Thanks everyone for joining this session with Perspective Therapeutics. My name is Alec Stranahan. I'm Senior Biotech Analyst at Bank of America , covering Perspective, and I'm pleased to be joined today by Joel Sendek, Chief Financial Officer of Perspective. Thanks for being here, Joel.
Thanks a lot, Alec. We really appreciate being invited to the conference. It's been a great day.
Yeah. Great. Great to hear it. We've got, you know, 30 minutes here for our fireside. Maybe we can, you know, start just at a high level. Perspective is today one of the only vertically integrated targeted alpha therapy companies. You're developing RLTs for a variety of indications. I guess when you think about the moat that you're building around your technology and your clinical programs, where are the biggest sort of differentiation points, either on the tech side or in terms of your clinical assets, just to set the stage?
Sure thing. You said we only had 30 minutes. I mean, I think we're gonna take 40 minutes on that question alone. No, it's at a very high level, I think we're, as you said, one of the only vertically integrated radiopharmaceutical companies our size right now. I certainly can't take credit for it. I've only been at the company nine months, but a lot of this is vision that's been executed over the last couple of years. It's only now coalescing in a way that enables us to really approach the next level in the immediate future. The reason is if you just look at our clinical profile, we have three compounds in clinical development right now for large indications and a fourth that we just announced at our Investor Day.
That's, you know, by the end of the year, in a year's time or so, four clinical programs, one of which, VMT-α-NET could be in a registration trial within a year. I think that alone is really a major accomplishment in large markets. Number two, if you look at radiopharmaceutical specifically, a lot of investors are concerned about the supply chain, the distribution, and we've put as much effort and energy into figuring that out as almost as we have on the clinical programs that we have. Right now we have, we produce product out of two different sites, and we're expanding that to a state-of-the-art brand-new facility in Chicago that we should, we anticipate will be online also within a year. That's distribution on supply.
We have agreements that will enable us to have supply over the next couple of years, certainly through our registration trial. On top of all that, we have an IP position on the individual technologies that we use, the compounds that we're developing, and if you tie it all up, we don't see another company in our space, certainly in our valuation, that's quite as attractive.
That's great. I guess at this point, you've dosed over 100 patients across your clinical programs, as of your investor day a couple weeks ago, which I think just speaks to the manufacturing capabilities that you've built out in-house. Cash position provides runway into late 2027. I guess, how are you sort of thinking about the sequencing of capital deployment across your thre main programs, VMT-α-NET, VMT01, and the FAP program? You know, what is sort of the single most value-creating milestone in your view between now and, say, the next financing event?
Yeah, sure. Yeah, I'm glad you brought that up because we're really proud of the work that we've done in order to get these drugs to this level. We have multiple value-creating events. Thanks to you guys, we have had tons of really good one-on-one meetings today. Naturally, maybe there was a hedge fund or two that asked about the next upcoming milestone. Could be, if my memory serves me correct.
A couple.
Yeah. The short answer to that is we're building for the long term by putting all these pieces in place in order to extract significant value for investors and bring new, effective therapies to patients. That's critically important. I would say if you wanted to pin me down and say one particular event this year that most investors I think are looking toward, it's the knowledge about how we're going to take VMT-α-NET from the current clinical setting into a pivotal trial. What does that design look like? How long will it be? When will it start? What can we do in that trial to ensure we'll have a successful outcome, both for investors in a pivotal trial, as well as the patients that can benefit from VMT-α-NET?
We don't know. Don't ask me the answer to that because we don't know it right now.
Yeah.
That's certainly something that we hope to sort out between now and the end of the year or early next year. I mean, along the way, there are other, really other important milestones embedded in there, like data from cohort 2 in the VMT-αNET study. Certainly cohort 3, cohort 4 probably just started, so I don't know how much data we're gonna have there. And that's just on our lead compound, VMT-αNET. We also have the melanoma program, VMT-01, and 359, our FAP targeting agent that we are indicating to investors that we could have data there by the end of the year as well on both of those programs. The final thing is, like I mentioned before, is this distribution facility that we're building out in Chicago.
We'd love to be able to get to the point where that facility is able to be, you know, shown to the outside world with some tours or something like that, but nothing to commit there yet right now.
Okay, great. Maybe we can start with VMT-α-NET. I think this is, you know, reasonably so, this is where the majority of your investor day a couple weeks ago was spent, just given the amount of data that we have from the program and sort of the cadence of updates we're looking forward to. You know, I'd say you've been deliberately thoughtful about the regulatory strategy. I think it makes sense. Maybe you can just describe the approach to the dose escalation, sort of what your levels of comfort are between cohort 1, cohort 2, now you have cohort 3, and now also cohort 4. And sort of, you know, if there's any directional insights you're getting in terms of sort of the right staging post PRRT or before.
Yeah.
Good. Why don't I kind of describe for all those that aren't familiar what each cohort does. Effectively we're doing, for cohort 1, 2, and then to 3 or 4, we're doing dose escalation. Right now we're in cohort. The, the big cohort, is cohort 2. It's 46 patients. It's 5 mCi dosage times four, so four cycles, so total exposure of 20 mCi. We've reported on the first 23 of those 46 patients on efficacy. We've reported on all 46 every time we report at a medical meeting as far as the safety is concerned. Of those first 23 patients, if you look at it on an intent to treat basis or overall response rate, we're at 43%. That's 10 out of 23.
I can do that even without a calculator, because I've said it like 5,000 times over the past couple of months. I'm not that good at math. If you look at it on a, if you just look at for SSTR2- positive patients, which is a subset that some people look at and some of our competitors look at it that way, our response rate's even higher. It's about 50%. If you stop right there, given the fact that the drug that's comparable in a comparable market, which is neuroendocrine tumors with a lutetium-based drug, that's Novartis' Lutathera, the on-label response rate's 13%.
As we look at it internally and talking to KOLs who advise us, we are convinced that that dose right there, if we stop right there, would be suitable for registration, suitable for a phase III trial, if it works, registration and on the market and providing benefit to patients. The interesting thing is when we've disclosed all this data, including the safety profile, our safety profile is really, really good. We, if we look at in particular the renal, kidney, potential kidney tox, and we're not seeing that of any significant degree. We're looking at dysphagia, which has occurred in some competitive compounds. We're not seeing that at all. Certainly no grade 4 or grade 5 tox. That's enabling us to do some more investigation. You mentioned cohort 3 and cohort 4.
For people that don't know, cohort 3 is a higher dose, a 20% higher dose. We use 6 mCi times four for a total of 24 mCi in that setting. We haven't announced any data on that, but that could be something that comes out later in the year. What we're looking for is maybe we can get to a response rate that's even higher than that 43%-50%, coupled with the safety profile that we would hope would remain benign. Simultaneous with that, we're also going to cohort 4. There's been some misinterpretation that maybe we're only going to cohort 4 after cohort 3, having seen something in cohort 3, because cohort 4 is actually back down to the 20 mCi cumulative dose.
Cumulative.
Yeah. It's, but it's not really a de-escalation from the cohort 3. It's another segue from cohort 2 with the same amount of cumulative radiation, but done in a front-loaded way, where you start with 6 mCi, then two fives , and then a four. The thinking behind that is for a PRRT-naive patient, they, we think, will likely be more able to accommodate in their tumor more radiation sooner. We can hit it harder, maybe achieve a higher response rate, and get better kidney clearance at the front end before the kidney has seen any radiation at all. That's the thinking, where you put an extra millicurie in the first dose and one less millicurie in the last dose. Obviously, just opened the study, have no data to talk about there.
The beauty of this would be when we talk to the FDA, we can discuss not only the really good efficacy and safety data that we have from cohort 2, but how we can incorporate the findings from cohort 3 and cohort 4 into a potential registration plan.
Okay. The thinking around that cohort 4 higher upfront dose is that the very first dose of radiation that a patient sees is typically the most efficacious, right? The safety actually comes from the cumulative exposure. You're maintaining that total cumulative exposure, but yeah, just front loading the efficacy piece. There, like I'm sure it's because you feel confident in cohort 2 that you can explore, you know, before you commit fully to the pivotal, these different, regimens.
Yeah, that's exactly the point. I mean, the only downside to all of this is we'd like to experiment for the next 10 years on dosing iterations, and obviously we have limited capital. You talked before about the $271 million that we have in cash right now. We're very fortunate having done a nice financing earlier in the year to be in that position. On the other side, as the CFO, obviously we need to be, or I personally want to be as good of a steward of capital for investors as we possibly can be. We will have to make some decisions in the absence of, you know, full knowledge.
The beauty of our relationship with the FDA right now is it's a very collaborative one. You know, we're not looking to gain alignment from different sides of the table, we're looking to collaborate to come up with a plan that makes sense for all parties, including not only the regulators and us, but the patients. As an example of that, when we originally embarked on the phase I/II study we're in now, we asked whether we can start out in a post-Lutathera setting, and we ended up in a pre-Lutathera setting with the FDA's blessing. That's an example that I think will translate well into the upcoming discussions that we're going to have.
Okay. I guess when you think, like, to that point on the pre or post-Lutathera, what's sort of the decision set within that? Is it, you know, maintenance of the SSTR2, the target expression? Is it the, you know, the cumulative irradiation of the kidney? Is it the efficacy bar that you're expecting? Is it the study design head-to-head? Like, there's just a lot of things to think about.
Yeah.
What are sort of the priority within that?
Well, a couple of things I'll mention there, we think the biggest market is the pre-Lutathera, not necessarily frontline, but PRRT-naive patients. That's where the biggest market is. That's where Lutathera is obviously right now, and that's, I think, gonna be our main thrust. Obviously, if we can come to a decision that enables us to get some sort of accelerated approval, we'll explore that. That's just something to talk about that we can't commit to certainly right now. That's the biggest market. When you talk about post-Lutathera, we really haven't investigated that too much. As you correctly point out, there was an investigator who mentioned that we had at our investor analyst day who mentioned some success in that setting.
One of the beauties of that is maybe one of the things we haven't talked about yet is our whole theranostic approach. That's integral into how we develop these drugs, because we have a elemental twin to lead, 'cause lead-203 is our imaging isotope. What this enables us to do is to dose the drug or the imaging agent in a way where we can see whether it goes to the tumor, where it can have a therapeutic effect and how much also goes to the other tissue, such as the kidney, where it can have safety implications.
If you do that in a post-Lutathera setting where patients have already received a radiopharmaceutical, you can get comfort that you can safely dose a therapeutic version of the theranostic of the imaging agent. In the absence of that, it would be very difficult to explore the post-Lutathera setting. That's a way where we can get comfort in capturing that market too, which wouldn't be our primary market, but certainly not a market that we would want to not consider.
Okay. Okay. Maybe last one on α-NET , then we can talk about the other assets in the pipeline. One question that we get asked is kind of the bar for success or, like, which competitor compounds do you compare VMT-α-NET to? There's a few, and there's been, you know, changing in the landscape. Obviously, Lutathera's kinda always been there, a standard of care in the background. There's two studies, NETTER-1 and NETTER-2 for Lutathera.
Yeah.
There's just a little bit confusion still on what's the best, like, comparator study. I don't know if you've been asked that in your meetings or if you have any thoughts on which Lutathera study.
Yeah, we just spent 30 minutes in our last one-on-one talking almost only about that. That's why I was almost a little bit late here because the conversation went on into the elevator, down the hallway, and all the way along here until we had to, you know, talk about this. You know, that's kind of an exaggeration. Yeah, there are a lot of ways to compare these things. I think just to put it in its most simple terms, look at the Lutathera label. They have a 13% response rate there.
You know, we're talking about a 43% - 50% response rate. I mean, that's a vast difference. You can cut that in different ways and say, "Well, the patient population isn't exactly the same. This subset's a little bit sicker. This subset is a little bit further on in its progression. This is a subset that tends to have higher responses." You know, you add all that, you mix all that in, and maybe they get a little bit narrower. Still, we're certainly showing a vast difference in our compound versus the standard of care. That's an on-market drug with a serving a market today, that's close to a billion-dollar run rate.
You know, that's a big market where we're looking like comparing across trials, we're as good or maybe a lot better.
That's on response rate. If you wanna look at PFS, we don't have that data. We're hopeful that we would look better there too. There are other drugs that are being developed, one by a competitor that presented data at ESMO that had a 60% response rate. That you could say comparing across trials would be better than our drug than the VMT-α-NET. We would argue that it's in the same range, given wide error bars and relatively small studies. What differentiates that drug, experimental drug to our experimental drug is the safety profile. You know, that drives back maybe to one of your early questions about the overall thrust of the company. We didn't in-license these drugs.
We didn't get lucky and stumble upon a drug that kinda happened to work. All the constructs were made with a specific intention in mind, and one of the key elements of it is the chelator that we use that has two main impacts on the safety profile of the compound. The first is it yields a net neutral charge. The chelators that are used with other compounds tend to be either positive or negative, and therefore they get taken up by the kidney. With a net neutral charge, our construct is preferentially not reabsorbed, but it tends to be excreted instead. That is a major reason we think why we haven't seen any kind of material kidney tox.
It has to do with the chelating agent. The other element of it is the daughter isotope, in our case bismuth, is almost entirely withheld within the chelating agent, and therefore it doesn't become an active metabolite that can yield untoward side effects.
We eliminate, or mostly attempt to eliminate, that sort of downstream effect. If you look at the safety profile of our drugs versus others, it wasn't random that we're coming out a little bit better or maybe a lot better on the safety side. It was designed into the molecule that way.
Okay. Yeah, that's the benefit of having everything in-house, including the manufacturing.
Yep. Yeah
You have a higher quality product.
Yeah.
Using a radioisotope like lead has got a preferential decay chain versus like an actinium-.
Right
um, as well, so.
Yeah.
Okay. Maybe we can shift to VMT-01.
Yeah.
I believe you're gonna have updates at ASCO for this program. you've shown previously, you know, clear tumor uptake, the drugs clearing from the blood, and not retained in normal tissue.
It is going to the tumor, as you'd expect, so a favorable PK profile, no DLTs. How is this asset sort of shaping up? How's the study been going in terms of enrollment? Maybe if you could frame sort of what we should expect at ASCO.
Sure. Maybe I'll just take a step back, and just in general, we'll have three posters at ASCO on our three clinical stage compounds. We presented a lot of data on our VMT-α-NET in particular at AACR, and also we gave brief updates at our investor day. I would not anticipate any kind of major card turning over of data for any of the compounds at ASCO. Yes, we'll have data there, but nothing, I think, that's going to be a major binary event, let's call it.
Depending on what investors see at the poster, things can change. As far as VMT-01 is concerned, That compound right now we're testing at 3 mCi. As you know, we've had responses or one response, we're looking at at this point, the combination of that compound with nivolumab. That study you asked about enrollment, that's enrolling well, we're also looking at it as a single agent, trying to assess what the right dose is, because the compound did not have responses at a higher dose. We think that the combination with a checkpoint inhibitor could be the trick to unlock the combination efficacy.
That would be at a higher rate than we've been able to see so far. We don't have that data yet, don't anticipate anything material at ASCO. We're guiding investors to maybe having that at a later time in the year.
Okay. Got it. You also touched on the FAP program, that's PSV359.
Right
At your Analyst Day. This may be a little bit different in terms of the way that the drug was designed and kinda how the tumor acts or the target acts on the tumor. Pretty broad expression across PDAC sarcoma. You know, what gets you excited about this program? You know, what are sort of the upcoming updates to look forward to?
Yeah. Thanks for asking that. It's, it's one that kinda gets overlooked a lot of times, but it possibly could be our most valuable agent.
As is often the case with developmental stage biotechnology companies. What excites me personally about it as a CFO is the large markets. I mean, this is almost every solid tumor has some potential to get impacted by this drug. So I get really excited with my team. We've kinda modeled that out. On the other hand, we have to kinda prove it first, and that's what stage we're in right now. We're actively enrolling, adding patients as we speak. And what we hope to have, not at ASCO, but maybe by the end of the year, is some evidence of efficacy of that compound in the various solid tumors that we're testing it in as a single agent right now.
Okay. Great. You recently nominated a fourth program-
Yeah
at your A nalyst Day, PSV594.
Yeah.
Maybe talk about this target. You had imaging data it looked very specific.
Yeah.
I think the KOLs that you invited to the event were reasonably excited as well t o see those images. Maybe you could talk us through sort of your excitement around this program and maybe sort of the origin story.
No, I'm glad you brought that up about your particular question about the origin story I think is what I find most exciting. As I said before about the other constructs we have, these are all intentionally designed. We don't just randomly come up with a couple that we think will rise to the level of clinical development just because we feel like it. It's because we've done the necessary work. It's not a target that a lot of people have heard of. It's not necessarily a target that you'd automatically go to, like KRAS or something like that. That's exactly the type of heavy lifting that we wanna do to expose these targets that we think can be exquisitely targeted. Sorry about the reiteration of the same word.
It gets back to what I was saying before about the theranostic element. The other thing I would say, not only are we analyzing and we will continue to come up with new drugs to new targets, but along the way, we don't stop until we do dozens of iterations using the theranostics and the dosimetry that I described before, until we find an agent that using our dosimetry techniques attaches or literally has an impact on the tumor while sparing the healthy tissue. As you saw in those images, and we do it first in animals, and then we go to the humans after that.
It's a methodical process that leads us down the path, and we won't spend investor dollars on the big, expensive trials until all those boxes are checked. The beauty of it is that a lot of that front-end work goes in, and that's very different than non-radio targeted compounds, your traditional targeted oncology, because you can theoretically think that your drug is only going to go to tumor, but you don't really know what that side effect profile is going to be until you test it in patients. We have a really strong conviction of our drugs before they even go into the first clinical trial t hat they're going to be safer than they would've otherwise has been, because we've integrated that into our theranostics element. Plus, we have the proprietary chelator to add extra insurance to keep the compound safe.
Yeah. Maybe in the last minute or so that we have, I wanna talk about your manufacturing. I feel like this is a real strength for the company and something you guys have been proactively investing in as you've been getting the clinical proof of concept from your pipeline. I've been to the Somerset location w hich is it's great to see sort of how the sausage is made, so to speak. Now you'll have Chicago, I think you're expanding to L.A., really canvassing the whole country. Maybe you could talk, a little bit about your manufacturing build-out, how you're kinda thinking about capital allocation to the fixed costs of implementing that infrastructure today. Could this be a revenue stream for you guys?
Yeah.
I mean, it's pretty, like, best in class manufacturing for lead.
Yeah, it really is. Thanks for bringing that up. It could potentially be a revenue stream if we have excess capacity, and we're building it such that we might have the capacity on hand. If other people need it, look, we're proponents of the radiopharmaceutical business.
If our competitors, so to speak, want access, we're happy to work with them to potentially provide that because we're advocates of the field that we're in. Yes, we allocate a significant amount of our capital, so much so that our PP&E by the end of this year will be over $100 million. I would say from a valuation perspective, as an ex analyst, I would calculate our EV on the basis of market cap less cash, less PP&E.
That really shows you in a striking way how undervalued we are. Obviously, I'm biased in that respect. Yeah, we're building out a state-of-the-art facility in Chicago. We already have land and a building in L.A., by the time we're done in Texas and Houston, we'll be able to cover from a geographic perspective the entire United States relatively routinely with our drug, both for clinical trial and ultimately for commercialization.
Okay, great. Great. Well, thanks for the great conversation, Joel. I think we're gonna have to leave it there for time, but really appreciate you attending the conference. Great to see the updates for the company and look forward to the rest of the year.
Awesome. Thanks, Alec.
Thank you.