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spk04: and welcome to the CJEN third quarter 2022 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 a touchdown phone. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Doug Maffei, Vice President, Investor Relations. Please go ahead.
spk16: Thank you, Operator, and good afternoon, everyone. I'm pleased to welcome you to CGEN's third quarter 2022 financial results conference call. This afternoon, we issued a press release with our results. The press release and supporting slides are available on our website in the Investors section, Events and Presentations page. Speakers on today's call will be Roger Danzy, Interim Chief Executive Officer and Chief Medical Officer, Todd Simpson, Chief Financial Officer, and Chip Romp, Executive Vice President, Commercial US. Following our prepared remarks, we'll open the line for questions. We aim to keep this call to one hour and 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, potential clinical and regulatory milestones, including data readouts and regulatory submissions, potential marketing approvals and commercial performance. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference including the difficulty in forecasting sales, revenues, costs 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 June 30th, 2022, filed with the Securities and Exchange Commission, and the company's subsequent reports filed with the SEC. Now I'll turn the call over to Roger.
spk18: Thank you, Doug. Good afternoon, everyone, and welcome to our third quarter call. This was a quarter where we delivered strong financial results with total quarterly revenue of $510 million, representing growth of 20% compared to the same quarter last year and reflecting robust sales across our approved portfolio. We also made substantial progress on multiple fronts, including clinical, regulatory, research, and corporate development. We presented pivotal data for PADSEV and to Kaiser, and we submitted supplemental regulatory applications to the FDA for PADSEV, to Kaiser, and to Tetris. We opened a new IND in our early stage pipeline with a product candidate that targets immune cells in the tumor microenvironment, and we extended the geographic footprint for TifTac with a new commercialization partnership in China and other parts of Asia. Turning to our overall strategy, we are an ADC company at our core, as demonstrated by three of our four commercial products and five of our last six INDs. And moving forward, we will remain laser-focused in this area. Nevertheless, as with Teqiza, we continue to acquire complementary assets that target tumors through mechanisms different from ADCs. In that vein, we recently licensed an innovative biospecific technology from Lava which addresses a target not readily amenable to an ADC construct and fits in well with the overall focus on targeted drug development. Beginning today with PAD-SEV, our first-in-class ADC for metastatic urothelial cancer, together with Estelis and Merck, we presented data from cohort K of the EV103 trial at the ESMO meeting in September. As a reminder, this is a study primarily evaluating PAD-SEV in combination with Keytruda in frontline cisplatin ineligible patients with unresectable, locally advanced, or metastatic urethelial cancer. This combination demonstrated a confirmed overall response rate per independent radiographic review of 64.5% with a median duration of response not reached. The combination had a manageable and tolerable safety profile. The PADSEV monotherapy arm showed a confirmed overall response rate of 45.2% with a median duration of response of 13.2 months, demonstrating its contribution to the combination. Frontline patients who are not eligible to receive cisplatin have a high unmet medical need, and we are encouraged by these data. We have submitted a supplemental BLA to the FDA to support a potential accelerated approval in the United States in mid-2023. Further development for PADSIF continues, including our EV302 Global Phase III trial in combination with Keytruda in a broader population of patients, regardless of cisplatin eligibility. We expect enrollment to complete before year end, and our intention is to use EV302 as a confirmatory study in the United States and to support submissions around the world. Beyond the frontline metastatic setting, Additional studies evaluating PADSF in muscle-invasive and non-muscle-invasive bladder cancer are ongoing. Together with the stellists, we are also considering PADSF's potential in other Nectin-4-expressing solid tumors and look forward to sharing data next year. Moving to Takaiza, we recently filed a supplemental NDA for patients with previously treated HER2-positive metastatic colorectal cancer. The combination of Dikaizer and Trastuzumab resulted in a confirmed overall response rate of 38% with a median duration of response of 12.4 months. Based upon the strength of these data, we have been granted breakthrough therapy designation as well as priority review by the FDA with a PDUFA action date of January 19th, 2023. As a reminder, our phase three trial has been initiated in frontline HER2-positive metastatic colorectal cancer with the goal of serving as a confirmatory trial in the United States and supporting global submissions. We continue to explore Tuchyser further in breast cancer with our partner Merck. This includes HER2CLIM-02, our Phase III study of Tuchyser in combination with Quetzila, which completed enrollment in June. We anticipate reporting top-line data in the first or second quarter of next year. Despite the evolving treatment landscape, Quetzila remains an important treatment option for patients with HER2-positive metastatic breast cancer. If successful, the combination of Tukeiza plus Catsyla has the potential to strengthen Tukeiza's position in the second-line setting, particularly in patients with brain metastases, and could provide an alternative important option in the third-line setting for those patients who would otherwise have received Catsyla monotherapy. Next to highlight are three key updates for Etcetris. which is a foundation of care in CD30-expressing lymphomas, and is being commercialized outside of the United States and Canada by our partner, Decatur. First, data from the pediatric trial has been filed with FDA with a target action date of November 16th, 2022. Etcetera's PLUS chemotherapy demonstrated superior event-free survival in the treatment of pediatric patients with previously untreated high-risk classical Hodgkin lymphoma when compared to a chemotherapy regimen that included gliomycin. Second, the statistically significant and clinically meaningful improvement in overall survival demonstrated in Echelon 1 for tetras in combination with AVD in patients with advanced Hodgkin lymphoma was recently published in the New England Journal of Medicine. We have submitted these data to the FDA for possible inclusion in the label. Last and important to note, the NCCN guidelines have now been updated based on the overall survival data to designate A plus AVD as a preferred treatment option for adult stage 3-4 Hodgkin lymphoma patients. Now transitioning to TIVDAC, our fourth approved product and first in class tissue factor directed ADC, which we co-develop and co-commercialize with our partner GenMAP. We recently announced a regional strategic collaboration and license agreement with Xilab that gives them exclusive rights to develop and commercialize TIVDAC in mainland China Hong Kong, Macau, and Taiwan. We partnered with Xilab given their expertise and track record of developing and commercializing innovative medicines in the region. The collaboration will support regional patient enrollment for Innovative 301, our phase three study of TIVDAC in patients with recurrent or metastatic cervical cancer. This global study is enrolling well and is intended to serve as the confirmatory trial in the United States and to enable global regulatory applications, including in Asia. Additional clinical development for TIVDAC continues in frontline cervical cancer and other solid tumors, including head and neck cancer. We look forward to data readouts in the coming year, which will inform our next steps in these two cancers. Dacitimab vedotin, or DV, is a late-stage novel HER2-directed ADC that utilizes our vedotin-based technology. Our clinical development program is evaluating monotherapy and combination approaches in a variety of cancers. We recently began enrolling patients into the pivotal phase two monotherapy trial in second line HER2-expressing metastatic urethelial cancer. We plan to initiate an additional pivotal study in bladder cancer over the next several months while continuing to explore development in other HER2-expressing solid tumors. Turning to our earlier stage pipeline, We are advancing multiple drug candidates in phase one clinical trials in a range of solid tumors and hematologic malignancies. Next month at the Annual Society for Immunotherapy of Cancer Conference, we look forward to disclosing initial phase one data for SGNB6A of a dotin ADC targeting integrin beta-6. This is an antigen which is highly expressed in a variety of solid tumors, including non-small cell lung, head and neck, and esophageal cancer. In addition, we will be presenting preclinical data on SGN-BB228, a novel bispecific molecule which provides a potent co-stimulatory bridge between tumor-specific T cells and CD228-expressing tumor cells. We look forward to initiating a phase one trial for SGN-BB228 in the coming months. In September, we announced an exclusive worldwide license to develop and commercialize LAVA1223 a bispecific T-cell engager targeting gamma-delta T-cells in the presence of EGFR-expressing solid tumors. We find the science compelling and look forward to advancing NAVA1223 into the clinic in the near term. Next, I'll turn the call over to Todd, who will discuss our financial results and provide updated guidance. Then Chip will provide an update on our commercial performance before we turn to Q&A. Todd.
spk14: Thank you, Roger, and thanks to everyone for joining us on the call. Our financial results continue to reflect significant advancements made across the business. Today, I'll briefly summarize our financial results and then discuss several updates to our outlook for the full year. To begin, all components of revenue showed increases in the quarter and for the year to date over 2021. This reflects strong commercial execution across our approved products, continued performance by our partners, as well as new collaborations. With that, total revenues were $510 million in the third quarter of 2022 and $1.4 billion for the year to date, representing year-over-year growth of 20% and 25% respectively. Net product sales increased to $428 million in the third quarter of 2022 and $1.2 billion for the year to date, representing year-over-year growth of 17% and 22% respectively. Royalty revenues were $44 million in the third quarter of 2022 and $111 million for the year to date. Royalty revenues for the third quarter increased by 7% over the prior year, driven by strong commercial performance by our partners, most notably Takeda with its sales of Etcetera, partially offset by foreign currency headwinds associated with the strong U.S. dollar. Collaboration revenues were $38 million in the third quarter of 2022, and $80 million for the year to date. These reflect royalties on sales of PADSEV by Astellas and its territory, as well as other collaboration activities, including an upfront license fee of $30 million from our new deal with Xilab signed in the quarter. Cost of sales were $108 million in the third quarter of 2022, and $302 million for the year to date. This included cost of product sales and royalties for each of our four brands, profit share amounts owed to our collaboration partners, Astellas and GenMab, as well as non-cash amortization of acquired technology costs for Takaiza. R&D expenses were $385 million in the third quarter of 2022 and $987 million for the year to date. These reflect continued investment to expand the potential of our approved products and to advance our product pipeline. Third quarter results also reflected a $50 million upfront fee to Lava Therapeutics. SG&A expenses were $210 million in the third quarter of 2022 and $605 million for the year to date. This was driven by ongoing commercialization efforts, legal costs related to Daiichi Sankyo, and other corporate activities. Regarding our financial outlook for the full year, we are increasing our guidance for et cetera sales to a range of $805 to $820 million. We are narrowing our guidance for PADSEV sales to a range of $435 to $445 million, and we are increasing our guidance for TKAISA sales to a range of $340 to $350 million. Chip will provide further context on market dynamics related to each of our brands in a moment. We are adjusting our guidance for royalty revenues to a range of $155 to $160 million, reflecting foreign currency headwinds, and we are increasing our collaboration revenue guidance to a range of $85 to $90 million. Moving to expenses, We are increasing our R&D expense guidance to a range of $1.3 to $1.35 billion, primarily related to the upfront fee under the LAVA deal in Q3. And we are tightening our SG&A expense guidance to a range of $800 to $850 million. Our other guidance remains unchanged. Looking forward, we plan to provide 2023 financial guidance on our next quarterly call. As we exit 2022, we have four transformative drugs that are well established within their current indications. We have a number of ongoing trials, several with registrational intent, that are intended to support label expansions for each of our approved brands. We also have two pending FDA regulatory submissions intended to support new indications during 2023. The most significant of these is cohort K for PADSEV, However, this will not be included in our initial guidance due to the anticipated time of a potential label approval. These factors will be taken into consideration in our initial 2023 guide. With that, I'll turn the call over to Chip for an overview of our commercial performance.
spk13: Thank you, Todd. Performance across the portfolio this quarter was strong and reflects continued commercial execution for our best in class or first in class product portfolio. PATSEV third quarter sales were $105 million, an 11% increase over the third quarter of 2021. There were no clinical trial supply orders in the third quarter of this year, compared to $7 million in the same quarter a year ago. Excluding clinical trial supply orders, year-over-year growth for the quarter was 20%. Underlying growth was primarily driven by continued use of checkpoint inhibitors as frontline maintenance therapy. a dynamic that has helped PADSEV become a U.S. standard of care in the second-line setting, post-platinum, post-CPI. Checkpoint inhibitors have been used in the maintenance setting for over two years, and uptake has flattened, which is limiting PADSEV's near-term growth in its current indications. Meanwhile, we are looking forward to a potential label in the front-line setting in the U.S., and we are encouraged by the positive reaction to the EV103 cohort K results presented at ESMO in September. Our commercial teams are preparing for a potential launch in mid-2023. As a reminder, there are approximately 20,000 total addressable patients in the frontline metastatic setting in the U.S., with around 80% of these being drug-treated. Forty to 50% of these are ineligible for cisplatinum-based chemotherapy. If approved, the PADSEV regimen will represent an important treatment option for these patients. Moving on to Tecisa, third quarter sales were $88 million. Tecisa performed well in the quarter despite competitive headwinds related to Inher2's recent approvals and increased use in the second line plus setting, which is expected to continue into 2023. Tecisa's performance is benefiting from extended treatment duration in approximately a third of patients, which we believe underscores its efficacy and tolerability. We have established Tecisa's market position as a valuable treatment option for patients in the second-line-plus setting, especially for those with CNS involvement. Our Tecysa commercial teams are ready for a potential launch into the second-line-plus setting in patients with HER2-positive metastatic colorectal cancer. Although a modestly-sized market, the population represents a high unmet need, as existing approved colorectal cancer therapies typically offer limited response rates. Looking beyond the U.S., In the third quarter, we successfully concluded to Kaisa pricing negotiations in Germany and Canada, adding to our success in the UK. And we look forward to potentially further expanding access across the rest of Europe in the coming months. Merck is progressing regulatory submissions and reimbursement activities intended to expand to Kaisa's reach in their territories and have recently received approval in Israel and Argentina. At Cetra's third quarter sales were a record $219 million, an 18% increase over the third quarter of 2021. Growth was driven by a return towards pre-COVID diagnosis rates, as well as price and incremental share gains in frontline Hodgkin lymphoma, the latter of which has benefited from the unprecedented overall survival data from the Echelon 1 trial announced earlier this year. We are pleased to see the strength of the OS data result in an elevated Category 1 preferred recommendation in the NCCN guidelines, and we are working to ensure broad awareness of this positive update. And finally, TIVDAC sales were $16 million for the third quarter. The CGEN and GENMAB commercial teams are focused on ensuring early treatment experiences with TIVDAC are positive, with best practices being shared between clinics. We continue to promote this important treatment option for patients with such high unmet need. With that, I'll pass the call back to Roger.
spk18: Thank you, Chip. As discussed today, we continue to make solid progress across the business. Looking forward, we plan to provide multiple data readouts in the coming year for Tukeza, PAD-SEV, etc., TIVDAC, and pipeline candidates such as SGN B6A, and SGN B7H4V. CGEN is in a position of strength to continue advancing our mission of delivering cutting-edge innovation that positively impacts the lives of people with cancer. Now, we'll open for your questions. Operator, please open the line for Q&A.
spk04: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. To answer your question, please press star then two. Today's first question comes from Michael Schmidt at Guggenheim. Please go ahead.
spk10: Hey, guys. Thanks for taking my questions and congrats on the quarter. I had a question around two ties on market dynamics. The drug obviously has performed better initially anticipated. Can you comment a bit more on how you think about the competitive dynamics within HER2 in breast cancer longer term and how we should think about the incremental growth opportunities should HER2 climb to succeed next year?
spk18: Hey, Michael. It's Roger here. Thanks for the congrats on the quarter. And it's an important question. And perhaps I could ask Chip to make some comments on the commercial dynamics.
spk13: Sure, Roger. As we've discussed in previous calls, HER2 has gained market share in the second-line setting for HER2-positive metastatic breast cancer patients. This has impacted the patient flow into the third line and later lines of therapy. We continue to anticipate this shift is going to grow, and HER2 will be sequenced in the second line in front of Tecysa with increased use in the second line based on their label and approval. This is going to result again in delayed patient flow into the third line. Teqaisa is established itself as an important option for treatment in the second line setting with patients with brain mets. And we expect to continue to hold there and have a foothold as it's been valued by physicians.
spk18: Just to add some more comments on that, Chip. You know, from our initial evaluation of what the impact of N-HER2 could have on Teqaisa, And our sort of timing of when that impact would occur was based, you know, in the earlier part of the year on an expectation that NHER2 would move quite quickly. And that did not actually happen. It took some time for NHER2 to gain momentum. But that competitive headwind that Chip describes, I think, you know, we believe will exist into 2023. And it may be through to the sort of second half of 23 when we see things start to stabilize.
spk10: And then what about HER2-CLIM2? You said we could see data in the first half of next year. How impactful would that potential lab extension be, if successful?
spk18: Yeah, that's a great question. Thank you. Perhaps I'll make some comments and then chip again if you could complete on the commercial color. Yeah, we're excited by the combination of DeKaiser with Quetzila. Quetzila is an important drug. It has a place for use in HER2 metastatic breast cancer. And as you know, patients cycle through therapies. Fortunately, they live a good long time and have the opportunity to switch therapies. Just to remind you, HER2CLIM-O2 has the same design elements as HER2CLIM. So it includes a population. It includes a population of brain metastases and includes in that population patients who will have active brain metastases. And so that is an important component of that trial. So from a, you know, if the trial is successful and the profile of the combination is compelling, both from a general perspective and also in that brain met population, we see, you know, Tukhiza increasing its use in that combination with Quetzala. Chip, do you want to add some comments?
spk13: Yeah, I think there may be two meaningful outcomes from the commercial standpoint. The first is I think we can potentially expect to see increased utilization in patients in the third line regardless of brain metastasis. And the second piece of that is it really puts us in a partnership position rather than a competitive position with CAD-SILA.
spk02: Okay, thank you.
spk03: Thank you, and our next question today comes from Andrew Behrens at SBB Securities.
spk04: Please go ahead.
spk05: Hi, thanks for taking my questions, and congrats on the progress, guys. A couple, I was wondering if you could give some color on the PADSEV duration of treatment that was in cohort K. I know you reported the treatment duration for the cocktail, but it's my understanding that patients could have dropped off of one of the agents and still be considered on treatment And then what are your thoughts on the possibility that the FDA may want to see the randomized data for PAD-7K true to better understand how that cocktail should be used in eligible patients that have the option to get carboplatin plus maintenance checkpoint inhibitor?
spk18: Andy, thanks for the question. With regard to duration of therapy, we have only disclosed at what point is treatment discontinued for one or other component of the combination. And that sits at an average of around about 10 cycles of therapy. I think it was nine cycles of therapy with cohort A, which is the same essential population, and then 10 cycles of therapy with cohort K. And that's a median duration. We have not gotten into the details of how much of which particular drug is being used. I will just remind you that for this combination, as well as for the individual drugs, the major driver for discontinuation is progressive disease. And progressive disease generally, you know, triggers both drugs to be stopped. And that in the main, drugs like PADSEV do not have a major sort of adverse event burden that necessarily stops their use. The most common one being peripheral neuropathy, and that's generally in the single-digit range. With regard to what the agency may view, we think we have a strong package. There's a high unmet need in patients who are cisplatin-eligible. The data that we've presented based on the regulatory framework, which is overall response rate and duration of response, is substantially better than what you can expect with a carboplatin-based regimen. From an evidentiary perspective, we've done this experiment twice. We've had cohort A and cohort K. Those results have been remarkably close to each other. So we're confident that this combination will reproducibly result in the types of results that we've seen with cohort K. From the point of view of the agency, we can't speak on their behalf In the end, it is an FDA call as to whether they see this as being appropriate to take, you know, a regulatory action. But I can say, you know, we are confident in our position. And it's important to note in sort of partly in relation to your question, because confirmatory trials are part of the conversation right now, that we are in a very favorable position. So EV302 which is obviously a much larger trial, which has populations that include both cisplatin ineligible and cisplatin eligible with a sample size in the 900 range, and including endpoints such as PFS and OS as the dual primary endpoints, but other endpoints such as ORR are also included. Enrollment is expected to finish this year. It is an event-driven trial, and so obviously, We will turn our focus from completing enrollment to starting to map out when these events will occur. But it's important to note that that confirmatory trial is, you know, is very, very well advanced. And I think that's an important part of our arguments around, you know, looking for accelerated approval based off a single-arm study, which is cohort K. Okay.
spk05: Thanks, Roger. Just if I could squeeze a quick one in on DV. I didn't hear you mention breast cancer and that with that molecule. I might have missed it. But is it still a priority for this drug? And do you think it could have a meaningful bystander effect like in HER2?
spk18: Oh, it absolutely is a priority. And so focusing, we are very interested in HER2, you know, the HER2 low breast cancer population. We have not disclosed any details, but I think, you know, from an internal, workings perspective we are looking hard at that as a possible opportunity and as you know you know one of the one of the important features of a vedotin payload and we strongly believe this and cohort k actually supports this argument is that you know combining a vedotin together with a pd1 inhibitor does have an added advantage over the combination of two active agents And so, you know, utilizing or leveraging that potential value in a combination strategy is something that we're thinking about, not only for breast cancer more broadly, obviously, and other tumors, but it may be relevant in that space as well. And obviously, from our perspective, you know, generating data is an important first step in understanding what our opportunities are. But I think just stay tuned. We're focused on breast cancer. We just have not, you know, brought the specifics forward yet.
spk05: Okay, thanks a lot and congrats on the progress. Thanks, Andy.
spk04: Thank you. And our next question comes from Salveen Richter with Goldman Sachs. Please go ahead.
spk01: Hi, thanks for taking your question. This is Tommy on for Salveen. Can you provide an update on the CEO search and provide a framework that you're using in finding someone? Thank you.
spk18: Sure, thanks for the question. Yes, I'm happy to report that the board is making good progress. Obviously, the characteristics of the company, you know, we are a multi-drug global oncology company. So anyone who comes in, you know, to lead the company will need the skill sets to do that. We have confidence at the board. You know, we'll identify and we'll name, you know, a strong new CEO. I don't have a timeframe for you. Obviously, it's an important deliverable, and it is something that the board is actively pursuing. But again, timing is something that I can't share. What I can say, though, is the focus of the management team, myself included, during this interim period is to move the ball forward. And we think we're comfortable that we've been successful at doing that, I think as evidenced by the progress that we've shown over the last two quarters.
spk02: Thank you.
spk03: And our next question today comes from Matthew Harris at Morgan Stanley. Please go ahead.
spk11: Hi. Thanks for taking our question. So this is Datong for Matthew. So I just want to confirm maybe some dates. So I think in earlier call you mentioned that you may present some of the readout on the basket studies for both Takisa and the passive. So I'm just wondering what kind I just want to first confirm that you're going to present some data for both Tarkisa and the PASIF on those basket studies. And also, I'm wondering whether you can provide more color on any particular indications you are most interested in for those two drugs. Thanks.
spk18: Thanks for the question. So just a minor correction. The basket trial data we're talking about is with PASIF. You are right. And there are multiple tumors that are nectin-4-expressing. And we haven't shared the data. We have some top line data available. And as I indicated in the prepared remarks, we will present that data in 23. The other basket trial I think we're talking about, or a focus of another molecule, not so much to Kaiser, it's actually TIVDAC. And hopefully that's what you were thinking. And for TIVDAC, as you know, as with many of these ADCs, there are multiple possible shots on goal from a tumor perspective. We're obviously excited with the cervical cancer opportunity. We're looking potentially to take TIVDAC into frontline cervical cancer, and we presented our logic and our thinking behind that, and we're still building the blocks for the regimen to understand whether we have something competitive that would include TIVDAC in it. And then the other tumor which is coming into focus is head and neck cancer. We have presented some data initially, and we plan to share some more data with head and neck cancer patients, you know, with our partners, GenMap, sometime in 23. I can't be more specific than that, but that's the plan.
spk11: Thank you.
spk04: Thank you. And our next question comes from Jessica Fai with J.P. Morgan. Please go ahead.
spk12: Hi, this is J.L. for Jess. Thank you for taking our questions. So we have a couple on PESF and a couple on Tucaisa, probably. So on PESF, Regarding the first line, this ineligible setting, just want to confirm, do you expect priority review with the filing that you submitted? And then do you expect any off-label use in the SIS-eligible population following the potential authority approval in the first line, SIS-planned ineligible, probably next year? For example, could physicians attend label the eligible patients as to the present ineligible in order to give them access to PESF. And then on the other hand, the questions on to Kaisa, so just wondering the kinds of your latest thinking on the evolution of the treatment landscape within HER2 penetrating to in the earlier line setting. do you believe to Kaiser would probably most be used after in her to from now and in the future? And if so, what's the timeframe that we should think about like within her to penetrate into a second line and how long would it take for the patient to sequence through in her to, and probably become more eligible in the lack of better word to, to, to Kaiser. And lastly, Is there any insight you could share with us regarding the proportion of two Kaiser patients without brain MAP? Or in another word, do you have a split between patients with brain MAP and patients without brain MAP that you have treated with two Kaiser so far? Thank you very much.
spk18: Thank you for the many questions. I hope we can get to answer them all. And I apologize if we missed. You can remind us. So with regard to the sort of details around our regulatory approach for PAD7 and Keytruda in that frontline cisplatin eligible population, I think we've shared, we have submitted an application. We don't share details exactly what our requests are to the agency, but just in general, it is relatively correct to say that accelerated approvals are often reviewed under priority review schedule. That is just like a statement of fact. With regard to off-label use, perhaps, Chip, would you like to comment a little bit on that for PAD7, and then we'll move on to Teqiza?
spk13: Yeah. What I would say is that physicians can choose to prescribe the product in ways that they see best fit. We don't actively promote to anything that is not in our label. Moving forward, we are looking forward to the potential of having an additional label in PAD-7. The teams are ready for when that happens. Great.
spk18: And then with regard to Kaiser, you did have quite a few questions in there. I think maybe what we can do is just sort of reposition to Kaiser for you in general. You know, to remind you, we have in the pivotal trial here to climb outstanding results in a population heretofore not studied, including patients, you know, with brain metastases, including in that group patients with active brain metastases. And we improved overall survival. So the value that TKISA brings to patients with HER2-positive, you know, late-line metastatic breast cancer is really remarkable and extremely valuable, you know, for individual patients. With regard to the sort of competitive dynamics, you know, from a... Because we have such a strong argument around brain metastases And as I said earlier, because the Cat Siler to Kaiser combination is essentially the same design and the same eligibility criteria as we had with HER2-CLIMB. You know, we would expect a meaningful number of patients in that trial to have brain metastases. I'm not going to disclose the actual number, but we expect that to be meaningful. With regard to dynamics and choices that physicians make as to how they sequence therapies, I think that often comes down to the individual patients and their requirements. We certainly don't see, and Chip can support me in this, we don't see any switches away from Tukeiza. What we're seeing sort of, you know, competitively is patients perhaps more likely to start on NHER2 versus Tukeiza. Chip, do you want to comment a little bit about the mix of Tukeiza versus NHER2?
spk13: Yeah, I think we're continuing to see strong utilization in second-line patients with active CNS involvement. Teqaisa has become an important and established treatment for those patients. It is well-tolerated. As I mentioned in the opening remarks, we've seen about a third of patients stay on extended therapy for a time, and I think this has helped to support Teqaisa in the revenue it's generating in a dynamic and changing and evolving breast cancer marketplace.
spk18: Right. And again, just on the brain myths perspective, I think your last question was around what is the proportion of patients with brain metastases? What is true is the more successful therapies are in HER2 metastatic breast cancer, the more likely are the brain metastases develop. It's sort of like a sanctuary site which can actually, you know, and surprisingly, patients relatively early on may have, you know, may have brain metastases. So we'll see when we see the results from HER2 CLIMB to exactly what that proportion looks like. But it's certainly enrolled in the trial. We're enrolled in the trial.
spk02: Thank you.
spk04: And ladies and gentlemen, our next question comes from Jeff Meacham of Bank of America. Please go ahead.
spk08: Good afternoon. So, this is Hao calling in for Jeff Nietzsche, and thank you for the question. So, congrats on the quarter. My question is regarding to and a great performance for the quarter. So, it's really two parts. So, you mentioned about normalizing diagnosed rates. Just wonder, do you see it coming back to the pre-COVID level? It may be still slightly lag compared to pre-COVID level. And then the second part is the incremental share gains. I guess the long-term OS data was really providing that momentum. So do you see that incremental share gain sort of continue into the 2023 timeframe, or maybe you see the market dynamic to suggest that maybe flattening a little bit moving forward?
spk18: Yeah, thanks for the question. We're very proud of it, Citrus. You know, this is a relatively mature brand by age, you know, it's 10 years plus. It continues to grow, which is remarkable. I believe the last two quarters have sort of been record-breaking quarters for Etcetera. And obviously the factors that you mentioned, things like, you know, changes in epidemiology and such do, you know, play a role as, you know, incrementally new data, impactful data will do that. And so, you know, we're very pleased with Etcetera and its progress and Chip, do you want to speak a little bit more about what our sort of thinking is going forward with regards to, you know, shifts in epi and such?
spk13: Yeah, thank you, Roger, and thanks for the question. So we have seen a normalization of epi back to relatively close to pre-pandemic. We saw a dip in the first quarter of this year in newly diagnosed HL patients. In addition to that, you know, the frontline OS data results have been very well received. We're pleased with the elevated category one preferred recommendation that we have in the NCCN now. And we do think there is continued incremental growth for us in frontline.
spk02: Awesome. Great. Thank you.
spk04: And our next question today comes from Gina Wong with Barclays. Please go ahead.
spk07: Hi. This is Sheldon Long for Gina. Thanks for taking our question. And congrats on the quarter. So maybe one quick question on obstetrics and another one on PADSF. For obstetrics and Keytruda combo trial, is it still on track to report initial data in late 2022? And it seems like the trial is focused on non-small cell lung cancer and melanoma patients after progressing on PD-1. So what would be your benchmark to determine whether to move forward with these indications? For PADSF, have you got any feedback from KOLs on if PADSF is approved with the cohort K data under accelerated approval, how would the KOLs expect the uptake relative to after the confirmed trade 302 data? Thanks.
spk18: Yep. Thanks for those two questions. I'll take the ad cetrus plus Keytruda and solid tumors questions, Chip, if you want to address the PADSF questions. Firstly, there's a strong scientific argument for why we are combining etc. in a population of PD-1 failed patients, and that we focused the trial on melanoma and non-small cell lung cancer. And the reason for that is not that etc. has any activity that we believe that would be meaningful against a solid tumor, even if it necessarily expressed CD30, but much more importantly, because it turns out that etc. has the potential to be an immunomodulator. And we have very good preclinical evidence demonstrating that a population of T regulatory cells, so these are the cells that basically inhibit the immune system from doing its work, particularly when they express CD30, where they are activated, so it's an activated population of T regs, that it can remove that population. removing a T regulatory cell population from the tumor microenvironment in a situation where there has been progression or, you know, or lack of response potentially, but progression on something like a PD-1 inhibitor, we think is a very important scientific concept to answer. We did indicate that we were hoping to get data out in 2022. It's more likely that that information that will share data in 2023. Again, no specific timeframe, but the science is compelling, and we are conducting the clinical experiments. And when we have the data at the level of maturity and completeness that we can share, we will go ahead and do that.
spk13: Chip, on the passive side. Yeah, thanks, Roger. So, first, from the commercial end, we don't have a label yet. So, we'll have, you know, some additional insights once we understand the parameters of the label. I will say that the KOL interactions at ASBO this year were very positive. the data was viewed as favorable and an important advancement for patients in the frontline setting. Right.
spk18: And it is, you know, just to add to that, it's important to note that both PADSEV and Keytruda are approved, actually, in urothelial cancer. So the drugs themselves are not, in terms of their use, are not problematic for, you know, urologic oncologists to use. And so if we're successful with this application, it will be with two approved drugs in a combination. And bear in mind that, to date anyway, successful combinations with PD-1 inhibitors that are clearly active in urothelial cancer have not led to approvals. And this is really, from the point of view changing the therapeutic landscape and bringing, you know, potentially meaningful interventions to these patients, particularly cisplatin and eligible patients who are often older and frail, you know, we're really compelled by a high response rate and a duration of response that was not reached. I mean, that is a remarkable outcome. And we think that that makes the value proposition of this combination in this vulnerable population very strong.
spk07: Thank you so much.
spk04: And our next question today comes from Jay Olson at Oppenheimer. Please go ahead.
spk15: Oh, hey, congrats on the quarter, and thank you for taking the question. We're curious about the target product profile for disidimab-vidotin and how it compares to NHER2. Can you just talk about some of the key points of differentiation and also comment on the potential to combine DV with 2-Kaiza? Thank you.
spk18: Yeah, that's a great question. Thank you. And thanks for the congratulations. So just some comments on the sitamab vedotin. Obviously, the payload, we know well. It's vedotin. The antibody, which was selected by our partners at Remagen, we believe is optimized for an ADC construct. It has high internalization rates, which we think is important. And obviously, it binds to the HER2 target. So the actual... The drug construct, we think, is a very good one. From a, as I mentioned earlier, with regard to differentiation, the second piece of that is, you know, PD-1 inhibitors or PD-L1 inhibitors are part of the general landscape of oncology. And certainly from multiple points of the compass, we've been able to show that a vedotin-based ADC pairs very well with a PD-1 inhibitor. So that's something that we need to work on further, but data that's been presented so far in urothelial cancer, metastatic urothelial cancer, is very compelling, using the combination of the sitamab-vidotin, you know, together with a PD-1 inhibitor. So, I mean, we're excited by this compound. Our first efforts are in urothelial cancer, where there's a meaningful amount of HER2 positivity or expression. We're interested in the sort of traditional HER2 either overexpressed or amplified, but we also, as is appropriate for an antibody-drug conjugate, we're looking at lower levels of HER2 expression as well, because potentially we'll see value there. And there has been some initial data which is encouraging in that regard. And our focus is on bladder, and we are interested in moving ahead in breast cancer and potentially other cancers. And your point about tucaza is extremely well taken, which is we basically have two acids. that are in the same area, we are working on what is appropriate to do from a clinical perspective, you know, looking at that combination, including some novel aspects, you know, such as the impact of Dekaiser on the expression of HER2 on the surface and whether that's something that we can potentially leverage. So I think just stay tuned. We don't have plans that we can share with you in detail, but we're very interested in exploring what value could we potentially bring forward you know, without two assets.
spk15: Thank you very much.
spk04: And our next question today comes from Gregory Renza at RBC Capital Markets. Please go ahead.
spk06: Hey, good afternoon, Roger and team. Let me add my congratulations on the quarter as well. And thanks for taking my question. Roger, my question primarily centers around the Inflation Reduction Act. I just wanted to give you an opportunity to comment on the CIGIN program commercial portfolio as well as the pipeline. I think that namely, how is your view on pipeline prioritization as well as your external pursuits for other assets being influenced by the IRA considerations? And then even maybe more appropriate for Chip as well, how should we think about longer term and any impacts of IRA with respect to et cetera and the other commercial products? Thank you very much.
spk18: Yeah, thanks for the question. And obviously the law, you know, is now passed. I think at the sort of highest level, we together with others in the industry see this as a negative event for innovation. It has the potential to stifle innovation and some unintended consequences of the legislation, which I think you're addressing around, you know, how do we prioritize our development programs in order to you know, optimize the value that a drug can bring within the confines of the act. I would say, you know, we have some very simple answers for the three, you know, main components, just so you can understand how we're thinking, you know, inside Cgen. I would remind you also, we are essentially a large molecule company, which, you know, may be somewhat more favorable in that environment. But at that sort of real macro level, oncology is and and rightfully so has this mechanism always utilizes the mechanism of accelerated approval to get drugs to people that are making a difference and that have the highest unmet need however they are often at the end of therapies and so the addressable population you know is relatively small and certainly in my experience oncology drugs are developed in With that first step into late-line therapy bringing value, and then, you know, there's momentum built, and you can see it in the PADSET program is exactly, you know, how we would think how to develop a drug logically in oncology. And that may need to change, that the lead indication, you know, potentially being very small and limited may not be the best way for us to develop drugs going forward. So that's certainly in our thinking. Maybe Todd, would you like to comment a little bit about the specifics of the act?
spk14: Sure, happy to. I think Roger gave a really nice sort of overview of how the industry is thinking about it. I think when we look at it, and bear in mind there are a lot of elements of this that are still being defined, but I think specifically as it relates to us there's you know the inflation cap there's the part d redesign and there's price negotiator or negotiations i think with respect to the inflation cap this is actually something that we um you know are dealing with now and have for a while uh our goal will be to include at least our thinking at the time as best we can into the 23 guide that we'll put out in in february of next year Um, with respect to the, uh, part D benefit redesign, we think this is an element that would affect Kaiser more so than the other brands. Um, there, I think there are a lot of dynamics that need to be played out and frankly, it's more rulemaking that needs to play out, but we don't think that that will affect us prior to kind of the 2025 timeframe. And then on price negotiations, we've also looked at this and don't feel that the portfolio, again, this is the biologics would be affected by this prior to sort of the 2030 timeframe. So obviously a lot of this is in a state of flux. The law was enacted mid August. And again, there continues to be a lot of sort of work to understand it, frankly, and clarify it. And we're by all means tracking on it.
spk18: And just to reiterate, I think from a development perspective, we're thinking very carefully about what would a new drug profile need to look like in the context, in the framework of what we think this act will end up creating from a sort of landscape and potential value perspective.
spk06: That's great. Thanks for all the color, guys.
spk04: And our next question today comes from Andy Shea with William Blair. Please go ahead.
spk09: Oh, great. Thanks for squeezing me in. I have two questions. One is related to innovative 205 cohort H. That's the triplet plus or minus Avastin in solid tumors. Just curious about how you think about the design. Should we think about this kind of like analogous to cohort K, which can be, you know, chained to a randomized portion and potentially be open to an accelerated approval pathway? My second question has to do with the bladder cancer strategy, specifically in the HER2-positive population. Obviously, PAT-TEV has shown exceptional activity there. Just curious, if we know the activity of PatSev in the HER2 positive population as you plan to advance BV in that setting. And that's kind of motivated by the fact that sometimes, you know, PatSev has shown activity, you know, outside of just Nectin-4 expressing tumors, you know, even FGFR genetic alterations, it's shown really, really good activity. Thank you.
spk18: Yeah, Andy, thanks for the question. With regard to Innovative 205, the focus in that triplet and quadruplet cohort is to really define what a profile would look like for a frontline cervical cancer study. I don't think it's in our thinking right now that if we were to head to the frontline, and I accept the analogy with But I think the cervical cancer landscape is a little bit more complex. For example, Keytruda is in it. I wouldn't discount the possibility, but I think we're still trying to determine whether we have a competitive regimen. Once we've determined that, we will define, if that's what we choose to do to move ahead, we'll define exactly how we're going to get there. At first blush, it feels like this would be a randomized trial, but it's, you know, we're not there yet. You know, with regard to, it's a good question around urothelial cancer. The data that's been generated with DV and urothelial cancer, particularly in the, you know, the high expressing HER2 is very compelling. Their response rates as a single agent in the 60% range, and bear in mind, you know, a HER2 directed ADC is not the same as a Nectin-4 directed ADC. They may have the same payloads, but the potential for, you know, a differentiated profile based on a biomarker-defined population, you know, together with whatever the benefit-risk looks like, the efficacy and the, you know, safety and tolerability put together, we think it's appropriate to move another option in urothelial cancer with Bacitumab and Bedotin forward. I hope that answers your question. I may have missed part of another question. If I have, please just repeat it.
spk09: Oh, no. Thanks, Roger. That's a very comprehensive answer. Thank you so much.
spk04: And, ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Douglas for closing remarks.
spk17: Thank you, Operator, and thanks, everybody, for participating in our call this afternoon. Have a great rest of your day.
spk04: And, ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.
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