Puma Biotechnology Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 3, 2023

There are 8 speakers on the call.

Operator

Good afternoon. My name is Victoria, and I'll be your conference operator today. At this time, all participants are in a listen only mode. After the speakers' formal remarks, there will be a question and answer session. As a reminder, This call is being recorded.

Operator

I would now like to turn the conference call over to Marianne Ohanesian, Senior Director of IR for Puma Biotechnology, you may begin your conference.

Speaker 1

Thank you, Victoria. Good afternoon, and welcome to Puma's conference call to discuss our financial results for the Q2 of 2023. Joining me on the call today are Ellen Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology Maximo Nougues, Chief Financial Officer and Jeff Ledwick, Chief Commercial Officer. After market close today, Puma issued a news release Detailing Second Quarter 2023 Earnings Results. That news release, the slides that Alan and Jeff will refer to and a webcast of this call are accessible via the homepage and Investors sections of our website at pumabiotechnology.com.

Speaker 1

The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today's conference call will include statements about the company's future expectations, plans and prospects that constitute forward looking statements for purposes of federal securities laws. Such statements are subject to risks and uncertainties, and actual events and results may differ from those expressed in these forward looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports Filed with the SEC from time to time, including our Annual Report on Form 10 ks for the year ended December 31, 2022. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this live conference call, August 3, 2023.

Speaker 1

The company undertakes no obligation to revise or update any forward looking statements to reflect events or During today's Call, we may also refer to certain non GAAP financial measures that involve adjustments to our GAAP figures. We believe these non GAAP metrics Maybe useful to investors as a supplement to, but not a substitute for our GAAP financial measures. Please refer to our Q2 2023 news release for a reconciliation of our GAAP to non GAAP results. I will now turn the call over to Alan.

Speaker 2

Thank you, Mary Anne, and thank you all for joining our call today. Today, Puma reported total revenue for the Q2 of 2023 of $54,600,000 Total revenue includes product revenue net, which consists entirely of NERLYNX sales as well as royalties from our sublicensees. Product revenue net was $51,600,000 in the Q2 of 2023, which represents Increases as expected from $46,800,000 reported in Q1 2023 and $51,300,000 reported in Q2 2022. Product revenue for the Q2 of 2023 Was impacted by approximately $1,500,000 of inventory drawdown at our specialty pharmacies and specialty distributors. Royalty revenue was $3,000,000 in the Q2 of 2023 compared to $6,000,000 in Q1 2023 and $8,200,000 in Q2 2022.

Speaker 2

We reported 3,022 bottles of NERLYNX sold in Q2 of 2023, An increase of 173 from the 2,849 bottles sold in Q1 of 2023. As I noted on last quarter's call, we estimate that inventory increased by about 164 bottles in Q4 'twenty two And then subsequently declined by about 2 36 bottles in Q1 of 2023. In Q2 2023, we estimate that inventory was further reduced by about 89 bottles. In Q222, 2023, new prescriptions or NRx were down approximately 12.5% Compared to Q1 2023 and total prescriptions were up approximately 0.4% compared to Q1 of 2023. Jeff will provide further details in his comments and slides.

Speaker 2

I will now provide a clinical review of the quarter, then Jeff Ludwig will To add additional color on DERLYNX commercial activities, Maximo and Noguez will follow with highlights of the key components of our financial statements for the Q2 of 2023. In our investor call in October 2022, we announced that we had in licensed the anticancer drug alisertib from Takeda. In clinical trials to date, alisertib has shown single agent activity and activity in combination with other cancer drugs in the treatment of many different types of cancer, including hormone receptor positive breast cancer, triple negative breast cancer, small cell lung cancer and head and neck cancer. The drug has also shown previous clinical activity In clinical trials in peripheral T cell lymphoma and non Hodgkin lymphoma, Takeda's previous clinical development plan with alocertib was extensive And due to this, there is a large well characterized clinical safety database with over 1300 patients who are treated across 22 company sponsored trials. In terms of the prior experience in small cell lung cancer, as is shown on the slide, alacertib is was previously In a Phase 2 trial that was previously published in Lancet Oncology.

Speaker 2

In this trial, alosertib was tested as a single agent in several cohorts In the small cell lung cancer cohorts, the study design involved the administration of ulcerative monotherapy To patients with small cell lung cancer who had previously received up to 2 prior cytotoxic regimens in the metastatic setting, Patients were administered Allocertib monotherapy at a dose of 50 milligrams BID for 7 days followed by a 14 day break. As you can see in the table on the right of the slide, in patients with chemotherapy sensitive disease, alisortib resulted in a response rate of 19% And a duration of response of 3.1 months. For the patients with chemotherapy refractory or chemotherapy resistant disease, alacertin resulted in a response rate of 25% and a duration of response of 4.3 months. We note that the results in patients with chemotherapy resistant disease Compare favorably to results with recently approved drugs in chemotherapy resistant small cell lung cancer. As you can see on the slide, you can see the waterfall plot for the patients treated in the trial with small cell lung cancer treated with alacertib monotherapy.

Speaker 2

On this slide, the light blue bars represent the chemotherapy sensitive patients and the red bars represent the chemotherapy refractory or resistant relapsed patients. On this slide, you can see the adverse events in the trial. The AEs for elocertib are similar to what one would expect for a drug that The main Grade 3 or higher AEs in the trial were neutropenia, anemia, leukopenia and thrombocytopenia. Alosertib was also tested in a randomized double blind placebo controlled Phase 2 trial of paclitaxel plus alicertib versus paclitaxel plus placebo in patients with second line small cell lung cancer. This trial was published in the Journal of Thoracic Oncology in 2020.

Speaker 2

Alicertib was dosed at a different dose than in the monotherapy trial With alacerta being administered at 40 milligrams BID for 3 weeks on days 1 to 3, 8 to 10 and 15 to 17 Plus paclitaxel dosed at 60 milligrams per meter squared IV on days 1, 8 and 15. The comparator arm received placebo plus paclitaxel With paclitaxel dosed at 80 milligrams per meter squared IV on days 1, 8 and 15 in 28 day cycles. Randomization was stratified by type of relapse after primary treatment based on the common definition For each type, with sensitive defined as relapsed greater than 90, but less than 180 days after primary treatment And resistant or refractory defined as relapsed less than or equal to 90 days after primary treatment. The protocol was initially written by the sponsor To record relapsed type at the time from initial response, a protocol amendment was done approximately one way through the trial, Which corrected the stratification definition of relapse type after primary therapy, so that relapses were recorded From last administration of platinum based chemotherapy, which is in line with the NCCN treatment guidelines and clinical treatment practice rather than from initial response. To maintain balance at the primary endpoint of PFS was analyzed using the original stratification definition of relapse type.

Speaker 2

However, sensitivity analysis, which used the corrected stratification definition was also performed. The trial also incorporated an extensive biomarker analysis With a pre specified analysis of c MYC expression measured by immunohistochemistry and a retrospective analysis of genetic alterations in ctDNA with clinical outcome. As is shown on the slide, the primary endpoint in the trial was progression free survival or PFS. For the intent to treat population, the hazard Ratio using the original definition was 0.77 with a p value of 0.113. Using the corrected definition, the hazard ratio was 0.71 with a p value of 0.038.

Speaker 2

For the patients with chemotherapy resistant or refractory larydolapse, the hazard ratio was 0.66 with a p value of 0.037. For the ITT population, the OS showed a hazard ratio of 0.87 with a p value of 0.714 And using the corrected definition, the hazard ratio is 0.79 with a p value of 0.209. As previously mentioned, there was an extensive biomarker analysis done in the trial with prospective testing for C MYC. For the patients in the trial who were found to be IHC positive for CMIC expression, the hazard ratio in the trial was 0.29 With immediate PFS for the paclitaxel plus alicertib arm of 4.64 months and immediate PFS for the placebo plus paclitaxel arm of 2.27 months. The trial also incorporated analysis of patients with alterations in cell cycle genes, including CDK6, RBL1, RBL2 and RB1.

Speaker 2

Of note, RB1 mutations were the most frequent mutation Approximately 60% of the patients having RB1 mutations, while the CDK6, RBL1 and RBL2 mutations We're found with very low frequency. As shown on the slide for patients with cell cycle mutations, the PFS in the paclitaxel plus alacertib arm was 3.68 months, while the placebo plus paclitaxelarm was 1.8 months and the hazard ratio was 0.395 The p value of 0.003. The overall survival in the subgroup patients was 7.2 months for the ulcerative arm And 4.47 months for the placebo arm with a hazard ratio of 0.427 and a p value of 0 point 8 5. Slide 8 shows the AE profile for the trial. Higher rates of Grade 3 or higher AEs were seen in the alacertibone for neutropenia, anemia and decreased neutrophil count, which should be expected based on the prior Phase 2 trial of allocertib monotherapy.

Speaker 2

There were also 4 drug related fatalities in the trial due to neutropenic sepsis, sepsis, febrile neutropenia and septic shock. Puma recently met with the FDA to discuss the clinical development plan for alacertib in small cell lung With the intent of exploring the possibility of an accelerated approval pathway for alacertib in small cell lung cancer. The previous randomized Phase 2 trial of paclitaxel plus alisertib versus paclitaxel plus placebo demonstrated that in biomarker focused subgroups, The combination of Alucerta plus paclitaxel demonstrated a PFS and OS advantage compared to paclitaxel plus placebo. However, similar biomarker analyses were not performed in the previous monotherapy trial in patients with small cell lung cancer. Hence, the efficacy of alacertib monotherapy in these biomarker subgroups is unknown.

Speaker 2

In The study name is Puma ALI-four thousand two hundred and one, which is shown on Slide 9. The trial will enroll up to 60 patients With extensive stage small cell lung cancer, who've progressed after first line platinum based chemotherapy and immunotherapy. Patients must provide tissue based biopsies so that biomarkers can be analyzed and Allocertib will be dosed at 50 milligrams BID on days 1 through 7 of every 21 day cycle. Puma plans to perform an interim Analysis for the evaluation of the biomarkers as well as an evaluation of the efficacy. Once the FDA determines the study is safe to proceed, Puma will seek to initiate this trial in the second half of twenty twenty three.

Speaker 2

As is shown on Slide 10, the primary endpoint of the trial will be objective response rate with secondary endpoints of duration of response, disease control, progression free survival and overall survival. The company will also be looking at each of these endpoints within selected pre specified biomarker subgroups as well as to assess whether there is better efficacy seen in any biomarker subgroup. The goal would be to correlate the efficacy in these biomarker subgroups To the efficacy that was previously seen in the biomarker subgroups from the randomized trial of paclitaxel plus alacertib Published in the Journal of Thoracic Oncology. If there is alignment between the 2, the company believes it could represent a potential accelerated approval strategy. As is seen in Slide 11, Puma will be performing its biomarker analysis of the ALI-four thousand two hundred and one trial in patients I'm sorry, in parallel with the execution of the clinical trial.

Speaker 2

Again, the goal here will be to look at the efficacy of alacertib monotherapy and biomarker subgroups And correlate that to the efficacy seen in the same biomarker subgroups in the paclitaxel plus alicertib randomized trial. As is shown on the slide, The company anticipates meeting with the FDA once it has performed this analysis to explore the potential for an accelerated approval pathway for alacertib in small cell lung cancer. We continue to anticipate that there will be several clinical milestones for the Allo Serta program in the coming months. This includes potentially initiating the Phase 2 clinical trial of ulcerative in small cell lung cancer before the end of the year, Conducting a meeting with the FDA to discuss the clinical development and registration pathway for alacertib in hormone receptor positive HER2 negative Breast cancer in the Q4 of 2023 and reporting data from an ongoing investigator sponsored Phase III trial of alacertib plus pembrolizumab In the treatment of patients with RB deficient head and neck squamous cell cancer in the second half of this year. As mentioned on prior earnings calls and in response To investor questions, Puma continues to evaluate several drugs to potentially in license that would allow the company to diversify itself and leverage It's existing R and D, regulatory and commercial infrastructure.

Speaker 2

The company will continue to keep investors updated on this as it progresses. I will now turn the call over to Jeff Ludwig, Puma's Chief Commercial Officer, for a review of our commercial performance during the quarter.

Speaker 3

Thanks, Alan. Appreciate it. And thanks, everyone, for joining our Q2 earnings call. Before I move into the commercial review, Just a reminder that I will be making forward looking statements. Let me start with just a brief overview of our commercial strategy.

Speaker 3

We remain largely focused on the extended adjuvant indication where we believe there continues to be significant unmet need, Especially for patients at higher risk of recurrence. We are continuing to refine our targeting for both our personal and non personal promotion with the goal of being more efficient and more effective with our given resources. In addition, the team continues to look for opportunities to expand our engagement with local and regional advocacy groups, Ultimately, to better educate and support patients throughout their treatment journey. We believe NERLYNX is a promotionally sensitive product are happy to see that our teams are making progress increasing our reach and frequency with HCPs. With that said, oncology is still a very restricted therapeutic area from an standpoint and getting in front of customers at the right time can be more important given the various treatment decisions and the overall duration of treatment.

Speaker 3

Our sales and marketing teams are working closely together with the goal of driving sustained improvements in our reach and frequency And increasing engagements that are deemed valuable and motivating. With that high level update, let me transition to some of the U. S. Commercial slides where I will provide some additional insights. Once I have finished, I will turn the call over to Maximo for a more detailed review of our financial results.

Speaker 3

Slide 3 provides an overview of our distribution model. This model has not changed and remains separated into 2 distinct channels provide NERLYNX to patients. We refer to these two channels as our specialty pharmacy channel and our specialty distributor channel. Most of our business continues to flow through the specialty pharmacy channel, but we have seen a continued increase in the percent of business flowing through the SD channel. In Q2 of 2023, approximately 26% of our business went through the SD channel.

Speaker 3

This is Slightly up from the 25% we reported in Q1 of 2023 and higher than the 21% we reported in Q2 of 2022. Turning to Slide 4, NERLYNX net revenue in Q2 of 2023 was $51,600,000 which represents both year over year And quarter over quarter growth. More specifically, NERLYNX net product sales increased about $300,000 from Q2 of 2022 And increased about $4,800,000 from Q1 of 2023. Inventory changes clearly have an impact on these numbers, so let me give you some additional insight, As a comparator, we estimate that inventory increased by about $2,700,000 in Q2 of 2022 and decreased by about $3,800,000 And also provides both a year over year and a quarter over quarter comparison. In Q2 2023, NERLYNX ex factory bottle sales were 3,022, which represents about a 6% quarter over quarter growth And about a 6% year over year decline.

Speaker 3

Now let me again provide more specifics around the inventory impact, which is also included at the bottom of this slide. We Let me pause and take just a moment to provide some additional insights into the business. Starting with demand, We are pleased with the fact that we saw demand grow approximately 2.9% year over year and about 0.7% quarter over quarter. The SP channel was slightly positive for both metrics, more precisely about 0.5% growth year over year and about 0 point 2% growth quarter over quarter. But the SD channel was the real driver of this growth.

Speaker 3

The SD channel grew approximately 12% year over year And 2.6% quarter over quarter. I want to remind investors that we do not pick up new prescription or NRx or TRx data in the SD channel, So we do not have the same level of visibility for patients that start and stay in this channel as we do in the SP channel. Turning to NRx and TRx. In Q2, we saw a quarter over quarter decline in NRx of about 12.5% And a year over year decline of about 4.1%. As we have discussed on previous calls, we have seen a consistent pattern since launch Where NRx growth is positive in Q1 with a subsequent decline in Q2.

Speaker 3

This is based on patients to delay starting on NERLYNX around the late Q4 holidays and instead pushing those starts into Q1. Moving to total prescriptions, we saw a quarter over quarter increase of about 0.4% and a year over year increase of Approximately 1.6%, largely driven or attributed to better refill rates. As I mentioned previously, we do not pick up NRx and TRx data for With that said, the majority of our business flows through the SP channel, So we want to see consistent NRx and TRx year over year trends if we're going to accomplish our goal of driving overall growth. The team is focused on this priority and knows the importance of

Speaker 2

this goal.

Speaker 3

Slide 6 highlights the adoption of dose escalation. We continue to believe dose escalation is an important metric as it serves to improve the tolerability of NERLYNX by significantly reducing Grade 3 diarrhea, Decreasing discontinuation rates and reducing the median cumulative days of Grade 3 diarrhea. In Q2, and educate healthcare practitioners around the benefits of dose escalation. And I'm overall happy with this adoption and Pleased to see dose escalation included in many prominent guidelines, including NCCN. Slide 7 highlights the strategic collaborations we have formed across the globe.

Speaker 3

As previously reported, in Q1 of 2023, NERLYNX received regulatory approval in the metastatic setting in Colombia, received regulatory approval in the extended adjuvant setting for both Morocco and South Africa, And was officially launched in Mexico also in the extended adjuvant setting. In Q2, we are pleased to announce that NERLYNX was launched in the We appreciate the efforts being put forth by our global partners to make NERLYNX available to more patients around the world. I'd like to wrap up by once again thanking my colleagues at Puma for their passion and dedication to making an impact on the lives of patients And the families battling breast cancer. This feeling permeates the entire organization. We know more needs to be done and we are committed to making a bigger impact.

Speaker 3

I will now turn the call over to Maximo for a review of our financial results. Maximo?

Speaker 4

Thanks, Jeff. I will begin with a brief summary of our financial results for the Q2 of 2023. Please note I will make comparisons to Q1 2023, which we believe is a better indication of our progress as a commercial company than year over year comparisons. For more information, I recommend that you refer to our Q2 2023 10 Q, which We reported net income based on GAAP of $2,100,000 or $0.05 per share. This compares To a net income in Q1 2023 of $1,400,000 or $0.03 per share.

Speaker 4

On a non GAAP basis, Which is adjusted to remove the impact of stock based compensation expense, we reported net income of 4,600,000 or $0.10 per share for the Q2 of 2023. Gross revenue from NERLYNX sales was 62,800,000 In Q2 2023 $59,400,000 in Q1 2023. As Alan mentioned, net product revenue Promenelix sales was $51,600,000 compared to $46,800,000 reported in Q1 2023. We believe that Q2 net sales were impacted by approximately $1,500,000 of inventory drawdown from our distributors versus approximately $3,800,000 of inventory drawdown in Q1 2023. Royalty revenue totaled $3,000,000 in the Q2 of compared to $6,000,000 in Q1 2023.

Speaker 4

The lower royalties versus Q1 reflects the timing of shipments to our partner in China. Our gross to net adjustment in Q2 2023 was about 17.9% Compared to the 21.2 percent gross net adjustment reported in Q1 2023, lower co pay, government charges America rebates were the main drivers of the decrease versus Q1 2023. Copco sales for Q2 2023 was $11,900,000 including $2,400,000 for the amortization of intangible assets Related to our neratinib license, Copco sales for Q1 2023 was 13,200,000 Going forward, we will continue to recognize amortization of milestones to the licensor of about $2,400,000 per quarter as cost of sales. For fiscal year 2023, Puma anticipates that net NERLYNX product revenue will be in the range of $205,000,000 to 210,000,000 We also anticipate that our gross to net adjustment for the full year 2023 will be between 19% 20%. In addition, for the fiscal year 2023, we anticipate receiving royalties from our partners around the world In the range of $25,000,000 to $30,000,000 We don't expect license revenue in 2023.

Speaker 4

We also expect that net income for the full year will be in the range of $20,000,000 to $24,000,000 We anticipate that for Q3 2023, NANELIX product revenue, net, We'll be in the range of $51,000,000 to $53,000,000 Also, we expect Q3 royalty revenue will be in the range of $3,000,000 to $5,000,000 Further estimate that the gross to net adjustment in Q3 2023 will be approximately 17.5 percent 18.5%. We anticipate a Q3 net profit between $3,000,000 $4,000,000 SG and A expenses were $24,400,000 in the Q2 of 2023 compared to $22,500,000 for the Q1. SG and A expenses included noncash charges for stock based compensation of $1,800,000 for Q2 2023 Compared to $2,000,000 for Q1 2023, research and development expenses were $13,400,000 in the Q2 of 2023 Compared to $12,700,000 for the Q1, R and D expenses included noncash charges for stock based compensation of $800,000 in the Q2 of 2023 compared to $900,000 in the Q1. In the Q2 of 2023, Puma reported cash earned of approximately $3,200,000 This compares to cash burn of approximately $9,900,000 in Q1 2023, which included $12,500,000 payment to Pfizer related to The achievement of our global revenue milestone and an $8,000,000 payment related to Aligozarma.

Speaker 4

On the expense side, Ooma continues to anticipate a reduction in total operating expenses compared to 2022. More specifically, we anticipate SG and A expenses to decline approximately 1% to 3% and D expenses to increase 5% to 7% year over year. At June 30, 2020 3, we had approximately $74,400,000 in cash, cash equivalents and marketable securities. Our accounts receivables balance was $31,300,000 Our accounts receivables terms range between 10 68 days, Alaudair sales outstanding are about 48 days. We estimate that as of June 30, 2023, Our distribution network maintained approximately 3 weeks of inventory.

Speaker 4

Overall, we continue to deploy our financial resources to focus on the commercialization of NERLYNX, the development of Alisertib and controlling our expenses.

Speaker 2

Thanks, Maximo. We are pleased to report positive net income as well as positive Cash flow during the Q2 of 2023. Puma senior management in cooperation with the Board of Directors continues to remain focused Improving NERLYNX sales in 2023 and beyond. In the Q4 of 2021, we implemented a reduction in expenses With the goal of reducing expenses in order to maximize operational cash flows, we believe that the positive net income And cash flow reported in the Q2 reflect these expense reductions. These expense reductions are also a major contributor To the positive net income and positive cash flow that Puma is guiding to for the full year 2023.

Speaker 2

The company remains committed to Continuing to achieve these operational cash flows and positive net income and we'll continue to reduce expenses if needed to achieve this. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer and other solid tumors. We at Puma are committed and passionate about finding more effective ways at helping these patients during their journey, This concludes today's presentation. We will now turn the floor back to the operator for Q and A.

Speaker 2

Operator?

Operator

Thank you. We will now begin the question and answer session. First question comes from Ed White with H. C. Wainwright.

Operator

Please go ahead.

Speaker 5

Good afternoon. Thanks for taking my questions and congratulations on the quarter. So just a couple of questions on sales. I might have missed it, but did you give the percentage of live interactions in the second quarter? I believe in the first

Speaker 3

Ed, thanks for the question. This is Jeff. And you know what, I'm sorry, I did not have that in the script. I apologize. In Q1, it was 81% Live, in Q2, it's very similar.

Speaker 3

It's reported around 81% to 82% live versus virtual. We still see the vast majority of our calls being live. I'm not seeing the same inflection. I would expect that we're going to see that Combination likely to continue for the foreseeable future.

Speaker 5

Great, thanks. And I'm just wondering if you had the NCCN guidelines We're changed updated, I should say, on February 1. Are you seeing any impact to sales Based on those guideline changes yet? Or should we expect to see it in the future?

Speaker 3

So Ed, we were very happy that NCCN changed that. And we feel like that, that validates some of the things we're trying to do. As you may know, they moved NERLYNX up into the body of the guidelines, Which we feel is a much more prominent position. Where they added NERLYNX was in the useful in certain circumstances section. And ultimately, what it said was consider using NERLYNX for patients at higher risk of recurrence.

Speaker 3

We love that positioning. It's more prominent, but the words consider puts the onus continued on the sales team to get in front and validate and justify Those. So although we see it as a positive trend, we think it's really up to my sales team and the commercial team to pull that through, educate around that And also continue to provide the benefits of NERLYNX in those patients. Hopefully that adds some more color.

Speaker 5

It does. And perhaps just the last question I have on the sales are, what really is going to move the Needle for NERLYNX over the next 12 months. So as you said that it seems like you're having more interactions. The NCCN guidelines really haven't had much of an impact without your pushing for it. So what do you have left in your Preparatory to increase sales?

Speaker 3

Yes, Ed, very good question. I appreciate it. Where we're focused In terms of trying to inflect NERLYNX is on a couple of areas. Number 1, we still don't believe that the that we've done a Strong enough job embedding the evolution of the clinical data. So the prime focus of the commercial team is to update and educate around That evolving clinical data, especially around those subgroups of increased levels of risk focused on IDFS, OS, CNS and duration, we want to continue to embed that so customers know that data inside and out.

Speaker 3

That's number 1. Number 2, we are trying to help our sales team as you think about the HER2 positive breast cancer patients spread across a large number of community oncologists where This is not as strong as we would like. What we're trying to do is to help the sales force spend more time in front of those customers That are more likely to have more of those appropriate patients. So that increased share of voice, we're trying to focus that in on places We have a greater return on that discussion. 2 other things I'll throw out.

Speaker 3

I mentioned access can be tough in a community setting. We are working hard to increase our non personal promotion. So in places we cannot get in front of, we're trying to Support that through non personal message to get that education across as well. And lastly, as I mentioned, In the extended adjuvant setting, we believe patients can play a significant role in asking their doctor about what else can I do to reduce my risk? So We're trying to increase that partnership with local and regional advocacy groups, so patients are more educated and engage more frequently I'm asking for other options to reduce the risk.

Speaker 3

Those are the 4 things we're focusing on right now to drive that business.

Speaker 5

Great. Thank you. And perhaps a pipeline question just for now, CIRTIV. You're planning on meeting with the FDA for the HR positive HER2 negative breast cancer indication. What are your expectations for that meeting with the FDA?

Speaker 5

Alan, what are you thinking would be a home run here? What are you thinking that What would be the path forward?

Speaker 2

Yes. Thanks for the question, Ed. We've seen alocertib tested in 2 different settings in HR positive or HER2 negative breast cancer. 1 is in combination with endocrine therapy and the other is in combination with chemotherapy, With paclitaxel, the endocrine was with fulvestrant. The fulvestrant combination is obviously used early in the treatment guideline In the treatment regimen, so obviously we have a larger potential patient population.

Speaker 2

In our meetings with the KOLs, They have definitely pushed for using alacertib earlier rather than later. So they've pushed more for the combination with fulvestrant or some other endocrine in kind of that endocrine phase of treatment, kind of the before chemo part. So I don't know if there's any setting that's a home run. I think we'll have a very productive discussion with the FDA. It will be Very helpful and interactive.

Speaker 2

I don't really there's no scenario that I view as a home run. I would imagine we will just be discussing with them Yes, the path forward for that combination and what the eventual Phase III trial would need to look like.

Speaker 5

Okay, great. Thanks, Alan, for taking my questions.

Operator

Next question comes from Divya Rao with B. D. Cowen and Company. Please go ahead.

Speaker 6

Good afternoon. This is Divya on for Mark. Thanks for taking our question. We have two questions, mostly on the pipeline. Just to clarify on the Phase 2 trial of allosertib and small cell.

Speaker 6

Will all the patients be enrolled and then have their tissue biopsy during the interim cut Should I evaluate the subgroup analysis or will the patients be screened for the presence of biomarkers before they're enrolled into the trial?

Speaker 2

Yes, Divya, thanks for the question. The patients will have so we'll be pre specifying The way we're looking to do this is to pre specify upfront the biomarkers we're going to look at. We'll do the tissue biopsy at study entry. And then we're meant to do the trial in a way that we're constantly looking at the biomarkers. And so if there's a need to kind of enrich a population because we're seeing a signal, we can do that.

Speaker 6

Got it. That's helpful. And then, for the pembro combination trial that is hoping to that you're hoping to read out in the second half. What is the kind of scope of that data readout going to be? And possibly, is there a venue that you're thinking of for that disclosure.

Speaker 2

Yes. So it's an investigator sponsored trial. So we have not as much interaction on that. In our last communication with the investigator, the investigator said that they were looking to submit it to the molecular targets meeting. I believe they were looking to do it as a late breaker.

Speaker 2

So that's the last update we have on that.

Speaker 7

Got it. Thank you so much.

Operator

Next question comes from Jeff Mehta, Bank of America. Please go ahead.

Speaker 6

Hi. This is Alex Hammond on for Jeff. Thank you very much for taking our question. Can you talk a little bit about your BD strategy? You touched on it a bit during the prepared remarks, but What will be your criteria or your preference for the type of products that you are going to potentially in license?

Speaker 6

Thank you very much.

Speaker 2

Yes. Thank you for the question. I think we would be looking at focusing more in the solid tumor space Because that's where our both our commercial sales force and our kind of R and D domain knowledge is. And I think we'd be looking at We obviously would be looking at potential commercial assets, although I think that in the solid tumor space has its challenges, And then ones that are in various stages of clinical development as well.

Operator

Thanks. Next question comes from Gena Wang with Barclays. Please go ahead.

Speaker 7

Hi, good afternoon. This is Harshita on for Gena. Thanks for taking our question. So I just had a quick one on the Allocerde, Small Cell Development Pathway. By the way, thank you for all the color in the prepared remarks.

Speaker 7

I was curious, did you discuss with the FDA what KLI-four thousand two hundred and one trial you disclosed today? Thank you.

Speaker 2

Yes. Thank you for that question. So normally when you're going for an accelerated approval pathway, you go in with a Phase 2 trial and you try to have The conviction that that's going to result in a positive randomized trial. Well, obviously, we have the randomized Phase 2, Where in the biomarker subgroups, we have shown a PFS and OS benefit. So, now we're kind of going backwards to try to find the Monotherapy trial, monotherapy subgroup that would correlate with what we saw in that randomized trial.

Speaker 2

I would imagine that the randomized trial would be very similar to what was published in the Journal of Thoracic Oncology, which would be the kind of Paclitaxel alacertib against paclitaxel placebo. That would be my assumption, although it would be one that would be prospectively Looking for that biomarker subgroup. So the only patients enrolled would have that biomarker. So it would be similar, but different from what was done previously.

Speaker 7

Very helpful. Thank you so much.

Operator

This concludes our question and answer session. I would like to turn the conference back to Mary Anne for Steve Martin.

Speaker 1

Thank you for joining us today. As a reminder, this call may be accessed via replay of the webcast atpumabiotechnology.com beginning later today. Have a good evening.

Operator

Ladies and gentlemen, thank you for your participation in today's conference call. This concludes our program. Everyone, have a great day. You may now disconnect.

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Key Takeaways

  • Puma reported Q2 2023 net product revenue of $51.6 million, GAAP net income of $2.1 million ($0.05/share), non-GAAP net income of $4.6 million ($0.10/share) and generated positive cash flow of $3.2 million.
  • The commercial team is focused on the extended adjuvant HER2-positive breast cancer indication, achieving 3,022 ex-factory bottles sold (+6% QoQ), ~2.9% YoY demand growth and launches in Colombia, Mexico, Morocco, South Africa and Egypt.
  • Puma in-licensed the anticancer agent alisertib from Takeda and plans a biomarker-driven Phase 2 monotherapy trial in small cell lung cancer (ALI-4201) to support an accelerated approval pathway.
  • Key upcoming milestones include initiating the alisertib small cell lung cancer trial by year-end 2023, an FDA meeting in Q4 2023 for HR positive/HER2 negative breast cancer development and head and neck cancer pembrolizumab combination data in H2 2023.
  • For full-year 2023, Puma forecasts net NERLYNX product revenue of $205–210 million, royalties of $25–30 million, a 19–20% gross-to-net adjustment and positive annual net income of $20–24 million.
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Earnings Conference Call
Puma Biotechnology Q2 2023
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