Q4 2022 CTI Biopharma Corp Earnings Call
This conference call is being recorded.
I would now like to introduce your host Remy Bernarda.
<unk> Investor Relations. Please go ahead.
Good morning, everyone and thank you for joining us on the call today before we begin. Please note that during this call we will be making forward looking statements based on current expectations such statements are within the meaning of the safe Harbor provision of the private Securities Litigation Reform Act.
1995, including but not limited to the types of statements identified as forward looking in our most recent annual report on Form 10-K, and our subsequent periodic reports filed with the SEC, which are available on our website in the investors section.
Such forward looking statements, which are indicated by terms such as expect intend and seek represent our views as of the date of this call.
Not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward looking statements, including many that are beyond our control.
These statements include our expectations regarding cash runway timing to profitability market adoption of Bongo and the future success of our product launch in.
In addition, any forward looking statements represent our views as of today and should not be replied relied upon as representing our views as of any subsequent date, while we may elect to update these forward looking statements in the future. We specifically disclaim any intent to do so even if our views change.
For further description of these and other risks and uncertainties that may cause actual results to differ materially from those expressed in the forward looking statements as well as risks risks related to our business.
Please see our periodic reports filed with the SEC.
On today's call, we have Dr. Adam Craig President and Chief Executive Officer, and interim Chief Medical Officer, David Kirstie, Our Chief Financial Officer, and Jim Fong, Our Chief commercial officer.
After formal remarks, we will open the call for your questions I would now like to turn the call over to Adam.
Speaker 1: update following the recent release of portfolio revenue by our Royalty financing partner.
Speaker 1: I want to start the call today by reflecting on the achievements we've made over the past year as we've transformed from a research and development organisation to a fully integrated biopharma with a strong commercial presence.
Speaker 1: In the first quarter of last year, we received accelerated approval from the FDA for Vonjo procrutinib for the treatment of adults with myelofibrosis with a platelet count below 50 x 10 to the 9 per litre.
Speaker 1: This approval launched our commercialization efforts.
Speaker 1: and we are extremely pleased with our progress to date.
Speaker 1: We generated 54 million in net sales in just the first nine months of commercialization, exceeding our internal year-end revenue goal, and in the process treated over a thousand patients with Bonjour in 2022, a meaningful achievement for a rare disease such as MS.
Speaker 1: Jim Fohn will elaborate on our commercial success in just a moment, but I'd like to spend a little time talking about the new data presented in December at the ASH Annual Meeting in New Orleans by Dr Stephen O of Washington University.
Speaker 1: In his oral presentation, it was shown that procrutinib is a potent active in A receptor type 1, or ACVR1 inhibitor, that has potential to provide a significant anemia benefit in patients with cytopenic myofibrosis.
Speaker 1: ACVR1 mediates hepcidin production and its inhibition is thought to lead to improvements in transfusion independence and anemia in myelofibrosis patients.
Speaker 1: NEMIA is common in MF both at diagnosis and during therapy and it's a poor prognostic factor.
Speaker 1: Almost all MF patients will develop anemia over the course of their disease due to disease progression and or drug toxicity from other approved JAK inhibitors.
Speaker 1: Dr. O's presentation highlighted several key findings related to pukritinib.
Speaker 1: In vitro data demonstrated that Pecritnib inhibits ACVR1 at 4 times greater potency compared to MoMoLoftNib, with 24 hour inhibition of the target.
Speaker 1: It was shown in vitro to reduce head siding levels.
Speaker 1: The clinical data demonstrated that treatment with Vonjo at the approved dose of 200 milligrams twice daily led to improvement in transfusion independence and anaemia when compared to best available therapy, which included ruxilithinib.
Speaker 1: in invaluable patience treated on the phase 3 persist to study.
Speaker 1: Over the last year, we have worked hard to establish the Von Dro franchise in the commercial space.
Speaker 1: To this end, we have filed for patent term extension for our main composition of matter patent that if granted would extend this term by five years would expect the expiration date of 2034.
Speaker 1: And last month, FONDRO was granted seven years of orphan drug exclusivity by the FDA for our label indication that began in February 2022.
Speaker 1: As we enter our second year of commercialization for VONJO, we are focused on generating quarter over quarter product sales while providing the best care to patients with cytopenic myelofibrosis.
Speaker 1: With that, I'll now hand the call over to Jim.
Speaker 2: Thank you, Adam, and good morning, everyone. As I look back on 2022, I'm extremely proud of my commercial team and our medical affairs colleagues who have led a successful launch for VONGO, a novel JAK-2 ACVIR-1 IRAC-1 inhibitor. We achieved many accomplishments over the first nine months of launch.
Speaker 2: highlighted by the team exceeding our internal revenue goals and reaching the milestone of treating over 1,000 mollifibrosis patients.
Speaker 2: Looking ahead, we are very encouraged by the continued double-digit sales growth our team is producing.
Speaker 2: Today I will provide a bit more context on these numbers as well as provide a snapshot of what we are seeing so far in 2023.
Speaker 2: We completed a strong sales performance with a 16% quarterly sales increase in Q4 and continue to show strong launch momentum in the quarter across several key metrics including consistent growth in new patient starts, substantial increase in the number of active patients on Bonjour, significant growth in new MF prescribers and accounts.
Speaker 2: a strong and expanding refill order rate, and increased awareness and interest in Vanja's hematologic staging profile for anemia and thrombocytopenia.
Speaker 2: To maintain this trend, we continue to focus on educating our existing and new prescribers on the benefits of Vonjo. Throughout 2022, we have conducted approximately 200 peer-to-peer education programs, reaching more than 2,300 healthcare professionals.
Speaker 2: Due to these efforts, physicians are becoming increasingly aware of VODJO as an important treatment option for MS.
Speaker 2: The scientific and clinical rationale for VONJO is resonating with providers, and they are recognizing cytopenic MF as a different disease that requires a different therapy such as VONJO. As a result, the number of VONJO new prescribers and accounts continues to grow, and a high proportion have become repeat users.
Speaker 2: Although my commercial team can only promote use consistent with the FDA approved label, we are seeing utilization, the utilization of Vonjo evolve. In Q4, market research indicates approximately 50% of current Vonjo use is in patients with political accounts at or above.
Speaker 2: 50,000 per microliter compared to only 33% in Q3, with the majority of use coming from second line patients.
Speaker 2: This change is likely related to the increasing awareness of the NCCN recommendations for VonJil. In addition, we are seeing growth of VonJil as a first-line treatment as well as an overall increase in duration of therapy.
Speaker 2: As previously mentioned, our physician user base continues to expand with broader adoption and penetration. The success of our market penetration is evidenced by the fact that the number of community physicians prescribing Bonjour has now exceeded physicians in the academic setting.
Speaker 2: As we all recognize, adoption of new treatments is typically much slower in the community versus the academic centers.
Speaker 2: With the growing number of prescribers coming from the community, I believe this will translate into increased sales potential for Bonjour over time.
Speaker 2: Our sales momentum has carried nicely into 2023. We have seen consistent sales demand to start the year, and I look forward to updating you in May on our first quarter results.
Speaker 2: In summary, physician adoption is growing due to the increased recognition of Bongio's differentiated mechanism of action and hematologic safety profile for cytopenic MF patients.
Speaker 2: Notably, we also continue to garner increased acceptance from the entire NPN community as a whole, with Vonjo becoming top of mind as evidenced by our continued strong brand awareness among our audience. We expect our highly effective commercial team to continue their progress in 2023, leveraging our robust promotional and educational efforts.
Speaker 2: and maintaining a significant presence at major medical meetings.
Speaker 2: I will now turn the call over to David to discuss our financial results.
Speaker 1: Thanks, Jim. Our financial results for the fourth quarter and year-end 2022 were published this morning in our press release and are available on our website. Therefore, I will summarize our current financial status.
Speaker 1: As Adam mentioned, we continue to increase our product sales quarter over quarter. For 2022, I am pleased to report that we generated $21.1 million in net revenue in the fourth quarter and $53.9 million for the nine months of commercialization exceeding our revenue goals.
Speaker 1: All revenue is entirely attributable to the sales of Vanjo.
Speaker 1: As expected, towards the end of the year we observe some holiday seasonality with our product sales, which is common for most oncology drugs.
Speaker 1: VONGO product sales also provided meaningful reductions in our overall operating loss in the fourth quarter and full year, while we continue investment in SG&A related to marketing and commercialization of the product. Our cash, cash equivalence.
Speaker 1: and short-term investments as of December 31, 2022 totaled $79.9 million.
Speaker 1: Subsequent to the end of the quarter, we received $6.5 million in additional funding from our Royalty Agreement with DRI Healthcare Trust in January of 2023.
Speaker 1: Based on our current revenue projections and expenses, our objective is to be cash flow positive by the end of 2023.
Speaker 1: However, any meaningful changes to our clinical development plans or other transactions would impact this forecast.
Speaker 1: We have an active investment conference schedule over the next several months. We will be presenting on Wednesday, March 8th at the 43rd annual TD Cowen Health Care Conference. And we will also be participating in the Needham Healthcare Virtual Conference and...
Speaker 1: stefal oncology days in April .
Speaker 1: We look forward to these interactions and keeping you updated on our progress.
Speaker 1: I will now turn it back to Adam for closing remarks.
Speaker 1: Thank you David. We are delighted to share our accomplishments on the commercialization of Bunger with you today.
Speaker 1: CTI is now established as the market leader in the treatment of cytopenic MF as we offer simple, safe and effective therapy for patients with an important medical condition.
Speaker 1: For 2023, we are focused on expanding the use of Vonjo with the aim of driving quarter over quarter revenue growth.
Speaker 1: We also continue to explore ways to increase the long-term potential for Bonjour through additional indications.
Speaker 1: This concludes our formal remarks. I'd now like to ask Shannon to open the line for questions. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced.
Speaker 3: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Speaker 3: Our first question comes from the line of Ken Shields with SEB Securities. Your line is now open.
Speaker 4: Thank you and congrats on the great quarter. You mentioned seasonality impacts for 4Q. I'm wondering if you could provide some additional color on this. And then additionally, you've mentioned the 50 to 50 on-label versus off-label population.
Speaker 4: wondering if you have any color on how many of these patients were potentially or the off-label patients were potentially anemic myofibrosis patients who have had higher platelet counts. Thank you. Thank you, Ken. I'll answer both those questions. First of all, we don't have that level of detail on whether the patients who are treated off-label have.
Speaker 4: anemia that's not something we have. With regards to seasonality, the seasonality is really very much what we expected. The last quarter is a busy a busy quarter for holidays, there's also the American Society Hematology meeting, so there's a lot going on that takes doctors out of the office and we experience seasonality in the same way as many many companies do who are in the oncology space.
Speaker 5: Okay, thank you. And then just one more if I can. So, you know, you guys obviously got the milestone from the DRI. Do you have any color on what that threshold was? Was that 50 million and – or additional milestones expected this year? Any color there?
Speaker 5: and does that factor into the cash flow positivity guidance by end of 2023? Thank you.
Speaker 1: Thanks again, this is David here. We don't disclose the details of that milestone payment. It is incorporated into our guidance with respect to our cash forecast.
Speaker 6: Okay, thanks.
Speaker 3: Thank you. Our next question comes from the line of Ben Burnett with CIFIL. Your line is now open.
Speaker 2: Hey, thank you very much. I just want to ask two quick questions. First, where do you see the most ground to be gained over the near term in terms of the Bonjour launch? Is it about getting deeper into the community or are there other aspects of the launch that's a bigger focus? Thank you.
Speaker 2: Hi, Ben. Jim, please. Yep. Hey, Ben. This is Jim. Yeah, so essentially, yeah, we see the growth really coming from the community and continue to expand there. So no doubt that that's the observation we're looking for. And in addition, obviously, we're looking to get – continue to get better prognosis patients.
Speaker 2: in the queue for us as well. Okay, excellent. I guess on that last point, so.
Speaker 2: What are you seeing in terms of duration of treatment? Do you expect this to change over time? So like, I guess in other words, does the initial bowls of patients taking Bonjot, is that representative of sort of kind of what you expect the average patient, the duration of treatment from that average patient to be?
Speaker 2: Yeah, Ben, obviously, you know, we've only had nine months into our launch, so it's tough to really prognosticate on the durations. However, you know, to your point, like any new drug launch, the initial patients are going to be the probably the poor prognosis patients.
Speaker 2: And so the durations typically are parallel to that. However, as we mentioned before, the evolution of the use of Vonjo is towards better prognosis in patients, and we're seeing the durations parallel that.
Speaker 6: Okay, understood. Thanks so much.
Speaker 3: Yep, thank you very much. Thank you. Our next question comes from the line of Gil Blum with Needham. You're on his note.
Speaker 7: Hey, good morning, everyone, and congratulations on the progress.
Speaker 7: Maybe you could remind us how many patients are cytopenic on diagnosis.
Speaker 2: Yeah, so essentially, you said act diagnosis, right Gil?
Speaker 2: Yep. Yeah, so at diagnosis, approximately a third of patients will have platelet comp less than 100,000.
Speaker 2: And at diagnosis, probably about 40% of patients will have anemia without thrombocytopenia.
Speaker 7: Gotcha. And over time that generally increases because of disease progression.
Speaker 2: Absolutely, absolutely, yes.
Speaker 2: In fact, you'll see over time when you look at prevalence data, about two-thirds of patients will upload with CAMP less than 100,000.
Speaker 7: My second question is regarding guidance and I know it wasn't provided in this quarter, but I'm curious as to what Gates, a decision about providing guidance. Thank you.
Speaker 4: Thank you Gil, we're not going to provide guidance at this time. When we're ready to provide guidance we will let you know. One of the factors we're looking at is gross to net at the moment and as we've spoken about publicly the gross to net is still somewhat bearable.
Speaker 4: until it stabilizes we will refrain from providing guidance.
Speaker 7: Thank you, that's very helpful.
Speaker 7: Thank you. That's very helpful. Thank you.
Speaker 3: Our next question comes from the line of Renny Benjamin with JMP Securities. Your line is now open. Hey, good morning guys. Thanks for taking the questions and congratulations on the quarter.
Speaker 7: You know Adam, I guess I'd like to stick with the ACVR1 data that was reported at ASH. I'm kind of curious as to what are the next steps right for the company? Is there any way to you know like what would be required to get this into the label and how do you see this?
Speaker 7: ultimately being utilized from a commercialization effort.
Speaker 4: Yes, well, first of all, the anemia data is a...
Speaker 4: post hoc analysis, so it's unlikely that the clinical data would get into the label. However, the mechanistic data, the ACBL1R, the pharmacodynamic and pharmacokinetic data around that, it may be possible to get into that label and that's something the team is working on.
Speaker 4: Moving forward, it's an important component of our scientific education of physicians through our medical science liaisons. It's not a data set that we, Jim's team, can actively promote but we can discuss it scientifically and in 2023 we are expanding the number of medical science liaisons we have in the field.
Speaker 4: so that we can continue the conversation around the ACB-R1 data. After ASH, we had a lot of inbound interest and a lot of requests to discuss the data with us, and that's why we've increased the number of people who are able to do that. That is the medical science liaisons. Can you just provide some additional color? How much?
Speaker 7: How much would you tell us that the increase will be for MSLs and just kind of reading in between kind of what you said, I just want to confirm you won't be starting some sort of a larger study, let's say.
Speaker 4: you know, to evaluate the anemia benefit, you know, going forward, it would really just be based on the data that's been generated today. Well, the anemia benefit will be assessed in the Pacifica trial. As with respect to how much, I don't have, I don't have a number to give you there.
Speaker 4: Post-ASH, we have had a significant amount of interest in the anemia data. It was a very successful ASH for us, and we've come out of that into this quarter with a lot of questions and activity and discussions around the data. So it was very productive for us scientifically.
Speaker 7: Got it. And then just my final question, can you just talk a little bit about how you're thinking about price increases?
Speaker 7: and how we should be thinking about the first quarter, only because other companies that we follow tend to have...
Speaker 7: increase gross to net right in the first quarter as they try to help patients you know with the resetting of the co-pays and the like. Can you give us maybe a sense as to how we should be thinking about the revenues for the score? We had a price increase at the end of the year. We haven't, we're not going to comment on...
Speaker 6: Sorry, could I just?
Speaker 4: Sorry, I just wanted to know about the first quarter. I'm sorry, I, Ray, I think you asked about the first quarter. We're encouraged. We've had a good start to the year and we're progressing very well, but we'll
Speaker 7: We will be reporting our first quarter results in about eight weeks time. Thanks for taking the question. Wren, I'm sorry, did you ask about the first quarter in terms of price increase or I'm sorry? Yeah, I was more just trying to get a sense like we typically see a decrease in revenues in the first quarter because there's an increase in revenue.
Speaker 7: And so from an insurance perspective, and I just wanted to get your guys' thoughts on how that might impact, you know, Bonjour. Yeah, we're happy to talk about that during the first quarter report call, we can't talk about that today.
Speaker 7: from an insurance perspective. And I just wanted to get your guys' thoughts on how that might impact, you know, Bonjour. Yeah, Ram, we're happy to talk about that during the first quarter report call. We can't talk about that today. You got it. Thank you guys very much.
Speaker 8: Thank you.
Speaker 3: Thank you. Our next question comes from the line of Thomas Flatten with Lake Street Capital Markets. Your line is now open. Hey, good morning. Thanks for taking the questions. Jim, you mentioned that the number of community prescribers had exceeded the number of academic prescribers. I was wondering if you could...
Speaker 3: characterized patient starts or total patients along those lines as well. Has that is that the same dynamic are you still waiting for more patients in the community's day?
Speaker 2: Yes, so that is the dynamic, correct? So we are seeing the new patient starts growing and that growth is exceeding in the community of those in the academic center. So we're really pleased about that because like I said, it's a really good marker for penetration adoption and uptake of a new product launch.
Speaker 3: Great. And then any comment on lower dose Bonjour prescribing in patients that might be challenged with the adverse events?
Speaker 2: Yeah, we are seeing some of that, no doubt. If there are patients who are frail, that is up to the discretion of the physician. But by and large, the vast majority of Bonjour prescriptions are at the proper dose of 200 BID.
Speaker 3: Got it. And then one quick one for David. There was a pretty significant uptick sequentially in R&D and sGNA. Was that end of year, David, or is that a new baseline we should use going forward?
Speaker 1: I mean that is reflective of our concurrent investment in SG&A. So it's
Speaker 1: You know as revenue continues to drive forward that benefit we are using to invest in commercialization as well as marketing.
Speaker 3: Great. Appreciate it. Thanks, guys.
Speaker 3: Appreciate it. Thanks guys. Thank you.
Speaker 3: Our next question comes from the line of Robert Haslett with BTIG. Your line is now open. Thanks. Congrats on the progress and I have a couple for me. I know you are not forecasting any price increases, Adam, but what was the price increase around your end? Sorry, did you say how much that was?
Speaker 2: Hi Bert, this is Jim Fong. Yeah, it was approximately at 9.9% on January 3rd.
Speaker 3: Okay, okay, great. Thank you. And then just with regard to the anemia data, is there kind of a broader strategy with regard to NCCN guidelines or additional publication that we should be thinking about as we think about kind of the evolution of Bonjour?
Speaker 4: Yes, certainly. We've already submitted some anemia data to the NCCN and it's actually under review but the final data set from Stephen O's work will be submitted once the latest versions are published.
Speaker 4: we're waiting for publication or based on data we submitted last year. Once it's published we can then submit the additional data and we do expect there to be a modification of the guidelines sometime around mid-year with the potential approval of Momolosinib.
Speaker 3: Okay, so, Rick, is there additional IP that's available with regard to anemia for Vongi?
Speaker 4: I doubt it. The composition of matter date IP is pretty robust and with the five-year patent term extension that will take us 2034. I doubt the anemia data will be, will provide anything. It would have to, for additional patent.
Speaker 4: protection or patent filing we'd have to have something that was novel and it probably wouldn't be considered as such.
Speaker 3: Okay, terrific. Just one more for me. There's a material jump in prescriptions and in various metrics. I know that is a hugely blunt instrument, especially with regard to. Products like, but we saw a jump in the January data. Are there other is there anything behind that? I just just would like to make.
Speaker 3: For prescription data, manufacturing, benchmark sales, different data metrics like that to show a pretty pretty material jump and I just want to make sure I understand some of the elements behind that.
Speaker 2: Yeah, Berta, as you've seen, obviously the momentum that was created in Q4 ahead of Q1 is really continuing. And I think the, so we had already again seen robust momentum already started by the end of the year as the messages started to really penetrate our target audience. But I think the oral presentation at ASH, no doubt.
Speaker 2: continue to fuel that momentum that we're seeing today in Q1. Okay, thanks very much.
Speaker 2: momentum that we're seeing today in Q1.
Speaker 4: Thank you. This concludes the question and answer session. I'd now like to hand the conference back over to Adam Craig for closing remarks. Thank you, Shannon, and thank you everyone for joining the call today. We appreciate your continued interest in CTI and we look forward to keeping you updated on our progress.
Speaker 3: Shannon, that now concludes the call. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.