Cell Therapeutics, Inc. (NASDAQ:CTIC)
UBS Global Healthcare Conference
May 21, 2013 2:30 pm ET
James A. Bianco - Principal Founder, Chief Executive Officer, President and Executive Director
So I'm [indiscernible]. I cover biotech space in Europe for UBS. I just would like to introduce Dr. Blanco, CEO for CTI. So you can have probably a 25 minutes presentation.
James A. Bianco
Thank you. Good afternoon. As is typical of the presentations of this variety, we will be making forward-looking statements and as such, we refer you to our SEC filings for more information on the company and its programs. As you may know, last year, we reentered the commercial realm of biotechnology with the approval of PIXUVRI in the EU as the first approved drug for patients who have failed 2 or 3 prior lines of therapy who have aggressive B-cell lymphoma. We launched that product. It's currently available in 8 countries, help you, wherever you are, with the reimbursement process and what we see what the market size looks like. And we did have 1.1 million in net sales or about EUR 846,000. We are in discussions with potential commercial partners to take PIXUVRI in other parts of the world, in Western Europe, Russia, and Latin America -- and South America, excuse me. Secondly, last year, we made a very important product acquisition the, asset acquisition for Pacritinib. It's becoming very clear that this is a differentiated JAK2/FLT3 inhibitor. We'll update on profile our plans for the product in Phase III. As you know, we started the first of those 2 Phase III studies. We should conclude our regulatory discussions with the FDA and subsequently, the EMA and be the imposition to potentially start that study in the fourth quarter of this year. And then lastly, our third focus this year is really to look at trying to leverage these assets, to allow us to raise additional operating capital in a non-dilutive format. So partnerships for Pacritinib, x U.S. and then kind of our commercial channel partners for PIXUVRI.
These are our current clinical studies. As you know, we have a post-maketing commitment study we'll discuss, and then as I mentioned, the 2 Phase III studies for Pacritinib. But I don't want to forget these investigator-sponsored studies that are actually generating a fair amount of very interesting and encouraging data. If you look at Opaxio, we're going to have data radio sensitization at this year's ASCO. Importantly, the frontline maintenance study of monthly Opaxio for a year in ovarian cancer patients among being conducted by the National Institutes of Health, GOG or GYN oncology group is finishing up it's enrollment. It has its first futility analysis in January. We expect the second of the fourth futility analyses and potential stopping criteria for success to occur this summer. Secondly, Tosedostat, in the frontline setting in combination with low [ph] Ara-C or in combination with decitabine, is also generating some very interesting data, and we hope to that available by year end. And then lastly, brostallicin, which is the minor groove binding agent that we get from our SMi acquisition, the north central Cancer treatment group at Mayo Clinic will present some data this year as ASCO and triple-negative breast cancer, So good data flow, not a lot of expense from our side of it, but it allows us to look for the appropriate signal or to have a federally funded cooperative groups, really, to take trials through their Phase III program.
And so let's talk a little bit about our objective of growing use and adoption for PIXUVRI in the EU. Let me just give you some background on what the market size is, how it's currently treated and how we think that this product provides an unmet medical need, or fills an unmet medical. As you know, there are 36,000 cases in the EU of aggressive B-cell non-Hodgkin's lymphoma each year. Frontline treatment, its current standard of care is typically are chopped. That regimen contains a very potent anti-cancer agent called doxorubicin, belongs to this family of anthracyclines. They issue with doxorubicin is, you fail that the frontline treatment setting, it is typically not reintroduced into the second-line treatment or beyond because of the risk for cumulative cardiac toxicity. And so second-line regimens were devised to not include anthracycline base, but rather to use a high-dose Ara-C and/or high-dose cisplatin. And that setting, you can salvage about 5% of the patients who relapsed. But unfortunately, the other 95% are typically not offered curative therapy in the third-line treatment setting before PIXUVRI. The treatments have been mostly palliative or participation in clinical trials.
So PIXUVRI was developed by the old Boehringer Mannheim oncology group in Milan. Subsequently, when they were acquired by Roche, it spun out as a new company called Novuspharma, which we acquired in 2004. And its unlike other anthracenediones or anthracyclines doesn't have those structural motifs that lead to the generation of cardiac toxicity. And importantly, it's mechanism for cell killing is distinctly different from the other classes in these agents, not a top otillin [ph] inhibitor and it's not an interculating agent. It actually is a DNA alkalator, and we have some pre-clinical data that is being submitted for some meetings in the upcoming future that really distinguishes this drug from the other class. And we think that's why we saw some very dramatic results in the randomized clinical trial, what we call the PIX301, which was the basis for the marketing authorization in Europe. And that data is shown here, just in kind of a summary. And the data that we submitted to the EMA, we treat any line of therapy beyond second-line, so third through seven. The EMA said in our label that, when you use this drug in patients who are multipally relapsed at fifth, sixth or seventh line, you really don't have a benefit there. But if you look at the third and fourth line setting compared to the physicians choice of active comparator, so single agent to single agent, we had a 28% CR versus 4% in the comparator group. Importantly, those CRs lasted for, on average, for 9.5 months. And in fact, if you had a CR, 67% of them were alive at 2 years. Overall response rate, almost half of the patients having an objective tumor response versus 12%, a 50% reduction in the rate -- risk of dying or progressing over 2 years. And an immediate difference of 7.1 -- 6.1 months in overall survival.
That is data, when we showed this to lymphoma specialist in the EU and at our advisory boards, that is the type of results that they're getting with the toxic multi-agent regiments in the second-line treatment setting. So R-DHAP rise, that's where they see a 25% or 30% CR rate. So the ability to offer a patient in a third-line setting a CR in almost 1/3 of the cases, provides them something that they haven't been previously had as an option. And that's to reintroduce curative intent with autologous stem cell transplant. And that's really kind of the breakthrough excitement that we're seeing from the lymphoma specialists throughout the EU.
Talk a little bit about the launch in -- if you're familiar with a fair amount of a different regulatory hurdles that one has to deal with after the excitement of getting the marketing authorization, and that's the whole process for reimbursement. So there are 8 countries where you can go to market with your pricing and be reimbursed by the sick funds and by the statutory health funds that is -- that are listed here. We did that it in January of this year. Our field force, we have been utilizing Quintiles. They have a very good cost-effective model, where we hire employees from them, we train them, we detail them, we deploy them, but they're still Quintile employees, and all the back-office operations et cetera, are all covered by Quintiles. That's been very effective for us. We have done several in-market research studies, Cancer Health from Europe has done that, and they see the market size being about 20,000 patients. And if you penetrate about 35% to 40% of that market, you should have about 8,000 patients at peak. To give you a sense where we are with price, we're currently going at about EUR 680 per vial. We anticipated about 36 vials for 4 cycles of therapy, which was the median that we saw in our clinical study. We now understand that the body surface area in certain European countries is larger than what we predicted here. So the actual estimates are closer to about 48 vials for 4 cycles of therapy.
So -- and as I mentioned, the reimbursement, you may have seen the GBA announcement, the news there that was positive was that because there's no reference agent for them to have compared us to being first to market, has that little quirk. It's kind of a Catch-22, but they did, was they recognize that the price we went to market is, is only marginally higher than what physicians are currently doing and being reimbursed for in Germany, and therefore, we start negotiations with the statutory health funds, and we actually have that meeting already set up for mid-June.
Think, they're with NICE. So we think we'll be successful with coming in within the price curve that we're targeting in the EU. We hope to make that progress and announce that through the summer, certainly with the GBA and with -- in the U.K. with NICE. And as I mentioned, there's certainly, a lot of interest in companies that have commercial products, where they have -- other companies have established infrastructure. Obviously, its pure profit, and no matter what the margin split, it's money that goes to their bottom line. So we feel pretty confident that we will establish a commercial partner for territories that we don't plan on marketing in ourself.
I mentioned we have a post-marketing commitment study underway, given that we have conditional marketing authorization from the EMA. This study, unlike the first trial, is going to look at the combination of rituximab, which with PIXUVRI, compared to rituximab and gemcitabine or GEM-R as it's called in Europe, is a frequently used double therapy. And this study will look at second, third and fourth line for patients, and second-line setting, who are not transplant-eligible. The initial endpoint was overall survival. This time, we're thinking that, that would require 350 patients. We know that the EMA told us that PFS would be an acceptable endpoint for that study. We went with overall survival initially thinking we would file that in the U.S. as it's sole trial. But now, upon reflection, PFS as an end point is acceptable. If we did that, sample size will be reduced to about 220 patients. We'd be able to finish that study late 2014, early 2015, have data for the EMA, and more importantly, if the PFS data is compelling, we would consider whether or not that would be applicable for accelerated approval in the U.S.
Let me move on to pacritinib. As you know, this was an asset that we acquired in June of last year. Just by way of background, it's a JAK2/FLT3, so unlike ruxolitinib, it is not a JAK1, JAK2 inhibitor. The reason that, that is important, as you know, JAK2 is an activating mutation that has been identified as a causative or at least contributory to myeloproliferative neoplasms like to myelofibrosis, leukemia, lymphoma, so there's a fair amount of diseases where JAK2 activation and/or the downstream activation of Stat3 or Stat5 are playing a role in the so-called phenotype of the malignancy underscored. And FLT3 is certainly a very commonly found, about 30% of AML patients will have that activating mutation. And the interest here is that unlike typical JAK2, JAK1 inhibitors, what differentiates pacritinib is that, it doesn't appear to have the treatment emergent myelosuppression. So over time, patients don't have suppressions of their platelet production or their red cell production. And that allows for patients to maintain our therapy for the therapeutic benefit without having to come off or lower the doses because of that side effect of the drug, not the side effect of the disease. And obviously, with the FLT3 being a very important target in AML and the recent publications that, in addition to FLT3 and the overcoming of that resistance is due to JAK2 activation, is a good scientific rational for putting a JAK2/FLT3 inhibitor in FLT3 positive AML as well. So we think, this isn't just the myelofibrosis drug. Clearly, this has application across a broad array of immunologic malignancies. We do have work in designation for it . The productibility in the U.S. and the EU. And as you could see, we have a good patent life on the chemical entity itself.
So by way of background for myelofibrosis, if you're not farmiliar, this is, like CML, it belongs to this group of myeloproliferative neoplasms. It is a malignancy disorder at the bone marrow, where it triggers an inflammatory response and that inflammatory response results in fibrosis in the marrow. So the marrow can't make enough cell, so the extra marrow [ph] layer or extra marrow organs, the spleen and the liver, take over. And they get large and very large, and that's where most of the symptoms for this disease emanate from. But as the marrow continues to get fibrotic and the liver and spleen can no longer compensate for the marrows inability to make enough cells, this patients' counts will go down, and it will go down to the point where they're severity depressed, and that's usually what they die from in terms of bleeding and/or transformation into other types of malignant diseases. So if you look at the disease, good-risk patients that have normal platelet counts have a life expectancy of 8 to 9 years. When you get into the bottom of this pie, which where platelet counts now are below 150,000 or even as low as 50,000, less than 50,000, these patient's life expectancy are totally different than the other group. They're about anywhere between the 2 and 3 years. So they're now at the end of their disease manifestation versus this population, which really are a much better risk population. The reason I focus on this group is, this group is not been studied in clinicals trials, specifically, in the COMFORT-I, COMFORT-II studies, there were excluded. And most of the patients, as a matter of fact, 97% of the patients in both of those studies had normal platelet counts at study entry. And that's important because it's going to show a differentiating feature between pacritinib and the other JAK2 inhibitors, which is now becoming more and more obvious that this is an important unmet medical need, as we have more than a year post-marketing experience with the first one JAK2 inhibitor to enter the market, which is ruxolitinib.
This is how you used to treat this disease. Some of these pre-date even my interest or position in medicine, actually some pre-date my birth. So obviously, it was very antiquated way to try to treat a disease that we didn't have a lot of understanding of the biology. With the cloning and expression of the JAK2 receptor and then understanding about the activation and the mutation in that kinase and the activation of downstream pathways that could lead to the production of these, other side or kinds that cause myelofibrosis and essentially, the marrow to burnout. So interest was in developing inhibitors to JAK2, actually all of the agents are not specific for the Janus Associated Kinase, but rather for the ATP binding domain on those proteins. One of the issues, if you inhibit JAK2, JAK2 is how thrombopoietin and EPO signal to make platelets and red cells, respectively.
So it was always known that if you inhibit this particular pathway, you may cause anemia and thrombocytopenia as a side effect of the therapy. Why some do agents do that and others don't is still under investigation. But clearly, there are other hyper domains, which ATP binding maybe a different view from marrow to molecule and allow accessory pathways to still stimulate marrow production of these cells while blocking the activation of JAK2 in terms of its malignant phenotype.
Importantly, if you block the clonal abnormality, there's a well-type anticlonal JAK2, this B167F [ph] is the clonal abnormality, and the belief is, this will behave like CML. In other words, if you can get allele burden reduction down to 0 or "molecular remissions," will you modify the disease and ultimately cure the disease? And I think that's going to be an important aspect of what people are going to be looking for when we see the Jakarta data. We certainly have not seen that in the COMFORT-I,COMFORT-II studies. Just to put this back into perspective of kind of what it means for the patients, the panel on the left is a patient that has a massive splenomegaly. This is a typical patient that is advanced with myelofibrosis. You can see their ribs. They can't eat. That spleen is way up inside, squeezing their stomach, so they become malnourished. They have other reasons for the muscle loss and wasting. This is within 1 month of treatment with ruxolitinib. And you see normalization of their abdomen. You start to see muscle back in the chest. So it is really dramatic. I mean, you do not see this with anything that we currently have available prior to the discovery of the JAK2 inhibitors.
So this was a table from the journal blood from 2011. This is Dr. Tefferi from the Mayo Clinic, and one of the JAK2 myelofibrosis experts, if you will. And what this really looks to point out, if you look at change in symptoms, in the clinical studies that have been reported to date, they all cost about a 50% or greater reduction in symptoms, whether it is ruxolitinib, pacritinib, the cytopia drug or the old TargeGen drugs that Sanofi has. If you look at physical exam, where you're measuring the spleen with your hands, and looking for and seeing shrinking by 50% or more, again, you see the same magnitude of benefit across the studies that have been reported. And then, when ruxolitinib was in it's pivotal trials and the FDA wanted an objective measurement that could be audited i.e. MRI volumetric measurements, again, that's what this is. So if you look at spleen reductions of 35% or greater by volume and MRI, again, 29 to 42, 31%. They're all in the same range. So how did they differ? And this is turning out to become an absolute critical differentiating factor. The pacritinib trials had no cut off for platelet levels, whereas the ruxolitinib trials excluded patients who started to become thrombocytopenic, and the same is true for the TargeGen and the cytopia products. That's because they cause thrombocytopenia. And so pacritinib had none -- and I'm going to show you some of that data in terms of both response and response by platelet level. Our side effect is nausea and diarrhea. That's seen with any of the FLT3 antagonist, like you do here with Sanofi the product. With early intervention, 93% of this happens in the first 30 days. It always starts out mild, and if you had missed it and it progresses to severe, then it's going to be hard to treat. If you treat when it's mild, it goes away, they accommodate to it, and you never see the grade -- the severe grade 3, grade 4 development
So this is a typical plot. This looks at the percent change in spleen size for these patients over time. 100% means that for these patients down here, these 14 patients had complete resolution of their splenomegaly. So their spleens went back to normal size. And if you look at patients who had a response of 50% or greater, that's 40%. And then, if you uses the MRI, not all of these patients had MRI, so just in the 26 that did where they had a baseline, you had 8 to 26 or 31%. This data is not unique. This is ruxolitinib. This is all of the JAK1, JAK2 or JAK2 inhibitors. And the point here being is that, the efficacy is comparable across the class.
Now this data is unique because nobody else can show data like this, because nobody else has treated patients who have less than 50,000 platelets in this moderate intermediate group of thrombocytopenia, and then of course, greater than 100,000. In our clinical trial, medium was like 92,000, so most of our patients were thrombocytopenic. And you could still see that you get spleen responses. They are small numbers, but again, if you look, the trend is always in the same magnitude of benefit.
And again, looking at the same time points that were done standardized in the COMFORT trials. What about their symptoms in thrombocytopenic patients? Again, patients to get study entry had to have a criteria of a symptoms score of 4 or greater. So for that symptom, if you see a minus 4, that means that, that went away, right? They had 4 better and it's now improved. And the difference in the bars would be, cycle 4 is 4 months of therapy, 7 months of therapy, 10 months of therapy. And these are the very symptoms that they record on the MFSAS, which is a symptom assessment score. And you could see that some patients having pretty dramatic reductions, again, similar to what you see with ruxolitinib and the other JAK2 inhibitors with the exception of, these are thrombocytopenic patients, and that hasn't been reported for any of the product other than this.
All right. This is the just the Phase I data. We had started looking at long-term, follow-up with the Phase I patients, starting with about 38. And remember, Phase I is, dose escalations, various doses. Despite that, at 96 weeks, 1/3 of those patients, 10 of 38, that may not be -- it'll be a little less than 1/3, had a 40% reduction, maintained a 40% reduction in their spleen from baseline assessment. And you can look at the 72 weeks, they still were in that primary target of 50% or greater reduction splenomegaly. So very durable effect, and the other thing that's underscored is, is that you can be out in 96 weeks, still be on drug without developing thrombocytopenia. In fact, no patient had to stop dosing because of it's a myeloproliferatic [ph] toxicity.
Phase III programs are pretty straightforward. This one, we initiated in January. It would be at about 85 to 90 centers throughout Europe, Australia, Russia and a few in the U.S. Roman time, about 14 months. This study is going to be pacritinib versus of best available therapy, but no JAK2 inhibitors. So we want to take all comers, any platelet count, high or low or normal or low, and see how pacritinib does in a better-risk population, as well as in a high-risk population. It is around -- it is a 2:1 randomization with cross-over, and the primary endpoint is the FDA and the EMA-accepted threshold of 35% reduction in the spleen size at 24 weeks.
That PI in this study, Claire Harrison and Ruben Mesa, as you may know, where the PI is on the COMFORT-II trial. So many of the same centers there participated in the study. The second study that we're seeking advice from the FDA and the EMA is a study that nobody has done before. So this trial is going to take patients who are thrombocytopenic at study entry. So less than 100,000 patients -- platelets. And in this setting, the best available therapy will include ruxolitinib. So if you're on ruxolitinib at a lower dose and your spleen is big and your symptoms are back, that's the best available therapy. If it's not working as well as it used to at the higher doses, you can get randomized into this trial. You'll either stay on the low-dose as long as you can, if you can tolerate it or you will come off therapy, or you may get randomized to switch over to pacritinib. Very important study for us because it really does essentially solidify the theory or actually, the hypotheses that we don't cause myelosuppression. You can stay on therapy longer ruxolitinib does at lower doses. It's not as effective as it is at its approved doses in the 20 to 25 milligram, twice-a-day dose. So that's really the goal of the study, is to show that pacritinib can be beneficial even in patients who are intolerating ruxolitinib, or are only subject to other best available therapies because they came off of a JAK2 inhibitor that wasn't working.
That study, we expect fourth quarter, about a year for enrollment. And again, as you know, Doctor [indiscernible] is -- was the PI on the COMFORT-1study here in the U.S., and he's another expert in this field from Mayo Clinic.
So the takeaways for this product that if you don't have treatment emergent myelosuppression, that allows you to: a, to treat patients who have pre-existing thrombocytopenia, get a therapeutic benefit without having to take them out of the drug because of toxicity. That could be longer duration of therapy. We get to see that longer duration of therapy may translate into better clonal extinction and better disease modification and potentially, on a path for understanding how you can combine agents for cure. I think that's the other point here. If you don't have a myelosuppression, the field is now moving to combining other agents with JAK2 inhibitors, HDAC inhibitors, Hsp90 inhibitors, some of the hypomethylating agents, lenalidomide, they're all of interest in this disease. However, they have myelosuppression as a side effects, then you have overlapping myelosuppression, which makes it problematic to dose them adequately. And then lastly, the duo-motive action, the JAK2/FLT3, there are series of high-ST studies that are being planned from memorial to the cooperative groups in Europe, a lot of interest in putting this into AML, and that should generate some visibility of data in AML, certainly, by late next year and into 2015.
We talked about being focused on growing the commercial business, and then of course, leveraging some of these assets to bring in some operating capital, not through an increase in capital raised in terms of equity capital.
So in closing, we have a market cap about $130 million, 112 million shares outstanding, $44.3 million on the balance sheet as of the end of March. Our OpEx is about $5.3 million per month. We've been sticking within that guidance, again, for this much, for these 3 programs going on in the commercial effort. That's a very reasonable burn. Clearly, the offset to that burn would be a partnership in pacritinib.
All right. So clear messaging in terms of adoption, Phase III trials, partnerships, getting reimbursement and then making your numbers on the sales side of it in 2014. So I thank you for your interest and attention. I believe we have a breakout room if you have any questions. Liberty 1 and 2 is the breakout room.
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