Novartis AG (NOVN) Earnings Call Transcript & Summary

Good morning and good afternoon, and welcome to the Novartis Oncology Update. [Operator Instructions] And the conference is being recorded. [Operator Instructions] A recording of the conference call, including the Q&A session, will be available on our website shortly after the call ends. [Operator Instructions] With that, I would like to hand over to Mr. Samir Shah, Head of Investor Relations. Please go ahead, sir.

Thank you and good morning and good afternoon, everybody. Thank you so much for taking the time to join us today. We appreciate it's a really busy time especially today with the various investor-related calls. It's my pleasure to have with us today, as we go through the key highlights from ASCO, Susanne Schaffert, who's the President of Novartis Oncology; Alice Shaw, Global Head of Translational Clinical Oncology at the Novartis Institute of Biomedical Research; Sidonie Daffner, who's the President of Radioligand Therapies; and Jeff Legos, the Global Head of Oncology Development within Novartis. Before we start, I just wanted to go through the safe harbor statement. The information presented today contains forward-looking statements that involve known and unknown risks, uncertainties and other factors. These may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. For a description of some of these factors, please refer to the company's Form 20-F and its most recent quarterly results on Form 6-K that respectively were filed with and furnished to the U.S. Securities and Exchange Commission. And with that, I'll hand across to Susanne.

Thank you, Samir. And also from my side, welcome to this Novartis Oncology Update. So moving to Slide 6. Novartis is a leading company in the market. And over the past 5 years, we have made significant progress, bringing 6 novel first-in-class therapies to patient. And that together with 7 in-market blockbusters have led o continuous growth for the business. We have sales of almost $15 billion last year and served 1.2 million patients with our medicines globally. For Novartis Oncology, 2021 is a truly breakthrough year in terms of delivering transformative innovation. We are planning to submit 3 first-in-class treatments for registration this year and also expecting 2 major readouts later in the year with canakinumab and Sabatolimab. We have also a promising pipeline across our platforms, and you will hear more about it over the course of this call. So moving to Slide 8. On Slide 8, you can see what makes our portfolio -- sorry, one back, sorry, it's Slide 7. You can see what makes our portfolio really unique. We are the only company that is present in all 4 therapeutic platforms to treat cancer. We are present in targeted therapies in Radioligand Therapy, in Cell & Gene Therapy and in Immunotherapy. And I believe that our portfolio gives us the unique opportunity to approach cancer, this different therapeutic approaches as well as combine all these platforms for better treatment outcomes. So moving to the next slide. This year's ASCO is very meaningful to us. We have presented more than 70 abstract, this new data across all 4 therapeutic platforms and within that, 9 oral presentations. So moving to the next slide, let me go through each platform and share the highlights that we presented at ASCO. So let me start with targeted therapies. At ASCO, we have presented the new data on Kisqali, our CDK4/6 inhibitor, that is used to treat advanced breast cancer. We have the updated MONALEESA-3 data, confirming that Kisqali continues to show prolonged and consistent oral survival benefit with the median of 4.5 years. Kisqali demonstrated the longest overall survival in post-menopausal patients compared to other CDK4/6 inhibitor. And is the only CDK4/6 with data in first-line with full strength. I believe this data further strengthened Kisqali's differentiated profile and build on Kisqali's unprecedented overall survival benefit. In addition, we are going into earlier lines of breast cancer with our NATALEE study that is exploring Kisqali in the adjuvant setting in both intermediate and high-risk populations. And these populations represent around 70% of the adjuvant early breast cancer patient population and there's a clear unmet medical need. So we are also excited about asciminib, a first-in-class STAMP inhibitor in third-line CML that we plan to submit in the U.S. and in EU in the first half of '21. And we're also planning to start a trial in first line later this year. And looking ahead, we have a pipeline of combination-ready molecules like our SHP2 inhibitor, a B/C RAF inhibitor and a KRAS G12C, that we believe can be very competitive from both a combination strategy and also from timeline prospective. So moving to the next slide on our differentiated immunotherapies platform. At ASCO, we presented data from RATIONALE-302, which evaluated tislelizumab in second-line esophagus squamous cell carcinoma. As we know, a difficult to treat cancer. And efficacy and safety of tislelizumab has been comparable to already marketed PD-1 inhibitors in monotherapy in second line. These data will be used as the basis for FDA and EMA registration later this year. We aim to establish tislelizumab in key indications for PD-1s at currently market but also pursue novel combinations with our portfolio. Our strategy in immuno-oncology is also focused on advancing development of canakinumab in non-small cell lung cancer. And also Sabatolimab, which could be the first immuno-oncology therapy for MDS. And we are expecting readouts of these 2 assets later this year. Moving to the next slide. Our cell and gene therapeutic platforms. As pioneers of cell and gene therapies, we have made strong progress in manufacturing, supply and commercialization of this transformative one time treatment globally. In partnership with now more than 320 qualified centers across 28 countries, we have shipped more than 5,000 doses of Kymriah to patients globally. We have the largest global CAR-T manufacturing footprint, are exploring new targets and are also advancing our next-generation technology platform. At ASCO, we presented the data from Elara's primary analysis of Kymriah in patients with relapsed or refractory follicular lymphoma. That demonstrated consistent results with the interim analysis that you remember we presented at S 2020. These outcomes are particularly impressive, given that Elara included high-risk patients who were heavily pretreated and relapsed early. We got our contract designation from FDA and are planning to file for this indication later this year. And moving to the next slide, last but not least, our Radioligand Therapy platform. Since the acquisition of AAA in 2018, we have put a strong global expertise in commercializing radioligand therapies as the only big pharmaceutical company. With Lutathera in neuroendocrine tumors, we are working together with 400 centers treating more than 9,000 patients since launch. And at ASCO, we have shared the data from NETTER-1, which is the final analysis that have shown that Lutathera significantly reduced the risk of progression of this by 82% and demonstrated a clinically meaningful trend towards prolongation of OS by almost 12 months. These data support Lutathera's position as a valuable precision medicine option for advanced neuroendocrine tumors. And on the broader radioligand development side, we are advancing 4 clinical programs and around 11 preclinical and discovery programs to identify the next wave of radioligand therapies. So we are very excited to share how we are building our leadership on radioligand therapies. And I think there's nobody better to cover this than Sidonie. So Sidonie, over to you.

Thank you so much, I'm Sidonie. [Audio Gap] It's an eye opening. You treat what you see. It's a new level of visualization for physicians. On the slide you see on the left hand side, with the same target here PSMA, you can perform precision imaging via PET scan to visualize tumors, offer additional insights on disease burden, diagnose or provide benchmarks for outcome. And on the right-hand side, you can treat with the same target and an radioactive payload here with lutetium-177. The radiation is directly and specifically delivered to tumor cells only. This is precision medicine at its best. We go to Slide 15. We are the pioneers in this space with a significant lead in the 3 key areas. First, our manufacturing capabilities; second, our commercial expertise; and third, our R&D approach. These 3 pillars are the key fundamentals of our RLT platform. On Slide 16, I show that we have established a high quality and on-demand manufacturing footprint with the ability to deliver RLT in 2 weeks after order is received. So we have broken down for you these complex processes in single steps to showcase this very efficient model that is vertically integrated from raw material to patient administration. So time is of great essence given the short shelf life of the product, and our efficiency of this model was clearly shown during the pandemic where we didn't miss a single dose and became very proud of this team. And as we look ahead, most importantly, for our future launches, we continue to invest by building a new site in Indianapolis while expanding our existing sites. On the Slide 17, I come to the second VISION piece. We are the only player in RLT with a globally commercialized product. And we learned a lot and gained a lot of momentum with Lutathera. In partnership with more than 400 centers, we were able to treat more than 9,000 patients since launch. So based on these key learnings, we structured our customer-facing teams in a demand and the delivery team, with deep expertise in nuclear medicine and oncology, respectively. We are not stopping here and working hard to strengthen this new commercial model ahead of our future launches. We leverage our extended footprint to drive proper referrals from community centers that 2/3 of our patients sit today to RLT centers. On Slide 18, you see that we are facing a kind of complex patient journey and approach in mCRPC. And launching PSMA will require a multidisciplinary approach. The primary decision makers in prostate cancer are by disease state. You have the urologist, you have the med onc, the rad onc, the nuclear medicine physician. So therefore, doubling down in medical education is key across all the decision makers to educate the value of RLT, and the requirements for adoption in their routine practice. On Slide 19 you can see that this approach will be supported by the expansion of our disease awareness campaign on PSMA and phenotypic precision medicine, across all physician groups. It's important to note that stratifying patients for a specific targeted therapy is a well-supported treatment approach by medical oncologists. So PSMA is over expressed in more than 80% of men with prostate cancer and can be detected via noninvasive PET scanning. The FDA has approved recently 2 PSMA imaging agents. On Slide 20, you can see our long-term approach because we know and anticipating earlier lines of launches, we have to work together with our customers to increase capacity and extend our RLT infrastructure. Short term, we will be able to launch PSMA in existing sites by encouraging increased infusion hours, increased infusion days and increased infusion shares, leveraging the best practice from our highly productive centers. Long term, we double -- we aim to double the contracted RLT sites ahead of our pre-taxane launch. And we will target community practices that currently have optimized alpha hot labs to expand to better, leveraging the existing infrastructure and account expertise, which will be also a quick win. To execute this approach, we need a strong cross-functional team, commercial, medical, value and access and also our development teams to execute on this strategy. Our customer are already excited to embark into this journey, together with us, which the quotes on the right-hand side of this slide show. If we go to Slide 21. We are the pioneers, and we strongly intend to maintain our leadership position, expanding our pipeline. We will continue to invest into new technologies and assets. And we have shown this in the most recent months. We have in-licensed a library of FAP-targeting agents. We invest into active oncology for the development of alpha-based RLTs. We are collaborating with Artios to discover novel combinations of DNA damage response inhibitors. So we are leveraging the RLT-specific R&D advantages that exist and our expertise in-house, and we are well-positioned to accelerate our path to market. On Slide 22, you can also see that we are growing our RLT pipeline. And this has great potential also to address a range of other solid tumors. So besides the life cycle management for PSMA in the first part of this slide, we are investigating our targets in different stages of development. And we have shown that we have the expertise to run these programs in RLT, and we are super confident that we maintain our leadership in the development area as well. So to summarize, we have generated a unique skill set and experience in manufacturing commercial and R&D, and built a sustainable platform. New entrants to the field will need to establish access to raw materials and end-to-end manufacturing process and capabilities. Propriety insights regarding isotope and stable RLT formulations are key. So we will leverage our global commercial footprint with expertise in nuclear medicine and oncology and PSMA-617 patent-protected until 2034. [Audio Gap] I hand over to my colleague, Jeff, to talk about the exciting VISION data.

Thank you, Sidonie. And we were very excited to present the potentially practice-changing VISION Phase III clinical trial data this past Sunday during the plenary session of ASCO. I'd like to spend the next few minutes just providing some additional context around the clinical relevance of these results and spend some time sort of highlighting the key results coming out of that Phase III clinical trial. So in terms of the disease. So prostate cancer is one of the most commonly diagnosed cancers, and in particular, the second most commonly diagnosed cancer in males. The main goal of treatment in earlier lines of -- earlier stages of disease is to reduce testosterone levels, and that can be accomplished through surgical castration or biochemical castration. At the time that these patients stop responding to castration-related therapies, approximately 80% or more of these patients have seen their disease metastasize to other parts of the body beyond the lymph nodes and/or initial prostate cancer cells. So although there are treatments available for patients such as androgen access inhibitors and/or taxane-based therapies, we do acknowledge and recognize that there is still a high unmet medical need and opportunities to do better. And approximately, only 30% of patients who become castrate-resistant are actually surviving for 5 years. At the time that patients have exhausted these therapies, such as taxane-based chemotherapy or the novel androgen access inhibitors, these patients are often seeing their disease progress quite quickly, on average in about 4 months, and their median overall survival is limited to about 10 months. Slide 26, please. This just shows an example as to when patients see their disease progressing, they have less and less treatment options available. And if we particularly focus on patients in third or fourth line, what you can see from this bar chart here is approximately 2/3 of patients in the third-line setting are actually not receiving therapy to date, either because they die before they actually get to that point, their disease progresses or is progressing at a rate that makes them ineligible for therapy, or the available standards of care actually are used in only a palliative setting. Therefore, this represents a high unmet medical need, and this is the patient population that was studied in the VISION trial that I'll come on to in subsequent slides. Next slide, please. I wanted to share a little bit more about both the technology as well as the target for the VISION trial. So in particular, PSMA is a membrane-bound enzyme that's highly expressed in prostate cancer across a variety of sites and stages of disease. The expression in normal tissue is highly restricted, making PSMA a very, very attractive target for both PET imaging as well as radioligand therapy. PSMA-617 is a small molecule that targets the PSMA receptor with very high affinity and delivers a payload of beta particle-emitting lutetium-177 through receptor-mediated endocytosis. So it's delivering it specifically to the cancer cell and minimizing radiation to the surrounding normal tissue or neighboring cells. Next slide. So in terms of the VISION overall study design, I'll start on the left-hand side, focusing on the eligible patient population. These are patients that have been previously treated with least one or potentially more than one androgen-receptor pathway inhibitors, and they will have received at least one, but no more than 2 taxane-based regimens. Patients, as per protocol, are permitted to receive standard of care before randomization and after randomization, as long as those standards of care did not include chemotherapy, immunotherapy, Radium-223 or investigational drugs, because none of these agents have been tested in combination with lutetium-PSMA-617. In addition, one of the key eligibility criteria was for patients to have PSMA-positive PET scan prior to study entry and randomization with Gallium PSMA-11. And in particular, patients had to have at least 1 gallium-positive PET lesion, meaning that the gallium uptake in the tumor had to be greater than that in the liver. And secondly, there could be no lesions that were PSMA-negative. In terms of study design, 831 patients were randomized 2:1 to receive standard-of-care therapy, plus or minus lutetium-PSMA-617. These patients were given at least 4 cycles of therapy, and they were eligible to receive an additional 2 cycles of therapy, if they were deriving benefit. The overall primary endpoints included both radiographic progression-free survival and overall survival. These were alternate primary endpoints, which means that we could declare a positive trial on the basis of either or both endpoints. And Alpha was allocated accordingly to maintain the traditional Alpha spend of 0.025 in terms of a type 1, type 2 era. In terms of key secondary endpoints, we had included several secondary endpoints, including time to first symptomatic skeletal event, overall response rate, disease control rate as well as treatment-emergent adverse events. Next slide. In terms of the patient population, both demographics as well as baseline disease characteristics were well-balanced across treatment arms, and this represented the patient population intended to be studied. Next slide. Here are the key results in terms of the primary endpoint. So starting on the left was the overall survival result. As you could see from the Kaplan-Meier curve, these curves separate early, and that separation is maintained throughout the entire duration of follow-up. This resulted in a hazard ratio of 0.62 or a 38% reduction in the risk of death. The experimental arm of lutetium-PSMA-617 also significantly demonstrated a clinically meaningful improvement in median overall survival, as shown here by an improvement of 4 months, with medians of 15.3 versus 11.3 months in the control arm. On the right-hand side of the slide, you see that lutetium-PSMA-617 also significantly reduced the risk of radiographic disease progression or death by 60%, which translates into a hazard ratio of 0.40. And you could see the curve separate early, and here is reflected more than 5-month improvement in median radiographic progression-free survival. Next slide. We had also demonstrated an improvement in all key secondary endpoints, including an overall response rate of 29.8% versus 1.7%. These include all patients evaluated by RECIST 1.1. If you look at patients that only had measurable disease at baseline, the overall response rate increased to about 45% in the lutetium PSMA-617 arm. Another important and key secondary endpoint was the time to first symptomatic skeletal event. We know very well that patients with advanced prostate cancer are at risk for fractures, for spinal cord compression and for palliative-related chemotherapy or other related therapies to the bone because of significant related pain. Here, we also show a hazard ratio of 0.5 or a 50% reduction in the time to first symptomatic skeletal event and improvement in that median time of approximately 5 months. Next slide. In terms of overall safety, we did observe that there was an increase in overall treatment-emergent adverse events, both in all grades as well as high grades. In particular, if we look at high-grade bone marrow suppression, here, we see that anywhere from 5% to 13% of patients are experiencing high-grade cytopenias. We also noticed that there was an increase in high-grade fatigue, and urinary tract infections in the Lu-PSMA-617 arm compared to standard of care only arm. There was also a higher rates of treatment discontinuations that were related to treatment-emergent adverse events. And as you see on the left-hand side, that was approximately 12% in patients in the Lu-PSMA arm versus 8% in the standard-of-care arm. Next slide. So in summary, the combination of Lu-PSMA with standard of care resulted in a 38% reduction in the risk of death and a 60% reduction in the risk of radiographic disease progression or death compared to standard of care alone. To put these results into context, I know the ASCO discussion mentioned that a 4-month improvement in overall survival was consistent with previous Phase III data for other therapies in patients with prostate cancer. It is very difficult, if not impossible, to make indirect cross-trial comparisons to studies that were done historically in different patient population, different lines of therapy as well as with different control or comparator arms. So in particular, the results of this trail are quite clinically meaningful because these patients often have no alternative and are receiving standard-of-care therapies that often include only palliative-related therapies rather than true treatment-related therapies. In terms of the 4-month median improvement and survival, that actually translates into about a 40% reduction in risk. So quite clinically significant and should not be compared to trials that were done in very different populations in the past. I'm very proud that we continue to have dialogue with health authorities around the world, and regulatory submissions in the U.S. and the EU are on track for the second half of 2021. Based on these clinically impressive and relevant results, these data support further investigating new PSMA into earlier lines of therapy and potentially earlier stages of disease. If we go to the next slide. Here is an overview of the current development plans and the areas that we are currently exploring to go into earlier stages. So the current trial focuses on patients with metastatic castrate prostate- resistant cancer in the third and fourth line, after receiving 1 and no more than 2 taxane-based chemotherapies. In terms of the upcoming clinical trials that we are currently planning and executing, we have 2 trials, 2 additional Phase III trials called PSMA 4. This is in the pre-taxane, so prior to docetaxel or cabazitaxel chemotherapy. And this study start is imminent. We also have a Phase III study that has already started enrolling patients in metastatic hormone-sensitive prostate cancer. And that trial is a global Phase III trial, and both are available on clinicaltrials.gov. Based on this data, we are also considering other combination-based therapies in the castrate-resistant prostate cancer patient population as well as exploring the potential to move this into earlier stages of disease. With that, I will turn it over to Dr. Alice Shaw, who will take us through some of our other combination-based and targeted therapy process. Alice, over to you.

Thanks, Jeff, and good morning, good afternoon. So starting at Slide #36, we're going to shift now from RLT to targeted therapies in our early pipeline with a focus on our first-in-class allosteric SHP2 inhibitor, TNO155, and targeting the MAP kinase pathway. So just as a reminder, SHP2 is a tyrosine phosphatase that links upstream-activated RTK such as EGFR and FGFR to the RAS MAP kinase pathway and specifically mediates GTP loading of RAS downstream of RTKs. As shown here on the right, SHP2 has also been shown to function downstream of PD-1 signaling in T cells, leading to suppression of T cell-mediated immune responses. So there are multiple and diverse roles for SHP2 in the tumor itself and in the tumor microenvironment, suggesting many opportunities for a SHP2 inhibitor such as TNO. Next slide. So on this slide, this is #37, I've summarized one of the major areas of interest in targeting SHP2, which is in the setting of drug resistance. As you can see on the left, we know that resistance in oncogene-driven cancers can be mediated by many different resistance mechanisms, the majority of which involve activation of alternative kinases or so-called bypass mechanisms. And these lead to MAP kinase reactivation. Many of these bypass tracks are dependent on SHP2. And so co-targeting the oncogenic driver and SHP2 could be broadly effective in overcoming resistance. Now in support of this, a number of preclinical studies, and I've shown 2 here on the right, have shown that TKI-SHP2 inhibitor combinations are highly active in resistant PDX models and notably more active than the SHP2 inhibitor alone. Next slide. So another key combination shown here, this is Slide #38, and this is the combination of G12C and SHP2 inhibitors. And now many studies have demonstrated really strong preclinical synergy between G12C and SHP2 inhibitors in G12C-driven cancers. As an example, on the right, our internal data showing, in general, greater antitumor activity with a combination of G12C and SHP2 inhibitors compared to either single agents. The mechanistic basis for the synergy is summarized here on the left and includes the ability of SHP2 inhibitors to enrich the GDP-bound form of G12C, and that's a target of currently available G12C inhibitors, and also SHP2 inhibitor-mediated suppression of feedback activation of RASMA kinase in the setting of G12C inhibition. And so 2 distinct mechanisms that drive a true synergistic interaction between G12C and SHP2 inhibitors. So next slide. So Slide #39 depicts the study design and patient population enrolled in our Phase I first-in-human study of TNO155. As you can see, we tested multiple dose levels and schedules. And this is really done with the goal of optimizing dose and schedule in order to enable TNO-based combinations. Now to date, 125 patients have been treated in dose escalation, all with advanced solid tumors, mostly colorectal cancer and GIST, but some non-small cell lung cancer and head and neck cancer, as you can see in the table. I should also note that we had very few patients in this first-in-human study, about 5%, with potentially sensitive G12C mutant tumors. Next slide. So here on Slide #40, as predicted by preclinical studies, TNO-demonstrated favorable PK in patients with dose proportional exposure, as you can see on the left. In addition, TNO has been shown not to induce or inhibit major metabolic enzymes, making drug-drug interactions unlikely and further supporting combinability. There's also clear evidence of PD or target engagement based on DUSP6 suppression and on-treatment versus pretreatment biopsies, which you can see here on the right. Next slide. So shown here on Slide #41 is the safety profile of TNO155. Overall, TNO was generally well-tolerated with most AEs Grade 1 or 2 in severity and many of the common AEs similar to what's seen with other RTK and MAP kinase pathway inhibitors. Decreased ejection fraction is also an expected on-target toxicity, and we saw it in about 10% of patients, again, mostly mild in severity, reversible and really detected because of the frequent monitoring mandated by the protocol. Next slide. So here on Slide #42, the waterfall plot summarizes the best overall response across all valuable patients and dose escalation. And not surprisingly, with single-agent TNO and a predominantly CRC and GIST population and across all different dose levels, we saw limited clinical activity with stable disease as the best response. However, I should note that there were several prolonged stable diseases in non-CRC patients, including in a GIST patient whose disease has remained stable for almost 3 years. Next slide. So next steps with the study will be to expand in indications predicted to be sensitive to single-agent SHP2 inhibition based on preclinical data. But really, our main focus now that we've thoroughly examined PK, PD and safety across different doses and schedules is to establish the activity of TNO in combination with other agents. So the various TNO combinations that we're developing are shown here. This is Slide #43. And all of these are supported by preclinical studies, and most of these have actually already entered the clinic. As you can see, we're testing combinations of TNO with EGFR and ALK TKIs; triplet combinations of TNO with RAF/MEK and RAF/ERK inhibitors and BRAF V600 in CRC; TNO combined with our checkpoint inhibitor, spartalizumab, or our CDK4/6 inhibitor, ribociclib, and a variety of different cancers; and finally, TNO in combination with our G12C inhibitors, both our own JDQ443 as well as Mirati's adagrasib in G12C-driven cancers. Next slide. So here on Slide #44, I've included 1 case report that was shared last fall by Mirati and really highlights the potentially market activity of TNO combined with G12C inhibitors. This is a patient with G12C seen in lung cancer who had failed sotorasib previously after responding as well as the combination of revolution medicine SHP2 inhibitor combined with the MEK inhibitor, cobimetinib. And this patient went on to receive the combination of adagrasib and TNO155, and experienced a very dramatic clinical and radiologic response, as you can see here on the right. Now this is just one patient, but I mean between the known preclinical synergy, between G12C and SHP2 inhibitors and now this emerging clinical data, we are very excited about combining TNO with G12C inhibitors to maximize the activity and the clinical benefit of G12C inhibition. Next slide. So here, this is my last slide, #45. You can see our current MAP kinase pipeline, and this includes small molecules targeting essentially every step of the pathway, starting with KRAS, then SHP2, BRAF and cRAF, MEK and ERK and a few other downstream MAP kinase targets that I haven't shown here. We know that targeting single nodes in this pathway may not adequately suppress the pathway. And so these molecules are really enabling us to explore many different MAP kinase combinations even beyond the TNO combinations that I've already mentioned. Two examples worth highlighting include combinations with our BRAF, cRAF dimer inhibitor, LXH254 for NRAS mutant melanoma, BRAF mutant melanoma and other RAS-driven cancers. And also combinations with our G12C inhibitor, JDQ443, which is currently in Phase I testing. So I think there's lots more to come in terms of TNO combinations and also other MAP kinase combinations. So back to you, Susanne.

Thank you, Alice. And maybe just to briefly summarize our key takeaways. Novartis is a global leader in oncology, and we have a strong track record in pioneering innovation. And this year's ASCO made us very excited about the high data quality that we presented. We are the only company with depths and expertise in 4 therapeutic platforms, which we believe will be critical for the future of cancer care. The VISION trial, as presented by Jeff, further solidifies our leadership in the radioligand space. And we are excited to see that radioligand therapy can dramatically improve patient outcomes, not only in a rare disease like neuroendocrine tumors but also for prostate cancer, one of the most prevalent cancers in men. And we believe we are well-positioned with our portfolio to tackle the re-aiming unmet needs in cancer, including through combination across our platforms. So with that, I would hand over to Samir to kick off the Q&A.

Thank you very much, Susanne, and thank you to all the presenters. We've got quite a lot of questions online at the moment. [Operator Instructions] So operator, if you could have the first question, please.

[Operator Instructions] And your first question comes from Graham Parry from Bank of America.

So firstly, just help us understand what your expectations are around launch trajectory on Lu-PSMA-617, just given the need to get the radioligand therapy center set up. So do you have enough at the moment to support what you think is needed for the late line of therapy? Or do you feel that there's going to be -- the launch trajection could be inhibited by the need to get further centers signed up? And then secondly, could you help us understand the differentiation of your LAG-3 and your KRAS inhibitors versus Bristol's LAG-3, think Gilead's [indiscernible], all the Mirati KRAS for that matter. So why -- or how do you see it differentiated and how does that affect your combo strategy with Mirati KRAS going forward with your SHP2?

Fantastic. Thank you, Graham. So for the first question, I'll hand it across to Sidonie, and then I'll get Alice to address the question with respect to the differentiation of the LAG-3 and KRAS. So Sidonie, on the launch trajectory, please.

Thank you. Capacity is an important -- capacity is very important for a successful launch. So indeed [indiscernible] into the existing Lutathera treatment centers because it's late line and a smaller population. Long term, we will work to expand the capacity as lined out in my short presentation in these centers that we already have to increase first infusion days, infusion hours and also infusion shares. And we will share the best practice because, as usual, you have highly productive centers and less productive centers. So sharing these best practice will be key as well. And then we will double the existing centers. We have time until the pre-taxane study reads out. We want to double these centers and set up new centers, communities, practices that currently have optimized themselves with Alpha hot labs to expand for better for Lutetium-177 to leverage this already [indiscernible] these accounts with hot labs have to treat patients with PSMA-617. And for sure, we will provide them the best practice education on process and site expansion to ensure that these sites are ready for their first infusion.

Alice, the question on the differentiation of the LAG-3 versus the KRAS? Yes, and I'm going to come back to you, Susanne, because maybe it is difficult to hear you, Sidonie. So maybe Susanne wants to come back on that point. Susanne?

Sure. No, I think it was -- I hope everybody could hear. So I think Sidonie, I think, was clear that we have enough capacity for now. So we expect that we can cover all the patients in first line. And then we have plans to double number of centers and with that capacity. And we should be well ready before the earlier trials like the pre-taxane trial will read out. And I think with that, over to Alice now.

Sure. I'll start with the KRAS and then go to LAG-3. So with KRAS G12C inhibitor, JDQ443, this is a potent and selective irreversible G12C inhibitor, specifically binds the GDP-bound form of KRAS similar to other G12C inhibitors such as sotorasib and adagrasib. I mentioned that JDQ443 is currently a first-in-human study right now. So I would say it's difficult to make comparisons. Of course, there could be potential for differentiation in terms of safety, even in terms of efficacy. But actually, where I think our differentiation really will come with JDQ443 is our ability to combine our G12C inhibitor with many other assets in our portfolio, which I highlighted during my talk. TNO155 is one obvious combination partner. And as I mentioned, we are focusing on the JDQ-TNO combination and that will be in our first-in-human study. But there are actually many other combinations of G12C inhibitors with other potential MAP kinase pathway inhibitors that could be highly active in the setting of G12C-driven cancer. So that's where I believe we may have true differentiation is in terms of our JDQ-based combinations. In terms of LAG-3, we do have a LAG-3 antibody, which is LAG525. And we actually have studied LAG525 as a single agent as well as in combination with our PD-1 inhibitor, spartalizumab, in advanced solid tumors. We presented the data from the Phase I/II study where we showed that there was very little single-agent activity with LAG525. But we did see potential activity of our LAG-3 inhibitor with spartalizumab, and we explored a number of different expansions in our Phase II study in both IO-naive as well as IO-pretreated patients. I would say, in general, we did see some potential signs of added benefit with LAG525. And this has, in fact, supported further evaluations of LAG525 in late developments. And so maybe with that, I'll ask Jeff if he wants to comment.

Thank you, Alice. And Graham, thanks for the question. And we currently have an ongoing study following up on some of those early signals that Alice mentioned in different patient populations and different subsets of patients based on biomarker selection criteria. I think in terms of differentiation, our differentiation would be in the development approach via combinations. And if I just spend a minute on the benefit of the tocilizumab licensing deal that we had done recently, this gives us the ability to have data from up to 15 registration-directed trials, where 5 of those have already reported out positively and a number of other trials still yet to report out. In addition, the development plan for tocilizumab is quite broad with probably now more than 100 studies ongoing or soon to be started for tocilizumab, which will give us insight into other cancers and help us identify where the potential addition of LAG-3 inhibitor or this distinct checkpoint receptor combination will potentially benefit patients going forward. So we are currently assessing all of the data that has emerged at ASCO and that we have been in our hands to define the next steps.

Your next question comes from Mark Purcell from Morgan Stanley.

In terms of Lu-617 PSMA moving into early lines of therapy, could you help us understand your confidence in making that shift? The challenge is officially appear to be the route administration, the need for specialist infusion centers. And it's not clear on the presentation, which of the AEs was most problematic when it came to the top instance of discontinuation. So helping us understand that would be great. And then it appears that you're basically targeting lymph nodes and bone and organs in terms of binding to all PSMA expressing cancer cells. So what's the importance of this sort of broader targeting when it comes to the move into earlier lines of therapy?

Great. Thank you very much, Mark. So both the questions will be for Jeff, they're related. So both relate to the earlier lines of therapy. And it's to do with going into how much the specialty centers, the route of administration, the AEs and also targeting for the earlier lines of therapy as a secondary question. So Jeff?

Yes. No, thanks for the question, Mark. So in terms of earlier lines of therapy, both are confidence as well as the rationale to do so. So you may have remembered a Phase II randomized trial that was done by the Australia/New Zealand cooperative group as a head-to-head study against cabazitaxel, showing a clear benefit in terms of reduction in PSA levels versus taxane-based chemotherapy. In that trial, in particular, we saw both clear efficacy signal as well as very manageable safety and there was no treatment or drug-related fatalities in that particular population. As we go into earlier lines of therapy, there is also strong hypotheses that androgen deprivation or inhibiting the antigen-related pathways also influences PSMA expression. So this may provide a unique opportunity to demonstrate even greater clinical efficacy in these patient populations, either alone as a combination with standard-of-care therapy. In terms of the safety, we do know that cytopenias and bone marrow suppression is an important side effect to be cognizant of. In particular, even within the VISION trial, we noted that these side effects were often manageable and reversible. And it's something that oncologists are very familiar dealing with through supportive care measures such as growth factors. So this is something that we will continue to monitor and to manage in the earlier lines of disease as we study those as well.

Your next question comes from Emmanuel Papadakis from Deutsche Bank.

Maybe I'll take one on BPS it might be its competitive outlook. Point Biopharma announced a few days ago they're initiating their relatively equivalent trials to PSMA 4. So do you see any point of clinical differentiation there? Do you have any IP barriers to provide some competitive protection? Are you really expecting to share the market equally, one at particular, with that asset in the midterm?

Okay. So on that particular question, we won't comment on competitor and their design studies, et cetera. However, in terms of how we stand versus competition, perhaps I'll ask Susanne if she wants to say anything on that particular point. Susanne?

Yes. I mean -- yes, Emmanuel, you asked about IP protection. So let me say the following. I mean to manufacture a radioligand therapy includes many complex steps. And as you can imagine, there is many of these processes that are proprietary. And usually also, that's know-how. That's not very broadly known. It's known to only a very limited of people. In terms of patent protection, we feel we have a robust portfolio of patents. On Lu-PSMA, we have basic patent protection until 2034. And there's also a potential extension in the U.S. and EU. So we feel we are very well-protected. And as I said, it's not as trivial to just produce these radioligand therapies at scale, and therefore, we still feel we are in a good competitive situation.

Your next question comes from Simon Baker from Redburn.

Going back to 617 and the plenary presentation. Just 2 things that popped up in the discussion. Firstly, from the discussion, the suggestion that PSMA screening was unnecessary, given it's so widely expressed. I just wonder what your thoughts are on the potential for an all-comers indication at some stage? And then secondly, the presenter discussed the importance of the relationship between nuclear medicine and medical oncology in the trial, and problems where that relationship is not strong. I just wondered, if that's a real-world problem that you see a lot in the learnings that you can take from this study to the broader radioligand therapy market.

Great. So with the first question on the likely label and do you need to do PSMA screening or not, I'll give it to Jeff. The second question, in terms of nuclear medicine specialists and the medical oncologist and what their relationship's like, we'll give to Sidonie. So with the first question, please, Jeff?

No. Thanks, thanks, Simon. And I think it's a very relevant question, and I think this one in particular, because PSMA expression is often found in more than 80% of prostate cancer patients. It begs the question as to how important that screening becomes. It is not just about selecting whether or not a patient is eligible for therapy, but it is also understanding the heterogeneity of their disease. So coming back to the point of treating what you can see. The advantage of using PSMA PET screening is the ability to see which lesions are PET-positive and the value of radioligand-based therapy is you're switching out that gallium-based tracer for lutetium so that you're ultimately using the same PSMA target as both a diagnostic as well as a therapeutic. So this affords us to better understand the heterogeneity of the disease, and it will also help us to better understand the lesions and why they are responding or maybe not responding after a period of time. So it will provide unique insights into the therapeutic, both monitoring as well as selection of patients going forward. At a platform level, I think the screening becomes even more important as we think about future targets that may not be expressed as high as 80%. So I do think there is value in not only screening for these patients who have prostate cancer but also for the platform and our pipeline of assets to come. And maybe I'll turn it over on the next question regarding the interdependency on the nuclear medicines and the medical oncologists.

Sidonie?

Thank you, Jeff. And the multidisciplinary approach and really discussing the patients and having the patients treated in a strong alignment between [Audio Gap] in the disciplines that are involved is super important, not only for PSMA, but also moving forward with our pipeline products because you will have other disciplines as well. So the patient journey is a complex one. And as said, you have the urologist, you have the medical oncologist, the radiation oncologist and the nuclear medicine physician. And I think it was Mike Morris, who said some dropouts were related to not proper handling of this relationship. So it's our task to bring them together and educate across all these decision-makers, the value of RLT and then the requirements, how they set up the process together to support this approach.

Your next question comes from Florent Cespedes from Societe Generale.

An easy one on the Slide 22, maybe for Sidonie. Could you share with us why you have, in the prostate cancer, 5 radioligand projects? Do you believe that some will be better tolerated or some could show better efficacy? If you could elaborate on this would be great.

Okay. I think you're referring to the pipeline slide, Florent, in which case probably better, if it's Jeff, who actually talks about the pipeline, if that's okay.

Happy to, Florent. So in terms of why there is multiple agents listed on that slide, so we do have a unique opportunity here where we can look at different PSMA targets in terms of both their dosimetry as well as their distribution. And as Sidonie mentioned in one of her slides, it also gives us an opportunity to look at different isotopes based on either dose or distribution. So I do think these are important parameters for us going forward. And we do have ongoing Phase I studies, looking at the different PSMA ligands and with different isotopes, whether it's lutetium-based and/or actinium-based. Some of those, I can't see the pipeline slide in front of me at the moment, but they may also include the diagnostic component as well, either the Gallium 68 or the potential to have a fluorine-based PET imaging tracer as well. So that's why you may also see a longer list for prostate cancer.

Your next question comes from Seamus Fernandez from Guggenheim Partners.

So I just have one question. I wanted to get a better sense of the cardiac profile of TNO155. And it appeared that there were some cardiac toxicity. Is that something that's directly related to the mechanism of action? Or do you believe that this is some off-target toxicity? And added to that, if we know that there are some KRAS agents that have some cardiac signals, QTC prolongation as well, just wanted to get a better understanding of the combinability of TNO155, given some of those early profile signals and again, your views there.

Great. Thank you, Seamus. And so it's a question for Alice. TNO, specifically cardiac adverse events, it's MOA-related, off-target and implications for combos.

Yes. So thank you for that question. You did highlight this toxicity from our TNO Phase I study in the ASCO presentation, and I briefly mentioned it, but just to provide some more detail. A decreased ejection fraction was seen at about 10% of our patients. We do believe, based on preclinical data, that this is an on-target toxicity. And as I noted, what's important is that this decrease in ejection fraction was typically mild and also reversible. And I should say that because we were attuned to this being an on-target toxicity, we actually did monitor for cardiac contractility very, very frequently in our protocol. And so we were able to detect even these mild asymptomatic decreases in ejection fraction. So far, I mean, I think we haven't seen any issues regarding QTC prolongation. So really, it's around this potential impact on cardiac contractility. Again, only in 10% of patients, easily monitored and reversible. I think that this is quite comparable to data that we've seen with other MAP kinase pathway inhibitors, including MEK inhibitors. And of course, we are very aggressively advancing our combinations and believe that even in the setting of combinations because we understand this cardiac toxicity so well, we will be able to manage it.

Your next question comes from Wimal Kapadia from Bernstein.

So if I just come back to 617, please. I appreciate you flagged the caveats across trial comparisons, but if I have a look at previous caba data, particularly the CARD trial, I look at VISION and I think about therapy. How are you thinking about the efficacy and safety profile of the product versus caba in this setting? And how will Novartis really be discussing this profile with physicians? Do you actually believe you have a better profile for the treatment in the post-taxane setting?

Thank you very much, Wimal. Back to Jeff for contextualizing the data.

Yes. So I think it's a good question. And maybe just as a reminder in terms of patient population. So these are patients that had to either have already received 2 prior lines of taxane-based chemotherapy, such as docetaxel and cabazitaxel, or they had to be deemed ineligible to receive any further lines of chemotherapy. So making a comparison around efficacy related to cabazitaxel would not be fair because that would not be a treatment alternative for these patients. As you rightly alluded to, the therapy trial continues to be ongoing, and we will wait additional data from that particular trial in terms of the head-to-head data versus cabazitaxel. And then as we talked about earlier, we have 2 upcoming trials that are in the pre-taxane setting against the appropriate comparators prior to patients being eligible or receiving taxane-based chemotherapy.

Your final question comes from Matthew Weston from Credit Suisse.

A quick follow-up, if I can, on one of the PI's comments in the presentation during the plenary. He specifically said that approval would require a change in the approval of the PSMA PET, so that it can now be used for the selection of patients rather than tracking patients' tumors. Is that something that you anticipate and something that you believe will be done prior to PSMA being approved? And just if I can sneak a final one in. Can you let us know whether the endocyte manufacturing facility has been FDA approved? Or there is a risk that, that adds further delay at the approval end in due course?

Great. Thank you very much, Matthew. Jeff, do you want to take both the questions? The first one with respect to the PSMA and what's required in terms of selection of the test. And I don't know whether you can comment anything else with respect to the manufacturing facility from...

I can take the first one, and then I may defer to Sidonie or Susanne on the second part of the question. So in terms of the FDA expectations, there are already gallium-based PSMA tests that are actually approved for use. I think what is unique here is that we are using the PSMA-11 gallium-based test as a mechanism to select patients, which would, therefore, then constitute a companion diagnostic or a specific regulatory pathway for that. We have been in discussion with the FDA regarding the requirements for our upcoming drug submission, and we would include the PSMA diagnostic as part of that upcoming submission to the health authorities accordingly.

Thank you. And Susanne, on the sites?

I think I can offer Sidonie taking it . She's the expert on manufacturing. Sidonie?

Yes. So we plan to produce in Melbourne, which is FDA-approved. And we can also produce in Europe in Iberia, which also has FDA approval. So we have the flexibility.

And just to comment on that. These are both AAA sites. So we already prepared the tech transfer by -- after we acquired Endocyte. So that's why the production for FDA will be done from established AAA sites that are FDA-approved.

Fantastic. Thank you all very much and a special thanks to everybody outside of Novartis because I appreciate -- we all appreciate it's a super busy day for all of you. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.