Q4 2023 Aadi Bioscience Inc Earnings Call
Participants
Dave Lennon; President & CEO; Aadi Bioscience, Inc.
Scott Giacobello; CFO; Aadi Bioscience, Inc.
Loretta Itri; Chief Medical Officer; Aadi Bioscience, Inc.
Joe Catanzaro; Analyst; Piper Sandler & Co.
Liang Cheng; Analyst; Jefferies LLC
Ahu Demir; Analyst; Ladenburg Thalmann & Co. Inc.
Presentation
Operator
Good day and thank you for standing by, and welcome to Aadi Bioscience fourth quarter 2023 earnings conference call. (Operator Instructions) Please note that today's conference is being recorded.
I will now turn the call over to [Audrey Gruls], Head of Corporate Communications for Aadi Bioscience. Ms. Gruls. Please go ahead
Thank you. Good morning and welcome to the Adi bioscience conference call to provide an operational update and review results of the fourth quarter and full year 2023. On the call is Dr. Dave Lennon , our President and CEO; Scott Giacobello, our CFO and Chief Medical Officer, Dr. Loretta Itri.
Today, we will provide an overview of operational activity and select financial results for the fourth quarter and full year of 2023. We will open the line for questions at the end of the call.
Following closing comment, a quick reminder that statements made on the call today 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 annual and quarterly filings with the Securities and Exchange Commission, which can be found at www.SEC.gov or on our website at w. w. w. dot anti bio.com.
In addition, any forward-looking statements made on this call represent our views only as of today, March 13th, 2024 and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements.
With that, I'll turn the call over to Dave for his opening statements. Dave?
Dave Lennon
Morning, everyone, and thank you for joining us today to review our financial and operational results for the fourth quarter and full year of 2023. At Audi, we are focused on unlocking the full potential of ImmTOR inhibition by uniquely combining that technology and the potent and mTOR inhibitors to your line. We believe Napster alignment has potential to deliver deeper inhibition and ultimately better outcomes for patients living with cancers that are dependent on the mTOR pathway in 2023 was a year marked by progress and increasing momentum for the company as we delivered strong execution against both commercial and development goals.
First, PRO sales remained solid, achieving a cumulative $24.4 million for the full year of 2023, representing a 60% growth over prior year PRO2 type penetration in the academic and community settings and is considered the preferred treatment for malignant Piccoma clinically, a key focus for our organization has been realizing the potential of Napster Everolimus for patients with solid tumors harboring either TSC. one or TSC. two in activating alterations.
These type of genetic alterations are thought to activate the mTOR pathway leading to uncontrolled cell growth. And our precision one trial is an interventional study designed to elucidate the potential of Napster, allowing us to treat all types of solid tumors with either of these alterations. As a reminder, the unmet need and TSC. one and TC. two mutated cancers is sizable, whether considering together or independently and represents about 2% of all solid tumor cancer patients.
Our latest internal analysis indicates there are approximately 16,000 new patients with these mutations across a variety of tumor types. Each year in the U.S. alone, with mutations roughly evenly split between genes, each mutation represents a potential multibillion dollar addressable market for Napster TSC. one or TSC. two driven cancers are found across a wide range of tumor types. Clustering and lung gastrointestinal generally are in a breast and gynecological locations and are often very difficult to treat.
We believe PRECISION1 is a cutting-edge trial testing our innovative therapy, Napster alignment in these cancer types, although precision one is designed as a single trial. Each arm is independently evaluated, providing us with the ability to assess one arm separately from the other. Given this design, precision one can effectively be viewed as two separate studies each with its own outcome. In Q4, we provided top-line results from a planned interim evaluation of the first 40 patients enrolled and precision one. These data demonstrated sustained tumor reductions in a heavily pretreated population based on investigator-assessed responses in the first 40 patients across both arms.
As a reminder, for the TSC. one arm, 19 efficacy evaluable patients were included in the cutoff date. For the interim analysis who had at least one post-baseline scan. We reported an overall response rate of 26%, which was within the range of our expectations. Importantly, responses appear to be early, deep and durable. Median time to response was 1.4 months and all responses were ongoing at the time of data cutoff. This is especially noteworthy, given this is a heavily pretreated population with a median of three prior lines of therapy.
Lastly, these responses were seen across four different tumor types supporting a tumor-agnostic indication. In the TSC two arm, we reported a lower response rate, but given these patients were heavily pretreated, including 50% who had had at least five prior lines of therapy. These early TSC two results are challenging to interpret precision. One continues to enroll steadily, and we now expect the trial to be fully enrolled by May. We are still on track for our next planned interim readout, which is expected in Q3 of 2020. For this readout will include a total of 80 patients who have been followed for a minimum of six months.
More evaluate the primary endpoint in the study independently assessed overall response rate as opposed to our December analysis, which reported investigate responses. We expect the study to be completed by the end of 2024 with full data in early 2020. In addition to precision, one enrollment is underway for both of the previously announced Phase two single indication trials for two promising M. two R. driven cancer targets, overactivation and dysregulation of the ImmTOR pathway is commonly found in various tumors and unique delivery and excellent safety profile of Napster alignments provides the opportunity to combat these difficult to treat cancers.
First trial is evaluating next year. Alignments in neuroendocrine tumors or NETs nets are rare with approximately 3,500 patients per year, net of historically had a low response rate treatment with oral rapid logs and other agents, which nonetheless are used clinically and recommended in treatment guidelines today in preclinical animal models, Napster alignments demonstrated improved target suppression relative to other end towards warranting further exploration of Napster alignments in this indication. We're excited about this trial because it provides the opportunity to demonstrate what we believe is necessarily kinases best-in-class efficacy in a known and TOR sensitive tumor type.
The second trial we started last year is evaluating the therapeutic potential of Napster alignments in advanced and recurrent endometrial type endometrial cancer in combination with the aromatase inhibitor, letrozole, endometrial cancer is the most common cancer of the female reproductive tract and one of the few cancers with increasing mortality. There's an estimated 10,000 cases of EC. diagnosed annually in the U.S. alone prior clinical studies that the MTOR. inhibitors, combined with electric fall have yielded promising results and recent changes in the recommended standard of care for early stage disease, great potential opportunity for our combination to be used in these first and second line settings. Both of these open label studies are actively enrolling, and we plan to present initial data later this year.
Rounding out our clinical development program, we also the ongoing trial with combination of ARISE KRAS inhibitor in lung cancer and other solid tumors with a solid commercial foundation provided by CRO robust in both clinical development programs spanning genetically driven tumors and other ImmTOR sensitive tumors and a cash runway into Q4 2025. We are well positioned to realize our ambition of becoming a multi indication, precision oncology company.
I will now turn the call over to Scott for updates on our financial progress. Scott?
Scott Giacobello
Thanks, Dave. We had a solid fourth quarter and ended 2023 with $108.8 million in cash, cash equivalents and short term investments. And early 2024, we implemented measures to streamline our operations and reduce costs, which included headcount reductions in our customer facing operations and corporate functions. Following these measures, we anticipate that our balance sheet will fund operations into Q4 2025 based on current plans.
FYARRO net product sales were $6.3 million for the fourth quarter, representing 6% growth over Q3 2023 and 21% over the prior year quarter. Full year, our sales were $24.4 million, an increase of 60% over prior year sales of $15.2 million. Research and development expenses for the quarter increased to $12.8 million compared to $9.4 million in the prior year quarter.
For the year, R&D expense amounted to $48.9 million compared to $32.7 million last year. This increase was prior and primarily related to the continued progress of the ongoing PRECISION one trial and initiation of the programs and endometrial cancer. Selling, general and administrative expenses for the fourth quarter were $10.3 million compared to $11.1 million in the same period in 2022. For the year.
SG&A expenses totaled $44.5 million compared to $40.2 million in the prior year. This increase is due primarily to higher legal and company infrastructure costs and increased marketing expenses related to FYARRO.
Net loss for the fourth quarter was $16.3 million compared to $13.9 million in the fourth quarter of 2022. Net loss for the year was $65.8 million compared to $60.5 million in the prior year. For more information on our financial performance for 2023. A detailed discussion of the results reported on this call will be provided in our 10 K to be filed later today.
I'll now hand the call back to Dave for his closing comments. Dave?
Dave Lennon
Thank you, Scott. I'm so proud of the progress we made in Q4 and what the team accomplished in 2023. The our remains a valuable asset with sustained demand to help meet the needs of patients with the common. We're making tremendous progress against our clinical development plans with two sizable markets and TSC. one and TSC. two and activating alterations as well, other inventory-driven cancers.
So looking forward to sharing the two thirds interim analysis from Precision one in the third quarter with full enrollment inspected in May and study completion by the end of 2024.
We can now open the line for questions. Operator in Kenya.
Question and Answer Session
Operator
(Operator Instructions)
Joe Catanzaro, Piper Sandler.
Joe Catanzaro
Yes, thanks, Tom. Appreciate you taking the questions here. Maybe first one, I know the first 40 patients were characterized as being very heavily pretreated. So wondering if you have any visibility or updates around what the remainder of the trials look like? And maybe along these lines, whether you've seen any change in enrollment dynamics in any way since since the interim data disclosure? Thanks. And I have one follow-up.
Dave Lennon
Great. Joe, thank you for the question. Always appreciate talking more about precision one. Yes. So the first 40 patients were heavily pretreated, and we saw three or more lines of prior therapy as those patients enrolled in that first 40 group, we anticipate right by the trial design that this is we're going to get a number of late-line patients.
Patients have to have I'm satisfied the criteria for the indication that they enroll in in terms of being having received all appropriate standard of care prior to they're entry and treatment with them. That's your alignment in our trial. And so we anticipate it continuing to enroll later line patients within the trial. I wouldn't comment on the overall nature of what we're going to end up with. We're still enrolling patients in the trial. We'll obviously report out the next or the total 80 patients for the two-thirds interim later this year.
Joe Catanzaro
Okay. Thanks. And then just finally a follow up maybe unrelated to precision one. Wondering if there are any early expectations around when you could report initial data from the endometrial or NET studies appreciate those are still in the early days? And then any updates on the aggressive combo trial? Wondering maybe if there's been any changes there with the aggressive acquisition by but by Bristol? Thanks.
Dave Lennon
Yes, so great questions. I think I mentioned earlier that we do anticipate potentially sharing data on endometrial or neuroendocrine trial later this year. Those are open-label, single-arm Phase two studies, and we have the opportunity to enroll those. We'll share the data when we think it's appropriate and we have something meaningful to say about how and that data is those patients are enrolling and that data is maturing.
I'm happy to say the pace of both studies are actively enrolling patients, and they're so good engagement with the community on generated patients for on each of those trials, which we just think is some initially a great sign in terms of folks' interest on indies, the therapeutic regiments in each of those indications.
And then on the Mirati, BMS collaboration that continues and is ongoing, and we are enrolling patients into that trial and we don't have any further updates at this point.
Joe Catanzaro
Okay, thanks. That's helpful. And I think for the my questions.
Dave Lennon
Thanks, Jeff.
Operator
Thank you. Liang Cheng, Jefferies.
Liang Cheng
Sure. Thank you. On this down for Roger on. So thank you for taking our questions. I guess from us, we have two questions. Why is there a lot of firewall, so gets more PRO in the coming year? Can you provide us any our detailed guidance on or commercial plans?
Second question is about, you know, I know you guys been interacting with FDA about the blood tumor agnostic. So what's your understanding of what's the most important thing for FDA to consider label as a tumor agnostic. Thank you.
Dave Lennon
Great. Thank you, Liang, and thanks for stepping in for Roger. So maybe in terms of fee our outlook, maybe I'll turn it over to Scott to talk a little bit about that and then we'll talk about your second question with Mark. But Scott you want to just comment on the our outlook for the coming year?
Scott Giacobello
Sure, absolutely. I thanks for the question, Lang. Yes, I think for PRO, I mean, as you've seen, I mean we're not going to provide guidance for this year. I think what we've seen over the last few quarters on the sales stabilizing around the $6 million mark or slightly above. And I think so on the expectation there is we continue to be excited about the about Ferraro and the potential to grow there. But I think that over the last few quarters, you've seen the sales stabilizing in that $6 million to $6.5 million range, and I think that's what we would expect for 2024.
Dave Lennon
Thanks, Scott. And it is, you know, we think it is a very our team's done a great job penetrating the market here where available and preferred for Piccoma in the first line setting and unpacked widely recognized as the preferred therapy for Piccoma. It is just an ultra rare population. And ultimately, we may be reaching saturation of that market and expect more incremental growth from here on.
And then your second question was on what are the most important considerations when we think about the FDA's view on the tumor-agnostic indication, I'm going to turn it over to Loretta to give her thoughts on and how we think or how we interpret the FDA's guidance around tumor-agnostic indication and what's most important there. So Brenda, do you want to come in.
Loretta Itri
Sure, and be happy to come. I think from what we have seen recently, perhaps the most important and the most important thing that the agency wants to see in tumor-agnostic studies. It is a variety of different tumor types and what they do not want in a tumor-agnostic studies to see concentrations and on inflammation in certain subtypes of patients, they are looking for a representation of the mutation across a variety of different tumor types. That is why you do a tumor-agnostic study.
So I think that that arm is perhaps the single most important element in terms of their determination regarding whether or not a drug classifies for tumor-agnostic approval. And then of course, I think they are looking for a reasonable response rate and of course, a good safety profile. And in our case, since we already have approval in a single indication, I think they would be looking to see that the safety profile in the diagnostic population closely resembles what we have seen intercontinental.
Dave Lennon
Thanks, Loretta. And just to add onto what Laura was saying, what we saw so far, we have enrolled a very diverse tumor population within our trial. And I think you saw that even in the early results where we had a kind of broad distribution of tumor types that we shared back in December. Thanks, Liana, for the questions. And I think if there's no follow-ups, we can move to the next that are coming through.
Liang Cheng
Thank you. Appreciate it.
Dave Lennon
And thank you.
Operator
Thank you. (Operator Instructions)
Ahu Demir, Ladenburg.
Ahu Demir
Good morning. Thank you so much for taking my questions. I have two questions. A follow-up to Joe's question regarding endometrial cancer. One, could you give us a sense of the type opened, how many sites are open and inclusion exclusion criteria for the patients? And what are we expecting to see this year? How many patients are heavily pre pretreated. If you can provide a little bit color, that would be great.
Dave Lennon
Sure. I think so I'm happy to answer those questions. I'm going to turn it over to the retina for some of the details. But at the same time, we probably wouldn't discuss number of sites or number of patients at this point, just given where we are in the trial and it is active and we're kind of continuing to build and that story on. But maybe just in the design of the trial and what we might expect to see later this year. I'll let Loretta give you an update there. So Loretta?
Loretta Itri
Good morning, Ahu. Always great questions and as usual coming from you. And so basically this is an open label Phase two study looking to evaluate the combination of Napster on this with letrozole in patients who have advanced and that would be on advanced or unresectable stage three or four more recurrent endometrial wide endometrial carcinoma patients will have received either now or one prior line of chemotherapy.
So this is a this is a population of patients who are relatively early in their treatment course, which is somewhat differentiated, of course, from what we're doing in precision. And so that patients are treated with the same dose of Napster on this as they as they were in to combat. That is a well established and safe dose. And I think and pretty much this is a Simon two-stage study. So we plan to enroll the first cohort. And we anticipate since this is an open-label study being able to report out and early results come by the end of this year.
Does that address your question or who would you like more detail?
Ahu Demir
This is great. Thank you so much, Laura, this is very helpful and thank you for your compliments as well. I have one more conceptual question for you, Laura, if I may. So you mention M4 sensitive tumors, BPSC. one two. Could you comment on what other mutational background versus different employing inhibitors?
Loretta Itri
Well, I think that's a that's quite a difficult question because I think there are there are many mutations along the entire pathway that may provide some that may provide targets. However, I don't think that any of those specifically has been identified and as a as a specific mutational target for ImmTOR inhibition, there are there are suggestions, but I don't think is any of those are proven.
Ahu Demir
Very helpful. Thank you so much.
Loretta Itri
You're most welcome.
Dave Lennon
And thanks, Ahu. Operator, are there any other questions?
Operator
And I see no further questions in the queue at this time. I'll now turn the call back over to you, Dr. Dave Lennon, for any closing remarks.
Dave Lennon
Thank you, operator, and thank you, everyone, for joining the call today. I think as you see, we are delivering on the operational goals we have set for Goal 2023 and looking ahead into 2024. We're very confident on our ability to do deliver against our number one priority, which is the precision one trial. And we look forward to providing an update on that two thirds interim later this year. And finishing that trial within 2024.
We're also excited about the new programs we mentioned today, and it got to discuss a little bit in the Q&A and look forward to providing updates on both our net and endometrial trials later this year. At the same time, we remain really confident in the continued progress we're making in a common market with BRO. This is an ultra orphan indication, and we're highly penetrated within that market and that continues to deliver solid sales for us as we go forward.
Overall otherwise, I thank you all for your time and attention today, and we look forward to the next update with you all. Thank you. Have a great day.
Operator
Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.
