Good afternoon. My name is Farzin Haque, one of the biotech analysts at Jefferies. I'm happy to introduce Mark Velleca, CEO of Black Diamond Therapeutics. This is a fireside chat format. Thank you for joining us today.
Thanks, Farzin. Pleasure to be here.
For those who are new to the story, can you provide a short overview of your program?
Sure. So Black Diamond is a precision small molecule oncology company. Our lead program is a potential best and first-in-class fourth-generation EGFR TKI that's in phase II development for frontline newly diagnosed non-small cell lung cancer patients. We also have a program, a pan-RAF/ RAS inhibitor, that was partnered with Servier in March. And that's in phase I.
Got it. I wanted to start off with some bigger picture questions. How big is the first-line market opportunity in EGFR non-classical mutation setting in non-small cell lung cancer?
Yeah, it's actually quite large. Approximately one quarter, 25% of newly diagnosed patients with an EGFR mutation non-small cell lung cancer have one of these non-classical mutations or NCMs.
Any granular breakdown would be helpful, such as the proportion of patients that have CNS Metastases at baseline.
Yeah. Important to note, about a third of newly diagnosed patients with one of these non-classical EGFR mutations have CNS Metastases at the time of their diagnosis. Critically important to have a brain penetrant compound.
What is the standard of care in the first line? For added context, what is the expected response rate and time on treatment in the real world based on KOL feedback?
Yeah. So unfortunately, there's no standard of care for newly diagnosed patients with these non-classical EGFR mutations. We have real-world evidence, and we certainly collected feedback from KOLs. Slightly more than half, about 60% of patients still get chemotherapy with very poor outcomes. About 20% get Afatinib, and another 20% get off-label Osimertinib. Now, if you think about time on treatment for those two targeted therapies, Osimertinib, you only see about six months time on treatment, which is far shorter than what you'd see with Osimertinib in patients with classical mutations. Afatinib, not much better at about eight months time on treatment. That is because Afatinib is relatively poorly tolerated. There are lots of dose interruptions and discontinuations and has no brain penetrant. Many patients progress because of CNS Metastases. Response rate for Osimertinib in this patient population is 20%-40% for nearly all of the mutations.
There are a couple where you can see higher response rates, 50% plus, but they are the minority of the mutations. Afatinib response rates can be definitely 50% or greater, but response durability, again, is poor because of lack of CNS penetrants and poor tolerability. So BDTX-1535, our fourth-gen EGFR TKI, really uniquely positioned.
Sure.
BDTX-1535, our fourth-gen EGFR TKI, which hits the full spectrum of these EGFR non-classical mutations and is CNS penetrant, is really uniquely positioned to capture this sizable frontline opportunity. We are the most advanced fourth-gen EGFR TKI in the space.
Great. You have a major data readout coming out in fourth quarter in the first-line setting. Have you completed the enrollment yet for the target 40 patients? How many patients and duration of follow-up and efficacy measures can we expect in the readout?
Yeah. As far as enrollment, the trial's going very well. We're not quite done with the 40th patient enrolled. At the time of the data disclosure in the fourth quarter, we expect to have approximately 30 patients with at least six months of follow-up. For efficacy measures, it's as you would expect for an early trial readout. There'll be an ORR and a DOR, preliminary DOR, that'll be presented on waterfall, spider, and swimmer plots. It's going to be too early for PFS.
Got it. Based on the follow-up time needed, will the update be at a medical conference such as SRIPL or ESMO, or will it be later in fourth quarter at a company-sponsored event?
Later in the fourth quarter at a company-sponsored event.
Got it. You have talked about having regulatory feedback in the update as well to give a more fulsome picture. What is the data cut you expect to have in order to meet with the regulators? Would you wait for the meeting minutes to be in hand prior to street disclosure?
Yeah. We think it's critical at the time of the data disclosure to also have regulatory feedback on the pivotal path forward to approval. Yes, we will wait for the minutes of that FDA conversation before we disclose both the data and the path forward. As far as the data we will bring to that meeting, this compound has been in over 200 patients. We have a substantive safety database, 160 patients in non-small cell lung cancer, the balance with glioblastoma. We'll have the full phase II data set. The 83 patients that are where we completed enrollment phase II in the recurrent setting and the 40 patients that we will have enrolled in the frontline setting. This will be a fully phase III ready program when we go to the agency later this year.
Got it. What are the baseline characteristics of the patients that you have enrolled in the study, such as compound mutations with co-occurring classical mutations? Are there any specific criteria for inclusion/exclusion based on the presence of CNS metastasis at baseline?
Yeah. The funnel is wide open for any patient who has a non-classical mutation. We are enrolling the full spectrum, a diverse set of PACC mutations, classical-like mutations, other atypical mutations, including patients who have compound mutations, so more than one non-classical mutation. Those are all being enrolled. As far as CNS Metastases, again, we expect about a third of these patients to present with brain Metastases. We are allowing those patients onto the trial untreated. They will have not received radiation for their CNS disease. We think this is a really important patient population to address because they are not currently addressed with Afatinib.
Are you evaluating both 100 and 200 mg once daily doses in the first-line study or just single dose?
We are not. We're only advancing 200 mg into the first-line cohort. We completed dose optimization in the recurrent setting earlier in our phase II trial. We enrolled 20 patients at 100 mg, 20 patients at 200 mg. That was part of the dose optimization conversation we had with the agency at the end of phase I. We've taken those data to the agency last year, and they have no objection to us moving forward at 200 mg.
Makes sense. Response rate and durability are the two key measures in the first-line setting. How are you setting expectations for the interim readout and what would be clinically meaningful threshold?
Yeah. So what's clinically meaningful for these patients? I told you about the time on treatment, six to eight months for Osimertinib and Afatinib, and only four months for chemotherapy. Response rates that are anywhere from 20% to 50%. We believe that what's clinically meaningful and would get significant uptake in this patient population would be an ORR of 50% or greater and a DOR of 12 months or greater.
What about in the CNS Metastases patients?
Yeah. CNS, having activity in patients with CNS Metastases is quite important. I think that would actually be one of the factors driving DOR and PFS because you're able to adequately address CNS Metastases.
Makes sense. What about safety? Any reason to think the profile could be any different than what you have shown in the second-line patients?
Yeah. So safety for this agent has been quite favorable. What we're seeing are only those known EGFR TKI AEs of rash, diarrhea, paronychia, and stomatitis. We have relatively low rates, single-digit % rates of grade three of those AEs. This is a safety profile that's much more similar to Osimertinib than it is to Afatinib, which has double-digit % rates of rash, diarrhea, et cetera. We have no off-target AEs that we've seen, so no QTc prolongation, for example. Now, as far as your question about frontline patients versus recurrent setting patients, it's well known, and this was known for Osimertinib because it was first developed in the recurrent setting. Frontline patients are a bit more sensitive to a TKI because it's the first time they're seeing it. That's especially true for rash.
What we've done in this trial, just like what was done with Osimertinib, is we educate the physicians about what their patients are going to feel like. Typically, on day four or day five, they get this acneiform rash. We make sure that they have a prescription for doxycycline that they can fill and use or use topical creams. That addresses the rash and typically resolves in a couple of months. It is alarming for a newly diagnosed patient taking this drug for some patients. If it's especially problematic, it can be addressed with a simple dose reduction from 200 to 150.
Got it. Focusing on the next steps, what do you envision an accelerated approval path could look like? Do you see potential for the registration study to be a single-arm study or likely randomized versus physicians' choice, I guess, of chemo, plasma IO, Osimertinib, Afatinib, et cetera?
Yeah. So we've looked at several different strategies to get this drug to approval. And we've certainly talked to all of the thoracic oncology KOLs based on their experience with other agents and their interactions with the agency. We think what makes most sense is going straight to a phase III, a randomized trial. And so then it's a choice of comparator. You could use physician's choice, though that has complications. I think the probably best choice is the only drug that has a label for this patient population, and that's Afatinib. And we're confident, again, based on the performance of Afatinib in these patient populations, this is all published data, we can beat Afatinib. So as far as accelerated approval, since it is a phase III randomized trial, ultimately, the readout will be a survival endpoint for full approval, PFS or OS.
Is there an opportunity for an interim read? Yes, there is based on response rate, but even more importantly, durability of response. That could be a potential for an interim read that you could file accelerated approval.
Curious on the Afatinib part. It has the label for only three of the mutations.
It is.
Can it still be used as a control arm for this?
Yeah. It's a great question. We think it really has to be because Osimertinib has no label. We don't think the agency can ask us to use Osimertinib as a control since it has no label. It would also be tough for the agency to ask for chemotherapy because it's a relatively low bar for us to clear. We think Afatinib makes the most sense. Ultimately, this will be part of the conversation, and we'll disclose what the comparator arm will be.
Got it. You mentioned that the ORR could be sufficient and even PFS or DOR. How long of a study do you expect to be?
It all depends on how quickly we can enroll it. We want to obviously get this drug to patients as fast as possible. We know they do not have good treatment options currently. That is our goal as a company, to get this drug to as many patients as possible. Our timeline and planning, we think we could be in a position to file for accelerated approval as early as 2029 if those interim reads are positive and full approval in 2030.
Got it. Any changes in the FDA's personnel that you're interacting with for your drug?
We have not seen any.
Okay. So no impacts there.
I know Marty Makary is speaking as I speak, so I'm sure he's being asked that same question.
The other question that I get sometimes is that do you need to show activity in the majority of the mutations to have a broad coverage on the label?
Yeah. It's a great question. There is guidance from the agency on drug development for patients with rare mutations. One thing they stress is that you need to group these mutations in distinct structure-function categories and only then have representative mutations in each of these structure-function groups, and you can be granted a broad label. Fortunately, we have that with non-classical mutations. We have the well-recognized PACC classification that is defined by resistance to Osimertinib. You have the so-called juxta-membrane and ectodomain mutations, and you have the classical-like mutations. We do have these structure-function groups already defined and have begun to have that conversation with the agency.
Got it. You mentioned the NDA filing and launch, and that one is okay. I think I'm clear on that. 1535 is a covalent inhibitor. We still feel questions that now that you have dosed more than 200 patients, are there risks or are you seeing any T790M mutation emerging or any other resistance mutations?
We have not seen T790M emerging in our frontline patients. If you go back and look at the Afatinib data, unlike the first-gen reversible TKIs that went into classical mutation patients, which did give rise to T790M, there was relatively low incidence of T790M in patients receiving Afatinib, non-classical mutation patients receiving Afatinib. We do not expect T790M to be a major mechanism of resistance to patients in the frontline setting. In the second, third-line setting, patients have many different pathways that they use to become resistant, primarily MET.
there any chance that you can address that in your study, or do you have to wait for a new study to potentially combine with the meta-inhibitor?
I think in the recurrent setting, as you know, we're.
Beyond longer.
Yeah. We've deprioritized further development in the recurrent setting for a couple of reasons. One is this large opportunity that we have in the frontline setting. Bigger patient population, longer time on treatment. We are the clear front runners. We want to move quickly to frontline. That's where we can benefit the most patients in the most capital-efficient way. The recurrent setting is a smaller market, shorter time on treatment, and there's significant competition. AMI and chemo is being used there. We believe that Dato-DXd, the ADC from AstraZeneca, will likely be approved in July. Those are two big competitors in the recurrent space. We are the front runners in a larger indication, the frontline space. That's where we're focusing our efforts.
Thinking about the second line, you have 83 patients enrolled. Is there potential that that data could be added to the label at some point without having to run a defined study?
At some point, or you could run an additional small trial to get a compendia listing. Those 83 patients, those data are critical to our filing ultimately in frontline because we were talking about rare mutations. We will likely have patients in the recurrent setting with mutations that we did not capture in the frontline. It is additional data to the agency that, look, this is an actionable mutation. We saw a response in the recurrent setting. Those recurrent data are both supportive to the frontline setting and potentially could be used later for some use in the recurrent setting.
Makes sense. And then coming back to the first line, how are you thinking about the competitive positioning, especially with the ArriVent's Firmonertinib? They have shown some activity in PACC mutations, and then you have the AMI and LAS combo, and then ORIC Pharmaceuticals is also pursuing that space too.
Yeah. So let's talk about Firmonertinib. Furmonertinib is essentially Osimertinib with four atoms difference. It's a third-generation EGFR TKI. At double or triple the dose, it does pick up some activity on a small subset of non-classical mutations. Raising the dose raises the AE profile. We believe you have to have the full spectrum of activity with a drug to be successful because many of these patients have compound mutations. So if you have activity on only one of two mutations that the patient carries, you're not going to have durable responses. If you have AEs that are at a higher level, you can't keep dose intensity. You're not going to have durable responses. Regarding AMI LAS, only approved in the classical mutation setting. We all saw Janssen's numbers from the first quarter. They're getting limited uptake in the frontline setting versus Osimertinib because it carries a heavy AE burden.
It is getting used with chemo, AMI chemo being used in the recurrent setting, which is, again, one of the reasons we're not going there. ORIC's compound is an exon 20 inhibitor, both for EGFR and HER2, and they're focusing mostly in that patient population, the exon 20 patient population, which we do not address or are going after those patients. It's a smaller market. That compound does have some activity on non-classical mutations, but not the full spectrum. It's, again, a repositioning of an exon 20 drug in this case for these non-classical mutations, and we're far ahead of them in development.
Makes sense. Switching gears a bit, you have some follow-up data at ASCO from the phase I IST study showing nice PKPD profile in glioma patients. So that confirms the brain exposure. Maybe talk about the significance of the data and what are the read-throughs to the lung program.
Yeah. It really is the most definitive proof for any EGFR TKI of brain penetrance. It's not just CSF. It's not just the brain. It's non-contrast-enhancing regions of brain tumors. This is where there is limited to no blood flow because it's non-contrast-enhancing, and we're seeing pharmacologically relevant exposures of free drug. Yeah, it has significance in GBM, but also non-small cell. We already know, based on the phase I and phase II data that we've released to date, that we see resist responses in CNS target lesions in lung cancer patients. There is no doubt this is a highly brain penetrant drug.
What are your expectations for the phase II study? That is the IST study ongoing in the GBM, and that is in first line. You have guided to some data in first half 2026.
Yeah. This trial just got started, starting to enroll patients. These are newly diagnosed GBM patients. This is where we ultimately want to take the drug in GBM, which, again, in the newly diagnosed setting where we think we can have the most benefit. It is additional safety data in a frontline patient population because prior study was recurrent. We will also be able to combine the drug with radiation, another important step, a box to check before we could potentially move to pivotal development.
Would that be a company-sponsored registration study if you see a good signal?
TBD.
Okay. I was just curious from a registrational perspective, you could simply run a study versus Temozolomide alone in first line in unmethylated patients. Is that the right way to think about it, or can it be more complicated?
I think it's exactly right and exactly that simple. I mean, you have unmethylated patients who have no therapy. Half of them are going to have an EGFR mutation. You can use Temozolomide essentially as a placebo and go randomize versus that, go right to a phase III.
Got it. Anything on the BD side? You also have an FGFR 2/3 asset that's been waiting. Anything that we should be looking out for this year?
No. We're always looking for potential partners. So that asset is available. We just finished our last preclinical study there. It's a development candidate stage. And we do have certainly the partnership with Servier, which is that transition's going really well.
To wrap up, what is your cash position, runway assumptions, and then anything that investors should look forward to in the next 6- 12 months?
Sure. So we ended the first quarter with $152.4 million. We're 21 people. We are an extremely low cash burn biotech company. That burn will go up as we begin pivotal development. However, that assumption of a higher burn is baked into our cash guidance of cash till the end of 2027, again, because we're such a lean organization. It does not assume any milestones from Servier. And remind you that in addition to the $70 million that we've received, that partnership has an opportunity for us to receive $710 million in milestones, development, regulatory, and commercial. So that assumption of runway till the end of 2027 does not assume any milestones from Servier. So it's a conservative estimate. As far as what investors should look for, I think all eyes are on the frontline data, and we look forward to presenting them later this year.
Great. This has been a great conversation. Thank you, Mark.
Thank you, Farzin. Appreciate it. Great being here.