This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk05: Good morning, everyone, and welcome to Decipher's Pharmaceuticals First Quarter 2022 Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Megan Myers, Senior Vice President at Argot Partners. Megan?
spk08: Thank you, Operator. Welcome, and thank you for joining us today to discuss Decipher's First Quarter 2022 Financial Results. I'm Megan Myers with Argot Partners. With me this morning 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, Margarita Duarte, Head of International, 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 St. Harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements made during this call include our expectations for our preclinical and clinical programs, our commercialization of Kinloch, and 2022 guidance. Forward-looking statements made on this call involved substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statement, 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 SEC 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.deciphera.com. With that, I will now turn the call over to Steve Herder, President and Chief Executive Officer of Deciphera. Steve?
spk07: Thank you, Megan, and good morning, everyone. Thank you for joining us today as we provide an update from the first quarter, review our financial results, and look forward to the rest of the year ahead. We have made significant progress toward our 2022 goals so far this year, delivering strong commercial performance for Kenlock and rapidly advancing our pipeline of product candidates. with first and best in class potential. On today's call, Dan Martin, our Chief Commercial Officer, will share more details about our U.S. commercial performance for the quarter and how we have successfully established Kinloch as the clear standard of care and fourth line GIST. Margarita Duarte, our Head of the International Business, will provide more details about the strong launch momentum of Kinloch in Germany and our plans for delivering this breakthrough therapy to patients in other parts of the world. Beyond Kinloch, we are making substantial progress as we advance our clinical stage portfolio and explore the full potential of DCC3116, our first-in-class inhibitor of the ALK kinase, which is the initiating factor in the autophagy pathway. Matt Sherman, our chief medical officer, will provide an update on the Vimseltinib development program now that the pivotal Phase III motion study is actively enrolling patients globally. Last month, at the American Association of Cancer Research annual meeting, we presented exciting new preclinical data with 3116 in combination with KRAS G12C inhibitors and lung cancer models. These data, together with the body of data we have previously generated, underscore the broad role of autophagy in cancer and the potential for DCC 3116 to benefit a significant number of patients with cancer worldwide. We look forward to presenting the first data from the ongoing Phase 1 study later this year and then exploring the potential benefit of combining 3116 with MEK and KRAS G12C inhibitors. Finally, we are very pleased with the outcome of our follow-on stock offering last week. We are now in an even stronger financial position, allowing us to rapidly advance our pipeline to build long-term shareholder value and deliver important new medicines to patients. I'll now turn the call over to Matt Sherman, our Chief Medical Officer, to provide an update on our R&D efforts. Matt?
spk06: Thanks, Steve. We continue to make rapid progress across our clinical and preclinical pipeline as we work to deliver important new medicines to patients for the treatment of cancer. Today, I'd like to start with DCC3116, our potential first-in-class ALK inhibitor. 3116 is a potent and highly selective switch control inhibitor designed to inhibit autophagy, a key tumor survival mechanism in cancer cells, by inhibiting the ALK1-2 kinases. These kinases have been shown to be the initiating factors that activate the autophagy pathway. Last month, we presented new preclinical data for 3116 at the AACR annual meeting in New Orleans. These results showed that the KRAS G12C inhibitors, Sotiracib and Adegracib, activate ALK-mediated autophagy as an adaptive mechanism for drug resistance. 3116 in combination with either sotiracib or edagracib inhibited ALK kinase activation and the resulting autophagic flux in a KRAS G12C mutated non-small cell lung cancer cell line. Importantly, the results also demonstrated that 3116 in combination with sotiracib translated to deeper and longer tumor regressions in vivo. in multiple xenograft models. Autophagy is a potential mechanism of drug resistance in cancer and represents a significant unmet medical need. The combination of a KRAS G12C inhibitor with DCC3116 has the potential to improve clinical outcomes for patients compared to a KRAS G12C inhibitor alone. The data presented at AACR last month provides strong preclinical support for this approach and underscored the importance of autophagy inhibition in the treatment of cancer. These most recent results build on the growing preclinical data set we have generated, underscoring the broad applicability of targeting autophagy in cancer. We recently compiled a summary of the preclinical data on DCC 3116 that is available on the Investors section of our website. This summary highlights the activity of 3116 in combination with not only G12C inhibitors, but also with receptor tyrosine kinase inhibitors, such as EGFR inhibitors, as well as inhibitors of the MAP kinase pathway, such as MEK inhibitors. We are continuing to generate exciting preclinical data for 3116 in additional combinations and across a range of indications, which we look forward to sharing later this year. DCC 3116 is currently being investigated in the single agent dose escalation portion of the phase one study in patients with advanced or metastatic solid tumors with the mutation in the RAS MAP kinase pathway. We're excited about the progress we've made, and we look forward to sharing initial data in the second half of this year. We will be focused on the overall safety and tolerability profile, as well as the pharmacokinetics and pharmacodynamic markers. This will allow us to select the recommended phase two dose that we will take into multiple combination cohorts in the second half of this year. We expect to be able to demonstrate target engagement through measuring levels of ATG14, a PD marker of oak inhibition. Based on the emerging preclinical data, we have updated our clinical development plan to include three initial combination cohorts, two with the MEK inhibitors, trimetinib and bidimetinib, as well as one with sotiracinib, an approved KRAS G12C inhibitor. subject to feedback from regulators. Now turning to vimseltinib, our potential best-in-class CSF1 receptor kinase inhibitor for the treatment of tenosynovial giant cell tumor. CSF1R inhibition has demonstrated promising clinical benefit in TGCT patients, and we believe that despite an improved treatment for TGCT patients in the U.S., there remains an unmet medical need for a highly effective therapy while maintaining safety and tolerability. Based on the data generated to date from our ongoing Phase 1-2 study in TGCT patients, dimsultaminib has shown strong efficacy and durability with an excellent safety profile. We're encouraged by this clear clinical proof of concept, and we believe that these data reflect how potent and selective dimsultaminib is for the CSF1 receptor and its potential to offer meaningful benefit to patients with TGCT. We continue to open sites and rapidly enroll our Phase III registration labeling motion study. We plan to provide an initial estimate of timing for full enrollment later this year. We will also be presenting updated results from our ongoing Phase I-II study of insultinib in TGCT in the second half of this year. Key updates from the initial results we presented at ESNO last year will highlight anti-tumor activity, longer-term safety data, and initial secondary endpoints based on patient-reported outcomes. Moving to our preclinical pipeline, later this year, we plan to nominate a development candidate from our Pan-RAF research program. This program is focused on developing a best-in-class dual inhibitor of BRAF and C-RAF kinases to address an unmet medical need in patients harboring Class I, II, and III BRAF mutations, as well as BRAF fusions. Nomination of this candidate will underscore the continued strength of our proprietary switch control kinase platform, which is a proven engine for potentially best-in-class and first-in-class product candidates. We are committed to the ongoing discovery of exciting new programs, adding to our portfolio of medicines that have the potential to improve the lives of people with cancer. Finally, I'd like to share a brief update on recent developments for Kinloch. Earlier this year, we presented results from the Intrigued Phase III Study of Kinloch and Second Line GIST at the ASCO Plenary Series Session. We've since submitted these results to the National Comprehensive Cancer Network Guideline Panel for GIST for consideration of Kinloch to be added to the Clinical Practice Guidelines of Oncology for GIST patients in the second line. I'll now turn the call over to Dan Martin, our Chief Commercial Officer, to provide an update on our U.S. commercial efforts.
spk04: Dan? Thank you, Matt. In Q1, we continued to execute on our commercial goals for Kinloch in the U.S., reinforcing its position as the clear standard of care and fourth-line gist, while continuing to expand our prescriber footprint and clinical experience with Kinloch. During the quarter, we achieved $23.4 million in total net product revenue in the U.S. Our key performance metrics continue to demonstrate strong commercial execution and positive prescriber perceptions of Kinloch. During the quarter, we again achieved the highest levels of prescriber reach and share of voice within the GIST market, and achieved the highest levels of Kinloch awareness among GIST prescribers since launch, with nearly 90% awareness of Kinloch across all GIST treaters surveyed. Product perceptions in the areas of efficacy, safety, convenience, and payer access were again extremely positive across both academic and community settings. Collectively, this has led to continued strength in the core drivers of Kinloch demand, including new patient acquisition, new prescriber growth, payer access, and persistency. Our launch-to-date prescriber base has continued to grow at a very consistent pace quarter over quarter and is now over 650 physicians, with the majority of new prescribers again coming from the community setting. During the first quarter, the percentage of patients receiving free drug under our Patient Assistance Program, or PAP, was at the low end of our 20% to 30% estimated range. This contrasts with the Pap percentage in Q4 of 2021, which was at the high end of this range. The decline in Pap percentage from Q4 to Q1 was due in large part to Medicare patients who moved from Pap to paid drug during the annual Medicare re-enrollment process that occurs each year in January. You may recall that in 2021, we saw a similar Pap trend in Q1. that the PAP percentage increased in subsequent quarters as these patients migrated back to PAP as they experienced increased patient affordability challenges as the year progressed. We may likely see the same phenomenon this year, which is part of the reason we say PAP can vary quarter to quarter and that we continue to expect it to be in the 20 to 30% range over the course of 2022. Turning to vimseltinib, as Matt noted, We are excited to see the strong progress we are making in rolling patients into the motion study as we continue to view TGCT as both an area of high medical need and a significant market opportunity. Extensive market research, KOL engagement, and analysis of multiple U.S. claims databases have given us a clear understanding of the patient journey in TGCT. Importantly, These multiple research methodologies and data sources have all produced very consistent outputs, which gives us confidence in our estimates of the size of the TGCT market as well as current product share and duration of therapy. Specifically, we estimate that 14,000 to 18,000 patients are diagnosed with TGCT each year in the U.S. Of these, approximately 2,000 to 2,400 patients will experience a recurrence after their first surgery and 1300 to 1400 will initiate treatment with systemic therapy. Overall, we estimate a total potential addressable market of $850 million in the U.S. alone, which does not include the additional opportunity associated with a significant prevalent treatment eligible population. In Europe, the incidence and prevalence of TGCT are expected to be proportional to the U.S., and given that there are no approved therapies in Europe, the unmet medical need is even greater. We believe that Vimseltinib, if approved, could be well-positioned in this market. We know that few patients who are treated with systemic therapy receive pexidartinib, the only FDA-approved therapy for TGCT, given the product's challenging risk profile, which includes a boxed warning, a REMS program, and extensive liver monitoring requirements because of known hepatotoxicity risk. According to our analysis of multiple claims data sets, the majority of the patients who are treated with systemic therapy receive off-label imatinib, which is known to be a weak CSF1R inhibitor. Given its potential best-in-class profile, we believe imseltinib could offer patients and physicians a highly compelling treatment option for this challenging disease. I will now turn the call over to Margarita Duarte, our head of international, to discuss the exciting results from our first quarter of the commercial launch of Kinloch in Europe. Margarita?
spk12: Thanks, Dan. We have been steadily expanding access to Kinloch around the world with approvals in nine jurisdictions, including the major markets of the United States, Europe, and China. I'm very pleased to be here to talk about the fantastic work our team has been doing to launch Kinloch in the first European markets. I'm thrilled to report that we are off to an excellent start as demonstrated by the initial revenue results in Q1. For the first quarter of 2022, we reported international Kinloch net product revenue of $5.4 million, most of which was product revenue from Germany and France. The strong results in the first quarter speak to the exceptional clinical benefit of Kinloch in the fourth-line setting, the high unmet medical need, and the hard work of the Decipher team to bring GIST patients and physicians a new treatment option for the first and fourth-line GIST. Prior to our regulatory approval of Kinloch in Europe, we identified two primary goals. The first was to rapidly establish Kinloch as the clear standard of care in fourth-line GIST across key European markets. The second was to focus on achieving reimbursement in markets where we can launch most quickly. We believe that we have made tremendous progress toward these goals since our regulatory approval in the EU in November of last year. As we announced earlier this year, we launched and are actively promoting Kinloch in Germany, providing access in France under a paid access program, and making main patient sales in Switzerland and in other countries. In Germany, we have seen a rapid uptake driven by high demand, exceptional KOL advocacy, and broad access to patients. In France, we have received authorization in Q1 for the post-approval paid access program which will allow for continued sales throughout the pricing and reimbursement process. We were also very pleased that the French National Authority has recognized the value that Kinloch brings to LGBT patients and has unanimously decided on a positive ASMR3 rating, which is only achieved by a small number of orphan treatments. With ASMR3, we have secured a favorable position from a pricing negotiation perspective, which we believe will result in a successful outcome. We believe the number of patients diagnosed with GIST each year across the five largest European markets is equivalent to the number of patients in the United States. We look forward to building on our U.S. launch success as we establish SkinLock as the clearest standard of care in forced-line GIST in Europe. I will now turn the call over to Tucker Kelly, our Chief Financial Officer, to review the quarterly financial results. Tucker?
spk03: Thanks, Margarita. I'd like to read the highlights from our first quarter financial results. Total revenue for the first quarter was $29.2 million, which includes $28.8 million in net product revenue of Kinloch and $414,000 in collaboration revenue, which includes Kinloch supply and royalty revenue under our agreements with Xilab for Greater China. Net product revenues for the first quarter of 2022 includes U.S. sales of Kinloch of $23.4 million and ex-U.S. sales of Kinloch of $5.4 million. Cost of sales for the three months ended March 31st, 2022 was $382,000, which included $366,000 in cost of net product revenue. Cost of sales will not include the full cost of manufacturing until the initial pre-launch inventory is depleted and additional inventory is manufactured and sold. We do not expect that the cost of sales as a percentage of net sales of Kinloch to increase significantly after we have sold all zero-cost inventories and commence the sales of inventories that will reflect the full cost of manufacturing. We expect to continue to sell the initial prelaunch inventory of Kinloch in the U.S. during 2022. Total operating expenses were $76.1 million in the first quarter compared to operating expenses of $86.7 million in the same period in 2021. Research and development expenses in the first quarter were $47.4 million compared to $55.7 million for the same period in 2021. Selling, general, and administrative expenses for the first quarter were $28.3 million compared to $30.7 million in 2021. Cash, cash equivalents and marketable securities as of March 31st was approximately $275.4 million. In addition, we added approximately $163.4 million to our balance sheet last week. We're very successful underwritten public offering of common stock and pre-funded warrants. Despite a very challenging biotech market, we were able to raise significant capital at a tight discount from top tier investors who understand the opportunity we have in front of us and have confidence in our ability to execute on our missions. Our strengthened balance sheet allows us to continue to invest in discovering, developing, and commercializing new medicines for patients and to create significant value for shareholders. We believe that our pro forma cash, together with the anticipated product loyalty and supply revenues, will be sufficient to fund our operations for the next three years into 2025. With that, I'll now turn the call back over to Steve.
spk07: Thank you, Tucker. We're excited about the significant progress we've made so far this year, and we're focused on delivering on the balance of our 2022 milestones as we head into the second half. For DCC3116, we plan to present initial data from the ongoing phase one monotherapy dose escalation study, and then move into the combination portion of the study with both MEK and KRAS G12C inhibitors. We are actively enrolling the pivotal phase three motion study of Vimseltinib in TGCT, and we plan to report updated data from the ongoing phase one two study. Our proprietary research engine continues to deliver new product candidates. and we plan to nominate a development candidate from our Pan-RAF program later this year. Finally, as we outlined on today's call, we are continuing to entrench Kenlock as the standard of care and fourth-line gist around the world. Before opening the call for Q&A, I'd like to recognize our team here at Deciphera for their work and dedication to our mission. They work hard every day to make a difference for patients, and I couldn't be more proud of what we have accomplished so far, and I'm tremendously excited about the opportunity that lies ahead. With that, operator, I'll now open the call for Q&A.
spk05: We will now begin the question and answer session. To ask a question, you will press star, then 1 in the telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question will come from Jessica Phi with JP Morgan. You may now go ahead.
spk01: Hey, this is JL for Jess. Good morning and thank you for taking our questions. We have a couple. So on 31-16, We see on the PR today that you evaluate in two different MEK inhibitors, but looks like only one KRAS inhibitors as a potential combination partner for S3116. So we are wondering what are the considerations here, and do you push all the three combos in parallel or sequentially? And then in the clinical update, you schedule to to give us on second half bovine seltenib. Is there any color you can provide to us regarding how you frame out how many patients or cohorts of data, what type of follow-up, how long of the follow-up we should expect from the patients when we see the update? Thank you.
spk07: Great. Yes, thanks for the questions. Good morning. So we'll try and take each of those in turn, and those are two good, meaty questions. Before I turn it over to Matt on 3116, we're really excited about the data we've generated preclinically so far and now has been presented at a variety of different medical meetings, including most recently the KRAS G12C inhibitor data that you referenced at the AACR conference just a few weeks ago. And so, Matt, why don't you, if you wouldn't mind, speak to the decision around the combination cohorts, and then we can come back to the Vimseltinib questions and the data update for the second half.
spk06: Yeah, no, thanks, Stephen. Thanks for the question. So, yes, Stephen indicated we're really excited about the growing body of evidence that we are generating using 3116, our selective inhibitor, the top G pathway, in combination with a number of interventions along the RAS MAP kinase pathway. The most recent data was presented this year at the ACR meeting, showing that in combination with KRAS G12C-specific inhibitors, both sartoracib and agracib, in combination with 3116 had increased cell killing and inhibition of tumor growth. So we wanted to move fast with this program, and looking at the preclinical data, we believe this is a class effect. The TuraCyp is an approved agent now. It's on the market as a single agent for non-sponsored lung cancer P12C inhibitor. So it provides us a benchmark opportunity to add to 3116 and look for a combined beneficial response.
spk07: And then with respect to Vimseltinib, as we noted in the prepared remarks and in the press release, we'll be presenting updated data from the ongoing Phase 1-2 study in the second half of this year. And as you'll recall, there are two cohorts, two expansion cohorts in this study. So the first cohort, A, is in patients who have been previously untreated with the CSF1 receptor inhibitor for their tenosynovial giant cell tumor. And the second cohort, cohort B, is in patients who have received prior treatment. And so we would expect for the data update in the second half to include, of course, longer-term follow-up on the patients who were enrolled in the dose escalation part of the study, as well as follow-up on the now fully enrolled cohort A, previously untreated patient population, in addition to disclosing for the first time data from cohort B, the previously untreated patient population. excuse me, the previously treated patient population. So what we'll be looking for, of course, is continued safety profile of encephalitis in this patient population, along with updated efficacy data from both of these cohorts.
spk05: Our next question will come from Ewan Yang with Jeffries. You may now go ahead.
spk11: Thank you. Good morning. Hi, Matt. I think I heard you saying that VIMS-SELTNAID Phase III Motion Study Patient Enrollment could be by end of this year. Did I hear you correctly?
spk07: Hi, Yoon. It's Steve. Good morning. Thanks for joining. So in the prepared remarks, what Matt commented on was the fact that we anticipate providing an update on when to expect full enrollment later this year. I see.
spk00: Okay.
spk07: So as we're getting sites opened up in the study, and actively now enrolling, we think we'll be in a better position later this year to provide an update on timing.
spk11: Okay, great. Thank you. So, Vimseltinib, so in the coronary phase III trial, you are enrolling non-surgery amenable patients, but from our KOL calls, It seems like post-surgery adjuvant setting could be an opportunity for this kind of a systemic product. So first question is, are you planning to run a trial in adjuvant settings? And second question on vimseltumab is that, as you pointed out, imatinib, although not approved, it's used more widely than pexidartanib. Given the black box, that could be one of the reasons. What do you think you would need to show in order to unseat imatinib once it's approved?
spk07: Yeah, thanks, Yoon, for the two questions. So I'll ask Matt to take the question about an adjuvant approach in TGCT. And then Dan Martin here can then address the data and our understanding of imatinib's use and what we believe the bar is in this disease in the U.S. market and globally, for that matter. Matt?
spk06: Yeah, no, thanks for the question. And, you know, first go back to the motion study. So as, you know, we've highlighted today and previously as well too, you know, this is our phase three registration enabling trial in patients with symptomatic TGCT who are not amenable to surgery. The endpoint here is a 24-week endpoint in the randomized blinded study. And will give us, you know, the clearest proof of evidence for the activity of themselves in this patient population. As you mentioned, too, there's other opportunities beyond this as well, you know, in patients perhaps in the adjuvant setting following surgery, and we certainly are looking at different opportunities here to expand the opportunity with insultamib going forward in the future.
spk04: And hi, this is Dan Martin. Thanks for the question about imatinib and what we see in the market today and what we think we need to deliver with insultamib to improve upon So as you noted, we've looked at multiple data sets, claims data sets in the U.S., which have all provided us very consistent outputs and a really good sense, high confidence of how the market is structured today. And what we see is that imatinib has the predominant share, we think somewhere around 70%. And that's not entirely surprising, as you noted, because we know that the safety issues with Pexasartinib have really been a drag on the commercial launch. And so, we really think that Vimseltinib has the opportunity to offer the best of both worlds and really have a best-in-class profile. So, whereas Imatinib is, as you say, not approved and has not been studied in PGCT in a randomized trial setting, We see retrospective studies that have identified somewhere in the 19 to 31% response rate for imatinib. So we think that if we're able to deliver a product that has better efficacy than imatinib and better safety than pextartanib, that's exactly what physicians and patients are looking for in this space.
spk11: Thank you.
spk05: Our next question will come from Chris Raymond with Piper Sandler. You may now go ahead.
spk09: Hi. Good morning. This is Allie for Chris. Thanks for taking our questions. So we have two. The first is on DCC 3116, and this is just related to a prior question. So on the phase one single agent dose escalation data coming in the second half, just given that the utility of this drug is to be used in combination, I guess, should we expect to see clinical activity during that initial monotherapy update, or maybe how are you framing expectations ahead of those data? And then, secondly, on Kinloch trends, just wondering, you know, since the January update to the NCCN just practice guidelines to now include the dose escalation to DID post-progression, Could you just talk to any changes you've seen since January, if there's been an uptick in NVID dosing or patient or payer receptiveness to that, or just how you think of that as a growth driver this year? Thanks.
spk07: Yeah. Hi, Allie. Good morning. Thanks for the good question. So, I'll ask Matt to take your first question about 3116 and what to expect from the phase one dose escalation monotherapy data update later this year. And then Dan Martin can address the Kinloch trends question and the IPDE or BID dosing that is now listed in the NCCN guidelines and any impact that he's seeing in the U.S. trends. Matt?
spk06: Yeah. Hi, Ali. So, you know, as you've indicated, you know, we plan to update folks on the monotherapy single-agent dose escalation phase of the ongoing study. And this is to look at the safety and tolerability of 3116 as a single agent, as well as to understand pharmacokinetics and pharmacodynamics, and typically looking at the potential to inhibit the autophagy pathway. And one potential downstream target is the protein ATG14, which is immediately downstream from the ALK kinase and is phosphorylated with activation autophagy. So one would expect inhibition of phosphorylation of ATG14 would be a very strong pharmacodynamic marker of the activity. We don't expect to see efficacy as a single agent, because as we've highlighted in much of the preclinical data, in the, under the pressure of an inhibitor of the RASMAP kinase pathway, autopsies upregulate it and becomes that bypass or survival mechanism for tumor cell growth. So it will only be in combination that one would expect to see the anti-tumor activity of 3116. Thanks, Matt.
spk04: Dan, do you want to take the catalog question? Yes, absolutely. Thank you for the question. We, as we said in my prepared remarks, I'm really excited about what we're seeing in the marketplace this quarter in terms of awareness of Kinloch and the extremely positive product perceptions that have been really consistent since launch. And as it relates to IPDE, as we've said before, there's great interest in this data, particularly among the KOLs and JISs. As you'll recall, this data from our Invictus trial as well as our phase one study has shown, you know, the potential for additional clinical benefit for patients who receive the IPDE dosing or 150BID dosing. And we were really pleased to see that the NCCN guideline committee added that data to the guidelines in January. We think that this could potentially be a growth opportunity for, over time, but of course, as I always say, this is an off-label indication and, or off-label use, I should say. And therefore, we can't and won't promote it, so any use would have to be spontaneous. In terms of what we're seeing, it's candidly a bit early to say how this will translate in the marketplace. You mentioned the payer piece. We would expect the fact that it's now in the guidelines evolved to a place where the payer barriers to IPDE dosing are few. That's typically how this works. So we'll just have to keep an eye on it. Again, we can't promote it, but we'll see how things evolve in the coming quarters.
spk09: Thank you.
spk05: Our next question will come from Michael Schmidt with Guggenheim. You may now go ahead.
spk13: Hey, good morning. This is Paul. I'm from Michael. Thanks for taking our question. One on the sort of relatively strong start for ClinLoc in Europe. Wondering if you could just provide some additional colors at some of the factors at play, whether there was an initial bolus of patients in the newly approved jurisdiction and where you think the uptake will trend over the next several months. And then I think previously you spoke about potential failed guidance at the last earnings call. Any updated view on when we could see that given that the European launch is underway? Thank you.
spk07: Yeah, hi, Paul. Good morning, and thanks for joining us, and thanks for the great questions. So let me take the second question first with respect to guidance, and then I'll ask Margarita if she would like to provide some color commentary on the launch in Germany so far, given that that is now underway since January of this year. So with respect to guidance, given that we are again in launch mode with Kenlock and the fourth line indication across Europe, we're not in a position to provide guidance on revenues for the year. So, our preference and our approach is to wait until we get to a steady state and have better visibility to what the trajectory may be so that we can provide more reliable guidance. So, we'll continue to update you on our progress quarter on quarter, and we're really excited by the strong start that we've seen so far in Europe. Margarita, would you like to offer some additional comment?
spk12: Margarita Garcia- Sure. Thanks, Steve, and thank you for the question. As I noted in my prepared remarks, our team has been doing fantastic work to launch Kinloch in the first European markets with a strong focus on Germany, and we are off to an excellent start as demonstrated by the initial revenue results in Q1. So I would say that the high unmet medical needs, the exceptional care advocacy that we are seeing in Germany, the strong execution by the Decipher team, as well as the strength of the data in the fourth line settings, all these are contributing to the strong demand that we are seeing in Germany.
spk07: Great. Thank you, Margarita.
spk05: Our next question will come from Ren Benjamin with JMP Securities. You may now go ahead.
spk15: Hey, good morning, guys. Thanks for taking the questions, and congrats on a great quarter. I think I heard Matt correctly mention that you guys are planning on submitting new intrigue data for the NCCN guidelines. Did I hear that correctly? And if so, what kind of, you know, additional kind of data are you submitting and what are you hoping to get out of the NCCN guidelines after the next review?
spk07: Yeah, hi. Good morning, Rand and Steve. So I'd be happy to take that. So you're exactly right. Matt noted in his prepared remarks that we have now submitted to the NCCN the data from Intrigue that was presented as part of the ASCO plenary series session at the end of January. So as companies usually do when there are meaningful data updates, companies will submit those data updates to the NCCN for consideration for the guidelines. The next NCCN sarcoma panel annual meeting is in the early fall, September timeframe, as I recall. So we don't have any visibility as to when NCCN may review a data submission that we provided or what the outcome of that might be. where we're excited to get the data update into the NCCN for their consideration.
spk15: Okay. And then, you know, maybe for Margarita, I think she mentioned there were nine jurisdictions, you know, that have already approved Kinloch. As we kind of think about the XUS strategy, how many more, you know, approvals or other countries might you be focusing on this year? And ultimately, how many do you hope to have under your belt?
spk07: Yeah, thanks, Ryan. So I'll be happy to take that with respect to what we expect across Europe specifically. So as Margarita noted in her prepared remarks and we've talked about previously, and I'm sure as you'll recall, market access across major European markets is staggered. So we don't expect to achieve negotiated pricing reimbursement simultaneously across key markets. And that can last for a period of anywhere from 12 to 18, sometimes 24 months, just depending on the product and depending on the situation. Now, we're really pleased to have received an ASMR3 rating in France. And we, of course, have priced the product in Germany and launched there, given that we're allowed to do that under German regulations. We have free pricing for a year before we need to negotiate price. So we'll continue to provide updates as we go, as we make submissions to HTA bodies in the U.K., for example, or in Italy or in Spain. But it's difficult for us to predict at this very moment when exactly we would achieve market access in those additional markets. And our approach will be to resource launches in those additional territories as we gain market access. Now, with respect to territories outside of Europe, As you know, we're working with distribution partners in Australia and other territories in that region, as well as in Canada. We, of course, have our partnership with Xilab for Greater China. And I'm sure over the course of the coming year to two years, there will be some incremental additional territories that come online where we're able to access markets. But we don't have specific guidance to provide on today's call.
spk15: Got it. And then just maybe one final one for 3116. You know, we saw some very intriguing data at AECR, especially with, you know, the combinations. Wanted to just see if there are any thoughts regarding a biomarker strategy, you know, outside of looking at, you know, mutated KRAS that you might be thinking about as you move forward. Thank you.
spk07: Yeah, thanks, Ren. Thanks for that final question on 3116. So I'll ask Matt to chime in on this. And we're excited as we talk about in the prepared remarks about the potential breadth of this opportunity. Of course, as you know, we are the first all-conhibitor into the clinic, and we'll have the phase one data later this year. And we've demonstrated now preclinically along the MAP kinase pathway and the receptor tyrosine kinase pathway, for that matter, that combination with 3116 results in meaningful tumor growth inhibition or even regression in animal models. But Matt, do you want to comment on kind of coming back to the phase one data later this year, what to expect in terms of PD markers specifically?
spk06: Yeah. Thanks, Ryan, for the question. I think I may try to answer your question in two parts. One is to go back and emphasize what our phase one update later this year would show in terms of, you know, not only safety and coming up with a recommended phase two dose for moving forward in combination dose escalation cohorts, but also focusing on a potential PD marker. So that would be a marker that would be involved in an autopsie pathway. And one protein that would be particularly interesting to us is an autopsie-associated protein called ATG14. It's immediately downstream of the old kinases. So by inhibiting old kinases with our selective inhibitor, one would see decreased phosphorylation of that target protein, ATG14. So one could look forward to seeing an update of that as a potential on-target mechanism of inhibiting autophagy in our clinical trial. The question also asked a question about a biomarker strategy. I think that, you know, that's also very important. As we looked across the clinical, the preclinical data across the RAS MAP kinase pathway, we could show that the combination of 3116 with various inhibitors, you know, whether it was a RAS-specific inhibitor such as cetrosib or adagracib, or whether it was MEK inhibitor, Trematinib, or Binimetinib, had additive or combined effects with 3116. So as we're updating our clinical development plan, moving forward into three combination cohorts with dose escalation, with Trematinib, Binimetinib, and Sotiracib, beyond that, we've outlined part two of the trial. We're going into tumor-specific indications, and each of those specific tumor indications as a biomarker strategy, for example, PDAC, or pancreatic ductal adenocarcinoma, would be KRAS-driven pancreatic cancer, which accounts for probably 98% plus of pancreatic cancer. And for sartoracid in combination with 3116, that biomarker strategy would be looking at, obviously, KRAS G12C-mutated non-small cell lung cancers to select out that population for responsiveness But this is our city after 3116. Great.
spk15: Thanks for taking the questions.
spk05: Our next question will come from Andrew Behrens with SBB Securities. You may now go ahead.
spk10: Hi, thanks. Can you guys summarize the data that have been submitted to the NCN committee to get endorsement for the second line? and give us an idea of the size of the addressable markets. I assume a lot of the value proposition could be in areas where patients are not amenable to a suit, neither for safety or efficacy reasons. Would these patients respond to Stivorga?
spk07: Hi, Andy. Good morning. It's Steve. Thanks for joining. Thanks for the question as well. So in terms of the data that we submitted to NTCN, it's very much aligned with what was presented at the ASCO plenary series session at the end of January. So this would be the PFS data showing that the Recretinib generated an equivalent PFS to Sinitinib in patients in the Intrigue study, and then showing the differential safety profile of Recretinib in this patient population. So really the totality of that data that we reported at ASCO formed the basis for the NCCN submission that we made recently. And I'll ask Dan just to comment on the second part of your question related to how to think about the market here, again, recognizing that this would be an off-label use of the drug that we would not be able to promote. Dan?
spk04: Yeah, thanks, Andy, for the question. So pretty straightforward, really. As Steve mentioned, we submitted the data. It was presented consistent with what was presented at ASCO this year. After the submission, it's really hands off for us, of course. We don't know what, if any, updates the guidelines committee would make, as is the case with any submission. In terms of thinking about, you know, the market opportunity, it really depends on how and if they would list the data in the guidelines. And just in a general sense, you know, the way we think about it is, although this is not something we would ever promote, if there would be a second-line listing, we would think that would make things a lot easier for physicians to gain access to the product for their patients, as these would be the payers who typically will cover indications and dosing regimens that are listed in the compendia. So we, like you, will be, you know, waiting to see what, if any, updates the committee makes, and based on that, we can provide some additional color as to our interpretation.
spk10: Can I just ask a follow-up question? So it sounds like it's really safety-tolerability driven rather than any sort of efficacy in a certain mutational burden. What percentage of patients do you think soon would be a difficult choice for in the second line. And our doctors, what are they doing now? Are they using Stavaga? Are they using, I guess, Avakit potentially? You know, just trying to get a sense for what could drive uptake. If you do get an endorsement there.
spk04: So, thanks, Andy, for the follow-up. Yeah, so, I mean, in general, when one thinks about how physicians think about these products, when we talk to our KOLs, talk to community treaters, and in our market research. You know, SUTEN obviously is the approved option in the second line. And it has its challenges, particularly from a safety point of view, a tolerability point of view. And so, you know, there was a lot of hope and optimism that Kinloch would be positive in intrigue and that we would get that approval in the second line because, what we hear is that, you know, SUTEN can be a challenging product to give. The data that we've generated has, as Steve mentioned, generally been viewed as, you know, efficacy, commensurate efficacy, similar efficacy, and a better tolerability profile. So, you know, we do get questions from KOLs about, gosh, you know, I'd like to have access to this in the second line. It looks overall like a positive profile for our patients, but again, all we can do is submit the data to the NCCN, see how that, what, if any, update they make, and then just to underscore one last time, this would be an off-label use and therefore not something we'd be able to promote, so the use would have to be sort of, you know, spontaneous in that way.
spk10: Okay, and the patients right now are still getting student, do you think, even though the docs would prefer to have an option, or are they getting something else like Stavargo or
spk04: Generally, yeah, I mean, generally speaking, SUTEN has the largest share within the second line. You know, some patients may get regorafenib in the second line if, you know, perhaps they have a known to have an exon 17 mutation. But in general, SUTEN is the predominant product in the second line.
spk10: Okay, thanks. Appreciate it.
spk05: Our next question will come from Peter Lawson with Barclays. You may now go ahead.
spk02: Great. Thank you. Thanks for the update. Just on revenues, as we think about the ex-US revenues, was that all patient demand? Was there any stock in or inventory buildup? And then if you could kind of talk through any of the total revenues, the total product revenues, what was the degree of kind of off-label use? Thank you.
spk07: Yeah, Peter, thanks for the question. I had a little bit of difficulty hearing the second part of the question. Your first part of the question was about whether outside of the U.S. you saw any inventory builds, for example, that might have driven revenue. The second part of the question, can you just repeat that for me?
spk02: About the degree of off-label use?
spk07: Also outside of the U.S. or in totality?
spk02: For the total. Yeah, in totality.
spk07: Okay, sure. So I'll ask Dan to take the second part of the question. On the first part of the question, in terms of what we're seeing outside of the U.S., the short answer is no. We don't believe that there's represented in the numbers that we presented for Q1 that inventory is a significant contribution at all to that performance. We think that is really just organic new patient starts that we've seen in Germany. as well as the ongoing name patient program that we're participating in in France, which is permissible under French law. So we think this is all just organic demand that's coming from patients in the fourth line setting who have been waiting for a new treatment option. Dan, do you want to comment on the off-label piece?
spk04: Yes, absolutely. Thanks for the question, Peter. So there are two flavors of off-label that we've talked about. There's the BID dosing or IPDE dosing, and then there's the earlier line therapy dosing. second line, for example, given the intrigue data. And as we said before, you know, we think that the NCCN guidelines and how and if those are listed, of course, the IPDE use was listed in January, and we'll wait and see on the intrigue data what listing, if any, that garners. But we think that the NCCN listing is important for physicians to be able to use the drug in these off-label settings, not only because of, you know, just sort of the evidence-based nature and the support that provides from the experts in the space, but also from the payer point of view. And today, you know, we, it's too early to say on the second line how that will play out, because as we noted, we've just recently submitted to the NCCN that data, so that's not listed in the NCCN so far. So we continue to see the, you know, large majority of our use in the fourth line, as has been the case to date in our launch. And then on the IPDE side of things, it's still a bit early to say how that will evolve. But so far, we continue to see the significant majority of our use at the QD dose.
spk02: Thank you. And then just on the XUS demand, how does April look, or how did the trend change? Yeah, Peter, Steve, so I'm happy to take that.
spk07: As we said on the call and the prepared remarks, we're really pleased to see the strong performance in the quarter with our launch in Germany and with the use that we're seeing under this French program. So we think it's representative of the high unmet need in the fourth line and the strength of the data from Invictus, which is driving utilization. As Margarita noted in her comments, We have very strong thought leader advocacy across the major European markets. These are all physicians, mostly who participated in the clinical studies, whether it be Intrigue or Invictus. And so they have good firsthand experience with the drug and their patients with GIST. And I think that we're now seeing translated as they kind of generalize that knowledge and that approach to treating their fourth-line patients now that the drug is commercially available in Germany specifically.
spk02: Thank you so much. Thanks for taking the questions. Thanks, Peter.
spk05: Again, if you have a question, please press star then 1. Our next question will come from Brad Camino with TIFL. You may now go ahead.
spk14: Hi, good morning. For the ALK, can you speak more about how you plan to measure the ATG14 pharmacodynamic effect in the patients? We've heard from some physicians that biopsy samples for patients are maybe the most robust way to do it because the phosphorylation might be hard to read in blood samples. So can you discuss how you will conduct the measurements for the patients and what degree of change you hope to see as well? Thank you.
spk07: Yeah, hi, Brad. Good morning. It's Steve. Matt, would you like to take the questions on ATG14 and how we're measuring that?
spk06: Yeah, sure. And Brad, I didn't hear quite what you said when you were talking to other physicians, what their concern was about measuring ATG14 phosphorylation.
spk14: Well, it might not have been ATG14 in particular, but just measuring autophagy, they believe that having a biopsy sample was the more robust way to do it than something that was blood-borne. So I wanted to know exactly how you were measuring it and then kind of your confidence in the measurement and what you're hoping to see.
spk06: Okay, thanks. No, I understand. Yeah, no, it's always an interesting dilemma because, I mean, while one might want to biopsy the tumor specifically to see what the effect is in the actual tumor, we understand, in fact, there's a lot of heterogeneity in biopsy samples in patients with metastatic disease. So first, it has to be a tumor site that's accessible by a biopsy, which is not often the case. And secondly, you know, does that biopsy represent the totality of that patient's tumor burden? And when this has been looked at formally, it's very, actually, it there's not a lot of good correlation between a site in the liver versus a site in the lung versus, you know, a primary tumor elsewhere. So our approach is actually using a blood-based assay that's based on peripheral blood mononuclear cells, and that will give us, you know, the best evidence of inhibition of autophagy. And this has also been, you know, validated in other non-clinical, pre-clinical experiments as well, too. In terms of what types of effect one would see, we have a potent inhibitor, And we expect that we would be seeing at least a 75% type of reduction in the baseline autophagy levels in each patient. So that, I think, would be a broad guideline in terms of what we'd like to achieve in the clinic.
spk14: Okay. I appreciate the comments. Thank you.
spk05: This concludes our question and answer session. I would like to turn the conference back over to Steve Hoarder for any closing remarks.
spk07: Great, thanks. Thanks to all of you for joining us on today's call, and thanks for your continued support. We look forward to keeping you updated on our future progress. I hope you have a great rest of your day.
spk11: Goodbye.
spk05: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer