Day One Biopharmaceuticals, Inc. (DAWN) Earnings Call Transcript & Summary

All right. Everyone. Thanks for joining the session, and welcome to day 1 of the 2025 BofA Healthcare Conference. My name is Alec Stranahan. I'm senior biotech analyst at Bank of America. And I honestly can't think of a better way to kick off the conference than with day 1 for the first session on the first day. And I'm very pleased to be joined by Elly Barry, Chief Medical Officer; at day 1, Lauren Merendino, Chief Commercial Officer; and Charles York, Chief Financial Officer and Chief Operating Officer. Thanks for being here, guys.

Thanks for having us.

Great to have you here. So maybe just at a high level to kick things off, walk us through how the OJEMDA launch has been going, sort of how the company is structured for the future to drive that launch and also the pipeline and then we can get into the launch itself.

Great. Yes. So again, thanks for having us, Alec. Nice to be here with the rest of the Bank of America team. And in addressing some of those questions, let's step back for a second. And to give a brief overview of day 1. We're a commercial oncology company. Our first product is focused on pediatrics. We ourselves do commercialization and development for patients of all ages in the oncology space. We target first and best-in-class assets, both for the development and for the in-licensing. Our company does not have R&D. So we continue to run a rapid BD function in order to thoughtfully and intentionally build our pipeline over time. We think our team is very intentional in the manner in which they work. And our skills and expertise in the commercialization and development really give us a unique opportunity to continue growing the company. You'll note that we look at the last year, last 12 months overall is a good framework for how we see day 1. We've had some really good achievement over the year in the last 12 to 15 months. We've got the approval of OJEMDA in the United States. We've worked an ex-U.S. commercial agreement with Ipsen for commercial rights of OJEMDA tovorafenib outside the U.S. We've in-licensed an additional program of PTK7 targeted ADC that we call Day301. And we've built our balance sheet to be in a position where -- from our current pipeline as we see it and current programs contemplated, we don't need to raise any additional equity capital. So sitting in a really strong financial position as well. To get to your point specifically, I'll touch on some highlights and then pass it over to Lauren, our Chief Commercial Officer, to dig into a little bit of the details. But at a very high level, we're very pleased with where we are right now in regards to the commercial launch of OJEMDA, it's been about $90 million of revenue in the first 11 months approximately of launch. And we believe that has really exceeded our internal expectations at this point. And we continue to see an opportunity for us to target double-digit growth and to continue to grow over time. But I'll let Lauren hit on a couple of the key things that she's seen in the market out of the launch recently.

Yes, absolutely. So our -- OJEMDA was approved in -- at the end of April of last year. And I think at that point, the consensus was around $12 million for 2024. And we delivered $54 million. So we were really proud of our performance last year. And in Q1 of this year, we delivered a little over $30 million in net product sales. And so even if we drove no growth at that run rate, we'd be at about $120 million run rate for the year. I don't think anybody expected us to be here, including ourselves, at this point. So it has been a phenomenal launch. And we have really been able to build a broad pool of prescribers at this point, who have tried OJEMDA. But many of them have only tried OJEMDA in a handful of patients at this point. So there is a tremendous amount of potential for us to grow, to expand their thinking about OJEMDA and which patients can benefit from our product and to move it earlier in the process. So for many of them trying a new product for the first time, they tried it in later-line patients, patients who had seen pretty much all the other therapies before. And so now that they've gotten some experience with OJEMDA and some positive experience with OJEMDA, we're now working with them to expand their thinking about where OJEMDA can be used because we truly believe that it has the potential to be the drug of choice in second line. And second line is a larger population, they're healthier, they're likely to stay on for longer. And so I'd say, this group of physicians is a little bit conservative. So remember, in pLGG, 90% of these children live to adulthood. So it generally is not a life or death decision for the majority of these patients when they're making the treatment decision. So they do have a little bit more cautious approach, they're thinking long term for that child. And so for a product that's new to market, they're a little hesitant about what's the impact 10 years down the line or whatever, until they get more experience. So we're building that experience incrementally over time and deepening the -- increasing our depth, meaning the number of patients that each prescriber has written for. And we -- the sales and marketing team continues to do that every day. And of course, our medical colleagues will continue to publish new data, which continues to tell a compelling story for our physicians. That's where we are today.

That's great. That's great. And I know on your 1Q call, you talked about sort of focusing on the depth of prescriptions per physician in terms of your current launch efforts. I guess, where are you in terms of the breadth of the prescriber coverage? And I think you've broken that down maybe back in 4Q. Where does that sort of shake out today? And what are maybe the focus points for the commercialization team in terms of really facilitating that repeat use?

Yes, absolutely. So we have broken our -- so I should probably start with 90% of the pLGG patients are treated at 200 centers in the U.S. So it's a very concentrated group, which enables us to have a very efficient commercial model. So of those 200 accounts, we've divided them into three priorities: Priority 1, 2 and 3. Priority 1 has the largest volume per account. So it's the fewest number of accounts. So in Q4, we reported that in priority one, we have 100% of those accounts have tried OJEMDA. Priority 2, we have 75% of those accounts have tried to OJEMDA. And then in Priority 3, which are the lowest-volume accounts, we had about 1/3, so 35% had tried OJEMDA. At this point, we have a broad pool of prescribers who have tried. And now we're focusing with them on expanding their thinking about which types of patients, so including the location of the tumor and whether it's a BRAF fusion or BRAF mutation tumor because OJEMDA can apply to both and then also, as I mentioned, moving it up into earlier lines of therapy. So that's our focus with those prescribers who have tried. There are still -- and we continue to make progress on those who have not yet tried. So that was reported in Q4. We continue to make progress, although we haven't reported updated numbers yet. But the majority of them are lower-volume accounts. And so many of them, pLGG is not the biggest portion of their business. And so they tend to be a little slower to adapt, they want -- or to adopt it. They want to hear more from thought leaders in the pLGG space. And so we continue to share that information with them through speaker programs and other avenues so that they can get a comfort level on how the thought leaders are using OJEMDA experiences they're having. And so over time, we anticipate that we'll get them onboard as well.

Okay. Okay. That makes sense. And I think you had just over 920 prescriptions in your 1Q update, 2,500 since launch. I guess, how does this feed into your confidence in how the launch is going? And I guess, additional to that, is there a low-hanging fruit within this number that's been [ plucked ]? Or the -- is the incremental prescription may be harder at this point? Or is there still some sort of fertile avenues to...

Just let me high level just talk about just overall kinetics of how this goes. So again, you're correct on most of this information, 2,500 since that positive number from us. We look at this as a view of trying to continue to drive script growth, double-digit script growth on a quarter-over-quarter basis. And I think the thing that will probably be most helpful is to talk through the opportunity that exists with the depth. We put out some information in Q1 in regards to the number of number of patients at each account that we're really trying to look for and focus on some opportunities. So you can add a bit there.

Yes. So as we look at the priority accounts, the highest volume accounts are managing over 200 patients. Now not all of those patients will need therapy, some of them include -- are currently on therapy, but some of them are being monitored for progression. So one of the things with this disease is that they aren't treated continuously unless they continue to progress, right? There oftentimes are periods in between, we're there and watch and wait. So as those patients then progress in the future, then that's a treatment decision where we can potentially consider OJEMDA. And so there is a tremendous amount of potential for us to get greater depth. But it does take time because again, those patients -- it's not like other oncology settings where the patients like go from one drug to the other and move through them fairly quickly. Many of these patients are on drug for 2 years, which is a plus from a duration perspective, but it does mean that you don't have any treatment decisions in that 2-year frame, right? And so I think that the dynamics in this market are steady, incremental growth. This isn't a market where you'll just like see a hockey stick kind of movement, but we are continuing to make progress and growth as we go and drive -- as we drive depth and broadening perspectives on the right OJEMDA patients.

Okay. So it's really just being there ready as the patients come in for the launch?

Exactly.

Okay. And maybe circling back on sort of the 2-year point, I appreciate it's still early days here, so we don't necessarily know what the duration on therapy is in the commercial setting. But I think in FIREFLY-1, 2 years was kind of the metric there. Is this the right yard marker to use when thinking about persistence on therapy? How should...

Yes. So it's tough to know in the commercial market, right? We're not at the 2-year point , right? As you noted, the data out of FIREFLY-1, we're quite clear. We're just under 24 months of treatment duration. We're not at that point. We do anticipate some difference between commercial market and the clinical trial, as you would expect and as we've seen with most other therapies, but that is the best benchmark for us right now until we have the opportunity to extend timeline in the market.

Okay. Okay. And I guess, any feedback from the field sort of on the -- I think compliance has been pretty good, at least in the clinical setting. Anything to mention there, drug holidays, et cetera?

Yes. So compliance has been excellent with the drug, been very high. Refill -- on-time refill has been very high. And so we haven't seen a lot of drug holiday so far. But again, we're a year in, right? So -- but that is a dynamic in this marketplace where -- because, again, these tumors don't progress that fast. They do have a little bit more room if a patient is experiencing a side effect and they want to give them a little break. They do sometimes do that regardless of what treatment they're on. But we haven't seen that as a significant dynamic yet.

Okay. Is there any work being done either on the clinical side or from the data that you've accumulated from Firefly-2 about retreatment?

Yes. There -- some retreatment did exist in regard out of out of the FIREFLY-1. Elly, do you want to...

Yes, the retreatment data we published was very preliminary at the end of last year. So at that point in time, we were just having patients cross over into being eligible for the treatment holiday. So that data is evolving. And we're hoping for our 3-year data cut that we'll have a much more comprehensive picture of what happens after patients stop treatment and then for patients who do experience tumor regrowth, what happens when they start tovorafenib. At the end of last year, I think we published 3 patients who had stopped treatment, one patient who did restart to [ tovorafenib ] and evidence of tumor response after restarting.

Okay. Okay. That's helpful. And I think we will get longer and longer-term follow-up from FIREFLY-1, of course. How does that sort of positively feed back into the way that you can market patient management on the drug as a sales effort?

Yes. I think it all ties back to the opportunity for us to really drive to the second line. That's -- you hear Lauren saying multiple times, and you'll hear from all of us repeatedly, additional data is additional education. Population of physicians and treating physicians that are more thoughtful or need more education, need more experience over time, all of that long-term data will help out over that and really try and push to that second line. Is there any dynamics of the physician community that you want to add in regards to treatment and data over time?

With respect to response -- sorry.

How the physicians react to treatment and additional data?

Yes. So I mean I think you've described, as we build additional information and the experience of what happens to patients, both for the duration of their treatment and then can they pause treatment for how long? Do they re-respond to treatment? I think we will continue to see patient -- physicians get more and more comfortable with what patients will experience with OJEMDA. As we now are building experience in frontline, I think that will help as we get more of that data also translate into the second-line space and beyond.

Okay. Okay. That makes sense. And I think in the way that you guys talk about the launch, sales and total prescription trends are probably the most meaningful here in terms of gauging uptake. But we've heard from a few investors who are trying to back into active patients on therapy in any sort of quarter. And we've tried to do that math based on the numbers that you guys provide. I'm sure it's pretty inaccurate, but we do our best. Is this maybe a useful metric or not so much? The number of patients specifically on -- just active patients.

Yes. I mean, look, so as an example -- yes, is the answer to your question. We provided at the end of 2024 time frame that we had about 280 active patients on. The understanding of the concept of that was actually quite intentional to make sure that not only analysts like yourself, but the buy side as well understood the manner in which we were building patients over time. So we've been pretty intentional about giving patient numbers, total patient numbers twice during our launch. One was in the beginning of the launch, where we talked about split between the EAP and non-EAP patients in the first couple of quarters. That was really important to try and understand that there was a large group of EAP patients that came on to therapy quite quickly. And that could impact your models, just being blunt. And then the end of the year here was to try and make sure everyone can understand that, given the information we were provided, model into what compliance rates were, how long duration of therapy they're receiving and get a little bit of balance in between what we were seeing in on-label and off-label as well. There's a dynamic associated with off-label use that we're seeing a little bit more than we expected prelaunch, all positive from that perspective. But the duration of those patients on therapy, of course, is much shorter than the OJEMDA patients that have pLGG.

Right. That's kind of in that 10%...

In that 10% range.

Yes. Okay. Okay. I mean I suppose that would be encouraging read ahead for FIREFLY-2, right? I imagine those are mostly frontline patients?

Actually, we don't think they are. We think there are other tumor types for the most part. There is -- we believe there's some frontline use there, but most of the other tumor types. The data on the off-label patients, as you can imagine, is not as robust as our on-label that go through our hub, and we have a better understanding. So it's sometimes difficult to tease out what those patients are on or what they're using for, but we actually believe a majority of that usage is actually not frontline.

Okay. Okay. That's helpful. Yes. Maybe shifting slightly to talk about label expansions, you've got EU filing recently with Ipsen. I think it was recently accepted by EMA. how should we be thinking about approval timing in the EU and maybe the incremental market opportunity in the relapsed/refractory setting?

Yes. So as we talked about earlier, Ipsen is our ex U.S. commercialization partner. They have rights for tovorafenib outside of the U.S. market, which, of course, we retained. They've done a great job overall for us so far. They recently announced at the end of their last quarter, to your point, that the EMA acceptance of the regulatory filing in Q1. And they have an anticipated regulatory decision for that filing in the middle of 2026, very much on standard protocol and timeline for European regulatory filings, 15-month standpoint is about average. It could come quicker or a little slower, of course, but we like that spot. From a market perspective, when you look at patient numbers, we see a similar amount of patients in the U.S. as we do in Europe, very similar to a lot of other oncology drugs. There's no reason to believe there's a founder effect or anything that would drive up additional patients there. But when you look at it from an overall market perspective, we anticipate pricing that will be below U.S. standard, of course, but still a really great opportunity for the way in which we work. There's milestone payments associated with the regulatory approval and commercial sales, as you'd anticipate in a commercial agreement. And then we were able to retain some, what we think are very favorable back-end right there. So we're in mid-teens to mid-20s tiered royalties. So we're doing our best to support any regulatory filings they have in order to really help the overall company and get access for more patients.

Okay. Okay. That's really helpful. Maybe this is a good time to ask, just given the most favored nations news on Monday and the recent FDA and [ CBER ] appointments and tariffs. How are you guys thinking about -- obviously, there's a lot of unknowns and everything is influx almost daily. But does this feed into your thought processes at all like expanding ex U.S.? Or maybe just walk us through sort of..

Yes. So you're correct, the volatility associated with changing macroeconomic policy is tough to navigate. It's tough to navigate for all of us, we're not alone in that scenario. When we break this down and look at it from an overall situation, we do our best to stay on top and really look at this with a lot of humility as much as possible and understand what we could impact. I'd segregate a couple of the pieces here. There is the context around tariffs for us, and particularly China is the one that comes up on a regular basis. The financial impact associated with those is what, even if they're in at a higher rate, is relatively modest. There is no impact for drug supply for us in any foreseeable future. And that's really the biggest concern that we have on that. So that's off the table and not a risk. When we look at policy in regards to pricing, a majority of our patients are on either Medicaid or commercial. So from what we know at this point, we perceive less of a risk to Day One. But it's a challenging environment, policy decision seemed to be changing on a regular basis and our -- how we anchor our beliefs on views on all of these things is always a patient-first focus. And what we see coming out in regards to pricing policies is not what we believe is good for industry, patients or continued drug development. So we'll continue to monitor how it can impact us. But again, at this point, I don't see any major change in our business.

Okay. Okay. We'll put -- maybe we can shift to FIREFLY-2, obviously, maybe not a ton to say here. We're just -- the study is progressing. Maybe talk about your sort of enrollment targets. And how this sets you guys up data-wise?

Yes. So I'll get to a high level, and then Elly can give a brief summary of the trial. We have guided that we'll have our last patient in completion of the last patient in the first half. That time frame, we set up earlier in this year. It's a 400-patient trial, and the protocol drives a year of follow-up following that last patient. So data will be in the 2027 time frame. We'll give more specifics once we understand that true piece there. But enrollment is going well, as you would anticipate for a trial that size, multinational sites. Is there anything you want to add on the...

Yes. It is a large trial for pediatric oncology and for this disease specifically. It's 400 patients randomized. These are RAF-altered patients, so that includes V600 mutations, BRAF fusions as well as RAF alterations. And we're randomizing against 3 standard-of-care chemotherapies. So it really, I think, will give a good comparator to common-use regimens in the frontline space. And it's enrolling well. It's a large footprint of a trial, as you can imagine, to enroll that many patients. So it's a global study across many, many regions, and we've expanded further to help with enrollment. But it's actually going very well, and we're looking forward to wrapping up enrollment in the first part of next year.

Okay. And obviously, the enrollment -- the pace of enrollment is the same kind of dynamic that you're seeing on the commercial side, right, in terms of when patients could be candidates? Or is it maybe slightly different?

No, I would separate those two things. In general, we see strong demand in the commercial market. We see strong demand in the clinical trial. I think that's kind of where those things do end from that standpoint, just given the different treatment paradigm associated with relapse setting versus the frontline. But yes, again, a large trial, like Elly said, but continue to progress well.

Okay. Okay. So first half '26 enrollment might sort of set up a top line in 2027. Is that kind of...

That was the way we would hope for, but we'll get more specific guidance when we get the last patient in, for sure.

Okay. Yes. Okay. And I guess, how do you think about the commercial opportunity in the frontline? Is this kind of its own market? Maybe the retreatment data will help sort of clarify the overlap potentially there. But how are you thinking about this versus the current approval?

Yes. So the frontline market opportunity has always been very critical to building the business for the OJEMDA business in general. We have a little bit of a unique setting, given the duration of treatment for patients on this drug. So that makes the relapse situation in the market there quite sizable as well. But we do see a really substantial opportunity in the frontline. And as Lauren noted and Elly noted, the frontline data and a positive outcome there can only contribute to helping us drive to that second line in the relapse setting, provide more information to patients and physicians in the relapse setting, continue to bolster that while we're getting to the frontline, which is about 1,100 patients in the U.S. per year.

Okay. Okay. That's helpful. A couple of minutes left here. I do want to talk about the pipeline with DAY301, Pretty interesting asset targeting PTK7. Maybe just walk us through sort of what peaked your interest about this asset to bring it in-house? And how maybe the mechanism or the target is differentiated for an ADC?

Yes. So DAY301 is a PTK7-targeted ADC, one we found quite compelling from an overall standpoint with opportunities in both adult and pediatric cancers. The thing that really drove us to this asset versus many others that we looked at over the course of the years was really the clinical validation associated with it. So there was a prior Pfizer AbbVie program, cofetuzumab, that provided for a PTK7 ADC that gave the validation associated with the target itself. There were some toxicities in that trial despite seeing some clear signs of activity. We believe that those toxicities were associated with the linker payload, which is [ norvastatin ] based proprietary payload. We saw DAY301 is an opportunity that had that same targeted antibody, but with a more modern linker payload that could potentially get us through some of the limitations associated with cofetuzumab, brought that asset under continued development, currently in a Phase I dose escalation trial and cleared the first dose cohort in beginning of this year, I believe.

Okay. Okay. And we got a nice look at the study design at [ AACR ] in your poster. Maybe walk us through the design, any points on the dose escalation, what was sort of a relevant therapeutic range could be on the efficacy patient selection? Anything that you'd kind of call out from...

The Phase I is a [ volume ] design in terms of dose escalation steps. We did clear the first dosing cohort. Based on the preclinical data in mice, we're expecting that anywhere within the first 1 to 3 dose levels, we should reach exposure levels associated with antitumor activity. So we're hoping, hopefully, pretty soon in the dose escalation; we will start to see some tumor responses.

Okay. Okay. And that first dose cohort, there's a single patient, right? I guess how has enrollment been going sort of since that announcement?

Yes, quite well. We have a very high-quality Phase I centers that most folks are familiar with. And the screening slots fill up pretty quickly, and folks are very interested and committed to the trial. So yes, we're doing quite well at the moment.

Okay. Okay. Great. And maybe in the last minute or so that we have, just ending on a broader note, how does this program sort of exemplify your BD strategy? Or what is your BD strategy from here? You obviously have a fairly stable cash position to have some optionality there. Maybe just talk to that.

Yes, I actually think it's an overall really good embodiment of how we look at things. The 301 program has a potential to be best or first-in-class asset. Still early, of course, but that potential exists. Large marketing opportunities, both in adult and pediatrics, which is very important to us. Clinical validation there that exists is super relevant to how we view interesting assets. And when we're doing BD, which we have a consistent process on, we really look for assets of this type of quality. This stage is also a very relevant standpoint from our company size, early clinical assets or an area that we can play in and win in, to be fair. We have a high-quality development team really. There are companies that are looking to out-license assets, see that out of our company. So we see that. And as we look forward, just on an overall basis, you're correct, cash balance is very strong. Noted earlier, the lack of a need to drive additional equity capital with our current pipeline, as we've contemplated. But we also do have some room for additional business development. A potential another asset about this size, about this stage could be an interesting type of thing for us. We will stay in oncology. We do like ADCs, small molecules, of course. You'd want to see us moving into radiotherapies or any kind of cell therapy in general. We'll stay really focused on this and keep the bar high for additional assets and do our best to really responsibly allocate our capital programs that we think can drive growth for investors.

Okay. Perfect. Well, I think with that, we're over time. So we'll end it there. But thank you very much for the conversation for attending the conference.

Great. Thanks.