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

All right. Thanks, everyone, for joining us this afternoon in the Goldman Sachs Global Healthcare Conference. So we have disclosures to you before we get started. So we're required to make certain disclosures in public appearances about Goldman Sachs' relationships with companies that we discuss. The disclosures relate to investment banking relationships, compensation received or 1% or more ownership. We're prepared to read aloud disclosures for any issuer during the sessions upon your request. However, these disclosures are also available in our most recent reports available to you as clients on your firm's portal. In addition, updates to these disclosures are available by ticker on the firm's public website. Goldman Sachs agrees to host this conference on the basis that no third-party speaker will provide confidential or material nonpublic information. In addition, by attending this conference, you provide Goldman Sachs the right to record or redistribute the conference information. The views of third-party speakers do not necessarily reflect those of Goldman Sachs. So really extended to be joined by the team at Arvinas.

And why don't we start maybe at a very high level, 30,000-foot level, walk us through for our Arvinas the technology that is PROTAC and what similarities and differences exist for PROTAC relative to other targeted protein degradation drugs?

I'm happy to start there, and thanks, Madhu, for having us. I'm Randy Teel, I lead Corporate and Business Development for Arvinas and Ron Peck is our CMO. So Arvinas has been around since 2013, and we are the first company founded in the protein degradation space. So when you think of a PROTAC, you're thinking of Arvinas technology with having one end of a small molecule that binds to a target of interest, and the other end that binds E3 ligase and leads to degradation of that protein. And I suspect that by this point, a lot of folks in the room are quite familiar with how that works. I think where we're differentiated at this point, and our history is really in the clinical pipeline that we've developed and maybe I'll spend a little bit a minute or to go through that before we dive in on 766 and some of the recent updates we've had. So we've got 2 programs now that are in late-stage development. One is ARV-471, which is a breast cancer program, it degrades the estrogen receptor. It has already had 1 Phase III trial start. That's an ongoing trial in later-line breast cancer. We've got a second combination Phase III trial with that program set to start in the second half of this year. And then on the androgen receptor side, we have 2 programs, ARV-110 and or bavdegalutamide, which is poised to start a Phase III in the second half of the year as well and ARV-766, which is a second AR degrader also planning to start trials this year. It's in Phase II, and we just shared some data on that last week, which we'll go through. And then by the end of the year, we also expect to have 2 other programs reach their IND or CTA, which are BCL6, an oncology program in LRRK2. So at this point, by the end of the year, we expect to have 3 pivotal trials ongoing and then multiple other programs just poised to start. So at this point, we feel like where we've established pretty well that PROTAC can be drugs, and we're looking forward to getting them in the next couple of years over the goal line and into the market.

Okay. So let me start with a discussion of 766. Obviously, you all had data last week on your AR degrader 766 in prostate cancer. Can you walk through a high level, what are the key findings and what are the next steps for that program?

Yes, maybe I'll start and then pass to you, Ron. So for 766, we had data last week, which was Phase I data in interim Phase II. And importantly, 766 is a degrader that targets all relevant clinically relevant point mutations in AR, which is a resistance mechanism. And there is 1 point mutation called L702H that our first air degrader doesn't hit that 766 does. So that was -- the key there for 766 last week was to show that it hit that target, which I think we did, and Ron can go through that. And then what we'd really like to do over the course of the year is through this disclosure for 766 and a second disclosure that we have in the second half of the year for the other AR degrader for 110 really start to talk about how each of those programs will be co-positioned in prostate cancer. So we really think of last week's data as the first part of the AR disclosure for the year. And the second part will be for 110 in the second half of the year, which will include PFS durability data and really start to allow people to understand how we plan to position each of them in prostate cancer. Ron, I'll let you go through the data.

Yes. So for 766, what we presented was data from the completed Phase I, which is around 34 patients and then an additional 13 patients that represented the start of our Phase II study. So the Phase II study started at the end of last year, was randomizing between 2 different doses, 300 milligrams, 100 milligrams. So we had a data set of close to 50 patients total. And what we presented was, first and foremost, the efficacy data in the patients with ligand binding domain mutations of the antigen receptor. So just like with bavdegalutamide, what we'd expect is in this late-line setting. So these are all patients who have already gotten enzalutamide or abiraterone and sometimes both or one of the other inhibitors, but certainly other prior therapies, including chemotherapy is that the patients in this late-line setting who have a high level of AR independent resistance. The ones that are most likely to respond or those with these ligand binding domain mutations. These are the patients that we know from the experience with bavdegalutamide -- or the ones who still have AR-dependent pathways. So in other words, these are the patients who have the greatest chance for responding to AR degrader. We saw a 42% PSA 50 response rate in this population despite all the prior therapy despite the chemotherapy, AR therapy, other treatments. And that actually compares quite favorably with drugs that are now on the market. in this prostate setting, including chemotherapy, PARP inhibitors, Pluvicto. Now even with that level of activity, and we also did see RECIST responses too, namely 2 PRs. One was confirmed. One was unconfirmed out of 4 patients would like him finding domain activity. So 2 different measures of activity showing a high level of activity. But with that also on the flip side, on the safety side, we saw a safety profile that was remarkably clean. So we showed no dose of toxicities in Phase all the way from up to 500 milligrams, which is well above the highest recommended dose. And we saw only 2 out of 34 patients in Phase I who had treatment-related Grade 3 adverse events, no grade 4. So very well tolerated. And almost half of the patients had no reported adverse events and the data in the 13 patients in Phase II also had similar very favorable safety profile. So if you look at bavdegalutamide, it's well tolerated in prostate cancer, what we've already shown in -- over the last couple of years. This profile is even better from a safety profile. Why is that important? Well, it makes us -- it's very attractive when you think about moving this into a much more AR-dependent populations. So when you get out before these NHAs, the enzalutamides and the abiraterone, you get in the population where an AR degrader has a much greater chance of benefit. It's ahead of all before you get all these other mechanisms of resistance, where patients will be on therapy for sometimes years. So if you have a treatment that has a really clean safety profile, that's a great advantage here. And so what Randy was talking about is now we have our data on our second AR drug, and you can start to think about how this can play out across a portfolio with 2 different assets, one of which was especially attractive in the earlier setting. And as Randy said, when we come out with our later disclosure for bavdegalutamide, which will actually be the first time that we present PFS data. So that will be in the second half of the year to Congress. Then we'll start to put the pieces together more about how we can envision putting these 2 assets into the continuum of therapy for advanced prostate cancer.

Okay. Great. So that's a good walk-through through 766. I going to come back to bavdegalutamide and some of the other prostate cancer work a little bit later on. But maybe let's move over to -- whether I guess, nominally your lead program, your estrogen receptor protect drug, ARV-471 for ER-positive breast cancer. So obviously, this is a bit of a controversial space with some of the headwinds that have emerged for the class of drugs on a SERD inhibitors in the space. So how do you think 471 differentiates in this ER degradation space to provide clinical benefit. And I think most granularly to investors to provide clinical benefits, specifically in the ESR1 wild type population.

So yes, I think what I'll do before we get into the wild-type piece is -- I mean, obviously, very crowded space. And every time there's news on the sure class, there's an automatic reaction to our space. We're very confident in the profile of 471. We believe that as more and more data emerge will further differentiate. We still believe as does Pfizer that this is potentially a best in target therapy, best ER-directed therapy and why do we believe that? Number one, from a degradation perspective and here's a space where there is a degrader on the market that's fulvestrant. And fulvestrant has been by most accounts, the most active endocrine therapy in the space that have been dominated by aromatase inhibitors for a while, but fulvestrant is a very effective therapy. The challenge for fulvestrant is it's an indirect degrader. It's not -- it has some limitations from a pharmaceutical perspective. And in human testing, it degrades between 40% to 50%. So for 471, aside from the great advantage of being an oral therapy, we have data at a recommended dose in metastatic cancer patients that it has an ER degradation magnitude of about 70%. So that's 70 versus 40% to 50%, oral therapy versus intramuscular therapy and then it also plays out in the efficacy data that we have. So we have a clinical benefit rate now in over 100 patients of somewhere between 37% to 40%. I think part of the confusion for our story is that we have to go and explain about the prior therapy in our trials, but it's very important because our population is as heavily pretreated as you can find for testing a novel ER therapy. Our patients are all prior therapy -- all had prior CDK4/6 therapy. 80% in the Phase II data set had fulvestrant and 45% in prior metastatic chemotherapy. By each of these accounts, this is the most resistant population. But when you look at the efficacy between 37% and 40% CBR, that compares really quite favorably when you look at other therapies who are in less resistant. Just as -- there is a frame of reference, fulvestrant, which is the control arm for a Phase III has a clinical benefit rate of between 10% and 14% in the post-CDK467 across multiple studies. And the same is true for -- when you look at PFS that -- we have shown better results when you compare it to that benchmark. So we have a lot of confidence. The question about ESR1 wild type. So here's a setting where mutants appear to predict a little bit better for ER dependency. But we believe that there's still efficacy left on the table for the wild type. We have actually shown a RECIST response in patients with wild type and there's other measures where patients are staying on therapy for some time. It tells us that in the Phase III, that is our Phase III population is a less pretreated population. It gives us the confidence that we might be able to show activity in the wild-type patients as well enough to potentially hopefully allow us to get registered in that population as well.

All right. So maybe let's start with the frontline study you guys have kind of underway and you have ongoing and we'll come back to your Phase III trial to ongoing in the kind of comparing to fulvestrant space. So let's start with the frontline study. So can you walk us through some of the key design elements for your frontline study of 471 with Pfizer CDK4/6 drug palbociclib.

Yes. Yes. So I think the first thing just to put out there is, and this is a disclosure that we had in January, was we did identify what we are calling a mild to moderate impact on exposure of palbo from 471. So what that means is we had about a 50% increase in the area on the curve compared to historical palbo data, that compares to about a 30% natural variability of exposure that you get. So it's 50% versus a natural variability of 30%. So it's certainly not in the range of ProFound DDI where you tend to see as much as 10 to 15 fold increase in exposure. It's only a 0.5 fold, if you will. So with that, we aligned with Pfizer to recommend a lead-in approach to the trial to the Phase III with the goal of selecting the right dose. The FDA was on board with that, and we were able to resolve that very quickly. We're expecting that the Phase III study will start soon by virtue of posting of clinicaltrials.gov. So you should expect that to happen soon. And the design is -- the lead-in portion is taking about 50 patients, randomizing in between 2 different doses of palbociclib in combination with the recommended dose of fulvestrant -- I'm sorry, of 471. So palbo's dose will be either 100, which is 1 step down from the 125, that's the standard starting dose and 75 milligrams. So 2 different doses, randomized. And at the end of the enrollment of these 50 patients, we pick -- there was a dose that is selected with alignment with health authorities. And really, the intent here is that the dose that goes into the Phase III portion is really intended to be comparable from an exposure perspective versus the palbo dose in combination with the standard of care, which is aromatase inhibitors. So comparable exposures and so this kind of evens the playing field. So then it becomes really a test of 471 against aromatase, both in combination with comparable exposure of CDK 4/6.

Great. So maybe following from that and thinking of the CDK 4/6 landscape, obviously, at ASCO this year, one of the key presentations was around the updated data from Natalie. And how do you think that influences the use case for an ER degrader along with the kind of CDK4 inhibitor group?

Yes. I think it's a case where it's another drug for patients to reduce the risk of recurrence. And while we -- I would say that we're doing a lot of work with Pfizer in terms of a design of Phase III as we're waiting for the continuation of our new adjuvant study in early breast cancer are Phase II. But the designs that we're thinking of will allow us to -- basically, it would not interfere with patients getting CDK4/6 in this setting. So the difference with Natalie is now there's a second CDK in this space, it encompasses patients with not just high-risk like Abema, but also intermediate risk and the trial designs that we're looking at 471 would allow prior CDK as well. So this is in no way interfering with our plans. It's just ensuring that patients get the best option for them and it now allows us to show the superiority 471 as an ER degradator -- or as a ER therapy in this space.

Okay. maybe following from that, can you -- as you think of that first part of the palbociclib combo trial, like what are the kind of decision features for those first 50 patients? When do you get to the first 50. What is kind of the framework for picking a dose to kind of more broadly pursue in the registrational frontline study?

Yes. So we'll -- obviously, there will be standard safety. Safety is an important endpoint because as we mentioned, we saw slightly more grade 3/4 neutropenia compared to historical data. So we'll have standard extensive safety monitoring. We will have PK sampling. So we'll have the data there, and also leveraging all the modeling work that Pfizer has in terms of the expected pharmacokinetic behavior of palbo, we'll have that to take into account. We'll also have some additional data from the Phase Ib palbo 471 that will also factor into decision-making.

Okay. So kind of following from that, you guys are going to present Phase Ib combination data for 471 and palbociclib in the second half of 2023. What would we be looking for there in terms of how I started to think on the forward about this kind of lead-in study in terms of what to be expecting?

Yes. I think -- well, I think what I would say is for the disclosure for the second half of the year, this is more about having our -- the opportunity for us to have a complete summary of the data that has been collected over now a couple of years. So we did have a sneak peek at efficacy in our earnings press release from just recently. So here, we had a summary to say that in the first 30 patients who had clinical benefit rate of valuability, we have a 60% clinical benefit rate which we're very happy with. And just to put this into context, this is a patient population that's almost as heavily pretreated as the monotherapy data. So these are patients who, in 86% of cases, had prior CDK. There was also a lot of prior fulvestrant and prior chemotherapy. So this is a highly resistant setting. We still had a clinical benefit rate of 60%. So the disclosure in the second half of the year that would be in the setting of a Congress will include further follow-up on this. So we'll have more data around clinical benefit rate. We will have further details about the PK and safety as well.

Okay. So maybe let's step back from frontline studies and start to think about your ongoing Phase III trial, VERITAC-2. So I think you very nicely walked through some of the prior data for 471 in this kind of later-line, ER-positive breast cancer setting. So how did that data and kind of your experience out there for the kind of next generation of ER degrading drugs influence the design of VERITAC-2?

Yes. It's a good question. So 1 thing that was important for us was -- well, there's a couple of things here. Is that -- one, of course, the field has taught us that no matter what therapy or targeting ER with that AS01 patients tend to have a more responsive disease, meaning that they have more ER-dependent disease. So that was an important factor in the design. So here, we have 2 primary analysis, co-primary endpoints, at least in the way oncologists think about it. So we have one analysis on PFS for the ESR1 mutant population. We are stratifying ESR1 mutations. And then the other one is looking at all comers. So very similar to the EMERALD trial design with elacestrant with Orserdu. And this way, it's a clean assessment of the ESR1 mutation population. But as I mentioned, we do believe that with the PROTAC, we have more of a shot in the nonmutant population as well. And number 2 is patient selection was very important for us. The learnings from the EMERALD trial was that post CDK4/6 that there is a population of patients that is so resistant to ER therapy that they progress very quickly. So the question was, can we identify a population that has more of a chance of benefiting from an ER therapy even if excluded prior metastatic chemotherapy, we know that, that is another negative prognostic factor, if you will, in ER-positive HER2-negative disease, so excluded prior metastatic chemo and also because the control arm is fulvestrant. So it's a straight comparison of the new generation ER degrader, meaningful 471 versus fulvestrant, that means that we're excluding prior fulvestrant. So that's very different from our Phase II population that was 80% prior fulvestrant and also 45% metastatic chemo. So we believe that this is a population where 471 will have its best chance to show its stuff in this post-CDK4/6 setting.

Okay. So I guess it's going to dig into this a little more granularly. Are there other aspects of the design of VERITAC-2 to that you think provide support for joint superiority to fulvestrant, again, particularly in the all-comers or ESR1 wild type population.

Yes. I think the other thing I should mention is that the trial is also -- it's a large trial. So it's larger than EMERALD. A very important piece of this for us was that it was us meaning us and Arvinas Pfizer was that we had necessary power in our overall survival. So in other words, this trial gives us the best chance to show not just progression-free survival, which is the primary end point, which gives us a quicker look at clinical benefit, but it's power for survival, which is generally considered the gold standard. It is -- we'll have sufficient patients in both ESR1 mutant as well as ESR1 nonmutant patients to really identify the relative benefit in the mutation versus the all-comers.

Okay. So -- great granularly, Again, what is the time line for top line data from VERITAC-2?

Yes. So if you look at clinical trials.gov, the listing, that's publicly available, you'll see a primary completion date in August. This is obviously -- it's always hard to be.

August '24, you mean?

Thank you. Yes, not as an not too much from now. So it's August of next year. Obviously, this is -- this is not, I would say, a scientific number, but it's really what we talk about is the second half of next year. That's -- and so that's really what I think everyone should be thinking about based on where we are today.

Okay. Great. So maybe let's shift gears from breast cancer back to prostate cancer.

I want to summarize this a little bit more just because we've talked for a bit about breast cancer, but we actually haven't hit everything we're doing. So just to add a couple more points on top of the ongoing pivotal trial in the second line, the first-line combo trial palbociclib to start in the adjuvant trial that we've talked about planning. We've also got other trials ongoing as well. We have a new adjuvant trial called TACTIVE-N, which is meant to enable the adjuvant trial. We have an ongoing combination with everolimus in the second line, also ongoing. We have an umbrella trial with Pfizer meant to be able to test both on the market as well as novel therapies. So the first 2 arms of that are everolimus allowing us to combine 471 with everolimus. And then the last piece I'd say is that we've also since the inception of the partnership with Pfizer been looking at other Pfizer assets to also potentially combine with. And so we're now moving rapidly to try to combine 471 and their novel CDK4. And really, the question there is, what's the fastest way to get them together? Is it with the UMBRELLA trial that we're already going already have ongoing or is it with ongoing Pfizer trial. And there may be other Pfizer assets to that we look to combine with. But we're really trying to position 471 as a backbone ER therapy that can be relevant from adjuvant space all the way through the late line.

Yes. And Pfizer, I mean, it's essentially -- I mean, this could be a really interesting platform for breast cancer as a whole, the CDK4, which they had rate date at ASCO. There's been a lot of conversations between the 2 sides.

Okay. So maybe moving back to prostate cancer. I want to talk less about 766 and more about bavdegalutamide, I'm going to call it bav for short. In 878, 875 mutant prostate cancer, walk through the existing data you all have for that program?

Yes. So the last data that we had was back in February of last year. This is ASCO GU and we had data in over -- it's close to about 200 patients. And we showed this PSA 50 response of 46% in patients with ligand binding domain, specifically 878 and 875 with or without other co-occurring mutations. And we also showed RECIST responses as well. We had 2 really good strong responses. And you can see the waterfall plot. Most patients had some reduction in tumor size. So we had that. And we also showed the swimmers plots. But of course, back then, it wasn't mature enough for PFS, which will be part of our next disclosure.

Yes. So let's talk a little bit more about that next disclosure. So walk through some of the additional data for BAV coming second half of this year. And then obviously, you guys have a Phase III plan. Can you walk through some of the design features of that Phase III study.

Yes. So the second half of the year, it will be a follow-up from this trial. This is a large seamless Phase I/II. So the Phase II component itself was probably about 200 patients. Again, embedded in there are a good number of patients with ligand binding domain mutations and this will be sufficient follow-up for us to present progression fee survival data, radiographic progression-free survival. I think the interesting point about that is, to date, all it's has been PSA50 and RECIST. And PSA50, we're very excited by because it's in the range of what established therapies are showing now, most recently, Pluvicto. So we're seeing the same level of activity. But the obvious next question is how does it perform relative to RPFS, which tends to be the primary endpoint of Phase III studies. So with regard to Phase II, we have been guiding towards the end of this year to start a Phase III for bavdegalutamide in a precision medicine population. So that is, in essence, these common mutations, 875, 878 with or without co-occurring mutations. We haven't gone into details about the design, but it would be post and flutamide to abiraterone or the other 2 inhibitors, and that's the population, of course, where we have the data. And certainly, as we get closer, we will be able to talk about the Phase III design, but I think that the data at the end of the year will help. And by that point, I think we'll have more to say about our more detailed plans.

Okay. Maybe thinking then about the commercial opportunity for BAV in 875, 878-mutant prostate cancer. And the natural question that emerges is how frequently are these mutations assessed in current clinical practice. And what's kind of the path to expanding the diagnosis of these variants ER.

Yes. So first of all, we wouldn't be the first ones in this -- in a sort of a mutation-defined population. Of course, the PARP inhibitors were their first, the rucaparib and olaparib were approved in 2020. So that gives the community a head start and knowing to test patients. Number 2 is we have a partnership with Foundation Medicine. All of our data has been using a liquid biopsy or circulating tumor DNA, which is exactly where the thrust will be in terms of the companion diagnostic program. What's really exciting about that, and I think technology is nicely kept pace with where we are is that this will be a blood test. It's not getting tumor calling another hospital where the surgery was done on a patient. It's just drawing blood and having it tested for these mutations, which is a great advantage, especially when -- for some of the competitors where there's -- access becomes a little bit more tricky because you need to do other things. So I think that's attractive. Yes, the prostate community is a little bit later in the game on precision medicine compared to lung cancer as an example. But the field is -- the precision medicine is very much on the rise. I think most of the cancer drugs approved in 2020 as an example, were precision medicine approvals. And that's going to be our job is to really hit hard in terms of education about AR mutations and so on, but we think the timing is right for this.

So on the end, thinking about kind of mutational heterogeneity. Do you think you're relying upon a blood-based detection of these AR mutations? Is that going to enrich patients for whom really overwhelming majority of their tumor has the mutation as compared to, say, biopsy measures where you do have some sensitivity limits here. If it's in the blood, it's got to be pretty prevalent within the tumor property.

Yes. I mean detectability is still -- I mean, detectability with the foundation test is very good. Certainly, with plans for Phase III, we can probably provide a little bit more color around that. Certainly, at the ODAC for olaparib. There's data that were discussed in the concept of tumor and/or reflex testing with blood. So we can provide more information about that. But certainly, in our hands, in our large Phase I/II study with over 200 patients total with Phase I and Phase II, detectability has not been a problem at all. It's a late-line setting and finding a DNA that where you can measure mutations has not been a challenge for us.

Okay. Maybe briefly, if we can walk through kind of expectations or the clinical entry of additional PROTAC Degrader, particularly as you mentioned in the beginning, BCL6 and LRRK2.

Yes. So we've said that by the end of the year, we'll have INDs or CTAs for both of those, and they really represent for us the next wave of PROTAC. So when we started, we intended to start with AR and ER because they were well validated targets. So as the first in the space with an unproven technology, we thought it made sense to go there first. But the plan has always been moved to undruggable targets like BCL6 is, for sure, and has relevance both in subsets of non-Hodgkin's lymphoma as well as solid tumors and others. And then on the LRRK2 side, it's a really important target that we plan to hit for Parkinson's, and that will be our first neuroscience asset. So we really think that it as a proof of concept could show that a PROTAC Degrader or could be delivered orally, get to the brain, get to deep brain regions and degrade a disease-causing protein there is really fundamentally different than other neuroscience modalities. So we're excited about getting both of those through IND and CTA by the end of the year and then into the clinic shortly thereafter.

And I'll just add for LRRK2. Well it's not nondruggable. It's a classic target where a PROTAC could have differentiable biology. So there's a kinase activity. So there is a program through a partnership with Biogen and Denali for a kinase inhibitor for LRRK2, but LRRK2 does more than enzymatic function. So it has a staff holding role. And so knocking it out may have an advantage therapeutically. And that's one of the great -- that's one of the great things about PROTAC is it's all about knocking it out.

Excellent. So last question, the question we ask every company at the conference is, what is the reason to own Arvinas stock in the next 12 months?

Well, even in the next 6 months, right? So we're going to -- in the next 6 months for AR, we'll have critical data for 110 and then start a Phase III trial, which will allow us to really explain, I think, for the first time how we plan to position 110 and 766, which will let people really understand where we're going and how to model and how to value that. On the 471 side, we've had a bit of an overhang with the palbo potential DDI data since January. And I think that as we get through that Phase Ib disclosure towards the end of the year, we'll be able to put a lot of that to rest as well and move forward. And then like we just said, by the end of the year, we'll have a couple more programs poised into the clinic. So if I look out 12 months, we've got 3 ongoing pivotal trials in our next-generation neuroscience and heme products come in the clinic as well. So we're poised to make quite a dramatic change in the company in the next year or so.

Right, great. Well, thanks so much for joining us today. [indiscernible] Arvinas, and thanks, everyone, for joining us today to Goldman Sachs Global Healthcare Conference.

Thank you very much.

Thank you.