Infinity Pharmaceuticals Inc (INFI) 2017 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 financial results for the fourth quarter and full year 2017. My name is James, 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.

Now, I'd like to introduce your host for today's call, Jayne Kauffman, please go ahead.

Thank you, James, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress, and review of our fourth quarter 2017 and full year financial results.

With me here today are Adelene Perkins, Chief Executive Officer; Dr. Claudio Dansky Ullmann, Senior Vice President Clinical Development and Larry Bloch, President; Dr. Jeff Kutok, our Chief Scientific Officer is also here to take questions, and we'll open up the call for Q&A following our remarks.

The press release, issued this afternoon, 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 objectives, the therapeutic potential of our product candidates, our strategic plans and strategies and financial projections.

Our actual results may differ materially from what we project today, due to a number of important factors, including the considerations described in the risk factors section of our annual report, on Form 10-K, for the full year 2017 and in our filings we make with the SEC.

These forward-looking statements represent our views only as of today, and we caution you that we may not update them in the future, whether as a result of new information, future events or otherwise.

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

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

Today, we're pleased to report on our recent progress at Infinity, including advancements we've made with IPI-549, our first-in-class oral-selective PI3-kinase-gamma inhibitor.

We at Infinity have a significant opportunity with IPI-549, which represents a novel approach within immuno-oncology, and is the only selective PI3-kinase-gamma inhibitor in clinical development.

The Infinity team and our investigators are advancing the clinical development of IPI-549 with a great sense of urgency to bring this potentially transformative treatment forward for patients.

IPI-549 targets and plays a unique role in reprogramming macrophages from a pro-tumor to an antitumor function, thus reducing immune suppression and increasing immune activation.

We are evaluating IPI-549, both as a monotherapy and in combination with nivolumab, a PD-1 immune checkpoint inhibitor in a robust Phase Ib clinical study in approximately 200 patients with advanced solid tumors.

We're very encouraged by the data for IPI-549, including the clinical data we presented at the Society of Immunotherapy of Cancer, or SITC, annual meeting in November, which helped build great momentum for the program and demonstrate IPI-549's potential.

First of all, IPI-549 is clinically active, having shown single agent activity, including an objective response in a patient with mesothelioma.

This is significant, given that aside from checkpoint inhibitors, very few, if any, immuno-oncology agents show objective responses as a monotherapy.

Second, IPI-549 has potential as a combination therapy based on demonstrated activity in combination with nivolumab including an objective response in a patient with adrenocortical cancer.

Third, IPI-549's activity is on-mechanism.

We have shown that IPI-549 decreases pro-tumor immune suppression and increases anti-tumor immune activation. This is particularly meaningful, given the heavily pretreated and heterogeneous nature of the all-comer solid tumor patient population being treated.

Fourth and importantly, IPI-549 is very well tolerated with no dose limiting toxicities observed as a monotherapy.

IPI-549 was also well tolerated in combination with nivolumab, which is particularly important, given the expectation that immuno-oncology drugs will be most effective when administered in combination therapy.

We are pleased with the rapid progress we are making with this study, the monotherapy and combination dose-escalation components of the study, and we'll very quickly add to the monotherapy expansion component of the study. There's been great enthusiasm and momentum for the combination expansion cohorts, which are now enrolling.

We have expanded the study to include 3 new combination cohorts of IPI-549 plus Opdivo, and enrollment is now open for all 6 disease-specific combination cohorts, with the seventh cohort, in patients with high baseline blood levels of myeloid-derived suppresser cells or MDSCs, set to open for enrollment in the next few weeks.

Our combination expansion cohorts, underway, are designed to evaluate several distinct hypotheses of IPI-549 in combination with nivolumab.

One is IPI-549's ability to overcome resistance to checkpoint blockade, which is being tested in 3 separate cohorts in patients with non-small cell lung cancer, melanoma and squamous cell carcinoma of the head and neck.

Another is IPI-549's ability to work where checkpoint inhibitors have limited activity, effectively turning cold tumors hot, which is being tested in patients with triple-negative breast cancer who have not been previously exposed to checkpoint inhibitors.

In addition, we're seeking to confirm IPI-549's activity in patients with mesothelioma, adrenocortical carcinoma and high baseline blood levels of MDSC's where initial responses with IPI-549 have been observed.

We expect to have a flow of data throughout 2018, starting in the second quarter, when we expect to report data from the monotherapy expansion portion of the study, which importantly will include translational -- clinical and translational data from paired tumor biopsies, the completed combination dose escalation evaluating IPI plus nivolumab, and early data from combination expansion cohorts evaluating IPI plus nivolumab in predefined disease-specific patient populations. Though this will be very preliminary data as we just recently began enrolling the combination expansion cohorts.

In the second half of 2018, we look forward to providing more mature data from the disease-specific combination expansion cohorts as well as initial data on the MDSC high combination expansion cohort, with clinical and translational data including insights from paired tumor biopsies.

To ensure that we deliver on the significant opportunity before us with IPI-549, we are continuing to attract great experienced talent to support our efforts.

We recently announced that David Beier is joining our Board of Directors. David is a Managing Director of Bay City Capital, and spent 2 decades as part of the senior management teams for Amgen and Genentech. He brings invaluable perspective regarding strategy for entrepreneurial biotechnology firms and the industry in general.

In addition, Dr. Marie-Louise Fjällskog has been appointed as Vice President of Clinical Development. Dr. Fjällskog has over 25 years of experience in clinical oncology, translational research and drug development.

She joins Infinity from Novartis where she served as a Clinical Oncology Program leader, and was the global lead for several immuno-oncology programs, including those targeting CSF-1 and PD-1.

We're also happy to announce the promotion of Dr. Suresh Mahabhashyam to Vice President, Safety and Risk Management.

Dr. Mahabhashyam has over 20 years of experience in medical practice and epidemiology, and has spent the last decade focused on drug development at Infinity, Alexion and Allergan.

We've also established a Scientific Advisory Board with several thought leaders in immuno-oncology.

These include: Dr. Dmitry Gabrilovich, a thought leader in myeloid cell biology from the Wistar Institute; Dr. Roy Herbst, a leader in lung cancer treatment and research and Chief of Medical Oncology at Yale Cancer Center; Dr. Stephen Hodi, a leader in the development of immune therapy and Director of the Center for Immuno-Oncology at Dana-Farber Cancer Center; and Dr. David Munn, a pioneer in T cell activation and IDO research at the Georgia Cancer Center.

Together, we look forward to delivering on the clinical promise of IPI-549 as a potentially first-in-class immuno-oncology drug. We continue to be driven by the magnitude of unmet need for better treatment options for patients. The more we learn about IPI-549, the more confident we are that it can play an important role in addressing these needs. And now, I'll turn the call over to Claudio.

Thanks, Adelene. This afternoon, I will provide updates on the progress we have made in our clinical study of IPI-549.

2018 will be an important year for the program.

The trial has generated a lot of positive momentum, which has further accelerated in the past few months as combination expansion cohorts began enrolling.

IPI-549 is the only selective PI3K-gamma inhibitor in the clinic and represents a novel approach within the field of immuno-oncology, targeting macrophages in the immune-suppressive tumor microenvironment.

This field continues to emerge as a compelling approach to reduce immune suppression.

As we have discussed previously, our rationale for our multi-faceted Phase Ib clinical study was based on the mechanism that targeting PI3-kinase-gamma with IPI-549 reprograms tumor-associated macrophages from an M2, or pro-tumor, to an M1, or anti-tumor, function.

In addition, preclinical data demonstrated that IPI-549 overcomes resistance to checkpoint inhibition, and enhances the activity of checkpoint inhibitors, which was the basis for our checkpoint combinational therapy strategies.

The data from the monotherapy dose escalation portion of the trial serves as an underpinning for the entire study. And we are encouraged by the favorable results that we presented at SITC showing that IPI-549 was well tolerated on clinically active dose once daily.

Among 18 patients evaluable for activity, there was a 44% clinical benefit rate, defined as patients who had remained on treatment for at least 16 weeks, including one partial response in a patient with advanced peritoneal mesothelioma who has remained on treatment for over 1 year. Among 19 patients evaluable for safety, no dose limiting toxicities were identified, and a maximum tolerated dose was not reached.

The majority of side effects reported were grade 1 or grade 2, and there were no treatment related serious adverse events or deaths.

The pharmacokinetic and pharmacodynamic properties of IPI-549 appear favorable with near complete and sustained inhibition of P13-kinase-gamma, at doses at or above 20 milligrams QD, supporting once daily dosing of IPI-549.

Based on these findings, IPI-549 dose at 60 milligrams QD was selected as the dose for the monotherapy expansion cohort.

At SITC, for the first time, we also reported early translational data from peripheral blood samples of patients in the monotherapy dose escalation.

Here, the data showed that IPI-549 treatment across multiple tumor types and dose levels resulted in reduced immune suppression with reinvigoration or proliferation of exhausted CD8+ T cells, and increased immune stimulation without regulation of interferon-gamma responsive factors.

Additionally, initial translational data showed that clinical benefit was associated with increased numbers of immune-activated monocytes, suggesting a biologic correlate can be identified in patients who remained on treatment longer.

The monotherapy expansion portion of the trial is now fully enrolled, and we have completed the combination dose-escalation portion. We will be reporting data on this in the second quarter of 2018.

Six disease-specific combination expansion cohorts are open for enrollment at the recommended Phase II dose of 40 milligrams once daily of IPI-549 plus nivolumab at 240 milligrams every 2 weeks in patients with non-small cell lung cancer melanoma, triple-negative breast cancer, head and neck cancer, mesothelioma, and adrenocortical carcinoma.

The cohort of patients with high baseline blood levels of myeloid-derived suppressor cells will be open for enrollment in the next few weeks.

We look forward to sharing more mature data throughout this year that will be crucial to the development of this first-in-class product candidate.

Now, Larry will review our financial results for the quarter.

Thanks, Claudio. 2017 was a year of important progress for Infinity and IPI-549.

Strong financial discipline has enabled us to extend our cash runway from the first quarter 2019 into the third quarter 2019, thereby ensuring that we have the key resources in place to execute our development plans for IPI-549.

At December 31, 2017, we had total cash, cash equivalents and available-for-sale securities of $57.6 million compared to $92.1 million at December 31, 2016.

Revenue for the year was $6 million, all of which related to the milestone payment from Verastem.

Revenue from 2016 was $18.7 million related to Infinity's previous collaboration agreement with AbbVie.

R&D expense for 2017 was $20.8 million compared to $119.6 million for 2016.

The decrease in R&D expense was largely related to the 2016 restructuring activities and the out-licensing of duvelisib to Verastem.

General and administrative expense was $21.6 million for 2017, as compared to $42.2 million in 2016.

The decrease in G&A expense was primarily due to 2016 restructuring activities.

Net loss for 2017 was $41.8 million, or basic and diluted loss per common share of $0.83, compared to net loss of $30.1 million, or basic and diluted loss per common share of $0.61 for 2016.

Our updated 2018 financial guidance is as follows: We expect 2018 net loss to range from $35 million to $45 million, and we expect to end 2018 with the cash and investment balance ranging from $15 million to $25 million.

Based on our current operating plans, which importantly exclude additional funding or business development activities, we anticipate that our existing cash, cash equivalents and available-for-sale securities provide a cash runway into the third quarter of 2019.

We expect to deliver important data from several distinct clinical hypotheses being evaluated in our approximately 200-patient Phase Ib clinical study of IPI-549 within our current cash runway.

This cash runway does not include the potential $22 million payment from Verastem, upon the first regulatory approval of duvelisib, or a potential $2 million milestone payment from PellePharm, a private company, upon initiation of a Phase III study for the hedgehog inhibitor program, which we licensed to them in 2013.

With continued rigorous financial management and potential duvelisib approval milestone, we would expect to extend our cash runway into 2020.

We are very pleased with the progress we've made so far with IPI-549, and we look forward to updating you throughout the year as we report additional safety and activity data from the program.

At this time, we can open the call for questions. Operator?

(Operator Instructions) Our first question comes from Katherine Xu with William Blair.

I just have a quick question. In the patients who are MDSC high, what are the other biomarkers that are correlating to that phenotype? For example, PDL status or IDO status. Anything you can comment?

Thanks for the question, Katherine. I'm going to turn that over to Jeff Kutok who is our Chief Scientific Officer, and led the discovery of IPI-549 is, as we said in the prepared remarks, we're very excited about the MDSC high cohort, which will be opening soon, and Jeff can get into the details behind your question of other associated biomarkers.

Katherine, it's Jeff. So if I understand your question correctly, are you asking about other markers on the myeloid derived suppressor cells? Or other associated biomarkers that may be associated with that cohort of patients?

Yes. So I meant to say PDL-1 on the tumor cells, in those patients who are MDSC high. I don't know whether those are looked at?

So that's data that we're working on -- working through and that we're hoping to present on -- at future meetings.

Our next question comes from Anupam Rama with JP Morgan.

It's Eric in for Anupam. Congrats on the progress. Just looking ahead to 2Q data readout here. Based on what you're seeing in terms of patient recruitment and the combination expansion cohort -- cohorts rather with nivolumab, is there a particular histology or set of histologies you'd have us focus on? Or has the data? Any color you can kind of provide around indication and patient numbers would be helpful.

Sure. So the combination expansion cohorts, which we've just begun enrolling, are in 6 defined diseases. And so that is in the non-small cell melanoma, head and neck, adrenocortical and mesothelioma and triple-negative breast cancer. So those are the 6 disease types, and for each of those there are different hypotheses being tested with respect to prior exposure to PD-1. Beyond that, it's because they've just opened, it's really too early to say what will be presented. What we can say is that the data will be early in the second quarter. What will be our complete data set is from the combination dose escalation, at which we determined our recommended Phase II dose. Anything you would like to add?

Just to further clarify if I understood also part of your question, that all the cohorts are currently open, and we're getting from investigators, we're not focusing in a particular tumor type in terms of accelerating the enrollment or generating data. The patients are coming with the different indications, as are being enrolled in the different sites. So we will have to see as we have more enrollment in figures down the road, which ones are doing more or getting more patients. But right now, it's open for all of them.

Okay. Got it, that's helpful. I guess, maybe with the dosing-escalation combination portion, fully accrued, can you just remind us of the number of patients, or at least the number of sort of dose levels that you were evaluating here? And just maybe how you might be thinking about the mix of tumor indications there?

Sure. So I'll leave that off and turn it to Claudio to amplify. So we tested 3 different dose levels, we were working with the approved dose level for nivolumab at 240 milligrams once every 2 weeks, and we did 3 dose levels of IPI-549 as oral once daily. That was at 20 milligrams, 30 milligrams and 40 milligrams, and selected the 40 milligrams once daily as our go-forward dose for the combination expansion cohort. We'll have a total of 31 patients that were in the combination dose escalation.

Our next question comes from Mike King with JMP Securities.

So along similar lines, I'm just wondering, if you could tell us in the Phase Ib, I'm assuming that that's where you have the MDSC high patients? Or is that also in the Phase II combination?

No. That's in the Phase Ib portion. That's one of our 7 expansion cohorts.

Okay. Okay. So would it roughly be 1/7 of the 200 that you expect to enroll? Or is it too early to say precisely what that number would look like?

No. No. We know for each of our 7 expansion cohorts, I can tell you the enrollment number. So it will be 20 patients each for non-small cell lung cancer, melanoma and head and neck cancer. It will be 29 patients in triple-negative breast cancer. It will be 10 patients in mesothelioma and adrenocortical and 20 patients with high MDSC levels. And as we mentioned, the cohort for patients who have high MDSC will be opening soon. So we won't have data on that cohort in the second quarter, we'll have data on that in the second half of the year.

Okay. Okay. That's helpful. So further to that cohort, can you tell us if -- are you going to be doing any kind of immunophenotyping? In other words, looking for the proportion of M1 versus M2, pre and post treatment with IPI?

So I'll turn that to Jeff to address.

Yes. So we're continuing to do a full complement of translational studies in all of these cohorts including immunophenotyping, and in the patients in the expansion combinations cohorts, where -- and the monotherapy expansion cohort where we're obtaining pre- and on-treatment biopsies to evaluate changes in the tumor microenvironment.

Okay. Great. That's good to know. Any imaging studies included in that?

No.

No.

No. Okay. And then just in the combination, do you suspect you will be getting -- I assume you'll be getting patients who have responded and relapsed, patients who have never mounted a response. Do you have any idea of, sort of your ideal breakdown between those 2 cohorts to really get a clear signal out of the combination?

That's a great question. At this point, we really don't know. We discussed this a lot. We will see as enrollment goes, and what type of patients flow into the cohorts, we'll see how that turns out.

And that's for the 3 cohorts in lung, melanoma and head and neck, where that's an inclusion criteria is that patients will either have developed resistance or have de novo resistance to a checkpoint inhibitor. The other cohorts, like in triple-negative breast cancer, we're going to a checkpoint inhibitor-naive patient population.

In other words, we're agnostic for mesothelioma.

Sorry, I couldn't hear the last...

That's for mesothelioma and adrenocortical carcinoma, we're being agnostic. So patients that have been exposed or not previously to (inaudible) could be enrolled for those 2 cohorts.

That's most important ...

But (inaudible) that's the only one that sort of purely checkpoint naive?

Yes, this is the only one purely checkpoint naive. Correct.

Sorry, Adelene, I cut you off.

No. I was just going to say we have the 3 that are in patients who have developed resistance. We have the 1 in the patients who are naive. And then we have the other 3 that checkpoint inhibitor is not part of the hypothesis, so that's not been in inclusion criteria.

(Operator Instructions) Our next question comes from Jim Birchenough with Wells Fargo Securities.

This is Yanan, dialing in for Jim. So first question. Curious about what are the typical tumor types that's associated with the high MDSC? And whether you are focusing your enrollment in the high MDSC cohort in those tumor types?

Yan, I'll start that off and then turn it over to Jeff. We're going to learn a lot about MDSC levels in patients as we use that as a screening mechanism. So we've looked with the collaborator we're working with to our matrix in this test. And they have shared that in general patients meet the criteria for high MDSC in about 30% to 50% of the patients, but Jeff can discuss it in more detail.

Yes. I think with respect to this cohort, the exciting thing is, we're being agnostic to tumor type, and we're focusing on patients who have a high circulating MDSC levels with cancer. So we -- you see a range of MDSC levels in patients with cancer that seems to increase with stage of disease and -- so we're hoping that this biomarker will identify patient population that's sensitive to IPI-549 plus nivolumab and that sensitivity will translate across multiple different tumor types.

Another thing that I would highlight is that to ensure that we're not -- the MDSC high cohort is not competing with the enrollment for other disease-specific patients who qualify for the 6 disease-specific cohorts will not be eligible for the MDSC cohort, but we will go back and do a retrospective analysis on the MDSC levels of the patients in those 6 disease-specific cohorts. So we'll have both the retrospective on all of the patients in the combination expansion but the prescreening in the MDSC targeted cohort.

Got it. That's very helpful. And also, could you talk about if there is any correlation between MDSC and tumor-associated macrophages? And also perhaps what effect does 549 have specifically on MDSC cells?

Yes. So the tumor-associated macrophages, the M2 immune suppressive macrophages are highly related, functionally, to the circulating myeloid-derived suppressor cell. They have a very similar ability to inhibit T cell activation and proliferation. We've shown preclinically in our studies, published in Nature in 2016, that IPI-549 can overcome the suppressive effect of MDSCs that we generated in culture from human blood on the ability of T cells to proliferate. So 549 can overcome the suppressive effects of MDSCs in vitro. So we're optimistic that we'll see similar effects on MDSCs that we would on tumor-associated macrophages with IPI-549.

We're also interested in this cohort because there's been published data that in patients with high levels of MDSCs, they don't respond as well to checkpoint inhibition, which makes sense given the immunosuppressive nature of those MDSCs. And so that's where we hope that we can reverse that trend by adding 549.

I see. And also in your translational work, that you have done for the dose-escalation arms as well as for the monotherapy dose-expansion arms, have you got a chance to look at MDSC levels and also the effect of 549 on those markers?

So what we've made public to date is that in some of our clinical responses in our Phase Ib trial, these patients have had a high baseline levels -- blood levels of MDSCs. And we're looking forward to providing a more complete picture on the MDSCs and associated other clinical and translational data in our upcoming presentation.

And the data that Jeff is referring to was included in our SITC presentation in November, where we showed -- Dr. Hong in his presentation showed that there was -- that patients who had responded had high MDSC levels.

(Operator Instructions) At this time I'm showing no further questions. So I would like to turn the call back to Adelene for closing remarks.

Thank you, very much, James. We're excited about the opportunity we have with IPI-549, and we look forward to updating you all throughout 2018. Have a good day, everyone, and thank you, for joining today's call.

Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you, very much, for your participation. You may now disconnect. Have a wonderful day.