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TESARO, Inc. (NASDAQ:TSRO)

UBS 2014 Global Healthcare Conference

May 21, 2014 08:00 a.m. ET

Executives

Dr. Mary Lynne Hedley – President

Analysts

Andrew Peters – UBS

Andrew Peters

Good morning and welcome everyone to the final day of the 2014 UBS Global Healthcare Conference. My name is Andrew Peters, and I am the small and mid-cap biotech analyst here at UBS. It is my great pleasure this morning to introduce TESARO and speaking on their behalf is Dr. Mary Lynne Hedley, Founder and President of the company. Afterwards we will be hosting a breakout session in the Carnegie West room across the hall. Thank you.

Dr. Mary Lynne Hedley

Thank you Andrew and thank you everybody for being here this morning. So as a reminder, I will be making forward-looking statements during this presentation, and I refer you to our SEC filings for further information.

Four years ago TESARO was founded with a mission to improve the lives of cancer patients by acquiring, developing and commercializing oncology products. Since that time, we have created a portfolio of eight oncology development products. We are preparing to submit our first NDA in the middle of this year, and we are beginning to prepare the company for its first commercial launch.

Our portfolio is balanced by risk and development stage, and includes Rolapitant, an NK-1 receptor antagonist for the prevention of chemotherapy induced nausea and vomiting, which will be the subject of our first NDA submission. Niraparib, our Phase III product candidate in development for breast and ovarian cancer patients, TSR-011, our ALK/TRK compound in Phase I development and our preclinical immuno-oncology basket of products.

I will now spend some time going through each of these product candidates. Rolapitant is a long-acting NK-1 receptor antagonist being developed for the prevention of chemotherapy-induced nausea and vomiting. Nausea and vomiting are symptoms that can occur in a patient for up to 5 days post a single dose of chemotherapy.

We recently reported the top line results from our registration program of Rolapitant and these results continue to support a differentiated product profile. Rolapitant is differentiated based on activity, safety and convenience. A single dose of Rolapitant reduces the number of patients who experienced the symptoms of nausea and vomiting compared to standard therapy. Rolapitant is not encumbered by CYP3A4 drug interactions, and eventually an oral and IV formulation will be available to fully recognize the global market opportunity.

Our registration program consisted of three pivotal Phase III trials conducted in over 2400 patients, receiving different types of chemotherapy. These were randomized, well controlled, double blinded studies in which patients received either standard therapy or standard therapy plus Rolapitant. The primary endpoint was complete response or no emesis or use of rescue medications in the delayed phase. And as I indicated, we recently reported that we achieved the primary end point in all three of these trials.

We look forward to updating you on the data from these trials at ASCO and MASCC, which is a supportive care cancer meeting that occurs shortly after ASCO. The data that will be presented at this meeting includes analysis of the secondary endpoints as well as an important subgroup analysis of 459 patients from the MEC study. This is an important analysis because it primarily includes patients receiving anthracycline/cyclophosphamide or carboplatin, which represents the largest segment of the US market.

Patients receiving anthracycline/cyclophosphamide and carboplatin represent about 85% to 90% of the overall number of patients who by NCCN and ASCO guidelines have been recommended to receive an NK-1 receptor antagonist. The remaining 10% to 15% of patients are those receiving cisplatin. If we take the 5 million patients represented by this pie, and we dollarize it to the current price of Emend, the only other marketed NK-1 receptor antagonist, we see that there is a market opportunity of 1.5 billion for Rolapitant.

Now if we look at the current sales of Emend, we see that they have penetrated only about 20% of the market opportunity, and most of the uses in patients receiving cisplatin. So our opportunity is to convince physicians to follow the NCCN and ASCO guidelines and treat the remaining over 4 million patients, who are receiving anthracycline/cyclophosphamide with an NK-1 receptor antagonist.

In the US market, anti-emetic agents are available typically as both oral and IV formulations. The IV use in the US represents about 80% of the market opportunity. You can see here the significant revenue potential for Rolapitant should it achieve different market shares of both the IV and the oral formulation.

We intend to launch the oral formulation of Rolapitant in the middle of next year and about a year later follow with the IV formulation. We believe that the differentiation of Rolapitant coupled with appropriate promotional activity and a focus on educational activity encouraging physicians and healthcare providers to treat patients according to the NCCN and ASCO guidelines, coupled with our unique ability to partner with oncology clinics will well position Rolapitant for future market gain.

Approximately 120 people will support these commercial efforts. These include field-based as well as home-based associates, and importantly once Rolapitant achieves an annual run rate of about 50 million to 60 million will achieve a breakeven for the P&L for this brand.

Moving on to Niraparib. Niraparib is an orally active potent PARP inhibitor. It was the subject of a Phase I clinical study conducted in over 100 advanced cancer patients and in this trial clinical activity was demonstrated, in particular in group of patients with a genetic and clinical marker, as well as a well tolerated dose and a dose for moving forward into Phase III was identified.

We have since initiated two Phase III trials with Niraparib, including in patients who have breast or ovarian cancer, and we have recently initiated a combination chemotherapy study with temozolomide in patients with Ewing's sarcoma. The Phase I results were stunning on a couple of levels. First the very high incidence of response rate and these were response rates that range from 75% to 50% in the target population that we are studying in Phase III.

In addition the durability of these responses was profound. A median of over 450 days in patients that have the genetic marker as well as patients who did not have the genetic marker. The adverse event profile for this drug was typical for PARP inhibitors and the dose-limiting toxicity was identified as thrombocytopenia.

Since that time we have initiated two Phase III studies and we are focusing these studies on patients who are enriched for either a genetic marker or certain clinical characteristics based on the Phase I data and the scientific literature. In the ovarian trial, we are enrolling patients with high-grade serous ovarian cancers, who are platinum sensitive. These patients either contain a germline BRCA mutation or a non-germline BRCA mutation. Each cohort is randomized 2 to 1 to receive Niraparib or control, and the primary endpoint is PFS.

In addition, in a genetically targeted patient population of breast cancer patients we are exploring the activity of Niraparib in comparison to physician’s choice in the metastatic setting. Again patients are randomized 2 to 1 to receive Niraparib or control and the primary endpoint is PFS.

Simply focusing on the breast and ovarian cancer patient populations, these two indications in the US and Europe only represent a significant market opportunity over $3 billion for Niraparib. Of course we and others in the field believe that PARP inhibitors can target other potential indications, and we look forward to updating you at our ASCO event, our investor event on Sunday night as to our thinking related to additional indications for Niraparib.

Moving on to 011. TSR-011 is our ALK/TRK inhibitor. It is very potent and selective and has demonstrated in preclinical models the ability to stop the proliferation and kill cancer cells that are driven by ALK or TRK genetic mutations. In addition, animal models demonstrate that this inhibitor can cause tumor regression in these driven tumors.

We initiated a Phase I dose escalation cohort expansion clinical study with TSR-011, in which we identified a dose which led to very impressive clinical results. In particular in ALK positive patients that had progressed on a first generation ALK inhibitor. Since that time we have enrolled 11 additional patients with ALK or TRK mutations at a fractionated dose of TSR-011 to optimize the PK, PD profile and we look forward to updating you on the clinical results from this study in a meeting in the fall.

And finally our immuno-oncology portfolio. The rationale for recently [in-licensing] an immuno-oncology portfolio is based on our belief that immuno-oncology will at some point in the near future form the basis for many baseline cancer therapies. In addition, we believe that it is the combination of immunotherapy agents together with either other immuno-oncology drugs or small molecules such as those potentially in our own pipeline, which will provide the best care for patients in the future.

And finally, we believe that having a basket of immuno-oncology compounds represents a significant opportunity for us to partner with additional companies and collaborators who are interested in exploring immuno-oncology combinations with their own agents. Our current basket consists of three antibody candidates that are targeted to PD-1, LAG-3 and TIM-3. PD-1, LAG-3 and TIM-3 are known as checkpoint proteins, and these proteins are important because they send a negative signal into T cells and when they inhibit that T cell response, the T cells are no longer able to kill the tumors.

Tumors have evolved a unique mechanism to express the ligand for these three checkpoint proteins and in so doing inhibit the killing of the tumor cells, when the T cells come into the tumor microenvironment. It has been demonstrated both preclinically and now clinically with PD-1 antibodies that blocks the interaction between the T-cell and the tumor that you can reinvigorate that T-cell response, which leads to very long, durable clinical benefit in patients.

The excitement with the PD-1 antibodies that currently exist in this space have spurred the interest in several additional checkpoint molecules, and two of the most promising include TIM-3 and LAG-3. Our goal is to move our PD-1 antibody TSR-042 into the clinic in the second half of next year, and this will be shortly followed by antibodies for TIM-3 and LAG-3.

I hope you can see that TESARO is well positioned for success. We have near-term revenue opportunities, most notably with Rolapitant, which represents a $1.5 billion market opportunity simply in the US alone. We have a very promising pipeline with the further development of an IV formulation of Rolapitant, two ongoing Phase III global trials that are currently enrolling breast and ovarian patients with Niraparib, the ability to potentially expand the Niraparib franchise beyond breast and ovarian cancer, TSR-011, which has demonstrated compelling activity in ALK positive tumor patients, which have progressed on our first generation ALK inhibitor, and finally our very interesting basket of immuno-oncology products, which positions us well to take advantage of the excitement and potential patient benefit of this class of agents.

We are a well capitalized company. On our last earnings call we reported 180 million in cash and cash equivalents and net proceeds of over 94 million from a follow-on offering in February, and finally we have done it before. So we are an experienced team. We have launched products and developed oncology products in this space.

Our additional priorities for 2014 include presenting data at upcoming medical meetings, submitting an NDA for Rolapitant in the middle of this year, advancing the IV Rolapitant program, continuing to advance the Niraparib program, expanding the Niraparib program into other indications, continuing the development of 011 and setting ourselves up for a registration study and finally advancing the immuno-oncology basket of products. Thank you very much.

Question-and-Answer Session

[No formal Q&A session for this event]

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