Infinity Pharmaceuticals Inc (INFI) 2011 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Infinity Pharmaceuticals' conference call to discuss the Company's second quarter 2011 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, Ms. Jaren Madden, Director of Investor Relations & Corporate Communications at Infinity. Please go ahead.

Thank you, Karen and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our second quarter 2011 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer; Julian Adams, President of R&D and Gerald Quirk, Vice President of Corporate Affairs. Following our remarks we will open up the call for Q&A.

The press release issued earlier today details our results and is available on our website at www.ipi.com. Please note that during this call we may make forward-looking statements about the future expectations and plans, including clinical development milestones and financial projections. It is possible that our actual results may differ materially from what predict today due to the factors described in the risk factor section of the Form 10-Q for the second quarter of 2011 that 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 the statements in the future, but we are not taking on an obligation to do so. Now, I would like to turn the call over to Adelene.

Thanks, Jaren, and good afternoon, everyone. Thank you for joining us today. We continue to make significant progress across the business during the last few months. By the end of the year we expect to have four development candidates in the clinic and at least four Phase II trials underway. This sets the stage for data from multiple clinical trials that will inform our registration pads and commercial strategy.

Before Julian provides additional details about our development programs, I will briefly outline our long-term vision. Our goal is to build an independent fully integrated company capable of sustainability discovering, developing and delivering best in class medicines for difficult to treat diseases. We are approaching every aspect of our business with sound strategies that enable us to realize this vision. With respect to our pipeline and development strategy, we are targeting areas of significant unmet need such as pancreatic cancer, chondrosarcoma, myelofibrosis and non-small cell lung cancer, and are conducting Phase II trials in all four of these diseases.

We enter specific therapeutic area on the basis of a strong scientific rationale and deep understanding biology of the disease. In addition, we pursue indications with attractable development path and integrate commercial insights early into our development process to ensure that we can deliver a commercially differentiated product.

Our strategic alliances also play a role in enabling us to achieve our vision of building a fully integrated company. Our relationship with Purdue and Mundipharma has been highly productive, providing us with the financial resources and the independence to aggressively pursue our goal of developing a robust pipeline of novel drug candidates. It also enables us to commercialize our own products in the US and access our partners' commercial infrastructure outside the US.

In other cases we leverage strategic alliances to access early stage molecules with the opportunity for significant value creation. For example, our relationship with Intellikine brought us IPI-145, a PI3-kinase delta/gamma inhibitor that is poised to enter the clinic.

Perhaps most importantly, we have the team in place required to realize our goal. We've always had a stellar research team and over the past few years have added later stage capabilities, including translational development, [med affairs] and commercial.

In summary, we are in a really strong position today with a robust innovative pipeline and a phenomenal team of citizen owners as well as the financial resources in place to advance our programs through key value inflection points. And with that I will turn the call over to Julian to provide an update on our pipeline.

Thanks, Adelene. Today I will provide updates on three of our development programs. IPI-926, our oral molecule that targets the hedgehog pathway by inhibiting Smoothened, retaspimycin hydrochloride or IPI-504, our novel Hsp90 inhibitor, and IPI-145 our potent oral inhibitor of the delta and gamma isoforms of PI3-kinase.

As many of at ASCO last June, we reported data from our Phase Ib trial of IPI-926 in combination with Gemcitabine in patients with previously untreated metastatic pancreatic cancer. 926 plus Gemcitabine led to responses in five out of 16 patients, or a response rate of 31% according to re-assist radiographic measurement.

We are encouraged by this clinical activity, particularly because the historic overall response for Gemcitabine and current standard of care is less than 10%. At the time of the data cutoff median progression pre survival had not yet been reached and exceeded five and a half months. By way of comparison, median PFS for patients receiving Gemcitabine alone is just under three months and median overall survival is about six months. While only a small number of patients were evaluated in the open labeled Phase Ib part of the study, the results to date are certainly encouraging.

Moreover, IPI-926 combined with Gemcitabine was well tolerated. No grade four or five adverse events were observed and the combination did not cause any unexpected side effects. The maximum tolerated dose for IPI-926 combined with the standard dose of Gemcitabine was 160 milligrams per day which is also the single agent maximum tolerated dose. We are continuing to follow patients still on study and will report on the mature data set after overall survival has been established.

This trial moved seamlessly into Phase II which is a randomized placebo controlled study evaluating 120 previously untreated patients with metastatic pancreatic cancer. Patients are randomized one to one to receiver either 926 plus Gemcitabine or placebo plus Gemcitabine. The primary endpoint of this study is overall survival. Investigators have been very enthusiastic about this trial and we are expected to complete enrollment by the end of the year.

Because the trial is blinded with an overall survival endpoint we are unable to provide guidance on when the topline data will be available. Our understanding of the tumor stroma interaction in pancreatic cancer leads to us believe that IPI-926 may have applications across other fibrotic malignancies.

Based on this insight, we are initiating an exploratory Phase II trial of IPI-926 in patients with myelofibrosis. This is a lethal disease in which the malignant cells in the bone marrow lay down fibrotic by product and disrupts normal hematopoiesis forcing blood cell production in the spleen. We are excited to explore the clinical potential of IPI-926 in myelofibrosis. While other agents in development such as JAK2 inhibitors reduce splenomegaly, or spleen size and symptoms, there is still a significant need for a novel treatment option that can directly target the malignant fibrosis underlying this disease.

Our single line study is designed to evaluate the safety and efficacy of IPI-926 administered orally once daily in up to 45 patients with myelofibrosis. The primary endpoint of the trial is hematologic response rate according to the International Working Group criteria. We expect the study to begin this quarter.

We are also continuing to enroll patients in our Phase II trial of IPI-926 in chondrosarcoma, a life threatening malignancy of the cartilage with no treatment options other than surgery. The trial will enroll approximately 100 patients with locally advanced or metastatic inoperable disease at more than 40 sites globally.

Beyond our Company sponsored 926 trials we have two investigative trials underway. Today we announced the initiation of an investigator sponsored trial of 926 in combination with Folfirinox in previously untreated patients with locally advanced or metastatic pancreatic cancer. The Phase Ib/II study is designed to determine the recommended dose to evaluate the safety and clinical activity of the combination in approximately 20 patients. The trial is being conducted about Dr. Andrew Ko at UCSF.

Also earlier this year Dr. Antonio Jimeno, University of Colorado began a trial to evaluate the safety and activity of 926 in combination with cetuximab, or Erbitux, in head and neck squamous cell carcinoma. These trials are part of our strategy to explore a range of potential indications for 926 as well as to study 926 in combination with both commonly used and emergent treatments.

Turning to Hsp90. We've continued to make great progress with retaspimycin hydrochloride in non-small cell lung cancer. Also at ASCO we reported intriguing data from our Phase Ib trial of retaspimycin in combination with docetaxel where we saw partial responses in six out of 24 patients for an overall response rate of 26%. Docetaxel, the current standard of care for relapsed non-small cell lung cancer had an historical response rate of about 8%.

Higher response rates were observed among patients with squamous cell histology or a history of heavy smoking. Again the number of patients was small and this is an open label exploratory trial, but the results are sufficiently provocative to warrant further investigation.

As a result we have initiated an adaptive randomized placebo controlled Phase II clinical trial to assess the activity of retaspimycin in combination with docetaxel in patients with non-small cell lung cancer. Initially, approximately 100 patient with a history of smoking who had received either one or two prior treatments for non-small cell lung cancer, but who are naive to docetaxel treatment will be enrolled. After the first 100 patients are enrolled we will perform an interim analysis to evaluate the potential relationship between the efficacy data and certain baseline patient characteristics including histology, tobacco exposure and various biomarkers.

Based on the interim analysis, we may expand the trial in specific patient sub populations that seem to respond preferentially to this combination. This is a trial that enabled us to learn as it proceeds and to modify our trial enrollment based on response rate. The ultimate endpoint is overall survival.

Our laboratory and clinical findings suggest that retaspimycin may be best used as a combination agent. Today we announced the initiation of a Phase Ib/II trial that will explore the safety and efficacy of retaspimycin in combination with the mTOR inhibitor, everolimus, or Afinitor, in non-small cell lung cancer patients [habeen serat ] activating new patient.

As this is an exploratory Phase II trial the endpoint is overall response rate. Like patients with squamous cell histology or a history of heavy smoking, [Kere off newton] non-smoker lung cancer patients typically have a poor prognosis and fewer treatment options. Research conducted in collaboration with Karen Cishowski at Harvard Medical School has shown that the administration of retaspimycin with the mTOR inhibitor resulted in synergistic activity and substantial tumor regression in a mouse model.

Let me wrap up with the brief update on IPI-145, our potent inhibitor of the delta and gamma isoforms of PI3-kinase. We are encourage by the profile of 145 because it inhibits PI3-kinase delta more potently then other delta specific inhibitors described. And there is a cooperativity between the delta and gamma inhibition in preclinical model.

We recently filed an IND with the FDA and a clinical trial application in Europe. This marks an important milestone for our PI3-kinase program. We are on track to begin Phase I development of 145 by the end of 2011 and we continue to be very interested in both hematologic and inflammatory diseases. We will provide additional details about Phase I development later this year.

In closing, we have made significant progress this year and I'm pleased with how our pipeline is advancing. With that I will turn the call over to Gerald to wrap up with a review of our financials.

Thanks, Julian. Infinity continues to operate from a position of financial strength which enables us to conduct rigorous clinical trials and fund discovery efforts that will fuel our pipeline for years to come. Before turning to our second quarter financial results, I would like to review our 2011 financial guidance.

Today we updated our expectation for our year end cash and investments balance in connection with our plans to draw down our $50 million line of credit from Purdue. As a reminder this is a balloon note that matures on April 1, 2019 and bears interest at prime making it a very attractive source of capital.

While we have the right to draw amounts under the line of credit through the first quarter of 2012, we intend to draw down this line of credit in its entirety before the end of this year. As a result, we now expect to end the year with a cash and investments balance in the range of $110 million to $120 million as compared to our prior guidance of $60 million to $70 million. This does not include the $110 million in committed R&D funding from Mundipharma in 2012.

Earlier this year we guided that we anticipate a net operating cash burn for 2011 of between $30 million and $40 million driven primarily by our investment in our Hsp90 program. Today we are reaffirming our guidance for net operating cash burn as well as our guidance for revenue, operating expenses and net loss. We continue to expect revenue for 2011 to be between $90 million and $95 million all of which relates to our alliance with Purdue and Mundipharma. This consists of reimbursed R&D, the amortization of deferred revenue recorded upon entry into the alliance and reimbursed R&D for FAAH transition activities.

Total operating expenses for the year are estimated to be between $120 million and $130 million and net loss for the year is expected to be in the range of $30 million to $40 million.

Let me now turn briefly to our second quarter financial results. We ended the quarter with $82.3 million in cash and investments. Our revenues for the second quarter were $20 million compared to $18.7 million in the second quarter of 2010. The increase is the result of greater reimbursement for our R&D activities from our partners Purdue and Mundipharma in the second quarter of this year.

Our R&D expense for the second quarter was $25 million compared to $19 million in the second quarter of 2010. The increase is primarily associated with development activities related to our hedgehog and PI3-kinase programs, partially offset by decreased expenses associated with our FAAH program.

G&A expense for the quarter was $6.3 million compared to $5.2 million in the second quarter of 2010. The increase is mainly associated with an increase in business development consulting activities and increased patent expenses.

Our net loss for the second quarter of 2011 was $11.7 million or a basic and diluted net loss per common share of $0.44. This compares to $5.9 million or a basic and diluted loss per common share of $0.23 for the same period in 2010.

As a reminder, Mundipharma has committed to reimburse us for all expenses associated with our hedgehog, PI3-kinase and early discovery programs up to a cap of $85 million this year and $110 million in 2012. These reimbursed expenses are recorded as R&D expense as well as collaborative R&D revenue.

Transition activities we performed for Purdue to enable their start of Phase II clinical development IPI-940 are reimbursed above the $85 million cap. Based on our current operating plan and in the absence of any business development activity, we continue to project a cash runway into 2014 allowing us to generate meaningful data from our programs before next leading to finance.

With that let me turn the call over to Karen for Q&A.

(Operator Instructions). Our first question comes from the line of Ted Tenthoff from Piper Jaffray.

Thank you. Can you hear me okay?

Yes, we did.

Thanks for the updates on the programs. I wanted to ask a little bit more about the PI3K program. Perhaps you can outline what the initial development plans will be and what your goals are for that target?

As I mentioned, we will be outlining the specific plans later this year, but we are just reporting that we are very encouraged by the potential for the dual inhibitor, both delta and gamma isoforms, in hematologic disease as well as inflammatory conditions.

Great. And just a quick house keeping question, too, if I may. It looks like SG&A was a little high in the second quarter. There was anything one time? Is this a level we should expect going forward?

So the increase in the quarter, as I mentioned was associated with DD consulting activities which are not recurring. and increased patent expenses. We don't guide as to the breakout between R&D and G&A expenses, but we do stand behind our guidance of total operating expenses of between $120 million and $130 million this year.

Great. I appreciate it. Thanks so much.

Thanks, Ted.

Thank you, sir. (Operator Instructions). I see no further questions. I will turn the conference back to Infinity Pharmaceuticals for any final remarks.

Thank you, operator. We are emboldened by the progress we've made so for and look forward to continued progress in the coming months and hope to see many of you at investor conferences in September. Thanks.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone, have a good day.