Agios Pharmaceuticals Inc (AGIO) 2016 Q2 法說會逐字稿

Good morning and welcome to Agios' second-quarter 2016 conference call. (Operator Instructions) Please be advised that this call is being recorded at Agios' request.

I would now like to turn the call over to Renee Leck, Senior Manager, Investor and Public Relations of Agios. Please begin.

Thank you, Jess. Good morning, everyone, and welcome to Agios' second-quarter 2016 conference call. You can listen to a live webcast with slides or a replay of today's call by going to the investors and media section of our website, agios.com.

With me on the call today with prepared remarks are Dr. David Schenkein, our Chief Executive Officer, who will review highlights from the second quarter; Dr. Chris Bowden, our Chief Medical Officer, who will discuss clinical development activities; and Glenn Goddard, our Senior Vice President of Finance, who will summarize Agios' second-quarter 2016 financial results. Dr. Scott Biller, our Chief Scientific Officer, will also be joining for Q&A.

Before we begin, I would like to remind you that today's discussion will include statements about the Company's future expectations, plans, and prospects that constitute forward-looking statements as of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factors section of our annual report on Form 10-K, which is on file with the SEC.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point the future, we specifically disclaim any obligation to do so, even if our views change. With that, I'll turn the call over to David.

Thanks, Renee; and good morning, everybody, and thanks for joining us today. I always like to start off with our vision, which has been crystal clear since day one: to transform the lives of patients with cancer and rare genetic disorders by leveraging our leadership in cellular metabolism. Our data at EHA in June and the new strategic collaboration with Celgene are two recent examples of our team's commitment to achieving our goals.

Our three research pillars represent our clear areas of focus under the umbrella of disregulated metabolism. Across each pillar, Agios is applying a precision medicine approach to make medicines with the potential to rewrite the textbook for the diseases they are treating.

Since we started the Company with a blank piece of paper seven years ago, our team has broken open the science on multiple novel drug targets, brought five investigational medicines into the clinic, and created a research platform that supports our long-term vision to build a sustainable biopharmaceutical company. The data from AG-348 and AG-519 at EHA marked a major scientific breakthrough, validating our novel approach to treat a rare genetic metabolic disorder with a pill.

The data from DRIVE-PK Dr. Grace presented at EHA showed a profound, sustained change in the hemoglobin of a substantial proportion of adults with pyruvate kinase deficiency, which Chris will discuss in more detail. Going beyond the numbers, Dr. Grace and Dr. Layton spoke about the tremendously positive impact some of their patients have experienced on therapy.

One example was a young man who is now able to complete his shift is a line cook with energy to spare; and another patient, who led a sedentary lifestyle, was now -- who was unable to exercise -- is now biking 10 miles a day. These data set the stage for pivotal development and a regulatory pathway for our activators, giving us the opportunity to provide the first disease-modifying therapy for children and adults with pyruvate kinase deficiency.

The activation of wild type and mutant pyruvate kinase has the potential to help patients with a broad range of hemolytic anemias beyond PK deficiency. And we will continue to explore opportunities that could expand the utility of our molecules.

The goal of our IDH inhibitors is also clear to one day provide a therapy for every patient who has an IDH mutation -- regardless of their tumor type or stage of disease. Chris will speak further about the trials that make up our speed and breadth strategy in both hematologic malignancies and solid tumors.

In May, we announced a new strategic collaboration with Celgene to discover, develop, and commercialize metabolic immuno-oncology therapies. This new collaboration builds on our previous work in cancer metabolism and enables us to expand into an important new field of cancer research. As Glenn will discuss later in the call, the $200 million upfront payment we received keeps us well capitalized as we advance multiple programs into late-stage development, ramp our commercial capabilities, and continue to fund research.

As part of the new Celgene agreement, we also gained global rights for AG-120, our IDH1 mutant inhibitor, where we previously held US rights. We now have global control of all development, regulatory, and commercial decisions for an investigational medicine we discovered and believe has the potential to benefit thousands of waiting patients. AG-120 represents another wholly-owned asset in our portfolio in addition to our rare genetic disorder and future cancer metabolism programs.

And with that, I'll now turn the call over to Chris to discuss our clinical activities.

Thanks, David. I'll start off reviewing the updates from our PKR activator program. As a reminder, pyruvate kinase deficiency is rare genetic disease where mutations in the pyruvate kinase enzyme disregulate a crucial step in red blood cell metabolism, leading to early red blood cell death. The disease is autosomal recessive, meaning patients inherit one mutation from their mother and one from their father, which contributes to the complexity of the disease's presentation and severity.

Infants with pyruvate kinase deficiency are born jaundiced and with severe anemia. As they grow older, they have chronic hemolytic anemia, which often leads to a lifetime of extreme fatigue and other serious complications, limiting participation in normal day-to-day activities. There are several significant morbidities that underscore the disease burden of pyruvate kinase deficiency. Splenectomy is performed for many patients, leading to a lifelong risk of infection. Our DRIVE-PK data at EHA showed that 13 out of the 18 patients treated had a prior splenectomy, highlighting the prevalence of this intervention.

Life-threatening iron accumulation into vital organs is another potential complication and, based on data from our ongoing natural history study with Boston Children's Hospital, can be found even in patients with no history of regular transfusions. Iron overload can be associated with liver fibrosis, endocrinological abnormalities, and cardiac events. Our PKR activators are the first therapies developed to treat the underlying cause of pyruvate kinase deficiency. Our first molecule, AG-348, has achieved proof-of-concept in this indication.

We were very impressed with the robust increases in hemoglobin over 1 gram per deciliter, indicated in red across two doses for 9 of 18 patients. The mean maximum hemoglobin increase was 3.4 grams per deciliter. Patients also responded to the drug rapidly, typically within two weeks, and the responses were sustained over the course of their treatment.

The chart seen here categorizes their responses by genotype, where 9 out of 13 patients with at least one missense mutation had an increase in hemoglobin above 1 gram. These patients make up approximately 80% of pyruvate kinase deficiency patients, while the other 20% have two non-missense mutations. This is a broad way of categorizing a disease with many different mutations, and we are continuing to evaluate different ways to treat every patient with pyruvate kinase deficiency. Data also demonstrated that AG-348 has well tolerated safety profile, with up to six months of twice-daily dosing.

We also presented single and multiple ascending dose data from our second PKR activator, AG-519, demonstrating proof of mechanism and evidence of pathway activation in healthy volunteers. Robust dose-dependent changes in ATP and 2,3-DPG demonstrated that the drug is a potent PKR activator and has the potential to correct the underlying defect in patients with pyruvate kinase deficiency. The data also demonstrated a favorable safety profile, with the majority of adverse events reported as mild or moderate.

One volunteer experienced a grade 2 thrombocytopenia adverse event on the last day of dosing, consistent with drug-induced immune thrombocytopenia or DITP. Since the time of the EHA data cut-off, we have dosed an additional 18 healthy volunteers with AG-519 in the multiple ascending dose portion of this study without any adverse events of thrombocytopenia, bringing the total to 30 volunteers dosed in the MAD portion and 24 in the single ascending dose portion.

The DRIVE-PK and AG-519 trials continue to enroll, and we expect to present updated data from both programs in addition to the natural history study by the end of 2016. We also plan to provide an update on our development and regulatory strategy for the program, including molecule selection, by the end of the year.

Moving to our IDH inhibitors, we are executing on a strategy of speed and breadth to bring these novel medicines to patients waiting for better therapies. Our goal is to change the treatment paradigm for IDH mutant AML using a precision medicine approach with a differentiation therapy whose mechanism is very different from the untargeted toxic effects of chemotherapy.

Our trials in relapsed refractory AML are progressing rapidly, with an expansion cohort for AG-221 fully enrolled and a similar cohort for AG-120 and 221 Phase 3 ongoing. Moving our drugs to the front-line setting will enable us to help more patients earlier in their diagnosis, and we had two trials underway combining AG-221 and AG-120 with both VIDAZA and standard-of-care intensive chemotherapy.

With data reported on over 300 people, the single-agent activity for our investigational medicine is compelling: patients with advanced AML achieving complete and partial responses that are durable with a pill they take once a day. We expect to present updated data, including longer follow-up and molecular data from the completed AG-120 Phase 1 dose escalation, by the end of the year.

As a reminder, we will not present data on the AG-221 or AG-120 125-patient expansion cohorts until those studies are completed with the appropriate follow-up. We are also exploring the potential for our IDH inhibitors in solid tumors, where the use of a differentiation agent is unprecedented, but we believe we have the opportunity to help a large number of patients.

The Phase 1 data we presented for AG-120 last fall demonstrated that the drug is well tolerated with signs of prolonged stable disease in low-grade glioma, chondrosarcoma, and intrahepatic cholangiocarcinoma. For some glioma patients, there was also evidence that tumor volume was decreasing, based on MRI volumetric assessments. These data are the first steps in a clinical journey where we have the potential to shape new areas of biology and clinical development over the long-term in diseases where patients have limited or no options.

Our ongoing Phase 1 expansion is designed to build on these findings by evaluating potential novel methodologies of tumor assessment, such as measuring changes in tumor volume for glioma patients. We'll have the first look at the expansion data for the 25-patient cohort in low-grade glioma by the end of the year. Expansion cohorts in cholangiocarcinoma, chondrosarcoma, and other solid tumors continue to enroll.

We are also on track to initiate a randomized Phase 2 cholangiocarcinoma study by the end of the year. As they evolve over time, these data will inform future studies of AG-120 and AG-881, our brain penetrant pan-IDH inhibitor.

I'm now going to turn the call over to Glenn to review our financials.

Thanks, Chris. Agios is in a very strong financial position today and is well capitalized as we advance multiple late-stage clinical development programs and continue to invest in our research pipeline. As David noted, in May we announced our new strategic immuno-oncology collaboration with Celgene and added $200 million to our balance sheet, extending our runway through mid-2018. With five clinical-stage medicines advancing and approximately $512 million in cash, we believe we are in a solid position to build a sustainable multiproduct biopharmaceutical company.

Moving to the financial results for the second quarter of 2016: our cash, cash equivalents, and marketable securities as of June 30, 2016, were $512 million compared to $376 million as of December 31, 2015. The increase in cash during the six months ended June 30, 2016, included the $200 million upfront payment from the May Celgene collaboration; the first-quarter $25 million milestone payment related to the AG-221 Phase 3 IDHENTIFY study; and $18.5 million of program funding related to our Celgene collaboration agreement. This was offset by expenditures to fund operating activities of $105 million during the first six months of 2016.

Collaboration revenue was $7 million for the quarter ended June 30, 2016, compared to $13 million for the second quarter of 2015. Research and development expenses were $51 million for the second quarter of 2016 compared to $36 million for the second quarter of 2015. The increase was mainly due to increased costs to support late-stage development activities related to our lead investigational medicines. As a reminder, Celgene is responsible for all development costs for AG-221 and approximately 50% of the development costs for AG-881.

General and administration expenses were $13 million for the second quarter compared to $9 million for the second quarter of 2015. The increase was largely due to increased headcount and other professional expenses to support our growing operations.

And with that, I'll now turn the call back over to David.

Thanks, Glenn. I'm incredibly proud of our progress to date in 2016 and would like to thank all of the people at Agios who made these accomplish (sic) possible. I'm amazed at the incredible work they do and the culture that makes our Company such a vibrant place to come and work every day. Also a big thank you to all of the patients, the doctors, the nurses, the caregivers who have participated in our clinical trials.

For the remainder of the year and into 2017, we are focused on continuing to execute to get our medicines to patients who we know are waiting. Keeping the patient at the center of everything we do is our driving focus and ultimately creates value for everyone in the Agios community. I want to thank you all for your continued support, and we'll look forward to speaking with you soon.

And with that, will turn it over to you, operator, for questions.

(Operator Instructions) Eric Schmidt, Cowen.

Congrats on the continued progress. Chris, would you mind on the PKR activator program just repeating the number of patients now that you've treated with AG-519?

Hi, Eric, it's Chris here. So total of 54 if you combine the multiple ascending and the single ascending dose. We treated a total of 30 volunteers on the multiple ascending dose component now. And so that's across a range of doses up to 375 milligrams.

The trial is ongoing. And what we're looking at is exploring these range of doses to understand PK and PD relationships, in addition to the safety associated with 14 days of dosing.

And you've obviously seen just the one case of grade 2 thrombocytopenia. How many more patients from a safety standpoint do you think you need to, in your view, derisk that as a substantial side effect?

That's right; we've only seen the one case that we talked about and disclosed at EHA. And in follow-up, we talked about the first additional cohort, and now we have some more experience -- hence the 30 patients who have been dosed.

The question around de-risking is an interesting one. I think one of the important aspects of the individual patient event we saw in DITP in general -- it tends to happen early. So you can pick it up with routine monitoring with CBCs, and then it's reversible when you stop drug.

It's rare when you think about it in the context of marketed drugs. So we'll continue expanding our patient cohort, subject cohort in the healthy volunteer study. And it's something will continue to look at, but we expect it's going to be a rare occurrence. And it's certainly possible that we might not see it again, but we need to continue to look.

When you have a rare event, Eric, the confidence interval around whatever your estimate is gets tighter and tighter with more patients that you put on, but it's something that we'll need to continue to look out for. We're pretty confident so far in what we're seeing on the overall safety of AG-519, and that we're able -- if we're going to see it, we can detect it early.

And Eric, I'll just follow up -- just add that as we mentioned in our comments, we are on track to pick a molecule by the end of the year and lay out for you our pivotal -- both our clinical plan and regulatory plan.

And maybe, David, on that: you also mentioned you'll have updated natural history study by year-end. Is that update going to include enough information to really allow you to aid in the design of the potential pivotal study?

So the natural history study has been a rich area for us of information about understanding the true burden of this disease as well as multiple other factors. And certainly information from there that we get on a regular basis will be important for us as we design the pivotal program, talk to the regulators, and talk to the potential payors down the line.

Again, this is an ongoing both retrospective and prospective following of a large number of patients. And so it will continue to be a rich source of information, but definitely will help us and has helped us in our design of our studies.

And it will be a mature enough data set to help you design the next study by, say, year-end again?

Yes, we believe we'll have all the information we need from the natural history study and from DRIVE-PK and the 509 studies, that in the totality of that data we'll be able to make the right decisions around the trial design, the molecule selection. And obviously we're working closely with the regulators on both sides of the pond to make sure that everybody is comfortable with a pivotal trial design.

Okay. And just one last real quick one on AG-221 and the cohort expansion study there. I think you mentioned in your prepared remarks that you're waiting for an appropriate follow-up, given the trial is now enrolled to report data. What might be appropriate?

Yes, I don't think we can give you, Eric, a set number. Obviously, we believe that the data from both the 221 expansion cohort and the 120 expansion cohort is a very important set of data for, obviously, patients; for physicians; and potentially for regulators. So I can give you a set time, but we do want to make sure that data matures before we present it at a major medical meeting, both for 221 and 120.

You wouldn't be toplining the results before a meeting?

You know, we haven't gotten into that level of detail. At this point, I'd say the answer to that is no. We're obviously very pleased with the data and the enrollment that we've seen to date. And so there's no plan to do that at this time.

Okay. Thanks a lot, guys.

Thank you.

Anupam Rama, JPMorgan.

I'm just wondering about the PKD program here and how you're thinking about the drug in the context of non-missense mutations here. Are you conducting additional preclinical work or considering further dose escalation with 348 as an option here? Or using the optional arm (technical difficulty) DRIVE PK, or maybe you just think 519 might be a better molecule for that subset of patients?

And then just another quick question here on 221: maybe not the 125 expansion cohort, but maybe -- when might we get an update for 221, to get a better sense of some of the duration of response and neutrophil data, how those are emerging with longer-term follow-up?

Yes, Anupam, thanks for your questions. Maybe I'll just quickly take the 221 and then ask Chris to talk about the PKD one.

So on 221, obviously we've laid out today in our prepared remarks and in our release some of the data that we expect to present by the end of the year. I don't want to give you the sense that it's the totality of all the data. So I think with further -- it's just still a little bit too early in the year to layout all of the data that may be presented by the end of the year. So we just need to stay tuned on that.

So let me turn it over to Chris to talk about how we're thinking about these patients, the 20% of patients or so with the non-missense mutations.

Hi, Anupam; it's Chris here. So I think one of the -- a couple of points we want to emphasize is that when we think about genotype in this disease, it's a broad way of categorizing the disease. 80% of patients have one -- at least one missense mutation. And we have talked about 20% or so have two non-missense mutations.

So in that broad categorization, it's important that we continue to collect data, take a look at the responses that we see according to genotype. And I think one of the other important components to think about is that for non-missense mutations, it's this aspect of compound heterozygosity, where you can have one non-missense and one missense mutation. And that can certainly create a situation when drug can bind and lead to an increase in hemoglobin.

So I think it's really -- these are early days. We disclosed 18 patients' worth of data. And we certainly need to collect a lot more data and enroll lots of patients with many different genotypes so that we can understand this more fully. And one thing we're not doing at this point is limiting the patients who come into the trial according to genotype, because we think that what we've seen with the drug so far is really strong proof of clinical concept. This is the first drug in this disease, so we have a lot to learn here.

Whether 519 versus 348 has a better chance of having an individual patient respond is not something we have -- we're making any claims about right now. And it's an open book that we need to continue investigating.

Thanks so much for taking our question, guys.

Yes.

John Newman, Canaccord Genuity.

I actually had two questions. First one was: Chris, it sounds like, based on your answer to Anupam's question, it's not yet clear whether or not the Phase 3 study would stratify based on genotype. That's my first question.

And then my second question would be: what should we expect in terms of the next data presentation for 348? I'm assuming that we'll see more patients. I'm also wondering if you will be able to tell us more about the duration of time patients have been on drug and also give us a little bit more detail about maybe earlier time points in terms of hemoglobin. Thanks.

Okay. John, so the first question is: do we have a sense from -- as we think about pivotal trial designs we would be stratifying by genotype. And it's too early.

At this point there is -- with a disease that has 200 mutations that have been characterized and is growing, based on 18 patients' worth of data, I think it's just too early to make those kinds of predictions. And to come back to David's point, we're just not in a position to talk about details around a pivotal trial at this time.

With regards to what we would be putting out when we publish our next data on DRIVE-PK, it's a trial that's ongoing, continuing to enroll patients. So we would hope to be -- include some of that data, similar to what we showed at EHA. And then, of course, what we're all interested in would be additional follow-up -- how the drug looks from a safety perspective; are those robust and sustained hemoglobin increases that we saw, that you saw at EHA, continuing to hold up? So it's those types of things.

Great, thank you.

Thanks, John.

Kennen MacKay, Credit Suisse.

I couldn't help but notice in the press release the sort of plurality of exploring PKR activators in beta-thalassemia. Just to be clear, are you thinking of advancing both molecules there or just one?

This is David here. As you know, we've always said that we're really excited and looking forward to potentially exploring the PKR activators in a broad range of hemolytic anemias, where we think there may be potential. And we've also always said it's highly likely that we'll select one molecule for all of those indications.

So I don't want you to assume from that that we're going to bring more than one molecule forward in these very closely related diseases. Again, by the end of the year, we'll be able to articulate that more clearly. So I really appreciate your question.

Got you. Thanks, David.

Thanks, Kennan.

And just on that -- molecule selection in PKD -- is that going to be based more on sort of internal considerations, or will you also have comments from the FDA there?

So it's really a totality of the data. So it really is all of the data from DRIVE-PK and the 519 studies. Obviously, conversations with regulators are important as we think about the pivotal trial sign, the data we have, molecule selection. So certainly input from regulators is always going to be valuable, and so it really is a collection of all of that data. We believe we are very much on track to be able to make all of those decisions and articulate them to you and the rest of the outside community by the end of the year.

Got you. Thanks, David. And maybe just one follow-up. And I might've just missed this on the call, but I was wondering if you could provide timelines on when we might see data for the combination of an IDH inhibitor with either a 7+3 or with VIDAZA?

Yes, those studies, as you know, are ongoing. And so we -- as you know, our general policy is not to really give out a detailed timeline of when you are going to see that data. So we're pleased with the way those studies are enrolling. And again, when we have adequate data that really tells a story that's ready to come to a medical meeting, we'll do so. So we just haven't given out any guidance on that yet, but we will at future time points.

Got you. Thanks for taking my question.

Yes, no problem, thank you.

(Operator Instructions) Yatin Suneja, SunTrust.

Just following up on Kennen's questions on the regulatory front on PKD: do you have a sense whether FDA will be okay with you guys moving the candidate directly into pivotal? Let's say if you decide on 519, which has never been tested in patients, I mean, how would FDA view if you move that directly into pivotal?

Yatin, thanks for your question. Again, as I mentioned to Kennen, I believe -- we feel confident that we have the appropriate amount of data, so that we can select whichever molecule we think is the right one to move into pivotal studies. Remember that 519 and 348 are very much related in that they both hit the same target.

The preclinical data that we have from both 519 and 348 are both very robust, showing that these are potent PKR activators. The data from -- translating from volunteers to patients with 348 is very compelling. And we believe that if we decide to choose 519 as the molecule we'll take into pivotal study, all of that, both preclinical and the correlation between healthy volunteers and what we've seen in patients, will all allow us to make that selection without any issue.

Got it. And just one more question on the beta-thal side. What is your take of the changes in serum hormone level in that disease? Is that of a big concern in that disease as well? Thank you.

So I'm assuming you're referring to the aromatase inhibition that we've seen with 348?

That's correct.

So as you know, and Chris articulated this before, we have seen some hormonal changes with 348. It's unclear whether that has any clinical significance. And so again, in our molecule selection, both for PKD and potentially for other hemolytic anemias like PKD -- all those considerations will be in play.

I don't think there's anything different about necessarily the beta-thal population versus the PKD population that would sway us one way or the other. They're both chronic hemolytic anemias. But again, all of that will be sorted out hopefully by the end of the year.

Great. Thanks, guys. Congrats on all the progress.

Thank you.

Thank you. And I'm showing no further questions at this time. I would like to turn the call back over to David Schenkein, M.D., Chief Executive Officer, for closing remarks.

Thanks. I'd like to thank everybody again for participating today and again for all of your support. Enjoy the rest of your summer and have a great day. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone have a great day.