Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS)
Lazard Capital Markets 9th Annual Healthcare Conference Transcript
November 13, 2012 11:00 AM ET
Dan Swisher - Chief Executive Officer
Kristina Tibor - Lazard Capital Markets
Kristina Tibor - Lazard Capital Markets
Hi there. I’m Kristina, here to introduce Dan Swisher. Sunesis is a development stage biotech company with lead drug Vosaroxin in development for AML. So, please welcome, Dan. Thank you.
Thank you and thanks all for attending. It’s good to be New York after the storm. During or at least before the next storm starts. So, I’m going to give you an update on our corporate progress.
First, I just want to reference, we will be making forward-looking statements, so please refer to our recently filed SEC documents. For those of you, just a quick overview on Sunesis. We’re a publicly traded South San Francisco based company focused in cancer.
We've got really well-capitalized. We’ve mentioned in our earnings call last week that $80 million, $50 million have float into the company in a variety of methods last quarter and that gives us importantly the cash through 2014, which is beyond several key data milestones.
Our focus is on Vosaroxin, this is unique anti-cancer drug. We've got full worldwide rights to it and its being pursued in a late-stage hematology indication in relapsed refractory AML, very well powered trial with the rigorous endpoint of overall survival. Importantly, we had a one and only efficacy look successfully completed in September and I will talk more about the implications.
But DSMB recommended a sample size increase, which was pre-specified, which indicates that the results were falling into a promising zone. So a very important a risk mitigating milestone for us and keeps us very focus on the execution to get to the final data read-out.
While the team internally is focused on Vosaroxin, we do have two collaborations with both Millennium, Takeda and with Biogen Idec with our kinase inhibitor program. These are essentially free option to Sunesis’ shareholders.
The programs are fully funded by the partners’ one and Phase 1, which is our pan-Raf program, and in a very promising late preclinical program moving towards the clinic next year with Biogen Idec.
Just an overview of the product pipeline, so in addition to our pivotal company-sponsored trial VALOR, there is a second, Phase 2, 3 study called LI-1, which is a cooperative group study chaired by Prof. Alan Burnett, which is looking at the drug in a frontline setting with elderly AML patients that are not candidates for standard chemotherapy.
We see this is a great way to stretch the product profile into an additional indication give us potentially another route for approval supplemental to our initial NDA, also bigger market opportunity. With the two kinase programs mentioned once in Phase 1 and once moving towards Phase 1 next year.
So those are actions that are unique first-in-class anticancer compound. It really is proven biology with first-in-class chemistry and that gives it some distinct efficacy and safety advantages. It’s targeted topo inhibitor that is active in topo II resistant settings, in part because it evades some of the common drug-resistant pathways.
It’s also very metabolically stable. So it’s got, it’s not inhibited through the CIP system, so it can be used in combination and such as it is in the VALOR study, and importantly with patients with comorbidities in prior chemotherapy exposure because of the very “stable” its got very low risk of cardiotoxicity.
So, AML, for those of you who don't know the disease I would just spend a slide or two on the background. It’s a very bad disease with a poor prognosis, really treatment standard haven’t changed appreciably in 40 years.
Patients typically come in and get diagnosed because they have bruising problems or inflection problems. But it’s a very apparent when you get a bone marrow biopsy, you can see the slide on the right versus the left that the bone marrow gets rapidly crowded out with these rapidly proliferating blood cells.
Patients do not have the ability to produce normal red blood cells or, sorry, platelets or white blood cells and so the goal of therapy is very quickly to get the patient into a complete remission to extend survival, and hopefully bridge the patient to a bone marrow transplant.
What we saw preclinically with this compound is single agent activity that was superior in terms of ablating the bone marrow to cytarabine, which is the cornerstone of leukemia treatment.
And importantly, with a complementary mechanisms is actually synergistic with those -- with that standard of care, and that’s been a publication and we see another activity sense of course in our Phase 2 setting.
And that let us do clinical work starting in 2006 and we really went slow. We made sure that we had the right dose schedule optimization. We looked at various different patient populations.
And importantly, we've got now with the VALOR study underway as well, more than 500 patients treated in AML with vosaroxin, two, 100 plus patients Phase 2 studies, the REVEAL-1, which was single agent activity, really proof-of-concept and set aside for the LI-1 cooperative group study.
And then in the relapsed, refractory, so patients who get standard chemotherapy and then they relapse or refractory to it, combining with cytarabine and that set us up for our pivotal VALOR trial. So VALOR’s vosaroxin with Ara-C or cytarabine in combination to evaluate overall survival in relapse refractory AML.
I’ve mentioned, we had both ENA and FDA feedback on this trial design. We really wanted to cut no corners on the regulatory side. We believe we’ve got a very active agent and it’s really question of having in AML, where there hasn’t being new therapy, having the right drug profile that balances safety and efficacy, but also the right trial design is well-powered and randomized with overall survival as the primary endpoint.
So we set up, what is the largest company-sponsored trial in the setting. Patients have or either first relapsed or refractory to standard therapy. They go into one-to-one randomization either the study on it, which is our drug on days one and four to five minute push infusion, followed by cytarabine on days one through five and that’s the active control, that’s the same active control in the control arm with a color matched placebo. So investigators and patients are blinded to the study in terms of, which treatment they are on.
As I mentioned with rapidly proliferating disease, our goal is to get into remission very quickly and so one or two cycles. So within one or two months of treatment, you know whether you're having a response and an only the patients who get into that complete remission go on to consolidation.
Another key goal here is, if there's a bone marrow donor available is to bridge them to stem cell transplant, which is potentially curative. And so you are taking patients that, if they don't respond have a life expectancy of three to four months to potentially having two, three, four or more years of life expectancy, if they can get into a complete remission and bridge to transplant. So this is much more of a story then just what the shift in the median. It’s the shift of getting patients into remission and a durable remission.
So we put a lot of work and effort into the trial rollout last year. I can say, really pleased with the investigators support across now, 14 countries. We’ve got North America, Europe and Australia, New Zealand with the fifteenth country, South Korea coming on stream early next year. Its leading treatment centers, we did very careful diligence.
These are top centers that treat relapsed refractory leukemia and have bone marrow transplant available. As of last week, we had 453 patients that was our original target before the sample size increased and we are on track to be at full enrollment in 2013.
So the single preplanned interim analysis, which was the one led by the DSMB at efficacy, there was range of potential outcomes. Really the results could have fallen into four zones in terms of improvement in overall survival.
There was the standard stopping rules for overwhelming efficacy or futility. This did not occur. The trial could have continued forward as plan with the 450 patient, if the result had fallen either into a favorable zone, in which case, the study was well powered to show a clinical benefit and what we had originally hypothesized for the 40% treatment affect was indeed being seen, in which no need for sample size increased.
But there was an equal chance where it could have fallen into an unfavorable zone where it’s above futility. There is some clinical benefit. But by increasing the sample size, you are not officially restoring power in this study back to a pivotal level close to 90%. And we would not have known, if the sample size has not been increased, which zone we had fallen into.
What did occur and what the DSMB unanimously recommended, was a single sample size increases. This is pre-specified in the protocol of 225 patients and the design of the trial was, if there is a promising result, which is clinically meaningful but less than that original hypothesis, we wanted to pre-specified and have a perspective way of restoring power to show that benefit without breaking a blind to the study.
And what that sample size increase means is, in lieu of the original hypothesis of the hazard ratio of 0.71, where we had a 90% powered study with 450 patients, which is center column.
As we shift over now to the larger sample size 675 patients, you can see restoring clinical statistical power across a much broader range of clinical outcomes and in particular, an alternative hypothesis. We had designed the trial run was, what if in fact we were observing a 3% treatment affect.
We know that’s very clinically meaningful, no proven therapy in this setting. We want to make sure that we have the best shot with this trial of having a statistical result. And by adding the sample size increase, we get back to a 90% power.
So where we stand with the DSMB is they looked at over 300 patients in terms of safety, they unanimously recommended sample size increase. I would suggest the results were in the promising zones.
The next safety review was actually deferred at the DSMB's request from originally, what’s going to be in December but given the comfort they felt from the safety, they’ve seen on the trial design. This was the fourth -- the interm was the fourth safety look at the clinical data set. It’s been deferred to mid-2013 and now the last look before unblinding.
The 225 patient sample size increase has been rolled out to the study sites and our new target enrollment is 675. So study timeline is multiple milestones. Next year, safety review in June, full enrollment, soon thereafter we are averaging about 25 patients per month.
And then unblinding will be event driven, so reaching 562 events having the final data base lock and then we’ll break the blind. Importantly, the management study investigators all of us other then the DSMB remain blinded. So to maintain very high integrity to the study conduct.
The Phase 2 data that support the VALOR design I really just have one slide here to show you, obviously we’ve had ASH and ASCO presentation, those are up on the website. We are submitting a manuscript soon for publication next year.
But I think the important part of having the right product profile is balancing safety and efficacy and what you have in this very sick population, this is 80% relapsed, early relapse refractory, is a remission rate of that twice which you would expect from normal cytarabine-based therapy. So we had about 30% remission rate. Majority was CRs and then that’s balanced with a very low all kinds of mortalities.
So you are putting patients at risk when you’re ablating their bone marrow. And so what’s important is to have a bone marrow that recovers well and recovers quickly. And we saw that actually with Vosaroxin with 3% all-cause 30-day mortality, really no different than what you see from cytarabine alone.
So it doesn’t seem to be an exacerbation of toxicity with the two drugs in combination. It’s very impressive for these investigators is the leukemia-free survival, which is an indication of durability. It’s out more than two years. So we have many of these patients who either are not responding or early relapse. And they got into that durable remission in part because two-thirds of the remissions were able to bridge successfully towards stem-cell transplant. So median of all survival is seven months.
On the front line side, this is the second trial I mentioned the L1-1. We saw on our REVEAL-1 Phase 2 study, a very strong single-agent activity. So if you think about three quarters of AML patients will get standard cytarabine-based therapy upfront but a quarter of the patients will not have any approved therapy and will deem to be too old or have other co-morbidities, risk factors, where they can’t tolerate a cytarabine-based therapy. So they are typically getting treated with high-methylating agents or going to clinical study. And so we study that population. The median age share was 76.
And schedule C, this is again speaks to not cutting corners and really finding the right dose schedule, schedule C was compressing the dose to day one and four, slightly lower does than in our VALOR study and what we see was single-agent activity, 35% response rate, majority CRs, nearly eight-month median survival, 38% of life still at one year, typically here about 20%, 25% has been a threshold of where active treatments and a very low all-cause mortality, given the fragility of these patients.
That support than started a large cooperative study with Professor Alan Burnett in the U.K. started more than 100 sites now across number of countries. This is a cooperative group study. So we provide drugs, small stipend but they are generating already a number of patients, who are coming onto the study.
There is some key interim analysis coming up in 2013 next year. They are going to compare an active control arm which is a very low-dose Ara-C which has been shown over the years to be better than just best support care. And there is two treatment arms here, it’s a Pick a Winner design where multiple experimental therapies can be added, dropped or expanded. We’ve got two Vosaroxin arms, one is a single agent that came out with REVEAL-1 study, the other is that single agent in combination with the low-dose Ara-C.
The single agent is the furthest along right now. We expect that to reach an interim decision middle of next year and then the other treatment arm likely towards the end of next year. And the interim analysis will look -- DSMB will look at the data and then they can recommend expanding to 200 patients, in which case, we’ll move to an overall survival analysis and that can support hopefully a supplemental indication following of favorable VALOR trial.
So in terms of the market opportunity 50,000 prevalence in the G7, very poor prognosis 20% really -- 20%, 25% five year survival but over 65 drops significantly. No change in therapy. It’s primarily generic side or toxics but you can see from the examples, whether it’s CML or CLL or MDS. New therapies coming in can significantly expand the market as they provide improved benefit to the patients.
Treatment guidelines here for AML, seven and three is the standard the frontline therapy, so seven days of cytarabine, three days of an anthracycline.
Unfortunately, there is very few cures that come out of that. Most patients will then either fall to relapse or refractory in which case they get expose to higher doses of cytarabine such as the one gram in our study but -- primarily they are recommended to go to clinical study because there has been no proven survival benefit with new agents.
And so that's where with the success of VALOR study and we’re really the furthest along in the setting that would rapidly incorporate this combination into standard of care. So in terms of the patient population, the 22,000 treatment eligible patients in the U.S. were addressing almost three quarters of them with our studies of VALOR.
You can see about 9,000 or so relapsed refractory patients in the LI-1, many of these patients present frontline over 70. In terms of pricing, as we just sort of try to bracket what the market opportunity is, we looked at recent heme launches. I’d say takeaway, is then -- there is premium pricing for new agents and the pricings probably been increasing slightly over that timeframe.
We think that successful VALOR study, survival benefit, orphan indication, no proof of therapy in that setting would yield a similarly appropriate pricing and so for purpose of modeling, we’re looking at an $80,000 to $100,000 range in the U.S. And so if you put these together both the European and U.S. markets, you can see 22,000 patients in the U.S., little more than that in the EU.
We assume a one quarter penetration in the U.S., a little less than that in Europe for -- and hopefully these are conservative. Those Vosaroxin prices at $80,000 to $100,000 U.S., a little bit less than in Europe to generate peak revenue of $700 million to $1.2 billion in AML alone.
And it’s a market that’s really addressable for the company of our size and we’re planning to feel the hematology focus field force and launch these product ourselves in the U.S. In Europe, we’re looking very carefully at the range of options including companies who have successfully done this themselves.
On the kinase side, just a reminder really, this is in program that started back in 2004 with very good economics. It’s been fully funded as I mentioned by the two company's Millennium and Biogen Idec. We get pre-commercial milestones about $60 million. Over last year, we had $5.5 million coming from these programs.
Tiered product royalties that go into the double-digit and importantly, in the phase 2 setting we have an opportunity for the co-development option. The Pan-RAF program, I said, is the most promising and the most advanced. Zelboraf is a good example. The B-Raf is transforming. At normal care, this is a pan-Raf so potentially a broader resistance profile. And so we should -- this drugs has been in the clinic for more than year now. We should see clinical data soon. We see it on an informed quarterly basis but look forward to Millennium for presenting this status sometime soon.
On the corporate side, we hold the worldwide rights. AML is the focus which is very meaningful market. We’re going to look for additional studies to start to address related indications like MDS, other heme malignancies and we have seen in our prior work activity in solid tumors including ovarian cancer.
In terms of the patent life, we get this question quite a bit. We spent some time with our patent attorneys discussing this at our analyst meeting in early October. We have been investing for success assuming and we have been very recently over the last 12 to 18 months, seen a number of granted patents come true, which really extend potentially exclusivity out to 2030.
All of these are granted patents. You can look them up yourselves. Many of these now have either been granted or are pending in other jurisdictions.
In terms of the financial position, I mentioned well-capitalized $80 million in cash, we get the question often. Are you raising or do you need to raise money to get to the VALOR result. We do not need to raise money to get to the VALOR result. We’re anticipating VALOR result in first half of ‘14, our cash lets us through 2014 -- through the end of 2014. Shares are same for 2.5 million with some warrants and options.
In terms of new floor for next year, so in 2013, there is a lot of inbound interest coming from investigators, given the work that's gone on both for VALOR and with the LI-1 study. We’re going to start couple of studies next year at some of the leading centers that we’re working with right now with VALOR, both in new combinations, new lines of therapy in AML but also moving into MDS.
With VALOR, there is going to be a safety review in June with our complete enrollment late summer which then helps people start to really have confidence when we’re moving toward the data readout in first half of 14 and with the LI-1 cooperative group study, we’ll have a number of interim decisions on the two treatment arms.
With the kinase programs mentioned over the next -- it's little harder to predict, because it’s -- these are not studies in our control but Millenium 2480 big priority for the early clinical pipeline for Millenium moving through Phase 1 and hopefully going into Phase 2 sometimes soon.
And with Biogen Idec moving into Phase 1, this is a high target -- high profile target that they would lift avail on sometime next year. So please stay tuned and we’re in New York and available for calls and for one-on-one meetings. So appreciate your time and attention. Thanks.
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