Infinity Pharmaceuticals Inc (INFI) 2011 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 2011 financial results. My name is Latoya and I will be your operator for today's call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at Infinity's request.

At this time I would like to introduce your host for today's call, Ms. Jaren Madden, Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Thank you, Latoya, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our third 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'll open up the call for Q&A.

The press release issued earlier today details our results and is available on our web site at www.infi.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'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 the Form 10-Q for the third 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 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 our pipeline during the last few months. We've completed patient accrual in our phase II trial of our smoothened antagonist, IPI926 for pancreatic cancer and we initiated a phase II trial of IPI926 in myelofibrosis. In addition, last week we announced the initiation of two phase I trials of our IPI145, our PI3 kinase delta gamma inhibitor.

In total, we've initiated seven clinical studies this year, a truly remarkable accomplishment for a company of our size. This achievement highlights the productivity of our R&D team and our commitment to developing novel drugs that can make a meaningful difference for patients.

We are pursing areas where the unmet need is great, such as pancreatic cancer, chondrosarcoma, myelofibrosis, and non-small-cell lung cancer. We've selected these indications of the basis of compelling scientific rationale, a tractable development path, and our belief that we can deliver a differentiated product with significant commercial potential.

We've made some terrific additions to the team this year, adding several senior people with experience in later stage drug development to support a burgeoning pipeline. Our strong financial foundation enables us to support a high level of clinical activity.

Our strategic alliances, Purdue and Mundipharma provides us with R&D funding to move our programs forward to key value inception points prior to needing additional financing. And because we've retained the US commercial rights to all of our oncology and inflammation programs, our alliance gives us the ability to advance our goal of becoming a fully integrated company.

We're ending the year in a very sound position and are really looking forward to 2012. Based on continued insight we will gain over the next two months into how our clinical trials are accruing, we will provide more detailed guidance in early 2012 around when you can expect our trials to fully accrue and when top-line data may be available. With data that will inform the registration paths for our product candidates, we expect 2012 to be a truly pivotal year for Infinity.

So with great appreciation to all of the Infinity citizen owners who have brought us to this point, I turn the call over to Julian to provide you with an update on our pipeline.

Thanks. As Adelene mentioned, we initiated seven company-sponsored clinical studies this year, each based on a strong scientific or clinical rationale. This includes three trials of IPI926, our oral molecule that targets the hedgehog pathway by inhibiting smoothened, two trials of retaspimycin hydrochloride or IPI504, our novel Hsp90 inhibitor, and two trials of IPI145 our potent oral inhibitor of the delta and gamma isoforms of PI3 kinase.

Today I would like to review each of these trials and will touch on some of the preclinical science underlying our studies.

The first trial I will discuss is our phase II study of IPI926 in metastatic pancreatic cancer, which we both initiated and fully accrued this year well ahead of schedule. As a reminder, this is a randomized, double-blind, placebo-controlled trial designed to compare 926 in combination with gemcitabine to treatment with gemcitabine plus placebo. Our investigators have been very enthusiastic about this study and we believe this speaks to the rigor of the trial design and compelling science for the role of IPI926 in pancreatic cancer. We hope IPI926 in combination with gemcitabine will provide a meaningful benefit over gemcitabine alone where the median overall survival for patients receiving gemcitabine as a single agent is only about six months. Since the primary endpoint of our study is overall survival, we are unable to predict when the trial will be completed, but we would expect to have top-line data from study by the end of 2012. We will, however, present additional data from our phase Ib trial of IPI926 plus gemcitabine, which will include progression-free survival and overall survival at ASCO GI in San Francisco this January.

What's really intriguing about pancreatic cancer is that unlike other tumors where anti-angiogenesis agents prevent the delivery of oxygen and nutrients for tumor growth, we believe pancreatic tumors need blood flow so that chemotherapy can reach the tumor. This hypothesis is supported by the preclinical data of 926 in combination with chemotherapy presented last week at the AACR Tumor Microenvironment meeting. In a xenograft model of pancreatic cancer, treatment of IPI926 had a profound effect on depleting the tumor stroma, leading to increased blood vessel density and flow. These data support our belief that 926 increases tumor profusion and enhances the delivery of chemotherapy to the tumor. These data also suggest that 926 may play a role in combination with other chemotherapies other than gemcitabine.

This coming Monday, we will present data in a preclinical model of pancreatic cancer, liver metastases at a joint meeting of the AACR, NCI, and EORTC in San Francisco. These data are guiding our thinking about the potential development of 926 in patients with locally-advanced pancreatic cancer, as well as treatment in the neoadjuvant setting.

The second trial initiated this year is a phase II trial of IPI926 in myelofibrosis, a lethal disease in which malignant cells in the bone marrow lay down fibrotic byproducts and disrupt normal hematopoiesis, forcing blood cell production to the spleen and liver. This is an exploratory single-end study designed to evaluate safety and efficacy. We will initially enroll 12 patients and may expand the trial up to 45 patients based on the response rate observed in the first cohort.

It's important to note that in general we prefer randomized studies. However, there are no spontaneous remissions in myelofibrosis. Positive results from an open-label study such as a reduction in fibrosis in the bone marrow or restoration of normal hematopoiesis will be clinically meaningful and would give us the confidence to move forward into a randomized phase III trial.

We initiated the myelofibrosis trial based on our understanding of the tumor stroma in the interaction in pancreatic cancer. Research suggesting that sonic hedgehog is expressed in the bone marrow of myelofibrosis patients provided further rationale for our trial. While other agents in development such as JAK2 inhibitors reduce spleen size and symptoms, there's still a significant need for novel treatment options that can directly target the malignant fibrosis underlying the disease process.

1 IPI926 versus placebo and includes an option for patients on the placebo arm to cross over to IPI926 upon disease progression. Our investigators as well as patient advocates have been very enthusiastic about this trial and we are pleased with how it's accruing. We will present preclinical data that guided our decision to initiate this phase II study on December 1 at the Conference on Cancer-Induced Bone Disease in Chicago.

Let me now turn to our Hsp90 program and the fourth trial we began this year, which is evaluating the retaspimycin hydrochloride in non-small cell lung cancer. This is a double-blind, randomized, placebo-controlled trial comparing retaspimycin hydrochloride plus docetaxel to treatment with docetaxel plus placebo. The trial will enroll approximately 200 patients with a history of smoking who have received one or two prior treatments for advanced non-small cell lung cancer, but who are nevertheless naïve to docetaxel treatment. Patients are being stratified based on histology and performance status.

We had originally planned to conduct an interim analysis after the first 100 patients were enrolled. However, the trial is enrolling faster than anticipated. And rather than pause the trial to conduct an interim analysis and modify the inclusion criteria, we've decided to enroll all 200 patients and then complete our analysis. The primary endpoint is overall survival. Other endpoints include progression-free survival and overall response rate. In this study, we are also evaluating the relationship between survival and certain biomarkers identified by our in-house molecular pathology group. As a reminder, the study is based on data from our phase Ib trial in which we reported an overall response rate of 26%, but even higher response was observed in patients with a history of heavy smoking.

These data were compelling because patients with a history of smoking typically do not benefit from currently-available treatment options. Given the high response rate observed in smokers in the phase Ib study, we hope to show that this translates into an overall survival benefit in our phase II trial.

The fifth trial initiated in 2011 is an exploratory single-arm phase Ib/II trial of retaspimycin hydrochloride in combination with mTOR inhibitor everolimus or Afinitor in non-small cell lung cancer patients with KRAS mutations. These patients also have a poor prognosis and few treatment options.

We are currently in the portion -- in the phase Ib portion of the trial, which is a dose escalation study designed to determine the recommended dose for the combination regimen. The endpoint of the phase II portion of this trial is overall response rate. Like myelofibrosis, the phase II portion of this study will enroll 12 patients, may be expanded up to 45 patients based on the response rate observed in the first cohort.

A seminal preclinical finding that was recently published in Cancer Cell in collaboration with Karen Cichowski at Harvard Medical School prompted us to initiate this trial. Her data showed that the administration of retaspimycin hydrochloride plus rapamycin, mTOR inhibitor, resulted in synergistic activity and substantial tumor regression in the mouse model, which closely recapitulates human KRAS p53 mutant non-small cell lung cancer. While n either agent has an anti-tumorigenic effect on its own in this model, the combination of 504 and rapamycin led to dramatic tumor shrinkage. Mechanicistically it is believed that the combination produces a profound autophagic response leading to tumor cell death. Based on this insight and similar to our myelofibrosis trial, we are conducting a single-arm study. Because neither retaspimycin hydrochloride nor everolimus would be expected to elicit a response on its own, durable responses in this study would be considered clinically meaningful.

Finally, let me turn to our PI3 kinase program. Last week we announced the initiation of our sixth and seventh trials for the year, which are evaluating IPI145, a PI3 kinase delta and gamma inhibitor. We are pursing a dual development path in both inflammation and hematologic malignancies. To support the inflammation indication, we are conducting a phase I trial of IPI145 in healthy adult subjects. It is a double-blind, randomized, placebo-controlled study designed to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of single and multiple escalating doses of IPI145.

Importantly IPI145 is the only delta/gamma PI3 kinase inhibitor currently in the clinic. We have observed activity in several preclinical models of inflammation and believe that the profile of IPI145 observed to date gives us a first-in-class market opportunity in inflammatory diseases.

We are assessing opportunities ranging from indications in specialty markets to those in large primary care markets and will announce our first inflammatory disease indication when we begin phase II.

With respect to developing IPI145 in hematologic malignancies, we are conducting a phase I open-label, dose-escalation study designed to evaluate the safety, pharmacokinetics, and clinical activity of IPI145 in patients with advanced hematologic malignancies. Compelling data of a delta-specific PI3 kinase inhibitor in patients with heme malignancies were presented at ASH last year. Those data coupled with the exceptional potency of IPI145 and its ability to inhibit PI3 kinase gamma as well as delta emboldened us to initiate our phase I heme trial. Since the PI3 kinase gamma is known to be involved in chemokine signaling and immune cell trafficking, we believe that IPI145 could have an advantage over delta-specific inhibitors. We expect to have top-line data from both phase I studies next year.

So as you can see, the seven studies we initiated this year are all in the areas of great unmet need and are supported by compelling science or clinical rationale. These trials have the potential to contribute a transformative year for Infinity in 2012, truly a remarkable achievement by the teams.

And with that, I would like to return -- turn the call over to Gerald for a review of our financial results.

Thanks Julian. In addition to advancing a pipeline of novel product candidates, we are continuing to deploy or cash resources on what we believe to be the most value-creating activities. In doing this, remain well-positioned to obtain key data from our ongoing trials before needing to access additional financing.

Let me now turn briefly to our third quarter financial results. We ended the third quarter with $75.3 million in cash and investments compared to $82.3 million at June 30, 2011. Our revenues for the quarter were $23.3 million compared to $22.5 million in the third quarter of 2010. The increase is the result of greater reimbursement for our R&D activities from our partners at Mundipharma and Purdue in the third quarter of this year. Our R&D expense for the third quarter was $29.4 million compared to $38.7 million in the third quarter of 2010. The decrease in R&D expense is primarily the result of the $13.5 million license fee paid to acquire rights to our PI3 kinase program, which was expensed in the third quarter of 2010. This was partially offset by a $3 million milestone payment to Intellikine for the commencement of clinical development of IPI145 in healthy adult subjects in the third quarter of this year and higher clinical development expenses.

G&A expense for the quarter was $5.5 million compared to $5 million in the third quarter of 2010. Our net loss for the third quarter of this year was $11.9 million or a basic and diluted loss per share of -- per common share of $0.45. This compares to $21 million or a basic and diluted loss per common share of $0.80 for the same period in 2010.

We continue to expect ending the year with cash -- a cash and investments balance in the range of $110 million to $120 million, which includes the proceeds from the $50 million line of credit from Purdue that we intended to access in its entirety by the end of this year. Our projected year-end cash balance does not include the $110 million in committed R&D funding from Mundipharma in 2012. In December we expect to be able to provide you with details regarding Mundipharma's R&D funding commitment for 2013.

In summary, our balance sheet remains strong and we are pleased to have the financial wherewithal to advance our portfolio of four clinical candidates and to support a robust discovery engine that we hope will fuel our pipeline into the future.

And with that, let me turn the call over to Latoya for Q&A.

Thank you. (Operator Instructions) Our first question is from Mani Mohindru with ThinkEquity. Your line is open.

Hi. Thanks for taking my questions, a few questions maybe. What kind of endpoint are you looking at in the hematologic study in PI3 kinase drug, the trial that you just started for phase I trial to sort of get an early sense of efficacy of this compound in myelofibrosis?

We're looking for evidence of biologic activity as assessed by response rate. And it's -- a broad range of patients are being examined in this trial, so each particular malignancy has a definite -- its own unique definition of a response rate.

Okay, so you're including all different kinds of hematologic malignancies, not really concentrating on certain specific ones if I understand?

So that's correct in the dose escalation portion. And then we may choose to expand in certain malignancies where we've seen activity.

Understood. If I may switch gears and go back to your retaspimycin lung cancer trial, actually so the trial that you are now -- you made modifications to the trial to include all 200 patients before you do the analysis going forward to make a go/no go decision about the kind of patient population you want to choose. So based on that, will we see any data within 2012 from this trial?

So I don't think that we have a plan to announce top-line data in 2012. When the accrual is complete, however, we will let the community know.

Okay. And one more question on the pancreatic trial with the smoothened inhibitor, just a question on powering, so based on the number of patients, what is the minimum difference in overall survival that you want to see that would be clinically and statistically meaningful in this trial?

So while I can't comment on the specific statistics or hazard ratio of the trial, I can assure you that the trial is adequately powered to detect a significant benefit in overall survival, which will give us the confidence to go forward with the phase III program.

It will be -- if I may just sort of speculate, it will be more than what we've seen with Tarceva and gemcitabine combination?

I think that's a very good speculation on your part. Very wise.

Okay. Thank you. I will let other speakers take over questions.

Thank you. (Operator Instructions) There are no questions at this time. I will turn the call back over to Adelene for closing remarks.

Thank you, Operator. We are very pleased with the progress we've made this year and plan to carry our momentum forward into 2012. With seven clinical trials underway, we expect next year to be very productive and we look forward to updating you on our progress. Look to see many of you at conferences in Boston and New York during November and kick off the new year together in San Francisco. Have a good night.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect. Good day.