Pharma Mar, S.A. (PHM) Earnings Call Transcript & Summary

Thank you for attending the European Biotech Investor Day hosted by Solebury Trout, Goodwin, Deutsche Bank and Nasdaq. My name is Brian Korb, I'm the Managing Director here at Solebury Trout. I would like to remind you that you can submit your questions throughout the presentation via the web platform. If we don't have time to answer them during the presentation, we can follow up with you individually. I'd like to -- with my pleasure to introduce the next speaker, Pascal Besman, COO of Pharma Mar. We also have Jose Luis Moreno on the line as well for Q&A. Pascal, please go ahead.

Thank you, Brian. Thank you to our sponsors, and thank you for the audience for attending. This is exciting time for Pharma Mar. So I'd like to just show you our disclaimer, which is a very good one. I would like you to read it. And I give you now the overview. Pharma Mar is a globally integrated biotech company. Everything we do is inspired from the sea and focused on oncology. We have 3 approved drugs in various jurisdictions, starting with Yondelis, which is approved in 80 countries. Aplidin approved in Australia and with last week's very happy to report approval of Zepzelca or lurbinectedin by the FDA for small cell lung cancer. We have our own sales force in Europe, and we use partners elsewhere or distributors. Our late-stage pipeline includes the ATLANTIS randomized trial, which should read out in the second half of this year, and we plan on expanding the Zepzelca programs with our partner, Jazz in the United States. So we had revenues last year. As you can see, our market cap is a bit higher than this with a good move today as we're listed in Spain. So just in terms of what we do, yes, we go diving all over the world. We take marine samples of invertebrates. We look for them for activity in various cell lines and where we get those hits. We then synthesize all our products so that we don't have to go diving when we run low on inventory. We run the clinical trials, and we have our own commercial force, which we use in Europe. So right now, we are in a transformative time, and that's as a result of the program for lurbinectedin or Zepzelca in relapsed small cell lung cancer and our partnership with Jazz Pharmaceuticals. Jazz has so far paid us upfront $200 million in January that was received, and we are due to receive another $100 million over the next few days for the approval milestone. What we say about the transformative time and what we're going to be doing going forward is, we're going to continue to prosecute our marine compounds that we've got library of and future candidates that we'll be working on. We intend to work with our partner, Jazz, in determining the best indications to put lurbi to do the traditional pipeline within that drug. And there are particular areas mechanistically that would be potentially suitable, such as ovarian or sarcoma, there are other tumors as well and perhaps moving upstream into earlier stage and in small cell. And in addition, we are running a large search of potential late-stage or commercial opportunities that we could layer into our commercial infrastructure in Europe. So just to recap the deal briefly for you that we signed with Jazz in December. Just a couple of days after we had filed, the upfront payment was for $200 million received, $100 million coming, $150 million if and when we convert within a period of time, that accelerated approval to a full approval. There are then commercial milestones as well as other indication milestones and a royalty rate from the high teens up to 30 where the rate points have not been disclosed. Looking at our pipeline, just recapping Yondelis approved, depending on the country, so that’s soft tissue sarcoma or ovarian or in certain cases, both such as in Europe, Aplidin approved for late-stage multiple myeloma in Australia, and Zepzelca or lurbinectedin now approved by the FDA in second-line small cell lung cancer, 2 earlier stage compounds going through dose 1 proof-of-concept -- Phase I proof-of-concept dose-ranging trials and we will update that as appropriate. So what is lurbinectedin? Lurbinectedin is an analog of trabectedin, and it is an inhibitor of [ asforent ]-activated oncogenic transcription, and that -- which is a bit of mouthful. Basically, small cell lung cancer is often called the cancer that is addicted to transcription and we inhibit that process as well as impacting the tumor microenvironment and having an immunomodulatory effect, which is what we've seen with Yondelis, and we believe we're going to see with lurbinectedin a more pronounced impact of the end of the tail curves in the Kaplan-Meier's rather than upfront. So a bit primer for you on small cell lung cancer. Small cell represents about 15% of lung. This is a tumor that is almost always related to smoking or past smoking. It is a very aggressive tumor that has a very high mortality rate and few treatment options. These patients tend to be older, have significant comorbidities. It represents still a significant unmet medical need, although in the last couple of years we finally have been making some progress. For years, the frontline treatment has been platinum-etoposide for 20 years. And that's now been added to by either durvalumab or atezolizumab in the frontline setting. Now we have lurbinectedin joining topotecan as approved drug. Topotecan was approved first in 1996, and we've had the accelerated approvals of both nivo and pembro in the third-line setting. So just looking at these recent approvals makes the top part of this chart look a lot better than it used to, but you can still see clearly that the non-small cell lung cancer seems to be getting a lot more Christmas presents under their tree than the small cell. And as we get ever smaller slices of those pizza pies, it begs the question, why is this? And the answer is relatively straightforward, which is all of these advances in non-small cell are targeting an oncogenic driver mutation and so either to blocking the receptor or the ligand. And that is not what is driving small cell lung cancer, where here it is really mutations in tumor suppressor genes almost ubiquitously TP53, RV1. And as eloquently put by Dr. Rudin, a good friend of the company, it is very difficult to turn off an off switch. Small cell, especially in second line, has been a graveyard of drug development with many different drug classes, including the checkpoint inhibitors, failing in that setting. So it’s very rewarding for us to be in the stratified air of those who've got an approved drug, especially in second-line small cell. Just looking at the treatment paradigm in the United States, as I mentioned, it's upfront platinum-etoposide with -- for 4 cycles only. And with that, using atezo or durv and you continue the atezo or durv beyond the 4 cycles until progression, which is usually about 2 months longer. So that's one label, there's no maintenance label, although it is viewed as a maintenance setting. In the second-line setting topo and ourselves are approved and there's a dozen or so NCCN guideline-recommended drugs, which consist of primarily some generic cytotoxics, temozolomide, which is used for those with CNS mets and you still have the legacy here, nivo, nivo/ipi and pembro, although it is a qualified opinion by NCCN where they essentially say, they should only be used in an IO-naive patient, of which there are not many in the United States. So we think that there's an interesting shift in what's going on here -- sorry, I don't know how I did that, need to go back. We think that there's an interesting paradigm change here going on as a result of recent changes. And by that, before atezo got approved, we thought that about 60% of frontline patients were getting treated in second line. The remaining 40% basically being those who pass away during frontline, those who choose to not get any further treatment because of the adverse events generally, those who go to hospice or those who choose something alternative. But now that we've added atezo and durv here that go beyond the 4 cycles of platinum-etoposide, you're essentially giving patients a 2-ish month chemo holiday. And we believe that, that's going to make more people once they get the second line, be willing to have more treatment and push that 60% up. And secondly, we think that the addition or option of Zepzelca now, which has a relatively tolerable profile on the adverse events, will be a viable choice for some of the other people as well. So that's yet to be seen, and I'll show you the data about the adverse event profile momentarily. So let's go here. We have 2 different trials. We have a combination Phase III program, which was born from a Phase II of 27 patients and the subset of 21 is the subset being used by ATLANTIS, which are those who have a chemotherapy-free interval of 30 days or more. This shows an overall survival of 10.2 months and that combination Phase III should read out in the second half of this year. The monotherapy, which was originally meant to support this randomized trial ended up as a result of some very good early data and FDA is blessing becoming the registrational trial, whereby the ATLANTIS study now may serve as a confirmatory and supportive trial. So that monotherapy was first presented at ASCO of last year. It’s been published in Lancet, and much of the data can be seen in the label. So now just digging a bit deeper into the combination, doxorubicin is not per se approved or in the NCCN, although it forms part of CAV, which is Cyclophosphamide-ADRIAMYCIN vincristine. So the A is doxorubicin. And the reason why we went with this drug is that we saw the best preclinical synergies between the 2. And it is also widely used in Europe. So it's a lower dose than in the combination for lurbinectedin. It's 2 mgs versus 3.2, and that's to account for the fact that doxorubicin does bring some hematologic and cardiotoxicities to the table. In the Phase II trial that we presented this data to, where we saw quite strong ORR, the column to the right being a subset of the left middle column that is the Phase III population. Objective response rate there, very strong and disease control rate is something to focus on in this disease, as it's so aggressive because those who are not in these control rates sadly are progressing and are likely to perish relatively soon. The overall survival there was 10.2 months, which is the second best ever overall survival in the relapsed small-cell setting, the best being our monotherapy data. And this trial did not have primary prophylactic G-CSF, while it is mandated for all patients in the Phase III and the stats plan here is relatively straightforward, and I'm not going to read it all. You can do that in your own time, the slide deck's on our website. The last event of this trial happened this year. We did get some COVID-induced delays from March until mid-May as centers were focusing on COVID and also locked down. So we still think we'll have data in the second half of this year. If that ends up not being possible, we'll announce that but it won't be too long later. It's interesting here to see that between the dealer's choice of topo and CAV, it ended up being CAV with 58% of the patients. It's quite interesting. It started out -- when the trial started, topo was getting the bulk of it and many doctors said, well, I used topo for the first time in years in patients and after 1 or 2 patients I realized why I haven't used it in a number of years, and I switched over. It's just a very, very difficult drug to give, has modest efficacy, heavy toxicity burden and because they made us use the approved IV that involves a trip to the infusion center 5 days out of 7, which is quite cumbersome for an already sick and frail patient. So moving along to the monotherapy. This data was presented at ASCO and led to the approval. So I'm just going to show you a brief collection of the data. Here, the ORR at 35% and the disease control rate just around 70%. You can see in the waterfall, the purple patients, there's quite a few resistant patients, which toco's label does not cover, who are getting quite a profound benefit. This is one of the things that the KOL community that we've spoken to found the most compelling. And the other thing that was interesting in this data where there were 8 patients that had prior IO. Now this is to be taken with a rock of salt or pinch of salt, depending on your point of view. This was a post hoc analysis, and there was no washout period of the IO. Nevertheless, 5 of these 8 patients had a response on lurbi post IO and quite a few of them seemed to have a better response in second-line than frontline. And this is not a surprise because mechanistically, we were of the belief that we would work well with IO and are, in fact, currently in 2 dose-ranging proof-of-concept trials, one with pembro and one with atezo, which we hope to have readouts later this year. So this is the safety data. And most of these adverse events are what are called paper toxicities, the patient doesn't feel them, and most of them are treatable with supportive care and other things. There was no prophylactic G-CSF in this trial either. We think, in the real world, there will be. And the febrile neutropenia rate, which is the worst of these adverse events, at 5% seems pretty well under control, especially when one compares it to these non head-to-head comparisons with topotecan, which on top of everything has a 5% death by sepsis rate in its label. So we think that this will be a preferred option, and we think Jazz did a really sound job launching this drug and their launch is slated to start in the second week of July. So in terms of IP, the small cell indication is orphan, it gives us 7 years from last week. The composition of matter is current in 2024, although given the length of development time, we think we're entitled to full restoration under Hatch. And just briefly, our patent distinct in terms of the Yondelis, our older drug has lost its orphan, so that's there. Our other drug, Aplidin or plitidepsin, comes through a different marine organism and got approved by Australia for late-stage multiple myeloma. Earlier this year, when SARS-CoV-2 emerged, we were reminded, knew that Aplidin works by inhibiting EF1A, which is implicated in viral reproduction of coronaviruses. And as such, we then did some in vitro work, not in SARS-CoV-2 because the model at that time wasn't available. But in a first cousin, shall we say, it showed a very potent sub-nanomolar potency. And with that, we ended up speaking with the Spanish authorities and are now in a clinical trial, proof-of-concept trial with 3 cohorts, dosing 3 different doses, dosing for COVID early patients. This is asymptomatic, early-stage patient would be less -- much less than the myeloma dose and for a shorter period of time. So quite optimistic there, and we'll be pursuing other jurisdictions as well as time goes on. We've also -- there was a paper written and published on April 30 from Nature in which the authors, [ in lead-off with ] Krogan, looked at various protein-protein interactions with virus to human and honed in on about 67 of these of which EF1A was one of the ones they really focused on, unaware of Aplidin’s existence. The guy who did that portion of it, who is from Mount Sinai, ended up being in touch with us and has since done some in vitro work on Aplidin with the SARS-CoV-2 model, which again reconfirmed a very high potency at sub-nanomolar concentrations. So we have a revenue slide, even though we're a biotech company. I would mention here that in 2019, we did not receive the money from Jazz. It was received technically when Hart-Scott-Rodino last, which was in January, and so there'll be a big bulge this year as we should have received the minimum of $300 million. Our R&D has come down in the last few years, and that's really been a function of Phase III trials maturing and no longer spending there. We do continue to spend on our basic R&D in looking at the marine invertebrates and intend to do so as well. And then obviously, as I mentioned earlier, we're going to have a BEL effort in trying to bring in other assets that would be commercial stage or late-stage for our commercial infrastructure. So I've gone through this in a relatively short amount of time on purpose so that we would meet time for questions, and so I'm going to turn it over to my colleague, Jose Luis Moreno who's going to moderate the Q&A.

Thank you, Pascal, and good afternoon to everybody, and thank you very much for joining us today. We have a few questions. We have got quite a few questions and a bit of a limited time. So what we'll do -- and since there's quite a few questions about Aplidin, and some of them are similar or the same way, let's group them up together, and we'll address it in 2 ways. Most of them are asking about the situation of our trial here in Europe, how it's doing. And some of them are asking about the situation of our potential Phase I/II trials in the U.S. and other territories. If you want, I'll just have a go at what's the situation here in Spain and then Pascal, I'll hand it over to you, so you can talk about the situation in the U.S. In Spain, as Pascal just mentioned, we started these Phase I/II in April. It's a 27-patients trial that is still going on. We cannot update on the number of patients yet because it's an ongoing trial. But I see, as he mentioned, we're very excited about what we've seen so far because of our managing line with what we've seen in vitro. But again, this is in the middle of the trial, so there's little we can say, and we can't talk about now until this trial is finished. We -- I mean we had some difficulties, it took a bit longer than expected to start the trial, but finally started. And while the number of patients that was at the time, it wasn't as big as it was in March. So it's taken a bit longer to recruit our patients because there aren't that many patients. Now there will be -- we've seen regrowth of patients. What we've been doing is increasing the number of centers. We've been opening centers, more centers in not only Madrid, but in other parts of Spain, so to try to speed up as much as we can the recruitment. But given the amount of patients now, we have to keep up with what we can. And that's as far as the trial in Spain is concerned. Pascal, can you just give some detail about the situation in the U.S.?

Yes. Thank you. So in the U.S., we're really going down parallel tracks. The first track that we're going down is we are speaking actively with the NIAID, which is part of the NIH, National Institute of Health where now famous Dr. Fauci works. And they are very interested in various trials at the moment that may be layered into their adaptive design ACT I, II, III, IV trials. They're being quite picky. We have an active dialogue with their committee that designs which trials to go ahead with. And we expect to reengage with them in the Q3 time frame once we have some of the human data from Spain to show them as well. Simultaneous on the other parallel track there, we are in the planning stage of a U.S. company-sponsored trial, again, for early-stage patients. And we're hoping to move that along once we have some human data as well as some of the animal data, which is currently being done in both Spain and in the United States at a New York center. Thank you, Jose Luis.

Thank you. There's another question in this case about lurbinectedin. So it says, given the safety profile and all the characteristics of lurbi, what are your thoughts on exploring this for frontline therapy and could lurbi potentially play a role in the first-line lung cancer?

So as I mentioned, we are -- and it makes sense mechanistically looking at the proof-of-concept work right now. It's been going on for a number of months, one with a PD-L1, one with a PD-1. We have to obviously see that data to be able to decide if Jazz and us together wish to go after that indication. One needs to be sensible insofar as we have a 3-drug cocktail right now that's probably generating ORRs of north of 70%. And so it's a question whether a 4-drug cocktail is going to be a viable option or not, or there are other settings that are of interest. For example, there is an American cooperative group that's quite keen on doing a trial in that maintenance portion of the atezo or the durv, meaning you would go, for example, atezo versus atezo/lurbi. So those are the things that we're thinking about in the small cell about moving it upstream, and we're discussing those with Jazz and we'll proceed based on what -- where the data points us. Thank you.

Thank you. I think we've done with most of the questions because most of them were about Aplidin that we've already answered.

I think there was one question, Jose Luis, about Aplidin in China, and I'll take that one very briefly and say Aplidin was partnered in Russia, I believe in January 2019, with Luye for an upfront payment of $5 million. They have identified the go-forward dose for Chinese people and are planning to submit IND and start a clinical trial this year.

So that is lurbi, right?

That's lurbi.

Lurbi. Yes.

Oh, I see there's another question here about other countries and where and when we should expect to be filing for approval. So in EMA, we are going to wait -- get our ATLANTIS randomized data as that is -- their preference is to always have randomized data. So if that data is supportive of it, we would file that probably next year and be about a year of review. There are other countries, however, that follow FDA-accelerated approval that would be sooner than that off the single-arm trial, some examples of that being Switzerland, Canada, Israel. And then there are other jurisdictions that will follow in due course. Australia has also already been filed. And I think there are no more questions at this time. Jose Luis? I think we will wrap up there. Operator, if there are no more questions, then thank you all for your attendance, and thanks again to the sponsors, and good luck, stay safe.

Thank you.

This concludes the webcast. You may now disconnect. Have a great day.