Good morning, and welcome to Ionis Pharmaceuticals Fourth Quarter and Full Year 2022 Financial Results Conference Call. [Operator Instructions]. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Wade Walke, Senior Vice President of Investor Relations, to lead off the call. Please begin, sir.

Thank you, [Vishnari], Navin. Before we begin, I encourage everyone to go to the Investors section of the Ionis website to view the press release and related financial tables we will be discussing today, including a reconciliation of GAAP to non-GAAP financials. We believe non-GAAP financial results better represent the economics of our business and how we manage our business. We've also posted slides to our website that accompany today's call. With me this morning are Brett Monia, our Chief Executive Officer; Eugene Schneider, Chief Clinical Development Officer; Onaiza Cadoret, Chief Global Product Strategy and Operations Officer; and Beth Hougen, our Chief Financial Officer; and Eric Swayze, our Executive Vice President of Research, will join us for the Q&A portion of the call. I would like to draw your attention to Slide 3, which contains our forward-looking statement. During this call, we will be making forward-looking language statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors contained in our SEC filings for additional detail. With that, I'll turn the call over to Brett.

Thanks, Wade. Good morning, everybody, and thanks for joining us today. As we begin this year, we are building on the significant momentum from the key successes we achieved in 2022, highlighted by our progress in advancing our 3 near-term commercial opportunities towards the market. With eplontersen, we delivered positive data from the 35-week interim analysis, which formed the basis for our NDA submission in December. With olezarsen, we completed enrollment in the Phase III BALANCE study for FCS putting us on track for data in the second half of this year. The FDA recently granted Fast Track designation for olezarsen for FCS underscoring the significant unmet medical need for these patients. We also advanced and expanded our clinical program supporting olezarsen for the broader SHTG indication. And with donidalorsen, we delivered multiple positive data readouts, all further strengthening our belief in this medicine's potential best-in-class profile for the prophylactic treatment of HAE. And we're pleased to report that the Phase III study of donidalorsen continues to progress well, keeping us on track to complete enrollment this year. We've also made excellent progress in building our commercial organization. As a result, we are well positioned to successfully launch these medicines beginning with co-commercializing eplontersen with AstraZeneca. We're also on track for our first independent launches of olezarsen and donidalorsen. Beyond our 3 near-term commercial opportunities, our partner pipeline also continues to make great progress. Tofersen which is partnered with Biogen is under review in the U.S. and EU, positioning it to be added to our commercial portfolio this year. And our rich late-stage pipeline recently grew this year when GSK initiated Phase III development for epiraversen for HBV. Further, we expect our late-stage pipeline to grow even more later this year when Roche advances IONIS-FB-LRx into Phase III development in…

Thank you, Brett. Our pipeline continues to perform very well. Last year was highlighted by many positive data readouts, and we expect the same to continue this year. Over the next few minutes, I will review our recent achievements and preview our key upcoming data and regulatory events. The recent NDA submission for eplontersen was based on positive data from the Phase III interim analysis. We're planning to share 35 and week 66-week data in the first half of this year. Importantly, we're also looking forward to the potential approval of eplontersen in the U.S. for ATTR polyneuropathy late this year. We and AstraZeneca are also planning to file additional regulatory submissions outside of the U.S. later this year. We're also pleased for the continued progress of CARDIO-TTRansform study. By conducting the most comprehensive study in patients with ATTR cardiomyopathy to date, we expect to deliver a rich data set for this broad patient population. We believe these data will be a key differentiator, positioning us to successfully compete and lead in this growing, dynamic and global market. We expect to complete enrollment this year, keeping us on track for data in the first half of 2025. Our broad olezarsen development program targeting 2 different but related indications is also progressing very nicely. Both FCS and SHTG patients have severely elevated triglycerides, which can lead to fatal pancreatitis and atherosclerosis. Phase III BALANCE FCS study is fully enrolled, and we expect it to read out in the second half of this year. And our broad Phase III program designed to support the SHTG indication is also continuing to progress well, with data expected next year. With first mover advantage in both indications, we remain confident in the potential for olezarsen to be a substantial driver of future growth for Ionis.…

Thank you, Eugene. We have made tremendous progress in building our commercial organization, hiring top talent and integrating commercialization processes into the fabric of Ionis. Today, we are finalizing preparations for each of our near-term products, starting first with our launch of eplontersen, and we are right where we should be in preparing for our first independent launches of olezarsen and donidalorsen. One of my first priorities at Ionis is building a strong global product strategy and portfolio planning team. Since 2020, this team has integrated new product planning, global market access and health economics and outcomes research into Ionis' R&D operations. Together with R&D, this team is helping to drive pipeline prioritization, indication strategy, development and commercial planning and other key strategic decisions. My next priority was to add medical affairs to our organization. This team is focused on data dissemination, disease education as well as collecting and integrating customer insights into our product plans. And for the last 2 years, our field medical team has been engaging with thought leaders and educating HCPs on ATTR elevated triglyceride diseases and more recently, hereditary anted. Last year, we began building the in-line commercial team to prepare for the launches of eplontersen, olezarsen and donidalorsen. These teams include market access and reimbursement, in-line marketing, commercial operations, patient services and omnichannel engagement. And as our launch windows approach, we plan to add our customer-facing teams. Now I would like to spend a few minutes on each product starting first with eplontersen. Currently, there are an estimated 40,000 addressable patients with ATTR polyneuropathy worldwide. However, less than 20% of those patients are currently receiving approved treatments. With our deep expertise in ATTR, together with AstraZeneca's global scale, we are confident in our ability to capture a significant portion of these patients around the…

Thank you, Onaiza. This morning, I'll provide a summary of our fourth quarter and full year results for 2022 and then review our 2023 guidance. I am pleased to report that we earned revenues of $152 million and $587 million for the fourth quarter and full year, respectively. We earned revenue from numerous diverse sources with just over half from our commercial products, and the balance from numerous partnered programs. Our operating expenses for the activities and our pipeline, especially our late-stage programs. And our 2022 non-GAAP net loss was $311 million. Additionally, we ended the year with cash and investments of $2 billion, which we further added to in January with the $500 million we received from our royalty monetization transaction. SPINRAZA performed well in 2022, demonstrating its resilience and long-term growth opportunity, both in the United States and internationally. SPINRAZA global sales increased 6% in the fourth quarter compared to the third quarter, and also increased 4% compared to the fourth quarter of 2021. The increases were driven by stabilization in the U.S. and growth in Asian markets, partially offset by competition in Europe. Importantly, U.S. SPINRAZA sales increased in the fourth quarter and the full year compared to the same period in 2021. This positive trend was particularly meaningful, especially when considering competitor results. Biogen is continuing to expand into new markets, and is also concentrating on expanding in existing markets. Within existing markets, Biogen is particularly focused on the growing adult SMA population, which has limited treatment options. Additionally, Biogen continues to generate important efficacy data as part of its robust life cycle management program. Based on these efforts, and SPINRAZA's strong efficacy and safety profile, we and Biogen believe SPINRAZA can return to growth. We earned R&D revenue of $72 million in the fourth quarter…

Thank you, Beth. Looking ahead, we expect the strong momentum at Ionis to continue with several key regulatory and late-stage events coming up this year. We're excited about the work already underway and the progress we've made to advance our following key priorities. We are well positioned to deliver an abundance of new genetic medicines to the market with the potential to add 2 new products to our commercial portfolio this year with a steady cadence of additional products to come in the near and in the longer term. Our integrated commercial organization is on track to successfully co-commercialize eplontersen and independently launched olezarsen and donidalorsen. We're leveraging our recent technological advancements for medicines in development today. Additionally, our collaboration with Metagenomic positions us to expand our technological capabilities for future drugs as well. And finally, we substantially strengthened our financial foundations for our pipeline and commercial plans, all of which we believe will drive increasing value. We're looking forward to a great year at Ionis and sharing our progress along the way. Before closing, I want to mention Rare Disease Day, which is Tuesday, February 28, a day, where we recognize all the patients and families living and struggling with rare diseases. With that, I'll now open the call for questions. Operator?

[Operator Instructions] The first question comes from Yanan Zhu with Wells Fargo Securities.

Congrats on the progress. We have mainly a couple -- 2 questions for the TTR program. First, the NDA for planters in polyneuropathy. I think you submitted the NDA in December. Just curious how that process going with FDA. And when can we expect the announcement of NDA acceptance if you plan to announce that? And are you expecting a priority review or AdCom meeting associated with the NDA acceptance?

Thanks, Yanan. We're very much looking forward to the completion of the NDA process with the FDA. As you said, we submitted the NDA in December. We've now cleared the standard 60-day review period with the FDA, and we're just waiting on the official notification from the FDA, the day 74 letter, if you will. In that letter, details we provided on PDUFA date. For example, whether there'll be a standard or an accelerated review, we expect to your question of standard review for eplontersen and polyneuropathy, and whether or not they would want an outcome. We don't expect an outcome. The process has gone very smoothly with the FDA. There's been no concerns whatsoever. So it's really just we're waiting for the final notification, the official notification from the FDA, and we will announce that with all the details that we get in that notification at that time. So that will be coming up pretty soon.

That's great to hear. And if I may ask a question also on eplontersen but on the CARDIO-TTRansform study, are you -- do you still expect to complete enrollment for the study in the first half? And I think following the modification of study size and enrollment strategy, are you getting the desired result in terms of the balance of various patient subtypes? And how does the -- what's your expected rate of on tafamidis versus naive patients from this enrollment strategy? And how does the cardiovascular event rate trend on a blended basis, of course?

Thanks, Yanan. We're expecting to complete enrollment around midyear this year. Enrollment is going very well. As you know, we upside the study to ensure for the most robust and successful outcome in the outcome trial possible. And we upside the study to achieve 3 objectives. The first objective was to ensure that we have strong powering for the study to have the successful study and the most robust outcome in this study based on the fact that patients with TTR cardiomyopathy are being diagnosed much earlier under disease. And therefore, patients are generally more mild when they are diagnosed with the disease. Second was to ensure that we have a good balance, a relatively equal balance between naive patients and tafamidis patients. And thirdly, to help ensure that we have the preferred percentage of patients that are hereditary, hereditary TTR amolpdosis with cardiomyopathy. And I'm very pleased to say that not only are we on track to complete enrollment as planned around midyear this year, that we're achieving so far all of our objectives. We're seeing a significant uptick in blinded event rates in the study as we expected when we upsized the study. We're seeing a really nice balancing of naive versus tafamidis usage in the study as we had planned to have. And we're also seeing a very nice uptick in the percentage of patients with hereditary TTR amyloidosis with cardiomyopathy. So everything is progressing very well in the study, and we're very much looking forward to the data readout on track in 2025.

The next question comes from Luca Issi with RBC.

The progress have 3 quick one. Maybe the first on TTR cardiopathy. Wondering if you can comment on your reaction yesterday from the news that Anal will have an advisory community meeting, and how you're thinking about implications for your program? The second one is AGT. What's the latest on that molecule? Are you still planning to invest in both the first gen and the second gen or at some point, you're going to pivot to the second gen? And maybe more broadly, what's the latest on BD for AGT. And maybe last one on HAE. I think at American College last year, 3 of the 8 patients that were dosed every 8 weeks -- sorry, every 2 months, QAW switch back to monthly. However, I think in the abstract at Quad AI, it's 2 out of 8 that actually switched back to monthly. So from 3 to 8 to 2% to 8%. So wondering what happened there.

Sure, Luca. So I prefer not to comment very significantly on competitor products and outcomes by the FDA. What I could say is that in hindsight, not try surprised, the results were a little complicated. 6-minute walk test, the magnitude of benefit, the benefit in patients on tafamidis versus naive patients is pretty complicated. So not terribly surprised that the FDA is going to want to get input publicly -- from experts in the field. We welcome it because it gives us more information. We have very strong relationships with all the key KOLs and investigators around the world. disease, but we're always welcome to hear more. And I think it can help us set us up for a better, more successful cardiomyopathy outcomes trial. Regarding ATT, we're still planning to present data on the 2 molecules in the second half of this year. the hypertension study is wrapping up, and we're planning to start a heart failure study for the second molecule, the Gen 2.5 molecule in the second half of this year. We won't wait for that study. We'll share the data from the 2 molecules in hypertension of the first molecule in heart failure by the end of the year. And as far as business development activities, we're kind of on pause because we want to generate all the data for those 3 studies before we start responding to inbounds, and there's been certainly interest in the program. Regarding HAE, the correct number of patients that were attack-free in the bimonthly is correct in the Quad AI presentation, 6 of 8 patients. The previous data that was presented last year was 58 patients. That was really just a timing effect when you make the cutoff. 1-year treatment, 6 of 8 patients were attack free in the bimonthly whereas the timing for that included the 5 patients that was presented last year was just beyond one year. So it's just a technical thing. If anything, it favors the efficacy and bimonthly for donidalorsen. And with that said, it's really a monthly dosing that we really are very excited about by month that gives you an option for dosing, but monthly dosing really is one of several key advantages for donidalorsen versus competition. The convenience of monthly self-administration, excellent tolerability, fast onset of action and the unprecedented efficacy with 95% mean reductions in HAE attacks for now for a year of treatment.

The next question comes from Gary Nachman with BMO Capital Markets.

First, a few more on eplontersen. So what do you plan to do with the 66-week data when that's available, talk about the timing of filings ex U.S.? And does that impact the PN filing in the U.S. at all? Or is that completely separate? And then if you have the PDUFA late this year for PN, how soon would you and AZ be able to launch the product? And then on cardiomyopathy, what's the likelihood that you might have early readouts for that data? And then I have a follow-up for Beth.

Okay. So maybe I'll ask Onaiza after I touch on 2 of your other questions to talk a little bit about launch planning for planters in PN. The week 66 data we're planning to present in the first half of this year at a medical meeting. Of course, we'll put out top line results ahead of that as soon as we have it. We're very much looking forward to that. That data will be very important for ex U.S. filings for potential approval for eplontersen, and that is the plan is to file -- I have additional filings for approvals outside the U.S. with week 66 data as a key component of those filings. We don't see any meaningful impact of the week 66 data for the NDA that's currently under review by the FDA based on the week 35 data. We don't plan on submitting a supplemental NDA with that data at this time. The data that -- the week 35 data, we believe, is very more than sufficient to get the outcome that we desire by the FDA for eplontersen in polyneuropathy, doesn't rule out the possibility of a future supplemental NDA after approval. That will be data driven. Regarding the cardiomyopathy early readout, we will continue to monitor any changes in the landscape -- the competitive landscape that could influence a decision by Ionis, AstraZeneca to read the study out earlier. We also will be focused on blinded event rates and patient demographics that will -- all that will be driven -- will be factored in to a decision to potentially read the study out early. We do have several -- we do have the option to read the study out early based on a review of all of that. Onaiza, maybe you could talk a little bit about the late year PDUFA date that we're anticipating and then plans for launching eplontersen?

Yes. Gary, we're preparing for success for the PN launch. So there are a lot of pre-commercial investments that are already being made for the U.S. We have, as you know, a field medical team that's been in place over 2 years, really ensuring that there's enough disease education out there over the last 2 years. We plan and have already actually hired out our field directors for the nurse educator team. And then as we look to the second half of the year and we hear back on the 74-day filing, Astra will start building out the sales capabilities. So basically, we are going to be very ready to go upon approval and not have a lot of time between approval and launch as well.

Okay. Great. Very helpful. And then for Beth, just the greater than $575 million revenue guidance. You talked about some of the key factors directionally. So will the overall mix and quarterly cadence be similar to 2022? And then how will you be reporting the Royalty Pharma agreement? How is that factored in the guidance? And then can you still hit the guidance if tofersen or eplontersen are delayed into next year at all.

Great question. So first, in terms of the mix and the cadence on a quarterly -- from a quarterly basis, I would say, anticipate that 2023 will look very similar to 2022. I anticipate the mix of commercial and R&D revenue to be very similar. I expect it will be likely back-end loaded. And then in terms of, can we hit this guidance even if tofersen approvals or eplontersen approvals are delayed into next year. I think it's important to remember, as I think I've mentioned, we have consistently probablized our R&D revenue items. And we typically probabilize based on when in the year an event might occur. So lower probabilities for those items that would likely fall late in the year. And so that gives us a lot of that combined with the fact that we have just a really robust pipeline of partnered programs that generate milestones on a very consistent basis gives us a lot of flexibility if certain items are delayed slightly. So I'm comfortable that our guidance is achievable. And let's see, did I miss any of your questions? I think I got them.

Yes. Now the lesson was the Royalty Pharma agreement. So just how that's factored into the guidance. Yes.

Yes. Thank you for reminding me. The SPINRAZA royalties under our royalty pharma agreement will continue to be booked into our top line revenue. So 100% of the royalties from SPINRAZA will continue to be booked on our top line revenue. And then the cash payments to Royalty Pharma will really be a balance sheet item for the company. I'll have more details when we get to our Q1 earnings because at that point, we'll have finalized all of the more detailed accounting with our auditors. But I think it's a great point to make that SPINRAZA royalties will all hit our top line revenue as they always have.

The next question comes from Jessica Fye with JP Morgan.

Thinking ahead to the acoramadis data later this year, what are you going to be most focused on when those results read out? And second, can you remind me where you are with simdulersen for acromegaly and when we could expect the next update?

Well, for -- thanks, Jess. For agramdus, we're looking for the outcome data and what that's going to look like. I mean, Eugene, maybe you should comment on this.

No, absolutely. That's what everyone is waiting to see is how the functional benefits translate into hard outcome data, and that's what it's due soon, and we're all obviously going to be focused on also similarities of the population enrolled in that study and the CARDIO-TTRansform study. So that's probably the second most important aspect is to see how representative of the population that they've enrolled is to what we're seeing today --

In our study.

In our study. Yes.

So patient demographics will be very interesting in addition to, of course, the main endpoints, the primary endpoints Jess, on the acromegaly, the monotherapy study is continuing ramping up. We're planning to share data hopefully at a medical meeting, but we'll get it out in the second half of this year for the monotherapy data. As you know, we presented data in patients that are poorly controlled on somatostatin analogs last year. So we'll have the monotherapy data in the second half of this year. And with that, next steps.

The next question comes from Myles Minter with William Blair.

Just on Biogen's claims that SPINRAZA is going to return to growth, and they're citing the only 20% of adults, presumably type 3 patients are actually treated with disease-modifying therapy. What's the sort of cadence, I guess, of return to growth that we can sort of expect? It doesn't seem that it's going to happen this year. And it seems as if for the SPINRAZA franchise that you really like to back this up with clinical data. And I think the type 3 patients, particularly the adult is probably where there's a lack of SPINRAZA efficacy data. So can we expand some expect some clinical studies to be launched by Biogen to support that thesis.

Beth, on the return metrics, the return to growth?

Sure, absolutely. So thanks for the question, Myles. I think you're already starting to see what we had really anticipated that this return to growth is starting in the United States with stabilization and even really a little bit of increase year-over-year and quarter-over-quarter Q3, Q4. And that's what you would expect because that was the first launch for both SPINRAZA as well as for the competitor products. We would anticipate that, that will continue to -- we'd see those same dynamics across other geographies, similar to the cadence of the various launches across various geographies. So that would be our anticipation of the cadence. And I think it's really important to focus on the fact that the teens and adults are where SPINRAZA has already a very strong efficacy and safety profile, but it's particularly strong in those teens and adults. And it's particularly in comparison to the competitor products, which really don't adequately address those patients or in fact, in the case of Zolgensma isn't really even approved for those older patients, right? So you would expect that's a great place for SPINRAZA to see growth. And in fact, that's the largest prevalent population. There's about 60% of the prevalent population is made up of these teens and adults. So it gives tremendous opportunity for growth, not only in the U.S. but in other markets across the world. Biogen is particularly focused on expanding in Asia as well as in other geographies around the world, Latin America, Eastern Europe, some other geographies as well. So I think all of those things are going to be factors in SPINRAZA's return to growth.

And the post-marketing studies, Myles, the other part of your question, we think will only contribute to and further enhance the potential to run to significant growth for SPINRAZA. And those studies are going really well. Two studies are examining higher doses of SPINRAZA, the DEVOTE study, some of that data -- some data was shared last year. Looking at higher doses of SPINRAZA has showed even greater efficacy in SMA patients. The ASCEND study in patients that their disease progresses on risdi. We're also -- big is also looking at a higher dose in those patients to show that patients will do better and will benefit. And then the RESPONSE study, looking at the commercial dose of SPINRAZA today in patients that -- whose disease progresses that are on gene therapy is also going well. Biogen hasn't laid out timing or expectations on timing to share data, but the study is going well, and the purpose of those studies is to further enhance the market performance for SPINRAZA. And so far, everything is going on track.

And just a quick follow-up for Beth. How much of the OpEx guidance is factored into building the new manufacturing facility for this year versus just underlying R&D costs for the business?

Sorry, Myles, I didn't hear that. You cut out.

How much of the current OpEx guidance is accounting for the new manufacturing facility that you're building versus the underlying R&D of the business?

So none of the OpEx guidance includes any costs associated with the new manufacturing facility. That's all balance sheet at this point. It's using some of our cash as we construct the facility, and we'll be building the costs associated with that asset over the course of the construction period and then we'll begin amortizing those costs in the sort of '26 time frame once the building is online and operational. And at that point, you'll start to see some of those expenses from the amortization flow into our OpEx.

The next question comes from Mike Ulz with Morgan Stanley.

Just one for me on perverse in HBV. You highlighted your partner, GSK, recently started the Phase III study. Just curious how the recent J&J decision to deprioritize their HBV program might impact your thinking on potentially the opportunity here or maybe your go-forward strategy?

Eric, do you want to take a stab at that?

Yes, sure. It really doesn't impact our program -- GSK's program at all. We're very pleased that GSK is nicely enthusiastic about this program and started their Phase III program. Again, the perverse in the B CLEAR study in the Phase II data did things that the other drugs are competitive RNAs for lowering s antigen if not done, which has caused the loss of S antigen that are sustained for a long period of time. And that's the reason GSK is taking it forward. So we're very enthusiastic about our program and really don't see any read-through from other programs at all?

Yes. Michael, I think in short, the competition from the J&J drug was kind of discounted already because we have seen, as Eric said, greater efficacy in Phase IIb -- for BPIRAVersen this just helps clarify that situation. So if anything, it clarifies the competitive landscape for Bearers and it just further enhances it.

The next question comes from Paul Matteis with Stifel.

This is James on for Paul. Just a quick one on Angelman's. I guess what's the latest thinking on when we may see that data? And again, how are you thinking about whether or not this trial suited to get a sense on efficacy? And then maybe just quickly, taking a step back from a strategic perspective, as you look at all of your nonpartnered assets, how are you thinking about the balance of potentially monetizing them versus launching them and pursuing them independently? And from a BD perspective, thinking about other technologies in light of the Metagenomic partnership or so.

Sure, James. There was a lot there, especially in the second part of your question, we can talk about, but I'll try to be brief. So Angelman will be brief because we don't have anything more to report at this time, except that we feel very good. We feel very confident in the execution of the study. It's going very well. Biogen has not laid out a time line for data dissemination from the Phase I/II study. We are working through the potential efficacy endpoints that would support a Phase III study now. We are making great progress with regulators as to what would constitute a clinically meaningful benefit end point for patients with Angelman syndrome for a potential Phase III start. I have to leave it at that right now. Hopefully, Biogen will provide an update later this year. But we're very -- feeling very good about the Angelman study. With respect to monetization, what we partner, what we keep and so forth, I'll take a stab with that maybe then Onaiza could chip in a little bit, too. So today, we have a wealth of assets that are in front of us for Ionis from our R&D organization. We focus on the late-stage pipeline. We have a really rich mid-stage pipeline as well as a lot of new drugs coming into development right now. And we are very carefully deciding on as we did recently with eplontersen, olezarsen and donidalorsen which of those assets make sense for Ionis to keep and to bring to the market ourselves. And we're looking forward versus those that we think will be -- will do better, will be better off with a potential partner down the road. We're looking forward to providing an update on what I referred to as the next wave of Ionis commercial opportunities in the second half of this year beyond eplontersen, olezarsen and donidalorsen. Right now, we're laser-focused on launching those drugs. As far as monetization goes, I think you asked, we're not planning -- there are no plans to do any royalty work at the royalty monetization like we did for pelacarsen in SPINRAZA earlier this year Royalty pharma. But do you want to talk a little bit about prioritization and how we go through that.

Yes, sure. I think you covered mist of it, maybe I think I'll give you a lens into the second half of the year. as we focused on these 3 near-term commercial opportunities, we're also looking from a line of sight as to what comes next in the mid-stage pipeline. And we look at a lot of factors. I think Brett mentioned a couple. We have in the time frame within which they would be on market, can we maximize the full potential of the product. If we can, then does that actually fit with some of the kind of customer-facing synergies that we see. And if they don't, can we actually do it in a very efficient way. So that's probably a bit of our schematic over here in terms of criteria to make those selections. We see a really nice cadence of products coming in from the neurology franchise. So it's very exciting. There's a really nice team that works on early to mid-stage neurology here. So you'll hear more about that in the second half of the year. And then we also have some things that can move into our specialty franchise, just like we have done in donidalorsen in specialty. We do have a couple of other specialty products such as sealers for polycythemia vera. So we're looking forward to seeing some of the -- the data there, which is encouraging at this point in time. So that's kind of our way to kind of market in the near term and in the midterm. And then we work very closely with R&D, as I said, integrating kind of our early-stage pipeline as well to understand kind of what indication strategy look like and how we want to think about going to market with that for ourselves and where we think there's more benefit for partners to actually again, realize the full potential of the product.

Thanks, Onaiza.

The next question comes from Yale Jen with Laidlaw & Co.

In terms of the Factor B, I know Roche is advancing the study into a Phase III study this half. And I'm curious whether there's also geographic atrophy indication, whether -- how would the company think giving that there is one product is recently approved and the other one is a late clinical stage right now.

Both programs -- thank you, Yale, for the question. Both programs are going very well. Maybe Eugene will want to add to this. But the IgA nephropathy, there's really nothing new to report there, except that the news we reported late last year and early this year that Roche still plans on initiating the Phase I study Igneproperty is on track. That's a rare indication. And then for geographic atrophy, it's going really well, right?

Yes, the enrollment certainly has picked up those pandemic, and we're very pleased with how the study is progressing. So it is a large study, 1 of the largest Phase II studies we've conducted recently. So we're quite optimistic and also Roche obviously is very interested and keen to make a decision on the next steps for that particular program.

The Phase II GA study is designed to set up a potential Phase III study based on the almost -- the acute study. And if your question was asking about how Roche is going to handle a rare indication versus a broad indication? That's a question for Roche. I can't answer that one for you, sorry.

And maybe one more question, come from investors. In terms of eplontersen in ATTR-CM, you guys already upside the trial study. It seems like that if you have the data later on, you may not do that, but just curious whether there's still options to change upsize the study if you feel that could be needed in the future?

We don't expect to upsize the study. We think we're right where we need to be, Yale. the study is on -- we have the CARDIO-TTRansform label extension study is well underway. We have patients now they've mentioned the OLE. All of this is why the timing for the decision we made last year to upsize the study when we did was so important. And as I said in my opening -- I think my first question I had -- everything is going according to plan with respect to blinded event rates, balance of tafamidis versus naive and enhancing the number of patients with hereditary TTR cardiomyopathy. So there are no plans to further upsize the study. We're approaching the finish line.

Okay. Great. And congrats for all the progresses.

The next question comes from Joseph Stringer with Needham & Company.

Just a quick one from us on the broad pipeline prioritization here, just given the company's pipeline breadth, do you consider the current pipeline size and R&D spend is sort of rightsized at this time? And is this an evolving outlook as you go forward?

Thanks, Joey. Since I moved into the CEO role, one of my key objectives as well as my team here has been to really focus organization on what is going to bring the greatest value to the company. That has been really important is if you think about it, prior to our evolution to full integration, we partnered all of our programs. So prioritization and focus was less important. It's vastly more important as we make investments to bring products through Phase III into the market ourselves. So although I cannot say whether or not the size of our pipeline today will be the same size 5 years from now. What I can tell you is that we will focus the pipeline as we have done over the last couple of years when we announced and we said we're moving away from indications like oncology for example, which we moved away from because we don't think that that's the best use of our resources. And we'll continue to do that. I don't know what that magical number will be that size, but we are focusing and prioritizing. And I wouldn't be surprised if the pipeline was proactively reduced in size based on a number of drugs and maybe even for those drugs, we will expand the indications as an example, to really maximize the value of each asset. Do you want to add anything to that, Onaiza.

Just again, I think I spoke about this briefly in the last question. I do -- I think to emphasize some of Brent's vision and how we're putting it into a process to give you a little bit more color is that we took on a more rigorous approach to prioritization last year, and it's continuing this year as well. And what I really like about the processes that included really a large portion of the Ionis team from research development and commercialization, manufacturing talks all the way through to really think through not just the quantitative aspects of each of our programs, but also strategically and qualitatively, what's most important to bring forward and how do we bring it forward. So we have some really nice ways to think about what we want to keep all the way to market. We also have some really good distinctions on where we think some programs will again belong with partners and realize their full potential. So stay tuned. We continue to kind of bring in the focus that Brett talked about, and you'll see more of it in our pipeline.

And Joe, you had another part to that question, which I forget.

No, that was it.

The next question comes from Yaron Werber with Cowen.

Great. Brett, I just got 2. The first one is just maybe just to follow up on the Factor B question. The I believe you guys ran a study that was started in 2018, 120 patients, obviously smaller than the current study, which is 330. That started and then I think that study was terminated. Just give us a sense kind of what happened there. I think the primary endpoint was also different. That was a factor B levels, whereas in the current study is obviously looking at change in GA? And then second, just your thoughts in the nuts preliminary on the IRA. Eplontersen potentially will have 2 indications in the future, hopefully, what does that mean from a negotiation standpoint or can you ultimately get a broad TTR label? A –Brett Monia: Thank you, Yaron. So for Factor B, and Eugene, you can chime in. There has been those studies that have been terminated that didn’t conclude to their natural – comes to their natural conclusion, the design conclusion of the study. We did a Phase I study – maybe that’s what you’re referring to, that can Phase I. We have a single dose and the multiple 2 Phase I is a single dose and multiple dose as your standard to measure safety as well as pharmacodynamic activity reductions in Factor B, that’s what set us up for the current geographic atrophy Phase II study, which, as Eugene said earlier, nrolment has really picked up and is going very well. I’m not sure I can say much about it. There have been no study terminations that were not planned for the Factor B programs either in GA or IgA nephropathy. The program is going really well. Onaiza, do you want to talk a little bit about IRA?

Yes. So as you know, we’ve kind of been looking at the implications of the IRA for our portfolio. For eplontersen specifically, as you know, there’s an orphan direct designation exclusion for single disease orphan drugs. And for eplontersen, both indications of PN and CM qualify as a single disease. And that is because of the way we got the ODD exemptions. Our orphan drug designation is for ATTR, not necessarily for one indication and the other. So you should think that through as you’re thinking about that, and we would then be excluded from that maximum fair price negotiation as well. The other thing to keep in mind is this is a really good thing for patients. In a way, we took away the disadvantage for patients for out-of-pocket costs under Medicare Part D – so the so-called donut hole catastrophic care really kind of goes away, and we do believe that really allows patients to kind of make the right choice for their product, and not leave it up to kind of cost between a Medicare Part D or a Medicare Part B benefit as well. So we think both of those are playing really well for eplontersen as we look into the IRA implications.

The next question comes from Gena Wang with Barclays.

Just a few very quick ones. First, I wanted to confirm that the voters milestone will be reported as part of the R&D revenue. Second, regarding the manufacturing facility construction, what is the asking cost facility? And then lastly, quickly regarding the CARDIO-TTRansform. I remember you mentioned in the past that you'll go in patient teams. Can you remind us a percentage of patient hereditary patients? What is the goal regarding the percentage of patients in the final?

So Gena, you were breaking up a little bit, but I think I got your questions. Thanks for the questions. Beth, do you want to take the punters milestone and the manufacturing facility?

Sure. Absolutely. Yes. Thanks for the question, Gena. So eplontersen approval milestone will be reported as an R&D revenue item. And on the manufacturing facility cost we're anticipating that will be about $350 million. We are already well along in the construction process with design, programming, engineering, architectural efforts underway. And so you should anticipate that cost to be spread out over the next several years. We expect to be manufacturing API in that facility and up and running in late '25, mid-'26 time frame.

And then for CARDIO-TTRansform, I'll ask Eugene to comment on what our targets are goals for hereditary, but for the tafamidis, again, you broke up a little bit, but our goal, as I think I stated earlier, is to get a relatively equal balance between naive patients and tafamidis patients. And right now, the upsizing of the study is delivering exactly that. We're well on our way. Hereditary?

Yes. hereditary, of course, is what we're trying to target is we have the ATTRACT study of tafamidis as a sort of a guidepost. It's -- remember, it was done at a different time with different diagnostic options and attention to this disease. So just because they've enrolled roughly 25% of hereditary patients as a percentage of total population. That's kind of the guidepost. It's going to be difficult to achieve that, but we're -- that's what we're targeting somewhere in the 20%, 25% range.

Thank you, Gena. Maybe we have time for one last question.

And the last question comes from Do Kim with Piper Sandler.

I'll keep it to one. I just want to SP550450295 Follow-up on the royalty pharma agreement and how best are you going to recognize the upfront payment? And if any of that is factored into the revenue guidance for this year?

Sure. So the $500 million payment we received in January is essentially increasing our cash. So you'll see that in our Q1 cash balance there'll be an offsetting liability for the payments we need to make to Royalty Pharma. And 100% of our SPINRAZA royalties will continue to be booked to the top line in revenue. So it's already factored into our revenue guidance. Again, assuming a similar split of commercial and R&D revenues really reflects that 100% of the SPINRAZA royalties on the top line revenue. And we'll give some more detail at Q1 once we complete the detailed accounting treatment with our auditors.

Thank you, Do. Thanks, everybody. Thanks for joining us on today's call and for participating. We're really looking ahead to a very successful 2023. We plan to continue our positive momentum and delivering on our key commercial pipeline and technology objectives for the year, and we look forward to providing updates to all of you as we make progress throughout the year. So until then, thanks very much for participating, and have a great day.

Good bye. This concludes our conference. Thank you for attending today's presentation. You may all now disconnect.