Nuvalent, Inc. (NUVL) Earnings Call Transcript & Summary

So my name is Peter Lawson. I'm one of the biotech analysts at Barclays and covered Nuvalent for, I guess, 6 to 9 months or so. It's been a pleasure covering the stock. And so from stage, I've got James Porter, the CEO; and Alex Balcom, CFO.

And first question is, I've been kind of asking some kind of macro questions just around with the political change, et cetera. And kind of how and if you're expecting any supply chain disruptions just with tariffs? And maybe you could tie it back to COVID as well?

Sure. Let me start just by thanking you, Peter and the Barclays team for the opportunity to participate in the conference. It's an exciting time for Nuvalent and we're thrilled to be here. Do you want to take -- how we're thinking about this?

Sure. Yes. So on the tariffs, I mean, I think this is evolving pretty rapidly. And I would say our team is monitoring that, and we're in the process of assessing any impact to Nuvalent.

Okay. And -- but I assume from years of experience just around like COVID, that probably has insulated the supply chain agreements and making sure you've got redundancy in this?

Yes. Yes. So I mean I would say we have a really strong team focused on that. And they have been constantly kind of evaluating what risks exist and ensuring we're mitigating the risks. So we'll monitor how that continues to evolve as well. But I [indiscernible] there.

Got you. Okay. And then kind of the disruption of the FDA and whether there's been a slowdown in communication, or if you anticipate any slowdown in communication with them?

Yes. So I mean, I've been in the industry for 24 years. I've always remarked or been impressed with just how incredibly thorough and efficient the FDA is on reviewing and working with pharmaceutical companies to develop new drugs. And we've seen no differences in any way. In fact, our programs are accelerating. We've been moving faster. And then we are expecting pivotal data readouts soon and hope to get approved products soon. And the FDA has been accelerating with us on those timelines. So we're very encouraged by the collaboration and we will expect to continue to do so.

Got you. And just a last macro question would just be around NIH cuts, if that has any kind of short-term, midterm worries for the company and if that -- or even if it trickles down to clinical trial sites?

Actually I would say no impact for the company, but just on a personal level, I think it's something that I believe strongly in. I'm a trained scientist and I went to universities in the U.S. and was trained in chemistry, and benefited from government investment and academic research. I think that's the genesis of creating the next generation of scientists, as well as creating the next generation of biotech companies. So just on a personal level, I think it's really important to invest and research in the U.S. because you're building the next generation of scientists and the next companies. So I hope we figure that out.

Yes. I reiterate your comments. Its been -- a great foundation has been built. So back to kind of the business of the day, kind of your ROS1 asset and sort of the ARROS-1 trial. Kind of what should we expect for the pivotal trial readout? That's a first half of this year? I assume that's kind of a 2Q event? And how much data are you going to share?

Maybe we'll start on the timelines, and I'll talk to this.

Sure. Yes. So we are looking forward to presenting the pivotal data from the ARROS-1 study. So it will be in the first half of the year. And we're planning for a top line press release for that data that will follow with the full data set at a future medical meeting.

And as far as the debt expectations, so these are -- we've enjoyed incredibly robust enrollment on the study. Something we're very pleased with 430 patients total, 330 in the Phase 2 up and through December of last year. At some point, we had overenrolled the study and we kept going because there was such demand for the differentiated profile with zeaxanthin, and so we kept enrolling the study. At some point, we enrolled enough patients to basically look at -- this is likely the efficacy of valuable patient population. Let's follow these patients for a certain time period. And then we would clean that data, cut that data. That would be our pivotal data for previously treated ROS1 lung cancer patients. In the ROS1 space, other drugs have been approved by following the TKI-naive patients for about 12 months post their response, right? I think in the previously treated setting, there's an opportunity to consider something less than that. So we said, okay, we're enjoying excellent enrollment in both TKI-naive and previously treated patients. Let's cut the previously treated data earlier, because we don't have to follow those patients for as long, because there's a clear medical need here. Let's bring that data set forward and then soon thereafter, we'll look at our TKI-naive data to guide our line-agnostic expansion. Does that make sense, Peter?

That does. So the top line we get to see, would that be kind of second line plus?

Exactly right. Yes. We have registration-directed cohorts for all second-line patients, third-line patients, you might recall from our Phase I. We had enrolled a very heavily pretreated patient population that's exhausted available options. And our drug was still active in that setting. That's because we designed it, to be active in that setting. So those patients had CNS disease. Many have ROS1 mutations. They've progressed through the other therapies. And we hit each one of those key areas of our target product profile. Including and maybe most importantly, a well-tolerated safety profile. And our Phase II would have patients that were 1 prior, 2 prior, 2-plus prior, we didn't turn any one away.

Got you. And so that cut, we see on the top line cut, so we get kind of second-line, second-line plus kind of thing. Where will we see kind of CNS, non-CNS mets?

Our goal is always to tell a clear story. So I think each of the key areas of our target product profile, meaning activity against mutations, activity in the brain, safety profile. Those are all critically important for what we believe is a best-in-class profile because that's how the physicians will look at it of what drugs can advance to the earliest line of treatment. So we're going to aim to tell a clear story about what we're learning on each one of those variables.

Got you. And then what's the path for success in -- I don't know if you want to phrase it as second line plus setting or...

Yes. In the previously treated setting, the -- there is no clear standard of care. The way you should think about the landscape, crizotinib is the standard of care. It has some limitations. Patients progress with ROS1 mutations or with CNS disease. There are a number of other drugs that have been developed in that space. All these drugs are dual track ROS1 inhibitor. So in addition to hitting ROS1, they're actually very potent TRK inhibitors. The TRK inhibition in the brain can lead to a broad spectrum of neurotoxicities. And the feedback from the physicians, where they're looking for a compound that can address the liabilities of crizotinib, meaning limited brain penetrants and the emergence of ROS1 resistance mutations without bringing on these additional safety liabilities. Zidesamtinib is the first and only drug that does that. So we would want to see in our Phase II data set. Do we have that profile where we're hitting mutations? We're active in the brain, where it's well tolerated, because that will be the key for advancing it forward for all ROS1 patients.

And the path of success as you kind of move from front line, so that's eventually to replace crizotinib. That how we should think about that? And kind of what the physicians want to see?

Sure, sure. So crizotinib has a median duration response of about 18 months. Now crizotinib used to be the standard of care for ALK non-small cell lung cancer. And it was a good drug for those patients, but a number of other drugs have now proven to be superior to crizotinib in ALK lung cancer. As an example, lorlatinib can address the mutations that emerge beyond crizotinib. And it also has good brain penetrants. So in ALK non-small cell lung cancer, it actually had a 5-plus year progression-free survival, compared to about a year of crizotinib. So a significant improvement on what crizotinib could do. Will those limitations that crizotinib had in ALK are the same limitations it has in ROS1. And zidesamtinib has been designed to address that. So what we hope to show in frontline patients is that we can drive significantly longer, more durable responses. Keeping patients on therapy, preventing the disease from metastasizes into the brain, preventing the emergence of on-target ROS1 resistance mutations. If we could do that, then it could be a game changer for that patient, that patient population. It also represents a very attractive commercial opportunity. And what we've been very pleased to see is, we've had very robust enrollment in our trial, both TKI naive and previously treated patients. And that's starting to paint the picture for us that the physicians believe in this differentiated profile. They're seeing something different and the experiences using zidesamtinib, and that puts us in a position to have this data soon for both previously treated and TKI-naive patients.

And then as we think about the competition in that space, do you think [indiscernible] Bios ROS1, does that change landscape in any way?

It really doesn't. No. We've started this program in 2018 when we started the company by listening to the physicians that have developed the other compounds in the space. So at the time, crizotinib was the standard of care. And the physician said, there's a number of different drugs they're working on at the time. Entrectinib, repotrectinib, taletrectinib. These are all these dual track ROS1 inhibitors. And the feedback was, these drugs, they don't believe are going to solve the needs. Now since then, they said that those drugs are likely to get approved but not used. Since then, entrectinib was acquired by Roche, and Roche is obviously one of the best companies in the world that commercializing oncology drugs. But I think, the launch leaves a little bit less to be desired. And -- but we weren't really surprised by that, because the physician feedback was the neurotoxicity signals would be difficult to manage. Then you had another compound repotrectinib, same profile of entrectinib and the launch, I guess, still leaves a little bit to be desired and not surprising to us, because we have heard from the physicians not addressing the needs. The taletrectinib drug has actually started development with another company, Daiichi Sankyo many years ago. In addition to the Trk signals, which may be a little bit less pronounced than repotrectinib, it brings other safety signals that I think are dose-limiting for patients. And I think zidesamtinib safety profile really stands out. And I think that's why we've seen such momentum on this program. And I think that's the rationale of why we're seeing such high enrollment rates in our trial.

Yes. Do you think [ Novation's ] molecule ends up like finding a niche within the marketplace that becomes more difficult to penetrate, or?

I would -- maybe a better question for them. I actually -- I'm excited they're going to take it forward because ROS1 patients need more options. But I firmly believe that we are on the right track with zidesamtinib and that is the only drug which addresses the combined medical needs of hitting the mutations, getting into the brain, and having that ROS1 selective safety profile. I would actually say the safety profile of zidesamtinib is a real outlier in the entire oncology space, not just in the ROS1 lung cancer space. It's a really well-tolerated drug.

Got you. And then kind of how should we think about label expansion for your ROS1, I guess going into what TKI-naive patients as well?

Yes. So I think the first data we'll read out was previously treated and TKI-naive will be soon thereafter. So, as I mentioned before, other ROS1 drugs in the TKI-naive setting were followed for 12 months, and we just thought there was an opportunity to go a little bit shorter than that for previously treated patients. And that's why that data is going to emerge first, and then TKI-naive would come soon thereafter.

Got you. Okay. And that would be an amendment, but it sounds like we'd see that data this year and...

We haven't guided just yet. But like Jim said, it's on its way.

Got you. Okay. Perfect. And then the ALKOVE-1 trial. So if you are ALK-1 inhibitor. Should we expect both -- was it second-line and second-line plus data this year?

Yes, that's correct. So we'll share the pivotal ALK data by year-end and it will be second-line patients as well as third-line.

Okay. And then I know you've talked about like a rapid pace of enrollment. Is that still sustained? And does that -- what does that tell us?

Yes. Peter, it's been pretty awesome, honestly. It's super rewarding for the team to know that we've had that much momentum. It reminds all the Nuvalent team members that we have a chance to make an impact for patients here. So we enrolled 600 patients on the ALK trial as of December. That would include 460 in the Phase II since February of last year. So 10 months, 460 patients. Quite frankly, I'm not -- I went back and looked at all the different blockbusters in the oncology space and it's hard to find any drug that has that kind of enrollment rate. So we're really pleased by that. I think it speaks to the differentiated profile. It speaks to the excitement that the investigators have for this differentiated profile. It speaks to the excellent collaborations we have with patient advocacy groups in this space, which helps point patients to this clinical research program. And I think it starts to paint a pretty compelling commercial opportunity that there's a need here and [indiscernible] has the potential to address that.

Got you. Okay. And the path of success you want to see, or physicians want to see, in that second line plus setting?

Yes. So just to orient folks, the standard of care is erlotinib. When patients progress on erlotinib, the only drug that really works there is lorlatinib. And when patients progress on erlotinib, nothing works. So that's where we start with our [indiscernible] program. We want to address that third-line patient population that's progressed on sequential erlotinib, lorlatinib. They often have something called compound mutations. That means two mutations in the kinase domain. [indiscernible] was designed to address that. And we're showing deep durable responses in that -- in the Phase I study. Even beyond drugs like erlotinib or nothing else works. That's quite encouraging. We have Breakthrough Therapy designation in that setting, and we have a registration-directed cohort for that third line setting. Now we were at [indiscernible], we're looking not just to address the need but how do you design a compound that can move up to treatment paradigm and be the best option for all patients without lung cancer? And most physicians would tell you erlotinib is the more active drug than compared to alectinib. However, lorlatinib does not get the majority of the frontline use because it hits a specific off-target called Trk, same thing we mentioned in the ROS1 program, and it leads to a broad spectrum of neurotoxicities. And for that reason, most physicians have relegated that to salvage treatment after patients progress on alectinib. And that's a learning for us. We said if we could solve for that, meaning make a compound through innovative chemistry that can do the things erlotinib can do, cover the mutations, have good brain penetration, but importantly, be selective for ALK versus Trk. Then in essence, we could have a better drug than erlotinib in second line and potentially better drug than alectinib in frontline. So we have a second line cohort in ALKOVE-1 that also has enrolled very well. The benchmark there is a 31% to 39% response rate with erlotinib, and a 7-month duration of response. So in our Phase I, we had mostly third line-plus patients. So patients that have already taken erlotinib. And we have doubled the durability in that third line setting than what erlotinib has in second line. So like we go past erlotinib, we have double the durability. And then at our recommended Phase II dose, we actually only saw a single patient that progress. And it really speaks to why ALK is such an interesting driver. The tumors are highly dependent on ALK-signaling. And with broad coverage of ALK mutations, we have the opportunity to drive deep durval responses with [ Nelarabine ]. And that's what we're seeing. So that benchmark in second line would be, can we drive more durable responses in 7 months. And the Phase I data looked like it was definitely trending in that direction. So we'll have that combined previously treated data set later this year, and we hope to use that to guide discussions with regulators around a previously treated indication. And then to get the front line, we have a randomized study called the [indiscernible] study, well precedented in the ALK space. 4 different randomized trials compared to crizotinib have been performed in the [indiscernible] lung cancer space. They've all been randomized 1:1. They've all about [indiscernible] about 300 patients. They've all taken about 3 years from start of enrollment to approval. So we're running a slightly larger study, 450 patients, versus a different standard of care, alectinib, today's current standard of care. We think we can drive more durable responses than alectinib because we have better coverage of [indiscernible] mutations. We have excellent brain penetration. And the Alcazar study has been designed accordingly. That study is currently open for enrollment.

Okay. Folds into my next set of questions. And why was that why is [indiscernible] larger than existing studies?

It really comes down to alectinib. It's a good drug. This is a median progression-free survival of 25.7 months in its pivotal study. So that's amazing. If you think about it, you give a diagnosis of lung cancer and the median progression-free survival of a couple of years. This is -- that's an amazing option for patients with lung cancer, but it's clearly not good enough, right? Many of these patients that get diagnosed with ALK lung cancer, they're often younger in the prime of their lives. They're living a healthy lifestyle and in their 40s or 50s, they'll get diagnosed with this rare oncogene-driven lung cancer. Alectinib has done great things for this patient population, but to say in your 40s or 50s, you have 2 years is clearly not good enough. And that's why we're so excited about the [indiscernible] program is, we think that the liabilities of alectinib, meaning the emergence of on-target acquired resistance or CNS disease, that we've designed the solution for that into [indiscernible]. We have the potential to drive more durable responses. And if we could do that, first and foremost, it would be a game changer for that patient population. It also represents a very compelling commercial opportunity for building the business around, right? Because giving extra years of progression-free survival is a very attractive option because today's market for ALK is already $2 billion. The same strategy was employed in EGFR lung cancer. A well-known example, and they took what was a $2 billion market and made it a $5-plus billion market and growing. So we're excited to push this forward and the study is about to start enrolling.

Perfect. Then just to jump back to kind of the prior data set, or maybe, in fact, to the [indiscernible] we kind of think about CNS involvement. What's the path of success the CNS [indiscernible], I guess, [ intracranial median duration ]?

Yes. So in third line, any patients that progressed on erlotinib, which is we think is outstanding CNS penetrant. It's one of the gold standards in oncology drug development. Any patients that progress on erlotinib with CNS disease and respond to [indiscernible] is encouraging. And that's what we saw in our Phase I. So any activity there is encouraging. In second line, we don't want patients progressing with CNS disease on [indiscernible]. So that's what we'd be looking for. If we can have good coverage of [indiscernible] in the CNS, which [indiscernible] been designed to do so, we should be able to drive durable responses in patients with CNS disease. And as I mentioned before, the duration of response for erlotinib in the second line is about 7 months, and we're seeing more than double than that in the third line.

Great. And just as we think about the -- where was I. The interim analysis whether it's an interim analysis, what timing we should think about that? And I know you've talked about this kind of rapid pace of enrollment. Do you expect that as well for [indiscernible]?

Yes. So there's three things that influence the data availability timeline for such a randomized Phase III trial. It's going to be enrollment rate. It's going to be event rate. And it's going to be the stats plan that we use. So in this particular setting, we actually think enrollment will be quite robust based on what we learned in Phase I and what we've seen in Phase II. But either way, we don't think that's necessarily going to be gating for data availability. We think event rate is likely to be that gating factor. We do have to put an estimate out there on clinicaltrials.gov of when primary completion might be. We've estimated it at October 2029. Just to be clear, that's just an estimate because there's a number of variables that would influence that. But we can learn from the other drugs that have come before us. and put that estimate of like where we might think the alectinib events will happen and where our events might happen. The stats plan, we get asked about a lot. Well -- does -- will include an interim analysis. So we don't want to get into the specifics of our statistical analysis plan of our study. I'll just say that we've learned from the other drugs in this space and some of those other trials I mentioned, they do indeed include interim analysis. So we can learn from that and design our study accordingly.

Great. Thank you so much. Almost at the top of the hour. So thank you so much.

Thank you, Peter.

Thank you.

Thank you.