Agios Pharmaceuticals Inc (AGIO) 2017 Q2 法說會逐字稿

Good morning, and welcome to the Agios Second Quarter 2017 Conference Call. (Operator Instructions) Please be advised that this call is being recorded at Agios' request. I would now like to turn the conference over to Renee Leck, Senior Manager of Investor Relations for Agios.

Thanks, Shannan, good morning, everyone. And welcome to Agios Second Quarter 2017 Conference Call. You can access slides for today's call by going to the Investors Section of our website, agios.com. With me on the call today, are Dr. David Schenkein, our Chief Executive Officer, who will review business updates and key milestones for 2017; Dr. Chris Bowden, our Chief Medical Officer, who will provide an update on our clinical development activities; and Andrew Hirsch, our Chief Financial Officer, who will summarize Agios' second quarter 2017 financial results. Before we get started, I'd like to remind everyone that statements we make on this call will include forward-looking statements. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our most recent annual report on Form 10-K, filed with the SEC and any other filing that we may make with the SEC. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. With that, I'll turn the call over to David.

Thanks, Reneé. Good morning, everybody, and thanks for joining us today. We've had had a tremendous first half of the year across the business and today I'd like to start by highlighting the recent FDA approval of our first precision medicine. As you know, last week, IDHIFA was granted approval for patients with relapsed refractory AML in an IDH2 mutation. This approval is significant for several reasons. The FDA granted IDHIFA full approval, given the clear demonstration of clinical benefit. This approach validates our precision medicine approach. IDHIFA went from the lab to U.S. approval in less than 8 years against a target we discovered with the compound we created in-house on clinical data from a single arm Phase I/II trial. Additionally, our first approval demonstrates our ability to translate our expertise in cellular metabolism to important medicines for patients. Before I continue, let me thank all of the Agios employees, our colleagues at Celgene, the team at the FDA and all the patients and their doctors who participated in our clinical trials that made this achievement possible. The most important impact of this approval is that IDHIFA is now available to patients with an IDH2 mutation who desperately need new treatment options. To me, as a hematologist, this means patients I've been treating for decades with limited treatment options now have a targeted oral therapy to treat their specific leukemia. That's an incredible transformation in the AML treatment paradigm.

Our hope is that IDHIFA will not only help patients who needed today, but also serve as a foundational shift in treating this devastating disease with a precision medicine. IDHIFA will hopefully be the first of many new medicines that we will deliver for patients. Celgene, who is the commercial lead for IDHIFA, has been a terrific partner throughout this process since we signed our original partnership agreement in 2010. The Agios' sales force and medical science liaisons are currently in the field alongside their Celgene colleagues. We would like to thank Celgene for ensuring that IDHIFA was available on the same day as approval. Chris will speak to the recent progress with our wholly-owned IDH1 mutant inhibitors, ivosidenib, which will follow a similar regulatory strategy. Now, turning to our PK deficiency program, we have completed global regulatory discussions and are on track to initiate 2 pivotal trials for AG-348 in the first half of 2018. One trial will be conducted in non-transfusion dependent patients and 1 in patients who are regularly transfused. Pivotal development of AG-348 is an important next step for our PK deficiency program as we work to deliver the first potential disease-altering therapy for this serious disease. Chris will walk you through key aspects of both clinical trials. Turning to our research engine, we are on track to submit an IND for AG-270 for potential treatment of MTAP deleted tumors by the end of this year. This would be the sixth IND to come from the Agios research labs since they opened in 2009. We also continue to invest in the research engine that produced IDHIFA and our robust precision medicine pipeline. This is an exciting time for Agios as we celebrate our first product approval, and now, turn our attention to developing the next truly important medicines for patients. I'll now turn it over to Chris, to discuss our clinical activities.

Thanks, David. I'll start with our recent progress in pyruvate kinase deficiency and then I'll move to our IDH programs. Through our work with DRIVE PK in the natural history studies, we have learned a great deal about pyruvate kinase deficiency as a disease and the potential benefit of AG-348 for patients. These learnings coupled with input we have gathered from regulators, disease experts and patients have shaped the design of 2 global pivotal trials to evaluate AG-348 in adults with pyruvate kinase deficiency. I will start by reviewing the design for the trial in non-transfusion dependent patients. This is a randomized placebo-controlled trial with a 1:1 randomization that will enroll approximately 80 to 100 patients. We have set the hemoglobin eligibility in this trial at 10 grams per deciliter or lower to clearly demonstrate the efficacy of AG-348 in patients with more severe anemia. Based on learnings from DRIVE PK, we will enroll patients with a higher likelihood of response based on their genotype. For that reason, patients with 2 non-missense mutations and those homozygous for the R479H mutation will not be eligible. R479H is a missense mutation, and in DRIVE PK, none of the 5 patients who are homozygous for this mutation responded. Approximately 80% of patients with pyruvate kinase deficiency have at least 1 missense mutation according to data published with the Natural History Study.

In order to identify their optimum dose, all patients will start with a 3-month dose titration phase followed by 3 months on their optimal dose. Patients will start at 5 milligrams of AG-348 or placebo twice-daily and will have the flexibility to titrate up to 20 milligrams or 50 milligrams twice-daily to find their optimal dose. At month 6, patients will be unblinded for analysis of the primary endpoint, which will be the proportion of patients who achieve at least a 1.5-gram per deciliter increase in hemoglobin sustained over multiple visits. After 6 months, patients on placebo will be able to cross over to receive AG-348 in an extension period. The randomized crossover trial design enables us to accomplish 3 main goals: 1, to demonstrate a significant treatment effect of AG-348 on the primary endpoint of hemoglobin increase; 2, to clearly delineate the safety of AG-348 versus a placebo-control; and finally, to utilize a patient reportive outcome tool developed specifically for pyruvate kinase deficiency. This tool will measure the effect of treatment with AG-348 on disease symptoms and their impact on patients' lives compared to placebo. For the minority of patients who are regularly transfused, we plan to initiate a pivotal single arm trial of approximately 20 adult patients who have received a minimum of 6 transfusions over a 1-year period. This trial will use the same genotype eligibility criteria as a non-transfusion dependent trial and will also have the same dose titration phase. The primary endpoint of the study will be reduction in transfusion burden over a 6-month period compared to the patient's historical transfusion record. We are now working on global operational preparations and patient recruitment for both studies to initiate in the first half of 2018.

The DRIVE PK study continues to be a valuable source of data and we plan to present data on all 52 patients to the American Society of Hematology Annual Meeting in December. Now let me turn to our IDH programs. Utilizing an adaptive trial design, IDHIFA was approved in less than 4 years from entering the clinic on the basis of a single arm Phase I/II trial. This is a compelling proof point for our speed and breadth strategy in AML. On the heels of disapproval, our NDA team is incorporating learnings from the IDHIFA process into our ivosidenib submission, which is on track for the end of the year. We submitted data from the ivosidenib Phase I trial that makes up the core of our NDA package to ASH for presentation in December. This will also be the first time we present data from the dose expansion cohorts. Beyond relapsed/refractory AML, we continue to work to secure a set of labels in the frontline setting. In the second quarter, we initiated AGILE, our Phase III study combining ivosidenib and VIDAZA in newly diagnosed AML patients with an IDH1 mutation who are not candidates for intensive chemotherapy. AGILE was a global study set to enroll approximately 400 patients with a primary endpoint of overall survival. We expect to complete enrollment in 2021. Early data from the Phase I trial combining 7+3 with ivosidenib or IDHIFA has been submitted for presentation at ASH. We expect the data to focus primarily on safety and tolerability with a preliminary look at efficacy. In AML, our IDH inhibitors act by releasing the block on cellular differentiation.

For our work in solid tumors, we're continuing our efforts to understand how this mechanism could translate to clinical benefit for patients with a variety of tumor types. Thus far, we're encouraged by the level of disease control seen in our Phase I study with Ivosidenib. And at ASCO in June, we presented the first data from the Phase I expansion cohort and advance cholangiocarcinoma. Cholangiocarcinoma is a devastating disease where we believe we can have a meaningful impact changing tumor biology and delaying tumor growth with a targeted well-tolerated oral medicine. There are few effective and no approved therapies in cholangiocarcinoma and the median progression-free survival in the second line setting is short. Data at ASCO demonstrated durable stable disease signal consistent with ivosidenib mechanism of action in a highly encouraging first look at landmark progression-free survival. Ivosidenib continues to be well tolerated with a favorable safety profile. ClarIDHy, our Phase III trial in this indication continues to open new sites in the U.S., Europe and Asia. We expect to complete enrollment in 2019 to support global registration. I'm now going to hand the call over to Andrew to cover our financials.

Thanks, Chris. I'll start by summarizing our second quarter financial results, which you can find in the press release issued this morning. More detail will be included in our 10-Q filing later today. For the second quarter of 2017, we recognized approximately $11 million of collaboration revenue, an increase of approximately $4 million compared to the second quarter of 2016. This year-over-year increase was primarily due to the achievement of deliverables under the Celgene agreement for AG-270, our program focused on MTAP-deleted cancers and our metabolic immuno-oncology research efforts. In addition, in the second quarter, we recognized approximately $1 million of reimbursement by Celgene for the Agios U.S. co-commercialization effort for IDHIFA. The reimbursement we received from Celgene for IDHIFA commercialization efforts is included in the collaboration revenue line and the amount will be broken out in the collaboration agreement section of our SEC filings going forward. Research and development expense during the second quarter of 2017 was approximately $80 million compared to approximately $51 million for the same period in 2016.

The growth in R&D expense was primarily driven by increased costs related to the ivosidenib program. There were 3 main drivers of this increase. NDA submission costs, including the manufacturing of our validation loss, clinical trial activity for the Phase III AGILE and ClarIDHy studies and the fact that Celgene no longer funds 50% of the program, which they did through August 2016. R&D expense also increased compared to the second quarter of 2016 as a result of preparations to initiate the AG-348 pivotal program in the first half of 2018. And the $3 million upfront payment as part of the Aurigene license agreement signed during the second quarter. General and administrative expenses were approximately $60 million for the second quarter of 2017, an increase of $3 million from 2016, driven by increased headcount and other professional expenses to support our growing commercial infrastructure for the launch of IDHIFA and potential launch of ivosidenib in 2018. Turning to our cash position and runway guidance, we ended the second quarter with cash, cash equivalents and marketable securities of approximately $716 million. In our press release this morning, we reiterated our cash guidance with our current runway through at least the end of 2019. Before I close, I would like to note that with the IDHIFA approval last week we'll begin to record royalty revenue as a percentage of net IDHIFA sales. As a reminder, our royalty percentage is low double digits to mid-teens tiered based on sales levels. And at this point we don't plan on providing guidance on this line item. With that, I'll turn it over to David to close.

Thanks, Andrew. We've proven our ability to discover novel biology and translate those discoveries into precision medicines in areas of high unmet need. IDHIFA is just the start as we expect to launch ivosidenib in 2018, move AG-348 into pivotal trials, submit the sixth IND for MTAP and continue to fund R&D to support our ability to do this again and again. I want to thank you for your support and hope you enjoy the rest of your summer. And with that, I'll turn the call back over to the operator to take your questions.

(Operator Instructions) Our first question comes from the line of Eric Schmidt with Cowen & Company.

Maybe for Chris, on the AG-348 non-transfusion dependent patient trials to the couple of other details. I think you mentioned, at the primary analysis, at 6 months, you need to achieve 1.5 grams per deciliter increase in hemoglobin over multiple visits, could you just provide little more color there what multiple means?

Eric, this is David. Thanks for your question. I'm going to turn it over to Chris to go through that with you.

Eric, Chris here. So you -- I just want to get a little -- I'll answer the question from 2 angles, you started with transfusion dependent and then...

I'm sorry I meant...

You moved in some details around NTD. So let me start with -- go with the NTD. So that trial is designed as a primary endpoint which is demonstrate an increase in hemoglobin of 1.5 grams per deciliter. And that will be measured at the 6-month time period from when patients get randomized either drug or placebo. We put that trial together based on all the data we've been deriving from DRIVE PK as well as in my remarks when I talked about interacting with regulators, the doctors who have been working with us as well as patients to put the study together. So just real high-level to run through it. Patients are randomized to AG-348 versus placebo. They are on active drug or placebo for 6 months. The primary endpoint is read-out at that point at which time, patients get unblinded and those on placebo can crossover and move into an extension period and patients who are on AG-348 and who are responding and doing well can also continue in the extension phase.

And Eric, this is David. Just 1, you are asking about how many visits do they have to have 1.5 grams per deciliter. We put that language in there to make sure that anybody who has got a blip up, which is uncommon, but does -- can occur, doesn't get counted. We haven't given out some of those (inaudible) details yet. We will as the protocol gets ready to start because those are all being finalized now but it will be more than 1 visit to make sure it really captures patients who have a sustained response which, as you know, from the DRIVE PK, when you have a response, it typically is very sustained and doesn't wobble around.

Got it. And is the [PRL] a formal secondary endpoint in that trial?

Yes. We've been developing a tool and we've been in lots of contact with regulatory agencies to get feedback back-and-forth on that. So that will be a formal endpoint. We think that's going to be important in terms of supporting the additional clinical benefit in patients who respond.

Our next question comes from Anupam Rama with JPMorgan.

On the back of the IDHIFA approval, is the expectation that ivosidenib would also be similarly eligible for a full approval? And is that something you guys will specifically request as part of the NDA submission? And then maybe a quick 1 on AG-881. The preclinical data are supposed to be presented at the Triple Meeting, what should we be looking forward in that data set and when can we expect some clinical data from this program?

I'll take the first one and Chris will take the AG-881 one. So on the Ivosidenib, it's obviously too early for us to comment on the regulatory interaction. Obviously, we were very pleased and gratified along with Celgene to receive full regulatory approval. Quite unusual based on a Phase I/II clinical trial. And it really demonstrates the true clinical benefit that patients do achieve with IDHIFA, based not only on the durable CRs, the transfusion independence and other factors as well. We hope that we see a similar approach from the agency on Ivosidenib. Because as you'll remember, those trials were designed in parallel and have a lot of similarities in terms of both patient population and the input and data that we collected. But it's just too early for us to comment on how we're going to approach them, other than we do plan to take the same regulatory strategy and we'll give you updates as we go forward. We remain on track to submit that NDA at the end of this year. Let me turn it over to Chris to talk about AG-881.

For the submissions for the preclinical data, we've just been doing a lot of work with AG-881 in some of our preclinical models and to provide some additional information on the preclinical profile of the molecules. So that's what will be published at the Triple Meeting. As far as AG-881 goes into clinic, we did state in our press release that we completed the enrollment of dose escalation phase of the Phase I study of AG-881 in IDH1 mutant-positive glioma. And so now, we're working with our partner Celgene in terms of looking at the data from PK and safety perspective and pulling together what the next steps are going to be in terms of bringing that molecule forward. I don't have a clear picture yet on when we will publish some data, clinical data on that but hope to update you soon on that. And then the other piece that we put in the press release is we're going to update that cohort data that we showed at the SNO meeting last year for AG-120. So we're looking forward to that. And that pulls together this whole picture in this disease where we have 2 molecules in development. We see a high unmet need and our decisions about what the next steps are with either both molecules will really be data driven.

Our next question comes from Michael Schmidt with Leerink Partners.

I had 1 regarding the IDHIFA label. I thought it was very interesting to see the recommended treatment duration of at least 6 months in patients without disease progression and I was wondering what percentage of patients you expect to fall into that category? Then I have a follow-up.

Yes. Thanks, Michael. This is David. I'll turn it over to Chris.

Well, the reason why that language was put in is because if you look at the time to complete remission or CR/CRh that generally occurs in a 2 to 3-month time frame. The median time to their first response is 1.9 months and the median time to the best response of CR/CRh is 3.7 months. And there is also language in the label that talks about patients who achieved the best response of CR/CRh, 85% or so did so within 6 months of initiating IDHIFA. So the direction there is for in the absence of florid progression of disease to give the IDHIFA its best chance of working in patients. How many do we think will be actually on the drug for that long is a not an easy question to answer but you can bring into play response rates and how long it takes you to declare response to give some sense of what that will look like, but the direction is much more important in terms of talking to physicians and health care providers about how long should I keep treating with IDHIFA in the absence of florid progression and this language says you should hang in there for at least 6 months if the patient is doing reasonably well.

And Michael, I think the other thing that it reflects and that's why we were so pleased with this language is it clearly reflects the agency's recognition of the unique mechanism of action here. Because you don't typically see this with the cytotoxic chemotherapy, but with an agent that works through differentiation, you want to give the drug the ability to have its best response.

Yes. And the question regarding potential development in frontline treatment of AML, you obviously already initiated the AGILE study in elderly patients. Wondering what next steps could be in terms of addressing the younger patient population in combination with 7+3 and what different considerations could be there in terms of trial design?

Well, we've got an ongoing Phase I study with 7 and 3 that's built to accept patients with either an IDH1 mutations, in which case, I guess, 7+3 plus ivosidenib and if even IDH2 mutation they get IDHIFA. So we're collaborating with Celgene on that trial and that sets up nicely for the 20% of patients with an AML diagnosis from going to have an IDH mutation. And we're going to provide -- you'll get a look at that data from a safety and some preliminary efficacy data at the ASH Meeting. So your question is a very interesting one about what the next steps would be. Clearly one can think about a randomized trial, which is a very simple answer, 7+3 plus or minus the requisite IDH inhibitor. The endpoints are numerous and they range from overall survival, which has been a pretty standard endpoint and lengthy one to accomplish. And then recently we're starting to see some interest in event-free survival as an endpoint in frontline AML study. There is a lot of interest in molecular response. So where were going to end up with this remains to be seen, but it's an area of great interest for us and we're starting to get the data together that suggests that we're going to be in a place to do that.

And remember Michael, this is David here, that in the press release we did mention that we've submitted an abstract to ASH for the first look at the 7 and 3 data. And on a previous quarterly call, we did mention that we've already passed the safety gate. So we know that it was safe to combine either IDHIFA or ivosidenib with full doses of 7 and 3 and then consolidation. And you'll see some of that data at ASH this year hopefully.

Our next question comes from Terence Flynn with Goldman Sachs.

This is Cameron, on for Terence. First on AG-348, can you just give us any update on plans to address the younger PKD patient population? And then second on AG-881, did you reach the maximum tolerated dose in Phase I? And can you provide any color on the safety and tolerability profile there?

Thanks, Cameron, I'll take the first one on AG-348 in Pediatrics, and I'll have Chris walk you through where we are with AG-881 on NTD et cetera. So on AG-348, as you know we've always said that our commitment in pyruvate kinase deficiency is to treat all available patients. And obviously like with most diseases, we're starting in adults, as Chris has outlined. But we do feel committed to try and understand how best to treat children with this serious disorder. Obviously, we need to wait to see more data on AG-348's effect on hormones to see whether there is a path forward with AG-348. Like all of our drug development programs, we have a robust chemistry back up set of programs. And if it's deemed necessary for us to create a molecule that is more appropriate for children because it lacks aromatase binding, we're obviously working on that as well. And so we'll be able to decide as we look through those on how to select that. But clearly, we have a commitment to treat all patients with pyruvate kinase deficiency. So let me turn it over to Chris to talk about AG-881.

So lot of work going on there. And as we pointed out that we completed the dose escalation. We did not reach NTD and we're exploring a number of different doses there and looking at the PK and the safety profile. And what -- I don't want to get into the individual details because we're still looking at that data. But certainly look forward to bringing it when we're kind of ready and have the critical mass of data to present at a meeting.

Our next question comes from Alethia Young with Crédit Suisse.

This is Derek, on for Alethia. A couple of quick ones for us. First for AG-348, could you elaborate what was the enrollment situation for the PKD Natural History Study, just want to get a sense of how the enrollment will go for the pivotal studies? And second, wondering, I know it's depending on the data, but is it -- but it's a single arm transfusion-dependent fileable on its own or is it going to be dependent on the other trial?

Derek, I'll handle both of those straightforward. So for the enrollment into the Natural History Study, remember, that's not a treatment study, that's a purely chart review. So it's certainly less intensive for patients. We're very gratified that over a couple of year period we enrolled over 200 patients and that has now closed for enrollment. I think that tells us there is a growing interest in the PKD community and physicians interested in this disease. Remember they've never had anybody try and treat this disease before, I think it is also important to remember that for both the Natural History Study and the DRIVE PK study, there is relative limited number of trial sites that were opened. And in the pivotal program, we will have a much higher number of sites around the world. Your second question around regulatory utility of the single arm TD trial independent of the NTD, we obviously can't go into that kind of detail with our regulatory conversations. I think it's important to recognize that in general, the FDA looks at the totality of the data. And so these are 2 separate trials. And as they look at the data from as the trials emerge, obviously, we'll work with them to understand in different patient populations how to move forward. But it's just -- I can't really comment any further on that at this time, but we're very pleased with the regulatory interactions we've had and very pleased to be moving forward with these 2 trials to capture all adults with PK deficiency.

Can I just squeeze 1 more question? You capped those titration to 50 milligrams, wondering what is the reason for that.

We're looking at -- in that those optimization period, the range of doses that patients can be treated is 3 doses, really 5 milligrams, 20 milligrams and 50 milligrams. And the reason why we've capped it at 50 milligrams is when we've looked at the data, it would appear that responders are going to be adequately covered, have adequate exposure at a top range of 50 milligrams. And that way we'll optimize the therapeutic index if you will. So we'll achieve the exposure that we need to achieve in order to capture the responders and not go over that. So that's why we use the term optimal dose.

Our next question comes from Yatin Suneja with SunTrust.

This is David, on for Yatin. I have a question on now that you have approval in the U.S. for IDHIFA, maybe could you provide an update on the regulatory strategy in the EU? And also I had a question on AG-348 for the non-transfusion dependent trial. So the primary endpoint is 1.5 grams per deciliter increase in hemoglobin. Curious how you selected 1.5 grams per deciliter as an endpoint as opposed to some other cutoff, was this due to some starting reasons or some type of efficacy that you saw.

David, maybe I'll handle the first one quickly and then turn it over to Chris to talk about the AG-348. So we've said previously during the year that in 2017, for both IDHIFA actually and ivosidenib is the year that both Celgene and Agios together and independently depending on molecule will seek regulatory guidance in Europe to decide whether or not we can potentially file with the existing data packages or whether we need to wait for the Phase III's to readout. And so stay tuned as we complete those regulatory interactions, we and Celgene will let you know where those stand. Then I'll turn it over to Chris to talk about the primary endpoint selection for the NTD trial.

Thanks, David. So when we were talking about what was an improvement in hemoglobin that we thought could be associated with clinical benefit in DRIVE PK, we talked about 1 to 2 grams per deciliter increase, because that's what's associated with splenectomy. And in general practice when patients get the transfusions they get 1 to 2 units of blood, which results in 1 to 2 grams increase and patients generally feel better. So as we looked at the data, we wanted to understand what's the variance in patients who didn't respond. And in looking at the data from DRIVE PK, we are settling at 1.5 gram per deciliter cutoff, because as David alluded to in one of the earlier questions is that occasionally you will see these blips where a patient will go up and they can go up 1 gram and 1.5 grams, but in terms of sustained over 2 or more visits, you just don't see that happen. So that's why -- that's where we settled with 1.5 grams. We think it will unequivocally show against placebo that AG-348 in responding patients is a resulting in durable responses that are going to result in meaningful clinical benefit.

And I'm showing no further questions at this time. I'd like to turn the call back over to David Schenkein for closing remarks.

Yes. I'd like to thank everybody for participating today. Very exciting time for us here at Agios, and particularly most importantly for the patients out there who now have a new treatment option with IDHIFA, and like to wish everybody a healthy and happy rest of the summer. Thank you very much.

Ladies and gentleman, this concludes today's conference. Thank you for your participation. Have a wonderful day.