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Clovis Oncology (NASDAQ:CLVS)

Q1 2014 Earnings Conference Call

May 08, 2014, 04:30 PM ET

Executives

Anna Sussman - Senior Director, Investor Relations

Patrick Mahaffy - President, Chief Executive Officer and Director

Erle Mast - Executive Vice President and Chief Financial Officer

Andrew Allen - Executive Vice President, Clinical and Pre-Clinical Development and Chief Medical Officer

Analysts

Marko Kozul - Leerink Partners

Cory Kasimov - JPMorgan

Brian Klein - Stifel

Koon Ching - Credit Suisse

Terence Flynn - Goldman Sachs

Peter Lawson - Mizuho Securities USA

Operator

Good day, ladies and gentlemen, and welcome to the first quarter 2014 Clovis Oncology Incorporated earnings conference call. My name is Kim, and I will be your operator for today. (Operator Instructions) I would now like to turn the conference over to your host for today Ms. Anna Sussman, Senior Director of Investor Relations. Please proceed.

Anna Sussman

Thank you, Kim. Good afternoon, everyone, and welcome to the Clovis Oncology first quarter 2014 conference call. You should have received the news release announcing our financial results. If not, it's available on our website at www.clovisoncology.com.

As a reminder, this conference call is being recorded and webcast. Remarks maybe accessed live on our website during the call and will be available in our archive for the next several weeks.

The agenda for today's call is as follows. Patrick Mahaffy, Clovis' President and CEO will discuss the highlights of the first quarter and provide an update on our clinical development program. Then, Erle Mast, Clovis' Chief Financial Officer will cover the financial results for the quarter in more detail and comment on the company's updated outlook for 2014. Patrick will make a few closing remarks, and then we'll open the call for Q&A.

Before we begin, please note that during today's conference call, we may make forward-looking statements within the meaning of the federal securities laws, including statements concerning our financial outlook and expected business plans. All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business. Forward-looking statements speak only as of the date on which they are made and Clovis undertakes no obligation to update or revise any forward-looking statements.

Now, I will turn the call over to Patrick Mahaffy.

Patrick Mahaffy

Thanks, Anna. Welcome, everybody. Thank you for joining us this afternoon. We look forward to providing updated data on each of compounds and development at ASCO at the end of this month, and continuing to advance our clinical development programs in the coming months.

In addition to the many studies we are currently enrolling, we will soon initiate two Phase 2 global TIGER studies for 1686 and EGFR-driven non-small cell lung cancer, a Phase 2 study of rucaparib in BRCA mutant pancreatic cancer and two Phase 2 studies of lucitanib in breast and squamous non-cell lung cancer.

Importantly, data from the ongoing Phase 2 expansion cohorts of 1686, together with data from TIGER2 are expected to service the basis for NDA submission to the FDA by mid-2015.

Let me start with 1686. In March we announced the most recent update of 1686 clinical data, which continues to demonstrate that 1686 is in fact a very active growth. Highlights of the data presented at ELCC include the following. A 64% objective response rate was achieved in evaluable T790M positive patients and 91% of evaluable T790M positive patients achieved disease control, defined by stable disease or a personal response.

Although, we have not yet achieved the median duration of progression-free survival or PFS in the T790M positive patients, we have observed a median PFS of greater than six months in the evaluable T790M positive patients. And the trend suggests it could be substantially longer than six months. We are particularly pleased to see this kind of durability in 1686.

One of the issues with oncogene-targeted therapies is that while initial response rates can be promising, they can also be relatively short-lived. Our data-to-date has demonstrated both a consistency of response and an impressive initial duration of clinical benefit.

1686 is also very well-tolerated. Only one of 62 patients treated with the therapeutic dose in the Phase 1, discontinued drug due to an adverse event. And we believe it is the only EGFR inhibitor to completely spare wild-type EGFR signaling and to shut down the mutant EGFR pathway active in tumor cells.

We and our investigators continue to believe that 1686 has the potential to be a very important drug. And we are determined to identify the best way to get this drug approved as rapidly as possible, and into the hands of physicians to treat the patients who may benefit.

Enrollment is underway for the Phase 2 expansion cohorts in patients with EGFR mutant non-small cell lung cancer, and we expect our two T790M positive cohorts together with data from TIGER2 to serve as the basis for an NDA submission by mid 2015.

These expansion cohorts will test the efficacy of 1686 in two patient subsets. The first, in approximately 150 to 200 patients who are T790M positive, directly after progression on their first and only TKI therapy, similar to our TIGER2 study design. And the second, in approximately 150 to 200 T790M positive later-line patients, after progression on their second or later TKI therapy or subsequent chemotherapy. Both cohorts are now exploring doses of 500 milligrams, 625 milligrams and 750 milligram BID.

Since we observed meaningful efficacy at each of these doses, we no longer intend to pursue the 1,000 milligram BID dose, as there was no evident increased in efficacy to offset the increased and dose-related toxicities. Given the pronounced efficacy of the drug and the potential for long-term administration, we're fortunate to have the luxury of testing multiple efficacious doses to ensure we choose the dose with the best balance of efficacy and tolerability.

As we have described, a dose-limiting toxicity of hyperglycemia has been observed in some patients. However, clinicians can easily screen for it and treat it with Metformin, a commonly prescribed single-agent oral therapy. As presented at ELCC, we also have seen rare occurrences of QTc prolongation in a small number of patients on study, which occurs as well with other TKIs, including many approved drugs.

With 1686, we see a clear relationship to dose, all cases were either transient or readily managed by dose reduction, and no clinical consequences have occurred. Given the profile of the drug emerging from this study, investigators are extremely enthusiastic about moving the 1686 program forward rapidly, and ensuring it can be approved and made available for the large number of patients for whom it may provide benefit.

With their support and active engagement, we are rapidly advancing the TIGER program. This includes three level registration studies for 1686, all in EGFR mutant non-small cell lung cancer. TIGER2 in T790M positive second-line patients directly after progression on their first only TKI therapy, for which we are currently opening sites.

In the June, July timeframe, we expect to initiate the Phase 2 portion of TIGER1, a randomized Phase 2/3 registration study versus erlotinib, in newly diagnosed EGFR-mutant patients. And TIGER3, a randomized comparative study versus chemotherapy in T790M positive second-line patients directly after progression on their first and only TKI therapy, which is expected to initiate during the second half of 2014. We intend to start each of these studies at a dose of 625 milligrams BID.

As I mentioned, the next presentation on 1686 data will be during the Lung Cancer Clinical Science Symposium in ASCO in late May. I expect I will see many of you there. Lastly, we initiated our Japanese Phase 1 study during the first quarter.

Let me turn to rucaparib. We are actively enrolling patients in two studies in the ARIEL program, including our registration focused Phase 3 study. ARIEL2 is our global Phase 2 single-arm, open-label study designed to identify molecular features that predict sensitivity to rucaparib using DNA sequencing to evaluate each patient's tumor.

This study assesses and correlates rucaparib efficacy with the genotype and phenotype of each patient's tumor. And these data will inform the final definition of homologous recombination deficiency for the ARIEL3 registration study.

To our knowledge, we are the only company seeking to prospectively demonstrate a PARP inhibitor's activity in a molecularly selected population beyond germline BRCA mutation. And if successful, we believe it will meaningfully differentiate rucaparib from its competitors.

ARIEL3 is our global randomized, double-blind Phase 3 registration study that compares the effective rucaparib versus placebo. This study will evaluate whether maintenance rucaparib therapy can extend the period of time for which disease is control after successful chemotherapy in platinum-sensitive ovarian cancer patient. The study will utilize pre-specified step-down efficacy analysis, first in BRCA, then in the broader HRD population as defined by the ARIEL2 study, then in all comers.

Later this quarter, we expect to initiate the Phase 2 study of pancreatic cancer patients with BRCA mutations. This study is based on the striking partial responses observed in two germline BRCA mutant pancreatic cancer patients treated with rucaparib. Each of them had failed traditional chemotherapy.

As you know, there is significant unmet medical need for the treatment of pancreatic cancer, so if successful there is potential from this study for an accelerated approval. An update on the Phase 1 solid tumor study of rucaparib will be presented at ASCO in late May.

And finally to lucitanib. Lucitanib is our oral potent inhibitor of the tyrosine kinase activity FGFR 1 and 2, VEGFR 1 through 3 and PDGFR alpha and beta. Lucitanib has demonstrated impressive response rates with manageable side effects in previous trials of heavily pre-treated patients.

We hold exclusive U.S. and Japanese rights and have a collaboration agreement with Servier, the holder of European and rest of world rights for the global clinical development of lucitanib. We are initially targeting solid tumors with FGFR pathway activation including breast and squamous non-small cell lung cancer. There were currently three Phase 2 monotheraphy trials of lucitanib planned or underway. And the two Clovis-sponsored trials are expected to begin during the second quarter.

These will include a Servier-sponsored European Phase 2 study in advanced breast cancer patients known as FINESSE, which began enrolling patients in late 2013. Our Clovis-sponsored U.S. Phase 2 study in treatment refractory FGFR1 or 11q-amplified patients with advanced breast cancer. And a Clovis-sponsored Global Phase 2 study in advance squamous lung cancer patients with FGFR1 amplification.

Data on lucitanib was presented in an oral presentation at ASCO in May. These data will be familiar to many of you, but we were pleased to receive an oral presentation for what will be for most U.S. physicians their first introduction to the drug.

Now, let me turn the call over to Erle to discuss the first quarter 2014 financial results and guidance.

Erle Mast

Thanks Pat, good afternoon everyone. We've reported a net loss for the first quarter of 2014 of $30.7 million or $0.91 per share. A net cash burn for the quarter was $19.6 million.

Now financial results for the quarter included a number of unusual, or at least infrequently occurring transactions, but coincidently the net effect of these items was not material to the overall financial results. But I wanted to review these transactions just to provide a little more clarity on our results.

During the quarter, we've recognized revenue for the first time in the company's history, pursuing to our collaboration of license agreement with Servier for lucitanib. We earned a $13.6 million milestone payment as a result of the expiration of the opposition period for a lucitanib European patent. Now the receipt of this milestone payment triggered the recognition of certain expenses for the quarter.

First of all, a portion of the milestone payments that we received from Servier are passed through to the original licensor of lucitanib and as such we recorded a $3.4 million charge for the milestone payment to the licensor in the first quarter. Second, the milestone payment resulted in the amortization of a portion of an intangible asset that we recorded in the fourth quarter of 2013 as part of the purchase accounting for the acquisition of EOS, and this created a non-cash charge for the quarter of $3.4 million.

And then, finally, a $2.1 million income tax provision was recorded in the first quarter, due primarily to projected taxable income that we will have in Italy for 2014, relating again to the receipt of this Servier milestone payment. And also note that the majority of this income tax expense is a non-cash charge.

And then the final transaction I would highlight for the first quarter is the $5 million milestone payment that we made to Celgene for the initiation of the first Phase 2 study for CO-1686. And this payment combined with the milestone payments for the lucitanib licensor, resulted in a charge of $8.4 million for acquired end-process research and development expense, which you'll see captioned on our income statement.

The company's net loss for the first quarter of 2013, totaled $15.7 million or $0.60 per share. Now, as I mentioned, the transaction that I have just highlighted, basically offset each other and did not have a material net impact on our net loss. So accordingly, the increase in the loss for the first quarter of 2014 as compared to 2013 is due primarily to expand development activity for CO-1686 and rucaparib programs.

Research and development expenses totaled $24.2 million for the first quarter of 2014, and this compares to $12.1 million for the first quarter of 2013. An increase in expense this year is due to the initiation of the ARIEL2 and ARIEL3 studies for rucaparib and increase in the number of patients enrolled in the Phase 1/2 study for CO-1686, the initiation of the TIGER2 and the Japanese Phase 1 study for CO-1686 and increased manufacturing of clinical drug supplies for both the 1686 and rucaparib programs.

As a reminder, the development expenses for lucitanib are currently being funded by Servier. So its addition to our portfolio had no impact on R&D expenses for the first quarter of this year.

General and administrative expenses totaled $5.3 million for the first quarter of this year and that compare to $3.2 million for the first quarter of 2013, and this increase is largely due to higher share-based compensation expense for employees and gain in general and administrative activities.

Total operating expenses for the quarter included non-cash charges of $9.3 million, and this relates to share-based compensation expense, amortization of the intangible assets, that I referred to earlier, and the accretion of contingent purchase consideration associated with our EOS acquisition.

As of March 31, the company had $303.7 million in cash and 33.9 million outstanding shares of common stock. We continue to expect cash burn for 2014 will total approximately $120 million and to end this year at approximately $200 million in cash.

Now, with that, I'll turn the call back over to Pat for some closing remarks, and then we'll open it up for Q&A.

Patrick Mahaffy

Thanks, Erle. Anticipated milestones for the remainder of the year. For 1686, we've initiated the expansion cohorts for the Phase 1/2 study, swiftly build a larger dataset for our T790M positive cohorts and expand them to include approximately 350 patients in two dose cohorts each.

These include approximately 150 to 200 T790M positive patients in dose cohorts directly after progression on first and only TKI therapy, and approximately 150 to 200 T790M positive later-line patients in dose cohorts after progression on their second or later TKI therapy or subsequent chemotherapy. I think that's two -- three dose cohorts.

In addition, we intend to initiate the first three studies in the TIGER program, all in non-small cell lung cancer, which include the following: the TIGER2 registration study in T790M positive patients directly after progression on first and only TKI therapy; the Phase 2 portion of the TIGER1 registration study in newly diagnosed EGFR mutant patient; and the randomized comparative TIGER3 registration study of 1686 versus chemo in T790M positive patients directly after progression on their first and only TKI.

Turning now to rucaparib. We'll continue enrollment of the ARIEL2 treatment study and ARIEL3 maintenance study in platinum-sensitive ovarian cancer patients with BRCA mutations and other DNA repair deficiencies. And during the second quarter, we intend to initiate the Phase 2 study of rucaparib in pancreatic cancer patients with BRCA mutations.

Finally, for lucitanib, during the second quarter we intend to initiate our Phase 2 studies of lucitanib in selected patients, in addition to the FINESSE breast cancer study currently underway by our partner, Servier. These include the U.S. Phase 2 study in patients with treatment refractory FGF-aberrant breast cancer and the global Phase 2 study in patients with metastatic squamous non-small cell lung cancer with FGFR1 amplification.

In summary, we expect to enroll more than a 1,000 patients in the Clovis-sponsored studies around the world in 2014, which is rapidly emerging as a very important year for us. We look forward to seeing many of you at ASCO, where I should note that we intend to host an Investor Analyst Event, late Saturday afternoon, May 31.

With that, thanks for joining us. We now open the call to Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Marko Kozul from Leerink Partners.

Marko Kozul - Leerink Partners

First question. Can you give us, Pat, maybe some color on how enrollment is proceeding for the additional patients in the Phase 2 of your expansion cohort?

Patrick Mahaffy

Without giving number, I'll just say that interest in the trial on the part of clinicians and physicians remain exceptionally high. As the sites open, we have waiting list to enroll into the trial that remain very large. And we anticipate that as more sites open into the expansion cohort and into TIGER2, the enrollment in these trials is going to go exceptionally fast. It is exactly on track with what we would have expected it to be.

Marko Kozul - Leerink Partners

And then because you're planning a 1686 filing based on TIGER2 and Phase 2 expansion cohort patients, can you give us a rough sense of what the mix of data might look like or what each trial experience might contribute to the filing?

Patrick Mahaffy

We're going to have a complete data set from each of the expansion cohorts and we will have new meaningful data from TIGER2 at the time we submit. It may be complete data. We do expect the expansion cohorts to fully enroll a little bit ahead of TIGER2 because they're underway now and TIGER2 hasn't started enrolling yet, it will shortly. We'll make that judgment at some level based on dialogue with FDA and based on all that we have in terms of data from the expansion cohorts themselves.

Marko Kozul - Leerink Partners

And I'll squeeze in a quick a QTc cardiac, two-part question. First, do you plan on excluding cardiac disease patients from any of your trials that you're about to start similar to another competitor? And second what do you estimate the proportion of patients that either in the frontline or relapsing scenario that have underlying cardiac or morbid disease?

Patrick Mahaffy

We have not and do not intent to exclude patients for cardiac disease. In fact, we have very limited excluding criteria in our trials, given the tolerability of the drug. Secondly, one can speculate on the number of patients with cardiac disease, in our trial experience, it's probably at least 10% to 15%. In a larger population, it would likely be somewhat higher.

Operator

Your next question comes from the line of [indiscernible].

Unidentified Analyst

My question mostly, I mean, all related to CO-1686. And first one I'd like you to kick in a question on those are non-responders, have you looked in out of those patients that don't respond? Do they have a new mutation or they just have mutations at different pathways?

Patrick Mahaffy

Andrew?

Andrew Allen

We don't have data yet to inform that question. One of the reasons for that is that even the patients who are responding typically are staying on drug, i.e. they have stable disease, and obviously in the context of progression, which is obviously what brings them into the trial in the first place, then stable disease is a good result. And so while stable, they also don't get on study biopsies. There is an optional biopsy at study exit, but typically few patients will take up that opportunity.

And so today, we just don't have information to inform your question. Now, obviously as the utility of plasma testing increases over time, it potentially will become a lot easier for us to start to get an insight into why patients may even not respond fully to drug or progress upon drug. So that's something we're optimistic about going forward. But today, we don't have the data.

Unidentified Analyst

And then the other question, maybe I missed it. I thought the FDA finding would be based on TIGER2 and the TIGER3 data. Now, it seems like mostly you are saying it's going to be based on TIGER2 and dose expansion study. Has that changed there or maybe I missed something?

Patrick Mahaffy

You're not entirely wrong. Things have accelerated here. And so we had intended for what was originally TIGER3 to be analogous to the expansion cohort in later-line patients. We and our regulatory team don't believe that an additional focused dedicated to Phase 2 trial on that population is necessary beyond what we will learn from and submit based on the expansion cohort in the later-line of patients.

So TIGER3 is now the confirmatory study for this accelerated approval path. And TIGER3 is a comparative study in second-line patients versus chemotherapy and the TIGER3 study will initiate in the second half of this year. It will ultimately be a part of a submission to FDA and other regulators, because it's our confirmatory study, but it will not be a part of our initial registration package.

Unidentified Analyst

And my last question about this a QTc prolongation. Can you help us understand, what is the requirement for a thorough QTc study for cancer drug or maybe just for TKI drugs with some QTc concern?

Patrick Mahaffy

I want to make sure I got that question correctly, so I wonder if you could ask it again.

Unidentified Analyst

I'm just wondering whether I think for a [ph] GP drug, I thought that the FDA probably requires a thorough QTc study. I'm just wondering whether it's for cancer drugs.

Patrick Mahaffy

So the question is do we need a thorough QTc study. We don't believe we do. And at some level the answer to QTc prolongation is now embedded in the data that we presented at ELLC. And obviously, we'll continue to present over the course of the development of the drug. So we do not believe that it dedicated QTc study is going to be required.

Funnily, that would have probably been more likely had we not seen QTc to sort of prove that it didn't exist. So our view is that a QTc study is not going to be required. You're right to differentiate. This is hardly a drug that it will be prescribed by general practitioners to an overall healthy population. This is a drug being prescribed, as other TKIs are with QTc, in very advanced cancer patients.

Unidentified Analyst

In light of the QTc, that Grade 3 study side, that do you plan to increase in QTc monitoring going forward?

Patrick Mahaffy

No.

Operator

Your next question comes from the line of Cory Kasimov with JPMorgan.

Cory Kasimov - JPMorgan

Two of them for you. So first of all, regarding the Phase 2 portion of the TIGER1 study in newly diagnosed patients, do you plan to provide regular updates on that part of the trial before it advances to Phase 3? I guess, what I'm asking is, when at the earliest, we may be able to see data in that setting?

Patrick Mahaffy

Andrew may add to this. Yes, we will provide updates at scientific meetings. It is open-label to us and therefore we re able to see the data and provide it to you. Given that, enrollment will begin, let's call it, June, July, I think that the most realistic scientific meeting at which you will see data is probably ASCO 2015. That feels realistic. It's possible that we might decide to participate again. And I think it's March again next year at ELCC. But you should not anticipate data from that study. It would just be too immature this year. So I would target ASCO 2015.

Cory Kasimov - JPMorgan

And then what are your thoughts about submitting for breakthrough status, especially now that AZD-9291 has it? And how much do you think that matters in the grand scheme of things?

Patrick Mahaffy

It's a very nice thing to have. It doesn't really change timelines in any meaningful way relative to the already expand, accelerated approval path, which have been very successfully and rapidly used by companies like Pfizer for crizotinib, et cetera prior to breakthrough. I think from all the dialogue we've had with companies that have it is that it allows for a very frequent interaction at a high level with the FDA. That is a real benefit. And we will like to have that benefit.

As I've said to everybody given our path, which is clear and our timelines, which are clear, the time at which we would really benefit from that breakthrough is sort of second half of this year. So we have targeted trying to get breakthrough status in the second half of this year. We definitely are going to ask for it at some point. We've always known that it would be better to ask for it when we have absolute confidence, we'll get it. So that's kind of what I would be pointing to, Cory.

Operator

Your next question comes from the line of Brian Klein from Stifel.

Brian Klein - Stifel

Regarding your upcoming presentation at the ASCO, can you give us a sense of how many patients worth of data we're going to get to see, and if your presentation will include any patients from the expansion cohorts?

Patrick Mahaffy

Our current thinking is that there will be an update of the Phase 1 experience. So I think you should assume that it will be an updated data set on 62 to 65 patients or so that are at the therapeutic dose in the Phase 1. This is all of the 900 milligram BID freebase patients and all doses of the HBR formulation.

Brian Klein - Stifel

And will that include also any expansion cohort patients?

Patrick Mahaffy

No. I don't believe so.

Brian Klein - Stifel

And then not to beat a dead horse on the QTc, but just wondering if that was related at all to dose, and if therefore you would not expect to see any QTc prolongation in the lower dosage you are testing?

Patrick Mahaffy

We wouldn't tell you that, we wouldn't expect to see it at lower doses, we did see some of that at lower doses and we've reported at ELCC. However, we do think it is clearly dose-related and the QTc prolongation is a more frequent occurrence as we get to higher doses. Andrew, anything you'd add to that?

Andrew Allen

No, that's accurate.

Operator

Your next question comes from the line of Ravi Mehrotra from Credit Suisse.

Koon Ching - Credit Suisse

This is actually Koon asking a question on behalf of Ravi. I just wanted to follow-up on the data requirements for the potential NDA filing in mid '15. When you say more meaningful data, could you provide a little bit more color? Are you referring to the fact that maybe patients from TIGER2 may not have reached the primary endpoint or is that you're waiting for more mature data on certain durability end points?

Patrick Mahaffy

It's along the lines, but we have a really good data set from these expansion cohorts and remembering that that's a large number of patients, so it meets any requirement FDA has about minimum exposures. And at the end of patients, that it's consistent with submissions by others who have successfully achieved recently accelerated approvals. We clearly will submit -- we will submit, as well, with whatever data, which maybe nearing maturity or not quite mature yet from the TIGER2 experience with the knowledge that FDA may request an update of those data over the course of their review.

Operator

Your next question comes from the line of Terence Flynn from Goldman Sachs.

Terence Flynn - Goldman Sachs

First, can you just tell us a little bit about the dose you're planning to use in TIGER1 and TIGER3? And if you haven't yet decided that, what information is going to drive that decision? And then just one more on dose, regarding the decision not to move forward with 1,000 milligrams, can you tell us specifically what new information drove that decision, because I think at ELCC you were guiding to going forward with 1,000?

Patrick Mahaffy

We were, as you know we are generating data at a pretty meaningful clip here, at multiple doses and one of the benefits of exploring these multiple doses is we're getting to see efficacy across dose levels. And we can clearly now can say that the toxicities that we see are dose related.

So in our effort to identify the balance of efficacy and our ability, we've been aided by being able to look at a larger data set than we had even at the time of ELCC. Now, what has emerged is, there's two things that are really important, one is that at each of the doses we're studying, 500, 625 and 750, we see clear and profound evidence of activity that is in general is pretty consistent.

In addition, we now can really clearly see that that QTc and hyperglycemia, the tolerability is dose related and those effects are dose related. So we haven't seen a benefit in terms of efficacy at 1,000 milligram BID relative to our other doses, but we know we're going to see increase toxicity.

So we don't get an advantage out of going higher and we get no disadvantage efficacy-wise going lower. And so it's clear why we would do this. We have chosen I think I'd said in the script, the dose for each of the TIGER2 -- and well, 1, 2 and 3 protocols in that 620 milligram BID.

Terence Flynn - Goldman Sachs

And then could I just ask one on rucaparib. I was wondering if you can just remind us of the design of the trial there and then what you guys think the bar is for an accelerated approval?

Patrick Mahaffy

For which study, Terence, you mean for pancreatic cancer?

Terence Flynn - Goldman Sachs

Pancreatic?

Patrick Mahaffy

Andrew?

Andrew Allen

So it's a single-arm study in patients who have progressed on approved chemotherapy. And the patients have evidence of a BRCA mutation, which can either be a germline or a somatic mutation. And as you probably know, more and more patients with pancreatic cancer are having their tumor sequenced now in the hope that they will find something actionable.

And it's possible that the somatic BRCA mutation, which appears to be reasonably common, so collectively about 10% of pancreatic ductal adenocarcinoma seems to have BRCA mutation, majority of that is somatic mutation, not germline. It's possible that those are the CR actionable mutations. And that's what we're exploring in our single-arm study. So there's a sort of running phase where we're treating around 20 patients looking for those necessary signals to give you confidence that their response rate is likely to be meaningful.

And then there is an adoptive design, where we are basically looking for increasing statistical certainty around a response rate that needs to be north of 20% for sure. Obviously, I think if it was at 20% there would be a discussion as to whether that was adequate. But bear in mind that even in the frontline response rate to cytotoxic chemotherapy in pancreatic cancer are in the 10% to 20% range.

So 20% as monotherapy to a well-tolerated oral agent in second-line may well be sufficient for an accelerated approval. There's no precedent here, so obviously we're speculating with these numbers. But I think 20% is a floor, if we're 30% or higher, I think it's believed to be likely that an accelerated approval would be highly viable, given the unmet need.

Now, as you know these patients unfortunately in the second-line have a terrible outcome with a median survival, that's just in a matter of a few months, typically three or four months. And most patients don't actually get second-line chemotherapy, because they are not sick enough.

So if we are able to see response rates in the order of magnitude, I would describe, with decent durability, meaning north of four or five months, then I think we are opportunistic that we've represent a meaningful advance for that group of patients.

Operator

Your next question comes from the line of Peter Lawson from Mizuho Securities USA.

Peter Lawson - Mizuho Securities USA

Patrick, this is sort of back to back CO-1686 and AZD-9291, what date are you going to be providing and what format, its response rates, safety profile, durability? What should we be expecting from you?

Patrick Mahaffy

I think you'll see an update that is consistent in format maybe not exactly the same, but consistent in format as we've now provided in Sydney, at the World Lung Meeting and at ELCC in Geneva, just a month or so ago. And you're right, it will be a pretty complete update now from the Phase 1 experience, with the focus on tolerability, of course, response at the therapeutic doses, as we described in Geneva, and what we see is a very exciting emerging evidence of durability first described at ELCC.

Peter Lawson - Mizuho Securities USA

And then the Astra data and the exclusion of cardiac patients, are you seeing anything in your data that suggest why they are doing that?

Patrick Mahaffy

We don't see anything in our data that suggest why they are doing that. And we haven't seen their data, which suggests why they might be doing that. So we don't really have -- we can only hypothesize. There is nothing in our data about our drugs that suggest we need to consider any type of exclusion criteria along those lines.

Peter Lawson - Mizuho Securities USA

But you're including cardiac patients and a general population with few cancer patients.

Patrick Mahaffy

We know we are. And we know we had included them. So, yes.

Peter Lawson - Mizuho Securities USA

And then I may have missed this on rucaparib. What did you say was the next updated data?

Peter Lawson - Mizuho Securities USA

The Phase 1 data will be presented at ASCO in a month I guess.

Operator

Your next question comes from the line of Yaron Weber from Citi.

Unidentified Analyst

This is actually [ph] Tannen in for Yuron. I have one quick question on QTc prolongation in 1686. Specifically, I was wondering if that data was corrected, and if so, if you could elaborate on the correction method that was used in? Then just a quick follow-up relating to whether or not 1686 hits the HERG channels or if you had any data surrounding that, if that is something you could share?

Patrick Mahaffy

Andrew?

Andrew Allen

1686 does not inhibit HERG channels meaningfully in the standard in vitro assays. And the correction method used routinely is Fridericia's correction factor. We've also done the calculations with Bazett and with linear aggression, sometimes called Framingham approach, and the results have been fairly similar between all three methods.

Anna Sussman

Thank you, everyone. That's about all we have time for today. And we'd like to thank you for your interest in Clovis Oncology. If you have any follow-up questions, please call me at 303-625-5022. This call can be accessed via replay of our webcast at clovisoncology.com, beginning in about an hour, and it will be available for 30 days. Thank you for interest and time. And have a good evening.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a great day.

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