Infinity Pharmaceuticals Inc (INFI) 2011 Q4 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 year end 2011 financial results. My name is Mary and I'll 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 Mary, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our year end 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 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'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-K for 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 view. We may update these statements in the future, but are not taking on an obligation to do so.

And with that, I'd like to turn the call over to Adelene.

Thanks Jaren, and good afternoon, everyone. Thank you for joining us today. In 2011, we made tremendous progress, advancing Saridegib, retaspimycin hydrochloride and IPI 145. Today, we have six clinical trials underway across these three programs, each designed to address diseases with significant unmet needs. The indications we're pursuing were selected on the basis of a strong scientific rationale, retractable development tasks, and the potential to commercialize a first in class or best in class medicine. In the second half of this year, we're anticipating data readouts from four of our six trials, and we expect the other two to read out by the end of 2013. Importantly, positive data from several of these trials could lead directly to registration studies or regulatory submission. This positions us well to realize our mission of building a sustainable, fully integrated biotech company. Of course, conducting high quality trials across three programs, requires considerable financial strength.

Let me take a moment to comment on our financial outlook. First, we entered 2012 with $115.9 million in cash and investments. Second, we have $257.5 million in committed R&D funding from our partner, Mundipharma for our hedgehog, PI-3-kinase, and Early Discovery Programs. The $257.5 million represents R&D funding of $110 million for 2012, and $147.5 million for 2013, a 34% increase year-over-year. So in total, we entered this year with more than $370 million in current and committed capital. Mundipharma's next funding decision will take place in November 2012 for the PI-3-kinase and Early Discovery Programs. And their next funding decision for the hedgehog program will occur in November of 2013. While there are certain opt-out payments if Mundipharma elects to exit a program at any given decision point, we believe positive data will ensure that we continue to have access to minimally diluted capital, enabling us to drive our programs forward to approval and launch.

As our pipeline matures, our focus on late stage development and activities to prepare for registration is intensifying. To that end, yesterday, we announced the appointment of Gwen Fyfe and Norm Selby to our Board of Directors. Gwen is a renowned Medical Oncologist and was most recently the Vice President of Oncology Development at Genentech, where she played a key role in the development of several breakthrough oncology therapeutics including Rituxin, Perceptin, Avastin, and Tarceva. Norman is a proven leader with a wealth of experience in finance, corporate strategy, and company building. Gwen and Norman are ideal additions to our Board and we look forward to the impact that they will have in helping us realize our vision. We also announced yesterday that Arnie Levine and Jim Tananbaum will retire from the Board in May. Arnie and Jim were integral to Infinity's initial discovery research efforts and early venture funding, and we are incredibly thankful for their contributions. We expect Arnie will continue his relationship with Infinity as a scientific advisor.

In summary, our pipeline continues to advance. We're in a strong financial position, and we have an experienced leadership team. We have all the elements in place to support our goal of building a sustainable, fully integrated company. And with full US commercial rights for all of our programs and royalties outside of the US, we're well positioned to capitalize on the commercial potential of our product candidates and create meaningful shareholder value. I'm excited about the year ahead and look forward to providing updates on our progress throughout the year. And with that, I'll turn the call over to Julian.

Thanks. As Adelene mentioned, we have two trials under way in each of our three development programs. This includes Saridegib, our oral molecule that targets the hedgehog's pathway by inhibiting Smoothened, retaspimycin hydrochloride, or IPI-504, our novel HSP 90 inhibitor, and two trials of IPI 145, our potent oral inhibitor of PI-3-kinase delta and gamma. Today, I will briefly review each of these programs beginning with Saridegib. As money of you know, in January, we announced that our Phase 2 trial of Saridegib plus gemcitabine in pancreatic cancer would not meet its overall survival end point. We are still in the process of obtaining all the data from the trial. We plan to present the final data in a peer review setting after our analyses are complete. We hope that analyses from our own trial coupled with data collected from an investigator sponsor trial of Saridegib and folfirinox that had been initiated in pancreatic cancer, will enable us to better understand the biology and mechanism underlying our Phase 2 results.

We still remain enthusiastic about the therapeutic potential for hedgehog pathway inhibition. Our Phase 2 trials in chondrosarcoma and myelofibrosis are testing distinctly different biological mechanisms. And therefore, the pancreatic cancer findings have no bearing on these trials. In Chondrosarcoma, it is believed that there is [autoquin] signaling of the hedgehog pathway within the tumor cell. In pre-clinical models, inhibiting the pathway suppresses tumor growth and leads to changes in tumor morphology, including loss of cellularity and inhibition of tumor growth.

Our Phase 2 double-blind with randomized placebo controlled trial is enrolling approximately 140 patients, with locally advanced or metastatic inoperable disease at about 50 sites globally. The primary end point is progression-free survival. And we are on track to complete enrollment in the second half of the year and anticipate reporting data in the first half of 2013. If the clinical benefit is compelling, we will have a conversation with the FDA and European authorities to discuss the possibility of submitting an NDA based on the Phase 2 data. Positive data from the Chondrosarcoma trial would also give us confidence to conduct clinical trials in other sarcomas. We are beginning to explore this possibility pre-clinically to build the scientific rationale for other potential trials next year.

Let me now turn to myelofibrosis, a malignancy characterized by an abnormal hematopoietic stem cell leading to pathogenic fibrosis. Because hedgehog signaling has been detected in the bone marrow of myelofibrosis patients, it is thought that inhibiting the pathway could improve the underlying fibrosis associated with this disease. We are testing this hypothesis in our exploratory open label Phase 2 trial in patients with myelofibrosis. I am pleased to report that we have enrolled our first cohort of 12 invaluable patients. If we see sufficient activity, we will further expand the trial, and we expect to present data from this study at a medical meeting in the second half of 2012.

Let me now turn to Retaspimycin hydrochloride. We have focused our efforts in developing Retaspimycin in patient populations where effective treatment options remain very limited. We are conducting two trials designed to generate meaningful data that could enable registration trials. The first is a Phase 2 double-blind randomized placebo-controlled trial, comparing Retaspimycin plus docetaxel to 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 naive to docetaxel treatments. We selected this patient population based on our Phase1B data in which all partial responses were observed in heavy smokers. Since we also saw partial responses in patients with squamous cell carcinoma in the Phase1B, we are stratifying patients by tissue histology in the current trial. The primary end point is overall survival and other end points include progression-free survival and overall response rate.

Furthermore, we are prospectively evaluating the relationship between survival and a predictive bio marker identified by our in-house molecular pathology group, using data from the Phase1B trial. We believe our design and bio marker strategy will enable us to identify the patients most likely to benefit from the treatment of Retaspimycin hydrochloride and enable a clear path forward. Notably Retaspimycin is the only HSP 90 inhibitor for which partial responses have been reported in combination with docetaxel in non-small-cell lung cancer. We look forward to completing enrollment in the second half of this year and anticipate the data from this trial in the second half of 2013.

The second trial of Retaspimycin hydrochloride is an exploratory single armed Phase1B/2 trial in combination with the mTOR inhibitor Everolimus or Afinitor in non-small-cell lung cancer patients with KRAS activating mutations. The end point of this Phase 2 trial, portion of this trial is overall response rate. Following the Phase1B dose escalation portion of this trial, we will evaluate safety and clinical activity in a cohort of approximately 12 patients. We may then expand the trial in up to 45 patients, based on the response rate observed in the first cohort. This trial is exploring a distinct hypothesis from our other study and is based on pre-clinical data suggesting that Retaspimycin combined with an mTOR inhibitor produces a profound autophagic response leading to tumor cell death. Because neither Retaspimycin nor Everolimus would be expected to illicit a response on its own, positive data from this trial would lead to a Phase 3 registration trial. We expect to report top line data from the dose escalation portion of this trial in second half of this year.

Finally, let me turn to IPI 145, the only PI3 kinase delta gamma inhibitor in the clinic. We are pursuing a dual development path in both inflammation and hematologic malignancies. We recently completed our Phase 1 double-blind randomized placebo control trial of IPI 145 in healthy adult subjects designed to support development in inflammation. While we are planning to present this East Phase 1 data at a medical meeting in second half of 2012, at this time we are able to tell you that we are pleased with the tolerability as well as the pharmacokinetic and pharmacodynamic profile observed to date. IPI 145 has demonstrated activity in several pre-clinical models of inflammation and we believe there are a broad range of opportunities, such as asthma, rheumatoid arthritis, Crohn's disease, and lupus, as well as smaller specialty market opportunities. We are preparing for a Phase 2 trial in inflammation and will announce the indication when we initiate the trial later this year.

With respect to developing IPI 145 in hematologic malignancies, our Phase 1 open label dose escalation study designed to evaluate safety and activity and PK of 145 in patients with advanced hematologic malignancies is ongoing. The Phase1 trial is enrolling patients with a broad range of key malignancies and we hope to see activity in indications where a Delta-specific PI3K inhibitor has shown activity, such as indolent non-Hodgkin's lymphoma, mantle cell lymphoma, and chronic lymphocitic leukemia. In addition, we hope that the potency and ability to inhibit the PI3K gamma may also lead to a broader spectrum of activity. Once the dose escalation portion of our trial is complete, we plan to expand the trial in specific key malignancies to further assess the safety and clinical activity of IPI 145. We expect to present data from this trial at a medical meeting in the second half of 2012.

So to wrap up, we have six trials supported by encouraging scientific or clinical rationales. The data from four of these trials anticipated in the second half of this year, 2012, is shaping up to be an important year for Infinity. We look forward to sharing data from our trials with you in the coming months. And with that, I will turn the call over to Gerald for a review of our financial results.

Thanks Julian. As Adelene mentioned, our strong financial foundation and strategic alliance with Mundipharma enables us to advance our clinical programs to key value inflection points before needing to access additional financing. As a reminder, we are entitled to reimbursement from Mundipharma for up to $110 million in 2012 and $147.5 in 2013 for R&D expenses. In addition, last November we drew down the full $50 million available under our line of credit from Purdue. The borrowed amounts bear interest at the prime rate and no principal or accrued interest is due until April 1, 2019. Our current cash and investments together with the committed R&D funding provide us with cash runway to 2014 under our current operating plan.

Let me first review our top line financial results for 2011. We ended the year with $115.9 million in cash and investments. Our total revenue for 2011 was $92.8 million all of which relates to our strategic alliance with Mundipharma and Purdue. Our R&D expense for 2011 was $108.6 million, which resulted from the initiation of seven clinical trials during the year. Reimbursed expenses related to our alliance with Mundipharma are recorded as expense, as well as collaborative R&D revenue. G&A expense for 2011 was $22.7 million and our net loss for the year was $40 million.

As a reminder, we provided financial guidance in January and are reiterating our 2012 guidance at this time. I'll briefly review this guidance now. We expect total revenue for the year to be approximately $114 million. This includes $110 million for reimbursed R&D services from Mundipharma and approximately $4 million from the amortization of deferred revenue associated with the grant of rights and licenses under our strategic alliance. We expect operating expenses to range from $145 million to $155 million. We expect net loss to range from $35 million to $45 million, or a basic and diluted loss per share of $1.30 to $1.70. We expect to end the year with total cash and investments of between $75 million and $85 million.

As a reminder, this year end total cash and investments balance does not include the $147.5 million in R&D reimbursement to which we are entitled in 2013 under our strategic alliance with Mundipharma. In summary, our balance sheet remains strong and we are pleased to have cash runway into 2014, providing the financial foundation to advance our clinical programs to key value inflection points. And with that, let me turn the call over to Mary for Q&A.

(Operator Instructions) Ted Tenthoff from Piper Jaffray.

Great. Thank you very much. Excuse me. Thanks for the update and appreciate the strong financial position as you advance this rich pipeline. So can you give us an update on any of the investigator sponsored studies that are ongoing for Saridegib?

Yes, so at the time we have two investigator-sponsored trials. One in head and neck which is ongoing at University of Colorado. And another trial with a combination with folfirinox at UCSF. Now given the results in the pancreatic cancer trial, we have called those investigators, discussed in great detail with them the data we have to date, albeit not final data and are in discussions whether they should continue their trial or not.

And when should we expect the publication of the pancreatic cancer results?

So we haven't had enough events yet and cleaned the data and locked the database. So that's an ongoing effort. We expect to do that in the coming months and as soon as we have all the data, we'll be putting in a manuscript or an abstract at a medical meeting. So as soon as possible, as we certainly don't want to delay getting these data out to investigators and patients. Ted, any further follow-up?

Mike King from Rodman & Renshaw.

Good afternoon, guys. Thanks for taking my question. And I just have a couple of quick ones. I know you said that you'd completed enrollment in the randomized Phase II for Retaspimycin but can you say approximately how many patients you have in the study now?

Can't provide enrollment guidance, but we're on track.

Okay, and then on the Phase Ib2 with Afinitor, Julian can you just give us a little more color about how you're going to dose escalate both agents, or is it one and the other independently, or--?

Yes. So because we have had really, very little experience with Afinitor and Retaspimycin hydrochloride, we have a double escalation scheme under way and we're looking for obviously the optimal dose pair and that's taking the time it takes in a Phase I investigation.

Okay, but that's as specific as you want to get?

Yes. And when we have further guidance, we'll certainly provide enrollment information on the--.

I guess can one assume that you'll start at some fraction of the approved dose of Afinitor and work up to that?

I don't think you should make any assumptions at this time.

Okay. And then on IPI-145, do you have any data that indicates whether you hit your target?

We do. As I mentioned, we're very pleased with the PD results and we'll be presenting that, again, at a medical meeting later this year. But we definitely have covered our PD marker of interest.

Okay, and then a financial question. I just wonder if -- can we get -- I know you did seven trials in '11. I'm just kind of trying to see if we can get some color on how you're thinking about spending going forward. It's a fairly big spend number and I'm also -- I just want to confirm the capital IQ has you guys showing 168 employees. Is that accurate?

Our employee number is closer to kind of upper 180s to 190, full-time employees.

Okay. And then just as far as spend on R versus D and if there's any color you can give on D.

So I think, Mike, it'll continue, the guidance that we have provided is that we will expect our operating expenses next year to be in the $145 million to $155 million range, with $100 million -- for 2013. So I think we've provided the guidance on both 2012 and 2013 and with that, that gives us runway into 2014.

Right. I hear you on that. I'm just saying I don't know if you can break it down between Retaspimycin 145 and Saridegib.

Yes, we don't provide that level of detail in terms of our guidance, Mike. But I think it's -- suffice it to say that to the extent we have $110 million this year and $147.5 million next year on Hedgehog PI-3-kinase on our Discovery programs, we intend to spend all of that for that, and then HSP 90 is over that, which is why we have expenses above and beyond the $110 million reimbursement.

Right. Right. Okay. Thanks very much.

Mani Mohindru from ThinkEquity.

Hello. Thanks for taking my questions. Most of my questions have been answered, but I had a couple of follow-ups. On 145, at least on the clinical trial down (inaudible) Phase that there were 106 patients recruited for your Phase I. Is that sort of the ball park number that was recruited and completed?

That's probably -- that's the upper range of the limit. We did both dose escalation, single ascending dose, multiple ascending dose. We did food effects and drug interaction. So there were many arms to the study to enable future development in inflammation and of course it also supports our heme malignancies.

Okay, and I know that you can't talk about the indication, but can you talk about how big your Phase II would be? What do you anticipate in sort of trying to include the financials with that? How big of a trial do you anticipate and when do you anticipate it to start?

So since I can't name the indication, I can't tell you the size of the trial. But rest assured that it will be a blinded and randomized study. And exploring different doses.

Okay. And maybe a quick follow-up. Are there any Retaspimycin hydrochloride investigator initiated trials ongoing right now?

No, not at this time.

Okay, none whatsoever. I think that's all for now. Thank you.

(Operator Instructions) Robert Davidson from Edison Investment.

All right. Thank you. Hello there. I know it's difficult to answer this but I wondered if you had any reaction from your part of Mundipharma to the pancreatic study and whether that's maybe sort of shaping your decisions about where you go with Saridegib later on in 2013 perhaps?

Well, we are in regular communication with our partners at Mundipharma. We have certainly discussed the data that we have to date. As Julian has shared, we're still collecting the full data set and we will be reviewing it internally with our partners and ultimately sharing it with the investigators and patients when we have the full data set available. As Julian said, the experience in our pancreatic cancer trial is not influencing our continued development of the Hedgehog Program in myelofibrosis and chondrosarcoma because they are testing quite distinct biologic mechanisms of the Hedgehog Pathway. So those are proceeding without change in the aftermath of the pancreatic cancer trial.

Right, okay. I was just thinking more in terms of commercial thinking. Probably because they have to make their decisions well in advance obviously of their funding requirements. But there's no changes being made as yet to your -- to any plans you may have had, would that be right?

No, that's right. No, that's right. And for both of the trials in myelofibrosis and chondrosarcoma, with success in those trials, there are a host of opportunities where we can further expand into broader sarcomas and potentially broader heme malignancies. So we'll continue, as we always have to follow the data and we'll make that data available to Mundipharma when they make their next decision on this program at the end of 2013.

Okay. Right. Just quickly on 145, I like everyone else is very interested in what implementary indication you might choose. I'm just kind of wondering whether the decision making you're thinking is directed more by commercial decisions for a competition, size of market, that sort of thing, or it's being directed by scientific data that you may not fully yet have to hand?

Great question, and the answer is they're inextricably intertwined. The science informs what is possible and of course we take into account the commercial indications, and we work cheek by jowl at this Company. It's not research versus commercial. We work very collaboratively to make the best choices for the molecule and for patients.

Right, excellent. Okay. Thank you very much.

Thank you. I show no further questions in the queue and would like to turn the conference back to Miss Adelene Perkins for closing remarks.

Thanks everyone for joining us today. And we look forward to providing you updates on our six ongoing clinical trials throughout the year. Have a nice night. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may all disconnect at this time.