Operator
Operator
Welcome to Isis Pharmaceuticals First Quarter Financial Results Conference Call. Leading the call today from Isis is Dr. Stan Crooke, Isis’ Chairman and CEO. Dr. Crooke, please begin. Stan Crooke – Chairman and Chief Executive Officer: Good afternoon and thanks everyone for joining us on today’s conference call to discuss our first quarter financial results. Lynne will discuss our financials and then after that I’ll give you a brief update on how we’re tracking against our key goals for 2011. Joining us on the call today are Lynne Parshall, Chief Operating Officer and CFO; Beth Hougen, Vice President of Finance; and Kristina Lemonidis, Director of Corporate Communications. Kris, can you read our forward-looking language statement please? Kristina Lemonidis – Director, Corporate Communications: Sure, Stan. Good afternoon, everyone. A reminder to everyone, this webcast includes forward-looking statements regarding Isis’ business and financial outlook for Isis and the therapeutic and commercial potential of Isis’ technologies and products in development. Any statement describing Isis’ goals, expectations, financials or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. Isis’ forward-looking statements also involve assumptions that if never materialize or proved correct could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although, Isis’ forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Isis. And as a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Isis’ programs are described in additional detail in Isis’ Annual Report on Form 10-K for the year ended December 31, 2010 which is on file with the SEC. Copies of these and other documents are available from the company. And with that, I’ll turn the call over to Lynne. Lynne Parshall – Chief Operating Officer and Chief Financial Officer: Thanks, Kris and good afternoon. The purpose of the call today is to report our financial performance for the first quarter of 2011. As usual, I am assuming that you’ve read the details for our quarterly results in our press release, so I plan to just cover the highlights. I hope that many of you were able to join us on our recent pipeline call where we highlighted several of our drugs beyond mipomersen that recently achieved milestones. We anticipate having more of this type of call to discuss in detail the incidents in the programs in our pipeline. Today’s call will focus primarily on our financial results. We’re right on track to meet our guidance for 2011. We ended the first quarter with nearly $427 million in cash and a pro forma net operating loss of $13.4 million. As we expected, these results reflect a decrease in revenue and an increase in expenses compared to the same period last year, but are relying with the trend we’ve reported over the course of last year. I want to spend a few minutes to review some of the factors impacting our financial performance this year and to talk about how our first quarter financials fit into the rest of the year. First of, our revenue is just what we expect it to be in the first quarter. As we look towards the rest of 2011, we have a number of opportunities for revenue in addition to the amortization of the GSK license fee which was the largest single component of new revenue this quarter compared with the first quarter last year. We’ve made significant progress in our collaboration. This momentum continues just around the quarter. We should begin the Phase I clinical trial for ISIS-TTRRX, an achievement that (indiscernible) us our second milestone from GSK. We also hope to have an additional development candidate from that collaboration to move into our pipeline this year. We’re very pleased with this innovative collaboration with GSK was chosen this week at the Deloitte, Breakthrough Alliance of the Year. And these achievements are further support for this accolade. Big milestone we expect to earn this year is the $25 million that we will earn when the FDA accepts our NDA filing for marketing approval of mipomersen. We have hampered this milestone into our 2011 financial guidance. I’m sure you saw that sanofi listed the U.S. and EU filings for mipomersen as important upcoming events for them also. Now, I’ll move on to our expenses, which as we expected were higher this quarter than in the first quarter of 2010, but lower than the fourth quarter of 2010. Our expenses are increasing principally because our pipeline is maturing and expanding. As we stated in our year end call, we are continuing to invest in our pipeline adding new drugs and advancing many of our programs in development. We’ve been highlighting advances in our pipeline calls and we’ll continue to do this in future calls this year. As our drugs mature and move into larger, longer studies and we expand our clinical programs to include more indications, the programs become more expensive. But we believe the investment in creating high quality, robust data packages for our drugs before partnering is the best investment we can make. Our revenue and expenses in the first quarter are both in line with our expectations and we are in track to meet our guidance of a pro forma NOL in the low $40 million range and cash of more than $350 million. Our guidance does not any new transaction, so any new transaction we complete would have a favorable impact. 2011 will be another busy year for us as we and Genzyme prepare for the commercial launch of mipomersen and as we continue to advance many drugs in our pipeline. So, with that I’ll turn the call back over to Stan. Stan Crooke – Chairman and Chief Executive Officer: Thanks Lynne. 2011 has been a productive year so far. But let me just spend a minute or two to discussing some of the accomplishments that we already have under our belt and then point you towards what to expect next. So far this year we started the Phase 1 study or Factor XI drug. This is an antisense drug to treat abnormal clotting or thromboembolic events. Abnormal blood clot formation is the leading cause in mobility and mortality associated with vascular diseases, including heart attacks, deep vein thrombosis and strokes. In preclinical models our Factor XI drug demonstrated potent anti-clotting activity with no increase in bleeding. That compared very favorably to standard anti-clotting agents like heparin and morphine and to the Factor 10a inhibitors, each of which causes increases in bleeding. This is a really exciting drug to us and we look forward to announcing their results form this study either later this year or early next. In our Phase 1 study with our CRP drug, we showed statistically significant reduction in CRP in normal volunteers. After only three weeks of dosing, the subjects who came into that study with elevated CRP had an average reduction of more than 70% from the baseline. The drug was well tolerated with no serious adverse events. Our Phase 2 study should start soon and in these studies, we plan to look at both the disease in which CRP is chronically elevated, rheumatoid arthritis and a situation in which CRP is elevated more acutely, autologous stem cell transplantation in patients with multiple myeloma. This study should help us quickly demonstrate concept and then the information that we gained could open a wide range of disease opportunities for us to choose from for future development. In each of the many primary diseases in which CRP inhibition can prove beneficial. There is a potentially significant commercial opportunity any one of them could be a $1 billion opportunity. So we’re very, very encouraged and excited about that drug. Our partner Excaliard has reported very positive data from three Phase 2 studies with EXC 001 showing dramatic improvements in scarring. We highlighted that in our April pipeline call. Excaliard did a fine job and move quickly and efficiently in the development of EXC 001. We expect the continued development to proceed quickly as well. Excaliard plans next to evaluate EXC 001 in Phase 2 in a Phase 2 dose ranging study to identify the optimal dose to use in Phase 3 studies and the Phase 3 studies are currently being planned. Again this is a unique opportunity in an area of unmet need and is an opportunity that is a bonus to our shareholders since we are investing nothing to get the opportunity. We're also making progress in our neurodegenerative programs. This month we were awarded Orphan Drug designation for a drug in development to treat spinal muscular atrophy. We expect to begin Phase 1 studies on this drug either late this year or early next year. We are also making steady progress in the clinical trial of SOD1 to treat patients with amyotrophic lateral sclerosis or ALS. Now, let me just focus on mipomersen for a minute. At this year’s ACC we presented the data from the last two Phase 3 mipomersen studies that will be a part of our initial regulatory submissions. We hosted a webcast in which an expert panel of physicians discussed the results from those Phase 3 studies. They discussed the overall profile of mipomersen and its potential value in the treatment of these very sick patients on whom we are initially focusing. On the webcast, we also discussed the fact that long-term treatment with mipomersen continue to demonstrate significant reductions in all atherogenic lipids and a side effect profile that supports our development and commercialization plans to treat patients, who are at very high risk of cardiovascular related death. When you listen to that call, you can hear the excitement of that the experts share and having mipomersen available to treat their patients soon. So, clearly mipomersen is an important product opportunity for Isis. Equally, clearly it’s an important opportunity for Genzyme and for sanofi-aventis as well as for the physicians, who treat these patients and of course the patients themselves. Most significant events of this year should be the mipomersen filings for marketing approval in Europe and U.S. Not only it is an important event for Genzyme and us, plus important for sanofi. In fact sanofi highlighted mipomersen regulatory filings as important upcoming milestones in both their earnings press release and their conference call last week. We are obviously very pleased with the progress the teams have made and now can confidently tell you that European filing will be in July. In the US, our initial filing is also on track to be filled in the second half of this year. Some of the most exciting progress that has been made recently is the evolution of Genzyme’s plans for commercialization of mipomersen. FH patients are under diagnosed, undertreated, underserved; creating awareness of the disease so that these patients can benefit from mipomersen is an important part of the Genzyme marketing strategy and an activity that they are unequivocally good at. Importantly, the National Lipid Association will unveil it FH awareness campaign later this month at its Annual Scientific Session in New York, where they have organized some multi-prong initiative that will include components specific to patient and physician education design to enhance diagnosis and treatment of these patients. To kick that off, lastly the NLA expert published their findings in the Journal of Clinical Lipidology. Conclusion that the NLA expert reached an important quotation with the age, they are important to practitioners, they are important to mipomersen and they are important to the commercial opportunity as well. In summary, they reached these positions. FH is under diagnosed and undertreated. The cardiovascular risk that FH patients experience even greater it might be predicted by their very, very high LDL levels because they have earlier onset of LDL, but they have a much greater life time burden of that cholesterol. Nevertheless, FH is treatable and therefore much greater emphasis on early diagnosis and aggressive treatment is warranted. Diagnosis with FH is to be made based on LDL cholesterol level, clinical presentation and/or family history, genetic testing is not needed. NLA recommends that patient should be referred to lipidologist, the people who treat these patients and the people who are already familiar with mipomersen and waiting for it anxiously. Apo-B and Lp(a) are important risk factors, in addition to LDL cholesterol and combination therapy is indicated to reduce LDL cholesterol and these other risk factors to the lowest level possible. Finally, the payors are advised by the NLA to pay for early diagnosis and aggressive treatment of these patients. Obviously the NLA physicians are at important ramification to mipomersen. First, they emphasized the importance of reducing all atherogenic lipids including LDL, apo-B and Lp(a), you recall that mipomersen is the only drug that specifically and directly reduces apo-B. It reduces all atherogenic lipids including Lp(a) and triglycerides. Second, it confirms the wisdom of our (indiscernible) because of the development and commercialization of mipomersen that focus attention on these very needy patients as our first patient group. Third, it confirms the key elements of Genzyme’s commercialization strategy early diagnosis, addition of mipomersen to other therapy and referral of these patients to lipidologist. Finally the NLA recommends perform cascade screening on families of duly diagnosed FH patients. Cascade screening means that once an initial patient is identified the family screen to identify other members of the family that who might be affected. This will identify we believe many more patients, who should be treated with mipomersen. The bottom line the NLA physicians support for registration and commercialization of mipomersen and support the approaches we and Genzyme undertaking. If you would like to read these papers, we provided the link on our website to the Journal of Clinical Lipidology. Mipomersen should benefit also from the added muscle that sanofi-aventis will provide. We believe now, particularly with the help of sanofi, Genzyme has all the resources necessary to successfully globally commercialize mipomersen. We have an exciting year ahead for mipomersen. However, with 24 drugs in our pipeline, we have many other events to look forward to. We will continue to report clinical date on many of our drugs in the pipeline including our SELT 2 drug to treat type 2 diabetes our APOC3 to lower triglycerides, and our Factor XI anti-clotting drug. We’re making progress in advancing many of the drugs in our pipeline and next a little bit. We plan to launch a Phase II program to evaluate the benefits of lowering CRP in multiple myeloma and rheumatoid arthritis and we expect to initiate clinical trials in several more drugs this year. We expect to add three or more novel antisense drugs to our development pipeline as the year progresses and this will include our first generation 2.5 antisense drug. We’ll continue our efforts to share with you the tactical and strategic rationale for the drugs that we’ve chosen to put in our pipeline. Our series of pipeline calls one of which we just had a few weeks ago is highlighting the drugs this year that we keep once in our development. And our next pipeline call will be a little later in the year. We’ll keep you updated as we schedule that call. So to finish up, 2011 is an important year. Mipomersen is front in the center making mipomersen a commercial success will continue to be our primary focus this year, but in addition, the rest of the pipeline and our technology will continue to advance. With that, I want to thank you all for joining us today and we’ll now open the call up to Q&A. Lacy, if you can set us up please, appreciate it.