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spk01: The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1.
spk08: Good day and thank you for standing by. Welcome to the Addi Bioscience, Inc. Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would like to hand the conference over to your host today, Marci Graham, Senior Vice President, Investor Relations and Corporate Communications.
spk09: Please go ahead. Thank you.
spk11: Good morning and welcome to the Addi Bioscience Conference call to review results of and provide an update on the third quarter of 2022. Joining me on the call today is our founder and CEO, Neil Desai, who will provide an overview of activity during the quarter, followed by Brendan Delaney, our Chief Operating Officer, who will give us an update on our early commercial progress. Next will be our Chief Medical Officer, Dr. Loretta Eitri, who will give us a brief update on our clinical progress. followed by our CFO, Scott Giacobbello, with a review of our financial performance during the period. We will open the line for questions at the end of the call following closing comments. Before we get started, a quick reminder that statements made on the call today will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors. including those set forth in the risk factors section of our annual and quarterly filing with the Securities and Exchange Commission, which can be found at www.sec.gov or on our website at www.addiebio.com. In addition, any forward-looking statements made on this call represent our views only as of today, November 9, 2022, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. With that, I will turn the call over to Neal for his opening statements. Neal?
spk07: Thank you, Marcy. Good morning, everyone, and thank you for joining us today for the earnings results call for the third quarter of 2022. 2022 has been a transformational time for Addy. Following FDA approval in late 2021, we successfully launched our first product for the treatment of advanced malignant picoma in early 2022. We drove forward our registration-directed trial, Precision-1, in solid tumors having TSC-1 or TSC-2 inactivating alterations. We completed a pipe financing of $72.5 million that extends our runway into 2025. We initiated a collaboration with Miradi Therapeutics for a new combination clinical study in patients with KRAS G12C mutations as part of the strategy to expand indications for FIRO. And we grew the company to over 80 employees with a stellar leadership team now in place. All of this progress positions us extremely well for the next phase of growth and operational excellence as a multi-stage precision oncology company. As you may have seen in our announcement out last evening, beginning at the start of the new year on January 1, 2023, we are planning a management transition and realigning our leadership structure to reflect our recent progress. This will allow me to move into the role of executive chairman while our current CEO, Brendan Delaney, will transition to president and CEO. I've been fortunate to work very closely with Brendan since he joined us as chief operating officer in September 2021. Since that time, his proven track record and committed leadership have been instrumental in building the organization, achieving our milestones, and preparing for the growth that lies ahead. We are at the perfect time for this transition, and I am pleased to welcome him into this new role. Going forward from January 1, Brendan will assume leadership of the company as we continue to gain momentum in the commercialization of FiRO in PECOMA, advance our registration-directed Precision 1 trial, and prepare for the potential commercialization of FiRO in patients with TSE1 and 2 inactivating alterations, which is one of the larger targets I will continue to serve on the Board of Directors alongside Brendan, where my focus will turn to the advancement of our scientific initiatives. Congratulations, Brendan. We look forward to your leadership in 2023. The last several months have been some of the most active and productive for us to date, and we have seen impressive execution across the company throughout the third quarter and into the current period. Importantly, our promise as an organization and the value we are working to create is supported by high-quality institutional investors, some of whom recently participated in a $72.5 million pipe financing at the close of the quarter, significantly strengthening our balance sheet. This allows us to further extend our cash flow into 2025, not only getting us through the continued commercialization of FIRO and PECOMA, and the completion of the Precision 1 trial, but also enabling us to continue to evaluate strategies for broadening FIRO indications beyond PECOMA and TSC 1 and 2 inactivating alterations. Our commercial success with FIRO and PECOMA continues with a 24% increase in net product sales over the second quarter. We have seen increasing adoption in the community setting and key uptake in our target regions, which are indications of our progress made during the quarter. On our tumor agnostic precision one study, we saw continued advancement during the quarter in patient enrollment and site initiation with numerous clinical centers and just-in-time sites now open. As a reminder, this is a prospectively designed registration-directed trial. We are encouraged by our progress and are on track to provide preliminary data on a meaningful number of patients in the first half of 2023. Loretta will join us shortly with commentary on our progress on the clinical front in the third quarter and our progress to date. Lastly, at our core, ADDIE was built around the central idea that a best in class mTOR inhibitor could unlock the broad promise of the mTOR pathway itself. both as a potent single agent in indications like PCOMA and TSC1 and 2 inactivating alterations, but also in combination with other agents. A few weeks ago, we announced a clinical collaboration with Miradi, a leader in KRAS inhibition, to evaluate the combination of adagracid and napsirolimus in KRAS G12C mutant non-small cell lung cancer and other tumors. The mTOR pathway is often activated in patients with the KRAS mutation, and may contribute to adaptive resistance to KRAS inhibitors. So this combination strategy is expected to improve outcomes for these patients. We continue to evaluate expansion opportunities for our pipeline with the goal of becoming a leading precision oncology company in the future. With that, it is my pleasure to turn the call over to Brendan Delaney, who will become our new president and chief executive officer starting January 1. Brendan?
spk06: Thanks, Neil, and good morning, everyone. I'm honored to have been selected to lead this organization. I'm excited about the opportunity to continue working with Neil and the entire team here in the CEO role, and I look forward to what we can accomplish together as we prepare for launching in TFC1-2 inactivating mutations, a sizable tumor agnostic oncology indication. Our team is functioning at a very high level right now, and our future is bright. I feel very optimistic about our trajectory and our continued execution as we advance our precision one trial and further expand the clinical opportunities with FIARO. I couldn't be more pleased with the performance our team has demonstrated, and it's energizing to consider the potential achievements that lie ahead. Our commercial oncology franchise is growing, and I believe we are well positioned to achieve our goal of expanding FIARO indications and continue to provide therapeutic benefit to patients in need. Let me turn now to our oncology franchise. In the third quarter of 2022, our second full quarter of sales of Fyaro and Pacoma, we were happy to see steady growth in demand, despite the unpredictability of sales in the summer months. We achieved U.S. net product sales of $4.2 million during the period, representing 24% growth over the second quarter, and bringing total U.S. net product sales for the first seven and a half months of launch to $10 million. Insights from our recent launch tracking surveys show very strong brand awareness, message recall, product perceptions, and intent to prescribe among physicians who treat PECOMA patients. We are building momentum across our major sales regions with sustained growth in the overall number of accounts and excellent reorder rates within major cancer centers indicating that some patients are experiencing continued benefit from use of Faiaro. In the community setting, the uptake continues to increase, now accounting for about 60% of sales overall. Further, we are promoting our science at key medical meetings like ENA and CTAS, which we believe further expands both our brand and company awareness. As of September 30th, there were more than 90 unique accounts ordering Faiaro, up approximately 50% from last quarter, with a reorder rate still exceeding 80% across all ordering accounts. Adoption in the academic treatment centers remains strong, and we continue to be impressed by the fact that almost half of ordering accounts since launch are now represented by those in the community treatment setting. Our market access team continued to deliver broad patient access to FIARO in the third quarter. We are closely monitoring payer metrics, And I'm happy to report that as of September 30th, payers covering approximately 85% of commercial lives in the U.S. market have reviewed and adopted a formal FIARO coverage policy. This rapid payer progress, combined with a strong suite of patient support resources available for our AddiAssist program, has continued to provide strong patient access to FIARO since FDA approval. Our team is excited about what is to come as we head into 2023, and I personally could not be more enthusiastic about my expanded role in helping to lead this team to future success. Thank you. I will now turn the call over to Loretta to discuss the progress of our clinical program. Loretta?
spk12: Thank you, Brandon. In the third quarter, we've continued to see good progress in our ongoing Precision 1 tumor agnostic trial as the number of open sites increased, along with access to patients both in cancer centers of excellence as well as in the community setting. We have achieved our goal for the year of opening the trial in at least 20 major cancer centers and upwards of 120 treatment sites in the United States. Staffing shortages due to COVID continue to impact most centers, causing widespread startup delays. Despite this, patient accrual remains on track as projected, reflecting the hard work of our dedicated team. Our partnerships with three of the leading next-generation sequencing companies have been successful in affording access to patients in community-based practices. Using these enables us to routinely identify patients with TFC1 or TFC2 in activating alterations who are eligible for the PRECISION1 trial. We have broad geographic coverage in the United States and continue to leverage the NGS provider's internal physician networks to locate and identify new potential patients on an ongoing basis. Importantly, We have finalized our partnership with U.S. Oncology and have begun to identify patients from their broad community base. Using U.S. Oncology's STAR program, we can rapidly activate individual sites once a patient is identified who qualifies for the trial. We are still relatively early in the process, but our multifaceted approach to rapidly identifying the appropriate patients with TSC1 or TSC2 inactivating alterations who may benefit from trial participation appears to be working. We continue to believe that full patient enrollment into the study will be completed within 24 months from first patient treated. The reception from the oncology physician community continues to be encouraging. And in the last quarter, we have held advisory boards across several important subspecialty oncology groups, which have provided an opportunity for education and meaningful feedback. As a cross-functional team, we have begun conducting widespread print and electronic awareness campaigns for the PRECISION I study in order to increase visibility to the entire oncology community. Additionally, We are now working with Mirati to initiate an open-label phase 1-2 trial to determine the optimal and recommended phase 2 dose for the combination of adagracib and napserolimus in patients with KRAS, G12C mutant, non-small cell lung cancer, and other solid tumors. We recently presented preclinical data on the combination of KRAS inhibitors and napserolimus at the AACR NCI EORTC Molecular Targets Meeting in October, which laid the foundation for our partnership on combination strategies to treat non-small cell lung cancer and other solid tumors. The preclinical results presented demonstrate that Napsterolimus has the potential to significantly improve the anti-tumor activity of KRAS inhibitors. encouraging the further exploration of the potential for these combination treatment options. We are continuing to evaluate additional indications for nab serolimus, either as single agent or in combination, and have been gratified by the level of interest in our conversations with the oncology community. I will now turn it over to Scott for a financial update. Scott?
spk02: Thanks, Loretta, and good morning, everyone. We had another strong quarter as we head toward the end of 2022. As Neil mentioned in his opening remarks, we completed a $72.5 million pipe financing in September and remain well capitalized, ending the third quarter with cash, cash equivalents, and short-term investments of $183 million, which we expect to fund operations into 2025. Fiora Net product sales amounted to $4.2 million for the quarter, representing a 24% increase over Q2. Research and development expenses for the quarter increased to $8.8 million as compared to $5.8 million in the prior year quarter and $7.7 million in the second quarter. This increase is primarily related to the continued progress of the ongoing Precision I trial and the build-out of the R&D organization. Selling general administrative expenses for the third quarter were in line with the second quarter at $9.9 million compared to $7.4 million in the same period in 2021. This increase is primarily due to the build out of our commercial operations and infrastructure and increased marketing expenses related to the commercial launch of Fiora. Net loss for the third quarter was $14.5 million compared to $87.1 million in the third quarter of 2021. The prior year quarter included the non-cash impairment charge of $74.2 million related to the acquired contract intangible asset incurred in conjunction with the RPO merger. For more information, a detailed discussion of the results reported on this call will be provided in our 10Q to be filed later today. I'll now hand the call back to Neal for his closing comments. Neal?
spk07: Thanks, Scott. As you've heard today, our efforts in 2022 have led us to continued advancements throughout the organization. While we've achieved many corporate milestones, our focus continues to remain on the patients we serve and we're encouraged by the impact FIRO is having on people's lives and look forward to furthering its potential benefit to patients in need. With that, we can open the line for questions. Operator?
spk08: Thank you. If you have a question at this time, please press star 11 on your telephone. One moment while we compile the Q&A roster.
spk09: Our first question comes from the line of Roger Song with Jefferies.
spk08: Your line is open. Please go ahead.
spk05: Great. Congrats for the great call, and thank you for taking our questions. A couple from us. The first one is, you know, so you launched the drug affair 10 and a half months, and we see the steady growth. So just curious, how do you see the trend for the growth and when – you will start to get, we can see some kind of steady state for the growth, particularly after the Penta demand in the beginning. Thank you.
spk07: Yeah, hi, this is Neil Desai. Brendan, would you like to take that question, please?
spk06: Yeah, sure. Hey, Roger, how are you? Thanks for the question. You know what, Roger, it's a little too early, as we've said. I'd like to get at least a year or so under our belt before we start predicting steady state. As you recognize, the growth continues, and I think a lot of the trends You know, the breadth of adoption is particularly impressive to me, as is the adoption in the community setting. As you've noticed from the, you know, first partial quarter in Q1 to Q2, now to Q3, approaching 60% of the ordering accounts in the community setting is far, you know, well and above what I expected. So all of the trends, new accounts over 90, as we stated, and if you track that from, early on, continuing just to show good growth. I don't expect that to stop anytime soon. So I'm not going to give a prediction on when it goes to the steady state. A couple of things I will say about the launch evolution and the bolus. We're starting to recognize, and again, it's early and we're not going to give a number because of the kind of rough data that we work with. I would say the duration of therapy starts to look like it's trending in the right direction, as you would expect, right? If you have bolus of patients and early patients coming on as we said you have to meet those patients where they are in their treatment path right and sometimes that means they're heavily pretreated where you might expect a shorter duration we're starting to see the turnover of that group into more frontline penetration so newly diagnosed the coma patients and as that starts to turn over we expect to see longer duration again it's early but you're starting to see that expected transition and positive trends in duration. Hope that helps.
spk05: Yeah, that's excellent. Great to hear for the trend. Maybe just another question for the precision study, TSC 102. Just curious, I know you have been opening a lot of new sites. Just curious, the enrollment, how did that align with the epidemiology? Because, you know, so you get a pretty decent job for characterized epidemiology, 10 plus, maybe 12,000 plus for TSE 102. How do you see that in the real world? That's my first part of the question. The other one is you're reporting the initial data first half next year. So how should the investor interpret that data? And do you have any internal bias to hit in order to make go-no-go decision from there? Thank you.
spk07: Yeah, hi, this is Neil. I can take a little bit of that question and then pass it on to Loretta. So the first part of your question was around epidemiology and enrollment. And we are seeing that indeed there's a good number of TSC1 and TSC2 patients that are out there. And we know this through our relationships with the NGS providers. And we can follow all of those patients. And then eventually when they're ready, we can track them and put them on the trial. And so there's definitely, it sort of lives up to its expectations in terms of the number of patients and epidemiology. So that's the first part of your question. In terms of the data set, we are still on track to release data in the first half. So nothing has changed there. What we're waiting for is maybe some additional enrollment, and we'll see how that goes for the next few months. And after that, we'll be able to provide some more color on timing. Loretta, would you like to add anything more to that, please?
spk12: No, I think in general, we're in a very tight alignment on our take for this, Neil. I think that what we've seen early on is that the accrual is very closely following the epidemiology that we had before we started the study. So there have been no surprises to date. Thanks.
spk05: Action. Thank you both. Yeah, that's from us. Congrats again.
spk04: Thank you.
spk08: Thank you. And one moment for our next question. Our next question comes from the line of Boris Peeker with Cowan. Your line is open. Please go ahead.
spk04: Great. Congratulations on excess progress. I just have two questions on my end. First, do you have data to show on what line of therapy Fiero is being used? And second, are you doing work on PECOMA epidemiology in general? And if so, when can we get a better understanding of how many patients there really are out there?
spk07: Yeah, Brendan, would you like to take those two questions?
spk06: Yeah, sure. Hey, Boris, how are you? Thanks for the question. As far as data, as I've said before, Boris, the data is pretty scattered here because of the lack of epi data, but also the claims data is very unclear. What I will say is we do tracking studies, right? And we track a random sample of the oncology community in the U.S. and see what their intent to prescribe is. So that way kind of follows what you would expect an early launch right where responsive from physicians who've used the drug say that they've used it in the late line later line settings early on but that's starting to shift very quickly to the front line right so i think again early on um uh you know you would you would expect a lot in the in the second third line setting although we don't have a specific number but based on the market research it looks like you're north of starting to get to you know 50 to 60% or so of the frontline penetration. Again, that's just based on market research. That's not based on claims data. Hopefully, we have better claims data as we go forward. But because of the lack of codes for PECOMA, that also becomes pretty difficult. But I think I would just say it's trending in the right direction as far as evolution from later lines to the frontline setting. I wouldn't expect too many newly diagnosed PECOMA patients going forward not to see FIARO in the frontline setting. It just takes time and hopefully that helps.
spk04: And then just on PECOMA epidemiology in general, like to get a sense of how many patients are out there?
spk06: Again, I think it's a little too early for that, Boris, for the same reasons I described. I think the best which we try to provide color on is we're north of 90 accounts as of the end of Q3. And I think sometimes that's not a perfect, you know, indicator of the number of patients because some patients do get a diagnosis somewhere and go elsewhere for their treatment, right? But it gives you a, I think the number of accounts gives you a rough idea of individual accounts somewhat can be associated with an individual patient and it's the best indicator we have. Still early though, Boris, I'd like to get at least 12 months under our belt of launch to really start saying, you know, where do we sit within that range that we've provided of 100 to 300 patients? I think it would be inappropriate for me now to kind of comment on a specific number, but hopefully that helps.
spk04: Great. Thank you very much.
spk09: Thank you. And one moment for our next question. Our next question comes from the line of Joseph Cantazoro with Piper Sandler.
spk08: Your line is open. Please go ahead.
spk03: Hey, guys. Thanks so much for taking my questions here. Maybe one quick one from me on the adagrassive combo. I guess when we think about the lung cancer and colorectal cancer, is there any reason to think why one tumor might be more amenable to this combination strategy? And I guess along those lines, whether there are co-alterations with G12C that make the most sense. And I guess I ask that as I look at some of the preclinical data you've presented and the tumor types with co-alteration in P10 loss, looking to generate some pretty robust synergy, whether, you know, and that being a common alteration in colorectal cancer to keep in mind. So any thoughts there would be super helpful. Thanks.
spk07: Yeah, hi. This is Neil Desai. Hi, Joe. So, good question on that. I can tell you at the outset we don't have all the answers because we have to look at a broad series of different types of cell lines and tumors to figure that out, and that type of work is still pending. There's, I mean, as we've seen from the KRAS data itself, not necessarily the combinations, You know, depending on whether it's lung or colorectal or some other tumor, the response can be different. So, I would say that that possibility would also extend, you know, when you're doing the combination. but obviously things like PTEN loss and other mutations that could be more related to the mTOR pathway, you know, have the potential to respond better to the combination just because you're suppressing mTOR. So I think without enough information, I think that's the best we can say at this point, but we will continue to look. at the different spectrum of, you know, mutation profiles and see what ultimately works the best.
spk03: Okay, great. And maybe just a quick follow-up, I guess. Is the plan to enroll patients who are naive to G12C inhibitors or those patients with prior exposure and then try to, you know, resensitize them with the combination?
spk07: Actually, the plan is for both. So once we've completed the phase one dose finding study, then there will be two separate arms, one for naive and one for exposed. So we will get an idea very clearly of how the combination helps, particularly in the previous resistant or exposed patients.
spk03: Okay, great. Thanks so much for taking my question.
spk08: Thank you, and one moment for our next question.
spk09: And our next question comes from the line of with .
spk08: Your line is open. Please go ahead.
spk10: Good morning, team. Thank you so much for taking my question, and congrats on the progress. My first question will be on the CRO. I was curious, what is the feedback you get from physicians and patients? And then we might see the duration of response data that you commented on, Brandon.
spk06: I'm sorry, Ahu, the first part broke up a little bit. Are you saying what have we heard from patients and physicians? Or I'm sorry, can you clarify?
spk10: I was curious about the real-world patient feedback who are using it.
spk06: Yeah, no, listen, I think we've had a lot more physician feedback than patient feedback, but certainly I think it's positive on both fronts. Now, unfortunately, you know, depending on where a patient is, not every patient, you know, gets the maximal benefit depending on, you know, if it's second line, third line, as we discussed. But certainly I think we can see that and hear that a number of patients are doing quite well. From the physician side, as we've said in the past, I think the feedback has been overwhelmingly positive. Obviously, these physicians who treat the coma patients are extremely excited to have an approved therapy, especially one that's recommended by the NCCN guidelines. But certainly from the data, as I've said before, they're impressed. I mean, they see this as a very differentiated drug. along all aspects, so impressed by the 40% response rate, also the disease control rate of over 70%, but most differentiating, as we've mentioned before, is the duration of response, and the duration continues to be the most differentiating aspect here, and I think we're starting with the evolution from the launch of the bolus to now penetration and frontline. I think we're starting to see that in the numbers again, you know, what we can extrapolate as far as duration of therapy. So I couldn't be more happy with the acceptance of the clinical profile of the drug. Also, from a safety perspective, right, as we've said before, physicians are quite familiar with managing mTOR inhibitors, and they see their profile as predictable and manageable, right? And I think that's incredibly important. The last thing is, in the prepared remarks, market access continues to be very positive with north of 85% for covered lives. And I think that has continued to grow since early on and continues to be impressive. So hope that helps.
spk10: Definitely helpful, Brandon. So I would also like to ask about the ex-US commercial efforts. Is there any updates on the EME side, or are we going to see any partnerships ex-US?
spk07: Yeah, hi. This is Neil. I can take that question. On the EMA front, I think we had mentioned earlier on or earlier in the year that we were looking for scientific advice and waiting to complete that procedure. So we have, in fact, completed that. And there's no restrictions that were seen in that advice. And that if we did want to do so, we could file an MAA with the current trial as we have it with our registration trial in the U.S., So that's behind us now. I think where we sit at this point is to evaluate sort of the full scope of what it takes to launch a drug in Europe. And we're evaluating the business case of that as we speak. So I think at some time in the future, we would have some more color on that.
spk10: Thank you so much for taking my question.
spk08: Thank you and I'm showing no further questions at this time and I'd like to hand the conference back over to Neil Desai for any further remarks.
spk07: Hello all and thank you for joining us on today's call. We really appreciate your time and look forward to the opportunities in the future to provide additional updates on our progress. Have a great day. Thank you.
spk08: This concludes today's conference call. Thank you for participating. You may now disconnect.
spk09: Everyone have a great day.
spk01: The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1. The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1.
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