Jazz Pharmaceuticals plc (JAZZ) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Jazz Pharmaceuticals Investor Update Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Kathee Littrell, Head of Investor Relations. Ma'am, you may begin.

Thank you, Crystal, and thanks to those of you joining our investor update call today to discuss our exclusive license agreement with PharmaMar for lurbinectedin in the U.S. The press release and the slide presentation accompanying this call are available on the Investors section of our website. I'd like to remind you that some of the statements we will make on this call relate to future events and performance rather than historical facts and are forward-looking. Examples include statements regarding the potential benefits of the license agreement for lurbinectedin, including the potential accelerated FDA approval and the launch of lurbinectedin in the U.S. in 2020 and potential meaningful near-term revenue opportunity. These forward-looking statements involve risks and uncertainties and could cause actual events, performance and results to differ materially. We undertake no duty or obligation to update any forward-looking statements we make today. And again, welcome to the call. And on the call today are Bruce Cozadd, our CEO; Dan Swisher, our President and COO; Rob Iannone, our Executive Vice President, R&D; and Mike Miller, our Executive Vice President of U.S. Commercial. And Bruce, I'll turn the call over to you now.

Thanks, Kathee, and happy new year, everyone. We are very excited to be here to update you on this deal with PharmaMar to bring lurbinectedin into our portfolio. We believe this is an excellent complement to our current portfolio of commercial assets in hematology and oncology. Defitelio, Erwinaze and Vyxeos provides another near-term commercial opportunity along with JZP-458. And of course, we have a growing portfolio of earlier stage hematology/oncology and precision oncology assets in JZP-341, ImmunoGen, pan-RAF, Exosome and CombiPlex. When it comes to lurbinectedin, in particular, we're excited that this is a late-stage opportunity for the company and provides a highly differentiated product for small cell lung cancer in an area of true unmet medical need. This aligns with our general focus on bringing life-changing medicines to people with limited or no options. As a reminder, this is an asset that met its Phase II primary end point of ORR, also has improved safety, tolerability and administration profile. The NDA for this product was submitted in December under Accelerated Approval regulations with a requested priority review. And it has the potential for approval and launch this year in 2020. Along with other things we brought in through our corporate development efforts, this is an asset that has -- meets true unmet medical need, is highly differentiated from other assets, provides a lot of benefit for patients, has long-term potential given its regulatory and intellectual property protection, and we can't wait to bring it to market. So let me just remind people what we announced at the end of last month in terms of the transaction itself. We've signed an exclusive license agreement, this is for U.S. rights, to lurbinectedin across all indications, including small cell lung cancer. There was a $200 million upfront payment. We expect to make that payment this month upon Hart-Scott-Rodino clearance. There are potential milestone payments, both on regulatory outcomes, including the potential for $250 million on the achievement of accelerated and/or full regulatory approval of this asset within certain time lines. And then there are commercial milestone payments, those relate to sales thresholds, and we'd be thrilled to pay all of those. There are other payments that could be paid upon approval of other indications. Those will be creditable against commercial milestones, so not in addition to commercial milestones. PharmaMar will be supplying us with the launch quantities and ongoing API. And as I said, we expect to close this transaction this month, and we look forward to completing the regulatory review this year and preparing for a very successful launch. I'll echo some of what PharmaMar said in their call the other day in that we think we're terrific partners on this asset. We're very pleased to see the incredible commitment to this asset over many years on the part of PharmaMar and are thrilled they chose us to bring this product to market to help patients who need them. So with that, let me turn it over to Dan for a little more background.

Yes. Thanks, Bruce. What really attracted us to small cell lung cancer, it's a meaningful opportunity, but it's really got low survival rates, limited treatment options and really a need for a new therapy, like lurbinectedin. Small cell lung cancer accounts for 10% to 15% of lung cancer diagnoses. It tends to grow and spread faster than non-small cell. It usually comes and diagnosed with advanced stages. 70% of patients are -- often have extensive disease at the time of diagnosis. So while small cell patients are -- they're typically symptomatic, they present cough with weight loss, with various symptoms. And the majority of those patients will have at least one or more comorbidities, including pulmonary disease, hypertension and cardiac disease. On the good news side, since small cell grows quickly, it tends to respond well to chemotherapy, which is part of the upfront therapy. However, initial responses are often followed by relatively rapid recurrence of relatively resistant disease. So there's a very much of a high need for tolerable, effective, second line therapies. Importantly, with the main drivers of small cell being loss of function mutations that are difficult to target, there's been many clinical failures actually in the pipeline, unfortunately, for these patients. And for those extensive disease patients with the current treatments and 5-year survival rates are as low as 5%. So we really have seen this as an opportunity with a new therapy that could really make a difference. And I'll talk more about the treatment paradigm, but the real shift that has been occurring in first-line treatment is in combination with a platinum-based doublet is adding in immuno-oncology, the PD-L1s, primarily at this point with the extensive disease patients. But after they recur from those therapies, there's a need for new treatments. And what's going to be important over the next, say, quarters is going to be the readout that's going to be coming from the ADRIATIC study, which will also likely show that the PD-L1s will have activity in the limited disease. And so it will really free up the entire second-line patients to get challenged with new therapy, such as lurbinectedin. Importantly, the only approved therapy for that stage right now is topotecan, which has some issues around tolerability as well as limited efficacy and a not very convenient dosing schedule. So we're really attracted to what we saw with the profile of this drug. Turning to the next slide in terms of the market opportunity. It's a meaningful market opportunity. 30,000 patients are diagnosed annually in the U.S., 21,000 with limited -- sorry, 21,000 with extensive, 9,000 with limited. Almost all of them are treated, so at least 90% are getting treated today. And then of those, almost all will relapse. At this point, not all of them go on for second-line therapy. There's 17,000 patients that go on for second-line therapy. Initially, we'll be targeting the extensive disease small cell, 11,000 population that, as I say, if the ADRIATIC results are positive, there's the additional 6,000. And then we've seen this in other markets when there's better treatment options with better efficacy, safety from what's currently available, there's an ability to grow more patients coming into second line. So we look forward to educating physicians around that and helping drive those population dynamics. And then on my treatment paradigm slide, switching to that. Yes, that sort of lays it out nicely in terms of extensive limited first line and second line, what's FDA approved and what's in the NCCN guidelines, both in terms of preferred regimens and other recommended regimens. And so based on our own market research as well, we'd say this is a good reflection that in first-line extensive disease, patients are getting the platinum-etoposide plus a PD-L1. We think that was rapidly incorporated into the standard of care, despite the additional sort of cost and needing to add a third program -- a third agent into it. We'll see how fast the limited stage gets taken up by that new regimen. And then importantly, in the second line, you can see the only FDA-approved drug is topotecan, which I referenced, and this was 20-plus years ago with its own sort of limitations. So there's an opportunity here, of course, for lurbinectedin. And importantly, we see activity from the clinical work for patients who are both platinum-sensitive or platinum-resistant. So it provides a treatment option for a broad range of patients. So with that, I'm going to turn it over to Rob to walk through the clinical profile and learn more about the drug. Rob?

Thank you, Dan, and good morning, everyone. I'll start on Slide 13 on the mechanism of action. Lurbinectedin's primary mechanism of action is thought to be interference of transcription factors, including the function of RNA preliminaries, too, which results in double-stranded DNA breaks. This results then in direct killing of rapidly dividing cells in small cell lung cancer. Interesting, lurbinectedin may also interfere with transcription and other cells in the tumor microenvironment, in particular, tumor-associated macrophages, and this could potentially favorably influence the tumor immune microenvironment, making it a good partner for combination with immune therapies. Moving to Slide 14. As Dan alluded to, it's uncommon for small cell lung cancer to have oncogenic tumor drivers. Therefore, there are no approved targeted therapies in small cell lung cancer. Many drugs from a variety of therapeutic classes have failed to show benefit in small cell lung cancer prior to the recent approval of PD-L1 agent and now lurbinectedin. Slide 15 is an illustration of the pivotal -- of the basket trial. And I would point out that the pivotal cohort of small cell lung cancer patients comes from this basket trial of lurbinectedin monotherapy. Small cell lung cancer patients who are required to have had one prior line of chemotherapy, and they are also permitted to have had immunotherapy. The primary end point was objective response rate and the key secondary end points included duration of response, clinical benefit rate, which was defined as any response plus stable disease of at least 4 months, progression-free survival, overall survival and safety. The trial targeted enrolling approximately 100 small cell patients. Moving to Slide 16. You can see that the patient characteristics were typical of an advanced and relapsed small cell lung cancer population. Response to upfront chemotherapy in first line was, as expected, both in terms of response rates and the proportion of patients who are considered to be platinum-resistant. Slide 17 summarizes the main efficacy results. On the left, you can see data on 105 patients, which were presented at ASCO in 2019. There was a strong overall response rate of 35% in the overall population, and this was 22% in the highly resistant patients who had a chemotherapy-free interval of less than 90 days. At World Lung, a subset of 84 patients were also presented, and this excluded those patients who had a chemotherapy-free interval of less than 30 days, the highly resistant population. They characterized chemotherapy-free interval in terms of 30 to 89 days versus those who are beyond 90 days. The objective response rate was 41% overall, and 29% in those patients with a chemotherapy-free interval between 30 and 89 days and 45% in those who had a chemotherapy free interval greater than 90 days. Importantly, responses were durable, and the duration of response was approximately 5 months in the overall group. I would also note that there were 8 patients who had received prior PD-L1 inhibitor therapy, and 5 of those had an objective response. Slide 18 is the Kaplan-Meier curves showing an estimated median overall survival of 9.3 months and a median progression-free survival of 3.9 months. On the next slide, you can see the waterfall plot, showing the significant depth of response after lurbinectedin treatment, with approximately 2/3 of patients having some level of tumor shrink. Slide 20 summarizes the overall safety. Lurbinectedin was also very well tolerated, as Dan alluded to, with less than 2% of patients discontinuing treatment due to an adverse event. The most common AEs are hematologic, which were manageable with routine supportive care. The Grade 3 to 4 neutropenia, anemia and thrombocytopenia compared favorably to the topotecan label, with approximately 22% of lurbinectedin treated patients having Grade 3 to 4 neutropenia versus 70% of topotecan, about 7% with Grade 3 to 4 anemia compared to 40% with topotecan and just under 5% Grade 3 to 4 thrombocytopenia with lurbinectedin compared to 29% in topotecan, again, from the package insert. Moving to Slide 21. These are the results of lurbinectedin when combined with doxorubicin, which also showed very strong efficacy results. There were 27 patients overall, and the response rate was 37% in the overall group and higher 48% in the 21 patients who had a chemotherapy-free interval of at least 90 days. Importantly, there is a very high proportion of patients who had the best response of stable disease or better, about 3/4 of the patients overall, and it was on this basis that the ATLANTIS trial was designed and initiated. Moving to Slide 22. Here we show the ATLANTIS design, and this is a randomized Phase III trial of lurbinectedin plus doxorubicin versus either topotecan or so-called CAV, cyclophosphamide, adriamycin and vincristine. And these were in small cell lung cancer patients who had progressed after one line of platinum-based chemotherapy. It's important to note that patients continued on lurbinectedin after completing doxorubicin at the higher monotherapy dose of lurbinectedin, which is 3.2 milligrams per meter squared given once every 3 weeks. Moving to Slide 23, I'd like to conclude with the development and regulatory summary. Regarding the Phase II basket trial, the NDA was submitted in December 2019 for accelerated approval, and priority review was requested. The FDA submission acceptance decision is expected in February of 2020 for a potential approval and launch in 2020. Regarding the ATLANTIS trial, 5 safety analyses have been successfully completed by an IDMC, and the target enrollment was reached in July of 2018 with 613 patients recruited in over 150 centers in 20 countries, with the EU and North America contributing approximately 90% of the patients. The top line data are anticipated in mid-2020. Thank you for your attention, and I'll now turn it over to Mike Miller.

Thanks very much, Rob. We're very, very excited about this opportunity. We have kicked off a number of work streams. We are evaluating the optimization of our current sales force structure and efforts within our oncology portfolio, and we're doing that by using subnational tumor data. These patients -- these small cell lung cancer patients are really managed by thoracic oncologists in teaching institution predominantly and then across -- widely across the community by medical oncologists. So we will ensure that our sales force is built to reach deeply into both the academic and community centers. Many of these community centers are the same accounts that we had recently expanded for Vyxeos on that community opportunity. Lurbinectedin is expected to be an outpatient infusion. That's 1 cycle, 1 hour infusion every 3 weeks. And this is very much the direction that oncology is moving today in terms of having the patient stay at home, which is great. Physicians report that lurbinectedin is very easy to administer. As Rob touched on, it's extremely well tolerated. And we see this as an outpatient infusion, which will help duration on drug. As a reminder, Dan touched on topotecan. Topotecan, that administration is in IV, days 1 through 5 of a 21-day cycle. And these courses of treatment are often reduced due to tolerability and dosing convenience. We also plan to scale up our reimbursement and MSL teams. Just as a reminder, small cell lung cancer patients are over the age of 65, about 90% of them are in the Medicare payer mix. And we look forward -- very much forward to increasing the awareness of this advancing in the second-line small cell lung cancer treatment. We expect the PDUFA in Q3 '20. And assuming the filing in February and expected potential launch in second half of '20, and we'll be ready to do so. And now I'll hand the call back to Kathee.

Thank you, Mike. Crystal, we would now like to open the call for questions.

[Operator Instructions] And our first question comes from Brandon Folkes from Cantor Fitzgerald.

Congratulations on the deal. Firstly, so you did present some Phase Ib data on this, but can you help us think about the neutropenia rates you are expecting to see in this ATLANTIS Phase III trial with the combination with doxorubicin? And secondly, can you also just help us break out the second-line patient numbers, which received treatment but relapsed within 6 months basis, more than 6 months?

Bruce, why don't I start with the first one? So as you noted from the Phase Ib data, neutropenia is the most common toxicity when combined with doxorubicin. However, it's very manageable. This is a toxicity that oncologists routinely seem to manage. And I think there is -- while we haven't seen data from the ATLANTIS trial, the fact that it's been through a series of IDMC reviews for safety, I think 5 in total, suggests that the combination has been well tolerated. I just want to comment a bit on why that approach might be taken versus just a monotherapy head-to-head comparison. If you look at the preliminary data combined with doxorubicin, yes, the objective response rates are strong. But also when you look at the stable disease component, the overall proportion of patients who are having stable disease or better, as I mentioned, is very, very high. So it makes a lot of sense to start the trial that way. And then lurbinectedin being so well tolerated as monotherapy, once patients have reached their max with doxorubicin, they can go on to lurbinectedin monotherapy through progression. And so it's a rational design given the main toxicities that are -- are those that are routinely manageable by oncologists. And then on the second question, I think you may be just referring to the frontline setting. Is that right?

Yes. So I'm just trying to drill down into the number of patients that lurbinectedin will actually target versus going back on to first-line treatment.

Yes. I mean, I think without necessarily speaking to highly specific numbers in practice, my sense is it's only those patients who have a pretty exceptional response to platinum upfront who will get platinum again versus a good second-line therapy. So while that's kind of arbitrarily discussed as 6 months chemotherapy-free interval, if there's a good, effective, safe and tolerated therapy like lurbinectedin, I'm pretty confident docs will want to go to that second line rather than to retry platinum.

And Rob, it's regardless, they don't want to rechallenge with I-O.

With I-O, yes, once the patients progressed on I-O, they're not likely to get rechallenged with another I-O, even if it's a PD-1 versus a PD-L1 that tends not to be the practice.

Our next question comes from Ami Fadia from SVB Leerink.

And congrats on the deal. Maybe a question for Rob just with regards to the current treatment paradigm in second line. Are pretty much all patients treated with topotecan? And given the relative profile of this drug, how do you see the treatment landscape evolving with that? And then separately just on the ATLANTIS trial, it completed enrollment middle of 2018. I'm a little surprised that we don't have data yet. Can you give us some color there?

Yes. So maybe just -- that's a simpler question. So it's an events driven trial. And so our best prediction coming from our partners is that we're looking at mid-2020. Obviously, it's events driven depending on how they come in. That could be adjusted accordingly. So it is the survival end point. To your first point, let me just start a little bit more broadly than your question, which is, as Dan alluded to, the treatment paradigm of platinum doublet for small cell lung cancer hasn't changed in many, many, many years until the introduction of immunotherapy. And there's been several trials, but atezolizumab is now approved. And with the survival advantage, it's very clear that the PD-1 or the PD-L1 s will be used upfront in combination with chemotherapy. And that's supported by a broader trend showing that immunotherapy, such as PD-1 or PD-L1 inhibitors combine well with chemotherapy or radiation therapy. And so docs are not likely to hold this therapy for later line. So we really think that in this context, patients will be getting platinum doublet plus 1 of the PDL-1 inhibitors, currently atezolizumab. And Dan alluded to the ADRIATIC trial, which is with Imfinzi from AstraZeneca in the limited stage disease where there's a fair amount of optimism that, given the results in hand for extensive stage, that PD-L1 inhibitors mainstay upfront therapy, even for limited disease. And then what that means is chemotherapy -- second-line chemotherapies will be used. There are other options besides topotecan, and that's why the ATLANTIS trial was designed to allow a choice. But our research shows that topotecan is most commonly used. And the data with topotecan based on the von Pawel trial are pretty clear. And there are some key disadvantages that I think Dan and Mike alluded to, which is it's more challenging to give, it is once every 3 weeks, but it's 5 infusions. It certainly looks to be more myelosuppressive. And the overall response rate from the von Pawel paper in that just below 17% range. And so we think lurbinectedin really stands up pretty well to that, and it's likely to be a better choice in second line. And so there's really nothing else that I see on the horizon that looks as good as that.

Got it. Maybe if I could ask a question, Bruce. With this transaction, what are your priorities for the remainder of 2020? Are there additional assets that you hope to bring into the portfolio? And where would those priorities be in terms of the therapeutic area or the geographic focus?

Yes, Ami. We had a busy 2019 with a number of transactions from early-stage deals through Phase II asset with Cavion, to at the very end of the year, bringing in a near-term commercial launch. So 2019 was a productive year for us. We expect the same in 2020. Always hard to predict exactly which transactions will come to fruition, but we remain focused on assets, both in sleep and neuroscience as well as in hem/onc and precision oncology. We continue to look for assets that are on market or near market all the way back to preclinical. This is an unusual transaction for us in that it was U.S. only. That's what PharmaMar was willing to offer. In general, we're looking for global assets, and I think you'll see that in most of our transactions. But we remain in a strong position, both in terms of our financial condition. As of the last quarter, we reported we had over $1 billion in cash and investments and an available $1.6 billion undrawn revolver. Our cash flow is strong. We're relatively unlevered. And then from an operating perspective, it's going to be a busy year for us. We are launching or preparing to launch multiple assets across sleep and hem/onc, but we've got a great team that's eager to continue to develop and launch other assets. So we're not going to take our foot off the gas. We've got capacity from a financial and an operating capability to do more transactions.

Our next question comes from Jason Gerberry from Bank of America.

This is Ash Verma on for Jason. And congrats on the deal. So my question is, what's your operating assumption around the ATLANTIS trial? Does maintaining the conditional approval hinge on the outcome of this trial? And then the second one is just, will you wait for the PDUFA in August or September time frame before building out a sales force for this asset?

Bruce, I can take the first part of it. So certainly, a trend in favor of lurbinectedin in the ATLANTIS trial would be supportive of converting an accelerated approval to a full approval. We don't necessarily think that it absolutely requires that thing. Obviously, the trial design is a bit different than monotherapy. So overall, it needs to support it. And at the end of the day, the risk-benefit, both from the monotherapy single-arm data as well as the data from the ATLANTIS trial will be considered by the FDA. So we know it has the potential to convert to a full approval. But ultimately, it will depend on the data.

Yes. So on the sales force side, as I said, we're kicking off a number of work streams. And one of those is the sales force, as we've said, and we do want to be ready. We think this is a significant advance in second-line small cell lung cancer. And if we're ready at time of approval, we can help more patients.

Our next question comes from Jessica Fye from JPMorgan.

Question on the competitive landscape in development stage assets in small cell. Did you diligence Unituxin competitively? And if that is approved, too, how do you think physicians will select what treatment to use?

I -- yes. Dan, you want to start?

No. I was just going to say, I mean, we do, do a very extensive market analysis around each of these deals. And there's been a lot of clinical trials in this setting, primarily in the third line setting often rather than the second line. And for a variety of reasons, many -- there's been many failures. So we feel very good about the profile we've got for this program and where it can get established into the treatment paradigm. We're going to be thinking very much about the molecule strategy in terms of where else can we take it, what other new agents are emerging, are there additional combinations, are there ways for us to think about moving into parts of first-line patients. So it's going to be a very dynamic landscape, we think. That being said, in second line, there's going to be a real opportunity for us to establish ourselves as standard of care.

Okay. Great. And really, the approval is still, what, 6 or 8 months away, but what other drugs would represent appropriate price comps for products like lurbi?

Yes. I mean, we're too far from giving a real price point. But what was interesting is how quickly the I-Os were taken up into the first line and paid for with the clinical data that was being presented, and that's anywhere from $120,000 to $150,000 for a course of therapy or even going higher. So we'll be thinking about that more. We're going to be doing more pricing research. But definitely kind of another agent for this type of patient population with significant unmet need, we think, can command a reasonable price that we can get a good return on.

Okay. Got it. And maybe just a last one just following up on the prior question. Did you say you think that if ATLANTIS fails, but shows a favorable trend, that, that would be sufficient for the FDA to grant full approval?

It could be. And it again depends on the overall risk-benefit of all the combined data. Certainly, there have been examples where a trial that is not exactly a Phase III equivalent. In other words, this is a slightly different trial design, can provide supportive data. But if it's a strong trend and doesn't have stat sig, that doesn't necessarily mean that it couldn't be used to confirm the approval.

Our next question comes from Annabel Samimy from Stifel.

This is Avatar Jones on for Annabel. We have 2 quick questions. One is on the timing of the ATLANTIS Phase III combo trial readout and just if you could elaborate a little more on whether there are any implications on the approval of the monotherapy from that combo trial. And secondly, on the market opportunity, PharmaMar dropped their 2L treatment rate to 60% from 75% previously. Can you provide any insight on that logic and how we should look at estimates on the second line space?

So for the first part, maybe I'll just reiterate some of the comments I made during the presentation and answers to the other questions, which is the ATLANTIS trial is considered to be the confirmatory trial for the accelerated approval submission of lurbinectedin from the basket trial, the monotherapy, single line. So a positive result in the ATLANTIS trial will certainly be confirmatory and allow conversion from accelerated regulatory approval. If the question is does it absolutely have to hit stat sig, the answer is not necessarily as long as it's a strong trend and is overall supportive of what was observed in the single-arm trial. Sorry. And the second part of the question was 60%, can you just repeat that for me?

Yes. So on a recent call from PharmaMar, they dropped their second-line treatment rates to 60%. They previously stated that it was around 75%. So just trying to get an understanding of the logic around those estimation.

Yes. No, that's actually pretty consistent with the numbers that we have and the numbers I showed in the slide, which showed we're dropping from 30,000 in front line down to 17,000 in second line. Most of those patients that are in first line are all relapsing. Not all of them are then opting in for more therapy, so that number may shift up. And it would be great with the new therapy and more education that we get to a 75%. But 60% is what our current forecast is based on.

Our next question comes from Esther Rajavelu from Oppenheimer.

On ATLANTIS, if it doesn't hit stat sig, what is your expectation for reimbursement and market acceptance, even if the approval is not pulled back?

I think it's a similar example, whether it's from the -- similar answer, whether it's from the view of regulators or treating physicians, et cetera. It really depends on the data. And if it's a strong trend that overall supports the activity, I think it could still be very favorable. Might there be a need to do additional work to clarify in a randomized setting, we've considered that as we -- as the data emerge.

Sorry. This is Mike. I would just add that the payer is very much driven by the NCCN guidelines. So in the end, I agree with Rob. It will be data driven.

Okay. And in terms of -- you've talked about sort of potentially exploring other combos and looks like there might be some R&D spend that's associated with this product as well. How -- are these going to be sort of global label expansion potentials? Or are you -- from a spend standpoint, are you R&D? Are you only responsible for the U.S.? How is the partnership structured on expanding use?

Yes. So we're going to have a joint development. We're going to be working very closely with PharmaMar. They've done prior work in other tumor types. We'll be very interested near term to be focused on the small cell lung cancer opportunity, both the basket trial and getting that incorporated into the treatment regimen, but then also with the ATLANTIS readout, what we learned from that and what that -- the implications are for potential combinations. There's other work I know that PharmaMar investigators are doing, and we're going to work closely with them to think about an extensive, both company sponsored-type work, whether it's cooperatives, ISTs, I mean, very similar to what we've done with some of our other hematology/oncology programs, but now in the solid tumor space and really follow the signals where they take us. And some of them may be label expansion, some of them may be guideline expansion, some of them may just be publication and awareness of the agent. But we're excited to take this novel therapy and leverage all of the experience and data sets that PharmaMar already has.

Our next question comes from Umer Raffat from Evercore.

So I've been very confused about it. I just want to ask it sort of out loud as I'm thinking out loud, so hear me out. Best I can tell, and correct me if I'm wrong, the chemo-free interval was not prospectively identified. It was the post-hoc finding. So in that context, here's what's been confusing me. When I look at the CTFI over 90 days, they only had 5% prior I-O, and they had a high ORR. Then when I look at CTFI below 90 days, it had a 17% prior I-O, meaning much higher prior I-O usage and the ORR went down. If you follow that logic, that would imply that in Phase III ATLANTIS, the prior I-O use should be meaningfully higher than 17%. So wouldn't that suggest ORR should be even lower in Phase III? I just wanted to talk this out and that would be really helpful. And then secondly, has there been any interim analysis on ATLANTIS? And what have we learned so far? I asked because I got to believe FDA will like to review that interim analysis information.

Yes. Maybe I'll start with the second one. It's just a little more straightforward. The ATLANTIS trial didn't have utility or efficacy interim. There really just safety interim analysis. And those were conducted, and there was no change to the ongoing trial. Regarding the first comment, to me, I think it's just really, really small numbers to try to parse out. So few patients have it, there was only 8 overall having gotten the prior PD-L1 therapy. If you try to parse that out with what's known to be the most significant prognostic factor sensitivity to platinum, it becomes really hard to parse out the interaction of PD-L1 in both of those groups. I think what you could do, though, is to look at sort of the broader literature and experience, which is that the use of PD-L1 or PD-1 inhibitors has not created challenges in subsequent therapies. And there's even some, I think, not fully answered question in the field, whether it actually improved second line responses to subsequent chemotherapies. And it's part of the reason we're interested in this particular mechanism where we think there could be favorable effects on the tumor microenvironment -- the tumor immune microenvironment based on the mechanism, in addition to the growing body of literature around combination with highly active cytotoxic chemotherapy drugs. We actually think following a PD-L1 inhibitor or potentially, at some point, combining with the PD-L1 inhibitor could be a good strategy for this drug.

So I guess, said another way, if we look specifically at -- so the responses -- there were 7 responses and -- there were 7 responders in low chemotherapy-free interval. And there were 27 responders in high chemotherapy-free interval. If we were to focus specifically on the CTFI 30 to 90 days, which is 24 patients, 4 patients had prior I-O, but 7 patients responded. Do those patients overlap -- all the prior I-O are the ones that responded? Is that accurate or no, overlap between I-O and responses, if I may?

I don't have the answer to that, specifically of those 4 that were there. We certainly could look at that. But again, I think the bigger issue is that it's a very small sample set overall. You've got 8 patients. And just looking at those 8 patients with 5 responders overall and our understanding around how chemo and immunotherapies interact, I have no concern about whether patients will continue to respond to lurbi after having progressed on PD-L1. And I think trying to parse the data across even smaller subgroups could be misleading.

Our next question comes from Gregg Gilbert from SunTrust.

Maybe for Dan or Bruce, you mentioned that this is somewhat uncommon and that's a U.S. only deal. Can you talk about the opportunity to expand the relationship longer term? And maybe if you could talk about how competitive the process was and how long you've been tracking the asset, et cetera. And then for Mike, it sounds like you have some decisions still to be made about sales force size and structure, but what are those key decisions that you're considering? And how can we be confident that you can launch this asset and not have any sort of deleterious effects on the momentum you're trying to build?

Yes. So on the first part of your question, I think we'll leave it to PharmaMar to decide what to disclose about the process. We think we've had a great relationship with them through the process of diligence and negotiations. We're looking forward to expanding on that relationship as we work together to bring this product to patients. But I think we were well positioned as a company that could make this a priority asset, execute near-term launch and really maximize the opportunity. In terms of opportunity to expand the relationship, we're always interested once we partner with a company in potential opportunities to expand the relationship. But in terms of what PharmaMar was seeking in this transaction, they wanted somebody to be a good commercialized -- commercialization partner in the U.S. near term, and that's the deal we signed. Mike, do you want to talk a little bit about how this fits into our overall efforts?

Yes. Sure, Bruce. As we've said, we are right now looking at the size and structure needed to very much make this launch a success. I think the one point that I'd make is that in the community, if you walk into an account, you actually turn left to go see the hem/onc regarding Erwinaze and Vyxeos and turn right to see the med/onc regarding small cell lung cancer. So they are 2 different distinct physician types. While they may be in the same account, they are different. So you don't have the distraction factor where you can bring in 2 different products to the same doctor and 1 can get a diminished noise level. So I'm very confident that we can do this in an effective fashion. I think also the community treatment of lung fits very nicely with our GPO strategy and our reimbursement setup. And as I said, it's very much in the direction that oncology is moving anyway in terms of the -- being treated at home and not having to go into the hospital.

And so -- Gregg, go ahead.

Sorry, real quick one, I think, is a quick answer, but have -- either you or your partner commented revenue potential in the U.S. specifically or generally.

I don't think PharmaMar has commented. But in terms of how we look at it, it is a multi-hundred million dollar opportunity just with the initial indication and with the initial data. And we're looking to flesh that out further and how can we maximize it, both in terms of peak, but also in terms of rate to get into peak.

And operator, this will be our last question.

And we'll take our final question from Gary Nachman from BMO Capital Markets.

And my congrats as well. Just following up on some previous questions. Regarding additional datasets down the road that could be helpful commercially, I'm curious how quickly you could get to those and how robust that program will be just thinking of what your learnings are from Vyxeos as you try to take this product to market.

Yes. So as I alluded to, I -- we're just now beginning to partner with PharmaMar on what we think the next-step clinical trials would be. But I think there's a lot of opportunity. The treatment landscape is evolving pretty clearly. And as Dan alluded to, PD-1s and PD-L1s are going to be used upfront, whether it be extensive or [ multiple ] stage. And there may be opportunities for a highly active drug like lurbinectedin to get into those spaces in combination. So that's clearly going to be part of what we're interested in. We will also be interested in other tumor types where this may be active. And as you know, there's an ongoing basket trial where some of those have been evaluated, and we're certainly going to follow up on those as well.

Yes, I'll just add that the organization has been maturing quite a bit over the last several years. And the extent and capabilities of our medical affairs team, our development team, our molecule strategy team, we see that as a work stream that we immediately put behind this molecule. So near-term focus, of course, on getting regulatory approval with the best label, near-term focus on having launch planning and strategy and being able to get the product available to patients as soon as we can. But the third component is maximizing the value of the asset and doing that in a variety of ways, both combination with PharmaMar, company sponsored, investigator, cooperative, preclinical evaluations in terms of getting signals for where combinations could work and looking across tumor types. And the good news is we've got a partner who knows the drug really well and has a fair amount of clinical data to date that we can leverage.

Okay. And just one quick follow-up. Any other agents out there on the competitive landscape that we should be aware of going after the same second line indication for small cell, new agents?

None that I'm aware of that have the same level of strong efficacy data or are as advanced. And I think that's inclusive of inotuzumab.

I mean, clearly, in an area of -- I was just going to add. Just clearly in an area of unmet need, especially at the academic centers, there's always interest in doing investigator work and investigator agents. So we're going to be tracking very closely how that landscape evolves. But the treatment profile or the profile of lurbinectedin is very attractive for second-line patients in terms of the added efficacy relative to other standards and the infusion convenience as well as the safety.

And that does conclude our question-and-answer session for today's conference. I'd now like to turn the conference back over to Kathee Littrell for any closing remarks.

Thank you, Crystal, and thanks to all of you for joining the call this morning. And this will now end our call.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a wonderful day.