Nuvation Bio - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 marked Nuvation Bio’s transition to commercial stage with IBTROZI FDA approval on June 11; total revenue was $4.83M, including $1.24M net product revenue generated over just 13 business days; GAAP diluted EPS was $(0.17) and net loss was $59.0M.
• The launch showed early traction: 70 patients initiated therapy by July 31 and prescriptions from >50 prescribers; NCCN added IBTROZI as a Preferred Agent across lines on June 20, reinforcing first-line positioning.
• Consensus context: Revenue materially beat Wall Street ($4.83M vs $0.42M estimate)* and EPS was near in-line (GAAP $(0.17) vs EPS consensus mean −$0.169*) for Q2 2025; SPGI’s “Primary EPS actual” prints −$0.138*, reflecting normalization differences versus GAAP [Values retrieved from S&P Global].
• Balance sheet strength and funding runway: cash, cash equivalents, and marketable securities totaled $607.7M; $200M non-dilutive financing was activated post-approval (royalty interest $150M + $50M term loan; optional $50M term loan available until June 30, 2026).
• Stock-relevant catalysts: rapid NCCN guideline inclusion, early patient-start velocity, and visibility to Q3 monetization as free-trial patients roll to reimbursed prescriptions; management emphasized patients-on-therapy as the primary KPI and did not issue revenue guidance.

What Went Well and What Went Wrong

What Went Well

• FDA approval and NCCN Preferred status within nine days: IBTROZI approved June 11; NCCN updated June 20 to Preferred Agent first-line and subsequent therapy, including patients with brain metastases and resistance mutations.
• Early commercial traction: 70 patients initiated by July 31 from >50 prescribers across centers; management: “swift evolution into a commercial-stage company… deliver[ing] a differentiated therapy to 70 patients in just seven weeks” (David Hung, CEO).
• Strong balance sheet and financing: $607.7M cash, equivalents, and marketable securities; $200M Sagard financing upon approval supports launch and pipeline execution.

What Went Wrong

• Profitability pressure from commercial build-out: SG&A rose to $38.5M (vs $16.2M YoY); R&D $27.4M; Q2 net loss $(59.0)M persisted despite revenue ramp.
• Limited monetization window in Q2: only 13 business days contributed to IBTROZI revenue; free trial program delays full revenue recognition to Q3.
• Guidance visibility: management provided no formal revenue guidance and emphasized internal KPIs (patients on therapy), which may limit near-term external forecasting precision.

Transcript

Speaker 2

Nuvation Bio second quarter 2025 earnings conference call. Earlier today, we released financial results for the quarter ending June 30, 2025, and provided a business update. The press release is available on the investor section of our website at nuvationbio.com. A recording of this conference call can also be found on the investor section of our website following its completion. I'd like to remind you that today's call includes forward-looking statements about Atrozi's launch, our pipeline progress, and our cash runway. 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.

Joining me on today's call to discuss our quarterly results are our Founder, President, and Chief Executive Officer, Dr. David Hung, and our Chief Financial Officer, Philippe Sauvage. David will provide an overview of the Atrozi commercial launch and additional pipeline updates, and Philippe will discuss our financial and operating updates for the quarter. David will then conclude with closing remarks. Now, I'll turn the call over to Dr. David Hung. David?

Speaker 1

Thanks, JR, and good morning, everyone. Thank you for joining us today. I'm excited to share a series of updates that mark an important new era for Nuvation Bio, namely as a commercial-stage entity. Less than two months ago, on June 11th, we achieved our most important company milestone to date, receiving full FDA approval for Atrozi, our next-generation, highly selective ROS1 tyrosine kinase inhibitor, or TKI. Per our label, Atrozi is indicated for adults with locally advanced or metastatic ROS1-positive non-small cell lung cancer, or NSCLC, in the line-agnostic setting. Since then, the Nuvation Bio team has been executing on multiple fronts to bring this therapy to patients in need.

Our next key achievement occurred on June 20th, just the week following FDA approval, when the National Comprehensive Cancer Network, or NCCN, added Atrozi as a preferred agent for both first-line and subsequent lines of therapy for ROS1-positive non-small cell lung cancer patients, consistent with our line-agnostic label. The NCCN guidelines also included specific recommendations for Atrozi for patients with brain metastases and resistance mutations. The NCCN guidelines are a highly regarded resource in clinical decision-making, especially in the community setting, and play a critical role in the development of formulary and treatment pathway decisions. We believe the rapidity with which Atrozi was added as a preferred agent in the NCCN guidelines gives credibility to its differentiated efficacy and safety profile, while also highlighting Atrozi as a new and important treatment option for patients with ROS1-positive NSCLC.

This viewpoint, along with an associated urgency to utilize ROS1 targeted agents for these patients instead of immunotherapy and chemotherapy, has been echoed by oncologists in our post-approval marketing conversations in both the academic and community settings. This NCCN endorsement strengthens Atrozi's competitive position, and we believe it has been and will continue to be important in spreading awareness of Atrozi among prescribers and payers. On the access front, early dialogue with national and regional plans has been favorable. Major payers were engaged immediately following approval, and the initial coverage landscape is looking strong. As of the end of July, we already have confirmed coverage of Atrozi from payers representing 58% of covered lives. In addition, our patient support program, Nuvation Connect, is fully operational, answering questions and helping patients and caregivers navigate reimbursement and access programs. It is still early days, but the launch is building promising momentum.

By the end of July, we had engaged with over 90% of our Tier 1 accounts and over 85% of our Tier 2 accounts across both community and academic centers, which combined are where we expect the majority, though not all, Atrozi prescriptions to come from. This engagement is critical to our launch as it ensures prescribers understand Atrozi's compelling efficacy and safety, convenient once-daily dosing, and simple path to patient access through our specialty pharmacy and distribution partners, in addition to our previously mentioned Nuvation Connect patient support program. Our engagements with key customers are already translating into early adoption of Atrozi. Doctors have written prescriptions in 100% of our six sales regions and 75% of our 47 sales territories, including over 50 different prescribers across community centers, academic centers, and integrated delivery networks. In addition, 80% of our top 10 target accounts have prescribed Atrozi.

As a result of this positive traction, we are excited to report that 70 patients have started Atrozi as of the end of July, which constitutes roughly seven weeks of commercial effort given our mid-June FDA approval and July being our first full month of commercialization. Given the June 10th and July 4th holidays, these first seven weeks of commercial launch constituted only 34 full business days. Out of the gate, we are already achieving slightly over two new patients starting on Atrozi per business day, and we expect that pace to accelerate. Furthermore, more than 90% of the patients on Atrozi were new patient starts after FDA approval, as only six patients were enrolled in our early access program. As we have previously indicated, we consider the number of patients on Atrozi to be the best metric for future success independent of their reimbursement status.

To put our 70 patients on Atrozi by the end of its first full month of launch into some context, OCTIRO was also approved mid-month. By the end of OCTIRO's first full month of launch, there was only one patient on drug as reported by AcuVia. By the end of Atrozi's second full month of launch, there were still only 18 patients on drug as reported by AcuVia, which we are well aware does not capture patients on free drugs or even all patients on commercial drugs. While some of our 70 Atrozi patients were enrolled in our free trial program, this program typically runs for only one month to allow immediate access to Atrozi, all access issues like prior authorizations are resolved. Therefore, most patients on this program would be expected to generate full commercial sales starting in the second month.

We are thrilled with the robust rate of Atrozi adoption thus far in our launch, and we believe that it is a clear reflection of Atrozi's highly differentiated efficacy and safety profile. We have previously commented that based on pooled data as published in the Journal of Clinical Oncology, Atrozi's confirmed overall response rate of 89% and median duration of response, or DOR, of nearly four years in the first-line setting have not, to our knowledge, previously been shown by any approved cancer drug in any solid tumor indication. With almost five months of additional maturity for the efficacy data set that comprised the Atrozi label, the median DOR metrics for the individual TRUS1 and TRUS2 studies are now no longer reached. This durability is a key factor in giving doctors confidence to prescribe Atrozi, not only in the first-line setting but across all lines of therapy.

Given that our pivotal clinical trials for Atrozi were started over five years ago, it will take many years for a ROS1 TKI in development to reach the length of follow-up time used to evaluate Atrozi in clinical studies. Therefore, we believe that our head start and Atrozi's robust median DOR will give Atrozi an important competitive edge in influencing physicians' use of ROS1 therapy. Atrozi's robust efficacy comes with a safety profile that shows it is generally well tolerated, including adverse events that are generally low-grade, transient, and manageable. While we will not walk through all adverse events detailed in our prescribing information today, I'd like to address the two most common safety events. First, the most common lab-based adverse events associated with Atrozi use are increased aspartate aminotransferase, or AST, and increased alanine aminotransferase, or ALT.

These laboratory abnormalities are not clinically apparent to patients, as they generally cause no symptoms, even though they do require appropriate monitoring. When we look at how often the adverse events of AST and ALT increases led to treatment discontinuation in our safety database, only one out of 337 patients with ROS1-positive NSCLC discontinued Atrozi due to these events. The most common clinical adverse event associated with Atrozi use is diarrhea, the vast majority of which is grade 1, occurs within about two days of starting therapy, and resolves in about 24 hours. We have previously stated that we believe Atrozi's efficacy and safety profile will result in wider adoption and longer use of Atrozi, and therefore create a larger commercial opportunity than has been seen to date with other ROS1 TKIs.

Our early launch results appear to be consistent with our belief that Atrozi will become the treatment of choice for physicians and patients. Now I'd like to provide a bit more detail on the types of patients that have been prescribed Atrozi, which shows the broad potential of our therapy. The makeup of these patients has been quite diverse and includes both TKI-naive and TKI-pretreated populations and patients from both academic and community settings across the country. We are delighted to see Atrozi being prescribed in the front-line setting, as Atrozi's nearly four-year median duration of response suggests that this indication will generate the longest and highest revenue stream. In the second-line setting, some patients have started Atrozi following progression on a prior TKI, as we expected. However, of note, a portion of TKI-pretreated patients have switched to Atrozi due to tolerability issues with other prior ROS1 therapies.

This indicates to us that both prescribers and patients feel Atrozi can provide not only an efficacious but a more tolerable treatment option as well. Additionally, and somewhat unexpectedly, we have also seen some switches from crizotinib to Atrozi that were not due to disease progression or tolerability issues. We believe this may reflect the appreciation by oncologists that crizotinib does not penetrate the blood-brain barrier to prevent or treat brain metastases, while Atrozi has strong CNS activity. In our experience, it is remarkable for oncologists to switch therapies for patients who have not yet progressed. The crizotinib switches that we have already seen are promising, and we believe the right thing to do for patients given Atrozi's strong CNS activity and the fact that the brain is the primary site for disease progression.

In summary, we are seeing broad adoption of Atrozi in both the first and second-line settings, and in the latter, we're seeing switches to Atrozi for disease progression and tolerability issues with other TKIs, and even switches for neither disease progression nor tolerability issues with other TKIs. We're gratified that Atrozi has the potential to positively impact the lives of so many different types of patients with ROS1-positive NSCLC this early in our launch. We view these positive updates, NCCN inclusion, constructive engagement with payers and providers, and most importantly, various types of new patient starts as encouraging indicators of how our launch will progress. When combined with Atrozi's balanced and differentiated efficacy and safety profile, these signals give us confidence Atrozi can become the standard of care and market leader in ROS1-positive NSCLC. Looking ahead, we see considerable opportunities to increase the size of the ROS1-positive NSCLC market.

While our team is focused on adoption of Atrozi, we are also focused on increasing the awareness of the importance of testing for oncogenic drivers like ROS1 and ensuring patients are treated with the appropriate targeted therapy. There are approximately 3,000 advanced ROS1-positive NSCLC patients who could be diagnosed in the U.S. every year by DNA-based testing. Looking further ahead, we would expect an eventual shift to RNA-based testing to increase the total addressable patient population to approximately 4,000 new patients per year, as publications have shown that RNA-based testing will detect roughly 30% more ROS1 fusions than DNA testing. Therefore, given Atrozi's last published median duration of response and median progression-free survival, or PFS, of nearly four years, we would expect the theoretical maximum number of first-line patients treated with Atrozi over this period to a current rate of roughly 16,000 patients in year four.

The prolonged durability of Atrozi creates a patient stacking phenomenon that turns a small incidence population into a large prevalent population, thus generating an expanded market opportunity. Again, this example is based on first-line patients only and does not account for the pretreated population that further increases the addressable population over this illustrative timeframe. Our 47 account managers, supported by regional medical, access, and commercial specialists, remain focused on removing barriers and expanding Atrozi's reach, particularly in the community setting, to maximize the commercial opportunity of Atrozi. While we are now a commercial-stage company, let us not overlook the other exciting programs in development in our pipeline. cefotinib, our mutant IDH1 inhibitor, is being developed for diffuse IDH1 mutant glioma, a devastating brain cancer for which there are very few treatment options available today.

As a reminder, there are approximately 2,400 new cases of IDH mutant glioma per year, split almost evenly between low-grade and high-grade. While the incidence is smaller than ROS1-positive NSCLC, the market opportunity is materially larger because patients with low-grade and high-grade IDH mutant glioma live approximately 10 to 15 and 3 to 7 years, respectively. Therefore, the opportunity in IDH mutant glioma is expected to potentially be significantly larger than in ROS1-positive NSCLC, already a sizable commercial opportunity. The only treatment option available for patients with IDH1 mutant glioma is voricitinib, which was approved by the U.S. FDA in August 2024, and only for low-grade glioma. In this pivotal INDIGO study, voricitinib demonstrated a progression-free survival or PFS of 27.7 months and an overall response rate or ORR of 11%. cefotinib showed an ORR of 33% in a clinical study of patients with recurrent low-grade IDH1 mutant glioma.

Furthermore, there are no agents approved in high-grade IDH1 mutant glioma, where cefotinib showed an ORR of 17%, including two complete responses lasting multiple years in a clinical study. To our knowledge, no other IDH1 inhibitors have demonstrated responses of this kind in this indication, and we believe this speaks to the impressive clinical profile of cefotinib. We plan to disclose more data evaluating cefotinib in the low-grade population post-surgical resection by year end. Based on data generated to date, we have modified the ongoing phase 2 study of cefotinib in the United States to evaluate maintenance treatment with cefotinib against placebo in high-grade IDH1 mutant glioma. Please refer to clinicaltrials.gov for additional details on the study design. Finally, we are in active discussions with the FDA regarding the development of cefotinib in IDH1 mutant glioma.

These discussions cover the expansion of the ongoing study in high-grade glioma with registrational intent and the potential design of a pivotal study of cefotinib in low-grade IDH1 mutant glioma. We look forward to providing updates on our development plan later this year. NUV-1511 is the first clinical candidate of our drug-drug conjugate, or DDC, platform and represents a new modality in targeted cancer therapy. We plan to provide an update from our phase one dose escalation study in difficult-to-treat solid tumors later this year. We remain confident that we have the team, strategy, and mindset to execute our program successfully, build lasting value, and most importantly, serve patients in need. With that, I'll turn it over to Philippe to provide an update on our operations and financials for the quarter. Philippe? Thanks, David, and good morning, everyone.

For details on quarter 2025 financials, please refer to the press release we issued this morning, which is available on our website. Now, let me bring your attention to a few highlights from the quarter. This is our first quarter reporting as a commercial company, and I'm pleased to inform you that we've generated $4.8 million in total revenue. This includes $1.2 million in net product revenue from Atrozi during the first 13 business days from FDA approval to the end of June. As anticipated, most of these Atrozi net revenues come from channel stocking, so we do not expect this to be a significant component of our sales in the future and currently have more than enough demand to convert supply to new patient stocks.

As a reminder, our limited distribution model will limit initial stock buildup and drug in channel, but will also provide better long-term efficiency and access. The remaining product revenue comes from new patient stocks over this short period, some of which were enrolled in our free trial program, which typically runs for only one month, where we allow patients to receive needed treatments immediately without waiting for reimbursement approval. We would expect most patients on this program to generate full commercial revenue in their second month on Atrozi. The remaining revenue comes from our collaboration and license agreements, including product supply, royalty revenue, and research and development services. While our current royalty revenue comes from our commercialization partner in China, Innocent Biologics, we expect to begin receiving additional royalty revenue from our partner in Japan, Nippon Kayaku, following the anticipated approval of taletrectinib in Japan later this year.

Notably, approval and reimbursement listing in Japan will result in a $25 million milestone payment from Nippon Kayaku to Nuvation Bio. As we mentioned on our last quarterly call, the real metric of success is the number of patients we help with our differentiated therapy. Given this, we will focus on providing quarterly updates on the number of new and continuing patients prescribed Atrozi. This will offer key insights into how our launch is evolving and show how we can build a sustained revenue stream given the prolonged durability and high response rate demonstrated by Atrozi in clinical studies. David already mentioned that we have 70 patients on Atrozi at the end of July, which we believe is a very strong commercial start.

On the expense side, R&D expenses for the quarter were $27.4 million, as we continued investment in our lead asset, Atrozi, and in our clinical stage pipeline, including cefotinib and NUV-1511. SG&A expenses were $38.5 million, primarily driven by our continued commercial buildout. This includes personnel-related expenses tied to commercial operations, as well as strategic investments in medical education, payer engagement, patient support programs, and marketing. As a reminder, we have right-sized our sales force with 47 oncology account managers. We do not expect to increase our sales force or materially increase other parts of our commercial team. Turning to the balance sheet, we ended the quarter with $607.7 million in cash, cash equivalents, and marketable securities. This figure includes the proceeds received to date from our recently announced financing agreement with Sagar Healthcare Partners, which provides up to $250 million in non-dilutive capital.

To be precise, shortly after the FDA approval of Atrozi, we received $200 million from Sagar, including $150 million of royalty financing and $50 million under a term loan. An additional $50 million under the term loan is available at our option until June 30, 2026. As we have stated previously, this transaction solidified our capital position. We already believe our cash balance prior to these non-dilutive financings with Sagar was sufficient to fund operations for profitability, including the U.S. launch of Atrozi and advancement of our pipeline. Now, our ability to reach profitability without additional funding is even more clear. Operationally, we remain an agile organization with the flexibility to redirect resources as insights emerge into commercial launch, development of our pipeline, and evaluation of other exciting external opportunities.

That discipline, combined with early Atrozi performance and a robust cash balance, positions us extremely well to execute the remainder of our 2025 objectives. We have the right team, structure, resources, and preserved flexibility to continue to grow responsibly. With that, I'll hand it back to David. Thanks, Philippe. The early momentum we're seeing with Atrozi, including strong uptake, constructive payer and provider discussions, and enthusiastic physician feedback, makes us confident we're on the right trajectory. It's still early days, and biotechnologies are always complex, but these first signs reinforce our conviction that Atrozi can potentially become the standard of care for patients with ROS1-positive NSCLC and more broadly, demonstrate how effectively our team can execute. At the same time, we're advancing a pipeline designed to tackle some of the toughest challenges in cancer treatment.

Each program reflects the same urgency and scientific rigor that brought Atrozi to market, and together they position Nuvation Bio to make a long-term impact. We're energized by the work ahead and, most importantly, by the opportunity to improve the lives of patients in need. With that, operator, please open the line for questions.

Speaker 7

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. To remove your question, press star followed by two. Again, to ask a question, please press star one. As a reminder, if you are using a speakerphone, please remember to pick up your headset before asking a question. We'll pause here briefly as questions are registered. We have our first question comes from Catherine Pullman from Clear Street. Please go ahead.

Yes. Good morning, and congrats on the progress, and thanks for taking my question. I was wondering if you can provide any guidance on the next quarter sales or the number of patients on treatment you expect to see. Do you expect the rate of enrollment to remain the same or perhaps increase? Any additional insight into first-line versus second-line use, if you can provide any breakdown there, and what % of patients had drug switching from crizotinib in first-line?

Speaker 1

Hi, Catherine. In answer to your first part of your question, the 70 patients that we have on drug at the end of July reflected 34 business days, so about two patients per day. There are only four business days in August. In those four business days, we've now put about another three patients per day on drug. We do think that it's very early and it's hard to really know that will all be sustained, but it looks to us like there is a slight uptick, and we would expect this to accelerate as most launches do for a successful drug. I think that we feel pretty good about where we are. As you know, it still takes a while to get the drug on the formularies of all of the aggregators that you want.

We think that there are a number of events coming up that will further accelerate that curve. I would say so far, just from the early days of August, we're already seeing an uptake from what we saw in July. On the second side, on the breakdown of the patients, it's so early in our launch that I think it's going to be difficult for us to comment on that. We don't get to see a lot of that information because the vast majority of our patients are actually in specialty distributors, which is blind to us. We actually don't see the characteristics there. For me to speculate on what there will end up being when the vast majority of that data is blind to us, I think I just don't want to say something that doesn't end up being correct.

I don't think we have enough visibility to make a comment on that.

Got it. That's fair. Can you tell us about the expected data at the lung cancer conference and ESMO? What can we expect to see? Will it include the updated data cutoff for PFS and duration of response from TRUS1 and 2 studies? Could this lead to any changes to the label and its use, drug use?

At World Lung, we're going to provide an update on the TRUS1 and TRUS2 data that we use for our MBA submission, both on the efficacy and safety side. We have not yet decided when we're going to do another cut of the data, so I don't know when that will be. At ESMO, we're going to provide additional data on patients treated with Atrozi following entrectinib. That's important, as you know, because entrectinib is one of the first gen TKIs that does cross the blood-brain barrier, and we're going to show data on what Atrozi does in patients following entrectinib treatment. I think that'll be important.

Got it. Appreciate it. Thank you and congrats again.

Thank you so much.

Speaker 7

Thank you. We have our next question from Sumit Roy from Jones Research. Please go ahead.

Good morning, everyone, and congratulations on a solid start. Curious, when you're talking to the community center physicians, are you seeing any direct effect by Atrozi being the preferred NCCN agent? The second is, are you getting any sense from the ground, like RNA-based testing, if the academic or community centers are thinking about it? When do you think this could start picking up?

Speaker 1

Okay. On the first question, yes, we've spent a fair amount of time on the road talking to KOLs and also the management at aggregators around the country. I would say, we said in our script that we believe that the rapid inclusion into the NCCN guidelines in literally a week is quite unusual. We think it speaks to what an important option this drug is for patients and how we believe our profile is differentiated. We've had that echoed by most, virtually all the people we've spoken to on the road. We've spoken to quite a few thought leaders, quite a few practices, quite a few aggregators, and we're hearing the same thing. I think that it's a pretty consistent message we're receiving, and it makes us feel good because we believe this drug is differentiated and really important for patients.

With regard to RNA testing, we do see a lot more people talking about moving there. I think that there's a recognition that genetic testing is really important because lung cancer, only a few decades ago, especially when the association with smoking was first discovered, was really thought to be a death sentence. Suddenly, in the last few decades, lung cancer, especially the ones that have genetic mutations like EGFR, ALK, RET, and now ROS1, have suddenly become some of the most treatable cancers on Earth. It's really important to identify those mutations. If you can identify it with a more sensitive technique like RNA testing versus DNA testing, I think it's really becoming rapidly more appreciated how important that is to find. We are seeing people talking about a switch to RNA.

You never can predict how fast that'll happen, but we are hearing people recognize that and talk about that. I do anticipate a switch to RNA. I just can't predict the timeframe.

Is that something that kind of information you would provide us in a couple of quarters from now as you start seeing RNA-based testing versus DNA testing? Just curious.

If we see some more data that we can speak to, I'm happy to be delighted to talk about that. I don't know how visible that will be to us because we're not the makers of the test, and we don't really control that data. If we can point out any data that comes that's brought to our attention, we'd be happy to do that. I don't know how much control we'll have over that data.

Totally understandable. One last question on cefotinib. If you can talk us through the decision-making to switch to the maintenance setting, and is the enrollment criteria expanding to all mutations, all types of IDH1 mutations?

Our drug is an IDH1 inhibitor. IDH1 is 95% plus of, you know, glioma, IDH1-mutated glioma. We're not an IDH2 drug, but as I said, the very, very vast majority of these tumors are IDH1-mutated. That's what we're going to be focused on.

I was meaning like R132H, C. Is that expanding to the other subtypes, GLS?

Yeah, we're targeting all of them.

Thank you so much, and congrats again.

Thank you.

Speaker 7

Thank you. We have our next question from Leila Temashev from LBC Capital Markets. Please go ahead.

Hey, guys, it's Anish on for Leo. Congrats on the progress this quarter and for taking our question. Just a quick one from us. Would you tell us how many of the 70 patients are from clinical trials, on a free drug program, on EAP, versus paid drug commercial patients? Just if you could give us the breakdown there. Thanks so much.

Speaker 1

Yeah, 90% of those were not EAP patients. As I said, we only had six patients on the EAP program. I would say the majority of patients are paying patients. The number of patients on free drugs is still a relatively small minority, and we expect those patients on free drugs to convert to full commercial drugs by the next month.

Speaker 7

Thank you. We have our next question from Yaron Wilbur from Cowen. Please go ahead.

Great. Congrats on the good side. I don't know if you can hear it, but the fire alarm is background. I'm just going to ask three questions. Maybe the first one, what % of the 70s came or converted from clinical studies? If you can remind us in the ENTRUS program, how many patients were in the U.S.? I thought you had sort of more than 130 patients in the U.S., but I could be wrong. In terms of once your partner in Japan gets approval for SUFA, would you record the $25 million as a revenue line, or is that below the line and you amortize that payment? Thank you.

Speaker 1

Okay, sir. I could not hear the first part of your question. Could you repeat that?

Yeah, sorry. Okay, yeah, the fire alarm stopped. What percentage of the 70 patients were clinical study patients, and then how many patients in ENTRUS, the ENTRUS program, came from the U.S.?

The number of patients, there were zero patients from clinical trials. They were not clinical study patients, none of them.

Okay. Great. Just remind us, how many patients did you have in the U.S. and ENTRUS in the ENTRUS program?

135 from Europe, North America, and 50 from the US.

All right. So 135 in the U.S., Europe were from the U.S. One was mentioned, those who convert to commercial products, right? You don't guarantee them jobs for life under clinical study. Is that correct?

Can you repeat that again? You sounded garbled. Sorry.

Sorry, bad reception. The patients who are in clinical studies, one would imagine they will convert to commercial products, right? Or do they have sort of unrestricted clinical study drug until they get reimbursed?

We are tracking these, you know, duration of response of this drug is so long that it is to our benefit to continue to track them and record the duration of response. They'll stay on trial for a long period. I mean, the longer, the better for us. We have so many patients who still are on drug and haven't progressed. It's really in our interest to keep them on trial as long as we can.

Got it. Just the question in terms of the milestones from the Japanese approval, would you record that as revenues, or is that going to obviously hit your boost of cash position, and it'll be amortized? Thank you.

Speaker 6

Let me take that here. We will assess if there are remaining performance obligations, but at that stage, we expect to recognize it once in the revenue line.

That's the second half this year, would you say?

That would be later part of the year, like we said in the call.

Okay. Thank you.

Speaker 7

Thank you. We have our next question from David Garten from Weber Securities. Please go ahead.

Hey, thanks. Most of my commercial-related questions have been asked. One on cefotinib. What did the FDA recommend, the addition of the maintenance evaluation or look to ARM, whatever you want to call it, in the study? Just wondering on registration designs if you're thinking of a typical PFS study or some other metric to measure in that study. Thanks.

Speaker 1

Yeah. We're still in discussions with the FDA. Once we've concluded that, we'll put all of that out on clinicaltrials.gov. The FDA did not make that recommendation. That was our decision, but when we get more visibility and finish those discussions, we'll make that all public on clinicaltrials.gov.

Okay. Thank you.

Speaker 7

Thank you. We have our next question from Sylvain Turcan from Citizens. Please go ahead.

Good morning, and congrats on the first quarter with the launch here. Just a question. Since the changes to the NCCN guidelines that require switching to a ROS1 agent upon finding that mutation, and obviously, you have small patient numbers here, have you seen any switching from, for example, pembrolizumab or any other checkpoint inhibitor to frontline Atrozi in any of your patients? I have a follow-up.

Speaker 1

I think that's really hard for us to know. I think that we've spoken previously about the pretty wide recognition that if you look at the PFS of biochemo, we're still talking about a PFS of 6 to 12 months. If you look at our duration of response, we're just now approaching four years and still counting. I think it's going to become increasingly more difficult to justify anything other than a ROS1 agent for a ROS1 cancer. The NCCN guidelines are consistent with that. IO is now contraindicated in ROS1 lung cancer. I think that we've already seen in a number of large aggregators, we've seen that contraindication now incorporated into their own internal guidelines. That's going to make it very, very difficult for anything other than a ROS1 agent to be prescribed for those patients, which is certainly the right thing to do clinically.

Great. Thank you. On safusidenib here, obviously, your FDA discussion is still ahead of you, but maybe big picture, what's your thinking about high-grade and low-grade pivotal plans? Is there any way you can maybe file with data on hand in the high-grade or two pivotal trials, or would it be a joint pivotal trial? Thank you.

Yeah. So, you know, we've made the point that if you look at low-grade glioma, which is where voricitinib is approved, their response rate is about 11%. In our first study with Daiichi, we showed a low-grade response rate of about 33%. We have a new trial with Daiichi that's going to be presented sometime later this year, and you'll see for the first time not only a response rate, but for the first time, you'll actually see PFS. We're excited about that. We think that there are potentially advantages of voracitinib over voricitinib in the low-grade setting. In the high-grade setting, the response rate of voricitinib is zero, and the response rate of cefotinib, as we mentioned, is 17%. More interestingly, we're seeing in some cases very durable, deep responses, CRs that go out two and three, three and a half years.

With our FDA discussions, we're really focused on what we need to do to make these trials registrational. That's what our discussions are focused on. When we conclude those discussions, we're going to put those trial designs, you know, make those public on clinicaltrials.gov, and then you'll get an idea of what the endpoint will be, what our design is, and you can also probably have a better estimate of what timeframe it would take to get this drug across the approval finish line.

Great. Thank you. Congrats again.

Thank you.

Speaker 7

Thank you. There are no questions waiting at this time, and I'll pass the conference back over to David for any further remarks.

Speaker 1

We are very excited about our launch so far. We think it's going extremely well. We are very optimistic about the future. Feedback we've gotten has been really very encouraging. We will keep you updated as we get more data in the next quarter. We are also equally excited about the rest of our pipeline. Stay tuned, and we'll talk to you in another quarter. Thanks so much for joining.

Speaker 7

Thank you. That concludes today's call. Thank you for your participation. You may now disconnect your line.