CASI Pharmaceuticals, Inc. Q3 FY2020 earnings call

Key Points

• CASI is pleased with progress in clinical and corporate aspects. The team is dedicated to building a leading biopharmaceutical company.
• Pursuing assets with proven targets and low clinical/biological risk, being opportunistic in hunting for additional pipeline assets. Focus on products fitting global drug development competency, leveraging China's clinical development and patient population.
• Business development approach includes investment in partners, deepening collaboration. For example, CASI is a major shareholder in Juventas and BioInvent.
• EVOMELA revenue for Q3 is $4.2 million, full-year 2020 expected over $14 million. Post-market study of EVOMELA in progress, expected to complete enrollment by end of 2020.
• Pipeline updates: CNCT-19 partner Juventas expects to initiate Phase 2 registration trials by end of 2020; BI-1206 in-licensed for Greater China, with joint development plans; CID-103 preclinical study completed, Phase 1 study expected in Q1 2021 in U.K. and France; Octreotide registration trial on track to start Q4 2020, Thiotepa registration trial planned for 2021; Wuxi manufacturing facility construction underway.

In the third quarter, CASI recorded EVOMELA revenues of $4.2 million. For the full year 2020, the company expects to exceed $14 million in revenue from EVOMELA, which is its first commercial product. EVOMELA is approved in China for high-dose conditioning treatment prior to hematopoietic stem cell transplant in multiple myeloma patients and is the only form of melphalan commercially available in China.

Forward-Looking Statements

• EVOMELA full-year 2020 revenue expected to exceed $14 million, surpassing previous forecasts.
• CNCT-19 partner Juventas expects to initiate Phase 2 registration trials by end of 2020, earlier than previously forecast.
• CID-103 Phase 1 study expected to start in Q1 2021 in U.K. and France.
• Company has sufficient cash to fund operations at least through 2021.

Risks

• COVID-19 pandemic could impact operations, supply, resources transportation, clinical sites where studies are conducted. No assurance that pandemic won't affect these areas, but the company will respond and adapt.

Q: Provide more color on EVOMELA's commercial opportunity, like percentage of hospitals/doctors targeted and growth potential?

A: EVOMELA is in early commercialization in China. Re-educating physicians on transplant as first-line treatment. Autologous transplant potential limited by transplant centers, but secondary hospitals are building them. Also exploring other indications for melphalan.

Q: Elaborate on BI-1206 deal structure, development responsibility?

A: CASI is responsible for development in Greater China, true collaboration with BioInvent, joint steering committee to dictate studies. CASI bears clinical costs in China.

Q: Still looking to in-license additional products? Timing and markets?

A: Open to in-licensing, not limited to Greater China. CID-103 has global rights. Will be opportunistic, looking for multi-billion dollar global assets.

Q: EVOMELA sales run rate, market size for drugs?

A: EVOMELA Q3 sales $4.2M, first full year of commercial activity. CAR-T 19 market total is around 30,000 patients annually, but pricing and reimbursement are variables. CD38 market is large (J&J doing ~$3B), but data needed for CID-103 to be confident.

Q: Timeline for CID-103 clinical studies in U.K. and France, reporting?

A: Sites in France operating without much COVID impact, U.K. affected but first patient expected in Q1 2021, dose escalation study to carry on into 2021. No data reported until dose escalation portion is finished.

Q: EVOMELA use in non-transplant settings, gross margin improvement?

A: No specific data on EVOMELA use in non-transplant multiple myeloma settings. Cost of goods sold reduced in Q3 due to shift to lower cost manufacturer, expect continued margin improvement.

Q: Out-licensing strategy for CID-103 ex-Greater China rights?

A: Opportunistic, will look for partners with strong market access to other markets when clinical data supports, but dependent on data and interest from suitors.