Q3 2021 CASI Pharmaceuticals Inc Earnings Call
Hello, and welcome to SaaS, He pharmaceuticals announces third quarter 2021 financial results.
All participants will be on listen only mode should you need assistance. Please signal a conference specialist by pressing the star can you followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on you touched on phone because I'm sorry. Your question. Please press Star then two please note today's event is being recorded.
I would like to turn conference over to Jacob Michelle Michelle. Please go ahead.
Thank you operator, good morning, and welcome to Cassie third quarter Conference call earlier today, Cathy issued a press release, providing the details of the Companys financial results for the quarter ended September 32021. This press release is available in the Investor Relations section of the company's website.
Today's call will be led by Doctor way will be our chairman and CEO along with Mr. Lei Zhang President Dr. Alexey Koski, our Chief Medical Officer, and Dr. Jim Goldstein, our senior Vice President of business development.
I'll be available to answer questions during the Q&A portion of this call.
As a reminder, our remarks today will include forward looking statements, including our business plan objectives and milestones.
These forward looking statements are not a guarantee of future performance and therefore, you should not put undue reliance upon them.
These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those projected or implied in our forward looking statements.
For a description of important factors that could cause actual results to differ we refer you to our statements in our SEC filings. It is now my pleasure to turn the call over to our chairman and CEO, Dr. Wei movie Doctor He.
Thank you Jack good morning, everyone and thank you for joining US I'll walk began the call with a general update focusing on our lead programs and near term catalysts.
Followed by our third quarter financial highlights.
We are happy to answer any questions during the Q&A session not covered in our remarks.
We are all very pleased with the progress which has been made in the third quarter.
And I'm proud of all functions of our team for their continued dedication and focus.
We are well on our cost in building, a leading and financially strong pharmaceutical company.
KFC is miss it is to bring innovative medical solutions to meet the unmet medical needs around the globe.
More specifically we are initially executing our strategy leveraging global innovations to address the unmet needs of China's aging population. The China strategy is likely one of the most interesting medical innovation opportunity.
In our lifetime.
First of all China has the world's largest population.
Secondly, China's pharmaceutical development process is progressed simply harmonizing waves that global developed economies, hence a vast the patient population provides.
So that did clinical trial resources for global innovations chassis is deployed in such a strategy to bring life changing products to patients one product at a time.
With an initial focus in the hematology oncology market.
We will use our product pipeline.
Illustrate our strategy at all.
<unk> execution.
The first product we were able to successfully bring to market is bala in China.
Oh, you've umbrella.
We are pleased to report our mallard revenues of $8.1 billion.
The third quarter.
92% increase from a year ago.
On the continued growth we remain confident in our guidance for full year 2021 revenue growth to exceed 80%.
Oh, but 2020.
<unk> is approved in China for use as a high dose conditioning treatment.
<unk> hematopoietic stem cell transplantation in patients with multiple myeloma. It is the only form of injectable mouthful commercially available in China.
Following Eva Malus launch.
We work closely with Kols to drive market awareness and a speedy yet adopt adoption in the Chinese market.
In 2020, our first full year more than 2600 patients were treated with Eva Bala first is 800 prior to the launch of EBA Mallow.
<unk> is not just the mouth, but it is a proprietary formulation with patent protection until at least 2030.
It's a post marketing study bought you've a ballard in China.
Has completed accrual.
The clinical study report is being finalized for submission so far as expected. The data. We are seeing is consistent with published studies of Eva dollar.
Through <unk>, we have built a strong commercial team of more than 100, hematology oncology cells and medical marketing specialist.
In China.
They have established themselves with the successful launch of our first commercial product.
Our prepared to efficiently launch our future commercial assets.
Our high quality specialty sales and marketing team in China in hematology oncology market is a major competitive advantage for casting.
We have established access to us too.
The actual number of Kols, who can advise us on the unmet medical needs of all patient population.
We also are becoming the partner of choice.
What is probative biotech companies, who have no presence in China.
A few words about our COVID-19.
With regard to our CD 19 car T. Our path to nurture Ventas continues to make excellent progress with this current ongoing trucks as you may recall C. N. C. T 19 is an autologous CD 19 car T investigative product.
Which kashi has global commercial and profit sharing rights.
C N C. T 19 is being developed by Joe Ventas as a potential treatment for patients with Hematological malignancies, which express CD 19, including B, a L L a and B and H L.
P. M. C. T 19 has been developed and will be manufactured locally which greatly distinguishes it from other car T 19 therapies.
And manufactured in pod outside of China.
Drug and cell therapy.
<unk> is a very important issue for patients in China.
Equally full premium and innovative products comparable CD 19 therapies that are developed and components manufactured outside of China.
Subject to certain ex China CMC.
The high cost of goods, making the price point significantly higher than where we believe C. N C. T 19 can be priced.
Recently debentures recently completed a series C financing gone through which it raised more than.
It'd be $410 million.
Milling, which is approximately 63 million U S. Dollars. We believe this financing will allow for our partner to ventures to continue the adopt patient about car T therapy in China.
We continue to see very encouraging activity entrenches us on track to file an NDA with the N and P. Eight in 2022.
Next I'll address our other key assets.
Yeah, I need one of those three anti CD 38, the idea one O three and four.
Fully human I G. One anti CD 38 monoclonal antibody <unk>.
And diving as unique epitope is selected to have strong H E. C. C activities against CD 38 positive malignant cells, and a waste and reduced C. D. C activity weighs a potential reduction of infusion reactions.
Zerbe with existing anti CD 38 treatment.
In June the first patient was enrolled in our phase one study.
This is a dose escalation and expansion study in patients with previously treated relapsed or refractory multiple myeloma.
Yeah do you want those three has previously shown encouraging preclinical efficacy.
A favorable preclinical safety profile and the greater antibody dependent cellular.
Cellular cytotoxicity.
Little toxicity activities.
<unk> and other anti CD 38 antibodies.
We are hopeful for.
This will translate into great patient benefit.
Phase one trial is currently enrolling in cohort three.
And the expected to generate valuable information and it has the potential to provide early evidence of clinical activity in the treatment of patients with multiple myeloma.
Yeah, 12 O six in.
In October 2020, we in licensed B I 12, those six our first in class for fully human monoclonal antibody that targets FC gamma ought to be receptor.
The greater China market.
12 O six has a novel mode of action.
Walking the single inhibitory antibody checkpoint receptor FC gamma ought to be to unlock anti cancer immunity in both liquid and solid tumors.
The FC Gamma receptors are antibody checkpoints that modulate the efficacy of two months out.
Iraq, the targeting antibodies and immune checkpoint targeting antibodies used in cancer immunotherapy.
Yeah, I 12 O six can potentially be used with all therapeutic monoclonal antibodies that rely on a D. C. C. C D C for efficacy.
The <unk> 12 O six is bio invents lead drug candidate and is being investigated by bio embed in our phase one two.
Sure.
In combination with anti PD, one keytruda instead.
In solid tumors and a phase one two trials in combination with rituximab for the treatment of non Hodgkin lymphoma.
Recently.
Invent announced announced foods a positive data that will turn from the ongoing dose escalation phase <unk> trial.
With the July 21 cutoff yeah.
Yeah, I 12, six in combination with Rituxan Mab demonstrated an objective response rate of 50%.
With three complete responses and there's three partial responses.
In 12 patients evaluated for therapeutic benefit.
The treatment.
Stabilized disease in one additional patient gave them a disease control rate of 58%.
The complete responses also appear to be last long lasting.
Our standing beyond 18, and 24 months.
In two patients completed the study.
Previous road map treatments without P. I 12 O six had a sale in these patients.
Together with bio embed we plan to continue to develop the <unk> 12 O six in both liquid and solid tumors.
With Kathy responsible for development and commercialization in greater China.
We plan to leverage our existing expertise, including clinical and medical teams and established relationships with hematology Kols hospitals medical centers and pharmacies to a solid rate development and commercialization OPI 12 O six in China.
Our lead indication will be 12 or six in combined nationwide's ROE toxin mab in patients with relapsed refractory NHL Kathy has submitted and in R&D.
Yeah 12, both fixed with the N M P H in 2021.
Next a few words on C B 5339.
In March 2021, we acquired C D.
5339, a first in class.
97 inhibitor Franck <unk> therapeutics for the greater China market C.
C. B 5339 is an oral second generation small molecule.
P 90, savvy cuboidal cleaves novel approach to inhibiting P 97 in Hematological malignancies is supported by extensive preclinical research and early clinical data.
B 5339 represents a promising new target for selectively targeting P 97 in cancers and it is a complementary inhibition addition to our pipeline of hematology oncology asset.
<unk> 5339 is currently being evaluated by our partner in the phase one clinical trial in patients with AML and Mds together with <unk>, we plan to jointly develop C. D. Five suites three nine in AML as the initial.
<unk> with Cassie responsible for development and commercialization in greater China.
He has submitted a pre IMD.
Currently under review.
We look forward to the joint development of C. D. Five suites rely with our focus on helping accelerate the development program by initiating trials.
Current and potential new indications in China.
Coyote pop as a note.
Our site cheaper asset is continuing to progress South Teapot was introduced to Kathy through our leading tail out in China.
China's steel does not have a high quality high dose injectable form outside people.
Kathy license the site keep up product from Rams Ramsey.
The regulatory submission for two indications are in progress.
With the site keep our registration study starting as quickly as possible after regulatory authorization South Teapot, a chemotherapy agent has multiple potential indications, including.
A conditioning treatment for use prior to chemo stat points hematopoietic stem cell transplant.
This completes the update on our key pipeline assets.
Now I will give a few financial highlights.
With that a few words on our financial highlights for our third quarter. Our press release contains more details of our financial results rather than read through all of these results my comments today will address the key highlights.
Revenue consists of product sales of the Evo bylaws that launched in 2000.
19 revenue was $8.1 million for the three months ended.
September 30, 30th 2021 compared to $4 2 million for the three months ended September 30th 2020.
Revenues increased by 93% in the third quarter of 2021.
Compared to the same quarter.
In.
2020, 'twenty due to the continued growth in <unk> south.
And cost of revenue was 3.4 million for the three months ended September 32021, compared to 1.8 million for the three months ended September 32020.
Which includes royalty payments of $1 6 million and the 0.8.
8 million for the Sam period.
Cost of revenue, excluding royalty was 1.8 milling and one 1 million for the three months ended September 32021 and 2020.
Cost of revenue, excluding royalty as a percentage of revenues decreased significantly in the three months ended September 30th two.
1021.
Compared with the three months ended September 30th 2020, due to the alternate alternative manufacturer in place.
Our team in a considerable decrease in the unit cost of inventories of Uva Mala.
As of September 30th 2021.
You had a cash and cash equivalents of 53.1 million compared to 57.1 billion as of December 31st 2020.
At our current burn rate the company has sufficient resources to fund its operations beyond the 2022.
We continue to be extremely thoughtful on how we deploy our cash position.
With a focus on building shareholder value.
Now I will turn to the operator for question and answers.
Yes. Thank you.
This time, we will begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Time, we will pause momentarily to assemble the roster.
And the first question comes from Leland <unk> with Oppenheimer.
Good morning, Thank you for the update and for taking my question.
Want to ask about the commercial organization in China on the ground if you could comment on.
That may have expanded or be growing.
As you've been continuing to grow Eva Mellon sales and how we should think about that.
The organization, maybe continuing to expand.
As you know C. N C. T 19 makes its way to the market also have a question with respect to further business development deals obviously, you've had a nice.
Series of those to date and wanted to ask as we get into 'twenty 'twenty. Two should we expect the pace of these types of third party deals to be the same.
How should we think about kind of additional BD for Kathy. Thank you.
Thank you so much.
The commercial team, we are actually expanding our commercial team pretty aggressively.
Preparing for the car T 19 launch the beauty of this strategy is first of all as our revenue of about my like Rose.
We believe you know beyond a $40 million revenue, we actually the first drug Eva Mallard will cover the cost of our commercial team.
In China, so, which put us put us in a very unique position.
And Eva Mallard being a very niche product, we do not believe moving forward in year four year five would need a.
Huge commercial team to maintain the product so our growth in commercial team really is a prepared to launch additional hematology oncology product.
Potentially next year and the year.
The year. After so we are truly building a commercial engine.
In China to launch one product after another and hopefully you know with our second product launch, we probably will achieve potential profitability. So I don't know if that answers. Your question. So our team is still expanding.
In that regard.
And really is to prepare for our future product launch.
<unk>.
Regarding two in licensing we are very picky in terms of what kind of products, where we're licensing we're licensing because we really wanted to fit our beachhead. Cathy is a is literally a startup company and it was the first product on the market.
So when we look at the global asset, we'd really want to look for asset can be extremely synergistic with our commercial strategy. So our two product most likely will be in the pipeline of commercial launch is COVID-19, and Scioto pop.
These all fit very well with our commercial team.
Our commercial team talk to the Sam Kols.
You know.
Day over day basis, because the people are using Eva bylaw, the doctors using Eva Ballard will be the Sam Doctor using COVID-19, and this Iot part. So we are really looking for a lot of products can fit it into this commercial engine.
So so we will you know so when you will be you know you have ever seen.
We will be a little bit opportunistic.
When we see you know a lot of good you know product fits our pipeline, we probably will be aggressive, but if after why we don't see it with my slow down. So we don't really have a defined the pace.
In the SaaS, but you know ideally we'd like to look for what we call. The 20 carat Diamond how do we how do we license our product that has tremendous upside potential.
I hope I answered your question.
Yeah. Thank you very much over there very helpful and congratulations on the progress.
Thank you. Thank you.
Thank you and the next question comes from Sean Lee with H C. Wainwright.
Well good morning way wound congrats on the great quarter.
Yes. Thank you.
My first question is on P. M. MELA, So you mentioned that.
2600 patients were treated last year compared to 800 prior to people Mento launched so could you update us on how many patients were treated in the first nine months of this year and how much how many do you think the upper limit is for this indication.
Oh it does actually.
We this year were planning to treat about five solid patient for the whole year.
And so you.
You know you're you're Quizzing me on the exact number Larry do you know the exact number for the.
Plus nine nine months.
It's almost 4000, the paces that we've traded already.
Yeah. So for all that you know so our current goal is to you know to exceed the 10000 patients per year.
So the you know theres a lot of other utility for.
There's some orphan indication for this drug so at least for the current indication you know we are targeting at.
At least you know more than 10000 patients for now, but obviously the potential in China is much bigger because in the U S. You know with a little bit over 300 million people U S. Actually does more than 10000 autologous transplant per year, China has at one point for billing.
People.
And so we believe that the ultimate number would be probably a lot higher but you've amount of steel is considered to be a kind of a premium price drugs. So.
You know as China. This is one reason, we think it's very exciting in the Chinese market as peoples.
Living standard goes up probably the.
Penetration you know will be much higher but right now we are targeting over 10000 patients for you Bob Miller.
Great that's good to hear.
My next question is on the Juventus collaboration. So I think previously you mentioned that they expect to complete enrollment of this registration studies by the end of this year and submit next year. So I was wondering whether the patient enrollment goal is still on track and whether we can expect to see any data releases before they submit next year.
Yeah. We are you know if we are you know the debentures as far as we know because weight, we don't necessarily know all the updates.
It's still moving on.
Are on track to complete the E.
A L L enrollment for this year.
And since China has approved to the COVID-19 for the lymphoma market.
We may be required by a C D E to enroll more patients for the lymphoma market. So we think of the P. A L. L well be ahead of lymphoma trial.
You know for a bunch of renters. So you know at least four P. A L. L. So far it looks like it's still on track to complete by end of the year and submit our NDA next year.
Great.
In terms of commercialization.
To prepare anything special.
In anticipation of those.
Products and are there any special learning so you add that could help in lunch goes smoothly.
What the dosing as you know by the time. This drug is approved Cassie probably will already have more than 200.
Field salespeople at detailing the Kols.
For the sand market.
So so that's one of the preparation, but theres a lot of preparation for four before we launch the drug. So we are already doing a lot of you know.
Kind of a nitty gritty.
Launch preparation.
In China by our team.
We think we will be in a much better.
Better positioned than our competitor in this space, because we have kind of the.
The experience of launching <unk> in this market.
And our team is so specialized in the hematology oncology space and this is really you know we think we will have that advantage.
Thanks that makes it more clear.
My final question is on P. I, a $12 six so with the updated the what was the positive updated phase one results what are your plans for the next steps.
I didn't catch the last part.
Yeah. So what are your plans for the next steps for the drug.
So of clinical development.
Yeah, well I'll leave it to Alex our CMO, Alex are you on the call.
Yeah, we will have another call so to address the question for by $12. Six you know we have a very good established relationship with bio event.
They are proceeding.
Along with the potential.
Yeah.
F D. A end of phase II meeting that's planned for the near future once that is completed.
In collaboration with <unk> with bio event will be moving the program forward as we outlined the I N D equivalent has been filed in China, and so we anticipate that we will be required to have a Chinese specific.
Somewhat truncated PK PD study that will move forward after which we will join the global registration programs that are in conjunction with a violent.
Got it. Thank you for the clarity that's all I have.
Thank you and the next question comes from Justin Long with P. T O J.
Congrats on the product.
Hi, how are you. Thank you progress, especially the robust sales on of a mailer that's quite impressive.
You mentioned that Youre planning to grow.
Continue to grow sales from let's say 5000 patients to over 10000.
So maybe if you could just speak to.
Some of the trends there what will it be more geographies that you're targeting and additional sites.
So it can be used at or is it more kols out reach and as you mentioned kind of the appreciation of.
The health care system in China or are you also expect.
<unk> additional indications for forever Miller.
Well you know, we actually think the cooler and biggest the bottleneck is the transplant unit in the hospital.
Yeah.
You know before we launch give him a lot.
Transplant is kind of you know is not commonly used in China to cheat.
Multiple myeloma people use all of that you know the the drugs.
Developed by Celgene and others.
People kind of you know so right now we kind of have a.
A new task to educate.
<unk> that transplant is actually for a lot of patient is a much better therapies.
I think around 14% of the patients.
The autologous transplant can live for 20 years, it's really a year of.
Our life.
Tianjin.
Intervention for a lot of patients, but because previously these pre conditioning agent was not available in China.
The Doctor kind of has been used to.
Other intervention with all using the autologous transplant. So our task really is to kind.
Re educate the doctors that transplant for a lot of patients is the frontline treatment.
That's really the that's probably the subtle.
China, a lot of the hospitals don't have sufficient chaz plant units.
Physical units to do these type of treatment. So, but we are seeing encouraging trends that you know or that new hospitals are expanding in this direction. So you know so it's gonna be a slow graduates graduate.
You know cut many case and with the doctors and the we are seeing very encouraging trend.
Odd for using this.
This protocol in the sense.
Does that answer your question Justin.
Yeah, that's very helpful and it makes a lot of sense to me and maybe just for my last question have you noticed any trends with the currently available.
Car T cell therapies in China.
Has there been much uptake or is there any kind of pushback on the price of that product currently.
Yeah. So China has approved a two car T 19, one is from Khayat.
Are they as fraud Juno and they are all priced about 1.2 million RMB, which was about 200000 U S dollars.
Which we believe you know it's on the expensive side for the Chinese population, so the adoptees and as far as I know you know this you know as you know.
Less than 50 patient has been treated after these two drugs being approved.
We believe that there's probably largely due to that.
Hi price for now.
And I think the you know in the air.
And you know this type of cell therapy is probably going to take.
You know it takes some time at the $200000 out of pocket treatment in China is going to be a pretty high hurdle.
But but.
Eventually you know.
I think the price will come down.
And Oh, we we believe that we will our price should be significantly less than the current two drugs in China.
Great. That's really helpful. Well, thanks again for taking my questions and congrats on all the progress.
Thank you.
Thank you and the next question comes from that bottom a C. T O S.
Hello.
Please go ahead Mr. Barker your line is live.
Okay.
Alright, well apparently the phone must be on mute. So that actually does conclude the question session. So at this time I would like to return to photo management for any closing comments.
Yeah, well. Thank you again for joining today's call. We have had a remarkable year, thus far at Cassie was progresses.
Across our hematology oncology portfolio, we continue to be encouraged by what we expect it will be hurtful pass it.
We look forward to leveraging our existing commercial infrastructure as we move forward on key business development initiative.
So and we are looking forward to additional product launches.
You know in the near future.
We would like to thank each of you for your continued support in Paas you're doing this.
Exciting period.
Operator, Thank you Wade May now conclude this call. Yes. Thank you that was mentioned the conference has now concluded. Thank you for attending today's presentation.
Your lines.
Thank you so much bye bye.
Bye bye.