TESARO's (TSRO) CEO Lonnie Moulder on Q4 2014 Results - Earnings Call Transcript $TSRO
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TESARO, Inc. (NASDAQ:TSRO)
Q4 2014 Results Earnings Conference Call
February 19, 2015 4:15 PM ET
Executives
Jennifer Davis - Senior Director, Corporate Development and IR
Lonnie Moulder - Chief Executive Officer
Dr. Mary Lynne Hedley - President and COO
Tim Pearson - Chief Financial Officer
Analysts
Evan Siegerman - Deutsche Bank
Yaron Werber - Citi
Chris Raymond - Robert W. Baird
Eileen Flowers - Jefferies
Peter Lawson - Mizuho
Tony Butler - Guggenheim Partners
Howard Liang - Leerink
Presentation
Operator
Good afternoon. And welcome to the TESARO Fourth Quarter and Full Year 2014 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference call is being recorded and webcast.
I’ll now turn the call over to Jennifer Davis, Senior Director of Corporate Development and Investor Relations at TESARO. Please go ahead.
Jennifer Davis
Thank you, Brandy. Good afternoon. And thank you for joining us today to review TESARO's fourth quarter and 2014 operating results. I'm joined today by our CEO, Lonnie Moulder; our President and COO, Dr. Mary Lynne Hedley; and our CFO, Tim Pearson.
Earlier this afternoon, we issued a press release detailing our fourth quarter and full year results. Please note that this press release and the slide presentation that we will refer to during this conference call are both available in the Investor section of our website www.tesarobio.com.
Before we begin, I would like to remind you that discussions during this conference call will include forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause our actual results to differ materially from those described in these forward-looking statements and we undertake no obligation to update or revise any forward-looking statements for any reason.
The factors that could cause actual results to differ are discussed in the press release issued today and in our SEC filings, including our annual report on Form 10-K for the year ended December 31, 2013.
We may refer to certain non-GAAP financial measures that involve adjustments to GAAP figures. These non-GAAP financial measures are not a substitute for GAAP financial measures and are unlikely to be comparable to the non-GAAP information provided by other companies. We believe non-GAAP measures may be useful to investors as a supplement to, but not as a substitute for the applicable GAAP number.
I’ll now turn the call over to Lonnie Moulder, CEO of TESARO. Lonnie?
Lonnie Moulder
Thank you, Jen, and thank you everyone for joining us this afternoon. I'll briefly comment on the significant progress made by the company during the fourth quarter and on the milestones we anticipate for 2015. Tim will discuss our financial results. Mary Lynne will provide an update on our strategy with regard to our rolapitant, niraparib, TSR-011and immuno-oncology programs. And finally, I will provide an update on our launch preparations for rolapitant and then open up the call for questions.
In 2014, TESARO expanded and advance a pipeline of differentiated product candidates and is now poised to transition and become an integrated development and commercial stage company. With a product before the FDA, the most expensive PARP inhibitor development program in ovarian cancer and an exciting early-stage pipeline 2015 will be a pivotal year for TESARO.
Over the course of this year, we expect our first product launch of rolapitant, which may address a substantial opportunity in the U.S., initial data from our first Phase 3 trial of niraparib in ovarian cancer, the initiation of trials to expand the niraparib development program into two new tumor settings, additional data for TSR-011 in patients who have not previously been treated with an ALK inhibitor and continued preparation to support IND filings for our immuno-oncology candidates.
With $257 million in cash and an experienced team we are very well-positioned to continue to execute on our first product launch and on our development programs to create value for patients with cancer, healthcare providers and shareholders.
I will now turn the call over to our CFO, Tim Pearson to review our fourth quarter and full year financial results. Tim?
Tim Pearson
Thank you, Lonnie. For the fourth quarter of 2014 TESARO reported a net loss of $47.9 million, compared to a net loss of $23.3 million for the fourth quarter of 2013. This net loss was primarily driven by the expansion of our pipeline and workforce, which led to the higher R&D expenses and higher G&A expenses, compared to the year ago quarter, as well as in-process R&D expenses.
Research and development expenses increased to $29.8 million for the fourth quarter of 2014, compared to $18.9 million for the fourth quarter of 2013. Mainly as a result of higher cost related to our expanded development activities for niraparib, our immuno-oncology programs and increased headcount, which were partially offset by lower cost from the oral rolapitant Phase 3 program.
General and administrative expenses increased to $7.4 million for the fourth quarter of 2014, compared to $4.5 million for the comparable period of 2013, primarily due to the increased headcount, higher professional service fees and pre-launch commercial activities in support of oral rolapitant.
Also included in 2014 fourth quarter is $7 million of acquired in-process R&D expense related to the regulatory milestone paid to OPKO for filing of the rolapitant NDA with the U.S. FDA. And an upfront payment made to AnaptysBio related the expansion of our immuno-oncology program.
Of note, our interest expense increased to $3.7 million for the fourth quarter of 2014, primarily due to the accrual of interest and the amortization of debt discount associated with the convertible notes that we issued during September 2014. We will continue to incur increased cash and non-cash interest expense related to these notes going forward.
On a quarterly basis in 2015, we expect the cash and non-cash interest expense to total approximately $4 million. Total non-cash stock-based compensation expense included in our operating expenses for the fourth quarter of 2014 was $3.1 million, compared to $2.7 million for the fourth quarter of 2013.
Turning now to our full year 2014 results, TESARO reported a net loss of $171 million for 2014, compared to a net loss of $92.4 million for 2013. As with the fourth quarter, increased cost for the full year 2014 were primarily driven by the same three factors as mentioned for Q4, R&D expenses, G&A expenses and in-process R&D.
As of December 31, 2014, TESARO had approximately $257 million in cash and cash equivalents approximately $36.1 million outstanding shares of common stock. For the first half of 2015, we expect that our average cash utilization will be in the low $40 million range per quarter and will increase in the second half of the year.
We intend to higher a full scale field organization during the third quarter to support the launch of oral rolapitant. With the September 5th PDUFA goal date, we are planning for fourth quarter commercial launch.
We expect initial stocking order to occur during the fourth quarter followed by inventory drawdown and reorders during the first quarter of 2016 as oncologist gain experience with rolapitant. We would then expect to see increased demand driving product pull-through as the launch continues.
With that, I will hand the call over to Mary Lynne.
Dr. Mary Lynne Hedley
Thank you, Tim. We continue to make significant progress in advancing our pipeline during the fourth quarter. I will now review each of our programs and speak to our plans for the rest of this year.
Beginning with rolapitant, as you know, our NDA for oral rolapitant is now under review by the FDA and we have a PDUFA goal date of September 5, 2015. Our work on the IV formulations of rolapitant continues and we expect to complete the ongoing clinical study comparing the exposure of the rolapitant IV and oral formulations by midyear.
This quarter we also plan to initiate a safety study of IV rolapitant to support submission of the IV NDA following approval of oral rolapitant. We continue to expect that IV rolapitant will be launched approximately one year after the oral formulation becomes available.
Moving on to niraparib, our PARP inhibitor, enrollment is ongoing in two Phase 3 trials of niraparib, the NOVA trial the patients with platinum sensitive, relapsed ovarian cancer and the BRAVO trial for patients with germline BRCA positive breast cancer.
We have planned to extend the niraparib clinical program over the course of this year with the initiation of new trial for ovarian cancer treatment, first line ovarian cancer maintenance and small cell lung cancer. In 2015, we also expect to have initial data from NOVA, a Phase 3 trial of niraparib in a recurrent platinum sensitive ovarian cancer maintenance setting.
I'd now like to spend a few minutes discussing our niraparib program in more detail. We are very enthusiastic about the potential for niraparib. We believe that phase 1 data describe a potentially best-in-class product with the highest observed RECIST response rate and most durable responses thus far reported for a PARP inhibitor.
With the 75% RECIST response rate at the recommended dose among patients with platinum sensitive high grade serous ovarian cancer and 50% RECIST response rate across dose levels in patients with platinum sensitive ovarian cancer and germline BRCA mutations, we believe the phase 1 data clearly support our phase 3 study design. Importantly, responses were achieved in heavily pretreated patient population. Patients in this study had a median of six prior therapies and the median duration of these responses exceeded 400 days for platinum sensitive patients regardless of BRCA status.
Our phase 3 dosing regimen is 300 milligram dosed as three capsules, once per day. This compares favorably to the twice per day dosing of several other agents in this category, which require many capsules or tablets per dose. We are conducting a comprehensive development program in ovarian cancer that includes trials in both the ovarian cancer treatment and maintenance setting.
Importantly, these trials are enrolling the broadest patient population that we believe could potentially benefit from a PARP inhibitor, including patients with and without germline BRCA mutation. And we are evaluating a new genomic-based biomarker, the HRD assay, to identify patients who could be sensitive to niraparib. We expect that there will be opportunities for interesting combinations of niraparib with other agents that may offer complementary approaches.
Our collaborators from ENGOT will soon begin investigating niraparib in combination with bevacizumab in patients with platinum sensitive high grade serious ovarian cancer. And we continue to work with PARP to evaluating the combination of niraparib plus temozolomide in patients with Ewing's sarcoma.
We have selected the myChoice HRD test for Myriad as a tumor marker classifier for use in our niraparib clinical program. We are using this test to expand the identifiable patient population who might benefit from niraparib beyond those with germline BRCA mutation.
In our view, this test offers the most robust approach to identifying patients with homologous recombination combination deficiency or HRD that maybe sensitive to a PARP inhibitor. The assay is based upon the application of three algorithm, each assessing chromosomal scarring and collectively defining a degree of HRD within a tumor sample.
The distribution of HRD scores from over 500 ovarian tumors present with an obvious bimodal distribution that delineates homologous recombination deficient and proficient tumors. This enables clear establishment of a cut-off value to define HRD status, which maybe important from a regulatory of practical application perspective.
We believe that partnering with the team at Myriad, which has demonstrated success in achieving the first regulatory approval and successful marketing of complex genetic test is a winning strategy for patient.
The NOVA study is our most advanced phase 3 trial of niraparib. This trial is enrolling patients with recurrent platinum sensitive ovarian cancer into two cohorts, those with and without germline BRCA mutation. Enrollment of the originally planned 180 patients into non-germline BRCA cohort is completed earlier than originally planned in the first quarter of 2014.
Enrollment in this cohort was than expanded to a total of 310 patients to increase the number of patients expected to have HRD positive tumors. Our current assumptions are that approximately 60% of patients with recurrent platinum sensitive ovarian cancer maybe HRD positive including 35% to 40% of patients without germline BRCA mutation. The NOVA protocol prospectively defines a statistical analysis of HRD positive patients and has a 90% power to check the hazard ratio of 0.5 for PFS.
We continue to expect that the expanded non-germline BRCA mutation cohort of patients will be enrolled during the first quarter. And I anticipate that the germline BRCA mutation cohort of patients will complete enrollment shortly thereafter. The primary endpoint of the NOVA study is event driven and we expect to provide a more precise estimate for the timing of the PFS analysis during the first half of this year.
QUADRA, a new trial to support registration of niraparib for the treatment of patients with recurrent ovarian cancer has received IRB approval and is ready to begin. QUADRA is targeted to enroll approximately 225 patients, who have received three or more prior lines of chemotherapy, including platinum sensitive and platinum resistant patient.
Objective response rate and duration of response will be effect in all patients and in HRD positive in germline BRCA mutation carrier subsets. As you know, niraparib was approved in the U.S. earlier this year for the treatment of ovarian cancer patients with germline BRCA mutations who have previously been treated with three or more prior chemotherapy. Of the 137 ovarian patients treated with niraparib, the overall response rate is 34% with a median duration of 7.9 months.
In niraparib phase 1 trial in patients with germline BRCA mutation treated with greater than or equal to three previous chemotherapies, the overall response rate was 50% with the median duration of response of approximately 14 months. As you can imagine, investigators are showing high levels of interest and enthusiasm for the QUADRA trial. And we look forward to keeping you apprised of its progress.
We plan to initiate our first line maintenance study of PRIMA trial in patients with ovarian cancer in the second half of 2015. Patients with tumors that contain a germline BRCA mutation or are HRD positive will be eligible for enrollment, following a response to their first line platinum based regimen.
The primary endpoint of PRIMA is PSF and the trial is sized to have greater than 90% power for housing ratio of 0.65. We believe our planned and ongoing studies in multiple ovarian cancer indications could address a potential 40,000 patient market opportunity across the U.S. and Europe. Our program includes patients with tumors classified as germline BRCA mutant, HRD positive and platinum sensitive.
We estimate that the total market approximates $4 billion for these three ovarian cancer indications based upon the price of the currently approved PARP inhibitor. Ovarian cancer is an area of significant unmet need. And we believe niraparib may represent a major event in the care of these patients.
Moving on to BRAVO. Patients continue to enroll on the BRAVO trial and we expect that that enrollment will continue throughout 2015. The BRAVO trial could enable a potential indication for niraparib that addresses approximately 20,000 patients into U.S. and Europe. At the same pricing for the approved agent in this class, adjusted for anticipated duration of therapy. We estimate that the opportunity in germline BRCA mutated breast cancer exceeds 1 billion annually.
I will now turn to TSR-011. We continue to evaluate TSR-011 in an expanded Phase 1 cohort of ALK positive, ALK inhibitor-naive patients at a total daily dose of 120 milligrams. We have demonstrated activity in patients who progressed on prior ALK inhibitor therapy and we believe TSR-011 may have a best-in-class tolerability profile.
Over the next few quarters, our focus will be on dosing patients who have not been previously treated with an ALK inhibitor, using our control to release formulation of TSR-011. This work should position us to be able to make a decision about a potential registration program further this year.
And finally, we are advancing IND enabling studies with TSR-042, our anti-PD-1 candidate, as well as our lead anti-TIM-3 and anti-LAG-3 antibodies. And we are working to identify lead Bispecific Antibodies, targeting PD-1 and TIM-3 and PD-1, LAG-3. We expect to file an IND for TSR-042 at the end of 2015. And we plan to advance an additional antibody candidate into clinical trials every one to two quarters thereafter.
Activities continue in support of preclinical combinations of our anti-PD-1 antibodies with other targeted agents. And discussions are ongoing with several parties who have approached us about conducting studies that combined our immuno-oncology molecules with various candidates.
And with that, I will turn the call back over to Lonnie.
Lonnie Moulder
Thank you, Mary Lynne. With a single dose that provides protection from CINV with the full five-day period of risk, a reduced risk of CYP3A4-mediated drug interactions, both oral and IV formulations and development and the flexibility to be used with any approved 5-HT3 receptor antagonist therapy, we believe rolapitant represents a potentially meaningful contribution to the care patients receiving emetogenic chemotherapy.
In addition, we will be partnering with the leading oncology customer groups for market research and data services in order to successfully position rolapitant at launch. When approved, rolapitant will address a market of approximately 5 million day one targeted doses of emetogenic chemotherapy annually in the United States. These doses consist of cisplatin, AC-based regimens, primarily for patients being treated for breast cancer and certain carboplatin regimens, such as for patients being treated for ovarian cancer.
Importantly, the Antiemetic Guidelines that have been established by leading oncology care organizations currently support the use of NK-1 receptor antagonist in each of these settings. Our goal will be to educate oncologists and nurses about the need, which is supported by substantial data to fully protect at-risk patients as outlined by the guidelines and to appropriately communicate the differentiated profile of rolapitant.
We now have in place our commercial leadership team, including Heads of Marketing, sales and market access and medical affairs, and a number of pre-launch activities are well underway. We plan to launch rolapitant with a full commercial organization, including our field sales force and appropriate medical affairs, marketing, reimbursement and account team support, totaling approximately 120 associates.
We intend to use this team as the core for all of our oncology product commercial launches going forward. This organization will be an asset that can generate significant leverage for TESARO. We are excited about the rolapitant business opportunity at the weighted average pricing for the current NK1 marketed formulations.
We estimate that the market opportunity for rolapitant is approximately $1.5 billion in the U.S., given our team's experience within the CINV market and the differentiated profile for rolapitant. We believe we can achieve a meaningful share of both the oral and IV opportunities.
With that, operator, at this point, can you open up the call for questions?
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] Our first question comes from Robyn Karnauskas from Deutsche Bank. Your line is now open.
Evan Siegerman
Hi, guys. This is Evan on for Robyn. Congratulations on -- lots of progress last year, a few questions. So, could you just help me understand -- I know, Lonnie, you gave us a lot of color regarding the commercial ramp up for rolapitant. But what are you doing specifically to really increase physician awareness of CINV and any other -- when can we kind of start to expect meaningful sales of the product?
Lonnie Moulder
So from a physician awareness standpoint and just to be clear, it’s not just physicians, it includes, of course, nurses who are quite critical to the support of cancer patients and pharmacists that are involved in assisting with clinical decisions relative to pathways. So there are non-rolapitant initiatives that are intended just to bring general awareness to CINV.
Evan Siegerman
Okay.
Lonnie Moulder
It’s been a little while since there have been significant promotional or educational activities in support of the whole CNIV field. So those activities are actually beginning shortly. As we head into the actual launch though, the initiatives will not just be ours, it will be what we do in partnership with the large oncology networks because the strategy is really to work with them to assist in putting in place the right pathways and quality measures that are aligned with the guidelines, the NCCN Guidelines, the ASCO guidelines.
So that the patients are actually receiving the care, that's clearly articulated in those guideline related to certain emetogenic regimens. So, we will do some work now but we will be doing work in collaboration with the actual customer groups at the time of launch. And then of course, following up the activities of our medical science liaisons that are already in the field now, the Corporate Account Directors that are already working with large customers in the field now, will be the launch of the full sales force in the second half of the year.
Evan Siegerman
Okay. And then just going along with that, when will we start to see meaningful revenue from rolapitant?
Tim Pearson
We are not giving revenue guidance here, but we had said on the call that we are going to see stocking in Q4 of 2015 and then it will ramp off of that, so it will be initial stocking this year.
Evan Siegerman
And not to leave you out, Mary Lynne, looking at, kind of the expanded QUADRA, the expanded programs for niraparib, what type of upside is that to some of the numbers we were thinking about beforehand at the end of last year in your mind? I know you gave what the opportunity looks like now. But in your mind, what does that delta look like?
Dr. Mary Lynne Hedley
Right. So in terms of the QUADRA trial, we are planning on treating patients who have a number of previous treatments or who have held a number of previous treatments. So the enrollment criteria is greater than or equal to three previous chemotherapies. So we would anticipate an additional, again, at the pricing of today’s currently approved, PARP inhibitor about an additional $500 million.
Evan Siegerman
Okay. Excellent. And then one more about the immuno-oncology. When I guess -- I know you touched on a lot of the uplifts. But when's the next bit of information that we can expect this year? What should we be looking forward to?
Dr. Mary Lynne Hedley
We intend to submit the IND for the PD-1, TSR-042 antibody towards the end of this year. And prior to that, we hope to move the TIM-3 and LAG-3 antibodies through their IND enabling work and so that’s ultimately the Bispecific leads to move forward into the clinic in 2016.
Evan Siegerman
Excellent. Thank you guys so much for taking my questions, and I'm sure we'll speak soon.
Lonnie Moulder
Thank you.
Dr. Mary Lynne Hedley
Thanks, Evan.
Operator
Thank you. Our next question comes from the line of Yaron Werber from Citi. Your line is now open.
Yaron Werber
Great. Thanks for taking my question. I appreciate it. So question first for maybe Mary Lynne, just to understand, so you are going to finish enrollment of non-gBRCA, it sounds like in Q1 or so. This is about 4.5 or so. I'm trying to get a sense, should we -- am I thinking about this right, if we can be expecting data early next year from that study? Is that sort of in the ballpark from that arm?
Dr. Mary Lynne Hedley
The guidance that we provided so far Yaron is that we anticipate having data from the NOVA trial this year.
Yaron Werber
And I would imagine that’s going to be from the -- I am sort of thinking that you are going to be doing an interim analysis on the gBRCA arm, sort of maybe first half this year, and that could stop, but non-gBRCA is next year. I know you are probably not going to be willing to comment on that.
Dr. Mary Lynne Hedley
That’s correct.
Yaron Werber
Okay.
Dr. Mary Lynne Hedley
Meaning I am not willing to comment. I think as we get farther along with, as you know this is an event driven trial. So as we get farther along in terms of the trial and building up towards the number of events where we feel we can accurately predict when we will be doing the PFS analysis, we will be able to provide more specific guidance.
Yaron Werber
Let me ask you about, when you guys are thinking about filing, because QUADRA is going to start this quarter. It sounds like it’s going to enroll pretty quickly. And then there is going to be again -- I would think there is going to be data next year. Would you wait to file NOVA when you have data from QUADRA, or would you file NOVA on its own?
Dr. Mary Lynne Hedley
Our intent would be to make this drug accessible to patients as quickly as possible. So towards that end, if we had NOVA data first, we would certainly be I think in a position where we feel comfortable submitting that to the FDA first. As you also point out, we do anticipate that QUADRA is going to enroll very quickly. So it could be available near or round the time when NOVA is as well from an NDA submission perspective.
Yaron Werber
Okay, but would you not consider filing NOVA -- if gBRCA stops early, you would still wait for the non-gBRCA right to file?
Dr. Mary Lynne Hedley
Again, Yaron, I think we are -- our intent is to make this drug available to patients as soon as it is possible because we really believe it has the potential to benefit them and anything that we do in terms of submitting, we will of course be in discussion and agreement with FDA.
Yaron Werber
Okay. And then, Lonnie, just for you, I mean, can I ask about the -- I mean if you look at the component of sales represented by oral EMEND is about probably somewhere in the 10%, 20% of total -- probably around 15%, maybe even 10% to 15%. So that opportunity for the oral is not quite as large. Now obviously, you've noted that this is about market expansion and not direct competition. But help us understand sort of how fast -- and maybe you can help us understand sort of what you learned back from the launch of Aloxi, but how fast are docs sort of willing to adopt and essentially change their practice to adopt to the guidelines, given that they're not doing that now?
Lonnie Moulder
That’s an excellent question, Yaron. It depends on the practice. There are practices, large networks of many oncology offices that are under one umbrella, one organization. And so some of those practices have very tight controls where treatment pathways are adhere to because there are quality measures and actually financial implications involved and there are other practices that are a bit more loose that don’t necessarily jump right into what a pathway may suggest, but require education along the way.
So it’s a range of what the customers actually look like when it comes to adherence to guidelines and that will then of course be a consideration in the gradual uptick of the drug. Just back up of course with the world launch occurring first and then approximately one year later the IV launch of rolapitant, the oral launches into a market opportunity which is probably about million potential doses.
Dollarized, that’s at least a $300 million market opportunity. So the market opportunity is clearly there. It’s allowing for the product uptake to occur in adherence with the guidelines. And in doing that, if you think about this, we now have a situation where about 50% of the volume of oral oncology drugs in community clinics move through in-house pharmacies. So there is actually an approach here that makes it quite easy for the patient to obtain their medication right there at the doctor’s office and we will be facilitating that in our relationships with the oral pharmacy, GPOs, repurchasing organizations.
And then on the clinical side working through the pathways, so that is it’s a process that all comes together at the time of launch where the product will readily be available. The pathways will be in place. And then over time our reps will educate the doctors and the nurses, some practices immediately beginning to use the products, some practices taking several quarters.
Our reflection back on the Aloxi launch is similar to what Tim mentioned a little while ago. The quarter of Aloxi was single digit millions of stocking. The second quarter pull that through and put about the same single digit millions of stocking back into the marketplace. And then from that point of forward, subsequent quarters reflected a true growth of demand that took place, which of course makes sense because by then the reps have had three or fourth quarters to get through their territories educate to create the demand. So that’s a longwinded answer, but that’s how we see this rolling out.
Yaron Werber
Great. Thank you.
Operator
Thank you. Our next question comes from Chris Raymond of Robert W. Baird. Your line is open.
Chris Raymond
Thanks. Just another question on rolapitant, Lonnie, if you don't mind. I am just kind of noticing Merck has been relatively aggressive with its pricing, taking fairly regular price increases. And by my math over the last couple of years, it looks like the WAC price at least is up about almost 40%. And I know you don't want to guide, or talk about pricing, but I am just kind of number one, I guess, has this made you sort of rethink what you were originally thinking relative to how you might price rolapitant? And I know you typically see a pattern of price increases in front of a generic launch, but does this magnitude surprise you at all?
Lonnie Moulder
I think the amount and the frequency of the price increases associated with EMEND are probably a bit outside the norm, but to your point, that’s sometimes happens at this stage in a product lifecycle. What’s interesting is that the most recently launched product into the category also established the price between, that’s $400 and $500 per dose, which is quite consistent with what you were talking about with EMEND. Obviously that’s WAC pricing and when one considers what WAC price to establish, you need to think about into the future what performance based rebates and discounts mandated government discounts all lead to for the gross to net calculation.
And we are considering that of course. We spend a lot of time thinking through the modeling of how long we would price this. And a follow-up with the ID product that has significant of course market potential, ultimately being the biggest piece of the brand.
So are we rethinking our initial pricing? I think, we -- in our slides and our discussion, we not arbitrarily but we’ve always talked about a weighted prices between the oral and IV around $300, well, it’s now higher than that. We’re not going to guide. We have work to do. But I think there’s an opportunity, obviously, because we will be bringing a lot value, so why not consider than when we establish our pricing first.
Chris Raymond
Okay. Thanks a lot.
Operator
Thank you. Our next question comes from Eileen Flowers from Jefferies. Your line is open.
Eileen Flowers
Hi. Thanks for taking the question. So, on niraparib, understanding that you're not giving specific timing around data readout yet, can you kind of help us get a sense of the sequential timing of data readouts, so we know what to expect next, so more specifically, which would you expect to come first, the BRCA data NOVA, non-BRCA NOVA or the data from the QUADRA, that would be helpful? Thank you.
Dr. Mary Lynne Hedley
So at this point, Eileen, we really aren’t in a position to offer any further guidance on that and now QUADRA hasn’t enrolled it first patient yet. Although, obviously, its -- we anticipated being relatively a quick trial to enroll, given the enthusiasm that we’ve seen around it and the fact that we are able to enroll platinum sensitive and platinum resistant patients who are HRD positive or germline BRCA positive or neither.
But, yeah, we’ll be doing the analysis in the whole group, as well as the HRD and the germline BRCA, so it will give us a great way of really understanding the comparison of response rate between those groups, as well as the duration of response.
And what we saw, of course, in the Phase 1 in comparison to the recently approved drug was definitely fairly comfortable. I mean, if you look at the 34% response rate versus a 50% in a median duration of 7.9 months versus about 14 month. Again you can’t compare those head-to-head.
But, I think, we believe niraparib is very well positioned to perform well in that study and we’ll provide very compelling result. So we would certainly look forward to seeing those as quickly as possible.
Eileen Flowers
Okay. And then on this IV rolapitant additional supportive safety study, was that something requested by the FDA and can you tell us what the trial design is going to be?
Dr. Mary Lynne Hedley
Yeah. At this point, we haven’t provided additional information, but if you think about it, what we had said before is that, the intent in the program is to match the AUC, so the exposure based -- so the oral exposure to the IV exposure. But we do have a higher Cmax, of course, with the IV formulation, because it’s IV and not all.
And so our intent would be to provide physician with some awareness around the variability in that Cmax. This is something we always want to do with an IV formulation and the way when I think about doing that is just getting a slightly bigger patient population around the dose that we anticipate would be equivalent to the oral, which is 185-milligram and then something a little higher than that as well.
Eileen Flowers
So was it something that was requested by the FDA or it was already planned?
Dr. Mary Lynne Hedley
Well, as we said, when we first discussed this with the FDA that they did agree with the fact that we could move forward with the bioequivalence study and they like to see some additional safety work done around the Cmax and this is a study that it’s typically done upon that kind of a request.
Eileen Flowers
Okay. Thank you.
Dr. Mary Lynne Hedley
Yes.
Operator
Thank you. Our next question comes from Peter Lawson from Mizuho. Your line is open.
Peter Lawson
Mary, just a follow-up on the niraparib data, are we more likely to see Ewing's Phase 1 data before NOVA or BRAVO?
Dr. Mary Lynne Hedley
At this point, we’re performing the Ewing's study in combination with SARC and we have about a handful of patients enrolled at this point and data is starting to come out. It’s possible that we could have an abstract sometime later this year.
Peter Lawson
And then just around the use of myChoice and HRD, is there anything in that test that's proprietary to TESARO? I mean, does that in any way form a barrier of entry for the other PARP players?
Lonnie Moulder
Peter, this is Lonnie. The test is of course proprietary to Myriad but not to TESARO. First, there will be an IDE and then ultimately to support the niraparib of use in the following approval in conjunction with the HRD rule, will be a PMA that has to be submitted and that PMA will utilize the data from our trial program.
So of course, there is a connection but down the road if another PARP inhibitor opted to do a pivotal program using the HRD test and file an additional PMA they can do that. So it’s not exclusive.
Peter Lawson
Thank you. And then just a follow-up on Tim's comments, just around costs as they go through the year. How should we think about those? And when do you actually hit the -- I think you talked about 120 associates.
Tim Pearson
Yeah. We had said that the cash burn rate is going to be in the low 40s on average for the first two quarters of the year. We didn’t say anything about the back half of the year other than it will increase. And one of the causes of the increase is related to bring on boarding of the sales force, which we would expect in the third quarter, obviously, in anticipation of the fourth quarter launch.
Lonnie Moulder
And of the 120 associates, some number approaching 100 would be actually coming in the second half of the year.
Peter Lawson
Great. Thank you so much.
Operator
Thank you. Our next question comes from Tony Butler with Guggenheim Partners. Your line is open.
Tony Butler
Thanks very much for taking the question, Mary Lynne. One brief one, it was really on the enrollment for QUADRA and finishing enrollment, at least, in gBRCA. Astra commented recently that they had, for LYNPARZA, a fairly robust backlog of patients that went on drug. So the question I have is, does that in any way, yet today, slow the overall enrollment in either of those, that arm, or in QUADRA?
And more importantly, might it actually do just the opposite? Because there might be this subtlety in the marketplace among a number of oncologists who may have an idea that the ORR of this particular compound has been higher, at least as illustrated in previous clinical programs. Thanks very much.
Dr. Mary Lynne Hedley
We’ve seen a really great deal of enthusiasm for the QUADRA trial. And I think [Indiscernible] because of as you point out the very compelling response rate that was observed in the phase 1 as well as the duration of response and also the breath of the trial.
So well, LYNPARZA was approved in the germline BRCA study that is the only patient population that’s eligible for receiving that drug. We believe that our BRCA patient population of the patients could in fact, benefit from a PARP inhibitor like niraparib and so we actually broaden that trial to include germline BRCA but also HRD patients.
And even patients who don’t initially presented HRD positive or germline BRCA because we’d like to understand could the drug provide benefit in those patients as well. So at this point, we don’t anticipate that there is going to be a challenge in rolling that trial at all.
Tony Butler
Thanks very much.
Dr. Mary Lynne Hedley
You are welcome.
Operator
Thank you. We’ll take our last question from Howard Liang from Leerink. Your line is now open.
Howard Liang
Great. Thanks very much. I have a question on NOVA. After the addition of the additional patients in the non-BRCA group, is now the primary analysis -- is it now the HRD group, or still all of the enrolled patients?
Dr. Mary Lynne Hedley
We’ll be looking at the analysis of both the HRD group, as prospectively defined, as well as the entire population. Of course, if the activity is driven primarily by the HRD population that would likely will be the indication.
Howard Liang
Okay. So it's a co-primary endpoint, or is it sequentially?
Dr. Mary Lynne Hedley
No, no. It’s not co-primary. We haven’t provided more guidance than that.
Howard Liang
Okay. It seems like that would be important, in terms of what you are looking at. Do you need to hit in both group to be considered a positive study?
Dr. Mary Lynne Hedley
No.
Howard Liang
Okay. After you expanded the sample in this group, has the number of events triggering the full analysis changed?
Dr. Mary Lynne Hedley
No. Again, we perform the event then -- so we’ll look to perform the final analysis as would be typically done in a Phase 3 trial. If you just think about it from that perspective, it’s usually when you get to about 70% or so of the event. So that’s still what we would anticipate.
Howard Liang
Sorry. Is it 70% of the new net number, which is 310, I think, or 70% of the old number?
Dr. Mary Lynne Hedley
Of the new number.
Howard Liang
Okay. So that means that the non-BRCA group, the timeline for now is later as you expanded the sample.
Dr. Mary Lynne Hedley
Well, it’s -- I mean, you are adding more patients so obviously 70% of 310 is higher than 70% of 180. But remember as you are -- when you get to a particular point in the trial and you are on that sort of straight-line curve, right and the enrollment is very quick, then you can enroll in a couple of months the same number of patients that you would have early in the trial taken several months to enroll. So the impact on timing for the PFS analysis is actually fairly minimal.
Howard Liang
Okay. I think for the germline BRCA cohort, I thought the -- correct me if I'm wrong, I thought the interim analysis is an optional analysis, but pre-specified in terms of number of events. Is your decision then -- is it on whether to do the analysis, or can the number of events change also?
Dr. Mary Lynne Hedley
The number of events would not change.
Howard Liang
Okay. Got it. So it sounds like the expansion of the non-germline cohort would not impact on the timing of the germline cohort, because it was pre-specified in terms of the number of events?
Dr. Mary Lynne Hedley
Right. And you also have to look at them, they are just two separate cohorts entirely in terms of our analysis, they are never -- one is the one cohort analysis is completely independent of the other cohort analysis and the number of events is unique to that cohort, right.
Howard Liang
Okay. That’s helpful.
Dr. Mary Lynne Hedley
We look for defined number of events in the germline BRCA and we look for defined number of events in the non-germline BRCA totally separate.
Howard Liang
Okay. Maybe two more questions. One when will we see the -- what would be the first time we see the clinical data you see in HRD? Is that from NOVA non-germline cohort?
Dr. Mary Lynne Hedley
That’s okay. Well we be given -- given that the response -- given that the QUADRA trial is a response rate trial, it’s possible that -- I mean, we’ll have to see how quickly the QUADRA trial enrolls, but usually within a couple months we see responses to a PARP inhibitor and so one might anticipate having response rate data fairly soon from the QUADRA trial.
Howard Liang
Okay. Great. And on your immuno-oncology program, between TIM-3 and LAG-3, which one is ahead, can you say? And also, will you do monotherapy studies with either of these, or both go direct to combination with either one?
Dr. Mary Lynne Hedley
Great question. So the TIM-3 is ahead of the LAG-3 and they are all pretty though right. They are all just a couple one or two quarters behind each other. And I think that many people believe combinations of PD1 and TIM-3 or PD1 and LAG-3would be quite compelling, but there might be situations where a monotherapy approach makes sense.
Howard Liang
Okay. Great. Thanks so much.
Dr. Mary Lynne Hedley
You are welcome.
Operator
Thank you. I’ll now turn the call back over to Lonnie Moulder.
Lonnie Moulder
Thank you. In summary, 2015 is poised to be a transformative year for TESARO. We have two late-stage product candidates, rolapitant and niraparib, that each address very significant market opportunities, and our pipeline is characterized by differentiated molecules with potentially best-in-class profiles. And we look forward to updating you as the year progresses. Thank you, and have a good evening.
Operator
Thank you. This concludes the TESARO fourth quarter and full year 2014 operating results conference call. Please disconnect at this time.
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