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

Hello, and welcome, everyone, to the H.C. Wainwright 2021 BioConnect Conference. My name is Stephen Bersey. I'm an equity research associate here at H.C. Wainwright. I'd like to introduce our next presenter, Alan Auerbach, who is CEO of Puma Biotechnology. They're focused on the acquisition and development of novel therapeutics for the treatment of cancer. So Alan?

Thank you very much, Stephen, and welcome, everyone, to the Puma Biotechnology presentation. Just a reminder, I'll be making forward-looking statements. So on this slide, you can see all of the work that we're doing with our drug, neratinib, across the breast cancer and other cancer therapy space. The drug is currently on the market in HER2-positive breast cancer, both for the extended adjuvant indication as well as the metastatic, which is based on the Phase III results of our ExteNET trial and our NALA trial. We also have an ongoing Phase II, combining the drug with T-DM1, which is the FB-10 study, a study combining TBCRC in patients with brain mets. And then we also have a study we're doing, looking at neratinib in patients who are not HER2 amplified, but they do have a mutation in HER2 that can be targeted with neratinib. And we are looking at this across specifically hormone receptor positive breast cancer, cervical cancer, exon 18 mutated lung cancer and then we have a large basket trial as well. So in the United States, we currently sell neratinib, known as NERLYNX, on our own. And we sell it into 2 channels, as you can see on the slide. The first one is we call our specialty pharmacy network. And this is where there's a physical prescription written for the drug. And then this is our -- the second channel is called our specialty distributor network. And this is where the drug is -- no prescription is written and the drug is physically given to the patient in the doctor's office. So here, you can see our quarterly revenues for NERLYNX since launch. And as you can see, we saw pretty much flat sales throughout 2020, specifically in Q3 of 2020, a $49.3 million quarter, which was essentially flat, slightly up from the $48.8 million in Q2 of 2020. Looking at the number of bottles sold. As you can see, in 2020, we saw a decline in the quarterly bottles sold. Specifically in Q3 of 2020, we had 3,611 sold, which was a decline from the 3,728 in Q2. One of the ways that we can prevent the side effect profile of the drug -- and again, the side effect profile of NERLYNX is that in the first month or 2 the patient is on the drug, they can have a severe diarrhea. And one of the ways we can do that is to start the patients at a reduced dose and then titrate up from there. We've been tracking that quarterly. We first got the data on this in ASCO of 2019. And we have been tracking how much this has been used as we think it can help with compliance and duration of therapy. And we were very pleased in Q3 of 2020 to see it come in at 32.8% of new prescriptions using this, which is a slight increase from the 30.8% in Q2 of 2020. In the United States, we sell and market the drug ourselves. Outside the U.S., we have partnerships with other companies that have been set up. And you can see those on the slide here. That includes in Australia, Southeast Asia, Israel, Canada, Greater China, Latin America, Europe, the Middle East, Africa and Turkey as well as South Korea. In a number of these countries, the drug has been launched. Some of these launches, such as the European one, are still in their early stages. In each of these situations, we get a royalty on our partner sales. And so that royalty revenue is expected to increase in 2021 based on these launches. As I mentioned earlier, there's a way that we have looked at preventing the side effect profile of the drug, which is a front end-loaded toxicity in -- specifically in the first month or 2 the patient is on it, a severe diarrhea. We launched a trial called CONTROL, where we looked to do this. First, looking at it using either loperamide, which is Imodium, as well as some other drugs as well. And specifically, the way that we looked at this was we did this trial CONTROL in the extended adjuvant setting, which is where we're approved. We first looked at using Imodium alone, then we combined Imodium with budesonide, then Imodium with colestipol. And then we looked at not doing any antidiarrheal agents upfront but just doing a dose escalation, which is starting with a low dose of the drug and then titrating up in the first month. The results from this were published during 2020. And as you can see, on the right-hand side of the slide is our ExteNET trial, which was our Phase III trial that got us approved. And you'll notice that when nothing was done to try to prevent the diarrhea, we saw a 40% grade 3 diarrhea in the trial and 17% of the patients discontinuing due to diarrhea. In each of these maneuvers that we did with loperamide with other drugs, we were able to reduce the grade 3 diarrhea rate. However, this dose escalation did show the most dramatic effect, dropping it from 40% down to 13%. And then it also helped out with tolerability as we went from 17% of the patients discontinuing due to diarrhea down to 3%. So the market for the extended adjuvant HER2-positive breast cancer is about 28,300 patients in the U.S. And there's approximately 37,000 in the EU. However, our label in the U.S. is both hormone receptor positive and hormone receptor negative patients. In Europe, we're only approved in the hormone receptor positive patients. And we believe that makes up about 65% to 70% of that 37,000. We also are approved in the metastatic setting. And that is based on our Phase III NALA trial. This was in patients with third line or later HER2-positive metastatic breast cancer. And this trial was a 600-patient trial that randomized patients to capecitabine, also known as Xeloda, plus neratinib versus capecitabine plus lapatinib, also known as Tykerb. The co-primary endpoints were progression-free survival and overall survival with a number of secondary endpoints. And importantly, one of them was time to intervention for CNS mets or also known as brain mets. So we announced that the trial hit its endpoint at a hazard ratio of 0.76 with a statistically significant p-value. You can see the separation of the curves on the slide. However, we did notice that the proportional hazard ratio had been violated. And we had prespecified that if that happened, we were to use a restricted means analysis. And using the restricted means analysis, we had an improvement of 2.2 months in terms of PFS. From an overall survival perspective, the trial hit a hazard ratio of 0.88, and the p-value was not statistically significant and we saw an improvement of 1.7 months. Importantly, one of the things that we looked at was the time to intervention for CNS mets. And so this looked at the various interventions that are done when a patient develop brain mets, like radiation therapy, surgery or anticancer medications. And neratinib was seen to decrease these in each one of these. And then importantly, the overall cumulative incidence of CNS mets was a lot lower in the neratinib arm at 22.8% versus 29.2%. And the p-value was 0.043. So there's 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 metastatic breast cancer. We also have an ongoing metastatic trial known as FB-10. And this is looking at neratinib in combination with Kadcyla. Importantly, in this study, all of the patients have to have received prior treatment with pertuzumab, also known as Perjeta. And we did a dose-ranging study, looking at neratinib doses of 120, 160, 200 and 240. The results of this were presented at ASCO a few years ago. And what we showed was a 60% response rate, which was better than what's been seen in Kadcyla alone. And we were very pleased to see a number of CRs in the trial as well. We're expecting to get an update on this trial possibly published sometime this year. We also have a study looking specifically at neratinib in patients with brain mets. And this is known as the TBCRC 022 trial. And this is looking at neratinib in combination with capecitabine but also with other drugs as well. The cohort 3, combining it with capecitabine, was published, and I'll show that data shortly. The ongoing one is cohort 4, where we're combining neratinib with T-DM1. We're expecting to have cohort 4c, which are patients who have brain mets and they've already progressed on prior T-DM1, and we're giving them T-DM1 plus neratinib. We're looking to have that data presented sometime this year. So this is the data on neratinib plus capecitabine. These were in patients who had not seen any prior HER2 TKIs. And we saw a CNS response rate of 49%. Based on this data, neratinib is in the NCCN guidelines for brain mets. It's a Category 2A for neratinib plus capecitabine in treating brain mets. We're also in the guidelines as a Category 2B for preventing brain mets. And that's on the basis of our NEfERTT trial using neratinib with paclitaxel. So we also have a study of neratinib ongoing, known as our basket trial, also known as SUMMIT. And here, we're looking at patients with EGFR exon 18 mutations, HER2 mutations or HER4 mutations. The three I want to discuss specifically is the exon 18 lung, the HER2 mutated cervical and the HER2 mutated HR-positive breast. So we talk first about the HR-positive breast. So somatic mutations in HER2 in hormone receptor positive breast make up approximately 7% to 9% of pretreated ER-positive breast cancer. They tend to be mutually exclusive with HER2 amplifications. So you don't see a patient who's HER2-positive and has some HER2 mutation typically. What we found initially was we gave neratinib as a single agent, and we found that there was crosstalk occurring between the estrogen receptor and the HER2 mutation. So in response to the HER2 blockade, the tumor was up-regulating the estrogen receptor. So we gave neratinib with fulvestrant, so we were blocking the mutation and blocking the estrogen receptor. We then found that the mechanism of resistance was that the tumor was changing from being HER2 non-amplified to HER2 amplified. And so based on that, we then modified the trial so that patients were getting neratinib plus trastuzumab, which is known as Herceptin, as well as fulvestrant. So this data has been very well published. The neratinib monotherapy data was in Nature 2018. The neratinib plus fulvestrant was in Cancer Discovery in 2019. And then the triplet data, the neratinib, trastuzumab, fulvestrant, was at San Antonio this year. So on this slide, you can see the data. And this is on neratinib plus Herceptin plus fulvestrant. And this was presented at San Antonio this year. You'll notice that we saw a very nice waterfall plot here with a number of tumor regressions. We were very pleased to see that we were able to see responses based on what -- to the different histologies, whether it was a lobular or a ductal carcinoma and also based on co-mutations. We saw a number of patients who also had PIK3CAs or CDH1s. So irrespective of that, we still were able to see responses. And I should also note, we were quite pleased to see that even in patients with prior fulvestrant, we still were able to see very nice responses. The durations on these were -- are shown on the slide here. Here, you can see the durations. In a number of these, these have been out for quite some time, some of these have been shorter. And as you can see, we've got a number of these patients that are ongoing as well. So we have gone to the FDA in 2019 and showed them the triple data. And what they asked us to do was to do a 3-arm study in patients with HR-positive HER2 mutated breast cancer, where we gave them fulvestrant alone, fulvestrant plus trastuzumab, or the triplet, fulvestrant plus trastuzumab plus neratinib. It's a Simon 2-stage design, so we enroll 7 per arm. And then if we don't see any response, we shut down the arm. If we do see a response, we expand it to 18 patients. We're expecting to get the initial Simon 2-stage data sometime in the first half of 2021. At which time, we would be scheduling a meeting with the FDA to discuss the possibility for accelerated approval based on that data. To move on now to the SUMMIT in cervical cancer. So in about 5% of cervical cancer, it has a HER2 mutation. This tends to be enriched in the adenocarcinomas and in the HPV-positive tumors. This data was published in Gynecologic Oncology in 2020. And this was our initial data. And as you can see, we saw a very nice waterfall plot here. Then we also saw a very nice durations as well, as you can see on this slide here. So we are continuing to enroll the cervical cancer. And once we -- because it's a monotherapy study, once we get enough patients, we would be in an opportunity to discuss with the FDA the possibility of an accelerated approval in that setting. To move on now to the EGFR exon 18 lung cohort. So the preclinical data shows that EGFR exon 18 mutations tend to be sensitive to the TKIs. But as you can see on the slide here, they tend to be highly sensitive to neratinib. So previously, there was a study that was done in a Phase II trial in lung cancer. And in that study, there were 4 patients that had EGFR exon 18 mutations and specifically the G719X. And as you can see, of those, most of the ones highlighted here. And in that study, we saw 3 PRs with a mean PFS of 52.7 weeks. So based on that, we put that -- enrolled that cohort in SUMMIT. And here, you can see the interim results that we've presented. We presented this late last year on our third quarter earnings call. And what you can see is we had an n of 11 patients. And importantly, as is highlighted in the box, of those 11 patients, 10 of them had already received a prior EGFR tyrosine kinase inhibitor. So what we noticed was for the patients previously treated with an EGFR TKI, we saw a 40% response rate. We saw a 60% best over -- a 40% confirmed response rate, a 60% overall response rate and a clinical benefit rate of 80%. Our median PFS was 9.1 months. So here, you can see the waterfall as well as the swimmer plots. And as you can see, we saw very nice tumor shrinkages, specifically in the patients who had prior TKIs, and we saw some very nice durations as well. We're -- real quick, on the side effect profile of the drug, while neratinib is well-known to have a severe side effect, which is grade 3 diarrhea, in these 11 patients, we did not see any, don't know if we will see more of those as we enroll more patients or if there's something specific about this patient population that they're not -- that they've been desensitized or something like that. So we'll need more data to understand that. And what we did see was the majority of it was grade 1 diarrhea. So that tended to be very well controlled. And as you can see, we didn't have any patients that needed a dose hold or a dose reduction or discontinued because of the diarrhea. So to put this in perspective, the one drug that is approved for EGFR exon 18 mutated lung cancer is afatinib. And as you can see on the slide, in studies that have been done in TKI pretreated patients, the exon 18, which is the G719X, afatinib showed a 10.5% response rate. So our 40% response rate compares very favorably to that. So the study was set up in the SUMMIT trial, which uses a Simon 2-stage design. We hit the success criteria for both the first and the second stage. So we're now enrolling up to 30 patients in this arm. We're going to present additional data from this in the first half of 2021. And we're looking to schedule a meeting with the FDA to discuss an accelerated approval strategy sometime in 2021. We also have a HER2 mutation screening protocol. The goal here is that we have a proprietary NGS assay that screens patients for HER2 mutations. And these take patients with breast or cervical, take a blood sample, and if they use our proprietary test, if they have the mutation, we refer them into our SUMMIT trial. So it's currently open at 21 sites. And our goal is 2,500 patients with breast, 1,200 with cervical, which would give us more than enough we need for SUMMIT. We also have a number of ISTs, as you can see on the slide here. And we're hoping to have data from some of these presented during the year. So in terms of the milestones for Puma, we're expecting to report the Phase II data from the -- from patients in SUMMIT with bile duct cancer and who are HER2 mutated in the first quarter of 2021; in the exon 18 EGFR lung patients in the first half of 2021; to conduct our pre-NDA meeting to talk with the FDA about the HR-positive breast and cervical hopefully sometime in the first half of 2021; the Phase II TBCRC 022 data, which is the Kadcyla plus neratinib in patients previously treated with Kadcyla in the second half of 2021; and then having the meeting with the FDA to discuss the potential for accelerated approval in the EGFR exon 18 mutations also in 2021. From an IP perspective, the IP on neratinib is very well covered. We have a composition of matter patent that expires in 2025. That could be extendable up to 5 years with Hatch-Waxman. And then a number of other patents, as you can see on the slide, that have been issued as well with a current expiration date somewhere in the 2030 to 2031 time frame. We also have intellectual property on a related area, which is in the EGFR T790M area. And this is issued claims in Europe, Asia and Australia as well as in the U.S. that expire in 2026. These patent claims were recently upheld after an appeal to a European opposition in December of 2020. While we're not doing anything clinically with neratinib testing in this indication, we do recognize that this opens up opportunities to potentially license as there's a number of drugs that are on the market or in development. And that could bring in some additional value to the shareholders. From a management perspective, I act as CEO and President of the company; Dr. Richard Bryce is our Chief Medical Officer; Jeff Ludwig, our Chief Commercial Officer; Maximo Nougues, our Chief Financial Officer; and Doug Hunt, our Senior Vice President of Regulatory. And then here is our Board of Directors. You will notice we have a number of board members with a lot of commercial experience in oncology. And you can see all of them on this slide here. So just to close, we currently trade on the NASDAQ under ticker symbol PBYI. Our cash and cash equivalents at the end of September was $109 million. We were actually cash flow positive in Q3. And that was cash flow positive for $1.8 million. We have a loan outstanding with Oxford with up to $100 million and we've got approximately 39.8 million shares outstanding. So just to close, NERLYNX is the first drug approved for both the extended adjuvant early stage as well as the metastatic setting. We have a number of additional indications like HER2 breast cancer with brain mets, HER2 mutated breast, HER2 mutated cervical, EGFR exon 18 mutated lung and HER2 mutated solid tumors. We retain the full U.S. commercial rights to NERLYNX. We have a very large initial market opportunity and additional label expansion potential. I would like to thank the people at H.C. Wainwright for allowing us to present, and thank everyone for attending the presentation. Thank you.

Thank you for a very in-depth and informative presentation, and enjoy the rest of your day.