. More than 50% of that growth came from WAINUA. I think that's a really important statistic when you think about the fact that we had only been in the market for less than a year against an established competitor. So you can see that WAINUA is being well received, and that is very consistent with what we're hearing from physicians as well as from patients. So we anticipate that to continue this year.
Great. We'll get more into the cardiomyopathy a little bit after. But next upcoming catalyst, just sticking with the commercial train of thought here, how are you prepping for doni in HAE? That's a much bigger, even though it's still relatively small, but much bigger than FCS. And, you know, just your expectations to get a timely approval, a good clean label, and then how you see that market opportunity?
Donidalorsen is what we believe will be the potential preferred treatment for HAE. We believe that because of the strength of the data. We really think it's got a differentiating profile. It's under review right now in the U.S. as well as in Europe. The review is going very well. We anticipate approval with a clean label in August of this year, and we would be launching very quickly after that. I think it's August 21st is the PDUFA date, so it's right on the heels of the Labor Day holiday, much like TRYNGOLZA was on the heels of the December holidays, right? Christmas and New Year's. We're accustomed to this, and we've set a high bar with TRYNGOLZA , so we'll be launching as quickly as we can. We've been building our teams to be able to address the HAE market.
As you said, it's about 20,000 patients between the U.S. and Europe. It's a $3 billion in growing market opportunity across both the U.S. and Europe, with the U.S. being primarily a switch market and most of the growth in prophylactics coming from Europe. So this is a market that we'll address in the U.S. independently, and we've got a partner in Otsuka outside of the United States. And that's very consistent with our strategy. We want to be focused in the U.S. first, and eventually we'll emerge to a global presence commercially. So donidalorsen, we've got our teams on board now. We've built our field teams.
The additional reps. You're fully on board?
Yep. We've got our additional reps. I think they may have a couple of regions yet to fill, but the leadership is on, the regional leaders are on, and most of the reps are on board. So they will be getting trained here very shortly and then moving into the field to do disease education.
How much of a bigger team is it relative to TRYNGOLZA ?
That's a great question. TRYNGOLZA is a relatively small team, as you said. It's about 3,000 patients in the United States at most, and most of those are not identified. So you can address that with a relatively small team. We've got about, oh, 20 to 30 or so in the field. With donidalorsen, because it's so much larger, we're going to need a larger team. The competitors in the space have somewhere around 50 to 75 field-facing individuals. We would expect to be in that general range. We'll probably be on the slightly higher side because we're coming in and wanting to disrupt the space, right? One of the things that we did, knowing that this was a switch market, we designed the phase III study with a specific switch cohort that enabled us to really do a few things.
One, it helped us get patients onto donidalorsen and learn how to switch them from their existing therapies. That instruction manual is really important. Nobody else has done that before, and that helps physicians know how to switch their patients, know that they can do it safely. The data were very compelling. It helps payers understand that they can switch, you know, that patients can switch from the existing therapy to donidalorsen without having to pay for two therapies. That's very important, and it tells patients that they can do this safely and not worry about having additional attacks during that switching phase, which is really important to the patient community as well, so those data we think are going to be very important. They're going to be part of, they're part of our submission.
We hope they'll be part of the label because they are an important instruction manual, if you will. We've recently, at the Quad AI conference in San Diego, not this past weekend, we reported four-year open label extension data that demonstrated 96% reduction in attacks for these patients. That's substantial over what they currently have in their existing therapies, so we think doni is going to be an important addition to the market.
Okay, great. So let's hit on a couple of data catalysts. So first, you touched on this briefly, but TRYNGOLZA for severe high triglycerides that's coming in the second half. What your level of optimism is that you're going to hit the data points that you need to hit for that to be a good commercial product? And how much bigger of a market is it compared to FCS?
With TRYNGOLZA , we ran the FCS phase III study called Balance, and we designed that study, frankly, to reduce triglycerides. That's the key thing that needs to happen with these patients. They have triglycerides that are in the thousands. 150 is about normal. Actually, below 150 is normal. So imagine what that is when you think about thousands of mg/dL for these patients. That leads to some very substantial symptoms. Most seriously is the risk of life-threatening acute pancreatitis for these patients. Similarly, with severe high triglycerides, those patients may not have as high of triglyceride levels, but they're still at risk for acute pancreatitis and still have a lot of symptoms. In the Balance phase III study for FCS, we actually saw a very substantial reduction in acute pancreatitis. There were 11. This was a very small study. It was about 66 patients.
There were 11 events of pancreatitis in the phase III study in the placebo arm and only one in the 80 mg arm, which is the dose that we're taking to the market. That's a big difference. It's a very substantial difference. And what that told us is what we've always believed, which is as you reduce the triglyceride level in these patients, you substantially reduce the risk of acute pancreatitis. Now, with severe high triglycerides, it's a much, much bigger study. While the rate of acute pancreatitis is lower because these patients have lower triglycerides, we believe because of the size of the study and because these patients actually have functioning LPL, that they'll be able to actually reduce their triglycerides and we'll see acute pancreatitis improvements as well. So that's the goal. The goal is to reduce triglycerides as low as we possibly can.
The guidelines are well established. They say get below 500 mg/dL. We would like to get as low as we possibly can for these patients. And so that's what gives us confidence. Balance gives us confidence that we can see this in the phase III study for the phase III.
Phase III.
Phase III studies, sorry, for sHTG. Now, the patient population is about 3 million patients in the United States with severe high triglycerides. That's anything from 500 mg up. About a million or so of those patients have triglycerides in excess of 880 mg/dL. That's substantial. They are at severe risk of acute pancreatitis, and most of these patients feel their disease on a constant basis. They have severe stomach aches. They're often going to the emergency room for pain. They're having attacks of acute pancreatitis, so they're in the ICU. That's a huge burden on the patients and on the healthcare system. Of that 1 million patients, so that's a group of patients that we believe that we can address with this drug.
There's also in that 500 mg-880 mg range, several hundred thousand, excuse me, patients who we also believe have a history of acute pancreatitis who would be eligible for this drug and who we think we would be able to address, so initially.
How many more reps do you think you would need? Just.
It's a great question, so we think that to get to this, you know, a fraction of this 1.5 million patients or so, we think we'll need somewhere around 150-200 reps, so the interesting thing is you don't need a lot of reps to get to these because there's a small number, relatively small number of physicians who are treating these patients, so we believe we can have a blockbuster medicine and treat these severely ill patients with about 200 overall, you know, 150-200 reps in the field, and we'll be subsuming our FCS field teams into the broader sHTG teams because FCS is really just a small subset of the broader patient population.
You think that's greater than a billion opportunity, market opportunity?
We do. We do initially. And that's for those, you know, those aggressive treaters, those early adopters who understand that the lower you get triglycerides, the better you position these patients to get them out of the risk of acute pancreatitis. From there, you can expand through disease education and awareness to capture, you know, more of that million and a half patient population or so.
Okay. We're a little short on time. There's definitely a few other, now this is great, but a few other things I want to get to. So for next year, you have two very important data catalysts for partnered programs. Pelacarsen for Lp(a) lowering with Novartis in the first half of the year if everything goes well. And then the ATTR cardiomyopathy with AstraZeneca in the second half of the year. So without getting too much into the details, just, you know, talk about the importance of those data readouts, why you're confident that if they read out positively, these are going to be very big opportunities for you. And then just touch on the economics with the partners so people appreciate the value that you're going to get from those.
Sure. Both of those are cardiovascular outcome studies, which I think is a really important factor is that we're actually moving into these broad cardiovascular diseases with these two drugs. Pelacarsen for Lp(a)-driven cardiovascular disease, we're confident in that study for two reasons. One is that there's a lot of data that demonstrates that Lp(a) is an independent cardiovascular risk factor. Secondly, the phase II data demonstrated in our study the ability to get 98% of those patients below the threshold for the risk of cardiovascular disease. So we've been able to demonstrate that the drug can do what it needs to do to get these patients out of harm's way. And there is a lot of data to suggest it's an independent risk factor. What this phase III study is going to demonstrate is can you actually reduce cardiovascular risk with this drug?
We in Novartis are excited about the data and looking forward to it in the first half of 2026. These are 8 to 10 million patients in the world with high Lp(a), or in the United States with high Lp(a), and Europe. And so we think it's a very substantial opportunity. Our economics are really attractive. We've got royalties that go up to the low 20% range. And between Novartis, our partner who's commercializing the drug, and Royalty Pharma, who we have a royalty monetization agreement with, we will actually have the ability to earn $1.3 billion in milestones. And those milestones are regulatory milestones as well as sales milestones. So a very substantial economics for this drug. For ATTR cardiomyopathy in the second half of next year, I think there's already a drug that will be approved, we believe, later this month in this indication.
That positive phase III data I think gives us a lot of confidence that the silencers are going to be an important mechanism for.
For the category.
Exactly, for the category. So we're looking forward to seeing our phase III data. We have a much larger study. We believe that that study design actually puts us in a great position to be able to capture what AstraZeneca, our partner, believes is a more than $5 billion market opportunity with this drug in this disease area.
And just to be clear, that's just with WAINUA alone. That's not the overall market.
That's just WAINUA. That's just WAINUA. Peak sales of more than $5 billion. Exactly. And our economics are actually very attractive there. We have royalties in the U.S. in the mid-20% range. Outside the U.S., our royalties go up into the mid-teens where we have no cost-sharing obligations. And we have the ability to earn another several hundred million in regulatory milestones and nearly $3 billion in sales milestones. And those sales milestones are achievable because they start at $500 million global sales and go up to $6 billion in global sales. So if you think about a $5+ billion annual peak sales, you can see that the $3 billion is achievable.
Okay. I'm going to ask you to keep your CFO hat on. And how well capitalized is the company currently? What do you think your spending requirements are for the next couple of years? And how do you see the path to profitability, especially now that you're transitioning to a commercial company and you have all these other programs ongoing?
Sure. We've got a long history of financial discipline at Ionis. And I take a lot of pride in that as we do across the organization. We're well capitalized today. We ended last year with $2.3 billion in cash. We're anticipating ending this year with $1.7 billion in cash. So still a very healthy balance sheet that's enabling us to invest as is necessary behind the launches of these wholly owned medicines, as well as to advance the rich pipeline that we have that's going to continue to enable us to bring these medicines to market on a very steady cadence year- over- year. As far as our spending goes, the vast majority of our spending is in sales and marketing. That's where the growth is going to come from. Sorry, I shouldn't say the vast majority.
Actually, the majority of our operating expenses are in research and development, but the growth is coming from sales and marketing. It's a really important place for us to be investing. We're going to invest for the next couple of years or so. And then from that point on, you can see with our wholly owned medicines having, you know, multi-billion dollar peak sales opportunities and our partnered medicines having multi-billion dollar peak sales opportunities, that that revenue growth on top of already a very substantial base of revenue from existing marketed products and R&D relationships will be able to drive us to cash flow positive, and so we anticipate.
That's without raising any more money?
I think at this point.
With all the milestones.
We have a lot of milestones. We have a lot of business development opportunities. We still have drugs in our pipeline that could enable us to partner that would help bolster our balance sheet. And so right now, I won't say never because I've got my CFO hat on, but I think it's important to see that there's a lot of opportunity for us to be able to invest as much as we need to, drive to this revenue growth, drive to positive cash flow, and still maintain a very healthy balance sheet.
Okay, and also just very quickly, just touch on the royalties that you get from SPINRAZA with Biogen and the importance of that and your confidence that those are going to continue at roughly the same level, if not higher, for the foreseeable future. I mean, that's an important source of funding for the company as well.
It is, absolutely. SPINRAZA was approved as the first disease modifying therapy for Spinal Muscular Atrophy a number of years ago. It's a multi-billion-dollar drug, and we earn royalties up to the mid-teens %. It's about more than $200 million or so of revenue on an annual basis, and that revenue drops almost directly to the bottom line. Exactly. Beauty of royalties, right? And so that's a really important source of revenue and cash for the company. We expect that SPINRAZA has been resilient, let's face it, in the face of competition, and we anticipate that that will continue. There's now a high dose version of SPINRAZA that is going through regulatory review and has a PDUFA date in the U.S. in September. And we anticipate that that could have the ability to even return SPINRAZA to growth.
That's partnered with Biogen, and the review is in their hands and the commercial activities are in their hands, but we're confident in its future.
Okay. Excellent. We're up on time. Thank you so much, Beth. That was great. And good luck with all the upcoming catalysts. Hopefully the stock will follow.
Yes.
Thanks everyone. Have a good day.
Thank you.