Earnings Transcript for CTIC - Q2 Fiscal Year 2021

Operator: Good afternoon. Thank you for standing by, and welcome to CTI BioPharma's Second Quarter 2021 Earnings Call. [Operator instructions] This conference is being recorded today August 5, 2021. I'd now like to turn the conference over to Dr. Adam Craig, CEO and President of CTI BioPharma. Please go ahead.

Adam Craig: Thank you, Lorry, and welcome to this afternoon's conference call. Joining me today are David Kirske, Chief Financial Officer; and Bruce Seeley, Chief Operating Officer. Following formal remarks, the conference call will be open for questions. Before I begin, please note that during this call, we will be making forward-looking statements based on current expectations. Such statements are within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, the types of statements identified as forward looking statements in our 2020 Annual Report on Form 10-K that was filed on March 17, 2021, and our subsequent periodic reports filed with the SEC, which are available on our website in the Investor section. Such forward-looking statements represent our views only as of the date of this call and are not fiscal and are not guarantees of future performance and are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated by the forward looking statements, including many that are beyond our control. For further description of the risks and uncertainties that would cause actual results to differ materially from those expressed in the forward looking statements, as well as risks related to our business, please see our periodic reports filed with the SEC. This quarter, we have continued to advance pacritinib towards a potential U.S. approval and commercial launch this year. The FDA's acceptance with priority review of our NDA's submission for the use of pacritinib in myelofibrosis patients with thrombocytopenia, underscores the unmet medical need in this area. Our PDUFA target action date is November 30, 2021, and the FDA is not currently planning to hold an advisory committee meeting to discuss the application. As a reminder, the NDA was accepted based on data from Phase 3 PERSIST-2 and PERSIT-1 and the Phase 2 PAC203 clinical trials with a focus on the severely thrombocytopenic patients, that is those with platelet counts less than 50 times 10 to the 9 per litre. Patients enrolled in these studies with severe thrombocytopenic and patients receiving pacritinib 200 milligrams twice a day were the focus of the NDA and included both frontline treatment-naive patients and patients with prior exposure to JAK2 inhibitors. One thirds of the existing myelofibrosis patient population has severe thrombocytopenic, approximately 7,000 patients. A population with suboptimal and limited treatment options and in urgent need for new therapies. To address this need, our team has been working diligently on pre-commercialization activities, including market access, distributions, supply chain, disease education and field force deployments. We are eager to commercially launch pacritinib immediately upon approval from the FDA, and given our application's priority review status, we are prepared to launch on the PDUFA date or earlier. In preparation for an early launch, we have completed the hiring of our foreclosed leadership team and started to recruit our key account managers who will be our sales force. Moving on from myelofibrosis, last year we launched a study of pacritinib in severe COVID-19 patients in response to the pandemic. This study, PRE-VENT, is a randomized double blind placebo controlled multicenter Phase 3 clinical trial comparing the use of pacritinib plus standard of care versus placebo plus standard of care in hospitalized patients with severe COVID-19. The primary end points of the trial will assess the proportion of patients who progressed to invasive mechanical ventilation and/or extra corporal membrane oxygenation or die by day 28. We continue to expect to report on the outcome of the interim analysis from this trial in -- during this quarter. Finally, as we have previously discussed, we are investigating the use of pacritinib in the prevention of acute graft versus host disease or GVHD. The investigator sponsored Phase 2 component of the ongoing Phase 1/2 study investigating the addition of pacritinib to the standard prophylaxis of sirolimus and low dose tacrolimus in the treatment of GVHD continues to enroll. And we remain on track to provide an update on the progress of the Phase 2 trial and any potential regulatory interactions around this indication later in the year. As a reminder, the American Society Hematology meeting in December, 2020, data is presented from this study that showed adding pacritinib to the standard prophylaxis regime, resulting significant reduction in the expected acute graft versus host rates in patients within the first 100 days of therapy as compared to historical data without compromising transplantation outcomes and without any new safety concerns. I will now turn the call to David to review our quarterly financials. David?

David Kirske: Thank you, Adam. As of June 30, 2021, cash and cash equivalence and short-term investments totaled $71.9 million as compared to $52.5 million as of December 31, 2020. Operating loss was $19.5 million and $10 million for the three months ended June 30, 2021 and 2020, respectively. No revenues were recognized for the three months ended June 30, 2021 or for the three months ended December 31, 2020. Net loss for the three months ended June 30, 2021 was $19.7 million or $0.21 for basic and diluted loss per share as compared to a net loss of $14 million or $0.19 for basic and diluted loss per share for the same period in 2020. So with that, I'll hand it back to you, Adam.

Adam Craig: Thank you, David. So with the PDUFA target action date of November 30, 2021 and commercial preparations well underway, we are well positioned for a potential U.S. launch later this year. We look forward to working closely with the FDA as it completes the final stages of the review of the application. This concludes our formal remarks. Lorry, please open the call for questions.

Operator: [Operator Instructions] Our first question is from Ben Burnett of Stifel. Please ask your question.

CarolinaIbanez: Hi. So this Carolina Ibanez on for Ben Burnett. Thank you for taking the question. I have one quick one on the data for pacritinib in COVID-19 coming in the third quarter. Could elaborate on the type of data you'll be getting? And where the bar is set for the results also in the context of further JAK2 inhibitors that are already been used with emergency use authorization?

AdamCraig: Yes. Thank you, Carolina for your question. So the analysis is a futility analysis, we have not made public nor will we what the bar is. But as we said we should be announcing the data later this quarter. And I can't comment on how -- based on that, I can't comment on how we compare to other PAC inhibitors -- other JAK inhibitors.

CarolinaIbanez: Okay. Understood. And then a quick follow-up also on the hiring that you are doing to support the launch of pacritinib in myelofibrosis. How should we think about the pace and volume of additional hires for myelofibrosis?

AdamCraig: So obviously over the last six months, particularly since the NDA filing was accepted, we have expanded. And we have currently around 60 full-time employees. We do expect that number to approximately double as we complete the commercial hires by the end of this year.

Operator: Our next question is from Reni Benjamin of JMP Securities.

ReniBenjamin: Great. Thanks so much for taking the questions, guys. Congratulations on all the progress. Adam, I know that we've talked about how you're thinking about pricing of pacritinib when it comes out and likely to be, I think as we've talked about in the past, hopefully at a pretty nice premium to JAK inhibitors that are already out there. But one of the things that we're always trying to get our hands around is the duration of therapy for pacritinib. And the phase three data that you've submitted to the FDA shows one thing, but I'm trying to get a good sense as to what is the average months of duration on therapy that you've seen to date?

AdamCraig:

ReniBenjamin: Okay. And then I guess just turning to the commercialization side. Can you just remind me, have you guys already identified the centers or the community docs that you will be targeting right off the bat? Or how should we be thinking about the initial phases of the launch?

AdamCraig: Bruce will answer.

BruceSeeley: The -- in initial launch were not surprising any target, the high volume accounts in the academic centers, and then we've identified also the large community accounts that treat quite a few patients, the group practice or the large group practices. And that's where the far majority of the patients are treated.

ReniBenjamin: And Bruce, about how many, could you give us like how many accounts are there from academic versus community?

BruceSeeley: It depends on how you look at it. Just in terms of number of physicians, the majority of physicians are going to be in the community accounts. They treat anywhere from 0, 1 or 2 patients to 5-ish patients. The large practices are the ones that we're going to be focused on. And the academic centers we're focused on, they can treat 20 to 50 patients per year depending on the site.

Operator: Your next question is from Thomas Flaten of Lake Street Capital.

ThomasFlaten: Adam, how do you -- how should we think about PACIFICA enrollment once you guys go live commercially? Do you see there being some cannibalization there or have you -- do you have a strategy for segregating patients in the study versus commercial product?

AdamCraig: Thank you. Its a very important question. The - its most likely that PACIFICA will continue ex-U.S. after approval. And we are no doubt towards the end of the NDA process where we'll have some discussions with the FDA around the program -- around that trial with maybe some changes to it. But big picture, I don't expect that to be cannibalization of U.S. sales opportunities. The drug is performing very well ex-U.S. at the moment, and I think we could successfully complete the trial outside the U.S. on time.

ThomasFlaten: You mentioned one abstract submission to ASH. Could you qualitatively share what other types of information we might be seeing at ASH coming out on pacritinib in particular?

AdamCraig: Yes. So one of the things is duration of therapy on expanded access, which I have already alluded to. If accepted, of course they haven't been -- the abstracts haven't been accepted. We're also providing a -- we've put together abstracts that really describe the safety profile of pacritinib in the lower platelet count patients, and with some comparison to the dates we have on the safety profile, ruxolitinib in that setting as well. And we've got some nice, some very favorable data that we're presenting on that. And at this point, Thomas, I really prefer not to go any further than that. Because we have to be careful that we don't break the rules with ASH and I'd rather let you know in November when the abstracts are hopefully accepted.

ThomasFlaten: No problem. Just one final one. Any intelligence on the NCCN guidelines update process?

AdamCraig: Yes. So, again, a very important question. We are -- we've already started our communications with the NCCN and we've sent a preliminary notification of where we are, and we do expect, once the drug is approved, that we'll enter into discussions with them quite quickly and that we'll get on the NCCN guidelines as soon as possible after the launch.

Operator: And our next question is from [Dave Wong] of Needham & Company.

UnidentifiedAnalyst: Hi, everyone and thanks for taking our questions. Most of my question's been already answered. But I think maybe a bit of regulatory question here with the spike in COVID and your PDUFA coming in November. Is the FDA having any issues accessing production sites and factories that are making pacritinib or is this not an issue at all?

AdamCraig: I've said previously, the inspection process for us stopped a bit early. We've nearly, I think we're coming to end of it, we've probably nearly completed it. We've not encountered any issues with the FDA with respect to inspections. And some of the inspection work is being done remotely, that has been very successful without any issues, and some inspection work is being done in-person. And again, we haven't encountered any issues, we seem to be -- the resources put by the FDA into our inspections seem to be very good, and they've so far gone very well.

Operator: And there no further questions at this time. I will now turn the call over back to Dr. Adam Craig for his closing remarks.

Adam Craig: Thank you, Lorry. And thank you everyone for joining the call today. We look forward to continuing the conversation in the coming months. And we look forward to a potential approval of pacritinib later this year. Thank you.

Operator: And this concludes today's conference call. Thank you for participating, and you may now disconnect.