ArQule Management Discusses Q1 2013 Results - Earnings Call Transcript

May. 8.13 | About: ArQule, Inc. (ARQL)

ArQule (NASDAQ:ARQL)

Q1 2013 Earnings Call

May 08, 2013 9:00 am ET

Executives

William B. Boni - Vice President of Investor Relations & Corporate Communications

Paolo Pucci - Chief Executive Officer and Director

Robert J. Weiskopf - Principal Accounting Officer, Vice President of Finance, Corporate Controller and Treasurer

Brian Schwartz - Chief Medical Officer and Senior Vice President of Clinical & Regulatory Affairs

Analysts

Ryan Martins - Lazard Capital Markets LLC, Research Division

Howard Liang - Leerink Swann LLC, Research Division

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Chad J. Messer - Needham & Company, LLC, Research Division

Reni J. Benjamin - Burrill & Company

George B. Zavoico - MLV & Co LLC, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the ArQule Inc. First Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I'd now like to turn the call over to your host today, Mr. Bill Boni. Sir, you may begin.

William B. Boni

Good morning, everyone. Welcome to the ArQule investor conference call reviewing operational and financial results for the first quarter of fiscal year 2013. This is Bill Boni, VP of Investor Relations at ArQule.

This morning we issued a press release that reported results for the fiscal quarter ended March 31, 2013. This release is available on our website at www.arqule.com. Leading the call today will be Paolo Pucci, Chief Executive Officer of ArQule. Also present for the company are Peter Lawrence, President and Chief Operating Officer; Dr. Brian Schwartz, Chief Medical Officer; and Rob Weiskopf, Vice President of Finance.

Before we begin, please note that we will be making forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results may differ materially from those projected in the forward-looking statements due to numerous risks and uncertainties that exist in ArQule's operations, development efforts and the business environment, including those factors discussed in our press release announcing this call and posted on our website, as well as in our reports on Forms 10-Q and 10-K and subsequent documents filed with the SEC.

The forward-looking statements contained in this call represent the judgment of ArQule as of today. ArQule disclaims any intent or obligation to update any forward-looking statement except to the extent required by law. We will provide an opportunity for questions and answers at the end of this call.

I would now like to introduce the CEO of ArQule, Paolo Pucci.

Paolo Pucci

Thank you, Bill, and good morning, everybody, and thank you very much for joining us today. I will start with a couple of remarks on the operational review for the quarter and then go in more details on the different programs that are ongoing here at ArQule.

So the first set of remarks is tivantinib. During the first quarter of 2013, ArQule will reemerge, I would say, as a Phase III clinical stage company and that was done through the dosing of the first patient in the so called METIV trial, which we're conducting with tivantinib in hepatocellular carcinoma. This is the second-line treatment phase for HCC. As many of you know, there is no standard of care for treatment of this stage of the disease. And therefore it's an area of pressing unmet need for patients and physicians alike. With the METIV trial, we hope to fill the gap at the end of the program. And obviously, the METIV trial is now a very, very important part, the most prominent part probably at this point in time of the value proposition of ArQule.

Next to the METIV trial, the pipeline at ArQule beyond tivantinib is emerging as a potential value driver for the next 12 to 18 months. In fact during the first quarter of 2013, we have regained rights from Daiichi Sankyo to the AKT program that have been developed in partnership with Daiichi Sankyo over the past several years. I view this as a very positive development for ArQule and it increases significantly our chances to be able to bring to Phase II a fully-owned drug in many interesting target space.

Let me now go into greater detail and provide you an update of the METIV trial. As earlier mentioned in this trial, we are testing tivantinib as a single agent in second-line hepatocellular carcinoma testing. Among patients who must be MET-high to pass the screening and be formally enrolled in the trial. The primary end point of the METIV trial will be overall survival, and here there is a very good chance not to have the end point clouded by follow-on therapies because I remind you that unlike non-small cell where they serve as sometimes even fourth-line therapy here, there is only front line therapy for HCC approve, which is Nexavar, also sorafenib. And very little is available for second-line therapy on an experimental way and I don't suppose there is much at all needed. There will be in the near term for third line. This is a very important consideration. They will come back as we analyze either the other data sets that we are developing here at ArQule for other tumor types.

We plan to enroll approximately 300 patients in the METIV trial. The randomization will be 2:1 and we are planning to execute this trial using 123 health trial sites worldwide. Worldwide means, however, Daiichi Sankyo territories, because this trial is only a Western trial though in multiple continents in the West. It's conducted in partnership with Daiichi Sankyo. And in this trial, we have at ArQule the medical coordination lead, as it is in our alliance that sometimes we alternate with our partners who is in the medical coordination. Daiichi Sankyo took medical coordination for the non-small cell lung trial, MARQUEE. And we would do to take coordinations for this trial and we did.

We believe that the HCC represents a compelling opportunity overall and more so for us in this case because this is a unique trial. In fact, although there are other Phase III trial being conducted in second-line HCC, this is the one that stands alone as having a molecularly-defined patient population. Obviously with this uniqueness, there are a number of complications, which we have been learning as we have been developing the drug in other techniques. And based on the experience we made so far, we feel more confident of our ability and those of our partners [indiscernible] the Daiichi Sankyo plus the companies who are working with for the diagnostics to execute the METIV trial appropriately.

Let me also remind you that the METIV trial stands on a strong foundation. In fact, this is predicated on the results of our randomized, double-blind, placebo-controlled second Phase II trial in second-line HCC and the result of this trial have been widely disseminated from us going in general publication, scientific publications as well. In that trial, we saw an overall benefit for the intent-to-treat population and a much better -- and much greater benefit in the MET-high defined subgroups finalized with IHC, FISH [ph] where we saw consistent improvement in TTP, PFS and importantly, overall survival.

Further underscoring the innovative nature of the METIV trial is the fact that it's being conducted under an SPA -- with the SPA, that is a Special Protocol Assessment. And importantly, the SPA covers both tivantinib and the companion diagnostic that is being employed to screen the patient before they are passed on to either arm of this trial. We are employing a diagnostic and intensifying our front to ensure a high level of rigor and accuracy in the METIV testing with the objective of having a patient population that is exactly defined as the protocol and can be analyzed at the pre-established criteria in the protocol.

Patient recruitment in the METIV trial is in its infancy. We just started in Q1 this year and we are planning by the coming fall to have about half of the 120 sites up and running and recruiting. Obviously, a trial that involves a diagnostic brings a little bit more complications in the site initiation visit process and for that reason we are projecting -- that's one of the reasons why we're projecting a 30-month implementation timeline for this trial. So we are MET -- it might turn out to be conservative. The other reason why we think conservative is that at this point in time, having such a rigorous screening to enroll patients, we do not know exactly what the screen failure rate is going to be for the trial. Once we are confident that the site initiation visit process is now halfway, and once we have about a 1/3 or so of the patients enrolled, we're going to be able to recalibrate our timeline for implementation and hopefully, for the better.

Let me now turn to non-small cell lung program. Just as I say now that we have reemerged as ArQule as a Phase III company, thanks to the METIV trial. In the reemerge, there is the implication that we were once already a Phase III company and those of you that follow the company closely, know that around about this time, we were a Phase III company with the non-small cell lung trial program for MET -- for tivantinib. This trial consisted on 2 programs: the MARQUEE trial in the West and the ATTENTION trial in Asia. And those 2 trials were complemented by a couple of a double-blind, randomized Phase II that were also running.

Let me give you an update on MARQUEE. The MARQUEE trial, which we conducted in partnership with Daiichi Sankyo in the West part of the world, was discontinued as an interim analysis October 2012. At that time, following the outcome of the preplanned interim review of the trial by the DMC, we announced that the statistically significant benefit that was being observed at that time in progression-free survival, which by the way replicated the signal that we had seen in the precursor double-blind, randomized Phase II non-small cell, was unfortunately not expected to carry over to the primary end point of the trial, which is overall survival in the intent-to-treat population, so in the overall population. Consequently, the trial had to be discontinued for future activity.

Since then -- so since October 2012, a number of activities can be carried out by the trial management teams, CRO and people at Daiichi Sankyo, as well as ArQule in some cases. And there was to conclude the trial in an orderly fashion, given that the safety profile of the drug presented no surprise versus expectation. And in a way that will be sensible considering as drivers, the interest of the treating physicians and more importantly the needs of the enrolled patients, some of whom were deriving some benefits from therapy. The -- more recently, we said that we have been focusing on the validation of the data set, the quality analysis of it, and we have begun some joint analysis with Daiichi Sankyo and our CRO. So between October 12, that we have been interim and December 15, 2012, when we had this cut-off, the focus was to complete the trial ultimately. In December 15, 2012, that was the desired cut-off and since then people have been working on the data. And very recently, our partner Daiichi Sankyo received from CRO and provided to us a data set from the MARQUEE trial, which includes a number of prespecified subgroup analysis as they were prescribed -- strictly prescribed by the statistical analysis line of the trial.

In this latest data analysis, we saw a significant improvement in progression-free survival for the ITT. So the progression-free signal that we had seen the interim analysis is confirmed in the final analysis. However, also it's confirmed that there is no meaningful difference in the intent-to-treat population, meaning approximately 1,000 patients that have been recruited. There is, in this ITT population, no meaningful difference in overall survival. So just as at interim, the PFS difference was not expected to carry to overall survival now that it's confirmed with the final analysis of the database that hasn't happened. And obviously, this limits very much so any -- the value of the potential sub-analysis given the current regulatory environment.

These analysis that we are beginning to assess also included an exploratory analysis of the MET IHC subgroup. It turned out that as per protocol about 445 patients where valuable by IHC MET, within the parameter set in the SAP. Of this 445, about 211 patients were confirmed to -- defined as MET-high. As for the SAP, in the MET-high tivantinib treatment group showed that substantial improvement in relative to the control group in that 211 patients. This benefit I just told you was not really seen in the overall population where we did not see a benefit in ITT between treatment arm and control line.

Of those 445 patients, 234 could be as per the SAP classified as MET law. And in this cohort of patients, there was no difference in overall -- meaningful different overall survival observed between the treatment arm and the control arm. Progression-free survival in the MET-high and the MET-low populations so total 445 were somewhat similar.

Now complete data for this analysis, which as to some extent are ongoing because there are many other analysis that can be done will be presented to a peer review data meeting in the second part of 2013. It's a very large database and we are taking quite a few learning out of this database not only on the data front but also on how to best proceed to conduct a biomarker for the trial. And given that we have an important one ongoing, those learnings are very valuable to us.

This recent data, I would say, that points to the utility of the tivantinib combination with erlotinib in a subset of the population that was selected originally. And originally, we selected a patient population than what is logically defined as non-squamous cell, advance non-small cell. The trial was second line and third line. We will report later on what the balance of the patients was between second-line and third-line therapy as well. And hopefully, we will be in the position to provide as much data as we will to be able to collect about post-treatment therapies whether deviations had been second-line treated or third-line treated. So that data is quite challenging to collect, as you all know. We are encouraged by this analysis. But at this time, we do not believe that this analysis give us an opportunity to redefine regulatory process for this trial at least in the Western world.

A different story for the other non-small cell trial, the ATTENTION trial. And by the way I would say that the safety profile that was delivered by tivantinib in the interim analysis of the MARQUEE trial, sorry I'm going back to MARQUEE, was largely confirmed in the final analysis. And I am also happy to report just before I turned to the Asian trial that ILD, that interstitial lung disease that appears to be toxicity of concern for tivantinib in Asia did not turn out to be a concern for tivantinib within the West at least if we look at MARQUEE database at this point in time.

So now let me -- before -- after these discloses, let me go to ATTENTION. First of all, let me say clearly that the ATTENTION trial is continuing to be conducted in a blinded fashion by our partner Kyowa Hakko Kirin. The trial is very similar to the MARQUEE trial. I'll remind you all to 2 differences where this trial only takes wild-type EGFR patients so there's no mutant. And the second difference was, employs 2 different dosages, 240 and 360. 240 for the slow metabolizers, 360 for the normal metabolizers.

Now you will recall that this trial was originally intended to recruit 450 patients but additional recruitment was permanently suspended after approximately 300 patients had been recruited. And this was because of an observed imbalance relative to the ILD toxicity, interstitial lung disease. Hence, my previous reference to what we have observed relative to this toxicity in the very large MARQUEE database admittingly in the West. But that statistical plan for the ATTENTION trial was left unchanged and therefore the statistical success for this trial is higher than anticipated and this is obviously due to the reduced end for this trial. Of the 300 patients, it is possible to imagine that about 250 events could be gathered. We don't know much more than this, at this point in time, but as in the past as the updates flow to us from our partner Kyowa Hakko Kirin, we will promptly disclose to the investment community as well.

As a conclusion for the non-small cell lung trial having covered the MARQUEE trial, the ATTENTION trial, I'll remind you that we have 2 Phase II trials ongoing in non-small cell and one in the West and one in Asia, one in KRAS patient and one in EGFR mutant patient and suffice to say, that data should be available early next year for both.

Now let me go to colorectal. The news versus our last call relative to colorectal is not so much in the data but in when the data is going to be presented. So we now know that the colorectal Phase II data that we announced early this year but that's the tivantinib toxicity difference [indiscernible] second-line and third-line colorectal cancer will be presented in full-length at ASCO in the [indiscernible] symposium. So all the data will be presented here as we have committed to try to do early on in the year. I'll remind you that the trial was scheduled to recruit 150 patients due to the changing therapeutic paradigms in front line, second-line and third-line colorectal. We reduced a trial that we considered somewhat obsolete from 150 to 120 patients. The statistical plan was left unchanged and the trial did not achieve its statistical end point. However, what the trial provided was interesting signals as far as progression-free survival, overall survival and cellular responses. None of these trends were statistical but they are nice as an interesting signal for us to discuss with the opinion leaders in colorectal cancer community just after ASCO. What are the valuable insights that I'm going to come at ASCO first of all, is going to be incrementally much or overall survival data, which we didn't have available when we last disclose about this trial. We are going to be able to show, to shed a little bit more light on the unexpectedly high response rate that we achieved in this trial and we are going to be able to discuss geographical references as well as frontline therapy, differences and between the 2 arms and we're going to be able to show some coloration between geographical differences and frontline therapy differences for this trial. So it's going to be quite interesting.

Now that concludes my tivantinib part of the discussion today. Let me turn to the pipeline, and let me really point you to the pipeline because we have a very unusual situation now. We have 4 Phase I assets that are fully-owned by ArQule. Although 4 assets, 2 are of some interest for investors, 2 are of significant interest for investors because for us the square in the race into -- to bring a drug for 2 exciting targets and one is AKT and the other one is FGFR.

Now let me give you the -- a little bit more detail. Even though we had -- since we received back AKT, we have the time to review more data and we had the time off to think about the portfolio we now have in the pipeline. So during the first quarter of 2013, we added significant value to our progression-free product pipeline by regaining worldwide rights to the AKT program that was previously a subject of the discovery collaboration we have with Daiichi Sankyo. So in this program have gone 4-year of joint work between ArQule and Daiichi Sankyo. The lead compound for this program is called ARQ 092. And this is not the only compound in this program because there is also a very interesting back up compound that is at this point in time, a pre-IND stage.

AKT is also known as a serine/threonine kinase PKB. It is believed to mediate a number of single transaction processes and represents a potential therapeutic target for several cancers as well as other diseases. Many signaling pathways disrupted by common cancer-causing mutations merge into the AKT pathway, which is often amplified and mutated in patients who respond -- who relapse following initial therapy and you know that the topic of resistance is the topic that is coming to the forefront on the therapeutic discussion in the oncology field, very strongly. And in fact, for that reason it is likely that there was support for ARQ 092 at AACR. So there is already ongoing Phase I data. The data from the ongoing Phase I trial available for investors through a posted at -- ArQule presented at last AACR in Washington, D.C. This post demonstrate clearly that 092 inhibits the AKT pathway and that so far has a manageable safety profile. So far, we have tested continues dosing for the drug. There's a very strong possibility that we will test also another next dosing schedule for it and that will be done soon.

The researchers that are now involved with ARQ 092 who are both in the U.S. are testing safety of ARQ 092 in patients with a broad range of advanced and metastatic solid tumors, including colorectal, endometrial and neuroendocrine cancer. Maximum tolerated dose for this drug has now been achieved so far. So we are going to expand the Phase I trial.

The -- following the identification of an MTD, we plan to explore the activity of 092 in patients with AKT-driven tumors.

Elsewhere in the pipeline, we are continuing to work on our ARQ 087, which is an orally available, inhibitor with pan-FGFR activity. This is also fully-owned and our patient selection strategy for this trial includes validating FGFR family members of predictive biomarkers in evaluating their association with toxicity in clinical activities. Those of you that follow the company for some time know that we have completed in the past Phase I data for 2 additional fully owned assets in our pipeline: Eg5 inhibitor, ARQ 621 and the RAF inhibitor, ARQ 736.

So to the strategy of this emerging value driver for ArQule. Until today, what we have kept as a strategy was to complete Phase I data for all of the fully-owned compound, which were to be entered with the AKT back. And then decide which one was best to bring to Phase II, where we would have to employ significantly more capital for the development of the drug, capital as we all know is scarce these days. However, now I think that our pipeline has grown by 25% and maybe more in terms of value because of the interest that the people, the researcher and investors have in the AKT pipeline. Now we are going to recalibrate the strategy of it. So the #1 priority now is complete the expanded Phase I testing for ARQ 092, which is the AKT inhibitor and the FGFR inhibitor, which is ARQ 087.

Priority #2 is to test property combination of AKT and FGFR and eventually bring into that picture c-MET tivantinib as well. But we are going to be starting with AKT and EGFR, and we have received some very interesting ideas from a number of opinion leaders. So there is excitement out there. And these ideas came through as we were presenting our poster at the AACR.

In addition, looking at the other assets, I have to say that the lack of progress or this reported progress relative with the frontline run in the EGFR category, which is the drug belonging to Eli Lilly. It makes me more skeptical about our commitment to bring forward to Phase II this compound independently. The Phase II trial cannot be very easily patient-directed or biomarker-directed and therefore, they will require quite a bit of capital, which we are probably better off employing as where at this point. And as far as the B-RAF, as GSK comes forward with a combination of a B-RAF and the MET inhibitor and more are due to fall-off, it's hard for us to imagine, continuing to the level of being our B-RAF inhibitor as a single agent. And therefore we'll see through the business [indiscernible] progress, we can find partners to bring forward our drug in some form of combination that would be more competitive than the single agent drug would be.

Now quite a bit of work to do and what is the impact it's going to have on our finances. Well, we're continuing to plan for both tivantinib and also the expanded pipeline of fully compound in a disciplined way. We ended the first quarter 2013 with $119.6 million in cash marketable securities. Our financial guidance remains unchanged and we expect to end this year between $85 million and $90 million in cash and marketable securities. And really, all the one unexpected expense we have to accommodate within this previous year given guidance is the additional cost of the Phase I AKT program.

Now let me give you one last word about the AKT program. You might think that given that the program is being transferred from one company to another, from Daiichi company to -- Daiichi Sankyo to one, there will be a lag time that we will not be able to hit the ground running. Please don't think that because that will be incorrect. Incorrect because we have been executing with ArQule resources on behalf of Daiichi Sankyo the Phase I program for AKT already. So as we regain control of the program, we can hit the ground running because operationally, we have always been there. So the only challenge was to find the capital, which wasn't so much at this point to try this next stage of Phase I activity. And there is no other significant challenge on the horizon.

So this said, let me turn over to Rob Weiskopf for a brief overview of our financials for the quarter. Thank you for your time.

Robert J. Weiskopf

Thank you, Paolo. The company reported a net loss of $5,775,000 or $0.09 per share for the quarter ended March 31, 2013, compared with the net loss of $4,260,000 or $0.08 for the 2012 quarter. At March 31, 2013, the company had a total of $119,641,000 in cash, equivalents and marketable securities. We recorded research and development revenue of $5,661,000 for the quarter ended March 31, 2013, compared with $8,498,000 for the 2012 quarter.

Revenue in the 3 months ended March 31, 2013, is comprised primarily of revenue in the Daiichi Sankyo and tivantinib development agreement. The license agreement with Daiichi Sankyo was for the development of ARQ 092, and the Kyowa Hakko Kirin exclusive license agreement for tivantinib. The $2.8 million revenue decrease in the quarter ended March 31, 2013, is primarily due to revenue decreases of $4.9 million from our Daiichi Sankyo AKIP agreement and $0.3 million from our Daiichi Sankyo ARQ 092 agreement. These were partially offset by a $0.5 million increase in revenue from our Daiichi Sankyo tivantinib program and $1.8 million from a one-time research projects.

Total costs and expenses for the quarter ended March 31, 2013, were $11,581,000 compared to $12,902,000 for the first quarter of 2012. Research and development costs for the quarter ended March 31, 2013, were $8,181,000 compared to $9,303,000 for the first quarter of 2012. These decreases were primarily due to lower outsourced clinical and product development costs related to tivantinib and pipeline programs.

General and administrative costs for the quarter ended March 31, 2013, were $3,400,000 compared to $3,599,000 from the first quarter of 2012. As Paolo stated, our cash guidance for 2013 remains the same as provided at the 2012 year-end call. ArQule expects net use of cash to range between $40 million and $45 million. Revenues are expected to range between $12 million and $15 million. Net loss is expected to range between $28 million and $31 million and net loss per share to range between a loss of $0.45 and $0.50 for the year. ArQule expects to end 2013 with between $85 million and $90 million in cash and marketable securities.

With that, I would like to turn the call back to Paolo.

Paolo Pucci

Thank you, Rob, and both myself and all of my colleagues here at ArQule are available for questions. And operator, if we have anybody in the queue, we can start as well. Thank you.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Howard Liang of Leerink Swann. I'm sorry, our question comes from the line of Ryan Martins with Lazard.

Ryan Martins - Lazard Capital Markets LLC, Research Division

So, Paolo, just on the question around the overall survival. You said that you had overall survival data from tivantinib now from the MARQUEE trial. And you said it was increased, was that statistically significant or you just saw an increase? And are you willing to disclose what those magnitude of increases are?

Paolo Pucci

So let me try to frame the question, make sure that I understand it. So for MARQUEE, we have a data from the final analysis and where we can say and what I have said is that, just as it was in the interim analysis, there is a difference in progression-free survival but there is no meaningful difference in overall survival for the intent-to-treat population, which is the 1,000 patients in the total trial. Then given that there was interest there in significant sub-groups, we have single out 1 subgroup that probably is a greater interest defined by the ASP and we have said that there was a substance in the group, there was in the MET-high group, there was a substantial difference in OS. In the MET-low group, there was no substantial difference in OS. And that's all we can say because we have to protect the presentation to come.

Ryan Martins - Lazard Capital Markets LLC, Research Division

So the PFS in the MET-high group was not different?

Paolo Pucci

Yes, so let me read exactly from my script. The MET IHC subgroup comprised of 445 valuable patients. Of these 445, 211 patients were confirmed to be MET-high as defined by the SAP statistical plan. Okay? The MET-high tivantinib group showed a substantial improvement in OS relative to control. At benefit, there was not seen in the ITT population, okay? of 1,000. Then for the 234 patients that were confirmed to be MET-low after the SAP, no difference in OS was observed and then for both groups, 211 MET-high and 234 MET-low, there was an advantage to treatment arm for PFS for both.

Ryan Martins - Lazard Capital Markets LLC, Research Division

So my question was more, why do you see overall survival benefit in the MET-high group but you don't see any PFS benefit. What do you think that is?

Paolo Pucci

No, so we did see PFS benefit. So in the MET-high group is very consistent because we see PFS benefit that goes to overall survival benefit. That's in 211 patients, right? Then in 234 patients, this is where we have sort of the issue you're saying but the other way that you are spelling it out, the issue is we see a PFS benefit that does not concentrate in OS in the MET-low group.

Ryan Martins - Lazard Capital Markets LLC, Research Division

And also, you said on the pipeline that you plan to have data from 087 and 092 and what the combination trials are you thinking about, what's the timeframe on that?

Paolo Pucci

So for the AKT inhibitor, we are thinking about the next AACR to give updates and is it going to be final data? That we don't know. But now that we have full control then we are going to try to present the data as it comes. And also for the combination, we are now testing the in-vitro combinations and that data is very preliminary for now. But it's also interesting, I have to say, and then we are going to try to present as soon as possible. Maybe Brian has a couple of comments about more specific venues where data will be presented.

Brian Schwartz

So, Ryan, just we received the AKT inhibitor back from Daiichi relatively recently. So have started working on the combinations and with key opinion leaders since then. So hopefully by the end of the year, either the triple meeting or next year's AACR, we'll be able to show, first, the in-vitro work and then in vivo subset products.

Ryan Martins - Lazard Capital Markets LLC, Research Division

Finally, on the ACC trial that's ongoing, any updates on the speeding rates, I know it was 50%[ph] of your assumption.

Paolo Pucci

No update. We tell you very small numbers. More than I think you an update.

Operator

For our next question, we'll go back to Howard Liang of Leerink Swann.

Howard Liang - Leerink Swann LLC, Research Division

So just a follow up on the MARQUEE data, what was the -- can you confirm that there's no negative overall survival trend in the MET-low group?

Paolo Pucci

In the MET data, the data that I have spelled out is as I have penciled out, I can read it again if necessary, the MET-low group there was a no, there was a trend favoring tivantinib treatment arm versus control. But that trend did not translate in overall, in overall survival. So that the MET-low group in these -- of these 234 patients was not disadvantaged in terms of overall survival.

Howard Liang - Leerink Swann LLC, Research Division

No disadvantage. Okay. Now the -- is the PFS advantage in the MET-high group greater than the PFS advantage in the MET-low group?

Paolo Pucci

The[indiscernible] Much data as we can give to protect -- there's no -- I think analyst and investor have been very keen on having at least to some data before the presentation. We would give more and we would give you more but we have to preserve the presentation hopefully as more. I also want to be clear, as we don't see a regulatory opening in this data. We certainly view that as incremental in terms of understanding of the drug and how to best conduct the biomarket-driven trial and that's as much I can say right now.

Howard Liang - Leerink Swann LLC, Research Division

Okay. SO you mean you can't comment on the KRAS subset and other subsets?

Paolo Pucci

Not yet.

Howard Liang - Leerink Swann LLC, Research Division

Okay, maybe a bigger picture question would this data, would you -- is there enough to free to consider rerun the trial in the MET-high group?

Paolo Pucci

There as well, I have to say, we would have said in the past, we have volume data that will accumulate sometime early next year. It's a MARQUEE data. It's the ATTENTION data. It's the 2 Phase II that are running, one in KRAS and one in the mutant. Now, only looking at the overall body of data sometime next year and obviously, along the way as it accumulates. I think we can consider what our options are going to be. And this excludes any consideration relative to the competition by the way, Howard, which is something that we should consider along the way too. So in my opinion, the outcome of the ATTENTION data is going to be very important.

Howard Liang - Leerink Swann LLC, Research Division

Last 2 questions. Is the assay for MET-high, MET-low in the MARQUEE trial the same as the liver trial. And then for the CRC data, that we're going to see at ASCO, are we -- will we see a subset of MET-high versus MET-low?

Paolo Pucci

The -- I would tell you, I would say this about assay that what we have seen in MARQUEE comparing FISH and IHC where it was available, and remember, we started MARQUEE using FISH because the IHC wasn't available, makes us quite confident that the decision we have taken to go to IHC for the METIV trial is the right one.

Howard Liang - Leerink Swann LLC, Research Division

In CRC, can you comment on it?

Brian Schwartz

Maybe I can just add a few comments, Howard, so the -- in terms of the anti-body for all 3 trials, we're using the same CONFIRM Ventana antibody for the IHC. However, what we've learned over time is each tumor has its own nuances in terms of collection and evaluation. So there are slight differences between each 2 methods and the HCC, we actually have gone through the SPA process, which has much more rigorous then what we went through with both MARQUEE and colorectal.

Paolo Pucci

And the other thing we learned is there are some logistical aspects involved in running this trial and the preference, as I said before, is to have the tumor tested as close as possible to time of delivery of therapy. As I wouldn't exclude entirely archival pictures that the preference should be to test as close as possible.

Operator

Our next question is from the line of Joel Sendek of Stifel, Nicolaus.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

I have 2 questions. First, Paolo, I'm wondering if you can -- on the METIV trials, if you can clarify what you mean by the implementation timeline for 30 months, does that have to do with enroll, is that your method of enrollment?

Paolo Pucci

Enrollment, we have said consistently, Joel, that we expected to complete enrollment 2.5 years out and we said that at the beginning of this year so that would be below 15 that we expect the 6 months for the data to mature to be read out. And that is the conservative timeline that we have kept since we begin to talk about METIV. I need to see the half mark path for the SIV process and I would like to see no less than 80 patients enrolled in order to think about recalibrating. Because with the 80 patients enrolled, we might have screened something like 200 patients and that gives us a better feeling for where we are, where we could be in terms of screen rate. So it might be conservative, Joel, but this is uncharted waters and...

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Okay, I just want to make sure that everything is in line --

Paolo Pucci

No change to -- I mean I can tell, no change as to our previous disclosures.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Okay, and then on 092, the data I saw, I guess it's on your website, with the 20 patients, looks okay, it doesn't look great. I'm wondering if you're going to move to higher doses or anything that you will do to the drug in the development plan to perhaps get higher response rates?

Paolo Pucci

Yes, we can speak to that, Brian, can because...

Brian Schwartz

Joel, I can give you a little bit of flavor on that. So we were originally running the program for Daiichi request in terms of the initial data. It was presented at AACR. But we've learned and most people evaluating AKT program that it's quite important to really push the dose and most successful AKT or B-RAF[ph] kinase inhibitors so far have really been scheduled. So push the dose with a little bit of a break. So we've already instituted, as Paolo said, it was a very smooth transition. So we've already instituted that type of strategy in the Phase I to push the dose and to try and limit the toxicities with the hope that we'll see some of efficacy or some of the other AKT inhibitors.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

What is the tarcs[ph]?

Brian Schwartz

So right now, it's very similar to the other AKT inhibitors in that it's a high blood glucose and a little bit of rash. The rash is a little bit different from the other AKT inhibitors in that we already have 1 patient with grade 4 and the rash is quite manageable once you stop therapy. So the thinking and discussions with the investigators is that, we should be able to go much higher than some of the other AKT inhibitors in terms of exposure in dose.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Got it. Okay, and then once you do that obviously, you're all over the place as far as the cell tumors maybe signal will come out as to where the best efficacy will be or do you have any view on that now?

Brian Schwartz

I think that right now Phase I is really focused on safety but what we've also done is maybe expand it since we took over the program. Expanded the program a little bit into not only looking at solid tumors but also looking at lymphomas, which may give us some early in productivity of this class of drug.

Operator

Our next question comes from the line of Adnan Butt from RBC Capital Markets.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

A couple on non-small cell lung cancer. First, how is MET-high defined in MARQUEE and then secondly, can you estimate the number of non-small cell lung cancer patients who might have MET-high expression. And then, on again on ATTENTION would similar analysis be expected of ATTENTION and that's why the company thinks that a decision to go forward or develop in non-small cell lung cancer could be a 2015 decision?

Paolo Pucci

Sorry, I didn't catch the last question, Adnan?

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

When could you decide a path forward in lung cancer, is that a 2015 event potentially?

Paolo Pucci

Okay, so let me say the last one and then I'll let Brian take the other 2. So was the MET-high definition in terms of [indiscernible] consistent that is between MARQUEE and ATTENTION. As I've said, I don't foresee at this point in time with the information I have from Kyowa Hakko Kirin that we're going to be reading data before very late this year from that trial. And so that's really the trigger. So I don't know that its in 2015 time frame. I think sometime early in 2014, we're going to have all the data we need and if triangulating that data there is a compelling proposition, we'll look at it, provided that the competitive landscape allows it. We always have to think about that but there is a trial right now being conducted by MET and MET-high patients and should that trial succeed, this will set the standard. So, yes, we are encouraged by the data we have seen in our trial. But what is going to be the standard set and that standard is going to be set one way or another. Obviously, if the standard is not set and the stage remains wide-open. Then that's another story. But another 15 assessment, this first half of next year assessment that we need to make. And now maybe I'll let Brian comment on the rest, and I'm speaking just for ArQule, obviously, is going to be up to our partners as well and I cannot speak for them at this time.

Brian Schwartz

Adnan, just to get back to your question. The first thing is, our definition has been similar across all 3 trials in that 50% of the tumors saying 2 plus or greater and we focus on membranes training for the assessment. So that has been our criteria for defining MET-positive all the way through and we use that in MARQUEE and most of the trial that we've actually run. The differences, as Paolo mentioned earlier, between ATTENTION and MARQUEE is revolves really around the exclusion of the EGFR mutant. So they're primarily EGFR wild-type and we also note that the KRAS mutational status in the East is a little bit lower than it is in the West. So we anticipate that there will be some molecular differences. We can't comment a hell a lot of in terms of what Kyowa Hakko Kirin are doing in terms of MET testings but they're all working with the same people we work with, in terms of getting the MET analyzed in a similar way to what we have done and also to incorporating the learnings that we've had along the way.

Paolo Pucci

So we'll have to see how many patients can be read by protocol at the end because this pyramid that's set upfront and so those patients that following the pyramid can be read and reported reliable, those patients that whose reading fall are outside, those pyramid can be included and they'll be part of the IHC. Sometimes with the tissue can be read, sometimes you have not all the data available, sometimes it cannot be adjudicated, that sometimes it's outside of stability window. That we don't know. We will know once the data is opened and they'll tell us how many patients within the specs of the trial. We were quite pleased to have basically half of our patients falling in that window, which gives us a good enough about the phase for the future.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

And just if I can get a follow-up on 092, if anything owed back to Daiichi and when you mentioned additional dosing testing, is that another Phase I or is that an expansion of some ongoing study?

Paolo Pucci

So the last question is in expansion, it's just an expansion to the Phase I and it can be done with the same 2 sites that we are working with right now in the U.S., both of them in the U.S. And as far as owning, is that D&A thing still owe to Daiichi, no, the contract provides that once the program is returned, they don't owe anything to us, we don't owe anything to them. So it's fully unencumbered.

Operator

Our next question is from the line of Chad Messer of Needham & Company.

Chad J. Messer - Needham & Company, LLC, Research Division

I really appreciate that you sharing us what -- with us what you could about MARQUEE. Just one question on MARQUEE, and even if you can hark back to the liver Phase II data, you've seen or looked for any imbalances between MET-high and MET-low patients in AEs at all?

Paolo Pucci

In adverse events, not, we have not observed so far any significant imbalance, but even if information we still don't fully have, like for example, we are not clear yet about so long therapies and the number of other items like this. And therefore, we are communicated only what has been QAed [ph] and has been fully analyzed and has been through protocol but there will be additional analysis to my knowledge, no, at this point in time. But I will be able to answer you with certainty only after the data is presented.

Operator

Our next question comes from the line of Ren Benjamin of Burrill & Company.

Reni J. Benjamin - Burrill & Company

Just very quickly, one, maybe you can go into just a little bit more detail regarding the 092 extension study, you've mentioned that, I think it was Joel, that the changing of the dosing regimen, can you just go through what I guess more specific, what that dosing regimen is and how you came upon that dosing regimen? And as to the timing as to when we might see the final results for this case?

Brian Schwartz

So how that we came about it, we took a combination of some PK modeling, as well as the timing of the adverse events. As we present it at the AACR between 2 and 3 weeks patients glucose started creep up and then we reached maximum exposure up for about 7 days. So we took those 2 different things into consideration and have implemented a one week on, one week off schedule increasing the dose and moving forward. We've also taken the advice of investigators to do something, which is similar to what some of our competitors have done is once we established that sort of schedule is to also look at a single-dose schedule as we have a very good safety profile early on. And explore really pushing the dose should we want to go into hematological malignancies. And then the timing is relatively started the one week on, one week off, we anticipate maybe 3 or 4 cohorts of that and then maybe 2 or 3 cohorts with the single-dose. So about another year, as Paolo said, next year, AACR we should be complete.

Reni J. Benjamin - Burrill & Company

Okay. And just can you help us understand here from a competitive point of view, clearly, this is an area of intense focus for a lot of companies, some looking at data sparing inhibitors and engineering inhibitors that hit one nice one versus another, how does 092 with the current data position itself among the rest of the competitors?

Brian Schwartz

So it's having, I could talk a little bit about how the Daiichi looks at it in a way and then some of our thinking moving forward. So most of the preclinical work was concentrated on PR 3 K mutations and breast cancer in combination with chemotherapeutic drugs. It was the primary focus and some AKT amplification on mutation. That was the primary focus of Daiichi. What we've learned since in the large data set that Daiichi have generated that we will present at our upcoming meetings that there are number of sort of rare tumors where we saw sensitivity and that is one of the reasons why we're moving into the lymphoma space and some other tumors, which we think may be more sensitive to this drug than some other comparators tested. However, as you said, it's a very competitive space and most of the big tumors are being extensively studied by either the AKT or the new PR 3 kinase.

[Technical Difficulty]

Operator

Ladies and gentlemen, please stand-by, we are experiencing technical difficulties. Ladies and gentlemen, thank you for your patience. We will now resume the conference.

Paolo Pucci

Hello, Ren. Sorry, but we got disconnected somehow. Ren, you there? What we are a little bit in the infancy is thinking through the potential combination between AKT and FGFR but there are a couple of opinion leaders that work in the field of female specific tumors that were quite exciting in understanding that there is one company to get the 2 drugs together. This wouldn't be without any challenge because the drugs have a relatively half life, both of them, but it could be very interesting as well. And I think for our next call, we're going to have at least in-vitro data for a few tumor types where we are testing 2 drugs together. And if we see anything of interest, we'll probably report some of that, that doesn't need to be necessarily protected for scientific presentation. It's early on data.

Operator

[Operator Instructions] Our next question comes from the line of George Zavoico from MLV & Co.

George B. Zavoico - MLV & Co LLC, Research Division

Could you just -- I mean, speaking of Daiichi almost like in the past tense, is there -- what is left of the relationship between ArQule and Daiichi?

Paolo Pucci

Well we have to speak based in the past tense relative to the discovery collaboration because that discovery collaboration was fruitful and lasted quite a long time but it came to an end. And I mean, personally and I think from the point view of analysts, to some extent you understand why because the moment Daiichi set our discovery partnership with ArQule did not have in as part of the discovery kinase discovery engine. But 2 years ago to this day I think Daiichi Sankyo purchased the whole of Flexicon in California and Flexicon has a discovery platform in kinase it is largely overlap with our platform. So was it a rational development, what is something to be expected? It was something that was possible to happen on the discovery level. And as far as returning AKT, Daiichi looks into Daiichi Sankyo pipeline, they have a number of small molecules that are engaged in the PIT kinase pathway. And some of those molecules are fully owned. So once you go really exercise of portfolio prioritization then the MTDs for ArQule drugs, which are loaded with royalties are not exactly competitive with those of the fully owned compounds. So we have to speak of Daiichi Sankyo in the past tense relative to the discovery because otherwise, we will not be representing accurately the current reality. Well we are not at all speaking Daiichi Kyowa Hakko Kirin in the past tense is the tivantinib, there is an alliance, which is fully engaged, which fully proceeds, Daiichi Sankyo will be the sponsor of the presentation for colorectal ASCO because we will be doing the medical lead for that. There is full engagement in bringing home the MARQUEE trial and don't underestimate the fact that the trial carried on for 3 months after the interim analysis that speaks of commitment, commitment to the drug, commitment to the partnership, commitment to the physicians and the patients. And we still have a Phase III program, that requires attention from us from Daiichi Sankyo. And for Kyowa Hakko Kirin, the trial is even earlier than that. Their trial hasn't finished yet, and ATTENTION trial. So we're speaking on 2 levels but we're speaking truthfully on both levels. We have seen this engagement which is rational and could of been expected on one front and we see continuous engagement on the others. We do nothing but representing reality as it is today, George.

George B. Zavoico - MLV & Co LLC, Research Division

Regard to the assets from the discovery collaboration, you said you regained over all rights, Did Daiichi retain any future royalties? It's fully in your hands now, completely, no future obligations either way?

Paolo Pucci

No,and equally I have to say we have to make Sankyo and Kyowa Hakko Kirin the same obligation we always had for the last 4 years, 5 years relative to tivantinib. So tivantinib is fully encumbered by those partnerships.

George B. Zavoico - MLV & Co LLC, Research Division

That part hasn't changed at all in other words?

Paolo Pucci

Fully by those partnerships.

George B. Zavoico - MLV & Co LLC, Research Division

Okay, with regard to IHC screening, depend on the diagnostics that you have, you already said you went from FISH to IHC. And with regarding in the METIV trial and if you move forward in the MARQUEE subset eventually next year or the year after that, how accurate and what's the precision of sensitivity of the IHC, you going to have a central review confirm investigator results from this campaigning diagnostics, how much variability is there site to site in the test?

Paolo Pucci

For IHC, I can say that we are planning to stay with the IHC trial. We are -- we have contacted bound as to partners and that's as much as I can say, George, and the rest is in the trial protocol and every trial has a difference. Some trials have central reviews, sometimes trials don't have central reviews but the competence and the quantity of IHC set and the process that goes with it, those with experience.

George B. Zavoico - MLV & Co LLC, Research Division

And final question, I mean, you've learned a lot about companion diagnostics and subset subgroup analysis in MARQUEE, you're applying it in the METIV trial, how are you looking at those lessons learned with respect to 092 and 087 in terms of going forward with that clinical development, do you expect companion diagnostic development there as well?

Paolo Pucci

It depends. And it's going to vary, it's not going to be the same between FGFR and the AKT so far what the sentinel has been for AKT has been really global more than anything else but, Brian, you might want to add.

Brian Schwartz

I think, George, for AKT, there's a lot of prior work that's been done both looking at mutations down the pathway and amplifications of different down that pathway as well, for example, AKT amplifications, et cetera. We will be sticking to those, which are much easier tests to work with and evaluate things that biomarker strategy for the AKT inhibitor and most of that work has been done in CRC kinase and AKT mutations so anticipate to continue down the road. The FGFR literature is emerging. So you now have FGFR amplify, you have FGFR mutations and you have recently FGFR price[ph] locations, So the FGFR we try to stay abreast with it we're looking for sweet spot of the FGFR biomarkers that right now it's still very, very early on.

Paolo Pucci

And, more than lessons learned it's more of a process of also tools available because, remember that, at some point in time, all that could be used was FISH and then only recently the tools have changed. So I wouldn't just say it's a lessons learned, it's a component of it but it's also availability of tools and the refinement of these tools over time. And that's why for METIV, we have an SPA for both the drug and companion diagnostic.

Operator

No further questions. I would like to turn the conference back to management for any closing remarks.

William B. Boni

Thank you, everyone, for attending the Q1 call. We look forward to staying in touch with you and to the extent required, I'll be following up with you today and in Q3. Thanks a lot. Take care.

Paolo Pucci

Thank you.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect. Have a great rest of the day.

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