TESARO's (TSRO) CEO Lonnie Moulder on Q1 2018 Results - Earnings Call Transcript

TESARO Inc. (NASDAQ:TSRO) Q2 2018 Earnings Conference Call August 2, 2018 4:15 AM ET

Executives

Jennifer Davis – Vice President-Investor Relations and Corporate Communications

Lonnie Moulder – Chief Executive Officer

Tim Pearson – Executive Vice President, Chief Financial Officer

Mary Lynne Hedley – President, Chief Operating Officer

Analysts

Steven Breazzano – Evercore

Srikripa Devarakonda – Citi

Gena Wang – Barclays

Peter Lawson – SunTrust

Allie Bratzel – Piper Jaffray

Laura Chico – Raymond James

Boris Peaker – Cowen

Kennen MacKay – RBC Capital Markets

Operator

Good afternoon, and welcome to the TESARO’s Second Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. As a reminder, this call is being recorded and webcast.

I’ll now turn the call over to Jennifer Davis, Vice President of Investor Relations and Corporate Communications at TESARO. Please go ahead.

Jennifer Davis

Thank you, Liz. Good afternoon, and thank for joining us today to discuss our recent business progress and TESARO’s second quarter 2018 operating results. With me here today, are our CEO, Lonnie Moulder; our President and COO, Dr. Mary Lynne Hedley; and our CFO, Tim Pearson.

Earlier today, we issued a news release detailing our results. Please note that this news release and the slide presentation that we’ll refer to during this conference call are both available in the Investors Section of our website, www.tesarobio.com.

Before we begin, I’d like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statement for any reason. The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings including our Annual Report on Form 10-K for the year ended December 31, 2017, and our quarterly report on Form 10-Q for the quarter ended March 31, 2018.

During today’s call, we may refer to certain non-GAAP financial measures that involve adjustments to GAAP figures. These non-GAAP financial measures are not a substitute for GAAP financial measures and are unlikely to be comparable to non-GAAP information provided by other companies. We believe non-GAAP measures may be useful to investors as a supplement to, but not as a substitute for the applicable GAAP number.

I’d like to turn the call over to Lonnie Moulder, CEO of TESARO. Lonnie?

Lonnie Moulder

Thank you, Jen, and thank you, everyone, for joining us this afternoon. I’ll begin by discussing a few highlights for the second quarter and the progress we are making with ZEJULA and our immuno-oncology pipeline. For Q2, ZEJULA global revenues totaled $54 million, which reflects continued execution on our launch strategies in both the U.S. and Europe. We also presented initial data for TSR-042, our anti-PD-1 antibody in MSI-high endometrial and non-small cell lung cancers at AACR.

And multiple presentations at ASCO this year highlighted data that support use of ZEJULA beyond BRCA mutated patients. Our immuno-oncology pipeline is advancing rapidly and is led by TSR-042, which is in a registration trial to support a BLA filing in the second half of 2019. 042 will form the foundation of our lung cancer strategy and is currently being studied in combination with ZEJULA; TSR-022, our anti-TIM-3 antibody; and TSR-033, our anti-LAG-3 antibody.

Turning to ZEJULA. More than 6,000 patients in the U.S. have been treated with ZEJULA since launch in April of last year. Nearly, all of its use is for ovarian cancer, where it has maintained a leading share of approximately 50% of PARP inhibitor treated patients for 15 months in a market with three competing agents.

In the second quarter, U.S. x factor unit demand for ZEJULA increased by low single digits sequentially and benefited from lengthening durations of therapy for patients on treatment. European demand for ZEJULA exceeded our expectations in the second quarter and reflect a strong uptake in Germany.

Focusing on the U.S., we observed the expected discontinuation of many remaining prevalent pull patients, the anticipated evolution to a greater percentage of patients refilling prescriptions at the 200-milligram daily dose and importantly, more moderate-than-expected growth of the PARP inhibitor class in the recurrent ovarian cancer maintenance setting. Approximately, 50% of patients are now at the 200 milligram dose, with the remainder evenly split between 300 and 100 milligrams, and we expect this dose distribution to remain relatively stable going forward.

Our market research indicates that the percentage of women receiving PARP inhibitor maintenance for recurrent ovarian cancer has remained in the range of approximately 30% to 35%. Maintenance treatment is a new paradigm in ovarian cancer, and many physicians are still using the prior standard of care of watch and wait after patients complete platinum chemotherapy. Following the landmark NOVA data and other successful maintenance studies, most gynecologic oncologist key opinion leaders understand the magnitude of benefit a PARP inhibitor can provide for patients and are working with us in collaboration to influence clinical practice behavior.

Medical oncologists treat approximately 70% of recurrent ovarian cancer patients, though many only see a few ovarian cancer patients per month and may take longer to adopt new treatment paradigms. Through several new initiatives, we are leveraging the support of physician thought leaders in the field of ovarian cancer to raise awareness and generate a call to action to ensure women can benefit from maintenance therapy. We are engaging community oncologists with peer-to-peer programs and launching additional tools to educate providers on several published data sets supporting active maintenance therapy.

Lastly, using PR channels and working with our patient advocacy partners, we are encouraging patients and their families to be proactive and ask their physicians about maintenance therapy. With approximately 50% of women with recurrent ovarian cancer receiving no maintenance therapy, or watch and wait, there remains a significant opportunity for growth. Both near-and long-term growth opportunities for ZEJULA remains significant, and we continue to expect the large majority of women with recurrent ovarian cancer to receive PARP inhibitor maintenance treatment over time.

Based on the more moderate uptake curve observed for PARP inhibitors in the recurrent maintenance market, we are updating our outlook for the second half of the year and now expect ZEJULA sales to grow approximately 10% quarter-over-quarter through the remainder of 2018.

Patient duration of therapy is increasing as expected, and today, over 20% of ZEJULA patients are now in their second year of therapy. We have a tablet formulation of ZEJULA on track to launch by 2020 that will enable us to fully recognize the value of each month of the ZEJULA treatment.

Over the next 12 months, our primary focus will be on driving adoption of maintenance treatment in the recurrent setting and preparing for the potential treatment label expansion for ZEJULA based on QUADRA data and on the PRIMA top-line results in the first-line maintenance setting that we expect late 2019. ZEJULA is approved in 33 countries. Our launch in Germany is going very well, and ZEJULA is now reimbursed in the UK and several other European countries, which reflects the hard work and dedication of our international team of nearly 150 associates.

In June, we announced ZEJULA was added to the Cancer Drugs Fund in England and Wales, which provides patients immediate access to ZEJULA, making it the first PARP inhibitor reimbursed for second-line ovarian cancer maintenance regardless of a BRCA status in the UK. We believe our initial experience with ZEJULA in Germany bodes well for planned launches in other countries. We have now surpassed 1,000 participants in our European Early Access Program, and we expect ZEJULA to be reimbursed and launched in all five of the largest European markets by 2019.

Looking ahead, we are focused on developing ZEJULA in gynecologic and lung cancers, which represent very large market opportunities beyond its current indication. We and others believe ZEJULA has promise in many other tumor types, and there are more than 25 studies ongoing or planned with ZEJULA in 10 different cancers that are being funded in part by collaborators and outside parties. We have a strong cash position, and with the expected growth in sales and licensing revenue, our cash utilization rate is expected to continue its decline as the cost of planned new studies is offset by decreasing expenses related to PRIMA and QUADRA.

With that, I’ll turn the call over our CFO, Tim Pearson, for a review of our second quarter 2018 financial results. Tim?

Tim Pearson

Thank you, Lonnie. For the second quarter of 2018, TESARO reported total revenue of $57.2 million compared to $29.4 million for the second quarter of 2017, primarily due to growth in ZEJULA net sales in the U.S. and the contribution from the launch of ZEJULA in Europe, which began in late 2017 in Germany.

Net revenue for ZEJULA totaled $53.9 million for the second quarter, an increase of 108% compared to the second quarter of 2017. European sales of ZEJULA have accounted for over 20% of total ZEJULA sales in the first half of the year. ZEJULA revenue is recorded net of estimated discounts, returns, chargebacks, rebates, co-pay and other allowances.

Cost of sales associated with product sales totaled $13.5 million for the second quarter and included $5 million of one-time expenses associated with new supplier implementation and equipment write-offs. Absent these charges, cost of sales associated with product sales would have been 15%, which is comparable to the 13% experienced in Q2 of 2017.

Research and development expenses increased to $97.6 million for the second quarter compared to $71.4 million in Q2 of 2017 as a result of higher costs associated with the development of ZEJULA as we reached full enrollment in our first-line ovarian trial, advancement of our immuno-oncology portfolio with TSR-042 in a registrational trial and initiation of immuno-oncology combination studies.

Selling, general and administrative expenses increased to $100 million for the second quarter compared to $93 million in Q2 of 2017 primarily due to increased sales and marketing and general and administrative headcount to support sales of ZEJULA in the U.S. and launches in Europe.

For Q2 2018, TESARO reported a net loss of $166.7 million compared to a net loss of $152 million for Q2 2017. As of June 30, 2018, TESARO had approximately $575.1 million in cash and cash equivalents, which reflects cash utilization during the second quarter of approximately $120 million, down from $140 million in Q1 of 2018. This cash utilization excludes the $200 million of debt drawn under the term loan facility and the $35 million upfront payment received in the third quarter from the divestiture of VARUBI.

Moving to 2018 guidance. We now anticipate full-year 2018 worldwide ZEJULA sales to be in the range of $225 million to $235 million and are providing guidance for third quarter worldwide ZEJULA revenue of $58 million to $62 million as a result of the factors Lonnie just described. With $109 million of full-year 2017 ZEJULA sales, the midpoint of our guidance range for full-year 2018 implies a growth of 111% year-over-year and approximately 10% sequential growth in the third and fourth quarters.

Other revenue, which includes licensing revenue and VARUBI oral sales in Europe is now expected to be in the range of $25 million to $30 million, which reflects the impact of the VARUBI divestiture in the U.S. and Canada, and a slight shift in timing for certain potential milestone payments from Janssen, which we now expect to receive in the first quarter of 2019.

Total revenues for the full-year 2018 are now projected to be $250 million to $265 million. We expect our cash utilization to continue to moderate for the remainder of the year and are reiterating our guidance for TESARO’s year-end cash and cash equivalents balance of approximately $400 million. This includes the $35 million payment we received in July upon closing of the VARUBI divestiture agreement with TeraSera, which offsets our revised ZEJULA revenue outlook.

With that, I’ll hand the call over to Mary Lynne for an update on our development programs.

Mary Lynne Hedley

Thank you, Tim. Our two foundational assets, ZEJULA and TSR-042, our anti-PD-1 inhibitor, form the basis for a development strategy focused on gynecologic and lung cancer that integrates our marketed and pipelined assets to maximize clinical benefit for the greatest number of patients living with these cancers.

As Lonnie indicated, our long-range plan includes the potential for sustained future revenue growth from use of ZEJULA and TSR-042 in combination with agents in the TESARO pipeline and from partnerships and collaborations. Today, ZEJULA is being studied in 10 tumor types, including prostate, breast, bladder and pancreatic.

In the NOVA study, ZEJULA demonstrated unsurpassed efficacy in patients with recurrent ovarian cancer, particularly, those with BRCA wild-type tumors. The QUADRA study recapitulated these findings in a treatment setting and provides further evidence for the importance of ZEJULA’s differentiating features and the benefit of ZEJULA to patients regardless of their BRCA status.

QUADRA represented a difficult-to-treat patient population with high unmet need. Two thirds were platinum resistant or refractory, 27% received niraparib as a fixed or later-line therapy and less than 20% of patients had BRCA mutations. Overall survival results of this trial were unprecedented. Median overall survival in the fourth-to sixth-line ovarian cancer from standard of care chemotherapy is reported to range from five to nine months. The median overall survival in QUADRA was 17.2 months.

QUADRA is now the second study to demonstrate that clinical benefit of ZEJULA extends beyond the patient population with BRCA mutations. Median overall survival was 15.5 months in the BRCA wild-type population and 26.5 months in the population with BRCA mutations. Given a more moderate uptake than expected in the use of PARP inhibitor maintenance therapy, data in this treatment setting could serve to further differentiate ZEJULA in an important patient segment, where other agents in the class are only approved in patients with a BRCA mutation. We are targeting submission of an FMDA in the fourth quarter and will seek to broaden the indication for ZEJULA to include the late-line treatment of patients beyond those with BRCA mutations.

Enrollment in PRIMA, a Phase III study designed to asses the effect of niraparib as a monotherapy in the first-line setting regardless of BRCA mutation, completed in the second quarter, and data readout is expected next year. Importantly, the study incorporated a 200- milligram starting dose of niraparib based on patient body weight and baseline platelet count. Blinded, pooled interim safety data from PRIMA were accepted for poster discussion presentation at ESMO in October and provide evidence that the 200-milligram starting dose results in a favorable tolerability profile.

As a reminder, clinical efficacy in NOVA was not compromised in patients whose dose had been reduced based on their individual tolerability profile. Beyond monotherapy, our ovarian strategy is supplemented by AVANOVA, a chemotherapy free randomized treatment study of niraparib versus niraparib plus bevacizumab for recurrent ovarian cancer patients, being conducted in collaboration with ENGOT. AVANOVA is fully enrolled, and data from this trial is expected next year in addition to data from OVARIO, the ongoing single-arm study of niraparib in combination with bevacizumab in the first-line ovarian cancer.

TSR-042 is a foundation of our integrated pipeline strategy to address gynecologic and lung cancer. To date, over 400 patients have been treated with TSR-042, which is administered via a patient- friendly dosing schedule of every three weeks for four doses and then every six weeks until disease progression. Data from approximately 25 patients with MSI-high endometrial tumors will be shared in an oral poster presentation at ESMO in October. An unexpected degree of clinical activity was observed in the MSS endometrial population and supported expansion of the cohort to include 100 evaluable patients, over two thirds of which have been enrolled to date.

Based on the data we are seeing to date, we now expect that recurrent endometrial cancer is a second potential opportunity for accelerated approval of TSR-042, and we’ll share data from this cohort of patients at a medical meeting next year. A BLA submission for TSR-042 is planned at the end of 2019. The combination of an anti-PD-1 with ZEJULA was studied in TOPACIO, and results from the two patient populations, platinum-resistant ovarian cancer and triple-negative breast cancer, were presented at ASCO. And with feedback from FDA in hand, we plan to initiate a single-arm registration study of niraparib in combination with TSR-042 in platinum-resistant refractory ovarian cancer and, should the data be supportive, seek accelerated approval to further expand the ZEJULA label.

Again, following receipt of FDA feedback, we have begun protocol development for our Phase III registration trial of niraparib in combination with TSR-042 versus standard of care in a biomarker selected patient population. We anticipate that data from the BRAVO study supporting single-agent activity of niraparib will be submitted for publication in the fourth quarter of 2018. TSR-042 is also being incorporated into FIRST, a Phase III randomized study of chemotherapy plus TSR-042 treatment followed by niraparib maintenance versus chemotherapy with niraparib maintenance alone in the first-line ovarian cancer setting. This trial is expected to start enrolling patients in September.

Finally, our Phase II JASPER study of ZEJULA and anti-PD-1 is ongoing in first-line non-small cell lung cancer patients. We are encouraged by the data thus far and intend to present these results at a medical meeting in the first half of next year. TSR-042 monotherapy is being studied in GARNET in patients with second-line non-small cell lung cancer. This cohort is completely enrolled and includes 67 patients who are PD-1 naive and have progressed following chemotherapy. Based on the PD-L1 testing completed to date, the vast majority of these tumors are PD-L1 low. Yet interestingly, the response rate remains competitive with data from marketed anti-PD-1 antibodies in the second-line setting. These data have been submitted to SITC.

Early next year, we intend to initiate a Phase II registration enabling study of TSR-042 versus standard of care in the first- line lung cancer setting and look forward to sharing additional details on the trial design once the study is initiated. Our pipeline is further integrated by combination studies of TSR-042 with earlier pipeline assets. AMBER, a combination study of TSR-042 and TSR-022 our anti-TIM-3 antibody, is being studied in late-line non-small cell lung cancer patients who have progressed after an anti-PD-1 and typically many lines of chemotherapy.

We anticipate presenting data from at least 25 patients from the lung cohort of AMBER at SITC this year, and are encouraged that, despite the fact that we have not yet reached a dose of TSR-022 that achieves full receptor occupancy over the dosing period, we are observing clinical activity. Our data readouts for 2018 continue as planned. We have two accepted poster discussion presentations at ESMO for the PRIMA and GARNET trials and have submitted multiple abstracts to SITC that include data from GARNET, AMBER and CITRINO, our TSR-033 monotherapy study.

Multiple data readouts and milestones are also planned for 2019. In the setting of gynecologic tumors, we anticipate QUADRA label expansion, AVANOVA and PRIMA top line data and a BLA submission for TSR-042. Our lung cancer strategy will be further informed with several data readouts from three ongoing studies, JASPER GARNET and AMBER.

And with that, we’d now like to open the call for questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions]. Our first question comes from the line of Steven Breazzano with Evercore. Your line is now open.

Steven Breazzano

Hi, thanks for taking my question. Do you have the breakdown in sales for ZEJULA between the U.S. and EU? And second, what do you think it’s going to take to grow the second-line maintenance setting for PARPs broadly going forward? Seems like market share increases have kind of stalled out. Thanks.

Lonnie Moulder

Thanks for the question, Steven. As we stated, the first half of the year resulted in just over 20% of sales from Europe, and as far as the penetration into recurrent maintenance, we’ve seen, so far, in Europe, as I said, a very strong uptake in Germany, and there’s greater penetration in the recurrent maintenance setting there than there is in the U.S. And you would ask yourself, well, you’ve only launched in December, how is that? Well, if you look back on the experience in Europe, it’s been over three years since LYNPARZA was launched in a BRCA mutated recurrent maintenance setting. So the maintenance paradigm had been well established. Here in the U.S., we’re just about a year, just over a year into establishing this paradigm. As you may recall, when we first launched, there was rapid uptake. A lot of that was a prevalent pool. But we actually, within the first several quarters, got to almost a 25% penetration into the maintenance setting with the PARP inhibitor class.

In the first quarter, it was closer to 30%, 35%, and it’s still 30% to 35%. So clearly, there’s a need to expand that. And as I said earlier, this is sort of a surprise for the key opinion leaders. I mean, every doctor who treats ovarian cancer pretty much uses a PARP inhibitor in maintenance. So over 90% do. But it’s the depth of their use. And it’s especially in the medical oncologist setting, as opposed to the gyn/onc setting, where these physicians only see a handful of ovarian cancer patients.

And the top-of-mind nature of preparing for once the patient finishes their chemotherapy and their response, to immediately move them to maintenance isn’t there. And that’s what we have to change. And we’re making the investments and really doubling down on the collaborations with the leaders in the field, the key opinion leaders, the leading patient advocacy groups to initiate a real call to action. It’s unfortunate, because we all know from three randomized Phase III studies that without maintenance, these women will progress in four to six months. And that’s unfortunate. So it’s up to us and, frankly, our competitors in the field, to change this paradigm. And we know it will happen. It’s going to be a different uptake curve than we initially anticipated, but it will get there.

Steven Breazzano

Thanks.

Operator

Our next question comes from Robyn Karnauskas with Citi. Your line is now open.

Srikripa Devarakonda

Hey, guys. This is Srikripa on for Robyn. So, I was wondering now, that you have another quarter with a data whether you can help us understand what the current duration of therapy is in second-line maintenance? And if there’s – this is – you talked about earlier that there will be a point where healthier patient starts will outgrow the sicker patients. Is this the inflection point? Or do you think we have to wait a little bit longer to see that inflection point? Thank you.

Lonnie Moulder

Yes. Excellent questions. As mentioned, 20% of our patients have now been on ZEJULA for over a year. The exact number of duration would be hard to calculate, frankly. It’s not a year, and it’s clearly more than six months. It’s more than it was two quarters ago. It just needs to be because of the many prevalent patients, who were either late-line treatment, which inherently have somewhat lesser of a duration than if they received the drug for maintenance or patients who were eligible for maintenance, in that they were in response to platinum, but had not started ZEJULA for many, many months after their platinum response.

So those patients had shorter durations. With that sort of washing out, as I suggested earlier in the second quarter, we should, going forward now, experience patients who are weekly incident patients that are coming off their platinum, they’re ready for maintenance, they take ZEJULA and they’re going to get the full benefit, which should approach the 12 months. And over time, the percentage of patients that are receiving ZEJULA greater than 12 months will exceed the 20% we are now observing. So that’s a really important dynamic. That has to happen to really – to grow the brand the way we anticipate it will grow in the long-term.

Srikripa Devarakonda

Okay, great. Thank you.

Operator

Our next question comes from Gena Wang with Barclays. Your line is now open.

Gena Wang

Thank you for taking my questions. First question also regarding the revenue, just wondering this quarter, any change in terms of the inventory stocking, destocking?

Lonnie Moulder

Not at all. It’s in our normal range.

Gena Wang

Okay, okay. And then, I think that, Lonnie, you also commented a lot on how to grow the market, PARP inhibitor overall in the maintenance setting. So just wondering, for the next several quarters, do you expect the growth mainly from extending to the new patients or from the geographic growth from the other, ex-U.S.?

Lonnie Moulder

We expect approximately 10% growth for each of the U.S. and Europe over the next two quarters.

Gena Wang

Okay, okay. And just one last question regarding the AMBER data at the SITC. Just wondering if you could give us a little bit more color regarding number of the patients and the possible duration of the treatment?

Mary Lynne Hedley

Sure. We anticipate having about 25 patients from the lung cohort that will be presented – well, have been submitted for presentation at SITC.

Gena Wang

Okay. Should we expect some meaningful update at the abstract release?

Mary Lynne Hedley

We’ll present the data during the presentation, and the abstract contains general information at this point.

Gena Wang

Okay. Thank you.

Operator

Our next question is from Tazeen Ahmad with Bank of America. Your line is now open.

Lonnie Moulder

Hello, Tazeen.

Operator

You may be on mute. Our next question comes from Peter Lawson with SunTrust. Your line is now open.

Peter Lawson

Lonnie, I wonder if you could kind of triangulate for us around prostate, how it’s working with J&J. And if there’s anything that we can read into that pushback around the milestone from J&J?

Lonnie Moulder

No. I wouldn’t read anything into that moving a few months. It’s just forecasting when certain things will happen from an enrollment standpoint. But for the initial program, J&J – Janssen has stated that they intend to have regulatory filings next year. And that is the plan.

Peter Lawson

And then for the lung GARNET study, how should we be thinking about that? And what could we see ORR, PFS? And where do you think the PARP benefit comes into play, whether it’s PFS or if it’s much longer in OS?

Lonnie Moulder

And I’ll refer that question to Mary Lynne. You mentioned GARNET, which is the TSR-042 study, Peter, and we can address that. And the JASPER study is that niraparib/042 combo, which were you referring to?

Peter Lawson

Yes. Sorry, the JASPER.

Lonnie Moulder

Okay.

Mary Lynne Hedley

Sure. So, the JASPER study is, as Lonnie pointed out, a combination study of ZEJULA and PD-1 antibody, and we’re encouraged by what we’re seeing. And primarily, at this point, it’s response rate related. It’s a little early for other stuff.

Peter Lawson

Got it, thank you. And then just finally, just Lonnie, on that 10% growth rate in Europe, why so low in Europe? For the rest of the year 10% quarter-over-quarter.

Lonnie Moulder

I wouldn’t say that’s low. If you consider, the way that Europe grows is when you layer – you have an initial uptake. We’ve had strong uptake, and we’ll continue to see growth in Germany. And we need to layer other countries in. And we’re going to layer those other countries in as described earlier by the middle of next year, meaning we have France to come up yet, we have Italy to come up yet, we have Spain to come up yet. So it’s a launch process over a period of time to bring those countries up. And then when each one comes up, then you get a – sort of a more substantial growth for a period of time. And then they begin to move to a steadier pattern. And that’s just where we are right now. We’ve been in the market now in Germany for a while, and we’ve had really significant penetration.

Peter Lawson

Okay. Thanks for taking the questions.

Operator

Our next question comes from Chris Raymond with Piper Jaffray. Your line is now open.

Allie Bratzel

Hi. This is Allie Bratzel on for Chris. Thanks for taking the question. Just a question on PARP class dynamics. I think you guys have said that, longer term, you expect PARP penetration in the recurrent setting will eventually hit about 80%. So, I guess, with the more moderate PARP uptake you’re seeing now, just remind us what assumptions about PARP penetration you included in your longer-term 2021 guidance and just how we should be thinking about that? Thanks.

Lonnie Moulder

And we haven’t provided updated guidance for 2021, but directly addressing your question, we don’t anticipate any change in the ultimate PARP penetration in maintenance; it’s the trajectory. Obviously, we have a diminished, sort of, area under the curve based on the trajectory we’re now seeing to get there. But the PARP inhibitor class will get there. It’s a curve that doesn’t look like a new class of drugs in cancer in the treatment setting, where we’re rapidly – where you’re treating patients who are rapidly progressing.

This is a different paradigm, and it’s a slower uptake. But it will get there. And as we think about it, it’s not just recurrent maintenance, of course, in the – with the PARP class; we also have the first-line maintenance setting. We have combinations that would take first-line maintenance and even increase durations. We obviously have the treatment opportunity. Now that actually may be a bigger treatment opportunity along the way. And we have the potential in platinum-resistant ovarian cancer.

So all lines of therapy, monotherapy, combination therapies, to completely cover the field, including in the recurrent setting, a chemo-free regiment with AVANOVA, which is bevacizumab and ZEJULA. So the dynamic between now and 2021 and beyond is significant for this class of agents and for ZEJULA specifically. But in looking at the recurrent setting and what we said about the likely penetration for – by 2021, we still stand by that. The class will get there.

Allie Bratzel

Thank you.

Operator

Our next question comes from Laura Chico with Raymond James. Your line is now open.

Laura Chico

Hey, thanks for taking the questions. Lonnie, I just wanted to follow-up on an earlier question related to maintenance. I guess, you mentioned the medical oncologists. Is there something specific or maybe something more you could elaborate that’s kind of keeping them on the sidelines in terms of utilizing maintenance therapy? And is this a case where we just simply need additional data? Or I guess, if you could elaborate a little further there, that’d be helpful.

Lonnie Moulder

Yes. It’s not data. We have the data. It’s the communication of the data. It’s the – some of it is just continuing the fundamental approaches to educating and communicating the benefits of a class of agents and a specific product. Medical oncologists are quite busy. Most generalists in that field will manage a lot of lung cancer patients, a lot of breast cancer patients, lymphoma patients. They’ll see an occasional ovarian inpatient, and to be ready, to be poised to deliver maintenance once that patient’s in response from the platinum is something new for them. This – it needs to be updated in their care management plans, in their electronic medical records system. There’s a lot of obstacles. So it’s just doing the blocking and tackling over and over again with them. It’s not resistance in the truest sense. And there are a number of medical oncologists that are already big users. It’s just a longer process than what we anticipated.

Laura Chico

Okay, that’s helpful. I guess just one quick follow-up, and I’m not really sure if I have this correct or not, but I think you recently released a 30-count bottle for ZEJULA? And I’m just wondering if there’s any potential impact in terms of effect on net pricing that we should be thinking about there.

Lonnie Moulder

The launch of the 30-count bottle, of course, relates to the fact that many of our patients, and as I described earlier, half receive 200 milligrams and about a quarter, received 100 milligrams, will either get a single 30-count bottle if they’re a 100-milligram patient or two 30-count bottles if they’re a 60 – a 200-milligram daily patient. So, it actually provides more efficiencies to the specialty pharmacies and the in-office dispensing pharmacies and hospital pharmacies that manage this. Any impact from a pricing standpoint would have to happen over time, and we’re not predicting exactly what that’ll be.

Laura Chico

Okay. Thanks very much.

Operator

Our next question is from Boris Peaker with Cowen. Your line is now open.

Boris Peaker

Great. Thanks for taking my question. I just want to probe, as you do more market research with physicians, both academic and community docs, do you find them to have more or less interest in treating non-BRCA mutant in the front-line maintenance setting?

Lonnie Moulder

Yes. So, Boris, you’re looking at the front-line maintenance setting. The – we do some market research. The other thing we do, of course, is have advisory boards with key opinion leaders. And of course, since we’re in the front-line maintenance setting with trials, we had investigator meetings, we have a steering committee, so we get a lot of input as to what their thoughts may be about front-line maintenance. And the one controversy that does come up relates to those patients that have what you might refer to as microscopic disease. Patients that – or no evidence of disease. Patients that actually may have an opportunity for a cure for their front line. And that’s where there’s a question mark. What will the benefit be? And that patient population could approach 20%.

Now you may know, in our PRIMA trial, we tried to, with our inclusion/exclusion criteria, not enroll those. Because we wanted to enroll the patients where we believe, from our earlier market research, that it would actually be actionable. That clinicians would say this is a population that is more likely to recur in a reasonable amount of time and could benefit from the drug regardless of their BRCA status. So there’s not controversy, at least in the dialogue we’ve had around BRCA status. It’s more about whether you’re talking about patients who otherwise could have been cured, and we think we addressed that in our PRIMA trial criteria.

Boris Peaker

I guess, I’m just – what I’m probing towards is the fact that it seems that the initial market research kind of overestimated the adoption in general, not just for you guys but for the entire class in the second-line maintenance setting. And I just want to know what we could learn from a first line, whether the docs want to be more aggressive earlier on? Or are they are thinking of this drug class as something to reserve for later as is when necessary, perhaps on second- or third-line progression?

Lonnie Moulder

Yes, good question. Let’s back up here. Actually, our initial market research is much more aligned with where we are today. Our internal forecast last year was substantially less than what we actually sold. What happened last year was, in the first quarter of launch, the trajectory was substantial. And after the second quarter, we had penetrated way more of the recurrent ovarian cancer market than we had anticipated or projected based on our market research. And as we got into the third quarter, to launch the fourth quarter, the trend was still pretty good. We got into January, and January looked great. So we had this trajectory which exceeded all of our expectations and our internal forecasts.

So actually, where we are now is about what we had originally anticipated over a year ago. Unfortunately, we got a little ahead of ourselves based on what we were seeing in actual results, in actual prescribing and penetration of the category as we got into early this year and then provided our guidance. So I don’t think it’s quite the dynamic you’re asking about.

Now I believe, and I think the other people in the field believe and the key opinion leaders believe that this trajectory is not at all indicative of where this class will get some day in recurrent maintenance. And in the front-line maintenance, it’s going to be based upon the data set. If it’s a meaningful – clinically meaningful data set that’s produced, I think the momentum will be there for front-line maintenance use also. It’s what it’s going to do for patients. And we know what we’re doing for patients in recurrent. It needs to be used more, and it will get there.

Boris Peaker

Great. Thank you for taking my questions.

Lonnie Moulder

Sure.

Operator

And our last question comes from Kennen MacKay with RBC Capital Markets. Your line is now open.

Kennen MacKay

Hi, thank you for squeezing me in and taking the questions. I’m just wondering, with the implied growth in Europe, or implied share in Europe, it seems like U.S. sales might be in decline a little bit. I was wondering if you could confirm that? And then secondly, I was wondering if you could help us with the average dose that’s getting prescribed in Europe versus the average in the U.S. Just in terms of sort of the split between that 50%, 25%, 25%.

And then lastly, going back to, Lonnie, what you’d mentioned about the recurrent maintenance cancer market being about 30% to 35% penetrated. I’m just wondering if you had any data as to how that was split by biomarkers. Is that sort of 100% penetration into BRCA positive and nothing beyond that? Or is it sort of evenly split amongst BRCA or BRCA/HRD and truly wild-type patients?

Lonnie Moulder

That’s a good question. You may have missed the formal portion of the call. What we said was that there was low single-digit growth in the second quarter. We described that. So of course, there was no decline. As far as the dose, we also described the dose, of course, in the U.S., and I know you’re well aware of that, Kennen. We’re seeing similar dosing in our European experience. Obviously, there’s a time course here. We had a greater propensity of 300-milligram dosing earlier in our launch. And now we’ve settled into what was actually observed in the Phase III NOVA study.

Now, that was a six-month head start over where we launched in Germany, and what we’re seeing in Germany is the same migration towards what is the predicted dosing split based on NOVA. So Europe’s going in the same direction. As far as the uptake, the uptake in the BRCA mutated population with recurrent maintenance is greater for PARP inhibitors than what it is in the wild type. As you know, HRD is not routinely tested. I mean, there’s some academic institutions that do some testing, but it’s BRCA wild type and BRCA mute that we measure. And the uptake is different. There’s a greater opportunity to bring the BRCA wild type up to where BRCA mute is and then bring them both up. And obviously, we have the data sets to do that.

Kennen MacKay

Got you. Thank you very much for taking my questions.

Operator

And I’m showing no further questions in queue at this time. I’d like to turn the call back to Mr. Moulder for closing remarks.

Lonnie Moulder

Well, thank you all for joining us this evening and we look forward to providing updates in the not-too-distant future. And I hope to see some of you at ESMO and SITC, and have a good evening. Bye now.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program and you may now disconnect. Everyone, have a great day.