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

Good afternoon, everyone. Thanks for joining us for another session at the 41st JPMorgan conference. I'm Brian Cheng. I'm one of the senior biotech analysts here. Presenting next is Arvinas. I will introduce the management team from Arvinas, and then we'll follow this presentation with a Q&A session. I'll turn the stage over to Arvinas.

Thank you very much. Hello. My name's John Houston, I'm the CEO of Arvinas. It's a great pleasure to be here today to talk about the company, our platform and our pipeline. Before I start, I'll show you this because I'll be making forward-looking statements and some of those may come to pass and some may not. So Arvinas was founded in 2013. Professor Craig Crews of Yale University formed the company. And the initial concept of the company was to design heterobifunctional molecules that could hijack the cell's natural degradation process. So a heterobifunctional molecule or PROTAC, as Craig called them, is made up of 3 components. At 1 end of the molecule, there's a ligand that binds to a specific that you'd like to degrade. The other end of the molecule binds to a specific E3 ligase that you want to recruit from that natural degradation machinery, and those ligands are connected by a linker. So when you put the PROTAC into cells or into animals, they make their way through the cells and 1 end binds to the target. One recruits the E3 ligase and the PROTAC allows this proximity event to occur where the 2 proteins come together and the ligase can then ubiquitinate the protein. And once you get 4 ubiquitins attached to the protein, that serves as the cellular signal to drag the protein off to the proteasome, where it's degraded down into peptides and DNA and [indiscernible] into the cell. So after that point, the PROTAC is released and you get iterative put rounds of degradation. So a very unique approach, very different mechanism from inhibition. In fact, the list of things you look at why the technology is very different from inhibitors, it eliminates the target rather than just occupying it and inhibiting it. It can disrupt scaffolding function of target proteins, which is very important in dampening signaling and combine and degrade classically unduggable proteins, which is very exciting, and as I said before, can act iteratively or catalytically. And these PROTACs have been made oral. We can make them oral. And not only that, we get broad tissue distribution and we can get them across the blood-brain barrier, which really allows us to think about neuroscience as an area of interest, and I'll show you some slides on that later. So as the company approaches at this time 10th birthday, where are we? Well, certainly, we've been able to crack the code in terms of understanding how to make drug-like PROTACs and show that they translate into the clinic in terms of efficacy and tolerability. So the platform has got to that stage of proof-of-concept And we can see that as a mini industry that's grown up around that, many, many companies in the protein degradation space, many big companies in that space. So it's a very exciting stage to see a new modality taking hold like this. And Arvinas had been able to have a series of firsts over that period of time. The first company to get a PROTAC to the point where it was an IND, the first into humans, first into Phase II. And then just at the end of last year, we got our breast cancer PROTAC into its first pivotal Phase III study. And we also have 2 drug candidates in Phase II. So a very exciting series of firsts for the company and we hope to continue those. And we're deployed in both oncology and neuroscience as the areas of interest. Right now, we have $1.3 billion in cash. That gives us a lot of flexibility to move our portfolio forward. And we're partnered with a great array of companies, most notably Pfizer who are partnered with us in a global co-development and co-commercialization on ARV-471. Now when you look at our pipeline, and here's a snapshot of the pipeline as it stands today, you can see we have a lot of activity in both the breast cancer space and the prostate space with these 3 drugs: with ARV-471, with bavdegalutamide or ARV-110, and ARV-766. I won't go through all of these because I have slides later on where I can go through this in a little bit more depth. But the little green stars that you see here are indicating where we believe we'll be able to have pivotal trial starts. So we have just started 1 with ARV-471. We have others coming up, both in 471 and with bavdegalutamide. And we also have a number of discovery programs in our research pipeline. We have about 20-plus programs there, and we're now starting to see those programs coming to the stage where we have clinical candidates, and I'll talk to 2 of those today. So just turning to breast cancer and our 471 program. So clearly, breast cancer is still an area of great unmet need. One in 8 women in the U.S. will develop breast cancer in their lifetime, and 80% of all newly diagnosed cases of breast cancer are ER-positive. There have been many therapies for breast cancer and right now in the ER-directed area, fulvestrant is a very successful standard of care. But it has limitations. It's intramuscular delivery. And in this post-CDK4/6 setting, you start to see a dropoff in its efficacy. So post 100% CDK4/6, you see that fulvestrant has a clinical benefit rate of around 10% to 14% and progression-free survival of about 2 months. So there's a real opportunity to come up with a better ER-targeted therapy and we believe a compound that has superior degradation, that is oral, that has a safety tolerability profile that allowed it to be combined with multiple compounds could be a best-in-class compound, and we believe 471 has that capability. And this just gives you a snapshot of the data from our VERITAC Phase II program, which we published last year. The first thing I want to point to is the nature of the patient population that this drug was tested in. As you can see at the top there, it was 100% post-CDK4/6 therapy, around nearly 80% prior fulvestrant and 45% prior metastatic chemo. We believe this is the most heavily pretreated patient population for any ER-targeting therapy. So we're very excited when we saw the data. In the all-comers part of the trial, we saw a CBR of 38% and when you looked at the ESR1 mutant tumors in that population, we saw a clinical benefit rate of 51%. And then that translated into progression-free survival with the all-comer patients, that's 3.7 months. And then patients with ESR1 mutant tumors, again, 5.7 months. So we are incredibly pleased with this to have this type of data in such a late-stage patient population. The treatment-related adverse events were low, just 6% at the recommended dose that we have for our Phase III, 200 mgs. And in 35 patients tested at this dose, there were no dose reductions and only 1 discontinuation. So that set us up in a way to think of what would come next and that's our Phase III plans. And the Phase III pivotal trial that has just started, which is being done with our partner, Pfizer, it looks like this. And it's a very different design from the first VERITAC trial, it's a randomized study head-to-head with fulvestrant. But you look at the patient eligibility criteria and it's quite different. It's still 100% post-CDK4/6 but now no prior fulvestrant, no prior chemotherapy for local advanced/metastatic disease, so a much earlier treatment paradigm for this trial. The primary end points are going to be 2. We're going to have an ESR1 mutant population to look at and also an all-comers an intention-to-treat population. And so we're very excited about that. And also the nature of the fact that in the post-CDK4/6 scenario, ER therapies appear to have greater activity in these ESR1 mutant tumors. 471 degrades ESR1 mutant and ESR1 wild-type equally. And we've already demonstrated signals of efficacy in both ESR1 mutant and wild-type patients. So we believe we have an opportunity here to see positive results in both the ESR1 mutant population and the ITT population. So as I say, VERITAC-2 will enroll less pretreated more ER-driven patients. And when we looked at the VERITAC trial to see if we have any patients in that trial that would have this -- the profile, the patient population profile that would be eligible for Phase III, there were 8 patients in that trial that were 100% post-CDK4/6 but had no fulvestrant and no chemotherapy. And very interestingly, those patients showed a 63% CBR. Now only 8 patients, but if that was reflective of the type of data we might see in this trial, that will be very exciting. So when you look at the book of work for 471 in the coming 2 years, you see that we have got quite an aggressive approach right across the board from late stage to adjuvant. Ongoing right now, we have the TACTIVE-U program, which is an umbrella study that has abemaciclib and ribociclib in combination. We also have a study with -- on monotherapy ongoing still and our second-line study. In the first-line study, we have a program with everolimus combination there and also the continued view of 471 palbo Ib trial. We also have a plan for a Phase III first-line trial with 471. We originally indicated we tried to have that started at the beginning of the year. And no doubt, a lot of you saw that we set out an 8-K at the beginning of the week saying that we're moving that trial to start in the second half of the year. What we saw was a boost to palbo exposure in our Ib trial. So we're going to have a meeting with the FDA to discuss that. Happy to answer any questions in the Q&A session about the implications of that, but we believe we could be back on track in the second half of the year with that trial. And of course, as you look at the adjuvant setting, we have a new adjuvant study that's ongoing and we're planning for adjuvant as well. So when you look at the whole comprehensive nature of the development plan for 471, we believe by the end of this, we'll have positioned 471 as the backbone therapy of choice for an ER therapy. So we're very excited about that. So turning to prostate cancer. Again, another area with significant unmet needs. 1 in 8 men will be diagnosed with prostate cancer during their lifetime, and prostate cancer is the second leading cause of cancer death for men in the U.S. There have been a number of effective therapies in this space, enzalutamide and abiraterone. But patients progress, you get resistance to these drugs so there's a significant opportunity to come up with a drug that will operate and work in a setting of resistance. And again, we believe bavdegalutamide, our lead AR degrader and ARV-766 have significant opportunities to be those unique types of compounds. But we've already seen activity of both these compounds in the late-line setting, suggesting potential for even stronger benefit in earlier lines as we move into more AR-driven disease. And in fact, when you look at the progression or the journey a patient goes on in prostate cancer, looking from right to left of this slide, in the pre-metastatic castration-resistant prostate cancer, a lot of the tumors in the disease are heavily AR-dependent, AR-driven. As the patients progress, they get exposed to novel hormonal agents, become less AR-dependent, more resistant, leading to a point when they get into the third and fourth line where significantly resistant to the current therapies. So when you look at the highest unmet need in that late stage, it's really for therapies that can overcome resistance mechanisms to novel hormonal agents and provide a durable response. And even in the earlier stage -- treatment stage, the highest unmet need is well tolerated therapies that extend survival and freedom from progression. Again, we believe when you look at the data we got from our ARDENT study of bavdegalutamide, it fits in both these unmet need areas. So bavdegalutamide shows tolerability and compelling signals of efficacy in this late-line stage. We saw in our Phase II data 46% PSA50 responses in patients that harbored tumors with AR 878/875 point mutations, quite a significant response for such a late-stage patient population. We had 0 grade 4 or greater treatment-related adverse events, really low rate of discontinuation and dose reduction. And we presented this data last year at ASCO. Now because we see this type of response in a very late-stage setting where the majority of tumors are not AR-driven, it gives us great hope that as we move into earlier treatment paradigms, bavdegalutamide will work even better. And in a setting where it's pre-NHA, most patients will be expected to have tumors that will be responsive to a drug like bavdegalutamide. So when you look at the book of work, so to speak, for bavdegalutamide and for ARV-766, you can look at it in the post-NHA setting and in the pre-NHA setting. In the post-NHA setting, we are planning to have bavdegalutamide in a pivotal Phase III trial in the second half of this year. Again, that will be in this very late-stage patient population. We'll also have ongoing right now, bavdegalutamide-abiraterone combo study, Ib, and that's continuing. And for 766, we have, just last year, started the Phase II dose expansion. And then for the Phase I dose escalation part of the trial, we'll have data out in the second quarter this year that we'll be able to share. And then this pre-NHA area, which will allow us to move into an earlier treatment paradigm, we're expecting to plan and initiate a Phase IIb -- Ib/II in the earlier setting of this year. So overall, I think we'll be able to position both bavdegalutamide and 766 both in this post-NHA and pre-NHA setting over the coming years. So we have other programs that are heading our way as well from our discovery platform. We have, as I said before, over 20 preclinical programs in that space. We expect it to have 4 first-in-human studies from that program, those programs over the next 2 years. And this really shows you the capabilities of the PROTAC platform that we're able to generate a sustainable set of clinical candidates. And we're at the stage now where we should have 2 INDs or CTAs by the second half of this year and another 2 in GLP tox and then get into a sequence of being able to have at least 1 clinical candidate per year. And we believe we have one of the deepest and most diverse pipelines in the protein degradation area. Now 2 of the programs that we revealed and discussed in our 8-K on Monday and in the deck today, our clinical -- new clinical candidates. One is a BCL6 PROTAC degrader. We see that as potentially being a first-in-class therapy for diffuse large B-cell lymphoma, DLBCL. So BCL6 is a genetically mutated up to 85% of DLBCL, which is a subset of non-Hodgkin's lymphoma. And in the setting of BCL6 inflammatory conditions when BCL6 is switched on, you see BCL maturation. And at certain point, BCL6 switches off. But in a situation where we have a mutation of BCL6, it stays switched on and you have continued B-cell proliferation and leading to these lymphomas. So finding an approach to switch BCL6 off is the approach that we are taking. And this is a very important disease area. More than 18,000 people are diagnosed with DLBCL each year. And as you can see, that's largely devoid of any oral options and there's no real BCL6 targeted therapy on the market or in the clinic. So there's a real opportunity for our degrader in this space. And there are additional opportunities as well beyond DLBCL, Burkitt's lymphoma, follicular lymphoma and even solid tumors. So we're very excited by the profile of the compound. And I'll just show you at least one piece of data. Last year at ASH, there was a tool, compound that we had that we showed data on. This is our clinical candidate now, and it's 10x more potent. And what you're seeing here on the y-axis is the mean tumor volume. And on the right, you'll see over time in days of dosing the comparison of the vehicle and 2 doses of BCL6, where you see complete tumor stasis at these low oral doses that are daily. And you also see in that graph on the top left, 95% to 100% degradation of measurable BCL6. Now we're seeing this activity in multiple different models. So we believe that this is a clinical candidate that can actually offer a lot of opportunity in this space. It's currently in its GLP talks. If it gets through that, then we'll be IND or CTA enabled in the second half of this year looking towards the clinic. And maybe even more excitingly, in the neuroscience space, we are starting to see the beginnings of our new pipeline there. We've been working on neuroscience probably for the last 4 years at Arvinas, and there's been a number of challenges to get to the point where we have good PROTACs there. They've got to be able to cross the blood-brain barrier. They've got to be able to reach targets in the deep brain regions. They've got to be able to degrade disease-causing proteins inside the cell when they get there. They've got to be able to differentiate between mutants and wild-type proteins, like you have to do with mutant Huntington. And we also want to be able to deliver them orally. Well, the team has managed to do all of that with a lot of the new PROTACs we have. And this LRRK2 program that I'm going to show you, in fact, does every one of these things. So it's very exciting. So when you look at LRRK2, it's clearly a target that could be heavily involved in Parkinson's disease. And Parkinson's disease is the second most common neurodegenerative disease with a diagnosed prevalence of 2.3 million in U.S., Europe and Japan. There are no disease-modifying therapies that have improved for this in PD. And mutations and increased expression of LRRK2 lead to a number of different dysfunctions, lysosomal dysfunction, neuroinflammation, mitochondrial damage and loss of dopaminergic neurons. And the familial mutations and sporadic variants where you get 2x increase in expression implicates this particular target in PD quite strongly. So we're, again, very excited by the profile of the compound. And just again to give you one piece of data, now this data was shown at a meeting last year, but we didn't say what the target was. Now we can say what the target is. It's LRRK2. And this is a study where we are dosing cynomolgus monkeys with our PROTAC on a daily basis. And then you look at the downregulation or degradation of LRRK2 in each of these deep brain regions. So what you're seeing here is degradation in the cortex, the striatum and the cerebellum. So very striking data showing that the PROTAC is getting into the brain. This is oral delivery as well, so it gets into the brain, and it degrades the target in these deep brain regions. So this program is also in GLP talks. And again, if it gets through that, it will be an IND or CTA in the second half of the year. So when we tie all that together, in the next 2 years, we expect to have 4 pivotal trials ongoing. We've already got one started. So that will be in breast and prostate cancer. We'll have 5-plus clinical data readouts over those 2 years, including the top line data from at least one of those pivotal trials, and then 4 first-in-human studies of the -- our new PROTAC programs in neurology and -- oncology and neurology. So very exciting stage for the company now with a very rich portfolio in the clinic and the emergence of this new wave of PROTAC programs from discovery. So we're going to be happy to answer any questions that you may have, and thank you for your attention.

So we're going to start the Q&A session. [Operator Instructions] So I will just kickstart with a few questions just based on what you updated on your VERITAC-3 study earlier this week. Just a quick question is, can you give us a recap on what prompted the decision to make the changes in the study?

Yes. So we had an end-of-Phase II meeting with the FDA in September last year. That was ostensibly to go through our Phase III protocols, both for second-line and our first-line study, and also discuss our recommended Phase III dose, which is 200 mgs for both of them. So the FDA, it was great meeting the FDA. We're very happy with our plan for the second line and approved the 200-mg dose. So that was given the green light. And that, as I said before, that study has started already, and Pfizer is running that Phase III. With the first-line study, they liked the protocol, but we only had 30% of the available data. There was -- it was an interim readout of the data in terms of the 200 versus 500 that we had. So the FDA said, that looks fine but give us the whole complete package. And when you do that, we'll give you the okay to go forward. So the game plan was to complete that data, get that to the FDA in November and go from there. So we found that the data that when it came in, which was roughly in the beginning of December, we actually were seeing a boost to the palbociclib exposure by about 50%. And we're also -- there's a corresponding 10% increase in neutropenia. Now palbociclib has kind of a neutropenia effect anyway, around 66% neutropenia in palbociclib trials and in treatment with palbociclib, and we had about 76% in combination with palbociclib. The 50% boosted exposure, to put into context, palbociclib has a kind of a range of plus or minus 30% exposure boost or decrease in the natural use of palbociclib. So this 50% was just outside the kind of the normal boundary where you say, okay, that's within the range. So working with our Pfizer colleagues, we decided that we'd package the data together and send into the FDA for a discussion. We also had a game plan for how we could mitigate this in terms of starting up the first-line trial later in the year. And we've requested a meeting in the first quarter with the FDA. Now as soon as we requested the meeting with the FDA, we certainly felt that we couldn't hold to the stated plan of starting our first-line study in the first quarter. So that's why we released the 8-K on Monday to say that we're moving the trial start into the second half of the year. So we'll await the meeting with the FDA. I think we've got a plan that seems reasonable. In the normal course of events, if you have neutropenia with palbociclib at that top dose, you're just dosed down to the next dose. And that would be apparently, I think, the most obvious thing, but we haven't actually had the FDA discussion. So once we have that, we'll be able to start up the first-line study. And it's more likely to start out with maybe a lead-in to look at 2 different doses of palbo.

So in the 8-K, you talked about how you're making changes, potential amendments in the VERITAC-3 in this combination study with palbo. What are some of the potential amendments that you think will be incorporated in Phase III? And perhaps out of your FDA meeting, what could be some of the potential scenarios that you think will come out of this meeting?

Well, I mean we haven't had the meeting yet, so I'm very leery about talking about what may occur. But the amendment you're talking about is just what I mentioned, that we'd have a run-in study looking at maybe 2 doses of palbo, the top dose and the dose below that. And we believe that the dose below 125, the 100 mg dose, the palbo exposure will go back to its normal exposure level. So there'll be no loss of efficacy in the trial, and the neutropenia level should drop to the accepted range for palbociclib.

Okay. And maybe just want to touch on VERITAC-2 as well, your pivotal Phase III that's currently ongoing in the second line. Today, you talked about how the study design itself is somewhat different than what you've done where these patients are less pretreated and just based on the eligibility criteria. So can you just talk about how we should think about the bar of -- the bar that you think the fulvestrant arm could hit in terms of PFS? And any color on how -- what are the key factors that are driving your powering assumptions?

Yes. And we've got our CMO, Ron Peck here, and then I can ask him to add some color. But certainly in terms of the trial design, yes, it's 100% post-CDK4/6 but no fulvestrant, no chemo. So we're certainly going to be in an earlier patient population. We know that when you see fulvestrant in a post-CDK4/6 setting, the CBR rates for that are about 10% to 14%. PFS is only 2 months. When you look at 471 in a much later stage, as I said before, we're seeing CBR rates of around 38% for all-comers, and we're seeing a 3.7-month PFS in that setting. So I think in the late-stage setting, we're already better than fulvestrant in an earlier-stage setting. So I think when we get both of them together in the same setting, we're going to see a significant difference between 471 and fulvestrant. Ron, do you want to add anything to that if you have them?

You can come up here, yes. You can also introduce yourself.

Yes. Hi. I'm Ron Peck. I'm the Chief Medical Officer. Just to add to what John said, so first of all, we took pains to make sure that the population that we're designing would not -- give 471 its best chance to show what we believe is going to be a differentiated profile versus SERDs. So that was very important. We had a very heavily pretreated population, just reinforcing what John was saying. I think the other question was around power. And so one thing was to make sure that this study was adequately powered for progression-free survival. We're treating both patients with ESR1 mutant disease but also patients with wild type so that we can ensure that we have the best chance to show the benefit across populations. So we want to make sure the trial was powered for that. But also, we want to make sure that the trial had sufficient power for the secondary endpoint of overall survival, a very important driver that we think is going to really support the clinical utility of this therapy in patients and also drive the value for health technology assessments.

Okay. And maybe just on what you're working on, so you have TACTIVE-N, trying to get into the neoadjuvant setting. You also have the TACTIVE-U, I think, doing combination work. So where do those fit in? And maybe just on the TACTIVE-N trial, is there potential for that to be registrational at all?

So TACTIVE-N is our trial in early breast cancer. So just to take a step back, probably one of the biggest areas of need still in patients with the ER-positive breast cancer are the patients who have undergone surgery and who still have a chance of having the cancer come back as many as 10, 15, 20 years later. So current therapies are great but not sufficient enough. We have -- the whole premise around this technology and applying it to ER-positive breast cancer is that we believe that this could be potentially a best-in-class ER therapy and potentially in this setting reduce the risk of recurrence. The TACTIVE-N is a small randomized Phase II study. Looking at it in the neoadjuvant setting, this is not a registrational study, but we felt that it was important to test it in this setting first to get our first experience in early breast cancer. It allows us to look at things like biomarkers But more importantly, it gives us a treatment data in the early breast cancer setting, 4 months of treatment so that we have the data that will drive excitement among investigators to participate in a large registrational postoperative adjuvant study. And also, it may be useful for regulatory interactions there.

Okay. And let's switch gear into the 110 program. Any updates on where you are in terms of dose selection? Maybe just remind us, what are the key factors that gave you the confidence that -- I think you previously guided the 400 mg dose might likely to be the one to move forward. What are the key factors that make you think that that's the one?

Yes. And again, Ron can add to this. But yes, the data we saw in terms of exposure and efficacy really made us very keen to use the 400 dose as the choice. When we talked to the FDA last year about that choice, they said, "That's fine, but under Project Optimus, we also want you to look at the lower dose more extensively." So we've spent the last several months adding in more patients into the lower dose. And we'll take that package to the FDA to really define for them very clearly that the higher dose is the dose that should be the recommended dose. Ron, do you want to add anything to the...