Clovis Oncology, Inc.
Q2 2019 Earnings Call Transcript

Published: 1 Aug 2019

[Operator:]

Good day. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Clovis Oncology's Second Quarter 2019 Financial Results Webcast and Conference Call. [Operator Instructions].Thank you. Ms. Anna Sussman, you may begin your conference.

[Anna Sussman:]

Thank you, Julie. Good morning, everyone, and welcome to the Clovis Oncology second quarter financing call. Thank you for joining us. You have likely seen this morning's news release. If not, it's available on our website at www.clovisoncology.com. As a reminder, this 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, Anna. Welcome, everybody. We appreciate you joining us this morning. We'll begin this morning with a commercial update for Rubraca. Our global revenue for this quarter was $33 million. We were pleased with our Q2 U.S. revenue of $32.7 million, which represented growth of approximately 3% quarter-over-quarter and 39% year-over-year. This growth occurred despite lower inventory levels to our distributors and slightly higher free goods and gross-to-net adjustments in Q2, as Dan will describe in more detail shortly.We continue to focus on growing Rubraca sales specifically and more broadly are working to expand the second-line maintenance ovarian cancer market overall. As we've mentioned on our last several quarterly calls, we have multiple initiatives underway in our effort to compete for market share and to make inroads against the ingrained habit of watch-and-wait as opposed to active maintenance treatment. We believe these initiatives are all contributing to U.S. sales growth evidenced by the quarter-over-quarter growth.I'd also like to acknowledge that we know there's a great amount of interest in evaluating sales progress over the course of the quarter through the searches of sales information from outside vendors. We have historically blocked the access to our actual sales data. And as a result, the algorithms used by these vendors to extrapolate from a small amount of available data may not accurately capture our actual sales, particularly through our specialty distributors. As a result, the predictive value of the sales data provided by these outside vendors may at times be imperfect.To attempt to alleviate this situation, we've decided to make a couple of changes. First, we are amending the contracts with our specialty pharmacies and specialty distributors to allow our sales data to be provided to these outside vendors. These contractual changes will occur over the third quarter, and we anticipate that it will be fully effective in the fourth quarter. This hardly guarantees that any purchase data will be perfectly accurate but hopefully at least directionally more helpful.Second, for the first time here, we are providing sales guidance for the remainder of the year, which Dan will provide in more detail shortly. That will at least give you, at a minimum, our sales expectation for the rest of the year.Turning to the EU. Our ex U.S. sales in Q2 were $0.3 million. Briefly, this sequential decline was due to launch stocking shipments that occurred in March. And as a result, we expect ex U.S. sales to increase in Q3 2019 versus Q2 and in Q4 versus Q3. I'll leave it to Dan to discuss this in more detail.As a reminder, in late January, the European Commission approved an expanded label for Rubraca to include the second line-related maintenance treatment indication based on the ARIEL3 data. In March, we launched in Germany and the private pay market in the U.K. and we are seeing progress now in both markets. We anticipate launching in additional EU countries at the end of 2019 and into 2020 as we receive reimbursement and therefore anticipate increasing revenue in the EU for the remainder of 2019 and 2020.I'll turn now to our most near-term development program in the advanced prostate cancer setting. As you may know, we have 2 ongoing studies in the TRITON program, TRITON2 and TRITON3, and we continue to enroll patients into both studies. Rather than review the study designs again, which are available on our website, I'd like to take the time we have today to focus on the data we have presented to date and the regulatory path moving forward.We first reported initial data from the TRITON studies of Rubraca in metastatic castration-resistant prostate cancer at ESMO in October last year. The initial TRITON2 data presented showed a 44% confirmed objective response rate by investigator assessment in 25 evaluable patients with the BRCA 1 or 2 mutation, and results by blinded independent central review were consistent with that number. In addition, the 51% confirmed prostate-specific antigen, or PSA, response rate was observed in 45 PSA response evaluable patients with the BRCA mutation. Preliminary safety data for Rubraca in men in this indication were consistent with those observed in patients with ovarian cancer and other solid tumors.As a reminder, these data were the basis 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 BRCA 1 or 2 mutant metastatic castration-resistant prostate cancer who have received at least 1 prior androgen receptor-targeted therapy and taxane-based chemotherapy. 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.Later this month, we intend to provide an update to FDA on the TRITON program. This FDA update is largely informational and serves to maintain an active dialogue around our program. We do hope that these ongoing updates may facilitate a more rapid regulatory review since the FDA will be familiar with our data.Last quarter, the timing of this update was such that we had already completed and submitted the update to FDA prior to our Q1 conference call. This quarter, today's call occurs before we have completed our FDA update. I can already tell you, however, that both the RECIST and the PSA response rates in this time to update are consistent with the data presented at ESMO 2018.Accordingly, we remain on track to file our planned supplemental NDA submission for accelerated approval for Rubraca as treatment from any BRCA mutated metastatic castration-resistant prostate cancer during the fourth quarter of 2019. Finally, it will be based on RECIST responses, but PSA responses will also be included as supportive data. We're also pleased to share that the TRITON2 data have been accepted for a poster discussion session at ESMO in Barcelona in late September. Additionally, we will host an investor analyst event on Sunday, September 29, in Barcelona and discuss these results as well as our other data presented at the congress.Next, I'd like to highlight a few additional Rubraca trials and then turn to lucitanib, which is now in the clinic. Our planned pan-tumor or basket study that we introduced last quarter is designed to support the registration for Rubraca across solid tumors in patients with deleterious mutations and homologous recombination repair gene. We have had an encouraging dialogue with FDA about this study and look forward to providing more details about its design. We anticipate the study will initiate by year end 2019. We remain very enthusiastic about our ongoing clinical collaboration with Bristol-Myers Squibb, and we have updates for our combination studies of both Rubraca and lucitanib with nivolumab. I'll begin with the Rubraca combination.We're pleased to announce that a new BMS-sponsored Phase II combination study of Opdivo and Yervoy with Rubraca for the treatment of advanced gastric cancer is moving forward with a planned initiation in Q4 2019. This is the first time that we'll be exploring a triplet combination with Rubraca. We previously discussed the 3 other Rubraca and Opdivo combination trials, which includes the ATHENA Phase III trial in first-line maintenance of advanced ovarian cancer; the ARIES trial in advanced ovarian cancer; and the CHECKMATE 9KD Phase II trial in metastatic castration-resistant prostate cancer, which continue to advance.Some highlights from the Clovis-sponsored Rubraca-Opdivo combination, include the following

[Daniel Muehl:]

Thanks, Pat. Good morning, everyone. The Q2 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. We reported net product revenue for Rubraca of $33 million for Q2 2019. This included U.S. net product revenue of $32.7 million and ex U.S. net product revenue of $0.3 million compared to the net product revenue for Q2 2018 of $23.8 million. U.S. net product revenue increased 3% sequentially from Q1 2019 to Q2 2019, while U.S. net product ex U.S. net product revenues were lower sequentially in Q2 2019 than in Q1 2019. as initial launch stocking shipments were made in March and recorded in Q1 product revenue. We expect ex U.S. net product revenue -- revenues to increase in Q3 compared to Q2 2019 and expect global net product revenue to be in the range of $137 million to $147 million for the full year.Overall, we are pleased with the growth in the U.S. in Q2, which increased sequentially despite higher free drugs as a percentage from 21% to 22%; gross-to-net adjustments, which increased from 14% to 14.2%; and lower distributor inventories which declined from Q1 to Q2. We had $315.9 million in cash, cash equivalents and available-for-sale securities as of June 30, 2019. Cash used in operating activities was $98.9 million for Q2 2019 and $197.4 million for the first half of 2019 compared with $110.2 million for Q2 2018 and $210.8 million for the first half of 2018. For the first half of 2019, total cash used included product supply costs of $42.5 million and a $15.75 million milestone payment to Pfizer related to the second European product approval in Q1 2019. For the first half of 2018, total cash used included product supply costs of $76.1 million and milestone payments to Pfizer of $58 million in Q2 2018 related to the U.S. product approvals in December of 2016 and April 2018 and European product approval in May 2018.The amount spent on product supply costs and milestone payments is expected to decrease substantially on the second half of 2019 and 2020. These reduced costs, combined with anticipated net product revenue growth in the global ovarian indications and the potential U.S. prostate indication in 2020, will significantly reduce our cash burn in the second half of 2019 and 2020. This would be additionally supported by the quarterly cash payments provided by the ATHENA clinical trial financing.We reported a net loss for Q2 of 2019 of $120.4 million or $2.27 per share and $206.9 million or a net loss of $3.91 per share for the first half of 2019. Net loss for Q2 2018 was $101.2 million or $1.94 per share and $178.9 million or a net loss of $3.48 per share for the first half of 2018. Net loss for Q2 in the first half of 2019 included share-based compensation expense of $14.1 million and $27.8 million compared to $14.9 million and $26.8 million for the comparable periods of 2018.Research and development expenses totaled $70.7 million for Q2 2019 and $132.8 million for the first half of 2019 compared to $52.7 million and $96.3 million for the comparable periods in 2018. The increase is primarily due to higher research and development costs for rucaparib clinical trials. We expect research and development costs to be higher for the full year 2019 compared to 2018. Thereafter, we expect research and development expenses -- costs to flatten and then trend lower in the following years as the largest of our sponsored clinical trials near completion.Selling, general and administrative expenses totaled $48 million for Q2 2019 and $95.8 million for the first half of 2019 compared to $44.9 million and $84.1 million for the comparable periods in 2018. The increase year-over-year is primarily due to higher selling, general and administrative expenses related to the commercialization of Rubraca in the U.S. and EU. We also expect selling, general and administrative costs to be higher for the full year 2019 compared to 2018. However, these costs will continue to increase modestly as we prepare for anticipated product launches in a greater number of countries outside of the U.S. and launch activities for the anticipated prostate indication approval in 2020.In May 2019, we entered into an agreement for up to $175 million in nondilutive clinical trial financing with certain affiliates of TPG Sixth Street Partners to reimburse our quarterly costs and expenses related to the ATHENA clinical trial. ATHENA is our largest clinical trial with a planned target enrollment of 1,000 patients across more than 270 sites in at least 25 countries. We plan to borrow amounts required to reimburse actual costs and expenses incurred during each quarter beginning in Q2 2019, and repayment is anticipated to begin in 2022, the approximate anticipated timing of a potential Rubraca first-line maintenance approval in ovarian cancer. The financing is secured by Rubraca assets, and Clovis maintains worldwide rights to Rubraca.Now I'll turn the call back over to Pat.

[Patrick Mahaffy:]

Thanks, Dan. We're pleased with our progress during the second quarter with Rubraca in the second-line ovarian cancer maintenance setting. We're very happy to have our lucitanib combo studies now enrolled. We demonstrated solid sales performance in a challenging U.S. market, but we remain focused on growing our share of the ovarian cancer PARP space as well as expanding the second-line maintenance PARP inhibitor opportunity overall. We are now seeing progress in the E.U. as we launch in Germany and the private pay market in the U.K. and look forward to bringing on additional EU countries later in 2019 and 2020.We're pleased with BMS-sponsored additional combination studies of Opdivo and now Yervoy with Rubraca in advanced gastric cancer, and we continue to have active discussions about other potential combination studies.We remain very enthusiastic about the potential for lucitanib with two combination studies now open for enrollment, one with Rubraca in advanced ovarian cancer as part of SEASTAR as well as one in combination with Opdivo in advanced gynecological cancers and other solid tumors. We hope to have initial data from these trials next year, potentially at ASCO. We're very pleased with the consistent response rates observed in our BRCA-mutated metastatic CRPC data update, and we look forward to providing a more detailed clinical update of the TRITON2 data at ESMO in September.As a result, we continue to target Q4 2019 for supplemental NDA filing for Rubraca for BRCA-mutant patients with advanced metastatic castration-resistant prostate cancer.And with that, I'll be happy to answer any questions you have.

[Operator:]

And at this time, your first question comes from the line of Tazeen Ahmad with Bank of America Merrill Lynch.

[Tazeen Ahmad:]

Pat, just wanted to get a little bit of color from you regarding prostate. In the past, you've talked about FDA's willingness to look at data as the data comes in, and it looks like that's still on track. You've also talked about a particular set number patients that the agency might want to see, roughly, let's say, in 100-patient range, before they might be willing to allow an application for approval. Can you talk about what that sentiment is still with the agency based on any interactions you might have recently had? And then I have a follow-up on ovarian.

[Patrick Mahaffy:]

Yes. The most recent dialogue, at least related to that, that we've had with the FDA occurred following our May conference call on the Q1 numbers. Your memory is accurate. It's kind of in that range, and it's in that range that we will be when we file before the end of this year.

[Tazeen Ahmad:]

I think a competitor has recently announced that they also might be planning on applying for prostate this year as well. You've talked a lot about being first to market and the importance of that as you add on indications. Do you have any thoughts on if a competitor were to apply around the same time as Clovis, how that would impact the potential opportunity for you in prostate?

[Patrick Mahaffy:]

Yes. I think the competitor you're referencing is AstraZeneca's olaparib, and that's based on the PROfound study. We'll see data from the study, I think, this hasn't been formally announced by them, but that's what I hear from everybody, at ESMO. And so we'll able to evaluate their data from that trial versus our data from our trial. Everything I know about our timing and everything I think I know about their timing suggested we're going to be neck and neck. So we may be marginally ahead. They may be marginally ahead. But I think effectively, we are both going to be sort of in a tie about reaching the market, and then we'll obviously compete on the basis of the data that we've entered.

[Tazeen Ahmad:]

Okay. And then on ovarian, you've talked about the importance of the ATHENA study as well. And how do you think the data needs to look in order to be competitive with the other PARPs that are out there by the time you would launch that line indication?

[Patrick Mahaffy:]

Well, we don't quite know yet. One, enough about the combination of a PD-1 and a PARP inhibitor in a platinum-sensitive population, which is what, of course, the ATHENA population is directed at. To be able to predict exactly how this combination is going to be, it's why we're running the ARIES study is I think ARIES, for the first time, is going to give direction as to the relative benefits of that combination.We are going to see at ESMO an abstract from AstraZeneca that will be an update on their MEDIOLA study. And the MEDIOLA study is a study that was a combination of a PARP inhibitor, olaparib, with a PD-1 in germline BRCA patients. And you may remember these data were first presented now 18 or 24 months ago, I think 18 months ago or so, and the response rate was very similar, almost the same as monotherapy Rubraca. But that's the population where you would expect it would be very hard for any combination in a germline BRCA patient to be better than the very high response rate one generates with a PARP inhibitor as monotherapy. The big thing about MEDIOLA is whether it has an impact on the duration of benefit. And that's why I'm looking forward to seeing the MEDIOLA update because we'll have a little peek at whether or not we can expect a longer duration of benefit at a minimum in a limited population, which is the germline BRCA population.At ESMO this year, we will see 2 frontline maintenance studies read out. One is an investigator-sponsored study with olaparib looking at the combination of olaparib plus Avastin in frontline maintenance. The other is the PRIMA study, which is the now GSK study, looking at the combination -- a monotherapy, ZEJULA, in frontline maintenance. These are going to be important benchmarks for us to, one, to see how good the data are. And in fact, we don't even know yet if monotherapy or combo data in frontline maintenance, how much better it is and how much better we should expect it to be in frontline maintenance compared to second-line maintenance. So it's a really important couple of readouts for the class. And then we'll be able to say what do we need to show for our combination, and we may be able to have a little hint of what we could show, at least on a subset of the population that we're treating, with the PD-1 combo.As an aside, this trial is enrolling incredibly fast. And so the enthusiasm of investigators and patients, for that matter, for the combination of a PD-1 and a PARP inhibitor is very, very high, and we will be first with that combination. And I think that what we all see in the immuno-oncology space is that patients are incredibly motivated to receive immunotherapy or combination immunotherapy, and it's logical. The data are good, and patients want to believe that their own body is going to help them deal with their tumor. And I think actually, that combination, if successful, is going to have real marketing advantages given the enthusiasm investigators, doctors and patients have for immunotherapy-based therapeutics.

[Operator:]

And your next question comes from Kennen Mackay with RBC Capital Markets.

[Kennen MacKay:]

Maybe a commercial question first. I was just wondering if you can help us understand a little bit more the lumpiness in orders between Q1 and 2Q. Are these sort of orders stocking dynamics that you need versus other oral cancer therapies? Or how should we think about that going forward? And then maybe sort of a financial follow-up question. With the converts approaching, I was just wondering how you're thinking about the financial or dilutive impact of this and what the strategy would be to deal with this?

[Patrick Mahaffy:]

I'm sorry, Ken. I was planning my answer to the first question. I didn't hear the second. What was your second question?

[Kennen MacKay:]

The strategy for dealing with the convertible debt.

[Daniel Muehl:]

Okay. So as the inventory -- inventory moves around a little bit in the U.S., it's -- whether it's 2.7 weeks or 3 weeks or something. So there's not that much lumpiness in the U.S. But as our sales go higher, lower inventory distributors is going to impact somewhat on our reported sales. We don't anticipate that it's going to be lower than it was at the end of June. It would be hard to imagine it being lower than it was at the end of June. In Europe, it's going to be smoothed out beginning in Q3 and then going forward. So in Q1, we were shipping inventory from -- was it Dublin or Belfast?

[Patrick Mahaffy:]

Belfast.

[Anna Sussman:]

Belfast.

[Daniel Muehl:]

And we were trying to beat Brexit, which was meant to occur on March 29. And we were shipping from the U.K. And so we shipped $1 million into Germany, but we also shipped a greater amount than that into Germany that we didn't want to account for. So it was held at our distributors, and we basically are selling it on consignment effectively.And so we are reporting sales as we normally would when we ship it to a distributor. We held these because we didn't have a really high -- we didn't want a really high number in Q1. That consignment sale is now true. And so now we're selling on a normal basis as we ship into our distributor in Germany and through our distributor in the U.K. So we had a onetime effect that was entirely related to trying to get drug out of the U.K. in anticipation of Brexit, which didn't occur, into Europe. So you're going to hear more about Brexit from every company that has to deal with this.But from now on, our shipments into our distributors in any European country will come from Dublin, which is a part of the EU. So we will not have this effect anymore. Sorry, Ken, we didn't want to write that in the press release because it would have taken us 14 pages, but that's what happened in the EU in Q1.Yes, it was super fun. And as to the convert, it doesn't expire for 2 years. We have been approached by a number of convert holders about the possibility of an exchange to push out the expiry date, and that's very much on our mind, and it's something that we will like the effects sometime in the next couple of quarters. Hello?

[Operator:]

And your next question comes from Gena Wang with Barclays.

[Gena Wang:]

I missed the beginning, so if you already mentioned that, I apologize. Just wondering for the guidance this year, $137 million to $147 million, where will be the main driver? Would that mainly from U.S. or Europe?

[Daniel Muehl:]

Well, the vast majority of that number is going to come from the United States. It does include continuing growth in the United States. We will also include European sales. That will grow in Q3 and will grow in Q4 compared to -- well, I should say Q1, which is our bigger month. It's a little bit of a variable because we don't know exactly when we're going to be approved in Italy and in Spain, not approved, but where we'll go get reimbursements. We do anticipate it for the end of this year, and so European sales are going to be influenced by the timing of those reimbursement agreements as well as a formal reimbursement by the Cancer Drugs Fund in the U.K. So there's a little bit of variability, and we are predicting, because of that uncertainty and timings, a large number of coming from the EU. Next year will be much more meaningful. This year, the contribution from the EU will be pretty modest.

[Gena Wang:]

I see. So for the U.S., so is it fair like if you give a range, that $137 million is more like mainly only U.S. and the additional would be some variability from Europe?

[Daniel Muehl:]

I think that's probably directionally accurate, but I want to be -- we do anticipate growth continuing in the United States.

[Gena Wang:]

Okay. And then if you can give a little bit more color for the U.S. The -- do you see continued increase in terms of a total penetration in second-line ovarian cancer and also regarding your share in that indication in the U.S.? And where do you see the future growth? Is that through penetration? Or is that through patient compliance?

[Daniel Muehl:]

It's a good question. Well, we're actually seeing a little bit of, I'll call it -- I'll say green shoots in both. It does appear that penetration slowly and creepily, or adoption I guess I should say, the second-line maintenance by PARP inhibitors is increasing to some extent in the second-line maintenance market. It's still less than 50%, but we are making progress. And I think for the first time, I saw some market research that suggested that at least the BRCA and HRD patients might now be slightly higher than 50%. So we're beginning to see some progress. It's not dramatic, but that's going to be the phenomenon of a rising tide and lifting all boats.We are also seeing a continuing increase in our market share. Again, it's single digits quarter-by-quarter. It's not meaningful or dramatic, but I continue to think that we're going to -- we're going to see erosion of one of our competitor's market share and growth in ours. And that was definitely what we saw, some of, in the second quarter.

[Gena Wang:]

Great. And then just one quick question regarding the prostate cancer. Just wondering if you can share with us the current, most updated numbers of the patients that are RECIST assessment -- eligible for RECIST assessment? I think the last quarter, you mentioned 52 patients.

[Patrick Mahaffy:]

Yes. It's higher than that. We're finalizing the update for FDA. And so that -- we didn't put a number in because I didn't want to be held to that, but we're finalizing that. And obviously, we'll have a much larger number than 52 when we present the data at ESMO.

[Operator:]

Your next question comes from Paul Choi with Goldman Sachs.

[Paul Choi:]

With the prostate filing on track for year end here, Pat, I was wondering if you could maybe speak a little bit to commercialization and in terms of potential call points at either academic or community practices, and how much overlap you see between the prostate call point and your current ovarian sales call point? And whether you're -- how you're thinking about potentially adding or expanding to the sales force?

[Patrick Mahaffy:]

Yes. I don't think we're going to add to the sales force. There's a tremendous amount of overlap in the academic institutions, even the community-based oncologists, who will -- institutions which will treat each of ovarian cancer and prostate cancer. I've been really gratified over the course actually of the last 2 or 3 months where I've had the opportunity to visit a number of large urology group practices. These are practices that are often called LUGPAs because they belong to membership in an organization called LUGPA, which stands for Large Urology Group Practice, obviously, where the enthusiasm to consider prescribing Rubraca is very, very high based on the data they've seen.So while a small community practice may not be a target a urology practice for us or for Rubraca, these LUGPAs, some of which even employ medical oncologists but who do have a lot of experience prescribing, for instance, abiraterone or enzalutamide, so they're used to prescribing oral oncolytics, have an interest and an enthusiasm for prescribing Rubraca. The number of these practices, which are relatively concentrated, is not large. Between our regional account directors, our MSLs and in particular our sales reps, I believe we can cover this number of practices with the organization we have today.

[Paul Choi:]

With regard to the next leg of clinical development in prostate, I know you're currently doing a Phase II combination of Rubraca with Opdivo. But you also mentioned a new planned trial for a triple combination, and I guess that will be sponsored by Bristol later this year. In terms of updates for -- with regard to the Opdivo-Rubraca combination, can you maybe provide us an update as to when we might see the next set of data or any data from the CHECKMATE 9KD trial either this year or early next year?

[Patrick Mahaffy:]

A couple things I want to say. You said our -- other things we're doing in prostate, and you referenced the triplet study, I just want to be really clear. That triplet is not being [indiscernible] in prostate.

[Paul Choi:]

I'm sorry, gastric. I misspoke, yes.

[Patrick Mahaffy:]

Okay. I just want to make sure that's clear. From 9KD, I kind of have to refer you to BMS for that. We'd anticipated that would be sometime in the next 12 months or so given enrollment patterns, but I don't know exactly when. As an aside, I'll note that on their call, Merck said that they're enthusiastic about the combination of Keytruda with olaparib and are about to begin a Phase III study in prostate in an all-comers population. So they're fairly seeing some substantive enough evidence of activity that they want to pursue that in a Phase III study.

[Operator:]

Your next question comes from Cory Kasimov with JPMorgan.

[Cory Kasimov:]

First one, bigger picture, just I guess given all the health care reform noise in Washington, can you just remind us of your exposure to the Medicare channel with Rubraca?

[Patrick Mahaffy:]

Yes. I'll remind you every quarter of our exposure to the Medicare channels because we provide something like 22% this quarter of free goods predominantly to Medicare patients. So oddly enough, as a market overall, oncolytic, we probably have as limited an exposure to a worse situation with Medicare as anybody. It does remain noisy right now. None of us know how it will all evolve, but I'll give an example. If, for instance, a bill were to pass that have the government support co-pay assistance for Medicare patients, we would be high-fiving ourselves in the corridors here because that would allow for purchase Rubraca.So I have to say that while there's going to be noise about this, and there probably will be throughout the election schedule, which appears now to be an ongoing full year phenomenon, but I don't [indiscernible] having any meaningful amount of incremental exposure to what we have right now.

[Cory Kasimov:]

Okay. And then with regard to the TRITON2 update we'll see at ESMO, I guess I'm curious if there's any nuances that we should be focused on and the update we'll get this year relative to what we saw last year? is it really just more about -- more patients with longer follow-up?

[Patrick Mahaffy:]

Just more patients with longer follow-up.

[Cory Kasimov:]

Okay. And then the last question I had for you is I just wanted to -- as you think about...

[Patrick Mahaffy:]

One thing that I said in this is that both our RECIST response rate and our PSA response are consistent with the data we've presented. The reason I'm highlighting this is you're going to see a reasonably larger number of patients at ESMO eligible for a PSA response. Remember, only about half of the patients we enrolled in the trial are eligible for a RECIST response. And as I've had this dialogue with urologists, they're not scanning patients very frequently. They're really relying on PSA as a marker of either progression in case of where PSA goes up but response rate goes down. So pay attention to our PSA response as well.

[Cory Kasimov:]

Okay. And then when we think about the evolving competitive landscape in the world of PARPs, how would you assess the competitive impact of having a company like GSK now in the market for, say, roughly 6 months? And maybe comparing the difficulty of competing against much larger organizations versus really just getting the label on -- labels on par with the competitors? is it really just the data-driven market? Or is there -- do we need to be thinking about like just the relative size differences here, too?

[Patrick Mahaffy:]

I don't -- so when you look at our commercial footprint compared to either now GSK's or the AstraZeneca one, we're very, very similar. And in oncology, they're marginal and over time declining benefits of having a large organization. So at some level commercially, we are a similar size. So we do compete against a much larger organization. But when you look at the micro world we live in, it isn't much larger, at least in its commercial footprint.And using GSK as an example, if I read their quarterly numbers correctly and our own market research correctly, sales of ZEJULA are actually going down quarter-over-quarter. They're either flat to down. And so there's no evidence that an acquisition of TESARO announced 7 or so months ago has had any impact on the sales performance of ZEJULA. If anything, I think we're taking share from ZEJULA unit-by-unit, doctor-by-doctor. So it's not happening overnight, for sure, but it does appear to be happening.And I think that as the transition continues and as GSK puts more of its own -- takes more of its own formal approach to commercialization, I think that the more aggressive approach that we've seen by an independent TESARO is going to be muted and less aggressive and particularly as it regards to off-label promotion of the 200-milligram starting dose, which, of course, is not in their label.So I actually was kind of pleased when GSK bought TESARO because I thought the marketing approach will become more conservative, and I think we're beginning to really see that in the marketplace. We've competed against AZ for 3.5 years now or 3 years. So we're used to competing against larger companies who, again, in the micro world we live in, are about the same size commercially.

[Operator:]

Your next question comes from the line of Peter Lawson with SunTrust.

[Peter Lawson:]

Just how should we be thinking about the -- potentially the niche you kind of occupy within the ovarian space versus the other PARP inhibitors? is that still to be determined? Or should we be thinking about particular accounts or geographies or lines? That would really help. And then I guess a follow-up around that would just be how you're thinking about your share or what your share is in ovarian?

[Patrick Mahaffy:]

Yes. You should be thinking that we're doing our best to grow sales in a competitive market where there are three approved PARP inhibitors, and we were the third to achieve that approval. And that in the context of that, especially in a market that is not only competitive but it's growing pretty slowly, that we, at least, are able to continue to grow our sales, and that growth is coming, to some extent, by growing our share. The share that Rubraca has of the overall PARP inhibitor market is around 15%, but that includes, of course, breast cancer and frontline maintenance in BRCA patients for olaparib. And so that is not limited to the second-line maintenance.The most recent research I've seen in the second-line maintenance setting, and admittedly, we don't think this is necessarily perfect, but we've gotten our share to greater than 25% according to the most recent research. And you will recall that we're around 20% at the end of last year. So slowly, slowly, we're making some progress.Obviously, with the prostate label coming sometime, I -- we hope next year that will not only provide sales growth but allow us to be one of, I think, 2, assuming the approval for AstraZeneca, who were approved in the prostate setting, and it will be an advantage to us at a minimum to be competing against 1, not 2 or more companies, with that indication, assuming we achieve an approval.

[Peter Lawson:]

That's really helpful. Just on -- around guidance, is there any additional breakout or color you can give around the ovarian versus prostate in that guidance? What nudges you up to the top end of that range?

[Daniel Muehl:]

That's 100% ovarian. That's -- there is not a single prostate cancer patient in that guidance. We wouldn't put that into the guidance or book it and anticipating meaningful sales until we're approved, and that won't come until next year. If we file in Q4, we wouldn't be approved until some time next year.

[Operator:]

Your next question comes from the line of Jing He with G. Research.

[Jing He:]

Could you share your thoughts on the HRD population, what proportion of your sales come from that population? Your competitor mentioned that there are challenges in second-line HRD use. So are physicians comfortable at this point with HRD or they wait until they see the first-line data? If so, how would you compete with your peers who already have first-line label?

[Patrick Mahaffy:]

Yes. So as I referenced, as it relates to the frontline data, it's pretty hard to comment on it yet, but we're going to see frontline data in -- at ESMO in September. I wouldn't anticipate data from those frontline studies being in anybody's label until sometime middle-ish next year. So it's a little hard to predict.I do not think frontline maintenance is going to change the needle that much on the opportunity in the second-line maintenance partly because a number of patients will still not get maintenance therapy in the frontline, unless the data are really compelling; and second, because PARP after PARP is becoming ever more standard for physicians who are treating patients with ovarian cancer.As to what -- one of our sales are to the HRD population. If you include the HRD plus BRCA, because BRCA is a component of HRD, but that enriches a little bit, the percentage of eligible patients who are getting -- who are HRD plus BRCA who are getting PARP inhibitors, it's just a whisker over 50%. The percentage of biomarker-negative patients who are getting a PARP inhibitor is just a little bit over 40%. I presume that is a similar number for us as it is for the market. It's a little hard for us to gather that perfectly.We are presently launching an experiment. We have 96 territories, and 12 territories, distributed geographically, we're actively promoting. This only just began in -- at the end of July, so I don't have any information yet. But we're highlighting our HRD data and promoting it in hopes that we will get some testing and utilization. And we're kind of dipping our toe in whether or not we can get better utilization by highlighting the 22-month PFS versus 5 months from the independent assessment of the HRD population, inclusive of BRCA.The concern we have is it forces the physician to consider testing. And while that academic centers testing can be relatively standard and relatively frequent, it does cause a kind of delay in treatment while you do the test, wait for results and then have the patient come back in. So testing isn't beloved by most physicians. So we're doing this test, and we'll see if we see any change. And if we do see it has a high impact, we obviously would consider expanding that into more territories. But we're dipping our toe with that focus for now.

[Operator:]

And your last question comes from the line of Michael Schmidt with Guggenheim.

[Yige Guo:]

This is Yige on for Michael. We have two questions. The first question is on the ATHENA study. So the study has multiple experimental arms. Will you be able to claim success in filing a hypothetical scenario if only one experiment arm is doing better than the control while the other is not? And you also mentioned before top line results potentially coming in 2021. Just wondering if this top line results is from an interim analysis or a final analysis?And maybe a second question on the pan-tumor study. Just wondering if you can help us to understand this study and your -- provide some color on your strategy here? Maybe you mentioned it, but are you going to file based on the study for tumor type-agnostic label? And what type of cancer do you plan to include in the study? And what would be a reasonable end point of the study?

[Patrick Mahaffy:]

Yes. So the quick answer to the ATHENA trial is effectively in ATHENA, we designed it so that we would look first at Rubraca versus placebo. And then at a later date, we will -- hopefully because we think that it will take longer, we will look at the Rubraca-Opdivo versus Rubraca population. So we -- yes, the answer to your question is can we get an approval if, for instance, the data are good in Rubraca versus monotherapy? And the answer is, I believe, yes. Obviously, we need to see the data.But the quick answer is yes. We will look at those two different analyses, and that was pre-baked into the statistical analysis plan. As to the pan-tumor study, yes, it is a registration-directed trial. We did meet with FDA to discuss the parameters of this trial a little while ago, and the FDA was very helpful to us in understanding their view of requirements for a pan-tumor indication. And without details because we we'll finalize and provide an update of the details of the trial in each of the tumor types that we'll be exploring in that, probably around our conference call in November for the Q3 numbers, because we anticipate beginning to enroll in this trial by the end of the year, I'll just say we were pleased that the number of patients required for this trial is on the order of 100 from multiple tumor types, all with BRCA mutations or a handful of other mutations where we believe Rubraca will be effective. So it actually -- we're very enthusiastic about the potential for the trial to enroll relatively quickly given that size and be the subject, hopefully, with success of a regulatory submission in the next couple of years.

[Anna Sussman:]

Great. Thanks, everyone. We thank you for your interest in Clovis today. If you have any follow-up question, you can reach me at 303-625-5022 or Breanna at 303-625-5023. The call can be accessed via replay on our website beginning in about an hour, and it will be available for 30 days. Again, we appreciate your interest and time. Thank you, and have a good day.

[Operator:]

Thank you again for your participation. This concludes today's conference call. You may now disconnect. Goodbye.