Q2 2023 Deciphera Pharmaceuticals Inc Earnings Call
Yeah.
Good morning, everyone and welcome to the <unk> Sypher, a pharmaceuticals second quarter 2023 financial results Conference call.
This call is being recorded at this time I would like to turn the call over to Ken Larsen Senior Vice President of Finance and Investor Relations Jim.
Thank you operator, welcome and thank you for joining us today to discuss the pipeline second quarter 2023 financial results.
John Larsen 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.
Martin Chief Commercial Officer, Matt Sherman, Chief Medical Officer, Mark Mader, 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 that are not historical facts are forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Examples include our expectations for our preclinical and clinical programs.
Commercialization of Ken lock and guidance.
Forward looking statements involve substantial risks and uncertainties that could cause 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 other SEC filing.
We assume no obligation to update or revise any forward looking statements.
Following this call a replay will be available on the Companys web site.
W. W. Dot <unk> dot com with that I will now turn the call over to Steve harder President and Chief Executive Officer of just Libra Steve.
Thank you John and good morning, everyone. Thank you for joining us today as we provide an update from the second quarter review, our financial results and look forward to the rest of the year.
Tremendous progress so far in 2023, thanks to the exceptional work of our dedicated team at the site for our commercial business continues to drive strong results highlighted by a record quarter for Ken walk, which generated over $38 million in Q2 revenue.
An 18% increase over Q2 last year, we believe that we can significantly grow they can lock brand by expanding the label to include second line Gist patients with kit exon 11, and 17 or 18 mutations and we are pleased to announce today, an important milestone toward that goal.
<unk> of the first sites for the phase III insight study.
The compelling results of the exploratory analysis of circulating tumor DNA from the intrigue phase III study of Ken walk in second line Gist patients were featured in an encore presentation at the 2023 <unk> annual meeting.
These data continue to generate very positive feedback from physicians, who are eager to enroll patients in the insight study, which is designed to serve as the basis for a supplemental new drug application or smbs.
We're also proud to announce today that we have initiated two new combination cohorts for DCC, 31, 2016, with <unk> and Cetuximab and with regret that.
On today's call, we will share a data update from the 31 2016 program, including data from both the phase one single agent escalation and the initial combination escalation cohorts. We're excited to generate additional data from this potential first in class program targeting the autophagy pathway.
At the American Association of Cancer Research annual meeting in April we presented a poster is on our early stage pipeline, including the first disclosure of our new Pan of kit inhibitor, DCC 3009 for which we expect to file an IND in the first half of 2024.
The data we presented at ACR highlighted the sustained productivity of our kinase switch control research engine and its proven ability to generate product candidates with first and best in class potential.
Now looking ahead, we are moving into an exciting second half of the year as we approach the topline readouts for the pivotal phase III motion study of himself.
<unk> giant cell tumor and the IND submission for DCC 308 for our potential best in class Pan RAF inhibitor.
Now I would like to take a moment to recognize the Dan Flynn, our founder and Chief Scientific Officer, whose retirement was announced last week on behalf of the entire decide for a team I want to thank him for his vision to found our company almost two decades ago, and it's trailblazing innovations and switch control kinase inhibition, which have brought the site for it to where it is today it is.
On an honor working alongside Dan and I wish him the very best in his retirement.
We're excited to welcome Dr. <unk> as our new Chief Scientific Officer next month Dos brings an exceptional background as a leader in drug discovery with over 30 years of experience and joined US decipher from Insight Corporation, where he was most recently executive Vice President and Chief Scientific Officer.
On todays call Dan Martin, our Chief commercial officer will share insights on the U S. Commercial performance for the second quarter and Margarita Duarte, our head of international who will provide an update on Ken locks ongoing fourth line just launched in Europe .
Sherman, our Chief Medical Officer will provide an update on our R&D efforts, including data from the DTC 31, 16 Phase <unk> study finally, Tucker Kelly, our Chief Financial Officer, who will review the financial results from the second quarter first I will turn the call over to Dan and Margarita to discuss our Q2 commercial performance been.
Thanks, Steve Q2 was a record quarter for <unk> in the U S. We achieved launch to date highs in terms of net product revenue as well as many of our core brand metrics.
<unk> net product revenue was $28 9 million second quarter, which represents 17% increase versus Q1, and 22% year over year increase versus Q2.
2022.
During the quarter.
We saw continued momentum in the core drivers of demand, including new prescriber growth, new patient acquisition and average duration of therapy.
Together. These factors drove strong volume for Q2 as demand bounce back from the seasonality driven the softness we saw in Q1.
Additionally, gross to net declining slightly in Q2 versus Q1.
Pos increased slightly quarter over quarter.
Our commercial team continues to execute at a very high level again, delivering the highest reach frequency share of any company is just market and maintaining high awareness and positive product perception for number of academic.
<unk>.
New prescriber growth has continued at a very consistent pace in Q2, we surpassed 1000 prescribers launch to date on.
Our market research and Kols interactions continue to highlight Kim Watkins firmly entrenched as the clear standard of care importantly chips.
In Africa and in June we had the opportunity to sit down with many of the leading sarcoma experts from across the country.
Just kols consistently highlighted there are positive clinical experience with the tremendous impact Q1 has put their patients.
In particular, Kols highlighted kilowatts impressive efficacy and Tolerability, which they noted is a combination that can be challenging to deliver to patients receiving <unk>.
Our rig ramp.
We remain very pleased with our commercial momentum in the U S and look forward to continuing strong execution in the second half of the year.
We expect to see continued growth in demand balanced with modest increase in path.
Consistent with prior years, we expect that five percentage in Q3 Q4 to.
Being near the high end of our estimated range of 28%.
In addition, we expect to see modestly higher gross to net in Q4 related to the Medicare inflation rebates required by the inflation reduction.
I will now turn the call over to Martin <unk>, our head of international to discuss the progress of the two market launch in Europe Margarita.
Thanks, Dan.
We remain very excited with the strength of the international business and the launch momentum off Kinloch in Europe for the second quarter International revenue was $8 4 million up from $7 8 million in the prior year driven by continued volume growth from the successful answered in Europe , and partially offset by a lower monthly pricing chairman.
Following the expiration of the free pricing period in 2022 and by timing of order from distributor markets outside Europe .
Kilowatt continues to be very well received by physicians and patients in Europe based on the high unmet medical need and it's unprecedented benefit in fourth line Gist in Germany, We continue to see strong demand as we work to unlock a significant opportunity in the more dispersed and fragmented community setting.
On the heels of the strong pricing we achieved in Germany. The team continues to work diligently on achieving reimbursement Joaquin walk with authorities in Spain, France, the United Kingdom and elsewhere.
Last quarter, we shared that we expected to launch Kian Lucky in Italy in the coming months and today. We are delighted to announce that we are very close to launch we have successfully finalized the reimbursement negotiation process and are waiting for the publication of the iPhone resolution in the official got that which is the last step before lunch we look for.
I'll have to get the <unk> in the hands of patients in Italy shortly.
Turning to the rest of the World. We are excited that negotiations with the Pan Canadian Pharmaceutical Alliance were successfully completed the agreement supports the public listing on reimbursement of Kinloch by provinces in Canada, and these are major staffing, enabling broad access to Canadian patients with fourth line Gist.
Can you walk is already available in the first provinces and our partner in Canada continues to work with the remaining one two finalized public reimbursement.
Additionally, we are pleased to have recently received approval for Keane lock in Singapore.
All in all these are very positive development and we expect our international revenue to continue to grow and reimbursement agreements and approvals are achieved around the world alongside the growth from our initial launch markets.
I will now turn the call over to Matt to provide an update on our clinical programs.
Matt.
Thanks Margaret.
We continue to complement our commercial success with substantial progress across our growing pipeline of clinical and preclinical programs, enabling safer to solidify its position as a leading oncology company.
There is excitement at all stages of our pipeline from the upcoming topline results of the phase III motion study to start with the insight trial until the opening of cohorts for DCC 3116, and confident about the prospects we have to apply all of our discovery development and commercial capabilities to benefit patients with cancer.
First I'd like to start with our DCC <unk> hundred 16 program 31, 16 was designed to be a first in class backbone combination agents across a wide range of cancers as Steve mentioned earlier, we are excited to announce today that we've opened the first site for two new 31, 16 combination cohorts, when we think of <unk> and Cetuximab and the second with.
We look forward to continued progress as we work to demonstrate clinical proof of concept for the inhibition of <unk> mediated autophagy to treat cancer.
Moving now to discuss updated phase <unk> data from both the single agent escalation and the combination of escalation cohorts.
Our initial clinical update at ESMO last year, we presented data on the first 18 patients with single agent dose escalation part of the study.
Selected the starting dose of 31, 16, or 50 milligrams PID for the initial combination cohorts I will first provide a brief update on the additional data we have generated from our single agent dose escalation that includes 10 additional patients and the full 28 patients single agent <unk> 116 remained well tolerated at doses from 50 milligrams PID.
The 300 milligrams PID with no maximum tolerated dose reached the AE profile was shown to be consistent with prior data disclosed at ESMO 2022, and only one dose limiting toxicity was observed a great three ALC increase at 100 milligrams B I D.
The updated pharmacokinetic profile continued to demonstrate <unk> hundred 16 exposure associated with the cancer efficacy in preclinical combination studies the.
The PK profile showed that 31 16 exposure increase at doses between 50, and 200 milligrams PID with associated variability.
And so does the 300 milligram VIP 31, 16 exposure appeared to approach plateau.
We continue to see Pharmacodynamic effects that were associated with anti cancer efficacy in preclinical studies at.
At the end of last year, we began evaluating 31 16 with two neck inhibitors tremendous and bidding that nib and the <unk> inhibitor. So the rest of <unk> in patients with advanced solid tumors.
As of August 4th 2023, we have enrolled 27 patients in the combination cohorts across a variety of solid tumors.
Dose limiting toxicities were observed at 50 milligrams PID are 31 16 in combination with the approved doses of <unk> <unk> based on these <unk> and the updated PK and PD data from the single agent dose escalation and the preclinical combination efficacy study with once daily dosing of 31 16, we reduce.
The dose of 31 16 to 50 milligrams QD for both the <unk> and <unk> combination cohorts.
And so the rest of the cohort the first dose level of $3 16 at 50 milligrams PID and so the rest of 240 milligrams QD was well tolerated with no <unk>.
We subsequently dose escalated 31, 16 to 200 milligrams QD and enrollment is ongoing.
We expect to have sufficient data in the first half of 2024 to make decisions about opening the mix <unk> expansion cohorts. After we have completed the dose escalation combinations.
We remain excited about opening our two new DCC 3001 escalation combination cohorts and we will continue to follow the clinical data to invest in our REIT expansion combinations to demonstrate clinical proof of concept.
Moving onto themselves and that is in the first quarter, we announced completion of enrollment in the motion pivotal phase III study, which we believe will become the second improved product from our switch control kinase inhibitor platform.
We remain on track to read out top line results for motion in the fourth quarter. We also expect to present updated efficacy and longer term safety data from the phase <unk> study in the fourth quarter. We are strongly encouraged by the compelling clinical data we have generated supporting the potential of themselves to be the standard of care treatment for patients with <unk> non medical to surgery.
Okay.
We also opened the first site for insight a new pivotal phase III study of Kinloch versus Sunitinib in second line gist patients with kidney patients and Exxon's 11, and 17 or 18 and look forward to enrolling the first patients.
This positive we believe the results of the insight study will support an expanded label for Kenmore and significantly improve clinical outcomes for patients based on a more precise understanding of the gist tumors that allows physicians to select the best therapy for their patients.
Lastly, we remain on track to submit an IND for DCC three early for a potential best in class Pan RAF inhibitor in the fourth quarter and another R&D for our new <unk> inhibitor DCC three zeros there of nine in the first half of 2024.
I'll now turn the call over to Tucker Kelly, our Chief Financial Officer to review the second quarter financial results Tucker.
Thanks, Matt total revenue for the second quarter of 2023 was $38 $3 million, which includes $37 3 million of net product revenue and $1 million of collaboration revenue an increase of 18% compared to total revenue of $32 5 million in the second quarter of 2022, including $31 five.
Of net product revenue.
The 1 million in collaboration revenue this quarter was comprised of product royalty revenue under our agreement reside.
Cost of sales were <unk> 2 million in the second quarter of 2023 compared to cost of sales of $1 8 million for the second quarter of 2022.
Cost of product revenue was 100000 in the second quarter compared to $1 million in the same period last year.
In the second quarter total operating expenses were $90 9 million compared to operating expenses of $74 5 million in the same period in 2022.
Research and development expenses for the second quarter were $58 3 million compared to $44 9 million for the same period last year.
General and administrative expenses for the second quarter of 2023 were $32 6 million compared to $29 6 million for the same period in 2022.
We expect quarterly operating expenses in the second half of the year to be consistent with what we saw in the second quarter of 2023.
As of June 32023, cash cash equivalents and marketable securities were $389 4 million and our cash flow guidance into 2026 remains unchanged with that I'll now turn the call back over to Steve.
Thanks for talking to the first half of 2023 was a strong start to what we expect to be a very significant year for <unk>, we made significant strides across our commercial business as well as our early and late stage pipeline and we are now well positioned to achieve important milestones in the second half of the year. We are excited for the top line readout of the motion pivotal phase III study of themselves.
In the fourth quarter as this program has the potential to address the significant unmet needs of <unk> patients and become our second approved medicine.
Additionally, we look forward to enrolling the first patients in the insight pivotal phase III study of catalog as we seek to change the treatment paradigm for second line gist patients with mutations in kit exon 11, and 17 or 18, all while we continue to advance our earlier stage clinical pipeline.
With that operator, I'd now like to open the call for Q&A.
Thank you and as a reminder to ask a question simply press star one on your telephone and wait for your name to be announced.
One moment for our first question.
And comes from the line.
Of Tyler Van Buren with TD Cowen. Please proceed.
Hey, guys. Good morning for the Registrational motion trial reading out next quarter, assuming success, which is likely how quickly can you file for TCT and.
And as a follow up or a related question.
Specifically should we look forward to from the phase one two update expected.
Next quarter relative to what we saw last year.
Yes, good morning, Tyler Thanks for joining thanks for the questions. It's Steve I'll take the first question about the readout and potential timing for filing and I'll ask Matt to comment on expectation setting for the phase one two updates so as we noted on the call. We reiterated our guidance to report out the top line for the Phase III motion study in quarter four of this.
Year.
We're excited to get to that milestone we think the data we presented so far clearly demonstrate the potential for themselves and that to the best in class for the treatment of patients with tennis Pseudoallele giant cell tumor and so when we get to the report out of the top line in quarter. Four we believe we'll be in a position then to provide an update on potential filing timeline of course.
Once we get to the top line report out we will engage with FDA as we usually do in the ordinary course.
Have that conversation with them as we prepare for that potential filing and we're excited about the program as you know because there is very nice overlap with the prescriber base for the existing business, we have with <unk>.
And we think this product has a very high likelihood of being our next commercial products here in the U S and outside of the U S, allowing us to transition to a multi product company.
So Matt you want to comment on the phase one two expectations.
Yes, so good morning, Tyler so in regards to the updated.
For the phase one two study of them start to move into <unk> that we plan to present later this year as you know a year ago, we presented the data at the ESMO 2023, 2022 meeting and that's why we were able to port really a very strong objective response rate for both the dose escalation cohorts and course AMB patients with <unk>.
Previously untreated or treated TCT, so with longer follow up as we saw previously patients may respond so that would be part of the update as well as loan or safety information, but importantly, also again looking at the patient reported outcomes and quality measures that we have mentioned previously both pain and stiffness because those are very important about how patients feel and function.
So there'll be updated data for those as well.
Thank you.
One moment for our next question.
It comes from the line of viewing Yang with Jefferies. Please proceed.
Thank you so comfortable questions one is on <unk>.
<unk> insight trial just to begin.
According to the clinical trials of Dot Gov.
Primary completion is in February 2026, and this is a two one randomization with 10 lakh showing 14 months of PFS.
In phase <unk>. So does this timeline.
Assume about 18 months, maybe 12 to 18 months enrollment period.
And second question.
Tucker.
Tucker.
In terms of a collaboration revenue for this year.
My understanding is currently around $8 million and based on the first half of this year run rate.
What are the kind of a collaboration partnership revenues, if they wish to be expecting a second half of this year aside from Zion lab piece. Thank you.
Hi, good morning, Thanks for the two questions I'll take your first question with regard to insight and Tucker can take your second question. So we were excited as you heard to announce that we've opened now the first sites for the insight study.
And in the conversations we've been having with investigators and with thought leaders. There continues to be really palpable enthusiasm for the study and for this notion of being able to better understand.
Patients the genetic profile of patients' tumors in order to guide therapy interests and as you know this is in essence, the first time.
And just that we were able to advance the field on this way. So we're looking forward to getting additional sites open as we begin now screening and enrollment in the study as we've noted before as we get into a cadence of enrollment we think we'll be in a much better position to provide updates on when would you expect to get to full enrollment in the study.
And when we might expect the study to read out so I would use the Cte dot Gov listing.
It was really I would take that with a pinch of salt for the moment until we really get into enrollment having more sites open and we have a better sense of what that cadence of enrollment will be and as I. Just said, we'll provide updates along the way.
So we can share our progress on the study, but we're looking forward to as I said opening more sites and remain enthusiastic about what we hear from investigators who are going to be participating in the study.
The unit's Tucker for your second question.
So as a reminder, collaboration revenue at the moment.
<unk> exclusively of revenue recognized under our collaboration agreement with <unk> labs for Ken lock in greater China. So we recognize so far this year $1 2 million roughly.
The two key components historically for collaboration revenue have been product royalties as well as commercial supply revenue in the first half of this year and particularly in the second quarter. It was really almost exclusively royalty based revenue. So only a small amount outside of that the first quarter was a bit different in that.
It had been taking a price adjustment based on the <unk> listing which happened earlier. This year. So I think we've got a nice quarter for royalty revenue was just under $1 million for XI in Q2.
Haven't brought any guidance as to the balance of the year I think what we'd say is that we continue to expect royalty revenue.
Two to.
The increase over time as they expand the market opportunity in China, and then the commercial supply revenue was more episodic and we don't provide guidance, but from time to time in particular quarters, you may see that as well, but the royalty revenues to be the consistent piece.
Please John does that answer your question.
Thank you very much.
Q.
One moment for our next question please.
It comes from the line of Michael Michael Smith with Guggenheim. Please proceed.
Hey, guys. Good morning, Thanks for taking my questions.
I had one on DCC 31 16.
Yes, it's interesting you mentioned these data.
Ts.
The MIB.
<unk> and <unk>.
And the combination cohorts at 50 milligrams twice a day can you talk about that some more and.
What were some of those <unk>.
Do you think this could be mechanism related perhaps off car again, it's just interesting given assuming the agent.
Dose up to 300 megawatts with well tolerated curious witness anything else going on in that to take.
The combination.
Yeah, Thanks, Michael Matthew I'll take that yes. Good morning, Michael So yeah. As you know we've reported some <unk> in the combination cohorts of 31 to 16 with tremendous <unk> bin just to go back to the data that we presented initially at ESMO last year, and then recently updated today.
The monotherapy cohorts the dose.
The doses of 50 milligrams.
Up to 300 milligrams PID of through 2016 as a single agent was well tolerated there was no.
Theres no maximum tolerated dose identified and there was only one dose limiting toxicity identified.
Asymptomatic reversible ALC elevation in the patient the 100 milligram dose level and then in the combination cohorts with both <unk> and <unk>.
At the starting dose level of 50 milligrams PID, but the standard doses those agents, we did observe a few dlt's.
Interesting, though still to use have been reported in the labels for both of those single agents both of those drugs as single agents. So if you look at the warnings precautions are the most common adverse events are tremendous.
Rash and diarrhea are noted and certainly for bidding.
Cardiac changes in ocular changes are also noted for bidding amendment. So those may be related to the single agent of those steps of those standard of care drugs and of course in a clinical trial setting because the drugs are combined the attributions given to the company to the combination.
So we proceed with the dose escalation.
Cohorts for both the tremendous <unk>.
Bidding and in addition for so the recipe and we're also providing sort of wrestle with 31 16, and we've now escalated to 200 milligrams QD in combination with other acid have not seen any dose limiting toxicities in that cohort.
So in the <unk> inhibitor combinations.
Stepping down to 50 QD, but is then the opportunity then to escalate after that.
Corn is completed.
Yes, so there is per protocol theres opportunities too.
Modified the doses of both <unk>, 16, and or the or the statements care combination drug.
So once we start to.
Complete enrollment in those cohorts and look at the US all the information we will be able to make decisions about the next dose levels that we'll be able to move to and those combinations.
Okay.
And then a question on <unk>.
Obviously, a lot of focus on the motion study completing that in discussing the data, but just curious if you how do you think about potential other indications for <unk> in the future or are there other opportunities that you might be interested in pursuing four the CSF oner inhibitor.
Yes, Michael Thanks for the question that Steve and happy to take that so I think youre familiar with recent reports of CSF oner inhibition in chronic graft versus host disease. As an example, so some recent data with an antibody.
Firming the potential role of CSF, one receptor inhibition in that disease.
In other reports in the literature about a potential role for <unk> inhibitors in treating fibrotic diseases like IPF. So we haven't made any disclosures yet as you know about a potential additional indications that we might pursue with consulting in it but we are very actively evaluating additional opportunities for them.
And at the right time, we'll pull out future disclosures with respect to our plans and the opportunity to broaden the role potentially portland's ultimate to treat a variety of diseases. So.
That's where we stand, but we're pleased to see how the fields continues to evolve and certainly with a profile like we've demonstrated already with <unk> being an oral agent and being very potent and selective we think we have a great drug on our hands, but we want to make sure we explore fully.
Great. Thank you.
Thank you.
One moment for our next question.
It comes from the line of Chris Raymond with Piper Sandler.
Hey, thanks.
I've got just two questions maybe first on Kinloch.
Can you maybe talk about what you're seeing commercially in the second line setting at this point you had.
A pretty strong second quarter print just kind of curious if you can give any color.
<unk>.
As to the second line uptake that might be from the NCC guidelines.
That may be driving that and then a question.
Jim felt nib.
I don't think Theres any suspense.
At least as I talked to investors in terms of meeting the primary endpoint of the motion study, but maybe can you just talk a little bit about what kind of expectations you would like to set.
You've got the dynamic of deepening response rates over time, you've got the 69% at any time point, but this is a 25 week study.
Which one would argue is likely to skew on the lower end.
Some of the stuff you guys have shown so maybe just to set expectations. If you will in terms of what that actual number should be.
When you see the readout. Thanks.
Okay.
Yeah. Thanks, Thanks, Chris Good morning, Thanks for joining us so I'll ask Dan to take the first question and Matt can take the second half.
Before I turn it over to Dan and just say that.
As we said on that in the prepared remarks were really excited about the performance that we saw in quarter, two and the strength of the business here in the U S and the growth that we saw and of course, our continued launch in Europe and opportunities geographically to expand continues but Daniel offer some more color commentary on what we're seeing in the U S business, yes, absolutely. Thanks, Steve.
Good morning, Chris Thanks for the question.
So extremely pleased with our performance and results in Q2 really a record quarter for <unk> in the U S.
Clearly can lock is entrenched as the standard of care in the fourth line setting which.
We continue to be really pleased with.
And importantly, we saw strength across virtually all of our core brand metrics.
This quarter included new prescriber growth, new patient acquisition and average duration of therapy among others.
Regarding your question about could there be growth in the off label.
Setting first I'll just note as we always do that.
<unk>.
Any second line uses an off label use that we can't and don't promote.
And really theres sort of two elements to this one is the $11 17 18 data that we presented at both the virtual <unk> as well as the <unk> annual meeting in June .
We continue to hear.
Excitement.
By Kols around that data they call it potentially practice changing and therefore real excitement for the insight study that we've just announced.
We've opened.
And then the second component that you touched on is the guidelines piece, which is lift.
Listing of kinlaw for patients who.
May be intolerant of Sunitinib and what we hear from Kols there.
It really is an appreciation for having another option, albeit some variation.
Prescriber to prescriber in terms of how common it is for them to have a patient that is intolerant of sutent, but certainly always appreciate having another option. So in terms of what those either of those or both of those dynamics may be having on the business. We think it's still just a bit early.
To be able to discern what impact if any that's having.
It really just a bit early to know certainly something that we'll continue to monitor and Theres. No question that overall, we're extremely pleased with the strength and direction of the business.
Yes.
Yeah, Hi, Chris So this is Matt so.
In regard to Vim Sultanate and TCT.
You noted we're very pleased with the data that we first reported at ESMO last year with really strong objective response rates across all three groups of patients from the phase one dose escalation to the two expansion cohorts and as we noted earlier today two we plan to have an update of that data as well later this year and importantly, it is.
Not only just the regulatory endpoint for approval that we 25, but as we noted previously and as been previously shown with other agents with continued treatment.
Response rates go up and that will be ROIC being important for how these patients journeys will progress because as we know that this is not a malignant disease.
<unk> sub normal life expectancy, even though they suffer from their disease. So.
This will be a treatment will be really important for these patients quality of life with regard to quality of life importantly, as well too as we first reported at ESMO last year patient reported outcomes are really critical to the use of this drug.
This was.
Im missing part of the pace of Darden approval, because they had a lot of missing data in their evaluations of patients, but we have incorporated the quality of life measures, including pain and stiffness and we'll report of those last year as well to patients a great meaningful changes, both worst pain as well as in.
Stiffness in addition.
One of our other endpoints as a range of motion and this is really important as well too.
As for these diseases, not just how patients survive, but importantly, how they feel and function. So there.
The quality of life measures and particularly reenter motion can.
Can be an important secondary endpoint.
We will look forward to speaking to in the future.
Just to build on Matt's comment this is Steve Chris Good question on expectation setting when we reported the data last one the phase one two at ESMO last year. What we noted was that we saw a weak 25 or a six month response rate that was at 38%, but yet as Matt noted we saw additional.
So beyond that time point, so I think when it comes to how this drug ends up getting commercialized assuming success. It will be based on the totality of the data including longer term follow up which is very consistent with how daiichi today.
Markets <unk>, it's based on the totality of the X data as opposed to solely that week 25 endpoint, but we're really pleased with how the product has performed on the phase one two and look forward to reporting out the top line in Q4.
And also one more.
Rent on that question as well too is the duration of therapy is also very important as we were able to report last year and the patients who were in the dose escalation cohorts, who had been on study for the longest we had nearly an 18 month duration of therapy for those patients and with additional follow up that we expect to report later this year too.
Longer follow up for those patients that duration of therapy number also.
We'll report on an updated duration of therapy number four.
For the patients.
Okay. Thank you very much.
Thank you one moment for our next question.
It comes from the line of Andrew Burns with Leerink partners.
Hi, Thanks, and congrats on the progress guys.
Couple from me now that the <unk> phase III trial is opening.
You give us some idea of how long you think it could take to enroll that trial. How many patients do you think you're off the screen to identify one with exon 11 in 17 or 18.
And then.
Question on <unk> nine the Pam today, Jeff.
Another Pan Canadian setback before the company got to minimally efficacious dose because of the HAMP skin.
<unk> thoughts on that toxicity and how it can be dialed out or avoid it and then just to follow up on Michael's question on <unk>.
Sounds like.
31 16.
The reactions were mechanism breath, Toby maybe teekay related or a metabolic issue that's increasing the levels any insights about that.
Andy Good morning, Thanks for joining three great questions. So I'll take the first question on insight and enrollment expectations and I'll also comment on the 3009 question you had and the setback from the other Pan <unk> inhibitor and Matt you name and offer some additional commentary there and then you can take the third.
116 question. So first on insight Andy we were excited to announce today that we have the first sites open for the study.
As Matt has said we continue to hear very positive feedback and excitement about enrolling patients on insight from investigators also from thought leaders and I think really based on their enthusiasm to finally move.
Just treatment into the 20, <unk> century, and be able to better understand what's driving an individual patient's progression and offer a customized treatment for patients. So we're really pleased with the reception to the data that we reported from intrigue in the Cte DNA analysis and also the excitement and reception to the insight study itself as we get.
The study underway, which we now are and start to see enrollment in the study we're going to be in a much better position to offer some perspective and color on what we see as the trajectory for enrollment and when we may reach full enrollment in the study. It's really just too early for us to be able to offer meaningful color or commentary with respect to that but stay tuned rest assured.
We will provide additional update on future quarterly calls as we see the cadence of enrollment in the insight study.
And then for <unk> 009.
We've disclosed we expect to file the IND for <unk> 009 in the first half of next year and you referenced Andy a recent setback from a competitor agent despite.
Despite a lot of sort of promise and expectation that had been created they unfortunately, we are unable to reach exposures that were well tolerated and seeing as noted some significant toxicities, namely.
Palmer plant or with reduced seizure in patients. So for US we have now demonstrated I think our success in designing inhibitors like <unk> can lock we've applied those same skills to our design and selection of 3009.
As our candidate to take forward and we believe based on the selectivity profile that we've previously reported at ACR earlier. This year. This candidate has an even more selective profile then we're pregnant which is regarded as being very well tolerated. So so we're looking forward to getting the IND filed and then getting the.
Struggling to patients in understanding the profile of patients Matt do you want to comment then on the 31 16 question.
Yes.
Thanks, So just to clarify what we were talking about earlier.
Did see dose limiting toxicities with <unk> 16 in combination with tremendous empathy mednet and as I noted those events.
<unk> have been seen with those other agents alone so in the clinical trial setting of course.
A related and this is related to both drugs get both sides of the combined but I noted that the DLT that we've noted.
Been seeing either with tremendous or <unk> alone.
Would that suggest credit's a.
Our PK issuer metabolic this year, increasing the exposure levels of those drugs.
Yes, no no not at all no.
There is no thought that that might have anything to the metabolism of the drugs.
Where PK issues, what I was commenting on that when you see these effects with with the combination it could be due to the single agent alone.
If you use that single agent visa reported.
These are reported.
Safety events adverse events wining some questions in the label.
We don't know we continue to enroll patients from cohort.
And those cohorts and this drove a totality of data that will inform us.
<unk> overall.
Combinability of trading links team with us <unk> inhibitors, but theres no we continue to enroll patients.
Pleased with progress that we've had in the trial. So the rapid cohort continues to enroll as well too. So we look forward to having an update.
Sometime in the future.
Okay. Thank you for this year.
Thank you.
One moment for our next question.
It comes from Brad <unk> with Stifel.
Good morning, Thanks for the questions. Two from me first any changes in the U S inventory you would flag and it's where you versus normal levels and then a question for Tucker and how to think about R&D.
You're pretty close to where you were around $60 million a quarter before the optimization. Following the entry results. So help us understand the puts and takes as you get towards the end of himself to nib study the ramp of insight and you're investing into the pipeline and should we expect continued increase in spend and are you likely to exceed the peak spend that we saw in 2020.
Thank you.
Hi, Brian Thanks for the questions I'll take the first one on inventory and Tucker decade, I can take the second one so bread in the quarter, we didn't see inventory as a significant driver of results. So this was principally driven by strong demand growth in the quarter versus first quarter and versus prior year.
Sure. So Brad Thanks for the question on on the R&D expense. So what we said today is that we had 91 million of Opex in the second quarter 58 million that was for R&D and we expect that the balance of the year will be similar in terms of overall total opex from we saw in the second quarter as you noted.
Kind of a high watermark for R&D was back in 'twenty, one we had $257 million of R&D expense. There based on the results last year were 187 after the restructuring of the portfolio prioritization. So I don't think we will get back to that $2 57. This year and if you can again roll forward, our $58 million roughly.
The second quarter.
And then the balance for 'twenty, four and beyond and really just depend on.
How quickly we can move and success in the pipeline. So we've got a lot of really great things going on in our clinical development area.
Assuming success, we continue to prudently invest in the assets in the right place. So I don't think were getting back there.
This year and the balance of that will depend on the success in the clinic.
I appreciate the commentary congrats on the quarter. Thanks.
Thank you.
One moment for our next question.
Comes from the line of Reni, Benjamin with JMP Securities.
Hey, good afternoon, guys Hi, good morning, guys congratulations on the quarter.
Question on themselves and then can you talk about the <unk>.
<unk> steps.
Maybe remind us when the last patient was enrolled.
When you think the database might be locked in how long it takes from.
A database lock to reporting topline results and can you also remind us.
Is the filing going to be both in the U S and the EU will that be filed.
Simultaneously or is there more data that's required in the EU.
Yeah, Hi, Ryan Good morning, its Steve I'm happy to take those two questions. So first with respect to the timing for the readout of the motion Phase III study as you know we've guided to Q4, we completed enrollment in the study in Q1, which was ahead of schedule. So we were really pleased with the pace of enrollment.
So we as you know the primary endpoint is response at 25 weeks or six months and so once we get to that.
Let's get to that time point for evaluation for efficacy, where they enable to do the work that we need to do to.
Block clean the database and then to be able to analyze data and get ready for the report out. So this is why we've been consistent here in the last couple of quarters and guiding to a Q4 readout for themselves in that study.
And your question with respect to where we May file absolutely of course on the U S. It's our intent to file in the U S and in Europe . You May recall, there are no approved agents to treat tests Adobe Youll giant cell tumor in Europe , and so our goal would be to file in Europe as close as we can to a U S filing so as we get to the.
Readout of the top line of the study in Q4, we'll be in a position to provide some better guidance on filing timeline and how close we think we could make.
U S filing in the European filing, but we know there is significant unmet medical need in Europe . Given the approved agents also of course unmet need here in the U S and our goal is to get the drug to patients who get assuming success as quickly as we can.
Got it and then just maybe as a follow up for 3116 a week.
On track then to report kind of recommended phase two.
Doses by the end of the year and would that be a good.
Point.
Although decisions, especially on on maybe the Permian E.
Combinations or do you really feel that you need to.
Yes.
We lost you there for the last bit of your question I think your question was about timing for getting to recommended doses for the combinations in the existing cohorts. So as Matt noted, we continue to enroll patients across the <unk> and the solar asset cohorts, Matt provided I think I really couldnt update in terms of what we've seen.
So far both from the updated.
Phase one monotherapy dose escalation data, but also the initial combination dose escalation data. We also noted in the prepared remarks that we now expect that in the first half of next year, we will have sufficient data to make decisions around potential expansion cohorts.
And which we might pursue and of course, we will continue to be guided by the data and the science in terms of which expansions we might pursue. Meanwhile, we were also really pleased to announce today that we now open the first sites for the new combination dose escalation cohorts. One of those is with our very under <unk> as you know and the second is the result.
<unk>.
Clinical supply and collaboration agreement with Pfizer for <unk> and Cetuximab combination. So we were pleased to get those sites open for enrollment for those two new cohorts. So we continue to make good progress and we think we'll be in a position as I said in the first half of next year now to make decisions about the potential expansion.
Great. Thanks for taking the questions.
Thank you.
A moment.
Our next question.
He comes from the line of Peter Lawson with Barclays. Please proceed.
Hi, Good morning. This is Jay on for Peter Thanks for taking our question I just wanted to get a bit of a better sense on the organic growth for U S versus ex U S. Maybe you could just speak a little bit more to the volume growth in these two components. If theres any one timers, we should be thinking about with the stocking orders any pricing benefits and just a follow up on the second line component.
Is there I appreciate that it's still early but is there any metrics you can point to that suggests uptake here or any metrics you would look to provide in the near term that might give a little color a little more color on the second line of bank. Thanks, So much.
Yes, hi, good morning, it's Steve Thanks for the Great set of questions. So I'll ask Dan to talk about to answer your questions about the U S business and the growth that we saw in Q2 versus Q1 and versus last year, and then Margherita can comment on what we're seeing in the international business.
Yeah. Thanks, Steve So sure thanks for the questions.
In the U S really strong quarter that we had was driven principally by demand volume. So you asked.
Kind of understand how it breaks down volume versus price.
The 22% year over year.
Growth that we delivered in the quarter for net revenue was driven largely by growth in demand and that comes from several sources average duration of therapy being a really key one that we've talked about previously we continue to feel as though.
That will continue to gradually increase we've said previously that.
It was about seven months on average in 2022, and we expect that to.
Gradually grow to eight to eight five months and we continue to believe Thats very achievable. So demand was the primary driver in the U S. During the quarter.
So for international markets, let me start by saying that it's very exciting to continue to see the strength of our launch in the first marketing international and to see all the progress that we're making with regards to market access to unlock new countries, which will allow future launches on Italy, and Canada a great. Recent example.
So we are going from strength and we expect our international revenue to continue to grow in the future keeping in mind that Q3 tends to be typically a softer quarter driven by summer holidays as we saw last year.
Overall, <unk> is very well positioned for growth, especially as new markets come online, which will be soon to kw.
Peter does that answer your question I'm sorry.
Answering your question.
Great. Thank you so much.
And ladies and gentlemen, I will conclude the Q&A session now ill turn it back to Steve harder for closing remarks.
Great. Thanks, Carmen and thanks to everyone for joining us on today's call and thank you for your continued support we look forward to keeping you updated on our continued progress here at <unk> Hope you have a great rest of your day.
Thank you all for participating in today's program you may now disconnect.
[music].
Okay.
[music].
Sure.
Okay.
Yes.
[music].
Yes.
Yes.
[music].
Okay.