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Edited Transcript of ALNY earnings conference call or presentation 31-Oct-19 12:30pm GMT

Q3 2019 Alnylam Pharmaceuticals Inc Earnings Call

Cambridge Nov 6, 2019 (Thomson StreetEvents) -- Edited Transcript of Alnylam Pharmaceuticals Inc earnings conference call or presentation Thursday, October 31, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Akshay K. Vaishnaw

Alnylam Pharmaceuticals, Inc. - President of Research & Development

* Barry E. Greene

Alnylam Pharmaceuticals, Inc. - President

* Christine Regan Lindenboom

Alnylam Pharmaceuticals, Inc. - VP of IR & Communications

* Jeffrey V. Poulton

Alnylam Pharmaceuticals, Inc. - Executive VP & CFO

* John M. Maraganore

Alnylam Pharmaceuticals, Inc. - CEO & Executive Director

* Yvonne Greenstreet

Alnylam Pharmaceuticals, Inc. - Executive VP & COO

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Conference Call Participants

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* Alethia Rene Young

Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research

* David Neil Lebowitz

Morgan Stanley, Research Division - VP

* Edward Andrew Tenthoff

Piper Jaffray Companies, Research Division - MD & Senior Research Analyst

* Huidong Wang

Barclays Bank PLC, Research Division - Research Analyst

* Maurice Thomas Raycroft

Jefferies LLC, Research Division - Equity Analyst

* Paul Andrew Matteis

Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst

* Ritu Subhalaksmi Baral

Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst

* Salveen Jaswal Richter

Goldman Sachs Group Inc., Research Division - VP

* Sriker Mohan Nadipuram

UBS Investment Bank, Research Division - Associate Director and Research & Analysis Associate

* Whitney Glad Ijem

Guggenheim Securities, LLC, Research Division - Senior Analyst of Biotechnology

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Alnylam Pharmaceuticals Conference Call Third Quarter Earnings. (Operator Instructions) Please be advised that this call is being taped at the company's request.

I would now like to turn the call over to the company. Please go ahead.

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Christine Regan Lindenboom, Alnylam Pharmaceuticals, Inc. - VP of IR & Communications [2]

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Good morning. I'm Christine Lindenboom, Vice President of Investor Relations and Corporate Communications at Alnylam. With me today on the phone are John Maraganore, Chief Executive Officer; Barry Greene, President; Akshay Vaishnaw, President of R&D; Jeff Poulton, Chief Financial Officer; and Yvonne Greenstreet, Chief Operating Officer.

For those of you participating via conference call, the slides are available via webcast and can also be accessed by going to the Investor page of our website, www alnylam.com.

During today's call, as outlined on Slide 2, John will provide some introductory remarks and provide general context, Barry will provide an update on our commercial progress, Akshay will review recent clinical and preclinical updates, Jeff will review our financials and Yvonne will provide a brief summary of upcoming milestones before we open the call for 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 recently quarterly report on file with the SEC. In addition, any forward-looking statements represent our views only as 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 statement.

With that, I'll turn the call over to John.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [3]

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Thanks, Christina. Thank you, everyone, for joining the call today. Bear with me as I'm nursing a cold.

As we head into the final months of 2019, we are entering a very important period in Alnylam's history, one marked with both strong commercial execution with continuous and steady patient and revenue growth as well as robust productivity on the R&D side marked by organic pipeline growth and progression, as evidenced by our large number of late-stage programs. Barry will get into the details on our commercial progress, and Akshay will review our R&D progress, but let me start by providing a few high-level comments.

First, having now passed the 1-year anniversary of ONPATTRO's approval and launch, we continue to be very pleased with ONPATTRO uptake, with over 600 patients on commercial drug at the end of the third quarter. We're seeing growth continuing in existing markets, even with competition, and now also coming from new markets, such as our recent commercial launches in Japan and Canada. And we believe this global expansion will continue to be a driver of revenue growth going forward, along with improved rights of patient diagnosis, leading to new patient finding in existing markets and additional evidence generation activities, providing further differentiation.

We're also seeing very real growth and awareness of hATTR amyloidosis that we believe bodes well for ONPATTRO, vutrisiran and Alnylam.

We are also hard at work at preparing for the upcoming launch of givosiran, assuming positive regulatory reviews, marking the potential entry of the world's second RNAi therapeutic to the commercial markets.

The second point I want to make is on the R&D side. Here we're gearing up for an additional Phase III program readout with lumasiran by the end of the year. And with inclisiran, we'll support the efforts by our partners at The Medicines Company as they prepare for global regulatory filings to bring that innovative product to patients.

In addition, we continue to advance our ongoing Phase III development activities for patisiran and vutrisiran into the hereditary and wild-type ATTR amyloidosis cardiomyopathy settings, which we believe have the potential to unlock a very large commercial opportunity with what we believe is a best-in-class approach with our RNAi TTR silencer mechanism of action.

Our robust product pipeline also includes earlier-stage clinical programs in the areas such as complement-mediated diseases, hypertension, chronic HPV infection and alpha-1 liver disease. We look forward to sharing initial clinical data from some of these programs as well as additional updates across our portfolio at our upcoming R&D Day on November 22 in New York City.

The third point I'd like to make is that based on our commercial and R&D accomplishments and near-term prospects, we believe we have a clear line of sight toward achieving our Alnylam 2020 strategy and goals of becoming a global multiproduct biopharma company with a deep clinical pipeline to bolster continued growth and a robust product engine to fuel sustainable innovation, a profile rarely, if ever, achieved in biotech. Furthermore, we believe that our modular, reproducible and, very importantly, organic platform for innovative medicines is hard to match, where, for many reasons, we believe our return on investment exceeds industry norms.

And now having launched the first RNAi therapeutic and having built a global leverageable commercial capability with the potential to generate continuous revenue growth, we have greater confidence than ever in our ability to deliver on the promise of RNAi therapeutics.

At the same time, we recognize that some of our stakeholders are eager to hear about our strategy for balancing revenue growth with our continued investment in our innovative pipeline and how the strategy will support the path toward a self-sustainable and attractive financial profile for Alnylam in the coming years. This is something that we, as a management team, are deeply focused on; and Jeff Poulton, our new CFO, is committed to helping us navigate through this transition and grow Alnylam for the future.

Finally, I want to make note of last week's announcement that Alnylam received recognition by Science as the industry's #1 top employer. This is a remarkable recognition by over 7,500 respondents who identified Alnylam's culture as the best in the industry. We continue to be more proud -- we couldn't be more proud of this recognition and are so grateful to all the Alnylam employees who work tirelessly every day to bring potentially game-changing innovation to patients.

With that, I'll now turn it over to Barry to review our commercial progress in more detail. Barry?

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Barry E. Greene, Alnylam Pharmaceuticals, Inc. - President [4]

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Thanks, John, and good morning, everyone. Before I get into specific details, I'd like to comment on the broader ATTR market dynamic.

As we anticipated, and have commented on previously, we're seeing stronger and stronger disease awareness and patient diagnosis across all physician specialties, thanks in part to our own efforts and the efforts of others in the field. We're seeing evidence of this market expansion in Alnylam Act samples as well as patient growth and new prescribers. So this growth is important for patients. And as John commented, we think this is very important for ONPATTRO, vutrisiran and patients at large with this disease.

Now moving on to some specifics. Let me begin by reviewing ONPATTRO's commercial performance. We achieved $46.1 million in global ONPATTRO net product revenues in the third quarter. In terms of the geographic split, we achieved $33.6 million from the U.S., representing 19% U.S. quarter-on-quarter growth; and $12.5 million from the rest of the world, representing 24% quarter-on-quarter international growth.

Now as of September 30, over 600 patients worldwide were receiving commercial ONPATTRO treatment. When we expand that number to include patients in clinical trials and our global expanded access programs, that number increases to approximately 850 patients worldwide who are being treated with ONPATTRO. And we continue to believe that we're on track to achieve approximately 1,000 patients on ONPATTRO across commercial expanded access and clinical trials by the end of this year, an incredibly exciting milestone in our overall efforts.

It's important to note that for many drugs during the third quarter, it's not uncommon to see a seasonal slowdown of new patient starts due to peak vacation season. We're actually quite pleased with the overall demand for ONPATTRO that we saw, despite this potential seasonality, especially given increasing competition from recent market entrants and the availability of a number of investigational drugs through large expanded-access programs and clinical trials. In sum, we're very pleased to see continuous and steady patient and revenue growth.

Let me get into more specifics with a review of the U.S. market dynamics. On the physician front, we're seeing continued growth in both the number of new prescribers as well as repeat prescribers. In fact, over 50% of U.S. start forms received in the third quarter came from new prescribers, encouraging statistics that is evidence that our medical education efforts are working well. We believe this dynamic will continue as HCP disease awareness increases and fueled by multiple players engaged in disease state education.

Regarding the mix of prescribers, about 55% of start forms submitted in the U.S. in the third quarter were from neurologists and about 33% coming from cardiologists. And we saw a good mix of other specialties prescribing, like heme/onc. Now while the cardiology percentage was down a bit in July and August from previous quarters, we did see the proportion of start forms from cardiologists return to the 50% range in September. And we're very encouraged by the continued trends during the initial part of the current quarter. We're also seeing the emergence of more and more multidisciplinary centers of excellence across the country, and these kinds of referrals are a key dynamic in earlier and proper diagnosis.

Of note, in the third quarter, we saw the beginning evidence in the U.S. of the use of ONPATTRO with concomitant branded TTR stabilizers, with reimbursement of ONPATTRO, which is positive for patients with multiple manifestations of hereditary ATTR amyloidosis. We expect concomitant use to increase over time as HCPs experience favorable results with reimbursement for ONPATTRO.

Now that we have over one year of launch experience, it's possible to comment for the first time on adherence rates. The good news here is that overall adherence to the therapy remains very strong, consistent with the APOLLO Phase III data. Specifically, we estimate an over 90% adherence rate for commercial ONPATTRO, rate that we believe is outstanding and consistent with a favorable patient experience with ONPATTRO that we hear from our patient hub and that we hear from reports from the field.

Regarding U.S. market access, as reported by external coverage reports, we're very pleased that we now have confirmed access to ONPATTRO if prescribed for more than 98% of U.S. lives across commercial, Medicare, Medicaid and other government paying groups, including VA. Even in an increasingly competitive landscape, we continue to effectively partner with U.S. payers and has avoided the payer headwinds often reported with other orphan drug launches. We're very proud of this result in a very complex U.S. market access environment and believe it reflects constructive, collaborative and proactive approach, including the use of value-based agreement we've adapted with the payer community.

Now turning to the rest of the world, we're also pleased with ONPATTRO's performance. As I noted earlier, we achieved $12.5 million in international net product revenues in Q3. A major achievement during the quarter was the launch of ONPATTRO in Japan. We've built our team and are thrilled to have achieved our first sales in Japan and to be bringing ONPATTRO to a significantly underserved population in Japan and Asia, more broadly. As we previously mentioned, we anticipate that Japan is likely to be our second-largest country after the U.S. for ONPATTRO revenue and patients on drug exiting 2020.

Other notable achievements during the quarter include the launch of ONPATTRO in Canada and achievement of reimbursement in the United Kingdom, Belgium and Germany.

Now through direct reimbursement, named patient sales or paid access, we now have ONPATTRO being sold in over 10 countries outside the United States. We are seeing the source of our international business coming both from tafamidis switches and first-line treatment, highlighting the value that people are seeing with ONPATTRO.

Globally, our team also remains committed to addressing the challenge of raising disease awareness and improving diagnosis of polyneuropathy and hATTR amyloidosis patients. Improved medical education and diagnosis will help patients receive treatment options faster. When patients receive treatment earlier in their disease course, it improve their overall prognosis.

Regarding patient diagnosis, and as we've highlighted previously, our Alnylam Act program is a third-party genetic testing initiative in the United States and Canada aimed at facilitating diagnosis of patients suspected of having hATTR amyloidosis. As of late October, over 18,000 samples have been submitted, out of which nearly 1,200 have tested positive for pathogenic TTR mutation. Of note, we're seeing an increase in the number of new test per quarter from about 2,000 previously to over 3,000 this quarter. We believe the increase in requested tests reflects improvement in disease awareness.

As a reminder, Alnylam Act is just one of several methods where patients can be genetically tested. So we see, as we commented earlier, an overall growth in the market for genetic testing.

In addition to Alnylam Act, we continue to partner with 23andMe to help customers of their consumer genetic service learn more about the genetic risk of the 3 most common TTR variants in the United States.

In summary, with ONPATTRO achieving approval and access in more and more countries, with steadily improving diagnosis and patient finding and with continued evidence generating efforts, highlighting the differentiating features of ONPATTRO, we're very encouraged by commercial progress in an incredibly competitive environment. And with the addition of new competitors in the broader ATTR market, we believe overall disease awareness will continue to accelerate diagnosis, and we're enthusiastic about the benefits this will confer to patients.

Finally, let me turn to givosiran, which is now under review by both U.S. and European regulators. Assuming positive decisions from both agencies, we expect givosiran will launch in these regions in early 2020. In the meantime, we're leveraging the capabilities built from ONPATTRO launch and following the best practice developed country by country. At this stage, our team is focused on improving the awareness and diagnosis of acute hepatic porphyria, or AHP, in the HCP and patient communities. As part of these overall efforts, we've launched our AHP physician and patient-facing websites to give patients resources and education materials about their disease and to provide HCPs with content and tools help them recognize the signs and symptoms of AHP and help them navigate through the appropriate tests to arrive at an accurate diagnosis. Through Alnylam Act, we sponsor access to third-party genetic testing for individuals in the U.S. or Canada who may carry gene mutation known to be associated with AHP. While this program for AHP is still in a very early stage, we can report 581 tests submitted and 63 patients positive with AHP mutations as of mid-October, accounting for an overall 10% hit rate.

We're also very pleased in the third quarter to announce a collaboration with Ironwood Pharmaceuticals focused on AHP disease education. And if approved, promotion of givosiran among U.S. gastroenterologists. GIs are one of the most frequently seen specialty groups during the diagnostic journey of an AHP patient, so leveraging Ironwood's U.S. expertise and deep relationships with the GI community represents a significant opportunity to expand medical education and diagnosis for patients with AHP.

Turning to the addressable market. The consensus estimated global prevalence of AHP is in the range of 2 to 5 per 100,000 for people with systemic -- or systematic disease. It's been estimated that there are roughly 1,000 diagnosed patient in the U.S. and Europe who are severely affected and experience recurrent attacks. Of course, many more estimated to have active disease with more sporadic attacks and additional patients of chronic symptoms and impaired quality of life. AHP is challenging to diagnose, so many patients with active disease remain undiagnosed. Nevertheless, we estimate that there are around 3,000 patients with active disease who are currently diagnosed in the U.S. and Europe with debilitating potentially life-threatening attacks, with about 1,000 of those patients having more frequent attacks.

Assuming positive regulatory reviews, we're very excited with the new treatment option we can bring to patients and the associated commercial opportunity for givosiran. We look forward to the possibility of delivering this medicine to AHP patients early next year. As we've said in the past, it's our belief that this can be an attractive ultra-orphan disease opportunity with over $500 million in global peak revenue potential. We expect givosiran to show a growth pattern after launch, similar to that observed with other new treatments in ultra-orphan and underdiagnosed serious genetic diseases.

So with that, let me now turn it over to Akshay to review our recent R&D and pipeline progress. Akshay?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [5]

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Thank you, Barry, and good morning, everyone. In the interest of time, I'm going to limit my prepared remarks on multiple Phase III clinical programs.

Let me start with patisiran, which is the unbranded name for ONPATTRO. One of our key clinical achievements during the third quarter was the initiation of the APOLLO-B Phase III study aimed at expanding the ONPATTRO label to include cardiomyopathy in both the inherited and wild-type ATTR amyloidosis patient settings. Enrollment is under way, and if the study is positive, we plan to seek regulatory approval for an expanded label for patisiran in approximately the 2021 to '22 time frame.

As you know, we're also advancing vutrisiran, which is an investigational RNAi therapeutics delivered by quarterly subcutaneous injections and also in development for ATTR amyloidosis. We've been enrolling hATTR patients with polyneuropathy in the ongoing HELIOS-A Phase III study, and we are pleased to announce that our RNAi roundtable in September, the design of HELIOS-B. HELIOS-B will be a Phase III study of vutrisiran in inherited and wild-type ATTR amyloidosis patients with cardiomyopathy. The study is designed to include approximately 600 patients with ATTR amyloidosis with cardiomyopathy. Patients will be enrolled with either wild-type or inherited disease. And up to 30% of the total study population may be on tafamidis at the time of randomization. Eligible patients will have a medical history of symptomatic heart failure, a New York Heart Association class equal to or less than 3 and meet minimum criteria for 6-minute walk distance and NT-proBNP levels at baseline. Patients will be randomized one-to-one to receive either 25 milligrams of vutrisiran or placebo administered subcutaneously once every 3 months. Primary endpoint of the study is a composite outcome of all-cause mortality and cardiovascular hospitalizations, which will be assessed at month 30. Secondary endpoints will include a comprehensive assessment of cardiac disease burden, including 6-minute walk test, quality of life, imaging assessments and NT-proBNP. The study design also includes an optional interim analysis, providing the opportunity for an earlier readout. We're actively working through start-up activities for this global study now, and we remain on track to initiate the study by the end of the year. If successful, HELIOS-B should allow vutrisiran to enter the very large wild-type ATTR market opportunity with clinical outcomes data.

I'll now turn to recent progress with lumasiran, an investigational RNAi therapeutic in development for the treatment of primary hyperoxaluria type 1, or PH1. As you know, we're now conducting the ILLUMINATE-A Phase III study of lumasiran. This is a randomized, double-blind, placebo-controlled study in PH1 patients age 6 or older with mild to moderate renal impairment. The primary endpoint is a percent of change from baseline in urinary oxalate excretion averaged across month 3 through 6. We completed enrollment in this clinical trial earlier in the year, and we remain on track to report top line results for ILLUMINATE-A in late 2019 and, if positive, to submit regulatory filings for lumasiran beginning in early 2020.

We're also conducting ILLUMINATE-B, a Phase III study of lumasiran in PH1 patients with mild to moderate renal impairment under the age of 6. And we also plan to soon start a third Phase III trial, ILLUMINATE-C in PH1 patients with severe renal impairment of all ages.

In addition to the progress we've made with our wholly owned late-stage assets, our partners at The Medicines Company and at Sanofi have also been advancing our partnered Phase III assets. The Medicines Company now report complete results from the ORION-11 Phase III study of inclisiran and top line results from the ORION-9 and 10 Phase III studies. All 3 studies met their primary and all secondary endpoints, demonstrating remarkable efficacy for a drug administered subcutaneously once every 6 months. The results also demonstrated an excellent safety profile.

So what do these results mean for Alnylam and RNAi therapeutics? First, these results support the safety of our RNAi therapeutics platform and provides the largest demonstration to date, suggesting that there is no systematic evidence for a platform-specific safety signal. Importantly, the ORION Phase III studies were conducted in a generally ill population of ASCVD and heterozygous FH patients, so this is a stringent evaluation of safety and tolerability. Secondly, these results greatly strengthen our conviction for the future of our RNAi therapeutics in highly prevalent chronic disorders, such as other dyslipidemias, hypertension, NASH and opportunities in highly prevalent infectious diseases like HPV. Moreover, we believe the pharmacology of RNAi therapeutics as an infrequently administered medicine creates a very attractive profile for the treatment of common disease.

Finally, assuming timely regulatory submissions by The Medicines Company and positive regulatory review, inclisiran will provide just another source of near-term revenues for Alnylam due to have significant royalties of up to 20% on global sales of the product.

As John mentioned earlier, we very much look forward to seeing you later this month at our R&D Day, and we're excited to update you on -- at which time, we'll be excited to update you on the entirety of our pipeline programs.

With that, let me now turn the call over to Jeff to review our financials. Jeff?

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [6]

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Thanks, Akshay, and good morning, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the third quarter of 2019.

I would like to take this opportunity to provide a brief overview of 3 key areas: our third quarter 2019 P&L results; a summary of our cash balance; and our 2019 financial guidance.

Let me start with our third quarter 2019 revenue. Total third quarter revenues were $70.1 million. As Barry highlighted earlier, we recorded $46.1 million of ONPATTRO net product global revenue during the third quarter of 2019, which represents 20% growth from second quarter net product global revenues of $38.2 million. U.S. product revenues were $33.6 million, representing 19% quarterly growth from second quarter, and international product revenues were $12.5 million, representing 24% quarterly growth. The increases were driven primarily by the addition of new patient sign-up therapy, including in the U.K. and Japan, which both generated revenue for the first time following recent finalization of pricing and reimbursement for ONPATTRO.

Our global gross-to-net percentage remains in the mid-20s through the third quarter, in line with our prior guidance.

Cost of goods sold was $5.2 million for the third quarter of 2019, which is approximately 11% as a percentage of net product sales. This result is still being favorably impacted by the zero-cost ONPATTRO inventory that was expensed to R&D prior to ONPATTRO's regulatory approval. We anticipate ONPATTRO's cost of goods sold increasing into the mid-high teens after depletion of zero-cost inventory, which is expected in the first half of 2020.

We recognized $24 million of collaboration revenue during the third quarter of 2019 as compared to $1.6 million during the third quarter prior year. As expected, the increase in collaboration revenue was primarily due to our collaboration agreement with Regeneron, which generated $15.3 million of revenue in the quarter.

Moving to our operating costs and expenses. GAAP R&D expenses were $160.8 million for the third quarter of 2019 as compared to $139.9 million in the prior year. Non-GAAP R&D expenses were $138.1 million as compared to $94.2 million for the third quarter of 2018. The increase in non-GAAP R&D expenses was primarily due to increased activity in support of our late-stage pipeline programs.

Turning to SG&A. GAAP SG&A expenses were $120.4 million for the third quarter of 2019 as compared to $116.5 million for the prior year. Non-GAAP SG&A expenses were $97.1 million as compared to $74.4 million for the third quarter of 2018. The increase in non-GAAP SG&A expenses was due primarily to an increase in commercial and medical affairs investment in connection with the continued global launch of ONPATTRO.

Moving now to a summary of our cash balance and our 2019 financial guidance. Our balance sheet remains strong, with $1.74 billion of cash, cash equivalents, marketable debt securities and restricted investments on hand at the end of the third quarter as compared to $1.13 billion at the end of 2018. This cash balance is expected to support company operations for multiple years based on current operating plans.

Now moving to our 2019 financial guidance. We are reaffirming our 2019 annual non-GAAP R&D expense guidance to be in the range of $550 million to $575 million and our 2019 annual non-GAAP SG&A expense guidance to be in the range of $390 million to $400 million. We do expect our actual results will be toward the lower end of both of our non-GAAP R&D and non-GAAP SG&A guidance ranges, reflecting good cost management discipline within the organization.

Finally, I also look forward to our R&D Day later this month when I will have the opportunity to provide some perspectives on how Alnylam aims to transition toward a self-sustainable financial profile in the future.

With that, I'll now turn the call over to Yvonne to review our goals for the remainder of the year. Yvonne?

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Yvonne Greenstreet, Alnylam Pharmaceuticals, Inc. - Executive VP & COO [7]

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Thanks, Jeff. We've made tremendous progress so far in 2019, but we still have a number of exciting milestones to look forward to in the remainder of the year.

For starters, we plan to continue our global commercialization of ONPATTRO and also focus on enrolling patients with ATTR amyloidosis with cardiomyopathy in the APOLLO-B Phase III studies.

In vutrisiran, we plan to continue enrolling the HELIOS-A Phase III trial throughout the year and expect to initiate HELIOS-B and outcome study in late 2019.

With givosiran, our planning is underway for the potential launch of our second RNAi therapeutic in the coming months, assuming positive regulatory reviews.

Turning to lumasiran. We plan to report top line results in the ILLUMINATE-A Phase III study in late 2019. We will also continue enrolling pediatric patients in ILLUMINATE-B and plan to start the ILLUMINATE-C study in PH1 patients of all ages with severe renal impairment in late 2019.

With inclisiran, we look forward to seeing complete results from the ORION-9 and 10 studies that The Medicines Company plans to present at the American Heart Association meeting being held November 16 to 18 in Philadelphia. They also plan to submit an NDA for inclisiran by the end of the year.

And of course, we plan to continue advancing our pipeline of earlier-stage clinical efforts as well as our exciting preclinical efforts and plan to highlight these milestones throughout the rest of the year as they occur. In particular, you should expect data readouts for a number of our early and mid-stage clinical programs.

And finally, as a reminder, we very much look forward to reviewing all of this at our R&D Day in New York City on Friday, November 22.

Let me now turn it back to Christine to coordinate our Q&A session. Christine?

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Christine Regan Lindenboom, Alnylam Pharmaceuticals, Inc. - VP of IR & Communications [8]

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Thank you, Yvonne. Operator, we will now open the call for questions. (Operator Instructions)

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Questions and Answers

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Operator [1]

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(Operator Instructions) We will now take our first question from David Lebowitz of Morgan Stanley.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [2]

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Curious. Clearly, the ramp of ONPATTRO has gone pretty well out the gate. When do you think you might gain enough comfort to give some guidance going forward for sales, what you expect maybe in fourth quarter and perhaps into 2020?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [3]

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Yes, that's a great question, Dave. Jeff, do you want to handle that?

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [4]

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Yes. It's something that we're talking about and thinking about internally. We're not prepared to provide guidance today for the fourth quarter or for next year. But the plan would be guidance would be on the year-end call. And again, this is something that we're thinking about, not ready to give you an answer yet. Understand the question. I would say more to come.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [5]

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And one additional one, if I may. With the HELIOS-B and the ONPATTRO APOLLO-B trials being so similar, how are you going to deal with the dynamic of recruiting patients for both at the same time?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [6]

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Yes, that's a great question, Dave. Akshay, do you want to handle that?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [7]

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Yes. I mean, I would say there are 2 factors. One is that APOLLO-B got up and running and enrolling well in advance of HELIOS-B, which we intend to start by the end of the year. And the second is, remember, both studies are -- the predominant population is wild-type ATTR cardiomyopathy and that population, of course, is remarkably prevalent in most parts of the world that does not have access to therapy today. And so as such, with our extensive clinical operations group that have great experience and relationships with TTR site, we're working through all of that. And we're pretty comfortable that we can achieve goals for both studies in terms of speedy enrollment and then get to readouts.

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Operator [8]

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We now move on to our next question from Paul Matteis of Stifel.

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Paul Andrew Matteis, Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst [9]

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One financial question and one clinical question, if I may. Just in your commentary surrounding cash and expectation for having cash to fund operations for multiple years, I guess, in a world where expenses are likely to continue to go up, can you at least speak qualitatively about what you're expecting regarding cash flow coming in over the next couple of years? And I was curious on the royalty streams, like inclisiran, if there's any internal discussion or thoughts surrounding monetizing that. And then separately, on the HELIOS-B study, we noticed that you're allowing patients in the trial who are on a stabilizer, who are not on a stabilizer. Can you talk about your assumptions there for the mix and how you're contemplating that from a powering perspective? In other words, how much benefit are you assuming on top of a stabilizer versus in the stabilizer-naive patients?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [10]

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Two great questions, Paul. Maybe for starters, Jeff, do you want to give some context or an answer to that?

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [11]

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Yes. I mean, let me just sort of restate what we said. We have $1.74 billion in cash at the end of the third quarter, which we feel very good about. We're not providing specific guidance today for next year or the following years. I think the one thing that I can say is that we are very focused on this question of financial sustainability. It's something that we talk a lot about internally. I'll talk more about that at our R&D Day. I think the one thing we're prepared to say in that regard is that we believe that 2019 is going to be our peak net loss year. And so we'll see an improvement in that next year and in the following years, which, obviously, is impacting the question that you asked about sort of the cash runway. That's about all I'm prepared to say on this today.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [12]

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And do you want to comment briefly on the inclisiran question -- part of the question?

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [13]

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Yes. I mean, I think it's a fair question. I think we're very excited about the profile of that drug, if approved. And we would think about or consider the possibility of looking at a possible monetization there. But it -- to do that, I think the most important thing is that we would get the right value for it. And again, I just comment on the fact that we're very, very excited about the profile of that potential drug.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [14]

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Yes. Terrific. And Akshay, do you want to handle the clinical question?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [15]

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Yes. With respect to the tafamidis question, Paul, I think we have to acknowledge that tafamidis is obviously out there in certain settings. It's still ramping up. It's not available to the vast majority of patients, we think, around the world with wild-type disease and hATTR. So as such, I think we have an opportunity to really enroll a robust placebo-controlled study. Now having said that, some patients will be on tafamidis. And I think we have to acknowledge that and allow those patients in the study. The study is designed to enable then up to 3% of patients may have concomitant tafamidis in the background. But I can assure everybody that the primary comparison is a placebo-controlled comparison. And so as such, we're comfortable with the infrastructure of the trial and the way we've powered it, so we can do that very key analysis and demonstrate, hopefully, an efficacy of vutrisiran over placebo. And of course, this design has been vetted extensively by the regulators.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [16]

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Does that answer your question, Paul?

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Paul Andrew Matteis, Stifel, Nicolaus & Company, Incorporated, Research Division - Co-Head of the Biotech Team, MD & Senior Analyst [17]

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Great. Yes, absolutely.

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Operator [18]

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We will now move on to our next question from Ted Tenthoff of Piper Jaffray.

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Edward Andrew Tenthoff, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [19]

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And generally, pretty remarkable what you've achieved with the launch in the year, so hats off to that. Getting up to almost 1,000 patients by year-end. That's really incredible execution for patients who really need therapy. I wanted to kind of look towards givosiran, if I may. And I'm still -- that's -- you have to be patient with me for a minute because I still don't totally understand how we're going to be treating this disease. So maybe you can kind of walk us through sort of what the first approval might look like, sort of how you anticipate getting to patients or women who need givosiran and then, maybe longer term, sort of how maybe prophylactic could be used.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [20]

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Yes. Great question, Ted. Akshay, do you want to answer that?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [21]

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Yes. Ted, as we have discussed before, and I'm sure many of you are familiar, this is a terrible disease, generally, a disease of women, 9:1, women to men, often striking between the years of 15 to 45 in that prime of life. I'm 57, so maybe I'm past the time of my life. So striking in the prime of life. And the issue, unfortunately, for patients is that when they present that first attack, it's not necessarily the end of the disease for them. They can have many subsequent attacks. It can be 1 a year. It can be 1 every 5 years. It can be 12, 24 a year. And patients vary remarkably. And the fact that any given attack can be life-threatening and, in fact, people do die from this disease, all leave you with terrible disability from the neuropathic impact, central nervous disorders or peripheral neuropathy or, of course, patients end up having laparotomies for the abdominal pain wrongly means that this constant fear. Once you have your first attack, when is the next attack coming? How is it going to leave me? And this is with respect to someone that should be out studying or working or enjoying life. And so I think physicians have this terrible dilemma of how to manage these patients. And the study we designed was to take patients who are in risk for multiple attacks a year, on average, 4 or more and unequivocally, I think, demonstrate that we get a remarkable reduction in annualized attack rate, 90% or so in the median attack rate as designed in the ENVISION study. So that shows that the drug has this fundamental property to prevent attacks. And I think we, obviously, await the label from the FDA and EMA. All of that work is ongoing right now. And physicians will have a very powerful new drug once approved to prevent attacks. And they'll have to make the choice, of course. But I do think we're providing a very new and important treatment option -- options for these patients.

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Operator [22]

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We now take our next question from Ritu Baral of Cowen.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst [23]

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I wanted to ask a little bit about what you were seeing in the field, competition-wise, from tafamidis and what sort of prescribers -- or what sort of patients were the most impacted, I suppose, in Q3. Specifically, was that the reason that you had the dip in the proportion of new prescribing cardiologists? And why do you think you saw the rebound? And what are you seeing in Europe in that physician breakout commercial competitive landscape?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [24]

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That's a great question, Ritu. Thanks for that. Barry, do you want to handle it?

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Barry E. Greene, Alnylam Pharmaceuticals, Inc. - President [25]

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Yes. Let me talk about kind of the mix and then we can back up to Europe and specific physician types. So we expect the prescriber base of ONPATTRO to evolve over time. There's always ebbs and flows in prescribing. And as we commented on the call, we were very pleased with the number of new prescribers accounting for new patient starts. And we believe the disease and the proportion of cardiologists that are subscribing in third quarter was, in fact, associated in the United States with cardiologist very busy with their hundreds and hundreds of wild-type patients, getting them on a drug for the first time where drugs were no longer available. So we see others in cardiology, specifically, really talking about TTR cardiomyopathy. Now as I commented on the call, once we got through sort of the early summer months into September, October, we did see the prescribing rate in cardiologist return to about 50%. But I will note that we are getting a number of additional prescriber types outside of neuro and cardio. So again, those percentage rates will ebbs and flows.

The other dynamic, and Ritu, you've asked about this in previous calls, I don't have specific numbers, but there are more and more centers of excellence popping up around the country where we're seeing multidisciplinary approaches being utilized, and cardiology being a key center referral pattern for all of TTR amyloidosis.

Now in Europe, the -- as you know, tafamidis has previously been approved in polyneuropathy, so there are countries with experience. And we think that the primary uptake that we've seen and what we're hearing from the field is in pure cardiomyopathy or the wild-type population, which is very interesting to be getting reimbursed at this time. But that's the dynamic we're seeing outside the United States.

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Ritu Subhalaksmi Baral, Cowen and Company, LLC, Research Division - MD & Senior Biotechnology Analyst [26]

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Great. Just a quick follow-up. In the new prescribers, are they in the centers of excellence? Or are you starting to see that sort of filter out to the community as well?

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Barry E. Greene, Alnylam Pharmaceuticals, Inc. - President [27]

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More actually in the communities. We talked about this dynamic and it's, in fact, what we're seeing. At the beginning of launch, physicians are putting the EAP patients and patients known to site on drug. And then as patients return back to the community setting, those physicians are getting more and more educated and comfortable in diagnosing and treating. So we're seeing kind of the pattern stretch outside the centers of excellence, who remain very busy, but really busy doing clinical studies versus treating as many commercial patients.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [28]

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Yes. And can I just add 2 other points? One is a clarification on ONPATTRO in Europe, just to be very clear. The uptake we're seeing is in the polyneuropathy patients with hATTR amyloidosis, and it's in the patients that are either naïve to treatment or progressing or have progressed on tafamidis. But the other dynamic I want to come back to, Ritu, and we've talked about this offline, which I think is quite interesting in the U.S., is the occurrence of concomitant use now of ONPATTRO and TTR stabilizers. And we think that's a dynamic that will continue to grow in the U.S. market as physicians realize that they're able to continue to get reimbursement for their ONPATTRO in that type of setting.

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Operator [29]

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We'll move on to our next question from Salveen Richter of Goldman Sachs.

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Salveen Jaswal Richter, Goldman Sachs Group Inc., Research Division - VP [30]

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Could you just provide further details on the patients that you mentioned who were switching from tafamidis to ONPATTRO and, perhaps, if that's occurring in the opposite direction? And then just comment on the concomitant use and where you're seeing this. And if there's a specific type of patient subset. And then also, for the mixed phenotype patients, what are you hearing from physicians on how they're choosing between a stabilizer versus a silencer at this point?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [31]

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Yes. Great, great questions. Just the -- just on the switching, of course, just to be clear, that's happening predominantly in Europe where tafamidis has been on the market for many, many years. And these are patients that have progressed on their tafamidis with their neuropathy. And so they're switching to ONPATTRO at that point in time. But Barry, do you want to answer the full set of questions there?

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Barry E. Greene, Alnylam Pharmaceuticals, Inc. - President [32]

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Yes. So I think what you just said is a very important dynamic. Outside the United States where there's been significant experience of tafamidis in patients with polyneuropathy, patients have -- physicians have experienced patients continuing to progress on their disease. In fact, Teresa published a paper recently out of Portugal that about 1/3 of patients seem to benefit by tafamidis, but 2/3 of patients rapidly progress. So with that experience, within patients with polyneuropathy, there's -- there are rapid switches to ONPATTRO. That's a dynamic we're also seeing in Japan and Canada.

In terms of concomitant use, we've seen concomitant use with the generic nonsteroidal antiinflammatory diflunisal for some amount of time. It's hard to get a specific read on that because it's less specific and it's very easy to be reimbursed. But as John mentioned, in the United States, in patients with hereditary TTR amyloidosis with polyneuropathy that may have had significant cardiomyopathy and were started on a branded stabilizer, as those patients progress and their polyneuropathy worsens, we're seeing physicians reach for ONPATTRO to treat the polyneuropathy part of hereditary TTR amyloidosis, of which, as you know, we have very strong data. And importantly, and it speaks really to the relationships we've had with payers, we are seeing reimbursement of ONPATTRO even in the face of concomitant branded products.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [33]

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And Salveen, Barry mentioned Teresa without her last name. That's Teresa Coelho, who's the investigator in Portugal. And the paper he's referring to is the Monteiro paper, which I think is worth reading.

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Operator [34]

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We will now move on to our next question from Gena Wang of Barclays.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [35]

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I think 2 questions. One is a clinical trial question for HELIOS-B. You do allow up to 30% patient on baseline tafamidis and continue on throughout the study. Just wondering, is the powering assumption allowed to detect statistic -- significant benefit in this particular patient population? So I'm asking mainly in the context of generic tafamidis in [2029].

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [36]

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Yes. That's a good question, Gena. Akshay, do you want to handle that?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [37]

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Yes. Gena, if I understood the question right, the answer is no. The primary comparisons of placebo-controlled comparison between vutrisiran and placebo. So we're not powered to show differences between those combination subsets.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [38]

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So how would you address the future tafamidis generic entry?

And is it also active comparator going forward in terms of the trial design?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [39]

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No. Yes, I mean, first of all, Gena, I think it's an open question as to what the real generic entry name will be given to VYNDAMAX and the new cell form of tafamidis. We don't expect there'll necessarily be a generic version of VYNDAQEL and the time frame that you're talking about actually. So I think there's not a dynamic there that, we think, commercially, we need to navigate through.

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [40]

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Yes. And I would just add to that, that as far as TTR lowering approaches are concerned, whilst you can't compare across studies, if we look at how tafamidis is performing in peripheral neuropathy component of hATTR, and as Barry just outlined from the Monteiro paper by the Coelho group, it didn't seem to have a strong result. And it is the primary endpoint. We had a very different result in a much tougher to treat population. That is widely acknowledged. Now again, I'm not formally comparing across studies, that's not feasible. But I think people have to draw their own conclusions from that. And we remain very optimistic that TTR silencing approaches are the most potent way to treat this disease, and that primary comparison should be very enlighting as to the ability of vutrisiran to help these patients.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [41]

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Great. And then another quick question regarding the cash burn because I got asked a lot by the investors. So the annual burn close to $1 billion. Any thoughts on the cost, mostly spend on the programs or early stage, late stage? And then SG&A perspective, how soon should we expect now and become a self-sustaining company?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [42]

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Yes, that's -- Jeff, do you want to handle that?

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [43]

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Yes, we're not prepared to give you a specific date today. I think I mentioned earlier. It's something that we're talking a lot about. It's a focus for us. We think we're starting on that journey. We expect that this is going to be our peak net loss year.

As it relates to operating expenses, I anticipate lower operating expense growth going into 2020 than what we'll generate in 2019. And we also have a lot of things to be optimistic about on the top line in terms of growth for next year, both with ONPATTRO as well as if givosiran is approved.

So hopefully, that answers your question. Again, this is a big focus for us. I anticipate, again, on the SG&A side, in particular, for next year that we're going to be able to leverage what's been built and invested this year. So you'll see moderating expense growth going forward.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [44]

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And I would just add that, obviously, the very positive inclisiran results from the standpoint of our royalties and how that plays out for our profile will also be a very important component of this transition to our self-sustainability. And then we have high confidence that lumasiran will be a positive result later this year in December, and that obviously will add yet another product to our overall revenue mix. So when you look at the staging of product launches, both organic or proprietary that we have in Alnylam, but also the royalties that we get, also promising new guidance from Sanofi in their call about fitusiran, you put all these together, we've got some very nice revenue growth that we're going to be seeing in the years to come that will assist the company's transition towards self-sustainability.

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Operator [45]

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We will now move on to our next question from Alethia Young of Cantor Fitzgerald.

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Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [46]

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I got like 10. No, I'm just joking. Maybe 1 or 2. I guess could you talk a little bit more about the clip of patients that you're seeing in the U.S. and Europe? I mean I feel there's a steady clip of adding patients. And should we think about as we go into the next, maybe 6, 7 quarters, the same clip since you basically are finding people as well? So I just wanted to kind of reflect on that. And then I just wanted to get like your temperature on potentially givosiran label that might be potentially broad and how you're thinking about that and how that ties into the world of pricing.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [47]

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Great. All right, Barry, do you want to start with the first one and then...

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [48]

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Yes. Thanks, Alethia. Thanks for the 2 questions. That's 9 through 10. As we commented previously, we continue to see continuous and steady, both patient and revenue, growth in the quarters to come. As we've commented, that growth comes from really 3 areas: it's opening new markets, as we saw this quarter in Japan and Canada, for example; its continued evidence generation, allowing physicians to be more and more comfortable with ONPATTRO prescribing; and then its de novo patient finding in markets where we've already launched. And those efforts are going well. As we commented, with our disease education awareness efforts and those of others, as we've talked about previously, we do see the market continuing to grow and the number of hereditary patients with polyneuropathy being identified. So that's how we see the growth continuing quarter-on-quarter in a continuous and steady fashion.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [49]

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Now regarding your givosiran question, Alethia, let me just start by saying we learned from our last experience that we should not be labeled soothsayers. So I don't want to get ahead of our skis on that issue, but we're in regulatory review now. And our PDUFA date is February 4, and I think that's where we should leave it at this point.

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Operator [50]

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We'll now move on to our next question from Maury Raycroft of Jefferies.

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Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [51]

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Congrats on the progress. Just going to ask about the optional interim analysis in HELIOS-B. If you can just remind how you decide to do the interim, what could happen there? And when that could happen? And what you're going to be looking for with that?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [52]

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Great. Terrific, Maury. Thanks for your congratulations at the beginning. Akshay, do you want to handle the question?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [53]

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Yes. I mean, I think it's a little premature to get into those details now. There's some stuff we want to work through first before we share. But the issue of interim depends so much on how things are going with the study and how quickly it enrolls. For example, we learned from the ENVISION study the enrollment occurred at such a pace that the interim almost became futile because the full data set was going to be available in a very timely fashion after the interim. So there's a lot to work through here. I think in due course, we'll come back and visit at that point.

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Operator [54]

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We'll now move on to our next question from Whitney Ijem of Guggenheim.

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Whitney Glad Ijem, Guggenheim Securities, LLC, Research Division - Senior Analyst of Biotechnology [55]

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A couple of follow-ups on givosiran. So first, in terms of the patient numbers you gave, I think you said 3,000 diagnosed in the U.S. and Europe. I just wanted to double check. I recall a 5,000 number at some point, so I just wanted -- maybe I misheard, but kind of rectify those 2 numbers. And then in terms of the breakout of the 1,000 patients who have more frequent attacks, I guess, can you compare and contrast the frequency in those patients versus kind of the broader 3,000 number?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [56]

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Yes. Let me start and then, Barry, you might want to add some more. As you can imagine, Whitney, as we get closer to the approval, we've been sharpening our pencils to really nail down the prevalence rates and the diagnosed patients versus the undiagnosed patients. There's no change in the overall estimate of the 1,000 recurring patients and the 5,000 sporadic patients that we've had out there. We believe those are still the right numbers. But as we get really granular on the patients that have active disease and are diagnosed, there are a total -- we believe, there are a total of 3,000 in the U.S. and Europe. Obviously, a larger number in the rest of world. The 3,000 in the U.S. and Europe, of which 1,000 of those 3,000 are those recurrent attack patients that have 4 attacks or more. And then 2,000 of those 3,000 are the less recurrent patients, so the sporadic attack patients. Now the 5,000 number is still a real number. And we believe that, that's where it goes. But when we talk about actual diagnosed patients, we've always said it's smaller than that 5,000 number. Barry, anything else to add to that?

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Barry E. Greene, Alnylam Pharmaceuticals, Inc. - President [57]

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No, I think you covered it well, John, yes.

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Whitney Glad Ijem, Guggenheim Securities, LLC, Research Division - Senior Analyst of Biotechnology [58]

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Okay. Then just one quick follow-up. Have you commented on how many patients are ongoing in the OLE, the early access protocol?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [59]

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We haven't yet, and it's a protocol that was only opened up relatively recently as well. But we'll provide more color as we get closer to approval for the product.

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Operator [60]

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We will now move on to our final question from Navin Jacob of UBS.

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Sriker Mohan Nadipuram, UBS Investment Bank, Research Division - Associate Director and Research & Analysis Associate [61]

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This is actually Sriker Nadipuram on for Navin Jacob. Just first on ONPATTRO. Just can you give us an initial sense of the number of patients in Japan and how the average dose in Japan compared to the average dose in the U.S.? And then maybe I missed this, on the COGS assumption, when do you expect to run through the already expensed product? And then I have just a longer-term question. I saw the Regeneron collaboration that a CNS asset was included, ALN-APP, that could possibly have application to Alzheimer's disease. With the news -- the recent news, do you guys have any updated thoughts on the priority of this program versus the others?

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [62]

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Great. Those are 3 great questions. So let's start with Barry and then go to Jeff. And then Akshay and I can do the last one.

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Barry E. Greene, Alnylam Pharmaceuticals, Inc. - President [63]

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Yes, thanks for the question. So we're not providing any breakout other than the international breakout. I can tell you from a -- just to give you some color. The Japan launch is going very well. The KOLs are very well aware. And as we mentioned, tafamidis in patients were very known in Japan. So we're seeing both de novo starts and significant numbers of patient switches. Now you asked about dosing, it's a weight-based dose. So Japan patients tend to be a little bit lighter, but that's about all we can say right now.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [64]

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Yes. The price per vial is very strong in Japan as well. That's additional color we can provide. Jeff, do you want to...

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Jeffrey V. Poulton, Alnylam Pharmaceuticals, Inc. - Executive VP & CFO [65]

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Yes. On COGS, today, we're at about 11% of sales, but that's benefiting from the zero-cost COGS that have previously been expensed to R&D. We expect the transition to be first half of 2020 when we'll see fully cost, cost of goods sold for ONPATTRO. And when that occurs, we expect to see that COGS percentage as a percentage of revenue step up into the mid- to high teens.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [66]

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Yes. And then, thanks for asking the question on Regeneron and APP. We are obviously excited about amyloid precursor protein as we've characterized before. It is our lead CNS program. Akshay, do you want to comment further on that?

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Akshay K. Vaishnaw, Alnylam Pharmaceuticals, Inc. - President of Research & Development [67]

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Yes. I think it will be our first IND in the CNS space. And we continue to believe that the work is going well. Our primary target is in cerebral amyloid angiopathy, which we've discussed before. It's a genetically validated target for the inherited form of the disease. And many authorities believe it's very heavily implicated in the wild-type or more sporadic form of the disease, which affects hundreds of thousands, if not millions, around the world.

And with respect to the broader question, I think, APP, a beta in Alzheimer's as we've heard recently from [Pfizer] continues to be an ongoing discussion and debate. And it will be very interesting to see how the various experts, regulatory agencies and elsewhere evaluate the aducanumab data set. I think it could be very important in further fueling the need to have a beta-suppressing agents. And what better than to turn the tap off or substantially turn the tap off and reduce the production of the protein, as we've done with TTR. And we would be optimistic that, that would have a profound impact on the nature of the disease. But as you know, much more to be learned there.

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John M. Maraganore, Alnylam Pharmaceuticals, Inc. - CEO & Executive Director [68]

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Yes. And obviously, we're -- we were pleased to see that there might be some light at the end of the tunnel for aducanumab and approaches targeting the amyloid hypothesis in Alzheimer's. And that's obviously good for medicine and patients. And that could also be instructive for our program as well, which is good.

Okay. So I think that's -- all right. Thank you. So I think that was our last question. So I do want to thank everybody for joining us on the call. We're obviously very pleased with the R&D and commercial progress that we've been making in Alnylam. And we believe that we're really doing our best to build a remarkable company focused on improving the lives of patients and capable of creating significant shareholder value.

So with that, we look forward to updating you next at our R&D Day in the coming weeks and then, again, toward the beginning of next year. Thank you very much.

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Operator [69]

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Ladies and gentlemen, this concludes today's conference.