TESARO's CEO Discusses Q3 2013 Results - Earnings Call Transcript

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 |  About: Tesaro (TSRO)
by: SA Transcripts

Operator

Good afternoon and welcome to the TESARO Third 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 would now like to 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 third quarter operating results. I am joined by our CEO Lonnie Moulder; our President Dr. Mary Lynne Hedley; and our Senior Vice President of Finance and Administration Ted English.

As I am sure you have already seen, we issued a news release earlier this afternoon detailing our third quarter results. Please note that the slide presentation that we will refer to during this call is available on the Investors 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 will provide a brief overview of our recent accomplishments. Ted will review our financial results for the quarter. Mary Lynne will provide an update on our development programs for Rolapitant, Niraparib and TSR-011. Finally, I will spend some time discussing the very meaningful commercial opportunity we see for Rolapitant. And then we will open up the call for questions.

Approximately two years ago, we at TESARO concluded our first human clinical trial. And since that time, we have received regulatory clearance to conduct clinical trials in 33 countries initiated an additional 12 clinical studies, including five Phase 3 trials, completed 8 clinical studies and enrolled 2,800 subjects across our clinical programs. And today, we are very pleased to announce that we have completed enrollment in two Phase 3 trials of oral Rolapitant and we expect to announce top line results from these trials at year end. We expect to conclude enrollment in the third Phase 3 trial of oral Rolapitant by year end and anticipate these top line results will be available in early 2014.

In the third quarter, we initiated the pharmacokinetic study of intravenous Rolapitant and we have initiated screening of breast cancer patients in the Niraparib Phase 3 BRAVO study.

In addition, ovarian cancer patient enrollment is ongoing in the Niraparib NOVA Phase 3 study and in the initial trial of TSR-011. We are very pleased with the progress we have been making with our development programs. Preparations are of course underway to support a new drug application or NDA filing for oral Rolapitant with the U.S. FDA in mid-2014. Based upon Phase 1 and Phase 2 data, we believe that a single dose of Rolapitant administered to a patient prior to chemotherapy, they provide protection from CINV for up to five days offers a low risk for drug interactions with certain co-administered medications and could significantly reduce the nausea experience by patients receiving chemotherapy. This potentially differentiated profile, along with our extensive knowledge and experience in the CINV field serve as a basis for our enthusiasm, the commercial potential of Rolapitant.

Turning to Niraparib, we are pleased with the positive feedback we are receiving from investigators for our Phase 3 NOVA study of Niraparib in patients with ovarian cancer as this trial approves an additional site continue to open. In addition, we have recently opened our Phase 3 BRAVO study of Niraparib in advanced germline BRCA mutation positive breast cancer to patient enrollment and we expect to initiate patient treatment shortly. Finally, the intravenous or IV formulation of Rolapitant continues to advance in an ongoing dose escalation clinical study and having established a dose, we continue to evaluate 011 our dual ALK/TRK inhibitor in patients who are our ALK and TRK positive. We look forward to updating you on our progress with all of these programs.

I will now turn the call over to Ted English to discuss our third quarter financial results. Ted?

Ted English

Thank you, Lonnie. As of September 30, 2013, TESARO had $156.4 million in cash and cash equivalents, no debt and 32.7 million outstanding shares of common stock when compared to the previous quarter’s ending cash balance of $170.1 million this reflects cash used by the company of $21.7 million during the third quarter. TESARO reported net loss of $28.6 million for the third quarter of 2013 compared to a net loss of $13.6 million for the third quarter of 2012. Our net loss was primarily due to R&D expenses which increased to $22.2 million for the third quarter of 2013 compared to $11.9 million for the third quarter of 2012.

R&D expenses increased mainly as a result of higher clinical development costs related to our expanded development activities. In addition during the third quarter 2013 our net loss included approximately $2 million of acquired in-process R&D expense which was associated with milestone payments due for the development of Niraparib.

General and administrative expenses during the third quarter of 2013 increased to $4.5 million compared to $1.7 million for the comparable period in the previous year. This increase was principally the result of increases in non-cash stock-based compensation. Total non-cash stock-based compensation expense within our total operating expenses for the third quarter of 2013 was $2.7 million compared to $0.4 million for the third quarter of 2012. This increase in stock-based compensation expense during the current year is the result of several factors, including overall growth in our – in both our organization and in the number of options outstanding, appreciation on our share price and incremental expense associated with awards to our former CFO with whom we have an ongoing consulting relationship. Please note that we will continue to record incremental stock-based compensation expense associated with the consulting relationship through March of 2014.

As I previously mentioned TESARO ended the third quarter with $156.4 million in cash and cash equivalents. We anticipate that our cash level will be sufficient to fund our development programs and operations into 2015. Looking ahead we expect our operating expenses and cash utilization to increase in general over time driven by our clinical trial and development programs. We expect that R&D costs associated with both Niraparib and TSR 011 clinical development programs will continue to increase primarily driven by increased activity in the ongoing Phase 3 NOVA trial and initiation of Phase 3 BRAVO trial as well as ongoing activity in the clinical trial of TSR 011. We also expect some increases in costs associated with development activities related to the IV Rolapitant. We expect that these increases will be partially offset by a decrease in costs associated with the oral Rolapitant pivotal clinical development program.

With that I will turn the call over to Mary Lynne.

Mary Lynne Hedley

Thank you, Ted. We continued to make significant progress with each of our clinical candidates. I will now spend a few minutes providing an update on each program. Beginning with Niraparib our PARP inhibitor, we are pleased with the profile we have seen for this candidate and released Phase 1 data described potentially best in class product with durable responses and a favorable risk benefit profile. With 75% research responses rate at the recommended dose among patients with platinum-sensitive high grade serious ovarian cancer or 46% research response rate across all dose levels and a 50% research response rate across all dose levels in patients with platinum sensitive ovarian cancer and Germline BRCA mutations we believe the data clearly support our Phase 3 program design. These responses were durable with a median duration of 431 days for platinum sensitive Germline BRCA patients and 444 days for platinum sensitive patients who are not Germline BRCA mutation carriers.

Importantly, these results were achieved in a heavily pretreated patient population, the patients with ovarian cancer who are enrolled into this study had received a median of six previous regimens of systemic therapy. And the patients with breast cancer enrolled in this study had received a median of five previous regimens of systemic therapy. As expected for this class of molecule thrombocytopenia was identified as the dose limiting toxicity. And the most frequently observed adverse events at the 300 milligram dose included grade 1, 2 anemia, fatigue and nausea. As you may know three trials in Niraparib opened for a moment. The NOVA study in ovarian cancer patients and the broader study for breast cancer patients. We are also partnering with the Sarcoma Alliance to Research and Collaboration or SARC to conduct a Phase 1 study that is designed to evaluate the potential to combine Niraparib with the temozolomide in patients with Ewing’s sarcoma who have progressed following prior chemotherapy. Together with SARC we aim to identify a dose of temozolomide that can be well tolerated in combination with a full 300 milligram dose of Niraparib and result in clinical activity. We are pleased to be working with this prestigious organization to bring additional therapeutic options to sarcoma patients.

Now I will briefly review the design and powering of our NOVA trial. In the NOVA study, a single daily 300 milligram dose of Niraparib will be evaluated compared to placebo as a maintenance therapy in approximately 360 patients with platinum sensitive relapsed ovarian cancer. We are evaluating two independent cohorts of patients within this trial those who are both platinum sensitive and Germline BRCA positive and those who are platinum sensitive without Germline BRCA mutation, the primary endpoint of this study with progression free survival or PFS with overall survival as a secondary endpoint. Each cohort has greater than 95% powered to detect the hazard ratio of 25 on the primary endpoint of PFS. We are very pleased with the positive feedback that we’ve received from investigators regarding NOVA and we look forward to keeping you updated as this study progresses.

Turning now to our BRAVO trial of Niraparib for patients with breast cancer, patients are being screened for this trial and we expect to initiate patient treatment shortly. As a reminder this study is targeted to include 306 patients with locally advanced or metastatic disease who have received previous treatment with an anthracycline and taxane and up to two prior chemotherapy regimens advanced or metastatic disease. Patients will be randomized two to one to receive 300 milligram of Niraparib daily or physicians choice of capecitabine, gemcitabine, nelarabine or eribulin. The primary endpoint of the BRAVO study is progression free survival. And overall survival is the key secondary endpoint. This study has greater than 95% power to detect a three months improvement (indiscernible) to Niraparib treated patients compared to the control arm.

I will now turn to TSR 011. We presented the first clinical data from our ongoing Phase 1 study of 011 at the European Cancer Congress or ECC in September and at the 15th World Conference on Lung Cancer in October. Our Phase 1 study continues and we continued to evaluate the clinical activity of 011 in patients with ALK and TRK positive tumors. We are pleased with the initial tolerability and tumor response results that we are seeing from the Phase 1 study. All three patients without positive non-small cell lung cancer who have progressed following prior treatment with crizotinib and were evaluable for efficacy remain on treatment with TSR 011. One with RECIST PR and two with non-RECIST PR. Stable disease was reported in one papillary thyroid carcinoma patient and one pancreatic cancer patient without ALK expression. The most frequently occurring dose limiting toxicities included electrocardiogram changes which were reversible. At ECC we announced that TSR 011 is a potent inhibitor of both ALK and TRK. TRK expression is associated with tumor aggressiveness, metastatic potential, perineural invasion and pain. TRK gene rearrangements have been found in several tumor types, including non-small cell lung cancers, papillary thyroid cancer and AML. At this point we have decided to further evaluate TSR 011 dose of 60 milligram in ALK and TRK patients in an expanded Phase 1 cohort. The 60 milligram dose will be fractionated in order to provide a more consistent plasma concentration which at steady state will end the rage that results in 50% to 90% tumor growth inhibition in mouse xenograft tumor models. Importantly, the ALK positive lung cancer patients who experienced a recess partial response maintained plasma concentrations of 011 within this range, and no AEs of any grade were reported in these patients.

Finally as you now we are currently conducting a pivotal program for oral Rolapitant that will form the basis for NDA submission. The program consists of three Phase 3 trials designed to evaluate the activity of Rolapitant in preventing chemotherapy induced nausea and vomiting in patients receiving moderately emetogenic chemotherapy or MEC and highly emetogenic chemotherapy or HEC. Together the MEC and HEC, two studies will enroll more than 2300 patients in 25 countries around the world, across more than 200 clinical sites. As Lonnie mentioned two of these Phase 3 studies, a MEC study and one HEC study are fully enrolled. And we anticipate announcing top line results from these two studies at the end of the year.

The third Phase 3 study, which is being conducted in patients receiving HEC will continue to enroll until year end. As a result we expect to announce top line results from this third study in early 2014, and are targeting an NDA submission for oral Rolapitant in mid-2014. The Rolapitant IV formulation is being evaluated in a dose finding and escalation study with a goal of identifying a dose to provide comparable exposure to the oral 200 milligram dose. Once oral Rolapitant is approved, we plan to submit the IV NDA for regulatory review. As a result, we currently expect that the IV formulation of Rolapitant will be launched approximately one year after the oral becomes available. Lonnie will go into more detail about the commercial opportunity we see for Rolapitant, but I would like to briefly review the Phase 2 data we have in hand that forms the basis for a potentially differentiated profile and our continued excitement about this product.

At the time we in-license Rolapitant, the safety database consistent of over 1000 subjects derived from multiple Phase 1 and 2 studies and included a clean relativity study and a randomized double-blind study in chemotherapy induced nausea and vomiting. The design and endpoints of the Rolapitant Phase 3 program are very similar to the Phase 2 trial, which was conducted by St. Paul. A 200 milligram Rolapitant dose, which was selected for Phase 3 clearly demonstrated a consistent improvement in the primary endpoint of complete response compared to the control delay and overall time phases. Importantly, the difference seeing a complete response or CR rates between the 200 milligram arm and a control arm was large for each of the time periods measured. And the CR rates for the 200 milligram arm was statistically significant, although the trial enrolled only 90 patients per arm. The secondary endpoint revealed significant nausea contributes to the differentiated profile in Rolapitant.

No significant nausea is measured using a validated, well accepted visual analog scale, which has been used previously in registration trials for other marketed products including Emend and Aloxi. In our view, these data suggest that Rolapitant may protect an additional 2 out of every 10 patients from experiencing CINV following chemotherapy. The package insert for the currently approved NK-1 receptor antagonist Emend provides a model for the manner in which primary and secondary endpoints that have been routinely studied in CINV trials over the last two decades are presented. Endpoints for these studies is complete response or CR to find as no emesis and no use of rescue medication. Rescue medication can be used for emesis or nausea, and this recorded in patient diaries is part of the clinical studies along with the degree of nausea they experience. This is captured on a visual analog scale.

The indication statements on the last part of the slide, is driven by the CR endpoint. CR is measured in three time periods following the administration of chemotherapy, delayed 24 to 120 hours, to 0 to 24 hours and overall 0 to 120 hours. This level of detail is displayed in the clinical data section of the package insert. The results for secondary study endpoint are also captured in the clinical data section of the package insert. And we have highlighted the no emesis and no significant nausea secondary endpoints results here. You can see that the Emend results were statistically significant for the no emesis endpoint, but did not reach statistical significance and then no significant nausea endpoint. However, the indication statement, which is shown at the bottom left of the slide shows that Emend is indicated for the prevention of acute and delayed nausea and vomiting, which is based upon the complete response primary endpoint. Should our pivotal program be successful, we would expect the Rolapitant label to contain a similar indication statement for Emend. And there are secondary endpoint data, would also be captured in the clinical data section of our package insert. And with that I’ll turn the call over to Lonnie, Lonnie?

Lonnie Moulder

Thank you, Mary Lynne. Based upon our previous experience in successfully commercializing Aloxi, which is the market leading 5-HT3 receptor antagonist for CINV. Our intimate knowledge of the cancer supportive care market and a potentially differentiated product profile, we clearly believe Rolapitant has the potential to be a best in class agent. We also think that the commercial opportunity for Rolapitant will be very substantial given the clear medical need and favorable market dynamics. We are excited about this opportunity. When Rolapitant is launched, we expect that the NK1 receptor antagonists class will consist of three competing agents. We’re developing Rolapitant, Emend is marketed by Merck, and Netupitant is being developed by Helsinn as a fixed combination with the 5-HT3 receptor antagonist palonosetron. We believe that Rolapitant can be differentiated from both competitors on the basis of convenience, efficacy and safety.

From a convenience standpoint, Rolapitant has a long half-life and as a result, a single oral or IV dose of Rolapitant prior to chemotherapy may protect the patient from CINV for the full five day at risk period. Oral CINV products can in some cases be difficult to manage for patients who are experiencing nausea and vomiting, are developing two formulations, oral and IV of Rolapitant. We will allow oncologists and oncology nurses to select and utilize the formulation that they believe is most appropriate for the patients. From a safety standpoint the competing NK1 agents are CYP3A4 inhibitors and or inducers. We have completed clinical drug interaction studies that show Rolapitant does not inhibit or induced CYP3A4. This is important because many other drugs that are often coadministered to patients undergoing chemotherapy are metabolized via the CYP3A4 pathway and can often require dose adjustments, which adds additional complexity to the treatment of cancer patients.

Looking at efficacy we believe that the Rolapitant no significant nausea data may also differentiate the drug. If Rolapitant successfully meets the endpoint of no significant nausea we would expect this data to be reflected in our prescribing information which will then allow us to leverage it in our promotional activities. We believe that Rolapitant availability as single dose, oral and IV formulation the potential benefit with regard to no significant nausea and a lack of the CYP3A4 interactions will help to position it favorably in the CINV market place. Importantly, the oncology practice guidelines established by the NCCN and ASCO support significantly expanded use of NK1 receptor antagonist for the prevention of CINV compared to current market use specifically the guidelines state that every patient was treated with cisplatin each breast cancer patient who received anthracycline cyclophosphamide combinations or AC, and many patients who are administered carboplatin should receive an NK1 receptor antagonist in addition to the standard of care. Market data indicate that less than 25% of this market is currently being penetrated by Emend, which is not surprising when considering the profile of the drug and the modest level of commercial support behind the product.

Reimbursement for CINV agents, including NK-1 receptor antagonist is well established and we do not receive barriers to reimbursement of oral or IV Rolapitant. These agents provide significant value to the healthcare system by preventing subsequent expenses that maybe incurred if 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. Our goal is to further penetrate this existing underserved market with a product that can make a meaningful difference to patients and healthcare providers.

Turning now to the market size. We believe that NK-1 receptor antagonist market could total approximately $0.5 billion in the U.S. annually. By totaling all cisplatin-based regimen cycles the AC based breast cancer treatment cycles and a portion of the carboplatin-based treatment cycles, we estimate that there are 5 million cycles of chemotherapy annually that are appropriate for NK-1 utilization. As many of you know, the CINV market is heavily weighted toward IV utilization. Approximately 8% of the market is IV and 20% is oral. Certain payers prefer oral dosage forms, yet IV administration of anti-emetics enables healthcare providers to ensure patient compliance, because the anti-emetics are infused just prior to chemotherapy. Because we are developing two formulations, Rolapitant will be able to address this entire market opportunity with a convenient single dose. As a result, we believe Rolapitant is well-positioned to not only take market share, but most importantly realize the full potential for this important class of agents as directed by the guidelines.

By applying current pricing of about $300 per cycle for chemotherapy per cycle of chemotherapy for that currently marketed NK-1 receptor antagonist, the 5 million eligible days doses for the previously described HEC and MEC regimens, we estimate that the NK-1 antagonist market opportunity equates to about $1.5 billion in the United States. Our confidence in our ability to be successful with Rolapitant is in part based upon our teams, decades of collective experience in oncology and oncology supportive care. This is a team with a significant global in-licensing development regulatory and commercial expertise, a track record of successful product launches, particularly in CINV.

We have designed and assembled commercial organizations from the ground up and have successfully launched multiple products in this space by working closely with the largest oncology practice networks. We expect to launch Rolapitant with a full commercial organization, including a field sales force and appropriate medical liaison, marketing reimbursement and account team support. Our experience tells us that a commercial organization of approximately 120 associates is the appropriate size for an oncology product launch. We intend to start to build this team when we are confident in the progress of our discussions with the FDA.

As we think about launching Rolapitant and the key factors that will make us successful, we can again reflect on our previous experience in this field. We will launch Rolapitant with an appropriate sized sales force that has experience in oncology. At launch, Rolapitant will clearly be the top commercial priority for TESARO. We have the chance to partner with the 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 excellent relationships already in place with the leading key opinion leaders.

We have the opportunity to be at the forefront in educating nurses and oncologists 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-drug interactions and potential nausea benefit, plus the availability of two single-dose formulations, oral and IV, we believe we are well-positioned to significantly expand the NK-1 market, capture share and provide value to patients, nurses and physicians.

In summary, we believe we have an exciting opportunity with Rolapitant given its differentiation on the basis of convenience, efficacy and safety. We think this will be a best-in-class product. And importantly, it addresses a significant medical 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 a very meaningful product to the company from a financial perspective. Finally, we look forward to sharing data from the Rolapitant pivotal program.

Operator, at this point, could we please poll for questions?

Question-and-Answer Session

Operator

Yes. (Operator Instructions) Our first question comes from the line of Robyn Karnauskas of Deutsche Bank. Your line is now open.

Unidentified Analyst

Hey, guys. This is Olivia [ph] for Robyn. Thanks for taking my question and congrats on the progress this year. One question, just with the slight difference in the timelines for the studies, just wondered if there is anything of note there or is it just typical clinical development? And then also can you talk a little bit about the strategy for kind of disclosing the full dataset and how we should think about kind of the rolling out of that data? And I have a follow-up with me.

Mary Lynne Hedley

I think you can talk about the typical clinical development, the HEC study that has not completed enrollment yet had a larger number of Latin American sites and they took longer than expected to ramp up enrollment. We addressed that by rolling over sites from the completed HEC study on to this study. And now we see that they are – these new sites are contributing to enrollment and we are getting back on track. So really, it was just a larger distribution of Latin American sites in this HEC study than the one that already finished.

And related to the data rollout, we would anticipate at the end of this year announcing the top line data, which would include the primary efficacy endpoint, the key secondary and the secondary endpoints. And it’s likely that we would report whether it is essentially statistically significant or not as you can imagine, we would like to keep the details of that data for a scientific meeting. So you can expect to see all of that data from the HEC, one of the HEC studies and the MEC study at the end of the year. And then early in 2014, it would – the same data would come from the HEC-1 study, the remaining HEC study.

Unidentified Analyst

And can I speak of that follow up?

Mary Lynne Hedley

Sure.

Unidentified Analyst

Cool. If we are thinking about the nausea benefit is not selling, you talk a little about how you will – does your strategy change like how what were you kind of focused on or in the sort of the marketing side of the house?

Lonnie Moulder

Yes. Obviously, based on the Phase 2 data, we are bullish about the potential for the no significant nausea data, but if you look at the ASCO and NCCN guidelines, which are based on the current NK-1 receptor antagonist, that does not demonstrate a clinical or statistically significant benefit related to nausea in its pivotal trials. The patients clearly benefit the data indicates that these drugs should be used. So our strategy of really moving Rolapitant to the pathways that are utilized by community oncology networks, formularies and hospitals. And then we are just working towards getting compliance with the guidelines wouldn’t change. So I think having the promotional hook for the sales force around the significant nausea is clearly a good thing. But in general, if you think about it, the guidelines are in place now relative to the data from the other drug. And it’s really our job to help the oncology community move towards compliance with those guidelines, which as you know to very significant market opportunity. If in fact, the 5 million doses were penetrated that’s a U.S. opportunity of $1.5 billion and then obviously we get our fair share of that.

Unidentified Analyst

Excellent. Great, thanks.

Operator

Thank you. Our next question comes from the line of Chris Raymond of Robert Baird. Your line is now open.

Chris Raymond – Robert Baird

Hey, thanks. I don’t want to sound like I am sort of splitting here in terms of language, but I think I remember when you guys originally talked about the Rolapitant data and then filing timing? I think the language had been data by year end and then a filing shortly thereafter. Am I reading too much into the language now that filing should be by mid-year or is this – are you guys just putting that out there as a sort of a conservative sort of language? Can you help us with that?

Lonnie Moulder

Sure, Chris. I think my recollection because we thought this through. What we always said was to utilize the industry standards for the preparation of an NDA, so what is typically done. And I think the timeframe that we laid out today is what the industry-standard is in fact for NDA. If we have the top line results obviously on two of the trials by year-end and then we follow up with the additional trial. I will tell you that additional trial isn’t really the rate limiter. It’s into this industry-standard from where we are today to have an NDA by mid-2014.

Chris Raymond – Robert Baird

Okay, perfect. Thanks for explaining that. And then maybe just a detail question on TSR-011, so you may kind of and treat by this activity, this track activity that you guys talked about, you mean the data that you have in your slides, it looks like track A seems to be where the drug is the most potent. And when you look at the tumor types it does appear that thyroid might be attractive, is that we should be thinking here is that perhaps a trial could be run there, or just am I reading again too much in the things.

Lonnie Moulder

Well, yes. So based on the data we have from IC50 clearly track that the drug is active against TRK A, but when we look at the different lines, TRK A, TRK B, TRK C, there is definitely still significant activity against the end of these. So for example and this was presented at the World Lung Cancer Conference. The TRK A IC 50 is about 2 nanamole. The TRK B is about 14, and the TRK C is about 26, so still very much within the concentrations that we can achieve effectively in the clinic. So I wouldn’t necessarily estimate that we would manifest specifically to TRK A. In terms of where we might explore this clinically, I first stood up by saying that I think we are pretty much with TRK where we were with ALK community 5 years ago, it wasn’t really clear what that prevalence of ALK was in lung cancer or anywhere for that matter. So TRK is very early. So what we know now is that if you take for example, certainly 7% to 10% of papillary thyroid carcinomas are passed. It might represent one potential administration strategy. It seems that also when I report that actually just was published a week or so ago that about 3% of marker negative lung cancer patients are also TRK positive. These are patients that don’t have ALK or EGFR or BRaF mutations. So that also might represent a unique opportunity because again those patients are typically be it lung cancer patients are typically (indiscernible) mutations.

And so if they don’t have those mutations, there is a possibility that they would have a TRK fusion mutation. And there is a possibility of looking for overexpression. So there is a fusion mutation and then there is overexpression and potentially like and driven growth of tumors. And that could appear in lung cancer. It could also appear in (indiscernible) blood. We know that also AML patients have potential fusions about 50% of those. I think it would be too early for us to disclose because I will draw a line and could tell where we stand related to typically where we would go, but I think again there is some opportunities that make this ALK/TRK inhibitor unique and offer us some novel opportunities that other people with ALK inhibitors don’t think to have at this point.

Chris Raymond – Robert Baird

Great, thanks for that.

Lonnie Moulder

Yes.

Operator

Our next question comes from (indiscernible). Your line is now open.

Unidentified Analyst

Thank you for taking my question. So if you don’t mind, I just have a few the first one is just housekeeping merely and to make sure I think I might have misheard, but did you mention that by the end of the year, when you released the two Phase 3 studies for Rolapitant, you will or you will not disclose the typical significance on the primary and secondary, I just couldn’t hear.

Lonnie Moulder

We will disclose whether or not the studies are, each of the different end points are specifically significant, yeah.

Unidentified Analyst

Okay, well. And concluding the secondary, all are secondary?

Lonnie Moulder

Yes. the primary, the key secondaries, and the secondaries all of them including more specifically significant nausea.

Unidentified Analyst

Thank you. And then maybe just recently, there has been a national coverage determination for moderating metogenic chemotherapy, and specifically was related to Emend, how is that going to potentially expand the market, do you have any sense, it looks like there is a higher incidence of following the guidelines in HEC than in MEC. Is it functional reimbursement or is it a function of clinical need?

Lonnie Moulder

I think there are several questions embedded in there. The actual national coverage decision that allows for all current MEC and future regimens defined as MEC to have reimbursement for an oral NK1 receptor antagonist. I think we will use perhaps in some instances a barrier that may have exist relative to reimbursement HEC, which includes cisplatin and breast cancer patients receiving in our view those two combined to 70% of the opportunity. HEC has always been in place, but MEC has been constrained in some areas of the country some regions, so this helps that. Our focus of course will be initially relative to HEC, but overtime I think this could be helpful.

Unidentified Analyst

And then from the Phase 3 for the IV, what’s your latest thinking as to what you are going to need to do, is it (indiscernible) equivalence we have to do small clinical study?

Lonnie Moulder

So given (indiscernible) obviously that will be our discussion with the FDA as we have already said, but our plans are consistent with what we are seeing from a clinical perspective that far is that we wouldn’t be able to achieve bioequivalence from an exposure perspective using the IV formulation and in comparison to the 200 mg oral dose. We actually at this point believe based on the data that we are seeing from the clinical trial that is ongoing that the IV dose will probably be within 10% plus or minus of the oral dose. And so that’s looking pretty good. And of course remember the CMAC will be higher right because it’s an IV infusion, but again on the exposure we should not spell equivalence and that we essentially did with their first introduction of an IV single day to replace a single day oral. They did a bioequivalence study. We would we built into the timelines essentially the ability to do a clinical experience study just in case we needed it for additional safety data, but at this point at least based on being able to match bioequivalence we feel pretty confident that we we’ll be able to do that.

Unidentified Analyst

Thanks. And just finally going to relating to the dose of TSR-011 you mentioned 60 mg but you mentioned it’s going to be tablet, it’s going to be a fractionated dose, the tablet, which can be a b.i.d. dose. Is it fixed to b.i.d. or are you referring to 30 b.i.d. and what is the exposure of 60 mg relative to what you are thinking it to be? Thank you.

Lonnie Moulder

So actually, we are going to be looking at two different possibilities and it is going to be 60 delivered at 30 mg b.i.d or 20 mg t.i.d., but the goal really is to replace either of those with an extended release formulation that we’re working on now. And the real ultimate goal from plasma concentration perspective, the CMAC because that dose limiting toxicity with PT prolongation that we clearly demonstrated in the patients we’ve seen so far associated with CMAC, so that’s dose responsive. So when we get down to the 60 mg dose bottle, the plasma exposure that is achieved with a fractionated 60 mg dose based on modeling is the same plasma exposure observed with the patient who actually had the recent response rate, the ALK positive patient. So from a clinical perspective, the plasma exposure that we are targeting with an extended release formulation is where we want to be clinically. And also the pre-clinical data supports that plasma exposure provide at steady state, plasma concentration within the range between the EC50 and the EC90 for the xenograft tumor studies in the mice. Does that help?

Unidentified Analyst

Yes, absolutely. And I guess if you don’t mind and the extended release will be when. Is it would be you will take the extended release to the Phase 3 or you will move this formulation forward and then come out with a backup. Thank you.

Lonnie Moulder

Yes, the current plan right now is to have a Phase 1 expansion cohort where we are only looking at ALK and TRK patients those patient who receive the current formulation as 30 mg b.i.d. or 20 mg t.i.d., we will make sure that the plasma concentrations provided by those different doses scheduled results in the plasma exposures as the model predicts and model has been pretty good thus far I have to say. So that’s just confirmation and in parallel we are working on the extended release which we would anticipate introducing into the clinic at this time next year. And then we will enter that Phase 2 expansion cohort and during that time we will be essentially confirming that the extended release formulation provides that same plasma concentration as the 20 t.i.d. or the 30 b.i.d. which maintains the plasma concentration required for what we see – where we clinical activity today. And in parallel we have planed the Phase 3 registration study so that we would be able to initiate those very soon after having a confirmation (for expansion) cohort from Phase 2. Is that clear?

Unidentified Analyst

Yes, thank you.

Mary Lynne Hedley

You’re welcome.

Operator

Thank you. Our next question comes from the line of Peter Lawson of Mizuho Securities USA. Your line is now open.

Peter Lawson – Mizuho Securities USA

Mary Lynne can you (indiscernible) all three Phase 3 trial results from (indiscernible) submit an NDA and do you think was it possible to get the FDA approval by year end 2014?

Mary Lynne Hedley

So the first question related to do we need the results from all three studies, I guess what I can tell you is historically what happened and what our competitors intend to do. So with Rolapitant they had two HEC-2 studies submit with one Phase 2 HEC-2 study and we have one Phase 2 robust international placebo controlled so well controlled Phase 2 studies. We have completed a Phase 3 HEC study. So whether we need this third HEC study I guess this to be above but it’s nice to have of course. Your second question I think is related to is, it possible to have FDA approval by the end of 2014. And I would say no, that’s not possible. We anticipate a standard review not an accelerated review.

Peter Lawson – Mizuho Securities USA

Excellent. And then I guess on the (indiscernible) enter in the market potentially as a second player or a second place player how do that change your go to market approach?

Lonnie Moulder

Thank you. So first of all from a timing standpoint, I don’t see a reason why we would be second except perhaps in the ovarian cancer setting in Europe. But in the U.S. Niraparib was the first of the PARP inhibitors to move into Phase 3 of the currently develop – developing PARP inhibitors, so ovarian cancer Phase 3 was initiated in July that’s ahead of the other players. And as we discussed we are about to enroll our first patient in the breast cancer Phase 3 program. So I would say we are neck-in-neck for being first. So now it’s about execution. But regardless of whether we are first or second perhaps second in ovarian in Europe, we clearly feel very good about the profile. As Mary Lynne articulated based on published data what we have seen from an activity standpoint and our comfort with the tolerance profile of the drug, we think its well-positioned to be potentially best and first-in-class in both breast cancer and the ovarian cancer maintenance setting.

Peter Lawson – Mizuho Securities USA

And to being the second place in Europe can affect in any way that go-to-market approach. And then just as I guess a follow-up when will you expect to know the data?

Lonnie Moulder

We haven’t guided as to when you would expect to see data. As you know, we just started the ovarian trial in July. We prefer to have some time pass as we see the enrollment of that trial before we would suggest timing and with the breast cancer trial is just about to begin I think it’s premature to suggest timing. Obviously, these field studies have been completed in the past in the ovarian maintenance study with olaparib, the AstraZenecal Phase 2 program, which was a bit smaller than our Phase 3 program took about 15 months to enroll. That just gives you a general sense perhaps, if you want to try and do some calculations looking at the size of our trial, but that’s all we would say about timing of data.

Peter Lawson – Mizuho Securities USA

Interesting. Just finally, do you have any data?

Lonnie Moulder

No, we do not. The dataset at ASCO is the full dataset from the most recent clinical trial of Niraparib. And of course now that we are in Phase 3, patients Phase 3 in the breast cancer setting, obviously the next datasets that we contemplate are from those programs unless of course with any additional work we may be contemplating in Phase 2 or today, we announced the collaboration with SARC in the sarcoma if any data becomes available from that work sooner. Of course, you will see that at a medical venue.

Peter Lawson – Mizuho Securities USA

Thanks so much.

Operator

(Operator Instructions) Our next question comes from Jim Birchenough of BMO Capital Markets. Your line is now open.

Unidentified Analyst

Good afternoon. Thanks for taking my question. It’s Ken [ph] for Jim. First, I’d just like to clarify, I think is something Lonnie you said about building the commercial theme and I think you said something about when we have confidence in our discussions with FDA. Presumably, that relates to confidence about the timing of that approval as opposed to approvability. But you don’t want to bring on the commercial team too early as it were, you want to bring them on at the optimal time and the trigger for that is when you have some sense of whether you are likely to be approved within 10 months or 12 months?

Lonnie Moulder

That’s right, Nick. You are spot on. This will be the fourth time I build a commercial organization oncology and you understand you get it.

Unidentified Analyst

Okay. And my next question just goes back to the clinical program, so is it fair to say that (indiscernible) you have selected higher dose or do you really think that there is 60 milligram in an extended release form here in fact an optimal dose?

Mary Lynne Hedley

I say, I think it’s an optimal dose, because what we are trying to balance here is achieving somewhere between the EC50 and EC90 and based on past experiences meaning other people who are developing kinase inhibitors, if you are able to maintain that plasma level, you see very significant clinical outcome. At that plasma level, we inhibit ALK almost 100% in the tumors of regressing that are coming out of animals where tumors are regressing. So, that’s sort of quite significant plasma concentration and just to extend that into, for example, the laboratory. There it’s very clear that if you hit 80%, it’s the target right and the 80% that you have very significant clinical activity. We are seeing 100% in this plasma concentration and we know from a clinical perspective that we are able to see activity in ALK positive patients who progressed on (indiscernible) the level from an efficacy perspective, this is right where we want to be, but what we are also trying to balance, because we are in a competitive field right is we are trying to have improved tolerability over what other people are looking.

And this drug has been as what’s predicted from the preclinical work because of it’s extremely high potency, remember it’s (indiscernible), okay, which is why we can have a dose so low. It’s not only that, because you can have that plasma concentration and the selectivity of this molecule is so high that we don’t see any of those other adverse events that typically limit dosing that are off-target targets, so limit dosing with these kinase inhibitors. So if we can take a dose that doesn’t result in 50% of the patients having constipation and nausea and elevated – and some percent having elevated liver enzymes, we actually think that, that improved tolerability with long-term use, because as you know the drugs when they work, they work – patients are on them a long time. It provides a pretty optimal ALK inhibitor and certainly for our first-in-class TRK inhibitor.

Unidentified Analyst

If I may just one following up on that I think like the new frontier for a lot of these the second generation ALK inhibitors the CNS activity and do you have any data yet suggesting TSR-011 gets the CNS and gets the concentration you think it’s going to be active?

Mary Lynne Hedley

And entirely so far, we haven’t been able to explore that question, because we don’t have patients with CNS now. So as we continue to run expansion, I think it makes sense to your point to start to include those patients.

Unidentified Analyst

Okay. Thank you very much.

Mary Lynne Hedley

You’re welcome.

Operator

And I am showing no further questions at this time. I would like to hand the call back over to Lonnie Moulder for any closing remarks.

Lonnie Moulder

Thank you. I will close with a brief summary of our corporate objectives. We plan to announce the top line results from two Phase 3 trials evaluating oral Rolapitant at year end, announce top line results from the third Phase 3 trial of oral Rolapitant in patients receiving HEC in early 2014. Advance the clinical development of the Rolapitant IV formulation in order to support a future submission for registration following regulatory approval as the Rolapitant oral formulation, submit the oral Rolapitant NDA to the U.S. FDA in mid-2014, continue enrollment in the NOVA study of Niraparib as a potential maintenance therapy for patients with platinum-sensitive ovarian cancer, initiate patient treatment in a BRAVO study of Niraparib in breast cancer patients with Germline BRCA mutations by the end of 2013 and evaluate the clinical activity and safety of the dose of TSR 011 in ALK and TRK positive patients. We appreciate your interest in TESARO and thank you. Have a good evening.

Operator

Thank you. This concludes TESARO third quarter operating results conference call. You may all disconnect.

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