New Expanded and Extended Strategic Collaboration with Biogen

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1 New Expanded and Extended Strategic Collaboration with Biogen April 20, 2018

2 On Today s Call Stanley Crooke, M.D., Ph.D. Chief Executive Officer and Chairman Ionis Pharmaceuticals Beth Hougen Chief Financial Officer Ionis Pharmaceuticals Frank Bennett, Ph.D. Senior VP of Research Leader of Neurological Programs Ionis Pharmaceuticals Brett Monia, Ph.D. Chief Operating Officer Senior Vice President, Antisense Drug Discovery and Translational Medicine Ionis Pharmaceuticals Lynne Parshall Senior Strategic Advisor Ionis Pharmaceuticals 2

3 Forward Looking Language Statement This presentation includes forward-looking statements regarding Ionis collaboration with Biogen, the therapeutic and commercial potential of SPINRAZA, and the therapeutic and commercial potential of Ionis technologies and products in development. Any statement describing Ionis goals, expectations, financial or other projections, intentions or beliefs, including the commercial potential of SPINRAZA, inotersen, and volanesorsen is a forwardlooking 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. Ionis forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause its results to differ materially from those expressed or implied by such forward-looking statements. Although Ionis forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Ionis. As a result, you are cautioned not to rely on these forward-looking statements. These and other risks concerning Ionis programs are described in additional detail in Ionis annual report on Form 10-K for the year ended December 31, 2017, which is on file with the SEC. Copies of this and other documents are available from the Company. In this presentation, unless the context requires otherwise, Ionis, Company, we, our, and us refers to Ionis Pharmaceuticals and its subsidiaries. Ionis Pharmaceuticals is a trademark of Ionis Pharmaceuticals, Inc. Akcea Therapeutics is a trademark of Akcea Therapeutics, Inc. SPINRAZA is a registered trademark of Biogen. 3

4 New Expanded and Extended Strategic Collaboration with Biogen Stanley Crooke, M.D., Ph.D., Chief Executive Officer and Chairman

5 CNS Tissues and Mechanisms Expansion of the Applications of Ionis Antisense Technology to Neurological Diseases ALS + SMA and Genetically Validated Diseases + Large Complex Diseases Like AD and PD Spinal Cord Focused Expand to Muscle and Cortical Brain Structures Broad Distribution Throughout the CNS Today 5

6 New Collaboration Achieves Ionis Goals Biogen s commitment and focus is aligned with Ionis in a relationship that is strategic for both companies Financial terms to Ionis reflect the increasing value of our technology Ionis maintains ability to work on wholly owned neurodegenerative diseases outside of the Biogen collaboration 6

7 One of the Largest Research Stage Collaborations in History $1 Billion Upfront to Ionis Biogen Makes an Equity Investment in Ionis Purchase of 11,501,153 $54.34 per share (25% premium) Significant Milestones Up to $270M in milestones and license fees per program Royalties up to 20% 7

8 We are Expanding an Already Highly Productive Partnership with Biogen Drug Indication Preclinical Phase I Phase II Phase III Registration Commercial SMA IONIS-SOD1 Rx IONIS-MAPT Rx IONIS-C9 Rx IONIS-BIIB6 Rx IONIS-BIIB7 Rx IONIS-BIIB8 Rx ALS AD ALS Undisclosed Undisclosed Undisclosed Early Collaborations: Developed SPINRAZA, one of the most successful rare disease drugs in history 8 antisense drugs have advanced into development More than 20 additional programs in late-stage research New Collaboration: Collaboration allows Ionis to build strong pipeline for both companies Expands disease scope to neuropsychological diseases and diseases of the eye and ear In total, Ionis has generated > $1.7B from Biogen 8

9 Ionis is Independently Advancing a Neurological Disease Portfolio Ourselves and Through Commercial Subsidiary Our antisense technology is well-suited to treat a broad range of diseases, including neurological and neurodegenerative diseases Drug Indication Late-stage Research Preclinical Phase I Phase II Phase III Registration Commercial Inotersen hattr AKCEA-TTR-L Rx ATTR IONIS IONIS IONIS Lafora Disease Alexander Disease Charcot- Marie-Tooth Expect to add several new wholly owned programs in the next 18 months For multiple rare neuro diseases 9

10 Webcast Agenda Topic Speaker - Welcome and Introductions Stan Crooke, M.D., Ph.D. - Key Financial Terms & Deal Structure Beth Hougen - Biogen Collaboration Successes & What to Expect in the Future Frank Bennett, Ph.D. - Conclusion Stan Crooke, M.D., Ph.D. - Q&A Speakers + Brett Monia, Ph.D. and Lynne Parshall 10

11 Ionis and Biogen Embraced Innovation Early On With the Development of SPINRAZA Approved in global markets for the treatment of spinal muscular atrophy (SMA) First Ionis drug to alter splicing First Ionis drug dosed intrathecally in many patients First Ionis drug dosed in children and infants In 2012, SMA disease had never been treated and the clinical path was uncharted Collaborative efforts of Ionis and Biogen resulted in landmark advancement in the treatment of SMA 11

12 Ionis Strategy has Created a World-Class Neurological Disease Pipeline Focused initially on genetically validated targets like SMA and HD Intrathecal dosing with antisense drugs Expanded to larger more complex diseases like AD and PD Antisense Technology Proven to be well tolerated and broadly distributed throughout the CNS Dedication and commitment from Biogen Innovation in developing drugs for challenging neurological diseases 12

13 New Transaction is Strategic for Both Ionis and Biogen $1 Billion Upfront $500M technology access fee for neurological diseases and a $500M purchase of Ionis stock Significant Milestones and Royalties up to 20% Up to $270M in milestones and license fees per program Biogen is Responsible for, and will Pay for Development and Commercialization All of the payments to us after we identify a drug are entirely profit 13

14 Key Financial Terms & Deal Structure Beth Hougen, Chief Financial Officer

15 Deal Structure of the New Biogen Collaboration Option transaction: Ionis provides Biogen option to license drugs at a future date Milestone payments: Ionis receives payments for the value created in moving drugs forward in development Term: 10 years to identify targets to enter drug discovery Option Timing: Ionis to identify drugs to enter development Biogen to conduct all development activities Biogen s option to license a program is triggered after their completion of IND-enabling studies 15

16 New Biogen Collaboration Achieves Ionis Partnering Goals $1 billion upfront payment $500M to access our technology for neurological disease $500M for fair market value of Ionis stock Substantial payments for each program Up to $270M for each drug that successfully gets to the market Tiered royalties from the mid-teens up to 20% Biogen conducting all development and commercial activities Ionis benefits from Biogen s neurological disease and commercial expertise Represents a significant investment in our technology and pipeline by Biogen 16

17 Increased Economics of New Collaboration Reflect the Increasing Value of our Technology Previous Biogen Collaboration (Sept 2013) New Biogen Collaboration (April 2018) Upfront payment $100M $1B* Research term 6 years 10 years Option timing Clinical proof-ofconcept Completion of INDenabling studies Additional payments per typical program $230M $270M Royalty rate Low to mid teens Mid teens to twenty *50% for Ionis stock at fair market value 17

18 $M The Biogen Collaborations Have Been Financially Successful Total Revenue from Biogen $300.0 $250.0 $200.0 $150.0 $100.0 $ Year 18

19 Impact of New Biogen Collaboration to Ionis Future Financials ~$2 billion of cash ~$50 million per year in amortized revenue from upfront technology access fee ~$100 million per year in milestone and license fee revenue Potential additional royalty revenue added to growing commercial revenues and R&D revenues Collaboration revenue goes straight to bottom line once Ionis identifies a development candidate 19

20 Increased Financial Strength Provides Ionis with Great Business Flexibility $1 billion up-front and substantial payments over time enable Ionis to: Broaden our portfolio, retain our drugs longer, and grow our pipeline in all therapeutic areas Invest in commercialization of drugs through commercial affiliates (i.e., inotersen to Akcea) Create shareholder value with strategic capital investment strategies 20

21 Collaboration Success & What to Expect in the Future Frank Bennett, Ph.D., SVP Research

22 The Ionis/Biogen Relationship has Been Highly Productive Developed and commercialized SPINRAZA Progressed 8 neurological disease drugs into development Forged productive joint working teams 22

23 The Opportunity in Neurological Diseases is Very Broad Broad opportunity regardless of the disease cause Genetic (e.g. SMA) vs sporadic diseases (e.g. Parkinson s disease) RNA (C9orf72) vs protein (Tau) Broad opportunity for a variety of neurological diseases Motor neuron diseases (e.g. ALS) Cognitive disorders (e.g. Alzheimer s) Movement disorders (e.g. Parkinson s, Ataxias) Neurodevelopmental disorders (e.g. Angelman) Broad opportunity to exploit different antisense mechanisms Reducing protein expression (RNase H) Changing protein composition (Splicing modulation) Increasing protein expression (Enhancing translation) 23

24 Ionis/Biogen Partnership has Demonstrated Broad Value in Neurological Diseases Drugs Indication Current Phase Next Step IONIS-DMPK Rx SMA DM1 Approved Terminated after Ph. 1/2 IONIS-SOD1 Rx ALS Ph. 1/2 IONIS-MAPT Rx Alzheimer s Disease Ph. 1/2 IONIS-C9 Rx ALS PC Continued commercial success Looking for new more potent ASO Report data (early 2019) Report data (2019) Initiate Phase 1/2 (mid-year) IONIS-BIIB6 Rx Neurodegenerative Disease PC Initiate Phase 1/2 IONIS-BIIB7 Rx Neurodegenerative Disease PC Initiate Phase 1/2 IONIS-BIIB8 Rx Neurodegenerative Disease PC Initiate Phase 1/2 Neurological Diseases >20 additional research-stage programs, including programs for Parkinson s disease and Angelman syndrome 24

25 Ionis and Biogen Have Complementary Expertise in Neurological Diseases Biogen Expertise and large investment in the neurological disease space Ionis Expertise in RNA-targeting therapies including antisense technology Biomarker, endpoint innovation, and expertise in natural history studies Great efficiency and speed of our technology to deliver drugs Drug development expertise and proven commercial success Antisense delivers highly selective drugs with excellent safety profiles Our collaborations with Biogen have progressed 8 drugs into development in only 6 years 25

26 SPINRAZA is the First Clinical and Commercial Success Stemming From the Ionis/Biogen Relationship Ionis, in collaboration with Cold Spring Harbor, conducted the research identifying SPINRAZA Ionis conducted drug discovery and development, Biogen commercialized SPINRAZA SPINRAZA has transformed the treatment of SMA We are working with Biogen to discover a nextgeneration SMA drug to increase therapeutic options for patients 26

27 SPINRAZA is Approved For All SMA Patients 36 months 20 months 7 weeks SPINRAZA Treatment Initiated Children and adult patients appear to benefit from SPINRAZA 27

28 Cumulative Sales ($ M) SPINRAZA is One of the Most Successful Rare Disease Drug Launches in History 900 YTD SPINRAZA sales of $884M as of 4Q:17* Orkambi SPINRAZA Kalydeco Avonex Cinryze Soliris Launch (Quarters) *As reported by Biogen Note: Sales data obtained from Biomedtracker or Company SEC filings 28

29 We Expanded our Work with Biogen in Motor Neuron Diseases to ALS Severe, rare disease characterized by progressive muscle weakness and respiratory failure Fatal within 2-5 years Amyotrophic Lateral Sclerosis (ALS) SOD1-ALS is a familial form of ALS No drugs that significantly slow disease progression Ionis/Biogen ALS Programs IONIS-SOD1 Rx Phase 2 IONIS-C9 Rx Entering clinical studies in 2018 Additional targets for ALS currently in research and early stage development Biogen has a strong commitment to ALS 29

30 Alzheimer s Disease is Also a Large Focus of the Ionis/Biogen Collaboration Alzheimer s Disease Overview Severe, progressive neurodevelopmental disease Cause of disease is poorly understood Large patient population that requires large scale development programs No drugs stop or reverse disease progression Ionis/Biogen Alzheimer s Programs IONIS-MAPT Rx Phase 2 Additional targets for Alzheimer s currently in research and early stage development 30

31 Ionis and Biogen Have a Broad Portfolio of Late-Stage Research Target Opportunities Parkinson s Disease ~1.4M patients Spinocerebellar Ataxias ~76k patients Angelman Syndrome ~20k patients >20 additional neurological disease programs are in the research phase 31

32 Ionis and Biogen Aim to Accomplish Even More in New Collaboration Discover and develop more drugs like SPINRAZA Explore new targets and treat more diseases Tackle many more rare monogenic neurological diseases Continue to grow an already successful collaboration Further strengthen the collaborative and strong joint R&D teams Advance more drugs into development 32

33 Ionis is Independently Advancing a Neurological Disease Portfolio Ourselves and Through Commercial Affiliate Our antisense technology is well-suited to treat a broad range of diseases, including neurological and neurodegenerative diseases Drug Indication Late-stage Research Preclinical Phase I Phase II Phase III Registration Commercial Inotersen hattr AKCEA-TTR-L Rx ATTR IONIS IONIS IONIS Lafora Disease Alexander Disease Charcot- Marie-Tooth Expect to add several new wholly owned programs in the next months For multiple rare neuro diseases 33

34 Closing Remarks Stanley Crooke, M.D., Ph.D., Chief Executive Officer and Chairman

35 Expanded Collaboration with Biogen is an Important Strategic Step for Ionis One of the largest partnerships that Ionis has ever executed One of the largest research-stage partnerships in the pharmaceutical industry Provides financial strength to advance and broaden our portfolio and retain our drugs longer Enhance our ability to make strategic investments that we believe will increase shareholder value 35

36 Ionis is Continuing to Advance Industry-Leading Neurological Disease Franchise 1 1 Inotersen 4 6 Highly Successful Neurological Drug on the Market SPINRAZA One of the most successful rare disease drug launches in history Neurological Drug Under Regulatory Review Potential to transform the lives of patients with hattr Neurological Drugs in Development IONIS-HTT Rx (RG6042) IONIS-MAPT Rx IONIS-SOD1 Rx ATL1102 Neurological Drugs in Preclinical AKCEA-TTR-L Rx IONIS-C9 Rx IONIS-BIIB6 Rx IONIS-BIIB7 Rx IONIS-BIIB8 Rx IONIS-DNM2-2.5 Rx More than 20 wholly owned and partnered drug discovery programs For Alzheimer s, Parkinson s, ALS, pain and multiple rare neurological diseases 36

37 Key Upcoming Milestones in Drugs Potentially On the Market SPINRAZA KYNAMRO Inotersen Phase 2 Readouts AKCEA-APO(a)-L Rx AKCEA-ANGPTL3-L Rx IONIS-DGAT2 Rx Phase 2 or 3 Initiations IONIS-STAT3-2.5 Rx IONIS-HTT Rx (RG6042) IONIS-GHR-L Rx Volanesorsen Plazomicin IONIS-HTT Rx (RG6042) IONIS-SOD1 Rx IONIS-PKK Rx IONIS-FB-L Rx IONIS-AR-2.5 Rx IONIS-KRAS-2.5 Rx Multiproduct, profitable company delivering innovative medicines to patients 37

38 Revolutionizing Medicine. Saving Lives.