Clovis Oncology's (CLVS) CEO Patrick Mahaffy on Q2 2016 Results - Earnings Call Transcript

| About: Clovis Oncology (CLVS)

Clovis Oncology Incorporated (NASDAQ:CLVS)

Q2 2016 Earnings Conference Call

August 08, 2016 04:30 PM ET

Executives

Breanna Burkart - IR

Patrick Mahaffy - President & CEO

Dan Muehl - VP, Finance & Principal Financial and Accounting Officer

Analysts

Peter Lawson - SunTrust Robinson Humphrey

Alex Schwartz - Stifel Nicolaus

Samir Siddhanti - Goldman Sachs

Caroline Palomeque - WallachBeth Capital

Kennen MacKay - Credit Suisse

Steven Breazzano - Piper Jaffray

Whitney Ijem - JPMorgan

Roy Buchanan - Janney Montgomery Scott

Operator

Good day, ladies and gentlemen, and welcome to the Second Quarter 2016 Clovis Oncology Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session, and instructions will follow at that time. [Operator Instructions] I would like to introduce your host for today’s conference, Ms. Breanna Burkart. Ma’am, please begin.

Breanna Burkart

Thank you. Good afternoon and welcome to the Clovis Oncology second quarter conference call. You should have received the new release announcing our second quarter 2016 financial results. If not, it’s available on our Web site at www.clovisoncology.com. As a reminder, this conference call is being recorded and webcast. Remarks maybe accessed live on our Web site during the call and will be available in our archives for the next several weeks.

The agenda for today’s call is as follows. Patrick Mahaffy, Clovis’ President & CEO, will discuss the key components of our corporate update provided in today’s new release as well as an update of our clinical development programs. Then Dan Muehl, Clovis’ Vice President of Finance & Principal Financial and Accounting Officer, will cover the financial results for the quarter in more detail; 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. Additionally, please note that we'll be discussing adjusted net loss, a non-GAAP financial measures during today's conference call, required disclosures related to this are on today's news release which can found on our Web site.

Now, I’ll turn the call over to Patrick Mahaffy.

Patrick Mahaffy

Thanks, Breanna. Welcome everybody. Thanks for joining us. Let me jump in with the update on rucaparib. In June, we completely our NDA submission to FDA for rucaparib for the treatment of patients with advanced ovarian cancer with deleterious BRCA mutated tumors inclusive of both germline and somatic mutations. This NDA is based on a pool of data of sets of patient subpopulations from our ongoing treatment studies. Study 10 in ARIEL2 parts 1 and 2 and platinum-sensitive platinum-resistant and platinum-refractory patients.

We anticipate the FDA will provide notification in late August, whether they have accepted the NDA filing for review and at that time provide a PDUFA date in the event the filing is accepted. Foundation Medicine, Clovis’ companion diagnostic partner submitted the PMA application for its diagnostic assay designed to identify both germline and somatic BRCA mutations to the FDA at the end of June as well. Timing of the PMA submission is expected to allow for regulatory approval of the companion diagnostic at substantially the same time that rucaparib would be approved.

Our U.S. commercial team is actively preparing for launch and will be ready to launch at the time of potential approval. In addition, an MAA submission to the EMA for a comparable ovarian cancer treatment indication is planned during the fourth quarter of 2016. We’re also pleased to learn recently than an abstract based on the ovarian NDA dataset was accepted for an oral presentation at ESMO in October of this year.

Turning to ongoing studies with rucaparib, ARIEL3 is our Phase 3 registration study in the maintenance indication, comparing the effects of rucaparib versus placebo. The study is evaluating whether rucaparib given as maintenance therapy in platinum-sensitive high grade ovarian cancer patients, who have received at least two or more prior lines of platinum-based chemotherapy, can extend the period of time for which a response to a prior chemotherapy is maintained, target enrollment in ARIEL3 was completed early in the second quarter and based on the timing of events and comparable maintenance studies of other PARP inhibitors we currently expect data from this study in Q4 of 2017.

Patients in this study were randomized 2 to 1 to receive either rucaparib of placebo and the primary endpoint of this study is progression free survival. The primary efficacy analysis will evaluate in a step down process BRCA mutant patients that all patients with the BRCA mutation or BRCA like signature followed by all patients. Pending positive data we would intend to submit a supplemental NDA for the second line maintenance indication for advanced ovarian cancer patients.

Clovis recently entered into a clinical trial collaboration with Genentech, a member of the Roche Group, to evaluate a novel combination therapy of their cancer immunotherapy atezolizumab and rucaparib for the treatment of gynecological cancers, with a focus on ovarian cancer. Phase 1b trial is expected to begin treating patients in Q1 2017. We and our investigators are very enthusiastic about the potential for this combination.

Two investigator-sponsored studies exploring rucaparib’s activity in different breast cancer settings are underway or initiating later this year. And an additional investigator-sponsored study in gastroesophageal cancer is expected to initiate later this year as well. Prostate cancer is the high priority indication for us as it includes a substantial number of patients with BRCA and other mutations that maybe responsive to rucaparib. We plan to initiate two Clovis sponsored prostate cancer studies in the next few quarters.

First, a Clovis-sponsored Phase 2 single arm study inclusive of patients who have a germline or somatic BRCA mutation, or ATM mutation or other deleterious mutations in homologous repair genes, who have progressed after receiving one line of taxane-based chemotherapy and one or two lines of androgen-receptor targeted therapy, in the castrate-resistant setting. The planned primary end points are radiologic overall response rate in patients with measurable disease and PSA response rate in patients without measurable disease. We anticipate this trial will initiate by the end of this year.

Our second Clovis sponsored study is a Phase 3 comparative study inclusive of patients who have a germline of somatic BRCA or ATM mutation, who have progressed on AR-targeted therapy and not yet received chemotherapy in the castrate-resistant setting. The study will compare rucaparib to physician’s choice of AR-targeted therapy or chemotherapy. Planned primary end point is radiologic progression-free survival. We anticipate this trial will initiate in Q1 2017.

Additionally, in collaboration with the Medical Research Council in the UK, rucaparib will be studied in what is known as the STRAT-STAMPEDE study in newly diagnosed castrate-sensitive de novo metastatic tumor, BRCA mutant and BRCA-like prostate cancer patients. This is expected to begin in mid-2017. And lastly, and returning to ovarian cancer, we intent to initiate the ARIEL 4 confirmatory study during the second half of 2016. ARIEL 4 is a Phase 3 multi-center randomized study of rucaparib versus chemotherapy in BRCA mutant patients with relapsed high-grade epithelial ovarian, fallopian tube or primary peritoneal cancer, who have failed two prior lines of therapy.

During the fourth quarter, we expect screening to begin for our investigator sponsored Phase 2 study in first line maintenance in ovarian cancer patients, which will evaluate three arms of therapy, rucaparib as monotherapy, following a platinum doublet including paclitaxel, bevacizumab monotherapy, following platinum plus paclitaxel and bevacizumab and rucaparib plus bevacizumab in combination following platinum plus paclitaxel and bevacizumab. Primary end point of that study will be progression-free survival.

Moving on briefly to lucitanib, oral inhibitor of the tyrosine kinase activity of VEGF, PDGF and FGF receptors. As you saw today, together with our development partner Servier, we have decided to discontinue development of lucitanib in breast cancer. We anticipate making a decision regarding the future development if any of lucitanib over the next several quarters. As a reminder, all development cost for lucitanib are still paid by Servier as we wind down the ongoing trials.

Now let me turn the call to Dan to discuss second quarter financial results.

Dan Muehl

Thanks, Patrick, and good afternoon, everyone. Our second quarter 2016 financial results are included in this afternoon’s press release. I’ll review the highlights of our financial results and provide some additional commentary.

Let me start with our balance sheet. We ended the second quarter with 378.5 million in cash, cash equivalents and available-for-sale securities. Cash used in operating activities was 68 million for the second quarter of 2016 and 151.7 million for the first half of 2016. This compares with 57.2 million and 105.6 million for the comparable periods of 2015. Cash used in operating activities in the second quarter was down 15.7 million or 18.8% compared to the first quarter of 2016. We reported a net loss of 129.3 million or $3.37 per share for the second quarter 2016 and 212.7 million of $5.54 per share for the first half of 2015.

Our operating results for the second quarter in the first half includes a net expense non-cash impact of 49.9 million related to our 2013 acquisition of lucitanib product rights which we obtained through the purchase of Ethical Oncology Science or EOS. First, in the second quarter of 2016, we recorded a non-cash impairment charge of 105 million to reflect a reduction in the estimated fair value of the intangible asset related to lucitanib reported as part of the EOS purchase base accounting. This reduction in fair value was the result of our and our development partner’s decision to discontinue development of lucitanib for breast cancer. We also recorded a non-cash deferred income tax benefit of 29.2 million associated with this charge.

In connection with the acquisition of EOS, Clovis is obligated to pay additional consideration to the former EOS shareholders as certain future regulatory and sales milestones for lucitanib are achieved. The estimated fair value of these contingent payments is recorded as a liability on the Company’s balance sheet. During the second quarter of 2016, we recorded a non-cash 25.5 million reduction to zero in the fair value of the contingent consideration liability due to a change in the estimated profitability weighted future milestone payments. This reduction is included as a credit to operating expenses in our 2016 results of operations.

On a non-GAAP basis, we reported an adjusted net loss excluding these items for the second quarter of 2016 of 79.4 million or $2.07 per share and 162.8 million or $4.24 per share for the first half of 2016. The net loss for the second quarter of 2015 was 71.5 million or $2.10 per share and 134.7 million or $3.96 per share for the first half of 2015. Our second quarter R&D and general and administrative expenses totaled 67.7 million and 142.3 million for the first half of 2016. This compares to 60.4 million and 117.1 million for the comparable periods in 2015. The year-over-year increase in expenses is primarily due to increased development activities for the rucaparib program and increased personnel related expenses, partially offset by lower expenses related to clinical development activities for atezolizumab.

In addition, research and development expenses in the second quarter of 2016 was down 6.9 million or 10.2% compared to the first quarter of 2016. General and administrative expenses $9.6 million for the second quarter of 2016 and $19.4 million for the first-half of 2016. This compares to $7.2 million and $14 million for the comparable periods in 2015. The increase year-over-year is primarily due to higher legal expense, consulting fees and personnel cost for employees engaged in general and administrative activities.

Operating expenses for the second quarter of 2016 including share-based compensation expenses totaling 9.5 million and 20.5 million for the first half of 2016. Now looking forward, we expect our cash used in operating activities for 2016 to be between 294 million and 309 million, and we will end the year with between 220 million and 235 million in cash, cash equivalents and available for sale securities. As a reminder, the year-end cash guidance is going through payment of milestones of $21.75 million based on the U.S. acceptance and approval of the rucaparib NDA and the EMA acceptance of the rucaparib MAA.

Now, I’ll turn the call to Patrick for some closing remarks and then we’ll open it up for Q&A.

Patrick Mahaffy

Thanks Dan. We’ve got a very meaningful second half ahead of us. We anticipate receiving the FDA’s decision on acceptance of our NDA for rucaparib in the treatment of advanced ovarian cancer by the end of this month. The NDA dataset will be to subject of an oral presentation at the 2016 ESMO Conference in Copenhagen in October, our U.S. commercial and sales organizations were in place and actively preparing for potential approval and the associated launch of their cap rate and we’re enthusiastic about the initiation of additional trials to expanding rucaparib development into other oncology indications later this year and in early 2017. Finally, we plan to complete the MAA submission for the treatment indication for advanced ovarian cancer to the European authorities by the end of this year.

We’ll now open up the call for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question will come from the line of Peter Lawson from SunTrust. Your line is open.

Peter Lawson

Just on ESMO oral presentation, what are we likely to hear? What data sets?

Patrick Mahaffy

Yes I am happy to answer that as I think that is five year and we talked certainly quite a bit about data in the NDA come from two populations, from Study 10 which was effectively the Phase 1/2 study of rucaparib and then for ARIEL2 parts 1 and 2. In our dialogue with FDA that led to our decision to go down this path in our pre-NDA meeting in our submission, we had agreed with FDA to submit data on a specified number of patients who are mutant BRCA and FDA did not, was not confirmed about their platinum sensitivity or their platinum status. So we of course in the conduct of these trials have enrolled platinum-sensitive, platinum-resistant and platinum-refractory disease, all the data we've shown publically thus far has been the platinum-sensitive setting because we came primarily from ARIEL2 part 1 which was in platinum-sensitive patients and from Study 10 which enrolled primarily platinum-sensitive patients.

As we very clearly stated, we have a very impressive response rate as high as it has even been seen for a PARP inhibitor in the platinum-sensitive populations. It's obvious that for reasons that we are really beginning to understand as patients moved forward through the treatment of their disease for multiple lines of platinum that become platinum resistance. Platinum resistance is associated with a lower response rate to PARP inhibitors in general. And so this will be an opportunity for us to describe the data we have combining both platinum sensitive and platinum resistant patients, but I can assure that although the response rate is lower in the platinum resistant patients. It does compare favorably to the approved products in the platinum resistant population. So it will be that presentation of the NDA dataset along of course with the safety and other issues all of which are consistent with what has been reported publically.

Peter Lawson

Great, so we'll get a kind of full dataset at ESMO?

Patrick Mahaffy

You'll get a full dataset on the NDA population that's right.

Peter Lawson

And then ARIEL3 that seems to -- has moved forwards, and it was earlier than expected. What drove that earlier-than-expected data?

Patrick Mahaffy

It is actually a later than expected data for ARIEL3 you mean?

Peter Lawson

Yes.

Patrick Mahaffy

Yes, for ARIEL3, we had originally expected that we would have data from ARIEL3 a year or so following the last patient enrolled. Having seen a recent data on different PARP inhibitors, it became prudent for us given our expectations for the drug to extend that timeline by about four or five months. So we now expect a complete story on ARIEL3 in the fourth quarter of 2017, so in fact we have delayed we haven’t brought it forward.

Peter Lawson

And then how should we think -- just a minor point -- just how should we think about costs for Q3 and Q4? Just around SG&A and R&D, just back to the mundane?

Patrick Mahaffy

So R&D cost will decrease in Q3 and Q4 which will lead to us our ending cash guidance that we provided at 2.20 to 2.35. G&A is going to stay relatively flat.

Operator

Thank you. Our next question will from the line of Tom Shrader from Stifel. Your line is open.

Alex Schwartz

This is Alex Schwartz filling in for Tom Shrader. I had a question and then a follow-up question, if you will. So the first question is, you are treating germ-line and somatic ovarian cancer patients in an all-comer BRCA mutated category, whereas other companies are lumping somatic patients into a BRCA-like category, so to speak. My question is, how much of a difference is there between somatic and germ-line patients? Is there any data out there that you can point to describing the similarity or differences of clinical benefit between these patients when they are taking targeted therapies?

Patrick Mahaffy

I’ll take a crack at that and then Lindsey may add to it. So, we look forward to seeing the presentation of the niraparib data at ESMO where I think for the first time we’re going to have a really clear indication of how somatic mutated patients do compared to other non-BRCA HRD and clearly relative to the germline BRCA patients. So the PFS information is limited at best we do have a response rate data and as I noted in platinum sensitive patients we have a very high response rate and at ASCO this year we reported on around 20 patients with somatic mutations with BRCA and 20 patients with germline mutations of BRCA. The germline mutated patients in that population had an 85% response rate and the somatic had a 75% response rate. I think it's arguable that those are the same number given that it's only 20 in each arm. It is also arguable if you want to that if maybe the germline patients are marginally more responsive than the somatic, but I think what we’re telling we’ll be the PFS data that we see ESMO. Lindsey would you say anything different than that?

Lindsey Rolfe

I wouldn’t say anything different from the data that as you say that we’ve shown the responses look similar in germline and somatic BRCA mutated patients. Of course we had shown data thus far as Pat said from ARIEL2 Part 1 which was our study that had both somatic and germline mutated patients. Study 10, just had germline BRCA mutated patients and the data that we’ve shown so far from ARIEL2 Part 1 is in platinum sensitive patients who have had one or more previous lines of therapy. And of course the NDA would be a subgroup from within that population.

Alex Schwartz

And if I may, another question I had was, so far, we've seen near 80% response rate in platinum-sensitive patients, and about half of them have seen one prior line of therapy. So, looking at olaparib's data in the third, fourth, and fifth line of treatment, the response rate is pretty constant, so it holds constant in sensitive patients as well as resistant patients. Is there anything that suggests that your response rate will hold up in later-line platinum-sensitive patients outside of what olaparib has shown?

Patrick Mahaffy

Well, what we’ve noted is that for patients who are platinum sensitive we get relatively modest diminution of effect based on a number of prior therapies, and you may recall that you’re right this population that we just described was 80% in patients who had three or more priors presented at ASCO a year ago I showed a 61% response rate. So, the drop off in response rate is not significantly when compared for instance to a normal chemotherapy dropout and drop off rate that you would expect to see of quite a bit more than that.

In platinum resistant patients they’re going to have a different responsiveness I think to all PARP inhibitors that's going to be more in the sort of 25% to 35% and for instance in the olaparib dataset from the Susan Domchek paper at ASCO they showed me that later line patients of 46% response rate in the platinum sensitive patients but a 30% response rate in the patients who described as platinum resistant or unsuitable for platinum therapies. So it's hard to know that they're all truly platinum resistant or whether a portion of them physicians just decided in the conduct of that study that the tolerability issues for platinum were such that they would rather put them on -- that they would not tolerate another round of platinum and put them on a PARP inhibitor. So in fact there is a difference and the reported response rates for platinum resistive versus platinum sensitive patients.

Operator

Thank you. Our next question will come from the line of Terence Flynn from Goldman Sachs. Your line is open.

Samir Siddhanti

It's Samir Siddhanti on for Terrence. Thanks very much for taking the question. Just two questions from our end. First, do you expect the FDA to convene and add comment to review rucaparib?

Patrick Mahaffy

I think it's too early in the review process for us to know. It is relatively less common for them convene and come for a single ARM study seeking an accelerated approval but of course that will be the FDA's decision. So it would too early for me to speculate.

Samir Siddhanti

And then the second question, what are your ex-U.S. plans for rucaparib? And when can we expect an update there?

Patrick Mahaffy

Our ex-U.S. plans include initially, well we will follow a regulatory path that is consistent with what we're following in the U.S. We'll file for approval in the treatment setting in the fall and pending data from ARIEL3, we would then intend to file for approval following those data in the maintenance setting which submission would probably be given the timeline run, would probably made some time in the first half of 2018. We have a modest commercial organization in Europe over the course of these next several quarters we will determine whether we feel -- we have the resources to take it forward whether we find some thoughtful partnership structure that allows us to continue to play a significant role but would involve using an organization already available to a possible partner. So more to come on that but we don't feel an urgency to do beyond what we're doing right now and so we don't -- we have the luxury of time.

Operator

Thank you. Our next question will come from the line of Caroline Palomeque. Your line is open.

Caroline Palomeque

Can you add a little more color on your launch preparations for rucaparib? And also on how you're thinking on -- about your pricing strategy. I just wonder if you could talk a little more about that? Thanks.

Patrick Mahaffy

We'll launch in the U.S. pending approval with our organization, it is largely fielded today. We're going to add about 10 additional territory managers to come up to the number that we want to be at launch when those positions are posted. So it will be a very comfortably sized oncology organization to all of our, the vast majority of other oncology focused organizations in the United States. We have not described our pricing strategy and would not intend to do so until we received approval.

Operator

Thank you. Our next question will come from the line of Kennen MacKay from Credit Suisse. Your line is open.

Kennen MacKay

Pat, you mentioned there was sort of a pre-specified number of BRCA positive patients based on your conversations with sort of the NDA package for the FDA. Is this sort of similar to a number of patients that Lynparza was approved on in the BRCA-positive population? And is that sort of irrespective of the number of lines of prior therapy these patients have had?

Patrick Mahaffy

That was based on a number of prior lines and it's a number that is roughly comparable it's a little over than the number in the Lynparza label but it's comfortable enough and it's frankly it's a number that we were provided by FDA.

Kennen MacKay

And then just based on your comment regarding the timelines on ARIEL3, you mentioned this was sort of based on a competitive PARP inhibitor that was out there. Just to be clear -- that was not based on sort of the rate of events accumulating in ARIEL3? Or that sort of did factor into it?

Patrick Mahaffy

We do not have knowledge of the event rate in ARIEL3, so this is very clearly based on an external factor.

Operator

Thank you. Our next question will come from the line of Steven Breazzano from Piper Jaffray. Your line is open.

Steven Breazzano

Maybe just a bigger picture one in ovarian cancer, how do you think about potentially using PARPs in the maintenance setting may impact later-line use of PARPs? And do you kind of see potential for retreatment with PARPs?

Patrick Mahaffy

So this is the question that is highly relevant that how this base will evolve. So, first of all as to retreatment we will I think share at the scientific meeting this fall early data on the cause of resistance to rucaparib from a small number, it’s not large, but a small number of patients in our trial or trials who have been re-biopsied. So we’re really looking forward to that because I think it's great science but I think it's really relevant science to this concept of retreatment. And what I think it largely suggests although it's not a definitive answer is that HARP therapy following PARP therapy in a patient who has progressed so it is not for tolerability issues but a patient who has progressed on their first PARP inhibitor is likely to yield very low at response rates because we understand this mechanism and it should relate to all PARP inhibitors, not just one.

Now there may be some nuanced patients where the differences in structure allowed to be to work or not, but for the most part I think most of us believe here and we want to test this in a trial that for one to be a re-challenged with a PARP inhibitor and have a chance of success there probably has to be an intervening round of a non-platinum based chemo like a Taxol and we have a proposal to do that study with some collaborators and are interested in -- if we can figure out a way to pursue it in pursuing that.

As to maintenance versus treatment I think this is going to be -- it's certainly a dialogue that we’ve been having and I’ve had personally with a number of investigators and KOLs. I think it is a fascinating dialogue about what is the best use and maybe in different patients what better uses, better and different use is worse for the way to think about treatment. So it is hard not to notice that PARP inhibitors come with a reasonable amount of toxicity particularly myelosuppression and there is always going to be a question about whether in a maintenance setting where we don't have evidence yet of survival whether the cost of that toxicity is worth it for PFS benefit. And in particular when you consider that the overall time for women on maintenance so let's say it’s 20 odd months is going to be, before she is going to go on some chemotherapy so she will favor a PARP inhibitors we just discussed.

And then you think about a woman who may have had from the recent trials six months of good quality of life that is both disease and drug free, but then gets the 10 to 12 or 13 months PFS on treatment that's the same number. And the question is going to be, who is appropriate for maintenance and for whom that we reserve the drug for the treatment setting. And look we had the huge study a 560 person study enrolled fully enrolled in maintenance, so we have pursued this too. But given the recent information and data, I think for really determined perhaps more fit younger patient maybe somebody who has young children fighting for the longest period of progression free survivable as possible maybe exactly what they and their physician, she and her physician chose to do.

Maybe a different story for the more reluctant patient a 65-year-old women whose children maybe adult who is much more focused doing this math and thinking about her quality of life and especially that interval where she can be both disease free and drug free. I can guarantee you that we'll be happy when we have our maintenance data, we're optimistic about it. But it will not be a one-size fits all, there will definitely be some patients and their physicians who prefer maintenance, but there will be definitely some who want that holiday and will until they have the treatment and the treatment option will of course be available to them. So this is going to be a fascinating dialogue that occurs over the course of the next not just one year but two years or three years, as physicians get used to best practice and probably segmenting patients for the choice of maintenance versus treatment.

Operator

Thank you. Our next question will come from Cory Kasimov from JPMorgan. Your line is open.

Whitney Ijem

This is Whitney on for Corey. First question was, I believe you had initially said you would provide us some update or topline data on the NDA data, or whatever went in with the NDA at the time you announced the NDA acceptance, or the filing acceptance. Is that still the case? Or now, with the ESMO presentation, will that not happen?

Patrick Mahaffy

I think it's still the case the people want to see it. It will be pretty abbreviated because we want to reserve the totality of it for ESMO, but we would expect to provide some information in that press release.

Whitney Ijem

And then on ARIEL3, have you disclosed how many events you need to trigger the PFS analysis? And then is there any -- are there any interims built into that trial?

Patrick Mahaffy

There were not interims and we have not disclosed the number of events that will trigger it.

Operator

And Roy Buchanan from Janney Montgomery, your line is open.

Roy Buchanan

I had a couple on the prostate cancer studies. About how big do you expect those studies to be? And then how many patients are expected to be BRCA mutant or ATM mutant?

Patrick Mahaffy

All of the patients in those studies will either be BRCA mutant or ATM mutant, the majority are going to be BRCA mutant. The single arm study is around 150 patients the comparative study is about 230 patients.

Roy Buchanan

Yes, sorry, I guess I meant how many patients out of the population are expected to be BRCA mutant or ATM mutant?

Patrick Mahaffy

Sorry about that.

Roy Buchanan

Yes.

Patrick Mahaffy

There is an enrichment that occurs for BRCA mutant patients, it turns out the diagnosis it is a diagnostic factor so there is an enrichment in these CPRC patients for BRCA. And then further, we’re just looking at some data the incidents of somatic mutations also increases based on line of therapy. I was meeting with one of our investigators who might have a slightly few population he thinks, but he thinks that about 25% to 30% of the CRPC patients are mutant BRCA or ATM. I think that’s high so that’s probably it doesn’t reflect the whole country but it's likely going to be in the 15% to 20% range from what we’ve seen publicly.

Roy Buchanan

And then Lynparza sold about $60 million in the first half. Does that concern you guys? Is it a function of the efficacy or physician education or something else? Do you guys have any thoughts on that?

Patrick Mahaffy

Well, we don’t really. I mean it has its advantages and disadvantages. We look forward to coming to the market with what we perceive to be advantages over that drug and we’re optimistic that as testing increases, as we think about adding an additional 10% of those ovarian cancer patients that are labeled through the inclusion of somatic mutations, we in addition to growing the market, will be addressing a patient population that Lynparza is not labeled for. So, we’re optimistic about the potential here.

Roy Buchanan

The ARIEL2 Part 2, was there a cap on the number of prior chemotherapies?

Patrick Mahaffy

In ARIEL2 Part 2, we allowed patients who had either three or four prior lines of therapy. So I guess that would describe a cap.

Operator

Thank you. At this time, I am showing no further questions. I would like to turn the conference back over to Breanna Burkart for any closing remarks.

Breanna Burkart

Thank you today for your interest in Clovis today. If you have any follow-up questions, please call me at 303-625-5023. This call can be accessed via replay of our webcast at clovisoncology.com beginning in about one hour and will be available for 30 days. Again, we appreciate your interest and time. Thank you and have a good evening.

Operator

Ladies and gentlemen, you may now disconnect. Everyone, have a great day.

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