Clovis Oncology, Inc.
Q1 2019 Earnings Call Transcript

Published: 7 May 2019

[Operator:]

Good morning. My name is James and I will be your conference operator today. At this time, I would like to welcome everyone to the Clovis Oncology First Quarter 2019 Financial Results Call. All lines have been placed on mute to prevent any background noise. And after the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to the Vice President of Investors Relations, Breanna Burkart. You may begin.

[Breanna Burkart:]

Thank you, James. Good morning and welcome to the Clovis Oncology first quarter 2019 conference call. Thank you for joining us. You have likely seen this morning’s news release, if not, it is available on our website at clovisoncology.com. As a reminder, this conference call is being recorded and webcast. Remarks may be accessed live on our website during the call and will be available on our archive for the next several weeks. Today’s agenda includes the following

[Patrick Mahaffy:]

Thanks, Breanna. Welcome, everybody. I appreciate your time this morning. Let’s begin with the commercial update for Rubraca. We were pleased with our revenue in Q1, which represented both quarter-over-quarter and year-over-year growth. We reported $33.1 million in product revenue for the first quarter of 2019. This includes $31.9 million in U.S. product revenue as well as for the first time $1.2 million in ex-U.S. sales, the majority of which are in Germany following the early March launch. In the U.S., our solid sales performance included some growth over Q4. I’ll take a moment to describe some factors that contributed which Dan will describe in greater detail. The supply of free drug distributed to eligible patients through the Rubraca patient assistance program in the U.S. was approximately 21% of overall commercial supply in the first quarter, which was consistent with the 22% we reported in the first quarter of 2018. We reported 26% for the fourth quarter and full-year 2018. We believe this is partly a seasonal effect, likely the result of some foundation funding early in the year. As you know, in the January, we took a price increase of around 8% for Rubraca. Now, that price increase was meaningfully offset by a higher gross to net in the quarter, having to do with seasonality and patient and channel mix, which Dan will describe later in the call. In the course of first quarter, we showed modest growth over Q4, and we continue to maintain our approximate 20% share of the ovarian cancer, PARP market. We continue to focus on both growing Rubraca sales and continued progress in expanding the second-line maintenance ovarian cancer market overall. Two years after the first PARP second-line maintenance approval in the United States, the adoption does appear to be growing slowly, and we believe that approximately 45% of eligible patients received a PARP inhibitor in the second-line maintenance treatment setting. This is not enough, and we have multiple initiatives underway in our efforts to compete for market share and to make inroads against the engrained habit of watch and wait as opposed to active maintenance treatment. To address this, we have a three-pronged strategy in place to continue to grow U.S. sales of Rubraca in the maintenance setting. One, differentiate Rubraca clinically based on data from the ARIEL3 study; two, expand use with current prescribers and add new prescribers; and three, empower patients to ask for Rubraca and support them during their treatment. There is significant opportunity to grow Rubraca’s U.S. share by reaching the large number of patients as clinicians continue to utilize a watch and wait approach, as well as by addressing the perceived lack of differentiation amongst the marketed PARP inhibitors. The watch and wait approach continues to be the most widely followed practice, following second-line platinum therapy, despite numerous published data sets demonstrating that PARP inhibitors offer substantially better outcomes than placebo, the equivalent of watch and wait, in the platinum-sensitive second-line maintenance setting. To provide additional support for active maintenance treatment therapy, in the fourth quarter, we launched our Maintenhance messaging and direct promotional materials. This program highlights data from the prespecified exploratory analysis from the ARIEL3 study, demonstrating that not only can Rubraca maintain progression free survival, it may in some patients also further their response coming off platinum therapy, including converting some partial responses to complete responses. This message resonates with physicians who see the opportunity for additional tumor shrinkage, while in the maintenance setting as both the tangible and meaningful benefit for their patients. This message is further supported by our regional account team, which educates key accounts about the significant gap in patient care and establishing the importance of second-line maintenance therapy, as well as our nurse educator group, which counsels nurses and other practitioners on the importance of second-line maintenance and help in the management of patients on Rubraca. We believe this two-part efficacy message, maintaining progression-free survival and the potential for further tumor shrinkage, will have a positive impact ultimately on our market share and on the market in general. We also recognize the importance of highlighting differentiation amongst the PARP inhibitors, especially at a time that the players in the competitive landscape have changed. We have a great opportunity to reach prescribers with these messages right now and our team is motivated to do so. To augment our physician-focused messaging, during the fourth quarter, we launched additional patient-focused resources into the marketplace. This includes an increased focus on digital and internet-based activities. And in particular, during the first quarter, we initiated our targeted direct-to-consumer campaign with the goal to drive awareness and, ultimately, utilization of Rubraca. This highly-targeted program includes both television and social media channels. While it is too early to evaluate the impact of this targeted DTC campaign, certainly early metrics have been positive, and we will provide an update on our quarterly -- our Q2 call. Turning now to the EU. In late January, the European Commission approved an expanded label for Rubraca to include the second-line or later maintenance treatment indication based on the ARIEL3 data. Rubraca. Rubraca was the first PARP inhibitor licensed for an ovarian cancer treatment indication in the EU and is now the first to be available for both treatment and maintenance treatment among eligible patients with ovarian cancer. We launched in Germany in the private pay market in the UK in early March, which will be followed by other EU countries at the end of 2019 and into 2020 as we receive reimbursement. The majority of additional EU hires therefore, including sales reps in EU countries beyond Germany and UK, will coincide with reimbursement approvals in the individual countries as of course will any meaningful revenues. In early April, we had our launch symposium in Berlin which was well attended and well received. We’ve been pleased with the response to our data by the KOL community in Germany and their willingness to acknowledge the data is being differentiated from competitor products. I should note here that only approximately 10 patients in Germany on our expanded access program have converted to commercial supply but we expect the majority of our patients this year will be new patient starts. We also had a modest contribution to sales from private pay patients in the UK as well as from our distributor in Israel. The rucaparib Access program remains available at a limited number of EU countries for rucaparib for treatment and its maintenance therapy in recurrent ovarian cancer to allow access to rucaparib for patients in need until the time the drug is commercially available and reimbursed. I’d like to turn now to our most near term development program in the advanced prostate cancer setting. We first reported initial data from the TRITON studies of Rubraca in metastatic castration-resistant prostate cancer at ESMO in October of last year. TRITON2 is our Phase 2 single arm study in patients with BRCA mutations inclusive of germline and somatic mutations, also enrolling patients with deleterious mutations of other HR repair genes. All patients will have progressed after receiving one line of taxane-based chemotherapy and one or two lines of AR-targeted therapy. Our second Clovis-sponsored prostate is TRITON3, a randomized comparative Phase 3 study that includes patients who have a tumor germline or somatic BRCA or ATM mutation, who have progressed on AR-targeted therapy and not yet received chemotherapy in the metastatic castration-resistant setting. The study will compare Rubraca to physicians' choice of AR-targeted therapy or chemo. The planned primary endpoint is radiological, progression-free survival. And we anticipate this study would serve as a confirmatory study should the TRITON2 study data result in an accelerated approval. We continue to enroll patients into both TRITON2 and TRITON3. The initial TRITON2 data presented at ESMO showed a 44% confirmed objective response rate by investigator assessment in 25 evaluable patients with a BRCA 1 or 2 alteration, and results by blinded independent central review or BICR were highly consistent. In addition to 51% confirmed prostate specific antigen or PSA response rate was observed in 45 PSA response evaluable patients with a BRCA mutation. Preliminary safety data for Rubraca in men with this indication were consistent with those observed in patients with ovarian cancer and other solid tumors. These data were the bases for the second Breakthrough Therapy Designation granted to Rubraca by the FDA. In October 2018 Breakthrough Therapy Designation was granted for Rubraca as a monotherapy treatment of adult patients with BRCA1/2 mutant metastatic castration resistant prostate cancer who have received at least one prior androgen receptor targeted therapy and taxane-based chemo. As a result of Rubraca’s breakthrough therapy designation, we have the opportunity to provide clinical updates on the TRITON program to the FDA on a regular basis. At the end of April, we provided an update on 52 patients with BRCA-mutant metastatic CRPC that were evaluable for our RECIST response and a larger number evaluable for PSA response. We are very pleased to tell you that both the RECIST response rate and the PSA response rate in this larger population were highly consistent with the data presented at ESMO 2018. Because we hope to present these data at fall 2019 conference, potentially ESMO in Barcelona in late September, but we will not provide the details of these data publicly at this time, but look forward to a more formal and detailed presentation in the fall. We expect to discuss this update with the FDA in the next several weeks, consistent with Rubraca’s breakthrough therapy status. But, this is largely informational and to maintain an active dialogue around our program. We hope that this and any potential further update will facilitate a more rapid regulatory review since the FDA will be familiar with our data. Accordingly, we remain on track to file our planned supplemental NDA submission for accelerated approval for Rubraca as treatment for men with BRCA-mutated metastatic castration-resistant prostate cancer, by the end of 2019. The filing will be based on RECIST responses and PSA responses will also be included as supportive data. We’re very enthusiastic about the potential for Rubraca in prostate cancer and we look forward to providing both clinical and regulatory updates later this year. Turning now to highlight some encouraging data for Rubraca monotherapy in pancreatic cancer presented at AACR last month from ongoing investigator initiated study at the University Pennsylvania. Data from 19 evaluable patients with advanced pancreatic cancer enrolled in this Phase 2 study of Rubraca as first line maintenance therapy following platinum-based chemo, provided disease control with new safety signals. Each of these patients was platinum-sensitive and had a mutation of BRCA1, BRCA2 or PALB2. At the interim analysis, median PFS for these patients was 9.1 months from the start of Rubraca therapy. And again Rubraca treatment was well tolerated. Unfortunately, in April, we announced the discontinuation of ATLAS, our single-arm Phase 2 study of Rubraca as monotherapy in recurrent metastatic bladder cancer in an unselected patient population. This was based on recommendations by the trial’s data monitoring committee. Following its prespecified review of preliminary efficacy where 62 patients enrolled and treated in the study, which showed the objective response rate in the intent-to-treat population did not meet the protocol defined continuous criteria and suggested the treatment may not provide a meaningful clinical benefit to patients. Accordingly, we terminated the study early, although we continued to evaluate the potential for Rubraca in combination with other agents for the treatment of advanced bladder cancer. As we move toward combination studies of Rubraca in multiple tumor types, we are of course limiting the number of new monotherapy studies we intend to sponsor. However, one important new monotherapy study we will initiate later this year keeps to take advantage of Rubraca’s consistent monotherapy performance in mutant-BRCA and a small number of other mutations in multiple tumor types. This is our pan-tumor or basket study, seeking a registration for Rubraca across all tumor types in patients with the above mentioned mutations. We’ve had an encouraging dialogue with FDA about this study and look forward to providing more details in the next few quarterly updates. Turning now to our Rubraca combination study efforts. We remain very enthusiastic about our clinical collaboration with Bristol-Myers Squibb with studies in both prostate and ovarian cancers. As part of that collaboration, the ATHENA study is underway and is our largest clinical trial. This Clovis-sponsored study is a Phase 3 trial in advanced ovarian cancer and the first line maintenance treatment setting and is currently enrolling patients. ATHENA will evaluate Rubraca plus Opdivo, Rubraca, Opdivo and placebo in newly diagnosed patients with stage III/IV high-grade ovarian, fallopian tube or primary peritoneal cancer, who have completed platinum-based chemo. These study includes an approximately 1,000 patients, includes an all-comers population with a step down statistical plan similar to ARIEL3. Also part of our collaboration with BMS is a Phase 2 prostate cancer study initiated in late 2017, which is sponsored and conducted by BMS. The study will evaluate the safety and efficacy of Opdivo in combination with Rubraca in patients with metastatic castration-resistant prostate cancer and is being conducted as an arm in the BMS-sponsored CHECKMATE 9KD study. Importantly, the prostate study is enrolling, BRCA, HRD and biomarker-negative patients and will generate preliminary data on the relative benefits of the combination in these distinct patient populations. We are initiating the ARIES study, a Phase 2 open-label study evaluating the combination of Rubraca and Opdivo in patients with relapsed ovarian cancer. We’re also evaluating other tumor types for potential inclusion. This is the Clovis-sponsored study and the most recent addition to our broad clinical collaboration with Bristol-Myers Squibb. We are well aware of the desire to see robust combination results for PARP inhibitors and I/O agents broadly and for Rubraca and Opdivo specifically. Therefore, pleased to get the study going and look to an opportunity to provide initial data from ARIES during 2020. SEASTAR is a Phase 1b/2 study sponsored by Clovis includes multiple single arm rucaparib combination studies, which currently includes the following planned combinations

[Dan Muehl:]

Thanks, Pat, and good morning, everyone. Our Q1 2019 financial results are included in today’s press release. I’ll review the highlights of our financial results and provide some additional commentary on the quarter as well as the financing we announced last week. Product revenue was $33.1 million in Q1 2019, this compares to $18.5 million in Q1 2018. This represents a 79% quarterly increase year-over-year. This includes $31.9 million in U.S. product revenues and $1.2 million in ex-U.S. product revenues, following the launches in Germany and the UK private pay market that occurred in March. The number of weeks of inventory at distributors at the end of Q1 was flat to Q4 2018. The supply of free drug provided through our U.S. patient assistance programs totaled $8.4 million in commercial value in Q1 2019 or approximately 21% of overall commercial supply. This is in line with the 22% recorded in Q1 2018. Additionally Q1 2019 result was lower than the 26% recorded in Q4 2018. We believe the reduction from Q4 2018 to Q1 2019 was primarily due to foundation funding of patient copays for Medicare Part-D patients. Foundations typically are adequately funded earlier in the year and become depleted as the year progresses. This percentage in Q1 2019 is likely to increase in Q2, though it is difficult predict more precisely. We ended the first quarter with $406.8 million in cash, cash equivalents and available for sale securities. Cash used in operating activities was $98.5 million for Q1 2019 compared with $100.6 million for Q1 2018. This is the sequential increase from the $82.7 million in cash used in Q4 2018 and is primarily due to higher drug purchase costs of $27.5 million in Q1 2019 versus $22.7 million in drug purchase costs in Q4 2018. In addition, we made a $15 million milestone payment in Q1 2019 related to the EU maintenance indication approval compared to zero in Q1 2018. We reported a net loss of $86.4 million or $1.63 per share for Q1 2019 compared to $77.7 million or $1.54 per share for Q1 2018. Our Q1 2019 R&D expenses totaled $62 million compared to $43.5 million in Q1 2018. R&D expenses declined sequentially from $71.2 million in Q4 2018 to $62 million in Q1 2019 due to non-recurring expenses in Q4. However, we anticipate that expenses will continue to increase in 2019 over 2018 as our planned clinical studies and development activities progress. Selling, general and administrative expenses totaled $47.8 million in Q1 2019 compared to $39.3 million in Q1 2018. SG&A expenses also declined sequentially by 3% from Q4 2018 to Q1 2019. However, we expect that SG&A expenses will also continue to increase in 2019 over 2018 in support of our commercial activities related to Rubraca in the United States and in the EU. Now, I’ll provide some color on Rubraca from a financial perspective. Revenue is recorded net of estimated rebates, chargebacks, discounts and other deductions as well as estimated product returns. These gross to net adjustments totaled approximately 14% of gross revenue in Q1 2019 compared to 10.5% in Q1 2018. This increase is mainly attributable to three factors

[Patrick Mahaffy:]

Thanks, Dan. Congratulations again. To close, we are pleased with our progress in the first quarter, having achieved some important milestones during the first part of 2019 and with several additional key milestones anticipated later this year. We demonstrated solid sales performance in the U.S. where we remain focused on growing our share of the ovarian cancer PARP market as well as expanding the second-line maintenance PARP opportunity overall. We’ve established our EU infrastructure and we’ll continue to grow sales and gain traction in the EU, following our March launches in Germany and the private pay market in the UK with other countries in the EU coming online at the end of 2019 and beginning in 2020. We are eager to begin our two combination studies at lucitanib with each of Rubraca and Opdivo in gynecological and other tumor types beginning in mid-2019, to explore the potential of lucitanib in combinations with checkpoint and PARP inhibitors based on compelling preclinical data as well as competitive clinical data for similar compounds. We are very pleased with the highly consistent response rate seen in our mutant-BRCA metastatic castrate-resistant prostate cancer data update and we look forward to providing more detailed clinical update of the TRITON data at a fall medical meeting. We continue to target late 2019 for potential supplement NDA filings for BRCA-mutant patients with advanced metastatic castration-resistant prostate cancer. And having completed our financing with TPG for ATHENA, we’ve substantially extended our protected cash firmly, which allows us to move forward with these objectives I described, which we believe will enhance shareholder value. With that, I’d be happy to answer any questions you may have.

[Operator:]

[Operator Instructions] Our first question comes from the line of Tazeen Ahmad of Bank of America. Go ahead, please. Your line is open.

[Tazeen Ahmad:]

Good morning. Thanks for taking my questions. Pat, a couple of for you; in terms of the U.S. run rate. So, I think that given the frontline data was presented last fall from Astra and the fairly recent acquisition of Tesaro by a large cap company, there were concerns that U.S. sales for Rubraca in its indications would deteriorate, but you’ve demonstrated the ability to keep sales stable for now. I guess, my question would be how, going forward from here, do you think you could potentially increase your run rate and increase market share? And then, I have one on European sales as well.

[Patrick Mahaffy:]

We’re not giving guidance, partly because of some of the points you referenced, the transition from an independent Tesaro to GSK, and obviously any halo effect it could evolve related to the SOLO-1 data for olaparib. Given that and given the stated performance of our competitors, each of which made clear the revenue run rate they have in the United States, I think we at least held our own if we didn’t do a little better than that. While I don’t want to give guidance, don’t feel comfortable yet giving guidance, I do feel comfortable that we’re continuing to hold our own in a very competitive space. I think, the opportunity for each of the PARP inhibitors to grow sales is highly dependent now on our collective efforts to increase the transition from watch and wait as a primary choice by -- for prescribing physicians to active maintenance treatment as a means of prolong -- the period of time, hopefully for a long period of time that a woman can maintain her response and avoid another round of much more debilitating standard chemotherapy. So, I think, I'm comfortable that we’re doing well in an environment that’s competitive and that we’ll continue to do well.

[Tazeen Ahmad:]

Okay. Thanks. And then for Europe, I think there was a slide that was presented on a recent GSK slide deck which seemed to talk about the market dynamics of the PARPs in Europe. And the chart itself seemed to indicate that there was some sort of deterioration of Rubraca in certainly the last couple of months, maybe all of 1Q. I was wondering, number one, if you have seen that slide? And number two, if you could comment on those trends, and whether or not you think those are accurate?

[Patrick Mahaffy:]

Should I confirm something, Tazeen? I think the chart that you’re referencing was a chart that was meant to reflect U.S. market share, correct?

[Tazeen Ahmad:]

I'm not sure. I thought it was also referencing Europe as well, but maybe you can correct that.

[Patrick Mahaffy:]

We could probably have lost share in Europe when we didn’t have any share in Europe. The only business [indiscernible] we really launched on March 1st. So, our share has -- I can assure you that in Europe our share has gone up from -- over the course of Q1. I think, the chart you’re referencing is in fact meant to represent market share in the United States. And I will say that GSK is new to the oral oncolytic market and I think probably going to rely on outside sources for its information as they get their traction here. But, I would recommend that they check carefully the data they present to their investors and is a follow-through by the way to our investors and ensure it adequately and accurately represents the market environment as it seems today. We do not believe, based on our analysis, that they have been the dominant or leading share PARP inhibitor for several quarters, in fact believe that olaparib is including in the second-line maintenance setting. And secondly and importantly, the slide which showed a precipitates decline in market share from Rubraca is not in our view accurate. And two, I can put that by pointing to our stated sales, the GSK stated sales for niraparib and the stated sales for olaparib. So, I’m relying on public real data sources, not a very limited sampling of a data set and their projection from that limited sampling to support a market share claim. I'm comfortable that we remain in this 20% market share, and I'm comfortable that we did not see a decline over the course of the last several quarters in that market share.

[Tazeen Ahmad:]

Okay. So, I guess, what is your sales force hearing from the CEO that you can share some of that? I think with transition happening with new management for the previous sales team or sales reps for let’s say Tesaro, have they noted any changes in the way that that drug is being marketed in the U.S.?

[Patrick Mahaffy:]

I think that we have not seen as many changes yet as we have anticipated. I think that’s partly a function of GSK entering a market with no impact to organization and so for transitional period at least relying on the Tesaro organization to continue its promotional and commercial activities. My belief is that as GSK takes control of its commercial organization, it is more likely to drive its promotional activities to be entirely consistent with its label. The meaningful change that represents is that at some point, I am confident that GSK will stop promoting a 200-milligram starting dose for which it is neither labeled, nor for which there are any prospective data and will move back to the more appropriate and ethical 300-milligram starting dose that has been described in their label and as they’ve studied in all of their trials.

[Operator:]

Your next question comes from the line of Peter Lawson with SunTrust. Go ahead, please. Your line is open.

[Peter Lawson:]

Hey, Pat. Thanks for taking the questions. Just on 1Q revenues, what was the average duration of the patients on the drug and did that improve since last quarter? Any color there would be appreciated.

[Patrick Mahaffy:]

I think, we’re still around 6.5 months, that’s a rolling number. So, it isn’t just Q1, it’s a rolling number from a longer period of time. But, I think we’re -- at around 6.5 maybe marginally better than that. I think our team continues to believe, as we have more maintenance patients and pure treatment patients over the course of this year that that duration of use is going to continue to increase and get closer to the seven months timeframe.

[Peter Lawson:]

Thank you. And then, just on -- I guess, did you see any off label use in the quarter, anyway you can quantify that?

[Patrick Mahaffy:]

I don’t love answering the off-label use questions for obvious reasons because it’s described as off-label. I think, the vast majority of our sales are in ovarian cancer. We have always had some use in other tumor types, if it is -- but I think the vast, vast majority of our use is in advanced ovarian cancer.

[Peter Lawson:]

Got you. And then, just finally, just on Europe, where do you think market share can settle out for you? And then, how do you kind of compare yourself and how that launch is tracking versus Astra or Tesaro’s launch?

[Patrick Mahaffy:]

We’re barely two months into it. The dynamic in Europe is going to play out very similarly to the dynamic in the United States, which is a dynamic of a group of prescribers already prescribing in maintenance, a number of patients and their prescribers continuing to consider a watch and wait, or observation approach. And the need on the part of each of our three marketing companies to convert this market and to a far greater amount of adoption of PARP inhibitor use, I don’t have any doubt that Rubraca will be highly competitive in the EU as it is and it’s becoming more so in the United States.

[Operator:]

Your next question comes from the line of Kennen MacKay from RBC Capital. Go ahead please. Your line is open.

[Kennen MacKay:]

Hi. Thanks for taking my questions and congrats on the quarter. Quick housekeeping question. Pat, you mentioned 45% of eligible second-line maintenance market patients data, PARP inhibitor currently in the U.S. Is this referring to BRCA positive patient only or second-line ovarian cancer patients were in response to i.e. essentially the label of these drugs. And then, secondary to that, was just wondering if you and the team could give a little bit more rationale behind the I/O combo in bladder cancer and the optimism here despite the JAVELIN PARP inhibitor trial and recent halt there? Thanks again and congrats on the commercial progress.

[Patrick Mahaffy:]

First of all, the 45% is an estimate by the way, it is an all-comers population. And the BRCA population surprisingly is only marginally higher than that; it’s maybe around 50%. So, there’s a lot of room to move forward. Kennen, I'm going to ask you to kind of repeat that question or rephrase it. You said that our optimism for I/O Rubraca combo in bladder but I think you meant ovarian because when you referenced JAVELIN, and also I didn’t express any optimism for I/O…

[Kennen MacKay:]

Yes, spot on, apologies. Jumping between calls and making myself...

[Patrick Mahaffy:]

Okay. Lindsey?

[Dr. Lindsey Rolfe:]

Okay. Thanks, Kennen for the question. The design of our ATHENA trial is fundamentally quite different from the design of the JAVELIN 100 ovarian trial. ATHENA is a switch maintenance trial, which means patients are enrolled when they finish their frontline chemotherapy and have the surgery. JAVELIN 100 had a backbone that with looking at the effects of chemo plus checkpoint inhibitor versus chemo alone and then continued into a switch maintenance phase. So, scientific questions we’re asking at ATHENA are quite different from JAVELIN. Thus the read-through to ATHENA from JAVELIN is quite minimal. Based off of the non-clinical data that we have looking at the effect of combination of nivolumab mouse version plus rucaparib versus single agent, we’re confident that we should see an advantage of the combination therapy versus the monotherapy, and we’re confident that our switch maintenance design traced to the strength of our molecules. So, essentially we’re trying to replicate the success design wise of ARIEL3 in ATHENA. So, short answer is limited read-through from JAVELIN 100 to ATHENA. We haven’t made any modifications to the trial design because we don’t feel that we need to. And we are confident that ATHENA is well-designed to examine both the combination of nivolumab and rucaparib but don’t also forget that independently it examines rucaparib versus placebo in the switch maintenance setting in an all-comer population.

[Operator:]

Your next question comes from the line of Gena Wang from Barclays. Go ahead please. Your line is open.

[Gena Wang:]

Thank you for taking my questions. Pat, you mentioned in the last quarter a very strong 4Q 2018 revenue, largely driven by the patient adherence. Just wondering how this quarter compared to the last quarter?

[Patrick Mahaffy:]

I think adherence was similar in Q4; we might be seeing a slight increase in average duration, but it’s a rolling number. So, it doesn’t increase dramatically on a month-to-month or even quarter-to-quarter basis. But I don’t think that any of our success in the quarter was driven by a great lengthening of adherence in Q1 compared to Q4.

[Gena Wang:]

Okay. So, like will you say like this quarter, we actually had more new patient enrollment compared to the last quarter?

[Patrick Mahaffy:]

Will I say that we had what?

[Gena Wang:]

The new patient enrollment compared to the last quarter?

[Patrick Mahaffy:]

I think we did have new patients, more new patients starts in this quarter than we did in Q4. Yes.

[Gena Wang:]

Okay, great. And then, for the EU, how much additional expense should we expect for the hiring -- new hiring for launch?

[Patrick Mahaffy:]

It’s going -- I wouldn’t give an exact number. It’s not going to meaningfully increase this year as we’re -- a lot of it’s in the kind of Q4 timeframe. Most of the other launch countries that we’re looking at will launch in the first quarter of next year. So, we’ll have more on-boarding in the Q4 timeframe. But, we don’t have an exact number to give out.

[Gena Wang:]

Okay. And then last just very quick one. Pat, you mentioned will be 52 patients for TRITON2 data you’ll share with the FDA. Just want to confirm, are those 52 patients are PSA response eligible patients or RECIST response eligible patients?

[Patrick Mahaffy:]

Yes. Thank you for asking that, because it’s important. So, the 52 are RECIST eligible, and it’s important you brought that up. The agreement with the FDA is to have around 100 patients who are RECIST eligible for the trial, and the PSA response rate would be supportive. So, there is -- I forget the number exactly. There is a larger number of PSA eligible patients where that response rate was also highly consistent with the ESMO dataset. But the 52 are the RECIST eligible.

[Operator:]

Your next question comes from the line of Andrew Berens from SVB Leerink. Your line is open.

[Andrew Berens:]

Thanks. Good morning and congrats on the quarter. A lot of your oncology peers have had a lot of seasonal headwinds. I’ve got a couple of questions. I guess the first one, one of your former competitors who is no longer had highlighted that in Europe having Phase 3 data is more important than in the U.S. in terms of reimbursement. So, I’m wondering how you think that would affect the dynamic specifically with Lynparza, which obviously has no non-BRCA Phase 3 data in the second-line and in the first-line at this point?

[Patrick Mahaffy:]

I don’t have an answer for that specifically. It is true that robust Phase 3 data does influence payers more than the single arm data. I would imagine that they’ll end up getting pretty similar reimbursement to each of us and Tesaro. It is based on the Phase 2 study 19, but that was a basis of approval, and it was a controlled study. So, while it was formally a Phase 2, it was not a single arm study. So, I don’t believe that they’re going, based on the reimbursement, disadvantage. I don’t know for sure, but I would not model that.

[Andrew Berens:]

Okay. Thanks. And then, just are there any updates on the PAOLA trial that could be coming with Avastin investments? And how do you think that could potentially shape the dynamic on the frontline?

[Patrick Mahaffy:]

I of course don’t have an update. My understanding is that they’ll report out top line data sometime in the third quarter or fourth quarter.

[Andrew Berens:]

Okay. And then, just a question on the tumor agnostic approach. How would the FDA look at that do you think in terms of granting a broader label? And I guess, have there been any trials that have read out that were [technical difficulty] for BRCA mutations and were given after DNA damaging agents that actually didn’t show activity?

[Patrick Mahaffy:]

Andrew, I want to make sure I got the question right. So, first was kind of -- I'll paraphrase that how would the FDA dialog around our basket study. And the second was -- it was the second question about BRCA patients following another PARP inhibitor or another DNA repair related?

[Andrew Berens:]

I'm just wondering, I mean, obviously there’s a lot of data in a lot of different tumor types, some of the failed tumor types appear to be related to trial design or maybe they were given on top of chemotherapy, that’s not DNA damaging. I was just wondering in the data that we’ve seen, are there any cases where as in BRCA patients that were enriched and/or given after DNA damaging chemotherapy that have not shown activity?

[Patrick Mahaffy:]

I got it. So, I am not aware of the study in BRCA patients that have failed to show activity for PARP inhibitor. There are limited data sets for PARP after PARP patients and an even more limited data set for PARP after PARP in a defined mutant BRCA population. So, that one is a little tougher to answer yet. Although the willingness of physicians, as evidenced from both market research and behavior to prescribe a PARP inhibitor after a PARP inhibitor seems to be very high. The dialogue we have with FDA was to consider a basket study of multiple tumor types that included patients with of four or five mutations, the most important of BRCA1 and BRCA2 that are actionable with -- we believe are actionable with Rubraca. And FDA was, in our view, very encouraging of the concept of the pan tumor or agnostic study that could result in a mutation specific non-organ specific indication. Obviously, there’s a lot of detail in there and we’re in the middle of writing a protocol to support it. But, this I think is representative -- of FDA’s willingness as evidenced by Keytruda’s indication in all MSI-high patients and in Loxo’s - what was Loxo’s approval in TRK fusions, again independent tumor type where they are really following the science and understanding that there are certain mutations that are going to be highly responsive to very-targeted therapies. And so, we’re optimistic about the approach here, and we’ll initiate that trial and be able to describe it in a more detail in the next quarter or two.

[Operator:]

Your next question comes from the line of Jing He from G.research. Go ahead please your line is open.

[Jing He:]

Thank you for taking my questions. So, congratulations on the quarter. Just a big picture question. We’ve been talking about the problem of watching and wait for the past few quarters. Could you share your thought on what would change the dynamic, what else do you plan to do? And secondly, how would you compare the ovarian market with prostate, and what challenges or hurdles do you expect there? Thank you.

[Patrick Mahaffy:]

Yes. So, first, ovarian, I described the initiatives we have underway. We’re aware that competitors must be doing similar -- making similar efforts. I think, all of us are surprised that how difficult it has been to get beyond this sort of 50-50 split or 45%-55% split. That being said, 45% is the higher number than we’ve suggested in the past for adoption. So, maybe we’re seeing slow movement, taking into account not just our efforts but our competitors to move this prescribing population to one that is more committed to active intervention rather than observation. But, I’ll just acknowledge it’s been slow. We make -- our competitors are for sure committed to trying to change that dynamic. But it’s years of behavior that has to be kind of undone. It is a materially different dynamic in prostate where unlike ovarian where we’re trying to go from a period of time where a woman has been perceived to be somewhat disease free and drug free and that is a benefit to her in the minds of many physicians rather than being on active therapy, even though the active therapy does promote a far longer progression-free survival, it’s been hard to change that behavior. The prostate indication we’re seeking is a treatment indication. And so, this is directed at men who may have had a period of remission following their earlier line therapy, may not have and really be in desperate need of an active therapy. But not matter what, they are seeing a rise in PSA than we see have other symptomatic evidence of progression, and they are actively seeking, their physicians are actively seeking to intervene. So, to be honest, a far more kind of traditional approach in cancer, which is going with the treatment indication in a patient who sadly is suffering from tumor growth at that time. So, the motivation is for sure a little bit different to treat that patient at that time.

[Operator:]

Your next question comes from the line of Joe Catanzaro from Piper Jaffray. Go ahead, please. Your line is open.

[Joe Catanzaro:]

Hey, guys. Thanks for taking the question. I just wanted to follow up on the prostate cancer update here. So, at ESMO, you had 25 BRCA positive patients with the June 2018 cutoff; you’re now at 52 RECIST patients. Would you be able to provide us the cutoff date for those 52 patients? Is it April 2019 or is it prior to that?

[Patrick Mahaffy:]

It’s definitely prior to that. I don’t remember the exact date. It was earlier in this year. But remember, the cutoff date is far earlier than the present date for two reasons. One, we want to make sure every patient has been eligible for at least two scans; and two, there is an element of data clean-up and that we want to make sure we have a very clean dataset. So, you shouldn’t be thinking that’s an April date; it is not.

[Joe Catanzaro:]

Okay. That answers sort of my question, my follow-up here on whether these are all confirmed responses. Remind me, if you guys have said, and forgive me if you have, how many patients, RECIST patients you’ll need to support a filing?

[Patrick Mahaffy:]

Yes. I will reiterate. Yes, these are absolutely all confirmed responses. And two, it’s going to be around 100 patients.

[Joe Catanzaro:]

Okay, great. That’s helpful. And I guess my last question here is -- so, I was wondering if you have any update around the Phase 3 TNBC trial that was included in the BMS collaboration. I think, the trial was originally supposed to start at the end of 2017. It sounds like BMS wanted to wait to see how the TNB landscape shakes out. It seems like it is shaking out with the [indiscernible] approval. Just wondering if you have any updates there.

[Patrick Mahaffy:]

Yes. We’ve turned our efforts with Bristol-Myers to some other indications, including for instance a gastric trial that they’re going to initiate in combination with -- they are going to add the combination to an ongoing gastric trial they have. And there’s a number of other potential tumor types we’re considering in collaboration with them. Given the fairly dramatic change in the TNB environment and especially given the planned trial design we had which did not incorporate the movement of the pieces on the frontline TNBC, you should consider that trail -- I think we’ve discussed this before but consider that trial showed at least for now and at least that design.

[Operator:]

Your next question comes from the line of Terence Flynn from Goldman Sachs. Go ahead please. Your line is open.

[Unidentified Analyst:]

Just one is, are there any changes to how you’re thinking about the pipeline or the development following sale of Rubraca bladder cancer setting?

[Patrick Mahaffy:]

No, there are not. It was as described an unforeseen outcome but it was a flyer in all-comers population, based on what we thought was very good supportive biology that did not help. But, we described on this call a very robust clinical development program in multiple tumor types as both monotherapy and in combination, and we also now are introducing the lucitanib combinations into the clinic this quarter. So I'm really pleased with our pipeline development.

[Breanna Burkart:]

There’s time for one more question.

[Operator:]

Your next question comes from the line of Yige Guo from Guggenheim Securities. Go ahead please your line is open.

[Yige Guo:]

Hi. Good morning. This is Yige Guo on for Michael. Thanks for taking our questions. Our first question is on prostate cancer in general. So, several new hormone therapies have moved or are moving to earlier stage prostate castration sensitive prostate cancer, which is enzalutamide or apalutamide, which will report some data at ASCO. Can you maybe help us understand the potential impact to market dynamics, especially PARP inhibitors in castration resistant prostate cancer?

[Patrick Mahaffy:]

The focus, it’s more likely to have a potential impact on us as we develop combinations of Rubraca that may extend beyond the BRCA population to HRD or all-comers, and more to come on that as we have these calls. In the short term, our focus is on men who have failed. And I don’t think it will matter when they failed it one on enzalutamide or abiraterone or new entrants into this class. And in the short term, not in TRITON3 but in TRITON2 it also failed docetaxel. As men progress through their prostate therapies, there is an evident enrichment in the population of patients with BRCA mutations, and there’s two primary reasons for this we think, one is that it does appear that while BRCA mutation is a pretty core prognostic indicator for men with prostate, and so a greater percentage of those men ultimately progress into metastatic prostate cancer. Two is, there is over time and perhaps in reaction to therapy, perhaps just related to the evolution of the tumor, a greater number of men with somatic mutations of Rubraca as they advance through therapy and come into the metastatic setting. So, while many of these men over time are going to be treated earlier with abiraterone or enzalutamide or other agents, unfortunately those who are likely to have either a germline and or develop a somatic mutation of BRCA are still going to end up with metastatic castration resistant prostate cancer and hopefully will benefit from Rubraca.

[Yige Guo:]

Thank you. And maybe one more quick one on ATHENA study. Can you maybe help us understand the powering assumptions and statistical analysis for ATHENA? I mean, more specifically based on the new financing deal, should we assume trial readout to be expected around or by 2022? And do you have subgroup analysis with BRCA or LOH status? Thank you.

[Patrick Mahaffy:]

You should expect the first readout would be in 2021. That would lead to a potential indication as we’ve said in the announcement in the first half of 2022. So, the readout would be prior to that sometime in 2021 based on our present enrollment rates and our planned analysis, based on that enrollment rate. This is a very robust predefined statistical plan of 1,000 patients and there are 400 patients in each of the Rubraca monotherapy arm and Rubraca plus Opdivo arm. So, this is very well powered. And we did not power it optimistically based on the AERIAL3 outcome, we powered it pretty conservatively.

[Operator:]

And with that, I would like to turn the call back over to Breanna Burkart.

[Breanna Burkart:]

Thank you, James. We thank each of you for your interest in Clovis Oncology today. If you have any follow-up questions, please call me at 303-625-5023 or call Anna at 303-625-5022. This call can be accessed via reply of our webcast at clovisoncology.com, beginning in about one hour and will be available for 30 days. Again, we appreciate your interest and time. Thank you, and have a good day.

[Operator:]

This concludes today’s conference. You may now disconnect.