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spk12: Good afternoon, everyone, and welcome to Decipher Pharmaceutical's third quarter 2021 financial results conference call. Today's call is being recorded. At this time, I would like to turn the call over to Jen Robinson, Vice President, Investor Relations. Jen?
spk06: Thank you, Operator. Welcome, and thank you for joining us today to discuss Deciphera's third quarter 2021 financial results. I'm Jen Robinson, Vice President, Investor Relations at Deciphera. With me this afternoon to discuss the financial results and provide a general corporate update are Steve Herter, President and Chief Executive Officer, Dan Martin, Chief Commercial Officer, Matt Sherman, Chief Medical Officer, and Tucker Kelly, Chief Financial Officer. Before we begin, I would like to remind you that any statements we make on this call that are not historical facts are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements made during this conference call include our expectations for our preclinical and clinical programs, commercialization of Kinlaw, and 2021 and 2022 guidance. Forward-looking statements made on this call involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, and we cannot assure you that our expectations will be achieved. Such risks and uncertainties include those set forth in our most recent quarterly report on Form 10-Q, as well as our other FDC filings. We assume no obligation to update or revise any forward-looking statements Following this call, a replay will be available on the company's website, www.decipher.com. With that, I will now turn the call over to Steve Herter, President and Chief Executive Officer of Decipher. Steve?
spk03: Thank you, Jen, and good afternoon, everyone. During the third quarter, we made significant progress against our strategic priorities, including both expanding the reach of Kinloch for patients with GIST around the world and providing important new data updates for the next two product candidates advancing through the pipeline, and moving toward registration-directed studies. In the U.S., we have rapidly established Kinloch as the clear standard of care in fourth-line GIST, providing a strong foundation as we prepare to report top-line results from the Phase III Intrigue Study in second-line GIST later this quarter. At ESMO, we presented long-term follow-up from the Phase III Invictus Study, showing that Kinloch nearly tripled the overall survival benefit for patients in this setting. Based on the totality of the clinical data we have generated with Kinloch so far, we remain confident in the potential for Kinloch to fundamentally transform the treatment of this disease. Outside of the U.S., we continue our work to broaden the geographic reach of Kinloch. In September, we received a positive opinion from the EMA's CHMP, and we expect EU approval for Kinloch and fourth-line GIST later this quarter. In October, we were also pleased to announce the approval of Kinloch by Swiss Medic, Switzerland's regulatory agency. This marks the seventh approval worldwide for Kinloch and our first approval in continental Europe. We are excited to bring this important new medicine specifically designed for GIST to patients in Europe who are in need of a new treatment option. Beyond Europe, our partner Xilab continues to execute on its launch of Kinloch and fourth-line GIST in the China market. where an estimated 30,000 new patients are diagnosed with this disease each year. Building on the recent regulatory approvals in China and Hong Kong, Zai received approval for Kinloch in Taiwan last quarter. We look forward to working with Zai to provide Kinloch to just patients throughout greater China. Later on today's call, Matt Sherman, our chief medical officer, will review the highly encouraging data updates we provided for Vimseltinib and Ravastinib at the ESMO meeting in September. We were excited to present these new data updates and disclose our plans to move forward with pivotal Phase III studies for these novel product candidates. For rimseltinib, our potential best-in-class CSF1 receptor inhibitor, we expect to initiate the Phase III motion study in patients with tenosynovial giant cell tumor this quarter. And for ribastinib, our potential first-in-class Ti2 inhibitor, we expect to initiate a registration study next year. We are leaders in targeting autophagy in cancer, and our old inhibitor, DCC3116, is the first to enter the clinic in this important area of cancer research. In June, we initiated the phase one study of DCC3116, and we expect to present data from the dose escalation portion of this study next year. In October at the triple meeting, we highlighted exciting new preclinical data with 3116 in combination with EGFR inhibitors. For the first time, we described the upregulation of autophagy in non-small cell lung cancer preclinical models with osomertinib, the current standard of care for mutant EGFR non-small cell lung cancer, and the significant antitumor synergy seen with the combination of DCC3116 and osomertinib. These data and the growing literature underscore the broad applicability of targeting autophagy in cancer and the potential for DCC3116 to be combined with a number of targeted agents across a spectrum of solid and hematological malignancies. I'll now turn the call over to Dan Martin, our Chief Commercial Officer, to discuss the Kinloch commercial results from Q3. Dan?
spk05: Thank you, Steve. In Q3, we continued to execute on our commercial goals for Kinloch. reinforcing its position as a standard of care and fourth-line GIST, and further strengthening the excellent foundation we have established ahead of our planned launch into the significantly larger second-line setting. In Q3, we achieved $21.7 million in total net product revenue globally, including $20 million in the U.S. The core drivers of Kinloch demand remained consistent, including new patient acquisition, payer access, and persistency. During the quarter, we increased our prescriber footprint by nearly 20% to approximately 530 prescribers since launch, with most of this growth again coming from the community setting. Other key performance metrics again demonstrated strong commercial execution and positive physician perceptions of Kinloch. As in prior quarters, we achieved high levels of prescriber reach, share of voice, and product awareness, and prescribers again gave Kinloch high marks for efficacy, safety, convenience, and ease of access. Consistent with our guidance during our Q2 earnings call, the percentage of patients receiving free drug under our patient assistance program, or PATH, was slightly higher than our 20% to 30% estimated range due to increased patient affordability challenges within the Medicare Part D patient population. Additionally, as expected, the Q3 gross-to-net adjustment increased significantly versus Q2 and was in line with our projected annual average of 15%. In Q4, we expect the core drivers of Kinloch demand to remain consistent, and we expect the PAT percentage in gross-to-net adjustment to be in line with Q3. Looking ahead, our team is hard at work preparing for the second-line launch, where we expect to benefit from the clinical experience and positive product perceptions we have already established. Since launch, in addition to the approximately 530 GIST treaters who have prescribed Kinloch, we have reached almost 3,000 additional physicians, mostly in the community setting, who are potential treaters of earlier Lyme GIST patients. Recent market research has also been very encouraging. In a recent market research survey, GIST treaters rated Kinloch higher than Sunitinib across all product attributes tested. based on their experience with the two agents. We believe Kinloch has the potential to establish a new standard of care in the second line setting, and we look forward to helping even more patients gain access to this important medicine. I will now turn the call over to Matt.
spk02: Thank you, Dan. We've made tremendous progress advancing our clinical stage pipeline this year, and I'm pleased to share the encouraging results we have in each of our programs. Importantly, In working towards our mission to discover, develop, and deliver important new medicines to patients for the treatment of cancer, we are rapidly advancing our clinical development programs forward. First, I'd like to start with Kinloch and the Phase III Intrigue Study, comparing Kinloch to SubmitMID in patients with second-line GIST. We expect to report top-line results this quarter and remain confident in the likelihood of success in this pivotal study. We are also excited to move forward with our next pivotal development program, VIMS Ultimid, our potential best-in-class inhibitor of CSF1R. This quarter, we expect to treat the first patient in the motion study, the global randomized placebo-controlled phase three study in approximately patients with symptomatic TGCT non-amenable to surgical resection. In the double-blind period of the study, eligible patients will be randomized two to one to receive either Vimseltinib 30 milligrams twice weekly or placebo for 24 weeks. Following the evaluation of the primary endpoint of objective response rate at week 25, patients will have the option to continue or cross over to Vimsultaminib during the open-label period of the study. I'm extremely proud of our team for getting this pivotal study up and running so quickly. There was a great unmet medical need in TGCT, and Vimsultaminib may offer a new best-in-class treatment option for these patients. Today, there is only one approved product for this indication, Pexidartanib. which has a black box warning and is subject to a REMS program due to potentially fatal hepatotoxicity, an adverse event that is thought to be an off-target effect. Interestingly, most patients are using off-label imatinib to treat their disease. Imatinib is a weak CSS1R inhibitor, which is not approved for TGCT and is listed in the NCCN guidelines based on limited data from a retrospective study that showed a low response rate. We are excited to announce today that we have received fast-track designation for Vimsaltinib from the FDA for treatment of patients with symptomatic TGCT who are not amenable to surgery. This designation is designed to get important drugs to patients who need faster and is intended to help facilitate the development of Vimsaltinib and expedite its regulatory review. The motion study was designed based on the exciting safety and efficacy results from the Phase I-II study we recently presented at ESMO this year. We reported a 47% objective response rate across all cohorts in the Phase I dose escalation portion of the study, and from patients without CSF1R treatment exposure, Cohort A of the Phase II expansion portion of the study. The encouraging pulmonary data from Cohort A is still early, and we are looking forward to longer follow-up. Treatment with vimsaltinib was generally well-tolerated in patients with TGCT. The majority of the common treatment emergent adverse events, 15% or greater, were grade 2 or lower. Now turning to our other late-stage focal program, ribastinib, our potential best-in-class type 2 inhibitor. Planning is ongoing for a phase 3 pivotal study of ribastinib in platinum-resistant ovarian cancer, or PROC. We expect to initiate this study next year, following feedback from health inquiries. Earlier this year, we presented exciting preliminary data at ESMO from the ongoing phase 1b2 study of Robastinib and combination of paclitaxel in heavily pretreated PROC patients. The combination demonstrated the promising median progression-free survival of 9.1 months. In addition, the confirmed and unconfirmed objective response rate was 38%, and the confirmed objective response rate was 29%. Based on the published literature, the median progression-free survival of single-aging paclitaxel is expected to be three to four months, while its objective response rate is expected to be 15 to 25 percent. The combination was also generally well-tolerated, and most treatment emergent adverse events were grade one or two. We recently received orphan drug designation in the EU for the treatment of ovarian cancer based on the positive opinion issued by the EMA, underscoring the significant unmet patient need that Rabacinib has potential to address. In addition to our late-stage programs, we are very excited about our next generation of product candidates led by DCC 3116, our first-in-class oak kinase inhibitor that entered clinical development a few months ago. The oak kinase is the initiating factor in the autophagy pathway, a key survival mechanism in which cells recycle components to generate energy. There is substantial and growing body of evidence showing that autophagy is upregulated in cancer cells to the stress and damage caused by anti-cancer treatments. And that inhibition of autophagy in combination with a variety of anti-cancer agents may provide a novel approach to treatment by directly addressing one of the important escape mechanisms that plague many types of cancer therapy. At the site where we've continued to generate preclinical evidence on the role of autophagy in cancer. At the recent triple meeting, we presented new data demonstrating synergy with 3116 and EGFR inhibitors of submertinib, endofatinib, and non-small cell lung cancer preclinical models. In vitro data showed that 3116 reduced autophagy that develops a resistance mechanism after treatment with EGFR inhibitors in lung cancer cell lines. In addition, the in vivo data demonstrated that the combination of 3116 with EGFR inhibitors resulted in significantly greater tumor responses in the lung cancer xenograft model compared to single-agent treatment. Researchers outside of Decipher have also continued to add to the strong case for a potential role of autophagy inhibition in the treatment of both solid and hematological malignancies. One recently published study in nature cancer showed that non-small cell lung cancers with an LKB1 mutation, which is frequently co-mutated with KRAS, are resistant to immune checkpoint inhibition that can be resensitized to PD-1 checkpoint inhibition after blocking the oak, kinase, and autophagy. Another recent study in science translational medicine showed that treatment of CML cell lines with an autophagy inhibitor and imatinib decreased growth. In addition, co-treatment eliminated persistent leukemic stem cells, which drive TKI resistance in patient relapse. Once again, our leadership role in the field of autophagy in cancer including O-kinase and VPS34 kinase, positions the cipher to make significant contributions to cancer patients in the near future. These data provide additional support for the potential breadth of the DCC3116 program, adding to the preclinical evidence supporting combination strategies with other cancer treatments, including MET, ERK, RAF, and direct KRAS G12C inhibitors, as well as PD-1, PD-L1 checkpoint inhibitors, and a wide range of cancers. We are actively pursuing preclinical combinations of 3116 with a variety of standard of care therapies and drugs acting by novel cancer mechanisms and look forward to reporting further on these studies next year. Our first area of focus for clinical development of 3116 is for the treatment of RAS-RAF mutated solid tumors in combination with a MEK inhibitor. The ongoing phase one study has two parts, a dose escalation phase and an expansion phase. Enrollment for the dose escalation phase of the study started in the second quarter of this year and will provide important single-agent data for 3116, including safety, tolerability, pharmacokinetics, and pharmacodynamics. Data from this phase will also determine the go-forward dose in the expansion phase of the study, where 3116 will be used in combination with Tremantinib and multiple tumor types. We look forward to presenting data from the dose escalation phase next year. We are strongly encouraged by the progress across each of our innovative programs and believe that these will make a meaningful difference in the treatment of patients with cancer. I will now turn the call over to Tucker Kelly, our Chief Financial Officer, to review the financial results. Tucker? Thanks, Matt.
spk04: I'd like to review the highlights from our third quarter financial results. Total revenue for the third quarter was $23.2 million, which includes $21.7 million in net product revenue of Kinloch. Net product revenues for the third quarter of 2021 includes U.S. sales of Kinloch of $20 million and ex-U.S. sales of Kinloch of $1.7 million. The growth to net adjustment in the third quarter was in line with our estimate of 15%. Collaboration revenue in the quarter was $1.5 million, which includes Kinloch supply and royalty revenue under our agreements with Xilab for Greater China. Cost of sales for the three months ended September 30, 2021 was $0.9 million, which included 0.2 million in cost of net product revenue for Kinloch product sales and 0.7 million in cost of collaboration revenue. We do not expect that the cost of sales as a percentage of net product sales at Kinloch will increase significantly after we have sold all zero-cost inventories and commenced the sales of inventories, which will reflect the full cost of manufacturing. We expect to continue to sell the zero-cost inventories of Kinloch in the U.S. during the remainder of this year and into 2022. Total operating expenses were $102 million in the third quarter of 2021 compared to total operating expenses of $79.4 million in the same period in 2020. Research and development expenses in the third quarter were $66.4 million compared to $49.2 million in the same period in 2020. Selling, general, and administration expenses in the third quarter were $35.5 million compared to $30.1 million in the same period in 2020. We expect that our operating expenses will increase as we continue to invest in the development of our clinical pipeline, execute on the commercialization of Kinloch in the US, and prepare for a potential commercial launch in Europe. We ended the third quarter in a strong financial position and remain well capitalized, with cash, cash equivalents, and marketable securities of approximately 392 million, which, together with our anticipated product, loyalty, and supply revenues, we expect will be sufficient to fund our operations into the first half of 2023. With that, I'll now turn the call back over to Steve.
spk03: Thank you, Tucker. As we enter the last quarter of 2021, I'm excited about what we've accomplished so far this year and the progress we've made across the company. We are well positioned for long-term success as we prepare to launch Kinloch in Europe and report the results from the Phase 3 Intreat Study. In addition, we continue to advance the rest of our pipeline of first-in-class and best-in-class product candidates, and we look forward to updating you on our future progress. Operator, I'd now like to open the call for Q&A.
spk12: And thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by, we compile the Q&A roster. And our first question comes from Chris Raymond from Piper Sandler. Your line is now open.
spk09: Hey, thanks for taking the questions. Just a couple quick ones, commercial questions here. Dan, I heard you talk about a lot of the metrics, but I'm not sure I heard you talk about this. Last quarter, I think you were indicating there was some intrapatient dose escalation that was going on, you know, past progression. I'm just wondering if you could talk directionally. Are you seeing that pick up? Is it the same? Is there any sort of dynamic to that, especially since, you know, you had that data at ASCO recently? It was published, I think, in July. And then maybe just sort of another sort of broader question, I guess, and I get this question, this is probably the most asked question I hear from investors, is just thinking about how quickly Kinloch became standard of care and fourth line just, you know, really maxing out the opportunity in three quarters. How should we be thinking about, you know, the dynamic in the second line setting? Obviously, it's a different... you know, sort of dynamic given that there's an established option in second line, but just kind of talk about, you know, the sort of velocity of penetration between fourth and second that you might be anticipating, assuming obviously positive data this quarter. Thanks.
spk03: Hey, Chris, it's Steve. So let me take the first part of that, and then I'll turn it over to Dan to address the other part of your question. So you referenced the IPDE data from both Invictus, our randomized phase three study, the fourth launch study, as well as from the phase one. And we were really pleased to see both of those data sets published in the peer-reviewed literature as manuscripts over the course of the summer months. And as you know from the data and certainly the feedback that we've heard from thought leaders, they view the PFS2 data that we generated upon dose escalation as being very meaningful clinically for patients, especially when you look at the data as a fraction of the benefit that patients received as measured by PFS1. So we're really encouraged by the data. As you might remember, in the phase one study, the dose escalation part of the study, we didn't actually reach a maximum tolerated dose with ripretinib, and we dosed patients up to 400 milligrams daily. So we feel as if we have ample headroom for dose escalation, and I think that's been now evidenced by the data from Invictus and from the phase one, and certainly even at that higher dose, the drug remains well tolerated. So we're encouraged by the data, and that underscores the efficacy of the product ingest. Dan, do you want to address the rest of Chris's question with respect to what you're seeing in the actual market in terms of utilization of IPDE?
spk05: Sure, absolutely. Thanks, Chris, for the questions. So on the IPDE front, you know, as Steve said, the data's been really well received by the KOLs in particular, who view this as a, you know, really meaningful benefit for patients. And so there's certainly been interest there. The challenge, though, is that, of course, this is an off-label dose, so we're not able to promote that. We only, of course, promote consistent with our labeled dose. And so, you know, what we see in the marketplace is relatively consistent use, which is a smaller portion of our overall dosing. The vast majority of doses are at the labeled dose. And, you know, a couple thoughts on this. You know, from a payer perspective, what we see is sort of inconsistent. We see some claims are approved for the IPDE dose and others are not. And, you know, it has not been added to the NCCN guidelines thus far. It remains to be seen if and when that will happen. If it is, and if we think that could provide some momentum with respect to not only demand for use of that dosing regimen, but also the access side of the equation. So, you know, we'll just have to see how that plays out, but thus far it's been pretty consistent as a relatively small overall portion of our dosing. With respect to your second question about uptake in the second line, Yeah, we've been incredibly pleased with the rapid uptake that we've seen in the fourth line. And we just continue to see, as I underscored in the prepared remarks, just tremendous support and belief in Kinloch and, you know, really high scores across the board, not just by users, but even more broadly as we've made more and more progress in reaching the community settings. I'm so really pleased with the progress thus far, and we think it bodes extremely well for our second line, planned second line launch. As I mentioned, we've reached an additional 3,000 physicians who are likely to be treaters of earlier line patients beyond the 530 or so that have prescribed it, you know, to date. And we reached, of course, we only message our fourth line indication to those physicians, to be clear, because you never know where a fourth line patient's going to appear. But the awareness that we've developed in that broader set of potential future prescribers, we think sets us up extremely well. And as I mentioned in the prepared remarks, the market research that we're seeing now suggests that just based on general experience and perceptions of the two drugs, that actually many just treaters rate Kinloch significantly higher than students. So for all of these reasons, we think that we're really well set up for second line. We think a relatively rapid uptake is certainly possible. The only other things I'll mention that will be things we work through, of course, is as you mentioned, there is an established therapy and we think that we'll need to continue to reach and continue to impact the community more and more because we think that earlier line setting will be that much more the domain of the community physicians. So those are things that we'll be very focused on driving at launch, but we think for all the reasons listed, we've got a great opportunity for a rapid penetration into the second line pending data from Intrigue.
spk12: Great. Thank you. And thank you. And our next question comes from Jessica Five from JPMorgan. Your line is now open.
spk08: Hey, guys. Good evening. Thanks for taking my question. A couple from the Where do you estimate your penetration rate stands in fourth line GIST at this point? And separately, can you talk about the next steps following the top line results for Intrigue? So how soon could you file? And appreciate those earlier kind of comments about the kind of reaching more community positions, but how much additional SG&A, if any, do you envision would be needed to support a second line launch?
spk03: It's Steve, Jess. Thanks for the questions. Let's try and work our way through these in turn. So I think that I'll take probably the last two here, and then I'll turn it over to Dan to talk a little bit about what we're seeing in the market in terms of penetration and how we view that. But with respect to the top line, once we report out the intrigue results, our next step, of course, would be to prepare a filing both in the U.S. as well as in Europe And, you know, our goal would be to, of course, get those filings in over the course of the subsequent months. And I think probably looking back to the timeline that we experienced with Invictus for the initial fourth line filing is probably a good proxy to use with respect to the U.S. filing. And we would, of course, hope to make the European filing shortly thereafter. With respect to SG&A and what to expect in terms of additional investment for a second line launch, We don't expect at all and don't plan to increase the size of our footprint from a commercial or medical affairs perspective. We are right-sized for the opportunity already, and as Dan has noted, we're already calling on the physicians in the community who treat patients with JIS who would see both fourth-line patients as well as second-line patients. So we wouldn't expect to see any increase in terms of headcount. Of course, there will be the additional investment in terms of marketing and promotional dollars as we start that launch process and the second line post data from Intrigue. Dan, do you want to cover off on the penetration question?
spk05: Sure, absolutely. Thanks, Jess, for the question. So we, you know, continue, all signs continue to point to being very highly penetrated within the fourth line opportunity. We do any number of surveys. You know, I've mentioned before that the data to derive a share is imperfect in the space So we leverage any number of surveys, physician surveys, but we also will go out and do what are called chart audit surveys where we'll actually have physicians pull their charts and show us, you know, who's getting what in the fourth line setting. And by all accounts, you know, it continues to be very highly penetrated, clearly viewed as the standard of care and fourth line. And one physician even told us lately recently, excuse me, that he views it as a, quote, must-use agent in the fourth-line setting.
spk08: Okay, thanks. Can I just add a couple follow-ups? The comment on the proportion of your patients who are on free drug right now seems like it's running a little high this quarter, and you talked about the same being true for the fourth quarter. Should we expect that dynamic to persist even through 2022 or to come back down to the range that you've talked about, that 20% to 30% range? And then one R&D question, how long do you project it will take to enroll the motion trial?
spk03: Thanks for the questions, Jess. Dan, do you want to take Jess's first question about PAT percentage and persistency of that? And then Matt, if you'd like to take the motion question.
spk05: Yeah, absolutely. Thank you. So good question, Jeff. Thanks. So as we mentioned on the Q2 earnings call, we did expect that PAP would continue to be at or perhaps slightly above the top end of our 20 to 30% range in Q3 and then likely in Q4 as well. And the reason for that is the way the Medicare Part D drug benefit or drug program works, is that if a patient goes on free drug program, they need to remain on free drug through the balance of the calendar year. So there is that, I don't know if seasonality is the best term for it, but there is that dynamic to the program that once you're into Q3, you have a sense for where you're likely to wind up as you round out the year. So that's why we've been able to provide the guidance that we have. And it's played out pretty much exactly as, you know, we anticipated thus far. Going forward, though, it does, as we've said all along, it does, we do expect it to vary somewhat quarter to quarter. These are that along with gross to net are things that can vary quarter to quarter. We think that overall our 20 to 30 percent estimated range is still very much the guidance that we would give, you know, over the whole of the year.
spk02: Hi, Jess. Yeah, this is Matt. So in regards to your question about the motion study, you know, we're very excited about the Phase 1-2 data that we recently presented at ESMO showing a combined 47% response rate across all cohorts in both the escalation and the cohort A expansion phase. And with that, we're planning the 120-patient motion study. It will be a randomized study in about 40 countries. Just as a benchmark, we were able to enroll about 40 patients in approximately six months in the Part 1 of the, or Core A of the Phase 1-2 study. So really excited about, you know, the interest from the investigators with the high response rate and now opening this up in multiple countries around the world. You know, we expect that this enrollment should be very good enrollment rates.
spk01: Thank you.
spk12: And thank you. And our next question comes from Michael Schmidt from Guggenheim. Your line is now open.
spk10: Hi, this is Paul on for Michael. Thanks for taking our questions. Just a couple on entry from us ahead of the readout. First, maybe your current thoughts on the expected genetic breakdown of second line patients in the study in terms of primary or secondary mutations. And then as a follow-on, any additional color on how you view the Exxon 13, 14 population in terms of patient share and potential performance of ClinLog for students would be really helpful. Thank you.
spk03: Great. I'll call it, Steve. Thanks for the question with respect to genetic profile in GIST and what we'd expect to see in the second-line population. I'll ask Matt to kind of follow up on this. But what we'd expect to see in the second-line population in the Intrigue studies, you know Intrigue is a 450 patient study, so we would expect the patient population to be very representative of what a second-line patient population would look like generally and as reported in the literature. And so in terms of primary mutations, we would expect to see about 70% of patients with a KIT exon 11, maybe up to 15% of patients with a KIT exon 9, and then you'd expect to see 5% to 6% of PDGFR-alpha mutated patients, and then the balance would be wild-type patients. So that's generally, when you look at the literature, references what you see in the literature in terms of expectations for a population in GIST in terms of distribution of primary mutations. Matt, is there anything else you would add to that in terms of secondary mutations?
spk02: Yeah, no, I think we would just also highlight the recent publication we had on the Invictus Phase III fourth-line study that was published in Clinical Cancer Research just back in September. And what that highlights is the distribution of both primary and secondary mutations in the fourth-line setting. And really, there's a quite extensive mutational heterogeneity in the fourth-line setting. And that's also been seen in the Phase I study when we had an earlier look at some of the second-line, third-line, fourth-line patients, also showing that many of these patients harbor up to five unique mutations. So it's interesting to note that broad-spectrum agents such as Kinloch will be necessary to really covered this broad spectrum of mutational burden that these patients harbor.
spk10: Great, thank you.
spk12: And thank you. And our next question comes from Yun Yang from Jefferies. Your line is now open.
spk01: Thank you. So Steve, in your prepared remark, you said Phase III intrigue data late this quarter. So should we assume that the data is going to be in December?
spk03: Yeah. Hi, Yun. Good afternoon. Thanks for joining the call. So with respect to our guidance on intrigue top-line results, what we've said very consistently is quarter four. So we have not refined that guidance to be any specific time within Q4. We've just said quarter four of this year. So what you may have heard me say was later this quarter, given that we're already in Q4.
spk01: Okay. Thank you. And then in the study, in terms of a tumor imaging scan, so in Intrigo Phase III, imaging scans are done every six-week cycle for the first six cycles, then every other cycle later, every other cycle. But in Intrigo, Pfizer's certain Phase III trial, I think a scan was done on day 28 of all treatment cycles and could be done more frequently. So I just want to ask you the rationale for you choosing every six-week cycle scanning in your trial aside from patient convenience? Yes, thanks for the question. Yeah, sorry for interruption. And then do you think that every six-week cycle versus every 28-day cycle would potentially impact PFS? Thank you. Sorry for interruption.
spk03: No, that's all right, Yoon. Thanks for completing the thought and the question. Matt, would you like to take that?
spk02: Sure, Stephen. Hi, Yoon. And so, yes, you're right. In tree phase three study, what we have is a scanning cycle of every other cycle with a six-week cycle. And that's related to the dosing of sudenitinib that patients are being administered. So the sudenitinib dosing, you know, is four weeks of drug and then a two-week rest period. And that constitutes one cycle. So it's very typical for companies to use that type of cycle for follow-up scans for patients. But what's probably most important is that it's the same for both arms of the study, even though repritinib is a continuous dosing drug. you know, the interval for scanning would be the same across the two arms of the study, and that prevents any bias in terms of the time to move in, such as a progression-free survival event.
spk01: If I remember it, maybe I'm mistaken, but I thought that Pfizer's trial, in Pfizer's phase 3 trial for SUTEN, tumor imaging was done on day 28 of all treatment cycles. So, Does that mean it's every six weeks as well, because two weeks off?
spk02: Yeah, that I don't know. We'd have to go back and look at the protocol design or look at the FDA documents for their actual schedule. But it's, you know, for our study, it's probably more important just to recognize that it's a pretty, you know, every six weeks is a very frequent interval for measuring tumor progression. In fact, many standard protocols, if it's a four-week cycle, will measure every other cycle. So that's on an every eight-week basis. So every six weeks is a pretty reasonable or aggressive interval to measure for those first six cycles.
spk01: Okay, thank you. Thank you for the clarification. And the last question is on VimCeltinib. So the Phase III motion trial, you are enrolling patients who are not amenable to surgery. So can you actually... quantify what percent of diffused in the form of a patient are not amenable to surgery in general. Thank you.
spk03: Hi, Eunice. Steve, thanks for the question. So at our ESMO investor event, after we presented the data at ESMO from the Phase 1-2 study with Femselton, and Matt referenced this earlier during the Q&A and also in the prepared remarks, we were really pleased to see that high 47% response rate we saw in that patient population across the Phase I and Phase II portions of the study, so really encouraging activity that we saw. Dan, Martin also spent some time talking a little bit about what we see today in the market in terms of how these patients are being treated and talked a little bit about patient journey and how these patients who are not amenable to surgery flow through. So maybe I'll ask Dan to comment on that in just a second, but Before I do, I think the one point that I would make, and I think that Matt mentioned this in his prepared remarks, is surprisingly in TGCT, despite having an approved treatment for these patients, pexidartinib, that drug, when we look at claims analysis in the U.S., actually isn't the market share leader, and it's not the standard treatment that's used for these patients. It's actually imatinib, Gleevec, despite the fact that imatinib is not approved for this use And the data to support its use actually shows a very low response rate in these patients. So, we think that speaks to the unmet medical need in TGCT. And I think that was really reinforced by the FDA granting Vimseltinib fast track designation. So, we were pleased to announce that as well today. Dan, would you like to comment just on patient journey?
spk05: Sure, absolutely. Thank you. And thank you for the question. So what we reviewed at ESMO was a lot of work that we've done, not only with KOLs, but also, as Steve mentioned, with a lot of US claims work to really try to understand the patient journey and also to try to size both the incident and the prevalent populations that we think are likely to be eligible for our drug upon launch. And so what we laid out was that we think there are about 14,000 to 18,000 patients were diagnosed annually in the U.S. with TGCT. Now that's both localized and diffuse. And as you mentioned, it is true that, you know, diffuse patients tend to have a higher recurrence rate than localized, but there are a lot more localized patients. And so both contribute to a population that would be recurrent after surgery. We think there's somewhere in the order of 2,000 to 2,400 a year who would recur after their first surgery. Now some of those patients may go on to get additional surgeries and receive some benefit, but ultimately it's this population as they progress where systemic therapy becomes a focus, systemic therapy delivered by medical oncologists. And so we've estimated that the incident RX treated population within the U.S. is about 1,300 to 1,400 patients annually. And then you know, given that this is a non-lethal disease, we believe that there is a meaningful prevalent population. And we estimate that to be about 8,000 patients, or 8,000 patients around the time that we would be launching. And that consists of patients who are on systemic therapy currently and those who were recently on in the prior several years. So that's kind of a summary of how it flows. And a little bit about the, we think, the market opportunity size-wise. And as Steve mentioned, while pexidartanib is a really important consideration from sort of a regulatory and development point of view, you know, it really has struggled with uptake. And we think about, you know, a lot of patients out there actually receive imatinib and other TKIs because of the issues that pexidartanib's profile presents.
spk01: So in your trial, when you say patients who are not amenable to surgery, that's not a really first timer for surgery, or is it the patients who had a surgery previously and relapsed so that they are not eligible for surgery anymore?
spk03: So it could be either, right? So it could be patients who present with a tumor and based on tumor location, or based on other maybe medical history of the patient, the patient's not eligible for a surgical intervention, and so, therefore, they become eligible for systemic treatment. Or it could be patients that have had a lengthy journey with the disease and have undergone multiple surgeries who then become eligible. And we've shared, you know, previously some vignettes from the Phase I experience, and we have both of those types of patients, in fact, in the Phase I-II study. There's a vignette of a woman who was diagnosed some years ago that had undergone multiple surgeries, I think, including a total joint replacement. And then we had another patient who was newly diagnosed but not amenable to surgery. So that's the spectrum.
spk01: Okay. Thank you very much.
spk12: And thank you. And our next question comes from Ren Benjamin from JMP Security. Your line is now open.
spk11: Hey, good afternoon, guys. Thanks for taking the questions. Just to piggyback off of what Jess asked, regarding next steps for the Intrigue study, I guess not after the data is reported. I'm pretty confident it's the next steps at that point. But kind of between now and, you know, call it the end of the year, can you just kind of take us through, you know, I guess how you're getting the data? Is this something that's coming in daily or weekly? Do you just wait for an email from the DSMB that says, you know, hey, this is what the results are? How long database cleanup might be? Just any sort of color in regards to that.
spk03: Yeah, Ren and Steve, thanks for the question. So let me try and answer that in general terms. So, you know, with any study of this nature that's a time-to-event endpoint, you know, of course a sponsor needs to wait for the number of events to accumulate in the study. before proceeding with data cleaning and then being able to lock the database and do the statistical analysis and then report out the top line. And the timelines associated with each of those steps, of course, can vary just based on complexity of the study, number of subjects in the study, and the like. So those are the key steps that are taken before any sponsor would be prepared to report out top line results.
spk11: Okay. And just, you know, I don't know when's the last time You guys get the data, but I guess based on the last time, you feel very confident that this can't slip, you know, into the first quarter or second quarter just because of a delay of events. You feel pretty confident about this fourth quarter, you know, bookends that you've created.
spk03: Yeah, thanks for the question, Ren. That's exactly why we reiterated today our guidance of reporting out top-line results for Intrigue in Q4 of this year.
spk11: Got it. And then just switching gears to the EU preparedness and the launch activities, I know we've talked about this in the past, but can you just remind us kind of what those are, the key EU markets that you're targeting? And as we think about kind of the EU launch, should we be using maybe the US ramp and fourth line as a good proxy, or should we be kind of looking more at the rest of the world revenues as kind of more of a proxy?
spk03: Yeah, thanks for the question, Ren. So let me try and address each of those components. So for us, our focus is on the five largest markets in Europe. So by five largest, I'm including the UK, despite the fact that the UK, of course, is no longer part of the European Union. But those are the five markets principally that we would be targeting with our team. As we've spoken about previously, our goal always has been to put in place a nimble focus team in Europe to address the fourth line launch in that territory. And we would expect to see that launch cascade over time across markets from early launch markets to later launch markets. And what really drives the timing is achieving market access. So in some markets, like Germany, we're able to price freely. So that allows us to launch very quickly. And in other markets, if you think about southern European markets, as an example, Italy and Spain, the pricing and reimbursement negotiations can take longer, and so those launches would occur at some later period in time once we achieve market access in those territories. And so the way that we think about our build is in a very efficient way, our organizational build is in a very efficient way to ensure that we're only adding the human resources that we need at the time when we expect to get market access in a key territory. Now, with respect to uptake, it's a great question, and I think, you know, touching on, I think it was a question that Chris may have asked earlier, One of the reasons that we think that we've seen such rapid uptake of Repretinib, of Kinloch, in the fourth-line setting in the U.S. is based on the strength of the data. So as you know, we reported long-term follow-up recently at ESMO, which showed, with longer-term follow-up, an overall survival benefit in the Kinloch arm of 18 months versus about six months in the placebo arm. So you're tripling in the overall survival benefit for patients. So I think the strength of the data certainly helps us in terms of being a compelling factor for physicians as they think about treatment options for their patients. And as we know, in the fourth-line setting, there are no good options aside from Kinloch for these patients. So when you combine the admit need with the strength of the data, we think that's a key factor or a key set of factors that's driving rapid uptake of the drug in that setting. So in Europe, I think it's premature for us to comment on what we might see in European markets. I think each market will be slightly different. So as we get into the markets, we'll be in a better position to talk about what we're seeing, what we see in terms of rapidity of uptake, and how physicians are viewing the drug as they get hands-on experience with it.
spk11: Great. And here's, I guess, one final one from me. Can you talk, you know, is there any thoughts from your end regarding a biomarker strategy that for the inhibitors of ALK or the autophagy, targeting autophagy inhibition. So is there a tumor selection or patient selection model where you can look for enhanced levels of autophagy that would result in a patient selection for clinical studies?
spk03: That's a great question, Ryan. I mean, we certainly are evaluating that. I think, however, preclinically, we certainly haven't seen any indication that there would be a selection strategy that seems to be a fairly widespread, you know, sort of upregulation of autophagy in solid tumors as well as now in CML based on what's been reported in the literature. And I think what's changing for us and what's evolving for us with this program specifically is we're starting to see not only in the data that we're generating internally but also the data in the literature, as Matt spoke to in his prepared remarks, we're seeing that this mechanism of escape seems to be very common when tumors are treated with targeted therapies. So we reported our own preclinical data looking at osomertinib and efatinib and mutant EGFR lung cancer models at the TRIPLE meeting. As we referenced in the prepared remarks, there have been other groups that have published now in the literature looking at LKB1 mutant non-small cell lung cancer, a separate group published on data looking at autophagy in CML. and the effect of imatinib on upregulation of autophagy. So we're encouraged by what we see as broad confirmation of the mechanism and the role that this plays as an escape mechanism in both solid and liquid tumors. And so for us, I think the challenge now is continuing, of course, to progress with the Phase I dose-escalation study, but also thinking about what this potential broad applicability tells us in terms of how our clinical program may evolve over time. So we're really encouraged by what we're seeing and certainly very pleased to be the leader in this space and to have the leading program first into the clinic.
spk11: Great. Thanks for taking the questions.
spk12: And thank you. And our next question comes from Robin Karnascus from Chewist Security. Your line is now open.
spk13: Hi, this is Alex Ksanagas from Robin. Thanks for taking the question. Can you walk us through any market research that you've done that touches upon how physician use for QNLOC in the second line setting would be affected by price and a student going generic? And is there any indication that a generic student affects the bar, so to speak, for QNLOC at all?
spk03: Yeah, thanks for the question. So we, of course, and Dan referenced this earlier, we've done quite a bit of market research with physicians in the U.S. to understand their perception of QNLOC relative to SUTENT even just based on the data that we've generated so far in the fourth one and, of course, from the phase one study in the second line cohort. And as Dan referenced earlier, we're quite encouraged by what we see in terms of physician response there. Dan, are there some details that you'd like to offer in terms of how we're thinking about SUTENT and its profile relative to Kinloch?
spk05: Sure. Just a little bit extra color. As Steve mentioned, we have done quite a bit of research thus far. Of course, the outcome of intrigue will be, you know, a really important part of understanding exactly how it will stack up with SUTEN in the eyes of treaters. And, of course, we'll do additional research after we have those results. But we've done quite a bit of work thus far. And what comes back really consistently is that, you know, there are concerns with SUTEN's AE profile. And it's a drug that, you know, can be hard to give and hard to take for patients. And so physicians, both academic and community, are really rooting for Kinloch and intrigued, and they really want to use it in the second line. In fact, we just did some research, as I mentioned in my prepared remarks, where we asked physicians, gist treaters, you know, for their, basically to rate the product attributes of Kinloch and Sutan side by side. And what we saw was that Kinloch came out on top on every attribute we tested. And by a fair amount, in fact, nearly all of the attribute scoring was statistically significantly higher for Kinloch. So I think what that tells us is that, you know, clinicians are really eager to use Kinloch in the second line. And, you know, I think that's why there's so much anticipation and looking forward to the intrigue results. As it relates to generic SUTIN, you know, we think that at the end of the day, most clinicians make their decisions based on the clinical evidence. And so a positive head-to-head study will put us in a great position with treaters. And we think also with payers. While obviously payers look to different factors, value and cost and such, at the end of the day, the gold standard for demonstrating head-to-head value is a head-to-head clinical trial, and that's what we have. We look forward to the readout of Intrigue, and we believe, you know, pending positive results will be in a really good position for a successful launch in the second line.
spk13: Sounds good. Thanks. And one more, if I can. I think we've touched on this before, but it's been another quarter, and, you know, when you interact with doctors, what are you seeing with how doctors use student in the second line, and has it been different from label at all?
spk03: Yeah, thanks for the question. So I'd be happy to take that. So, you know, we've done quite a lot of work looking at how physicians use SUTENT, and I assume your question really relates to dose and schedule. Is that correct? Yeah, exactly. Yeah, and so what we see is really a mixed bag. So there isn't any one standard dose and schedule that's used of SUTENT. So you see everything from the labeled dose and schedule of 50 milligrams four weeks on, two weeks off, all the way down to patients who are getting 25 milligrams per day, and we think that's probably just reflective of the tolerability challenges that are often seen with Sutan.
spk12: All right, thanks for taking my question. Thank you. And our next question comes from Brad Canino from Stiefel. Your line is now open.
spk07: Great afternoon, and congrats on the additional approvals for Kinloch Gump. One on intrigue and then one on the pipeline. You know, as I've been having my conversations heading into the intrigue data, one of the sticking points remains the high rate of censoring you announced back in early 2020. So I'd just like to ask, what is your level of confidence that you have that the censoring will not add bias to the PFS measure for either drug arm?
spk03: Thanks for the question, Brad. So this isn't something that we spend a lot of time thinking about. So, you know, we announced the addition of patients at the beginning of last year. We're really pleased with the conduct of the study and how the team has navigated intrigue during the pandemic in particular and following regulatory guidance from regulators around the world. So we're pleased with how things have been conducted and looking forward to reporting at the top line.
spk07: Okay, I appreciate that. And then on the call, you spoke at length about the ALK inhibitor. pretty grand ambitions for multiple combination therapy trials. So, Steve, how are you thinking about value creation for shareholders with this asset, given that you're already in three phase three programs and spending on those? Is the ALK inhibitor program that would be better to out-license and co-develop, and if so, at what stage? Or do you think you can establish some R&D collaborations for free drug where you share data but retain the cost and the value for the asset? Thanks.
spk03: Yeah, thanks for the question, Brad. So as we mentioned in the prepared remarks, we're really excited about the ULCC program and the potential broad applicability. And Matt spoke to this in some detail based on the data we reported at the triple meeting and, of course, what's been reported in the literature. So we do believe that the program has the potential to have very broad applicability in a range of solid and liquid tumors, potentially in combination with a variety of different targeted agents. So we're looking forward to continuing to follow the science here and to prioritize where we want to take the oak inhibitor in combination with other agents. And you'll be hearing more from us, I'm sure, in the coming months in terms of how we might decide to prosecute that. But with respect to partnering specifically, it would just be premature for me to comment on that. But we're excited about the program and the opportunity to build long-term value.
spk07: Okay. Thank you.
spk12: And thank you. And I have shown no further questions. I would now like to turn the call back over to Steve Hoarder for closing remarks.
spk03: Great. Thank you very much. Thanks, everyone, for joining us on today's call, and thank you for your continued support. We look forward to keeping you updated on our continued progress. I hope you all have a great evening.
spk12: This concludes today's conference call. Thank you for participating. You may now disconnect.
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