Nuvation Bio Inc. (NUVB) Earnings Call Transcript & Summary

Hi, everyone, and welcome to the 43rd Annual JPMorgan Healthcare Conference. My name is Natalie Collins, and I'm an associate on the JPMorgan Healthcare Investment Banking team. Just a reminder, we'll follow 20 minutes of presentation time followed by 20 minutes of Q&A. And with that, I'm pleased to introduce the CEO of Nuvation Bio, David Hung.

Thank you. Thank you all for coming. Nuvation Bio is focused on making best-in-class drugs by improving validated mechanisms that have encountered safety liabilities and limitations in efficacy. Our first molecule is taletrectinib, a third-generation potentially best-in-class ROS1 inhibitor that was just approved a week ago in China. Our NDA in the U.S. has been accepted by U.S. FDA for priority review in the line agnostic indication for ROS1-positive non-small cell lung cancer. Our PDUFA date has been set for June 23 of this year. Safusidenib is another potentially best-in-class molecule, a brain-penetrant, mutant IDH1 inhibitor that we are currently designing pivotal studies for in diffuse IDH1-mutant glioma. Our third molecule in development is NUV-1511, our first clinical-stage drug-drug conjugate, which we're evaluating in a Phase I/II study. And our fourth molecule is NUV-868, a BD2-selective BET inhibitor that has just completed Phase I and Phase Ib studies. Our cash balance is about $550 million. Our taletrectinib PDUFA date, as I mentioned, is June 23, and so we are well positioned to become a U.S. commercial-stage organization by midyear this year. If you look at our programs, they range from commercial to early stage. I've gone through most of the data on this slide. If we focus on ROS1, taletrectinib has the highest overall response rate and longest median progression-free survival of any ROS1 inhibitor in the first-line setting. This is the TKI-naive setting. If you look on the far right, at first-generation TKIs, crizotinib and entrectinib, the average overall response rate is about 70%, and the median progression-free survival for these first-generation TKIs is about 18 months, 1.5 years. If you look at the second column, the second-generation ROS1 inhibitor, repotrectinib, has a significantly better ORR of 79% and a significantly better PFS of 3 years, 36 months. But if you look at the far left, taletrectinib has an overall response rate of 89% and a median PFS of 46 months, nearly a year longer than repotrectinib. And just to put this in some context for you, if you look at all drugs in oncology in any indication, very few drugs have actually matched the 89% ORR and 46-month PFS that we've seen with taletrectinib in the first-line setting. So if you look at the slide, even selpercatinib for RET or repotrectinib, as I mentioned for ROS1, alectinib for ALK, osimertinib for EGFR, these ORRs range from 77% to 84%, but the PFS is in the range of 19 to 36 months. Even if you look at XTANDI, our prostate drug at Medivation, which became the biggest drug in advanced prostate cancer, our overall response rate was 59% and PFS of 20 months. So taletrectinib's 89% ORR and 46-month PFS is really -- puts it really in an elite group among all oncology agents in any indication. If you look at the clinical argument for why patients should be taking taletrectinib and why doctors should be prescribing it, if you take a first-generation ROS1 inhibitor like entrectinib, so entrectinib is the only CNS-penetrant first-generation TKI, your median progression-free survival is about 16 months. If you fail that and go on to second-gen repotrectinib, you get another 9 months. So if you add 16 and 9, you got about 25 months PFS with the combination of a first and second-generation TKI upon progression. On the other hand, if you were to start with taletrectinib, you will get a PFS that's nearly 2 years longer than if you start with a first-gen and go to a second-gen. We think that's a very compelling case to make for both physicians and for patients. If you look at the second-line setting, taletrectinib has the highest overall response rate and median PFS of any ROS1 inhibitor in the second-line setting. So if you look at our ORR of 56%, that is significantly better than repotrectinib's 38%. And even if you look at Nuvalent's zidesamtinib, in crizotinib and entrectinib failures, the response rate is 53%. If you were to add in their 0% repotrectinib responses, their response rate overall falls to about 45%. Our ORR is 56%. If you look at the efficacy in G2032R, which is the most common resistance mutation, you can see that taletrectinib's 62% is similar to Nuvalent's 62% response rate and a little bit better than repotrectinib's 59%. But if you look at intracranial responses, which is very important because as patients progress with ROS1 non-small cell lung cancer, brain mets tend to be a significant development in their clinical history, and often is a limitation for their survival. Repotrectinib's intracranial response rate is 38%. Nuvalent's data so far, although it's very little data, shows about a 50% intracranial response rate, and taletrectinib is 66%. So again, there are no metrics in the second-line setting where there are any drugs that beat any of the metrics for taletrectinib. If you look at the adverse event profile, the most common adverse event for taletrectinib is elevation of liver function tests. This is a paper issue more than a clinical issue. There are no symptoms associated with that. Elevations of LFTs are very common among TKIs, and the most common way that physicians manage that is by dose interruption or dose reduction. If you look at the far left and the green bars, our dose interruption and dose reduction rates are still lower the repotrectinib or entrectinib. And in fact, if you look at the third column there, our discontinuation rate, which is the bottom line, is the lowest among all the TKIs in the ROS1 space. If you look at the far right, the dizziness rate of 65% for repotrectinib is a significant limitation for adoption of repotrectinib. And this is due to the fact that the affinity of repotrectinib for ROS1 is identical to its affinity for a target called NTRK-B, so the therapeutic index is one. And as a result of hitting NTRK-B, repotrectinib has significant CNS toxicity. Taletrectinib, on the other hand, hits ROS1 11 to 20x harder than it hits NTRK-B. So our therapeutic index is somewhere between 11 and 20. And because of that, our CNS toxicity is significantly lower, less than 1/3 of repotrectinib. And of that 21% dizziness, 90% of that is grade 1 and very short lived, generally about 2 days. If you look at the size of the ROS1 opportunity, we know that ROS1 cancers are about 2% of non-small cell lung cancers. So in the United States, that would be about 3,000 patients a year. And if you look at Europe, about 50% greater than that and China, of course, much larger than that. There are only 3 other drugs currently approved to treat ROS1 non-small cell lung cancer. Two, crizotinib and entrectinib, are first-generation TKIs that are no longer being actively promoted. And repotrectinib is the only second-generation TKI. So if you look at the 3,000 patient number and multiply that times the current repotrectinib selling price, which is about $350,000 a year, you get about $1 billion of potential sales in every year just on incidence. So if you look at the box at the bottom, in year 1, year 2, year 3, year 4, you should get about $1 billion of sales from new patients. But because the progression-free survival is nearly 4 years, that means most of your patients from year 1 will carry over to year 2, year 3, year 4. So because of revenue stacking, the theoretical maximum commercial opportunity approaches $4 billion a year by year 4. So then why have sales of ROS1 agents not reflected that? I think that's probably the biggest question that investors are looking at. And as we conducted a lot more research, we've learned quite a few things that I think shed some light on that. We know that repotrectinib sales are very poor, partly because the CNS toxicity is prohibitive for many patients and for physicians to use that. We also know that the first-generation TKIs are not being actively promoted. But the true answer actually is in how these patients are diagnosed and how they go on to other possible therapies. So when a patient is diagnosed with lung cancer and gets a biopsy, that biopsy today, given how many precision oncology medicines there are in lung cancer, that biopsy gets sent off for NGS testing. And it takes, in general, about 2 weeks to get that result back. But as you can imagine, a diagnosis of lung cancer is very unnerving for that patient, and patients are often very anxious and want to be on something and don't want to wait for an NGS test to know that they're being treated with something. And we have now found in a retrospective look back that a large number of patients elect to go on IO chemo, which is standard of care prior to the advent of precision oncology drugs, even though the PFS of IO chemo is in the range of 6 to 12 months. So they go on IO chemo. And when they get their NGS test back and they are found to be ROS1 positive, unfortunately, because of NCCN guidelines, if you look at on the left here, NCCN guidelines as of 2024, and look at the bottom red box, if you have a ROS1 rearrangement discovered while you're on another first-line systemic therapy, the recommendation is to complete that planned systemic therapy. So if you started IO chemo, the NCCN actually recommends that you actually complete that IO chemo or you can interrupt and give a ROS1 inhibitor. But if you look at the top of that box, the recommendation is to complete systemic therapy and then you can go on to other agents. And because, frankly, IO chemo is lucrative in clinical practice, that's the option that's selected. And so we believe that something like 80% of patients with ROS1 cancers are actually not getting a ROS1 therapy. In fact, from the look back that we've done with one of the largest health systems in the United States, we found about 20% of patients were getting a ROS1 therapy even if they had a ROS1 mutation, and we believe that 80% of them are getting IO chemo. And if you look at the very bottom below the red box, you can see that the contraindications to IO were only EGFR exon 19 deletion or L858 or ALK rearrangements, but doesn't mention ROS1. Everything changed 6 days ago on January 7 of this year, when the new NCCN guidelines were just published. If you now look at the green box, if you have a ROS1 rearrangement discovered, even after you've started first-line therapy, now the recommendation is to interrupt that therapy and start a ROS1 inhibitor. We believe that's going to completely change the market dynamics of this indication. And furthermore, if you look below the green box, if you have a ROS1 mutation, you can see in the green lettering that now IO chemo is actually contraindicated to be used. So whereas on the left in 2024 and earlier, when patients were put on IO chemo, not only was there no contraindication to IO in the ROS1 indication, but the recommendation was to complete IO chemo. And now if you look at the right, IO chemo is -- IO is now contraindicated in ROS1 patients, and the recommendation is to interrupt that therapy of IO and switch to a ROS1 inhibitor. We think this is a significant development. So then the real question in that market opportunity is what is the market share going to be? And how is that determined? So if you look at the precedent set in the ALK and EGFR markets on the left, if you look at alectinib and look at the PFS of alectinib, the second-generation ALK drug over crizotinib, the first-gen ALK drug, you can see that the PFS improved by 16 months, and the ORR to the right of that improved by 7 percentage points. But if you look at the far right, taletrectinib's PFS improvement over first-generation ROS1 TKIs isn't 16 months. It's 30 months. And if you look below that, the ORR improvement of taletrectinib over first gen isn't 7 percentage points, it's 20 percentage points. Even if you look at the second row on the left, when you look at generation 2.5 lorlatinib or Lorbrena over alectinib, while the PFS increased significantly, the ORR actually fell from 79% to 76%, and we know that lorlatinib has significant CNS toxicity, which has limited its uptake. If you now look at the bottom row in EGFR, when osimertinib or TAGRISSO showed an advantage over Tarceva, a PFS improvement by 9 months and a ORR improvement of 8 percentage points, you can see that that's still pales in comparison to the 10 percentage point improvement of taletrectinib even over second-generation repotrectinib and a 10-month improvement in PFS of taletrectinib over second-generation repotrectinib. So if you look at the ALK space in this slide, we have 2 drugs that are good but not great because neither of them are best-in-class in everything. So alectinib has far better tolerability but inferior PFS to lorlatinib. Lorlatinib has better PFS but pretty significant CNS toxicity. And together, those 2 drugs, even though no individual drug is best-in-class, has quadrupled the ALK market in the last 8 years. If you look at a clearer case of osimertinib in the EGFR space because osimertinib is the best drug in that indication, it has captured about 95% market share even though it increased PFS by 9 months over its nearest competitor and ORR by only 8%, both numbers that are exceeded by taletrectinib over its nearest competition, and osimertinib has tripled the EGFR market since its launch. So getting back to when I was talking about the market opportunity, we believe that of this nearly $4 billion a year market opportunity, given the fact that taletrectinib has a large advantage over its nearest competitors than any of the ALK inhibitors over their competitors or osimertinib over its competitor, we believe that we should take the vast majority of market share in this indication. And especially now with the new NCCN guidelines contra-indicating IO and recommending interruption of therapy with IO and switching to a ROS1 inhibitor, we think that, for the first time, inhibitors in the ROS1 space will be adopted. And we believe that we will be the preferred choice for adoption. Going on to our second program, safusidenib. This is a mutant IDH1 inhibitor. So what does mutant IDH1 do? So mutant IDH1, ultimately in this biochemical pathway, it creates a metabolite called 2-hydroxyglutarate or 2-HG. And 2-HG does 2 bad things in brain cancers. Number one, it impairs cellular differentiation and drives that tumor. And it also creates an immunosuppressive environment in that tumor, so it evades immune surveillance. If you look at safusidenib, which is a brain-penetrant IDH1 inhibitor, you can see that it significantly suppresses 2-HG levels. And if you look at the number of -- these are different examples, but up to 97% inhibition here pre or posttreatment with safusidenib, so robust inhibition of 2-HG. The mutant IDH1-mutant glioma market is a sizable opportunity, significantly larger than ROS1. There are about 13,000 to 18,000 patients right now living in the U.S. alone with IDH1-mutant glioma. About 2/3 of that are grade 2 or low grade. About 1/3 of that is grade 3 or higher or high grade. If you look at what just happened in May last year with Royalty Pharma's acquisition of a 15% royalty on Agios' vorasidenib, this is a drug that just got approved in low-grade glioma only. Royalty Pharma paid Agios $905 million for a 15% U.S.-only royalty, which monetizes vorasidenib at around $6 billion. And Royalty Pharma forecasts that peak U.S. sales for vorasidenib would be over $1 billion a year. So I think that demonstrates the opportunity of a mutant IDH1 inhibitor. Right now, safusidenib is the only other mutant IDH1 inhibitor in development for brain tumors. But if you look at vorasidenib's data in low-grade glioma on the right, in their Phase I trial, the response rate in low-grade glioma of vorasidenib was 18%. Below that, in their pivotal study called INDIGO, the response rate was about 11%. In our first presentation of our first Japanese trial so far, the response rate of safusidenib in low-grade glioma is 3x that, 33%. And we're going to be presenting more data on another trial later this year. If you look at the response rate of vorasidenib at high-grade glioma, you can see that little 0% to the left of the blue bar. The response rate of vorasidenib in high-grade glioma is 0%. And you look at the green bar, the response rate of safusidenib in high-grade glioma is 17%. So significantly better response rates than vorasidenib in both low-grade and high-grade glioma. But what's very notable is that if you look at the left in the green box, 1/3 of the 17% responses that we saw in high-grade glioma were complete responses. Complete response means the tumor has disappeared. And if you look at the top of the slide, one of those tumors was a grade 4 astrocytoma, which is a new nomenclature for GBM, glioblastoma multiforme, which, as you know, is a invariably lethal tumor and extremely aggressive. And that patient's tumor disappeared for 174 weeks on safusidenib. A second patient with another high-grade glioma, a grade 3 oligodendroglioma, his tumor also disappeared and it was gone at 95 weeks still. And we're not aware of any drugs in the glioma space that have had responses like this. So if you look at vorasidenib's overall response rate in high-grade glioma, you can see on the right, it's 0%, CR is 0%, PR is 0%. And we have a 17% response rate in high-grade glioma, of which 1/3 are complete responses. We think that's a very provocative and intriguing finding. And how do we explain it? Well, as I mentioned earlier, 2-HG is known to create a tumor immunosuppressed environment. And if you look at another drug, that mutant IDH1 inhibitor called ivosidenib, if you look at the far left, we know that CD8+ T cell infiltration or TILs in tumors are reduced by the immunosuppressive environment that you see in mutant IDH1. So if you look at the top bar, with vehicle treatment, you can see that there are relatively few TILs in that tumor specimen. But if you use ivosidenib, immune IDH1 inhibitor below that, you can see that you significantly improve the amount of TILs that are now able to enter that tumor because you reverse the immune suppression in that tumor microenvironment. So if you look at safusidenib, we did an interesting experiment where we actually did a xenograft study looking at immunodeficient mice compared to immunocompetent mice. These are mice on one hand that have either a suppressed immune system or they have a normal immune system, so something to activate. If you look at the upper left, you can see that safusidenib in immune-deficient mice did not have particularly robust effects against this tumor. But on the right, if you look at the green bar, which is the clinical dose of safusidenib compared to vehicle in the blue, now in immunocompetent mice where there is an immune system to activate, there's a dramatic improvement in survival over the vehicle treatment. Interestingly, if you look at the purple line, that's the effect of the clinical dose of vorasidenib. So vorasidenib did not augment the immune effects in this immune-competent model to provide a survival benefit, whereas safusidenib did. And interestingly, if you look at our clinical trials to date, of the top 8 adverse events seen in our safusidenib study, 5 of them are consistent with immune-related mechanisms of action. So skin hyperpigmentation, pruritus, alopecia, arthralgia, rash, these are all adverse events that are consistent with an immune augmentation. And interestingly, we don't see those side effects in vorasidenib. And if you look at the time to onset of response that we've seen with safusidenib, it's generally about 6 to 12 months, which again is consistent with IO agents. And if you look at the durability of response, especially in the high-grade patients that I described, them being 2 and 3 years out with complete responses, that also sounds immune-related. So we believe that safusidenib may be differentiated from vorasidenib. We know that in grade 2 and grade 3 gliomas, we're seeing higher response rates. But interestingly, we're seeing immune augmentation whereas we don't see that with vorasidenib in preclinical models. In our clinical adverse events, we see immune-type AEs, even though the vast majority is, as you can see, there are no grade 3 -- very few grade 3 AEs here. These are primarily grade 1 and 2 AEs. You can see that we are seeing AEs that are consistent with an immune MOA, and we don't see that with vorasidenib. So we think this is an extremely intriguing drug and we are now designing pivotal studies to take this forward. So in summary, we have a broad pipeline. Taletrectinib has a PDUFA date in June. We should have a commercial launch sometime midyear this year. Safusidenib is a very interesting mutant IDH1 inhibitor that we're in the process of designing clinical trials for. 1511 is our first drug-drug conjugate, which is in the clinic, and 868 is our BD2-selective BET inhibitor, for which we've just completed Phase I studies. We had about $550 million in cash as of our last Q so we are very well positioned for our launch, and we should be revenue generating this year. So in summary, I think we're very well positioned as a company and excited about this year. And with that, I'm happy to take any questions. Yes?

With the new NCCN guidelines, that would apply automatically to your drug [ as you do ] launch? Or do you have to do anything to get taletrectinib into those NCCN guidelines that would be part of the -- once they discover it?

We'll have to get -- once the drug is approved, we'll have to get that into the guidelines. But given the fact that the recommendation is clearly now to interrupt other therapy and move to a ROS1 therapy, I think that physicians will -- we're clearly a ROS1 inhibitor and, I would argue, a best-in-class ROS1 inhibitor. So while we'll formally get that into the NCCN guidelines, I think on day 1 of launch, physicians will be aware that the recommendation now is to go to a ROS1 inhibitor, specifically.

And when you -- you mentioned a couple of models. You're coming in late with superior PFS and superior response rates. What's kind of the model like breakthrough? The doctors have been seeing these other big companies for years as kind of in the pen. Now you've got a -- how do you kind of break through that, what they've been writing for some years?

So with the word breakthrough, first of all, taletrectinib is the only ROS1 inhibitor in development that's been given breakthrough therapy in both the first-line and the second-line setting. Nuvalent as such has been given BTD in the third-line setting only. So we do think this is a significant -- we have a significantly more robust data package that resulted in that BTD designation. And clearly, with the priority review, the FDA considers this drug a high priority. We think that the ROS1 space is finally mature enough with better options to change the paradigm of practice that's been kind of standard of care to date. I think that if you look at first-generation inhibitors, while they were certainly better than IO chemo, one could actually argue if the PFS of IO chemo is 6 to 12 months and you look at entrectinib at 16 months, one could argue that 16 months maybe is not so different than 12 months that you could get on the upper limit of IO chemo. And so one could argue that first generations, although better, did not represent a significant enough benefit over IO chemo to really compel its use. Repotrectinib does have a significant benefit, 18 month. Sorry, the 18 months of entrectinib has been doubled now to 36 months with repotrectinib. But the problem with repotrectinib is that when you have a drug that has 65% dizziness, when you have CNS toxicities that literally make you ataxic, you lose proprioception, where you have sometimes a hard time getting out of bed or driving or walking, those are really debilitating side effects. And given the fact that ROS1 patients tend to be much younger than the average lung cancer patient, these patients, the average age is 57, so they're still in their careers. They're still raising families. They have a lot of day-to-day activities, where they just can't tolerate the side effects of a drug like repotrectinib. So even though repotrectinib was a significant advance over first gens, it was so intolerable that it was difficult to be adopted. Finally, I think taletrectinib offers patients and physicians a really good choice because our tolerability, as I showed you by our discontinuation rate, we have the lowest discontinuation rate of any ROS1 TKI currently. Our -- even though we do have some dizziness, it's less than 1/3 of repotrectinib because we do hit some TRK-B. But most of that is grade 1 and lasts for a couple of days. So we think that -- and given the response rates of nearly 90% and a PFS almost approaching 4 years, as I mentioned, that's the most robust combination of ORR and PFS seen in any indication with any oncology agent. So we think that finally, a drug is available or will be available in June that could be really compelling for patients and physicians. And now with the NCCN guideline changes, whereas IO chemo was being used because of the need to address patients' anxiety and give them something to start with, and the fact that IO chemo was still probably used perhaps longer than it might or should have, I think that now with the change in guidelines and the specific guideline to not only interrupt therapy and start a ROS1 inhibitor, but the fact that IO is now contraindicated in ROS1 sets this market up for a completely new dynamic that I think will be very important and will drive adoption of taletrectinib in ways that we haven't seen previously with any other therapy in the ROS1 space. Other questions?

How are you preparing for a smooth commercial launch this summer?

So we're doing several things. First of all, my commercial team, some of the -- my head of -- my Chief Commercial Officer, Colleen Sjogren, was at -- with me at Medivation, where we had a very successful launch of XTANDI. Dan Thompson, our Head of Sales, was also with me at Medivation. So I have a very experienced team that I have a great deal of confidence in. And we have now hired all of our senior commercial leadership. We won't be bringing on the sales reps until much closer to June, but we are well positioned for that. We are in the process of starting an early access program, an EAP. So we think that -- we believe that taletrectinib offers potential benefits to patients that haven't been available in current therapies. And we think that for these patients who have what is actually a very aggressive and difficult-to-treat cancer because non-ROS1 therapies, as I mentioned, even IO chemo gives you a PFS of 6 to 12 months. We think that it's important for patients to get on, have access to this drug as soon as possible. So we are activating an EAP, early access program. And then we are clearly preparing for other things like market access, which is incredibly important and making sure that awareness is there. We're managing our publications. We're planning for congresses. So we think we're very well positioned for launch midyear.