Perspective Therapeutics, Inc. (CATX) Earnings Call Transcript & Summary

Thank you so much. So my name is Peter Lawson. I'm one of the Biotech analysts at Barclays. And really pleased to have on stage with us Thijs Spoor, the CEO from Perspective Therapeutics. And I guess my initial questions for everyone has been the impact of tariffs and how that could potentially impact supply chain and if there's anything we should be thinking about, whether it's industry-wide or company specific?

Sure. No, thank you, Peter, and thank you for hosting us here at the conference. It's always a relevant question on everyone's mind. When you think about the supply chain and the precursor materials. So the amount of actual peptide that we use in our programs is pretty small and is produced in the U.S. But really, the big question in everyone's mind, independent of tariffs on this radiopharmaceutical supply chain is where does the isotope come from. And so, to cut to the chase, thorium-228 is the ultimate precursor for what we do. Thorium-228 is found relatively abundantly around the world inside reactors and things like that. But there is a U.S. supply through the U.S. Department of Energy. There are sources in Russia, in the U.K., in the Netherlands, Australia. But we predominantly source from the U.S. Department of Energy. And so our precursors are not dependent upon how the -- any tariffs that may show up in terms of what we're trying to do.

Got you. And then the FDA potential cuts, or fear of cuts, has that changed in any way the communication pattern with the FDA? Has it delayed things? Have you noticed any changes?

No. So any potential cuts and change of the FDA, we have not seen any impact on how we engage with them. We found the FDA to be consistently very supportive of innovation and new therapies and a really dedicated group of professionals trying to help bring new therapies forward. And so we have not seen any acute impact from anything that we've done at this point.

Got you. And then I guess final macro question would just be around NIH funding cutbacks there. I mean, clearly, could have long-term impacts on biotech industry as a whole. But are there any kind of near and midterm effects that you worry about even if it potentially trickles down to university funding and.

So there are some really drastic acute impacts from NIH cuts. And as we look at a lot of our clinical trials, we're doing work in oncology. And a lot of the university and academic centers that do work in oncology are major recipients of NIH grants and that has a direct impact on their operating budgets. And so our clinical sites are feeling systemically the impact from their institutional budgets being drastically cut and really scrambling to try and find out how they provide integrated cancer care to their patients. And so every institution that we deal with, that does research is impacted by these cuts. And the read-through is into patient care pretty acutely. So it's #1 on people's minds as we speak to our clinical trial sites as we look to see how they can operate.

Sure. Really great insight. And then kind of as we think about your own company and manufacturing, I wonder if you could kind of talk through where you are for the building out of -- manufacturing [ of, so ] clearly, an important part for the radiopharmaceutical space.

Thank you. So the supply chain, if the radiopharmaceuticals is going to be dependent upon your product shelf life and how far -- how much time you have and how far you're trying to get the product. So with the lead-212 isotope, we can think of product shelf lives being up to about 24 hours. The isotope is a 10-hour half-life, but the effective product shelf life is about 24 hours. And so that means we have ideally same-day distribution or potentially overnight. There was a recently announced deal between Sanofi and RadioMedix to distribute their compound centrally in the U.S. from one site in the Midwest, and which certainly seems very feasible. As we look at the currently approved radiopharmaceuticals that Novartis distributes, odds are that any product injected today, for example, into a patient was probably made yesterday. And the sort of -- the slightly longer isotopes like Lutetium and Actinium 225 rely on about a 48-hour or so shelf life. So how we think about our programs, we have a site in Iowa that's currently producing material for the clinical trials, has been for several years now. We can get product from Iowa across the entire U.S. right now. We've just opened up in October, a facility in Somerset, New Jersey that we acquired from Lantheus. That site we acquired in March and started shipping doses in October. And that site is commercial-ready and can ship product by ground across the East Coast and obviously, by air across the whole U.S. And then as we look at our published expansion plans, we have acquired a building in Houston, a building in L.A., building in Chicago. And so we are investing in manufacturing sites there as well. With these manufacturing sites, being actually pretty efficient to operate given that the capital requirement for each of these sites is under $40 million to produce a facility that can support quite a large number of patient doses. So an order of magnitude less than some other manufacturing programs. We have the luxury of not needing to create the isotope on site from a linear accelerators and cyclotrons and nuclear radiation. We have the benefit of all of our isotope comes through chemical separation. And there's a very interesting separation technology that we've developed just for lead-212, it's parent radium-224 and it's parent thorium-228. So on-site purification or separation by washing a column is much easier technically than having a cyclotron or a reactor on site.

Got you. And then maybe you've kind of touched upon it, but just the differentiation of your platform versus others and why lead, why alpha?

So when we think about our platform, we've leaned in pretty hard on lead-212. We think lead-212 is in that sweet spot, not too long half-life, not too short. We can distribute it, but it also is able to irradiate the tumor with a hard, fast punch and then disappear so that the body can respond. The tumor microenvironment isn't being irradiated. We're not damaging tumor-infiltrating lymphocytes that may be recruited into the cause. Lead-212 has an elemental twin, lead-203. This allows us for early work in drug development to do perfectly correlative dosimetry using the same composition of matter, the same chemical at the dosimetry level. And so we like those isotopes of lead-203, lead-212. But the big enabling piece for our platform is actually incorporating those into a proprietary chelator. And so we have intellectual property around this chelator as well. The chelator is like a chemical cage that holds the metal in place and then drags that metal wherever the rest of the [ moiety, ] the rest of the peptide linker want to go in the body. And so all of our programs so far take advantage of the fact that we can have this proprietary chelator. The chelator plus any physical linkers plus the targeting peptide together form the composition of matter that we actually also file IP around. And that overall targeting entity, the molecule with the chelator, the metal, the peptide, the linker, all those things together are what differentiates. So we develop new programs with novel compositions targeting unique targets. If the target expresses on the tumor and doesn't express in a lot of normal tissue, then we'll look at that pretty actively as a candidate. And then we'll actually use this and develop assets that we take into the clinic. So one of the nice things about a platform is that by using our expertise in cyclic peptide chemistry, we can tune biodistribution, we can tune the pharmacokinetics of the drug during discovery and try and optimize for biodistribution, and then lever our experience in making these programs, scale them up, do proof-of-concept imaging in animals, therapeutics in animals, imaging in humans and move from there to treating in humans as well.

Yes, it's an interesting dynamic where you can kind of visualize and treat and...

No, it really is powerful. The see what you treat, treat what you see, it's not just a great tagline. It really means you can run your -- you can do test runs in animals or humans without damaging them. And so the ability to actually go -- so for a patient with melanoma, for example, 50% of patients with metastatic melanoma should express MC1R, a target that we like. A noninvasive way to identify if that target exists is to actually give the patient the drug that they'll be getting as a therapy, but only as a diagnostic. And so you can do a dry run in that patient and get perfectly predictive dosimetry for a follow-on dose. And so if a patient is injected with a diagnostic and they're MC1R positive, then we know that they could be candidates for the therapeutic. If they don't express the target, don't treat. And that's a really nice way to go where we can actually do these things. And also looking at biodistribution, we derisk every step and imaging animal is great, treating the animal proves localization. Imaging in a human is a phenomenal derisking point because then we can actually really see do we get tumor accumulation or do we get off target.

What's the time between if you took that idea and you can essentially image the patient and then could you treat them the next day? Or how would that work?

So depending on the receptor and on the patient type, it can be as quickly as next day. Some receptors have a very, very high turnover ratio -- turnover rate, and there are so many of them that there's no issues of occupancy. We're doing picomolar levels of activity. And so it's almost impossible to saturate all these receptors. The logistically, though, you want to make sure the patient is screened. So in theory, a patient with a positive scan could even be treated the same day. But for most sites, they want to wait the next day and make sure the drug is available and ready. We try and treat patients within a week or so of a positive confirmatory scan showing that they have the receptor that we target.

Got you. And I guess if we move on to the SSTR2 targeting molecule and kind of just if you run through the kind of current standing of that data and just kind of, I guess, then I'll dive into the FDA feedback you've had so far.

Sure. So the -- when we initially -- we developed this program, it came out of the University of Iowa, we wanted to develop a better drug for pediatric neuroblastoma. And so we want to design a safer molecule for kids that end up having, we think, ideally a safer product for adults too, safer meaning a broader therapeutic window. And by looking at some of the preclinical data, we sent that to the FDA and asked for Fast Track designation in that post lutetium-treated patients. And they came back to us and said, no, we could have a fast track pre-Lutathera. So in the PRT-naive space. And that was very exciting for us. With the one condition that we meet with them after our first few patients are dosed at both 2.5 and 5 millicuries. So we planned in advance a dose escalation design, the MTPI2 design. We can iterate through and see where the data takes us. However, the FDA said, please pause after those first few patients are dosed at 5 millicuries so we can understand what the safety and efficacy looks like and then have a dialogue with you. So that was predetermined 2 years ago. So we enrolled patients into the trial at the 2.5 millicuries last December. We decided to go very quickly that we could actually sort of 1.5 years ago, December to escalate to the 5-millicurie dose. Those patients were enrolled the first 7 -- and initial results from that study that we intended to submit to the FDA were presented at the NANETS conference in November. And since then, we've had an update on the therapeutic results for -- at ASCO-GI. And so tracking these patients forward. What we told the Street is that once we have clarity in terms of what we're telling the investigators about dose escalation, we'll then tell investors as well. And so it's really a matter of making sure that we develop medicines that everyone considers to be within reasonable therapeutic ranges.

Got you. And how does it stand for like Cohort 2, Cohort 1 data sets? And then I think you were waiting for FDA feedback for Cohort 3?

Yes. So once we get FDA clarity on what we're telling the investigators for Cohort 3, we'll then be disclosing that. We prefer not to sort of comment on discussions in progress. But the Cohort 2, the 5-millicurie level, the Data Safety Monitoring Committee recommended that we reopen that cohort, and we could dose up to an additional 40 more patients. And the physician interest in that has been extraordinary. And so prior to the NANETS data and post, we had a lot of interest, we disclosed that as of December 31, 11 more patients had come in on that reopened Cohort 2. And you can run through and see how long it takes for them to kind of see results that was between August and December. We are committing to doing regular updates on enrollment, and then we'll see how -- as the data matures, we can track the patients through. We can't do a 2-year follow-up on a patient that only got enrolled a year ago, obviously. And so we are watching patients all the way through and seeing how the follow-up goes. And when reasonably appropriate at medical meetings, we'll be giving updates to everyone about the progress.

Got you. Because what the 2 unconfirmed PRs within that?

So what we disclosed at the ASCO-GI conference was 2 unconfirmed PRs. And then whenever the data is updated at a medical conference, we'll be able to disclose the next -- what happened with those patients.

Okay.

The confirmed response and 2 unconfirmed was what we disclosed at ASCO-GI.

And all those patients are available for follow-up? Is it like...

Yes. So these are patients where if you think about patients with neuroendocrine tumors, they -- it's a very long, slow-growing tumor. And so for a while, they would have been treated with somatostatin until they started to progress. Once they started progressing, they would have come into the study. And right away out of the gate, 8 out of 9 patients had disease control. And so that gives the physicians confidence that they can actually monitor them as they would normally. As part of the study, the patients do come back every 8 weeks or so for follow-up and for routine -- reasonably clinically relevant scans to assess their disease status.

Is there a good venue for the next update? And presumably, that could include Cohort 3 or how do you think about it?

So we want to be really careful about not front-running conference materials and things like that. So as we're allowed to with the various conferences in terms of commenting, if abstracts have been submitted or accepted or what will be produced, we'll be communicating that. We do like medical conferences because at the end of the day, we're trying to inform physicians and clinicians about how this could impact their patients. And so we like that setting as a way to have data come out.

Perfect. Okay.

And then I do want to give a caveat though, which is anything that's going to go in an abstract will almost by definition, obsolesce itself by the time that the data gets presented at a conference.

Got you. Of course. Okay. So it's -- there's a long lead time with these abstracts that you're thinking about [ linking. ] And I guess, MC1R, I guess, why that? And we've got some follow-up questions around it.

Yes. So I mean -- so melanoma, as everyone appreciates in this room, is a very, very tough disease. And I think the recent -- if you look at the SEER database for metastatic melanoma patients that are on diagnosis of being Stage 4 have a 50% mortality after 1 year. And so it's a pretty tough disease to try and interact with a lot of energy in the space. What we like about the MC1R target is that about 50% of patients express MC1R with metastatic melanoma, 50% do not. And therefore, it's absolutely appropriate to try and do a screen. And what we like about this matching isotope combination is that you can actually screen the patient with the potential therapeutic to assess if they have enough receptor positivity to warrant treating with the therapy. So there's a clear unmet medical need in melanoma. If we look at the expected PFS of the patients that we've been enrolling, we are enrolling patients in the post second line plus setting. So on average, they had 5 previous therapies that have been tried and not worked enough. So the patients were progressing. And so with expected PFS of 2 to 4 months, we are thrilled that in our 3-millicurie dose cohort, all 3 patients went well past that time line and at 9, 11, 13 months post, we still had stable disease. And so to take a rapidly progressing aggressive disease like melanoma and turn that into stable disease, and I'll quote our Chief Medical Officer, who is in the audience here, he say "It's like the disease has been frozen in time." And that's an amazing thing to do if you're treating a patient to have that disease frozen in time versus a reasonable expectation of rapid progression. And so the fact that we have clear signs of activity and efficacy within what we think is a very good safety profile to actually freeze that disease. And in fact, one of those patients turned into a confirmed response about a year post.

Perfect. And the -- where are you in that dose escalation?

Yes. So it's dose finding more than dose escalation. What does that mean? That's a subtle nuance, which is that we can go up or down with the design based on safety and efficacy trade-offs. And what we found is that if we are dosing at 5 millicuries, what we think happened then is that we took this incredibly complex system called the immune system. And if that gets out of balance, the disease goes unchecked. And so we didn't want to interfere with the immune system, which we think happens at higher doses and get that optimal slightly lower dose at 3 millicuries that did have a beneficial impact for the patients. And the preclinical data says that if possible, we can get a much higher response rate if we combine with a checkpoint inhibitor and an alpha emitting therapy. And so the idea of actually going to combination therapy has been our development goal for -- out of the gate. But we didn't feel comfortable going into combination therapies without isolating the safety and efficacy profile of the individual components. And so in our case, we have an agreement or collaboration with Bristol-Myers Squibb with Opdivo. That's been well characterized. But what's not known is what does monotherapy look like with our drug, the alpha emitter. So now that we have a sense for what that safety and efficacy profile looks like for -- to avoid stacking safety signals, we're taking that 3 millicurie and lower it down further to 1.5 millicurie. The animal data really supports lowering doses as well. And so we're now actively enrolling patients in that 1.5 millicurie cohort in either monotherapy or combination with Opdivo.

Okay. And... It was, I believe, kind of some renal accumulation of the drug. Is that something that...

So you get normal expression of MC1R in the kidneys as well, the kidneys tend to be the path for any -- for almost any drug to be cleared from the body, right? So either going to be through the hepatobiliary system or through the renal system. And so you do want to monitor kidney exposure very carefully. And so we are starting to hit some calculated thresholds at the 5-millicurie dose level that would make us really be thoughtful at watching those patients through. And so lowering the dose lowers the overall kidney exposure. So we did see that there was a calculated kidney dose, but we did not see anything manifest clinically acute or chronic to imply that there are any damage to the patient's kidneys from this.

Okay.

So I want to be really careful about that because there's a nuance there. There's calculated limits for kidney exposure that are based on historical external beam data. So taking a different energy form and trying to extrapolate what that could mean from a safety perspective. But with -- in this case, we didn't see anything show up on any of the biochemical markers to imply any issues with the kidneys in these patients at all.

Yes. And that -- I assume as you kind of explore lower doses, any of those worries or concerns or points of monitoring will kind of diminish?

So we have a strong attention to making sure we look at everything very carefully, potential heme tox, kidney tox, cardiac tox. We look at everything across the board. But lowering the dose of the radioactive material really lowers those theoretical calculations for kidney as well. And so we found in the animal models that there are -- it's more sort of parabolic shape response curves where you want to find the right part of the curve so you can actually get enough of the neoantigen exposure or generation to actually let the immune system do its job. You don't want too much radiation to overload either the immune system or to cause theoretical kidney damage. And so finding that sweet spot by lowering the doses down, follows the animal data from an efficacy hypothesis while having less burden and less potential load on the patient.

Okay. When should we expect the next data set? And what's the right path for success in these patients, whether it's the monotherapy or the combo?

So it's a really tough field in melanoma. We know what the PFS data looks like in the post second-line plus setting. We would love to see if we can actually explore dosing patients earlier in the disease progression to allow a much greater potential -- potentiation of the immune checkpoint inhibitors, give the immune system something to grab on to by having this neoantigenic form generating alphas on board. When we actually think about where we're trying to get to, the fact that we took patients with really short expected PFS and have them extend out so far is always a big plus. We see that as a win. We'll follow the data wherever it takes us. What we are committed to doing is giving regular enrollment updates at our quarterly earnings and then have people track through. The melanoma program has 3 doses of the drug, so 8 weeks apart, whereas the neuroendocrine program has 4 doses, 8 weeks apart. So there is a slightly different kind of range of time that we look for.

Perfect. I'd love to move on to the FAP target. It was a really interesting target. How do you differentiate versus the other players within that space?

So I appreciate we just have a minute left here, but FAP is a really interesting target. The stroma that forms when cancers get big enough, they have to form their own infrastructure is a really complex structure. There's the competing hypotheses if it helps or hinders the immune system's ability to go and address it. At the end of the day, no one thinks that stroma is good or beneficial in the fight against cancer. It seems to help the tumor out. And so taking out the stroma at the end of the day and also any tumor associated with the stroma and the stroma forms almost a web and a sponge-like structure within the tumor. So getting an alpha emitting therapy into the whole complex tumor structure is a big plus. What's really different about our approach is that we've actually targeted not just the stroma, but optimize the molecule so we don't get accumulation of other tissues. So prior FAP targeting agents have had different initial biodistribution. At the 4-hour mark, they've kind of peaked in the tumor and then they sort of moved out. And those have been really interesting imaging agents, whereas we've designed ours to go into the tumor out of the gate and stay there over the half-life of lead. And so designing a therapy means hit the tumor hard and fast, have it bind and have it stick.

Perfect. So with one second left. Thank you so much. Always a pleasure, [ Johan. ]

Likewise. Thanks, Peter for having us.