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.

Thanks, Alan. Appreciate it. And thanks, everyone, for joining our second quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. Let me start with just a brief overview of our commercial strategy. We remain largely focused on the extended adjuvant indication where we believe there continues to be significant unmet need, especially for patients at higher risk of recurrence. We are continuing to refine our targeting for both our personal and non-personal promotion with the goal of being more efficient and more effective with our given resources. In addition, the team continues to look for opportunities to expand our engagement with local and regional advocacy groups, ultimately to better educate and support patients throughout their treatment journey. We believe Nearlinks is a promotionally sensitive product and are happy to see that our teams are making progress increasing our reach and frequency with HCPs. With that said, oncology is still a very restricted therapeutic area from an access standpoint, and getting in front of customers at the right time can be more important given the various treatment decisions and the overall duration of treatment. Our sales and marketing teams are working closely together with the goal of driving sustained improvements in our reach and frequency and increasing engagements that are deemed valuable and motivating. With that high-level update, let me transition to some of the U.S. commercial slides where I will provide some additional insights. Once I have finished, I will turn the call over to Maximo for a more detailed review of our financial results. Slide three provides an overview of our distribution model. This model has not changed and remains separated into two distinct channels that provide neural links to patients. We refer to these two channels as our specialty pharmacy channel and our specialty distributor channel. Most of our business continues to flow through the specialty pharmacy channel, but we have seen a continued increase in the percent of business flowing through the SD channel. In Q2 of 2023, approximately 26% of our business went through the SD channel. This is slightly up from the 25% we reported in Q1 of 2023. and higher than the 21% we reported in Q2 of 2022. Turning to slide four, Nearlink's net revenue in Q2 of 2023 was $51.6 million, which represents both year-over-year and quarter-over-quarter growth. More specifically, Nearlink's net product sales increased about $300,000 from Q2 of 2022 and increased about $4.8 million from Q1 of 2023. Inventory changes clearly have an impact on these numbers, so let me give you some additional insight, which I've also included on this slide. In Q2 2023, we estimate that inventory decreased by about 1.5 million. As a comparator, we estimate that inventory increased by about 2.7 million in Q2 of 2022 and decreased by about 3.8 million in Q1 of 2023. Slide five. shows Q2 2023 ex-factory bottle sales and also provides both a year-over-year and a quarter-over-quarter comparison. In Q2 2023, Neuralink's ex-factory bottle sales were 3,022, which represents about a 6% quarter-over-quarter growth and about a 6% year-over-year decline. Now, let me again provide more specifics around the inventory impact, which is also included at the bottom of this slide. We estimate that inventory declined by about 89 bottles in the second quarter of 2023. As a comparison, we estimate that inventory increased by about 179 bottles in Q2 of 2022 and declined by about 236 bottles in Q1 of 2023. Let me pause and take just a moment to provide some additional insights into the business. Starting with demand, We are pleased with the fact that we saw demand grow approximately 2.9% year-over-year and about 0.7% quarter-over-quarter. The SP channel was slightly positive for both metrics. More precisely, about 0.5% growth year-over-year and about 0.2% growth quarter-over-quarter. But the SD channel was the real driver of this growth. The SD channel grew approximately 12% year-over-year and 2.6% quarter-over-quarter. I want to remind investors that we do not pick up new prescription or NRX or TRX data in the SD channel, so we do not have the same level of visibility for patients that start and stay in this channel as we do in the SP channel. Turning to NRX and TRX, in Q2, we saw a quarter-over-quarter decline in NRX of about 12.5%, and a year-over-year decline of about 4.1%. As we have discussed on previous calls, we have seen a consistent pattern since launch where NRX growth is positive in Q1 with a subsequent decline in Q2. This is based on patients deciding to delay starting on Nerlinks around the late Q4 holidays and instead pushing those starts into Q1. Moving to total prescriptions, we saw a quarter-over-quarter increase of about 0.4% and a year-over-year increase of approximately 1.6% largely attributed to better refill rates. As I mentioned previously, we do not pick up NRX and TRX data for patients that start and stay in the SD channel. With that said, the majority of our business flows through the SP channel, so we want to see consistent NRX and TRX year-over-year trends if we're going to accomplish our goal of driving overall growth. The team is focused on this priority and knows the importance of this goal. Slide six highlights the adoption of dose escalation. We continue to believe dose escalation is an important metric as it serves to improve the tolerability of Neuralynx by significantly reducing grade three diarrhea, decreasing discontinuation rates, and reducing the median cumulative days of grade three diarrhea. In Q2, approximately 70% of patients who received commercial drug started Neuralynx on a lower daily dose. The commercial team continues to discuss and educate healthcare practitioners around the benefits of dose escalation. And I'm overall happy with this adoption and pleased to see dose escalation included in many prominent guidelines, including NCCN. Slide seven highlights the strategic collaborations we have formed across the globe. As previously reported, in Q1 of 2023, Nearlinks received regulatory approval in the metastatic setting in Columbia, received regulatory approval in the extended adjuvant setting for both Morocco and South Africa, and was officially launched in Mexico, also in the extended adjuvant setting. In Q2, we are pleased to announce that Neuralynx was launched in the extended adjuvant setting in Slovakia. We appreciate the efforts being put forth by our global partners to make Neuralynx available to more patients around the world. I'd like to wrap up by once again thanking my colleagues at PUMA for their passion and dedication to making an impact on the lives of patients and their families battling breast cancer. This feeling permeates the entire organization. We know more needs to be done, and we are committed to making a bigger impact. I will now turn the call over to Maximo for a review of our financial results. Maximo?

Thanks, Jeff. I will begin with a brief summary of our financial results for the second quarter of 2023. Please note that I will make comparisons to Q1 2023, 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 Q2 2023 Thank You, which will be filed today and includes our consolidated financial statements. For the second quarter of 2023, we reported net income based on GAAP of $2.1 million or $0.05 per share. This compares to a net income in Q1 2023 of $1.4 million or $0.03 per share. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $4.6 million or $0.10 per share for the second quarter of 2023. Gross revenue from NALIC sales was $62.8 million in Q2 2023 and $59.4 million in Q1 2023. As Alan mentioned, net product revenue from NALIC sales was $51.6 million compared to $46.8 million reported in Q1 2023. We believe that Q2 net sales were impacted by approximately $1.5 million of inventory drawdown from our distributors. versus approximately $3.8 million of inventory drawdown in Q1 2023. Royalty revenue totaled $3 million in the second quarter of 2023, compared to $6 million in Q1 2023. The lower royalties versus Q1 reflects the timing of shipments to our partner in China. Our gross net adjustment in Q2 2023 was about 17.9%, compared to the 21.2% gross net adjustment reported in Q1, 2023. Lower copay, government charges, and Medicaid rebates were the main drivers of the decrease versus Q1, 2023. Cost of sales for Q2, 2023 was $11.9 million, including $2.4 million for the amortization of intangible assets related to our NeurAteniv license. cost of sales for Q1 2023 was $13.2 million. Going forward, we will continue to recognize amortization of milestones to the licensor of about $2.4 million per quarter as cost of sales. For fiscal year 2023, PUMA anticipates that net netlink product revenue will be in the range of $205 to $210 million. We also anticipate that our gross to net adjustment for the full year 2023 will be between 19% and 20%. In addition, for the fiscal year 2023, we anticipate receiving royalties from our partners around the world in the range of 25 to 30 million. We don't expect licensed revenue in 2023. We also expect that net income for the full year will be in the range of 20 to 24 million. We anticipate that for Q3 2023, 2023, NERLINK's product revenue net will be in the range of $51 to $53 million. Also, we expect Q3 royalty revenue will be in the range of $3 to $5 million. Further estimate that the gross to net adjustment in Q3 2023 will be approximately 17.5% to 18.5%, whom anticipates a Q3 net profit between $3 and $4 million. SG&A expenses were 24.4 million in the second quarter of 2023 compared to 22.5 million for the first quarter. SG&A expenses included non-cash charges for stock-based compensation of 1.8 million for Q2 2023 compared to 2 million for Q1 2023. Research and development expenses were 13.4 million in the second quarter of 2023 compared to 12.7 million for the first quarter. R&D expenses included non-cash charges for stock-based compensation of $0.8 million in the second quarter of 2023 compared to $0.9 million in the first quarter. In the second quarter of 2023, PUMA reported cash earned of approximately $3.2 million. This compares to cash earned of approximately $9.9 million in Q1 2023, which included $12.5 million payment to Pfizer related to the achievement of a global revenue milestone, and an $8 million payment related to a legal settlement. On the expense side, UMA continues to anticipate a reduction in total operating expenses compared to 2022. More specifically, we anticipate SG&A expenses to decline approximately 1% to 3%, and R&D expenses to increase 5% to 7% year over year. At June 30th, 2023, we had approximately $74.4 million in cash, cash equivalents, and marketable securities. Our accounts receivables balance was $31.3 million. Our accounts receivables terms range between 10 and 68 days, while our sales outstanding are about 48 days. We estimate that as of June 30th, 2023, our distribution network maintained approximately three weeks of inventory. Overall, we continue to deploy our financial resources to focus on the commercialization of Nearlinks, the development of Alicertif, and controlling our expenses.

Thanks, Maximo. We are pleased to report positive net income as well as positive cash flow during the second quarter of 2023. Puma Senior Management, in cooperation with the Board of Directors, continues to remain focused on improving near-link sales in 2023 and beyond. In the fourth quarter of 2021, we implemented a reduction in expenses with the goal of reducing expenses in order to maximize operational cash flows. We believe that the positive net income and cash flow reported in the second quarter reflect these expense reductions. These expense reductions are also a major contributor to the positive net income and positive cash flow that PUMA is guiding to for the full year 2023. The company remains committed to continuing to achieve these operational cash flows and positive net income and will continue to reduce expenses if needed to achieve this. 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 at helping these patients during their journey, and we will continue to strive to achieve that goal. This concludes today's presentation. We will now turn the floor back to the operator for Q&A. Operator?

Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your lines in the question queue. If you wish to withdraw your question, please press the star 2. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. First question comes from Ed White with HC Wainwright. Please go ahead.

Good afternoon. Thanks for taking my questions and congratulations on the quarter. So just a couple of questions on sales. I might have missed it, but did you give the percentage of live interactions in the second quarter? I believe in the first quarter you mentioned it was 81%. And is this number peaking now?

Thanks for the question. This is Jeff. I'm sorry, I did not have that in the script. I apologize. In Q1, it was 81% from a live. In Q2, it's very similar. It's reported around 81% to 82% live versus virtual. So we still see the vast majority of our calls being live. I'm not seeing the same inflection. I would expect that we're going to see that combination likely to continue for the foreseeable future.

Great, thanks. And I'm just wondering if you had the NCCN guidelines were changed, updated, I should say, on February 1st. Are you seeing any impact of sales based on those guideline changes yet, or should we expect to see it in the future?

So, Ed, we were very happy that NCCN changed that, and we feel like that that validates some of the things we're trying to do. As you may know, they moved Neuralinks up into the body of the guidelines, which we feel is a much more prominent position. Where they added Neuralinks was in the useful in certain circumstances section, and ultimately what it said was consider using Neuralinks for patients at higher risk of reoccurrence. We love that positioning, it's more prominent, but the words consider puts the onus continued on the sales team to get in front and validate and justify those. So although we see it as a positive trend, we think it's really up to my sales team and the commercial team to pull that through, educate around that, and also continue to provide the benefits of Neuralinks in those patients. Hopefully that adds some more color.

It does. And perhaps just the last question I have on the sales are, you know, what really is going to move the needle for Neuralink over the next 12 months? As you said, it seems like you're having more interactions. The NCCN guidelines really haven't had, you know, much of an impact without your pushing for it. So what do you have left in your repertoire to increase sales?

Yeah, Ed, very good question. I appreciate it. Where we're focused in terms of trying to inflect neural links is on a couple areas. Number one, we still don't believe that we've done a strong enough job embedding the evolution of the clinical data. So the prime focus of the commercial team is to update and educate around that evolving clinical data, especially around those subgroups of increased levels of risk focused on IDFS, OS, CNS, and durations. We want to continue to embed that so customers know that data inside and out. That's number one. Number two, we are trying to help our sales team, as you think about the HER2-positive breast cancer patients, spread across a large number of community oncologists where access is not as strong as we would like. What we're trying to do is to help the sales force spend more time in front of those customers that are more likely to have more of those appropriate patients. that increased share of voice, we're trying to focus that in on places where you have a greater return on that discussion. Two other things I'll throw out. I mentioned access can be tough in a community setting. We are working hard to increase our non-personal promotion, so in places we cannot get in front of, we're trying to support that through non-personal message to get that education across as well. And lastly, as I mentioned, In the extended adjuvant setting, we believe patients can play a significant role in asking their doctor about, what else can I do to reduce my risk? So we're trying to increase that partnership with local and regional advocacy groups so patients are more educated and engage more frequently on asking for other options to reduce their risk. Those are the four things we're focused in on right now to drive that business.

Great. Thank you. And perhaps a pipeline question, just an assertive. You're planning on meeting with the FDA for the HR positive HER2 negative breast cancer indication. What are your expectations for that meeting with the FDA? You know, Alan, what are you thinking would be a home run here? What are you thinking that, you know, would be the path forward? Yeah, thanks for the question, Ed.

We've seen L-acertib tested in two different settings in HR-positive, HER2-negative breast cancer. One is in combination with endocrine therapy, and the other is in combination with chemotherapy, specifically with paclitaxel, and the endocrine was with fulvestrin. The fulvestrant combination is obviously used early in the treatment guideline in the treatment regimen, so obviously we have a larger potential patient population. In our meetings with the KOLs, they have definitely pushed for using L-acertib earlier rather than later, so they've pushed more for the combination with fulvestrant or some other endocrine in kind of that endocrine phase of treatment, kind of the before chemo part. I don't know if there's any setting that's, quote, a home run. You know, I think we'll have a very, you know, productive discussion with the FDA. It'll be, you know, very helpful and interactive. I don't really, there's no scenario that I view as, quote, a home run. I would imagine we will just be discussing with them, you know, the path forward for that combination and, you know, what the eventual phase three trial would need to look like.

Okay, great. Thanks, Alan, for taking my question.

Next question comes from Divya Rao with P.D. Cohen and Company. Please go ahead.

Good afternoon. This is Divya. I'm for Mark. Thanks for taking our question. We have two questions, mostly on the pipeline. Just to clarify on the Phase II trial of allosterative and small cell, will all the patients be enrolled and then have their tissue biopsy during the interim cut to then evaluate the subgroup analysis, or will the patients be screened for the presence of biomarkers before they're enrolled into the trial?

Yeah, Divya, thanks for the question. The patients will have, so we'll be pre-specifying. The way we're looking to do this is to pre-specify up front the biomarkers we're going to look at. We'll do the tissue biopsy you know, at study entry. And then we're meant to, you know, do the trial in a way that we're constantly looking at the biomarkers. And so if there's a need to kind of enrich a population because we're seeing a signal, we can do that.

Got it. That's helpful. And then for the PEMBRO combination trial that you're hoping to read out in the second half, What is the kind of scope of that data readout going to be and possibly is there a venue that you're thinking of for that disclosure?

Yeah, so it's an investigator-sponsored trial, so we have, you know, not as much interaction on that. In our last communication with the investigator, the investigator said that they were looking to submit it to the molecular targets meeting. I believe they were looking to do it as a late breaker. So that's the last update we have on that.

Got it. Thank you so much.

Next question comes from Jeff Neckham, Bank of America. Please go ahead.

Hi, this is Alex Hammond on for Jeff. Thank you very much for taking our question. Can you talk a little bit about your BD strategy? You touched on it a bit during prepared remarks, but

um what will be your criteria or your preference for the type of products that you are going to potentially in license thank you very much yeah thank you for the question um i think we would be looking at you know focusing more in the solid tumor space because that's where our you know both our commercial sales force and our kind of r d domain knowledge is uh and i think we'd be looking at you know uh We obviously would be looking at potential commercial assets, although I think that in the solid tumor space has its challenges, and then ones that are in various stages of clinical development as well. Thanks.

Next question comes from Jenna Wang with Barclays. Please go ahead.

Hi. Good afternoon. This is Hershita on for Gina. Thanks for taking our question. So I just had a quick one on the small cell development pathway. By the way, thank you for all the color in the prepared remarks. I was curious, did you discuss with the FDA what a confirmatory trial would look like if you were able to go through an accelerated approval path based on the PUMA ALI 4201 trial you disclosed today? Thank you.

Yeah, thank you for that question. So, you know, normally when you're going for an accelerated approval pathway, you, you know, go in with a phase two trial and you try to have the conviction that that's going to result in, you know, a positive randomized trial. Well, obviously we have the randomized phase two where in the biomarker subgroups we have shown a PSS and OS benefit. So now we're kind of going, you know, backwards to try to find the, you know, monotherapy trial, you know, monotherapy subgroup. that would correlate with what we saw in that randomized trial. I would imagine that the randomized trial would be very similar to what was published in the Journal of Thoracic Oncology, which would be the kind of paclitaxel L-acertib against paclitaxel placebo. That would be my assumption, although it would be one that would be prospectively looking for that biomarker subgroup, so the only patients enrolled would have that biomarker. So it would be similar but different from what was done previously.

Very helpful. Thank you so much.

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