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Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) Q3 2018 After-effects Earnings Appointment Alarm November 8, 2018 8:30 AM ET

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Executives

Melissa Downs – IR

Mark Baker – CEO

Pat Fabbio – SVP and CFO

Bryce Tenbarge – Senior Vice President, Commercial

Analysts

Chad Messer – Needham & Company

Timothy Chiang – BTIG

Operator

Good day, ladies and gentlemen, and acceptable to the Progenics Pharmaceuticals Third Division 2018 After-effects Appointment Call. Currently, at this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer affair and instructions will hunt at that time. [Operator Instructions]. Also, as a reminder, this appointment alarm is actuality recorded.

At this time, I would like to about-face the alarm over to your host, Melissa Downs. Please go ahead.

Melissa Downs

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Thank you, operator. On account of Progenics administration team, acknowledge you for aing our appointment alarm to assay our third division 2018 banking after-effects and accommodate a business update. Aing the alarm today are Mark Baker, Chief Executive Officer; Bryce Tenbarge, Senior Vice President, Commercial; and Pat Fabbio, Senior Vice President and Chief Banking Officer

Before we begin, I’ll admonish you that animadversion fabricated on this alarm that are not absolute in attributes may be avant-garde statements and are accountable to a cardinal of risks and uncertainties. Our absolute after-effects may alter materially. Such animadversion may include, but are not bound to, those involving accurate actions, analytic development, and added affairs accompanying to our prostate blight pipeline; AZEDRA, RELISTOR, and our added artefact candidates; our business and commercialization strategies and expectations of approaching growth; revenues and assessments of our aggressive position.

Please see our best contempo forms 10-Q, 10-K, and added filings with the US Securities and Exchange Commission for added advice on the risks that could account our absolute after-effects to differ. As a reminder, statements we accomplish today are as of November 8th only.

I will now about-face the alarm over to Chief Executive Officer, Mark Baker. Mark?

Mark Baker

Thank you, Melissa. And acceptable morning to everybody aing us today. Accomplished few months accept been a aeon of acute action and cogent beforehand at Progenics as we accept appear assorted developments with our altered portfolio of targeted radiopharmaceuticals advised to find, action and hunt cancer.

In backward July, we transitioned to become a absolutely chip biopharmaceutical aggregation with the FDA approval and the actual barrage of AZEDRA for the assay of patients with unresectable, locally avant-garde or metastatic pheochromocytoma or paraganglioma who crave analytical anticancer therapy. The approval of AZEDRA apparent a above anniversary for Progenics and a beforehand for the assay and affliction of patients who are in analytical allegation of assay options. AZEDRA represents the aboriginal and alone accustomed assay for these indications. Barrage is now underway and Bryce will accommodate an amend on our bartering efforts momentarily.

In alongside with our barrage of AZEDRA, we accept additionally appear beforehand beyond our portfolio of PSMA targeted radiopharmaceutical imaging agents and assay for prostate cancer. Best afresh we appear our affairs to beforehand 1095 our baby atom radiotherapeutic into a Phase 2 analytic balloon based on discussions with the FDA. We’re actual aflame about the abeyant of this candidate. Radiopharmaceuticals accept accustomed account in the assay of prostate cancer. And 1095, with its PSMA targeted admission has altered abeyant on the assay of metastatic prostate cancer. Abstracts from our compassionate use abstraction of 1095 indicates it was able-bodied acceptable and accustomed appreciably bargain PSA levels and cartilage affliction in a accumulation of heavily pretreated avant-garde prostate blight patients, afterward a distinct aeon of treatment. The planned multi-center randomized controlled balloon will appraise 1095 in aggregate with standard-of-care enzalutamide a atypical androgen arbor biologic or NAAD in patients with metastatic alter aggressive prostate blight or mCRPC, who are PSMA-avid, chemotherapy naïve and who are progressed on abiraterone, accession NAAD, PSMA alertness will be bent with PyL our PET imaging agent, highlighting the abeyant affiliation of our articles to advance the accommodating treatment, a accurate theranostic approach.

The account for this balloon is based on contempo preclinical assay which suggests the accessory abeyant of 1095 added enzalutamide in these patients, accurately the abstracts suggests that 1095’s cytotoxic action is added added with enzalutamide which sensitizes the corpuscle to radiotherapy induced corpuscle death. We accessory avant-garde to initiating the balloon in aboriginal 2019. We plan to accept about 120 patients.

The study’s primary endpoint will be PSA acknowledgment amount according to the Prostate Blight Analytic Trials Alive Accumulation 3 criteria. Secondary endpoints will appraise radiographic acknowledgment based on the Acknowledgment Evaluation Belief in Solid Tumors or RECIST, progression-free adaptation and all-embracing survival. Patients will be followed for one year afterwards the assay for all adeptness endpoints. Adaptation and assurance abstracts will be calm for an added year. Accustomed the abeyant for 1095 and our aplomb in the program, we are evaluating means to advance the compound’s development.

In accession to alive this Phase 2 study, a key focus for 2019 will be free whether there are opportunities to drive the affairs avant-garde into Phase 3 if antecedent abstracts is positive. We plan to accommodate an amend on our development action by the end of aing year. We additionally afresh appear auspicious top-line after-effects from our Phase 2/3 OSPREY study, analytical the analytic achievement of our PSMA targeted radiolabeled imaging abettor PyL acknowledging advance to Phase 3.

The OSPREY abstraction dosed 385 patients with either aerial accident locally avant-garde prostate blight or metastatic or alternate prostate cancer. The PyL imaging after-effects in the “gold standard” balloon were compared to the accurate accepted of the histopathology of tissue removed from the man, either through surgical abatement of doubtable lymph nodes, pelvic nodes or biopsy doubtable metastatic lesions.

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PyL is apparent to be awful reliable in audition metastatic prostate blight lesions with 93% to 99% sensitivity, as able-bodied as in acknowledging the absence of pelvic bulge ache with 96% to 99% specificity. In accession PyL accustomed able absolute predictive amount and abrogating predictive ethics of 78% to 91% and 81% to 84% appropriately in apprehension of prostate blight in the pelvic lymph nodes. We additionally saw able PPV in audition metastatic ache alignment from 81% to 88%. Collectively the abstracts from the OSPREY balloon showed PyL to accept absorbing analytic performance. And it has the abeyant to advance how able physicians can both ascertain ache and adviser acknowledgment to therapies, and ultimately, to acquaint the adapted assay decisions in patients.

Based on the backbone of this data, we are now affective avant-garde with affairs for our Phase 3 balloon with PyL, which we apprehend to admit afterwards this year. Our Phase 3 balloon is accepted to accept about 15 sites in the US and Canada and planned accepting of about 200 patients. The ambition of this abstraction is to appraise the analytic achievement and analytic appulse of PyL in patients with doubtable biochemical ceremony of prostate cancer.

In September, we appear top-line abstracts from our Phase 3 abstraction of 1404, our PSMA targeted baby atom SPECT/CT imaging abettor that is advised to anticipate prostate cancer. While 1404 detected clinically allusive prostate blight with specificity alignment amid the three readers from 71% to 75%, the abstraction did not accommodated the co-primary endpoints of sensitivity. Accustomed the abundance of added development opportunities in our PSMA targeted radiopharmaceutical program, at this point, we are suspending added advance in 1404.

Turning to PSMA-TTC, our beforehand date PSMA targeted radiotherapeutic affairs which is partnered with Bayer. We apprehend that Bayer will admit a Phase 1 abstraction which was afresh acquaint to clinicaltrials.gov in patients with mCRPC by the year-end. We’re admiring to see the contempo affirmation that clinicians and biologic industry leaders are added acquainted the amount of radiopharmaceuticals to abode a ambit of unmet allegation in oncology. Progenics is appreciative to be at the alpha of this arising admission for the apprehension and assay of prostate cancer. As you can see, we’ve had a alive aeon beyond our activity of radiopharmaceuticals.

I’d like to about-face the alarm over to Bryce for an amend on the AZEDRA launch. Bryce?

Bryce Tenbarge

Thanks, Mark. Immediately afterward FDA approval of AZEDRA, we accomplished our bartering barrage of it beyond the US. We are encouraged by the accession to-date including absorption from institutions, physicians and patients of accepting admission to this atypical therapy. AZEDRA is the aboriginal artefact accustomed for the ultra-orphan ache and antecedent absorption requests the disparate allegation for new therapy. Since approval, our aggregation of sales representatives, those individuals with bifold oncology sales and nuclear anesthetic background, medical science communication and agreement specialists accept been alive our barrage strategy. Accustomed the complication in alleviative blight on AZEDRA, assay guidelines acclaim that these patients to be referred to multi-scenario centers with specialized assets so that the majority of patients are advised at about 25 centers beyond the country.

Our cross-functional accord aggregation is actively circuitous with all of the bank 1 targets. We’ve additionally accustomed in-bound absorption from added institutions in key geographic regions. As a result, we are now in alive chat with over 30 centers as allotment of the cogent barrage ever.

As we accept mentioned before, AZEDRA is a circuitous radiothearpeutic, one that requires adapted handling, procedures, training and activity insured and one that generally requires assay by centralized committees such as pharmacy and therapeutics. We are alive to ensure that the beverage centers accept completed the assignment all-important to activate initiating AZEDRA. Action does alter from center-to-center and we are admiring that some institutions accept already completed their centralized processes. We are alive carefully with added institutions to advice facilitate this action as we assignment to get AZEDRA to the patients for assay options.

Referral networks are additionally actuality accustomed to accredit accommodating admission to assay and we accept created accommodating casework affairs to abutment aftermarket allegation including travel. Our bazaar admission initiatives are advancing to ensure agreement is in place. Our bazaar admission initiatives are advancing to ensure agreement is in abode and that able abutment is accessible to our hospitals who allegation coding and announcement assistance. 100% of prioritized payer accounts accept been affianced by our aggregation and conversations accept been positive. As first-in-class ultra-rare product, we are encouraged to see the cardinal of payers that are absorbed and affianced ambitious about AZEDRA. To-date the above-mentioned allotment belief and behavior that accept been created are constant with our FDA accustomed characterization and appear data. AZEDRA was additionally added four biologic compendia: Analytic Pharmacology; DRUGDEX; Lexi-Drugs; and NCCN. These compendia are accustomed by clandestine insurers and the Centers for Medicare and Medicaid Casework CMS as accurate sources to be advised in free biologic reimbursement. Our aggregation has additionally activated for capricious aisle to agreement cachet by advancing new technology add-on payments or NTAP and from that acquittal cipher with CMS. We accept our efforts will laying foundation to advice accompany added industry accepting to AZEDRA and advice drive accepting and agreement of this appointed beforehand therapy.

In accession to our bartering barrage efforts, the complete after-effects of a Phase 2 cardinal abstraction of AZEDRA were appear online in the Journal of Nuclear Anesthetic this accomplished October. Our cardinal balloon was the better multi-center -to-be balloon to appraise assurance and adeptness of any assay in patients with pheo and para. With our approval, we’re now because abeyant to aggrandize the bigger break for AZEDRA including the assay of added iobenguane browse absolute blight patients.

At the accessible anniversary affair of the Radiological Society of North America afterwards this month, we will accept the befalling to present a abounding assurance assay beyond assorted analytic studies evaluating AZEDRA in patients with iobenguane browse absolute cancers. This abstruse was called for the adapted action on aerial appulse analytic trials. As we heard, we accept accelerated and absolute efforts in abode to defended appliance and admission to AZEDRA.

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I would now like to about-face the alarm over to Pat Fabbio, our Chief Banking Officer. Pat?

Pat Fabbio

Thanks, Bryce. You can assay capacity of our financials in the columnist absolution we issues this morning and in the 10-K, 10-Q that we will filed afterwards today. Third division acquirement absolute $5.3 million, up from $2.7 actor in the third division of 2017 absorption RELISTOR adeptness assets of $5.2 actor compared to $2.6 actor in the agnate aeon of 2017. Third division assay and development costs decreased by $2.3 actor compared to the agnate aeon of 2017, consistent primarily from lower alien costs associated with the achievement of the AZEDRA cardinal balloon and the Phase 3 balloon for 1404.

Third division 2018 selling, accepted and authoritative costs added by $1.1 actor compared to the agnate aeon from 2017, primarily attributable to college costs associated with the bartering barrage of AZEDRA. We recorded a net non-cash allegation of $15.2 actor in the third division 2018, accompanying to changes in the fair amount estimates of abstract assets and accidental application liability, primarily accompanying to 1404.

For the three months concluded September 30, 2018, we accustomed absorption amount of $1.2 actor accompanying to the RELISTOR royalty-backed loan. Our net accident for the quarter, third division was $24.4 million, or $0.30 per adulterated share, compared to a net accident of $15.4 million, or $0.22 per adulterated share, in the agnate 2017 period.

In agreement of our banknote position, we concluded the third division with banknote and banknote equivalents of $148.9 million, this reflects an access of $58.2 actor from the December 31, 2017 balance. We abide to strengthen our banknote position by adopting net gain of $70 actor during the division from auction of accepted banal in underwritten accessible action and $4.8 actor due to sales of accepted banal in aftermarket transactions.

And now I’ll about-face the alarm aback over Mark to conclude.

Mark Baker

Thanks, Pat. As categorical earlier, we accept an alive of the year with several key activity initiatives planned for our PSMA targeted imaging and ameliorative agents for prostate cancer, as able-bodied as the advancing bartering US barrage of AZEDRA. As we access this new affiliate of advance for our aggregation and activity we abide motivated by our eyes find, action and hunt blight with our targeted radiopharmaceuticals.

With that I’ll accessible the alarm for questions. Operator?

Question-and-Answer Session

Operator

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Thank you, sir. [Operator Instructions]. Our aboriginal catechism comes from Chad Messer from Needham & Company. Please go ahead.

Chad Messer

Great. Acceptable morning and acknowledgment for demography my questions. I capital to alpha with PyL the imaging agents actually. Afterward affectionate of a bit of a complicated Phase 2/3 design, can you allotment some added capacity about what this Phase 3 will accessory like? And in accurate accept you acclimatized on the primary, is that activity to be PPV and accept you acclimatized on what a hurdle amount adeptness be?

Mark Baker

Yes acknowledge you Chad. We’ve aloof had our interactions with the FDA. The endpoint is PPV like. And the ambience is in patients with ascent PSA a biochemical ceremony setting. We’ve been in interactions with the FDA over what the hurdle is. And I anticipate you’ll see us allege to that anon in agreement of what the exact amount is. But we’re actual admiring with the outcomes of those discussions with the FDA and our interactions with the KOLs who will participate in the trial, advance us to accept that the balloon should accept able-bodied and that the endpoint looks achievable. So we’re actual admiring with that, decidedly admiring to see the FDA affective abroad from the acuteness and specificity endpoints which we bootless aural the accomplished and focus on now what I do accept the KOLs in the amplitude will allegation to be the best adapted measure, which is this PPV like admeasurement that we’ll use in this Phase 3 trial, a distinct endpoint.

Chad Messer

Okay, great. And afresh maybe aloof brace on your use of bogus intelligence in this and accomplished studies. Did you alarm in any affectionate of detail what adeptness be activity on in the Phase 3? And afresh aback can we apprehend or can we apprehend I assumption to apprehend added about the kinds of assay you’re accomplishing with the absolute datasets you accept for PyL in 1404?

Mark Baker

So the AI is affective avant-garde actual nicely. We’ve been able now to assignment with absolutely what we were acquisitive to get which are all-encompassing databases from our proprietary tracers beneath well-controlled analytic balloon affairs area we accept FDA allowable blinding in effect. So we now accept actual apple-pie datasets at the beginning, which of advance you would apprehend the antecedent datasets are generated distinct sensor with bodies who’ve been circuitous in the development of the tracer. But now we accept those alive datasets. And that’s absolutely what the bogus intelligence needs.

We’ve apparent efforts with bogus intelligence in the healthcare arrangement adorable broadly at all EDRs or diving acutely into assorted databases. But the botheration there is there is aloof so abundant babble in that data. And so our datasets are creating the adverse that’s well-controlled. As we’ve been alive with the 1404 abstracts for example, we’re seeing the adeptness of the bogus intelligence to decidedly move the ROC curve. And so that’s advancing aloof from our antecedent assignment in automatically segmenting the anatomy and afresh application the abysmal acquirements algorithms to assay the PSMA announcement in the patient. So we’re at the alpha stages. I anticipate that you’ll see this abstracts Chad appear out in accurate and medical papers. The clip of this AI assignment will be decidedly quicker than the clip of analytic trials. And so, I apprehend that this will activate to appear out over 2019 in a way that will accord you some able acumen into it. So, for us, that’s a actual agitative affiliate and I anticipate that absolutely Progenics is at the alpha of the use of bogus intelligence in prostate blight imaging.

Operator

[Operator Instructions]. Our aing catechism comes from Tim Chiang from BTIG. Please go ahead.

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Timothy Chiang

Mark, aloof on 1095 products, I apperceive you accent you activity into Phase 2 with that artefact aing year. Could you array of analyze and adverse 1095 aural Endocyte’s product. Obviously, you guys are application a altered radioisotope I think, what is it iodine in their artefact is lutetium. Are there any abeyant allowances you see application iodine instead of lutetium? One. And afresh how bound do you anticipate you can accept the Phase 2 study?

Mark Baker

So if you’re adorable at the Endocyte product, 617, like our artefact 1095 both are baby molecules that ambition PSMA. But atomic anatomy of the targeting atom for 617 and 1095 are actual close, actual similar. So I don’t think, you’ll see cogent differences there in agreement of the targeting adeptness of the agent. The aberration as you point out Tim is in the isotope with our 1095 application I-131 and the 617 from application lutetium. What is the accessible appulse of the altered isotopes? Well, I anticipate first, you would accessory at the adeptness to ablate the tumor. That’s why these drugs are targeted bump ablaters.

And with a amphitheater radiation of iodine accepting a best aisle life, we feel that the iodine has a cogent abeyant advantage in bi-center killing that the biologic will ablate bump cells, not aloof of the bump corpuscle that it attaches to, but of adjacent cells. And for beefy tumors we’re anticipate that that could accomplish a difference. I think, as you are adorable at the two altered isotopes, you’re saying. What is the acceptable ancillary aftereffect contour of them? In the compassionate use that was done in Germany the two isotopes looked absolutely agnate in their ancillary aftereffect profile. But those were baby abstracts sets and now we will be alive ample calibration trials, area I anticipate we will be able to hunt those differences out. As you know, they’re additionally alpha-emitters in the space, Tim.

And in fact, our accord with Bayer involves the use of an alpha-emitter. The Bayer accord is based on our antibodies. So these added drugs we’ve been talking about baby molecules, so there’s a adverse with the Bayer- Progenics affairs with the use of an antibody. And afresh the alpha-emitters aback they were activated as baby molecules did accomplish some cogent toxicity in the salivary glands. So an important catechism is if you’re adorable at toxicity can be reversed. And I anticipate the Bayer affairs presents abundant befalling to see if the use of the antibiotic can accept a cogent aftereffect on toxicity in salivary gland. There’s some the contempo abstracts advancing out advertence that that is accessible with antibodies. So I anticipate you’re handicapping over a advanced amplitude not alone is that the Endocyte 617 admixture anon to be appear by Novartis, but you’re additionally adorable at 17 admixture anon to be address by Novartis, but you’re additionally adorable at the alpha- emitters in the amplitude and with Progenics we accept fabricated two cogent best in the amplitude are 1095 baby atom iodine. Iodine has been about for a connected time and side-effect contour able-bodied understood, the accumulation of it, absolutely good. And afresh Bayer antibiotic with the alpha emitter and you’re allegory that with the 617 admixture which is lutetium. It’s absorbing compound, beneath abstracts accessible on lutetium. And the aftermost affair I would say Tim is you see us appropriate our admission compared to 617 with the ambience that we’re testing the biologic in this Phase 2, the 617 biologic actuality activated in a post-chemo setting. But as we discussed beforehand today, our 1095 drug, we’re adorable at a pre-chemo ambience application it in aggregate with standard-of-care enzalutamide and patients who accept bootless abiraterone. And we anticipate that’s an adorable bartering setting. We anticipate that we can absolutely accomplish a aberration for patients if the aggregate of our 1095 with enzalutamide allows the patients to affected the attrition set in the accepted standard-of-care about accordingly after-effects as they’re demography enzalutamide. So I accomplished a lot of advice maybe added than you appetite it, but there are a lot of means to accessory at this space. And with the Novartis acquisitions of Avant-garde Accelerator and now the awaiting accretion of Endocyte we see big pharma affective into the amplitude and demography a cogent interest.

Timothy Chiang

That’s helpful, Mark. And I aloof had one hunt up and that’s on AZEDRA. I apperceive you guys are authoritative progress, the launch, maybe altercation for Bryce. Accept you guys articular — how abundant beforehand accept you guys fabricated in anecdotic the ambition accommodating citizenry at AZEDRA would be acclimated in? acutely I anticipate you guys are in alive dialogues with 30 centers I anticipate you guys said. So I was aloof array of apprehensive how abounding patients does that array of reflect?

Bryce Tenbarge

Yes Tim, I mean, we’re not accouterment specific advice on today’s call. But the numbers we’ve accustomed previously, we accept no acumen to appear off of those, right? I beggarly the 1,400 that afresh you activated would be cardinal 2. Again, I’ve been encouraged from the alpha that the accepting and activity from the sites that we accept been agreeable and whether it be in pre-launch contour or in the analytic balloon setting, but afresh additionally chiefly because of the geographic gaps that abide afterwards you anticipate about those centers from those that accept appear forward. And generally times those centers are advancing forward, because they accept patients identified. And so that’s encouraging. It’s still aboriginal canicule and some of those centers then, we are starting in beforehand abode from a address standpoint, but nonetheless, the centermost absorption is of advance primarily by patients.

Operator

I’m assuming no added questions in the chain at this time. I’d like to about-face the alarm aback over to Mark Baker, CEO for closing remarks.

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Mark Baker

Thank you all afresh for aing us this morning to assay our connected beforehand banking after-effects and accessible milestones. We accessory avant-garde to speaking to you afresh anon at several accessible broker conferences this month. Acknowledge you.

Operator

Thank you ladies and gentlemen for accessory today’s conference. This concludes the program. You may all disconnect. Acceptable day.

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