Q2 2022 Spectrum Pharmaceuticals Inc Earnings Call

You.

The conference will begin shortly. If you raise your hand during Q&A, you can dial star 1-1.

Good day, and thank you for standing by. Welcome to the Spectrum Pharmaceuticals 2Q2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michael Graybow, Senior Vice President of Corporate Strategy and Operations. Please go ahead. Michael Graybow, Senior Vice President of Corporate Strategy and Operations.

Thank you, operator. Good morning to everyone.

Thank you for joining us today for Spectrum Pharmaceuticals second quarter 2022 financial results conference call.

Our second quarter financial results press release was sent out earlier this morning and is available on our website at www.sppirx.com.

Joining me in the call today from Spectrum Pharmaceuticals will be Tom Riga, President and CEO , Dr. Francois Lebel, Chief Medical Officer, and Nora Brennan, Chief Financial Officer.

Before we get started, I would like to reference the notice regarding forward-looking statements included in today's press release.

This notice emphasizes the major uncertainties and risks inherent in the forward-looking statements that we will make this morning. These statements are not guarantees of future performance, and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements.

With that, let me hand the call over to Tom Reger, CEO of Spectrum.

Good morning, and thank you for joining us on the call today. This is a pivotal time for Spectrum as we work toward FDA approvals in the coming months for our late-stage assets, Posiopnev and Eplep Agrestum.

both of which are under active review at the agency.

Since the beginning of the year, we have continued to focus on the following three key business objectives.

One, gaining FDA approvals and further advancing our two late-stage assets.

Two, reducing our operating cash burn. Three, ensuring we are prepared to successfully launch both products.

Let me provide highlights, starting with epilopagrascals.

Our BLA is under active review with the FDA with a PDUFA date of September 9th, less than a month from today.

The pre-approval inspection of Homni's drug substance manufacturing facility in South Korea has been conducted by the FDA.

As I've stated previously, this inspection was a critical step for our approval.

The pre-approval inspection was completed in early July with a comprehensive examination of GMP practices, quality management system, manufacturing processes, and overall state of process control.

The inspection resulted with two observations, which were resolved.

We have subsequently had labeling discussions with the FDA and await the final regulatory action.

We appreciate the diligent effort that the FDA is making in their review process and we look forward to their final decision.

Let me shift to posiotinib. Our NDA is under active review and the agency is set up to do the date of November 24th, 2022 with an initial indication for the treatment of patients with previously treated locally advanced or metastatic non small cell lung cancer harboring HER2 exon 20 insertion mutations.

This product is a fast track designation and is on an accelerated approval pathway.

In the second quarter, we advanced to the global confirmatory study in support of our application.

This is an important and required step in the approval process.

We are actively preparing for the upcoming ODAC meeting that will include a discussion of the Posiautinib data package that supports the NDA.

We anticipate that the ODAC discussion will be centered around the overall risk-benefit, dosing, the clinical relevance of the NDA, the data in the NDA package, and the context in the current treatment landscape.

We look forward to the opportunity to highlight the role that podiatomies can play in addressing an important unmet medical need.

The ODAC meeting is scheduled for September 22nd and we will share additional information regarding the Poseotnik discussion when it becomes available.

In anticipation of two FDA approvals later this year, we have kicked off our commercial readiness efforts and our enthusiasm to enter these markets is high.

Our commercial leadership infrastructure is in place and we are ready to engage key customers, group purchasing organizations, specialty pharmacies, and third-party payers to ensure we optimize the launch trajectory.

We are ready to launch both Eplopagrastim and Posiotnib upon their respective approvals with a fully integrated commercial infrastructure.

This includes sales, access and reimbursement, marketing, commercial operations, and medical affairs.

We will launch both products with one sales force and believe we have the resources needed to successfully achieve our goals.

We have been strategic in our approach with FTEs and have built a scalable infrastructure that is now in the process of expanding to support our commercialization efforts.

Moving to our operations, we have made a concerted effort to minimize our operating cash burn while optimizing our investments in our late-stage assets.

As you will see in the second quarter financials, we are holding ourselves accountable to reducing the cash burn of the organization.

While there will be an increase in SG&A expenses post-product approvals, you can expect to continue to see financial discipline as we become a lean, effective, and successful company.

In May, we announced the appointment of Ms. Nora Brennan as the new CFO of Spectrum.

This is Nora's first time on our call and she will be reviewing the financial highlights after Dr. LaBelle's prepared remarks.

In a short period of time, Nora's impact to the organization is already being felt. Her deep knowledge of the company, as the previous audit chair to the board of directors, and her familiarity with the team has allowed her to hit the ground running in her new role.

With that, I will now turn the call over to Dr. Labelle for a more detailed update on our critical development progress.

Good morning everyone. I'm glad to be with you on today's call and pleased to report on our latest achievements.

The posiotinin NDA is currently under active review of the FDA. This is a major step toward advancing treatment of non-small cell lung cancer patients with current II exgon20ana disease.

The filing is based on our positive data from Core 2 of the ZENOT 20 clinical trial.

The R&D team is actively supporting the FDA review, preparing for the ODAC meeting, and advancing the PMR.

These are major undertakings and we have strong internal and external teams that are fully engaged to bringing a successful outcome.

We intend to confirm

And that's obviously is a safe and effective treatment for a patient population with a clear, unmet medical need. Start with the clinic interface in montag???? on dry, Incorporated Ch pursue open and approved for a patient population with a clear, unmet medical need. you

We have generated extensive exposure response data that confirms our dosing at 16 milligrams per day as an effective starting dose.

The adverse event profile is familiar to lung cancer specialists who have extensive experience with TKI class sites.

Lung cancer patient arborene, R2-X1-20 insertion has limited treatment options and POSE would be a welcome addition to the treatment landscape.

Our randomized confirmatory study is underway. We have leveraged our team with the extensive experience of PPE, one of the largest international CROs.

to conduct the study in as many as 20 countries targeting up to 150 sites.

I just returned from the World Lung Cancer meeting where we had multiple interactions with highly interested international investigators.

We look forward to continuing our active engagement with investigators at the ESMO upcoming meeting.

Study 301 or Pinnacle is designed to enroll 268 patients with previously treated non-small cell lung cancer harboring HER2 exon 20 mutations.

Patients are being randomized two to one into this global multicenter study to receive 8 milligrams of BOSI administered DIB.

versus 75 milligrams per meter square of dusty taxol administered IV every three weeks.

The patient will be evaluated at week six and every six weeks thereafter.

Following progression on the spheal taxil, patient will be allowed to cross over to therial fibrillation, some activity should rotate intoMapLiu.io.

The primary endpoint is progression-free survival with OS, ORR, duration of response and disease control rate and safety as secondary objectives.

This design will provide a power of 95% to test the hypothesis.

that pose the superior to dusty taxol for either ratio of equal or smaller than 0.58 using two-sided log-rank test.

Separately, I would like to highlight that our plasmodium clinical program has now achieved two positive goals in first line and second line HER2-EXON 20 mutated lung cancer, a rare disease.

We now have the largest dataset for HER2 and SON20 insertion mutations and have well characterized safety profile of BOCES.

We will be presenting new data at ESMO 2022 being held in September in Paris.

The data shows a high level of activity for BOSI in patients with a G778 P780 duplication mutation, the second most prevalent mutation in R2-Exon20 non-small cell lung cancer.

More to come on this, so stay tuned.

As you can see, we continue to make solid progress on our two late-stage development programs and regulatory strategy.

We will keep you posted as we achieve additional key milestones.

I will now turn the call to Nora to review our financials for the board.

Thank you, Prince Law, and thank you, Tom, for your kind introduction. I'm truly excited to be a member of Spectrum's leadership team.

For the second quarter of 2022, total research and development expenses were $16 million, as compared to $29.1 million in the safe period of 2021.

A decrease of $13.1 million is primarily related to deprioritized programs, streamlined spend on both EPA and POSE, and a decrease in personnel expenses due to the strategic restructuring.

7 general administrative expenses for $9.4 million in the quarter.

Compared to 15 Diana, thank you in 2021.

The decrease of 5.6 million was primarily due to decrease employee compensation benefits and other headcount related expenses.

The net loss to the quarter was $29 million from continuing operations, or 17 cents per share, compared to a net loss of $49.9 million, or $32.6 million.

$0.32 per share in the comparable period in 2021.

I'm bringing cash from with this approximately $23.4 million Q2 as compared to $29.7 million in the same period last year.

The decrease was due to reduced overall expenses.

This is part of our ongoing strategic effort to reduce the overall cash burn of the company while optimizing our investments in the leads to DHS's.

We ended the second quarter with approximately $68 million in cash plus marketable securities, which extends the company's runway into 2023.

That concludes our prepared remarks and I'd like to open the call for questions. Operator.

As a reminder, to ask a question, you will need to press star 11 on your telephone.

Please stand by while we compile the Q&A roster.

Our first question comes from Maury Raycross with Jeffries. Your line is now open.

Hi, this is Kevin.

Hi, it's actually Kevin on for Maury. But yeah, congrats on the update today and thanks for taking our questions. So just with starting with Posey, you said the ad comm would focus on a number of topics including dosing, I guess just for the eight, eight milligram DID dosing, can you speak to the totality of data you've gathered there in cohort five? And are you proactively sharing that with the FDA and or have they requested it?

Yeah, thanks Kevin for the question. Francois, you want to handle that one? Sure. So as a reminder, we did file on the basis of E-Corps 2, which was 16 milligram 2D. Having said that though, we have shared all the data that we had essentially up through May of this year with the agency and have had a number of discussions.

as to the attributes of the BID dosing versus QD.

So I think the FDA has a full view of what we have. We have conducted also extensive modeling of exposure response which the FDA also has and that discussion continues. We suspect that we don't know for sure, but we expect that that topic will come up during ODAC and we're fully prepared to address any further questions.

Okay, thank you, Francois. And then just for the confirmatory Phase 3, can you just talk about what your latest thoughts are on what the Dositaxel arm might do? I know there are some other Phase 3s set to read out soon using this as a control arm in lung cancer. And then what sort of PFS difference with POSE would you consider to be a success in this trial?

So I'm not sure the first part of your question was what regarding the controller?

Just what the control arm might do in terms of PFS. What are your expectations based on recent or historical data?

Right, so the largest study randomized in the wild side, I think, talks about a PFS of the order of three months.

three to three point five months and we expect the PFS with our dosing to you know potentially nearly double that but obviously you have to do the study with fully randomized to see the results but that's the expectation.

Okay, great, thanks. And sorry, just last one on EFLA. Congrats on getting the reinspection done. Could you just say if there's any other gating factors that remain prior to the PDUFA date next month?

Yeah Kevin, obviously the last skating factor is FDA holds the final decision, but from our perspective, the inspection has been closed, all documentation has been provided, we've had subsequent and active discussions on labeling, and there are no outstanding issues from our standpoint that we know today and we're looking forward to the action date on September 9th.

Great. Thanks, Tom. I'll hop back in the queue. Thank you.

I'll hop back in the queue. Thank you. Appreciate it.

Please stand by for the next question.

The next question comes from Ed White with HC Wainwright. Your line is now open.

Hi, guys.

Hey Tom, good morning.

Good morning.

Just a couple of questions perhaps on the two potential launches that you have upcoming. You gave us a little comment on the Salesforce leadership going in. I just wanted to ask about how we should be thinking about the ramp up for SG&A expenses into the second half of the year as you build up the field Salesforce team.

on the two potential launches that you have upcoming. You gave us a little comment on the Salesforce leadership going in. I just wanted to ask about how we should be thinking about the ramp up for SG&A expenses into the second half of the year as you build up the field Salesforce team.

Well, maybe I'll just stop there and ask the next question later.

Yeah, so Ed, we're actually here in Boston and the commercial leadership team has spent their time deep in preparation and the enthusiasm was really, really excellent. And our expectation is day one, the commercial leadership team is in place. They're strategically located around the country. Their day one plan has been set. We've also begun the expansion of the frontline salespeople.

The plan there would be an incremental 25 FTEs, so taking the total commercial infrastructure to 40. That obviously won't happen overnight, but we've had time and have done a lot of extensive work in strategic geographies around the country to identify those folks. So as it relates to your question of SG&A and overall cash burn, I think the way I'd be thinking about this is if you look at our historical performance, I think it's in line with what we've...

And our mantra is going to be a disciplined and lean organization that enables us to achieve our goals. So I would look at this quarter and I would put some modest increases for SG&A during the launch period.

Okay, thanks, Tom. And then perhaps if you can just give us your thoughts on the GCSF market. I know it's been changing since you first filed for approval. So what are your thoughts on the market as we head into launch?

We're thrilled to enter this market. We still see it as a $2 billion market. We have no delusions of how competitive it will be, and we think we're uniquely qualified to do it both based on FTE know-how experience as well as we have a novel asset that we think will bring a unique proposition to the market. I think to your question, the most recent data actually increases our enthusiasm because

The share of the OnPro device, which is a bit different in its delivery mechanism, has come down over 20% over the last three quarters. I look at that as opportunities for the pre-filled syringe business, which we will have. I think having a unique product will enable us to compete with the innovator, with the OnPro, with the biosimilars, and we will go at this market assertively in each of the core segments.

We've taken the time to study the real drivers of the business in each of the key segments, as well as the key stakeholders. And after spending time with our commercial leadership team, I think I'm more confident than ever in their ability to execute.

Thanks, Tom. And now if I can move over to a couple of post-it questions.

If you get approval by the PDUFA date, you'll be launching into a holiday season.

How should we be thinking about...

2022.

Sales versus 2023, are you expecting a sort of slow ramp as you launch into the holiday season and then expect an uptick in the beginning of 23? Just how should we be thinking about that? And then the other question is just your thoughts on the European outlook for Posey, you know, what's the potential there?

in your strategy.

So let me take those one at a time. So the holiday outlook for launching, I think your question was with POSE, that's a small molecule so getting drug and channel is much faster than that of a biologic. We will be out in force but inevitably the time between Thanksgiving and Christmas is always probably the difficult time. And I think the ramp of a rare mutated lung cancer product there is.

a slower ramp with a therapeutic that's focused on a very niche population. So I would anticipate that ramp to be slower, especially during the down period of the holiday season. But we will be out in force in launching that product if it gets approved on the 24th. As it relates to EPLA, I think that one, assuming an approval or an action date that's positive on the 9th of September , then you would have this cycle time of...

call it five to eight weeks for drug to get in channel, we would be out day one with our team, working with key stakeholders, working with contracts and engaging key customers. But the actual launch of the product would be aimed in the October timeframe and that would be a bit more clear of a situation, depending on when the product becomes available to the channel.

I think your other question, Ed, is around Europe . So Europe for plosiatinib, just by way of reminder, we have rights, worldwide rights, less China and Korea for the asset. We've had initial discussions outside the US, specifically in Japan, given the prevalence of the mutation in that particular population. Our focus today is about ODAP PrEP.

and gaining the initial approval in the US as a primary strategy, but we do see a vehicle for areas outside the US that would become more of a business development opportunity. If you're asking about EMA specifically, I think that conversation post-approval would need to be had, assuming it's an accelerated approval in the US to see what the receptivity is there for Europe . And we largely think that it's an opportunity for licensing.

Our next question comes from Renee Benjamin with JMP Securities. Your line is now open.

Hey Tom and gang, thanks for answering the question.

And congrats on the completion of the FDA inspection.

I'd love to get maybe just some more color on that inspection. I know you mentioned that there were two observations there. They're now solved or they're no longer issues. Can you just give us a sense, have you gotten...

You know since you since you've already gotten into labeling discussions. It seems like that is the last step it seems like all the boxes have been checked and

I hate to say it in a formality, but my sense is that it almost seems like it's a foregone conclusion that an approval is coming. Is there anything that's remaining with the review outside of continued labeling discussions? And did you get feedback that the inspection is 100% done? Like that said, all the issues have been resolved. Possibly not, but on the other hand, it was multiple contacts Jonathan called by theMB attorney. We're Pre-helmet in the Badkoff office. So it may have been World's Fair in the ARRI age group up at G to find out more. I'm not the only one that has mentioned it to the press because I came from the heart of Sami and how do you see theplayed out community. No one loved our neighbors our way. During the Image New Year, our model used for the localtor was Coaddko.

Yeah, so let me address these one at a time. So I'm much more conservative. I don't think anything's a formality, although I appreciate your confidence. I think ultimately the ninth is the key date, but as it relates to the inspection, there were two observations that were addressed with the inspector on site. The examples of those observations, there was one of a temperature mapping that needed to be done and one of the other ones that were addressed with the inspector. So I think ultimately the ninth is the key date, but as it relates to the inspection,

FDA always has the right to come back and ask questions should they want. I don't think there's going to be something that says absolutely final until you gain the approval. The labeling discussions, from our perspective, we believe have been both comprehensive, but the agency can come back and have discussions if they'd like. So we're obviously optimistic, but I call it cautiously optimistic. And up until the point I see that approval in hand.

Got it. All right. Thanks for that caller. And then just kind of building on Ed's question, we're running in a kind of a current market dynamics.

you know, your problem.

about a month away, you're going to hit the ground running pretty much on day one. Can you just review for us kind of what does this current $2 billion market look like and where do you initially start to gain market share? And then ultimately, let's just say a year or three years from now, where do you continue to gain market share?,

a month away, you're going to hit the ground running pretty much on day one. Can you just review for us kind of what does this current $2 billion market look like? And where do you initially start to gain market share? And then ultimately, let's just say a year or three years from now, where do you continue to gain market share? And you could I just again think that quite the

you know, internally, how are you viewing like your peak opportunity?

Yeah, so let me try, let me see if I can offer some assistance and you tell me if you need more. So the way we think about this is there's about 1.1 million units of long-acting GCSF that is administered in the United States every year.

We break that out into three specific classes of trade. There's clinics, there's non-340B and 340B hospitals. So we've spent a lot of time, both intro experience and customer know-how from the leadership team that we've got, but equally as important spending time qualitatively and quantitatively to really understand what drives the decision. Because anytime you enter a competitive market and a lot of timeizcal24 does come in backwards, you'll end up with my forest- nominee job for a start. And that's all I had for dad. So I'm gonna get continually excited with how we move forward on these photos and also go make sure that we support them because we have. We can help our customers share our website and and, yeah, thanks myself. I'll give you my chance to reach out and do some compete all we can

things are relatively equal on the surface, you ask yourself what ultimately drives the decision. And as it turns out, there are differences of what ultimately drive decisions in each of those classes of trade. So we've spent time to understand where our product offering in totality, it resonates with the decision drivers of each of those classes of trade, and that's going to ultimately garner the beginnings of our strategy. So as it relates to share and how we calculate peak, we have.

specific doors that we're going to walk in, the specific customers that ultimately drive those decisions and how we intend to engage them. And I think the team has put together a pretty comprehensive plan that we look forward to competing with. Paul Alexander holding up All Its Mission

I hope that's helpful. I know I didn't answer your question on peak share and peak sales, but hopefully that gives you some insight.

No, no, it definitely does. Just maybe some housekeeping ones. Can you just remind us what's the patent expiration for APLA? How are you thinking about pricing? And how should weaving about any sort of gross to net sort of adjustments?

So the patent for EFLA goes well into the 30s. So that's, I think it's north of 35 is where that goes. And there's some extensions that are available to us. So the way we think about this is there is the initial approval phase that we will launch the product. And I think the pricing dynamics in the market, I think that's public. We have not made public our

strategy will do that upon approval if we're so fortunate. But as we think about the trajectory and lifecycle of the asset, we are going to develop and try to find ultimately the clinical answer around same-day dosing because we do see, you know, we saw the initial signal in a relatively small number of patients. We intend to expand that cohort and see if that signal remains. And we think that could be a long-term differentiating attribute of the asset.

And another one, just a clarifying point, again, off of Ed's question regarding ex-US kind of opportunity and, of course, the funding of the company going forward. Can you kind of give us an update as to how or if BD discussions are ongoing and how you're thinking about monetizing?

the opportunity for both Aslaw and or Posey in regions where you're not interested in and don't have the bandwidth for.

Yeah, so business development is, you know, that's in our fabric, so it's always a topic in our company, and I think there's a number of areas where those conversations are active and ongoing today. But as it relates to licensing of non-U.S. territories, I think the answer is different depending on the asset. So Ed had asked a question earlier about posi-hot-lib, and I think there is, you know, with an assumption of an approval, which I think is got our

as we look at the ex-US dynamic as it relates to growth factor, it's a very different world in terms of how those products are brought to market, how they're reimbursed. It's just an entirely different business and we don't believe that that business is in our interest to bring forward. So our business development efforts for non-US territories with these assets will be focused on posiotinib.

Excellent. Thank you very much for the caller and obviously good luck going forward.

Excellent. Thank you very much for the caller and obviously good luck going forward. Always appreciate it, man.

Please stand by for your next question.

The next question is from William Wood with VRS. Your line is now open.

Hi, this is when we're done from my time at the rally securities.

Appreciate you taking our questions and congratulations on the very nice progression that you've had this quarter. We're just curious.

Specifically on how you're preparing for the ODAC meeting and maybe what might be the key topics that you're expecting the FDA to bring up given that they're given their cautious commentary on granting accelerated approvals, and then maybe also how much you think split data dose data gets reviewed by the committee members. Okay, thank you very much.

Yeah, so I think we appreciate your question. I think we're spending a good bit of time on preparation because I think it's warranted. I think we are aware of the kind of macro environment of FDA comments on accelerated approvals, but we believe that Cloziatinib has addressed a real unmet medical need. I think it's got a well-characterized profile as it relates to safety. It's been demonstrated.

and its effectiveness and today we have the largest database in the world of this particular mutated cancer. So we look forward to representing that. But we are looking at the macro environment here, so your point is well taken and we are preparing as such. And the team is spending a great deal of time to make sure that this gets the attention that it deserves.

Thank you, that was very helpful. And then additionally, you mentioned that you're going to have additional, you've got your abstract coming at ESMO. Just curious if we could get a little extra color on what we might be expecting and then how that might be incorporated into the approval process, if at all.

I'll let Francois comment on the ESMO data, but I think the approval process, I don't know that that data has anything to do with it. This is about cohort two in this population, so our NDA has been filed, is under review, which will be the topic of the NDA. I think this data that Francois will speak about here will be interesting, but as it relates to approval process.

it's not part of that topic although it's in the data set. That's why you have a problem? Yeah sure so that's correct the S mode data shows high activity against a second most common mutation in the exon 20.

So that's of interest when you have high activity, but that is not in itself, as Thomas just said, it's not subject to the discussion for the NDA. I mean, that data is in the NDA, but there was a lot of investigators who were interested in understanding the activity, supposedly against various mutations, and that's what we're going to be showcasing at ESMO on one particular common mutation.

As to, I think you've asked a little bit about, a little more about the ODAC and what we are expecting. We don't know for sure what the FDA will add as a specific question or what the ODAC members will ask us. But obviously we are preparing for, you know, a high number of different questions. We can suspect that.

the treatment landscape as it is evolving. And we think we're in a good position and patient, let's face it, need options. And we certainly believe that POSE would present a very attractive option for patients.

Thank you very much. I think I'll leave it there. I appreciate your answering our questions and congratulations again

Thanks, William.

Please stand by for the next question.

Our next question comes from Pekar Agarwal with Cantor Fitzgerald. Your line is now open.

Hi good morning Tom and team congrats on the quarter and congrats Laura.

So first question is on Rolandis. So it seems that the manufacturing issues have been resolved. I have a follow up on commercialization here.

Pricing in GCSF market is more or less in a freefall right now with net pricing declining 30% plus year on year.

and will probably continue to decline for the foreseeable future based on commentary from other players in this market. So maybe what's your strategy on pricing and how it may evolve in this market? Is there a scenario where you can keep pricing stable? And then I had a follow-up on POCEO. Thank you. Thank you.

Hey, Picard. Nice to chat with you. We have not given our final price, but the comment that I would make on this particular issue is today's dynamic is a situation where there's one innovator product and all biosimilars that have gone through the 351k pathway.

So inevitably their reimbursement and the dynamics that they are trying to compete with is subject to the behavior of each other. We will be bringing the first novel asset to the market in over 20 years and that will offer some distinct advantages and opportunities to have an offering that provides a bit more stability and predictability and we think that is advantageous to the end user.

and we will operate that way. So we are tracking that very closely, but we see the behavior within the market as an opportunity because we don't need to enter as one of the players that ultimately is competing with each other, whose reimbursement is inevitably tied to one another.

we will operate that way. So we are tracking that very closely, but we see the behavior within the market as an opportunity because we don't need to enter as one of the players that ultimately is competing with each other whose reimbursement is inevitably tied to one another. Hope that makes sense.

No, that's really helpful, John . And a follow-up on POSE. So, maybe on the confirmatory phase 3, how many sites are active right now? What percentage of your target patients have been enrolled in phase 3? And where do you need to be on enrollment to satisfy FDA's focus on substantial enrollment by PDP-8? Thank you.

Sure, so we're very active in opening sites, but as I'm sure you know, it takes a long time to open sites. We have some sites open. I'm not going to give you numbers today. I'm not going to speak directly to enrollment today. So we're moving as fast as we can internationally, as well as in North America.

So I can't remember. The second part of your question was what? Where do you need to be on enrollment to satisfy on FDA's?

I can't remember. The second part of your question was what? Where do you need to be on enrollment to satisfy FDA's substantial enrollment?

Right. So we have discussed directly with the agency if there was a particular threshold that we had to achieve by PDUFA date. And the information we got from the agency is that this would be a multifactorial judgment, that there's not a single number that one has to achieve, and that we believe that on the basis of that...

is that we have to demonstrate a true active program here that, you know, as you know, over the years, the last few years, a number of companies maybe were not quite as serious as they probably had to be, and we believe that we will be able to show unequivocally that we are taking this commitment very seriously and are moving forward as fast as we can.

Thank you, Francois.

Any updates on plants for moving into earlier lines, first line setting? Have you had any discussions with the regulators on what might be required?

Thanks for the question. We have a lot of aspiration for the asset of what it could potentially be beyond the initial indication. We are really taking a disciplined approach here to focus on gaining the initial approval. We see the unmet need and patient's need and physician's need therapeutic options for this particular population. Right now, the focus of the company is to make sure we are optimally prepared for our own acne.

Thanks for taking my questions and looking forward to the next update.

Appreciate it.

At this time, I am showing there are no more questions. I would now like to turn the conference back to Tom Riga for closing remarks.

Thank you everybody for your active participation and all your questions on today's call and for your interest in Spectrum. If you have additional questions, as always, feel free to contact us anytime. Have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

The conference will begin shortly. To raise your hand during Q&A, you can dial star 11. The conference will begin shortly. To raise your hand during Q&A, you can dial star 11.