Clovis Oncology, Inc.
Q2 2017 Earnings Call Transcript

Published: 3 Aug 2017

[Operator:]

Good day, ladies and gentlemen and welcome to the Q2 2017 Clovis Oncology Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I would now like to introduce your host for today's conference call, Ms. Anna Sussman. You may begin.

[Anna Sussman:]

Thank you, Kevin. Good afternoon everyone. Welcome to the Clovis Oncology second quarter 2017 conference call. You should have received the news release announcing our financial results. If not, it's available on our website. As a reminder, this conference call is being recorded and webcast. Remarks may be accessed live on our website during the call and will be available in our archives for the next several weeks. The agenda for today's call is as follows

[Pat Mahaffy:]

Thank, Anna. Welcome, everybody. Thanks for joining us today. I'd like to start with an update on the launch of Rubraca. We were very pleased with our second full quarter of sales for Rubraca, which was approved on December 19, 216 by the FDA as monotherapy for the treatment of patients with deleterious BRCA mutation associated advanced ovarian cancer, who have been treated with two or more prior chemotherapies. We achieved 14.6 million in net sales during the second quarter. Through the second quarter, we have over 750 new patients on therapy, and equally impressive over 600 unique healthcare providers who have prescribed Rubraca. The second quarter sales were over double our sales in Q1 and occurred in the face of a competitive launch into an ovarian cancer population, at least four times larger than our current label addresses. While we will be limited to this smaller population of addressable patients until our potential label expansion based on the ARIEL3 data next year, we believe our strong performance to date reflects a general confidence prescribers are gaining with Rubraca. We believe this bodes well for our broader maintenance label that would address this larger population if approved by the FDA next year. Payer coverage continues to be quite positive. As with other oral oncolytic launches, Rubraca generally requires a prior authorization. And as of June 30, over 96% of new prescriptions have been efficiently processed and filled. Now, we'll review a selection of prescribing and utilization patterns for date. The shift to a majority of community based prescriptions has occurred and for the second quarter, 40% of Rubraca prescriptions were from academic institutions, while 60% were through community based practices. We anticipate that the percentage of prescriptions from community based practices will continue to grow over time. We are also contributing to a general increase in knowledge and interest by prescribers in PARP inhibitors and more specifically in Rubraca. While during the first quarter, 20% of our prescribers had not previously utilized a PARP inhibitor, during the second quarter, 40% of our prescribers were first time prescribers of the PARP inhibitor. Overall, we're very pleased with the first two quarters of the Rubraca launch and the feedback we are receiving from the field. We look forward to providing further updates each quarter on sales as well as our efforts and regulatory progress on label expansion in the United States. This planned label expansion will be based on the results of the ARIEL3 data, which I'll now happily review. The highlight of the second quarter of course is the announcement of the top line results of the ARIEL3 study in mid-June. I'll review those highlights today and we look forward to the presentation of the full dataset at ESMO in Madrid in early September. ARIEL3 is a randomized double-blind study, comparing the effects of rucaparib against placebo to evaluate whether rucaparib, given as maintenance treatment to platinum sensitive patients can extend the period of time for which the disease is controlled after a partial or complete response to platinum based chemotherapy. Patients with high-grade serous ovarian cancer who have received two or more prior lines of platinum-based chemotherapy are randomized 2

[Dan Muehl:]

Thanks, Patrick and good afternoon, everyone. Our second quarter 2017 financial results are included in this afternoon's press release. I'll review the highlights of our financial results and provide some additional commentary. Net product revenue was 14.6 million for the second quarter of 2017 and 21.6 million for the first six months of 2017. We ended the second quarter with 671.5 million in cash, cash equivalents and available for sale securities, including net proceeds of 324.9 million from an offering of 3.92 million shares of common stock in June 2017. Cash used in operating activities was 69.1 million for the second quarter of 2017 and 149.5 million for the first half of 2017. This compares with 68 million and 151.7 million for the first quarter and first half of 2016. We reported a net loss of 175.4 million or $3.88 per share for the second quarter of 2017 and 233.8 million or a net loss of $5.24 per share for the first half of 2017. This compares to 129.3 million or $3.30 per share and 212.7 million or $5.54 per share for the comparable periods in 2016. The net loss for the quarter and six months ended June 30, 2017 included a charge of 117 million related to our legal settlement. The net loss for the quarter and six months ended June 30, 2016 included a charge of 104.5 million for the impairment of an intangible asset, a gain of 25.5 million for a reduction in fair value of contingent purchase consideration and 29.2 million non-cash tax benefit related to elicit and product rights recorded in 2013 in connection with the company's acquisition of Ethical Oncology Science S.p.A. The adjusted net loss excluding these items is 58.4 million or $1.29 per share for the second quarter and 116.8 million and $2.62 per share for the first six months ended 2017. And 9.4 million or $2.07 per share for the second quarter of 2016 and 168 to $0.8 million or $4.24 per share for the six months ended 2016. Net loss for the second quarter of 2017 included share based compensation of 10.7 million and 19.6 million in the first half of 2017 compared to 9.5 million and 20.5 million for the comparable periods of 2016. Our second quarter 2017 R&D expenses totaled 33.1 million and 65.6 million for the first half of 2017. This compares to 67.7 million and 142.3 million for the comparable periods in 2016. The decrease year-over-year is primarily due to lower spending on rucaparib and rociletinib development programs and classifying as selling, general and administrative, certain expenses related to the commercialization of Rubraca that had been classified as research and development prior to FDA approval. Selling, general and administrative expenses totaled 36.1 million for the second quarter and 65.4 million for the first half of 2017. This compares to 9.6 million and 19.4 million for the comparable periods in 2016. The increase year over year is primarily due to classifying selling, general and administrative expenses related to the commercialization of Rubraca that had been classified as research and development prior to FDA approval. Operating expenses for the second quarter of 2017 included share based compensation of 10.7 million and 19.6 million for the first half of 2017 compared to 9.5 million and 20.5 million for the comparable period of 2016. Now, I'll provide some further color on Rubraca from a finance perspective. We distribute our product principally through a number of specialty distributor and specialty pharmacy providers. These customers subsequently resell our products to patients and health care providers. Separately, we have arrangements with certain payers and other third parties that provide for government mandated and privately negotiated rebates, charge backs and discounts. As noted previously, the net product revenue is 14.6 million for the quarter. Revenue was recorded net of estimated rebates, chargebacks, discounts and other deductions as well as estimated product returns known as gross to net GTN adjustments, which totaled approximately 8% of gross revenue for the quarter. As revenues rise, the gross to net adjustments are expected to remain in the high single digits as a percentage of gross revenue as the year progresses, assuming that the distribution and payer mix remain consistent. We only recognize revenue on product once the product is resold to the patient or healthcare provider by the specialty distributor or a specialty pharmacy provider. Our distribution mix for the second quarter was approximately 73% specialty pharmacy and approximately 27% specialty distributor, consistent with our expectations and our payer mix was approximately 62% commercial, 30% Medicare and 8% Medicaid and other, also consistent with our expectations. It should be noted that we also had prescriptions for and distributed an additional 19% of supply through free drug distributed to payer assistance plan patients. This is primarily due to a lack of foundation funding for copays for Medicare patients. We understand that this experience is consistent with that of other manufacturers of oral oncalytics and we expect this situation to continue. To be clear, had we been paid for the supply, our revenues would have been approximately 5 million higher through the end of June year to date. Cost of sales for the quarter ended June 30, 2017 was 3.1 or approximately 21% of net revenue and consisted of costs associated with the sale of or Rubraca, mainly freight, royalties and amortization of capitalized acquired intangible license rate and milestone payments related to Rubraca. Based on our policy to expense costs associated with the manufacture of our products prior to regulatory approval, certain of the costs of Rubraca recognized as revenue during the year ended December 31, 2016 were expensed prior to the December 19, 2016 FDA approval and therefore are not included in cost of sales during the current period. We expect cost of sales to remain generally consistent in relation to product revenues as we deplete these inventories and amortize the capitalized acquired intangible license rights and milestone payments related to Rubraca. We expect to use the remaining pre-commercial inventory for products sales in the third quarter of 2017. With the FDA approval of Rubraca, all sales and marketing expenses associated with Rubraca are included in selling, general and administrative expenses and no longer in R&D. This will have the impact of lowering R&D expenses on a comparable basis from 2016 to 2017. Clinical trial expenses were shipped in composition in 2017 as well with the completion of our rociletinib trials and the winding down of ARIEL2, ARIEL3 and study temperate STUDY 10 rucaparib. The ongoing TRITON2, TRITON3, ARIEL4 and other company sponsored and investigated investigator initiated trials Pat mentioned earlier will begin to add to higher levels of spending as 2017 progresses. Now, I'll turn the call back to Patrick for some closing remarks and we'll open it up for Q^A.

[Pat Mahaffy:]

Thanks, Dan. It's a really exciting time at Clovis with several meaningful activities for Rubraca underway. Our initial launch of Rubraca is proceeding well, our supplemental NDA for an all-comers population in the platinum sensitive second line and later maintenance treatment indication based on mainstreamed an indication based on ARIEL3 data, it will be filed by the end of October and anticipated CHMP opinion late this year followed by a potential EU approval early next year in the treatment setting, followed in the very near term by a supplemental filing for a broad maintenance treatment indication. And our collaboration with Bristol-Myers Squibb is now underway with two Phase 3 studies and one Phase 2 study, evaluating Rubraca and Opdivo in combination to commence before year end in ovarian triple negative breast and advanced prostate cancers. This combination could potentially provide a foundational therapy in these and tumor types. And last but not all least, the oral presentation of the full ARIEL3 dataset at ESMO in Madrid on Friday after September 8. We plan to host an investor analyst event on Saturday evening September 9 and we'll provide details closer to the meeting. With that, I'll be happy to answer any questions you may have.

[Operator:]

[Operator Instructions] Our first question comes from Tom Shrader with Stifel.

[Tom Shrader:]

The questions are all about cost saving now, because you have so much activity going on. Do you think ARIEL4, do you still need it, is it still required, it's still enrolling. What does that trial give you now, given ARIEL3 has already confirmed?

[Pat Mahaffy:]

Yeah. ARIEL3 will serve as a, almost certainly service the confirmatory trial in the United States. We do believe ARIEL4 may still be required to sort of as a confirmatory trial in the EU. So we are continuing to enroll that trial. As noted, we don't expect data until 2022. I think that should reflect for you what we perceive to be enrollment timelines.

[Tom Shrader:]

And then I'm not sure you can comment here, but I think, at least I was surprised how you get pounded for that BMS deal. Do you have a ballpark number on how much money you saved from that deal, just to give people a sense of the motivation?

[Pat Mahaffy:]

Well, first of all, I just want to clarify because I know you didn't mean it this way, but we all know that, we didn't get pounded for the BMS deal. I think people understand just how important that is. We got pounded for something else, which is over still alive. And so it's life, it's life. I think you could imagine that for instance, if we had just had to buy commercial drug alone for instance the ovarian maintenance study, that drug could have cost a $60 million to $70 million. So that alone is dramatic. If you think about a Phase 3 study, costing on average somewhere in the neighborhood of $100,000 per patient. And you think that large Phase 3 studies are going to be between 600 and 900 patients, 800 patients, I mean I'm just giving you a range of what these three trials normally enroll. We actually get the benefit of a committed partner who is s helping pave the way for these trials. And I think what's really important is there is an absolute belief on the part of clinical investigators in multiple tumor types including beyond these three described in the agreement we announced Monday that a combination with a PD-1 and PARP inhibitor, in our case particularly rucaparib has the potential to be meaningful additions maybe even foundational in the treatment of those indications. The ability to interact with a partner who can effectively extend our reach on almost like a two to one basis meaning that we're paying half-ish of a broad program as opposed to all of it is in my view an incredible benefit for us, it's a great opportunity for patients, it's really important for shareholders and we've done it all the while maintaining 100% global rights to our drug.

[Tom Shrader:]

And just one quick detail, what do you get in the ovarian trial because you're responsible for that one, correct? You just get free drug.

[Pat Mahaffy:]

Well, I think you need to see this in the context of an agreement to look at three different tumor types, two of which are trials they're sponsoring, one of which we're sponsoring. So I think in the context of all of this, you need to see this as a pretty meaningful commitment by each of Clovis and Bristol Myers Squibb to explore the opportunity for this very important combination.

[Operator:]

Our next question comes from Peter Lawson with SunTrust Robinson Humphrey.

[Peter Lawson:]

I wondering if you'd just give us some indication of what percentage of scripts are kind of off label.

[Pat Mahaffy:]

I think what we can say is that we're pretty confident that approximately 9% of our scripts are in patients with other tumor types. I don't know this for sure but I'm highly confident that each of those would be in another tumor type over the tumor harbors of BRCA mutations.

[Peter Lawson:]

And then congrats on the PD-1 deal. What are the combos you think in and what are the cancer types are you thinking for the PARP / IO because I've seen there are other deals you could do in space?

[Pat Mahaffy:]

Well, in terms of other combinations, we haven't been obviously we have the MITO-25 study in Italy that is in a frontline maintenance study looking at rucaparib plus bevacizumab. So that obviously is an important possible combination. We are looking also at combining with other kinase inhibitors and we'll probably be discussing that over the course of the next several quarters. Other tumor types where we're excited about the potential for combination with the PD-1 or PD-L1 in combination with RUBRACA, well I'll give you our number one in two priorities are lung and bladder cancer. But clearly we have seen interest expressed in tumor types often addressing some of the smaller populations beyond those two.

[Peter Lawson:]

And then just maybe a follow-up just around the R&D comments, how should we think that R&D for the rest of the year and SG&A.

[Dan Muehl:]

R&D expenses will start to tick up as we go into Q3 and Q4. As I indicated we have a wind down of ARIEL2, ARIEL3 Study 10 so those will continue to reduce as the TRITON study and ARIEL4 start to pick up. So that will start to lead to what we believe is an increase in Q3 and Q4 over Q2. And from a G&A point of view it will increase somewhat but it's not at a very high rate.

[Operator:]

Our next question comes from Michael Schmidt with Leerink Partners.

[Michael Schmidt:]

I was wondering Patrick if you could speak about some more about how RUBRACA is being used right now in ovarian cancer and what are you seeing in the marketplace specifically with regards to patients choosing maintenance versus treatment and/or whether BRCA status is influencing that decision. And then I have a quick follow up. Thanks.

[Pat Mahaffy:]

I think I can say and I think you need to assume that the vast majority of our scripts are on label and they're going be within somatic or germ line mutated patients who've had two prior chemotherapies. The vast majority of those patients are going to be - who've had two or more prior lines of chemotherapy. We do not believe we are getting any meaningful amount of use now, we wouldn't anticipate that until it's labeled in this four times larger population that we address with our present label, which is limited of course to BRCA and germline mutated patients. So if you're ever question maybe are we getting biomarker negative or even HRV patients, I don't believe we are and obviously we're not allowed to promote to that. I think that's our used patterns right now.

[Michael Schmidt:]

And a question around potential combination studies, we've heard recently from KOLs that obviously beyond PD-1 inhibitors that Avastin might be an agent that has a particular good rationale do be combined with a PARP inhibitor. And I was wondering if you had any plans to evaluate that beyond the [indiscernible] in the near term in ovarian cancer.

[Pat Mahaffy:]

We've definitely have interest expressed to us and it's something we're actively considering.

[Operator:]

Our next question comes from Tazeen Ahmad with Bank of America.

[Tazeen Ahmad:]

Pat, first one is you said that you could have formal EMA approval in the third quarter of '18, but that you're already starting build out your infrastructure. How big of an organization do you foresee meeting in Europe in particular? And also as we look ahead to try to get our models together, what do you think the price difference could be between US and EU for RUBRACA and then I have a couple of follow up if I might.

[Pat Mahaffy:]

So in terms of organization, I'd say that by the end of this year, so I'm going to just limit it to commercial, I'm not going to talk about the existing organization we have in place. I would imagine we'd have 20 or 25 people onboard. I'm saying I guess commercial and noncommercial, but related to Med Affairs. By the end of 2018, I would imagine depending on reimbursement we would have somewhere in the neighborhood of 100 employees, it could be slightly higher depending on the timing of reimbursement in larger markets. The one thing that is important though as you build that model is to scale the addition of sales reps to achievement of reimbursement. So we will not bring on board a large commercial organization other than general managers, maybe a sales manager, marketing manager in each of the primary territories until we have achieved not just the approval but reimbursement in the primary territories. So you won't see a big bolus of expense in anticipation of revenues two, three, four quarters later, they should be relatively closely tied to each other. As to the pricing in Europe, I think you need to assume that the pricing is going to be consistent with other newly priced oncolytics and it's going to range by country. But that range is somewhere between EUR4,000 to EUR4,500 to on the high end around EUR6,000 a month. So that's a realistic range for present EU reimbursement.

[Tazeen Ahmad:]

And then on your FNDA timeline, what addition work need to be done, you obviously have the full data in house, so what you realistically need until the end of October to complete your filing?

[Pat Mahaffy:]

If you'd like to join me to meet with my regulatory crew just after this call we can berate them together, I'm teasing, it does take a while to make sure you get all the facts right and the submissions are enormous as you know particularly the clinical study report. And so I think that four months from announcement of data which is when we saw the data to an NDA submission news is certainly on the speedier side in our industry. So I think that's a pretty realistic timeframe.

[Tazeen Ahmad:]

And then the last question is, with your partnership with Bristol you're highlighting among other things this metastatic castration-resistant prostate cancer study that you're doing, you're obviously running the TRITON studies. We're got plenty of data at this point in ovarian, some data in breast from you and other PARP companies. What's your view about how effective in theory PARPs could be in treating prostate and to that extent can you describe what you think the market opportunity could be. So several papers we've read for example have cited that approximately 20% of prostate cancer patients have BRCA or other homologous recombination deficiency mutations. Are you finding the same type of information?

[Pat Mahaffy:]

I'd say that there are in the United States 30,000 to 35,000 cases a year of castrate resistant prostate cancer and of that 20% to 25% we think related to your number are going to be either ATM or BRCA mutated, somatic and germline both. So it's a meaningful and important population and they don't have treatment options as they've become castrate resistant. There is the de novo publication in the New England Journal for olaparib that show encouraging results for single agent olaparib in treatment of advanced patients with both BRCA and ATM mutations and that was published in December of '15. We have a poster again for olaparib in combination with [indiscernible] patients, it was a small number of patients, 10 or 11 patients but the responses were really impressive and it appeared to be independent of BRCA status. So that was encouraging to the community. We ourselves have from the Phase 1 and then more recently from some compassionate user experience, admittedly anecdotal evidence not a data set but that every patient treated has had a real benefit. In fact I got a beautiful letter from one such patient who titled the subject line, the comeback kid. And I want to just say again I know this is end of one, but this was a gentleman who had been through multiple rounds of therapy, he was on oxygen he was on wheelchair, share performance status 2 maybe almost performance status 3 and his next stop was going to be hospice until we made rucaparib available to him through a physician that we know him like well, in fact he's now participant in each of TRITON2 and TRITON3. A month or it might have been six weeks after he started therapy, this guy walked into the clinic, he was now a performance status 0, he was off oxygen, his PSA went from something like 400 to 70. And he had a duration on therapy as about 12 months. So it was a great story and so we have an enthusiastic investigator community. We certainly know that as go BRCA so goes RUBRACA. And I believe that this is an obvious choice for us given the dataset that exist.

[Operator:]

Our next question comes from Alethia Young with Credit Suisse.

[Unidentified Analyst:]

Hi, this is Elian [ph] for Alethia, thanks for taking the question and congrats on other progress. In terms of RUBRACA trends, is there any visibility that you can provide us on that patient are switching from other PARP inhibitors. And also can you comment on any trends you're seeing around dose reductions and adherence. I'm going to have a follow up, thanks.

[Pat Mahaffy:]

So I don't have an update, I haven't asked recently about patients who may have switched from another PARP inhibitor to ours. In the early period of the launch and I don't have numbers, but I was aware of some patients who had switched from the olaparib and I think it was driven as much as anything by pill burden that will change when their tablet is approved presumably in the very near future. But we did have some switches that occurred, again I think primarily because of pill burden. In terms of dose reductions, again our average time to refill is 31 days for patients who refill and it was 29 when we reported this in the first quarter. I know those are pretty much the same number and it's also true that 94% of dispensed volume in the second quarter are still so of 300 milligram tablets. So I don't think we're seeing evidence either of a significant amount of patients changing to the 250 milligram or 200 milligram tablets, not yet at least. And further given the time to refill, while I'm sure there are some patients who are taking three tablets a day instead of four, something along those lines. The refill data suggest that is not a very large number of patients at all. I got both of your questions.

[Unidentified Analyst:]

And then just like taking a step back, I guess can you give us a little bit more detail around which indications you're most excited about for PARP's I guess in terms of both market potential as well as the underlying biology of DNA repair. I think you mentioned bladder and lung, but I guess can you tell us a little bit more about you're thinking around the various indications. Thanks.

[Pat Mahaffy:]

I mentioned bladder and lung not because they were my favorite, although I think they're highly meaningful opportunities for the combination. I mentioned that in reaction to what else might you want to do. I think that the selected indications of frontline ovarian maintenance, front line triple negative breast cancer maintenance and obviously our commitment to prostate now potentially in a broader population with Opdivo are all really meaningful opportunities for this combination. And so I won't say any one of them is my favorite, we're equally enthusiastic about the potential of all three.

[Operator:]

Our next question comes from Cory Kasimov of JPMorgan.

[Unidentified Analyst:]

Thanks for taking my question and congratulation on the quarter and on the progress you guys have been making. So my questions are around the upcoming combo trials if I may. So first, you guys - you alluded briefly to this, but wondering if you could expand on the mechanistic rationale behind combining PD-1 and RUBRACA. And how has this increased immunogenicity secondary different from what [indiscernible] and the PD-1.

[Pat Mahaffy:]

Lindsey, I mean I did address that in the script and I don't want to just repeat myself. Lindsey anything you would say to that?

[Lindsey Rolfe:]

Back to the question, so I mean the way I see it there are three separate rationales to combining PD-1 and rucaparib are attractive. I mean the first is the overlap in tumor environment that confer sensitive to PARP inhibitor or a PD-1 inhibitor. And by that I mean and we know that tumors with high levels of genomic damage assed at the PARP inhibitors and we know that tumors with high mutational burden are sensitive to PD-1 or PD-L1 inhibitors. And we know that there is high overlap between those two features. So that suggests that the agents will combine well. And we've got strong envivo annual datas that suggest we see better activity when rucaparib is combined with a PD-1 or PD-L1 compared with when either agent is given a loan. And then as you mentioned we have this third element of stink pathway activation. We know that PARP inhibition increases the immune response to tumor probably by activating the stink path early partly by that. And so that potentially optimizes the environment by making it more immunogenic for PD-1 inhibition. And now you asked whether that was better than immune activation by a cytotoxic chemotherapy, I think it's very hard to say yes, definitely PARP is the way to go. But when you consider that there are many different rationales for combining the two, I would select PARP as the agent of choice.

[Unidentified Analyst:]

And then my second question is, in regards to these multi-arm trials that are coming up, how is the FDA kind of viewing the primary end point on these trials. So, whether [indiscernible] between the combination arm and placebo or for the combination arm versus the monotherapies and I guess to rephrase my question, in the event that there is a statistic significant difference between placebo arm BRCA and combo and placebo but there isn't a statistic difference between RUBRACA monotherapy arm and the combo arm, then what happens.

[Pat Mahaffy:]

Lindsey?

[Lindsey Rolfe:]

So we haven't, so these trials are in standing phases at the moment and we've haven't been to FDA with the designs of any of them that's important to say. But looking into the future, although PARP inhibitors are not yet proven effective or proved in frontline maintenance it's possible that will become standard of care in the future, so we are making sure that the studies are large enough and power to detect a different between the combination and rucaparib monotherapy and rather than just going for combination versus placebo. So we designing them to make them as future proof as we can based on what we expect might happen.

[Anna Sussman:]

Kevin, we have time for one more question please.

[Operator:]

Our last question comes from Andrew Berens of Morgan Stanley.

[Andrew Berens:]

H guys, thanks for taking the question and congrats on a very strong launch even with a competitor temporarily with a broader and earlier label than you. Just wanted to get a sense I guess, are you seeing doctors treat beyond progression and a lot of us build their model off of the clinical trial data. But in the real world, are the patients being taken off drug when they progress?

[Pat Mahaffy:]

That is a real an important question. I have heard anecdotes of that as you know it is rare when one progresses on rucaparib and this is perhaps true of all PARP inhibitor in a sort of explosive way. And I do know of cases where a patient has stayed on therapy when they may have formally progressed and been given you know radiation to zap a new lesion or just watch for a period of time even with modest progression. I think it's also important to note that progression is different in the real world than it is in a clinical trial. It tends to be not driven by, it can be driven by scans or confirmed by scans, but a lot of it is going to be symptomatic and it will be those patients that a physician might say look you're not really benefiting from this and we have to try something else. So while in the clinical context, we did see many centers or many physicians who at the time are formally calling a progression under a recess review would keep them on. I think it's a slightly different situation where they may have already been treating them beyond when a scan would have shown something. It's when symptomatic - when symptoms really emerged but they say now we have to try something else, does that make sense Andy?

[Andrew Berens:]

Yes that does, it does make sense. And then if I could I'd like to I guess ask the white elephant question. We have another competitor has an action day coming and I just would like to get your thoughts maybe a year from now what you see the competitive dynamic looking like in the ovarian cancer market with regard to the labels that you will get and AstraZeneca may get. And how you think that's going to play out commercially?

[Pat Mahaffy:]

I have neither a crystal ball nor magic eight ball in front of me, so this is not going to be a perfect answer, but I'll do my best to kind of rip on what I think. We are prepared for that company and that drug, to receive to all-comers label. It doesn't mean that I think that that's exactly right, it doesn't matter what I think. But we are prepared for that company to like us and like to sorrow to have an all-comers label and believe that we need to be prepared for that possibility. And so in a year, less obviously but in a year when all three of these drugs have likely been approved with an all-comers label, physicians will continue to make their choices based on label and data and from their own experience in terms of tolerability and benefits that they have seen in the clinical trial that they themselves have conducted, meaning they've treated two or three or four patients with these drugs. I think by label and you heard our numbers at the median and you know our hazard ratio. In an all-comers population, we will have a very high difference at the median. And I would say that assuming we get labeled as our data suggests we will have the highest difference at the median. These are not comparative claims I'm making, these are different trials, but for a community oncologist who doesn't have a lot of time to do detailed analyses, they're going to have to look at the data in the label and our label will be very strong. I do think that competitor you mentioned could come into the market with an all-comers label, but the data from Study 19 presumably have to be the basis of that label. And that label will therefore show a Study 19 data difference of three months at the median in all-comers approximately eight months versus five. I do think that that will be compared to what is perceived to be the all-comers label for Tesaro which is 9.4 months versus four. That's sort of unfair because it doesn't include the germline patients, but that's what it looks like in the label. If they're able to discuss with physicians what their all-comers number is its 11 months that's in the FDA review, it's not in their label, but it's in the FDA review. Our number compares by both physician and certainly by independent favorably. Further again not making comparative claims, we feel that our well established safety profile provides a physician and a patient an excellent balance of clinical benefit with tolerability and our confident that perception is shared by the clinical community to whom we currently commercialize and by the KOL community itself. So I will tell you I think it is absolutely inappropriate for any company including ours to claim a best in class status, we don't know enough yet. But I will say nobody has shown better data and the second line maintenance population that we have. We're proud of our data, we're proud of our drug and we know our commercial organization will compete very well with the dataset we have.

[Andrew Berens:]

Let me just ask a hypothetical and I don't have a magic eight ball either, I do have VG board, but I was wondering what if the label that Astra Zeneca get doesn't specify that it's for all-comers, what if it basically says something like as a proof of second line maintenance therapy and there is a limited data outside of BRCA patients to support usage, that leaves it up to the physician to actually make that decision. How do you think - do you think I mean, I guess on one hand you've got [indiscernible] that's been out there for a longer period of time and then you've got you and you've got [indiscernible] with data in the label. I mean how do you think physicians will decide which one to use outside of the BRCA patients.

[Pat Mahaffy:]

Sure. I'd like your run that question by the VG board because I think it's probably going to be more knowledgeable than I am. So Andy, I would be stunned if they said, if a label from the United States Food and Drug Administration said something along the lines of, we don't really have any data but go ahead and use it on everybody, I paraphrasing you, but I would be stunned if a label said that. We are driven by data still in this industry and while FDA may accept data from a different trial with a different formulation as the basis of an all-comers label. I cannot imagine a world in which those data will won't have to be in Section 14 as the basis of their indication. I don't even know if Astra Zeneca would like that because it puts them in a really weird situation with regard to training their reps, how do you arm wave, here is our Abraxane data but use it in everybody, well tell me why, I don't know. I mean, so I don't see it, Andy, I appreciate the hypothetical, but I think it's an unlikely hypothetical.

[Anna Sussman:]

Thanks everyone for your interest in Clovis today, if you have any follow-up questions, you can reach me at 303-625-5022 or Breanna at 303-625-5023. This call can be accessed via replay of our webcast on our website in about an hour and it will be available for 30 days. Thanks for your interest and time and I have a good evening.

[Operator:]

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.