Day One Biopharmaceuticals Q4 2024 Earnings Call Transcript

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February 25, 2025

There are 10 speakers on the call.

Operator

Hello, ladies and gentlemen, and welcome to the DayOne Biopharmaceuticals Fourth Quarter and Full Year twenty twenty four Financial and Operating Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please be advised that this conference call is being recorded. I would now like to turn the call over to Joey Perrone, Senior Vice President of Finance and Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you. Hello, everyone, and good afternoon. Welcome to DayOne's fourth quarter and full year twenty twenty four financial and operating results conference call. Earlier today, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release and the slides to accompany this conference call on the Investors and Media section of our website at www.day1bio.com.

Speaker 1

An audio webcast with the corresponding slides is also available on the website. Before we get started, I'd like to remind everyone that some of the statements that we make on this call and information presented in the slide deck include forward looking statements as outlined on Slide two. Actual events and results could differ materially from those expressed or implied by any forward looking statements. We encourage you to review the various risks, uncertainties and other factors included in our most recent filings with the SEC and any other future filings that we may make with the SEC. These forward looking statements are based on our current estimates and various assumptions and reflect the management's intentions, beliefs and expectations about future events, strategies, competition, products and product candidates, operating plans and performance.

Speaker 1

You are cautioned not to place any undue reliance on these forward looking statements. And except as required by law, DayOne disclaims any obligation to update such statements. Today, I'm joined by Doctor. Jeremy Bender, Chief Executive Officer Laura Marandino, Chief Commercial Officer Charles York, Chief Operating and Financial Officer and Ellie Barry, Chief Medical Officer. I will now turn the call over to Jeremy.

Speaker 2

Thank you, Joey, and good afternoon. I'm pleased to share our fourth quarter earnings and full year financial results with you today following an exceptional 2024 for day one. I'll also provide an update on the significant progress we've made towards delivering on our mission of developing new medicines for people of all ages with life threatening diseases. 2024 was a landmark year for our company and the patients we serve. Our most important achievement for the year was the FDA approval of our first new medicine OjEMda in relapsed refractory pediatric low grade glioma.

Speaker 2

OjEMda's approval and launch are an important step forward for PLGG patients and for day one. We believe Ojemta commercialization will drive durable long term value creation. Our accomplishments in 2024 extend beyond the approval and commercial launch of Ojemta. We also advanced enrollment in our frontline FLY-two clinical trial of tovorafenib in pediatric low grade glioma. We established an ex U.

Speaker 2

S. Partnership for OjEMTA with Ipsen and we in licensed DAY-three zero one. All of this was achieved while also strengthening our financial position. Ojemta's launch performance in 2024 put us in a strong position to further advance Day one's goals. Throughout the year, we observed consistent growth in quarterly net Ojemda revenues.

Speaker 2

For the full year 2024, net product revenues totaled more than $57,000,000 This represents approximately eight months of sales following Ojemda's April approval. Fourth quarter net product revenues were $29,000,000 which represents 44% growth versus Q3. New patient starts exceeded our expectations and have set the foundation for Ojemda's future growth. We also achieved modest improvements in our gross to net deductions in Q4 driven by CMS agreeing that Ojemta is approved exclusively for pediatric indications. We'll provide more detail on that topic later in this call.

Speaker 2

Importantly, in July, we entered into an exclusive licensing arrangement with Ipsen for ex U. S. Rights to AGEMDA, which if approved by regulatory authorities will help patients who are living with relapsed or refractory PLGG outside of The United States to gain access to OjEMTA. We also advanced our pipeline in 2024 through the FARFLY-two trial and the acquisition of DAY-three zero one. FIREFLY two, our Phase three frontline PLGG trial continues to enroll.

Speaker 2

It is now open at more than 110 sites in The United States, Canada, Europe, Australia and Asia. In January, we announced that we expected to be fully enrolled in the first half of twenty twenty six. We also expanded our pipeline with the acquisition of DARE-three zero one in June 2024. DARE-three zero '1 is a clinical stage antibody drug conjugate targeting PTK7 in solid tumors in both adult and pediatric patients. This program has both first and best in class potential and is currently in the dose escalation portion of a Phase 1ab clinical trial.

Speaker 2

In January of this year, we announced that we cleared the first dose cohort in that trial and we're now enrolling patients in the second dose cohort. We also strengthened our financial position ending 2024 with over $500,000,000 in cash. This strong cash position provides us with the ability to operate, to invest and to advance our pipeline, all critical components of growing our company. We entered 2025 in a strong position and we have three priorities this year to take advantage of and strengthen that position. The first is to continue driving Ojemta revenue growth.

Speaker 2

As Lauren will share with you shortly, the opportunity to drive growth through expansion of the prescriber and patient base for OjEMTA is significant. Our second priority is to continue advancing our pipeline, specifically enrollment in the FIREFLY-two trial and dose escalation in the DAY-three zero one Phase one trial. Our third priority is to continue expanding our pipeline with programs that have the potential to become important new medicines for patients. We remain focused on acquiring and in licensing programs that have the potential to be first or best in class and we are in a strong financial position to do so without requiring external financing. Two critical capabilities have driven our success last year and in the years leading up to 2024.

Speaker 2

The first is our team's expertise in the development, registration and commercialization of new oncology medicines. The second is our ability to identify and acquire new programs such as DAY three zero one. We have both the capability and the capital to identify high value opportunities that will help lead us through the next stage of the company's growth. I'll now turn the call over to Lauren to discuss our commercial progress in greater detail.

Speaker 3

Thank you, Jeremy, and good afternoon. I'm excited to share strong results from the fourth quarter and full year of 2024. In Q4, Ojemda net product revenues grew to $29,000,000 resulting in $57,200,000 for the eight months since launch. This represents 88% compounded quarterly net revenue growth for this period. This performance was driven by over 1,600 cumulative total prescriptions with Q4 nearly doubling the number of prescriptions in Q2 and Q3 combined.

Speaker 3

This momentum underscores the robustness of our growth trajectory and the continued demand for OjEMDA. Quarter over quarter in 2024, we continued to show substantial growth in net product revenues. In Q4, we grew sales by 44% versus Q3. We attribute these impressive results to three key factors. First, continued growth in new patient starts.

Speaker 3

In each quarter since launch, we have delivered double digit growth in the number of non EAP new patient starts, driven by an expansion in both breadth and depth of prescribing. Secondly, high on label patient continuations. Each month, a high percentage of OjEMTA PLGG patients continue to go on to receive additional months of therapy. This is consistent with our expectations based on our experience in the FIREFLY-one trial, where we saw a median duration of treatment of about twenty four months. While some patients have discontinued treatment, it's important to note that thirty percent to forty percent of the Ojemda discontinuation since launch have been in patients receiving Ojemda for non promoted off label uses, generally in faster moving tumor types.

Speaker 3

The median duration of therapy among these patients has been about four to five months. Overall, we ended the year in a strong position with over two eighty active patients on drug as we head into 2025. The third factor in our net revenue growth this quarter is an improvement in our gross to net due to CMS granting Ojenda an exclusively pediatric designation, which you'll hear more about from Charles in a moment. Now let's look at the progress we've been making on breadth and depth of prescribing. The data on this slide represents our on label non EAP new patient starts.

Speaker 3

On the left, you can see that quarter over quarter, we have made significant progress in increasing the number of accounts utilizing Ojemta. Each priority category accounts for about a third of U. S. PLGG patients, and we're pleased to report that one hundred percent of our highest volume accounts are now utilizing Ojemta. On the right, you can see the continued uptake of accounts utilizing Ojemta and the expansion of use into multiple new patients.

Speaker 3

Almost half of accounts using Ojemta have now prescribed it for two or more patients, including over 80 of our priority one accounts. While we are pleased with the progress we've made to date, most importantly, this slide highlights the tremendous potential we have moving forward. There are still many PRIORITY two and three accounts that have not yet prescribed OjEMTA. These may be prescribers whose habits are more embedded. We are focused on increasing their comfort with Ojemda to encourage them to prescribe for their first patient.

Speaker 3

The opportunity to drive depth is even more compelling. There are many more PLGG patients who may benefit from Ojemta. As physicians are gaining experience with our product, their confidence is growing and they are identifying new patients to put on Ojemta. We continue to expand physicians' thinking on patient types and create urgency to use Ojemta in the second line. Due to the slower moving nature of this disease, it'll take time to realize the full potential of this brand, but our uptake to date has laid the groundwork for us to continue to drive growth throughout 2025.

Speaker 3

While our sales and marketing teams have been focused on driving breadth and depth, our access team has done an excellent job of establishing coverage for Ogemda. With over 75% of covered lives now having published policies and about ninety five percent of on label patients receiving coverage, we can now state unequivocally that Ogemda has broad coverage. This has been a significant driver in our launch year as payers have been covering patients at high percentages since early in launch, and it will continue to be a significant driver as prescribers have an easier path to starting a patient on Ojemta instead of going through multiple appeals to get approval for an off label treatment. We're proud to report that in Q4, over eighty percent of PLGG patients received coverage approval for Ojemda on their initial request. And on average, their drug was shipped less than seven days after their script was written.

Speaker 3

2024 has been an amazing year for Day one and for Ojemta. Off of this strong foundation, we will build our success in 2025 by focusing in three key areas. First, as previously mentioned, it's important that we continue our focus on increasing breadth and depth of prescribers. There continues to be significant opportunity for us to increase the number of prescribers with OjEMTA experience and expand their use to a greater number of patients. We expect to continue steady growth as prescribers gain more experience with OjEMDA.

Speaker 3

Second, we continue to aim to establish OjEMDA as the standard of care in the treatment of relapsed or refractory BRAF altered PLGG. While many physicians' first experience with our product may have been in later lines, we continue to differentiate OjEMDA and establish the rationale to use it earlier in treatment when patients are likely to receive the most benefit. Finally, we want to equip prescribers and patients with the tools and support they need to stay on Ojenda for as long as they see benefit. This means providing prescribers with more education and support as they gain experience and ensuring that our patient support materials and services continue to meet the patient and family needs. Overall, Ojemda launch exceeded all expectations in 2024 and our team continues to be energized by the tremendous opportunity we have to benefit a growing number of children with PLGG in 2025.

Speaker 3

I'll now pass it over to Charles for more details on our financials.

Speaker 4

Hello, everyone. Earlier today, we reported detailed fourth quarter and full year 2024 financial results in our earnings release. 2024 was an exciting year filled with remarkable achievements that create clear momentum as we enter 2025, all with a view to driving value creation. We finished the year strong, delivering our best quarter of net product revenue results since launch. Net product revenue from sales of Ojemda was $29,000,000 representing 44% growth compared to the third quarter.

Speaker 4

Total revenue for the fourth quarter twenty twenty four was $29,200,000 which is comprised of $29,000,000 in net product revenue and $200,000 in license revenue resulting from our ex U. S. Commercial licensing agreement with Ipsen. For the full year, total revenue was $131,200,000 including $57,200,000 in net product revenue from sales of Ojemta and $73,900,000 in license revenue. For the full year, we would like to highlight a couple of changes in our business.

Speaker 4

As is customary with newly approved medicines, Day one provided access to agenda for patients beyond U. S. Commercial availability through a named patient and compassionate use program. Beginning in 2025, Ipsen, our ex U. S.

Speaker 4

Commercial partner has assumed primary responsibility for delivering these programs to patients. As such, we will no longer book revenue for our named patient program. For context, we booked approximately $3,000,000 of revenue for the named patient program in 2024, spread about evenly over the third and fourth quarter that will not be recurring in 2025. As Lauren mentioned earlier, in the fourth quarter, we delivered tangible improvement in our gross to net after CMS approved our request to designate Ojemda exclusively for pediatric indications, which resulted in reducing Ojemda's Medicaid and 340B minimum rebate percentage 600 basis points from 23.1% to 17.1%. This is a meaningful improvement for day one and based on our product mix and standard discounts attributable to our distribution model, we believe our forward looking gross to net will be approximately 12% to 15% for the foreseeable future, absent any change in our payer mix.

Speaker 4

Our operating expenses were 91 point $600,000 and $343,200,000 for the fourth quarter and full year 2024 respectively as compared to $59,500,000 and $206,100,000 for the same periods in 2023. This increase relative to the fourth quarter of twenty twenty three was driven primarily by commercial investments that supported The U. S. Launch of Ojemta and a one time charge of $20,000,000 in R and D expense associated with the in license of DATE three zero one, our PTK7 targeted ADC program, which recently cleared the first dose cohort in the Phase 1a dose escalation trial. We fundamentally believe that our ability to maintain our strong financial position is key to building long term durable growth.

Speaker 4

Our cash flow from operations, equity financings and corporate development transactions in 2024 resulted in a cash balance of $531,700,000 We maintain a focused capital allocation plan that allows us to invest in opportunities that support growth while also prioritizing our current development plan as we believe these programs provide the opportunities for future value creation. Earlier today, Jeremy highlighted our internal expertise in oncology development, registration and commercialization that we believe is second to none. And those attributes set us in a clear path forward in 2025 and beyond. In closing, we are poised to execute on our goals in 2025 with great momentum, a strong foundation for continued growth and a durable financial position. We are excited to continue making Ojemta accessible to those who can benefit from medicine and we are marching down the path of generating long term sustainable value.

Speaker 4

Now we will turn it over to the operator for Q and A.

Operator

Thank you. We'll now be conducting a question and answer session. For the Q and A section of the call, we ask the participants limit themselves to one question with an opportunity for one follow-up question. We'll now open the line. Our first question is from Anupam Rama with JPMorgan.

Operator

Please proceed with your question.

Speaker 5

Hi, guys. This is Priyanka on for Anupam. Our question is, when might you be in position to give guidance for Agenda? Thanks.

Speaker 2

Hi, Priyanka. This is Jeremy. Thanks for the question. At this stage, the focus for us on determining when guidance will be available is about when we see consistency in both the growth of the revenue we see with Ojemda as well as the duration of treatment that will take some time for us to really understand just given that we are still quite proximal to launch.

Speaker 5

Thanks so much.

Operator

Our next question is from Andrea Newkirk with Goldman Sachs.

Speaker 6

Good afternoon. Thanks so much for taking our questions. Lauren, maybe could you speak a little bit more on the actions that are currently underway to drive this increased depth of prescribing? Specifically, what needs to be done from here to drive these physicians to prescribe to multiple patients? And then how do you think about prioritizing the sales team's efforts towards reaching priority three accounts versus driving increased penetration in a category such as priority one?

Speaker 6

Thanks so much.

Speaker 3

Yes. Thank you for the question. So from a depth perspective, really the focus is number one, physicians gaining further experience with Ojemda. We do believe that the product has a really compelling efficacy and safety profile that once they experience, they'll have an interest in utilizing it in more patients. But additionally, it's also about helping them understand the full range of patients that can benefit from Ojemta.

Speaker 3

As I mentioned in the earnings comments, oftentimes physicians start with a later line more complex patient, a patient who's maybe utilized all the other therapies that are available and they do that to get experience with Ojemta, but over time they tend to get more confidence and use it in a broader patient type. So our sales team and marketing efforts will be focused on educating them on the full range of patients that can benefit from Ojemda. And then to your question about balancing breadth of getting to those P3 accounts and depth, I'll just say our team has been focused on priorities one through three from the start. The priority three accounts, keep in mind, although collectively they account for about a third of PLGG patients, it's spread over a much larger number of accounts. So the number of patients that are managed by each account is smaller.

Speaker 3

So for some of these physicians, it can take time before they have an opportunity, even once they believe Ojemda and want to try Ojemda. It can just take some time before they have a treatment decision because they may be managing a smaller population of patients. So in general, our sales team will continue to be focused on priorities one through three accounts. It's just that the work they'll be doing at each individual account will differ based on where that physician's experience is so far.

Speaker 6

Okay. Thank you.

Operator

Our next question is from Tower Bancroft with TD Cowen. Please proceed with your question.

Speaker 7

Hi. Good afternoon and thanks for taking the questions. So mine is really about new patients. So how should we be thinking about the cadence of new patient starts this year? And what are you thinking could lead to inflection or acceleration there?

Speaker 7

Or should we really be thinking about this as more linear growth this year? Thanks.

Speaker 2

Tara, thanks for the question. Lauren, can you take that one?

Speaker 3

Yes. So as we've discussed previously, the pace of this disease is a little bit different than what you see in other oncology tumor types. And so even when a physician believes in a product, it can take time for them to have treatment decisions in order to increase their usage. So we have seen steady growth in our new patient starts and we anticipate continuing to see that. I don't envision a singular inflection point or a dramatic change in that.

Speaker 3

It's just going to be continued kind of steady growth.

Speaker 7

Okay, perfect. Thanks so much.

Operator

Our next question is from Joe Catanzaro with Piper Sandler. Please proceed with your question.

Speaker 8

Hey, everybody. Thanks for taking my question. Maybe first one for Lauren and your comments around creating urgency around second line usage. Wondering if you think about more second line usage as providing a near term benefit and creating a larger addressable pool of patients who could be on Ojemto? Or is it more of a potential longer term benefit with opportunity for those second line patients to have a longer duration of treatment?

Speaker 8

Any thoughts there would be helpful. Thanks.

Speaker 3

Yes. Thank you for the question. I think it's really a little of both, right? So if you have an earlier patient, they tend to be healthier, they tend to be starting off in a better place, which can lead to improved duration of treatment. It also means that there there tends to be more patients who have reached that point, right?

Speaker 3

So the answer is really both.

Speaker 8

Okay. Thanks. And then I guess if I could ask a follow-up maybe on DATE-three zero one. I know it's still the early days, but any expectations around sort of what would be the gating factor to sharing any initial clinical data for that program? Thanks.

Speaker 2

Joe, thanks for the question. The plan for us as it relates to disclosure of three zero one is to ensure that we have a sufficient data set that allows for, the external world investors, you all and the physician community to understand our development plan and the underlying rationale for it. And for that reason, I anticipate that certainly we'll need additional time and data from the Phase 1a portion or the dose escalation portion of the trial, but potentially also some dose expansion or dose cohort expansion data as well. And we haven't yet guided specifically around the timing of when those two datasets could be available.

Speaker 9

Okay, got it. Thanks for taking my question.

Operator

Our next question is from Alex Stranahan with Bank of America.

Speaker 9

Hey guys, thanks for taking our questions. First, just on the 1,600 scripts written since launch, which is great number. It would be helpful if you could sort of break down how many of those scripts were seen in 4Q alone since I believe you had, I think six nineteen quarterly scripts in 3Q and some in 2Q2. Is roughly seven fifty quarterly scripts in the 4Q sort of the right ballpark here? And then any sort of seasonal impact or stocking to note as you close the year?

Speaker 9

Thanks.

Speaker 2

I'll ask Lauren to answer both of those.

Speaker 3

Yes. So from a total prescriptions perspective, there were about 800 that were brought on in Q4. And I'm sorry, your second question was about stock?

Speaker 9

Just on any seasonal impacts or stocking as you close the 2024?

Speaker 3

So Charles, if you'd like to answer the stocking?

Speaker 4

Yes. Hey, Alec, how are you doing? So this is a good question, actually pertinent and relevant to this quarter. In addition, the important things to note that have changed for this quarter are two things. One, we did have a noted gross to net change in regards to the reduction of the gross to net associated pediatric exclusivity, which does drive an increase in our overall revenue.

Speaker 4

We also, as you would anticipate with a growing demand of patient scripts, on a dollar value basis, did increase the volume associated with channel stock, which does drive up the revenue for this quarter associated with that. Keep in mind though, what we've targeted from an operational perspective is the two to four weeks of inventory on hand. We met that during this quarter and we anticipate that going forward. But we would expect not only this quarter, but future quarters as we grow scripts to have the absolute value and volume of channel stock to increase.

Speaker 9

Okay, very helpful. Thank you.

Speaker 2

Thanks, Alex.

Operator

Our next question is from Amy Fadia with Needham and Company. Please proceed with your question.

Speaker 5

Hi, this is Poona on for Amy. Thank you for taking my question. Based on an initial interaction with the Clarity two and Clarity two prescriber, what do you think these physicians need to see or what do you need to do in order to drive increased agenda uptake? And how many sales interaction does it take with these physicians for them to prescribe AGENDA? And a second question, could you provide an overview of SAGE-one and how the product is differentiated from the other PTK7 targeting ADCs?

Speaker 5

Thank you.

Speaker 2

Thanks for the questions. Let me start with the second question, then I'll ask Lauren to answer the first couple of questions you had. So day three zero one is, as you know, the PTK7 targeted ADC. The linker payload in this case, are polysaccharisin linker with exotecan as a payload. The drug antibody ratio for this program is eight.

Speaker 2

And relative to other programs that are out there, this is potentially the first exotecan or topo one containing ADC in the clinic. There is another program out there that targets PTK7 that is currently in the clinic that has an orastatin payload and there are a couple of others that we're aware of that may enter the clinic soon that contain TOCO1 inhibitors. But we have what we see based on preclinical profiling and based on all public information, what we believe is a first invest in class opportunity. Let me turn it to Lauren to talk about the commercial topics you asked.

Speaker 3

Yes. So first let me just say for those accounts who have not yet used Ojemta, they really fall into two categories. The first category is that they're interested in trying Ojemta, but they're waiting for the right patient to need a treatment decision, right? So as I mentioned earlier, your priority two and your priority three accounts have less frequent treatment decisions than say a priority one account that has a higher volume of patients, right? So we have a number of physicians who have told us they're interested in trying Ojemta, but the first patient they want to try it in, they're waiting for that opportunity to try it.

Speaker 3

So that's one category. The other category are, those physicians who are a little more hesitant. They're late adopters. They're more hesitant to try something new. And for those physicians, they oftentimes want to hear from their peer physicians, from KOLs, their experience with a new product first.

Speaker 3

And so in those cases, we continue of course to call on those physicians and to provide opportunities for them to hear from other physicians what their experience has been. So there's no magic number of calls that gets an account on board. It really is a very individualized approach and understanding what that specific customer's thinking is on our product, how narrow they may be defining the patient type and whether we can help them see a broader picture. And in some cases, it's a bit of a waiting game for the right patient to need treatment.

Speaker 5

Understood. Thank you so much.

Operator

Our next question is from Andres Maldonado with H. C. Wainwright. Please proceed with your question.

Speaker 9

Hi, everyone, and thank you again for taking my questions. Two quick ones for me. On the guidance for the FLIR FLIGHT II enrollment, could you provide some color on what assumptions you took into account regarding the percentage of prescribers that are potentially using Ojemta in the front line to and then follow-up a quick one on three zero one. Given that this ADC targets a very unique pseudokinase PTK7, I guess what gives you the best conviction that using an ADC for this target is the best approach over different types of modality given the very unique signaling? Thank you very much.

Speaker 2

Sure. Thanks for the questions. On the FIREFLY-two trial, in our projection to complete enrollment in that trial in the first half of twenty twenty six is really based on the sites we have open today and the enrollment rate we're seeing in real time, both in The U. S. And outside of The U.

Speaker 2

S, predominantly outside of The U. S. As expected and is really not influenced or takes into account any potential off label use in the frontline setting in The U. S, which I would note has been very modest to date. Regarding DATE-three zero one, our conviction in PTK7 as a target comes from some work that was done for a program called cofetuzumab pelodotin.

Speaker 2

That was an orostatin containing ADC that was taken into mid stage clinical trials and for which there was substantial efficacy activity, albeit with a fairly low therapeutic index that we believe led that program to be discontinued. However, it did establish some proof of principle for PTK7 as a target that could be one that would be quite appealing with an agent that might have a better therapeutic index. And that's the thesis we have for DARE-three zero one that its properties and in particular, the antibody and the polysarcastine exotecan payload together will lead to a better therapeutic index. That's what we've observed in the preclinical modeling and studies. And that of course is what we're looking to replicate in the clinic.

Speaker 2

But that cofetuzumab precedence and proof of concept was quite important for our confidence in that as an ADC target overall.

Operator

Thank you. There are no further questions at this time. This does conclude our question and answer session and our

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