Infinity Pharmaceuticals Inc (INFI) 2015 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 2015 financial results. My name is Andrea, 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, Miss Jaren Madden, Senior Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Thank you Andrea, and good afternoon everyone. Welcome to today's call to discuss our recent business progress and review our full-year 2015 financial results.

With me 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 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 annual report on Form 10-K for 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.

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

Thanks, Jaren. Good afternoon everyone, and thank you for joining us on today's call.

2016 is the year of results for Infinity as we continue to develop duvelisib, a dual inhibitor of PI3-kinase-delta and gamma, with first-in-class potential. The data we have developed with duvelisib to data suggests it may play an important role in the future treatment of patients with hematologic malignancies.

To advance our goal of bringing duvelisib to patients, we are focused on the three strategic objectives with duvelisib this year. Our first strategic objective is to submit regulatory filings for duvelisib based on two registration-focused studies: our Phase 2 DYNAMO study in patients with relapsed/refractory indolent non-Hodgkin lymphoma or iNHL, and our Phase 3 DUO study in patients with relapsed/refractory chronic lymphocytic leukemia or CLL.

We are on track to report top line data from DYNAMO early in the third quarter of this year. We expect to report top line data from DUO predicated on a progression-free survival interim analysis in the second half of the year, and our estimates suggests that the timing of this analysis could occur in close proximity to our DYNAMO data readout.

We anticipate that marketing applications, if supported by these data, will be submitted to the FDA and EMEA in the fourth quarter of 2016, which, if accepted would trigger a $200 million milestone payments from AbbVie, our global strategic partner for duvelisib. These filings are very important because they're foundational for our primary objective of seeking approval for duvelisib.

Our second objective is to prepare for a 2017 duvelisib launch with AbbVie. AbbVie is building a very promising portfolio of novel therapies directed to cancers, and brings established global commercial expertise and infrastructure to our collaboration, which remains strong. Our teams are working in parallel to build a foundation required for a successful launch, from raising awareness of the potential importance of dual inhibition of PI3-kinase-delta and gamma to developing distribution and access plans.

We will be copromoting duvelisib in the United States and AbbVie will be responsible for the commercialization of duvelisib outside the United States. We are pleased to be working alongside AbbVie as we prepare to bring duvelisib to patients worldwide.

Our third strategic objective this year is to differentiate duvelisib. We have several opportunities to differentiate duvelisib through our registration-focused studies and through other trials.

In addition to our duvelisib objective we have a fourth strategic objective, which is focused on advancing IPI-549, our oral immuno-oncology development candidate that selectively inhibits PI3-kinase-gamma. IPI-540 represents an important extension of our oncology portfolio into solid tumors, and we began patient enrolment and our first Phase 1 study of IPI-549 last month. Julian will discuss both our differentiating strategy for duvelisib and our development strategy for IPI-549 in more detail.

In summary, we have the strategy in place designed to deliver seven significant milestones in 2016. First, to report top line DYNAMO data early in the third quarter. Second, to report top line DUO data early in the second half, predicated on the results over the planned interim analysis.

Third, submit our NDA for duvelisib in the fourth quarter. Fourth, submit the MAA for duvelisib by AbbVie, also in the fourth quarter. Fifth, report initial data from CONTEMPO, our Phase 1b/2 study in treatment-naive patients with follicular lymphoma in the second half of the year. Sixth, advance Phase 1b/2 study of duvelisib in combination with venetoclax, AbbVie's BCL-2 inhibitor. And seventh, advance the Phase 1 study of IPI-549 in solid tumors.

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

Thank you, Adelene.

I, too, am excited about the year ahead, as we work toward our goal of bringing duvelisib to physicians and patients. 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 eliminating the need for chemotherapy.

In our Phase 1 duvelisib study, we reported broad activity across a range of hematologic malignancies and observed profound activity in patients with iNHL and CLL. These Phase 1 data led us to initiate two registration-focused studies and provide us with two parallel paths to potential approval.

DYNAMO is our Phase 2 monotherapy study designed to evaluate the safety and activity of duvelisib in approximately 120 patients with double refractory iNHL, and we are on track to report top line data from this study early in the third quarter. The primary endpoint is overall response rate.

Our second potential path to approval is through DUO, our Phase 3 randomized monotherapy study of duvelisib in approximately 300 patients with relapsed/refractory CLL. This study is designed to evaluate the safety and activity of duvelisib compared to ofatumumab, an anti-CD20 antibody approved in the study. The primary endpoint is progression-free survival for PFS. We completed patient enrolment in DUO last November. As Adelene mentioned, this study has an event-driven PFS interim analysis, which we expect to occur early in the second half of 2016.

Together, the DYNAMO and DUO studies represent important opportunities for duvelisib. In relapsed/refractory iNHL, double refractory patients are difficult to treat and have very limited treatment options. In relapsed/refractory CLL, we believe duvelisib may offer patients the first PI3-kinase monotherapy treatment option without requiring combination with Rituxin.

In addition to our registration-focused studies, we are advancing clinical trials designed to further differentiate duvelisib. In iNHL, our strategy includes improving upon and replacing chemotherapy.

The BRAVURA study is evaluating the potential of duvelisib to improve upon chemotherapy, and began enrolling patients in December. BRAVURA is a Phase 3 double-blind placebo-controlled study in approximately 600 patients with relapsed iNHL, designed to evaluate the safety and efficacy of duvelisib plus Rituxin and bendamustine compared to placebo plus Rituxin and bendamustine, and the primary endpoint is PFS.

Turning to our FRESCO study, this trial addresses an opportunity to eliminate chemotherapy for some patients. A meta-analysis from several studies reported by Carla Casulo and her colleagues at the University of Rochester was published in the Journal of Clinical Oncology last year. The data demonstrate that approximately 20% of patients with follicular lymphoma progressed within two years upon initial diagnosis and treatment with R-CHOP, a chemotherapy cocktail commonly used for the treatment of follicular lymphoma, and that early progression is associated with shortened survival.

The lymphoma community agrees that this is an underserved population. Given the unique and targeted biological mechanism of action for duvelisib, we are evaluating whether we can address an important medical need for these patients who do not have durable responses to chemotherapy. This Phase 2 study recently began enrolling and is designed to evaluate the safety and efficacy of duvelisib plus Rituxin versus R-CHOP in approximately 230 patients with relapsed follicular lymphoma. The primary endpoint is PFS.

Another opportunity for differentiations in iNHL includes evaluating duvelisib in early alliance (inaudible) therapy. CONTEMPO is an ongoing 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, a next-generation Rituxan.

The primary endpoint includes safety measures and complete response rate. We expect to report top line data from this trial by the end of this year.

With respect to differentiation in CLL, we are continuing to enroll patients in our SYNCHRONY study designed to evaluate duvelisib in combination with Gazyva in CLL patients previously treated with a BTK inhibitor. The post BTK setting represents a significant unmet need, as there are limited treatment options for these patients who progress on or are intolerant to a BTK inhibitor therapy.

Our ultimate goal is to offer more patients the potential for achieving a curative outcome. And we believe the best chance of seeing cure rates increase in hematologic malignancies is through combination therapy.

AbbVie is initiating a Phase 1b/2 clinical study of duvelisib in combination with venetoclax, their investigational BCL-2 inhibitor. This is a comprehensive study designed to evaluate the safety and efficacy of the combination in approximately 174 patients relapsed and refractory iNHL, aggressive NHL, small lymphocytic lymphoma, and/or CLL. The rationale of this study is based on extensive preclinical research which we observed strong synergy between duvelisib and venetoclax, which we reported last year.

Our commitment to innovation and improving patient care has led us to broaden our oncology portfolio into solid tumors with a new approach in immuno-oncology. In 2015, we announced the addition of IPI-549, a small molecule development candidate that may play an important role in anti-tumor immunity by selectively inhibiting PI3-kinase-gamma.

Last fall, we presented research supporting a mechanism of action by which IPI-549 inhibits the function of a tumor associated immune suppressant macrophages within the microenvironment, potentially enabling an enhanced anti-tumor immune response. We also reported preclinical data showing 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 IPI-549 in combination with checkpoint inhibitors showed greater tumor growth inhibition than either treatment as a monotherapy.

We began enrolling patients in our Phase 1 trial of IPI-549 last month. This is a robust study designed to explore the dose, safety, and activity of 549.

The first part of this study includes a dose escalation phase testing IPI-549 as monotherapy, and in combination with an anti-PD-1 antibody therapy. Once dose escalation is complete, 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 and complementary mechanisms of actions, will enhance activity in solid tumors.

In summary, 2015 was an important year for R&D programs. We are pleased with our progress, and we're focused on delivering results in 2016, with the potential opportunity to bring duvelisib to patients with hematologic malignancies.

And with that, I will pass the call over to Larry.

Thank you, Julian. I'll now provide an overview of our financial results for year-end 2015.

By December 31, Infinity had total cash investments of $245.2 million compared to $333.2 million at December 31, 2014. As Adelene mentioned, we anticipate earning $200 million in regulatory milestones from AbbVie in the fourth quarter of 2016. This includes a $125 million milestone associated with the acceptance of our planned NDA filing, and a $75 million milestone upon acceptance of AbbVie's planned MAA filing.

While the acceptance of these submissions are expected to occur in the fourth quarter of 2016, the payments of these milestones will likely not occur until the fourth -- first quarter of 2017. Excluding the $200 million in anticipated milestones, we expect to end 2016 with a cash investment balance ranging between $45 million and $65 million.

Total revenue during 2015 was $109.1 million. This included $75.2 million in licensing fees associated with the $130 million milestone payment from AbbVie for the completion of patient enrollment in DYNAMO and $33.9 million in R&D services associated with our AbbVie collaboration. By comparison, total revenue during 2014 was $165 million, which was composed of a $159.1 million license fee and $5.9 million in R&D services, both of which are related to the $275 million upfront milestone payment from AbbVie.

Turning to our expenses, R&D expense for full-year 2015 was $199.1 million, compared to $143.6 million for 2014. R&D expense for 2015 included a $52.5 million payment related to the exercise of an option to buy out the Company's royalty obligation to Takeda Pharmaceutical Company Limited for duvelisib worldwide oncology sales.

In 2014, R&D expenses included a $10 million milestone payment to Takeda for the initiation of the first duvelisib Phase 3 study, and $5 million payment to Takeda related to the royalty buy-out option. Excluding these payments, the increase in R&D expense in 2015 was primarily due to higher clinical development expenses for duvelisib.

G&A expense was $37.1 million for 2015 compared to $29.3 million for 2014. The increase was primarily due to additional personnel, as well as commercial expenses as we prepare for a potential 2017 launch.

Net loss for the full year 2015 was $128.4 million, or a basic and diluted loss per common share of $2.62, compared to $17.4 million net loss or basic and diluted loss per common share of $0.36 for 2014. The 2016 financial guidance we provided in January remains unchanged.

In closing, 2016 is the year of results for Infinity. We expect important data in the second half of this year, which, if positive, will allow us to file with regulatory authorities in the US, and will allow our partner AbbVie to file globally outside the US.

We have a strong partner in AbbVie with whom we plan to launch duvelisib globally in 2017. Our immuno-oncology candidate IPI-549 continues to progress, and we are confident that we have the elements in place to make a meaningful difference in the lives of people with cancer.

No we will open up the call for Q&A. Operator?

(Operator Instructions)

Mike King, JMP Securities.

Hello. Thanks for taking my questions. I had a couple quick ones here. One to kick off for Larry, how should we think about the -- you received a partial milestone payment last year for full enrollment, and we're looking for another approximately $55 million from that. How do we think about that playing out over the course of this year?

I think I understand your question.

So we received a full milestone payment of $130 million, which we are going to be recognizing based on the proportion of performance method over the term of the collaboration. So the cash that we would be expecting on our next milestone: $200 million? The next milestones will not be reflected under a proportional four method; those will all be recognized upon the earnings in favor of those milestones.

But this one, because of the proportional four method, will be recognized over a period of time. So a portion of it was reflected upfront in our 2015 financials, and you will see additional reflected in 2016 and ensuing years.

Okay, will you break that down in the [KO to queue] when you report that?

Yes.

Okay. And then, Julian, you didn't update -- you did a great job updating us on a lot of the different trials, but the one that I thought was conspicuous by its absence was DYNAMO+ R, can you just give us an update on that?

Yes, in the past I think we have updated that we have terminated DYNAMO+ R. It turns out that this trial was extremely difficult to enroll --

Oh, right.

-- with Rituxan as the control arm, and we found that very few patients were able too -- were available to enroll in that study. So we have instead replaced it with BRAVURA, which is the combination I alluded to, combination with bendamustine Rituxin (multiple speakers).

Right. Okay, my bad, thanks very much.

Jim Birchenough, Wells Fargo.

Good afternoon, it's Nick in for Jim. [south 90's traveling]. There is a broad, broad program with duvelisib in, so, to use Mike's phrase, conspicuous by its absence, combinations with lenalidomide or with ibrutinib. So can you talk a little bit about how you view duvelisib inning in, and perhaps where those molecules are going to get used? I know you have a trial that's ongoing in BTK [failures]. But what about trying to move duvelisib further up?

What might be helpful is just to contextualize your question in our development strategy for duvelisib. And so our first approach is to advance it as a monotherapy and that's the basis of approval from what we hope will be from DYNAMO or DUO.

The next is to combine with today's standard of care, which is really highlighted in trial plus Rituxin and plus BRAVURA. Then the next issue, modify and advance today's treatment paradigms by eliminating chemotherapy and that's FRESCO. And then ultimately we believe the gold standard is novel combinations where we can get to more curative outcomes as reflected in our trial of duvelisib plus venetoclax.

That outlines a very broad and robust development strategy today, and as Julian mentioned, we believe that the future will continue to be combination therapy, and so we hope to evaluate duvelisib much more broadly with other novel combinations. And Julian can speak to what some of those are.

Yes, so you mentioned lenalidomide, and we are aware that another delta inhibitor was combined with lenalidomide, and it was stopped early for profound toxicities, pneumonitis in particular. So not all drugs can be combined and this is something we're very mindful of, both in the preclinical setting and, of course, in patients, as well. So we are very judiciously picking our combination pairs with strong mechanistic rationale and preclinical laboratory data, and we carefully translate those combinations for powerful agents in combination to seek cures for patients.

And you also asked about duvelisib plus ibrutinib; that's a combination that we are very interested in. We have some very compelling preclinical data from which we've seen synergy. So that's certainly one that we are interested in exploring at some point in the future.

Thanks, and actually thanks, Julian. That's sort of where I was heading, really, a little bit on that toxicity. Have you been able to reproduce that in preclinical studies?

Reproduce what?

The toxicity associated with the Gilead PI3K-delta with lenalidomide.

We have not found the need to reproduce toxicity in our labs given the clinical results.

I'm just trying to find out if there's a point of differentiation between the two compounds; that's really what I'm getting at.

Yes, though we have not attempted to combine with lenalidomide and have no intention of doing so.

Okay, and then maybe a follow-up.

I know there was some earlier data from PI3K-delta and its potential role in immuno-oncology. Have you teased out the components between the gamma inhibition and the delta innovation with solid tumors. Let's say you've selected gamma, what was it about gamma as opposed to [amadelto]

Indeed we have. We've done a lot of work with delta selective and gamma selective compounds, notably IPI-549. And we selected IPI-549, a gamma selective inhibitor, based on its effects on the myeloid suppressive cells, and the immuno-suppressive macrophages found in the tumor microenvironment. And we found that inhibiting gamma selectively spares the delta activity required in T cells who initiate a CDA cytolytic immune response.

Sounds like a jolly good plan to me. Thank you.

You're welcome. We're trying hard.

Michael Yee, RBC Capital.

Hello. Thanks for the questions. This is Andrew Tian for Michael Yee. Just apologies if these questions have been asked already.

When can we expect to get data from the combo trial with ABT-199? And when do you think we can get Phase 1 data for 549? By year end, or do you foresee that more of an ask 2017?

Thanks.

So we're, first of all, very pleased that AbbVie has undertaken the combination with ABT-199 and the patients will be enrolled imminently. There are two portions of this trial. The first is to assure that the clinical pharmacology is appropriate and there's a drug interaction portion of this trial, and then there will be the determined expansion phase or the recommended Phase 2 dose for both drugs.

So this will be ongoing throughout this year. As I say, the trial is being conducted by AbbVie. So we look for them to announce and make disclosures about when we will be able to see data.

Okay.

And for IPI-549, we've just begun the dose escalation, enrolling our first patients, so it depends on the dose escalation and the PK/PD results, which we are monitoring very carefully. And we hope we will have a recommended Phase 2 dose. It's a little too early to project when we will be reporting data. But we will find an appropriate medical meeting to let you know how we are doing with IPI-549.

Okay, that's very good, thank you.

Anupam Rama, JPMorgan.

Hello. This is Eric in for Anupam this afternoon. Thanks for taking the question. Just a couple quick ones from us. First around filing timelines, in the event, in the Nurum analysis in DUO is too premature, just wondering if you could walk us through the filing strategy in the US and Europe; would you move ahead into the non-Hodgkin and in iNHL alone or would you wait for DUO to read out?

Absolutely. What we like about having the two paths is they are distinct and independent. So either trial that is positive we would move forward with filing.

Okay, great. Thanks. And just wondering if you could give us some color around recruitment in the SYNCHRONY trial, and when we might expect to see data there? Thanks.

It's been challenging to enroll patients who have progression BTK inhibitor treatment because there are many investigational agents. However, we are also very interested in the patients that are intolerant to BTK inhibitors, and so have amended the protocol to include those patients, as well.

Okay, great. Thanks for taking the questions.

(Operator Instructions)

Mike King, JMP Securities.

Yes, actually my question was answered. I was also curious about the first time we might be able to see the data from the combination with venetoclax.

It's always good to hear from you again, Mike.

Why, thank you.

Katherine Xu, William Blair.

Hi, good afternoon. So --

Katherine, please check your mute button. And I am not showing any further questions at this time. I would now like to turn the call back over to Adelene Perkins for further remarks.

Thank you, Andrea, and thank you everyone for joining us today. We appreciate your interest and time, and we look forward to updating you throughout a very important 2016, the year of results for Infinity. Have a nice night.

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