Q2 2021 Spectrum Pharmaceuticals Inc Earnings Call
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Ladies and gentlemen, this is the operator the conference a stupid begin shortly please continue to standby and thank you for your patience.
Ladies and gentlemen, this is the operator. This conference is due to begin shortly please continue to standby and thank you for your patience.
Hello.
Uh huh.
Sure.
Hmm.
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Oh.
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Yeah.
Good day, and thank you for standing by welcome to the spectrum Pharmaceuticals second quarter 2021 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone keypad.
If you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today, Mr. Kurt Gustafson, Chief Financial Officer. Please go ahead.
Thank you operator, and good afternoon to everyone. Thank.
Thank you for joining us today for spectrum Pharmaceuticals second quarter 2021 financial results Conference call.
Our second quarter financial results press release was sent out earlier this afternoon and is available on our website.
W. W. Dot S. P P I Rx 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 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 Turgeon CEO of spectrum.
Thank you Garrett and good afternoon, everyone and thank you for joining us and thank you for your interest in spectrum.
As most of you are aware spectrum received the complete response letter from the FDA last week regarding the BLA for a lantis seeking an indication for the treatment of neutropenia in patients receiving myeloid suppressive anti cancer drugs.
The entire company is greatly disappointed by the CRA.
However, I can assure you that our team is already working closely with our partners to resolve this year.
The CRM cited deficiencies related to manufacturing at the bulk manufacturing facility.
But you will need to be Remediated and indicated that re inspection will be necessary.
The CIL also sided deficiency that the fill and finish facility, which will mean he needs to be remediated.
We're in communication with our Cmos and our remediation work is already underway.
The company is seeking further clarification from the FDA regarding the rea to meet remediation timelines and their plans to meet with the agency as soon as possible.
The CRM did not cite any need for a new clinical trial.
We look forward to providing an update following this engagement with the FDA.
Now, let me shift supposedly out there are other late stage pipeline asset spectrum supposedly Aetna program has continued to make great progress in 2021, and we are advancing to a very important milestone the submission of the NDA the.
The NDA proposed yacht that will be based on the positive data from cohort two the zenith 20 study.
Cohort evaluated previously treated patients with non small cell lung cancer with her two exon 20 insertion mutations and met the Prespecified primary endpoint in these patients.
<unk> has fast track designation, an indicator of the medical need that this drug may be able to alleviate for patients with this terrible disease for which there is no approved therapy.
An additional advantage of fast track designation.
Cause the ability to have more frequent interactions with the agency.
During the second quarter, we took advantage of this designation to meet with the agency.
Dr. Francois will update you further.
We remain on track to submit to oppose the NDA later this year.
Our recent data presentations at ESMO Cat ACR and Asheville shows that twice daily dosing data appears to provide a significant improvement in both efficacy and tolerability.
And with that I'm going to turn the call over to Dr. Francois Bell, our CFO for an update on our clinical development progress proposed Aetna talked all about.
Yeah. Good afternoon, everyone I'm glad to be with you on today's call. Joe has provided you the update on Relaunches. So I will focus on pose the odds of them.
The submission for our NDA under fast track designation is well underway and planned for later this year.
It'll be based on our positive data with QD dosing from cohort two of them.
Zenith 20 clinical trials.
We recently added a type C meeting with the FDA.
[noise] to agree on the data package to be provided in the submission.
The submission will be aiming for an indication in the treatment of patients with her two exon 20 insertion mutation.
On small cell lung cancer, and we believe caused you often hear that has the potential to be first to market for this indication and an area of great unmet medical need.
Part of our type C meeting I am pleased that the FDA agreed that we can include our recent data on B I D dose.
At the ESMO meeting in June we presented data on patients with brain metastasis.
This analysis look at the result for 284 patients from cohort one two and three.
Of which 36 patients had brain metastases at baseline.
Three of these patients.
8% achieved intra cranial complete responses brain metastasis occurs frequently in non small cell lung cancer, and even up to 25% of patient.
And is associated with short survival.
Patient in this analysis received posey at a dose of 16 milligram once daily these.
These data showed clinically meaningful CNS activity for Posey treated now.
Non small cell lung cancer patients with CNS metastasis with either Egfr or her two exon 20 insertion mutation.
In April we presented data at the ACR from cohort five of the Zenith two trial. These results provided further support of our eye potthast surround B I D dosing.
For the 38 patients.
We received 16 milligram per day and randomized to either pose the 16 milligram QD or eight milligram B I D and cohort five improve response were observed in the B I D arm with 31, 6% of patient.
[noise], reaching a partial response, which represents near doubling of the response rates are there.
Their arms to refine the minimum effective starting dose demonstrated activity.
But the eight milligram B I D perform best.
Clinically meaningful improvement in Tolerability was also observed the grade three or I or related adverse events were reduced by approximately 60% would be IV dosing.
Those thing at eight milligram twice a day also allowed for an improved rate of dose reduction and interruption.
As a result and cohort five we are dosing patients exclusively at eight milligram B I D.
Cohorts four of the Zenith 20 clinical trial is continuing to enroll well at eight milligram B I D.
First line treatment.
During the balance of the year, we expect to meet our key regulatory milestones and have additional.
Data read out we plan to provide you with updates on our progress in the coming months.
I will now turn it over to Kurt for a discussion of our second quarter financials.
Thank you Francois.
Our SG&A expense for the second quarter of 2021 was 15 million versus $14.7 million in the previous year.
We have continued to delay additional investments in our commercial infrastructure until we gain clarity on the relaunch of <unk> approval.
R&D expense was $29.1 million versus $21.7 million due to increased program costs, primarily associated with pose yacht nib as well as slightly higher personnel related costs.
Our net loss for the quarter from continuing operations was $49.9 million or <unk> 32 per share.
Versus $32.2 million or 29 cents per share in the comparable period of 2020.
On a non-GAAP basis, which primarily backs out stock compensation costs and the change in the value of our equity securities are loss for the quarter was $39.3 million or <unk> 25 per share versus $31.8 million or 28 cents per share in the prior year period.
We ended the second quarter with approximately $159 million in cash plus marketable securities compared to $163 million last quarter.
Operating cash burn for the quarter was $29.7 million, which is consistent with where we've been the last few quarters.
During the quarter, we received net proceeds of approximately $31 million from equity issued off of our ATM agreement.
With that let me now hand, the call back over to Joe.
Thank you Dr. Francois Thank you Kurt.
I'm very disappointed in the latest decision of our Lantis, we're committed to working with our partners and the FDA to resolve these issues as soon as possible.
I am pleased with the strong and steady progress spectrum continues to make on our <unk> development program. We are actively preparing our NDA submission proposing and we're planning to share additional results from our ongoing cohorts. The zenith 20 clinical trials later this year and with that operator, I'd like to open up the call to questions.
Yes, Theyre assay reminder, to ask a question you will need to press star one on your telephone keypad.
We stand by while we compile the Q&A roster.
Yeah.
Our first question comes from the line of Marty Raycroft from Jefferies. Your line is open.
Hi, Mark Hi, everyone, Hi, Hi, Joe.
Hi, Thanks for taking my questions.
Maybe first question on <unk>.
Wondering if you can provide.
A little bit more clarity on what next steps could look like there.
If it's possible for FDA to answer some other questions by reviewing documents for Mohan hanmi or potentially doing additional follow up virtually or would they have to go back to decide if you can provide any more clarity there.
Yeah, well that's right.
I Love your question because they are all important things, obviously, Laurie but first of all the FDA. The next step youre asking what the next step.
We're preparing the questions sending them to the agency requesting a meeting because the most important next step to answer everything you were asking is having that meeting with the agency.
And because when we have a chance to clarify that that everything that you asked with the FDA.
The extent.
How we deficiencies, how we answer those how quickly the timelines the most important thing.
Once we meet with them will be able to clarify all the manufacturing deficiency, the estimated timelines and as far as asking could we do it a different way than a physical inspection don't know the answer to that that's certainly one of the questions would be asking one with the agency great question.
Got it and.
It sounds like.
At base case, they would.
I request you to do an additional study and maybe if you could just talk more about your confidence to.
Getting this issue resolved and.
And also one of the other questions. We had two is just on communicating with Hanmi I guess, what is hanmi set about.
The situation have they provided any additional clarity on.
On what FDA could be looking for on their end.
Yeah, let me start with the confidence I'm confident that I think youre asking are these things fixable and we believe it all the deficiencies and the items can be Remediated Theres no question I'm confident they can be remediated, but I, obviously want to gain additional clarity with the agency I got to keep going back to that until we do meet and.
Normally that meeting once you submit it takes within 30 days.
The agency will meet with you. So I am confident that we can that we can fix these remediation. They asked about meeting with Hanmi of course, we've already met with Hanmi.
Ongoing we're working together very closely I can even tell you as I said earlier, our remediation process has already started so we're already well into working with omni on the remediation.
Want to clarify everything and give you those timelines you're looking for.
Got it that's very helpful. Thanks for taking my question and I'll hop back for me too.
Thank you Mark.
Your next question comes from the line of LPTA Young from Cantor. Your line is open.
Hey, guys. Thanks for taking my questions.
Couple one.
Can you talk to like a more specifics on the FDA is comfort with the clinical data package that you provided like was there anything in the complete response letter that indicated that you know that part of it and with at least cross thoughts or any color you can provide from that and then the second question is you know it isn't totally out and they've made in the same facilities. So I guess in the house.
I guess, if he resolved these issues for Atlanta is it does it help the proposal or how does that how do we think about that thank you.
Yeah, Hey Ali.
First of all on the FDA clinical what I can tell you is they did not request additional clinical trial I think anytime you resubmit any new safety data or anything you had you wouldn't you would put into that but there was no D. C. D. C are all focused to the remediation are focused around manufacturing now.
Now as far as as opposed to you asked asking your question. We did license Posey from Hanmi and I'll remind you. It's a small molecule. So it's a different manufacturing process, but that's actually manufactured at another South Korean company.
Yeah.
Okay, and just as a follow up to that I guess on the first.
The first part like.
How do you.
How do you know that like.
Just like you know there was like a year that passed I guess is the best way to put it and was it just maybe lack of communication with hanmi or were they not you know the FDA didn't communicate like I definitely do I figure out I know there was ample amount of time with them just not being able to get over that you review it was that the factor or were they just not communicative.
Yeah.
No Ali I don't know if communication along the way, but they don't really communicating you know this was actually you're right. It was actually over a year.
For the for the actual when when originally they were going to inspect the plant now during the year, we didn't sit still I can assure you we have outside.
Experts in there we did several mock inspections. We you know I thought we were going to get approved.
I'm not going to lie to you I expect it to pass however, the reality is they found some some deficiency if they want to be fixed and we're going to work real hard work quickly to get those fixed as quickly as possible I do think they are fixable.
Okay, great. Thank you.
Thank you Alicia.
Our next question comes from the line of Michael Smith from Guggenheim Securities. Your line is open hi.
Hi, Michael.
Hey, guys. This is actually Charlie on for Michael Thanks for taking the questions and.
Sorry to hear about the recently launched this news, but Tom I guess my first question on posing so it does sound like cohort two NDA is still on track for this year could you provide a little bit more color, perhaps around how I think enrollment for cohort four has yet to be completed I guess, where are you guys with that and how should we.
Think about near term timelines. Thanks.
Francois why don't you take that.
Sure.
So Charles Thanks for the question we've communicated before that you know we were pleased with the enrollment in cohort four we've also indicated that we had 49 patients enrolled in the 16 milligram once daily and as you know.
We are now.
Enrolling we'd be dosing at eight milligram bid dosing I think importantly.
You know as indicated in our formal part of the presentation here is that one of the key question. We add on type C meeting was whether or not the FDA would accept that we provide them with some of the information about dosing as I'm sure you Bruce.
Given the signal positive signal, we had seen would be IV dosing, we felt that it would be good to be able to incorporate some of that information in the filings.
And we've indicated today.
New information that the FDA agreed that we can provide.
This information now.
A critically.
That doesn't mean necessarily that it's gonna find its way into the label, but it certainly gives us a chance to present, the data and the improvement in efficacy and safety profile. So we think that's an important win.
You know, it's going to obviously be subject to the agency reviewing this data et cetera, and we'll see where they come out.
But that's that's where we are right now.
I feel I've answered your question, but maybe you want to come back with.
Question.
Got it all right yeah. Thanks for that and I guess, my second question back to launches and as a bit of a follow up to <unk>. Prior question I'm kind of you know.
Wondering you know some of the deficiencies that the FDA had mentioned and that you guys are aggressively addressing right now could you provide some color as to you know.
Those deficiencies something that's I guess specific to one the facility itself or is it something that you know it kind of pertains to how one would manufacturer we're still finishing biologic personal small molecule and I guess as a bit of a check the box follow up to that could you also remind us was the prior.
Prior BLA with well back in 2019, I believe was that a process, where the inspection had already taken place or where are you guys with that I guess, you know coming into this particular inspection.
Yeah, well, let me firstly I'm not going to go into the specifics of the deficiency until we meet with the FDA. So I can we can provide you with clear clear clear information.
Timeline, but most of the time line, but also they exactly what what would you have to do on October <unk>, but you are correct as you said and as we.
As reported we have started working on on those deficiencies are the remediation of such that you asked about the prior BLA if you recall.
When we when we first submitted the original BLA what had happened is it was during the government shutdown that probably don't recall that sat and then they had a they had 60 days to get back to us and what they did is when they went through the BLA. They hadn't started the actual review, yes dad and accepted the file yet so.
They did is they contacted US and said look we want some additional information it was more information that they wanted on the on the manufacturing side. It was manufactured but it is information at the time that they were looking for and we had to go and get that information for them. So basically what they told US. They said look if you just leave it as it is and by the way they wanted some <unk>.
<unk> from Korean in a different way than some other tables things like that so they told US look in this for me wouldn't accept it. So you can wait for us to not accept it or you could voluntarily fix this stuff and resubmit and that's what happened. So no there was never an inspection.
Prior to that because it wasn't the firewall isn't accepted at the time.
Understood. Thanks for providing that clarification and thanks again for taking the questions.
Well, thank you Josh.
Our next question comes from the line of Ren Benjamin from JMP Securities. Your line is open.
Hey, good afternoon, guys. Thanks for taking the questions.
Just sticking with Relaunches here, Joe can you give us a sense you know.
How many issues are we are we kind of talking about here is it just like a handful.
And is there any way to kind of bookends.
How long this could take and I guess just related to that you mentioned that you had outside experts you had mark.
Inspections that were ongoing where these issues identified during the mock inspections or are they completely out of the blue or was it like the FDA raised the bar on what you thought might have passed I don't know it just for whatever reason.
Oh, all fair questions ran and first of all on the mountain everything let let us meet with the agency I want to be as transparent as we can and get all of it because we wanted to know what we have you know exactly what needs to be remediated and how long it's going to take again do I think they're all fixable, yes, I'll say this.
We're all trying to do the clock a resubmission normally is a six month clock, but I'll remind yet.
There's not a requirement has to take that long either so let us get get that we'll provide you with more.
More information it would be and what.
Ultimately know more about the timelines et cetera, now as far as your outside experts, yes, we had great experts working there. It was a long time over a year. We did several mock inspections, I think everybody, Wisconsin with it.
That we were that we were gonna past, but you know you never know until they do the inspection and.
They came in I found a few deficiencies what normally happens is they they after the inspection they they give the manufacturer their observations you have 15 days too.
To get back to them on those observations, which are which they did with a lot of help of I 70.
And the outside experts and so I guess, that's where my surprises, but the bottom line is now after I got angry and emotional I said, okay, let's put our head down and fix this thing as quickly as possible.
You can get this drug approved.
Got it and did I did I hear you right in your prepared remarks that there were deficiencies in South Korea, as well as the fill finish manufacturing, which I thought from a prior conversations was actually in California can you just correct me if I'm if I'm if I'm wrong on that no you are correct.
Theres deficiencies at both that are being remediated.
Okay. So it's both both manufacturing plants that are that are being.
Okay, and then how long will it take to prepare the questions that you have for the FDA and submit it well.
Well.
Obviously, we're doing our best for preparing it right now obviously as we speak we're getting the the.
Our Cmos with us to make sure we're asking all the right questions and get those timelines. So all I can tell you that what we're kind of right now we want to get into as quickly as possible as I said earlier, it's within 30 days.
Should meet with US and then we'll have a lot of answers.
So we're getting is on slide as quickly as possible.
Got it. Thank you very much I don't think you were asking.
Why that in advance.
Yeah.
As a reminder, everyone. If you would like to ask a question you will need to press star one on the telephone keypad are.
Next question comes from the line of Maria Mcdonald from Novartis Securities. Your line is open.
Hey, Mike.
Good afternoon, Hey, Tim Thanks for taking our questions.
High level, Joe as you log into the situation, bringing to FDA meeting.
Can you just give us a flavor.
How how the spectrum of NPV for the land as you know from all the way back from <unk> 19 to.
We are in late 'twenty, one and externally obviously things have also wanted like where does it get to a point with you you may consider doing something.
No disruptive and it could be as minimal as you work with a different.
Matter of fact, some partner Hanmi or Youre really just focus exclusively on.
Boise and the earlier stage programs.
Good.
Also of how you guys are thinking about this and then I have a boy yard my question.
Yeah, Great you know, Mike Youre getting right into what we do for a living right is strategy and.
I understand why you're asking I'm kind of glad you're asking that question because obviously strategically.
We have decisions to make but it's way too early for me to give you that strategy I like the way you're thinking of pain based on what happened, which path do you take obviously, let us get with the agency and get these timelines. This down first before I make any strategy decisions, but obviously those are the kinds of decisions you have to make to make the right.
Decisions as you go forward for the company for shareholders et cetera, So let us get let's get all the information and then strategically we're always going to strive to make the right decisions I hope that answers your question.
Okay No no. Thank you for the color and then on poorly we're just curious.
There are a couple of conferences before the end of the year. So any color on you know depending on where we are with the outside Sweden to be then you might be with cohort four and five.
What might be.
Some of these medical conferences to keep people in my commentary.
Yeah, well first of all why don't you take that.
Sure.
Youre correct as the number of conferences upcoming the only thing I'll say is that.
No.
Uh huh.
They forget amount of data here that the accumulating some of the data that are quite interesting and maturing.
Is the QD dosing parts and cohort four so that data is maturing.
So there's a couple of venue that that potentially could be used to communicate that.
I'd dosing data, a little less mature, but nonetheless quite interesting and also the other thing that we have not really talked about but probably submit mentioned.
There's some interesting data that is.
As the emerging right now and combining oppose the odds and ends with some K Ras inhibitor. So we'll.
I don't want to give you a specific until we have full confirmation but.
Just to mention a few beating you know there's ESMO coming up there is the triple meeting there.
<unk> D C and so again, we'll update you later, but let's just say for now that the next couple of months, we hope to be able to share data with you got.
Great. Thanks, Thanks for the color and look forward to some of these medical conferences. Thanks, so much.
Thank you Mike.
Yeah.
And there are no further questions at this time, let me turn the call back to Mr. Joseph Jordan for closing comments.
Thank you operator, and I really appreciate it everybody.
Questions everybody.
Interest in the company and I.
I look forward to updating you more about rollout. This after our FDA meeting we appreciate everybody's got it.
I'm on a call with that operator, I'm going to go ahead and shut down.
Yes, Sir This concludes today's conference call. Thank you all for participating you may now disconnect.
Thank you.
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Good day, and thank you for standing by welcome to the spectrum Pharmaceuticals second quarter 2021 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session. It's also a question during the session you will need to press star one on your telephone keypad.
If you require any further assistance. Please press star zero I would now.
I would like to hand, the conference over to your Speaker today, Mr. Kurt Gustafson, Chief Financial Officer. Please go ahead.
Okay.
Thank you operator, and good afternoon to everyone. Thank.
Thank you for joining us today for spectrum Pharmaceuticals second quarter 2021 financial results Conference call.
Our second quarter financial results press release was sent out earlier this afternoon and is available on our website.
W. W. Dot S P P Iraq dotcom.
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 risks and uncertainties, which may cause the 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 Turgeon CEO of spectrum.
Thank you Garrett and good afternoon, everyone and thank you for joining us and thank you for your interest in spectrum.
As most of you are aware specs.
Spectrum received the complete response letter from the FDA last week regarding the BLA for a lot of us seeking an indication for the treatment of neutropenia in patients receiving myeloid suppressive anti cancer drugs.
The entire company is greatly disappointed by the CRA.
However, I can assure you that our team is already working closely with our partners to resolve this year.
The CRM side of deficiencies related to manufacturing at the bulk manufacturing facility.
Which will need to be remediated and indicated that re inspection will be necessary.
The CRM also cited deficiencies that the fill and finish facility, which will mean he needs to be remediated.
We're in communication with our Cmos and our remediation work is already underway.
Company is taking further clarification from the FDA regarding the rebate rebate remediation timelines and plans to meet with the agency as soon as possible.
<unk> did not cite any need for a new clinical trial.
We look forward to providing an update following this engagement with the FDA.
Now, let me shift as opposed to our other late stage pipeline asset spectrum policy and the program has continued to make great progress in 2021, and we are advancing to a very important milestone the submission of the NDA.
The NDA for <unk> that will be based on the positive data from cohort two of the Zenith Twentyish study.
Cohort evaluated previously treated patients with non small cell lung cancer with her two exon 20 insertion mutations and met the Prespecified primary endpoint in these patients.
Oh yeah.
Track designation, an indicator of the medical need that this drug may be able to alleviate for patients with this terrible disease for which there is no approved therapy.
An additional advantage of fast track designation is the ability to add more frequent interactions with the agency.
During the second quarter, we took advantage of this designation to meet with the agency and Dr. Francois will update you further.
We remain on track to submit the pose the NDA later this year.
Our recent data presentations at ESMO Cat ACR and <unk> shows that twice daily dosing data appears to provide a significant improvement in both efficacy and tolerability.
And with that I'm going to turn the call over to Dr. Francois Lebel, our CMO for an update on our clinical development progress proposed Aetna Dr. Labelle.
Yes, good afternoon, everyone I'm glad to be with you on today's call. Joe has provided you the update on <unk>. So I will focus on both.
The submission for our NDA under fast track designation is well underway and planned for later this year.
Will be based on our positive data with QD dosing from cohort two.
<unk> clinical trial, we recently added a type b meeting with the FDA.
Yeah.
Do you agree on the data package to be provided in the submission.
The submission will be aiming for an indication the treatment of patients with <unk> exon 20 insertion mutation.
Non small cell lung cancer, and we believe caused the opt in there that has the potential to be first to market for this indication in an area of great unmet medical need.
Part of our type C meeting I am pleased that the FDA agreed that we can include our recent data on dose.
At the <unk> meeting in June we presented data on patients with brain metastasis.
This analysis look at the result for 284 patients from cohort one two and three.
Of which 36 patient at brain metastasis.
Yeah.
Three of these patients.
8% achieved intra cranial complete responses brain metastasis occurs frequently in non small cell lung cancer, and even up to 25% of patient.
And is associated with short survival.
Patient in this analysis received posey at a dose of 16 milligram once daily these.
These data showed clinically meaningful DNS activity posed the treated.
Non small cell lung cancer patients with CNS metastasis.
With either Egfr or <unk> exon 20 insertion mutation.
In April we presented data at the ACR from cohort five was the zenith two trial. These result provided further support of our hypothesis around <unk> dosing.
For the 38 patients.
We received 16 milligram per day and randomized to either close the 16 milligram QD or eight milligram B I D and cohort five improve response were observed in the IV arm with 31, 6% of patient.
Reaching a partial response, which represents near doubling of the response rates are there.
Gerard to refine the minimum effective starting dose demonstrated activity.
But the eight milligram B I D perform best.
A clinically meaningful improvement in Tolerability was also observed.
Great three or I or related adverse events were reduced by approximately 60% would be IV dosing.
Those thing at eight milligram twice a day also allowed for an improved rate of dose reduction and interruption.
As a result and cohort five we are dosing patients exclusively at eight milligram B I D.
Cohorts four of the Zenith two clinical trial is continuing to enroll well at eight milligram B I D.
First line treatment.
During the balance of the year, we expect to meet our key regulatory milestones and have additional <unk>.
Data readout, we plan to provide you with updates on our progress in the coming months.
I will now turn it over to Kurt for a discussion of our second quarter financials.
Thank you Francois.
Our SG&A expense for the second quarter of 2021 was 15 million versus $14.7 million in the previous year. We have continued to delay additional investments in our commercial infrastructure until we gain clarity on the rollout of disapproval.
R&D expense was $29.1 million versus $21.7 million due to increased program costs, primarily associated with <unk> as well as slightly higher personnel related costs.
Our net loss for the quarter from continuing operations was $49.9 million or <unk> 32 per share.
Versus $32.2 million or <unk> 29 per share in the comparable period of 2020.
On a non-GAAP basis, which primarily backs out stock compensation costs and the change in the value of our equity securities are loss for the quarter was $39.3 million or <unk> 25 per share versus $31.8 million or 28 cents per share in the prior year period.
We ended the second quarter with approximately $159 million in cash plus marketable securities compared to $163 million last quarter.
Operating cash burn for the quarter was $29.7 million, which is consistent with where we've been the last few quarters.
During the quarter, we received net proceeds of approximately $31 million from equity issued off of our ATM agreement.
With that let me now hand, the call back over to Joe.
Thank you Dr. Francois Thank you Kurt.
I'm very disappointed in the latest decision of our Lantis, we're committed to working with our partners and the FDA to resolve these issues as soon as possible.
I am pleased with the strong and steady progress spectrum continues to make on our <unk> development program. We are actively preparing our NDA submission proposing and we're planning to share additional results from our ongoing cohorts. The zenith 20 clinical trials later this year and with that operator, I'd like to open up the call to questions.
Yes, so as a reminder to ask a question you will need to press star one on your telephone keypad.
Please standby, while we compile the Q&A roster.
Yeah.
Our first question comes from the line of Marty Raycroft from Jefferies. Your line is open.
Hi, Mark Hi, everyone, Hi, Hi, Joe.
Hi, Thanks for taking my questions.
Maybe first question on <unk>.
<unk>.
Wondering if you can provide.
A little bit more clarity on what next steps could look like there.
If it's possible for FDA to answer some other questions by reviewing documents from hanmi or potentially doing additional follow up virtually or would they have to go back to the side. If you can provide any more clarity there.
Yeah listen I.
I Love your question because they are all important things, obviously, Laurie but first of all the FDA. The next step youre asking what the next step.
As we're preparing the questions sending them to the agency requesting a meeting because the most important next step to answer everything you are asking is having that meeting with the agency.
And because when we have a chance to clarify that that's everything that you asked with the FDA.
The extent.
How we deficiencies, how we answer those how quickly the timelines the most important thing.
Once we meet with them will be able to clarify all the manufacturing deficiency, the estimated timelines and as far as asking could we do it a different way than a physical inspection don't know the answer to that is certainly one of the questions would be asking one with the agency great question.
Got it and.
It sounds like.
At base case, they would not.
Not really question you to do an additional study and maybe if you could just talk more about your confidence too.
Getting this issue resolved and.
And also wanted to ask the questions. We had two is just on communicating with Hanmi I guess, what as Jaime said about.
The situation have they provided any additional clarity on.
On what FDA could be looking for on their end.
Yeah, let me start with the confidence.
Confidence that I think youre asking are these things fixable and we believe it all the deficiencies and the items can be Remediated Theres no question I'm confident they can be remediated, but I, obviously want to gain additional clarity with the agency I got to keep going back to that until we do meet and.
Normally that meeting once you submit it takes within 30 days.
The agency will meet with you. So I am confident that we can that we can fix these remediation that you asked about meeting with Hanmi of course, we've already met with Hanmi.
Ongoing we're working together very closely I can even tell you as I said earlier, our remediation process has already started so we're already well into working with omni on the remediation.
I want to clarify everything and give you those timelines youre looking for.
Got it that's very helpful. Thanks for taking my question and I'll hop back in the queue.
Thank you Mark.
Your next question comes from the line of Alethia Young from Cantor. Your line is open.
Hey, guys. Thanks for taking my questions.
Maybe just a couple one.
Just can you talk to like.
More specifics on the FDA comfort with the clinical data package that you provided like was there anything in the complete response letter that indicated that you know that part of it with at least crossed off or any color. You can provide from that and then the second question is it.
It isn't supposedly out in debate in the same facilities. So I guess you know how some of the I guess if he resolved. These issues for alarm does is it does it help them proposing or how does the how do we think about that thank you.
Yes, yes.
First of all on the FDA clinical what I can tell you is they did not request additional clinical trial I think anytime you resubmit any new safety data or anything you had you would you would put into that but there was no <unk>.
<unk> focused.
The remediation are focused around manufacturing.
Now as far as as Paul was the you asked asking the question. We did license policy from Hanmi and I'll remind you. It's a small molecule. So it's a different manufacturing process, but that should actually manufactured at another South Korean company.
Okay.
Okay, and just as a follow up to that I guess on the first.
The first part like.
How do you.
How do you know that like.
It sounds like you know there were like a year that passed I guess is the best way to put it and was it just maybe a lack of communication with hanmi or were they not you know the FDA didn't communicate like I definitely do I figure out I know there was ample amount of time with them just not being able to get over that you review it was that the factor or were they just not communicative.
Yeah.
I don't know if communication along the way they don't really communicating this was actually you are right. It was actually over a year.
For the for the actual when when originally they were going to inspect the plant now during the year, we didn't sit still I can assure you we have outside.
Experts in there we did several mock inspections. We you know I thought we were going to get approved.
I'm not going to lie.
I expect it to pass however, the reality is they found some some deficiencies they want to be fixed.
And we're going to work real hard work quickly to get those fixed fixed as quickly as possible I do think they are fixable.
Okay, great. Thank you.
Thank you Alicia.
Okay.
Our next question comes from the line of Michael Smith from Guggenheim Securities. Your line is open hi.
Hey, Michael.
Hey, guys. This is actually Charlie on for Michael Thanks for taking the questions.
Sorry to hear about the recently launched this news, but Tom I guess my first question on posing so it does sound like cohort two NDA is still on track for this year could you provide a little bit more color, perhaps around how I think enrollment for cohort four has yet to be completed I guess, where are you guys with that and how should.
We think about near term timelines. Thanks.
First of all why don't you take that.
Sure.
So Charles Thanks for the question we've communicated before that we were pleased with the enrollment in cohort four we've also indicated that we had 49 patients enrolled.
60 milligram once daily and as you know.
We are now.
Enrolling we'd be IV dosing at eight milligram bid dosing I think importantly.
You know as indicated in our formal part of the presentation here is that one of the key question. We add on type C meeting was whether or not the FDA would accept that we provide them with some of the information about dosing as I'm sure you're pretty.
Sure given the signal positive single, we had seen would be IV dosing.
We felt that it would be good to be able to incorporate some of that information in the filings.
And we've indicated today that new information that the FDA agreed that we can provide.
This information now.
Critically.
That doesn't mean necessarily that it is going to find its way into the label, but it certainly gives us a chance to present, the data and the improvement in efficacy and safety profile. So we think thats an important win and.
You know, it's going to obviously be subject to the agency reviewing this data et cetera, and so we'll see where they come out.
But that.
That's where we are right now.
I feel I've answered your question, but maybe you want to come back with.
We're questioning.
Got it alright, thanks for that and I guess, my second question back to <unk> and as a bit of a follow up to <unk>.
Prior question I'm kind of.
Wondering if some of the deficiencies that the FDA had mentioned and that you guys are aggressively addressing right now could you provide some color as to.
Those deficiency, something Thats I guess specific to one the facility itself or is it something that.
Kind of pertains to how one would manufacturer we're still finishing biologic personal small molecule and I guess is a bit of a check the box follow up to that could you also remind us what the.
Prior BLA with well back in 2019, I believe was that.
The process worthy inspection had already taken place or where you guys would that I guess, you know coming into this particular inspection.
Yeah, Let me firstly I am not going to go into the specifics of the deficiency until we meet with the FDA. So we can provide you with clear clear clear information on.
Timeline, mostly timelines, but also they exactly what where you have to do on October <unk>, but you are correct that as you said.
Reported we have started working on on those deficiencies are the remediation of such that you asked about the prior BLA if you recall.
When we when we first submitted the original BLA what had happened as it was during the government shutdown as you probably don't recall that sat and then they had they had 60 days to get back to us and what they did is when they went through the BLA. They hadn't started the actual review, yes, they add an accepted the file yet so.
What they did is they contacted US and said look we want some additional information it was more information that they wanted on the on the manufacturing side. It was manufactured but it is information at the time that they were looking for and we had to go and get that information for them. So basically what they told US. They said look if you just leave it as it is and by the way they wanted some.
Translations from Korean in a different way than some other tables things like that so they told US look in this for me wouldn't accept it. So you can wait for us to not accept it or you could voluntarily fix this stuff and resubmit and that's what happened. So no there was never an inspection.
Prior to that because it wasn't the firewalls and accepted at the time.
Understood. Thanks for providing that clarification and thanks again for taking the questions.
Thank you Josh.
Our next question comes from the line of Ren Benjamin from JMP Securities. Your line is open.
Hey, good afternoon, guys. Thanks for taking the questions I.
I guess, just sticking with relentless here, Joe can you give us a sense. How many issues are we are we kind of talking about here.
Like a handful.
And is there any way to kind of bookends.
How how long this could take and I guess just related to that you mentioned that you had outside experts you had mark.
Sections that were ongoing where these issues identified during the mock inspections or are they completely out of the blue or was it like the FDA raised the bar on what you thought might have passed that analysis for whatever reason.
No all fair questions ran and first of all on the amount and everything let let us meet with the agency I want to be as transparent as we can and get all of it because we want to know what we have you know exactly what needs to be remediated and how long it's going to take again do I think they're all fixable, yes, I'll say this.
Yes, we're all trying to do the clock a resubmission normally is a six month clock, but I'll remind you.
There's not a requirement has to take that long either so let us get get that we'll provide you with more more information and then well also.
Ultimately know more about the timelines et cetera.
As far as your outside experts yet we had great experts working there. It was a long time over a year. We did several mock inspections, I think everybody, Wisconsin with it.
That we were that we were going to past, but you never know till they do the inspection and.
They came in I found a few deficiencies what normally happens is they after the inspection they they give the.
<unk>.
Our observations you have 15 days too.
To get back to them on those observations, which are which they did with a lot of help lavazza.
And the outside experts and so I guess, that's where my surprises, but the bottom line is now after I got angry and emotional I said, okay, let's put our head down and fix this thing as quickly as possible and get this drug approved.
Got it and did I did I hear you right in your prepared remarks that there were deficiencies in South Korea, as well as the fill finish manufacturing, which I thought from a prior conversations it was actually in California can you just correct me if I'm wrong on that no you are correct.
Theres deficiencies at both that are being remediated.
Okay. So it's both both manufacturing plants that are that are being.
Remediate, Okay, and then how long will it take to prepare the questions that you have for the FDA and submit it well.
Well, obviously, we're doing our best we're preparing right now obviously as we speak we are getting the.
Our CMO is with us to make sure we're asking all the right questions and get those timelines. So all I can tell you that what we're kind of right now we want to get it as quickly as possible as I said earlier, it's within 30 days they should they should meet with US and then we will have a lot of answers.
So we're getting is on slide quickly.
Got it. Thank you very much good luck why that in advance.
Yeah.
As a reminder, everyone. If you would like to ask a question you will need to press star one on the telephone keypad. Our next question comes from the line of Maria <unk> from <unk> Securities. Your line is open.
Hey, Mike.
Good afternoon, Hey, Joe Thanks for taking my questions.
High level Joe.
Well again, the situation, bringing to FDA meeting.
Can you just give us a flavor.
How the specter of Mbv's water the lawn business from all the way back from Glen <unk> 19 due.
We are in late 'twenty or 'twenty, one then externally all of this.
Things have also wanted like where does it get to a blind with.
You may consider doing something.
Disruptive and it could be as minimal as you work with a different bar.
Matter of fact, some partner Hanmi, all you're really just focus exclusively on <unk>.
It was EMEA earlier stage programs.
Good.
Also of how you guys are thinking about this and then I have a boy you're asking that question.
Yeah great.
I think youre getting right into what we do for a living right is strategy and.
I understand why you're asking I'm kind of glad you're asking that question because obviously strategically.
We have decisions to make but it's way too early for me to give you that strategy I like the way you're thinking of the.
Based on what happens, which path, we take obviously, let us get with the agency and get these timeline. This down first before I make any strategy decisions, but obviously those are the kind of decisions you have to make to make the right decisions. As you go forward for the company for shareholders et cetera, So let us get let's get all the.
Formation, and then strategically we're always going to strive to make the right decisions I hope that answers your question.
Okay No no. Thank you for the color and then on poorly we're just curious.
There are a couple of conferences before the end of the year. So any color on you know depending on where we are with the abstracts. We took me then you might be with cohort four and five.
What might be.
Some of these medical conferences and keeps it on bank common thing.
Yeah, well first of all why don't you take that.
Sure.
Correct. There is a number of conferences upcoming are the only thing I'll say is that.
We have seen.
Significant amount of data here that the accumulating some of the data that is quite interesting and maturing is the QD dosing parts in cohort four so that data is maturing.
So there's a couple of venue that that potential.
Potentially could be used to communicate that.
I'd dosing data, a little less mature, but nonetheless quite interesting and also the other thing that we have not really talked about but probably submit mentioned is that there's some interesting data that.
The emerging right now and combining oppose the odds and ends with some K Ras inhibitor. So we'll.
I don't want to give you specific until we have full confirmation but.
Just to mention a few BD.
You know, there's ESMO coming up there is the triple meeting their ACR and <unk> and so again, we'll update you later, but let's just say for now that the next couple of months, we hope to be able to share data with you guys.
Great. Thanks, Thanks for the color and look forward to some of these medical conferences. Thanks, so much sure.
Thank you Mike.
Yeah.
And there are no further questions at this time, let me turn the call back to Mr. Joseph Jordan for closing comments.
Thank you operator, and I really appreciate it everybody.
Questions everybody.
Interest in the company and.
I look forward to updating you more about rollout. This after our FDA meeting we appreciate everybody's data.
I'm on a call with that operator, I'm going to go ahead and shut down.
Yes, Sir This concludes today's conference call. Thank you all for participating you may now disconnect.