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spk02: Good afternoon, and welcome to the Vail Oncology First Quarter 2021 Financial Results Conference Call. At this time, all participants are on a listening mode. After this speaker's presentation, there will be a question and answer session. To ask a question at that time, please press star then 1 on your touchtone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference over to your host, Mr. Eric Lucera, Chief Financial Officer of Vail. Sir, please go ahead.
spk05: Thank you, Operator. Good afternoon, and thank you all for joining us on today's call to discuss Aveo's first quarter 2021 financial results and business update. I'm joined today by Michael Bailey, Chief Executive Officer, Mike Ferraresso, Chief Commercial Officer, and Dr. Michael Needle, Chief Medical Officer. Before we begin today's call, let me remind you that during this discussion, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to important risks and uncertainties, including those that are detailed in today's press release and in the risk factors section of our most recent quarterly report on Form 10Q, which is on file with the SEC, that may cause actual results to differ materially from those expressed in such statements. Furthermore, we caution you that these forward-looking statements represent our views only as of today, and we do not assume any obligation to update these statements whether as a result of new information, future events, or otherwise, except as required by law. With that, I'll now turn the call over to our President and Chief Executive Officer, Michael Bailey. Michael. Thank you, Eric, and good afternoon, everyone. Thank you for joining us on today's call. We're excited to have the opportunity today to share with you our progress for the Fatibda launch, as well as the business and financial results for the quarter. During this call, we plan to provide you with our early launch metrics through April 30th in an effort to provide you with a snapshot of our initial launch performance. Before we get into the details of the initial launch metrics, I would like to mention the recent release of abstract titles from ASCO. At this year's meeting, we look forward to presenting updates from the TiVo 3 study that explore long-term patient follow-up, and further highlight FITIVDA's unique tolerability profile. In addition, we are excited to present the results from our randomized confirmatory phase 2 trial for ficlotuzumab plus or minus Erbitux in a population of head and neck patients who have progressed through all available therapies, including platinum, PD-1, and Erbitux. Now turning to the launch of FITIVDA. The first quarter of 2021 has been a truly transformational time for Aveo, marked by U.S. FDA approval of our first commercial product, Fatibda, our differentiated once-daily VEGFR TKI. Fatibda is approved for the treatment of adults with relapse to refractory advanced renal cell carcinoma, or RCC, following two or more prior systemic therapies. Notably, this approval was based on the Phase III TiVo III study, which is the first positive RCC Phase III study in this setting and the first RCC Phase III study to include a predefined subpopulation of patients who received prior immunotherapy, the standard of care in earlier Lyme treatment. Prior to FATIPTA's approval, the therapies used in these settings were typically chosen based on extrapolating clinical data from earlier treatment settings and from clinical data sets that did not include prior immunotherapies. In addition, a large percentage of patients opted out of later Lyme therapy due to concerns with tolerability. With the U.S. FDA approval of FITIVDA, the oncology community now has an evidence-based treatment option with a manageable safety profile to offer patients and help address this significant unmet need. The importance of Fatibda's new role in the treatment paradigm was underscored by its addition to the National Comprehensive Cancer Network's Clinical Practice Guidelines, or NCCN, in March as a recommended regimen for subsequent therapy. With the FDA approval in hand, we were able to rapidly execute on a commercial launch thanks to the hard work of our commercial and medical affairs teams leading up to the FDA's decision, coupled with the full deployment of our sales organization. While it is still early, we are pleased with the initial positive indicators. In an effort to provide you with a snapshot of our preliminary launch performance, I will now turn the call over to Mike Ferrareso to provide an update on the commercial launch. Mike? Thank you, Michael. As Michael mentioned, we are very encouraged by the progress we have seen thus far in the launch of PhotigDuck. We are pleased to share with you results from our first reported quarter as a commercial stage company, as well as some more recent launch insights that we've observed in the second quarter through the end of April. Recall that Fotivda was approved on March 10th, 2021, with commercial availability formally commencing on March 22nd, 2021. For the nine days until the end of the first quarter, net product revenue was $1.1 million, which reflects inventory shipped to distributors and our 15% gross to net estimate. It's important to note that since the close of the first quarter, all of our distributors have reordered product, and in fact, all of them have reordered more than once. Through April 30th, a total of 49 commercial prescriptions have been filled through our specialty pharmacy and specialty distributor partners. And additionally, 75 FOTIVDA-free one-month patient experience starter kit samples have been requested and delivered, representing a potentially important leading indicator for future prescriptions. While we're in the early days of this launch, we believe we are off to a strong start. We continue to focus on educating the community and raising awareness of how FOTIVDA can help fill the unmet need in the treatment continuum. Key to this effort is establishing Fortivda's differentiation, including its distinct characteristics as a potent, highly selective, long half-life VEGF receptor TKI, as well as sharing the unique data set established in TiVo3. Our commercial outreach spans prescribers across all settings, from major academic centers to the community. While the COVID restrictions have slowed our ability to reach all of our customers as quickly as we would like, The reception to Fortivda has been very positive, the unmet need is real, and our reach expands deeper in the RCC market every day we're in the field. As with any new launch, initial prescriptions take time to fill as we establish our reimbursement. We've had very few reimbursement rejections and continue to improve our coverage and thus reduce the time from physician prescription to patient use. Our Quick Start program has been effective at getting patients on active treatment quickly and avoiding any interruption of patient care while benefit verification is underway. I will now turn the call over to Michael Needle to discuss progress with the remainder of our clinical development programs. Michael?
spk04: Thank you, Mike. While we are keenly focused on executing on Fortivita's launch, we continue to make meaningful progress advancing the bounds of our clinical pipeline. In addition to the current monotherapy approval, we are also focused on the evaluation of tavazanid in the immunotherapy combination setting. The introduction of immunotherapy VEGF receptor TKI combinations marked a significant evolution in the treatment landscape of first-line RCC. We believe that this benefit could extend to the relapse refractory setting with an effective, well-tolerated combination. In March, we were pleased to announce our clinical trial collaboration and supply agreement with Bristol-Myers Squibb to evaluate tavazanib in combination with nivolumab or Opdivo, Bristol-Myers Squibb's anti-PD-1 therapy. In the planned phase three Tenevo 2 trial for patients with advanced relapsed or refractory RCC following prior immunotherapy exposure. Recall that we previously assessed this combination in the Phase 1-2 Tenevo study, which demonstrated favorable tolerability and prolonged PFS in both treatment-naive and previously treated patients with advanced RCC. We look forward to furthering our understanding of the activity and tolerability of this combination following prior immunotherapy. We recently received FDA feedback on the trial design, and we are working with the agency to finalize the study design. We are targeting to commence enrollment in Tenevo 2 in mid-2021. We also remain on track to complete enrollment later this year in the Phase 2 portion of the Phase 1b2 deductive trial of Tavazavib in combination with Dervolumab or Infimzi, AstraZeneca's PD-L1 therapy in patients with hepatocellular carcinoma or HCC. At the ASCO GI Cancer Symposium in January, we shared data from the phase 1B portion of the trial. No dose-limiting toxicities were observed with the combination, which demonstrated a 29% partial response rate and 71% disease control rate. These findings were compatible with the bevacizumab and atezolizumab combination, which is an emerging standard in the care of the same setting. With a five-year survival rate of less than 5%, Advanced or metastatic HCC represents an area of high unwritten need. We believe Tavazinib has the potential to serve as an attractive VEGF receptor TKI to be used in combination with immunotherapy in this disease. Moving to Ficlotuzumab, our HGF-C med inhibitor, in January we announced completion of enrollment in the randomized confirmatory phase 2 study of Ficlotuzumab as a single agent or in combination with cetuximab or Erbitux, an EGFR-targeted antibody in metastatic head and neck squamous cell carcinoma patients who have failed prior immunotherapy, chemotherapy, and cetuximab. This study was designed to confirm findings from a Phase I-II study of ficoetuzumab and cetuximab, where the combination was well-tolerated and resulted in a disease control rate of 67%, as well as prolonged PFS and OS compared to historical control. We will present results from the Phase 2 study at the upcoming ASCO meeting in June with a Phase 3 go-no-go decision for ficletuzumab in head and neck squamous cell cancer to follow. As a reminder, in September 2020, we regained full global rights to ficletuzumab and have initiated clinical manufacture to supply the potential phase three clinical trial in head and neck squamous cell cancer and consider additional development beyond that. Progress also continues for our early stage programs, AV380 and AV203. For AV380, our GDF15 inhibitory antibody that we are developing as a potential treatment for cancer cachexia, a phase one study in healthy volunteers is now underway following the FDA's acceptance of our IMB application earlier this year and will guide us on our safety and dosing profile ahead of our advance into cancer patients. Finally, for AV203, our ERB3 inhibitory antibody, in March we were pleased to share that we will regain full global rights to AV203 following the voluntary termination of our collaboration and license agreement with Cambridge. We expect to provide an update on clinical development plan in the second half of this year. With that, I will hand the call over to Eric to discuss first quarter 2021 financial results. Eric?
spk05: Thanks, Mike. We ended the first quarter of 2021 with cash, cash equivalents, and marketable securities of $121.4 million compared with $61.8 million at December 31, 2020. We also have an additional 10 million of available credit from Hercules, which gives us up to 130 million of total potential available capital. This figure includes the approximately 78 million we added to our balance sheet during the first quarter of 2021, consisting of a $20 million drawdown under our previously announced $45 million loan and security agreement with Hercules Capital, 3.1 million from warrant exercises as of March 31st, 2021, $3.4 million in stock sales under our at-the-market sales agreement with SVB Lyric, and $51.6 million in net proceeds from a public offering of our common stock. Net product revenue for the first partial quarter 2021, which consisted of a total of nine calendar days, was $1.1 million. Research and development expense for the first quarter 2021 was $5.8 million compared with $7.8 million in the first quarter of 2020. Selling general and administrative expenses for the first quarter of 2021 was $15.1 million compared with $3.7 million in the first quarter of 2020. The net loss for the first quarter of 2021 was $22 million or a net loss of $0.81 per basic and diluted share compared with a net loss of $8.4 million for the first quarter of 2020 or a net loss of $0.52 per basic and diluted share. We continue to expect that our commercial spend will be approximately $40 million for the year. Gross margins should continue to be in the mid to high 80% range. R&D should be around $40 million for our existing pipeline plans during 2021. In addition, quarterly G&A should approximate the level seen during the first quarter for the remainder of the year. We expect that our existing cash, cash equivalents and investments and available credit under the Hercules facility will be sufficient to fund our launch and current pipeline plans. A full overview of results for the first quarter of 2021 are available in our quarterly form 10-Q. I will now turn the call back over to Michael Bailey. Michael? Thanks, Eric. Before we open the call for Q&A, I'd like to take a moment to thank the entire Aveo team for their hard work and unwavering dedication to our mission to improve the lives of patients with cancer. With the U.S. commercial launch of Fatibda now fully underway, we are thrilled to be able to bring this exciting new therapy to patients battling relapse or refractory kidney cancer who are in dire need of effective and well-tolerated treatment options. Looking ahead, we look forward to continued progress with the commercial launch of Fatibda here in the U.S., as well as the continued advancement of the remainder of our pipeline programs. We believe we are well positioned for success and look forward to providing updates on our progress in the coming quarters. We will now open the line to Q&A. Operator?
spk02: Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star then 1 on your touch-tone telephone. Again, to ask a question, please press star then 1. Our first question comes from Stephen Wiley of Siebel. Your line is open.
spk01: Yeah, good afternoon. Thanks for taking the questions, and congrats on the progress. Appreciate some of the early metrics here, and I know it's early days, but is there any color that you can provide or any commentary that you can speak to just with respect to, I guess, where you see initial traction? And I know that you talked in your opening comments about, you know, the lack of evidence-based treatment options in this, I guess, third-line plus setting. Are you seeing patients switched off of you know, I guess kind of an older TKI that's been recycled into later line without that evidence, or are most of the scripts that you're seeing written, are these patients who are kind of new to third line?
spk05: Casey, thanks for the question. This is Michael Bailey. I'm going to pass this over to Mike. He can give you a little color. We don't have quantitative analysis at this point of that detail, but I think the color might be helpful. Great. Thanks for the question, Steve. So, you know, as you said, it is very early. So all we have at this point is really anecdotal information about the setting and prior treatments. But I will say we are hearing of patient starts in all of the relevant settings. So what I mean by that are we have seen patients immediately following frontline combination treatment. We've seen the more traditional third and fourth line use. And we've also seen some patient starts in more of a very late line who may have opted for no further therapy, were for tib to not available, you know, considering hospice. So across the gamut.
spk01: Okay. And then I know you had mentioned, I think that maybe COVID is kind of impacting your ability to reach all of the accounts, but I guess of the internal target of high priority accounts that you have, you know, what proportion of those have you reached and, How do those split between academic and community prescribers?
spk05: Yes, Steve, so we're not reporting the specific reach numbers at this point. But what we are seeing is, you know, as we expected launching in COVID, the restrictions have slowed our ability a bit to reach our customers as quickly as we would like. We're a pre-COVID world, so nothing unique to us. But that said, the reception for TIVDA has been very positive. And every day we're out there, we get a little deeper into the target. So you can imagine initially we're focused on the highest-tier targets, and we'll continue to work our way through the list. And as we gain adoption, we can go deeper and deeper over time into the community setting where they still have these patients but fewer on an account basis.
spk01: Okay. And then maybe just lastly on Tenebo 2, is there anything that you can say just with respect to the regulatory feedback that you've received and I guess whether or not that's just the function of trial design or protocol-specific questions or issues that the agency might have.
spk05: Yeah. Hey, Steve. It's Mike again. We're not going to comment specifically on the regulatory feedback, but I think with our guidance and say we're responding to their questions and we still feel like we're on track for mid-year start.
spk01: Wonderful. Thanks for taking the questions and congrats. Thank you.
spk02: Thank you. Our next question comes from . Your line is open.
spk00: Hi. Good afternoon. Thanks so much for taking the questions and congrats on all the exciting progress this quarter. For the sample program that you're doing, can you talk about logistically how that's gone with the rollout and how many doses each sample includes?
spk05: Yeah, Mike, do you want to take that one? Sure, great. Thanks, Colleen, for the question. So our sample program, or as we call it, the patient experience program, it's a full one-month supply bottle that can be requested by physicians treating kidney cancer patients. We have, because of this virtual and in-person setting, we can get a signature live for a sample request. We can do it remote via a Zoom type of setting. And that simply goes back to us and it gets mailed to them within a day or two so they get the physical product. And again, it's a full one-month supply of drugs. So the reception has been fantastic. People are very excited to have the opportunity to get their hands on the drug, have it in their sample closet, and the next time they have an appropriate patient, they get that patient experience opportunity for themselves. So as we mentioned, we've distributed through the end of April about 75 of these patient experienced start kits so it it it's a full month supply so it'll take a little while to see the conversion rate of those into commercial prescriptions but we think this could very well be a good leading indicator of interest yeah colleen dude just as a reminder why this is an important program for us what feedback we've gotten from physicians who have used the drug is they get a very good impression uh certainly of the tolerability when they get a chance to actually try the drug. So this is a program that we'll try to encourage that early trial. Hopefully that will turn into long-term usage.
spk00: Great. Thank you. That's really helpful. I know it was still early. I know you mentioned 15% gross to net. Any insights into how that's looking so far in 2Q versus what your expectations are?
spk05: Mike, do you want to try that one? Yeah, it's very early. I don't think we have any updated estimate for Q2 at this point. I think the 15% for Q1 is all that we've calculated to this point.
spk00: Makes sense. the deductive trial in HCC. Can you comment on enrollment in this phase two and when we might see data from that study and then also what the path could look like beyond that?
spk04: Yeah, Dr. Mike, you want to take that? Sure. We actually don't provide updates on enrollment, but we still feel we are on track to complete enrollment by the end of the year. Um, the options really going forward, uh, obviously, obviously we are currently in the first line and we could, we could consider for the first line work. Um, another possibility actually is to look at what to do in the second line, uh, following, you know, Bevitezzo, for example. Um, obviously there's no approved, there's nothing really been tested in that setting. And this is actually not unlike what we're doing with Tenego too. These are conversations that we are having and will continue to have with our partner AZ. They're in this half-half with us. So it's open for further thought.
spk05: Yeah, just as a reminder, Colleen, we did report the Phase 1 data at ASCO GI. We had a 29% response rate, 71% disease control, which is comparable to what Bev and Tezo saw in that setting. we're encouraged by that, what we're seeing. And as Mike said, uh, would, if we couldn't complete the enrollment as planned, I would expect to be getting data reported early 2022. Awesome.
spk00: That's really helpful. And on this cyclic use map, if I can fit in one more question, uh, the cyclic use map update at ASCO, can you remind us what the powering was for that study?
spk04: Mike, did we report that? No, that's not. I'm going to make sure I'm not on mute. That's not really the design of the study. The way the study was designed was almost as if it was two phase twos wrapped up in one. One was cyclotuzumab single agent. The other was the combination. And in both cases, the combination was cetuximab. And the patient population was, like the phase one, patients who had failed cetuximab. The actual criteria for calling one of the two or either of the two arms positive was progression-free survival that excluded two months, where the lower confidence bound was less than two months. So that's the actual powering, as such as it is. There is no real powering for comparison. Obviously, what we'll be able to report, or pardon me, I should be fair, What Dr. Bauman will report at ASCO will be, in addition to that, response rates and medians, the usual. But it wasn't really powered to compare the two arms.
spk00: That's really helpful. Thank you.
spk02: Thank you. Our next question comes from RK of H.C. Wainwright. Your line is open.
spk03: Thank you. Good afternoon, Michael, Eric, and Mike. Glad to see the Fortinet scripts come in the first full month of launch. Could you, you know, I don't know if you're able to give this, but, you know, what percentage of these scripts are all these first-time scripts? Are there any reorders within that? And also, each script has, just like what you said on the samples, what is the number of pills? Is it a month's script or is it more than a month of drug in each script?
spk05: So, Mike, do you want to take that? Sure. Thanks for the question, RK. So, As you can imagine, this early on, we haven't yet had time for a patient to need a refill. This is still reporting on essentially our first five weeks of launch, and so it's all been new patient starts for prescriptions. We do have a few physicians who have started more than one patient, but the majority, it's starting their first patient. And the number of pills or the duration of a prescription is 28 days. So we're dosed three weeks on, one week off for a 28-day cycle. So each of these prescriptions is essentially a one-month supply.
spk03: Okay. And then, you know, of the 75 samples that are out there, you know, in your own thinking, you know, what percentage of conversion would would you consider as successful at this point? That's a trick question, Mike.
spk05: Great question, Arte. Our understanding is, you know, we believe the physicians have put through the effort to request a sample, intend to use it. I think the bigger question, I guess, for us and what we'll be watching is just the time and how long they have possession of it. If they're a busy practice, they may have a patient come in or a patient in mind at that moment. If they're a lower volume practice, they may have some patients who are now on an earlier treatment and they want to use it for their next and it's just going to be a matter of when that patient's current therapy is no longer working and they want to make that switch. So, you know, we think, again, they're only going through the effort to request these samples because they intend to use them. We just don't know exactly when the right patient it's going to present for that particular physician.
spk03: Okay. And then on the, I mean, the third line for RCC, advanced RCC, to date has been only clinical studies until 40. So what are you doing in terms of not only establishing a market, you know, for a therapy, but also trying to see if you can expand that market for the third line.
spk05: Mike, do you want to comment on that? Sure, Arte. Again, we feel we're in a very solid position having the first approval specifically in this setting. And when we look at the market today, the third and fourth line is about a $300 million market prior to our approval. We see from the decision resources data that only about half of patients in third and fourth line that could be treated are going on to active treatment. And those who are treated are treated for an average duration of only about four months. So we think there's a lot that POTIVDA can do here. And we're very excited by the early traction we've seen in the market. And we're getting great reception to our story. And our customers are certainly confirming the unmet need as we understood it in this setting. And again, the team's doing a fantastic job, and we look forward to continued progress.
spk03: Okay. So, and last question from me on T1, TNEO2, you know, the study is also looking at advanced relapsed refractory patients, but how different is this patient population in TNEO2 compared to what you are looking at in T03? Yeah, good question, RK.
spk05: It simply stated basically these patients are going to be second or third line versus TiVo3 was third or fourth line. You also would have to have immunotherapy immediately prior. So where that was a subpopulation of TiVo3, it is the entire population here. So we'd expect to see lots of, you know, IO-IO combinations or PD-1 TKI combinations as the immediate prior therapy to this study. And we think that, you know, keeping the IO pressure on makes a lot of sense. And, you know, with the tolerability of PIVO, we think the combination could prove to be a nice advance for patients.
spk03: Thanks. Thanks for taking all my questions.
spk05: Hey, thanks, RK.
spk02: Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Michael Bailey for any closing remarks.
spk05: Thank you all for joining us today, and thank you for your continued support. We're excited about the next coming quarter, so stay tuned.
spk02: Thank you all for joining today, and thank you for your continued support.
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