EDISON INVESTMENT Pone en Valor cada una de las " Piezas " que Conforman el Grupo PharmaMar que sumadas dan un Valor de 1.286.800 euros . Y le Dan a la Compañía un Precio Objetivo de 5,79 euros .

Los Analistas de Edison Investment desglosan el valor del Lurbinectedin ( PM1183 ) y lo valoran en 3,61 euros por si solo .

PharmaMar‏ . Reunión / Conference // Slingshot para tratar los detalles de un año crucial para nosotros.

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Slingshot members are talking to management! The topic is:

A conversation with PharmaMar's Director of Oncology, Newly Hired COO, and Director of Capital Markets to discuss the upcoming pivotal year for the firm.

Ticker(s): PHM.MC, TSRO, CLVS .

Who's the expert?


* Luis Mora Capitán - Managing Director, Oncology Business Unit.

* Pascal Besman - Chief Operating Officer.

* José Luis - Director, Investor Relations & Capital Markets .



Sponsored By: PharmaMar  (OTCPK:PHMMF) .

PharmaMar is a company focused on oncology and committed to research and development which takes inspiration from the sea to discover molecules with antitumor activity. We are an integrated company that seeks innovative products to provide healthcare professionals with new tools to treat cancer.
PharmaMar’s commitment to patients and to research has made it a world leader in the discovery of antitumor drugs of marine origin.

This interview was conducted by Joe McCann, CEO of Slingshot Insights.

Besman: Hello.
Slingshot: Hi, this is Colleen with Slingshot Insights. Hi, do I have Pascal and the rest of the management team on?
Besman: Yep, we're all here.
Mora: Hello.
Luis: Hello.
Slingshot: Hi, everyone.
Mora: Hi.

Slingshot: Gentlemen, thanks so much for taking the time for this call today. We're really looking forward to learning more about PharmaMar and its product pipeline in the oncology space. For compliance purposes, I'd just like to confirm a few key points, which I'll quickly read through and then each of you can grant your verbal consent at the end.
So first, this call is being recorded and a transcript of the call will be available to members of the Slingshot community. Second, you attest that you will not disclose any material nonpublic information or information that will break any confidentiality agreements by which you are bound. So, Pascal, Luis, and José, do you agree to these terms?
Besman: Yes.
Luis: Yes.
Mora: Yes.

Slingshot Admin: Excellent. And Joe, as the call leader, you're also required to keep any material nonpublic information confidential. If you are currently a public company employee or have been employed by a public company within the last 12 months, you attest that you will not share any material, nonpublic information or information that will break any confidentiality agreements by which you are bound. Do you agree to these terms, Joe?

Slingshot: Yes, I do.

Slingshot Admin: Wonderful. Additionally, I'd like to note that this call is intended for informational purposes only. Not investment advice. The content of this call, including any and all information provided regarding individual securities or industries do not constitute financial, legal, or tax advice. All participators are on mute on this phone call with the exception of the PharmaMar management team, as well as Joe, the Call Leader. And with that, I'll let you guys take it away.

Slingshot: Thank you, Colleen. Hi, guys. Good afternoon to you. Thank you for getting on the phone with us today. I'm looking forward to this. Maybe just to give everyone a very quick background, I have your positions at PharmaMar listed on the project page, but if we could just go through and maybe just do 30 seconds on your roles at the company and how long you've been there, before we get into the conversation.

Mora: Well hello. Good morning. I'm Luis Mora. I'm the Managing Director, Oncology Unit, at PharmaMar. I joined team PharmaMar in the year 2000. For six years I was CFO at PharmaMar. In 2007, I was nominated Deputy General Manager, in early 2008, Managing Director in PharmaMar's Oncology area. Before PharmaMar, I worked on a team with the Montedison group in Italy, in the all different pharmaceutical and chemical areas. I was a financial consultant for the group, and my first role I worked in Barcelona at Zambón Pharmaceutical as the Financial Controller, and was CFO in Zambón, Portugal. I've had more than 32 years experience in this business, in pharmaceutical and biotech.

Slingshot: Thank you for coming on.
Luis: Good afternoon. My name is José Luis Moreno. I'm the Capital Markets and Investor Relations Director. I joined the company in 2009. Prior to that I was head of Equity Sales at Benito y Monjardín and afterwards in Banco Espirito Santo. I started my career in derivatives, as a market making, and also prior to joining the company I was working at a local asset management firm in Spain, Solventis, where we also provided consulting to hedge funds. One of the things I did, in my prior post before I joined the company, was the listing Zeltia in 1999, in 1998 in marketing and sales. It was my first contact with the company.
Besman: Joe good morning to you. Pascal Besman, I joined the company about four months ago after 34 years on Wall Street as a healthcare institutional salesperson.

Slingshot: Pascal, you and I have known each other from back when I was on the buy-side at SAC ,and for years, so it's great to be working with you once again on this and doing a call.
I know we have a lot of different levels of familiarity with the PharmaMar story on the line right now, and I think it could be really helpful if we just got a minute or two on the history, and how your products have come about. I know that there's an interesting story that unifies them, so maybe if you guys could walk me through how the company's gotten to where it is today.
Luis: PharmaMar was founded in the late '80s. The vision, the idea of our chairman, who was the founder of PharmaMar, he had this idea about developing drugs from the sea. He's a full biochemistry professor, so he's a scientist himself, and he had this idea that searching in the sea could be a very good source of raw materials to develop drugs. Most of the drugs came from land, so he thought there could be very good opportunities to search in the sea. And at the time he had the opportunity of searching the sea, because he had access to boats from different companies, and he had an opportunity, so that's how we started. That's the origin of the company. That was the idea of our Chairman.
Throughout the years, it's proven a successful idea. YONDELIS® is a clear example of that. It's a molecule that was discovered from a marine invertebrate, from a tunicate. It's reached the market. Throughout the years, we've also built up what is probably the biggest marine library of samples in the world. We have over 200,000 different samples, which are perfectly classified the specificity of all of them. Also the fact that we search in the sea; we only get inspired in by the sea. We only have a few grams of invertebrates, and then we have to synthesize them in the lab.
That also has proven for us - in a sense that has allowed us to develop drugs within a novel mechanism of action. Not only just because of the sea, but what this has proved is that we came up with the novel mechanism of action, that could find a niche in the market, or some of them have proved to be very synergistic with the current drugs being developed. So far the model has worked very well for us, and we're leaders and we're pioneers in searching the sea to develop drugs.

Slingshot: To understand what you're saying there, the inspiration or the knowledge for the molecule comes from the sea, but you guys then synthesize it in the lab and don't actually rely on a marine source for the production of the drug.
Luis: Exactly. Yeah, we just need a few grams as an example to get inspired, and then as you just pointed out we synthesize that in the lab. Unless we are able to synthesize a molecule, and we've seen [inaudible 00:08:10]; if we're not able to synthesize, it's not feasible to develop that. So that will be a red flag to stop it.

Slingshot: Got it. Excellent. I understand that. What things have you gotten from the sea? Can we talk through the key assets of PharmaMar?
Besman: Yeah thanks Joe.

Slingshot: Some people are on the line, I know, have said they're not quite familiar with you guys, and they're excited to learn, so just ... What do you guys see as your major assets? I know YONDELIS® is approved,

Besman: YONDELIS® is our first drug, and it's approved in over 80 countries in the world, something a lot of bio techs can't say. It's approved in Europe for sarcoma and ovarian, in the US we have a partner, Johnson & Johnson, and in Japan, Otsuka through Taiho, which both got only the sarcoma label so far, in the end of 2015. YONDELIS® did last year over $160 million of global revenues, of which we booked about a hundred of it, and it continues to grow and form the basis of a pretty good backbone to the corporation, given the revenue base.
We have an analog of YONDELIS®, a new and improved version shall we say, which is Lurbinectedin. You can call it 'Lurbi', if you want. And Lurbi is in two, soon to be three and four, pivotal Phase 3 trials. The first two indications are in ovarian, which is fully enrolled, with data due to readout second half of the year. Small cell lung cancer, second line is currently recruiting, and we've already stated that we are going to be going into a BRCA2 pivotal trial in due course.
Beyond those two, our marine discovery engine, which José Luis was just talking about, provides really a very rich pipeline of compounds to continue to push through development that we think in some ways is perhaps an eternal source of our pipeline.

Slingshot: That's interesting. Do you think that those compounds will be limited to oncology, and are you aware of any other companies with the synthesizing capability that you guys have been working on? Do you think it's only going to be limited to oncology applications, based on your early findings?
Besman: There's no intuitive reason to believe that mother nature decided to only put oncology drugs in the sea, so we intuitively would believe that there would be applications in infectives or CNS or Cardio, but that will not be something we do.
We are currently investigating business development to license access to the library for people who wish to prosecute it in other areas, but we're exclusively focused in oncology. As for synthesis, it's a very simple word and a very complex process. YONDELIS® itself is 18 steps to synthesize it, so it's not easy. I can't really say who or what has the capability. It's not necessarily totally unique, on the other hand it's not something that you can fall off a log and synthesize one of these compounds.

Slingshot: I think, when I was talking to various members about this call today, one of the most common questions was around Pascal's joining, and I wanted to ask Luis, what got you guys to bring Pascal onboard and to work on a US presence right now, given the stage of the company? I'd just like to hear how that got started, and what the process was like, and what the decision-making philosophy was?
Mora: We announced the strategy for PharmaMar to build the commercial operations in the USA for Lurbinectedin, because it is our key drug. So you know we sell a drug in Europe currently. We have a partners for the other countries, for YONDELIS®, but with 1183, we decided to move to the USA in order to sell directly. This is an important part of the strategy for the company. The other one is we want to win visibility in the USA to engage more consumers, patients, et cetera. When we searched the market, we were looking for the right person to help us to conduct this important study. In Pascal, we thought it was a good decision to incorporate Pascal into our team in order to lead the PharmaMar US strategy. We are very happy to have Pascal with us.
Luis: It may be interesting if Pascal could just give a hint about what your plans are in terms of gaining more visibility with patients and patient associations and trials.
Besman: Yeah. Thank you, Jose Luis. Certainly in the United States market, patient advocacy is very advanced, especially in certain cancers. And in those areas, we are already at relatively advanced stages of negotiating some partnerships that will help us really educate both patients, caregivers and the KOL communities, and really try improve enrollment curves, obviously, and really get the word out.
We're also going to be quite active in various other sponsorships through year of some lesser-known medical meetings. We were a sponsor for example of TAT, Targeted Anticancer Therapies, which is in Paris this week. So there's going to be a much louder noise about us and a louder presence in various areas.

Slingshot: Pascal I understand that strategy, but also what attracted you to PharmaMar? I worked directly on Wall Street for seven years, and lasted that long. What after such a long career, really enticed you to pick PharmaMar of all these clients, and what made you make the jump?
Besman: Thanks. I've known the team here for about a decade, Joe, and I really have been amazed at what they've achieved. When you think about how many biotechs, how few of them actually ever get a drug on one market, let alone 80, that's a very good starting point. In addition, I was very impressed with their professional and personal integrity. The revenue base of YONDELIS® really is a tremendous foundation that very few biotechs, the binary bio techs, who you say that I was working with so many of them, have.
In addition, when I think of lurbinectedin compared to YONDELIS®, I think it's undeniable at this point that it's an active drug. So based on that and the law, the rule of multiplicity, I think the chances of it failing in four consecutive Phase 3s is pretty slim. And if that is going to be the case, that it will succeed at a minimum of one of the Phase 3s, and I think it may be more, then the valuation gap of PharmaMar, compared to what it would be if it was an American biotech, was just too appealing to pass up.

Slingshot: I think that's a great segue, because the biggest comment after the curiosity around your move, Pascal, has been around the listing status of you guys. Madrid isn't a gating factor for a lot people on the phone, but it is potentially a value-disconnecting one. Do you guys have any plans to list? I think I had seen on your Q1 call a mention about an F1, so can you just maybe give us an update, José or anyone, on what the times are for a US listing if there is one?

Luis: When we announced the strategy a few years ago, the five year strategy, among those plans were potential listing or potential IPO in the US. That's the end of roadmap, and we getting the company ready. We haven't really mentioned our calendar or anything. We're just waiting for the right time to do it, in terms of market, price and the calendar of news flow for the company.
But it's a clear decision for us and a clear strategic decision. Going back about two, three years ago, when we decided on the strategy of focusing on oncology, and we set ourselves this goal of bringing two new drugs to the market, as well as YONDELIS®. So going from one compound to three compounds on the market, we had to put the structure of the company in line with the decision of focusing on oncology and making very clear that was our focus, and the rest was non-strategic.
That was one of the reasons why we did the reverse merger, allowing investors to invest directly in oncology. The second reason is whatever corporate movement we did, like an IPO or selling any non-strategic assets, the proceeds will go directly to the oncology company. Then getting the company ready to, as you pointed out, to make a step forward and go in the US. Yeah, there is no roadmap, certainly we cannot talk about our calendar at this point, but we've been working toward that, and when it is the right time from the market point of view, the price, we'll go ahead.

Slingshot: I wanted to talk about the pipeline, and I know that Lurbi is one of the more exciting programs. I think a lot of customers and members of Slingshot on this call, have been on PARP calls with us, whether they're specific to Tesaro or just the overall landscape and things like that. So when we hear about ovarian cancer as one of the first targets, I think a lot of people without doing any diligence, and myself included, think, "Oh, what about PARPs?" Could you maybe talk to us a little bit about the role in that landscape, how these things get approved, and how you guys fit.
Besman: This is a question we get in just about every investor meeting. So let's just remind everyone, you know, a PARP is a DNA repair inhibitor. As such, it kind of makes sense that it would be used after you've used a DNA damaging agent, whether it's a drug or it's radiation. That ties in very well with this new maintenance setting that we hear, which is after the usual platinum frontline therapy, which is a DNA damaging drug, and then you would use a maintenance, which is where olaparib is approved in EU and niraparib currently filed in the US and EU. Unfortunately, even with that maintenance setting, most women will then at some point progress, and be deemed, based on the time into that progression, as either sensitive, resistant or refractory.
Lurbi is seeking a label in ovarian resistance. YONDELIS® has a label in platinum-sensitive, and beyond that second-line setting, which is what we call sensitive resistant or refractory, comes the third-line setting, which is where we're seeing the PARPs again used. Again it intuitively makes sense after another DNA damaging agent, whether it's a rechallenge with a platinum or it's a Lurbinectedin, so that's where rucaparib got approved recently and olaparib is approved as well, in late line with mutation. Does that answer your question about the PARPs?

Slingshot: If I'm hearing you correctly, they're not competing in the same line of therapy, because they're approaching it differently mechanistically. So they complement each other more than directly compete for patients at the various points in their treatment cycle?
Besman: Yeah, that's correct. The PARPs are maintenance and third-line, and both the YONDELIS® and Lurbinectedin are in second-line.

Slingshot: Got it. So the ovarian trials coming up first this year, could you kind of give us a little bit of color on when in the year you think that those trials might read out? I have a few questions on the powering of the study, but ovarian cancer is fairly heterogeneous to the patient population, so when you think about those types of studies, their heterogeneity is one of the scary things for investors. So how do you guys power that, and how do you think about that, and what kind of comfort can you give us, given that backdrop?
Mora: Usually the ovarian cancer population is divided in three types of patients, the refractory to the third line, resistant, and sensitive. YONDELIS® is approved in ovarian sensitive, platinum sensitive. Our trial with Lurbi is for patients resistant to platinum, then this is the setting when we can do the trial.
The trial, we already have finished the recruitment. We included 443 patients in two arms; one is Lurbinectedin and the other arm is the investigator's choice of Doxil or Topotecan. The primary endpoint of progression free survival is powered at 90% of the hazard ratio 0.7. Then we expect to win in PFS very close to 30% in the control arm. We expect top-line results in the last quarter of this year, and we are confident that success in the Phase 2 trial will be the base to design and agree to a Phase 3 trial. The recruitment was very fast, faster than our expectations, then this will demonstrate that there is a huge medical need, and the second one is getting Lurbinectedin direct to the doctors. [missing audio 00:23:26]

Slingshot: The other thing that I noticed, the difference between the Phase 2 and the Phase 3, was the dosing of Topotecan, Topo. I think it was underdosed in the Phase 2, and I'd like to just understand how that came to be, why it was underdosed in the Phase 2? And then with the Phase 3 being daily, how have you guys, again back to the powering and thinking about that, how have you incorporated it?
Besman: That's a good question. So the Phase 2s happened during the period that the Doxil shortage emerged, and therefore the control arm had to be changed from Doxil to Topotecan. Topotecan is not a terribly easy drug to tolerate, and in this Phase 2 trial, while it was determined that the control arm would be an also quite often used Topotecan regime, which is weekly as opposed to daily, and the results for that are usually lessor, although it's more tolerable. And so the PFS that you see in our Phase 2s, of 1.7 months and the OS of 8.3 months are both, we acknowledge, lower than you would get with a daily Topotecan, which is part of our control arm in the Phase 3, the other part being the Doxil, which is no longer on shortage.
When you look in the literature at how Doxil and Topotecan have done in this population, it seems to be relatively constant in the highish two to lowish three months, and most seem to congeal around three months for Topotecan, 3.2 for Doxil. So the way we think about this is, if you take the highest that you get in this population, usually with Doxil, that would be about 3.2 months. To generate a hazard ratio of 0.7, back of the envelope math would say that's about a 50% improvement, 3.2 times 150% would see the drug arm need to be around 4.8 months, and that's about a 20% decrement to what we saw in the drug arm in the Phase 2. So we think that the trial is adequately powered to pick up the benefit that we expect to deliver, and the trial is stratified, so that we will have meaningful numbers of both Topotecan and Doxil.
Slingshot: So when you say 20% decrement, you mean basically that there's a 20% cushion based on the Phase 2 results to hit the powering in the study.[crosstalk 00:26:08]
Besman: I said we would need to be 50% better than 3.2 is 4.8, and we showed 5.7 months PFS.

Slingshot: Got it. So it's a pretty good cushion. Okay. Let me go on over to the BRCA2 trial, how are you guys thinking about enrollment there, and does the existence of PARPs and other PARP treatment out there, how much does that cloud the patient population? Does it make it harder to find them, or are those patients further down the line? How do you guys think about enrolling a trial like that right now?
Besman: Also a question that's asked quite a bit. The data that we presented at ESMO last year saw the objective response rate in the breast cancer, BRCA2, was 67%, 61% which was really eye-popping because most of the data we've seen so far has only been in BRCA per se. We know that BRCA2 is a tougher diagnosis than BRCA1, and we know that the PARPs have delivered objective response rates of the order of 25ish to maybe 30% in BRCA. So the 60-odd percent response rate was really eye opening, and with that in our pocket, we have met with the FDA and are finalizing a protocol that would see a single arm trial of 110-odd patients, with a single arm and an objective response rate endpoint.
So to your point about how easy or hard will it be to enroll this trial; it's hard to really give an answer, because no one's done it. That said, there's probably a population in the United States of about 7,500 women who meet our enrollment criteria, which would also have no prior PARP, and about 50% more than that, about 11,000 in Europe.
So we do recognize, it's likely to be challenging and for that we have already signed contracts with two leading patient groups, with a view to them helping us pick investigators, pick sites, educate their women, help get the word out that a trial is open, that it's a targeted therapy for BRCA2. And they're very enthusiastic about helping their members and working with us collaboratively, and we will be able to use their names publicly, so that people know that we are working with them.
So we're quite excited about that, and in addition, we're planning on opening an expanded access parallel trial to this, so that any woman who is BRCA2, who is ineligible, because she's had prior PARP, for example, will still be able to get Lurbi. We think that that really is something that will resonate with the patients advocates and the KOLs.

Slingshot: Yeah so that's interesting. I'm not as familiar with that, and you had mentioned it to me recently. Maybe if you could just talk a little bit about that. Is that any pharmaceutical company can make that decision or does the FDA approve it? It sounds a little bit like "right to try" to me that I hear thrown around a lot from the current administration in the US. How exactly does that program work? Maybe just a little bit ... That does sound like it could be interesting.
Besman: It's not "right to try" because the FDA is involved in allowing you to do this. If we go back a couple of years ago, there was an unfortunate situation with another public biotech that had a Phase 3 asset in CMV. A child had CMV and wanted to get access to the drug, and the company stated that they did not have a pediatric arm to put the child in. It became very much a viral news story, social media story, and ended up, unfortunately, costing the CEO his job. And to cut a long story short, the boy got the drug, the boy got cured, thankfully, the Phase 3 failed, and we'd like to avoid that situation happening to us.
So we've already spoken to the FDA, and we would like to have an expanded access trial on the side, here, and that will allow BRCA2 women who don't meet the eligibility criteria to enter, and they can be treated. It will help us collect a larger safety database. It will help us do analytics in terms of other subsets that may work, sequencing compared to PARPs, before/after/during. In addition, probably most importantly, it's the right thing to do.

Slingshot: I think that's pretty interesting. Okay. The third trial here, currently is small cell, and there's a change in the dosing in primary endpoint from Phase 3 to Phase 3. Could you just talk to us a little bit about why that was done, and what was done for progression free survival powering given this change? Again, just trying to understand these small but potentially important differences.
Mora: Yeah sure. This is an important change in the Phase 3, but I think it's in favor of the patients and in favor of the trial. In the Phase 2, we use a flat dose, seven milligrams per square- seven millimeters flat. We analyzed all of the patients, and the equivalent, because seven milliliters flat dose is the actual dose in the trial by a square measure. Then, this is personalized more to the dosing in the patient and not to the activity. Then we reduced dramatically the secondary effects we observe in the Phase 2, but non detrimental objectivity.
And then the second point is, we met with authorities, with the FDA, and the response rate is important but in small cell lung cancer, they consider it is an approval endpoint of PFS. We have extremely good PFS in Phase 2. We have achieved 4.6 months if you consider our resistant and sensitive patients in this Phase 2. Then if we consider only the sensitive, we never disclose, but you can suppose it is much higher than this 4.6. If you compare this 4.6 with the historical data for Topotecan, nivolumab, pembro, Rova-T, they are smaller numbers than our PFS. We designed the trial and powered it for progression free survival, primary endpoint, and overall survival as a secondary endpoint. The trial was agreed to by the FDA, and Pascal mentioned before is well underway.

Slingshot: Great. On the business development side, I saw the press release with the deal in Japan, and it seemed to kind of go under the radar just looking at the stock and some of the things that I watch, in terms of analysts and things. I wanted to just get a sense on what you guys thought of that business development deal. I have a technical questions, actually from another member, but what kind of structure partnerships are you looking for, going forward, for Lurbi? Is Japan a one off in terms of partnering, or ... I'm trying to get a better sense of the structure you guys have in mind, for how you want to bring Lurbi to market, considering how much of the economics you own currently. And whether we should think of Japan as indicative, or just a one off, a nice cash deal?

Besman: I'll answer the first portion, and José Luis will answer the second. In terms of how we think of the deal and what the market thinks of it, we were fortunate to sign the deal December 22nd, and we were unfortunate to sign the deal December 22nd because obviously many people were already on their holidays. But it is what it is, and we were happy to cash the check regardless of the day the deal was signed.
Japan represents approximately 10% of the world's oncology market, so I think most people can do the math and work out what Chugai, which is part [missing audio 00:34:42], and what the asset was worth, and that probably means a lot more than what we think it's worth. We're delighted to have Chugai, which is the leading oncology player in japan, as our partner. And in terms of other business development, and what our plans are for Lurbi, I'm gonna let José Luis answer that one.
Luis: We have a very clear idea about our intention in the US for instance, as compared to YONDELIS®. Luis mentioned before, our idea is to keep commercial rights in the US, so therefore, set up our own sales force, and sell direct. We could either do it on our own, or obviously since we started showing Lurbi's data, we've been approached by different companies and stuff and conversations. So we had a good deal, and what we can say is something very good. We also are contemplating co-promotion agreements. There's early conversations for that, and that's our idea.
We reached the this point where we are releasing data on Lurbinectedin, two in Phase 3, perhaps another one starting shortly, so we're very confident about comparing the drugs, and we have experience of building up YONDELIS® in Europe, which has been successful. We have a very successful sales force, and believe me, building up a sales force in Europe is a complete nightmare. I mean you have to go country to country, you've got 27 languages, all different regulations, then once you get the approval, you have to get the reimbursement in every single country. Even in countries like Italy or Spain, it's not even a single country, it's every single region, which is a nightmare. And we succeeded. Not that many companies have reimbursement in almost all countries in Europe, in sarcoma, including positive recommendation from the NICE in the UK.
I think we gathered all that experience, and in the US, it's more straightforward. It's one country, one language, and all the reimbursement with insurance companies is much more straightforward than it is in Europe.

Slingshot: I spent a lot of time following the Intermune pirfenidone launch when that became the key story going through Europe, and it was pretty incredible to watch how many years and how managerially challenging that was compared to a US launch when you turn on a switch. So that's an interesting background view to be coming at this from.
One question technically, just on the Japanese deal, in terms of the way you guys counted the money, was it 30 million up front, but I think only 6 million went in in 2016, so is the other 24 going in, or are we reading that wrong? That was submitted from somebody listening.
Luis: I mean, that's pretty clear and very straightforward. With the new IFRS that is implemented, in regard to all these type of agreements, we need to recognize or account in our accounts the amount that is linked to all the commitments we have throughout the agreement. That means, we only accounted for 6 million in 2016, and the rest, 24, will probably be recognized within the next couple of days.
As Pascal said, we were lucky enough to sign that in December '16, but the good thing, which is more important for us, is that the cash was in-house, and we cashed the 30 million just a few weeks after. So it was the first half of January, when we got the 30 million, and that was a very important grant. Because yes, in terms of the accountants, and obviously the P&L did not reflect the 30 million, but from the cash position point of view, if we take the 33 million that we released for the year 2016, and we add 30 million, we have a total of 63 million that would have been proforma as of December, and is what we can really have. And that, given our burn rate, that we released of 8.4 million is clearly a very comfortable position for us, at least the next few years to get to our goals that we set ourselves- as we mentioned before of getting the next two compounds on the market.
From that point of view we're very comfortable with our capital and cash structure, and that allow us to concentrate, basically, on our trials and not to worry about the cash.



Slingshot: Great. I think you already answered, also for anyone listening on the line right now, we're through the questions that I mapped out, which a lot of that was from input of other people listening, but I'm onto the section of things that have been submitted mostly during this call on the project page, so if anybody still has a question, I'll ask that right now. Just for anybody new to these types of calls.
I think that one of the questions that came in, you just answered in terms of your expansion plans in the US, but there is sometimes a nuance with US pharma companies between co-promote and go alone, and so I wanted to see if you guys did have any intentions or considerations around co-promotion in the US for Lurbi, and if they are, I guess they want to know how advanced they are, but I'd be surprised if you want to answer that.
Besman: It's a question we get asked. Obviously, it's nice to have a beautiful daughter that people want to marry. We intend at this point to hang onto Lurbinectedin rights in the United States and build a commercial infrastructure around that. And as Jose Luis said, we think that given our experience of doing this with the complexities in Europe, that we can do this.
On the other hand, we are also very willing to talk to people, who think that our daughter is as beautiful as we think she is provided they have a nice, big dowery, we're willing to talk. But this is our daughter, and we care very much about our daughter.
The other thing that I would say, which is perhaps the flip-side of this, is that the sales force that we've built up over the years in Europe, is a truly strategic asset that we think can be leveraged with other companies who may have a European oncology asset that may not have enough peak sales to justify the critical mass required to have that same infrastructure, and so there's an opportunity there for us to leverage that existing sales force.

Slingshot: Another question here: Are you guys giving any update on the progress of the EMA review for Aplidin? I remember, again, back to the pirfenidone days, kind of going in and asking, "Have the minutes come? Have you guys presented? Where does that stand?" So I don't know if you guys are commenting on that. I don't think that's that common, but is there any update on the progress there?
Mora: Aplidin is in the regulatory process. We submitted the dossier last year. The dossier enclosed the ADMYRE trial, the trials in multiple myeloma, three prior lines. The trial was agreed with EMA, and the trial we announced was a positive trial. Then the regulatory process in Europe is dead, it's in an orphan status, and multiple myeloma is longer than in the USA, unfortunately, and can take about one year. Then we expected the CTMP opinion in the last quarter of this year. So today is in the normal regulatory process, the question and answer from the authorities, and that's it, when we have that, when we have the decision by the CHMP we will announce, and we expect that to be in the last quarter of this year.
The multiple myeloma is an interesting market in this line because there's not many drugs that are approved with three prior lines. Aplidin is a unique mechanism of action, completely different to the other drugs as a protozoan inhibitor. It is not like the lenalidomide families; it's a target therapy. We described it in Nature, last year, and it's safety profile is very good, and can combine with the other drugs.
The market in the three prior lines in Europe is growing after some approval in Europe, and we are working with with Chugai- we have a deal with Chugai Pharma for co-promoting to some countries in Europe.



Slingshot: Here's another one that came in that's interesting to me a little bit: Pascal what's kind of the biggest surprise you've had going over to PharmaMar, and maybe your biggest frustration switching to the corporate side, after so many years on Wall Street? What have the first few months been like for you?
Besman: I've enjoyed it very much. I guess the biggest surprise has perhaps also been my biggest frustration, is that there persists to be quite a number of Real Madrid supporters here. I just don't understand it. None in the room, I hasten to add.
I think that the biggest surprise here has been the absolute willingness to accept change, and not have "not invented here syndrome". I find it really remarkable that they are very very open to listening to ideas. For example, patient advocacy, as you may well know, in Europe, especially in southern Europe, is just not even in its infancy yet. It's not even in utero, shall we say. Whereas in the United States, it's incredibly well organized. I think it's quite a feather in our collective caps that in the four months since I've been here, we've embraced the change to do this, and we've already signed two contracts. So that would be something that has really surprised me.

Slingshot: I think there's just one question here, around burn rate, and they quoted a number, but maybe of you guys could just talk about the company burn rate. I know it's in some of the slides, but you know, what it was for 2016, and if you guided it all around '17, but maybe just help to clear up exactly where you guys are in a cash position.
Luis: We don't do guidance for 2017. Burn rate at our operating level last year was at 8.4 million, and that meant -all that taken into account 30% increase in R&D investment. So last year in oncology was 78 million. One thing we can say was that this year the R&D investment is not gonna grow at the same rate. We're talking about single or lower double digits, so it's not, definitely not growing at the same rate. We spent revenue from YONDELIS® carry on growing at single digits, so from that point of view ... Now burn, we have zero guidance, but should not change that much, and as we mentioned, with the cash that we have already, we have for the next few years a pretty comfortable position.
As for the debt that we have, also we think we're moving the debt pretty nicely. It was a little below 20 million that we refinanced this year, to term debt. By the time we start our [inaudible 00:47:48] 20 million that we need to give back and we've been renewing that pretty nicely, so it's not a problem either.

Slingshot: I think we're coming up on the time here for the call, and I've gotten through most of the questions on the site. Maybe we can just wrap up with any key takeaways that you have and the biggest catalyst coming up on 2017.
A lot of Slingshot members will know how we do our best to organize and structure catalyst events for every stock that we have, in order to give people an idea of when value creation events are going to happen. So some of those are on the project page associated with this, but if you wanted to walk through what you guys see as the most important and exciting catalysts through the rest of this year that could be a good way to end this.
Besman: Sure, so let's just do these, rather than chronologically, by importance, and certainly the most important read this year, catalyst this year, will be the Lurbinectedin Phase 3 data in ovarian cancer, which we anticipate in fourth quarter. It's by the way, not just an event driven in terms of the timing, when one compares to when the last patient's last visit was, because we are also looking to deliver a significant OS dataset to support the application. So it will be quite more mature than you would think in terms of OS.
We also, in probably the fourth quarter, will get the answer from EMA, we think, on the Aplidin application. And probably around the middle of the year, in small cell you'll get a couple of things of interest. You'll get an interim look, which is a futility look only, and in addition we should, at one of the mid-year-ish medical meetings, have some further supportive data of Lurbinectedin in small cell. And then lastly, at some point during the year, we can't really control timetable totally, we should give an update and hopefully have started the breast cancer trial. Those are the main ones for this year.

Slingshot: Great. That's all the questions I have and that I see coming in. Again thank you very much. I know you're very busy, and I appreciate the time to come on and talk to both myself and our community. It's pretty neat to have this kind of access, directly to an exciting story, and so I think the next things that that we have talked about are potentially our KOL call, which is something that the members of Slingshot are a little bit more familiar with, but maybe digging into some of the Lurbi data, ovarian and other diseases. So, we'll be back reaching out to people with that. But in the meantime, I just want to thank you very much again for taking the time. This was great.

Besman: Thank you, Joe. Thanks, listeners. We enjoyed doing it.
Luis: Thank you.
Mora: Thank you very much.
Slingshot: Perfect. Thank you, guys. Have a great afternoon.