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spk02: Good morning and welcome to the CTI BioPharma fourth quarter and year end 2022 financial results and corporate update conference call. As a reminder, this conference call is being recorded. I would now like to introduce your host, Rumi Bernada, CTI Investor Relations. Please go ahead.
spk01: Good morning, everyone, and thank you for joining us on the call today. 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 types of statements identified as forward-looking in our most recent annual report on Form 10-K 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 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, timing to profitability, market adoption of BonJo, and the future success of our product launch. In addition, any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any intent to do so even if our views change. For a further description of these and other risks 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 FCC. On today's call, we have Dr. Adam Craig, our President Chief Executive Officer and Interim Chief Medical Officer. David Kerski, our Chief Financial Officer, and Jim Fong, our Chief Commercial Officer. After our formal remarks, we will open the call for your questions. I would now like to turn the call over to Adam.
spk03: Thank you, Romy, and good morning. We appreciate everyone joining us earlier than planned so that we can provide a timely update following the recent release of portfolio revenue by our royalty financing partners. I want to start the call today by reflecting on the achievements we've made over the past year as we've transformed from a research and development organization to a fully integrated biopharma with a strong commercial presence. In the first quarter of last year, we received accelerated approval from the FDA for Vonjo Procritinib for the treatment of adults with myelofibrosis with a platelet count below 50 times 10 to the 9 per liter. This approval launched our commercialization efforts, and we are extremely pleased with our progress to date. We generated $54 million in net sales in just the first nine months of commercialization, exceeding our internal year-end revenue goal, and in the process treated over 1,000 patients with Vonjo in 2022, a meaningful achievement for a rare disease such as MF. Jim Fong will elaborate on our commercial success in just a moment, but I'd like to spend a little time talking about the new data presented in December at the ASH annual meeting in New Orleans by Dr. Stephen Oh of Washington University. In his oral presentation, it was shown that procritinib is a potent actin-A receptor type 1, or ACVR1 inhibitor, that has potential to provide a significant anemia benefit in patients with cytopenic myelofibrosis. ACVR1 mediates hepcidin production, and its inhibition is thought to lead to improvements in transfusion independence and anemia in myelofibrosis patients. Anemia is common in MF, both at diagnosis and during therapy, and it's a poor prognostic factor. Almost all MF patients will develop anemia over the course of their disease due to disease progression and or drug toxicity from other approved JAK inhibitors. Dr. O's presentation highlighted several key findings related to Procritinib. In vitro data demonstrated that Procritinib inhibits ACVR1 at four times greater potency compared to Momolotinib with 24-hour inhibition of the targets. It was shown in vitro to reduce hepcidin levels. The clinical data demonstrated that treatment with Vonjo at the approved dose of 200 milligrams twice daily led to improvements in transfusion independence and anemia when compared to best available therapy, which included ruxolitinib. In invaluable patients treated on the phase three PASSIST-2 study. Over the last year, we have worked hard to establish the Vonjo franchise in the commercial space. To this end, we have filed for a patent term extension for our main composition of matter patent that, if granted, would extend this term by five years with an expected expiration date of 2034. And last month, Vonjo was granted seven years of orphan drug exclusivity by the FDA for our label indication that began in February 2022. As we enter our second year of commercialization for Vonjo, we are focused on generating quarter-over-quarter product sales while providing the best care to patients with cytopenic myelofibrosis. With that, I'll hand the call over to Jim.
spk05: Thank you, Adam, and good morning, everyone. As I look back on 2022, I'm extremely proud of my commercial team and our medical affairs colleagues who have led a successful launch for Vonjo, a novel JAK2 ACVR1 IRAC1 inhibitor. We achieved many accomplishments over the first nine months of launch, highlighted by the team exceeding our internal revenue goals and reaching the milestone of treating over 1,000 myelofibrosis patients. Looking ahead, we are very encouraged by the continued double-digit sales growth our team is producing. Today, I will provide a bit more context on these numbers, as well as provide a snapshot of what we are seeing so far in 2023. We completed a strong sales performance with a 16% quarterly sales increase in Q4 and continue to show strong launch momentum in the quarter across several key metrics, including consistent growth in new patient starts, substantial increase in the number of active patients on Bonjo, significant growth in new MF prescribers and accounts, a strong and expanding refill order rate, and increased awareness and interest in Vonjo's hematologic state profile for anemia and thrombocytopenia. To maintain this trend, we continue to focus on educating our existing and new prescribers on the benefits of Vonjo. Throughout 2022, we have conducted approximately 200 peer-to-peer education programs, reaching more than 2,300 healthcare professionals. Due to these efforts, physicians are becoming increasingly aware of VONGO as an important treatment option for MS. The scientific and clinical rationale for VONGO is resonating with providers, and they are recognizing cytopenic MS as a different disease that requires a different therapy, such as VONGO. As a result, the number of VONGO new prescriptions and accounts continues to grow, and a high proportion have become repeat users. Although my commercial team can only promote use consistent with the FDA-approved label, we are seeing the utilization of Vonjo evolve. In Q4, market research indicates approximately 50% of current Vonjo use is in patients with platelet counts at or above 50,000 per microliter compared to only 33% in Q3, with the majority of use coming from second-line patients. This change is likely related to the increasing awareness of the NCCN recommendations for Vonjo. In addition, we are seeing growth of Vonjo as a first-line treatment as well as an overall increase in duration of therapy. As previously mentioned, our physician user base continues to expand with broader adoption and penetration. The success of our market penetration is evidenced by the fact that the number of community physicians prescribing Vonjo has now exceeded physicians in the academic setting. As we all recognize, adoption of new treatments is typically much slower in the community versus the academic centers. With the growing number of prescribers coming from the community, I believe this will translate into increased sales potential for BonJo over time. Our sales momentum has carried nicely into 2023. We have seen consistent sales demand to start the year, and I look forward to updating you in May on our first quarter results. In summary, physician adoption is growing due to the increased recognition of Vonjo's differentiated mechanism of action and hematologic safety profile for cytopenic MF patients. Notably, we also continue to garner increased acceptance from the entire NPN community as a whole with Vonjo becoming top of mind as evidenced by our continued strong brand awareness among our audience. We expect our highly effective commercial team to continue their progress in 2023 leveraging our robust promotional and educational efforts, and maintaining a significant presence at major medical meetings. I'll now turn the call over to David to discuss our financial results.
spk04: Thanks, Jim. Our financial results for the fourth quarter and year end 2022 were published this morning in our press release and are available on our website. Therefore, I will summarize our current financial status. As Adam mentioned, we continued to increase our product sales quarter over quarter. For 2022, I'm pleased to report that we generated $21.1 million in net revenue in the fourth quarter and $53.9 million for the nine months of commercialization, exceeding our revenue goals. All revenue was entirely attributable to the sales of Vonjo. As expected, Towards the end of the year, we observed some holiday seasonality with our product sales, which is common for most oncology drugs. Vonjo product sales also provided meaningful reductions in our overall operating loss in the fourth quarter and full year, while we continue investment in SG&A related to marketing and commercialization of the product. Our cash, cash equivalents, and short-term investments as of December 31, 2022, totaled $79.9 million. Subsequent to the end of the quarter, we received $6.5 million in additional funding from our royalty agreement with DRI Healthcare Trust in January of 2023. Based on our current revenue projections and expenses, our objective is to be cash flow positive by the end of 2023. However, any meaningful changes to our clinical development plans or other transactions would impact this forecast. We have an active investment conference schedule over the next several months. We will be presenting on Wednesday, March 8th, at the 43rd Annual TD Cowan Healthcare Conference, and we will also be participating in the Needham Healthcare Virtual Conference and Stiefel oncology days in April. We look forward to these interactions and keeping you updated on our progress. I will now turn it back to Adam for closing remarks.
spk03: Thank you, David. We are delighted to share our accomplishments on the commercialization of Vonjo with you today. CTI is now established as the market leader in the treatment of cytopenic MR. as we offer simple, safe, and effective therapy for patients with an important medical condition. For 2023, we are focused on expanding the use of Vonjo with the aim of driving quarter-over-quarter revenue growth. We also continue to explore ways to increase the long-term potential for Vonjo through additional indications. This concludes our formal remarks. I'd now like to ask Shannon to open the line for questions.
spk02: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ken Shields with SVB Securities. Your line is now open.
spk08: Thank you and congrats on the great quarter. So you mentioned seasonality impacts for 4Q. I'm wondering if you could provide some additional color on this. And then additionally, you've mentioned the 50 to 50 on-label versus off-label population. I'm wondering if you have any color on how many of these patients were potentially, or the off-label patients were potentially anemic myelofibrosis patients who have had higher platelet counts. Thank you.
spk03: Thank you, Ken. I'll answer both those questions. First of all, we don't have that level of detail on whether the patients who are treated off-label have anemia. That's not something we have. With regards to the seasonality, the seasonality is really very much what we expected. The last quarter is a busy quarter for holidays. There's also the American Society Hematology meeting. So there's a lot going on that takes doctors out of the office. And we experience seasonality in the same way as many, many companies do who are in the oncology space.
spk08: Okay, thank you. And then just one more, if I can. So, you know, you guys obviously got the milestone from DRI. Do you have any color on what that threshold was? Was that 50 million or additional milestones expected this year? Any color there? And does that factor into the cash flow positivity guidance by end of 2023? Thank you.
spk04: Thanks, Ken. This is David here. We don't disclose the details of that milestone payment. It is incorporated into our guidance with respect to our cash forecast.
spk08: Okay, thanks.
spk02: Thank you. Our next question comes from the line of Ben Burnett with CFO. Your line is now open.
spk09: Hey, thank you very much. I guess I want to ask just two quick questions. First, I guess, where do you see the most ground to be gained kind of over the near term in terms of the Bonjo launch? Is it about getting deeper into the community or are there other aspects of the launch that's a bigger focus?
spk03: Hi, Ben. Jim, please.
spk05: Hey, Ben, this is Jim. Yeah, so essentially, yeah, we see the growth really coming from the community and continue to expand there. So no doubt that that's the observation we're looking for. And in addition, obviously, we're looking to continue to get better prognosis patients in the queue for us as well.
spk09: Okay. Excellent. I guess on that last point, so what are you seeing in terms of duration of treatment? Do you expect this to change over time? So, like, I guess, in other words, does the initial bolus of patients taking Bonjo, is that representative of sort of kind of what you expect the – the average patient, the duration of treatment from that average patient to be?
spk05: Yeah, Ben, obviously, you know, we've only had nine months until our launch, so it's tough to, you know, to really prognosticate on the durations. However, you know, to your point, like any new drug launch, the initial patients are going to be probably the poor prognosis patients, and so the durations typically are parallel to that. However, as we mentioned before, the evolution of the use of Vonjo is towards better prognosis of patients, and we're seeing the durations parallel that.
spk09: Okay. Understood. Thanks so much. Yep.
spk02: Thank you, Ben. Thank you. Our next question comes from the line of Gil Blum with Needham. Your line is now open.
spk09: Hey. Good morning, everyone, and congratulations on the progress. Maybe you could remind us how many patients are cytopenic on diagnosis?
spk05: Jim? Yeah, so essentially, you said at diagnosis, right, Gil? Yep. Yeah, so at diagnosis, approximately, you know, a third of patients will have platelet count less than 100,000. And at diagnosis, probably about 40% of patients will have anemia without form of cytopenia.
spk09: Gotcha. And over time, that generally increases because of disease progression?
spk05: Absolutely. Absolutely. Yes. In fact, you'll see over time, when you look at prevalence data, about two-thirds of patients will have platelet counts less than 100,000.
spk09: My second question is regarding guidance. And I know it wasn't provided in this quarter. but I'm curious as to what gates a decision about providing guidance. Thank you.
spk03: Thank you, Gil. We're not going to provide guidance at this time. When we're ready to provide guidance, we will let you know. One of the factors we're looking at is gross to net at the moment, and as we've spoken about publicly, the gross to net is still somewhat variable. And until it stabilizes, we will refrain from providing guidance.
spk09: Thank you. That's very helpful.
spk02: Thank you. Our next question comes from the line of Rene Benjamin with JMP Securities. Your line is now open.
spk09: Hey, good morning, guys. Thanks for taking the questions and congratulations on the quarter. You know, Adam, I guess I'd like to stick with the ACVR-1 data that was reported at ASH. I'm kind of curious as to what are the next steps, right, for the company? Is there any way to, you know, like what would be required to get this into the label, and how do you see this, you know, data ultimately being utilized from a commercialization effort?
spk03: Yes, well, first of all, the anemia data is a post hoc analysis, so it's unlikely that the clinical data would get into the label. However, the mechanistic data, the ACBL1R and the pharmacodynamic and pharmacokinetic data around that, it may be possible to get into that label, and that's something the team is working on. Moving forward, it's an important component of our scientific education of physicians through our medical science liaisons. It's not a data set that Jim's team can actively promote, but we can discuss it scientifically. And in 2023, we are expanding the number of medical science liaisons we have in the field so that we can continue the conversation around the ACBR1 data. After ASH, we had a lot of inbound interest and a lot of requests to discuss the data with us, and that's why we've increased the
spk09: number of people who are able to do that that is the the medical science liaisons can you just um provide some additional color how much how much would you um uh you know tell us that the increase will be for for msls and just kind of you know reading on reading in between kind of the the what you said the i just want to confirm you won't be starting some sort of a a larger study let's say um you know, to evaluate the anemia benefit. You know, going forward, it would really just be based on the data that's been generated to date.
spk03: Well, the anemia benefit will be assessed in the PACIFICA trial. As with respect to how much, I don't have a number to give you there. Post-ASH, we have had a significant amount of interest in the anemia data It was a very successful ASH for us, and we've come out of that into this quarter with a lot of questions and activity and discussions around the data. So it was very productive for us scientifically.
spk09: Got it. And then just my final question, you know, can you just talk a little bit about, you know, how you're thinking about price increases and how we should be thinking about the first quarter only because other companies that we follow tend to have increased gross to net in the first quarter as they try to help patients with the resetting of the co-pays and the like. Can you give us maybe a sense as to how we should be thinking about the revenues for this quarter?
spk03: We had a price increase at the end of the year. We're not going to comment on price increases for the rest of the year because, you know, there are a number of factors that we have to consider. And as the year progresses, we may or may not do an additional price increase. It's not a decision we've made at the moment.
spk09: Thanks. Sorry, I just wanted to know about the first quarter.
spk03: I'm sorry. Ram, I think you asked about the first quarter. We're encouraged. We've had a good start to the year, and we're progressing very well. But we will be reporting our first quarter results in about eight weeks' time.
spk05: Thanks for taking the question. Ren, I'm sorry, did you ask about the first quarter in terms of price increase? I'm sorry.
spk09: Yeah, I was more just trying to get a sense. We typically see a decrease in revenues in the first quarter because there's an increase in gross to net with other drugs like ruxolitinib as companies try to help cover the donut hole with patients. There's a delay to fill scripts. There's just some interesting dynamics that happen in in the first quarter just because of the reset that takes place. And so from an insurance perspective, and I just wanted to get your guys' thoughts on how that might impact, you know, Bonja.
spk03: We're happy to talk about that during the first quarter report call. We can't talk about that today.
spk09: You got it. Thank you guys very much. Thank you.
spk02: Thank you. Our next question comes from the line of Thomas Flatton with Lake Street Capital Markets. Your line is now open.
spk07: Hey, good morning. Thanks for taking the question. Jim, you mentioned that the number of community prescribers had exceeded the number of academic prescribers. I was wondering if you could characterize patient starts or total patients along those lines as well. Is that the same dynamic, or are you still waiting for more patients in the community setting?
spk05: Yeah, so that is the dynamic, correct? So we are seeing the new patient starts growing and that growth is exceeding in the community of those in the academic center. So we're really pleased about that because, like I said, it's a really good marker for penetration, adoption, and uptake of a new product launch.
spk07: Great. And then any comment on lower-dose Bonjo prescribing in patients that might be challenged with the adverse events?
spk05: Yeah, we are seeing some of that, no doubt. You know, if there are patients who are frail, that is up to the discretion of the physician. But by and large, the vast majority of Vonjo prescriptions are at the proper dose of 200 VID. Got it.
spk07: And then one quick one for David. There was a pretty significant uptick sequentially in R&D and SG&A. Was that end of year, David, or is that a new baseline we should use going forward?
spk04: I mean, that is reflective of our concurrent investment in SG&A. So it's, you know, as revenue continues to drive forward, that benefit we are using to invest in commercialization as well as marketing.
spk09: Great. Appreciate it. Thanks, guys.
spk02: Thank you. Our next question is, It comes from the line of Robert Haslett with VTIG. Your line is now open.
spk06: Thanks. Congrats on the progress, and I have a couple for me. I know you are not forecasting any price increases, Adam, but what was the price increase around year end? Sorry, did you say how much that was?
spk05: Yeah, hi, Bert. This is Jim Fong. Yeah, it was approximately at 9.9% on January 3rd.
spk06: Okay, great. Thank you. And then just with regard to the anemia data, is there kind of a broader strategy with regard to NCCN guidelines or additional publication that we should be thinking about as we think about kind of the evolution of Bonja?
spk03: Yes, certainly. We've already submitted some anemia data to the NCCN, and it's actually under review. But the final data set from Stephen Oh's work will be submitted once the latest versions are published. We're waiting for publication based on data we submitted last year. Once it's published, we can then submit the additional data. And we do expect there to be a modification of the guidelines sometime around mid-year with the potential approval of momolotinib.
spk06: Okay, terrific. Is there additional IP that's available with regard to anemia for Bonja?
spk03: I doubt it. The composition of MATA data IP is pretty robust, and with the five-year patent term extension, that will take us to 2034. I doubt the anemia data will be will provide anything. For additional patent protection or patent filing, we'd have to have something that was novel, and it probably wouldn't be considered as such.
spk06: Okay, terrific. Just one more for me. There's a material jump in prescriptions and in various metrics. I know that is a hugely blunt instrument, especially with regard to products like Vonjo, but we saw a jump in the January data. Is there anything behind that? I just would like to maybe know a little bit more. Is that the anemia data kicking in or other things at work there? Thanks.
spk05: Bert, what data are you referring to? Do you have a different syndicated report?
spk06: The symphony data, there's various prescription data, manufactured benchmark sales, different data metrics like that that show a pretty material jump. And I just want to make sure I understand some of the elements behind that.
spk05: Yeah, Bert, as you've seen, obviously the momentum that was created in Q4 ahead of Q1 is really continuing. And I think the – so we had already, again, seen robust momentum already started by the end of the year as the messages started to really penetrate our target audience. But, you know, I think the oral presentation, Ash, no doubt, continued to fuel that momentum that we're seeing today in Q1.
spk06: Okay. Thanks very much.
spk05: Thank you, Bert.
spk02: Thank you. This concludes the question and answer session. I'd now like to hand the conference back over to Adam Craig for closing remarks.
spk03: Thank you, Shannon, and thank you, everyone, for joining the call today. We appreciate your continued interest in CTI, and we look forward to keeping you updated on our progress. Shannon, that now concludes the call.
spk02: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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