Puma Biotechnology Inc

Good afternoon. My name is Victoria, and I'll be your conference call operator today. At this time, all participants are in a listen-only mode. After the speaker's formal remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press the star key, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press the star 2. If you should require operator assistance during the conference, please press star zero. As a reminder, this call is being recorded. I would now like to turn the conference call over to Marian Ohanisan, Senior Director of IR for Puma Biotechnology. You may begin your conference.

Thank you, Victoria. Good afternoon and welcome to PUMA's conference call to discuss our financial results for the second quarter of 2023. Joining me on the call today are Ellen Auerbach, Chief Executive Officer, President and Chairman of the Board of PUMA Biotechnology, Maximo Noguez, Chief Financial Officer, and Jeff Ludwig, Chief Commercial Officer. After market closed today, PUMA issued a news release detailing second quarter 2023 earnings results. That news release, the slides that Alan and 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 SEC from time to time, including our annual report on Form 10-K for the year ended December 31, 2022. 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, August 3rd, 2023. 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 second quarter 2023 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Thank you, Marianne, and thank you all for joining our call today. Today, PUMA reported total revenue for the second quarter of 2023 of $54.6 million. Total revenue includes product revenue net, which consists entirely of near-link sales, as well as royalties from our sub-licensees. Product revenue net was $51.6 million in the second quarter of 2023, which represents increases as expected from $46.8 million reported in Q1 2023 and $51.3 million reported in Q2 2022. Product revenue for the second quarter of 2023 was impacted by approximately $1.5 million of inventory drawdown at our specialty pharmacies and specialty distributors. Royalty revenue was $3 million in the second quarter of 2023 compared to $6 million in Q1 2023 and $8.2 million in Q2 2022. We reported 3,022 bottles of Neuralink sold in the second quarter of 2023, an increase of 173 from the 2,849 bottles sold in Q1 of 2023. As I noted on last quarter's call, we estimate that inventory increased by about 164 bottles in Q4 of 22, and then subsequently declined by about 236 bottles in Q1 of 23. In Q2 23, we estimate that inventory was further reduced by about 89 bottles. In Q2 23, new prescriptions, or NRX, were down approximately 12.5% compared to Q1 2023, and total prescriptions were up approximately 0.4% compared to Q1 of 2023. Jeff will provide further details in his comments and slides. I will now provide a clinical review of the quarter, then Jeff Ludwig will add additional color on Nearlink's commercial activities. Maximo Noguez will follow with highlights of the key components of our financial statements for the second quarter of 2023. In our investor call in October 2022, we announced that we had in-licensed the anti-cancer drug Alacerdib from Takeda. In clinical trials to date, Alacerdib has shown single agent activity and activity in combination with other cancer drugs in the treatment of many different types of cancer, including homo-interceptor positive breast cancer, triple negative breast cancer, small cell lung cancer, and head and neck cancer. The drug has also shown previous clinical activity in clinical trials in peripheral T-cell lymphoma and non-Hodgkin's lymphoma. Decatur's previous clinical development plan with Allocertib was extensive, and due to this, there's a large, well-characterized clinical safety database with over 1,300 patients who were treated across 22 company-sponsored trials. In terms of the prior experience in small cell lung cancer, as is shown on the slide, Allocertib was previously tested in a Phase II trial that was previously published in Lancet Oncology. In this trial, Allocertib was tested as a single agent in several cohorts of patients with solid tumors. In the small cell lung cancer cohorts, the study design involved the administration of Allocertib monotherapy, to patients with small cell lung cancer who had previously received up to two prior cytotoxic regimens in the metastatic setting. Patients were administered allosterative monotherapy at a dose of 50 milligrams BID for seven days, followed by a 14-day break. As you can see in the table on the right of the slide, in patients with chemotherapy-sensitive disease, allosterative resulted in a response rate of 19% and a duration of response of 3.1 months. For the patients with chemotherapy refractory or chemotherapy-resistant disease, ALICE sort of resulted in a response rate of 25% and a duration of response of 4.3 months. We note that the results in patients with chemotherapy-resistant disease compare favorably to results with recently approved drugs in chemotherapy-resistant small cell lung cancer. As you can see on the slide, you can see the waterfall plot for the patients treated in the trial with small cell lung cancer treated with allosterative monotherapy. On this slide, the light blue bars represent the chemotherapy sensitive patients and the red bars represent the chemotherapy refractory or resistant relapsed patients. On this slide, you can see the adverse events in the trial. The AEs for allosterative are similar to what one would expect for a drug that targets the cell cycle. The main grade three or higher AEs in the trial were neutropenia, anemia, leukopenia, and thrombocytopenia. Alacertib was also tested in a randomized double-blind placebo-controlled phase two trial of paclitaxel plus alacertib versus paclitaxel plus placebo in patients with second-line small cell lung cancer. This trial was published in the Journal of Thoracic Oncology in 2020. Alacertib was dosed at a different dose than in the monotherapy trial, with Alacertib being administered at 40 milligrams BID for three weeks on days one to three, eight to 10, and 15 to 17, plus Paclitaxel dosed at 60 milligrams per meter squared IV on days one, eight, and 15. The comparator arm received placebo plus Paclitaxel, with Paclitaxel dosed at 80 milligrams per meter squared IV on days 1, 8, and 15 in 28-day cycles. Randomization was stratified by type of relapse after primary treatment based on the common definition for each type, with sensitive defined as relapse greater than 90 but less than 180 days after primary treatment, and resistant or refractory defined as relapse less than or equal to 90 days after primary treatment. The protocol was initially written by the sponsor to record relapse type as the time from initial response. A protocol amendment was done approximately a midway through the trial, which corrected the stratification definition of relapse type after primary therapy so that relapses were recorded from last administration of platinum-based chemotherapy, which is in line with the NCCN treatment guidelines and clinical treatment practice, rather than from initial response. To maintain balance at the primary endpoint of PFS was analyzed using the original stratification definition of relapse type. However, sensitivity analysis, which used the corrected stratification definition, was also performed. The trial also incorporated an extensive biomarker analysis with a pre-specified analysis of CMIC expression measured by immunohistochemistry and a retrospective analysis of genetic alterations in ctDNA with clinical outcomes. As is shown on the slide, the primary endpoint in the trial was progression-free survival, or PFS. For the intent to treat population, the hazard ratio using the original definition was 0.77, with a p-value of 0.113. Using the corrected definition, the hazard ratio was 0.71, with a p-value of 0.038. For the patients with chemotherapy-resistant or refractory relapse, the hazard ratio was 0.66, with a p-value of 0.037. For the ITT population, the OS showed a hazard ratio of 0.87 with a p-value of 0.714, and using the corrected definition, the hazard ratio is 0.79 with a p-value of 0.209. As previously mentioned, there was an extensive biomarker analysis done in the trial with prospective testing for CMIC. For the patients in the trial who were found to be IHC positive for CMIC expression, the hazard ratio in the trial was 0.29, with an immediate PFS for the paclitaxel plus alacertib arm of 4.64 months, and a median PFS for the placebo plus paclitaxel arm of 2.27 months. The trial also incorporated an analysis of patients with alterations in cell cycle genes, including CDK6, RBL1, RBL2, and RB1. Of note, RB1 mutations were the most frequent mutation, with approximately 60% of the patients having RB1 mutations, while the CDK6, RBL1, and RBL2 mutations were found with very low frequency. As shown in the slide for patients with cell cycle mutations, the PFS in the paclitaxel plus alacertibarm was 3.68 months, while the placebo plus paclitaxel arm was 1.8 months. and the hazard ratio was 0.395 with a p-value of 0.003. The overall survival in the subgroup patients was 7.2 months for the L-acertib arm and 4.47 months for the placebo arm with a hazard ratio of 0.427 and a p-value of 0.00085. Slide eight shows the AE profile for the trial. Higher rates of grade three or higher AEs were seen in the allocertabone for neutropenia, anemia, and decreased neutrophil count, which would be expected based on the prior phase two trial of allocertabine monotherapy. There were also four drug-related fatalities in the trial due to neutropenic sepsis, febrile neutropenia, and septic shock. PUMA recently met with the FDA to discuss the clinical development plan for allocertabine in small cell lung cancer. with the intent of exploring the possibility of an accelerated approval pathway for allocertib in small cell lung cancer. The previous randomized phase two trial of paclitaxel plus allocertib versus paclitaxel plus placebo demonstrated that in biomarker-focused subgroups, the combination of allocertib plus paclitaxel demonstrated a PFS and OS advantage compared to paclitaxel plus placebo. However, similar biomarker analyses were not performed in the previous monotherapy trial in patients with small cell lung cancer. Hence, the efficacy of allosterative monotherapy in these biomarker subgroups is unknown. In the third quarter, PUMA filed its IND with the FDA for a phase two trial of allosterative monotherapy in patients with small cell lung cancer. The study name is PUMA-ALI-4201, which is shown on slide nine. The trial will enroll up to 60 patients with extensive stage small cell lung cancer who've progressed after first-line platinum-based chemotherapy and immunotherapy. Patients must provide tissue-based biopsies so that biomarkers can be analyzed, and L-acertib will be dosed at 50 milligrams BID on days one through seven of every 21-day cycle. PUMA plans to perform an interim analysis for the evaluation of the biomarkers, as well as an evaluation of the efficacy. Once the FDA determines the study is safe to proceed, PUMA will seek to initiate this trial in the second half of 2023. As is shown on slide 10, the primary endpoint of the trial will be objective response rate, with secondary endpoints of duration of response, disease control, progression-free survival, and overall survival. The company will also be looking at each of these endpoints within selected pre-specified biomarker subgroups, as well as to assess whether there is better efficacy seen in any biomarker subgroup. The goal would be to correlate the efficacy in these biomarker subgroups to the efficacy that was previously seen in the biomarker subgroups from the randomized trial of Faclitaxel plus Alacerdin published in the Journal of Thoracic Oncology. If there is alignment between the two, the company believes it could represent a potential accelerated approval strategy. As is seen in slide 11, PUMA will be performing its biomarker analysis of the ALI4201 trial in patients I'm sorry, in parallel with the execution of the clinical trial. Again, the goal here will be to look at the efficacy of allocertib monotherapy in biomarker subgroups and correlate that to the efficacy seen in the same biomarker subgroups in the paclitaxel plus allocertib randomized trial. As is shown on the slide, the company anticipates meeting with the FDA once it has performed this analysis to explore the potential for an accelerated approval pathway for allocertib in small cell lung cancer. We continue to anticipate that there will be several clinical milestones for the Allocertib program in the coming months. This includes potentially initiating the phase two clinical trial of Allocertib in small cell lung cancer before the end of the year, conducting a meeting with the FDA to discuss the clinical development and registration pathway for Allocertib in hormone receptor positive HER2 negative breast cancer in the fourth quarter of 2023, and reporting data from an ongoing investigator-sponsored Phase 1-2 trial of aliceridib plus pembrolizumab in the treatment of patients with RB-deficient head and neck squamous cell cancer in the second half of this year. As mentioned on prior earnings calls and in response to investor questions, PUMA continues to evaluate several drugs to potentially end license that would allow the company to diversify itself and leverage its existing R&D regulatory and commercial infrastructure The company will continue to keep investors updated on this as it progresses. 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.