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spk05: Good afternoon. My name is Melinda, and I'll be your conference operator today. At this time, all participants are in a listen-only mode. After the speaker's formal remarks, there'll be a question and answer session. If you'd like to ask a question during that time, simply press the star key, then the number 1 on your telephone keypad. If you'd like to withdraw your questions, please press star 2. If you should require operator assistance during the conference, please press star 0. As a reminder, this call is being recorded. I would now like to turn the conference call over to Marianne Ohannesson, Senior Director of IR for PUMA Biotechnology. You may begin your conference.
spk04: Thank you, Melinda. Good afternoon and welcome to PUMA's conference call to discuss our financial results for the third quarter of 2021. Joining me on the call today are Ellen Auerbach, Chief Executive Officer, President and Chairman of the Board of PUMA Biotechnology, Maximo Núñez, Chief Financial Officer, and Jeff Ludwood, Chief Commercial Officer. After market closed today, PUMA issued a news release detailing third quarter 2021 financial results. That news release, the slides that Jeff will refer to, and a webcast of this call are accessible via the homepage and investor sections of our website at PumaBiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today's conference call will include statements about the company's future expectations, plans, and prospects that constitute forward-looking statements for purposes of federal securities laws. Such statements are subject to risks and uncertainties and actual events and results may differ from those expressed in these forward-looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports filed with the Securities and Exchange Commission from time to time, including our annual report on Form 10-K for the year ended December 31, 2020. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call. November 4th, 2021. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today's call, we may also refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for, our GAAP financial measures. Please refer to our third quarter 2021 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.
spk02: Thank you, Mary Ann, and thank you all for joining our call today. Today, PUMA reported total revenue for the third quarter of 2021 of $46.2 million. Total revenue includes product revenue net, which consists entirely of U.S. near-link sales, as well as license fees and royalties from our sub-licensees. Product revenue net was $43.4 million in the third quarter of 2021, representing declines from the $48.9 million in product revenue net reported in the second quarter of 2021 and $49.3 million in product revenue reported in Q3 of 2020. Product revenue for the quarter was negatively impacted by approximately $3.5 billion due to inventory reduction at our specialty pharmacies and specialty distributors. Royalty revenue was $2.8 million in the third quarter of 2021 versus $4.3 million in Q2 of 2021 and $1.5 million in Q3 of 2020. During the third quarter of 2021, we continued to experience challenges brought on as a result of the COVID-19 pandemic and the Delta variant. As Jeff will show in his presentation, we reported 2,947 bottles of Nearlinks sold in the third quarter versus the 3,354 bottles sold in Q2 of 2021. Bottles sold in the quarter were negatively impacted by the inventory reduction at our specialty pharmacies and specialty distributors mentioned earlier. Jeff will provide further details in his comments and slides. Due to the access limitations presented by COVID-19, call activity to physicians declined approximately 10.5% in Q3 compared to Q2. New prescriptions were up 2.9% in Q3 compared to Q2, while total prescriptions were down 3.1%. Bottles sold through our specialty distributor network, which we also refer to as our in-office network, were down 11.9% in Q3 compared to Q2. I will now provide a clinical review of the quarter, and then Jeff Ludwig will add additional color on the near-length commercial activities. Maximo Noguez will follow with highlights of the key components of our financial statements for the third quarter of 2021. As we have mentioned on our prior calls, PUMA has an ongoing basket trial of neuratinib and HER2-mutated cancers, referred to as the SUMMIT trial. In the fourth quarter of 2019, Puma met with the FDA to discuss the regulatory path for neratinib in patients with hormone receptor positive HER2 negative breast cancer who have a HER2 mutation. The purpose of the meeting in 2019 was to discuss the potential defile for accelerated approval on the data from the summit trial on the patients treated with a combination of neratinib plus fulvestrin plus trastuzumab. At that meeting, the FDA suggested that PUMA modify the summit trial in order to better isolate the contribution of neratinib to the efficacy seen in the summit trial for the patients treated with a combination of neratinib plus fulvestrin plus trastuzumab. In early 2020, the summit trial was amended such that ER-positive HER2-negative breast cancer patients who have a HER2 mutation were randomized to receive either fulvestrin alone, fulvestrin plus trastuzumab, or the combination of neratinib plus fulvestrin plus trastuzumab. The randomized portion of the trial was designed using assignments two-stage designed. Each arm of the study initially enrolled seven patients during stage one. If no patient in the given arm responds, that arm will be closed to further enrollment. If in the first stage one or more patients respond, the arm will then be expanded up to 18 patients. If less than four patients in the expanded arm respond, that arm will be closed to further enrollment. If four or more patients respond, the arm will be open to enroll additional patients. As was discussed on the second quarter earnings conference call, for the first seven patients who were treated in the fulvestrant alone arm of the trial, no patients received a response. In the seven patients who were treated in the fulvestrant plus trastuzumab arm of the trial, no patients achieved a response. Enrollment to the fulvestrant alone and fulvestrant plus trastuzumab arms of the trial were therefore paused. During the third quarter, PUMA convened the study's Independent Data Monitoring Committee, or IDMC, to review the data from both the singlet and the doublet cohorts. The IDMC recommended closing both the singlet and the doublet cohorts. In the first seven patients who were treated in the neratinib plus polvestrin plus trastuzumab arm of the trial, one or more responses were seen, and therefore the criteria was met to expand to stage two of the Simon two-stage design. This arm of the trial has been expanded to further enrollment. Currently, patients with ER-positive HER2-negative breast cancer who have a HER2 mutation are only being rolled into this triplet arm in SUMMIT, which treats patients with neratinib plus fulvestrin plus trastuzumab. We anticipate that additional data on this will be presented at the San Antonio Breast Cancer Symposium in the fourth quarter of 2021. PUMA believes that the data from the randomized portion of the trial has addressed the FDA's request to isolate the contribution of neratinib to the efficacy seen in the summit trial in the patients treated with the combination of neratinib plus filvestrin plus trastuzumab. PUMA has therefore scheduled a meeting with the FDA this quarter to discuss the data from the randomized portion of the trial and to discuss the potential pathway to follow for accelerated approval for the combination of enratinib plus rovestrin plus trastuzumab on the data in patients with ER-positive HER2-negative breast cancer who have a HER2 mutation and have been treated in the summit trial. At the FDA meeting in 2019, the FDA agreed that patients treated with the triplet of Neuratinib plus Provestrit plus Stratuzumab, who were enrolled both prior to the amendment in 2020 as well as those enrolled after the amendment, would be eligible for inclusion in the efficacy database used to support approval. CUMA will continue to update investors on the status of this as it progresses. As investors are also aware, last November, we announced interim data from another cohort and summit, and more specifically, the cohort with metastatic non-small-cell lung cancer with epidermal growth factor, or EGFR, exon 18 mutations who've been previously treated with an EGFR tyrosine kinase inhibitor. We are continuing to enroll this cohort of patients and anticipate we will have additional data from this cohort to report in the first half of 2022. I will now turn the call over to Jeff Ludwig, PUMA's Chief Commercial Officer, for a review of our commercial performance during the quarter.
spk03: Thanks, Alan. Appreciate it. And thanks to everyone for joining our third quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. In our second quarter earnings call, we announced a quarter-over-quarter increase in net sales and ex-factory bottles. Our goal was and still is to deliver consistent quarter-over-quarter growth, which we were not able to achieve in Q3. Our ability to deliver consistent growth was largely based on two key assumptions. Number one, the positive evolving clinical profile of Neuralynx, and two, an improvement in call activity and access driven by an increase in vaccinations and the loosening of customer restrictions. As I reflect upon our Q3 performance, I continue to feel very strongly about the evolving clinical data and its ability to shape and change the risk-benefit perceptions of Neuralynx in this underpenetrated market. The assumption that has caused us the biggest challenge is customer access and overall declining HCP call activity. As Alan mentioned earlier, we saw about a 10% reduction in overall HCP calls in Q3 versus Q2. Now, HCP access and engagement is critical when you're trying to reposition a brand and share new, evolving clinical data. Given the importance of this leading indicator, let me provide some additional insights. As I compare our pre-COVID HCP engagement with our current activity, we are still down overall about 40%. We do expect that access caused by COVID restrictions will improve in the future, but given the uncertainty of the pandemic, we are focused on increasing HCP activity through both personal and non-personal promotion. With that high-level update, let me transition to some of the U.S. commercial slides, and I will provide some additional insights along the way. Once I have finished my remarks, I will turn the call over to Maximum, who will review the full financial results. Looking at slide three, as you may recall, we have two channels that provide Neuralinks to patients. We refer to these as our specialty pharmacy channel and our specialty distributor channel or in-office dispensing channel. The majority of our business flows through the specialty pharmacy channel. More specifically, in Q3, approximately 77% of our business went through this channel, with the remaining 23% of the business flowing through the specialty distributor channel. This is in line with what we reported in the Q2 earnings call as well. Moving to slide four, slide four shows U.S. quarterly net sales of Merlinx since FDA approval. As Alan noted, our net U.S. product sales were $43.4 million in the third quarter of 2021. This is a decrease from the $48.9 million we reported in Q2 of 2021. Look, we clearly do not want to see a decline in quarterly net sales, but I do want to provide a little more insight into this decline. Approximately $3.5 billion or 60% of this decline was due to a reduction in distributor inventory. Moving to slide five. Slide five shows the bottles of Neuralink sold by quarter since launch. Please note that this slide shows ex-factory bottles sold, so it represents sales into our specialty pharmacy and specialty distribution channel and not end user demand. We sold 2,947 bottles of Neuralink in Q3 of 2021, which is a decrease of 407 bottles from our Q2 2021 bottle sales of 3,354. Again, approximately 60% of this decline was from a reduction in distributor inventory. As we look at our overall business, we pay very close attention to our leading indicators. We already talked about HCP call activity, but another key leading indicator is NRX, or new patient starts. These new patients turn into continuing patients and tend to benefit the subsequent quarter in terms of overall results. Looking back a few quarters, we saw an increase in new patient starts in Q1, which helped drive positive growth in Q2. We unfortunately did not sustain that same level of new patient starts in Q2, which impacted the Q3 results, which we are discussing now. In focusing specifically on Q3, we did see an increase in new prescriptions of about 3% in Q3, and the commercial team is focused on improving that trend moving forward. As previously reported, we were excited to have dose escalation added to our label in late June for both our extended adjuvant indication as well as our metastatic indication. As you can see, we saw a significant increase in the adoption of dose escalation in the third quarter, where approximately 57% of patients were started on Neuralynx at a lower dose. This is a large increase from the 38.7% of patients we reported in Q2, which we believe is a result of the updated label. We are pleased with the increasing adoption of dose escalation and believe that this increased adoption will improve the overall tolerability of Neuralynx, increase the average length of therapy, and ultimately allow more patients to receive the full benefit of Neuralynx. This remains a key commercial priority, and we are working to ensure dose escalation is highlighted on pathways, formularies, and dosing compendia. Slide 7 highlights the strategic collaborations we have formed across the globe with the goal of making Neuralinks available to more patients around the world. We continue to be pleased with our global partners and the progress being made. In terms of updates, we recently received regulatory approval in South Korea in the extended adjuvant setting, metastatic regulatory approval in Taiwan, and are happy to report that Neuralinks was launched in Peru. In addition, we are watching Mexico and Brazil closely as we are expecting regulatory decisions in the very near future. We are continuing to work very closely with our partners and look forward to future potential launches in additional countries in Europe, Latin America, Asia, and the Middle East. Before I turn the call over to Maximo, I wanted to provide some additional updates that are important to our future success. I mentioned earlier that I am happy with the evolving clinical profile of Neuralynx. We have presented or published some important clinical updates over the last year that I have discussed on prior earnings calls. I'm excited to say that we will also have a nice presence at this year's San Antonio Breast Cancer Symposium where we have nine abstracts that have been accepted. Continuing to present and highlight the evolving clinical profile of Neuralinks is a cornerstone of our strategy. We believe that these clinical updates, coupled with the increasing adoption of dose escalation, will collectively help us strengthen the risk-benefit profile of Neuralinks and allow us to appropriately expand utilization. Lastly, I want to let you know about some important commercial organizational changes that we are implementing. It is clear that the oncology market continues to evolve and that COVID has likely caused additional access restrictions, both from an acute and a chronic perspective. Given our inability to drive consistent growth, it does not make sense to maintain the same size and structure. I have taken actions to streamline our commercial organization, not only to better align our financial resources, but as importantly, to simplify reporting structures, reduce layers of management, and improve ownership and execution at the customer level. We have reduced the number of sales representatives and consequently adjusted the size of our territories to ensure appropriate coverage and to better account for the new hybrid environment, which consists of both live and virtual interactions. We have revised our targeting to help our teams better focus their efforts where we'll have the greatest potential impact on patients. And we're building out a core strategic accounts team to better align with our largest customers. Collectively with these changes, I expect to be able to reduce the overall commercial footprint by approximately 40%. These changes will cause some disruption within the organization, but we have worked to appropriately manage vacancies over the last few months to reduce the impact on individuals. These changes are being put in place as we speak, and I look forward to updating you all on future calls as to the impact we are seeing. PUMA was founded on a commitment to making a difference in the lives of patients and their families battling breast cancer. I want to thank the commercial team for their passion and commitment to making a difference. We know more must be done, and we will not stop until we have achieved our goals. I will now turn the call over to Maximo for a review of our financial results.
spk09: Thanks, Jeff. I will begin with a brief summary of our financial results for the third quarter of 2021. Please note that I will make comparisons to Q2 2021 which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our thank you, which will be filed today and includes our consolidated financial statements. For the third quarter of 2021, we reported a net loss based on GAAP of $44.7 million, or $1.09 per share. In Q2 2021, we reported a net loss of $5.1 million. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation, we reported a net loss of $40.4 million, or $0.99 per share, for the third quarter of 2021. Gross revenue from Network Sales was $53.8 million in Q3 2021 versus $59.3 million in Q2 2021. As Alan mentioned, net product revenue from Nalixels was $43.4 million compared to the $48.9 million we reported in the second quarter of 2021. Royalty revenue totaled $2.8 million in the third quarter of 2021 versus $4.3 million in Q2 2021. Our gross net adjustment in Q3 2021 was about 19.4%. an increase from the 17.7% gross net adjustment in Q2 2021. The increase was driven primarily by higher Medicaid rebates. Cost of sales for the Q3 2021 was $10.3 million, including $2 million for the amortization of intangible assets related to our net atomic license. Cost of sales for Q2 2021 was $12 million, Going forward, we will continue to recognize amortization of milestones to the licensed source for about $2 million per quarter as cost of sales. For fiscal year 2021, PUMA anticipates that the net profit revenue will be in the range of $180 to $182 million, lower than our prior guidance. The reduction to the guidance reflects our expectations for a slower than anticipated improvement in access to HCPs. We also anticipate that our gross to net adjustment in 2021 will be between 19% and 20%. Furthermore, for fiscal year 2021, we anticipate receiving royalties from our partners around the world in the range of 13 to 14 million, and license revenue in the range of 50 to 52 million. We recognize there is a great deal of uncertainty regarding the impact of COVID-19 and this may continue to negatively impact our sales, royalties, and license revenue. We anticipate that Q4 2021 narrowing net sales will be in the range of $42 million to $44 million, and royalty revenues will be in the range of $3.5 to $4.5 million. Historically, in Q4, we have seen a decrease in new patient starts as patients choose to delay starting narrow links until after the holidays. So we are incorporating this assumption into our Q4 net sales guidance. We anticipate that the gross to net adjustment in Q4 2021 will be approximately 19.5 percent to 20.5 percent. SG&E expenses were $26.1 million in the third quarter of 2021, compared to $39.4 million for Q2 2021, respectively. SG&A expenses included non-cash charges for stock-based compensation of $3 million for the third quarter of 2021, compared to $16.7 million for Q2 2021. Stock-based compensation expenses in Q2 2021 included approximately $13.6 million, resulting from a modification approved by stockholder to the term of an employee warrant. Research and development expenses were 18.8 million in the third quarter of 2021 compared to 18.6 million for Q2 2021. R&D expenses included in non-cash charges for stock-based compensation of 1.3 million in the third quarter compared to 1.5 million for Q2 2021. Other expenses include an increase for our legal accrual of 24.5 million Mostly to reflect, the settlement in principle arrived for the class action lawsuit in October for a total of approximately $54.2 million and an $8.4 million charge related to our debt refinancing in July 2021. In the third quarter of 2021, PUMA reported cash burn of around $21.4 million compared to cash burn of $0.1 million in Q2. If we exclude one-time cash flow events that impacted Q3 2021, we would have seen positive cash flow of 0.1 million. As a result of cost containment actions across the company, such as the commercial restructuring that Jeff described, PUMA is expecting lower operating expenses in Q4 and ongoing for SG&A, as well as in research and development. We entered the third quarter of 2021 with $87.5 million in cash, cash equivalents, and market world securities. Our accounts receivables balance of September 30th was $23.8 million. Our accounts receivables terms range between 10 and 68 days. For our day sales outstanding are about 48 days. We estimate that as of September 30th, 2021, our distribution network maintained approximately three weeks of inventory. Overall, we continue to deploy our financial resources to focus on the advancement of Neratinib through ongoing clinical trials and the commercialization of NerLynx.
spk02: Thanks, Maximo. The COVID-19 pandemic has continued to present commercial challenges to PUMA. However, we are hopeful that with the vaccinations that have been occurring in 2021 and will continue to occur throughout the year, it will reduce these barriers in the future which should improve the ability of our commercial team to access and interact with health care providers to increase their awareness of the Nearlinks data. We also recognize the uncertainty as to when access to health care providers will improve, and we are remaining conservative in our outlook for improvement and access for the remainder of the year. Puma Senior Management, in cooperation with the Board of Directors, continues to remain focused on Nearlinks revenue and sales growth in 2021 and beyond. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer, and other solid tumors. We at PUMA are committed and passionate about finding more effective ways of helping these patients during their journey, and we will continue to strive to achieve that goal.
spk04: This concludes today's presentation. We will now turn the floor back to the operator for Q&A. Operator?
spk05: We will now begin the question and answer session. If you wish to ask a question, please press star then 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If you wish to withdraw your request, please press star 1. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question comes from Yigal Nachomovitz with Citi. Proceed with your question.
spk06: Hi. This is Carly on for Yigal. Thank you for taking our questions. We have two questions. First, we were just hoping you could elaborate further on the rationale for sort of the restructuring within the commercial organization and sort of how specifically the overall commercial strategy is shifting as a result of these changes. And then the second question is on 2022 and sort of as the pandemic eases, how you're thinking about the revenue trajectory heading into next year. Thanks so much.
spk02: Hi, Carly. Thanks for the questions. Jeff, would you like to handle those?
spk03: Sure. Let me talk through the restructuring of the organization, the commercial side. We've talked a lot about shared voice, and let me just talk about shared voice in a broader sense. Our shared voice has not been restricted because of the number of people we have in the field, but it's really been restricted because of the changes in access largely due to COVID-19. So in our previous structure, we essentially had excess capacity. And regardless of how hard we tried to change and adjust, we were just not able to efficiently use that capacity or those resources. Looking at a little more granular, we definitely see accounts that have restricted access to the industry. And in those cases, as you can guess, it typically does not make sense to deploy the resources the same way. It's an inefficient utilization of headcount. The continuing trend in oncology has been toward more restrictions versus less restriction. With that said, we do expect access restrictions caused by COVID to improve in the future, but the timing is uncertain. But ultimately, we're going to see some accounts continue to restrict access. Others are going to open back up to a more hybrid situation, virtual and live. As you can guess, you can be more efficient with resources there. And there will be some that open up fully, and that's the ones we like. Our new structure should allow us to increase call activity from our current levels, and we believe we can be more effective with better targeting and our evolving clinical data, and also with the reduced layers of management we think we can execute in a more efficient and effective manner. I will end, though, by looking at Alan across the table for me, that if we get to a position where we're not able to fully engage the customers the way we want from a capacity standpoint, I can make a very simple business case and we can adapt very, very quickly moving forward.
spk02: So, Carl, let me add a little bit to that. We're certainly recognizing the challenges for our reps to interact with health care providers and You know, as Jeff had said, if we compare kind of our HCP calls to where they were pre-COVID, you know, it's down about 40%. So if you want to kind of look at it as a, you know, quantitative aspect of a calls per rep, that number is down 40%. So what we're kind of doing here is putting our cost per rep back to where it was pre-COVID by just reducing the number of reps. Now, Jeff is absolutely right. If we see in 2022 that things are opening up and there is the need to add reps and go back to what we had previously, we're happy to do so. It's just we're recognizing the need to be fiscally responsible to the shareholders of the company. And if we see the need to grow, that's fine. It's just given the limited access, it just doesn't make sense to have that infrastructure right now.
spk03: Carly, one other comment here, which is we are building out a strategic accounts team and capability, which we previously really haven't had. And we think it's really important that we'll be able to better align with some of our largest, most important customers going forward. And clearly a large potential or a large part of the opportunity resides with those customers. So we see that as a better way of moving forward as well.
spk02: Do you want to handle the 2022?
spk03: Carly, can you repeat that question? I'm sorry, I missed the second part of that question.
spk06: Yeah, no, no problem. I was just asking about 2022 and just preliminary thoughts on sort of the revenue trajectory into next year.
spk03: So I don't know that we've publicly stated anything about 2022 revenue expectations, but obviously I'm hoping that we can leverage the new data that we have, the evolving clinical data. We're hoping that this new organizational structure will play out to be more efficient and effective, and obviously we're working very hard to increase our call activity and engagement with customers. The goal is to drive growth, and that's what we're continuing to try to do.
spk02: And, Carly, in terms of, you know, potential new opportunities for revenue, you know, obviously the mutations would be one in terms of, you know, increasing awareness in those. And the other is we have an ongoing trial, which is the TBCRC22, which is looking at barotinib in patients with brain mess in combination with capsila. You know, we're looking for that data to be, you know, presented sometime in the first half of 2022. My, you know, guess would be ASCO. And, you know, certainly due to the, you know, huge unmet medical need, it in HER2-positive breast cancer for patients with brain mets, and we're already in the NCCN guidelines for brain mets, there is the possibility you're going to see uptake of Neuralink there.
spk06: Got it. That's helpful. Thank you for taking the question.
spk05: Your next question comes from Mark Fram with Cowan. Please proceed with your question.
spk01: Hi. Thanks for taking my One clarification just on the headcount reductions on the Salesforce. I think you said the footprint would be down 40%. Is that just that headcount's down 40%? Should we also expect expenses to be 40%? Is there kind of a one-to-one relationship there? Or is there a little bit of a disconnect? And then I think also in your comments you mentioned the OpEx will go down not just for SG&A but also R&D. Can you quantify that at all?
spk02: Yeah, so in terms of Jeff's comment on the 40%, the head count would be commercial individuals that he was talking about being down 40%. In terms of the expenses, you know, that won't be down 40%. Maximo, do you want to give some guidance on that?
spk09: Yeah, our expectation is quarter over quarter, so Q4 versus Q3 expenses will go down 10% operating expenses in total.
spk02: And, Mark, just so you know, R&D expenses will go down, just because we don't have a lot of trials ending, but also the way our reporting structure is, the way we record expenses, the medical affairs department, which is technically commercial, their expenses get reported through research and development. So although it's a commercial group, just the way it's structured, their expenses come in through research and development.
spk01: Okay. Okay. Great. That's helpful. And then I'm guessing there's often some one-time charges in there. Is that 10% reduction in Q4 likely to increase a bit more as we get into 2022 and the one-time charges aren't in the results as well?
spk02: We're not aware of any one-time charges for 2022. So I, you know, from an R&D perspective, you know, we had them You know, we had ones, like Maximo said, in the last quarter, you know, the biggest of which was, you know, payment to the licensor. You know, we had payment to Pfizer for European approval. That's the main one.
spk01: I was meant one-time charges associated with the resizing the sales force.
spk02: Oh, with the restructuring, yeah.
spk09: Yeah, so the one-time charges we expect is about $1.2 million for the quarter. So that's included in our estimate.
spk01: Okay, great. That's helpful. And then maybe from a data perspective, Alan, thanks for the review of the design of the HER2 mutation study in breast cancer. And the analysis that was done on the first seven patients within the Simon two-stage design, is that the exact data set that we will see at San Antonio Breast, or should we expect a more updated data set with potentially more follow-up on those patients and maybe even some additional patients since this trial's continued?
spk02: Yeah, that is a good question. I do not know the answer to that right now. I apologize. My memory isn't as good as it once was. I recently saw that presentation. I know it was the seven patients from the triplet arm, and the updated follow-up on them I don't know if we, like the patients enrolled post-randomization, I don't know if they'll be part of that. It's a poster presentation, and that's public information that it's a poster presentation. I don't know that, I don't remember if we're gonna put in any of the ones from post-randomization. So I apologize, I don't have that right now.
spk01: Okay, no worries, the live trials keep track of. Thanks very much for answering the questions.
spk05: Your next question comes from, I apologize, it looks like we are Paul Choi with Goldman Sachs. Please proceed with your question.
spk00: Hi, this is Kaydon for Paul. Thank you for taking our questions. We have two of them. First, for the EGFR lung study, what additional data will the FDA require beyond the summit data to support an accelerated approval? And then second, what sort of feedback have you gotten from physicians regarding the new dose escalation regimen? Thank you.
spk02: So let me take the first one. In terms of the EGFR lung, you know, we are specifically looking at patients with exon 18 mutated, exon 18 EGFR mutated lung cancer who have already failed an EGFR TKI. To answer your question, what will the FDA require? I don't think we know the answer to that right now because we've not, you know, had a discussion with them, you know, post the data, if you will, to know what they would require. I imagine, you know, I think we have in our milestones that we're going to plan a meeting with the FDA to discuss that. My speculation would be that we have certainly seen for a lot of these rare mutations in lung that the FDA has required a single-arm trial. I think if I remember correctly, it's usually around 50 or 100 patients or so. I would assume the data from Summit would suffice for that, so we could just expand it to that. That would be my assumption. I don't have any concrete words from FDA on that. The trial has been rolling very well. I think we're close to like 30 patients in that arm already, so we're well on our way. I just can't give any feedback because we haven't had that specific discussion with the FDA. On your second question, on the dose escalation, I will answer it, and Jeff, you can add in. The universal feedback we have got has been very favorable. They definitely have said that it makes a notable difference in the grade 3 diarrhea rate and also the overall tolerability of it. And I would say we... Continue to hear very, very positive feedback on that. Jeff, would you like to add?
spk03: Yeah, Alan, I'll try not to be redundant. I would say the same thing, Kate. We've seen very good feedback from customers. The evidence really is the significant uptake we saw in Q3, and as you can guess, that is a blended number for all of Q3. So we continue to see weekly and monthly very nice uptake of dose escalation. That data is based off of the control data, and that's why the FDA approved it. That showed the greater than 60% reduction in grade 3 diarrhea and greater than 80% reduction in discontinuations. So customers believe in that data. They're seeing early feedback that is very positive as they treat patients. It's helping the nursing staff as well. And we think ultimately it will help patients stay on drug and get the full benefit of Neuralynx, which we obviously believe is very important to us.
spk00: Awesome. Thank you so much.
spk03: Thank you.
spk05: Your next question comes from Jeff Meacham with Bank of America. Please proceed with your question.
spk07: Hi, this is Alex on for Jeff Meacham. Thank you for taking your question. So our first one is when you look at the commercial access disruptions caused by COVID, how do you see the script essentially recovering once the pandemic subsides? Do you think it'll be a spike quarter over quarter or do you think it'll be maybe something a little bit more gradual? And the second one is any color that you can provide on the global partner launches during the quarter in terms of feedback you've been receiving from the field. So those are my two. Thank you.
spk02: Yeah, Jeff, would you like to answer both of those, please?
spk03: Sure. Let me give it a shot. So, Alex, I think the first comment is let me go on record and say that I've been wrong on COVID every step of the way. We've seen the ebbs and flows of spikes along the way, so that's been challenging. But as we've seen COVID across the country, what we see is pockets and spikes. We see some loosening of restrictions, some going the other direction. So everything that we're counting on there in our forecast is that we're going to see a slow, steady, hopefully reduction in COVID cases and a slow, steady increase in access. That's what we would count on. We obviously would hope for a much greater spike, but that's just not what we've been seeing as we've monitored over the last 17 months here.
spk02: And if I can just add to that real quick, Alex, you know, I think we were – I'm optimistic early in 2021 that, you know, with the vaccinations and COVID numbers dropping, that we would start to see access improving. And, you know, as Jeff said, we're wrong. We just have not yet seen that. You know, at some juncture, I think we will. It's just very hard to predict when that will be. And, Jeff, do you want to answer the one on the global partner round?
spk03: Yeah, Alex, obviously, as we mentioned in the upfront comments, we're very pleased with the partnership, our global partners. They're doing a nice job of moving Neuralinks to regulatory approval and launches. We were excited that Neuralinks was launched in Peru just recently. We expect it to be launched in metastatic in Taiwan soon. And as I stated, we're excited to see what happens in Mexico and Brazil. The initial launches from the customers on the ground has been positive. There's unmet need across the globe, and we think Nearlink fills a nice niche in that unmet need. So we're seeing some nice, slow, steady uptake that is important to us.
spk02: And, Alex, if I can add to that, you know, we've been very lucky to have some really great partners. You know, our largest, which is, you know, Pierre Farb, who's been doing a wonderful job with it, and we've been very pleased with their executions.
spk07: Great, thank you so much.
spk05: Your next question comes from Jenna Wang with Barclays. Please proceed with your question.
spk08: Hi, this is Sheldon for Gina. Thanks for taking our question. Maybe one on the TPCRC-Casala combo data. So this is in brain map patient population and what type of endpoints would you present and Could you talk about the benchmark and regulatory path and also your thoughts on the future commercial landscaping, this indication, given that right now other drugs in the second and third line also showed pretty strong activity in the CNS? Thanks.
spk02: Yeah, let me take that question. So the TBCRC22 trial is a trial that originated with Pfizer. When we licensed the drug, we took it on, and we have expanded it. The trial originally looked at neuratinib alone in patients with HER2-positive metastatic breast cancer that had brain mets. We expanded it to look at the combination with capecitabine, which is Elota, and then we expanded it again to look at the combination with Capsyla. The reason we were looking at the combination with Capsyla is that the preclinical data shows that neratinib, being an irreversible HER2 inhibitor, ends up increasing internalization of the HER2 receptor, so you end up bringing more of the, when you combine with an ADC, you end up bringing more of the ADC inside the cell, and so you have kind of a synergistic effect. We have a trial of that combination, neratinib plus Capsyla, called FB10, which we reported that ASCO, you know, a 60% response rate, which was much higher than we expected, which we believe is, you know, a testament to that. In terms of the patients in TBC or C22, these are all patients with HER2-positive breast cancer with brain mets. It has been, you know, again, it's narrated with CAD-SILA, and there are two cohorts of patients. One are the patients who have previously been treated with CAD-SILA. The second is the patients who have not been previously treated with CAD-SILA. My understanding from the investigators is it is likely both of those cohorts will be reporting out, most likely at ASCO next year. Because of the timing of when the trial has been going, I would expect we would also have a number of patients in the trial who have been treated with some of the newer agents, like in HER2 or 2-KAISA. In terms of what I would say is the benchmark, you know, you're looking at patients who are, you know, late stage, failed all their existing therapies. There's really no treatment for these patients because, you know, other than Tucaza, I don't think there's any drug that actually has HER2-positive metastatic breast cancer with brain mets, you know, in their label or even has much data on it. I would say anything north of a 20% response rate I think would be viewed as encouraging. I don't know that we're looking to go run a large phase three trial in this indication, but we would certainly look to try to submit it to the NCCN guidelines. As you're aware, neratinib is already in the NCCN guidelines for brain maps, so I think we would look to update those guidelines with this new data.
spk08: That's very helpful.
spk05: This concludes our question and answer session. I'd like to turn the conference back to Mary Ann for closing remarks.
spk04: Thank you for your interest in PUMA Biotechnology. As a reminder, this call may be accessed via replay of the webcast at pumabiotechnology.com beginning later today. Have a good evening.
spk05: Ladies and gentlemen, thank you for participating in today's call. This concludes our program. Everyone have a great day. You may now disconnect.
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