Array BioPharma Inc. (NASDAQ:ARRY)
Jefferies 2013 Global Healthcare Conference Call
November 20, 2013 3:40 AM ET
Ron Squarer – CEO
Eun Yang – Jefferies
Eun Yang – Jefferies
Good morning. This is Eun Yang, a biotech analyst with the Jefferies. We are happy to have Array BioPharma today. Array is focusing on small molecule drug development with two Phase III products partnered with Novartis and AstraZeneca, but also the company has proprietary programs moving into Phase III next year. The focus – the therapeutic focus of Array is cancer and inflammation and presenting from Array today is CEO Ron Squarer.
Good morning. I am going to be making some forward-looking statements today. So, I do encourage everyone to take a look at our 10-K and other SEC filings for a full discussion of risks associated with our forecasts. It’s great to be here today and it is a very exciting time for Array.
In that - as was mentioned, not only do we have two most advanced partnered programs now in a total of six pivotal trials, which are either running or planned to begin running by the end of the year. But we have recently announced that we intend to run a Phase III randomized trial for full registration for our lead wholly-owned program in multiple myeloma, Array-520.
And so we’ve put some data out in the ASH abstracts, which have just recently published and looking forward to providing more details on a number of aspects of the program at the ASH Meeting in a couple of weeks. So, as I said, a very exciting time both for our lead partner and lead internal wholly-owned programs.
We are also providing update both through abstracts and at the meeting on our Myelodysplastic Syndrome program, also wholly-owned at this point. We had a long history of partnering at Array.
In fact we have ten clinical stage partnered programs; seven of those programs are in either Phase II or Phase III. Many of these arrangements do anticipate double-digit royalties assuming success and have milestones even before royalties that could total as high as $2.7 billion.
So jumping into Array-520, our lead internal program. It is a highly selective KSP inhibitor. And what’s really quite unique about it, other than the fact that it is a unique mechanism entering the myeloma space, a space that is, as you may know dominated currently by the proteasome inhibitors or IMiDs - PIs or IMiDs.
And as a result, we feel that 520 can play an important role of treating patients who have failed at PIs and IMiDs and often failed multiple times and we also feel that 520 could be used in combination and that’s how we’ve been studying the asset.
I think, what’s also unique about the mechanism important to notice that, it acts preferentially on hematopoietic cells over epithelial cells, based on Mcl-1 survival dependence.
And as a result, we see little to no non-hematologic effect. So, no little to no GI alopecia or certainly neuropathy and the hematopoietic effects are very well managed and tend not to be asymptomatic and any effects tend to not to be cumulative as well.
So, across a number of settings now single agent combination with dexamethasone, combination with Kyprolis and combination with Velcade. We’ve seen this very consistent profile and well-tolerated able to combine.
In fact, we’ve now, through the data we are presenting at ASH have now demonstrated the ability to dose a full dose of 520 and full dose of both Kyprolis and Velcade in two separate studies, all with that same profile.
The other very important data that we’ve been presenting lately, perhaps the most important aspect of the data we’ve generated is a robust single-agent activity, which we believe would be additive to other mechanisms, which behave differently than KSP.
And in fact, by using a selection marker which we have identified and are developing as a companion diagnostic AAG we see very robust single agent responses in heavily pre-treated population. So, we do believe AAG will be an important part of our program moving forward.
Myeloma is the second most common hematologic cancer, there we go. So, quite a sizable population, unfortunately, most patients as you know, do progress and ultimately succumb to the disease.
There has been some tremendous commercial success with new agents recently, namely, the recent launches of Kyprolis and Pomalyst, both exceeding roughly $200 million of sales in early months and are expected to both exceed $1 billion. And, so it’s pretty clear that the sale of Onyx to Amgen for $11 billion was anchored by Kyprolis.
So, as I mentioned, we have now announced our intention to start a Phase III trial for a full registration for 520 and the initial program is in combination with Kyprolis. So Kyprolis, plus or minus 520 we will be announcing more details as we get closer to the start of the trial, but we are talking about a trial that is size similar to other full registration programs in myeloma, a primary endpoint being PFS.
But we also will be looking at the AAG marker as a secondary endpoint and expect also to look potentially at a response rate interim analysis that could support an accelerated approval from the same study.
So as I mentioned, this study here in a little more detail is designed to support full FDA and EMA approval. It does have the potential for that ORR analysis and it is supported by robust data which we presented in the past and we will be updating at ASH from an existing Kyprolis 520 combination in which we are seeing robust clinical benefit rates and response rates in patients who are quite heavily pre-treated and many of whom actually have been – had already seen Kyprolis or 520.
I’ll show you a little bit more data in a moment. So here, if you look on the left, you’ll see on Slide 9, the data that we’ve been presenting today, there will be a little more at the actual ASH Meeting.
But we are treating patients who are 100% Velcade refractory and as I mentioned, a third have seen actually 520 or Kyprolis and yet what we are seeing beyond the very high clinical benefit rate is response rates in the 30s, where you would expect in this population Kyprolis alone to generate a response rate of about 16. So excited by the early evidence that we are seeing.
Of course, most importantly, we are able to combine and have seen the same tolerability profile that I discussed earlier, patients well managed, little to no non-hematologic effects.
And if we then turn to Velcade here, we are talking about patients who have seen Velcade, all of them and typically have seen five prior therapies and here we are also seeing robust clinical benefit rates.
We’ll be providing more data at the meeting itself and I think that when folks see the more full data set at the ASH Meeting, I think that folks will be impressed that 520 plus Velcade is also a very viable option moving forward and could be part of a registration path in the future.
So, essentially, we are seeing, if you estimate that patients who have seen Velcade before or seeing Velcade again would have a response rate not too different from patients who have seen a Kyprolis before. The types of responses we are seeing seem to show again an additive effect here, which can be very important. Ultimately, we’d like to see that translate into a substantial improvement in PFS.
I did mention AAG, a very important selection marker. We are providing updated data at the meeting, but what I’d say is that, we are showing, when you look at patients who are low to normal for AAG, this is a marker for inflammatory disease unrelated in our opinion and our view to multiple myeloma does not appear to be a prognostic factor.
But does bind very tightly to free 520 reducing the probability patients can benefit from the drug and as you can see in the low to normal AAG population, we are seeing response rates almost 25%.
Now, we have announced that while we do believe DEX may have modest benefit when combined with 520, it’s our sense that it’s not a dramatic effect as we’ve seen, for example, when Dexamethasone is combined with Pomalyst.
So, we don’t anticipate it being a key part of our future development plans. But, the data which we generated is important to look at and in that data set we did treat a number of patients who have treated with Kyprolis, Pomalyst or the oral Velcade MLN9708.
And we are pleased to see very robust response rates in populations, which you would not expect to have a substantial response to an agent, again, because of this agent is a novel mechanism not overlapping with PIs or IMiDs.
So, very excited by this data and by the use of a selection marker, which can be very important not just to physicians and patients, but of course also to payers and to regulators in terms of – in supporting the use of a new agent.
There are couple other supportive trials which we’ve announced as well. I’ll go through them quickly. First on the right, on Slide 11, we have already initiated, so this is running now, a randomized Phase II 75 patient trial, which essentially is going to have a similar design to our Phase III which should mid next year.
And the purpose for running this is multi-folds. One, very important purpose is to have a data to publish and we’d expect not ASH in a couple weeks, but ASH next year to be a good forum to show the results of this randomized data to support recruitment in our main study.
It also allows us to address some critical regulatory items, QTc, clin pharm and items like that support a filing. It allows us to validate AAG as a selection marker now in combination with the PI. We’ve up to now focused really more on the single-agent or the DEX setting.
And so as a result, we think this is important, lastly, it allows us to confirm what we believe to be very well-tolerated combination, but it does gives us an opportunity to confirm that the combination of Kyprolis and 520 before we launch into the larger Phase III.
Also, we plan to initiate, next year, a single-agent, single-arm study. This has some also important regulatory aspects to it. It does allow us to formally validate AAG as a companion diagnostic. It does potentially support a future labeling in the single-agent setting. It does allow us to generate some additional regulatory data to support regulatory obligations.
And if this data is remarkable, if it is very positive, we would talk to the FDA about a filing, if that was relevant. This trial design is quite similar to what Kyprolis ran to support its accelerated approval just a few months ago.
And so, now I’m going to move on to 614. Excited to present data at ASH on this program as well. Very substantial marketplace, Myelodysplastic Syndrome and we are actually focused on low-risk Int-1 patients who have failed HMA.
So on Slide 14, you see that the majority of patients, 75% of Myelodysplastic Syndrome patients are in fact low-risk Int-1 and after failing HMA there really is no therapeutic options.
So patients see massive blood transfusions and often succumb to the side-effects of those transfusions. So, this is our new formulation that we are studying now. But in the past, we have shown data with a prior formulation. We’ve gotten up to about 12 capsules hadn’t hit MTD and that’s why we reformulated and run a new trial.
But in the prior trial, I would point out that the most promising effects were seen in patients with thrombocytopenia and we saw a quite substantial conversion of patients who were platelet transfusion-dependent to independence, which is quite a high hurdle.
I also point that thrombocytopenia is the worst risk factor for MDS from a survival expectation point of view in the Dana Farber scale or prognostic scale for MDS. So quite important to control thrombocytopenia as a bad aspect of the disease to have.
Now we did see robust hematologic improvement across lineages, white blood cells, red blood cells as well. But this transfusion-independence profile was most pronounced. And in fact, in the data that is in the abstract and we’ll be providing more data at the Meeting, there is actually an oral presentation on it. We did reconfirm this very pronounced platelet effect.
In fact, in this study, patients who were platelet transfusion-dependent, 50% of them saw a reduction and a full third achieved transfusion-independence. And certainly we would not expect this to occur spontaneously and so as a result, we think this is important, as well.
We did see hematologic improvement across other lineages, but the conversion to transfusion-independence again appears to be focused on platelets very, very poor prognostic factor.
In fact, if you’ve got platelets and you are at the sort of the low end of the Dana Farber scale, your prognosis can be as poor as seven months. Typically, patients that we are studying have about a 12 to 15 month survival prognosis but with platelets that’s even more serious.
And so, we look forward to sharing more information about this and discussing appropriate path forward with regulators in the New Year to determine the best way to move forward. Transfusion-independence is a precedented hard sort of regulatory endpoint, maybe part of the path to market.
And so, as I mentioned, we will be talking to regulators and have more news next year, early next year.
Now, we’ve had a lot of progress on our two most advanced partnered programs. These are MEK inhibitors. One partners with AstraZeneca, the other with Novartis. As I mentioned, by the end of this year, we will have a full six pivotal trials, three each for these programs and so, in summary, starting with AstraZeneca, where we expect double-digit royalties assuming commercial success, now on Slide 19 and remaining milestones.
We have been recruiting or Astra has been recruiting thyroid cancers, it’s first-line thyroid cancer study with radioactive iodine. A few weeks ago, we saw the KRAS mutant non-small cell lung cancer Phase III initiated received a milestone for this.
This perhaps of all the studies the most commercially substantial 20% to 25% lung cancer, one of the largest tumor populations there are and now this happens to be second-line, but in a moment, I’ll let you know why we think Astra is quite focused on lung cancer in general and even first-line moving forward.
But this is a very substantial population with data expected in July of 2016. The latest news is Uveal Melanoma at ASCO a few months ago, we saw striking data greater than doubling, very powerfully statistically significant improvement in PFS.
This is a second trial and now for registration that has been announced by AstraZeneca will be starting in January and this is actually going to be randomized versus Dacarbazine. And so, we do think that this represents a very rapid path to market. Data in 2015, interested to see if that could be accelerated and we’d certainly look forward to seeing revenue from AZ in 2015.
We are quite confident, at this point, based on public announcements that with Novartis, and I am now moving to Slide 21. With Novartis, we do believe that the NRAS Mutant Melanoma study which has already kicked off earlier this year and expects data in October of 2014 could generate an approval and revenue to Array in 2015.
So, this is about 25% of melanoma, that’s NRAS Mutant Melanoma, 20% to 25% depending on the source. And, of course the results at ASCO were quite striking and this is a similar design. So we believe it could play an important role.
Now with Novartis royalties, we call them high double-digits, so, higher even than AstraZeneca. We do have co-development and co-commercialization rights as well. The largest commercial opportunity for – in the Novartis trials would be BRAF Mutant Melanoma.
This study has kicked off recently. A robust study, about 900 patients looking really to demonstrate that the Array Novartis MEK BRAF combo is best-in-class, great data at ASCO indicating not just about a 90% response rate, but also a very, very good tolerability with little to no fever, pyrexia or rash, which has plagued these types of approaches in the past.
Low-grade serious ovarian cancer, also an important commercial opportunity, has been enrolling now for several months, and we do anticipate regulatory filings for both BRAF and low-grade serious ovarian cancer in 2016. But as I mentioned earlier, potential for an NRAS approval in 2015 with the associated revenue. Now, there are about 18 trials ongoing and I am going to review some of the interesting trials at Novartis.
I will point out that AstraZeneca, it has about 45 trials underway over 30 in Phase II, a number as I was mentioning earlier in lung cancer focused on common first-line non-small cell lung cancer combinations GEM, CIS, CARBO PAC and Pemetrexed. But also not only looking at KRAS but unselected patients.
So, a clear focus at AZ on lung cancer and Novartis starting in NRAS and BRAF melanoma. And through these studies and now I am on Slide 22, a number of important target, target combos. So, you’ll see three different PI3K combinations, we look forward hopefully to seeing some data in ASCO from these trials, one is a PAN, one is a selective and one has some mTOR activity.
Recently they have started a CDK inhibitor combo with MEK 162 protein kinase C, two exciting mechanisms. And also very interestingly Panitumumab, a combination looking at colorectal and pancreas. So, of the tumor mutations that where MEK can play an important role and we’ve seen it consistently, it’s KRAS, NRAS, BRAF, GNAC.
We know that KRAS is very important in many pancreatic cancers and in colorectal tumors. Quite substantial percentages in this population. So looking forward to seeing some breakthrough in colorectal and pancreas, two very, very important commercial opportunities and diseases with high unmet need for patients.
So, just looking at the summary for Array and what can be expected looking forward. As I mentioned, we are enrolling our Phase II randomized trial with Kyprolis to inform and support the Phase III which is starting in next year. Also anticipate next year starting that single-agent, single arm trial and by ASH of next year, hope to have data – new data updated from the randomized Kyprolis combination.
We do expect also to show more data at the ASH Meeting in a couple weeks in Velcade. We did select Kyprolis to start for a number of reasons including the fact that it’s possible to enroll patients very quickly in Europe. And it’s one of the best ways to get Kyprolis through a clinical trial.
The PFS tends to be shorter for the patients we are studying. This would be Velcade failures and so we think this study will go quickly. But no reason to exclude a future Velcade registration path for 520, important, perhaps more for Europe and the U.S. We believe Kyprolis will dominate in the U.S. and Europe, Velcade, especially generic Velcade will continue to be important.
With 614, some more data at the ASH Meeting coming up oral presentation. MEK inhibitors, as I mentioned, six trials, the last one to begin dosing would be the Uveal Melanoma coming up around the corner.
And we are continuing to pursue potential partnerships in both Asthma and in Pain, talking to a number of the asthma – dominant asthma players in the world about our oral asthma product. The CRTh2 inhibitor could be the first new oral asthma medication in 15 years since Singular was introduced.
And so with that, we have a little bit of time for questions and so I will open up for questions at this point.
Right, and so, I think that, at this moment, one of the advantages of combing with Kyprolis in a registration trial is, any patients that we enroll in Europe will be quite motivated to join the trial, as it’s one of the only ways to get Kyprolis. And in fact, we are in discussions with Onyx.
Amgen about them potentially supporting a trial at least certainly helping us to import drug and then potentially even providing some drugs. The decision they’ll be making over time. The more patients we recruit in Europe, we believe the faster the trial will go, we also note that while there are a number of Velcade combination trials going on, many, there are a quite few actually in combination with Kyprolis.
It did get approved quite – in some people’s mind, but suddenly or earlier than expected, and as a result we are one of the first novel agents to be pursuing a registration path with Kyprolis. And so we also think that’s a sort of less crowded space. But, we do believe that ultimately Kyprolis will be approved in Europe and as a result, our study can support European approval.
But I did mention that we think that Kyprolis is really going to be more dominant in the U.S. and Velcade will continue to be important in Europe and ultimately, we would seek labeling in combination with Velcade at that time. The data that we are going to be sharing at ASH, I think supports that.
I think it’s going to be well received and it supports the hypothesis that we combine well with proteasome inhibitors in general, whether it’s Velcade or Kyprolis. And so, that’s an important point. I’ll add one more thing, just about future development opportunities.
At ASH, we are going to be presenting some animal data in combination with Pomalyst and IMiD. Strong rationale for combining 520 with IMiDs as well, just in terms of prioritizing we started with proteasome inhibitors where we could see IMiDs as an important part of the future regulatory path as well.
Right, good. So, the reference here is to the potential for doing an interim, during our Phase III with the endpoint of PFS, doing an interim on response rates. And so this is something actually that the FDA has encouraged us to do with the design.
I think they like, they always will prefer randomized data for accelerated approval versus single-arm single-agent, although many, many drugs do achieve accelerated approval through single-arm, single-agent trials. So the trade-off really is, the FDA is always going to want you to do an interim analysis as close to full enrollment as possible.
So this is why – that’s the trade-off. You can go earlier, but then, you are – you will raise some questions with the FDA and that’s the trade-off that you have to determine. There also is the question of statistical splitting you need to sign some alpha to your interim. And so, it’s another consideration.
So at this point, it looks like it’s a good idea and we’ll be part of the final program when we get closer to starting the Phase III we’ll provide an update number of patients, how we are going to handle that interim, if it’s in the program.
But, the idea is of course that, even if you were to wait for full enrollment or close to full enrollment, analyzing response rates comes much earlier than analyzing PFS and so, that time alone is saved and so then it allows you to do an accelerated approval.
And in terms of what is the hurdle. So, the good news is, this is a randomized trial and so, first hurdle would be a statistically significant result. And then when it gets to clinically meaningful results, all I’ll say is, we are going to be powering the study essentially to show clinically meaningful results in general.
That’s the sort of goal here. But with the statistically significant result and an improvement in ORR, we think that accelerated approval would be reasonable to expect. And there is no hard and fast rules, but with the statistically significant results you are at some pretty good (inaudible).
Right, so, the good news is it’s the majority of patients we believe will be eligible for Array 520. We believe in the data we’ve collected to-date that high AAG appears only about 20% to 25% of patients and we are looking to essentially exclude those patients from future trials.
Now, we have some pretty good evidence in single-agent and in combination with DEX that this hypothesis seems to hold well. We’ve never seen a response in patients with unusually high AAG. But we are looking forward to validating that AAG it’s also relevant when you combine with the PI.
First, we are going to be setting it with the Kyprolis combination in a randomized setting. And so, we look forward to be able to share that information potentially at ASH next year. But as I mentioned earlier, any selection tools are, in our view quite important to support pricing, reimbursement and uptake.
And just generally, you tend not to want to offer a drug to patients who are not likely to benefit they are better off taking other therapies. And so we think that it’s an important aspect to the program and are happy to be working with the FDA and CDRH and ultimately we work with European agencies as well to validate an AAG assay.
So the good news is, AAG assay is commercially available that used to sort of diagnose or to track the progression of inflammatory disease. And so we are actually going to be using a commercially available AAG test and simply validating it for use in multiple myeloma. So we are not needed to create a whole new technology just for this purpose.
So, it is not our primary endpoint. Our primary endpoint will be all commerce, but the key secondary endpoint will be AAG low patients. On the single-arm, single-agent trial, however it’s different and the single-arm single-agent primary endpoint will be low to normal AAG, and there the reason simply is that, in a single-arm, single-agent setting, you need to demonstrate the maximum effect possible.
So in the event that the results are exceptional, you may approach the FDA to look for an accelerated approval. We believe that biomarker helps us to achieve the highest numbers possible in an open-label setting. And so that is the study where AAG will be the primary, low to normal AAG will be the primary endpoint.
Although, even there we are recruiting all patients, and so we are using that study to show a difference between high AAG and low AAG, but the primary will be the low to normal, the 75% to 80% of patients most likely to benefit from the drug.
Right, okay, so maybe I should repeat the question. The question was, from a financial point of view, do we have sufficient resources to run these trials? So, pro forma as of our last earnings call which was, I guess, three or four weeks ago, we had about $131 million I think, those pro forma cash that we have taken in by that day.
And so, typically we have been recently burning about $55 million net and we would expect that kind of rates to continue. We’ve been running many multiple myeloma trials, MDS trials. We’ve wrapped up our Asthma program and so as a result, we don’t expect an acceleration of spending.
So the question is, how long do we have and a lot of this very, very dependent on our success partnering, our Asthma program Array 502. Array has had great legacy of great partnerships with great companies, but also that have been quite lucrative even pre-clinical in Phase I partnerships in the tens of millions of dollars upfront, hundreds of millions in milestones in double-digit royalties.
And so with a positive Phase II trial which is what we had with Array 502 in asthma, allergic asthma, with the biomarker showing important results in half of allergic asthma patients that are high for a marker which we have identified. We think this could be substantial in terms of generating upfront payments and that would change the picture in terms of cash going forward.
As I mentioned, we are talking to all of the significant asthma players. Although primary care is a challenging area for the pharmaceutical industry these days and so decisions perhaps are going to be taken more slowly in primary care than they would be in an high unmet need or orphan type world like cancer or other areas.
But, that is the swing in terms of cash and we remain confident that there is a great utility for Asthma program and hope certainly by the middle of next year to have visibility to what that is worth.
All right, well, I think with that, we are out of time. I thank you all very much.
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