Infinity Pharmaceuticals Inc (INFI) 2010 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals conference call to discuss the Company's third quarter 2010 financial results. My name is Karen and I will be your operator for today's call. (Operator Instructions). At this time I would like to introduce your host for today's call, Mr. Gerald Quirk, Vice President of Corporate Affairs out of Infinity. Please go ahead.

Thanks, Karen and good afternoon, everyone. Welcome to today's call. This is Gerald Quirk, Vice President of Corporate Affairs at Infinity. With me here today is Adelene Perkins, our President and Chief Executive Officer, and joining us on the call today from London is Julian Adams, our President of R&D.

The press release issued early today details our results 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 the form 10 Q we filed 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.

During today's call Adelene will discuss our business achievements, and Julian will provide an update on our pipeline. After our remarks we will open up the call for Q&A.

Now, I would like to turn the call over to Adelene.

Thanks, Gerald and good afternoon, everyone. We appreciate you joining us today. Throughout the year, we have focused on advancing a diverse portfolio of innovative products, building an exceptional team and maintaining a very strong financial position. We are tracking well against all three of these goals which are absolutely essential to building a company capable of sustainably discovering, developing, and delivering important new medicines to patients.

With respect to our pipeline we have intentionally pursued targets with applicability across multiple therapeutic area and indications. This approach gives us several product opportunities in areas with broad commercial potential. This strategy also ensures that our success is not dependent on any single product or indication allowing us to optimize our portfolio on several dimensions in response to new data. We have made important progress with our portfolio over the last few months.

In our Hedgehog program we recently reported encouraging data from our Smoothened antagonist IPI-926 which Julian will describe in more detail. We are also nearing completion of studies with our Hsp90 chaperone inhibitors, IPI-504 and IPI-493, that will inform our future development plans. And we are continuing IND enabling activities for our PI kinase inhibitor, IPI-145, which has a strong biologic rationale supporting development in both oncology and inflammatory indications.

While Infinity's initial therapeutic focus was oncology we have not confined our research to a single therapeutic area. Instead we have relied on the scientific insights from our world class research teams to help drive the direction of our business. Our FAAH program is a perfect example of this. FAAH is an exciting target that offers a completely new approach to pain management, for which we have achieved expected pharmacological responses at well-tolerated doses in our Phase I study. As many of you know, Purdue and Mundipharma recently exercised rights to develop and commercialize products within our FAAH program worldwide. This was based on preclinical and clinical data generated to date.

From a financial perspective this achievement provides an important downstream source of value as we will receive royalties of up to 20% on any future product sales. Given Purdue's expertise in developing and commercializing pain therapeutics this is a wonderful testament to the quality of the work performed at Infinity to generate a novel compound against this exciting new target. Purdue's decision also validates our ability to develop -- apply our high science, data driven approach outside of oncology and to translate our discovery insights into the development of Phase II ready candidates. This success reinforces our confidence in building a portfolio of novel products across several disease areas.

The strength of our science and our pipeline is enabled by our exceptional citizen owners in Infinity. The caliber of our science continues to attract top flight talent. One of our focuses during 2010 was to bring additional depth and experience to our executive leadership team. Earlier this year Winselow Tucker joined Infinity as V.P. of Marketing from Novartis, where he was most recently the global brand leader for Gleevec and Tasigna. Over the past few months, Winselow has already played an instrumental role in helping to define how we best differentiate our products.

Our recent appointments of Pedro Santabarbara as Chief Medical Officer and Beth Trehu as Vice President of Product Development and Medical Affairs provides additional expertise in oncology and hematology and further strengthen our clinical development capabilities. Pedro and Beth have distinguished track records of success. During his career, Pedro played a leadership role in developing and executing clinical trial strategies that led to the approval of five new oncology drugs including Yondelis, Tarceva, Campath, Taxotere and Taxol. Beth's accomplishments include leading Genzyme's hematology franchise including Campath, Clolar, and Fludara, and overseeing global medical affairs activities at Millennium. Her experience leading medical affairs and providing strategic support for product and portfolio decisions will be invaluable as we continue to advance and prioritize our pipeline. Pedro and Beth join the team of talented citizen owners highly committed to our commission and we are thrilled to have them here.

In addition to our strong management team we have the financial strength to aggressively prosecute our entire pipeline. As I stated earlier, Purdue is now fully responsible for advancing the FAAH program and will fund all future development and commercialization. In addition, Purdue and Mundipharma have committed to $85 million in 2011 funding for the remainder of the programs in our partnership. This includes Infinity's entire pipeline with the exception of our Hsp90 chaperone inhibitor program. We ended the quarter with approximately $110 million in cash and investments and have a $50 million line of credit from Purdue that can be used for any purpose.

Our capital is a tremendous asset and we are very disciplined in making investment decisions directed to future development of our Hsp90 program and potential product acquisitions to complement our current portfolio.

Before turning the call over to Julian, I would like to close by acknowledging and celebrating Infinity's founder and current Executive Chairman of the Board, Steve Holtzman. As of December 31, Steve will transition from the role of Executive Chair to Non Executive Chair of the Board. As Chair, Steve will continue to be an invaluable source of inspiration to me and to the Company. As founding CEO, Steve led the creation of a unique community and a strong Company built on science, innovation, a commitment to excellence and a passion for discovering and developing meaningful new drugs for patients. It's very rewarding to see the Company progressing as we had originally hoped and anticipated.

We remain committed to our vision of becoming a fully integrated biotechnology company and I'm confident that we have all the elements in place to achieve this vision. We have a robust set of product opportunities, the expertise to advance our pipeline through development and to patients, strategic partnerships which provide access to both new product candidates and ex-US markets or markets best served by a GP sales force and the financial resources today to fund our business into 2013. We exit 2010 with a great deal of momentum that will carry us into next year and I look forward to keeping you updated on our progress. With that, let me turn the call over to Julian in London for an R&D update. Julian?

Thanks, Adelene. I would also like to give a warm shoutout to Steve, especially if you are listening on the call and also I would like to warmly welcome Winselow, Pedro, and Beth, who are great additions to our team.

Turning to our pipeline, let me begin with our Hedgehog program. We are continuing to make strong progress with IPI-926, a potent oral molecule that targets the Hedgehog pathway by inhibiting Smoothened. In October, results from the Phase I study of IPI-926 in patients with local and advanced metastatic tumors was presented in at the ESMO Congress in Milan.

This open label dose escalation trial was designed to determine safety, pharmacokinetics, and clinical activity of IPI-926. The presentation at ESMO was based on data from 60 patients including a cohort of patients with basal cell carcinoma.

At the time of the presentation, four clinical partial responses had been observed in a group of patients with basal cell carcinoma, who were naive to treatment with a Hedgehog inhibitor. We also reported that 14 of 17 basal cell carcinoma patients who had not been previously treated with a Hedgehog inhibitor were still on study. Only one patient came off study for disease progression, and then after 80 weeks of treatment.

We are very encouraged by the durability of IPI-926 and are pleased with the emerging pharmacokinetic profile which confirmed the potential for once daily dosing. In addition, IPI-926 has been well tolerated to date. The most common adverse events observed were grade one and grade two fatigue and nausea. Based on the tolerability data observed in the first expansion cohort at 130 milligrams daily we are continuing dose escalation to determine the maximum tolerated dose. This dose escalation is still ongoing.

Validating on target activity for IPI-926 in basal cell carcinoma was an important milestone and has emboldened us to invest in areas beyond those where the pathway is genetically activated. We are pursuing registration strategies in cancers where the preclinical science a strong and the unmet need is great. The first indication is pancreatic cancer. In mouse models, the Hedgehog pathway has been shown to play a role in pancreatic cancer by signaling to stromal cells from the microenvironment, providing support for tumor growth and survival. Inhibiting the pathway depletes the stroma, increases the vascularity of the tumor and makes the tumor more accessible to chemotherapy.

We are continuing to make progress with our clinical study in pancreatic cancer. Patient accrual is ongoing in the Phase IB portion of the study, which is designed to evaluate escalating doses of IPI-926, administered once daily, combined with weekly IV administration of Gemcitabine for three out of four weeks. After we establish the appropriate dose pair for 926 and Gemcitabine we will move direction into the Phase II portion of this trial. We have designed a robust Phase II trial intended to establish proof of concept. This Phase II study is an international multicentered randomized double blind placebo controlled trial evaluating approximately 120 patients. The primary endpoint is overall survival. Secondary endpoints include progression free survival, time to progression, and the overall response rate.

Beyond pancreatic cancer we are studying preclinical models in which the Hedgehog pathway signals directly to progenitor tumor cells. There is a strong scientific rationale that suggests that inhibiting the Hedgehog pathway may prevent or delay tumor regrowth following tumor debulking with chemotherapy or targeted agents. We plan to select an indication in the minimal residual disease setting and begin Phase II development in 2011.

Let me now provide a brief update on our Hsp90 chaperone inhibitor program. Earlier this year we reported that IPI-504 was well tolerated and showed evidence of biological activity in the Phase II breast cancer study,and in the Phase II trial in non small cell lung cancer. The results of the non-small cell lung cancer study were recently published in the Journal of Clinical Oncology. These results were particularly intriguing.

While there was an overall objective response rate of 7% in the overall study population, there was a 67% response rate with two of the three patients experiencing partial responses and the third patient experiencing a 24% disease reduction among patients with anaplastic lymphoma kinase, or ALK, gene rearrangements. These findings suggest that certain molecular characteristics of patients lead to a preferential response to Hsp90 chaperone inhibition. Validation of these findings is ongoing in an investigator-sponsored trial at the Massachusetts General Hospital led by Dr. Lecia Sequist.

In addition, we have fully enrolled our Phase IB study of IPI-504 in combination with Taxotere and we expanded this study to also include nonsmall cell lung cancer patients. With respect to our oral Hsp90 chaperone inhibitor, IPI-493, we are continuing to enroll patients in two Phase I dose escalation studies. One study is being conducted in patients with advanced hematologic malignancies. This study is designed to assess safety, tolerability, schedule and pharmacokinetics of IPI-493 in this population. This study also includes an evaluation of pharmacodynamic markers of biological activity.

The second study underway is in patients with advanced solid tumors. Both these studies are designed to determine the optimal dose and schedule for IPI-493. Additionally, a key factor for continued development of IPI-493 will be evidence of intratumoral client protein degradation in the heme study as a marker for biological activity. We look forward to reporting date from our Hsp90 programs and articulating future development plans in 2011.

Turning now to our FAAH program. We recently reported results from our Phase I single dose study of our oral FAAH inhibitor, IPI-940. The enzyme FAH degrades anandamide, an endogenous cannabinoid that mediates the body's own powerful analgesic and anti-inflammatory responses. 940 blocks the action of FAAH by increasing anandamide levels. As an FAAH inhibitor, IPI-940 has the potential application for the treatment of a broad range of painful conditions and inflammatory diseases.

In our single dose study in 48 normal healthy subjects, IPI-940 demonstrated FAAH inhibition and concomitant increase of anandamide levels. In addition, 940 was well tolerated with no observed dose limiting toxicities. The Phase I program is ongoing and our partner Purdue is planning to begin Phase II studies in pain during 2011.

Finally, let me briefly touch on IPI-145, our dual selective inhibitorof the delta and gamma isoforms of PI 3 kinase. PI3 kinase is well established as a central signaling pathway in cancer as well as immune mediated inflammatory and allergic disorders. IND enabling activities for IPI-145 are underway and we are excited to take this program into the clinic in 2011.

In closing, 2010 has been a busy year for Infinity. Each of our product candidates represents fundamentally a new therapeutic approach and applicability in multiple indications. We are excited about the opportunities ahead and will continue to push hard to keep our projects moving forward. With that, I will turn the call back over to Gerald to wrap up with the review of our financial results. Gerald?

Thanks, Julian. As Adelene and Julian just described we have had a busy quarter and are excited about the opportunities we have created. We are pleased to have the financial resources in place to support our development strategies and we will continue to operate with fiscal discipline.

Also, last week we announced that we have been awarded approximately $750,000 under the US government's qualifying therapeutic discovery project program. As these awards were partly based on the potential to result in meaningful new therapies for patients, we are pleased to have our innovative programs recognized in this way.

Let me now briefly review our financial results which were in line with our expectations. We ended the quarter with $110.2 million in cash and investments and no debt. Our total revenue for the quarter was $22.2 million, all of which relates to our alliance with Purdue and Mundipharma on the development of our Hedgehog pathway, FAAH inhibitor and PI3 kinase programs, as well as our discovery pipeline.

Our R&D expense for the quarter was $38.7 million, including amounts reimbursed by Purdue and Mundipharma and R&D associated with our Hsp90 program. Also included in our third quarter R&D expense is the $13.5 million license fee to acquire the PI3 kinase program.

G&A expense for the third quarter of 2010 was $5 million and our net loss for the third quarter of 2010 was $21.3 million. As a reminder, last month we adjusted our expectations as to our year end cash and investments balance as a result of reimbursement for activities associated with the transition of the FAAH program to Purdue and Mundipharma beyond the $65 million contained in the original budget. We expect to end 2010 with total cash and investments of between $90 million and $100 million, increased from an earlier expectation of between $85 million and $95 million. And with that adjustment we now anticipate a cash burn of between $30 million and $40 million during 2010, revised from an earlier expectation of $35 million to $45 million. Importantly, all of this excludes the $50 million line of credit.

In the absence of additional funding or business development activities, and based on 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, a time by which we would expect to have generated meaningful data from each of our current development programs.

With that, let me turn the call over to Karen to open up the line for Q&A.

Ladies and (Operator Instructions). Our first question from the line of Simos Simeonidis of Rodman & Renshaw.

Hi guys, thanks for taking the questions. I was wondering if I could touch upon the 504 in lung. Is it possible to get an update on how enrollment is going in both studies? And when do you think you -- we might see data from either one of them?

Yes, Simos. We have completed enrollment of our trial of 504 in combination with Taxotere that we expanded in nonsmall cell lung so that enrollment is completed and we are currently enrolling in the IST with Lecia Sequist at Mass General and our expectation is that we will present data from those trials in 2011.

And in terms of number of patients in the completed trial -- in the enrolled trial and then in the Mass General study?

We had --

the trial is based on enrolling as many patients that are ALK inhibitor naive as well as an equal number of patients that are ALK inhibitor experienced. And that should be approximately 20 patients.

Quick question on the Purdue Mundipharma partnership. You have said that in addition to the $150 million in guaranteed R&D reimbursement that you have in 2010 and 2011, actually I was going to ask what happens in 2012. Is there an option for them to continue to support your research?

Yes, there is. So, to remind you, and you had correctly summarized, Simos, for 2009 and 2010 we have already received $115 million of research funding and there is a commitment of $85 million for 2011. At the end of November of each year, Purdue makes the decision to stay in each of the oncology programs which have been treated separately from the FAAH. So at the end of November this year, we will be hearing from Purdue if they are remaining in those programs and that will come with commensurate funding for 2012. The pain program was structured differently when we established our relationship which really reflects the tremendous expertise that Purdue has in the development and commercialization of pain drugs and that was a one-time decision that when we completed our first Phase I trial they had the right to opt-in which we are thrilled that they have chose to do so we are now passing the baton to them to take forward our IPI-940 into Phase II clinical development and ultimately to commercialize.

That's helpful. Okay. Thank you very much. I'll jump back in the queue.

Thank you, sir. Our next question comes from the line of Ted Tenthoff of Piper Jaffray.

Great. Thank you very much for taking the question. Maybe following up a little bit with pipeline prioritization here. I know with the Hedgehog protein 504 the IV program, we are kind of waiting to see what data we get, I guess, from the nonsmall cell enrollment and nonsmall cell lung cancer trials before really deciding how the whole Hedgehog program advances. Is that an accurate assessment? And can you give us a better understanding of how you weigh that 504 data versus what you might see with the oral program?

I think you are referring to the Hsp90.

Sorry. Hsp90. Yes, yes.

Let me give the -- complicated question. Obviously we are a very data driven company. And we are looking for robust signals and a clear portfolio choice to make further investments in any of our programs. So, I think that's a thesis that we are holding true to across the board. And you are quite right, we have to fully analyze the data and look at our signals very carefully and then we will be making those decisions in due course. As well as reporting the data and it will become clear what our future plans, if any, with 504 or any of our programs going forward.

And Ted, I wasn't sure, I thought I heard you asking about both IPI-926 and our Hedgehog program and what -- we are on a path with our Hedgehog program right now to move forward with our current trial in pancreatic cancer and additional Phase II trials in 2011 and those paths will be independent of the decisions that right now we make on the Hsp90 program.

Yeah, sorry for the confusion on my question. I was really trying to ascertain how to prioritize within Hsp90 so I'm sorry I wasn't more clear. But your extra color is very helpful Adelene and Julian, I appreciate the answer. Will we have more Phase I data on the oral Hsp90 inhibitor at the same time this lung cancer data is coming out that might be -- might help inform that decision?

I think that -- without predicting sort of when data come out ,because you have to appreciate we fully enrolled our Phase IB program in combination with Taxotere in nonsmall cell lung cancer. We are still enrolling and escalating the dose for 493. So the timing of that is really they are independent events. From a portfolio position obviously the closer we have the data at the same time the better we can make informed decisions going forward, but they are really separate events.

Great. Helpful, thank you.

Thank you, sir. Our next question comes from the line of Eun Yang of Jefferies.

Thank you. I have questions on the heat shock protein 90 inhibitors as well. IPI-504 did not show sufficient efficacy in the multiple myeloma as a single agent so I'm just wondering is there any reason for you to actually be doing a dose escalation study with the 493 in hematological cancers?

That is an excellent question, Eun. The key here in the hemologic cancers is to look at tumors that have specific client proteins that have already been shown to be excellent clients of Hsp90. So I'm speaking about clients like BCR-ABL or JAK2 mutations, things along those lines. So multiple myeloma does not have a signature client protein and it was one of our first investigations with 504. And I would not interpret the lack of activity in myeloma and translate it to any other hemo malignancy.

Thanks. So you actually (inaudible) my next question. There was just some scientific data that came out saying that heat shock protein 90 inhibitor may provide a better blockade of the JAK2 than selective JAK2 inhibitors in myelofibrosis. Is that the kind of direction that you are looking into, in terms of future collaborative activity?

That is a perfect example where JAK2 is shown to be a very sensitive client protein. Of course, we need to prove that clinically in patients. Obviously it has been shown in the laboratory but we need to see it in patients.

So that --

Associated with efficacy, of course.

Okay, so that data we may be able to see from this dose escalation study?

That is our hope -- that was the driving force behind doing the heme trial because we can serially sample patient blood and look at the effects and the kinetics of the degradation of the client proteins and help establish the dose and schedule.

Okay. Thank you very much.

Thank you. I show no further questions in the queue at this time.

Thank you, Karen. In closing, we are pleased with our strong performance this quarter. Looking back 2010 has been a very important year for Infinity and it exemplifies what makes us unique. We have a strong portfolio of innovative drug candidates, a stellar team, highly productive partnerships and a strong financial foundation that positions us very well for long-term growth. We are committed to achieving our business objectives and look forward to updating you on our progress in the coming months. Thank you again.

Ladies and gentlemen, that does conclude today's call. You may now disconnect.