Array Biopharma Inc (ARRY) CEO Discusses Top-line Results From ARRY-502 Asthma Trial (Transcript)

Jul.23.13 | About: Array BioPharma (ARRY)

Array Biopharma Inc (NASDAQ:ARRY)

Top-line Results From ARRY-502 Asthma Trial

July 24, 2013 09:00 AM ET

Executives

Ron Squarer - CEO

Kevin Koch - President and CSO

Analysts

Cory Kasimov - JPMorgan

Ted Tenthoff - Piper Jaffray

Howard Liang - Leerink Swann

Steven Wiley - Stifel

Matthew Andrews - Wells Fargo

Yun Yang - Jefferies

Operator

Welcome to the Array BioPharma Conference Call. My name is Don and I will be the operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I'll now turn the call over to Tricia Haugeto. Tricia, you may begin.

Tricia Haugeto

Thank you, Don. Good morning and welcome once again to Array BioPharma's conference call to discuss our top-line results from ARRY-502 Asthma Trial. You can listen to this conference call on Array's website at www.arraybiopharma.com. Also, we are using slides today to accompany our remarks. The slides can be downloaded on the Investor Relations homepage of our website. In addition, a replay of the conference call will be available as a webcast from our website.

I'd like to introduce Array's Chief Executive Officer, Ron Squarer who will lead the call today. I'd also like to introduce Kevin Koch, our President and Chief Scientific Officer; and Andy Robbins, Senior VP of Commercial Operations and Strategy who will be available to answer questions as needed. But before I hand over the call to Ron, I would like to read the following Safe Harbor statement.

The matters we are discussing today include projections or other forward-looking statements about the potential future results and ongoing clinical trials to support further development, regulatory approval or the marketing success of ARRY-502 and future plans to progress, develop ARRY-502. These statements are estimates based on management's current expectations and involve risks and uncertainties that could cause them to differ materially from actual results.

We refer you to Risk Factors discussed in our filings with the SEC, including our Annual Report filed on Form 10-K for the year ended June 30, 2012, and in other filings Array makes with the SEC. These filings identify important Risk Factors that could cause actual results to differ materially from those in our projections or forward-looking statements.

Now I would like to turn it over to Array's CEO, Ron Squarer.

Ron Squarer

Thank you, Tricia. Good morning to everyone and thanks for joining the call. We're pleased to share results today of the positive Phase 2 study of ARRY-502 in asthma. I am starting on slide 3. Asthma is a highly prevalent disease, both worldwide and in the U.S. with over 25 million patients suffering in the U.S. alone. A high percentage of patients are poorly managed on existing therapies.

The burden of asthma continues to be very high costing, for example the U.S. society approximately $56 billion annually when taking into account all direct and indirect costs. As a result the commercial opportunity for a safe and effective oral product with a novel mechanism of action is large, as evidenced by Singulair's 2011 sales of $5.5 billion. In fact no oral medication for asthma has been approved by the FDA since Singulair roughly 15 years ago.

Turning to slide four, I would like to provide more details about 502. Despite the availability of a number of a treatment options as we showed in the prior slide, the ongoing burden of asthma remains extremely high. This is partially due to the large proportion of patients not being well controlled on current medications and also due to poor compliance with inhaled drugs. By some estimates as many as 80% of asthma patients are poorly controlled at this time.

The CRTh2 mechanism addresses a pathway not specifically targeted by existing asthma therapy and the Th2 gene signature spans mild, moderate and severe persistent asthma. For competitive reasons at this time we're not disclosing the specific Th2 related biomarker referred to in the data which we are presenting today. In the past however we have disclosed that we evaluated a number of Th2 related biomarkers including (inaudible) PGDM, squamous cell carcinoma antigen 1 and 2, Feno (ph) Periostin, TARC (ph) and IGE.

So now on slide five, I would like to review the design of the Phase 2 study of our selective oral CRTh2 antagonist ARRY-502. We enrolled 184 patients with mild to moderate to persistent asthma randomized one-to-one to ARRY-502 200 milligrams BID or placebo. The study was designed to measure the change in pre-bronchodilators forced expiratory volume and one second or FEV1 over a 28 day period.

In addition, we pre-specified a series of key secondary endpoints to further inform the clinical activity and safety of ARRY-502. As we mentioned, we used a number of Th2 related biomarkers to select patients and believe that overall the patients recruited into this study represent approximately half of all asthma patients.

Turning to slide six, we are pleased to announce that we achieved a statistically significant result on the primary and several key secondary endpoints in this trial. Across all ARRY-502 treated patients, we observed an FEV1 improvement of 3.9% versus placebo, achieving statistical significance.

A previous line endpoint using the median baseline value of a Ph2 associated biomarker was also evaluated. Importantly, patients in this population, which represented half of our treated patients, achieved a statistically significant enhanced improvement in FEV1 of nearly 7% versus placebo.

Now by inference this group would represent approximately 25% of all asthma patients. So to review we believe, our total enrolled study population represents half of all asthma patients while the pre-specified subset with the nearly 7% FEV1 improvement represents approximately 25% of all asthma patients. As I mentioned earlier, we are not describing the specific biomarker referenced here at this time.

To put the results into perspective, we are also showing how the results of our Phase 2 four week trial compare to results from a Phase 2 four week trial with Montelukast of Singulair in asthma patients and are encouraged by the results.

We are further encouraged to have achieved statistical significance on several key secondary efficacy endpoints; including reduced short-acting beta agonist use, asthma control as measured by the asthma control questionnaire, forced vital capacity improvement and symptom free days during treatment as well as improvements in asthma and asthma quality of life questionnaires. For competitive reasons, we have not provided detailed results on all endpoints captured in this trial but look forward to sharing these results overtime in relevant scientific forums.

So now on slide seven, we’re pleased to share the detail of ARRY-502’s attractive safety profile. Positive safety and tolerability are critically important for any potential asthma treatment. In this trial, the frequency of adverse events was lower for ARRY-502 than placebo with no serious adverse events observed on ARRY-502. Further, we observe fewer asthma exacerbations on 502 versus placebo and importantly only one exacerbation led to discontinuation compared to five in the placebo group. Finally, there were only four dropouts in total in the ARRY-502 group compared with 11 in the placebo group.

So now summarizing on slide eight, ARRY-502 is the first oral drug since Singulair was introduced 15 years ago to demonstrate clinically meaningful activity in allergic asthma. With a novel mechanism and attractive safety profile, it has the potential to address some of the high unmet need which exists in the large asthma market.

Based on the results from this trial, we believe further studies are warranted and we are seeking an appropriate partner to develop ARRY-502 to its full potential. It is possible that future trials could include combinations with existing standards of care and pediatric populations.

I will now turn over the call to the operator for Q&A.

Question-and-Answer Session

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions). Our first question comes from Cory Kasimov from JPMorgan. Please go ahead.

Cory Kasimov - JPMorgan

Two of them for you. First of all I am interested in the timed course of response here. Do you expect that the benefit with 502 and FEV1 would improve over time as it apparently did with Singulair? They went to phase 3, the FEV1 difference I believe was 9%. And then my second question is more strategic and to the extent you can talk about this, what’s a reasonable timeframe for which we can expect a partnership and do you expect this to be meaningfully different from your pain drug 797 that had phase 2 data last year and I know you are in talks with?

Ron Squarer

Let me start with the partnering. I think as evidenced by a recent deal on ARRY-380, our selective oral HER2 that it’s important really to find the right partnership and structure and deal for the product. Clearly here we are going to be looking for an experienced partner who can really generate the value that’s appropriate for a drug of this type.

It would inappropriate for me to speculate on the timing here. However, what I can say is that we have had conversations with a number of key players in the field and there appears to be substantial interest. We have been selective in the details we have provided this morning for competitive reasons, but for companies interested in partnering with us, they will have the benefit of learning the full data set and understanding the potential for the product.

Now on your second question, Corey, which was regarding I think the persistence of response, it’s difficult to speculate but I will have Dr. Koch answer that.

Kevin Koch

As you know I have described it to you all. This is really a, (inaudible) IL-4, IL-13 oral drug. So if you believe that in allergic asthma that you might have the same effects you see with Lebrikizumab or Lebrikizumab and Dupilumab; you would expect that moving from a 4-week study to a 12-week study, you would actually enhance response rates based on the data that they published. So I believe that over a 12-week study we would see increased FEV1s.

Ron Squarer

Just to point out the drugs that Kevin was referring to are to the best of our understanding only being studied in the relatively small portion of asthma patients with severe asthma whereas of course this study was in mild to moderate patients, but could have utility in the smaller severe population as well.

Kevin Koch

Also I would like to point out which is part of the slide deck is that exacerbations were decreased quite dramatically, even 20 week – eight day study, and of course that’s an important endpoint for severe asthma.

Operator

Thank you. Our next question comes from Ted Tenthoff from Piper Jaffray. Please go ahead.

Ted Tenthoff - Piper Jaffray

I missed a little bit of the beginning of the call, so I apologize if you went through this is in the prepared remarks, but maybe you can put this in comparison, or put this in perspective for us; in particular around this subset of patients, how prevalent is that and how easy is it to find those patients in the real world?

Ron Squarer

I will just repeat what we believe at this point to be the relevant epidemiology. We believe that our total enrolled study population represents half of all asthma patients, while the pre-specified subset with the FEV of nearly 7% improvement; 7000 FEV improvement I should say, represents about 25% of all asthma patients.

Now the challenge we have in describing how we find these patients, is that we are not at this time being specific about which stage 2 marker we expect to use going forward. But what I will say is that it will be a marker that will be relatively easy to use, that in fact currently is tested and can be tested for both, a primary care setting and in more specialty settings.

And of course as with all biomarkers, which are very important in the development of new drugs, as it becomes more important and relevant to test the biomarker because there is an important effective and safe therapy associated with it, I think the availability and education around the use of that testing that goes up. So we don’t believe it will be a barrier to wide use. Does that help?

Ted Tenthoff - Piper Jaffray

Yes it does and again I mean even in the 3% or 4% delta over placebo at four weeks being statically significant, it’s still meaningful especially as we out longer, correct?

Ron Squarer

Well, you know simply to speculate on the future but I will say the following. One, we are pleased with the tolerability and safety profile to date and so in theory with a partner we may look at higher doses, don’t know what that effect will be but that’s one possibility.

The other is with the safety profile and being oral, there are may be potential to combine this drug with the existing therapies but I would say most importantly there is just millions of patients that just are not well controlled on existing therapies and a drug that has a benefit for those patients is going to be important and then one that is oral of course which has been you know quite illusive over the last 15 years, I think is an important aspect as well.

Operator

Thank you. Our next question comes from Howard Liang from Leerink Swann. Please go ahead.

Howard Liang - Leerink Swann

May be if you can talk about the profile of 502, how they are different from the other similar compounds, from Amgen, Novartis, AstraZeneca, Oxygen (ph).

Ron Squarer

Yes, so I will just give the punch line and then let Kevin go into the science a little bit. The most important differentiation is none of the prior CRTh2 study achieved a clinically meaningful result. What I mean by that is a statistically significant and clinically meaningful improvement in a phase II trial combined with the theoretically important safety and tolerability profile that would be necessary for broad use in asthma and of course, we appear to be been better tolerated than the Placebo arm. So, that’s the most important to differentiation, perhaps the only one that really matter although Kevin can also describe some of the scientific rationale for why we saw this result and they have not yet.

Kevin Koch

Yes, so the clearly the Amgen was a mixed inhibitor, meaning it was a DP1 and DP2 inhibitor, or DP1 or CRTh2 which is another name for DP2 and if you look at the knockout data, they are actually equal and opposite phenotypes and so one would expect that you would not see efficacy with the DP1, DP2. That's the Amgen molecule.

AZ it’s harder to know. We have evaluated it and it was not as potent as our molecule and it had some other metabolic liabilities and I think across this field and this is not the dissimilar to the race to get the first leukotriene D4 antagonist Singulair and other drugs like that is that there are probably 20 drugs put in the clinical development and there is certain design features and physiochemical properties that lend themselves to a successful drug and so the best in class always wins in this space and so I think that, while it’s a long race and a difficult competition we have, today what we think is the best in class drug.

Howard Liang - Leerink Swann

That was helpful. Can you talk about what are the prior therapies or background therapies that are allowed; whether they are allowed on this trial? For example are patients taking ICS or (inaudible) ICS?

Kevin Koch

These patients were all typically allergic, persistent asthma. They were washed out of their prior meds. Their prior meds could include corticosteroids as well as Singulair or other meds and then had a Placebo running and then they were randomized.

Howard Liang - Leerink Swann

Great and last question is on the reasons for discontinuation. I know there are no FAEs on the 502 arm. Can you talk about the other, I just think that there is one exacerbation. Can you about the other three reasons for discontinuation.

Kevin Koch

No we can’t at this time, but they were I would say relatively benign.

Operator

Our next question come from Steven Wiley from Stifel. Please go ahead.

Steven Wiley - Stifel

I know you guys are preserving the data, but is there any color you can provide just on baseline characteristics I guess, specifically as to where these patients were percent predicted at FEV1 and also reversibility?

Ron Squarer

At this point, Steve I'm sorry we're not able to provide more details than what we've provided but as I've mentioned these do represent a very, very large percentage of all asthma patients, the total enrolled about half of all asthma patients the preselected subset had about a quarter of asthma patients.

Steven Wiley - Stifel

And I know some of the competitive compounds are also being evaluated in allergic renitis. Is that something that you think this drug may also have acted in?

Ron Squarer

You know there's a history of this mechanism having potential and allergic renitis and has a very rapid onset of action. So this mechanism I think has a role in allergic renitis. I think also there's a potential role in atopic dermatitis. And so I think this mechanism and this drug in particular could be applied to multiple therapeutic indications which makes it quite exciting.

Steven Wiley - Stifel

And just given that the patients were washed out, can you actually say if the placebo arm increased FEV1 trial over baseline?

Ron Squarer

We can't speak to that at this time.

Operator

Our next question comes from Matthew Andrews from Wells Fargo. Please go ahead.

Matthew Andrews - Wells Fargo

Kevin, two questions for you. Due to the safety profile, do you believe you have room to dose off above 200 milligrams looking at the Phase 1 multiple sending dose study? Looks like there may be room for that relative to the peak exposure for 400 once a day and then second of all, in the past I believe you had mentioned that this study was designed to show a 7% overall delta. Was that for the entire patient population if I'm correct, or was it for this TH2 subset of patients.

Kevin Koch

So I'll take the second question first. Yes we designed it to achieve a 7% overall, detect that but of course a somewhat lower FEV1 delta would also be achieved, at least it's significant. In regards to the ability to dose up, we've shown in previous MAT study the 400 milligram QD was quite well tolerated. This is as you know and I think I've said before that this is a micronized powder and capsules.

So this is not a formulated capsule and so I think with a commercial formulation there could be enhanced benefit to some patients who might not have achieved the exposure that we would have liked. And of course QD drugs have an advantage especially in adolescent populations and we believe the drug has some potential to be turned into a QD drug with the appropriate application of either a novel formulation, a better solid dosage form or some technology to achieve that.

Operator

Our next question comes from Yun Yang from Jefferies. Please go ahead.

Yun Yang - Jefferies

For TH2 subset population, is there evidence that these patients do not respond well to currently available drugs like the Singulair?

Ron Squarer

So I think the question was specifically around the sub population that we examined, is that that assume?

Yun Yang - Jefferies

Yes.

Ron Squarer

So we'd say that across the continuum of half of all asthma patients that we believe were represented in the full trial and the quarter of all asthma patients represented in the subset, that these are patients who would traditionally use Singulair and who would receive benefit from it but two things; one, a large number of patients are not well managed, even while on oral therapy plus other supported therapies and also we know that overtime the effect of Singulair does wane.

And so whether in poorly controlled patients or after Singulair or in combination, we think there is potential role, but generally speaking we don’t think there is a correlation between the efficacy of Singulair and the biomarkers which we selected at this time.

Kevin Koch

Yes, and just to reiterate what Ron said is that there was a recent pay for New England General Medicine looking at Singulair failures after two years. At least 30% become unresponsive and need to move to a new therapy. And so obviously we don’t know why that was, but it certainly could be any with a number of reasons that could be associated with either a Th2 biomarker or not.

One thing I should point out that in the literature of Boehringer Ingelheim actually did a small study adding their CRTh2 compound to inhaled corticosteroids and that was additive, whereas the addition of Singulair to inhaled corticosteroid was not. We think we clearly could utilize those observations and we believe that we would have additive effect of adding our CRTh2 to inhale corticosteroids.

And so I think that’s an advantage of this mechanism over Singulair and I think at the same time unfortunately for Boehringer Ingelheim, they were not able to continue that drug because of liver enzyme increases. And this is what’s play goal of the primary care market drugs is that a very minor side effect their AE can derail a drug and so that’s why having these safety profile we have is really important.

Yun Yang - Jefferies

And then when you look at forced exposure of your volume, meeting a statistical significant endpoint is one thing but the clinically meaningful improvement could be another. So in this kind of trial what’s the kind of percentage improvement is considered clinically meaningful by treating physicians? Is that 7%?

Ron Squarer

So Yun I think first of all I want to point out that any statistically meaningful result in a well-controlled trial, it is important to show that you have an active drug. And while we’re certainly pleased to have shown an affect in our whole population, given as Kevin described patients who would not benefit from existing oral therapies may benefit from this drug, but of course in half of our patients that saw the enhanced FEV results, we think that’s impressive.

So I would also direct you to the quotation which we shared in our press release but it really was a result of a series of opinion leader discussions which we have had, both before and after the results were available to us. Specifically we’re quoting Sally Wenzel out of the University of Pittsburg, who is considered one of the authorities in the space and many of her colleagues have worked with us to evaluate the product and evaluate this data.

And she really does feel that this is a very important new addition and does characterize the drug as demonstrating clinically meaningful activity and potentially offering an important new option to patients.

But with a partner, as we described there is a potential to explore the drug in different settings. We’ve just described a few here. We can’t commit to any of them it would obviously be in collaboration with another party but we talked about dose, we talked about combinations and then it would be about populations as well but we are comforted by the fact that we are talking about even half of asthma patients being 12million patients and a quarter as asthma patients representing 6 million patients just in the U.S., that there is a very important market here.

The other thing I’ll point out Yun, and we’d love to share the data over time, we’re not doing it today. But you recall, we indicated that we hit statistical significance on a number of secondary endpoints, some of those based under discussions with the absolute thought leaders in this field are more important than others and some to them were very impressive. But at this point we’re not going to be providing the details, although you might note in our list, we include things like reduction in short-acting beta agonist use, so reduction in SABA use.

And so there is more evidence of meaningful and clinically meaningful activity. I think anytime you can spare other drugs and improve the way patients are managed can be very important. Did that help Yun?

Yun Yang - Jefferies

Yes, that’s helpful. And when is the data going to be presented at a medical conference, the details.

Ron Squarer

So, at this point we haven’t specified that. The issue is, we are and has been quite focused additionally in oncology as you all know as all of our folks who track us will know, the standards for releasing data are different in cancer here because of the competitive nature of the field. We think that partners will wish us to keep as much of this data to them as possible and we believe that’s been the tendency or trend in this field. So we’re going to have find the right balance working with a partner to determine how to present that. So at this time we can’t provide more detail. Okay Yun?

Yun Yang - Jefferies

Yes. Ron, you mentioned earlier that you have spoken with several professional partners. Were they waiting for this data?

Ron Squarer

So, I think the short answer is yes. As I mentioned, there hasn’t been a lot of innovation in asthma at all over many years. Unmet need as we described few times stay very, very high and the concept of an oral, safe and meaningfully affective oral has been quite illusive.

So, certainly we’ve been chatting with them over time but we expect those discussions to increase at this point and I'll reiterate that we are unable to provide guidance as to when we may enter into a partnership and we reserve the right to be patient and wait for the right partnership over time. We think that that can be important and we certainly have the strength as a company to allow ourselves to do that.

Yun Yang - Jefferies

Yes, thanks. My last question what does right partner look like to you? What are you looking for in the right partnership?

Ron Squarer

Yes, well it’s kind of like looking at some who we like to date but and so there is a lot of factors. It’s really a tradeoff between economics and the partner's capability and ability to maximize the value of the product and it’s always an interplay of those factors. As I mentioned we believe we has strength as a company with a very, very, very deep portfolio of exciting products and a healthy fiscal position to be able to find the right partner but it’s really tradeoff of those two.

Operator

Thank you. I will now turn the call back to Ron Squarer for any closing remarks.

Ron Squarer

Well, I would just say thank you all for participating in our call. We are pleased to share with you the positive results from our innovative new molecule ARRY-502 and proof of concept study which we describe today. And with that I’d like to thank our employees here at Array for their commitment, ingenuity and diligence that continues to fuel our success. I also want to thank our patients, patients, partners and shareholders for their continued confidence and support.

And with that we will close the call. Thank you all very much.

Operator

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you participating. You may now disconnect.

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