Infinity Pharmaceuticals Inc (INFI) 2015 Q3 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 Third Quarter of 2015. My name is Tanya and I will 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, Tanya, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our third 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'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 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 view. We may update the 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. Good afternoon, everyone, and thank you for joining us on today's call. During the quarter, we continue to focus on advancing duvelisib, our dual inhibitor of PI3 kinase-delta and PI3 kinase-gamma. Duvelisib is the most advanced PI3 kinase-delta/gamma inhibitor in clinical development and we expect it to play an important role in the future treatment of patients with hematologic malignancies.

There are three components to our duvelisib development strategy. The first is to rapidly bring duvelisib to patients through our monotherapy registration-focused study and relapsed/refractory indolent non-Hodgkin lymphoma or iNHL and relapsed/refractory chronic lymphocytic leukemia or CLL. The second is to improve upon chemotherapy and to bring chemo-free options to patients. And the third, our ultimate aspiration is to offer patients with hematologic malignancies the potential for a cure.

With respect to building the foundation for duvelisib through our monotherapy registration focused study, we made important progress over the last quarter. In iNHL, this past September, we announced the completion of enrollment in DYNAMO, our Phase 2 study in patients with refractory indolent non-Hodgkin lymphoma.

As a result of enrollment completion, we earned $130 million milestone, which we have since received from AbbVie, our global development and commercialization partner for duvelisib in oncology. We also recently received Fast Track designation for duvelisib for patients with follicular lymphoma, the most common form of iNHL, who have received at least two prior therapies. A Fast Track designation provides a number of benefits, including the ability to file a rolling submission and the potential to accelerate the regulatory review of our NDA.

In CLL, DUO, our Phase 3 study in patients with relapsed/refractory chronic lymphocytic leukemia, is now more than 95% enrolled. We remain confident in our ability to complete enrollment this quarter. We also have a Fast Track designation for duvelisib for the treatment of patients with CLL, who have received at least one prior therapy. These Fast Track designations underscore our belief and the potential of duvelisib to fill an unmet need while also providing us with additional opportunities to advance our regulatory filings and review.

Julian will review additional studies directed to the second and third components of our duvelisib development strategy, designed to approve upon and replace chemotherapy and ultimately to achieve curative outcomes for patients.

In September, we were very pleased to announce the expansion of our portfolio with a novel immuno-oncology development candidate, IPI-549. Pre-clinical research suggests that IPI-549 may play an important role in anti-tumor immunity by selectively inhibiting PI3-kinase-gamma. We are on track to initiate a Phase 1 study of IPI-549 in solid tumors the first quarter of 2016, which represents an important extension of our oncology portfolio to include candidates directed to both hematologic malignancies and solid tumors.

As we move closer to our goal of delivering novel medicine to patients, we continue to build a talented team of Citizen-Owners in preparation for potential registration and launch. Last month, Bill Bertrand joined Infinity as Executive Vice President, General Counsel. Bill was most recently the General Counsel and Chief Operating Officer at Salix and before that was the General Counsel at MedImmune, where he played a key leadership role in transitioning MedImmune to a successful commercial organization.

We also continue to expand our commercial capability to prepare for the potential launch of duvelisib. In this quarter, Lesly Charanza joined Infinity as Vice President, Access, Distribution, Patient Services and Pricing. Lesly, most recently served in a senior leadership role on Genzyme's MS Market Access team and brings extensive experience in patient access, reimbursement and government affairs.

In summary, we made important progress this quarter and expect to achieve significant milestones in the fourth quarter, advancing all three components of our duvelisib development strategy. Achievement of these milestones positions us for a transformational 2016 in which we expect to file for regulatory approval for duvelisib, while advancing trials designed to approve upon and place chemotherapy and to advance our pursuit of curative outcomes for patients.

At the same time, we are building our portfolio as we move our immuno-oncology development candidate, IPI-549, into the clinic and we're continuing to build our team to realize our vision of bringing important new medicines to patients.

With that, I'll turn the call over to Julian to review our clinical programs in more detail.

Thank you, Adelene. Our vision is to establish duvelisib as the best-in-class PI3-kinase inhibitor, with the ultimate goal of curing patients with hematologic malignancies in combination with other novel therapies, while minimizing or even obviating the need for chemotherapy. We are advancing this vision with studies now underway and with clinical trials we expect to start by the end of the year that address the three components of our development strategy, which Adelene reviewed.

In indolent non-Hodgkin lymphoma, we have made important progress with our first goal of bringing the duvelisib to relapsed/refractory patients. In September, we completed patient enrollment in DYNAMO, our 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. We expect to report topline data for this study early in the third quarter of 2016. If the data are strong, we believe we will have a compelling rationale to seek an accelerated approval.

As Adelene mentioned, we received Fast Track designation for duvelisib in patients with follicular lymphoma, which provides us with additional opportunities to advance our regulatory filing and review. The second component of our strategy in iNHL is to improve upon and replace chemotherapy. The BRAVURA study addresses the improve-upon part of our development plan. This is a Phase 3 double-blind placebo controlled study in patients with relapsed iNHL and is expected to begin by the end of the year.

This study is designed to evaluate the safety and efficacy of duvelisib plus rituxan and bendamustine, compared to placebo plus RB in approximately 600 patients with a two-to-one randomization in favor of the experimental treatment. The primary endpoint is progression-free survival.

Our FRESCO study addresses our goal of eliminating chemotherapy for certain patients and is also expected to begin this year. This is a Phase 2 study in approximately 200 patients with relapsed follicular lymphoma, evaluating the safety and efficacy of duvelisib plus rituxan versus rituxan plus CHOP, a chemotherapy cocktail broadly used for the treatment of follicular lymphoma. The primary endpoint is progression-free survival.

The FL patients we are enrolling in this study have a documented progression within 24 months after start of an alkylator-based chemotherapy. A recent study by [Cassulo] published in the Journal of Clinical Oncology reported that 22% of follicular lymphoma patients experienced progression within two years upon initial diagnosis and treatment with R-CHOP and that early progression is associated with shortened survival.

Given the unique biological mechanism of action for duvelisib, we are testing whether we can address an important medical need for these patients. CONTEMPO, another study designed to evaluate chemo-free regime is continuing to enroll. This is a Phase 1b/2 study in treatment naive follicular lymphoma patients. This study is designed to evaluate the safety and activity of duvelisib plus rituxan and duvelisib plus GAZYVA, the next-generation rituxan.

Turning to CLL, our Phase 3 DUO study represents the fastest path to registration and potential approval in this indication. DUO is a Phase 3 randomized open-label monotherapy study in approximately 300 relapsed/refractory patients and is designed to evaluate the safety and efficacy of duvelisib compared to ofatumumab, an anti-CD20 antibody approved in the setting. The primary endpoint for this study is progression-free survival.

DUO is now over 95% enrolled and we remain confident in our ability to complete enrollment before the end of the year. While there have been significant advances in the treatment of CLL, there are still no cures. In particular, patients who relapse on ibrutinib therapy appear to have in more aggressive form of disease and we believe duvelisib can play an important role in the treatment of this patient population.

We have responded to the submerging need with SYNCHRONY, a Phase 1b study of duvelisib in combination with GAZYVA and patients with CLL, whose disease has progressed following treatment with a BTK inhibitor.

Our vision for cure includes the potential for duvelisib to be administrated with other novel therapies. We expect our colleagues in AbbVie to initiate the first clinical study of duvelisib and venetoclax, a first-in-class selective Bcl-2 inhibitor, before the end of the year. This Phase 1b/2 trial of duvelisib and venetoclax is designed to evaluate the safety and activity of the combination. Our enthusiasm for this study is based on the synergy we've reported between these two agents in preclinical models.

In our aspiration to seek a cure, we are encouraged by data from a Phase 1b/2 investigator-sponsored study led by Dr. Matthew Davids at Dana-Farber Cancer Institute, testing duvelisib in combination with FCR and previously untreated younger patients with CLL. FCR remains the gold standard for this patient population. Yet, only about 20% of the patients will achieve a complete response with minimal residual disease for MRD negativity in the bone marrow. While the patient numbers are small, we are encourage to see 100% overall response rate and 89% MRD negativity reported in the bone marrow with duvelisib FCR combination.

These data was reported for the first time at the IWCLL meeting this past September and will be reviewed and updated at ASH next month. As a further preview of ASH, data from preclinical and translational research conducted in collaboration with scientists in Dr. Nicholas Chiorazzi's lab at The Feinstein Institute for Medical Research will be presented showing how dual integration of PI3-kinase delta and gamma with duvelisib blocks the ability of the human CLL cells to proliferate in surviving mice.

Updated Phase 1 data from an investigator-sponsored study led by Dr. Ian Flinn at Sarah Cannon Research Institute will also be presented. This study is evaluating duvelisib in combination with bendamustine and rituxan and these data support our trials of duvelisib in combination with bendamustine and/or rituxan or mainly BRAVURA and FRESCO.

Moving from duvelisib to our newest development candidate, IPI-549, we are very excited about broadening our oncology portfolio into the treatment of solid tumors with a new approach within immuno-oncology. While checkpoint inhibitors address tumor immune tolerance by activating T-cells, the tumor microenvironment still remains a barrier to tumor immunity. IPI-549, our oral PI3-kinase gamma selective inhibitor, inhibits tumor-suppressive macrophages within the microenvironment, potentially enabling an enhanced anti-tumor response.

We are excited about the potential of 549 as monotherapy and also believe it could potentiate the activity of checkpoint inhibitors. At the recent AACR Immunotherapy Conference in New York, we presented data demonstrating dose-dependent, single-agent, anti-tumor activity with IPI-549 in multiple solid tumor models, including murine models of lung, colon and breast cancer. Additionally, mice treated with a 549 in combination with checkpoint inhibitors showed greater tumor growth inhibition than either treatment as monotherapy.

Tomorrow, Infinity researchers will review IPI-549 preclinical data at the AACR-NCI-EORTC International Conference on molecular targets and cancer therapeutics, which is taking place here in Boston. We are on track to initiate the first clinical study of IPI-549 early in 2016. This Phase 1 study is designed to evaluate the safety and activity in 549 and includes a dose-escalation phase testing 549 as monotherapy as well as in combination with an anti-PD-1 antibody therapy.

Once the dose-escalation phase is completed, we are planning an expansion phase in patients with selected solid tumors, including non-small cell lung cancer and melanoma. Our hope is that combining IPI-549 and a checkpoint inhibitor, two distinct mechanisms of action, will enhance activity in solid tumors.

In summary, 2015 is an important year for our R&D programs. We are pleased with the progress we've made this quarter and look forward to sharing topline clinical data with you in 2016.

With that, let me pass the call over to Larry.

Thank you, Julian. I'll now provide overview of our financial results for the third quarter of 2015. Total revenue during the third quarter was $90.7 million. This included $75.2 million in licensing fees associated with the $130 million milestone achieved for DYNAMO enrollment completion and $15.5 million in R&D services associated with our collaboration with AbbVie. By comparison, total revenue during the third quarter of 2014 was $160.6 million, all of which was related to licensing fees in R&D services associated with $275 million upfront fee from AbbVie.

Turning to expenses, R&D expense for third quarter was $37.7 million compared to $44.9 million for the same period last year. This change was primarily due to a $5 million option fee payment to Takeda in third quarter 2014 as well as lower clinical development expenses for duvelisib.

G&A expense for the quarter was $9.8 million compared to $8 million for the same period last year. The increase in G&A expense was primarily related to the continued build-out of the Company's commercial capabilities and the functional support related to those activities.

Net income for the quarter was $42.5 million or a basic earnings per common share of $0.85 and diluted earnings per common share of $0.84. The same period last year, during which we recognized a significant portion of the $275 million upfront payment from AbbVie, we reported net income of $103.2 million or basic earnings per common share of $2.08 and a diluted earnings per common share of $2.03.

As of September 30, 2015, we had total cash, cash equivalents and available-for-sale securities of $163 million compared to $199.5 million at June 30, 2015. September 30th cash position does not include the $130 million milestone payment earned for completion of enrollment in DYNAMO, which AbbVie has paid till September. Including the [receipt of] $103 million milestone, we continue to expect to end 2015 with a cash and investment balance ranging between $230 million and $250 million.

As remainder, we are eligible to receive up to $400 million in additional payments for the achievement of development, regulatory and commercial milestones. And of this $400 million, $235 million are related to milestones through the first commercial sale of duvelisib and are designed to fund Infinity's continuing investment in the duvelisib development program. The 2015 financial guidance, which we provided at R&D Day in October, remains unchanged.

In closing, with a committed team and a global strategic partner for duvelisib in oncology, parallel paths to registration in both indolent non-Hodgkins and CLL, the potential to support regulatory filings in 2016 [for all design to] potentially offer a cure to patients in IPI-549 positioned for the start of Phase 1 early next year, we are confident that we have the elements in place to make a meaningful difference in the lives of people with cancer.

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

(Operator Instructions) Michael Yee, RBC Capital Markets.

Hi, good afternoon, this is actually Judy Liu on for Mike here at RBC. First of all, congratulations on the progress you've made this quarter and thanks for taking the question. First question is on your combo study with AbbVie. So, you said you're planning to initiate the study by year-end. I was just wondering if you could give us an estimate of when you expect to have data for us and what kind of data you might be expecting. And also, could you remind us what indications you're pursuing for that trial? Thanks.

Sure, first, I'd like to remind everyone that the combination of venetoclax and duvelisib is a combination of two investigational drug. So it's a very bold move by AbbVie and Infinity to take this pair of medicines into experimental trials prior to any approvals. We've been working very hard on the protocol and we think we've outlined an excellent protocol, which has two components.

First is a Phase 1b component, which assesses the pharmacokinetics and safety and drug tolerability of both drugs together to establish a dose pair that we could move into a Phase 2 setting. In the Phase 2 setting, we'll test a broad range of hematologic malignancies and we're very encouraged that our AbbVie partners are moving ahead with this protocol.

Thanks. Just to clarifying that, so when do you think would be reasonable to expect an update on any potential data for that trial?

So, a Phase 1b, as you know, is very dependent on analyzing pharmacokinetics. And it's initially starting at low doses and escalating to a dose-pair that is then deemed acceptable. So, the 1b component is the slow element of this, but we're proceeding as quickly as and safely as possible with safety being paramount for patients.

Anupam Rama, J.P. Morgan.

Hi, guys, it's Eric in for Anupam actually. I just had a quick question on the DYNAMO+R study. I think I remember at the Analyst Day, you mentioned, you're seeing kind of slower-than-expected recruitment due to some reluctance about the [rituximab lower arm]. I'm just wondering maybe how you're now thinking about timelines with the ability to fully accrue that study and whether you'd anticipate some impacts in the new chemo comparison trials coming online, also perhaps whether BRAVURA might actually also serve as a confirmatory study, [because I don't know]?

Thanks, Eric. We are going to have discussions with the FDA to determine if BRAVURA could serve as a confirmatory study. We have designed that as we mentioned at R&D Day with the advances in the treatment of follicular lymphoma and iNHL, we have found that DYNAMO+R is difficult to enroll, because rituxan is increasingly being used less as a monotherapy. And so, the BRAVURA study, we think has the potential to enroll more quickly, because its adding on to the existing standard of care with RB and our hope is to show that we enhance the efficacy by adding on to the current standard of care.

Matthew Andrews, Wells Fargo Securities.

Hey, good evening. Thanks for the opportunity to ask a question. At your R&D Day in early October, you guided to the potential for DUO to be stopped early based on the preplanned interim PFS analysis. I was just curious what motivated you to provide that potential timeline, considering you've said very little about the study itself, its initiation. Is there something with the long-term follow-up that has encouraged you to think that PFS will be superior compared to ofatumumab? Thanks.

Well, at the outset, we wouldn't have run the study if we didn't believe that duvelisib would outperform ofatumumab. And as you know that with many Phase 3 studies, there are planned interim analyses. However, I would point out this is an event-driven trial since the endpoint is progression-free survival. So, we're accumulating events.

We cannot predict when we will have the requisite number of events to trigger the Independent Response Committee and [an IBMC] to review the data. And so, an interim analysis is planned and the expectation is if there is overwhelming efficacy this trial could conceivably stop early, but we're not making any projections into that. We're blinded to the outcomes of these data.

(Operator Instructions) There are no further questions at this time. I turn the call back to Adelene for closing remarks.

Thank you, Tanya. Thanks, everyone, for joining us on the call today and for your support and be sure to attend our poster presentations upcoming at ASH. Have a good night.

This concludes today's conference call. You may now disconnect.