Infinity Pharmaceuticals Inc (INFI) 2014 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 2014. My name is Stephanie, and I will be your operator for today. 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, Mr. Jaren Madden, Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Thank you Stephanie. Good afternoon everyone. Welcome to today's call to discuss our recent business progress and review our first quarter 2014 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer, Julian Adams, President of R&D, and Larry Bloch, Executive Vice President, CFO, and CBO. 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 Infi.com.

Please note 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 is possible that our actual results may differ materially from what we predict today, due to the considerations described in the Risk Factor section of the quarterly report on Form 10-Q for the first quarter of 2014 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 not taking on an obligation to do so.

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

Good afternoon everyone. Thank you for joining us. On our last call we summarized the very encouraging clinical data from IPI-145, our PI3 kinase delta gamma inhibitor, and Infinity's lead program. These data show that IPI-145 is highly active across a broad range of hematologic malignancies, and on the basis of these data, we are now in registration focus DUETTS, our worldwide development program in hem malignancies.

We have a three-part vision for the development of IPI-145. The first component is to enable a rapid path to marketing approval for IPI-145 as a monotherapy in both indolent and non-Hodgkins lymphoma, or iNHL and chronic lymphocitic leukemia, or CLL, through our DYNAMO and DUO trials respectively. The second component of our vision is to develop targeted chemo-free treatment regiments for patients with hem malignancies. We are enabling this strategy by developing IPI-145 in combination with existing non-chemotherapeutic standards of care. To drive this strategy forward we will be initiating DYNAMO +R, our Phase 3 trial of IPI-145 in combination with Retuximab in iNHL. While eliminating the need for chemotherapy-based treatment would represent a significant advance, patients are still and importantly in need of a cure. In an effort to achieve this, the third component of our vision is to combine IPI-145 with other novel targeted agents. We have an extensive translational research program, and have identified several potentially synergistic combinations of novel therapies, which we will describe in conjunction with announcements regarding additional development plans.

The final component of our vision is directed to our ultimate goal of achieving cures in these patients. This year will also be critical for the development of our inflammatory diseases, and we anticipate reporting top line data from two studies by year-end. These include ASPIRA, a Phase 2 study of IPI-145 in patients with moderate to severe Rheumatoid Arthritis, and our Phase 2a exploratory study in patients with mild allergic asthma. The results of these two studies will help determine the best path forward of IPI-443, our second PI3 kinase delta gamma inhibitor.

We are continuing to build our team and capabilities, reflecting our growth and progress as a late stage development company. Earlier this year we promoted Dr. David Roth to Chief Medical Officer from Senior Vice President of clinical Development and Medical Affairs. To most effectively advance our expanding portfolio of clinical trials, we also recently hired Ross Pettit, a Senior Vice President Development Operations, and Dr. Kai Chan as Vice President of Global Medical Affairs. Ross has over 25 years of experience in drug development, operations and commercialization, and was most recently Vice President, Clinical Operations at AMAG Pharmaceuticals. Kai has over 10 years of experience in the pharmaceutical industry and was previously the Head of European Medical Affairs at ARIAD Pharmaceuticals.

In addition, we appointed two new members to the Infinity Board of Directors, who bring important expertise as we approach potential regulatory approval and commercialization of IPI -145. Dr. Jose Baselga, physician-in-chief at Memorial Sloan Kettering Cancer Center is the newly elected President of AACR, and a globally recognized leader in oncology including the PI3K pathway. Jeff Berkowitz, President of Walgreens Boots Alliance Development brings to Infinity substantial experience in global healthcare commercial operations and reimbursement.

These important additions to our team enable us to expand and accelerate the development of IPI-145, including our goal to finish this year with a total of 10 trials to support initial and subsequent registration. Seven of which will be Phase 2 or Phase 3 studies. The combination of an active well-tolerated drug, robust development strategy, and strong team has positioned us well to engage in discussions around strategic partnerships.

In summary, we are well on our way and remain committed to our mission of delivering important new medicines to patients that make a meaningful difference in their lives. Now I will turn it over to our President of R&D, Julian Adams, to walk through our development programs.

Thanks. As Adelene mentioned, we have generated data demonstrating encouraging activity and tolerability of IPI-145 across a broad range of hematologic malignancies. Adverse events have been predominantly low grade or asymptomatic, manageable and consistent with the co-morbidity associated with these diseases. On the basis of these data, we have initiated a global development program with potential registration studies in iNHL and CLL, where there remains a significant need for better treatments.

DYNAMO is our first registration enabling study. This Phase 2 trial is expected to enroll approximately 120 patients with refractory iNHL. IPI-145 is administered at a dose of 25 milligrams twice daily, and the primary endpoint is the overall response rate. Let me remind you that these patients have exhausted all current therapies. Therefore IPI-145 is intended to be a rescue treatment for these patients. Building on this potential patient benefit we believe the initial investigation of IPI-145 as a monotherapy in the refractory setting will help is to confirm its single-agent activity and potentially enable a rapid path to approval in commercialization upon consulting with the FDA.

Importantly, DYNAMO also builds on the foundation for additional development opportunities, in combination with anti-CD20 antibodies, like rituximab, as well as other therapeutic modalities. We are complementing our monotherapy strategy with a Phase 3 combination study DYNAMO+R, designed to increase the potential use of IPI-145 and relapsed iNHL. DYNAMO+R will be a randomized double-blind placebo controlled study comparing IPI-145 in combination with rituximab versus placebo plus rituximab. This trial also has the potential to serve as a confirmatory trial if IPI-145 earns accelerated approval based on the data from DYNAMO.

We plan to initiate DYNAMO+R in the second half of this year. The primary endpoint of this study is progression-free survival. To further expand the potential of IPI-145 in iNHL, we expect to initiate a Phase 2 trail in treatment naive patients later this year. We have prioritized the initiation of this trial along with DYNAMO+R as chemo-free regimens, which could be particularly meaningful in iNHL, where patients are being treated for many years.

Moving to our program in CLL, IPI-145 has shown encouraging activity in the relapse and refractory setting, as well as interesting early data in the treatment naive setting. We are currently enrolling DUO, a Phase 3 randomized open label study in approximately 300 patients with relapsed or refractory CLL. This registration supporting study is designed to evaluate the safety and efficacy of IPI-145 administered at 25 milligrams twice daily, compared to Ofatumumab with progression-free survival as the primary endpoint. Beyond iNHL and CLL, we have observed activity in additional populations, including those with T-cell and aggressive B-cell malignancies including the fuselage B-cell lymphoma.

Looking across our program and at the field more broadly, what I am most encouraged by is the potential for a total paradigm shift in the treatment of these diseases. We are participating in the development of precision medicines which could change the face of cancer treatment and displace chemotherapy. At Infinity, I am inspired by and committed to advancing our understanding of the biology of these diseases and the way in which they are treated. We have an extensive translation research effort internally, and with external collaborators focused on two areas. The first is to more fully understand the role of PI3 kinase delta and gamma inhibition, such that we can leverage the unique profile of IPI-145.

The second focus of our work is to identify synergistic combinations of novel targeted therapies, potentially enabling us to achieve minimal residual disease and possibly cure these patients. I look forward to the opportunity to present new translational research at the AACR Special Conference targeting the PI3 kinase mTOR network in cancer later in September. On the research side , our dedicated team of scientists has helped build a portfolio of additional PI3 kinase delta and/or PI3 kinase gamma inhibitors. We have identified IPI-443 as a second development candidate. Having both 145 and 443 gives us important strategic optionality, to optimally position our PI3 kinase delta, gamma franchise in oncology and inflammation.

After we analyze the data from our ongoing inflammation trials later this year, we plan to determine our development strategy for IPI-443. We believe we are in an excellent position to leverage the promise of IPI-145. To emphasize the strategy that Adelene and I have described, in the near term we are focused on gaining approval and achieving chemo-free regimens. Our longer term vision is to identify potential cures for these patients through our growing understanding of the biology of PI3 kinase delta and gamma inhibition in novel synergistic combinations. Beyond hematology, we anticipate data readouts from both of our trials in inflammation.

And with that, I would like to turn the call over to Larry to discuss the financials for our quarter.

Thanks Julian. We continue to be in a strong financial position to execute on our strategic development plans. As of March 31st, 2014, we had total cash, cash equivalents, and available for sale securities of $172.1 million, compared to $214.5 million at the end of 2013. In addition, we have in place a $100 million debt facility with Deerfield announced earlier in the first quarter of this year, which provides important financial flexibility and allows us access to these funds through February of 2015 without any obligation to do so. To date we have not drawn down any funds under these facility agreements.

I would now like a to provide an overview of our financial results for the first quarter of 2014. R&D expense for the quarter was $34.5 million compared to $20.2 million for the same period last year. G&A expense for the quarter was approximately $6.8 million compared to $7.4 million the same period last year. And net loss for the quarter was $42.3 million, or a basic and diluted loss per common share of $0.87, compared to $27.3 million, or basic and diluted loss per common share of $0.57 for the same period last year. Our financial guidance for 2014 remains unchanged.

In addition to our strong financial position, we have full ownership of worldwide rights to IPI-145, and the opportunity to evaluate value-creating future partnerships. Our key objective would be to access the financial and operational resources necessary to accelerate and expand our global development of IPI-145.

So in closing we have very encouraging clinical activity with IPI-145, providing the basis for potential registration trials now underway, and a vision to develop chemo-free regimens with an aspiration to achieve actual cures for these patients. We also have strong Intellectual Property protection through 2030. All of these components taken together provide a solid foundation on which we are building a fully-integrated biotech company.

With that, we will open the call up for Q&A.

Thank you. (Operator Instructions). Our first question comes from Cory Kasimov with JPMorgan. Your line is open.

Hi, guys, this is actually Whitney on for Cory today. Just wondering I guess first off, if you can give us any updates on DYNAMO and DUO enrollment, and whether they are tracking as expected?

The trials are in fact tracking as expected. I can't give you precise numbers, but what I can tell you is we have accounted for enrollment. In fact, I just spent a day with investigators, we had investigators from Australia and New Zealand and North American investigators, and there is a great deal of enthusiasm for the participation in these trials.

Got it. And then in terms of a novel novel trial start, what are the rate limiting steps to get that off of the ground?

I'm sorry. Can you repeat the question?

The timeline to a novel novel combo trial start, what are the rate limiting steps, or what do you still need before starting a combination trial?

So some of these trials are in development, protocol development. We have reviewed the regulatory requirements, and believe we have all of the information that we need. We will be announcing the start of those trials once they are ready to go.

Got it. Thanks for taking the questions.

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

Hi, thanks. This is actually John on for Michael Yee. So for the DYNAMO trial in iNHL, I recall it requires six month follow-up after the last patients. So given your comments it is tracking, the enrollment is tracking as expected, do you have any updated thoughts on the timing of this study? Would it be a 2015 event in your view?

Again we are not providing specific guidance as to when we will complete enrollment, and have a read out from this study. What I can tell you is we are encouraged that the study is progressing well.

And then for the DUO study and CLL, is there an interim analysis built in like PSYC's resonate?

We are again not commenting on the specifics of the conduct of the trial. We anticipate that there are challenges to enrollment in that trial in North America. We have accounted for that by having this trial be an international study, and the majority of the patients will be enrolled primarily in Europe, as well as southeast Asia.

Okay. Then just one last question. I think at the beginning of the year I remember you mentioned that potential combination approaches for aggressive lymphoma, such as DLBCL, not necessarily novel combinations, but with 30 approved agents, so what are your updated thoughts here, and what is the gating factor to start these studies?

So we think a lot about this. We have an encouraging signal, but as you correctly point out, as a single agent it is not sufficient to go ahead with a single agent. We are reviewing in the laboratory, doing a lot of combination studies to try to pick the optimal combinations. You can imagine that given all of the agents in development, and even approved agents pair-wise combinations could lead to multiple trials. What we are trying to do is prioritize what we think will be the best trials to select going forward.

Great, thank you.

Our next question comes from Joel Sendak with Stifel. Your line is open.

Hi, thanks. Had a couple of questions. First of all can you go over any data you have at ASCO? And then with regard to the retux and combination study, I was expecting that earlier that the second half of this year. Was that expectation wrong, or was there a bit of a delay there?

I don't think we provided guidance that it would be earlier in the year. Appreciate that because it is a registration study, and we have had a lot of consultations about FDA and EMA, we are taking great pains to make sure that we are running a trial with the appropriate endpoints and trial design, and are making sure that it is all harmonized for a global registration. To your first point, we have two abstracts at ASCO, but they are not data abstracts. As the abstracts are describing the details of the DYNAMO and DUO trials.

Understood. Thank you.

Our next question comes from Mike King with JMP Securities. Your line is open.

Thanks for taking the questions, guys. Just a couple of questions. Still want to follow-up a bit on the novel novel thought process that you are undertaking?Just curious if you can be more specific? Just trying to think about, you obviously cannot access competitor molecules like a BTK or an ABT-199, et cetera, or am I correct in that assumption? And secondly how would you run those trials, would they be run as Infinity-sponsored trials, or more along the lines of investigator-sponsored studies?

Thanks for your question, Mike. We think obviously a lot about this, and we think this is an opportunity to leap-frog and bypass trials that have chemo-containing regimens. As an example we had an abstract at ASH delineating in-vitro combination with Ibrutinib. So we saw profound synergy in a number of different cell lines. That represents the kind of work we are doing preclinically. I remind you that is Ibrutinib is in fact on the market, is commercially available. That is not an issue. With regard to novel novels, where the two agents are not approved, there is a very specific FDA guidance around that, and that requires us working us cooperatively were with the other sponsor. We have our eyes open, and are very much desirous of doing such collaborations.

Those collaborations, they could either be part of a strategic relationship, and those could be arm's length collaborations, where we just work with other innovators and put our drugs together for the FDA guidance that Julian reference.

To come back to Julian's point about if you were to do something with Ibrutinib for example, you would have to actually purchase the Ibrutinib for any kind of study in humans, correct?

Or if in a collaboration. Pharmacyclics or J&J could provide Ibrutinib as part of the collaboration, and it would be a joint effort.

And then just a quick question on DYNAMO+R, maybe talk about what the outcome needs to look like for you to feel that there is a true differentiating effect between competitor and delta PI3K delta inhibitors?

So the Trial is being designed so that first of all it is approvable. It is of registration quality. Just as a background the anticipated monotherapy with Rituxan in this population is anywhere between 12 and 16 months. You can imagine there is a substantial improvement over that. The magnitude of improvement over that is important for registration. And then from a commercial and competitive nature, obviously we have to demonstrate that Best-in-Class PI3 kinase inhibitor is also revealed in this combination, and therefore our data should reflect that.

Okay. And then if I may just one quick question on 443 and then I will get off. I was under the impression that your development path for 443 was a bit more settled than it appears to be in the language in the release. Am I mistaken in that regard or has something served to change your strategic focus with 443?

So we have made sort of a portfolio decision. Wanting to concentrate our primary efforts on IPI-145 in hem malignancies. I will remind you that we are running both the ASPIRA trial and the asthma trial with IPI-145. We have enabled 443 in terms of its manufacture. And its IND preclinical tox studies. So that if IPI-145 should prove to have a significant signal in either of the inflammation indications, we are well-positioned to make a strategic decision around 443.

Thanks for taking my questions.

We have discussed in the past strategically if there is a compatible dose of IPI-145 in oncology and inflammation, we might take that forward, but we still have to see what signal we get at inflam, and at what dose, to determine as Julian mentioned, the portfolio of which molecule we take into inflammation.

Right. I get that. Thanks so much.

Thank you.

Our next question comes from Jason Cantor with Credit Suisse. Your line is open.

Good afternoon. This is Jeremiah filling in for Jason. Thank you for taking the questions. In regards to this going to the novel novel combinations that potentially you could be looking at. A lot of work is done with in-vitro experiments. How much clinical data would you need to get comfortable with a combination, and at what point are you willing to commit to that combination and move forward to larger pivotal studies?

Excellent question. Clearly you are quite right. We are first assessing the combination in in-vitro. There are mice models as well, but nothing will be as compelling as seeing those combinations in human clinical studies. For the synergy to be really reflected we would expect dramatically better activity than the single agents alone. So true synergy seen even in a Phase 1 setting. The magnitude of that benefit will drive the decision making towards pivotal studies.

And then you talk about using these novel novel combinations in iNHL. Is there a possibility that certain combinations could be more ultimal and specific? A subset of iNHL for example, for example, follicular, justhave one combination that is better? Do you plan on just going after one combination first for all types? Or are you expecting a specialized medium in--?

We have a broad preclinical program examining combinations in a variety of different malignancies, and depending on what we see and the clinical need, we will make those decisions for clinical development. Either specifically by disease histology or by other certain and driven by certain biomarkers. There is a lot more that goes into that than just a broad iNHL foray.

And last question is, you mentioned you hope to have 10 trials up and running by the end of the year, if I understood that right. Could you speculate on potentially how many ISTs could be expected by the end of the year?

Until the trials actually begin and we are not announcing ISTs, we have several in the works, but we would only make those announcements once the trial actually has begun. That is being mindful of the fact that the ISTs are being not conducted by the Company, but by the investigator and we don't want to prejudge when an investigator is going to be ready to initiate their study.

Thank you for taking the questions.

My pleasure.

Our next question comes from Katherine Xu with William Blair. Your line is open.

Hi, Good afternoon. I'm just wondering about the partnership. Are we still expecting a partnership this year? And do you have parallel plans in financing? That's the first question.

This is Larry. Thanks for your question. We have not provided guidance for partnerships in our annual 2014 guidance, and certainly working towards strategic collaboration is one of our priorities after initiation of the Phase 3 registration studies that Julian and Adelene discussed. We have multiple discussions ongoing. Obviously for us the credible thing is finding, inflecting the right partner who shares our vision for optimizing IPI-145 across the broad range of indications where it has shown activity.

It obviously is a unique and valuable asset in the fact that it is a Phase 3 program with IPL. To 2030, it has significant derisked and has significant and broad activity. In terms of additional plans, that was really the purpose of putting in the Deerfield financing is that this provides us with real optionality and financial flexibility, because we have the right, but not the obligation to access $100 million anytime over the next period between now and the end of February of 2015. We think we are in a fine position to be able to make that determination if and when to pull down those funds.

Can you give some indication on how the partnership discussions are going?

We are very pleased with the breadth and the depth of the discussions we are having. It is no surprise that after Anex was acquired that on all of the charts, I'm sure that you are intimately familiar with, IPI-145 is the most advance wholly-owned hemalogical oncology asset. It has advanced data. It is a rare and valuable asset, and it is being recognized as such in the pharmaceutical markets.

The iNHL program is very comprehensive, and you have a monitored single arm study, and you have DYNAMO+R following with the full approval of when you are starting the front line study as well. Where as for CLL, you only have just that one study. You have to stack up with RESONATE, which is from Pharmacyclics, who is going to report data at ASCO this year. So for CLL it looks like, not sure whether you could exceed Pharmacyclics in terms of potency and in profile, and also you are a few years behind. Just curious what the plans there are?Are you plan to have your partner to broaden that program in CLL going forward?

So in CLL as you mentioned we do have DUO, so the first trial that will get us approved, and that creates optionality for being able to combine with the anti-CD20 therapies, similar to the design of RESONATE if you wish. However we have begun also to enroll patients who have progressed well in ibrutinib, and so we are collecting data and still continuing to learn from our clinical experience within CLL. What I can tell you and what we reported at ASH is that resistance to ibrutinib is not cross-reactive to IPI-145 treatment.

And as you mentioned we do have a comprehensive program in iNHL, because we are really building on the strongest monotherapy data that has been shown in that disease across a number of different inhibitors, across a number of different targeted mechanisms. That's what we are really focused on, to really win in indolent non-Hodgkins, and our vision for CLL is to be the best PI3 kinase, but we recognize it is a more crowded space. We are really trying to seize the opportunity in indolent as our top priority.

Great, and one last question if I may. I'm just curious Julian you mentioned a few times about a potential cure of the diseases. Just wondering from a preclinical or a clinical level, do we know from a scientific aspect what is the threshold to achieve so that you could actually potentially achieve a cure?

The clinical and scientific community are very much now focused on MRD and MRD negativity. Really undetectable disease including in the bone marrow. There is a lot of interest of that in CLL, there was an FDA workshop last year in this regard, and a similar effort is being mounted and for indolent lymphoma as well.

Thank you.

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

This is Lisa in for Navdeep. Thanks for taking the question. Given your cash position, do you believe now is the appropriate time to secure a commercial partner for IPI-145?

This is Larry. Thanks for your question. We don't feel that it is a driver for securing a potential partner. We think the fact that we are now in registration-enabling studies, and as Julian and Adelene pointed out, we are enabling the novel novel combinations. Now is a point where a partner, both financial and operational resources, could help broaden the IPI-145 clinical campaign. That is really the driver for accessing the appropriate partner. We want to get the right partner who shares the vision for IPI-145, who also importantly shares our mission, and is willing to support our mission to help us continue to develop as a fully-integrated biopharmaceutical company, including having an important commercial role in important commercial markets.

Got it.

That's the process we are undertaking this year.

Got it , and what are your thoughts on the early launch commentary with Pharmacyclics and Group Invest, and what does that mean for the US potentially third to market?

We are not in a position to comment on others' progress, so I think that is a question better directed to the Pharmacyclics and Janssen team.

Okay. And then lastly what are your thoughts on 145 activity in T-cell lymphoma, and could we expect any registrational quality studies? Thanks.

We are the first to show a targeted agent has in the PI3 kinase class has demonstrated clear activity in T-cell lymphomas. It is a very challenge disease, because particularly patients on our study who were heavily pretreated, some patients getting as many as 10 or 11 prior treatments. We saw a very advanced population with patients progressing even within a month of their last, while on their last therapy. What a we need to do is to determine whether monotherapy is appropriate for these very aggressive diseases, and if not, what is the best approach to enable a combination therapy, and which combination specifically in T-cell. There are a few approved agents you know, there is chemotherapy in that setting, but there are also H-stack inhibitors. We are still in the planning stages and discussion stages with key opinion leaders on how to enable that.

Great, thank you.

(Operator Instructions). Our next question comes from Eun Yang with Jefferies. Your line is open.

Thank you. Question on the DUO study. Julian, you mentioned that patient enrollment has been challenging in North America. Can you give us the reasons why it has been challenging?

I didn't say it was challenging. I say we expect it to be more challenging, given the fact that there is now a treatment option from Pharmacyclics and J&J with the commercial availability now of Ibrutinib.

I see, thank you.

We had always considered that, and had planned that the majority, probably 80% of our enrollment will be ex-US. We are enrolling well so far in the US, per plan.

Okay. And then another question on the DUO study. When you look at Gilead as an [inaudible] they did it in combination with Rituxan, and I was wondering what your rationale behind going for monotherapy versus a combination, and for CLL would a kinase might be better with a combo than a single agent?

Well, we believe our data are superior based on our Phase 1 data. Are you talking about two different lines of therapy. In the relapse refractory setting in DUO for CLL, we believe that the strength of our data support a monotherapy head-to-head study of, versus Ofatumumab.

Some of the physicians we spoke with they say over time it is really not a good comparison, because it is not being used that much.

However, it is a very adequate regulatory comparison to establish our fastest path to approval. I agree with you that it is not the end game. It is the beginning of our investigation.

Alright. Thank you.

And we have harmonized this opinion internationally.

Thank you.

Thank you. I am showing no further questions. At this time I will now turn the call back over to Adelene Perkins for closing remarks.

Thank you everyone for joining us today. We look forward to providing further updates on IPI-145 in the coming weeks and months. Operator.

Thank you. Ladies and gentlemen, that does conclude today's conference. You may all disconnect. Everyone have a great day.