Infinity Pharmaceuticals Inc (INFI) 2013 Q1 法說會逐字稿

Welcome to the Infinity Pharmaceuticals conference call to discuss the Company's financial results for the first quarter of 2013.

My name is Mimi, 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'd 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, Mimi, and good afternoon, everyone.

Welcome to today's call to discuss our recent business progress and review our first-quarter 2013 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer, Julian Adams, President of R&D, and Larry Bloch, CFO and CBO. 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, the therapeutic potential of our product candidates, and financial projections. It's possible that our actual results may differ materially from what we project today, due to the considerations described in the Risk Factors section of the Form 10-Q for the first quarter of 2013 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 these 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.

Welcome, everyone, and thank you for joining us on the call today. This is a very important year for Infinity, as we advanced our programs towards late stage development and commercialization. We're continuing to make considerable progress with our lead product candidate, IPI-145, which was recently granted an orphan drug designation by both the FDA and EMA for the treatment of CLL and SLL. Our Phase I trial of IPI-145 in hematologic malignancies is ongoing, and we've enrolled more than 50 patients in the five expansion cohorts we opened earlier this year, at a dose of 75 mgs twice a day. Additionally, we announced today that an investigator-sponsored Phase I-b trial evaluating IPI-145 in combination with rituxan and bendamustine is now open for enrollment.

From our Company-sponsored Phase I trial of IPI-145, we will present updated data at the American Society of Clinical Oncology, or ASCO, in June. We have a poster presentation on June 2, and an oral presentation on June 3. Following our presentations, on Monday, June 3, we will host an investor event at ASCO with management and investigators from the Phase I trial. And we look forward to reviewing our data with you in greater detail at that time. Additionally, there will be three presentations on data from our Phase I trial of IPI-145 at the International Conference On Malignant Lymphoma, which will be held from June 19 to the 22 in Lugano, Switzerland.

We are also studying IPI-145 in inflammation. Today, we announced that the ASPIRA trial, which stands for Adult Study of PI3 Kinase Inhibition in RA is open for enrollment. This is a Phase II double-blind, randomized, placebo-controlled study of IPI-145 in patients with moderate to severe rheumatoid arthritis. We also have an important milestone still ahead this year in our Hsp90 program. We now expect to report top-line data from this study in the second half of the year, and Julian will discuss this trial in more detail.

Our goal at Infinity is to build a sustainable, fully-integrated Biopharmaceutical company, and we believe we have the necessary pieces in place to realize this vision; an experienced team, a solid financial foundation, and promising product candidates with worldwide rights to our entire product portfolio. With these fundamental elements in place, we believe we have the capabilities required to rapidly advance our programs to their next value inflection point. We are also committed to deepening our pipelines. In addition to our internal discovery efforts, we actively evaluate potential in-licensing opportunities to identify high-value programs where we believe we have the scientific and clinical expertise to expand or accelerate a product candidate's development.

In summary, our strong foundation, and the magnitude of the opportunities before us, positions Infinity well to realize our goal of bringing meaningful new medicines to patients. Our ability to achieve our mission is driven by Infinity team members, who we refer to as citizen owners. Citizen ownership speaks to the passion and commitment that every person in the Company has for our collective effort on behalf of patients, and the way in which we work together.

Developing important medicines is the consummate team endeavor, and a culture of collaboration is one of the reasons we were recently included in the Boston Business Journal's best places to work list for the sixth year in a row. Together, we're looking forward to achieving several important milestones this year, and I look forward to updating you on our continuing progress.

With that, I'll turn the call over to Julian to review our pipeline.

Thank you, Adelene.

We're very pleased with the progress we've made in our PI3 Kinase and heat shock protein 90 programs over the past few months, and we look forward to sharing data from both of these programs this year. This afternoon, I will review our pipeline with a folks of IPI-145, our potent PI3 Kinase delta gamma inhibitor. At the ASH meeting last December, we reported encouraging preliminary data demonstrating that IPI-145 was well-tolerated and clinically active across a broad rage of hematologic malignancies, with activity observed at each dose evaluated. Earlier this year, we defined the maximum tolerated dose at 75 milligrams b.i.d., and initialed five additional expansion cohorts at the 75-milligram dose level to broaden our patient experience.

With ASCO around the corner, we are entering one of our busiest, and one of my favorite times of the year. Two abstracts describing data from our ongoing Phase I trial of IPI-145 were accepted for presentation. Just to remind you, these are plain vanilla abstracts, since they include only the data presented at ASH. Both presentations at ASCO will incorporate updated data from the dose escalation phase, the fully-enrolled 25-milligram expansion cohort initiated in July of 2012 and newly-initiated cohort expansions at 75 milligrams.

The first presentation will occur on Sunday, June 2, will be a poster on patients with chronic lymphocytic leukemia and small lymphocytic lymphoma, or CLL and SLL. We plan to provide updated data on the following. Safety, lymphocytosis, in terms of both onset and resolution, activity observed in terms of nodal responses and international working group criteria responses, and pharmacokinetic data. The second presentation, which will take place on Monday, June 3, will be an oral presentation on patients with lymphoma. Similar to the poster presentation, we will provide updated data on tolerability, activity observed in terms of partial and complete responses, and pharmacokinetics.

Taken together, we expect the two presentations to present data from over 100 patients with over 60 patients having been treated for at least two months, which is the time of the first standardized evaluation, for example CT scan, PET scan, or clinical evaluation. Of these estimated 100 patients, approximately 30 will be included in the CLL - SLL presentation, and the remainder will be included in an oral presentation on lymphoma and other diagnoses. Looking ahead, we are focused on refining our development plans and registration strategies, which includes planning for both monotherapy and combination trials. We expect to initiate at least two new Company-sponsored trials in hematologic malignancies this year, and we'll provide additional details on our development strategy when patient enrollment from these trials begins.

As Adelene mentioned, an investigator-sponsored trial of IPI-145 is also now underway. This trial, which is being conducted by the Sarah Cannon Research Institute, is a Phase I-b open labeled dose escalation trial of IPI-145, in approximately 70 patients with B-cell, NHL, CLL, and T-cell lymphoma. The study is designed to evaluate safety, pharmacokinetics, and clinical activity of IPI-145 in combination with rituxan, bendamustine, or all three therapies. This first investigator-sponsored trial could help inform the design in potential combination studies in the future, and highlights the enthusiasm for 145 that we are seeing from thought leaders.

Beyond hematologic malignancies, there's also strong biological rationale for developing IPI-145 in inflammation. Today, we announced that the ASPIRA trial is open for enrollment. This is a Phase II double-blind placebo-controlled designed to evaluate the efficacy, safety, and pharmacokinetics of three different dose levels of IPI-145 twice daily, plus methotrexate, versus placebo plus methotrexate in more than 300 patients with moderate to severe rheumatoid arthritis.

The primary efficacy end point of 12 weeks is the ACR20 response rate, which is defined as the proportion of people who achieve at least 20% improvement in the American College of Rheumatology response criteria. If the data are positive, this trial could enable us to move directly into Phase III development. We are also conducting a Phase II-a trial of IPI-145 in patients with mild allergic asthma. We expect to provide an update of this trial in the second half of this year.

In addition to our clinical efforts, we have an ongoing internal research program directed to identifying additional PI3 Kinase inhibitors that will complement IPI-145. We are continuing to advance our second PI3 Kinase product candidate, IPI-443, through preclinical studies to enable Phase I development. IPI-443 has the potential to provide us with important strategic flexibility and optionality, as we pursue our dual development pathways for our PI3 Kinase franchise in both hematology and inflammation.

I will now provide an update on the two ongoing trials of our potent and selective Hsp90 inhibitor, retaspimycin chloride. The first trial is a Phase II double-blind randomized placebo-controlled trial of docetaxel plus retaspimycin, versus docetaxel plus placebo in patients with non-small cell lung cancer. This trial of 226 second or third line patients, who are heavy smokers and who are naive to docetaxel treatment has two co-primary end points, overall survival in the total population, and overall survival in patients with squamous cell histology. A secondary endpoint is an undisclosed prespecified biomarker, which was discovered in our Phase I-b study. As Adelene noted, we now anticipate reporting top line data from the study in the second half of 2013.

The shift in timing is due to the rigorous conduct of the study. This trial includes a review of all safety events by our Data Safety Monitoring Board, central review of histopathology, and analyses of a validated biomarker assay in a CORE-certified lab. The additional time is required to ensure that the requisite number of events is coupled with our correlative studies, and our biomarker analysis.

Our goal is to determine whether there's a meaningful survival benefit in a population that warrants proceeding to a registration-enabling study. It's important to emphasize that since this trial is blinded, we do not know how the event rates may differ between the treatment arm and the placebo arm, so there is no rationale for making inferences about the outcome of the trial based on the timeline.

Our second trial in our Hsp90 program is an exploratory Phase I-b/II trial evaluating retaspimycin plus everolimus in non-small cell lung cancer patients whose tumors have activating KRAS mutations. We are still in the dose exploration phase of this trial and we anticipate providing an update from this study in the second half of this year, as well. In summary, we continue to make strong progress advancing our pipeline, and look forward to reporting data this year.

With that, let me turn the call over to Larry to review our financial results.

Thank you, Julian.

Infinity is in a strong position, with a promising pipeline of approximately $300 million in cash and investments and worldwide commercial rights to all of our programs. Since we no longer had a strategic relationship with Purdue, in April we supported a secondary offering, which enabled them to fully exit their position of approximately 11.4 million shares. As a result of this secondary offering and the restructuring of our strategic relationship with them last year, Purdue no longer has any product rights, but retains royalties on future sales of our PI3 product candidates, ranging from 4% worldwide, going down to 1% in the US only, as we pay back through royalties the $260 million which they contributed in support of Infinity's research and development projects during the time of our strategic relationship.

I will now briefly review our financial result for first quarter of 2013. We did not record any revenue during the quarter. Total revenue was $25.2 million for the same period in 2012, which was composed of $24.2 million for reimbursed R&D services, performed under our previous strategic alliance with Purdue Mundipharma, and $1 million from amortization of deferred revenue, associated with the grants of rights and licenses under this alliance.

R&D expense for the quarter was $20.2 million, compared to $28.6 million for the same period in 2012. The decrease in R&D expense in the quarter compared to the same period in 2012 was primarily related to the discontinuation of development of the Company's Hedgehog pathway program. G&A expense $7.4 million for the quarter, compared to $6.8 million for the same period in 2012. The increase in G&A expense in the quarter, compared to the same period in 2012, was primarily due to higher stock-based compensation expense.

Net loss for the quarter was $27.3 million, or basic and diluted loss per common share of $0.57, compared to $10.7 million or basic and diluted loss per common share of $0.40 for the same period in 2012. As of March, 21, we had total cash, cash equivalents, and available for sale securities of $303.1 million, compared to $326.6 million at December 31, 2012.

In the absence of additional funding or business development activities, and based on our current operating plans, we expect that our current cash investments provide us with a cash runway into 2015. Importantly, we believe we have the financial resources required to see all of the ongoing trials of our product candidates, including the trials announced today, through the next key inflection points.

With that, I'll turn the call over to our operator for questions.

(Operator Instructions)

Our first question comes from Cory Kasimov with JPMorgan. Your line is open.

Hi, this is Whitney in for Cory, thanks for taking the questions. One, you mentioned in-licensing. Can you talk about what candidates you might be looking for there? Is that sort of with the eye of combo studies with 145?

And secondly, for the Hsp90 program, in the ongoing trial you said you want to see a survival benefit. What do you think you need to see there in order to take it forward?

So I'll start with the in-licensing since I mentioned that, and then turn it over to Julian for your second question. On in-licensing, we're really looking for something that will expand the portfolio. We are not limiting it to drugs that could be used in combination with anything in our existing pipeline.

The criteria that we apply is something that we believe has a truly differentiated profile, and the potential to serve a significant medical need. And so we look primarily at small molecules, we look primarily in oncology, and we're looking at things that are from the stage from late preclinical development, at a stage where it can be readied for IND-enabling studies, up through something that already has some proof concept in the clinic. The most important thing for us is our belief that it really has the potential to make a difference for patients.

And I'll address the question on lung cancer. As I noted, the trial is powered for overall survival in the total population, as well as survival in the squamous cell histology group. These are the primary end points. However, we have a series of nested analysis which include a pre-specified biomarker, which we are prospectively testing in this study as well.

And decisions going forward that would warrant the initiation of a registration trial will depend on the magnitude of benefit that we see, and the confidence intervals with which we can comfortably convince ourselves that it's further warranted that we initiate a Phase III registrational study. So we haven't commented on the specific statistics, and the statistical analysis plan, but we do have a rigorous process in place to make the best decision for patients going forward.

Great. Thanks for taking the question.

Our next question comes from Joel Sendek of Stifel. Your line is open.

I was wondering what -- a lot of companies were reporting data at the Lugano meeting, and it looks like you are referring to T-cell lymphoma data there. Is there anything you were originally planning to present at ASCO that you were holding, is it replicated at all, or whether it will the same information?

Obviously, considerable overlap in the time difference between the two meetings. Of course, just a few weeks. But the Lugano meeting will go into more detail, and I think we'll have perhaps a slightly updated version of our presentations, even from ASCO. And we'll have that opportunity of a few weeks more observational period to make those adjustments.

Okay, thanks. And then on RA, I'm just wondering if you can give us about any sort of timeline, as to when we might -- timeline around when we could actually see the data that comes out of that study that you're just starting.

I'd like to do that. I think, given that the trial is about 300 patients, we have modeled this out and expect data towards the end of 2014.

Great. Thanks a lot.

Our next question comes from Ian Somaiya with Piper Jaffrey. Your line is open.

Just a first question on the RA trial. Can you share with us the dosing of the trial? How is that going to compare to the cancer setting?

Sure. Just to remind everyone on the line that we did our Phase I in normal healthy subjects, that covered doses up through 10 milligrams of total daily dose, which included a cohort of 5 milligrams BID as well as a 10-milligram QD. That would be the upper level of treatment exposure in the RA patients. And we've selected doses lower than that to explore the full dose response range in RA patients.

The doses are also consistent with a modeling effort that we took from our rodent RA models. And time dose exposure calculations were made to mimic what level of delta inhibition we would need to see in RA patients. So it's consistent that with the rodent data, the preclinical data that we have as well.

Just given your intention to move into Phase III trials, if this trial is successful. Thinking about it from a commercialization standpoint, we're talking about two very disparate indications -- market segments. Should we be comfortable in potential pricing of these two different markets? And maybe not limiting the opportunity of one for the other?

That's a great question, Joel. And one that we think a lot about.

It will depend very much on what the ultimate dose is in both the human trials we're conducting, as well as the RA trial. And of course, if there's an appropriate relationship between the dose and the responsiveness and the positioning from a market perspective, we might take 145 forward in both.

We also will be evaluating, as Julian mentioned, our second candidate, IPI-443, and we should have in the same time frame some early data on that to see how 443 and 145 are similar or different. And that will give us, as Julian mentioned, the optionality from a strategic position to decide whether we direct those molecules towards different therapeutic areas. We will be generating the data that will allow us to optimize the portfolio over the next 18 to 24 months.

Just one last question on the data which was expected at the ASCO conference. Are you able to comment at all, and compare how the safety profile of your PI3 Kinase compares to some of the others in development at similar stages? Is there enough data to maybe make a comment on if there are significant advances or potential similarities in the adverse events profile?

Let me first say, it's very difficult to do cross-trial comparisons. Obviously, we don't -- we can never be sure that the entry criteria of patients is exactly the same. It's a Phase I setting, and so it can be different from drug to drug. With that being said, we will fully explain the safety data that we've observed, both in terms of the different doses and the different patient populations.

Thank you.

Our next question from Michael Yee with RBC Capital Markets. Your line is open.

This is John on behalf of Michael Yee. First, can you provide us on color for the enrollment progress for the newly-expanded cohorts, such as when it opened? And your observation of which cohorts are potentially enrolling relatively quickly, and which ones are taking longer than others, so that we can get a better idea of how much data we can expect at ASCO? And I have one follow-up.

The cohorts are enrolling relatively briskly, now that all the amendments are through. And obviously, the more prevalent diseases are being enrolled more quickly. That's just a function of the patients that show up in the clinic.

We are making concerted effort to see that all the cohorts are enrolled, and we'll provide more detail at ASCO. And I hope that answers your question.

Okay, great. And just as a follow-up, how much confidence do you have that IPI-145 will work in patients who have failed either Ibrutinib or GS-1101, such as, is there anecdotal or in vitro PK evidence that IPI-145 might work in these patients? As at this point, it is looking very likely that these other drugs will have been on the market one to two years before your drug.

It's a very fair point, and a burning question in our own minds. Let me say at the outset that the mechanisms are different. Inhibiting BTK and inhibiting PI3K, there's simply overlap in terms of B-cell receptor signaling, but they are independent mechanisms, and we are treating this molecule as an independent investigation.

And eventually, I'm sure we will have data, we will be seeking data on Ibrutinib-tolerance or patients who progressed on Ibrutinib. And we hope that very much, that the independence of the mechanism will offer patients yet more options, more treatment options, in the event that patients have experienced Ibrutinib or progressed on Ibrutinib.

In your ongoing trials, do you know if there are any patients who have failed either Ibrutinib or GS-1101?

I can't comment on any specific patients. Again, we'll present the patient backgrounds at ASCO. And I don't want to sort of fore-run the opportunity at ASCO to present our data in totality.

Okay, thanks.

Our next question comes from Navdeep Singh of Goldman Sachs. Your line is open.

This is Lisa in for Navdeep. Just two quick questions. Any updates on how potential partnership discussions are going? If partnership is still in the picture, would it be realistic to obtain one before the expanded cohort data?

And the second question is, can you walk us through your confidence in the NSCLC program? Great. Thanks.

This is Larry and I'll take the first question, and then turn it over to Julian for the latter. In terms of partnering, our position is that we have all of the resources, financial and operational, in order to see all of the existing programs through the next key inflection points. And one of them just started today, which is the initiation of the powered Phase II study, which as Julian pointed out, would likely not be out until the end of 2014.

And so we have said that we're certainly having ongoing discussions. We're open to discussions. We certainly want to have partners kick the tires and if there's a partner that would significantly accelerate, broaden, improve the campaign we have now in hemomalignancies, as well as inflammation, we're certainly open to that discussion. But we don't have plans or guidance associated with concluding any partnership in the time frame you're speaking of.

With regard to the lung cancer trial, let me remind you this trial was initiated based on signals that we saw from an open labeled I-b trial in a relatively few number of patients, I think 26 patients, were treated with a docetaxel Retaspimycin combination. And where we saw nice response rates, and particularly all the responses were in heavy smokers, and we saw responses in patients with squamous cell histologies.

My confidence is based on that the trial was rigorously designed, rigorously blinded, and rigorously conducted through the treatment period. And I am also very confident that it will be rigorously analyzed for its end point.

As for the outcome, of course, being blinded to the treatment arms, I can't really handicap what outcomes will be. But I feel confident that the way in which we've set up the trial and our belief in the biomarker, we have set up these series of analyses that, should there be a clinical benefit in a sub-population, we will find it. And based on the magnitude of benefit, it will guide us to future studies, including registration studies, for this patient population, which has an unmet need as you appreciate.

Any updates on those series of analyses? Will you provide us with any updates?

I think we have never planned to do an interim analysis. We do one analysis. It will be a final analysis and we'll be reporting top line data later this year, and we'll seek a medical meeting to appropriately plan all of the data. It's a big undertaking. And I think we're geared up and ready to do so.

Great, great. Thank you so much.

Our next question is Jason Kantor with Credit Suisse. Your line is open.

This is Jeremiah filling in for Jason. I know it's still early, but have you been able to identify any lymphoma patients or populations that have differentiated response with IPI-145 over other similar agents?

You're right, it's early and we don't want to comment on again fore-run the ASCO opportunity to talk about our data. I will remind you that what we had seen as of the ASH data was activity in CLL, in non-Hodgkin's lymphoma, Hodgkin's lymphoma, mantle cell lymphoma, and further activity T-cell malignancies as well. We'll provide a full update at the ASCO presentations.

And as a follow-up question to a question that was asked earlier, but are you looking at potential novel-novel combinations with IPI-145? And if so, which drug classes look most interesting to you?

It's a great question, we are thinking about this all the time. Certainly in the lab, we are exploring these principles and basic mechanistic combinations that make sense. And then there's a question of, can we contemplate the combination of experimental agents? And of course, we're working on this.

Obviously, the least risky combination would be with an approved drug with a well-known side effect profile. And going down to development stage compounds that were targeted agents, non-cidal mechanisms. And obviously, the riskiest would be development stage that was cidal, because of the potential safety profile.

And to underscore that we announced the combination with rituximab, bendamustine, and the triplet as well -- today.

Thanks a lot.

(Operator Instructions)

Our next question comes from Eun Yang of Jefferies. Your line is open.

IPI-145 in hematologic malignancies, you said five expanded cohorts, when do you expect to complete the patient enrollment of over 150 patients? Is that going to be done by ASH, so we may be able to see all the data?

We strongly hope that, as enrollment continues, that we would be in a good position at ASH to really report more mature data. It's our intention to try to enroll all five cohorts, again, approximately 30 patients per cohort, and explore additional malignancies, including the myeloproliferative neoplasms, for which we don't yet have any data.

So with that progress, when do you expect to start a pivotal study or pivotal studies for this program?

So we have mentioned only that we will start three additional trials this year. You can infer from that, that obviously we're thinking along the lines of important trials that would lead us towards a registration path. But I don't want to, again, preview any registrational path, without conversations with regulatory authorities, with FDA and European authorities, as well as Japanese authorities. And we'll comment with greater precision when we initiate those studies.

That's fair. And then based on your comments, is it fair to assume that we are going to see 75 milligram BID dosing data at ASCO this year? Some patients' data -- correct?

We have enrolled a number of patients, as Adelene pointed out, and to the extent that they're evaluable and cleaned in our database and we have source-verified the data. We will be presenting the most updated data set we have at ASCO. So you can almost view as ASCO is kind of the midterm for our year, and ASH will of course be the final, where we have the most mature data for 2013.

Sure. One last question. IPI-443, are you still on track to file IND in the second half of this year?

We've mentioned that we're conducting the preclinical activities for IPI-443. We have not guided as to when we're exactly filing for first in human studies.

Okay, thank you.

Our next question comes from Greg Wade of Wedbush, your line the open.

Good afternoon, thanks for taking my questions as well. Julian, with respect to the development of 443, what was engineered out of 145 or into 443 to differentiate it? Thanks.

So in fact IPI-443 has very similar properties to 145. We did not find any deficiencies with 145 per se, so there was no need to make an improved molecule. 443 is really designed to also be a delta gamma inhibitor.

It has some slight preferences for the gamma, maybe the window between delta and gamma are somewhat tighter, at least in biochemical data. But it remains to be seen whether 443 is further differentiated pharmacologically from 145. As I said, as Adelene pointed out, actually 443 was designed to give us strategic optionality in terms of picking indications so that we can both fully explore inflammation and hematology indications.

And just as a quick follow-up, with respect to the 145 studies, at what dose would you expect to have maximal inhibition of the target beyond which you'd be looking at some off-target effects? And thanks for taking my questions?

Which target are you referring, since it's targeting delta and gamma? We are maximum inhibiting delta at doses of 25 milligrams and above, to the tune of greater than the IC90. And above the IC50 for gamma at 25 milligrams, and we will present the PK-PD relationship for 75-milligram dose at ASCO.

Okay. And just one last quick question. What was the DLT preclinically with 145?

We had 2 DLTs at the 100-milligram. One was a grade-3 rash, and the other was a grade-3 ALT elevation in the hematologic malignancy cohort.

Thanks.

Thank you. I'm showing no further questions in the queue at this time. I'll hand the call back to Adelene for closing remarks.

Thank you everyone for joining us today. We're looking forward to presenting our updated data on IPI-145 at ASCO next month, and hope to see many of you there. Thank you.

Thank you. Ladies and gentlemen, this concludes the conference for today. You may all disconnect, and have a wonderful day.