Array BioPharma's CEO Presents at Piper Jaffray Healthcare Conference (Transcript)

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 |  About: Array BioPharma Inc. (ARRY)
by: SA Transcripts

Array BioPharma Inc. (NASDAQ:ARRY)

Piper Jaffray Healthcare Conference

December 03, 2013 03:30 PM ET

Executives

Ron Squarer - CEO

Analysts

Ted Tenthoff - Piper Jaffray

Ted Tenthoff - Piper Jaffray

Good afternoon everybody. We’re here with the next presenting company Array BioPharma and there are some handouts up here, if anyone wants to grab something for additional data. My name is -- and actually would you mind passing this around, please, here you go. So, before I begin, I am required to point out certain disclosures regarding the relationship between Array and Piper Jaffray which are located at the back of the room and at the registration desk. Array is a leading drug discovery company with exciting cancer pipeline. The company has partnered two different MEK series of drugs; first selumetnib with AstraZeneca and then MEK-162 with Novartis, both of which have begun multiple pivotal studies this year. Array has also has drug discovery partnerships Amgen, Celgene, Genentech, amongst others.

Now that said, Array is now primarily focused on its wholly owned hematologic oncology pipeline which includes ARRY-520 which will begin pivotal trials itself next year. And also a drug for Myelodysplastic Syndrome ARRY-614, with Phase II data sometime around the year end. And we look for a busy American Society of Hematology meeting this weekend down in New Orleans.

So here with us today is no longer the new CEO Ron Squarer, and I am happy to have Ron here with us. So I mentioned that just in the opening comments that you’ve got hematology coming up this weekend in New Orleans, what new data will we be getting on your KSP inhibitor ARRY-520 for the treatment of multiple myeloma?

Ron Squarer

First of all thank you for having us here, Ted; always a pleasure to come to this meeting, it’s a great group of investors and I just would say I am going to be making forward-looking statements that I would encourage everyone to take a look at our 10-K and our SEC filings for discussion of risk regarding our forecast. And regarding ASH which is right coming up in a few days, I am going to give sort of a preview of what one -- folks can expect there. But before I do that, I did want to just go up one level and just talk about some of the important catalyst we have going on and I am sure we are going to touch on them today.

You know for those who track Array, we do have currently 14 clinical stage programs; panel partnered with some great-great partnerships, partnered companies that we are very pleased with. And our two most advanced wholly-owned programs are in fact the Hem/Onc programs that we are going to discuss now; 520 for multiple myeloma and MDS for 614 with exciting data at ASH. But more importantly we’ve announced our intention to start a Phase III next year with ARRY-520 and this will be a first wholly-owned Phase III program.

You touched on the MEKs. We are very pleased by the end of this year we'll have a full six pivotal trials, dosing and by ASCO next year with about 20 trials that’s going on in Novartis combining MEK-162 with Novartis’ portfolio, and over 40 trials, if you can believe it at AstraZeneca over 30 are in Phase II with selumetnib our MEK partnered with AstraZeneca. We certainly expect to see some data at ASCO. And then in October we would expect Novartis to have data from the first pivotal trial in NRAS-mutant melanoma which we believe could drive an approval in 2015 with selumetnib coming soon after with the uveal melanoma indication.

And then the last sort of big catalyst for 2014, just a frame it is, we have an asthma program which we are seeking to partner, we certainly would like to get a good partner for that and be able to announce that sometime during next year as well. So lot of very exciting catalyst coming up in the near and long term, so let me answer your question about ASH.

We are pleased to have a oral both on myeloma program and on our MDS program, with myeloma specifically, we’re going to be showing or have published some abstracts already about a single-agent setting but also our combination work with Kyprolis and our combination work with Velcade. The great news is we’ve achieved full dose with both 520 and Velcade and Kyprolis in the separate trials.

It’s the maximum proposed dose essentially and the tolerability profile that we’ve seen over time is holding and that’s the data that's sort of informing us moving forward into a pivotal with Kyprolis next year. Now the abstracts contain most of the sort of the punch line for the studies, but I would say Velcade in particular, we’re going to have more data about the combination with Velcade at the meeting, just going to be able to go down little bit deeper especially into some -- particularly heavily pre-treated groups.

Ted Tenthoff - Piper Jaffray

And again you mentioned, based on this experience to date the Phase II data with dexamethasone, the Phase IB dose escalation, you’re going to start the Phase III next year, so walk us through, what that patient population is and what that trial design looks like.

Ron Squarer

So the Phase III is in fact expected to be Kyprolis plus minus 520 in a robust randomized setting. The patient population is going to be similar to the population that was recruited in the Kyprolis trial, so at least a couple of priors and we will be giving more detail as we get closer to launch some trials we posted on clinicaltrials.gov and some of the other dynamics that we're thinking about is that, that trial might have an interim read that will allow us to submit an accelerated approval, it'd be an interim ORR, now the FDA will always encourage companies to get as much of their enrollment done as possible before looking at data, that's always going to be their preference and so we would presumably be fairly well enrolled before looking at ORR, but it could save some time in terms of getting to market a little early while the PFS matures. There're a couple of supportive trials, one is in Phase II which is already open and recruiting that will inform the Phase III but it has some other important regulatory requirements that it will meet some QT, some PKPD, it will allow us to validate our selection marker AAG in this randomized setting in a combination which we haven't yet done, we've focused more on AG in a single agent setting so that's important to us.

It'll also give us another confirmation of the combinability with Kyprolis, we'll have that as we're starting the Phase III, later on it'll give us ORR and PF that we're able to publish and hopefully encourage a recruitment in the trial. One other trial that's going to support the plan is a single arm, single agent, very similar to the Kyprolis study that drove an approval, a provisional approval for Kyprolis in the not too distant past, and that trial is also going to hit some regulatory requirements, it’s going to validate AAG in at that single agent setting, we hope it could add to a regulatory filing and add single agent to a label in the future as well because we think the drug works great after proteasome inhibitors and IMiDs have failed but also in combination with them.

Ted Tenthoff - Piper Jaffray

So you've mentioned AAG as a biomarker and I think this is a very interesting finding then for alpha 1 acid glycoprotein if I am not mistaken, so tell us about what the role this plays in coming up with the data that you’ve generated on the interaction between this and 520 today and will this play a role in the pivotal study.

Ron Squarer

So great question, so first just to back up Acid 1 Alpha glycoprotein or AAG is a passive protein usually associated with inflammatory disease, we don't believe it's really related to myeloma but in our studies roughly 20-25% of patients had unusually high levels, it's a commercial test, it’s available out there and what we learned is that it binds very-very tightly with free 520, really kind of taking it out of plasma and hence reducing the likelihood that the patients can benefit. So there's a real biochemical effector, it doesn't interact similarly to any other myeloma drugs, so we think the properties are quite unique.

Now in a single agent setting we believe that it really improves by we saw no references in patients with high, higher than usual levels of AAG, all of our responders were in patients with low to normal AAG so we thinks it really enhances the effect size in terms of response rate and hence is important. Now we have a lot of evidence in single agent settings, it will be part of a single agent Phase II, in fact the primary end point is in low to normal AAG patients, although we are going to recruit all patients in order to demonstrate the difference between the two arms.

Now that single agent, we don't really have much information to date about whether AAG has the same benefit when you're combining a PI and 520 and that's part of the reason we're doing the Phase II, theoretically it should but until we actually demonstrate it we won't know for sure, so the Phase II will give us insight but in the Phase III we've chosen the primary endpoint actually as all patients not as AAG low to normal. So that we don’t take on that risk that if for some reason AAG doesn’t work out or if it's not validated or whatever we can still get approved in all patients, although the FDA will certainly have the benefit of seeing the low population when it comes to understanding the clinical benefit of the drug.

Ted Tenthoff - Piper Jaffray

And just coming at a higher level with sort of regulatory strategy, multiple intervention points here in for multiple myeloma patients, is the goal really to develop 520 as the drug of choice to partner with either PI or is it specifically going after Kyprolis. Obviously one of the side effects that we’ve seen is peripheral neuropathy which is higher with [indiscernible] we haven't seen this [indiscernible] yet, but what is the longer term plan, where do you see 520 fitting into the…

Ron Squarer

Right, great and at the most theoretical level, we've always had evidence that we should be beneficial when combined with either a PI or an IMiD and the data that we have shown and will show in greater detail, this in the next days at ASH would kind of point to the fact that either Kyprolis or Velcade are excellent choices to combine with. The beauty of 520 is there is little to no, non-hematologic toxicity and the primary effect of course is on hematopoietic cells but the good news is in all the studies we’ve run patients are very well managed on supported measures. And so essentially their main side effect is asymptomatic, they don’t feel it. So yes it would be great to be able to combine 520 with as many agents as possible. It has a very unique mechanism of action, nothing to do with the way PIs work, nothing to do with the way IMiDs work.

Now we’re starting with Kyprolis for a number of reasons but we were in a unique position running a Kyprolis combination right when Kyprolis got approved and it was somewhat argue kind of a positive surprise. We believe that that study gets us to market the fastest in that the population we’re studying is going to have shorter durations than a Valcade study would. Also, you can’t get Kyprolis easily in Europe so we’d be able to recruit very quickly there as well.

But that said, based on the data we’ll be able to show later this week or actually over the week-end, we would see Valcade as an important part of our lifecycle and ultimately based on now animal or as I say, preclinical data which we’re going to present at the meeting at ASH showing a synergistic effect between 520 and [indiscernible] we could also see IMiDs as part of the future. So, we’re most excited that we have robust single-agent activity because you know your drug works. But then the question -- and that’s great and patients who have no other choice who feel pretty much everything they can use 520 but ultimately you’d like to use it further upstream to enhance the effect of other agents; PIs ultimately IMiDs and that’s the longer term strategy for the drug.

Ted Tenthoff - Piper Jaffray

Thank you for that. Now, 520 remains wholly owned. What are your partnering plans for this drug, U.S. regionally, globally actually kind of think about that going forward?

Ron Squarer

So, at this time we don’t have any specific plans to partner. We are always talking to companies that have taken an interest in the program. There could be benefits to partnering; it could allow us to do more pivotal trials, more registration trials in parallel than we may be able to do on our own. But it would have to be a significant value enhancer to Array in order to justify that. Because as is really is the focus of our Company we do believe we can get all the way to market and actually even market the drug in U.S. and Europe, Asia, we would expect to partner but in U.S. and Europe we could. So we’re not close to partnering. It could have benefits but currently we don’t have specific plans to do so.

Ted Tenthoff - Piper Jaffray

I appreciate that especially when you consider the second HemOnc compound 614, which is p38 type-2 enabler. And you showed data I think maybe two years ago at ASH and have been running a Phase II trial, a reformulated drug but it’s [connect] on a little bit radio sound. So tell us what’s the most recent day when we should expect to have?

Ron Squarer

Yes, so the issue with our initial formulation was that we had hit about 12 capsules and we hadn’t seen much toxicity so we weren't anywhere near MTD. We reformulated and that’s what we’ve been doing basically over the last year is running our new formulation it’s about two to three times more bioavailable. We did finally get to MTD, we’ve backed off because we don’t -- we want this to be a chronic well tolerated drug. And what I can say based on just the abstract alone and as I said there would be an oral at the meeting where we’ll be able to share more information, we have a very pronounced effect in specifically the worst prognostic factor for low risk and on MDS and that is being transfusion dependent for platelets, that puts you, that pegs you to the bad end of the prognosis scale. And in both formulations we’ve seen a very pronounced response rates taking patients that were transfusion dependent and making them independent.

We know this is from talking to the FDA in the past a reasonable endpoint to go for approval. Now, we also know that we affect positively red blood cells and white blood cells but we haven’t seen the same transfusion dependence independence that would be a hard regulatory endpoint that doesn’t mean we don’t have a benefit doesn’t mean it's going to help patients ultimately maybe survive longer but the hard endpoint appears to in platelets. And so our plan as our data matures is we’ve just recruited last few patients recently is to go to regulators and talk to them of a specific pathogen market probably focused on platelets and then overtime of course we can explore the broader utility of the drug.

It’s a quieter disease certainly the myeloma unfortunately for patients not a lot of research going on not even development stage and certainly not a lot of treatment option specifically for low risk in one disease. So we think the opportunity is still there and will be there as we move forward.

Ted Tenthoff - Piper Jaffray

Great. Are there any questions from the audience? Chris, please.

Question-and-Answer Session

Unidentified Analyst

[Question Inaudible].

Ron Squarer

So when you say Phase II to Phase III you’re talking about the randomized Kyprolis Phase II. So as I mentioned there is a lot of benefits that we get out of that Phase II, 75 patient randomized Phase II trial that we’re already recruiting into. One of them is to validate the tolerability that we’ve seen historically when we’ve combined with Kyprolis. And in a way while it’s not specifically gating that’s what we'll see first, it does patients you see how they are doing.

Over time as I mentioned we're going to see ORR and PFS out of that trial but those we're not going to wait for those in order to start the Phase III, kind of a confirmation of tolerability and then off we go. And essentially we need a little bit of time to get our actual protocol, finalize with the FDA. And so we don't expect that study to be actually limiting anyway, but will be valuable. Especially when we publish and presumably generate a little enthusiasm from having the randomized data in that setting to help people -- encourage people to join the Phase III.

Unidentified Analyst

[Question Inaudible].

Ron Squarer

The Phase II is open label, which is why we'll be able to before we're ready to pull the trigger on the Phase III be able to benefit from understanding how the tolerability was and to ensure there is nothing funny going on.

It's not really a registration trial, we would publish it but it's not going to be used for registration although it can support the package with some PK and some safety data, so not as concerned about having to file that study on its own.

Ted Tenthoff - Piper Jaffray

So switching gears to the MEK inhibitors, now this is something that this year we've really tried to focus investors on, because I think it provides a really good foundation or valuation for if you will for the company and I will kind of go in reverse order here, you partnered MEK 162 second with Novartis and retain better economics here. As you mentioned, they have started studies and in NRAS melanoma very interesting activity, and also a combo with LGX818 which is their BRAF inhibitor. So walk us through those two melanoma studies.

Ron Squarer

So Novartis is a great partner, it is a very attractive deal for Array although the economics with AZ are also certainly attractive double digit assuming commercial success. What's most exciting about the Novartis collaboration is the speed which they have, I mean they got their drug much later and they are essentially neck-and-neck. But they are going to have the first approval in our estimation. Who knows what can come up but essentially what they have been consistent about their expectation of having the NRAS Mutant Melanoma data in October, they would file that with accelerated review we'd expect revenue in 2015. So NRAS is about 20% of melanoma. It's really about getting to market quickly although it's a terrible prognosis and the data they have shown at ASH -- I am sorry ASCO in the past suggest the patients will really benefit.

The next more larger commercial opportunity would be the BRAF study, and Novartis is quite committed to this. They are doing a 900 patient trial. They believe I think as is supported by their action and investment that they have got the best in class combination. The Raf inhibitor, LGX818 plus MEK 162 they believe is going to win in BRAF Melanoma. And the results are pretty impressive and what I mean at ASCO you saw response rates close to 90%, which is pretty unusual in the treatment of cancer. And what's really interesting about the Array Novartis MEK/Raf combo granted early data small numbers is the tolerability is improved when you combine these two drugs.

And so we’re not seeing much or any of the fever, pyrexia or rash that has kind of plagued this space. And so far it's lining up to be a very important addition to the [indiscernible] in BRAF Melanoma which is 40% of melanoma and we think it's going to have an important role to play over time.

The last indication with Novartis because we have a co-development, actually we’re running the trial it's low grade series ovarian, because we've caped in our contribution to pre-reasonable level essentially Novartis is paying for the trial, but it gives us more experience and we're running this trial both in the U.S. and Europe and expect the data in 2016 or finally in 2016 with that. So what's what we have got so far?

Again I am looking forward to seeing data out of their three different -- there are three from PI3Ks that they are combining, one with mTOR activity, one PAN and one Selective, the CDK, the Panitumumab trial, the protein kinase C. They are doing very exciting with their portfolio plus MEK 162 that I hope over time will lead to other indications maybe even pancreatic and colorectal where we know KRAS has a very, very dominant role in a large percentage of those patients. So keep stay tuned there.

Ted Tenthoff - Piper Jaffray

Well picking up with the KRAS comment, Astra was really the first to generate that data and they have actually started now their first Phase III, the Select 1 study and this is clearly blockbuster potential. They are also doing pivotal study in thyroid cancer which was a very interesting finding. So tell us a little about these Phase III studies and kind of how the Astra deal differs from Novartis.

Ron Squarer

Yes, so as I said attractive deal, double digit royalty assuming success, the only real difference is it’s more arms-length in that it's a straight license, we don't have co-commercialization or co-development like we do with Novartis. But AZ especially with Pascal's arrival on the scene of lifelong oncology executive has really, really been focused on selumetinib. And some would suggest that AZ is quite anxious for revenue, they see a drug that have legs and I think they are putting a lot behind it.

They will get to market first in our estimation with metastatic [indiscernible] that trial is going to start soon. I think their official statements indicate a filing in 2015 but the huge commercial opportunity and opportunity for improving patient life is in KRAS mutant non-small cell lung cancer. This is about 25% of lung cancer, very poor prognosis and the results they’ve shown in the past at ASCO inspired them to run this robust Phase II program with PFS actually as the end point and with the same endpoint they showed at ASCO in [much, much small] I think about 80 patients at ASCO and still very impress result.

So, there is more I think to the lung story in that if you look at what’s going on with Panitumumab at AZ you’ll see multiple studies that are looking at first-line combinations, CARBO PAC, GEM, CIS, Pemetrexed and not only in KRAS but in unselected patients and I think that AZ is looking to pursue not just this pivotal and phase, second-line KRAS lung but potentially move upstream.

The last study thyroid, very I interesting based on striking data that was presented at ASCO, they’ve gone first-line combination with radioactive iodine and expect to have date and results from that study in 2016 but the results with, it was actually re-sensitizing patient to reactive iodine in second-line were pretty striking and they’ve gone first line which I think will give even better durability going forward.

Ted Tenthoff - Piper Jaffray

And that’s a disease area they know. I’m going to ask just a quick balance sheet question, fiscal 1Q which is a September quarter with a 124 million in cash and earlier I guess in summer you invested $132 million, 3% or convert with a 3% coupon basically in order to retire the [indiscernible] debt. So, tell us kind of what this balance sheet does for you and how far will that cash get you?

Ron Squarer

Yes, certainly an important topic. So, pro forma on the day we announced just based on a check in the bank account, we had about a 131 million and our burn has been roughly 55 net of the milestones and revenue from partnerships that we expect on an ongoing basis, we've been pretty consistent over time and some people say it isn’t going to go up but in reality, we’ve been running a lot of trials over time, we had asthma program, we’ve been running 520 and 614 trials steadily throughout.

So, we think it’s a decent estimation, a burn if we need to update it when we announced the Phase III design specifically, we’ll do so. the big swing for us is asthma, what will we get, when and will we partner this important asset could be the first new oral medication in asthma in 15 years, very exciting but as we know primary care is a tough business these days and Pharma is always questioned whether they’re in or out and so the decision cycle is -- can take a long time but as I mentioned when I opened, we have a lot of potentially transforming events coming up at ASH now then ASCO the data from NRAS coming up and then even ASH next year when we will hopefully be able to update new data on 520. So, beyond just the asthma program being partnered there is lot of value drivers that could make Array look quite different a year from now than today.

Ted Tenthoff - Piper Jaffray

I appreciate you being here today. Look for [indiscernible] this weekend down in New Orleans. And thank you very much everyone for joining us for the Array presentation.

Ron Squarer

Thank you Ted.

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