Daiichi Sankyo Company, Limited (D4S.F) Earnings Call Transcript & Summary

Thank you for waiting everybody. We will now start Daiichi Sankyo's WCLC 2025 highlights. This is Ken Asakura from Corporate Communications, and I will be the moderator today. First, about the language for this event. Presentation will be in English, and Q&A will be in both English and Japanese. Simultaneous interpretation is provided, so please click the interpretation icon at the bottom of the screen and select either English, Japanese or original audio. When original audio is selected, you will hear the original sound. English presentation slides will be shown on the Zoom screen as well as live streaming screen. The slides have been uploaded to IR presentation material Page of Investors section on our corporate website. So please view or download as needed. Our presenters for today are Dr. Ken Takeshita, our Head of Global R&D; and Dr. Abder Laadem, our Head of Late-Stage Oncology Clinical Development. We'll take questions after the presentation. Please note that this event will be recorded. With that, let's start the event. Ken, please?

Yes. Thank you very much. Thank you for the introduction. So what I'm going to be doing here is to give you an overview of small cell lung cancer as a disease. Next slide, please. First, this is what we call a lung cancer disease map. I think you have seen this from us before. This is a representation of all of lung cancer, small cell lung cancer as well as non-small cell lung cancer in various lines of therapy. And for today, we're going to focus on the small cell lung cancer, which is the yellow boxes in lower rate -- you'll see that it is a smaller part of the lung cancer field. But because there are so many people with lung cancer, it still represents a sizable numbers of patients. So next slide. So first about the disease itself is mostly more common in men of older patients. All the cases are basically attributed to smoking. You'll see here on the right-hand side that it is a very bad disease. Lung cancer in general is bad, but when we compare small cell lung cancer versus non-small cell cancer. The 5-year survival is very short compared to the non-small cell lung cancer, which we already know is a very bad. So you can see that the unmet medical need is very high in small cell lung cancer. Next slide. Now today, we're going to be talking about ESSCLC. This stands for extensive stage small cell lung. So -- it's also lung cancer field, there are only really 2 stages, limited and extensive. Extensive stage means tumor has spread throughout the lines from both size lungs or has spread to areas of outside of the lungs, for example, the bone marrow, an extensive stage lung -- small cell lung cancer represents about 70% of all small cell lung cancers. Next slide. Now brain metastases is a fairly common feature called extensive stage small cell lung cancer and keep patients with brain metastases have even worse survival. And this is going to be important later on when we talk about the most recent data that we have reported -- next slide. So small cell lung caster field has had some recent drugs approved. You'll see that for the most part, the older drugs and chemotherapy have been used since the 1980s and 1990s remunatherapy with a PD1 and PDL1 came on about 5, 6 years ago as well as a couple of new agents. One is [indiscernible] approved in 2020 as an accelerated approval and also more recently, tarolatimab, which is a bispecific T-cell engager yet another form of immunotherapy approved as an accelerated approval in 2024. Next slide. Okay. Now from now, I'm going to introduce you to Dr. Abder Laadem, who's going to go over with you our I-DXd program.

Thank you, Ken. Hello, everyone. I'm Abder Laadem, Head of Oncology late-stage development. We are excited to share with you data [indiscernible] from last week. [indiscernible] this presentation mainly I-DXd and cell lung cancer, while other updates are here in the [indiscernible]. Next slide. [indiscernible] is an interesting contingent to exert consumer effect, multiple mechanisms. This target is expressed in many cancers, but absent it [indiscernible] here in this graph. It's a broad expression pattern creates an opportunity for us develop this drug broadly. This mark often this antigen is normal absent sales. Next slide. I-DXd is a B7HC-directed ADC with the drug antibody ratio -- this ADC the same linker system and [indiscernible]. Next, we'll go over the Phase I data. Next slide. This is the Phase I data several times. This is a completed Phase II trial study tumor-selected B7-H3 in escalation, Part 1 IDX was given IV schedule and patients received was up to 16 milligrams per kilo. The recommended from the escalation, we carry in the expansion was defined as 12-milligram per kilo. And in part one, we expansions. In prostate cancer, squamous non-small cell lung cancer and squamous bagels. In addition, there were a number of small cell lung cancers treated in the escalation, which make a [indiscernible] data later. Next slide. The overall efficacy of this Phase I in a heavily pretreated population showed very encouraging efficacy across different tumor types, including small cell lung cancer, sqamous [indiscernible], head and neck, state cancer and sales. This study has demonstrated the broad potential of I-DXd [indiscernible]. Next slide. The efficacy and safety results from the 3 expansions that we [indiscernible] here were encouraging. In fact, we have started Phase III [indiscernible], one in state cancer in sitaxel-naive [indiscernible], in the squamous regular cancer second line. Next slide. This is the data the make the escalation reason. The results showed robust activity in term of efficacy, paresponse rate of 52% and the duration of response 9-month and BFS [indiscernible] exceeding. This was a strong senior which triggered a pivotal trial in this disease. Next slide, now the data [indiscernible]. Next slide. This is a Phase II study in extensive stage cell lung cancer in a relapsing setting. The primary analysis was presented last week as an old session. Next slide. As a reminder, [indiscernible] this study. So this study is a phased pricing or [indiscernible] with an extension part. The dose optimization was presented last year and 12-milligram per kilo was defined as the [indiscernible]. The focus of this primary analysis is on the second line small cell lung cancer of patients treated with 12-milligram from part [indiscernible] part and part [indiscernible] the rest of the presentation for this primary analysis focused on this 137 patients [indiscernible] 42 and the 95 received I-DXd as [indiscernible]. These are the key characteristics of this population. It's a very typical population advanced small cell lung cancer high-end were money majority or band as expected, 8% of the patients had brain metastases. Third, 50% of the patients received [indiscernible] as client therapy and [indiscernible] I-DXd as a second line. Next slide. As you see here, [indiscernible] 38%, like in the suppletion of second line response rate was higher, 56%. In this graph, you see that the responses obtained in the first 6 weeks, the duration of response was 5 [indiscernible] months. The second line patients. The duration of response was higher with [indiscernible] and it comes to BFS and the PFS, the PFS was 4.9 months and plus 10 months. [indiscernible] who received second-line therapy PFS was 5.6% [indiscernible] 12 months. Next slide. When we analyze the meaningful clinical benefit was demonstrated across the sum [indiscernible] here. DXD was active regardless of the platin-resistanc as defined by chemotherapy-free income. It's also important to highlight the activity of the [indiscernible] in the brain metastasis and the response rate in the brain was 46%. Next slide. In terms of safety, the extent of [indiscernible] median revision of treatment was and patients see and medium 7 cycles. Less than 10% of the patient [indiscernible] treatment [indiscernible]. Next slide. Safety proflie is overall consistent in I-DXd and the ILD rate in this population [indiscernible] 2 patients -- 2 patients by ILD as [indiscernible]. The table here on the right, summarizing the ILD rate according to the [indiscernible]. [indiscernible] I-DXd showed a remarkable activity in small cell lung cancer, a relapsed setting. The term response rate of 48.2% and median duration of response of 5.8 months. Clinically meaningful activity was observed regardless of platinum resistance and it's important to note the activity of this drug in the brain and the full analysis about the brain response will be presented at the upcoming estimate. Safety was manageable and consistent what was reported before. The Phase III I-DXd in second line is on. And in the next slide, I'm sharing the design the next slide. Sharing the -- here the Phase III design, testing, I-DXd versus topotecan or [indiscernible] studies for [indiscernible] to show an over benefit and the study probably complete sometime next year. Here, I would like quickly [indiscernible] to say that I-DXd indication, small cell lung cancer see a breakthrough a few weeks ago. And just this week, early this week, another breakthrough for another [indiscernible] developed for ovarian cancer. Now the 5 ADC in late received [indiscernible] 15 brakes. So I'm going to walk you the CDP. The next slide. The vision of I-DXd is to define the treatment planning, a broad range of patients with solid tumor through the automative [indiscernible] ADC, given the broad expression of this country and early senior in small cell lung cancer, state cancer, [indiscernible] cancer started rapidly the pivotal studies in cell in cancer as a bank we are expanding the development in prostate cancer and [indiscernible] cancer, Phase III offering, and we are extending mini other tumors, seeking efficacy [indiscernible]. Today as we discuss second line study, which is [indiscernible]. Importantly, study, multiple combination of I-DXd [indiscernible] and bispecific [indiscernible]. The intent is possible combination into [indiscernible]. Regarding [indiscernible] lung cancer, multiple combination and [indiscernible] additional trial in the future for CLDC Phase III [indiscernible] combination also in Phase I with different agents to actually enable additional studies. And for rail cancer, Phase III is in second line and with [indiscernible] inhibitor last great see this combination in [indiscernible]. And for all of 2 times are testing I-DXd in the [indiscernible] study, senior seeking and additional pivotal studies. [indiscernible] tested in different tumor types expressing DLL-3 a single agent and I-DXd. Next, I'll speak about [indiscernible] profiles? Mainly, I will cover 3 tips [indiscernible] in progress and [indiscernible] China in second line held. The first trial in progress is in combination with pembrolizumab in the first-line small cell lung cancer relation, expressing PD-L1 less than 50%. That slide as you know, and HER2 is an approved the drug in late line [indiscernible] overexpressed [indiscernible] atrial fibrillation. This study is in [indiscernible] represents a great opportunity to take care to in the larger population of first line. Nearly 700% will be randomized in the Phase III study primary and PFS by bigger and the study is in the [indiscernible] stage. The the second study, we are interested also in in assessing her income in front line. This gives us opportunity to position I-DXd [indiscernible]. This is the design of the study. And next -- this -- this trial -- the trial in progress [indiscernible] with DLL3 bispecific [indiscernible], I-DXd [indiscernible] refractory small cell lung cancer. Next slide. It's important to highlight that static and IDX are evolved together between Daiichi Sankyo and Merck. DLL3 and B7-H3 are 2 different protein highly expressed in the surface of small cell lung cancer. Because of the distinct mechanism of action and minimally overlapping toxicity, this combination is very interesting. And the aim of this combination between I-DXd [indiscernible] . The aim is this combination into earlier line of small cell lung cancer. So -- in terms of design, we have different parts in the study [indiscernible] Part 1, addressing the [indiscernible] safety at schedule Part 1, we're studying [indiscernible] monitoring from 48 up to 1 day. And the last part is a [indiscernible] some other combination [indiscernible]. Next slide, what about [indiscernible] this poster was assuming final results. This study led the [indiscernible] in China in lung cancer, second line here. Next slide. as this is the relation basically a second line population treated with [indiscernible] and the primary entity was are -- in the next slide, you see here very high [indiscernible] 56% and mission of responses was close to 1 year. And the next slide, as shown in this other dramatic responses obtained in this population. And if you go to the next slide and a very good PFS of [indiscernible] in the second [indiscernible] medical need. Next slide, safety profile was [indiscernible] the safety profile was accepted. The safety profile is very consistent. [indiscernible] HER2, the ILD rate here rate was 12%, 12.5% and very few, less than [indiscernible] of higher rate. And next slide, with a median follow-up time of more than 20 months, the [indiscernible], final analysis show that and uses durable response and clinically [indiscernible] benefit in patients from China with pretreated metastases, HER2, [indiscernible]. The [indiscernible] activity was observed across HER2 mutation subgroups, and the safety profile was consistent with [indiscernible] profile of TDXT [indiscernible]. This will -- and the highlight, WCLC. And thank you for listening, and we are [indiscernible].

Thank you, Abder. We'll now take questions. You could ask your questions in English or in Japanese. [Operator Instructions]. The first question is from Yamaguchi-san from Citi.

This is Yamaguchi from Citi. I have 2 questions. First question is regarding corporate response of I-DXd [indiscernible], which is very interesting and -- but we don't see anything in the second line. And also regarding to this one, is there any background of why you get your BTD for this asset. So is it -- is it related to this share rate at the sideline. That's the first question. .

Okay. So let me try to answer the questions. And I'll ask Dr. Laadem to add any comments. So I think your first point was about your observation about CRs, and third-line patients versus second line patients, correct?

Yes.

It's a little bit difficult to speculate why we're seeing CRs and third line for the second line. You may just be [indiscernible] coincidence because as you know, we do expect a greater efficacy in the second line rather than -- it's a little focus on -- now in terms of the we see a breakthrough therapy designation for [indiscernible] based on the data that you just saw. So the breakthrough therapy [indiscernible] to small cell lung cancer or [indiscernible] there is a separate recent breakthrough therapy [indiscernible] ovarian cancer. We're very happy to talk about that.

And quickly on the second question on the -- it's too early to say, but everybody is trying to compare what's on the market and what you are the proteins of the competitive landscape. And [indiscernible], did show some interesting data already on its own market. Just looking at PFS or ORR or maybe OS -- this seems to the same range rather than different range. So can you talk about what you are trying to differentiate in the future as a plan.

Yes. Okay. So you're referring to the drug called etarlapumab, which is a T cell engagement. So the mechanism of action is very different from our drug, which is [indiscernible] ADC. The target is also different between [indiscernible] versus [indiscernible]. And as you pointed out, the response rate, you pretty much similar. [indiscernible]. Numerically, our response rate is close to 50%, 48% [indiscernible]. I think we're about in the same ballpark as well I don't think to be superior in terms of response. What is different is that the toxicity profile is quite different between the [indiscernible]. T-cell engager typically associated with [indiscernible] releasing. And with parlatimab, this occures a incident [indiscernible] 50% of the patients [indiscernible] it requires a [indiscernible] and administration of [indiscernible] drugs [indiscernible]. It can't be a bit cumbersome to have to manage [indiscernible]. So I think that's whereas in our case, the IDFC cytokine-release syndrome is not at all seen. So it's a very different safety -- and I think this kind of difference, the toxicity profile may help the prescribing physician to choose which drug is appropriate for the patient.

The next question is from Wakao-San from JPMorgan.

Seiji Wakao from JPMorgan. So first question, discussion may be overlap with the [indiscernible]. But can I ask, it's very important. So as you commented, so I-DXd seems to be better than [indiscernible] in terms of the side effect. From this point, can I assume that if this drug is approved in [indiscernible] settings. So I-DXd will be used before talatamab or chemotherapy. .

[indiscernible] and ultimately it's up to the physician really to choose [indiscernible] one. What I did point out was that there are major differences in it for the while and -- of course, from our side, we now that physician the small cell lung cancer [indiscernible]. But ultimately, in the absence of a head-to-head comparison of the 2 drugs. There is no direct data riding the position on the -- so it was the comparison of whatever the [indiscernible].

Okay. And it's kind of a question about competitive landscape in even among the development products. So in this [indiscernible] decision, where I-DXd was presented, presented favorable results were also reported for other [indiscernible] ADC and or ADCs with different mechonism targeting SCSC. Could you share your view on the advantages of I-DXd over these other candidates? And any strategy to maintain its competitive edge. So it is clear that in has lead in terms of development speed compared to these other product programs. .

Okay. So -- let me just point out a couple of things One is that we are much [indiscernible] from a time percent compared to other [indiscernible]. You can see, for example, that we have pretty much completed our first trial intended for regulatory submission. And so I hope that they understand that, that was the fact that the FDA has granted us a breakthrough therapy desertion, it's a very good sign about our submission plans and regulator. We also caused a little bit today, but in but a little bit about the fact that we have data in other cancer esophageal cancer and the prostate cancer. Those are where we have already initiated various randomized studies. So I think we are ahead in terms of other B7-H3 drugs from a time line perspective. I also want to point out that we have a second drug intended for use in small cell lung line. This is the drug that was referred to in our presentation as MK6070. That is a T cell engager that we are co-developing, our collaboration partner also for I-DXd. And between the 2, we have actually 2 drugs very active in small cell lung cancer. MK-6070 has already moved [indiscernible] single agent that we and you also just now sold at -- so we have 2 drugs in small cell lung cancer. And I think you also heard that we are already doing a Phase I study buying the 2 drugs. 2 drugs with a very high activity in small cell in lines. And this allows us to very quickly do combination studies because we don't have to work with another company to create this combination. But because these are 2 internal drugs, it is much faster for us to be doing these combinations. And of course, once we start to see some clinical data with the combination, we do intend to develop the combination further not just in a relapsed/refractory setting, but hopefully, if the [indiscernible] supports we intend to advance the combination -- the frontline setting to replace the current stand the front-line setting [indiscernible].

The next question is from Sogi-san from Bernstein.

I also have 2 questions. First question is about B7-H3 as target. So as we have learned from the [indiscernible], the targets are quite behaved differently. Therefore, some targets that requires the specific patient selection strategy such as in [indiscernible]. I just wanted to see how do you see B7H3 that if -- do you see -- it looks like in small cell lung cancer, maybe such elaborated the patient selection strategy may not required. But how -- what do you understand the be it B7-H3 as a target? And what kind of activities or what kind of the plan you have in place for the future patient selection strategy.

Okay. So -- it looks like the B7-H3 gets a target is a very different situation than the [indiscernible] target where in lung cancer, we are using a very fancy [indiscernible] pathology technology as a [indiscernible] the data you saw today in small cell lung cancer [indiscernible] you can see that the drug activity is quite wide, pretty much in [indiscernible]. We are -- we continue to do the standard immunohistochemistry, CSA, see whether or not they're in trends or patterns in response between B7-H3 positive versus negative expressing cancer patients using this highest standard technology. And at least in small cell cancer, we don't see [indiscernible] or a biomarker eventually we're going to have to go through the details of the [indiscernible]. I think in the other cancers, we are I think, in an exploratory stage [indiscernible]. Hopefully, if biomarker is needed by [indiscernible].

Great. So in that question -- then my second question about combination with the MK-6070. I understand that it seems that the rationale is that these -- both the mechanism of action of these [indiscernible] molecules are very distinct. Therefore, it's targeting a kind of different approach. But is there any synergy rather than just 1 plus 1 equal 2, is there any possibility of equal 3 type at the synergistic expectation.

Okay. So I can just give you a biological answer right now because we don't have any clinical data yet. But from a biology standpoint, what you can imagine is that I-DXd would go directly to the tumor cells, lyse the tumor cells, and the lysis results in the release of tumor antigens and tumor associated antigens. These are mostly intracellular antigens and some extra [indiscernible] antigens [indiscernible]. Now the second drug, the MK-6070. That is a drug that is intended to enhance T cell response, antitumor T cell response. And when we talk about anti-tumor T cell response, we're really talking about T cell recognition of these 2 [indiscernible] that have been released by dying cancer cells. So from a biology standpoint, theoretically, this is a great combination. The one drug to release the 2 antigens and the other drugs to to bring all the T cells into the tumor bed and regain [indiscernible] T cell immunity and response [indiscernible]. So hopefully, we'll see that in action in patients [indiscernible].

The next question is from Muraoka-san from Morgan Stanley.

Muraoka from Morgan Stanley. My first question is that [indiscernible] so this is the time line for the study [indiscernible]. So as I look at this, so SCLC first line. Can you hear my voice.

Yes.

[indiscernible] the timing that is coming is landscape sometime next year. So at this time, first line and third line, coinciding with the approval coming. The outcome will be read out. And then IDeate-Lung03 is also coming out around the time. Is my understanding correct about this landscape. .

Okay. Let me ask Dr. Laadem to answer your time line questions.

Talking about the I-DXd in combination with [indiscernible] and carboplatin. We're talking about IDeate-Lung01 or can you repeat the question, please?

Yes, Lung03's outcome is expected to come out next year. I just wanted to confirm that. .

So yes, this is a Phase II trial. We're trying to combine I-DXd with either atezo plus or minus carboplatin. So basically, we're replacing etoposide with I-DXd in the first-line therapy. As you know, the study is a dose escalation. We're going to -- and your understanding is correct. As you know, the dose escalation is ongoing. -- only going to go to those expansion after that.

So the second part of my question, so dose escalation. So for this lung IDeate-Lung03, including that, so I-DXd dose perhaps maybe more than 12 MG, like 16 or more in all likelihood? Is there a possibility or no? .

No, it's not a possibility to go to 16, 16 milligram was discontinued during the Phase I single agent Phase I. So the dose escalation, we're talking about closes between 8 and 12 milligrams. So we try to combine doses between 8 up to 12-milligram with immune check inhibitor [indiscernible] plus or minus carboplatin. And the time lines showed here are correct.

The next question is from [indiscernible] from Pathology Associates.

We spoke previously about the differentiation from [indiscernible]. And I wonder if you can just say a couple of words regarding the position with brain mets and in platinum resistance against [indiscernible].

So as you point out, the -- the brain metastasis activity that we're seeing with I-DXd is actually very interesting, a bit surprising because I-DXd is a fairly large molecule, it's a biological agent actually. And this kind of drug is not typically associated with brain metastases activity because these are large molecules that do not cross the blood [indiscernible] barrier. However, in all of our DXP ADC series, starting with HER2 originally and then in [indiscernible] and other ADCs now. We are seeing very good brain metastases activity, including I-DXd in today's presentation. And so I think it's a very important point. And we can also see that our drug is effective in patients previously treated with [indiscernible] you mentioned, also active in patients previously treated with T-cell engagers such as [indiscernible] and also active -- very interestingly active in patients previously treated with a systemic [indiscernible] agent, such as topotecan, same class of drug as the payload for I-DXd. I hope that answers the question.

The next question is from Michael Nedelcovych-san from TD Cohen.

I have one, to what do you attribute the activity in patients who have experienced a topo I inhibitor in earlier lines of therapy. It's an interesting finding, and it seems to have broader implications than just this trial. So maybe you could discuss that. And a related question, while there is activity, it does appear to be lower in that subgroup -- do you think there is any risk that those patients are excluded from the label should I-DXd ultimately achieve accelerated approval in this setting.

Okay. So in terms of why this drug is active in topotecan treated patients. I have to say I don't have a good answer for you. Maybe Dr. Laadem has some ideas, but -- the only thing I can imagine happening in these patients perhaps this I-DXd has its ability to focus and concentrate the drug delivery into cancer cells as opposed to just systemic exposure. And so possibly, we are able to deliver much more drug into cancer cells compared to systemic exposure to [indiscernible] -- it's just my speculation, but perhaps that is what [indiscernible]. Now in terms of the eventual label -- and is the FDA going to exclude those topotecan pretreated patients. I'm -- okay, I'm not the FDA. So I can't tell you. I'm just going to speculate. I hope you don't mind if you I hope you understand I'm just speculating, but -- but the topic in treated patients, there is no other available therapy really. And I would think that the -- but the data is sufficient for the FDA to consider that the drug is active in topotecan treatment patients. That's number one. Number two, of course, is just, as you know, the FDA typically is looking at the ITT patient [indiscernible] and they prefer not to do the subgroup analysis and make approval decisions based on various subgroup analysis. So I think for these reasons, I'm just going to speculate now that the eventual label will not exclude topotecan pretreated patients. But we'll have to see. We'll see what happen, okay?

The next question is from Yamaguchi-san from Citi. Do you have additional questions?

Yes. Just one question. So regarding BTD. I understand BTD is one of the most, I would say, powerful sort of variation from the FDA so far. But given there are so many trials going on and the Phase III is already going on, I understand [indiscernible] success may be higher, but can you give me some example where you can, I would say, extended the shorten the time line of approval where you'll find out those time value of BTD of your whole I-DXd program. .

Okay. So I think you're asking really -- what kind of advantage do you get by having a breakthrough therapy [indiscernible]. Yes. And it's Eventually, we have to go through the process with the FDA to know exactly what the rent translates into, but possibly, the review time will be short. Possibly we may get a priority review instead of standard time review. These are kind of speculation, but we just have to see what happens once they get the dose at and they look at it and they gave us a [indiscernible].

[Operator Instructions] [indiscernible] from Pathology Associates. Do you have additional questions? If so, please go ahead.

No further questions at the moment.

[Operator Instructions] Okay. I do not see any hands being raised. So we would like to now conclude Daiichi Sankyo's WCLC 2025 highlights. Thank you very much for joining today.