ARIAD Pharmaceuticals Inc. (NASDAQ:ARIA)
Cowen and Company 34th Annual Health Care Conference Call
March 04, 2014 10:40 AM ET
Harvey Berger - Chairman and CEO
Phil Nadeau - Cowen and Company
Phil Nadeau - Cowen and Company
Good morning. And welcome once again to Cowen and Company’s 34th Annual Healthcare Conference. I am Phil Nadeau, a Biotech Analyst here at Cowen and it’s my pleasure to introduce the next presenting company, ARIAD. These are exciting times for ARIAD with Iclusig back in the U.S. market and AP26113 moving into a pivotal trial.
Really happy to have with us today Harvey Berger, the Chairman and CEO of ARIAD, he will give about half hour presentation in this room and then there is a breakout immediately following in the (inaudible) room which is here on the 4th floor just around the corner. Harvey?
Thanks so much Phil. I hope to be through this in less than a half hour so you will get some time for some questions here even. So let’s move forward. Thank you very much for the opportunity to be with you. I think back over many, many year’s history of Cowen Conference in Boston goes back about as far as any of the conferences in our industry. This and perhaps one other conference have really formed the foundation of the interface between investors and companies now over two decade. So again thank you very much for the opportunity to be here.
Let me just start with the forward-looking statement and remind everyone that I will be making forward-looking statements and I encourage everybody to look at our formal SEC filings and to be aware of the risks and uncertainties of the statements that I will be making.
So let’s now start with ARIAD 2014. First and foremost as I look at this year, it’s to create shareholder value. Rebuilding confidence in Iclusig and rebuilding the value of ARIAD are the two pillars of our business this year. In terms of rebuilding Iclusig and our confidence in it, we need to start with the importance of the resistance intolerant population of Philadelphia-positive leukemia.
As I will share with you, we had a strong re-launch ongoing in the U.S. We have pricing and reimbursement approvals and launch ongoing in Europe. Moving forward in Japan and in other markets lifting of clinical holds on a trial-by-trial basis will be ultimate goal of moving to the earlier lines of treatment moving to a substantial entry into the second line and ultimately to first line based upon strengthening the benefit risk of Iclusig and new clinical data that we’ll be generating and the medical community at large will be generating.
As well as we think about rebuilding the value of ARIAD at start with what I just described which is the benefit risk of Iclusig followed by ensuring that 113 is viewed with respect to its competitive advantages relative to other ALK inhibitors and we believe the data will support. And then we use that as our next step and our next product followed by another first-in-class TKI, which will come out of our discovery organization we expect later this year. So step by step building confidence in Iclusig and building value of ARIAD.
Now let’s focus the early part of this discussion in Iclusig. We have a rapid return of Iclusig to the market after six weeks of the market last year, we are back. The product is being commercialized as of mid January in the U.S. with the revise product label. The revise product label allows physicians appropriate discretion on the best use of Iclusig. It’s specific; it’s focused on those patients where there is a clear benefit risk for Iclusig.
It’s driven by updated safety data and we expect more safety data and updated insights to continue to be presented at major medical meetings as we learn more about how to optimize or maximize the benefit risk of Iclusig. We have in place the communication REMS, which is focused on providing information about optimal use of Iclusig, as well as safety data.
So we’re back to market and off to a strong launch. We see the U.S. commercial opportunity with the eligible patient population of about 1,300 new patients annually. We’ve put in place a streamline distribution process with the modest price premium to the second generation medicine to about $125,000 per year and as well a comprehensive patient assistance program with a very low co-pay of $10.
So early patient demand started with the single patient IND program and I think we should start by framing the re-launch in the context of the IND program that was put in place. So last October when we removed Iclusig from the market temporarily there were 640 commercial patients in the U.S. on Iclusig. 305 of those patients then went on to receive Iclusig to a single patient or emergency IND process, each one of which was approved by the FDA. Of those 305 patients 20% were patients in the second line, 40% in the fourth line and the remaining 40% more advanced. So the important message is that 60% of patients were second and third line patients in the Philadelphia-positive leukemia space.
60% of those patients were chronic phase that too is very important because the chronic phase patients are the ones that will be on Iclusig or any of their TKIs for a prolonged period of time. And only about a third of the patients had T315I mutation, the mutation that makes the patient particularly suitable for Iclusig because none of the other available TKIs have activity in patients who have T315I mutation.
So we expect up to about 230 of those patients or about 75% to transition to commercial supply during the first quarter. Another 5% to 10% of patients that will stay on Iclusig, but through our patient support program will receive free drug because they are indigent patients who can’t afford medicine that's no difference in the distribution we had last year.
That leaves about 15% to 20% of the total number of patients who will either progress or come off the drug. Most of those patients, not all, but most of those patients are those who have advanced forms of Philadelphia-positive leukemia either blast-phase or Philadelphia-positive ALL.
So very much in line with our projection towards the end of last year that most all of the patients who are on the single patient IND program will transition over two commercial drug.
We continue to make strong progress in Europe and in parallel with the progress now in the United States. The indication [stipend] in Europe has remained unchanged. We have a strong early launch in the major markets. We’re coming to market on a country-by-country basis and obtaining pricing and reimbursement as we would expect and I will talk more about that in a moment.
Ongoing as what’s called the Article 20 referral procedure which will culminate with a CHMP opinion in May a few months from now. This is aimed at a better understanding of the adverse events and potential dose modifications that might be made with Iclusig in Europe going forward.
So thus far we believe all the feedback we have all of our interaction with the CHMP have been very positive and we expect that the label will largely remain unchanged certainly we expect some update of the actual incidence of some of the adverse events because it will be a full label update but we expect that the label essentially will remain largely the same.
Our approach in Europe is to maximize the commercial opportunity. We have promotion ongoing today in Germany, the UK, France, Australia and the Netherlands commercial operations have been customized to the local needs in a given country. So we have put in place a focused specific commercial effort that’s defined by the market opportunity and the practice of hematology and oncology in each of those countries. So this results in a modest commercial footprint which is required to maximize the market potential. We are focused on 15 key European countries that create about 2,500 currently eligible patients in Europe. 15 key countries essentially are all the major markets in Europe and include everything other than Eastern and Central Europe. So it is a major market of Europe.
We are advancing pricing and reimbursement negotiations on a country by country basis in Europe. We have an extremely strong market access team based in our European headquarters in Lausanne and we expect resolution of pricing and reimbursement in several countries in the first half of this year, but in most of Europe in the second half of the year.
And we are working -- interacting with the pricing and reimbursement agencies in each of the countries. In some countries they are waiting for the CHMP decision through the Frac Committee which we expect in May that will better define the full scope of the label and we believe reaffirm the breadth of the label in Europe. We think that’s a real positive in terms of negotiating country by country with the agencies for reimbursement. So throughout this year, this will be a major part of our effort and we expect that by the end of 2014, we should have formal pricing in each of the European major markets.
So we are going to build with Iclusig on top of the Philadelphia-positive leukemias and our current understanding. And first we are going to focus on, how do we improve the benefit risk of Iclusig. Some might say well, how do you improve your change benefit risk, it’s by better understanding of the limiting adverse events which in this case of the vassal occlusive events that have been seen. We are going to achieve this through longer follow up, through an important pharmacovigilance program, so we understand the events as they occur in real world practice, better understanding of the biological and molecular basis of these events in comparisons with other TKIs in this field.
While also looking at interventions, are there ways to lower the event rates by simple things like Asprin, Statins, drugs that are commonly used to lower the risk profile for cardiovascular events. And perhaps most importantly, looking at the benefit of lower doses, the 45 milligram dose gives us a lot of room in terms of efficacy to be able to lower the dose and still achieve extremely high response rate. And in fact the data that we have at lower doses of 30 or 15 milligrams support that, but more data will be very helpful.
Now I’m going to move passed to Philadelphia-positive leukemias, to advancing the opportunity in GIST, GIST represents an important commercial and clinical opportunity for Iclusig, the annual U.S. incidence is about 4,500 patients. We know that KIT activation occurs in about 85% of these patients and Iclusig, much like what we know for BCR ABL has extremely high potency against KIT and the KIT resistance mutants. And about 50% of patients fail first line treatment imatinib. Imatinib has a progression free survival of about 2 years and that largely is limited by the evolution of resistance mutants. So we currently have ongoing a Phase 2 trial looking at GIST, at Iclusig in patients with resistance to refractory GIST those results I expect will be reported at ASCO this year.
Let me show perhaps one example of a case which I think says a lot about the potential of Iclusig in patients with GIST. GIST stands for gastrointestinal stromal tumor, it’s a type of sarcoma, but very different than the sort of classic sarcoma. And eventually as patients fail frontline therapy which is imatinib, patients metastasize to liver, peritoneum and other intra-abdominal and other organs. So, this is an example of a case, not from the clinical trial, but from a patient who was treated in Germany. Iclusig is available in Germany, a very well known just research group in Germany, knew the data on Iclusig, the pre-clinical data in [KP and KP] mutations and so, GI can get easy access to Iclusig, because it’s commercially available in Germany. I’m going prescribe it and I’m going to treat my patient who has failed four prior lines of therapy for chest.
So if I could just focus everyone’s attention on these three panels back in September 2013, patient showing large metastatic lesions in the liver, these are two CT scan slices through the mid abdomen and you can see in the lower slice, very large multiple lesions in the liver. The tumor progresses over the next two months as pazopanib is stopped and then the physician in November decided to start the patient on 30 milligrams a day of Iclusig. And as you can see, we’re starting with tumor progression. And then within one month, four weeks of Iclusig therapy, what we have here, although these lesions look more apparent, if you think about the way the CT scan represents those lesions, what we really have is a dramatic beneficial response, showing shrinkage of the individual lesions, but as well massive cystic necrosis. So think about this as the lesions essentially melting and thus becoming cysts as opposed to solid tumors. And so this is clear evidence of dramatic response in this individual patient to Iclusig within just one month of treatment at 30 milligrams a day. This patient continues on treatment as do several other patients in Germany in this just center, again with similar sorts of responses being seen. The results from the trial which is separate from this will be presented at ASCO in a number of months.
So now let’s look more broadly. We have a broad program ongoing evaluating Iclusig in many different diseases, both Philadelphia-positive leukemias, acute myeloid leukemia, particularly in FLT3 positive AML as well as in patients with non-small cell lung cancer with particular genetic mutations or genetic amplifications, either in FGFR or RET as well in medullary thyroid cancer and other potential targets such as endometrial cancer, cholangiocarcinoma further trials in acute myeloid leukemia in combination with other treatments, so a broad program around the world to study Iclusig but in each case being driven by understanding the molecular basis of those tumors and the targets that Iclusig potently inhibits.
So, let’s now move on from Iclusig to our next product in advanced development which is AP26113, our ALK inhibitor. We have shown at last year’s ASMO and talked about since then what we believe to be compelling data on 113 as an ALK inhibitor. We have demonstrated robust anti-tumor activity in patients with non-small cell lung cancer, post crizotinib as well as in patients who are TKI naïve. We have shown durable responses beginning at 90 milligrams a day and going up to as high as 300 milligrams daily. And importantly and this is essential, demonstrated very strong durable activity in patients with brain metastases.
We have studied the tolerability and safety of 113 extensively with evaluation in about a 116 patients up to 300 milligrams daily with minimal adverse events at 90 milligrams. We did observe at 180 milligrams, a transient pulmonary syndrome which obviously we want to eliminate. It was seen in some patients. What we’ve learned is that, if you start patients at 90 milligrams for a week and then raise their dose to 180 milligrams, the patients don’t have the pulmonary syndrome.
So, it appears that it’s at initial high exposure at 180 milligrams or higher that results in the pulmonary syndrome but if one exposes the patient first to a lower dose such as 90 milligrams and then moves up to 180 milligrams, that we don’t see that. And we now have 20 patients that have been in this trail studied starting at 90, moving to 180 and the pulmonary syndrome has not been seen.
So that has informed us on how to design the pivotal trail. And the trail should begin later this quarter. It will be a global trail of patients who are ALK positive non-small cell lung cancer including patients with brain metastasis. All patient will start off at 90 milligrams a day then be randomized at a week one-to-ones who either remain at 90 milligrams a day which is what’s shown down below or the dose will be increased to 180 milligrams a day. And so this trial will allow us to obtain safety and efficacy data in patients with and without brain metastasis at 90 milligrams and 90 going to a 180.
So two different dose levels and we expect both of those levels to be well tolerated and to be highly effective because we’ve seen a high level of response at both 90 and 180, but it will help us in really framing the optimal dose framing it in terms of safety and framing it in terms of efficacy.
And I think this is a lesson learned from our experiences with ponatinib or Iclusig that bringing more than one dose into advance clinical development is probably a good thing to be considering and this certainly we believe will allow us to have more information in a pivotal registration trial at two different dose levels.
We believe 113 then will move forward with enrollment starting later this quarter. Behind 113, comes our next internally discovered new cancer medicine, another tyrosine kinase inhibitor, I won’t be able to say too much about it yet, but rather to frame where we’re headed we’re very far along down the path to being in a position to nominate a clinical candidate later this year. We expect that this will be a best-in-class small molecule TKI for a challenging target, but one whose medical importance has been well defined. This addresses an unequivocal critical unmet medical need in patients with cancer. And it is a product of our highly successful and unique structure-based drug design in computation of chemistry expertise.
So next behind Iclusig and 113 will come another internally discovered tyrosine kinase inhibitor for a difficult-to-treat cancer or group of cancers that are genetically defined where I think this will be a first-in-class new agent for the treatment of these patients.
So our focus without question in 2014 going forward is building shareholder value, getting back to where we were and going further just continuing to discover new cancer medicines internally, to develop them on a global basis so that were in a position to bring these medicines to patients in need around the world and to deliver them commercially to patients at a minimum in the U.S. and Europe and with partners or ultimately ourselves in other regions.
But it’s an effort that is building on what I believe we do very well, which is the full spectrum of activities necessary to be a successful profitable oncology business discovering developing and delivering new cancer medicines to cancer patients. Thank you.
[No Q&A Session for this event]
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: firstname.lastname@example.org. Thank you!