Yahoo Finance Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) Q1 2024 Earnings Call Transcript
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) Q1 2024 Earnings Call Transcript May 2, 2024
Alnylam Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.52272, expectations were $-0.75. ALNY isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day and thank you for standing by. Welcome to the Alnylam Pharmaceuticals Quarter One 2024 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a Q&A session. [Operator Instructions] Please be advised that today’s conference is being recorded. And I would now like to hand the conference over to the company for their remarks. Please go ahead.
Christine Lindenboom: Good morning. I’m Christine Lindenboom, Senior Vice President, Investor Relations and Corporate Communications at Alnylam. With me today are Yvonne Greenstreet, Chief Executive Officer; Tolga Tanguler, Chief Commercial Officer; Pushkal Garg, Chief Medical Officer; and Jeff Poulton, Chief Financial Officer. For those of you participating via conference call, the accompanying slides can be accessed by going to the Events section of the Investors page of our website, investors.alnylam.com/events. During today’s call, as outlined in Slide 2, Yvonne will offer introductory remarks and provide general context. Tolga will provide an update on our global commercial progress. Pushkal will review pipeline updates and clinical progress and Jeff will review our financials and guidance, followed by a summary of upcoming milestones before we open the call to your questions.
I would like to remind you that this call will contain remarks concerning Alnylam’s future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent periodic report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements. With that, I will turn the call over to Yvonne.
Yvonne?
Yvonne Greenstreet: Thanks, Christine and thank you everyone for joining the call today. 2024 is off to a very strong start and shaping up to be an impactful year for Alnylam. Commercially, in the first quarter, we delivered robust product revenue growth for our four wholly-owned medicines, achieving $365 million in revenue or 32% year-over-year growth compared to Q1 2023. An important part of this was the continued momentum from our TTR franchise, which delivered 29% year-over-year growth versus Q1 2023. From a pipeline perspective, our zilebesiran hypertension program was a major highlight with positive results presented from the KARDIA-2 Phase 2 study, evaluating zilebesiran in combination with certain standard-of-care antihypertensives and the initiation of KARDIA-3.
This program represents a significant opportunity to reimagine the treatment of hypertension and to position Alnylam as the leader in treating cardiovascular disease. To that end, we’re on the cusp of reporting top line results from the HELIOS-B Phase 3 study of vutrisiran in patients with TTR amyloidosis with cardiomyopathy. As we’ve highlighted previously, we have many reasons to be highly confident in a positive HELIOS-B outcome, including the encouraging data from the APOLLO-B study of vutrisiran. And we remain on track to report top line data from HELIOS-B in late June or early July, which if positive is expected to support the filing of an sNDA by the end of this year. With this progress, we continue to advance our Alnylam P5x25 goals, making our Alnylam a top tier biotech developing and commercializing transformative medicines for patients around the world with rare and prevalent diseases, driven by a high yielding pipeline of first and/or best-in-class product candidates from our organic product engine, all while delivering exceptional financial results.
With that, let me now turn the call over to Tolga for a review of our commercial performance. Tolga?
Tolga Tanguler: Thanks, Yvonne and good morning, everyone. Q1 was another strong quarter for our commercial portfolio, delivering $365 million combined net product revenues as we continue our growth momentum with our rare and TTR franchises. Our overall portfolio grew by 32% in the first quarter versus prior year as we continue to steadily increase the number of patients on our therapies. First, let me summarize our first quarter TTR results. The TTR franchise achieved $264 million in global net product revenues, representing a 4% increase compared with the fourth quarter of 2023 and 29% growth compared with the first quarter of 2023. Our U.S. combined TTR sales of ONPATTRO and AMVUTTRA increased by 3% compared with the fourth quarter of 2023 and a robust 35% year-over-year, driven by continued strong AMVUTTRA uptake.
The U.S. year-over-year growth was primarily driven by the following: a 39% increase in total demand versus the first quarter of 2023, which was driven by the strength of ongoing AMVUTTRA patient uptake, more than offsetting the decrease in patients on ONPATTRO that switched to AMVUTTRA, inventory dynamics decreased reported growth by approximately 4% as both ONPATTRO and AMVUTTRA inventory in the channel decreased in the quarter, another favorable sign of robust Q1 demand. Now let me turn to our international markets where TTR franchise growth increased by 5% compared with the fourth quarter of 2023 and 23% year-over-year. The year-over-year growth was primarily driven by increased demand for AMVUTTRA as new patient adds remain robust, including launches at the end of last year in Spain, Italy and Sweden, and continued strong ONPATTRO performance in a few markets where AMVUTTRA is not yet available.
As a reminder, AMVUTTRA is now reimbursed in all major international markets. Demand growth in international markets was partially offset by lower pricing in certain countries, primarily in Germany, as the end of the initial six-month free pricing period for AMVUTTRA occurred in Q2 2023 as previously reported. I would also like to provide additional color on the continued growth momentum of our TTR franchise in the U.S. We remain confident and very pleased with the impact we’re seeing from AMVUTTRA [ph] expanding the opportunity for our TTR franchise is reflected by the robust 35% year-over-year growth that we achieved in the first quarter of 2024. This is a growing category with significant unmet need remaining. Importantly, leading market indicators remain aligned with our demand growth, galvanizing AMVUTTRA’s market leadership, both in patients and healthcare providers for the treatment of patients with hATTR amyloidosis with polyneuropathy.
Here are some key highlights. More physicians are prescribing AMVUTTRA, evidenced by the more than 50% year-over-year growth in our prescriber base. We strongly believe hATTR-PN is a condition that requires high engagement between healthcare professionals and their patients. AMVUTTRA offers the flexibility for this engagement to happen at the hospital, at an outpatient center or for many patients at home. In alignment with our patient access philosophy, we continue to demonstrate seamless access to AMVUTTRA, with more than 99% of our patients having confirmed access and approximately 70% of patients having zero out-of-pocket costs. Last, we are monitoring it seriously and compliance metrics which show that more than 95% of our patients remain on therapy and comply with AMVUTTRA’s quarterly dosing regimen.
As we have previously communicated, we believe approximately 80% of the 25,000 to 30,000 patients with hATTR-polyneuropathy globally are undiagnosed or untreated, which represents a significant opportunity to find and treat more patients. Given that hATTR-polyneuropathy is also a rapidly progressing disease, we believe patients and physicians stand to benefit most from a therapy that rapidly knocks down the disease causing protein with unparalleled speed, depth and duration. AMVUTTRA offers these benefits in a single quarterly dose and has the ability to reverse the polyneuropathy manifestations of hATTR amyloidosis, combined with a favorable access track record and well established safety profile. With this foundation, we are in a position of strength as we embark on a branded patient awareness campaign to raise patient awareness of the disease and the benefits of AMVUTTRA and its unique rapid knockdown profile.
Shifting to our rare franchise and the performance of GIVLAARI and OXLUMO, our global rare franchise delivered $101 million in combined global net product revenue during the first quarter, representing a solid 9% increase compared with the fourth quarter of 2023 and an impressive 40% growth compared with the first quarter of 2023. For GIVLAARI, revenues increased by 21% in Q1 compared to the same period last year, with the following regional dynamics. A 28% increase in the U.S., primarily driven by growth in new patients on therapy, with modest additional upside from favorable gross-to-net changes; 10% growth in rest of the world, primarily driven by demand growth, which was partially offset by an increase in gross-to-net deductions year-over-year.
For OXLUMO, we delivered a robust 77% increase in revenues year-over-year, which was driven by the following regional dynamics, a 47% increase in the U.S., primarily driven by demand growth with additional favorability from lower gross-to-net deductions, a robust 94% growth from rest of world markets driven by increased demand, a favorable gross-to-net adjustment and the timing of orders in partner markets. Given the nature and magnitude of the rest of world’s Q1 gross-to-net and partner market timing benefits, we anticipate that we will see a reduction in global sales for OXLUMO in Q2. In conclusion, we are very pleased with our continued growth momentum, delivering a robust 32% revenue growth versus prior year that positions us well to reach our 2024 net product revenue guidance.
With that, I will now turn it over to Pushkal to review our recent R&D and pipeline progress. Pushkal
Pushkal Garg: Thanks Tolga and good morning, everyone. Let’s begin with our TTR franchise where we eagerly await top line results from HELIOS-B, our outcome study designed to expand the label for AMVUTTRA to include the treatment of patients with hereditary and wild type ATTR amyloidosis with cardiomyopathy. As you’re aware, on our Q4 earnings call in February, we announced enhancements to the HELIOS-B statistical plan to optimize the study for success and to best support a strong and competitive label. These changes were informed by insights from the APOLLO-B data and emerging data from the field. With these optimizations, we remain focused on clinical outcomes of death and hospitalization, which are critical to all stakeholders.
But now we plan to evaluate these outcomes in the overall population as well as the monotherapy population, which is where we believe AMVUTTRA will have the largest treatment effect and will best demonstrate the drug’s true impact. We also streamlined the secondary endpoint structure to focus on those clinical measures that we believe will best highlight AMVUTTRA’s potentially differentiated profile and its benefits on stabilization of this progressive disease. And we enhance the overall statistical powering of the study by incorporating up to an additional three months of event collection at the tail end of the study period, the most critical period and firmly establishing HELIOS-B as the longest placebo controlled study conducted to date in ATTR-CM.
We remain on track to report top line results in late June or early July. At that time, we plan to provide p-values on the primary and secondary endpoints as well as key details regarding safety. We also expect to provide some high level information on subgroups, including patients on baseline tafamidis. Full results are expected to be presented at a scientific congress soon thereafter and assuming positive results from HELIOS-B, we expect to submit a supplemental NDA to the FDA in late 2024. Turning now to zilebesiran, our investigational RNAi therapeutic being evaluated as a treatment for hypertension. We made some very exciting progress in the first quarter on this program. Hypertension is a global health crisis and the leading addressable cause of cardiovascular morbidity and mortality around the world.
Unfortunately, despite available therapies, up to 80% of patients have uncontrolled disease and beyond poor control, there are a number of other aspects of hypertension management that contribute to increased cardiovascular risk, namely poor medication adherence, variability in blood pressure and lack of night time dipping. We believe that zilebesiran has the potential to address all of these unmet needs and improve cardiovascular outcomes by providing tonic control of blood pressure. At the ACC Conference a few weeks ago, we presented the full results from the positive KARDIA-2 Phase 2 study that evaluated the efficacy and safety of a single subcutaneous dose of zilebesiran when added to one of three standard of care antihypertensives, a thiazide-like diuretic, indapamide, a calcium channel blocker, amlodipine or an angiotensin receptor blocker olmesartan.
The study achieved its primary endpoint, demonstrating clinically and statistically significant placebo adjusted reductions of up to 12.1 millimeters of mercury in 24 hour mean systolic blood pressure at month three as measured by ambulatory blood pressure monitoring when zilebesiran was added to one of the three background medications. The study also achieved the key secondary endpoint, demonstrating clinically significant additive reductions in office systolic blood pressure at month three across all three independent cohorts. Finally, zilebesiran demonstrated an encouraging safety and tolerability profile when added to standard of care antihypertensives. We are very excited by these results, showing additive efficacy and good tolerability on top of two agents with orthogonal mechanisms and on top of an ARB, which also works in the RAS pathway, which support continued development.
To that point, we recently initiated the KARDIA-3 Phase 2 study, which will evaluate zilebesiran on top of two or more agents in patients who are at high cardiovascular risk. As this slide shows, we and our partners at Roche have robust plans to bring zilebesiran forward as an agent that can reshape the treatment of cardiovascular disease. This includes our intention after KARDIA-3 to run a cardiovascular outcomes trial where we can demonstrate the benefits of tonic blood pressure control in patients at high CV risk by showing reductions in cardiovascular morbidity and mortality. Wrapping up with the pipeline, our extrahepatic efforts in the CNS continue to progress this quarter as well. As we announced on our Q4 earnings call, we received FDA clearance to initiate the multiple dose portion of the Phase 1 study of mivelsiran, formerly known as ALN-APP in early onset Alzheimer’s disease, and remain on track to initiate a Phase 2 study in cerebral amyloid angiopathy early this year.
So, in sum, we’ve made great progress in advancing our pipeline and platform with much more to come. As a reminder, we plan to file proprietary INDs for nine programs by the end of 2025 against targets in the liver, CNS, muscle and adipose. If we include partnered programs, we anticipate 15 new INDs by the end of 2025, representing a doubling of our clinical pipeline by the end of next year. This remarkable and unique pace of innovation puts us in a great position to have a robust, self-sustainable pipeline that can deliver meaningful impact to patients across multiple disease areas. With that, let me now turn it over to Jeff to review our financial results and upcoming milestones. Jeff?
Jeff Poulton: Thanks, Pushkal and good morning, everyone. I’m pleased to be presenting a summary of Alnylam’s Q1 2024 financial results and discussing our full year guidance. Starting with a summary of our P&L results for Q1 2024 compared with Q1 2023. Total product revenues for the quarter were $365 million or 32% growth versus the first quarter of 2023, with both our TTR and rare franchises reporting strong growth of 29% and 40%, respectively, primarily driven by strong demand as Tolga previously highlighted. Net revenue from collaborations for the quarter was $119 million or a 225% increase compared to the first quarter of 2023. The increase was primarily due to revenue recognized under our collaboration and license agreement with Roche, including $65 million of milestone revenue associated with initiation of the zilebesiran KARDIA-3 clinical trial and an increase in revenue recognized under our collaboration agreement with Regeneron.
Royalty revenue for the quarter was $11 million or a 63% increase compared to the first quarter of 2023. The increase was driven by higher Leqvio sales compared to the same period in 2023. Gross margin on product sales was 85% for the quarter, which was consistent with the first quarter of 2023. We expect our gross margin on product sales will be lower for the balance of 2024, driven by higher royalties paid on AMVUTTRA as AMVUTTRA growth continues at a brisk pace. Our non-GAAP R&D expenses increased 13% in the first quarter compared to the same period in 2023, primarily driven by increased investments in zilebesiran, our HELIOS-B trial and our preclinical pipeline. Our non-GAAP SG&A expenses increased 15% in the first quarter compared to the same period in 2023, lower than our 32% growth in product sales as we continue to deliver operating leverage on our journey to achieving profitability.
The source of SG&A expense growth was primarily related to TTR marketing investments to help drive polyneuropathy patient finding efforts, as well as increased investment in preparation for a potential launch in cardiomyopathy next year. Our non-GAAP operating gain for the quarter was $2 million, representing more than a $100 million improvement compared with Q1 2023, primarily driven by strong top line results, both in product sales as well as revenue from collaborations as previously highlighted. Finally, we ended the quarter with cash, cash equivalents and marketable securities of $2.4 billion, in line with the $2.4 billion we reported at the end of 2023. We continue to believe our current cash balance will be sufficient to bridge us to a self-sustainable financial profile.
Now I’d like to turn to our financial guidance for 2024. Today, we are reiterating our 2024 guidance as presented during our earnings call in February. We anticipate combined net product revenues for our four wholly-owned commercial products will be between $1.4 billion and $1.5 billion, corresponding to a 13% to 21% growth rate at January 31 at FX rates. Q1 was a strong start to the year, giving us confidence in our ability to meet or exceed our product sales guidance. We will, of course, carefully review our progress at Q2 to determine if any changes to our guidance are warranted. Our collaboration and royalty revenue guidance range is $325 million to $425 million. And lastly, our guidance for combined non-GAAP R&D and SG&A expenses remains a range between $1.675 billion and $1.775 billion, the midpoint of which reflects 9% growth compared with 2023.
Let me now turn from financials and discuss some key goals and upcoming milestones slated for early and mid-2024. We expect three trial initiations in early 2024, including a Phase 2 study for mivelsiran in patients with cerebral amyloid angiopathy, Part B of the Phase 1 study of ALN-KHK in type 2 diabetes and a Phase 1 study of ALN-BCAT in hepatocellular carcinoma. And has been highlighted we remain on track to report top line results from the HELIOS-B study of vutrisiran in late June or early July. Given how important the readout is, we plan to enter a quiet period beginning May 13 in advance of those results. Let me now turn it back to Christine to coordinate our Q&A session. Christine?
Christine Lindenboom: Thank you, Jeff. Operator, we will now open the call for your questions. To those dialed in, we would like to ask you to limit yourself to one question each and then get back in the queue if you have additional questions.
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