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spk04: Good afternoon, ladies and gentlemen, and welcome to the Spectrum Pharmaceuticals' first quarter 2021 earnings conference call. At this time, all participants are in the listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchstone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Kurt Gustafson, Chief Financial Officer.
spk09: Thank you, Operator, and good afternoon to everyone. Thank you for joining us today for Spectrum Pharmaceuticals' first quarter 2021 financial results conference call. Our first quarter financial results press release was sent out earlier this afternoon and is available on our website at www.sppirx.com. Joining me on the call today from Spectrum Pharmaceuticals will be Joe Turgeon, President and CEO, and Dr. Francois Lebel, Chief Medical Officer. Before we get started, I would like to reference the notice regarding forward-looking statements included in today's press release. This notice emphasizes the major uncertainties and risks inherent in the forward-looking statements that we will make this afternoon. These statements are not guarantees of future performance. and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. With that, let me hand the call over to Joe Turgeon, CEO of Spectrum.
spk07: Thank you, Kurt. Good afternoon, and thank you for joining us today in the call. In 2020, we laid the groundwork that I believe will allow us to achieve a number of important milestones in 2021 and beyond. During the fourth quarter of 2020, we had a call with the FDA to review the filing strategy for the submission of an NDA for posiatinib based on the positive data from cohort two of the Zena 20 study. The cohort evaluated previously treated patients with non-small cell lung cancer with HER2 exon 20 insertion mutations, and it met the pre-specified primary endpoint in these patients. Based on our discussions and agreement with the agency, we're proceeding with the submission of a new drug application for posiatinib. That work is well underway, and we're planning to submit the NDA later this year. In addition, the FDA granted fast-track designation, which is an indicator of the importance of this drug for patients with this terrible disease. We presented additional data for posyatinib at the ESMO TAT meeting in March and at the AACR annual meeting in early April. Our aspiration for posy extends well beyond the initial NDA filing. We believe this product can be a targeted therapy in oncology across multiple indications. The recent data from the ESMO TAT and AACR was an important step in realizing this promise. The twice-daily dosing has demonstrated a significant improvement in both efficacy and tolerability, which will be important for the program as we advance our development efforts. Now regarding Rolantis, the FDA scheduled the pre-approval inspection of our manufacturing facility for later this month. We believe this inspection marks the final step in the approval process and that Hanmi's world-class facility is ready for this inspection. We are making real progress on our two lead clinical programs with major catalysts expected in the coming months, including a launch and an NDA filing. And with that, I'd like to turn it over to Dr. Francois LaBelle, our CMO, for an update on our clinical development progress. Dr. Francois.
spk10: Good afternoon, everyone. I'm glad to be with you today. I will begin with pausiasis. Preparation for the submission of our NDA under FASTRAC designation is well underway. And as Jill mentioned, the submission will be based on our positive data from cohort two of the Xena 20 clinical trial. This important milestone will be achieved later this year. As you may know, there is no approved treatment for patients with HER2 exon 20 insertion mutations in non-small cell lung cancer, and we believe POSI has the potential to be first to market to address this area of great medical need. Additionally, a meaningfully improved safety profile and enhanced anti-tumor activity was observed and reported recently at two medical meetings. These results may make a real difference, not only for HER2 patients, but also for EGFR mutation and eventually with other solid tumors with activating mutation. The data presented at AACR from cohort five of the Xena 20 trial includes previously treated non-small cell lung cancer patients with EGFR or HER2 exon 20 insertion mutation and provide further support of our hypothesis around BID dosing. For the 38 patients who received 16 mg per day and randomized either to POSI 16 once a day or 8 mg BID in COVID-5, improved response were observed in the BID arm with 31.6% of patients reaching a partial response. Other ARNs demonstrated activity, but were not as effective as the 8-milligram BID dose. A clinically meaningful improvement in tolerability was also observed. The grade 3 or IR-related adverse events were reduced by approximately 60%, With BID dosing, dosing at 8 mg twice a day also allows for an improved rate of dose reduction and interruptions. We are now dosing patients exclusively at the 8 mg BID dose and expect that this change will accelerate enrollment in Chord 5. Now, cohort four of the Zena 20 clinical trial is continuing to enroll well with patients with non-small cell HER2 exon 20 mutation receiving 8 milligram BID in first-line treatment. At the upcoming ASCO annual meeting in early June, we will be presenting data on patients who had CNS metastases at baseline in our cohort one to three. As you can see, the body of evidence supporting the safety and anti-tumor activity of POSI continues to get stronger as we progress. Now let me shift to Rolantes. On the regulatory side, Joe has already updated you on the status of the pre-approval inspection. And we remain confident that our preparation with our partner, Omni, should result in a positive outcome for this FDA plant infection. As it relates to our ongoing Rolantis clinical development program, the same-day dosing study has now achieved full enrollment with 15 patients. This is an exploratory study evaluating the dosing of Rolantus on the same day as chemotherapy. Generally, white cell growth factor on the market must be given the day after chemotherapy, and this can create significant logistical difficulties for patients. Following our initial safety evaluation examining Rolantus, dosing at 30 minutes, three hours, and five hours post chemotherapy. We expanded the enrollment in the 30 minute arm to 15 patients. We plan to present the results from this dosing cohort at an upcoming scientific meeting later this year. While this indication is not part of our current DLA, it is further evidence of this being a novel compound with different pharmacodynamic properties, giving us the potential to further differentiate Rolantes from the field of biosimilars and the innovators. The balance of the year is rich in key regulatory milestones and additional data readouts. We plan to provide you with updates on our progress in the coming months. I will now turn it over to Kurt for a review of the financials.
spk09: Thank you, Francois. Our SG&A expense for the first quarter of 2021 was $14.3 million versus $14.8 million in the previous year. R&D expense was $19.4 million versus $16 million due to increased program costs primarily associated with the posiatinib program. Our net loss for the quarter from continuing operations was $35.7 million, down from $40.6 million in the comparable period of 2020. On a non-GAAP basis, which primarily backs out stock compensation costs and the change in value of our COSI securities, our loss for the quarter was $29.4 million versus $25 million in the prior year period. We ended the first quarter with approximately $163 million in cash plus marketable securities compared to $180 million at December 31, 2020. Our March 31 cash balance included net proceeds of $21 million from equity issued off our ATM agreement in the first quarter. Operating cash burn for the quarter was $34.5 million. This is consistent with where we have been the last few quarters. After the end of the first quarter, we issued an additional $23.9 million in equity utilizing our ATM agreement. These proceeds are not included in the $163 million March 31st cash balance. These proceeds will be used for our planned launch of Relantis and furthering of the Poseidonib development program. With that, let me hand the call back over to Joe.
spk07: Thank you, Kurt, and thank you, Dr. Francois. Spectrum continues to make strong and steady progress on our development pipeline. We look forward to the completion of the inspection of our Rolantis manufacturing facility, which is planned to begin shortly. We are actively preparing our NDA for posiatinib and plan to share additional results from our ongoing cohorts in the ZENIT-20 clinical trial later this year. And with that, I'd like to open the call for questions. Operator, could you please open up the line for questions?
spk04: Yes, sir. Ladies and gentlemen, if you have a question at this time, please press the star and then the number one key on your touch-tone phone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. In order to allow everyone time for questions, we ask that you please limit yourselves to one question. For follow-up, please press star one again to get back on queue. Your first question is from Mario Raycroft from Jefferies. Your line is open.
spk06: Hi, everyone. Hi, Mike. Hi, Joe. Congrats on the progress and thanks for taking my question. So, I'll just ask about conversations with FDA and what are specific gating factors for filing that you can mention. And was the switch to exclusively 8-meg BID in cohort 5, was that based on your talks with regulators, or can you provide a little bit more perspective on that?
spk07: Yeah, Francois, why don't you talk about that?
spk10: Sure. So first, you've got to remember, cohort 2 was done at 16 milligrams. So the successful cohort 2, where we met the pre-specified endpoint, was done with 16 milligrams. once a day. So that's the base of the filing. You know, we met what we had to do. The safety profile, I believe, is acceptable, manageable. And that's the discussion with the FDA was around that. And they basically, upon the discussion with us, said, yes, you can file this. And so that's exactly what we're doing. Now, since then, it's clear that we have not only maintained the type of performance we saw in cohort two, but actually we have built on it, and by BID dosing, we can actually improve efficacy in the adverse event profile, as we've mentioned. So this type of information will be shared with the agency, but the primary filing is with the positive cohort two. I hope that answers it.
spk06: That helps, yeah. And I'll hop back in the queue with follow-ups. Thank you. Thanks, Mahe.
spk04: Your next question is from Alicia Young from Candor Fitzgerald. Your line is open.
spk10: Hey, Alicia.
spk00: Hi. Hi. Thanks for taking my question. This is Nina on for Alicia. I just have a quick one. So with the presentation at AACR, Can you talk about how you're thinking about both dose and dosing frequency? Thanks.
spk10: Sure. Well, essentially, the way to think about it is that we have a core two that was positive. It's not the pre-specified endpoint. So that's very, very important. And that's what allows us to file for a and NDA, and also the nature of the disease, the medical need, and the fact that the data that we have shared with the FDA, we were able to secure fast-track designation, but it's also very important because it allows us to have what's called a rolling submission. So the data we've shared at ACR, as I've just mentioned, is basically establishing that not only have we, as we have added patients, not only have we maintained the previous performance of the drug in the past, but also we've actually seen now improved results in terms of efficacy, as well as, you know, reducing to 60% the grade three or higher patients related AEs. So those are, you know, this is like getting better as we add patients. So we have a cohort that was successful, and now we are improving on it. So that's why we're pretty excited about this filing and as we go forward.
spk00: Okay, thank you.
spk04: Your next question is from Ed White from HSU Wainwright. Your line is open. Hey, Ed.
spk02: Hi, Joe. Thanks for taking my question. So my question is you mentioned, you know, POSI in multiple indications. So I just want to know if you're circling back to the EGFR exon 20 mutations, Will you have enough data coming out of cohort five to perhaps reconsider filing again for that indication? Or are you thinking of developing another study to pursue this? Or, you know, will you be looking at other indications outside of non-small cell lung cancer?
spk10: Sure, Ed. You know, it's kind of a little premature for me to answer you as to how the FDA will think about our data. But obviously, you know, there's going to be, we're already in communication, and there will be continued communication through the NDA review. And as I've indicated just a minute ago, the data that the body of evidence here that we have shown at ESMOTAT and at ACR will be shared with the agency. And so I can't predict how they're going to react to it. But what I can tell you or remind you is that, you know, the data we showed at ACR, the majority of the patients in the 8-milligram BID actually were EGFR exon 20 patients. They weren't ERT2. So, and, you know, that's where we got, we saw the best data. We will be showing I think some very interesting data at ASCO also about CNS activity. And so, you know, given what we're seeing here, we just think that the case, if you want, is just getting better on top of what we had done in court, too, which meant what we needed to do. So, you know, we'll have to have additional discussion with the FDA. But certainly, we have shown now that the activity we're seeing is not strictly to R2, but also in a preliminary fashion, also covers EGFR.
spk02: Okay. Thanks, Francois. And if I may, just a quick question on Rolantis. Once you get the pre-improval inspection done, on the HOMNI plant. What are the next steps? And will the FDA issue a new PDUFA date? Or, you know, how should we be thinking about timing? Thank you.
spk07: Yeah, Ed, we don't know the exact timing, but let's go back in time. As you recall, and I know you well know, we received a deferral back in a PDUFA date back in October, not a CRL, which Clearly, if there were problems like many other companies got with our clinical data, we feel we would have gotten a CRL. We didn't. But because of the pandemic, we couldn't get people to South Korea to do the file, and I know you know all that. We're prepared for the inspection. We're looking forward to it. I can't give you an exact date, but I think – the FDA would take a reasonable amount of time to get back to us once the inspection is done, and we feel that's the last step. So without giving an exact time, I think it would be a reasonable amount of time after the inspection is done. I hope that answers your question.
spk02: Okay, Joe. Thank you. I'll get back to you.
spk04: Your next question, we have Len Benjamin from JMP Securities. Your line is open.
spk11: Hey, good afternoon, guys. Thanks for taking the questions. Joe, maybe just to start off, can you give us sort of an enrollment update or a timing update into cohort sort of four and beyond? I think, you know, you guys mentioned in your preparative marks that enrollment continues well for cohort five. How many more patients are we planning on enrolling there? And is everything focused now on the eight MIGs BID dose? And then, you know, just how we're doing with cohorts four, you know, six and seven as well, and when we might see data from those cohorts. Sure.
spk10: So cohorts four, what we have communicated is that, you know, we were roughly in the mid-40s when we switched to BID dosing. And you will recall that our target enrollment, as discussed with the FDA, was 70 patients. So that's cohort four, and it's continuing to enroll today. Cohort five, we, you know, the study design, if you want, we were a randomizing patient to a number of arms. And as a result of the presentation at AHCR, we have switched completely now to 8BID. And that's because we had completed the stage one stage of a Simon 2 stage design, and we had to enroll 19 patients per arm, which we did, and the AID showed itself to be the best arm to expand and continue, and that's what we're doing. So I don't think we have indicated the exact number of patients, but let's just say that we're working, it's going very well in enrollment. And because we're no longer assigning patients to the other arms, all the patients now are going in the eight milligram BID. So we think that the enrollment now is going to happen faster. So that's probably as much as I can tell you today, you know, other than, Stay tuned, and as the next couple of months advance, we're going to have more information. As to Core 6 and 7, these represent very, you know, relatively rare mutation, if you want. So enrollment is ongoing, and we're satisfied. But, you know, this is exploratory. We don't expect in the near term any regulatory changes. you know, activity there. It's really the important cohort as we go forward. Clearly, it's cohort two that was positive, and now cohort four and five. So I hope that answers your question.
spk11: It does, Francois. Thanks for that. And I guess just going off of Ed's question, you know, regarding cohort five, even though you don't have, let's say, a number as to, you know, when you might stop, it It seems like, and maybe I'm just being overly enthusiastic, but it seems like you could potentially go to the regulatory agency with the Cohort 5 data and discuss a potential expansion opportunity. Am I being a little bit too exuberant about that, or is that an actual possibility?
spk10: Yeah, look, we're pretty excited. And actually, we think, you know, there's, you know, warrants of discussion, not only on cohort five, but on cohort four as well. You know, we'll see where it goes. And as we prepare for the NDA filing, the data will, you know, will be disclosed to the FDA. And as such, we'll We'll see where they go. But, you know, we basically have what we believe is a winning cohort two, and now we have even more exciting data, not only about R2, but also given the data that we're seeing cohort five, it also includes EGFR again. So, you know, we've always seen clinical activity, if you recall, across all the cohorts. We always add clinical activity. Chords 1 and 3 admit their primary endpoint, but not by a huge amount. So now, given what we see in Chords 5, we think that if you were to redo Chords 1 and 3 with different dosing, you might get a very different outcome. So that's why we're very encouraged. Great.
spk11: Thanks for taking the questions, guys.
spk10: Sure.
spk07: Thanks, Ryan.
spk04: Your next question is from Michael Schmidt from Jugendheim Securities. Your line is open.
spk05: Hey, guys. This is Charles Zuon for Michael Schmidt. Congrats on the progress, and thanks for taking the questions. I had one on Rolantis same-day dosing. Presumably, this data will arrive after you hopefully get the initial BLA approved. Could you help us understand? once you get this data, the potential timelines or steps to either fully and formally incorporating it into the label or somehow potentially enabling providers to utilize this more convenient schedule before a formal label change? Thanks.
spk10: Yeah. So, Charles, the discussion, you know, the current BLA, we believe, has been we've answered all the queries, the questions, and even have discussed the label with the FDA. So we think the only outstanding item is this PAI inspection. So we don't expect the label in what we think would be, you know, hopefully an approval in the very near term. We don't think, you know, that there's not going to be any language about same-day dosing in there. And you're correct. We we would advance that and discuss, you know, result of same-day dosing with the agency after the, you know, full approval year. And you've got to remember, although I announced today that we're fully enrolled, we still have to analyze that data. And so as the analysis comes, we present the data in some scientific meetings. And assuming we have an approval in the near term, we will discuss that data with the FDA and agree on a plan to potentially seek additional registration if the data is positive, obviously.
spk07: Hey, Charles, if I could just add to what was spot on, all along, We knew that we were going to not have this on label when we launched. We're fully prepared to compete with the label as is. This would be, as Dr. Francois says, down the road if this was added to the label. This is something that's been tried in the past and wasn't accomplished by other products, and it would be certainly more convenient for patients, for the doctors, the nurses who actually give the injections, et cetera. So that would be a point of differentiation. But I just want to be clear, this was not expected. This is good news. We're moving forward to the next step, but we're fully prepared to launch without it, and that's what the plan was all along.
spk05: Got it. Thank you.
spk07: Thank you, Josh.
spk04: Next question. We have Mayanne Fontani from B. Riley. Your line is open.
spk01: Hi, good afternoon. Thanks for taking our questions and congrats to you on the progress. So I have two landscape sort of competitor questions. So maybe starting with Posey first, could you also touch on both separately on the HER2 and EGFR if there have been any developments that you might be also benefiting from as you think about enrollment in these trials? uh, that would be helpful. And then I have a relentless question.
spk07: Yeah, I'll, I'll go ahead. So why don't you talk about the competitive landscape first?
spk10: Yeah. So, so on the, uh, first of all, you know, the core two was in order to, so let's start there. So for her to, um, you know, uh, Obviously, we don't want to speak on behalf of other drug developers here, but, you know, Daiichi, we think, was the closest, and they've announced now a few months ago that they are going back to the bench looking at different dose and lower dose in order to try to, I assume, you know, have a explore to see if they could reduce the rate of pneumonitis. Pneumonitis had been an issue with that particular drug. It's not the case with our drug. We have seen 0% to 1% rate of pneumonitis, and they were in the mid-teens with their drug. So that's the one for two. On the EGFR front, it's, you know, there's J&J, that have announced by specific and that they are filing. So obviously that could be, they could get to market, you know, certainly sooner than us. But, you know, we'll see how things evolve. As I've just mentioned, our more recent data is certainly very encouraging. So, you know, it's kind of too early to tell.
spk01: Great. Thanks for taking that. And then on the, again, sort of life cycle management for Rolantes, you know, same day is good. But as you know, there are alternative drug classes that are being sort of tested on top of GCSF to, you know, move the needle further on neutropenia and also certain other benefits you don't get with monotherapies. Any color on your thinking? as obviously you think about this as a novel branded biologic?
spk07: Sure. I'll start. First of all, when you look at one of the products, the Beyond Spring product, really when you look at the BTD that's been granted for that, it's really in combination with GCSF. So that's adding another drug along with the GCSF. My only question would be there, what patient population is in need for a payer to pay for two drugs? to get this done? Who are the patients who it's not working on? Because GCSF works pretty darn good for patients who are taking myelosuppressive agents today. So that's that. Sure, there's another product that is early stages. It would be a different approach, but that's early on. So right now, I think GCSF is the way to go, and maybe there'll be a combination with it, but most patients do very, very well with GCSF on its own, and I don't You know, I don't see the unmet need beyond that, but maybe there are certain patient types that could benefit from that.
spk01: Got it. And final question was you definitely have a ton of Rolantes stockpiled. Could we just sort of understand, you know, as we think about this May meeting on the other side of it, how soon can, you know, the product can actually be available for patients and what sort of that stockpile looks like? Is it, you know, a month worth of or is it like a six-month worth of? Like, could you give some color there?
spk07: Sure. Tom, why don't you comment on that?
spk08: Sure. We're thrilled for the potential of getting Rolantis approved, and demand generation will begin almost instantaneously as the leadership team has already been hired. We have the vast majority of the customer-facing representatives that will be hired. And if you think about kind of approval plus what happens to get drug and channel, it's We have plenty of commercial supply stateside, and when plenty getting to your question directly, we want to make sure based on our expectation of the uptake of the product, we will have ample supply, and we believe we have that first year covered. I think customary with the approval of a biologic, you can expect printing of labeling, promotional materials, final packaging of syringes, I think the way to think about that is in the four- to eight-week time period. So I would guess between one and two months post-approval, the actual drug would hit the channel and we would begin selling it. But our demand generation, contract rollout, payer strategy, all of the commercial infrastructure efforts would begin instantaneously post-approval.
spk01: Great. Exciting few months ahead for you. Thanks so much for taking my question.
spk10: Yep. Thank you.
spk04: And we have a follow-up from Ran Benjamin from JMP Securities. Your line is open.
spk11: Hey, guys. Thanks for taking the follow-up. I must have goofed in my modeling of this quarter because I was off on the SGMA thinking that, you know, you were still ramping up on the sales force and the like. And so I guess I'd just like to get, you know, maybe some thoughts as to the current SGMA level. You know, do we – Do we still expect it to materially go up or have, you know, a lot of the sales force and, you know, those involved with sales been hired? And if not, you know, how should we be thinking about it going into, I'm guessing, closer to the third quarter or fourth quarter?
spk07: Kurt, you want to answer that?
spk09: Yeah. So, hey, Ren. The SG&A has been kind of running around that $15, $14, $15 million run rate for the last few quarters. I think as we've talked about in some previous calls, we've got about half of the commercial organization on board. Tom sort of indicated we've identified the people that we plan to provide offers to and hire, but they have not come on board yet. So that's why that cost isn't there yet. And that will happen as we gain some additional clarity here in the coming weeks, I guess. When you ask about whether it goes up materially, we're talking about, I think we've said the entire commercial organization is, say, 60 or so folks, so we're only talking about adding an additional 30. Not a giant incremental spend, but that there are various launch activities and marketing materials that will be prepared for that. I do expect it to go up. Material is sort of a I'm not sure what number you define as material, but you will notice an increase in SG&A once we hire those folks and launch the product.
spk11: Yep. So I appreciate the additional color. I know from previous calls you had had half. I didn't know if you were slowly bringing those people on board, if they were just going to come in as a bowl once approval takes place. But that confirms it. Thank you. Sure.
spk08: Thank you. Just the only thing I'd add there is the reason that you haven't seen that number increase of customer-facing representatives is we deliberately gated that post-PAI. So I think as you de-risk the program and get closer to closer to approval, we wanted to make sure that we had enough time to hire, train, and execute, but didn't want too much time prior to having clear visibility to the path of approval. So that's the reason.
spk11: Appreciate it, guys. Thanks. Thank you.
spk04: I am showing no further questions at this time. I would now like to turn the conference back to Mr. Joe Turgeon, Chief Executive Officer.
spk07: Thank you, Operator. I really appreciate it. And I'd like to thank everybody for their participation on the call today. I'd like to thank everybody for their interest in Spectrum Pharmaceuticals. I really appreciate it. I want to wish everybody a great evening, and we'll talk to you soon. Thank you, Operator.
spk04: You're very much welcome, presenters, ladies and gentlemen. This concludes today's conference call. Thank you for your participation, and have a wonderful day. You may all disconnect.
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