Nuvation Bio Inc. ($NUVB)

Good afternoon, and welcome to the HCW BioConnect Conference. I'm Robert Burns, the Managing Director and Senior Biotech Analyst at H.C. Wainwright. And I'm joined today by David Hung and Philippe Sauvage, the CEO and CFO of Nuvation Bio, respectively. Gentlemen, thank you for joining us today.

Thanks for having us.

Thanks, Robert.

So for those who may be unfamiliar with Nuvation, give us a brief overview of the company and its pipeline.

So we have 3 programs right now. IBTROZI is a best-in-class ROS1 inhibitor for a type of non-small cell lung cancer. That drug was approved in July last year. We've had 3 quarters of launch, which has been very successful. We have a second asset called safusidenib. It's an IDH1 inhibitor for brain tumors. And we believe that data also will make it a best-in-class drug. That drug is in pivotal studies. And then we have a third platform, our Drug-Drug Conjugate platform which we're going to be providing an update on later this year.

Awesome. Yes, I can't wait to speak about the DDC platform. I'm a big fan of it. But it's coming up in almost a year since the approval of taletrectinib. And I know that you presented some updated pooled data from TRUST-I and TRUST-II. So talk to me a little bit about those updated results and how you see taletrectinib in the landscape and how it's differentiated relative to all its predecessors or any other compound that's in development for ROS1.

So ROS1 lung cancer is a particularly aggressive form of lung cancer. And the problem with that disease is that the standard of care used to be IO-chemo and the progression-free survival is about a year. First-generation ROS1 TKIs had a PFS of about 16 to 18 months, but a response rate in the 70% range. Repotrectinib was the first second-generation agent, and it improved the response rate from 70% to about 79%. But more importantly, the PFS doubled from about 1.5 years to 3 years. Our recent updated AACR showed a response rate now of 90%, so by far the highest response rate among the ROS1 TKIs. But most importantly, a duration of response now of 50 months. If you look at the number of times in the history of oncology that a drug has had a 90% response rate and a DOR of over 4 years, it actually not happened. The only drug with a PFS in our range is lorlatinib, but with a lower response rate. So there are no drugs today in oncology that have a combined 90% response rate and over 4-year DOR.

Yes. No, it's quite impressive. One of the things that I'm still trying to wrap my -- I've always been trying to wrap my head around this one. A lot of people will cite one of the other competitor ROS1 drugs that's in development from Nuvalent. First, I want to get your thoughts on NVL-520. Obviously, we got the second-line data. And how that sort of stacks up against taletrectinib?

Sure. Well, I think, first of all, I think the FDA's opinion is a lot more important than mine. So the FDA granted IBTROZI, taletrectinib breakthrough designation in the first and second-line setting, and the FDA granted Nuvalent's 520 breakthrough designation in the third-line setting. So that's the first important fact. The second thing is that IBTROZI was granted priority review. And we had a very, very fast approval. Nuvalent's drug was -- they applied for an RTOR that was denied and they did not get priority review. They actually were downgraded to a standard review. So I think that probably says a bit about what FDA's perspectives on the drug are. When you look at the Nuvalent data, they only have really second-line data. There are no published data with Nuvalent drug. But the second-line response rate is 51%, excluding any concomitant oncogenic drivers. Our second-line response rate is 56%, including all oncogenic drivers. So it makes a much more real world, more difficult to treat. But more importantly, for a disease that will get to the brain 85% of the time, Nuvalent's intracranial response rate in the second line is 45%, excluding oncogenic drivers. Our intracranial response rate is 21 percentage points higher than that, 66%, including all drivers. So right now, we don't see a single metric where Nuvalent drug can compare with the data we've generated even in the second line plus.

Yes. From my perspective, taletrectinib is the end all be all as of right now within ROS1 positive. So why the hell are we seeing such a market cap discrepancy between Nuvation and Nuvalent from your perspective? Because obviously, I think -- I think the market cap should be inverted.

They do have an ALK program. I think that people have high hopes for that program, but we think that we can't really explain the ROS1 discrepancy. And even the ALK program, I think it's going to be very difficult to beat lorlatinib. Lorlatinib has a 6-month PFS from the CROWN study, and they're going to have 7-year CROWN readout at ASCO. So I think that's going to be a really, really hard drug to beat. So I can't answer your question, but we are very pleased with the results we've generated. We think IBTROZI is clearly best-in-class. And our launch has gone extremely well. We think that's reflective of the profile of the drug.

Yes. I want to get your thoughts on this, too, because I know you're evaluating taletrectinib in the adjuvant setting, so I want to get your thoughts as to how you view that market opportunity in that particular setting because that's a pretty large market.

Yes. So moving it upstream to the adjuvant setting will increase the market size another 30% on top of what we already have. And what's really important is that we are actually the only ROS1 drug that's doing an adjuvant trial. The reason it's hard to do an adjuvant trial is that you have to have a drug that's incredibly well tolerated. And if you look at our top 6 adverse events, which are AST, ALT elevations, nausea, vomiting, diarrhea and dizziness. Out of 337 patients in our safety database, the number of patients who have discontinued our drug for any of those top 6 adverse events was 1 out of 337. So 0.3% discontinuation rate, which is why it's being used in the adjuvant setting because you have to have an incredibly well-tolerated drug. There are no other drugs that have attempted to go to the adjuvant setting. I think for -- in many cases, because their tolerability is more difficult. So I think that the adjuvant trial is another differentiator for IBTROZI because we'll be the only drug upstream, and that does increase the market opportunity another 30% beyond what we've already...

Yes. I know the NCCN recently updated its guidelines to include IBTROZI for ROS1-positive NSCLC patients that also have brain mets. So talk to me a little bit about how this provides a tailwind for IBTROZI sales and revenue projections.

Yes. So the NCCN Guidelines are important because prior to IBTROZI's really unique data, I think that there was still a lot of IO-chemo use in ROS1 lung cancer, even though IOs PFS, as I mentioned, is about a year. So up until 2024, though, the NCCN Guidelines said if you had ROS1 disease, you had 2 options for treatment. One would be IO-chemo, one would be a ROS1 agent. That all changed in the beginning of 2025. So about a year ago, the NCCN changed their guidelines and said that now we have ROS1 lung cancer, IO is not only not an option, it's actually contraindicated. And now you have to give a ROS an agent for ROS1 disease. And that just happened a year ago, which is why that market is still evolving as physicians change their practice. But that's a significant tailwind. But it just takes a while to change practice. So we're seeing that already. But the NCCN recently changed their guidance again recently, just about 1.5 months ago to now include IBTROZI in the CNS guidelines because of IBTROZI's really robust intracranial response rate, 66% is the highest intracranial response we've seen in ROS1 TKI so far. So we are now in the NCCN guidelines for CNS disease, and that's going to be another...

So with regard to modeling revenues for taletrectinib, can you discuss how investors should be thinking about their forecast for this year in terms of revenue stacking? And what do you forecast internally for peak taletrectinib sales? Give us a little thought about what that range, that window looks like for you guys.

So if you look at the theoretical market maximum, there's about 3,000 new cases of ROS1 lung cancer every year in the United States alone. So if you were to multiply 3,000 patients -- new patients a year, this is the first-line setting by the drug price, it's about $1 billion a year. But because the duration of response is now over 4 years, that means that $1 billion in the first year goes to the second year and the third and fourth year. And everyone who starts in the second year goes in the third, fourth, fifth and sixth year and goes on and on. So by the fourth year, you have about revenue stacking of about $4 billion. By DNA testing, that will increase to another 30% beyond that to about $5 billion with RNA testing because RNA is about 30% more sensitive than DNA. So because of that revenue stacking and because you really see that in the first-line setting, the percentage of first-line patients is critical. So if you look at our launch so far in 3 quarters, in our first quarter, we had 30% first-line patients. But in the second quarter, we had 40% first-line patients. And now in the third quarter, we've had over 50% first-line patients, yes. So that's the trend that's going to be important because as you see that first-line patient number grow, that's what contributes to the revenue stack. And we think that if that continues, the peak sales of the drug should be in the range of $4 billion to $5 billion if you capture that market. That market will need to be addressed by testing. In the academic centers, that's about 100%. But in community settings, it's not quite as high. So there is room for improvement in testing in the community setting, but we think the market opportunity is probably going to be about $5 billion a year with RNA testing.

To go back to your point about short-term modeling, Robert, I think what's really important to note is that quarter on to David's point, we've been increasing our first-line patient number by 35%. Q3, roughly 60%, Q4, roughly a bit more than 80, Q1, 110, so 35% quarter-on-quarter. And if we keep increasing by 35% because of the extreme long durability of treatment in the first line, we get to consensus sales for the year like roughly $130 million. If we manage to accelerate further, we beat that. So this is really the trend we are on. More and more first-line patients, and we know these patients will stay on drug for a very long time. The reason why the overall patient number quarter on can seem a little bit flattish is that because you have 2 phenomenons. You have first-line patients growing and you have those later-line patients going down. And they are going down because there are just not that many of them. We launched in a space which was incredibly dormant when nobody was promoting, not enough people were talking about this disease. So the number of patients that were eligible for second line was not that high, and we are completing that pool. But what's really important and encouraging for us and for the modeling is really first-line patient building up because that's where more and more patients are coming all the time, pretty further again.

Yes. No, that makes complete sense. Why don't we shift gears now to safusidenib. I really like this program a lot. But let's help frame what this program is and how it stacks up against some of the competitors such as vorasidenib.

Sure. So brain tumors that have IDH1 is a 4-piece pie. And the only drug approved today in IDH1 gliomas is vorasidenib. It's only approved in 1 of the 4 pieces of the pie. So the pie is 4 parts. Half of them are low grade, half of them are high grade. And of those, half of them are high risk, half of them are low risk. So vorasidenib is only approved in low-risk, low-grade gliomas. Their response rate to get them that approval was 11%. And at 2 years, the progression rate was 41%. In the same piece of the pie, safusidenib has a 44% response rate. So 4x vorasidenib is 11%. At 2 years, instead of 41% progression, we had 12%. So in the low-risk, low-grade part of the pie, we have data that we believe are hands down better than vorasidenib. In the other 3 parts of the pie, vorasidenib in the high-grade setting has a 0% response rate. Our response rate was 17%, but 1/3 of those responses were complete responses, which means the tumor disappears. We've had a glioblastoma multiforme that's been gone for 3.5 years, unheard of. We've had a high-grade oligodendroglioma gone for 2 years, unheard of. So we're doing 2 studies right now and planning a third. In a study called SIGMA, we're taking -- targeting 3 pieces of that 4-piece pie, everything that's not the vorasidenib piece. And that's a progression-free survival readout because it's a PFS, it takes a long time. It will read out in 2029. We're doing a second study targeting half of the high-grade pie, which is the grade 3 oligodendrogliomas. And because those patients all have measurable disease, the endpoint for that study is response rate. It's a very fast readout. That study will read out next year. And then for the last part of the pie, we're contemplating a trial to target patients who have failed -- if you look at Servier's numbers, they have treated over 5,000 people on vorasidenib. But I just mentioned a little bit ago that if you look at the Kaplan-Meier curve for vorasidenib, they have 23% progression at 1 year. So if they've treated 5,000 people, they started the launch 15 months ago, a significant number of those 5,000 patients will already start to fail now.

I mean you already got -- that's 1,000 patients, right?

So if we were to show responses in the post-vora setting, there are no approved agents post-vora. We think that's a potential accelerated approval. When we look at Chimerix, which got a brain drug approved based on 50 patients with an overall response rate and OJEMDA from Day One getting approved on 77 patients, with response rate. We think that a post Vora response rate anywhere north of 20% in 50 to 80 patients could be enough for potential approval.

Okay. So when are you thinking about initiating that sort of evaluation for that bucket of patients?

So we're actually working on that right now. So we are already started on the first 2, and we're finalizing the design on the piece.

So for the grade 3 oligodendroglioma obviously, that data is coming in 2027. That's an objective response rate readout. How are you thinking about -- is that something that you could then approach the FDA with? And what do you think the benchmark needs to be? What do you think you need to hit in that patient population?

So the response rate for chemotherapy, which is standard of care is single digits. So we think anything over 20% is approvable. If you look at Chimerix, they were approved on 50 patients with a response rate of 21%. So we think anything over 20% is approvable in somewhere between 50 to 80 patients. So both the Grade 3 Oligodendroglioma study as well as the post-vora study are both response rate trials that we think could be approved on somewhere between 50 to 80 patients.

Okay. What's the sort of time frame for that last bucket that mentioned. Obviously, you're starting to get the planning ready for that post-vora subpopulation. What that time line looks like then?

Well, because there are so many patients who've already gotten vora and are already failing it, we think that the enrollment of that study will be quite rapid. And then it's just looking for responses. So I think that if we were to see any responses in that population since there's nothing there at all as an alternative, we would go straight to FDA and ask them, what do you want to see in terms of size to make an approval study.

I don't currently include revenue projections for safusidenib. I'm not sure a lot of any other analysts do. But I'm curious to get your sense as to the market opportunity here in each of those 3 buckets out of those 4, can you talk to me a little bit about the market opportunity there?

So the reason the market opportunity for IDH1 gliomas may very well be unprecedented because there's almost no indications in oncology that have survival that long. Even high-grade patients with IDH1 live up to 6-plus years. So it's unlike high-grade GBM that's not IDH1, they don't live very long. But IDH1 tumors live much longer. So even high-grade astrocytomas can live 6-plus years. If you look at oligodendroglioma, they can live 13, 14, 15 years. If you look about -- talk about low-grade glioma, they can live 20-plus years. So you're talking about revenue stacking that could be literally 4 to 5x the IBTROZI duration of response, which would be literally unprecedented.

Yes. I think when you put it in that context, it goes back to my point earlier, I don't know how Nuvalent's point [ gap ] because what it is and yours is less, especially with the revenue stacking potentials here.

We feel very comfortable where we are. We have a ton of cash. We have $535 million. That's all more than we need to get to profitability. We've got a commercial asset that ramp is going well. We've got a great pipeline. So we feel very comfortable.

Yes. Why don't we shift gears to your DDC? I've always been fascinated by this platform. I know the story of how you came up with it, David. I love that story. But I know that you discontinued one of the earlier versions of -- one of the earlier assets out of this platform. Talk to me about the learnings that you got from that asset. And what sort of uptake can we expect later this year with regards to the DDC platform?

So ADCs are antibody drug conjugates. They work. They're -- some of the best drugs in the world are ADCs, but they're really big. So we started Nuvation Bio based on a concept of Drug-Drug Conjugates, which are much, much smaller than ADCs, but have bispecific -- we had taken a molecule called 1511 in the clinic. And while we did see responses with it, before we invest $100 million to $150 million in Phase III study, we want to take for a drug that we think is the best shot we have before making that kind of investment. So we thought there was -- we learned a lot in that program and thought there are ways to improve it. So we actually have now made those changes, and we will be announcing a new program later this year.

Okay. When you announced this program, is this going to be -- you're going to start the Phase I relatively soon? Or is this -- it's still preclinical?

We haven't said yet.

Well, I'm excited to learn what it's going to be. I guess with the limited time that we have left, talk to me a little bit about the catalysts for this year. And then last question to you, Philippe, talk to me about the war chest, what the operational runway provides.

I can start with the war chest it's easy. So as David said, we have a little bit more than $530 million. As we've said multiple times, that will be enough to drive us to profitability. So we are not looking for anything else right now from that perspective. And then we're feeling very, very confident about the level of cash. In terms of catalysts, I mean, obviously, continuous performance of IBTROZI, we're incredibly encouraged by the ramp-up, especially this move towards first-line patients, plus our recruitment on safu trials, which we think is going to be rapid in many of them. I think that's the main point and DDC at the end of the year.

Awesome. Well, gentlemen, thank you so much for joining us today. I really appreciate it.

Thanks so much.

Thanks, Robert.