Medexus Pharmaceuticals Inc. (MDP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Medexus Pharmaceuticals Business Update Conference call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Tina Byers. Ma'am, the floor is yours.

Thank you, and good morning, everyone. Welcome to the Medexus Pharmaceuticals conference call to discuss yesterday's announcement that Medexus has secured an exclusive license from Medac Pharma to commercialize Treosulfan in the United States. On the call this morning are Ken d'Entremont, Chief Executive Officer; Michael Adelman, General Manager of U.S. Operations; and Roland Boivin, Chief Financial Officer. We are also fortunate enough to be joined by Professor Joachim Deeg, a physician at the Seattle Cancer Care Alliance, a professor of Medical Oncology at the University of Washington School of Medicine and a professor of Clinical Research at the Fred Hutchinson Cancer Research Center; as well was Dr. Joachim Baumgart Clinical Scientific Program Lead and working in the Department of Clinical and Nonclinical Development at Medac GmbH. If you have any questions after the conference call or would like to -- further information about the company, please contact Adelaide Capital at (905) 330-3275. I would like to remind everyone that the discussion during this call will include forward-looking information that is based on certain assumptions and is subject to the risks and uncertainties that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Forward-looking information provided in this call speaks only as of the date of this call and is based on the plans, beliefs, estimates, projections, expectations, opinions and assumptions of management as of this date. There can be no assurance that forward-looking information will prove to be accurate, and you should not place undue reliance on forward-looking information. Material risk factors relating to forward-looking information include those set out in the company's materials filed with the Canadian securities regulatory authorities from time to time, including the company's most recent annual information form, management discussion and analysis. Medexus disclaims any obligation to update any forward-looking information or to explain any material difference between subsequent actual events and such forward-looking information, except as required by applicable law. I will now turn the call over to Ken d'Entremont to discuss the terms of the transaction and implications for the company.

Thank you, Tina. Good morning, everyone, and thank you for joining our call today. We are extremely grateful to have Professor Deeg on our call, who has done an exceptional amount of clinical work on treosulfan as well as Dr. Joachim Baumgart from Medac GmbH, who is long being part of Medac's clinical development program for treosulfan. To that end, we were pleased to announce yesterday afternoon that we have entered into a licensing deal for treosulfan with Medac for the United States. The FDA is currently reviewing the new drug application for treosulfan for use as part of a conditioning regimen for patients undergoing allogeneic stem cell transplantation for AML and MDS. Treosulfan also has orphan drug designation as an element of a conditioning regimen conducted as part of allo-HSCT in adult and pediatric patients with malignant and nonmalignant disease. There is a critical need for better agents to improve survival outcomes while also reducing the toxicity profile of available conditioning regimens. This transaction presents a significant near-term opportunity for the company with a PDUFA date scheduled for August of 2021 and plans to launch shortly thereafter. To give context of the size of the opportunity, a market-leading agent used in current conditioning regimen is busulfan, which reached peak sales of USD 126 million in 2016 prior to genericization. We feel that we may be able to ultimately exceed that sales number with treosulfan, as busulfan was not approved for AML or MDS but has been able to generate significant revenue through off-label use in those patient populations. With promising survival data and a good toxicity profile documented in more than 100 publications, we believe that treosulfan could become the standard of care for allo-HSCT in the United States. And since we expect treosulfan to receive orphan drug status, if and when approved, we expect 7 years of market exclusivity for these indications. This will clearly be advantageous, as we head into commercialization. Most importantly, this product has the potential to considerably improve patients' lives and survival of these rare diseases. Treosulfan bridges the gap between myeloablative conditioning therapy where positive outcomes from aggressive chemotherapy and radiotherapy regimens are limited by toxicity levels that lead to transplant-related mortality in many patients and reduced intensity conditioning where better survival outcomes are sacrificed for lower toxicity. We believe -- we are excited to bring this product to market and provide patients with a less toxic alternative without compromising the survival outcomes of treatment. I will now turn the call over to Professor Deeg to discuss some of his clinical findings as it pertains to treosulfan.

Yes. Hello, thank you, again, for this introduction. As you indicated, we have conducted considerable work, clinical research, in particular, at our center here in Seattle, and we are truly excited about the work -- results of the work that we have done with treosulfan. And I know that many investigators who have not had an opportunity to work with it are waiting for this drug to become available. There is, as most of you who are informed in the field, a large randomized prospective study that has been conducted in Europe by Beelen et al and has been reported not too long ago. And the exciting part in that study was the following. The study used treosulfan and fludarabine combination in comparison to busulfan and fludarabine. And as the study design went, we could -- well, [indiscernible] Dr. Beelen could show clearly a non-inferiority of the treosulfan-based conditioning. In fact, results only some of them have been reported, we are superior with treosulfan. And the observation that it is as effective or more effective in eradicating the disease but has less clinical toxicity makes it a tremendously attractive drug. At our center, we have carried out many of these transplants in patients up to 70 years of age in the clinic, in other words, without admitting patients to the hospital, which is certainly a great benefit. It's also, of course, from health resource utilization point of view, interesting to approach the transplant this way. So the results that we have from the randomized study in Europe shows an advantage in survival with treosulfan conditioned patients comparable, otherwise, of about at least 10% to 15%. But as I cannot emphasize sufficiently the one very important aspect is not just the numerical improvement but the clinical benefit in achieving such results without having significant clinical toxicity. So in our own studies in malignant AML, MDS and in nonmalignant disorders, we have seen very remarkable outcome. Our pediatricians in particularly are very much into this drug because there's also advantage maybe in regards to growth and development of children. So it is really a very valuable addition to our armamentarium. And as I said, lots of other centers are waiting to have this drug available for use. So this is definitely a big step forward that we have made over the last few years.

Thank you, Professor, Deeg for sharing your clinical experience. I'm now going to turn the call over to Michael Adelman, who is the General Manager of our U.S. operation.