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Mirati Therapeutics, Inc. (MRTX) Q2 2023 Earnings Call Transcript

Mirati Therapeutics, Inc. (MRTX)

Q2 2023 Earnings Conference Call

Company Participants

Ryan Asay - Vice President-Corporate Affairs

Chuck Baum - President, Founder & Interim Chief Executive Officer

Alan Sandler - Chief Medical Officer

Jamie Christensen - Chief Scientific Officer

Ben Hickey - Chief Commercial Officer

Laurie Stelzer - Chief Financial Officer

Conference Call Participants

Michael Schmidt - Guggenheim

Tyler Van Buren - TD Cowen

Jay Olson - Oppenheimer

Gena Wang - Barclays

Jonathan Miller - Evercore

Jason Gerberry - Bank of America

Ben Burnett - Stifel

Mike Ulz - Morgan Stanley

Yigal Nochomovitz - Citigroup

Evan Seigerman - BMO

Presentation

Operator

Good afternoon, and welcome to the Mirati Therapeutics Second Quarter 2023 Earnings Call. My name is Justin, and I will be the operator for today's call. All lines have been placed on mute to prevent any background noise. After the conclusion of the speakers' prepared remarks, there will be the question-and-answer session. [Operator Instructions]

It is my pleasure to introduce Ryan Asay, Vice President of Corporate Affairs at Mirati. Ryan, you may begin the call.

Ryan Asay

Thank you, Justin, and welcome everyone to this afternoon's call. Joining me on the call today are Dr. Chuck Baum, our President and Founder; Dr. Alan Sandler, our Chief Medical Officer; Dr. Jamie Christensen, our Chief Scientific Officer; Ben Hickey, our Chief Commercial Officer; and Laurie Stelzer our Chief Financial Officer.

I'd like to inform you that certain statements we make during this call will be forward looking. Because such statements deal with future events and are subject to many risks and uncertainties actual results may differ materially from those in the forward-looking statements. For a full discussion of these risks and uncertainties, please review our annual report on Form 10-K and our quarterly reports on Form 10-Q that are filed with the US Securities and Exchange Commission.

This afternoon, we released financial results for the quarter ended June 30, 2023 and recent corporate updates. This press release and accompanying second quarter earnings slide presentation are available on the Investors section of our website at mirati.com. Additionally, this afternoon we also announced the launch of a public offering. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy our securities. The securities described are being offered pursuant to a shelf registration, statements filed by us with the SEC that became automatically effective upon filing.

We have filed a preliminary prospectus supplement and accompanying prospectus with the SEC related to the offering. These together with the final prospectus can be accessed on the SEC's website or the Investors page of our website at mirati.com.

Before we proceed, I'd like to address an important leadership transition within our organization. This afternoon we announced the departure of David Meek and the appointment of Dr. Chuck Baum, as Interim CEO during the transition period, while our Board leads the search for a permanent CEO.

With that, it's my pleasure to introduce Dr. Chuck Baum, the President, Founder and Interim CEO of Mirati.

Chuck Baum

Thank you Ryan and thank all of you for joining us on the call today.

On this afternoon's call I will provide initial remarks, before turning the call over to Alan, Jamie, Ben and Laurie to provide key updates. I'll then provide some closing remarks before we open the line for questions. I would like to start by thanking David in acknowledging the significant role he played in leading the company. Under David's guidance the past two years, we have continued to advance our robust R&D pipeline and made a lasting impact on people living with cancer.

During this period, we received the FDA approval and launched KRAZATI, becoming a commercial-stage company. I express my and the company's gratitude for David's contributions. I have been appointed the interim CEO of the company. It is both an honor and a weighty responsibility to return to this role.

As Founder, President and CEO of Mirati for 10 years, I am deeply committed to our mission, and I will work tirelessly to advance our robust pipeline while pushing the boundaries of novel science and best-in-class capabilities.

As we navigate this transition, our mission remains unchanged. We will continue our relentless pursuit of scientific excellence and development of groundbreaking therapies and the improvement of patient outcomes. Our commitment to innovation and patients will remain at the core of everything we do.

I am confident in the strength of our team and the wealth of experience we possess. Our focus is on building the capabilities needed to drive long-term sustainable growth of our business. We have a robust pipeline and innovative programs with one of the most productive drug discovery organizations in the industry. Our focus is on the areas of cancer with large unmet needs, and where revolutionary treatments can have meaningful impact on the lives of patients.

Today, we will highlight several important updates, which we believe are very meaningful for Mirati. In first-line non-small cell lung cancer Alan will share an updated data set, which provides clear and compelling support for the rapid advancement of this combination into Phase 3 development in patients with TPS scores of greater than 50%.

In our earlier-stage pipeline, Jamie will summarize the promising initial clinical data for MRTX1719, which is our potential best-in-class molecule in the emerging field of MTA-cooperative PRMT5 inhibitors.

In second-line non-small cell lung cancer, Ben will describe how the differentiated profile of KRAZATI, along with the world-class commercial organization, have led to a strong initial launch and the promise of continued growth.

Finally, Laurie will share certain details regarding our recent announcement for a proposed public offering along with a summary of our second quarter financial results.

I am very optimistic and very excited about the future of Mirati. We are well positioned to create significant value for shareholders while also making a meaningful impact on the lives of people living with cancer.

With that, I'll now turn the call over to Alan.

Alan Sandler

Thank you, Chuck, and hello everyone. I'll begin on slide 6 by discussing adagrasib, starting with first-line non-small cell lung cancer. My commentary will reflect an updated data cut as of February 28 of this year of cohorts 1a and 2 of KRYSTAL-7, a Phase 2 study evaluating adagrasib in combination with pembrolizumab in first-line patients with non-small cell lung cancer with KRAS G12C mutation.

Moving to slide 7. Patient numbers and median follow-up nearly doubled since our prior updated ESMO IO in December 2022.

On slide 8, you will see that the baseline patient characteristics were generally consistent across data cuts and subgroups.

Let's now discuss the safety summary covered on slide 9. Overall, the adagrasib plus pembrolizumab combination has been well tolerated with a manageable safety profile. Most frequent treatment-related adverse events of the combination are listed on the slide. Importantly, most of these adverse events were low grade and manageable, which led to acceptably low rates of dose reduction and dose interruption of either adagrasib or pembrolizumab.

Treatment-related adverse events led to treatment discontinuation of either adagrasib or pembrolizumab in 18% of patients and both drugs in just 4% of patients. This discontinuation rate is consistent with other regimens in the non-small cell lung cancer treatment setting.

Let's now move to slide 10. Combination of adagrasib with pembrolizumab demonstrated low rates of clinically meaningful liver toxicity. Liver enzyme elevation was low and consistent with what was presented at ESMO IO. Notably, only two patients or 1.4% discontinued the combination due to liver treatment-related adverse events.

I'll now summarize the interim efficacy results in patients with TPS scores of greater than 50%. On slide 12, the efficacy outcomes for the adagrasib plus pembrolizumab combination in TPS greater than 50% are highly encouraging and comfortably see the outcomes of pembrolizumab monotherapy, which is the standard of care for these patients.

The confirmed objective response rate in the full analysis set was 63%, again comparing favorably to the benchmark 39% in KEYNOTE-42 and 45% in KEYNOTE-24. Among clinical activity of valuable patients defined as requiring at least one post-baseline scan, the objective response rate was even higher at 71%.

Let's advance to slide 13. The median progression-free survival has not yet been reached, but is tracking well above first-line non-small cell lung cancer standard of care thus far.

Similarly, on Slide 14, median duration of response has also not yet been reached, but is again tracking well above the KEYNOTE-42 benchmark. I will note that the median overall survival remains immature for analysis as of the time of this data cut.

Let's advance to slide 15. In summary, KRYSTAL-7 efficacy and safety data strongly support the advancement of the adagrasib plus pembrolizumab regimen into a pivotal Phase 3 study in patients with TPS scores of greater than 50%. It's important to note that patients with TPS greater than 50% represent approximately 40% of the first-line KRASG12C mutant non-small cell lung cancer patient population and closer to 50% of the revenue opportunity when accounting for the longer treatment durations relative to patients with TPS scores of less than 50%.

Now we'll advance to slide 16, which summarizes our Phase 3 study design for adagrasib plus pembrolizumab compared to pembrolizumab monotherapy. The conversion of approximately 150 KRYSTAL-7 sites to the Phase 3 study are underway, which we expect will help us move expeditiously. We expect a primary end point of progression-free survival requiring approximately 500 patients. We plan to have additional discussion with the FDA in the third quarter to finalize the Phase 3 study design. We expect to initiate patient enrollment in this Phase 3 study by year-end.

I'll now discuss our clinical development approach in patients with TPS scores of less than 50% summarized on slide 18. Upon evaluating the updated data cut of KRYSTAL-7 we saw clear signals of clinical activity with adagrasib plus pembrolizumab in the TPS less than 50% patient population. However, these data suggest that doublet approach will not be sufficient to displace the existing standard of care for these patients, which is the KEYNOTE-189 regimen of carboplatin, pemetrexed and pembrolizumab.

However, safety and tolerability profile of the adagrasib plus pembrolizumab combination continues to be favorable, which will potentially enable us to add adagrasib to the KEYNOTE-189 regimen. The Phase 2 KRYSTAL-17 study of adagrasib plus chemoimmunotherapy combination is underway with initial enrollment expected imminently to confirm the optimal Phase 3 approach for patients with TPS scores of less than 50%. We anticipate a decision regarding Phase 3 registrational plans in the TPS less than 50% patient population in 2024 based on the safety and preliminary efficacy data from KRYSTAL-17.

Shifting gears and advancing to slide 20, I will now briefly summarize adagrasib's potential first-in-class development plans for difficult to treat cancers beyond non-small cell lung cancer. The combination of adagrasib with cetuximab has shown a compelling and differentiated profile in third-line or later colorectal cancer, and we are on track to submit the supplemental new drug application for accelerated approval in the fourth quarter of this year....

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