Q2 2019 Earnings Call
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Thank you have a great day Mouse conference call.
Today, our claims to Gal, President and Chief Executive Officer, Robin Taylor, Chief Commercial Officer, Todd Simpson, Chief Financial Officer, and Roger Dancy, Chief Medical Officer accompanying today's conference call, our supporting slides, which are available on our website in the investors section events and presentations page.
Following our prepared remarks today will open the line for questions. We ask that you limit yourself to one to two questions to ensure we're able to get to everybody during our call today.
Today's conference call will include forward looking statements regarding future events or the future financial and operating performance of the company such as those among others relating to the company's 2019 financial outlook, including anticipated 2019, ADCETRIS sales in future revenues costs and expenses.
And the company's potential and anticipated timing to achieve future clinical and regulatory milestones, including data readouts regulatory submissions and approvals actual results or developments may differ materially from those projected or implied in these forward looking statements.
Among the factors that may cause such a difference include the difficulty in forecasting sales revenues and expenses and the uncertainty associated with the pharmaceutical development and regulatory approval process.
More information about the risks and uncertainties faced by Seattle Genetics is contained under the caption risk factors included in the company's periodic reports filed with the Securities and Exchange Commission, including the company's quarterly report on Form 10-Q for the quarter ended March 31 2019.
Now I'll turn the call over to clay.
Thanks, Peg and good afternoon, everyone.
In the past few months, we have delivered on several important goals focused on growing our flagship brands et cetera, and continuing our evolution into a multi product oncology company. Our late stage portfolio includes Enfortumab dotan, which has been submitted to FDA for approval in metastatic Urothelial cancer based on the positive outcome of the easy to a one trial.
In addition, we are advancing to other programs in pivotal trials.
Two cabinet in her two positive metastatic breast cancer.
And to sodium epidote metastatic cervical cancer.
I'll begin with some comments on et cetera, which is an important global product for the treatment of lymphoma.
Under our collaboration with Takeda. It is now available in 73 countries in the US and Canada, We reported record ADCETRIS net sales of $159 million in the second quarter up 18% from the first quarter of the year.
This growth was mainly driven by increased utilization in front line peripheral T cell lymphoma.
There were there was also increased use in frontline Hodgkin lymphoma.
In addition, these results reflect second quarter strength that we have previously seen with ADCETRIS.
We will provide more detail on our commercial progress later in the call.
Outside the us we and our partner Takeda are continuing to expand the approved indication for Tetris.
In frontline Hodgkin lymphoma, we received Canadian approval in May and to Qaeda recently received approval in a third key country outside of Europe and Japan.
This triggered a milestone payment to us of $7.5 million.
To date, we've achieved a total of $118 million in milestones under our collaboration including $47.5 million related to frontline Hodgkin lymphoma approvals in Europe , Japan and key countries.
For frontline PTCL, we submitted our approval application to health, Canada in May and Takeda also plans to submit frontline PTCL for approval to the M&A and other health authorities this year.
Next is enfortumab, vedotin or ebay, which were developing in collaboration with Astellas.
Today, we announced the BLA submission to the FDA for accelerated approval of you'd be in metastatic urothelial cancer based on results.
From the tool one studies.
The data were featured in an oral presentation at ASCO and selected for an ESCO press briefing.
We are encouraged with the positive reception to these data by the physician community.
In anticipation of potential approval, our launch preparation is rapidly advancing.
He is positioned to become our next marketed drug and if approved will expand our commercial portfolio beyond hematologic malignancies into solid tumors.
We are working closely with Astellas to advance and expand the clinical development program for EBITDA, including in first line metastatic Urothelial cancer, Roger will recap the TV to a one results as well as the clinical development plan during his remarks.
We're also advancing two other solid tumor candidates in late stage development. These include two catnip in her two positive metastatic breast cancer and to sodium abdomen with TV and metastatic cervical cancer.
We expect to report topline data from the two cabinet pivotal trial called her to climb later this year and from the TV pivotal trial called innovative tool for in the first half of 2020.
Lastly, I want to highlight the first FDA approval from one of our technology licensees policy or polo to sum up the dotan isn't AIDC developed by Genentech that target Cdseventy nine B. It was approved more than two months ahead of the PDUFA date for patients with relapsed diffuse large b cell lymphoma Genentech is conducting several additional trials of Bolivia, including in frontline DLP PCL.
Among several other collaborators that use our technology GSK is advancing and AIDC in late stage development targeting CCMA.
This AIDC has climbed and BTD designation and GSK has stated that they are planning a regulatory submission in the second half of this year.
At this point.
I'd like to introduce our Chief commercial Officer, Robin Taylor, who joined Seattle genetics in May.
Robin was most recently asked at Astrazeneca and before that he spent more than 17 years at Genentech.
He has contributed to the global commercial development and strategic marketing of several successful oncology drugs.
His skills are well suited to driving our global commercial presence, including the planned launch of VB as well as other potential drugs emerging from our pipeline such as to cabinet.
We are pleased that he's joined the team.
Robyn.
Thank you clay.
Im tremendously excited to join sale genetics of this transformational time.
I was drawn to the company based on the strong leadership team the innovative science and the clear focus on patients as demonstrated by the continued investment in new indications for et cetera.
And the exceptional late stage pipeline.
This is an important time for the commercial organization with the planned launch of ABB and pivotal data anticipated for to cabinet later this year.
Let me turn now to our second quarter results at Centrus net sales in the US and Canada were $159 million in the second quarter, an increase of 30% compared to the same quarter in 2018.
For the first half of 2019 et cetera sales were $294 million a growth rate of 35% for the first half of the year compared to the first half of 2018.
We attribute the growth in Q2 to three main drivers first we have observed continued strong uptake of et cetera, plus CHP insert cdthirty expressing PTCL following the US approval of this indication in November 2018.
This is driven by the positive echelon two data, including the overall survival advantage that showed a 34% reduction in the risk of death compared to chop.
Second we have seen continued growth of et cetera in stage, three and four frontline Hodgkin lymphoma.
This reflects a positive reception to the three year PFS data from echelon, one trial reported ASCO.
In addition, there has been an increase in patient engagement with growth in unique visitors to our online resources and downloads of the ask your Doctor brochures.
This encourages patients to ask their physicians about all available options for frontline treatment of Hodgkin lymphoma.
The update to the NCCN guidelines in April 2019 May also contributed.
And third we have historically observed the strongest sequential growth between Q1 and Q2 for ADCETRIS with continued but more moderate growth in other quarters of the year.
Based on these historical patterns, we are maintaining our guidance of full year 2019, as citrus net sales in the range of $610 million to $640 million.
Finally, we are actively preparing for the commercial launch of Enfortumab Vedotin with our partner Astellas Salesforce hiring is very close to complete and we are beginning training activities to ensure that we are fully prepared for launch.
Having participated in multiple successful oncology drug launches over my career I have been pleased with the depth and rigor of the preparations of the commercial team at Seattle genetics to date.
I am confident that we will be ready for the launch upon FDA approval.
Let me turn now to Todd to provide the finance update.
Great. Thanks, Robin and thanks to everyone for joining us on the call. This afternoon.
So today I will summarize our financial results for the second quarter and year to date as well as provide two updates to our financial outlook for the year.
Total revenues were $218 million in the second quarter and $414 million for the year to date in 2019.
This included record ADCETRIS net sales in the us and Canada of $159 million in the second quarter and $294 million for the first half of the year.
Growth in 2019, primarily reflects the frontline label expansions in Hodgkin lymphoma, and PTCL and the other dynamics that Robin described.
Royalty revenues in the second quarter of 2019 were $23 million compared to $21 million in the second quarter of last year for the first half of 2019 royalty revenues were $39 million compared to $36 million in the first half of last year. We expected set first royalties to increase throughout the year as Takeda sales grow and as increasing sales trigger higher royalty rates.
As a reminder, royalty revenues in 2018 included Takedas portion of third party royalty obligations paid on et cetera, some of which expired in 2018. Therefore, despite the increases in sales by Takeda royalty revenues grew at a lower rate while cost of royalty revenues decreased.
Going forward royalty revenues will also reflect amounts earned on net sales of collaborate to receive such as Pahlavi. However, this did not contribute to second quarter results and is not included in our guidance.
Collaboration revenues, which includes amounts earned under our subsurface collaboration with Takeda and our ADC deals were $36 million in the second quarter and $81 million for the first half of 2019. This included the earn portion of $13 million in milestones achieved in the second quarter and $43 million in the first half of 2019, most notably by Junin text recent approval of Pahlavi and Takeda is approvals et cetera, some frontline Hodgkin lymphoma.
R&D expenses were $164 million in the second quarter and $322 million for the first half of 2019.
The increases over 2018, primarily reflected investment across our pipeline primarily on our late stage programs BV catnip and TV.
SGN, a expenses were $82 million in the second quarter and $163 million in the first half of 2019.
These increases reflect commercial efforts to support et cetera.
Frontline indications as well as costs related to our late stage pipeline programs.
We ended the second quarter with $376 million in cash and investments. This is in addition to $107 million in immunomedics at the end of the second quarter. These shares are mark to market, which causes variability in our financial results and is not core to our business.
These results are this resulted in a noncash investment loss of $43 million for the second quarter, which was slightly higher than a similar non cash gain in the first quarter.
Lastly, I want to highlight two updates to our 2019 financial guidance first on revenues given the recent milestones under the Takeda and Genentech deals we are increasing our guidance for collaboration revenues to a range of $110 million to $125 million.
And secondly on SDMA expenses in anticipation of the BLA submission announced this morning, we proceeded with hiring substantially all of the Enfortumab Vedotin UL sales organization.
As a result of this we are increasing and narrowing our guidance for SDMA expenses to a range of $335 million to $360 million.
Our other guidance remains unchanged now I'll turn the call over to Roger.
Thanks, Todd and good afternoon, everyone.
As clay mentioned the positive EBITDA one pivotal trial results were featured isn't all efficient at Esko in early June .
And the also part of the subsequent based of ESCO program.
Among metastatic urothelial cancer patients, who received both the platinum regimen and the PD one PDL one inhibitor.
The confirmed response rate was 44% by blinded independent Central review, including a 12% complete response rates.
For context single agent chemotherapy, which is the current standard of care in this setting shows limited activity with response rates of approximately 10% with complete responses we have obtained.
Responses in the B two one were observed across all patient subgroups, including those with liver metastasis, and particularly poor outcomes.
The median duration response with clinically meaningful.
Six months.
Eddie was tolerable with a manageable safety profile. The most common treatment related adverse events included fatigue and on PC.
Decreased appetite rash and peripheral neuropathy.
Notably the results are consistent with the earlier phase one experience in the same heavily pre treated patient population.
Based on these results, we and as Dennis has submitted a DNA to the FDA seeking accelerated approval of easy as a reminder, we have breakthrough therapy designation in this patient population.
The remarkable activity of EDI monotherapy in patients with multiple achievement and instead of giving a theyll cancer provides substantial development opportunities for easy to address a wide array of unmet knitting.
Our LP development plan is focused in four key areas first enrollment is ongoing in the second cohort of the 80 to a one trial of metastatic urothelial cancer patients supersede the PD, one or PDL, one treatment, but are in eligible for psus platten and our platinum naive.
Second the ongoing confirmatory randomized trials 301, which is intended to support global regulatory submission continues to enroll well.
Third the ongoing easy one to three trial, which combines eating with Pembrolizumab endo platinum chemotherapy in the first line metastatic setting. This is the precursor to a frontline randomized trial and we expect to report data from the tough timberlands in that cohort later this year.
And for both trials are being planned in earliest stages of urothelial cancer, such as muscle invasive bladder cancer as well as other action for expenses.
I'll move on now to the Centrus, which was the subject of numerous presentations at Esko as well as the European Hematology Association and the International conference on the link in funding. These things across these three Congresses, we reported on several important dataset first we showed that with an extended follow up in the echelon one trial. The PFS benefit treats interest plus ABT determined by investigators was maintained the three a PFS was 83.1% compared to 76% in the ABVD on a difference of 7.1% importantly, consistent improvement in PFS observed among patients treated with the us interest regimen across the majority of pre specified subgroups, including disease stage and prognostic score.
Second analyses of several trials, including echelon two showed responses in non hodgkin lymphoma patients across all levels of CD 30 expressions. These data support the notion that there may be no specific expression level required for efficacy.
And third multiple abstracts, highlighting the activity of ADCETRIS in combination with nivolumab, including in Hodgkin lymphoma primary mediastinal B cell lymphoma importantly at Centrus customer funding have was recently added to NCCN treatment guidelines for second line Hodgkin lymphoma.
Lastly, we're now initiating additional trials of its interest that May result, in Lebanon expansion, two of which I will mention today.
One trial will evaluate reaching for the interest in Hodgkin and T cell lymphoma patients who progress after a prior response, including in patients who received its interest in the first line setting encouraging data once we treatments in the relapse refractory setting have been previously published.
We're also initiating a trial of its interest in Hodgkin lymphoma, and PTCL patients, who unfit for combination chemotherapy either due to old age old entities. This is an area of high unmet need.
We believe that generating data for enabled indication is important for physicians and patients.
We also expect to initiate additional label, enabling and practice informing trial and we will keep you posted as our plan to win.
Next I'd like to briefly highlight the status of our late stage programs to Catherine for such an event.
Both of which are administration trial.
To cabinet as a potentially best in class oral tyrosine kinase inhibitor that targets too we are conducting a randomized pivotal trial called hill to climb in heavily pretreated hertwo positive metastatic breast cancer, including patients with brain metastasis patients in this setting have a poor outcome with standard of care treatments third to climb enrollment is complete and we continue to expect to report the top line results for the primary endpoint of PFS later this year.
We're also initiating this phase two randomized trial of to Catholic in combination with Tdm, one compared to Tdm one alone in the second line metastatic hertwo positive breast cancer setting. The primary endpoint is PFS with a key secondary endpoint of always with this trial, we aim to ensure to show improved outcomes combining to cabinets with a home to a DC, which is a well established standard of care in earlier lines of breast cancer.
Data from a published phase one trial support evaluating this combination.
To supplement production or TV is an ADC targeting tissue factor that we are developing in partnership with Jen Matt. We are conducting a pivotal phase two single arm single agent trial in women with recurrent or metastatic cervical cancer, where there is no standard of care and outcomes uplift.
The primary endpoint of the trial has confirmed objective response enrollment is complete and we are following patients for response assessment and importantly durability of response, we estimate reporting topline data in the first half of 2020 if positive the trial could support a regulatory submission the FDA.
HUD approval mechanism.
Now I'll turn the call over to clay.
Thanks, Roger we've accomplished much in the first half of 2019 and the second half of the year is poised for many additional activities that are important to our goal of bringing drugs to patients in need. These include first continuing to establish et cetera, as the standard of care in frontline Hodgkin lymphoma, and frontline PTCL and initiate clinical trials for further expand et cetera label second work with FDA on our exhibition in collaboration with Astellas reported initial results from the first line the one or three trial and expand the redevelopment program with several new trials.
And third report topline data from the two cabinet.
Pivotal trial her to client later in 2019 and advanced TV pivotal trial in cervical cancer towards topline data in the first half of next year.
Im excited by the progress, we're making with et cetera at Fordham abdomen and the rest of our product pipeline. We will keep you updated on our progress on our progress at this point, we'll open the line for Queuing day operator, please open the call for questions.
Thank you, ladies and gentlemen, if youd like to ask a question you may do so by pressing the star key followed by the digit one on your Touchtone telephone.
Star one for questions. Please make sure the mute function on your phone is turned off so the signal can be read by our equipment.
Start one for questions, we'll pause a moment to assemble the queue.
Well take our first question from Kennen Mackay with RBC capital markets. Please go ahead.
Hi, Thanks for taking the question for the team first off congrats on the quarter I was just wondering if you could help us understand the decision not to increase guidance here I asked because given the recent price has been et cetera is it seems like you'll squarely be within your guidance with zero growth and with only 3% sequential quarter over quarter growth in Q3 and four.
The upper end of guidance, which seems quite doable is there anything we should be reading into here and also on that topic. I was just wondering if you could help us understand the etc inventory in Q2.
But there may be a week or two of stocking here given the June 20th price. Thank you.
Thanks, Kevin Thanks for the question, so when we think about et cetera.
You could say.
Really important brands, it's growing as a brand and us growing international.
And we're pleased with what we're seeing.
We reiterated the guidance.
And please note, we're giving annual guidance were not giving quarterly guidance that we did while we were in the middle of getting frontline approvals and.
So we were reiterated six tend to fixed 40, which is 30% over 2018.
And so it's a strong guidance and.
We're trying to be as accurate as we can we have a range there.
And we have good connection with docs.
And.
Our three year PFS data would be one was particularly important.
And you two data was spectacular you know that not only with PFS, though Wes.
But Q2 is typically strong.
Now.
Looking out into the future is really hard to know exactly what we're going to get.
You know its hard work out there we're continuing to displace.
Decades old standard of care that are entrenched in the marketplace.
And we're working hard and we like what we see a lot.
We still feel that our products are growing and that's our guidance indicates that and I would just say too.
Stay tuned and we're out there in full force our commercial teams doing well and we're really connecting with docs.
Thanks, So your second part.
Okay. My second question.
Kennen.
You know we have really.
No evidence that there's really any stocking as you call. It the end of the inventory.
We really don't see that.
So we.
We know that there are some big cancer Center stage.
More vials and the small cancer centers, because they treat more patients, but that's not really stocking. So we don't see any evidence for stocking of ADCETRIS, we deliver in real time people order it they get it quickly.
And so were we feel really good about where we are at we just don't see sites accumulating inventory.
And Ken This is Todd I want to add just one more comment you talked about the price increase we did have a 3.9% price increase in July but keep in mind that we only see about half of that come through our net sales because of the discounting in the gross to net particularly around the phs share of our business, which is pretty significant.
Thanks, Thats really.
Quite helpful context, especially given the current political environment and I think important to remember maybe just one follow up for clay and maybe also for Robyn just wondering if you can help us understand the changes that you've been making would be et cetera. Salesforce here. It seems like tracking the website theres been quite a bit of hiring going on here is that.
Also sort of playing into the increased centrus sales that we saw in Q2 and is not responsible for the SGN a guidance increase or is that more the EDI salesforce, thanks, and congrats again.
First of all thanks for mentioning we had a good quarter and we're very proud of that.
It is really more related to the last thing you said the salesforce, we thought it would be important test some of our.
Salespeople from et cetera, So go to the program for continuity and connection and so we replaced some of the people on the et cetera, Salesforce Pravin do you want to talk about.
The folks that were getting that type of people that are looking to come work with us both on et cetera, if any.
Yes, I know what I'd say is that we are seeing.
Very strong interest in Seattle genetics.
The hiring on the sales force as I mentioned is almost fully complete and we had a lot of interest in those roles. We did have a few folks come over from the et cetera salesforce over the.
And of course, what you saw online with some of the Backfills for the for those positions, but I would say that we've got a really high performance group with great depth of oncology experience for the Salesforce.
Operator, we'll take our next question.
Our next question is from Cory Kasimov with Jpmorgan.
Hi, guys. Thanks for taking my question. This is Matthew on for Corey. So for my first question I'm trying to understand the potential impact of the international pricing index proposal on et cetera pricing I was wondering if you could provide any qualitative or quantitative commentary in that regard should this policy be implemented.
Thanks, Matt look we're aware of the.
Issues and closely track them, it's certainly dynamic there's changes literally daily are frequently.
We're paying attention like any biotech or pharma companies.
Ultimately, we believe fully that innovative medicines that provide meaningful benefits will continue to be valued by patients physicians and payers.
Et cetera is yes.
A.
First in class drug TV another drug that we believe will be first in class and these are drugs that really have an impact on patients and their their valuable and so we were watching.
Yeah, I'm not sure what will happen exactly I think your posture as it.
As we are.
Got it Thanks, and then my second question has onto Cat and had been the initial data expected. This year for that hurt your crime I'm just curious what you're hearing from chemicals in terms of what P. S at value or hazard ratio would be clinically meaningful in the context of all the other available treatment in this space.
Sure you know, we're really excited about her to climb and and coming forward with data later this year. Roger do you want to talk a little bit about the context.
What's out there the World tour.
Yeah. It's a good question. So you know who to climb trial has some unique aspects to it.
Particularly the patient population it's been enrolled.
With a very high frequency of patients with brain metastasis. So it is an extremely high unmet need population.
The trial design to the triplet versus a doublet with Technip added on to trust Twos Mebane Kids side. I mean, we think is a very thoughtful design that that may result in positive outcomes.
In terms of what is a meaningful delta I think it's very hard without seeing the data to make any specific comments on that again, there isn't really a historical control that you can absolutely Neptune and the unmet need is very high.
So everything is a relative decision and I think thats about where we can go at this point, but we're excited as clay said the trial enrolled well, we're hoping to get the read out by the end of the year and of course, we'll note that time.
Great. Thanks for taking my questions and congrats on the quarter.
Well take our next question from Michael Schmidt with Guggenheim.
Hi, Thanks for taking my question then congrats on the good quarter from me as well am I had a question again on the etc sales.
Number for this quarter it sounds like and correct me, if I'm wrong, but it sounds like much of the set for sales growth was driven by increased use in PTCL and I was just wondering if you could comment a little bit more about on what are you seeing in terms of market dynamics in PTCL right. Now for example, what market share do you have in front line treatment at the moment and are those rates comparable in a different sub types of TCM.
Thank you for your questions Michael So.
First of all as we said in the prepared remarks.
We think that as we track this ours our growth in revenue was attributed.
Two.
Both the E Twod regimen, which is in PTCL growth as well as in the one.
No any to we're not going to report the different sub types. We could tell you that they're being used in all the sub types as far as what we can find but we're not going to report you know specifics about that.
We also don't report the specific market share what we can say is that.
We predicted that it would take a number of quarters to get bigger and bigger market share because this was a regimen.
That we were displacing chop specifically in PTCL.
That was around for almost three and a half decades. So this is it's not that easy to displace these entrenched therapies now the good news with the two regiment, if we had not only PFS data, but oh less data.
So now let's switch to E. One the one regimen for frontline Hodgkin lymphoma, and there as you know we experience a little headwind in the past we have to we got a lot of early adopters and then we had some some docs. It said look you know I know how to treat frontline Hodgkin lymphoma, I've been doing it for decades, well and you're showing US data that's only a limited duration of follow up we'd like to see some more so this year for instance, we have show now 37 months of follow up data and the data actually improved with time. So now if you just look at PFS good old fashioned PFS and you look at 37 months.
We are now 7.1% better in PFS and that's important because while you can't yet call. These cures. These are long term disease survival and once you go past five years are the definition of a cure from oncologists, we can start calling it that.
But it is likely that a lot of these patients will go along and hopefully within the not too distant future. We can really look at what could be a cure rate increase in hodgkin lymphoma and going from the two year data that Weve produced when we first got approval to the 37 month data that came out with PFS I think that caught a lot of doctors attention.
And so they looked at this they sought and they were more comforted by that because we don't yet have less which and E. One and E. One regimen in frontline Hodgkin lymphoma was not contemplated to have yet. So there was nothing wrong. It just takes a while you know with the two PTCL.
The standard of care wasn't nearly as good as it was when you want the Hodgkins regiment. So I really understand what doctors are saying I understand that they wanted to see a little bit more aging of our data and the data improved with age. So I think that's a big deal too.
Okay. Thanks, and then I had a pipeline question right regarding to Sotomayor dealt with and I know the initial indications obviously cervical cancer, but I was just wondering when we might learn about the potential for that agent and other solid tumors.
Yeah, we're definitely looking at cervical cancer, Roger can you touch on a little bit of.
Generally what were looking at with the TV sure.
So the program is configured to evaluate cervical cancer as you as you mentioned in the pivotal trial with data readout.
Hopefully in early 2000 2020.
The but we have other if its going on so we in fact have a basket trial, which is looking at other tumors that express tissue factor with TV potentially has the ROE and that's an ongoing trial at the moment, we haven't grid out there yet, but obviously when we do we'll present that we also have an effort going on specifically in ovarian cancer.
So we have a number of different trials outside of cervical cancer exploring the potential.
For TV in other diseases.
And you know we are what I would add also is we actively speak with our partners genmab often about to try to maximize TV. So just just so that you know we were excited about the product and working hard on it.
And maybe one piece to add is we in fact do have the beginnings of a combination trial with the TV imperialism have as well so that's up and running.
Great. Thanks for taking my question.
Well take our next question from Andrew Burns with SVB Leerink. Please go ahead.
Thanks appreciate it and congrats on the quarter guys. I also have two questions. One on P.P.C.L. given a the prepared comments and I know you said you wouldn't talk about different subgroups, but.
Is this a disease or opportunity that we should think of as a prevalent opportunity.
Or is it really new patients that are driving what you're seeing or is there a possibility patients are gonna get on centrus through multiple lines of therapy when they relapse.
It's more of a prevalent disease.
So on PTCL you know.
Well, we're out there talking about.
Yes, the data on for instance, the patient and so that's what we're looking at newly diagnosed incident patients. So I don't we don't have a lot of data on prevalent I mean, we still have approval to treat.
Relapsed patients and and that's one of our labels, especially in a ALCL and ER and some other you know in CTCL up but we are really focused on the newly diagnosed patients and working.
With our commercial team and doctors to get newly diagnosed patients et cetera, CHP because the data is so clearly positive and not just on PFS, but on all that and you look at the Kaplan Meier curves and you'd be hard pressed to find.
Bigger white space between Kaplan Meier curves in clinical trials. This is a really positive.
Dataset that I feel that patients and doctors should really look at this before jumping into a different therapy, because they can really be benefited.
Okay, and then one of the things we've heard from some of the community docs is that.
Buying and billing the patient is a real concern for some of the.
The docs with private practices.
I was wondering if you guys have heard that and if so what efforts can be done to kind of.
Way way some of those fears and financial concerns with clinicians.
You know.
We haven't really heard much of that at all I have to say.
As far as physicians getting reimbursement in PTCL, which is I think what you're looking at we really have not heard that there's there's issues out there.
We think that our market share is growing in this space.
As we predicted we think it was going to take some time to grow an entrenched.
Previously entrenched therapy, and it's yeah, we're pretty much on track for what we thought the growth rate would be on a quarter to quarter basis with.
The two regimen in PTCL, So I don't view, what you said this buying and billing thing as an issue.
And the I wasn't limited.
It wasn't limited to eat too I was talking about et cetera. So I'm really Hodgkin's lymphoma, I think is where these comments originated.
You know, we I have to say, we just aren't hearing it in the way you are so I don't know where this information comes I'll certainly explore this with our commercial team, but I don't think we are seen as Todd well I was just going to say the other thing to keep in mind as we have an incredibly efficient model, where a site can order drug today and they will have a tomorrow. So there isn't this need to buy et cetera is in hold it because of a concern or fear that it's going to take weeks and weeks and weeks, where your drug to show up we're we're literally overnight shipping.
Appreciate it.
Congrats again.
Thanks.
We'll take our next question from Salveen Richter with Goldman Sachs.
Yes, hi, thanks for taking our questions Mariana placement for Salveen, we had a couple of one.
I was just wondering with the NCCN update for Hodgkin lymphoma.
Do you have any color on on changes to prescriber activity due to updated guidelines and we were also wondering get the two cats and that opportunity in metastatic.
Breast cancer, especially in patients with brain metastasis, how are you thinking about that opportunity. How are you thinking about going into that market. Thank you.
Thank you for the two questions concerning the.
NCCN that you asked.
We we we think that certainly we like the new wording with NCCN.
But it's not really it's hard to know what that impact will be.
Or what that impact was we think that the three year PFS data that we showed an ASCO and we think that the response from doctors.
We think is the most valuable.
Thing that we have because we could tell that they look at that closely.
You know with NCCN and you know that also connects with a you know how how pathways are and how.
Doctors prescribe it and those are things have evolved slowly pathways don't meet very often at all and.
No that does it takes its all life and we're not really part of that but the data and the way doctors respond to this age data that's improved.
And really get a benefit to the patient that's really what we think is the most important thing for the you know the increased E. One regimen sales that were saying Hey, you ask about two catnip and the opportunity.
You know to catnip is something that is a drug that we think could be you know a best in class drug it's clearly not the first.
Of the her two to cash out there there are a few of them. So its a validated pathway, but our goal is to really raise the bar.
And get to that next level with helping patients with a very potent drug, but one that doesn't buying to EG EGF receptor and cause all that toxicity that you would have with some of the other her two teekay eyes.
As far as the specific benefit and talking about the size of the population. It's a little early for us to do that we're still doing working on our pivotal trial and it's an event driven trial. We've guided to later this year or data to come out and then let's just see what the data what happens with data and there's plenty of time in the future to talk about the specific opportunity and I really think it depends on the data we have.
The primary endpoint is all of the patients put together.
And then the secondary endpoints.
Include.
Importantly, brain metastasis. So this is a unique trial design with a couple of different data sets that will result from the data and I think that looking at the opportunity for this really depend on whether this works.
Patients, including patients word works most on one or another set of patients then we could adequately started addressing your question, but until then we will hold off on it and are excited to address this question in the hopefully not too distant future later this year.
Thank you.
Well take our next question from Gena Wang with Barclays.
Thank you very much for taking my questions and also a follow up please to cap. It maybe I'll ask wondering if you can remind us the event rate for PFS.
And also.
If the trial designs do you.
Designed to detect 50% PFS improvement another related question regarding the brain Mets patients what is the percentage of patients.
You plan to enroll.
Okay. So.
I got your three points there. So the event rates on PFS, we have not reported and that's something that we keep confidential.
The the amount to detect a 50% improvement also his attorney general information and Thats not something we'd be reporting.
We we have said that we are planning to enroll and I know it has this is true because all the patients are enrolled that we have roughly half the patients have preexisting measurable brain Mets and that makes us one of the uniqueness of this trial were really addressing major unmet medical need.
Great and I have one quick follow up regarding et cetera.
Quarterly revenue.
So you mentioned that the majority that the growth is driven by frontline PTCL is it fair to see out of 24 million audio over quarter Rose close to 20 million would be from frontline PTCL and should we expect the feature rose mainly driven by Dan PTCL.
Nothing.
I think our prepared remarks said that we're really pleased with the growth in frontline PTCL, but we also have growth in frontline Hodgkin lymphoma, we did not look at the breaking that apart nor do we plan on breaking apart I think looking forward. We continue to see that we are getting increased.
Market penetration.
And that goes for PTCL, which was approved approved like almost a year later than Hodgkin lymphoma.
Maybe it was early in 2018 to late in 2018, so maybe a little less than a year, but.
So so frontline Hodgkin lymphoma spit out there a little longer and its growth rate is probably a little slower at this point just can this out there a little longer than frontline PTCL, but both are growing and we're really pleased with what we're hearing from docs out there and I know we had a bunch of questions on guidance, it's hard to really give guidance on this we're in uncharted territory in frontline Hodgkin frontline PTCL and.
The data we have is great.
The age data is great doctors are rallying to this and we're out there trying to do the best we can buy patient and you know what I would say is stay tuned on this and we'll provide you with whatever data and follow up that we can when it's appropriate.
Thank you very much.
Well take our next question from Tanzania mud with Bank of America.
Hi, good afternoon, thanks for taking my questions.
Hi, I just wanted to get a sense on the sales force that Todd.
I talked about you guys have hired how big of a sales force do you anticipate you'll need for easy.
In the U.S. and do you plan on hiring all his salespeople at once and then secondly for two cotton of as that data that reads out I guess, what kind of data should we expect that the top line.
What level of efficacy would you consider to be clinically meaningful and how important is it for you to show a better safety profile than currently approved treatments viz, a viz specially diarrhea rate.
Thanks.
Hey, so what's the trigger from question, we'll start talking about the sales Force review I'd like to turn it over to Robyn to kind of explain or thoughts here.
Robin.
Sure. Thanks Clay.
So weve worked really closely with us delis to size the sales force to ensure that we have a broad reach to health care practitioners, who treat metastatic bladder cancer.
We will have with the Stellus, an equal number of reps in the field.
We will utilize our existing commercial infrastructure for activities managed markets and distribution, but we will also have some brand specific roles such as the dedicated E marketing team.
And Thats really sort of where we stand which is a equal partnership with his delis here.
So the second question is on two cabinet and talking about efficacy and safety profile and for sure. The reason we acquired Cascadian to largely get this drug is.
That we saw a really exciting drug from a safety standpoint, because it didnt bind to Jeff receptor.
And a really exciting drug from an efficacy standpoint in single arm studies.
Ill repeat that single arm studies and the onus is on us to perform.
Randomized study in order to get registrations. So Roger can you talk about some of what you know give context to where we are for sure.
So as you and I have to time is fully enrolled just to reiterate some of the points. This is a high unmet need population with a substantial proportion of patients with brain metastasis.
There is really no historical precedent that we can actually define.
What the potential for the control arm would be.
Based on the profile of to Catnip, it's highly selective 13. In addition, its lack of inefficient of EG.
That is a potential best in class molecule those characteristics are key to both its efficacy and safety and Tolerability.
So as clay said dependence and generated with single arm trials, obviously, very encouraging including with to Katonah been Tdm, one which is why we've proceeded to start another phase three trial, but until we see the data. It's really we can't really make any statements about.
What the potential treatment effect would look like what I can say to be the one thing I can add is that you've seen a lot of data sets come out from other.
Trials.
And when you look at PFS in this type of population, it's always measured in terms of months. So the first thing I could tell you from that whenever I see that in my decades of doing cancer work. It says to me loudly unmet medical need.
So we're in an area where patients need something.
They don't just walk away, saying gay, there's drug x. or drug why I'm cured that's not worried as we're talking a lot of these patients.
They get a drug and respond for measured in months.
So we have a really big important area to go into and when you have brain metastasis, which literally half the patients get there's not anything really out there. So you know, it's a grim prognosis and we're trying to really do a good job and help patients and work on this drug so data coming soon the lit sometime this year. We are incredibly excited and I'll remind you we really love to all data from single arm trials. We just thought they were outstanding and this was the right drug, but we do not yet have the randomized data and you know.
FJ rightly wants in this setting with all the other drugs they want to see randomized data and we're up to that challenge and we're looking forward to reporting it.
Okay, and then just on safety kleen to wrap that up how are you thinking about diarrhea rates do you think that that's an important differentiator in this population or.
Is it as you said when you have PFS and the months that this is a high unmet medical need area and any improvement is a good improvement.
I would go back to our early data on this this drug because obviously, we have not reported data from the pivotal trial and the early data shows a dramatic difference in any GI toxicity, you just don't find ETF receptor I'll remind you that both.
The first two.
Two.
Tyrosine kinase inhibitors that were approved both bind to her two and inhibit the tyrosine kinase, but both of them buying to EG EGF receptor.
I don't believe that they were screened to not buying TGF receptor I think they were screened specifically for the hurt to teekay activity, whereas two cabinet with screen.
With not only getting something potent for her to teekay, but screen that it didn't buying to each got receptor. So this is what's unique about this drug and if you look at the safety profile for literally hundreds of patients that were treated.
And single arm trials, it's you know from a from a standpoint of comparison to the others that are out there it's pretty dramatically different. So I think that I felt very confident about safety profile, where we just didn't know is in a randomized trial.
Versus active competitor how would you how would it come out and Roger do you have anything you want to add anything to that.
So I think just as a case in point around the safety profile I, just remind you that hill to climb is a blinded is a placebo controlled trial and in general placebo controlled trials can only be done. If you are unable to tell which which drug you're on placebo or the active agents. So that's an important point to remember and secondly in a disease like breast cancer, which is a chronic.
Chronic disease Tolerability is key if you're taking a drug twice today.
And you can't take it for too long.
It's not just isn't a safety issue it can potentially feed into it.
Well, so I think those two points are worthy of some consideration.
Okay. Thanks for that color appreciate it.
We'll take our next question from Stephen Willey with Stifel.
Yes, Thanks for taking my question and congrats on a really good quarter.
Just a quick question on PTCL, and then went on to Ken Im So.
Just curious to what extent.
Screening for Cdthirty expression.
May or may not represent a rate limiting step for et cetera is right now in PTCL either from just the utilization a reimbursement perspective and.
I guess, how does the recent data demonstrating that the et cetera benefit is agnostic to cdthirty expression potentially change that.
So certainly at ASCO you saw the presentation from the docs that said that they had responses whether patients were CD 30 high or CD 30, low or even CD 30.
Without even be able to through histology be able to see it now when you historically, we've looked at all these patients and you can look them with histology histology has a very big gray area background noise. So when you get down to lower levels of Cdthirty, it's impossible to know whether it's positive or negative you could just say histology.
So a negative but that doesn't mean negative and you look at molecular early and its were hard pressed to find a A.A. lymphoma. That's a T cell lymphoma cdthirty negative when you look at it molecular really and also cdthirty as an activation energy and it kind of goes up and down and when you look at different nodules, you could even find different amounts of cdthirty within the same patient. So it is a very complicated.
A scenario, where the prediction would be that all patients respond to because cdthirty is there an all and can go up and down and in fact that is exactly what the doctor showed in their presentation at ASCO. So I think to the utility of it.
In in you know different sub types and based on all our data and everything we know I think we have a really good case, there that doctors should use this and it could benefit patients. So I certainly don't think that hurts and you had a second question on two catnip.
Yes, just a quick follow up on that then I guess, if there were a mechanism by which you could remove that cdthirty expression requirement from the label would that change the narrative of uptake do you think.
You know what our requirements on there is it Cds I mean in Hodgkin lymphoma thought there at all and in T cell lymphoma. It just as Cdthirty positive so it's not like.
I mean, it could be a trace of it.
And be positive so we don't find it as an impediment at all quite frankly.
Okay, and then just for clarification on to Ken and I know that you're talking about.
In other study year in combination with Tdm one in the second line just want to.
Clarify if the initiation of that trial is contingent upon her to climb data.
Roger do you want to come so no. It's not it's the we believe it's the right time to kind of all the properties. We've described.
This is again a validated pathway.
We've generated the phase one data which supports the combination.
And we think it's the right time to to proceed in that in that direction.
Great. Thanks.
Thanks for taking the questions.
Well take our next question from.
Shanshan Zoo with Baron capital markets. Please go ahead.
Thank you for squeezing even have one question for Roger if the Opcone read out of her to climb its positive how should we think about expanding indications beyond breast cancer, what took cabinets and I have one follow up for <unk>.
Sure. Thanks, Thanks for the question.
So as we are as we are now we have to cast node being incorporated into us by looking at the Neoadjuvant applications you see her to climb in the multiple be treated population. We're now moving into second line.
Metastatic breast cancer, we have an idea we have an investigator initiated trial called mountain yeah.
Which has data.
Combining.
Two cats in them together with the symptom.
In a third line plus a color rectal cancer population, we hope to have that data out later this year I think we get you know again it to cabinets turns out to be the potential best in class realizes its potential then anywhere that a T.K. I can have a role in the her two expressing tumor is where we will want to go. So that includes CRC. It includes other stages of breast cancer.
Potentially gastric cancer there are other cancers. The her two expressing that could be of interest as well. So I think you know if we have a real molecule we will finish out the development plan as appropriately fully as we can.
I think it takes an absolute proposition.
I think it's a good proposition for a breast cancer oncologist.
If our data turns out when we think it could with her to climb to have a a tablet that's well tolerated and really works.
I think would be.
This would be a really important drug and we'll get a lot of use in and we'll be in many different lines and and therapy and breast cancer and outside of it. So good you had an easy question.
Yeah, absolutely agree with your commentary on two cabinet once all Oh, He said, we witnessed a very impressive data.
Sure why don't we she's a survey on trial easy she'll one the medium allege the only two to three months shorter than the standard of care in front line Urothelial carcinoma. So this is actually everyone's interest to move Hebei into the pivotal trial, the frontline University they'll come to know in the past to ask if we saw that it took couch you see.
I don't know six zero why almost five years to achieve its full enrollment so rock 'n play what opportunities with drivers to accelerate enrollment for frontline your t. Rowe carcinoma trial for <unk>. Thanks.
First of all I did want to make a commentary before getting to your question on ebay. We have not had a single question from any analyst or comments, Randy analyst to the speed with which we submitted D.V. we.
Busted are back and submitted this much faster we guided that it wouldn't be submitted sometime this year and in July and you know we submitted in the middle of July . So this is months ahead of where most of you had in your models I think most of you have sometime in the middle of fall in your models. So I I would like the analyst to notice that which I think will translate into getting this product on the market faster and it's an important product that doctors are screaming for so this is part and parcel into we're trying to make a difference in patients lives and we together with the Stellus worked like.
Hi, good morning noon.
On getting this to a submission because it's important okay. This isn't just a wall Street thing, it's a patient thing and so I want everyone to notice how fast we worked on this.
Secondly, we are excited about the potential of easy in front line and Theres lot of different approaches Roger do you want to give context to that.
Sure. So if you look you can you can look back into the easy one of those three trial than you can understand what a potential choice.
It's easy is the backbone with a PD one inhibitor.
Plus minus chemotherapy those are the types of choices that were facing I must say I agree with you. The front line metastatic urothelial cancer is still a high unmet need.
I think the personally if we come up with a very thoughtful considerate acceptable trial design the excitement around the combination of easy with with other drugs.
Once we have that data presented if it supports that will drive a lot of the enrollment bladder cancer has changed because all of the all of the Immunotherapies have come in and there's a lot of interest now in bladder cancer Ducks are focused on moving trials ahead, whereas in past times, where there was really just chemotherapy versus chemotherapy not an interesting question nothing exciting Christian to answer that's possibly was TLGP trial was so slow I would hope that we would be way quicker than anything like that.
[laughter].
Operator, we'll take our next question please.
Well take our next question from Andy Schmidt with William Blair. Please go ahead.
Great. Thanks for taking my questions and congratulations to the Seattle genetics team.
It's nice to see that inflection point.
Commercially.
So ive two questions. One one is probably for for Rogers. So could you remind us the specificity in potency of catnip.
Specifically pertaining to her to mutants.
And if that is a potential differentiator.
Versus other oral Teekay eyes.
Yeah. Thanks for the question Andy we were interested in the population. We haven't studied that so that's something that we know we need to potentially move forward onto captain is very similar to the rest of in terms of her two selectivity and potency. They all are very close.
So you know the ability to inhibit the target.
With two cabinet is as good as any other as sort of the most potent inhibitor currently available which is no wrapping up again coming back to the hotel mutant we're interested again anywhere where there's a potential role for to Catherine we need to signal fine. So that's that's for a future office.
You know Andy Oh, we do we believe that and this is based on you know.
Data like with Herceptin for instance, but ER and her to Teekay eyes. When you keep pressure on a tumor in a patient the patient does better and that's what you see with other agents and one of the things about these hurt your T.K. I says if they're really toxic you can't keep pressure on the tumor you have to discontinue and and not not enable them to get there. So it's not as Roger said before it's not just the safety issue. It also relates to efficacy and that's what we saw when we did a lot of diligence on this we saw that this could change as you know the paradigm and raise the bar and allow for a T.K. I keep pressure on the tumor for a subsequent period of time and that's that's really what's important.
Okay. Thanks for that just as a follow up and this pertains to E V. So most of the time you know when you go from early phase one beat it to phase three pivotal studies you take some sort of a response rate PFS duration penalty.
Just curious you know have you identified kind of any factors that contribute to just the impressive consistency across these at the early stage pooled analysis and the tool one topline results.
You know I will tell you that the.
Clinical team at Seattle Genetics, and and this certainly has been the case prior to Roger Jordan, but even emphasize more with Roger is we don't want to get too.
Over excited about phase one data unless we do a blinded third party reviews and things like that so we want to look at not just response as we look at confirmed responses. So when you see Seattle genetics data from Phase one and then test confirmed responses the chance that that will repeat in a bigger study is pretty high because these have already been you know stared at where I see a lot of times companies put out data and there are unconfirmed responses and then you see the later and it's a much smaller response rate and much less duration. All these things and that's because they weren't as fastidious as we are we're more interested at this point.
You know.
At all points in Celgenes history, Weve been interested in actually making substantive improvement in patients' lives with unmet medical needs and not just getting a little bit of hype on some drugs. So we want the real data out there and I think that's what contributes to our early stage.
Data.
Matching pretty closely to the pivotal because we we do it the same way with the same rigor.
Roger Andrea two other comments so so firstly, good drugs really work and when they really work they really work again and again.
That's certainly.
One one part of this the other is just bear in mind. The sample sizes are not 10 patients or 20 patients were talking 100, plus and so the variability around those confidence intervals is much smaller than a very small sample size, where you can potentially get yourself.
Misled so it's great that the data is reproducible you're right many times that phase one experience I described.
Degrades over time, and that's obviously not something.
That anyone likes to see but certainly with the we have not had that experience and so it does bode well for the future of the drug.
Thanks for answering all my questions and Super helpful context.
Okay.
Well take our final question from Sylvan Gerkin with Oppenheimer. Please go ahead.
Hi, Thank you for taking my question and congrats on the quarter and the submission.
Could you please give us a little bit more color on your pre launch activities for TV outside of the sales force.
So just maybe interactions with payers you have and also is there any strategy that leaps out at you in terms of how you can roll this out quickly in terms of what centers to targets.
You know first of all I will thank you for the question I mean, we are putting in a very large amount of effort on our pre launch activities for easy and it's across the board in lots of different areas. I mean, this is just drugs the real deal so.
We're not going in for a soft launch we're going in for the full launch no soft last year and 80 for sure Robin you want to put this in context.
Yes, certainly play.
Like any new product launch you need to be prepared for everything that you are going to be doing it as approval and as you say that's not just preparing the salesforce in terms of the training materials is also.
Understanding.
The the payer environment is preparing the rest of the organization and also outside of commercial so on the medical side.
Our medical Affairs organization, we'll be prepared.
And of course, we've been preparing for months already in even more than a year in terms of thinking through the brand strategy and how we're actually going to position this product in the market and so all of these elements and I think what I said is that my experience in.
Oncology launches.
What I saw coming into Seattle genetics is a team that is very prepared I was really impressed.
Okay.
Great. Thanks, and do you expect an outcome.
You know, we can never make a comment on whether there have kind of we're not it's not our decision Oh, we do a breakthrough therapy designation and I think that.
No I I don't want to I don't want to handicap this actually but I, we're thinking we're thinking pretty positively about distress. Roger any addition agree I agree.
Great Thanks, and maybe just quickly.
For two cats and that I think the brain metastasis will be very important and it's great that you're studying it what do we have seen any data on activity in brain metastasis to date in earlier trials and a well that stay to be topline at same time, you may put the topline that PFS of the entire trial will it be mature enough at that point.
So there has been data are early on in looking in single arm trials now on the randomized setting at a brain metastasis and when it was relatively weak you know really nice data that was something that stuck out on us as we reviewed this.
That we were surprised with not surprised but we were pleased I should say, we see the data in brain Mets that we did with a single arm trial, Yes, you have to do this in a randomized trial to prove it but the data in brain Mets was well with better considerably better than you would have expected scene in populations of brain met patient based on looking at other drugs that historic studies, but you have to do the randomized studies. So that's that Roger or any other comments on this I agree clay. So the data that was generated clearly to cabinet was active in brain metastasis that I think there is no doubt and so it's a matter of how active.
In the combination that we're testing with regard to you know what we will release topline I don't think we'll get into any specifics about what that it would be obtained in in that release.
Yeah, that's too premature to say what will exactly relief now our goal would be to release.
Everything that we possibly can while retaining the ability for doctors to present. This at an appropriate peer reviewed large conference and you know EBITA in breast cancer.
Work is normally presented at conferences, such as the San Antonio meeting, which specializes in breast cancer, but also is that ASCO and ESMO and some other cancers.
But you know the San Antonio Conference is clearly the Premier breast cancer conference or it's it's evolved to being the premier breast cancer conference didn't used to be that way, but it is now.
Great. Thank you so much.
Ladies and gentlemen. This concludes today's question and answer session I would like to turn the conference back to your speakers for any additional or closing remarks.
Okay. Thank you operator, and thanks, everybody for joining us this afternoon have a good night.
Ladies and gentlemen, this concludes today's conference we appreciate your participation.