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spk00: Thank you for standing by. And welcome to Spectrum Pharmaceuticals' first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Mr. Michael Grabo, Senior Vice President of Corporate Strategy and Operations. Please go ahead, sir.
spk04: Thank you, operator. Good afternoon to everyone. Thank you for joining us today for Spectrum Pharmaceutical's first quarter 2022 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 Tom Riga, 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 they 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 the 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 Tom Riga, CEO of Spectrum.
spk03: Good afternoon, and thank you for joining us on the call today. The year is off to a strong start as we anticipate FDA approvals later this year for our late-stage assets, Poseyotinib and EFLA, the Grastim. Both are under active review with the agency. In the first quarter, we continued to make progress on our core business objectives, which are, one, gaining FDA approvals and further advancing our two late-stage assets, two, streamlining our company and optimizing our cash burn. And three, ensuring we are prepared to successfully launch both products. Let me provide some highlights starting with Poseyotinib. Our NDA is under active review and the agency has set a PDUFA date of November 24th, 2022. with the initial indication for the treatment of patients with previously treated or locally advanced or metastatic non-small cell lung cancer harboring HER2 Axon 20 insertion mutations. This product has a fast-track designation, and there are currently no approved treatments for this indication. In the first quarter, we initiated a global confirmatory study in support of our application. This is an important and required step in the approval process. Additionally, we presented positive frontline data at the AACR meeting, which is our second successful cohort in the HER2 exon 20 insertion mutation space. Finally, we announced today that the FDA plans to host an ODAC meeting in connection with its review of the posiotinib NDA. We are preparing for this advisory meeting and look forward to the opportunity to highlight the role that posiotinib can play in addressing an important unmet medical need in the treatment of previously treated patients with HER2 exon 20 insertion mutations. The fall ODAC meeting is scheduled for September 22nd and 23rd. We will share the specific date and time for the posiotinib discussion when it becomes available. Now, let me shift to EFLA-Pigrastim. In the quarter, the FDA accepted our resubmitted VLA and assigned a PDUFA date of September 9, 2022. This is a significant step forward in bringing this novel therapy to patients. We are actively working with our partner, HOMNI, to prepare for the upcoming pre-approval inspection of the drug substance facility. Furthermore, we have kicked off our commercial readiness efforts, and our enthusiasm to enter this market remains high. Our commercial leadership infrastructure is in place and ready to engage key customers, group purchasing organizations, and third-party payers to ensure we optimize the launch trajectory if approved. The long-acting GCSF market remains a competitive yet substantial market, and we are looking forward to the opportunity to compete. We will share our detailed commercial plans as we move closer to launch. Moving to our operations, we began the strategic restructure of the organization in January, and we continue to evaluate ways to optimize our cash burn and streamline our operations while investing in our future success. The initial results of those efforts can be seen in our Q1 financials. We also strengthened our partnership with Hominy Pharmaceuticals. This included a $20 million equity investment by HOMNY and amendments to the licensing and supply agreements for both Poseyotinib and Effla-Pograstim. The amendments will allow us to maximize our near-term cash flows and provide improvements to our cost of goods. A strong partnership with HOMNY is critically important to Spectrum as our late-stage assets stem from their research engine. The Spectrum-Homni relationship and partnership dynamics have never been stronger than they are today. We welcome Ms. Joo Young Lim to our Board of Directors in the first quarter. Ms. Lim currently serves as the President of Global Strategy and Planning at Homni Pharmaceuticals. Joo Young has been an exceptional advocate for our partnership, and she's having an immediate impact on our board. Additionally, we announced last week that Ms. Brittany Bradrick has also joined our Board of Directors and will serve as our Audit Chair as of the second quarter. Ms. Bradrick is a seasoned executive with 25 years of experience in the life sciences sector, including M&A, investment banking, finance, strategy, and corporate development. She currently serves as the Chief Financial Officer at Norellis. Just yesterday, we announced the appointment of Ms. Nora Brennan as the new CFO of Spectrum. Nora has been on the board of directors and serving as the audit chair to the company. Her intimate knowledge of the company and familiarity with the team will allow her to hit the ground running in her new role. I'm thrilled to welcome Nora to our senior leadership team as she will officially join the company on May 25th. Given this, I would like to review our financials for the quarter. Total research and development expenses were $4.2 million for the first quarter of 2022, as compared to $19.4 million in the same period of 2021. The favorability is primarily related to the non-cash reversal of an $11.2 million eflipagrastim drug substance accrual that was no longer payable to HOMNI Pharmaceuticals. SG&A expenses were $9.9 million in the quarter, compared to $14.3 million in the same period of 2021, driven by our recent restructuring. The net loss for the quarter was $15.4 million, or 9 cents per share, compared to net loss of $35.7 million, or 25 cents per share, in the comparable period in 2021. On a non-GAAP basis, the net loss was $9.6 million, or $0.06 per share, compared to a non-GAAP net loss of $29.4 million, or $0.20 per share in the comparable period in 2021. We ended the first quarter with approximately $89.2 million in cash plus marketable securities, compared to $100.6 million at December 31st of 2021. As previously reported, we received a strategic equity investment from HOMNY in January of $20 million, which is included in the ending balance. Our operating cash burn was approximately $30.3 million as compared to $34.5 million in the prior period and was elevated due to one-time restructuring costs. The cash, combined with the restructuring announced in January, will extend the company's runway into 2023. With that, I will now turn the call over to Dr. LaBelle for a more detailed update on our clinical development progress.
spk06: Good afternoon, everyone. I'm glad to be with you on today's call and pleased to report on our latest achievements. The post-diagnostic MDA is currently under active review at the FDA. This is a major step toward advancing treatment for patients with HER2 exon 20 mutation in non-small cell lung cancer. The filing is based on our positive data from cohort two of the Xena 20 clinical trial, which consisted of patients with locally advanced or metastatic non-small cell lung cancer harboring HER2 exon 20 insertion mutation with FAIL previous three. The R&D team is actively supporting the FDA review and already preparing for the ODAC meeting in September. We believe posiocinib has the potential to be the first to market for this specific indication, an area of great unmet medical need. We now have initiated a randomized confirmatory study following discussion with the FDA, and are operating with a great sense of urgency. Study SBI-POS-301, or Pinnacle, is designed to enroll 268 patients with previously treated non-small cell lung cancer harboring ER2 exon 20 mutation. Patients are being randomized two to one into this global multicenter study to receive 8 mg of POSI administered BID versus 75 mg per meter square of doxetaxel administered IV every three weeks. Patient will be evaluated at week six and every six weeks thereafter. Following progression on doxetaxel, patient will be allowed to cross over to the POSI arm. The primary endpoint will be progression-free survival with overall survival, objective response rate, duration of response, disease control rate, and safety as secondary objectives. This design will provide a power of 95% to test the hypothesis that POSI is superior to docetaxel for a hazard ratio of equal or smaller than 0.58 using a two-sided log rank test. A futility analysis conducted by an independent data monitoring committee to evaluate the PFS rate will be used to validate the size of the study. Separately, I would like to highlight that our POSI clinical probe has now achieved two positive cohorts, as demonstrated more recently by the positive result of cohort four in first-line patients that were presented in March at the ESMOTAT Congress by Dr. Sun from the British Columbia Cancer Center. This data from the ZINDA20 study included A total of 70 patients who received 16 mg per day of oral posiatin. The first 48 patients of the cohort received 16 mg once daily, and an additional 22 patients received 8 mg BID. The primary endpoint was ORR, evaluated centrally by an independent image review committee using RESIST 1.1 criteria. POSIC met the primary endpoint in these 70 frontline patients with an ORR of 41%, including one complete response, and an invaluable patient ORR of 50%. The safety profile was consistent with the TKI class. Notably, on target adverse events were reduced with BID dosing. Treatment-related grade 3 or higher adverse events were as expected, with rash, stomatitis, diarrhea, and perinepia being the most common. The incidence of grade 3 or higher pneumonitis continued to be low at less than 3% or 2 out of 70 patients with no drug-related deaths. Now, let me shift to a presentation at the recent AACR meeting in New Orleans a few weeks ago. Preliminary results suggest a decrease in plasma circulating tumor DNA during POSI therapy correlate with clinical response in patients with HER2XON20 insertion mutation in non-small cell lung cancer. Additional data from this study has been accepted for presentation at the upcoming ASCO annual meeting in June. These new data will provide further evidence of a correlation between a decline in ctDNA with a clinical response to POZ treatment and cover a longer observation period. So stay tuned. As you can see, we continue to make solid progress on our two late-stage development programs and regulatory strategy. We will keep you posted as we achieve Additional key milestones. That concludes our prime prepared remarks, and I'd like to open the call for questions. Operator?
spk00: Thank you. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from Maria Raycroft with Jeffries. Your line is now open.
spk02: Hi, everyone. Congrats on the progress, and thanks for taking my questions. I'll start off with the Phase III program. Just wondering if you can talk about your view for the bar for docetaxel in that group, and how confident are you that you can be substantially enrolled by the PDUFA date in November?
spk06: Sure. Pleasure to talk about this. Obviously, we're quite confident that we can beat the docetaxel. The extent of establishing the superiority is given to you by the number of patients and the parameters that I've declared to you. I'm not going to go beyond that, but the literature right now does not ask solid data. It's a true medical need. There's no prior control study. There's small retrospective study. You know, the average PFS is of the order of four months or less, and we think we could definitely beat that. I'm not going to go further on that. I can't recall.
spk02: There was another aspect to your question, I believe. Yes. Yeah, just if you can talk about enrollment timeline expectations. and if you can be substantially enrolled in this study by the time of the PDUFA in November.
spk06: Sure. So, you know, obviously the language of substantially enrolled does not actually have a definition. So it's a matter, we believe, to demonstrate that we have made meaningful progress It's a rare disease, and we will be able to demonstrate that we have made a very strong effort to recruit patients. We are anticipating having potentially an excess of 100 sites globally, and we are actively engaged in opening these sites as we speak. So we think we will be able to demonstrate by the time of the PDUFA date that we have made tremendous commitment and progress to bring a new drug with benefits for patients who currently have no drug to rely on.
spk02: Got it. That's helpful. And I'll just ask one other question on the Phase III study. If you could just talk more about the types of patients that you're anticipating enrolling into this study. Will you allow prior, inherit to, or other targeted therapies prior to going on to the study for posiotinib? Yeah, we are.
spk06: So this is the second line or more study, and it will be essentially platinum-based core initially where they fail, and plus or minus checkpoint inhibitor. because depending on which country you're talking about and within the U.S., practices differ. And we will allow potentially other, with a proper washout period, additional type of therapy, including experimental therapy. We really are trying here to address the medical need.
spk02: Got it. All makes sense. Thanks for taking my questions. I'll hop back in the queue. Pleasure.
spk00: Thank you. Our next question comes from Ed White with HC Wainwright. Your line is open.
spk05: Hey, Ed. Hey, Tom. Thanks for taking my question. So maybe just switching to efflepograstum. You know, we've talked many times in the past about the changing market in the GCSF. I'm just wondering now if there are any recent updates as far as generic penetration goes, what you think the hurdles will be to launch, and when you had mentioned that you had the leadership for the sales team in place, when do you expect hiring the salespeople?
spk03: So thanks for the question, Ed. Let me take the first one regarding the market. We are still very enthusiastic to enter this market. It still sits today over a $2 billion market. The biosimilar penetration really is concentrated in two of them. Overall share of biosimilars versus the innovator products sits at 40% today, really with two lead drivers of that penetration. We really believe today that having a novel agent that is not a biosimilar that we can bring customers, payers, and patients a solution that is not restrictive to some of the inherent realities of the reimbursement dynamics, as well as some of the patient offerings we can bring, puts us in a position to be competitive. I mean, ultimately, we need to get the product approved, which, you know, that is our internal focus. But when we think about this commercially, We remain enthusiastic, and we believe that the core leadership infrastructure that we've kept even post our restructuring carries a lot of the industry's best talent, and we think that that is scalable should we need it. But I think when you look at Salesforce sizing today and oncology, there's a lot of consolidation in the business as well as some post-COVID realities from an access standpoint that we believe we could get done our launch in a very lean and efficient manner. And we may have some nominal ads as needed, but our base commercial infrastructure will be our first line of defense as we engage both group purchasing organizations and large customers out of the gate to get the product off the ground should it get approved.
spk05: Thanks, Tom. And just a question on the restructuring, and you had mentioned the, I guess, the chargeback to Omni. Can you just review why that happened and then, you know, what the run rate is, we think, going forward? Are the cuts that you have made going to be more predominantly seen in the back half of this year?
spk03: So let me take the $11.2 million non-cash reversal first. As I mentioned in my prepared remarks, not only did we solidify an equity investment from HOMNI, but there were also changes to the licensing and the supply agreement, and this is ultimately some of the fruits of those agreements. which enables us to free up near-term cash flows from just a supply standpoint. So that reversal, I think, is the first you're seeing of some of the fruits of the second half of that statement on the licensing and the supply agreement. So that is a one-time non-cash reversal. As it relates to run rate, so I think if you think about the first quarter, it's usually our highest burn quarter, right? So if you look period over period, it was $34.5 million or so a year ago, and today we announced $30.3 million. That has one-time charges in it. So the number is lower by $4.5 million, but there are some of the restructuring costs that are built in there. So the impact of the FTE change, I think, will continue to show itself in subsequent quarters. I also think as we get to our action dates and we start launching these products, you'll see a rise in the back half of the year in the SG&A line just to prepare and execute on those launches.
spk05: Okay. Thanks, Tom. And perhaps the last question just regarding the ODAC meeting. I just wanted to get your thoughts on maybe – What preparations are you doing? What are you expecting the advisory committee to ask?
spk03: Thanks, Ed. So here's how we're thinking about it. We're looking forward to the opportunity to bring this to an advisory committee and really share the full benefit that POSIE could bring in this high area of unmet need. So if you think about even at the acceptance, we had made some statements that the FDA had questions about the status of the confirmatory study as well as questions on the dose. And today we announced the PIDICAL study, which has a dose of 8 milligrams BID, which is different. than the 16 milligram QD registrational data. So for us, it makes a lot of sense. It's very logical that the FDA could have additional questions on dosing and wanting to hear from industry experts on how to bring that issue to resolution. But that's us looking at where we've been, what the discussions have been with the agency. Those are two of the issues that certainly could be discussed at ODAC. But as the date gets closer, we will gain more clarity from FDA and obviously be prepared to represent the full NDA. So our preparation efforts are the last half of your question. They're actively underway. We think we've got the right team in place to prepare and are looking forward to the opportunity.
spk05: Okay, great. Thanks, Tom.
spk00: Thank you. Our next question comes from Mayank Mamtani with B Riley Securities. Your line is now open.
spk01: Hey, Mayank. Good afternoon. Hi, good afternoon. Thanks for taking our questions and congrats on the progress on regulatory filings. So maybe just following up on the prior sort of commentary on the 8-MIG VIB dose, I was just curious between now and ODAC, how much we will learn from your ongoing studies and what might be the data you are able to present to the panel on the 8-MIG and Um, and, and how do you, how do you reconcile, um, you know, a full approval in a different doors, uh, with, uh, you know, actually the approval with, uh, sort of, uh, you know, different doors and schedules. And, and this, my final question was on, you know, the path for, um, first line approval, um, you know, given you have some data there in, uh, BID doors. Um, and, and yeah, so what, what does the path look like in, in frontline? if you could remind us of that.
spk03: Mike, you got a couple of questions in there. Francois and I will tag team this one. Let me start with your first question. So the registrational, the filing is based on Cohort 2. As you mentioned, it's 16 milligrams given QD. And the PMR is at 8 milligrams BID. So both are 16 milligrams per day. We believe that 16 milligrams QD demonstrated a safe and effective dose for a patient population that needs a solution. I think the subsequent data has given an indication that there could be a more optimal way to reduce some of the on-target toxicities. So I think that conundrum that you mentioned is likely a topic that FDA would like to hear from industry experts at the ODAC panel. But we believe that 16-QD is a safe and effective dose and obviously aligned with FDA on the confirmatory study to go with the 8-milligram BIG. Francois, any other comments? Yeah, sure.
spk06: Yeah. So... Exactly. You know, the NDA is based on Chord 2, 16 milligrams, and taken once per day. During the early phase of discussion with the agency, we've indicated to them that we had gathered additional data in Chord 5 and that we had explored, and it was exploratory, we had looked at different dose, different frequency, etc., And, you know, basically ask them if they would be interested in seeing this data or not. And, you know, it's always very sensitive because once you seek an indication, you don't want to add additional data unless it's asked by the FDA. Otherwise, you modify the PDUFA date. Okay. Thankfully, the agency, probably out of concern or of interest for patients, felt, okay, please send us the additional data. And that led to multiple discussion, obviously, as to is BID dosing better, worse, or what? And that's why I think Tom was highlighting to you previously that, you know, that may be a topic for discussion for ODAC. Essentially, you know, we have provided them the data, and during the 120-day update as well, you know, we provided all the updates. It's pretty clear that when you give dosing at BID, we can improve the safety profile, which is obviously of great interest to physicians and their patients. and the FDA, for that matter. So that's fundamentally what's going on here. You know, 16 milligrams, as Thomas said, it's safe and effective on the basis of what we have submitted in the NDA. But the agency may be interested in getting the opinion of various academic experts and industry, et cetera, at the ODAC.
spk03: I think your other question, Mike, was related to cohort four. We're obviously thrilled with the second cohort specific to HER2 exon 20 insertion mutations demonstrating positive results. Our strategy with that is to take this in a stepwise fashion for a number of reasons to initially solidify the first approval for the product, but our aspiration for the asset extends to both beyond just the initial indication, but also beyond even the front line in HER2, evaluating rational combinations in others. But those discussions, as it relates to cohort four specifically with the agency, would occur after we get through here the September ODAC meeting and subsequently the Thanksgiving PDUFA meeting.
spk01: Thank you for the detailed clarification there. And then actually the question I had was also on the ACI data and some of the circulating tumor DNA work you're doing. Can you just talk to the relevance of that in sort of a real-world commercialization setting and what are you trying to get at with the use of a biomarker like that that Yeah, it would be helpful how you see that data evolve and, you know, the role it plays to your commercialization plan.
spk06: I can take this if you want, Tom. So the ctDNA for us is exploratory in nature. So, in other words, it does have no direct impact on the NDA review here. But this is data that, you know, has been accumulated in the scientific literature that you can use or possibly can use a biomarker that is easy on the patient, meaning it's a peripheral blood sample as opposed to an invasive tissue diagnostic or biopsy. And you can actually or potentially monitor therapies. And the first thing you have to establish is, you know, do they correlate? Does the impact of therapy modify the ctDNA level? And that's kind of what we have shown at ACR, and we will add data at ASCO. And the issue becomes, can that be an early, you know, biomarker prior to having imaging or confirmatory imaging. Can you predict the outcome of the patient in terms of positive outcome, meaning response, and in terms of if the patient gets an escape and progression, can you predict it? And that could become a very important tool for us as we go further in development with our program, especially in combination therapy. You want to You want to move very fast because you have, when you do combination, you have a lot of dosing question and, you know, other matters you've got to resolve. And any early biomarker that gives you indication of activity is always very helpful. So it's explore at this time, but nonetheless could become very important in the future.
spk03: And I totally appreciate your point. I appreciate your question there. I think it really speaks to how we're thinking about the asset. So the IP of this drug goes well into the 2030s, and our aspiration for development extends well beyond the initial indication. And I think ctDNA is the direction that oncology is going, and I think the sooner we get a body of evidence in that regard, I think it helps position the direction we want to take this as we look forward.
spk01: Actually, just maybe a follow-up that reminds me of the Dr. Hemak presentation from last year. Has there been any progress trying to work with synergistic mechanisms, like ERAS, C2LC kind of drugs, which can be good combination partners, and you could use a biomarker like this to assess early responders? Yes.
spk03: Yeah, so there has been progress, and when we have something formal to announce, we certainly will. But, you know, rational combinations is something that grabs a lot of our interest at our internal research committee meetings as well as our business development outreach. So when we have something formal to announce, we will certainly do that. Thanks for the question.
spk00: Thank you. And I'm currently showing no further questions in the queue at this time. I'd like to hand the conference back over to Mr. Tom Riga for any closing remarks.
spk03: No, thank you. Thank you for all of the participation on the call and for your interest in Spectrum and all of your questions. We'll be participating at the HC Wainwright Conference later this month. We'll also be attending Jeffries and JMP in New York, and we look forward to speaking to many of you then. And if there's any other questions in the meantime, always feel free to reach out. Thank you everybody. Have a good night.
spk00: This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.
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