Q4 2019 Earnings Call
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Thank you for standing by welcome to the spectrum Pharmaceuticals for Q2 thousand 19 earnings Conference call. At this time all participants are in a listen only mode. After the speakers presentation there'll be a question and answer session.
That's a question during the session you need to press star and the number one on your telephone keypad.
If we require any further assistance, please press star and the numbers zero.
I'd like to hand conference over to your speaker today, Mr. Shiv Kapoor, Vice President of strategic planning and Investor Relations. Thank you. Please go ahead Sir.
Thanks.
Good afternoon, everyone. Thank you for joining us today for spectrum Pharmaceuticals fourth quarter and full year 2019 financial results Conference call.
Our press release is available on our website at Www Dot S. P. P I already dot com.
Joe Turgeon, our CEO and President will start the call and provide an overview followed by a mental update from our CFO, Kurt Gustafson under discussion about clinical development programs Marci animal Dr. Francois all about.
Before we get started I would like everyone. Please refer to the notice regarding forward looking statements included in todays press release. This no just noticed emphasizes the major uncertainties and risks inherent in the forward looking statements that we will make this afternoon.
These statements are not guarantees of future performance and undue reliance should not be placed on that.
Such forward looking statements necessarily involve known and 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.
And the fall over to Joe Turgeon CEO sector.
Thank you she had good afternoon. Thank you for joining us today I appreciate everybodys interest the spectrum.
We remain highly focused our late stage assets will want to impose yet so let me begin with the updates on these programs.
Well I want this is our late stage drug being developed for the treatment of chemotherapy induced neutropenia.
We submitted our delay in October of 2019, and it was accepted for filing with the PDUFA date of October 24 2020.
If approved for a lot this could be the first novel granular side colony stimulating factor available health care providers get over 15 years.
Yep competition, a future launches and are looking forward to potentially competing in this multibillion dollar market.
Our launch preparations for a lot just are actively underway.
The PDUFA date approaches will accelerate our commercial build out and I've already put key leadership personnel in place.
Our plan is to launch with a with a lean yet effective commercial infrastructure.
To maximize the impact of a lot.
We're closely monitoring evolving market dynamics and continue to believe that launching a novel assets, which will benefit patients our customers and our shareholders.
Beating in this market is a significant opportunity for our company and we'll be ready to go.
Our other late stage clinical asset owes adnan targets hard to treat mutations in lung cancer.
Results from the first cohort dizziness try to 20, trying [laughter], which were announced in December were disappointing.
While the response rate cohort one in this trial was lower than we expected the positive signals that we observed provides support for the continued clinical evaluation opposed yatin <unk> in this patient population was significant unmet medical need.
Dr. Labelle, well give you a comprehensive update the current status the Posey clinical program later on the call.
Ventures focus is on the development of too late stage assets and expanding the pipeline.
Last year, we made significant progress in trends transitioning the company and now completed the ship from small niche products to higher volume targets do divestiture or legacy assets advances in our product development pipeline and the acquisition of the fit platform.
As I think about 2020, we are well funded.
We're preparing to launch a product into the biggest market and the company's history.
We have multiple data catalyst.
And we have to development talent to realize the promise of our current assets. Additionally, we're seeking new business development opportunities that will complement our pipeline.
But then I'm going to drive it occurred to cover the financials.
Thanks, Joe.
Let's start with a review of our continuing operations all rescuing expense for the fourth quarter of 2019 was 15.1 million versus 16.6 million the previous year.
R&D expense was 23.3 million versus 29.9 million in the fourth quarter of 2018.
Our net loss for the quarter from continuing operations was 40.2 million versus 53.1 million in the comparable period of 2018.
On a non-GAAP basis, which primarily backs out stock compensation costs, our loss for the quarter was 33.4 million.
As we prepare for the launch were a lot. This we would expect to see an increase in arresting any expense in the second half a year.
Well, we have the key leadership positions in our commercial organization already on board, we will be hiring our sales team in the back half of this year.
We ended the quarter with 224 million in cash plus marketable securities.
This is down 28 million from the prior quarter.
This cash balance gives us plenty of runway to continue the development and commercialization of our late stage assets.
With that let me now hand, the call over to Francoise to cover update on our clinical programs.
Thanks for.
Everyone.
Just started by providing an update regarding our late stage had said prolonged which is being actively review.
Ron This is a novel long acting granulocyte colony stimulating factor seeking an indication.
The treatment of neutropenia in patient receiving.
Hello, suppressive cancer chemotherapy.
In October of last year, we submitted an updated delay to the FDA.
Which the agency accepted for review with E. P. Dumb enough for the date of October 24, 20 Twond we.
We are working closely with the FDA as it conducts its review of our BLE.
The delay is based on robust clinical data from two large pivotal randomized control trial.
In both studies Relaunches met a pre specified endpoint of non inferiority and duration of severe neutral easier and met all secondary endpoint. The safety profile was similar to peg filgrastim.
In October last year, we presented the phase three data for Relaunches I'd ask go supportive care in oncology symposium.
In San Francisco. These two trials together enrolled 643 early stage breast cancer basis.
The analysis provided integrated.
Because the in safety data that were consistent with results from the individual study.
Can you remind you.
That the relaunch. This development program continues I am pleased that an abstract with preclinical data looking at same day dosing in our role model. It's been accepted for presentation at the upcoming HCR in April.
Now shifting gears, we are continuing to investigate close you often it for the treatment of exon 20 insertion mutation in non small cell lung cancer exon 20 insertion mutation are among the most difficult to three.
These basin in their position are in search of the first effective treatment option and there are no approved therapy for this indication.
Zenith wanting is a comprehensive multi cohort study evaluating a broad range of lung cancer patients, which specific mutation.
As we announced in December the topline results from Zenith 20 cohorts one.
Valuating policy in 115 previously treated each year for our patients with Exxon 20 insertion mutation.
Not achieved the primary endpoint of objective response rate.
Patient in this quarter received 60 milligram per day oppose yeah.
The in tend to Threeq analysis showed that 17 patient how do you formal or is this response and 62 patients had stable disease for a 68.7 disease.
68.7% disease control rate the confirm objective response rate or or or was 14.8%. The median duration of response was a note worthy 7.4 months. The safety profile was in line with the type of adverse events.
Seen with others second generation.
Did you have far tyrosine kinase inhibitor.
The study did not meet the primary endpoint the days or show that the drugs as real biologic activity that merit further investigation. The analysis shows that about two thirds of the patients had temporary dose interruptions and two terror and dose reduction these.
Data also indicate that patient who stayed on therapy at a better response rate. So we are examining ways to win in the ability of patients to stay on their assign dose for longer duration.
We will be providing additional insight at a podium presentation at the 11th annual Congress on pull that Mary Anne Spiritthree Medicine in Amsterdam.
On March 18.
Following the presentation, we plan to provide an update to investors on the program in summary drug development is primarily a straight line. We are applying the learnings from coal <unk>, one and taking decisive action going forward.
Let me remind you that seen its one thing is the study with multiple independent core.
Core too it's been fully enroll and is evaluating policy in previous leaks read it brings to patients. We expect topline results will be available for this cohort mid year Coordthree is nearing full enrollment and we'd expect results from this cohort by the ended the year.
We look forward to sharing more information on this program after our presentation in Amsterdam.
Now I'll turn it back to joke.
Thank you Dr. Franz slot and before I shift to the Q when I asked something especially the talk about I'd like to take the opportunity. The fact shift the floor for his many years of dedicated service the spectrum.
Jim is going to be leaving spectrum to pursue some entrepreneurialism activity then.
He's provided great contributions to this organization.
And I get a dire he's been a great friend, he's a great person a great dad I said at a lot of fun to be around besides me a very knowledgeable he's gonna be missed and we wish you continue to exceed success and all your future endeavors. She has been I really appreciate all you've done and personally thank you.
So with that let's open the line progress.
As a reminder to ask the question you'll need to press Star then the number one on your telephone keypad.
I would draw your question press the pound Keith please standby, we compile the culinary roster.
And your first question comes from me Murray Raycroft with Jefferies.
Hey, Mark.
As far as seen on for Mark.
Oh, the Christmas regarding that there's any 21 data heavy heavy tends to outdoors reductions impacted.
And yes, the read out heavy shortened the least stuff.
Contributed.
Yeah, Let me first start by saying that and on the 18th when we have after the presentation. The data were presented in great detail from cohort one and then after what we'll do is we will have a and investor call will go over the data itself and also our strategy moving forward Dr. Fred slot I don't know if you'd like.
I had anything to that.
Yeah, well good question as I mentioned in my.
Formal remarks, there that are patients who were able to stay on drug.
Longer at a better response rate the detail around that will be present, a in Amsterdam at the a lung meeting so what you'll have unfortunately, you'll have to wait a little bit more few weeks before you get the full story.
Hi.
And for the second one is what if the buyer for success in high <unk> between non small cell lung cancer and how much to retrieve that from a cohort one and if there's any plans to make changes.
I think they increased the cats [laughter].
You're breaking up a little bit the question, we couldn't hear them, especially the first part of the question we couldn't hair.
What does the buyer for success in hard to 20.
And how much read through these there.
Anything any plan the changes increased [laughter].
So as you know we we haven't given your there is also the study in terms of response rate of for 14.8% we have not disclose publicly.
What the bar was as you know there are many other drugs and develop and then we think it's a it's an <unk>, resulting in negotiation with the FDA and we are now disclosed publicly that and also we have other called <unk> that are maturing right now so.
So that that's confidential at this stage.
So I wouldn't say that apart.
The parts for the bar I'm, sorry that was there any other components your question.
Basically how to make any changes to increase chances of success.
In the cohort two based on the cohort.
Well cohort two is fully enroll okay. So well just awaiting the maturing of that data by mid year, we'll be able to show you exactly where the dataset again, we can't tell you what the outcome is till we see it it's a different patient population. So we just don't know that its exon 20 in her to refractory.
And so there's nothing we can do and I'll remind you that cohort three is almost fully enrolled and well have that data late this year. So there's really nothing you do but again on on that call. We have any 18 I'll remind you. Besides the data we will go through our strategy and what we can do going forward.
Thank you.
You're welcome.
And our next question comes from a May Yank from B. Riley.
Hi, guys. Good afternoon to keep the hotel neon Burma and appreciate the update just a couple of brief questions from me I'll first of all.
Very good belonged to launch preparations to discuss <unk>, Eddie and besides you've guided to in terms of given the fact that will be a mean salesforce, what it'll be targeting cetera.
Yeah, Tom why don't you take that.
Very much appreciate the questions in our preparations are well underway and we are really enthusiastic about the opportunity to launch into this market and I think are the platform for launch really comes down to four things in the first when you hit on which is customer focus I think how we target segments. This market is really contingent.
On our success each of the segments of this space behaving are motivated by different things. So we are spending a lot of time studying the different segments of the business and how we will go about approaching the market in that light like the second thing that we are spending and good at a time looking at is patient access whether that be.
Through the various stakeholders a war health care cost for patients are always a concern and having a patient access program that enable support for patients as a really important component to launch I think thirdly is supply and we are confident in the supply that won't.
Into the market.
Fourth is really the customer connectivity that the field force that we're putting on the field will inevitably have so I think in summary, we are feeling really good about our proposition of competing in a very large market and are anxiously awaiting the opportunity to do so.
Great appreciate the color and maybe another question regarding once it's done just any additional sort of incremental color you can provide on the abstract that they see are and how you think about the implications in the clinic those same day dosing.
Yeah listen the abstract has been accepted we read you know we can't go into the data there's embargo on that and you can't really talking about that so much of what you're watching the abstract it has been accepted deal and it will at that time, we can discuss the other data that's in there.
Okay understood and looking forward in the presentation on the 18, so thanks for taking my question.
You're welcome thank you.
And our next question comes from Hawaii, So young from Cantor Fitzgerald.
Hey, Libya.
Yeah.
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No.
Just.
Okay.
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Uh huh.
HM.
Oh.
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So you see a proud to a good to a of your question. So we have not disclosed any communication with the FDA a week there is a interaction on ongoing basis and a as to the enrollment we.
Or would you enrollment we're satisfied with the enrollment and actually we.
Stated previously that in spite of the missing the primary endpoint in cohort one enrollment continues to be very strong and request for drug continues to be very strong. So investigators condition continue to be very interested in dosing patients.
They clearly remain excited in spite of the primary endpoint all investigator that we've showed the waterfall plot and as you've seen it.
I remain very convinced that there's real activity there.
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Okay got it thank you.
Thank you.
[laughter] and our next question comes from Ed right.
H.C. Wainwright.
Oh it.
Hi, guys. Thanks for taking my question and before I ask I just want to thank you as well for a while all the years of help that he has given me.
I really appreciate it and I wish you a lot of success in the future.
Exit.
You're welcome so I'm just a question on Posey the basket trial was initiated at MD Anderson or is this trial is going to continue or has there been any change to the status that trial.
Yes.
Absolutely correct and or the basket trials continue obviously, our emphasis is on the pivotal aspect of the three cohorts in our lung cancer trial, but we absolutely continue and are interested in pursuing a basket study.
Okay. Thanks.
And then just on you had mentioned cohorts to win three is there any update on a cohort for.
It continues to enroll I maybe is the reason we already mentioned forward two and three is because simply to remind you of course is fully enroll and as you know according to what that 60 milligram coordthree and for a boat that 60 milligram as well and coordthree nearly completely under.
<unk> and core the floor is a first line heard to.
It's not a de genetics of that are now into the primary panel that clinician do.
With the derivation. So therefore, it takes a little longer to recruit that corn, but there continues to enroll well.
Okay. Thanks, and then.
Just a you didn't mention that fit platform I know, we're expecting a enrollment does 20 patients from the phase one trial and non Hodgkin's lymphoma I'm. Just wondering if you can give any any update on the status of that trial.
Yes, the the status does not change we continue through you know, we're very close it would be investigator involve ER and the FBI being or the you usually dr. timmerman. So we continue to review data I look at the data within two.
Make sure we have full understanding of the Oh the platform and a we are working very aggressively with them to a restart you know there was no clinical area. The pre the Priory company I'd round or round out of fun and there was.
No regulatory or clinical reason to delay enrollment and we are simply are going through the regulatory process of reactivating. The trial in well have an update for you later in the year as to what to expect.
Okay, Thanks, Francoise and incurred or maybe just a question for your life.
Okay. Thank you for the for the S. DNA guidance commentary I'm just wondering if you can have any comments on excuse me.
R&D expense in 2020.
Yeah and at this point, we're we're not giving any specific guidance on R&D expense lot of this is a function of when we buy a.
Material, you know our accounting practices to as we buy Precommercial inventory, we extend that is R&D expense. So I don't have any specific guidance on on that for you, but I think you'll you'll agree that a ending the year with $224 million in cash gives us plenty of runway to can you continue to develop.
And program and the commercialization of relaunch.
Yeah that was my next question. If you were could give any guidance on how long that paschal asked what would what your runway what you think you're only yes.
He's isn't the only the only guidance I would give you add is you know so the any balances to 24, we burn 28 million in the quarter. If you take a look at the last couple of quarters were in that sort of $30 million range. So you know, we do expect us unique expense increase a little bit in the second half of this year, but but I think if you take a look at the trend.
You know our balance should provide us plenty of runway.
Okay. Thanks, Kurt.
Sure.
Our next [laughter] and our next question comes from Michael Schmidt of Guggenheim.
Hey, guys. This is Charles do on for Michael Schmidt, Thanks for taking the questions.
One quick one here to what degree would you say that some of this dose interruption or you know the learnings from the dose reduction from cohort one might be potentially applied to ongoing I guess cohorts that or not quite yet matures such as three or four for example.
Got very good question like what's now Michael right. You said is Charles Haff, Okay terrific. So.
It's like I said, there is and you know I can't really giving it that much detail today, because it's got to be presented in Amsterdam, but what we have noted is clearly that patient its key that patient I have to be.
Kept on drug dose interruption or dose reduction may.
Impact the response rates. So we are looking very aggressive laid to to improve the ability to keep patients on drug in a in Amsterdam will will disclose them. What we have in mind here as well as provides a data. So that you can really see the correlation between.
We if a patient was the I had a drug interruption or not I just want to clarify your that drug interruption mean temporary stopping the drugs for for example, and adverse event and it's not permanent interruption of the drug we have disclosed previously that.
Permanent drug related Oh.
Permitted a drug.
Discontinuation once of the order of 10%, what we're talking about two years short interruption in dosing for allowing and helping to patient to recover from any and they get back on drug and they continue.
So hopefully that answers.
Great. That's helpful. Thanks, and I might've missed this one a bit earlier on on a lot to send the new last a long I can G CSF market, but how do you see the trajectory of a unit price or overall market opportunity erosion continuing for this market and I guess to what degree would you expect such trends from.
Other markets, such as neupogen or Remicade to kind of repeat within just the last a market.
Oh, you I think a child, we're watching this pretty closely so I think the way to think about it is if you look at amgen's.
Average selling price the bio similar pricing is in the range between five and 13% decline off of the average selling price. So you do see market erosion, but it's behaving more like a competitive branded space than that of the generic so I think when you're when you're looking at this market today. It sits now.
North of $3 billion well prior to Biosimilar.
Entrance it was sitting in for so there definitely is erosion, but we see this as the biosimilar and trends have done a few things one they've shown an ability to compete they currently have north of 25% of the market and to date, the pricing has been rational and the rate of decline.
Is that although competitive branded space first that the generic so as we look at the launch trajectory of the losses in the market that we will be launching into it will no doubt be competitive, but having a novel asset that enables you to control your own discounts your own pricing independent of any of the other.
Behavior in the market certainly will be an advantage for disaster that in our ability to do compete within the space.
I hope that answers your question.
Got it thanks.
[laughter] and there are no further questions at this time and I'd like to hand, the call back over to Mr. Joe Turgeon.
With no further questions I, thank everybody for their interest I again, thank and wish you actually have well and I appreciate it bears interest at the end the call. Thank you very much.
Ladies and gentlemen, this concludes todays conference call. Thank you for participating or you may now disconnect.
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