Mirati Therapeutics, Inc. (NASDAQ:MRTX) Q1 2023 Earnings Call Transcript May 9, 2023

Operator: Good afternoon, and welcome to the Mirati Therapeutics First Quarter 2023 Earnings Call. My name is Justin, and I will be the operator for today’s call. 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 David Meek, our Chief Executive Officer; Dr. Chuck Baum, our President, Founder and Head of Research and Development; 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. Before we begin, I would 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 U.S. Securities and Exchange Commission.

This afternoon, we released financial results for the quarter ended March 31, 2023 and recent corporate updates. This press release is available on the Investors section of our website at mirati.com. With that, David, I’ll turn the call over to you.

David Meek: Thank you, Ryan, and thank you all for joining us on the call today. On this afternoon’s call, I will provide initial remarks before turning the call over to Ben, Alan, Jamie and Laurie to provide updates I’ll then provide some closing remarks before we open the line for questions. I’m pleased to report that 2023 is off to a great start. I’ll touch on the key highlights from the first quarter, starting with the KRAZATI launch performance. We are delighted to see the rapid acceptance of KRAZATI, which was driven by KRAZATI’s differentiated profile and our highly experienced lung cancer commercial team. We also began enrolling patients in a clinical study for MRTX1133, our highly selective and potent oral KRASG12D inhibitor.

Our MTA cooperative PRMT5 inhibitor and our KRAS enabling SOS1 inhibitor continued to move in a positive direction. In addition, we expect to communicate the top-line outcome of the Phase 3 SAPPHIRE study this quarter, a positive result would be a transformational milestone for Mirati. Furthermore, in this quarter, we continue to employ a data-driven approach to capital deployment and remained fiscally vigilant and continue to explore ex-U.S. partnerships as a source of capital and risk sharing and as a means of further strengthening our balance sheet. We continue to be optimistic and very excited about the future of Mirati. The full potential of KRAZATI, combined with our innovative pipeline represents an opportunity to help hundreds of thousands of people in need and create substantial value in the process.

I’ll now turn the call over to Ben, who will provide an update on our KRAZATI launch. Ben?

Ben Hickey: Thank you, David, and good afternoon, everyone. We’re very pleased with the strong launch performance of KRAZATI in the first quarter following FDA approval in mid-December. Our prelaunch preparations are clearly paying off. In our first quarter, full quarter of launch, KRAZATI generated $6.3 million of net revenue. Our experienced long-focused field force achieved strong access to prescribers in both the academic and community setting. We estimate that KRAZATI achieved approximately one-third share of new KRASG12C patients, highlighting the rapid and broad adoption across both the academic and community settings. As of the end of the first quarter, we had reached over 90% of all target accounts, which constitute approximately 95% of the market potential.

In addition, KRAZATI is already being prescribed in 80% of the top 50 accounts. The first quarter sales included a modest bolus of patients early in the quarter, some of whom have transitioned from treatment on another KRASG12C inhibitor and some more heavily pretreated late-line patients. The majority of our patients were second-line patients who are naïve to treatment in the KRASG12C class. Reimbursement, access and coverage perspective, we are pleased with our rapid progress of the access team has achieved broad unrestricted coverage with minimal access barriers for patients. Similar to physician feedback, payer feedback has been positive based on the clinical value of KRAZATI. Additionally, our patient services have been well received with patients able to obtain drug in less than one week of an oncologist prescription, which is significantly ahead of analogs closer to two weeks.

KRAZATI was also included in the National Comprehensive Center Network or NCCN guidelines within one week of approval, aiding coverage and reimbursement decisions, particularly with Medicare patients. Feedback from oncologists, office staff and importantly, patients has been extremely positive. Importantly, for those oncologists who are familiar with KRAZATI intend to prescribe is approximately 90%. Looking ahead, we believe that significant opportunity remains to grow our market share in a second-line setting by increasing the growth of our prescribing base, increasing depth of use and expanding the addressable market. We will accomplish this by focusing on attributes that differentiate KRAZATI and by accelerating market development. Our key messages centered around a 44% response rate, 14.1 months of median overall survival and low treatment-related discontinuation rates are resonating well.

Additionally, data showing KRAZATI’s activity in patients with central nervous system metastasis has been favorably received by physicians who recognize the importance of the approximately 40% of patients known to have CNS metastases. KRAZATI was recently added to the NCCN guidelines for patients with CNS mets, the only KRASG12C inhibitor, which received this designation, further highlighting the differentiated profile of KRAZATI. From a market development perspective, we believe there is significant opportunities to expand the second-line KRASG12C non-small cell lung cancer market. Our team continues to focus on increasing both testing and identification of KRASG12C eligible patients, particularly in the community setting. We now estimate that the KRASG12C testing rate that time of lung cancer diagnosis is approximately 70%.

Testing rigs for other targeted therapies such as EGFR and ALK mutations are closer to 85%, so there is a significant opportunity to grow the market and meaningful opportunities to better identify patients with a KRASG12C mutation at the local account level, where we’ve established partnerships with community oncology providers. We expect the G12C market to grow at a robust rate in 2023. In summary, we believe that the important differentiating clinical characteristics as KRAZATI combined with an experienced and focused commercialization organization position KRAZATI to ultimately become the market-leading KRASG12C inhibitor. I’ll now turn the call over to Alan for an update on our clinical activities. Alan?

Alan Sandler: Thank you, Ben. Hello, everyone. I’ll begin by discussing adagrasib, starting with first-line non-small cell lung cancer, where we expect to share key updates across our multipronged development approach in the second half of this year. Our most advanced adagrasib combination approach in first-line non-small cell lung cancer is the compared dosing of adagrasib with pembrolizumab in our Phase 2 KRYSTAL-7 study. our update in the second half of 2023 will include a first look and durability measures, such as duration of response and landmark PFS analysis stratified by TPS score. In the meantime, we are preparing for Phase 3 studies by laying the administrative groundwork, and this will enable us to quickly begin enrollment of patients this year if the data are supportive.

Given the tolerability profile of the doublet combination of adagrasib plus pembrolizumab, we initiated a Phase 2 study called KRYSTAL-17, evaluating adagrasib in combination with the KEYNOTE-189 regimen of carboplatin, pemetrexed and pembrolizumab. The initial focus of this study is on the safety and tolerability of this combination. I’ll now touch on adagrasib in second-line non-small cell lung cancer. Discussions with the European Medicines Agency are advancing well on their review of adagrasib’s marketing authorization application. We anticipate potential approval in the third quarter, KRYSTAL-12, our confirmatory Phase 3 study is enrolling well. We expect to share progression-free survival data in 2024, which will be the basis of our regulatory filing for full approval.

In colorectal cancer, we have several important upcoming milestones, adagrasib in combination with cetuximab has shown a compelling and differentiated profile, and our registrational strategy represents a fast-to-market opportunity. Based on dialogue with the FDA, we are pursuing an accelerated approval pathway for this combination in third-line or later colorectal cancer. We are on track to submit the supplemental New Drug Application in the fourth quarter of this year. Our KRYSTAL-10 Phase 3 registrational study in second-line colorectal cancer patients, evaluating the same combination of adagrasib plus cetuximab versus chemotherapy continues to enroll well, especially following the recent New England Journal of Medicine publication and Breakthrough Therapy Designation granted in December of last year.

We expect to achieve full enrollment of KRYSTAL-10 by year-end 2023, and we anticipate reporting the final analysis of progression-free survival and interim overall survival in 2024 with plans for regulatory submission based on these results. We believe that adagrasib plus cetuximab combination can potentially offer a substantial improvement compared to the current standard of care in the second-line setting. Based on real-world and retrospective data in patients with KRASG12C mutated colorectal cancer in the second-line, we estimate that the median progression-free survival is less than five months, and median overall survival is less than 10 months on the current standard of care in this setting. In addition, we presented compelling updated data in the largest Phase 2 data set, evaluating KRASG12C tumors beyond non-small cell lung cancer and colorectal cancer at the ASCO Virtual Plenary Series in April of this year.

In the study, adagrasib demonstrated clinically meaningful activity in a variety of KRASG12C mutated solid tumors, including pancreatic cancer, for which no standard of care treatment options currently exist. Based on these compelling results, adagrasib was added to NCCN guidelines last week for KRASG12C mutation-positive pancreatic cancer patients. This is in addition to the inclusion that was previously granted for patients with second-line non-small cell lung cancer with CNS metastases. We’ll continue to explore potential accelerated regulatory approval pathways in these patient subpopulations, and we expect to gain clarity on our approach later this year. Finally, I’ll briefly touch on sitravatinib, which is being studied in a registrational Phase 3 study called SAPPHIRE.

SAPPHIRE is on track for a top line final analysis for overall survival this quarter. While we remain blinded to the ongoing study, we believe it was sufficiently powered to demonstrate both statistically significant and clinically meaningful outcomes. With that, I’ll turn the call over to Jamie for an update on our earlier-stage development pipeline.

Q&A Session

Jamie Christensen: Thank you, Alan. Today, I’ll cover progress on our early clinical development pipeline, including MRTX1133, MRTX1719 and MRTX0902. I’ll begin with MRTX1133, our potent, selective and potentially first-in-class oral G12D inhibitor, which targets both the active and inactive states of the G12D-mutant protein. The KRASG12D mutation is predominantly associated with poor outcomes on standard of care therapy and several types of cancer. We estimate that there is an annual incidence of approximately 125,000 patients across lines of therapy with KRASG12D mutations in the U.S. and Europe. Positive attributes of 1133 includes subnanomolar potency in tumor cells, high plasma free fraction, long target residence time and a long plasma half-life.

These attributes are consistent with a low target plasma threshold for maximal target inhibition for the full duration of the dose interval and have increased our confidence in the successful development path for MRTX1133. As David mentioned, we initiated the Phase 1/2 study, which is designed to evaluate the safety, PK, PD and antitumor activity of MRTX1133 in patients with advanced solid tumors that harbor a KRASG12D mutation. The study began enrolling patients in March. Overall, MRTX1133 has the potential to provide a transformative treatment option for the large and underserved KRASG12D patient population. Now moving on to MRTX1719, our potentially best-in-class MTA cooperative PRMT5 inhibitor. MRTX1719 is enrolling in a Phase 1/2 clinical study for patients with tumors harboring and MTAP gene deletion.

MTAP gene deletions occurred in approximately 10% of all human cancers. We estimate that there’s an annual incidence of greater than 200,000 patients across lines of therapy in the U.S. and Europe. The potential to make the significant difference in treatment outcomes for these patients with high unmet medical needs may enable a rapid development path. MRTX1719 selectively binds to the PRMT5 MTA complex, which is uniquely present only in tumors harboring MTAP gene deletions. This results in extensive selectivity for MTAP-deleted tumor cells compared with normal cells. The wide therapeutic index and ability to safely achieve near complete target inhibition with 1719 provides a clearly differentiated therapeutic modality compared with non-selective PRMT5 inhibitors, which were limited by mechanism-based bone marrow and systemic toxicities.

Finally, the greater than 70 fold select selectivity of 1719 is potentially the highest selectivity ratio for MTAP-deleted cells relative to other reported PRMT5 MTA complex inhibitors. Our early clinical experience in the Phase 1 study has been encouraging, 1719 continues in dose escalation and current dose levels are achieving consistent PK properties and plasma exposures, which now well exceed levels to predicted to demonstrate durable and near complete inhibition of PRMT5and MTAP-deleted tumors. All based on our preclinical modeling. At the present dose levels and predicted therapeutic plasma exposures, we are now observing, we are not observing any dose limiting toxicities including mechanism-based dose limiting toxicities consistently reported from non-selective PRMT5 inhibitors.

We look forward to sharing initial clinical data in the second half of this year, including safety and potential early signals clinical activity. Finally, our Phase 1 study for MRTX0902, our potential first-in-class SOS1 inhibitor continues to enroll. Well, this agent has the potential to be synergistic with KRASG12C, KRASG12D and EEGFR inhibitors. This is an excellent example of our strategy to maximize the value of our KRAS portfolio by pursuing a broad range of KRAS targeting strategies and indications. We’re on track to initiate dose escalation cohorts combining 0902 and adagrasib in our ongoing Phase 1/2 clinical study in the second half of this year. Overall, we’re pleased with the significant progress we’ve made across our portfolio this quarter and look forward to providing additional updates in the near future.

With that, I’ll turn the call over to Laurie for our financial update.

Laurie Stelzer: Thank you, Jamie. I will begin by walking through our income statement and touching on a few other key financial metrics. Please see our press release from earlier this afternoon for additional details about our first quarter 2023 financial results. Revenue for the first quarter of 2023 was $7.2 million, which was driven by $6.3 million of KRAZATI sales and $0.9 million of license and collaboration revenues. This compares to revenue of $0.7 million for the first quarter of 2022, which consisted solely of license and collaboration revenues. The gross to net discount in the first quarter was in line with other similar small molecule oncology therapies and our expected steady state rate moving forward in the range of 20% to 25%.

However, this may fluctuate from quarter-to-quarter. Cost of product revenue for the first quarter of 2023 was $0.6 million. A substantial portion of the inventory sold during the first quarter were manufactured prior to the FDA approval, and therefore were expensed to research and development prior to 2023. Research and development expenses for the first quarter of 2023 were $126.7 million compared to $131 million for the same period in 2022. The decrease was primarily driven by a reduction in clinical development costs for sitravatinib as we completed enrollment in the SAPPHIRE Phase 3 clinical trial in the second quarter of 2022, and lower clinical manufacturing costs to support ongoing clinical trials for adagrasib. These decreases were partially offset by increases in our earlier stage clinical development programs such as MRTX1133 and an increase in salaries and the other employee related expenses to support the advancement of our portfolio.

Selling, general and administrative expenses for the first quarter of 2023 were $73.5 million compared to $54 million for the same period in 2022. The increase was primarily due to an increase in headcount related costs including share based compensation and salaries and commercial related costs to support the marketing and sales of KRAZATI. Net loss for the first quarter of 2023 was $184.6 million or $3.18 per share, basic and diluted compared to a net loss of $188.4 million or $3.40 per share, basic and diluted for the same period in 2022. We ended the first quarter with approximately $900 million in cash, cash equivalents and short term investments. Net cash burn was $181.5 million in the first quarter, and the first quarter will be our highest cash burn quarter of the year.

Drivers of the higher net cash burn in the first quarter include the 2022 bonus payment, a milestone payment to Pfizer, and timing of vendor payments associated with accrued expenses. We’ve recognize that a discipline data-driven approach to capital deployment is critical as we advance our pipeline, invest in innovation and effectively launch products to drive sustainable long-term growth. We have focused our investments on our highest priority opportunities, those that have the greatest potential to benefit patients, create value and drive shareholder return. We expect our 2023 net cash burn to annualize within a range of $525 million to $580 million. Our current cash runway is into 2025. And with that, I’ll turn the call back to David for closing remarks.

David Meek: Thank you, Laurie. As you’ve heard, there is an abundance of positive activity and opportunity for Mirati in the near term and beyond. Much of our confidence centers around our belief that KRAZATI is the best-in-class KRASG12C inhibitor, and as the potential to address a $1 billion plus market opportunity across multiple lines of therapy and tumor types, both as a monotherapy and in combinations. We’re also proud of the quality of the commercial organization we have assembled. It gives us confidence that KRAZATI and any future products will be well represented in the marketplace. We also continue to make meaningful progress advancing our broad and differentiated pipeline of targeted oncology programs. In closing, I will reiterate an important point I made earlier.

Our clinical pipeline is deep and as the potential to address unmet medical need for hundreds of thousands of people living with cancer, and that motivates us to succeed each and every day. On behalf of all of us at Mirati, we thank you for your continued support and interest in the company. And with that, Justin, we are ready to open the call for questions. Please proceed.

Operator: Thank you. And the first will come from Michael Schmidt with Guggenheim.

Michael Schmidt: Hey guys, thanks for taking my questions. I had one perhaps for Jamie on the updated KRYSTAL-7 data that we’ll get in a second half of this year on the first line non-cancer combination study, and just help us understand how potential outcomes here will influence your Phase 3 plans. Is it simply a powering question or are there any other considerations as to how the data might inform next steps? And then the other question was really on, where you are with any potential pursuits of monotherapy in first line non-small cell lung cancer. Is that still on the table at this point? Thanks so much.

Jamie Christensen: Sure. Thanks, Michael. I know you directed that question to me, but Alan’s going to be handling the adagrasib related questions today.

Alan Sandler: Great. Thank you for the question. So the data, again will be looking at the data and having that data available the second half of this year. The data will be able to help guide us toward a data driven approach in frontline, which, as you know encompasses different types of patients. The greater than 50%, the less than 50%, which is also divided into the less than one and 1% to 49%. So, evaluating all that data in K7, which is predominantly the doublet combination of adagrasib and pembrolizumab will provide us with information to guide that. And also there is a monotherapy group for that monotherapy adagrasib that we’re looking at in the less than 1%, and we’ll have updates on that as well the second half of the year. So all of this will help guide us toward an informed decision making process at that time.

Operator: And our next question will come from Salveen Richter with Goldman Sachs.

Unidentified Analyst: Hey, thanks. This is Matt on for Salveen. Just a few on the KRAZATI launch. First, what kind of share do you think is likely by the end of the year and do you know what was driving the switches from LUMAKRAS? And then finally just given the stronger than expected quarter, are you still expecting a linear trajectory for sales? Thank you.

David Meek: Sure. We’ll have Ben address those questions.

Ben Hickey: Sure. So as a, as we said in my prepared remarks, we saw about a third of new patients starting on KRAZATI, and keep in mind that that’s new patients, which only constitutes about 10% of patients at any one time but is really the, the mark for what you could expect to see in the future. So we are very excited about the growth to date there. In regards to some of the switches, which came from LUMAKRAS, the two most common reasons around that were where physicians had seen some hepatoxicity and we’re looking to switch as well as we had some reports of physicians moving patients, again from the other G12C inhibitor where there was a CNS met present. Again, we estimate that at around 20% of our Q1 volume, but we’re still, getting a better hold on that as we move forward.

And then in regards to growth moving forward, yes, we have kind of guided to that linear type adoption. We think that because the testing rate is still beginning to increase or still increasing as well as this patient identification is increasing too, that we do think more of a linear adoption for the patients in play will occur. And ultimately we believe we will be the, the market leading KRAS, we are not directing at which particular time, but we are confident that, we’ll get there.

Operator: And our next question will come from Tyler Van Buren with TD Cowen.

Tyler Van Buren: Hey guys. Thanks for taking the question and congratulations on all the progress encouraging comments on the KRAZATI launch. Wanted to ask on KRASG12D or MRTX1133, can you tell us if the early bioavailability or and pharmacokinetic data in the early patients being treated as looking as expected based upon what was anticipated from the preclinical data?

David Meek: Hi, Tyler will have Jamie will take that obviously.

Jamie Christensen: Sure, Tyler. Yes, I think, so far, there’s been a lot of enthusiasm among investigators to open the trial. So the patients have been readily available and quite interested and the study’s enrolling well, so far our experience has been good. But it is our plan to really provide a fulsome update at a later time, likely in 2024 to cover all of the PK tolerability and early sense of clinical activity in context. So that’s our plan currently.

Tyler Van Buren: Okay. And just for a follow up for that update on the first half of 2024, is the plan to hopefully reach a recommended Phase 2 dose by then?

Jamie Christensen: Yes, it would be our goal to have a recommended Phase 2 dose, at some point this year, and then be able to present data related to the recommended Phase 2 dose in the 2024 timeframe.

Operator: And our next question will come from Gena Wang with Barclays.

Gena Wang: I have two questions. The first one, just want to confirm, when you said 20%, I wanted to make sure that’s the Brainlab patient out of all the patient you treated, including both the new patient, a naive patient, and also experienced patient with G12C. And my second question is also regarding the G12D just wondering how many dose levels have you already explored? Is 500 milligrams due a good asthma for optimal therapeutic window and also what kind of cancer type enrolled the quickest?

David Meek: So Gena well Ben first and then Jamie will take the G12D question.

Ben Hickey: So thanks for the question, Gena. Yes, the characterization of approximately the 20% was inclusive of both late line patients as well as those with CNS met. So it’s a kind of a composite across those again, we’ll get better color in the next couple of months for maybe an update towards the middle of the year, but 20% is more an all-encompassing of those different sources.

Jamie Christensen: Sure. And then, yes, and on the G12D question, it’s early days in the trial. We are in dose escalation. We haven’t guided to what escalation cohort we’re currently in, but again, the study’s making good progress. PK predictions we’ve done for 1133 and do believe a modest dose level, at or below 500 milligrams on a daily basis could be approaching the level of therapeutic exposure. So we continue to monitor the study. It’s an open label study. And again, as soon as the data looks like we have a reasonably sized data package, we would be updating likely in the 2024 timeframe.

Operator: And our next question will come from Jonathan Miller with Evercore ISI.

Jonathan Miller: Hi guys. Thanks very much for taking my question. I’d also like to follow up on G12D that first half next year update. I just want to get the sense that we’ll have a meaningful amount of data at that RP2D you know, would you expect to be able to give reasonable estimates of ORR at that point, for instance? And secondly on formulation. I know originally this was expected to be IV. Could you give a little bit of color on how this has evolved and what’s giving you confidence that you’re going to get the PD, you need from an oral formulation?

David Meek: Yes, Jonathan, it’s David and, I’ll pass on to Jamie in a second and appreciate all the questions coming in around KRASG12D. The enthusiasm is there, and we’re very enthusiastic about the program as well, but just want to let everybody know we’re not going to do piecemeal data with G12D. We’re going to come out with the fulsome data package when it’s ready. I’ll pass it on to Jamie now.

Jamie Christensen: Yes. And I think just to build out David’s comment, of course, it is our goal to reach a recommended Phase 2 dose, but we want to make sure we get it right. So we will be exploring dose schedule and formulation in our clinical trial. So that is, I think, the first part of the question. The second part is related to formulations. So we have been developing multiple formulations in the preclinical setting. We have identified a formulation that we believe will achieve the therapeutic exposure and has given us a lot of confidence in the ability to reach those therapeutic exposures via oral administration. In the preclinical setting, we have identified formulations that have increased the AUC or oral exposure by up to tenfold or greater.

We have seen evidence of bioavailability in preclinical studies at or exceeding 10%. And when you couple that with growth threshold to hit the target with regard to systemic exposure, and concentration has really given us the confidence that we can reach the goal with this particular oral formulation. Of course, we’ll be continuing to manage this program throughout its life cycle, and we’ll be exploring a number of ways to administer the drug, including continued work with the IV. But here, we would like to ensure the oral has full opportunity and maybe important with regard to maximizing target coverage for the full dose interval, which we believe is important for KRAS inhibitors.

Operator: And moving on to Mike Ulz with Morgan Stanley.

Mike Ulz: Hey guys. Thanks for taking the question. Maybe just another one on KRAZATI. Just curious, since the launch back in December, if you’ve noticed an inflection in testing for KRASG12C, or is the sort of rate of increase been steady since the launch? Thanks.

David Meek: Ben will take that.

Ben Hickey: Sure, it’s Ben. I’ll take that. The testing right now is in the low 70s. And keep in mind that, that’s in frontline or a diagnosis and we continue to see some improvement in regards to patient identification. That’s where we’re really spending a lot of time and effort because, again, even if you’ve got those 70% of patients in frontline being tested. Unfortunately, still a number of those records are not immediately available to the physician, so we’ve developed a number of local community oncology working plans as well as have some partnerships in place to make sure that we’re helping physicians identify those patients. So again, we think the market is really, it’s really a nascent market and has done a great deal to room to grow, both on the testing front as well as from a patient identification standpoint.

David Meek: And with that, as Ben discussed earlier, 20% growth in volume in the marketplace as well. So still significant upside in this marketplace.

Mike Ulz: Got it. Thanks.

Operator: And our next question will come from Ben Burnett with Stifel.

Ben Burnett: Hi, great. Thank you. I actually had a question about the basket study about KRAZATI that you spoke about earlier. Looks like you’re seeing results across a variety of tumor types. Is there a tumor-agnostic regulatory path for adagrasib with the FDA? Or do you see a path for the various treatment guidelines to recognize out of adagrasib in addition to the pancreatic cancer update that you mentioned?

David Meek: Sure, Ben. Alan is going to take that.

Alan Sandler: Thanks for the question. So it’s an important one and one that we are in communication with the FDA, and we’ll be discussing that with this year there. As you’ve mentioned, they are actually different, two different approaches that can be taken. We’re looking toward a tumor-agnostic approach, and we’ll have discussions with that. There also is that backup plan, as you mentioned, of having individual – potential individual indications with say, pancreatic cancer and potentially Cholangiocarcinoma, two of the diseases that had some of the higher response rates.

David Meek: So we should be able to give you an update on that later this year, on the regulatory path forward there.

Ben Burnett: Okay. That’s great. And if I could also ask just a follow-up question on the PRMT5 program, MRTX1719. I think I believe you mentioned that you’re not seeing DLTs at this point. I was just wondering if you could just maybe give us a sense of where you are in that dose escalation schema relative to where you’d expect to see activity based on preclinical work.

David Meek: Yes. I’ll put that over to Jamie in a second. I’ll caveat that with what we said about our G12D program as well. We’re excited about 1719. We’re not going to release piecemeal data. We will have a fulsome data update. The plan is for later this year to have this update on 1719. And with that, I’ll pass it over to Jamie.

Jamie Christensen: Sure. Yes. I think we’ve been able to make very nice progress in the program. Again, the investigators, I think, are increasingly enthusiastic and are looking for these patients. And we’ve been able to enroll rapidly through the dose escalation cohorts and now are several dose escalation cohorts. And as mentioned, dose-limiting toxicities have not limited our ability to continue to escalate at this time. So now there are kind of key questions about looking at early signs of clinical activity and tumor pharmacodynamics as a way to guide our selection of dose. And having said that, we are at a point when we have taken our preclinical data, looked at what the target therapeutic exposures would be and do believe that we are now at dose levels that will cover those targets. So I’d say good progress to date, and we’ll look forward to being able to talk about them later this year.

Operator: And we have a question from Jason Gerberry with Bank of America.

Unidentified Analyst: Hey guys. This is Chi on for Jason. Thanks for taking our questions. I’m wondering if you can quantify the number of patients that were treated in KRAZATI. And I think you said one-third, I think KRAZATI had one-third of the new shares – of the new patient share. Your competitors used to like provide some level of numbers on sort of new patient numbers. I’m hoping if you can quantify that part as well. That would be helpful. Thank you.

David Meek: I’ll pass it on to Ben.

Ben Hickey: Yes. We tended to guide right at this stage around the accounts because we think that’s a more robust data set. We see that within some of the patient physician numbers a little bit volatile, particularly in the launch window so could consider that in the future. What we have been really happy about has been the field team’s execution and, again, been able to actually access and promote to 90% of key accounts and then actually be adopted and written in 80% of the top 50. So again, very happy with where we are today, great execution, not only from a field sales standpoint, but very strong access as well. And we can consider kind of opening up and talking about additional data measures in the future.

David Meek: Yes. And we’re really pleased with the momentum in the one-third new patient starts, the KRASG12C inhibitor class already.

Operator: And moving on to Maury Raycroft with Jefferies.

Maury Raycroft: Hi, congrats on the update. Thanks for taking my question. I was just wondering if you can share additional perspective on how KRAZATI is being prescribed in relation to prior anti-PD-1 use, including timing between the prior pembro treatment. And for those patients that switched from LUMAKRAS with hepatotox or the patients with the CNS mets, how are they doing on KRAZATI, any perspective from real-world observations there?

David Meek: Absolutely. Ben?

Ben Hickey: Yes. So thanks for the question. We have seen and heard anecdotally that one of the benefits of KRAZATI is the ability to write it in close sequence to the prior IO therapy because we have not seen, as we’ve displayed with some of our first-line combination data, we’ve seen a very tolerable profile from a hepatoxicity standpoint. So that has something – that is something that’s come up multiple times, particularly in the academic setting. And as a reminder, actually, with our 012 study, we’ve actually, we’re not requiring actually that a washout period there because we think we have advantages from a profile standpoint. In relation to the patients, which have been switched due to either hepatoxapy or CNS mets, it’s just a little bit too early to get a strong sense of that.

We will be following up with physicians who have these anecdotal case studies and be considering that for publication purposes in the future but very early from this standpoint to really have a clear sense on how they’re doing.

Operator: And we have a question from Silvan Tuerkcan with JMP Securities.

Silvan Tuerkcan: Yes, thank you. Congrats on the update and thank you for taking my question. And just regarding the update in frontline non-small cell lung cancer that we are anticipating for the second half of the year, could you tell us a little bit about, I understand how we have the doublet in the TPS scores patient populations here? But without having data with the chemo pembro so the triplet, how can we make a decision in the frontline? If you could just talk a little bit about the options that you’re seeing here. Thank you very much.

David Meek: Alan?

Alan Sandler: Thanks for the question. So with K7, of course, we’ll have the update moving forward, which is predominantly with the doublet, which is in patients across all of the cohorts, the greater than 50% and less than 50% as well. And we’ll be waiting for the data update on that, although you will recall, we did have some encouraging debt in the greater than 50% at small IO. In addition, what we’re doing is we have a study that has started that has activated and is ongoing now, K17, which essentially looks to add adagrasib to the KEYNOTE-189 regimen. So that’s the four drug regimen. We’re looking at that as well as an opportunity in the less than 50%. Upon review of the data for K7 and second half of this year and then also some of the data that has emerged with K17 the latter part of this year which is predominantly a safety evaluation, we’ll be able to look at the totality of the data and be able to make an informed decision as to what direction to move forward and into which cohort utilizing the best approach.

Operator: And we have a question from Eric Joseph with JPMorgan.

Eric Joseph: Hi, good evening. Thanks for taking the question. So and thanks for the color on the launch so far. I’m wondering if any – there’s any inventory build that’s contributing to the first quarter print. And you also laid out gross to net expectations in the range of 20% to 25%. I guess how should we be thinking about the fluctuation sequentially here in the second quarter? And then on 1719, if I could, I guess, just given the breadth of addressable tumor types with this mechanism, any particular bias or concentration of tumor histology so far in the dose escalation phase of the Phase 1 trial? Thanks.

David Meek: Laurie will take the first part, then Jamie will take the second.

Laurie Stelzer: Yes. So for inventory, we have seen out of the $6.3 million in sales, just a modest amount of inventory. Based on our model, our specialty distributor and pharmacy model, we don’t see – we don’t expect large inventory build. On the discount rate, 20% to 25%, that’s in line with our expectations as we kind of move through the year. We will see fluctuations quarter-to-quarter, especially given kind of the early days of launch. But that range is kind of where we expect it to be. It’s in line with other oral oncology products, and we expect that to hold for the year.

Jamie Christensen: Yes. And I think on the 1719 front, first, your question about the different types of tumors. We’ve seen a broad spectrum of different tumors enroll on our Phase 1 escalation. So I think we have a lot of different representative tumor types with MTAP gene deletions. I will say that a number of our sites we have thoracic oncologists, for example, is the PI. And in other cases, we have good involvement for GI units or otherwise. So we do believe based on both our preclinical data in terms of seeing responses in the preclinical models as well as the frequency of MTAP gene deletion in different tumor types. There may be certain settings like non-small cell lung cancer, both adenocarcinoma and squamous cell, pancreatic ductal adenocarcinoma, smaller indications like mesothelioma, where we would expect both strong monotherapy activity as well as a reasonable frequency of these mutations, that if we see the requisite response rate, it’s possible to develop this drug as a monotherapy and somewhat of an accelerated that using response as a primary endpoint, and that’s driven the design of our clinical trial as well as the selection of our investigators.

Operator: And we’ll take a question from Yigal Nochomovitz with Citi.

Yigal Nochomovitz: Hi thanks for taking the questions. Ben, just a few more for you on the launch. Could you comment on the split between the academic and community uptake of KRAZATI, and then I think you made a comment regarding the 10 to prescribe being 90%? Could you comment on the conversion rate for the intent to prescribe there? And then third, with respect to the discontinuation rate, how is that comparing in the commercial setting versus what you’ve seen in the clinical experience? Thank you.

Ben Hickey: Sure. I’ll start with the academic community split. It’s actually been a bit more weighted to the academic it’s about 60-40 in the first quarter, which is encouraging because obviously, you have your thought leaders in the academic setting. So it’s great that we’ve seen such strong adoption across the academia. We do expect the community to follow, and that’s been a big focus of our sales force efforts, so over time, expect that to constitute closer to 70% to 80% of the mix longer term. In relation to intent to prescribe, yes, that’s part of a survey that we conducted in the first quarter and in relation to those physicians who are familiar with the profile and may or may not have written KRAZATI. And for those that stated that their intent to write the product in the future, it’s around 90%.

So that’s just a very positive indicator every intent. I don’t have the exact conversion rate of what that looks like. But again, from a survey standpoint a very strong indicator of intent there. The third part of the question was – just remind – oh, yes, on the discontinuation rate. We’re not seeing anything unusual here. It’s very early to really comment more broadly than that, but no surprises here as we’re beginning to see refill rates come through. Again, obviously, the first quarter of our performance is very early. We only launched the product in late December, mid- to late December. So very early to comment on that, but we’re not seeing anything out of that being usual from that standpoint.

Operator: And we’ll take a question from Evan Seigerman with BMO Capital Markets.

Unidentified Analyst: Hi guys, this is on for Evan. We wanted to ask how do you think about the second-line and third-line colorectal markets for anagrassib in relative size to the non-small cell lung? And are there any synergies you would be able to leverage with the non-small cell sales teams when entering those markets? Thanks.

David Meek: Yes. Well, Ben will take that.

Ben Hickey: Sure. Colorectal in addition to pancreas cancer are really important indications for us, because it really shows the breadth of the efficacy that’s possible with KRAZATI and that’s particularly important in the community where the vast majority of prescribers are actually writing across therapeutic areas and across tumor types, which is very important. In regards to the numbers, there’s about 3,000 patients with the CLC from second-line and beyond, and we think we have an opportunity there. And then in addition, there’s a couple of thousand in relation to pancreas and other indications as well. So not only are the numbers and our ability to help these patients who really are in dire have a dire unmet need, but we think it’s really supportive of the overall profile of KRAZATI.

And from a synergy standpoint, we’ve built the infrastructure we need. We don’t need to add to that. We’ve got a super experienced, energized field force, and they would be able to cover off those colorectal targets as well. So yes, excited about the opportunity there and more to come on that.

Operator: And we have a question from Kalpit Patel with B. Riley Securities.

Andy Fleszar: This is Andy Fleszar on for Kalpit. Thank you for taking the question. A couple from us regarding the potential time lines for publications. First, you presented some unpublished clinical outcomes in frontline non-small cell lung cancer from the Dana-Farber Cancer Institute in December, when should we expect these data to be published? And how many centers and patients worth of data are we expecting? And then second, are there any time lines surrounding when we could see a preclinical publication showing data with the oral formulation of the G12D inhibitor that you discussed a bit earlier?

Jamie Christensen: Yes. I think regarding the clinical outcomes on frontline, some of that data has been published the manuscript from Dana-Farber is out there. There’s another manuscript that is going to follow from Memorial Sloan-Kettering, and MD Anderson is working on this as well. So we do anticipate additional color being out there in the public domain. In addition to the academic center, institutional experience, which often covers both clinical trials and patients that enroll on a given regimen within the institution. We’ve been working with large providers like Tempus , where additional data is has been put together, and we do plan on disclosing that in collaboration with that organization at some point. And just as a reminder, I think overall, when you look at the outcomes in the less than 50% population in the KRASG12C subset, there is likely a strong unmet medical need there.

Regarding the G12D, I think our forward-looking publication strategy will likely be linked to tying any preclinical data in with clinical data. So, I think, again, we’ll be looking at the updates for 1133 likely being in the 2024 and 2025 time frame.

Operator: And our next question will come from Jay Olson with Oppenheimer.

Jay Olson: Hey guys, congrats on all the progress. And thank you for taking our questions. There have been a few recent data presentations on emerging KRASG12C inhibitors at AACR and other conferences. Can you talk about the key points of differentiation across the G12C landscape? And how do you expect the field to evolve? And then I had a follow-up on PRMT5, if I could? Thank you.

Jamie Christensen: Sure. Yes, I think on the G12C front, of course, we monitor that space closely and are looking at the competitors. I think there are a number of points for adagrasib where we do believe that there are some positive attributes that we can leverage. One of those is kind of the long half-life in the BID schedule where we have very little peak to draw variation. And I think that comes in 2 places. One is the ability to really hit the target hard for the vast majority, if not the full dose interval and then to avoid high peak concentrations. The second place where that particular aspect comes in is if we can avoid peak concentrations I do believe that the hepatotoxicity observed has been associated with facilitating an immune response due to off-target immunogenic captives and the ability to have a fairly flat profile may help us have a cleaner profile when it comes to this hepatotoxicity immune-related toxicity issue, another attribute of adagrasib that also helps the therapeutic index, especially when it relates to immune-related AEs is the fact that this drug has a favorable KI ratio, it has good non-covalent binding affinity, and we’ve been able to dial the reactivity down to the point where I don’t think we’re going to run into off-target immunogenic haptens as a driver of therapeutic index.

We do believe that we maybe have a best-in-class profile with regard to brain penetrants, and Ben had covered that in his presentation, where we do believe that this is another area we can leverage for adagrasib. So we continue to monitor the space, but we do think we have a number of advantages here. And one of those advantages, I think, is emerging, and that is the ability to combine with immunotherapy and leverage that gain presence in the frontline setting.

David Meek: Yes, Jamie, thank you very much. I’d just add on to that. What we’ve been able to present at various conferences, our approval of KRAZATI, our response rates or overall survival data, CNS activity, the combined build with other agents such as immuno-oncology, EGFR inhibitor is also a nice advantage we have in the marketplace, and then across multiple tumor types, we’ve shown that, too. And I’d say finally, is we’re years ahead of folks, too. So, we feel that as a KRASG12C inhibitor market leader, we’re well on our way.

Jay Olson: Great. Thank you so much. That’s super helpful. And then for your MTA cooperative PRMT5 and the – can you just talk about what we should expect from the initial data later this year? And is there any read across from the Tango Therapeutics program?

Jamie Christensen: Yes. I think I’ll mention a few things there. So our data this year, where in a dose-escalating Phase I study, we hope shortly to be in the Phase 1b expansion, where we can enroll additional patients perhaps at two different dose levels, and that would expand our patient pool. But I think to set expectations. We are in dose escalation, and we’re escalating with cohorts of three to four patients a piece. So that should provide color towards the number of patients that we would have. I think the second point here is that our goal would be to present PK, PD, tolerability and any early signs of clinical activity. One advantage we think our program does have is the 70-fold to 80-fold ratio of being able to target MTAP-deleted tumor cells relative to cells that don’t harbor this deletion.

And I think the important take home here is that we believe we need to be at a pharmacodynamic inhibition level for PRMT5 and PRMT5-dependent SDMA that achieves about IC99. And if we’re able to achieve an IC99 in an MTAP-deleted tumor cell, that will allow us to avoid the levels that have historically been associated with off-target myelosuppression neutropenia, thrombocytopeni and other issues. And I think that, that’s what needed preclinically to see tumor responses. And we do believe that this is a potential feature of differentiation for MRTX1719 relative to some of the other programs out there.

David Meek: And we’ll be able to give that fulsome update in the second half of this year.

Operator: And we’ll take a question from Ami Fadia with Needham.

Ami Fadia: Hi good afternoon. Thanks for taking my questions . First on MRTX1133, could you give us some color on the size of the data set you will be presenting? It sounds like you were to wait to achieve the recommended Phase 2 dose, and they then present a more wholesome data set. So if you can give us some color on the size as well as the histologies that you expect to be able to cover by that time? And then what would be benchmark that we should keep in mind as we get some of that data? Thank you.

David Meek: I’ll begin on MRTX1133. Just a reminder, we just started the Phase 1 dose escalation trial in March of this year. So it’s early days with the program. As mentioned by Jamie we will present that fulsome update in the first half of 2024. So it is early days. It might be a little bit premature to talk about how many numbers will have at that point in time. Anything else Jamei?

Jamie Christensen: Yes. I think David, I agree. It’s hard to provide a lot of color other than to say this is a dose-escalating Phase 1 with the opportunity to have Phase 1b dose expansions, and really, the size of the data set depends on how many dose levels it takes to get up to a reasonable and a recommended Phase 2 dose and how much additional optimization is ongoing in that study. I think you alluded to a second question is what to expect. So, I think our learning opportunity is really with adagrasib in a G12C space, where we do know that there are single agent development opportunities based on response rate. Clearly, in the long setting, we had mentioned earlier in the pancreatic ductal adenocarcinoma and biliary tract setting, where we’re seeing monotherapy response rates and durability associated with being able to develop the drug as a monotherapy potentially in a single arm accelerated path there.

And then finally, to note that 12% of colon cancer also has a KRASG12D mutation, we do think the cetuximab combination strategy there looks very good preclinically and will likely apply clinically. So really, I think that provides a clear development path should the drug do what it’s supposed to do in those particular settings.

David Meek: So we’re moving as fast as we can. This is a significant opportunity. The patient population is, as Jamie mentioned, the incident is over 120,000 patients a year in the U.S. and Europe. We’ve got an opportunity for first-in-class, so it’s all hands on deck here Mirati for MRTX1133. The investigators are very enthusiastic about this. So we’re moving as fast as we can.

Operator: And that does conclude the question-and-answer session. I’ll now turn the conference back over to you for any additional or closing remarks.

David Meek: Well, thank you, everyone, for joining us this afternoon. We certainly appreciate your interest in Mirati, and we look forward to sharing additional updates with you throughout the year.

Operator: Thank you. That does conclude today’s conference. We do thank you for your participation. Have an excellent day.