Infinity Pharmaceuticals Inc (INFI) 2018 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 full year 2018. My name is Candice, and I'll be your operator for today's call. (Operator Instructions) Please be advised this call is being recorded at Infinity's request.

Now I would like to introduce your host for today's conference, Jayne Kauffman. Please go ahead.

Thank you, Candice, and good morning, everyone. Welcome to today's call to discuss our recent business progress and review our full year 2018 financial results. With me here today are Adelene Perkins, Chief Executive Officer; Larry Bloch, President; Dr. Sam Agresta, Chief Medical Officer; 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 morning details our results and is available on our website at infi.com.

Please note that during this call, we may make forward-looking statements about our future expectations and plans, including clinical development 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 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 make updates to 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 thank you to everyone for joining us. We're excited to review the progress we made during 2018 and to highlight several recent developments that significantly advanced the value-creation strategy we outlined at the beginning of the year.

Value creation at Infinity will be driven by compelling clinical data with IPI-549 in areas of significant unmet patient need and access to the resources necessary to generate this data. MARIO-3, the study we announced this morning with Roche/Genentech is a very important milestone in enabling the generation of this data while accessing key resources. We're thrilled to be adding a clinical collaboration with another top-tier oncology company in leveraging IPI-549's unique mechanism of action in reprogramming macrophages to enhance outcomes for patients with triple-negative breast cancer or TNBC and renal cell cancer or RCC.

A core component of our clinical strategy is to move IPI-549 into earlier lines of therapy with novel combination. In MARIO-3, we are adding IPI-549 into a newly approved and emerging standard of care in the front-line setting. Last week, the FDA granted accelerated approval for the combination of Tecentriq, Roche's PD-L1 inhibitor and the chemotherapy Abraxane or nab-paclitaxel in treating frontline PD-L1 positive triple-negative breast cancer patients. The approval was based on results of the IMpassion130 study, and this combination, the first immuno-oncology regimen to be approved in TNBC, is widely expected to become a new standard of care. Immediately on the heels of this approval, we are very pleased to be adding IPI-549 to Tecentriq and Abraxane, which could lead to a truly transformative therapy for frontline patients with TNBC.

We are also enthusiastic about the potential for mechanistic synergy in combining IPI-549 to Tecentriq and VEGF inhibitor, Avastin, in frontline patients with renal cell carcinoma. There is an equally significant unmet need for RCC patients and an equally compelling mechanistic rationale for the combination. Jeff will describe the mechanistic and preclinical rationale for both these triple combination, frontline therapies in more detail, after which Sam will describe the design and objectives of the MARIO-3 clinical study, which we expect to initiate in the third quarter of this year.

The data that will be generated in the frontline with MARIO-3 complement the data that will be generated in the second line with MARIO-275. MARIO-275 being conducted in collaboration with BMS is a randomized Phase II study, evaluating IPI-549 and Opdivo or nivolumab in immuno-oncology naive patients with urothelial cancer. MARIO-275 integrates findings from 2 studies: BMS' CheckMate-275 study in urothelial cancer patients with Opdivo monotherapy, which showed that lower overall survival was strongly correlated with high levels of myeloid-derived suppressor cells or MDSCs; and our MARIO-1 study in which MDSCs were reduced in the majority of patients following treatment with IPI-549. Given the role of IPI-549 in reducing MDSCs, our goal is to demonstrate that the combination of IPI-549 and Opdivo improves outcomes in these patients. MARIO-275 will be initiated in the second quarter of this year.

In 2019, we will also be initiating our study in collaboration with Arcus, evaluating IPI-549 with Arcus' adenosine inhibitor and chemotherapy in patients with relapsed/refractory TNBC.

Finally, MARIO-1 data continue to mature in PD-1 resistant patients, including our expanded cohort of PD-1 resistant melanoma patients, and we look forward to sharing findings that are relevant to MARIO-3, MARIO-275 or that may inform future studies with IPI-549.

Compelling data are the cornerstone of value creation, and we have a strong portfolio of studies across several lines of therapy, including frontline, immuno-oncology naïve and relapsed/refractory setting across several indications, including urothelial cancer, triple-negative breast cancer, renal cell cancer and melanoma with several novel double and triplet-therapy regimen with 3 world-class partners with whom we will generate data in over 500 patients. Our business development strategy has been to establish arm's length collaborations without licensing rights to IPI-549 such that any future strategic collaborations around the program will be data-driven and will reflect the value that we create by the breadth and depth of our clinical program.

Our #1 priority in 2019 is execution to deliver on the promise of these studies, and the team is working hard to initiate and enroll these studies as rapidly as possible. Generating this data requires considerable resources, and we have focused on accessing nondilutive capital. In late 2016, we made the strategic decision to out-license duvelisib, now approved as Copiktra to Verastem, so that we could focus Infinity and our resources on the advancement of IPI-549. We have realized considerable financial benefit from this out-licensing strategy, having received a $6 million milestone in 2017, a $22 million approval milestone in November of 2018, and having announced last week the monetization of our royalty stream on duvelisib for $22.5 million. The proceeds from duvelisib since November of 2018, together with contribution in kind of combination drugs from Roche/Genentech and BMS during the same period representing savings of approximately $20 million, have resulted in access to the equivalent of over $60 million of nondilutive capital over the last 2 quarters alone. Importantly, these proceeds have enabled the significant expansion of the clinical development of IPI-549, while extending our cash runway into the second half of 2020, which Larry will review in more detail.

Looking further into 2019, we're eager to build on the momentum we established during 2018, and in the first few months of this year to deliver on the promise of IPI-549. We remain driven by the magnitude of unmet need for better treatment options for people with cancer and the role that IPI-549 as a first-in-class therapy can play in addressing them. The more we work on IPI-549 alone and in collaboration with world-class partners, the more confident we are in its potential to have a transformative impact.

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

Thanks, Adelene. As an important part of our development of IPI-549 as a first and best-in-class drug candidate, we remain committed to optimizing our understanding of the biology by IPI-549, both as a monotherapy and in combination with immune checkpoint inhibitors as well as other agents. Our preclinical work and the in-depth analysis of translational data from our existing MARIO-1 study has contributed to the initiation of new trials, including the previously announced MARIO-275, collaboration with BMS and today's announcement of MARIO-3 in collaboration with Roche/Genentech. We've spoken in detail about the effect of IPI-549 on reducing MDSC levels, which provided a rationale to combine with Opdivo in urothelial cancer given the association of shorter survival with high baseline MDSC levels demonstrated in CheckMate-275 at last year's AACR meeting.

In addition, preclinical data recently presented by Arcus Bioscience at a Keystone Symposium meeting focused on mechanisms of immune-based therapy in cancer showed that IPI-549 synergized with their adenosine receptor inhibitor AB928 in settings with high levels of adenosine. We're, therefore, excited to see the clinical effects of IPI-549 combined with AB928 and chemotherapy in relapsed/refractory triple-negative breast cancer, a collaborative study with Arcus that is expected to start in the second half of 2019.

In addition, we have other preclinical collaborations ongoing in various of tumor models to explore the combination of IPI-549 with other mechanisms of immune suppression or immune activation and to establish the best targets for further development expansion.

Lastly, I'd like to focus on the mechanistic rationale for pursuing the triple combinations of IPI-549 with the checkpoint inhibitor in either chemotherapy or in anti-angiogenic in frontline TNBC and renal cell cancer as part of our new clinical collaboration, MARIO-3 with Roche/Genentech. First, with respect to the combination of IPI-549 and the checkpoint inhibitor Tecentriq, we published extensive preclinical data in multiple cancer models that IPI-549 reprograms macrophages from a pro-tumor immune suppressive function to an antitumor immune activating function and can both augment the activity of checkpoint inhibitor therapies as well as recover the activity of a checkpoint inhibitor resistant model.

Second, with respect to combining IPI-549 with chemotherapy or anti-angiogenics, it's well described in the literature that tumor-associated immune suppressive and pro-growth MT macrophages accumulate in tumors after chemotherapy or anti-angiogenics and therefore, contribute to tumor regrowth and revascularization after these treatments. Targeting these newly recruited macrophages with IPI-549 could, therefore, reverse the effects. To that end, we have previously presented that murine tumors treated with IPI-549 after chemotherapy showed inhibition of tumor regrowth compared to no therapy. And we have internal data that the combination of anti-angiogenic with IPI-549 shows enhanced inhibition of tumor growth. These data provide a clear rationale for treating with IPI-549 and Tecentriq in combination with either Abraxane or Avastin to target the tumor and the tumor microenvironment.

I will now turn it over to Sam, who will discuss more on the clinical relevance of these combination studies.

Thanks, Jeff. 2019 will be a really exciting year of execution for us at Infinity as we continue to broaden the development of IPI-549 and expand its therapeutic potential by: one, moving into the IO-naïve second-line setting with MARIO-275 in urothelial cancer in collaboration with BMS; two, exploring novel-novel combinations in relapsed/refractory triple-negative breast cancer with Arcus; and three, advancing the frontline in triple-negative breast cancer in renal cell cancer with Roche/Genentech. The data we have generated to date with MARIO-1 supports that IPI-549 is a potentially transformative first-in-class drug candidate that can provide significant clinical benefit to patients with advanced solid tumors.

In November 2018, at the SITC Annual Meeting, we reported data from the combination expansion portion of our MARIO-1 study showing that IPI-549 and Opdivo can reverse resistance to immediate prior checkpoint inhibitor therapy. We also showed early signs of clinical activity, chemotherapy-resistant triple-negative breast cancer, a tumor type that is intrinsically resistant to checkpoint inhibitors, which has informed the MARIO-3 study announced this morning. The totality of the data from MARIO-1 supports that IPI-549 is safe and active in monotherapy and in combination with Opdivo and notably in the late-line patients who have progressed on immediate prior checkpoint inhibitor treatment. The clinical activity is on target associated with a reduction in immune suppression and an increase in immune activation. We will continue to follow the outputs of MARIO -- from MARIO-1 to inform our development strategy.

MARIO-275 is our randomized study designed to evaluate IPI-549 plus Opdivo as compared to single-agent Opdivo in advanced IO-naïve urothelial cancer patients. We are conducting this study in collaboration with Bristol-Myers Squibb, who obtained approval of single-agent Opdivo based on the single-arm Phase II study, CheckMate-275. MARIO-275 is a follow-on study to CheckMate-275 and is built upon our foundational scientific hypothesis that MDSCs play an important role in limiting the effectiveness of many immunotherapies. A retrospective analysis of CheckMate-275 showed that high levels of MDSCs were associated with a shorter overall survival in patients treated with Opdivo alone. This, along with our data from MARIO-1, demonstrating that treatment with IPI-549 is associated with a reduction in MDSC levels serves as the rationale for this study.

We are excited that our collaboration with Arcus is moving forward. Together, we are evaluating the addition of IPI-549 to their dual adenosine receptor antagonist and chemotherapy in relapsed/refractory triple-negative breast cancer. We also just announced a new clinical collaboration with Roche/Genentech that will evaluate IPI-549 in frontline triple-negative breast cancer and renal cell cancer as Adelene outlined. Approximately 100 treatment-naive patients will be evaluated in total across 3 different cohorts: locally advanced and/or metastatic triple-negative breast cancer with PD-L1 positive disease; locally advanced and/or metastatic triple-negative breast cancer with PD-L1 negative disease; and locally advanced and/or metastatic renal cell cancer agnostic of PD-L1 status. We are excited to be advancing IPI-549 into the frontline setting in these indications in collaboration with colleagues at Roche/Genentech. Data from IMpassion130 and IMmotion151 support the benefit of Tecentriq plus Abraxane as well as the benefit of Tecentriq plus Avastin in frontline triple-negative breast cancer and renal cell cancer, respectively.

Just last week, the FDA granted accelerated approval for Tecentriq plus Abraxane PD-L1 positive frontline locally advanced and/or metastatic triple-negative breast cancer. In our MARIO-3 study, we intend to evaluate how the addition of IPI-549 can improve upon the data observed from these studies, including a higher conversion of responders to complete remissions as well as improved durability. We will also evaluate the clinical benefit as it is associated with MDSC levels. The results from this study will inform our future clinical development plans in these indications.

2019 will be a year of execution as we are now expanding into new indications on earlier lines of therapy with improved and potentially transformative novel regimens. We look forward to the readouts of these studies and the potential to help a broad spectrum of patients.

I would now like to turn the call over to Larry.

Thank you, Sam. As you've heard from Adelene, Jeff and Sam, we're really proud of the progress we've made in 2018, and are absolutely focused on and committed to continue to build on this progress in the year ahead.

Early this week, we were pleased to receive $20 million in net proceeds from Healthcare Royalty Partners for the monetization of Copiktra or duvelisib royalties which we announced last week. These funds, combined with our consistent fiscal discipline, ensures that we will have the key resources in place to execute on the expanded IPI-549 development plan that we announced today.

As of December 31, 2018, we had total cash, cash equivalents and available-for-sale securities of $58.6 million compared to $57.6 million at December 31, 2017. We recorded $22.1 million in revenue during 2018 related to the amount from Verastem for the approval by the FDA of duvelisib. This compared $6 million at this time last year, which is related to the amounts received from Verastem for the successful completion of the duvelisib DUO study. Revenue reported for 2018 does not reflect the recent duvelisib royalty monetization with Healthcare Royalty Partners.

R&D expense for 2018 was $19.8 million compared to $20.8 million for the same period in 2017. General and administrative expense was $14.2 million for 2018 compared to $21.6 million for the same period in 2017. And the decrease in general and administrative expense was primarily due to a reduction in bonus and stock compensation.

Net loss for 2018 was $11.3 million or a basic and diluted loss per common share of $0.20 compared to a net loss of $41.8 million or a basic and diluted loss per common share of $0.83 for the same period in 2017.

We expect 2019 net loss to range from $30 million to $40 million, and we expect to end 2019 with a cash and investment balance ranging from $40 million to $50 million. Based on our current operating plans, which exclude additional funding or biz development activities, we anticipate that our existing cash, cash equivalents and available-for-sale securities will provide cash runway well into the second half of 2020. This cash runway includes potential $2 million milestone payment from PellePharm, it's a private company upon initiation of a Phase III study for the hedgehog inhibitor program, which we licensed to them in 2013.

I'd like to finish by reviewing our key 2018 accomplishments, recent developments as well as our plans for 2019. In 2018, we delivered on our key objectives for the year, which included reporting positive data from the monotherapy expansion in combination with dose-escalation portions of our MARIO-1 study and reporting positive data updated from the combination expansion portion of the trial. We did this while also expanding our melanoma and triple-negative breast cancer combination cohorts and announcing our clinical collaboration with Bristol-Myers Squibb, Arcus and our Roche/Genentech collaboration.

In addition of MARIO-3 study in collaboration with Roche/Genentech, the Arcus collaboration and the MARIO-275 study in collaboration with BMS to the ongoing MARIO-1 study in collaboration with BMS, Infinity will be evaluating IPI-549 in the anti-PD-1 refractory, the IO-naïve and the frontline settings in a total of over 500 patients while also ensuring a cash runway well into the second half of 2020 and retaining all clinical control and commercial rights to IPI-549. We look forward to updating you on our continuing progress during the course of this year.

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

(Operator Instructions) And our first question comes from Katherine Xu, William Blair.

So I was wondering -- so can you remind us, in MARIO-1, in your TNBC patients, any follow-up details on that? And also did you see -- were they PD-L1 positive or negatives? And also for RCC, I'm just wondering the choice of Tecentriq and Avastin because the frontline space is getting quite crowded with the most recently KEYNOTE-426 success. So the choice there is because it's just convenient with the supply agreement of Tecentriq with Roche or other rationale? And the other question is, have you found from MARIO-1 a sort of a rare cancer to go forward, so that -- of course, right now, you are targeting quite major indication, some rare cancers to go forward so that it would take less time and less resources to get approvals, some type of a low-hanging fruit have you been able to identify such special indication?

Okay. So Katherine, why don't we go through each of your 3 questions. First on the triple-negative breast cancer. As you know in MARIO-1, one of the explicit purposes was to look for patients that would not be expected to respond to nivolumab alone. So we had both the 3 cohorts of patients in -- who had immediately progressed on a checkpoint inhibitor and then the triple-negative relapsed/refractory was because those patients typically don't respond to Opdivo alone. So we presented at SITC, activity, and I'll let Sam elaborate more on that, but what we were very encouraged by is seeing activity there, where you wouldn't expect it with Opdivo and that was the foundation in our discussions with Roche/Genentech that got them enthused to do this collaboration. Sam, you can elaborate.

Sure. This is Sam. What we presented at SITC was early data in the cohorts, and I'll remind you that we did see a nice near partial remission in a very late-line triple-negative breast cancer patient. Remember that, that data was cut in October 2018, so we'll continue to look at that cohort, but cohort will continue to mature, and in conversations with Roche/Genentech, we certainly shared the information that we have presented and more to outline in the right path forward.

And then on your question with respect to renal cell cancer, Jeff described the rationale for combining with the VEGF inhibitor, and then we worked closely with the team at Roche/Genentech to determine what are the best settings to evaluate that combination and there remains a significant need for better treatment for patients with renal cell cancer. And so part of our clinical development is to leverage findings we have out of MARIO-1, but also to expand it. And so given the strong mechanistic rationale for combining with Tecentriq and Avastin and 549, we together decided that renal cell was a good place to test that hypothesis where there remains a significant need.

Yes. And this is Sam. Again, one of the key assets of 549 is the safety profile. So as we think about the changing paradigm in standard of cares in renal cell cancer, in this case, it makes preclinical sense and it makes clinical sense given the safety profile of drug and the activity to be able to combine in frontline patients, so we look forward to starting that Phase II study.

And then your third question was about rare cancers and whether we could pave a path to an approval. And I'm going to turn this over to Sam, but I'll remind you one of the reasons we were so excited to have Sam join the effort is, he has a pretty extraordinary track record in working very closely with the FDA and when he was at Agios got both IDHiFA and TIBSOVO approved on single-arm Phase I data. So Sam is all about -- any trial can be approved if you're really showing a significant benefit in a well-designed study and a well-designed patient population. And he has certainly brought that perspective to our development of 549. And Sam?

So this is Sam. And I -- again, I think rare versus opportunity for patients are probably the same. So what I would consider the opportunity in -- for MARIO-1 is the opportunity to allow for retreatment with checkpoint inhibitors in late-line cancers, that could be in several different indications, the FDA has precedence where they've given labels to checkpoint inhibitors that are agnostic of histologic indications. So the (inaudible) high cohort, the cohorts where we mandate an immediate prior checkpoint inhibitor resistance are opportunities for us to help patients very quickly. So we look forward to that data maturing.

And our next question comes from Anupam Rama of JPMorgan.

This is Tessa on for Anupam this morning. So looking for the next data from the programs in the MARIO-1 program, how should we be thinking about next medical meetings you might think about targeting for some more of this expansion data and kind of the scope of a potential update we could see maybe in 2019? And then maybe on the MARIO-3 trial announced this morning, what are the gating factors to getting this trial started in the third quarter? And curious, how you are thinking about time line for enrollment, potential synergies with other trials?

Thanks, Tessa. So MARIO-1, as we mentioned in the prepared remarks, is continuing to mature and any updates on data from that will be driven by their relevance to our existing studies, MARIO-3, MARIO-275 or to the extent that they inform a new study that we want to initiate. And so we'll continue to monitor that data to the extent that it applies to our going-forward development we're reporting the data. In many ways, MARIO-1 has already delivered what we hoped and it showed that IPI-549 is very well tolerated. It's active and it was key to driving based on the triple-negative activity we saw in the MARIO- 3 collaboration as well as based on the MDSC results, the CheckMate-275. With respect to any updates on MARIO-3 as well as our other studies, we'll provide more granular guidance on the timing for enrollment in data once we have more information on the enrollment kinetics as those studies are initiated later this year. And the team -- there's really nothing that's gating to us going. The team is full steam ahead, working with our CRO, selecting a site and are very aggressive and optimistic about our ability to get that up and going in the third quarter.

Right after this call, we're going to cut loose Sam to go and kick off meeting for the trial today. So we're absolutely focused on execution.

(Operator Instructions) And I'm showing no further questions at this time. I'd like to turn the conference back over to Adelene Perkins for closing remarks.

Thank you, and thank you for everyone for joining us this morning. We're very excited about the opportunity we have with IPI-549, and we look forward to updating you on our progress throughout the year. So have a good day, everyone, and thank you for joining us.

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