Infinity Pharmaceuticals Inc (INFI) 2014 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 2014 financial results. My name is Candace, and I'll be your operator for today's call.

(Operator Instructions)

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, Miss Jaren Madden, Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Thank you, Candace, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our full-year 2014 financial results.

With me here today are Adelene Perkins, President and Chief Executive Officer, and Larry Bloch, Executive Vice President, Chief Financial Officer and Chief Business Officer. Julian Adams, our President of R&D, is traveling and unable to join us today. 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 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-K for 2014.

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 that obligation to do so.

Now, I'd like to turn the call over to Adelene.

Thanks, Jaren. Good afternoon, everyone, and thank you for joining us.

At Infinity, we are working to realize our vision of developing better treatments for patients with blood cancers. Our lead molecule duvelisib has demonstrated a high level of clinical activity across a broad range of hematologic malignancies. Entering 2015, we have four important pillars in place to help further advance our goal of bringing duvelisib to patients.

These include: first, a product candidate with the potential to become a first-in-class PI3 kinase delta gamma therapy; second, a global partnership with AbbVie for duvelisib in oncology that enables us to accelerate and expand the development of duvelisib, and ultimately, the potential to expand our commercial reach; third, the anticipated completion this year of patient enrollment in DYNAMO and DUO, our two registration-focused trials in indolent non-Hodgkin lymphoma and chronic lymphocytic leukemia, respectively; and fourth, a strategy to develop duvelisib in combination with other novel targeted agents, including AbbVie's Bcl-2 inhibitor, venetoclax, also known as ABT-199. And, we have dedicated team of citizen owners who are working every day towards this vision.

In Julian's absence, I'll briefly review our development program for duvelisib. We are continuing to enroll patients in DYNAMO, our Phase 2 monotherapy study designed to enable registration, which is expected to enroll approximately 120 patients with refractory iNHL. The primary endpoint of the study is overall response rates.

We hope that positive data from DYNAMO will support establishing duvelisib as the best oral therapy for the treatment of iNHL and could provide a compelling rationale to seek accelerated approval. We expect to report top-line results from this study in the second half of the year.

Patients enrollment is also going well for DYNAMO+ R, a Phase 3 randomized double-blind placebo-controlled study. Comparing duvelisib in combination with Rituxan to placebo, versus -- plus Rituxan in patients with relapsed follicular lymphoma. This trial is expected to enroll approximately 400 patients and can serve as the confirmatory study for DYNAMO.

Our enthusiasm for duvelisib in iNHL is based on maturing Phase 1 data in patients with relapsed/refractory iNHL, most recently reported at the ASH meeting last December. In this study, duvelisib demonstrated an overall response rate of 72%, including a 33% complete response rate among 18 patients who received duvelisib, dosed at 25 milligrams twice daily, which is the dose being used in our registration study. This is the highest response rate that's been reported to date with any monotherapy in iNHL.

We are also encouraged by the early durability data. The median progression-free survival and median overall survival had not yet been reached, with 69% progression-free survival and 89% overall survival for patients at 24 months. In terms of the safety profile, the majority of adverse events were Grade 1 or 2, reversible and/or clinically manageable.

Given the strength of our data in relapsed/refractory patients, we are also evaluating duvelisib in the front-line setting. We have recently initiated a Phase 1b/2 study in patients with previously untreated follicular lymphoma, designed to compare the safety and activity of duvelisib plus Gazyva to duvelisib plus Rituxan. We are also planning to initiate two new studies in patients with iNHL this year, and we look forward to providing more details as we move closer to beginning these studies.

Turning to our second indication, CLL, we are continuing to enroll patients in the DUO study. This trial is designed as a registration-supporting Phase 3 randomized open-label study in approximately 300 relapsed/refractory patients, and will evaluate the safety and efficacy of duvelisib compared to ofatumumab. We expect to complete enrollment in the second half of 2015.

DUO is supported by encouraging Phase 1 data, which showed an 83% nodal response rate and a 57% overall response rate. We also saw one complete response, which is uncommon for monotherapy treatment. The majority of adverse events seen in these patients were Grade 1-2, reversible and clinically manageable. As with iNHL, we also seeing early evidence of durability in CLL, with 59% progression-free survival and 63% overall survival for patients at 24 months.

While we're encouraged by our monotherapy data, we are anticipating the evolution of the treatment landscape for CLL. As patients who relapse on ibrutinib therapy tend to have an aggressive form of disease, we believe there will be a tremendous medical need for new effective treatment options for these patients. At ASH, we reported early evidence of activity in patients previously treated with ibrutinib.

Based on these data, we have recently initiated a Phase 1b clinical study of duvelisib in combination with Gazyva in patients with CLL, whose disease has progressed following treatment with a BTK inhibitor. We believe that targeted combinations may have the potential to provide patients with effective durable treatment options and liberate patients from chemotherapy.

In addition to the two studies of duvelisib in combination with Gazyva, now underway, we expect AbbVie to initiate the first clinical study of duvelisib in combination with venetoclax this year. This first study of duvelisib plus venetoclax is supported by pre-clinical data conducted in collaboration with Dr. Varsha Gandhi, at the MD Anderson Cancer Center in Houston, and will be presented in a poster on April 20, during the annual AACR meeting.

This work highlights our efforts to identify synergistic combinations of targeted therapies so that we can better leverage the unique profile of duvelisib with the hope of providing deeper and more durable responses for patients. This and the other new trials I described today are all part of the expansion of our DUETTS global development program to evaluate the therapeutic potential of duvelisib in patients with blood cancer across multiple indications and lines of therapy.

We expect 2015 to be an important year as we look to complete enrollment in both of our registration-focused studies, while expanding our development program in iNHL and CLL. With these efforts, we remain on track towards advancing our mission of building a sustainable, fully integrated biotechnology company. We look forward to this next stage of growth for Infinity and for duvelisib, as we work to develop better treatment options for patients with blood cancer.

I'll now turn the call over to Larry to discuss our financial for the quarter.

Thanks, Adelene.

We continue to be in a strong financial position to execute on our strategic development plan and to explore the broad potential of duvelisib. As part of our global collaboration with AbbVie to develop and commercialize duvelisib in oncology, we received an up-front payment of $275 million, and are eligible to receive up to $530 million in additional payments for the achievement of development, regulatory and commercial milestones.

Of this $530 million in milestone payments, $405 million are related to milestones through the first commercial sale of duvelisib. Including a $130 million milestone payment associated with the completion of patient enrollment in either DYNAMO or DUO. The remaining $275 million of the $405 million in potential regulatory filing and approval milestones through the first commercial sale are designed to fund Infinity's continuing investment in the duvelisib development program up to commercialization.

Now, I'd like to provide an overview of our financial results for the fourth quarter and year end 2014. At December 31, 2014, Infinity had total cash and investments of $333.2 million, compared to $214.5 million at December 31, 2013, and $379.5 million at September 30, 2014.

Revenue during 2014 was $165 million, which was composed of a one-time license fee of $159.1 million, associated with the strategic collaboration with AbbVie, and $5.9 million in R&D services. Infinity did not report any revenue in 2013.

R&D expense for full year 2014 was $143.6 million, compared to $99.8 million for 2013. The increase in R&D expense in 2014 compared to 2013 was primarily due to higher clinical development expenses related to duvelisib. General and administrative expense was $29.3 million for the full year 2014 and $27.9 million for the full year 2013.

Net loss for the full year 2014 was $17.4 million, or a basic and diluted loss per common share of $0.36, compared to $126.8 million, or a basic and diluted loss per common share of $2.64 for 2013.

In January, we provided financial guidance for 2015, which remains unchanged. We expect revenue for 2015 to range from $105 million to $125 million, based upon the anticipation of the $130 million milestone payment from AbbVie, associated with the completion of enrollment for the first to occur of either DYNAMO or DUO. We expect net loss for 2015 to range from $190 million to $210 million.

And, we expect to end 2015 with a year-end cash and investment balance ranging from $145 million to $165 million. This year-end cash and investment forecast is based on the Company's current operating plan and exclusive of any business development activities.

Our financial strength is important, and we are pleased to have a global strategic partnership designed to help fund the development of duvelisib, while also providing the opportunity to accelerate and expand the development program. With registration-enabling studies moving towards enrollment completion this year, a validated path to regulatory approval, and strong IP protection into 2030, we are well positioned to advance our vision of becoming a fully integrated biotech company that can deliver best-in-class medicines and make a meaningful difference in patients' lives.

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

(Operator Instructions)

Mike Lee, RBC Capital Markets.

Hello, thanks. This is John on behalf of Mike Lee. Just wondering, could you just provide a little more color on the pending combination study with venetoclax? Have you indicated the specifics, and also any details on whether it seems [t plus] one after the other or used in combination together? And who makes the primary decision at how these drugs are combined? Thanks.

Thanks, John. The important part about the study of combining duvelisib and venetoclax is that we've got strong pre-clinical data that we presented to AACR. The details of the exact clinical trial we'll disclose at the time that that trial is being started, and we are working collaboratively with AbbVie in designing the right trial.

Of course, the first trial will be focused on safety. So that's our primary objective is demonstrating that the two drugs can be safely combined. And we're still working with them on exactly what that patient population will be, and we'll describe that as the trial get started.

And also just on maybe the potential combination approaches whether it's sequence or combined on top of each other?

Again, that's a detail that we'll disclose at the time that trial is actually initiated.

Got it. Thank you.

Mike King, JMP Securities.

Thanks for taking the question, guys, and congrats on all the progress. Just a couple quick detail questions on some of the trials. I'm just wondering in follicular and the combination with Gazyva, since my recollection is Gazyva is only approved in conjunction with chlorambucil, how do we envision enrolling patients with newly diagnosed disease?

I'm not sure, Mike, that I understand your question. The trial that we have it's in, as you said, a newly diagnosed disease. It's duvelisib patients will be enrolled either on duvelisib plus Gazyva, or duvelisib plus Rituxan.

And it will allow us to see which of these anti-CD 20's are better in this patient population. And then from that, we'll go forward and design a controlled trial. Right now, we're just assessing both of these two agents.

No, I understand. But Gazyva is only indicated for a relapsed refractory setting, isn't it in combination with chlorambucil?

It doesn't need to have a label for the patient population that we're studying it in now. No, we're rolling the trial now.

Okay.

What we thought was important about the study was, there's interesting data about Gazyva. And obviously a lot of data out there on Rituxan, but we really thought it to be vigorously data-driven to basically have a head-to-head study to determine which is best in this patient population.

Right, okay. All right. Thanks for the clarification on that.

And then with regard to both the studies you've got, one study specifically for patients with CLL that relapse after treatment with Imbruvica. And then you also have the registration strategy in the relapsed refractory setting. I'm just wondering if someone were to -- how you differentiate the randomization to DUO versus the, I don't know if it has an acronym for the BTK failures, but how are you going to stratify those patients into one trial versus another?

The DUO trial, which is now enrolling, is for relapsed and refractory patients who have not previously been treated with a BTK inhibitor. So there's a very clear delineation. Those are non-overlapping trials.

And then the trial that we most recently announced is for patients to who have already progressed on any BTK inhibitor. It doesn't have to just be ibrutinib, and they'll be put on the duvelisib plus Gazyva.

Okay. And in and that population, will you be undertaking genomic analyses to see what mutations they may have?

Absolutely, yes. We have a very extensive translational medicine effort that we're looking to understand exactly which of those patients respond. As we have even in our phase 1 data, where we've treated patients who have progressed on ibrutinib, we've extensively profiled those patients.

Okay, great. Thanks so much.

Thank you, Mike.

Jason Kantor, Credit Suisse.

Great. Can you hear me? So I just was curious on the DYNAMO study. You made the statement that you're hopeful that this is going to establish it as best-in-class. What do you think you need to show both in terms of safety and efficacy in order to feel like you hit that bogey?

Sure. So we have a benchmark now with the data that has most recently been presented on idelalesib. And we're encouraged by the phase 1 data that we've generated which had a higher overall response rate, and a higher complete response rate than has been reported.

And so we think that gives us a cushion anywhere between the response rates that we saw in our phase 1 study and the response rates that were the basis for the approval of idelalesib. We think anything in that range on the efficacy and anything that might show a better tolerated treatment profile.

Right. I guess given it's hard to compare trial to trial, different patients and all that. But do you think with the number of patients you have potentially power to say the lower end of your confidence interval could be above what's been seen for idelalesib to be able to more strongly make the case that there could be superiority there given it's not a comparative study?

Jason, you're absolutely right. We have to be very careful with trials that are not head to head that we don't over extrapolate the data.

I think it provides a general reference point of what we're looking for. And the design of DYNAMO as a monotherapy single-arm trial is reflective of the fact that there are no drugs that have a full approval in this patient population.

So it's still being that there are no fully approved treatment options for these patients. And we need to show that there's a benefit over what would be the typical course of progression in those patients. But we're very careful not to go too far on direct comparison across trials.

What I can tell you is that of course we've powered the study such that we're comfortable with the 120 patients we have. If we see the kind of response rate and complete response rate that we're hoping to see, it would be -- and we've had the discussions with the regulatory agencies that with the responses we hope to see it, could be the basis for an accelerated approval.

And then finally, I think you guys mentioned that you're not planning to take the [Inflam] program forward without a partner. Could you speak to what sort of interest there might be out there for these assets for those indications? Thanks.

This is Larry, Jason. So we've initiated some discussions at the conference at the beginning of the year, and there's certainly interest that we've had inbound calls about the same information. And we think, in this case, probably the optimal way to for a partner that we'd want to have to proceed with the through inhaled formulation routes to deliver it directly to the [log].

Thanks.

Thank you, Jason.

Anupam Rama, JPMorgan.

Hello, you guys. This is Eric in for Anupam. Just wondering if there were any updated thoughts on the potential development pack and T-cell [informant] with duvelisib? I know you guys had mentioned attending a small T-cell forum last month, and just wondering if there's anything new -- anything new in your next [mikalobe] there that could help shift off some potential path forward? And I have a follow-up.

Thanks, Eric, you're right. We had a contingent of the Infinity clinical team at the T-cell meeting in San Francisco recently, and lots of interesting conversations with lots of investigators, a lot of ideas. We're just not in the position yet to describe exactly what that path forward will be.

And we'll be bringing that feedback from the T-cell forum conference back to our joint development committee. And in the context of our collaboration with AbbVie, that would be the decision making for all additional trials.

Okay, great. And maybe following on Mike's question about the BTK failures trial. Just looking at the trial on clintrials.gov, dosing information that's listed there is a little bit confusing with both 25 milligram and the 5 milligram dose being listed. I'm just wondering if that means there's the potential for patients to be possibly dosed escalated above at 25 milligram PID? I'm wondering if you can clarify that? Thanks.

The current plan is to go with the 25 milligrams twice a day dose for duvelisib, and the approved dose for Gazyva. So we don't currently have any plans to go above that.

Okay, great. Thanks a lot.

Thank you.

Brian Klein, Stifel.

Hello, guys, thank you. Adelene, you highlighted the phase 1 data in NHL, and just wondering if you think we'll have a mature PFS and survival data available at this year's ASCO?

So we presented the phase 1 data at ASH, and that's the full majority of that data set. When the study is completely finished, we'll have probably a wrap up publication. But we do not anticipate continuing to report on that data.

We've gotten everything out of that that we need to dictate the strategy going forward. And the next data that we plan to present in indolent Hodgkin's lymphoma will be from the DYNAMO trial, and we expect to have that data from DYNAMO at the end of this year.

Okay, great. And then just a follow up, who's responsible for submitting the NDA and any sort of interactions with the FDA? Is it a joint process between you and AbbVie, or just one or the other company lead that effort? Thanks.

So, Infinity is responsible for filing the NDA, yet at the same time, we are working very collaboratively. We have great working group meetings and governance groups with AbbVie, but Infinity is responsible for filing the NDA. AbbVie is responsible for filing the MAA outside the US, and our regulatory and other teams are working collaboratively on that effort.

Great, thank you.

Thanks, Brian.

Katherine Xu, William Blair.

Good afternoon. I'm just wondering, after the failure of duvelisib in asthma, RA, and what sort of triggered the decision to discontinue IPI443 as well? Is it a scientific or a resource related type of decision?

And another question for Larry, what are you going to do with [Deerfield financing] at this moment?

Sure. So first question I think is regulated to the 443, so that was a purely scientific data driven analysis. The data from our asthma study and our RA study were gating inputs to our determination of the best path forward for IPI443 in inflammation. And because we think that the best way to move forward is through inhaled route now to get the type of response we saw the 25 milligram dose in asthma, but not through a systemic route. And since we don't have inflammatory expertise nor do we intend to develop it, we think that that's the best approach forward right now is to have a partner who already has those capabilities to take the IPI443 forward inflammation.

And to your second question regarding Deerfield, is that the Deerfield option is going to lapse because we think that there are alternative financing resources that we can tap in the future if we need them.

Do you still believe that 443 is potentially advantageous over duvelisib?

No. 443 and duvelisib have very similar profiles of being -- inhibiting both the Delta and the gamma [isoforms] forms of PI3 kinase. We don't see the need to take two molecules with similar profiles forward in hemalignancies or oncology, because we're very pleased with what we're seeing with duvelisib. So we don't see a role for 443 in oncology.

We really were bringing that forward in the event that we wanted to develop it in inflammation. I think our conclusion is that it's going to be -- require some more work in inflammation, because we believe that it will most likely require an inhaled delivery for asthma.

And that's not something that is in Infinity's core area of strength, and so we believe it's better for a partner to develop it there. But we really like what we're seeing with duvelisib in oncology, and we see no reason for a second Delta Gamma in oncology.

I understand that. I was referring to the auto-immune area whether that increased activity in 443 [against Gamma] would really make a difference scientifically in the auto-immune disease?

I'd say yes. We don't know. That's something for a partner will have to determine. And it's a combination of both, is 443 better than duvelisib in inflammation and/or would a different delivery route ensure that it would be more efficacious in asthma. So that's something a partner will determine.

Thank you.

Thank you.

(Operator Instructions)

Eun Yang, Jefferies.

Thank you. A question on the regulatory side, so is it fair to assume that, at least in the US, you do file for iNHL first on an accelerated basis and still that is one of the normal usual regulatory filing?

Yes. Our current plan is with -- to seek accelerated approval for the DYNAMO trial. We haven't yet guided on whether the relative timing of filing in iNHL for DYNAMO and CLL in DUO are, but we'll be moving both of those and filing on both of those as quickly as possible. But DYNAMO with the accelerated approval, DUO would be -- we'd be seeking full approval because it is a randomized trial against ofatumumab.

Okay. How long the EU the iNHL the filing would be potentially you to file for DYNAMO study will be unique to have DYNAMO all study data in order to file?

So the driver of the filing in Europe will be the DUO study. And the way that approvals work in Europe, duvelisib could be approved for both CLL and indolent on the basis of the DUO study.

I see okay. And the last question is, is DYNAMO+ R study [the risks into] December last year, how long do you take between (inaudible) [innovations]?

Eun, we haven't yet provided guidance on the completion of enrollment in the DYNAMO+ R study. What we typically do is the year in which we expect to complete enrollment, we provide in our guidance so that you can infer that we don't expect completion of the DYNAMO+ R in 2015. And then in the year in which we think it will complete, that will be part of our guidance.

Okay, thank you.

Thanks, Eun.

Mike King, JMP Securities.

Thanks for taking the follow-up. Just a quick follow up question about -- sorry -- the -- now it's gone out of my head. If we can maybe talk off-line because I've been back in the queue, and I forgot what I (multiple speakers)

We'll give you a call back after.

We'll talk to you later.

Mike Lee, RBC Capital Markets.

Hello, thanks. This is John here again, just one follow-up. I'm just thinking, there's a good chance that you partner AbbVie's (technical difficulty) reach the market first before duvelisib based on their data from the [GP] populations. So just curious, given they may be out on market with a price tag, how much would you have for pricing duvelisib and who makes that decision? Is it a joint decision with AbbVie?

Thanks, John. You chopped up a little bit, but I think I got that the gist of the question. The way we've structured our relationship with AbbVie is we hope that through our joint commercialization committees and joint [stearing] committees that we will make decisions collaboratively. We also did divide, if there were disputes, certain decisions that either party would have the equivalent of a trump vote.

And so Infinity has the final decision-making with respect to the pricing strategy for duvelisib. AbbVie has to leverage their contracting organization. They will be having the final say on any final contracting.

So we've gone through a number of important decisions, and each of us has that final say where necessary. And on pricing strategy, that belongs to Infinity.

Okay, great. Thank you.

Thank you.

Mike King, JMP Securities.

It's a miracle, it came back to me.

I didn't doubt you for a minute, Mike,

Just wanted to ask you if we could get a sense of what the longest time on therapy now if you've got anybody on duvelisib, it sort of picks up on an earlier question about comparisons to idelalisib in terms of the GI talks that they've seen. And I'm just wondering if you have enough of a treatment experience with duvelisib to figure out if the side effect profile, the GI side effect profile, is going to be any different?

So with respect to the first question about what's the longest that someone has been on the study, that would be the data that we had presented at ASH. And so in iNHL, let's just see where that data is. We had our -- sorry, I'm just looking through the slides.

We had a patient that was out 32 months, which was the longest patient on our Kaplan Meier curve. And you can see, obviously, there are fewer patients that are out that long.

We had 12 patients that were out to 20 months. And to your question, absolutely, we will learn more as the longer patients are on study in terms of the side effect profile.

As we've see so far, the AEs that have been reported our grade 1, grade 2. They're manageable, so we're not seeing a safety signal that's alarming at this point. But of course that's a number one priority, and we'll continue to monitor that as we have more patients who have been on study for longer. And particularly in the DYNAMO study, where we just have a larger group of patients.

Okay, that's great. Thanks for the added color. I appreciate it.

Okay. Thanks, Mike.

Thank you. And I'm showing no further questions at this time. I'd like to turn the conference back over to Ms Perkins for any further remarks.

Well thank you, everyone, for joining us today. And we look forward to talking with you throughout the rest of the year.

Ladies and gentlemen, this concludes Infinity's conference. You may now all disconnect. Have a great day everyone.