Array Biopharma Inc. (NASDAQ:ARRY)
Lazard Annual Healthcare Conference Transcript
November 13, 2012 11:00 AM ET
Ron Squarer - Chief Executive Officer
Kevin Koch - President and Chief Scientific Officer
Ryan Martins - Lazard Capital Markets
Ryan Martins - Lazard Capital Markets
I'm Ryan Martins, I'm a biotech analyst here at Lazard. We are please to have our next presenting company, Array Biopharma. And to give us an update on the company we have with us here the CEO, Ron Squarer.
Good morning, everyone. It's good to see some familiar faces here in the room. We had a very very exciting week last week, and I'm glad to be here to be able to provide you an update, not just on the progress of the company but as you know we did raise additional money at the end of week last week to support the programs which we are very - continue to be excited about.
I am going to be making forward looking statements related to forecast for a full discussion of risks please see our 10-Q and 10K. As many of you know, we are still planning to have the possibility of entering with 5 products into pivotal trials next year, across our portfolio. We'd be reviewing what those area.
As of Monday last week we had another product going to Phase 2, and so we have a total now of 11 phase 2 programs 8 of which are currently partners. And partnerships have been an important of our strategy, and helped us to raise as much as $170 million in non-dilutive financing just in the last 2 to 3 years.
Our current partnered pipeline has associated with the $3.6 billion in potential milestones before royalties and may of our deals, do include double digit royalties. We ended the quarter, the last quarter call at $68 million in cash we raised an additional $66 million at the end of next year, the use of those proceeds were to invest in our wholly owned Hem/Onc portfolio which I've been talking to you about for some time.
But we do also have additional sources of non-dilutive financing through the partnership potential for our pain program, 797 as well as our asthma program which I'll touch on just a bit today, raise value really can be divided into three buckets on slide four at the MEK inhibitors, which historically have been a focus of investors and we saw progress on Thursday with Novartis committing to it's registration pathway for MEK162.
Increasingly we've been focusing with investors on the progress we're making on 614 and 520 both of which had abstracts published last week and we'll have sessions at ASH in December so we're making great progress on both of those. And of course, our existing partnerships we've quite a long tail that continues to make progress as well as two additional potential future sources of non-dilutive financing that I mentioned earlier.
If you look at the entire portfolio, on the right you'll see the dark-green on slide 5 in hashed green, those are our wholly owned programs, in the upper left corner you'll see the five potential phase 3 starts between now and the end of next year. And that we believe is going to drive very very significant value going forward. But as well our partnerships continue to progress as expected.
What I'm going to talk to a little bit about is the news that Novartis committed to moving forward not only in NRAS Melanoma but also in BRAF, so that's 20% and 40% of melanoma respectively.
Talk to you a little bit about the Selumetinib/MEK update at ESMO and some other progress there. ASH abstracts are out, I've listed them here. But they relate to the single-agent beta in heavily pre-treated patients but also what benefit dex showed the use of a bio selection marker and additionally as bit of an update on Carfilzomib with 614 the focus is more on PK and PD.
As someone told me to talk about the Pain program which you may recall in over the summer we presented a positive Phase II study statistically significant versus placebo on top of NSAID and comparable to the oxycodone arm. This abstract provides a little bit more detail on that efficacy data over time. And it also points for the first time to disease modification markers associated with bone and cartilage degradation. So in that abstract which is actually up and I think it was presented today.
We saw decreases of 10% and 38% respectively in COMP and CTX-1 at week 4 and those are as I mentioned biomarkers related to bone and cartilage, also this would be an unprecedented results where you've got a very active analgesic that also appears to have disease modifying properties and look forward to seeing that profile emerge thorugh a partner.
We're going to focus today a bit on our wholly-owned Hem programs, which of course we've put a lot of new information out. I'll start with the opportunity in MDS. A very large disease, about a 153,000 patients and these patients typically suffer from multiple cytopenias. The population that we're focusing on low-risk int-1 as you can see on the left represents a majority of patients. They tend not to have blast counts or high-blast counts for per ten, they just do suffer from cytopenias and ultimately tend to pass from the complications of the cytopenias or the treatment supportive care, treatment for those.
Once failing HMAs, there is no approved medication and we are studying HMA failures currently with a plan to go to the FDA this year as we committed to discuss our forward plans.
Our prior formulations presented at ASH last year, pointed to, on slide 12 a nearly 40% response rate, this is on patients we'd expect now spontaneous hematological improvement but what's really interesting is it, in two thirds of patients, two or more cytopenias actually improve and right now we are in the clinic with our new formulation really designed to be more bio-available, and have lower inter and inter-patient variability. We're already testing the new formulation at higher doses than you see here we reformulated because of capsule [burden] at 1200 milligrams and so we are pretty much now in a position to pick a dose and we expect it to be higher from an equivalency point of view as the prior formulation.
I'm going to just point out that the ASH abstract on, I'm just sprinting to ASH abstract simply confirmed that we are in fact two to three times more bio-available and that we have reduced intra and inter-patient variability. We maybe in a position to talk a little bit about how the efficacies emerging in ASH but that data really doesn't fully mature until next year – beginning of next year. But certainly moving in the right direction they are with our plans to meet the FDA this year as we committed.
The goal is to pursue, hematological improvement as a primary endpoint to full approval but we understand that another option would be to use HI as a (inaudible) point and then run a [contributory] survival study with leads there's a very strong evidence for the relationship between hematologic improvement and the survival in this population.
Moving on to slide 20 also very large population about 120,000, patients we are initially studying this later stage heavily pre-treated population which is the bulk of patients in that category. So 520 is KSP inhibitor, a unique mechanism the fact that it is a unique mechanism, is important for two reasons.
One we believe it holds promise in heavily pre-treated patients and I'm going to show you the data that appears to support that hypothesis. Also we believe that since most of the other molecules that are being introduced are in fact just same as the existing mechanisms whether IMiD or proteasome inhibitors, here we have the potential to add synergy to existing mechanisms and we're running both the Carfilzomib and a Bortezomib study now and we will see the results as that data emerges.
Here's a summary of the history of the data and what we're showing in that so. So if you look CArfilzomib column there they have shown about 15% response rate in patients it's mono-therapy just going back, ASH last year we showed our single agent data we've updated it at ASH this year. We're at about 16, so let's just say comparable to Carfilzomib. But we know that dex can help and in the ASH abstracts and at the meeting you'll see the results of 520 plus dex, here at 22% response.
Now what we know from the recent Carfilzomib ODAC and approval is if here in the 20s, with eight night month duration we believe there's a path to accelerated approval in this diseases. And we would expect to pursue that, but in addition we showed data on the use of a selection biomarker, AAG.
And in by using AAG we would now predict a full 33% response rate which is quite impressive in this population. Impressive also because we have focused on heavily pre-treated patients are going back to the DEX data [commensurate] with effects, our patients saw a median of 10 prior therapies, which is really quite unusual, most drugs in this population had been studied with roughly five prior therapies. So we're at a full 10 and yet showing strong response rates we believe due in part to the unique mechanism. So very excited about that.
AAG the way it works is it is present in normal levels in a lot of multiple myeloma patients however, there is a subset about 30% that have unusually high elevated AAG, we know that AAG can [tightly] decreased 520 making it a less likely to be impact the disease in those patients, doesn't bind in the same way to other marketed and multiple myeloma drugs but this effect has been shown with other drugs and like (inaudible) in the past with AAG. And so by eliminating those patients or by selecting the patients with normal levels of AAG we believe we are maximizing the value and response to 520. We're encouraged then in fact it is a relatively large population that stays in and should help with the commercial value for the product.
I mentioned we're going to FDA for 614, this year we'll be going to FDA not too far after that for 520. And our approach at this point, because our DEX data fully matures early next year along with the Carfilzomib combination data that we would consider DEX path for accelerated approval and Carfilzomib the second study if we seen the kind of synergy we would expect in Carfilzomib with Carfilzomib in combination which we'd see an improvement over Carfilzomib alone that would represent very significant value given that we would get used to where Carfilzomib is used.
Now we're also running a trial with Bortezomib, because it reads out later and assuming that Carfilzomib and Dex's positive we would probably go forward and then look at the Carfilzomib data as it emerged.
So I'm just going to skip forward to the MEK inhibitors at this point. So I'm now, on slide 25, folks are familiar I imagine at this point that MEK is very active along the RAS, RAF and our pathways and has shown as a result the quite active and a broad numbers of tumors, I'll touch on that a bit today.
Here are the tumors that are have the RAS pathway involved, quite large, certainly you've heard a lot about lung but in ovarian and the various forms of melanoma are also sizable markets and we've seen data even beyond these tumors which we'll touch on in a second.
At ASCO last year we did see very impressive results with Selumetinib in KRAS mutant lung. Just to remind you, more than doubling specifically significant improvement in PFS. Also a very strong improvement here, nearly doubling of survival. Strong data in thyroid resensitizing patients through radioactive iodine 71% response rates, with Novartis the data was very strong in NRAS with a very high response rate in a population that hadn't responded historically to other drugs.
So with AstraZeneca specifically the, there is a couple points of news, let's move forward through the data so we have time for questions here. We – the news is that at ESMO last month in Vienna Slide 30, they showed additional data around patient reported outcomes in that lung cancer trial. Also very, several very strongly, statistically significant not only reinforcing activity of the drug, but also pointing to the benefit that patients receive from selumetinib.
And all I'll say is that they have also on selumetinib completed their, what they are calling Phase 3 formulation, which we believe was very limiting for them to start their next series of trials. They completed that, it was on and we believe they are now a formulation they can go forward with.
They also have a new leader in Pascal Soriot, a very oncology focused executive coming up through Roche and Genentech, and what we are hearing from the company its really accelerating activity there at the Company around selumetinib. I will remind you that AstraZeneca did launch their own thyroid drug last year and so they have a field force, very active relationship with investigators and institutions and looking at the thyroid data I referred to earlier maybe a second path to market in addition to KRAS..
Moving on to Novartis, I [am wanting] to pause and remind folks that while the AstraZeneca relationship is very valuable to us, double-digit royalties, significant milestones remaining in the deal. The royalties associated with Novartis especially in the US are actually quite a bit higher. So very, very impressive royalty stream for us in the US, detail rights and the right to pursue our own registration path where we are capped with annually and in total at a very reasonable level.
This is the slide from the presentation last Thursday from Novartis, indicating their plans to move forward in NRAS reviewing the data. And coming into that they also at the same meeting indicated their interest in moving forward and a registration path with LG-818 which is their only DRAS inhibitor and one which they believe is best in class. As you can see they continue to pursue combinations with PI3Ks.
They have three of them. They highlighted the use of the PI3K combo in KRAS lung cancer at the meeting, but I think they are going to wait for the data to emerge in order to determine how to move forward. But we are excited to see them in clinic, rather they continue, planning to go into registration trials next year, while still pursuing a number of combinations in other diseases.
So, a lot of, a lot going on in that group, pleased to get that news out last year, just to remind folks that we do have two more sources of non-dilutive financing in the pain program and the asthma program, which we saw around [ATS] next year in May. CRTh2 assuming a positive result. There is a number of companies that have already expressed interest in that mechanism.
We talked about our cash at the end of the last quarter and the fund raised. So I think we have covered that, just to point to the kind of value that Array has seen from its partnerships. In a great last year we entered into a deal with Genentech for check one cancer agent now in Phase 1.
It was preclinical of the time, $30 million upfront, almost $700 million in milestones in double-digit royalties. The Novartis agreement some couple of years back, high upfront this is on Slide 38, over 400 in milestones and than double-digit royalties. I am sorry, that's the Novartis 162 deal and as I mentioned those are high double-digit royalties.
Amgen a very rich deal, 60 upfront, 670 million nearly in milestones and double-digit royalties paid in milestone a few months ago. The recruitment in there kinase Phase 2 trial. We expect them to be rewrapping that up in the near future and we would look forward to them moving forward. But this gives you a sense of what the asthma in pain program may bring in. To review, while these are only products that Array is involved in developing 39. So selumetinib is not on here, although we'd believe that AstraZeneca continues to move forward.
You see the ASH data for two wholly owned Hem/Onc programs and then we full read out first half of next year with the potential to enter Phase 3 with both of those next year. With regards to MEK162, we have already seen the announcement of our plan to go into registration trials. I would say also in the first half of next year and then we discussed partnering timing for both 797 an 502.
I think that concludes really the presentation. Again progress across our wholly owned products with the ASH data, MEK inhibitors with the Novartis announcement and the positive discussions that we continue to have with AstraZeneca, continued progress on partnerable products like 797, we'll see disease modifying data. So, very exciting week, we have the cash to perceive the value of our wholly owned programs with confidence and so we feel very good about the prospects for the future.
We have Kevin Koch, our CSO and Mike Carruthers, our CFO here today and we're happy to take questions.
Ryan Martins - Lazard Capital Markets
Ron, you have about six minutes for Q&A session.
Yeah, maybe Ron just couple on the -- what's the context again for the reformulation study.
Yeah, it s a commercial form for manufacturability, it's not scientifically important, it's just, it's really more of a manufacturing issue. And so it was on the critical path for them, because it's the form presumably they would commercialize, they are done with that now. And we are hoping with Pascal's arrival that they will be signaling either in December, they may have an R&D there and January typically that's what AZ did. Thus that they would signal how they move forward. Certainly people are looking at KRAS lung, but – and also at thyroid, but they continue to go ahead and generate data with the drug, mostly which is not in the public domain, but we would certainly happy to see any signals for them, given that Novartis has come out, as well as take the ground.
You know about 30 right now actually the third we are talking out of (inaudible).
And just on 520, I know you touched upon actually is the cool pathway. So 520 plus dexamethasone, specifically 520 plus dex in the AAG positive patient population. Ron, I know you said the opportunity a couple in the dex?
Yeah, we haven't committed to a specific pathway yet and we want to discuss with FDA. We do feel that the dex data alone appears to be sufficient to get accelerated approval using the precedence of carfilzomib. And we do think AAG will be a important part of that trial, but we haven't committed exactly to how we are going to be using it, you know whether its secondary endpoint or other. But it will be – we believe it will be an important part of that registration path.
And just to confirm you said about 30% of patients expressed AAG?
About 3,300 patients are known to have unusually high levels and in fact in the data, I believe none of the over expressing AAG patients responded. The response is of course were in the normal AAG levels. So it looks like a quite striking result and we pick the level which is essentially the, lets consider it normal for AAG and would like to select to those patients who are normal or below.
Is there any questions in the audience, just a follow-up on that again. On AAG how does the expression vary depending on what your prior treatments may have been, does that change??
It does not change, its one paper as discussed AAG and levels in multiple myeloma About a third of the patients have elevated AAG, but it's not a prognostic factor, so you can have variable levels and is not necessarily mean that you progress more rapidly. Interestingly with both those attacks on or less effective at lower response rates and narrow high levels of AAG and less effective at lower response rates and their high levels of AAG can same old population awards in used case (inaudible).
Depending on the outcome on the press release can you just talk about the size of the trial and the length of the trial depending on what the endpoint might be?
Yeah, maybe we'd give Kevin a microphone. Well just in case anyone is listening in…
So, building a [solid approval] aspect ratio. I would be somewhat smaller and we did this year, we were lost that overall trial. I would guess more equipment and also badly in support of threshold end of the product, because we are supposed to be able to. The HI has a primary endpoint or a full approval. I think it's some of our larger trials were looking in the range of 250 to 300 patients, but of course we believe that HI provides great benefit to the patients we will be writing data to the agency in regards to how not transfusion in the tendencies, still in the quarter we who had filed the benefit. We don't file the benefit, but actually a decrease in transfusions and almost a linear back and also increase in the low benefit.
The third thing Pete is the reporting is, fine this is a high in the company the 230 patient study and patient study; have a shown have about 15-month overall. There are patient groups within that slow subset, that have high income morbidities of our that actually have a. So location area we can go back, again want to trail in the part of the population overall survival do tat quite quickly. So I think we have a number of different strategies, strategies, I think we have [automatically] and a primary end point that would actually put an overall.
So this ASH data that's coming out about the prognosis for patients pointing in the large dataset to the 15 other data point to 12 or less? I don't think this is well understood even by the FDA at this point. How poor the prognosis is, how big the unmet need is, no therapeutic option for these patients. We believe that hematologic, because it's critical because these patients ultimately die of or of complications related to the or the management, as centered the supported care. So as a result we think it's important ultimately we do believe and we want to be clear we see a strong link between improvement and survival, but it is important to recognize the tremendous burden of transfusion and the these patients look with as well?
Now also that the lead mechanism action works across the three compartments actually is advantageous is the first assay, competitive advantage and (inaudible).
I think we are over our time. Thank you.
Thank you all very much.
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