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spk18: Good day and welcome to the Segan first quarter 2022 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 star then one on your touchtone phone. And 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 Mr. Clay Segal. Please go ahead, sir.
spk11: Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to CJIN's first quarter 2022 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, Todd Simpson, Chief Financial Officer, Chip Bromp, Executive Vice President, Commercial U.S., and Roger Danzy, Chief Medical Officer. Following our prepared remarks, we'll open the line for questions, and 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, future developments related to legal matters, 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 legal disputes and with the pharmaceutical development and regulatory approval process. More information about the risks and uncertainties faced by CGEM is contained under the caption Risk Factors, included in the company's annual report on Form 10-K for the year into December 31, 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. Good afternoon, everyone, and welcome to our first quarter call. We are pleased to report total revenues of $426 million for the first quarter. This includes net product sales of $383 million, representing 27% growth over the first quarter of last year. This growth reflects strong product sales across all commercial brands. As we look to deliver continued innovation and develop transformative therapies, we remain focused on two strategic priorities. Our first priority is working to maximize the global potential of our products through commercial performance and robust clinical development programs designed to support future label expansions while also leveraging our strategic partnerships. I'll begin with PADSET, which has become a standard of care in the U.S. for previously treated metastatic urothelial cancer. Earlier this month, We and our partner, Astellas, secure approval in both the EU and UK for PADCF in previously treated locally advanced or metastatic urothelial cancer. The approvals are based on the EV301 trials, notably the impressive overall survival benefit. This marks an important milestone for patients in these regions who have previously had limited treatment options offering poor survival rates. We previously secured approvals in the U.S., Canada, Switzerland, Israel, and Japan, and continue to progress regulatory submissions across Asia, Pacific, and the Americas. We and Estellas are engaging with individual country authorities to secure reimbursement for PADSEV, which can take up to two years, depending on the country. PADSEV's robust clinical development program spans monotherapy and combinations with Keytruda and earlier lines of therapy. EV103 cohort K data, which are anticipated in the second half of this year, along with other data from the EV103 trial, could potentially support accelerated approval in the U.S. for patients with first-line metastatic urothelial cancer next year. We are also evaluating PADSEP in combination with Keytruda in muscle-invasive bladder cancer and as monotherapy in non-muscle-invasive disease. These represent areas of significant unmet need in large addressable patient populations. Tucaisa has become an important option for the treatment of second and later line HER2-positive breast cancer patients with and without brain metastasis. Overall survival data and inclusion in key treatment guidelines reflect CHICAZA's exceptional clinical value. CHICAZA delivered strong results this quarter, although we continue to expect competitive challenges in the U.S. this year, which are factored into our annual guidance. We are working to enable additional European launches in 2022, and our strategic collaboration with Merck is expanding CHICAZA's reach outside of Europe and the Americas. Tukeisa's broad development program includes clinical trials in HER2-positive breast cancer, colorectal cancer, gastric cancer, and other HER2-amplified or mutant tumors. Data from the Phase II Mountaineer trial are expected in the second half of this year and could potentially support accelerated approval in the U.S. next year for patients with HER2-expressing colorectal cancer. Although a relatively modest patient population, it represents a high unmet medical need as existing approved colorectal cancer therapies offer limited efficacy. TIBDAC is a tissue factor targeted ADC approved in the U.S. for recurrent or metastatic cervical cancer patients and represents an important new therapy in a disease with historically poor outcomes. Launched last September in collaboration with GENMAB, The strong uptake has been driven by differentiated clinical data, positive reception from the oncologist community, and our focus on commercial execution. We have presented promising combination data in earlier lines of cervical cancer, which may represent clinical advancements and much larger market opportunities. Roger will provide further details on TIVDAC's clinical development program, which is designed to maximize its future opportunity in cervical cancer and other solid tumors while supporting global regulatory applications. ETCETRUS has now been approved in over 75 countries, and ETCETRUS regimens are a U.S. standard of care in frontline Hodgkin lymphoma and peripheral T-cell lymphoma. More than a decade after its first launch, we and our partner, Takeda, continue to bring this important medicine to patients around the globe. Groundbreaking overall survival data from the Phase 3 Echelon 1 trial in newly diagnosed advanced hot skin lymphoma further demonstrate the therapeutic value of its citrus and its importance for these patients. In addition, a Phase III Children's Oncology Group study demonstrated an improvement in event-free survival for high-risk pediatric patients with Hodgkin lymphoma. Both the Echelon 1 data and the Phase III pediatric data will be presented at ASCO in June and will be submitted to FDA this year. Lastly, we are progressing a comprehensive clinical development program to maximize the potential for Tetris to benefit patients. Our second strategic priority is to advance our deep and diverse pipeline as we look to bring additional drugs to market in the coming years. Decidimat-vidotin, or DV, is a late-stage novel ADC that utilizes our vidotin-based technology. DV is active across a broad range of HER2-expressing solid tumors and demonstrates rapid internalization. Our clinical development program prioritizes monotherapy and combination approaches in breast, bladder, gastric, and other cancers. We recently initiated a pivotal trial in previously treated metastatic urothelial cancer intended to support accelerated approval in the U.S. Turning to our earlier stage pipeline, we are advancing several ADCs to both novel and validated targets. We also have four programs that use our proprietary sugar-engineered antibiotic technology. Overall, we are progressing more than 17 programs and products across our pipeline in a range of solid tumors and hematologic malignancies. Our ADC collaborators are also making important progress with programs that utilize our technology. Roche recently reported that the CHMP recommended European Commission approval for Pallavi in combination with other anti-cancer therapies for frontline diffuse large B-cell lymphoma. GlaxoSmithKline is commercializing BlendRep for patients with relapsed multiple myeloma and is advancing several clinical trials. And AbbVie was granted breakthrough therapy designation for their CMET ADC, tolicituzumab-vidotin, based on data from their Phase II study for non-small cell lung cancer. As we look to the future, our plan is to continue building upon our four commercial products, advancing our deep and diverse pipeline, and expanding our geographic footprint. We have over 50 strategic partnerships, including our recent collaboration with Sanofi. Based on our cash position of approximately $2 billion and no debt, we are strongly positioned to utilize cutting-edge innovation to make a positive impact on the lives of people with cancer today and tomorrow. Next, I'll turn the call over to Todd, who will discuss our financial results. Then Chip will provide an update on our commercial performance. After that, Roger will detail our clinical development activities and pipeline. Todd?
spk14: Thanks, Clay, and thanks to everyone for joining us on the call this afternoon. I'll briefly summarize our financial results for the quarter, which are aligned with our expectations and reflect significant progress across the business. Total revenues were $426 million in the first quarter of 2022, representing 28% growth over the first quarter of last year. This included net product sales of $383 million, an increase of 27% over the first quarter of 2021. This was driven by strong growth of PADSEB to Kaizen, etc., First quarter 2022 sales of PADSEV also included $9 million in sales to another company for a combination clinical trial that they are conducting and which was factored into our 2022 guidance. Additionally, first quarter 2022 product sales included contributions from TIBDAC, which was launched in the third quarter of 2021 as our fourth approved drug.
spk12: Royalty revenues in the first quarter of 2022 increased slightly to $28 million compared to the first quarter of 2021.
spk14: These royalties are primarily driven by sales of Etceteras outside the U.S. and Canada by Takeda, and to a lesser degree by royalties from sales of Polivie by Roche and BlendRep by GSK. As expected, royalties decreased from the fourth quarter of last year as the royalty rate paid by Takeda on its sales of Etcetera resets at the beginning of each year and ranges from the mid-teens to the mid-20s. Collaboration revenues were $15 million in the first quarter of 2022. This included an upfront payment from Sanofi under our new collaboration signed in March, a profit share contribution from Astellas' sales of PADSEV in Japan, as well as other collaboration activities and our collaboration revenues.
spk12: Following the recent approval of PADSEV in the EU, we expect to begin reporting profit share amounts next year from the sales of PADSEV by Astellas.
spk14: Cost of sales in the first quarter of 2022 increased to $88 million. This included cost of product sales and royalties for each of our four brands, profit share amounts to our collaboration partners, Astellas and GenMab, as well as non-cash amortization of acquired technology, $98 million in the first quarter of 2022. This reflected continued products and pipeline programs.
spk12: SG&A expenses. dollars in the first quarter of 2022. This is driven by our commercialization efforts for Cetrus, Tad7, and Takaiza, the launch of TIVDAC in the U.S., as well as investments to support ongoing country launches of Takaiza across Europe.
spk14: We are off to a strong start and pleased with you.
spk12: Now, I provide additional details on our commercial performance and outlook. Thank you, Todd.
spk08: I'm pleased to provide an update on our commercial performance, $3 million, and covers four approved brands. TATSA's first quarter sales were $100 million, a 44% increase over the first quarter of 2021, excluding the $9 million clinical
spk12: ...trial supply room, growth was up 33% over the first quarter of last year. During its first year and a half on the market, PADSEV became the U.S.
spk08: standard of care in the post-checkpoint setting. We look forward to a potential label expansion in the U.S. into the frontline setting into splatin and eligible patients in 2023. We are also excited by PADSA and look forward to working with our collaborator, Astellas, to bring this important therapy to patients.
spk12: Moving on to Teqaisa, first quarter sales were $90 million, a 29% increase over the first quarter of 2021.
spk08: You will recall that our 2022 outlook for Teqaisa assumes the impact of competitive pressure from an HER2's anticipated U.S. launch in the second line setting. and inclusion in guidelines and pathways. This remains our expectation, despite seeing only modest impact in the first quarter. With INHER2's approval in this setting, we continue to anticipate a shift in how these regimens are sequenced, with increased use of INHER2 and less Teqaisa use, delaying patient flow into the third line plus setting, where Teqaisa is mostly used. Our promotional efforts focused on Takaise's strong value proposition, especially in those patients with CMS involvement. Sales in Europe continue to grow in the first quarter, and we look forward to gaining reimbursement in additional countries this year. Etcetera's first quarter sales were $181 million, an 11% increase over the first quarter of 2021. The team is driving awareness of the positive overall survival data from the Epsilon-1 trial. The top line data announced in February has been well received, and we look forward to promoting a full data set after the oral presentation at ASCO. And finally, PIVX sales were $11 million for the quarter. While this initial indication is a modest opportunity, we are pleased with the positive reception from physicians and patients for this important new treatment option.
spk16: Now, I'll hand the floor to Dr. Kahn. based on the overall survival advantage in previously treated patients with metastatic urothelial cancer as demonstrated in the EV301 trial.
spk12: This study was positive and we plan to present based on an additional 13 months of follow-up.
spk16: In the front-line metastatic setting in two studies. The first study is EV103 cohort K, which enrolled patients who are ineligible for cisplatin therapy. The second is the phase 3 EV302 global trial, which includes both cisplatin-eligible and ineligible patients and is on track to complete enrollment this year. As we look to muscle-invasive bladder cancer, together with Acelis and Merck, we are advancing two phase 3 trials
spk12: to assess PADSERV monotherapy testing usage in cisplatin-eligible patients and the other in cisplatin-ineligible patients.
spk16: At the recent ASCO GU meeting, we presented promising PADSERV monotherapy data in the neoadjuvant MIBC setting for people who are cisplatin-ineligible. These data are important in understanding the impact of PADSEV as a monotherapy in the context of the ongoing combination trials. Furthermore, we are progressing our efforts in non-muscle invasive bladder cancer. The Phase I EV104 trial is investigating single-agent PADSEV administered intravesically in BCG non-responsive patients. At the AACR meeting earlier this month, We presented preclinical data of intravesical PADSEV in models of NMIBC, showing minimal local and no systemic toxicities, along with evidence of anti-tumor activity. Beyond bladder cancer, we continue to assess PADSEV in a monotherapy basket trial of other nectin-4-expressing solid tumors. Turning to Kaiser, we are pleased to announce that we recently enrolled the first patients in HER2CLIM-05. This study is evaluating tuchiza in the frontline maintenance setting of HER2-positive metastatic breast cancer. Patients are randomized to receive tuchiza, trastuzumab, and pertuzumab, or trastuzumab and pertuzumab alone after completion of the taxane component of the combination therapy. Despite the excellent results obtained with the standard of care treatment, PHP, patients remain at risk of relapse and death, including the risk of relapse in the brain. In GI cancers, we expect to report top-line results from the Mountaineer Phase II trial in the second half of this year, with the potential for accelerated approval in the United States next year. This study assesses trichiozone trastuzumab as treatment for patients with previously treated Metastatic HER2 in first-line CRC, we recently initiated a randomized global phase 3 trial, Nantoneer O3, comparing to Kaiser, Trastuzumab, and standard chemotherapy to chemotherapy alone.
spk12: This trial... ...in the United States, and we'll also... Additionally, we are studying to Kaiser in combination with Trastuzumab in a basket trial,
spk16: For solid tumors, refer to alterations. Moving on to TIVDAC.
spk12: For the treatment of patients with recurrent or metastatic cervical cancer, on or after chemotherapy. Phase 3 monotherapy trial in cervical cancer, Innovator 301.
spk16: is enrolling well and is intended to serve as the confirmative trial in the United States and to facilitate global regulatory applications. As we look to move TID-DAC into earlier lines of metastatic or recurrent cervical cancer, we will present frontline combination data with Keytruda from the Innovative 205 trial in an oral presentation at ASCO this June. The study has also been expanded to further investigate frontline multi-drug combinations, including TIVDAC with carboplatin and Keytruda with or without bevacizumab. Beyond cervical cancer, we continue to study TIVDAC in other malignancies, both as a monotherapy and in combination with Keytruda and or platinum-containing chemotherapy. The ongoing Phase II study, Innovative 207, is evaluating TIVDAC We recently presented encouraging monotherapy data in these patients, and we have now expanded the trial to explore the combination of TIRPDAC chemotherapy and Keytruda in the frontline head and neck cancer setting.
spk12: I'll turn now to et ceteras.
spk16: We are extremely pleased that two important phase three trials of et ceteras in newly diagnosed Hodgkin lymphoma patients were selected for oral presentations at ASCO. The first is data from Echelon 1, which showed that a Tetris in combination with ABD significantly improved overall survival compared with BBD in patients with advanced Hodgkin lymphoma. A Tetris was shown to reduce the risk of death by 41% with a hazard ratio of 0.59 and a p-value of 0.009. The second presentation will be of data from the Phase III Children's Oncology Group Study, AHRD 1331, in pediatric patients with high-risk Hodgkin lymphoma. The study met its primary endpoint of superior three-year event-free survival with ad cetrus plus chemotherapy compared to a chemotherapy regimen, desitamab-vidotin, or DV. We recently began enrolling patients into the registration of Phase II monotherapy therapy trial in second-line HER2-expressing metastatic urothelial cancer. If we obtain positive results from this study, it could potentially support accelerated approval in the United States. We also plan to initiate additional registration studies in bladder cancer and HER2 low breast cancer over the next several months. We are also considering development in other HER2-expressing solid tumors, such as gastric cancer. Now I'd like to briefly mention our early stage pipeline. We are currently evaluating a growing number of drug candidates in Phase I clinical trials across a range of solid tumors and hematologic malignancies. Earlier this month at AACR, we presented promising preclinical data on two of our newest clinical stage ADC programs, SGN B7H4V and SGN ALPV. SGN B7H4V is a vedotin ADC targeting the immune checkpoint B7H4, which is expressed across solid tumors including breast, ovarian, and endometrial cancer with limited normal tumor expression. We detailed the robust anti-tumor activity of the ADC and its immunomodulatory activity through induction of immunogenic cell death. We also disclose preclinical anti-tumor activity of SGN-ALPV, a novel vedotin ADC targeting the central alkaline phosphatases, which are expressed across solid tumors including ovarian, endometrial, gastric, and non-small cell lung cancer. We recently enrolled the first patients in Phase I trials of these two ADCs. I will now hand the call over to Clay.
spk09: Thank you, Roger. Before we turn to Q&A, I would like to comment on our ongoing legal proceedings with Daiichi Sankyo. A jury recently found that Daiichi Sankyo willfully infringed one of our U.S. patents with NHER2. We were awarded damages of $41.8 million representing an 8% royalty on past sales of NHER2 in
spk12: in the United States.
spk09: With this verdict, we now intend to request that the court award a royalty on future U.S. sales of Inheritu through expiry of the patent in November 2024, as well as enhanced damages, attorney fees, and costs. We anticipate a decision by the trademark office granted a request on rehearing and instituted two post-grant review proceedings brought against certain claims of the same patent, which we intend to vigorously defend. Separately, we are engaged in an arbitration against Daiichi Sankyo over ownership of certain ADC technology used in HER2 and several other product candidates. We expect a decision on the arbitration in mid-2022. It's important for us to defend our intellectual property as we continue to drive groundbreaking ADC innovation and develop transformative therapies for patients in need. In closing, we expect to achieve many important milestones in 2022, including important clinical data readouts, global and commercial progress, and advances across our pipeline. With that, we'll open for your questions. Operator, please open the line for Q&A.
spk18: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star then two. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Corey Casimov with JP Morgan. Please go ahead. Great. Thanks, guys.
spk12: And good afternoon. Wanted to ask about to Kaiser.
spk07: So nice quarter and I've just given the prevailing guidance you have here. I think it implies an average about 75 to just over 80 million per quarter over the balance of the year after after use the 90 million q1. So I'm just curious, How much do you see the guidance at this stage as kind of prudent conservatism until you see how market dynamics start shaking out within HER2 versus an expectation that in HER2 comes in and quickly takes a lot of share in the non-brain mets patients? Thank you.
spk09: Corey, thanks for the call. We're really proud of Tukeiza, and we have not seen any new approvals, as you know, on in HER2 yet. Our guidance includes an assumption of an approval later this year, perhaps soon, and an impact on especially the non-brain mats, exactly what you said. So I think you asked, are we wanting to see what happens later this year? I think that's exactly right. I think we're being very transparent that we And we've provided guidance, and I don't think it makes sense at this point to change the guidance. You know, we certainly will if things happen in certain ways, but right now I think what you said makes a lot of sense. Todd, do you want to make any additional comments about that?
spk14: Sure. Thanks, Corey, for the question, and Clay, I'm happy to. So, Corey, the guidance to Kaiser this year, as you might imagine, you know, is a little bit of a tough one. We're doing great with Takaiza in the current label, but we know that in HER2, I think they've got a PDUFA in May. We're already seeing them in guidelines. So it reaches the market, gets approved, that it will create a sequencing change in how these drugs are used and may push Takaiza into a little bit of a later line of therapy. So that assumption was built into our guidance. And, you know, we feel like our guidance is very good. Okay.
spk18: Thank you, guys. The next question will come from Salveen Bridgster with Goldman Sachs. Please go ahead.
spk01: Thanks for taking my question. Heading into the cohort K data, could you just frame expectations on what ORR is clinically meaningful given K-TRUDA activity in that population?
spk09: So thank you for the question, Salveen. We are very excited about PAD7, the opportunity with Cohort K, and the rest of our trials that we're working. Some of them are global trials, as you know. And Roger can try to address this question and see what he can say. But we haven't outlined like a specific, here's a bar, here what we need to get after. So I know Roger will do his best to provide color, but understand we can't be exact. It's really, at the end of the day, it's up to the FDA. And we would be remiss to try to say, here's the FDA's bar since it's really up to them.
spk16: Exactly. Thanks, Clay. Now, just to add some more commentary, In terms of the patients that we've enrolled, they are cisplatin ineligible. And so the closest population you can potentially look at is a population that's treated with carboplatin, a carboplatin-based regimen. And for that regimen, the response rate would be expected to be somewhere in the mid-30s. We have obviously generated data with PAD-safe monotherapy in later lines of treatment, somewhere in the sort of 40% to 50% range. Keytruda has a range of responses depending upon PD-01 status, and we have cohort A, which was an initial assessment of both PADSEV and Keytruda in the sort of frontline system eligible population, which produced a response rate of 73. So you can take all of those numbers. They're all relevant in terms of trying to understand what the landscape will be, but I think play... is exactly right. We'll obviously be excited to bring forward the data we have, but in the end, it's an FDA review issue as to exactly what the bar is.
spk00: Thank you.
spk18: The next question will come from Andrew Behrens with SBB. Please go ahead. Hi.
spk15: Thanks. Congrats on the strong execution in Q1, guys. Just a question on Tukaiza. I was wondering when we may see some data with other backbone therapies, especially on top of NHRT2. Is there any reason to think that Teqiza won't be effective with NHRT2 or that the toxicities may be overlapping?
spk09: Andy, thank you for the question. You know, we're really excited with Teqiza in many regards. We have other data coming out, such as in colorectal cancer, and we have quite a few trials going on in different diseases. I think Roger would be appropriate to comment on thoughts in combination, whether they are with NHER2 or other things. Roger? Yeah, sure.
spk16: Absolutely. So, Andy, you know, in principle, right, the construct of NHER2, which is trastuzumab together with a chemotherapy payload, so inhibition of the pathway plus cytotoxic effects on cells, is not that different from the regimen that was used in HER2 client conceptually, which was caseidabine, which is a cytotoxic agent, trastuzumab, together with ticatinib. So as sort of first principles, one could reasonably extrapolate that a combination of ticizer together with ticatinib may have some interesting efficacy. With regard to toxicity, obviously each drug has its own profile. Ticatinib as a single agent is a very well-tolerated agent and, in fact, can be taken for years. And that is an important attribute. We're generating the data right now, so I can't comment on, you know, what the profiles will look like. But suffice to say, you know, we are interested in that combination because these are the two most active agents recently, you know, on the HER2 landscape. And it's important to understand if there may be, you know, potentially medically meaningful, you know, winning combinations.
spk15: Okay. Any sense when we might see some of the data?
spk16: You know, we're enrolling and we're generating data, so no, we've not given any indication as to what the timing of that would be.
spk15: Okay. We'll wait. Thank you.
spk18: The next question will come from Michael Schmidt with Guggenheim. Please go ahead.
spk05: Hey, guys. Congrats on the quarter. Thanks for taking my question. I had a follow-up on EV103 Cohort K. Thanks for your comments on the response rate. I understand duration is another important endpoint. Perhaps could you help us understand what duration of response is clinically meaningful in this setting, and, you know, is there a particular hurdle for that? And then obviously the study has two arms, and I'm assuming if both arms succeed on response rate that there will be a comparison of the combination versus passive monotherapy. correct way of thinking about it. Thanks.
spk09: Michael, thank you for the question on this. I'm glad you brought up duration. Duration is something that sometimes investors forget to ask about, but it's so important in making cancer drugs because if you have a response rate that looks good but it's not really durable, it's not that important to cancer patients. we pride ourselves in looking at duration with all our products and making sure that they're meaningful for patients and make a difference in their life. And so, you know, DOR or duration of response is also important at FDA, and we know that acutely. Roger, can you talk to them a little bit about the endpoint and the arms of the trial?
spk16: Sure. Yeah, it's a great question. So from a durability perspective, obviously one of the hallmarks of something like a PD-1 inhibitor such as Pembrolizumab, you know, Durability of response is really a hallmark of immunotherapy, and it brings enormous value, as Clay says. We have generated duration of response in cohort A, and it looks very favorable. It's long, certainly longer than one would expect with chemotherapy, which is probably somewhere in the seven months of median durability, something of that order or thereabouts. We need to basically present the data from cohort K, re-look at that durability. There's, on first principles, every reason to believe that it could be solvable, but we need to see the data. The individual therapy, which is the monotherapy of PADSIF in that trial, there is no specific setup to directly compare. But obviously, these are contemporaneously randomized patients. the main value we see of the PADSIP monotherapy is to more understand and more clearly understand the contribution of components. But that data set will stand by itself as well.
spk12: And so obviously when we've had that and durability of PADSIP monotherapy. Okay, great. Thank you. Matthew Harrison with Morgan Stanley. Please go ahead. Hi, I'm Steve asking for Matthew.
spk04: So my question is, I see that you are pursuing in the HER2 low breast cancer. I want to ask why you do this and what differentiation part do you see compared to in the HER2 in this front? Thank you.
spk09: Well, hi. Thanks for the question on DV. So one of the things we really like about DV is it doesn't use trastuzumab. Trastuzumab is the generic name for Herceptin.
spk12: And that same antibody is in Katsyla and in HER2.
spk09: And so we've studied that. We know the internalization rate of that antibody. And we know that the antibody that's in D much more rapid. And so we think that's an attribute to that antibody drug conjugate. So we're excited for that product. We've seen data that's already exciting in HER2, in patients that have low HER2. And we also know that D1s, and we've seen data to that.
spk12: And so we're excited because some of the other cantathesin products
spk09: containing ADCs, cantathesin-type molecule containing ADCs.
spk12: Perhaps we'll see that in the future. But the data I've seen to date, as I've seen the data with our vedotin ADCs in combination with PD-1, so we think that as a system, versus trastuzumab or the core antibody for the 280Cs targeted to HER2 on the market. And the second thing is the combination with PD-1s also potentially differentiating.
spk09: So I think those give us a good idea.
spk12: The next question will come from Jeff Meacham with Bain. So how are you thinking about to Kaisa ex-U.S.? There are different economics between the two, but there are respective peaks and commercial dynamics relative to what we've seen in the U.S. And is the peak at Cetrus sales? Thanks. These are really good questions. I did want to point out a few things that are critical to trying to address your question, something that in and we are prosecuting that and getting and trying to country by country get reimbursement.
spk09: With PADSEV in Europe, We're working with our partner, Astellas, and it's their charge. So we lead the charge in Europe with you guys. Astellas leads the charge in PADSEP. We love both drugs. I just wanted to set up the ground rules for different dynamics there. With Etcetera, so that you know those dynamics, we have the U.S. and Canada. We lead the commercial sales for and marketing. And outside the U.S., it's Takeda. So there's Differences with each of these drugs and how it's commercialized depending on, you know, who does it in what territory and what partner or we do it.
spk12: And so the opportunities for these drugs are strong.
spk09: And the reason they're strong around the globe is because these are good drugs. And as you know, cancer drugs don't know borders and boundaries and countries and politics.
spk12: This is about patients, and it doesn't matter where they are.
spk09: If they can benefit from our drugs, we're very excited about it, and we want to bring our drugs to these patients. So the ex-U.S. opportunity for etc. is something we have a lot more experience with. You brought that up at the end of your question. And the ex-U.S. opportunity for Tetris is actually done well. Todd, can you talk a little bit about, you know, how we look at it and what the differences are kind of economically speaking?
spk14: Yeah, so let me first say Clay's right. We book sales for Takaiza in Europe, and it's a profit share with the sales for PADSA in Europe. So, you know, a little bit different treatment there. I would say, you know, in general, when you look at drug launches in the U.S. versus drug launches in Europe, there are probably two things that I think are worth noting. Number one is in the U.S., you launch a drug, you set a price, and you're off to the races. And then with subsequent labels, you expand patient populations. In Europe, it's different. You get approval, and then you need to go country by country to negotiate prices. In some countries, you can launch with, I call it a kind of a provisional price. There are different names in different countries for it. But in some markets, like France and Germany, you can access the market commercially while you're negotiating your price. In other markets throughout Europe, you have to negotiate a price before you're allowed to launch. So what does that do for a launch trajectory? It tends to spread it out. You know, Europe – Europe tends to be a little slower in how it reaches peak than in the U.S. because you don't have these impediments to getting to the market. With Europe, you need to negotiate country by country, and that slows things down. Obviously, you want to try to focus your initial efforts in the key markets, which is what we have done. The other, I guess, element that I would point out is typically, European prices are lower than U.S. prices. So while there may be the same general number of patients in the U.S. and in Europe, the pricing tends to be different. That's number one. And then number two, the rate at which you get to the market is different for Europe. And then also typically in Europe, as you launch additional labels, your price tends to go down.
spk13: Got it. Super helpful. Thanks a lot.
spk18: The next question will come from Gina Wang with Barclays. Please go ahead.
spk00: Thank you. Just one question regarding the arbitration decision. If positive, should we expect royalty also until November 2024? And also, should we expect royalty to be in a similar range to 8% that mentioned for the past sales from the jury verdict?
spk09: so so gina thank you for the question i'm really glad that you asked this question um it's uh you know something that uh we hope that gets resolved in the not too distant future uh you know as there's been already one court ruling on the patent infringement so let's address your questions let's start with the patent infringement so the jury ruled and awarded us eight percent as you had mentioned for previous sales which is what the jury was asked to decide upon. That was it. Previous sales, and it was willful infringement. That was also in there, and that's something that's a public record that you know about. And so that's till basically the time of the court case for the patent infringement. The rest of it, and you brought up November of 2024, that's to the underlying patent that was being infringed. So we have, we work with the judge in that patent infringement case, and you provide information to the judge, and you request that, and this is legal things, and I'm not a lawyer, but you request the judge to provide you with a royalty going forward till the end of the patent life. Now, this is still, I'm still on the patent infringement, not the arbitration, so I don't want anyone to get confused. And the judge will decide what the royalty is. I think the 8% is that the jury decided on historic is potentially something that you could look at, but it's up to the judge. So I don't want to begin to say whether the judge will do lower, higher, or the same. It's really up to the judge. The second thing, and the second part of your question, is the arbitration. Now that is based on contractual issues that we had with Daiichi Sankyo, based on our almost nine years of working together with them. and, you know, teaching them all about our ADC technology and how to employ it. And so that is not subject, we do not believe that is subject to the end of this specific patent. What it would be contractually would be subject to any patent life of those molecules that include our linker. And each molecule by molecule is usually most companies, what they do, we included, is we'll patent any unique molecule. And then you have the underlying technology, if you will. So if they patent a new molecule using our linker system, and that new molecule patent life goes through, let's say, 2034, just to pick a date, then what we're asking the arbitration is, for value through that 2034 time for sales. And since they have quite a number of molecules using our technology and they don't have the same exact patent life because they're different molecules that were made at different times, there could be a range of outcomes of times that if we win the arbitration, that royalties or some value thereof that I don't want to assume the judge will pick royalties. The judge can do whatever the judge wants to determine the value. And so that could be determined based on many more years than 2024, because it could be the end of the patent life of those specific molecules on a case by case basis. Also, for those molecules, It would not be based on the U.S. sales, which is the patent that we're talking about. Our contract was global. So for us, it would be based on global sales, and those global sales could be over a substantial period of time that could stretch into 2030, depending on molecule. I hope that provides you with what you need for understanding. Gina?
spk00: Yeah, yeah. So maybe just follow up a question. So who will decide the royalty rate? You know, would that be like when the arbitrator make a decision, announce the decision, will he also announce the royalty rate? Or will you be negotiating with Daichi about the individual royalty rate for each individual asset?
spk09: Well, Gina, I want to compliment you on the question. So I don't know the answer to that because it's up to the judge. But I want to compliment you on the question because The judge can rule and decide there's a royalty rate, and that's what the judge can do. The judge could decide there's cash or it could be only cash or cash and royalty and a lot of different things that the arbitration, I should say, not just judge, the arbitration judge, not the patent infringement judge, can make a decision on what type of value that this should come to CGEN if he determines that we made our case and it was correct. So that's up to the arbitration judge. The arbitration judge could also rule that the linkage inside of and HER2 and their other molecules is cGENs. And the judge could say cGEN and Daiichi need to work this out and come to, you know, royalty in discussion. So it is not something that is up to us. It's up to the arbitration judge. in this case.
spk00: Okay. Thank you.
spk18: The next question will come from Andy Hasai with William Blair. Please go ahead.
spk06: Great. Thanks for taking my question. So related to all the questions about the HER2 franchise, you know, I think Seasons is in a very unique position where you have a HER2-targeted ADC and a small molecule. So I'm just curious if you could share your thinking on how to take advantage of this strategic attribute. And along the same lines, I think Roger mentioned about the amplified and mutate populations. So I'm curious if you're open to kind of sharing with us any sort of plans there as well. Thank you.
spk09: Andy, thank you for the interesting questions. And, in fact, we're really proud that we have a HER2 franchise here with our small molecule and our antibody. You know, targeting the inside of the cell through the HER2 tyrosine kinase is an important mechanism. Targeting the outside of the cell through an ADC, through an antibody that then delivers, you know, potency to the inside of the cell, we think could come at it and really attack the cancer cell and do well by patients. And, Roger, perhaps you could talk about your thoughts on combining outside of the cell and inside of the cell targeting and, you know, other questions that Andy had on any populations.
spk16: Sure, Clay, and thanks for the question, Andy. Yeah, you're right. I mean, we have two active drugs. DV already has an activity profile that's been generated in China and already has approvals in China. And so I think we have not disclosed any specific plans, but it's an obvious place for us to think carefully about where could DV be valuable for to Kaiser and in the opposite directions. You know, where could Kaiser potentially be valuable in a, you know, in a decision-making development program? So we're busy thinking those things through. It's certainly under consideration. I would just reiterate, you know, the DV program, as we've currently designed this, is basically taking and building off of the data that's come out of the Remagen data from China. So, for example, you know, going after bladder cancer, it's not sort of an obvious, traditional place to go for a HER2 agent, but they have already generated, you know, very interesting data. So we think that that's an important point to take further and see if we can make something of that and turn that into a product because it's an open IMD and we've already, you know, begun what we have designated as a pivotal trial, potentially looking for accelerated approval, you know, in a HER2 population. And then the other piece of DV which is going after the HER2 low is also based on data generated from Remagen. So those two things that we've sort of put out in the public are the two obvious places to start, but there is lots of opportunity. And we're excited, exactly as you say, we're excited to have two products in that same area because there's just so much potential efficiency and sort of, synergy, if you will, at multiple levels, you know, for us.
spk06: And would you be willing to share any sort of thoughts on the amplified or mutated indications and strategies?
spk16: I apologize. I got carried away talking about the two together. Yeah, we have a basket trial running you know, with tachyza. So we're obviously very interested in a tachyza-tratuzumab combination across, you know, many different tumor types. Obvious ones that come to mind include things like biliary tract cancer, you know, mutant non-small cell lung cancer, and so on. So we're generating that data, and clearly, you know, from a from a strategic perspective, that type of thinking could be applied to DV as well. Again, we've not disclosed any of that information, but I can just assure you we're thinking through, you know, all the possible opportunities, both as, you know, individual agents to Kaiser combined with the trastuzumab approach and DV as a single agent and then potentially the two together.
spk06: That's very helpful. Thank you so much.
spk18: The next question will come from Jay Olson with Oppenheimer. Please go ahead.
spk17: Oh, hey, congrats on the quarter, and thank you for taking the questions. I just wanted to follow up on DV. Since you initiated the registrational trial of DV in patients with HER2-positive metastatic urothelial cancer, Can you just describe the rationale behind prioritizing that trial over other trials? And then since you have phase two data for DV at ASCO and HER2 negative patients with locally advanced or metastatic urothelial cancer, can you just comment on how those results may read across to the potential for DV and other HER2 negative tumor types? Thank you.
spk09: Sure, Jay. Thanks. This, you know, very interesting questions. I will remind you that DV is an exciting drug in urothelial cancer. It's got great data, and I believe it has breakthrough designation as well. So it's something that there's a lot of real information and rationale to go forward. Roger, do you want to comment about, you know, the other parts of the question and, you know, what we're thinking about DV in urothelial cancer?
spk16: Sure. So just to reiterate, in urothelial cancer, actually, HER2 expression is in a meaningful number of patients. Its biological relevance may be there. It may be an important component potentially. But regardless of that, it's a surface marker. And that's what an ADC needs to internalize. And so Basically, as I said earlier, we already have an IND, we have breakthrough therapy designation, and we have a trial that we have initiated. So it's an obvious step from our perspective to take DV into urothelial cancer as a unique molecule, because from the point of view of who else is developing therapies in urothelial cancer in the HER2 space, I think we're pretty much alone. And that's important. Secondly, of course, the data that has been generated today is really exciting. And so, you know, we think we can bring potentially another product with clinical value to patients with urothelial cancer. With regard to, again, the sort of HER2 low breast cancer, it's the same principle. You know, we see that as an important opportunity. Clay outlined all the potential differentiating features. of the, including the antibody itself, the potential combination with PD-1 inhibitors. We haven't disclosed the details of our development plans, but when we do, you know, hopefully that will be helpful for you to understand, you know, how we're thinking about this. You did mention some data being presented. I'm not entirely clear, you know, what you're referring to, but I would just say in general, again, on sort of first principles, ADCs require receptor expression on the surface, they don't necessarily require that receptor to be biologically relevant to the tumor. All it needs to do is internalize. So just as other molecules have gone after populations with relatively low HIRT expression, so we see DV in the same way. Great. Thank you.
spk18: The next question will come from Ren Benjamin with JMP Securities. Please go ahead.
spk10: Hey, good afternoon, guys. Thanks for taking the questions and congrats on the quarter. Can you provide us maybe some color regarding the ongoing evaluation of the LV and how that might advance going forward? And if you had to pick kind of like the greatest hits at ASCO, maybe a couple that could drive practice changes, maybe one that's a sleeper that you feel shouldn't be overlooked.
spk09: Sure. So You know, LV is an active drug, and we have this partnered with Merck, and we've seen it active in a lot of regards, single agent combination studies. We've been trying to find the best dose schedule, patient selection, line of therapy. There's something, you know, there's an excitement there, but it has taken longer than we had initially expected. thought to get to where we could consider a pivotal trial. We're trying to do our best there. It's a competitive and crowded space. And Roger could perhaps make a comment. But I want to just talk a little bit about ASCO first. You know, and I don't know exactly what you're asking on ASCO, so I'll tell you what I'd like to tell you, which is I think ASCO With Eccetris, we have a pediatric study that's very exciting, and we have our frontline study, our Echelon 1 six-year survival data. And we have a 41% reduction in the risk of death. We're going to show the Kaplan-Meier plot and all the data. This is both in pediatric patients with high school lymphoma and in adults. with stage 3 and 4 Hodgkin lymphoma. The data we have is, you know, it's really life-altering if you have those diseases and you're in those categories because an et cetera regimen, you know, work tremendously well. So we're proud of that, and we're really proud to show the data and, you know, which would detail the impact on a potential patient. Roger, do you want to make any comments on LV or on the et cetera data at ASCO?
spk16: Firstly, on the acceptance, as Clay said, finding an overall survival positive signal in Hodgkin lymphoma is almost unprecedented. There's very little historically that has been able to do that, so we're super excited by that data. With regards to LV, again, I'll reiterate what Clay said. This is an active agent both as a monotherapy and in combination with Keytruda, and we've presented data in that regard. But again, as Clay said, it's a competitive space. We understand what the profile needs to be in order for us to trigger a pivotal trial, and we continue to work on dose and schedule. So we haven't disclosed any more information. All I can tell you is we're still working hard at that to see if we can create the right profile, the clinical profile from either the monotherapy or the combination to bring forward and test further.
spk10: Got it. And I guess just on the ask a bit, and Clay, you know, your answer is just fine. In terms of the sleeper, I guess, you know, you guys have 23 to 24 abstracts. Is there anything that, you know, I might overlook that you think, you know, it's earlier stage but, you know, might make sense to really kind of focus on because you're feeling quite excited about it?
spk09: You know, so many things are important in there. to look at. So I don't know that I want to just tell you one thing to focus on. I think the, you know, I'll stand by my comments that the et cetera's data is, to me, the most critically exciting.
spk18: Excellent. Thank you. The next question will come from Amai Fadiyah with Needham & Company. Please go ahead.
spk02: Hello. Thank you, guys. This is Amin Makar. I'm on behalf of Amin. It's a good question. My question is related to TIVDAC and the early market movements. But I wanted to know if you guys are thinking about early launch of TIVDAC and how do you see the potential of those for it?
spk09: Okay. Well, you know, we haven't really guided to TISDAC as far as the growth for it yet, so we're not going to do that yet. But as far as the early dynamics, Chip, would you like to comment on the early dynamics in TISDAC? Thanks.
spk08: Sure, Clay. So the launch is going very well. The physicians are very excited to have a new treatment alternative for patients, quite frankly, that are in really tough situations. So we've been really pleased with the current results we have for 1Q, and we look forward to continuing to grow the brand throughout the remainder of the year.
spk02: Thank you.
spk18: The next question will come from Zai Kang Xu with Barenburg. Please go ahead.
spk03: Great. Thanks very much for taking the question. I have two questions. On the Q1 sales side, if It's very nice to see there was another $9 million coming from clinical trials. I guess for the full year 2022, do you expect to see more sales from supplying clinical trials? And then second question on the cohort K side, you know, it's a randomized, two-arm randomized trial. What do you expect to see the ORR in the mono asset? The reason why I ask that question is we've seen 44% in the advanced setting already, and if you can replicate the combination, 70-plus, or in the combination arm, you can see more in the front line from past deaths. How do you think the importance of that distinction could be? Thanks very much.
spk09: So, first of all, Todd, can you address the clinical trial question on clinical trial supply question? And then maybe, Roger, you can go into Cohort K. And we can't provide all the data that you're looking for, obviously. That will come out with our data. So we can't give you specifics and tell you what is required and what the line is and everything. But, Roger, could you give you a general comment? Todd, can you talk about the local supply?
spk14: Sure, yeah, happy to. As we said earlier, there was a $9 million clinical supply order in Q1. We try to call those out when they happen. I think if you go back a few quarters, I think it was maybe third quarter of last year, there was, I think, about a $7 million order. With respect to your question about guidance, you know, that's typically not something that we try to build into our guidance, although I did comment earlier that this $9 million was included in our guidance because when we gave our guidance, it had already shipped. So, you know, will there potentially be more orders? Potentially, but, you know, we don't control those. Even if someone said we might do it, you know, that's not typically something we would include. We would wait to see them actually come in.
spk16: And then in relation to cold cane, Pat said, you are right. You know, in a previously treated population, including exposure to platinum agents and PD-1 or PD-1 inhibitors, we have generated response rates in a sort of 40 to 50 range, 50% range. with monotherapy, and we have not, to date, had any data in an untreated population. So, I mean, I can't speculate on what that number will look like. We all need to generate it, and then we'll understand what types of monotherapy looks like in that space. I would also just reiterate, it is randomized, yes, which is important. Again, the primary purpose for the monotherapy is to understand the contribution of components for the combination But that data does stand by itself. And so, again, you know, we have the chance to evaluate PADSET monotherapy in and of itself next to the combination.
spk18: The next question will come from Joe Catanzaro with Piper Sandler. Please go ahead.
spk13: Hey, guys. Thanks so much for squeezing the delay of patient flow into the third-line setting. with the adoption of Inheritu. I know it's still early, but just wondering if you have any assumptions around when the therapy is achieved and whether, you know, that new normal is something that might be achieved in 2022. Thanks.
spk08: Chip, go ahead. Yeah, so it's a forecast that, you know, first they've got to get approval and a label, and then we've got to see what that looks like to kind of assess the potential market impact. I think it is important to note that changes to the second line, changes to a second line regimen can cause that regimen introduces a longer duration of response.
spk12: Okay, thanks. I would like to turn the conference back over to Ms. Peggy Pinkston for any closing remarks. Okay. Thank you so much, operator. Have a great evening. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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