Aveo Pharmaceuticals Inc (AVEO) 2021 Q1 法說會逐字稿

Good afternoon, and welcome to the Aveo Oncology First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions). As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Mr. Erick Lucera, Chief Financial Officer of Aveo. Sir, please go ahead.

Thank you, operator. Good afternoon, and thank you all for joining us on today's call to discuss Aveo's first quarter 2021 financial results and business update. I'm joined today by Michael Bailey, Chief Executive Officer; Mike Ferraresso, Chief Commercial Officer; and Dr. Michael Needle, Chief Medical Officer. Before we begin today's call, let me remind you that during this discussion, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to important risks and uncertainties, including those that are detailed in today's press release and in the Risk Factors section of our most recent quarterly report on Form 10-Q, which is on file with the SEC, that may cause actual results to differ materially from those expressed in such statements. Furthermore, we caution you that these forward-looking statements represent our views only as of today and we do not assume any obligation to update these statements, whether as a result of new information, future events or otherwise, except as required by law. With that, I'll now turn the call over to our President and Chief Executive Officer, Michael Bailey. Michael?

Thank you, Erick, and good afternoon, everyone. Thank you for joining us on today's call. We're excited to have the opportunity today to share with you our progress with the FOTIVDA launch as well as the business and financial results for the quarter. During this call, we plan to provide you with our early launch metrics through April 30, in an effort to provide you with a snapshot of our initial launch performance. Before we get into the details of the initial launch metrics, I would like to mention the recent release of abstract titles from ASCO.

At this year's meeting, we look forward to presenting updates from the TIVO-3 study that explore long-term patient follow-up and further highlight FOTIVDA's unique tolerability profile. In addition, we are excited to present the results from our randomized confirmatory Phase II trial for ficlatuzumab plus or minus ERBITUX in a population of head and neck patients who have progressed through all available therapies, including platinum, PD-1 and ERBITUX.

Now turning to the launch of FOTIVDA. The first quarter of 2021 has been a truly transformational time for Aveo marked by U.S. FDA approval of our first commercial product, FOTIVDA, our differentiated, once-daily VEGFR TKI. FOTIVDA is approved for the treatment of adults with relapsed or refractory advanced renal cell carcinoma, or RCC, following 2 or more prior systemic therapies. Notably, this approval was based on the Phase III TIVO-3 study, which is the first positive RCC Phase III study in this setting and the first RCC Phase III study to include a predefined subpopulation of patients who received prior immunotherapy, the standard of care in earlier-line treatment.

Prior to FOTIVDA's approval, the therapies used in these settings were typically chosen based on extrapolating clinical data from earlier treatment settings and from clinical data sets that did not include prior immunotherapy. In addition, a large percentage of patients opted out of later line therapy due to concerns with tolerability. With the U.S. FDA approval of FOTIVDA, the oncology community now has an evidence-based treatment option with a manageable safety profile to offer patients and help address this significant unmet need. The importance of FOTIVDA's new role in the treatment paradigm was underscored by its addition to the National Comprehensive Cancer Network's clinical practice guidelines or NCCN, in March as a recommended regimen for subsequent therapy.

With the FDA approval in hand, we were able to rapidly execute on a commercial launch, thanks to the hard work of our commercial and medical affairs teams leading up to the FDA's decision, coupled with the full deployment of our sales organization. While it is still early, we are pleased with the initial positive indicators. In an effort to provide you with a snapshot of our preliminary launch performance, I will now turn the call over to Mike Ferraresso, to provide an update on the commercial launch. Mike?

Thank you, Michael. As Michael mentioned, we are very encouraged by the progress we have seen thus far in the launch of FOTIVDA. We are pleased to share with you results from our first reported quarter as a commercial stage company, as well as some more recent launch insights that we've observed in the second quarter through the end of April. Recall that FOTIVDA was approved on March 10, 2021, with commercial availability formally commencing on March 22, 2021. For the 9 days until the end of the first quarter, net product revenue was $1.1 million which reflects inventory shipped to distributors and our 15% gross-to-net estimate. It's important to note that since the close of the first quarter, all of our distributors have reordered product, and in fact all of them have reordered more than once.

Through April 30, a total of 49 commercial prescriptions have been filled through our specialty pharmacy and specialty distributor partners and additionally, 75 FOTIVDA free 1-month patient experience starter kit samples have been requested and delivered, representing a potentially important leading indicator for future prescriptions. While we're in the early days of this launch, we believe we are off to a strong start. We continue to focus on educating the community and raising awareness of how FOTIVDA can help fill the unmet need in the treatment continuum.

Key to this effort is establishing FOTIVDA's differentiation, including its distinct characteristics as a potent, highly selective, long half-life VEGF receptor TKI, as well as sharing the unique data set established in TIVO-3. Our commercial outreach spans prescribers across all settings, from major academic centers to the community. While the COVID restrictions have slowed our ability to reach all of our customers as quickly as we would like, the reception to FOTIVDA has been very positive, the unmet need is real, and our reach expands deeper in the RCC market every day we're in the field.

As with any new launch, initial prescriptions take time to fill as we establish our reimbursement. We've had very few reimbursement rejections and continue to improve our coverage and thus reduce the time from physician prescription to patient use. Our Quick Start program has been effective at getting patients on active treatment quickly and avoiding any interruption of patient care while benefit verification is underway. I will now turn the call over to Michael Needle to discuss progress with the remainder of our clinical development programs. Michael?

Thank you, Mike. While we are keenly focused on executing on FOTIVDA's launch, we continue to make meaningful progress advancing the balance of our clinical pipeline. In addition to the current monotherapy approval, we are also focused on the evaluation of tivozanib in the immunotherapy combination setting. The introduction of immunotherapy, VEGF receptor TKI combinations marked a significant evolution in the treatment landscape of first-line RCC.

We believe that this benefit could extend to the relapsed/refractory setting with an effective, well-tolerated combination. In March, we were pleased to announce our clinical trial collaboration and supply agreement with Bristol-Myers Squibb to evaluate tivozanib in combination with nivolumab or Opdivo, Bristol-Myers Squibb's anti-PD-1 therapy in the planned Phase III TiNivo-2 trial for patients with advanced relapsed or refractory RCC following prior immunotherapy exposure. Recall that we previously assessed this combination in the Phase 1/2 TiNivo study, which demonstrated favorable tolerability and prolonged PFS in both treatment-naive and previously treated patients with advanced RCC.

We look forward to furthering our understanding of the activity and tolerability of this combination following prior immunotherapy. We recently received FDA feedback on the trial design, and we are working with the agency to finalize the study design. We are targeting to commence enrollment in TiNivo 2 in mid-2021. We also remain on track to complete enrollment later this year in the Phase 2 portion of the Phase 1b/2 DEDUCTIVE trial of tivozanib in combination with durvalumab or Imfinzi, AstraZeneca's PD-L1 therapy in patients with hepatocellular carcinoma or HCC.

At the ASCO GI Cancer Symposium in January, we shared data from the Phase 1b portion of the trial. No dose-limiting toxicities were observed with the combination, which demonstrated a 29% partial response rate and 71% disease control rate. These findings were compatible with the bevacizumab and atezolizumab combination, which is an emerging standard in the care of the same setting. With a 5-year survival rate of less than 5%, advanced or metastatic HCC represents an area of high unmet need. We believe tivozanib has the potential to serve as an attractive VEGF receptor TKI to be used in combination with immunotherapy in this disease.

Moving to ficlatuzumab, our HGF c-MET inhibitor, in January, we announced completion of enrollment in the randomized confirmatory Phase II study of ficlatuzumab as a single agent or in combination with cetuximab or ERBITUX, an EGFR-targeted antibody, in metastatic head and neck squamous cell carcinoma patients who have failed prior immunotherapy, chemotherapy and cetuximab. This study was designed to confirm findings from a Phase 1/2 study of ficlatuzumab and cetuximab, where the combination was well tolerated and resulted in a disease control rate of 67%, as well as prolonged PFS and OS compared to historical control. We will present results from the Phase 2 study at the upcoming ASCO meeting in June, with a Phase 3 go/no-go decision for ficlatuzumab in head and neck squamous cell cancer to follow.

As a reminder, in September 2020 we regained full global rights to ficlatuzumab and have initiated clinical manufacture to supply the potential Phase 3 clinical trial in head and neck squamous cell cancer and consider additional development beyond that. Progress also continues for our early-stage programs, AV-380 and AV-203. For AV-380, our GDF-15 inhibitory antibody that we are developing as a potential treatment for cancer cachexia, a Phase 1 study in healthy volunteers is now underway following the FDA's acceptance of our IND application earlier this year, and will guide us on our safety and dosing profile ahead of our advance into cancer patients.

Finally, for AV-203, our ErbB3 inhibitory antibody, in March we were pleased to share that we will regain full global rights to AV-203 following the voluntary termination of our collaboration and license agreement with CANbridge. We expect to provide an update on clinical development plan in the second half of this year. With that, I will hand the call over to Erick to discuss first quarter 2021 financial results. Erick?

Thanks, Mike. We ended the first quarter of 2021 with cash, cash equivalents and marketable securities of $121.4 million compared with $61.8 million at December 31, 2020. We also have an additional $10 million of available credit from Hercules, which gives us up to $130 million of total potential available capital. This figure includes the approximately $78 million we added to our balance sheet during the first quarter of 2021, consisting of a $20 million drawdown under our previously announced $45 million loan and security agreement with Hercules Capital, $3.1 million from warrant exercises as of March 31, 2021, $3.4 million in stock sales under our at-the-market sales agreement with SVB Leerink, and $51.6 million in net proceeds from a public offering of our common stock.

Net product revenue for the first partial quarter 2021, which consisted of a total of 9 calendar days, was $1.1 million. Research and development expense for the first quarter 2021 was $5.8 million compared with $7.8 million in the first quarter of 2020. Selling, general and administrative expenses for the first quarter of 2021 was $15.1 million compared with $3.7 million in the first quarter of 2020. The net loss for the first quarter of 2021 was $22 million or a net loss of $0.81 per basic and diluted share compared with a net loss of $8.4 million for the first quarter of 2020 or a net loss of $0.52 per basic and diluted share.

We continue to expect that our commercial spend will be approximately $40 million for the year. Gross margins should continue to be in the mid- to high 80% range. R&D should be around $40 million for our existing pipeline plans during 2021. In addition, quarterly G&A should approximate the level seen during the first quarter for the remainder of the year. We expect that our existing cash, cash equivalents and investments and available credit under the Hercules facility will be sufficient to fund our launch and current pipeline plans. A full overview of results for the first quarter 2021 are available in our quarterly Form 10-Q. I will now turn the call back over to Michael Bailey. Michael?

Thanks, Erick. Before we open the call for Q&A, I'd like to take a moment to thank the entire Aveo team for their hard work and unwavering dedication to our mission to improve the lives of patients with cancer. With the U.S. commercial launch of FOTIVDA now fully underway, we are thrilled to be able to bring this exciting new therapy to patients battling relapsed or refractory kidney cancer, who are in dire need of effective and well-tolerated treatment options.

Looking ahead, we look forward to continued progress with the commercial launch of FOTIVDA here in the U.S. as well as the continued advancement of the remainder of our pipeline programs. We believe we are well positioned for success and look forward to providing updates on our progress in the coming quarters. We will now open the line to Q&A. Operator?

(Operator Instructions) Our first question comes Stephen Willey of Stifel.

Congrats on the progress. Appreciate some of the early metrics here, and I know it's early days, but is there any color that you can provide or any commentary that you can speak to, just with respect to where you see initial traction? And I know that you talked in your opening comments about the lack of evidence-based treatment options in this third line plus setting. Are you seeing patients switched off of an older TKI that's been recycled into later line without that evidence? Or are most of the scripts that you're seeing written, are these patients who are new to third line?

Hey Steve, thanks for the question. This is Michael Bailey. I'm going to pass this over to Mike, he can give you a little color. We don't have quantitative analysis at this point of that detail, but I think the color might be helpful.

Great. Thanks for the question, Steve. So as you said, it is very early. So all we have at this point is really anecdotal information about the setting and prior treatments. But I will say we are hearing of patient starts in all of the relevant settings. So what I mean by that are we have seen patients immediately following frontline combination treatment. We've seen the more traditional third and fourth line use, and we've also seen some patient starts in more of a very late line, who may have opted for no further therapy were FOTIVDA not available, and were considering hospice, so across the gamut.

Okay. And then I know you had mentioned, I think, that maybe COVID's kind of impacting your ability to reach all of the accounts. But of the internal target of high priority accounts that you have, what proportion of those have you reached? And how do those split between academic and community prescribers?

Yes, Steve. So we're not reporting the specific reach numbers at this point. But what we are seeing is, as we expected, launching in COVID, the restrictions have slowed our ability a bit to reach our customers as quickly as we would like. We're a pre-COVID world, so nothing unique to us. But that said, the reception to FOTIVDA has been very positive, and every day we're out there, we get a little deeper into the target. So you can imagine initially, we're focused on the highest tier targets. And we'll continue to work our way through the list. And as we gain adoption, we can go deeper and deeper over time into the community setting, where they still have these patients but fewer on an account basis.

Okay. And then maybe just lastly on TiNivo 2. Is there anything that you can say just with respect to the regulatory feedback that you've received? And whether or not that's just the function of trial design or protocol-specific questions or issues that the agency might have?

Yes, Steve, it's Mike again. We're not going to comment specifically on the regulatory feedback, but I think, with our guidance we'd say we're responding to their questions and we still feel like we're on track for a midyear start.

Our next question comes from Colleen Kusy with Baird.

Congrats on all the exciting progress this quarter.

For the -- this sample program that you're doing, can you talk about logistically how that's gone with the rollout and how many doses each sample includes?

Yes, Mike, do you want to take that one?

Sure. Great. Thanks, Colleen, for the question. So our sample program or as we call it, the patient experience program. It's a full 1-month supply bottle that can be requested by physicians treating kidney cancer patients. We have, because of this virtual and in-person setting, we can get a signature live for a sample request. We can do it remote via a Zoom type of setting. And that simply goes back to us and it gets mailed to them within a day or 2, so they get their physical product.

And again, it's a full 1-month supply of drug. So the reception has been fantastic. People are very excited to have the opportunity to get their hands on the drug, have it in their sample closet, and the next time they have an appropriate patient, they get that patient experience opportunity for themselves. So as we mentioned, we've distributed through the end of April, about 75 of these patient experience start kits. So It's a full month supply, so it will take a little while to see the conversion rate of those into commercial prescriptions, but we think this could very well be a good leading indicator of interest.

Yes. Colleen, too, just as a reminder why this is an important program for us. The feedback we've gotten from physicians who have used the drug is they get a very good impression, certainly of the tolerability, when they get a chance to actually try the drug. So this is a program that will try to encourage that early trial. Hopefully, that will turn into long-term usage.

Great. That's very helpful. I know it's still early. I know you mentioned 15% gross to net. Any insights into how that's looking so far in 2Q versus what your expectations are?

Erick, you want to try that one?

Yes. It's very early. I don't think we have any updated estimate for Q2 at this point. I think the 15% for Q1 is all that we've calculated to this point.

Makes sense. And for the DEDUCTIVE trial in HCC, can you comment on enrollment in the Phase 2 and when we might see data from that study? And then also what the path could look like beyond that?

Yes, Dr. Mike, do you want to take that?

Sure. We actually don't provide updates on enrollment, though we still feel we are on track to complete enrollment by the end of the year. The options really, going forward, obviously, we are currently in the first line, and we could consider for the first-line work. Another possibility actually is to look at what to do in the second line following bev - atezo, for example. Obviously, there's no approved, there's nothing really been tested in that setting. And this is actually not unlike what we're doing with TiNivo 2. These are conversations that we are having and will continue to have with our partner, AZ, they're in this half - half with us. So it's open for further thought.

Yes. Just as a reminder, Colleen, the -- we did report the Phase 1 data at ASCO GI. We had a 29% response rate, 71% disease control, which is comparable to what bev - atezo saw in that setting. So we're encouraged by that, what we're seeing. And as Mike said, would -- if we could complete the enrollment as planned, I would expect to be getting data reported early 2022.

Awesome. That's really helpful. And on the ficlatuzumab, if I can fit in 1 more question. The ficlatuzumab update at ASCO, can you remind us what the powering was for that study?

Mike, did we report that?

No, that's not -- I'm going to make sure I'm not on mute. That's not really the design of the study. The way the study was designed was almost as if it was 2 -- was 2 Phase 2s wrapped up in one. One was ficlatuzumab, single agent. The other was the combination. And in both cases -- in combination with cetuximab, and the patient population was like the Phase 1, patients who had failed cetuximab, the actual criteria for calling a -- 1 of the 2 -- or either of the 2 arms positive was progression-free survival that excluded 2 months, where the lower confidence panel was less than 2 months.

So that's the actual powering, as such as it is. There is no real powering for comparison. Obviously, what we'll be able to report or at that [progress] should be fair. What Dr. Bauman will report at ASCO will be in addition to that, response rates and medians, the usual. But it wasn't really powered to compare the 2 arms.

Our next question comes from RK of H.C. Wainwright.

Good afternoon, Michael, Erick and Mike. Glad to see the 49 scripts come in the first full month of launch. Could you -- I don't know if you're able to give this, but what percentage of these scripts, are all these first-time scripts or are there any reorders within that? And also, each script has -- just like what you said on the, on the samples. What is the number of pills? Is it a month's script? Or is it more than a month of drugs in each script?

So Mike, do you want to take that, Mike Ferraresso?

Sure. Thanks for the question, RK. So as you can imagine this early on, we haven't yet had time for a patient to need a refill. This is still reporting on essentially our first 5 weeks of launch. And so it's all been new patient starts for our prescriptions. We do have a few physicians who have started more than 1 patient, but the majority it's starting their first patient. And the number of pills or the duration of a prescription is 28 days. So it's -- we're dosed 3 weeks on, 1 week off for a 28-day cycle. So each of these prescriptions is essentially a 1-month supply.

Okay. And then, of the 75 samples that are out there, in your own thinking, what percentage of conversion would you consider as a successful -- as successful at this point?

That's a trick question, Mike.

Great question, RK. Our understanding is we believe the physicians who have put through the effort to request a sample, intend to use it. I think the bigger question, I guess, for us and what we'll be watching is just the time and how long they have possession of it. If they're a busy practice, they may have a patient come in, or a patient in mind at that moment. If they're a lower-volume practice, they may have some patients who are now on an earlier treatment and they want to use it for their [nacs and] it's just going to be a matter of when that patient's current therapy is no longer working, and they want to make that switch.

So we think, again, they're only going through the effort to request these samples because they intend to use them. We just don't know exactly when the right patient is going to present for that particular physician.

Okay. And then on the third -- I mean, the third line for RCC, advanced RCC to date has been on the clinical studies [into Fotivda came through] . So what are you doing in terms of not only establishing a market for a therapy, but also trying to see if you can expand that market for the third line?

Mike, do you want to comment on that?

Sure. RK, yes, again we feel we're in a very solid position, having the first approval specifically in this setting. And when we look at the market today, the third and fourth line is about a $300 million market. Prior to our approval, we see from the Decision Resources data that only about half of patients in third and fourth line that could be treated are going on to active treatment. And those who are treated are treated for an average duration of only about 4 months. So we think there's a lot that FOTIVDA can do here, and we're very excited by the early traction we've seen in the market, and we're getting great reception to our story. Our customers are certainly confirming the unmet need as we understood it in this setting. And again, the team's doing a fantastic job, and we look forward to continued progress.

Okay. So -- and last question from me on TiNivo-2. The study is also looking at advanced relapsed/refractory patients. But how different is this patient population in TiNivo-2 compared to what you are looking at in TIVO-3?

Yes. Good question, RK. Simply stated, basically, these patients are going to be second or third line, versus TIVO-3 was third or fourth line. You also would have to have immunotherapy immediately prior. So where that was a subpopulation of TIVO-3, it is the entire population here. So we'd expect to see lots of IO/IO combinations or PD-1 TKI combinations as the immediate prior therapy to this study. And we think that keeping the IO pressure on makes a lot of sense. And with the tolerability of TIVO, we think the combination could prove to be a nice advance for patients.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Michael Bailey for any closing remarks.

Thank you all for joining us today, and thank you for your continued support. We're excited about the next coming quarters. So stay tuned.

Thank you all for joining today, and thank you for your continued support. You may all disconnect.