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TESARO Inc (NASDAQ:TSRO)

Q2 2013 Results - Earnings Call Transcript

July 25, 2013 04:30 PM ET

Executives

Jennifer Davis - Senior Director of Corporate Development and Investor Relations

Lonnie Moulder - CEO

Rick Rodgers - EVP and CFO

Mary Lynne Hedley - President

Analysts

Laura Chico - Robert W. Baird

Peter Lawson - Mizuho Securities

Gena Wang - Leerink Swann

Operator

Good afternoon and welcome to the TESARO’s second quarter 2013 conference call. At this time, all participants are in a listen-only mode. As a reminder, this conference call is being recorded and webcast.

I’ll now turn the call over to Jennifer Davis, Senior Director of Corporate Development and Investor Relations at TESARO. Please go ahead.

Jennifer Davis

Thank you, operator. Good afternoon and thank you for joining us today to review TESARO’s second quarter operating results. I’m joined today by our CEO, Lonnie Moulder; President, Dr. Mary Lynne Hedley; our Executive Vice President and CFO, Rick Rodgers.

Please note that the slides presentation that we will refer to during this call is available on the Investor section of our website www.tesarobio.com. Before we begin I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements. The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2012.

We may refer to certain non-GAAP financial measures that involve adjustments to GAAP figures. These non-GAAP financial measures are not a substitute for GAAP financial measures and are unlikely to be comparable to the non-GAAP information provided by other companies. We believe non-GAAP measures may be useful to investors as a supplement to, but not as a substitute for the applicable GAAP numbers.

I’ll now turn the call over to Lonnie Moulder, CEO of TESARO. Lonnie?

Lonnie Moulder

Thank you, Jen, and thank you everyone for joining us. This afternoon, I'll provide a brief overview of our recent accomplishments. Rick will review our financial results for the quarter. Mary Lynne will provide an update on our development programs for Niraparib and TSR-011 and finally we will spend some time discussing the compelling opportunity we see for Rolapitant. We'll then open up the call for questions.

We're very pleased with the progress we have been making with our development programs. As it stands today, we have two Phase 3 programs ongoing with Rolapitant for CINV and Niraparib for ovarian cancer and we are positioned to begin a third Phase 3 program for Niraparib in breast cancer in the coming months. Our IV formulation of Rolapitant is moving ahead and we expect to begin a dose finding, an escalation study this quarter with that IV formulation. Our ALK inhibitor, TSR-011 is in a dose escalation study and we will be finalizing our dose to advance in to expansion cohorts.

Before we review our financial results for the quarter, I want to share with you that Rick Rodgers has made a personal, professional decision to transition from his current position to consulting role as of December 1. He will continue to work closely with us over the next several quarters.

As many of you know, Rick participated in the founding of TESARO and was instrumental in building this strong financial foundation we have in place, including the closing of two private rounds of financing, a successful IPO and a follow-on offering. I've had the opportunity to work closely with Rick in several organizations over the last 10 years and I will miss his friendship. Rick, I know you will be successful with whatever professional path you eventually choose and on behalf of all TESARO associates, we thank you for all of your contributions and wish you the very best.

As part of Rick’s transition, our Vice President, Controller and Principal Accounting Officer, Ted English will assume the role of VP of Finance and Administration and Principal Financial Officer. Ted joined TESARO prior to our 2012 IPO and has more than 20 years of experience in finance and accounting including previous senior positions as CFO, Controller and Treasurer at several publicly traded commercial stage biopharmaceutical companies. Ted had done a superb job and I look forward to working with him in his expanded role.

Now I will turn the call over to Rick to review our second quarter financial results. Rick?

Rick Rodgers

Good afternoon, everyone. Thank you for the kind words Lonnie. It has been my pleasure to have worked with you, Mary Lynne and all the associates at TESARO and I am proud to have been a part of the many accomplishments to-date, including acquiring a robust pipeline of oncology assets, financing the development of these assets, and most importantly, assembling a team of associates that is dedicated to improving the lives of cancer patients.

Financially we are well positioned to continue to develop our pipeline and deliver value to patients and investors. As of June 30, 2013 we have a solid balance sheet with a $178 million of cash and no debt. I look forward to working with TESARO over the coming months to ensure a smooth transition.

Now I’ll briefly review our second quarter financial results, which are available on the press release we issued earlier this afternoon. TESARO reported net loss of $21.6 million for the second quarter of 2013, compared to a net loss of $20.2 million for the second quarter of 2012. Of note our Q2 2012 net loss included $7 million of in-process R&D expense related to the in-license of Niraparib.

R&D expenses increased to $18.2 million for the second quarter of 2013, compared to $11.5 million for the second quarter of 2012, primarily as a result of higher clinical development cost related to our expanded development activities.

General and administrative expenses increased to $3.4 million for the second quarter of 2013, compared to $1.7 million for the comparable period in the previous year, primarily as a result of increases in non-cash stock-based compensation and other G&A personnel costs.

Please note that our operating expenses included total non-cash stock-based compensation expense of $1.6 million for the second quarter of 2013 compared to $400,000 for the second quarter of 2012. As of June 30, 2013 TESARO had a $178.1 million in cash and cash equivalents, no debt and 32.6 million outstanding shares of common stock. We anticipate that our current cash level will be sufficient to fund our development programs and operations through pre-launch preparations (inaudible).

On July 1, 2013 TESARO filed a Form S-3 shelf registration statement with the U.S Securities and Exchange Commission. As this common practice we made this filing on our first state of eligibility following the company’s 2012 IPO and attainment of well-known seasoned issuer or WKSI status.

Looking ahead, we expect our operating expenses and cash utilization in the second half of 2013 to increase compared to the first half of 2013. These increases are primarily being driven by the initiation of Phase 3 trials and to indicate Niraparib, our ongoing Rolapitant IV programs and continued growth in our associate base. Including as part of these increases is a milestone payment to Merck of approximately $2 million triggered by the recent initiation of patient enrollment in the Phase 3 [novel] trial. We will make the payment during our third and fiscal quarter and will be recorded as acquired in-process R&D.

With that, I'll turn the call over to Mary Lynne for an update on our development programs. Mary Lynne?

Mary Lynne Hedley

Thank you, Rick. We continue to make significant progress in advancing each of our clinical programs. We are pleased with the Phase 1 data that was presented at ASCO in June for Niraparib and believe it describes the potentially best-in-class product with durable responses and the favorable benefit with profile. With the 75% research response rate at the recommended dose among patients with platinum sensitive, high grade serious ovarian cancer a 46% research response rate across all those levels and a 50% research response rate among patients with platinum sensitive ovarian cancer and Germline BRCA mutation.

We believe these results clearly support our Phase 3 program design. These responses were durable with the median duration of 431 days for the platinum sensitive Germline BRCA mutations and 444 days for platinum sensitive patients who are not Germline BRCA mutations carriers.

Importantly these results were keys in heavily pre-treated patient populations. The patients with the ovarian cancer who are involved into the study had received a median of six previous regimens of systemic therapy, and the patients with breast cancer involved in the study had received a median of five previous regimens of systemic therapy.

As expected for this class of module thrombocytopenia was identified as the dose limiting toxicity and the most frequently observed adverse event at the 300 milligram dose included grade 1, 2 anemia, fatigue and nausea. We announced earlier this week the patients are being screened, enrolled and treated in our Phase 3 trials Niraparib in Ovarian cancer. This trial which we refer to as NOVA to evaluate a single daily 300 mg dose of Niraparib as a maintenance therapy in approximately 360 patients with high grade serous, platinum sensitive relapsed ovarian cancer compared to placebo control.

We are very pleased with the level of investigator interest in this study. We have seen at this early point and we look forward to keeping you updated as we progress. The clinical site selection is ongoing for Phase 3 breast cancer trial and we remain on track to open that study to enrolment during the second half of this year.

As a reminder, this study is targeted to include approximately 300 patients with locally advanced or metastatic disease who have received previous treatment with Anthracycline anti-toxine and up to two prior chemotherapy regiments for advanced or metastatic disease. Patients will be randomized two to one to receive daily oral dosing of 300 mgs of Niraparib or physician’s choice of capecitabine, gemcitabine, nelarabine or eribulin.

Turning to our ALK inhibitor, TSR 011 an abstract describing initial Phase 1 data from our dose escalation study has been accepted for poster presentation at ESMO in September. We plan to present data describing pharmacokinetics and pharmacodynamics, dose responsiveness, tolerability and any preliminary tumor responses to be valuable at the early point. Our dose finding activities continue and we plan to finalize the recommended Phase 2 dose for TSR 011 and initiate Phase 2A expansion cohort by year end.

Finally, as you know, Rolapitant is the subject of three ongoing Phase 3 studies for the prevention of CINV. The program is over 90% enrolled at this point and we expect to report topline pivotal results by year-end.

Lonnie will go into more detail about commercial opportunity we see for Rolapitant but I would briefly like to review the Phase 2 data we have in hand. The result of the Rolapitant Phase 2 trial which was conducted by (inaudible) prior to when we end license the molecule showed a predictable dose response across several dose levels.

As a reminder, patient in the Rolapitant arm receive Rolapitant plus the standard of care, which included a 5-HT3 receptor antagonist in dexamethasone. Patients in the control arm received only the standard of care.

The 200 milligram Rolapitant dose, which was the dose elected for Phase 3 clearly demonstrated a consistent improvement in the primary endpoint of complete response compared to the control arm in the acute delayed and overall time phases of CINV.

Importantly, difference seen in the complete response or CR rate between the 200 milligram arm and a control arm was large for each of time periods measured and the CR rates for the 200 milligram arm were statistically significant. Although, the trial involved only about 90 patients per arm.

The key secondary endpoint of no significant nausea contributes to the differentiated profile of Rolapitant. No significant nausea is measured using a validated, well accepted visual analog scale which is then used previously in registration trials for other marketed products including Emend. In our view, this status suggests that Rolapitant make protect an additional two out of every 10 patients from experiencing CINV following Chemotherapy.

As you know, we are currently conducting three Phase 3 trials of overall Rolapitant that will form the bases of our NDA submission. These trials one Emetogenic Chemotherapy and two in Highly Emetogenic Chemotherapy, well in total and will approximately 2,400 patients in 25 countries around the world across more than 200 clinical sites.

To design an end points of the Phase 3 program a very similar to what was used in the Phase 2 trial. Rolapitant plus standard of care is being compared to the standard of care alone. Standard of care is defined as 5-HT3 receptor antagonist for dexamethasone.

CR or complete response is the primary end point in the delay Phase, which is the timeframe and which NK1 receptor antagonist is thought to have the greatest benefit. The IV formulation will be evaluated in a dose finding and escalation study planned for this quarter. In which we seek to identify a dose to provide comparable exposure to the oral dose.

Once the oral is approved, we plan to submit the IV NDA of review. As a result, we currently expect that the IV formulation of Rolapitant will be launched approximately one year after the oral becomes available.

And with that, I will turn the call over to Lonnie.

Lonnie Moulder

Thank you, Mary Lynne. I want to spend some time today reviewing the commercial opportunity for Rolapitant. Based upon our previous experience in successfully commercializing the product for CINV which is the market leading 5-HT3 receptor antagonist, our intimate knowledge of this market and a potentially significantly differentiated product profile, we believe for Rolapitant has the potential to be a best-in-class agent. We also think that the commercial opportunity for Rolapitant is quite significant, because of their medical need and a favorable market dynamic.

Several published studies have demonstrated the disconnect between the actual experience of patients and the perceptions of oncologist and nurses regarding how well CINV is controlled. The result of one such study shown here compared patient experiences of nausea and vomiting to the expectations of their healthcare providers.

As you can see, physicians and even nurses often think that CINV is well controlled from those patients. However, several studies including this one have demonstrated that healthcare providers significantly over estimate how well the patients are protected from CINV compared to actual patient experience. Many patients continue to experience nausea and vomiting despite receiving a 5-HT3 receptor antagonist and in many cases corticosteroids.

A patient need and we see an opportunity to educate the market and offer a differentiated product that can provide a meaningful clinical benefit to patients. The NK-1 receptor antagonist will consist of three agents. We're developing relaxant, Emend is currently marketed by Merck and Netupitant is being developed by health in as a fixed combination along with 5-HT3 receptor antagonist palonosetron.

We believe that Rolapitant can be differentiated from both the Emend and the Netupitant on the basis of convenience, efficacy and safety. From the convenience standpoint, Rolapitant has the long half-life and a single oral for IV dose prior to chemotherapy can protect the patient for a full five days.

Emend’s oral formulation requires three consecutive days of dosing which can be problematic for patients who are experience the nausea or vomiting. Emend’s IV formulation or fosaprepitant is administered as the single dose. And single dose of Netupitant does provide several days of protection but is only available in an oral formulation which significantly limits the market segment in which it will compete.

From safety standpoint, both Emend and Netupitant are CYP3A4 inhibitors and Emend is also a CYP3A4 inducer. We have completed a clinical drug interaction study that show Rolapitant does not inhibit or induce CYP3A4. This is important because many other drugs that are often co-administered to patients undergoing chemotherapy are metabolized via the CYP3A4 pathway and can often require dose adjustments which add additional complexity to the treatment paradigm.

Looking at efficacy, we believe that Rolapitant, no significant nausea data also differentiates Rolapitant from Emend. Emend does not shows statistical significance on this important endpoint of no significant nausea and this data is available in its product

label.

Netupitant which has a long half-life has demonstrated a nausea benefit in clinical studies. We believe that Rolapitant's availability in single dose oral and IV formulation, the potential benefit with regard to significant nausea and a lack of CYP3A4 interactions will help to position us favorably versus both EMEND and Netupitant in the market.

As many of you know the CINV market is heavily weighted towards IV utilization, about 80% of the market is IV and 20% is oral. Certain payers prefer oral dosage for them yet IV administration and anti-medics enables healthcare providers to ensure patient compliance because the entire medics are confused as prior to chemotherapy. Because we are developing two formulations Rolapitant will be able to address this entire market opportunity with a convenient single dose.

Importantly, the oncology practice guidelines established by NCCN and also ASCO supports extended of NK1 receptor antagonist for the prevention of CINV. Specifically the guidelines instruct that every patient who is treated with Cisplatin each breast cancer patient who receives anthracycline/cyclophosphamide combinations or AC and many patients who are administered Carboplatin should receive an NK-1 receptor antagonist in addition to the standard of care.

Currently IMS data states that only about 20% of the market is being reached by EMEND which is not surprising when considering the profile of the drug and the modest level of commercial support behind the product. With Rolapitant our goal is to further an existing, underserved market with a product that can make a significant difference to patients and healthcare providers.

Turning now to the size of the market, we believe that the NK-1 receptor antagonist market totaled approximately $1.5 billion in the U.S. annually. We know that the 5-HT3 receptor antagonist market which is 100% penetrated by four agents consisted of approximately 6.7 million day of chemotherapy doses in 2012.

By totaling all Cisplatin based regimen cycle initiation, the AC based breast cancer treatment initiation and a portion of the carboplatin based treatment initiations, we estimate that there are 5 million chemotherapy initiations appropriate for NK-1 receptor antagonist utilization.

With both IV and raw formulations and differentiated profile, we believe Rolapitant is well positioned to not only take share from EMEND but most importantly realize the full potential for (inaudible) of agents as directed by the guidelines by applying immense current pricing of about $300 per cycle of chemotherapy to the 5 million eligible day of chemotherapy doses for the previously described [hek and mek] regimens, we estimate that the NK-1 receptor antagonist market totals approximately $1.5 billion in the U.S.

Importantly, reimbursement for CINV including NK-1 receptor antagonist is well established. These agents provide significant value to the healthcare by preventing subsequent expenses that may be incurred if the CINV is not well controlled. A national CMS coverage decision is already in place for any approved oral NK-1 receptor antagonist and both Medicare carriers and private plans provide coverage for oral and IV NK-1 receptor antagonist.

Current IV product reimbursement is on the ASP plus system. We do not foresee any barriers to reimbursement of oral or IV Rolapitant. As we think about launching Rolapitant and the key factors that will make us successful, we can reflect on what worked for us in establishing Aloxi as a market leading 5-HT3 receptor antagonist.

We will launch Rolapitant with an appropriately sized sales force that has experience in oncology and at launch Rolapitant will clearly be the top commercial priority for TESARO. We have the opportunity to partner with community based oncology networks. We are conducting our Phase 3 trials of Rolapitant at some of the largest oncology practices in the U.S. and we have great relationships already in place with key opinion leaders.

We have an excellent opportunity to be at the forefront in educating nurses and oncologist about the NCCN and ASCO guidelines which recommend the use of NK-1 receptor antagonist in a broader population of patients in order to better penetrate the current market. And with a differentiated profile including lack of drug interactions related to CYP 3A4 and a potential nausea benefit plus the availability of two single dose formulations oral and IV were well positioned to significantly expand the

Market we are well position to significantly expand the NK-1 market, capture share and provide value to patients, nurses and physicians. Our confidence is in part based upon our extensive experience gained at prior companies including MGI Pharma and following its acquisition at Eisai in addition to Proaxis which is now part of Celgene. We had the opportunity at MGI to develop and commercialize Aloxi, a 5-HT3 receptor antagonist and capture approximately 50% market share in CINV in the U.S. despite initial physician apathy and a high level competition from three large pharma products and eventually from generics.

We assembled a top notch commercial organization and worked closely with the largest oncology practice network to achieve this level of success in the marketplace. Following MGI's acquisition by Eisai, we had an opportunity to help Eisai develop and implement a global oncology strategy and later at Proaxis, we had (Inaudible) the company's oncology footprint in China. This is the team with significant global and licensing, development, regulatory and commercial experience and a track record of successful oncology and supportive care product launches particularly in CINV. We have a deep understanding of this market and what it takes to make a product launch successful.

In Summary, we believe we have an exciting opportunity with Rolapitant given it's differentiation on the basis of convenient efficacy and safety we think this is a best-in-class product and importantly it addresses a significant patient need. We intend to leverage our knowledge, relationships and decades of experience in oncology and specifically the CINV category to make Rolapitant a success and believe it will be quite meaningful for the company from a financial perspective.

We look forward to sharing data from the pivotal program by year end. At this point operator, can we please poll for questions.

Question-and-Answer Session

Operator

(Operator Instructions) First question is from Robyn Karnauskas of Deutsche Bank. Your line is now open.

Unidentified Analyst

Hey, this is Mohit on behalf of Robyn Karnauskas. I have two and five questions. First of all please help us to understand the process between on Rolapitant's last patient completes trial from data analysis and results, how long it will take, and then how many data will be there in the press release?

And then second part is what kind of preapproval activities you can perform in all oncology centers and doctors after the data announcement, thank you.

Lonnie Moulder

Just to clarify, the second part of your question and the final part I didn't quite catch that.

Unidentified Analyst

Yeah, second part is what kind of preapproval activities you can perform with oncology center and nurses after the data announcement?

Lonnie Moulder

Yeah, so I'll take that part of the question and then turn it over to Mary Lynne. Obviously there are pre-launch activities that one puts in place long before a product has launched and we already have on that activities underway, so what do they involve, there are key tact associated with working with key opinion leaders. So of course as we designed Phase 3 three programs for Rolapitant, and we discussed, what we had in mind with some of the top people in the field and we've been very active with the leading association in the area of supportive care, it’s called MASCC, the Multinational Association of Supportive Care in Cancer. And in fact as part of our overall publication strategy which is another important tactic at last year’s MASCC meeting, we had two podium presentations relative to Rolapitant. One big focus was our no significant nausea data because that's a key unmet need that the key opinion leaders found quite compelling about the compound. So we had the opportunity to make that presentation at this year’s MASCC meeting. Our drug interactions data the lack create -- for drug interactions were presented as a poster at the MASCC meeting.

So in addition to the key opinion leaders and the association we will have of course ongoing activities to prepare the market from a business relationships standpoint with the large oncology networks throughout the country. So to kick that off first of all we meet with all these organizations from time especially around large medical meetings at ASCO and visit them in their offices and talk about our future plans and we actually started those activities to acquaint those people with TESARO, the people we've known well based on our history in other companies and the launch we had with the [Loxie] some years back and the output initially from those interactions resulted in placing our Phase 3 pivotal trials with some of those large oncology networks and also getting their input on some of our launch strategies. In addition, many of those large networks had significant databases that we've accessed to better understand what the opportunity would be for Rolapitant within their network.

They’ve also conducted some market research for us and have advised us on payer strategies since ultimately it's actually the oncology practices in the large networks that interact most with payer as it relates to the reimbursement of their practices under whatever system it happens to be. So we've had a number of activities underway and then going forward, of course, as we release the top line results for Rolapitant, we will ultimately put those in to a medical venue. So of course we will reserve specific data but don’t go in to a medical venue and ultimately in to publication. As we approach the actual launch, we will of course be doing additional market research as it relates to our positioning; our messaging and we’ll begin implementing our plan to be prepared for a commercial scale up as we approach the potential approval to drug. So those are some high level and some specific tactics that we will actually roll out.

I'll turn it over to Mary Lynne for responding to your questions about what happens with the clinical trial analysis and the timing of the announcement.

Mary Lynne Hedley

As you can imagine, this is pretrial 2,400 patients. So obviously prior to the patients on completing the first cycle and the efficacy analysis conducted. Prior to us actually doing analysis, there is of course a lot of data cleaning that has to occur on those 2400 patients and then database lock and after the database lock comes to data analysis and finally release of the top line results.

So as Lonnie referred, Tom too mentioned is accounting practice in the industry. We would want to really reserve the name presentation of the detail data from that program at a medical meeting, but we understand the significance of the data too of course the investors and we are balancing this with the need to disclose the top line data. So at this point, we are expecting to record the results from the primary and secondary end point analysis including significant nausea and a high level overview of the adverse event profile. I think then any of the specific numbers etcetera would be very more appropriately discuss to the scientific menu.

Operator

The next question is from Chris Raymond of Robert W. Baird.

Laura Chico - Robert W. Baird

This is Laura Chico in for Chris Raymond. Well congrats on the progress from the quarter. I guess I have two-part question. We did know that the bravo Phase 3, Niraparib cancer trial had posted on (inaudible). And I guess the first part of my question is, can you walk us through what's some of your PSS assumptions are there again. And then also kind of I guess as it relates to BioMarin’s update tonight, are there any other steps that need to be taken prior to enrolling your first patient, or can you begin when you are ready with site selection?

Mary Lynne Hedley

I guess to more specifically define what happens in terms of getting sites up and running, obviously FDA select the site and they have to undergo qualification and during that process you are submitting information to the regulatory service and getting their approval and then to the apex committees, I am talking about question to national study to the apex committee or to the IRB in U.S. And then once you have those approvals you are in the process of doing site contract negotiations and coming to agreements with the sites about the budgets etcetera. And then when drug is ready, it’s in U.S obviously here, but otherwise you have an import license and you should back to the size and then you can do a initiation visit and then the site starts screening and then you enrol patients.

So, it's obviously a process in order to actually (inaudible) study. So when you say you just go ahead and then enroll when you're ready, there are a lot of steps to get ready. And the requirement also as you know for (inaudible) that obvious we've seen on clinical trials got within 21 days of enrolling the first patient. So you can put prior to that or you have to post within 21 days of enrolling first patient.

Does that answer that part of question?

Laura Chico - Robert W. Baird

Yes, it does. Thank you.

Mary Lynne Hedley

Okay. And then in terms of the PSS analysis, what we really did was try to look at PSS for those particular physicians choice drugs that we're providing and look at what data does was supported out and specifically who had failed previous 80. And we look about the triple negative breast cancer population and we look just non-triple negative patient population and the reason for doing that is the triple negative patients progress faster and we assume that study would have about 60% triple negative patients and that's the historical data and then we weighted it essentially to come out with a baseline of 2.5 or 3 months for the control and the six months for the Niraparib treated was really based on the data that’s been published for other inhibitors in this field and in some other patient population which was 5.7 months PSS.

Laura Chico - Robert W. Baird

I guess one more follow-up question if I may and then I will hope back in the queue. I guess BioMarin also have enough data on their program and I think you have previously highlighted some relationships that you have established to help with enrollment. I guess are there any other steps or strategies that you are taking to ensure that enrollment progresses at a rapid rates for both the breast cancer and ovarian cancer trials?

Mary Lynne Hedley

I think critical, we obviously have very strong relationships within the U.S. with many oncology factors and in particular oncology centers where the majority of patients in the U.S. are treated. So for us identifying really appropriate and high quality good enrolling sites in the U.S. is less a challenge, but in the EU we thought it was important to have really more about relationship with organizations that could help us in the various countries and of course many countries to identify who would be very high quality investigator who actually have the patients population as well and also to give us not only in the site selection process but also collaborate with us to ensure that the clinical protocol is scientifically sound, is accepted by a key opinion leaders as well as the individual investigators who are likely to paid in the study.

And then from a steering committee perspective the result of that study would be disseminated in a way that is credible and of high quality. So that's really how we are utilizing our relationship in collaborations with [ANDA] in the ovarian study and [FIG] in the ORTC in the breast cancer study and our relationship with them has been very good to-date. I think sometimes one might worry about larger organizations such as that making it slower to progress, but you know I have to say these guys have really rallied right along with us and together we defined very aggressive timelines and are -- we will be meeting them. So we are very pleased with the relationships and we are very grateful that they (inaudible) and guys have chosen to work with us.

Operator

The next question is from (inaudible) of Citi.

Unidentified Analyst

This is Christian for [Yuron]. I had a two-part question. You mentioned the study for Rolapitant will be starting this quarter; can you kind of discuss what the rate limiting steps are for starting that study? And secondly can you describe your ALK inhibitor and how you think it maybe differentiated even though it is early?

Mary Lynne Hedley

So in terms of the general stuff to initiate the clinical trial in the case of IV trial for Rolapitant was to as it was probably mentioned before Schering had done the formulation work and a lot of that animal work that was required. We were asked by the regulatory authorities to compile an entire IND around that versus an IND amendment which was originally anticipated. So the process is to then compile the IND, and submit the IND, receive regulatory feedback within 30 days and then to initiate the trial and of course obviously you have to have drug manufactured too. So those are the steps that are required to be taken in order to initiate the study this year so you can sort of back calculate on that with regard to this quarter. We can kind of back calculate and that will we might be.

And then ALK inhibitor differentiation. I think at this point, the clinical data that will be presented and I’ve to leave that for the ESMO presentation but I will focus on what we thought was differentiated when we brought the product and why we're excited about the molecule.

Clearly, the Amgen scientists who created this molecule had the structure of ALK in hand when they designed the inhibitors and they perfectly optimize these inhibitors at all of the four key places where there are molecular interactions that are (inaudible) binding pockets and that’s what really I think will add to this topic visibly potent molecule, KV is at (inaudible) level and it's been a selective molecule.

So that was, those were all very nice qualities but they also selected a molecule that had strong elements that will predict well behaved molecules in humans and what do I mean by that is having a reasonable volume and distribution along half-life bioavailability. So that was very critical. Mostly critical also to us is the fact that the molecule cause tumor, regression and [genograph] models that were driven by ALK and if you pull those tumors out and you look at ALK expression in those tumors, we saw, Amgen saw almost a 100% inhibition of ALK up to 24 hours with one dose.

So the molecule gets to the target, sticks there and has the desire to fight for very long time. So what we would hope to see in the clinic is really a translation of that which would result in well tolerated molecule of plasma levels which should be very strongly inhibiting out.

So as we’ve mentioned before, we’ve gone through several of those escalations with single patient cohorts in a way that we could do that, with single patient cohorts is not to see a great to a greater AE allowing it to double essentially each time and that is to I think speaks to what we had anticipated based on the preclinical data. So anything beyond that, I think we really have to leave to the clinical data presentation at ESMO. I think we will take our next question.

Operator

Yes. The next question is from (inaudible) of Morgan Stanley. Your line is open.

Unidentified Analyst

First one, just a kind of quick clarification. Did you say that there was 90% enrolled in the Rolapitant Phase 3 and then are we going to see one press release that has all the data for the one (inaudible) studies or this going to be distributed into different press releases?

Lonnie Moulder

Yes. We did say over 90% enrolled the intent as Mary Lynne described is to have top line results released all at once. As you’ve heard there is a lot of work to get there across the three international trials of some size. So that is the intent, but by the end of the year, you will see what we actually do.

Unidentified Analyst

Okay. Thanks and then going over to the IV program, I'm curious to know where you will start the IV dosing and what you anticipate or project might be the appropriate IV dose. And then will these patients that are in the IV trial I assume these are healthy volunteers, are they also going to receive the oral in order to determine by our equivalent in those patients specifically or you guys going to rely on the oral PK from your prior work?

Mary Lynne Hedley

And so just generally speaking, we're talking about a dose escalation study. But I guess I anticipate let’s just say because oral Rolapitant is a 100% bioavailable. I anticipate that the IV dose will be very close to that and to that I mean it's essentially makes sense right.

Unidentified Analyst

Okay

Mary Lynne Hedley

So, the way that we would compare the oral ultimately is in the same trial. Now for the role for the IVs, but importantly, it's for all the Rolapitant by equivalent either any study with a long half-life drug, you wouldn't do a crossover, you would do parallel on healthy volunteers.

Unidentified Analyst

Right.

Mary Lynne Hedley

Because the hard part is to sell a lot in order to have that all wash out over five half-life, it just takes two on to do the study. So that’s the ideal way to do the study and for values expected per guidance, for a half-life drug is to do parallel ALK cohorts, where you have an oral Rolapitant and IV group and then you compare exposures overtime.

Unidentified Analyst

Got it. Okay. And then on how I guess my question is you're not going to say what an [MTB] is until as ESMO, is that right?

Mary Lynne Hedley

Yeah. We would not be giving any clinical data until ESMO and I think any data that comes out at as of now will be, yeah early clinical data obviously we are started to study back to the end of October last year.

Unidentified Analyst

Okay, so the more broader question is should we be thinking about the safe way start and the expansion cohorts does that sort of mean that you have made the sort of go, no go decision on late stage development or this is the expansion cohort plan sort of the plan along meaning that go no go decision in terms of heavier investment in this program is still coming or how should we think about that?

Mary Lynne Hedley

Yeah, so the Phase 2Aexpansion cohort has always been part of the plan and they are what we are really looking to do within three different at least three different groups of patients, two of them being non-small cell lung cancer patients. One of them being positive, one of them being ALK inhibitor naïve so it’s likely naïve and one them being resistant, we want to understand what the response rate is in the larger cohort of patients. So the value of these types of targeted agents is that very few patients 10-15 patients you have to good sense on what your response rate is.

And whether or not it makes sense to continue develop that in that indication and then the third cohort that’s currently planned is one that consist of other tumor types that at this point are all positive.

Unidentified Analyst

Great, and then, yeah, sorry.

Mary Lynne Hedley

Outside of non-small cell lung, sorry go ahead.

Unidentified Analyst

Thanks, and then one last question, I apologize this one is a bit complicated, so I apologize but I do want to understand something about when everyone makes the obvious comparisons that are going to made later in the year between TESARO and Helsinn’s Netupitant both companies are using in the control arm at 20 mg dose of dexamethasone followed by eight but for TESARO you are using 20 and eight in your active arm whereas Helsinn only used 12 and four.

So sort of my question is you know assuming we do see a benefit, a placebo adjusted benefit on response rates for Rolapitant that is better than Netupitant and in particular I'm thinking of delayed phase, I am just wondering how we will be able to understand this benefit as being derived from Rolapitant’s advantages versus just having more dexamethasone relative to Netupitant’s trial if I'm clear enough there.

Mary Lynne Hedley

Yeah, I understand. I guess it was last year, I think last year Helsinn presented data at MASC and ASCO I believe which showed that Netupitant is a CYP3A4 inhibitor. So just like a aprepitant when they did their Phase 3 study in order to have equal levels of dexamethasone in the plasma in both the controlled arm and in the Netupitant treated, Rolapitant treated arm, those the Merck and Helsinn had to dose reduce the dexamethasone in the drug treated arm, right, and when they, because when you treat with Netupitant or aprepitant you double the plasma exposure because you are inhibiting the CYP3A4 which chews up dexamethasone.

So it doesn't get metabolized as fast. So you are doubling the amount of dexamethasone in the plasma. So that's not a fair comparison than for the control arm right. So in order to have a fair comparison within their Phase 3 studies and Phase 2 studies in the case of Helsinn they had the dose reduced study that dexamethasone on the Netupitant treated arm or in the Merck Phase 3 aprepitant treated arm.

So now they have a level of playing field between the control and the drug treatment arm. In our case, as we've demonstrated and presented that this year, we're not a CYP3A4 inhibitor. So we do not have to dose reduce the dexamethasone in our Rolapitant treated patient. So if you were to pull the plasma out of our Rolapitant treated patients or our control treated patient, they had the exact same amount of dexamethasone in their plasma.

Operator

Thank you. The next question is from Jim Birchenough of BMO Capital Markets. Your line is open.

Unidentified Analyst

This is (inaudible) for Jim, BMO this afternoon. My first question is one the ovarian cancer trial and in general Germline BRCA. Can you just stratify between the BRCA1 and BRCA2 and a follow-up for that would be what the key assumptions are in the ovarian cancer trial and whether you can win on either the BRCA cohort or the non-Germline cohort?

Mary Lynne Hedley

Yes, the first part of the question was that we stratify between BRCA1 and BRCA2 in the BRCA cohort and the answer is no. And the second question was related to whether or not we can win in both of those arms or I would imagine either of those arms would be the other question. So the answer is yes in both cases. So for example, let’s say because we think we will win in both we are hopeful in both obviously the non-Germline BRCA as well as the Germline BRCA. But if we were not to win in the non-Germline BRCA, we still have the Germline BRCA, where we can win and the way the trial is designed those two cohorts are completely separate, they are analysed separately.

So the data is not pooled between them and so each cohort is analyzed at the (inaudible) and independent from each other and that's important. That's why we designed the study that way to really preserve that Germline, maturity of that Germline BRCA patient population, where of course the expectation is that we would I mean we would win and we would even anticipate of course being potentially a better response in the Germline BRCA than in non-Germline BRCA. That's why we designed it that way is to give us really an opportunity to broader market and really get the drug to the patients who could benefit they are non-Germline, we want to know that right but then to preserve that Germline BRCA group where the data is the strongly at this point, because it's more (inaudible).

Unidentified Analyst

Thank you. And follow-on I noticed for the (inaudible) trial, then aren't you going to do a trial in the front line setting and you considering the need to do the trial in the frontline setting as well (inaudible)?

Mary Lynne Hedley

Yes. So our understanding is that there only pursuing of frontline setting for the Germline BRCA patient population and whether or not we believe we need to do or would want to do a study in the frontline setting is something that we consider along with other possible indications that we're currently looking at as a way of expanding the opportunities for niraparib.

Unidentified Analyst

Thank you. And then maybe just one last one on Rolapitant and that was during the discussion of Netupitant data, at ASCO [Dave] (inaudible) was saying well really this and (inaudible) would considering this a [head] chemotherapy. And so therefore control on should have had on NK-1. And obviously you're deciding not do it that in your trial, but it sounded like from your experience with Aloxi the need to head studies is not necessary in this field. Is that accurate?

Lonnie Moulder

No, it's not necessary. And as you may know HEC is [defined] by the FDA as cisplatin flatten and we're first meeting the requirements of the regulatory agency. MEC for the FDA include AC anthracycline-cyclophosphamide and many, many other regimens. The guidelines group HEC Cisplatin. In HEC they label AC together. So when we look at what we're doing in our program for the FDA, we're pursuing a HEC indication Cisplatin and a MEC indication AC and other regimens.

When we look at the marketplace, the guidelines and the pathways the opportunity is the utilization of our drug as the per the NCCN guideline, which include all Cisplatin all AC and in addition to that MEC regimens that are carboplatin based in several tumor types. So we're well aware of how the field discusses this and the key opinion leaders obviously write the guidelines, the marketplace follows the guidelines, we understand that, but our first job is to get the indication based on how the FDA categorizes and we are conducting global studies with a placebo control of course in addition to the standard of care, so people in both arms, the Rolapitant arm the placebo arm receive, 5-HT3 receptor antagonist and Dexamethasone so that's how this is done in field.

Unidentified Analyst

Okay, thank you.

Lonnie Moulder

Next question?

Operator

Yes, the next question is from Peter Lawson from Mizuho Securities your line is open.

Peter Lawson - Mizuho Securities

Just I wanted to congratulate you on the progress in the quarter. And just Mary Lynn, just around Niraparib, what's the timeline you're expecting (inaudible) enrollment to the [NOVA] trial and if there is any other details you can share around that trial design?

Mary Lynne Hedley

Yeah, at this point because we're obviously early in the process, we haven't given any specific guidance as to when we'll complete the study, what I don't do is least for some basic ideas give them a direction to look at the [Letterman] study which was published in the New England Journal which is fairly similar design and rather than make you do that I'll just tell you, it took them about 16 months to enrol, in 82 centers and that was the global trial. So that just form somewhat of a baseline, the design of the study is to take patients to our high grade serous ovarian carcinoma patients who are platinum sensitive but have relapsed. As a result of that relapse and their platinum time sensitivities they get another round of platinum. And if they respond they're eligible for our trial.

Prior to putting them into their respective cohorts, we do a Germline BRCA mutation test and once we know the results of that test which can obviously be done while they're receiving platinum or can already be known but we would then put them into the Germline BRCA group or the non-Germline BRCA group and then within each of those cohorts the patients are randomized two to one to receive Niraparib or placebo control. So this is a maintenance study and then they're followed for progression free survival along with several secondary end points including overall survival, patient reported outcomes, PFSII and some others. So that's the general design of the study.

Peter Lawson - Mizuho Securities

And are you working with Myriad for data submission for the FDA for the BRAC Analysis test.

Lonnie Moulder

We are not going into the details of the relationship for a variety of reasons. It's confidential as to what those details are and for competitive reasons.

Mary Lynne Hedley

Well, what we have, well what they have said publicly is that we are using their test to for BRAC Analysis test to identify the patients as either having Germline BRCA mutation or not.

Peter Lawson - Mizuho Securities

The Supreme Court ruling on the Myriad gene passing case, has that in anyway changed the way you are looking at BRAC testing?

Mary Lynne Hedley

No, it has not.

Peter Lawson - Mizuho Securities

And then just on, I want to ask its very early but what would Phase 2 potentially look like, is there any way of getting any color around that and would there be any patient selection approach around a molecular diagnostic test?

Mary Lynne Hedley

For [OM-1], yes, I think obviously in terms of where one would go, that would be dependent on what we see in the Phase I extension, Phase 2 extension cohort where we would be looking at as we focused on also the moment we would be looking at patients who are defined as ALK by the currently available diagnostic test which is a fish test. In Europe, there is a fish and an IC test that are approved. We would anticipate at some point there will be an IC test approved in the US. So there are these tests approved to identify ALK positive patients. About 60% of patients are being screened currently. We would anticipate that will go up as more physicians adapt to generally as part of their practice molecular screening test for our newly diagnosed patients.

And what we would anticipate is either going, depending again on the outcome in the Phase IIA study is going in the frontline study or going into one of the resistant patient population and until we see the data from that extension cohort. I think it's premature to be any more specific about which of those two studies, but it would probably end up being a registration study just given how things are progressing with this class of agents previously. I don't think we would do another Phase II study.

Operator

Thank you. And the next question is from Howard Liang of Leerink Swann. Your line is open.

Gena Wang - Leerink Swann

This is Gena Wang standing for Howard. Thank you for taking my questions. Basically I have two parts of the question. The first is regarding Rolapitant. I am wondering how long should we expect to see data after completion of enrolment of the last trial, maybe I should different way say like, when do we expect the enrolment to complete before you report the data by the end?

Lonnie Moulder

Just to reiterate, what we are saying about the Rolapitant A3 pivotal program that it's currently over 90% enrolled and we will by year-end announced top line results from the program. Mary Lynne described that making some details, the process to get to results once you complete enrolment, but that's all we are saying at this point in time. So there is little more specific guidance as to what we are going to finish our enrolment etcetera. I hope that's helpful.

Gena Wang - Leerink Swann

Yeah.

Lonnie Moulder

And you had an additional question?

Gena Wang - Leerink Swann

Yes. So the second question I think quite a few people already asked about the ALK inhibitor, I am just wondering are you mention that to be in a non-small cell lung cancer who is up to (inaudible) resistant and mentioned like additional tumor type and wondering if you have any thoughts on what additional tumor type there will be the ALK confident tumor type?

Mary Lynne Hedley

Yes. So today there has been report of positive patients to our inflammatory breast cancer patients, colorectal cancer patients, patient who have ALPL, anaplastic cell lymphoma as well as neuroblastoma. There was a different additional example of tumor types which are (inaudible).

Gena Wang - Leerink Swann

So have you tested all these or are you giving more interest in certain types versus others?

Mary Lynne Hedley

Well, that's why we have that third bucket of patients at this point is really to catch all of those other tumor types that might be eligible for entering the study and to determine how does the drug behave in those patients.

Lonnie Moulder

Thank you.

Mary Lynne Hedley

I think we'll take our last question.

Operator

And there are no further questions in the queue at this time. I'll turn it back over to management for closing remarks.

Lonnie Moulder

Well, thank you. I'll close with brief summary of our 2013 objectives. As you know, patients with ovarian cancer are now being dosed in our Phase 3 trial of Niraparib and we will continue to enrol patients into that study. We've also present a key data at ASCO and MASCC and looking ahead to the rest of the year, we expect to advance the clinical development of the formulation of Rolapitant this quarter, present initial clinical data for TSR-011 at ESMO, initiate enrolment in our Phase 3 trial of Niraparib with breast cancer patients with Germline BRCA Mutations, announce the top line results from the oral Rolapitant pivotal program by year end and finalize the recommended Phase 2 dose for TSR-011 and initiate the Phase 2 expansion cohorts.

Well, thank you for your interest in TESARO and have a good evening.

Operator

Thank you. This conclude TESARO second quarter operating results conference call. You may now disconnect at this time.

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