Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Ladies and gentlemen, thank you for standing by, and welcome to the Clovis Oncology third-quarter 2019 earnings conference call. [Operator instructions] I would now like to hand the conference over to Ms. Breanna Burkart, vicw president, investor relations. Please go ahead.
Breanna Burkart — Vice President, Investor Relations
Thank you, Dennis. Good morning, and welcome to the Clovis Oncology third-quarter 2019 conference call. Thank you for joining us. You have likely seen this morning’s news release.
If not, it is available on our website at clovisoncology.com. As a reminder, this conference call is being recorded and webcast. Remarks may be accessed live on our website during the call and will be available in our archive for the next several weeks. Today’s agenda includes the following, Patrick Mahaffy, our president and CEO, will discuss the key components and highlights of today’s corporate update; then Dan Muehl, Clovis’ chief financial officer, will cover the quarter’s financial results in greater detail.
Patrick will make a few closing remarks, and then we will open the call for Q&A, during which time, Dr. Lindsey Rolfe, our chief medical officer, will also be available to answer questions. Before we begin, please note that during today’s conference call, we may make forward-looking statements within the meaning of the federal securities laws, including statements concerning our financial outlook and expected business plan. All of these statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forwarding statements.
Please refer to our current filings with the SEC for a full review of the risks and uncertainties associated with our business. Forward-looking statements speak only as of the date on which they are made, and Clovis undertakes no obligation to update or revise any forward-looking statement. Now I’d like to turn the call over to Patrick Mahaffy.
Patrick Mahaffy — President and Chief Executive Officer
Thanks, Breanna. Welcome, everybody. We appreciate you taking the time. I’ll begin with a commercial update for Rubraca.
I’m pleased to report that our global revenue for this quarter was $37.6 million, up 14% over the last quarter and 65% over Q3 2018. This growth was driven by encouraging progress in new patient starts and in duration of use. We also continued to make slow progress in reducing the supply of free goods. Our key near-term objectives remain the same: To grow U.S.
ovarian cancer revenues by increasing market share in and adoption of the maintenance treatment indication in the recurrent ovarian cancer setting; to increase EU revenues through launches in England, Italy, France, and Spain, along with continued revenue growth in Germany; and as early as mid-2020, grow revenue through the addition of a potential new indication beyond ovarian in the U.S. with BRCA-mutant advanced prostate cancer. And that brings us to our most near-term development program in the advanced prostate cancer setting. As you know, we have two ongoing studies in the TRITON program, TRITON2 and TRITON3, and we continue to enroll patients into both studies.
I’ll focus on the data presented at ESMO and the regulatory path moving forward. In September, we presented updated TRITON2 data in patients with metastatic castration-resistant prostate cancer at the ESMO 2019 congress in Barcelona. The updated TRITON2 data presented — showed a 43.9% confirmed objective response rate by investigator assessment in 57 RECIST-evaluable patients with a BRCA1 or 2 mutation and results by independent radiological review, which is the primary end point of the trial, were consistent at 40.4%. In addition, a 52% confirmed prostate-specific antigen, or PSA, response rate was observed in 98 PSA response evaluable patients with a BRCA1 or 2 mutation.
Confirmed radiographic responses were durable with 60% lasting 24 weeks or longer. Preliminary safety data for Rubraca in men in this indication were consistent with those observed in prior reports from TRITON2 and in patients with ovarian cancer and other solid tumors. These TRITON2 data presented at ESMO will be included in our planned supplemental NDA filing for Rubraca in BRCA1 or 2-mutant advanced prostate cancer, although the supplemental NDA dataset will also include additional patients and additional data maturity for the patients reported at ESMO. The filing will be based on confirmed RECIST responses.
Following the successful pre-supplemental NDA meeting with FDA in October, we continue to file — continue to plan to file our supplemental NDA submission for accelerated approval for Rubraca as treatment for men with BRCA1 or 2-mutated advanced prostate cancer by the end of this year. Our other planned monotherapy study is the pan-tumor or basket study that we first discussed with you earlier this year. It is designed to support registration for Rubraca across solid tumors in patients with deleterious mutations in homologous recombination repair genes. We anticipate that the study will initiate by year-end 2019 or perhaps early next year.
Next, I’d like to briefly highlight our combination studies with BMS for both Rubraca and lucitanib, and then discuss our newest compound FAP-2286. We remain very enthusiastic about our ongoing clinical collaboration with Bristol-Myers Squibb, and I’ll take a moment to review our combination studies for both Rubraca and lucitanib with nivolumab. I’ll begin with the Rubraca combinations. The new BMS-sponsored Phase II combination study of Opdivo and Yervoy with Rubraca for the treatment of advanced gastric cancer is moving forward with the planned initiation in early 2020 as an arm of the FRACTION advanced gastric cancer study.
This will be the first sponsored study that explores this triplet combination. The BMS-sponsored CHECKMATE 9KD Phase II trial in metastatic castrate-resistant prostate cancer continues to enroll. The Clovis-sponsored Phase III ATHENA trial in first-line maintenance of advanced ovarian cancer continues to enroll well, and we anticipate completing enrollment in this 1,000-patient study by midyear 2020. With ATHENA, we believe we are uniquely positioned to evaluate Rubraca in terms of two key outcomes: as monotherapy versus placebo in the first-line maintenance setting in the HRD population inclusive of BRCA, and in the all-comers or intent-to-treat population, as well as any potential advantage for the combination of Rubraca and Opdivo in the same patient population.
ATHENA is the first frontline switch maintenance study designed to show both part monotherapy and part plus PD-1 combination therapy in one study design. It may be helpful to make sure that everyone understands the statistical analysis planned here. First, probably in the second half of 2021, we will see the results of Rubraca monotherapy versus placebo in all study populations. And then a year or more later, we will see the results of Rubraca plus Opdivo versus Rubraca in all study populations.
In each of these analyses, we will first evaluate outcomes in the HRD population, inclusive of BRCA, and then step down to the entire intent-to-treat population. To wrap up Rubraca and move to lucitanib, let’s turn to SEASTAR, our Clovis-sponsored Phase Ib/II study that includes multiple single-arm rucaparib combination studies, which currently includes following cohorts: Rubraca in combination with lucitanib in ovarian cancer, which is currently enrolling the dose-finding Phase Ib portion of the study; and also Rubraca in combination with Immunomedics’ sacituzumab govitecan for the treatment of advanced metastatic triple-negative breast cancer, relapsed platinum-resistant ovarian cancer and metastatic urothelial cancers, which is currently enrolling the Phase Ib dose-finding portion of the study in patients with solid tumors. Now to lucitanib. Lucitanib is an investigational inhibitor of tyrosine kinases, including vascular endothelial growth factors receptors one through three, platelet-derived growth factor receptors alpha and beta and fibroblast growth factor receptors one through three.
As we’ve discussed on prior calls, there are very encouraging data in studies of a drug similar to lucitanib, which inhibits these same three pathways when combined with a PD-1 inhibitor. This provides a compelling clinical rationale for the development of lucitanib in combination with a PD-1. We believe the combination of lucitanib with a PD-1 targeting monoclonal antibody represents a large potential market opportunity in multiple solid tumor types. Angiogenesis has been shown to be immunosuppressive within the tumor microenvironment, dampening antitumor immune responses.
Preclinical data demonstrate that the anti-tumor activity of the PD-1 inhibitor is enhanced through the inhibition of angiogenesis by lucitanib, which targets three relevant pro-angiogenic pathways, as well as simultaneously targeting tumor cell proliferation and anti-VEGF receptor therapy resistance driven by PDGF and FGF receptors. Earlier this year, we announced the expansion of our clinical collaboration with Bristol-Myers Squibb to include both combinations of Opdivo with lucitanib. Our Clovis-sponsored Phase Ib/II study of lucitanib in combination with Opdivo is now enrolling patients with gynecological and other solid tumors. We hope to have preliminary data from this study and the rucaparib-lucitanib combination that is part of the SEASTAR study at medical meetings beginning in mid-2020.
In addition, as posted on ClinicalTrials.gov this week, a Phase I/II combination study sponsored by BMS will evaluate multiple combinations with Opdivo, including an arm in combination with lucitanib in patients with stage IV non-small cell lung cancer that has spread or reoccurred after failure of chemotherapy and immunotherapy. This study is expected to start by the end of the year. As a reminder, we have global rights to lucitanib, excluding China. And in terms of intellectual property, lucitanib’s composition of matter in the U.S.
expires in 2030 and in Europe in 2028 with up to five years patent term extensions available in each jurisdiction. For an updated overview of lucitanib, please visit the events and presentations page on our website. Now I’d like to briefly describe the newest addition to the closest pipeline, FAP-2286. In September, we and 3B Pharmaceuticals announced a global licensing and collaboration agreement with an initial focus on at FAP-2286, a peptide-targeted radionuclide therapy and imaging agent targeting fibroblast activation protein alpha or FAP.
FAP is highly expressed in cancer-associated fibroblast or CAFs, which are found in the majority of cancer types, potentially making it a suitable target across a wide array of solid tumors. It is highly expressed in many epithelial cancers, including more than 90% of breast, lung, colorectal and pancreatic carcinomas. Clovis will conduct global clinical trials since it obtained U.S. and global rights, excluding Europe, where 3BP retained rights.
We are currently planning to file an IND for FAP-2286 in the second half of 2020. We and 3BP have also agreed to collaborate on a discovery program directed at three additional targets for radionuclide therapies to which we have global rights. We are very enthusiastic about the opportunity to develop this novel class of targeted radiopharmaceutical therapies with an initial focus on FAP-2286. We were drawn to this program for many reasons, not the least of which is our opportunity to be a leader in the emerging field of targeted radiotherapy.
While we are as enthusiastic as everybody is about the potential of immuno-oncology, it is an extremely crowded field dominated by larger pharmaceutical companies. And clearly, there remains significant unmet medical need in multiple tumor types. In this case, we have the opportunity to be the first to clinically develop a FAP-targeted radionuclide, and we are also enthusiastic about the targets that are subjects of our planned discovery collaboration. Finally, while our initial development focus is on monotherapy, there is an evident biological rationale to combine targeted radionuclide therapy with an anti-PD-1 agent, as well as with Rubraca, and we intend to explore these combinations preclinically and potentially clinically, as well.
Now some of you may be familiar with the history of PSMA-targeted radionuclides, in particular, Lu-PSMA-617, which was used under named patient use in hundreds of patients in Germany and certain other countries prior to initiation of any formal clinical development program. Already, one of these German centers has begun to image and treat patients with FAP-2286 under the same name patient use guidelines that were applied to the PSMA-targeted products. It is important to note here that this is not a clinical trial, and that the treating physician is solely responsible for any imaging or treatment decision. As a result of this use, it is possible that the physicians who administer FAP-2286 under named patient use guidelines may describe their clinical experience at upcoming medical meetings, and we will keep you up to date on any such presentations as appropriate.
And with that, I’ll turn the call over to Dan to discuss third-quarter 2019 financial results.
Dan Muehl — Chief Financial Officer
Thanks, Pat, and good morning, everyone. The Q3 2019 financial results are included in today’s press release. We reported net product revenue for Rubraca of $37.6 million for Q3 2019, which included U.S. net product revenue of $36.5 million and ex U.S.
net product revenue of $1.1 million, compared to the all-U.S. net product revenue for Q3 2018 of $22.8 million. This represents a 14% increase over Q2 2019 and a 65% increase year over year. U.S.
net product revenue increased 12% sequentially from Q2 2019 and 60% year over year. Ex U.S. revenue increased sequentially from Q2 2019 to Q3 2019, as anticipated. The supply of free drug distributed to eligible patients through the Rubraca patients assistance program for Q3 2019 was lower at 20% of overall commercial supply, compared to 22% in Q2 2019.
This represented $9 million in commercial value for Q3 2019, compared to $9.3 million in Q2 2019. Gross-to-net adjustments were flat from Q2 2019 to Q3 2019 at 14.2% and 14.1%, respectively. Last quarter, we provided global net product revenue guidance for 2019 in the range of $137 million to $147 million for the full year. Today, we update that guidance to a range of $141 million to $147 million to reflect the potential for continued growth during the fourth quarter of 2019.
Turning now to a discussion of cash. As of September 30th, we had $354.1 million in cash, cash equivalents and available-for-sale securities. In August, we raised $255 million in net proceeds from a private placement sale of $263 million of convertible notes due in 2024. A total of $171.8 million of those proceeds were used to repurchase $190.3 million of par value of convertible notes due in 2021 with the remaining $83.2 million available for general corporate purposes.
In addition, as of September 30th, we still had up to $154 million remaining to draw under the TPG financing for the ATHENA clinical trial financing agreement to fund the expenses of ATHENA trials through Q3 2022. Based on the company’s anticipated revenues, spending, available financing sources and existing cash, cash equivalents and available-for-sale securities, we believe we have sufficient cash, cash equivalents and available-for-sale securities to fund our operating plan into the second half of 2021. This does not include any cash repayment that may be required to pay off unless you refinance the remaining $97 million principal amount of convertible notes at their maturity in September 2021. Cash used in operating activities was $57 million for Q3 2019 and $253.5 million for the first nine months of 2019, compared with $72.5 million for Q3 2018 and $283.3 million for the first nine months of 2018.
It’s worth mentioning that on a sequential basis, Q3 operating cash used was 42% lower than Q2 2019. In addition to these decreases in cash used in operations, the TPG ATHENA financing provided $12.2 million in cash in Q3, resulting in a net cash reduction of $44.8 million during the quarter. We reported a net loss for Q3 2019 of $94.1 million or $1.72 per share and $300.9 million or a net loss of $5.62 per share for the first 9 months of 2019. Net loss for Q3 2018 was $89.9 million or $1.71 per share and $268.8 million or a net loss of $5.18 per share for the first nine months of 2018.
Net loss for Q3 and the first nine months of 2019 included share-based compensation expense of $14 million and $41.7 million, compared to $10.9 million and $37.7 million for the comparable periods of 2018. Research and development expenses totaled $77.9 million for Q3 2019 and $210.7 million for the first nine months of 2019, compared to $63.9 million and $160.1 million for the comparable periods in 2018. The increase is primarily due to higher research and development costs for Rubraca clinical trials. We expect research and development costs to trend lower for the full year starting in 2020 and in the following years compared to 2019, as the largest of our sponsored clinical trials near completion and as the company reduce the spending related to clinical programs and other activities.
Selling, general and administrative expenses totaled $41.8 million for Q3 2019 and $137.6 million for the first nine months of 2019, compared to $42.5 million and $126.6 million for the comparable periods in 2018. Selling, general and administrative expenses decreased year over year for Q3 2019 and also sequentially by 13% from $48 million in Q2 2019 to $41.8 million in Q3 2019 based on cost reduction efforts by the company. Now I’ll turn it back to Pat.
Patrick Mahaffy — President and Chief Executive Officer
Thanks, Dan. We’re pleased with our progress in the third quarter. We demonstrated strong sales performance in the U.S. market with Rubraca in the second-line ovarian cancer maintenance setting, where we remain focused on growing our share of the ovarian cancer PARP space, as well as expanding the second-line maintenance PARP opportunity overall.
We’re seeing initial progress in the EU with Rubraca now reimbursed through the Cancer Drugs Fund in England, and we continue to focus on Germany and prepare to bring on additional EU countries later in 2019 and early 2020. In addition to our sales progress, we also showed a significant reduction on our net cash burn, which was reduced to $45 million in Q3. We presented updated data for Rubraca in advanced prostate cancer patients in September, and our Q4 2019 supplemental NDA filing in BRCA1 and 2-mutant advanced prostate cancer is planned before year-end with potential for U.S. revenues from the prostate indication beginning in mid-2020.
Our clinical collaboration with BMS now includes the additional BMS-sponsored combination study of Opdivo and Yervoy with Rebecca in advanced gastric cancer as an arm of the FRACTION study, and we continue to have active discussions about other possible combination studies. We remain very enthusiastic about the potential for lucitanib with two combination studies now open for enrollment, one with Rubraca in advanced ovarian cancer as part of SEASTAR, as well as one in combination with Opdivo in advanced gynecological cancers and other solid tumors. We hope to have initial data from these trials at medical meetings next year beginning as early as mid-2020. In addition, the Phase I/II combination study sponsored by BMS will evaluate lucitanib in combination with Opdivo in patients with stage IV non-small cell lung cancer that has spread or reoccurred after failure of chemotherapy and immunotherapy.
And lastly, we are enthusiastic about the opportunity to develop FAP-2286 and potentially up to three additional preclinical radionuclide therapies. 3B Pharmaceuticals is an expert in this emerging field. And through this collaboration, we believe we have the opportunity to become a leader in the development of an important new treatment modality for multiple tumor types. And with that, I’d be happy to answer any questions you may have.
Questions & Answers:
Operator
[Operator instructions] And your first question is from the line of Kennen MacKay with RBC Capital Markets. Please go ahead.
Kennen MacKay — RBC Capital Markets — Analyst
Hi. Thanks for taking the question. And congrats on the quarter and continued growth there. Dan, maybe just a quick question on your narrowed guidance and some of the commentary there.
Last quarter, you provided some positive commentary that we could expect continued growth ahead. In Q3, we saw that. Just wondering if that’s how we should be thinking about Q4. And again, whether the majority of the growth coming ahead in Q4 is coming from U.S.
or Europe. And then, secondly, taking a very different strategy, bringing Rubraca to frontline ovarian versus some of the other competitive agents out there, as well as prostate, wondering maybe what the feedback from physicians has been on these combo therapy approaches in sort of broader patient populations, especially coming out of the ESMO conference, where some of these I/O PARP combinations were really in focus. Thanks so much for taking the question.
Patrick Mahaffy — President and Chief Executive Officer
Sure. We did up the lower end of the range in our guidance. On the last call, I said we were beginning to see some green shoots in the United States in terms of both commercial new patient starts and in terms of duration. And I think that is seen now in the Q3 numbers.
We’re cautiously optimistic. You’ll note that we didn’t take the lower end of our guidance markedly higher than what we delivered in Q3. And we’d caution everybody that this is a quarter-by-quarter effort where we’re really pleased with our progress and the effort being made in the field, but it remains an effort to convince many physicians to move beyond observation or watch and wait and to consider active PARP therapy. And the more progress we make in converting those physicians and their patients and frankly, the more progress our classmates make in making that same effort, we’re going to see continued growth for the class and continued growth, hopefully, for us.
We do anticipate now, as we launched formally under reimbursement in the U.K. You may recall we were selling in the U.K. to the sort of 5% to 6% of patients who are private pay. But that is pretty limited.
Now with reimbursement in the U.K., we formally launched in mid-October. We anticipate the launch in Italy before the end of the year. We anticipate launches in Spain and France in the first quarter. So we will begin to see contribution to our growth in sales from these European countries.
As to the frontline strategy, I think the enrollment in the trial speaks to the enthusiasm physicians have for the potential for this combination. The enrollment in this 1,000-patient study will take somewhere probably less than two years to fully enroll, which is a really rapid trial enrollment, especially in light of competing trials and commercially available product for limited populations in this class. And if there’s anything that came out of the important data presentations and the reaction to those data presentations at ESMO is that particularly in the HRD and biomarker-negative population, there is a need for combinations that can deliver greater duration of benefit and potentially a curative regimen, at least in a population of those treated. And I will say that the enthusiasm for the trial remains as high as it’s been and for looking not only at the monotherapy results, which we’ll see first for Rubraca, but also looking beyond that to the combination with Opdivo.
Kennen MacKay — RBC Capital Markets — Analyst
And, Pat, I think that was referring to ovarian cancer. Maybe also similarly for the strategy in prostate, moving up in terms of sort of post chemo into some of the earlier lines of therapy there, as well, potentially in combination.
Patrick Mahaffy — President and Chief Executive Officer
We didn’t have a ton of conversation at ESMO about the combination of, for instance, PD-1 with Rubraca in prostate. There was a lot of focus on the TRITON2 results with great enthusiasm by both the medical oncology community and — not so much at ESMO, but at other meetings, then one-on-ones with the urology community here in the United States. I think that it’s interesting. If approved, it will be one of, if not the first approved in a targeted population in prostate.
And the community is excited about having a targeted therapy that may provide meaningfully greater benefit than chemo or other agents in an all-comers population. And I think the adoption, unlike we’ve seen in maintenance in ovarian, which kind of capped out at 35% or 40%, and now we’re slowly, gradually improving that, I think given that this is a treatment regimen and particularly for men with an advanced stage of disease, I think we’re going to see a much more rapid adoption for the class in the treatment of prostrate. The enthusiasm for it is very high.
Kennen MacKay — RBC Capital Markets — Analyst
Got you. Thank you again.
Operator
Your next question is from the line of Tazeen Ahmad with Bank of America. Please go ahead.
Tazeen Ahmad — Bank of America Merrill Lynch — Analyst
Hi, good morning. Thanks for taking my questions. Pat, just your view about the European market. We’ve talked now for a while about some of the dynamics that have impacted the ability of Rubraca to have uptake in the U.S.
I was just wondering if you can share with us some of your thoughts about certain dynamics that might be specific to the European markets and how you’re thinking about the general ramp opportunity there versus how it ramped here in the U.S. And then I have a follow-up. Thanks.
Patrick Mahaffy — President and Chief Executive Officer
Yeah. It’s going to be very similar and have some of its own nuances, and some of those will differ by territory. In general, the adoption of maintenance thus far, second-line maintenance in ovarian appears to be kind of following the U.S. example, where there is a group of early adopters that take adoption to a kind of 35% rate, and it’s going to take an effort by us and our competitor and peers to drive that higher.
It looks to us, as I interpret and do a currency change to the GSK number in Europe, that they’re doing on an annualized basis around $135 million. So they’ve seen some success in Europe in penetrating, and they’re still in launch mode in several territories. So I think it represents the fact that there is an opportunity for us as we gain approvals in these territories to come into a market with a differentiated offering and some degree of physician population who are committed to and interested in prescribing a PARP inhibitor in the second-line maintenance setting. One difference compared to the United States is that in certain countries, only niraparib is reimbursed for patients beyond BRCA.
So olaparib is reimbursed in all second-line maintenance patients who are mutant BRCA, but in only about half the territories do they have an approval for use beyond the BRCA population. So while we will continue to — or plan to compete for those BRCA patients, the competition for the BRCA wild type patients, which represents 75% of the patient population, is going to be limited to us and niraparib. So there will be a different dynamic territory by territory. But I think the sales performance by ZEJULA represents the fact that there is an opportunity in Europe even at the much lower prices that were reimbursed at compared to in the United States.
And so we look forward to these launches.
Tazeen Ahmad — Bank of America Merrill Lynch — Analyst
OK. Thank you. And then on the commercial opportunity for prostate. You’ve talked about your — some of your early thoughts about what kind of commercial organization you would need.
And I just wanted to get some more updated thoughts from you about whether or not you can leverage any of your current sales force to move into prostate. And if you did need to increase your sales organization, by how much do you think you would need to do that? And what would be your areas of focus at the early part of the launch?
Patrick Mahaffy — President and Chief Executive Officer
Yeah. We’re going to leverage all of our commercial organization in the United States to launch into the prostate market. And our intent now is not to add field-based personnel to support the launch. We have around 140 people in the field right now.
We may increase it slightly, but this includes a mix of sales reps; of regional account managers to allow us to have a dialogue at both the business and physician level within large, important centers; nurse educators to provide support for the nursing and administrative staff at the clinics; and of course, not a commercial group, but the MSL group is also in the field, able to answer any medical inquiries. We think we’re well situated to address all the medical oncology centers that we address today for Rubraca, and the focus for us will be primarily to the medical oncology community, but we do believe that for these larger urology practices that have a history of, for instance, prescribing abiraterone or enzalutamide, that the organization we have will be able to call on these, which are almost always adjacent to these large medical, primarily academic hospital.
Tazeen Ahmad — Bank of America Merrill Lynch — Analyst
OK. Thank you.
Patrick Mahaffy — President and Chief Executive Officer
You bet.
Operator
Your next question is from the line of Gena Wang with Barclays. Please go ahead.MORE]
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