Q3 2022 Deciphera Pharmaceuticals Inc Earnings Call

November 3, 2022

Good morning, everyone and welcome to the cipher Pharmaceuticals third quarter 2022 financial results Conference call.

Today's call is being recorded at.

At this time I would like to turn the call over to Jenn Larson Senior Vice President of Finance and Investor Relations Jen.

Thank you operator, welcome and thank you for joining us today to discuss the Cyprus third quarter 2022 financial results.

Sam Martin Senior Vice President of Finance and Investor Relations with me. This morning to discuss the financial results and provide a general corporate update are Steve harder President and Chief Executive Officer, Dan Martin Chief Commercial Officer, Matt Sherman, Chief Medical Officer, Margherita, do RK head of international and Tucker.

Kelly Chief Financial Officer.

Before we begin I would like to remind you that any statements. We make on this call are not that are not historical facts are forward looking statements, reflecting the current beliefs and expectations of management made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Examples of forward looking statements made during this conference call include our expectations for our preclinical and clinical programs.

Marshall addition of Kim Mark and 2022 guidance.

Forward looking statements made on this call involve substantial risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by the forward looking statements and we cannot assure you that our expectations will be achieved.

Such risks and uncertainties include those set forth in our most recent quarterly report on Form 10-Q, as well as our SEC filings.

Assume no obligation to update or revise any forward looking statements.

Following this call a replay will be available on the company's website www dot <unk> dot com with that I will now turn the call over to Steve harder, President and Chief Executive Officer of the Cypress Steve.

Thank you Shannon and good morning, everyone. Thank you for joining us today as we provide an update from the third quarter review of our financial results and discuss upcoming corporate milestones.

We achieved another record for Ken lock revenue in the third quarter, reflecting our success delivering this breakthrough medicine to patients in the United States and around the world.

Our efforts to expand the global reach of Ken Lock continued as we submitted our reimbursement application to authorities in Italy and initiated the market access process in Spain. We are proud of the difference can lock is made in our lives a fourth line gist patients around the globe and we remain committed to ensuring this important medicine reaches the patients who need it.

Yes.

We made significant progress in the third quarter across our clinical stage portfolio and presented exciting new data updates from the themself and DCC 31, 2016 programs at the European Society of medical oncology or ESMO Congress in Paris.

We presented the initial phase one dose escalation data for DCC 31, 16, our first in class Orca inhibitor targeting the autophagy pathway in patients with advanced metastatic tumors with a mutant Raza RAF gene.

We demonstrated three key outcomes in the phase one data DCC 31, 2016 demonstrated dose dependent pharmacokinetics, a favorable tolerability profile and strong target inhibition across all dose levels tested.

Since the presentation at ESMO, we completed enrollment in the phase one single agent dose escalation portion of the study and selected the starting dose for these cohorts.

We announced today that we opened enrollment of these dose escalation combination cohorts with the first patient treated last week.

At ESMO, we also presented updated data from the phase one two study of them sell to them. Our orally administered inhibitor of CSF one receptor for the treatment of patients with <unk> giant cell tumor or <unk> not amenable to surgery.

The updated data underscored the best in class potential of himself and demonstrating strong clinical activity positive patient reported outcomes and a favorable tolerability profile.

Finally, we announced today that we have dominated DCC $3 84, a selective inhibitor of BRAF and <unk> as the next clinical candidate to enter our portfolio discovered using the same proprietary kinase inhibitor platform that has brought us Ken lock themself, and Ed and DCC 31 2016, we.

Believe DCC 30, 84 has the potential to be best in class and demonstrates our ability to discover novel agents for the treatment of cancer.

I'll now turn the call over to Dan Martin, Our Chief commercial officer to share more details on our strong U S. Commercial performance and then so Margaret Duarte, our head of international to provide an update on Ken locks ongoing fourth line launch in Europe , which has continued its positive momentum throughout the year Dan.

Thanks, Steve in Q3, we continued to execute on our commercial goals for Ken lock in the U S. Reinforcing its position as the clear standard of care in fourth line gist, while continuing to grow our prescriber footprint and physician experience with kinlaw.

During the quarter, we achieved $24 5 million and total net product revenue in the U S, which represents a 23% increase from Q3 of last year.

Our key performance metrics continued to reflect strong commercial execution in Q3, our sales and marketing teams again drove strong unit demand volume across all business segments.

Our launch to date Prescriber base has continued to grow at a very consistent pace quarter over quarter exceeding 750 physicians through Q3 with the majority of new prescribers again coming from the community setting.

Our market access team has continued to deliver excellent payer access with 100% payable claims for on label patients during the quarter and we again saw strong persistency and time on therapy.

The percentage of patients receiving free drug under our patient assistance program or path was at the high end of our 20% to 30% estimated range as anticipated.

Consistent with what we saw in 2021, we expect the top percentage in Q4 of this year to again be at the high end of our estimated annual range of 20% to 30%.

Turning to themselves as the clinical team continues to rapidly enroll patients in the phase III motion study our commercial team continues to prepare for the potential launch of our second marketed product.

Given the limitations of existing therapies, there is a clear unmet medical need for <unk> patients, who are not amenable to surgery and <unk>.

Market research physicians and patients consistently cite the desire for an effective therapy without having to sacrifice safety and Tolerability. Our recent market research with TGT Treaters further supports the potential for consulting them to establish a new standard of care.

We conducted detailed interviews with T GCT treaters to gain their feedback on the themself and the data generated to date and on how it compares to the existing treatment options. After reviewing product profiles for consulting in Texas, <unk> and Imatinib TGT Treaters consistently rated depends Sultanate profile is highly compelling across all key probably.

Attributes.

When asked which of the three products they would be most likely to recommend to their T. GCT patients every physician interviewed selected consultant it commonly citing what they perceived to be best in class efficacy and safety.

This feedback from TGT Treaters further underscores why we believe consultant it has the potential to deliver a best in class profile and the opportunity to provide tremendous clinical benefit <unk> patients globally.

I'll now turn the call over to Margaret Duarte, our head of international to discuss the results from the third quarter of the commercial launch of Kinloch in Germany, and the progress we're making in other European countries and around the World Margarita.

Thanks, Dan we are very proud of the strength of continued momentum moskin walks European markets, driven by our launch in Germany, and the post approval phase access program in France.

We remain very pleased with the launch with Jakafi in Germany with continued growth in the number of prescribers and number of patients under treatment with chemo throughout the third quarter.

As we build awareness in Germany. We are also working hard to conclude the reimbursement negotiation.

Are you pricing that reflects the made for additional benefits.

Mark brings to fourth line patients.

Despite some expected softness in volume driven by this time agility.

Meanwhile continues to be very well received with exceptional kols lithography and very strong product perception.

The team continues to make good progress with price and reimbursement and successfully preparing the market for the launch next year.

International Kinloch net product revenue was $7 8 million in the third quarter, which includes net revenue from sales in Europe as well as product revenue from distributors in other countries.

While we continued growth in Germany overall international revenue was negatively impacted by lower product sales outside Europe and by the continued weakness of the euro in Q3.

In parallel with the strong commercial performance our team continues to tirelessly pursue market access on a country by country babies.

Cited by our recent progress in two key <unk> with the recently embarrassments application submission in Italy, and aviation market access processes pain.

So continue to advance our process with nice for accessing England. Meanwhile, and look forward to sharing updates on future calls.

I will now turn the call over to Matt Sherman, Our Chief Medical officer to discuss the exciting progress we have made across our clinical and research pipeline Matt.

Thanks Margaret.

We are encouraged by the excellent progress we've made throughout the last quarter advancing our pipeline of novel kinase inhibitors as we continue to bring innovative new medicines to cancer patients.

As Steve mentioned it was a privilege to present new data from the BCC 31, 16 entrance, hoping the programs, but yes.

No Congress in September .

That is no we recorded positive preliminary data from our phase one single agent dose escalation portion of the 31 16 study.

The results showed a 31 16 was well tolerated and achieved exposure in <unk> two inhibition on all dose levels that were associated with anti cancer efficacy with mechanistic and preclinical studies.

As of the data cutoff at ESMO 31, 16 was evaluated in 18 patients across four dose levels from 50 milligrams to 300 milligrams PID and was well tolerated with most treatment emergent adverse events being grade one or two.

DCC 3116 exposure appeared to increase dose proportionately and demonstrated targeted inhibition with significant decreases in the phosphorylation of atg <unk>, a direct <unk> substrate in peripheral blood mononuclear cells across all dose levels tested.

As we noted at ESMO, we extended the 100 to 300 milligram PID dose.

Dose cohorts with additional patients to further characterize DCC 31, 2016, and better inform the selection of the starting dose for the combination dose escalation cohorts.

After the <unk> 10 more patients to the study I am pleased to announce that we have not reached the maximum tolerated dose and a single agent dose escalation next electric 50 milligrams PID as a starting dose level for the combination cohorts.

The first three combination dose escalation cohorts will include two cohorts in combination with <unk> tremendous and beating that NIM as well as one cohort with sort of wraps it an approved <unk> inhibitor.

All three cohorts are now open for enrollment and last week, we treated the first patients.

The robust results from our single agent portion of the study provide an excellent foundation for our clinical strategy of combining <unk> 31, 16, with a broad range of partner drugs across many different mechanisms of action, which can potentially revolutionize the treatment paradigm for a large number of cancer patients.

Now turning to themselves or CSF, one receptor kinase inhibitor that has the potential to be a best in class treatment for TCT and a substantial improvement on the currently available therapy.

After the data presented at ESMO from our Phase <unk> study continued to demonstrate consultants anti tumor activity and support its encouraging safety profile.

Let me start and have strong efficacy was highlighted by high response rates across all parts of the study with early and sustained responses for many patients and response rates that continue to increase over time.

In the Phase one study, which is the most mature part of the study we saw an objective response rate of 69%.

In cohort a of the phase II portion of the study is objective response rate was 53% and in addition for the first time. We also presented response data from cohort B of the phase II portion of the study which includes patients with prior therapy that inhibits the CSF one receptor.

Even in this pre treated population themself enough showed an impressive initial objective response rate of 46%, including responses in some patients who have not achieved the previous response or who progressed on or after receiving prior CSF one receptor directed therapies.

Treatment duration continue to increase in the most recent data cut.

In the Phase one study, which included the most mature data the median treatment duration was $17 five months and 53% of patients in phase one remains on study.

We look forward to providing an update on the resulted in some press a treatment duration of the next data disclosure.

In addition to the deepening and durable responses observed we were very pleased by the updated safety profile with longer term follow up cross all phase one dose cohorts and at the recommended phase II dose and cohorts AMB.

We believe consultant has the potential to address limitations of existing therapies with a best in class product profile and.

And are encouraged by substantial clinical data we've generated to date, along with the progress of our phase III registration, enabling motion study.

Enrollment continues to progress very well and we look forward to providing an update in the coming months on our estimated time to reach full enrollment.

Moving to our preclinical pipeline, we are excited to announce today the nomination of a Pan RAF clinical development candidate DCC 30 84.

This molecule is a selective inhibitor of the BRAF CRF kinases, and the ZIP is class one two and three BRAF mutant BRAF fusion and Ras mutant cell lines.

Clinical studies with DCC 30, 84 demonstrate both single agent and combination activity and favorable pharmaceutical properties, a key potential differentiator from other Pan RAF program in development.

I will now turn the call over to Tucker Kelly, our Chief Financial Officer to provide the financial update Tucker.

Thanks, Matt I'd like to review the highlights from our third quarter financial results.

Total revenue for the third quarter was $36 million, which includes $32 3 million in net product revenue of kilowatts, and $3 7 million in collaboration revenue. The majority of which is kinlaw commercial supply revenue under our agreements with <unk> for greater China as well as royalty revenue.

Cost of sales for the three months ended September 32022 was $3 3 million, which included approximately 700000 in cost of net product revenue and cost of collaboration revenue of $2 7 million.

In Q3, we completed the sale of zero cost inventory that had been expensed as R&D prior to FDA approval in 2020.

As we transition to selling inventory that reflects the full cost of manufacturing, we do not expect the cost of product sales as a percentage of net sales of <unk> to increase significantly.

Total operating expenses were $80 9 million in the third quarter, a decrease of 21% compared to operating expenses of $102 9 million in the same period in 2021.

Research and development expenses in the third quarter were $47 5 million compared to $66 4 million for the same period in 2021.

Selling general and administrative expenses for the third quarter were $30 million compared to $35 5 million for the same period in 2021.

Cash cash equivalents in marketable securities as of September 30 was approximately $372 million sufficient to fund our operations into 2025 with that I'll now turn the call back over to Steve. Thank you Tucker today's updates demonstrate the breadth of progress we've made across our pipeline. This year from expanding our geographic reach with Ken lock to providing exciting nuclear.

Updates for both the consultative and DCC 3116 programs at the ESMO Congress in September and most recently treating the first patient in the combination dose escalation portion of the GCC 31, 2016 phase one study and declaring a development candidate from our Pan RAF program, we look forward to a strong finish to the year.

Setting the stage for an exciting year ahead in 2023 with that operator, I'd now like to open the call for Q&A.

If you'd like to ask a question. Please press star one one.

Our first question comes from Daniel Wolle with Jpmorgan. Your line is open.

Good morning, guys. Thanks for taking my question.

A couple of questions first.

Understanding that you cannot actively market for second line setting based on addition of can lock to MTN guideline.

That were to happen how should we think about the opportunity that can open up and do you believe that that will depend on the category of recommendation.

Second on <unk> six would you walk us through your thoughts on how you chose the 50 milligram B I D dose as the go forward dose and can you also remind us of the profile the AE profile at that dose.

And then for Vimpelcom nib granted that overall responses as the primary endpoint in motion how should we think about the median duration of treatment and what it means for the overall opportunity. Thank you.

Hi, Dan Good morning, Thanks for your questions, Let me try and take those in turn and I'll ask that anymore.

And Matt Sherman also to comment on a couple of and add any additional color. So your first question was with respect to the potential for a listing in the LCC and guidelines for re <unk>.

For use in the second line setting, which would be an off label use. So just a couple of comments with respect to that first we have not seen any updates to the NCC guidelines as of this morning.

As we've shared previously the data from the intrigue study, which was a randomized phase III study in the second line versus <unk> was submitted to the SEC on earlier this year, but we have not yet seen any modification to the treatment guidelines and we don't believe that the panel.

Has has just reviewed.

The application will they start as it has been reflected in any update to the guidelines. So as you know there is some lag between the time of the meeting and the time when guidelines can be updated.

So in order for a physician to use the drug in the second line setting assume that this off label uses will sit in the guidelines of course, a physician needs to be made aware of the data.

You seem to be reimbursed by the payer and then the physician would be in a position to be able to administer the product out. It's important to note that given that this is an off label use of the driver would be an off label use of the drug that's not a use that we can promote to.

So that's that's outside of label on our promotion is limited to what.

Playbook, So I think it's too soon to tell first.

Update to the guidelines might occur or when that might occur and then what the subsequent impact in terms of actual use in practice in the market like this.

So next on your question with respect to 31, 16, I'll turn that over to Matt to address the selection of the 50 milligram dose as the initial dose for the combination dose escalation.

Thanks Steven.

Good morning, Daniel Yes, so as we headed today, we're very pleased with completing the enrollment in the monotherapy dose escalation part of the 31 2016.

And of course, the three dose cohorts that we tested some 50 milligrams up to 300 milligrams did not reach a maximum tolerated dose, which also did not see interested in toxicity sphere, we felt that all dose levels were well tolerated.

Patients in particular at the 50 milligram.

Dose level most of the adverse events were grade one or two there were no grade three adverse events. So.

Also because.

It does demonstrate that the lowest dose level, we're able to have good target engagement with an addition of a close relation with Atg 2014 was wondering immediate downstream markers of.

<unk> kinase inhibition.

Taking all the data together.

The 60 milligram B I think dose level to initiate the combination dose escalation cohorts.

And as you know Daniel So we announced this morning that we the first patient in the combination dose escalation has been treated so we're really pleased with the rapid progress that we're making in moving into the combination dose escalation part of the study.

The next question I believe Daniel related to themselves and response rate as being.

The primary endpoint in that study and I think your other embedded question was just around duration of treatment.

What we've seen so far is reported at ESMO in how we think about that relative to the potential opportunity in the market and what I'd ask is perhaps Dan would you like to comment on that on that component of obtaining a question, yes, absolutely Daniel good morning. Thank you for the question. So we think that duration is going to be a very important aspect.

<unk> of ultimately the benefit to patients received from drugs in this space as well as ultimately the commercial opportunity and we're really encouraged with what we've seen so far we think it's really.

All very consistent and by that I mean, when we look at the claims data of patients.

Were treated with <unk> today, we see a.

A meaningful difference in the duration of therapy between.

The drug that is used predominantly albeit off label, which is on that and then we see a <unk>.

Average duration of therapy of around 18 months and when you look at the same data set it started.

We see a much lower duration of therapy somewhere around eight months and we think that may be tied to the well known safety concerns associated with the <unk> profile.

When we look to the Imatinib duration of therapy is somewhat of a benchmark. So to speak that 18 months and then we think about the duration that we're seeing maturing in our clinical study.

Clinical studies excuse me.

The most mature being the.

Earliest data set in a phase one escalation cohort, we see a $17 five months.

Median treatment duration, thus far and so we see this all sort of maturing in a way.

It looks really favorable good for patients and ultimately we think good for the market opportunity.

Got it thank you very much and congratulations on the progress.

Thanks, Dave.

Our next question comes from Christopher Raymond with Piper Sandler Your line is open.

Good morning. This is Nick will go back to you on for Chris. Thanks for taking our questions I guess, maybe just two from us.

Just on your phase one b combo dose escalation correct for 31 2016 can you just talk a little bit about maybe what technology and you can see in each cohort to deem at successful. If you move forward in development and then just around your newly nominated Pan RAF inhibitor I guess is becoming.

So I guess I'm just wondering maybe if you could provide a little more color around the property.

Alluded to differentiating <unk>.

84 from other Pan RAF inhibitors in development.

Thanks, Nicole Thanks for the two questions. So I'll ask Matt to take your first question with respect to the phase one be a part of the 31 16 study.

And selection of dose and what Youre expecting to see what we would hope to see in the combination dose escalation part of the study and then I'd be happy to take the Pan RAF question that your tables as well.

Yes, Hi, Nicole so yes. Thanks for the question. So as we've talked about we're initiating the combination dose escalation cohorts with 31 16 in combination with the three partner drugs that we initially selected the two <unk> inhibitors <unk> been bidding mednet and the K rescue <unk> inhibitors for the asset.

So we'll be moving as we also stated we've enrolled the first patients both combination dose escalation cohorts I'm very excited about.

Yes.

Cohorts and escalating to a safe dose in combination once we have data from the combination cohorts will move into tumor specific expansion cohorts and those will be defined by mutation status of specific tumor indications at that time, we'll be able to talk more about the signals that we'll be looking forward to show proof.

Activity in this tumor specific mutations or consumers.

And then Nicole with respect to your question on the Pan RAF inhibitor. We're certainly really excited to have nominated our development candidate for from a Pan RAF program.

And the number is we noted for that is GCC 30, 84. So this is.

Reflective we believe of how productive our research engine is so we're excited to bring this product forward.

So as the landscape among Pan RAF inhibitors, there are a number of Pan RAF inhibitors that are in development.

We're excited about the preclinical data that we've generated so far we intend to publish that at a medical meeting early next year as we flush out further and share further what the profile is of $3 84, and how we view it as potentially being best in class I think as Matt mentioned during his prepared remarks, we think another element of differentiation.

Could well be the favorable pharmaceutical properties that we see with 38 before and again, we will have more that we can talk about as we share the preclinical data at a medical meeting next year.

Great. Thanks for taking my question.

Our next question comes from <unk> Yang with Jefferies. Your line is open.

Thank you a question on Vim sales can move and.

So vishal I think historically previously you've said that enrollment update by end of this year. So we are expecting more definite.

Kind of update.

In terms of enrollment completion.

Rather than continuing enrollment this or can you give us a little more color there.

Question is on you can lock on Anthos in guidelines update with second line Gist.

Story Kelly.

We looked at the oncology product when the product name.

Dan just a guideline update including off label use.

And in general our op Kagan sale taper, so well kind of what percentage of our sales allocation really expect thank you.

Good morning, and thanks for the two great questions. So let me take the themself in a related question then I'll ask Martin to comment on your end CCN guideline related question. So first for themselves to that but we remain really pleased with the pace of enrollment in the motion study as Youll recall. This is a 120 patient study that were enrolled.

And patients with <unk> giant cell tumor, it's a placebo controlled study and we've previously shared that we were able to enroll about 40 patients over six months in the phase one two study some of that data of course, we presented at the ESMO conference back in September .

Based on enrollment was once we had gotten to site activations for the studies. So as we reflect on where we are so far year to date that the motion study. We continue to be very pleased as we've said and as you alluded to it we will provide a more fulsome update in the coming couple of months as we are able to better project when we might get to laugh.

<unk> patient in the study, but we've been gratified to see the number of patients that are in the community who are seeking systemic a systemic treatment option and we think thats reflective of the significant unmet medical need today in the U S where there's only one approved products <unk> and then of course outside of the U S.

In Europe in particular, there are no approved products for systemic treatment for this disease. So we're pleased to see these patients finding their ways too.

Our our sights that we've activated for the study and enrollment continues at a rapid pace, which we're really pleased with.

And I'll go ahead and jump in this is Dan. Thanks for the question on the guidelines. So a couple of thoughts first as we've laid out previously.

After the <unk> presentation last share on the industry data one of the virtual plenary and then at the <unk> meeting itself.

Have gotten a lot of feedback from.

Kols regarding the fact that they interpret this data is showing clear activity.

The product in the second line.

Parable efficacy and really better overall safety profile then sutent.

And they told us that.

They find this data really interesting and supportive of the overall cannot clinical profile and something that.

Ideally.

<unk> be considered for use in the second line setting.

The challenge with this of course is that although we submit the data to the CCN as all companies do.

One we have no way to know whether or not.

It may make its way into the guidelines and we'll just have to see how the committee.

This two to include it or not and.

And then importantly, we've underscored this really consistently and I'll just do it again here. This is something that would be off label and therefore, we can't and won't promote it and so as Steve has mentioned that there are a number of important steps to.

Sort of what impact this could have in the marketplace and physicians have to be aware of the data wherever the update to the guidelines.

And there is a desire to use and payer dynamics and so we won't be <unk>.

Promoting or driving any of that and so we'll just have to see number one if there is a guideline update and then number two.

How it plays out in the marketplace. If there is your question.

Other other products in the space <unk>.

Intelligence space, and what kind of impact off label listings had it's really hard to make a direct comparison because so many different treatment areas are so different has a lot to do with.

How the guidelines are updated it has to do with what other alternatives may exist in those therapeutic areas.

It's really tough to say that.

This X Y Z is how it typically plays out and what we would expect here so.

We.

We are keeping an eye on it and like you work.

Eager to see what if any updates maybe forthcoming.

Thank you.

Okay.

Our next question comes from Michael Schmidt with Guggenheim Partners. Your line is open.

Hey, Good morning. This is Paul on for Michael Thanks for taking our question. So I guess first.

First following up on your.

<unk> data update for Vince Ultimate just wanted to get some more color on the CDK increases that you observed in the study and perhaps how they compare with whats preserve with other <unk> inhibitors or Matt.

Do you see sort of any risks, perhaps to more significant muscle tissue damage, depending on patient baseline characteristics.

Good to hear your thoughts here and then secondly on <unk>, you have sort of assurance and preclinical data showing a combination with those converted yet I was just wondering if you have any current plans to investigate egfr mutant patients and sort of where that segment plays into your strategy.

Sure. Thanks, Paul Thanks for the two questions I'll be happy to take the 31 2016 question first and then I'll ask Matt to take your question related to themselves and CPA elevations. So.

The way, we think about our <unk> inhibitor 31, 2016, which as you know is first in class first into the clinic, which we believe is really exciting and gives us.

A key advantage as we explore a variety of different combination partners as we've presented at medical meetings over the course of the last two years, we see very broad activity of inhibiting autophagy pre clinically when combined with either map kinase pathway inhibitors or receptor tyrosine kinase inhibitors like awesome <unk>.

A whole host a whole range of possibilities for combination in the task ahead for US is as we're doing now with the phase <unk> study is to begin to prosecute.

Each of those so as we go through the preclinical data and we prioritize what we're going to pursue than bringing that forward into the clinic and exploring those combination partners clinically to see what we see so there'll be more to come from us in terms of additional future combination partners with the program and while I can't comment specifically on <unk> I think that's a great.

Example, all summer and it is a receptor tyrosine kinase inhibitor, where we see pre clinically very strong.

When used in combination with <unk> thousand 100 exchange so that just suggest to us the potential very broad applicability of this approach to targeting the autophagy escape mechanism and cancer generally Matt do you want to take the themselves on a cubic a question Steve.

Steven Thanks, Paul for the question. So as we noted before the elevations of CDK that we've seen in patients treated with <unk> and that is due to inhibition of clearance of the protein or enzyme from the blood. So as we know the resident macrophages within the liver copper sales and they are responsible for clearing normally circulating <unk>.

Proteins and enzymes from the blood and in the context of inhibiting those.

The macrophages with the CSF one receptor inhibitors, such as the Ultimate then there's slower clearance of those enzymes are proteins from the blood leading to asymptomatic just laboratory elevations of those protein levels such as <unk> and this has been noted as a class effect across all the different small molecules and even the biologics are directly with emphasis.

So if one receptor.

So I felt very comfortable with the safety profile that we've seen to date and the implementation of <unk> two program and certainly as we talked about this morning.

Yes, you see on second line study so first with respect to the motion studied.

As we noted earlier today and are prepared remarks, and also in the release really pleased with the pace of enrollment promotion and how that is progressing as I said, a little while ago I think it is reflective of the strength of the data that we've presented so far from the phase one too and I think it is reflective of the unmet need in a variety of different geographies in terms of.

Absence of good systemic therapy as being available to treat these patients.

Well, we haven't commented specifically on the exact number of sites that are open southern England Charles Dot Gov. It's listed in 32 sites that are now open for the motion study. We're pleased with the number of patients that we've seen enrolling from those sites. We have a number of sites in the U S. A number of sites in Europe , as well and we have seen patients from both of those geographies enrolled on study.

So so we are pleased with the progress, we're making and we're looking forward to providing a more fulsome update as I was saying in response to use question. Once we have some line of sight to the last patient in the study and when that might occur.

Dan to comment on the <unk> question sure absolutely. So just to confirm I want to make sure I heard the question correctly. The question was what would a listing change our commercial strategy in 2023.

Yeah, Yes, yes, okay great.

Great. Thank you for the question.

So the short answer is no.

The.

One point that we try to underscore each time is that it's really important to note that.

This would be an off label use even if listed in the MCC guidelines and so from a commercial point of view, we have to always make sure. We are really careful about our promotion and we stay on label.

So we can't and won't promote any off label lifting and the guidelines.

Commercial strategy in 2023 would.

Continue to be focused on optimizing the opportunity within the fourth line setting.

And continuing to execute.

It is.

Have.

Driving really high awareness really high Cher voice in space, maintaining really high.

Attribute rating for the product amongst just treaters.

Continuing to make sure that cannot be viewed as a standard of care in the fourth line as it is today and making sure that we work to find every possible on label patients that we can.

That will continue to be our focus as it relates to kinloch in the U S.

Our next question comes from Peter Lawson with Barclays. Your line is open.

Steve Thanks for taking my questions Uhm and joined late but just on the so I apologize. If this came out just spend that revenue growth.

Quarter flat I Wonder if you can kind of talk to any of that.

Underlying dynamics and kind of how it looks for four Q.

<unk>.

Yeah. Good morning, Peter H C. So I'll I'll I'll start off and then ask Margarita all sort of comment on the trend of the quarter versus what we've seen earlier this year, but for just just as a reminder, so we received our European approval approval at the very end of last year and as you recall the first market that we were able to launch any commercially was it was <unk>.

Germany, and so that's where our launch has been underway principally so far this year. We've also been able to provide kinlaw occupations to sell can lock for patients in France under a post approval paid access program. So that has also contributed to our European revenue and then looking forward as we noted in the prepared remarks today we've.

Now submitted for reimbursement in Italy that we've undertaken the same process in Spain. We also previously noted that we had submitted to a nice for England and Wales.

So we're continuing to make progress across other territories in Europe , where we have to go through our pricing reimbursement process and it's likely that those processes will conclude in the coming year. So this does you know can take quite some time, particularly in southern European markets to get to market access to get to a pricing and reimbursement.

Approval so.

So as we look over the medium term, we're certainly really excited about the opportunity to get can lock to these patients and the five largest markets across Europe , which represent about the same size of the population of the United States. So epidemiology, we expect to be the same the same number of just patients in that territory and months were able to get some market acts.

Yes, we would then be able to unlock that opportunity for the company and also for patients to get access to catalog Margaret if you want to comment on some of the specifics in terms of what we saw in the quarter.

Sure.

So let me start by saying that it is very gratifying to see how well kinloch into English.

Namely in Germany would keep the only country, we have lunch so far.

We continue our growth such activity.

Specifically on on Q3 per month, So next Avenue in Europe with higher interest fee. Despite the summer period, and and also be spot.

Headwind, which added to make it into the however, let me say that the revenue in the D. C market outside of Europe was Lola when compared to two Q2 he'll impacting your problem.

<unk>.

Thank you and then just digging into that for for Germany. If you do you think <unk> <unk> <unk>.

Many and.

Cause they've been kind of weakness in France, just curious what the underlying dynamics there for that kind of flat quarter over quarter.

Sure. Thank you for the questions. So we could give you our enlarge mellowed in Germany.

We can say like that ma'am and belly button cancer patients and achievement with Kinloch and in the number of prescriber I should also add the dynamics in terms of data accessing Chi C. New iPad not great, but I can tell you that this drug is now so far to speak to the exceptional clinical benefit of Kinloch in the in the first line setting the high unmet medical.

And the hot coffee team in successfully executing our launch that the team.

It is also important to note that we continue advancing with our prices location in Germany and naturally that the final price, we will be able to achieve will impact our that's happening in the future.

Thank you so much.

You're welcome.

Our last question comes from Brad Cadena with Stifel. Your line is open.

Good morning, one question on can lock and one of them and felt nib.

It looks like through price increases this year for <unk> can you comment on how much has been captured in that price and then just the mix of price and volume growth attributed to the quarter over quarter U S growth for 2022.

And then I'd like to ask any comments you can provide on European regulatory interactions for themselves.

I do think you've shown that you're drug is differentiate on the safety profile, we've heard really strong U S. K O L feedback but.

C. H M. P did reject derailleur, both for safety and efficacy and according to the tumor shrinkage didn't establish the activity.

For clinical benefit so just any comments there about the opportunity maybe you would be great. Thank you.

Greg Good morning Grad. Thanks for the question I saw Scott Dan to take the Kellog related question first.

So uhm covenants briefly thanks for the question. So we have taken to price increases this year, one February 1st 4.5% in one July 1st.

315%.

The.

Overall impact there is approximately eight per cent of gross perspective, we haven't.

Ever spoken exactly to what our gross and net numbers are each quarter, but we've always.

We.

Have experienced it and continue to experience of being a 16% range on average so.

You can use that as a as a metric there to get to the to the net.

And then from a year over year, the 23% that we quoted about half of that can be attributed to volume growth in about half of that can be attributed to favorable changes in the net price.

And the Pat percentage year over year.

Great. Thanks, Jenn and Brad to your question, specifically with respect to themselves and how we think about the profile of the drug and how we think about the European opportunity.

Let me, let me just comment on that I mean, our our definition of reviewing the profile of the drug and how how we think regulators will view. It is really in three categories. So certainly about efficacy the ability of themselves and they have to shrink tumors in patients. We believe we very clearly demonstrated that we have a potent and selective inhibitor.

Highly efficacious based on the data that we showed it as no.

Second is around Tolerability as you noted that said that's incredibly important in this patient population and we believe that we've demonstrated again also it has no that themselves in a as well tolerated and the third category is a different measure of efficacy and thats patient reported outcomes and so as you will recall that asthma, we reported for the first time some of the piano.

Data from this study from the phase one to experience, where we see a meaningful impact on measures related to patient reported outcomes and we think that's going to be very relevant to European regulators, we think that will be relevant certainly to patients and also to prescribers for the product. So our focus is on making sure.

For that we have a profile based on the motion study, which we are now conducting that will allow us to provide the evidence that's going to be required to be successful in the U S market also in Europe and in other territories around the world and while we dealt comment specifically on regulatory interactions I can say that we're pleased with the feedback that we <unk>.

<unk> on the regulatory front for the vent cells in the program and that all was.

Taken into consideration as we designed to the motion study and launch that study.

There are no further questions like to turn the call back over to Steve harder for closing remarks.

Alright. Thank you Michelle I just want to thank all of you for joining us on today's call and thanks for your continued support of the work that we're doing here at the site for US we look forward to work there.

Can you progress this year and I hope you have a great rest of your day.

This concludes the program you may now disconnect.

The conference will begin shortly to raise your hand during Q&A you can dial 911.

[music].

Thank you operator, welcome and thank you for joining us today to discuss the Cyprus third quarter 2022 financial results I'm, Denmark, and senior Vice President of Finance and Investor Relations with me. This morning to discuss the financial results and provide a general corporate update are Steve harder President and Chief Executive.

Yeah, Martin Chief Commercial Officer, Matt Sherman, Chief Medical Officer, Margherita, do RK head of International and Tucker Kelly Chief Financial Officer.

Examples of forward looking statements made during this conference call include our expectations for our preclinical and clinical programs.

Commercialization of Kim Mark in 2022 guidance.

Such risks and uncertainties include those set forth in our most recent quarterly report on Form 10-Q, as well as our SEC filings, we assume no obligation to update or revise any forward looking statements.

Following this call a replay will be available on the company's website www dot <unk> dot com with that I will now turn the call over to Steve harder pressed.

And Chief Executive Officer of Decipher Steve.

Thank you Jan and good morning, everyone. Thank you for joining us today as we provide an update from the third quarter review of our financial results and discuss upcoming corporate milestones.

We achieved another record for Ken lock revenue in the third quarter, reflecting our success delivering this breakthrough medicine to patients in the United States and around the world.

Our efforts to expand the global reach of Ken lot continued as we submitted a reimbursement application to the authorities in Italy and initiated the market access process in Spain. We are proud of the difference can lock is made in our lives a fourth line gist patients around the globe and we remain committed to ensuring this important medicine reaches the patients who need it most.

Yes.

We made significant progress in the third quarter across our clinical stage portfolio and presented exciting new data updates from the themself and Ed and DCC 31, 16 programs at the European Society of medical oncology or ESMO Congress in Paris.

At ESMO, we presented the initial phase one dose escalation data for DCC 31, 16, our first in class all contributor targeting the autophagy pathway in patients with advanced metastatic tumors with a mutant Raza RAF Jane.

We demonstrated three key outcomes in the phase one data.

<unk> 31, 2016 demonstrated dose dependent pharmacokinetics.

<unk> tolerability profile and strong target inhibition across all dose levels tested.

Since the presentation at ESMO, we completed enrollment in the phase one single agent dose escalation portion of the study and selected the starting dose for these cohorts.

We announced today that we opened enrollment of these dose escalation combination cohorts with the first patient treated last week.

The updated data underscored the best in class potential of themselves demonstrating strong clinical activity positive patient reported outcomes and a favorable tolerability profile.

Finally, we announced today that we have dominated DCC $3 84, a selective inhibitor of BRAF and <unk> kinases as the next clinical candidate to enter our portfolio discovered using the same proprietary kinase inhibitor platform that has brought us Ken lock themselves <unk> and DCC 3116.

We believe DCC 30, 84 has the potential to be best in class and demonstrates our ability to discover novel agents for the treatment of cancer.

I'll now turn the call over to Dan Martin, Our Chief commercial officer to share more details on our strong U S. Commercial performance and then some Margaret of Duarte, our head of international to provide an update on Ken locks ongoing fourth line launch in Europe , which has continued its positive momentum throughout the year Dan.

During the quarter, we achieved $24 5 million and total net product revenue in the U S, which represents a 23% increase from Q3 of last year.

Our key performance metrics continued to reflect strong commercial execution in Q3, our sales and marketing teams again drove strong unit demand volume across all business segments.

Our market access team has continued to deliver excellent payer access with 100% payable claims for on label patients during the quarter and we again saw strong persistency and time on therapy.

The percentage of patients receiving free drug under our patient assistance program or path was at the high end of our 20% to 30% estimated range as anticipated consistent with what we saw in 2021, we expect the top percentage in Q4 of this year to again be at the high end of our estimated annual range of 20% to 30%.

Given the limitations of existing therapies, there is a clear unmet medical need for <unk> patients, who are not amenable to surgery and <unk>.

Market research physicians and patients consistently cite the desire for an effective therapy without having to sacrifice safety and Tolerability. Our recent market research with <unk> Treaters further supports the potential for consulting them to establish a new standard of care.

We conducted detailed interviews with TCT treaters to gain their feedback on the themself and the data generated to date and on how it compares to existing treatment options. After reviewing product profiles for consulting in Texas and Imatinib TGT Treaters consistently rated depends Sultanate profile is highly compelling across all key prongs.

Attributes.

When asked which of the three products they would be most likely to recommend to their key GCT patients every physician interviewed selected consultant it commonly citing what they perceive to be best in class efficacy and safety.

This feedback from TGT Treaters further underscores why we believe consultant and it has the potential to deliver a best in class profile and the opportunity to provide tremendous clinical benefit <unk> patients globally.

I'll now turn the call over to Margaret of Duarte, our head of international to discuss the results from the third quarter of the commercial launch of Kinloch in Germany, and the progress we're making in other European countries and around the World Margarita.

Thanks, Dan we are very proud of the strength and continued momentum with key unlocks European markets Anssi, driven by our launch in Germany, and the post approval point access program in France.

We remain very pleased with the launch of Jakafi in Germany with continued growth in the number of prescribers and number of patients under treatment with chemo throughout the third quarter.

As we build awareness in Germany. We are also working hard to conclude the reimbursement negotiation.

So pricing that reflects the made for additional benefits.

Mark brings to fourth line patients.

Despite some expected softness in volume driven by the summer period, and Pratt Canada continues to be very well received with exceptional kols lithography and very strong profit perception.

The team continues to make good progress with price and reimbursement and successfully preparing the market for the launch next year.

International keen walk net product revenue was $7 8 million in the third quarter, which includes net revenue from sales in Europe as well as product revenue from distributors in other countries.

While we continued growth in Germany overall international revenue was negatively impacted by lower product sales outside Europe and by the continued weakness of the euro in Q3.

In parallel with a strong commercial performance our team continues to tirelessly pursue market access on a currency by currency babies.

<unk> recent progress into keeps have inquiries with the recently embarked with application submission in Italy and aviation of the market access processing, Spain, we.

We also continue to advance our process with night for accessing England. Meanwhile, and look forward to sharing updates on future calls.

I will now turn the call over to Matt Sherman, Our Chief Medical officer to discuss the exciting progress we have made across our clinical and research pipeline Matt.

Thanks Margaret.

We are encouraged by the excellent progress we've made toward the last quarter advancing our pipeline of novel kinase inhibitors as we continue to bring innovative new medicines to cancer patients.

As Steve mentioned it was a privilege to present new data from the BCC <unk> 16 enzymes open the programs, but yes.

Congress in September .

That is no we recorded positive preliminary data from our phase one single agent dose escalation portion of the 31 16 study.

The results showed that 31, 16 was well tolerated and achieved exposure in <unk> inhibition at all dose levels that were associated with anti cancer efficacy with mechanistic and preclinical studies.

As we noted in his note we extended the 100 to 300 milligram PID dose.

Dose cohorts with additional patients to further characterize DCC 31, 16, and better inform the selection of the starting dose for the combination dose escalation cohorts.

After rolling 10 more patients to the study I am pleased to announce that we have not reached the maximum tolerated dose and a single agent dose escalation Neff selected 50 milligrams PID as a starting dose level for the combination cohorts.

The first three combination dose escalation cohorts will include two cohorts in combination with <unk> commitment and beating that NIM as well as one cohort with sort of wraps it an approved <unk> inhibitor.

All three cohorts are now open for enrollment and last week, we treated the first patients.

The robust results from our single agent portion of the study provide an excellent foundation for our clinical strategy of combining <unk> 31, 16 with a broad range of partnered drugs across many different mechanisms of action, which can potentially revolutionize the treatment paradigm for a large number of cancer patients.

Now turning to themselves or CSF, one receptor cognizant inhibitor that has the potential to be a best in class treatment for TCT and a substantial improvement on the currently available therapy.

After the data presented at ESMO from our Phase <unk> study continued to demonstrate consultants anti tumor activity and support its encouraging safety profile.

<unk> strong efficacy was highlighted by high response rates across all parts of the study with early and sustained responses for many patients and response rates that continue to increase over time.

In the Phase one study, which is the most mature part of the study we saw an objective response rate of 69%.

Even in this pre treated population then sell to nib showed an impressive initial objective response rate of 46%, including responses in some patients who have not achieved the previous response or who progressed on or after receiving prior CSF one receptor directed therapies.

Treatment duration continue to increase in the most recent data cut.

In the Phase one study, which included the most mature data the median treatment duration was $17 five months and 53% of patients in phase one remains on study.

We look forward to providing an update on the resulted in some present prudent duration of the next data disclosure.

We believe consultant has potential to address limitations of existing therapies with a best in class product profile and.

And are encouraged by substantial clinical data we've generated to date, along with the progress of our phase III registration, enabling motion study.

Enrollment continues to progress very well and we look forward to providing an update in the coming months on our estimated time to reach full enrollment.

Moving to our preclinical pipeline, we are excited to announce today the nomination of a Pan RAF clinical development candidate DCC 30 84.

This molecule is a selective inhibitor of the BRAF CRF kinases, and the ZIP is class one two and three BRAF mutant BRAF fusion and Ras mutant cell lines.

I will now turn the call over to Tucker Kelly, our Chief Financial Officer to provide the financial update Tucker.

Thanks, Matt I'd like to review the highlights from our third quarter financial results.

Total revenue for the third quarter was $36 million, which includes $32 3 million in net product revenue of Kinloss and $3 7 million in collaboration revenue. The majority of which is kinlaw commercial supply revenue under our agreements with <unk> for greater China as well as royalty revenue.

Cost of sales for the three months ended September 32022 was $3 3 million, which included approximately 700000 cost of net product revenue and cost of collaboration revenue of $2 7 million.

In Q3, we completed the sale of zero cost inventory that had been expensed as R&D prior to FDA approval in 2020.

As we transition to selling inventory that reflects the full cost of manufacturing, we do not expect the cost of product sales as a percentage of net sales of <unk> to increase significantly.

Total operating expenses were $80 9 million in the third quarter, a decrease of 21% compared to operating expenses of $102 9 million in the same period in 2021.

Research and development expenses for the third quarter were $47 5 million compared to $66 4 million for the same period in 2021.

Selling general and administrative expenses for the third quarter were $30 million compared to $35 5 million for the same period in 2021.

Cash cash equivalents in marketable securities as of September 30 was approximately $372 million sufficient to fund our operations into 2025 with that I'll now turn the call back over to Steve. Thank you Ducker today's updates demonstrate the breadth of progress we've made across our pipeline. This year from expanding our geographic reach with Ken lock to providing exciting nuclear.

Updates for both the Consultative and DTC 31, 16 programs at the ESMO Congress in September and most recently treating the first patient in the combination dose escalation portion of the GCC 31, 2016 phase one study and declaring a development candidate from our Pan RAF program, we look forward to a strong finish to the year.

Setting the stage for an exciting year ahead in 2023 with that operator, I'd now like to open the call for Q&A.

If you'd like to ask a question. Please press star one one.

Our first question comes from Daniel Wolle with Jpmorgan. Your line is open.

Good morning, guys. Thanks for taking my question.

A couple of questions first.

Understanding that you cannot actively market for a second line setting based on addition of can lock to MTN guideline if that were to happen how should we think about the opportunity that can open up and do you believe that that will depend on the category of recommendation.

Second on <unk> six would you walk us through your thoughts on how you chose that 50 milligram B I D dose as the go forward dose and can you also remind us of the profile AE profile at that dose.

And then for <unk> granted that overall responses as the primary endpoint in motion how should we think about the median duration of treatment and what it means for the overall opportunity. Thank you.

Hi, Danielle good morning. Thanks for your question. So let me try and take those in turn and I'll ask Dan Martin and.

And Matt Sherman also to comment on a couple of months and add any additional color. So your first question was with respect to the potential for a listing in the LCC and guidelines for re <unk>.

For use in the second line setting, which would be an off label use. So just a couple of comments with respect to that first we have not seen any updates to the NCC guidelines as of this morning.

As we shared previously the data from the intrigue study, which was a randomized phase III study in the second line versus <unk> was submitted to the SEC on earlier this year, but we have not yet seen any modification to the treatment guidelines and we don't believe that the panel yet.

Has just reviewed.

The application of these thought is it's been reflected in any update to the guidelines. So as you know there is some lag between the time of the meeting and the time when guidelines can be updated.

So in order for a physician to use the drug in the second line setting assume that this off label uses will sit in the guidelines of course, a physician needs to be made aware of the data.

<unk> seems to be reimbursed by the payer and then the physician would be in a position to be able to administer the product out. It's important to note that given that this was an off label use of the drug or would be an off label use of the drug that's not a use that we can promote to.

So that's that's outside of label on our promotion is limited to what.

So.

It's too soon to tell the first one.

What update to the guidelines might occur or when that might occur and then what the subsequent impact in terms of actual use in practice in the market like this.

So next on your question with respect to <unk> 16, I'll turn that over to Matt to address the selection of the 50 milligram dose as the initial dose for the combination dose escalation.

Yes, Thanks Stephen.

Daniel Yes, so as we headed today, we're very pleased with completing the enrollment in the monotherapy dose escalation part of the 31 16 study and of course, the three dose cohorts that we tested some 15 milligrams up to 300 milligrams did not reach a maximum tolerated dose, which also did not see any dose limiting toxicities there.

So all of those levels were well tolerated.

And patients and particularly at the 50 milligram dose level most of the adverse events were grade one or two there were no grade three adverse events. So we.

Also because of <unk>.

Demonstrate that the lowest doses.

It will just help good target engagement with an addition of a close relation with Atg 2014.

One immediate downstream markers.

<unk> kinase inhibition, so taking all that data together.

50 milligram, B, I think X level to initiate the combination dose escalation cohorts.

So then the next question I believe Daniel related to themselves.

In response rate as being.

The primary endpoint in that study and I think your other embedded question was just around duration of treatment.

What we've seen so far is reported at ESMO in how we think about that relative to the potential opportunity in the market and what I'd ask is perhaps Dan would you like to comment on that on that component of obtaining this question, yes, absolutely Daniel Good morning. Thank you for the question. So we think that duration is going to be a very important aspect.

<unk> of ultimately the benefit to patients receive from drugs in this space as well as ultimately the commercial opportunity and we're really encouraged with what we've seen so far we think it's really.

All very consistent and by that I mean, when we look at the claims data of patients who were treated with <unk> today, we see.

Meaningful difference in duration of therapy between the.

The drug that is used predominantly albeit off label, which is on that and then we see a.

Average duration of therapy of around 18 months and when we look at the same data set it started.

We see a much lower duration of therapy somewhere around eight months. So we think that may be tied to the well known safety concerns associated with the <unk> profile.

When we look to the Imatinib duration of therapy is somewhat of a benchmark. So to speak that 18 months and then we think about the duration that we're seeing maturing in our clinical study.

Clinical studies excuse me the most mature being the.

Earliest data set in a phase one escalation cohort, we see a $17 five months.

Median treatment duration, thus far and so we see this all sort of maturing in a way.

It looks really favorable good for patients and ultimately we think good for the market opportunity.

Got it. Thank you very much comparison on the progress.

Thanks, Dan.

Yes.

Our next question comes from Chris Raymond with Piper Sandler Your line is open.

Good morning. This is Nick will get back to you on for Chris. Thanks for taking our questions I guess, maybe just two from us.

Just on your thoughts on the combo dose escalation correct for 31 16 can you just talk a little bit about maybe what signals you can see in each cohort to be successful. If you move forward in development and then just around your newly nominated Pan RAF inhibitor I guess, becoming.

So I guess I'm just wondering maybe if you could provide a little more color around the property.

Kind of alluded to differentiating <unk> 84 from other Pan RAF inhibitors in development.

Thanks, Nicole Thanks for the two questions. So I'll ask Matt to take your first question with respect to the phase one be a part of the 31 16 study.

And selection of dose and what you're expecting to see what we would hope to see in the combination dose escalation part of the study and then I'd be happy to take the Pan RAF question that your tables as well.

Hi, Nicole so yes. Thanks for the question. So as we talked about we're initiating the combination dose escalation cohorts with 31 16 in combination with the three partner drugs that we initially selected the two mechanism it is tremendous.

But net net and the <unk> inhibitors for the asset and so we'll be moving as we also announced that we've enrolled the first patient into both combination dose escalation cohorts and very excited about.

Seven eight.

Cohorts and escalating to a safe dose in combination once we have the data from the combination cohorts will move into tumor specific expansion cohorts and those will be defined by <unk>.

<unk> status of specific tumor indications at that time, we'll be able to talk more about the signals that we'll be looking forward to show proof of.

Activity in those tumor specific mutation driven tumors.

And then Nicole with respect to your question on the Pan RAF inhibitor. We're certainly really excited to have nominated our development candidate for from our Pan RAF program.

The number as we noted for that is GCC 30, 84. So this is.

Reflective we believe of how productive our research engine is so we're excited to bring this next product forward.

So as the landscape among Pan RAF inhibitors, there are a number of Pan RAF inhibitors that are in development.

Could well be the favorable pharmaceutical properties that we see with 38 before and again, we will have more that we can talk about as we share the preclinical data at a medical meeting next year.

Great. Thanks for taking the question.

Our next question comes from <unk> Yang with Jefferies. Your line is open.

Thank you a question on <unk> and <unk>.

So vishal I think historically previously you've said that enrollment update goodbye end of this year. So we are expecting more definite.

Kind of update.

In terms of enrollment completion.

Rather than continuing enrollment this deal can you give us a little bit more color there.

Question is on you can lock on Anthos in guidelines update with second line Gist.

Story Kelly.

We looked at the oncology.

Laura.

When the product.

Dan just a guideline update these including off label you have you seen in general are up taken sale to fulfill what kind of what percentage of our sales allocation really expect.

Yes.

Good morning, and thanks for the two great questions. So let me take the themself in a related question then I'll ask Martin to comment.

It's on your end CCN guideline related question. So first for themselves to that but we remain really pleased with the pace of enrollment in the motion study as Youll recall. This is a 120 patient study that we're enrolling in patients with <unk> itself Street, Tim or it's a placebo controlled study and we've previously shared that we were able to enroll.

We'll have about 40 patients over six months in the phase one two study some of that data of course, we presented at the ESMO conference back in September and that pace of enrolment was once we had gotten into site activations for the study. So as we reflect on where we are so far year to date that the motion study. We continue to be very pleased as we've said and as you allude.

<unk> will provide a more fulsome update in the coming couple of months as we are able to better project when we might get to last patient in the study, but we've been gratified to see the number of patients that are in the community.

Who are seeking systemic a systemic treatment option and we think thats reflective of the significant unmet medical need today in the U S where there's only one approved products <unk> and then of course outside of the U S and in Europe . In particular, there are no approved products for systemic treatment for this disease. So we are pleased to see these patients.

Finding their ways too.

Our our sights that we've activated for the study and enrollment continues at a rapid pace, which we're really pleased with.

And I'll go ahead and jump in this is Dan. Thanks for the question on the guidelines. So a couple of thoughts first.

We've laid out previously.

After the <unk> presentation last share on the injury data one of the virtual plenary and then at the Astro meeting itself.

Have gotten a lot of feedback from.

Kols regarding the fact that they interpret this data is showing clear activity from the product in the second line comparable efficacy and really better overall safety profile than <unk>.

And they told us that they.

These data are really interesting and supportive of the overall cannot clinical profile and something that.

Ideally might be considered for use in the second line setting the challenge with this of course is that although we submit the data to the MTN as all companies do number one we have no way to know whether or not.

It may make its way into the guidelines and we'll just have to see how the committee.

Uses two to include it or not.

And then importantly, we've underscored this really consistently and I'll just do it again here. This is something that will be off label and therefore, we can't and won't promote it and so as Steve has mentioned that there are a number of important steps to.

Sort of.

What impact this could have in the marketplace and physicians have to be aware of the data wherever the update to the guidelines.

And there is a desire to use and payer dynamics and so we won't be.

Promoting or driving any of that and so we'll just have to see number one if there is a guideline update and then number two.

How it plays out in the marketplace. If there is your question about other other products in this space.

In the oncology space and what kind of impact off label listings had it's really hard to make a direct comparison because so many different treatment areas are so different has a lot to do with how.

The guidelines are updated it has to do with what other alternatives may exist in those therapeutic areas.

So it's really tough to say that.

This X Y Z is how it typically plays out and what we would expect here so.

<unk>.

Are keeping an eye on it and like you work.

Eager to see what if any updates maybe forthcoming.

Thank you.

Okay.

Our next question comes from Michael Schmidt with Guggenheim Partners. Your line is open.

Hey, Good morning. This is Paul on for Michael Thanks for taking our questions. So I guess first.

First following up on your no data update for <unk>, just wanted to get some more color on the CDK increases that you observed in the study and perhaps how they compare with what the reserve with other <unk> inhibitors or Matt.

Do you see sort of any risks, perhaps to more significant muscle tissue damage, depending on patient baseline characteristics.

Good to hear your thoughts here and then secondly on <unk> six you've sort of assurance and preclinical data showing a combination with those conversion did I was just wondering if you have any current plans to investigate egfr mutant patients and sort of where that segment plays into your strategy.

Sure. Thanks, Paul Thanks for the two questions I'll be happy to take the 31 16 question first and then I'll ask Matt to take your question related to themselves and <unk> elevations.

The way, we think about our <unk> inhibitor <unk> hundred 16, which as you know is first in class first into the clinic, which we believe is really exciting and gives us.

A whole host a whole range of possibilities for combination in the task ahead for US is as we're doing now with the phase <unk> study is to begin to prosecute.

Example, all summer and it is a receptor tyrosine kinase inhibitor, where we see pre clinically very strong.

When used in combination with <unk>, so that just suggest to us the potential very broad applicability of this approach to targeting the autophagy escape mechanisms and cancer generally Matt do you want to take those themselves and actually if you take question. Thanks, Steve and thanks, Paul for the question. So as we noted before the elevations of CDK that we've.

<unk> in patients treated with <unk> it is.

Due to inefficient of clearance of the protein or enzyme from the blood. So as we know the resident macrophages within the liver are called Cups itself and they are responsible for clearing normally circulating proteins and enzymes from the blood and in the context of inhibiting those.

The macrophages with the CSF one receptor inhibitor such as <unk> Ultimate then there's slower clearance of those enzymes and proteins from the blood leading to asymptomatic just laboratory elevations of those protein levels, such as CPE kit and this has been noted as a class effect across all the different small molecules and even the biologics directly with <unk>.

<unk> one receptor so felt very comfortable with the safety profile that we've seen to date.

The implementation of <unk>, two program and certainly as we talked about this morning.

With the progress, we're making with enrollment in the phase III motion study.

Great. Thank you.

Our next question comes from Tyler Van Buren with Cowen Your line is open.

Good morning, Ed Brittany went on for Tyler. Thank you for taking our questions and congrats on all the execution this quarter on the phase III motion trial can you provide any additional color on how site activation is proceeding and also potentially on the balance that you're asking ex USA also.

The potential.

<unk> recommendation for second line Ken Lucky's.

Would that affect your commercial strategy at all moving into 2023. Thank you.

Thanks for the questions Britney.

So I'll be happy to take the first question with respect to the motion study and then.

Turn it over to Dan just to comment on the CCN second line study. So first with respect to the motion study.

As we noted earlier today in our prepared remarks and also in the release, we're really pleased with the pace of enrollment promotion and how thats progressing as I said, a little while ago I think it's reflective of the strength of the data that we presented so far from the phase one two and I think it's reflective of the unmet need in a variety of different geographies in terms of.

Absence of good systemic therapies being available to treat these patients.

Well, we haven't commented specifically on the exact number of sites that are open in southern England trials Dot Gov explicit in their 32 sites that are now open for the motion study. We're pleased with the number of patients that we've seen enrolling from those sites. We have a number of sites in the U S. A number of sites in Europe , as well and we have seen patients from both of those geographies enrolled on study.

So so we're pleased with the progress, we're making and we're looking forward to providing a more fulsome update as I was saying in response to <unk> question. Once we have some line of sight to last patient in the study and when that might occur.

Dan you want to comment on the CCN question sure absolutely. So just to confirm I want to make sure I heard the question correctly. The question was what would a listing change our commercial strategy in 2023.

Yes, yes, yes, okay.

Great. Thank you for the question. So the short answer is no.

The.

Point that we tried to underscore each time is that it's really important to note that.

This would be an off label use even as listed in the NCC guidelines and so from a commercial point of view, we have to always make sure. We are really careful about our promotion and we stay on label.

So we can't and won't promote any off label listing and the guidelines are commercial strategy in 2023.

I continue to be focused on optimizing the opportunity within the fourth line setting.

Continuing to execute.

Hey, guys.

We have driving.

Driving really high awareness really high share of voice in the space maintaining really high.

Attribute ratings for the product amongst.

Just treaters.

We are continuing to make sure that cannot be viewed as a standard of care in the fourth line as it is today and making sure that we work to find every possible on label patients that we can.

That will continue to be our focus as it relates to Ken market in U S.

Our next question comes from Peter Lawson with Barclays. Your line is open.

Okay, Steve Thanks for taking my questions I joined late but just on the so I apologize. If this came up just spend that EU revenue growth quarter over quarter flat I'm wondering if you could kind of talk through any of the.

The underlying dynamics.

How it looks for full queue. Thank you.

Yes, good morning, Peter it's Steve So I'll start off and then ask Margaret also to comment on the trend in the quarter versus what we've seen earlier this year, but first just as a reminder, so we received our European approval approval at the very end of last year and as you'll recall the first market that we were able to launch commercially with <unk>.

And so that's where our launch has been underway principally so far this year, we've also been able to.

Provide can lock to patients to sell can lock for patients in France under a post approval paid access program. So that has also contributed to our European revenue and then looking forward as we noted in the prepared remarks today, we've now submitted for reimbursement in Italy, we've undertaken the same process in Spain, we also pre.

Obviously noted that we had submitted to nice for England and Wales. So we're continuing to make progress across other territories in Europe , where we have to go through a pricing and reimbursement process and it's likely that those processes will conclude in the coming year. So this as you know can take quite some time, particularly in southern Europe .

And markets to get to market access to get to a pricing and reimbursement approval. So as we look over the medium term. We're certainly really excited about the opportunity to get Ken lock to these patients and the five largest markets across Europe , which represent about the same size of the population of the United States. So epidemiology, we expect.

To be the same so same number of gist patients in that territory and once we're able to get some market access. We would then be able to unlock that opportunity for the company and also for patients to get access to Kellogg Margaret If you want to comment on some of the specifics in terms of what we saw in the quarter.

Sure. Thanks, Steve So let me start by saying that it is very gratifying to see how well <unk> is being received in Europe , namely in Germany, which is the only country. We have launched so far and let me continue our growth trajectory as.

Specifically on Q3 performance. So net revenue in Europe was higher in Q3, despite the summer period and and also despite the FX headwinds, which adds if I could in Q3. However, let me say that the revenue in the distributor markets outside of Europe was lower when compared to Q2 still impacting you.

Overall number Paul.

Thank you and then just digging into that four for Germany. If you do you think.

Germany.

They've been kind of weakness in France.

Curious on what the underlying dynamics, there for the kind of flat quarter over quarter.

Sure. Thank you for the question. So we continue our in launch mode in Germany.

We can say like that and growing both in terms of patients under treatment with Kinloch I think the number of prescribers I should also add that the dynamics in terms of accessing GSC in Europe are not great, but I can tell you that the strong results. So far speaks to the exceptional clinical benefit of locking in the fourth line setting the high unmet medical.

And the hard work of the team is successfully executing our launch that the team.

It is also important to note that we continue advancing with our price negotiations in Germany, and that's really the final price that we will be able to achieve really impact our net is happening in the future.

Okay. Thank you so much.

Welcome.

Our last question comes from Brad <unk> with Stifel. Your line is open.

Good morning, one question on <unk> and one on <unk>.

It looks like two price increases this year for Kim Mark can you comment on how much has been captured into net price and then just the mix of price and volume growth attributed to the quarter over quarter U S growth for 2022.

And then I'd like to ask any comments you can provide on European regulatory interactions for themselves.

I do think you've shown that your drug is differentiated on the safety profile, we've heard really strong U S. Kols feedback, but the EMA is CHF did reject derailleur of both for safety and efficacy and according to the tumor shrinkage didn't establish the activity.

For clinical benefit so just any comments there about the opportunity in the EU would be great. Thank you.

Great. Good morning, Brad Thanks for the question, So I'll ask Dan to take the Kinloch related question first.

So covered this briefly thanks for the question. So we have taken two price increases this year one in February one of four 5% and one July one.

315%.

So the.

Overall impact there is approximately 8% on a gross perspective, we haven't.

Ever spoken exactly to what our gross to net numbers are each quarter, but we've always said that we.

Have experienced it and continue to experience between the 16% range on average so.

You can use that as a as a metric there to get to the net.

And then from a year over year, the 23% that we quoted about half of that can be attributed to volume growth and about half of that can be attributed to favorable changes in the net price.

And the percentage year over year.

Alright, Thanks, Tim and Brian to your question, specifically with respect to themselves and how do we think about the profile of the drug and how we think about the European opportunity.

Let me just comment on that.

A definition that we are reviewing the profile of the drug and how we think regulators will view it as really in three categories. So certainly about efficacy the ability of themselves and you have to shrink tumors in patients. We believe were very clearly demonstrated that we are a potent and selective inhibitor. That's highly efficacious based on the data that we showed at <unk>.

The second is around Tolerability as you noted that's incredibly important in this patient population and we believe that we've demonstrated again also at ESMO that themselves and that is well tolerated and the third category is a different measure of efficacy in that patient reported outcomes and so.

As you will recall at ESMO, we reported for the first time some of the PRA data from the study from the phase <unk> experience, where we see a meaningful impact on measures related to patient reported outcomes and we think thats going to be very relevant to European regulators, we think that will be relevant certainly to patients.

And then also to prescribers for the product. So our focus is on making sure that we have a profile based on the motion study, which we're now conducting.

Will allow us to provide the evidence that's going to be required to be successful in the U S market also in Europe and in other territories around the world and while we don't comment specifically on regulatory interactions.

Can say that we're pleased with the feedback that we've received on the regulatory front for themselves in a program and that all was taken.

Taken into consideration as we design to the motion study and launch that study.

There are no further questions I'd like to turn the call back over to Steve <unk> for closing remarks.

Alright. Thank you Michele I just want to thank all of you for joining us on today's call and thanks for your continued support of the work that we're doing here at the site for US we look forward to the work that.

Tim Your progress this year and hope you have a great rest of your day.

This concludes the program you may now disconnect.

Q3 2022 Deciphera Pharmaceuticals Inc Earnings Call

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