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spk04: Hello, and welcome to the CTAO Biopharma Corporation 2Q22 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note, today's event is being recorded today August 8th, 2022. And now I'll turn the conference over to Dr. Adam Craig, CEO and President of CTI Varma. Please go ahead.
spk01: Thank you, Keith, and welcome to this afternoon's conference call. Joining me today, 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 harbour provision of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the types of statements identified as forward-looking in our 2021 annual report on Form 10-K that was filed on March 31, 2022, 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, are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results that differ materially from those anticipated by the forward-looking statements, including many that are beyond our control. These statements include our expectations regarding cash runways, the market adoption of Vonjo, and the future success of our product launch. For a further description of these and other risk factors and uncertainties that may 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. In February of this year, our lead product Vonjo or Procritinib was FDA approved for the treatment of adults with myelofibrosis with a platelet count below 50 times 10 to 9 per litre. In the United States, of the approximate 21,000 patients with myelofibrosis, two-thirds have cytopenias, that is thrombocytopenia and or anemia, resulting from either disease progression or commonly from the toxicities of other approved therapies such as ruxolitinib. Severe thrombocytopenia, defined as a blood platelet count below 50 times 10 to 9 per litre, occurs in one-third of the overall MF population and has a particularly poor prognosis. In the second quarter of 2022, we continue to make substantial progress with the commercial launch of Vonjo in the United States. Today, we are delighted to report $12.3 million in net product revenue for the second quarter, driven by significant growth in Vonjo awareness among healthcare providers in both the community and academic settings, and an overall share of voice that exceeds that of our competitors. CTI continues to produce new data from our Procritinib program, reinforcing Von Joe's clinical value as a safe, simple, and effective therapy in cytopenic MF. At ASCO and EHA earlier this year, our scientific presentations highlighted Von Joe's place as a product that is differentiated from older JAK inhibitors. Our risk-adjusted analysis showed that the safety profile percritinib, 200 mg twice a day, was comparable to best available therapy, including ruxolitinib, and that percritinib 200 mg twice a day could be given as a full dose for patients with myelofibrosis, including those with severe thrombocytopenia. Additionally, full dose percritinib achieved high response rate and a similar manageable safety profile compared to the lower dose ruxolitinib, in patients with myelofibrosis who have moderate or severe thrombocytopenia. Looking ahead, starting this fall, we expect to share new data at international medical meetings that demonstrate procritinib's activity as a potent ACVR1 ALK2 inhibitor, as well as data on procritinib's important anemia benefit in myelofibrosis. Inhibition of ACBR1, which mediates hepcidin production, has been postulated as a mechanism for the improvement of anemia in MF. Finally, I'm pleased to announce that we have filed the patent term extension application for our U.S. composition of MATA pattern 8153632 with a requested five years of extension, which, if granted, would extend the expiration of this orange book listed patent from January 29 to January 2034. I'll now turn the call over to our Chief Commercial Officer, Jim Fong, to highlight our Vonjo launch achievements. Jim.
spk09: Thank you, Adam. As Adam just discussed, we are delighted to announce $12.3 million in net product revenue for Vonjo this quarter. This impressive start to our launch is a direct reflection of our commercial team's execution as well as the demand that exists among MF patients and their healthcare providers, that is, HCPs, who are in need of a safe, simple, and effective treatment option, that is, Vonjo. As previously mentioned, our experienced field team has been focusing on delivering against our three core Vonjo launch objectives. One, build Vonjo awareness among myelohyprosis HCPs. Two, drive adoption and utilization within our top accounts and high potential prescribers. And three, ensure optimal patient access via securing effective payer coverage as well as our patient support services called CTI access. Regarding awareness, we are pleased that our promotional efforts and activities are resulting in significant growth in bondual awareness among our target ACP audiences in both the community and academic settings with higher than expected Bonjo product awareness after just a few months following launch. Our sales results also indicate we are making significant headway with HCP adoption and utilization. We believe that this stems from our team's commitment to comprehensively educating the HCPs through their sales call activities, in-service meetings, and implementation of numerous peer-to-peer educational initiatives that help identify appropriate Bon Jovi patients. Our peer-to-peer educational programs have been very well received, as evidenced by the high number of attendees, the vast majority of which are in person, illustrating that HCPs are very interested in myelofibrosis and the value proposition that Bon Jovi offers. In addition, I am pleased to report that recent market research conducted at the end of May shows that Bonjo's promotional share of voice has already surpassed that of both ruxolitinib and fudratinib among high MF treaters. Our commercial execution is resulting in continued strong growth in new prescriptions and new prescribers in both academic and community settings. we are seeing early signals of strong refills occurring and few early discontinuations due to adverse events. We believe the overall adoption is indicative of the unmet need in the marketplace, including dissatisfaction with low-dose ruxolitinib and the potential to optimally treat patients with a full dose of Bonjo safely and effectively. Our research indicates ATPs have prescribed Bonjo as a first- and second-line therapy in myelofibrosis patients. A catalyst for this utilization can be attributed to the latest NPN National Comprehensive Cancer Network or NCCN guidelines. As we have previously highlighted, Vonju is the only approved JAK inhibitor recommended by NCCN regardless of platelet count. This includes as a first-line and second-line treatment for high-risk patients with myelofibrosis with platelet counts less than 50,000 who are not candidates for transplants. and as a second-line treatment for lower-risk and higher-risk patients with myelofibrosis with platelet counts equal to or greater than 50,000 who are not candidates for transplant. With respect to patient access, our payer team continues to successfully expand coverage for Bonjo with both commercial and Medicare plans. For example, Caremark CVS, the largest PVM, is now covering Bonjo consistent with our label and NCCM guidelines. CTI Access, our patient services team, has been able to minimize coverage denials and affordability issues and provide Bonjo Bridge Therapy for those patients waiting for coverage. In summary, I am very pleased with the launch progress and growth of Bonjo in our first full quarter, where we recorded $12.3 million in net revenue. These results could not have happened without the tremendous contributions from our entire organization. including a special group of highly skilled, passionate, and dedicated people representing market access, marketing, and sales who are all committed to one common mission, identifying and helping MF patients who can benefit from Bonjo. I will now turn the call over to David to review our quarterly financials. David?
spk02: Thank you, Jim. Moving on to our financial statements, as of June 30, 2022, cash and cash equivalents totaled 95.9 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 received from our at-the-market offering facility. This strengthens our financial position and extends our cash runway over the next 12 months. Net product sales, were $12.3 million and $14.6 million for the three and six months ended June 30th, 2022, respectively. Operating loss was $18.9 million and $19.5 million for the three months ended June 30th, 2022 and 2021, respectively. and $54 million and $36.6 million for the six months ended June 30, 2022 and 2021, respectively. Net loss for the three months ended June 30, 2022 was $22.7 million or $0.21 for basic and diluted loss per share compared to a net loss of $19.7 million or $0.21 for basic and diluted loss per share for the same period in 2021. Net loss for the six months ended June 30th, 2022 was 59.8 million or 57 cents for basic and diluted loss per share compared to a net loss of 36.9 million or 44 cents for basic and diluted loss per share for the same period in 2021. From an SEC reporting perspective, When assessing our cash runway, the accounting standards requires us to exclude a portion of future sales from our forecast since we have a limited sales history. As such, in our 10-Q filing, we report that our financial resources will enable us to fund operations for at least one year. However, as management, we believe that we have sufficient cash to meet our financial obligations through 2023 and beyond, subject to us meeting our sales forecast. It is important to differentiate this liquidity disclosure within our SEC filings for management's assessment of its cash runway. So with that, I will now turn the call back to Adam.
spk01: Thank you, David. So in closing, we're very pleased with our progress following the commercial launch of Vonjo earlier this year. And we continue to work hard to make CTI the market leader in the treatment of cytopenic myelofibrosis. Fondra is a simple, safe, and effective therapy. And importantly, it is seen as differentiated from other older therapies by health care prescribers. We look forward to ending this year with presentations demonstrating Procritinib's activity as a potent ACVR1 inhibitor, as well as data on Procritinib's important anemia benefit in MS. This concludes our formal remarks. Keith, please open the call for questions.
spk04: Yes, thank you. At this time, we will begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you're using a speakerphone, Please pick up your handset before pressing the keys. To throw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. And today's first question comes from Boris Peeker with Cowan.
spk05: Good afternoon, and congratulations on excellent results.
spk01: Thank you.
spk05: So my first question is this. Do you have an estimate of how many patients may be on the sidelines because they couldn't tolerate 5-mig dose of Jacify, but are maybe potential patients for Vonjo?
spk01: Yeah, thanks, Boris, for your question. Jim, would you like to answer it?
spk09: Yeah, sure. We estimate that there are a few thousand patients on low dose of Luxolitinib that are currently out there in various states of response or tolerability.
spk05: No, but I meant the ones that are not on RUX, that maybe couldn't even tolerate the 5-mig dose and maybe awaiting something alternative.
spk09: Yeah, we do not have those numbers, but we would expect that the first quarter we've seen here, a lot of those patients have been prescribed Bonjo.
spk05: Got it. And my second question is, you've mentioned in your prepare remark that about a third of the myelofibrosis patients have severe thrombocytopenia. I'm curious if you have any estimates on the fraction of patients that have severe anemia, or perhaps both anemia and thrombocytopenia?
spk09: Yeah, we would expect that we've seen, similar to what we saw in our PERSIST-2 study, about two-thirds of patients who have thrombocytopenia will also have accompanying anemia. So they kind of go hand-in-hand.
spk05: Great. Congratulations again, and thank you for taking my questions.
spk09: Thank you very much.
spk04: Thank you. And the next question comes from Ryan Benjamin with JMP Securities.
spk08: Hey, good afternoon, guys. Congratulations on a great quarter. A couple of questions for me, maybe just some of the basics. As we look at the patients that are being treated, can you give us maybe a little bit more granularity? How many might be naive patients versus post-JACFI? How many are switching patients? from, you know, let's say even 5-meg or 10-meg Jackify versus those that are getting prescribed new? And can you give us a sense as to the amount of refills that are kind of taking place right now?
spk09: Yeah, Ren. So first off, we have limited visibility, as I mentioned before, to exact, you know, lines of therapy, platelet count, things like that. But some of the market research we have done and EMR audits we have done where we get a snapshot, we see about half our patients are within the label, less than 50,000, cross first line, second line, third line. And the other half of patients above 50,000 blood counts that's being prescribed spontaneously is typically in the second and third line.
spk08: Got it. And can you give us a sense as to, in terms of academic versus community, what that ratio is looking like?
spk09: Yeah, Ran, essentially right now in terms of the volume, right now it's about 60% is coming out of the academic centers and about 40% of our volume is coming out of the community. However, when you look at a number of accounts, it's about 50-50 academic versus community that have ordered and prescribed Bon Jovi.
spk08: Excellent. Okay. And then, you know, as we think about net revenues and There are royalties that need to be accounted for. Can you just remind us, you know, is the royalties being accounted for in the net revenues or is that something that's expensed?
spk02: Ren, those are expense below the line. So royalties are not incorporated as part of the gross to net calculation.
spk08: Okay. Okay. And then finally, the SG&A was a little bit higher than our expectations. Is that kind of the new norm that we should be thinking about, or were there more kind of like one-off costs associated with this quarter?
spk02: It has been consistent through the quarter, so I don't anticipate any change from Q2. Most of the costs, of course, associated with commercialization have already been incurred, so any increases would be a would be associated with increased marketing effort.
spk08: Excellent. Thank you guys very much and congrats again.
spk02: Thank you.
spk08: Thank you.
spk04: And the next question comes from Ben Burnett with Stifel.
spk06: Hey, thank you very much and congrats on the quarter. I want to ask just a question about inventory build. Can you talk about the level of inventory build that you're seeing?
spk01: Yes, certainly. Thanks for your question, Ben. Jim?
spk09: Yeah, essentially, our inventory build is reflective of demand. We've purposely kept our inventory levels low, so it is truly reflective of the demand going out there in the marketplace.
spk06: Okay, excellent. And then I wanted to ask a question regarding the patent extension that you were talking about filing for. What is the timeframe for gaining clarity here? And I guess, can you talk about the considerations that go into seeing a patent extension be granted like this?
spk01: Yes, so the time frame, unfortunately, can be several years. The Patent Council has told us it can take quite a time for the extension to occur. But the application is based on the formula, and our calculations based on the work that we've previously done with Procrifnib shows that we easily exceed the five years extension, the maximum that's allowed So we're highly confident that we will get five years. It would be unusual for a company to have an issue, given that the application is based on a formula, based on how much work you've done over the years.
spk06: Okay. Excellent. All right. Well, thank you very much.
spk01: Thank you, Ben.
spk04: Thank you. The next question is from Thomas Fratton with Lake Street Capital.
spk03: Hey guys, congrats on the quarter. I appreciate you taking the questions. Given the kind of, maybe not surprise, but unanticipated awareness and use in the community setting, I'm curious if that has caused you guys to maybe modulate your commercial plans at all, given that there was a better base of understanding there and certainly better demand. I'm just curious if you guys had to make any positive changes, if I can call it that.
spk01: I'll answer first and then I'll hand over to Jim. Certainly, we saw right from the start that the number of community accounts, as Jim alluded to, was higher. Yeah, who engaged with us was higher than we expected. So we certainly have had to, you know, in a positive way, adapt our marketing and our sales activities to respond to the community. And that's been a good thing. Jim?
spk09: Yeah, and really all we've done really is... probably accelerate our programs or promotional programs I mentioned earlier to include a lot more community physicians early on because they're ready to hear about this. And so I think the other thing, too, is because previously those patients who had severe thrombocytopenia were often referred to the academic centers because there was nothing to FDA approve there. Now they have a product where they can keep and maintain the patient within their own practice, and so that has become a great advantage for them. and they feel secure now in treating these patients and maintaining them in their practice.
spk03: Great. And with respect to, and I know you've alluded to this a couple times, you have this great commercial infrastructure now, and there was some talk about maybe looking for products to add in to shoulder part of the burden of that commercial cost. Do you have an update on BD activities, or is it just too soon at this point?
spk01: As I've said previously, Thomas, we continue to look for products and opportunities, development opportunities that fit in with our skill set, both on the development side and on the commercial side. And if we identify an opportunity, we look forward to sharing it with the street at the appropriate time.
spk03: And then one final one. With respect to Pacifica, given that you've kind of refocused that outside the U.S., Any updates or are things proceeding relative to plan there?
spk01: Like everyone, we've had the ups and downs because of COVID and the war in Ukraine. But most recently, over the last month, Pacifica has done very well. So we're very encouraged. We are looking at adding some additional sites to maintain the level of enrollment. But, you know, the last four weeks, we've had some really strong enrollment numbers. in multiple countries, which is a good sign. Probably some of the best enrollment we've had for some time.
spk03: Great. Congrats again on the quarter. Thank you.
spk01: Thank you.
spk04: Thank you. And once again, as a reminder, please press star, then 1 if you would like to ask a question. And the next question comes from Gil Bloom with Nino & Company.
spk07: Good afternoon, and allow me to also add my congratulations on a strong quarter. So just a couple from us. First of all, did you expect to have a bit of a bolus of patients? What do you think the patient dynamics here? Are there like a lot of thrombocytopenic myelofibrosis patients that are just off treatment right now?
spk01: Yeah, Gil, this is a very common question. Did we have a large bolus of very sick patients at the start of the launch? And, of course, we did have some. We did like it. Like in any drug launch, there are always very sick individuals who are waiting for new therapy to come along. But those patients have not been the bulk of our growth over time. Recently, we are getting new patients, and the patients we've already had on board are having refills. We're having good refill rates. So overall... The message here is our launch is not dominated by a large number of quite sick advanced patients who came on at the beginning. This is the patients that we are providing drug to are in a much broader range of disease. As Jim said, first, second, third line, patients who are treated on label below 50,000 and patients who are treated spontaneously above 50,000 plate account.
spk07: That's very helpful. And maybe a bit of a mechanistic question on the ACDR1, ALK2 inhibition data. So would you have, what would be the significance of this sort of activity, you know, especially from the hepcididine perspective? Would we expect, you know, improved quality of life for patients here? Or could you give us some guidance?
spk01: Well, we're going to present more data at medical conferences towards the end of the year. And in that, you'll see what we believe is an important benefit of Procritinib on anemia. Previously, as reported in the PASSIST-2 trial, we have shown an anemia benefit, but we didn't have a mechanism of action to explain it. We recently did some work that demonstrated that procritinib is a very potent ACV1R inhibitor, and that's all the link between the clinical findings and the mechanistic findings. So now we're able to put the two together, and we have a more complete story. And we've shared it confidentially with some of our opinion leaders, and I'm really, really pleased at how well it's been received, the authors of some of the abstracts that we've submitted for publication. So I think prescribers are going to be very interested in this data as we progress further into the year.
spk07: Maybe a bit of a provocative question. You mentioned that usually in the second-line setting, thrombocytopenia goes pretty much hand-in-hand with anemia. When you look at the data from momolitinib, there wasn't that many patients who were both thrombocytopenic and anemic in the second-line setting. It's a little odd. Do you have any comments?
spk01: Yeah, there are a number of aspects of that trial, but we can't really explain. The population isn't quite what we've seen previously. And remember, we've conducted two phase threes, and we're into our third at the moment. So we've got a lot of data on this. We're waiting to see the full publication, and then we can make a better assessment of that. But I do agree with you. There are some findings on that trial that don't quite fit in with what others have seen.
spk07: Maybe a last one. Is there at any point you guys are expecting to give guidance on sales, or should we wait for next year?
spk01: Certainly, we don't plan to this year. David and I will keep looking at it over time, but it's not something we plan to do at the moment.
spk07: All right. Thank you so much for taking our questions, and again, I'll add my congratulations. Thank you, Gil.
spk04: Thank you. And this concludes the question and answer session. Now I'd like to turn it over to Dr. Adam Craig for any closing comments.
spk01: Well, just thank you, Keith, and thank you, everyone, for joining the call today. We very much look forward to further conversations over the coming months. Thank you.
spk04: Thank you. The conference has now concluded. Thank you for attending today's presentation.
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