Q4 2021 Clovis Oncology Inc Earnings Call
Good morning, My name is Chris and I'll be your conference operator today.
At this time I'd like to welcome everyone to the Clovis oncology fourth quarter and year end 2021 operating results.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session.
If you'd like to ask a question. During this time simply press Star then the number one on your telephone keypad.
Or withdraw your question. Please press star one again.
Thank you.
Anna Sussman, Vice President of Investor Relations and corporate Communications you may begin.
Thank you Chris Good morning, everyone and welcome to the Clovis oncology fourth quarter and full year 2021 conference call. Thank you for joining us.
You've likely seen this morning's news release and if not would you know.
As a reminder, this conference call is being recorded and webcast.
Mark maybe extra slides on our website during the call will be available in our archive for the next several weeks Jason.
Today's agenda includes the following.
Mahaffey, our president and CEO will discuss the highlights of today's corporate update and then Dr. Thomas Harding, Our Chief Scientific Officer will present, an update on the situation.
<unk> targeted radionuclide therapy development programs.
Well Ross, our Chief Medical Officer will discuss the anticipated upcoming clinical milestones for <unk> a teacher to Asics.
And Daniel <unk>, our Chief Financial Officer will cover the financial results for the quarter and year in greater detail. Patrick will then make a few closing remarks.
On the call for Q&A for English time pop damp condo and be available to answer questions.
Before we begin please note that during today's conference call. We may make forward looking statements within the meaning of the federal securities laws, including statements concerning our financial outlook and expected.
Thanks.
All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in forward looking statements.
Results could differ materially due to a number of factors.
Including the extent and duration of the effects of the COVID-19 pandemic on the timing and extent of recovery from.
Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business.
Forward looking statements speak only as of the date on which they are made and Congress undertakes no obligation to update or revise any forward looking statement.
Additionally, please note that we will be discussing discussing cash burn a non-GAAP financial measures during today's conference call.
Required disclosures related to this origination relationships found on our website.
Now I'll turn the call over to Patrick Mahaffy.
Thanks, Jamie excuse me good morning, welcome everybody appreciate your time today.
As usual I'll start today's call with a review of a record sales for the quarter.
Sales in Q4, 2021 were $36 million, 5% lower than the prior quarter and 17% lower year over year compared to Q4 2020 I.
<unk> seen over the previous quarters. This year over year decline is primarily due to fewer diagnoses and pure patient starts in the U S and Europe , primarily caused by the ongoing COVID-19 pandemic.
Despite the continuing impact of COVID-19, we believe we have maintained our U S market share for Rebecca in the second line maintenance ovarian cancer setting.
We do expect that as patient visits begin to rise diagnoses increase and the urgent need to more actively manage this often fatal disease grow.
The maintenance treatment of ovarian cancer patients will increase including the use of Rebecca for women with advanced disease.
Perhaps even more importantly, we see significant opportunity to move into earlier lines of therapy through breaker in both the U S and Europe .
We anticipate three phase III Readouts. This year Latino motto as monotherapy in first line ovarian cancer maintenance treatment setting.
Now expected in Q2 based on a slower than expected pace of progression free survival or PFS events.
And the theme of combo in combination with Opdivo in first line ovarian cancer maintenance treatment setting in Q4.
And Triton three in the second line prostate cancer treatment setting for selected patients in Q2.
These trials potentially allow rebecca to address larger patient populations in earlier lines of therapy for both ovarian and prostate cancer.
Could drive growth and Rebecca sales in both the U S and Europe .
He will provide an update on these clinical programs.
F 22, 86, the phase one portion of linear continues to enroll and we're committed to maintaining our lead in the clinical development of an F. <unk> targeted radionuclide therapeutic candidate.
We and our investigators remain extremely enthusiastic about this program and look forward to presenting data at nuclear medicine meetings during 2022 and initiating the phase II portion of the Lumiere study later this year.
Common Lindsay will speak in more detail to Delta two developments about the F 2026 program.
In fact to that and I'll turn the call over to Tom Our Chief Tom I was hurting sorry, though our chief scientific officer to discuss the F 22, 86, and targeted radionuclide therapeutic development programs.
Thanks Pat.
Hello, It's a pleasure to speak with you again today.
As we discussed in prior calls a key strategy for Clovis has to be a leader in targeted radionuclide therapy.
F N P 22, 86 elite targeted radiotherapeutic compound licensed as part of our ongoing collaboration with <unk> Pharmaceuticals is the first peptide targeted radiotherapy candidates. Both P. T O T targeting fibroblast activation protein also known as Pete in clinical development.
And as Pat mentioned in 2022, we will report our first phase one clinical data for the program and plan to advance the program into phase two expansion cohorts.
I think Pete is highly expressed on cancer associated fibroblasts or caps, which represent one of the most abundant cell components in tumors. They found that the majority of solid tumor types.
Cash split critical role in tumor initiation progression metastasis and therapeutic resistance.
For example, recent studies have demonstrated F. A P expression cats is a potent immuno suppressive activity that can promote tumor progression and confirm resistance to immune based therapies, such as PD, one and PDL one blockade.
As we highlighted last quarter, we have presented non clinical data describing a high expression level.
<unk> nine of 16 select tumor types screened using anything Mr chemistry.
I think the expression was observed in pancreatic.
Adenocarcinoma cancer of unknown primary so library, Glenn mesothelioma, colon bladder sarcoma squamous non small cell lung as well as squamous head and neck cancers.
In these tumor types high I think the expression is detected in both primary and metastatic tumor samples and was independent of tumor stage Albright.
The analysis also demonstrated the most human types F. A P expression, which predominantly localized to cancer associated fibroblast surrounding the tumor cells and integrated into the tumor microenvironment.
In addition, intensive mesenchymal origin, including sarcoma mesothelioma.
Expression was observed in tumor cells. In addition to the population.
These data support the investigation of F 22, 86 in multiple tumor types in the planned phase two expansion cohorts of lumia.
Additional presentations of non clinical data anticipated medical oncology and nuclear medicine meetings over the next few quarters.
As interest in S E T as.
As a target increases in the field grows larger we're pleased to be in the first mover position with FAP 2286 to be the first peptide targeted radionuclide therapeutics targeting to enter into the clinic.
Critically we are focused on 22 86 monotherapy development.
<unk> me ask study.
How are the pre clinically we are evaluating a number of 22 86 drug combinations.
Given the role of S&P expressing cash in mediating resistance to immune based therapy, such as PD, one and PDL one blockade combination these agents will be a priority.
We are evaluating in non clinical studies, the efficacy of mechanism of action.
<unk> 86, and a PD, one monoclonal antibody and Syngenta mouse tumor models.
In addition to immune checkpoint inhibitors, there are a number of publications and putting known clinical data.
To support the combination talked in radiotherapy with pop Nick just talk with efficacy.
This makes sense since radiotherapy is what my closing DNA damage by radioactive admission.
It is damages number a plan to sell will eventually die.
One of the critical proteins preparing radiation induced damage as top and its inhibition augments efficacy in combination with multiple targeted radiotherapy agents.
We are currently pre clinically evaluating combination F.
2286, with our own pop inhibitor with Catherine and multiple tumor models.
Lastly, radiation is known to synergize with the number of agents that are currently approved as the standard of care in specific tender, okay, sorry in specific cancer indications.
For example, with Jim's side to be used as first line chemotherapy in pancreatic cancer and other costs and this is a well known radio sensitized and could have utility in combination with <unk> 2026.
We are currently performing a high throughput screening of approved oncology drugs in combination with radiation to identify promising combinations.
2026 development.
We look forward to reporting the results of this preclinical work upcoming scientific meetings.
To support our commitment to this making sure it was created educational materials about targeted radiotherapy.
The first of these materials are Microsoft and an introductory videos that provide more information about targeted radiotherapy.
<unk> 86, and close these targeted radionuclide development program.
And then more please visit targeted radiotherapy dot com.
Lastly, we are collaborating with <unk> pharmaceuticals on a discovery program directed at three additional targets to talk to everybody that NUPLAZID therapeutic development to which we have global rights.
And now with that I'll turn the call over to Lindsey Rolfe for clinical update.
Thanks, Tom Good morning, everybody.
Glad to be here with you today to highlight key clinical milestones expected.
I think we paid <unk> 26 in 2022.
Great Docker based on a slower than expected PFS event tons. We are now expecting data from Athena Manav and the second quarter of 2022.
Thank you from Athena combo, the combination of <unk>, plus Opdivo monotherapy, alright, thats in the fourth quarter of 2022.
As a reminder, Athena is a phase III 1000 patient study in first line newly diagnosed advanced ovarian cancer.
With Athena, we believe we are uniquely positioned to evaluate your back.
Two independent outcomes monotherapy versus placebo in the quest for maintenance setting as well as any potential advantage the combination of <unk> and opdivo.
And the same first slide 19.
We believe this study GTT to clearly differentiate Nebraska and this last slide 19 section.
Once top line monotherapy results.
And should the data support we.
We plan to file an S M D.
The European MAA shortly thereafter.
Continuing with near term milestones Blue backer.
Top line data from the Triton three trial are expected in the second quarter of 2022.
So I think three is a phase III study evaluating Rebecca.
Physician's choice chemotherapy or 79 androgen deprivation therapy in patients with Mcl, PC with BRCA or ATM mutations.
This trend is expected to serve as a confirmatory study practice turns approval in the prostate indication as well as the potential.
Label expansion and we plan to file an NDA shortly up results for April .
These street anticipated.
Right.
Athena mono combo I'm Triton three provide the potential to reach larger patient populations in earlier lines of therapy.
Those are varied and prostate cancers.
Beyond the opportunity for Nebraska.
First line ovarian cancer.
The combo study represents potential to introduce an anti PD one containing regimen for the first time to a broad population of ovarian cancer patients.
As a reminder, the timing to each bank readout is contingent upon the occurrence of the political stuff like progression free survival.
I'd like to discuss what I think <unk> 206 program next.
Tom provided nokia's non clinical work and now all of you who welcomed away.
In our ongoing phase one two lumia study F 'twenty.
286 is used as an imaging agent and teach patients a concept often described their muscles.
So all the imaging agents F&B 26 did you catch the isotope gallium 68 to allow positron emission tomography or <unk>.
Imaging and selection of patients that inclusion in the study.
For the therapeutic agents <unk> 26 in touch the mutation.
Mutation 177, and a niche feature pascua ionizing radiation, the COVID-19 DNA damage and cell death.
The phase one portion of the linear study continues to enroll patients in the second dose cohort is currently enrolling patients.
As a reminder, this first in man study.
As a dose escalation study with each of the five dose cohorts Damien will sequentially with a six week safety follow up period. After the last patient in each cohort has involved to ensure it's safe to move to the next dose cohort.
While this six week period is longer than it phase one trials of other oncology agents. It is standard could talk to you JJ.
Following the phase one evaluation of safety.
<unk> 26, and determination of the recommended phase two dose.
Expansion cohorts are planned in multiple tumor types and are expected to begin in place it sounds cool.
In addition to our own program separate investigator sponsored imaging studies.
22, 86 is underway <unk> CFO .
Yes.
Thomas who is also the principal investigators the Dame yesterday.
The imaging only study is evaluating I think the expression in multiple tumor types and is currently.
<unk>.
Results from this study along with the preclinical data we are generating.
Two two and help inform selection of genotype where phase two expansion cohorts.
We look forward to talk to them.
Dentation Altice initial imaging data from this study.
Upcoming virtual.
And then by mid one <unk>.
Later this week.
In addition to initiating <unk> phase II expansion cohorts during times of 2016, we anticipate several key milestones of the program included.
The first presentations of phase one data.
Nuclear medicine focused meetings.
The launch of our combination study program to explore 2026 in combination with other oncology compounds.
Given the government expressing tech and media give me next question exploring the combination with PD, one or PDL, one blockade as a priority.
But we are exploring multiple combination studies in preclinical animal models to inform our chosen combinations which include developments.
Only a potential R&D filing for S&P tons to 86 inch to an alpha emitting Austin in 2023.
I'd like to recognize again the dedicated efforts of the teams involved in our clinical trials, both employees and investigators on the patient participants as our clinical programs. It comes.
I'll turn the call over to Dan to discuss fourth quarter financial results.
Thanks, Lindsay and Hello, everyone. We reported net product revenues for <unk> of 36 million for Q4, 2021, which included U S product revenues of $27 6 million and ex U S product revenues of $8 4 million respectively.
This represents a sequential 5% decrease from Q3, 2021, and a 17% decrease year over year compared to Q4 2020 net product revenues of $43 3 million, which included U S product revenues.
A 36 4 million and ex U S net product revenues of $6 9 million.
We reported net product revenues were a record $148 8 million for the full year ended December 31, 2021, which included $115 7 million and U S.
And $33 1 million and ex U S product revenues respectively.
This represents a 10% decrease compared to 2020 net product revenues of $164 5 million, which included $146 3 million in the U S and ex U S net product revenues of $18 2 million.
Gross to net adjustments totaled 36% globally in Q4 2021 compared to 27% in Q3 2021.
Increasing GTS and the <unk>.
Ex U S and public health service discounts in the U S were the main drivers.
Metric fluctuates quarter to quarter, and it's difficult to estimate our future revenues, but the high 20 to low 30% level seems likely depending on the revenue and distribution mix for the U S and Europe .
Previously discussed as European revenues increase in proportion to the U S level GTS will increase correspondingly.
Research and development expenses totaled $41 8 million for Q4, 2021, and $186 6 million for fiscal year, 2021, down, 26% and 28%, respectively compared to $56 7 million and $257 7 million for the comparable periods.
In 2020.
Research and development expenses decreased in the quarter and the year compared to the same periods in the prior year, primarily due to lower spending on the bracket clinical trials.
Selling general and administrative expenses.
$33 3 million for Q4, 2020 , one and $128 4 million for fiscal year, 2021, down, 18% and 22%, respectively compared to $48 million and $163 9 million for the comparable periods in 2020.
Selling general and administrative expenses decreased during the quarter and the year compared to the prior periods.
At the same periods in the prior year with savings due to the COVID-19 situation globally and overall cost reduction efforts.
Net loss for Q4, 2021 of $64 4 million or <unk> 50 per share and a net loss of $264 5 million or $2 29 per share for fiscal year 2021.
Net loss for Q4, 2020 was $99 million or $1 <unk> per share and $360 2 million or a net loss of $4 38 per share for fiscal year 2020.
Turning now to a discussion on cash and debt. So I'll, just add $143 4 million in cash and cash equivalents as of.
December 31 2021.
During Q4, 2020 , one we raised $3 million in net proceeds and in Q1 2022. So far have raised $27 2 million in net proceeds through our previous established aftermarket equity offering program.
We have capacity to issue additional shares of common stock under this ATM program.
In addition, we paid off our two 5% convertible senior notes due in 2021. Therefore majority are next convertible debt maturity is August one 2024 and has a conversion price of $7 29 per a portion and a conversion price of $6.24 for the remainder.
As of December 31, 2021, we had drawn $147 2 million.
Partners, Athena clinical trial financing and had up to $27 $8 million available to draw under the agreement to fund expenses of the Athena trial.
The first royalty payment to sixth Street partners will be in Q4 of this year. After determination of Q3 of 2020 do revenues subject to the applicable payment caps in the agreement.
Net cash used in operating activities was $41 3 million for <unk> 2021 down from $56 1 million reported in <unk> 2020 cash burn in Q4, 2021 was $31 6 million down 23% from Q4 of 2020 quarter cash burn of $40 9 million.
Similarly, net cash used in operating activities for the full year of 2021 was $196 1 million compared with $252 7 million for the full year 2020.
Cash burn for the full year was $148 6 million down 24% from the prior year cash burn of $195 6 million.
We have and will continue to manage expenses carefully.
We currently expect R&D and SG&A expenses in 2022 to be generally consistent with 2021.
We remain focused on our liquidity position and recognize that we will need to raise additional capital in the near term to fund our operating plan for the next 12 months and beyond.
I will turn the call back to Pat.
Thanks, Dan in summary, we've set the stage for a very important year for.
We're on track to announce top line data from three phase III <unk> data Readouts Athena model, Athena combo, and the <unk> III study, but offer the potential for label expansions in ovarian and prostate cancers.
This concludes the Athena combo readout that should definitively definitively inform whether adding an anti PD one to Rebecca mono therapy in the first line maintenance treatment of ovarian cancer setting extend through breakfast progression free survival.
In addition, our commitment to targeted radiotherapy is significant and offers the potential to be transformational in 2022, when we present data from the phase one Lumiere study of $20 86, the first peptide targeted radionuclide therapy targeting <unk>.
To enter clinical development.
We intend to maintain our lead as we advanced lumiere into phase III and begin our combination development program.
These anticipated pipeline event, and our commitment to improving our balance sheet support our efforts to execute our three core strategies.
Expand the route bracket label to drive revenue growth.
Emerge as a leader in targeted radionuclide therapy, and achieve long term financial stability.
With that we're happy to answer any questions you may have.
As a reminder, if you'd like to ask a question. Please press Star then one on your telephone keypad.
Our first question is from Paul Choi with Goldman Sachs. Your line is open.
Yes.
Good morning, everyone. This is Charlie on for Paul. Thank you so much for taking our questions.
Just had a question on the 286 opportunity exciting that we'll be seeing this data this year and as we start to think about what the potential market opportunity is for this product.
Wondering are there any nuances in terms of considering the commercial potential for the imaging modality versus the therapeutic modality is there anything we should be considering there in terms of.
And how about it.
It might be priced or the potential patient populations that would be up for either the imaging or the therapeutic modality. Thank you very much.
I'll take a shot at that time, and then you may want to or Tom or Lindsey may may want to add in.
It's a really interesting and timely question for US we have up to now.
Primarily thought of the imaging opportunity with $20 86 to be to be limited.
To its potential.
Net necessity as a companion diagnostic that is as we seek to develop 2000 to 86 as a therapeutic.
Simultaneously be developing for a given indication the same peptide labeled with gallium to a.
In imaging modality for patient selection.
We have been.
Evaluating.
At the.
Guidance and request of the clinical community with whom we interact the nuclear medicine community.
Whether or not.
Yes.
F 22, 86 could be seen.
On its own as an imaging modality, particularly in tumor types.
Standard imaging for instance, FDG pet.
Not as.
Effective.
And.
As we have evaluated this and we've looked at the reimbursement for a standalone imaging agents.
It clearly has emerged as a potential opportunity.
We havent made a firm commitment yet to entering into this field, but we're getting there.
The workup, we've done suggest that's a pretty.
Interesting opportunity financially.
Cost of development is markedly lower than the cost of development for a therapeutic.
And.
It is an earlier and quicker path to market.
For us.
As an opportunity to generate revenue for 2026 prior to when we would expect to see an accelerated approval for any given therapeutic opportunity.
So interested.
More to come on this will probably be able to provide an update on our next quarterly call.
Lindsay anything you'd add to that.
The only thing I've mentioned is.
To completely support what you are saying there is some preliminary data.
It will be presented at the <unk>.
Mid winter meeting later this week.
Thomas Hope so.
So take a look at that data.
Thank you very much that's very helpful.
Our next question is from Macquarie <unk> with Jpmorgan. Your line is open.
Okay.
Thank you. This is gavin on for Cory just I had a question on its data and then a follow up to the previous question I guess starting there.
Just curious on the process for the gallium 68 and patient selection.
Session is that process and how long does it is it and then just you mentioned some some tumor types, where with Stephens Inc.
Unable to meet the.
The need.
Two of our types are those.
Lindsay or Tom do you want to talk about the kind of the logistical side.
We have not yet determined exactly.
Which tumors. We would initially approach we have a list probably don't want to share that yet, but again, we will update on specific programs.
Upcoming quarterly calls.
On the logistics, Tom or Lindsay.
So yes.
Clinton.
Yes.
Go ahead.
Okay.
Lindsay I think we'll go ahead Lindsey.
Yes.
Hi.
Regarding scams.
Scanning.
Does Kelly and hesitation with hotline.
Alright.
Actually the imaging product.
Syed on the day.
That is <unk> to the imaging.
Phase one sites, who are highly experienced in this kind of presence and so.
Bread and butter for them again.
Scanning ATM setup.
Okay.
Does that answer your question.
Okay, yes. Thank you.
Just quickly on.
Dana combo study.
Just in your conversations with the community.
Is it possible to quantify how much you need to extend PFS for utilization in that setting.
So that's I'll try that Lindsay you go ahead, and then I'll answer it.
But that's not.
Obviously, a difficult question.
Answer ahead of time.
But.
We always expect.
The results to be clinically significant as well as statistically significant in order.
Drive uptake.
Davidson.
Multiple options available now in frontline maintenance.
I would expect.
The combination of production update to be.
Useful.
Yes.
Yes.
On page <unk>.
Yes.
Substantial IBM in the whole population before.
Group.
I might add to that.
The anticipation is growing now for the for that result, there.
There's a great amount of interest in it.
And I think it speaks to the fact that as is true for every tumor type now.
Hardly any patients.
Fails to ask the question can I get immunotherapy.
It's.
On commercial it's in the news.
People were aware of it and as you're probably aware there are new Immunotherapies approved.
Today in ovarian except a very very small subset.
So.
I agree with Lindsay obviously, we have to show a benefit it has to be statistically significant I think the demand from the patient and from the prescribing community will be high in particular.
Lindsey said in subgroup populations and Thats true, but I'd also add as is true for a lot of Io.
If the difference at the median is perhaps not substantial.
But obviously needs to be statistically significant but the tail for the combo looks to be providing significant benefit and are hard to identify a subset I think the demand for the combination would be quite high.
Okay, Great. That's very helpful. Thank you very much.
You bet.
Yeah.
We have no further questions at this time I will turn the call back over to MS. Sussman for any closing remarks.
Thank you Chris.
Thanks, everyone for your interest in Congress on car T. Today, if you have any follow up questions. Please call me at 365.
Jill or Breanna Burkart at 300 365 three.
This call can be accessed via replay of our webcast at Clovis oncology Dot com beginning in about an hour and will be available for 30 days again, we appreciate your interest and time, Thank you and have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
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Sure.