Aveo Pharmaceuticals Inc (AVEO) 2012 Q1 法說會逐字稿

Welcome to AVEO Pharmaceuticals First Quarter 2012 Financial Results Conference Call. At this time all participants are in a listen-only mode. Following the formal report AVEO management will open the lines 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 from today.

At this time, I would like to introduce Ms. Monique Allaire, Director of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Today we will be talking about key recent developments and reviewing our first quarter 2012 financial results. With me are Tuan Ha-Ngoc, our President and CEO, and David Johnston our Chief Financial Officer. Elan Ezickson, our Executive Vice President and Chief Operating Officer, will be joining us for the Q&A session. Unfortunately Bill Slichenmyer, our Chief Medical Officer, and Michael Bailey, our Chief Commercial Officer, are unable to participate in today's call as they are onsite in a global RCC executive council meeting taking place in Vienna today.

The press release we issued earlier detailing our quarterly results is available on our website at aveopharma.com. During this call we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements about AVEO's future expectations and plans, clinical development and regulatory timelines, the potential success of our product candidates and financial projections.

These statements involve risks and uncertainties which are described in the risk factor section of our most recent Form 10-Q filed with the SEC and available online at sec.gov. While these forward-looking statements represent our views as of today, they should not be relied upon as representing our views in the future. We may update these statements in the future, but are not taking on an obligation to do so.

With that, let me pass the call over to Tuan.

Thank you, Monique, and thank you all for joining us this morning. We will start today's call with a review of the preliminary data reported yesterday from our Phase III study of ficlatuzumab in lung cancer.

As Monique mentioned, Bill is currently in Vienna for our global RCC executive council so I provide an overview in his absence. I will then give you an update on tivozanib and AV-203. Dave will summarize our first quarter financial results and then I will wrap up with some final remarks before Q&A.

Yesterday we announced encouraging preliminary data from our Phase II exploratory study of ficlatuzumab in the first-line setting of patients with non small cell lung cancer. Ficlatuzumab is the most advanced of our [internallies] covered programs.

It is a humanized antibody that binds to the HGF ligand, the only known ligand in the c-Met receptor. It binds with high affinity and specificity to block the biological activities of the HGF c-Met pathway.

This study compared the combination of ficlatuzumab and gefitinib, an EGFR inhibitor to gefitinib monotherapy. The study was conducted in 188 previously untreated Asian subjects, a population that has a high rate of EGFR sensitizing mutations. The primary endpoint of this study was overall response rate with progression-free survival as secondary endpoint.

We provided detailed data in the press release we issued yesterday, but there are still highlights I want to point out. First of all as background there are no historical data available on patient outcomes based on both EGFR indication standards and c-Met expression levels when treated with an AGS and an inhibitor and an EGFR TKI in the first line setting.

Our study is the first time that these same patient populations have been evaluated in a clinic with this combination therapy. Preliminary results in the ITP team population show the positive trend on both ORR and PFS favoring the ficlatuzumab/gefitinib combination.

However, as with data with Phase II studies in non small cell lung cancer with other inhibitors of the Met pathway, the study results in ITP population did not reach statistical significance. In the patients whose tumors have both EGFR sensitizing mutations as well low expression levels of c-Met the combination of ficlatuzumab/gefitinib showed encouraging activity.

In addition, a signal of activity was observed in the patients whose tumors did not have EGFR sensitizing mutations, but had high expression levels of c-Met. Activity has been shown in high Met expressing tumors in a second-line setting with other agents that target a different part of EGFR pathway.

Our data show that we need to look with more granularity at the subsets of patients along both of those two dimensions, EGFR and c-Met, in order to identify the optimal clinical activity inhibiting this pathway. As such we are pleased to see that our exploratory analogies in patient subsets in lung cancer resulted in promising signals of activity.

Given the new news for the data it's too early to comment on the design of next steps in lung cancer, though we are continuing further analysis of the results and plan to work with our academic and clinical collaborators before that determination. In parallel we are preparing to initiate clinical development of ficlatuzumab in second tumor type, head and neck cancer, which should be starting in the second half of the year. We look forward to updating you with details in both indications as we move forward.

Transitioning now to tivozanib we are very pleased to announce that the detailed findings of TIVO-1 have been accepted for an oral presentation at this coming ASCO. This presentation will be made by the primary investigator on the study, Dr. Bob Motzer of the Memorial Sloan Kettering Cancer Center.

As a reminder, TIVO-1 is the first pivotal trial in first-line RCC comparing an investigational agent with an active approved drug. The presentation of the result of this successful study is a great opportunity for us to share the detailed data on tivozanib with our future customers, physicians and nurses, caregivers and advocacy groups, and most importantly patients.

We believe that the data from TIVO-1 support a potential for a new treatment option that delivers to the patients a unique combination of efficacy and affordability. We believe that this is what sets tivozanib apart.

[Setting] now conducted several global RCC executive councils, the most recent of which is going on right now in Vienna, raising an increasing amount of positive feedback from the physicians who treated patients with tivozanib. Many have told us that tivozanib is making it easier on their patients with its storability and its one steady dosing. We are on track to submit the NDA in the third quarter, bringing us closer to the potential launch of our first product, a major step forward for the RCC patients.

AV-203, our internally discovered antibody ErbB3 antibody, is about to enter the clinic. With that our pipeline shifts to having three clinical stage programs, the most advanced of which is nearing commercialization in RCC. This is a unique profile and a significant accomplishment for [arget] company that is turning ten years old this month.

Throughout our ten years we have grown and attracted the highest caliber talent. Over the last two months we have made several appointments described in the press release as we continue to build out our Company for the next stage. Let me now pass the call to Dave to review our financial results. Dave?

Thanks, Tuan, and good morning, everyone. Since we issued the press release this morning outlining our first quarter 2012 financial results I'll just review the highlights.

Total collaboration revenues for the first quarter were approximately $900,000, primarily reflecting revenues associated with our collaboration agreements with Astellas for the tivozanib program and with Centocor for the RON discovery program. Research and development expense for the first quarter of 2012 was $24.8 million.

G&A expense for the quarter was $9 million and our net loss for the quarter was $33.2 million or $0.77 per share based on 43.3 million weighted average shares outstanding. We entered 2012 with a strong balance sheet and maintained that position ending the first quarter with $244.8 million in cash and marketable securities.

Looking ahead to the rest of the year we reiterate our financial guidance that we expect to end 2012 with at least $120 million in cash and marketable securities, which reflects R&D spending net of cost sharing with Astellas of approximately $130 million this year. We anticipate that this capital is sufficient to fund our operations into the second half of 2013 based on our current operating plans.

We are excited about the progress that we'll make in that time and the catalysts coming up in 2012. Before we go to Q&A Tuan has some further remarks. Tuan?

Thanks, Dave. As we get closer to commercializing our first product we have decided to better demonstrate our commitment to the cancer community by rebranding in the Company at AVEO Oncology. This refinement of our brand further defines our focus and better reflects our unique expertise in cancer.

We began the rollout of our new branding this week with our employees and our 2011 annual report and will fully unveil the new branding externally as we head into ASCO. With that let's open the call for questions. Operator?

Thank you. (Operator Instructions). And your first question is from the line of John Sonnier from William Blair. You may proceed.

Thanks for taking the questions and congrats on a lot of progress there, so a few questions actually. First, we're expecting ex (inaudible) data in the front line RCC setting at ASCO. There are two questions around that. First, what range of PFS results do you believe would be viewed as clinically similar to tivozanib? And secondly, talk a little bit about the adverse events profile that we've seen historically with axtinib and how that compares to tivozanib.

Good morning, John. This is Elan. So based on at least what's been released on the ASCO website what we expect to see from axtinib at ASCO are some additional data cuts from their second line ASCO study and then data from a small Phase II dose to hypertension study. So I think -- I don't think we can speculate on what the PFS data will be from that study, but that at least to the best of our knowledge today based on the ASO website we are not expecting more substantial first line data at ASCO on axtinib.

In terms of the really the what's the difference between these two drugs I think that's worth spending a couple of minutes on. These are two very different drugs. As you alluded to most importantly on the safety and tolerability front we think that's likely due to the very different half lives of the drugs.

With TIVO we have a four and half day half life. It allows us to maintain continuous blockade of the veg up pathway with once a day dosing and importantly to avoid the c-Met spikes that you would get when you have a more frequent dosing with a drug with a very short half life. We think that's connected to the side effect profiles we're seeing.

And drilling down to that we've done extensive research with oncologists on what side effects most often result in dose reductions, interruptions or actual therapy switching, bearing in mind that patients can't stay on therapy at the appropriate dose they won't have an opportunity to realize the benefit of the drug. And pretty consistently the top three side effects that come back from that research are fatigue, diarrhea and hand/foot syndrome.

And we have seen now with axtinib across multiple trials and with tivozanib in two large studies that tivozanib really is a much better tolerated drug. And we think that is very significant.

Finally I'd just add that for the community oncologists where most of these first-line prescriptions are written having an extremely well tolerated once a day drug like TIVO which requires minimal dose adjustments as compared to a twice a day drug in which most patients are going to have to have their dose adjusted either up or down, TIVO we believe offers a really significant and appreciable benefit.

I appreciate that. It is unclear by the title of that small front-line study with axtinib whether or not we'll get PFS. I guess the question is if we do what do you think clinicians view as clinically meaningful in the way of differences, one month on either side viewed as the same?

Yes. So I think again our best understanding is that this is going to be the dose to hypertension and we have seen already and we expect that there will be a correlation that patients who are seeing their, are reaching a certain level of hypertension are going to see a higher PFS. So you're going to potentially see a higher number there just as we've seen and have previously presented with TIVO from our Phase II study and we'll have data on the Phase III as well.

Yes, I think at the end of the day there is a sense that when these drugs are not compared head-to-head that when you see a drug with a PFS within a month or so that that is roughly comparable, assuming and you have to dig in here to what was the setting, what were the patient demographics, et cetera.

I appreciate it. Just one quick one on ficlatuzumab I appreciate the overview that Tuan provided in the data earlier in the week, I was a little interested in the idea that the best outcome was this cohort that was EGFR sensitizing, but which had low c-Mets. I found that a bit counterintuitive, so I was hoping you might offer your interpretation and talk a little bit about how that informs patient selections for the head and neck trial. Thanks.

Good morning, John. This is Tuan. The -- as you know the studies with the other c-Met pathway inhibitors have been conducting second and third-line lung cancer, whereas in our case ficlatuzumab was evaluating a first-line. Furthermore, because the patients that they focused on those patients primarily have the EGFR wide type patients. So by virtue our own trial design intentionally in looking at a patient for which they are much more balanced between the EGFR status as well as or so the Met level we were able to see activity in the sensitizing mutation negative, otherwise called my type and c-Met high, and the strongest activity in patients with the EGFR sensitizing mutation positive and c-Met low.

So we believe that this patient population may be underserved by EGFR TKI and monotherapy despite having EGFR sensitizing mutation. And I think those are the data will be continuously for the analyze by us and we plan to discuss that with our academic collaborators as well as our patients.

Thank you.

Your next question is from the line of Jason Kantor from RBC Capital Markets. You may proceed.

It's (inaudible) on Jason's behalf, a couple on ficlatuzumab. Do you think you have enough data at this time for more advanced studies and NSCLC? And secondly in terms of the results that you are seeing today first the Met real expressers is there any learning to be had for other trials that you're planning with ficlatuzumab?

So on your first question we just received the data last week and we are obviously encouraged by what we are seeing, a unique subset of patient population and plan as I say consult with our academic and clinical collaborators in the design of the next study. So it is a bit too early to speculate on that particular design, but I look forward to updating you when it is determined.

With regards to the learnings I think that's part of the final analysis that we are planning to do and both us internal understanding of the interplay between EGFR and the HGF Met pathway. And we plan to discuss as I said with our academic and clinical collaborators.

Okay, if may ask a question. Tivozanib what remains to be done in terms of bidding the NDA and the chance of getting a priority review?

[Ad Non], I'm sorry. Can we just clarify? Was your first question are what are the gating factors to the NDA?

Well I just mentioned the NDA prep. Where are you? You said will file in third quarter.

Yes. So we are well along in terms of the preparation and quite confident that we are on track for filing in the third quarter.

And priority review?

Yes. Our expectation, our dateline expectation is that this will not be priority review. This will be standard review.

Okay. Thanks.

Your next question is from the line of Salveen Richter from Canaccord. You may proceed.

Hi. Thanks for taking my questions. Just with regards to tivozanib what submission educational activity do you have planned for ASCO?

So we do have lots of activities at ASCO. We have sponsored a satellite symposium that will be occurring at ASCO. Of course that's an independent activity, a CME event. And then we have a variety of advisory boards that we have been conducting for quite a long time at this point and we'll be continuing to conduct in order to better understand feedback on both the tivozanib data as well as competitive data as it comes out.

And then just in terms of the additional TIVO trials you have planned which will enable physicians to gain experience with the drug, can you maybe comment on what the designs of these studies are?

Yes. So, Salveen, we have not typically announced the designs in advance. What I can say is that there is and we're quite encouraged by the enthusiasm that we have seen from investigators and the desire to continue to explore the activity of tivozanib both in RCC as well as beyond.

And one of the things that is quite striking to us is that those physicians who have had an opportunity to actually have hands on experience with the drug and to treat patients come back to us quite uniformly and say that this is a fundamentally different experience for their patients. And I think when investigators have had an opportunity to participate in trials it really has had much greater impact on them in terms of understanding what these data that when they're on the slides they don't have quite the same impact as when it translates into a direct firsthand experience.

And so given the enthusiasm in the community we are very committed to continued development of tivozanib in RCC. There will be a number of additional studies coming up. And as I said as well beyond RCC with both the beyond on colorectal trial and the breast study that we'll be initiating later this year.

Great. That's helpful. Thank you.

Your next question is from the line of Howard Liang from Leerink Swann.

Great. Thanks very much. I would like to start with a couple of questions on ficlatuzumab data yesterday. First is on the overall response rate in the EGFR mutant population. I get 57 to 58%, which seems to be on the low side as compared to past trials. And I think it's in the 70% range. It's just a small sample size, or is there a reason? Is there an explanation for that?

I think that again as this study has a small number of patient population and so it's harder to interpret from trial to trial in terms of the (inaudible) response rate.

Okay. And then what I thought is really interesting stuff that was EGFR wild type as seen that high in patients where you, where the response rate is not zero with either single agent (inaudible) or the combination. What is the biological reason to explain that sort of that c-Met high within the sensitized response to EGFR inhibitor?

I think that's part of the continuing analysis that we are conducting internally as well. And by the way, Howard, when we show that I understand you're correct making your first question that the response rate on the ipath study is 43%, not 50 some percent as you mentioned.

I was referring to the EGFR mutant population.

Okay, okay.

Maybe lastly the 203, can you talk about how different or similar it is to the Merrimack compound and then one to one, and that the target is same as the (inaudible) for example?

So this is -- AV-203 is an antibody specific only to a single ErbB3, so that is different from the two what you call the for the (inaudible) of the combination to a target that one the Merrimack program has. In some of specific (inaudible) I don't have the data to answer your question.

Thanks very much.

Your next question is from the line of Marshall Urist from Morgan Stanley. You may proceed.

Hey guys. Good morning. Thanks for taking the question. So first just a technical question, in terms of the ASCO data are we going to be able to see that in the abstract, or is that going to be held for the full presentation at the meeting?

So the ASCO embargo will lift on the 16th and you'll -- what's within there's a limited data set there, but the full data set will be at ASCO in the oral presentation.

Okay, great. Thanks. And then second maybe just as we get closer to that data as you guys do market research what is the kind of realized rate of dose reductions and discontinuations to help just put some context around that data? We know what the clinical trial results are, but as you survey physicians and do prep for launch, kind of what's the real sort of comparator as we approach that data, and then just one other one on ficla.

Yes. So I think if you look at the market, the drugs that are in the market today it's very apparent that the clinical trial data because largely because of tolerability challenges patients are not staying on therapy for that full PFS duration that we've seen in the clinical trials.

There is a significant diminishment of a time on therapy in real practice and I think we may see some data coming out at ASCO around this topic that it's one thing to keep patients on therapy at academic centers in a clinical trial setting where there's very heavy monitoring and being able to achieve PFS, but when there are major issues with tolerability as I mentioned earlier, fatigue, diarrhea, hand/foot syndrome, these are really serious.

They really impact patients' lives. Patients aren't staying on and they're either not staying on full dose. And we know that when that doesn't happen that there are good data that at reduced dose, look at the [arenal] effect trial from last year, they're not achieving the same PFS benefit. And so we think again with TIVO we obviously don't have that real world experience yet until we're actually approved, but we think it is certainly very reasonable to extrapolate that with a very well tolerated drug like TIVO you can have a much better chance of actually keeping patients on therapy for the full period of PFS benefit.

Great. Thanks. And then just one last one on the ficlatuzumab data from yesterday, just out of curiosity as you guys look at the data I realize it's still early, but is there any issue or potential issue in terms of how in terms of the definition of c-Met high and low so that is there truly when you think about what the biology of these patients' tumors look like is there very much a clear kind of bimodal distribution between the two, or is it more like a continuum positivity to negativity like we've seen in some other tumors and maybe that could explain some of the trends that we saw? Thanks for all the questions.

Yes. That's part of the further analysis we are currently conducting.

Your next question is from the line of Thomas Wei from Jefferies. You may proceed.

Thanks for taking my questions, first just wanted to ask you a little bit more about the Pfizer dose to hypertension study that's going to be presented at ASCO. Can you remind us again when you did your own subgroup analysis of patients who got over a certain level of hypertension in your Phase II study, say I don't know if you defined it in the same way as Pfizer diastolic over 90, but what sort of PFS benefit did you see in that subgroup?

Yes. So from the Phase II the diastolic over 90 we were looking at in the overall population we were right around 18 months. And in the if you looked at the subset of patients who had the prior under refractory and clear cell we were north of 20 months using that same greater than 90.

The one caution there is that there is some variation from study to study as to exactly how frequently these blood pressure measurements are taken. And so it can sometimes be a little bit difficult to make apples to apples comparisons on the patients who have achieved hypertension. In the extended study they are taking patients who are able to dose increase. So that's also a difference.

With TIVO this is patients on the standard dose who achieve hypertension. With axtinib you're taking patients who are able to dose increase with the minority of the patients based on tolerability and then looking at whether they can achieve better outcomes with an increased dose.

And that same sort of analysis of hypertension, diastolic over 90 is that part of the planned subgroup analyses that we may see in the Phase III data presentation at ASCO of TIVO-1?

Yes.

And also can you just remind me relative to the actual dose of TIVO, what was the maximally tolerated dose and how much -- do you have the ability to do the same sort of dose to hypertension study if the Pfizer data looks very strong?

Yes. So in Phase I, Thomas, the 1.5 milligrams was the maximum tolerated dose. Of course there's always with an oral drug going to be some patient-to-patient variability. So there is, although we haven't made a decision to do so at this juncture, there is a potential opportunity to look at that individualized dosing and titrating dose based on individual outcomes.

As I mentioned earlier that doesn't come without a cost in terms of challenge to the practitioner, and frankly reimbursement challenges when you talk about increasing dose, having additional co-pays. It gets rather complicated and not clear how well that will be accepted in the community.

And what was the dose learning toxicity at 1.5?

Basically it was hypertension, fits the [sequelai] of hypertension.

I see. So the individualized dosing paradigm could be implied. It wasn't some other toxicity issue then --

Right.

-- that prevents you from doing that.

Right.

Okay. And then just lastly can you remind us when the next analysis is of the PFS and overall survival data in TIVO-1?

So the PFS are mature and OS data will not be presented at ASCO. Those are not mature and we don't have -- we can't pinpoint exactly when those will be mature, but certainly would expect by ASCO of next year that we would likely have the OS data.

Thanks.

(Operator Instructions). Your next question is from the line of Geoff Meacham from JPMorgan.

Hi. This is [Anu Pamerama] for Geoff Meacham. You have consistently mentioned hand/foot syndrome, fatigue and diarrhea as potential differentiators, any other AEs we should be looking out for as potential differentiators that you've heard from physicians? And the second question is on the colorectal trial I think that's already been enrolling patients, so just maybe an update on enrollment and when we might see data there.

Yes. So in terms of other toxicities it depends on which of the available agents you're looking at. Liver toxicity obviously has been an issue and we've see black box warnings from votrient as well as for Sutent, issues with hematological parameters with Sutent. Those are not necessarily things that are felt by the patient, but certainly things that can be of concern to physicians.

One of the other things that is emerging and we'll be presenting data over time on is when you look at kind of the clean pharm profile of tivozanib in terms of food effect, drug/drug interactions, et cetera it really looks to be the cleanest of any of these drugs. And we've received very positive feedback as we've presented all of these data to our advisors.

In terms of the colorectal data I don't have a specific update in terms of accrual other than it is continues to be underway. And I think we've indicated previously that we would expect to see data from that study in 2014.

Great. Thanks.

At this time there are no other questions in the queue. I would like to turn the call over to Mr. Tuan Ha-Ngoc for closing remarks.

Thank you, operator. In conclusion with pivotal tivozanib data at ASCO and NDA submission for tivozanib, a second trial with ficlatuzumab, a trial initiation for AV-203 and multiple other milestones on the horizon it is a very exciting time for AVEO Oncology. Thank you very much.

And, ladies and gentlemen, this concludes your presentation. You may now disconnect and have a great day.