CTI Biopharma Corp (CTIC) 2020 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 CTI BioPharma Corporation Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to your speaker today, Dr. Adam Craig. Thank you. Please go ahead, sir.

Thank you, Jiji, and welcome to this afternoon's conference call. Joining me today are David Kirske, Chief Financial Officer; and Bruce Seeley, Chief Operating Officer. Following formal remarks, the conference call will be open for questions.

Before we begin, please note that during this call, we will be making forward-looking statements based on current expectations. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward-looking statements. Additional information concerning these risks and uncertainties are contained in today's press release.

This quarter, CTI executed on critical activities that have further advanced pacritinib towards a U.S. approval and commercial launch. Our rolling NDA submission for the use of pacritinib in myelofibrosis patients with severe thrombocytopenia, that is a platelet count of less than 50,000 per liter is nearly complete. We remain on track to finish the submission by the end of this month.

As we have previously discussed, the format of the NDA was agreed with the FDA and will consist of a submission package based upon available data from the completed Phase III PERSIST and PERSIST-2 studies and the Phase II PAC203 study with a focus on the severely thrombocytopenic patients enrolled in these studies, including frontline treatment-naive patients and patients with prior exposure to JAK2 inhibitors.

In PERSIST-2, in patients with severe thrombocytopenia, who were treated with pacritinib 200 milligrams twice a day, 29% of patients had a reduction in spleen volume of at least 35% compared to 3% of patients receiving best available therapy, a statistically significant finding. In the same population, pacritinib was well tolerated with reversible and manageable side effects.

If the FDA accepts the NDA and grants priority review, we could receive an accelerated approval for pacritinib by the end of 2021. At that point, the ongoing Phase III PACIFICA study is expected to be completed as a post-approval confirmatory study. Enrollment in this trial has recently improved, in part due to the abatement of the COVID-19 pandemic. And we continue to expect to report top line primary efficacy data in 2023.

Our preparations for the commercial launch of pacritinib are progressing well. Over 1/3 of the existing myelofibrosis population has severe thrombocytopenia, approximately 7,000 patients. To address this unmet medical need, we have now hired key leadership in marketing, sales, medical affairs and market access. Over the coming months, we'll focus on our disease-awareness campaign, market access, customer engagement and the deployment of our field force.

Last year, we launched the study of pacritinib in severe COVID-19 patients in response to the pandemic. This study, PRE-VENT, is a randomized, double-blind, placebo-controlled, multi-centered Phase III study of pacritinib in hospitalized patients with severe COVID-19, comparing pacritinib plus standard-of-care versus placebo plus standard-of-care in hospitalized patients.

The primary endpoint of the trial will assess the proportion of patients who progress to invasive mechanical ventilation and/or extracorporeal membrane oxygenation or die by day 28. We expect to report an interim analysis from this study in mid-2021.

Before I turn the call over to David to review our financials, I want to touch on an additional indication that we have been investigating, that is the use of pacritinib in the prevention of acute graft-versus-host disease or GvHD.

At ASH, the American Society of Hematology, meeting in December, data was presented from an investigator-sponsored Phase I/II study shown that adding pacritinib to the standard prophylaxis of sirolimus and low-dose tacrolimus resulted in a significant reduction in the expected acute graft-versus-host rates in patients within the first 100 days of therapy as compared to historical data, without compromising transplantation outcomes and without any new safety concerns.

The Phase II component of this study is now enrolling. CTI's interest in this indication remains high, and we look forward to providing an update on the progress of the Phase II trial later in the year.

With that, I'll now turn the call over to David to review our quarterly financials. David?

Thank you, Adam. As of December 31, 2020, our cash and cash equivalents totaled $52.5 million compared to $33.7 million as of December 31, 2019. We expect current cash and cash equivalents will enable us to fund our operations into the second quarter of this year. Operating loss was $14.8 million and $47.8 million for the 3 months and year ended December 31, 2020, respectively, compared to an operating loss of $9.5 million and $40.7 million for the respective periods in 2019.

No revenues were reported for the 3 months and year ended December 31, 2020, as well as for the 3 months ended December 31, 2019, while revenues of $3.3 million were recognized for the year ended December 31, 2019. Net loss for the 3 months ended December 31, 2020, was $15 million or $0.20 for basic and diluted loss per share compared to net loss of $8.2 million or $0.14 for basic and diluted loss per share for the same period in 2019. Net loss for the year ended December 31, 2020, was $52.5 million or $0.74 per basic and diluted loss per share, compared to a net loss of $40 million or $0.69 for basic and diluted loss per share for the same period in 2019.

So with that, I will hand it back to you, Adam.

Thank you, David. So in summary, we're delighted to be able to be close to the completion of the NDA submission and for the potential for an accelerated approval of pacritinib by the end of year for use in patients with severe myelofibrosis, with severe thrombocytopenia, a currently underserved patient group.

This concludes our formal remarks. Operator, please open the call for questions.

(Operator Instructions) Our first question comes from the line of Ren Benjamin from JMP Securities.

Can you hear me okay?

Yes, we can.

Congrats on all the progress. Maybe just starting off with the application. Can -- you mentioned that it will be completed by the end of this month. Have there been any sort of further discussions with the regulatory agency on the way to the completion of this application, Adam? Or is it pretty much all in -- ball's in your court at this point?

And then as you -- as the application gets reviewed, do you anticipate sort of back and forth? And ultimately, I think I've asked you this in the past, but I want to know if there's any changes? Do you anticipate any sort of a panel discussions potentially coming out from it?

And ultimately, by the end of the year, assuming an approval, can you just remind us what sort of -- how we should be thinking about the commercial opportunity as you build it out? I know you're doing the disease-awareness campaigns, and there's a lot of things happening right now, which I'd love to get some more color on. But ultimately, when you're launching, how does that launch look for you guys?

Yes, certainly. I'll go through the questions. Thanks for all those, Ren. The -- to start with -- about the application, the FDA was very clear. We had a very good pre-NDA meeting, and it was very clear to us what was required of us. They -- there was a great deal of clarity during that meeting. They specifically wanted us to focus on presenting data around the 200-milligram twice a day dosing of pacritinib in severely thrombocytopenic patients. So that's what we -- that has been the center of the focus of the NDA and will be the focus of the label, the draft label that we will submit very shortly.

There has been some correspondence with the FDA, but really mainly during the review process, clarifications of points, there hasn't been any major dialogue with them with regard to the NDA. Because I think, as I said, they were extremely clear to us as to what was expected of us, and we have addressed -- I believe we have addressed all their concerns in an application that is very thorough and very complete.

With respect to the panel, currently, I think the data shows that we are very similar to the other drugs in the disease area and other [TIRE] in kinase inhibitors with respect to our safety profile. And our efficacy data, we think, is pretty clear with the 29% versus 3%, SVR rate that I just referred to.

So at the moment, we don't see there being a panel. However, that is at the discretion of the FDA. And we will -- we are -- we will prepare for that eventuality, until we hear otherwise from the FDA. Currently, if we file by the end of the month, we should hear from them by the end of May, whether they've accepted the filing. And at that point, they should indicate whether they believe there should be a panel or not.

And then the commercial opportunity. I'd rather not go into too much detail about the commercial opportunity at the moment because Bruce Seeley, who's with me, still working on that. At the moment, we're -- suffice to say, we have hired the key leadership in sales, marketing, medical affairs and market access. And we have done a considerable amount of work identifying our -- where the patients are, so we understand how we can deploy our field force over the coming months.

But at this point, I'd rather not go into too much detail on that and just leave it at that.

Okay. Yes. Fair enough. As long as you don't mind, I'll probably ask that at the next conference call as you get more clarity. I guess just leaving -- one last question for me regarding GvHD. You mentioned updated data later this year. Is it fair to assume by ASH of this year? Is that how we should be thinking about it?

And then maybe related to that, how does -- like we see how pacritinib threads the needle in MF, but there's -- the landscape is changing quite a bit in GvHD. Can you talk a little bit about how you envision pacritinib threading the needle in GvHD?

Well, as I said in the opening remarks, I -- we're very interested in the graft-versus-host data. The publication for that data is going to come out very shortly. And I think it's an exciting opportunity for us to expand the use and potentially expand the label of pacritinib. The data -- the study is being conducted by the University of Minnesota and the Moffitt center. And they've indicated as the enrollment of the Phase II study is going well. And I would expect there to be some data by ASH to answer your question.

With respect to the broader use of acute graft-versus-host. I think this -- the proof-of-concept of using pacritinib in this setting has been very positive. And we are, as a team, expanding other ways of using the drug in graft-versus-host. But for the time -- our main focus at the moment is the acute graft-versus-host syndication.

Our next question comes from the line of Chad Messer from Needham & Company.

Congrats on being so close to completing a potential filing. You had mentioned labeling. I'm just wondering whatever is appropriate that can be discussed at this point given where you are about your thoughts on labeling. I know in the past, this was discussed as a way of addressing past safety concerns. Just want to make sure we have your latest thoughts on that.

Yes. Thank you, Chad. It's nice to speak to you again. The labeling, we spent an awful lot of time in the labeling, and we've gone through the safety data, the entire data safety -- data set include, primarily though, the data from the less than 50,000 population, which is what the FDA is most interested in. And we think in the labeling, we can address previous safety concerns at the FDA in the Warnings and Precautions section, particularly around any bleeding or any cardiac events. After reviewing the data in a great deal of detail, we do not think there is a justification for black box warning. So we have -- in our proposal draft label to the FDA, we're not going to include a black box warning for hemorrhage. But obviously, this will be a negotiation once the FDA has started to review the data.

But overall, I was very -- when we looked at the integrated data, all the data together, I was very encouraged and very pleased to see that the side effect profile of pacritinib was very manageable and very predictable. And we think we can address the concerns in -- with normal label language as others have within the Warnings and Precautions section of a label.

Okay. Great. Very helpful and very encouraging. We've touched base on this before, but just wondering here on the (inaudible) filing with FDA, if you've had any further thoughts on just general EU strategy?

Well, the EU has indicated previously that they would like the PACIFICA Phase III trial for completion -- to be complete before we submit. We're continuing to review our position on that. And obviously, with the U.K. breaking away from Europe, the U.K. is now a separate entity. The focus -- to be honest with you, given the size of our company, the focus over the last 6 months has been the NDA. But once the NDA is in place, myself and my regulatory colleagues, we will take some time and look at -- reassess our regulatory strategies in other territories.

Okay. Fair enough. And then just -- and I'd like to get your thoughts here on cash position, obviously, in the 2Q is not super enviable. But if -- just looking back at my notes from the last quarter that, that runway appears to have shortened. Just wondering if there's a particular reason for that? And anything you can say about the options you're considering to address?

Yes. We're not going to comment on that today except for the numbers that David has already presented, Chad. But thank you for your question.

And just one point, Chad, in terms of our accelerating costs, that's associated with commercialization as we build on that. That's infrastructure.

(Operator Instructions) Our next question comes from the line of Thomas Flaten from Lake Street Capital.

Let me add my congrats, too. Just a couple of housekeeping on PRE-VENT and GvHD. On the PRE-VENT study, Adam, I think you had increased the interim patient group up to 200 patients. Is that still the right number we should be thinking about?

Yes. That's correct, Thomas.

Okay. And then could you remind us -- with the study going on in GvHD, what your options are? Do you have full access to all the data that, that's being generated by the UFM and Moffitt team? Or can you just remind us what your relationship is with that team doing that research?

It's a good relationship. We do have access -- well, we don't have -- currently , we don't have access on the Phase II, but we will be -- when the data is mature, we will be able to look at it. That's in the agreement with the Moffitt and Minnesota who are good partners here. They want to move this forward as much as we do. So we'll be able to look at the date.

And then the options for us is, at that point, the drug will have reached the -- at the end of Phase II. We're going to look at the data set, and we're going to see if there is a potential approval pathway for acute graft-versus-host with pacritinib. And that may be based on Phase II data, that may be the current Phase II data, it may be based on us generating additional data. We won't know until we have a discussion with the FDA.

Got it. And then just a couple on the run-up to potential launch here by the year-end. As we're thinking about spending, what's your trigger for kind of mass hiring of sales reps and kind of junior marketing folks that I'm sure there's going to be a bolus of people coming into the company. Is that going to be once you have an acceptance to file at the end of May?

The bulk of the hiring is after we have acceptance for higher. I'll let Bruce comment on that briefly.

Thomas, you're right. The gate is predominantly the validation of the filing, as Adam mentioned, at the end of May. And then as far as the sales force is concerned, we're going to bring them on closer to the PDUFA date.

And just on that, have you guys settled on a final number of sales reps that you need? I don't know if you've completed that exercise with ZS or whoever you're using?

No, we have not finalized that. It's in process now.

And then just one final one for me. With respect to drug supply, where -- how do we stand with that?

Manufacturing has always been a very well established, a very strong component of the company. We had plenty of drug product actually, who we manufactured some years ago. And we have no concerns about the manufacturing. There will be -- we have plenty of drug supply patients within the first year.

And then -- and as things -- first you have commercialization, and if things progress, we'll start manufacturing additional drug.

Congrats, again.

At this time, I'm showing no further questions. I would like to turn the call back over to Dr. Adam Craig for closing remarks.

Thank you, Jiji. I'd just like to thank everyone for joining the call today. We look forward to further conversations over the coming months.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.