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

Good morning, everyone. Thanks so much for joining us. I'm Andrea Newkirk, one of the biotech analysts here at Goldman Sachs, and I'm really pleased to be joined by Jeremy Bender, CEO; and COO and CFO of Dan. Thank you guys both for joining us.

Andrea, thanks for having us. It's great to be here.

Great. Well, as we sit here today, OJEMDA has been on the market now for over a year. What has been the biggest learnings that you've taken from this first year of launch?

Andrea, it's been a great first year since the approval in late April last year and the launch shortly thereafter. A few dynamics that have been really important for us. The first is we got a very fast start with the launch due to the expanded access program that we had in place at the time of approval. That created a base layer for us of patients on treatment that really helped to sort of establish a good commercial base to start with. And then beyond that, we've had really consistent new patient starts. The new patients coming in have, for the most part, been patients in later lines of therapy, and that's probably the most important learning from the first year is that while we're seeing some use in the second and the third line, for the most part, physicians are still getting comfortable with the new agent. For this particular patient population, that's quite important. And so much of the sort of pace of the launch is very much what we expected, which is get physicians to have experience with it, get them to try the product, get them to use it. And that's going to be the key to getting adoption and then driving towards establishing OJEMDA as a standard in second line. And that second line and third-line sort of effort is really pretty critical. And I think it is going to be the focus for us going forward throughout 2025. Overall, though, what I would say is we're ahead of where we expect it to be given those dynamics, and we continue to see steady and incremental gains.

One of the things I find to be super interesting about OJEMDA is this patient population, PLGG, the relapse setting, maybe just taking a step back because I think this is key for people as they think about the cadence of launch and where it can go from here is understanding the nature of the disease, how patients are treated, how they're identified, how often they -- maybe how often they progress. If you can talk through some of those dynamics?

Yes, certainly, certainly. So the relapsed PLGG patient population here in the U.S., we estimate at 26,000. And that's BRAF-altered PLGG patients who've had a prior systemic therapy and may be eligible for another therapy. And that's a fairly large prevalent pool. We think at any given point in time, there are about 2,000 to 3,000 patients on treatment. And that's a dynamic pool. So there are patients who are watch-and-wait patients from that prevalent pool who enter into that treated population when they progress, when they need a different therapy. And that patient -- those patients will cycle in and out. And so the question is, how often does that occur and at what point? Typically, what will happen is a patient will be on treatment and achieve stability for some period of time, long enough that a physician may decide to take that patient off treatment and turn them into a watch-and-wait patient. Those patients are actively monitored for many years. The typical monitoring is every 3 months for patients that are really actively monitored. Those patients will come in for clinical evaluations and for MRIs to scan the tumor and see what the status is. And so that frequency is a little bit less frequent, of course, than you may be used to in other cancer settings. And once there's a signal from that MRI, it's also important to note that, that isn't necessarily going to trigger treatment. It really is a holistic decision about the clinical status of the patient in addition to that MRI information that will be critical to determining whether that patient actually gets a new therapy or not. So that frequency is a little bit slower than what you see in terms of new patient acquisition or the potential for new patient acquisition than you see in acute tumors in the relapsed setting, for example, when there's solid tumors or liquid tumors in adults. And as a result, the timing of the acquisition opportunity for new patients for OJEMDA is just a little less frequent than what you see in other settings. And that's one of the reasons why this launch, we anticipate will be more like a rare disease launch where you see stacking behavior over time but not a very rapid adoption rate. And importantly, not a very rapid time to peak penetration. We think it will take real time in many quarters to get there.

Got it. So more slow, steady, linear launch versus something that has been...

Very much what we're anticipating and have been anticipating. And some of that also comes from the fact that for these particular patients, there are some options that physicians feel they have. They're all off-label or clinical trials from the past, but really getting them enough experience and comfort with OJEMDA is going to be required before it really becomes a clear standard of care.

Maybe speak a little bit more to that point. What can Dan do to encourage that prescribing behavior to help them move away from the off-label use that they've been using for years to now an approved therapy such as OJEMDA?

Yes. It's really all the things that we've been doing since our launch. It's really a focus on, of course, all of the activity of the field, our direct sales force, but it's also medical efforts and making sure that we're on call for any questions that physicians or their office staff have. And it's further publication on OJEMDA from the pivotal trial that's FIREFLY-1. We had 2 posters at ASCO last week that are really important for continued educational efforts. And those covered both changes in growth velocity on OJEMDA treatment in FIREFLY-1 as well as looking at AEs, in particular, skin toxicities associated with OJEMDA use. And those were very well attended and important publications for us, both at the conference itself and of course, through medical efforts with our customer base.

On those 2 posters specifically, just how meaningful is that for physicians to be able to look at this breadth of data that you've generated here? How important is that as they think about using OJEMDA and understanding the longer-term profile?

I think it's very important. This is a group of physicians that is cautious with respect to new treatments for this particular patient population. And that's because it's a group that is accustomed to certain treatment patterns over time. Some of those physicians prefer chemo. Some of them will use off-label MEK inhibitors, some of them will use other off-label targeted agents. And they've been using those who are trained on those products for long periods of time. And so introducing a new product into the mix is both a great opportunity, but it's also one that introduces risk in their own minds among a patient population that has significant unmet need, but need that is not about near-term survival. And that really differentiates this patient population from those that you see other pediatric patients that have brain tumors. So it's a kind of delicate mix. But so far, what we're seeing is real receptivity to the data. There's always going to be, and this is true not just for this product, but for virtually all products in the cancer space, a desire for longer-term data, and we'll continue to generate that data. We've extended FIREFLY-1 to continue doing so. And we think the more data we generate over time, the better. I also would emphasize that the FIREFLY-2 trial, which is looking at OJEMDA in the frontline setting will also be an important addition to the data set for the same group of physicians as they think about how to use OJEMDA best.

And on -- I guess maybe on the observance of growth retardation, which is one of the posters you just mentioned. How concerning is that for patients? I mean this is a pediatric population. Maybe talk through some of the findings there?

So the first thing I would emphasize is that these patients PLGG patients already, although they are not great studies, have a tendency to have shorter stature than average kids that don't have brain tumors. And that's driven by some combination of the tumor itself and treatments that are used for that tumor independent of OJEMDA. So it's an effect that is frequently observed for these children, but not tracked particularly well. So physicians are fairly accustomed to it. They're not particularly alarmed by it. I do think it was really important to establish as early as we could the reversibility of the effect as well as the lack of any increase in bone age and the lack of any fusing of growth plates. And the reason is that there was an experience in a prior clinical trial setting with WNT Inhibitors that -- for which there was very serious growth -- long-term growth retardation effects because of the closure of growth plates. And none of that is true for OJEMDA. And so when we talk to physicians and they understand both the hypothesized mechanism, which is CRAF-driven for essentially the arrest of chondrocyte maturation and then the release of that arrest on cessation of treatment, that's very reassuring along with all the other data points that I mentioned. So it doesn't seem to be a big barrier. I do think that the data we recently published is meaningful because it shows not just all those elements I just described, but also after cessation of treatment, it shows really significant rebound growth for a large fraction of patients.

Great. And as you -- you've talked now on a couple of these earnings calls about your focus on driving depth of prescribing. Maybe provide an update here on those efforts and where do things stand?

So what we're doing is very much focusing on the accounts where we see significant patient flow and really looking to establish that clear standard of care. It's exciting when we get a new physician that hasn't had any experience with OJEMDA, prescribe it. that's valuable for us as far as sort of the trial and the use. But in terms of adoption and the numbers of patients that are out there, it's really getting repeat use that's going to be most important. And so I wouldn't say operationally, it changes much for us as far as what we're doing day in, day out. The reality is that this is a relentless effort for us on the commercial side and will continue to be as we drive towards that standard of care. But the significant opportunity that exists really is in that depth. And we've quantified that a bit in our corporate materials. What you really see is that there's a significant opportunity to continue driving adoption. And it's really through getting physicians who've already had some experience with OJEMDA to use it in a greater proportion of their patients. Going forward, we anticipate that, that's really fundamentally about moving up in terms of line of therapy. And that a lot of the patients that we've been getting to date have been later lines, so third, fourth, fifth line patients. And we're starting to see that shift, but I think it's really getting a depth of experience that will create that shift and give us that depth.

What -- I guess, maybe what is the key driver to getting a physician to go from their first patient treated to being that repeat prescriber? Is it a mind shift for them in terms of using OJEMDA, understanding its benefit? Is it truly just waiting to see additional patients come into the practice who are progressing?

It's -- I think it's all of those things. It really depends on the physician, but I would emphasize at the outset that the sort of hesitancy that you see among some physicians, and it's not extraordinary. It depends on the physician, varies enormously depending on what that physician's point of view are. But the big categories are, you really having productive experiences both from an efficacy and a safety standpoint. One, on the efficacy side, there's no question that when you talk with experienced physicians with OJEMDA, they really see this as a major move forward from an efficacy point of view, much greater depth of response than they can achieve with other options. And that's really critical. It's a little nuanced when you look at the data because there aren't many data sets out there, but that's an important message. And so having that experience firsthand is critical. I think just as importantly, especially for physicians who haven't had an experience yet, having a successful experience with it for their patients from a safety standpoint is important as well. Getting through some of the early skin toxicities, which can be -- they're relatively frequent for this and other MAP kinase inhibitors for that matter. But going through that, they tend to get mild over time, like they're worse in the first few doses than they often can be later. But managing through that through some of the preventative measures, those kinds of actions are pretty important, I think, to their adoption. And then I think it's time as well. It's really seeing that effect over time and really understanding what the impact on the tumor is over time.

What brings, I guess, the patient profile earlier into the line, the second line?

I think -- I really think it's physician confidence given all those experiences, very straightforward and continued data sets that we'll have. Yes.

You've referenced now kind of the steady patient growth that you've seen over time. I think in the past couple of quarters, you've characterized as double-digit growth over -- quarter-over-quarter, somewhat of a slowdown potentially in 1Q. Maybe just talk to us about the 1Q dynamics there. And the rebound that you saw in April, is that now a new level from which we should expect linear growth from here?

Yes. So we did have a slower Q1, and that was largely driven by the holidays actually in December. And the reasons are more intuitive when you start -- when you look back. This was not necessarily driven by payer resets for those who are on commercial insurance was driven more by just the dynamics of when patients are evaluated and how they become eligible for prescription. So in December, the holidays, there are just many fewer opportunities for office visits by virtue of holidays and offices being closed. Beyond that, there's also a real reluctance among families and patients to go in for scans in that holiday period, largely because it's such an anxiety provoking point for them that they'd rather defer that. And that's what we believe happened over December as our first year of launch, so really didn't anticipate that dynamic. And so in January, that means a lot of the deferred appointments occurred. And basically, what that does is defer by a few weeks, the potential for a new patient start. And that's essentially what we observed. Going forward, we're seeing continued strong new patient starts and patient acquisitions. We are anticipating double-digit growth going forward, and that's in revenues and...

Got it. Maybe talk to us a little bit about the dynamic of the extended duration of treatment that these patients are experiencing on OJEMDA, how should we think about the durability, both based off of your clinical trial experience, but what you're seeing right now?

So the clinical trial experience is still the only true median for duration of treatment that we have. And in FIREFLY-1, what we saw was 24 months or just under 24 months of median duration of treatment. And what we're seeing for on-label patient duration of treatment in the commercial setting is consistent with what we would expect based on that clinical trial. It's too early to know what that median will be. What we're seeing, though, again, for PLGG patients is consistent with it. We're observing a little bit more dropout early due to safety considerations. So that's -- we've had enough time to see a little bit more of that than we observed in the trial. But overall, our duration treatment is looking like it will be fairly lengthy. It's too early to say a number at this stage. We're just not that far into launch yet, but it's consistent with fairly long duration of treatment by -- certainly by oncology standards. It's probably also important to note that one of the surprising aspects of our experience to date as far as the launch has been the extent of off-label use we're getting. Approximately 10% of our paid scripts are for off-label use. And those uses, by the way, are typically solid tumors in the adult setting. They can be high-grade tumors, high-grade brain tumors that is melanomas, lung cancer, pancreatic cancer. Cancers where there's a RAF alteration, typically, that's a RAF fusion, not always. And among those patients, you're seeing much more rapid progression and therefore, shorter durations of treatment on the order of somewhere between 3 and 5 months is typical. But that's not the case for the PLGG or the on-label patient population.

Just a quick follow-up there. The instances of AEs that are driving the higher dropouts in the commercial setting than what you saw in the clinical trials...

Yes. We don't have perfect information about the dropouts. And we also don't know with certainty that the dropouts are permanent, right? There may be some dose remission and patients coming back on to treatment. So it's a little early to say with anything definitive. But I would say we're getting a little bit more early dropout than we saw in the clinical trial. And that we expect is probably typically due to those skin effects. And so the work that we did to publish on the experience with that as an AE at ASCO, I think, will be important. And we have been throughout the launch period, of course, educating on this topic, and it really is a matter of continuing that educational effort and making sure that especially physicians who don't have experience with OJEMDA understand what the preventative measures are and are working with families to make sure that, that information is available. And so they understand like the dose submission and dose skipping guidelines as well.

And the preventative measures are pretty standard, right?

They're really not standard per se. They vary a lot by center. Many centers have been using, in particular, various MAP kinase inhibitors over time and have developed their own kind of protocols for addressing skin because this is a very common AE among all MAP kinase inhibitors effectively. In our case, the most frequently used and effective preventative measure is to loop bleach pads. And that's really what we recommend for patients who are going to be going on treatment.

Got it. And then quickly on the off-label use that you're seeing, the 10%, how do you expect that to trend over time? Is that a proportion that continues to grow or?

Yes. Well, it hasn't really grown. It's been pretty consistent since the launch. We don't expect it to grow. Obviously, we're not promoting against it. We haven't seen a big significant sort of change over time in that proportion of sales. It's been relatively stable. We would expect it to actually shrink as a proportion of the total as we grow the PLGG market.

Yes. Makes sense. And then just a follow-up there on the duration. So a little under 2 years that you've seen in the clinical trial. What is your research or your conversations with physicians suggesting to you as to their desire -- their intent for keeping their patients on OJEMDA? And then what are your best guesses as to potential rebound growth or rebound tumor growth that can happen if patients were to come off?

So a lot of important topics in there. The first is when we speak with physicians about their intent, the most frequent comment we get is that there's an intent to treat of 24 months. And that is pretty standard actually for targeted agents in this patient population. So it's not a surprise that, that is the intent. Now I want to just remind everyone that even though that's the intent, that doesn't mean that everybody gets 24 months. You're going to have -- even in our study, what you saw is a median of just under 24 months, but that meant that half the patients had less than 24 had 24 more. So that is clearly the intent. And I don't see that changing significantly until we publish data that would indicate that there's another reason to -- or another rationale for a different approach. But it's a default, and it's not based on existing data. Now with respect to potential for rebound growth, we published data last year actually from a 2-year follow-up on FIREFLY-1 that showed among patients who had taken a drug holiday, there were very few. I think there was one patient that had progressed after taking a drug holiday at 24 months. And so we're optimistic that we aren't going to see the rebound growth that is typically described for MEK Inhibitors, but it's a little too early to say certain or not it will require additional follow-up. The median duration of follow-up after that drug holiday was about 3 months, which is around the period that you see what the field is calling rebound growth. I think one of the important questions that physicians continue to have about OJEMDA, especially relative to the MEK Inhibitors is whether we're going to see maybe driven by the biology, maybe driven by the deeper responses that are observed with OJEMDA, a decrease in any either rebound growth, which is the growth that happens immediately after cessation of MEK Inhibitors often or whether we're going to see decreased progression over time in periods of time outside of that 3-month window. So what we've seen is encouraging, but it's going to require additional follow-up.

If a patient were to progress following a successful stent on OJEMDA, what are their options? Could they come back on OJEMDA for a second round of treatment? Or do they need to potentially use a different agent?

So we believe that there's going to be an opportunity for a significant fraction of those patients who have benefited from OJEMDA to come back on treatment if they progress off treatment. And that's a belief today. We don't have data to describe that specifically, although there is a patient from that same drug holiday publication that I described that progressed after cessation of treatment after the drug holiday and then was retreated with OJEMDA and was observing stable disease at the time of that publication. So I think there's reason to be optimistic. Part of that is mechanistic as well because these tumors are genetically stable. They don't typically develop mutations that lead to acquired resistance. So there's a likely scenario where you're going to see a fair amount of retreatment. And for that reason, we're anticipating over the long run that we may very well see some on-again, off-again treatment pattern for OJEMDA, which again differentiates it very strongly from what you see in other oncology settings where a given agent is typically, and there's some minor exceptions, really only used, especially in the relapse setting during a defined window until a patient progresses.

Got it. Maybe talk to us a little bit about what's happening with the European filing here and then also with your frontline study.

Sure. So the European filing is now in the EMA's hands. No guidance yet specifically as to the timeline for potential approval, but really good news that the EMA has actually filed that NDA, and we're excited. We're also anticipating additional filings outside of just that central EMA filing that includes Japan and other countries in Europe. So Ipsen, our partner, has been really moving quite rapidly to make this a new medicine in geographies outside of the U.S. as well, which is very exciting. With respect to FIREFLY-2, that study is enrolling nicely. We've been expanding the number of sites and countries at which we're making that trial available. We're on track for our completion of enrollment in the first half of next year. And the data from that trial per protocol will be available 12 months after that last patient is in. I'll remind you that the primary endpoint for that trial is a response rate by, in this case, SAPO criteria, which is the same set of criteria that were really critical for approval in the relapse setting.

Got it. And when you think about the European launch, what can you draw from the U.S. launch? Are there parallels there, learnings that you can take from the experience here that will improve the experience over in Europe?

I think so. Any time you have a group of physicians who are treating a similar group of patients, and they're very similar in Europe, of course, there's no real differences. you learn things about what your experience is in one geography that are leverageable elsewhere. And we're working with Ipsen to provide those insights. I think fundamentally, it's really going to be about data, comfort with the product and experience in the same way that it is here, albeit a greater data set available at the time of launch than we have had, and that will be, I think, important for their efforts.

Is the treatment paradigm or available therapies over in Europe similar to the U.S.? Are we still going to have that same maybe comfort with off-label use over there?

No, it's different. And the reason is that just off-label treatment for targeted therapies, in particular, is much more challenging in Europe, it's much harder to get reimbursement for and even in many countries, prescribe something that isn't approved. And so our expectation is that the MAP kinase inhibitors and bevacizumab and some of the other options that are used here and that we are competing with as a habit for physicians will not be available as often for European physicians in particular. So I think it will be a different commercial process, maybe a little bit more straightforward. That being said, I don't actually think it's the therapies per se as much as it is the comfort level and the habits that physicians have established that really creates this fairly steady and relatively cautious orientation. I think that's also likely to be the case in Europe.

How much exposure have the European physicians had to OJEMDA?

Pretty significant. The FIREFLY-1 trial was run in a number of European sites. And one of the important partners for us in the FIREFLY-2 trial is a consortium called LOGIC. There are a number of the biggest academic centers for PLGG in Europe that are participating in that trial and have been really key partners in designing and implementing it. So there's a fair amount of experience there. That being said, it's not going to be the same as a commercial experience. So there'll be a lot of new physicians to agenda as well.

Of course. And maybe just going back to the frontline opportunity. We talked about numbers and you kind of laid out the addressable population or the number of patients that are on treatment in a given year. How does that expand in the frontline?

In the frontline in the U.S., it's 1,100 patients a year that we estimate that are BRAF altered and require systemic therapy. So very straightforward, a much more straightforward incident model in the frontline setting.

Okay. Helpful. 301, and Charles, I'll bring you into the conversation as you think about -- in the last 4 minutes. As you think about Dan's strategy with BD, maybe talk to us about what interested you in the 301 asset and how you're thinking about potential in-licensing opportunities from here?

Yes, of course. So 301 for us was an important asset, of course. We're really pleased to have a high-quality commercial asset with OJEMDA, tovorafenib, both here in the U.S., progressing with the frontline trial as well. And that's really an important part of the pipeline. But for continued growth, we really wanted to make sure that our team had another high-quality asset for clinical development. In this case, the 301 program was a really nice model of how we look at BD. And generally, in an area, we think we're competitive. The asset itself had clinical validation from a previous program, a Pfizer program, cetuzumab on the target itself. So we like that. We thought there were some liabilities associated with their asset that were related to therapeutic index and a previous generation linker payload. When we saw this new ADC with a more modern linker payload, we thought the hypothesis there was intriguing, allows us to work in a number of adult and pediatric oncology indications. So really, really quite interesting to us. It is in the clinic now, as we know, we dosed the first patient and announced that early in this year, continuing on the dose escalation. And that model and that sort of asset is similar to what we look at quite frequently. As you know, we're very active in BD, have a lot of deal flow going through, but also trying to maintain a high bar. When we're evaluating, we're looking at things very similar to this. Targeted oncology is a real focus for us. We make sure that from our standpoint, there's an opportunity for a first or best-in-class asset. And the adult and pediatric indications also need to marry to make sure that the development of the strategy for the company also works as well.

Jeremy, maybe on that point, the founding of this company was based on the idea of being able to have access into these pediatric populations that otherwise might be underserved. Do you see that shifting at all? I mean, I guess the 301, you're initially starting in adult population. Do you ultimately see any asset that you bring in to be something that can fit within the pediatric population? Or are you open to it being broader?

So it's an important question and one we, of course, debate. There's very few programs that have no opportunity for development in the pediatric setting. So that's important. So it's a fairly rare opportunity that we could pursue. But for now, we're really focused on those programs that have opportunities in both adult and pediatrics. I would really focus though on differentiating the adult versus the pediatric development plans here. The adult work, for example, in 301 that's ongoing is going to be critical, and we'll move to pediatric work as quickly as we can. We actually need to establish a dose before we can do that from a regulatory standpoint. But we'll pursue those adult and pediatric paths with equal intensity, at least with the operational elements of what we pursue. Now from a value standpoint, just given the patient populations and the potential registration paths and the complexities, I do think that as you're going -- as we go forward, you will see more emphasis on the adult side and the pediatric side, but we will never lose sight of the sort of original founding of the company and the real intent and mission to make more new therapies, new medicines available for children who are living with cancer. So that's all critical. And I want to add one element of news from this morning that's important. We have just hired a new Head of R&D, Mike Besconllis, who will join us next Monday, will be his first day. Really excited about what Mike brings to the table. He was previously at ImmunoGen, where he was Head of R&D before the AbbVie acquisition and prior to that at Takeda, oncologist by training. But I think will be a really critical voice, of course, for us as we're looking at those programs going forward.

Great. Well, with that, thank you both for joining us. Thanks, everyone.

Thank you, Andrea.