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Array Biopharma Inc (NASDAQ:ARRY)

Bank of America Merrill Lynch Health Care Conference

May 13, 2014 03:00 PM ET

Executives

Ron Squarer - CEO

Analysts

Steve Byrne - Bank of America Merrill Lynch

Steve Byrne - Bank of America Merrill Lynch

We are in couple of biotech stocks at BOA Merrill. It’s my pleasure to introduce Ron Squarer of Array. Ron has had a long career. He was with SmithKline Beecham, Hospira prior to his tenure at Array, he has been at the helm at Array for the last couple of years. So, we look forward to your update, Ron. Thank you.

Ron Squarer

Great, well thank you very much Steve and welcome everyone. And we are about 25 days away from ASCO abstract publication, so certainly we focus today on our MEK franchise where that is most relevant. And just before I get started, I am going to be making forward looking statements today that involve risk and for a full discussion of risk associated with this forecast please see our latest 10K and other SEC filings.

So, as I mentioned with abstract titles are out, the actual abstracts coming out tomorrow I believe and then the meeting is in the couple of weeks. We are certainly focused on progress on our MEK portfolio and there’s also been, as I am sure many of you are aware, quite a bit of activity with our partners both AstraZeneca and Nouveau. What I can, what’s important to note is we do have three typical trials underway a 17 company sponsored trial and the number of other investigated sponsored trials with that program and Novartis did announce very recently definitive agreement to acquire the GSK oncology portfolio which includes another MEK inhibitor Mekinist. So, we will talk about that a bit today.

They did reaffirm in their public statements that in fact they do have an anticipated filing in 2015 for NRAS melanoma, so we are very excited by that. With filanesib, which is our wholly-owned multiple myeloma program, we are planning for Phase 3 start running a Phase 2, which will help to inform that study and that study is ongoing now. And we recently initiated a single agent study which I will discuss briefly. We also received, just in the last few days, orphan designation for filanesib and there are a number of other important catalysts that are coming up in the near term, certainly regarding our AstraZeneca partnered MEK inhibitor. The company AstraZeneca did for the first time announced a regulatory filing timeline as 2015 that would be related to uveal melanoma but a lot of other exciting advancements there.

Beyond MEK and filanesib, other exciting opportunities which have near term catalyst include where cardiovascular disease, LMNA-related dilated cardiomyopathy program with 797 which we hope to provide data on this year as well as our wholly-owned MDS program, highly selective oral HER2, which is currently partnered with Oncothyreon that is running multiple proof of concept trial. And we recently formed a company called Loxo Oncology with a panTRK which has actually just entered the clinic just a few short months after we have created the company together with a number of investors.

So something and perhaps to the potentially catalytic item at Array that would be binimetinib or MEK162 and Novartis. So, first and foremost what was important for us was a commitment from Novartis that its business as usual. The ongoing trials including the three pivotal trials remain their focus despite the fact that they may be taking on through GSK another MEK inhibitor.

And so we did put out a press release approved by Novartis and this is essentially a summary of that. And what’s important is in the event that Novartis was to return binimetinib to Array, it would come with trailing support for ongoing studies which is specified in our current agreement and pleased to know that the three Phase 3 trials continue to enroll and that’s really essentially the most important issue for us at the moment. They did state and we are pleased that they publicly reaffirmed that NRAS mutant melanoma represents the first potential filing and that would be in, according to their estimates in 2015. Other exciting news would be Pfizer and so as many of you know Pfizer has made some advances on AstraZeneca and we will see how that goes.

What’s important to note is that while Novartis does not have the right to sign onwards the rights to binimetinib in the case where they are acquiring Glaxo’s oncology programs, AstraZeneca definitely does. So, if they are acquired by Pfizer, the rights and obligations to selumetinib can transfer onto Pfizer and Steve mentioned a little bit of my background. I did spend a number of years actually at Pfizer in the oncology therapeutic area with the leadership role there when we acquired Pharmacia’s oncology portfolio. So, while I have no idea if the AstraZeneca-Pfizer deal would go through ultimately having spent a number of years at Pfizer in oncology and knowing how well they can do these transitions, I think would be in good hands in any case. And what’s most important is some very important pivotal trials are already underway that I think inform the value of selumetinib. So, not a lot of change expected with that profile.

So as I mentioned ASCO coming up tomorrow of note with Binimetinib, since with three pivotal programs one in NRAS melanoma, one in BRAF melanoma and one in ovarian we are excited to see new data emerge in a combination study with LEE011 in NRAS melanoma. This study title implies encouraging clinical activity we’re looking forward to seeing that and discussing it with investors in the future could represent life cycle opportunities for Binimetinib, whosever’s hands the product is. Also a PI3K combination study, looking forward to seeing that as I mentioned we have a program in ovarian and I believe there are some ovarian patients studied in there. And so we’ll take a look to see if there is some life cycle opportunity in ovarian as well.

Moving onto Selumetinib, an interesting soft tissue sarcoma results that we’ll be looking at, and I think a new data on NF1 or neurofibromatosis some data was revealed that a small specialty conference last year but this appears to be a more robust indication of the drug utility in this really lifelong debilitating and disfiguring condition, so looking forward to the results. And hearing AstraZeneca how they might make the drug available in that population, so some interesting data to look for at ASCO.

Now regarding Binimetinib what’s important here as I mentioned is that the three clinical trials are running and that we expect still a filing for NRAS in 2015. I will note that the third pivotal milo, that’s being run by Array in the U.S., Europe, Australia and Canada it’s part of our co-development agreement and our contribution to the co-development is capped at reasonable level so it’s not a large expense to us but our physical personnel are involved in that study which is encouraging in the case that the drug might be returned to Array that wouldn’t be a problem there.

Also of note, many, as I said, important combination trials underway that, in our view, would inform lifecycle opportunities for the drug well into the future. We continue to be interested in large populations life colorectal very pleased that there is a study underway with Binimetinib and panitumumab that’s company-sponsored trial, we know there is also a full fox trial out there. It’s one of the large KRAS driven populations that yet hasn’t been cracked by MEK inhibitor so we’ll look forward to data as it emerges.

And switching to selumetinib, AstraZeneca; just the news that AZ has confirmed a regulatory filing expectation with uveal 2015 that study is open and enrolling and so we feel they have a good sense now. But also as we look to the largest opportunity across the MEK franchise which is KRAS Mutant non-small cell lung cancer which is the pivotal phase 3 that’s already running of KRAS representing about 20% to 25% of non-small cell lung cancer.

We’re very pleased to hear from AZ publicly that they have they are calling a investment decision this year in starting a first line KRAS Mutant non-small cell lung cancer program. So this would have been informed by combination trials that they’ve been running in their details here with other prominent first line agents like gemcit, carbopac and pemetrexed, so presumably one of these studies would inform that phase 3 and we’re looking forward to that actually starting. But there is a lot of work going on with Selumetinib 52 trials in total, 32 phase 2s. And so we think the drug is in excellent hands with AstraZeneca, especially since Pascal Soriot has joined the company, an oncology veteran and we would be very pleased if it remained in AstraZeneca’s hands but as I mentioned Pfizer would be a great home for the program as well in it’s -- well on its way to being filed and commercialized in the near term.

Regarding our wholly owned multiple myeloma program, it is a unique mechanism different from iMiDs and proteasome inhibitors we believe that the single agent activity we’ve seen given that there is not an overlap in mechanism with iMiDs and proteasome inhibitor should be potentially additive when combined with them. And while we are very excited have single agent activity not all cancer drugs do, we’re most interested in our ability to combine and add value with as a proteasome inhibitor enhancer.

We have talked in the past about our selection tool or Marker AAG and in our studies we continue to fully understand its potential to select most likely about 70% of patients who are more likely to benefit from filanesib, we think Selection Marker is important to patients, physicians and potentially payers. But the data we put out at ASH few months ago is probably perhaps the most important showing our benefit in combining with both Kyprolis and in a separate study with Velcade and heavily refractory patients specifically with Kyprolis in patients that were 100% Velcade refractor and tolerant and 80% Rev refactoring tolerant and a full 30% having actually seen prior filanesib or Kyprolis a 37% response rate much higher than you would expect from Kyprolis alone.

Looking at Velcade here, a 100% pretreated with Velcade and Rev and full 42% formally Velcade refractory, and 70% nearly Rev refractory. Here we saw a 42% response rate higher than you’d expect with Velcade alone. But specifically in these formerly Velcade refractory patients of 30% response rate which you would speculate as perhaps even double, what you might expect with Velcade alone in patients that had been receiving Velcade. So, encouraging results that have inspired our program, it’s in combining with Kyprolis. Why Kyprolis, few reasons, one later stage patients sort of PSS faster smaller trial, the unique opportunity to recruit patients in Europe where Kyprolis is not yet available except for on clinical trial. And frankly, a much less crowded space; and I will show that in a second.

So our phase 2, sort of the mini version of the phase 3 has been running since last year, 75 patient, 2:1 randomization, confirming the combinability of Kyprolis and filanesib which we will then used to initiate the phase 3 which is planned for 2014, and we’re not necessarily going to be waiting for efficacy results, although we will publish those over time looking really initially at combinability. We have, as I mentioned recently, initiated our phase 2 single-agent trial, looking with primary endpoint of response rate specifically in patients with low AAG. But we are actually putting all patients, so we will have the full dataset. We are not selecting for AAG patients.

And with that study, if successful, that could support labeling and ultimately use in single-agent, in combination with other trials. So in terms of the landscape, there is a lot of potential based on our data with Velcade, and we are considering how that would fit in with our life cycle plan. But right now, having had the opportunity to combine with Kyprolis early, we’re excited to be in a relatively uncrowded space combining with Kyprolis in a pivotal with the only novel agent to do so right now, but we would have potential to look at both Velcade in the future and even in that we do present data as showing a powerful synergy with Parmalat (ph) in animal setting, of course that we need to be confirmed and explored in the clinical setting as well. So we think we picked a good space to combine and reach the market initially with Kyprolis.

So, I mentioned that beyond the MEK franchise which is shaping up nicely and could in one of our -- MEK could at least theoretically come back to us in a not too distant future. There are other exciting catalysts this year. We are testing ARRY-797 LMNA-related dilated cardiomyopathy. It’s a tough disease where by age 45, we would expect roughly 70% of patients to have died, had a major cardiovascular event or have had transplant; a very severe condition. Currently, no reason to know, you have the LMNA mutation because it wouldn’t affect treatment. But there are about 1000 patients we expect out there. They have tested themselves for this mutation. We believe there is probably a 6000 to 8000 in the U.S. that actually have the mutation. And if there is a reason to know you have it, we think that testing will be more routine.

This is a very different approach for p38 than how p38s have been tested in the past. This is not an inflammatory pathway. It is an apoptotic survival pathway. We believe activation of p38 does in fact effect lamin protein and the effected lamin proteins ultimately yield reduced cardiac function as well as remodeling, and by blocking this pathway, we believe we will see return to a more normal function or the potential for return to more normal function by blocking the p38, animal data supporting this in a single patient IND in which we saw results that encouraged us to go forward into the study that we are running now. 12 patients, two doses being run at great sites, like Brigham and Women's and John Hopkins and two doses; patients on the lower dose who don’t respond will have the opportunity to take the higher dose. And we think this could be a powerful proof of concept in this very difficult disease. Primary endpoint is changed in six minute walk or sort of standard for ultra-orphan, it’s a functional result that’s quite standard for ultra-orphan consideration with regulators, that we will be looking at a number of secondary endpoints as well.

And so, to review the catalysts that I talked to you about today, which we think are quite exciting and we will be revealing ourselves in the relatively near future. We’ve got Binimetinib looking forward to having clarity as to where Binimetinib ends up. But, as I mentioned the most important thing is that the ongoing trials are continuing and the drug is being affected by a potential transition. And if the drug is returned to us, and it is important to emphasize that it would come with the trailing and support as defined in our current agreement. And so we really do look forward for providing more clarity on this, but understand that the process will take some time as GHK and Novartis work through their agreement.

I would go to filanesib, working towards that Phase 3 start continuing to let data in the Phase 2 launch of a Phase 1 and we’ll be looking at ASH at the end of the year an opportunity to sharing update around progress potentially sharing data from the ongoing Phase 2 which is as I mentioned a mini version of the Phase 3. Selumetinib again very pleased not just with the progress in such an important indication as KRAS non-small cell lung cancer in second line but the fact that there may be a decision upcoming and an initiation of a first line program in KRAS lung, and we’ll say that when Pfizer put out the press the only press release they put out to date on deal there is certainly been a lot of communication from Pfizer about AstraZeneca but the press release call that only a short list of mechanisms one of them was RAS or KRAS in addition as an important reason why they felt AstraZeneca was a valuable addition to the portfolio. But uveal now expected to file on 2015, so we could see near-term revenue Array would expect double-digit royalties with selumetinib I am assuming success and great potential there with the round up of ongoing trials including thyroid.

And then a number of catalysts that I mentioned including the rare cardiovascular disease which we would expect to have results around the end of year looking forward to sharing that could be an important breakthrough for patients and a relatively rapid path to market in the event that the data was positive. MDS data, this is a low risk MDS patient, that data is maturing and we’re wrapping up regulatory discussions to understand the path forward.

Many of you may recall that we saw consistent across couple of studies consistent effect in taking patients who are dependent on transfusions for platelet disease core prognostic factor for MDS and making them independent and we’re just validating that that is an appropriate end point for future pivotal trials. And the highly selective Oral HER2 ARRY 380. There is study ongoing at Dana-Farber in all patients with brain mets looking forward to completing that study and publishing it.

It’s possible for that to occur at San Antonio by the end of the year but it’s not something we can commit to and we know that Dana-Farber rarely would publish until they have completed their trial, completed enrollment in the trial. And then finally the TRK space very exciting with the PAN TRK now in the clinic very soon after we formed a company with some investors to get it it’s way. So a lot of exciting progress and catalyst in the upcoming period. And with that the remaining time we are happy to open up to questions if anyone has a question here in the audience.

Question-and-Answer Session

Steve Byrne - Bank of America Merrill Lynch

Any questions for Ron? I have kind of big picture one for you Ron. Whether binimetinib comes back to you or not. Can you just compare those MEK inhibitors you got, selumetinib and then GSKs Mekinist, is there room for all of them in oncology? Are there binding affinity differences that warrant differentiation based on indication?

Ron Squarer

Excellent question, our belief is that there is not only room but an absolute need for three or more MEK inhibitors to be available for treatment and I’ll explain why. So first just talking about Mekinist, the GSK MEK inhibitor and binimetinib just to start there. What we know about Mekinist although it is on the market and improved and being used is that, it has a very, very long half life four days and has struggled to combine with many agents other than the RAS inhibitor and so of course very severe down dosing when they have attempted to combine with certainly cytotoxic. And so as a result I think that it’s going to be challenging to combine broadly although it does have an important role already in BRAF melanoma. The data that we sought ASCO last year with the Novartis ARRY-MEK RAF combo, certainly showed a good activity but we saw a very clean safety profile namely issues that have risen with other MEK RAF combos like high levels of fever pyrexia and high levels of RAS don’t seem to be an issue with the ARRY Novartis MEK RAF, so they are even in BRAF you see there is need potentially for a choice and may be a second offering.

If we go to AstraZeneca, it’s very interesting. I don’t think that Astra with our other Array invented MEK inhibitors having combinability issues, in fact Astra not having a robust portfolio of targeted agents has somewhat relied on cytotoxics for their program and so quite elegantly Novartis developed binimetinib mostly a single agent or in combination with targeted agents whereas Astra really has developed selumetinib mostly as a single agent in combination with cytotoxic and so there you see the value of having very different approaches in more than one MEK inhibitor on the market. So we see, as I said a tremendous need for three or even potentially more, and there is going to be our position now. Between our two Array invented MEK inhibitors that would be Selumetinib with AstraZeneca and Binimetnib with Novartis.

There actually is no real overlap yet. And so, there are six pivotal, total three each and are on completely different diseases, and so that I think speaks to the value of having more than one drug out there. The only overlap that exists today amongst or six pivotal is in fact with GSK in BRAF melanoma. But we do believe that we may ultimately have, and the data has to be collected, and may have some advantageous and combinability and in tolerability in the MEK RAF arena. And with, in aiming the logics, potentially playing a role, a growing role in melanoma, tolerability we believe is going to be important. So that’s a significant difference.

Steve Byrne - Bank of America Merrill Lynch

So partnering with pharma has been kind of in your real house. How do you think about filanesib going forward? Is there something that you would prefer to commercialize on your own?

Ron Squarer

Right, so at this time we are developing the drug on our own. And we think that it’s important to provide more data and specifically the phase 2 that we’re running now, that we will inform our base too, but also gives us an opportunity to publish, first our response rate and then ultimately PSS to give investors a sense of what the potential for filanesib is, but we’re not -- and to encourage, of course recruitment. But that data may also inform potential partnerships, and at this point we have no specific intention to partner filanesib except in Asia. And as we have said in the past Asia maybe sort of a bridge to power for Array; and we have talked to a number of companies about partnership there. Short of that, we always remain open to talking and we do and we have engaged in conversations with various parties. But we think that it’s fortress to reveal the real potential of the drug before we would necessarily do a deal like that. No reason why we can’t go all the way on our own, not to dissimilar from what Onyx did prior to being acquired by Amgen.

Steve Byrne - Bank of America Merrill Lynch

And in the DCM drug, what do you think limits the diagnosis, is it the genetic testing, or just not employed enough to identify, you said a thousand are treated out of 6000 to 8000, you think are out there?

Ron Squarer

Right, we have done a bit of epidemiological work, some primary research, primary to see the potential. I think the key is, what I mentioned earlier, if there is no benefit in knowing you have this mutation, there is no change in treatment paradigm. It’s not a great motivation, I think the minute that we offer, if our program is successful, we offer an option which can help with the progress of the disease. I think anybody and everybody especially who is not particularly responsive to treatment would be quite enthusiastic about getting tested and moving forward. We’re not looking in this initial study to a slow progression of the disease. We are looking for improved function. This isn’t a long look at treatment and control arm where you are trying to slow progression. We’re looking for improvement at the high hurdle, but based on the animal data and the very anecdotal human data that we have, we think it’s possible to show that. And if so, that would be very compelling profile, certainly for regulators to bet on, but also I think for patients to go and get a genetic test which is incredibly complex or costly and may give them an opportunity to see some real benefit there.

Steve Byrne - Bank of America Merrill Lynch

Okay, I think a lot of time. Thank you, Ron.

Ron Squarer

Great. Thank you very much.

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