Q3 2020 Sesen Bio Inc Earnings Call
Third quarter Twentytwenty business update conference call.
This time all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that todays 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 today Ms. Erin Clark. Thank you. Please go ahead Madam.
Thank you and good morning, everyone welcome to our third quarter business update call.
On today's call, we will discuss our operating results for the third quarter ending September Thirtyth 2020.
Love an update on the progress of studies related to assessing analytical compatibility between clinical batches of Vicinium and commercial material, which is a key component of completing module three and finalizing the reality submission.
Joining me on today's call are Dr., Thomas Kehl, President and Chief Executive Officer, Dr., Chad you executive director of supply chain and Monica Ford, Our Chief Financial Officer.
Earlier. This morning, we issued a press release outlining some of the highlights that maybe covered on the call today, the press release and the slides to which we will look for are available in the investors section of the company's website at second by <unk> Dot Com I.
I would like to remind you that today's discussion will include forward looking statements relate to the company's current plans and expectations, which are subject to risks and uncertainties.
Actual results may vary materially due to various factors, including those described in fact since I was most recent annual report on form 10-K quarterly report on form 10-Q, and other SEC filings. These statements represent second bias view as of this call and should not be relied upon as of any future date.
<unk> undertakes no obligation to publicly update these forward looking statements.
With that I'll hand, the call over to.
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Thank you Aaron and good morning, everyone. Thank you so much for calling in and participating in our business update today.
Please turn to slide three which is a summary of the three key takeaways for our call today.
First the seen him has a unique and compelling value proposition, especially when it comes to its potential to save and improve the lives of patients.
Second we believe we have a clear regulatory path forward in both the U.S. around Europe, we are highly aligned with the regulatory agencies and we feel confident our analytical comparability data.
Finally, given a substantial unmet need in bladder cancer and a highly differentiated clinical profile of the city and we protect a significant global commercial opportunity.
Turning to slide four we always start with the patient journey for bladder cancer and remind ourselves what a long arduous tumbling journey patients phase.
It is important to see the unmet need through this lens in order to understand why prescribing physicians strongly prefer the sarnia versus other available agents.
Then looking at slide five I want to thank the stuff and bio team for their execution excellence, even in the face of the pandemic in many other obstacles.
I also want to remind you of our investor relation strategy, which is to tell you what we're going to do execute those plans flawlessly and then tell you. What we did if you're signed up for email alerts you received an email with an 8-K filings or press release, each time one of the amounts on this slide occurred.
And even though the last two years have been very exciting and productive we expect an acceleration of news and progress in late 2020 and into 2021, it's a very transformative time for the company.
Turning to slide six I would remind you of the strong efficacy data for the primary endpoints of complete response and duration of response.
And remind you of our very strong safety profile on the right hand side of the slide.
But we believe what really differentiates the saying it was its potential to significantly delay the time to radical stuck to me along with the favorable overall survival data in the N. those benefits make a huge difference to the lives of patients and lead to the strong advocacy of payers and physicians.
Please turn to slide seven and I'm wondering remind you that since we started the obsidian program. We have had frequent high quality meetings with the FDA just last year, we had for face to face meetings to take the into type C.
We've been working closely with the FDA and the M&A, we're clear on their guidance and we're clear on where the bar is for regulatory approval.
To give one example of that please turn to slide eight.
One of the questions that we had last year was where the bar would be set to demonstrate clinically meaningful efficacy. There was a meeting of the ODAC oncology drugs Advisory Committee in December of 2019 to address this question for Keytruda.
As you can see on the slide the FDA considers the 20% complete response threshold at three months to represent what can be expected from chemotherapeutics agents, including might have my son gem sort of being a bell star.
Therefore for new agents demonstrate a clinically meaningful response, the lower band of the 95% confidence interval would need to exclude the 20% success criteria.
You can see on the left hand side of the slide that Keytruda was able to demonstrate that for their overall data at the ODAC meeting and they went on to gain approval in January 2020 look.
Looking at the right hand side of the slide you can see that we have very similar overall data and stronger data for the U.S. cohort. So we feel confident in our ability to meet the FTC success criterion for complete response rate.
Please turn to slide nine which shows what we have already submitted to the FDA and what remains to be completed by the end of 2020, you can see that most of the work has been done and we're very pleased with the remaining analytical comparability work with which Chad will review in a few minutes.
Turning to slide 10.
Just a reminder that in the U.S., we remain on track to complete the BLE by the end of the year well.
Well hear from the FDA in the first quarter of next year to learn if they have accepted the file and we're projecting potential FTC approval in mid 2021.
In Europe, we have made a lot of progress in recent months, we plan to complete the M. A submission in early 2021.
I'll be important reviews with H.C.I. groups later in the year and we're projecting a may approval by early 2022.
Please turn to slide 11, which I think is a very interesting slide for those of you that have been asking about the probability of regulatory approval as you can see bio which is the biology innovation organization did a comprehensive analysis of ft oncology product reviews over 10 year period.
In general they found that products that complete phase three have a 33% probability of approval.
Well products that have submitted their B.L.A. have an 82% probability of approval.
So just looking at the average as you can see that completing our B.L.A. submission next month is a significant milestone for somebody else.
Please turn to slide 12, as we continue to provide updates on the regulatory path forward, we're getting more questions on the commercial opportunity and this slide summarizes our current view as.
As I mentioned, we believe the market opportunity is substantial.
The potential peak sales of one to 3 billion.
In addition.
We believe this may be one of those unique times in the market place, where there's alignment between patients payers and physicians in terms of their advocacy for our products and.
And when you see that dynamic you can be a very good sign for launch uptake in product growth.
Earlier this year, we did some important market research on physician intent to prescribe this any with a very positive outcome, which I'll cover in a mall, but.
And we believe that this is a highly concentrated market of roughly 1500 physician targets, which allows for a very efficient commercial model that efficient commercial model should translate into lower opex stronger operating income growth and a shorter path to corporate profitability.
Finally, my last slide is slide 13, which highlights the results of our market research versus Keytruda earlier in the year, when we show high prescribers of bladder cancer the profile for bus any and for Keytruda. They.
They see that they would choose vicinium over 80% of the time, because they view, but seem to have an advantage in terms of safety ease of integration into their clinical practice and physician interest in using the product.
Just a reminder, that we set the bar high for ourselves and shows a very strong comparator for this market research Keytruda is the number one product in oncology globally and they sold roughly 3.7 billion in the third quarter of this year alone.
Physicians have a very favorable brand image of Keytruda and therefore, when physicians choose the cinedigm overcome true to 80% of the time, we believe those results to be very meaningful.
With that I will have the <unk> I'm going to hand, the call over to Chad.
Thanks, Tom starting on slide 14, the area of non muscle invasive bladder cancer, who suffered from significant manufacturing and CMC issues for well over a decade and this is really impacted patient care in this disease setting for this reason we've taken a very thoughtful approach to our supply chain and the partnerships we've entered into.
Turning to slide 15, we brought on two world class manufacturers in Fuji film and Baxter as well as Cardinal health, an industry leader in third party logistics and distribution.
Our manufacturing partners have launched numerous commercial products from the same facility, where Vicinium is made and these include both biologics and oncology products because of this our partners are very strong track records with the FDA and other regulatory agencies in terms of pre license inspections and the CMC support they provide.
So overall, we feel very confident that we have a robust and reliable supply chain.
Moving to slide 16, our product is produced using an equal life fermentation process did.
The general approach of using microbial fermentation to manufacture recombinant proteins was really pioneered by genentech in the 19 seventies with insulin. So this is a very reliable and well understood system to utilize.
The specific process that you see here is the proposed commercial process that was developed by assessing bio and key employees, who developed this process were listed in the paper reference at the bottom of the slide are still with the company I work carefully with Fuji film and Baxter to ensure that the technology transfer was completed successfully.
On slide 17, we have a summary of the CMC feedback we've received from both the FDIC and the committee for medicinal products for human use of the M-.
Our core CMC regulatory approach for both territories is to submit a very strong analytical comparability package with the intent of demonstrating comparability between clinical material manufactured by session and commercial material manufactured by our CMO is.
The feedback we've received from the FDA and DNA has been incorporated into our compare ability plan also add that our plan is aligned with global IC HQ Fivea guidelines and so we think our data package is very comprehensive.
Starting on slide 18, I'll provide some additional color on the comparability data weve generated thus far.
Analytical comparable elite plan, we developed with the FDA and the M&A has four key elements, namely release testing bio physical characterization forced degradation studies and stability over the next deal slides I will address each of these.
So turning to slide 19, our threep drug substance P. BQ batches met all the required acceptance criteria for release testing. These tests to assess the purity biological activity in general characteristics of the city and the test is very similar to results from our clinical material.
On slide 20, you'll see some of our key bio physical characterization data. This category of test assesses the structural characteristics of the protein, including the primary tertiary and primary.
Primary secondary and tertiary structure and for biologic structure tends to dictate function. So these are very critical data.
As you can see testing of the session material head to head against the Fuji material produced highly similar values, which is very positive from a compare ability perspective.
On slide 21, we have the results from one of our force degradation studies, which are really about taking the protein and suggesting it to stress conditions that caused the protein to breakdown and then comparing the rate and the mechanism of that degradation.
In one of our studies, we took vicinium manufactured using both the clinical and commercial processes and held them at 25 degrees Celsius throughout the study we tested the purity and biological activity of Vicinium as you would expect that any degradation of the protein would affect these parameters in the graph showing from this study we measured the ability of vicinium to bind to Abcam positive tumor.
Ourselves you can see from the data that after a few days or 25 degrees. The protein from the two processes begins to lose the ability to bind to the target cells at a very similar rate.
What you would be concerned about here is if the binding capacity of the commercial material degraded more quickly than the clinical material and we clearly do not observe that.
Turning to slide 22 on our stability studies Vicinium is a cold chain product and so stability at the long term storage temperature of minus 20 degrees Celsius is very relevant and you can see from the graph that the monomer purity of the product is essentially unchanged over the first three months and storage for clinical trial material. We have a shelf life 48 months will be seen.
And the same for the commercial material.
As part of our strategy with the FDA, we will be submitting updated stability data throughout the deal a review period.
And our comparable the data will be very important since the FDA stated that if they deem the clinical and commercial material comparable we will be able to leverage the stability data of our clinical batches.
So that takes us to slide 23, and a summary of the final activities that will take place with module three prior to be late submission. We've completed a tremendous amount of manufacturing and CMC work in the past six months and it's simply a matter of translating that information into module tree.
We expect to complete those activities and finalize the BLA submission in December of this year and with that I'll turn the call over to Monica Monica.
Thank you Chad.
Please turn to slide 24.
As we continue to strategically prepare for commercial launch we've completed a Monte Carlo simulation exercise to understand the range of alternative futures for peak global sales.
As you can see on the slide we believe there are four key inputs for the U.S. market, which.
Which are eligible patients.
Market share number of your one dose is that a patient will receive and pricing.
For the regions outside of the U.S., we use a multiplier that account for prevalence and price relative to the United States.
We believe these key variables provide a spectrum of possible outcomes and capture 80% of variance in terms of valuing the global market for Vicinium at $1 billion to $3 billion in peak sales.
It's still too early to guide on point estimates, but the opposite the Monte Carlo exercise can show a range of what we believe is possible for Vicinium and this is an important tool for the demand based forecast we are finalizing a part of the manufacturing scale up work, we're doing with our CMO partners.
Turning to slide 25, you can see a break down of the range of estimated peak sales by region.
We believe Europe, U.S., China, and Nina to be the largest markets globally with sizeable opportunities in all four other geographies as well.
As we've shared previously we continue to engage in negotiations and supported a U.S. partnerships to realize the commercial opportunity in these key regions.
As those deals are finalized we will continue to provide updates.
Please turn to slide 26 for a few financial highlights.
The third quarter was very important for the company in terms of strengthening our balance sheet, we received $10 million in net proceeds related to the upfront payment from Chyulu pharmaceutical our licensing partner in China, which is an important source of non dilutive capital as well as $8.2 million in net proceeds from our ATM facility.
Cash used in operations in the quarter was $14 million, which primarily represents spending on activities in support of finalizing the BLE submission, including CMC and regulatory support activities as well as continued progress on the M&A submission in Europe.
We ended the quarter with $42 million in cash and cash equivalents, which we believe is sufficient to fund operations into the second quarter of 2021.
Finally, we continue to be pleased with the ATM facility, we have in place.
ATM proceeds to date have been an efficient source of capital for the company generating roughly $16 million on a year to date basis.
As a reminder, we run our ATM at a low level and take down less than 10% of average trading volume and on most days, we sell above the average daily price.
This allows us to use the ATM selectively when demand outweighs supply, which minimizes the market impact while strengthening our balance sheet.
The ATM has been critical in helping us continue to invest in high priority work stream, including the BLE submission any submission and preparing for U.S. commercial launch.
Finally, turning to slide 27, Q3 was a strong quarter for the company in terms of executing on key deliverables, including the cheesy deal and efficient use of the ATM, which enabled us to increase our cash balance from $38 million at the end of Q2 to $42 million at the end of Q3, we.
We did so while attempting to minimize dilution and continuing to build value for our shareholders, which is represented by the changes in shares outstanding and market cap from quarter to quarter.
With that I will turn the call back to Tom Tom.
Thank you Monica. So please turn to slide 28, which is a summary of the three key takeaways for our call today.
First vicinium has a unique and compelling value proposition, especially when it comes to its potential to save and improve lives.
Second we believe we have a clear regulatory path forward and bulk of U.S. and Europe, and finally, given a substantial unmet need in bladder cancer and the highly differentiated clinical profile of the Cinedigm, We project a significant global commercial opportunity.
With that we will open up the call for questions operator.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press, the pound or hash key and please stand by while we compile the <unk> roster.
Your first question comes from John Newman from Canaccord.
Hi, guys. Thanks, a lot for taking my question and congrats on all the progress here so.
First question I have is regarding the final steps that are needed with modules three before the vili.
But it seems like the only analytical stuff is just to finalize the statistical analysis of the in process or at least just again just wanted to confirm that and then the second question I had.
Different subject just curious if you could talk to us about your plans longer term in Europe, if you'd be contemplating a partnership there be considering marketing on your own. Thanks.
Great. Thanks, John and good morning, all I'll take the Europe question, then I'll hand, it back to Chad to talk about the final steps for module three so yes, we're making we're making very good progress in terms of the European regulatory process as I mentioned, we'll submit the I mean in early 2021, we'll be working with H.
Groups, including nights and then we're anticipating approval in early 2022, and we do plan on like the other major markets outside the U.S. to look for a partner we're looking for a 50 50 value share where they would be the marketing authorization holder and take over responsibility for regulatory clinical and commercial.
And all other aspects of going to market. So those are the current plan then and we're moving forward in negotiations as we are in other parts of the world and Chad I'll hand, it to you to talk about the final steps with module three.
Yeah, Thanks, Hi, John Yeah, you're correct about that so all the testing is completed for release testing, both physical characteristics characterization enforced degradation testing.
Stability as you know is ongoing so really now it's just as you mentioned finalizing that statistical analysis, getting all that documentation and paper work into module three.
Okay, great. Thank you great John any other follow up questions for you.
[noise] Oh no that's all at the moment. Thank you okay. Thanks John.
Again, if you would like to ask a question. Please press star one.
At this time there are no further questions. So I'll turn the conference back over to Dr. Thomas Kendall.
Great. Thank you Sandy and thank you everyone for four I'm, calling in this morning. So we think our story is very clear we have a highly differentiated product in a disease or with a significant unmet medical need we have a clear regulatory path forward and there was a sizable market opportunity for Vicinium and we have a very talented team of employees with them.
Laser focus on the important work of saving in improving lives you'll be hearing from US again soon and until then please stay safe and have a good week that concludes our call for the for today. Thank you very much operator, I'll hand, it back to you.
Thank you ladies and gentlemen, this does conclude today's conference call. Thank you. So much for participating you may now disconnect.
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