Infinity Pharmaceuticals Inc (INFI) 2015 Q2 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 financial results for the second quarter of 2015. My name is Crystal, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at Infinity's request.

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

Thank you, Crystal and good morning, everyone. Welcome to today's call to discuss our recent business progress and review our second quarter 2015 financial results.

With me here today are Adelene Perkins, President and Chief Executive Officer; Julian Adams, President of R&D; and Larry Bloch, EVP, Chief Financial Officer and Chief Business Officer. Following our remarks, we will open up the call for Q&A. The press release issued earlier this morning 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 is 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 quarterly report on Form 10-Q for the second quarter of 2015. While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then current views. We may update the statements in the future, but are not taking on an obligation to do so.

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

Thanks, Jaren. Good morning, everyone and thank you for joining us on the call today.

During the quarter, we continued to focus on advancing duvelisib, our dual inhibitor of PI3 kinase-delta and PI3 kinase-gamma in registration-focused studies. Our first priority remains enabling a rapid path to approval as a monotherapy in indolent non-Hodgkin lymphoma or iNHL and in chronic lymphocytic leukemia or CLL. Our enrollment in both DYNAMO and DUO is on track and we're focused on executing the completion of these trials and initiating additional trials by the end of the year.

We now have more than 100 patients enrolled of the 120 patients expected to be enrolled in DYNAMO, our Phase 2 monotherapy study in patients with refractory iNHL. Based on current performance, we remain confident in our ability to complete enrollment in the second half of the year. DUO, our Phase 3 monotherapy study in patients with relapsed-refractory CLL is also enrolling well and we also remain confident in our ability to complete DUO enrollment in the second half of 2015. Completing enrollment in the first of either DYNAMO or DUO triggers $130 million milestone payment from AbbVie, our global strategic partner for duvelisib in oncology. The potential for file for regulatory approval based on these studies would represent a significant achievement for the Company.

We also announced this morning that the FDA granted Fast Track designation for the investigation of duvelisib for the treatment of patients with CLL who have received at least one prior therapy. The Fast Track designation underscores our belief in the potential of duvelisib to fill an unmet need and provides us with additional opportunities to rapidly advance our development program. Duvelisib is core to our foundation and our vision of building a great company that brings meaningful medicines to patients.

As our registration-focused studies near enrollment completion, we are continuing to build out our medical and commercial functions as we begin to prepare for registration and launch. We are also very focused on ensuring that we have opportunities beyond duvelisib. So we are carefully evaluating both internal and potential in-licenses to expand the pipeline. We look forward to sharing further updates at our R&D Day in New York City on October 6.

With that, I'll turn the call over to Julian to review the duvelisib program in more detail.

Thank you, Adelene.

We are very pleased that the Fast Track designation has been granted for the investigation duvelisib for the treatment of CLL in patients who have received one prior therapy. The Fast Track program enables us to file sections of the NDA on a rolling basis as they become available. This allows the FDA to review portions of the NDA as they are received rather than waiting for the entire NDA filing to commence the review process. We look forward to continuing to work with the FDA as our program advances.

We're also very pleased that our plan for executing on enrollment in our DYNAMO study is achieving the intended results. With over 100 patients enrolled, we are confident in our projection of completing enrollment in the second half of 2015. As a reminder, DYNAMO is a single-arm Phase 2 monotherapy study designed to evaluate the safety and activity of duvelisib in approximately 120 patients with double refractory iNHL. The primary endpoint is overall response rate. This study was inspired by our Phase 1 study in patients with advanced hematologic malignancies. At the ASH meeting in 2014, we reported a 72% overall response rate, including a 33% complete response rate among 18 patients with relapsed/refractory iNHL. The population we're evaluating in DYNAMO includes patients with follicular lymphoma that are refractory to both Rituxan and chemotherapy. These patients are in need of effective treatment options which allows us to explore and accelerate an approval strategy.

In addition to DYNAMO, we are conducting a DYNAMO+R, a Phase 3 study in patients with previously treated follicular lymphoma. The strong Phase 1 data we have previously reported in iNHL (inaudible) us to explore the clinical potential for duvelisib in the frontline setting. We are currently enrolling patients in CONTEMPO, a Phase 1b/2 study in treatment-naive follicular lymphoma patients designed to evaluate the safety and activity of duvelisib plus Rituxan and duvelisib plus Gazyva, a next generation Rituxan. We are also planning to initiate two new studies in patients with iNHL later this year.

Turning to CLL, the DUO trial, a registration-focused monotherapy study in patients with relapsed/refractory CLL, remains on track to complete patient enrollment in the second half of 2015. DUO is a Phase 3 randomized, open-label study in approximately 300 patients designed to evaluate the safety and efficacy of duvelisib compared to ofatumumab, an anti-CD20 antibody proved setting. The primary endpoint of this study is progression free survival. While extensive progress has been made in the treatment of CLL, patients are not yet being cured. In particular, patients who relapse on ibrutinib therapy appear to have the more aggressive form of disease. We believe there is an emerging medical need for new effective treatment options for patients following progression on a BTK inhibitor. We are currently enrolling SYNCHRONY, a Phase 1b study of duvelisib in combination with Gazyva in patients with CLL, whose disease has progressed following treatment with a BTK inhibitor. We believe duvelisib could play an important role in the treatment of this patient population.

We are also looking forward to the presentation of early data from a Phase 1b investigator-sponsored study evaluating duvelisib plus FCR in younger first line CLL patients at the 16th International Workshop on Chronic Lymphocytic Leukemia next month in Sydney, Australia. This IST is being conducted by Dr. Matthew Davids at the Dana-Farber Cancer Institute.

Looking ahead at the future of care for patients with hematologic malignancies, we are very excited about the trend toward developing combinations of targeted therapies with the potential to offer patients regimens that could lead to deeper and more prolonged responses. Together with AbbVie, we have an opportunity to be at the forefront of changing how these malignancies are treated. At this year's ASCO, we presented preclinical data providing further rationale for evaluating duvelisib in combination with venetoclax, a selective first-in-class BCL-2 inhibitor, as well as other therapeutic agents. We are particularly encouraged by the potential synergy observed between duvelisib and venetoclax and we anticipate that AbbVie will initiate the first clinical study of this combination in patients with hematologic malignancies later this year.

As Adelene mentioned earlier, on October 6, we will host our R&D Day in New York City. We are planning a morning that includes both Infinity speakers and external experts from lymphoma and leukemia. Infinity is committed to developing first-in-class and best-in-class medicines for patients and we are very much looking forward to the opportunity to share updates on both our research and development efforts as well as perspectives on the future of cancer treatment. We hope to see many of you there in person.

Now, I would like to turn the call over to Larry who will present our financial results.

Thank you, Julian. I'll provide an overview of financial results for the second quarter of 2015, and then quickly review our collaboration details with AbbVie and our current financial guidance which remains unchanged.

Revenue during the second quarter of 2015 was $4.9 million for R&D services associated with the collaboration with AbbVie. Revenue related to development services and committee services are being recognized using proportionate performance method as services are provided over the estimated service period of approximately five years. We have recorded the remaining amount related to development and committee services of $30.6 million and $70.1 million as short-term and long-term deferred revenue respectively. We did not record any revenue in the second quarter of 2014.

R&D expense in the second quarter of 2015 was $34.1 million compared to $28.2 million at the same period last year. The increase in R&D expense was primarily due to contingent cash compensation expenses related to early discovery programs. G&A expense in the second quarter of 2015 was $9.4 million compared to $7.1 million in the same period last year, primarily due to higher contingent cash compensation.

Net loss for the second quarter of 2015 was $38.4 million or a basic and diluted loss per common share of $0.78. In the same period last year, we reported a net loss of $38 million and also a basic and diluted loss per common share of $0.78.

As of June 30, 2015, we had total cash, cash equivalents and available-for-sale securities of $199.5 million compared to $233.6 million at March 31, 2015. As Adelene mentioned, we expect to receive a $130 million milestone payment from AbbVie in the second half of this year, which would be triggered by the completion of patient enrollment in the first of either DYNAMO or DUO. As a remainder, we received an upfront 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 and designed to fund Infinity's continuing investment in the duvelisib development program.

Our financial guidance for 2015 remains unchanged. In conclusion, we're very confident in the potential of duvelisib to make a meaningful difference in the lives of people with hematologic malignancies. And we have the fundamental elements in place, a [globally featured] partner, registration study is underway, a validated path to regulatory approval for duvelisib and a commitment to developing a pipeline of first-in-class and best-in-class medicines.

Now, we'll open the call for Q&A. Operator?

(Operator Instructions) Mike King, JMP Securities.

Couple of quick ones. First of all, just with regard to, if I got the name right, SYNCHRONY and the BTK failures, would that study exclude Richters -- most BTK failures tend to progress at a very rapid rate. I'm just wondering if you're going to try to exclude Richters out of that or would Richters not be an exclusion criteria?

Yes. Richter's patients are indeed excluded. The majority of patients are not developing Richters, they are though transforming and see, we have a much more aggressive disease and shortened survival.

Right. Okay, and would that be a potential registration trial, Julian?

Right now, we've just announced the Phase 1b portion of the trial and that's all we're commenting on today. The rest is a data driven process, of course.

And primary there would be what, response rate?

The response rate is, of course, the first initial clinical signal that we look for.

Okay. And then the other question I had was with regard to the combo of venetoclax and duvelisib, I don't know if you can walk us through your thoughts on dose escalation with regard to sort of what proportion or what fraction of MTD of both molecules you'll be starting out with to reach your optimal combination doses.

Yes, I can't comment on the actual design of the study. But what I can say is that the venetoclax and duvelisib appeared to have non-overlapping toxicities in terms of what's been reported clinically. And what we've seen pre-clinically, we are able to give full doses at least in animal studies of both drugs. So we're encouraged by the tremendous potential for venetoclax and duvelisib.

Okay. And then one final question, just coming out of both EHA and ICML, getting a lot of investor questions about the definition of colitis and the incidence of colitis with duvelisib versus other PI3 kinase-deltas and I'm just wondering if you could perhaps put your incidence of colitis/GI, grade 3, 4 adverse events into context with the other available delta inhibitors.

We have a very low incidence of colitis. We have sporadic cases and there are different grades as well. Colitis is of -- may develop in some patients where initially they're experiencing an immunological diarrhea. And the way we're managing these patients is to institute dose interruptions, treat diarrhea -- the immune-based diarrhea with steroids, oral steroids and if the diarrhea resolves, then patients can go back onto study. So we're working very hard to limit this low incidence -- even this low incidence rate of colitis. And we hope that our treatment strategies will pan out in our clinical trial.

I know [they are imperfect], but do you believe duvelisib is comparable to other deltas, better than other delta's, maybe slightly worse than other deltas, how would you?

It's really impossible for me to comment on the treatment management of how other delta inhibitors have been used. I don't have access to details of other companies' investigational drugs or approved drugs. But we are aware that this is probably an on-target effect and it's a function of immune modulation that occurs in the GI immune barriers, and it's something that doesn't occur, again, it's a very low incidence, but it's something that's at least clinically manageable.

Robyn Karnauskas, Deutsche Bank.

This is Mohit filling in for Robyn, and thank you for taking my question.

I have a question regarding the timelines of DYNAMO data. When do you think you will be in a better position to talk about time lines or the data readout. And in terms of filing on that data, do you think -- so given that we see responses pretty quickly, if that's the case, do you think you will be able to file right away or you think you will need some level of PFS data before you file for that?

We have announced that we will complete enrollment this year and the data readout will be in 2016. We'll give a further updated guidance probably in the JP Morgan timeframe, as when we expect those data to readout. And you're quite right. While the primary endpoint is overall response rate, a secondary endpoint is PFS. So we do need to have some time element that we think appropriate for reporting on these data.

Anupam Rama, JP Morgan.

This is Eric in for Anupam on this morning.

Just a quick question regarding the Fast Track designation, evaluations on that. You first released [data-specified] CLL, just wondering whether or not it's kind of applies -- could be applied more broadly also to indolent NHL?

We don't talk about ongoing discussions with the FDA. Obviously, that would be of interest. What we have received is a Fast Track designation for patients who have received at least one prior therapy on CLL, and we can't speak any further than that, but of course that would be of interest.

Michael Yee, RBC Capital Markets.

A couple of questions (technical difficulty). On the upcoming DYNAMO data, I guess, in 2016, two questions. One is, I guess, how confident are you that the data -- the efficacy data would be clinically meaningfully different than Zydelig? Is there anything to think about in terms of the design of the study, whether it's healthier patients or whatnot to that versus the Phase 1 where you'd have some sort of thought process as to why you feel confident versus [this small phase] want to be clinically meaningfully different?

And then I guess second question is how do you think your thoughts would change if it's not clinically meaningful different either in CR and whatnot and then CR is kind of where you're thinking about differentiation?

Of course, we are very hopeful that we will show differentiation based on the Phase 1 data that we saw with both the high response rate and a high CR rate. But we kind of run the experiment. So we don't know and so we have to wait and see the DYNAMO data. And then there are really two sources of differentiation. One is as a monotherapy and we're hopeful that we'll replicate the data we saw in Phase 1, and the second is on the development strategy, and that's where novel combinations we believe are really the future of treatment in hem malignancies that it will be combination therapy and it was really one of the primary reasons that we chose to partner with AbbVie because we saw some of the most compelling synergy data between venetoclax and duvelisib. And so that's a very important second source of potential differentiation for us.

Julian, do you want to add something?

Yes, I would add that we have a theoretical basis for believing in differentiation and laboratory data to support where duvelisib is the differentiated and that inhibits both delta and gamma and we've shown in many different cellular experiments why that has a more profound effect on the micro environment compared with the delta inhibitor alone. We've also demonstrated this in animal studies. So we have a strong scientific basis for differentiation, but as Adelene points out, the proof of the pudding is in the data.

Okay. Show them what the combination approach, I guess, when you think we would first start getting some data, you feel pretty confident, and you start having data by either ASCO or ASH with the combination and when would we start getting data on SYNCHRONY? I guess you think by ASCO or ASH.

And then just lastly to wrap up, if all of this we're talking about your confidence with AbbVie, maybe just talk a little bit broadly about how your discussions have been with AbbVie and how aggressive we are with getting all this maybe started and underway and getting data out.

Yes, sure. So we can't yet comment on when we'll have data from the combo study with venetoclax or with SYNCHRONY. As you know, a Phase 1 study, the primary purpose of both is evaluating the safety and then on top of that, we look for signs of efficacy with both response rate and durability through both PFS and longer term OS as well as PK. So, we'll be collecting all of that data, we can't yet speak to when we will have the ability to publish it.

What I can say is our relationship with AbbVie is going very well. And so, as you know, they will be conducting the combo study, they're working and moving that forward aggressively. And for all of our different interactions at all levels within the AbbVie organization, there is great alignment of what we're trying to accomplish and great working relationship. So, we're very pleased with the relationship.

Matthew Harrison, Morgan Stanley.

This is (inaudible) filling in for Matthew.

Just a quick question, and you touched on the CCL a little bit right now, but would you be able to provide any more specificity around when the combination trial with venetoclax may start this year and in the press release mentions later this year, but we were interested in finding out if there is any more specific timelines available.

No more specificity than by the end of the year.

(Operator Instructions) Katherine Xu, William Blair.

This is Joe on for Katherine. I was wondering if there is a specific rationale for why you decided to test the combination of duvelisib with venetoclax before doing duvelisib with Imbruvica?

The data that we collected in the laboratory was systematic survey of pair-wise combinations with duvelisib, and what came to the top of the list was venetoclax, number two close behind it is Imbruvica. So we have every intention of enabling both of those studies. We went to AbbVie and see all the relationship with them last September, and obviously, at that time Imbruvica was not part of that portfolio. So our attentions went to venetoclax, almost logically that was on the table. And now that they have acquired Pharmacyclics, obviously there is a whole other set of conversations we have about enabling combination with Imbruvica. So we would like to enable any combination that would show that we'd be predicted from our scientific studies to be efficacious.

And the other thing I would add is that, we saw a strategic value to beginning the venetoclax combination before venetoclax is approved, because we have through the relationship with AbbVie unique access to doing the groundwork to begin the trial for that combination and we felt that was strategically advantageous.

Thank you. And I'm showing no further questions from our phone lines. I'd now like to turn the conference back over to Adelene Perkins for any closing remarks.

Thank you, Crystal.

In summary, we're pleased with the progress we made during the quarter and are on track to complete enrollment in DYNAMO and DUO in the second half of this year. We hope you'll join us for R&D Day on October 6 in New York City. We can't wait to share results from a lot of great work that's going on at Infinity. We'll cover topics and data that spans from discovery research and duvelisib development through our perspectives on evolving treatment paradigm and changing patient needs together with Infinity's plan for how to address those needs. You will also have the opportunity to hear from Sujay Kango, Infinity's Chief Commercial Officer, in addition to key opinion leaders in lymphoma and leukemia. We'll see you throughout the fall and thank you for joining us today. We appreciate your continued support.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.