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Portola Pharmaceuticals (NASDAQ:PTLA)

Bank of America Merrill Lynch 2014 Health Care Conference

May 15, 2013 01:00 PM ET


Bill Lis - CEO

John Curnette - EVP, Research & Development


Colin Bristow - Bank of America Merrill Lynch

Colin Bristow - Bank of America Merrill Lynch

Thank you for coming. My name is Colin Bristow. I cover the U.S. major pharmaceutical names. It’s my pleasure to introduce Bill Lis, Chief Executive Officer of Portola Pharmaceuticals.

Bill Lis

Good morning everybody and thanks for joining us today. These are our forward-looking statements. So, we just completed a first quarter of 2014. We had a productive first quarter, so we think we continue to be on our way to build a substantial growth company. Our goal is developing commercializing life-saving medicines in the treatments of blood clots and blood cancers. We have three wholly-owned and potentially groundbreaking products. They target multi-billion dollar hospitals, specialty care markets. We have a management team that’s done this before, brought to market and developed these types of compounds and we're confident we can do it again. We have near term data from three wholly-owned programs that are either proof-of-concept or pivotal data in the next 12 to 18 months.

Here is the look of the late stage pipeline of our innovative compounds. What’s unique about all of our programs, we've used a biomarker or genetic approach to clinical development either by using those for the actual endpoints for approval or by utilizing them to identify patients most likely to benefit from our therapies. I'll go through each one of the programs and where they are quickly. Betrixaban is our oral Factor Xa inhibitor, the large class of agents. We're using a biomarker approach [indiscernible] to identify patients who will most likely benefit. We're ahead of the competition in this indication. The 40% enrolled in a pivotal Phase 3 clinical trial. We expect to report out data by the end of 2015 on this program.

Andexanet alfa, we call it our companion program to Betrixaban. It is an antidote for Factor Xa inhibitors. It is a recombinant protein to the universal antidote against all of the Factor Xa inhibitors. Its value I think is best described by its breakthrough designation by the FDA last year. The fact that it’s on an accelerated approval pathway, also its validation by the partnerships that we have signed up. Each one of the Factor Xa inhibitor companies is partnered with us. They give us resources, financial resources to develop this drug but we retain a 100% of the rights. This program just initiated its pivotal Phase 3 clinical trials in the last month. We will report out data from those initial Phase 3 clinical trials later this year and early next year.

We expect to file a BLA by the end of 2015. Finally, what we call the next wave of innovation in the area of hematologic cancer is a drug called Cerdulatinib. It’s a dual Syk-JAK inhibitor, works along the same pathway of drugs like PI3 kinase inhibitors, the BTK inhibitors but it’s different. It also works to inhibit the growth pathway relative to cytokines. We are in Phase 1. We just reported yesterday that we'll present [indiscernible] which will be the initial data from Phase 1 on this program. We also have a partnership with Biogen Idec for a group of very six selective inhibitors that they are studying in early Phase 1.

So, this slide sets up and highlights not only the opportunity but the strategy that we're talking which will be called our franchise in thrombosis, both the oral Factor Xa inhibitor and the antidote. This is going to be a very big market, about $5 billion this year globally and projected to be somewhere between $15 billion and $20 billion because it’s across a large group of patients and across about, probably about 10 different indications for the oral Factor Xa inhibitors.

Our strategy is to gain a significant share not only in the oral Factor Xa inhibitor space but also in having the antidote for these agents. If you think about this, it's a $20 billion, potential $20 billion market, not only to prevent clots but also to limit bleeding for the Factor Xa inhibitors. We're going to play in a big portion of the oral Factor Xa market and we're the only one playing in the antidote market now.

If you look at that center graph of colors that represents the potential revenue from each of the indications of Factor Xa inhibitors. We are going after the one in light blue. We are ahead of all of the competition in that one. It’s a potential $3 billion to $4 billion indication alone. Right now all the competition J&J, Bayer, BMS, Pfizer and Daiichi are playing in the other indications and that’s where they are competing. And then we're the only one that has an antidote and what we think is that potential $2 billion addressable market.

So that’s how we plan from a strategic standpoint, generate significant amount of revenue and a significant franchise in this market. Why do new think Betrixaban can compete so well with the other Factor Xa inhibitors and specifically in the indication we're pursuing that’s prevention of clots in medical patients that are hospitalized. This drug just has unique properties that none of the other drugs do. It has the longest path life, about 20 hours and much shorter for the other Factor Xa inhibitors, only one in the class that’s cleared by a low degree through the kidney and compared to Eliquis and XARELTO, not metabolized by CYP3A4. All this does is we think brought in the margin of error for the therapeutic index for these drugs. As you know anticoagulants is nothing more, nothing less. They prevent clot by sending blood, so you just have to kind of get it right and the therapeutic index is very important. We just think we have the widest therapeutic index.

It’s really important for the patients. We're trying to study medical patients that are hospitalized, they have pneumonia, they have severe infection, they have strokes, they have heart failure and they have underlying risk factors for blood clots while they’re in the hospital and for a period thereafter. This is a very large and established in hospital market. Six to 10 days of Lovenox is the standard of care. At its peak Lovenox sold more than 2 billion with just six to 10 days of therapy just in this indication. We’re trying to solve two things. One, we’re trying to address the limitations of Lovenox in the hospital. It’s costly. It’s an injection. It causes bleeding. Injection site hematomas, we’re trying to fix for that but moreover we’re trying to fix for the outpatient period several weeks after discharge. There is nothing approved and this is where the majority of life threatening clots occur.

So, this sets up the stage for our strategy. I'll just say our competitors at J&J-Bayer they are only seeking the outpatient portion of this. We think that’s a mistake. We think patients should be treated once they’re identified in the hospital and continued during the outpatient setting that sets up our Phase 3 pivotal clinical trial it's called APEX. As I said, it’s about 40% enrolled, 450 sites in over 32 countries and approximately and 7,000 patients can consist with the unmet medical need. You randomize patients versus Lovenox the standard of care in the hospital, that’s continued for about 10 days and then against placebo during the outpatient period. Again you can study versus placebo because there is nothing approved.

What we’ve said at this point its 40% enrolled the pool blinded aggregate event rate is on target. And that makes us confident as we’re almost half way through enrollment. We have a utility analysis that will be conducted early next year.

I mentioned XARELTO the J&J product. They’re on their second clinical trial. The first clinical trial was successful for an (efficacy) [ph] standpoint not from the bleeding standpoint. I mentioned some of the properties of our drug that we think differentiated just shows it on the pharmacodynamic curve. The shaded part represents an INR that many of you know that INRs are used to balance the efficacy in bleeding of warfarin. You get it above that line and you become therapeutic. Keep it below the upper line and you limit bleeding. So what you try to do with the Factor Xa inhibitor really is just kind of find you your PD curve somewhere in the middle.

This represents the 80 milligram dose of betrixaban being studied in Phase 2 and as I told you because of the properties of this drug, once we get a blood level, we can kind of maintain it through a number of subpopulations of patients and within patients we think better than the others. This is the pharmacodynamic profile of XARELTO. This is the drug that’s going to sell several billion dollars this year. It’s a short half-life drug. It’s clear that a high-degree to the kidneys so there is a lot of variability. Xa is very good target. There is a wide therapeutic index. But when they studied this drug first in this frail patient population acute medically ill, they had excessive bleeding and fatal bleeding as well. This is why we think we’ll succeed in having efficacy with lower bleeding.

And again we’re about two years ahead of them in the clinical stage. So what’s so compelling about this if we're success, what’s compelling is we’re going to address the limitations of Lovenox in the hospital but really we have an extremely compelling value proposition outside of the hospital. You can build a $3 billion to $4 billion market with an oral drug that cost about $8 a day over 35 days of treatment because there is just so many patients, about 20 -- more than 20 million of these patients just in the G7 alone. We can save on cost due to re-hospitalization by preventing clots. We can prevent death. What’s really important we’re not studying against generic warfarin, we’re studying against Lovenox. We can be at a daily price discount to either generic or branded Lovenox or enoxaparin, we think that’s compelling.

Next, we’ll go onto Andexanet, the antidote. What are we trying to solve for here as the class of Factor Xa inhibitor grows so does the need for an antidote, it’s just real simple. Between 1% and 4% of these patients will have a major bleed, about 1% of these patients annually will require surgery, that’s the basis for the market for these drugs. We know this data based on the published phase 3 clinical trials. We also now know that we’re on track. We think to get to about 500,000 hospital visits in the G7 and about the G7 in the year 2020. Again, these are patients that will be on Factor Xa inhibitor, they will bleed because of the drug. They will bleed because they had a traumatic injury around the drug or they’ll require an emergency surgery and that’s what we’re trying to monetize or those patients with the antidote.

What is the antidote, the recombinant protein? We’ve made modifications to the protein so that it needs a procoagulant, anticoagulant, acts as decoy at the high affinity binding site that's retained, and it really just bind in for cluster the activity of Factor Xa inhibitors. At the earliest time point we can measure this drug. It works as an infusion. It works quickly, robustly. We can also have the short half-life so we can give it for a short period of time, if needed, depending on the clinical situation or we can give it for an extended period of time. We’ve done a series of Phase 2 trials. We have safely in over 100 healthy volunteers. Here is the data in Phase 2 showing the reversal of Eliquis the BMS compound on the left, XARELTO the J&J compound on the right. What’s on the Y axis is anti-factor Xa level, that’s the measure used to measure the anticoagulant activity, catalytic activity of the Factor Xa inhibitors.

The blue triangles represent a bolus-only, if you just get a short bolus, the green representing the bolus and infusion and as you can see in both cases you can knock out the anticoagulant activity for a short period of time with a bolus or you can extend it with an infusion. These will be the end points for our Phase 3 clinical trial. Our Phase 3 clinical trials agreed to with the FDA for a conditional approval of healthy volunteers with a TD mark of anti-Xa units as the end point.

So we think we have a high probability of success. On the left hand slide what we’re doing from a bolus standpoint only randomized to Andexanet Alfa bolus or placebo, that healthy volunteers in each one of the clinical trials, we'll do a clinical trial, phase III clinical trial for each one of the Factor Xa inhibitors including our own betrixaban, the FDA has agreed that we get conditional approval and then we have to do a confirmatory clinical trial. And that will be done in bleeding patients, and that will be done primarily as a post marketing effort. We’ll contribute some patients to the BLA but primarily as a post marketing effort.

Last compound that we’re excited about is Cerdulatinib, the dual Syk JAK inhibitor. As you take a look at hematologic cancers, such cancers such as chronic lymphocytic leukemia, diffuse large cell, B-cell lymphoma, really driven by two pathway growth factors. One on the B-cell side, one on the cytokine side, we have an agent, one pill that targets both and what we’re trying to do is show in the clinic by and large what we’ve shown pre clinically. What we’ve shown pre-clinically is that we can identify the primary cell lines that have a mutation that drives tumor growth, we’ve had activity there, these are NFkB driver mutations, [indiscernible] CARD11, YD88 and other mutations that have been identified, we’ve shown that activity. What we’ve also shown is an acquired mutation, this is represents the patient on the left hand side initially responded to ibrutinib after a while relapsed, this is a now a known mutation that is acquired at the receptor site and we showed activity in vitro in these tumor cells. What’s not shown on the screen is PI3 kinase inhibitors, other JAK inhibitors, JAK specific inhibitors did not show activity against these cells, so again, what we’re trying to do is show in the clinic what we’ve shown pre-clinically, with a dose sending clinical trial, we reported out yesterday that we have high levels of target engagement, even at the lower doses.

This drug has a pretty good half-life, BTK and PD3 stable, looks like it’s a once daily drug potentially and we’ll report out that data at ASCO and then if we see no safety signals and we feel confident then we’ll advance this into a dose expansion study, and that’s where we start to use genetic profiling to see if we have specific and differential activity in those patients that I mentioned.

I’ll finish this by showing what all the activities, every milestones we have coming up. Besides the futility analysis and the Phase 3 data end of -- or completion and for betrixaban there’s a number of data safety monitoring committees, milestones that are not on the fly. And there’s a number for andexanate, a number of Phase 2 studies that will be reported out this year, enoxaparin, edoxaban, looks like a betrixaban study and then the Phase 3 studies again we’ll be reporting out by the end of this year, early next year and then the Phase 1 data from the escalation and expansion for cerdulatinib and [indiscernible].

Question-and-Answer Session

Colin Bristow - Bank of America Merrill Lynch

If you have a question, put your hand up and we’ll get a mike to you but I’ll kick off with a couple.

Unidentified company representative

I am with John Curnutte our Head of R&D, so he'll help to answer questions.

Colin Bristow - Bank of America Merrill Lynch

With regards to the activity beyond today, is there any differential activity or one factor Xa versus another, and is it active at all against pradaxa?

John Curnette

Good question, first of all its activity against all of the Xa inhibitors is quite predictable and its entirely driven by the stoichiometry, one molecule of the andexanate binds one molecule of the anticoagulant, in the case of the low molecular evaparin it binds to one molecule of the hypernated antithrombin 3, so basically we can calculate the dose required for all of the Xa inhibitors directly. With regard to the 2a inhibitor pradaxa no it does not work against that. It’s specific for all of the direct and indirect Xa inhibitors.

Colin Bristow - Bank of America Merrill Lynch

[Indiscernible] dosing of the antidote, is there any evidence to suggest that it pushes you into a procoaguable state?

John Curnette

No, we have looked for that clinically and we looked for it extensively in our pre-clinical toxicology so we have exposed for example, animals, monkeys up to 60 milligrams a day which is over 10mgs per (tick) [ph] per dose, for a total of two weeks we did the extensive necropsy looking for evidence of thrombosis, thrombus formation, fibrin deposition, we did not see any, so far so good, clinically and over now a 100 healthy volunteers, no evidence of any thrombotic complication.

Colin Bristow - Bank of America Merrill Lynch

We have a question.

Unidentified analyst

Yes, can you talk about any other competitive products being developed for anticoagulate as a -- the antidote if you will, and the second question was, I might have misinterpreted your slide, you talked about 1%-4% of patients bleed while they’re on these Factor X agents. Does that change as they stay tighter in that range? You articulated, you said your drug keeps them in a tighter range, you then showed I think Eliquis having a bigger range. Did I misinterpret the connection between those two?

Bill Lis

You didn’t but it’s again, I think you are talking about large population studies, so we mentioned 1% to 4%. Well, I think qualitatively we don’t have randomized clinical trials but you qualitatively you can say it does and so what I didn’t show you is I didn’t show you Eliquis’s curve. So, if I took Eliquis given BID instead of QD and on a milligram per milligram basis, its potency is very similar to that of XARELTO.

It would more look like Betrixaban. It will fall within those curves and we'll just be given BID, so you see it like this. So, and qualitatively when doses, on a milligram per milligram basis that are equally potent are given between XARELTO and Eliquis. Eliquis is just on a bleeding, better bleeding profile, just past, it’s qualitative, it’s not randomized. So again, it’s still somewhat hypothetic, but the Phase 3 data is starting to bear out. Once you start to push the limits of your drug and quite frankly all they did with Johnson & Johnson or with XARELTO was they just gave a lot of drugs, so that there were some around at 24 hours and then with respect to its renal clearance, maybe there's some variability because those inter-patients there is a renal compromise.

If we saw anything with Pradaxa, a drug that’s cleared 80% through the kidney, once it’s used in a broader patient population renal function changes and you get a higher degree of bleeding. I think that’s what we saw with Pradaxa after initial great launch, some of the bleeding came in. So, it’s qualitative still and nature but I think the evidence is starting to build, so that’s the answer to the second part of your question.

The first part -- and the last of that is its across indications too, so bleeding rates in orthopedic surgery are low around 1%, bleeding rates and acute medical ill is still low around 1% in acute coronary syndromes they are higher. Where XARELTO was studied in VTE treatment in some instances they are higher. So, that’s where you see the 1% to 4% because it’s across different indications. XARELTO is approved for five indications at this point, Eliquis for two.

John Curnutte

With regard to your first question in terms of other agents, so you can break agents into two broad categories, those that bind specifically to the anticoagulant and you can actually measure that binding and measure a pharmacodynamic endpoint. For Pradaxa Boehringer Ingelheim, he has a FAB monoclonal antibody that is specific for Pradaxa that they are developing for reversal of that. It does not work on the Xa inhibitors. For the Xa inhibitors, we are the only one that has that this type of mechanism of action where you can demonstrate binding and then a pharmacodynamic endpoint. There is another company called TheraSphere that has a small micelle molecule, it’s a diarginine type molecule. I think the field in general is not yet clear how that is working. It may have some binding capability but it may have a mechanism of action that is different in terms of its ability to whatever degree it can reverse bleeding at least in animal models.

So, I think right now the Andexanet is alone and well ahead of any other molecules that have this kind of very specific hygienity of clearly demonstrable binding in sequestration of the anticoagulant.

Unidentified Analyst

And clearly the opportunity for your antidote is dependent on the size of the Factor Xa market and what feedback have you got or to what extent do you think the lack of a current antidote is impeding the growth of this market?

Bill Lis

Well, we probably think it’s around 10% maybe 15% that is steep. I think the franchise is doing quite well. I had responsibility actually for XARELTO while I was at J&J before I rejoined my colleagues at Portola. And if I go back to all of our modeling, it’s either on target or a little ahead of target, so they're doing actually quite well. I think Eliquis will, once it gets more indication it will do well. They have a little headwind. With respect to warfarin remember they are studying I think that’s why we chose to be studying in a big indication versus Lovenox because there is not that headwind, going against the generic. So, I think they are going to do quite well but by our guess and our market research somewhere around 10% to 15%.

Where you really start to see pushback is on a fibrillation. I think doctors know patients with atrial fibrillation, elderly patients, doctors know who is at risk for a fall, right and those are the patients I think for warfarin at this point because warfarin has an antidote, I think that’s what you see. Patients are highly likely to have a surgical procedure, if we do our market research again, physicians will say I must just not going to take the risk, this patient doesn’t have a 1% chance of having an urgent procedure, he has got a 10% to 20% because of some underlying condition. And I think those are the patients that are being reserved and I think that’s where we start to come up with about 10%, 15% of the market which is pretty significant if you think about the size of this market.

Unidentified Analyst

Can you walk us through just specifically with regards to the apixaban and XARELTO, kind of lack of a positive risk benefit in the medically old population? What specific steps did you take in your trials to kind of stack the deck in your favor? I know you're doing the d'dimer approach but anything else that you point us to?

Bill Lis

Well, a lot of it’s just is patient selection and it’s really about the patients in your dose, that’s what it’s all about. We talked about the properties of Eliquis and how good they are and its safety profile but they utterly failed in acute coronary syndromes. They utterly failed because they chose the wrong dose and they chose the wrong patient population. Because they showed -- they were fatal with an excess amount of bleeding in acute coronary syndromes in XARELTO when we designed that trial at J&J we chose a very low dose of 2.5 milligram b.i.d. of XARELTO and the patient population was different and that drug showed a mortality benefit. So that just goes to show the difference in outcome you can get with two of the same classes of drugs. We think we have the best properties. I have showed you that and then we used in d'dimer.

We know now based on the body of evidence that d'dimer patient simple blood marker have a higher degree, have a higher rate of events and a higher magnitude of benefits. They respond more to anticoagulants. We know this going back to the Lovenox days. No one has just thought to say okay I’ll narrow the market down by 60% and I’ll just focus there. We just thought it was time to do that and for a company our size, we can build a substantial market, $1 billion market, just on that patient population alone and then still address some of the limitations of Lovenox. So that’s just a fairly simple approach that we’ve taken.

Colin Bristow - Bank of America Merrill Lynch

Can you talk to the anticipated commercial footprint you need based on the antidote and betrixaban?

Bill Lis

Yes, so it’s only about, this is the sales force we had at Core Therapeutics, it’s a sales force while I was at Scios, it's a sales force that I was actually a part of when we launched Lovenox in the early 90s. It’s a small hospital sales force. It starts out at 50-75, it can grow to 100 and 150 but it doesn’t grow much more than that over time and we can sell both products. Certainly in the United States the question for us is whether we want to do it in any other regions as well and I think with that option we’re just going to -- we’re going to leave open. But it gives us a lot of leverage we’ve got -- we potentially have two tools in the toolkit for physicians and a lot of value.

Colin Bristow - Bank of America Merrill Lynch

Any other questions? Okay, thank you very much.

Bill Lis

Thank you.

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