Q3 2021 Spectrum Pharmaceuticals Inc Earnings Call
Good afternoon, everyone. This is the operator and today's conference is scheduled to begin momentarily.
Until that time your lines will again be placed on hold thank you for your patience again. This is the operator entities conference is scheduled to begin momentarily until that time your lines will again be placed on hold thank you for your patience.
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Good afternoon, everyone and welcome to the spectrum Pharmaceuticals third quarter 2021 financial results conference call.
At this time all participants are in a listen only mode and later, we will conduct a question and answer session and instructions will follow at that time.
And if anyone could recur assistance during the conference you May Press Star Zero and as a reminder, I would now like to turn the conference over to your host Mr. Kurt Gustafson spectrum, Chief Financial Officer.
Okay.
Thank you operator, and good afternoon to everyone. Thank you for joining us today.
For our third quarter 2021 financial results conference call.
Our third quarter financial results press release was sent out earlier. This afternoon and is available on our website at Www Dot S. P T Iraq dotcom.
Joining me on the call today from spectrum Pharmaceuticals will be Joe Turgeon, President and CEO and Dr. Francois Labelle, our Chief Medical Officer.
Before we get started I would like to reference to notice regarding forward looking statements included in today's press release.
This notice emphasizes the major uncertainties and risks inherent in these 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 Kurt.
No no. Thank you for joining us on the call today I really appreciate your interest in spectrum.
As we start to close in the end of the year, we remain focused on our key corporate priorities.
First to submit the NDA.
D E and second to correct the manufacturing issues identified by the FDA in a roll on to CRM.
Let me start with an update on <unk>, our drug for the treatment of neutropenia in patients receiving myeloid suppressive anti cancer drugs.
Last month, we had a type a meeting with the FDA to better understand the issues there.
Ratified in the CRM.
The CRM side of issues at the fill finish facility and our drug substance facility.
At that meeting we gained clarity that the deficiencies at the fill finish site had been adequately addressed and are no longer a gating item for resubmission.
Regarding the drug substance facility as of today, we believe that Hanmi has addressed all of the efficiency side and the <unk> with the exception of one and we expect the remediation to be completed by the end of the year.
Pending successful completion, we would expect to re file shortly thereafter.
A type a meeting.
Also clarified that the FDA will be conducting an onsite inspection as part of the Resubmission process, We would expect a six month review.
Once we submit.
Well I mean, it's demonstrated working to resolve the issues associated with the CRM. We are continually monitoring the long term long acting G CSF market and we'll be prepared to adjust our business plans as the market evolves.
Now, let me shift over to pose the odds on that.
They're large late stage asset we have in our pipeline.
Submission of the NDA remains our top corporate priority, which we expect to file shortly.
In addition spectrum policy out in a clinical program has continued to make solid progress this quarter with data presented in treatment naive lung cancer patients as.
As well as preclinical data on Posey in combination with K Rad G <unk> inhibitors.
Now to get a more detailed update on our clinical development progress I'm going to turn the call over to Dr. Francis French while about our CMO Dr. Francois take it away.
Good afternoon, everyone I'm glad to be with you on today's call, let's start with our top priority.
The submission of our clothes, you often have NDA under fast track designation is plan for the coming weeks.
It will be based on our positive data with QD dose things from cohort two of the zenith two clinical trial.
Our submission will be seeking an indication for use in patient with previously treated locally advanced or metastatic non small cell lung cancer with her two exon 20 insertion mutations we believe <unk> has the potential to be the first to market for this indication.
An area of great unmet medical need.
We were also very pleased that cohort four was awarded a late breaking presentation at the recent ESMO conference in Paris Doctor corn, the lesson from the Erasmus Cancer Institute in Rotterdam delivered.
Oral presentation on the efficacy and safety of Posey in treatment naive non small cell lung cancer patient or bring her two exon 20 insertion mutation.
This was data from our cord floor of the zenith two <unk> study that included the first 48 patient that received 16 milligram Q D.
Oral starting dose of course, yes. The primary endpoint in this multi center study is what's the are all RR evaluated centrally by an independent image review committee using resist criteria 1.1.
The results were observed were quite strong, which I know are a 44% and a confidence a 95% confidence interval lower bound of 29, 5% disease control rate was 75% median duration of risk.
Bonds was five four months and range from 2.8 to 19.1 months, including a complete response patients with 14 months of duration.
Median progression free survival was five six months.
The most common treatment related adverse events were typical of tyrosine kinase inhibitor as was seen in prior studies.
<unk> three AE, we're rash stomatitis diarrhea, and Paronychia importantly grade three pneumonitis was only seen in one patient with no grade four or five the safety profile was predictable and manageable following these.
First 48 patient we've been dosing patients at the eight milligram bid dosing schedule.
At the ACR NCI AOR Tc Triple meeting in October MD, Anderson presented preclinical data demonstrating the synergistic impact of Posey when combined with K Ras inhibitors in K Ras <unk>.
<unk> mutant specific cell line. The preclinical data showed that inhibition of Egfr heard to her to re enter for signaling was synergistic when combined with K Ras <unk> inhibits these results I liked the imports.
Since of the potent pan inhibitor of the <unk> family of proteins.
We continued to make solid progress on our programs and we will keep you posted as we achieve key milestones through the balance of the year.
I will now turn it over to Kirk for a discussion of our third quarter financials.
Thank you Francois.
Our SG&A expense for the third quarter of 2021 was $12 2 million versus $15 1 million in the previous year as we've looked to more tightly control these expenses.
R&D expense was $20 9 million versus $24 5 million a year ago due to lower relaunches related development activities.
Our net loss for the quarter was $33 1 million or <unk> 21 per share versus $48 5 million or <unk> 37 per share in the comparable period of 2020.
On a non-GAAP basis, which primarily backs out stock compensation costs and the change in value of our equity securities are loss for the quarter was $25 8 million or <unk> 16 per share versus a loss of $35 2 million or <unk> 27 per share in the prior year period.
We ended the third quarter with approximately $134 million in cash plus marketable securities compared to 159 million at June 30th 2021.
Operating cash burn for the quarter was $25 million.
This is lower than prior quarters as we've looked to manage cash more closely.
With that let me now hand, the call back over to Joe.
Yes.
Thank you Dr. Francois Thank you Kurt.
As you can see we are working diligently to push our program forward.
Making great progress on our remediation efforts for Resubmission of our lantis and tracking well towards our goal the policy Aten have NDA submission shortly.
With that operator, I'd like to open the call up for questions. If you could please do that I'd appreciate it.
If you have any questions at this time. Please press Star then the number one on your Touchtone telephone and if your question has been answered or you wish to remove yourself from the queue. You May press the pound key.
And first question comes from the line of Alithia Young of Cantor Fitzgerald.
Alicia Your line is now open.
Hi, This is Emily on for Lee. Thanks for taking our question I guess my first question is do you think there's any risk of COVID-19, but doing the reinfection in person and has the updated kind of guided to how quickly. They could do the re inspection. After you submit the CMC requirements and then maybe also if you can comment on when we can see Dave.
So for cohort four for pose yacht and I'm thinking.
Sure I can like good to hear from you first of all as far as Covid, obviously, I don't know the answer to what's going to happen in the future.
As we as I stated earlier, we should have saw everything remediated by the end of the year, which would mean a early first quarter, we could resubmit. The FDA did say they wanted to do an onsite inspection what I can tell you though is today as an example, you can travel to Korea, we have people going there actively so not sure what will happen when you're covered in the.
Future, but certainly.
Certainly right now you can travel to Korea, so where we're doing it as we should.
So that's the first part of the question. So we don't know exactly when they are out there.
They would send the inspector I can tell you that it would be a six months review.
That doesn't mean it would take six months so anytime after we file they could send a and inspector back to do a re inspection.
Far as that cohort cohort four question first of all why don't you take that.
Thank you for the question. So as you are as you know.
Dosing is ongoing for all our open cohorts right now, including cohorts for which continues to enroll.
And we need to let the data mature.
Further and.
As you I'm sure you understand the team is really focused on the NDA now.
So once we get the NDA and we.
And a lot will annualize some of the additional data as it matures and we'll keep you posted but we don't have a date immediately.
Great. Thank you.
Thank you Emily.
Next question comes from the line of Maria Raycroft of Jefferies. Murray. Your line is now open.
Alright.
Hi, Joe Hi, everyone. Thanks for taking my questions and congrats on the progress.
First question just on the NDA filing.
If you can just talk a little bit more about what youre going to include in the plug and <unk>. Her two exon 20 filing for second line patients and are there any more specific gating factors that need to be completed before you submit this this filing.
Yes first of all I wanted to take that.
Sure.
So we're in good shape.
Obviously, all hands on deck here and as I indicated we expect to be able to file this and.
Next couple of weeks.
The data as we indicated before is the core data is the cohort two we communicated before that the following discussion with the agency they've allowed us to add some of the preliminary data in the dosing from cohort five among others.
And so obviously that will go in the although the NDA is based on cohort two.
A large body of data here.
It's like we have a 21 studies that we have to summarize integrate so that's part of.
The activity that's going on here.
I hope that answers your question. So it's acuity data from cohort two.
And there will be some data in the submission as well.
Got it and further data.
The follow up being cut off or are you still waiting for a final cutoff for data maturing.
Or are you primarily just working on getting the filing together, maybe if you can clarify on that point.
Yes, so whenever you do this you you said that.
We add to we haven't have disclosed the data cutoff, but there was a data cutoff in the past because you have to.
Analyze all the data and get the data in from around the World and remember there was a global study here in multiple other studies.
So there is a definite data cutoff that's in there.
Happens, though and that standard usually what happens is that 120 days. After submission you provide an update on the data.
Have accumulated since the filing.
To the agency and certainly we will do that as well.
Got it Okay and then just.
Last question for me just on the day to day you showed recently on her two treatment naive patients.
Patients at ESMO and the late breaker with 16, Meg QD dose can you just talk more about what the bar for success is in this setting and if you can comment on if there's a prescribed what the prespecified endpoint is.
Sure So as you.
Originally we.
The original was submission or the original agreement with the FDA was 70 patient in cohort four.
And we add to meet Prespecified endpoint and a lower bound.
Of 20 and clearly.
Things are trending very well right now and I'm going to leave it at that because obviously the study is continuing to enroll.
So we're tracking quite well.
And Thats why we were more quite enthusiastic with the ESMO presentation.
Okay and can we expect to follow up on this at some point to are you guys.
Hello, Matt.
Is that something we definitely will want to.
Release data once it matures a little more we just have not given a date yet but for sure you will see some of that data as it matures.
Okay. Okay. Thanks for taking my questions sure. Thanks Maury.
Next question comes from the line of Ed White of H C. Wainwright.
Ed Your line is now open.
Hey, Ed.
Yeah.
Hi, Joe Thanks for taking my question.
So I do have a couple of them first on cohort four.
You had the 48 patients presented at ESMO.
Can you just remind us.
Are these 48 patients.
I'm going to be the only one at the.
16 milligram and then the other 22 would be at.
The PID dosing or less be IV dosing in 22 patients.
Of the 70.
So.
As you know we presented the first 48 patient, giving efficacy and safety, we provided a little bit of additional data on.
Some of the <unk> patient, but the.
So once the data matures and we're continuing to enroll right now.
And once we do analysis and.
You know add some discussion with the agency.
We'll decide.
Data we have.
How much we need to potentially go for registration.
We just don't have any additional guidance to give you today.
Okay, Francois well, maybe we could talk about.
Other product in the pipeline.
The fifth platform you haven't really discussed that.
Just curious if you can give us any update on the <unk> year over year or two.
And refractory.
Non Hodgkin's lymphoma is there any update there and then also as far as the Posey in K Ras.
Preclinical data go.
As you look at that data.
You're thinking of running a company sponsored trial in the clinic in that patient population.
Or with the K Ras product.
Or perhaps an I S T something like that.
Sure. So let me start with fit.
So as you know we've indicated that before when you do a first in man dose escalation study you don't have a efficacy data and when.
As happened is during the the worst part of the Covid.
Pandemic. This study got caught into that it clearly was impacted.
Negatively in terms of accrual.
And as you know.
And thats perform clearly slower than we wanted.
So we're we're reviewing.
That asset and making sure that we want to.
What we wanted to do with the asset.
Currently open and recruiting and.
We will assess this following a review.
Given.
How long it's been going.
So we will update you on on this clearly the priority is pose the relaunches.
Rather than these very early stage program. So that's the first.
Answer the next one is for the K Ras So we're quite excited.
I will grant you that this is.
Preclinical data, but nonetheless, it really shows the no.
No.
<unk> inhibitor, one of which Amgen has been approved but there is relatively rapid development of resistance and companies in investigator realize that they're going to have to combine drug and the question is which one do you combine to get the best.
Outcome for patient and distill vitro data is really encouraging because it shows that you don't need just a teekay all year, but you really there is an advantage at least in vitro to have a true pan her inhibitor and to our knowledge.
Most potent one.
As opposed to them. So we're clearly very interested in pursuing this further we have not.
At this stage decided if it's gonna be within ISS or a company sponsored study, but we'll update you im sure in the near future.
Thanks, and maybe finally, just a question to Kurt.
I was just wondering you know you're doing a great job with with.
Your cost cutting.
Can you give us any guidance on cash runway or maybe.
Direct directionally, what we can be.
Seeing in.
G&A and R&D as Youre looking forward to.
<unk>.
Responding to the <unk> and also spending.
<unk> for approval.
Sure Ed.
Yeah, I mean, so we ended the quarter with $134 million in cash.
Cash and marketable securities this should be sufficient cash balance to kind of fund operations late into 2022.
Obviously, it takes us through a time when we could potentially see.
Approvals for these two late stage assets.
In terms of guidance, we don't give any specific guidance, we as I mentioned on the call we have been looking to control and manage expenses.
The recent CRO.
And so you did see G&A expenses, our SG&A expenses.
A bit lower this quarter.
So we will look to continue to go do that but obviously, we want to invest to make these assets successful. So we.
We are going to continue to put money into the brands for pose yacht and had been relentless, but we'll look to cut kind of areas that are non critical to moving those assets forward here.
In the next few quarters.
Okay, great. Thanks, Kurt.
Sure.
Pat.
Okay.
Next question comes from the line of Michael Schmidt of Guggenheim Michael Your line is now open.
Hey, Michael.
Hey, this is Paul on for Michael Thanks for taking our question just one from us on for John.
The NDA submission.
To confirm your thoughts on the approval hurdle for previously treated non small cell patients given the potentially higher bar, we've seen for recent approvals like lacrosse.
Yeah.
Sure So I mean.
We're going for.
Cohort two data so it's the patient to have.
And at least one.
Our line of treatment.
Her two exon 20, and you know, it's really pure exon 20.
Congrats also on the progress so at the highest level of franchise. If I may just ask you your latest thinking on the part what legislation for the <unk> does is it just getting.
More patients treated high sample size longer follow up across cohort five and cohort four.
And then the specific question I had was as part of your life excuse me as part of their NDA filing what confirmatory study are you committing to in terms of design, because obviously you need to do that as part of the accelerated approval.
Yes, very good question. So the <unk> data, we thought that was an important win and.
Some of the discussion we've had with the agency so far that they allowed us to include some <unk>.
Data.
On top of the.
The Q D data from cohort two.
So I can give you an exact final answer if you want as to our latest thinking about DIY and so I think it's got a really depend on how.
Now the FDA will interpret the data that we have.
Put in the NDA as it goes in.
So we'll have to.
Judge.
Sure.
Do they feel about the <unk> data clearly we have shown that there was some very good activity.
Was maintained as well as.
A side effect profile that appeared certainly in the early patients that we have seen.
To be a favorable to QD. So that's going to go in there and we're going to have some discussion during I imagine the NDA review.
And we'll see where we go from there. So that's the first question I think I am sorry can you remind me of your second question.
Yes, the confirmatory study.
To get the full approval, yes, absolutely. So we we.
<unk>.
I would say we're in discussion with the agency regarding this and we clearly as develop.
<unk>.
And.
When you file the NDA you have to have.
<unk> essentially.
Under way.
And so we absolutely.
And tend to do that but obviously, we want to make sure. We're in complete agreement if you want as to the nature of the PMO. So.
So I'm not going to go any further on that but it's probably a randomized controlled study that.
That takes the so call.
Clinician used because there is no.
Approve.
Standard of care or approved drug for the reserve to patients there are multiple guidance from various groups, but those are not they don't have the same strength as.
Prior approval so right now it's <unk>.
Some form of chemotherapy as I'm sure, you know and plus or minus some checkpoint and will lead to define them with the agency and.
Probably quite soon you will be able to see what we're doing.
Understood and my final question.
Just remind us where we added cohort six.
Trying to understand.
Similar to <unk>.
Yes.
Like kind of what the end market there is and how you may be enrolling better.
Noodles <unk>.
Yes.
We certainly there are continuing cohorts six and seven are continuing to enroll.
There is some restriction of where we need.
Genetic profiling of the tumor at time of relapse, if you want and that obviously it gets in the way a little bit of accrual, but they're accruing.
<unk>.
Obviously, that's not our focus primary focus were focused on the NDA, but at some point we will certainly.
<unk>.
Announced the result of cohorts six and seven I'd start have a date for you quite yet.
Thanks, so much for taking my questions sure.
Thank you Mike.
Next question comes from the line of Reni Benjamin of GMP Securities Reni. Your line is now open.
Hey, good afternoon, Hey, Joe how are you.
I apologize my phone dropped so you may have answered this already but.
As I think about.
PID data in the QD data.
The fact that you'll be submitting this NDA and have the option to obviously.
David I guess.
Data.
Do you think that you could in this iteration of the NDA wind up getting a label that includes both or do you or do you feel that you know what we'd likely need to file this as a separate sort of F. N b a when it comes to the IV dosing and just related to that how many patients total do we have that have been.
<unk> been treated with B I D.
So.
So the first question I did answer it a little earlier, but.
Let me give you the clip snowed here so.
We were very pleased the agency has allowed US to include the <unk> some.
Some of the data that we add.
In the end.
NDA, which as you know is QD dosing, so we will get a chance to discuss with the agency debt.
David and obviously that.
That body of data is increasing all the time, so we have <unk>.
Dosing.
In.
And if you look at non small cell.
In cohort five we have some in cohort four and six and seven as well. So we have not disclosed the exact number of patients.
So far you know that we have more than 22, and let's just say that.
There is.
We're in.
In excess of 100 patients when you combine all of those all of the cohorts, where we're using the IV.
Got it thanks for.
Answering that and again apologies if since you have to answer it twice or did you also answered before if I.
I guess the other question I have is do you think there might be <unk> panel for this.
Application.
Yes, I don't know right now I don't think its.
Often audax or for when there is.
Controversial issue.
The agency wants to get.
Yes.
Input from the oncology expert community.
So far.
Theres no to our knowledge there is no.
Major controversy here.
We have met the primary end point as.
<unk> agreed with the agency sometime ago, and we believe that we have a.
The safety profile that is really predictable very much in line with other TK.
No kind of idiosyncratic reaction so.
We obviously, we can't predict what the FDA will want to do eventually but.
Now we have no any we don't have any indication that that will be necessary.
Got it and then just switching gears to roll onto us.
Joe you guys you guys did a great job in addressing a lot of these deficiencies or at least a lot.
Recur than I would've thought could you maybe give us just a little bit of color and I mean, it seemed like they were pretty small boxes to check just given how quickly they were remediated, but can you give us a sense in both the facilities.
What what really needed to be corrected and.
I think this last remaining gating item.
It had me, which you hope will be completed by the end of the year.
Whether we know when you had your meeting with the FDA you were able to show them documentation that.
Said that it was it was taken care of or they kind of just take your word for it and it's more just like a free flowing dialogue and they will ultimately just.
<unk> come in and re inspect everything and go with their own decision.
No I wish it was that easy, but what it is.
So and we went and we had the class a meeting as you said.
And we clarified we wanted to make sure okay exactly what it is.
That we need to remediate immediately started once the CRA all happened back in August immediately Hanmi went to work on remediation because you get they tell you what it is and so we immediately got that Theres, one gating item that.
You pointed out we feel pretty confident it's going to be done by by the end of the year. That's why we say we could file shortly after that now they still have to have someone come in and inspect the plant. They still have to go through all the capex what part of the remediation is you do capex. So theres still go through all of those.
We what we've done is put put the remediation into play put the capex in place and that will all be par.
Part of the final inspection and decision in the end.
Got it great. Thanks for taking my questions.
Alright.
Yeah.
There are no further questions at this time I would now turn it back to Joe Turgeon.
Thank you operator.
I. Thank all of you who are on the call listening and for your participation on the call today I really appreciate all your interest in spectrum.
I'll, let you know we'll be participating virtually in the Jeffries healthcare Investor Conference. Later this month and also at the JMP Hematology and oncology summit, which is in early December. So we look forward to talking to many of you at those events also in the not too distant future again, everybody. Thank you for your interest and have a.
Great evening, Thank you operator.
You're very welcome and thank you so much for our presenters and to everyone who participated this concludes today's conference call you may now disconnect.
Great. Thanks.
Yeah.
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