Q3 2019 Earnings Call
Fishing simply standby.
Ladies and gentlemen, thank you for standing by and welcome to the spectrum Pharmaceuticals third quarter 2019 earnings call. At this time, all participants are any listen only mode.
After the speaker presentation, there will be a question and answer session to ask the question. During the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero.
I would now like to hand, the conference over to your Speaker, Shiv Kapoor, Vice President strategic planning and Investor Relations. Please go ahead.
Thank you good afternoon, everyone. Thank you for joining us today for spectrum Pharmaceuticals third quarter 2019 financial results Conference call.
Our our press release is available on our website www Dot SPP, Iraq start call, Joe Turgeon, our CEO and President will start the call and quite an overview followed by a natural updates from our CFO , Kurt Gustafson discussion vehicle development progress from our CMO.
Dr responsible though.
Before we get started I would like everyone to please refer to the notice.
Regarding forward looking statements included in our Intraday press release.
This notice emphasizes the major uncertainties and risks inherent in the forward looking statements that we will be making this afternoon.
These statements are not guarantees of future performance and undue reliance should not be placed on them such forward looking statements necessarily involve known and unknown.
Unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward looking statements.
With that let me hand, the call over to Joe.
Thank you she has been good afternoon welcome everybody on the call I appreciate your interest and spectrum.
Highly focused on our late stage assets, Oh, Seattle and relaunch, let me begin with updates on our progress.
Oh, the other program, which targets hard to treat patients in lung cancer in full swing.
We have a broad development program to explore some potential and are pleased with enrollment.
We are expecting results for the first cohort dizziness 20 trial.
Dr. Frost will will give me a comprehensive update our expanded program and just a few minutes.
I want this is our late stage drug being developed for the treatment of chemotherapy induced neutropenia.
As you recall, we voluntarily withdrawn daily application earlier. This year. Since then we've worked closely with the FDA and recently submitted a robust package, we look forward to competing in this market.
Let me talk about the direction I'm moving this company our focus is crystal clear, we're developing too late stage assets and expanding the pipeline.
We made significant progress and have shifted from small niche products the higher by your targets to divestiture of our legacy.
Advances in our late stage products and the acquisition.
Last for me.
We focused on our strategic priorities and we are aggressively pursuing opportunities to expand our pipeline.
Right pipeline significant near term milestones solid capitalization and a highly focused team. We're in a strong position to drive these programs for with that let me turn it over to encourage because all the financial.
Thanks, Joe.
Let's start with continuing operations.
[noise] restaurant expense for the third quarter of 2019 was 13.1 million versus 17.2 million in the previous quarter.
R&D expense was 17.2 million versus 17 million in the previous quarter.
Loss from continuing operations was 26.6 million versus 28.8 million in the prior quarter.
On a non-GAAP basis, which primarily backs out stock compensation costs are lost for the quarter was 24.5 million.
This quarter income from discontinued operations was 572000.
Relates to the commercial business that was sold to Acrodex.
As we look ahead, we continue to expect R&D expenses to increase as we expand clinical development manufacturing propose the I've never been realized.
We ended the quarter with 252 million in cash plus marketable securities, giving us plenty of runway to continue the development and commercialization of our late stage assets.
With that let me now in the call over to France water cover updates on our clinical progress.
Thanks current Hello, everyone.
I'm going to start by providing an update regarding our late stage.
Our primary focus remains investigating pose the for the treatment of exon 20 insertion mutation and non small cell lung cancer exon 20 mutations.
The most difficult sensory and currently have no ASCII approved therapy.
These patients and their physician or in critical need all the effective treatment option.
These are 20 is a comprehensive multi quarter study evaluating a broad range of lung cancer patient with specific mutation.
What words wants to for our each independently power, we pre specified sophistic hypothesis were the primary endpoint is objective response rate.
The topline results from cohorts, one evaluating always be in previously treated EG effort patients with Exxon 20 insertion U shape mutation are expected in December .
I remind you we have a world class group of clinician sign.
You are on our independent review Committee will rule on whether we met the primary endpoint a war.
On the protocol.
We expect to share this information with you in December .
Core too, which is evaluating posey had previously treated for it to patients reached full enrollment in Q2 six months ahead of schedule.
We are pleased with the enrollment for forward three and four.
Which are evaluating first line nation.
Based on promising preclinical data presented recently at were long conference in Barcelona, three new cohorts course, 567 were added to the study and are actively enrolling patient.
Oh, it's fine includes previously treated.
And treatment naive non small cell lung cancer patient, we need you have far and heard to Exxon 20 insertion mutation.
For the sake.
Lung cancer patients, who are what's the worst than in Brazil.
Core seven include lung cancer patient with a variety of an atypical mutation.
In addition, we are collaborating with MD Anderson cancer Center on an investigator led basket study now we'll be evaluating policy in various various mutated solid tumor. This study as all reenroll its first space.
We are excited about these development, especially when they will start to mature in the near future.
Now shifting to relaunch.
Relaunch. This is a novel long acting gcs that seeking an indication for the treatment of neutral area.
Patient receiving myelosuppressive cancer care.
On October 24.
Committed and expanded be a late to the FDA.
The withdrawal seven months ago was driven by molecule three or the CMC section.
Since then we've had productive dialogue with the FDA, we implemented during guidance provided additional data and reroll and reorganized certain sections of the file result, resulting in a strong submission.
As a reminder, RBL is based on robust clinical data from two large pivotal independent randomized controlled trial.
In both study Relaunches met the pre specified endpoint of Noninferiority in duration of severe neutropenia and mail met all secondary on.
The safety profile is similar to Pegfilgrastim.
Last week at the ASCO supportive care in oncology Symposium San Francisco, we presented data from both pivotal phase III trial, which included a total of 643 patient.
The analysis provided integrated efficacy and safety data to position.
Now were consistent with result from the individual study to summarize we have an exciting late stage oncology pipeline with important near term milestones on post and roll off.
Now, let me turn it back to jump. Thank you Dr. Franz one thank you Kurt let's try and I'd like to open it up for questions now operator, if you can do that.
Of course as a reminder to ask the question you want me to press Star one on your telephone to withdraw your question press the pound key.
First question comes from a leap year young with Cantor Fitzgerald. Your line is open.
Hi, Good evening, everyone is Lauren Kumar or I mean, how young I'll focus on call. What one when you pick about deregulated do you get a sense from regulatory agency that data looking a part of certain minimum duration.
And are you confident that response rate, it's not it's the only hard out that you'll get our approval.
Let me answer the first part I I want you repeat the second I didn't hear the second part, but let me answer the first part first thanks for the question. It when it comes in duration. When you have an agreement with the agency you don't get a specific number in other words, you don't get a hard number that says you have to be X amount.
The duration what it is is it is.
Clinically.
Clinically meaningful is what they give you for the exact worthy so what we after that's negotiable, depending on the unmet need et cetera, and show the word that well have to two one negotiate with the agency at the end is is it clinically meaningful or not and what was the second party question.
Yes. It was on the response rate it looks like all.
The response rates are down these criteria, but it took quite a supporting durability of along with head right if I understand correctly.
Yeah. It obviously there are three things that any drugs is gonna be looked at right first of all those your primary endpoint that happens to be overall response rate in this particular trial second would be as you said.
Duration faster than the third thing I look at as is the safety profile. The drop so that would be the three things that they would.
And maybe a second question on a if you kind of remind us or the frequency of scan a in that study and how does it compared to MD Anderson study because the Dan.
Sure so their frequency in the MD Anderson study was every eight weeks. We've introduced said this a trial a first scana or we.
And then a the second scan is that eight weeks that thereafter, it's called a week and that should help US then detecting early response and being able to document dumb.
No accurate.
Oh, Thank you very much and maybe just the last one you know once we have the data in December from go look one or how does that affect your confidence a you know for the next caller tool, which is hard to and I think the data expected mid next year.
Yeah. So see you as you remember the.
The first port Colborne.
Our independently.
All independent of one another so they have different sets of assumption for statistical test the by processes.
And so there you know winning in one.
May not influenced the other cohort and or losing in one would also be independent auditors.
I think the other thing I would add there as you know cords wanted to do with pre treated patient or previously treated but you've got to remember is as the core three and four is significantly different patient population, which is first line and obviously that's recruiting well, we're continuing to be very optimistic about.
That and also I'd like to remind you that or you know the FDA allowed us to start the treatment of treatment naive patients here and then we should we interpret that as a good sign that the they all want a weight necessarily you have the final answer on core at one is too so we're really optimists.
Think about all of them and can't wait to parent.
Cartus you want in a in December .
Oh, Thank you very much and thanks for taking the questions.
Yeah.
Thank you and your next question comes from Ed White with H.C. Wainwright. Your line is open.
Hi, guys. Thanks for taking my questions.
Yeah.
Hey, so maybe we could just start.
With the basket.
Study for Posey.
You know I know just started.
I'm just wondering if you have any ideas.
You know where the first indication will be when you're looking at the preclinical and clinical data that you have on Posey now I know you're running the basket to see where it's where where it's going to be a where do you think would be most effective but I'm. Just wondering if you have any idea right now what indications <unk> would be the.
Would be first in your mind.
Right I think we will provide you a additional indications or additional information later today I think we'd.
Hey, today that a in collaboration with MD Anderson.
Basket study as open not only open but enrolled in its first space and.
Posted yet I'm clan trial Dot Gov.
Bad debt will earn very soon but I feel that on a idled kind of want to stay anymore than that.
Okay fair enough. Thanks.
And then you know.
As I always do I typically asked about any changes in the.
Really just setting and since last time, we spoke Thursday night, another bio similar crew.
You know it's is it has anything been changing in the market or is it a is it progressing as expected annexe, though you know in and just want to get your thoughts on that.
And it's Tom Reeg, how are you.
Good Tom how are you.
Hey, the you saw the news the next Biosimilar has entered the market. We're monitoring that closely I think that market is a dynamic.
As you have another entering the bio similars into it but we remain confident as we have consistently said of having a B.L.A. filed which is not through the 351 K. pathway is a novel asked that provides us some unique opportunities as it relates to controlling their own destiny.
Those of access and reimbursement lifecycle management on the asset and we're thrilled to have submitted the BLM in October and anxiously await a that action date, so that weekend.
Ultimately get this product approved by the agency and.
Able to enter that market.
Great. Thanks, Thanks time.
And maybe coming back just fine.
C and D. Other competitor Teekay 78, you know.
We've we've seen a lot of data from both now and just want to think about you know your thoughts on how far ahead do you think youre going to be at launch and you know how you're going to position based on the data. We know now how you're thinking of positioning the drug to take Maxim.
Or could maintain maximum sure actually.
Since you're in the lead.
Yes, I'll start not and Dr. Fred slot can talk about.
Data also if you watch, but let me say this ad.
Bars positioning and I'm excited that we're turning over our card, but I just starting our our trials we've got to fully enrolled registrational.
Trials with data, which which we just said in this in December or something that card. So the first thing I'll say positioning first to market means a lot.
It through a lot of launches at first to market gives you are a great advantage here. So we're looking forward to that hit the data are good we would maybe the agency and hopefully Wow I can't speak I can only speak to ours are monitoring the other products as a good I can tell you. This I'm not surprised said that you see other potential.
Products looking at the market. This shows the unmet need they truly an unmet need here. It's a large group of patients that need help as we said like you asked about the basket, but maybe even expanding there.
So the bottom line is as you know, we'll monitor any at all other other because your products I can tell you that we have to fully enrolled cohorts and we're really happy with the three and four that are enrolling and actually following the science with remark I worked so well on well I had here I can't give any any exact h. anything other than.
I'm pleased with the possession, whereas.
Okay. Thanks, Joe.
Thank you and our next question comes from Maury Raycroft with Jefferies. Your line is now open.
Hi, everyone. Congrats on the progress thanks for taking my question.
Hi, Mark banks, where the clarity.
Hi.
Hi, Thanks for the clarity and having the data in December .
I'm just wondering if you can save the database is locked in any more granularity and whether it would be earlier or later in December .
So we're not giving you an exact date and neither can I answer winter I know that database lock remember this is the data or the central.
Imaging lab.
The process of analyzing the data and is being set when they analysis and complete is gonna be sent to an independent data review Committee mill and third aster examining conducting the analysis, but essentially asking a number of question Dan would disclosed.
Sweater and now we've met the primary endpoint.
Got it okay. It it's bar is.
For that review Board I was just wondering if you could provide any more specifics on how many people are involved in the independent review board and and what kind of questions. Good are they going to what are they going to be looking at you come up with a unified decision and what kind of questions. Good could come out of that.
Yeah. So the idea now since our pre specified in the protocol and you know there as they a statistical analysis plan that gives a lot more details or we're not going to disclose add but this is all laid out on paper. If you want as guided to the a the IDR Stephens Inc.
Independent board and they they have the ability to.
Q requests to review some of this gap as they won a and that's supported we absolutely want to be forthcoming if there's any question.
That's the central imaging lab would provide them access to whatever they want to.
Arrive at their final decision and final recommendation doing.
In summary, I'll just add you asked the whole I'll just tell you every now and.
Oncologists to deal with non small cell lung cancer I know it inside out.
Right people to evaluate the.
The outcome.
Got it okay, okay that and so they make a decision they.
Give you guys that general answer to that decision or are they going to give you. The overall response rate and additional data and then what could we.
End up expecting what could end up in a the press release or that you guys put out what kind of specific should we expect in there I guess.
Yes is there a main task is the again too.
There are detailed guidance, but there are the main the fundamental this is our recommendation day make it relates to whether or not the overall response rate, Matt the pre specified and point lower bound et cetera that wars stipulated in the protocol that's their attack that's what they.
We'll do and.
So we look forward to receiving dads and I can't remember if there was.
Another angle to your question there well you asked what the press release would say I think you said laureate, obviously, you're going to know.
Yeah, we did the primary endpoint or not the our our you'll know that.
Yes, you will know some there'll be some comment on duration and safety.
So I think you'll have.
Not all the information from the study because we want to present that at a meeting, but I think you'll have the primary endpoint than we had or not so some comment on duration PFS and our endorse at some comment on safety also I think thats a safe to say.
Perfect. Okay. Okay. And then last question is just on a block this or are you going up or do a press release wouldn't that be lazy accepted our for Lantus and then any comments on or whatever issues were addressed to give you guys competence to resubmit.
Well I'll start we will certainly let let you know when now when we have a PDUFA date I think that's safe to say.
And the second part was was what was the second part of question I'm sorry.
Just if you're providing any more clarity on.
The manufacturing issues that were drives to give you guys competence to refile again.
Hey, more it's Tom Reeg, we've not provided more detail than what was in the prepared remarks, we worked closely with the agency we implemented their guidance we.
Feel that we've we've we've learned from from their feedback and put together a strong package and look forward to look forward to that action.
Fair enough okay. Okay, what congrats again, thanks for taking my questions.
Thank you Mark. Thank you. Thank you and our next question comes from Michael Schmidt with Guggenheim. Your line is now open.
Hey, guys. Thanks for taking my question.
Maybe just a follow up on a cohort one of those seen it a study just operationally I suppose I guess, what what triggers the analysis is it a certain pre specified follow up period or is the another trigger that good but you know a trigger the actual analysis.
Yes, the a the cut off date for analysis was triggered by having a minimum six months follow up on the last patient that was answered and study.
Just a okay. If that is that follow up the same for the exon 20 hard to population at a different for that stuff for that cohort.
So it is.
You know core to what we have not a providing any indication away other than say that we would have a a.
Topline.
Data release, a midyear in 2020.
Okay.
And then a question regarding you know from flying a patient populations I know they coordthree enforce still enrolling, but I guess assuming or.
Showed you meet the primary endpoint or the endpoint in a cohort one I suppose how do you think about accessing be a the first line of my Kid longer term I guess, what type of trial designs might be.
Adequate to add to to get to to frontline excellent 20 patients.
Yeah, I think that's an excellent question actually you know obviously work on a C guidance there it's going to depend obviously on the results are we going to get and Ctwon.
And we are.
Well, a very much engage the FDA to try to understand.
You know what their expectation is then it gets changed from original.
But obviously, if it's a you know highly positive resolved and a you know we would have to discuss with the FDA.
Yes, our ethical reason when these two out of a look at the data sooner, but you know right now we can.
Well, obviously the data first.
That's great. Thank you and then just.
Maybe regarding are aligned to us, it's probably fair to assume a standard review is that correct and then you know follow up would be how do you.
How do you think about I guess, what what size or to what degree do you need to build a commercial infrastructure I guess, how will you size that took to crush less the drug in the U.S.
Yeah. It just standard Reik read you Michael that 10 month review I think that's what to expect Tom why don't you mentioned not on the Salesforce still but yes. So Michael if the the submission was the 24 hours standard review you get back into call Q4, yes.
2020 timeline typically a commercial build out six months somewhere that sooner than that when you start building out that infrastructure, we have always prided ourselves on being a lean operation when it comes to ask to ease and we will look to build an adequate yet.
Resourceful and scrappy commercial function.
But we would look to start that about six months prior.
You know Michael I'll, let you.
Mentioned this year the past I'll remind you that when we sold our online products to Salesforce along with it we did hold back some key leadership.
That that are experienced with both this marketplace and also in and putting together sales teams et cetera. So we do have I jump start on that already having people here, who know how to do that.
So Scott Thanks for taking my question.
Thanks, Michael Thank you and we have a follow up question from light with H.C. Wainwright. Your line is open.
Hi, guys. Thanks for taking the follow up there was no comments that prepared remarks on the.
Focused interferon therapeutic platform I would just wondering if you can give us say a a brief update there.
Thanks.
Sure and.
So as you know we.
We analyze says this asset.
And there was a.
I know a phase one dose escalation study that had been underway. So we have been working very closely with investigators to restart that study and.
Examine a in great detail all the the worried that had been done so far preclinical clinical.
As well as you know consider whether or not protocol needs to be amended et cetera. So there's active interaction with the when you see L.A. at this point the main label.
Licensing.
That we licenses from I believe including Pittsburgh Universal Pittsburgh before so we're we're actively working with them on the Batched first assets you got to remember there potentially more than one asset that could be derive out enough.
This platform, we know that they added we're interested in each of protein.
Preclinically and they're also I referred to as the.
You see L.A. freezer, where there are a number of drug candidate that are there and we've been strengthening our team to develop.
Algorithm to go through these assets so that we.
Picked the right ones do a file nine deal with then.
You know I create additional preclinical data.
So a lot more to come into future and so is there. There's just a lot of activity and it's an early assets. So we obviously wanted to focus on our.
Late stage asset in terms of update.
Great. Thank <unk>.
Sure.
And I'm not showing any further questions.
At this time I will now turn the call back to Joe Turgeon for any further remarks.
Yeah. Thank you operator, Hey, again, thank you to everybody I'm really pleased with our Crystal clear focus our progress an exciting time actually I am looking for turning the card alber in December and we're going to let us either but it really policy data that was from from the data from cohort one.
And at all so that was looking for that I feel today. So thank you probably have interest and we'll talk to you also.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.