Olema Pharmaceuticals, Inc. (OLMA) Earnings Call Transcript & Summary

All right. Welcome, everyone, to the next session. This is day 2 of Citi's Virtual Oncology Summit. I'm Yigal Nochomovitz, biotech analyst here at Citi in New York. Remember, if you have questions for our speaker, who is Sean Boone, the CEO of Olema, and we'll start the conversation in a moment. If you have questions for him, just e-mail me, and I will relay them over. So Sean, thank you so much. Welcome. I appreciate the time. A lot going on in the world of breast cancer, as you know, a lot to discuss. But before we get to all of that stuff, maybe just for those a little bit less familiar with Olema, give us a high-level overview of the company, tell us a little about palazestrant, tell us about the studies you're running. And we'll, of course, get into some of the key debates soon.

Okay. Great. Thank you, Yigal. Thank you for the opportunity to talk about Olema and have this discussion. Olema Oncology is a company focused on improving the standard of care and improving the lives of patients with ER-positive HER2-negative breast cancer. Our lead asset. palazestrant, is a complete estrogen receptor antagonist. It's a once-daily oral pill. And it's in 2 pivotal trials, 2 Phase III trials. The first to read out will be OPERA-01 that will read out in the fall of this year, and that's a monotherapy trial versus fulvestrant or exemestane physician's choice in the second or third-line setting, so meaning after patients have progressed on a CDK4/6 inhibitor plus an endocrine therapy. The other trial, which is currently enrolling is called OPERA-02, that is a first-line trial. That is ribociclib or Kisqali plus AI versus the experimental arm, which is ribo plus palazestrant. And that trial soonest it can read out is probably '28, maybe more likely 29. We'll have to update as we move along in that trial. We have one other clinical program, which is OP-3136, which is an oral KAT6/7 inhibitor, which is in Phase I and moving into Phase II. It's still in dose escalation as a monotherapy, but it's also being explored in combination with fulvestrant and again, our own endocrine therapy, palazestrant.

Okay. Well, let's talk more about palazestrant and its design and how it's differentiated from the pretty substantial class of these oral SERDs. There are many, as you know, from many from pharma in particular. But palazestrant is different quite arguably. In fact, the KOL comments we have heard yesterday from a prominent breast cancer KOL made reference to some of those differences in terms of better full blockade of the estrogen receptor and other properties of the molecule, other properties of the PK, but I don't want to answer the question. I'll let you answer the question. So tell us about why palazestrant is different and potentially better than, say, a giredestrant or camizestrant.

Yes. Thanks. You were doing great. So I was kind of enjoying that one. I guess I'll do my job. Yes. So palazestrant, the key molecular characteristic to maximize inhibition of the estrogen receptor is complete estrogen receptor antagonism. So just to remind everyone, in the breast tissue, the estrogen receptor is a -- it signals a very complex transcriptional signal, a ligand regulated transcription factor, which promotes the growth and proliferation of breast cells. Now what happens in breast cancer is what happens in many cancers is the cancer co-ops a normal physiological signal to grow inappropriately. So in ER-positive HER2-negative breast cancer, you want to turn that signal off all the time. That is the cornerstone of therapy. So all -- until you get to chemotherapy, which the objective is to put that off as long as possible, you always have an endocrine therapy present. It may be alone, it may be with another targeted therapy, but it's always an endocrine therapy. The current endocrine therapies do not turn the receptor off completely. Part of that is molecular. Drugs like aromatase inhibitor don't even bind the estrogen receptor. They do not, in fact, inhibit its signaling. They just decrease peripheral estrogen. Others, the SERMs, so drugs like Elacestrant, Vepdegestrant, Lasofoxifene, they aren't complete antagonist. They're partial agonist, partial antagonists. So they turn the receptor down in some situations on in other situations. And so you want a complete estrogen receptor antagonist and drugs like camizestrant, giredestrant, palazestrant are that molecularly. The other part of that, that's important is you have to have enough drug around all the time to keep the receptor off. So in the wild-type receptor setting, that's to block estrogen binding and signaling in the ESR1 mutant setting, that's just to turn it off because it is a constitutive transcription factor in that setting. So PK becomes extremely important. You want to have a high level of exposure at trough at steady state so that there's plenty of the drug around. And our PK is much better with an 8-day half-life and a very high exposure than the others in the class. So in order to get that, you have to have the pharmacological properties, but you also have tolerability, right? Because to have that much exposure, your drug has to be very clean from a toxicity standpoint. And then the last part that becomes very important, particularly in a trial like OPERA-02 is to be able to combine at the full dose so that you can maintain that high exposure, that complete antagonism while you're combining with another molecule. And this has again been very challenging within the field. We have not had to dose reduce. Either agent when we combine palazestrant with ribociclib, palbociclib, alpelisib, everolimus. We're doing atirmociclib right now that's in the clinic. We're doing the OP-3136 I mentioned, and that property is unique.

Okay. So then it would be helpful if you could perhaps provide some perspective on what we've seen from the competitive landscape. We've seen that you've been quite active in discussing this in our research as well in terms of what we've seen from Roche with lidERA, what we may see with their frontline study persevERA. I'm just curious what your perspectives are. What -- from your perspective, what do you believe we learned from lidERA in terms of how the complete SERM could be functioning in the ESR1 wild-type setting, which seems to be a new finding and a promising finding potentially? And then, of course, your thoughts about this fairly highly debated persevERA trial, which could, if it does end up working, could be very interesting in terms of thinking about your value proposition, especially given what you just pointed out regarding palazestrant's properties.

Yes. I think you're absolutely right that the evolution of this field over the course of the past even several months has been really interesting to watch. The challenge that people have faced is that they haven't seen randomized controlled trial activity in the ESR1 wild-type setting in the endocrine-resistant patient, right, patients who've progressed on a CDK4/6 plus an endocrine therapy. And I think first of all, the best way to predict how a drug or a combination is going to do in the future is to look at how it's done in the past. So our data is what we think really supports OPERA-01 and OPERA-02, where we have seen evidence of activity in Phase II post CDK4/6 and ESR1 wild type and mutant, both as a monotherapy and in combination with ribociclib. And that is unique. And of course, we'll test it in OPERA-01 as a monotherapy and get the data in the fall. lidERA threw in a really interesting piece of information that I think we are all struggling a little bit to interpret not in the context of the adjuvant setting because the lidERA result is excellent. it is a compelling demonstration of increased patient benefit of giredestrant at their 30-milligram dose, which is the one they carry through the program versus an AI, right? So one question had always been, well, can this next-generation molecules even beat the AI? I think that's pretty soundly answered at this point. And the answer is yes, and giredestrant has done that in lidERA. The next part that you get to is, okay, what does that mean for other trials like persevERA? So in oncology, we're very used to going from later lines to earlier lines. So if we have success in a later line, we go to the earlier line and we say, oh, we're likely to have success here. And oftentimes, it's actually greater, right? You get a greater effect if you haven't had so much prior treatment. We're not so good at going from, for instance, a very early line like an adjuvant setting and asking what's going to happen in the metastatic setting, which is persevERA and OPERA-02 and SERENA-4. So there are a couple of reasons that, that's complicated. One thing that really, I think, bodes well for persevERA from lidERA is that here you are now with this ESR1 wild-type population. And not only that, they're endocrine sensitive in both cases. right? Now the adjuvant, they'll have lower disease burden. You don't have measurable disease when you start adjuvant therapy. Obviously, if you have metastatic disease, you have evaluable disease at that time. The adjuvant is different as well in that the patients are all endocrine naive. That's the first therapy. They've never seen anything before. They're endocrine sensitive in the first-line setting, but they're not endocrine naive often, right? About 70%, 75% of the patients will have had prior adjuvant therapy then gone on to metastatic disease. The other 25% to 30% are the de novo metastatic patients. Their first diagnosis is metastatic disease. And so those are endocrine naive. So we have the situation where we're trying to figure out how to handicap going in that direction. There has to be some positive read-through. From lidERA, I would say, to persevERA in the first-line setting. But the magnitude of it can be a little hard to parse out.

Okay. But presuming we do see a benefit in persevERA, I would think that you would strongly agree that, that would be a very big positive for you in terms of your OPERA-02 frontline trial for palazestrant, would set a good precedent now?

Yes. Well, in comparable -- in data sets where you can kind of compare the patient populations, we have done better than any of the others in combination. So I would definitely say not even if it is positive, it's positive, that's very clear. But I would say even if there's a decent trend toward positivity, even if it misses statistical significance that it bodes very well for us because we pretty consistently, very consistently show superior activity to the others in the class. And that probably has to do with these molecular properties that we described before.

Right. Okay. Well, let's switch over a little bit to the second-line study. So that one is reading out sooner. I think people maybe sometimes forget that although it's a second-line study and there's been a lot of discussion of persevERA in frontline, the second-line market is a pretty substantial market in and of its own right. So can you expand on that? And then just help us understand what you need to show for that OPERA-01 second-line trial to hit?

Yes, right. It is a substantial market and a substantial unmet need, right? So if we just go back and look at the -- again, the treatment paradigm here, the treatment paradigm in this disease is to put up chemotherapy as long as possible, right, delay progression as long as possible with targeted agent. And so the first line of therapy is pretty well established in the metastatic setting. It's Kisqali plus an AI now, right? With trials like OPERA-02, our hope is that, that changes in the future to, Kisqali plus palazestrant. But after you progress on that, then you get a variety of options, some dependent on mutational status, some dependent on the patient's wishes in terms of tolerability and also sometimes comorbidities. So how -- what kinds of therapies will they tolerate well. So monotherapy endocrine therapy is used in that setting quite commonly. That's what we're testing in OPERA-01. And just to remind people, in that setting, we saw in a second, third-line population that could have had chemo, about 30% did, we saw 7 months overall, 7.3 months in the ESR1 mutant subset, 5.5 in the ESR1 wild type. If you take that whole group of patients, the market size is about $5 billion a year. So as you mentioned, it's sizable. If you get only the ESR1 mutant, it's about $2 billion a year. It's about 40%, maybe a little north of that is the mutant subset. That market is more competitive, right, because we have other agents that have demonstrated activity there, Elacestrant is approved and Imlunestrant is approved. The ESR1 wild-type subset is completely unaddressed at this point. So it is wide open and represents a significant unmet need. Again, the objective here is this delay of progression and the bar is 2 months increase in median over the standard of care. The standard of fulvestrant or exemestane care is going to be about 2 to 3 months post CDK4/6. So if you get 4 to 5 months, then that supports approval that supports use of the new agent. And so that's what we're shooting for in the context of OPERA-01. Again, in the wild-type, we had 5.5 months in more heavily pretreated patients. You can't have prior chemotherapy in OPERA-01, you're allowed to in our Phase II and also you have to be on your prior endocrine therapy for at least 6 months. So we feel like there's a reasonable likelihood that OPERA-01 will read out positive in both populations.

And talk a bit about the differential scenarios, like is there some sort of a hierarchical the typical way this is done where you have different populations. If you test one and then one works, then you test the other? Or it does it have to be everything? Just walk us through the math on all those things, which everyone loves to hear about.

Yes, they do. And we haven't disclosed the details of our analysis plan other than to state that we are testing mutant and wild-type separately. We don't do an intent to treat where you mix them all together. That has been done several times before. The thing is that when it comes out positive, when you pull the populations out for the other drugs, it's all the mutant that's driving it. So that's why the labels don't reflect that wild-type population. We rather went out and said, no, we're going to test them independently. It's a bit like one trial from the standpoint of operations, right? You enroll it all at once. It's the same sites, you stratify based on mutational status. But it's almost 2 trials from the standpoint of analysis. And so that's the way we've designed it. It allows you to be a bit more explicit with regulators, with investigators about how you're actually designing the trial and what you're looking for. But as I said, we're expecting readout from that trial in the fall of this year, assuming that there's a positive readout, so 2 versions of that, positive in ESR1 mutant, we have pretty strong confidence in that based on precedent and based on our data with the possibility to differentiate by having a longer PFS than has been seen previously. And then obviously, an extraordinary differentiator being the first to be able to address this ESR1 wild-type population.

Okay. So you're not going to get into details, but it sounds like you're checking both of these populations and one isn't like one isn't necessarily going to be conditioned on winning on one isn't necessarily going to condition you to check the other one. I mean if I'm reading between the lines, that would seem logical.

Yes. Yes, yes. They are tested independently. And the way that the trial is designed is around this, you had asked what is the benefit you're looking to show and be significant. And it's 2 months. Imlunestrant was approved on 1.7 months. That's kind of on the edge. We don't think -- we think if you get below that, it's not a good basis for approval or a change of standard in care. So it's that 2-month delta over the control arm that really is what determines effect size that you're trying to measure for and power for.

So that's coming second half of the year or in the fall? -- fall like what, like October-ish, November? Or how -- what's the time line?

Fall is before December and after August.

Okay. All right. And then the plan there, assuming you hit is you would proceed to launch this product yourself? Would you seek partnership?

So we will file, and we can file ourselves in the U.S. and EU quite easily. We can launch in the United States, and we're building the commercial infrastructure to enable that with launch potentially coming next year. We would not try to market palazestrant in the rest of the world, that it just is -- this is the second, third-line market is something that a medium-sized biotech can take on. Globally, it's not something we can take on. And so we would seek a collaborator for the purposes of the worldwide launch of palazestrant. Now those what the terms of those agreements end up being is obviously a result of negotiation. There's some profit sharing. Is there a co-promote in the United States, that's a negotiation thing, sharing development costs. We would want to book sales in the United States because that preserves upside for our shareholders. But I think that the collaborator is going to be vitally important in order to gain access for all of the patients worldwide to a drug that we think is very promising.

And then you mentioned just quickly going back to OPERA-02, which just so everyone understands OPERA-02 is the first-line trial. You said could slip into 2029? Or that's -- I mean that's projected.

Well, I mean, we don't know. We'll learn a lot more when we see persevERA, right? So yes, first of all, for OPERA-01 and OPERA-02, OPERA-01 is 1 drug, OPERA-02 is 2. It's pretty easy to remember. It is not by line. The -- yes, so I think one of the questions that we have from persevERA, really from a SERENA-4 as well, which is a lot of us are designing our trials based on assumptions around the control arm, right? The control arm is in the case of persevERA and SERENA-4, it's palbociclib plus an AI. For OPERA-02, it's ribociclib plus an AI. From a PFS standpoint, those weren't very different actually. It was OS that really brought Kisqali to the forefront and took years to actually get that to read out. And those were all in the kind of the 2 years in change, let's say, 27, 28 months. But we do have trials subsequently that had quite a bit longer median PFS for that treatment combination, right? So a trial like PARSIFAL, its control arm, palbo plus AI had 32 months, right? So being able to understand what the modern performance of this combination is, is also going to influence both the trial and the time lines for the trial. For us, it's vitally important because we can actually change OPERA-02. So if our assumptions, if we go back and look at our assumptions and say, oh, we're not as confident as we were because the newer data is suggesting that there's a difference, then we can go back and remodel the trial, remodel the statistical assumptions, decide if we want to change anything, there are really only 2 things you change. You can change the number of patients and you can change time. You're basically looking at how many events you need in the way to alter how many events and when you get them as number of patients or how long you wait.

I mean, yes, we looked -- I mean, you made an excellent point, obviously, about PARSIFAL. We looked at that, too, and it's clearly the outlier with the -- But then the other ones, right, like PALOMA- 2 and MONALEESA...

MONALEESA-2 and...

MONA-3, like they're all in the -- and we did -- in our note, we wrote the other day, like I calculated it out, including PARSIFAL, and it came out to like 27 and change. So it wasn't wildly off.

No. And I think that -- and I think everyone's done that calculation who's designed one of these trials. I will say, however, something -- somebody is making different assumptions, right? Because if you look at the design of the trial. Let's take the 3 trials. let's take persevERA, SERENA-4 and OPERA-02. persevERA and OPERA-02 look very similar. okay? The big difference, right, obviously, is giredestrant versus palazestrant and palbo versus ribo. That's the difference. But if you look at the numbers of patients and the inclusion/exclusion criteria, they're very similar. So my belief is that assumptions used by Roche are probably pretty similar to the assumptions we used. So there are each about 1,000 patients. SERENA-4 is about 1,400 patients. So it's considerably larger. But again, the control arm is palbo plus AI. It is essentially the same as persevERA. And as you point out, as I said before, for PFS, they weren't really different. So ribo shouldn't necessarily -- in OS, we expect there may be a difference. In PFS, there wasn't really a difference there. So something is going on that people are looking at this differently. It will be very interesting to see what happens.

By the way, one other point I checked was over. I mean, of course, you've heard the comments from Roche that they've driven to ensure an endocrine -- not endocrine naive but endocrine-sensitive population.

That's right.

Just underscore the point for you for your frontline trial that you've driven to do the same.

Yes. The way that looks like, if people love to dig into the details, you can go into the inclusion/exclusion criteria and where that will show up is that, obviously, this is first line. You can't have had any therapy for metastatic breast cancer. And the second place it shows up is that if you had adjuvant therapy, you had to have completed that adjuvant therapy and had a minimum of 1 year post the completion of that therapy without progression. And that's how that endocrine-sensitive selection manifests itself in the trial design.

But I guess therein is the a little bit of the subtlety in the sense that you've made it through 12 months post the adjuvant benefiting from the estrogen sensitivity, but it's -- I guess there's some not complete clarity as to the status of that patient in that point time period afterwards, right?

It's the reason that I say we have a little trouble handicapping in that direction. Right. What we know about the biology is that there's not -- unlike when you progress on the endocrine therapy, right, where you have this high prevalence of ESR1 activating mutations, 40% to 50%, you're still in the low mid-single digits when you go into this first-line metastatic setting. So you don't see this resistance mechanism cropping up. So that suggests that the biology of the tumor remains more of the endocrine sensitive because when you get true endocrine resistance, you see it reflected molecularly. But is there no impact of having seen maybe 5 years of endocrine therapy, that's a tough one.

Well, I'll just -- I'll put in a quick plug for the analysis I did is that in one of the pieces we wrote a couple of weeks ago, I just assumed that I just said, look, assume 15%, 20% of the people in persevERA are endocrine-resistant and just delete them in the sense that they're not going to contribute to power because you're not going to get an AI to work, you're not going to get a SERM to work, it's not going to happen. And so you effectively lower the power, right? And still good, still plenty of cushion. So if you assume those, the 27 months we were talking about earlier and then the 80% 0.8 hazard ratio. But anyway, that's for people to read on their weekends.

Yes, it's an interesting read. It's a complex situation. You parse out the considerations nicely.

Yes. So okay. Let's talk about your other asset, which is the KAT6, OP-3136. That one was -- we actually asked the KOL about that one yesterday. He seemed quite optimistic about that, especially just for the class itself across all the KAT6/7 developers that it's very well combinable to -- with other mechanisms potentially, which is interesting. But tell us about yours and the significance for targeting the domain the subdomains, 6A, 6B 7, why do you need to hit them all? That's clearly an important design feature.

Yes. Yes. I mean I think it's what you hit and what you don't, right, is always the complexity here. I think Pfizer was first. They're in a pivotal trial with their first KAT6 molecule, which hits 5, 6A, B, 7 and 8 at the exposures that they get. And I think in terms of efficacy, consistent with your KOL, in particular, with fulvestrant, it was quite encouraging, right, 38% response rate post CDK4/6. That's in a pivotal trial. In terms of tolerability, not so attractive, right? Quite a bit of cytopenia. The other, it's a bit of a class effect of epigenetic modifiers, but I think the severity might be something we can titrate in and out based on selectivity is dysgeusia, which is a taste alteration, which is a sort of quality of life issue until you find that patients and they did find this with the Pfizer experience, decrease their caloric intake enough to start losing weight. You don't want breast cancer patients losing weight, obviously. So they did run into tolerability problems at their 5-milligram dose, which is their Phase III dose, they have about 50% dose reductions due to AE, which is quite high. What we're testing is by keeping 6A, B and 7 and dialing out 518, can we get a better tolerability profile, leading then again to better combinability. The other aspect of it is that what we found preclinically was, as is always the case with targeted agents, they have very limited activity on their own. So you add in an endocrine agent. And that was definitely true with the Pfizer KAT6 and fulvestrant. But when you add palazestrant, the combination, it synergizes and is much more effective. And that was true actually preclinically of the Pfizer KAT6 and of LP3136. The thing is that we are able to test it in the clinic, and it's ongoing right now. That will not be in our data set at late in the first half of the year, just so people know that will be mostly monotherapy. The interesting thing about monotherapy here is that based on our preclinical data, we did see activity in other tumor types. So our monotherapy portion of the trial tests not only ER-positive HER2-negative breast cancer, but castration-resistant prostate cancer and non-small cell lung cancer. So we'll show what we have from the patients that enroll in that monotherapy section. So we are interested in seeing if we can expand beyond breast cancer with that mechanism as well.

And that you said data is coming second half of the year.

No, it will be -- it will probably be late Q2. When we get an abstract accepted to a meeting, we'll communicate with everybody where that will be. We don't have that yet.

Okay. And then what more are you doing in terms of portfolio expansion? Or have you got your plate full with pala and 3136 for the time being?

Well, no, we actually do continue -- we have a research program. We have targets nominated. And we are focused on breast cancer, ER-positive HER2-negative breast cancer. It's a massive indication. And obviously, we are a small company in a place that is mostly a big pharma space. So we think our focus is very important. It's also something we're very good at from the standpoint of understanding the biology through regulatory and clinical execution and hopefully soon commercial. So we do have a pipeline. We don't talk about it much. We'll tend to announce things as they get to the development candidate IND-enabling stage of development.

There was one that was speaking of being nimble and being careful with your cash, which is critical. There was one big topic I kind of crossed over, but it's important is given lidERA, some people are saying you could do an adjuvant study. Now that would be a big check to write, to say the least. But what are your thoughts? Like it's not something that you can't just dismiss out of hand. I mean it could be very valuable potentially.

No, you can't dismiss it out of hand. I agree with that. I agree with that completely. And I think lidERA -- Roche is very clear in their enthusiasm and excitement about it. And I think that's absolutely right. I think it's going to help a lot of patients. It is very exciting for Roche. There are 2 things that I think are important elements here. One is what does the next trial look like? I don't think it's a monotherapy trial. When they started lidERA a long time ago, they were able to do this monotherapy AI versus monotherapy giredestrant. They have a very small expansion with CDK4/6s, which I think is mostly tolerability, which they didn't report on yet. But really, the pivotal trial, the practice-changing part is that monotherapy. I don't think you can do that anymore in the moderate to high-risk adjuvant setting because CDK4/6 is, right, both abemaciclib, verzenio and ribociclib, Kisqali have labels in that space. So I think going forward, one element is it most likely has to be a CDK4/6 combination trial. And then that really changes both the design characteristics in terms of the numbers of thousands of patients you would need, but also the cost of the trial because you either have to buy or have a source of those CDK4/6 inhibitors. So when you're talking about -- and it's very interesting. It's a very large opportunity. I think with deeper pockets. It's something we think about on our own going out and implementing a trial that's 5,000 patients and north of $1 billion to run if you're buying the drug, that's out of our reach at the moment. Now for us, with a market cap of around $2 billion and a market potential just with palazestrant of the ongoing trials exceeding $15 billion a year, we're in a good spot. But I think as we start to open up opportunities in terms of collaboration, in terms of being able to launch and turn cash flow positive, I think we do have to go back and very seriously address this question.

I guess to some extent and more than just to some extent, perhaps to a large extent, it will depend on the strength of the treatment effect in persevERA because if that's really big on a CDK4/6 background, that would inform probabilities for an adjuvant trial also on the CDK4/6 background, I would think.

Yes, I think that's right. I mean we've already seen, though, that our -- with ribociclib in combination, right, we got a year post CDK4/6. The bar in the OPERA-02 persevERA setting for a clear win is a 6-month extension of PFS. And again, we went into a situation where you were on the CDK4/6 plus AI, you progressed to the point where the tumors were visible now, right? And then you go back with the CDK4/6 again in the form of ribociclib and you add now palazestrant as the endocrine agent and you get a year in the overall population, 14 -- almost 14 months in the mutant, but nicely over 9 months in the wild type. So I think our ability to demonstrate superiority with that CDK4/6 setting is pretty compelling now.

Very good point. Okay. Well, thank you very, very much, Sean. Excellent discussion. Maybe we'll have you back for a debrief post the persevERA and get your updated thinking on the landscape then. So thank you very, very much.

Yes. Thank you, Yigal, It's a pleasure.

Thank you.