Mirati Therapeutics Inc (MRTX) 2022 Q4 法說會逐字稿

Good afternoon, and welcome to the Mirati Therapeutics Fourth Quarter 2022 Earnings Call. My name is Cynthia, and I will be the operator for today's call. (Operator Instructions) It is my pleasure to introduce Ryan Asay, Vice President of Corporate Affairs at Mirati. Ryan, you may begin the call.

Thank you, Cynthia, and welcome, everyone, to this afternoon's call. Joining me on the call today are David Meek, our Chief Executive Officer; Dr. Chuck Baum, our President, Founder and Head of Research and Development; Dr. Alan Sandler, our Chief Medical Officer; Dr. Jamie Christensen, our Chief Scientific Officer; Ben Hickey, our Chief Commercial Officer; Laurie Stelzer, our Chief Financial Officer.

Before we begin, I would like to inform you that certain statements we make during this call will be forward looking. Because such statements deal with future events and are subject to many risks and uncertainties. Actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our annual report on Form 10-K that was filed with the U.S. Securities and Exchange Commission.

This afternoon, we released financial results for the fourth quarter and full year ended December 31, 2022, and recent corporate updates. This press release is available on the Investors section of our website at mirati.com. With that, Dave, I'll turn the call over to you.

Thank you, Ryan, and thank you for joining us on the call today. 2022 was a transformational year for Mirati, and I'm pleased to report we received our first approval and launched our first commercial product, KRAZATI, a KRAS G12C mutated locally advanced or metastatic non-small cell lung cancer. We deployed our highly experienced lung cancer commercial field force and made significant progress advancing our differentiated pipeline of targeted oncology products.

Our team launched KRAZATI in mid-December and while it is still in the early weeks, we are encouraged with KRAZATI's initial reception and its broader commercial potential. The initial launch feedback from clinicians, patients and payers reinforces our belief that KRAZATI is the best-in-class KRAS G12C inhibitor, addressing a multibillion dollar market opportunity across multiple lines of therapy and tumor types, both as a monotherapy as well as in combinations.

Additionally, our broad and differentiated clinical pipeline has the potential to address unmet medical need for hundreds of thousands of people living with cancer as we endeavor to develop differentiated products that will play an important role in their care.

As I step back and look at our products, capabilities and people, it's clear, we are well positioned to achieve near-term success and to drive long-term growth. Mirati is focused on creating best-in-class small molecules for the treatment of cancers with a current focus on being a leader across KRAS-mutated cancers. Our highly productive innovation engine has enabled us to develop KRAS and KRAS-enabling therapies to treat a broad range of patients.

We expect to dose our first patient with MRTX1133, our KRAS G12D inhibitor in the first quarter. Moreover, our other earlier stage clinical programs, including our MTA cooperative PRMT5 inhibitor and our KRAS enabling SOS1 inhibitor showed tremendous progress.

Furthermore, we have a potentially transformational opportunity on the horizon with sitravatinib in lung cancer in combination with PD-1. We believe this pipeline has vast potential to create significant value for our shareholders.

Alongside the development of these programs, we have built a scalable and synergistic commercial organization, particularly in lung cancer. At present, our U.S. commercial team is exclusively focused on launching KRAZATI. Furthermore, Mirati remains disciplined in how we deploy and invest our capital. We continue to focus on the combination of clinical data analysis and the corresponding commercial opportunity to drive our investment decisions.

Looking back, 2022 was a year of remarkable execution and major treatments for Mirati. Key clinical highlights include accelerator approval for KRAZATI in the U.S. in second line and beyond KRAS G12C mutated non-small cell lung cancer. Best-in-class intracranial response rates with adagrasib in patients with active and untreated CNS metastases, differentiated clinical data demonstrating adagrasib plus PD-1 combination is safe and tolerable with promising early signs of efficacy, broader potential in third line and beyond colorectal cancer indication for the combination of adagrasib and cetuximab, an investigational new drug application for MRTX1133, our first-in-class oral KRAS G12D selective inhibitor. Advancement of MRTX1719, our MTA cooperative PRMT5 precision medicine for people with an MTAP-deleted tumor and MRTX0902, our potential first-in-class SOS1 KRAS-signaling modifier program into clinical trials.

Looking ahead, 2023 is a year with several important upcoming catalysts and ambitious goals, which we will detail on today's call. We'll start with an overview of the KRAZATI launch, which is off to a strong start. I'll now turn the call over to Ben, who will provide you with an update on our early commercial experience. Ben?

Thank you, David, and good afternoon, everyone. I'm pleased to report that we're off to a strong start to the launch of KRAZATI. As a reminder, KRAZATI was approved in mid-December right before the holiday season. Therefore, I will limit my comments to that brief fourth quarter time frame and look forward to giving a more detailed update on our first quarter earnings call.

Our initial launch experience has been very positive, and we're confident that we can successfully deliver on our commercial goals. As a reminder, our U.S. commercialization team has specific and extensive experience in lung cancer supporting multiple launches. This includes a fully integrated team of market access, sales, digital marketing and medical affairs.

The team has already had extensive high-quality interactions with key target accounts and are focused on ensuring an industry-leading experience for physicians and patients. For example, initial patients treated in December are receiving treatment within approximately 5 days of a prescription being written versus industry analogous of closer to 10 days.

And our unique patient and physician-centric approach to distribution and our patient access programs have been well received. We continue to leverage our experience in the community setting, where over 40% of our pivotal study was enrolled and where nearly 80% of KRAS G12C patients are treated.

From an access and coverage perspective, we are pleased with our initial progress. KRAZATI was included in NCCN guidelines within one week of approval, which is exceptionally fast and helps from a coverage and reimbursement perspective, particularly with Medicare patients.

Overall, we've made strong initial progress in establishing broad reimbursement coverage with no significant access restrictions to date. Our interactions with physicians have been highly positive and our key messages centered around a 44% response rate and 14.1 months of median overall survival as demonstrated in a pooled analysis of Phase I and Phase II non-small cell lung cancer patients and low treatment-related discontinuation rates are resonating well.

Additionally, data showing KRAZATI's activity in patients with central nervous system metastases has been favorably received by physicians who recognize the importance for the approximately 40% of patients who know to have CNS metastases.

The second-line KRAS G12C non-small cell lung cancer market is significantly underdeveloped. As a result, our team continues to focus on market expansion priorities such as increasing, book testing and identification of KRAS G12C eligible patients, particularly in the community setting. We estimate that the KRAS G12C testing rate at the time of diagnosis is approximately 2/3, while testing rates for EGFR and ALK mutations are closer to 85%.

So there is a significant opportunity to grow the market and meaningful opportunities to better identify patients with KRAS G12C mutation at the local account level, where we have established partnerships with community oncology providers.

In summary, we believe that the important differentiating clinical characteristics of KRAZATI combined with an experienced and focused commercialization organization, positioned KRAZATI to ultimately become the market-leading KRAS G12C inhibitor.

Our commercialization team has a singular focus, delivering KRAZATI to the physicians and patients who could benefit from it. I look forward to providing additional information as our launch progresses. I'll now turn the call over to Alan for an update on our clinical activities. Alan?

Thanks, Ben, and hello, everyone. I'll begin by discussing adagrasib starting with non-small cell lung cancer. In first-line non-small cell lung cancer, we expect to share key updates across our multipronged development approach this year.

As a reminder, our initial and most advanced adagrasib combination approach in first-line non-small cell lung cancer is the concurrent dosing of adagrasib with pembrolizumab. Our experience with this combination provides us with confidence in the path forward based on 3 key points. First, there is a strong scientific rationale for improved durable outcomes with the combination relative to the existing first-line standard of care.

Second, adagrasib in combination with pembrolizumab has demonstrated a safe and tolerable profile.

And third, while the efficacy outcomes are still maturing, they are compelling and we look forward to evaluating the clinical outcomes with additional follow-up and more patient data later this year. Overall, the advancement of our first-line non-small cell lung cancer strategy will continue to be informed by data from ongoing clinical studies.

We expect to provide an update in the second half of this year, which will include a first look at durability measures, such as duration of response and potential 6-month landmark PFS analysis.

Within the KRYSTAL-7 study, we're also evaluating adagrasib as a monotherapy in patients with TPS scores of less than 1%. In addition to the KRYSTAL-7 combination update in the second half of 2023, we will also provide an update on the first-line monotherapy data and next steps at that time.

As part of our multipronged first-line development approach, we are also evaluating adagrasib in combination with KEYNOTE-189 regimen of carboplatin, pemetrexed and pembrolizumab which is enabled by the tolerability profile we are seeing with adagrasib plus pembrolizumab.

Phase Ib/II study evaluating this combination has been initiated as part of the KRYSTAL-17 study with an initial focus on the safety and tolerability of the combination.

Finally, beyond the U.S., we are continuing to advance discussions with the European Medicines Agency on their review of adagrasib marketing authorization application and anticipate potential approval in the third quarter. I'll now move to colorectal cancer, where we have several important upcoming milestones.

Adagrasib in combination with cetuximab has shown a compelling and differentiated profile and is our primary approach in colorectal cancer moving forward. In the most recent results, which were represented at ESMO in September of last year, the combination demonstrated a response rate of 46% and a median progression-free survival of 6.9 months. Notably, these results suggest the potential for a substantial improvement compared to the current standard of care of regorafenib or chemotherapy, which have very poor outcomes with low single-digit response rates and a progression-free survival of only approximately 2 months.

Based on recent input from the FDA, we will be moving forward with an accelerated approval pathway for the combination of adagrasib plus cetuximab in third line or later, colorectal cancer. We expect to submit the supplemental NDA in the fourth quarter.

Our KRYSTAL-10 Phase III registrational study in second-line colorectal cancer patients, evaluating the same combination of adagrasib plus cetuximab versus chemotherapy continues to enroll well. We expect to achieve full enrollment of KRYSTAL-10 by year-end, and we anticipate reporting a final analysis of progression-free survival with interim overall survival in 2024 with plans for regulatory submission based on these results.

In addition, other important development opportunities for adagrasib include pancreatic adenocarcinoma, cholangiocarcinoma, noncolorectal gastrointestinal malignancies and other solid tumors harboring the KRAS G12C mutation. We plan to present updated data in these tumor types at a medical meeting in the second quarter.

I'll now briefly touch on sitravatinib, which is being studied in a registrational Phase III study called SAPPHIRE. SAPPHIRE is on track for a top line final analysis for overall survival in the second quarter of this year. While we remain blinded to the ongoing study, we believe it was sufficiently powered to demonstrate both statistically significant and clinically meaningful outcomes.

With that, I'll turn the call over to Jamie for an update on our earlier-stage development pipeline.

Thank you, Alan. Today, I will cover progress on our early clinical pipeline assets, MRTX1133, MRTX1719 and MRTX0902. I'll begin with 1133, our highly potent-selective and potentially first-in-class oral KRAS G12D inhibitor which targets both the active and inactive states of the KRAS G12D mutant protein. The KRAS G12D mutation is predominantly associated with poor outcomes on standard therapy in several types of cancer. We estimate that just within pancreatic, colorectal, endometrial and non-small cell lung cancers, there is a prevalence of approximately 180,000 patients with KRAS G12D mutations in the U.S. and Europe.

We believe that 1133 has the potential to be an impactful treatment option for these underserved patients. We filed an IND for 1133 and received clearance from the FDA in January. Activation of clinical trial sites is underway and enrollment of first patients in the Phase I/II study will begin this quarter.

The study is designed to evaluate the safety, tolerability, PK/PD and antitumor activity of 1133 in patients with advanced solid tumors that harbor a KRAS G12D mutation.

The study will utilize a formulation designed to enhance oral absorption and increase systemic drug exposure. Positive attributes of 1133 includes sub-nanomolar potency in tumor cells, high plasma free fraction, long targeted residence time and a long plasma half-life of greater than 50 hours.

These attributes are all consistent with a low target plasma concentration threshold for maximal target coverage for the full duration of the dosing cycle. This has increased our confidence in a successful development path for 1133. 1133 has the potential to provide a transformative treatment option for the large and underserved KRAS G12D patient population.

Now moving on to MRTX1719, our potentially best-in-class MTA cooperative PRMT5 inhibitor. 1719 is enrolling in a Phase I/II clinical study for patients harboring an MTAP gene deletion. And MTAP gene deletion occurs in approximately 10% of all human cancers. This translates to greater than 200,000 patients in the U.S. and European Union annually.

While 1719 has the potential to address a wide range of tumor types, additional priorities for our development program will include pancreatic cancer, lung cancer, mesothelioma and malignant peripheral nursing tumors. 1719 has demonstrated promising preclinical data in these tumors and the potential to make a significant difference in treatment outcomes and these particularly difficult to treat tumor types, this may enable our rapid development path.

Now as a reminder, 1719 selectively binds to the PRMT5 MTA complex. This complex is uniquely present only in tumor cells harboring an MTAP gene deletion. This results in extensive selectivity for our eradication of MTAP-deleted tumor cells compared with normal cells.

The wide therapeutic index and ability to safely achieve near complete target inhibition with 1719 provides a clearly differentiated therapeutic modality compared with first-generation nonselective PRMT5 inhibitors which were limited by mechanism-based bone marrow and systemic toxicities.

Finally, the greater than 70-fold selectivity of 1719 is potentially the highest selectivity ratio for MTAP-deleted tumor cells relative to other reported PRMT5 MTA complex inhibitors.

Our early clinical experience in the Phase I study has been encouraging. The PK and systemic exposure are consistent with expectations to achieve therapeutically meaningful drug concentrations based on our preclinical projections. Without the associated safety challenges, that limited the utility of prior generation PRMT5 inhibitors.

Also, as a reminder, we were granted Fast Track Designation for 1719, which reflects the strength of our preclinical data and the potential for this agent to have a positive impact on these patients who have limited treatment options.

We plan to share the initial clinical data in the second half of 2023. The focus of this update will be on safety and tolerability with the potential to also report early signs of clinical activity.

Finally, we've initiated a Phase I study for MRTX0902, our first-in-class SOS1 inhibitor. Preclinical data have demonstrated that 0902 has the potential to enhance the activity of adagrasib and as an example of our strategy to maximize the value of our KRAS portfolio by pursuing a broad range of KRAS targeting strategies and indications.

We expect to initiate dose escalation cohorts combining 0902 and adagrasib in our presently ongoing Phase I/II clinical study in the second half of this year. In addition, for compelling preclinical research support the utility of 0902 and augmentation of EGFR inhibitors and EGFR-mutated lung cancers, other KRAS pathway inhibitors and RAS mutated cancers, including the possibility of KRAS mutant allele-specific inhibitors such as 1133.

Overall, we're pleased with the significant progress we've made across our portfolio and look forward to providing additional updates in the near future. With that, I'll turn the call over to Laurie.

Thank you, Jamie. I will begin by walking through our income statement and touching on a few other key financial metrics. Please see our press release from earlier this afternoon for additional details about our fourth quarter and full year 2022 financial results.

Revenue for the fourth quarter of 2022 was $0.9 million, which was driven by $0.7 million of KRAZATI sales and $0.2 million of license and collaboration revenues. This compares to revenue of $0.3 million for the fourth quarter of 2021, which consisted solely of license and collaboration revenues.

As a reminder, KRAZATI was approved in mid-December shortly before the holiday season. Of the $0.7 million of KRAZATI sales in the fourth quarter, a majority was associated with inventory in the channel. Research and development expenses for the fourth quarter of 2022 were $141.2 million compared to $153.8 million for the same period in 2021.

The decrease is primarily driven by a reduction in manufacturing costs for the adagrasib program following our 2021 NDA filing, partially offset by an increase in headcount-related costs including share-based compensation and salaries associated with the growth of our headcount to support our growing portfolio.

Selling, general and administrative expenses for the fourth quarter of 2022 were $70.8 million, compared to $43.5 million for the same period in 2021. The increase is primarily due to an increase in headcount-related costs, including share-based compensation and salaries and commercial readiness costs as we prepared for the commercial launch of KRAZATI.

Net loss for the fourth quarter of 2022 was $202.5 million, or $3.51 per share basic and diluted compared to a net loss of $199.6 million or $3.72 per share basic and diluted for the same period in 2021.

We ended the fourth quarter with approximately $1.1 billion in cash, cash equivalents and short-term investments, which gives us a cash runway into 2025. Cash burn from operations was $570.6 million for the full year of 2022.

We recognize that a disciplined data-driven approach to capital deployment is critical as we advance our pipeline, invest in innovation and effectively launch products to drive sustainable long-term growth. We have focused our investments on our highest priority opportunities, those that have the greatest potential to benefit patients, create value and drive shareholder return. We will continue to manage expenses closely, and we expect our 2023 cash burn from operations to annualize within a similar range of 2022.

Our 2023 cash burn expectations include the partial offset to spend we'll achieve from sales from the launch of KRAZATI. Finally, we are actively exploring ex U.S. partnerships as a source of capital and risk sharing and as a means of enhancing and accelerating our portfolio. And with that, I'll hand it back over to David.

Thank you, Laurie. Before opening the call for questions, let me conclude by saying how pleased I am with the considerable progress our team has made in 2022 as we delivered on our objectives across the key facets of the business. I'm proud of the work this team has accomplished thus far to execute our mission, but we know our work is far from complete. We believe Mirati is very well positioned for future success and value creation.

KRAZATI, combined with our clinical pipeline addresses patient populations amounting to multibillion-dollar potential market opportunities and our commercial organization is also a great start.

We also have multiple near-term catalysts, and we expect the case for KRAZATI to only strengthen over time as our adagrasib data matures. We also has the sitravatinib Phase III overall survival readout, initial clinical data for MRTX1719 and MRTX1133 entering the clinic with initial data expected in the first half of next year.

In addition, we expect strong progress across the rest of our innovative pipeline of programs that could serve hundreds of thousands of patients with unmet needs. At just 1 or 2 of our earlier-stage programs demonstrate meaningful clinical activity, we expect it will have a substantial impact on the valuation of the company.

As such, we are excited about our future and expect 2023 will be another standout year of execution and progress on our goals. On behalf of all of us at Mirati, we thank you for your continued support and interest in the company. And with that, Cynthia, we are ready to open the call for questions.

(Operator Instructions) And your first question comes from Tyler Van Buren at Cowen and Company.

Glad to hear the positive early launch comments. I wanted to ask about testing since you mentioned it. How do you get the KRAS G12C testing to [ALK] levels? Does G12C need to be included on more tests or panels? Or is your focus elsewhere to improve testing?

Tyler, thanks. Ben will take that question.

Sure. It's a couple of things, Tyler. One is to ensure that it is on all of the multiplex test. And I think that's growing over the course of time. And we've seen that uptick quarter-by-quarter. And the second one is to create additional demand for KRAS inhibitor and with KRAZATI, we think with our promotional effort in the market that will lead to just an increasing demand. And we can see, hopefully, then the testing rate commensurate with the demand coming into the market.

The next question comes from Salveen Richter at Goldman Sachs.

This is Matt on for Salveen. Could you guys share any commentary on your expectations for KRAZATI sales ramp in 2023? And then at the end of the call, you mentioned you're exploring partnerships. Could you just discuss things you're thinking about and considering there?

It's Ben, I can start. We're not providing guidance for sales this year. And in regards to partnerships, we'll defer to maybe Laurie?

Yes. We think it's prudent to start that process and begin to have those conversations and explore the potential. So that's in the very early stages.

The next question comes from Gena Wang at Barclays.

This is Harshita on for Gena. First one on the adagrasib launch. We understand it's early days, but are you able to comment on what percent of patients on adagrasib thus far have been recent PD-1 progressors. And then second one quickly, can you provide some color on what you're hearing from physicians with regard to their familiarity on the safety and tolerability of adagrasib given that the label has the safety on capsule formulation and that you've launched with the tablet.

Sure. I'll take the call first. It's David. I'll pass on to Ben. Regarding the metrics and so on, we'll save that for the next earnings conversation. We only have a couple of weeks on the market prior to the end of the year. So we look forward to sharing that in the May time frame. The launch uptake, second part of the question, Ben can...

Similar response really, we'll be sharing more around that in regards to some of the physician responses as we get into the Q1 call. We'll have a better sense of the source of growth as well at that juncture.

The next question comes from Jonathan Miller at Evercore ISI.

I guess as we think about second-line launch going forward, obviously, you're not giving color on what you've observed so far. But maybe -- what's the balance of growth there being driven by market share versus the competitor? Versus market development from testing? Do you have goals on those fronts for 2023? And then maybe secondarily, as we look forward to PD-1 combo data updates second half, what's the bar for duration and PFS there?

Obviously, there's been a lot of discussion on what the right comps are, in that indication of people trying to break in. Can you remind us what you're looking for from PFS data?

Ben, do you want to take the first one.

Yes, I'll take the first one. Again, it's a little bit early to be sharing the information around what we're seeing in regards to is it market growth or share. We do have internal metrics and goals around both of those. We think they are critical. We do think that the market, in general, is still very nascent and has a long way to grow. So we do think that will be a substantial part of the growth moving forward but we also want to measure our competitiveness by our market share.

We have a team that is out there, super energized and looking to take share as well. So more of that to come in the future, but just too early at this stage.

Yes, I'll take the second question there with the update and what are we going to be looking for. So the bar is evolving initially with the all-comer in 189 or 42. There is now emerging evidence perhaps that the K12 -- G12C mutants may perform less well than the all-comer. I think a way to look at it is as this evolves and shows what we're going to be seeing this information in peer-reviewed journals coming up, we would anticipate a significant improvement over what we've seen historically so that we have confidence moving forward in the first-line studies in order to initiate Phase III trials.

The next question comes from Michael Schmidt at Guggenheim.

I had one on your strategy for adagrasib in colorectal cancer. It sounds like you did have the FDA meeting recently. Could you just fill us in a bit more on the feedback that you have received there and how we should think about the scope of the filing and also what needs to be accomplished before a submission later this year, as you mentioned.

Michael, I'll start. As we said that we're going to go ahead, we'll file for accelerated approval by the end of this year. We had a very good conversation with the agency based on the data that you've seen, that was presented at ESMO last year. So understanding what the requirements are for the accelerated approval pathway, we've got all that laid out, and now we just need to execute on it throughout the year, put together the dossier and so on. We also saw that we received Breakthrough Therapy Designation at the end of last year, which I think also speaks to the robustness of the data that we have in that third-line plus setting in colorectal cancer adagrasib combined with cetuximab. Alan, anything else you'd add?

No, I think you summarized it quite well. We're going to be working hard to get that stand and we're enthusiastic about the opportunity.

We would say that, that's just the beginning with colorectal cancer. We also have a KRYSTAL-12 trial on the way for second-line colorectal cancer as well. And as Alan mentioned, that trial is enrolling well in KRYSTAL-10. So we'll have that data in 2024.

The next question comes from Benjamin Burnett with Stifel.

This is Neil Carnahan on for Ben. When can we expect an update on more CNS data? And how important do you think that is to defining the drug profile in second-line lung cancer patients. And then as a follow-up to that, are you evaluating the adagrasib pembro combo and any frontline lung cancer patients with active brain mets?

Neil, I'll take the first part of that. So CNS, as you know, is -- continues to be important differentiator for us. But part of the overall picture of where the picture is really about overarching efficacy, including our overall survival response rates as well as CNS penetration. We are expecting to have a publication in the not-too-distant future, which will be out, will be an update to the data that has initially been shown and continues to show promising results for KRAZATI and I'll pass maybe to Alan for the second part of the question.

Yes. I believe the second part of the question was looking at the combination and frontline in CNS metastases. And I think the plan moving forward with K-7 initially, when you're looking at studies with these Phase II studies, you want to have the best group of patients possible. So that includes a stable and previously treated brain mets if they have them. We will, as we get more and more data, begin to broaden the patient population and take a look at that because we, of course, would have every confidence that with adagrasib working in the second-line setting, we'd anticipate efficacy in that frontline setting as well.

The next question comes from Eric Joseph at JPMorgan.

This is Noah on for Eric. Regarding 1719, is there a meaningful biomarkers for MTAP deletions and MTAP older biology that can be used to further enrich for patients with sensitive tumors? And also, is there a distinction between targeting MAT2A versus PRMT5 and MTAP-deleted cancers?

Sure. Yes. I think I would say we are looking at 2 types of biomarkers. One would be to understand whether there are patients that could be further enriched over and above MTAP gene deletions. For that category, I would say we do not yet have insight. We mostly have pre-clinical data where we've done some molecular profiling, and we continue to study the biology of MTAP-deleted tumors, including things that are associated with the PRMT5 mechanism like RNA splicing p53 status. And otherwise, we will continue to study those in patients.

The second class of biomarkers will take a look at -- are those that give us insight towards the level of target inhibition that we could achieve in patient tumors. And here, we believe we want to be at a 95% inhibition level for as much of the dose interval as possible. There will be looking at symmetrical dimethylarginine as a target-driven biomarker, and we plan on doing that as the program advances.

Then finally, you touched on PRMT5 versus MAT2A. And I think as you know, there has been some MAT2A data out there reported previously by Agios, now Servier is developing that molecule. Ideaya has commented publicly on their program as well. I'd say really, the key difference here is that we believe that in MTAP-deleted tumors where PRMT5 dependency is present, you really have to suppress the target biomarker. Again, this is known as SDMA to the full degree to drive antitumor activity. And I believe that this is a more precise way in this tumor subpopulation to do this.

Just note that for MAT2A, when you affect cellular levels of methylation that you're probably affecting 20-plus methyltransferases. It's a less precise way with a different therapeutic index than PRMT5. We are looking at the possibility that you could combine PRMT5 inhibitors with MAT2A inhibitors but really no clear conclusion here. But again, for MTAP-deleted tumors believe that the most precise way to target consumers is through what we're doing with 1719.

The next question comes from Jason Gerberry at Bank of America.

I just wanted to get clarify. So as you're thinking about a Phase III program for your KRAS overall in the frontline setting, so it sounds like in the sub-50% PD-L1 expressing that, that could move forward a little bit more quickly and that perhaps you're more wait and see on some of the other segments in monotherapy, pending durability data in the second half. So just maybe any decisions as it pertains to moving into pivotal Phase III in the frontline outside of the sub-50% PD-L1 is a late 2023 decision on your end?

And then just on PRMT5, Tango is going to have some data here, Phase I data in the first half with their agent. And so just as you think about the molecules comparatively based on preclinical data that's out there, just your expectations, how you differentiate is the idea of your 70-fold selectivity, view as sort of where the key differentiation resides in the approaches.

Great. I'll start with the first line question and thanks for the question. I think a couple of important points about the first line. You're right that there are, in essence, almost 3 different subsets, the less than 1, 1 to 49 and the greater than 50%. We have K-7, which is the doublet that has shown safety and also some preliminary efficacy in that particular setting. And we will be taking another look at the data in K-7 in the second half of this year. That will allow us to provide information regarding the durability and also increased numbers of patients, so we have a more refined response rate, giving us a concept, an idea of how to move forward best in the Phase III space.

With respect to the speed with which you've talked about, we're really excited and anxious to work on both areas. The less than 50%, we're able to go a bit faster from an administrative perspective because that we modified K-7 be an amendment to be a Phase III study in that less than 50%. For the greater than 50%, it requires creating a protocol from scratch, but we are moving forward with administratively on both areas and are looking forward to the updated data in K-7, as I mentioned, in the second half of the year, so we'll be able to have a data-driven decision based on any and/or all of those particular cohorts.

Yes. I think to touch on the PRMT5 question. Again, what we believe is operative here for the second-generation molecules is the therapeutic index. And in our hands, pre-clinically, we want to maximize the level of target inhibition in tumor tissue. And really, again, with the biomarker here, we want to be almost that 98%, 99% plus inhibition level for the full dose interval to maximize the inhibition of the target and maximize antitumor activity.

This is one area where we believe the 70-fold selectivity for MTAP-deleted tumor cells relative to other normal cells that don't harbor the MTAP gene deletion is going to be very important to spare the mechanism-based. Bone marrow toxicity as well as some other tolerability issues associated with the first-generation inhibitors. And that's where we think we have an advantage over the published competitors at this point in time.

Finally, just to note that we're pleased in the clinical studies at the PK and tolerability for 1719 so far. This has been a very well-behaved molecule with respect to solubility, formulation, PK reproducibility and generally, we are continuing to escalate in the Phase I study, inching up, hopefully, towards dose levels where we'll start expanding but we are very pleased with what we see with respect to tolerability in our clinical study so far.

The next question comes from Michael Ulz at Morgan Stanley.

Maybe just a quick one on KRAZATI. You mentioned sales in December were driven by inventory stocking. Just curious, as we think about 1Q, should we anticipate additional inventory stocking?

Yes. As always, with the beginning of the launch, you see -- as you put the product out in the channel and not all the sales in the fourth quarter in December, we're stocking, but a majority of them were. We'll start to see demand really driving sales as we get into the first quarter. So more to come on that.

The next question comes from Yigal Nochomovitz at Citigroup.

I just had a quick one on the Phase III strategy in first-line lung, specifically for the PD-L1 greater than 50%. I was reading the recent February issue of cancer discovery, and specifically, there's an editorial on the February 6 entitled frontline promise for adagrasib-pembrolizumab combination. And in that piece, it mentions that Mirati's PD-L1 greater than 50 Phase III trial design will be ada plus pembro versus pembro. I'm just wondering if you can confirm if that is correct, because I do not believe you've discussed the specific design as yet.

Sure. So yes, happy to comment on it. So in the less than 50%, of course, the standard of care has been 189. And so that's why that study is designed with the doublet versus that triplet. In the greater than 50%, we've had preliminary discussions with the FDA that monotherapy for pembrolizumab is an appropriate control arm. And so therefore, the doublet would be -- would go up against pembrolizumab, as you've described. And so -- and as was mentioned in that editorial. So that is correct.

The next question comes from Maury Raycroft at Jefferies.

I had a question about the monotherapy confirmatory Phase III, the KRYSTAL-12. You've adjusted the study to allow crossover in patients once the PFS endpoint is achieved, which you expect in the first half '24. Can you provide specifics on what patients are getting after they failed docetaxel in the control arm and talk more about what ultimately gives you confidence you can succeed on overall survival.

Yes. So I think an important point for K-12 is the fact of having both PFS and OS as primary endpoints. And I think the important -- the most important aspect of that is that PFS is a primary endpoint that has been accepted by the FDA as a means for approval. And I think that's important for a couple of ways because of the fact that PFS is not going to be impacted at all by crossover and it will come in much earlier than the overall survival. So I think that, that's probably the key elements of that particular study, I'd like to emphasize.

The next question comes from Evan Seigerman at BMO.

I wanted to touch a little bit on your commentary around potential collaborators or kind of some business development as you were highlighting. Are there any gating factors in your discussions or kind of that you need to achieve before a collaborator would come in or you'd want a collaborator to come in? And can you maybe provide us some color as to how you're thinking about potentially structuring these partnerships, you out-licensing. I guess I'm trying to get a sense as to how you're going to continue the business moving forward with the launch and with a lot of trials ongoing.

Sure, Evan. What we would be looking for, and we've started these early conversations is an ex U.S. partner for adagrasib. So we have a U.S. presence. And we do not have an ex U.S. presence to this point. The marketing authorization application is going well. We expect third quarter approval. of adagrasib in Europe. So that's an upcoming event that we have.

The derisking event, really, which we wanted to wait until we have that event before we began the partner conversations was the FDA approval. So we're now behind that. That's behind us. So we're having conversations about through the right commercial and potentially development partner would be so we can maximize that adagrasib sales globally. So we're in those conversations now.

The next question comes from Ami Fadia at Needham.

I had a follow-up question on the first line part in the TPS greater than 50% by (inaudible) pembro versus pembro. You've indicated that you've had a preliminary discussion with the FDA. Is there anything additional that needs to be confirmed with the FDA? Or are you good to go with going ahead with the trial? And then that once you have the data, you -- submission there? And then just a follow-up on KRAZATI, how do we think about sort of the cadence of the launch, particularly in the first quarter. Are there any sort of factors outside of some additional inventory stocks about -- in the first quarter in terms of perhaps any kind of broader dynamics in terms of coverage and pricing.

I think I can take those. So regarding the TPS greater than 50% in the frontline setting, the comparator would be pembro because monotherapy pembrolizumab is the standard of care in that patient setting. So that would be the comparator. So our plans would be, assuming the data continues to mature as we hope it does, it would be a combination of adagrasib plus pembrolizumab versus pembrolizumab in that trial, as Alan mentioned, and we've had those preliminary conversations with the agency. So let's wait for the data to mature. And before we make the -- we pull the trigger on moving forward on that Phase III program greater than 50%.

But in the meantime, we're doing the groundwork, as Alan mentioned, now to prepare for success. Regarding the launch of KRAZATI, we'll share this information in the very specifics of how the launch is going in Q1 at the Q2 earnings call, and we'll walk through those metrics. So sales and share and access and so on. We were just approved in mid-December. So we -- it's very early weeks at this point, but we're excited to share the information.

The next question comes from Kalpit Patel at B. Riley Securities.

This is Andy on for Kalpit Patel. Regarding your exploratory combination of chemo plus adagrasib plus pembro in frontline NSCLC, can you give us some color on what doses of adagrasib you are starting with to try and limit toxicity from the triplet and then when should we expect initial data from this exploratory combination?

Thanks. So this is going to be -- it's a study that's just getting started. We're going to be looking at the adding, as you mentioned, they have adagrasib to 189. We'll do it in a sequential fashion, adding to the maintenance portion first and then if tolerated bringing it up forward to the concurrent. We anticipate being able to utilize the 400-milligram dose starting. That's the combination with adagrasib and pembrolizumab, so we'll add that to the chemotherapy at that point, and we'll be doing it, of course, in the usual Phase I fashion.

The next question comes from Jay Olson with Oppenheimer.

For 1133, can you talk about any lessons learned or read across from Revolution Medicines preliminary data last night, which included some G12D patients and then for sitravatinib, can you just talk about your expectations for the SAPPHIRE readout in the second quarter? And since you're focused on a lot of KRAZATI, are you doing any free launch plan for sitravatinib given the similar indications for sitra and KRAZATI?

Yes. I think regarding RevMed, we are paying attention to what they're doing, but we'll probably not comment on RevMed at this point in time. Other than to say, we continue to be excited about advancing 1133 into patients here imminently and we also continue to explore in the pre-clinical setting different types of KRAS inhibitors, including those that inhibit different spectrums of mutations including the G12V mutation, G13D and Q61 mutations. So we will be continuing to pursue this. And when appropriate, I can update on that one.

And on the sitravatinib question, as a reminder, we'll see the final analysis for the SAPPHIRE study in Q2 of this year as events are tracking as expected. In regards to any of the prelaunch work, I think the learnings will take for launching adagrasib will be key here. We have a very experienced lung cancer team. And we believe that we'll be able to leverage the existing team and existing infrastructure to be able to launch sitravatinib, but a high degree of expertise as well as at a high rate. So no need for a lot of market building in that front that we think the mechanism is pretty well recognized, and we have the team in place to and hopefully on the back of a positive study, move to file and then ultimately promote the product very quickly.

There are no further questions at this time. Mr. Meek, I will turn the conference back to you for any additional or closing remarks.

Thank you, Cynthia, and thank you, everyone, for joining us this afternoon. We appreciate your interest in Mirati, and we look forward to sharing additional updates with you.