Spectrum Pharmaceuticals Q3 2021 Earnings Call Transcript

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November 9, 2021

There are 9 speakers on the call.

Operator

Good afternoon, everyone, and welcome to the Spectrum Pharmaceuticals Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. And as a reminder, I would now like to turn the conference over to your host, Mr. Kurt Gustafson, Spectrum's Chief Financial Officer.

Speaker 1

Thank you, operator, and good afternoon to everyone. Thank you for joining us today for our Q3 2021 financial results conference call. Our Q3 financial results press release was sent out earlier this afternoon and is available on our website at www.spepirx.com. Joining me on the call today from Spectrum Pharmaceuticals will be Joe Turgeon, President and CEO and Doctor. Francois Labelle, our Chief Medical Officer.

Speaker 1

Before we get started, I would like to reference the notice regarding forward looking statements included in today's press release. This notice emphasizes the major uncertainties and risks inherent in these forward looking statements that we will make this afternoon. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward looking statements. With that, let me hand the call over to Joe Turgeon, CEO of Spectrum.

Speaker 2

Thank you, Kurt. Good afternoon and thank you for joining us on the call today. I really appreciate your interest in Spectrum. As we start to close in at the end of the year, We remain focused on our key corporate priorities. 1st, to submit the poziotinib NDA and second, to correct the manufacturing issues identified by the FDA in ROLONTIS CRL.

Speaker 2

Let me start with an update on ROLONTIS, Our drug for the treatment of neutropenia in patients receiving myelosuppressive anticancer drugs. Last month, we had a Type A meeting with the FDA to better understand the issues that were identified in the CRL. The CRL cited issues at the fill finish facility and the drug substance facility. At that meeting, we gained clarity that the deficiencies at the fill finish site have been adequately addressed and are no longer a gating item for a resubmission. Regarding the drug substance facility, as of today, we believe that Hanmi has addressed all of the deficiencies cited in the CRL with the exception of 1 and we expect the remediation to be completed by the end of the year.

Speaker 2

Pending successful completion, we would expect to refile shortly thereafter. A Type A meeting Also clarified that the FDA will be conducting an on-site inspection as part of the resubmission process. We'd expect a 6 month review once we submit. While Hanmi is diligently working to resolve the issues associated with the CRL, we are continually monitoring the long term, Long acting G CSF market and we'll be prepared to adjust our business plans as the market evolves. Now let me shift Over to poziotinib, the other large late stage asset we have in our pipeline.

Speaker 2

The submission of the NDA remains our top corporate priority, which we expect to file shortly. In addition, Spectra's poziotinib clinical program has continued to make solid progress this quarter With data presented in treatment naive lung cancer patients as well as preclinical data on Pozi in combination with KRAS G12C inhibitors. Now to get a more detailed update on our clinical development progress, I'm going to turn the call over to Doctor. Francois Labelle, Our CMO, Doctor. Francois, take it away.

Speaker 3

Good afternoon, everyone. I'm glad to be with you on today's call. Let's start with our top priority. The submission of our poziotinib NDA under Fast track designation is planned for the coming weeks. It will be based on our positive data With QD dosing from Cohort 2 of the ZENITH-twenty clinical trial, our submission will be seeking an indication for use In patients with previously treated locally advanced or metastatic non small cell lung cancer with HER2XON20 insertion mutations.

Speaker 3

We believe poziotinib has the potential to be the first to market for this indication, An area of great unmet medical need. We were also very pleased that Cohort 4 Was awarded a late breaking presentation at the recent ESMO conference in Paris, Doctor. Cornelison from the Erasmus Cancer Institute in Rotterdam delivered an oral presentation On the efficacy and safety of Pawsey in treatment naive non small cell lung cancer Patients are bringing HER2 exon 20 insertion mutation. This was data from our Cohort 4 of the ZENITH-twenty study that included the first 48 patients that received 16 milligram QD Oral starting dose of poziotinib, the primary endpoint in this multicenter study It was the ORR evaluated centrally by an independent image review committee using Resist Criteria 1.1. The results observed were quite strong with an ORR of 44% and a confidence A 95% confidence interval lower bound of 29.5%.

Speaker 3

The disease control rate was 75 Percent median duration of response was 5.4 months and range from 2.8 to 19.1 months, Including a complete response patient with 14 months of duration, median progression free survival was 5 point 6 months. The most common treatment related adverse events were typical of tarsine kinase inhibitor As was seen in prior studies, Grade 3AE were rash, stomatitis, diarrhea and paranechia. Importantly, Grade 3 pneumonitis was only seen in one patient with no Grade 4 or 5. The safety profile was predictable and manageable. Following these first 48 patients, we've been dosing patient TI AORTC triple meeting in October, MD Anderson presented preclinical data demonstrating The synergistic impact of Pozi when combined with KRAS inhibitors in KRAS G12C mutant specific cell line.

Speaker 3

The preclinical data showed that inhibition of EGFR, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER2, HER4 signaling was synergistic when combined with KRAS G12C inhibitors. These results highlight the importance of a potent pan Inhibitor of the ERBB family of proteins. We continue to make solid progress on our programs And we'll keep you posted as we achieve key milestones through the balance of the year. I will now turn it over to Kurt for a discussion of our Q3 financials.

Speaker 4

Thank you,

Speaker 1

Francois. Our SG and A expense for the Q3 of 2021 was $12,200,000 versus $15,100,000 in the previous year As we've looked to more tightly control these expenses, R and D expense was $20,900,000 versus $24,500,000 a year ago due to lower ROLONTIS related development activities. Our net loss for the quarter was $33,100,000 or $0.21 per share versus $48,500,000 or $0.37 per share in the comparable period of 2020. On a non GAAP basis, which primarily backs out stock compensation costs and the change in value of our equity securities. Our loss for the quarter was 25,800,000 were $0.16 per share versus a loss of $35,200,000 or $0.27 per share in the prior year period.

Speaker 1

We ended the 3rd quarter with approximately $134,000,000 in cash plus marketable securities compared to $159,000,000 at June 30, 2021. Operating cash burn for the quarter was 25,000,000 This is lower than prior quarters as we've looked to manage cash more closely. With that, let me now hand the call back over to Joe.

Speaker 2

Thank you, Doctor. Francois, and thank you, Kurt. As you can all see, we are working diligently to push our programs forward. We are making great progress on our remediation efforts for resubmission of ROLONTIS and tracking well towards our goal of a poziotinib NDA submission shortly. With that, operator, I'd like to open the call up to questions.

Speaker 2

If you could please do that, I'd appreciate

Operator

And first question comes from the line of Alethia Young of Cantor Fitzgerald. Alethia, your line is now open.

Speaker 5

Hi, this is Emily on for Alethia. Thanks for taking our question. I guess the first question is, do you think there is any risk of COVID with doing the reinspection in person? And has the FDA How quickly they could do the reinspection after you submit the CMC requirements? And then maybe also if you can comment

Speaker 2

First of all, as far as COVID, obviously, I don't know the answer to what's going to happen in the future. As I stated earlier, we should have Everything remediated by the end of the year, which would mean early Q1 we could resubmit. The FDA did say they want to do an on-site inspection. What I can tell you though Today, as an example, you can travel to Korea. We have people going there actively.

Speaker 2

So not sure what will happen with COVID in the future, but Certainly, right now you can travel to Korea. So we're doing it as we speak. So that's the first part of the question. So we don't know exactly when they would send the inspector. I can tell you that it would be a 6 months review.

Speaker 2

That doesn't mean it would take 6 months. So anytime after we file, they could send an inspector back to do a reinspection. Now as far as the Cohort 4 question, Francois, why don't you take

Speaker 3

Sure, Alethia. Thank you for the questions. So as you know, the BID dosing It's ongoing for all our open cohorts right now, including cohort 4, which continues to enroll. And we need to let the data mature further. And as you I'm sure you understand, the Team is really focused on the NDA now.

Speaker 3

So once we get the NDA in, we will analyze Some of the additional data as it matures and we'll keep you posted, but we don't have a date immediately.

Speaker 5

Great. Thank you.

Speaker 2

Thanks, Emily.

Operator

Next question comes from the line of Murray Raycroft of Jefferies. Murray, your line is now open.

Speaker 2

Hi, Murray.

Speaker 6

Hi, Joe. Hi, everyone. Thanks for taking my questions and congrats on the progress. First question just on the NDA filing. If you can just talk a little bit more about what you're going to include in the pogatinib HER2XN20 filing for second line patients and Are there any more specific gating factors that need to be completed before you submit this filing?

Speaker 2

Yes, Francois, why don't you take that?

Speaker 3

Sure. So we're in good shape. Obviously, all hands And Dack here, and as I indicated, we expect to be able to file this in next couple of weeks. The data, as we indicated before, is the core data is the COORD-two. We have communicated before that following discussion with the agency, they've allowed us to add some of the preliminary data in The BID dosing from Cohort 5 among others.

Speaker 3

And so obviously, that will go in. Although The NDA is based on Cohort 2. There's a large body of data here. It's like We have 21 studies that we have to summarize, integrate. So that's part of the activity that's going on here.

Speaker 3

But I hope that answers your question. So it's a QD data from Cohort 2, and there will be some BID data in the submission as well.

Speaker 6

Got it. And for the data, is the follow-up being cut off? Or are you still waiting for a final cut off For data maturing, or are you primarily just working on getting the filing together? Maybe if you can clarify on that point.

Speaker 3

Yes. So whenever you do this, you so that we have to we haven't disclosed the data cutoff, but there was a data cutoff in the past You have to analyze all the data, get the data in from around the world. Remember, there was a global study here and multiple other studies. So there is a definite data cutoff that's in there. What happens though in that standard, usually what happens is That 120 days after submission, you provide an update on the data that you have accumulated Since the filing to the agency, and certainly, we will do that as well.

Speaker 6

Got it. Okay. And then just last question for me, just on the data that you showed recently on HER2 treatment naive patients at ESMO And the light breaker with the 16 mg QD dose. Can you just talk more about what the bar for success is in this setting? And if you can comment on if there's a pre what the pre specified endpoint is?

Speaker 3

Sure. So as you originally, we The original submission or the original agreement with the FDA was on 70 patient In cohort 4, and we had to meet pre specified endpoints and a lower bound of 2020. And clearly, things are trending very well right now, and I'm going to leave it at that because Obviously, the study is continuing to enroll. So we're tracking quite well, and that's why we're quite enthusiastic with The ESMO presentation.

Speaker 6

Okay. And can we expect to follow-up on this at some point too? Or are you guys

Speaker 3

Well, we definitely will want to release data once it matures a little more. We just have not given a date yet, but for sure, you will see some of that data as it matures.

Speaker 2

Okay. Okay.

Speaker 6

Thanks for taking my questions. Sure.

Speaker 2

Thanks,

Operator

Murray. Next question comes from the line of Ed White of H. C. Wainwright. Ed, your line is now open.

Speaker 2

Hey, Ed.

Speaker 3

Hi, Joe.

Speaker 4

Thanks for taking my questions. So I do have a couple of them. First on Cohort 4, you had the 48 patients presented at ESMO. Can you just remind us, are these 48 patients going to be the only ones At the 16 milligram and then the other 22 will be at the BID dosing Or would it be less BID dosing than 22 patients out of the 70?

Speaker 3

So as you know, we presented the first 48 patients giving efficacy and safety. We provided a A little bit of additional data on some of the BID patient. But the So once the data matures and we're continuing to enroll right now, and once we do analysis And as some discussion with the agency, we'll decide how much data we have, how much We need to potentially go for registration. But we just don't have Any additional guidance to give you today?

Speaker 4

Okay, Francois. Well, maybe we could talk about Another product in the pipeline, the 5th platform, you haven't really discussed that. I was just curious if you can give us any update on the ING002 and refractory non Hodgkin lymphoma, is there any update there? And then also as far as the Pozy and KRAS preclinical data go, As you look at that data, are you thinking of running a company sponsored trial in the clinic in that patient population or with KRAS product or perhaps an IST, something like that?

Speaker 3

Sure. So let me start with FIT. So as you know, we've indicated that before. When you do a 1st in man dose escalation study, you don't have efficacy data. And What has happened is during the worst part of the COVID pandemic, this study got caught into that.

Speaker 3

It Clearly, it was impacted negatively in terms of accrual, and It has performed clearly slower than we wanted. So we're reviewing that asset and making Sure that we want to what we want to do with the asset, it's currently Open and recruiting, and we will assess this following a review Given how long it's been going, so we'll update you on this. Clearly, the priority is Posey, ROLONTIS rather than these very early stage program. So that's the first answer. The next one for the KRAS.

Speaker 3

So we're quite excited. I mean, we'll grant you that this This is preclinical data, but nonetheless, it really shows ARAS inhibitor, one of which Amgen has been approved, but there is relatively rapid development of resistance. And Companies and investigators realize that they're going to have to combine drug. And the question is, which one You combine to get the best outcome for patient. And the in vitro data is really encouraging because it shows that You don't need just a TKI here, but you really there's an advantage, at least in vitro, To have a true pan HER inhibitor.

Speaker 3

And to our knowledge, the most potent one is poziotinib. So we're clearly very interested in pursuing this further. We have not, at this stage, Decided if it's going to be with an ISS or a company sponsored study, but we'll update you, I'm sure, in the near future.

Speaker 4

Thanks. And maybe finally just a question to Kurt. I was just wondering, you're doing a great job With your cost cutting, can you give us any guidance on cash runway or maybe Directionally, what we can be seeing in G and A and R and D as you're looking forward to the Responding to the CRL and also submitting POCI for approval. Thanks.

Speaker 1

Sure, Ed. Yes, I mean, so we ended the quarter with $134,000,000 in cash and marketable securities. This Should be sufficient cash balance to kind of fund operations late into 2022, which obviously takes us through a time where we could potentially see Approvals for these 2 late stage assets. In terms of guidance, we don't give any specific guidance. We as I mentioned on the call, We have been looking to control and manage expenses given the recent CRL.

Speaker 1

And so you did see G and A expenses Our SG and A expenses will be a little bit lower this quarter. So we will look to continue to go do that. But obviously, we want Invest to make these assets successful. So, we are going to continue to put money into the brands for poziotinib and ROLONTIS, But we'll look to cut kind of areas that are non critical to moving those assets forward here in the next few quarters.

Speaker 4

Okay, great. Thanks, Kurt.

Speaker 2

Sure. Thanks, Ed.

Operator

Next question comes from the line of Michael Schmidt of Guggenheim. Michael, your line is now open.

Speaker 2

Hey, Michael.

Speaker 3

Hey, this is Paul on for Michael. Thanks for taking our question. Just one from us On poziotinib, Head of the NDA submission, I wanted to confirm your thoughts on the approval hurdle for previously treated Sure. So, I mean, we're going for It's Cohort 2 data, so it's a patient who have had at least one Line of treatment for HER2, exon 20, and it's really pure exon 20 Insertion mutation. So there is no approved drug there.

Speaker 3

And given the timeline and that we think are going to meet here. We really have the potential to be the 1st to market. And in our eyes, there is a number of other drug in development, But they when it looked they looked at if you look at their data for true exon 20 insertion mutation, HER2, We think we have very good data at this point. Got it. Okay.

Speaker 3

Thank you.

Operator

Sure. Next question comes from the line of Mayank Mamtani of B. Riley Securities. Mayank, your line is now open.

Speaker 7

Hey, Mayank. Hey, good afternoon. Thanks for taking our questions and congrats also on the progress. So at the highest level, Francois, if I may just ask you your latest thinking on the path For registration for the BID dose, is it just getting more patients treated, higher sample size, longer follow-up across cohort 5 and Cohort 4. And then the specific question I had was, as part of your NDA filing, what confirmatory study are you committing to in terms of design?

Speaker 7

Because obviously, you need to do that as part of the X-ray approval.

Speaker 3

Yes. 2 very good questions. So the BID data, we thought that it was an important win in Some of the discussion we've had with the agency so far that they allowed us to include some BID data on top of the QD data from Cohort 2. So I can't give you an exact Final answer, if you want, as to our latest thinking about BID, because I think it's going to really depend on how the FDA will interpret the BID data that we have Put in the NDA as it goes in. So we'll have to judge their How they feel about the BID data?

Speaker 3

Clearly, we have shown that there was some very good activity that was Maintain as well as a side effect profile that appears certainly in the early patient that we have seen To be favorable to QD. So that's going to go in there. We're going to have some discussion during, I imagine, the NDA Review and we'll see where we go from there. So that's the first question. I think, I'm sorry, can you remind me of your second question?

Speaker 7

Yes, the confirmatory study to get the full approval.

Speaker 3

Yes, absolutely. So we I would say we're in discussion with the agency regarding this, and we clearly have developed A PMR, when you file the NDA, you have to have PMR essentially underway. And so we absolutely intend to do that. But obviously, we want to make sure we are in complete agreement, if you want, as to the nature of the PMR. So I'm not going to go any further on that, but it's probably a randomized controlled study that takes the So call what clinicians use because there is no approved The standard of care or approved drug for the AZERD II patient, there are multiple guidance from various groups, But those are not they don't have the same strength as prior approval.

Speaker 3

So right now, it's Some form of chemotherapy, as I'm sure you know, and plus or minus some checkpoint. And we'll need to define that with the agency. And Probably quite soon, you will be able to see what we're doing.

Speaker 7

Understood. And my final question on Just remind us where we are with Cohort 6. Just trying to understand the osimertinib failures. Like kind of what the end market there is and how are you maybe enrolling there with the new dose 8 mgb?

Speaker 3

Yes. So we certainly they're continuing, CORT 6 and 7 are continuing to enroll. There is some restriction of where we need genetic profiling of the tumor at time Of relapse, if you want, and that obviously gets in the way a little bit of accrual, but they're accruing. And obviously, that's not our focus, primary focus. We're focused on the NDA.

Speaker 3

But at some point, we will Certainly, announced the result of COVID 6 and 7. I just don't have a date for you quite yet.

Speaker 7

Thanks so much for taking our questions.

Speaker 2

Sure. Thank you, Mayank.

Operator

Next question comes from the line of Rene Benjamin of JMP Securities. Rene, your line is now open.

Speaker 2

Hey, Ryan.

Speaker 8

Good afternoon. Hey, Joe. How are you? I apologize, my phone dropped, so you may have answered this already. But As I think about the BID data and the QD data and the fact that you'll be submitting this NDA and have the option Obviously update it, I guess, with BID data.

Speaker 8

Do you think that you could, in this iteration of the NDA, Wind up getting a label that includes both or do you feel that you know what we'd likely need to file this as a separate sort of sNDA when it comes to BID dosing. And just related to that, how many patients total do we have that have been treated with BID?

Speaker 3

So the first question, I did answer it a little earlier, but let me give you the Cliff Snow here. So we were very pleased. The agency has allowed us to include the BID, Some of the BID data that we had in the NDA, which as you know is QD dosing. So we'll get a chance to discuss with the agency that BID data. And obviously, That body of data is increasing all the time.

Speaker 3

So we have BID dosing And if you look at non small cell, we're in cohort 5, we have some in cohort 4 And 6 and 7 as well. So we have not disclosed the exact number of patients Yes, we have so far. You know that we have more than 22. And let's just say that there is we're In excess of 100 patients when you combine all the cohorts where we're using DID.

Speaker 8

Got it. Thanks for answering that. And again, apologies since you had to answer it twice. Did you also answer before if I guess the other question I have is do you think there might be an ODAC panel for this application?

Speaker 3

Yes, I don't know. Right now, I don't think it's often the ODACs are For when there is a controversial issue that the agency wants To get input from the oncology expert community, So far, there's no to our knowledge, there's no major Your controversy here, we have met the primary endpoint as Agreed with the agency some time ago, and we believe that we have a safety profile that is really predictable, very much in line with other TKI. There's no kind of idiosyncratic reaction. So We obviously, we can't predict what the FDA will want to do eventually, but right now, we have no any We don't have any indication that, that will be necessary.

Speaker 8

Got it. And then just switching gears to ROLONTIS. Joe, you guys did a great job And addressing a lot of these deficiencies, at least a lot quicker than I would have thought. Could you maybe give us just A little bit of color and I mean it seemed like there were pretty small boxes to check just given how quickly they were remediated. But can you give us a sense and Both the facilities, what really needed to be corrected?

Speaker 8

And I think this last remaining gating item at Hanmi, which you hope will be completed by the end of the year, Whether when you had your meeting with the FDA, you were able to show them documentation that said that it was Taken care of or they kind of just take your word for it? It's more just like a free flowing dialogue and they'll ultimately just come in and Reinspect everything and go with their own decision.

Speaker 2

No, I wish it was that easy. What it is, is you go in, we went in, we had the Class A meeting, as Chad, and we clarified we want to make sure, okay, exactly what it is that we need to remediate. We immediately started, but once the CRL Happened back in August immediately, Hanmi went to work on remediation because you get they tell you what it is. And so we immediately got There's one gating item that as you pointed out is we feel pretty confident it's going to be done by the end of the year. That's why we say we could filed shortly after that.

Speaker 2

Now they still have to have someone come in and inspect a plan. They still have to go through all the CAPAs. Part of the remediation is you do CAPAs. So they'll still go through all those, but what we've done is put the remediations into play, put the CapEx in place And that will all be part of the final inspection and decision in the end.

Speaker 8

Got it. Great. Thanks for taking the questions.

Speaker 2

Thank you,

Operator

There are no further questions at this time. I would now turn it back to Joe Turgeon.

Speaker 2

Thank you, operator. Listen, I'd like to thank all of you who are on the call listening and for your participation on the call today. I really appreciate all your interest in Spectrum. Just to let you know, we'll be participating virtually in the Jefferies Healthcare Investor Conference later this month and also at the JMP Hematology and Oncology Summit, which is in early December. So we look forward to talking to Many of you at those events also in the not too distant future.

Speaker 2

Again, everybody, thank you for your interest and have a great evening. Thank you, operator.

Operator

You're very welcome and thank you so much to our presenters and to everyone who participated. This concludes today's conference call. You may now disconnect. Have a great day.

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Spectrum Pharmaceuticals Q3 2021
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