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Blueprint Medicines Corp (BPMC) Q4 2018 Earnings Conference Call Transcript

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Blueprint Medicines Corp  (NASDAQ: BPMC)
Q4 2018 Earnings Conference Call
Feb. 26, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Q4 2018 Blueprint Medicines Corporation Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call may be recorded.

I would now like to introduce your host for today's conference, Mr. Jim Baker of Blueprint Medicines. Sir, you may begin.

Jim Baker -- Vice President, Corporate Affairs

Thank you, operator. Good morning. Welcome to Blueprint Medicines fourth quarter and full year 2018 financial and operating results conference call. This morning, we issued a press release which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we'll be reviewing today by going to the Investors section of our website at blueprintmedicines.com.

Today on our call, Jeff Albers, our Chief Executive Officer, will discuss our 2020 Blueprint strategy and recent business highlights. Kate Haviland, our Chief Operating Officer will discuss our personalized medicine approach in GIST. Dr. Andy Boral, our Chief Medical Officer will provide an update on recent clinical progress, and Mike Landsittel, our Chief Financial Officer will review our fourth quarter and full year 2018 financial results. We will then open the call for your questions.

Before we get started, I would like to remind everyone that statements we make on this conference call will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties, and other factors, including those set forth in the Risk Factors section of our most recent quarterly report on Form 10-Q filed with the SEC and any other filings that we have made or may make with the SEC.

In addition, any forward-looking statements made on this call represents our views only as of today 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.

Now, here is our CEO, Jeff Albers.

Jeffrey Albers -- Chief Executive Officer, President and Director

Thanks, Jim, and good morning everyone, and welcome to our fourth quarter financial results call. Today, we will highlight our 2020 Blueprint business strategy as well as key upcoming milestones for our lead programs avapritinib and BLU-667. Our vision has always been to build the leading precision therapy company. Since we began operations less than eight years ago, we've invested in a robust scientific platform, and rapidly advanced multiple programs into the clinic under a focused portfolio strategy. Now we're approaching the point of making avapritinib our first medicine available to patients and their treating physicians and BLU-667 is close behind. In fact, we are increasingly confident that we could be the first company to discover and develop two distinct medicines and bring them to patients directly in less than 10 years from founding. And we expect these initial successes to spark a sustainable innovation cycle that will enable us to repeatedly deliver new medicines to patients.

In 2018, we fortified the foundation for this vision with remarkable achievements across our portfolio. For avapritinib in GIST we completed the enrollment of registration cohorts and reported top line data for our planned NDA submission for PDGFR alpha and fourth-line GIST. In systemic mastocytosis we obtained FDA feedback on expedited approval pathways and initiated registration trials for avapritinib in both advanced and indolent systemic mastocytosis. We reported compelling clinical proof of concept data for BLU-667 and rapidly advanced our trial in the global expansion. We amended our ARROW protocol to allow for a potential expedited pathway leading to our announced plan to submit our NDA for second-line non-small cell lung cancer and second-line medullary thyroid cancer in the first half of 2020.

Through our new collaboration with CStone Pharmaceuticals, we advanced an efficient development strategy for BLU-554 in hepatocellular carcinoma and opened a significant opportunity to bring our three lead therapeutic candidates to patients in China. Finally, we advanced our four therapeutic candidate BLU-782 into the clinic, while expanding our research pipeline with two new wholly owned research programs. As we enter 2019, we are fast approaching a critical inflection point, our transformation into a commercial stage company. In preparation for this milestone we recently announced our 2020 Blueprint vision, a two-year strategy to launch our global commercial business.

Under this strategy, by the end of 2020, we expect to have two marketed products and at least four pending marketing applications in the US or EU. In addition, we expect to have six clinical stage therapeutic candidates and up to eight research programs as we advance new development candidates into the clinic and continue to invest in our research pipeline. More specifically, we envision a steady stream of near-term catalysts across our business this year. In the second quarter, we plan to submit our first NDA for avapritinib, for PDGFR alpha and fourth-line GIST. In addition, we plan to disclose updated data for avapritinib in both GIST and advance systemic mastocytosis. Additionally, we plan to share updated BLU-667 data and complete enrollment of registration cohorts in second-line non-small cell lung cancer and second-line medullary thyroid cancer.

In the second half of the year, we plan to report initial data from our Phase 2 PIONEER trial for avapritinib in indolent systemic mastocytosis. In addition, we expect to complete enrollment of avapritinib registration trials in third-line GIST and advance systemic mastocytosis and initiate new registration trials for avapritinib in second-line GIST and BLU-667 in first-line non-small cell lung cancer. Finally, we plan to hold our first R&D Day in the second half of the year and share new details on our research pipeline.

Through all of this activity, we're poised to impact patients' lives globally and rapidly expand our business. And our first step on this path is to work with regulatory authorities and the clinical community to bring avapritinib to GIST patients.

With this in mind, I'll now ask Kate, our Chief Operating Officer to discuss our precision medicine approach in GIST. Kate?

Kate Haviland -- Chief Operating Officer

Thanks, Jeff, and good morning everyone. Avapritinib is a highly selective KIT and PDGFR alpha inhibitor which like our compounds was designed in-house by our scientists at Blueprint Medicines. The consistency of avapritinib clinical activity in both GIST and systemic mastocytosis gives us confidence in the significant opportunities we have to provide important benefits to a wide range of patients by treating the underlying genomic drivers of their disease. Across the multiple GIST in SM populations we're targeting, we believe there are at least 30,000 patients in the US, EU5 and Japan. We go with strong sense of urgency to make sure that avapritinib is made available globally to patients who could benefit from treatment. To ensure we meet this goal, we have three areas of focus.

Our first area of focus is our initial NDA submission for PDGFR alpha Exon 18 mutant GIST and fourth-line GIST. Currently, there are no effective treatments for these parts of the disease and patient prognosis is poor, underscoring the urgency to bring forward new treatments as quickly as possible. As we saw the results emerging from the Phase 1 NAVIGATOR trial, we believe the data we are compelling and has the potential to support accelerated approvals in these population. The data have continued to mature favorably over time and our confidence in pursuing an accelerated approval approach has increased.

Our second area of focus is advancing a confirmatory study in third-line GIST comparing avapritinib to Stivarga, the current standard of care. This approach gives us the opportunity to bring avapritinib to a larger population of GIST patients, move up in the treatment paradigms, and obtain a full approval in fourth-line GIST. We pursue the development strategy which acknowledges the current approach to the treatment of GIST, which is based on the use of approved products sequentially, so that we could execute this study quickly. And indeed, this strategy has resulted in rapid execution of the global VOYAGER study and the plan to submit a supplementary marketing application for the third-line GIST in 2020 right on the heels of our potential first approval in GIST.

Our third area of focus is to advance the precision medicine treatment approach in GIST over the longer term. Our goal is to develop transformative therapies against the genomic drivers of GIST and to partner with healthcare providers to pair the right treatment to the right patient to optimize outcomes. We believe we're uniquely positioned to drive the shift in treatment by leveraging our growing understanding of the molecular basis of the disease through our broad clinical experience. And combining that understanding with the knowledge -- and knowledge with our ability to rapidly design and develop precision therapies. Many GIST experts we work with view molecularly targeted medicine as a future of GIST treatment. This view is reinforced by our clinical results demonstrating the impact of avapritinib across multiple GIST mutational profiles.

At the SETAC meeting last fall, we presented new data at that showed avapritinib is most active in about 80% of patients who do not have two specific resistance mutations in the KIT gene. These are the patients who are most likely to receive important benefits from treatment with avapritinib and the Group, we will be enrolling in the upcoming COMPASS-2L study. These data further solidified for us and our clinical expert advisors that a precision medicine approach, the treatment of GIST is the best way to optimize patient outcomes.

We understand there are challenges to changing any treatment paradigm. However, we believe it is our responsibility to deliver the best possible outcome to patients, even if it means shaking up the status quo. This responsibility starts by developing avapritinib a truly novel investigational therapy in ways that can provide perceptible and highly meaningful benefit to patients and their treating physicians participating in our studies. This kind of transformative impact will facilitate the education of physicians and patients globally on the benefits of mutation testing and provide a clearer value to healthcare systems around the world. We are excited to be on the leading edge of this effort and fundamentally, we think it is the right approach for patients.

Importantly, we are not stopping with avapritinib. Our scientific platform has allowed us to efficiently advance other compounds to potently and selectively target resistance mutations that are not effectively addressed by any of the approved or investigational therapies for GIST. We look forward to sharing more information about this research at upcoming medical meetings or at our R&D day later this year.

We are excited by the near-term opportunities for avapritinib in GIST which comprise a strong foundation that we'll continue to build upon as we pursue a precision medicine approach to the treatment of GIST. Our continued investments in earlier scientific initiatives focused on GIST along with our broad development efforts across multiple GIST patient populations with avapritinib demonstrate our leadership and commitment to substantially improving outcomes for all GIST patients.

I'd now like to turn the call over to Andy to review our clinical programs.

Anthony Boral -- Chief Medical Officer

Thanks, Kate. I want to begin by highlighting the top line data from the NAVIGATOR trial, which we first disclosed in early January and we'll use in our planned NDA submission for PDGFR alpha and fourth-line GIST in the second quarter. In PDGFR alpha GIST, the overall response rate was 86% and the median duration of response was not reached. In fourth-line GIST, the overall response rate was 22% and the median duration response was 10.2 months. Safety results were consistent with previously reported data. Given the robustness of the data and the lack of approval of approved treatments for these forms of GIST, we are confident in our approach and look forward to working with FDA during the review period. In addition, we plan to present the detailed registration data in the first half of the year.

I'm also pleased to share that the PIONEER trial of avapritinib in indolent systemic mastocytosis is ramping up with the activation of new sites around the world. As a reminder, we reported compelling data for several patients with indolent systemic mastocytosis enrolled in our Phase 1 EXPLORER trial at the ASH Annual Meeting in December. All seven of these patients had profound improvements on objective measures of muscle burn including bone marrow mast cells and serum tryptase, which we think provide compelling evidence of clinical activity in this population. Our one of the PIONEER trial is designed to evaluate three low doses of avapritinib with the goal of optimizing the risk benefit profile for chronic therapy in the indolent population. During this part of the trial, which is now ongoing, we expect to pick a recommended dose, validate the patient reported outcomes survey, which will serve as the registration endpoint in part 2 and generate initial safety and efficacy data, which we plan to present in the second half of the year.

Moving now to BLU-667. We're excited to report today that the FDA has granted Breakthrough Therapy Designation to BLU-667 for the treatment of RET mutation-positive medullary thyroid cancer that require systemic treatment and for which there are no acceptable alternative therapies. This is our first breakthrough therapy designation for BLU-667 representing continued forward progress for the program. In the first half of this year we plan to present updated data from the ARROW trial, including the first significant positive data from the expansion portion where all patients initiated treatment at the recommended Phase 2 dose.

In addition, we plan to complete enrollment of patient cohorts for second-line non-small cell lung cancer and second-line medullary thyroid cancer in the second quarter of 2019, which will be used to support a planned NDA submission in the first half of 2020.

I'd like to close by reminding everyone about the breadth of our clinical activities. As we entered 2019, we're preparing our first NDA in conducting our -- or planning seven registration trials for avapritinib and BLU-667. We expect to make progress across all of these programs this year, setting up multiple planned registration data disclosures and regulatory submissions in the US and in Europe in 2020. Reflecting on my four years at Blueprint Medicines, I'm thrilled to see our vision realized and I'm proud of the employees who are working tirelessly to deliver for patients.

I'll now turn the call over to Mike to review our financial results for the fourth quarter.

Mike Landsittel -- Vice President, Finance

Thanks, Andy. So, earlier this morning we reported detailed fourth quarter and full year 2018 financial results in our press release. For today's call, I'll just touch on a few financial highlights from the quarter and year. First, we entered 2019 in a strong financial position with $494 million in cash, and we continue to expect that our cash runway will be sufficient to enable us to fund our operations into the second half of 2020. Second, collaboration revenues increased to $44.5 million for the full year 2018, primarily due to the $40 million upfront payment from our collaboration with CStone Pharmaceuticals. We also continue to recognize a portion of the upfront and milestone payments received under our collaboration with Roche on a quarterly basis.

Third, there was an increase in total operating expenses of $32 million in the fourth quarter compared to the fourth quarter of 2017 and $119 million for the full year 2018 compared to 2017. These quarter-over-quarter and year-over-year increases reflect the expansion of our clinical portfolio with the initiation of new registration enabling clinical trials for avapritinib and GIST and systemic mastocytosis, as well as the expansion of the ongoing Phase 1 ARROW trial of BLU-667 in RET-altered cancers.

In 2019, we expect a continued step increases in operating expenses as we build out our commercial capabilities and initiate registration enabling trials for avapritinib and second-line GIST and for BLU-667 first-line non-small cell lung cancer. We also expect to continue to execute our clinical development plan for BLU-554 through our ongoing collaboration with CStone Pharmaceuticals, which demonstrates (technical difficulty) to effectively and efficiently manage our portfolio. Overall, we believe our continued strong financial position and responsible program management positions us well to meaningfully advance our clinical and research pipeline to build the company and potentially deliver our first approved medicine to patients in the year ahead.

With that, I will now turn the call over to operator for questions. Operator?

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Terence Flynn with Goldman Sachs. Your line is now open.

Jason Jakoby -- Goldman Sachs -- Analyst

Hey guys, this is Jason on for Terence. For BLU-667, did you guys request breakthrough designation for both MTC in line or was it just MTC? And then for the long setting, just how do you think your drug stands up against -- and the competitors out there? Thank you.

Jeffrey Albers -- Chief Executive Officer, President and Director

Hi, Jason, this is Jeff. I'll take those questions. So on the first one, which was around BTD, I think it's the same as we've always talked about, that we don't comment on any planned or pending regulatory filings. And then just as a reminder, our approach is and always has been -- as we move new programs in the clinic, first we focus on establishing clear clinical proof of concept. Then we work with regulators to identify potential accelerated path as we commented in the prepared remarks. We amended our protocol for BLU-667 in the second half of last year.

And then from a trial perspective, we continue to rapidly enroll the trial. We've guided now to being fully enrolled either in March or the second quarter for the two potential registration cohorts which namely our second-line non-small cell lung cancer and second-line medullary thyroid cancer. On the second question of comparing to competition, we continue to believe that BLU-667 is a very active molecule and we'll -- I'm trying to thinking the right way to say this, without guiding will addresses the need of a broad set of patients that have RET-altered cancers and we look forward to providing a robust clinical update at ASCO potentially this year.

Operator

Thank you. And our next question will come from Marc Frahm with Cowen and Company. Your line is now open.

Marc Frahm -- Cowen and Company -- Analyst

Hi, guys, thanks for taking my questions. First on the planned filing in GIST, have you had your formal pre-NDA meeting at or -- I know there are probably were some delays with the government shutdown or have you at least managed to schedule it?

Jeffrey Albers -- Chief Executive Officer, President and Director

Thanks, Marc. Andy, why don't you take that one, so that our path to the NDA.

Anthony Boral -- Chief Medical Officer

Yes. So, as Jeff said, we don't comment specifically on a planned ongoing regulatory interactions. We are on track for our filing with avapritinib in GIST both in the Exon 18 PDGFR alpha group and the broader fourth-line group for the first half of this year and we don't anticipate any delays to that plan.

Marc Frahm -- Cowen and Company -- Analyst

Okay. And then maybe this for Kate. When you start thinking about building out the sales force, can you just talk a little bit about kind of the size and scope of the team you think you need to assemble for this initial label kind of timing of that build? And then as you've gotten into the market research, the treatment lines can start to fall apart once we get to say third-line in GIST, how many people do you think are actually you're going to be encompassed in this initial label with PDGFR and fourth-line?

Kate Haviland -- Chief Operating Officer

Thanks, Marc, for the question. So you probably saw the news at the end of last year that we hired our Chief Commercial Officer. And -- that your first question around the commercial build and infrastructure will be a subject of future conversations that we're looking forward to have. And an Christi will be able to comment on those as those plans come together. In terms of the opportunities that we continue to believe that, that just is the amount of medical need that patients experience, particularly as we look at the late-line patients where they have no treatment options currently and the prognosis is very poor, as a significant opportunity to really improve their outcomes. And so from a population perspective, we -- you will see in our filings, we know there are about 5,000 to 6,000 patients progressed to third-line GIST in a subset will continue to progress to fourth-line. And so we consider this an important opportunity for avapritinib to optimize outcomes for those patients.

Marc Frahm -- Cowen and Company -- Analyst

Okay, thank you.

Operator

Thank you. And our next question comes from Arlinda Lee with Canaccord. Your line is now open.

Arlinda Lee -- Canaccord -- Analyst

Hi guys, thanks for taking my questions. Could I ask maybe a couple of questions. When you commence for breakthrough designation, what package did you sign up, show to the FDA? And then secondly, on your RET program, can you comment on maybe anything you've seen in terms of resistance mutations, we've heard that competitor addressed -- had reflected this and just kind of curious if you can able to enroll any of these patients' trial or have any comments on resistance mutations that might be emerging from your data set? Thanks.

Jeffrey Albers -- Chief Executive Officer, President and Director

Thanks, Arlinda. This is Jeff. I'll take that one. So in terms of packages, I mean it's always in any regulatory filing you pull together clinical data as it emerges, so I don't think there's anything distinct or unique worth commenting in this regard. The big factor is response rate and also duration of response, because when you're thinking about accelerated approval pathway, are the areas of focus and that's true across all of our programs. In terms of resistance mutation, we have not seen that to date, and if it's always with any of our programs something that we watch for, we track closely and would be or will be subject to any medical conference presentations that we give in the future.

Arlinda Lee -- Canaccord -- Analyst

Thank you.

Operator

Thank you. (Operator Instructions) Our next question comes from Michael Schmidt with Guggenheim Securities. Your line is now open.

Charles Zhu -- Guggenheim Securities -- Analyst

Hey guys, this is Charles Zhu calling in for Michael Schmidt. Thanks for taking the question and congratulations on the quarterly progress. I've got a couple of questions, first on avapritinib. Given that the COMPASS study will exclude V654A and T670I mutations, what would you say are the potential readthroughs toward utilization in the third and fourth-line since those trials or an all comers?

Kate Haviland -- Chief Operating Officer

Sure. Hi, this is Kate. I'll take that question. So, we described a little bit of our development strategy which is to really have accommodated the current treatment paradigm in GIST which is as you just mentioned are sequential treatment line of therapy approach and the later lines of treatment. And that's really allowed us to move very quickly and executing those studies and enable our ability to file an NDA and as Jeff discussed potential in record time. I think when we think about the approach to second-line, which is focused on the 80% of patients who do not have those two mutations that you mentioned, what we believe is that those patients may be very well served by the current standard of care which is Sutent. And some data to indicate that Sutent is particularly active in those mutations. What we do know is that patients will progress and so they -- our view would be that all patients with GIST at some point in their treatment cycle will have an opportunity to receive treatment with avapritinib.

Charles Zhu -- Guggenheim Securities -- Analyst

Okay. And what is your view on KIT mutation frequencies as patients progressed through these lines, particularly around these V654A and T670I? And can investors expect additional data cuts along those mutations for the VOYAGER and NAVIGATOR trials? Thank you all.

Jeffrey Albers -- Chief Executive Officer, President and Director

So, this is Jeff. I'll take that question. I think, Kate just laid out their rationale quite effectively both in the prepared remarks and in that answer. But I think it's important to keep in mind that we think this is just a first step. This is almost independent of avapritinib, our first step in where the treatment of GIST is going. And it's going to be avapritinib but it's going to really be for all therapies, those that are both already available to patients as well as, as those in development or plan for future development to credibly articulate where they're creating or providing the greatest benefit that our understanding of the underlying drivers of disease is rapidly evolving as a community and there's going to be opportunity to really pair the right treatment with the appropriate patients. So as we continue to share data, we will look for ways to put a finer point on those distinctions on where you're seeing activity, what type of activity by mutation. So you should expect that to be part of our medical conference updates going forward.

Charles Zhu -- Guggenheim Securities -- Analyst

Okay, great. And then just one more regarding systemic mastocytosis. Can you provide any additional incremental color on the patient reported outcomes tool and potentially highlight some of the key similarities and differences between what you previously presented at ASH in advanced SM versus what you will use in indolent disease?

Anthony Boral -- Chief Medical Officer

This is Andy, I'll take that question, Charles. So, we've been -- we are really thrilled with the data that we presented at ASH at the end of last year with avapritinib and advanced systemic mastocytosis. As you saw, we saw a statistically significant improvement with our mastocytosis specific PRO across multiple measures and that correlated nicely with the profound decreases and mast cell burden, mast cells in the bone marrow tryptase D816V allele burden. I think that really shows that reducing mast cells is critical for reducing symptoms in mastocytosis. We would expect that to be true in both in advanced disease and in indolent disease.

Now the indolent -- does the indolent systemic mastocytosis PRO that we've created is very similar, but a little different from the advanced PRO the indolent PRO is now being used in the PIONEER study.

And I'd say that you have the many of the basic concepts -- some concepts are very similar around rash, around GI symptoms. I think you're fatigue. There are subtle differences, but we do think that there are close enough that improvement in the advanced SM PRO that we saw in the indolent -- the seven indolent patients on the advanced study, we predict that they would, you'd see similar results for PN1 PRO (ph).

Charles Zhu -- Guggenheim Securities -- Analyst

Great. Thank you very much for taking my questions. And congrats again on the quarter.

Operator

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Jeff Albers for any closing remarks.

Jeffrey Albers -- Chief Executive Officer, President and Director

Thank you, operator and thanks everyone for taking time to join us this morning and for your continued support of Blueprint Medicines. And we look forward to updating you further throughout 2019 as we advance our lead therapeutic programs toward potential approval. Thanks a lot.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. And you may all disconnect. Everyone have a great day.

Duration: 31 minutes

Call participants:

Jim Baker -- Vice President, Corporate Affairs

Jeffrey Albers -- Chief Executive Officer, President and Director

Kate Haviland -- Chief Operating Officer

Anthony Boral -- Chief Medical Officer

Mike Landsittel -- Vice President, Finance

Jason Jakoby -- Goldman Sachs -- Analyst

Marc Frahm -- Cowen and Company -- Analyst

Arlinda Lee -- Canaccord -- Analyst

Charles Zhu -- Guggenheim Securities -- Analyst

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