Clovis Oncology Management Presents at Credit Suisse 2013 Annual Healthcare Conference (Transcript)

| About: Clovis Oncology (CLVS)

Clovis Oncology Inc. (NASDAQ:CLVS)

Credit Suisse 2013 Annual Healthcare Conference Call

November 12, 2013 6:00 PM ET


Erle Mast – CFO


Ravi Mehrotra - Credit Suisse

Ravi Mehrotra - Credit Suisse

And in terms of keep to time I want to kick off our next presentation Erle Mast, CFO of Clovis Oncology. I was going to say it’s one of the most exciting early-stage oncology plays but they are actually going to pivotal next year, so not so early-stage. Let me hand over to Erle.

Erle Mast

Thanks, Ravi and thanks for choosing me over the Arizona sunshine so late in the day I appreciate that. It’s funny when I – we are at this conference kind of reminds me how much things can change for a biotech company in a brief 12- month period. When we were here presenting a year ago, I think it was the day after that we announced that the pivotal trial for our lead program had sales. And so that was obviously a very disappointing day for all the Clovis stakeholders if you will.

Fortunately, we had a portfolio of two very interesting compounds behind that lead program, that during the past twelve months have made significant progress and really put the company on what we think is very strong footing and setting the tables for a very important 2014 as we transition some of our, as Ravi pointed out, what could have been described as early-stage programs advancing into Phase II and to Phase III studies.

So I appreciate the opportunity to share with you today a little bit about each of those programs.

And start with the forward-looking statement, I will be making some statements into the future that are our best guess based on the information we had today and I will refer you to our SEC filings and outline the risk that could change those as we progress.

So investment highlights. Just a little background on the company. Clovis was formed in 2009 and if you look at the way the company exists today compared to what we were trying to build when we formed the company, they are very much similar.

We are oncology-focused, so the only therapeutic area that we are developing drugs in is in oncology and when we built the company, we wanted to build strengths around clinical development, regulatory and then hopefully one day commercialization. We are a licensing-based company.

We do not have any house drug discovery or those capabilities and instead look to license compounds in or in some cases do collaborations with discovery companies if we have specific targets that we want to pursue. We have two programs that are in clinical development and over the past twelve months.

We have presented initial and what we think is encouraging data of activity and for tolerability for each of these programs, both programs we plan to move into pivotal trials in the near-term.

And for each of these programs, we have license and retained global and development rights and in the end I’ll show that we have a very strong balance sheet to have the ability to move these programs forward on our own, should we choose to do that.

So, let me start with the first program which is known as CO-1686. CO-1686 is an oral selective covalent inhibitor of EGFR mutations for the treatment of non-small cell lung cancer and when 1686 was designed, it was designed by a company called Avila Therapeutics, who we licensed this compound from and they’ve subsequently been acquired by Celgene.

And there are really three objectives in mind when this drug was – we were working on this drug with Avila. First of all, we wanted to inhibit both activating EGFR mutations as well as the primary resistant mutation known as T790M and non-small cell lung cancer.

And then in addition to that, and importantly, we wanted to spare wild-type receptor signaling to improve the safety profile of these first generation TKIs as many of you probably know can be pretty toxic in GI and skin rashes and skin toxicities.

This is a drug that we believe has the potential as a treatment both in first and second line therapy. We’ve had a Phase I study ongoing now for about 18 months which can be a long time for a Phase I study in oncology.

During this time, we started a very low dose of around 150 milligrams per day that went as high as 1800 milligrams a day and then also during this year, we’ve transitioned the formulation to improve the PK profile and patient variability of dosing for CO-1686.

So that took a little bit of time as we transitioned from the original formulation to the hydrobromide salt which I will talk about in a minute. We think we are very close to identifying the dose to move into Phase II studies for 1686 and we have planned for the first half of next year to move into Phase II as well as to begin our initial pivotal study for 1686.

A little background on the treatment of lung cancer and those of you who are familiar with oncology, this is also probably very familiar to you. There is some more of a growing trend of treating lung cancer based on the oncogene driver for the particular patient.

And one of the more common oncogene that has been identified is activating mutations around EGFR and western populations about 15% of the non-small cell lung cancer patients have EGFR activated disease, and in the eastern population, that estimate is actually twice as high, it’s about 30% of patients.

The standard care of treating these patients today are really what, we refer to as first or second generation TKI therapies such as Tarceva, Iressa and Afatinib, which was recently approved.

Patients generally respond well to these first-line therapies but they do progress, and today there is really no approved therapy for second-line patients they typically will get chemotherapy and then possibly even in later lines be retreated with a first-generation TKI.

So when the do progress, what is the cause? The primary resistance mutation is known as T790M and you can see from this chart that about – it is estimated about 60% of the patients who do progress on one of the first generation TKIs do so, due to this, the emergence of this resistance mutation.

And as I mentioned, there are no therapies today approved to treat this and that's where 1686 comes into the picture.

So let me take you back and I’ll walk you through the clinical data and pre-clinical that we have presented to-date for this compound. First of all, the summary of the highlights if you will of the pre-clinical and the animal models.

These two charts show the effects of using 1686 in xenograft models for double mutations, both the activating and the T790M mutation in mice models. And you can see from the chart on the left that as compared to Tarceva where you had tumor growth continue in the mice.

We did have tumor regression in 1686 and again this really due to the presence of the T790M mutation. The chart on the right is intended to show the lack of GI toxicities in these mice, the way that's primarily assessed is to look at whether or not if there is any weight loss.

And you can see with the 1686 line in the red, that the mice maintained their way to their treatment which was an indicator to us that we have been successful at least on avoiding the GI toxicities in this animal model.

We were also interested in understanding whether or not our drug was – as design was successful inhibiting the activating mutation for EGFR. And so, these are the preclinical models for a front-line EGFR setting looking at the Deletion19 mutation.

In this situation, in this study, we compared 1686 against both Erlotinib and Afatinib, and again, you can see in this study on the left, the three lines on the bottom are should be the active drugs pretty much laying on top of each other and so it gave us confidence that this drug is inhibiting the activating mutations and then we hope to replicate this as move into human studies in the first-line setting in 2014.

And again on the right, with the 1686 line showing that the mice maintained their weight, again another positive sign with respect to avoiding the wild-type EGFR hitting that target.

So, where are we with 1686 as we move now into human data? The initial data that we presented were shown at ASCO earlier this year and at that time, we showed at the 1900 milligram dose which was what we believed as the initial formulation that we had. We started to see some early signs of efficacy and in three of the four patients that we showed at ASCO had achieved PRs, which is very encouraging to us.

And we recently updated those data at the World Lung Conference that occurred in Sydney just a few weeks ago. And again looking at the valuable patients, T790M positive who were dosed at the 900 milligram BID dose, we had a 67% response rate in those patients or six out of nine.

Eight of the nine patients demonstrated either a PR or had tumor shrinkage that was at least 10% or greater and equally encouraging to us is that across all the dosing cohorts and including these patients 1686 has been well tolerated who had no rash. So, and which should be consistent again with the absence of some sort of wild-type EGFR inhibition.

And we are continuing the Phase I studies with dose escalation and we’ve transitioned to an improved hydrobromide salt and we just are in our second cohort of patients with that new formulation and I will talk about that in a minute. When we go over the data that we presented at the World Lung Conference, I think, looking at the waterfall chart provides a couple other interesting insights.

So you can see, here are the nine patients that are viable at the 900 milligram dose. The gold bars represents those patients who are still on drug, the blue bars those patients who have progressed and a couple of things I would point out here.

First of all, at IALSC, eight of the patients in our study were coming directly from another TKI therapy and we are looking at really assessing a compound’s ability to inhibit the T790M mutation.

This is an important distinction. Sometimes patients in Phase I studies you are getting, maybe coming directly off a TKI, they may have had some other chemotherapy treatment in between the drug that you are testing and they are first-line treatment. It’s possible to have a re-treatment effect with TKI therapy.

So a patient, often times in practice, a patient who is treated with Tarceva may progress, go on to chemotherapy, the activating mutations emerge again and they can re-treated with Tarceva again and show a response, sometimes in studies we’ve seen as high as 30% to 35%. So it’s important to us to have as many patients as we can who are coming directly from a TKI, really to show the effect of the drug on the T790M mutation.

And then finally as we have patients on drug for a little longer we are starting to see some maturing and duration of response data. So you can see we’ve got patients here who have been on drug for 30-weeks, these are the numbers on the bar charts, 21-weeks, 22, 22, 24.

So, again these data are still somewhat immature and we will have more data as time goes on and patients who are drug for longer are starting to see some encouraging signs of duration of response.

The hydrobromide salt I mentioned, so we – as this is common in drug development, the formulation that you start with can be quite true and which is basically what we had with our free base formulation basically taking active drug and putting it into a capsule. And when we looked at the initial PK data, we had a couple of objectives that we wanted to improve upon, one was reducing the variability of dosing between patients and also improving the exposure.

As I mentioned, we started very low doses and we were up to 900 milligrams twice a day and so last spring we embarked on an effort to develop a second formulation using a hydrobromide salt with the goal of improving – making the improvements that I just mentioned.

So what we presented at World Lung was some of the initial data of the first cohorts of patients being dosed with a hydrobromide salt. So this is in our existing Phase I study and you can see the green line which shows much better exposures of 1686 as compared to the yellow line, which is the average of all of the 900 milligram dose patients.

Now to be clear the hydrobromide salt this is only for three patients and so, more to come on this, but we are very encouraged to see the PK profile that these first queue patients exhibited and it’s well tolerated. So we have treated three patients at the 500 milligram BID dose.

We had – from the first cycle which is what we have been through, we had no dose limiting toxicities, no sign of rash or diarrhea. And then patients have continued on study. We are currently dosing at the 750 milligram BID dose and we just started that cohort.

Our development strategy for 1686, as I mentioned earlier on our objective is to develop this drug as a first-line therapy through EGFR-driven non-small cell lung cancer as well as the second-line treatment for T790M positive non-small cell lung cancer patients. The next steps for us in this – in running out this strategy are first of all to establish the dose.

We think we are very close to that with the hydrobromide salt formulation and we hope to have that done right around year end. Once we have determined the Phase II dose, then we will initiate Phase II cohorts both in second-line T790M positive patients as well as the first-line EGFR patients. And then also we are commencing our Phase I study in Japan.

We hope in Japan, to be able to determine the dose on the same timetable as we are about on, or not too far behind in the U.S. and European populations. We obviously hope as the same dose and then as we move to pivotal studies, we can include sites in Japan and use those data for submission in Japan as well.

Now our objective for second-line T790M patients is to seek accelerated approval based on a single arm registration study and this would follow the example of - crizotinib for example, or Pfizer got approved under the same regulatory strategy. So, again if we continue to see the signs of efficacy that we have so far to give us confidence on maintaining a strong response rate.

And then we would initiate a single arm registration study in the first half of 2014, a primary endpoint will be response rates and we would also submit with that duration of response data on some of the patients and then if we are successful in going down this development path. Then we have the potential for an NDA submission sometime in late 2015.

So with that, let me transition to our second product which is Rucaparib. Rucaparib is an oral inhibitor of PARP-1 and PARP-2 and those of you who have followed the oncology space for sometime, probably remember that PARP inhibitors have gone through a bit of a rollercoaster through their development. And I think it’s a pathway that has a lot of clinician enthusiasm and has really shown significant benefits to patients in identifying the right patients who will respond to PARP inhibitors.

We think there is an opportunity in treating patients with both BRCA mutations as well as other DNA repair deficiencies which I’ll talk about in a minute. In the past several months, we have provided the initial evidence of activity from the Phase I trials that we have done and we have presented this at various conferences.

We did earlier this year established our Phase II(3) dose, 600 milligrams given twice a day and then just in October, we enrolled our first patient in a Phase II study that we are calling ARIEL2 which is a trial looking at Rucaparib in ovarian cancer and the objective of this study is to identify patients that are most likely to respond to Rucaparib treatment, not just BRCA mutations.

But other genetic mutations that are indicative of some sort of breakdown in the DNA repair mechanism and therefore that we think would respond to a PARP inhibitor. We expect to initiate ARIEL3 which our pivotal program, at least getting sites up and running by year and then have patients enrolled just probably right after the beginning of 2014. So, a little bit of background on PARP inhibitors and what they do.

PARP is an enzyme and it’s part of the repair pathway for DNA breaks and what PARP inhibitors do is, they target cancer cells using something called synthetic lethality which is basically the combination of a PARP inhibitor with the impairment of the other DNA repair pathways to induce a cell death.

And this is called Homologous Recombination Deficiency. The most common biomarker for HRD out there now is BRCA1/2 mutations. Those are well recognized and I think as most of you know and there is evidence, and that there are also other HRD mutations that we believe would make a patient sensitive to PARP in addition which we refer to as BRCA-ness and as those additional patients on top of the BRCA patients that we are targeting in our development plan.

So a summary of the data that we presented so far, we have patients on Rucaparib have demonstrated objective responses in various tumor types including ovarian, in breast and in pancreatic cancer patients who have Germline BRCA mutations.

And in ovarian cancer, patients with Germline BRCA, we had a 70% disease control rate which is PR or a stable disease of greater than 24 weeks and as expected these are very heavily pre-treated patients and we’ve had good tolerability of Rucaparib all the way up to the selective dose of 600 milligrams BID.

The drug has very attractive PK properties, limited low inter-patient variability predicted drug concentrations which for us is very important as we look at this in a maintenance setting.

This is a good schematic really to show the target patients that we are going after and again, I think there is the majority of the development work so far and for PARP inhibitors really focused on Germline BRCA patients which as you can see from this chart makes up about 15% of patients who have high-grade serious ovarian cancer.

And in our clinical development work, we are working with Foundation Medicine and doing next generation sequencing of tumors where we can identify other genetic mutations beyond just Germline BRCA. We can also identify Somatic BRCA mutations.

And then again, what I refer to is non-BRCA HRD or BRCA-ness and this is an expense to patient population or those patients who we think will respond to PARP therapy from around 15% of ovarian cancer patients to close to 50%. So it’s a key component and then a differentiation of our development strategy of really expanding this patient population who we believe will be responsive to PARP therapy.

Our registration strategy, again we will have two studies that we are performing in women who have relapsed platinum-sensitive ovarian cancer that will start in this year. As I mentioned our Phase II study ARIEL2 initiated in October with our first patient enrolled.

And the objective here is we will collect tumor samples from these patients, sequence them and the correlate outcomes with the different genetic mutations that we identified through the DNA sequencing and assess Rucaparib response in those patients and then use that information really to inform the Phase III registration study.

We will initiate that study at the end of this year and that will be looked at Rucaparib as a maintenance therapy treatment for ovarian cancer patients. We will do our primary efficacy analysis will be done in three patient groups in a step-down statistical approach. Initially looking at the mutant BRCA both the Germline and Somatic.

The HRD patients, so that would be BRCA and non-BRCA and then looking at all patients and again that study will commenced right at the end of this year beginning in next year.

Moving to our financial position. We are on solid footing. At the end of the third quarter, we had just over $350 million in cash. This obviously gives us plenty of cash to get through key clinical data for both programs over the next few years.

Our guidance for 2013 is that we will burn about $66 million in cash that will go up next year, we’ll give guidance for 2014 as we get closer to that year, but we will have numerous clinical studies in both programs running. But we do have a strong cash position.

And then finally let me close with reviewing the upcoming milestones that we have for both programs. So for 1686, again to identify the recommended Phase II dose and we should do that right around year-end.

To initiate the Phase II cohorts both in second-line T790M positive patients as well as in first-line patients to initiate the registration study - the initial registration study in T790M positive patients in the first half of next year and our first Phase I study in Japan.

And then finally for Rucaparib, we are really getting to the point now we are just executing on the clinical trials and the next key milestone for Rucaparib will be to initiate the ARIEL3 or the Phase III registration study in ovarian cancer. So, again 2014 seem like every year for a biotech company.

Every year you ran is the important that you had. 2013 was certainly that for us and as we move into 2014, it should be very exciting for us as well as we continue to advance our programs into Phase II and Phase III. So, thank you again for your attendance and I think we’ll have a breakout session. I’ll be happy to answer your questions. Thank you.

Question-and-Answer Session

[No Q&A session for this event]

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