Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

ARIAD Pharmaceuticals, Inc. (NASDAQ:ARIA)

Barclays Global Healthcare Conference

March 13, 2013 10:45 am ET

Executives

Harvey J. Berger - Principal Founder, Chairman of the Board, Chief Executive Officer, President and Chairman of Executive Committee

Analysts

Ying Huang - Barclays Capital, Research Division

Ying Huang - Barclays Capital, Research Division

Okay. Good morning, everyone. I just want to thank everyone for joining us this morning. And my name is Ying Huang, I'm the U.S. biotech analyst here at Barclays. It's my pleasure to introduce our next presenting company, which is ARIAD Pharmaceuticals, and we're very pleased to have the CEO, Dr. Harvey Berger, with us. And we'll actually use the so-called fireside chat format. So with that, I guess I'll just kick off by asking Dr. Berger.

So obviously, in 2013, the focus of the company will be on the launch or commercialization of Iclusig. Right now, I think you're about 8 to 9 weeks into the launch following the FDA approval last December. Can you provide us with some insights into the launch trajectory so far? And what are the lessons you have learned? And what gives you the confidence that it will be a good, successful launch?

Harvey J. Berger

Sure. Thanks very much for the opportunity to be with you this morning and to give you sort of an update on where we are, both with Iclusig as well as our other products.

So far, the launch has been going right as we anticipated, right on track. We are tracking internally week-by-week utilization of Iclusig. And as we recently said on one of our -- on our last investor call, the utilization that we've seen has been across really all the lines of treatment, from patients who have received 1, 2 or 3 or in fact more prior tyrosine kinase inhibitors. Prior lines of therapy that -- Iclusig is being taken up well by the hematology/oncology community and, as best as we can tell, is really being prescribed very much, consistent with the label that -- in terms of breadth of the indication statement and the results of the PACE trial. So, so far, so good. And we expect the launch to continue in a strong and solid way going forward.

Ying Huang - Barclays Capital, Research Division

And then obviously, I think The Street was taken a little bit by surprise with the FDA label somehow. So I was wondering, do you think, in your commercialization, at least in the first 8 or 9 weeks, have you seen any concerns around the prescribing doctors around the label? Or no?

Harvey J. Berger

Well, I think you're referring to the warning...

Ying Huang - Barclays Capital, Research Division

The back warnings.

Harvey J. Berger

The warnings and precautions that were included. They were based among the treatment-emergent adverse events. As we anticipated in December, and now I think have seen over the last roughly 2 months that Iclusig has been available, that certainly, physicians take the warnings and precautions of Iclusig or other medicines into consideration. But that -- really, very much as we anticipated, the benefit/risk and the efficacy of Iclusig, as has been shown by the breadth of the label, the clarity of the responses and the -- really the clear visibility of the utilization of Iclusig in the -- thus far in clinical practice that, yes, physicians look at the warnings and precautions. But we've embraced the entire label as we've gone forward and met with physicians. And I think what really drives physicians' decisions on Iclusig, and certainly most cancer medicines, is, in our case, the strength of the efficacy data; the breadth of use in patients with a resistant/intolerant disease; responses in patients -- quite regularly, patients who have never really had any alternative options; the independence of the responses on whether or not patients have resistance mutants documented or not, which resistance mutants as well doesn't seem to matter, doesn't seem to matter whether it's one tyrosine kinase inhibitor or 3. So without question, the adoption of Iclusig is being driven, as we see it, by the strength of the efficacy data, the breadth of its utilization, certainly not -- minimizing that every medicine needs to be positioned, looking at both the efficacy data as well as the safety data. But certainly, for a medicine like Iclusig, the driver is very clearly the -- is the very robust efficacy data.

Ying Huang - Barclays Capital, Research Division

Okay, great. And then you just mentioned that you're seeing patients who have failed maybe 1, 2 or 3 prior therapies of TKI on the market already. I know it's still very early days for your launch, but can you say something around whether you're seeing a meaningful share of patients who have to stay on only 1 TKI therapy now, who are being put on Iclusig?

Harvey J. Berger

What we've seen thus far is use across all of the lines of prior therapy. I think 2 months into the launch is just way too early to try to put adjectives or descriptors on any of the subsets of the resistant and intolerant patient population. But I would say that -- I mean, there is no question, Iclusig is not being relegated to a last-line therapy. It's really being used across the entire spectrum of patients with a resistant/intolerant disease, CML, as well as Philadelphia-positive ALL. In the CML side of things, chronic phase, accelerated phase and blast phase, as best as we have access to the data. I mean, it's difficult to know exactly patient histories because of all the HIPAA rules and other things. We don't get as full access as obviously -- as you would in a clinical trial. But with the information that we get that allows reimbursement to take place readily, we certainly have very strong view -- insights across the entire spectrum of disease.

Ying Huang - Barclays Capital, Research Division

And then in terms of patients who are on therapy on Iclusig today, do you see more patients coming from so called intolerant population? Or do you see more patients coming in from the so called failure or mutation patients?

Harvey J. Berger

Well, failure or resistance, if every patient were tested, could be equated with, in some cases, the demonstration of resistance mutants. In other cases, not. And if you look at the PACE trial, patients who were considered resistant to prior therapies, not -- probably only half of the patients had documented resistance mutations. The other patients, they either -- the actual resistance mutant could not be identified, but yet they were resistant to therapy. So you have the group of patients which is the resistant group, some of whom have documented resistance mutants, others who don't, as well as those who fail a prior therapy purely because of intolerance. There's also the group in which intolerance results in resistance and failure because of inadequate treatment. And so there's this overlapping group as well. So again, we don't have clear visibility in all of these different groups. But I mean, our experience is that certainly, the patients that are receiving Iclusig cut across the entire spectrum. There's no way that this is just for intolerance. The intolerance group is a part of the overall puzzle, but it's resistance and intolerance and my -- although I'm not sure of the exact numbers. Certainly, resistance, as we've defined it in the PACE trial, which is failure of a prior therapy, is the dominant reason why patients are switching and going to Iclusig.

Ying Huang - Barclays Capital, Research Division

That's very helpful. And then in terms of the prescribers of Iclusig now, I presume that probably most of -- or the majority of prescribers are coming from academic settings today because you're still in the early stage of the launch. But what are you seeing in terms of getting the message across in the community setting here?

Harvey J. Berger

Actually, it's not quite right in that even at 6 weeks into the launch, 40% of the physicians writing prescriptions came from the community, which we found to be striking and very early. So the split at 6 weeks was 60-40, which surprised lots of people. What it does -- it didn't surprise us, but it highlights the message on Iclusig, and its utilization in CML and ALL is far beyond the investigated group, far beyond the key opinion leaders, and is showing good uptake of experienced physicians in the community. Now eventually, over the year, I expect that the split will be at least 50-50 and could well be 60-40, the reverse, and that would make a lot of sense.

Ying Huang - Barclays Capital, Research Division

Is that consistent with the other TKI therapies on the market as far as you know?

Harvey J. Berger

Well, the -- it's impossible to do a direct comparison because the other TKIs have frontline indications. And if you look at the distribution, including all the patients who are newly diagnosed, the overwhelming majority -- I don't know what the exact split is, but it's probably 75-25, will be community versus academic overall. So that's a little higher in the newly diagnosed patient and a little lower in those who are resistant/intolerant. But being 40-60 community/academic today, I think bodes well for the long-term prospects and how the drug will be used.

Ying Huang - Barclays Capital, Research Division

Okay, that was very helpful. And then maybe we should talk about the IMS data, because I know that's data closely watched by investors on the street here [ph]. So I guess you mentioned on the call that for the first few weeks, that category is roughly maybe 40% to 45%. And then at some point, you're going to see a steady rate of capture, rate of about maybe 65%, 70% here. So just in terms of -- just clarification for all the investors sitting here and also listening to the webcast, where do you think the capture rate is now? And then how long might it take for the capture rate to be steady at around 65%, 70%?

Harvey J. Berger

Well, the capture rate is a simple calculation. When you think about it, it's -- what does IMS report, that what it's capturing relative to what we believe the number of bottles that are being shipped and sold actually is. And so at 6 weeks, we -- it was approximately 45%. We expect it to rise to about 70%. 70% is, to the best of my knowledge, where -- to Cigna and Sprycel are. And so that's sort of a good surrogate measure of where we'll ultimately get to, which we think is about 70%. And they're very early on the rates. The capture rate tends to be low because specialty pharmacies and specialty distributors are just coming up to speed, have systems that need evolution. We didn't block anybody from the distribution of data, but there were specialty pharmacies that weren't providing full transparency. That's now all been changed, and every one of our routes of distribution is unimpeded by us. And having said that, if a -- if bottles of Iclusig are shipped to a hospital academic center pharmacy, distributed from prescriptions that are written in that hospital by that -- by academic physicians, those -- that information is not captured on the prescription level by IMS. It is ultimately captured, though, on the sales level. So that's how you end up with less than 100% capture, because there are some distribution channels that IMS has no access to. Not because we block them, but because they just have no access. So we anticipate going from 45% to 70% over a couple of months' period from the beginning of launch, so I would suspect in the coming months it'll level off at 70%. I'm confident that the capture rate is higher than 45% today, about 9 weeks into the launch. I don't think it's at 70%. It's going to get there over the next couple of months and then will level off.

Ying Huang - Barclays Capital, Research Division

Okay, great. And then can you talk a little bit about reimbursement in terms of payer's coverage and then potentially, out-of-pocket cost for the patients for all Iclusig therapies [ph]?

Harvey J. Berger

So 2 important points there. Essentially, every third-party payer that we have worked with has supported full reimbursement of Iclusig. And so there's really been little, if any, meaningful pushback on the reimbursement and on what patients within our label, which is all resistant/intolerant patients, can or should be reimbursed. So the feedback at the market access level has been excellent, and really no impediments from the third-party payers of any consequence. So that's not limiting use at all. In terms of -- let's see. Your second part of that was...

Ying Huang - Barclays Capital, Research Division

Oh, in terms of the out-of-pocket cost.

Harvey J. Berger

Oh, I'm sorry. Out-of-pocket cost. We've set a low monthly co-pay. Very low so that I think the total out-of-pocket expense for an individual on an annual basis, if I remember correctly, is about $240. So de minimis relative to the overall cost of the medicine, but does -- ensures that patients have access but, within insurance plans, have a small co-pay, very consistent with approaches taken in other specialty pharma indications. Now we also have various programs by which patients who don't have insurance can get access to Iclusig, as well as programs through third-party foundations that can help with Medicare patients. So we've taken the view that every patient who needs Iclusig, to the maximum expense we can, will have access to it, really independent of their financial wherewithal.

Ying Huang - Barclays Capital, Research Division

And then I guess last question on Iclusig here. So I guess you're in the process of discussion with EMA about the label in Europe. So where do you think there might be difference between the FDA-approved label and the EMA-approved label? And then do you think you'll get a broad label that is, in general, a second line beyond limitation in Europe?

Harvey J. Berger

Given that we're in the midst of discussions with the EMA on the label, I'll defer answering the details of your question, but just merely say that I think the label in Europe will be heavily determined by the breadth of the -- and robustness of the clinical data in the PACE trial. The filings in terms of the clinical data were, of course, identical in terms of the trial itself, and I think we'll have a very strong label for Europe. I'm sure the words will be different, the way it'll be presented will be different just because a label approved by the EMA and a label approved by the FDA are intrinsically written differently, are focused on subtly different things. And in the coming months, we'll be able to give additional clarity on that.

Ying Huang - Barclays Capital, Research Division

Okay, that's fair. So for the rest of the time here, I guess we'll just switch gears quickly to 113. So we frequently get a lot of questions from investors about exactly what kind of data we're going to see at ASCO, and then what kind of data we're going to see at the ESMO this year for 113. So can you just clarify for us where you are in terms of that Phase I/II trial for 113? And then what exactly shall we expect at ASCO in June?

Harvey J. Berger

Sure. We've submitted an abstract to ASCO based upon the data that were available at the time that the abstract was submitted. Of course, we'll be updating the data and presenting the most up-to-date data available in June, assuming it's accepted and presented. The focus since last year is ESMO. So over the last 6 months, has been entirely on ensuring that we have the optimal dose and schedule for 113 going forward. That's focused on safety, tolerability, pharmacokinetics. Those 3 parameters help us in defining what the optimal dose and schedule will be for patients across the 3 targets that are important, which is ALK, ROS 1 and EGFR. Our goal is to have a single dose and schedule as the starting point for therapy for subsequent clinical trials, independent of what the actual oncogene, or the actual driver, mutational driver, that is in play, ALK or EGFR for example. The data also at ASCO will be continued follow-up, include continued follow-up with patients who had responses that were presented on at ESMO last year, as well as new patients predominantly with ALK-driven lung cancer. So there will be additional response data that will be included. So primary focus then is to move either -- by the time ASCO starts or soon thereafter into the Phase II cohorts, the most important one of which is probably the cohort of patients who have EGFR mutant lung cancer. The key there is to only enroll -- or to specifically enroll patients who have demonstrated a resistance and failure of erlotinib or an EGFR inhibitor, who then, in a short period of time, can switch over from having failed erlotinib to 113 as an EGFR inhibitor. And that'll give us clarity of the potential utilization in EGFR-positive lung cancer. Those data, if they -- if we start enrolling patients sometime between now and the middle of this year, hopefully, there will be some of those data available for ESMO. So the earliest one would see, Phase II cohort data, would be ESMO. But how much we'll see by end of September, it's impossible to note today. But that's the earliest. And...

Ying Huang - Barclays Capital, Research Division

So are we...

Harvey J. Berger

Go ahead.

Ying Huang - Barclays Capital, Research Division

Are we going to get the full data from the Phase I portion at ASCO then?

Harvey J. Berger

Full data -- certainly, every patient that's been enrolled to that date will be presented. Full data, probably will continue to roll out as patients stay on therapy, and we look at durability of response and other parameters in follow-up. So it's not the full data set sufficient to publish, but it's certainly a -- it's a full assessment of every patient in Phase I that will have been enrolled probably by mid to late May of this year.

Ying Huang - Barclays Capital, Research Division

And I assume we're going to get off a safety update from the Phase I portion?

Harvey J. Berger

Of course. Of course.

Ying Huang - Barclays Capital, Research Division

Okay. So I guess we've almost reached the time here. Actually, can we put up the instructions for using the ARS system because we have actually 1 question for the audience here. So Harvey, you can relax for now.

Okay. So everyone has a device here in front of you, on the table here. Just press a number, 1, 2, 3, and then hit that green button to send your answer.

All right. So we have just one question for the audience here. Where will the 2013 U.S. sales of Iclusig be? Choice number one, less than USD 30 million; choice number two, USD 30 million to USD 40 million; choice number three, USD 40 million to USD 50 million; and then choice number four, USD 50 million to USD 60 million. If you think it's going be above USD 60 million, it's choice five, I guess.

[Voting]

Harvey J. Berger

Hey, do I get to vote?

Ying Huang - Barclays Capital, Research Division

Yes. Of course.

Harvey J. Berger

I won't.

Ying Huang - Barclays Capital, Research Division

Well, interesting. So I think the street consensus today is sitting at around $35 million, $36 million for 2013. Obviously, here in the audience, we have about 29% of the audience votes for $30 million to $40 million, which is kind of like close to the street consensus. And then 29% voted for $40 million to $50 million. Actually, another 29% voted for $50 million to $60 million. Only 14% here in the audience voted for less than $30 million.

Harvey J. Berger

So how many people voted?

Ying Huang - Barclays Capital, Research Division

I don't know. I guess you can count all the people in the audience here. All right, Kendra is writing a diagnosis [ph]. I can send that to you. All right. With that, I just want to thank Harvey and Kendra again for the participation. And we'll move on to the breakout session, which is going to be in the room -- New York and Ascend across the hallway.

Harvey J. Berger

Thank you.

Ying Huang - Barclays Capital, Research Division

Thank you, Harvey.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Ariad Pharmaceuticals' CEO Presents at Barclays Global Healthcare Conference (Transcript)
This Transcript
All Transcripts