Nuvation Bio Inc. ($NUVB)

Hello, and welcome to Nuvation Bio's First Quarter 2026 Financial Results and Corporate Update Call. Today's call is being recorded, and a replay will be available on the company's website. [Operator Instructions] Now I'd like to turn the call over to JR DeVita, Vice President of Corporate Development and Investor Relations at Nuvation Bio. Please go ahead.

Thank you, and good afternoon, everyone. Earlier today, we issued a press release summarizing our financial results for the quarter ending March 31, 2026, and provided a business update. The press release is available on the Investors section of our website at nuvation.com. Today's call includes forward-looking statements, including statements about the therapeutic and commercial potential of IBTROZI and safusidenib, our plans for safusidenib development and future data presentations, the components of our anticipated product revenue, expected milestone payments and our cash runway. Because such statements deal with future events and are subject to many risks and uncertainties, actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our quarterly report on Form 10-Q, which we filed with the U.S. Securities and Exchange Commission today. Joining me on today's call are our Founder, President and Chief Executive Officer, Dr. David Hung; our Chief Commercial Officer, Colleen Sjogren; and our Chief Financial Officer, Philippe Sauvage. Now, I'll turn the call over to Dr. David Hung. David, please go ahead.

Thanks, JR. Good afternoon, everyone, and thank you all for joining us. Today, I'm excited to discuss the progress we have made across our business in the first quarter. Following the line-agnostic FDA approval of IBTROZI in June 2025, we entered 2026 focused on continuing to build a successful commercial launch in ROS1-positive non-small cell lung cancer, with specific focus on educating physicians, supporting patients and generating new clinical evidence that reinforces IBTROZI's differentiated profile. Overall, we are very pleased with our continued execution, highlighted by strong demand for IBTROZI and our ability to significantly increase the percentage of new patients treated in the first-line setting. We successfully treated approximately 200 new patients with IBTROZI in the first quarter, which makes 3 consecutive quarters of about 200 new patient starts, bringing our total to over 600 since launch. We see a growing trend of more new patients coming from the first-line setting and in turn, a lower percentage of patients coming from the third-line setting or later. In fact, for the first time since launch, more than half of the new patients who started IBTROZI in the quarter were TKI naive. Given the changing dynamics of patient mix and moving from later line to the first-line setting and considering the significantly increased durability of IBTROZI in earlier versus later line settings, we are just beginning to see revenue stocking this quarter, as Philippe will shortly discuss. This revenue dynamic is the most important metric for the launch going forward. Therefore, at some point in the future, we will focus on revenue and no longer report new patient starts. This has meaningful implications for the long-term opportunity for our medicine, especially now given that based on a recent new analysis presented at AACR, IBTROZI has now extended its median duration of response to 50 months in TKI-naive patients in the pooled results from the pivotal TRUST studies. When patients are treated earlier in their disease course, they are often in a better position to realize increased benefit from a therapy with durable efficacy and generally favorable tolerability. Over time, we believe this can build a larger, longer duration base of active patients on IBTROZI and support more substantial revenue growth. Since launch, our discontinuations have been driven primarily by disease progression in later-line patients. This is expected in any oncology launch as these patients have already progressed through other approved therapies. From the data that we see, discontinuations in earlier line patients or for adverse events are consistent with clinical trial results that remain relatively low. As a reminder, and as detailed in IBTROZI's prescribing information, 6.5% of the 337 patients with advanced ROS1-positive NSCLC in our pivotal Trust studies discontinued therapy due to any adverse reaction. And as we have previously presented, only one of these patients or 0.3% discontinued treatment due to any of the 6 most common adverse events, including liver enzyme elevations, diarrhea, nausea, vomiting or dizziness. The feedback we continue to receive from both key opinion leaders and our sales organization has been highly consistent. Physicians are impressed with IBTROZI's clinical profile, citing the durability and tolerability and our real-world experience is giving physicians increased confidence to both keep patients on therapy longer and to choose IBTROZI when considering a preferred first-line treatment option. This response further supports our belief in both consensus net revenue estimates for IBTROZI in 2026 and its long-term potential. We are also encouraged by the addition of IBTROZI to the latest CNS NCCN guidelines as a systemic therapy option for ROS1-positive NSCLC patients with brain metastases. We believe this is an important recognition of IBTROZI's demonstrated intracranial activity and further supports its differentiated position in the ROS1 treatment landscape. Turning to our recent abstracts and publications. We were thrilled to present updated pooled results from the August 2025 data cutoff of the TRUST-I and TRUST-II studies at the American Association of Clinical Research Congress, or AACR. These updated data continue to reinforce the strength of IBTROZI's profile. In TKI-naive patients in TRUST-I, as recently published in the Journal of Clinical Oncology, median duration of response and median progression-free survival have both now increased to approximately 50 months or more than 4 years. As presented at AACR in TKI pretreated patients, the median duration of response was nearly 20 months in TRUST-II and the overall survival in the pool TKI pretreated population showed a median of nearly 30 months, which is unprecedented in this space. And with this longer follow-up, IBTROZI continues to demonstrate a manageable and consistent safety profile, including lower rates of neurologic adverse events and no new safety signals. We believe these durability data matter not only clinically but commercially. Drugs that combine deep and durable efficacy with a favorable tolerability profile are well positioned to become the therapy of choice for TKI-naive patients, and that is exactly the trend we are seeing in our launch. With approximately 3 years of follow-up in the pooled analysis and more than 4 years of follow-up in TRUST-I, we believe these data further supports IBTROZI as an effective, durable and tolerable treatment option for patients living with advanced ROS1-positive NSCLC. At AACR, we also presented preclinical data, which continues to build on our broader scientific understanding of IBTROZI's differentiated profile. As I discussed on our last earnings call, IBTROZI is designed to achieve deep and durable inhibition of ROS1, while maintaining measured activity against TRKb. Our presentation showed 2 important points. First, taletrectinib has nearly complete coverage of ROS1 fusions at clinically relevant concentrations and is effective against ROS1 resistance mutations. Second, taletrectinib has partial yet biologically meaningful inhibition of TRKb, while being sufficiently balanced to avoid significant CNS-related adverse events as seen in our clinical trials and real-world experience. Of note, in the same experiment, a TRKb sparing agent failed to control tumor migration and markers of invasion and metastases, which were well controlled by taletrectinib. These data support the concept that some degree of TRKb inhibition may be required to inhibit systemic progression, prevent the migration of lung cancer cells and protect against metastases to the brain. This analysis showed that our medicine may have a mechanistic profile, which we believe leads to a potential impact on tumor invasiveness and metastatic behavior in patients while limiting neurologic adverse events. This balanced approach and ability to prevent resistance could ultimately play an important role in the long-term durable control of ROS1-positive lung cancer as demonstrated in IBTROZI's median progression-free survival of over 4 years. At ASCO in June, we will be presenting additional data from our TRUST program on patient-reported outcomes and our ongoing TRUST-IV study in the adjuvant setting. Turning to safusidenib. We remain very excited about the potential of this program and the opportunity it represents for patients with IDH1 mutant glioma. Beyond its potential clinical importance, we believe safusidenib could address a broad segment of the glioma market and therefore, represent a meaningful long-term value opportunity for the company. Safusidenib is currently being evaluated in the ongoing Phase III SIGMA study for the maintenance treatment of patients with IDH1 mutant atrocytoma who have high-risk features following standard of care and in a nonpivotal cohort with Grade 3 oligodendroglioma following surgery. In Phase I and Phase II single-arm studies, safusidenib has shown very encouraging efficacy signals, including durable responses and prolonged progression-free survival across both low and high-grade IDH1 mutant gliomas. We think about the glioma market as a pie with 4 parts: low-grade, low risk, low-grade high risk, high-grade low risk and high-grade high-risk tumors. Today, the only approved glioma drug, vorasidenib, is approved in the low-grade, low-risk glioma setting and prior data have shown limited activity in enhancing our high-risk, high-grade tumors. In contrast, safusidenib has shown significant activity in clinical studies across all 4 subgroups of IDH1 mutant glioma. The safusidenib SIGMA pivotal trial will target 3 of the 4 pieces of the glioma pie, enrolling high-grade high-risk, high-grade low-risk and low-grade high-risk IDH1 mutant glioma patients. We're also exploring potential studies to further develop safusidenib in the final piece of the pie, low-grade low-risk glioma, and we'll provide an update on our plans later this year. I'd also like to highlight that a November 2025 publication in neuro-oncology summarized the Phase II study of safusidenib patients with chemotherapy and radiotherapy naive Grade 2 IDH1 mutant gliomas as of a March 10, 2023 data cutoff. Strikingly, as of February 2026, 12 of the 27 patients evaluated in this study remained on treatment with a median follow-up of more than 5 years. We believe these data continue to support the potential of safusidenib in patient populations with significant unmet need and limited or no FDA-approved targeted treatment options. Importantly, in April, we acquired exclusive rights to safusidenib in Japan from our partner, Daiichi Sankyo. With that agreement now complete, we plan to expand the pivotal Phase III SIGMA study into Japan, continue to advance the global development program and pursue presentation and publication of longer-term Phase II data, so the scientific community remains current on these findings. Finally, we remain on track to provide an update on our drug-drug conjugate platform by the end of the year. Overall, the first quarter confirmed important points for our 2026 outlook. We are seeing solid new patient demand, improving mix towards first-line use and continued confirmation of IBTROZI's encouraging efficacy and tolerability profile in the real world. We believe these trends position IBTROZI well for long-term success while we continue to advance a broader pipeline designed to address significant patient needs and create additional future value. With that, I'll turn the call over to Colleen.

Thank you, David, and hello, everyone. We continue to see strong momentum in the launch of IBTROZI, and we are particularly encouraged by what we have accomplished in just 3 quarters, especially when viewed against relevant targeted therapy launch analogs. Based on our internal data, we have generated more new patient starts than the prior ROS1 launches combined over the same time period. We believe this early success reflects the compelling clinical profile of IBTROZI and the focused execution of our commercial team. In addition, it represents a strong foundation for long-term value creation. As David mentioned, new patient starts remained robust at approximately 200 for the third quarter in a row, and this included a greater proportion of patients initiating treatment in the first-line setting. Importantly, our internal data sources indicate that for the first time, over half of new patient starts in the quarter were TKI naive compared to approximately 30% in the first full quarter following launch. This continued shift from later line to frontline use is one of the clearest indicators of the strength of the launch and is in line with what we would expect based on typical uptake trends with new oncology agents. This gives us confidence in IBTROZI's long-term trajectory because these patients respond at a higher rate, have the potential to remain on therapy for years and contribute to a more durable active patient base over time. This dynamic is also important in understanding the discontinuation patterns we have observed as we are encouraged by how IBTROZI's clinical profile has translated to the commercial setting. Discontinuations continue to be concentrated among later-line patients, which is expected given the more advanced disease in this population and exposure to multiple prior therapies. As we discussed last quarter, most discontinuations are driven by disease progression in later-line patients rather than tolerability. And this dynamic can introduce some variability in near-term revenue even when new patient demand is steady. Importantly, adverse event-related discontinuations remain low and in line with what we observed in clinical trials, reinforcing the strong overall clinical profile of IBTROZI, including its favorable tolerability. Taken together, these observations, along with feedback from both patients and physicians, reinforce our view that IBTROZI is well positioned to serve patients across the ROS1 lung cancer treatment landscape and has not changed our view of the potential for IBTROZI in this setting. This increasing strength in patient mix and positive real-world feedback on IBTROZI's treatment profile is matched by expanding adoption across both academic and community settings. We are especially encouraged by the pace of uptake we are seeing, particularly given that ROS1 is a rare disease and the prescriber base is relatively broad. Our commercial efforts continue to translate into strong physician awareness, which we believe is a meaningful indicator of successful launch execution. Based on our most recent market research, aided awareness of IBTROZI among target physicians has reached 97%, underscoring the breadth of our commercial reach and the growing visibility of IBTROZI in the market. We understand that academic and community customers have different needs, and we have been deliberate in aligning our commercial strategy with the distinct value drivers for each setting. As a result, 100% of the top 50 historical TKI accounts in the country have prescribed IBTROZI. Our broad account adoption is another important indicator of launch strength. And when paired with favorable placement on pathways and formularies, it reinforces our belief that institutions recognize the differentiated clinical profile of IBTROZI. We believe the launch progress we have seen to date also reflects the strength of a team that knows how to win in targeted oncology. We are seeing our efforts translate into meaningful account and physician traction. The result and appreciation for the durability that IBTROZI has to offer and the openness to partnering with Nuvation Bio. Taken together, we believe this positions us well to continue building momentum and capture the full ROS1 market over time. Lastly, we believe there is meaningful opportunity to increase the number of ROS1-positive patients who are diagnosed and treated with a ROS1 TKI today. Publications and data from the field suggest there should be approximately 3,000 patients with advanced ROS1-positive non-small cell lung cancer diagnosed annually in the U.S. based on DNA testing. As the field shifts to using RNA and DNA-based testing together, which may detect an additional 30% of fusions, the annual addressable population could expand to approximately 4,000 patients. Unfortunately, although effective testing is better in most academic centers, it is currently significantly lower in parts of the community, including below 50% in some centers. To combat this, we have implemented several initiatives to partner with and educate the community on the importance of testing for oncogenic drivers. We strongly believe all patients should have the opportunity to benefit from the prolonged durability and high response rates IBTROZI has shown in the first-line setting, consistent with the NCCN guidelines issued last year. Improving patient identification is the right thing to do for patients and will be a key driver of long-term value for Nuvation Bio. Overall, we are encouraged by the level of demand we are seeing, the shift towards earlier line use and the strength of the launch execution to date. The medical community recognizes that IBTROZI's long durability gives physicians an important tool and offers patients the potential for long-lasting benefit with a generally favorable safety profile so they can stay on therapy for years. With an experienced commercial team, a clear strategy and disciplined execution across the launch, we believe we are well positioned to continue building momentum and support the long-term success of IBTROZI. Now I'll turn it over to Philippe.

Thanks, Colleen, and good afternoon, everyone. For detailed first quarter 2026 financials, please refer to our earnings press release, which is available on our website. Now, I will highlight a few key points from the quarter. In the first quarter, we generated $83.2 million in total revenue, including $18.5 million in IBTROZI net U.S. product revenue. This represents 18% growth in net product revenue from the prior quarter, which was not only driven by yet another quarter of about 200 new patient starts, but importantly, from a growing population of active patients remaining on IBTROZI due to increasing frontline use. As you can see on this slide, the number of patients starting IBTROZI in the last 3 quarters has been consistent. However, due to the percentage of first-line patients increasing from approximately 30% in the first quarter last year to approximately 40% in the fourth quarter last year to now more than 50%, net product revenue has grown from $7.7 million to $15.7 million to now $18.5 million, in spite of an expected uptick in gross to net. We expect this trend to continue and also expect the number of new patient starts to increase as more U.S. physicians become aware of IBTROZI and testing rates in the community continue to improve. As previously mentioned, our long-term success will be driven by the exceptional duration of response of IBTROZI in the first-line setting, and we are pleased that a growing number of TKI-naive patients have started on medicines since the early months of our launch. This trend, combined with our ability to grow revenue despite later line patients dropping off IBTROZI, demonstrate the potential impact of revenue stacking going forward. Lastly, as I noted, while we did see an expected uptick in gross to net discount at the start of the year, we still expect our gross to net expansion to gradually stabilize from here. In addition to product revenue, we recognized $64.7 million in collaboration and license revenue in the quarter, including an upfront payment of nearly $60 million from Eisai pursuant to our partnership, which was announced in January. We also received approximately $1.7 million in royalty payments from our partnerships in Japan and China, both of which are exceeding initial expectations on a new patient starts and net revenue basis. As a reminder, taletrectinib was listed in China's National Reimbursement Drug List, or NRDL, in January. And since then, sales from Innovent's launch have increased rapidly. We believe this significant commercial uptake is due to a greater appreciation for effective setting in China and also believe this rate of adoption will translate to the U.S. market as patient identification improves over time. We continue to invest in our business and our programs, resulting in total operating expenses of $73.5 million for the quarter. R&D expenses were $35 million, driven by increased investment in the SIGMA and TRUST clinical studies and SG&A expenses were $38.3 million, primarily driven by commercialization activities. Turning to the balance sheet. We ended the quarter with $533.7 million in cash, cash equivalents and marketable securities. In addition, $50 million remains available under our existing term loan agreement with Sagard Healthcare Partners through June 30. We also expect to receive a milestone payment of approximately $30 million for Eisai upon the approval of IBTROZI in Europe in the first half of 2027. Lastly, on the business development front, we announced our partnership with Eisai in January to commercialize IBTROZI in Europe and other territories outside of China and Japan, which we discussed on our previous earnings call. In April, we also announced an agreement with Daiichi Sankyo to acquire rights to safusidenib in Japan. This transaction made sense to us from a strategic and financial perspective as it allowed us to fully secure global rights to safusidenib, including ownership of all clinical data and rights to future publications and data generation without changing our expected cash run rate. Acquiring full global rights will reinforce our speed of execution and now allow us to expand our commercial reach to Japan. I'd like to thank Daiichi Sankyo for their efforts in developing tofacitinib and for their confidence in us to take the program forward toward potential global regulatory approvals. Overall, our capital position continues to provide us with the flexibility to support IBTROZI launch, advance our pipeline and evaluate additional strategic opportunities, all while maintaining a disciplined approach to spending. We continue to believe we are well positioned to execute on our priorities without the need for additional external financing given our current revenue trajectory and operating plan. I'll now turn it back to David for closing remarks.

Thanks, Philippe. As we move through 2026, we remain focused on disciplined execution, continuing to build on the momentum of the launch, advancing our clinical and scientific understanding of IBTROZI and progressing our broader pipeline. I want to thank our team for their continued commitment and our investigators, partners, shareholders and most importantly, patients and their families for their ongoing support. I'll now ask the operator to open the line for questions.

[Operator Instructions] Your first question comes from the line of Farzin Haque with Jefferies.

Congrats on the progress. Can you comment on whether the growing first-line patients are coming from the academic or the community settings? And then what specific educational field force initiatives are being implemented to accelerate adoption in the high-volume community?

Farzin, it's Colleen. I'll take that one. So you may have heard me mention that, first of all, we're very encouraged. We have about 97% awareness right now across -- and this is uniform adoption IBTROZI across both academic and community. And most importantly, when we look at historically, the top ROS1 accounts, which we have a historical list of about 50 of those accounts, 100% of them, in fact, have prescribed. So we're seeing broad adoption across all channels, academic, IDN and community. And really, we believe that, that just speaks to -- directly to the oncologists that are driven by the clinical evidence IBTROZI's trust data. It's so compelling that in each channel, we're seeing really, really good uptake and adoption. And on your second question, you asked about specific initiatives. Are you talking about adoption there? Do you want me to go in more of that? Which kind of initiatives are you looking for me to answer?

Right. Adoption and basically use over the chemo IO agents.

Yes. I would say that one of the things, Farzin, that we really are focused on is testing rates. And this is a real challenge, and I'll say that we're not dismissive of it, but we're also not passive about this. And the gap between really academic and community testing is very well documented. And frankly, in some of the community centers, we're seeing testing rates that still remain below 50%. So in our opinion, that's unacceptable from a patient care standpoint and it represents just a really meaningful community opportunity. So what really gives us confidence is that we do have a targeted strategy in place. So we're partnering directly with community oncology practices -- we're investing in a lot of educational initiatives, and we're also directly working with testing platforms to make sure that, in fact, comprehensive molecular testing is the standard of care and not the exception. So we believe in this market. We believe in the size of the market. We do believe and have acknowledged that we have an issue with testing that we're addressing directly.

Farzin, this is David. Just to add a little more precision to the question you asked. The -- getting first-line patients really depends on them being diagnosed. And as Colleen mentioned, while we have great awareness in both community and academic centers, the testing rates are higher currently in academic centers and community centers. And therefore, the diagnosis of new patients are right now higher in academic centers because that's where more testing is being done. But we've already seen significant improvement in multiple community centers, and we are very heartened by that improvement in testing rates and the awareness that there's a drug that's highly efficacious, durable and well tolerated to use when those diagnoses are made. So we're pretty excited about this change that we've seen in first-line percentage, as we mentioned, 20% or 30% in the first quarter after launch to about 40% now to over 50% that's a pretty exciting growth trajectory for us because we think that's going to allow us to meet our consensus guidelines for the year if that were to continue.

Your next question comes from the line of Leonid Timashev with RBC Capital Markets.

I wanted to follow up on that a little bit. Just maybe trying to better understand the dynamic of the new patient starts. I mean it seems like it's been 200 for the past 3 quarters. And you've laid out a lot of reasons why there should be growing awareness, better testing. But I guess I'm just trying to better understand why that hasn't pulled through into more new patient starts yet, for example, why you aren't seeing why the proportion is changing towards first line, but you're not necessarily also seeing more of the later line patients coming on as well? I mean, whether there's a bottleneck somewhere, if this is something that could be helped by expanding the sales force and hitting more prescribers? And just if you can talk about the dynamic, that would be great.

Yes. It's a great question, but the main reason is because remember, in the early quarters of our launch, we're getting mainly late-line patients, third line, fourth line, fifth line patients. Those patients can discontinue therapy in literally a month or 2. And when you see very late-line patients, they drop out very quickly, unfortunately, to pursue other therapies or they unfortunately pass away. So the reason that you see right now what appears to be a plateau, it's not. It's just that the late-line patients are dropping out very quickly. We're getting new line patients, but those are incidents. Remember, that the presence pool has already been diagnosed. So when they enter the study, they're much easier to find because they've already had a ROS1 diagnosed, they've already been on therapy, but they don't stay on very long and they drop off very quickly. The new patients are newly diagnosed. I mean, the first-line patients have to be newly diagnosed, and that's an incidence pool, which obviously takes longer time. So when you see what's happening now, the fact that we're getting from 30% to 40% to now over 50% first line, we are finding those first-line patients. But the third, fourth, fifth line patients are dropping off rapidly. That should stabilize because eventually, we're going to deplete that whole pool. In fact, we think we've already captured a significant amount of the late-line patients. So now that's why we're really focused on first line. That's all that really matters given the fact that we now have a PFS or DOR of more than 4 years, 15 months, which is there's no drug even within a year of that. We think that, that's going to lead to revenue stacking that will really start to kick in, and we're just seeing that this year. So even in spite of a quarter with roughly the same number of new patient starts and in spite of an increase in GTN, revenue still went up 18%. So we're just starting to see the beginnings of that. But we think that if we were just to keep the same growth rate in first-line patients that we've seen in the last -- from Q3 to Q4, Q4 to Q1, we think that we should make our consensus for the year comfortably.

Your next question comes from the line of Kaveri Pohlman with Clear Street.

So maybe a question on the repeat prescription. I believe any details you can provide on -- the previous call mentioned the academic was 70% versus 30% distribution for academic versus community. But today's call also mentioned that 100% of top 50 accounts have prescribed IBTROZI, which I assume are mostly community-based. So any insight you can provide there? And if you can also tell us how this NCCN and CNS guideline inclusion helps you get more of the first-line adoption? And then my follow-up question is a quick on the previous comments you made regarding lower testing rates in the community setting. So are these rates simply lower because of lack of awareness regarding the importance of testing or there could be some other hurdles that could take longer period for changes to happen?

Kaveri, it's Colleen. So what I can tell you, a couple of things that I think we need to keep in mind. So when we look at across these top historical accounts, and we're looking at 100% of those 50 accounts have now written, we see a much greater, I would say, usage by community, IDN and now academic. And you're right, in the first -- when we first launched, we saw real fast uptake in the academics. Now we're seeing just as much strength in the uptake across other channels and especially in the community. And one of the things that we've seen when we first launched, obviously, the academic oncologists right? They're driven by the clinical evidence and IBTROZI's trust data speaks to that directly. And we look now at the community oncologists and what they need, right? They need the practical support, the reimbursement pathways, patient support programs and the confidence of their patients can tolerate the therapy over time. They're now seeing all of that. They're seeing the surround sound of Nuvation Connect. They're seeing reimbursement pathways that have now taken effect. They're seeing our patient support program. So we believe that, that's directly linked now to the channel of community really increasing their uptake and identifying patients. The other thing you asked about was the testing. And one thing I want to say is that we know that our accounts are increasingly prioritizing the flagging of these mutation statuses. And as RNA-based testing continues to gain ground alongside with using DNA, we know that more ROS1-positive patients are starting to be identified each month and every year. So we're laying that groundwork in terms of education, and we know that's now positioning IBTROZI to benefit as these identification rates improve. So we're seeing the educational part of our efforts really taking traction in the community. I will also say we're educating on effective testing rates, making sure that our oncologists are waiting until they get all the oncogenic driver testing back to make a treatment decision. That's what we talk about influencing effective testing rates.

And Kaveri, let me add one more thing to add to your question about the NCCN CNS guidelines. The reason that's so important is actually it turns out that one of the most widely used previous TKIs ROS1 is crizotinib. Crizotinib doesn't even get to the brain. Now we have guidelines from the NCCN that specifically call out the CNS profile of IBTROZI and that contrasts even more starkly against crizotinib's complete absence of brain penetration. So as you know, 36% of ROS1 begins in the brain at first diagnosis and then another 50% will progress in the brain upon first progression. So it literally would be medical malpractice to get the drug that is not CNS penetrant. And not only is IBTROZI highly CNS penetrant. If you look at our intracranial response rate, even in the second-line setting, even in the most difficult to treat patients, our intracranial response rate is 66%, which is so far the highest recorded intracranial response rate of any TKI in the pretreated space. And that's independent of our unmatched durability and response in the first-line setting. So we think that the new NCCN CNS guidelines make it even more imperative that doctors need to give patients the right therapy, which is IBTROZI.

And Kaveri, just to add on that, to put an explanation point on that point by David, we've already received early feedback from HCPs that this will only enhance IBTROZI's profile and really impact their treatment decision.

Your next question comes from the line of Gregory Renza with Truist Securities.

Congrats on the progress and results today. David, maybe I'll just stay with IBTROZI and add another question on this topic. A competitor recently presented some data suggesting activity in patients previously treated with taletrectinib is there. I'm just curious, how would you expect treating physicians to interpret such results? Would you see this influencing sequencing decisions or the positioning with IBTROZI as compared to competing or potential agents in the market?

Yes, I think it actually does have some implications. So first of all, we are delighted that new treatment options becoming available for patients as they fail therapy. But if you look at IBTROZI's efficacy with a response rate of 90% and now a PFS of more than 5 -- more than 4 years, almost 50 months, there is nothing close to it in the first-line space. Repotrectinib's PFS is 36 months. So you're still talking about almost 1.5 years difference. If you look at the second-line setting, now with a DOR approaching at 20 months and again, a response rate in second line of 56% without excluding any oncogenic drivers and an intracranial response rate of 66%, again, without excluding any oncogenic drivers, there are no age today that can claim any numbers that match those. So when a competitor has data in the third-line setting showing responses after IBTROZI fails in the second-line setting, we're delighted that patients have another option in the third-line setting. And I will refresh your memory I think the competitor you're referring to actually got breakthrough designation in the third-line setting while IBTROZI got breakthrough designation in the first and second-line setting. We think things are playing out the way FDA initially thought them, which is that IBTROZI will be used in the first and second-line setting. And we think other agents are needed in the third-line setting, and we welcome that because that's what patients need.

Your next question comes from the line of Mayank Mamtani with B. Riley.

And maybe just to build on the prior point of IBTROZI is being now considered relative to crizotinib and maybe the entrenched position could be protected with additional market entrant. How much is the development of new CNS mets relevant to the clinicians you talk to? And then if you are able to comment also on the dose interruption reductions that are tracking in the frontline patients versus what you may have seen in the later lines? And then I have a follow-up.

Yes. So that's a great question. So ROS1 non-small cell lung cancer is a really aggressive disease, not only because the tumors grow aggressively, but because where they go. So more than 1/3 of the time, they already are in the brain when you even make your first diagnosis. And in 50% of the cases on progression, the brain is the first site of tumor metastasis. That makes it imperative that you get CNS coverage as quickly as possible with an agent that has proven and long-term efficacy. As I said, the intracranial response rate of IBTROZI in the second-line setting is 66%. And our duration of response in the second-line setting is 20 months with the now overall survival of almost 3 years. So in the second-line setting, there are no agents today that have published any data that can close to that. In the first-line setting, it's completely universal difference. There's no agent remotely within IBTROZI 90% response rate and 50-month PFS. So I think CNS is important. And because CNS is so important, that's the reason that IBTROZI is being adopted so quickly, especially in the first-line setting as clinicians know they need an agent that covers the brain. They need to see proven data that this drug has durability and our 15-month durability is unprecedented. So that's the reason that we're getting such adoption in the first-line setting. And also still significant use in the second-line setting. We -- as I said, we probably captured the majority of patients already in the second-line plus setting. So I think that's I think that would be expected, and that's what we're seeing. Now to get on to your question about discontinuations and interruptions, the great thing about this drug is it's pretty well tolerated. And as we said on the call script, we are not seeing anything new that we haven't seen in the clinical trial. And that's really important because the thing you always worry about with any drug is that real-world experience parallel your clinical trial experience. Oftentimes, in the clinical trial experience, when you're under the careful supervision of the principal investigators and they may control those patients better. So sometimes in the real-world study, you don't see metrics that exactly parallel what you would hope for based on a clinical trial. In our case, we have seen no new developments. While we are really encouraged by tolerability IBTROZI's pretty much exactly what we saw in the clinical trials. Our dose reduction interruption rates are pretty much what we saw in clinical trials. Our efficacy is too early to see now how long these patients will last. We expect them to last 50 months in the first-line setting, 20 months in the second-line setting, just like reflecting clinical trials. So overall, the great news for us is no surprises. We feel very confident in what we're seeing or what we're hearing from physicians echoes that. I think that the uptake that we've seen and the growth in the first-line setting we're seeing are all consistent with the fact that our data in the real-world setting are as good as they were in the clinical trial setting.

Very helpful, David. And then just on a go-forward basis, I understand new patient adds not a very relevant metric. What should we focus on? Should we get more updates on the proportion of first-line patients? Would you have some information on durability? I understand gross to net, you have some thoughts. Just help us think about the modeling beyond 2026. And I understand everyone's focused on 2026, but I just wanted to get some color on how you're thinking about metrics on a go-forward basis.

Yes. We are very excited by the dynamics there. And I think what we've said again and again is that we see a profile which is very similar to our clinical trial, which means that patients, especially first-line patients will stay on drug for a very long time. That's why we shared some more information on this because we think this is really the driver of our long-term potential. And if you look at our story, there in the past 2 quarters, I mean, we grew this first-line patient number by 35% from Q3 to Q4. We grew again by 35%, roughly Q1 to Q4. And if we keep increasing at that rate, we will hit consensus. And if we do better than that, if we accelerate further, we will beat consensus. So everything there is really happening as we thought it would, which is really, really encouraging. And to the question that I heard earlier about the stability you can see, well, it's because you have like 2 different mechanisms going on, right? You have those first-line patients increasing again and again, as I said, 35% from Q3 to Q4, 35% again Q4 to Q1, and we expect it to keep increasing over time. And at the same time, we have this pool of late-line patients where, unfortunately, many of them will not stay on drug. But this pool is limited. And that's why this is as a total, relatively stable. But looking ahead and looking forward, really what is important for us is really this buildup of first line patients, and we'll keep talking about that because we know that's where is the promise of IBTROZI, incredible tolerability, incredible durability and all of that together to help patients stay on for a long time and to help ourselves progress quarter after quarter. So that's really what we see. We think that's going to drive ourselves forward further. And to your point about GTN, I think, again, we hinted about that in our past quarter. Q1, typically, because of our price increase, you will have a rise of GTN driven by the fact that Medicaid and 340B price are stable, as you know, so higher than inflation, and we were that drives the GTN a little bit higher. You also see the launch of the 340B use gradually progress a little bit until it stabilized -- that's typically in the oncology launch. So for all of these reasons, our GTN has raised a little bit by a few percent this quarter. We still believe it's going to stabilize, and this is nothing abnormal there. Again, as I said, no surprise, no surprise on our GTN, no surprise in our patients, no surprise in our OpEx. Everything is happening exactly like we said.

Your next question comes from the line of Yaron Werber with TD Cowen.

Just a couple of questions. When -- if we're looking at number of patients, let's say, that you started each quarter, like the 30 and then 40 and let's say, greater than 50% who are new, it looks like really an increasing number of patients now are going to be sort of in the naive setting, right, or treatment naive patients. And so can you give us maybe a sense kind of what percentage of those now are treatment naive as a percentage of the total? Just some thoughts. And then gross to net, should we sort of assume that you're going to be in the high 20s, and that's kind of where you're going to stabilize this year, Philippe? Or I think it was kind of in the 25% last quarter.

Yes. So on your first question, yes, that's exactly what you're saying, increase of first-line patients quarter after quarter, and we expect this first-line patients to come on drug to keep increasing over the year. As I said, if we stay on the same rhythm of plus 35%, roughly every quarter, that takes us to consensus. If we go beyond that, that will help us to beat consensus. So that's the dynamic here. To your point about patients on drug today, you know we have limitations in our data. So it's kind of hard to answer to that question. But you can run your own estimate based on our first-line patients, a very good tolerability profile plus what we said about late line versus first line. To the point about -- I think your second question was about GTN, yes. It's pretty mechanical, if you think about it. So you have an increase of 340B. And we -- and if you look at the CPI-U, the index rate for inflation between June, the time we launched in December, you can see it's pretty much aligned. So for all our 340B and Medicaid patients, this basically drive our gross to net higher by the amount of our price increase, that makes sense to you. So if you think about that, yes, we will be around 30%, and we expect to stabilize around that level as gradually inflation start to ease on our inflation penalty, if that makes sense. And I can elaborate if it's not clear to you. So that's where we are. And we think, again, it's very much aligned with what we said in the previous quarter, really no surprise there.

Your next question comes from the line of Boris Peaker with Jones Trading.

Just want to understand how is the duration of therapy in some of these first-line patients compare to your expectation based on the clinical trial results?

So I mean, it's still early now. We -- they're clearly staying on way longer because that's why our revenues are going up, and that's why our -- as we would expect, but we expect them to be on for an average of over four years. So we won't know until we get to the fourth year, but I think we feel very confident that if you look at the discontinuations, as Colleen said earlier, almost all of our discontinuations are from late line patients, not early line patients, just as we would expect.

And as we mentioned earlier, the side effect profile is exactly aligned. So there is no reason for first-line patients to stop drug.

Got it. And with the recently addition to NCCN guidelines, is there can you see an inflection with that? Like can you see how much that really benefited? Or is that kind of just in the background and it's not something that could be noticed?

I think that it's just -- there's always a lag in this stuff. So the first NCCN change was a year ago, and it took a while for practices to actually realize that IO is actually contraindicated in this disease. We're just starting to see some practice shifts there. That's a year after that guideline came out. So the CNS guidelines are great. The awareness is already pretty high that RAS1 is a brain trophic disease. So I think the guidelines -- the impact of these guidelines might be appreciated a little bit earlier than the original ones IO -- with IO is a pretty ingrained practice in many centers, but everyone knows that when you get a brain met, you're not going to do well. So I think I'm guessing that the NCCN guidelines will be appreciated maybe a little sooner. But it's all good direction for us because everything the NCCN is saying is basically taken frozen.

Great. And lastly, do you expect to issue annual sales guidance sometime this year?

I think we're getting to the point where we now have hundreds of patients under our belt. And when we see the growth the way we're seeing it, I think we would probably be willing to issue guidance at some point in the future.

Your final question comes from the line of Silvan Tuerkcan with Citizens Bank.

This is Josh on for Silvan. Congrats on the results here. It seems like we have gotten a lot of color on the CNS efficacy. But maybe could we get the team's perspective on the comparison of taletrectinib and CNS maybe to emerging clinical candidates rather than what's already been approved. What do we know here and maybe not to be too repetitive, but how does the CNS NCCN guideline reinforce the benefit here?

Well, I mean, the nearest competitor that's not yet approved has so far an intracranial response rate of 45%, all excluding oncogenic drivers. Ours is 21 percentage points higher than that at 66% without excluding oncogenic drivers. That's all I can say about the CNS data that are available today for competitors. So if you look at our intracranial response rate compared to the approved TKIs, Itri is far higher than that. But even compared to up-and-coming competitors, as I said, there's no one close so far on intracranial response rate in the second-line setting.

Your next question comes from the line of Michael Yee with UBS.ss

This is Matt on for Mike. I just wanted to ask a quick one on the IDH1 program. Could you just remind us what the standard of care is there in that high-grade glioma setting? And then speak to what PFS would be clinically meaningful, both in the broader population and then also on that ORR readout that could come maybe next year in a subset of patients, what would a good result look like? And what could the next steps be in that smaller subset? And just trying to think through any kind of nearer-term milestones for the IDH1 program.

So the SIGMA trial is a placebo-controlled study. So given the fact that, there's absolutely nothing approved for the management of high-grade glioma, the management of high-grade glioma today is third for tumor debulking radiation and chemo. And as you know, the patients don't do well when they have multiple surgeries. You can't just keep the tumors in the brain, chemo and radiation are just not effective with very, very low response rate. So our -- for a response rate, we would be looking at anything north of 20%. We think that anything north of 20% for an indication that has absolutely no other therapies would be certainly a response where we go to FDA and have a discussion about approval pathway. So we feel pretty good about that, especially given our -- the data that we've presented so far. For Grade 3 oligodendroglioma, those are less aggressive than the grade 4 astrocytoma, which are GBM. So we would expect response rates to be even higher. because it's a little bit of an easier indication to treat. And again, I would say anything north of 20%, we would think the FDA would be pretty interested given the fact there's nothing even in Grade 3 oligodendroglioma. So we think anything in that range would be potentially an approvable pathway.

There are no further questions at this time. I will now turn the call back to David for closing remarks.

Well, I just wanted to thank you all for your support. We're really excited about what we are seeing with the IBTROZI launch, and it's gone pretty much what we had hoped, and we will continue to -- we can't wait for our next quarter because we'd love to report our next quarter earnings, and we hope that you'll follow up with great enthusiasm. And thank you very much.

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