Infinity Pharmaceuticals Inc (INFI) 2010 Q2 法說會逐字稿

Good day ladies and gentlemen and welcome to the Infinity Pharmaceutical second quarter 2010 results conference call. At this time all participants are in listen-only mode. Later will we conduct a question and answer session and instructions will follow at that time. (OPERATOR INSTRUCTIONS) As a reminder, today's conference call is being recorded.

I'd now like to turn the conference over to your host, Mr. Gerald Quirk, Vice President of Corporate Affairs. Please go ahead, sir.

Thanks Allie and good morning, everyone. This is Gerald Quirk, Vice President of Corporate Affairs at Infinity. With me here today are Adeline Perkins, our President and Chief Executive Officer and Julian Adams, our President of R&D.

During today's call, we'll be discussing our recent R&D and business highlights and reviewing our second quarter 2010 financial results.

The press release detailing our results was issued earlier today and is available on our website at infi.com. Please note that during this call we may make forward-looking statements about our future expectations and plans, including clinical development milestones and financial projections. It is possible that our actual results may differ materially from what we project today, due to the factors described in the Risk Factors section of our most recent Form 10-Q we filed earlier this afternoon.

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 are not taking on an obligation to do so.

I'll now turn the call over to Adeline for opening comments. Adeline?

Thanks Gerald and good morning everyone. We appreciate your joining us today. This is an exciting and important time for Infinity. We are very well capitalized and have a robust set of product opportunities stemming from our commitment to build a diverse portfolio of innovative drug candidates with multiple development paths and broad commercial potential.

I'd like to start by sharing this construct for the way I think about Infinity and our portfolio, which I will then use to structure my comments this morning. Infinity today has two distinct portfolios, each of which could form the basis for a standalone company. The first portfolio is partnered with and fully funded by Mundy Pharma and Purdue. This portfolio includes our hedgehog and FAAH inhibitor program, our entire discovery pipeline and our newest program, the PI3 kinase program we licensed from Intellikine last month.

Our second portfolio is fully funded and owned by Infinity. The assets from this portfolio include our Hsp90 chaperone inhibitor program, our $120 million in cash and investments and a $15 million line of credit available to us.

Our objective for each of these portfolios is different so let me take you through what we hope to accomplish with each, starting with what I will call the Infinity funded portfolio.

In our Infinity funded portfolio we will use the $170 million of available capital to generate and seize the best opportunities to create value. We will direct our investments to opportunities that can reach clear value inflection points and by that I mean compelling human proof of concept data prior to needing to raise additional capital for that portfolio. The $170 million in this portfolio is currently used to fund our Hsp90 program and the acquisition of additional product opportunities.

To maximize the value of this portfolio disciplined, data driven investment decisions are required to produce drugs that make a real difference for patients and to create real value for shareholders. Consequently, we've made an important decision with respect to our IPI-504 development program. As we've been emphasizing all year, our development plans for both of our Hsp90 chaperone inhibitors, IPI-504 and IPI-493 have included rigorous development stage gates.

From 504, these included establishing the safety of the drug in our phase II Herceptin combination study in breast cancer patients as well as demonstrating substantial and durable clinical activity. Julian will provide more details but while we satisfied the safety stage gate in the first cohort of patients in the breast cancer study, we did not satisfy our very high bar for clinical activity.

While we believe this is a result of the dose and schedule at which we kept 504 in combination with Herceptin, we have decided not to dose escalate in this study. We do not plan to continue developing 504 in this indication given the changing standards of care in the treatment of breast cancer and our other portfolio opportunities.

Beyond the two clinical studies of IPI-504 that are currently ongoing, no new clinical trials of IPI-504 are planned at this time. Decisions regarding future clinical trials, if any, will be based on data from the two ongoing studies, relevant preclinical data and the other portfolio choices available to us. While we continue to believe in Hsp90 chaperone inhibition and in IPI-504, this is the right decision at this time.

The financial strength of the Infinity funded portfolio is a differentiating asset. We are and need to remain disciplined in making investment decisions to be best positioned to act upon new business opportunities to augment the Infinity funded portfolio and will continue to evaluate these opportunities aggressively.

With respect to the products in the Purdue funded portfolio, Julian will update you on our progress with IPI-926, IPI-940 and IPI-145 later in this call. For each of these programs our goal is to demonstrate the impact that our drugs can have for patients as quickly and effectively as possible.

We're also pleased to have made a very important addition to this portfolio. We've explored new therapeutic areas in which we could leverage our small molecule drug discovery expertise for some time. We're delighted to have added to our Purdue funded portfolio the global development and commercialization rights to Intellikine's proprietary inhibitors of the delta and/or gamma isoforms of PI3 Kinase. These compounds have broad potential applicability in autoimmune inflammatory diseases as well as oncology. Moving into autoimmune inflammatory disease is a natural evolution of Infinity's product portfolio given the number of targets and pathways like PI3 Kinase that have broad applicability across both autoimmune inflammatory disease and oncology.

In addition, their synergy with our FAAH inhibitor program, which has potential applicability in inflammatory pain, consequently we believe we're well positioned to reveal and then realize the potential of this program.

Our early interactions with the Intellikine team have been great, highly productive and we're excited to move IPI-145 into the clinic next year in autoimmune inflammatory disease and to identify additional compounds under the collaboration for development in cancer.

In summary, we feel great about the strength and breadth of our two portfolios together. This wouldn't have been possible without the extraordinary efforts of our community of citizen owners who created this pipeline and in whom we have the utmost confidence to generate the data necessary to show in a meaningful time frame the impact that our products may have for patients and thereby to create shareholder value.

And with that, let me turn the call over to Julian for an R&D update. Julian?

Thanks Adeline. Given our news today, let me begin with a review of developments of IPI-504, our IV administered Hsp90 chaperone inhibitor drug candidate, to provide more detail around our decision to stop development of this drug in breast cancer.

We recently completed an interim review of data from the first cohort of patients enrolled in a phase II clinical trial evaluating IPI-504 in combination with Herceptin in patients with HER2 positive metastatic breast cancer. In this cohort, 26 patients received 504 once weekly at a dose of 300 mg/m2 and Herceptin every third week at its regular dose.

We were pleased to see that at this dosing schedule there were no dose limiting toxicities and that 504 was well tolerated in this heavily pretreated population. And while we saw biological activity in the trial at this dosing schedule, this activity did not meet the rigorous criteria we established to warrant expansion of this study.

Based on these data we do not believe that 504 in combination with Herceptin alone in a Herceptin refractory population is likely to demonstrate enough efficacy to support a commercially viable registration path. We believe that to translate the biological activity observed in this trial into clear patient benefit, IPI-504 would need to be combined with the next-generation anti-HER2 therapies to optimize the opportunity for synergy, or 504 would need to be administered at an increased dose and a more intense schedule.

Given our other portfolio priorities and the rapidly changing therapeutic landscape in HER2 positive disease, we have decided not to follow up with additional trials in this indication at this time. More details regarding this study will be presented formally at a medical meeting next year.

Also during the last quarter we reported at ASCO final data from the phase II clinical trial of IPI-504 as a single agent in patients with advanced non-small cell lung cancer. In this study 504 was generally well tolerated. We saw an objective response rare of 7% in the overall study, population of 78 patients. With 10% in patients who are EGFR wild type, 4% with EGFR mutations and 12% among KRAS wild type patients.

Among these patients, anaplastic lymphoma kinase or ALK gene rearrangements, there was a 67% response rate with two of three patients experiencing partial responses and a third patient experiencing a 24% reduction in their target lesions. All three of these patients received 504 for at least six months.

While this study has been concluded, the validation of these findings is ongoing in an investigator sponsored trial at the Massachusetts General Hospital by Dr. Lecia Sequist, the principle investigator of the phase II study. We look forward to reviewing Dr. Sequist's data as they are generated.

Also in non-small cell lung cancer we continue to evaluate patients in our ongoing phase IIb study of IPI-504 in combination with Taxotere.

With respect to our oral Hsp90 chaperone inhibitor, IPI-493, we are actively enrolling patients in two phase I dose escalation studies to determine the optimal dose and schedule for future development. One of these studies is being conducted in patients with advance hematologic malignancies. It's designed to assess safety and tolerability of 493 in this patient population. Pharmacokinetic parameters and effects of 493 on pharmacodynamic markers of biological activity are also being studied.

The other study is being conducted in patients with advanced solid tumors. Our 493 program is also rigorously stage gated. Not only do we need to see that the drug is well tolerated at what we think is a therapeutic relevant dose, we need to see intratumoral client protein degradation in the [HUE] study as a marker of biological activity. We look forward to reporting data from our phase I program and articulated future development plans for IPI-493 in 2011.

Let me turn to our hedgehog program in IPI-926. By way of review, the limited activation of the hedgehog pathway is responsible for a broad range of cancers through three distinct mechanisms - signaling to the tumor micro environment, signaling to tumor progenitor cells and genetic activation of the pathway in tumor cells. IPI-926 is a small molecule inhibitor (inaudible) and represented a significant opportunity for addressing a number of difficult to treat cancers by disrupting each of these three modes of malignant activation of the pathway.

In April 2010 we initiated a randomized phase Ib/II clinical trial evaluating 926 in combination with gemcitabine in patients with previously untreated metastatic pancreatic cancer. This study builds upon a growing body of preclinical data demonstrating that 926 increases the vascular density of pancreatic tumors rendering them more accessible to chemotherapy. The first portion of this study has a run-in dose escalation of 926 in combination with full dose gemcitabine to establish safety.

After we establish the appropriate dose of 926, we'll move directly into the phase II portion of the trial, which is an international multicenter, randomized, double-blind trial evaluating approximately 120 patients. The primary endpoint is overall survival and secondary endpoints include progression-free survival, time to progression and overall response rate.

Meanwhile we are continuing with the expansion cohorts of our phase I trial of 926 as a single agent and intend to report data from this study later this year.

Next, let me touch on our fourth clinical candidate, IPI-940, which is a novel oral agent for the potential treatment of the neuropathic and inflammatory pain. 940 is designed to potentiate the endogenous pain relief molecule anandamide by inhibiting fatty acid amide hydrolase. Our phase I program for 940, which includes single ascending and multiple ascending doses -- dose studies in healthy adult volunteers is evaluating safety and tolerability as well as PK and PD properties.

This program continues to progress in accordance with plan and we are on track to complete the phase I program by year end.

Now let me conclude with a discussion of our newest program, which we recently licensed from Intellikine. We are extremely excited about this program which relates to inhibitors of the delta and gamma isoforms of Phosphoinositide 3 kinase or PI3 kinase. The PI3 kinases are a family of enzymes involved in cellular functions including cell proliferation, survival, differentiation, trafficking and immunity. Because the delta and gamma isoforms of PI3 kinase are restricted to primary cells of the immune systems, they're also strongly implicated in immune mediated and inflammatory and allergic disorders as well as hematologic malignancies.

The lead compound in this program, IPI-145, formerly known as INK-1197, is an orally available small molecule, dual selective inhibitor of the PI3 K delta and gamma isoforms. IPI-145 has demonstrated activity in preclinical models of rheumatoid arthritis, allergy and inflammation. We are poised to commence clinical trial -- clinical development of IPI-145 in inflammatory diseases in 2011.

In addition, we will work closely with our colleagues at Intellikine over the next two years in a research collaboration to identify and advance additional PI3 K delta selective, gamma selective as well as dual selective compounds from Intellikine's portfolio of proprietary chemistries against these targets. And we plan to move these molecules forward in hematologic malignancies.

The first half of 2010 has been really quite busy for Infinity. While we would rather have seen more activity in our breast cancer study, 504, we still remain bullish on our portfolio and are similarly focused on generating the additional data needed to continue moving each of our projects ahead.

And now let me hand the call over to Gerald to wrap up with our financial results. Gerald?

Thanks Julian. As you've all just heard, we've continued to adhere to our strategy of focusing on those opportunities that we believe have the greatest opportunity to yield meaningful data in a relevant time frame. We're excited about our path forward and pleased that we have the financial resources to support our development strategies. Let me review our financial results and break down our financial position in more detail.

We ended the quarter with $120 million in cash and investments and no debt. Our total revenue for the quarter was $18.4 million, all of which relates to our global alliance with Purdue and Mundipharma on the development of our hedgehog pathway and FAAH inhibitor programs as well as our discovery pipeline. Our PI3 kinase program is also covered by the alliance and we expect to report a $13.5 million license fee to acquire the program as R&D expense in the third quarter.

Our R&D expense for the second quarter was $19 million reflecting reimbursed amounts by Purdue and Mundipharma as well as our investment in our Hsp90 program. Our net loss for the quarter was $6.2 million.

Our financial strength remains a solid pillar that can support future growth. We intend to invest prudently in the products in our Infinity funded portfolio and to evaluate new opportunities to augment that portfolio. Our partnership with Purdue and Mundipharma remain solid and it provides us with a committed R&D funding of up to $65 million in 2010 and $85 million in calendar 2011 for all but our Hsp90 program.

In addition we have access to a $50 million line of credit from Purdue which we can use for any business purpose.

By virtue of the expansion of Infinity's portfolio to include the PI3 kinase program, we expect to exceed the $65 million funding cap for 2010 under the Mundipharma agreement and to fund those excess costs ourselves. As a result, we now anticipate a cash burn of between $35 million and $45 million during 2010 and estimate a year-end cash investment balance of between $85 million and $95 million.

This guidance does not include any amounts that we may draw under the line of credit. In the absence of additional funding or business development activities and based on our current operating plans, we expect that our current cash and investments together with R&D funding from Purdue and Mundipharma and proceeds from the line of credit remain sufficient to fund our operations into 2013.

We believe that these resources will enable us to reach key development milestones and evaluate additional external opportunities to strategically enhance our pipeline.

And with that, let me turn the call over to Allie to open up the line for Q&A.

(OPERATOR INSTRUCTIONS) Our first question comes from Simos Simeonidis of Rodman & Renshaw. Please go ahead.

Good morning. Thanks for taking the questions. Quick question on the lung cancer [ISP], so you mentioned you're not going to do any new trials in 504 other than the ones that are ongoing. So what you've seen so far, the (inaudible) mutations, I know it's only three patients, but given the significant or the large response, you're not planning on further pursuing 504 in this subset of patients?

So Simos, thanks for your question. It's a good question. We elected to do -- to not investigate this formally as a company, but we received a request from Dr. Lecia Sequist to pursue this as an investigator sponsored study. She also is one of the PIs on the Pfizer ALK inhibitor, PS-1066, and she has many patients on trial from that study and eventually of course all the patients on that study will progress. And she was very interested to know whether the Pfizer experienced patients will not respond to IPI-504, so we were [just reporting] that investigation.

And that trial has two arms. One is for the Pfizer experienced and one arm is for the Pfizer naïve and we will wait until we see data from that and the other ongoing trial to make decisions on future development of 504 on that and any preclinical data we generate.

Okay, and just to be clear, the statements about holding off on further investment into 504 does not translate into 493. 493 you continue through the phase I and decide upon the data, correct?

That's exactly correct.

Okay. The last question is in terms of your -- I like how you separated the Company into portfolios but if you take the scenario where Hsp90, the 504 arm is -- part is stopped and you're only investing in 493, which is not -- it's still in the early stage where you don't have to spend a significant amount of capital, the acquisitions that you -- or the licensing or whatever -- the developments -- sorry --activities that you might do, should we expect to be more similar to what we saw with the earlier stage Intellikine type of transaction or could we also see later stage deals, more transformational in a way in that they would bring a phase II or phase III asset.

Yes, we're looking, Simos, at everything from compounds that are at the same stages as with the Intellikine relationship, which is about to go on (inaudible) compounds for which there already is human [POC] and so we're actively evaluating those and you'll know as soon as we move forward with one of them.

All right, great. Thank you for taking the questions.

Our next question comes from Andrew Vaino of Roth Capital. Please go ahead.

Hello. Thank you for taking the question. I was just wondering if you could tell me how many patients were analyzed in the 504 study with Herceptin before you decided to discontinue.

46 patients in the study.

Okay, thank you.

I'm showing no further questions at this time and would like to turn the call back over to Adeline Perkins.

Thank you, operator. We remain committed to our strategy of developing a portfolio of innovative drug candidates and we're well positioned to deliver on the promise of our pipeline. We have a stellar team, highly productive partnerships with Purdue, Mundipharma and Intellikine, a strong balance sheet and the determination to show the impacts that our products can have for patients and to create shareholder value.

We look forward to reporting our continued progress throughout the second half of the year. Thanks again and enjoy the rest of your summers.

Ladies and gentlemen, that does conclude today's conference. You may all disconnect and have a wonderful day.