Q2 2022 Clovis Oncology Inc Earnings Call

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Today's conference is being recorded.

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Patrick.

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Communications.

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Thanks Samantha.

Morning, everyone welcome to the Clovis oncology second quarter 2022 conference call. We appreciate you joining us you've likely seen this morning's news release and if not it's available available on our website at Clovis oncology Dot com.

As a reminder, this conference call is being recorded and webcast remarks, maybe excess life on our web site during the call and will be available in our archive for the next several weeks.

Days agenda includes the following Patrick Mahaffey, our president and CEO will discuss the second quarter and recent highlights and then Dr. Lindsey Rolfe, our Chief Medical Officer will provide a summary of the recently presented a S. A P. Two to eight six data at S. N M M I <unk> and Athena mono data at Astro and the plans for Rocco regulatory filings when people also provided.

Additional regulatory updates as well as the anticipated upcoming clinical milestones for F. N P. Two to eight six and Rebecca.

Then Dan Muehl, our Chief Financial Officer will cover the financial results for the quarter.

Patrick will then make a few closing remarks, and then we'll open the call for Q&A during which time, Pat Lindsay and Dan will be available to answer questions.

Before we begin please note that during today's conference call. We may make forward looking statements within the means of the federal securities laws, including statements concerning our financial outlook unexpected business plans.

All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Our actual results could differ materially due to a number of factors, including the extent and duration of the effects of the COVID-19, pandemic and the extent and timing and extent of recovery from it.

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 Clovis undertakes no obligation to update or revise any forward looking statements. Additionally, please note that we'll be discussing cash burn a non cap GAAP financial measure during todays call.

The disclosures related to this are in todays news release, which can be found on our website now I'll turn the call over to Pat Mahaffey.

Thanks, Anna excuse me good morning, welcome everybody.

We appreciate your time today.

Good.

Sorry about that.

Key milestone in the second quarter with a presentation of the first clinical data from the linear trial of F 22 86.

Data, which were presented at the society of nuclear medicine, and molecular imaging and what countries. So the first evidence of safety and clinical activity.

For our first peptide targeted radionuclide therapy candidate.

And importantly, further demonstrates the fibroblast activation protein or S E T.

Promising thorough gnostic target with expression across many types of solid tumors.

Lindsey our Chief Medical Officer will discuss the data in greater detail shortly but we're obviously encouraged by the initial results and look forward to presenting additional clinical data and initiating phase two expansion cohorts in multiple tumor types later this year.

Turning to <unk> sales in Q2, 2022 were $32 $1 million six.

6% lower than the prior quarter, and 13% lower year over year compared to Q2 2021.

The reduction in ovarian cancer diagnoses and fewer patient starts in the U S. In previous quarters. As a result of Covid has continued to impact second line maintenance treatment.

Ovarian cancer diagnosis appear to be reverting to pre pandemic levels.

The effect of this increase is almost wholly observed on frontline treatments and will not likely impact the second line indication for several quarters.

In addition, we believe that the adoption of PARP inhibitors in the frontline setting is impacting the use of PARP inhibitors in later line settings.

Despite the decline in sales, we remain confident in breakfast potential to address larger patient populations and earlier lines of therapy for both ovarian and prostate cancer based on our ongoing and recently reported phase III studies.

The positive results from Athena Mono phase III were presented at the recent ESCO annual meeting and at the prestigious best of Astro meeting series.

<unk> also provided us the opportunity to interact with the clinical community, where we received overwhelmingly positive feedback on the Athena model results.

We intend to submit regulatory applications for approval in this indication to both the FDA ebay during this quarter this year.

Following Athena motto, two additional topline phase III data Readouts for Rebecca are expected in the next few quarters.

Data from the Triton three trial in the second line prostate cancer treatment setting is expected early in the fourth quarter of this year.

Data from the Athena combo trial of <unk> in combination with Opdivo in the frontline ovarian cancer maintenance treatment setting is expected in the first quarter of 2023.

Before I turn the call over to Lindsay I also want to reiterate our efforts to improve our balance sheet.

While we were disappointed that resolutions related to a potential reverse stock split and authorized shares did not achieve the threshold to pass.

We were grateful that a solid majority of the shares voted were in favor of our proposals.

We are currently exploring alternatives and strategies to allow the flexibility for future equity raises.

Our efforts to raise additional capital also include entering into strategic partnerships with licensing arrangements.

And we are currently in preliminary discussions related to partnering certain development and commercialization rights to <unk>.

286.

For an upfront payment with the potential for milestones research and development support and warranties.

I'll turn the call over to Lindsay.

Thank you Scott good morning, I'll start with a summary of the clinical data.

22, 86 that were presented at Ash and MNI and highlight the key clinical milestones expected for 'twenty 286 in the near term.

As a quick reminder, a P. 2026 is the first peptide targeted radionuclide therapy and imaging agent targeting fibroblast activation program protein or S. I P and clinical developments.

As the lead candidate in a tele radiotherapy development program.

In the ongoing phase <unk> study.

2026 is used both as an imaging agent under therapeutic agents also known as a fair enough stick.

So the imaging agent P. <unk> 286 is attached to the isotope gallium 68 allow public.

Positron emission tomography or pet imaging and selection of patients for inclusion in the study.

Well the therapeutic agent P <unk>.

286 is attached to the isotope lutetium 177.

In the midst of a beta particle ionizing radiation that causes DNA damage and cell death.

The phase one portion of the ongoing <unk> study is evaluating the safety of the S. E T targeting investigational therapeutic agents and identify the recommended phase two dose and schedule of mutation 177 labeled F 2026.

The data presented at Ash in MMA and treated nine patients treated in the first two dose cohorts overall.

Overall, 22, 86 demonstrated a manageable safety profile and early evidence of activity.

Treatment emergent adverse events were found to be generally mild to moderate among the nine patients in the safety population that was say three seven or 5.55 gigabyte per dose of ethnic pay 2026.

The evidence of activity included a confirmed partial response in the lowest dose cohort of three seven gigabytes of in a heavily pre treated patients with cancer of the appendix who completed the maximum allowed six administrations of 177 nutrition F 'twenty two.

Six.

Enrollment in the third full plans dose cohorts is ongoing.

In addition to that they took from EMEA additional data from a separate investigator sponsored imaging study with F. 22, 86 were also presented at <unk> and S N MNI.

This study, which is currently underway at UCSF is being led by Dr. Thomas <unk>, who is also the principal investigator of Illumina study.

In this phase one study of <unk> 86 labeled with gallium 68 is being studied as a novel imaging agent to identify metastatic cancer in patients with solid tumors.

So to hopes presentation suggested that 68 gallium F 22, 86 pet is a promising tool for imaging patients across a range of cancer types.

Presentation of updated Lumia F. 'twenty 26 data that E E and M Annual Congress.

<unk> a phase two expansion cohorts in multiple tumor types.

<unk> anticipated in the fourth quarter of 2022.

Now switching to Nebraska.

Athena is a phase III 1000 patient study in frontline newly diagnosed advanced ovarian cancer maintenance.

With Athena, we believe we are uniquely positioned to evaluate Nebraska in terms of two independent outcomes.

One of the therapy versus placebo in the frontline maintenance setting as.

As well as any potential advantage of the combination of the breadth and Opdivo alone.

Alone in the frontline maintenance setting.

As we detailed the results for Athene.

Previous school I'll, just provide a brief review today.

You've seen the mono trial, which is evaluating backup monotherapy versus placebo.

Its primary endpoint, showing Rebecca monotherapy versus placebo improved progression free survival or PFS by investigator assessment in both populations in the primary efficacy analysis.

<unk> posted and all patients randomized or ITT.

The benefits in PFS was also seen in the exploratory subgroups of patients with HRD negative tumors.

Within the HRD positive population with either BRCA mutant BRCA.

Brackett wild type loss of heterozygosity or Allo, Ache, Hi, Seamus.

Those with BRCA wild type disease, whose elevate status could not be determined.

Safety as we backfill observed in Athena mono was consistent with both the current U S and European labels.

For the frontline indication, we intend to submit an NDA to FDA and the type two variation to MH during the third quarter.

As we have previously disclosed the FDA has recommended that we wait for more mature overall survival data from Athena Mona to submit to the S. N D. A.

If the F N D I submitted prior to receiving more mature overall survival data.

He has indicated that the MTA may need to be discussed at an oncologic drugs Advisory committee known as an <unk> meeting.

FDA has also indicated it will consider overall survival data from other recap with clinical trials when reviewing the Athena mono application.

We believe that the encouraging PFS results the primary endpoint of the study.

<unk> supportive of an approval under views in the frontline setting.

We're grateful for the support of the clinical community familiar with the results.

Looking ahead to other phase III Readouts for Rebecca <unk>.

From Athena combo, the combination of Nebraska, plus opdivo versus <unk> monotherapy.

<unk> in the first quarter 2023.

Beyond the opportunity for <unk> as monotherapy in frontline maintenance treatment of ovarian cancer. The Athena combo study represents the potential to introduce an anti PD one containing regimen for the first time to a broad population of ovarian cancer patients.

In addition top line data from the <unk> three trial expected early in the fourth quarter of 2022.

Plenty to question three is a phase three study evaluating <unk> versus physicians choice of chemotherapy or second line androgen deprivation therapy in patients with <unk>.

Castrate resistant prostate cancer with BRCA or ATM mutations.

This trial is the confirmatory study for a breakfast currency crucial in metastatic castrate resistant prostate cancer as well as an opportunity for potential second line label expansion.

The thing that interesting three each provide the potential to reach larger patient populations in earlier lines of therapy for both ovarian and prostate cancers.

The timing for the Athena combo data readout is contingent upon the occurrence of a protocol specified progression free survival events.

Now I will turn the call over to Dan to discuss second quarter financial results.

Thanks, Lindsay and Hello, everyone. We reported net product revenues for bracket of $32 1 million for Q2, 2022, which included U S product revenues of $22 7 million and ex U S product revenues of $9 4 million respectively.

This represents a 6%.

Sequential 6% decrease from Q1, 2022, and a 13% decrease year over year compared to Q2 2021 net product revenues of $36 8 million, which included U S product revenues of 27 7 million and ex U S. Net product revenues of $9 1 million.

Gross to net adjustments totaled 28, 8% globally in Q2, 2022, essentially flat with the 28, 5% reported in Q1 2022.

This metric fluctuates quarter to quarter, but the high 20% level seems likely depending on revenue distribution mix for the U S and Europe .

Obviously discuss as European revenues increase in proportion to the U S global gross to net will increase correspondingly.

Research and development expenses totaled $36 4 million for Q2, 2022 down 20% compared to 45 8 million for the comparable periods of 2021.

Primarily due to lower spending on the bracket clinical trials.

General and administrative expenses totaled $32 6 million for Q2, 2022 down 1% compared to $32 9 million for the comparable period in 2021 due to overall cost reduction efforts.

<unk> Q2, 2022 results is a onetime noncash adjustment of $9 7 million and other manufacturing costs related to the expected exploration of <unk> Branca currently in inventory there were no such costs in 2021.

We reported a net loss for Q2 2020 to $71 3 million or <unk> 50 per share compared to a net loss for Q2, 2021 of $66 4 million or <unk> 61 per share.

Net loss for Q2 2022 included share based compensation expense of $5 4 million compared to seven 4 million for the comparable period in 2021.

Turning now to a discussion of cash and debt well leased at $94 6 million in cash and cash equivalents as of June 32022.

At June 32022, the company had drawn $165 2 million under the sixth Street partners LLC.

Assuming that clinical trial financing and had up to $9 $8 million available to draw under the agreement to foreign expenses there'll be Athena trial.

Based on our current cash cash equivalents and liquidity available under the Athena clinical.

Answering your agreement together with current estimates for revenues.

Generated by <unk>, the company will need to raise additional capital in the near term in order to fund our operating plan and continue as a going concern beyond February of 2023.

As a reminder of approximately 58% a clear majority of the shares voted after 2022 annual meeting of stockholders, who are in favor of the reverse stock split. The overall total number of shares voted at the meeting was not sufficient to approve the proposed reverse stock split of <unk> common stock, which would have had the effect of <unk>.

Chris and the number of authorized but unissued, an unreserved shares of common stock available for the company to issue.

As a result, we do not currently have sufficient shares available shares of common stock to be able to raise meaningful additional capital through public or private equity based offerings.

Therefore, we are currently exploring alternatives and strategies to increase the number of shares that would be available for issuance to permit us greater flexibility in raising capital through equity transactions, including the offer and sale of Super voting.

Supervoting mirrored preferred stock that has been utilized by peers in similar situations to support approval of such proposals, where the existing boats of shareholders stockholders already indicate favorable support.

As Pat mentioned Columbus is also actively exploring sources of funding other than equity financing transactions, including through entering into strategic partnerships or licensing agreements for one or more of our product products or product candidates in order to raise sufficient capital to fund the company's operating plan to continue.

Going concern beyond February 2023, we would expect that we would need to successfully complete some combination of strategic alternatives and equity financing.

Net cash used in operating activities was $35 1 million for Q2, 2022 down 25% from $46 8 million reported in Q2, 2021 cash burn in Q2, 2022 was $26 4 million down 21% from $33 4 million in Q2 2000.

'twenty, one and down 46% from $49 3 million in Q1 2022.

Now I'll turn the call back to Pat.

Thanks, Dan.

In summary, with the early but encouraging clinical activity and safety you've seen to date from the linear Kyle of F 2026.

Look forward to presenting updated clinical data from the <unk> study in Barcelona in October and initiating phase two expansion cohorts in multiple tumor types during the fourth quarter.

We remain confident in where breakfast potential to address larger patient populations and earlier lines of therapy for both ovarian and prostate cancer.

Thought leader feedback on the Athena mono data has been enthusiastic and supportive when we.

We look forward to submitting the NDA in type two variation based on the Athena mono data.

During the third quarter.

We continue to look forward to the anticipated phase III data readout of Triton three in the second line prostate cancer treatment setting early in the fourth quarter of this year and Athena combo in combination with Opdivo in the frontline ovarian cancer maintenance treatment setting.

In the first quarter of 2023.

With that we'd be happy to answer any questions you have.

Yeah.

At this time I would like to remind everyone in order to ask a question.

Press Star then the number one on your telephone keypad.

Again, the star and the number one.

We will pause for just a moment to compile the Q&A roster.

And again, if you would like to ask a question Thats Star then the number one.

There are no questions at this time.

Okay.

Thanks, Tim Anther that's unusual.

In that case.

We thank you all for your interest in Clovis oncology today.

If if you have any follow up questions. You can call me at three O 365, five O two two <unk> or $303 65, five O two three.

This call can be accessed via replay of our webcast at Clovis oncology Dot com beginning in about an hour and it will be available for 30 days.

Again, we appreciate your interest and time, thank you and have a good day.

This concludes today's conference call you may now disconnect.

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