Clovis Oncology Inc (CLVS) 2018 Q3 法說會逐字稿

Good afternoon. My name is Amoi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Clovis Oncology Q3 2018 Financial Results Call. (Operator Instructions) Thank you. Breanna Burkart, Vice President, Investor Relations, you may begin your conference.

Thank you. Good afternoon, and welcome. You should have received the news release announcing our financial results. If not, it 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 in our website during the call and will be available in our archive for the next several weeks.

The agenda for today's call is as follows: Patrick Mahaffy, Clovis' President and CEO, will discuss the key components of our corporate update provided in today's news release; then Dan Muehl, Senior Vice President of Finance and Principal Financial and Accounting Officer, will cover the financial results for the third quarter in greater detail. Patrick will make a few closing remarks, and we will open then the call for Q&A.

Before 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 statements.

Now I'd like to turn the call over to Patrick Mahaffy.

Thanks, Breanna. Welcome, everybody. I'll begin with an update on the U.S. launch of Rubraca in the recurrent ovarian cancer maintenance treatment setting in the all-comers population following its Q2 2018 FDA approval.

For the third quarter of 2018, we reported $22.8 million in Rubraca sales. This does not include the $9.6 million in commercial value provided to eligible patients, primarily Medicare patients, as free drug supply through our patient assistance program.

The supply of this free drug represents approximately 30% of overall commercial supply, up from the approximately 25% reported for the second quarter of 2018.

Absent renewed funding in the foundations that had historically provided co-pay assistance to these patients, this will likely continue at this level.

While we remained confident in Rubraca's potential in the second-line maintenance indication, we recognize that PARP inhibitor penetration to the setting appears to remain relatively flat at approximately 35% to 40%. In addition to growing this market, we also need to grow our share of the overall PARP market, which we estimate at approximately 20% today.

We view 3 primary challenges to our growth in the ovarian cancer space: the patient assistance program for free drugs, the continued use of watch and wait by U.S. clinicians treating ovarian cancer, and a perceived lack of differentiation amongst the marketed PARP inhibitors.

With regards to our patient assistance program, its focus is to help eligible patients who do not have insurance, who are underinsured or whose health plan won't pay for Rubraca. The vast majority of the patients enrolled in our path are Medicare patients unable to pay their coverage debt and coinsurance.

We have evaluated our PATH eligibility criteria and recently began requiring greater documentation of need and a higher economic threshold to qualify. However, these requirements are consistent with those of other oncology drug companies, and we anticipate that the proportion of Rubraca patients eligible for free drug will persists at current rates for the foreseeable future.

While there is little we can do related to the supply of free drug to our patient assistance program, we are committed to doing a much better job in addressing market growth and market share growth.

The watch and wait approach continues to be the most likely followed practice after second line platinum therapy, despite numerous published data sets demonstrating that PARP inhibitors offer better outcomes than placebo, which is the equivalent of watch and wait, in the platinum sensitive second-line maintenance setting.

To address this, in October, we launched our maint-enhanced messaging and direct promotional materials to all of our ovarian cancer treaters in the U.S. They emphasize the fact that all eligible second line patients should receive PARP maintenance therapy in general and Rubraca in particular.

This program also highlights data from a prespecified exploratory analysis from the ARIEL3 study, demonstrating that not only can Rubraca maintain PFS, it may in some patients also further their response coming off platinum therapy, including converting some partial responses to complete responses.

This message has resonated with physicians who see the opportunity for additional tumor shrinkage while in the maintenance setting as a meaningful benefit for their patients.

We're also expanding our regional account team to educate key accounts about the significant gap in patient care and establishing the importance of second-line maintenance therapy.

And we also recently expanded our nurse education group, which counsels nurses and mid-level practitioners on the importance of second-line maintenance and the management of patients on Rubraca.

We believe this 2-part efficacy message, maintaining progression-free survival and the potential for further tumor shrinkage, will have a positive impact on our market share and on the market in general.

We also recognize the importance of highlighting differentiation amongst the PARP inhibitors. To this end, as I said earlier, the launch of the maintenance program is designed to establish the importance of second-line maintenance therapy and to distinguish our unique objective response rate data beyond the evident improvement in progression-free survival versus placebo.

To support this, we are currently launching significant patient and branded resources into the marketplace across all of our customer channels. These are being executed both to our sales teams and digitally to support the ongoing launch of Rubraca.

We announced yesterday the departure of our Chief Commercial Officer. We believe this change represents an opportunity for Clovis to bring in new commercial oncology expertise for this role, and we have initiated an active search. We think a fresh perspective in this position will be invigorating.

I'd also like to highlight the addition of 2 new board members, Bob Azelby and Rick Fair. We're very pleased to have them join our team in their deep experience with oncology launches and commercialization will serve us well in the coming months and quarters. I have already benefited from their active engagement.

I'll turn now to discussing our regulatory progress in Europe. In early July, our variation to the European marketing authorization for Rubraca, to improve the second line relator maintenance treatment indication, was validated by the EMA and is under active review.

This variation, if approved, would expand our addressable population to improve the broader all-comers population based on data from ARIEL3. We anticipate a CHMP opinion for the maintenance indication by year-end 2018, with a potential formal European Commission approval in early 2019.

Accordingly, we are actively preparing for an early 2019 planned launch, initially focused on Germany. The majority of additional hires, including the sales reps, will coincide with reimbursement approval in the individual countries and will occur in late 2019 and early 2020 as will any meaningful revenues from those territories.

Of course, our regulatory clinical safety, quality and supply chain teams are already in place in our Cambridge U.K. office.

We maintain an early access program in a limited number of European countries for rucaparib for treatment and as maintenance therapy in recurrent ovarian cancer to allow access to rucaparib for patients in need until the time the drug is commercially available.

Let me turn now to clinical development. I'll begin with the recently presented data from our TRITON2 study at ESMO in Munich earlier this month, and at the Prostate Cancer Foundation Scientific Retreat last weekend.

We were pleased to present the initial data from the study, which was the same data set upon which Breakthrough Therapy designation was granted us in early October.

In a poster discussion session of the conference, the 44% confirmed objective response rate was reported in 25 RECIST-evaluable patients with Rubraca alteration, and a median duration of response has not yet been reached.

A 51% confirmed PSA response was observed in 45 PSA-evaluable patients with Rubraca alteration. It is important to note that while responses have been shown for other PARP inhibitors, based on surrogate or composite endpoints, this represents the largest reported population of advanced mutant-BRCA prostate cancer patients using the endpoint of RECIST response.

The preliminary safety data for Rubraca in men with metastatic castration-resistant prostate cancer are consistent with those observed in patients with ovarian cancer and in other solid tumors.

Also at the conference, in a separate poster discussion session, TRITON screening data were presented, which provide initial genomic profiling data from the TRITON clinical program. Plasma samples identified alterations in BRCA1 or BRCA2 in approximately 12% of CRPC patients screened for the TRITON2 study.

Data demonstrates the plasma cell-free circulating tumor DNA samples are highly consistent with tumor tissue in identifying BRCA1 or BRCA2 mutations, and clearly offers a less-invasive screening option from tumor tissue testing.

Based on FDA input, at the time we initiated the TRITON program, we believe that RECIST response data from TRITON2 could be used as the basis of a supplemental NDA to support an accelerated approval for Rubraca and mutant-BRCA metastatic castrate-resistant prostate cancer. The PSA response could be used as supportive data.

Pending data, we currently expect to submit this supplemental NDA before the end of 2019 and are taking active steps to seek to accelerate this timeline.

Our second Clovis-sponsored prostate study is TRITON3, a randomized comparative Phase III study that includes patients who have a tumor germline or somatic-BRCA or ATM mutation who have progressed on AR-targeted therapy and not yet received chemotherapy in the metastatic castration-resistant setting.

The study will compare Rubraca to physician's choice of AR-targeted therapy or chemotherapy. Planned primary endpoint is radiologic progression-free survival, and this study could potentially serve as confirmatory study should the TRITON2 study result in an accelerated approval.

We're also enthusiastic about our collaboration with Bristol-Myers Squibb in prostate cancer. As part of that collaboration, a Phase II prostate cancer study initiated in late 2017 and is sponsored and conducted by BMS.

The study will evaluate the safety and efficacy of Opdivo in combination with Rubraca in patients with metastatic castrate-resistant prostate cancer and is being conducted as an arm of a larger BMS-sponsored study in a total of 300 patients.

Importantly, this prostate study is enrolling BRCA, HRD and biomarker negative patients and will generate preliminary data on the relative benefits of the combination in these distinct patient populations.

Let me turn now to another potential new indication beyond prostate cancer. Our ATLAS study is a single-arm Phase II open label study of Rubraca as monotherapy in recurrent metastatic bladder cancer. This is an all-comers population with no selection based on HRD status.

Eligible patients are those who have failed 1 or 2 prior therapies. The study is currently enrolling patients and is designed to potentially support an accelerated approval.

Given that bladder cancer is particularly responsive to platinum-based therapy and that approximately 2/3 of patients have tumors that are in HRD, we are hopeful about the potential for Rubraca in this indication.

This trial is enrolling quickly, and we anticipate completing enrollment in this study by Q3 2019 and potentially presenting an initial look at data as early as the fall 2019 medical meeting.

Of course, we remain very active in seeking to expand our footprint in ovarian cancer. The most important of these studies is the ATHENA study, which is part of our clinical collaboration with Bristol-Myers Squibb. This Clovis-sponsored study is a Phase III trial in advanced ovarian cancer in the frontline maintenance treatment setting and is currently enrolling patients.

ATHENA will evaluate Rubraca plus Opdivo, Rubraca, Opdivo and placebo in newly diagnosed patients with stage III/IV high-grade ovarian fallopian tube or primary peritoneal cancer who have completed platinum-based chemotherapy. The study in approximately 1,000 patients includes an all-comers population, with a setdown statistical plan similar to ARIEL3.

ATHENA is conducted in association with the GOG in the U.S. and ENGOT in Europe, which are the 2 largest cooperative groups dedicated to treatment of gynecologic cancers in the U.S. and Europe, which we believe will facilitate more rapid enrollment in the trial.

As an example, GOG recently enrolled 1,100 patients in our front line ovarian cancer study in just 22 months.

Additionally, the Clovis-sponsored ARIEL4, our confirmatory study versus chemotherapy in the mutant-BRCA ovarian cancer treatment setting, continues to enroll.

And ARIES, our planned Clovis-sponsored Phase II open label multi-cohort study, is evaluating the combination of Rubraca and Opdivo in patients with relapsed BRCA wild-type ovarian cancer as well as in patients with locally advanced or metastatic bladder cancer and is expected to begin in early 2019.

We are well aware of the desire to see robust combination results for PARP inhibitors and IO agents broadly and for Rubraca and Opdivo specifically. We are, therefore, pleased to get this study going and we will look for an opportunity to provide initial data from this study toward the end of next year.

The Phase I/II combination study of Immunomedics, sacituzumab govitecan and Rubraca for the treatment of advanced metastatic triple negative breast cancer, relapsed platinum resistant ovarian cancer and metastatic urothelial cancers is sponsored by Clovis and is expected to begin enrolling patients in the first half of 2019.

And finally, a Phase Ib study in collaboration with Genentech to evaluate a novel combination therapy of their cancer immunotherapy TECENTRIQ and Rubraca continues to enroll patients.

The Phase I portion of this study, sponsored by Genentech Roche, is complete and the recommended Phase II dose is full dose atezolizumab and full dose Rubraca. And the trial is now enrolling patient cohorts in triple negative breast and ovarian cancers.

To wrap up our clinical development update for Rubraca, there are over 30 investigator-sponsored monotherapy or combination therapy studies in a variety of tumor types approved or underway.

Now I'll spend a few minutes describing lucitanib. Lucitanib is an oral potent inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors 1 through 3, platelet-derived growth factor receptors alpha and beta, and fibroblast growth factor receptors 1 through 3. Lucitanib was the subject of a partnership with Servier established in 2013, where Servier had gained rights to lucitanib worldwide, except for the U.S. and Japan, where we hold rights.

In partnership with Servier, we evaluated lucitanib in breast and lung cancers based on a hypothesis of activity in FGF receptor driven tumors. Data from these studies were insufficient to move the program forward, and that development was discontinued in early 2016.

Until recently, we have said little about lucitanib, other than to note that we expected that Servier would return rights to us. We have received those rights back, and we now hold global rights, excluding China, for lucitanib.

Recently, there have been very encouraging data in studies of a very similar drug to lucitanib that inhibits the same 3 VEGF, PDGF and FGF receptor pathways for LENVIMA or lenvatinib in combination with a PD-1 inhibitor, in this case, Keytruda.

These data represent a validated, compelling and alternative hypothesis for the development of lucitanib in combination with a PD-1 or a PD-L 1, and a Clovis-sponsored combination study is now being planned.

We've also discussed our intention to initiate a study of lucitanib in combination with rucaparib based on encouraging data of VEGF inhibitors and PARP inhibitors in combination. Each of these studies is expected to initiate no later than Q1 2019.

For preclinical overview of lucitanib, please visit the Events and Presentations page in our website.

I have noted in the past that we needed to manufacture a lower dosage strength tablet of lucitanib for use in these combination studies. We have successfully done so and are on track to have drug supply delivered to these combination studies before the end of the year.

The composition of matter patent for lucitanib does not expire until 2030 in the U.S., and we expect an additional 3 or even 4 years of Hatch-Waxman extensions in the U.S. depending on the data, but first potential U.S. approval. Patent protection in the EU with extensions will be similar.

With that, I'll turn the call over to Dan to discuss third quarter financial results.

Thanks, Patrick, and good afternoon, everyone. Our third quarter 2018 financial results are included in this afternoon's press release. I'll review the highlights of our financial results and provide some additional commentary.

Product revenue is $22.8 million for Q3 2018 compared to Q2 2018 revenues of $23.8 million. This compares to $16.8 million in Q3 2017 revenue or a 36% quarterly increase year-over-year.

Our inventory at distributors has ranged from 2.5 weeks to 4 weeks since our initial launch in late 2016. Inventory at the end of Q3 was on the low end of this range at approximately 3 weeks and represented a negative impact of $2.4 million to revenue in Q3 2018.

The supply of free drug provided through our patient assistance programs totaled $9.6 million in commercial value during the quarter and $23 million for the first 9 months of 2018. This represents approximately 30% of overall commercial supply for the quarter.

Turning now to our balance sheet. We ended the third quarter of 2018 with $604.4 million in cash, cash equivalents and available-for-sale securities. Cash used in operating activities was $72.5 million for Q3 2018 compared with $45.8 million for Q3 2017.

The $72.5 million in cash used in Q3 2018 is a sequential reduction from the cash used in Q2 2018 of $110.2 million, primarily due to fewer payments for drug supply than last quarter.

We reported a net loss of $89.9 million or $1.71 per share for Q3 2018 compared to $60.7 million or $1.24 per share for Q3 2017.

Our Q3 2018 R&D expenses totaled $63.9 million compared to $38.9 million in Q3 2017. R&D expenses will continue to increase year-over-year as our planned clinical studies and development activities progress.

Selling, general and administrative expenses totaled $42.5 million for Q3 2018 compared to $35 million in Q3 2017. SG&A expenses will also continue to increase year-over-year in support of our commercial activities related to Rubraca in the United States and Europe.

Now I'll provide some further color on Rubraca from a finance perspective. Revenue has recorded net of estimated rebates, charge backs, discounts and other deductions as well as estimated product returns. These gross to net adjustments totaled approximately 11% of gross revenue for Q3 2018.

Gross to net adjustments are expected to be in the low double digits, as a percentage of gross revenue for the remainder of 2018, assuming the distribution and payer mix remain consistent.

Cost of product sales for the third quarter of 2018 was $4.8 million or 21% of product revenue. We expect the cost of sales percentage to increase slightly for the remainder of 2018.

Based on current trends, we currently anticipate Q4 2018 revenues to be consistent with or slightly higher than Q3 2018 reported revenues. We anticipate providing full year 2019 guidance in early January 2019.

I'll turn the call over to Pat.

Thanks, Dan. To close, we're pleased with our development progress, with a variety of meaningful activities underway.

Our prostate cancer development program continues to enroll patients into both the TRITON2 and TRITON3. And based on a very encouraging data presented at ESMO and at the PCF for BRCA-mutant patients with advanced metastatic castration-resistant prostate cancer from TRITON2, we continue to anticipate a potential supplemental NDA filing pending data by the end of 2019.

With Breakthrough Therapy designation for this patient population based on the ESMO data set, we look forward to identifying the most rapid path through supplemental NDA submission and will provide an update in the event our anticipated timing should accelerate.

Our ATLAS bladder cancer study is enrolling patients quickly, and we anticipate completion of enrollment by Q3 2019, with a first look at initial data potentially in late 2019. We hope to demonstrate Rubraca's activity in that all-comers patient population.

Our combination studies of Rubraca and Opdivo, either through our clinical collaboration with Bristol-Myers Squibb or our Clovis-sponsored studies, are planned or underway, including Phase III studies in ovarian and breast cancers and Phase II studies in advanced prostate cancer, bladder cancer and non-BRCA ovarian cancer.

And we're very enthusiastic about a renewed clinical development program for lucitanib, in combination with the PD-1 or PD-L1 and with Rubraca, expected to begin no later than early next year, and look forward to discussing this program much more over the course of the year.

In Europe, we are preparing to launch Rubraca in the ovarian cancer treatment area as well as a potential broader maintenance treatment indication. We anticipate a CHMP opinion on the maintenance setting before the end of this year, and a potential formal European commission approval in early 2019. And accordingly, our commercial '19 is gearing up for an early 2019 launch in June.

And finally, and very importantly, we are initiating a number of programs to reaccelerate growth in the second line ovarian cancer maintenance market through Rubraca.

With that, we'll be happy to answer any questions you may have.

(Operator Instructions) Our first question comes from the line of Kennen Mackay with RBC Capital Markets.

I guess maybe first and foremost, on the commercial front, after seeing the quarter-over-quarter declines here, wondering if you could elaborate maybe a little bit on sort of when some of the commercial plans that you detailed to sort of combat the watch and wait approach as well as the perceived lack of differentiation here, when do you think could maybe start to take effect? And maybe help us understand some of the dynamics quarter-over-quarter that led to these sort of slight shared declines, if you are seeing growth in any of the approved indications in the U.S. or where it's sort of been stable or declining?

Yes. So I think the quarter-over-quarter number, the Q2 to Q3 number, can be see easily explained by inventory alone, which Dan referenced. And also by the increase in the path beyond that, by the increase in the path program from about 25% of our commercial supply to approximately 30% of our commercial supply. In fact, with the effect of these 2 trends, we are seeing continuing growth in the United States, and unfortunately, it did not translate into revenues because of those reasons. We have been pleased with the reaction to this maint-enhance program, which launched in early October. I am hopeful that we will begin to see the impact of those programs during this quarter. I also think that the -- we hope that the supply of free drug will begin to stabilize at or around this number. And obviously, are redoubling our effort both at the sales line and the marketing side to increase the number of new patient starts on our growth.

Got you. And then maybe just to address the final point on commercial differentiation in ovarian and sort of this perceived lack of differentiation. Could you maybe talk about how some of the headwinds that you are facing in ovarian cancer might be somewhat different in prostate cancer? And help us think about that market opportunity as it relates to what we've seen in ovarian?

First, on the differentiation, you've all heard this from KOL. So this is not information that you haven't heard before. And I think that the 2 things that we are pounding on are, one is that we are the only PARP inhibitor that by BICR has shown a progression-free survival of over 12 months in the maintenance setting. And we are really pounding our PFS message. But what we have found in a world that sees the hazard ratios as relatively similar, is that KOLs have reacted well to as have prescribers to the idea that we prospectively looked at whether or not in ARIEL3 we could see an improvement in response, and we did, not only in BRCA patients but in the all-comer population. That we think represents something of a call to arms to help a patient understand that beyond the benefits of maintenance and delaying chemo, she actually has the chance of seeing a furthering of her tumor response, which is, of course, of great importance to any patient with advanced cancer. So I think we have a chance with these programs to drive what comes out of ARIEL3 as differentiating in to make that case. As to prostate, I would say that an agenda item for us that we take incredibly seriously is doing everything we can to be first. We have seen very significant growth for olaparib, in the breast cancer setting, where up until about a couple weeks ago, they were the only PARP inhibitor indicated in BRCA triple-negative breast cancer, which indication they received in early January. And we understand the benefits that provided AstraZeneca, we seek the same benefit by hopefully taking advantage of what we perceive to be the lead we have now. We have the most substantive reported data in the setting. And so we're driving to be first. It's hard for me to make any claims of differentiation, because we're the only company that has demonstrated, in a meaningful population, a data set that can be interpreted. So it's a little hard, Kennen, for me to say, and we also think that we are going to able to show this, that or the other thing compared to data sets that we, of course, haven't seen.

Totally understood. We'll keep our eyes on time-to-market and a potential first mover advantage here.

Your next question comes from the line of Tazeen Ahmad with Bank of America.

Pat, just wanted to get your thoughts on the recent SOLO-1 data set that was presented at ESMO for front line ovarian. How do you think that data set is going to impact the market opportunity, if at all, for Rubraca in the second-line maintenance indication? And to the extent that you have this information at hand, can you also let us know how much of your scripts right now are new start versus perhaps switches from the other PARPs?

I'll try in that latter one. First on SOLO-1. First of all, congratulations to AstraZeneca and good news for patients. The SOLO-1 data in germline BRCA frontline maintenance were good. I would argue as one would have expected in this patient population, the least pretreated and the most likely to benefit BRCA patient from a PARP inhibitor. I think it's a little early for me to know exactly how it may impact on the second-line maintenance market for Rubraca, but I'll make a couple of statements that I think are relevant. I think any impact on the second-line maintenance market will be limited to the 15% or at most of germline BRCA patients or at most 25% of patients who are germline and somatic mutated patients. We don't know what ultimately they're going to get in their label. They did have 2 somatic patients out of the multiple hundreds that they treated in that frontline maintenance setting. But it would be limited to the BRCA patients. We don't believe and our KOLs don't believe that this is going translate into use in an all-comers population until those data are established, potentially from their trial or from other trials. And honestly, we're committed to an all-comers population in ATHENA. Two, there will be a delay in that impact. SOLO-1 will likely be the basis of an approval and frontline maintenance early next year, but it will take time for those patients who come off frontline treatment and go on veliparib in the germline BRCA setting to have moved their way down the funnel into being treated for the second round of platinum and then be eligible for second-line maintenance. And so it will probably be something like 18 months to 2 years before there's an impact on those scripts delaying the progressions and the initiation of the second platinum-based therapy, and then the potential for a second-line maintenance with another PARP inhibitor. And then the last thing I'll say on this is when that delayed impact manifests itself, I think it may not be as dramatic on the second-line maintenance market as it is on growing the overall market for PARP inhibitors. As we saw when we were -- had our treatment indication only, 40% of our patients had been pretreated with the PARP inhibitor. And the willingness or even desire of the clinical community to consider retreatment with PARP inhibitors, particularly with an intervening round of platinum-based or other therapy, is very, very high. I've mentioned this before. At ASCO, we had an advisory board and we just polled the room what percentage of the 14 or 15 physicians would prescribe a PARP inhibitor after a PARP inhibitor and all but 1 said they would. The one who said she would limit that, limited to situations where toxicity prevented use in the -- for the first PARP inhibitor. So I think it's fantastic data. I think it's great for AstraZeneca in patients. I think it's great for the class, and I think it will have a modest impact in the short to intermediate term on the second-line maintenance market. If anything, this whole class needs a call to arms for these prescribing physicians to consider maintenance and maybe we'll get some spillover effect from the SOLO-1 data saying maintenance really helps. As to your second question about what -- effectively what percentage of our new patient starts are switches. We do see some switches. I don't know the percentage, but I will say that -- I will say that the majority of new patient starts are patients who had become newly eligible for second-line maintenance, not patients who have come off of one of veliparib or niraparib.

Okay. And do you know what percent of your sales are coming from indication other than your label?

It's approximately 10% right now.

And I guess, the last question for me is how are you thinking about the percent of free drug? You said a statement that say that you expect it to stay around 30%. Is there the potential of it going higher than that?

We fear that potential. We have seen in the last months, 6 weeks that kind of leveling off. And so I don't think there's any evidence that we're going to see any meaningful increase. We had predicted that this -- we gave a range and this is sort of the high-end of the range. And I hope this is generally where we settle out.

Your next question comes from Terence Flynn with Goldman Sachs.

This is Jason on for Terence. Just for the 3Q Rubraca sales figure, can you give the breakdown between BRCA and non-BRCA patients? And then obviously, it's early in the maintenance law. But once that kind of picks up, how do you see that BRCA versus non-BRCA breakdown going on the forward?

We don't have a breakdown of the BRCA and non-BRCA. The numbers may surprise you. When I did an overall number of this 35% to 40% who are getting a PARP inhibitor in the maintenance setting, it's only 48%, less than 1/2 of patients with the BRCA mutation. So there's still a lot of work a lot to do in the most obvious population who would benefit from a PARP inhibitor, which is a BRCA-mutated patient. But I don't have that breakdown, I'm sorry. And I don't remember the second question you asked. I'm sorry, the second half of your question?

It was just on how you see that breakdown of like evolving for over the next few quarters, just for the PARP market in general?

I would have thought by now both overall and the BRCA-mutated population, I would have always expected the BRCA-mutated population to be higher, but not as marginally so as it appears to be right now. I do and continue to believe that this represents a sort of nadir in that with 3 or actually 4 companies, when you think about the collaborator for olaparib, trying really hard to encourage physicians, not only for their brand but for their class, to consider maintenance that, that is going to have an effect on utilization both in the BRCA and the non-BRCA population in second-line maintenance.

Your next question comes from the line of Cory Kasimov with JPMorgan.

This is Chuan on for Cory. So kind of given your sales trends and your spending guidance, and sort of just looking at all the trial you guys have ongoing. At what point do you need to start prioritizing your capital allocation?

We think about capital allocation all of the time. We still have sufficient cash for at least 2 years. We think hard about all the trials we're running, but the trials are value added. They're meant to make us address much larger population, all-comers and bladder potentially. The mutant BRCA population. Sooner than any other indication is a new indication for us in prostate. And obviously, ATHENA, we hope to go beyond what was shown for SOLO-1 in the BRCA population alone, but to demonstrate meaningful benefit in an all-comers frontline population. So I think the allocation of our capital is driven by the opportunity that these trials, if successful, represent in terms of generating revenues. I do not believe that approximately a $100 million run rate is our permanent run rate. We made a lot of changes around here, and we're continuing to initiate new programs. And our goal is to aggressively seek to reinvigorate growth for Rubraca in its present indication and use these other indications to add to it. And of course, we have Europe coming online in the early part of next year.

Our next question comes from the line of Peter Lawson with SunTrust Robinson. Our next question comes from the line of Gena Wang with Barclays.

I have 2 questions. The first one regarding the sales again. Even if we into take into consideration of the inventory and if we draw the impact of $4 million, so if we add this back, it's only like $27 million, still pretty modest. Just wondering if you can share with us regarding new patient growth rate versus last quarter. We know last quarter, only 2 months, right, when the launch in the maintenance setting. And also where you see the revenue growth from in 2019?

Yes. So new patient starts are the #1 driver of long-term potential, and that's why the effort we are making here to increase the new patient starts on Rubraca is so important. Obviously, if we see an improvement in sales in Q4, we obviously would hope that would continue over the course of next year. But where we are going to get in the second-line maintenance market is a combination of growing the number of prescribers whose prescribe a PARP inhibitor and ideally Rubraca; and 2, continuing to differentiate for those physicians who have determined to use a PARP inhibitor in second-line maintenance with the data sets that I described, not just our progression-free survival but the maint-enhance program that demonstrates the potential to further shrink a tumor in a woman who came off of platinum with a partial response. So other programs that I discussed in the earlier part of the call are the programs that we think have the potential to reinvigorate growth for the brand.

Okay. And then 2019 drive revenue growth, would that be also mainly U.S.? Or would that be also meaningfully contribution from Europe?

We anticipate that as we -- and we're going to give guidance for 2019 at the JPMorgan Conference. So we're planning to do that in early January. But we would anticipate growth in the United States and the beginning of a contribution from Europe, but probably limited to Germany and a handful of other countries where one can launch relatively early without having to negotiate reimbursement.

And then my next question is regarding TRITON3. Just wondering what is your estimate percentage of ATM patients in the final enrollment? And any concern that ATM patients could have negative impact on the Phase III readout?

That's a good question. I'm glad you asked it. So the ATM percentage was a little bit all over the map, when we looked at our genomic study that was presented at ESMO. It was as low as 6% or 7% of the overall patient screen. But then using plasma testing admittedly in the later line TRITON2 population, it was as high as 14%. So let's take a number in between, probably around 10%. The design of TRITON3 is a step down design. So the statistical plan has us looking first at the BRCA-mutated patients and then we look at all-comers, which basically is Rubraca plus ATM. So it was specifically designed to ensure that in the event that activity of Rubraca or a PARP inhibitor in ATM-mutated patients is not nearly as robust, it would have no possibility of impacting on the outcome of the trial for the BRCA-mutated patients. So that's part 1. Part 2 is you're right to effectively point out that we have not yet seen either a PSA response or a RECIST response in the ATM population in TRITON2. What we have seen is a relatively high proportion of patients who have long-term stable disease, some degree of tumor reduction, some degree of a PSA response, but we have 1 patient who's been on drugs for 12 or 13 months, and others who have crossed the 6-month threshold. So we are going to continue to enroll ATM patients in TRITON2 and try to learn more and more about a population of ATM patients. But we have not considered stopping enrollment of ATM patients in TRITON3 because we still think there could be a positive impact on progression-free survival, driven by the stable disease in the ATM population and PFS, progression-free survival is, of course, the primary endpoint of TRITON3. So more to come on that, but the trial, as long as it's successful in the BRCA patient, is protected from a negative outcome for the ATM patient.

Your next question comes from the line of Peter Lawson with SunTrust Robinson.

This quick step up you've seen in need for free drug, what drove that? Do you think it's more of a class effect? Or do you think you're being hit more adversely by that?

I think it's a class effect. And I actually think that class effect goes beyond PARP inhibitors in the ovarian cancer setting, but to any solid tumor where funding for these foundations has been reduced. So I don't -- I don't believe there's anything about our program that is more attractive to a prescriber than they would see for programs from either veliparib or TESARO. The growth I think relative to our earlier percentages, particularly when we were in the treatment setting, is a little bit about the patient characteristics. So when we were limited to the mutant BRCA treatment indication, sadly, many women with BRCA mutations present with ovarian cancer earlier in their lives than do the broader population of non-BRCA mutated patients. And I think the consequence of going into this all-comers population has caused us to see a number of women who are Medicare eligible and a higher percentage of women who are Medicare eligible than when we were limited to the treatment-only BRCA population.

And then Pat, just on the departure, your Chief Commercial Officer kind of mid-launch, I mean, where are you in the process of finding a replacement? And how anticipated was that?

We have a search underway. We are absolutely confident that we will have a new person on board, if not -- it's not likely this quarter, but I would hope that early next year. It's a very attractive opportunity. I've been given -- I've mentioned the great input I've been able to get from our new board members. And I reached out to them for suggestions of people that they might recommend for us to contact directly or through our recruiter, but that search effort is well underway.

Got you. And then just going back to the supply of free drug, do you think it's also linked just to the number of companies that have a PARP inhibitor, so that kind of creates an additional pressure there around who can supply free drug?

Well, that's an interesting question. I know that -- so the way it works is the physician will prescribe the drug and then an investigation will occur via third-party if the patient applied for and they're often recommended to do so as potentially being eligible for a free drug effectively. The concern of any commercial group has is that if your company's program is less favorable than competitors', then the physician is just going to move to prescribing everybody an alternative drug. Because if a patient is more likely to get free drug from a different program, then that's going to be an advantage in the eyes of the physician, who clearly want to see their patient get access to a drug, whether it's from a free program or commercially insured. And so there is a general sense is that we -- and I'm sure competitors feel the same way -- have to remain competitive because the concern is if you aren't competitive with a free drug program, you could not only impact your free drug supply but your general commercial supply. That pressure is probably greater in a world where there are competitors than where there is just 1 drug of a class approved for a given indication.

Your next question comes from Joe Catanzaro with Piper Jaffray.

Just maybe one quick one for me. So you mentioned the continued tumor shrinkage for Rubraca and the maintenance setting as a potential key differentiator. I was just wondering if you could comment on how patients who complete chemotherapy but have residual disease are currently managed?

They're all managed in effectively the same way. So if a woman comes off her 4 to 6 cycles of a platinum and has achieved either a partial response or a complete response, a physician then can make the choice about whether to do, as we discussed here, put her on a PARP inhibitor or go with watch and wait. If that woman is unable to tolerate that platinum-based therapy or it could -- proves itself to be an effective, she would normally be rotated onto some alternative chemotherapy regimen to try to see if an alternative regimen would do a better job at shrinking the tumor. This maintenance indication for the PARP class, of course, is only about 15, 16 months old. And as we noted here, we as a community have struggled to get adequate uptake. Part of what we're trying to tell through this maint-enhance story is, look, you may not be seeing this as the opportunity as maintenance alone to delay, for potentially long period of time, depending on the patient characteristics, the initiation that other round of chemotherapy. But what you may like is the opportunity to tell a patient, "Look, normally when we see a partial response, we are happy, because that represents sort of a fatal disease and -- or better. And we're going to give you watch and wait or a PARP inhibitor. But I can give you a drug that not only will delay the initiation of chemo, based on the progression-free survival data from ATHENA -- excuse me, ARIEL3 -- but there's one drug that actually can further shrink your tumor," which is a real advantage to a patient who doesn't like the idea of any residual tumors inside her after a tough battle of platinum-based chemo. And so we uniquely had the opportunity to tell a story that goes beyond just maintenance. And I know it sounds a little bit corny, but to maint-enhance, which is actually deep in the response that she saw on her original platinum-based therapy with the goal of either deepening that response or in certain cases, actually converting it from a partial response to a complete response, which effectively is the elimination of tumor.

Okay, got it. Maybe just one quick follow-up. So you mentioned that currently there's 10% off-label use, I'm wondering if you expect that number to change in light of the TRITON2 data presented at ESMO?

I don't know. I will say that where we do see off-label use has been predominately in either breast cancer or in pancreatic cancer. And we do not, to date, have not to date seen very much use in prostate. So if we do begin to see some use in prostate based on the TRITON2 data that I would expect that percentage of off-label use to grow.

Your next question comes from the line of Michael Schmidt with Guggenheim.

I just had a follow-up for the prior question. And this is something that we've heard from KOLs most recently, which is that some physicians in clinical practice apparently treat patients with chemotherapy to progression, so a patient that only achieves a PR with chemo is, to be clear, remains on chemotherapy until progression, which is obviously not how these drugs were studied in the maintenance setting. I was just wondering if that is something that you've been seeing in clinical practice while marking the drug and is that something that physicians are receptive to, to switching to something like Rubraca if the patient has not achieved a CR following platinum chemotherapy?

Yes. I will tell you a couple of things about that. We are aware of some KOLs or academic based clinicians who do feel that once a woman has recurrent ovarian cancer, she effectively needs to make a decision to be on therapy of some kind for the rest of her life. So these are physicians who have decided that watch and wait is not a good idea, that maintaining patients on chemo for as long as they can and if they progress on that chemo, going to another round of chemo is a good idea. It's our opportunity and our responsibility to go to those physicians and say, "Look, we get it that you want to maintain a constant treatment approach to these patients, but far better for that patient to come off chemo, which is really hard." And so when you're talking about chemo, what normally is scheduled for 4 to 6 cycles. When you're talking about chronically delivering platinum-based chemotherapy, you're talking about a very fit younger woman who can tolerate that. It's not easy. So while yes, that has been pursued in academic settings for fit, younger patients, I think we have every opportunity based on our data, and there aren't data for chemo in the setting, to say, "Look, take a break after you get to a partial response on 4 to 6 cycles, go on a PARP inhibitor. It's far better tolerated than a platinum-based doublet or even a platinum- or taxane-based therapy, and you have the opportunity to retreat later with the platinum or the taxane or some alternative chemo." I do not believe this is a standard practice in the community-based setting. This would be more aggressive academic centers.

Thank you for your time, everyone. We appreciate your interest. If you have any follow-up questions, please call me at (303) 625-5023 or Anna at (303) 625-5022. The call will be available via a replay of our webcast beginning in about 1 hour and will be available for 30 days. Again, thank you for your interest and time. And have a good evening.

This concludes today's conference call. You may now disconnect. Have a great day.