Infinity Pharmaceuticals Inc (INFI) 2009 Q4 法說會逐字稿

Good day, and welcome to the Infinity Pharmaceutical fourth quarter 2009 results conference call. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. Gerald Quirk. Please go ahead.

Thanks, Anthony and good afternoon, everyone. My name is Gerald Quirk, Vice President of Corporate Affairs and General Counsel at Infinity. With me here in snowy Cambridge, is Adeline Perkins, our President and Chief Executive Officer. And joining us remotely is Julian Adams, our President of R&D and Chief Scientific Officer. On today's call, we'll be discussing our recent business and R&D highlights. and reviewing our 2009 financial results.

The press release detailing our results was issued earlier today and is available on our website at infi.com. During this call, we may make forward-looking statements about our future expectations and plans, including clinical development milestones and financial projections. It's possible that our actual results may differ materially from what we project today, due to the factors described in the risk factor section of our most recent Form 10-Q. While these forward-looking statements represent our views as of today, they shouldn't be relied upon in the future as representing our then-current views. We may update these statements in the future, but are not taking on an obligation to do so. Let me now turn the call over to Adeline to kick us off. Adeline?

Thanks, Gerald, and good afternoon, everyone. Thanks for joining us on the call today. It's a great time for Infinity, as we look to 2010. Today, we would like to share with you the basis for the tremendous energy and excitement we have at the Company, as we kick off the new year. First and foremost, we are thrilled to announce that our fourth internally discovered drug candidate has now started clinical trials. The addition of a fourth drug to our clinical portfolio exemplifies our commitment to innovation, and to our strategy of building a robust pipeline of drug products. 2010 is an important year for us, as we continue to build our pipeline, our team, and the Company.

Let me start with the pipeline. The hallmark of all of our clinical stage candidates is that they are each directed to a single pathway that plays an important role in multiple indications, such that they all have broad therapeutic potential. At the same time, our candidates are directed to a single target in the pathway, which enables us to identify the specific patient population, or even sub population, within each indication that are most likely to drive benefit. Armed with these scientific insights, we are matching our drugs to the patients who are most likely to benefit from them. In 2010, we're focusing our development efforts and investments on establishing the therapeutic window of our drug candidates, showing evidence of biologic activity in specific patient populations in both our Hedgehog and Hsp90 Chaperone Inhibitor program. As our pipeline and the number of directions in which we can take it grows, these data are critical to the ongoing and disciplined prioritization of our products and our investments, to maximize the quality of the drugs we bring to patients.

Let me now move to the team. As we all know, drug development is hard, and it requires that we do a number of things well. One of the most important is having the right team in place, one that has deep and evolving set of expertise as our pipeline matures. We have built that team, and will continue to add to it by bringing in select and important capabilities as our pipeline evolves. Even more importantly, a high performance team requires an environment that fosters true collaboration between people in the various disciplines. Infinity has a unique culture of citizen ownership, which we celebrated recently by recognizing two individuals with the annual Stephen H. Holtzman Citizen-Owner of the Year Award. These two and all of our citizen-owners inspire us by their leadership, and their stewardship of our culture.

Another critically important aspect of our team is the extension of our community through a broad and powerful network of medical, scientific and business collaborators. With four products in the clinic, and a growing number of current clinical trials, we are aggressively expanding our global network of hospitals and investigators to accelerate the development approval, and ultimately the use of our drugs by patients worldwide. Lastly, let me turn to building the Company and creating shareholder value. We firmly believe that the most important driver of shareholder value is creating drugs that make a meaningful difference in patient lives. Yet, we also know that good drugs alone are not enough. Translating good drugs to shareholder value also requires that we access non-dilutive sources of capital, and that we retain significant value in the commercialization of our drugs.

We have been very deliberate in achieving this with our business and financing strategies. Even with the growing investment in our clinical pipeline, we have capital into 2013, and have retained significant participation in the downstream commercial and financial value of all of our products. In addition, leveraging our current organizational and financial strength, we are aggressively evaluating opportunities to further build the pipeline through in-licensing our acquisition of additional clinical stage progress. In summary, 2010 is about results. We're well positioned to build on our robust pipeline, our amazing team, and our financial strength to demonstrate the impact that our products can have for patients, and thereby for shareholders. And with that, I turn it over to Julian to talk about our clinical pipeline in more detail. Julian?

Thanks, Adeline. I'm going to start today a little differently by focusing on our first program in pain. I'm delighted to announce that we've moved IPI-940 into the clinic. This milestone is a real testament to the breadth of our team blood discovery and development capability. IPI-940 is an inhibitor of fatty acid amide hydrolase or FAAH, for the potential treatment of neuropathic and inflammatory pain. The concept of this program is to augment the body's ability to manage its own pain. IPI-940 functions by inhibiting an enzyme, FAAH, that degrades our body's endogenous pain relief molecules [cannabinoid] which is produced at the site of injury. The benefit of a therapy with this profile is that it will likely avoid the general systemic side effects, which is drowsiness, often associated with pain treatment.

Our Phase I program for 940 includes both single and multiple ascending dose studies, which will be conducted in healthy adult volunteers. The objectives of these studies are to evaluate the safety, tolerability, as well as the PK-PD properties of IPI-940. And we'll update you further on the developments within the IPI-940 throughout the year. Turning now to our oncology portfolio, we'll start with the Hedgehog program, and our oral agent IPI-926. There are multiple ways in which the malignant activation of the Hedgehog pathway is implicated in cancer. Inhibiting the pathway represents a potential new way of attacking cancer, and it is believed to have utility in three important settings. First, we can inhibit the Hedgehog signaling to the tumor micro environment, thereby improving access to chemotherapy to the tumor, and increasing overall survival. Second, we can inhibit signaling to tumor progenitor cells, responsible for tumor regrowth, attacking minimal residual disease following treatment with chemotherapy, and increasing progression-free survival. And third, we can inhibit Hedgehog signaling to the tumor itself, inducing cell death, where there is a genetic mutation in the pathway.

We've now shown a breadth of preclinical data demonstrating the ability of IPI-926 to inhibit the Hedgehog pathway in all three of these settings. Because of our preclinical studies -- because our preclinical studies replicate current treatment paradigms, there are clear development paths for IPI-926, and a broad range of settings and in a variety of combinations. We look forward to launching Phase II development later this year. Moving briefly to our Hsp90 Chaperone Inhibitor program, we have focused development strategies for our IB agent, IPI-504 and for our oral agent IPI-493. This year, our objective with 504 is to establish the therapeutic window, and identify the patient populations or subpopulations that are most likely to respond. 504 is being evaluated in two Phase II studies in patients with advanced non-small-cell lung cancer, and in patients with HER2 positive breast cancer. Both of these studies provide paths forward for IPI-504, and we believe there are additional paths forward in several other tumors that are driven by oncoproteins reliant on Hsp90.

Our oral Hsp90 Chaperone inhibitor, IPI-493 is in a Phase I study in patients with advanced solid tumors to evaluate safety, and tolerability to determine optimum dosing schedule for Phase II study. This trial is moving along briskly, and we expect to initiate another Phase I study in patients with advanced hematologic malignancies in early 2010. We have a busy year ahead of us. Our key clinical objectives for the year include, reporting data from the Phase I studies, IPI-926, and start Phase II development. Reporting data from Phase II studies of IPI- 504 in breast and lung cancers, reporting preliminary data from the Phase I study of IPI-493 in solid tumors. And initiating second Phase I study in hematologic malignancies. And finally, completing a Phase I development of our FAAH inhibitor, IPI-940. With that, let me pass the call over to Gerald to wrap us up with our financial results. Gerald?

As you heard, we have a robust pipeline, and just as importantly we have the financial strength to invest in the development of our portfolio of our broadly applicable targeted therapies. I'll begin by reminding you that we started 2009 with approximately $157 million in cash and investments. We guided to a year-end balance between $127 million and $137 million. In 2009, our total revenue was $49.5 million, which was wholly related to our global alliance with Purdue and Mundipharma. Our R&D expense for the year was approximately $78 million, of which $46.5 million was reimbursed by Purdue and Mundipharma. As a result, we had a net loss of $32.5 million for the year. So where does this leave us today? We began 2010 with just over $130 million in cash and investments, and no debt, right in line with our 2009 guidance.

Through our strategic relationship with Purdue and Mundipharma, we have committed R&D funding of up to a $150 million through 2011, for all of our programs other than Hsp90. We also have access to a very attractive $50 million line of credit from Purdue, which we can use for any business purpose. All together, this provides us with access to $330 million to invest in our current and future pipeline, and provides us runway into 2013, absent any business development activities. And as a reminder, all of this is with the relatively low share base of approximately 26 million shares outstanding. So in addition to using our financial strength to invest in our internal pipeline, we continue to look for ways to leverage this unique position by evaluating strategic opportunities to enhance our pipeline. With that, let me turn the call back over to Anthony for Q&A.

Thank you.

(Operator Instructions).

Your first question is from Simos Simeonidis with Rodman & Renshaw.

Thank you for taking the question. My question is on 504. And the first one is, do you have a medical meaning in mind when you're going to be presenting the full ring data?

Simos, thanks for asking the question. We did present at ASCO GI, the PI, George Demetri actually presented the poster, and it's also up on our website. So the fundamentals of the ring trial have already been released. And I don't think there's another plan to, to talk about ring any further. Obviously, there will be a publication at some point in the future.

But the poster that we saw at GI is, you think is -- you're not going to have any updates after that? It's the full data?

It is pretty much the full data. There is -- it's, it's difficult to follow up once a trial is shut down, as abruptly as it was. But we've locked the database, and we've got all of the data in hand. And what remains, really is just to publish it in a peer review journal.

Okay, great.

I think the conclusion, Simos, that we've taken from that poster which you can see on our website, is the future of our Hsp90 program, it's really important that we're focused on the right patient populations with the right dosing schedule. And we learned from that trial that we didn't have. We were working with very, very sick patients. And we don't believe we had the right dosing schedule. What you see in our current plan for the Hsp90 program in our current breast trial and our lung trial, is we believe we are in more appropriate patient populations with more appropriate dosing schedule. And so we, look forward to the future of the program when the data from those trials.

On that note, on the lung trial that's ongoing, the monotherapy trial, do you have an idea on when you may be releasing results? And secondly, I know that Tom Lynch recently joined your board. Do you have any thoughts or ideas about what the next steps may be, patient population, combination?

Yes, so we do in fact, have some hints as to a subset of patients that did respond in the Phase II trial. And we are taking steps to further verify that, those findings. I think in terms of our next presentations, we could look to ACR. We've submitted our abstracts, again, pending their acceptance. But you could look towards the spring or early summer for further description of what we think we discovered in that trial.

And would it be fair to assume that based on what you've seen so far, you have an idea of the next step or patient population, what combination may be used, may be using?

Subject to confirmation, I think, because there were really small numbers of patients that did respond, subject to further confirmation that our molecular hypothesis is viable and correct, we will pursue this, this line of reasoning, exactly.

Thanks. And final question, do you have any idea on when you may be starting the liposarcoma trial?

We have not given any guidance when we will start this trial. We had said at the beginning of the year, that we would start it this year. It's, it's hard to say. We're still meeting with investigators, and we're still discussing internally when best to start that study.

I think what's safe to say, Simos, is that we have prioritized getting the breast and the lung trials up, and the sites enrolled. And so that, for several reasons, given the data that we have now in lung that we want to confirm, the compelling rationale for HER2 as a client of Hsp90, that we've decided those need to be out in front, and so that's, that's our current prioritization.

Okay. Thank you very much.

Thank you. Thank you and our next question will come from Ted Tenthoff with Piper Jaffray.

Great, thank you very much. Adeline, it's nice to hear your voice on the call, and Julian, you, too. Focused on the Hedgehog program, where should we expect to see things to exploration?

Well, Ted, it's a good question. Typically we don't preview studies until we've actually commenced the clinical trials and dosed the first patients. But suffice it to say that if you followed our preclinical data in pancreatic small-cell lung cancer, ovarian cancer, and some hema malignancies, amongst these opportunities, we are clearly talking with key opinion leaders, looking at various trial designs, and amongst these, from amongst this group of studies, I just described, there will be clear first, next step, and the question of what presents itself for, for best exploration.

Right.

And we will take our next question from Eun Yang with Jefferies.

Hi. Thanks for taking my question. This is just on the lung data. You guys listed in the key objectives to a report, on report data from the Phase II study. I was just wondering, what additional data we're going to see this year that's different from what we saw last year at ASCO.

So let me handle that. What we have done, and what we reported in past calls is that we've gone back to do an extensive molecular profiling of the entire patient population set, and particularly the responding patients, and are looking for other signals, other genetic factors that are contributing either to, lack of response or responsiveness to IPI-504 monotherapy. So that's what we're talking about and the earlier call alluded to the same thing. And we'll probably be reporting on that at ACR or ASCO this year.

Okay, and just, just another question for Adeline. Just on the licensing front, can you give us a, an idea of the types of deals you guys are going to potentially be looking at, or are we talking about $5 million to $10 million preclinical type deals? Or are you guys looking more late stage, Phase II, Phase III type compounds?

Yes, our sweet spot is later stage clinical programs where there is some Phase II data, ideally controlled Phase II data in oncology. But we also remain opportunitistic, and we looked at fields related to oncology, and we have also looked at some earlier stage things. But, but our sweet spot is Phase II, and beyond oncology.

All right, thank you.

We'll take our next question from Phil Nadeau with Cowen and Company .

Good evening. Thanks for taking my question. Julian, my question is for you, and it is on the ASCO GI poster. It seems like the most predictive factor to deafen the study was someone with a prior hepatic resection in the trial. I guess I can't think why IPI-504 would be particularly dangerous with people with hepatic resection. So do you have any theories behind that? And I assume future trials will exclude those patients. Is that accurate?

You're, you're correct on your last point. In fact, we are excluding patients with prior hepatic resections. I think the function -- it is clear to us, that the drug is metabolizing the liver, and it's clear through the liver. And so hepatic reserve is a very important part of a patient's performance status coming into getting treated with an Hsp90 inhibitor. So I think that's -- I think you've pretty much answered the question within your question. But certainly hepatic resections allow for a -- frankly lesser hepatic reserve, and that got some patients into trouble. Particularly at the dosing schedule, the agressive dosing schedule we were pursuing.

Have you seen LFT abnormalities in other disease states prior to Phase III or post Phase III?

We do. We see them in a much higher rate in the ring population, in the gist population. And that's primarily because they have large masses in their livers, and high disease burden in the abdomen and liver anatomically speaking. So I think these were, perhaps more sensitive patients, but we have seen this in other patients, perhaps not as severe and perhaps not as life threatening.

Okay. And then my second question is also on business development, and that's looking the other way. You now have a pretty full pipeline, obviously a good portion of it is, is in development with Purdue. But would you look to do any outlicensing this year, maybe some of the assets that aren't included in the Purdue collaboration?

Yes, absolutely, Phil. The one program that we have right now, that's not part of the Purdue relationship is our Hsp90 program. And what we have decided is, to generate the data to show the therapeutic window in our current trials, and refine our hypothesis in lung, and look to partner that in the second half of the year.

Okay, great. Thank you.

You bet.

And there are no further questions at this point. I would like to turn the call back over to Adeline Perkins.

Thank you, operator. In closing, Infinity's perfectly positioned to build on our strong foundation with our integrated team, our financial strength, and our diverse pipeline, in order to ensure that this year, we demonstrate the impact our products can have in patients' lives. It's a really exciting and really important year for us and we look forward to speaking with you about our continued progress throughout the year. So thanks again for participating this afternoon.

Thank you. This does conclude today's conference call. We thank you for your participation.