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

Hello, everyone, and welcome to the PharmaMar LAGOON trial conference call. My name is Carla, and I will be coordinating your call today. [Operator Instructions] I would now like to hand the call over to Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, to begin. Please go ahead when you're ready.

Thank you, Carla, and good afternoon to everyone, and thank you for joining us today for the LAGOON trial conference call. On the call with me today are Luis Mora, Managing Director of PharmaMar; José Antonio López-Vilariño, Global Product Lead of Oncology; and Pascal Besman, Senior Vice President of Strategic Development. And after our comments, we will open the floor for your questions, and we'll take the briefing questions. Let me just make mention that all these are recent questions, questions only related to the topic today, which is the LAGOON trial. And before we begin, please note that our full safe harbor statement is available in the corporate presentation in our website, together with the press release about the results of LAGOON issued on Friday. And we undertake no obligation to update these statements except as required by the applicable law. Pascal?

Thank you, Jose Luis, and good morning or good afternoon, depending where you are. I'd like to make 4 quick points to make sure they are well understood by everyone, even though they were included in the press release we put out on Friday. The first one is that we stated clearly, I believe, that we did not meet the primary endpoint, which was overall survival of lurbinectedin monotherapy versus the control arm. And as of today, with not complete data, what we can say is you can control a lot of things in a clinical trial, but you can't control everything. And in this case, point number two, the results were very surprising to us given the strength seen in the control arm, fully 30% better compared to all historical trials, as quoted in the press release. Number three, the safety was better than the control, consistent with prior studies and real-world data, with no new signals. As of today, we believe that given our recent approvals in the first-line maintenance setting, that the revenue impact for PharmaMar will be modest. Lastly, we do not expect any impact to our first-line approval, and that regulatory reviews that are currently underway in the first-line setting will not be affected as well. To summarize, we are fully focused now on the first-line launches. With that, let me turn it over to Dr. López-Vilariño to go over some of the clinical information he can share. Thank you.

Thank you, Pascal. Good morning, good afternoon. I will just make a quick review on the protocol design, just a little reminder of what we are talking about. The LAGOON trial was a Phase III randomized trial in relapsed small cell lung cancer. Patients to be included must have received a prior platinum-containing line with or without an anti-PD-1 or anti-PD-L1 agent as per standard of care in first-line small cell lung cancer when the LAGOON trial was designed. Patients with chemotherapy-free interval less than 30 days were excluded. And patients with ECOG 0-2 were included. At the moment of randomization, patients were randomized into 2 different experimental arms. Arm A was lurbinectedin as a single agent at 3.2 milligrams per square meter, given 3 weeks. Arm B was the combination of lurbinectedin plus irinotecan. And Arm C was the control arm, which was an institutional choice between topotecan given either orally or IV, or irinotecan given at 350 milligrams per square meter in 3 weeks after the last clinical trial in which irinotecan was used as a control arm, which was the [indiscernible] trial irinotecan was used. Patients were stratified according CTFI, meaning chemotherapy-free interval between sensitive and resistant, according to the fact that they had received prior treatment with IO, according to LDH values after a lower normal limit, according to CNS involvement and, of course, according to the investigator preference for the control arm. The primary objective of the trial was overall survival and the secondary endpoints were the usual ones: PFS, the duration of response, safety and, of course, patient reported outcomes. I must say that the trial was conducted impeccably in all aspects. And as I've said, the primary analysis was the comparison of overall survival between the monotherapy arm and the control arm. As Pascal has said, did not meet the primary overall survival endpoint, making any further analysis exploratory. And that's the end of my [ turn ].

Okay. So this, we'll conclude our speech today, and we'll open the floor to questions. Carla?

[Operator Instructions] And our first question comes from Ami Fadia with Needham.

My first question is if you could elaborate a little bit on the impact on revenues. So it's obviously the market is moving towards utilizing Zepzelca in first-line maintenance and that's where the growth opportunity lies. Would you anticipate any impact on a temporary or a short-term basis to the utilization in second line as -- while the first-line maintenance utilization ramps up? So that's my first question, and I have 2 other quick ones.

Hello, Nadia. I am Luis. Well, regarding USA, just as included in the press release, we have not modified the guidance they show in the better beginning of this year. Then for our part, this is a new stage [indiscernible] don't modify guidance regarding the revenues. Regarding Europe, the impact in the short term is not impact. We are -- the indication approved is in first line. Our efforts is in first line. All the market access are ongoing in the first line. Then we don't expect any impact in our potential revenues in the next years for this setting. Relating other territories, probably the more relevant territory is China. And China [indiscernible] our partner is [indiscernible] lurbinectedin in the approved indication, clinical use, patient access, ongoing medical communication in China are not affected on these LAGOON top line results. The product [indiscernible] approval for the [ NPA ] in December '24, and this approval status remains valid. I want to remark, our partner has conducted a local pivotal trial in China as a confirmatory trial for this approval. Then we don't expect it in our potential revenues, these results come from the LAGOON.

Got it. That's helpful. With regards to the agreement with Jazz, was there any anticipated milestone following this data readout that we should just be aware of for modeling purposes?

Well, we never disclosed the [indiscernible] come from our partners. But I want to remark the drug was approved in 2020, conditional approval for second line and was approved last year for first line in the same indication.

Okay. And maybe just a broader question. As we think about the activities that are ongoing currently for the pricing negotiations, et cetera, in Europe, can you just talk about the latest progress in terms of that and how we should anticipate some of the commercial activities ramping up in Europe and where we should anticipate revenues coming in from?

Well, all the activities are ongoing as planned. Our dossiers for pricing reimbursement are ongoing in different countries in Europe. The data for submission after the -- we receive the approval from the European Commission are on time. The first country where we will launch the products will be in Germany. In Germany, as a special condition, you can launch the drug [indiscernible] price. Then this is the first country, Germany and Austria. In the rest of the countries, depending on the timing for negotiation pricing, we will sequentially launch -- we will launch the [indiscernible]. All is ongoing as planned before. And it was not affected, the LAGOON trial, IMforte trial based in first-line approval. In fact, the population is different. To remark, the IMforte trial is a combination trial of atezolizumab and is first-line maintenance therapy. This is completely different than second line.

And the next question comes from Joseph Hedden with Rx Securities.

I'm just wondering if I could dig a little further into control arm, if possible. So I'm just wondering if you have the information on what proportion of patients got [indiscernible] who received irinotecan and whether you saw any meaningful difference in the overall survival between the 2 agents. And then is there anything else in the control arm that might explain it much better than [indiscernible] performance, such as availability of supported therapies or imbalance of subsequent lines of treatment, et cetera?

Yes. Thank you for the question. Yes, at this moment, we are reviewing all this data, as you could perfectly imagine. In terms of balancing between the control arm, there is no real big disbalance between both options, being nearly half and half of patients receiving topotecan and irinotecan. And as said, at this point, we do not have a clear explanation on this. It's true that by way of comparison, in the most recent Phase III clinical trials in relapsed small cell lung cancer, in which not only topotecan, but some other options have been used as a control arm, it's pretty well known that the median overall survival is, generally speaking, is around 8.3, 8.4. So the control arm of the LAGOON trial was over around 25% to 30% higher than the average of these last clinical trials that have been performed in this setting.

Okay. And then perhaps, does this result will impact the compassionate use program in France and perhaps the sales that you see there before you see a first line launch in that territory?

In principle, no. The compassionate use in France is ongoing in second line. But now the situation in France changes from the recent approval in first line. Then when the drug is approved in any line in France, is accordingly the procedures start the [indiscernible] is different model than compassionate use, but in first line. Then if we take in account [indiscernible] of the LAGOON is [indiscernible] already, probably takes several months, in this period of time, the [ Axes reco ] in first line will be open in a few weeks. Then these new [ Axes reco ] will substitute the compassionate use in second line. But this is independent of the LAGOON result. This is the procedure.

[Operator Instructions] The next question comes from Kambiz Yazdi with BTIG.

Have you heard Jazz had any preliminary communication with the FDA about the status of [ 2L ] accelerated approval on LAGOON? What are kind of reasonable time frames around [ 2L ] U.S. labeling discussions?

Well, the [indiscernible] the top line was already shared with the FDA. But now is Jazz territory. But in this, the final [indiscernible] report, I explained before, is not already finished. It probably takes several months. It's normal in this type of clinical trials. But it's never there's any kind of time line about these potential discussions. What is interesting of this trial, and I want to remark, the P value is not positive in favor of lurbi, but even it's not favoring the control arm. And it's very important, the safety profile in the lurbinectedin arm is much, much better than the control arm. Then in any case, the patients can receive lurbinectedin in the point of view of the safety profile, it's much better and non-detrimental in the efficacy. But in any case, this will be a discussion with our partner and the authorities.

The next question comes from Juan Ros with ODDO BHF.

I'm sorry, I just had a trouble connecting, so maybe they were made already. In any case, I just want to know if the payers are already reacting to the LAGOON data, or maybe do you expect any kind of reimbursement issues in the short run? Or do you expect it to remain unchanged until the FDA provides a formal review? Also, maybe I want to have your opinion on physician confidence on Zepzelca in first line after the second-line monotherapy reading. Do you think it could be impacted at all?

In the first-line setting, the market access process and procedures, even the joint clinical assessment, is never affected. It's not for this second-line trial, because it's a different population, et cetera, et cetera. Then the impact is zero. Regarding other countries where the drug is already ongoing in this type of market access in first line, is the same setting. What is interesting, and this is what will happen with the potential new drugs are today in the same process in second line for market access. And if the FDA will take in account this new data for topotecan, I don't know. For these other drugs are actually in this process. And regarding the second part of your question on the physicians' confidence on the efficacy of lurbinectedin in the first-line maintenance, it is important to point out that the first-line maintenance data in the study, the IMforte study, has been performing at different settings with a different population, which is first-line maintenance, instead of the LAGOON trial, which is second-line relapsed small cell lung cancer.

And the next question comes from Jaime Escribano with Santander.

One question from my side. So in terms of next steps with the FDA, so my first question would be we assume that Zepzelca will continue to be sold in the U.S. in second line until at least the FDA makes a decision. And how many months or how is the process? Maybe if you can elaborate a little bit on what are the next steps in terms of the discussions and when the FDA could decide anything. And then maybe a second question. Do you have the opportunity to speak with Jazz to understand how much of Zepzelca in the use are coming from first line and how much in second line? Because I presume there's a cannibalization and probably most of the patients are being treated in first line. So I wonder what is the impact in the end, the real impact in second line in Zepzelca U.S. sales.

Jaime, in terms of the playbook for the FDA, this is not something that's got a playbook. There is no set time lines written or statute that you must make a decision by the 6 month or anything like this. So thinking aloud, just generally speaking, not in this case, as Luis has already said, we don't have the complete study report yet and we won't for probably 3-plus months. At that point, we need to understand what's in the report, but more importantly, Jazz does. And at that point, it's submitted to the FDA, and then they need to understand what's in the report. At that point is when if there are going to be discussions that they would begin. But how long they last? I can't tell you, I can say that in every case in the last 15 years where a drug has ended up getting withdrawn, it's been a relatively drawn-out process accumulating from 1 to 4 years, unless it was voluntarily withdrawn very promptly. Regarding the second question of percentage of Jazz's sales in the second-line setting, I'll let Luis answer that one.

Well, it's not disclosed, but the number of patients first line or second line. What we say is that you'll see the first quarter sales increase [indiscernible] figures. Then this is -- represents the big efforts for Jazz in the USA, obviously is in the first line treatment where demonstrated that it would be clinically meaningful results. But we don't have this disclosure between one first line or second line.

[Operator Instructions]

Thank you, Carla. We've received a few questions in written. Some of them have already been answered. Most of them are in relation to topotecan or if these [indiscernible] the approval in first-line maintenance, which have already been answered. But since we received quite a few of them in this regard, I'll ask Pascal, if you want to repeat what we've mentioned in -- about the first line maintenance.

Thank you, Luis, and thank you to people who posted those questions. The second line approval has no impact on existing approvals in first-line maintenance. And it's not going to have an impact on those, even those that are ongoing deliberations on a regulatory level currently. Each trial has to stand on its own 2 feet. And especially in this case where the safety profile was actually better, there was no harm done to patients. We expect there to be absolutely no regulatory impact from this other than in the second-line setting, which is primarily in the United States. Jose Luis?

Yes, again, a lot of questions or comments about topotecan. It's been a surprise, the outcome of the control arm. So Jose Antonio, if you have any further comment on this?

Yes. It's true that, as I've said before, the control arm of the LAGOON trial has outperformed in a way that has never seen in the most recent clinical trials in which topo or irino have been used as comparators. Nevertheless, although the LAGOON trial did not meet the primary objective, the comparison between lurbinectedin in single agent and the control arm was not [ detrimental ] against lurbinectedin. And importantly, safety profile of lurbinectedin was much better than the one of the control arm, with around half of, for example, treatment-related adverse events Grade 3/4 when compared to those of topotecan.

Thank you, Jose Antonio. We received other questions about the commercial prices in Europe and how the reimbursement is going, which we've addressed already. And we received some others related to the call today. So we'll be happy to answer all these questions offline in phone or e-mail. And all the questions in regard to the trial today are done. So with this, we conclude our call today. Thank you very much for joining, and Carla.

Thank you. This concludes today's call. Thank you, everyone, for joining. You may now disconnect. Have a great rest of your day, everyone.