Q2 2019 Earnings Call
Thank you for your patience.
Please stay on the line for the next available operator.
Good afternoon, my be Comping tiny number please.
Good afternoon.
2069775.
We have the spelling of your first and last name.
First name are a C H E L.
Rachel.
And the last name as Am I correct.
Smith.
Thank you company name.
I eat our a.
Okay and your email address please.
Rachel like a first name at IR Dot com like a company.
Okay.
And company was eight I.E.R.A. correct.
The I.E.R.A., yes.
Right. Thank you and Thats dotcom correct.
Yes.
Encountering some you know nordics.
Thank you Laura before we begin I'd like to remind everyone that during this call we will be making forward looking statements made pursuant to the private Securities Litigation Reform Act of 1995.
Such statements may involve significant risks and uncertainties and therefore actual results could differ materially from those expressed or implied on this call for factors that could cause such differences. Please refer to our regulatory filings with the Securities and Exchange Commission.
With us on the call today with prepared remarks are Dr. Bates, our Governor day, executive Chairman and with Summer Malik Chief Financial Officer.
Also on the call for Q Unaided, Scott Canute Executive director.
Following the prepared remarks, we will open the call up for questions.
Thank you Melissa.
Thank you Joe and good afternoon, everyone and thank you for joining us first and foremost let me begin.
With an update on our BLE resubmission efforts.
I'm pleased to report that we remain on track to meet our guided Resubmission timeline of early fourth quarter of 2019.
As noted by Scott in our last earnings call. Our goal is to have not only a high quality resubmission, but also a successful re inspection im very thankful and appreciative of the hard work, our manufacturing quality regulatory and clinical colleagues have delivered so far as we move towards our objectives and timelines.
While Samsung is not part of our BLE Resubmission planned they are nonetheless important in our overall strategic plan to skylake to scale, our global supply capacity for long term supply of Sacituzumab Govitecan.
To that end on also pleased to report that the work being conducted at Samsung Biologics is progressing well and we remain on track for established Samsung.
As our primary source of commercial antibody in time to meet the anticipated demand of this valuable asset after FDA approval of our BLE.
A quick update on the CEO and CMO search we are in active search mode and are looking for the right candidates with the current arrangement of me stepping into the executive Chairman ship and Scott Spearheading our BLE Resubmission efforts.
The company continues to execute well against our key strategic priorities, giving us the opportunity to take our time to fill the CEO position.
We're going about this search very thoughtfully to make sure we get the right person when you can build on the potential of our unique ADC platform and take the company to the next level.
For the CMO position, we've moved quickly to bring onboard an industry veteran who previously helped us on various projects as a consultant and has now stepped into an advising interim CMO role supported by a very strong fully staff clinical team.
While our robust clinical programs are advancing extremely well under this setup, we are eager to fill the CMO position on a permanent basis and that search is ongoing.
Moving onto clinical updates were very pleased to have reached our target enrollment in the assent study in less than 20 months and are grateful to the patients their families and caregivers who have participated in our studies.
We believe this rapid pace of is a testament to the unmet need in late stage metastatic triple negative breast cancer and the confidence of our investigators in the safety and efficacy of our AIDC to provide a meaningful clinical benefit to patients.
Based on our current projected event trajectory and timelines associated with Central review database lock and analysis, we expect topline readout from ascend to occur mid 2020 .
Building on the ascent momentum and leveraging the existing relationship with breast cancer specialists, we've launched the Registrational phase three tropics allude to in her two in HR positive hertwo negative metastatic breast cancer, which accounts for 70% of all breast cancers.
This randomized global study has dose the first patients who have failed at least two prior chemo regiments for metastatic disease.
With progression free survival and overall response rate serving as co primary endpoints. The study allows for an analysis of overall response rate on a pre specified number of.
Patients as a basis of potential accelerated approval submission.
Enrollment of the targeted 400 patients is expected to take approximately 18 months.
For trophy, you're one in Urothelial cancer. The study is enrolling as expected and we remain pleased with the progress towards the 2019 year end enrollment completion.
As a reminder, once we've recruited the pre specified number of patients with sufficient follow up we will have the opportunity to conduct an interim analysis, we anticipate reporting these results at an appropriate scientific venue.
The successful interim analysis will provide us the opportunity to file for breakthrough therapy designation.
To further unlock the potential of Sacituzumab Govitecan, we've initiated for the first time for first time at trope to enrich study in various difficult to treat cancers.
Dosing of the first patient in the non small cell lung cancer cohort is expected in the third quarter.
Finally, we have two updates on PARP inhibitor combination studies to report the first one is that you'd rucaparib the collaboration with Clovis and second line metastatic triple negative breast cancer and other cancers that study is now open for patient enrollment.
The second study is a new phase one b two study initiated by Dr. Aditya BARDA and sponsored by the Massachusetts General Hospital two studies Sacituzumab in combination with Pfizers PARP inhibitor has operated in patients with metastatic triple negative breast cancer previously treated with no more than one prior therapeutic regimen for metastatic disease.
And with that I will turn the call over to sign up for an overview of our financials before opening the call for Q and a.
Thank you bye.
As with our last earnings call I'll provide topline results here and ask everyone to refer to our quarterly filing as well as this afternoon's earnings release for additional detail.
Total cost and expenses were $67.2 million for the quarter and $146.8 million for the six months ended June Thirtyth 2019, compared to $52.8 million for the comparable quarter and 990.9 million for the six months ended June Thirtyth 2018.
The increases were due primarily to additional expenses in research and development and sales and marketing partially offset by decreases in GNS expenses.
The increases in R&D costs are mostly attributable attributable to activity related to preparation for the approval and commercial launch of Sacituzumab in metastatic triple negative breast cancer and expanded clinical development of Sacituzumab in other indications.
Net loss attributable to stockholders was $76 million or 40 cents per share for the quarter ended June 32019, compared to $117 million or 68 cents per share for the comparable quarter ended June Thirtyth 2018.
Net loss attributable to stockholders was $163.3 million or 85 cents per share for the six months ended June thirtyth 2019, compared to $152.6 million or 91 cents per share for the six months ended June 32018.
As of June Thirtyth 2019, we had approximately $433 million in cash cash equivalents and marketable securities which included the $65 million upfront payment received from the licensing agreement with Airbus medicines for greater China. The number of outstanding shares was $192 million and the fully diluted count was 205.
We believe our projected financial resources are adequate to support our clinical development plan for Sacituzumab further build our clinical and manufacturing infrastructure and fund our operations through 2020.
This concludes our second quarter 2019 financial results operator, please open the call up to questions.
Thank you.
Ladies and gentlemen, thank you have a question at this time please press the star and the number one key on your comes from California appointments Star then the number one.
Pipestone pipeline. Okay question has been okay. Thanks.
We're still moving south from the queue. Please pass the park.
We had your first question coming from the line of Paul Choice with Goldman Sachs. Your line is now live.
Hi, This is cringing guns on for Paul I was just hoping you could talk a little bit about how you see the competitive landscape evolving with co two agencies, particularly as you start to study that she's not and as the CLC.
And with Daiichi Sankyo, presenting data for their church, where do you see it.
World lung this fall.
Sure. Thanks, I think not much really has changed in the triple negative setting we haven't we've seen as you just touched on the data from the.
12 to 80, C. from Daiichi, which was on the early.
Number of patients with limited follow up and I think on the one hand, it was comforting to see a talk to as a validated target.
ER, which we were I think spearheaded that with our asset.
But beyond that we have I haven't seen the follow up data and when we look forward to getting an update on I think in early September in the lung setting and the triple negative setting. However, I think clearly we just announced today that weve reached our target enrollment in our randomized phase three study you have over 500 patients treated we are on track to file for approval on our phase one cohort in that setting. So I think in terms of just.
Experience and timelines I don't really foresee anything changing for the foreseeable future in that lead indication.
With the with respect to I think they have been.
Other updates in the with checkpoint inhibitors and earlier lines of setting with some positive some negative developments in the quarter again, none of that really reads into our initial target indication in fact, some of the positive developments I think Mike just perhaps lend themselves to an early adoption of our assets as the majority of patients. Unfortunately will progress after initial lines of therapy checkpoints or otherwise so I think in that regard again.
Not much has dramatically changed since we last spoke.
Great. Thank you Paul.
Thank you.
Your next question coming from the line of Fair review, the Cowen and company. Your line is now.
Good evening, congrats on the progress and thanks for taking my questions a few I'm coming events first on the manufacturing.
Issues and work that you're doing.
With it just perhaps a couple months two years to complete the filing I am curious if youd be willing to give us any more information on more work you are doing and what are some of the issues that remain to be solved before you can re file.
Yes, thanks for the question.
The short answer is we put a comprehensive.
Deep and broad plan in place shortly after we got the CRL as we communicated on the previous call last call that we had.
And we're sticking to the timeline.
We're tracking very well with it we're getting things done that we needed to we've not had to add anything really to the plan that we put together several months ago and its just execute execute execute.
Has there been anything unexpected as you've done your work any any unforeseen challenges.
Maybe you weren't aware of.
After meeting we file it finding the CRL.
I mean, nothing that you would that you wouldn't see a normal manufacturing operations I mean.
Things do happen from time to time in manufacturing, but you have an organization that is built to deal with those identify them and and deal with them and has not impacted our timelines are still very highly confident that we will be able to re file in early fourth quarter.
Perfect.
Some questions on the timelines for the assent study as I'm sure you're aware there's lot of.
Concern that those could come up before the PDUFA date.
Okay. So just to play Devil's advocate.
Why wouldn't the data before handing over to Charles fully enrolled now yet maybe four months for the median PFS event to be hit a couple of months to clean up the data.
Is it is it possible that we get the results in the first quarter of 2020.
No again I think today, we gave guidance on when we expect the results to readout.
Whats important is first of all this is based as we said previously we would take another sweep of the data and provide the update as soon as practical so I think clearly that now has occurred.
And based on where we see the events and where we see the triggering event to occur it's a little more involved than what you laid out I think you've sort of broad strokes got the moving parts, but just to walk you through the sequence of events, it's going to be that on a local.
Review, we will get a triggering event that will then trigger the final set of.
Scans to be sent for central adjudication.
You have to factor in the timeline it takes for that to occur.
There are multiple reviewers on a central basis that need to review it that and work needs to be completed sent back to us and that will then established when in fact, we will declare the trigger to have occurred namely an event based on Central review not local review that then will trigger a series of steps iterative steps of database clean up followed by the analysis period, and we sort of when you piece those parts together.
We arrive at that mid 2020 timeline and not what you propose which would be substantially sooner than that.
Perfect, Okay that makes sense.
And then the last question just on the interim Urothelial data have you.
Decided upon a venue in which to release that due to investors and is it possible that we don't see it actually in the second half. This year, maybe early 2020 at some place I guess could you.
Yes, Phil I think.
What we'll probably do in that regard is just a weight.
When and if the venue has been identified and the conference would allow us to reveal that it would be inappropriate to sort of speculate on which conference.
Until we have that clarity or are allowed to speak to it so I sort of fast to stay tuned and when we have the update will be certain to provide it.
Perfect.
That's very helpful. Thanks for taking my questions and congrats again on for years.
Thank you Phil.
Thank you.
Your next question coming from the line of Matt.
Other Reits with H.C. Wainwright. Your line is now a lot of.
Good afternoon. This is Ed remarks on for Rob I. Appreciate you taking the questions just a few clinical one from me.
Looking at CDK four six usage in the first line setting for HR positive Hertwo negative metastatic.
Could you talk a little bit about your current.
[laughter] Oh I missed sorry can you just you we want to make clear, which drug you are proposing a combination study with.
I'm sorry, we're talking about for the strength in the second line for the stress.
Yes nothing.
We don't have a specific trial planned in that setting.
So.
Beyond the tropics study that Weve now announced that Weve enrolled patients.
There's really nothing to report on the study that Youre proposing.
Okay.
And could you provide a little more color on to any of the combinations with infinity for NSCLC TNBC and Urothelial I'm, just when they're sleeping again, and what maybe some potential timeline for looking like since we really haven't seen anything on on CD [laughter].
Yeah, those trials I'm I would say are run by Astrazenecas. So up beyond just I'm, giving you sort of broad stroke guidance, which I believe they will be starting in the fourth quarter, they're not Raleigh really under our control. So I can't Unfortunately give you more clarity around that.
Okay I understand that makes sense and then my final question I'm just looking at the recent phase one two trial with telescope or in TNBC on the 60 Dot Gov. It looks like the inclusion criteria just not really stipulate a whether these patients need a workover HR our mutations to be included in the trials I was just wondering if you could clarify whether or not these patients actually have to have these mutations are to be included.
They do not they're some of those parameters are of interest and so that information will be collected but there was no pre prerequisite that they need to have bracketed mutations or others. It's an all comer study.
Okay. So do you imagine doing maybe a subset study later on or subset analysis.
Certainly I think that based on depending on what the data where they lead us to but our hope is that we the combination will sensitize nonbranded tumors as well and so that's the information that we're looking to glean from these studies.
With Pfizer and with the asset with a cold this asset.
Right I understand.
Okay. That's that's all from me thanks.
Thank you.
Thank you.
Your next question from the line of some sense you don't Edinburg, Michael Your line is now.
Hi, guys. This is James you from Aaron Berg capital markets. So following sales pass I would like to play Devil's advocate that well given that a sense. It's really the comes from a jury trial for me. It was 32 in triple negative breast cancer. So even if the timeline for this assent readout, it's pushed out to mid 2020, if the readout on the PFS negative what could be the regulatory implications. You mean 132 granted that it could have been approved by the F.D.A. by then.
[noise], Yeah, Sean So I just wanted to be clarify that we didnt push out timelines. This is the first time, we're announcing timeline. So that is in fact, when the study will read out.
With respect to what might occur should the trial read out negatively it's really hard to for me to speculate given that a first of all we would anticipate and we continue to anticipate a positive readout.
But obviously the scenario painting would be one that the FDA would likely want to understand perhaps the data whether there are subsets that would be positive its.
Really a speculation to suggest that we would be able to predict what would happen our our into the expectation would be that if we file on time, we should receive approval and that that study should in fact be the supportive confirmatory study for a full approval in the U.S. and could be the basis of the European submission for full approval in Europe .
Great. Thanks, Oh, so another question for Urothelial carcinoma pivotal trial do you expected to recapitulate, what has happened in terms of the advocacy and your prior phase one two trial.
Yeah, there's really no reason to believe that the drug would behave differently given that we've studied it now in a a number of tumor types in the phase one study and these were meaningful number of patients but.
Yeah. The trophy study just to remind you that requires a prior checkpoint ER and we had a number of patients in the study in phase one that had prior checkpoints and there was really no discernible difference in efficacy.
But we look forward to presenting that data and hopefully we can put relating what was previously presented but we remain blinded to that study until were boarded and.
Again, no reason that given the safety profile and the efficacy has been established in a variety of settings, but until we have that data in hand, it's obviously a.
Speculation.
Thanks, that's helpful. Maybe last one from me can you. Please remind us what is the kind of value off the top two expression the basket trial and it did the same for non small cell lung cancer small cell lung cancer of course is are the types of metastatic solid tumors.
Sure. The trial is designed so that we will start with a 25% cut off.
But we have the ability to then raise that to to higher levels beyond that I think what will the way did design is the study is going to enroll is that we will start with a pilot cohort in non small cell lung cancer, and then expand into the other sub subgroups likely based on what we see will then establish the right cut off for the other.
So the other tumor types.
Thanks, a lot for your time.
Thank you Sandra.
Thank you.
When you have your next question coming from the line of Chris Howerton from Jefferies. Your line is now live.
Great. Thank you congratulations as well on the progress and thanks for taking the question. So.
I think the first for me is maybe for Scott you know Orbitz. After you submit a recently at the BLE could you remind us where we can expect in terms of the review cycle time, and white required activities and might need to happen, yes, da's perspective, so such as a facility inspection.
[laughter], Yeah sure absolutely so re file the B.L.A. they've got a two week the FDA has two weeks with which to accept.
The resubmission.
The review clock starts when God.
When we file [noise] its in the up depends how long that review clock takes given where we're at and the fact, we do to in fact need a pre approval inspection. They can schedule inspection anytime after after that point they could come in very quickly and we would know Bobby.
Ultimately be after its decision you know we're hopeful that they'll come in quickly we're trying to make this as quickly as we possibly can and again there they're very willing and have shown substantial interest in making this me to get this drug approved we're very confident and what we've done so far we're going to make the submission pretty clean so it's easy for them to review.
The preapproval inspection should go very well based on our plan and how we're executing against it and while it ultimately at some of the FDA is review in terms of how long they take 'em were optimistic that well they could take up to six months that the review clock and retirement approval time would be shorter than that ultimately see of today's call though.
Got it Okay sure and then I guess, maybe as a follow up on the Urothelial carcinoma.
Hi, obviously, Seattle genetics recently submitted applications. So just curious.
If anything's changed from a strategic perspective within that potential.
Thanks.
Speculation in terms of competitive.
Advantages 132 have died in that space.
Yeah, Chris I think we've known for some time that the these two assets would likely one day be on the market potentially side by side and.
I think we've talked in the past about targeting different having different targets.
In our case targeting trope too, which is obviously distinct from where you ve targets as well as a difference talk soon.
A safety profile and I think from what we hear from the clinical community is that they will likely be a role for both and possibly for both in the same patients if they progress Unfortunately due to disease progression with the use of one it would likely be relegated to the other drug and the question then becomes which one first and I think you know that there is a group that might think weve Seattle is earlier than they would have that benefit on the other hand. There is also a big desire on the part of the physician to make sure. They use the safer product first and this particularly frail population are elderly.
Men.
This is particularly challenging patient population.
And I think in that instance, I think the safety profile of our drug the longer duration that patients can benefit from a if that were to recapitulate from the phase one study that we saw.
I'll remind you our response rate were in the 30 some percent rate with a deal war.
North of.
12, and a half one thank you.
Beyond that the neuropathy is a big big differentiator between the two I think it's important to understand in the pivotal study.
In the case of easy I believe.
Baseline neuropathy was an exclusion criteria, we're treating an all comer population.
And so there are clear differences between the safety profile of the drug there will be differences likely into efficacy profile of the drug whether its response rate duration and we'll just have to see how the market sees the two but I really don't foresee a situation, which is a one product takes all because we already are encountering patients at a progress on avian they'll likely encounter patients that have progressed on trop two from prior studies that we've treated patients.
Okay, Great that's helpful and maybe a last one for me for some.
Obviously, you're able to get a really attractive deal from address in China any updates on.
I think you have other ex us deals.
Any update you want to provide on that aspect with respect to the business development.
Sure. Thanks, Chris.
Yeah.
We're very happy with that with the deal with Everest and as I reported in my remarks, we did get the $65 million in up in upfront payment. We continue to work with them to file their eye on D. and started a number of trial. So that we can get the product to greater China in additional indications as well beyond that we've previously commented that we will we are continuing to look at other opportunities in what I'll call rest of the world, which is X U S.
And as it pertains to commercialization there will continue to explore our options there whether we go it alone or we seek partnership will be dependent on a number of factors, including the types of terms and economics and the risk associated with the market.
Appropriate time.
Got it okay, all right well. Thank you some extra taking the questions and.
I really look forward to the updates over the next 12 months or so thanks.
Thanks, Chris.
Thank you.
You have your next question coming from the line of Michael Smith from Guggenheim. Your line is now right.
Hi, Good afternoon. This is Steve young for Michael Thanks for taking our questions. Our first question is on the sand trial. So since overall survival is the secondary endpoint of the study.
What the just wondering what is the hurdle for the overall survival in this patient population and also do you guys, but can't I can you guys provide some color on the powering assumption. This study.
And we also have a question on financial systems, both R&D cost and asking they were down compared with last last quarter.
Can you maybe provide some color on the reason in how should we think of the operating cost into 2020. Thank you.
Sure I'll take the first two incentive to solve for the spend.
Quickly in reverse order on the powering we've not previously provided powering nor will we do that on this call other than to say that were very well powered for the primary endpoint.
Likely well powered to or well overpowered in order to also have something worthwhile to see on the secondary endpoint of awareness with respect to the hurdle.
It's a secondary endpoint, so theres not a specific hurdle per se, obviously, you don't want that signal to go.
In the in the wrong direction, so thats important to see and hopefully be supportive on the other extreme.
Oh, the PFS PFS signal that you see but there is no hurdle per se I would say that it obviously if you have a good.
Trend.
Or strong supportive evidence of the PFS benefit also reflecting the Alaska.
But that would be important, especially for the European market where pricing.
Does look at the totality of the data beyond just the approved indication of the labeled indication.
So while PFS forms the basis of both regions in terms of what the regulators would like to see from an approval standpoint, we believe or west is likely going to be helpful, especially on the pricing side in Europe .
And on the question of spend R&D and as you know some.
Yes so.
Quarter on quarter as as we just mentioned in the prepared remarks.
This quarter was about $15 million.
More than what we spent in similar quarter last year predominantly driven by additional R&D expenses.
And so we just launched that Youre positive study, we just said.
As I just mentioned.
Chuck to enrich basket study thats around the corner, so investments there and as you know.
At this stage that we're in we are expensing.
Development costs.
Across CMC and manufacturing.
So thats it and given the fact that we're also in a re filing period theres. Some additional expenses there that account for the increase.
As it pertains to forward looking spend weve not given guidance on that I think you can look at sort of the trajectory over the last six or eight quarters antique kind of where we're trending.
Once we have approval and we go to market commercially we will think about how we want to provide guidance.
Great that's very helpful.
Thank you.
Thank you.
And we have a question coming from Matthew Harrison from Morgan Stanley . Your line is now lives.
Great. Thanks for taking my question to two from me.
I guess first can you.
Can you broadly talk about.
How we should think about.
Commercial ramp and when.
I mean, I know you I know you've had these people and you're obviously you know you've got the partnership with JJ for the year and I'm just trying to think about how we should think about any of that changing once you refile and if there's anything that happens there on that and then I have a second follow up on the European study.
When you talk about commercial ramp you're talking about the ramp in commercial spend once we file oriented.
Just.
I'm just trying to understand if there should be any significant change to the commercial spend that you already have in place I guess, that's right yeah.
I think.
Yeah, we basically are fully staffed up more or less on the sales are on the on the sales front there will be additional in terms of the sales reps I should say in terms of just launch preparation costs as well as in the launch period. There are always additional marketing spend that you incur which are third party activities.
Well, we're not in a position to really provide guidance, but there certainly will be increased activities, but in terms of headcount there will be additional hires to to to build out the marketing organization.
But certainly the heavy lift if you will the larger organization remains intact as you referenced the JNJ relationship that we have which is.
Obviously, a very productive ways to keep our team together that should not dramatically change on the on the spend for.
Okay. Thanks, and then and then the follow up question is on the.
Your your if you will say I guess can you just talk to.
What the hurdle rate is to to declare.
As you know.
Efficacy here I guess, what I'm asking is my understanding that this is a fine.
Two stage design and and I thought you know the ability to to declare that you know you can stop the study at the interim it is quite high and Simon two stage. So maybe you can just address that a little bit. Thanks.
We haven't really gone into details on what the interim hurdle is.
What I would say is that the hurdle is.
I think that perhaps some more.
Insightful or the best way to think about it is if you think about what you would expect to see in this setting.
A high single digit low double digit responses on fuel background therapy.
And you see that separates meaningfully from that would I think be viewed by the regulators in the clinic committed is beneficial and thats, what we hope to to have obviously, our prior data significantly surpasses that level.
So there is a lot of room between.
Yeah, well background would be and what would be meaningful to the clinical community, having said that we certainly hope that we can recapitulate. Prior data, we'll just have to see how it shakes out.
The Simons two stage is sort of.
Our enrollment is going pretty well so I don't think we would at this point I anticipate.
Any sort of interim would what would prevent us from competing enrollment we'll have to see how that plays out.
Does that answer the question Matt.
Yes. Thanks, Okay. Thank you very much.
Thank you at this time I would like to hand, the conference back over to tell Chang post closing remark.
[noise], yeah on behalf of the entire leadership team I'd like to thank you all very much for joining us. This afternoon, we look forward to updating you in the future on our ongoing progress.
That does conclude today's conference call. You may now disconnect. Thank you and have a great. Thanks.
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