Hey, everyone. Good morning, and welcome to day 2 of the 2024 Bank of America Healthcare Conference. Thanks for joining this session with Perspective Therapeutics. My name is Alec Stranahan. I'm Vice President and Senior Biotech Analyst here at B of A, and I'm pleased to be joined by Thijs Spoor, Chief Executive Officer of Perspective Therapeutics. Thanks for being here, Thijs.
No, thanks, Alex. I really appreciate the invite and the chance to tell our story. We love what we do, we love the transformations we're making for patients, and we're happy to answer any questions you may have.
Perfect. Definitely a topical time to be running a radiotherapy company. So I've got a bunch of questions here, but there's also an opportunity for those in the audience. If you do have questions, just raise your hand, and someone will be around with a microphone. But Thijs, maybe we can just jump right in. You know, for those in the audience that might be less familiar with Perspective Therapeutics, could you maybe, you know, provide a brief overview of the company and the history, and how Perspective came about?
Sure. So the company came about as a merger between Viewpoint and Isoray. Isoray is a legacy brachytherapy company, been publicly traded since the early 2000s, focusing on cesium-131 as the best isotope to treat tumors from the inside out. Viewpoint was a spin-out from the University of Iowa and really focusing on the best possible isotope to initially start to look at pediatric neuroendocrine programs. And by innovating and finding the best drug for pediatrics, it actually ended up being a really interesting platform for adults as well. The Viewpoint company historically was funded through grant work. We've raised about $20 million cumulatively in grants. The most recent from the NCI is really looking at a big focus on combination therapy between radiopharmas and some of the checkpoint inhibitors.
A year and a half ago, we were approached by a banker saying, "I've got a company with growth and no cash and a company with cash and no growth. Let's merge them together." So we, we did that. It was very successful, and we got the best of all worlds. We have existing infrastructure. We've since then actually divested the brachytherapy commercial unit, but been able to retain a lot of the talent that's been focusing on innovation in the radioactive space.
Great. And I guess, you know, at a high level, maybe you could just walk us through your platform, your approach to radiotherapy and how you're maybe differentiated?
Sure. So what we like to do is target cancer from the inside out. So that's an easy thing to think about, but what does that really mean? We've taken the alternative approach of saying: What's the best possible isotope? In theory, we're isotope agnostic, but we have the one that we really, really like. And so if you look at the Segrè chart of all the kind of elements and where they go through, one of our founders said, "What's the best possible isotope on an alpha therapeutic?" You know, betas were doing okay for therapies. Alphas are doing much better, and so you get that much more potent impact onto a tumor if you hit with an alpha. You don't want the half-life being too long, and so you actually end up interfering with the tumor microenvironment, having patient dosimetry issues, having toxicity issues.
You don't want it too short, so that you actually can't ever actually make the product and, and make it commercially feasible. What was really interesting about lead-212 is that you actually have this complementary pair of lead-203, and lead-203 is elementally identical. The same element, 203 or 212, you want to put into a molecule. While the identical biodistribution, you can do perfectly predictive dosimetry, you can do perfectly predictive analytics in your pharmacokinetics, your, your dosing, and then that, that allows you then to really screen your patients well in advance. And so we know before we even dose a patient, what the expected biodistribution is going to be, and you don't get that with other sort of metal pairs.
The other advantage of or the disadvantage of lead at that point was that there wasn't a good chelator or generator available, and so our founders invented them. And so we have our own proprietary generator system, we have our own proprietary chelators to help bring the metal to the tumor, and that really is leading, we think, to differentiated results.
Great. You currently have two assets in clinical development, three in late preclinical development. Could you maybe give us a sense of the scope of the diseases that could be addressed by your technology?
Yeah. And it's... I'll paraphrase what one of the major pharmas in the radioactive space said at the World Theranostics Conference a few weeks ago, which is that with Lutathera and Pluvicto, only 7% of tumors are being addressed right now in the radiopharma space that could be. Basically, any surface marker that shows up on a tumor that does not show up on healthy tissue is a wonderful target for us. And so the trick is, with oncology, is finding what cells are going to have what surface markers, what do we go after? The field is a little crowded with SSTR2 and PSMA. They were easy targets out of the gate because there's been a long body of evidence in nuclear medicine to image these.
Mm-hmm.
If you can image it, you can treat it. So we tell all of our clinics—all of our investigators, you know, "See what you treat, treat what you see." And so this legacy there was interesting. We've innovated past that into a melanoma program in terms of where we saw a really clear unmet medical need. We've actually gone into a really interesting FAP program as well, which also has a lot of interesting characteristics for later-stage diseases. And so it's really—there's a huge wealth of targets. The interesting for us, too, is that what pharma considers an undruggable target is really interesting for us. Undruggable usually means that it expresses on the surface, but it doesn't internalize. There's no way to get the payload out there. It doesn't do anything. There's no derivative action. That's perfect for us.
If we have something that expresses on a tumor and doesn't do anything, perfect. It's like a mine hitting a ship. We can kind of bind to it and then release the payload right on the surface of the tumor and destroy it.
Right. A little bit different approach. You don't actually need to have the therapy through what the target that you're binding to, right? That's just the glue, essentially.
Yeah, it and it really is just the glue. When I hired our Chief Medical Officer from Seagen, Bayer, and Merck, and I said to him when he was joining, I said, "These are like ADCs?" except they actually work. He's like: "Well, that's a strong statement." I said, "Well-
Coming from Seagen.
Coming from Seagen, and if you look at this Form 4, he's been buying our stock in the open market as well. But he gets it because then, and it really shouldn't be a discussion like, is it ADCs versus the radiopharm space? At the end of the day, we're all trying to bind to a target, and then what happens next? The luxury of our payload is that it doesn't need to internalize or dissociate or have any other derivative impact. The payload comes as soon as you bound it.
Okay, great. And, you know, I think one benefit that we've talked about is the fact that you can get pretty early on target data from imaging, right? You've got, you know, clinical data that's already been accrued. Is that one piece that you're looking at, and what other clinical data would you highlight to date?
So there's a massive de-risking event each step we go through. So imaging an animal is pretty de-risking. We can actually iterate through pretty carefully different alternative candidates for the same target. At our analyst day two months ago, we showed some really interesting iteration of animal images of FAP as an example, to really show how you can really improve your tumor binding and really decrease your sort of kidney adhesion. When you actually go and actually treat an animal, that helps one step further, but there's a major, major de-risking of actually getting a human image with your diagnostic agent, especially with the same composition matter. You can perfectly predict just about all of your toxicities with the exception of bone marrow, because bone marrow is so sensitive.
But almost all of your other toxicities can be predicted by looking at your images. You know exactly what the in vivo fate of every single molecule is going to be, and therefore, over a pretty tight window of time, especially with lead, you've got a 24-hour window where 80% of your alphas are delivered. And so you can kinda tell from a, from a human image, where is the- where is the payload gonna go, where is it not gonna go, and therefore, what do you really need to focus on?
Great. So how... You know, you've got a cadence of clinical updates planned over the next 6-12 months. How does that sort of build upon the foundation of data that you've accrued to date for your clinical assets?
So, program by program, probably the easiest one to understand is the first one that came out, which is on our melanoma. And so this MC1R target is expressed in 50% of melanomas. You know, melanoma is a very heterogeneous tumor. We can tell in advance if a patient screens positive, that they're suitable for therapy, and if they screen negative, then the therapy probably won't work. So it's a great filter. That program is going through dose escalation, and we expect in the second half of this year to have some of the results coming out for that dose escalation, and this is in a controlled company-sponsored study, Phase 1, looking at increasing doses.
Following on from there, we do expect to do a protocol amendment and then get into a combination approach in melanoma, which we think is very valuable for clinicians. When we go back to our SSTR2 program, we're also doing dose escalation in that one. We also expect results out in the second half of this year with our sponsored study. But then you've got a lot of other settings where it's being used. So in the SSTR2 program, our own study is in first line, so as an alternative to Lutathera. There are investigator-initiated trials in the U.S. and overseas looking at the post-Lutathera second line setting that we don't have line of sight on, but they're being initiated along the way. And then there's also compassionate use data that's gonna be coming out next month in an all-comers environment in both first line and second line.
So really understanding what is first line, so instead of Lutathera, what's second line, and then thinking about all the areas where that can get used. We're also filing INDs on our other programs in FAP.
Okay, great. Maybe just drilling down on the frontline study, would that be head-to-head against Lutathera? And what is sort of the efficacy bar that we should be looking at?
So the FDA hasn't given us clear guidance yet on what to do. What they have said publicly to any innovator is that if you have eye-popping data, then they're happy to have a discussion. What does eye-popping mean? So we look at the Lutathera package insert, and that says there's a 13% ORR. We think we'll be well above that, and so depending on how far above that we are, I think the more compelling a conversation it is to have with the agency to really think through a next step.
Mm.
It's highly unlikely that if we're showing 40% or 50% compared to a PI of 13%, that we'd have to do a head-to-head. If we look at this patient demographic, these are patients with really long-lived secretory tumors, and so they're taking this octreotide for quite a period of time to manage their symptoms. At some point then, they're gonna add on to there. I think the ORR rate of that is about 3%. So you're managing symptoms with a drug that's not really designed to cure. At some point, as the tumors are getting more and more invasive, aggressive, the symptoms are progressing, the patient's seeking a treatment. So can you actually kill the tumor versus just treating symptoms alone?
In that case, in the first line setting, our preclinical data shown that rather than being tumor- static and basically kind of immobilizing the tumor, which is what a beta seems to do, we can actually ablate the tumor. I think given the choice between completely destroying the tumor versus just sort of letting it stall out for a bit, we think that patients are better served considering an option to just be able to destroy the tumor completely.
Okay. And I wanna talk about, you know, some of your assets more specifically. So you mentioned the melanoma asset as being sort of differentiated in terms of, the target, which is MC1R. How was this sort of discovered? Was this sort of an internal, discovery process, and what makes this target so attractive?
... So one of the things I wanna make sure we highlight is how strong our in-house development team is. You know, I think people talk about, you know, how did the Beatles get so good? You know, they practiced 10,000 hours together and had this great rhythm. We've had a phenomenal team of graduate students that became employees that have been working together for 10-15 years, that work really, really well together. We do all of our own internal discovery work. We do our own animal studies in-house. We do a lot of iterations. We make our competitors' products. We do head-to-head comparisons, everything we do real time.
You know, when we actually looked at this MC1R, our target, we thought it seemed really, really interesting as being truly differentiated, only expressing in some tumors, and therefore, and not internalizing. So that made a pretty clear path to how could we actually kind of start to look at it as a screening tool versus a therapeutic. The animal data looked great, and then as we've been evolving, we've learned that for a heterogeneous tumor, there's a lot more benefit probably from doing combinational approaches as well.
Some of the data we've shown have shown incredibly durable responses in a melanoma model, even to the degree that we're getting, you know, 45% complete response rate in mouse—in human melanoma in the mouse, to the degree that 75% of those complete responders, we could never regrow the tumor. And so upon re-challenge with the tumor, the fact it could never regrow inside these mice, it shows that there's something going on with the immune system, priming the immune system, and actually kinda driving things through.
Okay. So in terms of combos, we're thinking about, you know, maybe pembro, nivo.
There's a lot of combos that are available. We've actually disclosed, actually, a really interesting collaboration with Bristol Myers Squibb, and so they're supplying Opdivo for our clinical trial. Coming up, we expect to file a protocol amendment to add in nivolumab then into, into this, melanoma program as well. The advantage here is that an alpha or a beta should be neoantigenic, but the difference between the degree of that is extraordinary. So betas are fairly low energy. You need about 1,500 to kind of, you know, to kill a tumor. The alphas are so destructive in their potential. A single alpha hitting a cancer cell should kill it, and it's such a neoantigenic, environment that gets created, that it really does bolster what, any of the other, sort of IO therapies can do.
Right. You're just releasing all the cellular contents.
In a very short period of time, right? So you really get this release, you get something that the system can grab on to. We've published data on the animals that show an absolutely amazing impact from having this in a variety of different, sort of combinations.
Okay. And obviously, that's what you want. You wanna kill as much tumor as you can, but there's also a safety component to reducing the tumor too quickly, CRS, et cetera. Are there any specific AEs that we should be looking out for from your asset? And, you know, maybe following up on that, are those AEs overlapping at all with, say, an Opdivo?
So we look at this all very, very carefully. With the monotherapy approaches, most of your AEs, you can predict off your human scans. The only one you can't really predict is bone marrow tox, and that's why any radiopharm developer tries to do fractionated doses and really kind of have time in between doses that's reasonable to allow the system to recover. We did disclose the safety profile in March from both programs for patients to date. It really felt that in this patient population, they're incredibly minor. We always wanna be really careful as to what happens in combination, and we look at everything to see and make sure that nothing is extraordinary that's showing up. We don't expect you know, anything major from the alpha particles themselves.
They're either accumulating on the tumor or they're being eliminated by the kidneys. But we do watch this pretty carefully.
Okay. And I guess to date, and I think you've sort of touched on this already, but in terms of the preclinical observations that you've seen, how translatable have those been to what you've seen in the clinic? Thinking more to your early or, like, late preclinical stage-
Mm-hmm.
assets that could be entering the clinic.
So we've published some really interesting data on that, on that translation from our mouse to human, especially with the SSTR2 target. And we did head-to-head work against Lutathera, we did it against other constructs using actinium, using lead, and showed that we actually were able to get complete responses, you know, 100% complete responses in the mouse model. The limit of that model gets stretched, though, because these are tumors that can only have been grown for several days, weeks kind of thing.
Mm-hmm.
Whereas in humans, these tumors are growing for years. So you do wanna, you know, you push the limits for how you can actually extrapolate. You can actually infer a lot of safety as you go through. But as I tell my family members in explaining, you know, going from animals to humans, you know, the comment is, well, if chocolate was the best drug ever, right, you'd stop at the dog study. So you can't. There's only so far you can actually push the limit of this model to really identify the difference between a mouse response and a human response.
But we are seeing in the compassionate use environment, what we do learn from our images, is that for the most part, this is very translatable, because as we scale up, we get very similar biodistribution patterns between tumor and kidney. The kidney clearance effects tend to translate pretty well. The ability to reduce the charge on the molecule, it's one of the things that we focus on, is really having a net zero charge of our chelator. And, and from first principles, the kidneys love picking up a charged protein fragment. And so if we can make a zero charge chelator, we actually reduce the kidney uptake and increase kidney clearance. So all these things add together to do, you know, really, what's the best drug in a human, and how can we de-risk it going between those models?
Okay, okay. And obviously, there's well-established models for clearance of radiopharmaceuticals in mice, right?
There are, and the nice thing about the imaging study is that you can see it real time.
Mm-hmm.
So you're not trying to only do a urinalysis to figure out what's happened. You can put the animal under a scanner and watch the drug go through the kidneys and dump out in the bladder, and you can literally watch real-time PKPD and see exactly what's happening, what is your clearance rate, what is your retention rate? And from there, you can infer your dosimetry. So one of the big foci now is really doing predictive dosimetry in patients. I think in Sweden, they've now mandated that any theranostic product that's going to be given has to have dosimetry data, and you have to do that predictive scan.
Mm-hmm.
The nice thing about our healthcare system is that we do reimburse innovation, and it is reimbursed to actually do a pre-injection dose to get your scan, to qualify for your patient. There's also predicate data we learned from our brachytherapy business to actually get reimbursement in a post-dose administration, post-dosimetry. So after you've given the dose, the nice thing with Lead-212 is extraordinary innovation that's come out, you can image a patient with that therapeutic on board.
Mm-hmm.
So Lead-212 can be imaged, and there's been recent publications showing that, which means you can do absolute dosimetry. So not saying, where do we hope the drug will go? Literally, where is the drug right now? And that lets you calculate what is your kidney dose, what is your bladder dose, what is your any organ of interest.
Very interesting. I want to switch gears a little bit. Obviously, a big piece of this is logistics, and so, you know, in terms of supplying material for clinical studies, the timing between, you know, the decay of the radioisotope, et cetera, et cetera. I guess what are your current capabilities in supplying materials for your ongoing trials? Maybe walk us through, you know, sort of where your capabilities stand today and how you're sort of scaling for the future.
So right now, we have a manufacturing site in Iowa, where our discovery team is based, and we can service by ground and by air a lot of sites in the Midwest. Our initial sites that we have on board are in Wisconsin, Nebraska, Iowa, Missouri, Chicago, Kentucky, so all sites that we can hit by ground pretty easily from that site. We've just acquired a facility in Somerset, New Jersey, that can handle effectively the whole Northeast. And so it's kind of getting product to patients during the trials. By air, we can cover the whole country at this point, but we're really kind of focusing on those initial sites that are close to our production hub.
Mm-hmm.
These products require daily production. They kind of last all day, but only the day, and so you just wanna make sure your logistics work. But what I think one of the most common misperceptions by the street is, you know, what is a short half-life? And so the 10-hour half-life of our product is actually pretty reasonable. Whenever someone thinks about a PET scan, you know, what that usually means is that's F-18 labeled FDG. And if you challenge most people, what's the half-life of fluorine-18-
Mm-hmm.
You'll get some blank looks, but it really is, it's a two-hour half-life.
Mm-hmm.
And so, you know, 2 hours is a pretty decent window to actually have 100 sites across the U.S., GMP, that make fluorine-18 labeled drugs and can deliver it for same-day usage. So the whole nuclear medicine supply chain is geared around a 2-hour half-life drug. There's a whole supply chain geared around the 6-hour half-life drug using technetium for any heart scan, brain scan, bone scan. So going to a 10-hour half-life product is really not that extraordinary for us. Our team has a lot of experience with it. They know what to do and how to bring things out.
Mm-hmm. Okay, great. And I guess, you know, when you think about a commercial scale launch, how many facilities would you want in the U.S. manufacturing this? And, you know, if you were to expand ex-U.S., let's say, do you think it would make sense just to leverage infrastructure that's already in place through, like, a collaboration or a partnership?
There's a lot of places that can make our products and a lot that are learning how to scale up. And so if we think through any one of our facilities to produce our product, it's gonna cost between $20 million-$25 million. So that's not a lot of CapEx, given-
Mm-hmm
... what this market looks like compared to other industries like cell therapy or some of these other systems. Because our isotope gets delivered through an alternate mechanism, we don't need a cyclotron, we don't need a lot of the major infrastructure. It's really clean room, and lead shielding and hot cells. So for us to get, you know, to do our clinical trials, four or five sites is pretty reasonable for the U.S. We're actually doing all the early Phase 1, 2 with one site. At full scale launch, depending on how commercially viable the products are, you can cover the U.S. with between eight and twelve facilities.
If we look at the FDG market, the Pylarify market through Lantheus, they have 50 manufacturing sites with just a lot of really, really kind of, overlapping zones of delivery and, and a robust supply chain. If we look at other countries, like, or other regions, Europe or Asia, there's always gonna have to be a local manufacturing partner that's on the ground, has a facility, can make it for the just-in-time daily delivery. If we own those sites or partner, it really then just becomes math.
Okay. And that could actually build out a moat for you guys as well.
Correct.
Yeah.
Yeah.
Okay, I wanna actually get your thoughts, you know, on, on the radiopharmaceutical industry as a whole, sort of the direction that things are going. Maybe just to start, what would you consider to be, you know, key enabling innovations in the space, in maybe the past five years, and, you know, how are you guys driving innovation forward through your platform? What's the patentability?
Mm-hmm.
You know, how can this be an additional moat for your franchise?
So if, if you'll forgive me, I'll rewind the clock 40 years and say, you know, what where does the growth really come in the space? You had a 20-year window where it was all cardiac, and that had a huge increase of procedures, you know, from sort of 3 or 4 million a year up to now, you know, 15 million a year. The next wave of innovation was thought to be neuro, but without treatments that related to it, it didn't make sense. Cardiac benefit from the fact that you can do stenting, you can then put a patient on statins. A lot of, you know, things that could happen to the patient if you diagnosed it properly on the imaging side, and which is what nuclear medicine initially started at.
The oncology wave has come from not just interesting images, but actually looking at, at therapeutics that could make a difference. And so the fact that you can perfectly predict if a patient will respond or not is a huge plus. You had about 20 years of imaging data in the SSTR2 space and about the same in PSMA. That really led people to kind of dip their toe in the water with lutetium and start to, you know, at a very, kind of, a lower risk way, start dosing with betas. And alphas were always kind of theoretical, like, what could you do? Would it be more potent? Would it work? The big innovation now is actually allowing for chelators and deployment of technology and scale that actually is allowing sites to access these isotopes.
You know, the Department of Energy, you know, you know, 2, 3 years ago, would supply Lead-212, but only on the third Tuesday of every month, right? And so it's pretty hard to actually get access. Now, you have commitments from the DOE and from industry to supply a lot more of the therapeutic isotopes. There's a commitment to supply more of the diagnostic isotopes. You've got people like us investing in novel chelators and ultra technologies, and actually, your new scanner technology is increasing, too. Your resolution from your CZT systems is getting to where you can actually do incredibly high-res images, whole-body images, very, very quickly, so that patients can be determined in advance, will they or will they not be suitable for therapy? A new diagnostic on its own isn't that exciting. It's the so what question. The so what is can you treat them?
Mm-hmm.
That's where the innovation is driving.
Okay. And you mentioned, you know, earlier on in our discussion, you know, the ability for radiopharmaceuticals and ADCs to sort of coexist. You know, I guess at a high level, where do you see radiopharmaceuticals as a platform fitting into the existing, you know, cancer treatment paradigm and, you know, sort of where the field's going?
So I think you're always gonna get radiation as an effective tool against cancer. External beam has major limitations, in my opinion, because you're going through so much healthy tissue to eventually irradiate the tumor you're trying to get. So anything you can do to really put the radiation source against the tumor, the better off you are. If it's only one tumor, brachytherapy is interesting, but what's more compelling, especially for micrometastatic disease, is if you can actually inject something that's going to every single tumor site all at once and hitting them all sort of internally as you move forward. I think that's gonna make a big difference in terms of how you actually treat these patients and how you get your payload there. There are some other innovations that I think are just as disruptive.
We actually looked at something using pre-targeting, and in pre-targeting, you have the ability to actually, we can take an antibody that's already established. You know, antibodies, if you inject them, will take about three days to accumulate on the tumor, and that's not good for our therapeutic window of our drug. But what we figured out is we can actually then target the antibodies on the tumors. So inject an antibody without anything radioactive on it, it'll accumulate at the tumor site, and this can be an ADC as well or a bispecific or any of these sort of, you know, really interesting targeting mechanisms. Then we can actually inject a peptide that only targets the antibody or the ADC.
Hmm.
You use the best of both worlds, the incredible specificity of an ADC construct with the immediate payload of Lead-212.
Oh, interesting. So it's like a radioligand targeted to the ADC or something?
Exactly. Yeah.
Okay.
And so with a minor modification, you can make any existing antibody that either is commercially viable or even one that's, like, failed, meaning it had a ton of safety data and but no efficacy. We can turn either one of those then into a really interesting, you know, radiopharmaceutical.
Oh, interesting. Maybe shifting to your financials, I think you guys reported 1Q today or yesterday. What is your current cash position, and, you know, how do you sort of see your capital allocation priorities over the next, you know, 12-18 months?
Yeah. So the Q will be filed later today. We press released this morning. You can see the walk-through there, that the first quarter's been very busy, and also with reverse inquiries into our ATM. So you can back into our cash balance of being over $200 million at this point. Our monthly burn right now is just around $4 million. We do expect to get busier at the end of the year as we actually do more clinical trials and as we look to roll out some of our own manufacturing sites. And so we've guided towards a cash runway into 2026. So we feel we have a lot of resources available to us, but we have a lot of targets available as well.
And so we're really excited to kind of be able to deploy capital efficiently into novel programs and into infrastructure.
Okay. And maybe... You know, we've got one more minute left. Maybe just to wrap everything up, you know, what, what are you guys most excited about, in terms of data flow or catalysts, in the second half of this year? What do you think investors will be most interested in?
So I think investors are first gonna look at next month at the Society of Nuclear Medicine meeting, where there'll be some data under compassionate use of our SSTR2 program in an all-comers environment, both pre- and post-Lutathera. We know from our, both of our Phase I dose escalation trials, one in melanoma with one drug, with a different drug in SSTR2, we expect to release data on, on safety and efficacy in the first two cohorts, of that. And then we also look to start, enrolling patients into our combination study in melanoma, and that will then start reporting out probably in the first half of next year.
Okay, great. Well, unfortunately, I think that's all the time we have, so we'll have to leave it there. But thanks, Thijs, for joining the conference, and looking forward to following the updates over this year.
Great. Thanks, Alec, for having us.