Oncopeptides AB (publ) (ONCO) Earnings Call Transcript & Summary

Hello. My name is Boris Peaker. I'm one of the biotech analysts here at Cowen. It's my pleasure to introduce Marty Duvall from Oncopeptides. Marty is the Chief Executive Officer of the company, and we look forward to hearing their presentation. Marty?

Thanks, Boris. Great to be here, and thanks to everybody for joining us. Really excited here at Oncopeptides. As you may have heard on Friday evening, we received FDA approval for PEPAXTO, our new product for relapse and refractory multiple myeloma. So I'll be making some forward-looking statements here during the course of my presentation, so please refer to our filings for fair balance. So with the approval of PEPAXTO now by the FDA, we have transformed into a fully integrated biotech company. Really excited about our company from an end-to-end perspective, starting with the discovery an IND generation. As you may know, we have a unique peptide drug conjugate platform, and PEPAXTO represents the first product coming through on that platform. We have another product that's in the clinic today, and that will be the focus of future presentations. But this is about PEPAXTO in the middle, launching into a $23 billion market. We have a very broad supportive clinical program that I'll touch on. And then as it relates to our launch, launching in the U.S., we do have a go-at-it-alone strategy. We are making some advances in Europe. Stay tuned for more announcements coming from the company with our plans from how we intend to commercialize in Europe. And then we're doing some things also thinking about Asia and Japan, likely partnering, but certainly doing what we need to do to continue to advance PEPAXTO through the regulatory process and the PMDA. So let's talk a little bit about our FDA approval of PEPAXTO, and it's the HORIZON study that really underpins that approval. It was published in the Journal of Clinical Oncology in December of 2020. Again, patients recruited to this trial were patients of very high unmet need in the multiple myeloma space. The intent-to-treat population was a total of 157 patients, 65 years of age as a median, median of 5 prior lines of therapy. Very heavily pretreated population, as you note here, from 76% of the patients were triple-class refractory so had failed at least 1 IMiD, 1 PI and 1 anti-CD8 monoclonal antibody. 59%, in addition, were refractory to at least one prior alkylator therapy. And really importantly for this trial, 35%, so a very large population of patients that had extramedullary disease, perhaps the area of highest unmet need in the multiple myeloma market. So here are the top line results that we've shared in these heavily pretreated patients. In the 157 intent-to-treat, 29% overall are objective response rate, clinical benefit rate of 45% and an additional 24 patients had stable disease. So we see the majority of patients in this late-line setting receive some type of benefit from PEPAXTO Triple-class refractory patients, 119 of the 157 overall response rate, the clinical benefit rate and stable disease held very well. And on the extramedullary disease, very impressive results, amongst the highest or the highest published to date. Also good numbers as it relates to duration of response at 5.5 months median PFS and overall survival. And interestingly, when we look at the profile compared to other drugs that have been recently approved into triple-class refractory population, our Grade 3, Grade 4 treatment-emergent events are mostly cytopenias, limited to that cytopenia side of the equation, neutropenia at 79%, thrombocytopenia at 76%. So now diving into the label a little bit, and we're very excited about PEPAXTO being the first anticancer peptide drug conjugate. We see this as an affirmation of our peptide drug conjugate platform. Really pleased with the description of the mechanism of action that we see in the label. This unique hydrolysis of our peptide drug conjugate by aminopeptidases, which are over expressed in the myeloma cells, result in the release of the warhead uniquely inside the plasma cell. And we believe that's leading to a very interesting benefit/risk profile. We also note the FDA points out that cross-linking of DNA is involved. So there is alkylator activity, but there are other things going on that we continue to interrogate both preclinically and clinically. A strong description of the efficacy on the proliferation and induced apoptosis, and then further differentiation when we look at activity and synergy in melflufen-resistant and nonresistant cells. So really pleased about the way in which the drug is described and the mechanism is described in our package insert. So the granting of the FDA accelerated approval, we position PEPAXTO is offering hope to patients with high unmet need. So it is based on a subpopulation of those triple-class refractory patients. So I mentioned that was 119 in the prior slides, 97 of those patients are called out in the label and 41% of these patients have extramedullary disease and 75% have alkylator refractory disease. This is also pointed out in Table 5 of the label. So this calling out of EMD in Table 5 is unique to any other product in triple-class approved in triple-class refractory disease. So we point to this as the area of high unmet need and an exciting area of potential utilization of PEPAXTO going forward, and we're doing clinical trials in that area. The initial label that we have, we'll look at the triple-class refractory population as expected and in patients who have received at least 4 prior lines of therapy. So we represented this is a very large patient population, 20,000 patients and growing that are triple-class refractory. And these patients proceed through a number of different therapies, and our formal indication is in patients who have at least received 4. We expect the commercial drug will be available in the next couple of weeks. So how does our data stack up in the products that are indicated in triple-class refractory with 4 prior therapies or 4 lines of therapy? So we are a triple-class refractory drug after 4 lines. As we know, selinexor is a penta-refractory indication specifically need to fail 2 IMiDs and 2 proteasome inhibitors. Belantamab has a little softer entry criteria here, only needing triple-class exposure. You see the corresponding number of patients across those trials. And again, on the share of patients with EMD, we are more or double what the other products are. The overall response rate and clinical benefit rate, despite that very advanced population, high percentage of EMD patients stands up very well with respect to overall response rate, clinical benefit rate. And we see a very nice median duration of response and median PFS in the responders, particularly looking at that PFS of 8.7 months versus the selinexor of 4.0 months. Progression-free survival across these patient populations compares very well for PEPAXTO as does the overall survival numbers. Dose reduction, only 27% of the patients in this cohort required a dose reduction, stacking up well to the lower dose of belantamab. You may remember that in the DREAMM-2 study, they actually looked at 2 different doses. This is a reduction from the lower dose. And again, we feel a big differentiating feature are the lack of nonhematologic Grade 3, Grade 4 toxicities, which we think will play extremely well in the clinic. Whereas selinexor has some very interesting and unfortunate adverse events of fatigue, nausea, diarrhea in the Grade 3, 4 realm that make it very difficult for patients to continue therapy. And on the belantamab side, which is highlighted by a REMS program, some challenging issues around visual disturbances and keratopathy. So again, with a 30-minute infusion of PEPAXTO once every 28 days really lend itself well to a convenient doublet for elderly patients, patients of high cytogenetic risk, patients in the community as well as patients in the academic centers. So we believe that that's going to play very well for the drug. And remember, this is just our initial indication. We're looking to grow this quite significantly as we move forward. So what is our strategy moving forward? It's really a twofold approach. Again, with the triple-class drugs, what we see today is recycling of these classes and a small percentage of patients that are now getting exposed to these new mechanisms of action. We want to become one of the leading choices among selinexor, belantamab and other new agents as it relates to the new mechanisms of action and decrease the recycling of the old classes. So become strong within that particular market and expand that market. And one of our trials, the OCEAN trial, that I'll touch on, speaks specifically to that recycling. So as we look at the moving annual totals of patients treated on a monthly basis in multiple myeloma, I'll point out, first of all, that this is a disease that's incurable. Newer products that have been added to the bottom end of this spaghetti-type chart, as we describe it, are adding to overall survival. So patients are fortunately going through more and more lines of therapy, and these new products, new mechanisms of action are adding benefit. But new treatment options are needed, and that's where PEPAXTO comes into play. So very excited about that. So we'll be competing in the lower part of the chart. But if you look at the rapidly rising 2 blue lines in the middle, this is where our clinical development program meets up well with 2 drugs that are at $3 billion and $4 billion and growing very significantly, and we see that in -- further on the next slide. So here we see the worldwide sales of the key products that are available in this particular market, and we look at daratumumab at $4.2 billion and growing at 40%. You may know that we've opened a trial recently in combination, a Phase III trial called the LIGHTHOUSE trial that I'll talk a little bit about. And Pomalyst or pomalidomide at $3 billion, just recently disclosed, growing annually at 22%. And through our OCEAN trial, we have a direct head-to-head comparison with pomalidomide that will read out in Q2 of 2021. So very excited about that trial, and we'll provide a little details. So out of the gate, when we look at the first year sales at the bottom of the chart, you can see where PEPAXTO will originally generate revenue. But certainly, our aspiration is to make the product a foundational choice in the treatment of patients with relapsed/refractory multiple myeloma. And how will we get there? So this links those patient populations to our clinical development program, so with the HORIZON study that we've talked about and the approval in triple-class refractory patients who have received at least 4 lines of therapy. We see how that population stacks up, and we also add in the extramedullary disease patients. So 20,000-plus and growing. And what we're seeing in the early lines of therapy is the use of quadruplets, triplets, and this is causing this triple-class refractory pool to continue to grow. As more products are available with new mechanisms of action, they're going through more and more lines of therapy. So eventually, these patients will certainly become candidates for PEPAXTO. With the OCEAN trial, the head-to-head comparison to pomalidomide will move us into third line -- third and fourth line. The population essentially doubles. But also importantly to remember here is that the average duration of therapy with these patients being a little bit more healthy. They'll be able to benefit from PEPAXTO therapy for a longer period of time. So higher duration in conjunction with this expanded patient population. And that story continues, looking at second-line plus when we look at the LIGHTHOUSE trial and our combination of PEPAXTO with daratumumab. So really very, very excited about the ANCHOR data that was published at ASH and how it paves the way for LIGHTHOUSE, and I'll touch on that again in a second. So our clinical development program, our life cycle program for PEPAXTO, melflufen is exciting. We have some trials that I haven't mentioned. They're towards the middle, the BRIDGE study for patients that are renally impaired, and we'll be reporting out results on that very soon. The PORT trial, which should facilitate in the label the ability to administer PEPAXTO through IV or through the peripheral vein. And the LIGHTHOUSE trial, I'll touch on a little bit too. I should mention also, we have trials outside of multiple myeloma. One that has opened up is the ASCENT trial in acute light chain amyloidosis, and I'll talk about our future plans as it relates to expanding the life cycle. So really important to keep in mind the OCEAN study, in addition to the PEPAXTO approval. Here, we're going to report out top line results of this comparison -- direct comparison between lenalidomide or pomalidomide and melflufen in patients who are refractory to lenalidomide. So again, tying into that strategy of not recycling class, here, we see the lenalidomide to pomalidomide. And our belief that based on the data that's been generated to date that a new mechanism of action earlier in time can result in a better outcome for patients, and that's the hypothesis behind the OCEAN trial. And I should also mention that this OCEAN trial would serve as the confirmatory trial with our accelerated approval and/or a conditional approval in Europe. So 2 ways to win with this OCEAN trial. One is a superiority result with a hazard ratio of 0.8 or lower and a noninferiority result with a hazard ratio between 0.8 and 1.0. Both of these would have significant impact from an uptick of PEPAXTO commercially as comparison to a drug of the size and scope of pomalidomide and having another option would be outstanding. And certainly, from a regulatory perspective, a superiority outcome is a big win and a no-brainer from an FDA and EMA perspective. The noninferiority endpoint, if met, is already accepted by EMA and would be, of course, data-driven as it relates to the FDA. So we're excited about the future and being able to report out these top line results in Q2, likely for a data presentation at a congress sometime in the September time frame, where more data will be released. The LIGHTHOUSE trial is the second Phase III trial. This was initiated. We have first patient in. Again, I mentioned that this was based on ANCHOR results that were presented at ASH just a couple of months ago where we had a very impressive overall response rate of 73% and an equally progressive median progression-free survival of 12.9 months. Based on the refractoriness of patients in this patient pool, we believe that this data stands up very well to any that are published. So 240 patients. We've already started with this trial and certainly look forward to this comparison of the triplet versus daratumumab in the years ahead. So this is a second Phase III confirmatory study for melflufen in relapsed and refractory multiple myeloma. We want to do more in multiple myeloma. A trial in extramedullary disease, the LANTERN Phase II trial is expected to start in the second half of the year. Novel combinations are in planning. We also want to explore new indications. So AML is one that we have on the radar screen as well as relapsed diffuse large B-cell lymphoma that is also on the radar screen for the second half of 2021. So as we sit here today, Q1 of 2021, really excited about the green light here and the commercial launch of PEPAXTO in the United States and the granting of this accelerated approval by the U.S. And Q2, the big highlight will be the top line results for that OCEAN Phase III trial. We'll also look forward to reporting results of our ongoing work in Europe, our application for conditional approval and updates on other trials as we move forward. So the future is bright. So again, very pleased at the decision from last Friday. We're very excited. The team is in place. Drug will be in the distribution chain within the next 2 weeks. We will begin reporting revenue with our Q1. It will just be a short period of time. But certainly excited about being an end-to-end company, about addressing a growing unmet medical need. And we believe there is -- there are significant patients out there, our primary stakeholders that can benefit from having melflufen available on the market. So we're very pleased and thankful to investors who have put confidence in us in meeting the milestones and delivering with PEPAXTO, and we certainly look forward to meeting those. And also just want to recognize our team here at Oncopeptides that worked passionately, collaboratively and courageously to meet the unmet needs of patients. So with that, I'll stop Boris and turn it back over to you.

Great. Thanks, Marty, and congratulations on the approval. I guess we have a few minutes left for questions. So maybe quickly, one of the differentiating elements with PEPAXTO is the extramedullary disease, as you mentioned. It's not officially in the -- it's mentioned in the label in a graph in a table. Can you comment on your thoughts and strategies of how to differentiate using extramedullary disease? And how do you plan to market that differentiating factor?

Yes. That's a great question. And certainly, through our traditional medical affairs mechanisms, we have a full report of the HORIZON trial and the call out of that deep number of patients that were in the HORIZON trial. Certainly, from a commercial perspective, as I mentioned in the presentation, it is unique to have that called out in the label, even in the Table 5, a characteristic table. This will provide some opportunity to get in further detail. Certainly from an accelerated approval perspective in the U.S. and the Subpart H approval subsets are not typically in an indication statement. But we will have an opportunity to be able to communicate some of the more detailed results for that high proportion of patients that were extramedullary -- had extramedullary disease. I mean this has been a real hallmark of feedback that we've received from KOLs and those that have participated in the HORIZON trial, and our clinical program overall is how PEPAXTO or melflufen is working differently in these patients. And that has sparked that further clinical trial that we're kicking off to further exploit and interrogate the question as to whether and how much melflufen can have an impact or PEPAXTO can have an impact in patients with extramedullary disease.

Can you maybe help educate us a little on extramedullary disease in general, just in terms of what fraction of patients have it, how is it diagnosed? Just understanding how to best identify these patients in the first place.

Yes. That's a really good question. And really, it's an area where perhaps our efforts here and our efforts in having this call out in the label as well as having a specific trial addressing these patients is going to help a lot. I mean in the conversations with regulatory authorities and in the conversations with key opinion leaders, there aren't standard mechanisms and standard ways in which these patients are assessed and diagnosed. And certainly in a community setting, we're not seeing that these types of tests are paid for, thus are not typically done. So I think what we're going to see is kind of an expanding and growing market of patients who are now identified to be extramedullary disease. I mean we think about this classically as patients whose disease has grown and expanded beyond the bone. So stay tuned on that one. I think this is a developing field and one in which I think we hope to be a leader as it relates to it going forward.

Great. Maybe just a little in terms of commercial adoption, maybe you could help us set expectations. I don't think there's any significant expectations for the first quarter considering you're probably going to have like 2 weeks of sales in there. But as we go beyond that, I think a lot of investors are looking at XPOVIO, I think most commonly, XPOVIO as the references a guide to build out a sales ramp. So I just want to kind of get your thoughts around that approach.

Yes. Good question, Boris. I think fundamentally, as we look at the profiles of the 2 drugs, we feel from a benefit/risk profile, overall convenience and tolerability perspective in addition to the efficacy that we have a superior drug. So we're confident that in the medium and long term, this is -- we're going to be able to do better. We look at that as kind of a floor as it relates to the opportunity for PEPAXTO. And certainly, selinexor being first out of the gate in triple-class refractory, there was really some solid uptake. But unfortunately, the stickiness or the ability of a patient based on some of the side effects, the Grade 3, 4 that I mentioned, the nonheme side effects weren't able to tolerate second and third line. So I think that's where you begin to see that you'll begin to see a difference and a differentiating traction as it relates to the PEPAXTO uptake versus a selinexor. So we're going to get our feet wet, understand the market a little bit better. I can report as we've looked at the uptake of belantamab and the uptake of selinexor, it is in these patients that have gone through 4-plus lines of therapy. So we know those patients are out there. And the fact that patients have been treated with belantamab and selinexor increases the population of patients that are available to us because really, what this is about is patients finding a therapy that adds to their survival, get a response, stabilize their disease so they can move on to another therapy. So again, it's a growing population, and we believe the benefit/risk profile will play out well for PEPAXTO. And of course, we'll have these OCEAN results kind of top line here in Q2 and a presentation that should boost the overall perception of our drug going forward.

Got you. So on PEPAXTO real quickly, have you announced pricing yet?

We haven't -- well, yes, the pricing is available in the marketplace today. So a vial of PEPAXTO, as shown here in the screen, the 20 milligram, the list price will be $9,500. So a cycle, $19,000. We'll realize somewhere between $14,000 -- $14,500 and $16,000, depending upon the gross to net and exactly how that plays out within the market. So I think that's pretty consistent with where most analysts have us today in terms of the net revenue.

Great. And lastly, maybe in the last minute, if you could comment on how much cash you have. And a common question we get from U.S. investors is thoughts on U.S. listing.

Yes. So our runway currently takes us through Q2 of this year. We also have the EUR 40 million loan from EIB that extends that runway. So we're certainly looking at mechanisms now to increase and improve that financial picture. In terms of the listing, that is something that we'll be considering more as we move through the year. Certainly, there's a lot of paperwork and a lot of work that's involved. And our heads have been down focused here on getting the drug over the line from a regulatory perspective in the U.S. and doing what we need to do in Europe and the OCEAN trial. So it is a consideration for us looking at the back end of the year, but no specific promises or exact concrete plans.

Great. Well, with that, we are right on time. So Marty, thank you very much for the presentation. Once again, congratulations on the recent approval. And yes, we look forward to the rollout of this drug as well as particularly the OCEAN study.

Great. And thank you, Boris. We really appreciate everything you've done to highlight the drug and the progress the company is making. And certainly thank all the investors that are listening or potential investors that are listening, and thank you for digging in. So take care.

Bye-bye.