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

My name is Cory Kasimov, one of the senior biotech analysts here at Evercore ISI. And it's my pleasure to host our next discussion with Nuvation Bio and the company's CEO, David Hung; and CFO, Philippe Sauvage. So thank you both for being here today. Really appreciate it.

And to begin, really hard to believe we're already in December. But given the timing, I'd love to start the discussion by asking you to sort of reflect back on 2025 and what's been clearly a very big year for you. But talk about some of the company's accomplishments, both the obvious ones and maybe some of the more nuanced ones as well.

I think the most -- probably the most transformative event of '25 was our acquisition of AnHeart and the -- getting the FDA approval and launching IBTROZI. I think those have really changed the company's profile. We're now a commercial stage company. Our first full quarter of sales was very robust. And then the recent data we just presented recently at Jefferies at on the safusidenib low-grade data, I think, was also a big accomplishment, showing the PFS that we demonstrated and the response rate, I think, was -- makes that a really exciting program.

Great. So let's not surprisingly start with IBTROZI, the recently approved ROS1 inhibitor in lung cancer. Maybe quickly elaborate or just elaborate to the extent you think is necessary in the data observed from the TRUST-I and II trials and how it differentiates the product within the landscape?

So I think a couple of things are notable about this disease. First of all, ROS1 is a very aggressive form of lung cancer. So patients tend to present with brain metastases more than 1/3 of the time and progress in the brain more than 50% of the time. So you need to intervene as early as possible and intracranial response rate is really important. So if you look at our data compared to other earlier generation TKIs, crizotinib and entrectinib's response rates are about 70%, PFS about 1.5 years. Repotrectinib's response rate is about almost 80% and PFS is double to 36 months in the first-line setting. What we just announced relatively recently is that -- our latest data cut show now our response rate around 90% and a PFS now at 40 months -- or duration of response and PFS at 50 months, sorry, 50 months, so it's more than 4 years. And that's really not been seen very often in all of oncology. The only drug that we are aware of with a PFS longer than that is lorlatinib in the ALK space, but their response rate is lower at 76%. So if you look at our combination of response rate and duration of response, it's really one of the highest ever seen with any drug in any cancer. So we think that makes it a really, really exciting drug for patients and for physicians. If you look at the -- even the second-line response rates at 56% systemic response rate and an intracranial response rate of 66%, that again is at the top of the heap. So we think that from an efficacy standpoint, that drug has not been matched by any other agents in the space. If you look at tolerability, we think the profile is also very compelling. If you look at our top 6 adverse events, LFT elevations, nausea, vomiting, diarrhea, dizziness, even if you add up all those 6 and look at the number of patients who discontinued drug for any of those top 6 adverse events out of 337 patients, it was 1 patient. So a discontinuation rate of 0.3% for the top 6 adverse events. And that is important because the less discontinuations and the longer that patients are on drug, you really start to be able to invoke this revenue stacking that we expect to see with this drug. So with a 50-month duration of response and a low dropout rate, you could expect those revenues to stack to in excess of $4 billion a year just by DNA testing, and we think over $5 billion a year with RNA testing. So we think that makes it a very exciting opportunity.

Yes, absolutely. So we're going to get into a bunch of the things you just mentioned. Maybe just kind of the initial start this product is off to. So you recently posted very strong numbers for Q3, I believe it's 204 patient starts. Can you just kind of talk about the evolution of demand as you kind of get into year-end and going into next year? And how much of a patient bolus was involved in this encouraging start?

So first of all, just to put this in context, if you look at repotrectinib's first full quarter of sales, they had 34 patient starts. We had 204. So 6x the repo start number. And what was striking about that 204 starts is that we had no patients from the clinical trial. And in the first few weeks, we had, I think, 6 patients from the EAP. So really virtually no bolus of patients at all. These are just completely new patients. So I think that speaks to the fact that the market really is there, and there are a lot of patients that need a drug like this. So we're excited about that. I think that we anticipate growth going forward. We -- most of our patient starts were in the academic centers. Community centers tend to be a little slower to adopt, but we do expect most of the growth going forward to be from the community centers because the academic centers are all very aware of ROS1. And I think that's where most of our starts have been, but we think community will come online in the next few quarters, and we think that will be a significant growth area.

Okay. I want to ask about the NCCN guidelines. can obviously have a pretty impactful element adds to a product launch. And IBTROZI recently added. Like how do you -- how are you anticipating this impacts the market?

So I think that was a very fortuitous event. We certainly didn't anticipate that. On January 7 of this year, the NCCN changed their guidelines, where previously the '24 guidelines said you could -- you had 2 choices for ROS1. You could either finish your IO chemo or give a ROS1 agent. On January 7, they changed that. So now the first option is eliminated. Not only can you not give IO chemo, it's actually contraindicated. So you have to give a ROS1 agent. And in fact, if you are on an IO chemo regimen, you need to stop that and start a ROS1 regimen. So that was -- that's a great development for us. I think another tailwind. We do think that there has been a lot of IO chemo use in the community. And if you look at the progression-free survival of IO chemo, it's 6 to 12 months. As I said, our DOR is 50 months. So it's really, really hard to justify giving anything other than a ROS1 agent.

What goes...

Even before we were on the market, the guidelines already started to change behaviors, like we saw an uptake of TKI in ROS1 by about 20% even before we launch. So we think this tailwind has already proven it's going to happen, right? It's going to transform behavior in the right way for patients.

What drove it from a first-line recommendation to a contraindication?

So I think that when you -- if you look at the first-generation TKIs, as I mentioned, if you look at entrectinib's PFS, it was 16 months. IO chemo is 6 to 12 months. One could argue that if you're at the upper limit of IO chemo 12 months, 12 months or 16 months isn't that different. So one could argue that perhaps that's still okay. Now with 50 months and repotrectinib is 36 months, 36 months is 20 months longer than entrectinib's PFS. It's very hard to now justify that. So I think that the NCCN guidance were really changed because of repotrectinib's PFS. We hadn't even gotten approval at that time. So I think because repotrectinib showed 20 months more PFS than entrectinib, it was hard to justify anything other than a ROS1 agent for a ROS1 disease.

Right. Okay. All right. So obviously, you have very, very strong data. You've put up a good start from a numbers point of view. The guidelines are helping you out. So the answer to this question is kind of obvious, but I'm curious about the evolution of physician feedback. And now that docs -- like they can, I'm sure, appreciate all of everything you mentioned, but now that they have like hands-on experience, how are you seeing the feedback from the field evolve?

So the feedback has been really great. There was a great article by Geoff Liu, one of our top prescribers, and he talks about how he believes IBTROZI is now the standard of care. And I believe his feelings are echoed by quite a few KOLs we've spoken to, and it's reflected in the 204 scripts we got in the first quarter. So the feedback we're getting is really, really positive. It's hard to argue with a 50-month DOR and 90% response rate. So I think that's clear. But I think what's been surprising to a lot of KOLs is the tolerability. I think that just having not as much experience because our first trial was done in China and the second one was done in the United States. I think there are still a lot of academic KOLs who didn't have hands-on experience with taletrectinib. And now that they have, as I mentioned, the discontinuation rates for this drug are so low that I don't think people expected that level of tolerability with the kind of efficacy we're seeing. So I think overall, people have been very pleasantly surprised by the profile of the drug.

Right. Okay. And then you talked about sort of the DNA to RNA shift and how that will impact stacking over time. Can you maybe speak a little bit more on DNA-based testing to RNA-based testing, that expansion of the opportunity?

Yes. So because ROS1 is a fusion, RNA is more effective at finding that fusion than DNA, about 30% more sensitive. So -- right now, there are about 3,000 patients a year in the U.S. alone by DNA testing. That should increase to about 4,000 patients a year by RNA testing. So if you multiply 4,000x the current price of IBTROZI, $350,000 a year, that's well over $1 billion a year. Now stack that for more than 4 years, you can see that by the fifth year, you're getting above $5 billion a year in sales.