Q3 2024 Arvinas Inc Earnings Call
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Speaker Change: Thank you for spending by. At this time, I'd like to welcome everyone to our Venus 3rd quarter, 2020 for Ernest Cole. All lines have been placed on the list to prevent any background noise.
Speaker Change: After this speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, follow the B&N number on your telephone keypad. If you'd like to withdraw your questions, again, press star 1.
Speaker Change: I will now turn the conference over to Jeff Boyz. Please go ahead.
Jeff Boyz: Good morning everyone. Thank you for joining us. Earlier today we issued a press release with our third quarter of 2024 financial results in a quote, read update, which can be accessed in the investor's section of our website at ourviness.com.
Speaker Change: Joining the call today of John Houston, or been a chief executive officer, President and Chairperson.
Speaker Change: No work with, keep my go after.
Speaker Change: And Andrew's sake, Chief Financial Officer. Angela Kentzi, our scientist chief scientific officer, will join for the Q&A for some of the call.
Speaker Change: Before we begin, I want to remind you that today's discussion will continue forward-looking statements that involve risks on certainties and assumptions.
Speaker Change: These factors are outlined in today's press release and in the company's recent filing with the Security and Exchange Commission which I urge you to read.
Speaker Change: Our actual results may differ materially from what has discussed on today's call.
Speaker Change: Hello, I'm Alfred McCollow, and I'm John Houston, our CEO President and Chairperson. John? Thanks, James. Good morning, everyone, and thank you for joining us for our inaugural Airings Conference call.
Speaker Change: So why are we starting airing calls now? Some six years after I deal. While we have a truly exciting year ahead of us, and we're on the cusp of a huge transition for the company, as we wait our first pivotal data read out coming by the end of 2024, or the first quarter of 2025.
Speaker Change: In addition, we continue to make significant progress with a novel approach to discover, develop, and commercialize a new class of medicines for the treatment of cancers and new diseases.
Speaker Change: As we look now forward to providing update and test quarter as we have posted through our goal of becoming a multi-product commercial stage organization with our bus pipeline across several indications.
Speaker Change: We have a lot to discuss this morning, so I'd like to provide an overview of the topics we'll be covering.
Speaker Change: I'll begin with a brief overview of our vines, our prototype discoveries platform and a not day on our pipeline.
Speaker Change: No one will then provide the overview of our expectations for the very contact 2 trial and the stuff that are confident in the combined ability of a better design or vet day with other metastatic breast cancer treatments. And finally, Andrew will provide an overview of our third quarter of financial highlights.
Speaker Change: I'll add some closing remarks, including what we believe is the opportunity for bad day, both as a combination and more therapy, before opening the call for Q&A, where I'm as Jeff mentioned, we'll be joined by our Chief Scientific Officer, Angela Kasey.
Speaker Change: In the 11 years since our founding, we have taken major strides towards our missions to improve the lives of patients with serious diseases.
Speaker Change: Our pipeline of pre-alcest target in Caneras or Protagon protein integrators have been designed to harness the body's natural protein disposal system to selectively and efficiently the grid and remove disease-carving proteins.
Speaker Change: This groundbreaking protein-vervitation platform has enabled us to create an exciting pipeline, driving some of the most significant breakthroughs in targeted protein-devivation in the industry.
Speaker Change: These breakthroughs include designing the greatest, with drug-like properties that are all-elibia available, and when needed, able to cross the blood-vrain barrier. Very soon, we'll have in hand the first ever phase three data reload for a prototype.
Speaker Change: While the majority of our call this morning will be focused on our programs with debt dig, we will also briefly cover the advances we've made with our other clinical programs. In future calls, we will provide a deeper dive into our exciting pipeline that spans and call, orgy, and neuroscience.
Speaker Change: Our most advanced program, Vectag, is an orderly viable close-night protein-degree, specifically designed to target and degrade the estrogen receptor for the treatment of patients with the air positive, air-tune negative breast cancer.
Speaker Change: [inaudible]
Speaker Change: As a reminder, in 2021, we entered a global 50-50 collaboration agreement with Pfizer developing commercialized VED-DEG as a potential next-generation ER-targeting backbone therapy of choice in breast cancer as both monotherapy and in combination with other therapies.
Speaker Change: Together with Pfizer, we initiated the first-ever phase 3 trial with the PROTAC, the VERITAC-2 trial.
Speaker Change: This is a randomized, open-label, multi-sensor trial of VET-DAG versus Fulvestrin in patients with ER-positive, HER2-negative advanced breast cancer whose disease progressed after prior endocrine-based treatment for advanced disease.
Speaker Change: The readout of data from this Pivotal Phase III clinical trial will be a landmark event for Arvinas.
Speaker Change: We are on track to share top-line data by the end of 2024 or the first quarter of 2025 based on timing of events. If positive, these results will support our first new drug application and our potential transition to a commercial-stage company.
Speaker Change: If proven effective, VET-DIG can offer an oral monotherapy treatment in the second-line setting, which could be a promising option for appropriate patients progressing on a CDK4-6 inhibitor-based regimen.
Speaker Change: For context, approved ER targeting treatments provide a few months of progression-free survival in this setting.
Speaker Change: A once-daily oral monotherapy that offers a clinically meaningful improvement in PFS and is well-tolerated could be an important advance for patients and commercially very attractive in a highly fragmented second-line treatment landscape.
Speaker Change: Additionally, we continue evaluating VED-DEG in combination with other agents, including the approved CDK4-6 inhibitors ribocyclib and abemocyclib in the ongoing Phase 1b-2 TACTIV-U umbrella trial.
Speaker Change: We look forward to presenting initial Phase 1b data from the Abema Cycloid sub-study of Tactive U in a poster at the San Antonio Breast Cancer Symposium later this year.
Speaker Change: The Taktiv-K trial, which is evaluating VET-DEG in combination with Pfizer's TDK4-selective inhibitor ateromacyclib, continues to enroll patients.
Speaker Change: I will now turn to our earlier stage programs, where we see exciting potential opportunities for protects across oncology and neuroscience targets.
Speaker Change: First, neuroscience is an area where the unique properties of protact degraders are particularly well suited, especially given the potential drawbacks of other drug modalities like antibodies and antisense oligonucleotides.
Speaker Change: Our most advanced neuroscience program, ARV-102, is a novel oral prototype designed to cross the blood-brain barrier and target leucine-rich repeat kinase 2, or LAP2, which is a large multi-domain scaffolding kinase.
Speaker Change: We have shown that ARD102 achieves deep brain region penetration and degradation of LRT2 in non-human primates.
Speaker Change: We've also observed differentiation from inhibitors by showing improved effects on lysosomal dysfunction and movement of disease-relevant biomarkers in the central nervous system in preclinical studies.
Speaker Change: We intend to explore the potential of ARD102 in two severe neurodegenerative disorders that are linked to LRRK2 dysregulation.
Speaker Change: Progressive supranuclear palsy, a disease with a strong genetic link implicating LARC2 with faster-progressing disease, and Parkinson's disease, where LARC2 has been shown to contribute to the pathology of the disease.
Speaker Change: Earlier this year, we initiated dosing in a first-in-human Phase 1 clinical trial of ARV-102 in healthy volunteers.
Speaker Change: This ongoing Phase I trial is primarily designed to establish the safety of ARV102, but will also measure LRK2 degradation in the periphery of the cerebrospinal fluid, or CSF, to establish the ability of ARV102 to cross the blood-brain barrier and degrade LRK2 in humans.
Speaker Change: The learnings from this Phase 1 trial will be valuable as we strive to address the incredibly high unmet need in neurodegenerative diseases.
Speaker Change: We look forward to sharing initial data for ARB102 in 2025.
Speaker Change: We are also working with the Michael J. Hopps Foundation's Parkinson's Progression Markers Initiative to identify novel LRK2-dependent proteins that are also in non-human primate CSF following administration of ARD102.
Speaker Change: We recently presented at the Michael J. Fox Foundation's Annual Parkinson's Disease Therapeutics Conference
Speaker Change: where we disclose new preclinical biomarker data for ERV-102.
Speaker Change: to our knowledge.
Speaker Change: This is the first dataset to demonstrate that the degradation of LRK2 induces changes in pathway biomarkers of ribosomal function and inflammation in the CSF of non-human primates, an exciting discovery suggesting that the POTAC mechanism may lead to differential outcomes versus LRK2 inhibitors.
Speaker Change: The presentation is posted in the scientific publication section of our website.
Speaker Change: Turning now to our third clinical program, we are also pleased with the preclinical profile of ARV393, a protac designed to degrade B-cell lymphoma 6 protein, or B-cell 6, a transcriptional repressor and a major driver of B-cell lymphomas.
Speaker Change: The BCL6 protein facilitates B-cell tolerance of rapid proliferation and somatic gene recombination through the repression of cell cycle checkpoints.
Speaker Change: terminal differentiation, apoptosis and the DNA damage response which become dysregulated in several types of non-Hodgkin lymphomas.
Speaker Change: Prototype-mediated degradation has the potential to overcome the traditional undruggable nature of BCL6.
Speaker Change: We are recruiting patients with non-Hodgkin lymphoma in a Phase I clinical trial of ARV393 and look forward to updating you on our progress next year.
Speaker Change: Finally, we are preparing to file an investigational new drug application in 2025 for our KMRS G12D program.
Speaker Change: KRAS is a driver oncogene in several major tumor types and is associated with poor prognosis and resistance to standards of care. We are also developing a novel pan-KRAS degrader and look forward to sharing more about this as we progress this promising program.
Speaker Change: With that, I'll turn the call over to Noah for a more detailed overview of the advanced DIP DAG program. Noah.
Noah: Thanks, John, and good morning, everyone. I'm happy to provide an update on the progress we and our partner, Pfizer, have made with our VEPDEC program.
Speaker Change: Let me first note that even with the recent advances in treatment options, there is still a high unmet medical need in ER-positive HER2-negative metastatic breast cancer.
Speaker Change: Despite the availability of multiple therapies, as patients move into the late-line setting, most will experience disease progression within a few months of initiating treatment.
Speaker Change: Also, the tolerability and the route of administration of available therapies may adversely affect patients' quality of life.
Speaker Change: We believe that DEFDEG has the potential to become a best-in-class backbone ER targeting therapy with superior efficacy and tolerability, which could support it becoming a preferred and valuable treatment option for physicians and their patients.
Speaker Change: This is why I'm excited to discuss the VERITU trial, our second line plus phase 3 trial with FDEG, which is on track for a top-line data readout by the end of 2024 or in the first quarter of 2025, with timing driven by a simulation of PFS events.
Speaker Change: The trial is evaluating the efficacy and safety of VEPDED compared with fulvescrent in patients with ER-positive HER2-negative advanced breast cancer.
Speaker Change: The patients enrolled in VERITEC2 have previously received and progressed on a combination of CDK4-6 inhibitors and endocrine therapy.
Speaker Change: Veritech-2 has two co-primary endpoints, progression-free survival, or PFS, in the ITT or intention-free population, and PFS in the ESR1 mutation subpopulation.
Speaker Change: EFS will be assessed by blinded independent central review. Secondary outcome measures include overall survival, anti-tumor activity including the objective response duration of response and clinical benefit rate, and safety and quality of life assessments.
Speaker Change: Although important progress has been made in treatment of metastatic breast cancer for patients who have received prior treatment with CDK4-6 inhibitors, the most recently approved oral agent has an approval limited to patients with ESR1 mutations,
Speaker Change: and has shown a median PFS of 3.8 months.
Speaker Change: The VERITEC2 study of DEPDEG is in CDK46 inhibitor experience patients and was designed to demonstrate a benefit over fulvestrin in both the ITT and ESR1 mutant subpopulations.
Speaker Change: Now, let's discuss our expectations for the VERITEQ-2 trial.
Speaker Change: Based on our study design, we expect to show a meaningful improvement over fulvescens. We look forward to sharing top-line data in the coming months and submitting
Speaker Change: this for review to health authorities. If successful, this may result in the first-ever regulatory approval of a pro-tax degrader and act as the first step in establishing VEFDEG as a backbone ER therapy of choice.
Speaker Change: In addition to the Phase 3 Veritech-2 trial, as John mentioned, we in Pfizer continue to evaluate data from several additional studies.
Speaker Change: to inform the design of the potential phase three combination trials that we anticipate will start in 2025 pending regulatory feedback.
Speaker Change: One is the second line plus setting, and the other is in the first line setting.
Speaker Change: We will evaluate data from TACTIV-U, TACTIV-K, and the study lead-in portion of Veritech3 to inform our decision about which agents can be combined with VEPCIT.
Speaker Change: Preliminary data from the combination of VEPDEG and Abemacyclib will be presented at the San Antonio Breast Cancer Symposium in December. We believe these data will show a manageable safety profile at the full doses of both agents.
Speaker Change: and that the preliminary PK safety and early efficacy will reinforce the potential of DepDeg to be used in combination with standard of care breast cancer agents.
Speaker Change: With respect to other sub-studies within TaxiView, enrollment is ongoing and we anticipate that initial data from the ribocyclic combination will be available next year.
Speaker Change: We expect these data will further show VEP-TEG's potential as an ER backbone therapy of choice.
Speaker Change: We are also making progress in the Phase I-II active case trial, which is evaluating DepDeg plus Pfizer's novel CDK4 inhibitor, a termocyclic.
Speaker Change: We in Pfizer look forward to evaluating data from this trial later this year, which we will use to inform the design of our Phase 3 trial in the first-line setting.
Speaker Change: Overall, we believe ZepDeg has the potential to provide superior efficacy and tolerability both as a monotherapy and in combination for patients with breast cancer who are in need of new treatment options.
Speaker Change: With that, I'll now turn the call over to Andrew for a review of our financials. Andrew?
Andrew Chief: Thanks, Noah. I'm pleased to share financial highlights for the third quarter ended September 30th, 2024.
Andrew Chief: As a reminder, detailed financial results for the third quarter are included in the press release we issued this morning.
Andrew Chief: As we near our first phase three trial readout, we are in a strong financial position with cash on hand sufficient to support our operations into 2027.
Andrew Chief: At the end of Q3, we had $1.1 billion in cash equivalents in marketable securities on the balance sheet.
Andrew Chief: This allows us to progress all of our key...
Andrew Chief: strategic objectives, which include progressing the BEPTEC clinical program, including two expected Phase III programs starting later next year, preparing for our first launch of a commercial product, and advancing our promising portfolio of pro-tech degraders.
Andrew Chief: Let me now turn to financial highlights from the third quarter.
Andrew Chief: During the quarter, we recorded $102.4 million in revenue. That was compared to $34.6 million in revenue for the same period in 2023.
Andrew Chief: The increase of $67.8 million was primarily due to revenue from the Novartis license agreement of $76.7 million, offset by a decrease in revenue from the debt-debt collaboration agreement with Pfizer of $7.6 million.
Andrew Chief: and a decrease in revenue from Bayer of $1.1 million.
Andrew Chief: General and administrative expenses were $75.8 million in the third quarter compared to $22.6 million for the same period, 2023.
Andrew Chief: The increase of $53.2 million was primarily due to the termination of our laboratory and office space lease with 101 College Street of $43.4 million, as well as increases in personnel and infrastructure related costs of $5 million.
Andrew Chief: Research and development expenses were $86.9 million in the third quarter compared to $85.9 million for the same period in 2020.
Andrew Chief: The increase of $1 million is primarily due to an increase in personnel-related expenses of $2.8 million, partially offset by a decrease in program-related expenses of $2.2 million.
Speaker Change: As we embark on a pivotal year for Arvenis, we are focused on making strategic investments in programs that are meaningful to patients and truly differentiated. I'm confident that a strong balance sheet will enable us to accomplish our objectives.
Speaker Change: With that, I'll turn the call back over to John for closing remarks. John? Thanks, Andrew.
John Houston: This is clearly an exciting time for our venus. We are well on our way to becoming a commercial stage organization with strong leadership and a rich pipeline across multiple therapeutic areas.
John Houston: In partnership with our colleagues in breast cancer at Pfizer, we have an exceptional team of experienced leaders who stand ready to bring VepDeg to breast cancer patients in need of new treatments.
John Houston: We believe that the upcoming top-line data from the Phase 3 VERITAC-2 trial will be the first step in establishing VEB-DEG as an ER backbone therapy, first as a monotherapy, and over the next few years in combination with other treatments.
John Houston: Every year, nearly 40,000 patients with metastatic breast cancer are treated in the second-line plus setting, with approximately one-third receiving monotherapy treatment.
John Houston: In the first-line setting, another 40,000 patients are treated every year, and most of these patients will receive an ER therapy as part of their treatment.
John Houston: By establishing VET-VAG as a monotherapy in the second-line plus setting, we have an opportunity to lay the foundation to potentially change the treatment paradigm for many thousands of patients with advanced ER-positive, herpes-negative breast cancer.
John Houston: In addition to VET-DEG, we are advancing a broad pipeline of product candidates across several therapeutic areas, including hematology and neurology, with our PROTAC discovery engine.
John Houston: Before opening the call to your questions, I'd like to thank the patients and physicians who are participating in our clinical trials.
John Houston: I'd also like to thank our talented and dedicated Arvinas team and our partners in breast cancer at Pfizer for the hard work and passion they bring every day. Our progress would not be possible without their commitment.
John Houston: And lastly,
John Houston: I'd like to thank our shareholders for their continued support. With that, I'll now turn the call over to Jeff to begin the Q&A portion of our call. Jeff?
Jeff Boyz: Thanks, John. Before I turn the call over to the operator, I'll ask that you limit yourself to one question per cycle to make sure we're able to give appropriate time to everyone. Feel free to rejoin the queue for any follow-up questions. And with that, operator, can you please open up the queue?
Speaker Change: Thank you.
Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to redraw your question, simply press star 1 again.
Speaker Change: If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: Thank you.
Speaker Change: And your first question comes from the line of Akash Tewari with Jeffries. Your line is open.
Speaker Change: This is Manojan for Agash. Thanks for taking our question.
Speaker Change: So, just one, should investors' base case be that Pfizer moves with their CDK-4 combo with the WebDAQ, not only for the first line, but also for the second line? Why would iBrands or any other CDK-4-6 combination be used at all in your pivotal studies if CDK-4 inhibition shows meaningfully better heme toxicity?
Speaker Change: Thanks for the question. Could you just repeat the beginning of the question?
Speaker Change: Should the base case be like Pfizer moves with the CDK4 inhibitor combo with WebDAG in the first line and like second line?
Speaker Change: I see, so you're asking whether or not our base case should be, in the first line, should be CDK4 plus DebDegestrant.
Speaker Change: Yeah, no, it's a great question
Speaker Change: And clearly, first of all, we're very excited about the fact that our data is right on our doorstep. So by the end of this year, beginning of next year, we'll have our pivotal data. We're also excited by the fact that we have a combination ongoing with the termocyclope.
Speaker Change: Clearly, that's a very exciting asset.
Speaker Change: I think if we end up choosing, as with Pfizer, that that is the combination partner, I think that would be a great step forward. But obviously, we've got data ongoing with our Palbo-Cyclib combination. We'll have that data this year, and allow us to make decisions next year with Pfizer and the combination. But yeah, I think we'd be very excited if the data tells us that the CDK4-Fib-Degastran combination is the right one. We'd be very excited.
Speaker Change: Thank you.
Speaker Change: Next question comes from the line of Brad Canino with Stifle. Your line is open.
Speaker Change: Good morning and thank you for the updates.
Speaker Change: A question for me on the upcoming Obemacycloid combo data, could you help frame that expectation relative to the Pelbo combo data you presented last year, where you had the 11-month PFS
Speaker Change: and a strong response rate, activity in both ESR1 mutant and wild type. Is that the bar as we think about additional DDK combos that you will be unveiling over the next several quarters in these pretreated phase 1b populations? Thank you.
Speaker Change: Yeah, thanks, great question.
Speaker Change: Yeah, clearly we were very, very excited about our data set with the palpable combination. I'm going to hand this over to Noah in a second. The thing to remember is that data set, that was not 100% patients that were CDK4-6 experienced. 86% of the patients had CDK4-6.
Speaker Change: and then 14% didn't. In this trial with Abema Cycloid, when you see this data, it's 100% post-CDK4-6. So just with that caveat, I'll ask Noah to make some comments.
Speaker Change: Sure, so we had the benefit when we reported the results of the palbo-vepda combination last year to have long follow-up of patients.
Speaker Change: And so that's why I think you referenced the median PFS we observed there. But in addition, as you suggested, we were able to look at response rate and safety in that population. So we view this smaller data set that we're going to be presenting from a bemacycline with shorter follow-up as a data set that can inform about the efficacy of the drug, but looking at things like the response rate.
Speaker Change: which can mature further, and similar for CBR. And then on top of it, the safety profile, which will include actually even more recently treated patients and will be a larger data set. And then you can make that type of comparison.
Speaker Change: Bye.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Next question comes from the line of Etzer Daro with BMO Capital Markets. Your line is open.
Speaker Change: Great. Thanks for taking the question. Thank you for the updates today. Just a, you know, question around the fault vestige control arm for VeriTAC2. We've gotten questions on that sort of. If you could maybe frame your expectations and, you know, do you think sort of there's any...
Speaker Change: anything we can read through to the LILI upcoming data sets around sort of, you know, where sort of that, that control arm lands and where, how it actually could perform for VeriTact2, anything incremental on your expectations around that. Thank you.
Speaker Change: Yeah, great question. And again,
Speaker Change: I'll be handing over to Noah just to give you some detail in terms of the answer there. Clearly, the design of our VERITAG-2 trial was based on a standard of care, which was fulvestrant, and still is.
Speaker Change: And our design is to show that we can be superior to full veterans.
Speaker Change: We're also very excited to see what the EMBA-3 data will show when it comes out, and clearly we want to be able to look at the different patient populations there. Again, VERITAG-2 will be 100% CDK4-6 experienced patients.
Speaker Change: And when we look at EMBER3 data, you want to be able to look at that data and then be able to do the kind of like-for-like comparison.
Speaker Change: Noah, do you want to say any more about the vestibular control arm and how that may be compared to what Lily might do? Sure. Thanks, John, and thanks for the question.
Speaker Change: Thank you. Bye bye.
Speaker Change: So, overall, it's difficult, obviously, to predict exactly what we're going to see from the fulvescrin arm.
Speaker Change: We expect that given the prior treatment that patients have experienced, it'll be somewhere in between what was observed in the Emerald study and what was observed in the Post-Monarch study. So we would expect it to be somewhere in the three, four-month range.
Speaker Change: You know, and by comparison, we would.
Speaker Change: I hope to see a few months better for the BEP Deng arm.
Speaker Change: And in terms of your, that second part of your question about Ember 3.
Speaker Change: We don't know exactly what to expect from that. What we'll be looking at is what is the safety and tolerability of that combination and also in what patient population.
Speaker Change: There is some, when you look at the inclusion criteria for EMBR3, it looks like patients who were not
Speaker Change: CDK4.6 exposed could be enrolled in the study. So we'd have to understand the results in the context of prior CDK4.6 exposure to draw any comparison to our study.
Speaker Change: Great, thank you.
Speaker Change: Next question comes from the line of Ellie Merle with UBS. Your line is open.
Ellie Merle: Hey guys thanks for taking my question. So I guess into VeriTech 2, how are you thinking about the potential for success in the non-ESR1 population?
Ellie Merle: and if you could sort of review the reasons you think that this could be successful, and then what do you think is the minimum threshold for success here on PFS to be able to get this broadly across ESR1 and non-ESR1 patients? Thanks.
Speaker Change: Thanks, that's a great question and again I'll be handing over to Noah for the specific answer.
Speaker Change: Clearly, in this second-line plus patient population, we are fighting against the biology of the disease.
Speaker Change: Obviously, a significant part of the disease is driven by ESR1 mutation. We think around 40% of the patients who have tumors that are still endocrine sensitive. And then there's a large group of patients with tumors that have got wild type and other driving mutations.
Speaker Change: And we think a slice of that patient population will also be able to react well to Vipdegastran. So just remember that there's that biology there, the disease that we're fighting against. But yeah, Noah, do you want to be specific about?
Speaker Change: Sure. Not a lot to add there, because I think you addressed it, but I would say that our expectation is, as you know, we have co-primary endpoints in the study. We're looking at the ESR1 mutant and ITT population.
Speaker Change: So, our expectation
Speaker Change: is that we're going to be successful with those primary endpoints. Our base case for what will be approved is the ESR1 mutant subpopulation more than anything else because that's the precedent that's been set at regulatory bodies.
Speaker Change: What we'd have to see, though, in the non-mutated patients.
Speaker Change: would be some type of, you know, I would assume regulatory bodies will want to do some post hoc analysis.
Speaker Change: And we'll be looking at that with them. And we'd want to see some benefit, though I'd remind you that the study is not powered for that population.
Speaker Change: We believe that it would be successful, as John outlined, because the underlying biology of the wild-type population is that many of those patients are still endocrine-sensitive and don't have alternative driver mutations that might limit their responsiveness to VEPDEGA strength. So we remain pretty confident that we can see a positive result for ESR1 mutant and for the ITT population.
Speaker Change: Thanks, Elliot.
Elliot: Great, thanks.
Speaker Change: Next question comes from the line of
Speaker Change: Good morning, this is Yvonne for Derek. Thanks for taking our question. One from us, can you help frame a little bit the market?
Speaker Change: Assuming you hit SAP-seq in both ESR-1 mutant patients and wild-type, and what if you only hit in the ESR-1 mutant patients? Are there any good analogs there?
Speaker Change: Yeah, thanks for the question. And clearly we think there's a significant opportunity here, specifically for monotherapy, then even bigger opportunity as we move into second-line combination and first-line combination.
Speaker Change: I think as I said earlier, nearly 40,000 patients with metastatic breast cancer are treated in the second-line setting. And right now, about a third of them are getting monotherapy treatment. And then in the first-line setting, it's another 40,000 patients that are diagnosed every year.
Speaker Change: the majority of those patients will receive an ER therapy as part of their treatment.
Speaker Change: So, we believe the game plan of establishing
Speaker Change: Vibdigastran and its potential as a monotherapy in that second line plus setting will give us the opportunity to lay that foundation to potentially change the treatment paradigm for those many thousands of patients that have got positive HER2 negative breast cancer.
Speaker Change: And of course, if we can show a PFS in line with combination therapies, we believe we can grow the monotherapy opportunity significantly.
Speaker Change: I just wanted to offer one comment, not addressing the underlying market question, but you had mentioned StatSig for wild type and for ESR1 mutants. So, again, I wanted to remind that the study design is to look at, and we'll be doing, you know,
Speaker Change: statistics on the ESR1 mutant and for the ITT population. We're not doing stats for the wild type subset of the ITT population. I just wanted to make sure that was clear.
Speaker Change: Next question comes from the line of Lee Wacek with Canter. Your line is open.
Lee Wacek: Hey, good morning, guys, and thanks for taking our questions.
Lee Wacek: I guess for the phase three combo trials in frontline and second line, wondering if you can elaborate a little bit on the key regulatory inputs that you still need before you nail down the final design and how much of that is still dependent on the data that you need to generate.
Speaker Change: Thank you for the question. Yes, the question is about the key regulatory thinking in terms of the path forward for our first line and second line combos.
Speaker Change: No, I didn't want to talk to them. So, so again, these are ahead of us. So, after the Veritech two results were, which we're expecting in Q4, Q1, we head into the planning for next year that I think.
Speaker Change: you're alluding to, which is combinations for first and second line. Each of those requires a health authority discussion. You've seen in our guidance.
Speaker Change: that we, you know, heard in our conversation a moment ago.
Speaker Change: that we're looking to combine in the second line with Palbo and or a CDK for another CDK4-6 inhibitor. And in first line, we can be combining with the Termo or Palbo, you know, and we've also shared that we're very excited about that opportunity if we can combine with the Termo.
Speaker Change: So
Speaker Change: There are different considerations for each. It depends on what is the comparator arm for in each of these studies. We haven't announced that, so that would be a discussion point with regulators.
Speaker Change: the exact patient population that's being chosen. And particularly in first line, there's no doubt we'd get into a deeper conversation about contribution of components if we're using two novel agents.
Speaker Change: But we believe that there are a lot of supportive data that will allow us to navigate that discussion. But at this point, that's probably the most guidance we can offer about what the regulatory discussion might look like for combinations in those settings.
Speaker Change: Next question comes from the line of Tad Penthoff with Bipel Tandler. Your line is open.
Tad Penthoff: What's the latest there and how do you and they anticipate Advancing that in prostate cancer. Thank you
Speaker Change: Thanks, great question. Yeah, as you know we did the out licensing of 766 earlier this year and we spent the last several months
Speaker Change: in the process of handing over data, materials, all the information that's needed to get Novartis up and running to progress ARV766.
Speaker Change: Clearly, the excitement for us...
Speaker Change: In terms of doing that, outliers to the thing was Novartis' commitment to go into early prostate cancer.
Speaker Change: and that is the game plan that they still have. So they'll be looking at early and late stage prostate cancer using ARV766.
Speaker Change: And we think, based on the interactions we've had, they're well on track for that. Obviously, now with it being outlicensed, all of the kind of significant updates will come from Novartis themselves, but we are really pleased with how the transfer of information material went, and the game plan that Novartis has actually shared with us on 766, and of course...
Speaker Change: We'll be able to share in the future scenarios for 766 as it progresses and we're looking forward to getting updates from the parties as it does.
John Houston: Thanks, John.
John Houston: Next slide.
Speaker Change: Next question comes from the line of Tazin Ahmad with Bank of America. Your line is open.
Tazin Ahmad: Thanks. Good morning. Maybe to switch topics to ARV-102, can you talk about the size of the PD population that you're specifically examining that have this elevated RRK2?
Tazin Ahmad: And, how are you going to use the biomarker to determine segmentation of the population?
Speaker Change: Thank you for your attention. Have a great day.
Speaker Change: Thanks, Sateen. Great, great question. We have in the room here with us Angelica Casey, our Chief Scientific Officer, and I'll hand directly over to her to talk about the answers to those questions.
Speaker Change: It's a great question. So, you know, the estimated size of the population.
Angelica Casey: that's believed to have elevation of LRRK2 is about a third of the idiopathic Parkinson's disease population, pretty sizable.
Angelica Casey: And so it is still under active investigation how you would actually employ the biomarkers that we've recently described at the Michael J. Fox Foundation Therapeutics Conference.
Angelica Casey: And so, you know, we're partnering with that group, so both the Parkinson's Progression Marker Initiative
Angelica Casey: as well as their LRRK2 initiative to really understand how do you stratify patients. But we're really encouraged by the data that we have that suggests that we can.
Angelica Casey: study both inflammatory markers as well as lysosomal markers to stratify the patients appropriately to conduct a reasonable clinical trial.
Speaker Change: Yeah, and I might build on what Angela said just reminding you that we are currently running
Speaker Change: a study with ARB 102, we completed the...
Speaker Change: single ascending dose portion of the
Speaker Change: Healthy Volunteer Study.
Speaker Change: dose portion, but the take-home message is that in this study, we're looking at all comers, and these are healthy volunteers, so they don't necessarily have elevated LRK2. We're going to move next and look in patients who have Parkinson's disease.
Speaker Change: You heard from Angela, we expect a third of patients will have elevations. There's going to be no selection at the start of that study. But we're going to learn from doing these, from looking at our degradation of LRK2 at various doses.
Speaker Change: the drug and looking at those downstream biomarkers what our overall approach and I think at this point there's a wide open field we can end up being not selective of patients at all or we could end up
Speaker Change: Next question comes from the line of
Speaker Change: Hey, thanks for taking my question. I just had a follow-up on ARV-102 and the Phase I study.
Speaker Change: How should investors interpret the Phase I data in Healthy Volunteers next year? Are there specific PD markers perhaps other than LRRK2 degradation that you're assessing and how predictive are those for potentially improving outcomes longer term?
Speaker Change: Right, so the healthy volunteer portion of the study is really designed to understand the PK, PD relationship of the drug and track what we're doing peripherally and more importantly in the central nervous system, you know, is monitoring the drug and the LRRK2 expression in the CSF.
Speaker Change: We don't expect that healthy volunteers will have elevated downstream biomarkers, you know, that are associated with the neurodegeneration that's seen with this disease.
Speaker Change: That's something that we'll be looking at more confidently, obviously, when we move to patients.
Speaker Change: as opposed to healthy volunteers.
Speaker Change: But I think...
Speaker Change: that what we can walk out of this confident about, you know, if things are successful, is that the modeling that we did to predict dosing of the drug and its impact in the CNS compartment, the modeling we did in the CINOs that is so promising that that can be recapitulated in human beings, that this can drive the right dose selection, and then that sets us up for success when we move to.
Speaker Change: when we're looking for this on-target activity at the right dose in patients with PD. And I think that's quite a lot right there.
Speaker Change: Next question comes from the line of Tyler Byen-Buren with TD Cowen. Your line is open.
Tyler Byen-Buren: Hey guys, thanks for hosting the call. I just want to follow up on your response to an earlier question for the VERITAC-2 trial readout. So if the control flubester in arm does three to four months on median PFS,
Tyler Byen-Buren: and you hope to see a few months better per your earlier comment, or a three month plus delta in the ITT population, or a near doubling. How do you expect median PFS to improve for both arms for the ESR1 population analysis?
Tyler Byen-Buren: Thanks, Tyler. No, do it. Sure. Well, I just want to, going back to the earlier comments, I think what we said, I said part of that, but I'm not sure.
Speaker Change: All of it, you know, our expectation is three or four months in the fulvescens arm, a few months better.
Speaker Change: on the treatment arms.
Speaker Change: We haven't differentiated what we're going to see for the ESR-1 mutant.
Speaker Change: estrogen receptor-driven proliferation for their tumors. So we're not, we just haven't gotten into the specifics or gone through the operating characteristics of the statistical plan. But suffice it to say, you know, a few months better.
Speaker Change: As I outlined
Speaker Change: Next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open.
Jonathan Miller: Hi guys, thanks for taking the question. I'd like to talk more about the VEPDEG combo phase threes that you're talking about getting started next year. Can you contrast Veritac 3 phase 3 portion with these new phase 3s that you're talking about? And it seems like the PR suggests you're focused on Palbo and CDK4. It seems like you're not pursuing Ribo or Abema combos in first line, at least it wasn't called out. So can you talk a little bit about what you're still waiting for from the TACTIV trials to make the decisions about ultimate combo partner A, and B, given the CDK4 combo data you mentioned will be available in
Jonathan Miller: at least this year, for use in deciding about those combination phase three, it's fair to expect that you'd give some key details on the CDK-4.
Jonathan Miller: VEFTA combo data when you decide on a Phase III course, because I noticed you haven't given guidance on when we could see that active K update.
Speaker Change: Yeah, thanks. Yeah, great question, and I think...
Speaker Change: Clearly, there's a number of different trials we have ongoing that are going to generate data that's going to really influence our decision-making. We have Veritag2.
Speaker Change: We have the Abima Combo, we have the Ateromo Combo, we have the Palbo SLI. We also have the Rival Combo ongoing as well. So there's a whole bunch of data that's coming out.
Speaker Change: now and then through into the early part of next year, that sitting down with our colleagues with Pfizer, we'll be able to decide what is the right combination. Obviously, there's preferences there, but we'll wait for the data to actually drive that decision.
Speaker Change: But, Noah, do you want to go into any more of the specifics? Yeah, maybe we could dive in a little more. And thanks for the question, Jonathan.
Noah: The, so where, so let's look at first line and then we can look at second line. So first line, I think the original intent some years ago was to go with a Vestig, Palbo, and first line, and that was an obvious choice.
Noah: Cowboy was the most.
John Houston: the SLI portion of his reading out, as John mentioned.
John Houston: But, in the meantime, we will have the fullness of that data set.
John Houston: but also have now done the work for a termo. And we're very excited about it in a termo combination for the first line because it would be a very differentiating combination. You know, possibly best in class.
John Houston: Cdk4 or Cdk4-6 drug combined with what we believe would be a best-in-class
John Houston: ProTac in this setting.
John Houston: you know, which would be superior to the third alternative.
John Houston: And it would fit perfectly in this partnership as well. So we're waiting for that study, but we weren't considering things like Ribo and Abema because I think they don't really solve for those problems, right? Termo gives us that differentiation and Palbo was ease of use.
John Houston: In the second line setting,
John Houston: We have, we've guided to either using a Palbo combination because we have great results in this setting that we've already shared, or, you know, and maybe offering some choice to prescribers or to investigators in this case by allowing another CDK4-6.
John Houston: you know, which could be...
John Houston: Presumably something like a BEMA, we're not guiding specifically to this.
John Houston: But the idea is that we may end up doing it, you know, and you should just look forward to the San Antonio breast cancer data to make your evaluation of this Abema VEPDEC combination and the viability of that in the second plus setting.
John Houston: What we really like, of course, about all of these opportunities is that Vefdeg is a very combinable drug. While we did see that there was more neutropenia for the, you know, with full-dose Palbo and Vefdeg, in the original data set we performed, we will now be sharing more data about the broad combinability of this drug. You know, you'll see the Abema data set.
John Houston: You'll see some work about better understanding of metabolism with the midazolam study. And then as we've said, next year we'll provide some updates as the data mature for the ribocyclic portion of the Tactive-U as well as the termocyclic combination seen in Tactive-A.
Speaker Change: Next question comes from the line of Paul Choi with Goldman Sachs. Your line is open.
Speaker Change: Hi everyone, this is Khalil calling in for Paul. Thank you so much for taking our question and congratulations on the first earnings call. I guess a quick modeling question from us is, one I guess real quick is, as you have a lot of these earlier stage assets entering the clinic or IND filings, how should we think about the cost ramp for next year, maybe the year after, and then just on the Novartis agreement?
Speaker Change: Given the revenue recognition that you had this quarter, are we correct in thinking there's about 930 million in additional payments, or how should we think about the cadence of that going forward? Thank you so much.
Speaker Change: Yeah, thanks for the question. I'll hand over to our CFO Andrew to answer these questions.
Andrew Chief: Yeah, thanks for the question. Yeah, look, we haven't given specific guidance on our expense structure, and we're not planning on doing that in the near term. Obviously, the mix of projects that we have, programs going out, is changing.
Andrew Chief: Right, so previously the company had the two phase threes. We've out-licensed the one to Novartis.
Andrew Chief: That was done consciously by the company to manage expenses and manage our burn. As we have these other programs coming through the clinic...
Andrew Chief: Clearly, they're going to start costing a little bit of money. We're well aware of what we're going to be spending on them, and we're very confident in the guidance that we've given in terms of cash into 2027 with our current balance sheet.
Andrew Chief: Bye.
Speaker Change: I think you had another question on Novartis. Can you just repeat that? I'm not sure if I heard that.
Speaker Change: Yeah, of course. So just given that, you know, we assume that the $150 billion upfront payment has already occurred, and then you reported today like $67 million or so in revenue from that agreement. Our understanding is that there's a total of, you know, about a billion-ish
Speaker Change: payments that are you know contingent on certain milestones. Obviously those I don't think have been disclosed but we were just you know wondering if you could share any color and how we should think about the cadence of revenue from that agreement like in 2025.
Speaker Change: Yeah, so the revenue that you're seeing on our PML right now is all deferred revenue from the upfronts.
Speaker Change #100: So that doesn't have anything to do with future milestones, et cetera. We amortized the upfront from the Novartis agreement over this year, because that's the period during which we were handing over responsibilities for the trials. And so we still have responsibilities.
Speaker Change #100: With Pfizer, it's much longer.
Speaker Change #100: that's a deal that's a 50-50. So we're actively engaged in that, so we're amortizing those revenues over a longer period of time. So you'll actually see the Novartis drop off this year, the Pfizer will continue on for some years.
Speaker Change #101: Got it. That's really helpful. Thank you so much.
Speaker Change #102: Next question comes from the line of
Speaker Change #103: Thank you for taking the questions and I just wanted to follow up on some of the questions regarding the front line.
Speaker Change #104: strategy in the comments Noah was making on contribution of components. So if it turns out that you pick and you and Pfizer pick a termo plus VEPTEG, are you going to be able to do a trial where it's a termo VEPTEG versus palbo fulvestrin or given the consideration of contribution of components is it going to potentially be more complicated with
Speaker Change #104: including a PALBO VEPDEG arm as well as a TURMO fulvestrine arm. I'm not sure how that would work, if you could comment. And then I'm just also curious if you've generated data today to support the fact that you won't have a DDI with a TURMO.
Speaker Change #104: and VEPTAG. Thanks.
Speaker Change #105: Thanks, you go great great questions. No, okay. I'll
Speaker Change #106: try and tackle this, you know, let's jump in with a follow-up if I missed part of that. So, first of all, so in first line, we're not guiding to the exact design of the study, but I think we're going to be, I think you can be confident that we would be focusing more on an AI combination in that setting rather than fulvestrant, so that's the initial.
Speaker Change #106: Whether it's Palvo alone or CDK4-6-SOIS on the part of physicians, these things are not defined, you know, haven't been, you know, resolved with regulatory authorities yet. In terms of
Speaker Change #106: But I think that's kind of addresses what you asked, is there something...
Speaker Change #106: else? That's related to the design part. Yeah. I think you got a secondary question related to do we have any idea we have a DDI with the termocyclic. I mean what you got what I would say about that is we believe that the data which will you'll start to see from
Speaker Change #106: the San Antonio Breast Cancer Symposium and onward.
Speaker Change #106: will show that the Degastran is the compound that is going to be very broadly combinable with any of the kind of medications in the breast cancer space.
Speaker Change #106: that would include a termocycloid. Clearly in all of the studies we're tracking this now and...
Speaker Change #106: And as I say, the data will come out and show that this is a non-issue from a clinical perspective.
Speaker Change #107: Okay. I appreciate it. Thank you very much.
Speaker Change #108: Thanks, you guys.
Speaker Change #109: Next question comes from the line of
Speaker Change #110: All right. Thanks for the call. This is Bill on for CRIPA.
Speaker Change #111: We were wondering, what's going to be the final deciding factor or maybe factors on choosing which combo to take forward?
Speaker Change #111: Is it strictly on efficacy or is there some sort of strategic IP factor involved too that you're thinking of as well? Thanks.
Speaker Change #112: Well, it...
Speaker Change #113: Obviously, it's going to be based on all the data that we're going to be generating and are generating. As I mentioned earlier, we have ongoing combination trials with BemaCyclib.
Speaker Change #113: with the termocyclib, with ribocyclib.
Speaker Change #113: That type of data, the SLI data and polybocyclic, all of that data will be in our hands until the end of this year, first half of next year.
Speaker Change #113: And that will really drive the data driven aspect of a decision making. Won't all just be looking at the efficacy, or we're looking at safety tolerability. So we'll get a true gestalt view of our overall data set. So I think we'll actually be in an incredibly good position to make a really smart decision about the combinations. As I said, there's clearly we have some biases, but the biases will be influenced completely by the data set.
Speaker Change #114: And I would just add a small point on that when it comes to efficacy
Speaker Change #114: Look, we're sharing data about what we see in the second-line setting, and I think the efficacy there is characterized by things like ORR and CBR. In first-line,
Speaker Change #114: the efficacy that would be at our disposal is probably those, are probably those type of data points.
Speaker Change #114: We're not going to wait for medium PFS, obviously, in first line where you have medium PFSs that can exceed two years. One wouldn't wait for that.
Speaker Change #114: we would use other signals when looking at efficacy, you know, and obviously then safety to make a decision.
Speaker Change #115: Great, thanks. And is there any...
Speaker Change #115: Bye.
Speaker Change #116: Next question comes from the line of Matt
Matt: Hey guys, thanks for squeezing me in. I realize we're at the top of the hour. It's like covering a large cap with the number of analysts here.
Matt: I just wanted to ask about the statistical plan for Veritech 2, to the extent you can tell us, is it hierarchical testing or are the co-primary endpoints, like effectively the alphas split between them?
Matt: between the ESR-1 and the ITT population. And secondly, do you think a 0.7 hazard ratio would be good enough for an all-comers label? Thanks.
Speaker Change #118: Okay, so thanks for the question, Matt.
Speaker Change #119: The, in terms of the hierarchy,
Speaker Change #120: We have two co-primary endpoints and we can win on either one of them.
Speaker Change #120: But for all purposes, we think that the ESR1 mutant is obviously going to be even more likely than the ITT, that's just the nature of the disease where we're treating it.
Speaker Change #120: There is some hierarchical testing that goes on from there, the specifics of which we haven't defined yet. In terms of, what was the second part of the question, remind me? It was about the hazard ratio? Yeah.
Speaker Change #120: So we haven't gone to the specifics of the hazard ratio. I will say that we would expect.
Speaker Change #120: a better hazard ratio or are expecting to achieve a better hazard ratio in the ESR1 mutant than in the ITT population. And, but more specific than that I won't go into.
Speaker Change #121: Appreciate it.
Speaker Change #122: Thank you.
Speaker Change #123: Next question comes from the line of Michael Smith with Guggenheim. Your line is open.
Michael Smith: All right guys, thanks for taking a follow-up. I just had a clarification question regarding your earlier comments on Veritec 2. I think you said you expect about three to four months PFS for ProVestrant in the control arm.
Michael Smith: And, yeah, I was just wondering what are or are there any major differences in enrollment criteria relative to the post-monarch trial where Full Western obviously did much better than that?
Speaker Change #125: Yeah, well, the Fulvestrin didn't do much better than it, a little better. There was four months in the interim analysis and I think 5.3 months in the final analysis.
Speaker Change #126: People are hard-pressed to understand why the median PFS improved, and was there a change in the patient population between those two analyses?
Speaker Change #126: which are both presented at the same time at ASCO.
Speaker Change #126: But the differences are that we have the ability to have patients that were treated.
Speaker Change #126: like with an endocrine therapy twice, they may have had.
Speaker Change #126: an exomestine, let's say, after an initial treatment with a CDK-4-6 and an AI.
Speaker Change #126: So, we will have some patients that are third line, technically, not a lot of patients will be second line, but I think the large majority will be, and they were a pure second line study.
Speaker Change #127: Is that helpful? Yeah, it makes a lot of sense. I really appreciate that clarification.
Speaker Change #128: Thank you.
Speaker Change #128: All right.
Speaker Change #129: Next question comes from the line of Jonathan Miller with Evercore ISI. Your line is open.
Jonathan Miller: Thanks so much for squeezing in my follow-up here. I figured since nobody's asked about it, I'd love to ask one question about the upcoming KRAS.
Jonathan Miller: pro-tech programs that you're working on, the D12D and the PAN-KRS that you discussed during your prepared remarks.
Speaker Change #130: Can you compare these programs to other G12D or PAN-K RAS approaches, and how do you think a degrader is going to be better suited than some of the other approaches, notably the inhibitors? How will a degrader compare to like a RevMed-like molecular glue and RAS approach?
Speaker Change #131: Yeah, great question and thanks and yes we're very excited about our KRAS programs, GWLT and the PAN KRAS and Angela and Noah can discuss the answers to the questions you're posing in terms of the profile and what it looks like in terms of the competition.
Speaker Change #132: Sure. We've been actively comparing both our G12D protact lead degrader.
Speaker Change #132: to the inhibitors that have been described and have shown superiority, and we've disclosed some of those data. But we've been also actively comparing both our G12D and our PAN protoc degraders.
Speaker Change #132: in a range of non-clinical models to examine the known
Speaker Change #132: inhibitors that are out there.
Speaker Change #132: And so, you know, really we're looking really very favorable with respect to our non-clinical profile, and we're very encouraged to pursue these molecules in clinical studies. So I'm going to hand it over to Noah for further commentary.
Noah: Thanks, Angela. So...
Noah: Oh, you know, I guess I can address just the comparative part, but look, we haven't entered the clinic yet. That's forward looking and something we're excited about for next year. But I think what we've seen from the competition
Speaker Change #133: suggest that there still is opportunity. So when we look at the first data, for example, I won't address the revolution, but you look at a cell with this.
Speaker Change #133: KRAS G12D degrader, and we see that there's modest ORR and there are some liver toxicities at higher doses. These are opportunities for us to catch up, differentiate, and demonstrate first in class, which.
Speaker Change #133: would be needed in this space.
Speaker Change #133: And I think we could go through those types of specifics for other agents, but probably a little premature for us right now.
Speaker Change #134: And this concludes our question and answer session. I will turn the call back over to John Huston.
John Houston: Thank you and thanks everybody for calling in to our first ever earnings call and hopefully we'll be able to give you updates over the coming months of the very rich data sets we'll be getting from the various clinical trials. But thank you for your time this morning, appreciate it.
Speaker Change #135: This concludes today's conference call. You may now disconnect.