Infinity Pharmaceuticals Inc (INFI) 2018 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 2018. My name is Skyler, 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 would like to introduce your host for today's call, Jayne Kauffman. Please go ahead.

Thank you, Skyler, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our second quarter 2018 financial results. With me here today are Adelene Perkins, Chief Executive Officer; Larry Bloch, President; and Dr. Jeff Kutok, our Chief Scientific Officer. We will 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-Q for the second quarter of 2018 and in other 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, and thanks to everyone for joining us today. We are very pleased with our second quarter progress and with additional recent positive developments since the end of the quarter.

First, we are delighted to welcome Dr. Sam Agresta to Infinity as our Chief Medical Officer. Sam joins us from Agios, where he was the Vice President and Head of Clinical Development. At Agios, Sam led the clinical development of the company's oncology program, which results within the approval of 2 first-in-class targeted drugs for the treatment of leukemia over the last year. The first was IDHIFA, and within the last month, TIBSOVO, both of which were approved on compelling Phase I single arm monotherapy data.

In addition to Agios, Sam was in clinical development at Genentech and Merrimack Pharmaceuticals and has been involved in the development of 8 different oncology drugs across these 3 companies over the last decade, having previously practiced academic medicine for 10 years. Sam joins us at a critically important time as we expect data on IPI-549 in the second half of the year that will inform and enable us to prioritize future development paths for the program.

With that, let me now turn to the clinical advancements we are making with IPI-549, our first-in-class oral selective PI3-kinase-gamma inhibitor.

As you know, for people with cancer, notwithstanding the recent progress with immunotherapy, there remains a significant need for better treatment. The majority of patients either do not respond to existing immunotherapies or they initially respond and subsequently relapse. There is growing evidence that macrophages and myeloid-derived suppressor cells, or MDSCs, play an important role in eliminating the effects of many immunotherapies. IPI-549 targets these macrophages and MDSCs and plays a unique role in reprogramming them from a pro-tumor to an antitumor function, thus, reducing immune suppression and increasing immune activation.

We are currently evaluating IPI-549 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.

At this year's American Society of Clinical Oncology, or ASCO, annual meeting, we presented promising data on IPI-549 in combination with nivolumab, which showed that IPI-549 was well tolerated and clinically active, with the expected on-mechanism markers of reduced immune suppression and increased immune activation. We are excited by these data as they reinforce what we have already seen in patients treated with IPI-549 monotherapy. Our Chief Scientific Officer, Dr. Jeff Kutok, will detail these findings shortly.

In the second half of 2018, we anticipate being able to share more mature data from the combination expansion portion of the trial. These data will contribute to the scientific, medical and clinical evidence guiding future development of IPI-549 in combination therapy.

Our combination expansion cohort have been rigorously designed to show the contribution of IPI-549 over nivolumab. Rather than studying the combination in patients likely to respond to a checkpoint inhibitor, which might lead to the highest response rate but be difficult to interpret, we are studying the combination in patients not slightly to respond to a checkpoint inhibitor. So any responses are a strong indication of IPI-549 activity in clinical benefit over the checkpoint inhibitor.

While this sets a very high bar for IPI-549, it ensures a high signal-to-noise ratio in interpreting activity, which is critically important in guiding our future development decisions and increasing the probability of success of future trials with IPI-549.

For example, in 3 of our combination expansion cohorts in patients with non-small cell lung cancer, melanoma and squirm cell carcinoma of the head and neck, patients must have a CT scan documenting progression on a checkpoint inhibitor as the patient's therapy immediately prior to enrolling in our study. Any activity in these patients will be indicative of the ability of IPI-549 to overcome resistance to checkpoint inhibitors, an area of extremely high need and would pave a clear path for future development.

We are also seeking to clinically verify preclinical evidence of 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.

And lastly, we are seeking to confirm IPI-549's activity in patients with mesothelioma and adrenocortical patients and carcinoma where we have reported initial responses with IPI-549, and in patients with high baseline blood levels of MDSCs, which are correlated with poor response to checkpoint inhibitor therapy.

We are pleased by the enrollment and ongoing momentum in these combination expansion cohorts, and look forward to presenting data from this component of the trial later this year.

This quarter, we were also pleased to enter into a clinical collaboration with Arcus Biosciences to investigate IPI-549 in 2 triple combination therapies with Arcus' AB928, a dual adenosine receptor antagonist; AB122, Arcus' anti-PD-1 antibody; and chemotherapy in triple-negative breast cancer and ovarian cancer. One of these triple combination therapy trials will evaluate IPI-549 in combination with AB928 and AB122, and the second will evaluate IPI-549 in combination with AB928 and chemotherapy. We believe that combining these agents may result in enhanced reduction of pro-tumor immune suppression and increased antitumor immune activation, which is central to IPI-549's mechanism of action and potential therapeutic benefit.

The study of these triplets has also been rigorously designed to allow us to identify IPI-549's unique contribution to the triplet, given that we will be able to compare data from the triplet, which include IPI-549, to Arcus' double -- doublet combination trials in the same patient population, which do not include IPI-549. We look forward to providing an update on top line data from these studies in 2019.

As you can tell, the first half of 2018 has been a busy one for all of us at Infinity. We are excited about the progress we've made to date and the significant opportunities before us.

And with that, I'll turn the call over to Jeff.

Thanks, Adelene. We are especially encouraged by the data that we shared at ASCO, which I'll outline here today. Last quarter, we discussed that we have been focused on 3 key features of IPI-549 as a monotherapy and in data we presented at ASCO for our all-comer combination dose escalation patients, we were happy to see that these features were reinforced in combination therapy with nivolumab.

First, we were very pleased with the safety of IPI-549 as a monotherapy and combined with nivolumab, both showing a favorable tolerability profile.

Second, IPI-549 combined with nivolumab is clinically active, demonstrating rapid, deep and durable objective responses in 2 patients, one with adrenocortical cancer and one with microsatellite stable gallbladder cancer, but would not typically be expected to respond to an anti-PD-1 inhibitor alone, suggesting IPI-549 is providing the benefit to these patients.

And third, extensive translational studies indicate that IPI-549 continues to perform on mechanism. Data from peripheral blood and tiered tumor biopsies suggests that IPI-549 reduces immune suppression and increases immune activation, both for lone and in combination with nivolumab, consistent with the mechanism of action demonstrated in preclinical studies.

Monotherapy-treated patients show IPI-549 is targeting immune-suppressive myeloid cells, with both reductions in MDSCs in the blood as well as decreased M2 macrophages in the tumor biopsies after IPI-549 treatment. Peripheral blood data from patients preceding IPI-549 and nivolumab demonstrated a dose-related increase in the proliferation of previously exhausted cytotoxic T-cells on top of the fixed dose of nivolumab, indicating that IPI-549 is contributing to immune stimulations beyond the effects of nivolumab. This greater increase was statistically correlated with tumor shrinkage and longer time on study.

Importantly, this means that IPI-549 is both on mechanism and clinically active in combination with nivolumab and may play an important role in overcoming the limitations of existing immunotherapy. These data provide the strong foundation for the continued development of IPI-549.

As we look toward the second half of 2018, we will be reporting more mature data on the combination expansion portion of the trial, which we expect will further inform our development and regulatory strategy for this potentially first-in-class product candidate.

With that, I'll turn it over to Larry.

Thank you, Jeff. As Adelene and Jeff described, we are pleased with the progress we've made in the second quarter of 2018. We made this progress with strong fiscal discipline, which ensures that we have the key resources in place to execute on our development plan for IPI-549.

As of June 30, 2018, we had total cash, cash equivalents and available-for-sale securities of $49.2 million compared to $47.8 million at March 31, 2018. We'll now record any revenue in the second quarter of 2018 or at this time last year. R&D expense for the second quarter of 2018 was $3.7 million compared to $3.9 million for the same period in 2017. The decreased R&D expense was largely due to the increase in clinical and development expense for IPI-549, offset by a decrease in compensation related to a reduction in bonus and stock compensation.

General and administrative expense was $3.4 million in the second quarter 2018 compared to $6.2 million in the same period in 2017. The decrease in G&A expense was primarily due to a reduction in bonus and stock compensation.

Net loss for the second quarter 2018 was $7 million or basic and diluted loss per common share of $0.12 compared to a net loss of $17 million or basic and diluted loss per common share of $0.34 for the same period in 2017.

Let me now finish by reviewing the key 2018 goals we set for ourselves at the beginning of this year, our execution against them and our goals for the second half of 2018. IPI-549 objectives for the first half of the year will report data from the monotherapy expansion, data from the combination dose escalation with nivolumab and initial data from the specific expansion cohorts with nivolumab. We successfully met these objectives by reporting these data at ASCO in June, as Jeff summarized previously.

Our IPI-549 objectives for the second half of the year are to present more mature data on the combination extension portion of the trial that will build on the initial data we shared at ASCO. Having already completed enrollment in the mesothelioma cohort, we continue to be on track to meet this objective.

Our financial objectives for the year are that we expect 2018 net loss to range from $35 million to $45 million, and we expect to end 2018 with a cash and investment balance ranging from $15 million to $25 million. Based on our current operating plans, which exclude additional funding or business development activities, we anticipate our existing cash, cash equivalents and available-for-sale securities will provide cash runway through the third quarter of 2019.

We expect to deliver important data from several distinct clinical hypotheses being evaluated in area 1 or 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. It was given prior review by the FDA with a PDUFA date of October 5, 2018. This cash runway also does not include a potential $2 million milestone payment from PellePharm, a private company, upon initiation of Phase III study for the hedgehog inhibitor program, which we licensed to them in 2013.

The potential duvelisib approval milestone, we expect our cash runway to extend into 2020. So with rigorous financial management, we have the key resources to be able to execute on our robust and expanded development plan for IPI-549. These include financial resources through Q3 2019 or plus clinical collaborators in Bristol-Myers Squibb and Arcus. And importantly, the recent key additions to our clinical leadership, including Sam Agresta, our newly appointed Chief Medical Officer from Agios that we announced earlier today, and Marie-Louise Fjällskog, our Vice President, Clinical Development, we recruited from Novartis early this year. We look forward to updating you on our continuing progress through the balance of 2018. And at this time, we can open the call for questions. Operator?

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

This is Roland on for Katherine. My first question is given you've guided net loss of $35 million to $45 million, does that guidance include potential payments from PellePharm or Verastem? And I noticed that's a bigger loss in the second half of the year. Where do you expect the loss to come from mainly?

Yes. So the -- none of our guidance includes either the Verastem potential milestone for the potential approval of duvelisib nor the PellePharm milestone for the potential initiation of a Phase III hedgehog inhibitor program that we licensed to them in 2013. And as you can tell from our most recent data, including Adelene's discussion of our Arcus collaboration, the additional expenditures in the second half of the year will be focused on the clinical cost of our expanding IPI-549 development program.

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

It's Nick in for Jim this afternoon. Thank you for the updates. I guess, I was a little surprised with the timing for Dr. Agresta joining. I know he's not -- maybe that he'd speak for himself. But maybe you can just tell us what the motivation was to recruit a CMO now as opposed to when you have data later on in the year when it becomes clearer what the potential clinical and regulatory strategy might be.

Sure. Thanks, Nick. This is Adelene. So we're really thrilled to recruit Sam at this time. I can tell you that what he has been focused on most recently is getting the development and the approval of first-in-class medicines, and that's what's really important to us. So as we think about where else to expand our development of IPI-549, but also in interpreting the results of the data that we will be getting this -- later this year and using that data together with the translational findings to map our future development path. So it's really a perfect time for him to come and help us leverage the data we're generating to move into expanded development in 2019.

Okay. And one for Jeff, which is so -- with the Arcus collaboration, you can look at a combination now of PI3K-gamma and adenosine. Are there other combinations that you're interested in, in looking at? And are there other potential partners, like Arcus have an early-stage clinical program ongoing, that will allow you to drop in a new cohort and definitively address whether PI3K-gamma had to the efficacy of the combination already on the study?

Yes, Nick. We're certainly interested in combining with other modalities, like the ones we're evaluating in partnership with Arcus. That part would be informed by our preclinical studies that are ongoing and other decisions we make with our clinical development team. I don't think we're in a position to discuss those right now, but we're certainly looking at multiple other possible combination partners that would pair really well with targeting to associated macrophages and MDSC.

And -- this is Larry. Just it's really -- those on your first question to Adelene, is that, that's actually one of the reasons that we were very excited to be able to recruit someone of Sam Agresta's stature and recent successful experience with the FDA is very much to have a global partnership along with -- really the sales cog to complement Jeff's translational and preclinical models in strategizing the next phase of development of IPI-549.

Our next question comes from Anupam Rama of JPMorgan.

This is Tessa on for Anupam this evening. Maybe a couple from us. Can you provide an update on to how enrollment is progressing in the additional tumor types beyond mesothelioma? And maybe you can quickly recap for us how those additional solid tumor cohorts were selected for the combination expansion cohort. And maybe also how quickly the recruitment is progressing. And then I have one other follow-up.

Sure. So as -- what we presented at ASCO on the enrollment for our combination expansion cohorts is that we had 37 patients enrolled. And we've provided an overview of the patient's tumor types at that time together with, as you mentioned, the fact that the mesothelioma cohort was completely enrolled. We're not providing interim updates on enrollment other to -- other than to say enrollment is going well. And what we will be presenting on later this year are those cohorts where we have mature data. We certainly expect it to include mesothelioma and hope that it may include other cohorts as well. The selection of those cohorts really was designed to meet the criteria I mentioned earlier of ensuring that we could really see the effect of IPI-549 over nivolumab. And so one of the key hypotheses that we -- Jeff Kutok presented and was published in a Nature paper was the ability of IPI-549 to overcome resistance to a checkpoint inhibitor. And so our 3 cohorts in non-small cell lung cancer, melanoma and squamous cell cancer of the head and neck are directly designed to test that hypothesis, and patients being enrolled will have progressed and had documented progression on a checkpoint inhibitor immediately prior to enrolling. So that was the reason we selected those rates. We selected triple-negative breast cancer because patients with triple-negative breast cancer typically do not respond well to a checkpoint inhibitor. And so again, activity there would be indicative of the contribution of IPI-549. Our other 2 disease-specific cohorts in mesothelioma and adrenocortical cancer are directly following up on signals and responses that we already saw in our combination dose escalation and in our monotherapy study. And then lastly, our cohort, which we're very excited about and we believe it's the first ever study for patients being prospectively screened for high MDSC levels, is reflective of a lot of the work we've done showing that IPI-549 mechanistically reprograms macrophages from the M2 to the M1. The data we've seen clinically that across all tumor types, we see a reduction in MDSCs, and the fact that those -- patients with high MDSC levels typically do not respond well and have a poor prognosis. So that -- again, activity in patients that don't respond well to checkpoint inhibitors and have a poor prognosis would be very encouraging signal of IPI-549 activity. So we work very hard to ensure that the data that we get from our Phase I is very informative to our Phase II development.

Great. Very helpful on our end. And I guess, maybe a follow-up to that, what additional data we should expect here in the second half for the combination cohorts? I know you definitely gave some color on the call. But any additional kind of tidbits you want to provide on what we should be expecting here?

Sure. Well, what's most important is that for the cohort, we have enough data to be conclusive about activity in any of those cohorts. And we'll be looking at the totality of the data. We'll be looking at, mechanistically, is the drug doing what we expected it to? We'll be looking at time on treatment, response rate, evidence of reduction of MDSCs, increase in reinvigoration of T-cells. So we'll be looking at the totality of the data against relative to the need in those patient populations, which will help us map our paths forward.

At this time, I'm showing no further questions. I'd like to turn the call back over to Adelene for closing remarks.

Thank you, Skyler. We're very excited about the opportunity we have before us with IPI-549, and we look forward to updating you later this year. Have a good day, everyone, and a great end of summer, and thank you for joining us on today's call.

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