Clovis Oncology, Inc.
Q1 2018 Earnings Call Transcript

Published: 9 May 2018

[Operator:]

Good day, ladies and gentlemen, and welcome to the First Quarter 2018 Clovis Oncology Earnings Conference Call. (Operator Instructions) As a reminder, this call is being recorded. I would now like to turn the call over to Breanna Burkart.

[Breanna Burkart:]

Thank you. Good afternoon, and welcome to the Clovis Oncology First Quarter 2018 Conference Call. You should have received the news release announcing our financial results. If not, it's on our website at www.clovisoncology.com. As a reminder, this conference call is being recorded and webcast. Remarks maybe accessed live on our website during the call and will be available on our archive for the next several weeks. The agenda for today's call is as follows

[Patrick Mahaffy:]

All right. Thanks, Breanna. Welcome, everybody. Thanks for joining us today. We'll begin with an update on Rubraca and our most recent important event, the US approval for Rubraca in the recurrent ovarian cancer maintenance treatment setting in an all comers population. This extends our indications into all comers and earlier line population. And of course, there is no biomarker testing requirement for patients to be prescribed Rubraca in this indication. With this approval, granted on the April 6 PDUFA date, FDA also converted the approval of the initial treatment indication from an accelerated to a regular approval. Our commercial team was trained on the broader indication and ready to launch immediately upon the approval. While it's too early to discuss any details related to the maintenance launch in the U.S., we've been pleased with the response from the ovarian clinical community to the ARIEL3 data and the Rubraca label, and we are confident in Rubraca's potential in this indication. As a reminder, Rubraca was initially approved in the United States on December 19, 2016, for much more narrowed BRCA mutation specific ovarian cancer treatment indication, so our commercial team has been out in the field selling Rubraca for nearly 18 months now. Based on this narrow indication, during the first quarter of 2018, we achieved $18.5 million in net sales. As noted in this release, this does not include the $5.1 million in commercial value provided to eligible patients as free drug supply to our patient assistance programs. That represents approximately 22% of overall commercial supply, up slightly from the fourth quarter of 2017. We expect the supply of free drug delivered to our patient assistance program to remain at this percentage or even slightly higher for the foreseeable future. Since the initial launch in December 2016 through the end of the first quarter of this year, approximately 1,700 patients have initiated therapy and over 1,000 health care providers have prescribed Rubraca. Of course, this does not include any benefit from the new and broader maintenance label. Sales increased slightly in the first quarter compared to the fourth quarter of last year, and we have had 5 consecutive quarters of growth, despite approvals for 2 other PARP inhibitors with substantially broader labels. Obviously, we believe that our sales growth will accelerate as a result of our new broader label. Let me try to describe this rapidly evolving ovarian cancer market and our role in it. At the time of our launch, Rubraca became the second PARP inhibitor approved in the United States for later line treatment for patients with mutations of BRCA. In the second and third quarters of 2017, the first PARP inhibitors indicated through the second line maintenance treatment setting were approved in all-comers, with no requirement for diagnostic testing. And as you've just heard, I'm pleased to report that as of April 6, Rubraca has a comparable U.S. label in this setting. As a result of the data in the setting, including our own ARIEL3 dataset, maintenance treatment for PARP inhibitors is being rapidly adapted for advanced ovarian cancer patient, irrespective of their biomarker status. We expect that Rubraca will be highly competitive in addressing this all-comers maintenance population now that it is approved by the FDA. We believe our strong performance to date, relative to our limited initial label, reflects the general confidence prescribers are gaining with Rubraca as their experience and familiarity with this clinical profile increases. Many, if not all, of clinicians who have been prescribing Rubraca, of course, are the same clinicians who can now also prescribe it in the second line maintenance setting. Importantly, the feedback we are receiving from clinicians about their patient's experience with Rubraca supports that the clinical profile of Rubraca is well regarded and provides clear benefit to their patients. I should note that given the recent approvals for competitor PARP inhibitors, the majority of the existing prevalent population has been prescribed maintenance therapy prior to our launch. As I've said many times, we believe we will compete well within the [indiscernible] population, which is how I would model revenue growth here. Let me turn now to discussing our regulatory progress in Europe. Our European submission for Rubraca for the mutant BRCA ovarian cancer third line treatment setting was accepted during the fourth quarter of 2016. In late March, we announced that the CHMP adopted a positive opinion, recommending the granting of a conditional marketing authorization for Rubraca, as monotherapy treatment of adult patients with platinum-sensitive relapse or progressive BRCA mutated high-grade epithelial ovarian fallopian tube or primary peritoneal cancer who have been treated with 2 or more prior lines of platinum-based chemotherapy and who are unable to tolerate further platinum-based chemotherapy. We anticipate the European Commission will grant the marketing authorization later this quarter. Following the receipt of the anticipated approval for the treatment indication, we intend to submit a variation to the marketing authorization for Rubraca to improve the second line relator maintenance treatment indication directed at the broader all-comers population based on ARIEL3. We anticipate a potential CHMP opinion for the maintenance indication by the end of this year, with a formal approval in early 2019. It's important to note here for those less familiar with the European regulatory process that upon receipt of a first approval, the second submission is reviewed on a 6-month review plot. Beyond the benefits of the treatment indication itself, we are pleased that the anticipated Rubraca treatment approval should also enable a rapid review for the broader all-comers maintenance indication. Given this timing, we continue to actively build out our European commercial and medical affairs teams. Obviously, the majority of plant hires, including the sales rep, will coincide with reimbursement approval in the individual countries. As a result, the majority of new hires in Europe will occur in 2019, as will any meaningful revenues. Of course, a regulatory clinical safety, quality and supply chain teams are already in place in our Cambridge U.K. office. And importantly, we have initiated an early access program in Europe for rucaparib for treatment and as maintenance therapy in recurrent ovarian cancer to allow access to rucaparib for patients in need until the time the drug is commercially available. Now I'd like to provide an update on clinical development. I'll begin with Clovis sponsored Rubraca development program in ovarian cancer. ARIEL4 is our confirmatory study in the ovarian cancer treatment setting, which is opened for enrollment. This is a Phase III multicenter randomized confirmatory study of Rubraca versus chemotherapy and relapsed ovarian cancer patients with BRCA-mutant ovarian cancer, whose tumors have progressed after 2 or more prior lines of therapy. Primary endpoint of this study is progression-free survival. The ATHENA study is part of our clinical collaboration with Bristol-Myers Squibb, and we are both sponsoring and conducting this study in advanced ovarian cancer in the first-line maintenance treatment setting. The Phase III study, which is expected to initiate this quarter, 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 chemotherapy. This study, in approximately 1,000 patients, includes an all-comers population with a similar step down statistical plan with the ARIEL3. We also have 2 Clovis-sponsored prostate cancer trials that are actively enrolling patients. The first Clovis-sponsored prostate trial is TRITON2, our Phase II single-arm study, inclusive of patients who have a germline somatic BRCA or ATM mutation or other deleterious mutations in HR repair genes whose tumors have progressed after receiving one line of our tax [indiscernible] chemo and 1 or 2 lines of androgen resulted targeted therapy in the castrate resistant setting. The planned primary endpoints are radiological overall response rate in patients with measurable disease and PSA response in patients without measurable disease. If successful, the trial is designed to support a supplemental NDA submission for an accelerated approval. As TRITON2 was an open label study, we are looking forward to presenting initial data from the study at ESMO in Munich in October, pending, of course, abstract acceptance by ESMO. We intend to include data on 40 to 60 patients with sufficient median time on drug to provide an initial view of activity and this genetically defined advanced prostate cancer population, but the primary focus of course on patients with BRCA mutations. Our second Clovis-sponsored prostate study is TRITON3, a randomized study comparative State 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 castration-resistant setting. The study will compare Rubraca to physician's choice of AR-targeted therapy or chemotherapy. The plain primary endpoint is radiologic progression-free survival, and this study could potentially serve as a confirmatory study so the TRITON2 study data result in an accelerated approval. Our ATLAS study is a single arm Phase II open label study at Rubraca, as monotherapy in recurrent metastatic bladder cancer. This is an all-comers population with no selection based on HRD status. Eligible patients are those who have failed 1 or 2 prior therapies. This study is currently enrolling patients and is designed to support a potential accelerated approval. RUCA-J is a Clovis-sponsored Phase I Japanese study now enrolling patients. The study was safety in PK is primary endpoint, seeks to identify the recommended dose of rucaparib in Japanese patients, which will enable development of a bridging strategy and potential inclusion of Japanese sites and plan are ongoing global studies. Our newest Clovis-sponsored study is a plan Phase II open label multi-cohort study evaluating the combination of Rubraca and Opdivo in patients with relapsed BRCA wild-type ovarian cancer as well as in patients with locally advanced or metastatic bladder or who are in eligible for treatment with [indiscernible] This study is expected to begin in the second half of this year. We are well aware and share the desire to see robust combination results for PARP inhibitors and I-O agents broadly, and for Rubraca and Opdivo specifically. We are pleased to get this study going and hope to have initial data from this study toward the end of next year. Turning now to collaborator sponsored studies. There are 2 additional studies that are part of the clinical collaboration between Clovis and Bristol-Myers Squibb beyond ATHENA that I mentioned previously. The Phase III pivotal study in advanced triple-negative breast cancer, which will be sponsored and conducted by BMS. BMS is expected to describe the trial design at a later date, closer to study initiation. A Phase II prostate cancer study, which initiated in late 2017, and is sponsored and conducted by BMS, is currently enrolling. The study will evaluate the safety and efficacy of Opdivo in combination with Rubraca and metastatic - in patients with metastatic castration-resistant prostate cancer. And is being conducted as an arm of a larger BMS-sponsored study in the total of 300 patients. Importantly, the prostate study is enrolling BRCA, HRD and biomarker negative patients, which will allow us to fully understand the relative benefits of the combination in this distinct patient population. Turning to additional collaborator sponsored trials, the Phase Ib study in collaboration with Genentech to evaluate a novel combination therapy of their cancer immunotherapy [indiscernible] and Rubraca continues to enroll patients, Phase I portion of the study sponsored by Genentech Roche is complete, and the recommended Phase II dose is full dose [indiscernible] and full dose Rubraca. The trial is now enrolling patient cohorts in triple-negative breast and ovarian cancer. To wrap up our clinical development update for Rubraca, there are over 30 investigators sponsored monotherapy or combination therapy studies in the variety of tumor types approved or shortly underway. Lastly, for Rubraca. During the first quarter, we announced that the company has received a notice of allowance from the United States Patent and Trademark Office, for patent of claims directed to high dosage [indiscernible] formulations. The patent is expected to issue claims to cover the commercial Rubraca product, including all commercial dosing strengths, 200, 250 and 300-milligram tablet. Upon issuance, the high dosage strength for formulation patent will expire in 2035, and will have the longest term of the multiple patents directed to rucaparib, rucaparib cancellate and methods of treatment. This will be the 10th Orange Book listed patent for rucaparib. Now I'd like to take a few moments to introduce or perhaps reintroduce lucitanib to some of you. Lucitanib is an oral potent inhibitor [indiscernible] kinase activity of vascular and [indiscernible] growth factor receptors one through three, [indiscernible] growth factor receptors alpha and beta and a fibroblast growth factors receptors one through three. Lucitanib was a subject of a partnership with Servier established in 2013, where Servier had gained rights to lucitanib worldwide, except for the United States and Japan were we held and hold rights. In partnership with Servier, we evaluated lucitanib in breast and lung cancers. Based on the hypothesis of activity in SCF of receptor within tumors. The data from these studies were insufficient to move the program forward and that development was discontinued in early 2016. We have said little about lucitanib since that time, other than to note that we expected that Servier would return their rights to us. In fact, last month, we received a formal notice of termination from Servier. As a result, upon effectiveness of the termination expected shortly, we will hold global rights excluding China for lucitanib. Recently, however, there had been very encouraging data in studies of a very similar drug to lucitanib that inhibits the same 3 VHF PDGF and FGF receptor pathways called [indiscernible] in combination with the PD-1 inhibitor, in this case, [indiscernible] These data represent a validated compelling and alternative hypothesis for the development of lucitanib in combination with the PD-1 or PD-L1, and Clovis-sponsored combination study is now being planned. In addition, and as mentioned last quarter, we also intend to initiate a study of lucitanib in combination with rucaparib based on encouraging data for [indiscernible] inhibitors and PARP inhibitors in combination. Each of these studies is expected to initiate no later than Q1 2019 and hopefully by the end of this year. The composition of matter for lucitanib does not expire until 2030 in the United States, and we expect an additional 3 years or even 4 years of [indiscernible] extensions in the U.S. depending on the data first potential U.S. approval, taking our period of protection to 2033 or 2034. Patent protection in EU with extensions will be similar. I should note that there were no payments or planned payments from Clovis to Servier associated with the return of these ex-U.S. rights to lucitanib. If approved, we would owe the originator of lucitannib a mid-single-digit royalty on sales and a single milestone payment to the former shareholders of I-O upon the U.S. approval. We really like the terms for lucitanib. We are also very enthusiastic about the potential for lucitanib in combination studies based on this data. We look forward to sharing additional details of this renewed clinical development program for lucitanib over the remainder of this year. Lastly, before I turn the call over to Dan, on the heels of our recent capital raise, we understand that had been some concerns raised that we are increasing our cash position to enable an acquisition of significant size. While I appreciate this concern, I want to assure you that, in fact, this is not the case at all. The proceeds from the offer are meant to allow us to invest in the launches of Rubraca in each of the U.S. and EU, to fund the clinical development program for Rubraca and our renewed clinical development program for lucitanib and general corporate purposes, including approval driven milestone payments and our Rubraca supply and manufacturing facilities that Dan described in greater detail in a moment. In fact, we have a clear and exciting path forward with our existing programs. We can line a robust Rubraca Phase II and III clinical development program and a plan series of Phase Ib/II combination studies for lucitanib. What we do is everybody does, intend to remain opportunistic regarding potential acquisition or licensing of additional product candidates, we do not intend to pursue anything other than perhaps a very early stage candidate. Now let me turn the call over to Dan to discuss first quarter financial results.

[Daniel Muehl:]

All right. Thanks, Patrick, and good afternoon, everyone. Our first quarter 2018 financial results were included in this afternoon's press release, I'll review the highlights of our financial results and provide some additional commentary. Product revenue is $18.5 million for the first quarter of 2018 compared to first quarter of 2017 revenues of $7 million, which was the first quarter of Rubraca treatment launch. The supply of free drug under our patient assistance program totaled an additional $5.1 million in commercial value during the quarter. This represents approximately 22% of overall commercial supply, and the majority of these patients are on Medicare. We expect a percentage of overall commercial supply of free drug to remain at this level or to be slightly higher for the foreseeable future. Turning now to our balance sheet. We ended the first quarter of 2018 with $463.8 million in cash, cash equivalents and available-for-sale securities. In April 2018, we raised a total of $386 million net through offerings of common stock and convertible debt. With the $386 million of proceeds from these offerings, we have been an adjusted March 31 cash, cash equivalents and available-for-sale securities position of $850 million to begin the second quarter. Cash used in operating activities was $100.6 million for the first quarter of 2018 compared with $80.4 million for the first quarter of 2017. Cash used in operations includes drugs supply cost of $31.5 million for the first quarter of 2018 compared to $18.2 million for the comparable period in 2017. These drug supply costs will increase in 2018. As sales increase, clinical trials expand, and we build inventory and safety stock related to our transition to a new manufacturing facility anticipated to be operational in late 2018. Our product supply cost will be approximately $44 million in the second quarter of 2018, and will be approximately $10 million for the remainder of 2018. We will also incur final capital costs for the new manufacturing facility of approximately $8 million in late 2018 as well. We believe this new facility will not only support anticipated future drug supply needs for Rubraca, but will also do so at a substantially lower cost than our current drug supply. Additionally, we will make onetime milestone payments to Pfizer of $38 million in the second quarter of 2018 related to U.S. product approvals in December of 2016 and April 2018, and potentially an additional $20 million milestone payment in the second quarter upon the receipt of the Rubraca marketing authorization in Europe, if we receive prior to June 15. We expect drug supply costs will be lower in 2019, even with the anticipated higher revenues based on the maintenance indication and potential European sales. Milestone payments for product approvals will also be lower and would be limited to $15 million pending approval for the EU maintenance indication. We reported a net loss of $77.7 million or $1.54 per share for the first quarter of 2018. This compares to $58.5 million or $1.33 per share for the comparable period in 2017. Our first quarter 2018 R&D expenses totaled $43.5 million compared to $32.4 million in Q1 2017. The R&D expenses will continue to increase compared to last year, as our planned clinical studies and development activities progress. Selling, general and administrative expenses totaled $39.3 million for the first quarter of 2018 compared to $29.2 million in Q1 2017. The SG&A expenses will continue to increase compared to last year in support of our commercial activities related to Rubraca in the United States and Europe. Now I'll provide some color on Rubraca from a finance perspective. Revenue was recorded net of estimated rebates, chargebacks, discounts and other deductions as well as estimated product returns, these gross to net adjustments totaled approximately 11% of gross revenue. Gross to net adjustments are expected to be in the high single digits as a percentage of gross revenue for the remainder of 2018, assuming that the distribution and payer mix remain consistent. With the revenue recognition standard ASC 606 effective January 1, 2018, we recognized revenue on shipment to specialty distributors and specialty pharmacies. There is a positive adjustment of $2.4 million to retain earnings on January 1, 2018, to reflect a net impact of the remaining product value at specialty distributors and pharmacies at December 31, 2017, including cost of sales, gross to net and other adjustments. As a result of this change in accounting standard, you can regard the approximately $3.4 million in inventory at our specialty pharmacies and distributors at year-end 2017 as revenue that will never be recognized. Our distribution mix for the year is approximately 67% specialty pharmacy and approximately 33% specialty distributor. And our payer mix was 66% commercial, 26% Medicare and 8% Medicaid and other. Cost of sales for the first quarter is $4.4 million or 24% of product revenue. We expect the cost of sales percentage to increase slightly for the remainder of 2018. Now I'll turn the call back over to Pat.

[Patrick Mahaffy:]

Thanks, Dan. Following our April raise, we are now well capitalized to achieve our goals, even following the manufacturing investments and regulatory milestone payments being made this year. We know that this financing was frustrating to many of you, and I want you to know that we are committed to utilizing these funds to achieve our commercial and development goals and timelines, all the while working to maintain a very long cash runway. We have strong momentum building here at Clovis, with several meaningful activities underway for the remainder of the year. We are enthusiastic about the opportunity of all-comers maintenance label provide us to market Rubraca to a much more population of ovarian cancer patients, and we look forward to reporting our commercial progress in the second line maintenance treatment setting beginning the second quarter results in early August. We anticipate an EU approval for Rubraca in the treatment setting later this year, and plan to follow this in the very near term with the submission of the variation to the marketing authorization, filing for a broad maintenance treatment indication and with a 6-month review [indiscernible] anticipated CHMP opinion on the maintenance setting before the end of 2018. Our robust prostate cancer development program is well underway enrolling patients. Focused on specific mutations of BRCA, ATM and other HRD gene for the potential path to accelerated approval and pending abstract acceptance. We look forward to showing you a first look at our initial TRITON2 data at ESMO in October. Our ATLAS bladder study is opened for enrollment, and we hope to demonstrate Rubraca's activity an all-comers population. Our combination studies of Rubraca and Opdivo, either through our clinical collaboration with Bristol-Myers Squibb or our Clovis-sponsored studies, are playing underway, including Phase III studies in ovarian and breast cancer and Phase II studies in advanced prostate cancer, bladder cancer and non-BRCA ovarian cancer. And we are very enthusiastic about our new clinical development program for lucitanib, in combination with the PD-1 or PD-L1. And with Rubraca, expected to begin no later early next year and look forward to discussing this program much more over the course of this year. And with that, I'd be happy to answer any questions you may have.

[Operator:]

[Operator Instructions] Our first question comes from Tazeen Ahmad of Bank of America.

[Tazeen Ahmad:]

Pat, maybe a couple for you. In terms of the launch and the maintenance indication, when do you think might be in a position that you could include expectation for sales guidance? And then I have a question on one of the trials that you talked about earlier.

[Patrick Mahaffy:]

Okay. Let's just do sales guidance first, and then you can ask the trial question. We're in the launch right now, we didn't feel able to make a prediction and provide guidance at this point in the launch. We are actually committed to providing guidance for 2019, and we'll do so probably at a competitor conference to yours, [indiscernible] probably JPMorgan next year, consistent with most companies that have an approval and no additional approvals coming in that year. It is conceivable that on one of our calls later in the year, August or even in whenever it will be, October, I guess, that we maybe in a position to provide guidance for the remainder of the year. But I would say that the commitment is to provide guidance beginning in 2019 for 2019.

[Tazeen Ahmad:]

Okay. And then maybe if you could go back to the single-arm study that you talked about in combo with Opdivo for bladder and ovarian. Can you give us a little bit more detail on the study designs there? And what you're hoping to get a little bit more color on?

[Patrick Mahaffy:]

I can't. But luckily, Lindsay came. So Lindsay, if you wouldn't mind answering that, that would be great.

[Lindsey Rolfe:]

Sure and thanks Tazeen for the question. So Pat mentioned that one of the cohorts for this Phase II single-arm study or two-arm study noncomparative will be patients with ovarian cancer with Rubraca wild-type disease, but sensitive to platinum. So we know that this is a setting where rucaparib monotherapy is certainly active when we reported that in our ARIEL2 study. But we've also seen better room for improvement. So there's a realistic chance by adding another drug that will be able to show a clear step up in activity that will be quite straightforward to assess.

[Tazeen Ahmad:]

Are you defining this by response rate Or with your measurement?

[Lindsey Rolfe:]

So we haven't finalized the post-call yet, but I think it's highly likely that the primary endpoint would be overall response rate. I could go on. So we also want to really understand what happens in patients that might result in enhanced activity when the 2 drugs are combined. So we're going to give each patient a month's running on rucaparib, with the biopsy of baseline and after that [indiscernible] And we're going to really look at what changes in the tumor in the month, including measures like LOH, tumor mutational burden and activation perhaps of the pathway. We'll also look during the time of changes in circulating tumors DNA and maybe other things, so that it will be - it would be - there'll be lots of opportunities thereafter to see whether adding Opdivo changes things further in the tumor. So we're making this study that's translationally very rich. So that we can really start to understand inpatients what happens when these 2 drugs are combined. And then the study will be, obviously, large enough to achieve its objective, but also small enough to start getting outputs from it quite soon after it starts.

[Operator:]

Our next question comes from Cory Kasimov of JPMorgan.

[Cory Kasimov:]

Also for addressing the recent financings. Thanks for the conference part 2. So I guess, Pat, to start, can you frame expectations a little bit for TRITON2 in relation to prostate data we've seen so far? And how should investors be thinking about a successful outcome given the single arm nature of the study? And then I have one follow-up.

[Patrick Mahaffy:]

Yes. So I'll take a shot at this, and Lindsay may add to it or subtract from it, as appropriate. So first of all, I think it should be seeing most notably relatively to what we would expect to see in that prior end of those docetaxel therapy where we would expect to see 15, 16, 17% response rate. And to remind everybody that sadly at the end of that round of docetaxel, there really aren't any certainly approved products and none that are not approved but widely used. This is an advance patient population. So I would say again that any RESIST response rate in the patient's [indiscernible] for assist, that was over 20% or 25% is impressive. But we'll start with the 3 would be more impressive. If it gets to start with the 4, that would be really, really impressive. It's also true that I would say a similar thing about the PSA response, reminding everybody that PSA response can only be supported from a regulatory standpoint. But for treating physicians and for patients, we'll be an important metric. And so I would say the same kind of range of numbers good 25 or so percent or more, great or better 30 and great in the 40s or something along those lines. So I think obviously that it would be even better. But you maybe referencing, Corey, is the [indiscernible] paper which is really the only published data set on PARP inhibitor in prostate cancer. And the data clearly encouraging. But it was in the 49 patients, 16 of those patients had an HRD gene involvement. So you now get to a really low end. And to further remind everybody, apples-to-apples comparison of response rate aren't easy, unless you really dig deep into that paper, because unlike us, who are talking about distinct populations, a recess eligible patient population for which will report a response rate and a PSA patient population not eligible for RESIST for which will report a PSA response rate, the endpoint in the DiBona paper was a composite of achieving either a resist response, a PSA response or a reduction in circulating tumor cells. So I think it's important that we think about the end of patients, particularly of those comparable to our patient population. And to think about differences and the definition of response, so the - it clearly is encouraging, and perhaps even encouraged us to consider prostate at least in the BRCA and certain other mutated genes for Rubraca. So I mean, I've seen nothing bad about the study, except to say it was a guide, but it wasn't necessarily an example and certainly was not an example that would meet a regulatory standard.

[Cory Kasimov:]

Okay. Okay. That, that's very helpful. And then my follow-up is with regard to the kind of constantly evolving competitive dynamics in ovarian cancer. Curious about your expectations regarding the readout from the Silver 1 study in frontline maintenance? And how you think these results might affect the space as a whole, if at all?

[Patrick Mahaffy:]

So solo 1, which my understanding, and I don't know this for sure, but my understanding is expected to be shown at one of the fall meetings. It could be ESMO itself. Is the study in patients with germline mutations of BRCA monotherapy study in frontline maintenance. So to begin with, it's going to be a limited patient population, the 15% or so of women who have germline mutation. So its impact on follow unused of PARP inhibitor on second line maintenance is going to be limited, and I'm going to come back to that. I think for the class it's important. We're all pursuing frontline maintenance studies. We, in particular with the PD-1 combination, others doing that, following us as well. But since we've seen profoundly good results, particularly in the BRCA population in the second line maintenance setting, we would anticipate even better results in the frontline maintenance population, just given the general nature of oncology benefit for early on patients doing better. I don't know what they're going to have to show to be meaningful to the clinical community. Almost certainly the placebo arm is going to do better than the average of 5 months that the placebo arm generated for the second line maintenance. I think it would be more like 9 or 10 or even 12 months on placebo, given the longer time prior to recurrence, and the fact that 15% to maybe even 20% of women will never recur luckily in the front line maintenance setting. So I think the number has to a minimum begin with a 3. I think it probably has to begin with a 4 to be seen as highly relevant to. And if it is, I think that's really good the class, as we all pursue efforts in the broader population to impact on this disease and prolonged markedly not just progression-free survival, but a period of time a woman could go without undergoing chemotherapy again. So it's important data. Its impact on the second line maintenance market, I think, will be modest. And I further believe that the majority of patients who get a frontline maintenance drug - or maintenance treatment with the PARP inhibitor are actually highly likely if they show benefit, and then did recur to get treated with chemo and then to go on second line maintenance again. And so there's concept of PARP after PARP is not well explored clinically in terms of publication. But I can tell you, it is actively explored by the treating clinical community right now. 40% of the patients we've treated with Rubraca have had a prior PARP inhibitor. And that number in recent days is still about 35%. So it's tracking at about over 1/3 of our patients that had prior treatment with a PARP inhibitor. And interestingly enough, we don't always know why. I will note that if you're worried about resistance, and we do, if there is the possibility that an intervening round of chemo will kind of cost the tumor when it's treated with chemo to revert back to some of its original genetics, not the DS resistant. But maybe even more important, we know in practive that over half of the patients who go on therapy go out for reasons related to tolerability or to just patient fatigue kind of literal fatigue, but more likely just fatigue from being on drug. So they may not even be resistant and be eligible easily for another round of the PARP inhibitor. So an important set of data to demonstrate better activity in a germline BRCA population in the frontline setting, but I think limited impact on the second line maintenance indication.

[Operator:]

And our next question comes from Kennen MacKay of RBC.

[Kennen MacKay:]

Pat, going back to your - about the second line ovarian maintenance opportunity and thinking about for the incidence perspective, just wanted to see if some of the number of incident patient's that's by competitors is how, I guess, you're thinking about it internally? Should we be thinking about sort of 180 new patients across the [indiscernible] per week?

[Patrick Mahaffy:]

I think that's a reasonable prediction. I only say 180 to 200, but that's just a wiggle room. But 180 is a good benchmark. We would accept that too.

[Kennen MacKay:]

Got it. And then, just wanted to get a perspective as to whether from your internal work and feedback from the sales force that you have out there, whether in the maintenance setting physicians are sort of viewing [indiscernible] sensitivity biomarker here over the positions are doing additional work just beyond getting gBRCA from these patients obviously before the launch some of the new credit diagnostic PARP inhibitors maintenance patient for the most part, only knew whether they were BRCA positive or non-BRCA where they were initially diagnosed. But when these non-BRCA patients are relaxing and getting subsequent lines of platinum, our physicians then requesting them for HID status. Again, is it just platinum sensitivity, just wondering is sort my choice assay or assays are coming back.

[Patrick Mahaffy:]

Kid, I'm going to try to answer that question. But if the embedded in a few. So let me try. For the question is do we think there's absolutely limiting the use of maintenance to platinum-sensitive patients, I don't have perfect market research on that but I will say in practice if their platinum resistant, that probably means they failed their second round of platinum-based therapy. And the physician is thinking not of maintaining what will be effectively a non-existent response.

[Kennen MacKay:]

I was referring more to patients who when they were initially guidance with ovarian cancer, they were tested for BRCA, for gBRCA, for non-BRCA to the platinum, how to responsive several up to a year and then subsequently relapsed. And then as they then get their subsequent platinum therapy, if again they are platinum-sensitive, non-BRCA, but they don't know their HIV status. Just was wondering if physicians are using sort of HIV testing to inform PARP usage in your [indiscernible] in the maintenance setting to platinum-sensitive patients? Or other extremely platinum sensitivity?

[Patrick Mahaffy:]

I think for family reasons, the majority, in fact, we think about 90% of patients in the United States are tested for germline BRCA. So you're right, by the time they would be eligible for second line maintenance, the majority of these patients and their physicians maybe a vast majority are going to know germline status, very few will know their HRD status. One of the unique outcomes of our interactions with FDA is that the data for patients who are HRD-positive are actually in Section 14, the clinical results section of our label. And you're aware probably [indiscernible] foundation did get their PMA approved. So there's an FDA approved assay for HRD or LOH, similar. But I don't believe that very many patients will be tested for their HRD status. I know that often are sometimes from podiums we hear KO also describe the importance of doing that testing it, and we would importance of knowing that, but for practicing physicians, if a diagnostic is not required to, and in particular, benefit was seen in the biomarker negative publishing, which is for us, then the cost of the diagnostic will presumably be reimbursed, but in particular the time it takes to get the results back, which is kind of slow things down. And the physicians what we have seen so far in maintenance and we have not seen a difference under a short period of time that we've launched ourselves in the maintenance setting is that the amount of tissue-based tasting has come down pretty remarkably. And the testing for germline is maintained, but I don't really think it's going to change much I can. I think this is an all, population for the most part, that had been treated without a diagnostic.

[Kennen MacKay:]

Okay. That's very helpful. And then one final question on the prostate cancer market. Again, wondering as we go back and look at the literature sort of post-chemo androgen receptor and androgen, post-engine, post-chemo, wondering if there were any sense as to how BRCA positive patients respond to therapy versus non-BRCA patients? Are there more aggressive tumors with certain lower response rates? Or would it be really some any sense from a genetic basis?

[Patrick Mahaffy:]

Lindsay?

[Lindsey Rolfe:]

Thanks, Pat. I don't have a great or precise answer to this. And I don't think [indiscernible] definitive literature, but there's nothing that I'm aware of to suggest that these patients have a more benign disease cause or better response to existing agents. So we'll see what we get with our setting.

[Patrick Mahaffy:]

The one thing I realized that is I don't know any more than Lindsay about responsiveness. But BRCA mutations to appear to be a pretty poor prognostic factor for mutant prostate cancer, because there's only about 2% of patients or maybe 3% diagnosed who are BRCA positive diagnosis and it gets to be in this 15-plus-percent, maybe 20% when they become metastatic. So that maybe telling us something.

[Operator:]

Our next question comes from Terence Flynn with Goldman Sachs.

[Terence Flynn:]

Maybe just a follow-up your comments regarding the retreatment setting. Do you have any data yet regarding duration of treatment there? PARP maintenance, coming on rucaparib, how does the duration compare versus getting a PARP upfront? And then second question I had was just a little surprised to hear about lucitanib again. Can you give us an estimate of how much you're planning to spend on those trials that you mentioned, all in?

[Patrick Mahaffy:]

So let me do lucitanib first. The trials that will begin next - that - they may begin in the fourth quarter, they may begin in Q1 will, in each case, the Phase Ib/II studies that will first ensure at least one of them will ensure a dose of rucaparib and lucitanib, both will actually be Phase I/II and a dose of a PD-1 or PD-L1 with lucitanib and then go into expansion cohorts. So I don't think the impact of that maybe 60 to 80 patients treated in 2019, assuming that's a pretty optimistic estimate maybe 40 or so in each cohort, would be any more than $8 million to $10 million. So the impact on '19, relative to the importance of the data, are going to be really modest. So I, obviously, as we roll out plans encouraging data, we hope to see based on the president data, that this will get rolled into models for 2020 and 2021, but based on a good data set. In terms of data for PARP activity after PARP activity, that's going to require in the field needs it, data set where we can actually evaluate how our PARP inhibitor just following up prior to her. We don't have any information about the benefit that those who are on fire PARP inhibitor may have received we could use our own response rate data for second or third line patients for us to do it. But we don't have specific data. And the way we get these data and so we also don't have response rate data, but it's an important question, and I continue to think that we in the community of PARP inhibitors need to think about trying to answer that question, but the trial design itself would be complicated, especially with an intervening round of chemo.

[Operator:]

And our next question comes from Peter Lawson of SunTrust Lawson.

[Peter Lawson:]

Is there anything around the maintenance setting? Any initial interest you can share around that? And then just get - that market, how do you think about penetrating that and either segmenting that market with some physicians that have already developed a lot of experience around other PARP inhibitors?

[Patrick Mahaffy:]

Well, it depends on your definition of late to that market. This is not a matured market. We think about 35% of eligible patients in the second line maintenance setting are today treated with PARP inhibitors. And we think that PARP inhibitors are going to become the standard of care in second line maintenance. So first of all, the number of prescribing physicians in the market size itself are going to grow, I think pretty meaningfully over the course of the next several years. One of the reasons for that is that being late has entering the market 8 or 9 months, 9 or 10 months behind the first approved drug and 6 or 7 months behind the second approved drug. So it's not a typical late to market where something was approved 4 years ago, and people have gotten really used to what their experience is. And then, finally, you are aware that one of the competitive drugs has some issues with regard to tolerability. And we have - when I regard as an incredibly clean label. And we also have relative to the label of another one of the competitors real evidence of a strong progression-free survival compared to the progression-free survival of a similar label. So I think that by label data, by published data, we have a unique opportunity to come into this market, competing to this incidence population and it make a case for white Rubraca from a drug many of them have experience with and good experience with in the treatment setting, should be a drug of choice for them in the maintenance setting. And with that going too far down the path of talking about what we've seen and heard so far, because it's literally 3 or 4 weeks, we have been really pleased with the response. I may have noted this before, we have had many clinicians experience with the drugs say just can't wait for you to get the maintenance label because we got to use in maintenance, and I think that's manifesting itself in real life.

[Peter Lawson:]

And then thanks for the color around the free drug as a percentage of revenues. What do you see that mixture of the patient insurance mix? Or is it a mixture of the maintenance versus the treatment setting? Or is it some competitive dynamic that's playing out?

[Patrick Mahaffy:]

First, I don't think it's a competitive dynamic. I think that because the foundations that has been founded before to support co-pays have not been funded, that co-pay support is not available, and because it's illegal to help with the co-pay for a government patient, could there be a Medicare or Medicaid patient, it's each of the 3 PARP inhibitor companies to provide, I would guess, a reasonably similar amount of free drug. Why we say that it could go slightly higher is one of the other companies with our PARP inhibitor does discuss a slightly higher number. And two, we think that with the maintenance label our patient makes will change slightly tragically at our earlier label, which is limited to BRCA patients, probably then a lower incidence of Medicare patients because many of these women with BRCA mutations develop their tumors at a relatively young age. And so with that mix changing, with our maintenance indication, it could go up slightly. We're going to continue to guide to this, being the case for the foreseeable future. Obviously, finding want to come out into the foundations and that could change. But until as it when it yes, we'll guide to the numbers that we've described in the press release and on this call.

[Operator:]

Our next question comes from Steven Breazzano of Evercore.

[Steven Breazzano:]

Maybe on prostate, can you just talk about the FDA receptivity towards using [indiscernible] and PSA response for filing purposes?

[Patrick Mahaffy:]

Differentiate. We have minutes and then understanding with FDA that, in fact, any accelerated approval is going to require data in a recess eligible population, with a recessed response rate. And the PSA data will be seen as supportive. So they will accept a response rate, they don't describe as you're all aware a number that they have a difference, I think they're waiting to see that the totality of the data response rate, duration, tolerability before they make that judgment. But the PSA will be supportive, but the recessed response rate will be required.

[Operator:]

Our next question is a follow-up from Kennen McKay of RBC.

[Kennen McKay:]

I just wanted to ask one more follow-up question, maybe about sort of very, very, very long treatment durations with PARP inhibitors, a couple of ASCO's ago, the long-term follow-up of Study 19 had presented some data showing that a small percentage or around 13 or so percent of patients have stayed on drug, stayed on for at least 5 years. I just wanted to get your perspective on feasibility of that. And in the maintenance setting, and if there was sort of a subset of patients who we could be thinking about who would be much more valuable patients who could be these types of patients that would be on therapy for very, very extended period of time.

[Patrick Mahaffy:]

So I don't know, Lindsay, if you have - I'm aware of those data. We have our own data anecdotes data set of patients, who in ARIEL2, has been on the study for 3 years or longer. But I don't know, Lindsay, it through the Study 19 data set or any further look we may have taken at ARIEL3 that we can predict who might have a longer profoundly long durations other than, I would guess it would be more BRCA patients than not. But do we know anything more than that, Lindsay?

[Lindsey Rolfe:]

And no, Pat.

[Patrick Mahaffy:]

Yes, I don't know that they hypothesized other than then again it's be interesting if you broke that remember that study result. We are actually please note that now that we've been in the market for a year, we know that about 10% of the patients who were treated with Rubraca commercial supply in Q1 still remain on drug. And the reason that so encouraging to us is that, that included a bolus of patients who are really advanced, either third line or more likely greater. So I think that even in the treatment setting, we're seeing that there is a percentage of patients, these very advanced patients, who really have strong long-term benefit relative to expectations from the drug.

[Operator:]

At the same, I would like to turn the call-back over to Breanna Burkart for any closing remarks.

[Breanna Burkart:]

We thank each of you for your interest in Clovis Oncology today. If you have and follow-up questions, please call or e-mail me or Anna. You can access this call via replay on clovisoncology.com beginning in about 1 hour, and this will be available for 30 days. Again, we appreciate your interest and time. Thank you.

[Operator:]

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