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

Hello, everyone. Welcome to the Day 2 of the Cantor Healthcare Conference. My name is Li Watsek, a biotech analyst here at Cantor. It's my great pleasure to welcome our next company, Nuvation Bio, for a fireside chat. And with me today is David, CEO; and Philippe, CFO. Thank you for joining me. Maybe, David, I will turn it over to you to give us sort of a 10,000-foot view of the story before we get into the pipeline.

Great. Thanks, Li. Thanks for having us. So Nuvation Bio, I think we're on really solid footing. We launched IBTROZI, our ROS1 inhibitor, a little over a year ago. I think that with now all competitors' data out in the open, I think it's pretty clear that IBTROZI is the best drug in class. If you look at our efficacy, 90% response rate, 50-month duration of response in the first-line setting, that's actually never been matched by any drug in any indication in oncology. So I think we're clearly the best ROS1 drug. Our tolerability, again, with an overall discontinuation rate of 6.5%, discontinuations for any of our top 6 adverse events at 1 in 337 patients, again, extremely tolerable drug. The reason that this opportunity is so unique and underappreciated is that very few drugs in oncology have durations of response that are even close to 50 months. Because of the 50-month duration of response, that leads to revenue stacking that you generally just don't see. So even though the epidemiology tells you that there are 3,000 ROS1 patients newly diagnosed in the first-line setting every year, if we were just to multiply that times the current drug price, that would be $1 billion a year. And for every year thereafter up to 4-plus years, you would expect an additional $1 billion, so $2 billion in the second year, $3 billion in the third year, $4 billion in the fourth year. So that's where you can see the revenue stacking leads to a significant number. And that's with the epidemiology based on DNA testing, which is 30% less sensitive than RNA testing. So when RNA testing becomes standard of care, you can even see that potential $4 billion market exceed $5 billion. So where are we with relation to that? As I said, 3,000 new patients a year by DNA testing, that's 250 patients per month. If you look at the number of first-line patients in our first quarter of launch, it was 70. Second quarter, it was 80. Third quarter, it was 100. Fourth quarter, it was 140. So if you just look at where we are right now at 140, that's almost 50 patients a month. The market is 250 patients per month by the epidemiology. So after a year, we're already 1/4 -- 1/5 of the way to capturing the entire pie. And we think that with other new changes like the guidelines, NCCN Guidelines changing to now contraindicate IO, that will further increase adoption of ROS1 agents. And then with a general increase in testing that will further increase the uptake of drugs like IBTROZI. So I think we're doing extremely well on that launch, and we look forward to updating you with every quarter that we announce our sales for the quarter. Safusidenib is our IDH1 drug for gliomas. I would say that, that program is really exciting because we just recently announced 3-year follow-up data with that program. And if you look at our only competitor in the space, which is vorasidenib, if you look at safusidenib's non-progression rate of 79% at 3 years, so only 21% progression at 3 years, we would say that, that is -- that's just not been observed before in gliomas. Our response rate at 3 years has increased from 44% to 52%, again, not observed before. So I would say that program looks extremely promising. We're going after all 4 pieces of the glioma pie, so low-risk low-grade, high-risk low-grade, low-risk high-grade and high-risk high-grade. We have 4 clinical trials that are targeting all 4 pieces of those -- of that pie. The SYGMA trial is a PFS study that won't read out to 2029. We have a study against placebo that will also be a PFS trial that will read out in 2029. But we have 2 other trials that have response rate endpoints that could read out significantly sooner. One is the Grade 3 oligodendroglioma trial. Because these patients all have measurable disease, we will be using response rate as the primary endpoint. If we look at Chimerix, which got their drug approved in DIPG on the basis of 11 responses out of 50 patients, we think something around a 20% response rate is potentially approvable. And then we're doing another study, which is in post-vora failures. These are patients who failed vorasidenib, and if we show responses with safusidenib in those patients, we think that's really exciting because now these patients have no other treatment options today, and we believe that would allow us to capture the entire vorasidenib market. Again, Servier has treated more than 6,000 patients since launch. We know that the progression rate for vorasidenib at 1 year is about 23%. So about 1/4 of those should have failed by now. And we need -- we think we need to get something like 50 patients and show roughly 10 responses to potentially have an approvable package. So we're pretty excited about that. Our drug-drug conjugate platform is our 2 small-molecule conjugate platform, which is kind of like an ADC without the A. We're using 2 small-molecule drugs. We're going to announce an update on that in the second half of the year. From a cash standpoint, we have $700 million on the balance sheet. So we're very comfortable, far more than we need to get to profitability. And with that, I think we're feeling very comfortable where we are.

Yes. That's a great overview, David.

Let's start with the IBTROZI launch. As you mentioned in your Q2, you had a very nice frontline patient mix in terms of percentage. So it's about 85%, right, in new patient starts. How should we think about the long-term growth trajectory from here as you guys shift more towards the front line?

Yes. So that's a great question. So we -- as I mentioned, we started with 30% of our patients in frontline to 40%, now up 85% in the frontline setting. And with that, we've still only captured right now 20% of the theoretical 3,000 patients per year in the frontline setting. So where else are we going to get it from? First of all, we're already the market leader among our competitors, but there's still more to be had. There's still some repo sales. There's still some crizotinib sales. We hope to eventually cannibalize all of that. Number two, in spite of NCCN guidelines, we know that especially in some community centers, IO chemo is still being used, in some centers as much as 40%. So we think that as we -- as NCCN guidelines kick in and people start to really realize there's a many year difference in survival between IO chemo and a ROS1 agent, we think that we will start to convert that IO chemo use to ROS1 use, and that's going to also potentially even double our sales. And then on top of that, we know testing rates, while they're high in the academic centers, in some community centers, it can be as low as 30% to 40%. So we have a potential to even double sales based on this improvement of testing rates in the community. So we're at 50 patients now. If we were to double from IO chemo, that would take us to 100. If we were to double that from testing that, it could take us to 200. And that would be closer to the 250 theoretical patients that are massively available in the frontline setting. So we are going to continue to just educate physicians on the vast difference in outcome between IO chemo and our ROS1 agent. We'll continue to take market share, we believe, from current ROS1 -- other current ROS1 agents, and testing in general has increased because many precision oncology tests now have turned lung cancer into one of the most treatable cancers on the planet if you know you have one of these mutations. Another point I want to raise is that if you look at the selpercatinib RET study with LIBRETTO-432 study, that hazard ratio of 0.17 is one of the most robust hazard ratios ever seen in this adjuvant study, which means that you're going to need to look for RET-mutated lung cancer earlier because you can reduce the risk of death 83%. So that's going to be a rising tide that lifts all boats. When you look -- you don't look just for RET, you look for everything. So things like that will also move the testing far more forward and increase overall testing. So we think that those things will continue to accelerate our discovery of first-line patients and treatment of those patients.

And then on the point of physician guidance, I know it takes some time to change physician behavior as to some physicians using IO chemos. But beyond just education, what other things can you guys do to sort of facilitate that transition into using a ROS1 agent? And is it more of a problem in the community or the academic...

It's definitely more of an issue in the community. I think most academic centers are pretty comfortable using precision oncology agents for precision mutations. I think that in many community centers, many of them still give a lot of IO chemo, and that's kind of their default thinking. I do think that we're not leaving it entirely to the hands of the physicians. We're educating them, but we also have very close connections with patient advocacy groups. We're making sure that our digital marketing campaign also reaches patients broadly because this is a rare disease, and digital marketing is extremely efficient in reaching a broad swath of patients. So we're not just targeting physicians. We're targeting physicians. We're targeting advocacy groups. We're targeting patients. And so I think all of that together has already resulted in us capturing already 20% of the maximum ROS1 market in just a year, and we think that will continue to grow.

And we're also targeting organizations themselves. We have partnership with multiple organizations around the U.S. to just look at what they do, what is their practice, how does that evolve, how many ROS1 patients are they treating with the TKI. And we just show to them the gap between where they are and where they should be from a patient pool perspective. And this is extremely powerful because nobody can challenge the fact it's better to give a targeted agent than IO chemo. So those organizations, especially in the community, have been consolidating, aggregating, and there are organizations that are really trying to push best practices into practices everywhere. And those partnerships have been extremely useful to change behavior. In some cases, we've doubled the number of patients. In some cases, we've tripled the number of patients. So this is really also another way to say, "Hey, look at what's going on in your organization compared to what is best for patients and how can we help you to reach that kind of level".

Okay. And then we know GSK is going to perhaps get their frontline label for their ROS1 agent. It's already approved in second line plus. How do you think this market share dynamic will play out next year once you get the frontline label?

So I think that we saw the Jideytro label last month. And I think that it's pretty clear that it wasn't what was anticipated. So we really had always touted Jideytro as a CNS-sparing ROS1 agent. Not only was it not CNS-sparing, but they actually received a CNS warnings and precautions, which makes now IBTROZI the only ROS1 agent without a CNS warnings or precautions. If you look at the incidence of Jideytro CNS toxicity, it was 25% already even though their follow-up period is 1/4 of ours. And we know that with longer follow-up, you get more adverse events. So at already 25% with just 1/4 of our follow-up, we would expect that to increase significantly, potentially even up to repo or beyond repo. So we don't think that's going to make it easy to use. On top of that, other adverse events that weren't even anticipated, 22% to 25% incidence of pancreatitis, 38% peripheral edema, these are things that make a drug very cumbersome. Our most common adverse event is liver function test abnormalities, but that's invisible to patients. They don't even know they have it. But when you have CNS tox and swelling and pancreatitis, you know you have something wrong. So we just don't see -- we think that's going to make it difficult in the -- especially in the frontline setting to be on drug for a long time. And given the fact that we are now the only ROS1 agent without a CNS warnings or precautions, we think that gives us now a huge advantage on the safety side. And with our unprecedented efficacy, I would say that we don't think we actually have a close competitor. If you look at just the efficacy in the second-line setting with Jideytro, 48% intracranial response rate versus our 66% response rate, again, not close. So I think that we're feeling extremely comfortable with where we are. We expect to take market share continually away from our competitors. We -- our biggest competitor is actually IO chemo and testing. So that's where we're really focused. But I think compared to other competitors, I think we are extremely strongly positioned.

Yes. And we also haven't seen any long-term data...

That's correct. There's no significant frontline data presented for it -- for that agent. So I think we -- and I don't know how you'd get 90% response rate and 50-month DOR. It's going to be very, very challenging to even match that much of a speed. So I think we're very comfortable with where IBTROZI's profile sits. And we think that right now, the way we're going to get to the 100% is to change prescription behavior with IO chemo and increase testing, but that's where we need to be. But we're already 1/5 of the way there after just a year.

I mean, right now, you have a pretty nice 2-year head start. What else can you do to accelerate the entrenchment in the frontline setting?

I think the biggest thing we can do to enhance entrenchment is just to give physicians experience with the drug. And there was one criticism with AnHeart is that they didn't have a lot of U.S. experience. Now, we've had a year of U.S. experience and physicians who use IBTROZI love IBTROZI. So I would say that the thing that has entrenched IBTROZI use more than anything else is physician experience with it. And so we've now seen many patients -- many physicians represcribe IBTROZI because of their good experience with the drug. And I think that, that will only continue to accelerate given the fact that if you look at other alternative options, there isn't anything close.

Maybe switching to safusidenib, your IDH1 inhibitor for glioma. I think this is a very compelling opportunity. What are investors missing about saf?

I don't think they're really missing anything necessarily except that when you look at 2 of our trials reading out in 2029, it's just hard to get a lot of investors excited about such a far-term readout. So I think -- I'm not sure they're missing it. I think they just -- it doesn't attract their attention because those are farther away. What they might not appreciate is how quickly the other 2 trials could potentially read out. So those are response rate trials. We've already said that we're going to have 40 patients enrolled in the Grade 3 oligo study by next year. And what we don't know is how long it will take to see responses. Our shortest responses have been as soon as 2 weeks. Our later response could take a year or longer. So we don't know of those 40 patients how many responses we'll see by next year, but it's conceivable that we'll see enough to be of interest to FDA to start our discussions. The other thing that we are going -- we've already discussed with FDA, and we'll continue to pursue is when you have a tumor that's growing, its slope is positive. When you look at a response, by definition, slope is negative, it's tumor shrinking. But there's a lot of difference between a positive slope and a formal RANO response. We would argue that any time a tumor flattens out its growth curve or goes down, even if it hasn't had a formal 50% reduction in volume, that's a benefit to a patient. To my knowledge as an oncologist, no one ever died of a tumor that hasn't grown. So we would argue that there is real clinical benefit to slowing down the growth rate even before a patient hits a formal response, which is a relatively arbitrary criteria. If they're not growing their tumor or even shrinking it slightly, it's hard to argue that's not a benefit to a patient. In fact, what's interesting, if you look at our 3-year data, 79% of our patients have not progressed. But many of those patients at 3 years weren't responders. They just didn't progress, but they're still alive and still on drug. So it really supports my point that you don't necessarily have to have a response to have clinical benefit. So one thing we're going to talk to FDA about is once we get some response rate data, we're going to present our tumor growth rate data and show how tumor growth rate changes can precede response by a long time, months or even years. And we believe that there's still real clinical utility of that. And what's also interesting is that vorasidenib has also presented tumor growth rate data as well, showing that change in tumor growth rate often -- and by definition, precede response. You can't go from a positive slope to a response without change your tumor growth rate. By definition, it has to change. So the 2 drugs that are being developed in IDH1 glioma, both have shown TGR changes. We think that, that's a very interesting endpoint, and we would love to see if FDA would consider adopting that endpoint as an approval endpoint. But we'll have that discussion and see what happens.

Okay. And how do you explain that safu shows better results in the higher-grade glioma than vora? Do you think it's just...

Well, first of all, I would say safu shows better results in high and low-grade. So in the initial INDIGO set, the response rate for vorasidenib was 11%. In our initial data set with Daiichi, it was 44%. So it was a pretty big difference. In the INDIGO study, vora's response rate in high grade was 0%. Ours in our first study was 17%. So I would say we were better in both high grade and low grade. These 2 drugs are not equivalent. While they both are IDH1 inhibitors, if you look at our adverse events compared to vora's, 5 of our top 7 adverse events are immune adverse events, like vitiligo, rash, arthralgia. Vorasidenib has none of those effects. Their primary AE is liver function test abnormalities. We believe that safusidenib does have an immune component independent of its IDH1 activity. And we've actually started to characterize that in our preclinical work. So we don't think the drugs are equivalent. When we look at the time to onset of response with safu, it sometimes takes months or even a year. When we get responses, they can last for multiple years. We have GBM that has disappeared for 3.5 years. It looks like an IO agent. So we think that safusidenib in addition to being an IDH1 inhibitor is also potentially a novel IO agent. And we don't think these drugs are in any way equivalent, and we believe the clinical data support that.

I think that's such an interesting finding that safu will have this immune-like effect. Do you think it's on target or off target? Do you guys have any...

So we do have some data on that. We're not talking about that because clearly, we're using that data to analog our next molecule, so...