Whitehawk Therapeutics Inc (WHWK) 2024 Q1 法說會逐字稿

Good day and thank you for standing by. Welcome to the Aadi Bioscience first-quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Once again, please be advised that today's conference is being recorded. Now, I'll turn the call over to [Audrey Gruls], Head of Corporate Communications for Aadi Bioscience. Ms. Gruls. Please go ahead

Thank you. Good morning and welcome to the Aadi bioscience conference call to provide an operational update and review results of the first quarter and full year 2024. On the call is Dr. Dave Lennon , our President and CEO; Scott Giacobello, our CFO and Chief Medical Officer, Dr. Loretta Itri.

Today, we will provide an overview of operational activity and select financial results for the first quarter and full year of 2024. We will open the line for questions at the end of the call following closing comment.

A quick reminder that statements made on the call today will include forward looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our annual and quarterly filings with the Securities and Exchange Commission, which can be found at www.sec.gov or on our website at www.aadibio.com.

In addition, any forward-looking statements made on this call represent our views only as of today, May 8, 2024, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements.

With that, I'll turn the call over to Dave for his opening statements. Dave?

Good morning, everyone, and thank you for joining us today to review our financial and operational results for the first quarter of 2024. At Aadi, we're focused on unlocking the full potential of mTOR inhibition by uniquely combining nab technology in the potent mTOR inhibitor sirolimus.

We believe nab sirolimus has the potential to deliver deeper inhibition of the mTOR pathway and ultimately better outcomes for people living with cancers that are dependent on that pathway.

Today, I'm pleased to announce that our registration intended PRECISION1 trial is now fully enrolled across a broad array of tumor types. This is an important milestone as we seek to understand the potential of nab sirolimus for patients with solid tumors harboring either TSC1or TSC2 in activating alterations, sizable market.

Our latest internal analysis indicates there are approximately 16,000 patients with these mutations across a variety of tumor types with mutations roughly evenly split between genes. Each mutation represents a potential multibillion-dollar total addressable market for nab sirolimus.

TSC1or TSC2 driven cancers are found across a wider range of tumor types clustering in lung, gastrointestinal, general urinary, breast and gynecological locations and are often difficult to treat. We believe PRECISION1 is a cutting-edge trial testing our innovative therapy nab-sirolimus in these cancer.

Although PRECISION1 is designed as a single trial, each arm is independently evaluated, providing us with the ability to assess one arm separately from the other. Given this design, PRECISION1 can effectively be viewed as two separate studies, each with its own outcome.

As a reminder, in Q4, we provided top line results from a planned interim and evaluation of the first 40 patients enrolled in PRECISION1. These data demonstrated sustained tumor reductions in a heavily pre-treated population based on investigator-assessed responses in the first 40 patients across both arms.

Of note for the TSC1 arm, we reported an investigator-assessed overall response rate of 26%, which was within the range of our expectations. These responses appear to be very early deep and durable, which is especially noteworthy, given this heavily pre-treated population with a median of three prior lines of therapy.

Lastly, these responses were seen across four different tumor types potentially supporting a tumor-agnostic indication.

I want to highlight that ongoing conversations with experts reinforce our view of the clinical significance of the responses we reported from the first interim analysis, especially in the late-line treatment in both patient groups. We continue to believe that should these results hold or improve in larger for patients, we have a path to submission and potential approval for TSC mutations.

With the trial now fully enrolled, we remain on track for our next planned interim readout, which is expected in Q3 of 2024. This highly anticipated analysis will include a total of 80 patients who have been followed for a minimum of six months and will evaluate the primary endpoint of this study, independently assessed overall response rates, as opposed to our December interim analysis, which reported investigator-assessed responses.

Looking ahead, we expect the study to be completed by the end of 2024 with full data in 2025. In addition to PRECISION1, the Phase 2 trials for two promising mTOR driven cancer targets continue to enroll well. As a reminder, on these two trials, the first is evaluating the therapeutic potential of nab-sirolimus in advanced or recurrent endometrioid-type endometrial cancer or EEC, in combination with the aromatase inhibitor, letrozole.

Endometrial cancer is the most common cancer of the female reproductive tract and one of the few cancers with increasing mortality. There is an estimated 10,000 cases of EEC diagnosed annually in the US alone. Prior clinical studies of mTOR inhibitors combined with letrozole have yielded promising results and recent changes in the recommended standard of care for early-stage disease creates a potential opportunity for this combination to be used in the first and second line settings.

The second trial is evaluating nab-sirolimus in neuroendocrine tumors or NET. NETs are rare, but approximately 3,500 cases a year. NETs have a historically low response rate to the treatment with oral rapalogs and other agents, which nonetheless are used clinically and recommended in treatment guidelines.

In pre-clinical animal models nab-sirolimus has demonstrated improved target suppression relative to other mTORs, warranting further exploration of nab-sirolimus in the clinical setting for NETs.

We're excited about this trial because it provides the opportunity to demonstrate what we believe is nab-sirolimus is best in class efficacy in a known mTOR sensitive tumor types. Overactivation and dysregulation of the mTOR pathway is commonly found in various tumors and the unique delivery and excellent safety profile nab-sirolimus provides the opportunity to combat these difficult to treat cancers.

As such, we think these are promising indications and are eager to present initial data from these open-label studies later this year.

As a final update to our development plans, today we announced that we are terminated our collaboration and supply agreement with Mirati now BMS. That was evaluating the combination of its adagrasib KRAS. selective inhibitor and nab-sirolimus in KRAS-mutant non-small cell lung cancer and other solid tumors.

At our request, we mutually agreed with BMS to discontinue this early stage trial, which enables us to prioritize the evaluation of nab-sirolimus in our ongoing Phase 2 trials for the promising indications of EEC and NETs.

Turning now to FYARRO. FYARRO, continues to perform well with net product sales for the quarter of $5.4 million. For a bit of context this is a decrease from prior year and reflects Q1 changes in distributor ordering patterns and fewer new commercial patient initiations in Q1 than historical average.

Swings and what is actually a very small number of patients may be due in part to cannibalization of top accounts, where we're seeing robust enrollment into our current clinical trials. We believe this will correct itself in subsequent quarters, and we expect a return to sales growth in Q2.

FYARRO has cemented its position as the preferred treatment for malignant PEComa after just two years on the market. We have high penetration across academic and community settings and have seen the consistent addition of new accounts ordering FYARRO every quarter.

Now with more than 200 accounts ordering since launch. We are proud of the impact FYARRO has had and will continue to have for patients with this rare and aggressive cancer. With sustained commercial success of FYARRO cash runway into Q4 2025 and a catalyst heavy 12-months ahead of us. We are well-positioned to realize our ambition of becoming a multi-indication precision oncology company.

I will now turn the call over to Scott for updates on our financial progress. Scott?

Thanks, Dave. We ended the first quarter 2024 with $88.3 million in cash equivalents and short term investments. Responsible capital management, including measures implemented in early 2024 to streamline our operations and reduce costs, continue to support a healthy balance sheet that will fund operations into Q4 2025 based on current plans.

FYARRO net product sales were $5.4 million for the first quarter, representing an 8.8% decrease from the prior year period. As Dave mentioned, this decrease was due in part to distributor ordering patterns in Q1, which we expect will correct in future quarters as well as lower commercial patient initiations.

Research and development expenses for the quarter increased to $13.6 million compared to $11 million in the prior year quarter. This increase is primarily related to the continued progress of the ongoing PRECISION1 trial, which is now fully enrolled and the programs in endometrial cancer and NETs.

Selling general and administrative expenses for the first quarter were $10.6 million compared to $11.2 million in the same period in 2023. This decrease is due mainly to reduced legal and consulting expenses versus the prior year, offset in part by severance costs related to the streamlining of our operations.

Net loss for the first quarter was $18.3 million compared to $15.2 million in the first quarter of 2023.

For more information on our financial performance in the first quarter and detailed discussion of results reported on this call, will be provided in our Form 10-Q to be filed later today.

And I'll now hand the call back over to Dave for his closing comments. Dave?

Thanks, Scott. I'm proud of the strides we've made already this year. We're making tremendous progress against our clinical development plans with two sizable markets and TSC1 and TSC2 and activating alterations as well as other mTOR driven cancers. We look forward to providing the highly anticipated two-thirds interim analysis from PRECISION1 in the third quarter and sharing an early look from our Phase 2 trial later this year.

Now we can open the line for questions. Operator?

Thank you. At this time we will conduct a question and answer session. (Operator Instructions)

Roger Song, Jefferies.

Great. Thanks. Thanks for the update and taking our question. Maybe just quickly on the EEC and NET. I'm curious about the and the expectation into the initial data readout later this year?

Particularly, the on the patient numbers and how much efficacy we're going to see versus the safety and et cetera, how meaningful that data update will become? Thank you.

Great. Thank you, Roger. So on the EEC and NET trial, remember that these are a two-part Phase 2 studies and the initial part, once we enroll approximately 10 patients in each trial. We anticipate we'll be able to report out on early efficacy data and safety data on those initial part ones by the end of this year. Loretta, anything you would add to that?

Only that the recruitment is going well. And as anticipated, and I don't think we're going to have any problem or reaching the incident have been determined in Simon's 2-stage design. So yes, I think we're on target to report out results as Dave just mentioned.

Yes, Roger we're very much we're very encouraged by both of these trials on both because there's been great interest in the community in these combinations and exploring the potential of nab-sirolimus to improve upon what has been seen before with prior mTOR inhibitors in these both of these spaces. So and hopefully, we'll see that pull through as we report out the first parts of this data.

Yes, thank you. That's very helpful. In terms of the FYARRO the sales trajectory, understanding the 1Q seems that a bit kind of out of compared to historical average, but any color around the parameters in terms of the first-line use duration on treatment, and there may be some repeat dosing for those that are existing patients? And maybe also curious to what's the feedback from the field from your precision results, I mean the main impact to the FYARRO sales. Thank you.

Yes, so two parts to that in a sense. So let me cover first. On the parameters we look at in terms of PRECISION adoption, awareness of first-line usage, et cetera. All of those were extremely strong for us as late as we've looked at that data. And so we see no real changes in the communities of attitude towards FYARRO and its use in PEComa.

We are in a more steady-state situation with incremental sales growth and we expect some variation and quarter to quarter to occur. And as I think we indicated a little bit in Q4, we expected Q1 could be a lower quarter for us in the course of this year.

Importantly, we remain even though the adoption remains very robust and it's really a small swing in new patient starts that has impacted FYARRO here. About half of that impact is driven by what we see in demand with new patient starts and some of our largest centers. These also correlate with the largest centers where we've enrolled a large number of patients in PRECISION1 over the course of the last six to nine months.

And recall that we, as usually anywhere on 90 patients commercially on drug at any one time. And over the last nine months, we've recruited 80 patients into the PRECISION1 trial. So typically clinical trials aren't of the same scale and magnitude as the commercial business.

But in this case, that is we're more aligned in terms of what we're doing in the clinical trial side versus what's happening on the commercial side. Maybe I'll just let Scott talk about on a distributor situation, and then I would like to go to Loretta to talk a little bit about the physician responses to PRECISION1?

Yes, sure. Thanks, Dave. Yes, on the on the inventory side, as we noted, we saw some swings in distributor inventory in the quarter, which is unusual -- we're at an unusually low level at the end of Q1 based on what we've seen in recent quarters. And so we do expect that that's going to that's going to work itself out over the next few quarters.

And then Loretta, I just want to comment maybe on what we saw from investigators on the PRECISION1 interim results and their response and particularly how that led through to recruitment?

Well, the responses that we saw at the first interim actually have had virtually no impact on our accrual. The community remains very supportive of this study. We didn't miss a beat. And frankly, given the very advanced stage of many of these patients, remember that the median of prior therapies was 3 to 3.5 with many patients having received more than 5 prior regimens.

So to the community that treats these patients, the responses that we saw look pretty good and so everyone remains enthusiastic and we have not missed a beat in terms of our accrual, in fact, we had a small uptick. I don't know. I don't know if that's what you wanted me to say Dave. But that's the reality.

I always want to say the reality, Loretta.

Thanks, Roger. Any other questions?

No, that's helpful. Thank you. Thank you for taking the question.

Thanks. Operator, next question?

Joe Catanzaro, Piper Sandler.

Hey, everybody. I appreciate you taking my questions. Just have a couple of quick ones. Maybe first, following up on the FYARRO sort of commercial dynamic. I guess I'm trying to understand this cannibalization sort of phenomenon that you're describing, it sounds like, and maybe I'm just misunderstanding it.

But it sounds like you're saying enrollment into PRECISION1 pulled away commercial PEComa patients. I'm trying to understand why that's the case, if that's the case. And maybe I'm just totally misunderstanding it. So any help there appreciate and I have maybe one or two follow-ups.

Yes, sure. So Joe, it's hard for us to tell exactly what patients and up where. What we saw is that the orders coming through. This is an IV product and therefore, we don't get on physician level data, We get institutional level data. And what we saw was a correlation between reductions in commercial business at some of our largest accounts that often were highly correlated with our PRECISION sites with some of our largest enrolling PRECISION sites.

At a patient level, we don't know exactly how that plays out. But we would anticipate that maybe a few of those patients were on and spontaneous use like non-performer patients that were being treated commercially and that physicians took the opportunity instead of enrolling those patients in a commercial on a commercial basis may have enroll them into the clinical trial.

So it's not PEComa patients into the clinical trial. That's obviously an exclusion criteria in this case. And remember that we're talking about swings of 10 patients that create the gap that we saw in Q1 or less 10 patients or less that create the gap that we saw in Q1.

And so it takes very few sets of decisions, actually just swing the business that way. And so now with some precision, fully enrolled, et cetera. The only option for patients that are looking for that last line opportunity in a non-promoted indication would be to go back to that commercial business.

Okay. Got it. That that's helpful. Maybe just two quick clinical questions. I know you guys have said this would be your expectations, but wondering if you could confirm that within PRECISION1, the sort of baseline features for the full population aligns with the first 40 patients, meaning heavily pre-treated, diverse set of tumor types. And then for the G12C decision to terminate that. Was that based on any data that has emerged out of that trial? Thanks.

Sure. So the -- on the baseline population, we met -- from what we can see it's consistent with what we've seen before, but obviously, we haven't fully evaluated the data to that. And that will only come when we do the interim analysis on the fully cleaned and completed dataset.

And on the Mirati decision, that decision had nothing to do with efficacy or safety that we saw in that trial. And in fact, we have very little data from that trial so far, and it's more -- it's very much a financial and strategic decision to focus on the endometrial program as well as in that program. We're really excited about the potential for nab-sirolimus in those indications.

Thanks, Joe. Any other questions?

No, thanks.

Thanks, Joe. We'll go onto next question.

Tara Bancroft, TD. Cowen.

Hi, good morning. So just want to follow up on the last question that Joe asked. So how much difference in cost saving can we expect now over the next year or two now that you're ending this agreement?

Sure. Scott, do you want to comment on outlook for spending?

Yes, Tara, thanks for your question. Yes, we haven't shared that information-- specific information on the individual program. There will be savings, but we haven't we haven't shared that information.

Okay. Thanks

Thanks, Tara. Anything else?

No, I'm good. Thank you very much.

Operator, we can move to the other questions.

Ahu Demir, Ladenburg.

Good morning. Thank you for taking my question. Two from us. First one, a follow-up to Roger's question. Could you provide more guidance on the EEC program? What are the benchmarks and what would success look like in this interim analysis for this setting?

Super, thanks for the question, Ahu. Loretta, would you like to comment on that?

Sure, good morning. (multiple speakers) -- Hi, how, are you Ahu?

So, this is a Simon's 2-stage design. And the first cohort is 10 patients. And we're pretty far along in accruing those folks. And the second -- the second portion will be an additional 19 patients for a total of 29 patients in the study.

It's designed to show that on the basis of overall response. We're looking for a response rate that exceeds 20%. And our expectation, of course, is that it may be higher, but that would be that would give you the kind of guidance I think you're looking for.

That sounds great. Yes, thanks for that, Loretta. My second question is regarding the Mirati collaboration. Based on our scientific understanding, there's a strong rationale between albumin uptake also, therefore, nab-sirolimus uptake in [RAS] mutated cancers. So curious if you will be obtaining the clinical data and do you plan to pursue this setting in the future? Any RAS mutated cancers when any accurate on that side?

I think, Ahu we will see how the data comes in on the patients that were enrolled in the trial and make that decision at a later point in time. Right now, we have no plans to expand into that area.

Got it. Okay. Thanks for taking my questions.

Thank you, Operator, any other questions?

I'm showing no further questions at this time. I'd like to turn it back to Dave for closing remarks.

Great. Thank you. Thanks, everyone, for joining the call this morning, and thanks to Scott, Loretta and Audrey for supporting this. And I wanted to remind everyone that we really had great progress over the course of this year, particularly around our clinical study and development programs.

We have now fully enrolled our PRECISION1 trial and look forward to our two-thirds interim analysis in quarter three of this year, which will be a major milestone for us in determining where we go next with TSC1 and TSC2 mutant cancers, which are really large opportunity for us to expand nab-sirolimus portfolio.

We're also really excited about the progress we've seen EEC and NETs enrollment and look forward to an early updates on those programs later this year. And then finally, we expect to return to growth for FYARRO in Q2 of 2024 and look forward to sharing updates on that as we progress our commercial business.

Otherwise, thank you for joining the call today, and we look forward to further updates as we go through the year. Thanks everyone. Bye, now.

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