PBYI - NASDAQ

Good afternoon. My name is Victoria, and I will be your conference call operator today. At this time, all participants are in a listen-only mode. After the speakers' formal remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the conference call over to Mariann Ohanesian, Senior Director of IR for Puma Biotechnology. You may begin your conference.

Thank you, Victoria. Good afternoon and welcome to Puma’s conference call to discuss our financial results for the second quarter of 2023. Joining me on the call today are Alan Auerbach, Chief Executive Officer, President and Chairman of the Board of Puma Biotechnology; Maximo Nougues, Chief Financial Officer; and Jeff Ludwig, Chief Commercial Officer. After market closed today, Puma issued a news release detailing second quarter 2023 earnings results. That news release, the slides that Jeff will refer to, and a webcast of this call are accessible via the homepage and Investors sections of our website at pumabiotechnology.com. The webcast and presentation slides will be archived on our website and available for replay for the next 90 days. Today’s conference call will include statements about the company’s future expectations, plans, and prospects that constitute forward-looking statements for purposes of Federal Securities laws. Such statements are subject to risks and uncertainties and actual results may differ from those expressed in these forward-looking statements. For a full discussion of these risks and uncertainties, please review our periodic and current reports filed with the SEC from time-to-time, including our annual report on Form 10-K for the year ended December 31, 2022. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this live conference call, August 3rd, 2023. The company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law. During today’s call, we may also refer to certain non-GAAP financial measures that involve adjustments to our GAAP figures. We believe these non-GAAP metrics may be useful to investors as a supplement to, but not a substitute for, our GAAP financial measures. Please refer to our second quarter 2023 news release for a reconciliation of our GAAP to non-GAAP results. I will now turn the call over to Alan.

Thank you, Mariann and thank you all for joining our call today. Today, Puma reported total revenue for the second quarter of 2023 of $54.6 million. Total revenue includes product revenue net, which consists entirely of NERLYNX sales, as well as royalties from our sub licensees. Product revenue net was $51.6 million in the second quarter of 2023, which represents increases as expected from $46.8 million reported in Q1 2023 and $51.3 million reported in Q2 2022. Product revenue for the second quarter of 2023 was impacted by approximately $1.5 million of inventory drawdown at our specialty pharmacies and specialty distributors. Royalty revenue was $3 million in the second quarter of 2023 compared to $6 million in Q1 2023 $8.2 million in Q22 2022. We reported 3022 bottles of NERLYNX sold in second quarter of 2023, an increase of 173 from the 2,849 bottles sold in Q1 of 2023. As I noted on last quarter's call, we estimate that inventory increased by about 164 bottles in Q4 2022 and then subsequently declined by about 236 bottles in Q1 of 2023. In Q2 2023, we estimate that inventory was further reduced by about 89 bottles. In Q2 2023, new prescriptions or NRx were down approximately 12.5% compared to Q1 2023 and total prescriptions were up approximately 0.4% compared to Q1 of 2023. Jeff will provide further details in his comments and slides. I will now provide a clinical review of the quarter. Then, Jeff Ludwig will add additional color on NERLYNX commercial activities, Maximon Nougues will follow with highlights of the key components of our financial statements for the second quarter of 2023. In our investor call in October 2022, we announced that we had in-licensed the anticancer drug alisertib from Takeda. In clinical trials to-date, alisertib has shown single-agent activity and activity in combination with other cancer drugs in the treatment of many different types of cancer, including hormone receptor-positive breast cancer, triple-negative breast cancer, small cell lung cancer and head and neck cancer. The drug has also shown previous clinical activity in clinical trials in peripheral T-cell lymphoma and non-Hodgkin lymphoma. Takeda's previous clinical development plan with alisertib was extensive. And due to this, there is a large well-characterized clinical safety database with over 1,300 patients who are treated across 22 company-sponsored trials. In terms of the prior experience in small cell lung cancer, as is shown on the slide, alisertib is -- was previously tested in a Phase 2 trial that was previously published in Lancet Oncology. In this trial, alisertib was tested as a single agent in several cohorts of patients with solid tumors. In the small cell lung cancer cohorts, the study design involved the administration of alisertib monotherapy to patients with small cell lung cancer who had previously received up to two prior cytotoxic regimens in the metastatic setting. Patients were administered alisertib monotherapy at a dose of 50 milligrams BID for seven days followed by a 14-day break. As you can see in the table on the right of the slide, in patients with chemotherapy sensitive disease, alisertib resulted in a response rate of 19% and a duration of response of 3.1 months. For the patients with chemotherapy refractory or chemotherapy-resistant disease, alisertib resulted in a response rate of 25% and a duration of response of 4.3 months. We note that the results in patients with chemotherapy-resistant disease compare favorably to results with recently approved drugs in chemotherapy-resistant small cell lung cancer. As you can see on the slide, you can see the waterfall plot for the patients treated in the trial with small cell lung cancer treated with alisertib monotherapy. On this slide, the light blue bars represent the chemotherapy-sensitive patients and the red bars represent the chemotherapy refractory or resistant relapsed patients. On this slide, you can see the adverse events in the trial. The AEs for alisertib are similar to what one would expect for a drug that targets the cell cycle. The main grade three or higher AEs in the trial were neutropenia, anemia, leukopenia and thrombocytopenia. Alisertib was also tested in a randomized, double-blind placebo-controlled Phase 2 trial of paclitaxel plus alisertib versus paclitaxel plus placebo in patients with second-line small cell lung cancer. This trial was published in the Journal of Thoracic Oncology in 2020. Alisertib was dosed at a different dose than in the monotherapy trial with alisertib being administered at 40 milligrams BID for three weeks on days one to three, eight to 10 and 15 to 17 plus paclitaxel dosed at 60 milligrams per meter squared IV on days one, eight and 15. The comparator on received placebo plus paclitaxel with paclitaxel dosed at 80 milligrams per meter squared IV on days one, eight and 15 in 28-day cycles. Randomization was stratified by type of relapse after primary treatment based on the common definition for each type, with sensitive defined as relapsed greater than 90%, but less than 180 days after primary treatment and resistant or refractory defined as relapsed less than or equal to 90 days after primary treatment. The protocol was initially written by the sponsor to record relapse type as the time from initial response. A protocol amendment was done approximately mid-way through the trial, which corrected the stratification definition of relapse type after primary therapy so that relapses were recorded from last administration of platinum-based chemotherapy, which is in line with the NCCN treatment guidelines and clinical treatment practice rather than from initial response. To maintain balance and the primary endpoint of PFS was analyzed using the original stratification definition of relapse type. However, sensitivity analysis, which used the corrected stratification definition was also performed. The trial also incorporated an extensive biomarker analysis with a prespecified analysis of c-Myc expression measured by immunohistochemistry and a retrospective analysis of genetic alterations in ctDNA with clinical outcome. As is shown on the slide, the primary endpoint in the trial was progression-free survival, or PFS, for the intent to treat population of the hazard ratio using the original definition was 0.77 with a p-value of 0.113, using the corrected definition, the hazard ratio was 0.71 with a p-value of 0.038. For the patients with chemotherapy resistant or refractory relapse, the hazard ratio was 0.66, with a p-value of 0.037. For the ITT population, the OS showed a hazard ratio of 0.87 with a p-value of 0.714 and using the corrected definition, the hazard ratio was 0.79 with a p-value of 0.209. As previously mentioned, there was an extensive biomarker analysis done in the trial with prospective testing for c-Myc. For the patients in the trial who were found to be IHC positive for c-Myc expression, the hazard ratio in the trial was 0.29 within median PFS for the paclitaxel plus alisertib arm of 4.64 months and a median PFS for the placebo plus paclitaxel arm of 2.27 months. The trial also incorporated an analysis of patients with alterations and cell cycle genes, including CDK6, RBL1, RBL2 and RB1. Of note, RB1 mutations were the most frequent mutation with approximately 60% of the patients having RB1 mutations, while the CDK6, RBL1 and RBL2 mutations were found with very low frequency. As shown on the slide, for patients with cell cycle mutations, the PFS in the paclitaxel plus alisertib arm was 3.68 months, while the placebo plus paclitaxel arm was 1.8 months, and the hazard ratio was 0.395 with a p-value of 0.003. The overall survival in the subgroup patients was 7.2 months for the alisertib arm and 4.47 months for the placebo arm with a hazard ratio of 0.427 and a p-value of 0.00085. Slide eight shows the AE profile for the trial, higher rates of grade 3 or higher AEs were seen in the alisertib arm for neutropenia, anemia and decreased neutrophil count, which should be expected based on the prior Phase 2 trial of alisertib monotherapy. There were also four drug-related fatalities in the trial due to neutropenic sepsis, febrile neutropenia and septic shock. Puma recently met with the FDA to discuss the clinical development plan for alisertib in small cell lung cancer with the intent of exploring the possibility of an accelerated approval pathway for alisertib in small cell lung cancer. The previous randomized Phase 2 trial of paclitaxel plus alisertib versus paclitaxel plus placebo demonstrated that in biomarker-focused subgroups, the combination of alisertib plus paclitaxel demonstrated a PFS and OS advantage compared to paclitaxel plus placebo. However, similar biomarker analyses were not performed in the previous monotherapy trial in patients with small cell lung cancer. Hence, the efficacy of alisertib monotherapy in these biomarker subgroups is unknown. In the third quarter, Puma filed its IND with the FDA for a Phase 2 trial of alisertib monotherapy in patients with small cell lung cancer. The study name is Puma ALI-4201, which is shown on slide nine. The trial will enroll up to 60 patients with extensive stage small cell lung cancer who progressed after first-line platinum-based chemotherapy and immunotherapy. Patients must provide tissue-based biopsies that biomarkers can be analyzed and alisertib will be dosed at 50 milligrams BID on days 1 through 7 and every 21-day cycle. Puma plans to perform an interim analysis for the evaluation of the biomarkers as well as an evaluation of the efficacy. Once the FDA determines the study is safe to proceed, Puma will seek to initiate this trial in the second half of 2023. As is shown on slide 10, the primary endpoint of the trial will be objective response rate, with secondary end points of duration of response, disease control, progression-free survival and overall survival. The company will also be looking at each of these endpoints within selected prespecified biomarker subgroups as well as to assess whether there is better efficacy seen in any biomarker subgroup. The goal would be to correlate the efficacy in these biomarker subgroups to the efficacy that was previously seen in the biomarker subgroups from the randomized trial of paclitaxel plus alisertib published in the Journal of Thoracic Oncology. If there is alignment between the two, the company believes it could represent a potential accelerated approval strategy. As is seen in slide 11, Puma will be performing its biomarker analysis of the ALI-4201 trial in patients -- I'm sorry, in parallel with the execution of the clinical trial. Again, the goal here will be to look at the efficacy of alisertib monotherapy and biomarker subgroups and correlate that to the efficacy seen in the same biomarker subgroups in the paclitaxel plus alisertib randomized trial. As is shown on the slide, the company anticipates meeting with the FDA once it has performed this analysis to explore the potential for an accelerated approval pathway for alisertib in small cell lung cancer. We continue to anticipate that there will be several clinical milestones for the alisertib program in the coming months. This includes potentially initiating the Phase 2 clinical trial of alisertib in small cell lung cancer before the end of the year, conducting a meeting with the FDA to discuss the clinical development and registration pathway for alisertib in hormone receptor positive HER2 negative breast cancer in the fourth quarter of 2023 and reporting data from an ongoing investigator-sponsored Phase 1/2 trial of alisertib plus pembrolizumab in the treatment of patients with RB-deficient, head and neck squamous cell cancer in the second half of this year. As mentioned on prior earnings calls, in response to investor questions, Puma continues to evaluate several drugs to potentially in-license that would allow the company to diversify itself and leverage its existing R&D, regulatory and commercial infrastructure. The company will continue to keep investors updated on this as it progresses. I will now turn the call over to Jeff Ludwig, Puma's Chief Commercial Officer, for a review of our commercial performance during the quarter.

Thanks Alan. Appreciate it, and thanks, everyone, for joining our second quarter earnings call. Before I move into the commercial review, just a reminder that I will be making forward-looking statements. Let me start with just a brief overview of our commercial strategy. We remain largely focused on the extended adjuvant indication where we believe there continues to be significant unmet need, especially for patients at higher risk of recurrence. We are continuing to refine our targeting for both our personal and non-personal promotion with the goal of being more efficient and more effective with our given resources. In addition, the team continues to look for opportunities to expand our engagement with local and regional advocacy groups, ultimately to better educate and support patients throughout their treatment journey. We believe NERLYNX is a promotionally sensitive product and are happy to see that our teams are making progress increasing our reach and frequency with HCPs. With that said, oncology is still a very restricted therapeutic area from an access standpoint and getting in front of customers at the right time can be more important given the various treatment decisions and the overall duration of treatment. Our sales and marketing teams are working closely together with the goal of driving sustained improvements in our reach and frequency and increasing engagements that are deemed valuable and motivating. With that high-level update, let me transition to some of the U.S. commercial slides where I will provide some additional insights. Once I have finished, I will turn the call over to Maximo for a more detailed review of our financial results. Slide three provides an overview of our distribution model. This model has not changed and remains separated into two distinct channels that provide NERLYNX to patients. We refer to these two channels as our specialty pharmacy channel and our specialty distributor channel. Most of our business continues to flow through the specialty pharmacy channel, but we have seen a continued increase in the percent of business flowing through the SD channel. In Q2 of 2023, approximately 26% of our business went through the SD channel. This is slightly up from the 25% we reported in Q1 of 2023 and higher than the 21% we reported in Q2 of 2022. Turning to slide four, NERLYNX net revenue in Q2 of 2023 was $51.6 million, which represents both year-over-year and quarter-over-quarter growth. More specifically, NERLYNX net product sales increased about $300,000 from Q2 of 2022 and increased about $4.8 million from Q1 of 2023. Inventory changes clearly have an impact on these numbers, so let me give you some additional insight, which I've also included on this slide. In Q2 2023, we estimate that inventory decreased by about $1.5 million. As a comparator, we estimate that inventory increased by about $2.7 million in Q2 of 2022 and decreased by about $3.8 million in Q1 of 2023. Slide five shows Q2 2023 ex-factory bottle sales and also provides both a year-over-year and a quarter-over-quarter comparison. In Q2 2023, NERLYNX ex-factory bottle sales were 3,022, which represents about a 6% quarter-over-quarter growth and about a 6% year-over-year decline. Now let me again provide more specifics around the inventory impact, which is also included at the bottom of this slide. We estimate that inventory declined by about 89 bottles in the second quarter of 2023. As a comparison, we estimate that inventory increased by about 179 bottles in Q2 of 2022 and declined by about 236 models in Q1 of 2023. Let me pause and take just a moment to provide some additional insights into the business. Starting with demand. We are pleased with the fact that we saw demand grow approximately 2.9% year-over-year and about 0.7% quarter-over-quarter. The SP channel was slightly positive for both metrics, more precisely about 0.5% growth year-over-year and about 0.2% growth quarter-over-quarter. But the SD channel was the real driver of this growth. The SD channel grew approximately 12% year-over-year and 2.6% quarter-over-quarter. I want to remind investors that we do not pick up new prescription or NRx or TRx data in the SD channel. So we do not have the same level of visibility for patients that start and stay in this channel as we do in the SP channel. Turning to NRx and TRx. In Q2, we saw a quarter-over-quarter decline in NRx of about 12.5% and a year-over-year decline of about 4.1%. As we have discussed on previous calls, we have seen a consistent pattern since launch, where NRx growth is positive in Q1 with a subsequent decline in Q2. This is based on patients deciding to delay starting on NERLYNX around the late Q4 holidays and instead pushing those starts into Q1. Moving to total prescriptions, we saw a quarter-over-quarter increase of about 0.4% and a year-over-year increase of approximately 1.6%, largely driven -- attributed to better refill rates. As I mentioned previously, we do not pick up NRx and TRx data for patients that start and stay in the SD channel. With that said, the majority of our business flows through the SP channel, so we want to see consistent NRx and TRx year-over-year trends if we're going to accomplish our goal of driving overall growth. The team is focused on this priority and knows the importance of this goal. Slide six highlights the adoption of dose escalation. We continue to believe dose escalation is an important metric as it serves to improve the tolerability of NERLYNX by significantly reducing grade 3 diarrhea, decreasing discontinuation rates and reducing the median cumulative days of grade 3 diarrhea. In Q2, approximately 70% of patients who received commercial drug started NERLYNX on a lower daily dose. The commercial team continues to discuss and educate health care practitioners around the benefits of dose escalation, and I'm overall happy with this adoption and pleased to see dose escalation, including in many prominent guidelines, including NCCN. Slide seven highlights the strategic collaborations we have formed across the globe. As previously reported, in Q1 of 2023, NERLYNX received regulatory approval in the metastatic setting in Colombia, received regulatory approval in the extended adjuvant setting for both Morocco and South Africa and was officially launched in Mexico, also in the extended adjuvant setting. In Q2, we are pleased to announce that NERLYNX was launched in the extended adjuvant setting in Slovakia. We appreciate the efforts being put forth by our global partners to make NERLYNX available to more patients around the world. I'd like to wrap-up by once again thanking my colleagues at Puma for their passion and dedication to making an impact on the lives of patients and their families battling breast cancer. This feeling permeates the entire organization. We know more needs to be done, and we are committed to making a bigger impact. I will now turn the call over to Maximo for a review of our financial results. Maximo?

Thanks, Jeff. I will begin with a brief summary of our financial results for the second quarter of 2023. Please note that I will make comparisons to Q1 2023, which we believe is a better indication of our progress as a commercial company than year-over-year comparisons. For more information, I recommend that you refer to our Q2 2023 10-Q, which will be filed today and includes our consolidated financial statements. For the second quarter of 2023, we reported net income based on GAAP of $2.1 million or $0.05 per share. This compares to a net income in Q1 2023 of $1.4 million or $0.03 per share. On a non-GAAP basis, which is adjusted to remove the impact of stock-based compensation expense, we reported net income of $4.6 million or $0.10 per share for the second quarter of 2023. Gross revenue from NERLYNX sales was $62.8 million in Q2 2023 and $59.4 million in Q1 2023. As Alan mentioned, net product revenue from NERLYNX sales was $51.6 million compared to $46.8 million reported in Q1 2023. We believe that Q2 net sales were impacted by approximately $1.5 million of inventory drawdown from our distributors versus approximately $3.8 million of inventory drawdown in Q1 2023. Royalty revenue totaled $3 million in the second quarter of 2023 compared to $6 million in Q1 2023. The lower royalties versus Q1 reflects the timing of shipments to our partner in China. Our gross to net adjustment in Q2 2023 was about 17.9% compared to the 21.2% gross to net adjustment reported in Q1 2023. Lower co-pay, government charges and Medicare rebates were the main drivers of the decrease versus Q1 2023. Cost of sales for Q2 2023 was $11.9 million, including $2.4 million for the amortization of intangible assets related to our neratinib license. Cost of sales for Q1 2023 was $13.2 million. Going forward, we will continue to recognize amortization of milestones to the licensor of about $2.4 million per quarter as cost of sales. For fiscal year 2023, Puma anticipates that net NERLYNX product revenue will be in the range of $205 million to $210 million. We also anticipate that our gross to net adjustment for the full year 2023 will be between 19% and 20%. In addition, for the fiscal year 2023, we anticipate receiving royalties from our partners around the world in the range of $25 million to $30 million. We don't expect license revenue in 2023. We also expect that net income for the full year will be in the range of $20 million to $24 million. We anticipate that for Q3 2023, NERLYNX product revenue net will be in the range of $51 million to $53 million. Also, we expect Q3 royalty revenue will be in the range of $3 million to $5 million. Further estimate that the gross to net adjustment in Q3 2023 will be approximately 17.5% to 18.5%. Puma anticipates a Q3 net profit between $3 million and $4 million. SG&A expenses were $24.4 million in the second quarter of 2023 compared to $22.5 million for the first quarter. SG&A expenses included noncash charges for stock-based compensation of $1.8 million for Q2 2023 compared to $2 million for Q1 2023. Research and development expenses were $13.4 million in the second quarter of 2023 compared to $12.7 million for the first quarter. R&D expenses included noncash charges for stock-based compensation of $0.8 million in the second quarter of 2023 compared to $0.9 million in the first quarter. In the second quarter of 2023, Puma reported cash burn of approximately $3.2 million. This compares to cash burn of approximately $9.9 million in Q1 2023, which included $12.5 million payment to Pfizer related to the achievement of our global revenue milestone and an $8 million payment related to a legal settlement. On the expense side, Puma continues to anticipate a reduction in total operating expenses compared to 2022. More specifically, we anticipate SG&A expenses to decline approximately 1% to 3% and R&D expenses to increase 5% to 7% year-over-year. At June 30, 2023, we had approximately $74.4 million in cash, cash equivalents and marketable securities. Our accounts receivables balance was $31.3 million. Our accounts receivables terms range between 10 and 68 days, while our sales outstanding are about 48 days. We estimate that as of June 30, 2023, our distribution network maintain approximately 3 weeks of inventory. Overall, we continue to deploy our financial resources to focus on the commercialization of NERLYNX, the development of alisertib and controlling our expenses.

Thanks Maximo. We are pleased to report positive net income as well as positive cash flow during the second quarter of 2023. Puma senior management in cooperation with the Board of Directors continues to remain focused on improving NERLYNX sales in 2023 and beyond. In the fourth quarter of 2021, we implemented a reduction in expenses with the goal of reducing expenses in order to maximize operational cash flows. We believe that the positive net income and cash flow reported in the second quarter reflect these expense reductions. These expense reductions are also a major contributor to the positive net income and positive cash flow that Puma is guiding to for the full year 2023. The company remains committed to continuing to achieve these operational cash flows and positive net income, and we'll continue to reduce expenses if needed, to achieve this. We look forward to updating investors on this in the future. There continues to remain a significant unmet need for patients battling breast cancer, lung cancer and other solid tumors. We at Puma are committed and passionate about finding more effective ways at helping these patients during their journey and we will continue to strive to achieve that goal. This concludes today's presentation. We will now turn the floor back to the operator for Q&A. Operator?

Thank you. We will now being the question-and-answer session. [Operator Instructions] First question comes from Ed White with H.C. Wainwright. Please go ahead.

Good afternoon. Thanks for taking my questions and congratulations on the quarter. So, just a couple of questions on sales. I might have missed it, but did you give the percentage of live interactions in the second quarter? I believe in the first quarter, you mentioned it was 81%. And is this number taking now?

Ed, thanks for the question. This is Jeff. And I'm sorry, I did not have that in the script, I apologize. In Q1, it was 81% from live. In Q2 is very similar. It's reported around 81% to 82% live versus virtual. So, we still see the vast majority of our calls being live. I'm not seeing the same inflection. I would expect that we're going to see that combination likely to continue for the foreseeable future.

Great. Thanks. And I'm just wondering if you had the NCCN guidelines were changed updated, I should say, on February 1st. Are you seeing any impact to sales based on those guideline changes yet? Or should we expect to see it in the future?

So Ed, we were very happy that NCCN changed that. And we feel like that, that validates some of the things we're trying to do. As you may know, they moved NERLYNX up into the body of the guidelines, which we feel is a much more prominent position. Where they added NERLYNX was in the useful in certain circumstances section. And ultimately, what it said was consider using NERLYNX for patients at higher risk of reoccurrence. We love that positioning, it's more prominent, but the words considered puts the onus -- continued on the sales team to get in front and validate and justify those. So, although we see it as a positive trend, we think it's really up to my sales team and the commercial team to pull that through, educate around that and also continue to provide the benefits of NERLYNX in those patients. Hopefully, that adds some more color.

It does. And perhaps just the last question I have on the sales are what really is going to move the needle for NERLYNX over the next 12 months? As you said that, it seems like you're having more interactions. The NCCN guidelines really haven't had much of an impact without you're pushing for it. So what do you have left in your repertoire to increased sales?

Yes, very good question. I appreciate it. Where we're focused in terms of trying to inflect NERLYNX is on a couple areas. Number one, we still don't believe that the -- that we've done a strong enough job embedding the evolution of the clinical data. So the prime focus of the commercial team is to update and educate around that evolving clinical data, especially around those subgroups of increased levels of risk, focused on iDFS, OS, CNS and duration. We want to continue to embed that. So customers know that data inside and out. That's number one. Number two, we are trying to help our sales team as you think about the HER2-positive breast cancer patients, spread across a large number of community oncologists where access is not as strong as we would like. What we're trying to do is to help the sales force spend more time in front of those customers that are more likely to have more of those appropriate patients. So that increased share of voice we're trying to focus that in on places where you have a greater return on that discussion. Two other things I'll throw out. I mentioned access can be tough in the community setting. We are working hard to increase our non-personal promotion. So in places we cannot get in front of, we're trying to support that through non-personal message to get that education across as well. And lastly, as I mentioned, in the extended adjuvant setting, we believe patients can play a significant role in asking their doctor about what else can I do to reduce my risk. So we're trying to increase that partnership with local and regional advocacy groups, so patients are more educated and engage more frequently on asking for other options to reduce the risk. Those are the 4 things we're focused in on right now to drive that business.

Great. Thank you. And perhaps a pipeline question just on alisertib. You're planning on meeting with the FDA for the HR-positive HER2-negative breast cancer indication. What are your expectations for that meeting with the FDA? Alan, what are you thinking would be a home run here? What are you thinking that would be the path forward?

Yes, thanks for the question Ed. We've seen alisertib tested in two different settings in HR-positive HER2-negative breast cancer. One is in combination with endocrine therapy and the other is in combination with chemotherapy, specifically with paclitaxel, the endocrine was with fulvestrant. The fulvestrant combination is obviously used early in the treatment guideline and in the treatment regimen. So obviously, we have a larger potential patient population. In our meetings with the KOLs, they have definitely pushed for using alisertib earlier rather than later. So they've pushed more for the combination with fulvestrant or some other endocrine in kind of that endocrine phase of treatment kind of the -- before chemo part. So I don't know if there's any setting that's "a home run" I think we'll have a very productive discussion with the FDA. It will be very helpful and interactive. I don't really -- there's no scenario that I view "a home run". I would imagine we will just be discussing with them the path forward for that combination and what the eventual Phase 3 trial would need to look like.

Okay, great. Thanks Alan. For taking my questions.

Next question comes from Divya Rao with TD Cowen and Company. Please go ahead.

Good afternoon. This is Divya on for Marc. Thanks for taking our question. We have two questions mostly on the pipeline. Just to clarify on the Phase 2 trial of alisertib and small cell, will all the patients be enrolled and then tissue -- and then have their tissue biopsy during the interim cut to then evaluate the subgroup analysis? Or will the patients be screened for the presence of biomarkers before they're enrolled into the trial?

The patients will have -- so we'll be pre-specifying -- the way we're looking to do this is to pre-specify upfront the biomarkers we're going to look at. We'll do the tissue biopsy at study entry and then we're meant to do the trial in a way that we're constantly looking at the biomarkers. And so if there's a need to kind of enrich a population because we're seeing a signal, we can do that.

And then for the pembro combination trial that is hoping to -- that you're hoping to read out in the second half. What is the kind of scope of that data readout going to be? And possibly is there a venue that you're thinking of for that disclosure?

Yes. So it's an investigator-sponsored trial, so we have not as much interaction on that. And our last communication with the investigator -- the investigator incident, they were looking to submit it to the molecular targets meeting. I believe that we're looking to do it as a late breaker. So that's the last update we have on that.

Got it. Thank you so much.

Next question comes from Geoff Meacham, Bank of America.

Hi, this is Alex Hammond on for Geoff. Thank you very much for taking our question. Can you talk a little bit about your BD strategy? You touched on it a bit during your prepared remarks, but what would be your criteria or your preference for the type of products that you are going to potentially in-license?

I think we will be looking at focusing more in the solid tumor space because that's where our -- both our commercial sales force and our kind of R&D domain knowledge is. And I think we'd be looking at -- we obviously would be looking at potential commercial assets, although I think that in the solid tumor space has its challenges. And then ones that are in various stages of clinical development as well.

Thanks.

Next question comes from Gena Wang with Barclays. Please go ahead.

Hi, good afternoon. This is Harshita on for Gena. Thanks for taking our question. So I just had a quick one on the alisertib small cell development pathway. I was curious, did you discuss with the FDA what a confirmatory trial would look like if you were able to go through an accelerated approval path based on the Puma ALI-4201 trial you disclosed today?

So normally, when you're going for an accelerated approval pathway, you go in with a Phase 2 trial and you try to have the conviction that, that's going to result in a positive randomized trial. Well, obviously, we have the randomized Phase 2, where in the biomarker subgroups, we have shown a PFS and OS benefit. So now we're kind of going backwards to try to find the monotherapy trial, monotherapy subgroup that would correlate with what we saw in that randomized trial. I would imagine that the randomized trial would be very similar to what was published in the Journal of Thoracic Oncology, which would be the kind of paclitaxel alisertib against paclitaxel placebo. That would be my assumption, although it would be one that would be prospectively looking for that biomarker subgroup. So the only patients enrolled would have that biomarker. So it would be similar but different from what was done previously.

Very helpful. Thank you so much.

-- our question-and-answer session. I would like to turn the conference back to Mariann for closing comments.