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

Great. Thank you. So thank you, Evan. First of all, just a reminder, I'm going to be making forward-looking statements. So on this slide, you can see our product pipeline, which consists of our drug, neratinib, across a number of different cancer indications. The drug is currently approved and sold as the drug, NERLYNX, and we're approved in both the extended adjuvant HER2-positive breast cancer setting and the third line metastatic HER2-positive breast cancer setting. Within the extended adjuvant, the trial that got us our approval was the ExteNET Phase III trial. We also have the CONTROL trial, which is a study where we're looking at trying to reduce the side effects of the drug. In the metastatic setting, the NALA trial was our -- what led to our indication in the third line HER2-positive metastatic setting. We also have the FB-10 study, where we're looking at the drug in the metastatic setting in combination with T-DM1. And then the TBCRC 022 trial, where we're looking at the drug -- also in combination with T-DM1 and HER2-positive breast cancer that's metastasized to the brain. Then we are also looking at an indication with the drug, which is HER2 mutations, which are typically tumors that are HER2 negative, so they're HER2 non-amplified but there's a genetic mutation in HER2, usually in the kinase domain, and this is spread across several tumors. So as you'll see on the slide, we're testing this in HER2-mutated breast cancer, which is ER positive, HER2-mutated cervical and then also in an EGFR mutation, which is exon 18 EGFR mutated lung cancer. So first to talk about our commercial sales of the drug. NERLYNX is currently approved in the United States as well as other countries. In the U.S., we sell the drug ourselves, and we sell into 2 channels. As you can see on this slide, 1 is what we call our specialty pharmacy network. And this is where there's a physical prescription written and the drug is delivered to the patient. The other ones that we refer to as our specialty distributor network, and this is also known as our in-office distributor network, which is where the bottle is physically given to the patient in the doctor's office, and there's no prescription that's written. On this slide, you can see our quarterly sales of NERLYNX since launch. As you can see, the drug had a very nice increase in sales going into 2017 and '18. and then it somewhat has flattened out more recently, especially late Q1 into Q2 and Q3, we've been negatively impacted by COVID as we're seeing less patients going into the doctor's office and because of that, it's having a negative impact on our prescription trends and on sales of the drug. On this slide, you can see the number of bottles that have been sold of the drug. In the last quarter, we just reported recently our Q3 numbers. And in the last quarter, you can see we sold 3,600 bottles of the drug. That was a decline from the 3,700 in Q2 of 2020. Again, COVID is having a negative impact here as we're seeing less patients coming into the doctor's office, and hence, that's having a negative impact on our sales. So the side effect of NERLYNX is that the drug can cause a very severe gastrointestinal toxicity, specifically grade 3 diarrhea. This is to be a front-end loaded toxicity where the patients get it in the first month and then the incidence of it declines over time. One of the ways that we've looked at addressing this is by doing a dose escalation where the patients don't start at a full dose, they start at half a dose, and then they're titrated up in that first month. And the data has shown, which I'll show you shortly, that this actually leads to a much lower incidence of grade 3 diarrhea and an improvement of the tolerability profile of the drug. We got the data in Q2 of 2019 at ASCO. And as awareness of it has increased, we have seen that an increasing number of the new prescriptions are starting at a reduced dose. Again, it's just in that first month, they do this reduced dose and they titrate up to a full dose. And so it's really that first month when it's done. So we're noticing that of NRx starting at a reduced dose, we're seeing a nice improvement in that, and we're hopeful that, that will lead to a better long-term tolerability and therefore, a longer duration of treatment on the drug. As I mentioned earlier, in addition to being approved in the United States, we're also approved in a number of other countries as well. In the U.S., we sell the drug ourselves. In other countries, we have a number of partners and they sell the drug for us and we get a royalty. In all of the countries, as you can see, Australia and Southeast Asia, Israel, Canada, Greater China, Latin America, Europe and the Middle East as well as South Korea, we have partners. You can see a number of these has been approved and have launched. And specifically in our bigger markets, which in both Europe and in China, the launch has started in Europe. It's gone very well. We have a wonderful partner, Pierre Fabre, who's done a great job for us. And with 32 countries in Europe, they've really just started on that. We're expecting to see a lot more of this happening in 2021. And so that will have a nice impact on the sales in Europe there. And then obviously, we just got approved in China in April of 2020. We would expect the launch of the drug, probably be in the first half of 2021. And so again, we would start to see those royalties come in as well. So as I mentioned earlier, we have the CONTROL trial. This is a trial looking to reduce the side effects of the drug. Again, what we do here is we've looked at using both loperamide prophylaxis, so using imodium and other drugs in that first month to reduce the grade 3 diarrhea. The way this has been -- the genesis of this was is that first, we looked at using imodium alone, and we looked to combining it with a steroid budesonide, then a binding agent colestipol. And then we also just looked at doing no anti-diarrhoeas upfront but doing a dose escalation. So this data was published in the Annals of Oncology earlier this year. And as you can see, so here, you can see the ExteNET trial, which was what led to the approval of the drug, the grade 3 diarrhea weight was 40%, and you had 26% of the patients having a dose reduction and 17% of them discontinuing the drug because of the diarrhea. When we use the dose escalation, which has been what has -- which has been what doctors have been utilizing the most, a nice decrease in the grade 3 diarrhea, down from 40% down to 15%, also a decrease in the discontinuations from 17 down to 3 and a decrease in dose reductions due to the diarrhea from 26 down to 3. So increasing the side effect -- I'm sorry, decreasing the side effect profile of the drug, but also improving greatly in the tolerability. The extended adjuvant HER2-positive breast cancer market is quite large, 28,000 patients in the U.S., 37,000 patients in the EU. In the U.S., our approval is in the intent-to-treat population, meaning both home receptor positive and home receptor negative patients. In the EU, our approval is only in the HR-positive patients. And we estimate that, that represents about 65% to 70% of the patients with early-stage HER2-positive breast cancer there. In the metastatic setting, the trial that led to our approval, which we got earlier this year, was the Phase III NALA trial. This was using neratinib with capecitabine, which is also in Xeloda against lapatinib with capecitabine. Co-primary endpoints were central PFS, essentially red PFS and OS. The trial met its endpoint for the centrally confirmed PFS. As you can see on the slide, the hazard ratio was 0.76. And as you can see, we saw a nice separation of the curves as well. Because of the fact that the proportional hazard ratio was violated, we ended up prespecifying a restricted means analysis. And as you can see, the mean PFS improvement was about 2.2 months. From an OS perspective, the trial was not statistically significant. It was not statistically significant. But we did end up seeing with the restricted means an improvement about 1.7 months. One of the interesting signals that we've seen with neratinib in many studies is not only the ability to treat CNS metastasis, but also to prevent them. We had a previous trial known as the NEfERTT study that was published a while ago. We showed a prevention in brain mets in a metastatic setting. We also looked at it here in the NALA trial as well. So what was measured was the reduction in interventions necessary for brain mets. So specifically, radiation therapy, surgery and anti-cancer medications. And as you can see, in the trial, there was a reduction in the need for interventions for CNS mets in the neratinib arm, specifically in the -- nice decrease in radiation therapy and surgery. And then we also looked at the cumulative incidence of brain mets, and we saw a nice decrease. It was 29.2% in the lapatinib arm, 22.8% in the neratinib arm with a p-value of 0.043. So consistent with the previous data showing that neratinib can reduce the incidence of CNS mets. So in the third-line setting, there's about 6,400 patients in the U.S. with third line HER2-positive breast cancer and about 4,700 patients with fourth line. Our approval is in third-line or later. So we would be able to look at both of those patient populations with that data. So our time line is, we filed the sNDA in June of 2019 for this indication. The sNDA was accepted in September 2019, and then we got the drug approved in February, which was 2 months before our PDUFA date. We also have an ongoing metastatic study, looking at the drug in combination with Kadcyla. It's a dose-ranging study, looking at various doses of neratinib and the approved indication for Kadcyla, which is T-DM1. Importantly, there has been previous data showing that in patients previously treated with Perjeta, the activity of Kadcyla seems to decline. So we made sure in this setting that it was more real world, which is that Perjeta is approved in a first-line setting. So all of the patients had to be previously treated with Perjeta. This data was presented at ASCO in 2018. And as you can see, we saw a 60% response rate in the trial. This is higher than what was seen with Kadcyla in its approved indication and also higher than what we've seen in previous data that's been published in Kadcyla -- we've previously treated with Perjeta. Another interesting study we have ongoing is our TBCRC 022 trial. This is specifically a trial looking at neratinib in patients with HER2-positive brain mets. The first study that we did was looking at neratinib as a single agent. Then in combination with capecitabine, which I'll show you the data in a second, the ongoing arm of the study is looking at neratinib in combination with T-DM1, with Kadcyla. And we're expecting to see data, and this is very interesting because in cohort 4C, which you can see here on the slide, this is in patients with progressive brain mets and who have had prior T-DM1, and it's T-DM1 with neratinib. So we would expect to see that data, hopefully, sometime in 2021 in the first half presented, and that could obviously make a nice value addition to the story. In patients with brain mets who have treated with capecitabine plus neratinib, so Xeloda plus neratinib, we saw a 49% response rate in these patients. This is a lot higher than what's been seen with lapatinib and other agents as well. And based on this data, we're in the NCCN guidelines for CNS mets. And this is both in the treatment of CNS mets based on the neratinib-capecitabine data. And then also in the prevention of CNS mets with the NEfERTT study, which I referenced earlier, which was neratinib with paclitaxel. So on this study, we have our SUMMIT trial, which is our basket trial of neratinib. and here, we're looking at neratinib in patients with HER2 mutations and also EGFR exon 18 mutations as well. There are 3 specific baskets that I want to show data from. This includes the exon 18 mutated lung cancer, the HER2 mutated cervical cancer and the ER-positive HER2 mutant breast cancer cohort. So first, to talk about the ER-positive breast cancer cohort. So in pretreated ER-positive breast cancer, about 7% to 9% of these patients have a HER2 mutation. This tends to be mutually exclusive to HER2 amplifications, so you don't see them being HER2-positive and having a HER2 mutation. That's quite rare. Where we do see it is in patients who are HER2-negative and also have a HER2 mutation. It appears to be a constituent activation of the intracellular kinase and downstream signaling pathways, and very interesting, we see crosstalk that occurs between the estrogen receptor and the HER2 mutation. So when we first studied this, we looked at using neratinib alone. And what we saw was while we were suppressing the HER2 mutation, the ER receptor tended to amplify in response to that. So then we modified the trial to add full the strengths that we blocked the ER and the HER2 mutation. We initially got a good signal, which I'll show you in a second. But then we noticed as a mechanism of resistance, the tumor was switching from being HER2-negative to HER2-positive. So we then added on trastuzumab or Herceptin to block that from occurring as well. So this data has been very well published, the neratinib monotherapy data was published in Nature in 2018, further published in Cancer Discovery and the neratinib fulvestrant data was there. And then the combination of neratinib, fulvestrant plus trastuzumab was presented at a poster session at San Antonio last year, and there'll be an update on this data presented at San Antonio next month. So here's the efficacy data across the genesis of the trial that I mentioned. So when we first gave neratinib as a monotherapy, we saw about a 17% response rate and a 3.6-month PFS. and these were in the tumors that were resistor valuable. And what we noticed was, as I mentioned, that the ER receptor was being upregulated. So then we add lapatinib and neratinib with fulvestrant we saw a 30% response rate and then a 5.4-month PFS. Again, as a response, the tumor was switching from being HER2-negative to HER2-positive so we added on trastuzumab and we then saw a 53% response rate and a 9 8-month PFS. This is the PFS across those three. The prior was just in the RECIST evaluable patients. This is now in all comers. And what you can see is that the PFS, as you can see, improved very nicely. It went from 3.6 months in the neratinib monotherapy arm to 5.7 months in the neratinib fulvestrant to 9.8 months in the neratinib trastuzumab fulvestrant. So we met with the FDA to discuss the path forward for an accelerated approval in this indication. The feedback the FDA gave us was they recommended that we do a Simon's 2-stage trial design to further isolate the contribution of neratinib to the triplet of fulvestrant, trastuzumab, neratinib. And so what they asked us to do was a 3-arm study, fulvestrant in 1 arm, fulvestrant-trastuzumab in the other fulvestrant, trastuzumab and neratinib in the third. Such that, we enroll 7 patients per arm. If we don't see 1 response in those first 7 patients, that arm is shut down. If we do, we then expand it to 18, and the threshold is, you need to see 4 out of 18 responses. We're expecting to get the initial -- we're expecting to have this trial fully enrolled. It was negatively impacted by COVID. We are seeing that enrollment come back. And we're expecting to see this -- the full enrollment for this occurs sometime in the first half at '21 at which point we would have the data and then we could schedule the meeting with FDA, and that could discuss the potential to use that data for accelerated approval. To talk more now about the SUMMIT cervical cancer cohort. So in cervical cancer, about 5% of cervical cancer has a HER2 mutation. It tends to be negatively prognostic for survival and tends to occur in the HPV-positive tumors. So this was neratinib monotherapy. This was presented at the SGO meeting last year and was also published in gynecological oncology. As you can see, we saw a very nice waterfall plot here with responses, both in just HER2 mutated or also with co-mutations present. And here you can see the swimmer plot, which is showing we've got some very nice durations of responses as well. So our plan with the -- I'm sorry, our plan with our cervical data is to continue to enroll this. And when we get enough patients, we can obviously meet with the FDA. We did discuss with them the opportunity for accelerated approval here, and they were open to us using a single-arm trial. We just needed to have some more data. So now to talk about the third basket, which is the EGFR exon 18 lung cancer. So EGFR exon 18 mutations tend to represent about 5% of EGFR mutations in lung cancer. And as you can see, the preclinical data shows that these mutations are -- tend to be very sensitive to neratinib. And here you can see on the left, neratinib was tested preclinically against a lot of the other EGFR TKIs, both reversible and the irreversible. In these exon 18 mutated tumors, neratinib tended to have the best sensitivity. So in a previous trial that was done, there was a previous trial of neratinib done in -- published in the JCO in 2010. This was done in all lung cancer patients in the trial. There were 4 patients who had EGFR exon 18 mutated lung cancer, and more specifically, they had the G719X mutation. Of those patients -- of the 4 patients, 3 showed a PR, and the median PFS was 52.7 weeks. So based on that, we decided to modify the existing SUMMIT trial and add on the exon 18 mutated baskets. So last week on our earnings call, we reported the initial results from this. What we showed was -- in the trial of the first 11 patients that have been enrolled. The median prior number of therapies for these patients was 2 of a range of 1 to 3. SUMMIT had prior checkpoint inhibitor or prior chemo. And importantly, 10 out of them or 91%, had, had prior treatment with a tyrosine kinase inhibitor. And some of them saw 1 tyrosin kinase inhibitor, some saw multiple. And those included gefitinib and erlotinib, osimertinib and afatinib. So the preliminary efficacy data was that in these 10 patients who had been previously treated with an EGFR TKI, we saw 4 confirmed objective responses. They were all PRs for an objective response rate of 40%. The best overall response was 6, again, all PRs, or 60%. The median duration of response was 7.5 months, and the clinical benefit rate was 80%. And the median PFS was 9.1 months. On this trial, you can see the swimmer plot on the left and the waterfall plot on the right. Interestingly, you'll note that some of these were situations where they just had the G719X mutation alone. In others, there was a co-mutation, either with E709X with S768i or with both of them, including the T790M. And as you can see, we saw responses in the ones where we just had the G790T and X or where there was also a co-mutation. And we also saw some very nice durations. At the time of the presentation of these patients, 4 were still being treated. From a side effect perspective, we are very pleased that the initial data showed that there was no grade 3 diarrhea seen in this cohort of 11 patients. We did see about 45% of them having any grade diarrhea. And looking into this in more detail, it was 1 patient who had grade 2 diarrhea and 4 patients having grade 1 diarrhea. We didn't see any need for a dose hold or a dose reduction or dose continuation. So the tolerability of the drug was very good, and we didn't see any patients hospitalized due to the diarrhea. So to put this data into some clinical perspective, the only drug that right now is approved and has eGFR exon 18 mutations in its label is afatinib, which is also known as Gilotrif. In the TKI naive patients, Gilotrif has shown a response rate of approximately 63%. In the TKI-pretreated patients, which is the indication we're interested in, the response rate was about 10.5%. So clearly, the initial signal we're seeing of this 40% response rate compares very favorably to the data with afatinib. So the success criteria has been met, both for the first stage and the second stage of the Simon's 2-stage for this cohort. So we're now continuing enrollment in the second stage up to a total of 30 patients. We're going to be looking to present additional data from this cohort in the first half of 2021. And we also are looking to schedule a meeting with the FDA sometime in 2021 to discuss the potential for an accelerated approval strategy in this indication. So we also have a study known as the HER-Seq trial, and this is a trial where we're specifically looking at doing an NGS assay to screen patients for HER2 mutations. And once we find them, we can then register them in the SUMMIT trial. So it's a means to increase enrollment in the SUMMIT study. The way this works, we are doing this right now for breast and for cervical patients. We screen the patients, the blood sample's connected. We perform a proprietary HER2 mutation sequencing. And if the trial -- if the patients show a HER2 mutation, we consider them for enrollment in SUMMIT. If they do not, we retest them at a later date. And then again, if they show the mutation, we can enroll them in SUMMIT. So the trial is currently opened at about 21 sites, and we're expanding it to some of the other ones as well. Our goal is to screen 2,500 patients in breast, 1,200 in cervical and that should give us more than enough that we need for enrollment in the SUMMIT trial. We also have a number of other ISTs looking at neratinib in a bunch of other indications. This includes some in colon cancer. And I believe this trial, the FC-11, which is neratinib with cetuximab in patients with prior EGF therapy, I believe that's going to be presented in Q1 of 2021, if I member correctly. But we have these other trials as well, looking at an EGFR mutated glioblastoma, other mutations in breast cancer and then other tumor types as well. We're expecting that a number of these could read out in 2021, so those are potential data points as well. So to look at the milestones for Puma as a whole. We're looking to report additional Phase II data from our SUMMIT study, which is the SUMMIT basket trial in HER2 mutated breast. That's in the fourth quarter of 2020. We have additional data from the CONTROL data also in the fourth quarter of 2020. We'll have data from another basket in our SUMMIT trial, which is patients with bile duct cancer with a HER2 mutation treated with neratinib monotherapy. That will be in the first quarter of 2021. We'll also be reporting Phase II data from patients in the SUMMIT basket trial with the exon -- EGFR exon 18 mutated lung cancer in the first half of '21. Then as I mentioned, conducting the pre-NDA meeting with the FDA, which we're shooting for the first half of 2021, both in the HER2 mutated HR-positive breast and the HER2 mutated cervical. Reporting data from the TBCRC 022 trial, which is the Kadcyla plus neratinib in patients with brain mets, who've previously been treated with Kadcyla, and that's also in the first half of '21. And then conducting the meeting with the FDA for the accelerated approval in EGFR exon 18 mutated lung who have been previously treated with an EGFR tyrosine kinase inhibitor, and that, we're expecting to take place sometime in '21 as well. So the IP on neratinib is quite broad. We've got a composition of matter patent that's issued and expires in 2025, and we've got the potential to extend that for up to 5 years with Hatch-Waxman. There's also a use patent in the treatment of cancer, and that has issued, and that expires in 2025 as well. There's 2 polymorph patents, and those expire in 2028. There's a combination with capecitabine patent, which was our indication from the NALA trial and that expires in 2031. There's a use patent in extended adjuvant breast, which is our indication from ExteNET that expires in 2030. And now there's a number of other patents that we're looking to prosecute, which could extend our patent coverage even further. We also have IP on a related area, which is the EGFR T790M area. There's issued claims in the U.S., Asia and Australia that expire in 2026. I apologize for the error on this slide. We actually have issued claims in the United States, which issued earlier this year, and that was 2 patents that issued in the February, March time frame. In Europe, our claims issued in 2011, and they were upheld after a opposition hearing. It was issued in 2011. It was then opposed, and we -- and the opposition here in February 2014, the claims were upheld. That has been -- there's been an appeal filed in that, and we'll have the appeal hearing for that in December. The claims are specifically for a pharmaceutical composition, which comprises an irreversible EGFR inhibitor for use in treating cancer with a T789M mutation. And then also a pharmaceutical composition for use in the treatment of cancer, which includes lung cancer and non-small cell lung cancer. While we're not currently developing neratinib in this area, there are a number of drugs, both marketed and in development. That would appear to be infringing these patents. So we do perceive there is an opportunity here to potentially enter into licensing agreements, which could bring in some value to the company. From a management perspective, I act as the CEO and Chairman of the company; Dr. Richard Bryce is our Chief Medical Officer and Chief Scientific Officer. He has a wealth of experience in breast cancer development. Jeff Ludwig joined us this year as our Chief Commercial Officer, coming to us with a lot of oncology commercial experience from Astellas and Amgen. Maximo Nougues is our Chief Financial Officer, and he brings with him a lot of experience in the health care area and finance. And then Doug Hunt is our Senior Vice President of Regulatory Affairs, who brings a lot of regulatory experience both in big companies and the small ones as well. From a Board perspective, I act as the Chairman of the Board. I'm very pleased that we have a very extensive board with a lot of people with commercial experience. Specifically, Ann Miller, Mike Miller, Hugh O'Dowd and Brian Stuglik, all of whom have a significant amount of experience from a commercial standpoint, both in sales and marketing, in terms of oncology agents, they've been very helpful to the Board, and they also sit on a subcommittee of the Board, which is our commercial committee. In addition to them, we also have Jay Moyes, who's the former CFO of Myriad; Adrian Senderowicz, who has been the Chief Medical Officer of many different companies; as well as Troy Wilson, who is the CEO of Kura Oncology and a number of other companies as well. From a financial perspective, we currently trade on the NASDAQ under the ticker PBYI. Under the -- as of September 30, we had about $109 million in cash and cash equivalents. Q3 of the year, we were actually cash flow positive to the tune of $1.8 million. We have a loan outstanding with Oxford, which was amended in June of last year, which is a $100 million drawdown, which we've drawn down, and that's with Oxford. And our issued and outstanding shares is 39.8 million. So to close with the company highlights. NERLYNX is the first HER2-directed drug that is approved, both in the extended adjuvant setting as well as in the metastatic setting. We have a number of additional potential indications for the drug, which is HER2-positive metastatic breast cancer with brain mets, HER2 mutated breast cancer, HER2 mutated cervical cancer EGFR exon mutated non-small cell lung cancer and other HER2 mutated tumors. We retain the full U.S. commercial rights to NERLYNX, and we have a large initial market opportunity with additional label expansion of potentials. So I would like to thank everyone for attending the presentation and thank Crédit Suisse for allowing us to present.

Excellent. Thank you, Alan, for that. And with that, we can end the presentation there. We appreciate the time and look forward to catching up with you soon. Bye now.

Thank you.

Thank you.