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

Good afternoon to everyone, and I would like to welcome all of you to our ATLANTIS results conference call. On the call today with me are Mr. Pascal Besman, Chief Operating Officer of PharmaMar U.S.; and Luis Mora, Managing Director of Oncology. As we normally do, following our prepared remarks today, we will open the line for questions. But before we start, just mentioned that today's conference call may include forward-looking statements regarding future events or the future financial and operating performance of the company. And such looking forward statements are only predictions based on current expectations, and actual results might vary from those projected. We disclaim any obligation to update any information provided herein. We refer you to our safe harbor statement on our corporate presentation, which is available on the website. As announced today, the Phase III trial ATLANTIS, which was evaluating Zepzelca in combination with doxorubicin for patients with small cell lung cancer, following one prior line of treatment with platinum. Unfortunately, did not meet the primary end point of OS. As stated in our press release, there was no adverse effect on OS with the lurbi arm, which, of course, is a total negative, and we can figure it out what that means. And as well, key secondary end points favored the lurbinectedin combination arm. As for the safety profile of the study, lurbinectedin and doxorubicin combination was better compared to the topotecan or CAV arm, which were the control arms in line with what we've seen in previous trials. Finally, we would also like to thank -- or to take this opportunity to extend our gratitude to the patients, physicians and their staff and as well as caregivers who participated in this clinical study. And also to thank all the PharmaMar employees and teams who helped to bring this trial to conclusion. I now will turn over to Pascal Besman, our Chief Operating Officer, in U.S. Pascal?

Thank you, José Luis. Good morning or good afternoon to all of you. Just a brief recap on the trial design, which was 613 patients with second-line small cell lung cancer subsequent to a platinum front line, including treatment, and they were randomized 1:1 into lurbinectedin/doxorubicin, known as the experimental arm or the physician's choice of topotecan or CAV, the control arm. And the trial had 90% power to show a hazard ratio of 0.75. And as we've been transparent all along, we modeled the control arm to come in at 7.5 months, which would have given us a successful trial north of 9-ish, something like that. What we can say at the onset is that the trial was well designed, well modeled, with excellent conduct and controls. Just a little bit of history. I want to say, originally, this ATLANTIS trial was designed as the registrational trial to be supported by the monotherapy basket trial, which ended up getting reversed and the monotherapy supporting our accelerated approval, which we got with our partner, Jazz, in June of this year. There are big differences really in monotherapy and the combo therapy of ATLANTIS patient populations, which should be remembered. First of all, the dose is very different, 3.2 in the mono versus 2 mg here in ATLANTIS. There were no brain mets in the mono. They were allowed here at stable. The chemotherapy-free interval here was 30 and up, whereas in the monotherapy, it was 0 and up. And the primary end point was ORR in the monotherapy and here was OS. So those are the main differences to bear in mind. As I've said, the monotherapy led to the approval on June 15, which Jazz launched in early July and recently reported a very strong first quarter results, which we congratulate them on despite the limitations being placed on everyone due to the pandemic. So addressing ATLANTIS. Unfortunately, as José Luis said, we did not meet the primary end point. Nevertheless, I must say, again, as we said that the primary end point did not have adverse overall survival compared to the control arm, and that the key secondary end points and subgroups all favored the lurbi/doxorubicin arm. There really is no one reason we can point to today that could explain why we didn't meet the hazard ratio that we aimed for. As I said, the trial was conducted well, was well powered in size with control arm behaved and yet we did not reach statistical significance. In terms of safety, there were no new safety signals observed and across most safety parameters, these favored the experiment alarm. Net-net, we're disappointed. However, these data do show the drug is active in this disease and setting, and we expect to see the Jazz launch of the monotherapy to continue apace. So now I will let Luis discuss what the data means from a regulatory point of view and what next steps are there as well as give you a high-level view of our 2021 plan. Luis?

Thank you, Pascal. Well, after these results show the ATLANTIS trial, this is a top line result. Then our team are working in all subset analysis in view of this trial, and we will finalize this analysis and we will show to the authorities in Europe. In FDA, we have Jazz in charge of this on the data. Regarding Europe, when we will finalize this analysis, we will present to the authorities. Remember, we are committed in the small cell lung cancer in -- not only in U.S.A., but in other countries where we have already submitted the trial. It's based in the monotherapy. The large main patient basis program in Europe, we have treated more than 1,000 patients are in monotherapy then. We strongly believe the monotherapy will be the solution for the patients in -- across the world. This trial, as Pascal explained before, was designed before we know the monotherapy works very well in the small cell lung cancer, and this is the next steps for PharmaMar who enacted in monotherapy in the rest of the world, included Europe. Regarding the high level of 2021 plans, PharmaMar, a part of small cell lung cancer, we plan the other tumor types where lurbinectedin have demonstrated future activity and good level of effectivity and safety profile. In 2021, PharmaMar expected to include 2 new drugs in the pipeline. We will start the clinical trials in solid tumors. Then we will reinforce our pipeline for the future developments in oncology. And for lurbinectedin, I repeat, we have the other tumor types. We will start probably the pivotal trials on '21. And to finalize, the PharmaMar is committed with the patients in small cell lung cancer, and we believe the monotherapy is the right dose and the right drug for this disease. Okay. Thank you very much.

Thank you. For now, we finished our presentation today, and we'll open now time for questions. [Operator Instructions] And this is questions about the ATLANTIS trial. Any other [indiscernible] in the company were open and you can reach us out the normal phone or e-mail. Thank you very much. Ravi, if you want to open the line for questions.

Our first question comes from Jason Gerberry from Bank of America.

I guess my first question is, what is your internal view on whether this combined ATLANTIS data set could serve as a confirmatory to the accelerated approval? And I ask just because there are some lines in the PR about secondary end point benefit, perhaps some super responders or chemo-sensitive patients, I would assume, but also supportive of the lurbinectedin monotherapy activity. So just curious, a, if you could address that ahead of your future FDA meeting. And then I guess my second question is just the impact on dose going from 3.2 down to 2. Can you just remind us of the dose response that you've evaluated in the past and if you believe there is a dose response for lurbinectedin?

Thank you, Jason. Pascal here. So regarding your first question, whether ATLANTIS can serve in a confirmatory capacity, unfortunately, you're asking the wrong people. That's FDA's decision, and that will be a discussion they'll have with Jazz in due course when we have the totality of the data available to FDA. You're right in saying, as with most data sets, there's some positive things you can hang your hat on. Unfortunately, there's no way for us to know at this point or comment whether the FDA will want to hang their hat on them. So we'll defer to Jazz to update you on that in due course. Regarding your second question about the dose response, when we did the combination, Jason, we did a dose-ranging fixed-dose trial of 3 to 5 mgs, 3, 4 and 5, and 4 was the recommended dose from that cohort A presented at ASCO 2015. We did a conversion from fixed dose to a BSA-based dosing across all indications at that point for hematologic toxicity benefit. The BSA on average of a small cell lung cancer patient is 1.9. Divide 4 by 1.9 gives you 2.1. We rounded it down for vial size and convenience as well as rounding down doxorubicin one click from 50 to 40, and therefore, you get your ATLANTIS 2 and 40 mg dosing.

Our next question is from Christian Glennie from Stifel.

I guess in terms of the -- that prospect of confirmatory trials and things, any sense for timings on this? Obviously, it sounds like it's probably more in Jazz' court to have those discussions with the FDA. But any extent on timings for when those might get resolution on that? And then also obviously relates to when might we see the data presented at a conference?

Yes. So obviously, continuing on the theme of asking me questions I can't answer. Thanks, Christian. Just focus a bit of fun. In terms of when FDA will be engaged by Jazz, that will be a decision as to when we had time to really examine and understand the data with our partner. And then Jazz will request a meeting with them and no doubt see the next steps, which there's a multiple road. It's like a European roundabout. So we'll see. And then the second part of your question, of course, I didn't get. Just repeat it again, I forgot.

Data at a conference.

Yes. Well, obviously, we got the data yesterday. We haven't really had time to submit it yet. And even if we submit it, we're not in control of it being accepted. We think the data is pretty important. It's a very large trial in a very unmet medical need. And so even though we're disappointed with the primary end point not having been met, we would expect to submit this to a major medical meeting, hopefully, in 2021.

Okay. A quick follow-up, if I may then. In terms of your -- the potential milestone on full approval with the FDA from Jazz has been up to about $150 million in total. Is there a time -- sliding time scale element to that? Or anything you can say on that?

There is a time and we haven't disclosed when it expires. And it's not up to $150 million, it's $150 million.

Okay. And then finally, if I understood it correctly, you are -- from a European perspective, was it right, we intend to submit this data as well as the monotherapy data and then basically have that discussion with EMA about what they think of both approaches?

When we -- thank you for the question. When we finalize all the analysis, all the 2 group analyses, we will decide in this trial will support the monotherapy because the OR strategy for the company is to register the drug in monotherapy in Europe. Then when we will finalize all the analysis, we will decide if this subgroup analysis support plus the monotherapy trial, this registrational for is allowed for registration in Europe. But now our team is working on it, and we will finalize, we will decide.

Our next question is from Samir Devani from Rx Securities.

I just got a couple perhaps the first one, just on your R&D plans. If you can just comment, obviously, it looks like you're going to need 1 or 2 more studies now. Is that going to alter your plans for some of these earlier-stage new products that you're looking at? And then the second question is just on -- you mentioned that the control arm behaved as you expected. But as we all know, this study took a lot longer to complete than we had originally expected. So maybe you can just comment, does this mean there's a long tail here and that there may be just a group of super responders or not?

Regarding the third question, we expected a call from our R&D to start with 2 new drugs in next year, the clinical trial Phase I in solid tumors. Okay. But we will start, we will disclose what type of drugs are will start with the Phase I, okay? Regarding the lurbinectedin, we are planning -- we are showing some congresses the activity with lurbinectedin in other tumor types, Phase I and Phase II. And now we are still finalizing different protocols. It started Phase III in other tumor types. We don't disclose now when we'll launch this Phase III, we will disclose.

I'll take your second question, Samir. Thank you. Yes, I did say that the control arm behaved as planned. And you're right in commenting on the fact that trial did take longer than originally expected. There's 3 main reasons for that which we've previously said, but I'll remind everyone. The first thing is in the spring of '18 right around ASCO, actually. When we got the first ins of activity from the monotherapy, we changed the primary end point of ATLANTIS from PFS to OS. And obviously, OS takes longer than PFS. So that added around 6 months or so. The second slowdown was in the second half of '19. This is an event-driven trial. We needed 508 events. And in the second half of '19, the events just totally dried up right at the end of these events needed. And so what you end up happening is, you don't know which arm they're in, number one, these remaining events. And number two, we don't know if they're going to change the medium or anything for that matter. But be that as it may, you've got to wait for them. And then as what would happen when the 508 events happen was in early this year and more or less immediately after all of the hospitals where the patients had been enrolled for the CRO to access records closed due to the pandemic for 4 months. So net-net, all those things pushed out the data, and here we are. You asked about tail patients. And of course, there has to be, by definition, right, because even if the last patient was enrolled on August 1, '18 and that patient was the 508th event, that patient basically had around a 20-month overall survival. So by virtue of that, it's a mathematical truism that there were a number of tail events, which delayed the 508 event. And in due course, when we present the data, you'll have to see who's in what arm. And do you have a follow-up for you? Or that's your two?

Our next question is from Balaji Prasad from Barclays.

So could you just dig deeper into the differences between the mono and the combo trial? And maybe with the benefit of hindsight, if there was a way the trial design could have influenced the outcome.

Yes. So the dose in the mono is 3.2 mgs. For me to square it in the combo is 2 with 40 mgs per meter square to doxorubicin. So very different there. And the other exclusion/inclusion criteria, I've gone through the brain mets, CTFI, primary end point and so on and so forth. With the benefit of hindsight, is there anything we would have done? I think the -- we actually thought about that question. So thanks for asking it. I think the only answer we really could come up with was we would have gone ahead with the monotherapy from the start being a registrational trial in a randomized setting for full approval rather than having had this trial, which ended up being a trial design a lot of people didn't care for based on the combinations and so on. Nevertheless, I keep repeating, it's a good-sized trial. It's quite a bit bigger than the other Phase IIIs we've seen recently that have been in the 475 patients over a 2-arm trial. And so you have to accept that we're in the risk business of doing clinical trials. And sometimes, with good planning and good modeling and good execution you still don't come up trumps. So that's the business we're in.

Our next question is from Joseph Hedden from Rx Securities.

On the secondary end point, you mentioned that their favored lurbinectedin, but could you say if any of those were statistically significant at this time?

So none of them can be statistically significant, Joe, by virtue of missing your primary end point or subsequent analysis of deemed exploratory, I think you're asking me whether the p-value is less than 0.05 on any of them, and you're going to come up 0s on that one as well because we're not going to disclose that one. Good try, though.

We have a question from Christian Glennie from Stifel.

Just a follow-up just quickly. Again, it's worth asking if ATLANTIS isn't confirmatory from FDA, what sort of trial do you think could be possible in the setting that it doesn't provide that confirmatory, given that, that [ cell ] from mono potentially rapidly becomes the main second line end point?

It's too early to really answer that, Christian. Jazz and ourselves and the FDA will meet and discuss and see if a confirmatory trial is required. At that point, we'll discuss with them what they have in mind and see if we agree, and we'll undertake which trial that we think gives us the best chances for success.

Our next question comes from [ Jarrod Smith ] from [ L'oréal Capital ].

It's nice to see that the positive signals here, Luis and Pascal, could you give us a sense maybe of what was unexpected from the data?

Yes. The unexpected thing, thank you for the question, was that when you have a trial that is well modeled, well planned, well powered, well sized and a drug that works in the setting. All things considered, when you open the envelope, you'd expect that you have a hazard ratio and a p-value that's positive. And so it's disappointing not only that we didn't meet the statistics we wanted, it's -- I guess it's a little disappointing. We can't blame anything. We can't sit here and say, control arm did so much better. It blew us up. Or we had some Ukrainian patients who corrupted the data or it was subsequent therapy. I guess what's unexpected is we don't have anything unexpected. So thank you for the question. I hope my answer surprises.

This concludes today's Q&A session. I hand back to the management team.

Thank you, Avi. Thank you very much for your help today. And I would also like to thank you all for joining us in our conference call today. For those of you who like to meet with the management virtually, we'll be participating in the forthcoming virtual health care conferences, and we hope to see you there. Thank you very much.

Thank you.

Thank you.