SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) Q1 2024 Earnings Call Transcript

SpringWorks Therapeutics, Inc. (NASDAQ:SWTX) Q1 2024 Earnings Call Transcript May 5, 2024

SpringWorks Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. My name is Tawanda, and I will be your conference operator today. At this time, I would like to welcome everyone to the SpringWorks Therapeutics First Quarter 2024 Earnings Conference Call. [Operator Instructions]. Thank you. I would now like to hand the conference over to Samantha Sandler, Senior Director of Investor Relations at SpringWorks Therapeutics. Samantha, you may now begin the conference.

Samantha Sandler: Thank you, and good morning, everyone. Welcome to SpringWorks Therapeutics First Quarter 2024 Earnings Conference Call. This morning, we issued a press release, which outlines the topics we plan to discuss today. You can access the press release as well as the slides that we’ll be reviewing today by going to the Investors & Media section of our website at www.springworkstx.com. Joining me today are Saqib Islam, Chief Executive Officer; Bhavesh Ashar, Chief Commercial Officer; Dr. Jim Cassidy, Chief Medical Officer; and Frank Perier, Chief Financial Officer. Dr. Badreddin Edris, Chief Operating Officer, is also on the line and available during Q&A. Before we begin, I’d like to remind you that some of the statements made during the call today are forward-looking statements that are subject to a number of risks and uncertainties.

These may cause our actual results to differ materially including those described in our reports filed with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements, and SpringWorks disclaims any obligation to update such statements. I will now turn the call over to Saqib.

Saqib Islam: Thank you, Sam, and thank you all for joining this morning. Today, I’m pleased to share our first quarter performance as well as our progress towards accomplishing our key objectives for 2024 and beyond. A top priority for SpringWorks is to continue to execute on our successful U.S. launch of OGSIVEO for desmoid tumors, and we are very pleased with our strong start. In the first quarter of 2024, our first full quarter on the market, we reported $21 million in net product revenue. This performance underscores the high unmet need for patients with desmoid tumors, the transformative benefits of OGSIVEO to these patients and strong execution across our commercial efforts. We are encouraged by the strong adoption to date and believe there is a meaningful opportunity ahead of us to serve desmoid tumor patients at all stages of their treatment journeys.

We are focused on delivering OGSIVEO to the broad desmoid tumor community and believe that we are establishing a new standard of care for the treatment of this disease. A second key priority for us is the significant opportunity we see for mirdametinib, our MEK inhibitor, to help a large number of patients with neurofibromatosis type 1 associated plexiform neurofibromas or NF1-PN. We believe mirdametinib is a potentially best-in-class treatment for both children and adults with these debilitating tumors. We initiated our rolling NDA submission in March of this year, which we expect to position us to have our second approved product by 2025. We are also continuing to progress our broader targeted oncology pipeline, which presents multiple opportunities to advance the standard of care across different patient populations.

Our ongoing studies are targeting a variety of indications, including ovarian granulosis cell tumors, multiple myeloma, MAPK mutant solid tumors and Hippo mutant solid tumors, which we will be discussing this morning. Finally, we are in a strong financial position with a balance sheet that is expected to fund our operations through profitability. I’ll now turn this call over to Bhavesh, our Chief Commercial Officer, to discuss our commercial progress this year. Bhavesh?

Bhavesh Ashar: Thank you, Saqib. I’m pleased to share an update on the OGSIVEO launch in the United States. In our initial months of market, we have been intensely focused on delivering OGSIVEO as the first and only FDA-approved therapy for adults living with desmoid tumor and establishing a new standard of care for these patients. Our field team has been actively engaging with physicians who manage desmoid tumor patients across treatment sites. As Saqib highlighted, in the first quarter of 2024, which was our first full quarter of OGSIVEO commercialization, we generated $21 million in net product revenue, driven by strong commercial execution and high demand from both physicians and patients. We’ve seen robust adoption given the large unmet need in this patient population, who previously only had suboptimal off-label treatment options available to them.

Also contributing to the rapid uptake was high awareness of the availability of OGSIVEO, as the only approved medicine developed specifically for the treatment of desmoid tumors. We have strong engagement of and advocacy from desmoid tumor experts at sarcoma centers of excellence, many of whom were investigators in our Phase 3 DeFi study. They have led the way in prescribing OGSIVEO to their patients with physicians at 77% of these institutions already having prescribed OGSIVEO. We are also pleased to see early use of OGSIVEO by physicians in other academic centers, as well as community practices. Important, patients prescribed OGSIVEO have been able to access the product efficiently. We have seen broad reimbursement across payer types, supported by the clear clinical value of our medicine, and also the NCCN guidelines listing OGSIVEO as a Category 1 preferred treatment.

We’re also encouraged with early feedback on patients’ response to OGSIVEO therapy. In a few months since launch, we’re hearing consistent feedback on symptom relief, in particular, reports of quick reductions in patients’ pain levels after initiating treatment. In the fullness of time on therapy, we expect tumor shrinkage to be consistent with what was demonstrated in the DeFi study. In a recent survey of 75 oncologists, we received overwhelmingly positive feedback from those who have used OGSIVEO, coupled with a high degree of anticipation from others to use the medicine. 76% of oncologists surveyed have already prescribed or indicated that they plan to prescribe OGSIVEO. Importantly, all those with experience using it indicated satisfaction with OGSIVEO, and 98% of them reported that they’re likely to use OGSIVEO as a frontline treatment.

This gives us confidence in our ability to become the go-to systemic treatment for the up to 1,650 newly diagnosed patients annually in the U.S. Furthermore, in just four months on market, the vast majority who have prescribed OGSIVEO, already preferred over other unapproved systemic treatment options, which have been known to have inconsistent efficacy and challenging tolerability. This is consistent with our preapproval market research and highlights that OGSIVEO’s real-world experience is aligning with the promise shown in our clinical trials. These early metrics are encouraging, and our performance to date has reinforced our confidence in our strategy for sustained growth, which is focused on three pillars. First, continuing to drive depth of prescribing at centers of excellence and other high-volume situations.

Second, expanding the breadth of prescribing and other academic and community centers; and finally, maintaining strong access for patients and supporting appropriate utilization. With the momentum we’ve built since launch, we believe we are strongly positioned for long-term success. First, desmoid tumor treatment guidelines have evolved in favor of systemic treatment as the first line intervention for most tumor locations. There is strong awareness of these guidelines which support the opportunity for an FDA-approved therapy like OGSIVEO to be used earlier in the treatment paradigm. With a strong clinical profile, NCCN Category 1 preferred treatment listing, and high brand awareness, we believe OGSIVEO is well positioned to be prescribed to a broad pool of desmoid tumor patients across their treatment journey.

Second, strong adoption of desmoid tumor specific ICD-10 codes since their introduction in October 2023, strengthens our confidence in the size of the actively managed population of 5,500 to 7,000 desmoid tumor patients. The growing use of these codes also enables real-time patient identification, which is especially helpful in supporting our efforts in the community setting, where we need to be in the right place at the right time to support physicians with educational resources and the availability of OGSIVEO as an effective and approved treatment option for adult patients. In addition, insurers are broadly reimbursing OGSIVEO. Since approval, OGSIVEO has been reimbursed by payers representing 98% of commercially covered lives and we’re encouraged by how quickly OGSIVEO has been added to formal commercial coverage policies.

We have also rapidly secured access for Medicare and Medicaid patients, enhancing the patient experience with OGSIVEO is also a top focus. We’re excited to share that the FDA has recently approved our supplemental NDA for 150-milligram and 100-milligram OGSIVEO tablets in new blister packs. The introduction of this new product format is expected to increase patient convenience and adherence by reducing the number of pills a patient has to take daily and by making morning and evening dosing simpler. The blister packs will be commercially available in the middle of May. Lastly, we have continued to invest in our IT portfolio and currently have 21 FDA Orange Book listed patents, providing protection into 2043. Our first quarter performance strengthens our conviction in OGSIVEO becoming the systemic therapy of choice for adult patients with desmoid tumors.

We are still in the early days of our launch, and we believe that we have reached only a small proportion of the patient population that can benefit from treatment with OGSIVEO. I’ll now hand over to Dr. Jim Cassidy, our Chief Medical Officer, to discuss the progress we’re making across our development programs. Jim?

Jim Cassidy: Thanks, Bhavesh. I’m glad to provide updates on our pipeline, starting with how we’re maintaining positive momentum for our 2 lead programs. In desmoid tumors, the European Medicines Agency validated our marketing authorization application for nirogacestat for the treatment of adults with desmoid tumors in February. This is an important step towards potentially bringing the first approved therapy to desmoid tumor patients in the EU. We’re also pleased that additional data from the Phase 3 DeFi trial will be presented at ASCO. These results reinforce the robust and clinically meaningful safety and efficacy profile of nirogacestat in adult patients with desmoid tumors. Coming to mirdametinib for NF1-PN, in the first quarter, we held a successful pre-NDA meeting with the FDA and initiated our rolling NDA submission.

We expect to complete that submission by the end of June bringing us closer to our goal of having a second approved medicine by 2025. We’re delighted that data from the Phase 2b RENEW trial of mirdametinib were accepted for an oral presentation at ASCO. These data are the cornerstone of our NDA filing, and we expect the results to be published in a peer-reviewed journal this year. Beyond the U.S., we’ve had positive engagement with the EU regulators and are advancing our preparations to submit a marketing authorization application for mirdametinib to the European Medicines Agency in the second half of 2024. Turning to the RENEW study, we’re enthusiastic that mirdametinib has the potential to be a best-in-class therapy for children and the first-in-class medicine for adults with NF1-PN.

There are approximately 40,000 people living with NF1-PN in the United States. And many of these patients have needs that are not addressed by current options. The positive top line results from our pivotal Phase 2b RENEW trial demonstrated evidence of mirdametinib’s differentiation and potentially transformative benefit for these patients. Mirdametinib showed compelling antitumor activity with robust objective response rate confirmed by blinded independent central review and deep responses in both the pediatric and adult cohorts. The depth of response we saw in the trial in both children and adults were unprecedented in studies of other MEK inhibitors, particularly given the hard-to-treat patients we enrolled. It’s been difficult to achieve deep responses, especially in adults with NF1-PN.

So the robust volumetric changes we saw provides strong evidence of the unique activity profile of mirdametinib in this disease. In both children and adults, mirdametinib also demonstrated a manageable safety profile with the vast majority of the AEs being Grade 1 or 2, supporting the potential for extended treatment durations. Plexiform neurofibromas are highly morbid tumors that have a profound physical and emotional impact on patients and their caregivers. So the fact that mirdametinib treatment resulted in statistically significant improvements in patient-reported outcomes, including pain, was also very meaningful. NF1-PN is a devastating and lifelong disease that typically requires chronic therapy, reducing the treatment burden in a real-world setting is critically important.

And we believe that mirdametinib’s optimized dosing regimen, which provides a build-in treatment holiday and a convenient pediatric-friendly disbursable formulation to further improve the patient experience and potentially enhance compliance. Overall, we believe that mirdametinib provides the potential for class-leading efficacy and safety in NF1-PN pediatric patients and can establish a significant first-in-class therapy for adults. Transitioning to our emerging portfolio, we continue to make strong progress expanding the opportunity set in our pipeline. Our Phase 2 trial of nirogacestat in patients with ovarian granulosa cell tumors is fully enrolled, and we expect to report initial data in the second half of 2024. Ovarian granulosa cell tumors account for approximately 5% of all ovarian cancers.

And similar to desmoid tumors, this is a meaningful patient population with a significant unmet need as there is no approved therapies for these patients. In multiple myeloma, we’ve clinically validated nirogacestat’s ability to potentiate BCMA directed agents across modalities, and we are continuing to evaluate combination regimens in collaboration with industry-leading partners. Similar to our approach with nirogacestat, we are pursuing expansion opportunities for mirdametinib, including monotherapy and combination therapy applications in rare oncology and biomarker-defined solid tumors. This includes ongoing combination studies with vemurafenib in advanced solid tumors with MAP kinase mutations, and BeiGene’s lifirafenib and NRAS mutant solid tumors.

We’re also excited about the opportunities had for brimarafenib, an investigational next-generation RAF dimer inhibitor that is being developed by MapKure, our joint venture with BeiGene. We believe that up to 7% of solid tumors harbor oncogenic BRAF aberrations that could potentially be targetable with brimarafenib. This includes mutations and fusions where currently approved therapies aren’t effective or where resistance occurs, those expansion is ongoing in patients with BRAF V600 mutated solid tumors that had progressed on prior BRAF MEK and those with BRAF Class 2 or fusion mutant solid tumors. It’s encouraging that we were already demonstrated responses during the dose escalation in each of these patient populations. Additional data from the monotherapy study are expected in the second half of 2024.

In the first quarter, we initiated a Phase 1b combination study of brimarafenib with Amgen’s panitumumab in colorectal and pancreatic cancer patients with known MAP Kinase pathway mutations and patient dosing is currently underway. As I just noted, a Phase 1 combination study with mirdametinib is also ongoing. Additionally, we are pleased that SW-682, our novel, oral, potent investigational pan-TEAD inhibitor is progressing into the clinic. This program is designed to treat tumors with Hippo pathway mutations, which can occur in up to 10% of cancers, including mesothelioma head and neck cancer. We believe that there is a meaningful opportunity for SpringWorks to create a best-in-class program for Hippo-driven cancers. Our IND for SW-682 was cleared in January, and our Phase 1 study is on track to initiate in the second quarter.

Lastly, we have continued to enhance our drug discovery and translational medicine capabilities. We have several preclinical programs under development and look forward to sharing more as our work advances. And now Frank Perier, our Chief Financial Officer, will share our first quarter financial results. Frank?

Francis Perier: Thank you, Jim. Detailed first quarter 2024 financial results can be found in our press release, but I’ll summarize a few highlights here. Starting with our revenues, we were pleased to record $21 million of OGSIVEO net product revenue in the first quarter. Our total operating expenses increased compared to the first quarter of 2023, driven by commercial activities to support the U.S. launch of OGSIVEO. We continue to maintain a strong financial position with $573 million in cash, cash equivalents and marketable securities on our balance sheet as of the end of the first quarter. We have a clear path to profitability and a long-range operating plan that supports multiple product launches and gives us the flexibility to invest in opportunities across our portfolio. With that, I’ll turn the call back over to Saqib.

Saqib Islam: Thank you, Frank. To close, it has been a successful start to the year for SpringWorks. We’re delivering on our commitment to establish OGSIVEO as the standard of care treatment for adults with desmoid tumors. As Bhavesh highlighted, we are quite encouraged by the growth we’re seeing, which is driven by both the breadth and depth of prescribers and the broad satisfaction of patients who are using the medicine. Awareness is high. Feedback from physicians has been overwhelmingly positive. And importantly, patients are experiencing significant benefits from OGSIVEO, most notably rapid reduction in their pain symptoms. In addition, payers across all segments of the reimbursement landscape are recognizing the value of OGSIVEO and providing broad access to patients.

We are pleased with our strong execution to date, but recognize that we are still in the very early stages of our U.S. launch with many more patients to serve. Our data show that there is a broad pool of approximately 5,500 to 7,000 actively managed desmoid tumor patients living in the United States today. And the commercial performance of OGSIVEO thus far as well as further insights we have gathered from the launch reinforces our confidence in the overall patient population. We have high conviction that OGSIVEO has the opportunity to deliver significant benefits to patients across their treatment journeys. Be they newly diagnosed or having previously been treated with other approaches, and we look forward to providing updates on our performance over the course of the year.

We’re also advancing mirdametinib towards regulatory approval as a potentially best-in-class treatment for children and adults with NF1-PN. Physicians and patients have constantly highlighted their strong desire for a new therapy that offers better tumor and symptomatic control, an improved tolerability profile that enables patients to stay on therapy and a more convenient patient experience to enhance long-term compliance and treatment outcomes. We believe that renew results represent best-in-class data for both pediatric and adult patients. The latter of whom do not currently have an approved treatment option. Our data demonstrate mirdametinib potentially differentiated risk-benefit profile with unprecedented depth of response and manageable safety, all of which point toward a significant opportunity for mirdametinib to help a large number of people living with NF1-PN or in need of a safe and effective therapy.

Beyond our lead programs, we’re also committed to progressing our broader pipeline. We’ve already generated proof-of-concept data in monotherapy in combination settings against several different diseases, and we are preparing for multiple catalysts over the course of this year. Finally, we have robust intellectual property protections for our lead assets and a strong balance sheet to further support our long-term aspirations. We expect 2024 to be another meaningful year for SpringWorks and the patients we aim to serve as our team continues to deliver on our mission of changing the lives of people suffering from devastating diseases. As always, I would like to thank the patients and investigators who participated in our clinical trials, our patient advocacy partners and industry collaborators and our team of SpringWorks.

We’re now happy to take questions. Operator?

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Q&A Session

Operator: Thank you. We will now open the call for questions. [Operator Instructions]. Our first question comes from the line of Anupam Rama with JPMorgan. Your line is open.

Anupam Rama: Hey, guys. Thanks so much for taking the question and congrats on the early innings of the OGSIVEO launch here. I was wondering for OGSIVEO, could you provide any color on inventory dynamics that you’re seeing in the quarter? And how you’re thinking about this moving forward? Thanks so much.

Saqib Islam: Thanks, Anupam. Bhavesh, I’ll let you answer that question.

Bhavesh Ashar: Yes. Thanks for the question. So our distributors are holding minimal inventory levels, and this is fairly standard for any specialty product. But our first quarter revenues, I would say, are primarily driven by demand, both across new patients as well as refills for patients who are continuing treatment. And at the physician level, we’re not seeing any stocking. They’re typically ordering just in real time as patients are prescribed or they’re refilling their existing prescription. Going forward, we don’t expect to see a change in this. Distributors do hold very minimal levels. And so we do not expect to see any significant changes in trends.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Yaron Werber with TD Cowen. Your line is open.

Yaron Werber: Hi, team. Congrats on a really, really great to see this launch. So maybe just a quick question. Can you give us a little bit of a sense? We’ve done a lot of physician checks and they’re saying that pretty clearly, as patients come in, this is not just for new patients, but they’re also actively switching and are interesting and continuing to switch away from chemo and obviously, TKIs. What are you seeing in the market? And can you quantify a little bit how much is sort of prevalence pool switching versus incidents in the quarter in terms of sales? Thank you.

Saqib Islam: Okay. Thanks, Yaron. I think it’s an important question. And certainly, let me start by saying that everything we have seen thus far gives us confidence and in fact, heightened confidence on our numbers with respect to expectations on patients, right? So the number you’re referring to is patients currently on treatment. We talk about 6,000 to 7,000 currently on treatment in the U.S. and newly diagnosed, we expect about 1,650 annually in the U.S. So everything we’ve seen thus far confirms those numbers and perhaps in the high end. From our experience thus far, though, we have seen patients of all stripes, both newly diagnosed as well as those in the prevalent pool. Where we stand at the moment is, Bhavesh talked about the prescriber behavior, which we are seeing as the standard of care.

And that’s driving our confidence in getting to a large percentage of that currently treated group. So we’re seeing those patients come in. They tend to come in all through the course of the year as people finish treatments that they’re currently on and make that switch. But the enthusiasm from clinicians certainly bolsters our view there. Now secondly, I bring up — as you think of these newly diagnosed patients, the survey work we’ve done, which shows that we very much expect to be the first line of treatment for these newly diagnosed patients. So our confidence in that group is high. To your specific question, we’ve seen some of all. We expect the newly diagnosed to be temporarily driven over the course of the year as somebody gets diagnosed.

That’s where we expect to be the frontline treatment and we expect to be the standard of care for patients as they terminate other off-label treatments over time.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Corinne Johnson with Goldman Sachs. Your line is open.

Corinne Johnson: I think you alluded a bit to this on the call, but maybe you could spend a bit more time contextualizing what you’re seeing with respect to both the breadth and depth of utilization of OGSIVEO across the target prescriber population. And in particular, where you anticipate with respect to growth in those 2 directions over the course of the year?

Saqib Islam: Thank you, Corinne. Listen, I think you kind of come back to our view. Certainly, I have confidence in the overall opportunity in terms of the number of patients to help. I do think that where we sit as far as the drivers of all of that is — you’ve got a situation, we’ve got high unmet need in desmoid tumors and a high awareness of OGSIVEO among patients and physicians as the first and only approved therapy. We have a broad label with no restrictions. We’ve got very strong physician engagement and we’ve got a robust reimbursement environment for us. So that’s where we begin. As we think of where the early adoption has been, we have been very pleased with the breadth of our prescribers, both in the centers of excellence, which is where you would expect to see early penetration given their familiarity with the DeFi study, the familiarity with OGSIVEO.

But also very much so — we’ve been very pleased to see it in the community setting as well. And I think the combination of both of those breadth and our confidence that the depth is at a place where we’re really only scratching the surface. So we’ve seen some from all of this prescriber base and a high conviction that we’re only starting. Thank you, Corinne.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Peter Lawson with Barclays. Your line is open.

Peter Lawson: Great, thank you. Thanks for taking the questions. Congrats on the launch as well. I wonder if you can make any comment around the mixture of patients between patients you think have kind of switched from existing therapies versus new patients.

Saqib Islam: Sure, Peter. I think we touched on that a little bit on the prior question, but we are getting some of both. We are certainly getting patients who are switching. Now some of them have switched immediately kind of in the middle of the course of their treatment. Others are appropriately waiting for them to finish a line of treatment before they get on OGSIVEO. And that’s what we would have expected. In addition, we are seeing patients who are first diagnosed with their desmoid tumor coming to OGSIVEO, and we expect to be the frontline treatment based on the feedback we have thus far from physicians. And certainly, I think we continue to see the opportunity in both of those areas, but tough for us at this early stage to quantify of our first 4 months of sales, which patients fall into which category.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Alec Stranahan with Bank of America. Your line is open.

Alec Stranahan: Hey guys, thanks for taking our questions and congrats on the progress of the launch so far. Apologies if I missed this, but within that $21 million number, I guess, how many of the December or the patients that initiated therapy in December, does that include? And any forward-looking guidance, whether the blister pack helped the getting patients on therapy? Or is that more a compliance to therapy consideration? Thank you.