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Edited Transcript of SPPI.OQ earnings conference call or presentation 4-Nov-20 9:30pm GMT

·45 min read

Q3 2020 Spectrum Pharmaceuticals Inc Earnings Call IRVINE Nov 5, 2020 (Thomson StreetEvents) -- Edited Transcript of Spectrum Pharmaceuticals Inc earnings conference call or presentation Wednesday, November 4, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Francois Lebel Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer * Joseph W. Turgeon Spectrum Pharmaceuticals, Inc. - President, CEO & Director * Kurt A. Gustafson Spectrum Pharmaceuticals, Inc. - Executive VP & CFO * Thomas J. Riga Spectrum Pharmaceuticals, Inc. - Executive VP, COO & Chief Commercial Officer ================================================================================ Conference Call Participants ================================================================================ * Alethia Rene Young Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research * Edward Patrick White H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst * Maurice Thomas Raycroft Jefferies LLC, Research Division - Equity Analyst * Mayank Mamtani B. Riley Securities, Inc., Research Division - Research Analyst * Reni John Benjamin JMP Securities LLC, Research Division - MD & Equity Research Analyst * Yue-Wen Zhu Guggenheim Securities, LLC, Research Division - Associate ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, ladies and gentlemen, and welcome to Spectrum Pharmaceuticals' Third Quarter 2020 Earnings Call. (Operator Instructions) And as a reminder, this conference call may be recorded. I would now like to turn the conference over to your host today, Mr. Kurt Gustafson, Chief Financial Officer. Sir, the floor is yours. -------------------------------------------------------------------------------- Kurt A. Gustafson, Spectrum Pharmaceuticals, Inc. - Executive VP & CFO [2] -------------------------------------------------------------------------------- Thank you, operator, and good afternoon to everyone. Thank you for joining us today for Spectrum Pharmaceuticals' Third Quarter 2020 Financial Results Conference Call. Our third quarter financial results press release was sent out earlier this afternoon and is available on our website at www.sppirx.com. Joining me on the call today from Spectrum Pharmaceuticals will be Joe Turgeon, President and CEO; and Dr. Francois Lebel, Chief Medical Officer. Before we get started, I would like to reference the notice regarding forward-looking statements included in today's press release. This notice emphasizes the major uncertainties and the risks inherent in the forward-looking statements that we will make this afternoon. These statements are not guarantees of future performance, and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. With that, let me turn the call over to Joe Turgeon, CEO of Spectrum. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Kurt. Good afternoon, everyone, and thank you for joining us today on the call. As always, I really appreciate your interest in Spectrum. Today, I'm pleased with the progress that Spectrum has continued to achieve over the course of this entire year, and that's despite the challenges of the pandemic and the impact it's had across our industry. While Spectrum isn't immune to the impact of the pandemic, our staff has demonstrated dedication, resilience and focus to position the company for a strong finish in 2020. We have a number of key milestones coming up in the next couple of months. We'll be meeting with the FDA to review a filing strategy based on the positive results we announced earlier in the quarter for poziotinib. These data demonstrated that poziotinib met the prespecified primary endpoint in patients with non-small cell lung cancer, HER2 exon 20 insertion mutations. This is a positive outcome and a significant for Spectrum and for the patients with this devastating disease. We'll also be providing an update on the overall poziotinib program, including dosing strategy and top line results from cohort 3 prior to the end of the year. Last week, we announced that the FDA was deferring action on the BLA for ROLONTIS. The reason for the deferral was the agency's inability to inspect the Hanmi bioplant in South Korea due to travel restrictions related to the COVID-19 pandemic. The FDA confirmed that this was not a complete response letter, otherwise known as a CRL. This means that our file remains active. We have answered all the inquiries from the FDA, and we're not aware of any outstanding items other than the inspection. We'll be prudent with our financial resources and have gated certain activities, pending further feedback, or action from the FDA. Regarding the ROLONTIS plant inspection, our partner, Hanmi Pharmaceuticals, is a well-established global biopharmaceutical player with a world-class manufacturing facility. Hanmi is the second largest pharmaceutical company in Korea, behind only Samsung. They're prepared for the inspection and willing to be accommodative to the needs of the FDA as it strives to meet the regulatory obligations. They've been a great partner and are working in tandem with Spectrum to obtain an approval for ROLONTIS as soon as is possible. I'm really confident in our ability to meet our corporate objectives and advance our programs with the aspiration of bringing new treatments to the patients with cancer who need it. And with that, I'm going to turn over the call now to Dr. Francois Lebel, our CMO, for an update on our clinical development progress. Dr. Francois? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [4] -------------------------------------------------------------------------------- Good afternoon, everyone. It's good to be with you today for a short update. We have discussed previously the positive outcome for cohort 2 of the ZENITH20 clinical trial. We remain very excited by these results and look forward to our pre-NDA discussion with the FDA in the near term. Let me remind you that there is no approved treatment for patients with HER2 exon 20 insertion mutation in non-small cell lung cancer, and we believe pozi has the potential to fill an important therapeutic gap in an area of great medical need. Patients enrolled in the ZENITH20 cohort 2 received 16-milligram of poziotinib once daily. Most patients were heavily pretreated, including chemotherapy and immunotherapy. The primary endpoint was objective response rate as defined by RECIST 1.1. The intent-to-treat analysis demonstrated an ORR of 27.8%. The observed lower bound of 18.9% exceeded the prespecified lower bound of 17% with a 95% confidence interval. At the data cutoff, with a median follow-up of 8.3 months, the responses were durable with a median of 5.1 months and 7 patients continued to receive drug after 1 year. Progression-free survival was 5.5 months with a disease control rate of 70%. The safety profile was in line with the type of adverse events seen with other second-generation tyrosine kinase inhibitors. We also presented the results for cohort 2 at the European Society for Medical Oncology, or ESMO, at their virtual congress in September 2020. This was the first presentation of the medical and -- to the medical and scientific community of the positive results for this large registrational trial. We are preparing for the pre-NDA meeting with the FDA for pozi, which has already been scheduled. We will discuss the path forward to registration seeking initially an indication for the treatment of patients with previously treated, locally advanced or metastatic non-small cell lung cancer with HER2 exon 20 insertion mutation. Additional cohorts are still underway in this pivotal trial. Results for both cohorts 1 and 2 have been reported and cohort 4 in the first-line HER2 exon 20 insertion mutation is now actively enrolling at 8-milligram BID. We plan to update you further before the end of the year on our poziotinib dosing strategy and the fully enrolled cohort 3 in first-line EGFR non-small cell lung cancer patients that received 16 milligrams in a single daily dose. The exploratory cohort 5 is enrolling well with over 110 patients to date, and successfully provides us data to further define the minimal effective dose. We have recently stopped enrollment in the 10 milligram per day dosing arm as during safety reviews, it demonstrated an (inaudible) safety profile but suboptimal antitumor activity. An indirect benefit of this early action is to accelerate the enrollment in our 6- and 8-milligram BID dosing arms. We will be providing additional data in a future scientific meeting. Now let me shift to ROLONTIS. Our BLA for ROLONTIS is supported by robust clinical data from 2 large randomized clinical trials. ROLONTIS met the primary endpoint of noninferiority in duration of severe neutropenia and met all the secondary endpoints. The safety profile was similar to pegfilgrastim. I should mention here that we will be presenting a poster at the San Antonio Breast Cancer Virtual Meeting taking place this coming December 8 to 11. The poster will be available for viewing prior to the meeting and shows the pool and analysis of 2 Phase III trials demonstrating the strength of our clinical package. As a reminder, enrollment in our same-day dosing study continues. This is an exploratory study that evaluates the dosing of ROLONTIS on the same day as chemotherapy. We expect to have data by the end of this -- of the year, that will determine whether we move to an expansion phase of this study. As to the deferred action on our ROLONTIS filing, we have answered all questions from the FDA related to the review of the BLA, and we've had advanced labeling discussions. On the manufacturing side, we have conducted multiple mock inspections of our plant and are exploring ways to expedite the inspection, possibly using alternative methods to ensure the earliest completion of the review of our BLA during this COVID-19 pandemic. We look forward to updating you on important program milestone in the next 2 months including the outcome of our poziotinib registration discussion with the FDA. I will now turn it over to Kurt for some insights into our third quarter financials. -------------------------------------------------------------------------------- Kurt A. Gustafson, Spectrum Pharmaceuticals, Inc. - Executive VP & CFO [5] -------------------------------------------------------------------------------- Thank you, Francois. Our SG&A expense for the third quarter of 2020 was $15.1 million versus $13.1 million in the previous year. R&D expense was $24.5 million versus $17.2 million. The increase in R&D expense relates primarily to a purchase of $8 million of ROLONTIS drug substance in the third quarter compared to no purchases in the third quarter last year, as we kept the manufacturing facility in a state of readiness for an FDA inspection. Recall that the accounting rules require us to expense this inventory as R&D expense until the product is approved. But when we sell this inventory, it will be at a 0 cost of goods. Other income expense for the third quarter was a loss of $9.1 million compared to income of $2 million in the period a year ago. The loss is primarily related to a decline in the market value of our equity position in CASI. Our net loss for the quarter was $48.5 million versus $26 million in the comparable period in 2019. On a non-GAAP basis, which primarily backs out stock compensation costs and the change in value of our cost securities, our loss for the quarter was $35.2 million versus $24.5 million in the prior year period. We ended the quarter with $198.3 million in cash plus marketable securities. The cash balance reflects the proceeds from our financing in late July that raised a net $82 million. Operating cash burn, which is the best measure of our ongoing cash flow, was $28 million for the third quarter. This is consistent with where we've been the last few quarters. And as you can see, we are well positioned financially with plenty of runway to continue the development and commercialization of our late-stage assets. With that, let me now hand the call back over to Joe. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [6] -------------------------------------------------------------------------------- Thank you, Kurt, and thank you, Dr. Francois. I think you can see from everyone's remarks that Spectrum continues to make strong and steady progress on our pipeline. In the coming weeks, we'll be doing all that we can to facilitate the completion of the inspection of our ROLONTIS manufacturing facility. We look forward to updating you later this year on our FDA discussions on the registrational pathway for pozi, and to sharing additional results for our ongoing cohorts in the ZENITH20 clinical trial. Let me remind you that we will be participating in several upcoming health care investor conferences and hope to connect with many of you at that time. Once again, I'd like to thank our entire team for their hard work, their dedication in these unprecedented times. We look forward to keeping you informed on our future progress. And with that, I'd like to open up the call for questions. Operator, if you could open up the call, please, I'd appreciate it. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Your first question comes from the line of Maury Raycroft from Jefferies. -------------------------------------------------------------------------------- Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [2] -------------------------------------------------------------------------------- So first question is on ROLONTIS. So Francois mentioned label discussions. Just wondering if you can elaborate on that. And then you mentioned the mock inspections. And I'm wondering if that's something FDA asked for and how that could help move the process along? And I guess, is FDA considering potential to do a virtual inspection? -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [3] -------------------------------------------------------------------------------- Yes. Francois, why don't you take it, and I'll jump in after. Your first -- there's really 3 questions in there. Let's start with the label question you asked. And Francois, any comments there? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [4] -------------------------------------------------------------------------------- Right. Sure. So as we've indicated in my remarks, and Joe's, the -- look, to our knowledge, right, we have received, during the review of this file, many questions. We believe that we've answered all of them and that the FDA was satisfied. But of course, we don't know that until they approve this drug. To our knowledge, the only thing outstanding right now is the inspection of our manufacturing -- our main manufacturing plant. I think the second component was, would they consider a different -- an alternative form of inspection? So actually, I was just reading earlier today that the FDA has actually issued a statement yesterday that they're in the process of developing guidance for interactive video GMP evaluation. So that's one thing that we certainly would be open to. We have not specifically talked to them about that yet. And as you may know, the European agencies are conducting plant inspection using technology like that. FDA had issued guidance for priority drugs, that they were considering that. But now the news of yesterday is that they are in the process of developing guidance for our other drugs. So we look forward to hearing more from that. And I can't remember the third component of your question. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [5] -------------------------------------------------------------------------------- Yes. I'll take that, Francois. I'll just add one thing to what Dr. Francois said on what he said this time. It's important to understand that the agency certainly has the authority to conduct an inspection in a variety of different ways. And keep in mind, too, that look, for example, this plant has been inspected by the Korean authority, so maybe that's something that can help. We don't know. But bottom line is, we're going to try everything we can. And it's good news that in unprecedented times, they're looking to change the way they do business because you kind of have to. And I want to stress another thing. We are absolutely ready for this inspection. We've been ready for a long time. We welcome it. As a matter of fact, the third part of your question was the mock inspections, was it required? They're certainly not required by the agency. We do that to make sure we're ready. And I can tell you, we have Spectrum boots on ground there. We have Hanmi, which I mentioned, is a world-class manufacturer with a world-class plant. There are people already, and we work very closely with them with these mock inspections. And we have a third leg to the stool. We have outside experts we've hired to run these -- not only run these mock inspections, but also help the readiness. And these are people who have done this for a living. They do this -- they know exactly what people -- what the FDA is looking for an inspection. So we feel we're ready. We welcome the inspection and we can't wait. -------------------------------------------------------------------------------- Maurice Thomas Raycroft, Jefferies LLC, Research Division - Equity Analyst [6] -------------------------------------------------------------------------------- Got it. That's all really helpful perspective. And second question was on the pre-NDA meeting. Just wondering if you can provide some insight into the case that you're going to make to try to persuade FDA. I guess will it include post-hoc analyses and reconciling data from cohorts 1 and 2? Or will the argument be more around having FDA factor in new data from cohort 3 and cohorts 4 through 7 as you get the data from those additional cohorts? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [7] -------------------------------------------------------------------------------- Sure. So well, obviously, we're pleased that cohort 2 and -- met its primary endpoints. And that's the critical ingredient that you need to have a discussion with the FDA. So our request to the FDA, as I indicated in my remarks, is that we're seeking and -- period of first approval for that particular indication for that cohort, which is in previously treated HER2 exon 20 mutation in non-small cell. The cohorts were all pre -- as prespecified endpoints, they're all independent. The FDA had agreed to that. So a positive outcome in cohort 2 is not, in theory, not affected by what happens in cohorts 1, 3 or 4. So that's the good news. That's what we're asking at this time. And obviously, once we've had the meeting, which will be soon, we will update you on the outcome. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- Your next question comes from the line of Michael Schmidt from Guggenheim Securities. -------------------------------------------------------------------------------- Yue-Wen Zhu, Guggenheim Securities, LLC, Research Division - Associate [9] -------------------------------------------------------------------------------- This is Charles Zhu on for Michael Schmidt. I had a couple regarding poziotinib. I guess starting off, the ZENITH20 cohort 3, that should be reading out by year-end. Given that this is a less heavily pretreated population relative to cohort 1, how should we think about, I guess, patient willingness or ability to tolerate poziotinib side effects at the 16-milligram dose? And what could this mean for dose interruptions, discontinuations or overall drug exposure? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [10] -------------------------------------------------------------------------------- Sure. So look, we -- until we see the data and present the data and share the data with you, at least the top line data, I can't presume at this point of what we're going to see totally in the safety profile. Clearly, we monitor safety on all our studies, including these cohorts and for signals that would be out of the ordinary. And as you know, we have not had to make any announcement of that sort. So we're going to have to wait for the complete analysis that -- it's not that far away. We're saying you're going to have it before the end of the year. -------------------------------------------------------------------------------- Yue-Wen Zhu, Guggenheim Securities, LLC, Research Division - Associate [11] -------------------------------------------------------------------------------- Got it. Makes sense. And then my next question is on cohort 4 in treatment-naive HER2 patients. I think you made some prior commentary around this cohort having a mix of patients either receiving the prior 16-milligram once-daily dose as well as more recently enrolled patients who were receiving the BID dosing. I guess on this front, my question is, if the alternative dosing schedule does indeed result in a different clinical profile, how would clinicians or the FDA interpret the results coming out of this cohort given that it is in a (inaudible) power? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [12] -------------------------------------------------------------------------------- Yes, sure. So you're absolutely correct. Cohort 4 was started at 16-milligram once a day, and you can think about it in the sense that probably roughly half of the patients originally intended were enrolled at 16 once a day. The -- currently, we're dosing patients at 8-milligram BID. As you can imagine, 8-milligram BID is 16. So we're still dosing at 16, but we are administering it twice, 8 BID. So we think actually, that will be helpful for us to understand better in that pivotal arm or cohort. Is there a difference between when you give 16, but if you give it once-a-day versus twice a day? So we think that could play in our favor, and we are -- we have planned to potential -- to continue the enrollment for a full 70-patient at BID, if necessary. But as we've indicated, we are going to be meeting with the FDA in the near term and we'll have to gauge with them what they would prefer we do here. But from our perspective, we're dosing patients in cohorts 4 at 16-milligram per day. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- Your next question comes from the line of Alethia Young from Cantor. -------------------------------------------------------------------------------- Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [14] -------------------------------------------------------------------------------- Maybe a couple. Can you give us like any kind of more detailed color on how you're thinking about potential time lines of being able to kind of thread the needle on a re-review at Hanmi? Also, just can you talk a little bit about your confidence of a broad ROLONTIS label? And then lastly, just -- can you just talk a little bit about, like, since cohort 3 is coming up pretty quickly, why not maybe just wait and have a dual conversation with the FDA? Or is it just generally, you kind of why do these in sequence because you just don't know when you can book meetings? -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [15] -------------------------------------------------------------------------------- Francois, do you want to take that, or... -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [16] -------------------------------------------------------------------------------- I'm sorry, I -- the -- can you repeat the question? I think I wasn't... -------------------------------------------------------------------------------- Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [17] -------------------------------------------------------------------------------- Sure. So one is like on the estimate around like, kind of can you give us an idea on the timeline for ROLONTIS? Like do you think it will take months, do you think it takes weeks? Like I know it's hard to tell, but just in your best guess, you guys must have a base case. Second one, your confidence on a potential broad label for ROLONTIS. The third is on poziotinib. And I just wanted you to talk a little bit about why not wait for cohort 3 data perhaps in addition to cohort 2 and then go to the FDA? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [18] -------------------------------------------------------------------------------- So... -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [19] -------------------------------------------------------------------------------- Go ahead. Go ahead, Francois. -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [20] -------------------------------------------------------------------------------- So the first question is on ROLONTIS, when do we expect the inspection, is that correct? -------------------------------------------------------------------------------- Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [21] -------------------------------------------------------------------------------- Just like if you can give a little more color on the timing? Like is it months, weeks? Like... -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [22] -------------------------------------------------------------------------------- So I think Alethia, I would agree with you that it's hard to tell. I think we've told you as much as we can. And as I've just mentioned, the FDA released yesterday to the Pink Sheet that they were looking actively into virtual inspection. I don't know how and when that will occur and we don't have information at this time. Obviously, we're actively working to try to make sure that we're ready, as we've indicated. But as well, we are following up with the FDA to make sure that they understand how important this is for us and patient. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [23] -------------------------------------------------------------------------------- On that part -- on that question, Alethia, I'll just add 2 things for color. I want to -- we're not going to sit around. We want to try and do what we can to push this forward and nudge it, I'll tell you that. We're not going to just sit and wait, I can assure you that. But secondly, I'll just mention, the pandemic in South Korea is doing very, very well. I just -- we update with the Hanmi team quite often, and they were saying they're down to like 100 cases a day in the whole country. They're really way down. So I'm hoping that will play to our favor and maybe we'll be able to even do it live. But otherwise, it's good to see the agency moving forward and realizing, hey, like Europe is doing -- we've got to -- just like we're doing in all our businesses, we have to get better with doing these in another way. So we won't sit back. We'll try and nudge them anywhere we can, and we'll work with them aggressively to try and do whatever we have to do as will Hanmi. So again, I wish I can give you an exact date, but that's the best we can give you. But Francois, you want to go ahead with the broad label for ROLONTIS and also the pozi waiting for 3 and the other 2 questions? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [24] -------------------------------------------------------------------------------- So the labeling discussion, I don't think we can get into the details of it. I assume this is labeling for ROLONTIS because obviously, we're going to have to wait until -- normally, when you have a review of a BLA or an NDA, one of the last things you do once you answered all the questions, you get into a discussion about the label. So I've communicated, shared with you that we have been in those type of discussions. So that's a positive from our perspective. Clearly, we still have this inspection issue that we think will get addressed in a timely fashion, but we don't have an exact date. On pozi specifically, Alethia, can you repeat the question? -------------------------------------------------------------------------------- Alethia Rene Young, Cantor Fitzgerald & Co., Research Division - Head of Healthcare Research [25] -------------------------------------------------------------------------------- Just I mean, cohort 3 is not far behind. And like if it hits, it might strengthen your argument with cohort 2. So why not just wait and have that meeting in the first quarter, maybe rather than immediate? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [26] -------------------------------------------------------------------------------- Well, I mean, what I can tell you is that we had an agreed Type C meeting. We agreed with the FDA some time ago as to what we needed to do to declare victory on a cohort, and we've achieved this. So we're not going to wait. We're going full ahead. As we've indicated to you, the -- it's scheduled. We're going to have the meeting. Clearly, we have shared with them the time lines around all our cohorts, and they are aware that cohort 3 and 4, and they're also aware of our exploratory cohort 5. So they're fully aware of all that. And at the meeting, I'm sure it's going to come up for discussion. And if they want to see it before, well, we may do that. But you have to remember, they're independent, though. Cohort 3, positive or negative, should not influence cohort 2 here. -------------------------------------------------------------------------------- Operator [27] -------------------------------------------------------------------------------- Your next question comes from the line of Ed White from H.C. Wainwright. -------------------------------------------------------------------------------- Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [28] -------------------------------------------------------------------------------- I have a few. First, on the ROLONTIS launch. Last quarter, when you were getting ready, you said you were looking at hiring in about 60 FTEs for the launch. And I think you had commented that 21 were already hired. Are you continuing with that hiring now? Are you getting closer? Or are you putting it off until you hear more about the timing to potential approval? -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [29] -------------------------------------------------------------------------------- Yes. Tom, you're leading that. Why don't you answer that? -------------------------------------------------------------------------------- Thomas J. Riga, Spectrum Pharmaceuticals, Inc. - Executive VP, COO & Chief Commercial Officer [30] -------------------------------------------------------------------------------- Ed, how are you? So your recollection is correct. We currently have 21 of the 60 FTEs. And the remaining FTEs are gated to that PAI being scheduled. So the 21 that are on board are really focused in the med affairs area, market access, national accounts and field leadership. So those folks are actively engaged in our preparation efforts. We want to make sure we're on the ready and can pull that trigger in line with the FDA's inspection. So we want to mitigate our [burns] spend for the remainder of the customer-facing staff. But we do have the 21 FTEs that are actively finalizing our preparation efforts and will be ready to go when the agency gets to the facility. -------------------------------------------------------------------------------- Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [31] -------------------------------------------------------------------------------- Great. And so maybe a couple of questions on pozi. One, Francois, just for the cohort 4. When can we expect to see data? And will that data be on 70 patients at the 16-milligram? Or is that going to be data on 70 patients at that 8-milligram BID? I mean they are both 16 milligrams, so I'm just wondering how to think about the data and the timing. -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [32] -------------------------------------------------------------------------------- Yes. So we had -- on the basis of the pharmacologic modeling, the fact that we had seen in cohort 1 and 2 some fairly high-dose interruption and dose reduction, we had decided that we would explore some other way of giving the drug, and the data is coming in as we speak, if you want. So the original end for cohort 4, I believe it was 70 patients. And we were half enrolled, maybe a little more than half enrolled at 16 once a day. And we're going to -- we are currently on track to add 70 patient BID, so -- on cohort 4. So in other words, the same assumption would stand. We will discuss with the FDA at the pre-NDA meeting, if they continue to agree with what we're doing or if they would prefer for us to do otherwise. So I can't answer you today other than say we will have definitely more than the original end at 16 milligram, one way or the other. And if we need to go back to 16, we will do it after discussing the matter with the FDA. -------------------------------------------------------------------------------- Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [33] -------------------------------------------------------------------------------- Okay. And maybe on cohort 5. You mentioned you have over 100 patients to date, and you stopped the 10-milligram dose as suboptimal. I'm just wondering, now looking at the 6- and 8-milligram BID dosing, where do you stand for the number of patients? So when we do see data and if you have any time lines on when we'll see data, but -- that would be appreciated, but how many of them were in that 10-milligram dose that was suboptimal? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [34] -------------------------------------------------------------------------------- Yes. So we -- you've got to remember, cohort 5 started by randomizing patient to 10-milligram, 12-milligram or 16-milligram once a day. And then we amended it, stopped enrolling at 12 and randomized -- and 16 once a day. And more recently, we've been randomizing patient at 10-milligram, 12-milligram and then the BID -- I'm sorry, not the 12, the 10 and the 6 and 8 BID. So we're -- so that's what I'm reporting to you here, that we have 110 patients. The reason that we're mentioning the number is simply because a number of companies have indicated that COVID had affected negatively their enrollment. And we did see a transient impact on our enrollment, but it's going pretty well now. And the fact that we have stopped 10 milligram, and we didn't issue a number. Let's just say that there's enough patients for us to make a decision as to that -- with some certainty around the 10-milligram dosing. And we will obviously have what we need in terms of the BID dosing. The exact time of giving you information, though, probably be before the end of the year, we'll be able to make comments mostly on the safety side, as you know. Efficacy takes a little longer because we want to assure not only responses but durability of response. So we're going to update you in the next 2 months on what's going on, what we're seeing in the various dosing cohorts and including some preliminary information on the BID. -------------------------------------------------------------------------------- Edward Patrick White, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [35] -------------------------------------------------------------------------------- Okay. Great. And maybe just last question for Kurt. That $8 million for the drug substance that was tacked on to the R&D expenses this quarter, will that -- will there be another charge for drug substance next quarter? Or is that really it, we go back to the run rate without that? -------------------------------------------------------------------------------- Kurt A. Gustafson, Spectrum Pharmaceuticals, Inc. - Executive VP & CFO [36] -------------------------------------------------------------------------------- Yes. Thanks, Ed. So we were -- we had started and continued to be manufacturing product as we exited the third quarter into the fourth quarter. So there will be some expenses for ROLONTIS drug substance in the fourth quarter. I can't give you a number on how big that will be. But as Joe kind of mentioned, we are going through a process right now in evaluating every piece of spend that's related to ROLONTIS and making sure that is this an activity that needs to happen now? Should it be gated? When should it happen? So we're going line-by-line through our budget to make sure that we're going to be prudent with our spending. So short answer is there will be some spending, but we're taking a hard look at manufacturing, figuring out exactly how much we need to go do. We obviously want to make sure that plant stays in a readiness mode. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- Your next question comes from the line of Ren Benjamin from JMP Securities. -------------------------------------------------------------------------------- Reni John Benjamin, JMP Securities LLC, Research Division - MD & Equity Research Analyst [38] -------------------------------------------------------------------------------- A couple of -- I guess, a couple of questions. I should probably know this, but how many products does Hanmi manufacture worldwide? And I guess, how many are in the U.S.? And has the manufacturing plant been inspected by the FDA before? -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [39] -------------------------------------------------------------------------------- I can't tell you exactly how many. They have multiple products in South Korea and other places in Asia that I can tell you. It's a full-fledged manufacturing. They started out for a long time as a generic company, manufacturing generics. And then they expanded several years ago into drug development. And that's when we got involved with them and got both drugs actually, as you know, Ren, from them. They don't have any drugs in the U.S. today, but they were inspected. My understanding was for a device with the U.S., but no drugs in the U.S. at this time. But certainly several drugs that they have throughout the Asia. -------------------------------------------------------------------------------- Reni John Benjamin, JMP Securities LLC, Research Division - MD & Equity Research Analyst [40] -------------------------------------------------------------------------------- Got it. And when you mentioned that there were activities that you're gating to manage the cash, of course, the (inaudible) and hiring the sales force, for sure. Is there anything else that you are actively managing, at least from a, I guess, the ROLONTIS rollout perspective that we should be aware of? -------------------------------------------------------------------------------- Kurt A. Gustafson, Spectrum Pharmaceuticals, Inc. - Executive VP & CFO [41] -------------------------------------------------------------------------------- Yes, Ren, this is Kurt. I think the key things here would be mostly focused on the commercial side of the business. So as Tom mentioned, on the sales team, you can think about some prelaunch marketing spend as well. We're going to make sure that we maintain a state of readiness for the facility. And Francois also spoke a little bit about some of the continued development efforts that we have with ROLONTIS. And those are some activities that will continue. -------------------------------------------------------------------------------- Reni John Benjamin, JMP Securities LLC, Research Division - MD & Equity Research Analyst [42] -------------------------------------------------------------------------------- Okay. And then just one final one on ROLONTIS, where obviously performance (inaudible) poziotinib. What's the kind of cadence of discussions with the FDA right now? Because this is -- I think this like one of the first times I've heard of a deferral. Is there a back and forth? Or do you just kind of have to wait until they get back to you? -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [43] -------------------------------------------------------------------------------- Well, Francois, you can add to this. But obviously, we're not going to sit back and wait. They have the authority to do things. So like in anything else, you contact the agency, they have so much time to get back to you, kind of that's all laid out. And then we certainly can have discussions on what's next, how can we work with you, we're willing to do whatever it takes. As Dr. Francois said, just yesterday, they issued -- you can see movement on that part for the first time in this because this is new to them. And they issued the statement on moving forward. Europe is doing it, as you heard already. So I think they're going to have to start moving forward. And all I'll tell you is we'll do anything we can to, I'll use the word, nudge them. You have to do it properly, but we have every right to talk to them. We're ready to go and trying to figure out how to do this as quickly as possible. -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [44] -------------------------------------------------------------------------------- Yes. So (inaudible) look, they've given us the deferral, we have had, let's just say, some representation to them to seek clarification. I'm not going to get into the details of how many communication, et cetera. But clearly, we're working closely with them. Obviously, it's a problem. We're not the only manufacturer here who has that problem. And the FDA is very aware. As I've indicated, they've issued some new information about development of guidance yesterday. So we think it's a very active topic, subject. And clearly, we will, as Joe has stated, we will continue to follow-up with them as to what to expect here and especially in time lines. -------------------------------------------------------------------------------- Reni John Benjamin, JMP Securities LLC, Research Division - MD & Equity Research Analyst [45] -------------------------------------------------------------------------------- Got it. And just switching gears to pozi real quick. The FDA meeting that's coming up. I maybe incorrectly just assume that with the trial being a registrational study and the endpoints kind of agreed upon that there likely wasn't much more discussion needed until you just kind of file the application. So what exactly -- I guess, the long-winded way of asking, what exactly are you kind of looking for here? What additional clarity do you think we could possibly get? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [46] -------------------------------------------------------------------------------- Yes. So this is standard. Whatever you think you're going to file an NDA or BLA, it's usual to call a meeting with the FDA, and then you go over either your plan, like you agree on the data set. So for -- I'll give you a specific example. We obviously would provide the efficacy and safety on cohort 2. But the question would be, for example, okay, how much additional data on safety do they want to see? Do they want to see all human exposure? For example, in our case, that's over 1,100 human beings who have received the drug. So we have an extensive database of safety. We need to know from them, do they want to see all the studies that we have done, that our partner has done? Do they want to see -- so it's details like that. Then you have preclinical work, like safety, toxicology in animals. We clearly have done quite a bit of it. We need to know, okay, do they agree that what we've done is what they want or they want something else? And then you go through pharmacology. And so anyway, it goes on and on. So -- and then you can ask them very specific question about anything in the submission. Then you agree on the format. As you know, there is, for these mutation-driven tumors, you need to develop a companion diagnostic. So you have to come to an agreement with them as to what kind of companion diagnostic you're going to have, et cetera. So there's lots of questions. And that's what we're going to be discussing. And -- but there's nothing unusual. This is standard for a pre-NDA or a pre-BLA meeting. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [47] -------------------------------------------------------------------------------- Yes, Ren, our goal is (inaudible). -------------------------------------------------------------------------------- Operator [48] -------------------------------------------------------------------------------- Your next question comes from the line of Mayank Mamtani from B. Riley. -------------------------------------------------------------------------------- Mayank Mamtani, B. Riley Securities, Inc., Research Division - Research Analyst [49] -------------------------------------------------------------------------------- And resilience is the appropriate word, and I understand you are very far from being done for the year. So my first question, if I may, on -- the term you used about pozi dosing strategy update by the end of the year, could you just talk a little bit more in detail about that? I think you said that in the context of cohort 4. And I'm trying to understand if your cohort 3 does not have the kind of limitations we saw with cohort 1. I mean you can really move along with the 16 mg dose with a higher confidence level through the rest of the program. So I'm just trying to connect the dots and follow-up to all the questions that have been asked before, and try to understand what can we learn from you by the end of the year that boils down to pozi dosing strategy update. -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [50] -------------------------------------------------------------------------------- Sure. Let me try to address that. So let's start with cohort 2. So cohort 2, we had agreed prior to doing this study, we had agreed with the FDA as to what we needed to show to make it a meaningful outcome, and we have met that. So that was done at 16-milligram once a day. So in other words, you have a positive trial at a 16-milligram once a day. So -- and that is the main discussion point for the pre-NDA meeting. In other words, we're saying, look, we had an agreement. We've met what we needed to do. And now we would like to discuss what kind of data do you want to see, et cetera. And then the dosing strategy is simply because we knew in cohort 1 that had -- we had analyzed before cohort 2, we knew that we had a fairly high level of dose interruption and dose reduction. So we decided -- we did some [pharmacy] modeling. And we decided that we probably could reduce what's called the Cmax and still stay above the EC50. So in other words, it's not that 16 once a day doesn't work. It's just that we may be able to improve on it. And that's why we're doing the BID and we'll provide data in the near term. But also, we have looked at 10-milligram a day, 12-milligram a day, simply because we know what dose is effective and adds some degree of toxicity and that's 16. But what we don't know is what is the minimal effective dose, like how low can you go? In other words, you might be able to reduce some of the toxicity, but still maintain antitumor activity. And what we've announced to you today is that 10 milligrams as a starting dose is just possibly a little too low to start. In other words, it has to be higher than that. So that's great news. I mean we're learning what is the minimal effective dose. And remember, we have done 12 milligram. We have data that's maturing. And we have 12 once a day, and we have 6 and 8 BID that will be maturing as well, right? We're enrolling, we need more data and a little more time to analyze that data. So all of that together will obviously be discussed with the FDA. They will see 16 once-a-day works, and they will see that maybe we can improve on it, and we'll have that discussion with them. I hope it answers your... -------------------------------------------------------------------------------- Mayank Mamtani, B. Riley Securities, Inc., Research Division - Research Analyst [51] -------------------------------------------------------------------------------- It does. And I really appreciate you laying it out. So just to clarify. So we'll have some sort of apples-to-apples, same population data between 16 mg once a day and then 12 mg once a day and then also 8 mg BID at some point in first quarter or by the end of the year. Is that fair? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [52] -------------------------------------------------------------------------------- So I think what I said is, we're going to definitely be able to make some statement about safety. The efficacy, you have to follow patients longer. So we may not -- we're not going to have a final analysis on the efficacy on some of these cohorts in the next 2 months because we have to follow patients longer. But we'll get a very good indication of -- if we're on the right track with BID. -------------------------------------------------------------------------------- Mayank Mamtani, B. Riley Securities, Inc., Research Division - Research Analyst [53] -------------------------------------------------------------------------------- Yes. And safety is obviously the most important question because we know the drug works. So then my next question on ROLONTIS same-day dosing. Could you just give us a little bit color? It seems like it might be important for commercial purposes. So could you just let us -- remind me how does that trade in your longer-term plan of including your differentiating against biosimilars? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [54] -------------------------------------------------------------------------------- Joe, I assume, you want to take that? -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [55] -------------------------------------------------------------------------------- Yes, you broke up. Could you ask the question again? I was trying to make sure I answer the right question. It kind of broke up, I'm sorry, Mayank. -------------------------------------------------------------------------------- Mayank Mamtani, B. Riley Securities, Inc., Research Division - Research Analyst [56] -------------------------------------------------------------------------------- Sure, sure. No worries. So on the same-day dosing for ROLONTIS. I was just curious, 2 parts to the question. One is, how does this fit in your longer-term plan to compete in a market that will have biosimilars? And then the second part of the question was, what do you expect to learn before the end of the year that will really give you confidence that you really need to run with this formulation? And again, given the commercial implications in mind. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [57] -------------------------------------------------------------------------------- Yes. Okay. First of all, let's -- just to make sure I clarify. The trial is -- that we did, the 2 Phase IIIs, and we're trying to get a label that is not inferior. I want to be clear on that, as you all know, Mayank. So will be the launch label, so to speak. What same-day dosing would be, would be expanding the label down the road. And what Dr. Francois was saying is by the end of the year, we'll know if we get to expand this and go further with a bigger trial to try and get something like that on the label. We would launch without that and what having a same-day dosing would mean, and I can tell you that in the past, other companies have tried to do this and it didn't work. What the advantage would be is when you -- now what happens is when you get your chemo, the next day is when you get your white blood cell factor. You can't do it the same day. It would be a tremendous advantage and a differentiating factor for all the other white blood cell factors in the market today, the biosimilars and the innovative product. If our product works, and we were able to say, listen, this is the 1 drug you can get your chemo and on that same day, inject the patients. The nurses, the patients and the physicians would really love that, and it would be a point of differentiation. So what Francois was saying is, later this year, we'll know where we go with the program. I think Francois, is that all you want to say on that part of it? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [58] -------------------------------------------------------------------------------- Yes. No, exactly. I mean the submission that we have in front of the FDA that we're waiting for the inspection of the plant, as what's called traditional dosing, which is you give the growth factor the day after the chemotherapy. And so that's the data that was positive and in front of the FDA. Separately, because this is not a biosimilar, and it has difference in what's called pharmacodynamic, that means that, that particular -- our drug, ROLONTIS goes preferentially to the bone marrow and stay there -- stays there longer. So that opens up some opportunity for us. So the first -- we are exploring, can we leverage those pharmacodynamic advantage, and we're trying to give the drug the same day. So it's important for management of patient. But obviously, we need to test this, and that's what we're doing. We're in the process of testing that. And that would be a very important differentiator. But it has nothing to do with the current submission, if you want, and the approval that we hope to obtain very soon. This would be further down modifying the BLA later on. -------------------------------------------------------------------------------- Mayank Mamtani, B. Riley Securities, Inc., Research Division - Research Analyst [59] -------------------------------------------------------------------------------- Understood. And my last question, just a quick reminder on the status of the Phase I open-label, FIT study in lymphoma patients. Is that up and running or is that impacted by COVID? -------------------------------------------------------------------------------- Francois Lebel, Spectrum Pharmaceuticals, Inc. - Executive VP & Chief Medical Officer [60] -------------------------------------------------------------------------------- Yes. So we had -- good question. So this is, obviously, an early asset. So as we have discussed today, we're obviously very focused on our late assets. But nonetheless, we remain very excited about the FIT technology. We've had a number of regulatory hurdles that we had to resolve, updating various documentation. And as we are going forward here at sites, we had to deal with the IRB. And many centers are dealing with COVID 19, and they're not particularly enthusiastic right now about the new Phase I study. We're getting there. We're making progress, but it's obviously a lot slower than we want. -------------------------------------------------------------------------------- Operator [61] -------------------------------------------------------------------------------- Speakers, I am showing no further questions at this time. I would like to turn the conference over back to Mr. Joe Turgeon, President and CEO. -------------------------------------------------------------------------------- Joseph W. Turgeon, Spectrum Pharmaceuticals, Inc. - President, CEO & Director [62] -------------------------------------------------------------------------------- Thank you, operator. And listen, this concludes our call. I want to say thank you to everybody for your interest in Spectrum. And if you have any further questions, please feel free to contact us in between. And again, I'll mention, we'll be dealing -- being part of some upcoming financial conferences, and we hope to connect with many of you at these. So with that, operator, we'll conclude the call. I'd like to say thank you for everybody's interest in Spectrum. -------------------------------------------------------------------------------- Operator [63] -------------------------------------------------------------------------------- Thank you, speakers. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.