Q4 2022 Deciphera Pharmaceuticals Inc Earnings Call

Good morning, everyone and welcome to cipher Pharmaceuticals fourth quarter and full year 'twenty 'twenty financial results Conference call.

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I'd now like to hand, the conference over to your Speaker today Gen Larsen Senior Vice President of Finance and Investor Relations. Please go ahead.

Operator, welcome and thank you for joining our call.

The fourth quarter.

Yeah, 2022 financial results I'm joined by senior Vice President of Finance and Investor.

With me this morning to discuss the financial results and provide a general corporate update our Cooper, President and Chief Executive Officer.

Eitan, Chief Commercial Officer, Matt Sherman, Chief Medical Officer Library to Dubai.

Head of international.

All right.

Okay.

Before we begin I would like to remind you that any equipment.

This call that are not historical facts are forward looking statements reflect frankly and.

And expectations of management made pursuant with Blue Harbor PRASM.

The private Securities Litigation Reform Act of 19.

Examples of forward looking statements made during this conference call.

Our preclinical and clinical programs.

Marcellus I slept for MA in 2023 guidance.

Forward looking statements made on this call involve substantial risks and uncertainties.

Cause actual results to differ materially from those expressed or implied by the forward looking statement.

And we cannot assure you that the patient population.

Such risks and uncertainties, including those set forth in our most recent annual report on Form 10-K, as well as our other SEC filings.

We assume no obligation to update or revise any forward looking statement.

Following this call a replay will be available on the company's website.

Www dot dot com with that I will now turn the call over to <unk>.

President and Chief Executive Officer.

Great.

Thank you and good morning, everyone. Thank you for joining us today as we provide an update from the fourth quarter and full year 2020 to review our financial results and provide additional context on our strategic outlook and planned corporate milestones for 2023.

2022 was a year of exceptional execution for Decipherer global can lock product revenue grew 44% compared to 2021, driven by very strong performance in the U S as well as launches outside of the U S. Can lock is now approved for fourth line gastrointestinal stromal tumors or Jess and 12 jurisdictions around the world.

Last month, we outlined our key strategic priorities for the year, which will enable <unk> to continue its evolution toward being a fully integrated company with multiple approved medicines and capabilities ranging from international commercialization to early stage discovery all powered by our proprietary switch control kinase inhibitor platform.

These priorities include expanding the market potential for Ken lock into earlier lines of just by initiating the insight pivotal phase III study of <unk> versus Sunitinib in second line gist patients with mutations in kit exon 11, and 17 18 in the second half of 2023.

If successful we believe the insight study has the potential to change practice in second line kit, driven gist and to double the U S revenues for Kellogg we.

We were very pleased that the circulating tumor DNA or CTO DNA data from our phase III intrigue study of Ken lock in second line Gist was selected for presentation at the <unk> Plenary series session a few weeks ago.

Sherman, our Chief Medical Officer will review the data later in the call and outline our plans for the new phase III insight study.

As we begin enrollment in the new phase III insight study for Ken Lock. We also expect to read out another pivotal trial. The phase III motion study of himself and <unk>, our highly selective switch control kinase inhibitor of CSF, one receptor in patients with <unk> giant cell tumor or <unk> in the fourth quarter of this year, we have been very pleased with the pace of enrollment.

And are excited to announce today that we now expect to complete enrollment in the motion study in the first quarter and report topline data in Q4 of this year.

For DCC 31, 16, our first in class inhibitor of <unk> kinase is designed to inhibit autophagy, we expect to present updated data from the single agent dose escalation portion of the phase one two study and initial combination data in the second half of 2023.

Finally, we were very pleased to announce that clinical trial collaboration and supply agreement with Pfizer for a new combination dose escalation study of DCC at 31, 2016, and <unk> and Cetuximab in colorectal cancer that we plan to initiate in the second half of this year, we look forward to presenting the preclinical data supporting this new combination cohort in the first.

Half of this year, along with additional new preclinical data for GCC 31 2016.

We continue to complement these commercial and clinical stage advancements with investment in our research pipeline. Our discovery platform continues to drive new growth opportunities with potential first in class or best in class precision oncology agents, including DCC $3 80 for our newly nominated Pan RAF clinical development candidate for which we expect to present preclinical date.

In the first half of this year and to file an investigational new drug application in the second half of the year. DTC 30, 84 was discovered using the same proprietary switch control kinase inhibitor platform that has brought us Ken lock themselves and 31 2016, and we look forward to quickly advancing this program to the clinic.

In addition, we plan to debut a new development candidate from our proprietary discovery engine in the coming months as well as preclinical data from other research programs. Our team has been working on Matt Sherman, Our Chief Medical Officer, who will provide more detail about upcoming milestones for our pipeline programs on today's call.

San Martin our Chief Commercial Officer will then share insights on the U S commercial performance for the quarter and Margaret of Duarte, Our head of international will provide an update on <unk> ongoing fourth line launch in Europe , which has sustained its strong momentum throughout 2022 will end with Tucker Kelly, Our Chief Financial Officer will review highlights from the fourth quarter and full year.

<unk> 2022 financial results and the recent highly successful follow on equity offering that will allow us to continue to execute on our goals.

First I will turn the call over to Matt Sherman to provide an update on our R&D efforts Matt.

Thanks, Steve.

We are thrilled with the progress we have made across our clinical and preclinical pipeline in 2022 and already in the first few weeks of this year.

Steve mentioned it was a privilege to present additional Cte DNA data from intrigue phase III studies Kinloch at the STR preliminary session last month, which we believe represents potential practice changing event and the treatment of second line kit driven gist.

The results strongly support our planned insight study and the potential to expand <unk> label, which if approved will allow physicians for the first time to optimize treatment for patients in the second line setting based on their mutational profile to improve outcomes over the current standard of care.

And the Cte DNA analysis for patients with kit exon 11, and 17 18 mutations Kinloch show the striking demonstrate comparative Susan if across all efficacy measures beginning with a 44% confirmed objective response rate with all patients on kinloch, achieving either a partial response or stable disease. In contrast, there were no.

Responses and the Sunitinib arm.

Similarly, Kinloch demonstrated the greatly improved PFS with a median of $14 two months compared to only one five months for Sunitinib in fact half of the patients receiving sunitinib had progressed or died by their first restaging scale at six weeks. This resulted in a hazard ratio of <unk> to two meaning that treatment with <unk> resulted.

And a 78% reduction in the risk of disease progression or death.

We also saw a strong trend for overall survival in favor of Kinloch in this subgroup of patients. The OS results are based on an updated data cut as of September 2022, and showed that the Kinloch arms still had not reached the median Ah patients randomized to Sunitinib has an overall survival of $17 five months.

This resulted in the hazard ratio of <unk>, three four or 66% reduction in the risk of death.

And the landmark analysis showed that the number of patients alive at 30 months on Kinloch was estimated to be nearly twice that of patients randomized to sunitinib.

<unk> was generally well tolerated in the subgroups safety and Tolerability profile was consistent with the primary analysis of the intrigue study.

For patients with mutations in kit exon 11, and 17 18 fewer patients in that cannot arm experienced grade three or four treatment emergent adverse events compared to sunitinib.

Basically intrigue <unk> data and regulatory input we plan to initiate insight a new pivotal phase III study of Kinloch versus Sunitinib in this group of second line Gist patients.

If positive we believe the results of the <unk> study will support an expanded label for Kim Watkins select second line gist patients and transform how physicians treat these patients.

Moving from one pivotal phase III program to another I now want to talk about them Sultanate, which we believe will become the second approved products from our proprietary switch control kinase inhibitor platform.

We are strongly encouraged by the compelling clinical data we've generated to date supporting the potential of <unk> to be the standard of care treatment for patients with <unk> non amenable to surgery.

We began enrolling patients in the phase III motion study in early 2022, and I'm very pleased to announce today that we now anticipate completing enrollment this quarter, enabling us to readout the topline results in the fourth quarter of this year.

We also expect to present updated data from the phase <unk> study of <unk> in the second half of this year that will focus on longer term safety and efficacy and provide additional support for the clinical and commercial opportunity for <unk>.

Turning now to <unk> 31, 2016, we were excited to announce our first clinical trial collaboration and supply agreement for the program a few weeks ago.

Under the agreement Pfizer will supply <unk> at no cost as part of a new dose escalation combination evaluating <unk> hundred 16, with <unk> <unk> in patients with colorectal cancer.

Additionally, we plan to present updated data from the single agent dose escalation cohorts and initial data from the combination dose escalation cohorts of the phase <unk> study and initiate one or more expansion cohorts in the second half of this year in combination with the mechanism of this traumatic or been imatinib or the <unk> inhibitor. So the rest of it.

We remain optimistic about the potential for DCC $3 16 to broadly impact the treatment of cancer as a first in class <unk> inhibitor based on the strong preclinical in vitro and in vivo data, we have generated showing additive or synergistic activity in combination with multiple agents targeting our TK.

RASK and map kinase pathways.

Finally, the next programs slated to enter the clinic as DCC 30, 84, our Pan RAF inhibitor for which we expect to submit an IND in the second half of this year, we plan on presenting in vitro and in vivo data in the coming months, demonstrating its preclinical profile as a potent and selective inhibitor of BRAF see RAF kinases.

With optimized pharmaceutical properties for potential development in both single agent and combination opportunities as well as data from additional undisclosed research programs and look forward to the expected nominations of our newest development candidate.

I'll now turn the call over to Dan Martin, Our Chief commercial officer to provide an update on the U S commercial efforts Dan.

Thanks, Matt in.

In 2022, we continue to execute on our commercial goals for <unk> in the U S. Further reinforcing its status as the clear standard of care in fourth line Gist irrespective of mutational profile, while continuing to expand our prescriber footprint.

U S. Net product revenue was $25 6 million in Q4 and for the full year 2022, Kinloch sales grew to $97 2 million, representing an increase of about 20% over 2021.

Approximately half of this growth came from increased demand and volume with the remainder coming from net price growth and a lower percentage of patients receiving free drug under our patient assistance program or Pap.

The higher demand volumes seen in 2022 was driven principally by an increasing average duration of therapy as the real world Persistency curves continues to mature and more fully reflects the impact of patients who receive prolonged clinical benefit from chemo.

Specifically, we estimate that the average duration of therapy in 2022 grew to approximately seven months, we expect the average duration of therapy to continue to increase gradually over time and could ultimately reach as high as eight to eight five months.

As expected the percentage of patients receiving free drug under our pop program increased in the fourth quarter versus the prior quarter consistent with what we saw in Q4 of 2021. The <unk> percentage was slightly above the high end of our estimated annual range of 20% to 30%.

This patch seasonality is common and is driven by patient affordability challenges that tend to increase as the year progresses due to the Medicare part D drug benefit design.

The development and approval of Kinlaw fourth line Gist addressed a major unmet medical need and fundamentally change the treatment paradigm in advanced Gist.

Based on the compelling data from the Cte DNA analysis of intrigue, we are eager to start the insight study and we believe.

True for this new indication Kinloch has the potential to advance the gist treatment paradigm, yet again this time in the second line setting based on mutational profile.

We believe that if we are successful in expanding the label with a second line kit exon 11, plus 17 or 18 indication that it would double that kinloch peak revenue potential to <unk> $350 million to $400 million in the U S alone.

Turning to consulting it with.

With the readout of the phase III motion study fast approaching the commercial team continues to prepare for a potential approval and launch we remain highly encouraged by the market opportunity in <unk>, where we have estimated a total addressable market of $850 million in the U S.

With a potentially best in class product profile, we believe himself and <unk> is uniquely positioned to address the high unmet medical need within <unk> and given the approximately 90% overlap among just an <unk> prescribers, we believe himself and <unk> will be an excellent addition to our commercial business and that can lock in consultant.

Together have the potential to generate in excess of $1 billion in global peak revenue.

Thanks, Dan.

Very proud of the strength of sustained momentum up Ken walks European market ANSI two.

2022 was a key year again very successful execution in two critical markets, our launch in Germany, and the post approval quick access program in France.

It was also a year in which we made significant progress towards market access in other major European markets with the submission of the reimbursement application Tonight.

In England and Wales.

Idaho power access in Italy, and the initiation of our market access processing space.

For the full year 2022.

<unk> net product sales were $28 3 million up significantly from $5 9 million in 2021.

These strong results reflect <unk> best in class clinical profile in fourth line Gist and.

And the significant unmet need and I'm very proud of the team's superb execution of our launch strategy that's enabled such exceptional performers.

Our fourth quarter International net product revenue up 7 million was driven primarily by continued growth in demand in Germany and in France. However, net product revenue for the fourth quarter did include a one time reserve a kilo of product sales in Germany.

Change in German law effective as of November 2020 tool sharpening the free pricing period retroactively to six months from 12 months.

In Germany, our team is in the last stages of the price negotiations.

Although we are not yet in a position to disclose the details we remain confident that with our final negotiated price will reflect the highest value that kinloch brings to patients and payers in Germany.

We also continue towards SaaS, our asbestos questions with nice as well as with the authorities in Italy, and Spain and look forward to sharing updates on future calls.

Turning to rest of the world.

We're pleased to see that the national reimbursement drug list released by China's National Healthcare Security administration well.

Simply stated.

Kinloch, which will provide access to kinloch for many more patients in China for our partnered dial up.

In 2022, we recognized $8 5 million in collaboration revenue under our agreements with <unk> and look forward to deference unit strong commercial execution and greater China.

In addition, we are excited to announce that we recently received approval for Keylock, and New Zealand, Israel in Macau, including the number of jurisdictions around the world to 12 in which Ken will get approved for fourth line Gist.

I will now turn the call over to Tucker Kelly, our Chief Financial Officer to review, the fourth quarter and full year financial results and recent financing okay.

Thanks, Margarita total revenue for the fourth quarter was $36 3 million, which included $32 9 million of net product revenue Kinloch and $3 4 million in collaboration revenue with.

For the full year total revenue grew 39% to $134 million, including net product sales of $125 5 million in collaboration revenue of $8 5 million.

Cost of sales in the fourth quarter was $3 $2 million, including $7 million and cost of net product revenue and $2 5 million in cost of collaboration revenue.

For the full year cost of sales was $8 8 million, including $2 7 million and cost of net product revenue and $6 1 million in cost of collaboration revenue.

In 2021 total cost of sales was $2 9 million of which $1 $6 million was cost of collaboration revenue and $1 3 million was cost of net product revenue.

In the third quarter of 2022, we completed the sale of zero cost inventory that had been expensed as R&D prior to FDA approval in 2020.

In Q4 total operating expenses were $83 5 million compared to operating expenses of $112 6 million in the same period in 2021 for.

For the full year 2022, total operating expenses were $316 8 million a decrease of approximately 20% compared to operating expenses of $396 2 million in 2021.

Research and development expenses in the fourth quarter of 2022 were $48 1 million compared to $74 9 million for the same period in 2021.

In 2022, R&D expenses were $187 8 million compared to $257 million in 2021.

Selling general and admin expenses expenses in the fourth quarter were $32 2 million compared to $37 2 million in Q4 of 'twenty one for.

For the full year SG&A was $120 2 million compared to $136 3 million in 2021.

We ended the year with cash cash equivalents in marketable securities of approximately $339 million.

In January of this year, we raised an additional $134 7 million in net proceeds through a very successful public offering that further strengthened our financial position and extended our cash runway into 2026. The strong support we received from both existing and new investors in the offering will allow us to increase shareholder value as we strive to become a company with multiple <unk>.

<unk> products.

I'll now turn the call back over to Steve.

Thank you Chuck the outstanding progress, we've made it to say for over the past year, along with our planned 2023 milestones puts us firmly on the path to becoming a company with multiple approved products around the world as we near enrollment completion and prepared to announce topline results from our phase III motion study, we look forward to also initiating our phase III insight study.

Later this year, we are proud to leverage our proprietary switch control kinase inhibitor platform and deep pipeline to make a difference for people living with cancer with that operator, I would like to now open the call for Q&A.

As a reminder to ask a question. Please press star one one on your telephone and please wait for your name to be announced.

Please standby, while we compile the Q&A roster.

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

Good morning, everyone. Thank you for taking my question.

Just a couple of questions first for insight with the idea of combining can lock with Sydney considered for the pivotal trial.

Second Youre.

You were able to refine the timeline for enrollment completion for motion from first half 'twenty three to <unk> 23, what can you attribute this acceleration to.

And then for DTC to 116, while results from the dose escalation combination study are not expected until second half what should investors expect with initial data and specifically should there be an expectation for anti tumor activity. Thank you.

Yes, hi, good morning, Daniel Thanks for joining and thanks for the three questions. So let me let me take those in order first that you broke up on the first part of your question with respect to insight I believe it was related to a combination.

Can you just repeat that for me operator go ahead.

I guess the question was was the idea of combining Ken Lockwood considered as one arm of the pivotal study.

I see okay. Thanks for that question. So I'll take the question on inside of the emotion that as Matt just to speak to 31, 2016 and expectations here in the second half for the a combination dose escalation data. So first Daniel with respect to insight the data that we presented at the ESCO plenary.

Series assertion just last month, and we of course disclosed at the beginning of the year, we view as being very very clear very compelling in terms of the activity of Ken lock in this group of patients relative to <unk>. So as a result, we did not consider adding a third arm to the study looking at a combination because we don't believe that occur.

Combination.

With <unk> in particular would add any additional activity in the selected group of patients with respect to motion. We were very pleased as we announced today that we'll be reaching full enrollment in the motion study in quarter, one instead of quarter. The first half of this year still reporting out in quarter four of this year.

The enrollment in the study as we've been Telegraphing over the course of the last six to nine months. So we've been really pleased with the pace of enrollment how enthusiastic investigators and patients are to enroll in the study and its really that enthusiasm and the pace of enrollment that allowed us to enroll the study faster than we previously anticipated.

Fated and it's going to allow us to get to full enrollment at full enrollment here in this first quarter. So we look forward to reporting out the study in quarter four of this year, Matt do you want to speak to the 31 16 question.

Yes, Hi, Daniel it's Matt So yes in regards to the 316 program as you know ESMO last year, we were able to present, the monotherapy dose escalation data and we're very pleased with our results showing that we had good dose proportional PK. There, we're having very good safety profile and also we're able to inhibit the target.

A tough AG in patients treated with 31 16, so as we announced earlier as well taking that forward into combination escalation cohorts with two <unk> as well as the <unk> inhibitor so their asset so.

As we've announced we will expect to have an update on the combination cohorts in the second half of this year and our expectation there will be to continue to show the PK as well as the safety profile of the drug and in terms of efficacy you know certainly it has designed this dose escalation in small cohorts of patients of course, if there's a signal of efficacy we would be very.

Pleased to have that information for updating in the second half later this year.

Okay got it one last question.

Multiple <unk> inhibitors in development.

And on the market as you continue development of 201 six is there an opportunity for you to select the best fit partner.

As you advance into late stage development.

Yes. Thanks for the question Danielle with respect to <unk> inhibitors, and Youre right. There are a variety of agents now to approved in the U S and as we've reported previously the effect that we see with 31 2016 addressing autophagy as an escape when used in combination with a <unk> inhibitor is not specific to an individual <unk> inhibitor.

It's certainly a class effect, it's a mechanistic effect that we see so we've seen that in our reported that pre clinically both with <unk>, but also with that aggressive so there would be an opportunity going forward for us to consider additional pay rescue 12 see combinations as we think about the ideal partner for a potential 31 16 <unk> inhibitor.

Accommodation.

Great. Thank you very much.

Please standby for our next question.

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

Hey, good morning, guys. Thanks for taking our question. This is Paul on for Michael.

One from us on recruitment for the inside study.

Your analysis suggest that only a portion of gestation of detectable kit mutation with <unk> and there is some discussion that the outcome plenary about just is at relatively low CTO DNA shedding cancer. So just wanted to get your expectations on the speed of recruitment of patients for this target mutation population that insight once that study later this year and whether you anticipate any.

Sort of challenges in that aspect and then secondly on 316, maybe just provide some color on what drove your decision to combine with <unk>.

And where do you see that potential for the combination in colorectal cancer.

Yes, hi, good morning, Paul It's Steve So I'll take the insight a question that you posed and then ask Matt to speak to the 31 2016 <unk> been Cetuximab combination. So first with respect to insight and enrollment in that study. We have now demonstrated very clearly the capability to enroll these large randomized studies in just.

Globally. So we have a clear capability in terms of getting these studies up and running and enrolling them rapidly with respect to patients with this specific mutation that we'll be looking for.

Patients, who don't shed CTO DNA. This is a very similar fraction.

And just versus other solid tumors. So we don't see that as being a differentiating factor and with a simple blood based diagnostic with a rapid turnaround time of five to 10 days, we don't see that as being a barrier at all in fact, we see it as being an advantage to enrolling in the study and then lastly, I would just offer that what we continue to hear from Investor.

Caters and from thought leaders is a considerable amount of enthusiasm at given the data. That's now been reported at <unk> for the potential of can lock in a selected group of patients that I think thats going to serve as a real tailwind in terms of not only getting sites up and running but also getting patients enrolled on study Matt.

Matt.

Yes, Hi, Paul it's Matt So yes in regard to our plan to initiate a cohort of 316 in combination with <unk> and Cetuximab.

Obviously very excited overall with the preclinical data we've generated to date showing that we can inhibit.

Multiple nodes, along the RT K, Ras and map kinase pathway in combination with <unk> hundred 16, and show an additive or even a synergistic combination effect on tumor killing so.

A number of these.

Combination cohorts now and Youre looking at the unmet medical need in treating advanced stage Cologuard colorectal cancer and <unk> activity as demonstrated in the Beacon study a number of years ago that was somewhat limited activities with an objective response rate of approximately 20% and a PFS of about four months. So theres certainly.

A lot of headroom for improvement in treating patients and recognizing this might be a huge opportunity for 31 16 in colorectal cancer.

Got it very helpful. Thanks, so much.

Please standby for our next question.

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

Great. Thank you. Good morning, guys had a couple for you. The first is can you help us understand what the magnitude of the onetime reserve for <unk> sales in Germany was an elaborate more on your expectations for the cadence of ex U S sales throughout the year.

And the second is <unk>.

You presented an extensive claims analysis, but what other data points give you confidence in this market given that patients are so diffused throughout the country.

Fairly concentrated in centers of excellence.

Yes, good morning, Tyler Thanks for the set of questions I'll ask Tucker to comment first on the reserve in Germany Margarita, Perhaps you can then comment on what you see is the cadence in terms of the commercial business across Europe , and then Dan why don't you take the final question with respect to themselves in a claims analysis and the confidence we have in the size of the opportunity Tucker.

Sure. So we haven't quantified the amount of the reserve in Germany that we took in the fourth quarter, but just to remind folks what happened is that the chairman authorities in November changed the law. It used to be that you had a 12 month period of free pricing.

And that got shortened to six months.

Effective retroactively based on the law changed in November so in the fourth quarter.

We took a reserve based on the net sales we had looked at our free pricing price in the third quarter and then in the fourth quarter. The sales in Germany were booked at an estimate because we're still not at our final price in Germany, but an estimate of where we think we may end up with the German authorities on pricing. So we haven't quantified it but.

It certainly was.

The larger number in the quarter that we wanted to make sure people understood that as they looked at the quarter over quarter change in international product sales.

Okay I will take the second one thanks Tyler for the question. So I would say that the cadence for the rest of the year in Europe will come from <unk>.

Two key strategic drivers. The first one is to continue to successfully drive pricing reimbursement in the concentrated we don't have yet access so that you can launch in new markets.

In the future and the second one I would say to continue to successfully execute on our launch strategy and continued to raise awareness to drive demand and to expand the prescriber base and I would also offer to sit and say that I am extremely pleased with the success that we're seeing so far and with the strong demand that you continue to see.

And Tyler this is Dan Martin I'll take your question on.

What gives us confidence in the <unk> market.

I think what gives us confidence to several factors first you mentioned the claims analysis that we presented on that was just a component of our overall analysis of the opportunity.

We actually conducted a couple of different methodologies all of which gave very similar answers we conducted a more typical sort of literature based.

B buildup and totally separately, we conducted the claims analysis.

And both resulted in really similar findings.

Findings in terms of the overall patient journey for <unk> as well as the size of the addressable opportunity.

We.

Rates to the claims data the 300 1400 patients that we have noted as being the incident Rx treated patients in the U S. In this dataset, we've always viewed that as really a floor of the opportunity and one that gives us real confidence because this is an analysis that doesn't provide.

Indicators of patients it actually sees the patients and so we can see these patients being treated in the data.

Which gives us great confidence lastly, I would just note that.

One of the things that we get asked.

It is our view of sort of products used in the space and market share and we've presented the findings from a claims database there as well showing.

And that only about 15% of the.

Patients received <unk> and admins dataset and that enables us to.

Sort of triangulate, our crosswalk back to the opportunity that we've laid out so across multiple different.

Use of the market.

We landed very similar places, which gives us great confidence that the opportunity is there lastly, I'll just note that.

Diffuse markets with patients being.

The spread between both academic and community settings, as a bit of a specialty of ours, we've developed real capability.

And being successful in that space, because that's very much. The description of just just as very similar in that way and frankly, one one more point is that we know that the overlap between <unk> and <unk> is really high so for all these reasons, we have great confidence that.

Market is there and that we're uniquely positioned to be successful.

Thank you very much.

Please standby for earn next question Jenny.

Our next question comes from and Yang with Jefferies. Your line is now open.

Thank you.

Tony for your question first.

You mentioned that in 2022, the Tim migration kinlaw within seven months and expected that to increase to $88 five months, what's driving the increase in the chairman of the duration and do you expect to achieve eight five months at <unk>.

Second question is on the CCN guidelines.

I don't know if this is something and I understand it is something that we cannot predict.

But.

You have submitted your data for second line Jay good data, but in light of the subgroup analysis <unk> exon 11, 17, and 18 patient population.

Do you expect in CCC.

So Tim decision could it be on that subgroup. Thank you.

Yes, hi, good morning. Thanks, Thanks for the great questions. So I'll take the second question first with respect to end CCN and then I'll ask Dan to cover off on the treatment duration for Ken lock that we see in the real world experience in the U S market.

So first for NCC and Youre exactly right and it's not something that we can predict in terms of.

Whether the <unk> is going to update the guidelines side when that might occur or what might be reflected in the guideline update we were excited to present the data from the subgroup as part of the ESCO Plenary series session. Just last month, a very compelling data in this group of patients.

With catalog. So we're excited about that I think the field is very excited about it as you will have seen from the presentation and the discussion at the <unk> session at the end of January and so we await as you do any potential updates to the guideline is difficult for us to predict and what shape or form or timing that might be and so we'll stay tuned for that and see if there are any updates.

Yes. Thanks for the question regarding average duration of therapy is.

Really important dynamic that was key in driving the really solid growth that we saw year over year.

As I noted in my remarks prepared remarks, we demonstrated about 20% growth year over year with $97 million in the U S. In.

In 2022 and that was driven.

By a number of factors, but importantly by volume growth and the volume growth was driven principally by this.

Increasing average duration of therapy that we see and the driver for that is really just a maturing of the real world persistency curves or said another way maturing of the real world sort of prevalent treated pool that now more fully reflects patients who have had extended and prolonged.

Benefit.

From Kinloch, which just pulled the average duration of therapy now beyond the median PFS that we saw.

In the Invictus study.

And that's really important because we expect that to continue to be a gradual.

Gross driver over time.

Had noted we expect that could potentially reach eight to eight five months and theres a number of proof points for that.

Which I could certainly go into but we feel confident that ultimately 888 to eight five months average duration of therapy is very achievable.

However, we have noted that that's a gradual phenomenon.

Our gradual trend that we will expect to see develop over time. So it's hard to predict exactly what timetable that will develop and that's why we underscored we see that as a peak average duration of therapy.

And we don't expect that to be something that changes.

Dramatically quarter to quarter, so likely something that we will share additional color on sort of as warranted overtime.

Thank you can I ask you some follow up questions.

Please go ahead.

Yes, so a question on the inside trial.

Based on the subgroup analysis.

One from the intrigue.

It looks like you may need to screen about four to 500. The patient. So question number one is how long do you think it would take.

<unk> robot 54 patients and secondly.

In the currently in practice is different mutational analysis after imatinib.

Lee Thank you.

Yes, thanks for the two questions. Good question. So I'll take both of those so first with respect to the insight study youre right sites will need to screen patients for eligibility for enrolment in the study.

Our experience with intrigue, which we ran as a large global study multiple sites. We have the capability of course and have demonstrated the capability to run. These large studies to opened multiple sites to find patients for enrollment at the site level of course, we know that.

We know that physicians will be using ade and easy the liquid diagnostics or liquid biopsy, where they simply draw blood and Theres a five to 10 day turnaround time to identify patients and Furthermore sites will know generally the primary mutation status for their patients already from their time of diagnosis. So we would expect that physicians would really be interested in.

Looking at their primary exon 11 patients of course and understanding what their secondary mutation profile as they consider them for enrollment in the study. So we have a lot of confidence based on our demonstrated capabilities. In this area of running these sorts of studies and we're looking forward to getting insight up and running at the end of this year now with respect to practice within the <unk>.

So globally even.

There isn't a need hasnt been a need to up until now for physicians to consider looking at the emergence of secondary mutations post imatinib treatment, but what we know from other analogues, whether it's looking at lung cancer or other solid tumors is that these sorts of liquid biopsies. These these blood based diagnostics.

Very good adoption as I noted these are easy to run its simply a tube of blood that sent off to a lab with a 5% to 10 day turnaround time. So we don't expect especially given the nature of the data that we have now presented with Ken lock in this group of patients. We don't expect adoption of a diagnostic to be a barrier to use.

At all in fact, we think there'll be a considerable amount of enthusiasm among physicians and patients to understand what their secondary mutation status is so they'll know whether Ken lock it could be an option for them in the second line setting.

Thank you.

Please standby for our next question.

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

Thanks, Tim and good morning. This is Nicole <unk> on for Chris Thanks for taking my questions.

Maybe just two from us.

One just in terms of using Cte DNA.

Potential companion diagnostics for patient identification I guess can you talk about how that would be integrated at the subset analysis data is included early and TTM guidelines.

Maybe first is that can you get regulatory approval in the second line kit exon 11.

Betty.

Are there any differences just in the setup I guess, we're trying to understand if it's important to have a clear there.

The diagnostic and the setting and then maybe second just around.

Going back to your as no presentation last year I know that you guys are highlighting that responses deepen overtime, but.

The 'twenty hybrid timeframe for Vince Felton and match the <unk>, we understand that the safety profile will be the key differentiator, allowing patients to stay on therapy longer, but yes, how will that be effectively captured within the phase II study and how does that translate into your potential label.

Good questions Nicole Thanks for those so let me take first the CTO DNA question, and then I'll ask Matt just to comment on the motion study.

The data we presented last year at ESMO and touched on the data we're collecting as part of motion that would then inform a label and the profile of the drug in a commercial setting upon a potential approval, but first for the Cte DNA data and just today and I think your question Nicole was in the present day environment, even absent a regulatory approval for <unk>.

And this patient population.

What could physicians do in practice, we know that of course these sorts of blood based panels are already available. So from companies like Foundation Medicine, Guardant health and the like and so physicians today. If they were so inclined you could draw a tube of blood and send it off to foundation or to garden for analysis and these these pan.

So today, we will pick up the secondary mutations seen in just patients and report back on that so physicians if they.

So chose to do so they could run that analysis, and then make treatment decisions.

Which would be off label today. So this isn't something that we can or would promote to physicians could then make treatment decisions and they would have to work with the patient's insurance provider to obtain coverage for that off label use but I guess my point is just that these diagnostics are available today for physicians, who are interested in understanding the secondary mutation status.

For their patients.

You want to comment then on themselves to live in motion yes.

Yes, good morning, Nicole So yes, as you know for the 25 week endpoint in the <unk>.

<unk>.

<unk> study.

We had a 38% response rate, which was similar to what was reported for the <unk> study and in their label, but also as we also note. These.

Patients continue on therapy for longer than six months and can have a response beyond that and we reported for the phase one dose escalation cohorts, who are on study the longest of 69% overall response rate and the TCT patients within the phase <unk> study and in terms of the label.

It's also noted that enlightens label are paced diagnose label basically 11 study also shows their overall response rate and the open label portion of the study and that 61% and the current label for <unk>. So we could expect that our label for consultative may contain some longer term follow up and the higher.

Higher overall response rate.

Great. Thanks.

Please standby for Eric next question.

Our next question comes from Brian <unk>.

<unk> with Stifel. Your line is now open.

Good morning, and thank you, Steve maybe a follow up on your previous comments I guess I wanted to based on the paywall and physician feedback to the subgroup analysis do you expect a material enough proportion of practices to adopt a second mine CTO DNA guided treatment paradigm in the next few years to impact <unk> sales.

And then a second question with the top line readout for himself and slated for <unk>. When would you think about the degree of data that you would include in the package to the FDA is successful can you add any comments about how long you expect it to take to reach an NDA filing. Thank you.

Yes, Thanks, Brian two good questions, so with respect to expectations around.

Taking the data that we presented at <unk> and that being translated or changing practice today.

Uncertainty so of course, we can't promote to that use.

We don't have extensive market research that tells us whether physicians will adopt the use of the drug on an off label basis, what we've seen so far in our experiences that use has been for Ken lock has been generally within our approved label. So we will continue to monitor and understand how physicians if they choose to change practice, how that practice changes over time.

But we don't have any information at the moment with respect to.

What changes might occur clear.

Clearly, having a label in the second line setting in this patient population is what will ultimately allow us to drive share and drive utilization and that is one of the reasons that we decided to conduct the <unk> study and seek a label in second line is to be able to promote to that use upon approval.

Your second question I think Brad was related to themselves and our announcement. This morning that we expect to complete enrollment in the first quarter of this year and readout. The study in Q4 and your question was around the timing for a potential NDA. So it's really premature for us.

To share our thoughts around what the timing could be for an NDA post topline readout, what I can say is that our team has demonstrated.

Certainly we can lock in our fourth line label, our ability to quickly move from topline data readout to get a filing and this will be no different and when we have a readout of the study of the topline results I'm sure we'll be in a position at that time to offer some additional color around what the timing could be for a potential filing in the U S and filings outside of the U S.

Yeah.

Okay.

As a reminder to ask a question please press star.

Our one one on your telephone.

Please standby for our next question.

At this time.

Please standby for our next question.

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

Great. Thank you thanks for taking my questions.

And TCA guideline.

Ladies.

<unk> guideline inclusion.

Exon 11 17 to 18.

Yes. Thanks for the question Peter with respect to the NCC and so we're going to continue to monitor what end CCN decides to do with respect to any guideline update and that will guide our decision about any future submissions of data. So that's the approach that we plan on taking with respect to as you see on going forward.

Got you.

Thanks, Ellen 11, 17 18 days.

Baird.

Mutations.

Thank you.

So I will just the second one.

Okay.

Difficult volatility.

Make the judgment call.

Yes, I think what we've learned Peter from from the analysis is that there is a level of complexity and nuance I think to the data I mean, certainly the 11 17 ATM population. The results is very clear in terms of Ken lock the benefit of <unk> versus Sunitinib and we have this group of patients in whom CTO DNA is not detectable, where we see on the forest.

Plot the hazard ratio for PFS is virtually in the center of that forest plot. So I think it is unclear at the moment, what LCC and might choose to do we know that physicians generally are interested in having more options available to treat their patients and we don't think that this situation with just as any difference. So we would expect that that will be.

Of interest of physicians on the panel as they think about providing options to patients going forward.

Got you. Thank you and then just on China, just because of the.

The size of the opportunity.

We should think about pricing power.

Good.

Revenues that relates to.

It's 23.

Sure Margaret or would you like to address the China opportunity and Zeiss disclosures.

Absolutely. Thank you. Thanks for the question Peter So we viewed these leasing very positively as it will increase affordability and access for Chinese patients moving forward. So we do expect this to be a key contributor of volume growth overtime.

That happens, we do not have a lot of details yet, but all in all we view these extremely positively.

Thank you so much.

Thank you Peter.

I show no further questions at this time I would now like to turn the conference back to Steve Herbert for closing remarks.

Great. Thank you Michele thanks to all of you for joining us on today's call. Thank you for your continued support of the work that we're doing here at <unk>. We look forward to keeping you updated on our progress for the balance of this year and hope you have a great rest of your day.

Yeah.

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

The conference will begin shortly to raise and lower Johan during Q&A, you can dial star one one.

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