Verastem (VSTM) Q4 2018 Earnings Conference Call Transcript

Verastem (VSTM -1.27%)
Q4 2018 Earnings Conference Call
March 12, 2019 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

See all our earnings call transcripts.

Prepared Remarks:

Operator

Good afternoon and welcome to the Verastem Oncology investor conference call on Tuesday, March 12, 2019. [Operator instructions] Please be advised that this call is being recorded as a company's request and will be available on the company's website for a period of 90 days from today. At this time, I would like to introduce Ms. Erin Cox, senior director of investor relations and corporate communications at Verastem Oncology.

Please go ahead.

Erin Cox -- Senior Director of Investor Relations and Corporate Communications

Thank you, Katherine. Welcome, everyone, and thank you for joining us this afternoon to discuss Verastem Oncology's financial results and corporate highlights for the fourth-quarter and full-year 2018. I'm joined today by Robert Forrester, our president and CEO; Joe Lobacki, our chief commercial officer; Dan Paterson, our chief operating officer; and Rob Gagnon, our chief financial officer. During today's call, Robert will provide some introductory comments, Joe will provide an update on our commercial Copiktra program, Dan will review our clinical development program, and Rob will highlight our year-end financial results.

Robert will then provide a brief closing summary before opening up the call to your questions. Earlier today, we issued a press release detailing our financial results for the fourth-quarter and full-year 2018. The release is available on our website at verastem.com. Before we begin our formal comments, I will remind you that we will be making forward-looking statements during today's call that represent the company's intention, expectations or beliefs concerningfuture events, which constitute forward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995.

All forward-looking statements are subject to factors, risks and uncertainties, such as those details in today's press release announcing this call and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. We refer you to the disclosure notice section in our earnings release we issued today on the risk factor section of the annual report on Form 10-K for discussion of important factors that could cause actual results to differ materially from these forward-looking statements.

With that, I would like to turn the call over to Robert Forrester. Robert?

Robert Forrester -- President and Chief Executive Officer

Thanks, Erin, and thank you everyone for joining us this afternoon on this call. Late 2018 and early 2019 have been exciting times at Verastem Oncology as many of you know our lead oncology trial, Copiktra, also known duvelisib, received its first marketing approval from U.S. Food and Drug Administration in late September 2018. Copiktra was approved as a safe and effective treatment for patients with relapsed or refractory chronic lymphocytic leukemia or small lymphocytic lymphoma after at least two prior therapies.

Copiktra also receive accelerated approval for the treatment of patients with relapsed or refractory follicular lymphoma for at least two prior systemic therapies. Accelerated approval was based on overall response rate and continued approval in FL may be contingent upon confirmatory trials. Copiktra includes a box warning for fatal and serious toxicities, including infections, diarrhea or colitis, cutaneous reactions and pneumonitis. A Risk Evaluation and Mitigation Strategy or REMS program has been initiated inform educate healthcare providers and patient about these risks.

Copiktra is an oral inhibitor PI3K and a dual inhibitor, both PI3K-delta and PI3K-gamma. Copiktra is administered as a twice-daily oral capsule that patients can take it home under the guidance of their physician. The introduction of Copiktra into the marketplace provides an important new treatment option for relapsed or refractory patients with CLL, SLL and FL who have acute to no opportunity for diseases and manage their life. Initially following early FDA approval of Copiktra, our commercial team was mobilized the same day and again, educating physicians and the healthcare professionals and payers on the clinical benefits, safety profile and appropriate use of Copiktra and are working to secure access to therapy for patients.

Very quickly following approval, Copiktra was added to the National Comprehensive Cancer Network, clinical practice guidelines in oncology for CLL/SLL, FL and also on Marginal Zone Lymphoma, or MZL, not an FDA-approved indication. The NCCN Guidelines are the standard physician resource for determining the protocol for treatment for patients. And we believe these updated guidelines will help to increase awareness of Copiktra and help healthcare providers make informed decisions for patients battling all these difficult to treat advanced cancers. I'm very proud of our whole team in launching Copiktra in the U.S.

This is no small undertaking, and it requires a lot of hard work, experience persistence and perseverance. The U.S. is clearly the most important market for us. However, we own worldwide rights for Copiktra, and we intend to bring Copiktra to those patients who can benefit in the major markets of the world.

We will mainly do this through collaborating with major pharmaceutical companies in each region. In June 2018, we enter into our license agreement with Yakult Honsha to develop and commercialize Copiktra in Japan that carries a total deal of value up to $100 million, including a one-time upfront payments of $10 million. Then in late September 2018, on the heels of the U.S. approval, we entered into a license agreement with CSPC to develop and commercialize Copiktra in China, Hong Kong, Macau and Taiwan that carried a total deal value of up to $175 million, including a one-time upfront payment of $15 million.

Both agreements cover the treatment, prevention and all diagnoses of all on the oncology indications in each respective territories and each have double-digit tiered royalty on eventual commercial sales. We are delighted to work with both Yakult and CSPC and believe these partnerships highlight the global potential of Copiktra, and we welcome the growing list of strategic partners, focused on bringing Copiktra to patients worldwide. As we continue to execute the launch of Copiktra in U.S., we'll be working collaboratively with Yakult and CSPC to rapidly advance Copiktra through the regulatory processes in Japan and China and ultimately the patients there who need it. Before I turn the call over to Joe for commercial update, I would just like to take a moment to mention another strategic collaboration that came to fruition in late 2018.

Peripheral T-cell lymphoma is an aggressive type of non-Hodgkin's lymphoma. It's an indication when the future we are looking to expand the use of duvelisib. In November, duvelisib was selected for Leukemia & Lymphoma Society's Therapy Acceleration Program to advance the development of this novel oral agent for treating the patients with PTCL. The TAP program provides financial and other resources to support the development of therapies for patients with blood cancers.

And we plan to use the funds from the TAP program to conduct certain translational and clinical activities relating to development of duvelisib for the treatment of PTCL. Portions of this PTCL program we conducted in collaboration with the Memorial Sloan Kettering, DanaFarber, Washington University in St. Louis and Stanford University. With that, I will turn the call over to Joe to provide an update on the commercialization of Copiktra.

Joe Lobacki -- Chief Commercial Officer

Thank you, Robert. 2018 was a landmark year for Verastem Oncology with the FDA approval and subsequent launch of Copiktra in late September. In terms of our commercial performance, as we disclosed in our financial results press release, in 2018 since launched, we achieved $1.7 million in net product revenues. As Robert mentioned, Copiktra was quickly added to the NCCN Guidelines following its approval.

And as of year-end 2018, we have secured reimbursement approval from approximately 75% of major targeted health plans, representing 240 million U.S. lives. As of yesterday, that number has increased over 90% of health providing reimbursement for Copiktra. Even with this success, there is still much more for us to do to bring Copiktra to patients who can benefit.

As a quick overview of the market opportunity and treatment landscape for Copiktra, currently in theU.S., nearly 350,000 patients are living with CLL, SLL or FL. Once diagnosed, majority of patients cycle through several lines of therapy due to the chronic, incurable nature of this disease. The treatment passed can different greatly based on the individual profile, including comorbidities, potential intolerance and nonresponse to available therapies such as BTKs and BCL2 inhibitors. When patients cannot tolerate a therapy or their disease stops responding to therapy, options for treating CLL become limited.

This is where COPIKTRA and its dual inhibition of PI3K-delta and PI3K-gamma fits into the CLL and FL treatment landscape for patients who are post two prior lines of therapies. We believe Copiktra can fill that gap in therapy, providing chemo-free oral monotherapy alternative once chemotherapy or other treatment options have failed to show additional benefits. For FL, it's important to remember that Copiktra was approved on accelerated basis. We believe this reflects the unmet medical need for patients with relapsed or refractory FL.

We're excited to be initiating our education and marketing campaign this quarter with physicians around the benefits and safety profile of using Copiktra to treat appropriate FL patients. A key benefit of Copiktra for all potential patients is that as an oral monotherapy, that can be taken as on twice daily. This may be especially advantageous for patients with the inventory limitations or for patients who live a long way from the doctor's office, infusion center or tertiary care hospital. The goal of Copiktra treatment is for patients to be able to take advantage of an at-home disease management under the guidance of their physician and to assist those patients in maintaining their lifestyle, family lives, standard of living and productivity.

A large part of our commercial efforts today have revolved around educating physicians about Verastem Oncology, the need for PI3K as a patient option the Copiktra information. We have been working hard to help physicians overcome some of the negative perceptions that have been created by prior drugs in the class while being upfront about our safety profile and risk management for the USPI. Overall, the poor perception of previous PI3K is the physician's lack of clinical experience, using Copiktra have been headwinds. This lack of experience and misperceptions is something that we believe we can overcome with our educational efforts aimed at physicians and other healthcare professionals by helping them understand the Copiktra data and the patients who could benefit from Copiktra, as well as the management of patients being treated with Copiktra.

It's still early days in both the overall launch and the 2019 but we are receiving positive feedback from the physicians who are prescribing Copiktra, including their support for new treatment alternative, how PI3K is an important mechanism and the importance of new mechanisms of action for patients who were in tolerated to other classes, have comorbidities or have failed previous regimens. For CLL, SLL and FL, we estimate that patient population in need of a new option, is approximately 20,000 patients per year. As we projected, it will take time to educate the medical community and have the physician begin prescribing. The natural evolution of the product launch is rarely linear, instead tends to grow as physicians gain experience with the product.

We fiercely believe in the importance of Copiktra for patients and our whole team is diligently working to educate healthcare professionals and drive adoption of Copiktra. Next, I'll provide a quick summary of our ongoing marketing activities. In 2018, from May to mid-September, we rapidly built a team and the infrastructure needed to deliver on the promise of the novel agent, Copiktra. Our dedicated and experienced sales group of 50 sales representatives were in place prior to launch and today, they continued to be actively supporting healthcare providers and their patients.

We established a distribution network and successfully shipped drug on the day we received Copiktra's approval in September. We have an exceptional team with extensive experience of launching new drugs and importantly, in recognizing and understanding the needs that exist for physicians and patients. Our goal is to not only educate and to support physicians and their patients to confidently manage their disease so that patients can focus on living their lives. In summary, we expect the Copiktra launch should be a steady build throughout 2019.

To date, the U.S. commercial, medical affairs and access teams have done a great job, establishing appropriate payer, patient advocacy, physician, KOL, nurse and physician practice relationships. This, of course, is the relation -- the opportunity and a base to grow firm in the months ahead. As we continue further into 2019, we are focused on further increasing the number of doctors using Copiktra and continuing the work with leukemia and lymphoma communities to increase awareness and help ensure patients were able to get the treatment and support their need.

With that, I'll turn it over to Dan.

Dan Paterson -- Chief Operating Officer

Thanks, Joe. Today, we're focused in the near term on the ongoing commercial launch of Copiktra in the relapsed refractory setting for patients with CLL, SLL or FL that have had at least two prior therapies. But we're also excited about the significant growth potential of Copiktra in other hematologic malignancies and potentially solid tumors in the mid and longer term. The composition of matter for Copiktra expires in 2030 before any extensions, so we have timeto explore the potential to help patients with other tumors.

Our strategy is to first expand the use of Copiktra and an additional lines of therapy in CLL, SLL and FL focus on monotherapy and incombinations and then into other lymphoid malignancies such as PTCL, an aggressive type of non Hodgkin's lymphoma. We then see potential for expansion of Copiktra to help patients with other aggressive non-Hodgkin'slymphomas such as diffuse large B-cell lymphoma, Marginal Zone Lymphoma, cutaneous T-cell lymphoma, mantle cell lymphoma, Richter's Transformation and transformed FL. These are all indications or combinations with novel and standard of care agents could really make a difference. Beyond that, we see potential for Copiktra in combination with other immunotherapies and CAR-T, both in hematological malignancies and possibly certain solid tumors.

This is our vision for the potential for Copiktra. I'd like to update you on where we are today with these development programs, both for the company-initiated studies and also with investigator-sponsored studies.Last week at the 23rd Annual International Congress on Hematologic Malignancies, four extracts were presented, which continue to support the use of Copiktra in CLL, SLL and FL. The key abstract at the meeting highlighted data from the phase three Duo study evaluating Copiktra compared to ofatumumab in patients with relapsed or refractory CLL/SLL, after at least two prior therapies. This is the label of indication for which Copiktra received approval in September of 2018.

In this analysis, Copiktra demonstrated progression-free survival of 16.4 months compared to PFS of 9.1 months for patients treated with ofatumumab. Copiktra also demonstrated an overall response rate of 78% compared to 39% for patients treated with ofatumumab. The other three Copiktra posters from the ICHM featured long-term efficacy and safety data from patients treated with Copiktra. One abstract describe the pooled long-term efficacy and safety analysis of four studies, evaluating Copiktra in patients with relapsed or refractory CLL/SLL that had been on therapy for greater than two years.

The main finding was that this subset of patient who received duvelisib monotherapy achieved an overall response rate of 89% with the median PFS of 40 months and observed side effects that were consistent with previously described treatment related events for Copiktra. The investigators were able to manage most adverse events through dose reductions in dosing homes,allowing these patients to continue treatment. In an abstract on the DUO crossover study, the 90 patients who crossed over to duvelisib, once they progressed following treatment with ofatumumab, achieved an overall response rate of 77% with a median PFS of 15.2 months. This result was consistent with a strong activity of duvelisib in the parent DUO study and show that most patients would fail an additional line of therapy continue to benefit from duvelisib therapy.

Now to some other important data presented in 2018. At ASH, in December, data were presented from an investigator-sponsored Phase I trial, investigating duvelisib in combination with romidepsin in patients with relapsed or refractory T cell lymphoma, including PTCL and cutaneous T cell lymphoma. Of the 27 patients with PTCL, the overall response rate was 59%, including 22% who responded deeply enough to allow them to bridge to potentially curative stem cell transplants. In the median PFS for patients with PTCL was 6.72 months.

However, this was confounded by the six subjects who then proceeded to stem cell transplant. We plan to use funds awarded to us from the LLS TAP program to expand this study and enroll a total of approximately 50 patients. Then in mid-2018, at the European Hematologic Association annual meeting, data were presented from an investigator-sponsored Phase 1b/2 trial and began investigating duvelisib in combination with fludarabine, cyclophosphamide and rituximab, commonly referred to as FCR as a frontline therapy in younger patients with CLL. The overall response rate in this study was 94% with 52% of the patients achieving complete response or a complete response with incomplete hematologic recovery.

Importantly, the MRD negativity rate in response to treatment was 76% in the study. The two-year progression-free survival and overall survival rates for patients in this study was both 97%. These early data demonstrate duvelisib's potential combinability with chemotherapy and potentially use in a frontline setting. The most common adverse reactions occurred in 20% or more patients across these studies were consistent with the Copiktra label and included diarrhea colitis, neutropenia, rash, fatigue, pyrexia, cough, nausea, upper respiratory infection, pneumonia, musculoskeletal pain and anemia.

Before I'll turn the call over to Rob for the financials, I'd like to just mention two additional studies that are currently ongoing and worth watching. First is the company-sponsored Primo study, an open label multicenter phase two clinical trial, evaluating the efficacy and safety of duvelisib monotherapy in adult patients with histologically confirmed relapsed to refractory PTCL. This is an important study, because it potentially allows us to file through accelerated approval for PTCL if the trial is successful. The other ongoing trial is investigator-sponsored phase one, two study, evaluating duvelisib in combination with venetoclax, an oral selective inhibitor of BCL2 in patients with relapsed to refractory CLL/SLL.

The primary objectives of the Phase I portion of this trial is to determine the maximum tolerated dose and the recommended phase two dose of venetoclax for this combination regimen. This is an important proof of concept study to validate the preclinical synergy that we have seen, to show that venetoclax and duvelisib can be combined and to potentially broaden the utility of duvelisib in this higher risk patient populations. We're committed to exploring the use of duvelisib in multiple indications and settings. Long-term, we see significant potential to create many new and exciting options for patient care based on the mechanism of action of Copiktra, which includes effects on PI3K-delta and gamma of both the tumor directly and the tumor micro environment.

Our approach is to follow science and the unique mechanism of Copiktra to support the future development oral agent as part of monotherapy and in combination with both targeted and immuno-oncology agents in a broad range of hematologic and solid tumors. We believe there are many more opportunities to be unlocked. I'll now turn the call over to Rob for financials. Rob?

Rob Gagnon -- Chief Financial Officer

Thank you, Dan. Since we issued a press release earlier today, outlining our fourth-quarter and full-year 2018 financial results, I'll just review the highlights beginning with our cash positions then the full-year 2018 results. As of December 31, 2018, Verastem Oncology had cash and investments of $249.7 million compared to $86.7 million of cash and investments as of December 31, 2017. Net product revenue for the full-year 2018 was $1.7 million compared to zero product revenue for the full-year 2017.

As a reminder, we recognize product revenue when product arrives at our specialty distributor or specialty pharmacy network from our 3PL. License revenue for the full-year 2018 was $25 million and was related to the license agreements with Yakult and CSPC. Research and Development expense for the full-year 2018 was $43.6 million compared to $46.4 million for the full-year 2017. The $2.8 million decrease was primarily related to a decrease of $6 million in license fees related to a one-time milestone payment pursuant to the Infinity license agreement that was recognized in 2017 and a decrease of approximately $3 million in consulting fees, partially offset by increases of $4 million in personnel-related cost and approximately $2 million in CRO expense.

Selling, general and administrative expense for the full-year 2018 was $77.3 million compared to $21.4 million for the full-year 2017. The increase of $55.9 million resulted from an increase in personnel-related cost from approximately $27 million related to the hiring and staffing of our sales team, as well as an increase in consulting and professional fees that $24 million related to the support for the commercial launch. Net loss for the full-year 2018 was $72.4 million or $1.12 per share compared to a net loss of $67.8 million or $1.76 per share for the full-year 2017. Before I turn the call over to Robert for closing remarks, I'd like to highlight one other recent transaction that underscores the value of Copiktra.

Last week, Infinity Pharmaceuticals announced that they had monetize their royalty rights to Copiktra to Healthcare Royalty Partners for $30 million upfront and up to an additional $20 million in sales milestones. I'd like to remind everyone that we are obligated to pay Infinity a tiered quality on sales of Copiktra, ranging from mid-single to high single-digits. This was the portion of the royalty that was sold and I highlight this point, because it represents a small part of the overall product as a whole. It did not include the additional royalty that the company is obligated to pay to Infinity that is owed to Mundipharma and Purdue Pharma.

Now I will turn the callback to Robert for closing remarks and to open the call for questions.

Robert Forrester -- President and Chief Executive Officer

Thanks, Rob. Looking ahead, 2019 is poised to be an exciting year as we continue to drive awareness and adoption of Copiktra and want to expand on the potential of PI3K in addition through the investigation of duvelisib at both the monotherapy and in combinations in additional hematologic cancers like PTCL. Our focus for coming year is to execute on our core business priorities with the goal of bringing Copiktra to patients who can benefit to increase the company's revenues and to grow shareholder value. Our priorities include: one, continuing to expand on the commercial traction of Copiktra in CLL, SLL and FL for appropriate patients; two, initiating a confirmatory phase three study, evaluating duvelisib for treatment of patients with relapsed or refractory FL after at least two prior systemic therapies.

The confirmatory study is expected to start in 2019. Supporting additional investigational studies of duvelisib both through company and investigator-sponsored studies. Four, working with Yakult, CSPC and the LLS to advance the development and the expansion of Copiktra brand. Five, one more ex U.S.

partnership with duvelisib. And six, advancing our focal adhesion kinase inhibitor, defactinib that's currently being evaluated in four separate clinical collaborations in combination with immunotherapeutic agents. As a twice-daily oral monotherapy, we believe that Copiktra is an attractive treatment options for both physicians and patients first in CLL, SLL and FL and potentially in other high unmet need lymphocytic in the future. I recognize the challenges in launching a monotherapeutic whether our challenge is from perceptions of the class and limited clinical experience.

However, we've come a long way since in-licensing Copiktra in late 2016. We successfully got Copiktra approved by the FDA. It has a long patent life ahead. I am confident in our strategic and operational plans, the team we have built and our ability to execute on our mission to help bring Copiktra to patients in need and to change the way cancer is treated, one patient at time.

With that, we will now open up the call for your questions. Operator? 

Questions and Answers:

Operator

[Operator instructions] And our first question comes from Robert Hazlett with BTIG.

Jake Colby -- BTIG -- Analyst

This is actually Jake Colby on the line for Bert. I guess, just to start with Copiktra on a month – on the market for a few months now, has there been any evolution in the sales and education message to physicians to address the PI3K perception headwind?

Robert Forrester -- President and Chief Executive Officer

Yes. It's quite -- obviously, we've had, I'd say, little surprises. But obviously, you learn things as you progress. And so I think, we're refining messages rather than sort of going down completely different path.

But let me let Joe comment more deeply about that.

Joe Lobacki -- Chief Commercial Officer

Yes. Jake, thanks for the question. We have been kind of changing as move along, which is a plan prior to the launch. So when we launch, we wanted to come out as that who -- what is Copiktra.

This dual inhibitor of delta and gamma. So it was really first and only so it was new in the class. So we presented it that way and we started giving the information around CLL. So what's evolving is more around going away from the dual inhibition to the efficacy and safety of the product.

And then also the FL going from CLL to FL campaign. So we started with CLL. We're now evolving into the FL campaign, which I think has been a great spot for us. So message has evolved over the past couple of months, but all the messages have been resonating very well for physicians.

Jake Colby -- BTIG -- Analyst

OK. That's helpful. I was just wondering if we can get any sort of commentary on expenses for 2019? And how we should think about their trajectory throughout the year?

Robert Forrester -- President and Chief Executive Officer

Absolutely. So Jake, I'll hand you over to Rob to answer that question on expenses for this year.

Rob Gagnon -- Chief Financial Officer

Yes, thanks. And as you know, it's very early on in both the launch in the calendar year as it relates to guidance. We won't be giving guidance until, at least, the end of the year. We really need to get a solid idea of the ramp and the overall growth powers before we commit to specific guidance.

I will point to you, however, on the expense side. Based on, as noted in our earnings release today, our operating expenses were about $35 million that compares to about $37 million in the third quarter. That should give you a sense of where we are in terms of the back half of last year. But we won't be giving specific guidance on the projected revenue expense until the end of the year.

Operator

And our next question comes from H.C. Wainwright.[Unknown speaker]I have couple of quick questions. The -- in terms of the education programs that the commercial team is planning so that it can increase the clinicians' experience, can you give us some color as to what sort of programs are you thinking about for that to happen in 2019?

Robert Forrester -- President and Chief Executive Officer

Yes. Thanks, RK. I mean, as you know, with some of the headwinds that we knew when we brought the drug in, was well, some of the negative perceptions around PI3K. And so we're obviously addressing those head on and really owning the benefit and side effects of the drug.

But let me let Joe talk a bit more detail about that.

Joe Lobacki -- Chief Commercial Officer

Sure. Thanks, RK. And this kind of builds off of Jake's question as well. So again, when we launched, we were really looking at kind of coming out as a novel agent, how we're different in the space to introduce Copiktra.

As we move forward, we've done more around the efficacy piece for CLL, as well as the management of the profile of the product. And now we're moving into the FL piece. What we're also doing around the messaging is to really look at what are the patients that physicians are looking to treat. So we just actually came off our national sales meeting last week where we had a robust discussion around and what are the patients that we're looking to treat.

We have two KOLs from the field come in to help work with our sales representative to identify those patients. So as we look at it, where physicians are trying to fit in is, "Where does this fit in?". And I hear the question actually when we're out with investors as well, "Where does it actually fit in?" And what we're looking to do is this post two prior lines of therapies so that patient who has now been treated with chemo, ibrutinib, maybe another product like venetoclax and then there is no option for those patients where they're being treated right now is really an open space. There is no treatment in that post two priors.

So we're developing those programs around to really identify physicians where we fit, and where are our benefits according to our label. So we'll do the same thing now with FL as we've launched the FL campaign going forward is to really look at what happens post two prior chemotherapies in follicular lymphoma. And it's really an open space, because there is no ibrutinib, there's no venetoclax, it's really a PI3K space. So how do we fit ourselves in this as a PI3K of choice? And that goes back to how we launch, looking at it as a novel agent delta gamma, our profile around efficacy, 42% being in double refractory patients, which is different than the other products that are out there.

So we're really -- our education programs, are establish ourselves in CLL post two prior lines, which is an open space. And in FL, post two prior lines, which really an open space as well and it's definitely in a PI3K space. We're also working with medical affairs team to bring more physicians in to having experience with Copiktra through clinical programs through their own ideas as we initiate those, but also through programs that we're looking at from medical affairs to initiate that's something like a registry study, so to provide them with that experience. So we're hitting them from both ends.

Where does it fit in and there is a clear openneed in these studies post two prior and to give them the experience.[Unknown speaker]So Joe, with your experience of having launched drugs before, how does, in your role, how does this seem compelling it against your previous experience? And are that things that you feel request a little bit of tweak and sort of there's always certain things which requires a lot of tweak. So how do you see this? And what is some of the anecdotal information that you're getting, especially now that the drug has been out for like close to five to six months. And then the second part of the question is on the clinical side. So based on some of the things that you've been hearing and based on some of the clinical studies that have been highlighted so far in this call, I'd like to know what sort of data expectations we should have? And also how you're trying to tie the data with the message on Copiktra, just as you're trying to do this on this call with the physicians?

Robert Forrester -- President and Chief Executive Officer

OK, OK. There is a lot of great questions in there. I think two main ones. The first one, Joe, can you talk a little bit about your prior experience with other oncology drugs? How does that experience compared to what you're seeing here? That's the first question.

Joe Lobacki -- Chief Commercial Officer

OK. Yes, and RK, one of the things you said in terms of the -- yes, we've been out now for about five months and that's really the period of time we have to introduce both Verastem Oncology and Copiktra to the marketplace. So as you recall, the Verastem picked up the duvelisib at the end of 2016, developed it. Most of the experience with clinical trials was in Europe, not within the U.S.

So it's building that base of support right now the company's picked up. So over the past five or six months, the team medical affairs, commercial's has done a great job building that base. And from my experience, that's the important piece of it as people kind of touched the product and being able to work with that. We've got some great folks out there who have done that and are supporting us.

We need to continue to pull that through. And I think it's -- first part started with that five or six months since launch. So we still have a ways to go, but it's going well in gaining that experience.

Robert Forrester -- President and Chief Executive Officer

So I think the first half and the second half was talk about the clinical studies maybe more broadly the brand expansion strategy. And I just want to give a couple of quick comments, and then I'll hand over to Dan. I mean, the first thing is, we now have approved drug. We run the coordinates of the biology, of clinical trials and also through the FDA.

We've got long IP, as Dan pointed out, 2030 before extension. We've probably got 13 or 14 years of exclusivity. We got dollars, thanks to raising of good capital. We've got a great team.

So we have got time to really explore the potential for this drug in earlier lines of therapy and also in different indications, both in monotherapy and combination. So maybe with that, let Dan comment a bit more.

Dan Paterson -- Chief Operating Officer

Sure. I mean, if you look at our growth strategy for Copiktra and for those of you who seen the corporate presentation where we really have about four steps where first and foremost, we want to own our indication. We want to own two more lines of therapy in CLL or FL. And I think you saw some of the data that we presented recently that was really data that was taken out of studies where the top line had already been reported where we give more information around how well the drug works, how well it works in certain sub-population and the tolerability of the drug and that's really the job one.

Then when we look at broadening the reach, it's really expanding the use in CLL, SLL and FL. And if you look at the investigator-sponsored studies that are going. Matt Damon study combining with venetoclax, that's potentially a very important study. As an IST, we don't necessarily control the timing of when that data comes out, but it moved very rapidly.

And we would expect to see something, hopefully, in the nearfuture. The PTCL study that we talked about PRIMO, again, the data from that first portion of that study is likely to be reported second half of this year. While we're not releasing any data now, what I will tell you, it accrued much more quickly than we ever expected, which is usually a good sign that physicians are seeing something they like. And then as we start going into more aggressive subtypes of non-Hodgkin's lymphoma, you really see a lot of the investigator-sponsored studies we're doing in the more aggressive subtypes DLBCL, MCL, Ricther's, are really supported by some of the combination work that's being done now, because once we show, we can safely get duvelisib together with the drug like venetoclax, you can look at other areas we can go into.

And then we reported at SITC some of the preclinical data around, what I would view, kind of the home run for Copiktra, which is, if we can go in the combining with I/O, CAR-T, potentially crossover to solid tumors, we're hoping to get those studies started later this year and really go from there. But it's a combination of we running the data we have from the previous studies, getting read outs from some of the studies that are progressed a little further and then moving into the others.

Operator

[Operator instructions] And our next question comes from Matthew Cross with JonesTrading.

Matthew Cross -- JonesTrading -- Analyst

Starting off, I wanted to ask -- you mentioned this increase now up to 90% in reimbursement coverage. And I was wondering, if you could kind of give some color around what drove that increase? At least, in -if there was one particular driving force whether that was some dataset, greater discussion of FL, given the recent publication and ability to now market beyond the package insert. And is there any reason to expect you could achieve 100% coverage or near 100% coverage sometime in the next few quarters as things progress?

Robert Forrester -- President and Chief Executive Officer

Great question. And I can answer that question very easily. We've got a great team who was working incredibly hard. Joe may have more color on that, but that certainly is a large part of it.

I mean, they really are very dedicated, very experience and they're really working at it. But Joe, will you add anything to that?

Joe Lobacki -- Chief Commercial Officer

No, I totally agree with Robert. From the sales team through the market access team, to the medical affairs team, that's been backing everybody up. They've done a great job over the past year. And actually, we're in a place -- RK asked about my experience.

We're in a place that usually at this point in time, you're going, "I could do a lot better if I just had reimbursements support." So that we have, we've got that reimbursement support, so that's fantastic. But what drove it, was really the beginning of last year, we had, I think, our first payer meeting back in the beginning of March. I think, third of March we were talking to them. So we've been working very hard with the payers to introduce them to Verastem and introduce Copiktra, the data, and we've been pulling out through throughout the year.

So it's been a very -- again I think, the market access team has done a great job, as Robert was saying. So we've educated them on the product and the class that fits and they're aware of it. And we brought in kind of our medical affairs team with physicians to back it up why is this an important drug for patients. Now getting to a 100%, do I think we'll get there? I think, we will, maybe 99% of all the lives, but I think we'll get there.

There are couple of other folks we need to pull in, but I think we'll get there. So again, team's done a great job.

Matthew Cross -- JonesTrading -- Analyst

Great. Glad to hear and hope to see that continue. Next one was on just kind of the cadence of up-sells, hopefully, maybe the first year so including this quarter and say the first three of 2019. Just kind of hopingto get your expectations for whatever expected to be initially a lumpier period during that first year as you're improving inventory build, improving distribution efficiency before we kind of make an assessment about the real sales trajectory.

Would you expect this to be, say, in this first year kind of back end loaded in terms of sales? And is this in any way impacted by the time we should recognize revenue when that reaches distributors?

Robert Forrester -- President and Chief Executive Officer

Thanks, Matt, it's a great question. It's something that we think about a lot, obviously. We're not getting financial guidance, but I think some of the color that you're asking and it's totally fair to talk about. We see this as being a sort of building year and we're starting to characterize it more toward the back end.

I mean, we definitely got some of those headwinds that we knew about that we're overcoming. But it does take time. And so maybe, Joe, you want to give a little more color, maybe Rob you want to give some guidance after that, not official guidance, obviously.

Joe Lobacki -- Chief Commercial Officer

Yes. So I agreed, Matt. I think it's a slow build over the year than the first year of sales as we want to educate more physicians to get them to put a new patients on. And then as we start in the annuity of patients continuing onto therapy.

One of the abstracts that Dan has mentioned, patients were on for 13 months so that's a great thing for us for the future. So as to get patients on, our goal is to keep them on therapy and build that kind of going forward. And I think as we deal with some of these headwinds of getting in and talking about how we're different PI3K, how physicians can use drug and manage it. And then they just start writing for patients.

So I think it will be a build throughout the year, and you're right. You're looking at the projections more sales force back half of the year.

Rob Gagnon -- Chief Financial Officer

Matt, it's Rob. I'll just add to that. You asked about rev recognition. So the revenue's recognized when the product is received by the specialty pharmacy or the specialty distributor, that's shipped from our 3PL.

So that's how that works and it's typically a turnaround time, 24 hours.

Matthew Cross -- JonesTrading -- Analyst

Perfect. Appreciate all that details and very helpful, obviously, getting into the specific numbers and guidance here. And then just one more before I jump back into the queue here. Was curious, obviously, with so much focus on commercialization right now and that being a crucial driver of the company's growth.

Wanted to get a sense for given everything you're doing on the R&D side of things as well, kind of where the focus is? I know there is a lot going on between PTCL, this confirmatory phase three in FL, various combinations, kind of a lot going on beyond, obviously, the Primo studies, that's very much ongoing. What kind of is the focus that we should be paying attention to most maybe in terms of key catalyst for this year and maybe an initial label expansion?

Robert Forrester -- President and Chief Executive Officer

Yes. No, that's a very important question. I mean, number one and then Dan said this very, very well. Job number one is to make sure we execute on the launch and Joe and the team are on point for that.

Job number two is to maximize the potential for duvelisib. Again, we have long patent life on this drug. We know mechanistically that this drug has the potential to go into many other tumor types and so we need to explore those and explore those quickly and efficiently, both through company-sponsored studies and also through investigator-sponsored trials. And we're starting those -- we've already started some of those like the venetoclax combination.

The PTCL programs, two of them that are going on. We see a lot of potential there. And so that's job number two. And then job number three is what else? What other products can we bring forward.

And clearly, we have defactinib and defactinib is in those four programs. And we hope to start see some data coming out from those trials and so throughout this year. So defactinib is going to be potentially important drug. We don't know yet.

The jury's still out on it. And then what else? And I think in due course, there may be "what elses" too. But Dan, I probably stole all your thunder. Is there anything else you would like to add to that?

Dan Paterson -- Chief Operating Officer

No, I'd just like to emphasize the PTCL study and that's likely to be the next label expansion. And I would say, if you look at the phase one data, it was pretty exciting data and there is almost a halo effect when we talk to KOLs about the PTCL data and our plan for the future, and they're very excited that we have multiple requests for ISPs, for example, in that area. And so as we look at them more aggressively lymphomas, I think that's going to be a big area of growth for us.

Robert Forrester -- President and Chief Executive Officer

That's a good point. Just to emphasize, and we've been very focused up until the approval on getting the drug approved. And we haven't initiated a lot of additional studies. We were, again, very focused, get the drug approved.

Now that the drug is approved, it is the opportunity to broaden into additional indications and trials. And it has been extraordinary, the interest that we have received from physicians, KOLs, around the country, in fact, around the world to try Copiktra in different tumor types, different combinations. And you're going to start to see those rolling out as the year goes. So it's been very heartening and very exciting to see the scientific interest in taking this trial potentially into new indications.

Operator

And our next question comes from George Zavoico with B. Riley FBR.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

So I have a question about the European discussions with the EMA, where do you stand with getting Copiktra approved in Europe?

Robert Forrester -- President and Chief Executive Officer

Great, important question. We, as you know, we own the worldwide rights to the drug and clearly, the U.S. is the most market, and we're putting almost all our efforts into U.S. And we want to commercializing other regions as well, because patients are everywhere that could benefit from this drug, and we want to make sure we bring that -- bring Copiktra to those patients in an effective manner.

So you saw CSPC in China, Yakult in Japan. And you can probably expect to see one more collaboration over the next -- rest of this year. However, that is not likely to be in Europe. And so we are taking a different approach in Europe and also an open approach.

Let me let Dan talk about that in more detail.

Dan Paterson -- Chief Operating Officer

Sure. George, as you can imagine, when we got the priority review in the U.S. and things moved pretty quickly, it kept our regulatory team pretty busy. And so when we got the earlier approval for Copiktra, we really moved a number of those resources over to focus on the EMA.

We're actively working now in strengthening our KOL network in Europe, as you know, that's very important for the approval process and then finalizing our regulatory strategy in Europe. We boosted Europe. There was a question earlier about clinical development, as well as on the regulatory side. You probably saw the announcement of -- when we brought Bob Morgan on recently.

One of the reasons we brought him on was to expand both our capacity on the clinical side, but he also has a great deal of international regulatory experience, which is helpful to us both in the EMA, as well as working with our partners in China and Japan. And so that's a big focus of the team right now. And we'll give more guidance on the EMA and timing probably at the latter half of this year.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

OK. And then part of the education that you guys need to do, obviously, was the sort of poor perception of PI3Ks. It's about handling and recognizing when some of the warnings in the black box actually begin to appear as symptoms. So can you describe a little bit about how that's going whether the rate of dose vacations or dose reductions -- have you been tracking that now that Copiktra's out on the market? And are you seeing the physicians sort of adapting well? Perhaps, the more they use it, they adapt better, but any comment on that would be helpful.

Robert Forrester -- President and Chief Executive Officer

It's a really important question, and we're taking a very different approach to some other companies in the past around PI3K. We are really owning the side effects and embracing them and providing the materials and education to the physician, the nurse, the physician's office and then directly to the patient, make sure they know what to expect. Because in general, the side effects are predictable and manageable and the side effects that these -- many of these physicians are very familiar with because they're dosingI/O drugs. And guess what, they've seen many of the same side effects.

So it's much more one of education, much more overcoming perceptions than anything else, anything more real than that. But let me hand it over to Joe. Maybe Dan wanted to make a comment as well. But Joe, do you want to add something to what I just said?

Joe Lobacki -- Chief Commercial Officer

Yes. It's been an important part of the launch and will be going forward as well. So it goes all the way back to the people that we hired on oncology, account managers or sales team that we wanted them to be upfront about side effects, what to know for a physician, what to expect, when to expect it and what to do going forward. And that has driven a lot of very robust conversations, which has been great.

So that's going well and there are, today, what we're seeing is patients do well on therapy. And again, just as long as physicians know about it, they feel more comfortable about it, how to manage it as well. So it's a big piece of our sales efforts.

Dan Paterson -- Chief Operating Officer

Well, I was going to comment on what data we have so far on usage in the market. I mean, the nice thing about starting from scratch with our systems, since we've designed our systems, we can actually track that real-life usage and delays in dose reductions and things. I would say, it's just way too early right now. I mean, the numbers are too small to really draw any conclusions.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

OK. I guess, as you go on, we'll learn more about that with every quarter. OK. And then in terms of just briefly maybe again it's also too early.

How many repeat scripts versus new scripts? Can you talk about that? Or is it way too early for that too?

Robert Forrester -- President and Chief Executive Officer

George, it's important data as well. It's too early, because it's, what, three, four months into the launch. But we obviously know that many patients are having repeat scripts, but in term of the numbers, it's probably too early to make anything of the data.

George Zavoico -- B. Riley FBR, Inc. -- Analyst

OK. And let's hope this keeps growing.

Robert Forrester -- President and Chief Executive Officer

Yes, we're with you on that.

Operator

And our next question is a follow-up from Matthew Cross with JonesTrading.

Matthew Cross -- JonesTrading -- Analyst

Just had one kind of as you think about BG opportunities for Copiktra beyond geographical deals. My understanding is you're likely to be opportunistic, but would you say you're committed to commercializing in the U.S. entirely internally? Or open to a co-commercial or out-licensing situation may be for certain indications where there may be some kind of added synergies from the existing offers of other players in the space?

Robert Forrester -- President and Chief Executive Officer

Matt, it's a very good question. It's the heart of our business is commercializing in the U.S. We are not open to co-commercializations and also spitting up indications is not something that we – particularly easy to do or to track. No, we believe in this drug.

We have the team. And we have the right team. We have the capital. We have a great product.

We want to commercialize in the U.S. we want to own that. That's how we can build a nice business here. And secondly, we're thinking about what we should do in Europe, whether we should be fully commercial in Europe or whether we should partner in Europe and that's some decisions that we're keeping open want to move to regulatory part down the regulatory part a bit more before making that kind of decision.

So definitely, U.S., we're not open to BD conversations.

Dan Paterson -- Chief Operating Officer

And Robert, I guess, I would add. I mean, something that we want to continue to be known for the way we do things.

Robert Forrester -- President and Chief Executive Officer

Yes. Thanks. That is a good point.

Matthew Cross -- JonesTrading -- Analyst

Fair enough. And then in no way to try to send a negative message about those drug partners too and rest of the team are making here. Just wanted to clarify as far as the strategy and then how we should think about it as we're as for moving into a...

Robert Forrester -- President and Chief Executive Officer

We are delighted to own this drug, and we are delighted to have the opportunity to commercialize it in the U.S.

Operator

Ladies and gentlemen, this concludes our question-and-answer portion of today's call. I'd like to turn it back over to Robert now for any additional or closing remarks.

Robert Forrester -- President and Chief Executive Officer

Thank you. Thank you very much for joining and for the great questions. In closing, I'd just like to thank everyone again for dialing in today's call. This is a very exciting time for Verastem Oncology, and we are now delivering on our mission to improve the lives of patients with cancer.

Have a good evening.

Operator

[Operator signoff]

Duration: 57 minutes

Call Participants:

Erin Cox -- Senior Director of Investor Relations and Corporate Communications

Robert Forrester -- President and Chief Executive Officer

Joe Lobacki -- Chief Commercial Officer

Dan Paterson -- Chief Operating Officer

Rob Gagnon -- Chief Financial Officer

Jake Colby -- BTIG -- Analyst

Matthew Cross -- JonesTrading -- Analyst

George Zavoico -- B. Riley FBR, Inc. -- Analyst

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