Alnylam Pharmaceuticals Inc

NASDAQ:ALNY

Earnings Call Transcript 2018-Q4

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the Alnylam Pharmaceuticals Conference Call Fourth Quarter and Full Year 2018 Financial Results. There will be a question-and-answer session to follow. Please be advised that this call is being taped at the company's request.

I would now like to turn the call over to the company.

[Christine Lindenboom]

Good afternoon. I'm Christine Lindenboom, Vice President of Investor Relations and Corporate Communications at Alnylam. With me today on the phone are John Maraganore, Chief Executive Officer; Barry Greene, President; Akshay Vaishnaw, President of R&D; Manmeet Soni, Chief Financial Officer; and Yvonne Greenstreet, Chief Operating Officer is traveling today will not be able for today’s call,

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

During today's call, as outlined in slide 2, John will provide some introductory remarks and provide some general context; Akshay will review recent clinical updates; Barry will provide an update on our commercial progress, Manmeet will review our financials; and John will wrap-up with the brief summary of upcoming milestones before opening the call for your questions.

I would like to remind you that this call contains remarks concerning Alnylam's future expectations, plans and prospects, which constitute forward-looking statements for the purpose of the Safe Harbor provision under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors included those are ion our most recently quarterly report on file with the SEC.

In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update such statements.

Please also note that the press release and related financial tables, including a reconciliation of GAAP to non-GAAP measures that we will discuss today can also be found on the Investor page of our website. We believe non-GAAP measures provide useful information to management and investors regarding our financial condition and results of operations.

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

[John Maraganore, Chief Executive Officer]

Thanks, Christine, and thank you everyone for joining the call today. I'm going to keep my remarks relatively brief, so we can dive into the meat of the call. We believe 2018 was a better year for Alnylam in which we saw the approval and subsequent launch of the U.S. and EU of ONPATTRO holding the arrival of RNAi therapeutics as a whole new class of innovative medicines.

Barry will get into these specifics later, but while still early, we're pleased with how the launch is going. With over 200 patients receiving treatment with commercial ONPATTRO in the U.S. and EU as of the end of 2018, we believe we are seeing strong patient and physician demand as well as excellent commercial execution by our U.S. and EU teams.

While we're focused on the near-term are launching ONPATTRO into the market of hATTR amyloidosis patients with polyneuropathy we're also excited about the significant growth potential of our ATTR franchise in the mid and longer term. This includes potentially expanding the ONPATTRO label into the hereditary and wide-type cardiomyopathy segments with the APOLLO-B study as well as advancing our investigational RNAi therapeutic patisiran initially for hATTR polyneuropathy patients through our HELIOS-A study. Then longer-term, we're committed to developing vutrisiran for the treatment of hereditary and wide-type cardiomyopathy patients with the HELIOS-B outcome study that we expect to start later this year.

Akshay will summarize how our clinical development efforts can potentially help realize this growth. The bottom line here is that over the next few years we anticipate having thousands of ATTR amyloidosis patients by the either commercial product or in the development program with an investigational RNAi therapeutic. All-in-all, we believe that this provide significant opportunity for patient impact and allows Alnylam to achieve sustained and continued growth with potential value creation for shareholders.

Now, beyond ONPATTRO and patisiran, we're also advancing a large number of additional programs, building what we believe to be the foundation for get further patient impact and company growth. In particular, we believe that we're positioned assuming positive study results to have essentially annual launches of innovative medicines over the next several years, including givosiran and the lumasiran where we have global rights and then inclisiran and fitusiran, which are being advanced by our partners.

And beyond these Phase 3 programs that are nearing potential commercialization, we have rich pipeline of get additional programs in clinical and late preclinical development. Altogether, we believe that this is a compelling profile for potential value creation, very much in line with our Alnylam 2020 goal of becoming a multi-product commercial biopharma company with a deep clinical pipeline, fueled by robust discovery engine for sustainable innovation. Our profile rarely achieved in the biotech industry.

So with that, I'll turn it over to Akshay now to review our latest pipeline progress in more detail. Akshay?

[Akshay Vaishnaw, President of R&D]

Thanks, John, and good afternoon everyone. Let me start with fitusiran, which is the non-branded name for ONPATTRO. We announced last month our plan to potential expansion of the ONPATTRO label to include hereditary and wild-type ATTR cardiomyopathy.

As you know, last September we were pleased to have exploratory cardiac endpoint data from the APOLLO Phase 3 study published in the journal Circulation. This data highlighted the potential for fitusiran to favorably impact certain cardiac manifestations of hATTR amyloidosis and support continued evaluations for clinical research. These encouraging exploratory cardiac data have let us now realignment with the FDA on new study APOLLO-B, which is designed with the randomized, double-blind, placebo-controlled study of ONPATTRO with fixed Amyloidodis and primary endpoint after 12 months.

APOLLO-B is expected to enroll about 300 patients with either wild-type or inherited ATTR amyloidosis with cardiomyopathy including patients with the naive to TTR stabilizers or those progressing are receving TTR stabilizers. We expect this study to start in the middle of this year in a positive that we believe it will support expanded label of ONPATTRO in the 2021 to 2022 timeframe.

As you know, we're also launching vutrisiran as a potentially best-in-class therapeutic for ATTR amyloidosis. Vutrisiran is our investigational subcutaneously delivered TTR-lowering agent. We believe that once with the low-dose low-volume subcutaneous injection that achieves an approximately 90% knockdown of TTR, which is generally well tolerated could be very attractive option for patients.

Late last year, we initiated the HELIOS-A Phase 3 study of vutrisiran in ATTR patients with polyneuropathy. It's an open label study at where we are looking at neurological impairment and quality of life in nine months and comparing the results in vutrisiran-treated patients to the placebo arm of the APOLLO study. This innovative study design is aimed at bringing vutrisiran to the market as rapidly as possible.

Later in 2019, we also plan to initiate an outcome study for vutrisiran, which will be called HELIOS-B. If successful we believe HELIOS-B will facilitate vutrisiran's entry into the significant and growing wild-type ATTR market opportunity.

Let's move on to givosiran, our investigational RNAi therapeutic in development for the treatment of acute hepatic porphyrias. We now just about a month away from reporting top line results from the ENVISION Phase 3 study and we're very excited to soon see these full results from the first-ever Phase 3 study of GalNAc conjugated siRNA.

As a reminder, patients with porphyria have enormous disease and can suffer from frequent life-threatening porphyria attacks often acquiring hospitalization. This is a frail population with significant underlying disease manifestations and complications from therapy including iron overload and chronic hemin administration. Recurrent attack in porphyria patients also exhibit neuropathy with chronic pain, fatigue, and also liver dysfunction and renal disease. Clearly, there's a very high unmet need for new therapies to help these patients.

ENVISION study enrolled with 94 porphyria patients and also enrolled much more rapidly than we had originally expected. Topline results we reported next month will include data on the primary endpoint of annualized attack rate and safety. Full study results are expected to be presented in our presentation at the European Society for the Study of the Liver or EASL on the morning of Saturday, April 13th in Vienna.

If the study results are positive, we plan to complete our rolling NDA submission in the middle of this year, which could support an approval for givosiran in the late 2019 early 2020.

We also expect to open global EAP to make givosiran available to patients prior to regulatory approvals and reimbursement decisions. In the meanwhile, we're extremely pleased just yesterday that New England Journal of Medicine published results from our Phase 1 study of givosiran and we believe this publication is a high journal reflect the enormous potential of givosiran to transform the lives of patients with acute chronic porphyria.

We're proud that this is now the sixth New England Journal paper to describe clinical results for an RNAi therapeutic coming from our scientists, clinicians, and collaborators.

I'll now turn to recent progress at lumasiran, an RNAi therapeutic we're developing for primary hyperoxaluria type 1 or PH1. Based on a promising Phase 1/2 study results, we were pleased to initiate the ILLUMINATE-A Phase 3 study last year. This is a randomized double-blind placebo-controlled study in approximately 30 patients with PH1.

The primary endpoint in this study is the reduction of urinary oxalate at six months relative to baseline in the lumasiran group relative to placebo. We expect to report topline results from ILLUMINATE-A in late 2019, and if positive, to initiate regulatory filings beginning early 2020.

In addition to this pivotal trial, we intent to initiate in mid-2019, both the ILLUMINATE-B study in patients less than six years of age with preserved renal function and ILLUMINATE-C study in patients with more severe renal impairment.

Outside of the full Phase 3 program I just highlighted where traditional focus currently in Phase 3 trials. fitusiran in development for the treatment of hemophilia, looking at our partner Sanofi in the ATLAS Phase 3 program.

Incsclisiran in development for hypercholesterolemia is being advanced by our partner The Medicines Company in the ORION Phase 3 program.

Finally, one area that we're especially excited about is the progress that we've made at Alnylam in the delivery of RNAi therapeutics to the central nervous system and the eye. This opens up an exciting landscape of disease opportunities that we can pursue by leveraging our and RNAi therapeutics platform.

And with that, let me now turn it over to Barry review our Commercial and Medical Affairs progress. Barry?

[Barry Greene, President]

Thanks Akshay. As John said we're extremely pleased with supply chain Commercial and Medical Affairs capabilities we build and our progress on the ONPATTRO launch. In terms of our commercial performance, as you've read, we've achieved $12.1 million global net revenues from ONPATTRO in Q4 and $12.5 million for the full year 2018.

We're very pleased that as of year-end 2018, we had over 200 patients on commercial ONPATTRO worldwide. now if you include patients receiving patisiran in our clinical studies in our Expanded Access Program, we had about 550 patients receiving the drug as of year-end 2018, representing a future pool of patients that we expect over time to come onto commercial ONPATTRO.

To give some additional color on market dynamics in United States, we can look at start forms that we received in Alnylam Assist patient hub. As a reminder, our U.S. start forms represent most, but not all of our U.S. patient demand, since many patients also receive ONPATTRO outside of Alnylam Assist via supply through our distribution channel.

From launch to year-end 2018, we received 250 start forms. We're very pleased to see that now we're now getting a growing number of start forms from patients who did not participate in the Expanded Access Program.

We're also very pleased to see that we have a mix of physician prescribers for ONPATTRO including neurologists, cardiologists, hematologists and other specialties, which really speak to the multi-systemic nature of hATTR amyloidosis.

In terms of payer mix, approximately 62% of start forms as we expected in The United States are from patients covered by Medicare while approximately 32% were from patients covered by commercial insurers.

Importantly, we have not encountered significant headwinds on reimbursement from ONPATTRO in the U.S. In fact, we currently have patients on commercial drug through each on of the top five U.S. payers. We also are making solid progress on value-based agreements or VBAs and expect to have around 90% of commercial patients covered by VBAs.

Now, let me turn to the EU where we've also made good progress advancement pricing and reimbursement procedures with authorities in 15 countries across Europe, together representing the vast majority of its hATTR patients, amyloidosis patients with polyneuropathy in Europe.

Recent example of our progress includes positive technology assessment reports authorities in Germany and Sweden, especially innovation designation of ONPATTRO by Italy authorities, and favorable reimbursement alignment with authorities in the Netherlands.

On the Medical Affair front one of the biggest challenges in this rare disease is raising awareness and improving diagnosis of hATTR amyloidosis with polyneuropathy. As we highlighted previously, Alnylam Act program is a third-party genetic screening initiative, aimed at facilitating improve diagnosis patients suspected of having ATTR amyloidosis.

As of February 6, more than 10,900 samples have been submitted, out of which 726 have tested positive for a pathogenic TTR mutation. We've also seen success with our patient advocacy initiatives as well as our digital disease awareness campaigns.

As we've discussed previously, another potential driver of improve diagnosis is the availability of new therapies. Post-launch we’re hitting many anecdotal stories from patients and physicians about their positive experience with ONPATTRO.

We believe these positive patient and positive physician experiences will contribute to raising awareness, improving diagnosis and supporting earlier treatment of ATTR amyloidosis patients with polyneuropathy.

With that in mind, we launched the new promotional campaign that highlights ONPATTRO's ability to avert the polyneuropathy manifestations of ATTR amyloidosis as demonstrated in addition to other benefits in the APOLLO Phase III study. We believe this effort will help highlight the clinical benefits and unique characteristics of ONPATTRO.

I'll now turn the call over to Manmeet to give our fourth quarter and full year performance. Manmeet?

[Manmeet Soni, Chief Financial Officer]

Thanks, Barry, and good afternoon, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year of 2018.

Let me start with our cash balance. We maintained a solid balance sheet ending 2018 with approximately $1.13 billion in cash, cash equivalents, marketable debt securities and restricted risk investments excluding equitable securities. Following our underwriting public offering last month, we currently have a pro forma cash balance of approximately $1.5 billion.

Moving now to our revenues. We recorded $12.1 million of ONPATTRO net product global revenue during the fourth quarter of 2018 and $12.5 million, since the middle of August U.S. launch date through the end of the year. As expected, our gross to net discount in the U.S. was approximately 23%, mostly related to mandatory discounts for 340B entities and reserved for Medicaid patients.

Also as expected our gross to net in the EU was generally higher than in the U.S. We will continue to update on our expected gross to net discounts as we progress with the launch of ONPATTRO and actual payments. Cost of goods sold were $1.8 million for the full-year, which equates to approximately 14.5% as a percent of net product revenues. In the long run, we expect normalized cost of goods sold to be in the middle to high-teens as a percentage of ONPATTRO product revenues including royalties paid to third parties.

Moving to other operating costs and expenses I will refer here to our full year 2018 results. GAAP R&D expenses were $505.4 million for the full year 2018 as compared to $390.6 million for the prior year. Non-GAAP R&D expenses were $424.9 million, as compared to $338.8 million for the prior year. This lies in the lower end range of our non-GAAP R&D guidance of $420 million or $460 million.

The increase in non-GAAP R&D expenses was due to increased compensation and related expenses as a result of increase manufacturing expenses associated with our late stage programs and increased headcount during the period as we continue to expand and advance our development pipeline.

Turning to SG&A. GAAP SG&A expenses were $382.4 million, as compared to $199.4 million for the prior year. Non-GAAP SG&A expenses were $305 million as compared to $158 million for 2017. We entered within the midpoint of our non-GAAP SG&A expense guidance in the range of $280 million to $320 million for 2018.

The increase in non-GAAP SG&A expenses was due primarily to an increase in commercial and medical affairs headcount and commercial-related services to support corporate growth and the launch of ONPATTRO in 2018 and potential additional country launches of ONPATTRO in 2019. Non-GAAP SG&A expenses also exclude stock base compensation expense.

With respect to guidance for 2019, we expect that annual non-GAAP R&D expenses will range between $520 million and $560 million and annual non-GAAP SG&A expenses will range between $390 million and $420 million. We expect that our current cash, cash equivalents and marketable debt securities will support company operations for approximately two years based upon our current operating plan.

As of now, we will not be providing any revenue guidance for 2019. We will continue to evaluate the possibility of providing guidance once we have better visibility on the ramp of the launch, market dynamics and key metrics over the next several quarters.

I will now hand it back to John to review our 2019 goals. John?

[John Maraganore, Chief Executive Officer]

Thanks, Manmeet. As I mentioned earlier 2018 was a landmark year for Alnylam and we envisioned 2019 shaping up to be equally transformative. Overall, we're executing our six Phase 3 programs we expect to report three Phase III data readouts and if positive we expect to file two NDAs. More specifically, starting with ONPATTRO, while we continue our global commercial execution we'll also be planning to initiate our APOLLO-B Phase III study in mid-2019 which is aimed at supporting potential expansion of the ONPATTRO label to include both hereditary and wild-type cardiomyopathy. With fitusiran we plan to enroll the HELIOS-A Phase 3 study throughout the course of the year and initiate our Helios be outcome study in late 2019.

Moving to givosiran as Akshay highlighted we expect to report top line results from the ENVISION Phase 3 study very, very soon in March. And of course if the results are positive we'll plan on completing our rolling NDA submission as well as filing an MAA in mid-2019.

With lumasiran we expect to complete enrollment in the ILLUMINATE-A study in the middle of the year and report top line results from that study in late 2019. With inclisiran our partnership to medicines company have guided they have top line results from the ORION's 9 10 and 11 studies in mid and late 2019. And assuming positive data to submit an NDA for inclisiran by the end of the year. Of course, will also continue to advance rest of our pipeline as well as exciting preclinical efforts and will highlight those milestones throughout the course of the year as they occur. So with that, let me now turn the call back to Christine to coordinate our Q&A session. Christine?

[Christine Lindenboom]

Thank you, John. Operator, we are ready to open the call for questions. To those dialed in, we would like to ask you to limit yourself to one question each and then get back in the queue if you have additional questions.

[Operator]

Yes ma’am. Thank you. [Operator Instructions] And our first question will come from Paul Matteis with Stifel.

[Paul Matteis, Stifel]

Thanks so much. Congrats on all the progress. One question for Barry, Barry I was wondering if you could comment on the times you drug that you seeing in the channel for patients that starting on ONPATTRO, what the trajectory looks like and how this has been changing all with your progress on reimbursement? Thanks.

[John Maraganore, Chief Executive Officer]

Yeah, Barry go ahead.

[Barry Greene, President]

Yeah – Paul great questions. So, as we highlighted on previous calls our intention is to get the time from many, many weeks to only a couple of weeks and we're seeing a progress. We have examples now, start coming in patients little early getting un-drug in a couple of weeks. It does depend on where they being infuse what the insurance looks like but those times are coming way down. We're really excited about the progress we're making.

[Operator]

All right. Thank you. Our next question will come from Alan Carr with Needham & Company.

[Alan Carr, Needham & Company]

I think you take some of my questions. Maybe you can talk about how things are going for on ONPATTRO U.S. versus Europe what's your expectation for the relative ramps between those two over the course of this year into next year?

[John Maraganore, Chief Executive Officer]

Yeah. That's a great question, Alan. Barry, you want to handle that?

[Barry Greene, President]

Yeah. So Alan, we're not – we’re not really giving the breakdown of guidance as you are aware. We launched immediately in The United States after the August 10 approval, where we had boots on the ground that Monday and we had drug ready to be shipped within 48 hours as we committed. And we've highlighted how well the overall launch is going.

Europe's quite different, because in certain countries like Germany, we can launch immediately. Other countries require us to work from the health technology assessment progress before naming our price and getting paid for it.

So we're in the process as highlighted on the call, working through that in 15 different countries. And getting the right access by country will really determine the launch order and then how the trajectory in Europe progresses. But we're happy with the progress so far in Europe in what we're seeing.

[John Maraganore, Chief Executive Officer]

Yes. I'll just add, Alan, from our perspective, Europe is showing itself strong at this point and there's strong patient demand, there's very strong KOL awareness with ONPATTRO and obviously the features that they see in the clinical studies and that helps a lot in that effort.

[Operator]

All right. Thank you. Our next question will come from Maury Raycroft with Jefferies.

[Unidentified Analyst]

Hi. This is Mitchell [ph] on for Maury. Thank you for taking our question. For at-home infusion of ONPATTRO how many patients have access? Are doctors providing the option to all patients? And can you walk us through how cost reimbursement factor into this service?

[John Maraganore, Chief Executive Officer]

Yes. Thanks Mitchell. Barry, do you want to help?

[Barry Greene, President]

Yes. So in the United States and then in many countries in Europe home infusion is immediately available. Obviously, in certain European countries, it's all paid for, mostly paid for and taken care by the country and single payers. In The United States, home infusion is available to all the commercial plans right now and it's offered by all the commercial plans.

It is something that the physician talks to the patient about and is offered. For new patient, the physician is telling us they typically like to see the patient once or twice after his infusion to check the patient out, and after that happy to move home infusion.

It's interesting that we – and we highlighted this at the JPMorgan conference, only about 25% of the patients on commercial drug have chosen human infusion. And in fact, what we hear in marked research from patients is they're actually enjoying their infusion experiences. They've met people, they enjoy, they meet other patients, their nurses and actually enjoying the infusion experience, which is a pleasant surprise for us.

[Unidentified Analyst]

Thank you.

[Operator]

All right. Thank you. Our next question will come from Alethia Young with Cantor Fitzgerald.

[Emma Nealon, Cantor Fitzgerald]

Hi. This is on Emma for Alethia. Are you seeing any patient switch from tafamidis in some of these markets? And certainly, what you expect that dynamic to look as the launch progresses?

[John Maraganore, Chief Executive Officer]

Yes. It's a good question. And Barry do you want to handle that?

[Barry Greene, President]

Yes. So we have to look at The United States differently than many of the countries in Europe. As you know, the Phase 3 study in polyneuropathy meet the endpoint, was not approved in The United States, but given endemic nature of the disease it was approved in Europe and other countries around the world. So it's been used for multiple years.

As we also know, again, getting back to polyneuropathy is, many physicians report a significant progression in as little as six months in published literature, tafamidis. So the dynamic outside the United States is in fact, patients looking for a progression and physicians looking for progression in patients, and when appropriate, assuming an on-label patient, switching them to ONPATTRO. We are seeing that dynamic and do anticipate more of that. Obviously, the whole dynamic in United States is something we'll see in the future as tafamidis gets to the U.S. market with a different labeling.

[John Maraganore, Chief Executive Officer]

I'll just add Emma that, I will remind you that in our APOLLO Phase III study about 50% of patients had previously been on a stabilizer and many of those patients chose to come on to a randomized placebo-control study because they had either progressed on the stabilizer or they want to participate in the availability of a TTR silencer like the fitusiran. So that's an important and useful data point, if you just look at our clinical trial experience alone.

[Emma Nealon, Cantor Fitzgerald]

Great. And then are you able to provide any color on pricing bend from ONPATTRO going through reimbursement discussions?

[John Maraganore, Chief Executive Officer]

I missed your question. Can you repeat that?

[Emma Nealon, Cantor Fitzgerald]

On the pricing bend in Europe?

[John Maraganore, Chief Executive Officer]

Barry you want to comment on that?

[Barry Greene, President]

Yes. As we comment on previously on a global basis per vial price we are going to keep it at a very, very tight level.

[Operator]

Our next question will come from Ritu Baral with Cowen.

[Ritu Baral, Cowen]

Hi guys. Thanks for taking the question, apologies for the noise. Question actually about our view because you also see some of the design elements and the assumption, why 12 months, how many patients wild-type patients you're expecting and potential timing around that both enrollments and data?

[John Maraganore, Chief Executive Officer]

Yes terrific. Akshay?

[Akshay Vaishnaw, President of R&D]

Yes. So in terms of the length of the study as you know from the APOLLO -- recent APOLLO study, there is nine months end point over the clinical endpoint here and so we're very confident that a 12-month time point is a suitable time point for 6-minute walk distance.

We also know from the client study that 6-minute walk distance got it separated have significant earlier than 12 months because of the climate. So clearly this is a significant clinically relevant end point that is amenable to change at earlier time points than potentially other endpoints such as mortality or hospitalization, so that was a rationale behind that.

Now with respect to the split between the wild-type and mutant obviously there are many many mild type patients than hereditary TTR patients. So I think the majority of the study would be filled with wild-type patients. Hard to say how much right now again historical experience mostly averaging [indiscernible] three quarters, might be wild-type, but that's a speculation on my part at the moment.

And then finally with respect to specifically for timing -- with respect to the initiation of the study TTR, it's hard to comment on the exact time. As we have suggested we anticipate approval in 2021 to 2022 timeframe we feel that [indiscernible] consistent with them.

[John Maraganore, Chief Executive Officer]

If you can go on mute because you got lot of background noise. Thank you.

[Operator]

Thank you. And we have a question from Anupam Rama with JPMorgan.

[Unidentified Analyst]

Hey guys. Thanks so much for taking the question. This is [indiscernible] on for Anupam. One for you Barry, just wondering about the ONPATTRO value-based agreements, how long you anticipate taking to get the remainder of those in place to get that 90% of commercialized covered? And then what is one of those agreements typically look like? Thanks so much.

[John Maraganore, Chief Executive Officer]

Barry?

[Barry Greene, President]

Yes. No thanks. As you know part of our patient access philosophy was to proactively offer value-based agreements. And that strategy has proven incredibly useful in opening a dialogue with payers. And as we talked about in the call, even outside of finalizing value-based agreements, we're really not hitting the payer headwinds via through partnership with the payers to try to find and treat their patients has been really spectacular and they've really stepped up on medical policies to really help educate and ensure the patient to access. So that give the payer community a lot of credit on the partnership we have seen.

In terms of the value-based agreements we have highlighted, we've got a three complete and we anticipated by the end of the year having about 90% of patients covered by VBAs. It's hard to name timeframes, because of the back and forth between the different back office folks to finalize the letter of the VBAs, but the conversations are going well. And I'd say, it's a sort of end-of-year goal to have 90% of all the patients covered. It's important to note that even without the VBA in place as I said, we are having great dialogue with payers and really not running into reimbursement issues with patients at this point.

[Anupam Rama]

Got it. Appreciate that.

[Operator]

Thank you. Our next question will come from Dave Lebowitz with Morgan Stanley.

[Dave Lebowitz, Morgan Stanley]

Thank you very much for taking my question. How are you going to manage with the HELIOS-B and APOLLO-B trials starting later this year? Are they going to be completing overlapping populations? Are they going to be at the same sites? How are you going to manage those two groups?

[John Maraganore, Chief Executive Officer]

Yes that's a great question David. Akshay, you want to comment a little bit at APOLLO-B and HELIOS-B?

[Akshay Vaishnaw, President of R&D]

Yes there is certainly going to be some overlap between the study populations from those two protocols that involve patients with wild-type and hereditary ATTR cardiomyopathy. But the situation is, what should I say mitigated by several important factors. Firstly, there are very significant number of wild-type patients that carry on no treatment at all, many of them despite the potential approval of profoundness in months to come, maybe in a territory where it let say not be available or some other therapy may not be available for them. The availability of patients with hereditary ATTR similarly that varies by territory. And so between the need to do a robust study that comes with a range of mutations and geographies that satisfies regulates the availability of the various drugs that is being recently approved or about to be approved. We are confident that we can ensure enrollment without competing clinical studies or competing between other goals of the company.

[Dave Lebowitz, Morgan Stanley]

Thanks for taking the question.

[Akshay Vaishnaw, President of R&D]

Thanks, David.

[Operator]

Our next question comes from Gena Wang with Barclays.

[Gena Wang, Barclays]

Thank you for taking my question. A one quick one regarding the 726 patients that had a positive TTR mutation identified through Alnylam act. Just wondering how many of these patients are addressable for ONPATTRO?

[John Maraganore, Chief Executive Officer]

That's a great question Gena. I mean, at a high level, we don't know because we don't have specific details on these patients. This is a service that we are providing for the medical community and its [indiscernible] help patients, basically be able to get diagnosis. And so we don't have any information about anything more specifically about those patients as a result.

[Gena Wang, Barclays]

Okay.

[John Maraganore, Chief Executive Officer]

Barry, do you want to add?

[Barry Greene, President]

No. As John said this is a service that we offer for the benefit of patients to help improve overall diagnosis. The fact that we’re seeing so many pathogenic, it demonstrates a major unmet need and the patient benefit.

I will add that Alnylam Act doesn’t represent all the genetic testing that's being done. There are other free-genetic testing offer by other companies and now that we have commercial drugs many physicians are choosing to use commercial insurance to pay for genetic tests. So we’re delighted that genetic testing is being so well amplified out in the community, representing the unmet need and the need to help find these patient's with the genetic testing.

[Gena Wang, Barclays]

Thank you.

[Operator]

Thank you. Our next question comes from Whitney Ijem with Guggenheim.

[Whitney Ijem, Guggenheim]

Hi, guys, thanks for taking the questions. One on givosiran headed into the Phase III data, I guess, can you remind us first of all for the 1,000 and 5,000 patient numbers you talk about the recurrent and sporadic. Are those based on identified or diagnosed patients? Or is that an epidemiology estimate?

And then, in terms of use of givosiran on the two different populations, how do you think about that? And what are I guess some of the endpoints in the Phase III data that we should look forward to help us get a better sense of that?

[John Maraganore, Chief Executive Officer]

Two great questions. Maybe Barry you can start with the epi, and then Akshay you can cover the second question on the data that we should look forward to cover both sides. Go ahead.

[Barry Greene, President]

Yeah, the numbers that recorded 1,000 and 5,000 is based on bumps and seeds if you will. These are patients that the porphyria network beliefs they had in the coverage universe and then we triangulate that at the various centers. The epidemiology represents much, much, much greater numbers, but of course we don't all fully understand the penetrant. So, we feel pretty good about that.

The other thing to keep in mind is that the attack rates are a way that we've been able to do a clinical study. As we move forward with data commercially, we’re going to look more at severity of patients. So, patients that mainly have one attack, if I can say that we hear can be even more disabled than patients who have more attacks, because of the severity of attack. So when we look at severity of patients and the overall manifestation of disease and of course the detail reason of our data will help us understand just how many patients we maybe able to benefit.

[John Maraganore, Chief Executive Officer]

So Akshay on the clinical study part.

[Akshay Vaishnaw, President of R&D]

So, I think the key aspect here is that we know that by targeting ATLAS 1, we are down-regulating the accumulators of acute hepatic porphyria namely aminolevulinic acid and porphobilinogen, ALA and PBG. And it was the relationship between the levels of ALA and PBG and the physician to attacks that really convinced the FDA to allow us to proceed with the study and even encouraged us to do interim analysis that we did looking at those biomarkers.

Now whether you have 10 attacks a year or 20 attacks a year, and of course there are patients who suffer greater with that frequency or whether you have two attacks a year, which in and of itself is not trivial, it is the – those attacks are mediated by ALA and PBG.

So I think if the Phase III study reads out and convincingly shows consistent and durable reductions in ALA and PBG, which is what we anticipate based on the interim analysis, and these are indeed endpoints in the study and then that bodes well for frequent attack patients or even those with more sporadic attacks.

And let's recall that these patients suffer not just from the acute attacks, but even between attacks. And I hope and we're going to be measuring this with nausea and fatigue and pain scales. I hope that those enter attack symptoms will also abate or reduce, let's look at the data when they come out.

But if they do then again that bodes well for patients that don't have the horrific and [indiscernible] but maybe two or three because they too need help and we believe this drug should help them.

All right. Thank you.

[Operator]

Our next question will come from Mani Foroohar with SVB Leerink.

[Mani Foroohar, SVB Leerink]

Hey, thanks for taking my question. I’ve got a quick one for Manmeet. So regarding the two years of runway to operating plan I’m scratching a little bit on what's backed into that plan because you got a number of pivotal readouts, number of launches, what is baked in terms of potential expense to build up commercial infrastructure around vutrisiran to address APOLLO-B population, the HELIOS population and any additional incremental R&D build-out for assets that come out of the CNS liver of the portfolio. I'll then have a quick follow-up.

[Manmeet Soni, Chief Financial Officer]

Sure. So Mani, if you prefer to our guidance on R&D which we gave this optimum for $520 million to $560 million range that covers all of the plan, all of the Phase 3 trials which are going and the initial plans for building up inventory when for givosiran. So all is that included into our guidance for 2019.

[Mani Foroohar, SVB Leerink]

Okay. And as a quick follow-up. Should we think about the growth in the stock-based component of comp as approximately in line with the percentage year-over-year growth in non-GAAP R&D expense, non-GAAP SG&A expenses approximately in line and how do we -- how should we think about the potential chunkiness around events this year?

[Manmeet Soni, Chief Financial Officer]

Yes. And I think that's the reason we are not able to guide our GAAP expenses and we have taken a measure to guide our non-GAAP expenses, because it's very difficult to estimate stop this compensation expense realizing that most -- some of our stock-based dependent upon performance milestones and it depends on couple of those factors.

But to highlight or to answer your question simply, you should expect pretty much in the range what we had in 2018 as our stock-based compensation for 2019. You should not expect a huge jump from there.

[John Maraganore, Chief Executive Officer]

And Barry, do you want to add your comments?

[Barry Greene, President]

Yes. Just to give some color here you asked about, Manmeet very well answered kind of your R&D expenses and the fact that expense were baked in for the Phase 3 as we have planned in the time horizon. In terms of preparation for launch of givosiran, the capabilities that we built across supply chain medical affairs and commercial are all leverageable for the givosiran launch. So very little has to be added in that respect. We will be adding additional kind of customer-facing roles but as a percent of our overall population base, thast pretty small and to prepare for givosiran.

[John Maraganore, Chief Executive Officer]

And I mean, just to take it one step further Mani, you mentioned our CNS and ocular investments as well, I mean, those are very small through the two-year -- approximately two-year period of our cash balance in light of the fact that there’s still just -- there will be just starting clinical studies during that period of time. So that's not really a major part of the expense. But it is an area that we are advancing with strong focus.

[Mani Foroohar, SVB Leerink]

Great. Thanks guys. That's really helpful. I want to ask two, so I’ll hop back in the queue.

[John Maraganore, Chief Executive Officer]

Great. Thank you.

[Operator]

All right. Thank you. [Operator Instructions] And our next question will come from Vincent Chen with Bernstein.

[Vincent Chen, Bernstein]

Great. Thank you very much for taking my question. Thinking towards the givosiran readouts and trying to better understand the potential likelihood for additional liver function test elevation, could you help us better understand that typical characteristics of the LFT elevation you seen to-date with siRNAs both the one in the ENVISION study and also those and other programs which are thought to be attributed to a similar mechanism?

I guess, for example, one in the course of treatment to LFT elevation typically occur or these events that typically occur fairly early on in the course of treatment for a given patient or can they occur at various points sarcastically throughout the course of treatment?

And as you think about those right now, is likely to be a one-time highly rare event with givosiran or would you expect this is likely something where some minority of patients will have some sort of response like this and those patients simply won't be amenable to givosiran treatment which is fine?

[John Maraganore, Chief Executive Officer]

Yes Vincent. Thank you. Akshay?

[Akshay Vaishnaw, President of R&D]

Yes thank you Vincent for the qualified question. I mean, firstly the LFT. I would say that it's not typical of the platform given that as we have seen across the platform on reported about 2% to 4% of patient may get LFT changes and they are very -- characteristically appear to pumps in ALT which are transient and irreversible [indiscernible]. And when they do come on in that minority of patients, they tend to come on I would say within weeks or months of the initiation of RNAi therapeutic.

Now, we have plenty of examples of RNAi therapeutics at clinic where we have had no significant LFT changes at all. And I think in that regard the inclisiran expense being reported by The Medicines Company is very important to note where over 3,000 patients I believe who have been exposed to inclisiran, now, many of them for over a year.

And as you've heard from JPMorgan the last DSMB met and guided that they should take significant Phase 3 three of them to completion and there appeared to be no significant safety concern including the LFT. So, I guess very stringent task of one of our drug in a very large population, many of the patients being fragile.

The last question of why this might happen and what we can do to terminate it if I interpreted your question properly, let's also remember that the LFTs that we are reporting often occur in patients, they maybe predisposed for one or more agents. For example, in the context of porphyria, many of these patients have a significant iron overload from human treatment and in what way that may synergize with treatment or may in and off closing LFTs [Indiscernible] disease previous physicians in closing their fitusiran experience we reported to many of those patients have hepatitis B or hepatitis C as a background risk factor.

So, as usual it's complicated, but it seems to be learning sort of event, transient reversible and couple of INDs we filed recently with AAT02 and HBV02 are investigating the impact of this rather elegant G&A modification of C sequence to see whether these off target effects and thereby aggregate LFT changes and so those are studies to follow this year. But, overall, we're optimistic that aggression outcome and risk benefit I still think will be very much in favor of the drug.

[John Maraganore, Chief Executive Officer]

Yes. And I would just add Vincent that as a reminder at the time of interim analysis, there was only one discontinuation from study and there -- we'll obviously update you on the full results that was a 50% of the enrollment. We'll update you with the full results in the coming weeks and we'll just wait till then. But I concur with Akshay's comments on this as well.

[Vincent Chen, Bernstein]

Thank you very much.

[John Maraganore, Chief Executive Officer]

Thank you.

[Operator]

Thank you. Next question comes from Ted Tenthoff of Piper Jaffray. Make sure you're not --

[Ted Tenthoff, Piper Jaffray]

Yes, sorry. Thanks. Thanks too for taking my question late in the call. Nice update. Two questions if I may. Firstly, when it comes to, kind of, Tafamidis coming into market in cardiomyopathy, how would you guys detail ONPATTRO in those mixed patients?

Do you get a sense that docs maybe leaning more towards treating the cardiomyopathy? Do you think it'll be a situation where whichever manifestation is more prevalent, do you think some patients may even get both? I mean How are you guys kind of thinking about Tafamidis certainly now in the polyneuropathy patients, but in those mixed where they do have the cardiac involvement? Thanks.

[John Maraganore, Chief Executive Officer]

Yes, Ted, that is a great question. I'm going to let Barry answer, but I just as a remind you before Barry answers it, we are obviously not going to get into any details around our strategy because that is competitive. So, I think Barry maybe you can make some high-level comments on this without getting into any details.

[Barry Greene, President]

Yes, I mean Ted, I would have said the best defense is good offense, but maybe the Super Bowl is different than that. Look we are out there in The United States promoting on-label which is to treat the polyneuropathy hereditary hATTR amyloidosis patients.

Now, we're educating disease awareness broadly across multiple disciplines and as you've seen we have interesting uptake with cardiology -- hematology representing the multisystem nature of the disease.

So, very simply if a patient is an on-label patient, we believe recognizing that we have not been head-to-head studies that are on-label patients with polyneuropathy, we have the best drug for those patient based upon the APOLLO data and the lack of the polyneuropathy data for others.

And that's sort of our approach to make sure that on-label patients get an opportunity to get ONPATTRO and what we're hearing call commercial launch is -- and this is in certainly every patient, but good patient stories and good physician experiences. And as you know positive physician experiences often drive choice.

[Ted Tenthoff, Piper Jaffray]

Yes. And then are you able to discuss the APOLLO cardiac data with U.S. and/or European physicians?

[Barry Greene, President]

It is so discussed. So, in a promotional context, our salespeople can only promote on-label. In The United States those data are not on-label, so the answer is no. In Europe, depends on the country and what the country rules allow. But in general those are on-label, so we have -- it can be engaged.

Now, of course, in the context of medical information, the physicians are interested in talking about the data, they are certainly free to ask questions and we have a variety of techniques for scientific exchange. They can ask for medical information request which come in letter; they can ask for some person to physically show up and talk to them. But those are reactive only upon physician requests.

[Ted Tenthoff, Piper Jaffray]

Yes, I appreciate that and that's really clear. One last one if I may just because I really like the program. How are things going with our friends Vir and the HPV program? And thanks for all the questions.

[John Maraganore, Chief Executive Officer]

It's going great. I saw just George Scangos just a couple of weeks ago and he was excited with the progress they're making. The dose escalation is proceeding in the human volunteer study and we will look forward to having data from that effort later this year. It's an important program.

As a reminder Ted, we have an opt-in -- free opt-in at the end of Phase 2 to 50% of the value of that program. So, we have very strong economic incentive in the success of that effort and we look forward to data readouts later this year from that.

[Ted Tenthoff, Piper Jaffray]

All right. Thanks, guys.

[John Maraganore, Chief Executive Officer]

Thank you.

[Operator]

Thank you. Our next question will come from Paul Matteis with Stifel.

[Paul Matteis, Stifel]

Thanks for taking the follow-up. Just a couple quick ones on cemdisiran. I saw you announce a program in IGA nephropathy. I was wondering, if you could talk about the clinical rationale there and the plan study design?

And then secondarily on that same asset, I was wondering if myasthenia gravis is on your radar given that the data for Solaris and GMG, definitely suggests a different biological role for C5 and maybe suggest that cemdisiran could potentially have a comparable profile? Thanks so much.

[John Maraganore, Chief Executive Officer]

Yeah, Paul those are great -- two great questions. I'm going to turn it over to our resident cosmetologist Akshay to comment on both.

[Akshay Vaishnaw, President of R&D]

Thanks, John. Fitusiran in IGA nephropathy is relatively straightforward in addition, obviously, for significant unmet need. The IGA nephropathy represents globally the most common inflammatory in one of five studies resulting in renal failure. And so there's no question that these folks need help and many of them get better by themselves but there are hundreds and thousands others globally in totality that fell to significant impairment or renal failure.

The evidence for complement activation is clear and you see local complement deposits glomerulopathy including C3 deposits and complement products there.

And finally it's not surprising that the complement is part of the pathophysiology because the iatrogenic basis of the disease will be more worked out, and we know that is due to an autoantibody complex depositing in the renal glomerulus and these complexes activate -- we know immune complexes activate complements.

So we think that in combination with other inflammatory renal disorders, the rationale for complement is strong and so we've initiated this study as a run-in period do the study to understand what's going on in terms of complement turnover and renal function and then they get those with patisiran for a period of time.

We're doing all this for as a prequel to expanding patisiran studies into a broader range of indications and with the proof-of-concept we hope for iCAN in hand, we indeed we'll expand to myasthenia gravis, which we’re already saying is validated setting for complement inhibition. So I hope that address some of your questions?

[Paul Matteis, Stifel]

Yeah, thanks. And on myasthenia gravis, any additional thoughts there?

[John Maraganore, Chief Executive Officer]

No, I think -- Paul I think Akshay sort of wrapped it into the last part of his question, which is simply to say that we're, obviously, interested in the -- in that indication, the validation of complement's role in that indication, not only in the eculizumab experience, but I also think the recent raw data in that regard holds encouraging results for that regard. And yes we do believe that if thesis plays out that it will be of interest to test cemdisiran in that setting. So we certainly have it in our radar, but there is no specific guidance that we're giving at this point in time.

[Paul Matteis, Stifel]

Okay, okay. Fair enough. All right. Thank you, both so much. Appreciate it.

[Operator]

All right. Thank you. And our last question will come from Terence Flynn from Goldman Sachs.

[Terence Flynn, Goldman Sachs]

Hi. Thanks for taking the question. Sorry, I jumped on late, so apologies if this is already asked. But any insights you guys can share on the ONPATTRO start forms in January versus December? And if you can't answer that, maybe can you tell us in terms of givosiran, just how much data will actually be in the top line press release in March ahead of the EASL Conference? I'm not sure how strict they are about data disclosures. I just want to understand, how much data will actually get in the press release? Thank you.

[John Maraganore, Chief Executive Officer]

Yes. Terence, this is John, let me answer both of those questions. I mean, we unfortunately can't give you any color on January, because we'll need to wait for our first quarter results. But again, we do think -- we're pleased with how is launch going, as we reported our fourth quarter and we're pleased with how it's going. So that's point number one.

Point number two on what we expect to report on the top line? Look, I think the good example of what we will -- top line is what we do with patisiran when the APOLLO data were out, which is p-value commentary on primaries and secondaries that hit without any data per se.

And then, enough safety information, certainly not tables of safety data, but enough safety information on relevant safety findings, so that investors can understand the full balance of the data. If you looked at the patisiran top line that we did in 2017, that's a good example of sort of a template that we would look to. If there's other things that emerged that we deal without compromising our presentation the whole day at EASL will consider, but I think that’s what I would guide you to look at as a good metric. Akshay, anything else to add to that?

[Akshay Vaishnaw, President of R&D]

I think it was a good job. Thank you.

[Terence Flynn, Goldman Sachs]

Okay. Thanks a lot.

[John Maraganore, Chief Executive Officer]

Good. Okay. All right. Well, thank you. Thank you. So with that, I want to thank everybody for joining us this late afternoon. We're excited about 2019 and the progress that we are expected to make. I look forward to updating you very soon, especially on the upcoming givosiran data from ENVISION. So stay tuned. Thank you everybody.

[Operator]

Thank you, ladies and gentlemen. This concludes today's teleconference and you may now disconnect.