U.S. Markets close in 4 hrs 45 mins

Edited Transcript of IONS earnings conference call or presentation 28-Feb-17 4:30pm GMT

Thomson Reuters StreetEvents

Q4 2016 Ionis Pharmaceuticals Inc Earnings Call

Carlsbad Feb 28, 2017 (Thomson StreetEvents) -- Edited Transcript of Ionis Pharmaceuticals Inc earnings conference call or presentation Tuesday, February 28, 2017 at 4:30:00pm GMT

TEXT version of Transcript

================================================================================

Presentation

--------------------------------------------------------------------------------

Editor [1]

--------------------------------------------------------------------------------

+++Please stand by for realtime captions.

--------------------------------------------------------------------------------

Unknown Speaker* [2]

--------------------------------------------------------------------------------

Welcome to Ionis Pharmaceuticals year end financial results conference call.

All participants will be in listen only mode.

Should you need assistance during the call, please.

[ Operator Instructions ]. Please note that this event is being recorded.

Leading the call today from Ionis is Doctor Stan Crooke Ionis Chairman and CEO, Doctor Crooke, please begin.

--------------------------------------------------------------------------------

Unknown Speaker* [3]

--------------------------------------------------------------------------------

Thank you and good morning everyone.

Thanks for joining us on today's conference call to discuss our 2016 year end financial results and business highlights.

2016 was a year of substantial accomplishments for us. We ended 2016 point -- stronger than ever before.

And that sets us up for an exciting 2017. On the call today we will review our confidence and Beth will discuss financials.

To start, I'll just summarize some of the key a competence for 2016, of course the most important highlight was SPINRAZA was approved in record time and launches off to a good start.

The first kind of phase 3 study compass was completed in treatment with what front triglycerides by 71% in the SES patients in the study reduce triglycerides by more than 1500 mg in the SES patients in the study reduce triglycerides by more than 1500 mg/dL.

In finding the port data from phase 3 SES study approach in March.

Made excellent progress in getting ready to launch the collaboration with the largest to develop co-commercialize Akcea and three RLX.

Ionis TTRRx is on schedule for phase 3 data in the second quarter and we took important steps to understand and resolve the cigarettes plaintive observed in three bar phase 2 studies.

We reported significant progress in understanding the unique characteristics with severely elevated triglycerides in the patients in the study that contributed to these serious platelets.

Both studies are continuing on track and we published data showing the serious platelet were not a class effect to prime without the axle and.

Finally be of tea pro forma operating profit for the year.

As we begin 2017, we believe we will have all the elements in place for a long-term financial growth.

We have SPINRAZA a drug with incredible potentials.

Now launch.

We have to more drugs finishing phase 3 that could be in the market next year.

We're advancing a advance in first in class investor class drugs we are highly efficient platform and business strategy.

Which will allow us to advance our pipeline of drugs without significantly increasing our Road expenses.

Joining me on today's call are Lynne Parshall our Chief Operating Officer, Len Haugen chief financial officer, Sarah Boyce chief financial officer, Tran 31 -- Paula Soteropoulos and Wade Walke.

And now we'd be read our forward-looking language statement.

--------------------------------------------------------------------------------

Unknown Speaker* [4]

--------------------------------------------------------------------------------

Yes thanks Dan.

--------------------------------------------------------------------------------

Unknown Speaker* [5]

--------------------------------------------------------------------------------

Reminder to everyone this conference call contains forward-looking statements regarding the financial outlook for business and therapeutics and the therapeutic and commercial of art -- Ionis product develop these describe Ionis intentions or beliefs including commercial potential for SPINRAZA and TTRRx and Linda source and with brick and should be considered an at-risk statement such statements are subject to certain risks and uncertainties pretty green those inherent to the process of discovering, developing and commercializing drugs that are safe and effective as human therapeutics and the availability of business Rozsa strikes.

Ionis for looking statements there assumption never materialize improved correct you cause results to differ materially than those applied by Frank although Ionis forward-looking statements and reflect good faith judgment managed these are based only on facts and factors currently known by Ionis as result your cautioned not to rely on these forward-looking statements . These and other risks concerning Ionis programs are described in annual report on form 10 K for the year ended December 31, 2015 and is most recently quarterly report on form 10-Q end -- on file with the of the.

Copies of these and other documents are available from the company.

Now but can the call over to Lynne .

--------------------------------------------------------------------------------

Unknown Speaker* [6]

--------------------------------------------------------------------------------

Thank you waiting to morning.

The approval of SPINRAZA first patient Vanessa Mae workmen deflate exciting achievement price.

We generate revenue from SPINRAZA sales and we looking for to revenues a growing substantially as the U.S.

launch proceeds and is our partner by a team rather regions.

The permit -- improve SPINRAZA record time and only three months with the broadest possible label the is a testament to the efficacy safety and tolerability that have been demonstrated in multiple clinical studies in multiple patient populations.

With SPINRAZA now.

For the first time patients with SMA in their pet -- families have a treatment option and hope of a longer and better life.

We know that transfer -- within the SMA community including families of physicians and Biogen is actively working with these groups TextBuyIt treatment.

The launch of SPINRAZA is proceeding well.

The initial demand for the drug as you would expect is significant.

SPINRAZA is truly a breakthrough drug with tremendous potential.

Where the pleased with the urgency with which Biogen is taking the slot for example we received FDA approval just before they do how -- holidays I'm but December 26 there were Artie teams in the field working with physicians to ensure the patients had as rapidly as possible.

Biotin is also working patient access to treatment a smooth and streamlined as possible in the making excellent progress.

In addition there working diligent with payers as reimbursement policy decisions are made.

Further expanded access programs are established in multiple regions and expedited regulatory review is underway in the EU. Biotin is also submitted applications from Japan, Canada and Australia and is planning to file additional applications and other countries this year.

The cargo program for SPINRAZA it produced a robust set of data demonstrating consistent benefits from treatments in bit with all forms session a. I attended recently reported from phase 3 endear study the British pediatric neurology conference.

They ended status it SPINRAZA treated unfenced the survival and improvements in motor milestones towards compared to untreated infants.

In the carriage study.

Patients with SMA also demonstrated improve motor function scores compared to untreated patients.

Late last year biotin also presented it at the world Society for the nurture study increased symptomatic infants with SMA.

In the study, infants who began treatment before six weeks of age were all still alive without the need for permanent ventilation and achieve motor milestones on essentially the same timeline as their healthy counterparts.

We're encouraged we see no evidence of no effect to in need of the studies conducted to date.

We Biogen continued from FBA in meeting in April.

Over last year reported positive clinical data from happen doesn't drugs evaluated nearly a dozen clinical studies including numerous phase 2 and phase 3 studies these include a from the endear carries and of SPINRAZA.

The phase 3 compass of Alanna sourcing.

The phase 2 of factor 11 RX in patients with end-stage renal disease or ESRB in the phase 2 study of Ionis -- INOS-GCCRx with patients with type II diabetes.

We added five new including our first drug using both Generation 2.5 drugs chemistry in our chemistry with we are helping with AstraZeneca in the first Raleigh locally acting drug for G.I.

autoimmune diseases which we are developing with Jansson.

A 2017 is off to a great start in the first week of January we in the with your virus to developing a commercial five [Indiscernible] Intermec for patients at risk of cardiovascular disease with high levels of triglycerides.

The virus is a leader in Tabasco therapies and we feel they are an excellent partner to ensure these innovative drugs reach the commercial potential.

This collaboration should accelerate the development path for both drugs by allowing us to advance into large phase 3 cardiovascular outcome studies more rapidly than we would have otherwise.

That's enabling the potential use of these drugs and broad-based -- patient populations.

Axial plans to commercialize it drug using the focus sales force they are building to commercialize Alanna sourcing.

The economics of this transit are attractive potentially worth over two $1.6 million plus royalties up to below 20% range.

This includes $225 million in near-term patient -- payments at $100 million of which we have already received and $75 million we expect to receive this quarter.

Earlier this month, we announced that a partner there inclusive payment from $55 million Earlier this month, we announced that a partner there inclusive payment from $55 million-$75 million to in close 11 RX and the like a drug Ionis factor 11 RX. Those decisions based on positive data from a positive -- phase 2 of in patients with the SRD and the strong data from drugs and are like a program showing significantly enhance potency with support the potential of those monthly were even less frequent -- frequently.

To move this program forward as quickly as possible we plan to conduct phase 2 study are by in patients of the SRD to optimize the phase 3 program.

We'll also being developed being IONIS-FXIRx during the studies bear will be responsible for commercialization of both drugs.

We're pleased that bear has decided to expand the fact relevant program as the doses a very large for therapeutic need which we believe both of these drugs can provide benefit.

With these two drugs we believe we can continue to pursue indications of patients with the SRD while opening up opportunities to address broader patient populations.

We believe both the new virus operation of expression of our bear partnership demonstrates potential for drugs to be used in large patient populations in multiple therapeutic areas.

Turning to Alanna sourcing, in March we had Nexium approach study and family -- patients with FCS.

First on like to tell you a little more about FCS in the significant burden it represent these patients lives.

Us -- FCS is revenues characterized by extremely elevated triglyceride levels which resulted in severe episodes of a Domino pain which can result in hospitalization.

Patients with FCS Lib at the risk of life-threatening pancreatitis of many suffer from diabetes, liver dysfunction in memory and cognitive impairment.

To avoid severe symptoms including attacks a pancreatitis, patients must maintain a drastically reduced diet limited to approximately 10 to 20 g of fat which is less than 1 1/2 tablespoons of Olo.

Even with this restricted Dyer could triglyceride levels remain extremely elevated.

In a diversion from the extreme diet can result in severe sentence.

Leaving patients to live in constant fear.

Patients bill isolating depresses a result of the restricted diet in the daily challenges of their disease.

In addition frequent pain in hospitalization leads to a repeated absences from work and often the inability to hold a full-time job adding to their sense of isolation and the burden imposed by their disease.

Turning to our clinical program in December we reported positive phase 3 data from the compass data.

Demonstrating a 71% reduction in try the slides in week 13 which was sustained to the 26 week period.

Importantly these sorts of patients the 50th with study achieved a mean absolute reduction in triglycerides are more than 1500 mg/dL.

These data were consistent with earlier phase 2 data in FCS patients and give us confidence as we look forward to reporting data from our approach.

We in the team are well along in preparing marketing authorization for the treatment of CS this year in the U. S., EU and Canada.

Importantly the FDA in a you may have both granted the designation for the treatment of ICS.

The team has also made progress in their came to launch Alanna sourcing in 2018. In the second quarter were planning to report data from our Phase III neural TTR of a trend not -- IONIS TTRRx in patients with pollen good morning polyneuropathy.

Then the study where using cardiac imaging to a lab I would a large subset of patients while some cardiac involvement.

As result will have an opportunity to evaluate these IONIS TTRRx on the patient's neuropathy and are cardiomyopathy.

We in our partner GSK are well along in preparing to file before year end for marketing authorization for IONIS TTRRx.

There often drag diet designation from IONIS TTRRx and we have data -- designated a fast-track status.

The growth in sales the important Phase III readout for the first half of the year, and the planned regulatory filings up for the second half of the year represent the key catalyst for 2017. In addition, our large and diverse pipeline should divide continue with new flow throughout the year and now like to turn the call over to Beth.

--------------------------------------------------------------------------------

Unknown Speaker* [7]

--------------------------------------------------------------------------------

Thank you Lynne.

Good morning.

2016 and now 2017 our pivotal years as we move toward sustainable profitability.

As result of our achievements in 2016, particularly the approval of SPINRAZA, we improved upon revenue comp pro forma operating loss in cash guidance.

We ended the year in the strongest financial position in the company's history with pro forma operating profit of $26 million in more than $665 million in cash.

Our 2016 pro forma operating profit was driven by $347 million of revenue from our partner programs and drugs.

These results are substantially improved over our financial guidance of our pro forma operating loss in the low $60 million range, revenue in excess of $240 million and year-end cash or more than $600 million.

Our anger results were strengthened by our fourth quarter pro forma operating income amount $26 million.

We also recorded pro forma net income of more than $30 million in the fourth quarter supporting a pro forma net loss of $14 million for the year.

The substantial increase in our revenue reflects the pipeline advances we made throughout the year.

We finish 2016 with $347 million of revenue a 45% increase over our guidance in more than a 20% increase over 2015. Our 2016 revenue was comprised of $272 million from licensees and partner payments, $61 million from the amortization about rent payments and $14 million from manufacturing services we perform for our partners.

$170 million of the licensee in the partner payments were related to SPINRAZA.

In addition we earned more than $90 million from five of our partners associated with progress on nine different drugs.

So we can consistently generate revenue in cash from multiple partners and numerous drugs is a reflection of the success of our partnering strategy.

This strategy supports our ability drug if I net debt to remain financially strong loss of -- expanding and expanding our pipeline advancing our technology.

Our pro forma operating expenses for 2016 work 300 drug if I net debt to remain financially strong loss of -- expanding and expanding our pipeline advancing our technology.

Our pro forma operating expenses for 2016 work $321 million and as anticipated increase slightly from 2015. The increase was due in large part to the numerous phase 3 studies we are conducting.

In addition Akcea continue to build its infrastructure to prepare for . In 2016, we received more than $190 million of cash from our partners and end the year with $665 million in cash, $65 million more than our original guidance.

By year-end cash does not include more than $100 million we earned at the end of 2016 and received this year.

Additionally already this year we have generated more than $250 million of cash primarily from Novartis and Bayer.

Now that SPINRAZA has been approved in the U. S. I think this a good time to spend a few minutes describing our financials and how they will change.

As reminder, our revenue to date is consisted of several components including amortization of upfront fees we received from our partners, license fees and milestone patient is our programs of dance and sales of drugstore partners.

We refer to these types of revenue from our partnerships as Road revenue.

In the nature of our partnerships insurers we have a steady stream of our Road revenue.

Importantly, over the past five years we have consistently increased our Road revenue which is driven substantial improvements in our operating results from the same period from 2011 two 2016 we increased our Road revenue by more than 250%.

While in any year the specific sources of our Road revenue change, the consistent growth we've achieved over the last five years demonstrates the sustainability of this component . The efficiency of our technology coupled with our partnering strategy in which our partners contribute only funding but also conduct impertinent work to advance our drugs insurers we can advance our large pipeline with all were relatively modest cost structure.

We're pleased to add commercially from Salveen from Road revenue.

The our brand loyalty from SPINRAZA sales this means that as SPINRAZA sales grow, so were all portion of the sales.

The revenue we earned from these royalties is nearly our profit to us. We expect that operating expenses will be essentially flat compared to 2016. We plan to continue to increase our commercial expenses as Akcea plans to launch globally in 2018. However, we expect our Road expenses to be lower in 2017 compared to 2016 as we conclude cost late phase 3 programs. Because of the efficiency of our technology even with declining Road expenses this year we will continue to advance our earlier straight drugs and add new drugs to our pipeline.

This is an important year for us. With the addition of commercial revenue from SPINRAZA royalties for strong base of Road revenue which funds most of our operating expenses, we expect to be breakeven or profitable in the operating line this year on a pro forma basis.

As the year goes on and we have more disability on nusinersen sales this plan to Pridemore's -- provide more specific guidance.

The earliest we will provide more granularity in our financial guidance is in our second quarter earnings call.

All of this translates to being cash flow positive in 2017. So far this year, we have generated more than $250 million and where project into in 2017 with more than a $25 million in cash.

Beyond 2017, the look forward to continued growth in commercial revenue from SPINRAZA royalties and the addition of a non-source and Ionis TTR relative.

We believe we have the key elements in place to achieve sustained long-term financial growth.

We have multiple drivers of revenue.

We have an efficient technology.

And we will partnering strategy that maximizes the near and long-term potential of our drugs and supports prudent management of our expenses.

We believe this combination will support our continued financial strength.

And I'll turn the call back over to stand.

--------------------------------------------------------------------------------

Unknown Speaker* [8]

--------------------------------------------------------------------------------

Thanks.

We've said this many times recently in on today's call but it's worth reporting, -- repeating, although still privileged to be associated with SPINRAZA.

What's best about science, innovation and medicine SPINRAZA brings benefit where the has been over before.

SPINRAZA also illustrates the potential of our innocence technology to it address other serious debilitating neurological diseases.

In collaboration with Biogen we have eight programs advancing in late stage research and in development.

The growth of the collaboration highlights the productivity and breadth of opportunity we are pursuing with Biogen.

It also highlights the efficiency of our technology.

We're confident SPINRAZA is just the first excess that will result from this collaboration.

During 2017 we continued to advance our broad immature pipeline will enhancing the quality of the drugs in the pipeline.

With generation 2+ drugs, 10 of those, six generation to five drugs and now first generation like a drug, each increase safety margins while improving convenience and tolerability.

Nellis discuss our goals for 2017 . Their ambitious but we're confident our ability to excuse them.

We plan to be breakeven or profitable on a pro forma basis at the operating line.

We look forward to regulatory approval for SPINRAZA in Europe in two additional regulatory filings and approvals and other countries to bring spin Raza -- SPINRAZA to patients around the world is quick as possible we will report on Salveen -- IONIS TTRRx and we expect to at 325 new drugs to the pipeline and report data from all the clinical programs and continue to advanced technology platform.

We now the children's place to achieve sustained, long-term financial growth.

We have both the drivers of revenue as mature broad advancing clinical pipeline and innovating more efficient drug discovery platform that enables us to continue to develop new drugs that have potential for significant commercial success, both rare and more prevalent diseases.

And because of the efficiency of our technology in partnering successes, we can do all of this while prudently managing our expenses.

All of these elements bring us closer to our goal of becoming a profitable, multi-product organization delivering medicines to patients with serious diseases.

With that I'll now open up the call for Q&A.

Entry if you can set us up please.

--------------------------------------------------------------------------------

Unknown Speaker* [9]

--------------------------------------------------------------------------------

We will now begin the question and answer session.

To ask a question.

[ Operator Instructions ]. At this time we will pause momentarily to assemble our roster.

Our first question comes from Jim Birchenough off of Wells Fargo.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [10]

--------------------------------------------------------------------------------

Hi guys and thanks for taking the questions and the leverage from the business model emergent.

Dystrophy question, on the question -- role in a source and and TTRRx, to do may be comment on the open label extension program for those two trials in what you're seeing in how that might translate into persistence on therapy in the real world and the knockout follow-up.

--------------------------------------------------------------------------------

Unknown Speaker* [11]

--------------------------------------------------------------------------------

Well in both studies the significant majority of patients have rolled over into the open label studies.

And -- and are continuing.

--------------------------------------------------------------------------------

Unknown Speaker* [12]

--------------------------------------------------------------------------------

And then just stand, a question on the pipeline beyond those two drugs, can you give us an outline of how you expect Doctor 11 program to rollout?

What should be the next event we watch for in that collaboration with Bayer?

--------------------------------------------------------------------------------

Unknown Speaker* [13]

--------------------------------------------------------------------------------

Will initiate the next phase 2 study in patients with end-stage renal disease and that should enroll rapidly we hope and results should be available you know -- in a reasonable time.

And at the same time, we are already progressing very nicely on the identification of a like a firm of Doctor 11. So in due course, it's difficult to know exactly when, you'll see the announcement of phase 1 studies on the like a form of Doctor 11.

--------------------------------------------------------------------------------

Unknown Speaker* [14]

--------------------------------------------------------------------------------

And then just a final question on SPINRAZA, as we've seen some of the reimbursement decisions come out, it seems like publication of the type II , three from payers is important.

Should we expect that shortly and how much that in fact -- impact reimbursement?

--------------------------------------------------------------------------------

Unknown Speaker* [15]

--------------------------------------------------------------------------------

Well there will be presentations of a and a will update all that.

We have actually -- we're actually very pleased at the rate at which reimbursement is taking place.

And are getting great reports of -- about how all that is going and I'll let Sarah amplify on that.

--------------------------------------------------------------------------------

Unknown Speaker* [16]

--------------------------------------------------------------------------------

Yeah I think Jim, speaking to the importance of the data, what we've seen some of those payer policy decisions that have essentially be a door left open with regard to expanding that policy in coverage of seeing the data.

We know the Biogen team is working extremely hard right now with the payers with the positions and with the patients to make sure the people who need access cannot get it and not executing and doing right now.

--------------------------------------------------------------------------------

Unknown Speaker* [17]

--------------------------------------------------------------------------------

I think they will be reporting data at AAN.

So I think that's the next key step in the payer process.

--------------------------------------------------------------------------------

Unknown Speaker* [18]

--------------------------------------------------------------------------------

Absolutely.

--------------------------------------------------------------------------------

Unknown Speaker* [19]

--------------------------------------------------------------------------------

Rate thanks for taking the question.

--------------------------------------------------------------------------------

Unknown Speaker* [20]

--------------------------------------------------------------------------------

Thank you.

--------------------------------------------------------------------------------

Unknown Speaker* [21]

--------------------------------------------------------------------------------

Our next question comes from Chad Messer of Needham & Company.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [22]

--------------------------------------------------------------------------------

Great.

Thanks for taking my question.

For volanesorsen , can you comment on the size and makeup of the commercial team sort of where you are today and where you think that has to go throughout the year to support a launch in 2018?

--------------------------------------------------------------------------------

Unknown Speaker* [23]

--------------------------------------------------------------------------------

Well we've made -- you know, really strong progress there.

We're really happy with volanesorsen is. Paul will give you more specifics about what she's thinking.

--------------------------------------------------------------------------------

Unknown Speaker* [24]

--------------------------------------------------------------------------------

Sure.

Thank you Chad for the question.

As you know we talked about this that we plan to commercialized volanesorsen globally with a very specialized for patient centric approach.

So this commercial model will include the sales force in each country complemented by medical affairs, patient healthcare provider services, education, market access reimbursement.

Dietary nursing support and of course, to provide easily platelet monitoring which is important of these patients.

If you think about that three regions that we are initially launching in which of the U. S., Canada and Europe.

We'll be looking at an integrated team with all of these about 75 two 100 people combined in those regions.

So not just field sales, but so complementary intrepidity.

--------------------------------------------------------------------------------

Unknown Speaker* [25]

--------------------------------------------------------------------------------

Great.

Thanks.

--------------------------------------------------------------------------------

Unknown Speaker* [26]

--------------------------------------------------------------------------------

Our next question is from Eric Schmidt from Cowen & Company.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [27]

--------------------------------------------------------------------------------

Thanks for taking my questions in my congratulations also the progress.

A follow-up to Jim's question on SPINRAZA reimbursement.

Sounds like that's in good stead.

So if that's the case, what would you say is rate limiting to getting more patients on the drug?

--------------------------------------------------------------------------------

Unknown Speaker* [28]

--------------------------------------------------------------------------------

And so, in terms of the Biogen is we know is working very hard on launch.

And what biotin had talked about were some of the logistical challenges with regard to patients treated with SPINRAZA.

And that's very much on a center by center basis.

Working directly with the centers to [Indiscernible].

Some of the obviously, those you know a demand a very high patient amount and then we also have a very motivated position population as well.

So it's a matter of working through case-by-case and tens of available [Indiscernible] to be able to get those procedure or even just a simple factor of scheduling patients in an out of the office.

So it's a logistical challenges that are really working on solving.

Right now.

--------------------------------------------------------------------------------

Unknown Speaker* [29]

--------------------------------------------------------------------------------

Okay thanks for the color.

Maybe one for Paula.

If you are fortunate enough to get positive data on volanesorsen and FCS, here shortly, what would be rate limiting to the filing?

Is there anything else the need saponin distractibility, in manufacturing or anything like that that could slowdown in NBA?

--------------------------------------------------------------------------------

Unknown Speaker* [30]

--------------------------------------------------------------------------------

Eric, nothing that could be slowing down.

Really is getting more time to fully analyze the data that the package together -- put the package together , packages I should say because we are looking to simultaneously as closely as possible file in the U. S. and Canada at the same time.

All that has near philosophies, there are meetings, there meetings all of those in sequence the to happen but nothing else like manufacturing everything else will be ready to go.

--------------------------------------------------------------------------------

Unknown Speaker* [31]

--------------------------------------------------------------------------------

Great.

Thanks a lot.

--------------------------------------------------------------------------------

Unknown Speaker* [32]

--------------------------------------------------------------------------------

Our next question is from Celine of Goldman Sachs.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [33]

--------------------------------------------------------------------------------

Congrats on all the progress and thanks for taking my question.

This is actually [ name unknown ] forcefully.

I have a couple.

First of all can you provide us with an update on how the SPINRAZA launches going in terms of how many SME theaters have prescribed the drug and also look at the mix of patients are you getting and then just on the volanesorsen program, you know when you do commercializes drug, which specialists and how many do plan to target and what proportion of that population is treated by these doctors?

And I have one follow-up question on the platelet monitoring you mentioned.

You know a after this drug launches, how frequently do anticipate this to occur?

Thank you.

--------------------------------------------------------------------------------

Unknown Speaker* [34]

--------------------------------------------------------------------------------

Well quite a nice start on the SPINRAZA question that over to pollen relation to Stephen Willey - Stifel.

So Biogen right now is working on executing a launch.

I think really on a day-to-day basis some of those numbers about these centers you are prescribing in the breakdown of the patients, that's varies on a day-to-day basis and it's really something that addressed by Biogen.

I would hate to miss speak and they are the team that's doing a tremendous job on launch right now.

So it's best addressed by them.

--------------------------------------------------------------------------------

Unknown Speaker* [35]

--------------------------------------------------------------------------------

With regard to monitoring platelets, we don't want to pre-guess what that will be before conversations with regulatory agencies.

So we think what's really important, is that these patients should be seen regularly and we are making a lot of progress in making sure that platelet monitoring will not be significantly intrusive.

Paula maybe you can answer that other question about volanesorsen Sure.

Sure.

And so the specialist that focus on this type of disease our methodologist in many of those can be specialized endocrinologists.

And also pay cryptologist.

In each region it is slightly different.

In Europe for example, the lipid centers are really truly Ahab of patients in general and of course it varies by country, do generally get referred to those specialists it's about 75 with each hub across your.

Again each country is slightly different in the way they practice and who the methodologist are.

Again they could be specialized endocrinologists etc.

In the United States, the again need target point is methodology specialized endocrinologists and pay cryptologist who do get consulted when the patient is in the emergency room or ICU undergoing pancreatitis.

In terms of lipid treatment such as [Indiscernible] 45 in the United States.

And as we think about -- though that is treatment hub, as we think about the specialists in the United States.

There's probably a couple hundred lipid specialist that another three There's probably a couple hundred lipid specialist that another 3 to 400 and dermatologist specialist that will be targeting.

And then you commented on the plate -- percentage of patients seen by these physicians.

As a typical rare disease that is and have any treatment option available, many times these patients and again typical of these type of emergencies is don't ever get a formal diagnosis.

So they'll be seen in the emergency room with pancreatitis, the type -- triglycerides always check another problems are ruled out like alcohol's men go better disease.

In there's often a genetic driver a genetic cause to that aren't given a name.

A lot of the work we're doing is education and highlighting how easy it is to diagnose these patients in the need to actually have them referred to a treating specialist.

So that's a lot of pre-commercialization work we're doing in education and frankly with the drug on the horizon, that will drive more physicians to formally diagnosed patients which patients really do need a formal diagnosis.

It validates a lot of the things they go through every day.

Living with this disease.

Does that answer your question?

--------------------------------------------------------------------------------

Unknown Speaker* [36]

--------------------------------------------------------------------------------

Yeah , yeah that was very helpful.

Thanks.

--------------------------------------------------------------------------------

Unknown Speaker* [37]

--------------------------------------------------------------------------------

Next please.

--------------------------------------------------------------------------------

Unknown Speaker* [38]

--------------------------------------------------------------------------------

Our next question comes from David Leibowitz of Morgan Stanley.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [39]

--------------------------------------------------------------------------------

Thank you very much for taking my question.

I had a quick question on the coming Phase III approach data.

If you could just give us a quick run through of the key endpoints in the trial.

And what needs to be achieved.

And ultimately what you plan to disclose in the topline release and just initially in that what type of granularity do you expect to give us on the [ name unknown ] profile in management of thrombocytopenia?

--------------------------------------------------------------------------------

Unknown Speaker* [40]

--------------------------------------------------------------------------------

The primary endpoint is triglycerides.

And then -- and within triglycerides we'll be looking up percent reduction.

Absolute reduction and then we will be looking at the fraction of patients that give below specific levels of triglycerides where that they are associated with significant reductions in pancreatitis risks.

And we have another of other exploratory endpoints we'll be looking at an will see will be talking about those later.

And will provide sub -- sufficient granularity that I think you'll be able to make a judgment about the safety and tolerability of the drug with regard safety.

--------------------------------------------------------------------------------

Unknown Speaker* [41]

--------------------------------------------------------------------------------

6 for taking my question.

--------------------------------------------------------------------------------

Unknown Speaker* [42]

--------------------------------------------------------------------------------

You bet.

--------------------------------------------------------------------------------

Unknown Speaker* [43]

--------------------------------------------------------------------------------

Our next question comes from Paul that is of X partners.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [44]

--------------------------------------------------------------------------------

Paul -- Paul Matteis - Leerink from lower partners.

Couple questions you don't mind.

When I'm curious if you're expecting advisory committee from Paula Soteropoulos -- volanesorsen and then I'd love to talk about the HTTP program.

Can you expand upon the strategy the type of HDTV knockdown you're going for.

I guess the magnitude in the specifically how confident are you that the our go can get distributed broadly enough in their brain to convert clinical benefits and the different disease than in SMA.

Thanks a lot.

--------------------------------------------------------------------------------

Unknown Speaker* [45]

--------------------------------------------------------------------------------

So let's see.

Volanesorsen.

That was the first question.

I think it's too early to comment on whether there will be an advisory committee or not . First step is to unwind the phase 3 data and have our pre-NDA meeting and then we can begin to talk about that.

What was the second question I'm sorry?

--------------------------------------------------------------------------------

Unknown Speaker* [46]

--------------------------------------------------------------------------------

TT program what Margaret did overlook in are we confident about distribution in the brain?

--------------------------------------------------------------------------------

Unknown Speaker* [47]

--------------------------------------------------------------------------------

ATP is very exciting and Roche.

And we're very confident we are getting significant distribution thought the brain.

That was one of the steps that we took as we did the early evaluation of the technology to determine where we wed , where we would take the technology.

Would be stay simply in this -- in the spinal cord or would be move elsewhere?

We know in fact that these drugs distribute quite broadly.

And to of the areas for we need to get them done for HDT would not.

Would not develop a drug for HDT and expose patients with HTP to the drug.

And we also have shown, in -- in the SMA infants, in the us it -- autopsy study, that we get significant distribution through all the brain areas that we see and other animal systems -- other animals -- animals as well.

And we are looking at reduction of both normal HDT and we think of a fairly moderate reduction in HTP can lead to fairly substantial benefit in that trial is actually going very well.

And we're looking forward to sharing more information about -- with you about HDT later in the year.

--------------------------------------------------------------------------------

Unknown Speaker* [48]

--------------------------------------------------------------------------------

Okay.

Thanks stand.

--------------------------------------------------------------------------------

Unknown Speaker* [49]

--------------------------------------------------------------------------------

Our next question comes from Jessica fry of J.P.

Morgan.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [50]

--------------------------------------------------------------------------------

Hey there.

Thanks for taking my question's.

First one is just a TTRRx question.

Can you help us think about is near where you have positive data in the in our TTR study and we know have patience with cardiomyopathy in their just Heidi Wood think about real word used in cardiomyopathy patients once the product is available ? In the in the second is a longer term financial question.

If we look at over the coming years I realize there's probably imperfect visibility here.

But she we think of this years the first of many years with pro forma operating profitability or is it possible bearers lumpiness in milestones -- milestones that can lead us to swing back and forth around that breakeven mark for period of time?

Thank you.

--------------------------------------------------------------------------------

Unknown Speaker* [51]

--------------------------------------------------------------------------------

Well on HDT, -- I'm sorry on TTR, we'll be looking at the benefit we see on the polyneuropathy form of the disease and then we'll have a look at the cardiac form of the disease.

And I think how the drug will be used in the real world will be a function of those data principally.

And I think we just have to wait until the phase 3 studies are done before we talk about what -- what the strategy to use that information would be in that how that web you know have of how the drug might be used.

With regard to the financial question.

I'm going to let Beth handle that.

--------------------------------------------------------------------------------

Unknown Speaker* [52]

--------------------------------------------------------------------------------

I just want to say one thing about TTR.

Just to amplify about what stands at about TTR, in our ongoing study, of course we had a predetermined subset of patients who came in with polyneuropathy which is the basis for the study.

But also for -- with cardiac sentence.

We didn't do imaging all the patients coming to the study and what we found that many more patients actually had early symptoms of cardiac involvement with the disease early evidence of cardiac involvement even though they didn't have a overt symptoms. And so we do think it's a very, very interesting -- interesting data about the mold by -- multi-organ involvement under these patients whom really all have different manifestations of the same disease.

--------------------------------------------------------------------------------

Unknown Speaker* [53]

--------------------------------------------------------------------------------

Okay got it.

--------------------------------------------------------------------------------

Unknown Speaker* [54]

--------------------------------------------------------------------------------

So this is Beth.

High -- in looking forward we think that years of pivotal year as I said.

We think we've cross the threshold and are projecting operating profitability.

We also look at the future with growing SPINRAZA royalties as Biogen achieves approvals in other parts of the world with the potential for adding commercial revenues from volanesorsen and potentially TT RS , and all of that commercial revenue sitting on top of a very substantial consistent base of Road revenue that essentially covers our operating expenses.

And so we look forward to not only continued growth in operating profits, but given that 20s -- 2015 reported a pro forma net loss of you know 14 -- $14 million, where also looking forward frankly to sustained and growing earnings.

On a net income basis going forward in the future.

--------------------------------------------------------------------------------

Unknown Speaker* [55]

--------------------------------------------------------------------------------

Okay.

Got it.

--------------------------------------------------------------------------------

Unknown Speaker* [56]

--------------------------------------------------------------------------------

Will you be getting the SPINRAZA royalty number as kind of we moved to the year get to next year is there some point you felt comfortable giving us that number?

--------------------------------------------------------------------------------

Unknown Speaker* [57]

--------------------------------------------------------------------------------

In terms of our guidance, will give more granularity as we get little bit further into the year.

Again you know we just can't get ahead of both Biogen with that.

--------------------------------------------------------------------------------

Unknown Speaker* [58]

--------------------------------------------------------------------------------

Okay.

Understood.

Thanks

--------------------------------------------------------------------------------

Unknown Speaker* [59]

--------------------------------------------------------------------------------

Our next question comes from Do Kim - BMO Capital Markets . Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [60]

--------------------------------------------------------------------------------

Hi Mac this is actually Alex from federal.

The present a more detail on the in focus study for FCS and how many centers are participating in study?

Heavy been status satisfied with the quality of the data receipts of far?

And when we -- we expect receipt -- receive a presentation.

--------------------------------------------------------------------------------

Unknown Speaker* [61]

--------------------------------------------------------------------------------

Paula?

--------------------------------------------------------------------------------

Unknown Speaker* [62]

--------------------------------------------------------------------------------

Yeah sure just remind folks what in focuses, it is a real world study of a summary of STS patients with the burden of disease looking at the or physical psychosocial emotional burden on their disease.

There really is a limited understanding in the literature of the disease.

So is important for us to be able to quantify some of the things we hear from physicians and patients that these patients go through.

And so we are, our -- so right now we have about 137 or so patients that have enrolled in completed the study.

They are mix between the United States, Europe and a couple other geographies.

We are putting together an initial publication on an interim look and that should be something that will be published within -- I would say by the end of March.

I can't remember the exact timing of the target.

But just to give you a flavor of what we're seeing is the data is really giving us quantifiable numbers on how often patients are having pancreatitis for example , how long the hospital Cesar -- but also some of the daily manifestations they go through in terms of abdominal pain, chronic fatigue and brain fog.

All of these are caused by the polymeric run which causes a very viscous blood.

On the opening were seeing is a significant account of -- amount of patients who are unemployed or unable to work because of their disability.

And also a range of patients that are fairly, fairly young age.

So those of the types of things that will be coming through on the data.

--------------------------------------------------------------------------------

Unknown Speaker* [63]

--------------------------------------------------------------------------------

The other -- other point to add to that is, we also benefit from the history study that Doctor bidet is completing.

In Montréal.

He has followed more than 80 patients for as long as 30 years.

And it was that database that he presented in the summer that was -- first identified the platelet variations.

And so he -- we hope, will be publishing a lot of the information from that very substantial -- I think it's largest most substantial and thorough you know, analysis of what life is like for these patients.

That's ever been done.

And what's very comforting to us is to -- is to compare the information he has that he will be publishing to the basic conclusions that Paula and her team have drawn from the in focus study and they are highly, highly complementary" event.

So we're about to move from a position in which very little was known about the natural history of the disease, to I think you fairly good understanding of the impact of this disease on these patients.

--------------------------------------------------------------------------------

Unknown Speaker* [64]

--------------------------------------------------------------------------------

And stand, [multiple speakers]

--------------------------------------------------------------------------------

Unknown Speaker* [65]

--------------------------------------------------------------------------------

What I think is -- one other point that I think is worth mentioning, is that in the last year only really, significant patient advocacy groups have been formed and began to have a voice.

Around this disease FCS.

So I think we're very encouraged by the fact that we have natural history data available to us in the growing awareness around the world in all of the communities that are relevant of the impact of this very serious disease.

--------------------------------------------------------------------------------

Unknown Speaker* [66]

--------------------------------------------------------------------------------

And I just wanted what -- one point I wanted to mention about the in focus study being from 137 patients -- these are not patients in our current -- current volanesorsen.

These are new patient.

--------------------------------------------------------------------------------

Unknown Speaker* [67]

--------------------------------------------------------------------------------

Thank you.

Next question.

--------------------------------------------------------------------------------

Unknown Speaker* [68]

--------------------------------------------------------------------------------

Our next question comes from Yale Jen of Laidlaw & Company.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [69]

--------------------------------------------------------------------------------

Hello good morning and thanks for taking the question in my congratulate on this performance as well.

Dissed on the SPINRAZA , volanesorsen in the TTR, what may be the highlight for other programs as far as the meaning for this year in terms of for either data releases or development we should be paying you know attention to?

--------------------------------------------------------------------------------

Unknown Speaker* [70]

--------------------------------------------------------------------------------

Well -- you know, the issue is we have very large pipeline and so of course, the things that are phase 2 come to mind, [Indiscernible], three RX, and then a number of rare disease drugs that are forthcoming.

Ended the performance of a like a, we should be adding significantly more information about the Akcea we think it is behavior there.

And we will be adding new drugs that broaden the pipeline as well.

And will provide a good bit more information about that in the coming months.

--------------------------------------------------------------------------------

Unknown Speaker* [71]

--------------------------------------------------------------------------------

Okay thanks.

And then maybe a question -- does the little bit write down in terms of a 200 film in nine -- two and $50 million to receive this quarter in terms of roughly how much will be focused for the quarter and for the quarter how much Bay -- might be and amortization under measurements.

Thanks Max?

--------------------------------------------------------------------------------

Unknown Speaker* [72]

--------------------------------------------------------------------------------

Sure.

The $250 million we already generated on the -- Novartis and they are, roughly breaks down as $175 million from the virus, 80 million of that goes against equity because it was part of the equity purchase the meeting our stock.

$20 million of that is premium in that equity purchase and that will be amortized into revenue over the period of the work we do under that collaboration.

The $75 million upfront payment will also be amortized into our -- over our work.

In the new $75 million from Bayer -- a portion of that will likely be bumped into revenue this quarter as a result of the license to the Leica for factor 11 and the rest will be amortized into revenue over the course of the work we do for that collaboration.

--------------------------------------------------------------------------------

Unknown Speaker* [73]

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Unknown Speaker* [74]

--------------------------------------------------------------------------------

Okay thanks I appreciate it.

--------------------------------------------------------------------------------

Unknown Speaker* [75]

--------------------------------------------------------------------------------

Sure.

--------------------------------------------------------------------------------

Unknown Speaker* [76]

--------------------------------------------------------------------------------

I know we're running long.

We have a couple or question.

Access to please.

There are next question is from Stephen Willey - Stifel.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [77]

--------------------------------------------------------------------------------

Thanks for taking the question.

I'll keep it brief.

So just curious I guess as we think about the TTR release he talked about the cardiac imaging that's being conducted in that study.

And just -- just wondering if we should anticipate that topline release would have any commentary around potential cardiovascular and if it send it so, whether or not that would continue need additional information bit one -- beyond echoes?

Thanks.

--------------------------------------------------------------------------------

Unknown Speaker* [78]

--------------------------------------------------------------------------------

We actually expect to have topline information about the echoes.

I don't think will be getting into much more detail than that.

--------------------------------------------------------------------------------

Unknown Speaker* [79]

--------------------------------------------------------------------------------

All right.

That's helpful thank you guys.

--------------------------------------------------------------------------------

Unknown Speaker* [80]

--------------------------------------------------------------------------------

The next question comes from they Mac of Jenny.

Please go ahead.

--------------------------------------------------------------------------------

Unknown Speaker* [81]

--------------------------------------------------------------------------------

Thanks for taking my question.

Dissed if you could help us understand the mechanism of action aground the that you been with SPINRAZA to have might impact the type I and type II patients.

Thanks for a much.

--------------------------------------------------------------------------------

Unknown Speaker* [82]

--------------------------------------------------------------------------------

I don't think we've seen any growth retardation.

The facts are that infants our life.

Which would not be the case without it. And the vast majority of infants continues get stronger and grow and add weight in contrast to before or without treatment would they do it lose weight and eventually die.

So I'm not aware of anything other than those data.

Thank you.

--------------------------------------------------------------------------------

Unknown Speaker* [83]

--------------------------------------------------------------------------------

Final question?

--------------------------------------------------------------------------------

Unknown Speaker* [84]

--------------------------------------------------------------------------------

Our next question comes from Doug Adams of took a bill ask it management.

--------------------------------------------------------------------------------

Unknown Speaker* [85]

--------------------------------------------------------------------------------

I hope you saved the best question for last.

--------------------------------------------------------------------------------

Unknown Speaker* [86]

--------------------------------------------------------------------------------

[Laughter]

--------------------------------------------------------------------------------

Unknown Speaker* [87]

--------------------------------------------------------------------------------

I know on the phase 2, you have said the corporate strategy was to partner that asset and I know you can talk about any kind of negotiations, but did you just give a context whether there's a fair amount of interest in terms of the inbound interest in that asset or do you think you will reach your strategic goal of partnering that asset successfully?

--------------------------------------------------------------------------------

Unknown Speaker* [88]

--------------------------------------------------------------------------------

There's -- there's some interest.

I would not call it a great -- I think diabetes is very complex.

And we do have a good-looking drug.

And -- and what were targeting, it is in stage diabetes, so that requires an interest in filling that niche.

I think we will get [Indiscernible] partnered an appropriate way.

I think I just leave it there.

--------------------------------------------------------------------------------

Unknown Speaker* [89]

--------------------------------------------------------------------------------

I do have another question about the mechanisms that your increasing protein production through the messenger RNA.

Could you give us a little color as to your efforts in terms of the disease indications you might be pursuing earlier -- early in terms of using the as a way of increasing protein production?

--------------------------------------------------------------------------------

Unknown Speaker* [90]

--------------------------------------------------------------------------------

We're -- we're actually looking at the opportunity to increase protein production in several of our programs including an aerosol program or to. We are seeing encouraging information and I hope, before the end of the year, will be able to tell you about more specifics about what diseases we're proceeding toward.

But generally we continue to be very encouraged very excited about what we're seeing.

--------------------------------------------------------------------------------

Unknown Speaker* [91]

--------------------------------------------------------------------------------

Thank you and congratulations on all your success this past year and the start of 2017.

--------------------------------------------------------------------------------

Unknown Speaker* [92]

--------------------------------------------------------------------------------

Thanks Doug.

By far the best way to end the call.

--------------------------------------------------------------------------------

Unknown Speaker* [93]

--------------------------------------------------------------------------------

[Laughter]

--------------------------------------------------------------------------------

Unknown Speaker* [94]

--------------------------------------------------------------------------------

So just to close.

Our goal has been to revolutionize medicine and save lives as we perfect Anderson's technology.

We think we are doing that with SPINRAZA and we think that's just the beginning of what we do comps.

We expect to accomplish this while being breakeven or profitable of the operating line on a pro forma basis and increasing our cash this year.

And as Beth said, we think 2017 is the pivotal year in which we move towards sustainable profitability at the operating and it debt line.

We look forward to telling you more about our accomplishments throughout the year.

Thanks so much.

--------------------------------------------------------------------------------

Unknown Speaker* [95]

--------------------------------------------------------------------------------

The conference has now concluded.

Thank you for attending today's presentation.

You may now disconnect.

--------------------------------------------------------------------------------

Unknown Speaker* [96]

--------------------------------------------------------------------------------

[ Event Concluded ]

--------------------------------------------------------------------------------

Unknown Speaker* [97]

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Unknown Speaker* [98]

--------------------------------------------------------------------------------