Okay. Let's get started with our next fireside with Celcuity. My name is Rosy Liao. I am a member of the biotech research team here at Guggenheim Securities. With me, I have Brian Sullivan, CEO and co-founder of Celcuity. Welcome. Great to have you here.
Thank you. My pleasure.
To get started, maybe for those who are less familiar with the story, could you provide a quick overview of the company, a high-level view of where you are today, around six weeks into the REVTORPYK launch?
Sure. So, I started the company more than 10 years ago with our chief science officer, with the goal of developing a platform that could quantify the signaling pathway activity of live patient cells taken from patients, with the goal of identifying disease drivers that couldn't be characterized with a genetic assessment. One thing led to another. We had collaborations with Sanofi and Novartis and other drug companies. But we ended up zeroing in on the PI3K/AKT/mTOR pathway, because there was this fundamental question we couldn't answer, which was, how could you have such an important pathway that was implicated in over 40% of tumors with particular mutations, that was clearly a driver metabolically of all tumor cell function, not have an approved drug?
As we dug into this, we characterized using our platform all the drugs that have been developed in this space, to try to understand what, A, was required to induce a treatment effect, and then which drug would you want to work with. We identified a drug, gedatolisib now, REVTORPYK, that was owned by Pfizer at the time. Pfizer, we found out as we contacted them and said, "Hey, we'd love to collaborate on this drug," said, "Hey, we've deprioritized this. We are out-licensing it." We raised our hand and were able to strike a deal. The preliminary data was very favorable in second-line breast cancer as well as first-line breast cancer.
We made the decision to proceed almost immediately to a phase III study in breast cancer, where we studied PIK3CA wild-type and PIK3CA mutant patients independently. We received an approval for the PIK3CA wild-type patients. These are second-line HR-positive, HER2-negative advanced breast cancer patients. We began commercializing based on that approval just this past month, or six weeks ago. We have a pending sNDA that will read out with PDUFA end of the second quarter in patients who have a PIK3CA mutation. Both studies were very positive. Then we have two phase III studies underway in the first-line advanced breast cancer setting, one for patients who are less responsive to endocrine treatment, others who are more responsive to endocrine treatment.
Then we recently reported out data in the prostate setting, metastatic castration-resistant prostate patients, that, in our view, was very, very promising and certainly points the way to potential future phase III work. We will be transitioning to a phase II study, essentially do an Optimus study to comply with the FDA guidance, to help us select the phase III dose and accomplish some other goals, which positions us well in, we think, potential expansion into one of the other most significant tumor types. It's not a coincidence that breast cancer and prostate cancer are both very significant potential patient populations we could help, because they're both hormonally driven tumors, estrogen for breast cancer, androgen for prostate cancer. Both involve this pathway, the PAM, as we refer to it, pathway.
Fundamentally, we think our drug is an important driver, and from what we can assess currently, nearly any tumor that has a hormonally driven component. There's a lot of room for us to run currently.
Great. Thanks for that overview. We will be diving into the REVTORPYK launch. You reported earnings recently, and you shared some encouraging early access metrics. You said most of your top strategic accounts are already ordering, and you have broad payer coverage in place. Could you provide any color on what you are seeing on the ground so far, and how do you expect the launch to build over the coming quarters?
Sure. There is a reason why it takes several years to reach peak, because there is a lot of what we view as friction points, being able to get the maximum utilization of your drug in a particular setting. One of them is getting these strategic accounts on board. These strategic accounts treat roughly 50% of available patients. They are complex organizations. They have a lot of requirements to be put in place before they can bring their drug into their system. That is a gate that you need to get lifted. So far, so good. 80% of these strategic accounts are now ordering REVTORPYK. Provider pathways. It is not a well-appreciated requirement, but most systems will incorporate either their own or purchase pathways that serve as almost mini NCCN documents that guide utilization of drugs in their setting. Do they prefer one drug over another?
We have been very successful in getting three of the top four on our side. We are eliminating friction points early on. The reps have been effective in getting access to the doctors and to the accounts, basically introducing them to REVTORPYK, getting some very good early utilization of the drug. There is one other factor which we cannot really control, we can try to mitigate, which is the use of a temporary J-code now, that will ultimately receive a permanent J-code. That will be approved or be given to us in January, will become activated on April 1st. That is a friction point which just takes time. Some accounts are more sensitive to that, more reluctant to bring on drugs with a temporary J-code, and that is just the way it is. Then, of course, you have the treating physicians.
You can think of the treating physician somewhat in a consumer context. You have the experimenters, the early adopters, the mainstream, and then you have the skeptics. Any product, you typically see there is a segmentation based on those behavioral attitudes. Over time, clearly the experimenters, the early adopters will be the ones that drive it initially, and then the mainstream folks who basically want to wait and see, and then the skeptics who eventually win over, we think. We are not projecting any as a percentage. We are just saying that is a typical segmentation growth that you go through. With drugs launched by companies launching their first drug, typically it takes about three years to get to peak penetration for your first launch.
Great.
We hope our first-line trials read out positively and we get approvals. We would expect, because then we will be established a more quick-
Right
time to peak.
Great. I guess you mentioned the temporary J-code and the permanent code will be coming in April. I guess, can you provide any just like general commentary on kind of how the sites are adapting to the buy-and-bill process currently?
Sure. Every patient in breast cancer, or I should say nearly every patient in breast cancer, will ultimately, either in the first-line setting, second, third, fourth-line setting, receive infused therapy. Infused therapies are distributed through a buy-and-bill approach. This essentially means you get an order from a distributor that goes to our 3PL, and we ship it directly to the site, in our case, next day. So they are very used to working with drugs like ours. They have essentially established centers that are geared towards providing drugs in this manner, and it is an important part of their practices. For a variety of reasons, these drugs become important to these centers financially. So, in many cases, they like to see the patients. It is additional exposure to them to monitor how they are doing. In our case, we have a very, very, we think, significant efficacy advantage over the alternatives.
It is in an area where they can help recover costs that their practice incurs. That is not a reason to use the drug, but it certainly is not an obstacle either.
Great. Maybe just touch on supply real quick. I think you mentioned at earnings that your supply is sufficient for planned or higher than planned demand, and you have a second manufacturing site expected in mid-2027. I guess, are there any remaining gating items on that site, and how are you thinking about supply as demand grows?
We have sufficient supply for 2027, and as far as thinking about the second site, we have actually got a third site that we are working with. Essentially, it is going to be a process building out the supply chain. We have to look ahead. The method that we use to formulate the drug is one where it is not possible to get very, very high volume batches. Invariably, as you build out your business, in this case, build out the demand, you will need to have multiple manufacturers, not only for capacity, but also for redundancy. That is just an evolution, and we are in that process. We just wanted visibility that our approach to initiating transfer to the second manufacturer was going to comply with FDA's expectations.
We are very confident it did, but at the same time, it was nice just to have that initial interface and to make sure that we had not missed anything.
Great. So you have a doublet and a triplet. What are you hearing from physicians as to how they're deciding between the two regimens, and do you see that evolving over time?
Sure. Well, we've gotten a couple data points. One was the research we did where we present the data to doctors, do it on a blinded basis, and ask them to select the therapy for a particular patient type, and then we rotate through different patient types. We found in that research that there was about an 80/20 split for preference for the triplet versus the doublet in the wild-type setting. That was the data we were testing. Then we saw in our VIKTORIA-1 study where we offered a crossover, a potential for patients who were on our control arm to cross over to either the doublet or the triplet, and about half did, 60%, and 85% of those that did cross over received the triplet. So we think there's a preference by a wide margin for the triplet. The data supports that.
It's a little more complicated story in the mutant setting, where essentially we have this pending sNDA. The triplet met its primary endpoint, two times improvement in likelihood of survival without progression or death. So really very favorable, tested against a drug in our class. So really, it was almost as good as it gets. We had a doublet that was really included in the study to provide mirror data to our doublet in wild type. It wasn't required for regulatory purposes, and so we didn't power that study to detect and didn't assign alpha to that analysis. That makes it a little more complex. But the data was comparable on a top-line basis.
When you dig into the details, whether it's the OS interim data, you look at the patients lacking liver mets, which is roughly 70% of patients, there's a two times greater PFS period for the triplet than the doublet. So ultimately, as we educate physicians, we think they'll also prefer significantly the triplet versus the doublet. But either way, we think the patient's going to get a better outcome using either the triplet or doublet relative to what's currently available.
Great. You mentioned the PIK3CA mutant, and you had data recently at ESMO, and you mentioned the sNDA as well. I guess, how are you thinking about the opportunity in the mutant population? Perhaps if you can also comment just like positioning relative to the competitive landscape here.
Sure. We think there are three segments that are of relevance in the HR+/HER2- space. There are patients who lack a mutation, either PIK3CA or ESR1, we call them double negatives. We think we have a very, very significant advantage, or rather REVTORPYK offers a significant advantage over other currently available therapies. The mutant side, we think that is a similar case with patients that have a PIK3CA mutation. Each of those subgroups represent roughly 40% of the total population, 80% total. In the mutant setting, there are a couple drugs that are approved that are specific to the pathway, only approved for mutant, alpelisib, capivasertib. We showed against alpelisib a two-fold greater benefit, PFS benefit than that drug.
Capivasertib offers a similar benefit, so you could look at that and say, "Okay, clearly there is meaningful clinical benefit relative to the alternative." So we would expect significant utilization of the drug in that setting, probably akin to what we will see in the wild-type setting.
Great. Just in terms of potential approval, I think the wild-type regimens were added to guidelines very quickly. I believe it was around two weeks after approval.
I guess, how are you thinking about the timelines for the mutant population, and how important do you think that is for uptake?
Well, it's very helpful to have the NCCN incorporated in NCCN. The requirement, once you have an approval, to get additional recommendations is either another approval or a publication, peer-reviewed, that presents your data. We expect to have a publication that is presenting or reporting out formally the mutant data sometime this quarter. That would be the basis for a submission to NCCN for consideration of inclusion of the mutant population or the mutant data and the mutant indication into their guidelines.
Great. I think you've guided to overall survival data from VIKTORIA-1 in first half of next year. I guess just given the context of what we know about historical OS readouts in this setting, I guess how should we interpret the results of that data and especially with the crossover in the wild-type cohort, and I guess how impactful is it to the launch?
Well, it's really, I don't think it'll be impactful. It'll be impactful if it's favorable, as any OS readout is, because there is no positive OS data to date that's been reported for an OS, rather a second-line indication. If OS data doesn't read out positively, I don't think it will have any impact because that's par for the course. Positive readout will certainly be very good. One of the reasons why you don't tend to see positive readouts in the second-line setting is that the regulators haven't required it for approval. Statistically, to power an analysis sufficient to detect a difference in overall survival, typically you need more patients, you need more events. That could double or triple the size of a study, which has a lot of consequence, delay, cost, without a regulatory benefit.
Now, certainly, there would be a benefit if you got it, but you have added a lot of cost and time with an uncertain benefit. Most sponsors, including us, I would say almost all sponsors, have elected not to power that OS analysis, which in turn may not mean there is not an OS advantage, it just means it was not detected in the study. There is kind of a rationale that has been used to date for the design of these studies that has just made it not possible to detect it.
Right, that makes sense. I guess maybe moving to VIKTORIA-2, so that trial was recently expanded to include endocrine-sensitive patients.
Can you just remind us on kind of what drove that decision?
Sure. The two subgroups of women who present with treatment-naive HR+, HER2- advanced breast cancer, and one group are women who received adjuvant treatment in early breast cancer setting, and they did not respond well to it. They either progressed while they were on the drug, let us say a tamoxifen or letrozole, or soon after. So they are endocrine-resistant. We started that study a year ago, and then as we got our positive data for the wild type, and reflecting on the positive data, or rather the favorable data we had in that population, in the endocrine-sensitive population, we said, "It is time for us to expand the study to include those patients." That is roughly 60,000 patients. Now, those women get on standard of care today about 25 months median PFS. So they have good alternatives.
We presented preliminary data from a phase I-B study, sample size of 41 patients, but the data was very favorable, 48 months median PFS, 79% objective response rate. Certainly, it suggests that the pathway is very active in first-line settings, which we would expect. We think the probability of success in those studies is high. Given the opportunity to potentially really extend meaningfully the benefit for women in both first-line settings, and then given our ability to finance that's an expensive study. It takes a while to not only accrue the patients, but then for the data to mature. Once we had that data, our second-line wild-type data in hand, we felt confident that it was time to go.
How is that study enrolling relative to your expectations?
We're on track. Essentially, you've got a bunch of steps when you're launching a global study, which include, among other things, getting regulatory approval in the various regions of the world. That process is nearly complete, and that in turn allows you to activate the sites and expand the number of sites that are enrolling. That's all happening at pace. We've been enrolling in a bunch of countries, and we'll be kind of completing the regulatory process for the most part by the end of this year. There'll be some countries that take a little longer.
Great. I do want to leave some time to talk about your prostate program. You're testing a very similar idea as in breast cancer in terms of blocking the PAM pathway alongside hormone therapy.
Here in prostate cancer, you're using darolutamide. I guess you've now seen data across several doses and after different prior therapies, and you're planning a phase II start in
Right
first half of next year.
Yeah.
I guess, how did the data that you have today kind of shape the design of that trial, and what would you need to see to move forward to registration?
The data showed a very significant preliminary effect, and that was variant based on what prior androgen receptor therapy they had. There are two primary drugs or types used, abiraterone, which is an androgen inhibitor. Patients who receive that drug early will tend to respond better to subsequent treatment with drugs that hit the receptor directly. What we would likely do, if we were to evaluate in the next phase study, is isolate those populations, those who've had prior abiraterone versus those who've, not versus, but also versus prior enzalutamide. That in turn will inform how we design the study statistically and how we might sequence endpoints
for a phase III study. We think that is data that is needed. Also, FDA is requiring these Optimus studies, so we have to do additional work anyway to satisfy some other requirements. It will be very informative and point us in the right direction, we think.
Is there a certain bar or benchmark that you want to see in terms of efficacy in order to have more confidence in starting a phase III?
If we had a larger sample size that recapitulated the data we have reported to date, that would be sufficient for us to decide to go to phase III.
Great. I guess, can you just remind us of your balance sheet? How are you thinking about investment priorities across the launch and also the pipeline as the business grows?
One of the conundrums with developing a drug is that you have to start building out your commercial organization well in advance of knowing whether you are going to have a positive study. You have to get a jump on this roughly two years prior to when you expect your data or when you expect approval, which we did. You build that organization over time, so by the time you launch, you essentially have your organization built. The expenses that we are incurring to fund the launch, execute it, will be plus or minus stable over time. The growth in expense will primarily be associated with additional clinical programs. We have these two phase III programs that are already baked in the cake. Again, we are hopeful that we have an opportunity to do a prostate.
The size of these indications and the potential peak revenue potential for us, assuming even only modest penetration, is several multiple billions of dollars. Very important group of patients to treat, very important financially for the company to potentially do. The investment, it would pay off, and we think the probability of success will be high. As long as you have opportunities like that, and we are fortunate that we do, you would want to continue investing. We also think, though, because of the potential size of the opportunity we have in second-line setting, we will generate sufficient revenue, which will contribute significantly to funding those types of activities. Our cash requirements externally would not be significant. It does not mean we would never raise capital again, but it means that even if you are not cash flow positive, you are not burning a lot of cash.
The whole financial profile of the business shifts. Profitability is a benchmark, but in some level, I would rather have more opportunities to invest that could potentially add incremental $2, $3, $4, $5 billion of revenue than be profitable a year earlier.
Right
For instance. Yeah.
And I guess you have some ex-U.S. filings planned around year-end. I guess, how are you thinking about the opportunity outside the U.S., and would this be something that you do on your own or maybe-
The ex-U.S. opportunity has gotten much more complicated over the past few months with this Most Favored Nation rule. I think you've seen a number of companies delay either regulatory submissions. Roche recently for their drug, giredestrant, indicated that they don't have a timeline for submitting in Europe, for instance. That's actually been the case for a number of other drugs. It does make you step back and think about how you would approach it. I think the default was a company in our situation would likely find a partner, and you give up, for the most part, your control over how the drug would be commercialized. In this environment, that becomes tricky because you need to have control over the pricing. You can't give this drug to somebody in Europe and then have them essentially take 40% of your U.S. revenue off.
You have to be more thoughtful. So we're sorting through that. It may mean you do launches that are more targeted either to patients who have access to a private insurance coverage, countries that will have more favorable reimbursement rates, prices. There's been some word that Japan has shifted. I mean, we've interacted quite a bit with Japan. We'll have a regulatory study get going by the end of this year to support an eventual submission. Japan, up until recently, paid the lowest prices, and now people are saying, "Oh, they're paying the highest prices." Well, it's all relative. It's a much more complex decision than it was, and so our regulatory strategy will reflect that.
We've somewhat taken the view that this is a long timeline for the process of being in a position to launch, so there's a benefit to getting it going sooner rather than later, but you don't want to overcommit until a strategy, we can understand strategically how we would best launch while ensuring we aren't diminishing the size of the U.S. opportunity for us.
Great. Thank you for that. I think with that, we are up on time. Thank you for joining us and thank you for a wonderful discussion.
You are welcome. It was my pleasure. Thanks.