Aveo Pharmaceuticals Inc (AVEO) 2011 Q3 法說會逐字稿

Thank you for holding for AVEO Pharmaceutical third quarter 2011 financial results conference call. At this time all participants are in a listen only mode. Following the formal report, AVEO management will open the line for a question and answer period. Please be advised that this call is being taped at the Company's request and will be archived on the Company's website for two weeks. At this time, I would like to introduce Ms. Monique Allaire. Please go ahead.

Thank you, Carma. And good morning everyone. Thank you for joining us on the call today. With me today are Tuan Ha-Ngoc, our President and Chief Executive Officer; and David Johnston, our Chief Financial Officer.

Earlier this morning we issued a press release detailing our third quarter 2011 financial results, which is available on our website Aveopharma.com. Please note that all information discussed on the call today is covered under the Safe Harbor Provision of the Private Securities Litigation reform act of 1995.

During the call today we will be making forward-looking statements that involve risks and uncertainties, which are described in the Risk Factor section of AVEO's most recent quarterly report on Form 10-Q filed with the SEC and available online at SEC.gov.

All of the information in this call is accurate as of today, November 2, 2011, and should not be relied upon as representing AVEO's views on any date in the future. While AVEO may choose to update these forward-looking statements in the future, we disclaim any obligation to do so. Let me now pass the call to Tuan.

Thank you, Monique. And good morning everyone. In the third quarter we were very focused on continuing to execute on our business strategy and advance our clinical development programs. I am pleased with the progress we have made on all fronts and our momentum toward building AVEO into a sustainable fully integrated oncology company.

Importantly, we are looking forward to the release of top line data from TIVO-1. As you know, TIVO-1 is our pivotal Phase III trial evaluating the potential of Tivozanib as a first-line treatment for patients with advanced renal cell carcinoma, or RCC. TIVO-1 is a superiority designed trial comparing the efficacy and safety of Tivozanib to Serafenib.

Since the primary endpoint of the trial is progression-free survival, the timeline for trial completion is entirely dependent upon the accumulation of qualifying events. Based on our most recent look at the aggregate number of events, we believe that we are set to reach to necessary number this quarter. As such, we expect to report top line data from TIVO-1 in the first quarter of 2012. We continue to be confident in the potential Tivozanib in RCC and look forward to reporting top line data once they are available.

We also believe strongly in the potential of Tivozanib in other cancers. With our partner Astellas, we are executing on our plan to expand the deployment of Tivozanib into colorectal and breast cancers independent of the TIVO-1 data. We believe data from these studies will position Tivozanib to be competitive in the evolving treatment landscape in those indications.

Indeed, in collaboration with Astellas, we are on track to initiate a Phase II study of Tivozanib in patients with colorectal cancer this year. While we initially anticipated starting the breast cancer study this year as well, we now anticipate starting the trial in 2012 due to a supply shortage of a combination agent. As has been our practice, we will disclose more information about the design of these two trials once they are initiated.

We also are making progress with Ficlatuzumab, a novel wholly owned HGF/c-MET pathway inhibitor. In early studies, Ficlatuzumab has demonstrated the ability to be safely combined with important anti-cancer therapies, Tarceva and Iressa. We are currently evaluating Ficlatuzumab as first line therapy in non-small cell lung cancer patients with wild type and mutant HGFR in a Phase II trial in combination with Iressa versus Iressa alone.

Earlier this year we announced that we completed enrollment of 188 patients in this Phase II trial and we remain on track to report topline data in 2012.

Finally, during the third quarter we continue to add outstanding talent across various levels and functional areas within the Company in order to rapidly advance Tivozanib and Ficlatuzumab as well as our earlier stage pipeline of antibodies including AV-203, our Erb3 targeted antibody.

We look forward to sharing those updates with you on each of these programs as they occur. With that, let me turn the call over to Dave to review our financial results. Dave?

Thanks, Tuan. Good morning everyone. Since we issued a press release this morning outlining our third quarter 2011 financial results, let me just review the highlights. Then I'll speak to the balance sheet and where we expect it to take us.

Total collaboration revenues for the third quarter were $3.6 million, compared to $6.2 million in the third quarter of 2010. This decrease was primarily due to the fact that no revenues were recognized from Merck in the last quarter since our agreement was terminated in 2010.

Research and development expense for the third quarter was $20.1 million, compared with $20.3 million for the third quarter of last year. As a reminder, 50% of TIVO's development costs are reimbursed under the cost-sharing provisions with our agreement with Astellas. And this cost-sharing resulted in a quarter-over-quarter decrease in expense partially offset by an increase in total expenses related to Tivozanib.

G&A expense for the third quarter was $6.6 million, compared with $3.6 million for the third quarter of last year. The increase in G&A spending was primarily driven by higher personnel related expenses as we increased head count in key functional areas in preparation for the NDA filing and potential market launch of Tivozanib.

Net loss for the third quarter was $23.8 million, resulting in a basic and diluted net loss per share of $0.55 based on 43 million weighted average shares outstanding. AVEO ended the third quarter with cash and marketable securities of $296.4 million.

We reiterate the guidance we set in July that we expect to end 2011 with at least $230 million in cash and marketable securities, and we anticipate that this capital should allow us to fund our current operating plan beyond 2012.

With that, let me open the call up for questions. Operator?

(Operator Instructions) The first question comes from the line of Geoff Meacham from JPMorgan. Please proceed.

Hi, guys. Thanks for taking the question. Approximately how long do you guys think it will take once you've scrubbed the data from TIVO-1 to the top line. Do you think you'll have it at that small investor conference in early January or is that too early?

Good morning, Geoff. How are you? We have stated previously that once we have reached a number of events, it would take us between six to eight weeks to scrub the data. And that's what we're currently looking at.

So, depending on when we actually reach that number of events in the fourth quarter will determine the timing of the release of top line data in Q1 of 2012.

And then will you let us know if you've hit the events, or is that - should we expect some sort of press release with communication or not?

No. Actually, it has been our practice not to communicate intermediate time points or events. So we will be releasing the top line data when we have it available.

And then, now that you guys have a little bit more specificity on the timeline for data release, is there anything you can tell us with respect to the NDA filing? Any other gating factors, studies that have to mature or CMC, or pre-clinical talk, stuff like that? What else in the filing needs to be wrapped up?

Well, as you know, the NDA filing incorporates several sections. Of course, the clinical data is the most important section but there is also all the CMC and non-clinical sections. And we have been working on that in parallel with waiting the data from TIVO-1. And so only guidance we are at this point providing is that we are looking at 2012 for the potential NDA filing, assuming of course that it's positive data coming out of TIVO-1.

And then one final question just on Ficlatuzumab. I know you were getting closer to having a data release there. From a sort of next steps perspective, how are you guys thinking about, as we get closer to data, the positioning here to the US or European market - kind of the next steps within the lung cancer paradigm - just given, obviously, your comparator, is Iressa here.

It's a Japanese study, but just trying to get your sense in terms of the potential range of trials and indications and design looking out, say, 12 months or so?

Yes. Just one small clarification. It is not a Japanese study, it is a study based in Asia. And as you may recall, the reason is that we want to make sure that we have a balanced proportion of wild type of [sensitizing] mutations. That's the clarification.

In addition, we have - again as a reminder - that in early studies we have demonstrated the compatibility of Ficlatuzumab with both Iressa and Tarceva so that provides us with the option to know that we may go to either one.

And then the last part, a central part of the answer to your question is that we have developed several options but at the end, the data will determine which is the best option for us. I think that the data, as you know, we will be looking at a total patient population as well as the sub-groups as they come in by the HGFR status, as well as the MET level.

Thanks.

The next question comes from the line of Thomas Wei from Jaffray. Please proceed.

Thanks. I had just a couple of questions on actually the comparison of TIVO and Axitinib. I was just wondering if you could help us understand some of the key differences that you see between your pivotal trial of TIVO and the ongoing front line study of Axitinib versus Nexavar in terms of trial design or baseline characteristics or geographic enrollment that could influence some of the cross-trial comparisons?

And then also, just so that we keep our eye on the right data points out of the Pfizer study, what would you say are some of the comparisons on safety that you would highlight as potential advantages for TIVO? Thanks.

Good morning, Thomas. As you know, Axitinib has been studied and actually still ongoing studies on two studies. One that we have data presented at ASCO earlier this year is a second line study. The one I guess you are referring to is the ongoing front line study.

We prefer not to comment too much on that because there have been evolving protocol design on that study which initially started out in Asia and then later on been expanded both geographically as well as the type of patients. So it is an area that we don't have full access to exactly what's going on, so we'd rather not comment on that.

The thing we continue to believe in Tivozanib is that with the biochemical properties that we have observed with Tivozanib and the Phase II data where we show both the efficacy and safety potential benefits to the patients, we see that Tivozanib will show to bring the best outcome to the patients. And that's what we'll be focusing on.

And I think after that, once we have the data, we'll be happy to expand on that. But at this point in time I think that I would prefer to refrain from commenting on not a complete understanding of all the moving parts of our Pfizer Axitinib trials.

The next question comes from the line of George Farmer from Canaccord. Please proceed.

Good morning. Thanks for taking my question.

Tuan, I just want to follow up on Thomas' question about Axitinib. We have an ODAC panel coming up on December 7 where ODAC is going to review the second line trial that was presented at ASCO.

Have you guys thought about any implications coming out of that panel that could help you in positioning Tivozanib? And are you worried about, perhaps, the chance that Axitinib getting a broad label or being recommended for a broad label coming out of that event? Thanks.

Good morning, George. I think that as we already commented, upon presentation of those trials at ASCO, we remain confident of Tivozanib showing a clear differentiation vis a vis the products on the market under development.

As to specifically the ODAC meeting, yes there is one scheduled very soon. And we'll be interested at looking at the ODAC view on the second line trial, particularly with regards to the label.But we will continue to remain confident that directly designed first line study, which is TIVO-1, would bring clear answers to the labeling issue.

And regarding Ficlatuzumab, can you share anymore information regarding EGFR status of your patients, specifically in the Phase I trial? Can you share at all with us how many of those patients may have had activating mutations in the intent to treat; and then those that responded?

Are you referring to the Phase II trial?

The earlier Phase I study. The earlier trial that was presented.

I think that whatever data that we can talk about already presented on the posters, I believe, early on with those studies. But I don't think that we actually disclosed the actual EGFR status among the small set of patients.

Do you think we'll see that perhaps before the broader Phase II trial results are presented?

At this point, I think that the better understanding about Ficlatuzumab would be to wait for the larger study, which is Phase II, rather than try to speculate from a small end of the early Phase I studies.

As you know, the ongoing Phase II study on Ficlatuzumab is an open label, so we do have an opportunity internally to look at that from time to time.

Thanks very much.

Thank you, George.

(Operator Instructions) The next question comes from the line of Howard Liang from Leerink Swann. Please proceed.

Thank you very much. When you announce the top line data from TIVO-1, I was just wondering how much detail will we get? Will there be interim overall survival data? We'll need there be some PFS data. Also, I think a safety and tolerability is an important aspect of the profile of the agent. How much detail will we get on that when you announce the top line data?

Good morning, Howard. As you know, I think that we want to make sure we balance the needs for shareholders as well as the needs for penetration at a proper medical setting. So, we will try to provide the top line data in both the efficacy and on the safety.

As to exactly which data we'll be presenting we will be addressing that when the time comes. Clearly, the primary end point will be included and that is obviously the PFS. And then whatever additional data would be a question of our discussions with our appropriate authorities at that time.

And regarding the additional indications for Tivozanib, I don't know if I mixed it up with something else. Was the plan previously to start Phase III for colorectal and breast cancer? Was it Phase III or Phase II previously?

Yes. What we have talked about in the past that we will be announcing a large study in colorectal. And this morning we have further specified that will be a Phase II setting for colorectal. We intend to be on target which is to initiate that particular study by the end of this year. And when we do do that, we will make an announcement as to the specific design of it.

And I don't know if you can talk about a specific design at this point. But since you said it was for breast cancer it was in combination with the agent that's in short supply. So,can we assume that it's probably an IV infusion agent?

Howard, we'd rather not comment on that because, as you know, our practice is not to have even a partial discussion of our design, which the answer to your question would get us into. So, we will disclose the full design upon initiation of such study.

But the study that you will start in 2012 in breast cancer, will that also likely be a Phase II?

At this point, we don't comment on exactly whether it's going to be a Phase II or not, and for competitive reasons.

If I could ask one last question. Ficlatuzumab, what are the other trials ongoing and maybe the plans for other indications?

As I said, because it's open label, we are looking at the data as it comes. And then we are also in the process of putting together more comprehensive strategies about development of Ficlatuzumab within the non-small lung cancer as well as with other tumor types.

Thanks very much.

Thank you.

The next question comes from the line of Jason Kantor from RBC Capital Markets. Please proceed.

Thanks for giving us the update on the enrollment status, or the event status, actually. Could you just give us some sense of when the last time you did look at those numbers were?

Good morning, Jason. Very recently.

And is the next look at planned -- you know, like a scheduled monthly look where you're expecting you'll hit that? Or do you get some kind of trigger notification when the number of events has occurred?

As you can certainly imagine, once you get down to that end of the curve, we want to make sure that we don't let time go by and waste it. So we would have a very frequent look at making sure that we recognize when it did cross the line.

And has your view evolved on what you would consider a positive outcome here? Obviously, you have to beat Nexavar. But there's competitive issues in terms of what your actual PFS number comes out to be. Could you give us some sense of what you would consider a positive result?

Yes. I think that's obviously the central question. And for us, the central question focuses on the patient. And the key is to make sure that we, through Tivozanib, deliver the maximum value to our patients. And that's a combination of efficacy, of course, but also of safety which is also linked to the efficacy through compliance by staying on treatment.

So we view that as the most important guide for ourselves, and we believe that the full value of Tivozanib will be revealed when we have the data. And we remain confident of the outcome of our TIVO-1 study which would, hopefully, show that we indeed will bring that kind of value that we had hoped to bring to the patients.

Just two quick other questions. Which drug is in shortage which is delaying the start of the Phase II on breast?

Jason, I'm sure you understand that we cannot reveal the identity of such a drug because in doing so it would start approaching determining what kind of study design we have in mind. So, as I say, for competitive reasons we will not disclose exactly what kind of study it's going to be until the study has initiated.

And then, finally, you reported cash of almost $300 million at the end of the quarter. You're talking about year-end cash of at least $230 million. I mean, burning $60 million in the quarter would be quite a lot. Was there some sense, some thought to updating that year-end guidance? Or is $230 million a possibility?

Good morning, Jason. Dave here. So, we gave that guidance mid-year, and since it is November, we're not going to change guidance. I think that the two key words would be 'at least.'

But as a reminder, as you do know from our history, our cash flows tend to be lumpy in terms of what comes in, in terms of collaboration revenues, and trial starts and that sort of thing.

So, it's always a bit dangerous to look at the last quarter and just project forward. But at the same time, I think that in not changing our guidance, it was primarily in recognition that it's so late in the year.

Thank you all.

Thanks.

Thank you.

And we have no further questions at this time. I would now like to turn the call back over to Tuan Ha-Ngoc. Please proceed.

Thank you. In conclusion, I am pleased with the progress we've made on our strategies, all in an effort to improve the lives of patients living with cancer.

We are on track for significant updates in the coming months, most notably with top line TIVO-1 results expected in the first quarter 2012. And we are confident in the future success of our pipeline.

Thank you for your continued interest and support, and have a nice day.

This concludes the presentation for today. Ladies and gentlemen you may now disconnect. Have a wonderful day.