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spk17: And welcome to the CJEN fourth quarter and full year 2021 financial results conference call. All participants will be in 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 star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Peggy Pinkston, Senior Vice President, Investor Relations. Please go ahead.
spk16: Thank you, Operator, and good afternoon, everyone. I'm pleased to welcome you to CGIN's fourth quarter and full year 2021 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 today's call will be Clay Segal, President and Chief Executive Officer, Chip Romp, 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 2022 financial outlook, anticipated product sales, revenues, costs, and expenses, and potential clinical and regulatory milestones, including data readouts, regulatory submissions, and potential marketing and reimbursement 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 quarterly report on Form 10-Q for the quarter ended September 30th, 2021, filed with the Securities and Exchange Commission, and the company's subsequent reports filed with the SEC. And now I'll turn the call over to Clay.
spk09: Thank you, Peg, and good afternoon, everyone. Today, we reported $1.4 billion in 2021 net product sales, a 38% increase over 2020, driven by solid growth across our commercial portfolio. Royalty revenues increased to $151 million in 2021, a 19% year-over-year increase, reflecting sales growth by our collaborators. Our total revenue guidance for 2022 is $1.67 to $1.75 billion, excluding TIDDAC. With a strong balance sheet and a cash position of $2.2 billion, we are well positioned to advance our pipeline through internal and external investments. Todd will walk us through our 2022 financial guidance. But first, I'd like to begin by reflecting on another exceptional year for CGEM. We achieved important milestones in 2021 and continued to expand our global infrastructure and portfolio. I'll begin with our commercial products. At Cetrus is a US standard of care in frontline Hodgkin lymphoma and peripheral T cell lymphoma and forms the foundation of our core business from a revenue standpoint. Etcetera has received approval in more than 75 countries, and we and our partner, Takeda, continue to provide this important drug to patients in need. Notably, last week, we announced that the Phase 3 Echelon 1 clinical trial demonstrated a statistically significant improvement in overall survival in advanced Hodgkin lymphoma patients treated with Etcetera plus chemotherapy in the frontline setting. Over 30 years ago, ABVD was established as standard of care for treating Hodgkin's disease, and almost 15 years ago, data regarding intensified VACOP was initially released. We are thrilled that ETCETRIS plus ABVD has now improved overall survival, and we believe these groundbreaking data further demonstrate ETCETRIS' clinical value and importance in this disease. PADSEV is a first-in-class ADC which has become a standard of care in the U.S. for previously treated metastatic urothelial cancer. PADSEV has been broadly adopted by U.S. oncologists to treat more than 6,500 patients to date. Last year, PADSEV received regular U.S. approval and was also granted a cisplatin-ineligible second-line indication. Together with our partner, Astellas, in 2021, we secured approvals in Canada, Switzerland, Israel, and Japan. We are progressing regulatory submissions across Asia Pacific and the Americas. PATSEP received a positive CHMP opinion in December 2021. Recently, the European Commission decision-making process was paused for additional CHMP questions related to severe skin reactions in a French compassionate access program. This side effect is described in the USPI and, since launch, has been well managed by U.S. prescribing physicians. We believe that the risk-benefit profile of PADSEP remains unchanged. we are committed to working with European authorities to get this important drug approved for urophilial cancer patients. Beyond these global regulatory activities, we are advancing a robust clinical development program with PADSEV as monotherapy and in combination with Keytruda in earlier lines of therapy. We completed enrollments of EV103 cohort K and expect data in the second half of this year which could potentially support accelerated approval in the U.S. in 2023 for first-line metastatic neurothelial cancer. We are also exploring earlier stages of bladder cancer, which represent larger market opportunities. In muscle-invasive bladder cancer, we will report neoadjuvant monotherapy data at ASCO GU later this month, and we are now enrolling patients in a trial for non-muscle-invasive bladder cancer. Finally, we are conducting a basket trial evaluating PADSEP and other NECTIN-4-expressing solid tumors. Tucaisa is a best-in-class HER2 tyrosine kinase inhibitor with broad potential in HER2 cancers. Overall survival data and inclusion in key treatment guidelines reflects its clinical value in second- and later-line HER2-positive breast cancer patients with and without brain metastasis. UKISA is approved in 36 countries, and we have commercially launched in the U.S., Germany, France, Switzerland, and Austria. We are working to secure reimbursements and are planning launches in additional European countries over the course of 2022. We recently announced the appointment of Lee Heeson as Executive Vice President, Commercial International. We look forward to Lee's contributions towards our continued ex-U.S. expansion. Our strategic partnership with Merck extends to Kaiser's reach outside of the US, Europe, and Canada. To Kaiser's broad clinical development program includes HER2-positive breast cancer, colorectal cancer, gastric cancer, and other HER2-amplified or mutant tumors. Notably, we expect data from the phase two Mountaineer trial in the second half of this year, which could potentially support accelerated FDA approval in colorectal cancer in 2023. CGEN's fourth approved product is TIVDAC, which we launched in collaboration with GenMAP. TIVDAC, which is a tissue factor targeted ADC, was approved for recurrent or metastatic cervical cancer patients with disease progression on or after chemotherapy. It represents an important new drug in a disease that is characterized by low objective response rates and poor outcomes. TIVDAC's clinical development program is designed to support global regulatory applications and maximize its future potential in cervical cancer and other solid tumors. As we look to expand TIVDAC in cervical cancer, we recently presented promising combination data in earlier lines of treatment, which could lead to use in much larger patient populations. In 2021, we also drove key advancements across our deep and diverse pipeline. For example, we in-licensed the late-stage novel ADC, Decidimab-vidotin, which utilizes a high-affinity HER2 antibody with enhanced internalization compared to Trastuzumab. DV received conditional approval in China for third-line gastric cancer and recently in second and later lines of metastatic urothelial cancer. Our clinical development program prioritizes model therapy and combination approaches in breast, bladder, gastric, and other cancers. DV utilizes our vedotin-based ADC technology, and leveraging our expertise, we are working to maximize its development, potential value, and global reach. Turning to our earlier stage work, we recently initiated two trials for two novel ADCs. SGN PDL1V and SGN B7H4V. And we have also submitted an IND which just cleared for SGN ALPV. We are developing new ADC technologies in order to widen the therapeutic window of this exciting class of drug with a focus on improving tolerability. In addition, we have four programs that use our proprietary sugar engineered antibody technology. Overall, we are advancing more than 17 programs across our pipeline and approved products in a range of solid tumors and hematologic malignancies. Next, I want to provide a brief update on the Daichi Sankyo litigation. Recently, the arbitration hearing record was reopened by the arbitrator to consider additional evidence. As a result, the decision may occur after the first quarter of 2022 as previously anticipated. Our 2021 achievements have helped to bolster our resilient core business and the solid foundation we continue to build upon. We expect to achieve many milestones in 2022, including important clinical data readouts, global regulatory and commercial progress, and advances across our pipeline. which will help drive future growth. As we look to deliver continued innovation and develop transformative therapies, we remain focused on three key areas. First, we are working to maximize the potential of our approved portfolio through exceptional commercial execution, clinical development, and strategic partnerships. We've expanded our commercial portfolio from one to four products in under two years, and have treated over 110,000 patients to date. Robust clinical development programs will generate the potential for future label expansions and opportunities. Second, we are advancing our deep and diverse pipeline of assets as we look to bring drugs five, six, and seven to market in the coming years. We believe our ADC leadership and R&D expertise in empowered antibodies provides us with a competitive advantage when it comes to expanding and progressing our pipeline. Finally, we are well positioned for continued innovation and growth, having built and optimized our infrastructure and capabilities. Our expanding geographic footprint and over 50 strategic partnerships maximize our ability to reach patients across the globe. Our strong corporate development team and significant financial strength allows us to execute upon deals that will further accelerate our trajectory. Next, I'll turn the call over to Chip, who will provide an update on our commercial performance. Then, Tata will discuss our – after that, Roger will detail our clinical development activities and pipeline.
spk08: Chip? Thanks, Clay. The commercial team delivered another strong quarter to close out a very successful year for CGET. We've effectively scaled and executed in our efforts to maximize the potential of our commercial portfolio of four products. At Cetrex, fourth quarter 2021 sales were $176 million, an 8% increase over the fourth quarter of 2020. Our focus remains on driving share in frontline stage three and four Hodgkin lymphoma. We were pleased to see the recent update to the NCCN treatment guidelines that recognized the significance of the five-year Echelon 1 data. We are excited to now have overall survival data from the Echelon 1 Phase 3 study, and we will continue to monitor uptake in the frontline setting. Moving on to PADSEV, fourth quarter 2021 U.S. sales were $93 million, a 34% increase over the fourth quarter of 2020. We have now seen broad adoption of checkpoint inhibitors as maintenance therapy for patients in the frontline metastatic setting, which has helped PADSF become the preferred standard of care in the second-line post-maintenance setting. In addition, the indication for patients who are ineligible for cisplatin containing chemotherapy continues. to represent a meaningful option and a modest incremental growth opportunity. We expect growth in 2022 to be driven by existing indications and look forward to potentially promoting to an additional U.S. pass-up label in the frontline metastatic urothelial cancer setting next year. Moving on to the Kaiser, fourth quarter 2021 sales were $94 million, a 53% increase over the fourth quarter of last year. with growth coming from both the U.S. and Europe. Tecaisa remains the most utilized product in second and later lines in the U.S. in patients with brain mets. Updated overall survival data in these patients that recently was presented at the San Antonio Breast Cancer Symposium has been well received and is a promotional focus. We are monitoring the evolving HER2 metastatic breast cancer treatment landscape, and we have incorporated this into our annual revenue guidance, which Todd will detail shortly. The KISA sales in Europe for the quarter continue to grow, and we look forward to gaining reimbursement in additional countries in 2022. We are pleased with TIVDAC sales of $6 million for the first full quarter since approval, and launch is going as planned. We are navigating the ICARE requirements and have gained valuable insights that are allowing us to enhance our educational efforts. Although the initial indication represents a modest opportunity, TIDVC is an important treatment option, and early feedback has been positive. With that, I'll turn the call over to Todd.
spk07: Thanks, Chip, and thank you, everyone, for joining us on the call this afternoon. Our financial results reflect significant advances made across the business in the past year. Today, I'll summarize our financial results for 2021 and then discuss our outlook for 2022. Total revenues were $430 million in the fourth quarter and $1.6 billion for the full year in 2021. This included net product sales of $369 million in the fourth quarter and $1.4 billion for the full year, representing an increase of 38% over the year in 2020. This reflects growth in product sales across our portfolio, and particularly for Takai's intensive, Royalty revenues were $46 million in the fourth quarter and $151 million for the year in 2021. The 19% year-over-year annual growth in royalty revenues is primarily driven by increasing sales of Etcetera by Takeda and, to a lesser degree, sales of Polibee by Roche and BlendRep by GSK, both of which are ADCs that utilize cGen technology. Collaboration revenues were $15 million in the fourth quarter and $38 million for the full year in 2021. 2021 collaboration revenues decreased as a result of $250 million recognized in the fourth quarter and $975 million recognized for the full year in 2020. These amounts related to the Ladera-Tuzumab-Vidotin and Tekiza collaborations with Merck that we entered into in 2020. Cost of sales was $87 million in the third quarter and $312 million for the full year in 2021. This included product cost of sales and royalties for each of our brands, the gross profit share due to our collaborators, and non-cash amortization of acquired technology costs for Tecaiza. R&D expenses were $304 million in the fourth quarter and $1.2 billion for the full year in 2021. This is an increase over 2020 and included the $200 billion upfront payment to Remagen for in-licensing the sitamapidotin, as well as continued investment across our early and late-stage pipeline. SG&A expenses were $211 million in the fourth quarter and $716 million for the full year in 2021. These are increases over 2020 reflecting investments to support the ongoing launches up to Kaiser across Europe, and more recently, the launch of Tidback in the U.S. Next, I'll turn to our financial outlook for 2022, beginning with our revenue guidance. Across our three key commercial brands, we are guiding to product sales of $1.48 to $1.55 billion, representing an increase of 7% to 12% over 2021. Et cetera sales are expected to be in the range of $730 to $755 million, reflecting modest growth while we advance a broad clinical development program intended to secure additional labels. Tab set sales are projected to be in the range of $435 to $455 million. We expect growth in 2022 to be driven primarily by continued utilization within its two current indications. While we expect to report data from cohort K of the 103 trial in the second half of this year, our guidance does not include the impact of a potential label expansion. Tucaisa sales are expected to be in the range of $315 to $335 million. And as Chip mentioned, our guidance reflects the ongoing evolution of the treatment landscape. While we expect to report data from the Mountaineer trial later this year in colorectal cancer, we do not anticipate label expansion in 2022. We continue to engage with individual country authorities to secure broader European reimbursement, which can take up to two years post EMA approval. And since we are still early in the launch of TIDDAC, we are not including sales estimates in our 2022 guidance at this time. Next, we expect royalty revenues to be in the range of $160 to $170 million, primarily reflecting sales of Etcetera's site to CADA in its territories, along with contributions from Polivie and Glen Rep. Finally, we expect collaboration revenues to be in the range of $25 to $30 million. As a reminder, collaboration revenues include our profit share from Stellis' sales of CADSA in its territory. This now includes royalties from sales in Japan and in future years is expected to include a profit share from the EU five. Now I'll turn to 2022 expense guidance. Cost of sales is expected to be in the range of 380 to $420 million. This is driven by increased product sales across all brands and the higher profit share payments to our collaborators. Cost of sales also reflects third-party royalties owed as well as non-cash amortization. R&D expenses are expected to be in the range of $1.2 to $1.3 billion, primarily related to two items. First, investment in clinical trials to further expand et cetera's PADSEV to Kaizen TIVDAC into additional indications. And second, increased investment to advance our earlier stage agents, including more than 13 other programs in the pipeline. We believe that these investments are important to our long-term growth. SG&A expenses are expected to be in a range of $780 to $860 million as we continue to focus on commercial execution to drive growth of our approved products. The guidance also includes investment to support the global infrastructure for the continuing launches of Takaiza in Europe. Non-cash expenses are expected to be in the range of $280 to $310 million, the majority of which is stock-based compensation. Taken together, our guidance reflects our strategy to expand the commercial opportunity of our portfolio and to advance new product candidates. Now I'll turn the call over to Roger, who will highlight our development activities.
spk03: Thank you, Todd, and good afternoon, everyone. I'm happy to share recent clinical development updates for both our approved medicines and our pipeline. I'll begin with Atetras. We are extremely pleased that Atetras, in combination with AVD, has significantly improved overall survival compared with AVVD in newly diagnosed patients with advanced Hodgkin lymphoma. Atetras was shown to reduce the risk of death by 41%, with a hazard ratio of 0.59 and a p-value of 0.009. These data further demonstrate the meaningful difference that Atetras brings to patients, and we look forward to presenting the results at an upcoming medical meeting. In addition, we were recently informed that a Phase III study of Atetras in newly diagnosed pediatric patients with high-risk Hodgkin lymphoma, defined as stages 2B with bulk, 3B, and 4, has met the primary endpoint of event-free survival, as reported by the Data Safety Monitoring Committee. Trial AHOD1331 is sponsored by the National Cancer Institute and run by the NCI-funded Children's Oncology Group. The study compared an atetras-containing chemotherapy regimen to a chemotherapy regimen that included bleomycin. We thank the Children's Oncology Group for their efforts, and we look forward to their presentation of this exciting data at an upcoming medical meeting. At ASH, we presented initial data of a combination of atetras plus nivolumab, edromycin, and dacarbazine in frontline advanced Hodgkin lymphoma. which showed an objective response rate of 93% and a complete response rate of 88% at the end of therapy. We believe these promising results could form the basis in the future for testing this novel regimen in the frontline setting. Later this year, we plan to share results describing a Tetris potential utility as an immunomodulator in combination with Keytruda in solid tumors. We are also testing a Tetris in a Phase II study in HIV patients which will begin enrolling this quarter. Turning to PADSEV, we remain focused on moving this important product into earlier lines of urothibial cancer. In the frontline metastatic setting, we are evaluating PADSEV and Keytruda in two studies, EB103 cohort K, in patients who are ineligible for cisplatin therapy, and EB302, which includes both cisplatin-eligible and ineligible patients. EV103 cohort K has completed enrollment, and we expect to report top-line results in the second half of 2022. The Phase III EV302 global trial is assessing PADSF plus Keytruda compared to platinum-containing chemotherapy, and we are pleased that this trial is projected to complete enrollment this year. EV302 is intended to be a confirmatory trial for cohort K as well as supporting global marketing applications. In muscle invasive bladder cancer, we, together with Estellas and Merck, are advancing two Phase III trials that are testing PADSF in combination with Keytruda as perioperative treatment in different populations. The Keynote B15 or EV304 trial is enrolling cisplatin-eligible patients, and Keynote 905 or EV303 trial is enrolling cisplatin-ineligible patients. Later this month at ASCO-GU, we plan to present the results of the EV103 exploratory cohort H. In this cohort, PADSET monotherapy was given as neoadjuvant treatment of cisplatin-ineligible muscle-invasive bladder cancer patients for three cycles prior to cystectomy. Furthermore, we are pleased to announce that we have begun enrollment into the EV104 trial of single-agent PADSET in non-muscle-invasive bladder cancer. In this study, PADSEV is administered intravesically in BCG non-responsive patients. We are also studying PADSEV monotherapy in a basket trial of high-nectin-4 export data this year to inform our next steps. Turning to Teqiza, we continue to advance our broad development program in breast and GI malignancies, as well as other solid tumors. Today, I will highlight a new study, HER2CLIM-05, which will evaluate to Kaiser in the frontline maintenance setting of HER2-positive metastatic breast cancer. Standard of care for these patients typically includes six to eight cycles of a taxane with a septum and progetta, otherwise known as THP. Once the chemo finds the excellent results obtained with THP, patients remain at risk of relapse and death, including the risk of relapse in the brain. HER2-CLIM-05 randomizes patients who have completed PHP to receive Tukeiza, Herceptin, and Pagela, or Herceptin and Pagela alone. The primary endpoint is progression for the first patients this quarter. In GI cancers, we are awaiting results of a Phase II mountaineer study, which are expected in the second half of this year. The study assesses Tukeiza and Herceptin as treatment for patients with previously treated HER2-positive colorectal cancer. Additional trials are studying Tukeiza in combination with oxaliplatin-based chemotherapy in first-line GI cancers, as well as in combination with Herceptin in a basket trial for solid tumors with HER2 alterations. I'll turn now to TIVDAC, which received accelerated approval in the United States for the treatment of patients as recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. A global phase three trial in cervical cancer, Innovative 301, is currently enrolling in the EU and Asia expand to other regions such as .
spk13: This study is intended to serve as the confirmatory trial in the United States, and importantly, to support global regulatory applications.
spk03: Our next goal for TIVDAC is to move into earlier lines of metastatic or recurrent cervical cancer. And in this regard, we presented combination data from the innovative 205 trial in the first and second line setting at ESMO 2021. This study will be expanded to further investigate additional multi-drug combinations, including TIVDAC . cervical cancer, we continue to study the potential for TIVDAC in other malignancies through an ongoing Phase II trial, Innovative 207. Preliminary data evaluating TIVDAC as treatment of head and neck cancer is being presented later this month at the ASTRO Head and Neck Cancer Symposium in Arizona. Turning now to Desitamab, the dose of DIVI, In the second quarter of this year, we expect to begin enrolling our monotherapy trial in urothelial cancer. We are also focusing on the development of DV and HER2 low breast cancer based on encouraging monotherapy data generated by our partner, Remagen. I'd like to now briefly mention our early stage pipeline. We are evaluating multiple products in phase one clinical trials across a range of solid tumors and hematologic malignancies. We recently reported first clinical data from two novel SCA programs. At ASH, we disclosed initial SCA BCMA monotherapy data that demonstrated an encouraging early safety and efficacy profile in the fifth line plus multiple myeloma setting. In addition, we recently shared SCA CD40 data in combination with chemotherapy and an anti-PD1 in metastatic pancreatic cancer, in which we demonstrated evidence of immune activation in patients with an acceptable safety profile and encouraging anti-tumor activity. Follow-up for survival is ongoing and will inform future development decisions. We are also enrolling a basket trial to assess SCACD4D combinations in other solid tumors, including melanoma and non-small cell lung cancer. In closing, we continue to make meaningful progress with our pipeline, and we look forward to providing you with updates on future calls. Now, I'll hand the call back over to Claire.
spk09: Thank you, Roger. I'm proud of the important milestones we have achieved in the past year, which have set the stage for our future. Our portfolio, proven commercial engine, expanded international infrastructure, and strategic partnerships increase our global competitiveness and maximize the value of our approved medicines. We believe our significant financial strength, active corporate development, robust clinical development, and key 2022 catalysts will continue to bolster our deep and diverse pipeline. We are well positioned for future innovation and growth. At this point, we'll turn to Q&A. Operator, please open the line for questions.
spk17: Thank you. Thank you. 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 speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster.
spk14: Our first question comes from Jeff Mecham with Bank of America. Please go ahead.
spk05: Hey, guys. Thanks for taking the question. I guess the real obvious one is, you know, you guys have talked a lot about all the trends in the fourth quarter and last year, and the guidance for the three main products, you know, one is down year on year, and the other two are just marginally essentially flatline with fourth quarter. So is it I get the need to be conservative, but is there something that we should be aware of as it relates to the competitive backdrop for all of your products or the market itself? Just give us a little bit more detail on kind of the idea behind the guidance and maybe any individual kind of nuances that you'd want to point out. Thanks.
spk09: Sure. Thanks, Jeff. So first of all, we like where we are positioned on all our brands. You know, we have OS data. in three of these brands. The only one we don't tip back is our newest drug, and that's something potentially for the future. These are real drugs. These are not incremental drugs, and they really help patients. And as you know, building brands takes time to build them up. And we have tons of great catalysts coming out for 2022, which we certainly could go over. Our revenue guidance for 2022 is you know, 6% to 11% higher than last year.
spk13: You know, our product sales guidance is 7% to 12% growth over 2021.
spk09: So we're certainly not guiding that as a company we're going down. You know, one point about Kaiser that, you know, if you want to talk about, You know, the guidance is flat to slightly down for Tucaisa. And the rationale for that is cancer in second and later lines. And the product is growing in Europe. But it's an evolving and dynamic marketplace. And with the advent of the AdherQ DBO3 trial, it's likely to have a near-term effect. on our growth, and that's reflected in the respect now near data in the second half of the year to support regulatory submission with potential labels in 2023. So there's a lot that we can do. There's so many other things we're doing with Jucaisa. We have heard to climb O2, as Roger mentioned, soon to start here to climb O5 in frontline maintenance, continued contributions from Europe as we secure reimbursement. So I think the future is very bright for Tukaysa. That's where we are right now. Okay.
spk14: Our next question comes from Yeah, please go ahead. Good afternoon. Thank you for taking my question.
spk15: Could you frame the bladder cancer cohort H data that's coming up in terms of how we should think about what's meaningful here?
spk09: Sure. We're really excited about what we can see with the what we're going to be presenting at ASCO to you. Roger, can you outline a little bit what we are looking at and the context.
spk03: Sure. Thanks, Clay. So the data that we'll be presenting from EV103 cohort H is passive monotherapy in the neoadjuvant setting, and these are folks who are cisplatin ineligible with MIBC, and so they've not yet undergone any surgery. So what this will do, and, you know, when the data is presented, and a better indicator of what PAD-SEV as a monotherapy is able to achieve in this disease state. We're excited to have the data presented, but it is important to just note that the ongoing registration trials that are being run, which are mentioned in the prepared remarks, are focusing on the combination of Keytruda plus PAD-SEV. You know, computer has already shown meaningful activity in this population. When we've shared the PADSET data, there will be an understanding of what PADSET can do, and then some idea of potentially what a combination could produce.
spk17: Our next question comes from Corey Kasnoff with J.P. Morgan. Please go ahead.
spk01: Hey, good afternoon, guys. Thank you for taking my question. I wanted to ask reopening the Daiichi litigation evidence. Can you talk about kind of what this means, the precedent there? And are you able to say what parties submitted the additional evidence?
spk13: Thank you.
spk09: Thanks for the question. So as we said, the arbitration hearing was reopened i just want to repeat this and uh by the arbitrator to consider additional evidence as a result the decision may occur after the first quarter we don't know exactly at this point and you know what's important is for us to say is that legal matters are confidential and they're pending And it's not appropriate for us to discuss them in detail. However, what I will say is we believe that our case is strong. We continue to believe that. We have no change whatsoever in our belief in our case. And this delayed resolution does not change our view that we have a great case.
spk05: Okay. Thank you.
spk17: Our next question comes from Kenan McKay with RBC Capital Markets. Please go ahead.
spk04: Maybe just thinking about the product revenue guidance for 22, can you talk a little bit about net price assumptions here? We've heard more and more that revenue growth is going to rely much more on volume growth than pricing growth, which is a little bit different from – some of the trends for the last 15 years or so. I'd just love to hear how you're thinking about that for 2022 and beyond. Thanks.
spk09: Sure. Thank you, Ken, for the question.
spk07: Todd, would you like to comment? Yeah, thanks, Ken. I'll try to jump in here.
spk13: I think, you know, when you look across the brands, we are projecting volume or will or won't do. with our guidance is really kind of look across each of the brands, you know, look at where we are. For example, with et cetera, this is a drug that's been on the market for a long time. It's an incredible drug that has helped a lot of patients. And we're projecting growth this year because, you know, we think we can continue to
spk07: increased adoption. And, you know, we commented on those data are only out in top line form right now. We're looking forward to presenting the results.
spk13: So, you know, we haven't tried to assume based on that, but it's certainly positive. We see a nice growth here. We continue to see patients with checkpoint inhibitor maintenance therapy in the frontline setting that, you know, fall really nicely into the current labeled indications. And, of course, we've got clinical trials underway to continue to broaden the labels is the longer-term goal.
spk07: And then with Takaise, you know, we've been on the starting to, you know, reach steady state there. Europe continues to grow. But as Chip mentioned in the call, You know, we're also aware that nicely for patients, the treatment that we think is going to continue to be an important drug, and as Roger mentioned, there's a lot of work underway to move it into earlier line common capsula in the HER2 Climo 5 trial setting as therapy.
spk13: And then, of course, the
spk07: the colorectal data, and hopefully that leads to a label next year out of the Mountaineer trial. So, you know, we're really bullish on the drugs. This is a little bit of a year of executing on clinical trials, which is what you've got to do to generate data to support label expansions. And, you know, that's been a stated goal of ours for a long time.
spk17: Our next question comes from Matthew Harrison with Morgan Stanley. Please go ahead.
spk00: Great. Good afternoon. Thanks for taking the question. Thanks for all the comments on the product guidance you've already provided. I guess I was just hoping, aren't you, Kaiza, to ask a bit more specific question. So could you comment so far in 2021 what impact you've seen from the Destiny 03 results for INHER2 and And, you know, have you seen share loss, you know, off-label share loss from an HER2 being used there? And then can you give us some sense of how much of an impact you're thinking this is going to cause in 2022? That would be very helpful. Thanks.
spk09: Right. Well, you know, 2021 is not really where we're predicting the impact. It's really in 2022. Chip, do you want to give a little bit of color on that?
spk08: Sure, Clay, absolutely. It is early to see impact of new data. Moving forward, we do expect to see changes in the market as the market digests the data more thoroughly. As far as the adjustments, those are reflective in the guidance that we've put forth for 2022.
spk17: Our next question comes from . Please go ahead.
spk18: Hi. Thanks, and I appreciate all the color you guys have given. Maybe one on the EMA pause of the PADSAR review. You mentioned that there was a positive CHMP decision. Didn't this include a consideration of the skin rash and Stevens-Johnson syndrome that has been seen previously? Just trying to understand what's new about what was seen in the French Compassionate Use Program that caused the EMA to pause the review.
spk09: Yeah, thanks for the question. So we had some severe skin reactions in a, as you pointed out, as we stated, a French Compassionate Active Program. This is a well-documented side effect, and it's very consistent with our USPI. Look, safety is our highest priority for patients. But we believe fully that the benefit-risk profile is unchanged for PADSF. And we're excited with this drug. It's been used in many, many thousands of patients in the US. Docs use it. well in the U.S., understand how to use it. And, you know, it's important to, you know, for docs around the world to use it according to the label. Roger, do you want to add any additional color?
spk03: Yeah. So, Andy, I think that this is the European regulatory process, you know, that we're going through. And, you know, the exact the exact reason why a decision is made to pause on an approval is really for the regulators to make that call. Just to reiterate what Clay is saying, there's nothing in the data that we're aware of or that we see that is any different from what we've generated elsewhere and what is currently reflected very clearly in the USPI.
spk18: Thank you.
spk17: Our next question comes from Michael Schmidt with Guggenheim. Please go ahead.
spk11: Hey, guys. Thanks for taking my questions. And congrats on the nice fourth quarter, actually. But I had another one on the 2022 product guidance. You know, specifically around 2-Kyza, when we talk to breast cancer docs, they really tell us that, you know, they use the drug predominantly in patients with brain mets, and that would really not change, you know, based on the new NHER2 data. So just wondering, you know, what your market research there, you know, says. And then on the other hand, you know, PATH-F guidance for 2022 was actually higher than what we expected, especially since you have stated in the past that you already have, you know, very high market penetration in bladder cancer in the U.S. And so just wondering, you know, how you see the market evolving there in the near term that, you know, and what the growth drivers could be for PATH-F in 2022.
spk09: So first of all, we'll start with PADD7. You know, our guidance shows about a 30% growth over 2021. So we believe, you know, PADD7 is really helping patients. And, you know, there's a lot we could talk about with this, but we believe it's still a growth opportunity post-checkpoint, you know, post-checkpoints and post-checkpoint ineligible patients, which is reflected in our guidance. And so, you know, checkpoint inhibitors, you know, have grown the market for PADSEP, actually. And so we're excited with that. But we're also excited from, you know, we're going to get data in cohort K this year. It's not in our guidance because we're going to get – we expect the data in the second half of the year. And so we think that based on the timing for submitting that and everything, the approval wouldn't happen until – We couldn't put that into 22 guidance. We do expect to complete enrollment of EV302 this year, which is to support global submissions in first-line urothelial cancer, regardless of whether you're cis-eligible or ineligible. And very soon on muscle-invasive bladder cancer, which is a bigger opportunity than metastatic disease. And then trials are underway, not only in muscle-based, but in non-muscle-based, which is a much bigger opportunity. And we also have basket trials enrolling. So expect data this year for initial data on basket trials. So when you look at PADSEP, you look at our guidance of a 30% growth where we are with no new labels for the year yeah the products you know still doing really well so I appreciate you pointing that out as far as two Kaiser does you know we have that we have discussed you know everything here, we believe it will still be used. And doctors rely on it, you know, in terms of brain meds. And so that's something that, you know, we're really happy about. The other thing is, one of the things that's kind of been interesting is docs use, the duration of use of Tucaisa has been strong. So we're really pleased with that. And I don't know if you found that out in your market assessment, but docs, you know, often you see a drug that you do a clinical trial, and you see a shorter duration in the real world. That's not what we're seeing in the real world. We're seeing something that's very good. But we do, we are, you know, including in our guidance, some effect of the DB03 trial. You know, it's not just, tachycardia is not just used in brain med patients, although that's a very big area. It's also used in patients with visceral disease. And, Chip, do you want to give any color on that part of patients and, you know, a little bit about our guidance of what we're thinking?
spk08: Sure, Clay. So, you know, as I mentioned in past calls, we've seen uptake in both patients with and without brain metastasis. The guidance has strong data in both those patients' subsets, so we've used really broad utilization. It's established itself as an important treatment option. especially for patients that do have brain metastasis. So our thinking around this is that we're going to continue to get utilization. We're going to continue to work to make sure that every eligible patient is available to them that physicians, quite frankly, have anchored to since its launch. But we look forward to continuing to promote the product. The guidance recommendation that we have is our best current thinking on how the marketplace and the landscape is going to change.
spk11: Okay, thank you.
spk17: Our next question comes from Boris Peeker with Cohen. Please go ahead.
spk19: Great. I just want to follow up on to Kaisa and the new HER2 CLIMO5 study that you announced earlier today. I'm just thinking, given the relatively good prospects for these patients, how large will this trial be? How long do you think it will take? And based on that kind of estimated time of completion, How much exclusivity do you think will be left on Tukayza at that point?
spk09: We haven't outlined everything. Roger, can you give a little color and context on Tukayza 05 trial?
spk03: Yeah, sure. So as you heard us in our prepared remarks, you know, outlining what this trial will do, is from a medical perspective, it's very appealing. Yes, the frontline therapy with, you know, THP is successful, but there are still patients who relapse, and using tachycardia in a maintenance mode like this, and actually to physicians as well, has a lot of appeal and makes a lot of sense. The size of the trial, the assumptions of the treatment effect, the rate of events are all things that will influence timing, but, you know, we decided to move ahead with the trial, so we believe that based on its size, based on how long it will take, and based on when we expect the readout, that we will have a meaningful opportunity if the trial is successful to commercialize that indication.
spk09: We think this is the appeal of the trial, as Roger says. It goes to the factor of how quickly you can enroll. You know, as far as timing goes, the faster you can roll, the faster you can have the data and go toward, you know, helping patients on the commercial market. So we're really excited with the trial. We believe it's strongly positive from a financial standpoint, and we're excited and going forward. Great. Thanks for taking my question.
spk17: Our next question comes from Stephen Willey with Seafold. Please go ahead. Hi, this is Bonnie . I just had a quick question for your top line results that we anticipate to see for cohort K and EV103. Are there any expectations that you can frame for us in terms of what type of data and how much data we can anticipate now that enrollment is complete? Thanks.
spk09: Well, you know, we have said we'll have data in the second half of this year. You know, I think that the specifics of what we expect or what it will look like, we'll just have to wait until the data come out. And, you know, our intention is with these type of data, we'd put out top line, but we'd also present it at a conference, you know, as fast as we can and obviously write up publications. That's what we usually do, and we would continue to do that. But, you know, as soon as possible, You know, after gaining, you know, allowing the time to go on to really watch the trial and make sure that we see the appropriate data and duration and everything, you know, safety and all the different features that you need to see, we will put out the top line data at our soonest appropriate timing. So, and that's what's going to happen this year.
spk17: Our next question comes from Jenna Waring with Barclays. Please go ahead. Thank you. Just one quick question, clarification question regarding arbitration reopen for additional evidence. Just wanted to make sure, like, was the additional evidence already submitted or arbitrator is asking for additional evidence? If the latter, is there a deadline to submit the data?
spk09: Right. Well, thank you very much for the question. Evidence doesn't come from arbitrators in these cases. They come from the companies. So that's all I'll say about that. It's not from the arbitrator. And I can't give you details on deadlines or things like that. I want to be very respectful of that this is a pending legal matter, and it's inappropriate to give you more in-depth color than I'm allowed to at this point. But I want to remind everyone on the call that we believe our case is strong. It's been strong. It continues to be strong. And this has no bearing on the strength of our case whatsoever.
spk17: Our next question comes from Jay Oldman with Oppenheimer. Please go ahead.
spk06: Hey, thanks for the update, and thanks for taking the question. I want to follow up on your clinical development strategy in breast cancer. Based on the work you're doing with Tucaiza in combination with N-HER2 and also considering the evolving standard of care in HER2-positive breast cancer that you mentioned, would you consider studying N-HER2 as an active comparator first-line breast cancer and or adjuvant treatment setting? And then related to that, how are you thinking about the potential to add the sitamab, the dotan, into your breast cancer portfolio either as a standalone agent or in combination with KUKAISA? Thank you.
spk09: Sure. Thank you for the question. Some of this, you know, we've thought about or we've talked about. Some of it is not publicly released yet in information. We're not ready to talk about. But, Roger, can you give a little more color on Chikaza in first and adjuvant, and then maybe just a little color on DB and what we're thinking?
spk03: Sure. So the Chikaza Development Program, as we present and as it's laid out, does cover – almost all aspects of breast cancer, including this new trial, which is a true frontline trial. And, you know, the approach we've taken, because Tikaizer is a drug that is appropriate for combinations. It's a small molecule, HER2-TKI. It profoundly inhibits the pathway. We've shown now with HER2-CLIMB that Tikaizer you know, inhibiting HER2 signaling both from outside the cell and inside the cell is a right sort of medical strategy to follow. And so in principle, combining trichizole and HER2 makes complete sense. Two very active agents, same type of principle with a chemotherapy delivery and a trastuzumab binder. And that applies also to desitamab vedotin, which is an optimized antibody with a vedotin payload aimed at HER2. And to Kaiser is obviously in that space for the HER2 overexpressing or the HER2 amplified. So we haven't disclosed plans, but it's an obvious question that we're looking at very carefully, which is what is the synergy between those two products? And how would we develop those two as a combination? So that's under serious consideration. Beyond that, concepts like head-to-heads against in HER2, It's not an obvious thing, I think, that's in our thinking, but of course, you know, we wouldn't exclude any possible trial if it made sense.
spk19: Great, thanks.
spk17: Our next question comes from Andy Shea with William Blair. Please go ahead.
spk10: Oh, great. Thanks for squeezing me in. So two questions. So regarding et cetera, Congratulations on the OS win. Just wondering if you mind sharing with us about how that 40% plus reduction in the risk of death could change perception and prescribing patterns. And the second question is really on the NECTED-4 expression in lung cancer. So the 202 study, you're looking at lung cancer, but it's not biomarker selected. Just curious about what kind of data informed that decision. Thank you.
spk09: Sure. Well, let's start with the centrist data. Look, we're thrilled at the OS. I mean, this is, you know, a long time coming, and it's in a disease, Hodgkin lymphoma, which takes a long time to watch and monitor and look at this. But it's very clear to us that, you know, this is a great regimen, and we're excited to present the data in full detail, not just top line, at a conference by the investigators. And so, Roger, can you talk a little bit about, you know, the impact of the risk of death and what we can do about this with regulators, et cetera?
spk03: Sure. So, as Clay said, this is a great result because, you know, historically it has been very difficult to improve overall survival in Hodgkin lymphoma. I mean, that's good news because patients have good outcomes. But E1... after multiple years of follow-up, has actually reached the point, and it's a pre-specified outcome. So this is an endpoint that was defined in the protocol in terms of how many events one needs and such. And so it has the potential, you know, once you've presented the data publicly and worked through all of the information that we will get, it has the potential to form part of things such as regulatory submissions. because of the nature of, you know, the way the trial was conducted. So I think the first, I'll let everyone see the full data set as Clay mentioned. And we're obviously thinking about all those other components as well. With regard, do you want me to answer the EV? Sure. So it's a great question, Andy, with regard to, you know, biomarker expression. What I would say, and we haven't disclosed the information, but the trial is moving along And we are, you know, clearly at some point in the next, you know, while, we'll start to talk about some data and present. I can't comment on which particular cohort we'll look at. But in general, from a biomarker perspective, clearly we measure and we evaluate Nectin-4 in all cohorts. We enroll all comers, but we evaluate the biomarker. And so if there was, if it was appropriate in a biomarker, that's something we would do. Again, I'm not saying that is what we're doing, but if that produced a response rate that we, you know, found compelling, we would be able to do that.
spk10: Great. Thanks so much.
spk17: Our next question comes from Ren Benjamin with JMP Securities. Please go ahead.
spk12: Hey, good afternoon, guys. Thanks for taking the questions. Just one, can you talk a little bit more about SEA CD40? You know, the update at ASCO GI we thought was pretty compelling. The response rates looked pretty good. So just trying to think about next steps. What are the gating steps, I guess, to pursue a Phase II trial and then a registration study?
spk13: Yeah, thank you for the question, Ron.
spk09: You know, SCA-40 continues to be a drug we're very interested in. You know, I think you're asking about next steps in pancreatic cancer after the data we put out of ASCO-GI. You know, certainly there was encouraging antitumor activity in a disease that's arguably one of the worst cancers. There are incredibly difficult to treat disease in general. But, you know, for what we're... And I want to... occurs over a little bit of a longer period of time before we make any final decisions. And so I think it's important. It's hard to know until you really see the durable data to know.
spk13: If you're going forward, it's like, how do you size this?
spk09: What are the statistics you need in the study? What's the appropriate way to talk to regulators? You need the right data set. So I'm very proud of the work we're doing on this horrible disease. The initial data was encouraging, but we have been very clear that we want to see the full Kaplan-Meier curves. and how they compare to what we, you know, we think that some of the best regiments of the day, of today, would work. So, you know, stay tuned on that.
spk13: It's not, we... Great, thanks.
spk17: Our next question comes from Zhijun Qiu with Barenberg. Please go ahead.
spk02: Great. Thank you very much for taking my question. I want to ask about tests of EV104 in non-muscle invasive bladder cancer. Given PEMBRO is approving this indication on single-arm accelerated approval, what do you expect this trial to achieve? Do you think the data could be sufficient for approval? Thanks very much.
spk09: Yes, thanks for the question. Roger, do you want to address that?
spk03: Sure. So, you know, we have just begun. I think we're very excited and, you know, the potential to use PADSafe, you know, installed directly into the bladder is a pretty compelling argument if indeed the product is both safe and effective. And provided there's an accelerated approval path available for a BCG non-responsive population, again, without saying that we would or we wouldn't do it, that, at least in theory, is a potential approach. So I would say we are still working out whether PADCV will produce the type of efficacy we hope to see, and we could potentially move forward with a late-line population. That is one possible outcome.
spk02: Great. Thank you very much.
spk17: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.
spk16: Thank you, Operator, and thanks, everybody, for participating and joining us on our call this afternoon. Have a wonderful evening.
spk17: The conference is now concluded. Thank you for attending today's presentation. You may now
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