Q3 2019 Earnings Call
And I'll be your conference call operator today.
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As a reminder, this call is being recorded I would now like to turn the conference call over to Marianne Harrison Senior director of IR for Puma Biotechnology, you may begin your conference.
Thank you Doug.
Good afternoon, and welcome to prove this conference call to discuss our financial results for the third quarter 2019.
Joining me on the call today, our Allen our.
Chief Executive Officer, President and chairman of the Board.
And maximize new guests Chief financial Officer.
After market close todays issued a news release detailing third quarter 2019 financial results.
It was really slides that Alan will referred to and a webcast of this call are accessible via the home page and investors section support website at <unk> biotechnology Dot com. The webcast presentation slides will be archived on our website.
Today's conference call will include statements about the company's future expectations plans and prospects that constitute forward looking statements for purposes of federal Securities laws.
Such statements are subject to risks and uncertainties and actually Benson results may differ from those expressed in these forward looking statements.
For full discussion of these risks and uncertainties. Please speak your annual report on Form 10-K for the year ended December 31 2018.
Subsequent documents, we file with the U.S. Securities and Exchange Commission.
You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of Thislife Conference call November six 2019.
The company undertakes no obligation to revise or update any forward looking statements to reflect you've answered circumstances. After the date of this conference call, except as required by law.
During today's call, we may refer to certain non-GAAP financial measures didn't pop adjustments to our GAAP figures.
We believe these non-GAAP metrics may be useful to investors.
Supplement too, but not as substitutes for our GAAP financial measures.
Please refer to our third quarter 2019 news release for a reconciliation of our GAAP and non-GAAP results.
I will now turn the call over to count.
Thank you Marianne and thank you all for joining our call today.
Today Premier reported total product revenue for the third quarter of 2019 53.5 million.
Total product revenue consisted of product revenue for sales of nearly <unk> net sales of near links were 53.5 million third quarter of 2019.
0.6% decline from the 53.8 million in that sales are reported in the second quarter of 2019.
I will begin with a review of some of the highlights of the quarter and then provide some more detail on the nearly as commercial activities in the U.S.
No actually motor does it will follow with highlights the key components of our financial statements for the third quarter of 2019.
In July we announced that our licensing partner in Canada nights Therapeutics received marketing authorization from health, Canada for near links for extended as you have a treatment of adult patients with home receptor positive Hershey positive early stage breast cancer. Following completion of advent trustees a map based there.
In September we announced that our licensing partner in Latin America tend to pharma received their regulatory approval in Argentina for the same indication earlier. This week, we announced at our licensing partner in Greater China can bridge received marketing approval in Hong Kong.
According to the terms Oh, the licensing agreements with all three of those entities from all the receiving royalties from a sales have never links in those territories at once they are commercialized.
In collaboration with our licensing partners, we also anticipate announcing additional regulatory decisions underwriting.
An additional countries outside of the United States in Europe , and the remainder of 2019 and in 2020.
As investors are aware in the second quarter of 2019, we presented results from our phase three trial of Neratinib in third line Hurts you positive metastatic breast cancer also known as the knowledge trial.
At the American Society of clinical oncology annual meeting in June a copy of the ask a presentation is accessible on the events and webcast page of film with web site.
Based on the results of the knowledge trial from a filed a supplemental new drug application for.
Right and Ed.
For the treatment of third line Hertwo positive metastatic breast cancer in June 2019.
Supplemental new drug application was accepted by the FDA in September and our anticipated PDUFA date is April of 2020, we will continue to keep up investors updated on our regulatory progress with this as it progresses.
In addition in September 2019 at the FDA granted orphan drug designation to interact and <unk> for the treatment of breast cancer patients with brain metastasis.
As investors are aware when the has an ongoing basket trial of Neratinib in hurt you mutated cancers referred to as the summit trial, we recently met with the FDA to discuss the regulatory path forward for the syndication and I will refer you to the slide deck on the web cast to discuss this further.
As a reminder, I'll be making forward looking statements.
On this slide the current summit basket or somewhat basket trial issue.
The meeting with the FDA focused on the two baskets that are circled in blue more specifically the her to mutated cervical cancer basket.
And the woman receptor positive hurt you mutated breast cancer basket.
First I will discuss the hormone receptor positive her to mutated breast cancer basket.
Hurt you mutations in E are positive breast cancer have been shown to occur in between 7% to 9% of your positive breast cancer patients. They tend to occur in patients who have previously been treated with multiple lines of endocrine therapy.
And it and it's been suggested that hurts you mutations maybe a mechanism of resistance to endocrine therapy.
They tend to be mutually exclusive with her to amplifications, so patients with ER positive breast cancer whoever hurt you mutation tend to be Hertwo negative.
Preclinical data has shown that an E are positive tumors that have a hurts you mutation. There is cross talk that occurs between the estrogen receptor and the hurts you mutation such that if one of these inhibited the other one becomes more active due to this we previously modified the summit trial to treat the ear positive breast.
Cancer patients with both for restaurants, which is also known as Faslodex as and isn't estrogen receptor degrader under radnet to inhibit both the E R and of the hurts you mutation.
The results, which showed an increase in their response rate and duration of response in patients receiving this combination were previously presented at the San Antonio breast cancer meeting in 2018.
We performed paired biopsies, an ear positive patients with the hurts you mutation who were treated with full desperate plus threat.
The results of this showed that although the patients where her to non amplified or hertwo negative when they started treatment. The tumor appeared to amplify the her to receptor as a way to get around the whole restaurant interacting Abdul blockade. Therefore, the tumor was switching from being hurt you negative.
To being her two positive and using the hurt you amplification as a mechanism of resistance to the Neratinib plus fulvestrant dual blockade.
Due to this we modified the summit trial to treat the E are positive patients with a combination of full that's rent plus Neratinib plus trust choose a map, which is also known as herceptin.
So that we inhibited the estrogen receptor whistles restaurant, the her to mutation neratinib and potentially inhibited the mechanism of resistance with trust to sum up.
On slide six you can see the waterfall plots for the updated interim results of the summit trial for the patients treated with no Radnet monotherapy no radnet plus four restaurant and of the combination of neurotic possible that strength plus trust choose a map. Please note that there is one patient in and around the monotherapy cohort.
And to patients in the <unk> plus pedestrian to arm that are not shown because they did not have a post a baseline target lesion available. This with the data that was discussed with the FDA during our meeting to discuss the regulatory path forward for underwriting had been this indication.
An update on this data, including more patients in the Neratinib plus for that strength plus dress shoes, a map arm will be presented at the San Antonio breast cancer meeting in December .
On this slide you can see the updated progression free survival curves for the summit trial for the patients treated with Miranda monotherapy Radnet plus four restaurant and the combination of Neratinib, plus we'll invest rent plus trust to sum up.
The results show that the median PFS for the patients treated with <unk>. The monotherapy was 3.6 months. The median PFS for the patients and then Radnet plus well, that's trying or was 5.7 months.
And the median PFS for the patients in the <unk> plus for the restaurant plus try to sum up arm has not been reached.
This data was also discussed with the FDA during our meeting to discuss the regulatory path forward for Neratinib in this indication.
And update on this data will also be presented at the San Antonio breast cancer meeting in December .
During the meeting with the FDA the F.D.A. suggested that pool to modify the existing summit trial to randomize patients to one of three arps for restaurant alone. So desperate plus trust to sum up <unk>.
<unk> I'm sorry.
That's right alone well, that's a neratinib plus four restaurants, or Neratinib, plus will vest rent plus stress to sum up.
Yes, you stated that the reason for requesting this was that they there was very little published clinical data onto the activity.
Oh, that's trend alone or Fulvestrant plus trust to sum up in E are positive hurt you mutated breast cancer.
And that this data would help to isolate in the right and its contribution to the efficacy of the triplet.
During the meeting it was discussed that since these patients have received multiple prior and current treatments. It would not be expected that full desperate alone would have much activity on its own. In addition, since these tumors are hertwo negative one would not anticipate the combination of trust choose a map plus for restaurants to have much.
Tiffany.
The FDA understood. This concern and therefore recommended the modification be structured such that uses assignment to stage design with an early stopping rule such that if indeed, the whole restaurant alone arm or the whole investments plus trust choose a map arm did not show efficacy enrollment to those arms could.
Be stopped early.
Based on this meeting whom is modifying the summit trial such that he are positive hertwo negative breast cancer patients who have a her to mutation will be a randomized to receive either fulvestrant alone. So investment plus trust choose a mab or the combination of Neratinib, plus fulvestrant plus stressed choosing that.
Each arm will initially enroll seven patients during stage, one and that's no patient in a given arm response that all will be close to further enrollment.
If the first stage if in the first stage, one or more patients respond. The cohort will then be expanded it up to 18 patients at less than four patients in the expanded arm respond that or will be close to further enrollment.
If more than four patients respond the all will be expanded and further patients will be enrolled.
Based on the feedback from its meeting with FDA.
Cool plans to schedule, a pre Andy a meeting with the FDA. After it receives the initial results from the Simon two stage trial to discuss the potential for accelerated approval of Neratinib in E are positive hertwo negative breast cancer that has a hershey mutation.
Well my anticipates that this meeting will take place sometime between the fourth quarter of 2020, and the second quarter of 2021, which is an approximately 12 to 18 months based on the meeting with FDA. The F.D.A. confirms that Puma could pull the results from the ongoing summit trial of interaction at plus trying.
To sum up plus four restaurants.
With the results from the neurotic plus trust choose a map plus for investment arm of the newly amended randomized study for the accelerated approval Anda filing.
During the meeting with the FDA Puma also discuss the data from summit for their hurt you mutated cervical cancer cohorts.
Approximately 5% of metastatic cervical cancer has a hurts you mutation it tends to occur in a do you know carcinomas and in HPV positive tumors.
Investors will remember that data from the summit trial for patients with hurt your mutated cervical cancer treated with near at the bundle therapy were presented at the ASCO annual meeting earlier this year.
This was the waterfall plot and slower plots that west presented during last year.
This data was also discussed with the FDA during our meeting to discuss the regulatory path forward for interactive in this indication.
Slide 12 shows the PFS data that was presented at the ASCO annual meeting the median PFS for the patients taking her at the monotherapy was shown to be seven months. This data was also discussed with the FDA during our meeting to discuss the regulatory path forward for interactive into syndication.
Based on the meeting with the FDA approval plans to enroll additional patients with hurts you mutated cervical cancer under the new Radnet monotherapy arm of summit.
We plan to use this monotherapy data to file for accelerated approval for this indication.
<unk> plans to schedule, a pre NDA meeting with the F.D.A. to discuss filing for accelerated approval for interactive monotherapy in hurt your mutated cervical cancer. We plan to have this meeting sometime between the fourth quarter of 2020, and the second quarter of 2021, which is an approximately 12 to 18 months.
[noise] in order to expedite enrollment in the summit study for both E are positive hertwo negative hurt you mutated breast cancer.
And hurt you mutated cervical cancer Puma plans to expand its current hurt you mutations screening trial known as her seek.
The her six trial was initiated with the goal of using a proprietary liquid biopsy test developed by Puma to screen patients with breast cancer and cervical cancer for arching invitations. This test is a low cost validated ngs based clinical trial assay, one a central lab.
Since inefficient high throughput way to screen patients for mutations.
For her to mutations who can subject subsequently be enrolled in the summer trial.
The trial was initiated in December of 2018, and the protocol is shown on the slide.
Blood samples are taken from patients with metastatic breast cancer or cervical cancer and our screened with a proprietary hurts you mutation liquid biopsy test developed by pool.
If the patient was found to have a hertwo mutation. The patient has referred to the summit trial to see if they are eligible for general.
If the patient does not have a hurt you mutation the pacing as retested three to six months later in the same exercises performed again.
The Hersey trial is currently opened at 15 sites and isn't the process of being expanded to the approximately 50 sites that are currently participating in summit.
The goal in her seek if the screen at 2500 breast cancer patients.
And 1200 cervical cancer patients, which should identified more than enough patients for the summer trial to support the accelerated approval Anda filing.
To conclude based on our recent meeting with the FDA PROMOVI modifying the summit trial to expand the hurt you mutation breast cancer cohort.
Well in continue to enroll the hurts you mutated cervical cancer monotherapy cohorts and expand Hearst seeks to expedite the enrollment into summit with the goal of conducting a pre Andy a meeting with FDA for both the hurt your mutated breast cancer and her to mutated cervical cancer indications and approximately 12 to 18 months.
We anticipate that investors may ask whether this expansion of her seek and some at trial will have a negative impact on promos expenses going forward.
My anticipates that its research and development budget will be decreasing significantly going forward.
Due to the expenses associated with the accident at trial knowledge trial and control trials declining significantly going forward as these three trials make up approximately 23% to 25% of two most current clinical research and development budget.
You mean expects that the decrease in these expenses should open up room in the research and development budget for the Hershey and summit expansions such that there should continue to be no increase in Koumas R&D expenses and that Puma will continue to see and overall decline in R&D expenses going forward.
I will now review, our U.S. commercialization progress for near links.
Just a reminder that are we making forward looking statements.
On slide three as you may recall, we have two channels that provide near links to patients. We refer to these as our specialty pharmacy channel and our specialty distribution channel or are we also refer to this as that are in office dispensing channel.
In the third quarter bottle sold into the specialty distribution channel represented approximately 21.5% total bottle sold in the quarter. This is similar to the approximately 21.8% in the second quarter.
Later in the call Maxim overview, the full financial results, but I will now provide you with the current sales numbers.
Slide four shows the quarterly net sales of near links since after FDA approval.
As I previously stated our net product sales revenue was 53.5 million in the third quarter, a 0.6% decline.
From the 53.8 million a net sales reported in the second quarter of 2019.
Although new prescriptions grew 4% sequentially in Q3 over Q2, we still saw a decline in product sales, we experienced a decline in Q3 due to two key factors.
First we have mentioned in previous calls that in the commercial setting patient discontinuations have had an adverse impact and their links revenues as patients tend to discontinued neratinib early in the treatment course, usually the first month, which greatly reduces the potential revenue per patient that we are able to achieve.
This continue to play a role in the third quarter.
As investors are also aware the current label for near links only includes data from the low purified alone arm of control and therefore, a pair of my tends to be the most frequently used anti real to prevent around and IP related diarrhea.
In the this arm of the control trial, which is shown on the slide.
Discontinuations due to diarrhea, or other reasons were 44.5% in a poster presented at ASCO in 2009 as highlighted in Red on slide five.
In 2018, Puma filed with the FDA to have the label expanded to initially include the data from they'll apparel my plus be does Tonight arm of the trial and this label expansion was approved last month.
In the data presented at ASCO. The data from this arm of the trial showed improved tolerability profile as only 20.3% of the patients discontinued or active duty diarrhea or other reasons.
From a believes that the inclusion of this.
Data in the label will increase awareness of the all apparel, my plus predestined, I'd combination, which could help to reduce discontinuations.
In addition, whom expects that the interim results of the control trial, including data on the cohorts of patients receiving a pure might alone or in combination with you bet, but that's not or coalesce default and also from the dose escalation cohorts will be published in a medical journal in the fourth quarter of 2019, as well, which Puma.
Believes will further improve the awareness of these techniques for reducing the number at the related diarrhea, and improving the tolerability of the drug.
Investors will note that the dose escalation arm of the control trial, which involve starting around about a lower dose and then increasing the dose of neratinib. During the first month. The treatment showed a low rate officially discontinuations with 13.3% to the patients discontinuing around it as shown in the poster presented at ASCO.
Since this data was presented at ASCO. This year, we've noticed that an increasing percentage of new prescriptions are starting with a lower dose of near links which we believe is indicative of patients using this dose escalation technique.
As you can see from the slide the percent of new paid prescriptions that appear to be using this dose escalation technique increased from 9% in Q2 to 18% in Q3 and has increased further 25% in the month of October .
Slide seven shows the bottles of neuron of nearly sold by quarter.
You'll notice that the number of bottle sold in Q3 declined sequentially by 2% from 4791 in Q2 to 4696 in Q3.
We believe that this may have been internet pack it by Discontinuations.
But may also have been impacted by new patients, who started and yearlings at a lower dose and therefore, it had less refills in the quarter.
The commercial bottle of near links contains 180 tablets, which are 40 milligrams. Each when a patient has given a full dose of near links at 240 milligrams, a day or six tablet today. The prescription is refilled once a month if the dose escalation technique used in control is used then they appear patient enough.
Actually starts near links and 120 milligrams per day, then has escalated to 200 milligrams per day, and then as escalated to 240 milligrams per day during the first month.
If the patient uses this dose escalation approach than the first prescription will last longer than a month as the 180 tablets will last longer than four weeks once the patient dose escalate to 240 milligrams. The refill frequency will then be once per month.
With the increase in a number of patients.
In the third quarter that use the dose escalation technique shown on the slide we may have seen initial decline in battle sold due to less refills in these patients.
However, although initially the dose escalation leads to a decline in bottle sold if indeed it decreases the discontinuation rates similar to what we've seen in control. It is anticipated. That's this will lead to an overall increase and the potential revenue per patient that we are able to achieve.
You will note on slide seven that the number of bottle sold in October was approximately 1650, which represents a 5.4% increase over the average bottle sold per month in the third quarter.
We speculate that this increase may result from patients dose escalating in Q3, two Q4 that they are refilling their prescriptions more frequently and also due to a higher percentage of patients not discontinuing near links which May also result in a higher number of bottle sold per patient.
We will continue to monitor these trends and look forward to reporting this to investors in future earnings calls.
On slide eight we are committed to making their links available to patients across the world and have also formed great partnerships throughout the world with companies, who have commercial and regulatory expertise in that region. We're pleased with the recent approvals in Argentina in Hong Kong and look for.
Forward to more this year as you can see it and slide eight.
In Europe , our partner pure far is currently planning on launching their links in Germany, the United Kingdom, and Austria, This quarter and we look forward to updating investors on that launch in the future.
I will now turn the call over to Maximo together for a review of our financial results.
Thanks Alan.
Let me start and what a quick summary of our financial results.
Quarter twinning IP.
Please note that I wouldn't make comparisons to Q2, Q1, 2019, which we believe a better indication of our progress a commercial company that year over year comparisons.
More information I recommend you referred to one would think you which will be filed tomorrow on includes our consolidated financial statements.
Well the third quarter of 2019.
Reported a net loss based on GAAP of $16.9 million.44 per share.
Our GAAP net losses for Q2 Q1 2019.
$37.4 million.
$1.1 million respectively.
So you May recall Q1, 2019, we booked $53.5 million license revenue received from our sub licensees.
God revenue was partially offset by $16.4 million health net expense.
Assault from March 2018 jury verdict against.
non-GAAP basis, we're just adjusted to remove the impact of stock based compensation.
We reported a net loss of $4.7 million or 12 cents per share for the third quarter of coding I'd.
[noise] gross revenue from their links sales was $60.8 million in Q3 2019.
So $60.3 million in Q2 20 Nike.
I mentioned net revenue from Merrill excels was $53.5 million slight decline from net sales folks $53.8 million for the second quarter of 2000 I'd.
Our gross to net adjustment in Q3 was about 1%.
I think result from the 11% that adjustment in Q2.
The increase was driven by higher Medicaid reimbursement on GP all expenses.
We expect gross in the two increased to approximately 30% So Q4 29.
Cost of sales for third quarter was $9.4 million.
Included more to say sort of milestone payments with the license are often they're out there of approximately $1 million.
Going forward, we'll continue to recognize on monetization of the milestone payments to the license or.
We're about a million dollars per quarter of coastal cells.
For fiscal year 2019.
On PC based analysis net sales will be in the range of 200 them $5 million to $210 million.
This represents a reduction versus our prior guidance.
This reduction is due to an increase in the gross to net which we now anticipate will be between 30 and 40% for the 40 or 20, Nike as well as flood revenue in Q3.
We are also taking a conservative view to Q4 to account for a possible reduction in new patient starts due to the holidays.
As well as a short term impact more patients starting Alex I don't know when folks.
Based on using the dose escalation technique.
We continue to do you see paid the Puma would receive licensing and royalty revenues from its licensing partners in that range, so $56 million to $60 million, including IP.
As DNA expenses were $31.4 million, the third quarter of 29.
Compared to $33.5 million I'm $45.5 million for Q2, Q1 2019, respectively.
<unk> expenses included non cash charges for stock based compensation $5.6 million for the third quarter of 2019.
Compared to $7.4 million, a $9.9 million for Q2, Q1 29, respectively.
Research and development expenses were $30 million into third quarter.
<unk> $36.9 million I'm 35.7 million bonus for Q2, Q1 2019, respectively.
R&D expenses included non cash charges for stock based compensation $6.6 million in Q3 compared to $8 million and they point $3 million Q2, Q1 29, respectively.
In the third quarter of 218.
Well my reported cash burn off approximately $7.3 million compared to cash burn approximately 14.3 million voters without onetime event in Q2.
$50 million in Q1, two and an IP.
We ended the third quarter of 219 with 100 on 10.4 million Bucks in cash cash equivalents a marketable securities.
Our accounts receivable spots on September 30 was $27.2 million.
Our accounts receivable times range, because then 68 days when our day sales outstanding about 42 days.
I would distribution that my thanks, approximately three weeks of inventory.
Overall, we continue to deploy our financial resources to focus on that bonds mess of Neratinib, two ongoing clinical trials under commercialization of Netflix.
Thanks, Maxim, though [noise].
We're not pleased with our third quarter revenues and recognize that we need to improve near links sales growth.
Who must senior management in cooperation with the commercialization Committee of the board of Directors continues to remain focused on near links revenues in sales and sales growth in 2019 ambient.
As was mentioned in the commercial presentation October's, but also showed an increase over the average monthly bottle sold in Q3, which we are hopeful as indicative of an improvement in airlink sales and we will continue to monitor these trends and look forward to discussing them further with investors in future calls.
This concludes today's presentation, we will now turn the floor back to the operator for today.
Operator. Thank you we will now begin ducking your question and answer session. If you'd like to ask a question. Your May press star one on your telephone keypad a confirmation Tom indicate your line is in the question Q you made press star too if you would like to remove your question from the Q4 participants using speaker equipment, and maybe necessary to pick up your handset before passing the.
Our first question comes from the line of young with Cantor Fitzgerald. Please proceed with your question.
Hey, Thanks for taking my question here I have a couple I'm. The first one could you potentially clarify the percentage of people that you kinda estimate might have gone to a titration regimen. So we can maybe perhaps put in context, how to think about October and then I'm. The second question that looking at what the math says on your fourth quarter number it would need to be 53 to about 58, I think my math is right. So.
Yeah, maybe talk about like under scenario why you have confidence that you think you can maintain kind of flat revenues from where we are today I know one might be the titration, but I just wanted to talk about other puts and takes related to that as well. Thanks.
Okay Elisa. Thank you for the question. Your first question was on what percent of the patients are using the dose titration correct.
Yeah, like a ballpark possible, yes, well, if you look and slide six of our commercial presentation, we said that 18% of the patients in Q3.
You know, we believe used to dose titration.
And 20 in Q4 for October .
As of October it was up to 25%.
Okay.
And so you just.
So that's so when you can you kind of walk us through the math to think about like how.
How you forget kind of an acceleration as you were talking about it seems like the scenario as is that people or the titration disrupted the amount bottle sold and then some possibility you get the math back on that and the fourth quarter and beyond so maybe can you just last out little bit more yeah sure. Okay. So, let's let's look at it this way right.
So.
Just using the low Paramount alone regimens from control the discontinuation rate was 45% right and we know that the discontinuations with Neratinib tend to all be pretty much in month, one or in month 12. So it's kind of a barbell right. If they may get passed that first month. They go all the way them up 12, so using that assumption in them out.
All right for every hundred patients.
If you have 45% of them just get one bottling stopped.
And the other 55 get the full year.
Right. The average bottle sold to those hundred patients is somewhere around six or seven.
If you use the Buda Tonight arm, which is a lower discontinuation rate, which is 20% and do the same math right assume 20% of them just get one bottle. The rest go the full year that takes the average up somewhere between nine to 10 bottles per patient.
And on the dose escalation using the 13% discontinuation rate from the data presented at ASCO.
Again, I assume that you get you know 13 patients who just get one bottle and stop and then assumed for the others. They're just getting 11 bottles right because they're one short because of the dose escalation that again takes you up to an average bottles of between nine and 10. So you know using that math I I can see where we can get to an increase in the average bottles.
Sufficient.
Okay, and then can you talk a little bit more about transportation relates discontinuations, perhaps in the fourth quarter. It seems like probably from kind of the middle of November December might be a challenge, but just maybe you can you talk about how you think so those might play out for you as well just based on like not discontinuation just people not going on therapy shall we say.
Yeah. So we don't notice I'm not aware of any patients like taking a drug holiday like stopping during the holidays in the are you starting in January so for continuing patients.
I don't see any disruption.
In terms of new patient starts in you know for Thanksgiving and Christmas.
Different you know regions a different sales reps, you know give us different indications some say they don't feel there'll be a slowdown some say there might be so I think we're kind of we don't have any reason to absolutely believes that we're going to see that in this Thanksgiving and Christmas we're just.
Taking a conservative route which is to assume that's correct.
And we're just taking a conservative view on that.
Okay, great. Thank you.
Our next question comes from the line of your goal nickel move it with Citigroup. Please proceed with your question.
Hi, Alan and same thanks for taking my question on are you seeing any early trends in a in the fourth quarter with respect to the a prophylactic it does tonight and on the uptake of that relative to.
The Paramount.
That is good question are you all I because of that label update was just done recently.
I have not been able to it was just done like in October I have not gotten a chance to look at that data I know.
Last time I looked at the voucher analysis, if I remember in grabbing to see if I haven't here.
Yeah.
Thought about it wasn't it.
I did yet or if you look at the vouchers you know because we have the anti diarrhea vouchers in Q3.
Other than the use of low pyramid viewed decimated was the most frequently used drugs through the vouchers.
Okay.
Got it and then with respect to I had a question on the new trial for the jumped into design for the summer trial. So I think you were saying that.
Yeah. It was saying you wouldn't expect to see a response on four restaurants and they had previously been exposed to that mechanism and then you wouldn't expect to see response on trust season that either because they were you know they want her to amplified. So I guess the question is why why did the FDA even insist on for best friend Monotherapy why not just do four vessels.
Let's try as compared to the triple.
Right right restaurant by itself.
That's that's a good question that was discussed and and you know in our meeting with them I think it was just to be able to separate the activity of all the components because clearly you know if you look at.
The the activity of the Triple you know looks very good and I think if I just wanted to get a better feel for what role each of the components was playing and so by you know I I completely understand your concern, which as you know you wouldn't really expect Sylvester stallone to have much activity and so that was one of the reasons I, we perceived that they recommended this time.
Couple of assignment to stage, so you're just exposing a small number of patients to it and if indeed, there is no signal it drops off quick.
And you limit the exposure the patients you know to what is perceived to be an inferior regimen.
Right, Okay got it and then with respect to the Oh, the finance side of the company and the R&D budget and you said you will your R&D budget with decreasing significantly with <unk> with the role of the roll up.
And that now I'm control I'm just wondering if you know if you if the revenue just sort of stay where they are at the current rate do you think you can get a cash flow breakeven just by tightening up on the off that's fine or is that not not a for consideration.
Well look obviously our goal is to grow nearer links revenue.
You've certainly seen a pretty sharp drop in our R&D expenses from Q2, Q3, and you know we're gonna obviously continue to drop that again I don't know the answer to that we haven't really modeled a the scenario of what happens if we just get to a flat revenues I don't think that's something.
We really want to EUR, one as a goal, we're obviously looking to grow them.
So I don't know the answer that question.
Okay, and then just one more you know given the recent was offered for Titan had been the metastatic breast cancer setting.
Curious to get your thoughts on how you see what no nahla trial, it's been providing differentiated option for patients and metastatic breast cancer, and where you would see roundup fitting in with respect to a continent and Oh on occasion.
Yeah, I think we aren't getting no the answer to that until we see the data a and get a better understanding for both the safety a as well as you have to see from that trial. So I don't know the we can answer that until we see the data.
Okay fair enough alright, thank you.
Our next question comes from the line Michael Schmidt with Guggenheim. Please proceed with your question.
Hey, I'm hail and thanks for taking my question I had two so one question on regarding the cervical cancer cohort or study I guess.
What what did the FDA communicated to you with respect to a potential size I'm you know a number of patients required at a minimum for a fourninety filing or FNB efiling, rather and then and you know what what sort of is the the efficacy hurdle and that in that setting.
So in terms of the cervical cancer cohorts or I don't remember any specific number being discussed with the FDA I think that it was you know somewhat in our judgment.
I'm comfortable, especially with the screening from using her seek which obviously is going to you know or find a lot of these patients to put into summit.
That will have a a comfortable number to be able to put in the S.N.D.A. a in the timeline. We're looking for in terms of the bar. If you will I don't know the answer to that I seem to remember that Keytruda got approved on a single arm study and I I'm talking off top my head here, but I seem to recall that response rate.
It was somewhere around 15% to 20% or something like that.
So I think that was that that seems to be my recollection of it.
Got to understood Alright call out fall and then.
I guess the other question that just on need a bottle volume you know the chart that you show. It I'm just curious and I know you didn't mention the a slight increase in gross to net this year towards the end of the yards on flag more so, but I guess did you notice any impact on.
Matt I suppose potentially driven by some of the price increases that that happened taken.
Oh, we have not notice any change in demand due to the price increase.
Understood.
Okay, great. Thank you for taking my questions.
Our next question comes on line of Kennen Mackay for from RBC Capital markets. Please proceed with your question.
Hi, Thanks for taking my question I would just one house keeping customers as we think about birth control trial you'd mentioned <unk>.
Second.
Pension portion.
Trial.
More than four patients.
Respond to the team did not setting this could be expanded further [noise] what would the the third expansion.
I'll be in country, how many pension.
I'm your conversation.
Might be required for registrational.
Oh Registrational package in her to you put it an apology summer summer not.
Okay, Yeah, Okay on on commercial I, just wanted to make sure I heard you correctly that prescription.
Sequentially quarter over quarter with her qualifier, but that was around and our accident and not trx and just thinking about the reduced dosing dynamic and central the monthly bottled food costs beyond a month can you help us understand trends in new to brand prescriptions, which might be indicative of new starts and whether there's a fair. Thanks. So much.
Okay. So in terms of your first question on the summit study so we'll be expanding it. So that it's you know Sylvester Stallone trust choose a map for restaurant right and it plus investment plus just isn't that.
The end is seven in the first if they if one of seven doesn't respond you shut it down if it does we expanded to a 18. So it's another 11 patients there in terms of what it expands to and what's needed for the approval for the Sndk, it's really going.
Depend on what we see and how how much the separation is I mean, you know without seeing the data on the trust who's a mouthful western or for Western alone. It's obviously challenging to see that I mean, when we can get a pretty good idea of what we think the triple It will show based on the data we have so far its.
Very challenging to say what the other two arms will show. So if there you know if they are indeed low in activity I don't think we would need a lot of patients if for some reason, we see activity or more than we expected you may need more so I don't know the answer to that but I think we're comfortable based on our assumptions.
You know that the timeline, we looked at which is kind of the Q4 2020 through Q2 of 2021 that timeframe would be enough data for us to have the pre NDA meeting with FDA.
Okay.
I found it interesting any commentary around be prescription or any clarification around the prescription commentary or your brand. So there was yes. So there was an IRS increase of 4% from a Q2 to Q3 I don't have the Trx in front of me so.
I can't answer that question.
Yeah, I don't have that date in front of me, so and I don't remember it so I can't I don't want to answer that one.
Thanks for clarifying.
Our next question comes from line of Paul Choice with Goldman Sachs. Please proceed with your question.
Hi, good afternoon, everyone and thank you for taking our questions.
My first question is you presented the slide on uncontrolled with regard to the results with with various anti diary, all strategies and I guess, Alan as if you're for Salesforce has been in the field has there been any.
Updated thoughts with on views on non loperamide utilization has any one or the other options there.
Proven or proved to be or resonate more went with commissions in the field any color. There you could provide would be great.
Yeah. So I would say that you know based on the slide you saw in our commercial deck with regards to be adoption of the dose escalation.
That that resin you know the feedback we've been getting is it resonates very positively.
And residents it very positively because a lot of physicians already do this for a lot of oral cancer drugs, where you know they'll started half a dose and kind of work work their way up for Tolerability. The second is it's very easy to implement right. It does it require another prescription to be written it's not an increase in the pill burden on the patients that they're taking you know lots of pills.
During you know multiple times a day that has definitely resonated well. So I would say I would not be surprised to see the people who were you know just using emotive them alone right to prophylactic the patient switching to using the dose escalation and remember when you do the dose escalation there's no.
Prophylaxed issues, there's no anti that real profile axis used you just use you know ammonium if you need it.
And any any utilization of any of the other agents.
In combination with dose escalation or in combination at hired a higher doses of a narrowing.
Yeah, I don't know if once the you know with nearly the.
Side effect profile.
Is that you get you know a very high incidence of grade three diarrhea in the first month, it's lower in the second month, and then by you know kind of month, three four et cetera, It diminishes greatly.
So it's really that first month or two you have to get past I'm not aware of people using the dose escalation when they do get grade three diarrhea are they just using a modi or a combination we the feedback we've tended to be getting from the field is that when they are using the dose escalation, they're just not so.
Seen grade three diarrhea, there might be seeing grade one are great too, but they're not seeing the grade three.
Okay. Thank you for that and then just on the international side, you've had some approvals and other additional contracts come online recently I was just wondering could you maybe lay out for us in the next year or so the you know any other geography is that we should be mindful of where you could see incremental.
Contributions from your partners in 2020, thank you.
Yeah. So in terms of the you know.
From a launch perspective, you know a pure far partner in Europe is gonna first launch in a the UK, Germany, and Austria, and then we'll roll out the other you know.
25 to 30 countries. During 2020, so that obviously, we'll have a a revenue AD for us in terms of new approvals a China is probably the next big one for us and I believe on the slide we gave a timing for that I remember correctly that was for sometime in the first half of.
2020, let me check that's flood real quick.
[noise] [noise], yeah, China. The first half of 2020, so that would probably be the next big one.
Great. Thank you for that sure.
Our next question comes on line of Thomas Smith from the be Leerink. Please proceed with your question.
Hey, guys. Thanks for taking the questions.
First just in terms of the prescriber base Alan can you give us a sense for how many unique physicians prescribe a prescribed nor links in the quarter and then I guess, how this is changed versus last quarter or do you still feel like you're still growing the prescriber base here.
Yes, I don't have the number of new prescribers in the quarter in front of me, but yeah, we do monitor.
Kind of new physicians, if you will and every week, we continue to see new physicians prescribing the drug so I don't think we've.
Maxed out in terms of our total number of new physicians I I don't I, you know like I said another numbers in front of me. So I can't really give any transparency into kind of how quick it's growing or anything like that but we never want a numerical standpoint, yes. It is increasing.
Okay, and then can you comment on Salesforce stability I know this was an issue I back in Q1, but I just wanted to get your sense for any changes in the makeup of the Salesforce and whether there's could've had any impact on sales in the quarter.
Oh, yes. So you know we have 80 sales reps and usually you know the averages you'll have 10% to 15% of your territories open at any at any time point currently we've got seven open positions. So we're kind of below that 10% threshold so that.
Continues to remain in the low side for US and you know, we're very pleased with that.
Right. Okay, and then one last question around off label use I was wondering if you could just give us a sense for.
How much of drilling sales are coming from either the metastatic setting or use in patients with brain Mets, just any kind of quantification around that would be really helpful.
So we see less than 5% of our sales coming from the metastatic indication and that tends to be spread across you know metastatic use not necessarily in the dollar regiment in combination with capes I'd been but they can give it like as a single agent and things like that.
We couldn't get can get use in brain Mets and then we also get off label use in the her to mutations so because we don't market that we only market. They extend that adds event, we don't get a lot of transparency and exactly or what percent of that you know less than 5%, it's coming from each one.
But I can say anecdotally speaking to physicians, we do here a lot of people using it for the her to mutations.
Okay. Thanks, that's helpful.
Our next question comes from the line of Cory Kasimov from JP Morgan. Please proceed with your question.
Hi, This is neenah on for Corey So just a follow up on prior question about prescriber base can you share what percentage of target prescribers, you've been able to reach a this quarter I think it's 75% last quarter and.
This fall on that can you also share what percentage are seeing actually convert over to prescribers.
Yes, so in terms of our prescriber reach I don't think it increased much from last quarter and again reach is defined as just we met with them wants.
That's not obviously means they're prescribers I don't have the numbers in front of me or what percent of the prescribers. We've reached have actually a you know convert it to prescribers, but as I said it it's continuing to increase.
Okay, Great and then.
<unk>.
What are you kind of seeing from you know talking about the sales force kind of turnover are you seeing I'm kind of a new sales reps that you put in place right, you're starting to get I'm, a little bit more productive what do you.
<unk> leasing there.
Yeah. That's a good question I think that what we tend to see what the Salesforce is that you know obviously when they first come on line just having someone there can help the productivity.
But you know over time, the more meetings are doing with doctors and obviously you know the more for the more active they're getting you know we do tend to see them getting more productive. So yeah I do think with the newer reps from earlier. This year, we are seeing good growth in them going forward.
Great. Thank you.
This concludes our acumen I session I'd like to turn the call back to Marianne for closing remarks.
Thank you Doug.
Thank you for your time and attention today as a reminder, this call may be accessed my replaying the webcast and from a biotechnology dotcom beginning later today have a good eat.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
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