Q3 2022 Seagen Inc Earnings Call
Good day and welcome to the <unk> third quarter 2020 financial results Conference call.
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After todays presentation, there will be an opportunity to ask questions.
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Please note today's event is being recorded.
I would now like to turn the conference over to Douglas <unk> Vice.
President of Investor Relations. Please go ahead.
Thank you operator, and good afternoon. After a while I'm pleased to welcome you to see John third quarter 2022 financial results Conference call.
This afternoon, we issued a press release with our results the press release and supporting slides are available on our website in the investors section events and presentations page.
Speakers on today's call will be brought to the Tennessee interim Chief Executive Officer, and Chief Medical Officer, Todd Simpson, Chief Financial Officer, and Chip Romp Executive Vice President commercial U S.
Following our prepared remarks, we'll open the lines for questions. We aim to keep this call to one hour and ask that you limit yourself to one question to give everyone an opportunity to participate in the 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 financial outlook.
Dissipates in product sales revenues costs and expenses.
Clinical and regulatory milestones, including data Readouts and regulatory submissions potential marketing approvals and commercial performance.
Actual results or developments may differ materially from those projected or implied in these forward looking statements.
Factors that may cause such a difference, including the difficulty in forecasting sales revenues costs and expenses impacts related to the COVID-19, pandemic and the uncertainty associated with the pharmaceutical development and regulatory approval process.
Information about the risks and uncertainty faced by sea. Gen is contained under the caption risk factors included in the company's quarterly report on Form 10-Q for the quarter ended June 30th 2022 filed with the Securities and Exchange Commission and the company's subsequent reports.
With the FCC now I'll turn the call over to Roger.
Thank you Doug.
Good afternoon, everyone and welcome to our third quarter call.
This was a quarter, where we delivered strong financial results with total quarterly revenue of $510 million representing growth of 20% compared to the same quarter last year, and reflecting robust sales across our portfolio. We also made substantial progress on multiple fronts include.
<unk> clinical regulatory research and corporate developments.
We presented pivotal data for pets to Kaiser and we submitted the supplemental regulatory applications to the FDA for pets.
<unk> and the Texas, we opened a new ILD and our early stage pipeline with a product candidate that targets immune cells in the tumor microenvironment.
We extended the geographic footprint for Tuesday, with a new commercialization partnership in China and other parts of Asia.
Turning to our overall strategy, we are an ADC company at a cool as.
Traded by three of our four commercial products and five of our last six Ids and moving forward, we will remain laser focused in this area.
The list as was because a we continue to acquire complementary assets that target tumors through mechanisms different from adcs in that vein. We recently licensed in innovative bio specific technology from lava, which addresses a target not readily amenable to an ADC construct and fits in well with our overall focus.
I'm talking to drug development.
Beginning today with pets is a first in class ADC for metastatic <unk> cancer.
Together with Astellas and Merck, we presented data from cohort K of the EV 103 trial at the ESMO meeting in September .
As a reminder, this is a study primarily evaluating pets is in combination with keytruda in frontline cisplatin ineligible patients with unresectable locally advanced or metastatic uveal cancer. This combination demonstrated a confirmed overall response rates put independent radiographic review.
<unk> of 64, 5% with a median duration of response not reached the combination had a manageable and tolerable safety profile. The pets at monotherapy arm showed a confirmed overall response rate of 45, 2% with a median duration of response of 13.2 months demonstrating.
Its contribution to the combination.
Frontline patients who are not eligible to receive cisplatin have a high unmet medical need and we are encouraged by these data we have submitted a supplemental BLA to the FDA to support a potential accelerated approval in the United States in mid 2023.
Further developmental peds it continues including EV 302, global Phase III trial in combination with Keytruda in a broader population of patients regardless of cisplatin eligibility, we expect enrollment to teach before year end and our intention is to use EV 302 as a concern.
Merci study in the United States and to support submissions around the world.
Beyond the frontline metastatic setting additional studies evaluating pets is in muscle invasive and non muscle invasive bladder cancer, Oh I'm going to.
Together with Astellas. We are also considering pad saves potential in other Nixon for expressing solid tumors and look forward to sharing data next year.
Moving to Takeda, we recently filed a supplemental NDA for patients with previously treated her two positive metastatic colorectal cancer.
The combination of to Kaiser and Trastuzumab resulted in a confirmed overall response rate of 38% with a median duration of response of 12.4 months based upon the strength of these data we have been granted breakthrough therapy designation as well as priority review by the S. P. A with a <unk> action date of January 19.
In 2023 as a reminder, our phase III trial has been initiated in front line. Her two positive metastatic colorectal cancer with the goal of serving as a confirmatory trial in the United States and supporting global submissions.
We continue to explore to cause a further in breast cancer without park them. This includes so to climb to a phase III study of <unk> in combination with kit silo, which completed enrollment in June we anticipate reporting topline data in the first or second quarter of next year. Despite the evolving treaty.
[noise] landscape kept silo remains an important treatment option for patients with her two positive metastatic breast cancer.
If successful the combination of <unk> plus catch sorry that has the potential to strengthen to cause its position in the second line setting, particularly in patients with brain metastases and could provide an alternative important option in the third line setting for those patients who would otherwise have received kept side the mono therapy.
Next to highlight our three key updates with citrus, which is the foundation of care in C. D 30, especially lymphomas and is being commercialized outside of the United States and Canada by I'll talk with Takeda first data from the pediatric trial has been filed with FDA with a target action date of November 16 2000.
Maybe to ADCETRIS plus chemotherapy demonstrated superior event free survival in the treatment of pediatric patients with previously untreated high risk classical Hodgkin lymphoma, when compared to a chemotherapy regimen that included real Muslim second these statistically significant and clinically meaningful improvement in the <unk>.
Overall survival demonstrated in echelon one for its interest in combination with a b D and patients with advanced Hodgkin lymphoma was recently published in the New England Journal of Medicine, We have submitted these data to the FDA for possible inclusion in the label.
Last and important to note the M. P. C. M guidelines have not been updated based on the overall survival data to designate a plus a V D. As a preferred treatment option for adult stage three for Hudson lymphoma patients.
Now transitioning to two deck I'll fourth approved product and first in class tissue factor directed ADC, which we co develop and co commercialize with our partner Genmab.
We recently announced a regional strategic collaboration and license agreement with <unk> that gives them exclusive rights to develop and commercialize two deck in mainland China, Hong Kong, Macau, and Taiwan, we partner with a lab given their expertise and a track record of developing and commercializing innovative medicines.
The collaboration will support regional patient enrollment for innovative 301 phase III study of <unk> in patients with recurrent or metastatic cervical cancer. This global study is enrolling well and is intended to serve as a confirmatory trial in the United States and to enable global regulatory applications.
<unk> in Asia Adil.
Additional clinical development to tip that continues in frontline cervical cancer and other solid tumors, including hidden Nick cancer, We look forward to data readouts in the coming year, which will inform our next steps in these two Kansas.
The symptom epidote on D. V is a late stage novel her two directed ADC that utilizes the abdomen based technology.
Our clinical development program is evaluating monotherapy and combination approaches in a variety of cancers. We recently began enrolling patients into the pivotal phase two monotherapy trial in second line her two expressing metastatic youre feeling okay. So we plan to initiate an additional pivotal study in bladder cancer over the next.
Several months.
We'll continue to explore development in other her two expressing solid tumors.
Turning to our earlier stage pipeline, we are advancing multiple drug candidates in phase one clinical trials in a range of solid tumors and hematologic malignancies next month at the annual Society for immunotherapy of Cancer Conference. We look forward to disclosing initial phase one data for ESG and be six a M.
But joking ADC targeting Integrant beta six this is an antigen, which is highly expressed in a variety of solid tumors, including non small cell lung head and neck and esophageal cancer.
In addition, we will be presenting preclinical data on S. G. M. D. B two to eight a novel bi specific molecule, which provides a potent co stimulatory bridge between tumor specific T cells and C. D to T. H expressing tumor cells, we look forward to initiating a phase one trial for S. G. M D B two to age and the cut.
Months.
In September we announced an exclusive worldwide license to develop and commercialize novel one two to three a bi specific T cell engagement targeting gamma Delta T cells in the presence of Egfr expressing solid tumors. We find the science is compelling and look forward to advancing law, but one two to three into the clinic.
In the near term.
Next I will turn the call over to Todd who will discuss our financial results and provide updated guidance and Chuck will provide an update to the commercial performance before we turn to Q&A Todd.
Thank you Roger and thanks to everyone for joining us on the call are financial results continued to reflect significant advancements made across the business today I'll briefly summarize our financial results and then discuss several updates to our outlook for the full year.
To begin all components of revenue showed increases in the quarter and for the year to date over 2021. This reflects strong commercial execution across our approved products continued performance by our partners as well as new collaborations.
With that total revenues were $510 million in the third quarter of 2022 and $1 $4 billion for the year to date.
Representing a year over year growth of 20% and 25% respectively.
Net product sales increased to $428 million in the third quarter of 2022 and $1.2 billion for the year to date, representing year over year growth of 17% and 22% respectively.
Royalty revenues were $44 million in the third quarter of 2022 and $111 million for the year to date royalty.
Royalty revenues for the third quarter increased by 7% over the prior year driven by strong commercial performance by our partners, most notably Takeda with its sales of et cetera is partially offset by foreign currency headwinds associated with the strong U S. Dollar.
Collaboration revenues were $38 million in the third quarter of 2022 and $80 million for the year to date.
These reflect royalties on sales of pads of by Astellas in its territory as well as other collaboration activities, including an upfront license fee of $30 million from our new deal with Viola I'm signed in the quarter.
Cost of sales were $108 million in the third quarter of 2022 and $302 million for the year to date.
This included cost of product sales and royalties for each of our four brands profit share amounts owed to our collaboration partners Astellas and Genmab as well as noncash amortization of acquired technology costs for Takeda.
R&D expenses were $385 million in the third quarter of 2022 and $987 million for the year to date.
These reflect continued investment to expand the potential of our approved products and to advance our product pipeline.
Third quarter results also reflected a $50 million upfront fee to lava therapeutics.
SG&A expenses were $210 million in the third quarter of 2022 and $605 million for the year to date.
This was driven by ongoing commercialization efforts legal costs related to Daiichi sankyo and other corporate activities regarding our financial outlook for the full year, we are increasing our guidance for et cetera sales to a range of $805 million to $820 million, we are narrowing our guidance for pads.
<unk> to a range of $435 million to $445 million and we are increasing our guidance for two kinds of sales to a range of $340 million to $350 million.
Chip will provide further context on market dynamics related to each of our brands in a moment.
We are adjusting our guidance for royalty revenues to a range of $155 million to $160 million, reflecting foreign currency headwinds and we are increasing our collaboration revenue guidance to a range of $85 million to $90 million.
Moving to expenses, we are increasing our R&D expense guidance to a range of one $3 billion to $135 billion, primarily related to the upfront fee under the lava deal in Q3, and we are tightening our SG&A expense guidance to a range of $800 million to $850 million.
Our other guidance remains unchanged.
Looking forward, we plan to provide 2023 financial guidance on our next quarterly call as we exit 2022, we have four transformative drugs that are well established within their current indications.
We have a number of ongoing trials several with Registrational intent that are intended to support label expansions for each of our approved brands. We also have two pending FDA regulatory submissions intended to support new indications during 2023 the.
The most significant of these is cohort K for peds. However, this will not be included in our initial guidance due to the anticipated time of a potential legal approval. These.
These factors will be taken into consideration in our initial 2023 guide with that I'll turn the call over to chip for an overview of our commercial performance.
Yeah.
Thank you Todd performance across the portfolio. This quarter was strong and reflects continued commercial execution for our best in class or first in class product portfolio Pats.
<unk> third quarter sales were $105 million, an 11% increase over the third quarter of 2021, there were no clinical trial supply orders in the third quarter of this year compared to $7 million in the same quarter a year ago.
Excluding clinical trial supply orders year over year growth for the quarter was 20% underlying growth was primarily driven by continued use of checkpoint inhibitors as frontline maintenance therapy. He dynamic that has helped <unk> become a U S standard of care in the second line setting post platinum post CPI.
Checkpoint inhibitors have been used in the maintenance setting for over two years and uptake has flattened which is limiting Pat says near term growth in its current indications.
Meanwhile, we're looking forward to a potential label in the frontline setting in the U S. And we are encouraged by the positive reaction to the EV 103 cohort K results presented at ESMO in September .
Our commercial teams are preparing for a potential launch in mid 2023. As a reminder, there are approximately 20000 total addressable patients in the frontline metastatic setting in the U S with around 80% of these.
Being drug treated 40% to 50% of the east are ineligible for cisplatin based chemotherapy if approved the patch a regimen will represent an important treatment option for these patients.
Moving onto the queso third quarter sales were $88 million to queso performed well in the quarter, despite competitive headwinds related to in her two's recent approvals.
And increased use in the second line plus setting which is expected to continue into 2023 to.
<unk> performance is benefiting from extended treatment duration and approximately a third of patients, which we believe underscores its efficacy and tolerability.
We have established the cases market position as a valuable treatment option for patients in the second line plus setting, especially for those with CNS involvement.
Our commercial teams are ready for a potential launch into the second line plus setting in patients with her two positive metastatic colorectal cancer.
Although a modestly sized market the population represents a high unmet need as existing approved colorectal cancer therapies typically offer limited response rates.
Looking beyond the U S. In the third quarter, we successfully concluded the case of pricing negotiations in Germany, and Canada, adding.
Adding to our success in the U K and we look forward to potentially further expanding access across the rest of Europe in the coming months Merck.
Merck is progressing regulatory resubmission and reimbursement activities intended to expand the cases reach in their territories.
And have recently received approval in Israel and Argentina.
Et cetera third quarter sales were a record $219 million, an 18% increase over the third quarter of 2021 growth was driven by a return towards pre COVID-19 diagnosis rates as well as price and incremental share gains in frontline Hodgkin lymphoma.
Lateral which has benefited from the unprecedented overall survival data from the echelon, one trial announced earlier this year.
We are pleased to see the strength of the OS data, resulting in elevated category, one preferred recommendation and the NCC and guidelines and we're working to ensure broad awareness of this positive update.
And finally, <unk> sales were $16 million for the third quarter, the CGM and Genmab commercial teams are focused on ensuring early treatment experiences with Tim Dec are positive with best practices being shared between clinics. We continue to promote this important treatment option for patients with such high unmet need.
With that I'll pass the call back to Roger.
Thank you chip.
As discussed today, we continue to make solid progress across the business looking forward, we plan to provide multiple data readouts in the coming year, which would cause a pad says it citrus Tim Dec and pipeline candidates such as SDN be six a M. S. G M D seven eight.
For D C.
<unk> is in a position of strength to continue advancing our mission of delivering cutting edge innovation that positively impacts the lives of people with cancer.
Now we 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.
They're using a speaker phone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Today's first question comes from Michael Schmidt Guggenheim. Please go ahead.
Guys. Thanks for taking my questions and congrats on the quarter.
Had a question around to Cai is that market dynamics are that drag. Obviously you have performed better than initially anticipated can you comment a bit more on how you think about the competitive dynamics.
With in her two in breast cancer longer term and how we should think about the incremental growth opportunities should hard to time to exceed next year.
Hey, Michael it's Roger here. Thanks, So thanks for the congrats on the quarter.
And it's an important question and perhaps I could ask chip to make some comments on the commercial dynamics.
Sure Roger as we've discussed in previous calls and her two has gained market share in the second line setting for her two positive metastatic breast cancer patients.
This has impacted the patient flow into the third line and later lines of therapy. We continue to anticipate the shift is going to grow.
And her too will be sequenced in in the second line in front of the queso with increased use in the second line.
Based on their label on approval. This is going to result, again until delayed patient flow into the third line.
It has established itself as an important option for treatment in the second line setting with patients with brain Mets.
We expect to continue to hold there and have a foothold as it's been valued by physicians.
Just to add some more comments on that ship.
You know from a from a.
Our initial evaluation of what the impacts have been Hershey could have on <unk> and sort of timing of when that impact would occur what space you know in the in the earlier part of the year on an expectation that unless you would move quite quickly and that did not actually happen. It took some time for it to gain momentum, but that competitors have had.
And that describes I think we believe will exist.
Into 2023, and it may be through to the sort of second half of 'twenty three when we see things start to stabilize.
And then what about her to climb to you you said, we could see data in the first half of next year, how impactful would that potential Nab extension b.
If successful.
Yeah. That's it that's a great question. Thank you, perhaps I'll make some comments and then chip again, if you could if you could complete on the commercial color. Yeah. We're excited by the combination of <unk> with Keds silo kits.
<unk> is an important drug.
It has a place for.
She used in her two metastatic breast cancer and as you know patients cycle through therapies Fortunately they live.
No.
Good long time and have the opportunity to switch therapies.
Just to remind you of her to climb two has the same design elements of searching climb.
So it includes a population.
Clearly the population of brain metastases and includes in that population of patients who will have active brain metastases and so that is an important component of that trial.
So from a from a you know if the trial is successful and the profile of the combination is as compelling a bus.
But from a general perspective and also in that same mid population, we see you know to.
<unk>, increasing its use in that combination with kids either chip do you want to add some comments, yes, I think I think there may be two meaningful outcomes from a commercial standpoint.
The first is I think we can potentially expect to see increased utilization in patients in the third line, regardless of brain metastasis and the second piece of that is it really puts us in a partnership position rather than a competitive position with cat silo.
Okay.
Yeah.
Okay. Thank you.
Thank you and our next question today comes from Andrew Burns and SBB Securities. Please go ahead.
Hi, Thanks for taking my questions and congrats on the progress guys.
Couple I was wondering if you could give some color on the pads have duration of treatment that was cohort K I know you reported the treatment duration.
For the cocktail, but it's my understanding that patients could have dropped off of one of your agents can still be considered on treatment and then.
What are your thoughts on the possibility that the FDA may want to see the randomized data.
For pad seven keytruda to better understand how a cocktail should we use them.
Ineligible patients that have the option to get Carboplatin plus maintenance checkpoint inhibitor.
Yeah, Andy Thanks, Thanks for the question.
With regard to duration of therapy.
The only disclose the at what at what point is treatment discontinued for one or other components of the combination and that sits at an average of around about 10 cycles of therapy. I think it was nine cycles of therapy with cohort, a which has the same potential population and then 10 cycles of therapy with cohort K and that's it.
Median duration, we have not gotten into the details of how much of which particular drug is being used I will just remind you that for this combination as well as for the individual drugs. The major driver for discontinuation as progressive disease and progressive disease generally you know triggers both drugs to be stopped and that.
In the main drugs like pets.
If you do not have a major sort of adverse event burden that necessarily stops it stops they use the most common one being peripheral neuropathy and that's generally generally in this low single digit range.
With regard to what the what.
What the agency.
You May view, we think we have a strong package, there's a high unmet need in patients who are cisplatin eligible.
The data that we've presented based on the regulatory framework, which is overall response rates and duration of response is substantially better than what you can expect with the Carboplatin based regimen.
From a.
Evidentiary perspective, we've run that we've you know we've done this.
Jeremy twice with Coke and Coke K.
Those results have been remarkably close to each other so we're confident that this combination will reproduce the.
Results in the types of results.
That we've seen with cohort K.
In summary from the point of view of the agency, we can't speak on their behalf in the end it isn't F D a call as to whether they see this as being appropriate to take.
A regulatory action action, but I can say you know we are confident in our position and it's important to note.
Sort of partially in relation to your question.
Because confirmatory trials are part of the conversation right now that we are in a very favorable position. So EV 302, which is obviously a much larger trial, which has populations that include both cisplatin ineligible and cisplatin eligible.
With a sample size and the 900 range in.
And including endpoints, such as PFS and OS as the dual primary endpoints, but other endpoints such as or Oh also included.
Enrollment is expected to finish this year. It is an event driven trial and so obviously you know.
We will turn our focus from completing enrollment to starting to map out when these events will occur but it's important to note that that concerns you trial. As you know is very very well advanced and I think that's an important.
An important part of our arguments around.
Looking for accelerated approval based on a single arm study, which is a coke okay.
Okay. Thanks, Roger just if I could squeeze a quick one in on D V.
I didn't hear you mention breast cancer in that with that molecule might I might have missed it but is it still a priority for this drug and do you think it could have a meaningful by phone or in fact, I can't hurt too.
Oh, it absolutely is a privacy.
And so focusing we are very interested in her to hurt your lung breast cancer population, we have not disclosed any details, but I think you know from an internal workings perspective, we are looking hard at that as a possible opportunity and as you know one of the well.
One of the important features of adult and payload and we strongly believe this and cohort K actually supports this argument is that combining <unk> together with a PD. One inhibitor does have an added advantage over the combination of two active agents and so you know utilizing.
Or leveraging that potential value in the combination strategy is something that we're thinking about not only for breast cancer more broadly obviously another tumors, but it may it may be relevant in that space as well and obviously from our perspective.
Generation data is an important first step in understanding what our opportunities are but I think just stay tuned we're focused on breast cancer, we just have not.
Both the specifics Fuji.
Okay. Thanks, a lot and congrats on the progress.
Thanks, Tony.
Thank you and our next question will come from Celgene <unk> Richter with Goldman Sachs. Please go ahead.
Hi, Thanks for taking a question. This is Tommy on for Sullivan can you provide an update on the CEO search and provide a framework that you're using in finding someone thank you.
Sure. Thanks for the question.
Yes, I can I'm I'm happy to report that the board is making good progress.
Obviously the characteristics of the company you know we are a multi drug global oncology company. So anyone who comes in to lead the company will need the skill sets to do that we.
We have confidence that the board will.
We will identify and name.
A strong a strong new C O M. I don't have a timeframe for you obviously, it's an important deliverable and it is something that the board is actively pursuing but again timing is something that I can't share what I can say, though is the focus of the management team myself.
Included during this interim period is to move the ball forward and we think we're comfortable that we've been successful at doing that I think as evidenced by the progress that we've shown over the last two quarters.
Thank you.
And our next question today comes from Matthew Harrison.
Morgan Stanley . Please go ahead.
Hi, Thanks for taking our question. So this is not hung for Matthew So I just wanted to confirm maybe some base. So I think early I'll call you mentioned that you might present.
Some of the readout on the basket, our basket studies for both Pakistan and passive.
So I'm just wondering what kind of just wanted to first confirm that dose youre going to present some data for both Pac he saw in the past they've found those basket studies and also I'm wondering whether you can provide more color on any particular indications you are most interested in for those two drugs.
Thanks for the question, so just a minor correction.
The basket trial data, we're talking about is with pets up you are right and there are multiple tumors that are left in pork spacing and we haven't shared the data that we have some topline data available and as I indicated in the prepared remarks, we will present that data in 'twenty three.
The other basket trial I think we're talking about are a focus of our another molecule not so much to cause it's actually Tuesday, and hopefully that's that's what you were thinking and for Tiff deck.
As you know as with many of these adcs.
Multiple possible shots on goal from a shipment perspective.
We obviously are excited with the cervical cancer opportunity, we're looking potentially to take Tim Dec into frontline cervical cancer, we presented our logic and our thinking behind that and we're still building the blocks for the regimen.
I understand whether we have something competitive that would include chip deck in it.
And then the other children, which is coming into focus is hitting that cancer. We have presented some data initially and we plan to share some more data with hidden Nick cancer patients.
Without partners Genmab sometime in 'twenty, three I can't be more specific than that but that's the plan.
Thank you.
Thank you and our next question comes from Jessica Fye with JP Morgan. Please go ahead.
Yeah.
Alright. Thank you all for Jeff. Thank you for taking our question, though we have a couple on pet death in a couple of them to Costar property.
On past stuff.
Regarding the first one the inevitable setting just wanted to confirm do you expect priority review with the filing that you submitted and then do you expect any off label use in the eligible population followed in the past.
But potential authority approval in the first line.
Claudia ineligible probably next year for example.
Physicians are paying to label the patients the eligible patients.
Ineligible in order to get them access to pass that.
And then on the other hand the.
Question on <unk>, So just wondering.
Kind of your latest thinking on the evolution of the treatment landscape.
Her to penetrate in two in the early on earlier lines of therapy. So.
Do you believe queso with probably most be youth after inherent too.
Now and in the future and if so what's the timeframe that we should think about like in her to penetrate into the second line and how long would pay for the patient to sequence through in her two and probably become more eligible and the lack of better word too.
Two to Kaiser and lastly is there any insight you could share with us regarding the proportion of patients with or without brain Mets or in another words do you have a split between patients with brain met and patients without brain met.
But you have a pretty easy.
It would be two cases, so far thank you very much.
Thank you. Thank you for the many questions I hope, we can we can get to answer them and to the mall and I apologize. If we missed you can you can remind us so with regard to the.
It's sort of details around our regulatory approach.
Pet save and and Keytruda in frontline.
Cisplatin eligible population I think we've shared we have submitted an application.
We don't share details exactly you know what a request to the agency, but but just in general it is relatively.
Correct to say that.
Accelerating approvals often reviewed under priority review schedule that is just as likely statement safe into effect.
With regard to off label use perhaps chip would you like to comment a little bit on natural pet safe and then we'll move on to Chicago.
Yeah.
What I'd say is that physicians can choose to prescribe the product.
The ways that they see best fit.
We don't actively promote to anything that is not in our label.
Now moving forward. We are we are looking forward to the potential of having.
An additional label on pads and the teams are ready for when that happens.
Right and then with regard to <unk> you did have quite a few questions in there I think maybe what we can do is just sort of reposition.
Cause if it for you in general.
To remind you we have in the pivotal trial hill to climb outstanding results.
In the population and heretofore not studied including patients with brain metastases, including in that group of patients with active brain metastases and we improved overall survival so the value.
<unk> brings to patients with her two positive.
Late line metastatic breast cancer is really remarkable and extremely valuable for individual patients with regard to the sort of competitive dynamics.
From a.
Because we have such a strong argument to the bone brain metastases.
And as I said earlier, because they kept Toyota to cause a combination is essentially the same design.
And the same eligibility criteria as we had with her to claim you know we would expect a meaningful number of patients in that trial to have brain metastases I'm not going to disclose the actual number but we expect that to be meaningful.
With regard to dynamics and choices that physicians make as to how they sequence therapies I think that often comes down to the integral to individual patients and their requirements. We certainly don't see any.
And chip can support me in this we don't see any switches away from <unk>, but we're seeing sort of competitively as patients perhaps more likely to start on in her two versus to Kaiser.
Chip do you want to comment a little bit about the mix of two kinds of business and her too.
Yeah, I think we're continuing to see strong.
Utilization in second line patients with active CNS involvement.
To become an important and established treatment for those patients.
It is well tolerated as I've mentioned in the opening remarks, we've seen about a third of patients stay on extended therapy for a time and I think this has helped to support to Kaiser and the revenue generating in a dynamic and changing and evolving breast cancer marketplace.
But again just on the brain Mets.
Picked up I think your last question was.
Around what is the proportion of patients with brain metastases. What is true is the more successful therapies aren't here to metastatic.
Breast cancer, the more likely or the brain metastases develop it's sort of like a century site, which can actually and.
Surprisingly patients relatively early on.
You may have.
They have brain metastases, so we'll see when we see the results from hope to claim a.
To exactly what that proportion looks like but it's certainly enrolling in the trial, we enrolled in the trial.
Thank you and ladies and gentlemen, our next question comes from Jeffrey from the back of them.
Please go ahead.
Good afternoon, and so this is how <unk> broadcast nietzschean. Thank.
Thank you for the question. So congrats on that call that my question is regarding to them as the chip and a great performance for the cortisol.
Maybe two parts. So you mentioned about normalizing back note rate and just Wanna do you see it coming back to pre COVID-19 level it may be skewed.
Do you like the ANAC and compared to a pre COVID-19 level and then the second part is the incremental share gains I guess the downturn.
This data was really providing that momentum so until we see that incremental share gain.
Continue on into the 20th 20th screen time frame.
May be.
You see the market dynamic to suggest that may be flat flattening a little bit moving forward.
Yes. Thanks for the question I think we're very proud of its interests.
This is a this is a relatively mature brand by age.
Years, plus it continues to grow which is remarkable.
I believe the last two quarters have sort of been record breaking quarters for citrus and obviously the factors that you mentioned things like changes in epidemiology.
And such to do play a role as incrementally new data impactful data, we will do that.
So we're very pleased without with ADCETRIS and its progress and chip do you want to speak a little bit more about what are sort of thinking is going forward with regards to you know.
Shifts in APM, such thank you Roger and thanks for the question. So we have seen a normalization of abbvie back to relatively.
Close to pre pandemic, we saw a dip in the first quarter of this year in newly diagnosed H L patients in.
In addition to that the frontline Oh S. D&O results have been very well received and we're pleased with the elevated category. One preferred recommendation that we have in the N. C. C. N now and we do think there is continued incremental growth for us in frontline.
Okay, great. Thank you.
And our next question today comes from Gena Wang with Barclays. Please go ahead.
Hi, This is sheldon on for Gena, Thanks for taking my question.
The graphs on the quarter maybe.
Maybe one quick question on et cetera.
I don't have one non passive.
Et cetera.
Keytruda combo trial is it still on track to report an eight show data in late 2022.
It seems like the trial is focused on non small cell lung cancer and melanoma patients after progressing on PD, one so what would be your bench.
Benchmark to deter.
Determining whether to move forward with these indications.
For pets that have.
If you got any feedback.
Feedback from Kols on.
Uh huh.
Passive is approved with a cohort K data under accelerated approval how would you what's the scale I would expect the uptake relative to after confirmed <unk> thrilled to have data. Thanks, yeah. Thanks. Thanks for those two questions I'll take the <unk>.
ADCETRIS plus keytruda in solid tumors Christians chips, if you want to address the pets. A question. So firstly does that there's a strong scientific arguments for why we are combining ADCETRIS in <unk>.
Population of PD, one failure patients and that we are focused on that.
Trial on melanoma, and non small cell lung cancer and the reason for that is not that ADCETRIS has any activity that we believe it will be meaningful against the solid tumor even if it necessarily expressed CD 30, but much more importantly, because it turns out that ADCETRIS isn't as has the potential to be an immuno modulator.
And we have very good preclinical evidence.
Demonstrating that a population of T regulatory cells. So these are the cells that basically inhibit the immune system from what I'm doing.
Doing its work, particularly with next phase <unk> study, where there were activated so it's an activated population of T. Regs that ADCETRIS can remove that population and removing a T regulatory cell population from the tumor microenvironment.
In a situation, where there has been progression or you know or lack of response to potentially but progression on something like a PD. One inhibitor. We think is a very important scientific concept and so we did indicate that we were hoping to get data out from 'twenty to 'twenty two.
It's more likely that that information that we'll share data in 2023 again no specific timeframe.
The science is compelling and we are conducting the clinical experiments and when we have the data at the level of maturity and completeness that we can share. We will go ahead and do that chip on.
On the passive side, yes, thanks, Roger So first of all the commercial and we don't we don't have a label yet so we'll have.
Some additional insights once we understand the parameters of the label I will say that the K well interactions at ESMO. This year, where we're very positive on the data was was viewed as favorable and in an important advancement for patients.
In the frontline setting.
Right and it is.
Just to add to that.
It's important to note that both pets and Keytruda are approved actually in U S. Cereal cancer. So the drugs themselves are not in terms of the use.
Oh, not problematic for Urologic oncologists to use and so it's.
If were successful with this application it will be with two approved drugs.
In a combination and bear in mind that today to anyway successful combinations with PD one inhibitors that are clearly after this.
In U S cereal cancer have not led to approvals and this is really the.
From the point of view of of changing the therapeutic landscape and bringing you know.
Potentially meaningful interventions.
To these patients, particularly cisplatin eligible patients who are often older and trail, we're really compelled by a high response rate and a duration of response that was not reached I mean that is a remarkable outcome.
And we think that that makes the value proposition of this combination in this vulnerable population very strong.
Thank you so much.
And our next question today comes from Jay Olson of Oppenheimer. Please go ahead.
Oh, Hey, congrats on the quarter and thank you for taking the question.
We're curious about the target product profile for the city of map it out and.
And how it compares to in her two can you just talk about some of the key points of differentiation and also comment on the potential to combine D V with Takeda. Thank you.
Yeah. That's a great question. Thank you and thanks for the congratulations.
So just some comments on the system epidote.
Obviously, the payload we know well, it's the dosing the antibody which was selected by our partners at imaging. We believe is optimized for an ADC construct it has heightened utilization rates, which I think is important and obviously it binds.
To the hurts your targets.
So you know the actual the drug construct we think is a very good one from a as I mentioned earlier with regard to differentiation. The second piece of that is you know.
PD, one inhibitors or PD L. One inhibitor as a part of the general landscape of oncology and in certainly from multiple points of the compass, we've been able to show that if it doesn't based ADC pairs very well with the PD one inhibitor that so that's something that we need to work on for that but data that's been presented so far.
In Europe C D O cancer metastatic <unk> cancer.
It's very compelling using the combination of the citizen epidote.
Together with a PD one inhibitor.
So I mean, we're excited by this compound our first efforts are in U S cereal cancer, where there's a meaningful amount of her two positivity or expression.
We're interested in the sort of traditional so to either over expressed or amplify it but we're also as as is appropriate for an antibody drug conjugate. We're looking at lower levels of so two especially as well because potentially we will see value there and there has been some initial data there which is encouraging in that regard and.
Our focus is on bladder and we are interested in moving ahead in breast cancer and potentially other cancers and your point about Kaiser is extremely well taken which is we basically have two assets that are in the same area. We are working on what is appropriate to do from a clinical perspective looking at that.
Combination, including some novel aspects.
Such as the impact of deposit on the especially of her two on the surface and whether that's something that we can potentially leverage. So I think just stay tuned we don't have plans that we can share with you in detail, but we're very interested in exploring what value could be potentially bring forward without two assets.
Thank you very much.
And our next question today comes from Gregory <unk> RBC capital markets. Please go ahead.
Hey, good afternoon, Roger and team, let me add my congratulations on the quarter as well and thanks for taking my question I have Roger My question, primarily centers around the inflation reduction Act I just wanted to give you an opportunity to comment on the <unk> commercial portfolio as well as the pipeline I think.
Namely how how is your view on pipeline prioritization as well as your external pursuits for for other assets that are being influenced by the IRS considerations and then even maybe more appropriate for chip as well how should we think about longer term and any impacts of avaya right with you.
Respect to et cetera, and the other commercial products. Thank you very much.
Yeah. Thanks for the question and obviously the law.
No is now past.
I think at the sort of highest level.
We need to get together with others in the industry see this as a negative and negative event for innovation. It has the potential to stifle innovation in some unintended consequences consequences of the legislation, which I think you're you know you're addressing around how do we prioritize how do we prioritize our development programs.
In order to optimize them.
The value that a drug can bring.
Within the confines of the act.
I would say we have we will have we have some very simple answers for the three.
Main components, just so you can understand how we're thinking.
Inside C J and I would remind you also we are essentially a large molecule company.
Which you know may be somewhat more favorable in that environment, but if that sort of real macro level.
Oncology is.
And rightfully. So has this mechanism, whereas utilizes the mechanism of accelerated approval to get drugs to people that are making a difference.
And that had the highest unmet need however, they often at the end of therapies and so the addressable population.
Is relatively small and certainly in my experience oncology drugs are developed.
With that first step into late line therapy, bringing value and then you know there's there's momentum built and you can see it in the paddock program is exactly how.
How we would think how to develop a drug logically.
In oncology and that May that may need to change.
That the lead indication.
Tinsley being very small and limited may not be the best way for us to do.
Got up drugs going forward. So that's certainly in our thinking maybe.
Todd would you like to come into a little bit about the specifics of the of the act sure happy to I think Roger gave are really nice sort of overview of how the industry is thinking about it I think when we look at that and bear in mind. There are a lot of elements to this that are still being defined but I think specifically as it relates to.
To us there is the inflation cap, there's the part D redesign and Theres price negotiate or negotiations I think with respect to the inflation cap. This is actually something that we.
You are dealing with now and have for a while.
Our goal will be to include at least our thinking at the time as best we can into the 'twenty three guide that we'll put out in February of next year.
With respect to the.
Part D benefit redesign we think this is an element that would affect kaiser more so than the other brands.
There I think there are a lot of dynamics that need to be played out and frankly more rulemaking that needs to play out, but we don't think that that will affect us prior to kind of the 2025 time frame and then on a price negotiation. We also looked at this and don't feel.
The portfolio again this is the biologics would be affected by this prior to sort of the 2030 timeframe.
So obviously a lot of this is in a state of flux. A law was enacted mid August and again, there continues to be a lot of sort of work to understand it frankly and clarify it.
By all means tracking on it.
And just to reiterate I think from a development perspective, we're thinking very carefully about what would a new drug profile needs to look like in the in the context in the framework of what we think this act.
We will end up.
Creating from a sort of landscape and potential value perspective.
Yes.
That's great. Thanks for all the color guys.
And our next question today comes from Andy Shay, who was William Blair. Please go ahead.
Oh, great. Thanks for squeezing me in.
Two questions one is related to individuals.
Fuel five cohort each that's the triplet plus or minus.
Avastin.
In solid tumor just curious about how you how you think about the the design should we think about this kind of like analogous to cohort K, which can be.
Change you are bringing up my portion and potentially be open to an accelerated approval pathway.
My second question has to do with the the bladder cancer strategy correctly and the her two positive population.
Obviously pass have has shown exceptional activity there.
Curious.
If we know the activity of Pat that in her two positive population that you plan to advance <unk> in that setting.
And that's kind of motivated by the fact that some times you know Pat says has shown activity outside of just negative for expressing tumors even out yet.
Our.
Any observation Joan really really connectivity. Thank you.
Yeah.
And Andy Thanks for the question with regard to innovative two O five.
The focus in that triplet some quadruplet.
Cohort is to really.
To define what a profile would look like for frontline <unk>.
Cervical cancer study.
I don't think it's in our thinking right now.
That if we were to hit to the frontline that and and I accept the analogy with with.
With <unk>, but I think the cervical cancer landscape is a little bit more complex.
For example, Keytruda isn't it.
I wouldn't discount the possibility, but I think we're still we're still trying to determine where do we have a competitive richland.
Once once we have determined that we will define if that's what we choose to do to move ahead, we will define exactly how are we going to get there.
At first blush it feels like this would be a randomized trial, but it's you know.
We're not there yet.
With regard to with regard to its a good question around here with video cancer.
The data that's been generated with D V and Euro CDO cats are particularly in the you know the highest spacing her two is very compelling.
Response rates as a single agent in the 60% range and bear in mind.
Her two directed ADC is not the same as the Nixon for debate of ADC. They may have the same payloads.
But the potential for you know a differentiate differentiated profile.
Based on a biomarker defined population together with whatever the whatever the benefit risk looks like the efficacy in the <unk>.
Safety and Tolerability that put together, we think it's we think it's appropriate to move.
Another option in U S cereal cancer with the system epidote going forward.
I hope that answers. Your question I may have missed part of part of another question. If I have please distributions.
Oh no. Thanks, Roger that's a that's a very comprehensive answer thank you so much.
Okay.
And ladies and gentlemen, this concludes our question and answer session.
Like to turn the conference back over to Douglas for closing remarks.
Thank you operator, and thanks, everybody for participating in our call. This afternoon.
Rest of Europe .
And ladies and gentlemen, this concludes today's conference call and thank you all for attending today's presentation you may now.
I'll disconnect your lines and have a wonderful day.