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spk03: Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Clovis Oncology fourth quarter and year-end 2021 operating results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. To withdraw your question, please press star 1 again. Thank you. Anna Sussman, Vice President of Investor Relations and Corporate Communications. You may begin.
spk07: Thank you, Chris. Good morning, everyone, and welcome to the Clovis Oncology fourth quarter and full year 2021 conference call. Thank you for joining us. You've likely seen this morning's news release, and if not, it's available on our website. As a reminder, this conference call is being recorded and webcast. Remarks may be accessed live on our website during the call and will be available in our archive for the next several weeks. Today's agenda includes the following. Patrick Mahaffey, our president and CEO, will discuss the highlights of today's corporate update. And then Dr. Thomas Harding, our chief scientific officer, will present an update on the 2286 and targeted radionuclide therapy development programs. Dr. Lindsay Rawls, our chief medical officer, will discuss the anticipated upcoming clinical milestones for BRUBRACA and FAP2286. Then Dan Muehl, our chief financial officer, We'll cover the financial results for the quarter and year in greater detail. Patrick will then make a few closing remarks, and then we will open the call for Q&A, during which time Pat, Dan, Tom, and Lindsay will be available to answer questions. Before we begin, please note that during today's conference call, we may make forward-looking statements within the meaning of the federal securities laws, including statements concerning our financial outlook and expected business plans. All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Our actual results could differ materially due to a number of factors, including the extent and duration of the effects of the COVID-19 pandemic and the timing and extent of recovery from it. Please refer to our recent filings at the SEC for a full review of the risks and uncertainties associated with our recent statements. Forward-looking statements speak only as of the date on which they are made, and Clovis undertakes no obligation to update or revise any forward-looking statements. Additionally, please note that we'll be discussing cash burn, a non-GAAP financial measure, during today's conference call. Required disclosures related to this are in today's news release, which can be found on our website. Now I'll turn the call over to Patrick Mahaffey.
spk05: Thanks, Anna. Excuse me. Good morning. Welcome, everybody. Appreciate your time today. As usual, I'll start today's call with a review of Rubracca sales for the quarter. Sales in Q4 2021 were $36 million, 5% lower than the prior quarter and 17% lower year-over-year compared to Q4 2020. As seen over the previous quarters, this year-over-year decline is primarily due to fewer diagnoses and fewer patient starts in the U.S. and Europe, primarily caused by the ongoing COVID-19 pandemic. Despite the continuing impact of COVID-19, we believe we have maintained our U.S. market share for Rubraka in the second-line maintenance ovarian cancer setting. We do expect that as patient visits begin to rise, diagnoses increase, and the urgent need to more actively manage this often fatal disease grow, maintenance treatment of ovarian cancer patients will increase, including the use of Rubraka for women with advanced disease. Perhaps even more importantly, we see a significant opportunity to move into earlier lines of therapy with Rubraka in both the U.S. and Europe. We anticipate three Phase III readouts this year. Athenomono as monotherapy in the first-line ovarian cancer maintenance treatment setting, now expected in Q2 based on a slower-than-expected pace of progression-free survival events, or PFS events, and Athenocombo in combination with Obdevo in the first-line ovarian cancer maintenance treatment setting in Q4, and TRITON-3 in the second-line prostate cancer treatment setting for selected patients in Q2. These trials potentially allow Rubraka to address larger patient populations in earlier lines of therapy for both ovarian and prostate cancer and could drive growth in Rubraka sales in both the U.S. and Europe. Lindsay will provide an update on these clinical programs. For FAP2286, the Phase I portion of Lumiere continues to enroll and we are committed to maintaining our lead in the clinical development of an FAP-targeted radionuclide therapeutic candidate. We and our investigators remain extremely enthusiastic about this program and look forward to presenting data at nuclear medicine meetings during 2022 and initiating the Phase II portion of the Lumiere study later this year. Tom and Lindsay will speak in more detail to developments about the FAP-2026 program. In fact, to that end, I'll turn the call over to Tom, our Chief, Thomas Harding. Sorry, Tom. our Chief Scientific Officer, to discuss the FAP2286 and targeted radionuclide therapeutic development programs.
spk06: Tom? Thanks, Pat. Hello. It's a pleasure to speak with you again today. As we discussed in prior calls, a key strategy for Clovis is to be a leader in targeted radionuclide therapy. FAP2286, our lead targeted radiotherapeutic compound, licensed as part of our ongoing collaboration with 3B Pharmaceuticals, is the first peptide-targeted radiotherapy candidate. or PTRT, targeting fibroblast activation proteins, also known as FAP, in clinical development. And as Pat mentioned, in 2022, we will report the first Phase I clinical data for the program and plan to advance the program into Phase II expansion cohorts. FAP is highly expressed on cancer-associated fibroblasts, or CAFs, which represent one of the most abundant cell components in tumors and are found in the majority of solid tumor types. CAS play a critical role in tumor initiation, progression, metastasis, and therapeutic resistance. For example, recent studies have demonstrated FAP-expressing CAS exert a potent immunosuppressive activity that can promote tumor progression and confer resistance to immune-based therapies such as PD-1 and PD-L1 blockade. As we highlighted last quarter, we have presented non-clinical data describing a high expression level of FAP across 9 of 16 solid tumor types screened using immunistic chemistry. High FAP expression was observed in pancreatic ductal adenocarcinoma, cancer of unknown primary, salivary gland mesothelioma, colon, bladder, sarcoma, squamous non-small cell lung, as well as squamous head and neck cancers. In these tumor types, high FAP expression was detected in both primary and metastatic tumor samples and was independent of tumor stage or grade. The analysis also demonstrated that in most tumor types, FAP expression was predominantly localized to cancer-associated fibroblasts surrounding the tumor cells and integrated into the tumor microenvironment. In addition, in cancers of mesenchymal origin, including sarcoma and mesothelioma, FAP expression was observed in tumor cells in addition to the calf population. These data support the investigation of FAP2286 in multiple tumor types in the planned phase 2 expansion cohorts of Lumiere. Additional presentations of non-clinical data are anticipated at medical oncology and nuclear medicine meetings over the next few quarters. As interest in FAP as a target increases and the field grows larger, we are pleased to be in the first mover position with FAP2286 to be the first peptide-targeted radionuclide therapeutic. targeting FAP to enter into the clinic. Clinically, we are focused on 2286 monotherapy development in our ongoing LUMES study. However, preclinically, we are evaluating a number of 2286 drug combinations. Given the role of FAP expressing CAFs in mediating resistance to immune-based therapies such as PD-1 and PD-L1 blockade, combinations of these agents will be a priority. We are evaluating in non-clinical studies the efficacy and mechanism of action of FAP2286 and a PD-1 monoclonal antibody in syngenic mouse tumor models. In addition to immune checkpoint inhibitors, there are a number of publications reporting non-chemical data that support the combination targeted radiotherapy with PARP inhibitors to augment efficacy. This makes sense, since radiotherapy is worked by causing DNA damage via radioactive ignition. If this damage is not repaired, the cell will eventually die. One of the critical proteins for repairing radiation-induced damage is PARP, and its inhibition augments efficacy in combination with multiple targeted radiotherapy agents. We are currently preclinically evaluating the combination of FAT2286 with our own path inhibitor, Recaprib, in multiple tumor models. Lastly, radiation is known to synergize with a number of agents that are currently approved as a standard of care in specific cancer indications. For example, gemcitabine uses a first-line chemotherapy in pancreatic cancer and other carcinomas is a well-known radio sensitizer and could have utility in combination with FAP2286. We are currently performing a high-throughput screen of approved oncology drugs in combination with radiation to identify promising combinations for FAP2286 development. We look forward to reporting the results of this preclinical work at upcoming scientific meetings. To support our commitment to this emerging field, we have created educational materials about targeted radiotherapy. The first of these materials are a microsite and an introductory video that provide more information about targeted radiotherapy, FAP 20286, and Clovis' targeted radionuclide development program. To learn more, please visit targetedradiotherapy.com. Lastly, we are collaborating with 3D Pharmaceuticals on a discovery program directed at three additional targets for targeted radionuclide therapeutic development, to which we have global rights. And now with that, I'll turn the call over to Lindsay Rolfe for a clinical update.
spk08: Thanks, Tom. Good morning, everybody. I'm glad to be here with you today to highlight the key clinical milestones expected for Rubracca and SAP 2286 in 2022. For Rubracca, based on a slower than expected PFS event count, we are now expecting data from Athena Mono in the second quarter of 2022. Data from Athena Combo, the combination arm of Rubraka plus Opdivo versus monotherapy, are expected in the fourth quarter of 2022. As a reminder, Athena is a Phase III 1000 patient study in first-line newly diagnosed advanced ovarian cancer maintenance. With Athena, we believe we are uniquely positioned to evaluate Rubraka in terms of two independent outcomes, monotherapy versus placebo in the first-line maintenance settings, as well as any potential advantage of the combination of Rubracca and Opdivo over Rubracca alone in the same first-line maintenance setting. We believe this study offers an opportunity to truly differentiate Rubracca in the first-line maintenance setting. Once top-line monotherapy results are available, and should the data be supportive, we plan to file an SMDA and a variation to the European MAA shortly thereafter. Continuing with near-term milestones for rubraca, top-line data from the TRITON3 trial are expected in the second quarter of 2022. TRITON3 is a phase three study evaluating rubraca versus physician's choice of chemotherapy or second-line androgen deprivation therapy in patients with MCLPC with BRCA or ATM mutations. This trial is expected to serve as a confirmatory study for rubraca's current approval in the prostate indication, as well as the potential second-line label expansion, and we plan to file an SNDA shortly after results are available. These three anticipated babies read out, Athena mono, Athena combo, and Triton 3, provide the potential to reach larger patient populations in earlier lines of therapy for both ovarian and prostate cancers. Beyond the opportunity for rubraca in first-line ovarian cancer, the Athena combo study represents the potential to introduce an anti-PD1 containing regimen for the first time to a broad population of ovarian cancer patients. As a reminder, the timing for each data readout is contingent upon the occurrence of the protocol-specified progression-free survival events. I'd like to discuss our FAP2286 program next. Tom provided an overview of the non-clinical work, and now I'll review the clinical work underway. In our ongoing Phase 1-2 linear study, FAP2286 is used as both an imaging agent and a therapeutic agent, a concept often described as a theranostic. For the imaging agent, FAP2286 is attached to the isotope gallium-68 to allow positron emission tomography, or PET imaging, and selection of patients for inclusion in the study. For the therapeutic agent, FAP2286 is attached to the isotope lutetium-177, an emitter of beta particle ionizing radiation that causes DNA damage and cell death. The phase one portion of the Lumiere study continues to enroll patients, and the second dose cohort is currently enrolling patients. As a reminder, for this first in-man study, this is a dose escalation study with each of the five dose cohorts being enrolled sequentially with a six-week safety follow-up period after the last patient in each cohort has enrolled to ensure it's safe to move to the next dose cohort. While this six-week period is longer than the phase one trials of other oncology agents, it is standard for targeted radiotherapies. Following the phase one evaluation of the safety of FAP2286 and determination of a recommended phase two dose, Expansion cohorts are planned in multiple tumor types and are expected to begin in 2022. In addition to our own program, a separate investigator-sponsored imaging study with FAP2286 is underway at UCSF and being led by Dr. Thomas Hope, who is also the principal investigator of the Lumiere study. The imaging-only study is evaluating FAP expression in multiple tumor types and is currently enrolling patients. Results from this study along with the preclinical data we are generating, are expected to help inform selection of tumor types for our Phase II expansion cohorts. We look forward to Dr. Hope's presentation of his initial imaging data from this study at the upcoming virtual SNMNI midwinter meeting later this week. In addition to initiating Lumiere Phase II expansion cohorts during 2022, we anticipate several key milestones for the program, including The first presentations of phase 1 data from Lumiere at nuclear medicine focus meetings. The launch of our combination study program to explore FAP2026 in combination with other oncology compounds. Given the role of FAP expressing CAT in mediating immunosuppression, exploring the combination with PD-1 or PD-L1 blockade is a priority. As noted by Tom, we are exploring multiple combination studies in preclinical animal models to inform our choice of combinations for clinical developments. Finally, a potential IMD filing for SAP 2286 linked to an alpha-emitting isotope in 2023. I'd like to recognize again the dedicated efforts of the teams involved in our clinical trials, both employees and investigators, and the patient participants, as our clinical programs advance. And with that, I'll turn the call over to Dan to discuss fourth quarter financial results.
spk02: Thanks, Lindsay, and hello, everyone. We reported net product revenues for REBRAC of $36 million for Q4 2021, which included U.S. product revenues of $27.6 million and ex-U.S. product revenues of $8.4 million, respectively. This represents a sequential 5% decrease from Q3 2021 and a 17% decrease year-over-year compared to Q4 2020 net product revenues of $43.3 million, which included U.S. product revenues of $36.4 million and ex-U.S. net product revenues of $6.9 million. We reported net product revenue for a bracket of $148.8 million for the full year end of December 31, 2021, which included $115.7 million in U.S. and $33.1 million in ex-U.S. product revenues, respectively. This represents a 10% decrease compared to 2020 net product revenues of $164.5 million which included $146.3 million in the U.S. and ex-U.S. net product revenues of $18.2 million. Gross net adjustments totaled 30.6% globally in Q4 2021 compared to 27% in Q3 2021. Increasing GTN in the ex-U.S. and public health service discounts in the U.S. were the main drivers. This metric fluctuates quarter to quarter and is difficult to estimate on future revenues, But the high 20 to low 30% level seems likely, depending on the revenue and distribution mix for the U.S. and Europe. As previously discussed, as European revenues increase in proportion to the U.S., global GTN will increase correspondingly. Research and development expenses totaled $41.8 million for Q4 2021 and $186.6 million for fiscal year 2021, down 26% and 28% respectively. compared to 56.7 million and 257.7 million for the comparable periods in 2020. Research and development expenses decreased for the quarter and the year compared to the same periods in the prior year, primarily due to lower spending on rebracket clinical trials. Summing general administrative expenses totaled 33.3 million for Q4 2021 and 128.4 million for fiscal year 2021. down 18% and 22%, respectively, compared to $40.8 million and $163.9 million for the comparable periods in 2020. Selling, general, and administrative expenses decreased during the quarter and the year compared to the same periods in the prior year with savings due to the COVID-19 situation globally and overall cost reduction efforts. We reported a net loss for Q4 2021 of $64.4 million, or 50 cents per share, and a net loss of $264.5 million, or $2.29 per share, for fiscal year 2021. Net loss for Q4 2020 was $99 million, or $1.02 per share, and $369.2 million, or a net loss of $4.38 per share, for fiscal year 2020. Turning now to a discussion of cash and debt, GloVe has had $143.4 million in cash and cash equivalents as of December 31st, 2021. During Q4 2021, we raised $3 million in net proceeds, and in Q1 2022 so far, have raised $27.2 million in net proceeds through our previous established at-the-market equity offering program. We have capacity to issue additional shares of common stock under this ATN program. In addition, we paid off our 2.5% convertible senior notes due in 2021 at full maturity. Our next convertible debt maturity is August 1, 2024, and has a conversion price of $7.29 for a portion and a conversion price of $6.24 for the remainder. As of December 31, 2021, we had drawn $147.2 million under the partners Athena clinical trial financing and had up to $27.8 million available to draw under the agreement to fund expenses of the Athena trial. The first royalty payment to Sixth Street partners will be in Q4 of this year after determination of Q3 2022 revenues subject to the applicable payment caps in the agreement. Net cash used in operating activities was $41.3 million for 4Q 2021, down from $56.1 million reported in 4Q 2020, Cash burn in Q4 2021 was $31.6 million, down 23% from Q4 2020 quarter cash burn of $40.9 million. Similarly, net cash used in operating activities for the full year 2021 was $196.1 million compared with $252.7 million for the full year 2020. Cash burn for the full year was $148.6 million, down 24% from the prior year cash burn of $195.6 million. We have and will continue to manage expenses carefully, and we currently expect R&D and SG&A expenses in 2022 to be generally consistent with 2021. We remain focused on our liquidity position and recognize that we will need to raise additional capital in the near term to fund our operating plan for the next 12 months and beyond. Now I'll turn the call back to Pat.
spk05: Thanks, Dan. In summary, we've set the stage for a very important year. We're on track to announce top-line data from three Phase III Rubraca data readouts, Athena Mono, Athena Combo, and the Triton 3 study that offer the potential for label expansions in ovarian and prostate cancers. This includes the Athena Combo readout that should definitively inform whether adding an anti-PD-1 to Rubraca monotherapy in the first-line maintenance treatment ovarian cancer setting extends Rubraca's progression-free survival. In addition, our commitment to targeted radiotherapy is significant and offers the potential to be transformational in 2022 when we present data from the Phase I Lumiere study of FAP2286, the first peptide-targeted radionuclide therapy targeting FAP to enter clinical development. We intend to maintain our lead as we advance Lumiere into Phase II and begin our combination development program. These anticipated pipeline events and our commitment to improving our balance sheet support our efforts to execute our three core strategies. expand the root bracket label to drive revenue growth, emerge as a leader in targeted radionuclide therapy, and achieve long-term financial stability. With that, we're happy to answer any questions you may have.
spk03: As a reminder, if you'd like to ask a question, please press star then 1 on your telephone keypad. Our first question is from Paul Choi with Goldman Sachs. Your line is open.
spk01: Good morning, everyone. This is Charlie on for Paul. Thank you so much for taking our questions. I just had a question on the FAP 2286 opportunity. You know, it's exciting that we'll be seeing this data this year. And as we start to think about what the potential market opportunity is for this product, we're just wondering, are there any nuances in terms of considering the commercial potential for the imaging modality versus the therapeutic modality? Is there anything we should be considering there in terms of you know, differences and how that, you know, might be priced or the potential patient populations that would be up for either the imaging or the therapeutic modality. Thank you very much.
spk05: You know, I'll take a shot at that, Tom, and then you may want to, or Tom or Lindsay may want to add in. It's a really interesting and timely question for us. We have up to now primarily thought of the imaging opportunity with 2286 to be limited to its potential and net necessity as a companion diagnostic. That is, as we seek to develop 2286 as a therapeutic, we would simultaneously be developing for a given indication the same peptide labeled with gallium as an imaging modality for patient selection. We have been evaluating at the the guidance and request of the clinical community with whom we interact, the nuclear medicine community, whether or not FAP2286 could be seen on its own as an imaging modality, particularly in tumor types where standard imaging, for instance, FDG-PET, are not as effective. As we have evaluated this and we've looked at the reimbursement for a standalone imaging agent, it clearly has emerged as a potential opportunity. Haven't made a firm commitment yet to entering into this field, but we're getting there. The workup we've done suggests it's a pretty interesting opportunity financially. The cost of development is markedly lower. than the cost of development for a therapeutic. And it is an earlier and quicker path to market for us as an opportunity to generate revenue for 2286 prior to when we would expect to see an accelerated approval for any given therapeutic opportunity. So interested. More to come on this. We'll probably be able to provide an update on our next quarterly call. Tom or Lindsay, anything you'd add to that?
spk06: The only thing I've mentioned is to completely support what you're saying, there is some preliminary data that will be presented at the SNMMI mid-week winter meeting later this week from Thomas Hope. So take a look at that data.
spk09: Thank you very much. That's very helpful. Our next question is from Corey Kasimov with JP Morgan.
spk03: Your line is open.
spk04: Thank you. This is Gavin for Corey. Just a question on a follow up to the previous question. I guess starting there, I'm just curious about the process for the gallium 68 inpatient selection. How efficient is that process and how long does it take? And then just you mentioned some tumor types where the standard is unable to meet the needs. What tumor types are those?
spk05: Lindsay or Tom, do you want to talk about kind of the logistical side? We have not yet determined exactly which tumors we would initially approach. We have a list. I probably don't want to share that yet, but again, we'll update on specific programs in the upcoming quarterly calls. On the logistics, Tom or Lindsay?
spk09: Yeah, I'll make a point. Go ahead, Lindsay.
spk05: Lindsay, I think we'll... Go ahead, Lindsay.
spk08: Regarding the gallium scan, the gallium scanning, because gallium has a very short half-life, the sites manufacture the imaging product on-site on the day that it's used for the imaging. Our phase one sites are all
spk04: highly experienced in this kind of process and so it's bread and butter for them again a new scanning agent set up does that answer your question great yeah thank you and then just quickly on um on the theme thena combo study just in your conversations with the community Is it possible to quantify how much you need to extend PSS for utilization in that setting?
spk05: I'll try that. Go ahead. Linda, you go ahead, and then I'll answer it.
spk08: That's obviously a difficult question to answer ahead of time, but we always expect the results to be clinically significant as well as statistically significant in order to drive uptake. Given that there are multiple options available now in frontline maintenance, I would expect the combination of Rubracca and Updivo to be useful if the advantage over Rubracca alone is substantial, either in the whole population or in a subgroup.
spk05: I might add to that. The anticipation is growing now for that result. There's a great amount of interest in it, and I think it speaks to the fact that, as is true for every tumor type now, hardly any patient fails to ask the question, can I get immunotherapy it's it's it's on commercials it's in the news people are aware of it and you probably where there are no therapies approved today in ovarian except a very very small subset so I agree with Lindsay obviously we have to show a benefit it has to be statistically significant I think the demand from the patient and from the prescribing community will be high in particular in Lindsey said in subgroup populations, and that's true, but I'd also add, as is true for a lot of I.O., if the difference at the median is perhaps not substantial, but obviously needs to be statistically significant, but the tail for the combo looks to be providing significant benefit in a hard-to-identify subset, I think the demand for the combination would be quite high.
spk09: Okay, great. That's very helpful. Thank you very much.
spk03: You bet. We have no further questions at this time. I'll turn the call back over to Ms. Sussman for any closing remarks.
spk07: Thank you, Chris. Thanks, everyone, for your interest in Clovis Oncology today. If you have any follow-up questions, please call me at 303-625-5022 or Brianna Burkhart at 303-625-5023. This call can be accessed via a replay of our webcast at ClovisOncology.com beginning in about an hour and will be available for 30 days. Again, we appreciate your interest and time. Thank you and have a good day.
spk03: Ladies and gentlemen, this concludes today's conference call. Thank you for participating and you may now disconnect.
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