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.
spk09: Thank you, Operator. Welcome, and thank you for joining us today to discuss Decipher's third quarter 2022 financial results. I'm Jen Larson, Senior Vice President of Finance and Investor Relations. 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, Mark Rieda 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 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, our commercialization of Kinloch, and 2022 guidance. Forward-looking statements made on this call involve substantial risks and uncertainties that could cause the 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 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 Herter, President and Chief Executive Officer of Deciphera. Steve?
spk15: Thank you, Jen, and good morning, everyone. Thank you for joining us today as we provide an update from the third quarter, review our financial results, and discuss upcoming corporate milestones. We achieved another record for Kinloch revenue in the third quarter, reflecting our success delivering this breakthrough medicine to patients in the United States and around the world. Our efforts to expand the global reach of Kinloch continued as we submitted a reimbursement application to authorities in Italy and initiated the market access process in Spain. We are proud of the difference Kinloch has made in the lives of fourth-line GIST patients around the globe, and we remain committed to ensuring this important medicine reaches the patients who need it most. We made significant progress in the third quarter across our clinical stage portfolio and presented exciting new data updates from the Vimseltinib and DCC3116 programs at the European Society of Medical Oncology, or ESMO, Congress in Paris. At ESMO, we presented the initial phase one dose escalation data for DCC3116, our first-in-class ALK inhibitor targeting the autophagy pathway. in patients with advanced metastatic tumors with a mutant RAS or RAF gene. We demonstrated three key outcomes in the Phase I data. DCC 3116 demonstrated dose-dependent pharmacokinetics, a favorable tolerability profile, and strong target inhibition across all dose levels tested. Since the presentation at ESMO, we completed enrollment in the Phase I single-agent dose escalation portion of the study. and selected the starting dose for these cohorts. We announced today that we opened enrollment of these dose escalation combination cohorts with the first patient treated last week. At ESMO, we also presented updated data from the Phase 1-2 study of Vimseltinib, our orally administered inhibitor of CSF1 receptor for the treatment of patients with tenosynovial giant cell tumor, or TGCT, not amenable to surgery. The updated data underscored the best-in-class potential of imseltinib, demonstrating strong clinical activity, positive patient-reported outcomes, and a favorable tolerability profile. Finally, we announced today that we have nominated BCC3084, a selective inhibitor of BRAF and C-RAF kinases, as the next clinical candidate to enter our portfolio. Discovered using the same proprietary kinase inhibitor platform that has brought us Kenlock, Vimseltinib, and DCC3116, we believe DCC3084 has the potential to be best in class and demonstrates our ability to discover novel agents for the treatment of cancer. I'll now turn the call over to Dan Martin, our Chief Commercial Officer, to share more details on our strong U.S. commercial performance. and then to Margarita Duarte, our head of international, to provide an update on Kinloch's ongoing fourth-line launch in Europe, which has continued its positive momentum throughout the year. Dan? Thanks, Steve.
spk14: In Q3, we continue 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 grow our prescriber footprint and position experience with Kinloch. During the quarter, we achieved $24.5 million in total net product revenue in the U.S., which represents a 23% increase from Q3 of last year. Our key performance metrics continue to reflect strong commercial execution. In Q3, our sales and marketing teams again drove strong unit demand volume across all business segments. Our launch-to-date prescriber base has continued to grow at a very consistent pace quarter over quarter, exceeding 750 positions through Q3 2020. with the majority of new prescribers again coming from the community setting. Our market access team has continued to deliver excellent payer access with 100% payable claims for on-label patients during the quarter. And we again saw strong persistency and time on therapy. The percentage of patients receiving free drug under our patient assistance program or PAP was at the high end of our 20 to 30% estimated range as anticipated. Consistent with what we saw in 2021, we expect the PAT percentage in Q4 of this year to again be at the high end of our estimated annual range of 20 to 30%. Turning to themselves in it, as the clinical team continues to rapidly enroll patients in the phase three motion study, our commercial team continues to prepare for the potential launch of our second marketed product. Given the limitations of existing therapies, there is a clear unmet medical need for TGCT patients who are not amenable to surgery. In market research, physicians and patients consistently cite the desire for an effective therapy without having to sacrifice safety and tolerability. Our recent market research with TGCT treaters further supports the potential for vimseltinib to establish a new standard of care. We conducted detailed interviews with TGCT treaters to gain their feedback on the vimseltinib data generated to date and on how it compares to existing treatment options. After reviewing product profiles for Vinsultinib, Paxartinib, and Imatinib, TGCT treaters consistently rated the Vinsultinib profile as highly compelling across all key product attributes. When asked which of the three products they would be most likely to recommend to their TGCT patients, every physician interviewed selected Vinsultinib, commonly citing what they perceived to be best-in-class efficacy and safety. This feedback from TGCT treaters further underscores why we believe in Sultanate has the potential to deliver a best-in-class profile and the opportunity to provide tremendous clinical benefit to TGCT patients globally. I will now turn the call over to Margarita Duarte, our head of international, to discuss the results from the third quarter of the commercial launch of Kinloch in Germany and the progress we're making in other European countries and around the world. Margarita?
spk11: Thanks, Ben. We are very proud of the strength and continued momentum of Kinloch's European market entry driven by our launch in Germany and the post-approval paid access program in France. We remain very pleased with the launch trajectory in Germany with continued growth in the number of prescribers and number of patients and the treatment with Kinloch throughout the third quarter. As we build awareness in Germany, we are also working hard to conclude the reimbursement negotiation And this is the pricing that reflects the major additional benefits that Kinloch brings to fourth-line G patients. Despite some expected toughness in volume driven by the summer period in France, Kinloch continues to be very well received with exceptional KOL advocacy and very strong product perception. The team continues to make good progress with price and reimbursement and successfully preparing the market for the launch next year. International Kinloch net product revenue was $7.8 million in the third quarter, which includes net revenue from sales in Europe, as well as product revenue from distributors in other countries. While we continued growth in Germany, overall international Kinloch revenue was negatively impacted by lower product sales outside Europe and by the continued weakness of the euro in Q3. In parallel with the strong commercial performance, our team continues to tirelessly pursue market access on a country-by-country basis, and we are excited by our recent progress in two key territories with the recent reimbursement application submission in Italy and the initiation of the market access process in Spain. We also continue to advance our process with NICE for access in England and in Wales and look forward to sharing updates on future calls. I will now turn the call over to Matt Sherman, our Chief Medical Officer, to discuss the exciting progress we have made across our clinical and research pipeline. Matt?
spk02: Thanks, Margarita. We are encouraged by the excellent progress we have made throughout the last quarter, advancing our pipeline of novel kinase inhibitors as we continue to bring innovative new medicines to cancer patients. As Steve mentioned, it was our privilege to present new data from the DCC 3116 Andromfiltrinate programs at the ESMO Congress in September. At ESMO, we reported positive preliminary data on the Phase I single-agent dose escalation portion of the 3116 study. The results show that 3116 was well-tolerated and achieved exposure and ALK1-2 inhibition at all dose levels that were associated with anti-cancer efficacy with MEK inhibitors in preclinical studies. As of the data cut off at ESMO, 3116 was evaluated in 18 patients across four dose levels from 50 milligrams BID to 300 milligrams BID and was well tolerated with most treatment emergent adverse events being grade 1 or 2. ECC 3116 exposure appeared to increase dose proportionally and demonstrated targeted inhibition with significant decreases in the phosphorylation of ATG14, a direct ALK1,2 substrate in peripheral blood-bonding nuclear cells across all dose levels tested. As we noted at ESMO, we extended the 100 to 300 milligram BID dose cohorts with additional patients to further characterize DCC3116 and better inform the selection of the starting dose for the combination dose escalation cohorts. After enrolling 10 more patients in the study, I am pleased to announce that we have not reached the maximum tolerated dose in a single agent dose escalation and have selected 50 milligrams BID as a starting dose level for the combination cohorts. The first three combination dose escalation cohorts will include two cohorts in combination with MEK inhibitors, trimetinib and bidimetinib, as well as one cohort with sotiracid, an approved KRAS G12C inhibitor. All three cohorts are now open for enrollment, and last week we treated the first patient. The robust results from the single-agent portion of the study provide an excellent foundation for our clinical strategy of combining DCC3116 with a broad range of partner drugs across many different mechanisms of action, which could potentially revolutionize the treatment paradigm for a large number of cancer patients. Now turning to vimseltinib, our CSF1 receptor kinase inhibitor that has the potential to be a best-in-class treatment for TTCT and a substantial improvement on the currently available therapy. The updated data presented to ESMO from our Phase 1-2 study continue to demonstrate vimseltinib's anti-tumor activity and support its encouraging safety profile. themselves in this strong efficacy was highlighted by high response rates across all parts of the study with early and sustained responses for many patients and response rates that continue to increase over time. In the phase one study, which is the most mature part of the study, we saw an objective response rate of 69%. In cohort A of the phase two portion of the study, the objective response rate was 53%. And in addition, for the first time, we also presented response data from cohort B of the phase two portion of the study. which includes patients with prior therapy that inhibits a CSF1 receptor. Even in this pre-treated population, vimseltinib showed an impressive initial objective response rate of 46%, including responses in some patients who had not achieved a previous response or who progressed on or after receiving prior CSF1 receptor-directed therapies. Treatment duration continued to increase in the most recent data cut. In the Phase I study, which included the most mature data, The median treatment duration was 17.5 months, and 53% of patients in Phase 1 remained un-studied. We look forward to providing an update on the consultant's impressive treatment duration at the next date of disclosure. In addition to the deepening and durable responses observed, we are very pleased by the updated safety profile with longer-term follow-up across all Phase 1 dose cohorts and at the recommended Phase 2 dose in cohorts A and B. We believe Insultant has the potential to address the limitations of existing therapies with a best-in-class product profile and are encouraged by the substantial clinical data we have generated to date, along with the progress of our Phase III Registration Enabling Motion Study. Enrollment continues to progress very well, and we look forward to providing an update in the coming months on our estimated time to reach full enrollment. Moving to our preclinical pipeline, We are excited to announce today the nomination of our Pan-RAF Clinical Development Candidate, DCC3084. This molecule is a selective inhibitor of the BRAF-CRAF kinases and inhibits Class I, II, and III BRAF mutants, BRAF fusions, and NRAS mutant cell lines. Preclinical studies of DCC3084 demonstrate both single-agent and combination activity in favorable pharmaceutical properties. a key potential differentiator from other PANRAP programs and developments. I will now turn the call over to Tucker Kelly, our Chief Financial Officer, to provide a financial update. Tucker?
spk13: Thanks, Matt. I'd like to review the highlights from our third quarter financial results. Total revenue for the third quarter was $36 million, which includes $32.3 million in net product revenue of Kinloch and $3.7 million in collaboration revenue, the majority of which is Kinloch commercial supply revenue under our agreements with Xi Lab for Greater China, as well as royalty revenue. Cost of sales for the three months ended September 30th, 2022 was 3.3 million, which included approximately 700,000 in cost of net product revenue and cost of collaboration revenue of 2.7 million. In Q3, we completed the sale of zero cost inventories that had been expensed as R&D prior to FDA approval in 2020. As we transitioned to selling inventory that reflects the full cost of manufacturing, We do not expect the cost of product sales as a percentage of net sales of Kinloch to increase significantly. Total operating expenses were $80.9 million in the third quarter, a decrease of 21% compared to operating expenses of $102.9 million in the same period in 2021. Research and development expenses in the third quarter were $47.5 million compared to $66.4 million for the same period in 2021. Selling, general, and administrative expenses for the third quarter were $30 million, compared to $35.5 million for the same period in 2021. Cash, cash equivalents, and marketable securities as of September 30th was approximately $372 million, sufficient to fund our operations into 2025. With that, I'll now turn the call back over to Steve.
spk15: Thank you, Tucker. Today's updates demonstrate the breadth of progress we've made across our pipeline this year, from expanding our geographic reach with Kinloch to providing exciting new clinical updates for both the Vinsultinib and DCC3116 programs at the ESMO Congress in September, and most recently, treating the first patient in the combination dose escalation portion of the DCC3116 Phase I study and declaring a development candidate from our PANRAF program. We look forward to a strong finish to the year and setting the stage for an exciting year ahead in 2023. With that, operator, I'd now like to open the call for Q&A.
spk05: If you'd like to ask a question, please press star 11.
spk04: Our first question comes from Daniel Wall with JPMorgan.
spk05: Your line is open.
spk01: Good morning, guys. Thanks for taking my question. A couple of questions. First, understanding that you cannot actively market for second-line setting based on addition of Kinloch to NCEN guideline, if that were to happen, how should we think about the opportunity that can open up? And do you believe that that will depend on the category of recommendation? Second, on 3116, would you walk us through your thoughts on how you chose the 50 milligram BID dose as the go-forward dose? And can you also remind us of the profile, the AE profile at that dose? And then for vimseltinib, granted that overall response is the primary endpoint in motion, how should we think about the median duration of treatment and what it means for the overall opportunity? Thank you.
spk15: Hi, Daniel. Good morning. Thanks for your questions. Let me try and take those in turn, and I'll ask Dan more. and Matt Sherman also to comment on a couple of things and add any additional color. So your first question was with respect to the potential for a listing in the NCCN guidelines for Repretinib for use in the second line setting, which would be an off-label use. So just a couple of comments with respect to that. First, we have not seen any updates to the NCCN guidelines as of this morning. So, as we shared previously, the data from the INTRIG study, which was our randomized Phase III study in the second line versus SUTEN, was submitted to the NCCN earlier this year, but we have not yet seen any modification to the treatment guidelines, and we don't believe that the panel yet has reviewed the application, at least not as it's been reflected in any update to the guidelines. So, as you know, there's some lag between the time of the meeting and the time when guidelines can be updated. So in order for a physician to use the drug in the second line setting, assume that this off-label use is listed in the guidelines. Of course, the physician needs to be made aware of the data. That use needs to be reimbursed by the payer, and then the physician would be in a position to be able to administer the product. Now, it's important to note that given that this is an off-label use of the drug or would be an off-label use of the drug, it's not a use that we can promote to and would promote to. So that's outside of label, and our promotion is limited to what it So I think it's too soon to tell first what update to the guidelines might occur or when that might occur, and then what the subsequent impact in terms of actual use and practice in the market might be. So next on your question with respect to 3116, I'll turn that over to Matt to address the selection of the 50 milligram BID dose as the initial dose for the combination dose escalation.
spk02: Yeah, thanks, Steven. Good morning, Daniel. Yes, so as we ended today, we're very pleased with completing the enrollment in the monotherapy dose escalation part of the 3116 study. And, of course, the three-dose cohort that we tested from 50 milligrams up to 300 milligrams did not reach a maximum tolerated dose. We also did not see any dose-limiting toxicities there. We felt that all dose levels were well-tolerated in patients, and particularly at the 50-milligram dose level, most of the adverse events were grades 1 or 2. There were no grade 3 adverse events. Also, we were able to demonstrate that at the lowest dose level, we were able to have good target engagement with inhibition of the phosphorylation of ATG14. It was one of the immediate downstream markers of both kinase inhibition. So taking all the data together, selected a 50 mg BID dose level to initiate the combination dose escalation cohorts.
spk15: And as you know, Daniel, so we announced this morning that the first patient in the combination dose escalation has been treated. So we're really pleased with the rapid progress that we're making and moving into the combination dose escalation part of the study. So then the next question, I believe, Daniel, related to vanseltinib and response rate as being the primary endpoint in that study. And I think your other embedded question was just around duration of treatment that we've seen so far as reported at ESMO and how we think about that relative to the potential opportunity in the market. And what I'd ask is perhaps, Dan, would you like to comment on that component of Daniel's question?
spk14: Yes, absolutely, Daniel. Good morning. Thank you for the question. So we think that duration is going to be a very important aspect of ultimately the benefit that patients receive from drugs in this space, as well as ultimately the commercial opportunity. And we're really encouraged with what we've seen so far. We think it's really all very consistent. And by that, I mean when we look in the claims data of patients who were treated with TGCT today, we see a meaningful difference in the duration of therapy between the drug that is used predominantly, albeit off-label, which is imatinib. We see an average duration of therapy of around 18 months. And when we look in the same data set at pexidartanib, we see a much lower duration of therapy, somewhere around eight months. And we think that may be tied to the well-known safety concerns associated with the pexidartinib profile. So when we look to the imatinib duration of therapy as somewhat of a benchmark, so to speak, that 18 months, and then we think about the duration that we're seeing maturing in our clinical study, clinical studies, excuse me, the most mature being the earliest data set in the phase one escalation cohort, we see a 17.5-month median treatment duration thus far. And so we see this all sort of maturing in a way that looks really favorable, good for patients, and ultimately we think good for the market opportunity.
spk01: Got it. Thank you very much, and congratulations on the progress. Thanks, Dan.
spk05: Our next question comes from Christopher Raymond with Piper Sandler. Your line is open.
spk06: Good morning. This is Nicole Gabreski on for Chris. Thanks for taking our questions. I guess maybe just two from us. Just on your phase 1b combo dose escalation cohorts for 3116, can you just talk a little bit about maybe what signal you need to see in each cohort to deem it successful if you move forward in development? And then just around your newly nominated pan-RAF inhibitor, I guess this is becoming a crowded space, so I guess I'm just wondering maybe if you could provide a little more color around the properties that you kind of alluded to differentiating 3084 from other pan-RAF inhibitors in development.
spk15: Thanks, Nicole. Thanks for the two questions. So I'll ask Matt to take your first question with respect to the Phase 1B part of the 3116 study and selection of dose and what we're expecting to see, what we would hope to see in the combination dose escalation part of the study. And then I'd be happy to take the PANRAF question that you tabled as well.
spk02: Hi, Nicole. So, yeah, thanks for the question. So, you know, as we talked about, we're initiating the combination dose escalation cohorts with 3116 in combination with the three partner drugs that we've initially selected, the two MEK inhibitors, trimetinib and bidimetinib, and the KRAS G12C inhibitors for the RASCID. And so we'll be moving, as we also announced, we're going to enroll the first patient into those combinations, those explosion cohorts. I'm very excited about enrolling the eight cohorts and escalating to a safe dose and combination. Once we have the data from the combination cohorts, we'll move into tumor-specific expansion cohorts, and those will be defined both by mutation status and specific tumor indications. At that time, we'll be able to talk more about the signals that we'll be looking for to show proof of activity in those tumor-specific mutation-driven tumors.
spk15: And then, Nicole, with respect to your question on the PANRAF inhibitor, we're certainly really excited to have nominated our development candidate from our PANRAF program, and the number as we noted for that is DCC3084, so this is reflective, we believe, of how productive our research engine is, so we're excited to bring this next product forward. You're right, the landscape among pan-RAF inhibitors, there are a number of pan-RAF inhibitors that are in development. We're excited about the preclinical data that we've generated so far. We intend to publish that at a medical meeting early next year as we flesh out further and share further what the profile is of 3084 and how we view it as potentially being best in class. I think as Matt mentioned during his prepared remarks, we think another element of differentiation could well be the favorable pharmaceutical properties that we see with 3084. And again, we'll have more that we can talk about as we share the preclinical data at a medical meeting next year.
spk04: Great. Thanks for taking the questions. Our next question comes from Eun Yang with Jefferies.
spk12: Your line is open. Thank you. A question on vimCeltinib and Kinloch. So vimCeltinib, I think historically, previously you've set that enrollment update by end of this year. So we are expecting more definite kind of update as it, you know, in terms of enrollment completion rather than continuing enrollment. So can you give us a little bit more color there? And second question is on Kinloch. on NCCN guidelines update for second line GIST. Historically, when you look at the oncology products, when the product label, the NCCN guideline update is including off-label use, have you seen in general uptake in sales? If so, what kind of, what percentage of sales uptake should we expect? Thank you.
spk15: Good morning, Ian. Thanks for the two great questions. So let me take the Venceltinib-related question, and then I'll ask Dan Martin to comment on your NCCN guideline-related question. So first for Venceltinib, we remain really pleased with the pace of enrollment in the motion study. As you'll recall, this is a 120-patient study that we're enrolling in patients with tenosynovial giant cell tumor. It's a placebo-controlled study. We previously shared that we were able to enroll about 40 patients over six months in the Phase 1-2 study. Some of that data, of course, we presented at the ESMO conference back in September. And that patient enrollment was once we had gotten to site activations for the study. So as we reflect on where we are so far year-to-date with the motion study, we continue to be very pleased. As we've said and as you alluded to, we'll provide a more fulsome update in the coming couple of months as we're able to better project when we might get to last patient in the study. But we've been gratified to see the number of patients that are in the community who are seeking a systemic treatment option, and we think that's reflective of the significant unmet medical need today in the U.S., where there's only one approved product, pexidartinib, And then, of course, outside of the U.S. and in Europe in particular, there are no approved products for systemic treatment for this disease. So we're pleased to see these patients finding their ways to our sites that we've activated for the study. And enrollment continues at a rapid pace, which we're really pleased with.
spk14: And I'll go ahead and jump in. This is Dan Yoon. Thanks for the question on the guidelines. So a couple thoughts. First, as we've laid out previously, after the two ASCO presentations last year on the entry data, one at the virtual plenary and then at the ASCO meeting itself, we have gotten a lot of feedback from KOLs regarding the fact that they interpret this data as showing clear activity for the product in the second line, you know, comparable efficacy and really better overall safety profile than SUTEN. And they told us that, you know, they find this data really interesting and supportive of the overall Kinn-Mott clinical profile and something that, you know, ideally might be considered for use in the second-line setting. The challenge with this, of course, is that although we submit the data to the NCCN, as all companies do, number one, we have no way to know whether or not It may make its way into the guidelines and we'll just have to see how the committee chooses to include it or not. And then importantly, we've underscored this really consistently and I'll just do it again here. This is something that would be off label and therefore we can't and won't promote it. So Steve has mentioned that there are a number of important steps. to sort of what impact this could have in the marketplace. You know, physicians have to be aware of the data, aware of the update to the guidelines, and there's a desire to use and payer dynamics, and so we won't be promoting or driving any of that, and so we'll just have to see, number one, if there is a guideline update, and then number two, you know, how it plays out in the marketplace if there is. Your question about other products In the oncology space and what kind of impact off-label listings had, it's really hard to make a direct comparison because so many different treatment areas are so different. It has a lot to do with how the guidelines are updated. It has to do with what other alternatives may exist in those therapeutic areas. So it's really tough to say that... You know, this XYZ is how it typically plays out and what we would expect here. So, you know, we are keeping an eye on it. And like you, we're eager to see what, if any, updates may be forthcoming.
spk12: Thank you.
spk04: Our next question comes from Michael Schmidt with Guggenheim Partners.
spk05: Your line is open.
spk03: Hey, good morning. This is Paul on for Michael. Thanks for taking our question. So I guess first, following up on your ASMO data update for vinceltinib, just wanted to get some more color on the CBK increases that you observed in the study and perhaps how they compare with, you know, what's been observed with other CSF1R inhibitors or MADs. Do you see sort of any risk perhaps to more significant muscle tissue damage depending on patient baseline characteristics? Just would be great to get your thoughts here. And then, secondly, on 3116, you know, you've sort of shown some preclinical data showing combinations with ozomertinib. I'm just wondering if you have any current plans to investigate EGFR immune patients and sort of where that segment plays into your strategy.
spk15: Sure. Thanks, Paul. Thanks for the two questions. I'll be happy to take the 3116 question first, and then I'll ask Matt to take your question related to benseltinib and CPK elevations. So the way we think about our oak inhibitor 3116, which as you know is first in class, first into the clinic, which we believe is really exciting and gives us a key advantage as we explore a variety of different combination partners. As we've presented at medical meetings, gosh, over the course of the last two years, we see very broad activity of inhibiting autophagy preclinically when combined with either MAP kinase pathway inhibitors or receptor tyrosine kinase inhibitors like osimertinib. So there's a whole host, a whole range of possibilities for combination. And the task ahead for us is, as we're doing now with the Phase 1B study, is to begin to prosecute each of those. So as we go through the preclinical data and we prioritize what we're going to pursue, then bringing that forward into the clinic and exploring those combination partners clinically. to see what we see. So there'll be more to come from us in terms of additional future combination partners with the program. And while I can't comment specifically on osomertinib, I think that's a great example, osomertinib is, of a receptor tyrosine kinase inhibitor where we see preclinically very strong effect when used in combination with 3116. So that just suggests to us the potential very broad applicability of this approach to targeting the autophagy escape mechanism in cancer generally. Matt, do you want to take the benceltin and CPK question?
spk02: Thanks, Steve, and thanks, Paul, for the question. So as we know before, the elevations of CPK that we've seen in patients treated with benceltin is due to inhibition of clearance of the protein or enzyme from the blood. So as we know, the resident macrophages within the liver are called Kupfer cells, and they are responsible for clearing normally circulating proteins and enzymes from the blood. And in the context of inhibiting those resident macrophages, with the CSF1 receptor inhibitor such as Benzultamate, then there's slower clearance of those enzymes or proteins from the blood leading to asymptomatic, just laboratory elevations of those protein levels such as CPK. And this has been noted as a class effect across all the different small molecules and even the biologics directly with the CSF1 receptor. So, you know, felt very comfortable with the safety profile that we've seen to date in the Benzultamate Case 1-2 program, and certainly as we talked about this morning, you know, very pleased with the progress we're making with enrollment in Phase 3 motion study.
spk03: Great. Thank you.
spk05: Our next question comes from Tyler Van Buren with Cohen. Your line is open.
spk07: Good morning. It's Brittany Woods on for Tyler. Thank you for taking our questions and congrats on all the execution this quarter. On the Phase III motion trial, can you provide any additional color on how site activation is proceeding and also potentially on the balance of U.S. and ex-U.S. sites? Also, on the potential of an NCCN recommendation for second-line Kinloch use, would that affect your commercial strategy at all moving into 2023? Thank you.
spk15: Thanks for the questions, Brittany. Good morning. So, I'll be happy to take the first question with respect to the motion study, and then I'll I'll turn it over to Dan just to comment on the NCCN second-line study. So first, with respect to the motion study, as we noted earlier today in our prepared remarks and also in the release, we're really pleased with the pace of enrollment for motion and how that's progressing. As I said a little while ago, I think it's reflective of the strength of the data that we've presented so far from the Phase I-II, and I think it's reflective of the unmet need in a variety of different geographies. in terms of absence of good systemic therapies being available to treat these patients. So while we haven't commented specifically on the exact number of sites that are open, certainly on clintrials.gov, it's listed and there are 32 sites that are now open for the motion study. We're pleased with the number of patients that we've seen enrolling from those sites. We have a number of sites in the U.S., a number of sites in Europe as well, and we have seen patients from both of those geographies enrolled on study. So we're pleased with the progress we're making, and we're looking forward to providing a more fulsome update, as I was saying, in response to Yoon's question, once we have some line of sight to last patient in the study and when that might occur. Dan, do you want to comment on the NCCN question?
spk14: Sure, absolutely. And so just to confirm, I want to make sure I heard the question correctly. The question was, would a listing change our commercial strategy in 2023? Yes. Yes, okay. Great, thank you for the question. So the short answer is no. The point that we try to underscore each time is that it's really important to note that this would be an off-label use, even if listed in the NCCN guidelines. And so from a commercial point of view, we have to always make sure we are really careful about our promotion and we stay on label. So we can't and won't promote any off-label listing in the guidelines. Our commercial strategy in 2023 would continue to be focused on optimizing the opportunity within the fourth-line setting and continuing to execute as we have. driving really high awareness, really high shared voice in the space, maintaining a really high attribute rating for the product amongst just treaters, continuing to make sure that Kinloch is viewed as a standard of care in the fourth line as it is today, and making sure that we work to find every possible on-label patient that we can. And that will continue to be our focus as it relates to Kinloch in the U.S.
spk04: Our next question comes from Peter Lawson with Barclays.
spk05: Your line is open.
spk10: Steve, thanks for taking my questions. I joined late, but just on the, so I apologize if this came up, just on the EU revenue growth, so quarter over quarter, that's flat. I wonder if you can kind of talk through any of the underlying dynamics and kind of how it looks for 4Q. Thank you.
spk15: Yeah, good morning, Peter. I'll start off and then ask Margarita also to comment on the trend of the quarter versus what we've seen earlier this year. But first, just as a reminder, so we received our European approval at the very end of last year. And as you'll recall, the first market that we were able to launch in commercially was Germany. And so that's where our launch has been underway principally so far this year. We've also been able to provide Kinloch to patients to sell Kinloch for patients in France under a post-approval paid access program. So that has also contributed to our European revenue. And then looking forward, as we noted in the prepared remarks today, we've now submitted for reimbursement in Italy. We've undertaken the same process in Spain. We also previously noted that we had submitted to NICE for England and Wales. So we're continuing to make progress across other territories in Europe where we have to go through a pricing and reimbursement process. And it's likely that those processes will conclude in the coming year. So this, as you know, can take quite some time, particularly in southern European markets, to get to market access, to get to a pricing and reimbursement approval. So as we look over the medium term, We're certainly really excited about the opportunity to get Kenlock to these patients in the five largest markets across Europe, which represent about the same size of the population of the United States. So epidemiology, we expect to be the same, so same number of just patients in that territory. And once we're able to get to market access, we would then be able to unlock that opportunity for the company and also for patients to get access to Kenlock. Margarita, do you want to comment on some of the specifics in terms of what we saw in the quarter?
spk11: Sure. Thanks, Steve. So let me start by saying that it is very gratifying to see how well Kinloch is being received in Europe, namely in Germany, which is the only country we have launched so far, and where we continue our growth trajectory. Specifically on Q3 performance, so net revenue in Europe was higher in Q3 despite the summer period and also despite the FX headwinds, which aggravated in Q3. However, let me say that the revenue in the distributor markets outside of Europe was lower when compared to Q2, so impacting the overall number for Q3.
spk10: Thank you. And then just digging into that, for Germany, do you think you've topped out on Germany? Or has there been kind of weakness in France? Just curious on what the underlying dynamics there for the kind of flat quarter over quarters.
spk11: Sure, thank you for the question. So we continue in launch mode in Germany, if we can say like that, and growing both in terms of patients and the treatment with Kinloch and in the number of prescribers. I should also add that the dynamics in terms of data access in GST in Europe are not great, but I can tell you that the strong results so far speak to the exceptional clinical benefit of Kinloch in the fourth-line setting. the high unmet medical need and the hard work of the team in successfully executing our launch strategy. It is also important to note that we continue advancing with our price negotiations in Germany. And naturally, the final price that we will be able to achieve will impact our net revenue in the future.
spk10: Thank you so much.
spk11: You're welcome.
spk05: Our last question comes from Brad Canino with Stiefel. Your line is open.
spk08: Good morning. One question on Kinloch and one on Zinseltinib. Looks like two price increases this year for Kinloch. Can you comment on how much has been captured into net price and then just the mix of price and volume growth that's attributed to the quarter-over-quarter U.S. growth for 2022? And then I'd like to ask anything comments you can provide on European regulatory interactions for vimseltinib. You know, I do think you've shown that your drug is differentiated on the safety profile. We've heard really strong USKOL feedback, but the EMA's CHMP did reject Teralio both for safety and efficacy, you know, quoting that the tumor shrinkage didn't establish the activity for clinical benefit. So just any comments there about the opportunity in the EU would be great. Thank you.
spk15: Greg, good morning, Brad. Thanks for the question. So I'll ask Dan to take the Kenlock-related question first.
spk14: Yeah, so I'll cover this briefly. Thanks for the question. So we have taken two price increases this year, one February 1st of 4.85% and one July 1st of 3.15%. So the Overall impact there is approximately 8% on a gross perspective. We haven't ever spoken exactly to what our gross to net numbers are each quarter, but we've always said that we have experienced it and continue to experience it being the 15% range on average. So you can use that as a metric there to get to the net. And then from a year-over-year, the 23% that we quoted, about half of that can be attributed to volume growth, and about half of that can be attributed to favorable changes in the net price and the PAP percentage year over year.
spk15: Great. Thanks, Jan. And Brad, to your question specifically with respect to Vimseltinib and how we think about the profile of the drug and how we think about the European opportunity, let me just comment on that. I mean, our definition, the way we're viewing the profile of the drug and how we think regulators will view it, is really in three categories. So certainly about efficacy, the ability of VimCeltinib to shrink tumors in patients. We believe we very clearly demonstrated that we have a potent and selective inhibitor that's highly efficacious based on the data that we showed at ESMO. The second is around tolerability. As you noted, that's incredibly important in this patient population, and we believe that we've demonstrated, again, also at ESMO, that VimCeltinib is well-tolerated. And the third category is a different measure of efficacy, and that's patient-reported outcomes. And so as you will recall, at ESMO we reported for the first time some of the PRO data from the study, from the Phase I-II experience, where we see a meaningful impact on measures related to patient-reported outcomes. And we think that's going to be very relevant to European regulators. We think that will be relevant certainly to patients and also to prescribers for the product. So our focus is on making sure that we have a profile based on the motion study, which we're now conducting, that will allow us to provide the evidence that's going to be required to be successful in the U.S. market, also in Europe and in other territories around the world. And while we don't comment specifically on regulatory interactions, I can say that we're pleased with the feedback that we've received on the regulatory front for the Vimselton program, and that all was taken into consideration as we designed the motion study and launched that study.
spk04: There are no further questions.
spk05: I'd like to turn the call back over to Steve Herter for closing remarks.
spk15: Great. Thank you, Michelle. I just want to thank all of you for joining us on today's call, and thanks for your continued support of the work that we're doing here at the CIFRA. We look forward to the work that continued progress this year. And I hope you have a great rest of your day.
spk05: This concludes the program. You may now disconnect.
Disclaimer