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spk01: Good afternoon. Thank you. Bye. Welcome to the CTI Biopharma's first quarter 2022 earnings call. During today's presentation, all parties will be in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. This conference is being recorded today, May 12, 2022. I'd now like to turn the conference over to Dr. Adam Craig, CEO and President of CTI Biopharma. Please go ahead.
spk03: Thank you, Victor, and welcome to this afternoon's conference call. Joining me today are David Kerski, Chief Financial Officer, Bruce Seeley, Chief Operating Officer, and Jim Fong, Chief Commercial Officer. Following formal remarks, the conference call will be open for questions. Before we begin, please note that during this call, we will be making forward-looking statements based on current expectations. Such statements are within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including but not limited to the type of statements identified as forward-looking in our 2021 annual report on Form 10-K that was filed on March 31, 2021, and our subsequent periodic reports filed with the SEC, which are available on our website in the investor section. Such forward-looking statements, which are indicated by terms such as expect, intend, and seek, represent our views as of the date of this call and not guarantees a future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements, including many that are beyond our control. These statements include our expectations regarding cash runway, market adoption of Vonjo, and the future success of our product launch. For further description of these and other risks and uncertainties that will cause actual results to differ materially from those expressed in the forward-looking statements, as well as risks related to our business, please see our periodic reports filed with the SEC. So the first quarter of 2022 was transformational for CTI as we worked towards becoming the market leader in the treatment of cytopenic myelofibrosis, following the recent FDA-accelerated approval of Vondro or Procritinib for the treatment of adults with myelofibrosis with a platelet count below 50 times 10 to 9 per liter. This approval was based on the Phase III PERSIST-II trial, a study that enrolled myelofibrosis patients with platelet counts less than or equal to 100 times 10 to 9 per liter, making it the only randomized control study specifically designed to recruit a cytopenic myelofibrosis population. That is, patients with thrombocytopenia and anemia. In the U.S., there are approximately 21,000 people with myelofibrosis. Two-thirds of these patients have cytopenia, resulting either from disease or commonly from the toxicity of other approved therapies. Severe thrombocytopenia, defined as a blood platelet count below 50 times 10 to the 9 per liter, occurs in one-third of the overall MF population and has a particularly poor prognosis with a median overall survival of just 15 months. On approval, our Vonjo cell team were fully trained on the Prout label and were able to commercially launch Vonjo within 10 days of FDA approval. The market has responded very well to the launch, primarily due to the fact that Vonjo is highly differentiated when compared to other therapies. We are extremely proud of our progress thus far, having exceeded our internal projections with 2.5 million in net product sales in just a few weeks. In addition, we were recently pleased to announce that Vonjo is now included as a recommend treatment in the latest National Comprehensive Cancer Network, or NCCN, clinical practice guidelines in oncology for myeloproliferative neoplasms, increasing the treatment options for patients. FONJO is now recommended within the guidelines as a frontline treatment for high-risk patients with myelofibrosis with platelet counts less than 50 times 10 to 9 per liter, and as a second-line treatment for lower- and high-risk patients with myelofibrosis and platelet counts equal to or greater than 50 times 10 to the 9 per liter. Fonjo is the only approved JAK inhibitor recommended by the NCCN for myelofibrosis patients regardless of platelet counts. I'll now pass the call over to Jim Fong, our Chief Commercial Officer. Thank you, Adam.
spk04: As Adam just mentioned, we are thrilled to report the $2.3 million in net product revenue for Fonjo generated from just 19 selling days. Impressive sales results reflect the strong demand due to the significant unmet need for cytobinic MF patients, and BonJo's differentiated clinical profile compared to existing MF treatments. It is important to note that we intentionally kept initial launch inventories low, and as a result, our specialty pharmacies and distributors have already reordered BonJo multiple times in March. Initial utilization of Bonja has been both as first-line and second-line therapy in patients with platelet counts less than 50,000, as well as spontaneously in patients with platelet counts above 50,000. While early adoption has been robust in the academic accounts, I'm particularly pleased to report that the uptake in the community setting has been higher than we expected, potentially driven by the level of dissatisfaction with the suboptimal therapy of low-dose ruxolitinib and the potential to optimally treat cytopenic patients with an effective full dose of Bonjo. As we move forward into the quarter, our MS target audience continues to show great excitement for Bonjo with significant growth in new patient starts, first-time prescribers, and high refill rates week over week. Looking forward, as we proceed with the execution of the commercial launch of Bonjo, we will remain focused on our three main launch objectives that are expected to build a strong foundation for success. First, we continue to build awareness among MF treaters as to the clinical significance and prevalence of cytopenic myelofibrosis, the specific challenges these patients face, and the limitations of existing therapies to adequately treat these patients. Second, we will continue driving adoption and utilization across our high potential prescribers and accounts. In response to the needs of our customers, we are investing in a mix of both in-person and virtual promotional resources to support our experienced field team, while also leveraging peer-to-peer programs, digital marketing, and medical conferences to ensure maximal HCP coverage and appropriate education. While COVID-19 still presents challenges for our field team, we have had higher than expected number of in-person meetings following our FDA approval. To this end, I am proud to inform you that our sales and marketing teams executed a highly successful Vangio national launch broadcast across 35 cities at the end of March that was attended by over 500 healthcare professionals, the majority participating in person. Third, we are focused on ensuring optimal patient access to Vangio. As previously reported, on approval, we immediately launched CTI Access, our comprehensive patient support program. TTI Access, staffed by highly skilled oncology case managers with deep experience in access and reimbursement, offers patients high-touch support throughout the reimbursement process. TTI Access will provide robust financial assistance program for eligible patients, including co-pay assistance, rapid start, and coverage interruption programs, and where appropriate, a program that will provide Bonjo at no cost to eligible patients who do not have insurance nor whose insurance does not cover Bongeo. During the first quarter, our patient services team has been able to minimize coverage denials and affordability issues and provide Bongeo bridge therapy for those patients waiting for coverage approval. Lastly, among the many new patients starts in March, none have required enrollment into our patient assistance program. In conclusion, I firmly believe Bongeo will continue to make a meaningful difference in the lives of patients with cytobinic myelofibrosis who have political accounts below 50,000 in the coming months and years ahead, and based on the feedback we have received from our customers, they believe this as well. I will now turn the call over to David to review our quarterly financials. David?
spk02: Good. Thanks, Jim. As of March 31, 2022, cash and cash equivalents totaled $96.9 million, as compared to $65.4 million as of December 31, 2021. The increase in cash and cash equivalents was primarily attributed to the proceeds of $60 million received from DRI Healthcare Trust under the terms of the royalty agreement. Net product sales were 2.3 million for the three months ended March 31, 2022, and no revenue was reported for the three months ended March 31, 2021. Operating loss was $35.1 million and $17.1 million for the three months ended March 31, 2022 and 2021 respectively. Net loss for the three months ended March 31, 2022 was $37.2 million or 37 cents for basic and diluted loss per share compared to a net loss of $17.3 million or 23 cents per basic and diluted loss per share for the same period in 2021. We expect our present financial resources, including cash receipts from receivables arising from historical net product sales of Vonjo, but excluding any proceeds of future net product sales of Vonjo will enable us to fund our operations into the first quarter of 2023. Until we have a more established history of sales, the GAAP accounting standards do not permit future net product sales of Vonjo to be included in the calculation of our estimated cash runway. And it's important to note that we've recently received proceeds from our at-the-market offering, the ATM facility. These proceeds strengthen our financial position and extends our cash runway. further details of the EATM, please refer to our Q1 2022 Form 10Q. So with that, I will now turn the call back to Adam.
spk03: Thank you, David. So today, we are delighted to report a strong initial BonJo launch that has exceeded our expectations. BonJo is a safe and effective therapy that is highly differentiated in the marketplace. Our goal is to become the market leader in cytopenic myelofibrosis, and to that end, we are working hard to establish RONJO as a standard of care for patients with low platelet counts in both the community and academic settings. We look forward to keeping you appraised of our progress over the coming months. That concludes our formal remarks. Victor, please open the call for questions.
spk01: As a reminder, to ask a question, you need to press star 1 on your telephone. And until I draw your question, just press the pound key. One moment for questions. Our first question comes from . From BTIG. You may begin.
spk07: Thank you for taking the question, and congratulations on the approval, and congratulations on the robust sales straight out of the gate. Very impressive. Just a couple of questions for me. First off, in terms of early patient prescriptions for Bonjo, can you say whether these are largely newly diagnosed patients or are they switches from those patients previously on JAK inhibitors? And then I have another question or two.
spk03: Okay. Thank you both for your kind words. I'll hand the question over to Jim Fong.
spk04: Yeah, hi, Bert. Essentially, yeah, we've seen both newly JAK-naive patients' starts as well as second-line patients as well. So we've seen both in our launch.
spk07: And are these patients – you spoke about patients that have platelets below 50 as well as patients with platelets above 50 – Do you have any breakdown of that now, and are there any trends? I know it's very, very early days, but are there any trends that you're seeing in the breakdown of those types of patients?
spk04: Yeah, first off, I just want to reiterate, you know, we are promoting within our label of less than 50,000. But, you know, despite that, we are seeing spontaneous use above 50,000 as physicians use their own judgment. But, you know, we have limited data, Bert, based on our visibility to the platelet counts that come in to the specialty pharmacies, so we really can't give an accurate depiction of that.
spk03: And Bert, if I can add, with the, you know, the NCCM guideline updates is only a few weeks old, and within that, as I said, we have, there are recommendations that allow for patients, well, that recommend patients, fungicide therapy in patients with platelet count less, greater than 50,000. Those recommendations recommendations are pretty new, and it will take a little bit of time for those to be established in the marketplace before we have a clear idea of what the split is.
spk07: Terrific. Thank you. And just one more from me. I know you mentioned this in your prepared remarks, but just to say it maybe a little different way, the cash guidance that you've given into the first quarter of 23 excludes any future Vonjo product sales during 22. That's correct? Is that the way to think about it?
spk02: Yes. Yeah, Bert, thanks for bringing that up. That's absolutely correct. The accounting guidance currently does not allow us to incorporate revenue into our cash forecast process. Therefore, what you're seeing in our disclosures into Q2023 excludes revenue with the exception of what we've recognized in Q1.
spk07: But we'll look forward to more growth and look forward to more updates. Thank you.
spk03: Thank you, Bob, for your questions.
spk01: Our next question is from Ben Burnett from Stateful. You may begin.
spk09: Hey, thank you very much, and I'll add my congrats to the initial progress. I want to ask just a question on just you mentioned you're having some initial conversations with health care professionals today. I realize it's early days, but where are you seeing kind of initial demand come from, specifically just community versus, like, you know, more academic institutions?
spk03: Yeah, so certainly on remarks, we're surprised by the amount of interest we've had in the community. It's been more than we expected. Jim, would you like to elaborate on that?
spk04: Yeah, as Adam said, you know, no surprise, the academic centers, you know, certainly jumped on early, but we were surprised, you know, because they had experience from the clinical trials. But the large academic centers, the large community oncology practices, and even some of the smaller ones have adopted as well, and that's kind of where we're surprised by this. So we've had similar number of, you know, accounts, order from the community as well as the academic. So we're seeing a pretty nice balance that way, which is surprising.
spk09: Okay, excellent. That's great. And can I also ask, do you have a sense at this point sort of the time it takes to go from script to a patient getting a drug, like just the prior process and everything?
spk04: Yeah, yeah, exactly. Right now it's averaging about 7.3 days from prescription to fill.
spk09: Excellent. And this may be too early, but do you have a sense as to where that could track sort of long term? Say that one more time. Do you have a sense as to where that could track long-term, or is that, like, could that number change?
spk04: Could that number change? You know, what we've seen, you know, historically is five to seven days, you know, for most commercial products.
spk09: Okay. Excellent. All right. Well, thank you very much. I appreciate it.
spk03: Thank you, Ben.
spk01: And our next question will come from the line of Gil Blom from Needham. You may begin.
spk08: Good afternoon, everyone, and let me add my congratulations on a strong launch here. So maybe a quick one around commentary that you made. What kind of physician feedback have you been getting, if any? I mean, it was interesting that you noted that physicians are excited about the prospect of no longer giving low-dose rusks, if you can elaborate on that a little bit.
spk03: Yeah, I'll answer that first, and I'll let Jim answer it if there's any additional comments. The frustration of physicians, as we've said previously, is the dissatisfaction with low-dose rusks. It's very common, particularly in the community practice, because those have The dose has to be altered based on the toxicity seen, and it can be a complicated management scenario. Some of the feedback we've got from physicians has been the attractiveness of Vonjo is that the drug can be given at full dose without the need for large numbers of dose modifications, and that's very attractive to them. together with the safety profile. The safety profile is extremely important. Again, it helps in the management. And we were very pleased with the data that ended up in the product label, and it has been very well received in the community.
spk04: Jim? Yeah, to further on what Adam was saying, you know, that's the whole point. Physicians don't like to dose modify. They'll do it because they have to. But to have one dose they can use at the full dose to treat patients who have cytopenic myelovibrosis, who have a worse prognosis by the fact that they've got, you know, low counts, has been such a big compromise for them all these years. It's all they've had to do is have to compromise on patients who have the poorest prognosis yet use the smallest dose of ruxolitinib. Now they don't have to compromise anymore. And that's the beauty of it from a clinical perspective. And also the simplicity is also what's so attractive as well, just one dose for everybody.
spk08: That is very helpful. And maybe another one, I know you guys already mentioned that you've seen a split of both frontline and second line. Will we be given some granularity on this at some point?
spk04: You know, it'll be tough to really provide granularity on that only because, again, we have limited data that comes into our specialty, through our hub and our specialty pharmacies. About 50% of our prescriptions right now go directly to the accounts so we don't have that visibility to give that type of granularity.
spk08: Okay. That makes sense. Maybe the last one, considering you mentioned you're making progress on visibility. Should we expect a boost from you guys at ASCO?
spk04: Yes, you will. There you go.
spk03: And ASCO is very important to us, Gil, because there's a lot of community involved. who attend it, and that's why our presence is very important.
spk08: Yeah, there will be several very interesting presentations and askings in this space, so I look forward to it. Thank you for taking our questions.
spk03: Thank you, Gil.
spk01: And once again, it's star one, question star one. Our next question will come from Boris Peeker from Canada. You may begin.
spk05: I'd like to add my congratulations to the progress and a great launch. Maybe let's just probe into the first parcel quarter launch of the 2.3 million in sales. Do you have a sense of how much of that is maybe inventory build versus end user demand?
spk03: Yeah, it's a very small inventory level. Jim? Thank you, Josh.
spk04: Yeah, the majority of that is demand.
spk05: Got it. And can you also comment on the split between academic versus community centers for Bonjo, and how do you expect that to evolve over time?
spk04: Yeah, right now, again, in terms of the number of accounts that have ordered Bonjo or prescribed Bonjo, the accounts are almost 50-50 split in terms of, you know, a little bit more academic risk community. But I would expect there would have been like 70-30 or 80-20. But as we go on with the evolution of the Bonjo, the Bonjo volume, I believe, will start to exceed more use in the community than the academic centers.
spk05: Got it. And my last question along these lines is, I was expecting it to also be in the community setting. What is your marketing strategy to the community docs for such a drug?
spk04: Yeah, that's a really important sector for us. We, you know, have deliberately wanted to make a very community oncology-friendly marketing program where we have limited distribution, and so the in-office dispensing community practices can keep their prescriptions. And so that's very attractive, and obviously this product is very simple, for the community oncologist to use, and they don't necessarily have to then refer these patients to the academic centers when their counts get low. Now they can maintain these patients within their own practice and then keep the prescriptions within their own facilities.
spk05: Great. Congratulations again, and thanks for taking my questions.
spk01: Thank you, Bryce. Our next question will come from the line of Thomas Flatton from Lake Street Capital. Your line is open.
spk06: Good afternoon, guys, and let me add my congrats as well. To the discussion about community versus academic, are there any learnings from that with respect to the commercial footprint targeting, et cetera, that you've taken on board and any changes you feel the need to make this early?
spk04: No, I think that, you know, we've always looked at that as such a big opportunity with the growth and explosion in oral oncology. So we knew that the community piece was going to play a major role. So we've aligned our field team and our ancillary functions to address that population. So we don't need to see any changes in the near future.
spk06: And then with respect to Medicare versus commercial, any thoughts on how that's breaking down?
spk04: Yeah, right now, no surprise, right, with these patients are older. We're seeing about 70% Medicare and 30% commercial.
spk03: And, Jim, in the future, where do you expect that to track?
spk04: It may come down a little bit closer to more of an even split, but right now it's about 70-30.
spk06: Thanks. Got it. Appreciate that. And then with respect to, and I don't want to beat the community versus academic to death, but within the community, is it more standalone, or are you thinking larger practices, you know, TOPA, Florida Cancer, et cetera?
spk04: You know, it's interesting. We're seeing both adoption within large practices and even the standalones. So we've been surprised by some of these smaller practices I've already ordered a few times already. So it's been both.
spk06: Great. I appreciate you guys taking my questions. Thank you.
spk01: Thank you, Tony. Thank you. And I'm not showing any further questions in the queue. Let's turn the call back over to Dr. Adam Craig for any closing remarks.
spk03: Thank you, Victor, and thank you, everyone, for joining the call today. We appreciate your questions and interest in Vonjo. We look forward to further conversations over the coming weeks and months.
spk01: And this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.
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