Puma Biotechnology, Inc. (PBYI) Earnings Call Transcript & Summary

All right. Welcome, everyone, to the afternoon session of the BofA virtual health care conference. I'm Scott Puckhaber, one of the biopharma analysts here at BofA. We're really thrilled to have Puma Biotech present today and have the CEO, Alan Auerbach, with us. So with that, I'll hand it over to Alan for his presentation. Alan?

Great. Thank you very much, Scott, and thank you, everyone, for attending the Puma Biotechnology presentation. Moving to Slide #2. Just a reminder that I'm going to be making forward-looking statements. So on Slide 3, you can see the product pipeline for Puma. This consists of our drug neratinib, which is in several different indications, as you can see on the slide. We are currently approved in what we refer to as the extended adjuvant HER2-positive breast cancer space and that is based on the ExteNET trial, which was our Phase III clinical trial in the area. We're also doing a Phase II trial in the area known as CONTROL, which is to better manage the side effects of the drug. In the metastatic setting, we recently became approved in the third-line HER2-positive metastatic breast cancer setting based on our NALA trial, as you see on the slide. Then we also have 2 ongoing studies: the FB-10 study, which is combining neratinib with the drug T-DM1; and the NEfERTT study, which is a Phase II trial in HER2-positive metastatic disease. Also in metastatic disease, we're looking at neratinib in patients with metastatic cancer that has spread to the brain, and that's being investigated in the TBCRC 022 trial. Then we're also looking at neratinib in a subgroup of patients that have a HER2 mutation. These are not HER2 positive. These tend to be HER2-negative patients. And these are patients with a HER2 mutation either in breast cancer or other tumors. And that's being studied as part of our SUMMIT basket study. And as you can see on the slide, we're specifically focusing on hormone receptor positive breast cancer, cervical cancer and then other tumors. So on the next slide, on Slide 4, you can see from the commercial perspective Puma's current distribution system is separated into 2 groups. We have our specialty pharmacy network and our specialty distributor network. In the specialty pharmacy network, this is where there's a physical prescription that's written for the drug, and then it's delivered to the patients. And you can see that we have 6 pharmacies that we do prescriptions through. The specialty distributor network is what we refer to also as our in-office distribution network. And this is through the 3 groups that you see, McKesson, ASD and Cardinal Health. And this is where the bottle is physically given to the patient in the physician's office, and there is not a pharmacy involved. On Slide 5, you can see our commercial progress with NERLYNX. In the first quarter of 2020, we reported $48.6 million in revenue. That was a decline from the $58.7 million in revenue in Q4 of 2019 and an increase year-over-year from the $45.6 million in Q1 of 2019. Moving to Slide 6. One of the things that we've noted with neratinib with NERLYNX is that the side effect profile of the drug, which is a severe gastrointestinal side effect, grade 3 or higher diarrhea, tends to occur in the first month with the drug. We've noticed from studies that we've done and publicly presented that if you start with a dose escalation in the first month, so start with a reduced dose and then titrate up, it tends to have a better effect on reducing the incidence of the diarrhea and improving the tolerability of the drug. So one of the things we've been trying to do commercially is increase the number of new prescriptions that are using this dose escalation and are starting at a reduced dose. As you can see on the slide, this has been steadily increasing. We had data that was presented at ASCO in 2019, so June of 2019, on this. And as you can see, that has been increasing very nicely from 10.7% in Q2 of '19 to 19% in Q3 of '19, to 28.7% in Q4 of '19. And then in the most recent quarter, Q1 of 2020, that increased to 30.4%. Moving to Slide 7, you can see our bottles sold per quarter, and this is the bottles that were sold both in the pharmacy network and then also in the specialty distributor network. In the first quarter of 2020, we sold 4,035 bottles, and this was a decline from the 4,935 in Q4 of 2019. On our call that we did for our year-end results discussing Q4 2019, we mentioned that there was an inventory buy-in of about $5 million, which may have artificially increased the Q4 bottle numbers. And obviously, as that inventory was worked down in Q1 of 2020, it obviously decreased the bottle numbers there as well. Moving to Slide 8. We sell the drug ourselves in the United States. In terms of the ex U.S. and rest of the world, we've established partnerships with companies that have a commercial infrastructure in their given geographies. So you can see on the slide all of the regions that we've done partnerships in. That includes Australia and Southeast Asia, Israel, Canada, China, Latin America, Europe, the Middle East and then North and West Africa, South Africa and Turkey and then South Korea. Most recently, we recently announced that NERLYNX was approved in China. So we will start seeing the commercialization of that, hopefully, later this year. And in a number of these other countries, you've also seen commercialization as well. In all of our agreements with our partners, they sell the drug and then pay us back a royalty, and that's the royalty revenue that we report in our quarterly earnings statements. So moving to Slide 9, you can see our CONTROL trial. This is a Phase II trial that characterizes the incidence of the severe diarrhea in patients with early-stage HER2-positive breast cancer. This is in the extended adjuvant setting. So all of these patients have received 1 year of adjuvant Herceptin, Perjeta, Kadcyla, whatever is being taken. The way we do the study is just like our marketed indication. Neratinib is given for 1 year, and then in the first or second cycle, we do prophylaxis. That prophylaxis can be the use of antidiarrheal drugs like loperamide and other drugs or can be a dose escalation. On Slide 10, you can see this in a little more detail. When we started the trial, we first used loperamide, which is Imodium alone. We then tried combining it with other antidiarrheal drugs like budesonide and colestipol. And then in the most recent, we did a dose escalation, which is we didn't give any antidiarrheal drugs prophylactically. We just did a dose escalation where we started at a low dose and then titrated up in the first month. The side effect profile of the drug tends to be that the severe diarrhea has its highest incidence in the first month and then the incidence of it declines in the second month, third month, et cetera. So it's really that first month we wanted to focus on. And hence, that's why we do the dose escalation where we start at a low dose in -- for the first week then titrate up. And by the end of the first month, they're at a full dose. On Slide 11, you can see the results of this. This was initially presented at the ASCO meeting in 2019 and then updated at the San Antonio breast cancer conference in 2019, and this is the updated data. So you'll notice that we have the ExteNET trial and the comparator. That was our Phase III trial that got us approved. You'll notice the grade 3 diarrhea rates in ExteNET were about 40% and that declined with all of the interventions that we used, including loperamide, budesonide and colestipol, et cetera. You'll notice the lowest number you see in terms of grade 3 diarrhea rate is in this dose escalation. And there, we went down to 15%. So obviously, that's a very important move from about a 40% grade 3 level down to a 15%. Commercially one of the things that we were seeing when we first launched NERLYNX was that we were getting a lot of patients discontinuing because of the diarrhea. You'll notice in the ExteNET trial that was around 17%. Using the dose escalation in CONTROL, that decreased to 3.3%. So that's one of the reasons that we've been putting an emphasis on trying to increase awareness of this with physicians commercially is that we feel that it does decrease the discontinuation rate. And obviously, the longer the patient is on NERLYNX, the more likely they are to benefit from it. On the next slide, on Slide 12. So the market for us for NERLYNX in the extended adjuvant HER2-positive breast cancer space, there's approximately 28,300 patients in the U.S. with early-stage HER2-positive breast cancer that are treated with adjuvant treatment. In the EU, roughly 37,000. Our label in the U.S. includes both hormone receptor positive and hormone receptor negative patients. Our label in EU only includes hormone receptor positive patients. And that represents about 65% to 70% of the 37,000 that have the disease, as shown on the slide. On Slide 13, we have the treatment paradigm for the treatment of HER2-positive metastatic breast cancer. As you can see, the first-line standard of care is using a taxane, usually either paclitaxel or docetaxel, in combination with either with the drugs Perjeta and Herceptin. The second-line standard of care is using T-DM1, also known as Kadcyla. That's based on the EMILIA trial. And then third line, from a regulatory perspective, the standard of care is Xeloda plus Tykerb. And that's where we initially positioned neratinib for the metastatic was with the Xeloda-neratinib combination. On Slide 14, you'll see our Phase III trial in third-line HER2-positive metastatic breast cancer. This is known as the NALA trial, and this is a third line or later trial of patients with HER2-positive metastatic breast cancer. This trial was enrolled 600 patients, and it was testing neratinib plus capecitabine against lapatinib plus capecitabine, with a co-primary end point of essentially confirmed progression-free survival and overall survival. We also had a number of secondary end points that you can see on slide. Most importantly was the time to intervention for CNS metastases, which was looking at the time for a intervention for brain mets such as a surgery, radiation, et cetera, and then also looking at the incidence of brain mets. On Slide 15, you can see the Kaplan-Meier curve for the primary end point. This is the centrally confirmed PFS. And what you can see is that we reached the primary end point for PFS and this was a hazard ratio of 0.76 with a log rank p-value of 0.0059. You can also see that the curves tended to separate as you went out, especially from the 6- to 12-month range as well. Because of the fact that there was not a proportional hazard ratio, we prespecified a restricted means analysis, which you can see on Slide 16 and that showed that the absolute delta from a restricted means perspective was a 2.2-month increase in progression-free survival for the neratinib-capecitabine arm over the lapatinib-capecitabine arm. On Slide 17, you can see the overall survival data. The overall survival end point was not met. We had a hazard ratio of 0.88 with a p-value of 0.206 -- I'm sorry, 0.2086. And you can see there was an approximately 1.7-month benefit in overall survival with neratinib-capecitabine over lapatinib-capecitabine. On the next slide, on Slide 18, this is looking at the time to intervention for CNS mets. So again, this is looking at the interventions done, either radiation, surgery or anticancer medications. And as you can see, they were -- there was a decrease in them in the neratinib arm of the trial. Neratinib does cross the blood-brain barrier, so it is active in CNS mets. And as you can see, we were able to reduce the incidence, so prevent brain mets, in this trial, with an overall cumulative incidence of 22.8% in the neratinib arm versus 29.2% in the lapatinib arm. And the p-value for that was 0.043. So the third line, on Slide 19. The slide -- the size of the market here is approximately 6,400 patients in the U.S. with third-line HER2-positive metastatic breast cancer and about 4,700 with fourth-line HER2-positive cancer. So to Slide 20. We filed our sNDA for U.S. approval in June of 2019. The sNDA was accepted by the FDA in September of 2019, and we were approved in February of 2020, which was 2 months before our PDUFA date in April of 2020. Moving to Slide 21. We have an ongoing study that's being run by the cooperative group NSABP. And this is the FB-10 study, which is a Phase I/II trial of neratinib combined with Kadcyla. Kadcyla is currently the second-line standard of care in second-line HER2-positive metastatic breast cancer. And in their Phase III EMILIA trial, which was their registration trial for approval, the drug showed an objective response rate of approximately 43.6% and a PFS of 9.6 months. In the EMILIA trial, the majority of the patients were Perjeta naive, and it was later published in the JCO in 2016 that in patients that were previously treated with Perjeta, which is now the first-line standard of care, the response rate appeared to decline down to 23.1% for Perjeta and a median duration of therapy of 4 months. Looking at Slide 22. This is the design that we used for the Phase I/II trial of neratinib plus Kadcyla. We had a dose escalation of neratinib with a standard dose of Kadcyla. And importantly, we made sure that all of the patients had to have had prior Perjeta so that we made it more like a real-world experience. On Slide 23, you can see the data that was presented at ASCO. And here we showed a response rate of 60%. That included both CRs and PRs. And notably, that 60% response rate is higher than what we've seen in the Perjeta-naive population and much higher than what we've seen in the JCO publication that was previously treated with Perjeta. And again, in FB-10, everyone was previously treated with Perjeta. This study is ongoing, and we're expecting to have updated data from this presented later. Moving to Slide 24. Looking at neratinib in patients with brain mets. So about 1/3 of the patients with HER2-positive metastatic breast cancer get metastases that go into the brain. Tykerb is a TKI like neratinib that crosses the blood-brain barrier. And Tykerb single-agent activity, there's 2 trials that were done in one that had a 2.6% response rate and the other that had a 6% response rate. When it was combined with Xeloda, which is a chemotherapy agent that also crosses the blood-brain barrier, it had a 20% response rate. On Slide 25. We have an ongoing study known as TBCRC 022, which is looking at neratinib and capecitabine as well as other drugs in treating patients with HER2-positive breast cancer that have brain mets. As you can see, there's many cohorts in the trial. The first cohort looked at neratinib as a single agent. The third cohort was neratinib combined with capecitabine. The fourth cohort is ongoing, and this is combining neratinib with T-DM1, with Kadcyla, because it's known that Kadcyla does cross the blood-brain barrier and has activity in brain mets. The data from that is ongoing. We are hoping to present that data either late this year or sometime next year. On Slide 26, in terms of the cohort that combined it with Kadcyla, so the combination of Kadcyla plus neratinib. We presented this data at ASCO in 2017. It was published in the JCO the year after. And this showed a response rate of 49%. That's a lot higher than the 20% seen with Kadcyla -- I'm sorry, with capecitabine plus lapatinib. Then Slide 27, based on that data, we are in the NCCN guidelines for -- the recurrent breast cancer CNS guidelines for treating brain mets with a neratinib-capecitabine combination, and that's a Category 2A recommendation. And then we're also in there based on the initial results from the NEfERTT trial for neratinib-paclitaxel as well. Moving to Slide 28. As I mentioned in the opening slide, we are also looking at neratinib in a subset of patients that have a HER2 mutation. These are patients that are HER2 negative but have a mutation in the kinase domain such that HER2 is constitutively activated. The way the basket trial works is we have different tumor types that are treated with either neratinib monotherapy or neratinib in combination with other agents. And the 2 I want to discuss in more detail is the cervical cohort and the hormone receptors positive breast cohort. Moving to Slide 29, first, let's talk about the hormone receptor positive breast cohort. As a little background on somatic mutations in HER2 in hormone receptor positive breast cancer. About 7% to 9% of pretreated estrogen receptor positive metastatic breast cancer has a HER2 mutation. It tends to be mutually exclusive, which means that there's no HER2 amplifications. These are HER2-negative tumors. And we also noticed that there's a cross-talk that occurs between the estrogen receptor and the HER2, such that if you suppress one, the other one gets increased. So because of this, we initially modified the SUMMIT trial and added fulvestrant to block the estrogen receptor to the ER-positive patients that had a HER2 mutation. What we found was, and I'll show the data shortly, while we were getting a good response rate, the duration of it tended to be short. And what we found was, at the time of progression, although we were blocking the HER2 mutation and blocking the estrogen receptor, the tumor switched from being HER2 negative to being HER2 positive and amplified as HER2 -- and amplified HER2. So we then modified the SUMMIT trial to add Herceptin, which is trastuzumab so that we were blocking the estrogen receptor with fulvestrant, the HER2 mutation with neratinib and then the amplification, which was the mechanism of resistance, with Herceptin. On Slide 31. This data has been very well published, the SUMMIT trial with HER2 mutations in breast. First data was presented -- published in Nature in 2018. Then we published additional data both on the monotherapy and in combination with fulvestrant in Cancer Discovery. And then the triplet, which was the neratinib-Herceptin-fulvestrant, was presented at the San Antonio breast cancer meeting in December of 2019. So on Slide 32, you will see the waterfall plots for showing the efficacy of the neratinib monotherapy, neratinib-fulvestrant and neratinib-trastuzumab-fulvestrant. As you can see, for neratinib monotherapy, we showed a [ 12% ] response rate, with a PFS of 3.6 months. For the neratinib-fulvestrant, we showed a 30% response rate and a PFS of 5.4 months. And for the triplet neratinib-Herceptin-fulvestrant, a 53% response rate and a PFS of 9.8 months. On Slide 33, you can see this in more detail, looking at the Kaplan-Meier curves. And as you can see, we saw a very steady increase in the PFS and then a shift obviously in the Kaplan-Meier as we increased and added on additional inventions. On Slide 34. So we met with the FDA in the fourth quarter of last year to discuss the path forward to attempt to get registration. And the advice we were given was to amend the current SUMMIT study to do 3 cohorts, 1 fulvestrant alone, 1 fulvestrant plus trastuzumab and 1 fulvestrant plus trastuzumab plus neratinib. We enrolled 7 patients per arm. If we don't see any responses, we shut down that arm. If you see more than one response, we expand it from 7 to 18 patients, and then the next bogey is, 4 out of 18 patients, you need to expand it further. We're planning to schedule a pre-NDA meeting with the FDA to discuss the initial Simon 2 stage results once we get that data, and that's currently anticipated either Q1 or Q2 of 2020 -- I'm sorry, 2021. To move to the cervical cancer cohorts on Slide 35. On Slide 36: About 5% of the patients with metastatic cervical cancer have a HER2 mutation. It tends to be negatively prognostic for survival and tends to be enriched in the adenocarcinomas. On Slide 37. Last year, at the SGO Annual Meeting, we showed an approximately 30% response rate in this cohort and a median duration that was meeting PFS that was somewhere around 7 months. And we met with the FDA to discuss this as well, as you can -- so the PFS is on Slide 38. We met with the FDA to discuss this as well, as we mentioned on Slide 39. And we're going to be enrolling additional patients in this arm as a monotherapy. We confirmed that the monotherapy data could be used to file for an accelerated approval based on the overall response data and the duration of response. And based on our current enrollment, we're looking to schedule that pre-NDA meeting in Q1 or Q2 of 2021. On the next slide, you'll see our HER-Seq trial, which is our HER2 mutation screening protocol. So on Slide 41. We launched the HER-Seq trial in a way to try to identify additional patients that we can enroll in SUMMIT. And what we have in HER-Seq is Puma has developed a proprietary next-gen sequencing assay that is a simple blood test that can be used to detect HER2 mutations. We've rolled this out, and it's a plasma-free test. On Slide 42. As you can see, the way this works is a patient with metastatic breast cancer or cervical cancer is consented. We collect their blood sample. We send it to the central lab. The proprietary sequencing assay is done. And if they have a HER2 mutation, we consider them for enrollment in the SUMMIT trial. If not, we retest them 3 to 6 months later to see whether or not they have developed one. So on Slide 43. This right now is open at about 18 sites. And we're expanding it to the other SUMMIT sites as well. Again, this is a proprietary assay that we're using. And our goal is to screen 2,500 patients for breast, 1,200 patients for cervical that should be more than enough than we will need in the SUMMIT trial in order to have enough patients to be able to get the data that we have -- need to potentially discuss accelerated approval with the FDA. So on Slide 44. Our registration pathway is, as I said, we met with the FDA to discuss the pathway. We're modifying the SUMMIT trial. We already completed that. We're going to be continuing to enroll the HER2-mutated cervical cancer cohort. We've expanded the HER-Seq to expedite the enrollment. We've had a good decrease in our R&D budget due to the fact that a lot of our larger trials like ExteNET, NALA and CONTROL have been ending or will be ending. And that obviously opens up a nice piece of the budget such that we won't have a huge increase in R&D due to the expansion of SUMMIT. And again, our time line to meet with the FDA for a pre-NDA meeting is currently anticipated in the first quarter, second quarter of 2021. On Slide 45. We also have a number of ISTs ongoing, as you can see, in colorectal cancer, glioblastoma, breast cancer and other tumor types looking at neratinib in either HER2-enriched, HER2-amplified or HER2-mutated cancers. We would expect these ISTs to start to read out sometime over the next 12 to 24 months and obviously could open up additional expansion opportunities for us as well. So in terms of our expected milestones for the company as a whole, we have the -- as I mentioned, the potential pre-NDA meeting for the -- on the SUMMIT trial in the first quarter of 2021 or second quarter of 2021. We'll be reporting additional data from the HR-positive breast and cervical cohorts in Q4 of 2020, additional data from the CONTROL trial in Q4 of 2020, and then we'll have some additional regulatory decisions in our extended adjuvant indications going on throughout the year. On Slide 47, just to talk about the IP. The composition of matter patent is issued and that expires in 2025. That's extendable for up to 5 years with Hatch-Waxman. We also have use patents for the treatment of cancer that go out to 2025; polymorph patents, combination with capecitabine and use in extended adjuvant breast cancer that extended out to 2028, 2031 and 2030, respectively. On Slide 48. We also have IP in a related area, which is the EGFR T790M mutation area, and these are issued claims in Europe, Asia and Australia. I apologize the slide is wrong. We actually have issued claims in the United States as well. Those issued in February of this year. These are patents that claim the composition comprising an irreversible EGFR inhibitor for a T790M mutation and then for use in lung cancer and non-small cell lung cancer as well. In Europe, our patents were issued in 2011, and then an opposition was filed, and we went through a European opposition hearing in 2014, and we won and the claims are upheld. So while we're not currently developing neratinib in this specific indication, we do realize that it opens up licensing opportunities for us for either commercial drugs or drugs in development and obviously a way to extract additional value for the shareholders of Puma. On Slide 49, to talk about the management team. I act as the CEO and President of the company. Richard Bryce acts as our Chief Medical Officer. He has a lot of breast cancer development experience from Onyx and Roche in his previous life. Jeff Ludwig recently joined us as our Chief Commercial Officer. Jeff joined us from Astellas. And prior to Astellas, he's got about 20 years of experience at Amgen, specifically in oncology. Maximo Nougues is our Chief Financial Officer. And as you can see, he's got extensive experience in health care as well. And then Doug Hunt, who's our Senior Vice President of Regulatory Affairs, has worked for small companies and large companies in a regulatory capacity, including a lot of time at Baxter and Amgen and specifically in the oncology area as well. So let's talk a little bit about the Board of Directors. I act as the Chairman of the Board; Ann Miller, who's got a marketing background working at Sanofi, Eisai, Amgen and Merck is also on the Board; Mike Miller, who's the Chief Commercial Officer of Jazz and previously headed up sales and marketing for the HER2 franchise at Genentech, is on the Board; Jay Moyes, former CFO of Myriad; Hugh O'Dowd, who is the CEO of Neon Therapeutics, and he was the former Chief Commercial Officer of Novartis Oncology; Adrian Senderowicz, who's currently the Chief Medical Officer of Constellation Pharmaceuticals; Troy Wilson, who's the CEO of Kura Oncology as well as a number of other companies; and then Frank Zavrl, who is a former partner at Adage. As you can see, we've done a lot of focusing on the Board on commercial and specifically commercial oncology, as we feel it's extremely important for the company in its current commercial state to have an experienced Board in that capacity. On the financial side, we currently trade on NASDAQ under the ticker PBYI. Our cash at the end of the year was -- I'm sorry, at the end of March, was $101 million. Our cash burn was $11.6 million, and our current guidance is to be cash flow neutral in 2020. So on Slide 52, just to close with the company highlights. NERLYNX is the first HER2-directed drug approved in both extended adjuvant and metastatic breast cancer, and that's a tyrosine kinase inhibitor. We've got a number of potential indications in HER2-positive metastatic disease, metastatic disease with brain mets as well as HER2 mutations. We currently retain the full U.S. commercial rights to NERLYNX. And we have a large initial market opportunity, with additional label expansion opportunities. I would like to thank everyone for listening to the presentation, and I want to thank Bank of America Merrill Lynch for allowing us to present. Thank you very much, and have a great afternoon.