Infinity Pharmaceuticals Inc (INFI) 2008 Q2 法說會逐字稿

Good day , everyone, and welcome to the Infinity Pharmaceuticals second quarter 2008 financial results conference call. Today's call is being recorded. At this time, I'd like to turn the conference over to Mr. Steve Kafka. Please go ahead.

Thank you, operator, and good afternoon, everyone. My name is Steve Kafka, I'm Vice President of Finance for Infinity . Here with me this afternoon are our CEO Steven Holtzman and our Chief Scientific Officer, Julian Adams. Adelene Perkins, our Chief Business Officer is on holiday this week and she sends her regards.

Before we begin today, let me state that we will be discussing our recent R&D and business progress and review our financial results for the first quarter of 2008. The press release detailing our results was issued this afternoon, and is available on our Web site at infi.com. The slides that we are using today to accompany this call can be be accessed now as a Webcast on the events page in the Investor section of our Web site. The Webcast of this call and slides will be archived on our Web site for 30 days.

On the call today, we'll be discussing our future discovery and development efforts, our collaborations, our financial position and other future expectations. These remarks constitute forward-looking statements for purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act.

It is possible that our actual results may differ from what we project today due to the factors, which are described in the risk factors section of our most recent 10-Q filed with the SEC in May. While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then current views. We may update these statements in the future, but we are not taking on an obligation to do so.

And with that, I will now turn the call over to our CEO Steve Holtzman.

Good afternoon, everyone, and thanks for joining us on, what up here in Cambridge is a beautiful summer afternoon. It occurred to me today that just about seven years ago, that I left Millennium to start Infinity, and it caused me to pull out the mission statement for the Company and share it with you. And it's a mission statement which has been built on and has been embraced and expanded on by people like Julian, Adelene, Steve and the others here, the 150 citizens of the company.

And the mission is to build a community and a company capable of sustainably discovering, developing and delivering to patients innovative important new medicines that make a material difference in their health, well-being and lives. As I think about delivering on that mission today, I think about one key for this company, one single key , and that's in the word "execution".

We need to be engaged in great clinical development based on world-class science and informed by data , and we need to be responsive to data, accelerating when the data is good, opportunities to get registrations quickly, killing projects when the data tells them they are likely not going to work and modifying projects in the face of new data , our own but also that which comes about in the community.

And sometimes those changes in the face of evolving data can be disturbing. It's not what you said you were going to do or thought you were going to do, but it's the right thing to do . And I think we have had a great year of doing all of those things, responding to all the data. And hence really today the majority of the discussion will be led by Julian talking about what we have been doing executing on our pipeline. My role in the next couple of minutes is just to offer a reflection really on the broader market situation.

Having been in the industry for 20 years, I recently had one of our major investors sit across the table from me today and say, "Geez, has it fundamentally changed? Can you still build biotech companies today? Am I right to be investing in companies I believe in, or should I be hanging in back until after the event?"

I think what he was reflecting then, let's face it, it's been a tough year, a year that leaves many fearful. We suffered through the sub-prime mortgage crisis, the fall of major financial institutions. We've seen skyrocketing oil prices, we've seen a decline in the value of dollar. Anyone who's taken a vacation recent in Europe will know what I'm talking about.

And I think the reaction to that in the investment community has been a flight to safe harbors, wherever they may be, and if you were to say what is the antithesis of a safe harbor, well I guess it's got to be drug discovery, which is intrinsically, risky, long and expensive. And particularly drug discovery when taken on by a young company, because after all you have compounded the technological risk with the organizational risk.

One of the hardest things to do as a CEO in such an environment, when people are saying, "Do something, Do something ," is maybe not to do something. Not to do something rash, not to do something that takes you away from what you really should be doing. And so what is our challenge? It's to not get distracted.

And what is our job? Our job is to stay focused, to deliver, execute, knock off one by one our key objectives, and those key objectives all relate to making the best medicines out of the innovative new drug candidates Julian and his team have been churning out here.

And in that regard, this was a huge quarter, a huge quarter for Infinity. Indeed it's been an incredible year. In our lead, anti-chaperon program, we've made incredible progress with both our IP molecule IP 054, and our now new oral molecule 53. And our hedge hound pathway inhibitor program , we've reported great pre-clinical data and are moving ahead and will be and intend to do, in man, before the year is out.

Equally our financial condition remains strong. We continue to be in great shape. We have an aggressive investment program in our molecules, because they deserve it. At the same time, we continue to have moderate burn such that we continue to project to have cash into 2010. We are able to maneuver from strengths, not have to beg out of weakness.

And with that as a backdrop, I'm now going to turn the call over to Julian, who's going to talk about the progress we've been making in our major programs. Dr. J?

Thank you, Steve, and good afternoon, everyone. As Steve said, I will focus, focus, focus on our pipeline. We have a pipeline that's making great progress. Our lead anti chaperon therapy program targets the Heat Shock Protein 90 system. Our next most advanced program turns and targets to the Hedgehog pathway. Let me begin with the anti-chaperon update.

As Steve mentioned, we have two distinct molecules in clinical development inhibiting HSP90. First the IPI 504, our IV product also known as retaspimycin hydrochloride. Our second is our IPI 493 is our oral agent, which has just started clinical development . Critical to understanding Infinity's approach to developing our anti chaperon portfolio is a clear scientific approach to clinical development.

So consider a normal protein, which has developed a mutation rendering it oncogenic, which drives the cancer cell growth and survival. We have initial targeted therapies, such as TKIs, like Gleevec and Tarceva, which take care of the problem initially, but eventually resistance mutations arise, which evade TKI therapy. In both these settings, the oncagenes are highly dependent on HSP-90 for their function.

So in the resistance setting IPI -504 which binds to HSP-90, renders the oncogenic protein unstable and drives that protein to degradation, forcing cancer cell death. We view this introduction of IPI 504 as a rapid registration pathway in the refractory set ting. Alternatively, we can think of using IPI-504, or potentially our oral molecule, IPI 493, in combination with kinase inhibitors up front, and look to prolong the remission and delay the emergence of resistance.

So in this strategic development paradigm, there is a fast path through registration by treating patients in the refractory setting. The exemplar of this strategy is our registration approach and in GIST. So let me remind everyone of the phase I results from ASCO 2008, where we reported activity and safety of IPI-504 and refractory GIST. We had a 70% overall disease control rate.

We had an estimated progression free survival of 12 weeks , and the drug was well tolerated with an acceptable safety profile. It is important to understand the context of why stable disease and progression through survival, even in the face of a low response rate is meaningful. Let's turn turn to the registration of Gleevec initially in the GIST setting.

As you can see, where the patient experiences a partial response or stable disease, their overall survival was identical. If we turn to [Sutent] in the second line setting, in a placebo controlled randomized registration study, you can see that the time to progression on placebo was a short six weeks, whereas time to progression on [Sutent] was 27 weeks. And in this setting, the response rate is a mere 7%.

This implies that stable disease for greater than six weeks is meaningful, and therefore suggests that the results of our phase I trial with 504 may actually double progression free survival. So with that in mind, we have taken on a phase III registration trial that we are now calling RING, or retaspimycin in GIST. RING is a randomized double blind placebo controlled study in patients refractory to Gleevec and, is [Sutent], but not limited to other experimental TKIs.

The study will take place at more than 50 sites globally in support of a potential international registration. We have the trial under special protocol assessment in consultation with the FDA, and we have sought scientific advice from the European authorities, thereby harmonizing the concerns of both agencies in our protocol.

The primary end point of the trial is progression free survival or PFS, and the secondary end points include disease control rate, time to progression and overall survival. We evaluated many trial designs and determined that this trial is the best test of our hypothesis in the fewest number of patients making it a very efficient trial. We expect to enroll approximately 200 patients, and we anticipate the trial being completed in approximately 400 -- 24 months , positioning IPI 504 as the potential first in class anti-chaperon agent.

We also believe that there's a broad potential of anti-chaperon therapy beyond GIST. We are now in the phase II portion of our phase I-II study in non-small cell lung cancer. We were very encouraged by the early signs of activity in the phase I portion of the trial we reported at URTC last year. We are currently evaluating patients with both mutant EGFR as well as wild type EGFR, and we anticipate reporting data by the end of the year.

In addition, we are also evaluating IPI-504 in its first combination trial with Taxotere, a docatax or docataxel. As you know, we also recently announced that we discontinued enrollment in our signal finding study in hormone refractory prostate cancer. Here, as Steve said, we were reacting to the data. We saw no evidence of biological activity; and based on that , we concluded the overall risk benefit ratio did not justify continuing the evaluation of IPI 504 as a single indiction in this -- indication.

We are learning from our experiences. We are looking to paste enrichment strategies in diseases which will be susceptible to anti-chaperon therapy. As such, we anticipate additional clinical trials of IPI 504 commencing by early 2009. Let me turn now to our oral anti-chaperon agent IPI-493.

493 has just entered the clinical development and is an exciting milestone for the company. 493 has shown significantly oral bio availability, potent and selective inhibition of HSP90 in pre-clinical models. We have anticipate presenting extensive pre-clinical data on our molecule, including both the chemistry and the biology at the upcoming EORTC conference in October.

We are evaluating IPI-493 in a phase-I study in patients with advanced solid tumors. The study is designed as a dose escalation to assess safety and tolerability, as well as to identify the dose and schedule for further clinical development. We will also evaluate biological activity by resist and other disease specific markers.

Let me wrap up this section of the R&D update with a quick report on our alliance with AstraZeneca. Frankly it's just going great. The program as fully transitioned from our previous partners at [Metamue] to the folks at AZed or AZ in this country.

The senior-level leaders at AZ are part of a joint development team , and the operational sub-teams are all in place. Finally, as a testament to Infinity's capable contribution, Infinity will be running the RING, phase III registrations trial in GIST. So overall it's a great collaboration. Let me turn to our next most advanced target, which is the Hedgehog signaling pathway, exemplified by I PI 926.

As many of you know, IPI 926 is a semi-synthetic analog derived by the natural product, cyclopamine. The chemists did a heroic effort in developing a molecule that is approximately a hundred fold more potent than cyclopamine and has excellent pharmaceutical properties.

As presented at ACR earlier this year, we have encouraging pre-clinical data on IPI 926. It is a very, very potent inhibitor of Hedgehog, and we have shown significant anti- tumor-like activity and excellent pharmaceutical properties in mouse models of medulo blastoma and small cell lung cancer. We also anticipate publishing additional pre-clinical data in other models at the upcoming EORTC meeting .

As Steve mentioned, we are also on track to enter the clinic with IPI 926 later this year. We are designing a phase I study in patients with solid tumors. However, we will enrich in disease populations where there is evidence of aberrant up regulation of the Hedgehog pathway, such as pancreatic cancer, prostate cancer, small cell lung cancer, ovarian, colorectal cancers as well as basal cell carcinomas.

This is truly exciting program, and we look forward to starting our clinical development by the end of the year. In summary, we have had a very productive year thus far. About execution. All about execution. We look forward to updating you as the pipeline progresses and the data emerge.

I'll pass the call to my colleague, Steve Kafka, to walk us through our financial results. Steve?

Thanks, Julian. As you've just heard, Infinity had a terrific second quarter executing on our R&D activities. That is reflected in a strong second quarter financially as well . The results I'm summarize for you briefly are largely in line with consensus estimates. We ended the second quarter with $94.5 million in cash and equivalents, and our revenue for the second quarter was $2.5 million, as compared to 5.7 million for the second quarter of 2007.

You will recall at the end of 2007, we successfully completed all if our technology access alliance obligations to that Novartis. In addition, Infinity transitioned our BCL II program to Novartis in February of 2008. Therefore, Infinity did not recognize any revenue from the up -front license fee or for reimbursable R&D services for the quarter ended June 30, nor do we expect to recognize such revenue in future periods.

On the expense side, given our HSP90 program as a 50/0 cost and profit share with AstraZeneca, our R&D spend of $10.8 million for the second quarter of 2008, reflects total R&D expenditures by Infinity of 15.3 million, less 4.5 million in reimbursable amounts from AstraZeneca.

The increase in R&D expense this past quarter over the second quarter of 2007 is primarily due to an increase in -clinical and pharmaceutical development expenses related to the advancement of our pipe-line programs , partially offset, of course, by higher AZ reimbursable amount. As a result of our continued delivery against our R&D objectives, we're able today to reiterate our 2008 full-year and cash runway guidance.

As you may recall, we started this year where 114 million in cash and investments, and we continue to expect a net cash burn for the year of 35 to $45 million. Given our current plan, we continue to expect our current cash to support operations into 2010, which we believe will take us through several important milestones in our R&D programs.

So on the topic of milestones, I will now turn the call back to Steve Holtzman to share our outlook and a couple of closing remarks. Steve?

So thank you, Steve. I think what I just simply want to focus on right now is what's taken place in the last quarter and what we see happening in the remainder in the year in our execution on our pipeline. From a business perspective, we will end the year within the cash range that we projected. We'll still have money into 2010.

In terms of our anti-chaperon program, we said we'd present data on the GIST trial at ASCO. We did. We said we'd secure an SPA for a phase III to be able to leap -frog from a well designed phase I to a phase III. We've done that.

We said we would initiate our phase I with oral 493. That has now occurred. In remainder of the year with respect to the anti-chaperon program, we will initiate the phase III registration trial of 504 and GIST. We'll rolling out the data in what we've seen in our phase I/II non-small cell lung cancer trial and will be positioned by the end of the year to launch additional 504 clinical studies.

And then in our Hedgehog pathway inhibitor, we presented extensive data along with our colleagues at AACR helping to validate the importance and potentially major importance of Hedgehog in the future of cancer therapy, and we reiterate our guidance that 926, our lead Hedgehog pathway inhibitor will be entering clinical trials, we anticipate , before the year is over.

So I want to thank you all for joining us on this summer afternoon . We'll turn it over to the moderator, and Julian, myself and Steve are happy to take any of your questions.

Thank you. (OPERATOR INSTRUCTIONS) We'll go first with Andrew Vaino with Roth Capital.

Hi, thanks for taking my call. Just a quick question. In the prostate cancer, you mentioned there was no biological activity. Did you see, for example, any decline in PSA at all, or just nothing at all?

We didn't see any decline in PSA that constituted a partial response. We did see some small changes in a few patients. Let me remind you, that the protein we were targeting, the client protein was the [androgen] receptor. While it worked well in clinical studies, it's just one of those things that didn't translate very well to the clinic, and the [androgen] receptor of course is a transcription factor for PSA.

So PSA was a very good bio marker for what would be the potential drug 's activity. Not seeing it after enrolling about 14 patients in the post- Taxotere setting, let us to believe that we did not have a sufficient clinical benefit to continue.

Okay. Further, in terms of new clinical trials for the 054, can you be specific as to which cancers you would target?

Well, there's been a lot of activity in -- reported at ASCO in breast cancer. We have a lot of interest in the designing the appropriate strategic trial for breast cancer. There will be several other cancers as well. Too early to comment.

Okay, great. Thank you very much.

Thank you, Andrew.

We'll go next with [Lounan Gee] with Jefferies & Company.

Hi, guys. This is [Lounan in for Youn] I just had a quick question on the registration trial for GIST . Do you guys -- you mentioned that the -- you guys estimate the total length of study to be 24 month. Do you have an interim analysis built into that?

We have not guided as to the specifics of that trial, but I assure you that given that it's a smallish 200-patient well-designed trial, it's very efficient to look for the event rate and the -- the event rate as we look for a progression of free survival benefit over the placebo arm.

Yes. We are not guiding to, and we do not anticipate an interim analysis on the trial.

Okay. And just a quick housekeeping question. On the oral entering the clinic and -- for 054 when it enters phase III later in this quarter, are there milestones associated with -- milestone payments associated with those events?

Thanks for the question, Lounan. We have not guided to any specific development or commercialization milestones in our relationship with AstraZeneca.

That is confident information, which we're not privileged to disclose.

Okay. Thank you very much.

Thanks for the question.

Go next to Julie [Failen] with Robert W. Baird.

Hi. Thanks for taking the question.

Hi. Julie.

I was curious if you could give us more color on IPI 296 potential trial design?

So this is a trial design in advanced solid tumors. It has a more traditional dose escalation design. We're not giving the exact details of it, but we hope to rapidly dose-escalate based on pre-clinical safety in animals, and hope to get the pharmacological doses as quickly as possible.

Yes. I think we also -- Julian, didn't we report maybe at A ACR on biomarkers that could be used in this context to look for biological activity?

Indeed. We will be also guided by by the bio marker [Glee-one], which is a transcription factor driven by the Hedgehog pathway, and these will be included in skin biopsies to look at inhibition of [Glee-one] transcripts.

So we 'll be able to see biological activity in addition to the classical phase I objectives of safety tolerability and recommended phase II doing schedule.

That's correct .

And do you have any possible interim analysis timing at this time?

In a phase one, there's rarely an interim analysis applied. There's no plan for that. We hope to get to a biologically meaningful dose. And we'll be using biomarkers in an experimental way to determine whether we are achieving the kinds of plasma concentrations necessary to inhibit the pathway.

All right. Thank you.

We'll go next to [Christian Agordy] with Rodman & Renshaw.

Hi. Thanks for taking my question. My question is based on the lung cancer trial, the phase II file. As I understand, the data will come out at the end of the '08 for the phase II component of the trial?

That's correct.

Going ahead, Julian, would you intend to partner the phase II trials? How would we see the phase III trial to be in the lung cancer? Is it in combination? I mean, what is your vision of the further development of the GIST, IPI-504 in lung?

Let me -- this is Steve. Let me take the first part of your question, which had to do with partnering and Julian will take the second part of your question pertaining to the strategy . All of our HSP90 inhibition programs, IPI 504 and in all indications 493, are part of the AZ partnership. With respect to the clinical design, Julian you can address single agent and combination the strategies.

Right. If you meant partnering as partnering with other drugs, then I can answer that question. We first want to look at the single agent activity, and we 're -- if there is a single agent signal sufficiently robust, we would go after a registration pathway similar to the way we pursued GIST . Alternatively, we have looked at specific combinations that are important in lung cancer.

You've -- we've talk about the combination with Taxotere which is a standard second-line treatment in lung cancer, and we will position ourselves for a dose regimen that might be explored that way. But, again, it's dependent on the data coming out of the phase II studies .

Phase II which is ongoing, a single agent, am I correct?

It's single agent at a multicenter, and it's accruing very well . We're looking at mutant EGFR and wild EGFR. We don't want to be too smart for our own good. We know in certain cases wild EGFR is amplified. That may well be susceptible for HSP90 inhibition.

Thank you.

And, it frankly reminding you that in terms of known mechanism of resistance that evolve to TKIs, Julian.

There are two conditions for that we know of. But there are probably more. The two conditions that have been weld studied are point mutations, specifically the T790 M mutation in the mutiny GFR. And the other mutation is a compensatory activation of a wild type [cemet] amplification. So in both of those settings, we've presented at least pre-clinical data that IPI 504 is extremely effective in those cancer times.

Regarding the Hedgehog -- I have one more question. Regarding the Hedgehog data. The more pre-clinical data which is going to come out of the EORTC, can you give us color on what tumor models are you showing data on?

So I think you'll have to stay tuned.

O kay.

I've listed some of the tumors we're going after. So you can imagine --

Okay.

Before we treat patients we're likely to model that in a mouse first . We have both genetic models as well as tumor zenographs as well as orthotopic tumors. We have a very large array of collaborators that work with us , and I think you'll be very impressed by what we're going to unfold.

Okay. Thanks.

We'll go next to Phil Nadeau with Cowen & Company.

Good evening. Thanks for taking my questions. Just first a few questions on the RING study. What's the powering of the study, what percent power to detect what difference between IPI 504 and placebo?

So without getting into detailed statistic, because we haven't gotten into that, we're looking to ruffle double PFS and that's at 90% power.

Okay.

And a significant hazard ratio as well.

Okay. The patients that are enrolled -- I know you said, I'm sorry I missed it. This are they refractory to both [Sutent] and [Gleevec] or can they be refractory to one but not the other? What is the enrollment criteria?

Thank you for bringing it up. I want to be very clear about. Patients will have had to have pressed both on [Gleevec] and [Sutent] but not limited to just [Gleevec] and [Sutent]. They may also progressed on other TKIs, experimental agents, such as [Sorafinib] [Nolodinib] , M-TOR inhibitors, the only exclusion criteria from a drug perspective is they can not have been on other HSP-90 therapies.

And Julian, in fact, in our expanded phase I, which formed the basis of the SPA and the RING trial, the average number of prime therapies was more than just the two of them.

That's right. The average prior therapies was 2.7 with many patients having three and four failures on other TKIs, and other regimens. And so the phase I population will be as identical to the phase III population. I should have said that the or way around. The phase III population will be identical to the phase I population. So it's not, your classic biotech era, test one group of patients and then go to the phase III test a different group of patients and low and behold your trial doesn't work.

All right. And since these patients are going to be so sick, it does seem like there's going to be very rapid progression for the placebo arm. How far apart are the scans going to be to make sure that you can show the significant difference and -- ?

That's a great and very sophisticated point that you're making for all of the callers. We have very frequent scanning. We're planning to scan at two, five, eight, and then six weeks thereafter. So very early scanning of patients because we want to catch any progresser and offer them the opportunity to cross over to the IPI 504 arm.

I think to pat Julian and [David Grazell] and the team here on the back, I think the whole way in which the imaging charter was done with central reads so you don't run into the problems others have had using PFSs and end point. The attention to the ethics of a placebo controlled trial, I think that had everything to do with why in an environment in which most people are going to going through three, four, five, SPA cycles, we got it done in one.

In addition we did not design this trial in a vacuum. We consulted with the international group of investigators in GIST and sarcoma, both in the US , Europe, Australia, and Korea. We also talked to the patient advocacy groups because we're very sensitive to their concerns as well. So we put a lot of effort into a very efficient and methodical and very crisp end point to the trial.

Okay thanks. That's a great answer. And one last question just on the prostate cancer study. I know you said you didn't see any real signs of efficacy in the study, but you also mentioned, I think, in your prepared remarks today and also in the press release that it was the risk benefit calculation that really caused the trial to be terminated. Did you come across any new risks in the prostate cancer study that maybe hadn't shown up in prior trials and other indications?

Let me just address risk benefit simply. If there's no benefit, then all you're subjecting to -- subjected to is risk. So without benefit, there's a small number of patients. I wouldn't say we saw any unanticipated new risks. I think the drug is generally well tolerated and we just elect to close the trial primarily for lack of efficacy and not having the risk benefit ratio as stated .

Okay. Great. Thanks for answering my questions.

And ladies and gentlemen, due to time constraints we'll take our final call from Derek [Jalincig] with, is SIG.

Hi. This is Andrew filling in for Derek. Now that the oral's in the clinic, do you see any indications that may be favorable to wait for the oral data to come out and start a trial with that in stead of 504?

Very wise question? We talk about that all the time. Reality dictates that we're a year and a half to two years behind 504. So we're pushing 504 obviously as hard as we can in the settings that we've described because we think there's a genuine path to registration.

But you're quite right that with the flexibility of dosing an oral agent, looking at different schedules and the potential for revealing even possibly better activity , we hold open the possibility that 493 in certain settings may work.

Let me give you an example. If we were to go in a front-line setting, for example, in lung cancer with an oral Tarceva; oral place very well with oral. So that is just an example. It's not a prediction.

O kay. And then along the same lines, should the phase II data in non small cell flush out with what you've seen before and the phase one, where do you see 504 positioning itself in the non-cell market, like competing against Tarceva in the third line, or I guess how do you see it in the long term?

I think it would depend on the quality of data, the quality of responses, whether we're seeing simply stable disease or we're getting partial responses, I think we just need the data to mature to be able to make that call. So both options are open right now. Either combinations with Tarceva in the third line or combinations with Taxotere in the second line, and continuing to explore other active agents in lung cancer, including Olimpta.

Okay. That's it for me.

Thank you.

We have no further questions. For closing remarks I'd like to turn the conference back to Steve Kafka.

Thank you very much. Appreciate your participation and attention this afternoon, and of course, as always we're happy to take your questions as well we are available. So thanks and have a great rest of your summer.

Ladies and gentlemen, this does conclude today's teleconference. We appreciate your participation. You may disconnect at this time.