Q1 2021 Spectrum Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, please standby your conference will begin momentarily again, please standby your conference will begin shortly thank you.
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Okay.
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Good afternoon, ladies and gentlemen, and welcome to the spectrum Pharmaceuticals first quarter 2021 earnings conference call.
At this time all participants are in a listen only mode. Later, we'll conduct a question and answer session and instructions will follow at that time.
And when and when should you require assistance during the conference. Please press Star then zero on your Touchtone telephone as a reminder, this conference call is being recorded I would now like to turn the conference over to your host Mr. Kurt Gustafson, Chief Financial Officer.
Thank you operator, and good afternoon to everyone.
Thank you for joining us today for spectrum Pharmaceuticals, first quarter 2021 financial results Conference call.
Our first quarter financial results press release was sent out earlier. This afternoon and is available on our website at Ww Dot Www Dot S. P P Iraq Dot com.
Joining me on the call today from spectrum Pharmaceuticals will be Joe Turgeon, President and CEO and Dr. Francois Labelle, Chief Medical Officer.
Before we get started I would like to reference the notice regarding forward looking statements included in today's press release.
This notice 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 them.
Such forward looking statements necessarily involve known and unknown the risks and uncertainties, which may cause actual performance and financial results and 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 Turgeon.
<unk> CEO of spectrum.
Thank you Craig good afternoon, and thank you for joining us today and the call.
In 2020, we laid the groundwork that I believe will allow us to achieve a number of important milestones in 2021 and beyond.
And our fourth quarter 2020, we had a call with the FDA to review the filing strategy for the submission of an NDA for Posey and it based on the positive data from cohort two and the Zenith 20 study.
The cohort evaluated previously treated patients with non small cell lung cancer, which her two exon 20 insertion mutations and it met the pre specified primary endpoint and these patients.
And our discussions and agreement with the agency, we are proceeding with the submission of a new drug application proposed aetna.
That work is well underway and we're planning to submit the NDA later this year and.
In addition, the FDA granted fast track designation, which is an indicator of the importance of this drug for patients with this terrible disease.
We presented additional data supposedly at net at the ESMO Cat meeting in March and at the ACR annual meeting in early April.
Our aspiration proposal extends well beyond the initial NDA filing.
We believe this product can be a targeted therapy and oncology across multiple indications.
The recent data from the ESMO cat and a ACR was an important step and realizing this promise.
The twice daily dosing has demonstrated significant improvement and both efficacy and tolerability.
Which will be important for the program as we advance our development efforts.
Now regarding where lantus the FDA scheduled the preapproval inspection of our manufacturing facility for later this month.
We believe this inspection marks the final step and the approval process and at Hanmi is world class facility is ready for this inspection.
We are making real progress on our two lead clinical programs with major catalysts expected in the coming months, including a launch.
And in it and an NDA filing.
And with that I'd like to turn it over to Dr. Francois Bell, our CFO for an update on our clinical development progress Doctor French law.
Good afternoon, everyone I'm glad to be with you today.
I'll begin with Jonathan.
Preparation for the submission of our NDA under fast track designation is well underway and as Joe mentioned the submission will be based on our positive data from cohort two of the Z net 20 clinical trials.
As important milestone will be achieved later this year.
As you May know there is no approved treatment for patients with her two exon 20 insertion and mutation and non small cell lung cancer and we believe posey has the potential to be first to market to address this area of great medical condition.
Additionally, we meaningfully improved safety profile and then and then antitumor activity was observed and reported recently at two medical need it is.
The result may make a real difference not only for her too, but also for Egfr mutation and eventually with other solid tumors with <unk> activating mutation.
The data presented at ACR for coal from cohort side.
Of the Zenith one trial includes previously treated non small cell lung cancer patient with Egfr or her two exon 20 insertion mutation and.
Provide.
Further support of our IDE pastas and surround B I D dosing.
For the 38 patients who received 16 milligram per day, and Ryan day mind, either too Cozy 16, once a day or eight milligram B I D and cohorts five improve response were observed and the B I D R with debt.
Already one six per cent of patient, reaching a partial response.
Other arms demonstrated activity, but were not as effective as the eight milligram B I D dose.
Clinically meaningful improvement and Tolerability was also observed.
Grade three or IRA related adverse events were reduced by approximately 60% with B I D.
Dosing at eight milligram twice a day also allowed for an improved rate of dose reductions and interruptions we.
We are now dosing patients exclusively at the eight milligram B I D dose and ex.
Bank debt this change will accelerate and enrolled in cohort five.
Now cohort four of the Zenith 20 clinical trial is continuing to enroll well with patient with non small cell. Her two exon 20 mutation receiving eight milligram B I D E and first line treatment.
At the upcoming <unk> annual meeting in early June we will be presenting data on patients and CNS metastasis.
Baseline and our cohort 123.
As you can see the body of evidence supporting the safety and antitumor activity of Posey continues to get stronger as we progress.
Now, let me shift to roll on this.
On the regulatory side, Joe and it's already updated you on the status of the pre approval inspection and we remain confident that our preparation with our partner Hanmi should result in a positive outcome for the F D a plant and inspection.
As it relates to our ongoing roll off because its clinical development program. The same day dosing study and now achieved full enrollment with 15 patients.
This is an exploratory study evaluating the dosing over a losses on the same day and chemotherapy.
Generally white cell growth factor on the market must be given the day after chemotherapy and this can create significant logistical difficulties per patient.
Following our initial.
Safety and validation examining dosing at 30 minute three hours and five hours post chemotherapy, we expanded the enrollment and the 30 minute the arm to 15 patients with.
We plan to present the results from those same cohort at an upcoming scientific meeting later this year.
And this indication is not part of our current DLA. It is further evidence of this being a novel compounds with different pharmacodynamic property, giving us the potential to further differentiate <unk> from.
The field of Biosimilars and the innovator.
The balance of the year as rich and key regulatory milestones and additional data readouts.
We plan to provide you with updates on our progress in the coming months.
I will now turn it over to current for a review of the financials.
Thank you Francois.
Our SG&A expense for the first quarter of 2021 was $14 3 million versus $14 8 million and the previous year.
R&D expense was $19 4 million versus $16 million due to increased program costs, primarily associated with the Posey at net program.
Our net loss for the quarter from continuing operations was $35 7 million down from 46 million and the comparable period of 2020.
On a non-GAAP basis, which primarily backs out stock compensation costs, and the change and value of our coffee securities our loss for the quarter was $29 4 million versus $25 million in the prior year period.
We ended the first quarter with approximately $163 million and cash plus marketable securities compared to $180 million at December 31, 2020.
Our March 31 cash balance included net proceeds of $21 million from equity issued off our ATM agreement and the first quarter.
Operating cash burn for the quarter was 34 and a half million.
This is consistent with where we've been the last few quarters.
After the end of the first quarter, we issued an additional $23 9 million and equity utilizing our ATM agreement.
These proceeds are not included in the 163 million March 31 cash balance.
These proceeds will be used for our planned launch of Atlantis and furthering of the pose yacht and a development program.
With that let me hand, the call back over to Joe.
Thank you Kurt and thank you Dr. Francois.
Spectrum continues to make strong and steady progress on our development pipeline.
We look forward to the completion of the inspection of a rollout this manufacturing facility.
And is planned to begin shortly.
We are actively preparing our NDA proposed yet and it and plan to share additional results from our ongoing cohorts and the Z net 20 clinical trial later this year and.
And with that I'd like to open the call for questions. Operator could you. Please open up the lines for questions, Yes, Sir.
Ladies and gentlemen, if you have a question at this time. Please press the star and then the number one key on your Touchtone phone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key in order to allow everyone time for questions. We ask that you. Please limit yourselves to one question for a follow up please.
Star one again to get back on queue.
Your first question is from Maury Raycroft from Jefferies. Your line is open.
Hi, everyone and my age.
Hi, Joe.
Congrats on the progress and thanks for taking my questions. So I'll just ask about conversations with FDA and what our specific gating factors for filing and you could mention and was the switch to exclusively a b I D and cohort five was that based on your talks with regulators or can you provide a little bit more per.
Yeah.
Yeah first of all why don't you talk about that.
Sure so.
First you got to remember cohort two was done and 16 milligram so successful.
<unk>, two where we met the Prespecified endpoint was done with 16 milligram.
And once a day, so that the base and a filing.
You know we met what we had to do the safety profile, we believe is acceptable and manageable.
And the discussion with the FDA.
Was around that and they basically upon discussion with us debt. Yeah, you can file this.
And so that's exactly what we're doing now since then.
And it's clear that we are not only maintain the type of performance, we saw and cord too, but actually we are built on it and by B I D dosing, we can actually improve the efficacy and.
And the adverse event profile.
Mentioned, so this type of information will be shared with the agency, but the price.
And I married filing is with the positive cohort.
I hope that answers it.
That's that helps yeah, and I'll hop back in the queue with follow ups.
Thank you.
Thanks Mac.
Your next question is from Alicia Yap from Cantor Fitzgerald. Your line is open.
And hi, Hi.
Hi, Thanks for taking my question. This is neena on for Alethia.
I just have a quick one so with the presentation at ACR and can.
Can you talk about how you're thinking about both dose and dosing frequency.
Yeah.
Sure well.
Essentially.
And to think about it is debt.
We have a core to that was positive and it met the prespecified endpoint and so that's very very important and that's what allows us to filed for.
And then D E and also the nature of the disease you'd be medical need and the fact that the data that and the debt. We have shared with the FDA, we were able to secure fast track designation.
It's also a very important because it allows us to have what's called a rolling submission.
So the data we've shared at ACR and as I've just mentioned is basically.
Stablish thing that not only have we as we have added patients not only have we maintained the previous performance and the drug and the path.
But also we've actually seen now improve resolved.
In terms of efficacy.
Well as you know reducing to 60% the grade three or higher related and so those are you know.
This is like getting better as we and patient.
We have.
<unk> that was successful and now we are improving on it. So that's why we're pretty excited about this filing and as we go forward.
Thank you.
Your next question is from Ed White from H C. Wainwright Your line is open.
And.
Hi, Joe Thanks for taking my question.
So my question is you mentioned.
And our posey and other into multiple indications.
So I just wanted to know if you're circling back to the Egfr exon 20 mutations.
Will you have enough data coming out of cohort five two perhaps reconsider filing again for that indication or are you thinking of developing another study to pursue this or.
Will you be looking at other indications outside of non.
Non small cell lung cancer.
Sure Ed so.
Yeah.
It's kind of premature for me to answer you as to how the if.
And you will think about our data, but obviously, there's going to be we're already and communication and there will be continued communication through the NDA review and as Ive indicated just a minute ago the day.
Data from that from body of evidence here that we have shown at ESMO tab and at ACR will be shared with the agency and so I can't predict out a day and going to react to it but what I can tell you or remind you is that the data we showed a yard and the majority of the patient and the eight milligram.
And B I D actually were age Egfr exon 20 patients they werent or two.
So and you know and that's where we got we saw the best data, we will be showing I think some very interesting data and ask go also.
N S activity and so.
So you know given what we're seeing here. We just think that's the case, if you want or the Inc.
Just getting better on top of what we have done in cohort two which met what we need to do so you don't want to have additional discussion with the FDA.
But certainly we have shown no debt.
The activity, we're seeing is not.
Strictly to urge you, but also and a preliminary you've Spanish and also covers egfr.
Yeah.
Okay, Thanks, Francois and and.
If I may just a quick question on real Lantis.
Once you get the preapproval.
And the inspection done on the harmony plant.
What are the next steps in and will the F D. A issue and new producer date or how should we be thinking about timing. Thank you.
Yeah, and we don't know the exact timing, but let's let's go back and time, we as you recall and I know you well know we received a deferral back and.
And I'll Purdue per day back in October and not a shear al which.
Clearly if there were problems like many other companies got with our clinical data, we feel we would've gotten a CRA we didn't.
But because it's because of the.
Pandemic, we couldn't get people to South Korea to do the file and I know you know all of that.
We're prepared for the for the inspection, we're looking forward to it I can't give you an exact date, but I think a.
The FDA would take a reasonable amount of time to get back to us once the inspection and start and we feel that's the last step so without giving you exact guidance I think it would be a reasonable amount of time.
After the inspections done.
I hope that answers your question.
Okay. Thank you I'll get back.
Your next question.
Have Ren Benjamin from JMP Securities. Your line is open.
Hey, good afternoon, guys. Thanks for taking my questions.
And Joe maybe just to start off.
Can you give us.
Sort of a and enrollment update or a timing update and two cohorts sort of four and beyond I think and the you guys mentioned in your prepared remarks that enrolment continues well for cohort five how many more patients are we planning on enrolling there and it's everything focus now on the eight megs.
The I D dose and then you know just how we're doing with cohorts four six and seven as well and when we might see data from those cohorts.
Sure so cord for what we have communicated is that you know we were roughly and the mid forties, when we switch to B I D.
And you will recall that our.
Target.
Enrollment.
As discussed with the FDA was 70 patient so that's cohorts four and it's continuing to enroll today.
Cohorts five.
We are.
The.
<unk> design, if you want we were randomized and patient.
A number of Barnes and as a result of the presentation and a yard switch completely now and to a b I D and that's because we had completed the stage one.
The stage of a Simon two stage design and we have to enroll a 19 patients per arm, which we did and the b and B I D showing itself to be the best arm to expand and continue and that's why we're doing so.
I don't think we have indicated the number exact number of patients, but let's just say that we're working it's going very well and enrollment and because we're no longer assigning patient to the other arms and all the patient now are going and the eight milligram B I D. So what do you think that.
And the enrollment now is going to happen faster.
And so that's probably as much as I can tell you today either.
Other than state dune and and the next couple of months in advance where we're going to have more information as two cohorts six and seven these represent very you know are relatively rare mutation.
Nutation, if you want so enrollment is ongoing and more satisfied.
And this is exploratory we don't expect in the near term any regulatory.
No no activity, there and it's really the important cohort as we go forward clearly, it's going to them was bonds.
And now in cohorts four and five so I hope that answers your question.
But it does from so thanks for that and I guess, just going off of <unk> question regarding cohort five.
Even though you don't have let's say a.
And a number as to when you might stop it it seems like and maybe I'm just being overly enthusiastic but it seems like.
You could potentially go to the regulatory agency with the cohort five data and and discuss a potential.
Expansion and the opportunity am I being you know a little bit too exuberant about that or is that a macro possibility.
Yeah, and look what we're pretty excited and and actually we think there is.
And our warrants to discuss and nonetheless, and quartz fine, but on cohorts four and dwell.
And you know, we'll see where it goes and as we prepared to for the NDA filing the data.
Will you know will be disclosed to the FDA and as such we'll we'll see where they go but you know we basically.
What we believe is a winning cohort two and now we have even more exciting data.
Not only about or two but also.
Given the data that we're seeing coincide and also includes Egfr again. So you know we've always seen clinical activity. If you recall across all the cohorts, we always that clinical activity cohort, one and three and Miss the primary endpoint, but not by a huge amount and so now.
And what we see and quartz fine we think that if you were to redo cohort, one and three with different dosing you might get a very different outcome. So that's why we're very encouraged.
Great. Thanks for taking the questions guys sure. Thanks Ryan.
Your next question is from Michael Schmidt from Guggenheim Securities. Your line is open.
Hey, guys. This is Charles Zhu on for Michael Schmidt.
Grant's on the progress and thanks for taking the questions on my head one on the Relaunches same day dosing and presumably this data will arise. After you hopefully get the initial BLA approved could you help us understand once you get this day to the potential timelines or steps to either fully and formally incorporating it into the label or somehow.
Potentially enabling providers to utilize this more of a convenience scheduled before a formal lately will change. Thanks.
Yeah.
Yeah, So Charles D discussion.
The current B L a and.
We believe.
And we've answered all the queries the question.
And even out and discuss the label with the FDA. So we think the only outstanding item is this P E and inspection.
So we don't expect the label and the what we think would be a hopefully an approval.
Approval and the very near term.
We don't think you know debt, there's not going to be any language about same day dosing at there and you are correct, we would advance that and.
Discuss.
And resolve those same day dosing with the agency after a day.
You know awful approval here and you got to remember, although I announced the day that we're fully enrolled and we still have to analyze that data.
And so as the analysis comes we presented data and some scientific meeting and.
And assuming we have and our approval and the near term, we will discuss that data with the FDA and agree on a plan to.
<unk> C.
Additional Reggie.
Our registration if the data is positive obviously.
Hey, Charles if I could just add to our branch was spot on.
And where we are.
All along we knew that we were going to not have this non labor we launched we're fully prepared to compete.
With the label as this week.
This would be as Dr. Fresh and so it's down the road. If this was added to the label. This is something that's been tried in the past and wasn't accomplished by other products and it would be certainly more convenient for patients for for the doctors and nurses who actually.
And give the injections et cetera, so that would be a point of differentiation, but I just wanted to be clear this was not a and <unk>.
Expected. This is good news and we're moving forward to the next step, but we're fully prepared to launch without it and that's what the plan was all.
Got it thank you.
Thank you Josh.
Next question, we have from Tommy from B Riley Your line is open.
Hi, good afternoon, and thanks for taking our questions and congrats team on the progress so I.
Have a dual landscape sort of competitive question, so maybe starting with Buzzi first.
You also touch on both separately on the Hood do and Egfr, if there have been any developments debt.
You might be also benefiting from as you think about enrollment and in these trials.
That would be helpful. And then Avalon this question.
Yeah.
Well go ahead, Craig why don't you talk about debt.
Competitive landscape first day.
Yeah, so and so on.
First of all on the.
Core to us and are too so, let's start there and so far or too.
No.
Obviously, we don't want to speak on behalf of other drug developers theory, but Daiichi, we think are the closest and they've announced now.
Few months ago that they are going back to the bands and looking at different.
Dos and lower dose in order to try to I assume.
You know abbvie explored to see if they could reduce.
The rate of Pneumonitis pneumonitis had been an issue with that particular drug did not the case with our drug we have seen zero to 1% a rate of pneumonitis and they were in the mid teens with the drug. So that's the one per too on the Egfr.
Our front.
It's a you know there's J&J that are announced.
By specific and debt.
And our.
There are filing so obviously that could be they could get to market.
You know certainly sooner than us, but you know and we'll see how things evolve and as I've. Just mentioned are more recent data is certainly very encouraging. So you know it's kind of too early to tell.
Great.
Thanks for taking that and then on the again sort of lifecycle management for Lantus same.
Same day is good but as you know the.
You know there are alternative drug classes that are being sort of tested on top of G. CSF.
And I do move the needle further on neutropenia, and and also soda and other benefits you don't get with mono therapies any any color on your thinking.
And obviously you'd think about this as a novel branded biologic.
Sure I'll start.
First of all when you look at one of the products to be honest spring product really when you look at the beat T. D. That's been granted for that it's really in combination with G. CSF, So that's adding and.
Other drugs, along with the GSE G. CSF My only question would be there what patient population.
And there's a need for a payer to pay for two drugs to get this done who are the patients who are not working on because G. CSF works pretty darn good.
And for patients who are taking myeloid suppressive agents today. So that that's that there is share theres. Another another product that is early early stages. It would be a different approach, but that Charlie answer right right now I think.
G. CSF is is the way to go and maybe there'll be a combination with it but but most patients do very very well with G. CSF on its own and I.
I don't see the unmet need beyond that but it may be theres certain patient types of debt that could benefit from that.
Got it and and final question was you you definitely have a ton of Rolando stockpiled.
Could we just sort of understand.
And as we think about this may meeting on the other side of it.
How soon can the product and actually be available for patients and what sort of that stockpile. It looks like is it is it.
And a month's worth of or is it like a six month worth of liquidity could you give some color there.
Sure Tom why don't you comment on that.
Sure.
We're thrilled for the potential of getting <unk> approved in demand generation will begin almost instantaneously as the leadership team has already been hired.
And have the vast majority of the customer facing representatives that will be hired and if you think about kind of approval plus what happens to get drug and channel we have.
Plenty of commercial supply stateside and when plenty of getting to your question directly.
And we want to make sure based on our expectation of the uptake and the product we will have ample supply and we believe we have that first year covered.
I think customary with the approval of a biologic you can expect lip printing of labeling promotional materials final packaging of syringes and I think the way to think about that is and the four to eight week time period. So I would guess between one and two months post approval and the actual drug would hit the channel.
And we would begin selling it but our demand generation contract rollout payer strategy.
All of the commercial infrastructure efforts would begin instantaneously post approval.
Great and exciting few months ahead for Ya. Thanks, so much for taking my question.
Thank you.
Yes.
And we have a follow up from Ren Benjamin from JMP Securities. Your line is open.
Hey, guys. Thanks for taking the Inc.
Thanks for taking my follow up.
I'd Love, some goofs and Mumbai.
Modeling of this quarter, because I was off on the SG&A thinking debt.
You were still ramping up on on the sales force and the like and so I guess I'd just like to get maybe some thoughts as to the.
And the current SG&A level do.
And we still expect it to materially go up where have you know a lot of the sales force and you know.
And those involved with sales been hired.
And if not how should we be thinking about it going into I'm guessing closer to the third quarter or fourth floor.
Curt do you want to answer that.
Yeah. So he ran the SG&A has been kind of running around that 15, 14 and $15 million.
Run rate for the last few quarters.
I think as we've talked about and some previous calls we've got about half of the commercial organization onboard.
Tom sort of indicated we've identified.
And the people that we plan to provide offers to and higher.
But they have not come on board yet so that's why that cost isn't there yet and we will that will happen as we gained some additional clarity here and in the coming weeks I guess.
And when you asked about whether it goes up material materially right. We're talking about I think we've said the entire <unk>.
Commercial organization is say 60, or so folks so we're only talking about adding an additional 30.
I'm not a giant incremental spend.
But there are there are various launch activities and marketing materials that we'll be prepared for that so.
I do expect it to go up.
Material is it's sort of a net.
Not sure how what number you had.
Defined as material, but you will notice you will notice and increase in SG&A. Once we once we hire those folks and.
And and launch the product.
Yes.
And so I appreciate the additional color I didn't know I know from previous calls you have had half I didn't know if you're slowly bringing.
Those people on board and if they were just going to come in.
Bolus once approval based on that.
Thank you.
Thanks, Rick and just the only thing I'd add there is the reason that you haven't seen that number increase of customer facing representatives as we deliberately gated that post <unk>. So I think as you as you.
As you de risk the program and get closer and closer to approval. We wanted to make sure that we had enough time to hire train and execute but didn't want too much time prior to having clear visibility to the path of approval.
That's the reason.
Yes.
I appreciate it guys. Thanks.
Thank you.
I am showing no further questions at this time I would now like to turn the conference back to Mr. Joe Turgeon, Chief Executive Officer.
Thank you operator, I really appreciate it and I'd like to thank everybody for their participation on the call today I'd like to thank everybody for their interest and spectrum pharmaceuticals.
And I really appreciate it and I want to wish everybody a great evening, and we'll talk to yourself. Thank you operator.
Yeah very much welcome per center, ladies and gentlemen. This concludes today's conference call. Thank you for your participation and have a wonderful day you may all disconnect.
And.
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