Arvinas, Inc. (ARVN) Earnings Call Transcript & Summary

Okay. Great. Thanks for joining us, everybody. I'm Terence Flynn, the pharma analyst at Morgan Stanley. I'm very pleased to have Arvinas with me today. And before we get started, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Thanks so much for joining us today. We have Randy Teel, who's Senior Vice President of Corporate and Business Development; and Ian Taylor, Chief Scientific Officer. Thanks so much both for being here today. Maybe Randy to start, I just thought given Arvinas is a pretty recent public company, you could provide kind of an overview of the company and the strategy. And then, Ian will go over to you for some more detailed questions in the pipeline. But thanks again for being here.

Absolutely. Thanks very much for having us, too. It is great to be back in person again. Yes. So Arvinas, we were founded back in 2013, the original protein degradation company. Our founder was Craig Crews from Yale. He's been working on PROTAC since the very early 2000; 2001, I think the first paper was. But again, we were founded in 2013, got all that IP from Yale, and have been focused very much on oncology and neuroscience. Branching out a bit from there, but that's primarily where the focus is. By the end of the year, we'll be a fully late-stage development company. We've got 2 pivotal Phase III trials starting with our partners at Pfizer for the breast cancer program, which is ARV-471. So we'll talk a lot about that today, I'm sure. We also have 2 programs in prostate cancer, the first of which is bavdegalutamide and will be in a pivotal Phase III study in the second half of next year. So really moving on from being a research stage company. We've shown that the platform works, so exciting to be in that place where we're really focused on execution, getting those trials up and running. And obviously, great to have a big partner in Pfizer to help us do that on the 471 side. In addition to that, Ian and team were going to bring through 4 more I&Ds through the end of next year, including our first neuroscience I&D. So, a lot coming from that perspective. We continue to be able to invest quite heavily in the platform in the preclinical programs. Ian will talk a bit more about the platform, but we're in a great position financially, which we feel fortunate to be there, that we can still be investing in making sure that we're bringing through the next trimer programs, too. Mostly oncology, like I said, about 75/25 with neuroscience. So that's a huge area of opportunity for us as well.

Great. Congrats on all the progress. The other question we get a lot is just as we think about the protein degradation space, obviously, as you mentioned, Randy, you guys were first, you have a lot of Craig Crews know-how. There are other companies working in this space, some public, some private, but maybe, Ian, you could just give an overview of kind of your platform, how it differentiates, versus some of those other approaches and what you see as the competitive advantages.

Yes. We get that question a lot. I mean, as Randy said, we were the first company in. We were the pioneers, had IP starting back with Craig Crews. Honestly, it's hard for us to now... The U.S. is differentiated because all these other companies have looked and seen what we've done and largely copied us. But we're very proud of the platform we've built. We have a very broad platform. So, we really start by looking for ligands for both the targets of interest that we're going after, so like the androgen receptor, the estrogen receptors. So we've built our own screening capabilities, both internally and externally. Internally, our own DNA and coded library screen, where we have, basically, a billion compounds now, where we are looking for ligands. We're also looking for new E3 ligases to hijack and ligands for them. But the bulk of the platform that we've built is really to optimize PROTAC, to optimize their ability to form the trimer complex. So that includes the linker. And so we have computational chemistry. We have structural biology built in-house. We have artificial intelligence approaches that we've actually built in-house that we've also brought in externally with Randy's Health. So, from a competitive standpoint, I don't think there's any company in the space, and there's a lot of them now, that has the breadth of the platform that we do, all to optimize the compounds, to degrade the best in these difficult areas. Undruggable is a big space that, I believe, where Protex are going to differentiate themselves in the long run versus any other modality. I mean, we all know there's a long list of targets that have been historically undruggable. We want to go after those. And so that's how we feel we differentiate really in the competitive advantage, it is the breadth of it. Every individual piece, probably other companies are doing as well. And I don't think anyone's put it all together like we have, and you know, we've been doing it the longest. We have the most experience.

Okay. Great. Maybe we'll dig into some of these, some of the drugs now. Obviously, as you said, you have 2 later-stage programs. You've guided first to presenting some data for 471, the breast cancer drug from the VERITAC Phase II trial later this year. I guess is probably San Antonio Breast in December, given that it's a pretty prominent venue. But maybe just remind us, the patient population in this trial versus the Phase 1B trial, any similarities or differences that we should consider as we think about the data that's going to be coming out later this year.

Yes. So the big difference with VERITAC versus the Phase I is that the patient population is earlier. So in the Phase I, we basically opened it up. It can have up to 2 prior lines of endocrine therapy, 3 chemotherapies. And the VERITAC study is limited to only 1, at most, chemotherapy and on endocrine therapy as well. So, really kind of tightened it from before, it was probably fourth, fifth, sixth line. And now we're more in the second, third line. So that's probably the biggest difference between the 2. People ask about ESR1 mutations. We didn't put any restrictions or any targeting enrichment there, VERITAC relative to the Phase I. In the phase 1 we've talked about, we've had about 50% of our patients who were ESR1 mutants. I suspect that, that will be about the same population just because that seems to be where it's running these days, 50% of the patients in the late stage post-CDK4/6 are about 50% ESR1 mutants. And that is the big similarity between the 2. It's still all 100% post 4/6 inhibitor treated patients. That's important because as we know from publications, there's a lot of ER independent disease that emerges. And so, you always have to be mindful of that, that if the patient's tumors are driven by something other than ER, you can degrade ER you want, you're not really going to get a response. So the fact that we've seen the CBR around 40% that we've seen, in that context where 60%, 70% of the patients are no longer in be driven by ER, we've found that to be quite remarkable so far.

Okay. Great. And then, is that CBR 40%, is that the range, again, plus or minus, recognizing like one patient can swing it either way? Is that kind of the expectation you've been setting for investors?

Yes, exactly. So right, exactly. We still have more patients, obviously, than we showed before, still a smallish number. But yes, we expect our data, the bars, to basically consolidate around that number. We would find that to be a very successful result of the VERITAC trial. Yes, at the doses, and that would be the big thing that people will see. We have 2 different doses, 200 and 500. And so, when we have the data, people will see why we selected the dose going forward for the Phase III study that we did.

And what about biopsy data? Again, I just don't remember the requirements. I know in some of the prior studies, again, it was kind of ad-hoc, like if a patient elected to get a biopsy to have biopsy data. Is that something that's built into this trial? Or is that more optional.

Still optional. It's hard to make it mandatory if you want the study to enroll. And of course, that's the goal is to keep it enrolling, to be able to select the Phase III dose. So we'll have more biopsy data, but it will still be for the minority of the patients. It's just the way it goes. That's why we have a new add-on study that we've talked about, where we can just, the study is solely focused on getting tissue pre and post. That's where I think more of the definitive degradation data will come from. But we will have more, and we will show what we have later this year.

Okay. And again, the other study is this combination study with Ibrance. You touched on this. I think now the data is coming first half of '23. So maybe just remind us, I think initially, the data was coming in tandem. So my expectation was maybe both of them at San Antonio Breast. Now it sounds like this is first half of '23. So maybe any color on that decision? And then the second question is just, as we think about what that trial is designed to show, what are you hoping to see there to drive kind of next steps?

Maybe I'll start there with the second question. So it really was a study design just for PK and for safety. PK, obviously being important, you don't want a drug-drug interaction between 471 and Ibrance that would affect the exposure of Ibrance. Our preclinical data suggests that, that won't be the case, but that's why we run the study to see. And then we also don't expect to see any overlapping toxicity based on the individual profiles of the molecules. But again, that's why you run the state. So that was the main driver for the study remains the main driver. Now we recognize that people always want to have efficacy. Obviously, we're going to be following our patients for efficacy. That was one of the reasons to delay the study to the first half of next year rather than the end of this year, because we wanted the data to mature. So from a company perspective, we feel like we are kind of getting past the point where we have to show interim updates all the time. So when we give our updates, we want them to be more fulsome to use that word, so that's one of the reasons to delay. But we also recognize that because most of those patients in that study will be post CDK4/6, people just say, what's your bar for efficacy? Well, we said that it is safety and PK study, but there wasn't a lot of data about patient responses post- CDK4/6 with a CDK4/6 combo. Now there is more data. There's the MAINTAIN study that's come out. So we recognize people are going to be looking at that data and comparing to ours, even though it is a safety and PK study, I'll say it again. But we want that data to mature so that if you are going to make that comparison, you at least have a better data set to compare. So, waiting for the first half, and also to do it at a medical meeting. If we are going to let it mature, we would prefer to have it at some medical meeting as well.

So, by maturing, do you mean basically having some kind of PFS data?

Well, I mean, there'll be duration data probably. We're not really guiding on the specifics of the data, but it's allowing more events to happen, more duration to emerge.

Okay. And I guess, as we think about the Phase III program, so you and Pfizer have talked about starting that later this year, maybe just remind us kind of, I think you said 2 trials, a little more detail on those trials. And then will you have all the information you need from, again, VERITAC and, again, this Phase 1B to start those trials? Or are there any other pieces, given it sounds like you want mature data from the Phase 1B, that's an input into the Phase III program. So sorry, a lot.

Yes. I can keep going what you want.

Well, I was going to insert a related point, right, which is that we've gotten asked, just because some of the SERDs have had some DDI questions with the CDK4/6 inhibitors, we've gotten asked if that was the reason to delay the Phase 1B. The answer is no. So we're still very much planning to start both the 2 phase trials by the end of the year. So that's not it. And obviously, just because we are not showing the data yet, it doesn't mean we can't use data from that to help us take our decisions.

Yes. So there's really nothing on the ongoing studies that's gating for the registration studies that will have. Like I said before, when we roll out the VERITAC data, people will see why we selected the dose that we selected, between 200 and 500. Obviously, we're exploring doses like that in the combination, but waiting for that data is not going to delay the start of the registrational combo study.

Okay. And any details you can share? I think one is a monotherapy study, one is a combo study, but just maybe design, patient population, anything on that side at this point?

Right. So I mean, we haven't really been that specific in the past, but certainly, the monotherapy will be in the second-line plus setting and the combination will be the first line.

Okay. Great. And then, how to think about the adjuvant opportunity? I mean, that's the other bigger part of the market. I mean, is that a trial that would start down the road? Are you and Pfizer thinking about that?

Yes. So we're definitely talking about that, planning for that. As I mentioned, we have a new adjuvant study. We will have started that. We'll have some data from that. That also will not be gating for the ads but we're not going to wait for that study to complete before we do the adjuvant. I think you've seen other companies do that as well. They've got a neoadjuvant that is overlapping with the adjuvant. So we very much the same. We recognize that adjuvant is a huge opportunity. We want to get to there quickly as possible. Part of that is selecting the dose and the new adjuvant will help us just judge that very briefly, you could think of it almost like a run-in to the adjuvant, but that's a big focus on it.

Okay. Understood. And again, you touched on the DDI questions with some of the SERDs, but the other is just the lack of activity, with Sanofi pulling back from there now. I know you guys have talked in the past about differential activity of your PROTAC versus the SERDs, but maybe, Ian, you could just kind of remind us of some of the key points, why you and Pfizer are still confident moving into that large Phase III program, given some of those competitor data points over the last couple of months.

Yes, we've been very, very consistent over the years, and it has been years that PROTAC is different than a SERD. PROTAC actively brings the E3 ligase to the estroneceptor to ubiquinate and integrate it. It's a very direct mechanism, a very efficient degradation mechanism. As opposed to a SERD, much more indirect, seral bind to the receptor, can't get it, make it look denatured, more hydrophobic, the seltinal has to recognize that and ubiquitinate it, Or if you believe the Genentech data, it kind of will lock the estrogen receptor on the chromatin, won't let it move. The cell recognizes, oh, something's wrong, ubiquinates it and then degrades it. That's a very much indirect mechanism, much less efficient. And that's been very consistent with our data preclinically, where we look at degradation, we always see 471 is a much better degrader than these other SERDs because it is that active direct mechanism. So we've always felt that the best degrader will win. We've done a lot of profiling against Fulvestrant, for example. And preclinically, people have seen that data. And we think that degrading is better than antagonizing. So these other molecules, they are degraders, but they're sub-optimal degraders. There's no 2 ways about it. They do not degrade as deeply as 471 does. So in the end, we believe that degrading is the best way to go. And I think what we're seeing is sub-optimal degraders having sub-optimal results where we think an optimal degrader will have optimal results. So Pfizer shares that vision. They've seen obviously our data. So that's why the overall strategy is to make 471 the endocrine therapy of choice, whether it be the monotherapy or in combination with the CDK4/6 or PI3K or any other mechanism that you could.

Can you just remind us on those degradation levels? I know you mentioned 471 versus fulvestrant. Did you do the study versus any of the oral SERDs from Sanofi?

Yes. We've profiled every molecule that we can, that we know the structure of preclinically, and seeing that 471 has the deepest degradation, which is obviously-- we've shown our data at 90%, 95% plus degradation with 471 and the other molecules don't approach that.

Okay. Understood. Maybe moving on to the other program. Again, I always call it ARV-110, but because I can't pronounce it.

Bavdegalutamide.

But again, here, I know now you're moving forward into Phase III. I think there was maybe some hope for an upside scenario, maybe like a Phase II that could lead to an approval. I know that was a more recent update post the 2Q press release. So maybe you could just elaborate a little bit more on the decision to go forward with the Phase III instead of trying the accelerated approval path, which, again, a company like Clovis was successful for in the PARP space. But again, I know more of a question, maybe an upside scenario.

Yes. That was our original strategy, to go for a single arm or approval path and we went to the FDA with that, also with our study, the confirmatory Phase III design. The feedback that we got in terms of some of the inclusion criteria, exclusion criteria as well, as the fact that while they set our dose, our selected dose of 400 mg was okay to go forward with, in the context of project optimacy, you have to really prove that a little bit more with the lower dose as well. And we have some lower dose data, but not enough, and they said you need more patients on a lower dose really to prove that 400 is the optimal dose. So given that, we looked at the time lines, we looked at the fact that, okay, if you do a global randomized study, you don't have to do the confirmatory study. Timeline didn't shift that much in the end, and so we said, okay, the best way to do it, conserving patients, resources, etcetera, let's do the randomized study, global. That means you have to go back to the FDA with that design. You have to go to the EMA with that design as well to make sure it's all harmonized because you're going to be doing both. And that's why the study now puts us to the second half of next year. But in the end, it doesn't cost that much time, and it's actually 1 less trial because we don't have to do the confirmatory study. So while there was precedent for the accelerated approval, based on project optimism and some of the feedback that turned out not to be probably the best way to go.

Yes. Okay. And in terms of some of that lower dose data, maybe just remind us when are we... I'm assuming sometime next year with first half, second half?

Yes. So that's a good question. So I will say that getting the second dose data because the study is already ongoing, we already have some data, it's really not gating to the study. So it's not like that we have to get that and then do all that planning. We can do everything basically in parallel. So that's an important point. When we get that data, maybe Randy remembers, I don't know if we've guided to that.

No, definitely, we haven't. But I mean, it will really inform the dose really confirm the dose for the Phase III. So still planning to start that in the second half of next year, in that time frame. Okay, got it.

And remind me so that's basically like, are you enriching , I'm assuming you're enriching for mutations in that lower dose cohort or is still in all-comers?

No, it's still an all-comers. Yes, exactly. It's really a differentiation on PK, right, from the dose that we proposed. Obviously, more safety data. We'll obviously get efficacy data as well, but it's really just to show that it's a safe dose and the 400, that's differentiated.

Is it just one lower?

We already had a trial ongoing anyway. So, we're enrolling more patients at that lower dose, so it really doesn't slow us down.

Okay. And is it just one lower dose?

Have we talked about it? Yes, I think it's just one lower dose.

Okay. The other question, I guess, is just the Phase III trial. I know you talked high level. Maybe just remind us what the design is of that study in terms of patient population, endpoints, and again, anything else as we consider thinking about kind of enrollment timelines that could be run.

Sure. So it's going to be in the AR mutant population that we've talked about that we've seen a really nice signal, again, late line population, post enza and abi essentially, where we believe that the AR mutations, that they're responding well, are a signature for those tumors still being AR dependent. Right. So very similar to what we're talking about with the estrogen receptor. Ans so, the discussion will be, obviously, the size because it will be a targeted population. It won't be a huge trial. The thing we'll be talking about with the FDA and the EMA is what the comparator arm is. We've not guided on that, but those are the main things. But still late line in terms of the global idea in that mutant population.

I know you haven't guided on the compared arm, but what are some of the, the range of possibilities, if you think about what could be relevant in that patient population? Is it like chemo, is it like Taxotere?

So that's where you could consider having the other Abienza comparator as well as chemo. And you can imagine that in Europe that might be more important than in the U.S., and that's part of the harmonization that we have to do in talking to both. But you can imagine, basically, an investigator choice as well. I see a lot of those types of studies.

Right. Okay. Got it. Understood. And then in terms of like how, I guess we still don't know the size of it, but in terms of enrollment, I mean, a year, is that fair?

Well, I'm going to say is we're going to go as fast as possible to employ as many strategies as possible to make it fast because obviously, we're in competition with other not just modalities, but other agents, Orions out there, basically in a similar population. We know there's other degraders BMS, et cetera.

Okay. Got it. And then the primary, assuming this is PFS?

Yes, almost certainly.

Great. Well, maybe moving on to 766. Again, this is another AR degrader. Just remind us, again, structurally, like what was this one designed to do that 110 can't?

Sure. So bavdeglutamide, we always knew that it couldn't degrade one of the mutations in the ligand binding domain antigen receptor L702H. So all these mutations make the engineers sector more promiscuous. They can be activated by more than just testosterone, and that's why they're driven by resistance mechanisms to these other agents. We knew why bavdeglutamide or 110 could integrate it. It was a structural clash, it just can't bind to that particular mutation, and therefore, can't degrade it. So knowing that from our structural studies, when we Designed 766, we and see they would degrade 7028 and in fact, it does. When we started that program really started as a backup. 110 was the first PROTAC in humans ever. So we said it'd probably be prudent to have a backup to that because we weren't really sure of what would happen. But if we're going to have a backup, we want to degrade L702H. And when we started, 7028 was like 2% to 3% of the population based on the literature. It wasn't that much, but we still said, well, good to pick it up. Over time, since then, L702H has actually become the most probable mutation in the 9% to 10% percentage range. So it's actually become more important over time to have a molecule that degrades L702H. So that's the main difference. Obviously, they are different molecules. They do have different other properties like PK and some Adi, nothing major, but they're still different. And so we'll see how that plays out in the clinic in the Phase I study. And we're trying to generate that data as much as possible and get to be able to select the recommended Phase II doses because we will have multiple doses and then see how that profile plays out and then be able to position 766 relative to 110 based on clinical data because preclinically, we know what they look like. Clinically, we'll see.

Right. Snd then what have you guys said in terms of data timing for that Phase 1B?

End of this year, right?

For 766? Yes, end of this year.

Okay. Got it. And is this an enriched population, like are you only enrolling L702H? Or are you enrolling just in all-comers just because it's more about data?

Yes, exactly. It's all about speed, PPA, safety, exactly.

Okay. But your expectation would be it would be about 9% to 10% of patients would have it.

Yes. And based on what we saw from the VERITAC study, that's basically where it was running.

And of course, it still picks up everything else as well.

Yes. And then the Phase II for 766 is also planned to start by the end of the year as well. So we'll roll straight into that.

And that would be a more enriched population, I would assume, right, where you would only enroll the L702H?

We haven't talked about the design. Again, it has a broader profile. So, I think just enrolling only L702H is not likely, but it could be broader. Obviously, ARDENT was set up quite uniquely with 4 different cohorts. I don't suspect our Phase II for that. We were learning a lot in that study. I don't think we have to learn quite as much with the 766 study, but you'll see that by the end of the year.

Okay. And I guess, obviously, you guys have the Pfizer partnership. Randy, this is probably a question for you. As you think about 110, again, is that a program that you feel like you guys can carry through commercially solo? Or is that something where you'd be open to a partnership as well?

I'd say we are confident that we can, for sure, especially, I think with the narrower indication, we feel very well situated to do that. The capital situation is really positive for us. We have an ongoing relationship in place with Foundation to do the competing diagnostic for that. So it's pretty straightforward. However, of course, it's always true that if someone can convince us that they could help us go broader, faster, earlier, to an earlier stage pre-NHA, certainly, we'd be happy to listen, but we feel pretty confident where we are with the resources we have to move forward and still bring everything else into the clinic as well that we have coming from the pipeline. So, we feel good.

And then what would be the trigger for those pre-NHA studies? Like what would you guys want? Would you just complete the Phase III first in the late line and then you would go to those studies? Or is that something you could run in parallel essentially?

I would say, yes, overlapping. I don't think we need to have the data from those to go earlier. The reason to go earlier is to get into lines of therapy where AR is still driving, depending on the mutation. If that's the general philosophy, then you don't need to wait for that, you want to do it overlapping.

Because it's not that we degrade the mutations better, right? So you'd expect that earlier in the treatment paradigm, you've got more AR driven disease. There's no reason you couldn't be active there as well.

Okay. Maybe just in terms of last topic, I mean, you touched on this, Randy, the 4 new INDs through '23. Maybe just any update on kind of progress towards that goal? Is this something that are going to be staggered over that time frame? Or is it more like back-end 23' loaded just as we think about kind of the rollout of those other INDs?

Well, I think the clinical team definitely prefers a staggered approach, but not much more we can share in terms of timing. You will see more data come out as we get closer to that. It's been 9 months now, but we had BCL-6 data last year at ASH in December. That's certainly one of them that's on the pipeline that could be an option. It hasn't been more specific on timing yet, but it will definitely be a different looking situation this time into next year with all the new programs coming into the clinic as well. looking forward to it.

Okay. And I know KRAS was also on the list. I mean is that one that's still a high priority? I know there's been some questions on kind of the role of these agents in the frontline setting in lung cancer, but is that still a target of interest for you guys?

Oh, yes, absolutely. KRAS, we've talked about this pretty openly, is actually multiple programs in one. So we pivoted away from G12C. That's where a lot of our activity was because we did not see differential biology of a PROTAC using an irreversible warhead versus the irreversible compounds for Mirati and Amgen, which makes sense because you lose the catalytic activity of the PROTAC. So we pivoted to D and V and the pan-KRAS. So yes, we're investing a lot in care. So it makes perfect sense for PROTAC. So we're pretty excited about that. We have MIC as another undruggable on the pipeline. We have the neural programs. But our INDs will come from, I think Randy said, from our name programs, but also from our unnamed well. We actually have more unnamed than named programs, honestly.

Okay. Got it. So we could get some surprises. And remind us on the CNS side, I know that's another part of your platform that's differentiated, the ability to get through the blood-brain barrier. So maybe just remind us of kind of the targets that you guys were going after with some of the initial programs and anything we might see later this year, maybe some more data on the CNS side? I know it's still pretty important for you guys.

Oh, yes, absolutely. So our 3 name programs are Tau, synuclein and Huntington, Newton Huntington. So those are progressing well. All of our programs will have PROTACs across the blood-brain barrier. That kind of goes without saying, but we've been very, very successful. And I think you will see data later this year. We're not guiding yet showing some of that data on our programs. So that will be a little teaser for you.

Okay. Is that one of the name programs?

I'm not going to make me go farther than that.

Okay. And I guess in terms of, maybe, just last question in terms of balance sheet. I mean, Randy, you mentioned this, you guys are, given the Pfizer collaboration and the upfront, pretty strong position there, they also help fund a large portion of that program. So maybe just remind us what you said about kind of future cash needs burn?

Absolutely, yes. So, as of the last earnings, we had $1.35 billion in cash. And we've said that for multiple years beyond 2024. So obviously, it's great to have that amount. Obviously, the burn will go up as we move multiple programs into Phase III trials, but we feel great about where we are.

Great. Well, thank you so much for being here today. Really appreciate it, Randy, Ian. Nice to see you. Yes, thanks so much Yes. Thank you very much.

Thanks for having us. Appreciate it.