Earnings Call Transcript - NUVB Q2 FY2025

Operator

Hello and welcome to the New Vision Bio second quarter 2025 financial results and corporate update call. Today's call is being recorded and a replay will be available. All participants are currently in a listen-only mode. A brief question and answer session will follow the prepared remarks. Now I would like to turn the call over to JL Divitor, Executive Director of Corporate Development and Investor Relations at Nuvation Bio. Please go ahead.

J.R. DeVita, Head of Investor Relations

Thank you, and good morning, everyone. Welcome to the 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 newvationbio.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 do 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 OVTROSI 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

David Hung, CEO

to dr david hung david 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 innovation bios 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 iptrosi our next generation highly selective ROS1 tyrosine kinase inhibitor, or TKI. Per our label, INTROZI is indicated for adults with locally advanced remetastatic ROS1 positive non-small cell lung cancer, or NSDLC, in the line agnostic setting. Since then, the Novation 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 Trozi 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 Eptrozi 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 EPTROZI was added as a preferred agent in the NCCN guidelines gives credibility to its differentiated efficacy and safety profile, while also highlighting EPTROZI as the 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 Epitrozi's competitive position, and we believe it has been and will continue to be important in spreading awareness of IPTROZI 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 IPTROZI from payers representing 58% of covered lives. In addition, our patient support program, Novation 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 two accounts across both community and academic centers which combined are where we expect the majority though not all if trozi prescriptions to come from this engagement is critical to our launch as it ensures prescribers understand if trozi'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 innovation connect patient support program our engagements with key customers are already translating into early adoption of the trophy 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 Iptrosi. As a result of this positive traction, we're excited to report that 70 patients have started Iptrosi 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. And given the Juneteenth and July 4th holidays, these first seven weeks of commercial launch constituted only 34 full business days. So out of the gates, we are already achieving slightly over two new patients starting on Eptrosi per business day. And we expect that pace to accelerate. Furthermore, more than 90% of the patients on Eptrosi 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 Eptrosi to be the best metric for future success, independent of their reimbursement status. We put our 70 patients on Eptrosi 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 Octiro'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 IPTROZI patients were enrolled in our free trial program, this program typically runs for only one month to allow immediate access to IPTROZI while access issues like fire 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 IPTROZI adoption thus far in our launch. and we believe that it is a clear reflection of Iptrogy's highly differentiated efficacy and safety profile. We have previously commented that based on pooled data as published in the Journal of Clinical Oncology, Iptrogy'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. And with almost five months of additional maturity for the efficacy data set that comprise the Atrosi label, the median DOR metrics for the individual TRUST-1 and TRUST-2 studies are now no longer reached. This durability is a key factor in giving doctors confidence to prescribe Atrosi, not only in the first-line settings, but across all lines of therapy. And given that our pivotal clinical trials for Iptrosi were started over five years ago, it will take many years for a ROS1 TKI in development to reach the length of follow-up times used to evaluate Iptrosi and clinical studies. Therefore, we believe that our Head Start and Iptrosi's robust median DOR will give Iptrosi an important competitive edge in influencing physicians' use of Ross-1 therapies. Introsi'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 Iptrosy use are increased aspartate amytotransferase, or AST, and increased alanine amytotransferase, or ALT. These laboratory abnormalities are not clinically apparent to patients, as they generally cause no symptoms, even though they do require appropriate monitoring. And 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 eptrosi due to these events. The most common clinical adverse event associated with eptrosi use is diarrhea. the vast majority of which is grade one, occurs within about two days of starting therapy and resolves in about 24 hours. We have previously stated that we believe ECTROZI's efficacy and safety profile will result in wider adoption and longer use of ECTROZI and therefore create a larger commercial opportunity than has been seen to date for other last month TKIs. So far, our early launch results appear to be consistent with our belief that Eptrosi 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 Eptrosi, which shows the broad potential of our therapy. The makeup of these patients has been quite diverse and includes both TKI-naive and TKI pre-treated populations and patients from both academic and community settings across the country. We are delighted to see Imtrosi being prescribed in the frontline settings as Imtrosi's nearly four-year median VOR suggests that this indication will generate the longest and highest revenue stream. In the second line setting, some patients have started Imtrosi following progression on a prior TKI as we expected. However, of note, a portion of TKI pre-treated patients have switched to EFTROZI due to tolerability issues with other prior raw sperm therapies. This indicates to us that both prescribers and patients feel EFTROZI can provide not only an application but a more tolerable treatment option as well. Additionally, and somewhat unexpectedly, we have also seen some switches from Krizatna to Entrosi that were not due to disease progression or tolerability issues. We believe this may reflect the appreciation by oncologists that Krizatna does not penetrate the blood-brain barrier to prevent or treat brain metastases, while Entrosi has strong CMS 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 it shows you strong CNS activity and the fact that the brain is the primary site for disease progression. In summary, we are seeing broad adoption of a petrozi in both the first and second line settings, and in the latter we're seeing switches to Eptrosi 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 Eptrosi has the potential to positively impact the lives of so many different types of patients with Rothman 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 Introsi's balanced and differentiated efficacy and safety profile, these signals give us confidence if Introsi 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 Imtrosi, 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 Rossmann-positive NSCLT 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 percent more Ross-1 infusions than DNA testing. Therefore, given Iptrosy's last published median DOR and median progression-free survival or PFS of nearly four years, we would expect the theoretical maximum number of first-line patients treated with Iptrosy over this period to equilibrate at roughly 16,000 patients in year four. The prolonged durability of Iptrosi creates a patient stacking phenomenon that turns a small instance population into a large prevalence 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 Entrosi's reach, particularly in the community setting, to maximize the commercial opportunity of Entrosi. While we are now a commercial-stage company, let us not overlook the other exciting programs development in our pipeline. Sacrositinib, 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 NSDLC. The market opportunity is materially larger because patients with low-grade and high-grade IDH mutant glioma live approximately 10 to 15 and three to seven years respectively. Therefore, the opportunity in IDH mutant glioma is expected to potentially be significantly larger than in ROS1-positive NSDLC, already a sizable commercial opportunity. The only treatment option available for patients with IDH1 mutant glioma is voracitinib, which was approved by the U.S. FDA in August 2024 and only for low-grade glioma. In its pivotal indigo study, voracitinib demonstrated a progression-free survival of PFS of 27.7 months and an overall response rate of ORR of 11%. sacrositinib 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 sacrositinib showed an ORR of 17%, including two complete responses lasting multiple years in a clinical study. To our knowledge, no other IDH inhibitors have demonstrated responses of this kind in this indication, and we believe this speaks to the impressive clinical profile of sacrositinib. We plan to disclose more data evaluating sacrositinib in the low-grade population post-surgical reception by year end. Based on data generated to date, we have modified the ongoing phase 2 study of sacrositinib in the United States to evaluate maintenance treatment with sacrositinib 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 sacrositinib 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 sapucetinib 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?

Philippe Sauvage, CFO

thanks david and good morning everyone for detailed second 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 dollars in total revenue this includes 1.2 million dollars in net product revenue from IPTROZI during the first 13 business days from FDA approval

David Hung, CEO

to the end of June.

Philippe Sauvage, CFO

As anticipated, most of these IPTROZI 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 channel, but will also provide better long-term efficiency and access. The remaining product revenue comes from new patient staffs over this short period, some of which were enrolled in a free trial program, which typically runs for only one month to allow patients to receive needed treatment immediately without waiting for reimbursement approval. We would expect most patients on this program to generate full commercial revenue in in their second month on Iptrosi. 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 come from our own commercialization partner in China, in open biologics, we expect to begin receiving additional royalty revenue from our partner in Japan, Nippon Kayaku, following the anticipated approval of teletrectinib in Japan later this year. Notably, approval and reimbursement listing in Japan will result in a $25 million milestone payment from Nippon Kayakut Innovation Bio. As we mentioned on our last quarterly call, the real metric of success is the number of patients we have with our differentiated therapies. Given this, we will focus on providing quarterly updates on the number of new and continuing patients prescribed each other. 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 rates demonstrated by Iptrosi in clinical studies. David already mentioned that we have 70 patients in Iptrosi 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. dollars as we continued investment in our lead asset ictrosi in our clinical stage pipeline including sapucidinib and nuv 1511. sgna expenses were 38.5 billion dollars primarily driven by our continued commercial build-outs this includes personal 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 accounts 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 today from our recently announced financing agreement with Sagar Health Care Partners, which provides up to $250 million in non-dilutive capital. To be precise, shortly after the FDA approval of ETHORDI, 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 auction until June 30, As we have stated previously, these transactions solidified our capital position. We already believe our cash balance prior to these non-dilutive financings with SAGARD was sufficient to fund operations for profitability, including the U.S. launch of its rosy 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 a pipeline, and evaluation of other exciting external opportunities. That discipline, combined with early Iptrosi performance and 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.

David Hung, CEO

Thanks, Philippe. The early momentum we're seeing within Trozi, 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 if TROSI can potentially become the standard of care for patients with BROS1-positive NSCLC, and more broadly, it demonstrates 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 Iptrozi to market, and together they positioned innovation vials 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 and me. With that operator, please open the lines for questions. Thank you. If you would like to ask

Operator

a question, please press star float by one on your telephone keypad. To remove your question, press star float 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 handset before asking a question. And we'll pause here briefly as questions are registered. We have our first question comes from Calvary

Kevary Pullman, Analyst — Clear Street

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? And any additional insight into first line versus second-line use, if you can provide any breakdown there, and, you know, what percentage of patients had drug switching from crizotinib in first line?

David Hung, CEO

Hi, Kevary. So, in answer to the 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. And there's only four business days in August, but so far in those four business days, we've now put about another three patients per day on drugs. So we do think that, you know, it's very early and it's hard to really know that'll sustain, 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. So I think that we feel pretty good about where we are, and, you know, as you know, it still takes a while to get the drug on the formularies of all the aggregators that you want, and so we think that there are a number of events coming up that will further accelerate that curve, but 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. And so, for me to speculate on what there will end up being when the vast majority of that data is flying to us, I think with, you know, I just don't want to say something that doesn't end up being correct. And so, I don't think we have enough visibility to make a comment on that.

Kevary Pullman, Analyst — Clear Street

Got it. That's fair. And 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 TRUST 1 and 2 studies? And could this lead to any changes to the label and its use, drug use?

David Hung, CEO

So, at World Lung, we're going to provide an update on the TRUST 1 and TRUST 2 data that we use for our MBA submission, both on the efficacy and safety side. But we have not yet decided whether 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 Iptrosi following intractinib, and that's important, as you know, because intractinib is one of the first gen TKIs that does cross the blood-brain barrier. And so, we're going to show data on what Iptrosi does following patients treated, what Iptrosi does in patients following intractinib treatment. So I think that'll be important.

Kevary Pullman, Analyst — Clear Street

I appreciate it. Thank you, and congrats again.

David Hung, CEO

Thank you so much.

Operator

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

Sumit Roy, Analyst — Jones Research

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 Iprosi being the preferred NCCN agent? And the second is, yeah, are you getting any sense on the, from the ground, like RNA testing, if the academic or community centers are thinking about it, when do you think this could start

David Hung, CEO

picking up? Okay. So on the first question, yes, we've spent a fair amount of time on the road talking to KOLs and also, you know, the management at aggregators and around the country. And I would say, you know, we said in our script that we believe that the rapid inclusion into the NCCN guidelines in literally a week is, you know, quite unusual, and we think it speaks to what an important option this drug is for patients and how we believe our profile is differentiated. And we've had that echoed by most, virtually all the people we've spoken to on the road. So we've spoken to quite a few thought leaders, quite a few practices, um quite quite a few aggregators and we're hearing the same thing so i think that it's it's a pretty consistent message we're receiving um and it makes us you know feel good because we we believe this drug is differentiated and really important for patients um with regard to rna testing we do see a lot more people talking about moving moving there i think that there's a recognition that genetic testing is really important because, you know, lung cancer only a few decades ago, especially when the association with smoking was first discovered, was really thought to be a death sentence. And suddenly, really in the last, in a few decades, lung cancer, especially the ones that have genetic mutations like EGFR, ALK, RET, and now ROS1, have suddenly become some the most treatable cancers on earth and so it's really important to identify those mutations and the if you can identify it with a more sensitive um technique like rna testing versus dna testing i think it's really becoming rapidly more appreciated how important that is defined so we are seeing people talking about a switch to rna you never can predict how fast that will happen but we are we are hearing people um recognize that and talk about that i do anticipate

Sumit Roy, Analyst — Jones Research

a switch to rna i just can't predict the time frame is that something um that kind of information you would provide us in like a couple quarters from now as you start seeing rna versus DNA testing

David Hung, CEO

just curious you know i i if we see some more data that you know that we can speak to i i'm I mean, we'd 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. So if we can point out any data that's brought to our attention, we'd be happy to do that. But I don't know how much control we'll have over that data.

Sumit Roy, Analyst — Jones Research

Totally understandable. One last question on Safo Swetnit. 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?

David Hung, CEO

So our drug is an IDH1 inhibitor, and IDH1 is 95-plus percent of, you know, So, we're not an IDH2 drug, but as I said, you know, the very, very vast majority of these tumors are IDH1 mutated. So that's what we're going to be focused on.

Sumit Roy, Analyst — Jones Research

Now, I was meaning like R132HC, is that expanding to the other subtypes, G, L, S? Yeah, we're targeting all of them. Thank you so much, and congrats again.

Operator

Thank you. Thank you. We have our next question comes from Leonard Timashif from LBC Capital Markets. Please go ahead. Hey, guys.

Anishan, Analyst — LBC Capital Markets (on behalf of Leonard Timashif)

It's Anishan 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.

David Hung, CEO

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

Operator

Thank you. We have our next question comes from Yaron Wobo from Colwyn. Please go ahead.