Q1 2022 Seagen Inc Earnings Call
Good day and welcome to the <unk> first quarter 2022 financial results Conference call. All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question you May press.
Star then one on your Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Clay Seagull. Please go ahead, sir thank.
Thank you operator, and good afternoon, everyone I'm pleased to welcome you to <unk> first quarter 2022 financial results Conference call. This afternoon, we issued a press release with our results and that press release and supporting slides are available on our website in the investors section events and presentations page speakers on today's call are the place to go president.
Chief Executive Officer, Todd Simpson, Chief Financial Officer.
Chip Romp executive Vice President commercial U S and Roger Danzy, Chief Medical Officer.
Following our prepared remarks, we'll open the line for questions and we aim to keep this call to one hour and so ask that you limit yourself to one question to give everyone an opportunity to participate in Q&A during our call today.
Today's conference call will include forward looking statements regarding future or anticipated events and results, including the company's 2022, the financial outlook anticipated product sales revenues costs and expenses future developments related to legal matters and potential clinical and regulatory milestones, including data readouts regulatory submissions.
Potential marketing and reimbursement approvals.
Actual results or developments may differ materially from those projected or implied in these forward looking statements.
There's that may cause such a difference include the difficulty in forecasting sales revenues and expenses impacts related to the COVID-19, pandemic and the uncertainty associated with legal disputes and what the pharmaceutical development and regulatory approval process more information about the risks and uncertainties based by sea. Gen is contained under the caption risk factors.
Included in the company's annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission and the company's subsequent reports filed with the SEC and now I'll turn the call over to clay.
Thank you Pak.
Good afternoon, everyone and welcome to our first quarter call.
We are pleased to report total revenues of $426 million for the first quarter.
This includes net product sales of $383 million, representing 27% growth over the first quarter of last year.
This growth reflects strong product sales across all commercial brands.
As we look to deliver continued innovation and develop transformative therapies, we remain focused on two strategic priorities.
Our first priority is working to maximize the global potential of our products through commercial performance and robust clinical development program designed to support future label expansions, while also leveraging our strategic partnerships.
I'll begin with pad Seth.
Which has become a standard of care in the U S. For previously treated metastatic <unk> cancer earlier. This month, we and our partner Astellas secured approval in both the EU and U K for <unk> in previously treated locally advanced or metastatic <unk> cancer.
The approvals are based on the EV 301 trial, notably the impressive overall survival benefit.
This marks an important milestone for patients in these regions, who have previously had limited treatment options offering poor survival rates.
We previously secured approvals in the U S, Canada, Switzerland, Israel, and Japan continue to progress regulatory submissions across Asia Pacific and the Americas.
We and Astellas are engaging with individual country authorities to secure reimbursement for pet stuff, which can take up to two years, depending on the country.
That said, it's robust clinical development program spans monotherapy and combinations with Keytruda in earlier lines of therapy E V. One O three cohort K data, which are anticipated in the second half of this year along with other data from the EV 103 trial could potentially support accelerated approval in the U S.
For patients with first line metastatic <unk> cancer next year. We are also evaluating <unk> in combination with keytruda in muscle invasive bladder cancer and as monotherapy in non muscle invasive disease. These represent areas of significant unmet need in large addressable patient.
<unk>.
<unk> has become an important option for the treatment of second and later line her two positive breast cancer patients with and without brain metastasis overall survival data and inclusion in key treatment guidelines reflect two kaisers exceptional clinical value.
<unk> delivered strong results this quarter, although we continue to expect competitive challenges in the U S. This year, which are factored into our annual guidance.
We are working to enable additional European launches in 2022, and our strategic collaboration with Merck is expanding <unk> reach outside of Europe and the Americas.
Two cases broad development program includes clinical trials and her two positive breast cancer colorectal cancer gastric cancer and other her two amplified or mutant tumors.
Data from the Phase II Mountaineer trial are expected in the second half of this year and could potentially support accelerated approval in the U S. Next year for patients with her two expressing colorectal cancer.
Although a relatively modest patient population and represents a high unmet medical need as existing approved colorectal cancer therapies offer limited efficacy.
<unk> as a tissue factor targeted ADC approved in the U S for recurrent or metastatic cervical cancer patients and represents an important new therapy in a disease with historically poor outcomes.
Launched last September in collaboration with Genmab. The strong uptake has been driven by differentiated clinical data positive reception from the oncologists community and our focus on commercial execution.
We have presented promising combination data in earlier lines of cervical cancer, which may represent.
Critical advancements and much larger market opportunities.
Okay.
Roger will provide further details on <unk> clinical development program, which is designed to maximize its future opportunity in cervical cancer and other solid tumors, while supporting global regulatory applications.
Et cetera has now been approved in over 75 countries and et cetera regimens are U S standard of care in frontline Hodgkin lymphoma, and peripheral T cell lymphoma.
More than a decade after its first launch we and our partner Takeda continues to bring this important medicine to patients around the globe.
Ground, breaking overall survival data from the phase III echelon, one trial in newly diagnosed advanced Hodgkin lymphoma further demonstrate the therapeutic value of et cetera, and its importance for these patients.
In addition, a phase III children's oncology group study demonstrated an improvement in event free survival for high risk pediatric patients with Hodgkin lymphoma.
Both the echelon, one data and the phase III pediatric data will be presented at <unk> in June and will be submitted to FDA. This year.
Lastly, we are progressing a comprehensive clinical development program to maximize the potential for etc to benefit patients.
Our second strategic priority is to advance our deep and diverse pipeline as we look to bring additional drugs to market in the coming years.
To sit them out, but don't or D. V is a late stage novel ADC that utilizes our vadodara based technology.
TV is active across a broad range of her two expressing solid tumors and demonstrates rapid internalization or.
Our clinical development program prioritizes monotherapy and combination approaches in breast bladder gastric and other cancers.
We recently initiated a pivotal trial in previously treated metastatic <unk> cancer intended to support accelerated approval in the U S.
Turning to our earlier stage pipeline, we are advancing several agencies to both novel and validated targets. We also have four programs that use our proprietary sugar engineered antibody technology.
Overall, we are progressing more than 17 programs and products across our pipeline in a range of solid tumors and hematologic malignancies.
Our ADC collaborators are also making important progress with programs that utilize our technology.
Roche recently reported that the C. H M. P recommended European Commission approval for <unk> in combination with other anti cancer therapies for frontline diffuse large b cell lymphoma.
Glaxosmithkline is commercializing blend rap for patients with relapsed multiple myeloma and it's advancing several clinical trials.
And Abbvie was granted breakthrough therapy designation for their C met ADC to listen to the map.
Based on data from their phase III study for non small cell lung cancer.
As we look to the future. Our plan is to continue building upon our four commercial products advancing our deep and diverse pipeline and expanding our geographic footprint.
We have over 50 strategic partnerships, including our recent collaboration with Santa Fe.
Based on our cash position of approximately $2 billion and no debt. We are strongly positioned to utilize cutting edge innovation to make a positive impact on the lives of people with cancer today and tomorrow.
Next I will turn the call over to Todd who will discuss our financial results.
And then chip will provide an update on our commercial performance after that Roger will detail, our clinical development activities and pipeline Todd.
Todd.
Thanks, Clay and thanks to everyone for joining us on the call. This afternoon.
I'll briefly summarize our financial results for the quarter, which are aligned with our expectations and reflects significant progress across the business.
Total revenues were $426 million in the first quarter of 2022, representing 28% growth over the first quarter of last year. This included net product sales of $383 million, an increase of 27% over the first quarter of 2021.
This was driven by strong growth of pads to Kaiser and et cetera.
First quarter 2022 sales of pads.
<unk> included $9 million in cycles to another company for a combination clinical trial, but they are conducting and which was factored into our 2022 guidance. Additionally.
Additionally, first quarter 2022 product sales that included contributions from <unk>, which was launched in the third quarter of 2021 as our fourth approved drug.
Royalty revenues in the first quarter of 2022 increased slightly to $28 million compared to the first quarter of 2021.
These royalties are primarily driven by sales of et cetera is outside the U S and Canada by Takeda and to a lesser degree by royalties from sales of <unk> by Roche and blend wrapped by GSK.
As expected royalties decreased from the fourth quarter of last year as the royalty rate paid by Takeda on its sales of ADCETRIS resets at the beginning of each year and ranges from the mid teens to the mid twenties.
Collaboration revenues were $15 million in the first quarter of 2022.
This included an upfront payment from Santa fee under our new collaboration signed in March a profit share contribution from Astellas as sales of <unk> in Japan as well as other collaboration activities.
These each create some degree of quarterly variability in our collaboration revenues.
Following the recent approval of <unk> in the EU, we expect to begin reporting profit share balance next year from the sales of passive by Astellas.
Cost of sales in the first quarter of 2022 increased to $88 million. This included cost of product sales and royalties for each of our four brands profit share amounts to our collaboration partners Astellas and Genmab as well as noncash amortization of acquired technology cost Sportster Kaiser.
R&D expenses increased to $298 million in the first quarter of 2022.
This reflected continued investment across our deep and diverse pipeline to maximize the potential of our approved products and pipeline programs.
SG&A expenses increased to $174 million in the first quarter of 2022. This is driven by our commercialization efforts for et cetera pad seven to Kaiser and the launch of <unk> in the U S as well as investments to support ongoing country launches up to Kaiser across Europe .
We are off to a strong start and pleased with our financial results.
With that in mind, we are maintaining our 2022 financial guidance that we provided in February .
Now I will pass the call over to chip, who will provide additional details on our commercial performance and outlook.
Thank you Todd I am pleased to provide an update on our commercial performance, which set a new quarterly record of $383 million.
And covers four approved brands.
First quarter sales were $100 million.
A 44% increase over the first quarter 2021, excluding the $9 million clinical trial supply.
<unk> was up 43% over the first quarter of last year.
During its first year and a half on the market <unk> became the U S standard of care in the post checkpoint setting.
We look forward to a potential label expansion in the U S into the frontline setting in cisplatin ineligible patients in 2023.
We're also excited bypassed such recent approval in the EU and U K and look forward to working with our collaborator astellas to bring this important therapy to patients.
Moving on to the <unk> first quarter sales were $90 million, a 29% increase over the first quarter of 2021.
You will recall that our 2022 outlook for <unk> assumes.
Assumes the impact of competitive pressure from in her twos anticipated U S launch in the second line setting.
And inclusion in guidelines and pathways.
This remains our expectation despite seeing only modest impact in the first quarter with Hercules approval in this setting we continue to anticipate a shift in how these regimens are sequenced with increased use of in her team and less take icu's delayed patient flow into the third line plus setting where to place it is mostly.
These.
Our promotional efforts focused on the case, a strong value proposition, especially in those patients with CNS involvement.
<unk> in Europe continue to grow in the first quarter.
And we look forward to gaining reimbursement in additional countries this year etsy.
Et cetera, first quarter sales were $181 million, an 11% increase over the first quarter of 2021. The team is driving awareness of the positive overall survival data from the echelon one trial.
The topline data announced in February has been well received and we look forward to floating a full dataset after the oral presentation at <unk>.
And finally, <unk> sales were $11 million for the quarter. While this initial indication is a modest opportunity. We are pleased with the positive reception from physicians and patients for this important new treatment option.
Now I'll hand, the call over to Roger.
Thank you chip and good afternoon, everyone I'm happy to share our recent clinical development updates on our approved medicines and our pipeline.
Beginning with pets is we are very pleased with its recent approval in the EU and the U K based on the overall survival advantage in previously treated patients with metastatic <unk> cancer as demonstrated in the EV 301 trial.
This study was positive at a pre specified interim analysis and we plan to present important long term outcomes in ESCO based on an additional 13 months of follow up.
In the frontline metastatic setting we are evaluating the combination of passive and Keytruda in two studies. The first study is EV 103 cohort K.
Enrolled patients who are ineligible for cisplatin therapy.
The second is a phase III EV 302, global trial, which includes both cisplatin eligible and ineligible patients and is on track to completion enrollment this year.
As we look to muscle invasive bladder cancer together with Astellas and Merck, we are advancing two phase III trials to assess pads. It in combination with Keytruda as Perry just treatments.
One trial is testing usage in cisplatin eligible patients and the other in CIS ineligible patients.
At the recent <unk> meeting, we presented promising pets at monotherapy data in the Neo adjuvant M IPC sitting where people who are cisplatin ineligible.
These data are important in understanding the impact of pets as a monotherapy in the context of the ongoing combination trials.
Furthermore, we are progressing our efforts in non muscle invasive bladder cancer. The phase one easy one O. Four trial is investigating single agent passive administrated intravenously in D. C. G nonresponsive patients at the ACR meeting earlier this month, we presented preclinical.
Nickel data of intravenous nickel patches in models of <unk>, showing minimal local and no systemic toxicities, along with evidence of anti tumor activity.
Beyond bladder cancer, we continue to assist pets in a monotherapy basket trial of <unk>.
Other Nixon for expressing solid tumors.
Turning to <unk>, we are pleased to announce that we recently enrolled the first patients in her claim of five.
This study is evaluating <unk> in the frontline maintenance setting of her two positive metastatic breast cancer patients.
Patients are randomized to receive to Kaiser Trastuzumab, and Tuesday, mab or Trastuzumab and puts us in a mab alone after completion of the <unk> components of the combination therapy.
Despite the excellent results obtained with the standard of care treatment THP patients remain at risk of relapse in days, including the risk of relapse in the brain.
In Gi cancers, we expect to report topline results from the mountaineer phase II trial in the second half of this year with the potential for accelerated approval in the United States next year.
This study assesses Chicago Trastuzumab as treatment for patients with previously treated <unk>.
Metastatic <unk> positive colorectal cancer.
In first line CRC, we recently initiated a randomized global phase III trial mountaineer, three comparing to Kaiser Trastuzumab and standard chemotherapy to chemotherapy alone. This trial is intended to serve as a confirmatory trial for her two positive CRC if <unk> receives accelerated.
In the United States and will also support future global submissions.
Additionally, we are studying <unk> in combination with Trastuzumab in the basket trial for solid tumors with so two ulcerations.
Moving onto two deck to deck has received accelerated approval in the United States for the treatment of patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy.
The phase III monotherapy trial in cervical cancer innovative 301 is enrolling well and is intended to serve as the confirmatory trial in the United States and to facilitate global regulatory applications as.
As we look to move tip deck into earlier lines of metastatic or recurrent cervical cancer, we will present frontline combination data with keytruda from the innovative two or five trial in an oral presentation at <unk>. This June the <unk>.
Study has also been expanded to further investigate frontline multidrug combinations, including <unk> with Carboplatin and keytruda with or without Bevacizumab.
Beyond cervical cancer, we continue to study <unk> in other malignancies, both as a monotherapy and in combination with Keytruda <unk> platinum containing chemotherapy.
The ongoing phase II study innovative two O seven is evaluating <unk> in multiple solid tumors, including patients with squamous cell carcinoma of the head and neck. We recently presented encouraging monotherapy data in these patients and we have now expanded the trial to explore the combination of <unk> chemotherapy and Keytruda.
In the frontline hidden that cancer testing.
I'll turn now to citrus we are extremely pleased that two important phase III trials with ADCETRIS in newly diagnosed Hodgkin lymphoma patients were selected for oral presentations at ESCO.
First is data from echelon, one which showed that ADCETRIS in combination with ADT significantly improved overall survival compared with AAV bvd in patients with advanced Hodgkin lymphoma.
ADCETRIS was shown to reduce the risk of death by 41% with a hazard ratio of <unk> five nine and the P value of 0.009.
The second presentation will be of data from the phase III children's oncology group study a hard 1331 in pediatric patients with high risk Hodgkin lymphoma. The study met its primary endpoint of superior three year event free survival with ADCETRIS plus chemotherapy compared to chemotherapy.
Some of them that includes PMI.
We are planning to submit a supplemental BLA is full of these two trials to the FDA this year.
Turning now to just such a map of a dozen or D. V. We recently began enrolling patients into the Registrational phase two monotherapy trial in second line <unk> expressing metastatic urothelium cancer. If you obtained positive results from this study it could potentially support accelerated approval in the United States. We also plan to initiate.
Additional registration studies in bladder cancer, and so too low breast cancer over the next several months. We are also considering development in other her two expressing solid tumors such as gastric cancer.
Now I'd like to briefly mention our early stage pipeline. We are currently evaluating a growing number of drug candidates in phase one clinical trials across a range of solid tumors and hematologic malignancies earlier. This month at AAC, we presented promising preclinical data on two of our newest clinical stage ADC programs.
ESG and be safe and H for G and SG&A L. PV.
<unk> seven <unk> as of a dozen ADC targeting the immune checkpoint b seven H full which is expressed across solid tumors, including breast ovarian and endometrial cancer with limited normal tumor expression, we detailed the robust anti tumor activity of the ADC and its immuno <unk>.
The tree activity through induction of immunogenic cell death.
We also disclosed preclinical anti tumor activity of SG&A LTV, a novel of a dozen ADC targeting the central alkaline phosphatases, which are expressed across solid tumors, including ovarian endometrial gastric and non small cell lung cancer. We recently enrolled the first patients in phase one trials.
These two adcs I will now hand, the call over to clay.
Thank you Roger before we turn to Q&A I would like to comment on our ongoing legal proceedings with Daiichi Sankyo.
A jury recently found that Daiichi sankyo willfully infringed one of our U S patents with in her too.
We were awarded damages of $41 $8 million.
Representing an 8% royalty on past sales have been hurt too in the United States with this verdict, we now intend to request that the Court award a royalty on future U S sales of <unk> through expiry of the patent in November 2024, as well as enhanced <unk>.
Images attorney fees and costs.
We anticipate a decision from the court on the future royalty later this year.
In a related matter the U S patent and trademark office granted our request.
On rehearing and instituted to post Grant review proceedings brought against certain claims of the same patent, which we intend to vigorously defend.
Separately, we are engaged in arbitration against Daiichi sankyo over ownership of certain ADC technology used in her two and several other product candidates.
We expect a decision on the arbitration in mid 2022 it's important for us to defend our intellectual property as we continue to drive groundbreaking ADC innovation and develop transformative therapies for patients in need.
In closing, we expect to achieve many important milestones in 2022, including important clinical data Readouts global commercial.
Commercial progress and advances across our pipeline with that will open for your questions. Operator. Please open the line for Q&A.
Thank you we will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys and to withdraw your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.
Yeah.
Yes.
And the first question will come from Cory Cassie mob with J P. Morgan. Please go ahead.
Great. Thanks, guys and good afternoon wanted to ask about <unk>, So a nice quarter and I've just given the prevailing guidance you have here I think it implies an average of about 75 to just over $80 million per quarter over the balance of the year. After after you just the 90 million in Q1, So I'm just curious how much you see.
The guidance at this stage is kind of prudent conservatism until you see how market dynamics start shaking out.
Bob.
Within her two versus an expectation that in her two comes in and quickly takes a lot of share and the non brain Mets patients. Thank you.
Cory Thanks for the call, we're really proud of to Kaiser and we have not seen.
Any new approvals as you know on and her too.
Yet.
Our guidance includes.
Yeah.
And the assumption of an approval later this year, perhaps soon.
And an impact.
Especially the non brain Mets exactly what you said so.
I think you asked are we.
Wanting to see what happens.
Later this year I think that's exactly right.
It's a very we're being very transparent that we.
And we provided guidance and I don't think it makes sense at this point to change the guidance.
We certainly will if things happen in certain ways, but right now I think what you said makes a lot of sense.
Todd do you want to make any additional comments about that.
Sure. Thanks, Cory for the question Clay I'm happy to so Cory the guide them to kind of this year as you might imagine.
There's a little bit of a tough one we were doing great with the Kaiser and the current label, but we know that in her two I think they've got to produce.
In may.
We're already seeing them in guidelines so as this drug moves forward.
The drug is very <unk>.
Active in patients and is a great drug for patients.
We think that as it hurts you reach a market gets approved.
That it will create a sequencing change and how these drugs are used and may push the Kaiser.
Into a little bit of a later line of therapy. So that assumption was built into our guidance.
And we feel like our guidance is very good.
Okay. Thank you guys.
Okay.
The next question will come from Salvia Register with Goldman Sachs. Please go ahead.
Thanks for taking my question heading into the cohort K data could you just frame expectations on what <unk> is clinically meaningful given keytruda activity into that part in that population.
So thank you for the question Salve in where we are very excited about pad seven the opportunity with cohort K and the rest of our trials, that's where we're working some of them are global trials as you know.
And Roger can.
Tried to address this question and see what.
He can say, but we we haven't outlined like a specific here's a bar here, what we need to get after so I know Roger will do his best to provide color, but understand we can't be exact it's really at the end of the day, it's up to the FDA and we would be remiss to try to say here's the fda's bar since it's really up to them.
Exactly thanks Cliff now just to add some more commentary.
Yeah.
In terms of the patients that we've enrolled they office platinum ineligible.
So the closest population you can potentially look at populations treated with carboplatin or carboplatin based regimen, and so that regimen. The response rate would be expected to be somewhere in the mid <unk>.
We have obviously generated data with pets as monotherapy in later lines of treatment somewhere in the sort of 40% 50% range.
<unk> has a range of responses depending upon PD.
PDL, one status and we have code a which was.
An initial assessment of both.
<unk> and Keytruda in frontline CIS ineligible population, which produced a response rate of 73. So you can take all of those numbers. They are all relevant in terms of trying to understand what the landscape will be but I think play is exactly right. We will obviously be excited to bring forward. The data that we have but in the end it's.
And FDA review issue as to exactly what's the bias.
Thank you.
Yes.
The next question will come from Andrew Berens with SBB. Please go ahead.
Hi, Thanks, Congrats on a strong execution in Q1 guys.
Just a question on <unk> I was wondering when we may see some data with other backbone therapies, especially on top of her two is there any reason to think that should cause it wont be effective within her too or that the toxicities may be overlapping.
Andy Thank you for the question.
Really excited with <unk> in many regards we have other data coming out such as in colorectal cancer and we have quite a few trials going on in different diseases.
I think Roger would be appropriate to comment on thoughts in combination, whether they're with and her two or other things Roger yes, sure absolutely so Andy.
In principle right the construct of in her two which is trastuzumab together, where the chemotherapy payloads.
So inhibition of the pathway plus lots of toxic effects on cells is not that different from the regimen that was used in her two client conceptually, which was case side of English as the cytotoxic agent Trastuzumab together was to cabinets. So that's sort of first principles.
One could reasonably extrapolate that a combination of two kinds it together within hotels.
May have some interesting efficacy.
With regard to toxicity, obviously, each drug has its own profile to cat as a single agent is a very well tolerated agents and in fact can be taken for years.
And that is an important attributes.
We are generating the data right now so I can't comment on what the profile will look like but suffice to say we are interested in that combination because these are the two most active agents recently on the hill to landscape and it's important to understand if they may be potentially medically meaningful when income.
Combination.
Okay.
Since when we might see some of the data.
Yeah.
With generally enrolling and we are generating data center, we've not given any any indication as to what the timing of that would be.
Okay.
Well wait.
The next question will come from Michael Schmidt with Guggenheim. Please go ahead.
Hey, guys. Congrats on the quarter. Thanks for taking my question I had a follow up on EV 103 cohort K. Thanks for comments on the response rate.
I understand duration is another important end point, perhaps could you help us understand what duration of response is clinically meaningful in this setting and.
Is there a particular hurdle for that and then obviously the study has two arms.
Assuming if both arms succeed on respond trade.
There will be a comparison of the combination versus <unk> monotherapy is that the correct way of thinking about it. Thanks.
Michael Thank you for the question on this I am glad you brought up duration duration is something that you know.
Sometimes investors forget to ask you about that's so important and making cancer drugs because if.
You have a response rate that looks good but it's not really durable, it's not that important to cancer patients and we pride ourselves in looking at duration with all our products and making sure that they are meaningful for patients and making a difference in their life and so.
Our duration of response is also important to the FDA and we know that acutely Roger can you talk to them a little bit about the endpoint in the arms of the trial sure. Yeah. So great question. So from a durability perspective, obviously, one of the hallmarks of something like a PD one inhibitor such as timberlands Mab.
Durability of response is really a hallmark of immunotherapy.
And it brings enormous value as places.
We have generated.
Duration of response.
Cohort, a and it looks very favorable long certainly longer than one would expect with chemotherapy, which is probably <unk>.
Somewhere in the seven months median durability something of that order or thereabouts.
But from a we need to we need to basically present the data from cohort K re look at that durability.
As you know on first principles every reason to believe that it could be favorable, but we need to see the data the individual therapy, which the monotherapy of pads.
In that trial, there is no specific setup to directly compare.
But obviously these are contemporaneously randomized patients.
The main value, we see off the pensive monotherapy is too.
More understandable clearly understand contribution of components, but that dataset will stand by itself as well and so obviously when we've had that data out and we can look at that we can make judgments as to the nature of it.
The quality and durability of pets at monotherapy.
Okay, great. Thank you.
The next question will come from Matthew Harrison with Morgan Stanley . Please go ahead I have Steve asking for Matthew I have my question I guess about a BB yourself.
I see that you are pursuing the her two low breast cancer I Wonder ask why you do this well.
What differentiation part that you see compared to when the hard too in this front. Thank you.
Well hi, Thanks for the question on D V. So one of the things we really like about DB is it doesn't use trastuzumab trastuzumab is.
The name.
The generic name for Herceptin and that same antibody is in cat silo and and her too and so we've studied that we'd know the internalization rate of that antibody and we know that the antibody. That's in D. V has a very rapid internalization much more rapid and so we think.
That's an attribute to that antibody drug conjugate. So we're excited for that product we've seen data that's.
Already exciting in her two and.
Patients at a low or two and we also know that.
DB works in combination with PD ones, and we've seen data to that.
And so we think that that's also differentiating because some of the other camp.
Camptothecin containing ADC camptothecin type molecule containing adcs.
Don't seem to have yet shown that they work well with PD ones, perhaps we'll see that in the future, but the data I've seen to date is.
He is not as compelling as they've seen the data with ARPA dotan Adcs in combination with PD. One so we think that as a single agent. The rapid internalization is differentiating versus trastuzumab or the core antibody for the 286 targeted to hurt too on the market and the.
Second thing is the combination with PD ones also as potentially differentiated so I think those give us excitement that this is a differentiated product.
The next question will come from Geoff Meacham with Bank of America. Please go ahead.
Hi, This is Greg on for Jeff Thanks for taking our question.
So how are you thinking about the pad seven two guys are ex U S opportunities.
Obviously, there are different economics between the two but do you see any differences in their respective peaks and commercial dynamics relative to what we've seen in the U S and is the peak et cetera.
<unk> relative.
The U S is that an instructive.
Comparison here.
Thanks. These are really good questions.
I just want to point out a few things.
Things that are critical.
Critical trying to address your question first of all to Kaiser is something that.
In Europe , we had their own sales force and we are.
Prosecuting that.
And getting gaining many approvals and trying to country by country, we get reimbursement we had said.
In Europe , we're working with our partner Astellas and it's their territory, where they lead the charge. So we lead the charge in Europe , which you guys Astellas leads the charge and pads up we love both drugs I just wanted to set up the ground rules for different dynamics there.
With et cetera. So that you know those dynamics, we have the U S and Canada, we leave the the.
The commercial sales force and marketing.
And outside the U S. It's Takeda so there's differences with each of these drugs and how it's.
And commercialize depending on.
Who does it and what territory and what partner or we do it.
And so the opportunities for these drugs are strong and the reason they are strong around the globe is because these are good drugs and as you know cancer drugs don't know borders and boundaries and countries in politics. It's this is about patients and it doesn't it doesn't matter where they are if they could benefit from <unk>.
Our drugs, we're very excited about it and we want to bring our drugs to these patients.
So the ex U S opportunity for et cetera is something we have a lot more experience with you brought that up at the end of your question and the ex U S opportunity for et cetera is actually done well.
Could you talk a little bit about how we look at it and what the differences are kind of economically speaking.
Yeah. So let me first Gregg <unk>.
Please write we book sales for <unk> in Europe and it is.
Profit share with Astellas for paths are in Europe . So.
A little bit different treatment, there I would say in general when you look at drug launches in the U S versus drug launches in Europe . There are probably two things that I think are worth noting.
Number one is in the U S. We launched the drug you set a price and sort of you're off to the races, and then with subsequent labels you expand patient populations in Europe . It's different you get approval and then you need to go country by country to negotiate prices in some countries.
You can launch with I called up kind of a provisional prices are different names in different countries for it but in some markets like France, and Germany. You can you can access the market commercially while you're negotiating your price in other markets throughout.
Throughout Europe , you have to negotiate a price before you're allowed to launch so what does that launch trajectory it tends to spread it out Europe .
Europe tends to be a little slower than how it reaches peak than in the U S. Because you don't have these impediments to getting to the market with Europe , you need to negotiate country by country and that slows things down obviously, you want to try to focus your initial efforts in.
Key markets, which is what we have done.
The other I guess element that I would point out is typically European prices are lower than U S prices. So while there may be the same.
General number of patients.
In the U S and in Europe .
The pricing tends to be different that's number one and then number two the.
The rate at which you get to the market is different for Europe .
And then also typically and in Europe as you launch additional labels your price tends to go down.
Okay.
Yes.
Got it Super helpful. Thanks, a lot.
The next question will come from Gena Wang with Barclays. Please go ahead.
Thank you.
Just one question regarding the arbitration decision.
Positive shall we expect volatility also in Q November 2024, and also should we expect the volume of TB in a similar range to 8% I mentioned for the pass sales.
From the jury verdict.
So gena. Thank you for the question I'm really glad that you asked this question.
It's.
<unk> that we hope that gets resolved in the not too distant future.
As there has been already one court ruling on the patent infringement.
Let's address your questions, let's start with the patent infringement.
So the jury ruled.
And awarded US, 8% as you had mentioned.
Previous sales, which is what the jury was asked to decide upon that was that previous sales and it was willful infringement that was also in there and that's something that's a public record that you know about and so that's basically the time of the court case for the patent infringement. The rest of it and you brought up November of <unk>.
2024, that's to the underlying patent that was being infringed. So we have we work with the <unk>.
Judge in that patent infringement case, and you provide information to the judge and your request.
That and this is legal things I'm, not a lawyer, but your request.
The judge to provide you with a royalty going forward.
Till the end of the patent life and this is still a still under patent infringement not the arbitration. So I don't want anyone to get confused and the judge will decide what the royalty is I think the 8% that the jury decided on historic is.
Potentially.
Something that you could look at but it's up to the judge and so I don't want to begin to say, whether the judge will do lower higher or the same it's really up to the judge.
The second thing and the second part of your question is the arbitration.
Now that is based on contractual issues that we had with Daiichi sankyo based on our almost nine years of working together with them.
And teaching them, all about our ADC technology, and how to employ it and.
And so that is not subject Ah.
We do not believe that is subject to the end of this specific patent what it would be.
<unk> would be subject to.
Any patent life of those molecules that include our linker and each molecule by molecule is usually most companies what they do we include it is will patent any unique molecule.
And then you have the underlying tech.
Technology, if you will so if they patent a new molecule using our linker system and that new molecule patent life goes through let's say 2034, just to pick a date than what we're asking the arbitration is for value through that 2034 time for sales.
And since they have a quite.
Quite a number of molecules using our.
Technology and.
And they don't have the same exact patent life because they are different molecules that were made at different times, there could be a range of outcomes of times that.
That if we win the arbitration that royalties or some value thereof.
I don't want to assume the judge will pick royalties. The judge can do whatever the judge wants to determining value.
Sure.
And so that.
That.
Could be determined based on many more years than 2020 for it because it could be the end of the patent life of those specific molecules on a case by case basis also for those molecules. It would not be based on the U S sales, which is the patent that we're talking about.
Our contract with global so for US it would be based on global sales and that global those global sales could be over a substantial period of time that could stretch into 2030, depending on molecule.
Does that I hope that provides you with what you need for understanding gena, yes.
Yeah. So maybe just follow up a question, so who will decide the wrong way.
Would that be like a window arbitrator makeup officially announced that you're fishing Wuxi also announced a volatile rate or will you be negotiating with daiichi about individual volatility of for each individual asset.
Well Gino I want to compliment you on the question.
So I don't know the answer at the answer that because it's up to the judge but I want to compliment you on that question because the judge can rule and decide theres a royalty rate and that's what the judge can do the judge could decide theres cash or it could be only cash or cash and royalty and a lot of different things that the arbitration I should say not just judge the arbitration.
Judge not the patent infringement judge can make a decision on what type of value that this.
It should come to see Jan if she determined that we made our case and it was correct. So that's up to the arbitration judge the arbitration judge could also rule that.
The linkage inside of her two and there are other molecules.
In <unk> and the judge could say <unk> and Daiichi need to work this out and come to you know royalty in discussions. So I. It is not something that is up to us its up to the arbitration judge in this case.
Okay. Thank you.
The next question will come from Andy Assai with William Blair. Please go ahead.
Great. Thanks for taking my question so related to all the questions about the her two franchise.
I think season is in a very unique position, where you have heard two targeted ADC and a small molecule. So I'm just curious if you could share your thinking on how to take advantage of this strategic attribute.
And along the same lines I think Roger mentioned about the amplified at mutated population so.
I'm curious if you're open to kind of sharing with us.
Any sort of plans there as well thank you.
Andy Thank you for that.
The interesting questions and in fact, we're really proud of that we have I heard two franchise.
You know with our small molecule and our and our antibody targeting the inside of the cell and the hurt you talked through the hurt your tyrosine kinase is an important mechanism targeting the outside of the sell through in ADC through an antibody that then delivers poten.
<unk> C to be inside of the cell, we think could come out of it and really attack the cancer cell and do well by patients and Roger perhaps you could talk about your thoughts on combining outside of the cell and inside of the cell targeting and other questions that Andy had any populations.
Sure. Thanks.
Thanks So.
The question and Yeah, you're right I mean, we have to we have two active drugs <unk> already has.
And activity profile, that's been generated in China, and what really has approvals in China.
And so I think we have not disclosed any specific plans.
But it is an obvious place for us to think carefully about where codes.
D VEB valuable 40, Kaiser and in the opposite direction.
Rick with two kinds of potentially be valuable.
A decision that the dosing development program. So we are busy thinking those things through its certainly under consideration I would just reiterate.
The Divi program as we've currently designed this is basically taking and building off of the data that's come out of the imaging data from from China. So for example.
Going after bladder cancer is sort of an obvious traditional place to go for those two agents, but they have already generated.
Very interesting data. So we think that that's an important.
To take further and see if we can make something of that and turn that into a product because it's an open IND and we've already begun but we have designated as a pivotal trial potentially looking for accelerated approval.
Her two population and then the other piece of television which is going in after the her two lows also based on data generated from Vimizim. So those two things sort of put out in the public.
Obvious place to start, but there is lots of opportunity and.
And we're excited exactly as you say, we're excited to have two products in that same area because there's just so much potential that efficiency.
And sort of synergy if you will.
At multiple levels for us.
And would you be willing to share any sort of thoughts on the amplified or mutated alright indications and strategy I apologize.
I got carried away you're talking about the two together.
Yeah, we have a basket trial running.
Two kinds of so we're obviously very interested in it.
Trastuzumab combination across.
Many different tumor types obvious ones that come to mind to include things like biliary tract cancer.
Non small cell lung cancer and so on so we're generating that data.
And clearly from a from a strategic perspective that type of thinking could be applied to D. V. As well again, we have not disclosed any of that information, but I can just assure you we're thinking through.
All the possible opportunities both as individual agents.
Combined with the Trastuzumab approach.
And and Dv as a single agent and then potentially the two together.
That's very helpful. Thank you so much.
Okay.
The next question will come from Jay Olson with Oppenheimer. Please go ahead.
Oh, Hey, congrats on the quarter and thank you for taking the questions I just wanted to follow up on D. V. Since you initiated the Registrational trial of <unk> in patients with her two positive metastatic <unk> cancer can you just describe the rationale behind prioritizing that trial over other trials and then.
Since you have phase two data for D V at Astro in her two negative patients with locally advanced or metastatic <unk> cancer can you just comment on how those results may read across to the potential for D V and other her two negative tumor types. Thank you.
Sure Jay Thanks.
Very interesting questions.
I will remind you that D V.
As an exciting drug in Europe , Uveal cancer, It's got great data.
And I believe it has breakthrough designation as well so its something that theres a lot of real information and rationale to go forward.
Roger do you want to comment about.
You know the.
The other parts of the question and what we're thinking about DB and.
Filial cancer sure Yeah, so just to reiterate.
In bladder and Euro CTO cancer actually supposed to expression is in a meaningful number of patients.
Its biological relevance.
May be there may be an important component potentially but regardless of that it's a surface marker.
And that's what an ADC needs to internalize.
So.
Basically as I said earlier, we will really have an IND D. We have breakthrough therapy designation.
And we have a trial that we have initiated so it's an obvious step from our perspective to take.
D V into Euro CDO cancer as a unique molecule because you know from.
From the point of view of who else is developing therapies and you will see though cancer in the <unk> space I think.
We're pretty much alone and Thats important and secondly of course, the data that has been generated as it is really exciting and so we think we can bring potentially another product with clinical value to patients with your residual cancer.
With regard to.
Again, the sort of virtual or best candidates. The same principle, we see that as an important opportunity play offline all the potential differentiating features.
<unk>, including the antibody itself the potential combination with PD one inhibitors, we haven't disclosed the details of our development plans, but when we do.
That will be helpful for you to understand how we're thinking about this.
You did mentioned some data being presented are not entirely clear.
What youre, referring to but I would just say in general.
Again on sort of first principles adcs require receptor expression on the surface that doesn't necessarily require that receptor to be biologically relevant to the tumor all it needs to do is internalized. So.
Just as other molecules have gone after.
Populations with relatively low <unk>, so we see TV in the same way.
Great. Thank you.
Yeah.
The next question will come from Ren Benjamin with JMP Securities. Please go ahead.
Hey, good afternoon, guys. Thanks for taking the questions and congrats on the quarter.
Can you provide us maybe some color regarding the ongoing evaluation of the L. B.
And how that might advance going forward and if you had to pick kind of like the greatest pits at <unk>. You know maybe a couple that are that could drive practice changes maybe one that's a sleeper that you'd feel shouldn't be overlooked.
Sure so.
<unk> is an active drug and we have this partnered with Merck and we've seen it active and a lot of regards single agent combination studies, we've been trying to find the best dose schedule patient selection.
Line of therapy, there's something there's there is an excitement there, but it has taken longer than we had initially.
To get to where we could consider a pivotal trial, we're trying to do our best there its a competitive and crowded space and Roger could perhaps make a comment.
I'd wanted to just talk a little bit about <unk> first.
I don't know exactly what.
Your.
Asking on Africa, So I'll tell you what I'd like to tell you which is.
I think with ADCETRIS, we have a pediatric study that's very exciting and we have a our frontline study our echelon one six year.
Survival data and where we really have we have a 41% reduction in the.
The risk of death were going to show the Kaplan Meier plots and all the data.
This is <unk>.
In patients with <unk>.
Pediatric patients with Hodgkin lymphoma and in adults.
We have stage three and four Hodgkin lymphoma. The data we have is it's really.
Life altering if you have those diseases youre in those categories and etcetera Regiment.
Work tremendously well so we're proud of that and we're gonna be proud to show the data in it.
Detail.
The impact on potential patient.
Roger do you want to make any comments on lv or omni etcetera stayed at Africa, yes.
Firstly on the ADCETRIS as Clay said, you know finding an overall survival positive signal in Hodgkin lymphoma is almost unprecedented there's very little historically that has been able to do that so we're super excited by.
By that data with regards to Lv.
Again, I'll reiterate what place here. This is an active agent both as a monotherapy and in combination with Keytruda and we presented data in that regard, but again as clay said, it's a competitive space, we understand what the profile needs to be in order for us to trigger a pivotal trial and we continue to work on dosing schedules. So we haven't disclosed any more intimate.
All I can tell you is we're still working hard at that to see if we can.
It creates the right.
The right profile.
Nickel profile from either the monotherapy or the combination to bring forward and test further.
Got it and I guess, just just on the on the <unk> play.
Your answers just fine.
In terms of the sleeper I guess, you guys have 23% to 24 abstracts or is there anything that.
I might overlook that you think it's earlier stage, but.
It makes sense to really kind of focus on because you're you're feeling quite excited about it.
So many things are.
In there.
To look at so I don't know that I want to just tell you one thing to focus on I think the <unk>.
Standby my comments at the etc data is to me the most critically exciting.
Excellent. Thank you.
The next question will come from Amit <unk> with Needham <unk> Company. Please go ahead.
Hello, guys.
Guys. This is unknown Macquarie on Monday.
On behalf of Ami.
I think thats right.
My question is related to tip bags and the early months of movements.
I wanted to know if you guys are thinking about adding lines uptick bags on how do we see the potential of those four markets.
Okay, well you know, we haven't really guided to tip deck as far as the growth for it yet so we're not going to do that yet, but as far as the early dynamics chip.
Chip would you like to comment on the early dynamics in tiv deck.
Thanks.
Sure.
So the launch is going very well the physicians are very excited to have a new treatment alternative for patients because quite frankly that are in really tough situations. So we've been really pleased with the.
Current results, we have for <unk>, and we look forward to continuing to grow the brand throughout the remainder of the year.
Thank you.
The next question will come from Zach <unk> with Bahrenburg. Please go ahead.
Great. Thanks, very much for taking my questions.
I have two questions Pat.
On the on the Q1 sales side.
It's very nice to see theirs.
There was another.
$9 million coming from.
I think what Paul I guess for the.
Full year 2022.
Do you expect to see more more more sales from supplying clinical trials.
And then second question on the <unk>.
Pay side.
It's a randomized two arm randomized trial, what do you expect you can or are in the model.
Mono.
At that time, the reason why I asked that question.
We've seen 44%.
That setting.
I have already and if you can replicate it.
Combination 70, plus or in the combination arm you can see more in the frontline from past that how do you think that that.
How do you think that the importance of that progression.
Could be okay. Thanks very much.
So first of all Todd can you address the clinical trial question on Peru.
Clinical trials supply question and then maybe Roger you go into cohort K and we can't provide all the data that youre looking for obviously that will come out with our data. So we can't give you specifics and tell you what is required and what the line is and everything but Roger can give you a general comment.
Todd can you talk about the clinical trial supply.
Sure, Yes happy to as we've said on earlier.
There was a $9 million clinical supply order in Q1, we try to call those out when they happen I think if you go back a few quarters I think it was maybe third quarter of last year there was a.
But I think about a $7 million order.
With respect to your question about guidance.
That's typically not something that we try to build into our guidance. Although I did comment earlier that this $9 million wasn't included in our guidance because when we gave our guidance that had already shipped.
Will there potentially be more orders potentially but we don't control those.
Even if even if someone said we might do it that's not typically something we would include we would wait to see them actually come in.
And then in relation to cocaine pensive.
Youre right.
In a in a previously untreated population, including exposure to platinum agents and PD, one or PD. One inhibitors. We have generated response rates and that sort of 40 to 50 range, 50% range with monotherapy and we have not to date had any data in an untreated population. So I mean I can.
Speculate on what that number will look like.
We will need to generators and then we will understand what pets at monotherapy looks like in that space. I would also just reiterated is randomized, yes, which is important.
The again the primary purpose for the mono therapy is to understand the contribution of components for the combination, but that data does stand by itself and so again, we have the chance to evaluate <unk> monotherapy in and of itself.
Next to the combination.
Helpful.
The next question will come from Joe Catanzaro with Piper Sandler. Please go ahead.
Hey, guys. Thanks, so much for squeezing me in maybe one quick one for me. So I think chip you spoke about the delay of patient flow into the third line setting with the adoption of inherent to I know, it's still early but just wondering if you have any assumptions around when the new steady state of patients moving into third line therapy has achieved and whether that new normal is.
Something that might be achieved in 2022.
Jeff go ahead, yes, thanks, Mike Yeah. So it's a good question, it's difficult to actually kind of forecast that first they've got to get approval and a label and then we've got to see what that looks like to kind of assess the potential market impact I think it is important to note. The changes for the second line changes to a second line regimen can call it.
<unk> is a new patient starts in the third line, especially if that regiment introduces a longer duration of response.
Okay. Thanks.
This concludes our question and answer session I would like to turn the conference back over to MS. Peggy Pinkston for any closing remarks. Please go ahead ma'am.
Okay. Thank you so much operator, I appreciate everyone's questions and comments today.
Have a great evening.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
Okay.
Yeah.