Clovis Oncology, Inc.
Q3 2014 Earnings Call Transcript

Published: 7 Nov 2014

[Operator:]

Good day, ladies and gentlemen, and welcome to the Third Quarter 2014 Clovis Oncology Incorporated Earnings Conference Call. My name is Crystal and I will be the operator for today. (Operator Instructions). I would now like to turn the call over to your host for today, Ms. Breanna Burkart, Senior Director of Investor Relations. Please proceed.

[Breanna Burkart:]

Thank you, Crystal. Good afternoon and welcome to the Clovis Oncology third quarter 2014 conference call. You should have received the news release announcing our third quarter financial results. If not, it is available on our website at www.clovisoncology.com. As a reminder, this conference call is being recorded and webcast. Remarks may be accessed live on our website during the call and will be available in our archive for the next several weeks. The agenda for today’s call is as follows; Patrick Mahaffy, Clovis’s President and CEO will discuss the highlights of the quarter and provide an update on our clinical development program. Then Erle Mast, Clovis’s Chief Financial Officer will cover the financial results for the quarter and comment on the company’s outlook for 2014. Patrick will make a few closing remarks, and then we will open the call for Q&A, field instructor Andrew Allen, our CMO, will also be available. Before we begin, please note that during today’s conference call, we may make forward-looking statements within the means of the Federal Securities Laws, including statements concerning our financial outlook and expected business plans. All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business. Forward-looking statements speak only as of the date on which they are made and Clovis undertakes no obligation to update or revise any forward-looking statements. Now, I will turn over the call to Patrick Mahaffy.

[Patrick Mahaffy:]

Alright, thanks, Breanna. Welcome, everybody, for joining us this afternoon. We continue to make good progress during the third quarter. I like to include the presentation of very encouraging rucaparib data at ESMO in September enrolling the first patient in each of our Phase 2 studies of rociletinib, and raising more than $275 million through sale of convertible notes in September. Let me start with the discussion of current plans for rociletinib. We look forward to providing the next update of rociletinib clinical data during the 26th EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics in Barcelona in two weeks. Since the data were accepted as a late breaker abstract and will be included in the ENA press program, the abstract will remain embargoed until the day of presentation which is Friday, November 21st. We know there is quite a bit of interest in these data and we look forward to sharing them with you after the meeting. Accordingly and as you suspected, we will not provide any data updates on today’s call but please try to join us for an investor analyst update call on Friday, November 21st at 2

[Erle Mast:]

Thanks, Pat, good afternoon, everyone. Our full financial results are included in this afternoon’s press release so I’ll focus my comments on just some highlights, and let me start with our cash position. We ended the third quarter with $516.6 million in cash and that reflects the sale of $287.5 million, the 2.5% convertible senior notes that we completed in September. Our operating cash flow for the third quarter totaled $35 million and it was $85 million for the first nine months of 2014. We continue to expect our operating cash flow for 2014 with a total of approximately $120 million, and it will end the year with approximately $480 million in cash. Turning now to our operating results, we reported a net loss for the third quarter of $39.6 million or $1.70 per share and $105.5 million or $3.10 per share for the first nine months of 2014. Our research and development expenses totaled $35 million for the third quarter and $87.6 million for the first nine months of 2014. Both of these amounts increased over the comparable amounts from 2013 due primarily to the initiation of the ARIEL2 and ARIEL3 studies for rucaparib, and increase in the number of patients that are enrolled in the ongoing TIGER-X study for rociletinib, the initiation of the TIGER2 and the Japanese Phase 1 studies for rociletinib, and then finally increased manufacturing of clinical drug supply for both, the rociletinib and the rucaparib programs. Now as a reminder, the development expenses for lucitanib are being funded by Servier, our partner, so its addition to our portfolio had no impact on our R&D cost for 2014. Total operating expenses include non-cash charges of $6.3 million for the third quarter and $21.5 million for the first nine months of 2014 for share-based compensation expense and amortization of an intangible asset and accretion of contingent purchase consideration, both of which are associated with our 2013 acquisition of EOS. Now with that I’ll turn the call back over to Pat for some closing remarks, and then we’ll open up for Q&A.

[Patrick Mahaffy:]

Alright, thanks, Erle. Briefly on anticipated near term milestones for rociletinib. Obviously, we updated ENA in two weeks, and in the next few months we intend to initiate the randomized comparative TIGER3 study of rociletinib versus chemo in non-small cell lung cancer patients with EGFR mutant disease and acquired TKI resistance. Importantly, we are actively preparing for our first NDA and MAA for submission in mid-2015, and continue to build out our commercial and medical affairs leadership to prepare for a potential U.S. product launch for rociletinib at the end of 2015. Rucaparib will present the first clinical outcomes data from the ARIEL2 treatment study at the ENA in two weeks. And we will continue to enroll patients in the ARIEL2 treatment study and ARIEL3 maintenance study in platinum sensitive ovarian cancer patients with BRCA mutation and other DNA repair deficiencies, as well as the Phase 2 studies of rucaparib in pancreatic cancer patients with BRCA mutation. And finally for lucitanib, we continue enrolment in our Phase 2 studies in the U.S. and patients with treatment-refractory FGF-aberrant breast cancer, and the global Phase 2 study in patients with metastatic squamous non-small cell lung cancer with FGFR-1 amplification. With that, thank you for joining us today, and we look forward to any questions you may have.

[Operator:]

(Operator Instructions). Our first question will come from the Ravi Narodi from Credit Suisse. Please proceed.

[Unidentified Analyst:]

Hi, thanks for taking my question and thanks for the update. Pat, I’m going to respect your wishes and not to push you that we’re going to get a triple, I read your body language, although I would like to know whether you’re leading to the left or right, right now.

[Patrick Mahaffy:]

That’s too political.

[Unidentified Analyst:]

I thought I’d ask two other basic questions to get us on the same page. For rucaparib, thanks what nice bite [ph] you gave on explaining what BRCAness is, can you just expand on that a little bit more and give us you hypothesis to why rucaparib uniquely looks like it has activity in that population? And secondly, any color on the commercial set up for 2016 by the end of next year, and number of people involved, the size of that sales force? [Indiscernible] Thank you.

[Patrick Mahaffy:]

Let’s start with BRCAness and its importance as a driver of defining patients who benefit from rucaparib. Andrew, you want to start with that?

[Andrew Allen:]

Sure, thanks for the question Ravi. So, genetic instability is one of the hallmarks of cancer, and the deficiency in tumor cells of their ability to repair DNA is quite common, and there is one particular type of DNA repair deficiency that is very important because it combines with PARP inhibition to produce so called synthetically – that means if you treat a cell that’s health with a PARP inhibitory sign, but it can treat itself, it has so called homologous recombination deficiency or HRV which is a particular type of DNA repair effect but the cell will end to apoptosis. So what we’re trying to do clinically is to identify patients who have this particular DNA repair defect and then treat them with the PARP inhibitor obviously in the hope that we will induce tumor apoptosis, tumor shrinkage, clinical response in a great outcome for patient. Now the skin type of DNA repair deficiency can be induced by many different gene changes and gene alterations, the best known is BRCA mutation or BRCA mutation as the official others [ph] will term it. And so we’ve known for a while now that if you take a tumor cell that has defective BRCA1 or BRCA2 function, then, and you treat that cell with a PARP inhibitor, the cell will die. And we’ve seen that clinically that if you take patients with germ-line BRCA mutations who have ovarian cancer, they have a very nice response rate to PARP inhibited therapy. Now the response rate we’ve seen with rucaparib is higher than has been described with most of the other PARP inhibitors, many things haven’t really elaborated meaningful datasets in this context. So certainly I think we can say that rucaparib is a very effective PARP inhibitor that’s associated with an extremely high and impressive clinical response. But BRCA is just part of the story as I mentioned, and so the question is, are there patients who have other genetic abnormalities that lead to the same phenotype of DNA repair deficiency, and therefore we’ve also experienced clinical responses when treated with a PARP inhibitor, and that concept of BRCAness simply refers to a patient or two [indiscernible] if it has a BRCA mutation but in fact, the BRCA genes are normal, it’s something else that’s inducing the same phenotype for same benefit from PARP inhibitor therapy. Now this new idea has been around for a while but what’s been challenging is to develop a systematic molecular diagnostic that can be applied to patients in a sensible timeframe and identify who can respond to drug, and that’s obviously what we’ve been working on for a while now with our partners foundation medicine, and we shared the genomic data of the ESMO meeting showing that spelling of definition of BRCAness that somewhere around 35% to 40% of high-grade serious ovarian cancer patients who are the most common types of ovarian cancer patients who will have this BRCAness signature which is actually more than those that have BRCA mutation. And what we’ll be showing it EORTC meeting in a couple of weeks, the first clinical data where we test rucaparib against patients prospectively defined to have the BRCAness signature and obviously what we’re looking for is whether indeed the response rate to rucaparib is higher in those who are BRCAness positive versus those who are what we term biomarker negative, meaning that they don’t have the BRCAness signature and they have normal BRCA genes, and that’s obviously what we are looking forward to sharing in Barcelona.

[Unidentified Analyst:]

Great. Can you talk about commercial Erle?

[Erle Mast:]

Yes Ravi, you ask if we are looking out next year and as you mentioned, our hope is that we will be launching rociletinib sometime in the second half or late 2015. So we are in the process now of doing all of our sales force sizing and as you’ve pointed out, the role of medical affairs for this launch in this product within as we evolve oncology products is very important. We haven’t said along the number of reps we have that is common with companies promoting in solid tumors with community clinics where many of these patients are seeing rep – we’re probably in the hundred range plus field based management, the MSL side, again they will have a very important role for us in the rollout of this drug, and it would be around probably 15 or so MSLs again, plus management over that. So that’s consistent with what you probably see with other solid tumor oncology companies and that’s pretty good estimate of where we are today and we’ll be refining that territory alignment in sizing here over the next few months.

[Unidentified Analyst:]

Got it, thank you Erle and Andrew.

[Erle Mast:]

Thanks, Ravi.

[Operator:]

Our next question will come from the line of Brian Klein from Stifel. Please proceed.

[Brian Klein:]

Hi guys, thanks for taking my questions. First, Pat, you mentioned that you are considering filing in Europe in a similar timeframe to the U.S., so just wanted to get a sense of exposure of European patients to 1686 versus U.S., maybe you could just give us percentages there.

[Patrick Mahaffy:]

It’s higher, if you are, I think are aware – virtually all of our data presented to-date have been in western patients which I think is really critical because those are known to be the hardest to treat with EGFR whereas compared to Asian patients. The majority have been in U.S. patients, 15% perhaps 20% in European so far but as we open more sites in Europe, that mix is going to emerge somewhat differently, I suspect. I don’t know, Andrew, what do you think 30% or 35% will be in European, 65% or so in American by the time we submit?

[Andrew Allen:]

Well there is southern hemisphere as well, and obviously Asia will be participating, I mean is participating now in particular TIGER-2 studies. So the blended global mix going into the dossier will probably be – it will be, the largest group will probably be the U.S., still Europe will be second but then there will be meaningful numbers I think from Asia, and Australia being just one country, obviously relatively small but we do have good uptake in Australia. So I think it will be a truly global mix of patients which obviously is optimal for a global set of application and launches.

[Brian Klein:]

Okay, great.

[Patrick Mahaffy:]

Look Brian, there is no issue with whether end [ph] European is sufficient enough for the ENA.

[Brian Klein:]

Okay. I guess what I wanted to ask next is really, is there a difference in the front line therapy and the response to 1686 in terms of Tarceva versus Iressa?

[Patrick Mahaffy:]

No, we definitely haven’t into that [ph].

[Brian Klein:]

Okay, and then maybe one final question. Any update on the rucaparib trial in pancreatic cancer?

[Patrick Mahaffy:]

We’re obviously enrolling, I think the most realistic date where we would expect to have data from that trial is ASCO. We certainly will hope that at ASCO we’re able to provide an update.

[Brian Klein:]

Perfect. Thanks for taking my questions, I’m looking forward to EORTC.

[Patrick Mahaffy:]

Great, thank you.

[Operator:]

Our next question will come from the line of Erin Wolver [ph] from Citi, please proceed.

[Unidentified Analyst:]

Hi, thanks so much, this is actually Tannin [ph] on for Erin here, two quick questions. I was wondering if you could give us an update on ARIEL3 and enrolment timelines, and just remind us when you would be releasing data from the BRCA mutant and BRCAness cohorts, I mean whether those would be out at the same time or they would be rolling separately. And then just a quick follow-up.

[Patrick Mahaffy:]

So if you mean that BRCA mutant and BRCAness cohorts for ARIEL3, we do – we would intent to release those at the same time. As to enrolment, it’s going fine and I imagine that from these enrolments sometime in the next 12 to 16 months, that’s kind of realistic for us.

[Unidentified Analyst:]

Terrific, okay. And then just real quick follow-up, do you have a sense about how much follow-up in terms of PMS you will need from the TIGER-2 study at the time you will file for 1686?

[Patrick Mahaffy:]

We do, we have a good understanding with FDA and we feel confident that with that understanding we will meet our mid-2015 filing.

[Unidentified Analyst:]

Okay, but I’m not clear how many months of PMS you would need when you’d be filing or you’d be able to expect?

[Patrick Mahaffy:]

Just to be clear, it was not cleared to you purposefully.

[Unidentified Analyst:]

Okay. Thanks for telling me this Pat, thanks so much.

[Operator:]

Our next question will come from the line of Charles Duncan [ph] from Piper Jaffrey, please proceed.

[Unidentified Analyst:]

Hi, it’s Rolance [ph] for Charles, thanks for taking my question. I guess my perspective, obviously I’m going to press a little bit on the data coming upside. As Pat said as the presentation will focus on the 1625 BIV dosing, is that correct?

[Patrick Mahaffy:]

We’ll primarily focus on the 1625, it’s frankly the only relevant data to your awareness and understanding and to more importantly, in our view, investigators to U.S. data because it is expected to be our go forward and commercial dose.

[Unidentified Analyst:]

Okay. So that’s current we can maybe expect to see it’s probably going to be different and then the 418 at ASCO?

[Patrick Mahaffy:]

Well again, this isn’t the call to describe what we’re going to be presenting at the triple meeting. We look forward to the presentation and you will get an update at that meeting.

[Unidentified Analyst:]

Okay. Can you tell us the difference in time between the data at ASCO and the triple meeting that’s going to be presented?

[Patrick Mahaffy:]

ASCO was about four months ago right, I mean realistically it will be an update based on data we have around this time.

[Unidentified Analyst:]

Okay, great. And then, sorry to beat a dead horse, I’ve going over this [indiscernible] but the PSS curve estimate, not the curve estimate but the sentence you guys had at ASCO about it twelve months median estimate, I just want to be hope to say clear that’s not derived from a formal process or an equation, simply an estimate based on not having reached the median?

[Patrick Mahaffy:]

It was a moment in time and that was the estimate at the moment in time, we had not reached the median at that time.

[Unidentified Analyst:]

Okay. Alright, that’s all I have, thanks.

[Patrick Mahaffy:]

Thanks.

[Operator:]

Our next question will come from the line of Peter Lawson from Mizuho, please proceed.

[Peter Lawson:]

Hi Pat, just around rucaparib and the test. Just wondering if you could talk us through the competitive approach that you see using Foundations that BRCAness test versus the Myriads BRCA test [indiscernible] test, do you see a lot of opportunity by using foundations test or just around the choice, some color around that would be great.

[Patrick Mahaffy:]

I guess I would just say that we have enjoyed now two year or longer and always very positive relationship with Foundation who have done for us a superb job. I don’t have anything to say about Myriad, they are certainly a good company and they certainly have good capabilities. We have been working with Foundation, so I won’t make any qualifications about those two, I will tell you the significant meaningful advantage we have is by working with Foundation for these many years and interacting with FDA about the design of the assay and thinking hard about the best way to apply it we have reached a point where we are running prospective studies with our BRCAness assay, and I will just say that I think what is most meaningful is that word prospective in the design and characteristic of our trial, as you are well aware retrospective analysis are not viewed very favorably by regulatory agencies.

[Peter Lawson:]

It wouldn’t be to see a large opportunity – margin market opportunity by using that BRCAness test versus BRCA plus HRV?

[Patrick Mahaffy:]

I don’t have the ability to qualify the size of what Myriad or our competitor believes the size of an alternative definition of BRCAness population would be, that – I’m not capable of doing that. I can tell you that in the data we have so far, as Andrew mentioned, we’ve seen a sort of – we know it’s about 25% of patients who are mutant BRCA, both germ-line and somatic, it appears that with some other 30% to 35% of the patients who are using our definition can be described as BRCAness.

[Peter Lawson:]

Great, thank you. And then Phase 3 data for rucaparib, when can we see that?

[Patrick Mahaffy:]

I’m sorry Peter, I didn’t hear that. Somewhat data?

[Peter Lawson:]

Sorry, Phase 3 data for the ARM data [ph], when can we see that?

[Patrick Mahaffy:]

I think that’s realistically a 2017 event.

[Peter Lawson:]

Okay. I guess finally, with TIGER studies, which one is going to yield data first?

[Patrick Mahaffy:]

Well, the studies that are yielding data that you can see as we go along are the TIGER-X and TIGER-2 studies, each of which will contribute patients to the ASCO presentation we’ll give and that ASCO presentation will be – I think primarily what is the basis of what we will have or we will submit to FDA. If you’re asking about TIGER-3 or TIGER-1 which won’t do I think will emerge first. I am pretty confident for a variety of reasons that it will be TIGER-3.

[Peter Lawson:]

TIGER-3, and so we’ve got to be kind of Q1 2015 or something?

[Patrick Mahaffy:]

I don’t think TIGER-3 has started to enroll yet, so we’re not going to have data in 2015. I think for TIGER-3 something we enroll in very early part of next year and we would anticipate 12 to 18 months enrolment time data within two-ish years of the initiation of that study finds realistic, it kind of depends on how the pace of enrolment in that study but that feels realistic to me.

[Peter Lawson:]

Okay. And the ASCO types, that would be what TIGER-1 Phase 2?

[Patrick Mahaffy:]

The ASCO data will be data from TIGER-X and TIGER-2. I don’t know if we will – it is open labeled to us, so the Phase 2 portion of TIGER-1 is open labelled to us and would available to us. ASCO feels early to me for anything other than sort of trial and progress trial design type poster, more realistic I think for data would be all the – but lung meeting is in Denver in 2015, that sounds like a good place to be presenting the initial data from the Phase 2 portion of TIGER-1, that feels realistic.

[Peter Lawson:]

Perfect, thank you so much, that’s very helpful.

[Operator:]

Our next question will come from the line of Quarry Casamal [ph] from JPMorgan. Please proceed.

[Unidentified Analyst:]

Hey, thanks, good afternoon guys, I appreciate you taking the questions, two of them for you. First of all, how clear cut of a decision was it for you to pick the 625mg dose to take forward, I mean maybe if you could go back to ASCO or your earlier data and break out the safety efficacy profile of that dose relative to the others you’ve tested, can you comment how differentiated this one was?

[Patrick Mahaffy:]

Maybe if you can recall until the 625, that’s how I remember it. Andrew, was there more than that? I’ll start and then Andrew will finish. What I’m happy about is that we did go to a high dose, we export that high dose, I’m talking sort of 1000mg and particular fairly large number of patients at 750mg, and we’re able to contract that relatively large number of patients with 750mg with patients with 500mg and at 625mg. And we were able to make a decision based on not a 3-by-3 Phase 1 but a much larger number of patients that described to us with better clarity, tolerability, the relative tolerability, and the efficacy and relative efficacy of those doses. And 625mg emerged as goldilocks [ph] dose that I don’t mean to dismiss it, it is true that at 750mg we saw horrendous side-effects that demonstrated to us that product in a competitive environment were not necessary given the efficacy and at 625mg we see and hear – we also see the data but we hear from our clinicians that it is a very well tolerated dose and the physicians are pleased with the efficacy they are seeing. So it was the benefit of looking at a pretty robust dataset and being able to make that choice. I think at some level given the tolerability and the general ease that user physician see at 625mg, then you do buy us towards slightly higher dose than we saw, than we see at 500mg although that is also a very efficacious dose. Just been a belief that we still believe in even with targeted therapies that a little bit higher is generally a little bit better in terms of efficacy. Andrew?

[Andrew Allen:]

No, I think you have covered it all I think Pat.

[Unidentified Analyst:]

Okay, and then as a follow-up, now that you have the TIGER-1 study up and running in the front line study, do you have any plans to evaluate 1686 and in adjuvant study?

[Patrick Mahaffy:]

We’ve certainly have had – and I told them discussions that they shouldn’t be called anything other than brief discussions. It’s an agenda item, I think we like to get confidence of this activity in the frontline setting first, and of course that will come from data from the Phase 2 portion of TIGER-1. Probably next on our list beyond TIGER-1 and TIGER-3 is not an adjuvant study but combination studies, primarily in second line patients to begin with and those will initiate shortly. So it’s out there but it’s not something we’re focused on immediately.

[Unidentified Analyst:]

Okay, thanks guys for taking the questions.

[Patrick Mahaffy:]

Thank you.

[Operator:]

Our next question will come from the line of Bob from Welish [ph] Capital. Please proceed.

[Unidentified Analyst:]

Hi, thank you for taking my questions. The first one is, I remember Pat a few months, you mentioned that a potential partnering with TIGER-1 [ph] drug and further you said you tend to give an update around year end, maybe similar time the European meeting, is that still the case or is there any change since then?

[Patrick Mahaffy:]

Just to clarify, we said therapy agent and our intent remains that over the course we hope at the triple meeting these collaborations take a while to put together sometime, so either at the triple meeting or certainly within the next, to your point, by the end of the year. So we remain on track for that.

[Unidentified Analyst:]

Okay. And the other one is about – just 1686, I look at TIGER-2, I noticed that one of the criteria is to trying to avoid the exasperation of QT elongation and I didn’t see anywhere mentioned sugar, or glucose, or hypoglycemia. Can you talk about or share out what are your thoughts on why the data was not included. I mean I understand and I would think of that – for patients who are diabetic patients who want it. As good as that because they are monitoring their blood level much more closer than non-diabetics, similarly used for them but I don’t know whether is there anything I guess in protocol?

[Patrick Mahaffy:]

I just want to be really clear we do exclude, do not exclude patients with diabetes to the point you made…

[Unidentified Analyst:]

That’s right, that’s what I noted that was not included in the exclusion criteria.

[Patrick Mahaffy:]

No. Andrew, anything you want to add to that?

[Andrew Allen:]

No, simply that in the minority of patients who developed temporary drug-induced hypoglycemia, it’s very straightforward phenomenon that can be readily managed with a single oral agent, and therefore we’ve had no reason to exclude any patient from the trial based on pre-existing diabetes, for example, and as you’ve correctly said, they are actually very straightforward to manage, they just keep monitoring their sugars and if there is a change in therapy quantities [ph], it’s pretty easy to institute. So we treat all corners essentially apart from the usual exclusionary criteria in clinical trials of patients with very poor performance based to treat example, otherwise using very open and inclusive trials.

[Unidentified Analyst:]

Okay. Thank you.

[Patrick Mahaffy:]

You’re welcome.

[Operator:]

Our next question will come from the line of Terence Flynn from Goldman Sachs. Please proceed.

[Terence Flynn:]

Hi, thanks for taking my question, two for me. So in the past I know you guys have talked about a potential that a metabolite as 1686 might be inhibiting the IGF pathway and that could be driving the hyperglycemia but it might also have a beneficial impact on efficacy. Just wondering if you guys have anything additional that you have learned over the past several months either preclinically or clinically that you care to share? And then just on the OpEx run rate going into 2015, is this quarter a good number to think about or is there going to be a pretty significant step up given the expansion of the TIGER program, thanks.

[Patrick Mahaffy:]

Andrew, hold up to second on the IGF question and we’ll answer the OpEx.

[Erle Mast:]

Hi Terence, its Erle. Yes, as we look into 2015 overall compared to kind of the run rate where we are now, it will definitely go up. As you’ve pointed out we have clinical studies that are either just getting started now and it will be much more mature next year. And then again depending on the timing of submissions and preparations for potential launch, we will have those kind of costs as well. So the run rate you see now it will increase significantly as we move into 2015 for both, clinical trial activity and again assuming everything stays on plan as we expect for launch preparation activities as well.

[Patrick Mahaffy:]

And then Andrew, you want to talk about IGF1R?

[Andrew Allen:]

Well I think Erle just pumped on it Pat. We will be talking about this in little more detail at the EORTC meeting in two weeks and obviously we’ve not put in anything else out in public domain, so we’re just waiting until that.

[Patrick Mahaffy:]

Okay. More to come Terence.

[Terence Flynn:]

Okay, thanks.

[Operator:]

Our next question will come from the line of Howard Liang from Leerink Partners. Please proceed.

[Howard Liang:]

Thanks very much. Do you know the frequency of HRD [ph] BRCAness, I suppose this will be based on cell line data in other tumors, especially breast cancer or those traditionally have not been candidates for PARP inhibitors?

[Patrick Mahaffy:]

Andrew?

[Andrew Allen:]

Yes, we can estimate that. We don’t use cell line, what we use are public domain cancer genome data such as the Cancer Genome Atlas, and that does present the full genomic characterization as you know typically 200/300/400 different patients with the particular tumor of interest and they include the necessary genetic data that allow us to make an assessment using our algorithmic approach as to what fraction of patients do have BRCAness, as well as BRCA mutations. The caveat is that the vast majority of specimens for those databases are surgical reflection specimens of newly diagnosed patients undergoing attempted period of surgery, and we know that tumor has evolved during the course of therapy, and therefore the original specimen and the tumor, the one we’re dealing with when you’re treating a late-stage patient who is treatment experienced and is often 3/4/5 year’s out from their original surgery, that specimen typically is not the same as the original surgical resection [ph] specimen. And we have been learning from our studies, our clinical program where we’ve been doing fresh biopsy’s, as well as collecting all kinds of material but there are some differences that are very germane and obviously, those are proprietary to us because we’re the only ends to where it will wear off but it’s doing the work to collect fresh biopsy’s and also obtain all kinds of specimens and understand how signatures evolve overtime and over the courses of treatment. So we find this work obviously extensively in a way where they now repeatedly prospectively testing the algorithm, we have done in-silico work in other genotypes and I won’t go list [ph] but suffice to say that there is a BRCAness population that is identifiable in other genotypes and we’re discussing ways to test our hypothesis clinically, prospectively using in particular some collaborations with academic networks, for example, in one show we disclosed those once we’ve made concrete progress on agreements but it is an area of active interest for us right now.

[Howard Liang:]

And for TIGER-1, can you discuss the design with regard to powering, whether this will an adoptive design or would it be based on the results of the Phase 2 portion of the trial?

[Patrick Mahaffy:]

Go ahead Andrew.

[Andrew Allen:]

Yes, I’m afraid those are their alternatives but we’re actually doing an adaptive design based upon the Phase 2 data. So it’s an adaptive sample size reassessment whereby we set off the meetings with the Phase 3 study, and it should initially be quite large, obviously because we didn’t know any better. And then we will complete the Phase 2 part of the study, we’ll continue enrolling into the Phase 3, so from a side point of view this is a seamless Phase 2/3 study but we obviously will be collecting the Phase 2 data and at various points, we will then analyze the Phase 2 data plus early Phase 3 data such as they are and we’ll make an assessment as to the observed efficacy of rociletinib versus erlotinib. And based upon those data we can then resize the Phase 3 study so that we need to overpower nor underpowered to take to the appropriate treating effect. And then with a successful Phase 3, obviously some efficient rate that want from those study, I mean given that as of today none of us know how good these drugs will be in a head-to-head against sort of first generation TKIs, in a front line testing. And so here we have two choices, you either guess as to what using the treatment likes is going to be, or you take observe data and you adapt your Phase 3 size accordingly, and we’ve taken the latter approach.

[Patrick Mahaffy:]

And interested and cleared it, I know Andrew meet this but it didn’t clear. That sizing decision will be based on rules established and then applied by IDMC [ph], so we will not have any visibility to what’s happening in the Phase 3, we’ll be completely blinded.

[Howard Liang:]

I mean, so we will – it will not be communicated to us?

[Patrick Mahaffy:]

Phase 2 data will be, the Phase 3 will not.

[Howard Liang:]

Okay.

[Patrick Mahaffy:]

For Phase 2 we’ll provide you an update and then you can form your opinion about the data from the Phase 2 portion of the study, but obviously once the vial goes down in the Phase 3 then we’ll just report out at some point.

[Howard Liang:]

Do you have some estimate on the timing of the Phase 2 data?

[Patrick Mahaffy:]

It will come out, as I mentioned earlier, I think the first presentation of that is likely to be about a year from now as we’ll go in Denver.

[Howard Liang:]

Thank you very much.

[Operator:]

I’m sorry. There is no further question. I will now turn the call back to Breanna Burkart for closing remarks.

[Breanna Burkart:]

Thank you, Crystal. We thank you for your interest in Clovis Oncology today. If you have any follow-up questions, please call me at 303-625-5023. This call can be accessed via replay over webcast on our website beginning in about an hour and will be available for 30 days. Thank you again for your time. Bye.

[Operator:]

Ladies and gentlemen, that concludes today’s presentation. You may now disconnect. Have a great day.