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spk11: Good day and welcome to the CGEN fourth quarter and full year 2020 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star then one on your telephone keypad. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Ms. Peggy Pinkston, Vice President of Investor Relations. Please go ahead.
spk00: Thank you, Operator, and good afternoon, everyone. I'd like to welcome all of you to CJIN's fourth quarter and full year 2020 financial results conference call. This afternoon, we issued a press release with our results, and that press release and supporting slides are available on our website in the investor section events and presentations page. Speakers on our call today will be Clay Segal, President and Chief Executive Officer, Chip Bromp, Executive Vice President, Commercial U.S., Todd Simpson, Chief Financial Officer, and Roger Danzy, Chief Medical Officer. Following our prepared remarks, we'll open the line for questions. We aim to keep this call to one hour, and so ask that you limit yourself to one question to give everyone an opportunity to participate in Q&A during our call today. Today's conference call will include forward-looking statements regarding future or anticipated events and results, including the company's 2021 financial outlook, anticipated product sales, revenues, costs, and expenses, and potential clinical and regulatory milestones, including data readouts, regulatory commissions, and approvals. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include the difficulty in forecasting sales, revenues, and expenses, impacts related to the COVID-19 pandemic, and the uncertainty associated with the pharmaceutical development and regulatory approval process. More information about the risks and uncertainties faced by CGEN is contained under the caption risk factors included in the company's current report on Form 8-K, filed with the Securities and Exchange Commission on December 29th, 2020, and the company's subsequent reports filed with the SEC. And now I'll turn the call over to Clay.
spk03: Thank you, Peg, and good afternoon, everyone. The past year was pivotal in the evolution of our business. We expanded our geographic footprint and operations beyond the United States and Canada, with presence across greater Europe as we prepare for additional launches of TKISA. We are now a multi-product global oncology company with substantial financial strength to fuel ongoing company investments. We have laid a strong foundation for continued growth and the ability to bring important medicines to cancer patients in need. I'll start with a summary of our recent financial performance. We reported record 2020 product sales in our territories of just over $1 billion, reflecting a 59% annual increase. These results were driven by successful PADSEV and JICAISA launches, as well as continued strong et cetera sales. Total revenues were $2.2 billion in 2020, which included royalties and collaborations, notably our new strategic partnership with Merck. We ended 2020 with $2.7 billion in cash and investments, which strongly positions us to continue advancing our programs. In 2021, we expect to see continued growth of PADSEP and ChuKaiza and maintain market share for Etcetera, with anticipated product sales in our territories of approximately $1.3 billion. Todd will walk us through our 2021 guidance, and Chip will discuss the commercial dynamics. But first, I'd like to reflect upon the past year. During 2020, we delivered multiple important business, regulatory, and development milestones. I'd like to provide you with a few highlights, beginning with Etcetera's. Our partner Takeda gained more ex-US approvals, including in China. Additionally, in December, we presented data from the Echelon 1 and Echelon 2 Phase 3 trials at ASH, demonstrating robust and durable remissions at five years. This is a clinically meaningful and important milestone in a cancer patient's journey. We are committed to maximizing et cetera's patient reach through our clinical development program in Hodgkin lymphoma and other CD30-expressing malignancies. Next, I'll turn to PADSEV, a first-in-class ADC that we're developing and commercializing in collaboration with Astellas. PADSEV has shown rapid adoption since its FDA accelerated approval for metastatic urothelial cancer just over a year ago. In 2020, we announced positive top-line results from two PADSEV studies. This included strong data from our single-arm Phase II trial in cis-ineligible metastatic urothelial cancer patients previously treated with an immune checkpoint inhibitor. We expect to submit these data to FDA in a supplemental BLA within the next few weeks. Last year, we also reported top-line results from a randomized Phase III trial in patients with previously treated metastatic urothelial cancer. Results demonstrated that PADSEV significantly improved overall survival and progression-free survival versus standard-of-care chemotherapy. These data will also be submitted to FDA, resulting in two concurrent supplemental BLAs in the next few weeks. In addition, global submissions for these trials are planned to support marketing applications in the EU and Japan later this quarter. Also last year, we received breakthrough therapy designation for PADSET in combination with Keytruda in first-line metastatic urothelial cancer. We are currently enrolling two trials designed to support approval in first-line metastatic patients, one to support accelerated approval in cis-ineligible patients, and the other to support global approvals in patients regardless of platinum eligibility. Our goal is to redefine first-line treatment for metastatic urothelial cancer patients around the globe. Finally, in 2020, we made significant headway in exploring earlier stages of bladder cancer. In collaboration with Astellas and Merck, PAD-7 is being tested in two randomized Phase III trials in cis-ineligible and cis-eligible muscle-invasive bladder cancer patients. Now, on to TKAISA, a best-in-class HER2 TKI for HER2-positive metastatic breast cancer patients with and without brain metastasis. In 2020, TKAISA was also approved in the United States, as well as Australia, Canada, Singapore, and Switzerland under the FDA's Project Orbis. In December, we received a positive CHMP opinion recommending the European Commission approval of Tukaiza in the EU, and we are preparing for its potential launch further extending Tukaiza's reach. Lastly, in order to accelerate the commercialization of Tukaiza in regions beyond the US, Canada, and Europe, we entered into a strategic collaboration with Merck in 2020. Our three currently approved products are important first-in-class or best-in-class medicines that have been embraced by oncologists. We are making substantial investments in their continued development, which will provide growth catalysts in future years. We believe that each of the brands have blockbuster potential. Etcetera is a mainstay in the treatment of CD30 lymphomas and has achieved strong market penetration in its six indications. Global sales of etc. in 2020 were approximately $1.2 billion, and nearly 83,000 patients around the world have received etc. therapy. We expect that the impact of COVID-19, which is leading to fewer frontline Hodgkin lymphoma diagnoses, will resolve in time, but this is hard to predict. We believe that future growth of etc. will be primarily based on label expansion supported by our multiple ongoing trials that we expect to read out in the next few years. PADSAT has become the standard of care in its current labeled indication. We expect that both supplemental BLA submissions, if approved, will further strengthen PADSAT's role in the treatment of patients with advanced metastatic urothelial cancer. Looking toward first-line metastatic bladder cancer, we expect to complete enrollment in the cohort K accelerated approval trial by the end of this year. Factoring in a follow-up period to observe duration of response, data from this cohort could support a supplemental BLA in 2022. In addition, three large Phase III trials are currently enrolling in first-line metastatic urophelial cancer and muscle-invasive bladder cancer. These trials are intended to serve as the basis for multiple global submissions in the future. Tucaiza is an important medicine that has been rapidly adopted by oncologists. We're planning launches in Europe during 2021, as well as seeking reimbursement approvals on a country-by-country basis. Additionally, we're conducting several large, potentially pivotal trials in breast, gastric, and colorectal cancers. We expect to complete enrollment in the Mountaineer trial in colorectal cancer patients by the end of 2021, while our other studies will continue to enroll. Building on the success of ETCETRIS with our six labeled indications, we expect ADCEP and CHISA to reach even more patients in the future. This is based on our ongoing extensive clinical development programs that Roger will describe in detail. I'll now turn to our late-stage clinical development programs, tesodimabvidodine, also known as TB, and lidirutuzumabvidodine, known as LD. Yesterday, we and GenMed announced the submission of a BLA for TV in patients with recurrent or metastatic cervical cancer, positioning it to be our fourth commercial product. This is a significant milestone for CGEN and would further expand our commercial portfolio. We also recently initiated the innovative 301 Phase III study in metastatic cervical cancer, which is intended to support global regulatory applications and serve as the confirmatory trial. Aligned with our goal of addressing the high unmet need for patients with hormone receptor positive and triple negative breast cancer, last year we announced a global collaboration with Merck to co-develop and co-commercialize LBs, The collaboration is intended to accelerate the development of LB and focuses on evaluating this highly active ADC as monotherapy and in combination with Keytruda in Live1 expressing solid tumors. As we look ahead to 2021 and beyond, we are focused on three strategic priorities to drive continued innovation and growth. The first is to maximize the global potential of our three approved medicines through robust clinical development programs and exceptional commercial execution. The second priority is to advance late-stage programs towards securing approvals for new products, including TV and LV. And the third is to expand our already strong and innovative early-stage pipeline through continued leadership and innovation in the ADC space, internal R&D investments, and corporate development opportunities. Focusing on these strategic pillars will ensure our organization is aligned to deliver substantial value to our key stakeholders, notably stockholders, our employees, and especially cancer patients. Next, I'll turn the call over to Chip to discuss our commercial activities. Then Todd will comment on our financial results and 2021 guidance. After that, Roger will discuss our clinical development activities and key milestones for the year ahead. Chip. Thank you, Clay. The commercial team closed out a very successful year with a solid fourth quarter. Launching two drugs in these unprecedented times was a difficult task. Through strong digital marketing strategies, creativity, and outstanding customer relationships, our team delivered. Successful launches of Pad 7 to Kaisa drove 59% total net product sales growth in 2020 over 2019. I would like to thank all my commercial colleagues for their dedication and efforts in 2020 to ensure appropriate patients received our products. Starting with Etcetera's, we reported fourth quarter sales of $164 million. and $659 million for the year, a 5% increase over the full year in 2019. We continue to see an impact on et cetera sales due to the pandemic. Based on claims and electronic medical records data, new Hodgkin lymphoma diagnosis trends continue to be approximately 15% lower than historic levels. We are now promoting the five-year follow-up data from the Echelon 1 trial in Frontline HL. and early reactions to these important data have been favorable. Five-year outcomes are an established standard, and we expect that the durable advantage of etc. will drive incremental share. Moving on to PATSEV, fourth quarter sales were $69 million, an increase of 11% over the third quarter of 2020. Full-year PATSEV sales were $222 million. We received rapid adoption in our labeled indication, and look forward to promoting upon approval the overall survival data observed in the EV301 trial and the Strong Cohort 2 data in metastatic urothelial cancer. Both indications would meet a significant unmet need for patients who have received a prior PD-1 or PD-L1 inhibitor. Our guidance takes into consideration our high market share in our current labeled indication and evolving market dynamics, such as increasing use of PD-1 or PD-L1 inhibitors in the front line. We are confident that PATSEV is well positioned this year for continued growth. Transitioning to Tecasa, fourth quarter sales were $61 million, a 45% increase over the third quarter. Four-year sales of Tecasa were $120 million. We continue to see adoption of Tecasa across its strong label, and payer coverage continues to be solid. We are pleased with the growth we are seeing in both the community and academic settings. I will now turn the call over to Todd.
spk12: Great. Thanks, Chip, and thanks to everyone for joining us on the call this afternoon. Today I'll summarize our financial results for the fourth quarter and full year in 2020. I'll then provide our financial outlook for 2021. Total revenues were $601 million in the fourth quarter and $2.2 billion for the full year in 2020. This included net product sales of $294 million for the fourth quarter and $1 billion for the full year. This is the first time we have recorded net product sales of $1 billion, and this reflects the substantial growth in now a diverse commercial portfolio, which includes three important drugs. Royalty revenues were $39 million in the fourth quarter and $127 million for the full year in 2020. Royalty revenues are primarily driven by increasing sales of its Tetris by Takeda and, to a lesser extent, sales of Poldi by Roche and BlendRep by GSK, both of which are ADCs that utilize cGen technology. Collaboration and license agreement revenues were $268 million for the fourth quarter and $1 billion for the full year in 2020. Notably, the full year of 2020 included $975 million related to the LV and Takaiza deals with Merck, of which $250 million was recorded in the fourth quarter. These collaborations are significant for the company both financially and strategically and will accelerate the development of LV. Cost of sales in the fourth quarter of 2020 was $62 million and $218 million for the full year. This included product cost of sales and royalties for each of our three brands and the PADSEV profit share to Astellas, which was $32 million in the fourth quarter and $105 million for the full year in 2020. In addition, cost of sales included two to Kaiser related items, non-cash amortization of acquired technology costs of approximately $6 million per quarter that began in the second quarter of 2020, and a sub-license fee that was paid related to the Takaiza license agreement with Merck. R&D expenses were $216 million in the fourth quarter and $827 million for the full year in 2020. Growth over 2019 primarily reflected increased investment across our pipeline aimed at extending the use of our commercial products through expanded labels, as well as investment in the development of our earlier stage programs. SG&A expenses were $158 million in the fourth quarter and $534 million for the full year in 2020. These are planned increases over 2019 and reflect U.S. commercialization of PADSEV and Takaiza and our European expansion as we prepare for the Takaiza launches later this year. Regarding the profit recorded for the fourth quarter and for the full year in 2020, this is the result of revenue recognized under our two new collaborations with Merck. Our long-term growth strategy continues to remain on investment to maximize the potential of our approved products and in advancing our pipeline. We ended the year with $2.7 billion in cash and investments, which includes proceeds from the $1 billion equity investment from Merck in the fourth quarter. This positions us strongly to advance our plans in 2021 and beyond. Now, regarding our 2021 financial outlook, I'll begin with revenue guidance. First, we expect total revenues to be in the range of approximately $1.4 to $1.5 billion. This breaks down as follows. We expect total product sales to be approximately $1.28 to $1.34 billion, which includes et cetera sales in the range of $675 to $700 billion, Padsud sales in the range of $310 to $325 million, and Tekiza sales in the range of $300 million to $315 million. Clay and Chip provided some context around what we envisioned to be the growth drivers for each of the brands in the near and longer term. Next, with respect to royalty revenues, we expect them to be in the range of $125 to $135 million. primarily reflecting sales of etc. by Takeda in its territory, and to a lesser degree, contributions from Polivi and BlendRap. Finally, collaboration revenues are now primarily event-driven and dependent upon progress by our ADC collaborators. We expect these revenues to be less than $20 million in 2021. Beginning next year, we expect collaboration revenues will reflect contributions from PADSA sales by Astellas in its territories. I'll now turn to expenses. Cost of sales is expected to be in a range of $270 to $300 million. This will be driven by increased product sales across all brands and a higher profit share payment to Astellas as a result of higher expected PADSA sales. Cost of sales will also reflect third party royalties owed as well as non-cash amortization. R&D expenses are expected to be in the range of $900 billion to $1 billion, primarily related to two items. First, investment in clinical trials to expand et cetera's PAD7 to Kaiser into additional indications. And second, increased investment to advance our earlier stage pipeline that includes nine other programs in clinical development. We believe that these investments are important to our long-term growth. SG&A expenses are expected to be in a range of $650 to $725 million as we continue to focus on commercial execution to drive growth of our three approved products. This guidance also includes the global infrastructure to support the launch of Takaiza in Europe. Taken together, our 2021 guidance reflects both that we continue to see significant opportunity for our approved medicines, and that we will continue efforts to develop new medicines for unmet medical needs. And with that, I'll turn the call over to Roger.
spk09: Thank you, Todd, and good afternoon, everyone. Today, I will provide an update on recent progress for our approved medicines and pipeline programs and will outline key milestones anticipated in the year ahead. Beginning with et cetera's, we presented the important five-year follow-up data at ASH for the Phase III Echelon 1 trial. ETCS in combination with ABD resulted in superior long-term outcomes when compared to ABD in frontline advanced Hodgkin lymphoma. The clinically meaningful improvement in PFS has continued since the primary analysis, reflecting the durable benefits seen with the ETCS regimen. Notably, We also saw fewer second malignancies and more pregnancies in those who received etc. plus ABD versus those who were treated with ABD. We are pleased with these aspects of the data in a population of generally young patients with FEMS. Going forward, we continue to see multiple opportunities for etc. and are advancing trials in Hodgkin lymphoma, PTCL, and DLBCL. Most recently, we have begun enrolling a trial evaluating encephalus as an immunomodulatory agent in combination with Keytruda in solid tumors. Turning now to PADSF, full results from the EV301 trial and cohort two of the EV201 trial, both conducted in patients with previously treated metastatic urothelial cancer, will be presented tomorrow in oral presentations with ASCO-GU. The Phase III EV301 data demonstrated a clinically meaningful and statistically significant 30% reduction in the risk of death among patients who received PADSED compared to those who received chemotherapy. In this new era of frequent checkpoint inhibitor use for metastatic urethelial cancer, PADSED is the first drug shown to reduce the risk of death after patients have received a platinum chemotherapy and a checkpoint inhibitor. PADSEV has also shown a clinically meaningful response rate in patients who were ineligible for cisplatin in the metastatic setting and were treated with a checkpoint inhibitor. EB301 and EB201 data will be submitted to regulatory authorities this quarter to support U.S. and global approvals. Another key component of our PADSEV development program is our two-pronged approach to support approval in the first-line metastatic urothelial cancer setting. We plan to complete enrollment of cisplatin ineligible patients receiving PADFEV plus Keytruda in cohort K of the EB103 trial by the end of this year. And if the data are supportive, a supplemental BLA could occur in 2022 after appropriate follow-up for duration of response. We continue to enroll patients into the Phase III EV302 global trial, which includes cisplatin-eligible patients, evaluating PADSAVE plus Keytruda compared to a platinum-containing chemotherapy regimen. As we move PADSAVE into earlier stages of bladder cancer, we and our partner, CELUS, together with MED, recently initiated the Keynote B15 or EV304 trial to evaluate PADD7 in combination with Keytruda in cisplatin-eligible muscle invasive bladder cancer. This trial is in addition to the ongoing trial in cisplatin-ineligible muscle invasive bladder cancer patients known as Keynote 905 or EV303. We are also in advance planning for a trial to examine PADCV administered directly into the bladder in non-muscle invasive bladder cancer patients. Lastly, since the launch of PADCV, we have continued to monitor the safety of our products in clinical trials and in the post-marketing setting. As a reminder, Nectin-4 is expressed in the skin in rashes common, but is generally mild and reversible. Severe rashes, however, do occur, and are described in the current U.S. prescribing information. Severe cutaneous adverse reactions including fatal cases of Stevens-Johnson syndrome and toxic epidermal necrolysis have occurred in patients treated with PADSET in the post-marketing setting and during clinical trials. With patient safety being our highest priority, we are communicating the occurrence of these rare events via a letter together with updated recommendations to healthcare providers who may treat patients with urothelial cancer. We are also working with the FDA regarding updates to the U.S. prescribing information to reflect these events. The overall benefit-risk balance remains favorable for the use of PADCV in approved indications. PADCV provides significant benefit in a high unmet need population with metastatic urothelial cancer, which is further supported by our most recent data showing improvement in overall survival in the indicated population. Moving on, at the San Antonio Breast Cancer Symposium in December, Takaizer was featured in several abstracts. A key presentation provided new analyses from the pivotal HER2-CLIMB trial, demonstrating consistent improvements in progression-free survival, overall survival, and objective response rate, regardless of whether patients were hormone receptor positive or hormone receptor negative. With regard to our clinical development program, we are excited to be expanding our evaluations to Kaiser into earlier lines of breast cancer treatment and into GI cancers. To this end, we are currently advancing eight to Kaiser clinical trials, of which five have registrational intent. Now, I would like to turn to one of our late stage programs, to Sotomabvidotin. For women with metastatic cervical cancer who progress on first-line treatment, standard therapies typically have low objective response rates of less than 15% and median overall survival ranging from six to nine months. The innovative 204 trial demonstrated clinically meaningful durable responses with an ORR of 24% and median duration of response of 8.3 months and are the pivotal data included in the recently announced BLA submission. We are motivated at the prospect of a fourth approved medicine that could make a meaningful difference to metastatic cervical cancer patients with such a high unmet need. Moving on to Loduratuzumab vedotin, we are working with Merck to accelerate the development of LV, both as a monotherapy and in combination with Keytruda. Our development program includes trials in triple negative and hormone receptor positive breast cancer, as well as a basket trial in eight other live one expressing solid tumors. We are making progress on optimizing the dose and schedule of LV and have extended the weekly schedule evaluation to the combination of LV with Keytruda. Turning now to our earlier stage pipeline, we have in the clinic three novel ADCs, two of which use our vedotin payload, and four effector function enhanced antibodies using our SCA technology. Our most recent drug to enter phase one is our novel ADC, SGN-STNV. This targets silyl Thompson-Nouveau, a carbohydrate antigen which is highly expressed across multiple solid tumors. I would now like to summarize some of the important upcoming milestones that we are looking forward to in 2021. Beginning with regulatory, we have just submitted the TB-BLA and look forward to working with the FDA on the application. Additionally, we look forward to hearing from regulatory authorities in Europe on our TUKAISA marketing authorization application. And PADSEV will be submitted to regulators in the US, Europe, and Japan by the end of this quarter. Moving to clinical trial activities, we expect to complete enrollment in the pivotal cohort K of the PADSEV EV103 trial and the pivotal TUKAISA Mountaineer trial by the end of 2021. We have opened the innovative 301 global confirmatory trial, and we have the potential to initiate several other pivotal trials across our pipeline in 2021. Finally, we plan to have multiple data readouts this year. This includes data from LV and multiple phase one programs such as SEA CD40, as well as data from TB in solid tumors other than cervical cancer. We also plan to submit multiple INDs for novel product candidates during the course of the year. I look forward to sharing further details and developments as the year progresses. Now, I'll turn the call back over to Clay.
spk03: Thank you, Roger. I'm proud of the remarkable progress we have made as a company over the past year, despite the challenges of COVID. We have set the stage for CGN's next phase of innovation and execution in and the company has never been stronger and better positioned for growth. We have an expanding commercial portfolio, deep pipeline, broad geographic footprint, powerful partnerships, and a focused strategy. This will, in turn, increase our ability to reach more cancer patients globally who need lifesaving therapies. I would like to thank everyone listening to this call for your continued interest in C-GEM and your ongoing support. Operator, Please open the line for Q&A.
spk11: Thank you. And we will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. And at this time, we'll pause momentarily to assemble the roster. And our first question today will come from Ken and Mackie with RBC Capital Markets. Please go ahead.
spk10: Hi, thanks for taking the question and congrats on the progress in 2020. What a year. Maybe just on the guidance for Kikiza and for PADSEV, Just wondering if there's anything you can comment around what is based into that in terms of indication expansion or geographic expansion or whether that's all upside and that's just based on the current indication. Thank you.
spk03: Sure. Ken, thanks for the question. Can you hear me, Ken? Yep, sure, Ken. Okay, good. Just want to make sure. You know, you asked questions about Takaiza and PADSEV. First of all, we're really excited that we have three approved drugs. And, you know, our launch for both PADSEV and Takaiza has been largely through either largely or all through COVID. So we've had to come up with a new way to launch drug. We, you know, on PADSEV, you know, we're now standard of care for advanced urothelial cancer patients who've received platinum and And so we're in very good shape with that. We've had great progress. Chip, would you like to give a little bit of color on the guidance and what it really reflects? Sure, Clay. So we're monitoring ongoing changes in the marketplace. We're seeing a move of PD-1 and PD-L1 utilization into the front line, which in essence has expanded PADSEV's treatable patient population. So that's just a key driver for us in 2021. With regards to Kaisa, we continue to see increased utilization in both patients with brain metastases and patients without. So we're really focused for 2021 promoting the full breadth of the label that we have.
spk11: And our next question will come from Jeff Meacham with Bank of America. Please go ahead.
spk04: Afternoon, guys. Thanks for the question. I just had a couple of quick ones. Roger, when you look at the pad seven first line opportunity from cohort K, what's the normal duration of response from chemo that you'd expect? And are there ways to win, let's say, on an equivalent or but perhaps better tolerability? And then for Todd or Jeff, just also on guidance, just wanted to ask how much of a continued headwind from COVID is reflected, and is there a way to quantify it or at least, you know, tease out which products could be affected? Thank you.
spk03: Jeff, thanks for both of the questions. Let's start with Roger talking a little bit about the frontline impact. PADSEV story where we have actually two frontline trials, but I think Jeff is focused on score K, but Roger, you can discuss what you'd like to on that frontline trial basis.
spk09: Sure. Yeah. Thanks. And thanks for the question, Jeff. It's an interesting one. So as you know, the data we've generated with PADSEV and Keytruda is remarkable. It is, of course, a single-arm trial. It's 45 subjects, but we have a response rate of but it's substantially better than anything one could generate with standard of care. The information around... So I think our expectation, our hope, is that there won't be equivocation on the ORR. Obviously, the data has to play out. With regard to durability, what's really important, as you know, is when you give a PD-1 inhibitor, it's one of the absolute hallmarks of durability. So as high as the ORR is in the data-generated states... The long-term outcomes, such as durability of response and progression-free survival and OS, all are equally remarkable. With standard chemotherapy, PFS is measured in a sort of seven-month period. I don't have a specific number for DOR for you because it's not often reported, but it's hard. Again, if we can recapitulate even to a reasonable degree the data we've generated so far, I think we'll have a compelling story to tell.
spk03: And then on the guidance front with, you know, Jeff, you know, you're asking a little bit about, you know, headwinds potentially with COVID. And certainly, you know, every company would be remiss to say everything is perfectly normal, you know, with COVID there. I mean, there was a big article in Fierce Biotech, I think within the last two days, about how oncology clinical trials are 60% down in enrollment. Ours are doing well. We're not 60% down, but I certainly understand the difficulties of running clinical trials during COVID. Also, with guidance, you have patients just coming in to get therapy, whether it's first-line Hodgkin lymphoma or older patients coming in with, for example, bladder cancer. So there's certainly some headwinds, but we've done great, I think, at really getting our exciting medicines out. You know, Chip, would you like to, or we'll start with Chip, and then Todd, if you have something you'd like to add, it'd be great. Chip, any thoughts on, you know, the guidance as per COVID headwinds? Yeah, well, so it's obviously difficult to predict what's going to take place with the pandemic. There's no doubt that it's been a headwind, but I would tell you the teams have adapted well with regard to our promotional efforts. We've altered a lot of the digital mix. that we have from a marketing standpoint, putting an emphasis on that. And so we're pleased with the results that we're seeing so far.
spk12: Yeah, this is Todd. I'll maybe add a couple of thoughts. You know, with respect to et cetera, it's a little bit easier to correlate COVID effect with what's happening in the marketplace. Chip has previously talked about, and we've talked about for a few calls now, that we're seeing about a 15% reduction in the diagnosis rate of frontline Hodgkin lymphoma. We can get to those data through review of things like electronic medical records and With drugs like Tukaiza and PADSA, it's a little harder to pinpoint exact causality. But to Clay's point, I think we're all experiencing a little bit of pain with COVID. Now, with that in mind, I think we're all hopeful that we're just about to get behind this thing. It's hard to speculate on when that might happen, but we're hopeful that as the pandemic resolves that things will come back to normal a little bit.
spk04: Thanks, guys. Thanks, Clay. Congrats on all the progress.
spk09: Thanks, Jeff.
spk11: And our next question will come from Corey Kasimov with JP Morgan. Please go ahead.
spk06: Hey, good afternoon, guys. Thanks for taking the question. I have one on PAT-7. With the product on the market for a little over a year now, curious if you can tell us more into the average number of cycles you're seeing per patient in the real world, kind of how that's evolving, as well as sort of the latest in terms of an annualized cost of treatment per patient. Roger, you mentioned the rash that you've seen and you've alerted doctors to. Is that impacting things in any material way on the commercial front? Thank you.
spk03: Corey, thanks for the question. You know, as far as the average cycles that we're out there with, you know, we aren't – I don't think we've really discussed that. I mean, we've discussed, like, how long in general we treat people, but it's really different for a lot of patients. and the annualized costs. So, have we given some information on that? Chip, would you like to talk a little bit about, you know, roughly the cost for patients with PAT-7? Clearly, this is not in the front line. This is in the relapse setting, which is our current label. So, Chip, do you have any comments on that? Yeah, I do, Clay. So, if I were to just to kind of ballpark net price associated with this, reflecting gross to net and discounts that are given associated with it would be about 90K, $90,000 per patient. Yeah. So thank you. So that's about right. And so, you know, when people ask me, I usually am somewhere in that 90 to 95,000. So it's about really where we are. It depends on the patient and their size, et cetera. On the question you have on the rash, you know, we, in our initial USPI, we described skin reactions, including some that are severe. And Nectin-4 is a great target. Nectin-4 binds to tumors like crazy, especially urothelial tumors and some other ones that we're screening. And you'll hear more about that about our basket study. But it also binds like almost every antibody. It has some normal tissue cross-reactivity. And so we've known about the skin. And, you know, there's some patients that get rash, and we have a section in the warnings and precautions. So the doctors are well aware of what this is. And so we call it out and, you know, most of the time it's nothing to write home too much about. Sometimes it gets more severe. We think that PADDF has a very favorable risk benefit. And we've shown that through overall survival in the 301 study, which we'll be presenting to David tomorrow. So that's something really to look forward to. And when you see an OS benefit, you know, in rapid control of the disease, you know, you have to weigh that against any of the side effects of any drug. And, you know, we think that doctors are well aware of this, are used to using this. And, you know, having the side effects that almost every cancer drug has is the goal is really to make sure that doctors are aware to try to put it in the best light so that they can watch it. And, you know, if there's any, you know, anything happening with a patient, they could, you they could manage it correctly or hold drug or do whatever they need to. And that's the case for all of our drugs because, you know, looking at patient safety is number one issue. I don't know if that answered your question. Roger, do you want to put in any thought on this about?
spk09: No, sure. And I think, you know, Corey's question around does this actually impact, you know, duration of therapy, I think Clay has made the right points, which is rash does occur. It's generally mild and transient. and does not meaningfully interfere with therapy. For these very rare events, obviously the drug needs to be discontinued. So any bad reaction would require discontinuation, but the frequency of those events is low. So I don't think we believe that this changes in any way the way PADC is being used or the length of therapy that it's currently used at. Okay. Thank you. Appreciate it.
spk11: And our next question will come from Salvine Richter with Goldman Sachs. Please go ahead.
spk01: Good afternoon. Thanks for taking my question. Given the guidance for PADSF only includes on-label use, could you help us understand what the incremental market share will be when the additional indication comes on board or indications come on board this year?
spk03: Salvine, thank you for the question. And, you know, we have two submissions. The first one is what we call cohort two, which is the more frail and weak patients. These were the cis-ineligible patients. And then the second cohort of patients, or the second study that we report is called our 301 study, which is our global study. Roger can talk about both of those trials and maybe what they mean. We put out the top line data. Tomorrow we'll be at ASCO-GU. It just so happens it's tomorrow. We wish we could tell you more today, but we need to save it for the presentations at the conference, you know, by the investigators. They deserve, you know, the right to prevent this. So we're sorry it ends up to be tomorrow, but we'll announce, you know, the full data tomorrow and all that. So look for that and we'll prevent this. So maybe Roger could give you just a little color about these two trials. And then, you know, Chip, you can maybe talk, you know, a little bit about what you think would add to market here and, you know, manage, you know, balancing what docs could be using off-label for what any new label could be doing. So, Roger, you want to start and kind of outline this?
spk09: Sure, sure. So, Salvi, the randomized trial, EV301, is – essentially a recapitulation of cohort one. So it's the same population patients who've seen a platinum therapy followed by a PD-1 or a PD-1 inhibitor. And the important outcome is that overall survival is improved against standard chemotherapy. And that standard chemotherapy is obviously suboptimal in terms of its outcomes. I think we're really excited by that data. It is complete affirmation of the value that PADSET can bring. to this population. And obviously, physicians will react differently in terms of level of evidence. Those who believe that an overall survival signal is required before using a drug may be compelled by this, although we think we already have more than enough efficacy data to support PADSED's use. With regard to cohort 2, it is a different population. It is an older population, a more frail population, There is a proportion of patients, obviously, who at the time of their initial therapy for metastatic disease are deemed cisplatin ineligible. It's around about half the population are generally cisplatin eligible. And then the decision is made to use a PD-1 or a PD-1 inhibitor rather than an alternative agent like carboplatin or some of the other chemotherapies. So there is a population that clearly gets treated like that. And effectively, that PD-1, PD-L1 is a first-line treatment. And then the data that you'll see tomorrow and hopefully you'll find compelling does demonstrate that PAD-7NAT situation produces excellent response rates and very durable outcomes. including overall immune durational response outcomes. So the exact size of that population I think may be quite difficult to define, and Chip may comment on that. Suffice to say that checkpoint inhibitors are used widely in cancer for good reason, because they make a difference, but we think that we add meaningfully to the sort of armamentarium for physicians as they manage metastatic urothelial cancer.
spk03: Chip, do you have any comments? Yeah, what I would add to that, Roger, thanks, is, you know, I would characterize this as a smaller segment of the population, but nevertheless a meaningful number of patients. You know, and I think it's an important unmet need. Patsy could offer once approved an important option for these patients, and I think that's what we're looking forward to.
spk01: Great. Thank you.
spk11: And our next question will come from Matthew Harrison with Morgan Stanley. Please go ahead.
spk07: Great. Good afternoon. Thank you for taking the question. Chip, I was wondering if you could just comment at all on what we may expect to see this year from either the arbitration or the ongoing patent speech that you have, just in terms of whether you would expect us to hear any resolution of that this year, potentially. Thanks.
spk03: So thanks for the question. So there's a lot of work ongoing with our legal dispute with the DS. I will tell you that, and I will remind you, that's a better way to say it, that we are not a litigious company. You know, more than almost two and a half decades, and this is the first time we've had something like this. So, you know, and so this is not our goal. Our goal is to really make a difference in the life of cancer patients. But, you know, we're compelled to defend our AP and our and our contracts. And so, you know, there are two different things going on. One is an arbitration about a contract, and one is a patent infringement, you know, suit. So, both of those are in play. Both of those are very active. And, you know, there's just a lot of legal activity on it. I'm not an attorney, so I can't describe it all to you, and it's confidential, but it is not sitting still by any stretch. And so things are moving along well on that. I really hope that there is some resolution on this this year, but I can't promise you that. I really don't know how fast arbitrators work and courts work But, you know, I certainly would love to see this effort be completed at some point. We feel we have a fantastic case. I mean, to us, it's a straightforward case. And, you know, it's something that we think that, you know, we deserve value. And, you know, and so we'll see what happens. But thank you for the question. And please stay tuned. You know, as soon as we have something to say. You bet you will be announcing it.
spk11: And our next question will come from Michael Schmidt with Guggenheim. Please go ahead.
spk08: Hey, guys. Thanks for taking my questions. I think I heard you mention CD40, one of your earlier stage programs with updates here. And I think we've already seen some interesting early data at your R&D day last year, but just curious if you could help us with expectations in terms of the data disclosures this year and how that might inform things.
spk03: Sure. It was hard to hear you, so I'll repeat the question for anyone who didn't hear. He asked about what we call SEA CD40, which is a drug that sometimes I just call S40, but it's not an antibody drug conjugate. It is an effector function enhanced antibody through our SEA technology, which basically through manufacturing very elegantly and simply It competitively inhibits the terminal pucose from being added to an antibody, and it makes the antibody have some extraordinary properties, which can be really helpful if you're looking at depleting tumor populations. And so it's not an ABC, but it's an empowered antibody by any other way of looking at it. And I talked about it to say that, you know, I have interest in this. And so usually I don't, as you know me for a long time, I usually don't bring up drugs that I don't really have interest in. And, you know, certainly we've developed a number of drugs that haven't made it past the you know, early trials. And I think S40 is a very interesting drug. We have committed to presenting data on that this year. So that's where we are on it. I really, you know, the data will be in pancreatic cancer, where we've been focused on. I am excited to complete the work. You know, one of the things with pancreatic cancer, and if you look historically at panc It's been a hard disease to treat. A lot of patients don't know they have the disease until they're pretty far along. It's different than some of the diseases which have obvious symptoms that you could see until it's too late. So unfortunately, pancreatic cancer is a poorly treated disease that really needs new medicines. And so that's one of the exciting things I have because we have such a big interest in making a difference in patients' lives and have had for a couple decades now. that pancreatic cancer has always been a tough disease to treat. So we're excited to see if we can make a difference in these patients' lives. And, you know, the early data was very interesting, and we, you know, I mentioned it at one or two calls that I was interested in. But if you look historically, there's a lot of times in pancreatic cancer where you see some early data and hints, and then, you know, folks do larger studies, and it doesn't pan out. And so that's something that, you know, if you don't learn the lessons of history, you're doomed to repeat them again. So we certainly have learned that. We've watched it. And so we took some very exciting, you know, interesting, exciting early data, and we've expanded it pretty dramatically to try to get a really good handle on, you know, what responses are, what's the duration, you know, maybe even an early way of looking at, you know, does this impact survival? So to see as best as we can. what the data means. And then, you know, when we report the data, you know, we also are, as we look at the data and report the data, the question really is, what happens next? And, you know, I'm hopeful that when the data come out, the data is robust and it's exciting, and we decide to go into a pivotal trial. And I don't know yet. We're not announcing that. We're not guiding. But, you know, your question was, what should we look for? Roger, do you have any other thing you want to mention about, you know, what they should look for?
spk09: I think that just to sort of repeat, the scientific hypothesis we're testing is a strong one. There's good preclinical data. You know, the combination of a CD40 agonist, which we have had in the clinic, we already had evidence of single agent activity, you know, in some other diseases. But in this construct, we are combining it together with the frontline chemotherapy, which is a Braxane, sort of gemcitabine-based chemotherapy together with a PD-1 inhibitor. And those three interventions, those are all sort of orthogonal. Kill the cancer cell with the chemotherapy. Stimulate antigen presentation with the CD40. and other things, by the way, from a mechanistic perspective, and then make sure that the brakes are taken off any of the T cells. So it's a very strong scientific hypothesis. As Clay said, we've, you know, enrolled a good number of patients. We will wait for the data to read out, and, you know, we'll make our determination at that point as to what our next steps could be.
spk05: Great. Thank you.
spk11: And our next question will come from Gina Wang with Barclays. Please go ahead.
spk14: Hi, this is Sheldon on behalf of Gina. Thanks for taking our question. Just two very quick ones on the guidance. One is on PESA. In your prepared remarks, you mentioned that considering PESA's current high market share, could you comment on what range of market share are we talking about, like 40% to 60% to 80% or even higher? And another one is the guidance. What type of OUS revenue are you assuming in this guidance, or are we talking about predominant US sales for 2021? Thanks. Yeah, so thank you for the question. One is regarding the NGRA.
spk03: On the specifics of market share percentage, that's not something we usually talk about because, you know, once you start going into percentage in every quarter, everyone's asking what's your percentage and all that. And just it's kind of, you know, we report our numbers and that's really what's important. And so we feel it's standard of care. And, you know, Chip, if he wants to, can make a comment on the market share and, you know, what doctors think of this and, you know, the concept. On Chikaza with the guidance, I think I'd like Todd to make a comment on, you know, you asked a question about outside U.S. revenue and what's included in guidance. So why don't we start there with Todd. Todd, why don't you start on the guidance for Chikaza?
spk12: Sure, Gina. Thanks for the question. So the vast majority of our Tecaza guidance is U.S. sales. And, you know, we do have approvals in a few other countries under Project Orbis. And, of course, we're looking forward to approvals broadly in Europe and starting to do that next year. But, you know, the vast majority of our guidance for Tecaza is U.S.-based.
spk03: Okay, and then going back to the market share and stuff like that, Chip, do you want to give a little color on that? Yeah, thanks, Clay. So, you know, as a standard of care, I would say that we're well positioned in 2021, you know, to intersect at a very important point in these changing market dynamics. I think you're going to continue to see the PD-1 and PD-L1 utilization increase in frontline, and I think that's going to put PADSF in a favorable position.
spk14: Got it. Thanks, Dimitri.
spk11: And our next question will come from Andy Hishai with the letter.
spk02: Okay, so thanks for squeezing me in, and congratulations to, you know, everyone at CDID for a banner year in 2000. So I have a question in kind of early stage bladder cancer for pets. and it seems like you guys basically encroached the whole bladder cancer treatment paradigm everywhere overnight. So specifically in the non-muscle invasive bladder cancer, You know, there have been some challenges associated with BCG supply. I'm just wondering, for the intravesicle use, are you looking at, you know, beyond BCG non-responsive, are you looking at, you know, patients who are not suitable for BCG as well, just to kind of broaden the opportunity there?
spk03: Yeah, thank you for the question. You know, we're really excited about that. in all aspects of bladder cancer, like you say, whether it's metastatic, muscle invasive, where we have a lot going on, as Roger talked about, and our next area that we're going after is non-muscle invasive. But we've done a lot of work on there. We haven't started the trials yet. We're well aware of the BCG challenges. Roger, do you want to give a little color on intravascular use and what we're thinking about?
spk09: Yeah, and it's a great question. Obviously, we're just beginning, and we haven't disclosed any of the clinical trial plans, but we are, you know, as we said in prepared remarks, we are in advanced planning. We think the profile for PADSEV, you know, could be very favorable based on minimal systemic exposure and activity directly into the bladder. The place to start, as you say, for all programs is in BCG non-responsive. But if we find PADS is active in that population, we would obviously move or make plans to move into earlier lines of therapy. Again, it's a balance of how much benefit can we bring versus how much risk do we bring to bear on the circumstance. And until we've generated the data, we won't know. But I can tell you aspirationally, we would like to have PADSF positioned, if we can, in non-muscle-invasive beta cancer, wherever it's appropriate to address the unmet needs.
spk03: Okay, thank you very much.
spk11: And our next question will come from Andrew Behrens with SBB Learing. Please go ahead.
spk13: Hi, thanks. I was wondering if there's a potential for increased rates or increased severity of skin rash when you give PADSEV with checkpoints versus PADSEV alone?
spk03: Thank you very much for the question on that. We're in trials now, as you know. Roger, can you comment as to you know we have some data that's actually been presented on this but you know we have ongoing trials and so perhaps talking about anything you've seen in the army and the data that would be fair game roger sure so so andy as you know we we believe we're confident in and we believe that the combination of pet says
spk09: Plus Keytruda has tremendous potential in bladder cancer, not just in metastatic, but in the muscle and vasus circumstance as well. And there is lots of scientific reasons to believe that a Bedokin-based ADC may be particularly powerful when it's combined with a PD-1 inhibitor. From a safety perspective, obviously all clinical trials that we run, we monitor safety carefully. There are no changes to any of our plans with regards to what we are doing in our clinical trials. The data we presented to date, which is around 45 subjects, we did report, you know, overall skin rashes and grade II rashes.
spk03: Roger, I just lost hearing you. Can you guys hear me?
spk12: Yeah, I think it's really stronger.
spk03: Yeah. Okay. Well, we lost Roger. so um you know andy are you still on yes i'm still here yep okay did you get enough of an answer from roger uh i think he was just about to talk about the data in the 45 patients so yeah unfortunately yeah um yeah so roger got cut off you know um our data in the patients did not show anything that was uh that was obvious to us that there'd be a problem at all. In fact, it showed the opposite. It showed that, you know, the patients did incredibly well on the two drugs together. And, you know, we got breakthrough designation and we're, you know, been enrolling a lot of patients in both the accelerated trial and the global trial. And so where we sit now, we're pretty darn excited about on this, and I don't know any reason that we would be inhibited from going forward, if that's what you're looking for.
spk13: No, I was more interested in just if the rash is worse or more frequent and it could be more of a commercial issue.
spk03: Yeah, we have not seen that. In the trial that we presented on, we have not seen that.
spk13: Okay.
spk03: We don't see any potential limitation in commercial with a combination at this point. Obviously, that's why you do big studies and you study these. So, you know, we'll have to see in the future. But from what we've seen to date, we've seen no issue with going full commercial with that.
spk11: Thank you.
spk03: It's taken up very well. I mean, it's really exciting to see a drug become standard of care in a metastatic setting pretty quickly. Thank you.
spk00: And our next question will come... Okay, operator, we have time for one more question.
spk11: Absolutely. And that question will come from Jay Olson with Oppenheimer. Please go ahead.
spk05: Oh, hey, congrats on all the progress, and thank you for the update. I appreciate your three-pillared strategy and wanted to ask you about your plans to maximize the global potential of your portfolio, which you've traditionally done through partnerships outside the U.S. And now, since you're building a Tukai team in Europe, Do you envision eventually building a global infrastructure and taking your early-stage pipeline all the way from development through global registration and commercialization independently?
spk03: So, Jay, first of all, thank you for the question. Thank you for noticing that we have expanded on the backs of Takaiza, the back of Takaiza, to include greater Europe, which is quite a lot of countries. And our team there is fantastic. just ready to go. We're really excited to start getting this out to patients in need and working with docs and all that. So hopefully that's soon. But, you know, as far as the future path there, you know, what I would say is it depends. And I don't mean to be ignoring your question. It is not that easy for U.S. biotechs or for that matter U.S. pharma sometimes to do a lot of work in, you know, let's say certain parts of Asia, especially the two biggest markets, you know, Japan and China. And so it is something that we're looking at closely as to what we would do with additional drugs and whether we would consider putting in Asia, for instance, at some of the big markets. And so that's something we're talking about. I don't want to tell you yes, we're going to do it or no. We do have great partners. We know all the best, you know, partners and distributors in different territories, and whether we want a partnership or distribution is something you have to look at everywhere. But I'm really glad that we're going broader in a commercial way, and I hope as part of our pillars that we continue to broaden out our global reach. Great. That's super helpful. Thank you.
spk11: And this concludes the question and answer session. I'd like to turn the conference back over to management for any closing remarks.
spk00: Okay. Thank you, operator, and thanks, everybody, for joining us this afternoon. We look forward to staying in touch, and I hope you have a good evening.
spk11: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your line at this time.
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