Aadi Bioscience Q2 2023 Earnings Call Transcript

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August 9, 2023

There are 8 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Addy Bioscience Incorporated Second Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to Marci Graham, Senior Vice President of Investor Relations and Corporate Communications at Addy Biosciences.

Operator

Ms. Graham?

Speaker 1

Thank you. Good morning, and welcome to the Addy Bioscience conference call to provide an operational update and review results of the Q2 2023. Joining me on the call today is Scott Giacobello, our CFO and Interim President and CEO, who will provide an overview of financial and operational activity during the period, including an update on our continued commercial progress and he will be followed by our Chief Medical Officer, Doctor. Loretta Eitri, who will provide an update on our PRECISION 1 study and Clinical Development Plans for 2023. We will open the line for questions at the end of the call following closing comments.

Speaker 1

A quick reminder that statements made on the call today will include forward looking statements. Actual events or results could differ materially from those or on our website at www.addibio.com. In addition, any forward looking statements made on this Call represent our views only as of today, August 9, 2023, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward looking statements. With that, I will turn the call over to Scott for his opening comments.

Speaker 1

Scott?

Speaker 2

Thank you, Marcy, and good morning, everyone. Thank you for joining us today to review our financial and operational results for the Q2 of 2023. We continue to see solid performance from our commercial and clinical organizations during the quarter, each focused on driving results as we enter the second half of the year. Payaro sales for the quarter were $6,200,000 showing continued growth with a 6% sequential increase over the previous quarter and 80% growth over the prior year quarter. Efforts by our sales and marketing teams in the field are driving awareness and educating key stakeholders, Reaching healthcare providers in varied channels and we are pleased with the positive feedback from physicians on the efficacy and safety of fyarro as we see greater utilization in the first line setting.

Speaker 2

Separately, the PRECISION 1 trial is progressing well And we're looking forward to providing results on an interim analysis of 40 patients with appropriate follow-up before the end of the year. We are enthusiastic about the potential of this trial to significantly broaden the future application of NABS serolimus across many different tumor types and in a much larger patient population than we currently address in Pekoma, presenting an exciting opportunity for additional growth. Beyond the PRECISION-one study, we have continued to evaluate the potential use of NAVSIROLIMUS in a number of new clinical indications, either as a single agent or in combination with other target therapies. Today, we're announcing the expansion of our fyarro pipeline through the further investigation of mTOR pathway inhibition in endometrial cancer and neuroendocrine tumors or NETs. Our preclinical data in these indications is promising and we believe in the potential of our technology to harness the unique pharmacology of nAbsterolimus to provide enhanced therapeutic benefit for patients.

Speaker 2

Loretta will join us shortly to provide greater detail on these and other aspects of our clinical programs. This is a year of execution on many fronts, which now includes the launch of new programs that we believe will reflect the value of navsterolimus as a potential treatment and additional indications targeting genetically defined cancers with mTOR pathway alterations. Loretta is up next to provide an update on our PRECISION 1 trial and discuss our ongoing clinical activity. Loretta?

Speaker 3

Thank you, Scott. Good morning, everyone. Throughout the Q2, we have continued to make advancements in our ongoing PRECISION 1 tumor agnostic trial in mTOR naive patients with malignant solid tumors harboring TSCI or TSCI in activating durations. This prospectively designed trial is evaluating patients in 1 of 2 independent study arms, one with solid tumors harboring TSCI and the other with TSCI II. We continue to observe a relatively even rate accrual between the two study arms.

Speaker 3

We also continue to have a very broad representation of solid tumors across more than 15 discrete tumor types and fully expect the results of this trial to represent a truly tumor agnostic outcome. Importantly, the safety profile we have seen thus far is entirely consistent with that seen in the AMPACT study and no new safety signals have emerged as enrollment continues to increase in this diverse and heavily pretreated population of patients. The trial is progressing well and we continue to target full patient enrollment by the spring of next year, 24 months after the first patient was enrolled. We are looking forward to sharing further information on the PRECISION-one study before the end of the year when the overall investigator assessment of response will be presented in conjunction with a pre planned interim analysis on 40 patients with appropriate follow-up. We remain excited about the potential of this important study and the promise that NAPsIROMIS may hold for the treatment of this diverse population of patients in need.

Speaker 3

We also believe that the potential of napsuralinib extends beyond the glaucoma and TSC I and II indications, which is why we have continued to investigate its use in a number of new clinical indications, both as a single agent and in combination with other approved therapies. With the PRECISION 1 trial well on track, We are pleased to share that we are initiating a Phase 2 trial investigating the combination of nabsoralimis with letrozole for the treatment of advanced or recurrent endometrioid type endometrial cancer or more easily stated EEC. This is an open label, multi institutional study to evaluate the efficacy and safety of napsyrolimus and letrozole in patients with advanced or recurrent endometrioidendometrial carcinoma. Prior clinical studies with mTOR inhibitors have yielded promising data in this area, and we believe there is potential for the combination of nabsoralimis with endocrine therapy to produce synergistic anti tumor activity in patients with recurrent endometriotype endometrial cancer. We expect to initiate patient enrollment in the Q4 of 2023.

Speaker 3

Given the very recent change in Recommendation for first line standard of care treatment, which now includes chemotherapy plus immunotherapy, We believe that there may be a unique opportunity to develop napsarolimus plus letrozole in endometrial carcinoma following chemoimmunotherapy failure. In addition, this fall, we expect to launch a Phase II multicenter Open label's single arm trial to evaluate adult patients with functional or non functional, Well differentiated locally advanced unresectable or metastatic neuroendocrine tumors or NETs of the GI tract, lung or pancreas who have received no more than 2 prior lines of therapy. Given the historically low response rate of this tumor to treatment with oral rapalogs and other agents, which nonetheless are used clinically and recommended in treatment guidelines, we anticipate being able to demonstrate the clinical superiority of nafsirolimus in this population for the purposes of future publication. The Phase III trial of the combination of nabsuralimis and adagracib in patients with KRAS G12C mutations has now started with the 1st patient dosing completed. The study conducted in collaboration with Mirati Therapeutics is evaluating the combination of adagracin with nabsorialimab and is intended to determine the optimal dose and recommended Phase II dose in patients with KRAS G12C mutant solid tumors.

Speaker 3

As you can see, we are active on many fronts. The activation of new studies in addition to the planned progression of PRECISION 1 are the foundation of our growth strategy. I will now turn the call back over to Scott for updates on our commercial and financial progress. Scott?

Speaker 2

Thanks, Loretta. In addition to our clinical advancements, we are pleased with the continued commercial progress of Fyaro for patients with Vekoma. We are seeing steady product demand growth and commercial access remains very strong with more than 90% commercial lives covered. We reached $6,200,000 in sales for the Q2, which represents growth of 6% over the Q1 of 2023 80% growth on a year over year basis. Our sales to date have reached more than $27,000,000 in just 16 months on the market.

Speaker 2

At the end of the second quarter, We had more than 165 unique ordering accounts, up 13% from the Q1. The reorder rate was approximately 85% in the quarter, underlining the positive experience with Fiara. The uptake in community clinics and hospitals has been consistently strong, representing approximately half of firearm sales nationwide. As the only approved therapy in Pekoma, Fyaro continues to increase share as a frontline therapy. Our team continues to drive awareness and education in our efforts To cement fyaro as a gold standard for malignant pectoma.

Speaker 2

As they do so, it is becoming clear that stakeholders understand the value and differentiation of fyaro for PIKAMA patients. Our tracking shows significant physician awareness of fyarro with 65% overall and an impressive 80% awareness for those specializing in sarcomas. The feedback we are receiving is also robust And to indicate that providers are readily adopting fyarro as a top choice for treatment of their patients. On the financial front, We remain well capitalized ending the 2nd quarter with $134,900,000 in cash, cash equivalents and short term investments, which is expected to fund operations into 2025 based on current plans, including the additional programs in endometrial cancer and NETs. Research and development expenses for the quarter increased to $13,300,000 as compared to $7,700,000 in the prior year quarter.

Speaker 2

This increase is primarily related to the continued progress of the ongoing PRECISION 1 trial and the build out of the R and D organization. Selling, general and administrative expenses for the quarter were $11,800,000 compared to $10,000,000 for the same period in 2022. This increase is due primarily to the build out of company infrastructure and increased marketing expenses related to the commercial launch of Fayaro. Net loss for the quarter was $18,000,000 compared to $18,300,000 in the prior year quarter. The prior year net loss included the $3,700,000 non cash impairment charge related to the Gossamer license agreement to company's predecessor AirPO.

Speaker 2

For more information on our financial performance for the quarter, a detailed discussion of the results reported on this call will be provided in our Form 10 Q. As I stated earlier, we are pleased with our overall progress and we're truly excited about what lies ahead. We continue to enroll the PRECISION-one trial and are looking forward to sharing further information on our progress before the end of the year. We're excited about our new programs in endometrial cancer and NETs and the prospects for our next generation mTOR inhibitor in these indications with meaningful patient populations and high unmet need. We can now open the line for questions.

Speaker 2

Operator?

Operator

Thank One moment for our first question. And our first question will come from Joe Catanzaro. Your line is open.

Speaker 4

Hi, everybody. Appreciate you taking my questions here. I have a couple. Maybe the first one on the PRECISION-one interim. Can you just remind us whether that data cut is Triggered once these 40 patients have reached a minimum follow-up period and if so, what's the minimum required follow-up there?

Speaker 4

And I think I heard you Loretta, but just wanted to confirm that these interim data will be reported on just investigator based assessment And there will not be a central review at this point in the study? Thanks.

Speaker 3

Hi, Joe. Thank you for your questions. Yes, you're correct. These will be investigator responses, And they will not be subjected to IDMC review. So I think that was your first question.

Speaker 3

And then, the minimum follow-up, we are attempting to provide 6 months of follow-up on most of the patients, a You will fall short. I think the shortest follow-up we will have might be about 4.5 months. Does that help?

Speaker 4

Yes. Got it. That's super helpful. And then just a follow-up. For the NET study, it sounds like the Strategy there is to generate a data set that maybe potentially points to superiority over everolimus And then you could maybe look to get that published and then included in guidelines.

Speaker 4

I guess, am I correct there? And if so, what's the Scope of a potential data set you think you would need to generate to pursue that route? Thanks.

Speaker 3

So Joe, I think you I could not have stated The strategy better than you just did. We don't need huge numbers. We are Planning to do a relatively small SIMON 2 stage study. I'm not going to share the exact numbers, But it will be a relatively small number initially. We will look to see if response rate is improved because as you know, The oral rapalogs are associated with a very low response rate, and we believe that our superior pharmacology will actually show markedly superior response rate.

Speaker 3

If we see a signal in the 1st small subset of patients, we will be prepared to expand the study to a larger number. So I hope that helps.

Speaker 4

Okay. Yes, that's helpful. Thanks so much for taking my questions.

Speaker 3

You're most welcome.

Operator

And one moment for our next question. One moment. And our next question will come from Ahu Demir. Your line is open.

Speaker 5

Good morning. Congrats on the progress in this quarter. A couple of questions for us as well. I'll follow-up on the NET study. Loretta, based on your remark, it sounded like you are not necessarily looking at TSC-one-two approach here.

Speaker 5

So just curious if you could provide more color there. What would be the mutation patient population that you will be looking at in Biotherapeutics, anything you could share with us that you haven't yet?

Speaker 3

You're quite correct. And good morning, Ahu. It's always good to hear from you. The TSC-twelve does not play a significant role in the NET study. In point of fact, As long as PRECISION trial is enrolling, we will not permit patients with TSC Not a precision medicine study.

Speaker 3

This is more of an old timey, all comers, Functional, non functional nets, and we are looking for response rate in that population to differentiate As was brought out in the previous question, to differentiate from the data in the literature regarding Oral rapalogs, it's a very low bar and we think it will be relatively easy for us to show a benefit on the basis of our superior pharmacology.

Speaker 5

Thank you, Loretta. That's helpful. My other question is on the Precision one. Given that you expect enrollment to complete in the CYPRAINT 2024, What would it mean for the top line data analysis? Are we still on track for first half of next year for data redot?

Speaker 5

And what should we expect For that top line data readouts.

Speaker 3

Well, I don't think anything will have changed. We anticipate completing enrollment by end of Q1. And then as the data mature, we will report out Final results as quickly as we can. I can't commit to an exact time line because we We have to see how long it takes, but you can do the math. And if we have 6 months of follow-up on the last patient in by end of first quarter, You can see that we probably anticipate having something to report Out by end of year, early next year.

Speaker 5

Okay. Thank you. And my last question is for Scott. For Pollario Market penetration, is there anything you could communicate with us, Scott? And how much growth should we expect for the subsequent quarters?

Speaker 2

Yes. Thanks, Ahu. Thanks for the question. We haven't shared market penetration information. I would say that we're So continue to be really pleased with how Fyodor is doing in Tacoma and with what we're hearing from physicians.

Speaker 2

I think as far as What to expect as we move out from a growth perspective? You saw that we had 6% in this quarter. We had actually in the quarter had Strong April May and followed by a little bit of a softer June. So I think that could be for a number of reasons. We actually saw a similar situation Actually last year and what was the 1st full quarter of launch.

Speaker 2

So I think it's not really able to guide on what we'll see for the back half of the year, but I think we continue to be Really positive with how the launch has gone. And I think continuing, as I mentioned in my comments, continuing to make inroads into first line Should bode well for duration as we move forward.

Speaker 5

Thank you very much for taking my questions.

Operator

One moment for our next question. And our next question will be coming from Boris Peaker. Your line is open, Boris.

Speaker 6

Good morning and thanks for taking my questions. My first question on Feiyaro, can you comment on what you're actually seeing in terms of duration of therapy and how it compares to what you

Speaker 2

Yes. Thanks for the question, Boris. I mean, we haven't shared duration data yet. I think we still want A little more time out there. As I've said previously, you remember when we first launched and had patients coming out of EAP and then also with Approved therapy out there, we were kind of getting patients where they were in their patient journey, so a lot of later line patients.

Speaker 2

I think As we continue to move more into the first line, which we've seen happen in the first half of this year, I think that should bode well as I mentioned for duration and I think we'll have a better read in the coming quarters.

Speaker 6

Great. My second question is on PRECISION 1, I think you mentioned there's 15 indications enrolled. Curious, are there any predominant indication that you're observing, Maybe, Indomitra or something else?

Speaker 3

Hi, Boris, it's Loretta. We are seeing, it probably wouldn't surprise you what we're seeing. We're seeing the most patients from the most common tumors. And what I can tell you is the GYN tumors as a group, ovarian, endometrial Our one larger subset bladder, which is urinary bladder, which would not be Surprising because it's the one where we see the highest number of mutations in TSC-one is also a player. We see a smattering of sarcomas, but sarcomas are interesting.

Speaker 3

We have a small group of Lyomyosarcoma and then we see Osteo, one of everything. So, I would say that as a group, we see the largest focus is GYN, but not Specifically, endometrial, as you suggested, but different types of GYN tumors mixed in. We also see A fair number of GI tumors, pancreas, gallbladder, hepatocellular, That's another fairly large portion of tumor. So I would say that we pretty much follow. We're now seeing lung as well.

Speaker 3

In the We didn't see much lung. Lung is now starting to come up as one of the More common types. So I think what we can say is that we are following the Usual pattern of commonly observed tumors. Does that help?

Speaker 6

Yes. Thank you very much for that lengthy answer and thank you for taking my questions.

Operator

Our next question will be coming from Roger Song. Roger, your line is open.

Speaker 7

Great. Thanks for taking the question and congrats for the progress. The first question may be related to the expansion strategy. Seemingly, you're moving towards Some of the validation from prior M2 inhibitor, maybe histology based trial, Like Loretta, you said more traditional trial. Just curious if anything you will continue For Farah, for the precision oncology route, like any Specific mutation on genetic mutation beyond the TSC-one hundred and two may be suitable for FARA?

Speaker 3

Roger, thank you. That's a really interesting question. I think that we will take direction. As you know, one of the exploratory Analyses that we will perform on the PRECISION trial is to look at co mutations. At the moment, The only other targeted therapy that we are combining with, of course, is the Mirati compound.

Speaker 3

And there are data to suggest That those 2 mutation targets seem to work well. And I think that Looking forward, we would have a very rich data set from PRECISION 1 to help us identify other potentially important co mutations that contribute To efficacy. So I think right now, the answer would be no. But future forward, I think We will be opportunistic and follow the data.

Speaker 7

Yes. That makes sense. Maybe just a quick follow-up. I understand the mutation, maybe you're looking for some co mutation. And any other biomarker strategy you will potentially To implement even in those traditional histology based trial, maybe more better for Thyra?

Speaker 7

Thank you.

Speaker 3

At the very at this very moment, I think we've kind of got a full plate. So I don't think we would be Taking on an additional study, but we continue to look very aggressively At other combinations, both precision medicine and Standard chemotherapy, immunotherapy, we are always looking for opportunities to expand the potential of our compound.

Speaker 7

Excellent. Thank you. Maybe just last one. For the ECC and the NET study, would you be able to guide a little bit about the initial data we can start to seek? Thank you.

Speaker 3

Well, the first patient is in both studies are anticipated to begin enrolling in this calendar year. So I would anticipate, since they are 2 stage Studies that we should have something to report out, even early data, probably sometime next year.

Speaker 7

Great. Thank you, Loretta. Thanks for taking the question. That's it for the math. Thank you.

Speaker 3

Thank you.

Operator

I would now like to turn the conference back to Scott Giacobello for closing remarks.

Speaker 2

Great. Thanks everyone for taking the time to join our call today. As you can see, we've got a lot going on and we're looking forward to updating you as the year progresses.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Key Takeaways

  • Addy Bioscience reported $6.2 million in Q2 sales of Fyarro, marking a 6% sequential increase and 80% year-over-year growth with over 165 ordering accounts and an ~85% reorder rate.
  • The tumor-agnostic PRECISION 1 trial enrolling patients with TSC1/2-altered solid tumors is on track for full enrollment by spring 2024, with an interim analysis of 40 patients expected before year-end.
  • New Phase 2 studies launching in late 2023 include a trial of napsirolimus plus letrozole in advanced endometrioid endometrial cancer and a separate trial in neuroendocrine tumors, aiming to demonstrate superior response rates versus existing rapalogs.
  • A Phase 3 collaboration with Mirati Therapeutics has begun dosing the first patient in a study of napsirolimus plus adagrasib in KRAS G12C-mutant solid tumors to define the optimal combination dose.
  • Financially, the company ended Q2 with $134.9 million in cash, funding operations into 2025, reported R&D spend of $13.3 million and SG&A of $11.8 million, and logged a net loss of $18 million, consistent with the prior year.
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Earnings Conference Call
Aadi Bioscience Q2 2023
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