Earnings Call: Q1 2021

May 5, 2021

Good morning, and welcome to Ionis Pharmaceuticals First Quarter twenty twenty one Financial Results Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. As a reminder, this call is being recorded. I would like to turn the conference over to Wade Walk, Vice President, Investor Relations, to lead off the call. Please begin. Thank you, Betsy. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to find the press release and related financial tables, including a reconciliation of the GAAP to non GAAP financial measures that we will discuss today. We believe non GAAP financial results better represent the economics of our business and how we manage our business. We we have also posted slides on our website that accompany our discussion today. With me on today's call are Brett Monia, chief executive officer Beth Haugen, chief financial officer and Richard Geary, executive vice president of development. And joining us for our Q and A will be Yunveza Khatore, Chief Corporate Development and Commercial Officer and Eric Swayze, Executive Vice President of Research. I would like to draw your attention to Slide three of our presentation, which contains our forward looking language statement. We will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. And with that, I'll turn the call over to Brett. Thanks, Wade. Good morning, and thank you for joining us on today's call. Last year, we introduced a new strategy to drive growth by developing and commercializing medicines from our own pipeline. Since that time, we have taken a number of key steps that have advanced our strategy and moved us closer to successfully commercializing our own products. Most recently, we expanded our Sovi distribution agreement and restructured our TEGSEDI operations. This transaction unlocks significant resources that we are redeploying to advance our wholly owned pipeline and prepare for commercialization of our highest priority medicines, which include TTR LICA and APOC3 LICA. We are also using savings from the Sovi transaction to invest even more in our technology to further broaden the reach of our therapeutic capabilities. Turning now to our pipeline. We were particularly pleased with the Phase II data from IONIS PKRX patients with hereditary angioedema, or HAE. Based on these encouraging results, we're advancing into a phase three study where we hope to further demonstrate the potential of this medicine as a best in class product that could change the standard of care for patients with this disease. We also recently initiated pivotal studies with two wholly owned neurological disease medicines, ION-three sixty three and ION-three seventy three, for patients with Fuss ALS and Alexander disease respectively. Given the severe unmet need of these patients, and the progress we have made with regulators, both medicines are on an accelerated path to the market. And we are pleased with the progress we're making across our rich Phase III pipeline, with medicines for patients with ATTR amyloidosis, FCS, LP driven cardiovascular disease, and ALS. These Phase III programs remain on track, with data from the Phase III VALOR study of tofersen in patients with SOD1 ALS expected this fall. Positive tofersen results would demonstrate for the first time that a disease modifying treatment is possible for patients with ALS. A positive outcome in this study would also move tofersen one step closer to becoming our next commercial product. And additionally, Tofersen's success would further solidify our leadership position in the development of first in class medicines for the treatment of neurological diseases. In support of our strategic and pipeline objectives, earlier this year we launched a large capital project to expand our manufacturing and R and D capacity. This project is important as we move our late and mid stage medicines toward the market. It's also important as we advance our technology with new chemistries, including novel glycochemistry and new routes of administration. We have made significant progress in focusing our efforts on advancing our pipeline and our business strategy. Our financial results reflect our strategic investments and keep us on track to achieve our 2021 guidance. And importantly, we remain well positioned to have 12 or more marketed products in 2026. With that, I'd like to turn the call to Beth to review our first quarter financial results, and Richard will discuss recent pipeline updates and preview key upcoming catalysts through the rest of the year. After Richard, I'll wrap up our prepared remarks before taking your questions. So now on over to Beth. Thank you, Brett. In February, we provided guidance for this year that reflects our new strategy to maximize the value of our wholly owned medicines, focused primarily on commercializing our rare neurological and cardiometabolic disease programs. Our first quarter results of $112,000,000 in revenue, 159,000,000 in non GAAP operating expenses and a non GAAP net loss of $45,000,000 reflected this new strategy and were in line with our expectations. Now to turn to our revenues. SPINRAZA generated over $521,000,000 in global sales. We earned $60,000,000 in royalty revenue as a result and virtually all of that revenue falls to our bottom line as profit. Our first quarter SPINRAZA revenue decreased slightly compared to the prior quarter because our royalty rate resets at the beginning of each year. As in prior years, we expect to reach the highest royalty tier by midyear. The RESPOND and DEVOTE studies continued to progress well. These studies remain important elements of Biogen's ongoing efforts to enhance SMA patient outcomes and guide treatment decisions. We look forward to additional steps Biogen plans to take to further reinforce SPINRAZA's proven efficacy and safety profile in SMA patients of all ages. SPINRAZA remains the SMA market leader and with over eleven thousand patients on treatment and over sixty thousand SMA patients in markets where Biogen has a commercial presence, we believe SPINRAZA will continue to be a foundation of care for the treatment of SMA. We also generated combined TEGSEDI and WAYLIVRA revenue of $20,000,000 As a reminder, our guidance reflects a shift in revenue for TEGSEDI and WAYLIVRA due to the change in distribution under our with Sobe. We are pleased with the smooth transition of our TEGSEDI and WAYLIVRA operations to Sobe, which are now complete in Europe and well underway for TEGSEDI in North America. Under our new distribution model, our commercial revenues from these products shift from product sales to distribution fees based on Sobeys' net sales. In the first quarter, our revenues reflected this shift in Europe. Beginning in the second quarter, revenue from TEGSEDI sales in North America will also reflect this shift. In addition, we earned nearly $30,000,000 of R and D revenues in the first quarter, which we generated from multiple sources related to our partnered programs. Our non GAAP operating expenses were $159,000,000 in the first quarter, which represented a modest increase compared to the same period last year and was in line with our guidance. The increase was driven by higher R and D expenses related primarily to advancing the Phase III studies of TTR LICA and APOC3 LICA and development activities for multiple programs across our wholly owned pipeline. As expected, our SG and A expenses decreased in the first quarter, primarily due to cost efficiencies we realized from the integration of Akcea and the restructuring of our European operations. An important element of our new strategy is our focus on investing internally for growth and our first quarter results highlighted this aspect of strategy. With our first quarter results, we remain on track to achieve our 2021 guidance of a net loss of less than $75,000,000 on a non GAAP basis. We expect our revenues in Q2 to be similar to the first quarter, and we're projecting an increase in revenue in the second half of this year, driven in part by increasing R and D revenues as we achieve key milestones for our partner programs. Already in the second quarter, we achieved a $10,000,000 payment in Biogen for ADVANION five forty one, our medicine targeting Ataxin-two for the treatment of ALS. We project operating expenses to increase over the course of this year as our mid- and late stage medicines advance in development. We expect our R and D expenses to increase as the Phase III studies of TTR LICA and APOCIII LICA progress, as we initiate the APOCIII LICA Phase III study for patients with severely high triglyceride, and as compared to advance PKL into a Phase III study. We expect our SG and A expenses to decrease further in the second half of this year as we realize savings from our Sobe transaction. Last month, we finished our balance sheet when we completed a $630,000,000 convertible notes offering. These notes carry a 0% interest rate. We completed this transaction to accomplish two primary goals, to refinance the $310,000,000 of 1% convertible notes due in November And second, to fund a large capital project we recently initiated. We evaluated multiple financing options to achieve our goals. And ultimately, with a 0% interest rate, we determined that the low cost of capital we secured through the convertible debt offering was our best financing option. Importantly, we maintain a strong balance sheet to support our wholly owned pipeline and our technology. Use a portion of the proceeds from our debt offering for a large capital project to expand our manufacturing and R and D capacity. We expect this multiyear project to cost between $250,000,000 and $350,000,000 We anticipate completing the project in 2024 and once complete, we will have the manufacturing capacities to support the future needs of our wholly owned pipeline. Additionally, we will increase our capacity to bring forward novel chemistries, including new LICA chemistry, continue critical functions as we advance our wholly owned pipeline to the market. This project enables us to build on our leadership in development chemistry and manufacturing of oligonucleotide therapeutics and to ensure we have the infrastructure we need to achieve our strategic objectives. As you can see, we have taken important steps already this year to drive growth and to position us to achieve our goal of 12 or more marketed products in twenty twenty six. And with that, I'll turn the call over to Richard. Thank you, Pat. We continued to execute on our pipeline goals this quarter, achieving a number of successes and advancing towards significant value driving catalysts. We're particularly pleased with the positive Phase II results from IONIS JLRx, our once monthly subcutaneously administered medicine for the prophylactic treatment of hereditary angioedema, or HAE. IONIS PKK LRx demonstrated a mean reduction of up to ninety seven percent in HAE attacks, together with favorable safety and tolerability. We look forward to reporting these Phase II, results in greater detail later this year. We are now advancing Ionis PKK LRx into a Phase III study. We hope to further demonstrate its potential to be the best in class prophylactic treatment for patients with HAE. We look forward to sharing our Phase III plans with you later this year. We also continue to be pleased with the progress of our Phase III pipeline, including our partnered programs, talcarsen and tofersen, as well as our wholly owned programs. IONIS TTR LRx remains on track in our studies in patients with TTR polyneuropathy and TTR cardiomyopathy. And APOC3 LRx also remains on track in the Phase III study in patients with FCS. We expect to begin a second Phase III study of APOC3 LRx later this year. This second Phase III study will be in patients with severe hypertriglyceridemia, which has an estimated prevalence of over three million patients in The U. S. We also expanded our late stage pipeline with the initiation of pivotal studies for ION-three sixty three in patients with fuss ALS and of ION-three seventy three in patients with Alzheimer's disease. Because of the strong efforts of our development team, both of these medicines for rare, fatal diseases, are on accelerated paths to patients. From our mid stage pipeline, just this week positive data from the Phase II study of IONIS AGTLRX in patients with resistant hypertension were published in the Journal of American College of Cardiology. We also plan to present these data at the ACC conference later this month. Based on these Phase II results, we've advanced IONIS AGTLRX into a larger Phase IIb study in patients with resistant hypertension on three or more antihypertensive medications, and a Phase II study in patients with chronic heart failure with reduced ejection fraction. In a Phase IIa study of IONIS GHR LRx in acromegaly patients poorly controlled on somatostatin analogs. We achieved substantial reductions in growth hormone binding protein, which is a surrogate marker for GHR inhibition, together with favorable safety and tolerability. We plan to discuss these results in greater detail together with interim results from our ongoing open label extension study later this year. With IONIS ENaC 2.5 Rx, we recently learned of a finding in a long term preclinical toxicology study. While we believe we would have been able to work through this finding, doing so would impact our timelines. As a result, we have reevaluated the totality of available data and decided to continue further development of IONIS ENaC 2.5Rx. We have a number of late stage research programs in our pulmonary pipeline, which we are now prioritizing and continuing to evaluate for further development. Now to upcoming catalysts for neurologies pipeline. We're very pleased with the progress of IonisMAP TRX, our medicine designed to reduce tau protein associated with Alzheimer's disease. We were encouraged by the top line results from Ionis Map TRX Phase one study in patients with Alzheimer's disease Biogen reported earlier this year. IonisMAP TRX demonstrated durable, time, and dose dependent reductions in CSF tau protein and was generally well tolerated in this study. Biogen plans to report these results at the Alzheimer's Association International Conference in July. Our ALS program is also advancing well. Tofersen has the potential to become the first disease modifying treatment for ALS and fundamentally change the ALS treatment landscape. We believe tofersen may also have the potential to slow progression or even delay the onset of disease in presymptomatic SOD1 ALS patients, similar to the profound effects demonstrated in presymptomatic SMA patients treated with SPINRAZA. Biogen recently initiated the ATLAS study to address this question, and hopefully demonstrate a similarly profound effect with tofersen in presymptomatic ALS patients. And with the programs for fuss ALS, C9 ALS, and for the broader causes of ALS, we are addressing essentially all forms of this disease. Importantly, with our pipeline progress to date and our key upcoming data catalysts throughout this year and over the next few years, we remain well positioned to achieve our goal of 12 or more marketed medicines in 2026, including potentially six or more wholly owned medicines. And with that, I'll turn the call back over to Brett to close this portion of the call. Thank you, Richard. In the first quarter, we took important steps to maximize the value of our wholly owned pipeline. We continue to advance and expand our Phase III pipeline with IONIS TTR LRx and APOC3 LRx advancing as planned. And through the initiation of pivotal study plus ALS and Alexander disease. We also delivered positive results for IOLENS PKK LRx in HAE and are planning to advance this medicine into a Phase III study. We have taken important steps to strengthen and streamline this through our acquisition of Akcea and the restructuring of our Tegsedi and Way liver operations. We have accelerated our commercial strategy, retained key commercial expertise and unlocked significant resources that we are reinvesting in our wholly owned pipeline technology and the build out of our commercial capabilities. Importantly, we are financially strong and on track to achieve our 2021 financial guidance. We're using our strong balance sheet to invest in our strategic priorities and execute on all of our goals. I'm proud of the progress we have already made in these areas, and we look forward to sharing more this year as we advance our medicines and move closer to our goal of 12 or more marketed medicines in 2026. And with that, we'll now open it up for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Luca Izzi with RBC. Please go ahead. Oh, fantastic. Thanks so much for taking my questions. Maybe two here. One, maybe on Huntington's disease here, for either Eric or Richard. I think we saw the full, data last week from Roche, and it looks to me that at least the high dose may have unfortunately accelerated the disease given that the higher dose actually increased ventricular volume over time versus the low dose in placebo. Wondering if you share the same view here and whether such data substantiate hypothesis that sparing the wild type may matter here? So again, any thoughts there would be helpful. And then second on HAE, congrats on advancing the program into Phase III. So again, wondering if you could give us some color on how you're thinking about the Phase III study design. Will it be placebo controlled? Will we need to run a head to head trial versus Teixiro? Are you exploring monthly dosing or bimonthly dosing? Again, any thoughts there would be great. Thanks so much. Hi. It's Eric. I guess I'll take the Huntington question and kick it over to Richard for a much more entertaining PKK answer, I hope. On on Huntington, yeah, the data was presented at CHDI, and it basically reinforced what the IDMC had, and it was the same data set. It's that the the drug wasn't working and providing a benefit. It it's true if you look at the absolute numbers that the the more frequent dosing was descending a little faster than placebo, but all of those, curves were within the bounds of natural history. As to what it means, I think it's premature to tell. Both had some hypothesis that they discussed that all of which are are valid and make sense to investigate, but I think we really need to unpack the data and let their analyses and see what we can learn from the study. We really don't don't know at this point. So on the HAE question, just a quick upfront that, we have some, regulatory, meetings over the next couple of months, and we will be, bringing details of the phase three program a bit later this year. At this point, we're moving forward with those, regulatory and then into a phase three program. Yeah. And, Luca, let me just add to that a little bit. So and what I think would be very helpful for Arneza to provide some of her thoughts too on why we are so excited about the market opportunity for this drug because we really do think it's a has the potential to be the very best in class. It will certainly be a placebo controlled study. I mean, that's what is expected in phase three trial designs, and there's precedent for that with TekZero and other other drugs as well. And certainly, monthly dosing is what we're planning to do right now in the phase three study, which offers a significant advantage, we believe, over therapies, which is over to a nasal. Yeah. Yeah. I'd be happy to add some color over here. I think going back to your question, Luca, it gonna be placebo controlled or head to head? Certainly a question for us as we went into the marketplace to kind of test out the profile of our PKK product, and we looked at it versus current treatment options, including TEQZERO. And we really, you know, got the feedback, based on the profile that we have, that this is, has the potential to be a best in class profile. And, really, placebo controlled study will be more than sufficient to really demonstrate that. If you take a look at kind of the trifecta of efficacy data that we are able to deliver on this, you know, prevention of attacks, the fast onset of max clinical efficacy, and, you know, the reduction in kind of acute treatments, that's a trifecta of efficacy that's very, you know, pleasing and attractive for the HCPs in the marketplace. So that along with, you know, the more convenient administration is just a very highly valuable competitive profile. So we're feeling very great about what this is gonna bring to the unmet need for hereditary angioedema patients in prophylactic treatment. Thanks, Anisa. And as Richard said, we'll provide deep more details on the Phase III design later this year. Got it. Fantastic. Thanks so much. Super helpful. Thank you. Thank you. Our next question comes from Yaron Werber with Cowen. Please go ahead. Great. Thanks for taking my question. I have a question specifically to start with on acromegaly. It sounds like the, if I recall correctly, the study was fully enrolled in December. It's a twelve week study, but plus there's an open label extension. And it looks like you're planning on releasing the data in the second half, and it says plus the OLE. Any medical meetings that we should be aware of where this could be targeted, or is this going to be in a press release? And then any thoughts about what's the next steps with this program, given what you know from the phase one data already? Thank you. Sure, Yaron. So we are wrapping up the study now, and we'll be going through the data. And analysis of that data will take us into second half of the year, as I mentioned in in his in his statements earlier. And then we're gonna share the data, as soon as we can. We'll probably will not wait for a medical meeting to share the results of that study because we don't have one targeted right now. Although we'll look for such a place so we can share the data in detail. But we'll figure out a way this summer to get the data out along with the open label extension data, which has accumulated more and more data. So it's a rich data set that we didn't want to recite up that review. Remember, that we also have a second study in progress for our GHR LICA medicine, acromegaly, which is in frontline monotherapy, phase two, which is getting off the ground now and getting started. You know, I think we're gonna wanna look at all the data before we can make a decision on the next steps, for either the patient population, in the somatostatin treated patients that are poorly controlled versus monotherapy, and then make decisions on what the next steps for the program would be. Great. And then also, any update on the potential phase one or IND filings for Angelman syndrome? Thanks so much. Yeah. We're hoping to get the clinical study started this year. So you've definitely selected a construct, and you're planning on on filing an IND? I mean, have you made a decision definitely to go forward? Yes. You. Correct. Definitely. You got it. Thank you, Yaron. The next question comes from Yanan Zhu with Wells Fargo. Please go ahead. Hi. Thanks for taking my question. I just have a a first question on the update, from the ENaC program. I wanted to under if you could, share a little more about, the the findings from the toxicology studies, long term tox study, and whether the tox is specific for the pulmonary route of administration and whether it's related to the target or generally speaking, just the ASO presence in lung? Thanks. Sure, Yannan. So I wanna just emphasize that the clinical data for our ENaC in phase one and 2a gave us very encouraging results. It has nothing to do with clinical data. We demonstrated target engagement in phase one and good safety in cystic fibrosis patients as well as in patients with COPD. And the cystic fibrosis data will be presented at ATS, later this month. We don't the preclinical finding was part of the long term, tox, as Richard stated in his statements. It's gonna take us time to figure out what that's about. And due to the delays that are just associated with those types of investigations, we took a look at our emerging pipeline in pulmonary diseases. And we think we have better targets to invest in that'll have that'll bring greater value, to the company and to the patients going forward. And, and we do not believe that this is read through to the platform for pulmonary disease at all. It's a this is something that happens in preclinical tox studies sometimes, and we're gonna work through it. Got it. Got it. That's very helpful. And then a question on the TTR LICA program. Alnylam recently reported vutrisiran phase three study in TTR polyneuropathy. Just wondering your take on their data and the their, you know, three every three months frequency of administration and how you see that product profile and whether there's opportunity for the TTR LICA to to position against that profile? Thanks. Sure. I I completely respect the question, but, Yanan, but it's not our position to comment on other people's data. What I is that we love our very much we like our drug a lot. And the phase three study in polyneuropathy is enrolling very well, and we're looking forward to the results of that study next year. And the cardiomyopathy study for TTR are enrolling very well in addition. On ASA, we've done quite a bit of market research on frequency of administration and the value that brings to the marketplace, and I would love to have Oneza maybe comment on that. Yeah, sure, I'd be happy to, Rayde. I think your question was monthly versus quarterly. In general, I would say, most, kind of market conditions, particularly from a patient perspective as well as a HCP clinician perspective, you know, there are definitely, you know, some improvements, in profile when you go from a daily to a weekly, you know, and a weekly to a monthly. But after that, I call it there's just law of diminishing returns on more extended frequency, particularly for a sub q. And we've found that here for TTR as well. We've done some extensive market research to understand that dynamic a little bit more because it's really one of our key products that we're bringing forward to commercialization. And we're not seeing really a big difference between the monthly and the quarterly at all. Think rightly so, physicians are more excited about the profile of the product, as well as the large clinical trial that we have ongoing in cardiomyopathy, and really looking forward to seeing our data with and without standard of care. I think that's going be the place of big differentiation here. Got it. Thank you. That's very helpful. Thank you. The next question comes from Yale Jen with Laidlaw and Co. Please go ahead. Good afternoon. Good morning, and thanks for taking the questions. We understood the failure of the Huntington disease trial, and I believe you guys have a very great confidence on the tofersen in the HAIAS. So would you mind just maybe compare or contrast a little bit between these two and besides the the different diseases and where your confidence seems stem from for the VALOR trials? So I'll open up, and then, it's a very good question, Yale. And now, maybe Eric can expand. So, we're confident in our neurological disease platform. We think it's leading in the industry in many ways. SPINRAZA and entopresin coming right behind that, and plus ALS, and a whole host of other drugs. All of the drugs, and there are quite a number now, not all have been presented yet, all of the drugs that we've took into clinical trials have shown target engagement, and robust target engagement in our trials. So we know we're hitting the root causes of diseases, or the targets we're going after to test our clinical hypotheses. And SOD1 ALS, Dokresin is no different than that. We've shown very nice reductions in SOD1. And based on the phase two data, that was published in the New England Journal of Medicine that we presented and presented, our confidence is high in tofersen. And our confidence is and it lends us even greater confidence in for ALS in general Because, you know, if dofersen is successful and, like I said, the preliminary, not preliminary, but the phase two data was very encouraging, it bodes very well for the rest of our ALS franchise, which we have four drugs now in clinical trials, two in phase three. The other part of your question I think had more to do with being able to target different regions of the brain. How is ALS compared to Huntington? Is it compared to other drugs in our pipe in in our pipeline for neurological diseases? And there I'll ask Eric to jump into the weeds a little bit deeper. Yeah. Sure. Yeah. I Brett alluded to the great things in the data packages is that we have real evidence in the New England Journal paper for improvement in disease. We didn't have that in Huntington, and all we had was target reduction and decided to to look at it in the phase three. As as far as targetability, we talked about this at length before. I I think our our treasure trove of preclinical data has done a good job of teaching us where we can target in in throughout the brain. And we have a high level of confidence that we can target all the regions that are affected in ALS. And we have a high level of confidence that we can target, much of the brain regions that are affected in Huntington's disease. And Roche has talked about these extensively at medical meetings, and we presented a lot of the data. It is true that regions like the CAUDA are less susceptible, but have a case that makes sense to us that we could target that region. So I I have a very high level of confidence that, especially in programs like the Tofersen program and our MAPT program and others that are are targeting the whole brain and need to target the whole brain that we can engage those regions. And as a reminder, Yale, as mentioned in Richard's statements, earlier, the MAPT, the tau data, will be presented in July, I believe, this summer. Yes. And I think that that will lend even further confidence because as Biogen has said, the reductions in tau have been substantial and durable. Okay. Great. That's very helpful. And maybe just one more question here, which is a little bit forward looking one. In terms of the HAE, you guys seems to sort of decide to move forward with Phase III. Let's just assume the successful. Just curious whether this is a drug you guys want to potentially launch it by yourself or potentially to be a partner out at least at this early stage of the thinking? And thanks. It's a great question, Yale, and it's, one that we're working through right now. We think this is a great drug. We really do. And whether or not we will, keep this and fit ourselves, or or not, we will provide an update that we'll provide an update on the phase three design later this year. We're moving into the phase three study ourselves. So just if you could just stay tuned on that, it's it's, you know, right now, Anees' team is conducting, a lot of, market research and competitive competitive profiling work to make the make the business case or not. And and if you just stay tuned, we'll we'll give you an update in a in a little while. Okay. Great. Thanks a lot. And, again, congrats for the quarter. Thank you. The next question comes from Paul Matteis with Stifel. Please go ahead. Hey. This is Alex on for Paul. Thanks for taking our questions. I guess, I have two. The first one is a clarification on ENaC. It sounds like the preclinical tox, with that, it may be related to knocking down ENaC long term. Do I have it right that you're no longer going to pursue, you any ENaC program, either this program or another follow on program in ENaC? And then secondarily, just curious if you wanted to give any thoughts on business development with all the cash you guys have now. Thanks. So as I said earlier in the question that was posed, we're still working through the data preclinically. We don't have any evidence directly that this is related to ENaC inhibition. Let me let me make this point. This is a very important point. The the observations we may have made preclinically were not related to the same types of that were observed for small molecules, systemically applied ENaC inhibitors. We're not seeing hyperkalemia. We're not seeing effects in the kidney, that sort of thing. So this is separate. And again, I think we'll work through it. And we don't believe based on the data, all the data we have, we don't think that this is a read through to our pulmonary, our ability to go after pulmonary diseases. But what it does represent is a delay. And we have a lot of drugs coming with other targets, and although we're not slamming the door closed on ENaC in future, those targets will start approaching and catching up to ENaC pretty quickly. And we think that those are significantly better targets for pulmonary diseases. And that was really though that that in totality was really the basis for why, we discontinued E NET. We have we're really trying to focus and and on on the programs that bring the greatest value, and, you know, let's leave it there. Great. And just so just to be clear, it's really more of a pause on the ENaC development rather than a discontinuation? No. We discontinued the ENaC, this this program in in favor of, other programs. Thank you. The next question comes from Jason Gerberry with Bank of America. Please go ahead. Hey, guys. Thanks for taking my questions. Just one quick follow-up on PKK and then the AGT question. Just on PKK, so it sounds like, you know, you view kind of a diminishing return on dose convenience, you know, beyond a month, but as it pertains to, every, two weeks versus a monthly that, you know, I guess you would say that's a key point of differentiation as you think about characterizing a potential best in class profile. Because it looks like dosing convenience is sort of the main feature that you'll be able to hang your hat on relative to the Takeda prophylactic agent. And then, ahead of ACC, just wanted to probe a little bit, you know, just in terms of what we're hearing from physicians and in terms of what they wanna learn about the profile of this drug and its you know, as it pertains to consistency and durability of impact on blood pressure. You know, one thing I think we're hearing is that physicians just want to make sure there aren't dramatic spikes in blood pressure on a week over week basis. So curious if you could set the table, if we'll get any data that might help us understand a little bit about that attribute of, your ASO there. Thanks. Good questions. The attributes of our PKK LICA, certainly a key attribute is the dosing, frequency, but it goes beyond that. And again, I'll ask Onasia to expand. Yeah. Be happy to. So, yeah, I think you're right. I think the the important thing here, and and I I talk about these as each medicine has, in the market that they're entering, also has just, you you have to actually look at dosing and convenience in there. And for the HAE market, as you know, with TEG0, it's a high volume injection every two weeks. And most of the market research and the physicians said, as always, the efficacy is only as good as its compliance. So we do believe that that will be a big play, but we do think that is not the main thing we're gonna hang our hat on, as you said. I think it goes back to what's really important for these patients in prophylactic treatment and goes to, again, prevention of attacks, the number of zero attack rates that you get, and the ability of our product profile to deliver on that with a faster onset of reaching max clinical efficacy. And the third prong of of of, kind of an order of efficacy parameters is just the ability to reduce the the number of acute, medications that they take. So when you think about it, really it's just all three parts of the efficacy paradigm that we're just winning on, along with the convenience that will again have patients take this on a regular basis, be compliant, and deliver on the efficacy of the product. Yeah, that's great. And I think just to add to that, the Phase II study hit the nail on the head on all three of those. And we've got all those patients also rolled over into an open label extension and looking very carefully at long term, lack of breakthrough. And that's also a very, important component. And then, the AGT, talk a little bit about what is to be presented at ACC, but also the phase 2b study and what we're hoping to get out of that. Yeah. I mean, you'll be able to actually go to the publication right now. It's available in the, I believe it's posted, in the Journal of American College of Cardiology. And then the other piece to that, is the presentation that we'll be giving. There have been no, either hypotension or hypertension on recovery, events, and absolutely that's, an extremely important piece to the puzzle. So the data is showing, that that's a very clean profile, and we've moved into a Phase IIb study that will further, elaborate on those issues. Yeah, the Phase IIb study is really powered to nail down the the magnitude of blood pressure control we expect to achieve in a phase three study. It's a it's a significantly larger study. It's a longer study. Select those for a phase three study. And to really rule out any of the of the concerns, hopefully, that physicians have raised. You've mentioned spikes in blood pressure, hypotension, and so forth. So, that's the intent of the phase two b study. But for certainly, the the publication and the ACC presentation will support the safety and the, efficacy of this mechanism and this drug. Got it. Thank you. You're welcome. The next question comes from Jessica Fry with JPMorgan. Please go ahead. Hey, guys. Good afternoon. Thanks so much for taking our questions. Not to belabor this, but just following up on the prior questions on ENaC. If the tox you notice is not, you know, related to the platform or exposure in the lung, and it's not related to the target, what's your current thinking about what it might be related to? Well, we don't know, Jess. That's the thing we have to work through. Know, spurious tox findings sometimes happen in long term tox studies. And, you know, it could be a sequence related effect of that particular molecule. It could be something like that, but we really have to work through it. The confidence, comes from other experience with other drugs. Yeah. And I think further, it's the clinical experience. I mean, the clinical experience was absolutely clean. And we were into, longer term, treatment in the clinic. But, know, timelines can get, significantly impacted by a preclinical finding, and this was just one of those. And we want to make sure that we're focused. We're early in development, and and we've got so we've got almost a the riches are beyond what we should be looking at. We have so many targets, and some of these targets are really impactful in particularly COPD, and some of these other very interesting and areas that we wanna focus on. So we took a step back, and, we're looking very carefully at this and focusing, what we do in the midterm. At the same time, we've got this incredibly rich phase three going with all of the products that have now moved into late stage, development. And we just want to make sure that we're not diluting our efforts, and we're focused. Got it. Makes sense. If I could work in two other questions, just on the Alexander disease, program, can you talk about some of the efficacy measures you have for ION-three 73 confidence to advance that into a pivotal study and the size of that opportunity and just how well you think the product might be able to address the market? We really haven't disclosed the full protocols or the endpoints for phase three program. We're very confident that we can engage this disease being the known genetic cause of the disease. It's toxic gain of function of the protein called GFAP, and that's what we're lowering. And our preclinical work in this has been published, it's really remarkable improvements in what I think are pretty good preclinical models of disease. So here, I think we have, based on the preclinical data and the known pathophysiology of the disease, I think we, have a very high level of confidence that we're in the right spot for this. Amazing. Do you have anything you can share on prevalence? Yeah, we're looking at about four hundred patients globally from a prevalence perspective. And again, as Eric said, this would be the first and only therapy for Alexander's disease. And I think the preclinical data and the models that we have suggest that we're gonna, you know, normalize the production of excess GFAP and and, you know, improve gross motor function, reduction of significant symptoms that these patients are feeling both on the cognitive side and and some of the GI side and really prevent disease progression. Onasia, it would also be helpful if we talk a little bit about, if you don't mind, Jess, about our rare disease neurological whole young pipeline more broadly, and about how GFAP and FUS and all these synergize together as a franchise that we're planning to bring to the market. Yeah. No, absolutely. Really good point. When we think about these, when we see a prevalence for an individual disease and condition, we're really looking about how we scale these collectively together to get the significant commercial synergies that will be really important in the marketplace. And we have them with three products, Alexander's being one of them, but we also have just one for Lafora disease, and later on we're looking at, I don't know if we've disclosed one other, but we have one more. And they're just servicing kind of the severe pediatric diseases associated with epilepsy in the marketplace, so they really come together as a whole. And then when we add in, you know, FUS and ALS, even though you wouldn't think there there may be as many synergies, there's actually a pretty high overlap on the physicians who are treating that as well. So it comes together very, very nicely for us as a portfolio in urology. Got it. And maybe just a a last question. Going back to the comment about reaching the peak royalty tier for SPINRAZA around midyear similar to last year, can you just unpack that a little, some of the assumptions underlying that in light of the competition you're seeing in The U. S. From Mibrisi? Sure, Jess. It's Beth. Hi. So I think, as you can see, when you look at the effective royalty rate, on a quarterly basis over the past years, we get to our maximum royalty rate, very quickly. The tiers, there are four tiers, and they vary quickly. And, therefore, you know, our sense is that SPINRAZA, you know, will continue to perform as it has, you know, recently, and, therefore, we would get into the into the highest tier, you know, on the similar path a similar time frame as we have in the past in the past few years. And you know that that gets us up into that 15% very quickly. Got it. Thank you. Thanks, Chris. The next question comes from Mani Faroohar with SVP Leerink. Please go ahead. Hey, guys. Thanks for taking the questions. I hate to beat a dead horse, but I'm gonna beat a dead horse a little bit. So if you if given that you're where you are in ENaC, in some ways, in the lead of your closest competitor in terms of maturity of data, Is the the right interpretation of what you're saying that it would that going back and redesigning and moving forward with a different construct would have been require would have been requisite to feel comfortable getting around this preclinical tox? Is that is that the right way to interpret what you said? And then I have another not being a not being a difficult question. We don't have an answer to that first question because we're still going through the data, trying to figure out, what the next what the best path forward is. So that might require a different drug, or it might not. But, we think we have we think that there are better targets out there that we're working on, you know, bring great value in the epithelial sodium channel. That was that was our lead drug. That that was that was furthest along, but we have others that we think will be more provide even greater benefit to broader disease indication than ENaC. That makes a lot of sense. And then on HAE, obviously, you have a really exciting dataset optically superior to what's on the label, for any of the approved therapies, although, obviously, crossfrog comparisons are fraught by nature. When you think about commercialization, obviously, the quality of therapies available has has improved from, you know, the time Rupinav is kind of the lead asset. How do you think about openness and willingness to switch? And in commercialization, would you see this primarily as a switch market versus other existing prophylactic therapies? Do you see chapped in newly diagnosed patients as the lowest hanging fruit? Like, how do you think about commercialization strategy, presuming you continue to have what appears to be a best in class event reduction profile? Oneza? Yeah, I'm happy to take that one. Really great question here. So I think that when you're on prophylactic treatments, you know, as we think about entering the market over here, it's clearly for new patients, this is the, you know, the best choice. Right? So for new patients, we've kind of tested this. We have the best in class profile. That's where it's gonna go. For patients who are already on therapy, I think, you know, therein will be, how do we get, you know, switches in the marketplace? So we're really thinking of this in a variety of different ways. Are there kind of breakthrough attacks happening? There definitely would be a sense of patients there, patients who are not compliant on the full set of therapies that they're on. So there's an opportunity there. And then I do believe that we're looking at particularly a switch design in our in our phase threes as well, although it's not confirmed. We're definitely evaluating, whether that will be actually nice added benefit to our our design as well. Alright. That makes sense. That makes sense to me. And do do we do we have a sense of where what proportion of patients do you think on modern on the most modern end of prophylactic therapy, Teixeira, etcetera, What proportion of them based on your KOL conversations, interactions with clinicians, clinical trial experience, what portion of those patients see meaningful enough breakthroughs, to fall into that that early share switch, early adopter population for you guys? Just ballpark, I know it's I know we're far from being a commercial asset quite yet. Yeah. Hard to give you percentages over here on that. It's a really good question. I think we're going to do some claims database analysis and do a retrospective look to get a better sense of that. It's definitely in our list to help evaluate. But given, again, the most, I think profound part of the research and insightful for us was that the compliance piece, right? And given TekSEROs at two weeks and four weeks, there are a lot of patients who are actually trying to stretch this out over the four weeks just because it's a it's a very high volume administration. So we're do seeing a lot of people who are not compliant and as a result then have breakthrough attacks. Right? As to quantify that, I think it's gonna take a little bit more work on our part before I can give you a better sense of where that is. No. That makes a lot of sense. Thanks. And, I'm gonna I'm gonna hop back in the queue because I know I've got a lot of open waiting. The next Okay. Well, so maybe maybe, Betsy, we'll take one more, and then we'll have to close it out. The next question comes from Myles Muntar from William Blair. Please go ahead, Hi. Thanks for squeezing me in. Just a question on Biogen sort of pushing for a higher dose for the C9ORF program. Just wondering whether that's got any read through to valor and whether there's any room to maybe push the dose afterwards kind of in a SPINRAZA like scenario. And for the FUS programs and the ATAXAN programs at an earlier stage, is it likely that we'll see a push in the dosing in those early clinical studies? So is that the drug is very well tolerated. And Biogen is very committed to ALS, and in particular, c nine ALS as well as SOD one ALS. And so before moving into phase three, you wanna make sure you get the dose right. So they're they wanted to get more data and examine a higher dose. So I I I don't really think the read through is anything more than that than. It's really that the drug is very well tolerated, and they wanna get more experience before taking the plunge for phase three. And I didn't quite get your fuss ALS question. We have selected the dose. We have a single dose level for phase three that we're evaluating the program. So we're not planning to look at multiple doses in fuss ALS. We think we have the right dose, and, and we're and we're planning ahead. We don't plan to escalate dose or deescalate. Okay. Yeah. I guess that was that was my question. Just like why the c nine not wolf program specifically that they're testing a higher doses? I know they're not involved in the FUS program, but even the acaxin program. Like, why wouldn't you just go with a higher dose here? Is there a risk of overshooting the knockdown of this protein? No. There's no risk of on target that, you know, toxicity, over overdosing, or anything like that. Each drug is different. So, Miles, for c nine, you know, we do have an an allele selective drug. It only because of the the nuances of the way the transcripts are processed, our drug only lowers the pathogenic expanded c nine r seventy two. So we don't we don't look for the nonpathogenic c nine r. Okay. Cool. Thanks for the questions. Thanks, Miles. And and and with that, I'd like to thank everybody who joined us on our call today. It's been a highly eventful start to the year, and we look we look forward to more throughout the remainder of the year and sharing those results with you. So with that, thank you, and have a great day. The conference has now concluded. Goodbye. Thank you for attending today's presentation. You may now disconnect.