Clovis Oncology Inc (CLVS) 2012 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Quarter One 2012 Clovis Oncology Earnings Conference Call. My name is Emily and I will be your operator for today.

At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions). As a reminder, this call is being recorded for replay purposes.

And now, I'd like to turn over the call to Breanna Burkart, Senior Director, Investor Relations. Please proceed.

Good morning. Welcome to the Clovis Oncology First Quarter 2012 Financial Results Conference Call. You should have received the news release announcing our first quarter financial results. This now is available on our website at www.clovisoncology.com. As a reminder, this conference call is being recorded and webcast. Remarks may be accessed live on our website during the call and will be available in our archives for the next several weeks.

The agenda for today's call is as follows -- Patrick Mahaffy, Clovis' President and CEO, will discuss the highlights of the first quarter and provide an update on our strategic objectives for the remainder of the year; then Erle Mast, Clovis' Chief Financial Officer, will cover the financial results for the quarter in more detail and comment on the Company's outlook for the remainder of 2012. Patrick will make a few closing remarks and then we will open the call for Q&A.

Begin we begin, please note that during today's conference call we may make forward-looking statements within the meaning of the federal securities laws including statements concerning our financial outlook and expected business plans. All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business. Forward-looking statements speak only as of the date on which they are made and Clovis undertakes no obligation to update or revise any forward-looking statement.

Now, I will turn over the call to Patrick Mahaffy.

Thanks, Breanna. Welcome, everybody, and thank you for joining us this morning. Our first quarter was an extremely productive one -- progress made in each of our clinical development programs and at the beginning of April the completion of a public offering of our common stock, which allowed us to raise $70 million in net proceeds.

This morning, I'd like to take the opportunity to highlight each of our development programs in the context of first quarter accomplishments and importantly, anticipated milestones for the remainder of the year.

I'll begin with CO-101, our lipid drug conjugate of gemcitabine, which is currently the subject of the pivotal LEAP study in metastatic pancreatic cancer patients, from which we expect overall survival results by the end of this year.

During the first quarter, we completed an enrollment in the LEAP study, which enrolled 360 patients at 99 centers in 15 countries in just 19 months. I'm very proud of our team for achieving this very significant accomplishment. Also, we received the final hENT1 status for all patients enrolled in the LEAP study.

The Independent Data Monitoring Committee informed us that 64% of the 360 patients enrolled in the study are classified at hENT1-low. As a reminder, the hENT1-low patients are our target population and the subject of the primary overall survival analysis in LEAP.

This confirms the results we reported in January from the initial 250 patients enrolled in the study and as also consistent with retrospective analyses that were performed from other pancreatic cancer studies, both by us and by a number of academic institutes. It is absolutely clear now that approximately two-thirds of patients with pancreatic cancer can be classified as hENT1-low.

As I mentioned last quarter, we believe CO-101 may also have application in other tumor types where gemcitabine is commonly used. And we intend to expand our clinical development program into these other tumor types with a particular and initial focus on lung cancer. To this end, we plan to commence a Phase I study of CO-101 in combination with cisplatin in non-small cell lung cancer patients during the third quarter of 2012.

You should note that while gemcitabine is used both as monotherapy and in combination with other agents in pancreatic cancer, it is used primarily in combination with cisplatin in the treatment of other tumor types.

If the LEAP results are positive and with these Phase I data, we would then be in a position to pursue clinical development programs in non-small cell lung cancer and potentially other tumor types where gemcitabine is used as well.

Turning now to CO-1686. CO-1686 is our oral, small molecule covalent inhibitor of the mutant forms of epidermal growth factor receptor, or EGFR, with the treatment of non-small cell lung cancer. 1686 targets both the initial activating EGFR mutations as well as the primary resistance mutation, T790M, and it has the potential to treat non-small lung cancer patients with EGFR mutations, either as a first-line or second-line treatment.

In addition, because it spares wild-type, or normal EGFR, we believe CO-1686 has the potential to cause a lower incidence of toxicities, such as skin rash and diarrhea, normally associated with currently used EGFR inhibitors.

In January 2012, our IND was accepted by the FDA; and subsequently, in the first quarter we initiated the dose escalation portion of the US and European Phase I/II study and expect the parallel Phase I/II study in Asia to initiate during the third quarter. Following the establishment of the appropriate dose, we intend to study CO-1686 in expansion cohorts of between 25 and 60 non-small cell lung cancer patients who failed either Tarceva or Iressa and have developed the T790M secondary mutation.

We also, at the urging of the clinicians involved in our program, intend to simultaneously study 1686 in an expansion cohort of newly diagnosed patients who expressed the activating mutations of EGFR. If successful, this would position us to move rapidly into the front-line setting as well.

We expect to have proof-of-concept data in the T790M population from these studies by the end of 2013; and if results are positive, our goal is to advance 1686 development from IND to NDA submission in approximately four years.

Last but not least, to our third product, rucaparib, which is our orally available, small molecule inhibitor of PARP-1 and PARP-2 that we are developing as both a monotherapy and in combination with chemotherapeutic agents in patients who are predisposed to PARP inhibitor sensitivity.

We have an ongoing Phase I/II study to determine the maximum tolerated dose and the recommended monotherapy dose for subsequent clinical development. Once the optimal dose and schedule has been established, we intend to expand the study to assess preliminary efficacy of rucaparib in patients with breast and ovarian cancers associated with germ-line mutations in the BRCA genes.

We expect initial efficacy data from this trial in 2013; and if these data are positive, plan to initiate registration studies in serous ovarian and potentially breast cancer as well. As with CO-101 and 1686, we intend to partner with a diagnostic development company to develop a molecular diagnostic test to identify patients most likely to respond to a PARP inhibitor.

Now I'll turn the call over to Erle to discuss first quarter 2012 financial results and guidance for the remainder of the year.

Thanks, Pat, and good morning, everyone. Our full financial results for the first quarter are included in this morning's press release, so I'll direct my comments to highlights for the quarter and provide some additional analysis and commentary.

We reported a loss of $19 million, or $0.86 per share, for the first quarter of 2012. Those amounts include a $4 million milestone payment made to Avila Therapeutics during the quarter associated with the FDA's acceptance of our IND for CO-1686.

Research and development expenses totaled $12.6 million for the first quarter, representing a $5.6 million increase over R&D expenses for the first quarter of 2011. This increase primarily is a result of expanded development activities for CO-101 as well as the in-licensing of rucaparib, which we completed in mid 2011.

General and administrative expenses totaled $2.4 million for the first quarter, and G&A expenses increased by about $1 million from the first quarter of 2011 as we expanded our administrative functions to support our expanded development activities for our three programs as well as becoming a publicly traded Company.

Operating expenses for the first quarter of 2012 include approximately $900,000 of stock compensation expense, and that is split between R&D expense as well as G&A costs.

As of March 31, 2012, we had cash and investments totaling $121 million, we had no outstanding debt, and we had 22.4 million shares of common stock outstanding. And again, I think as most of you know, those numbers do not include net proceeds of $70.5 million from our public offering of 3.75 million shares of common stock that we completed in April this year.

Now let me address our financial guidance for the remainder of the year. As we previously stated, we expect cash burn this year of $67 million to $72 million and expect to end the year with approximately $140 million in cash.

With that, I'll turn the call back to Pat for some closing remarks and then we'll open it up for Q&A.

Thanks, Erle. In summary, we had a great first quarter as we advanced our programs. Let me speak briefly about the milestones for the rest of 2012.

First, CO-101, we plan to initiate, as I described, the Phase I study of CO-101 in combination with cisplatin in non-small cell lung cancer during the third quarter of 2012. Most importantly, and obviously, during the fourth quarter we anticipate announcing top-line overall survival data from the LEAP study. If the LEAP data are positive, we expect both NDA and MAA submissions in the US and EU, respectively, in the middle of 2013. Our collaborator with the diagnostic side, Ventana, plans to submit the PMA in parallel with our NDA submission.

For 1686, we plan to initiate a parallel Phase I/II study in Asia during the third quarter. And for rucaparib, we intend to complete the ongoing Phase I monotherapy study in the fourth quarter and initiative the expansion phase of the study.

In summary, we have a strong foundation in place. We look forward to completing 2012 milestones that we hope will be transformative for our Company. And with that, we'd like to thank you for joining us today and we'll be happy to answer any questions you might have.

Thank you. (Operator Instructions). Okay, your first question comes from the line of Cory Kasimov, JPMorgan. Please go ahead.

Hi. This is actually Karen Jay in for Cory Kasimov. Thanks for taking our questions. I have a few that are on CO-101. My first is could you -- you had mentioned that Ventana will be submitting a PMA for the diagnostic, but can you give us a status update on where they are with validation, what remains to be done before filing?

Sure. The analytical validation is complete. The real thing they need is data from the clinical study that would be included in at least one of the modules that are submitted to FDA. There is one step that they have to complete as well, which is having a read made by multiple readers to demonstrate concordance.

We've seen concordance at 90% or above when pathologists are trained to read for hENT, so I don't believe either Ventana or we are concerned about that. In fact, I don't think we see any rate-limiting steps now at Ventana in filing the PMA on schedule and in coordination with our NDA submission.

Okay, great. And secondly, has an independent committee assessed the patients in the LEAP trial for safety at all?

We do have an Independent Data Monitoring Committee that are tasked with reviewing the safety primarily of the patients in LEAP. They have met -- I should know this for sure -- probably about four times over the course of the study and, in fact, it's the IDMC that has provided us with the data on the percentage of patients who are hENT-high and hENT-low. And, as you know, it's approximately this two-thirds number, the 64%, that we heard from the meeting that was held a week or so ago.

So they have met. They've recommended in every case that we continue with the study and we don't have any reason to see or believe that they had any concerns on the safety side. The safety profile of CO-101 is very similar to or consistent with that of gemcitabine, as one would expect.

Okay. And my last question is when you hit the number of survival events in the trial and unblind it, will you have a good sense of median duration of therapy at that point, or are you expecting it to increase meaningfully if you follow the patients that continued on drug?

We would have a pretty complete data set. So at the time that we release survival numbers, we would be able, I think, to describe the median number of months on therapy or median number of cycles for the patients. It could moderate slightly as the [tail] patients continued to receive therapy, but by the time we report those data, we'd have data for the majority of patients treated in the trial.

All right. Okay, great. Thank you.

Thank you for your question. Your next question comes from the line of Ravi Mehrotra, Credit Suisse. Please go ahead.

Hi. Thanks for taking my question. This is actually (inaudible) asking questions on behalf of Ravi. I just wanted to know if you had any thoughts regarding the hENT1 status in the non-small cell lung cancer population?

We do not. There are a couple of publications that have suggested it's kind of an academic 50/50 split, but that's a somewhat artificial construct. As we've described in the past, we had accessed tissue samples from a comparative study of gem/cis combination versus a navelbine/taxane combination. We will apply first our algorithm to those -- the current algorithm that we use for pancreatic cancer -- to those samples. Once they're [stained] and read, we will then apply different algorithms to see if there's one that is more appropriate for the lung cancer population.

And I would hope that by, say, the third quarter call we would be in a position to describe what the split is from that study, which I think would be very predictive of what we would see in any study we might do subsequently in a prospective manner.

Thank you very much.

You bet.

Thank you for your question. (Operator Instructions). At this point, I'd now like to turn the call back to Breanna.

We thank each of you for your interest in Clovis Oncology today. If you have any follow-up questions, please call me at 303-625-5023. This call can be accessed via a replay of our webcast at clovisoncology.com beginning in about one hour and will be available for 30 days. Again, we appreciate your interest and time. Thank you and have a good day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.