Syndax Pharmaceuticals Inc (SNDX) 2016 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to your Syndax first-quarter 2016 conference call.

(Operator Instructions)

As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference, Ms. Barbara Ryan. Ma'am, you may begin.

Thank you, Noami.

Welcome, and thank you to those of you joining us on the phone and the webcast this afternoon for a review of Syndax's first-quarter 2016 financial and operating results. I am Barbara Ryan, Syndax's Head of Investor Relations, and with me this afternoon to discuss the results and update you on our progress are Dr. Briggs Morrison, Chief Executive Officer, and Allan Shaw, Chief Financial Officer. Joining us on the call for the question-and-answer session are Michael Metzger, President; Peter Ordentlich, Chief Technology Officer; and Dr. Michael Meyers, Chief Development Officer of Syndax.

Before we begin, I would like to remind you that any historical statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk section of our most recent quarterly report on Form 10-Q, and our other reports filed with the Securities and Exchange Commission. Any forward-looking statements represent our views as of today, May 16, 2016, only.

A replay of this call will be available on the Company's website, www.Syndax.com, following this call. You can find the dial-in information for the replay in today's press release, as well as on the Company's press release.

If you could turn to the cover slide, I would now like to introduce Dr. Briggs Morrison, Chief Executive Officer of Syndax.

Thank you, Barbara.

Good afternoon, and thank you to everyone who has joined us on our conference call and webcast. We appreciate your interest in Syndax. I'd like to start my comments by using slide 1 to remind everyone of our mission, which is to realize a future in which people with cancer live longer and better than ever before. We believe this is an inspiring mission, a timeless mission, and we know that it is what motivates everyone who comes to work at Syndax every day.

Our mission has also guided as we've developed our corporate strategy. That corporate strategy is summarized briefly on slide 3. The foundation of our strategy is, of course, adequate financing, and hiring the absolute best people to drive our mission. The first quarter of 2016 marked a major accomplishment for Syndax in this regard, with the successful completion of our IPO in early March, through which we raised over $50 million, after deducting underwriting discounts and commissions and other offering costs.

Syndax ended the first quarter with approximately $134 million in cash, cash equivalence and short-term investments. Which we believe will fund our current development efforts for Entinostat across multiple indications and through significant milestones, while also enabling us to selectively expand our pipeline.

We also continued our efforts to bring in talented individuals to help us execute on our mission, including hiring Allan Shaw as our CFO. Allan has extensive public company CFO experience, and has brought an energy and creativity to our leadership team that is infectious. As of today, we have 28 outstanding employees dedicated to delivering on our strategy.

The three pillars of our strategy that rest on this foundation are Entinostat hormone-receptor-positive breast cancer, Entinostat immuno-oncology, and new molecules. I will give you detailed updates on our clinical programs and hormone-receptor-positive breast cancer and immuno-oncology in a moment, but I'd like to first add a little bit of color to our search for new molecules.

We've developed an important set of criteria as we look for new molecules to add to our portfolio. The first, consistent with our mission, is that we need to be convinced that the molecule has potential to improve the lives of people with cancer. That may seem obvious, and yet is an important scientific hurdle.

We have a broad network of scientific and clinical experts who help us in our assessments of novel molecules. We're specifically looking for molecules that are either close to being IND-ready; are, in fact, IND-ready; or have some initial clinical data. And we are focused more on solid tumors than on hematologic cancers. Michael Metzger is leading our systematic business development efforts, and we hope to be able to report progress as the year progresses.

For clarity, once we identify the right asset, we anticipate that we will move very quickly to add it to our pipeline, leveraging our advantage as a nimble development-focused Company. We believe we have the right team in place to grow the business, and we therefore believe that expanding our pipeline with the right molecules will add significant value to Syndax.

Let me now turn to slide 4 to review our program in hormone-receptor-positive breast cancer. I'd like to first remind you that Entinostat in combination with Exemestane was granted breakthrough therapy designation by the US Food & Drug Administration for the hormone-receptor-positive breast cancer indication, based upon positive results from our Phase IIb clinical trial, ENCORE 301.

On slide 4 is a brief summary of the E2112 trial design. It's a randomized Phase III trial in which with women with advanced hormone-receptor-positive HER2-negative breast cancer are randomized to receive Exemestane, or Exemestane plus weekly Entinostat. The trial anticipates 300 patients per arm, and has two primary end-points; progression-free survival and overall survival.

We are pleased to report that enrollment for the E2112 trial has exceeded 200 patients. And according to ECOG, interest in this trial continues to build. The 2112 trial is being run in collaboration with ECOG and the NCI under a special protocol assessment with FDA.

Let me now turn to the last pillar of our strategy, our use of Entinostat for immuno-oncology. On slide 5, 1briefly summarize the Syndax-sponsored trials, either ongoing or planned, in immuno-oncology. The first, which we call ENCORE 601, is a Phase Ib/II trial of Entinostat in combination with Pembrolizumab from Merck, in patients with either non-small cell lung cancer or malignant melanoma.

The second, termed ENCORE 602, is also a Phase Ib/II trial of Entinostat, in this case, in combination with Atezolizumab from Genentech, in patients with triple-negative breast cancer. And the third, termed ENCORE 603, is a Phase Ib trial of Entinostat in combination with Avelumab from the Merck KGaA, Pfizer alliance for patients with ovarian cancer.

ENCORE 602 is actively enrolling patients. We anticipate ENCORE 602 to start dosing patients this quarter, and we anticipate ENCORE 603 to start dosing patients in the fourth quarter of this year.

Turning to slide 6, let me briefly summarize the ENCORE 601 trial in more detail. You see from the slide that the Phase Ib portion is divided into a dose escalation stage and a dose confirmation stage. We recently completed the dose escalation stage of ENCORE 601, and based upon those results, the study investigators have recommended moving into the dose confirmation stage at the 5-milligram dose. Which is in fact the same dose of Entinostat we are using in our Phase III hormone-receptor-positive breast trial, E2112.

Indeed, the dose confirmation stage of ENCORE 601 has already begun dosing patients, and we anticipate it will complete in the third quarter of this year. We submitted an abstract to ASCO in January of this year, describing the design and preliminary data of the dose escalation stage of ENCORE 601. This abstract was accepted for publication, and will be available on the ASCO Annual Meeting website.

Assuming enrollment proceeds as we have planned in the dose confirmation stage, we anticipate submitting an abstract reflecting the safety and efficacy data from the complete Phase Ib portion of ENCORE 601, both the dose escalation stage and the dose confirmation stage, for presentation at a scientific meeting in the fourth quarter of this year. We anticipate that, that abstract and presentation will summarize data pertaining to safety, efficacy, pharmacokinetics, pharmacodynamics and biomarkers.

Our business strategy for these IO collaborations relies on a common set of core principles. All of our partners provide study drugs. It is very important scientific insight and collaboration, including a provision of certain proprietary assays. While Syndax runs these studies as the sponsor, which we believe it is important for driving study progress, one of our partners has contributed to the overall costs of the study, which we believe is a sign of their particular interest in the potential of Entinostat.

In addition to the partnerships and clinical trials that I've just discussed, we are continuing to generate clinical and pre-clinical data which shows that Entinostat has synergistic effects with multiple immunotherapies through our academic collaborations and our creative with the NCI. As a result of this collaborative strategy, Entinostat was the subject of seven investigator presentations at the annual meeting of the American Association for Cancer Research, was just held in April of this year.

Among the presentations was a clinical study combining Entinostat with high-dose IO2 in renal cell carcinoma, which we believe continues to demonstrate the improved clinical benefit of the combination versus historic data for the high-dose IO2 alone. And which resulted from pre-clinical data which continues to strengthen the rationale for the combination of Entinostat plus immune checkpoint inhibitors. Our Chief Technology Officer, Peter Ordentlich, is available to take any questions you may have on the Entinostat data presented at ACR, during the Q&A session.

We expect to generate substantive incremental data from our IO clinical collaborations over the next 12 to 24 months, and look forward to updating you on our progress.

I'd like to now turn the call over to Allan Shaw, our Chief Financial Officer, to discuss our financial results and update you on our balance sheet.

Thank you, Briggs.

Turning to slide 7, for the three months ended March 31, 2016, Syndax reported a net loss attributable to common stockholders of $12.9 million or $2.85 per share. Versus a net loss attributable to common stockholders of $12.1 million or $206.30 per share for the comparable prior-year period. The net loss per share calculation for the three months ended March 31, 2016, and 2015, includes the impact of dividends and accretion on a convertible preferred stock which converted into common stock upon the completion of the initial public offering in March 2016, and will not impact quarterly net loss calculations in the future.

In addition, please note there was a non-cash charge of $1.7 million in other expenses related to the re-measurement of common stock warrants issued to bearer in connection with the original Entinostat license. The bearer warrants were accounted for as a derivative liability until the closing of our IPO, and has since been transferred to additional paid in capital, and will no longer impact future quarterly results.

Our research and development expenses in the first quarter of 2016 increased by $3.1 million to $4.8 million from the prior-year period, due to increased clinical trial activities. Our general and administrative expenses increased to $4.3 million during the first quarter of 2016, from $2.7 million in the prior-year period. This increase was primarily due to non-cash, stock-based compensation.

Our total common shares outstanding as of March 31, 2016, was 17,782,150 shares. And on a going-forward basis, this is the number you should use to calculate our loss per share. Of note, however, we also had 2,717,539 stock options to purchase stock, and 357,840 common stock warrants outstanding, for a total of 20,857,529 shares of common stock and common stock equivalents as of March 31, 2016. Furthermore, Syndax ended the first quarter with cash, cash equivalents and short term investments of $133.7 million.

We're in a very strong financial position as a result of our recent IPO and Series C financing, both of which were anchored by participation of several new, leading institutional investors. We continue to make appropriate and measured investments in building our Company, and are pleased to have attracted substantial talent to the organization. We believe our cash balances are sufficient to fund our existing development efforts into 2019 and through significant clinical milestones, while enabling us to selectively expand our pipeline.

I would like to turn the call over to Briggs.

Thank you very much, Allan.

Before we open the line for questions, I'd like to turn to slide 8 and make a few summary remarks. We've assembled a strong leadership team, with tremendous experience and development among oncology agents and in building successful companies. Following our IPO, we have the funds to continue development of Entinostat in multiple indications and to pursue business development opportunities to expand our pipeline.

For ENCORE 601, we expect to submit an abstract reflecting the safety and efficacy data from the Phase Ib portion, for presentation at a scientific meeting in the fourth quarter of this year, assuming patient enrollment remains consistent with our expectations. We anticipate dosing the first patients in ENCORE 602 with triple-negative breast cancer during the second quarter of this year. We hope to commence ENCORE 603 in collaboration with Pfizer and Merck KGaA in the fourth quarter of this year.

We are pleased with our continued progress in the Phase III trial for Entinostat hormone-receptor-positive breast cancer, as well as the collaborations we have entered into with leading companies with checkpoint inhibitors. We're optimistic about our ability to achieve our mission of realizing a future in which people with cancer live longer and better than ever before, and our ability to build value for stockholders. Thank you.

I would like to now open up the call for questions.

Operator, can you poll the audience for questions?

(Operator Instructions)

Matthew Harrison, Morgan Stanley.

This is David Lebovitz in for Matt. First question -- with respect to the ENCORE 601 trial, you decided to choose the 5-milligram dose going forward. What characteristics -- from what you can say at this point, with ASCO ahead of us -- can you say about that dose that made you choose it versus the other doses?

Maybe I'll ask Michael Meyers to answer that question.

So thank you very much for the question. So what we observed among 13 patients enrolled in the Phase 1b dose escalation portion -- six at the 3-milligram dose and seven at the 5-milligram dose -- was that there was an acceptable and not unexpected safety profile for the combination. And that the 5-milligram dose, in fact, was tolerable without any DLTs observed.

So I'm assuming going forward for 602 and 603 that you'll probably just extrapolate from that to some extent, in how you look at those doses going forward as well?

Yes, I'll let Michael comment on the study design for both of those.

So for both 602 and 603, we will be beginning at a 5-milligram dose. However, there is a dose escalation option structured into both of those studies, if in fact the safety profile of those combinations differ from the safety profile with pembrolizumab.

I would say, David, that our base assumption is that we will be able to administer 5 milligrams in both 602 and 603 in a safe way.

Excellent. And one more question. On the [Poli] data that was presented at AACR, could you just speak to the trend in PFS, from the prior data cut to the more recent data cut, as far as what drove any changes? Understanding of course that it is still well-above what is expected in a normal [pro-leukin] population.

Sure. David, thanks for the questions. I think Roberto updated both his overall response rate and the PFS. The PFS, I think, when he presented it at first at ASCO GU in January, he noted that it was relatively immature data. And as the data has matured, the PFS has come down a little bit. But we agree with you that his interpretation was that it still seems to significantly exceed what you would expect historically from IL-2 alone.

Excellent. Thanks for taking my questions.

Chris Marai, Oppenheimer.

Hi, good afternoon. Thanks for taking the questions, and congrats on the quarter. I was wondering if you could maybe speak to how you're going to go about making decisions in terms of sequencing of entinostat and [IL] therapy? You know, there is a lot of work at AACR recently, you know, highlighting potentially the need to sequence these therapeutics for optimal performance. So what kind of things will you be looking at, and what have you been thinking about in terms of talking with the KOLs and other physicians in this area?

Right, Chris, thanks very much for the question. Obviously, as you know, one of the early experiments done with entinostat in combination with azacitidine was this priming study that the folks at Hopkins are still running a Phase 2 trial on. We initially decided to combine concurrently entinostat with the checkpoint inhibitors, and that is the case for all three of the trials that we have planned -- 601, 602 and 603. But we are continuing to have conversations with physician scientists who work actively in this area, to see if there are other sequencing strategies that we should undertake.

Great. And then just remind me, will you be looking at potential patients who have been failures of prior IL therapies in your ongoing trials? And if you're going to maybe stratify results along those lines? Thank you.

Yes, so for 601, you will -- there are actually three different cohorts for the stage 2 portion of the trial. One is naive patients with non-small cell lung cancer who have not previously received a checkpoint inhibitor. But then there are two other cohorts, exactly to your question. One are patients with non-small cell lung cancer who have progressed on a previous checkpoint inhibitor, and there is also a population of patients with melanoma who have progressed.

So our conversations with physicians who are treating these patients is, there is an increasing number now of patients who have previously received one of these very important agents and have progressed, and so we are looking at those patients in 601. We are not specifically looking at those patients in 602 or 603 at this time.

Okay. And then one last one, if I may. With respect to those patients who previously progressed taking entinostat, will you then -- or is there an expectation to re-treat them with a checkpoint therapy? Thank you.

I'll let Michael just go over the details of that study design.

Yes, so for the patients who previously had disease which progressed on a checkpoint inhibitor, they will be re-treated with a checkpoint inhibitor -- specifically, pembrolizumab in combination with entinostat, in the 601 study. And that pertains both to the non-small cell lung cancer patients and to the melanoma patients.

Great. Thank you.

Thanks, Chris.

Joel Beatty, Citi.

Hi, good afternoon, and thanks for taking the questions. My first question is on the [total] Phase 3 trial in HR-positive breast cancer. With 200 patients enrolled, could you walk us through if that's in line with your expectations? And what to expect as far as timelines for the PFS data and OS data?

Thanks for the question, Joel. So as I think I've mentioned consistently when we talk about 2112, we can only communicate to everybody what ECOG has told us. ECOG is the official sponsor of the trial. And as we had said when we -- on the road show, what they have told us is, they don't believe they can finish enrollment until any sooner than the second half of 2017.

As we look at the enrollment curves now, we -- independently looking at them -- we think that, that estimate of the second half of 2017 is plausible. But what they're telling us, it is no sooner than then. You'll remember that the PFS data is released at the time that we complete enrollment. So from a timeline point of view, you know, based upon what ECOG has told us, it is plausible that we could have the PFS data the second half of 2017.

OS will also be examined at the time of that PFS, but it will be quite immature OS data. And then there are regular, continued every six months -- approximately every six months -- assessments of OS. So the final assessment of OS, based upon what ECOG is telling us now, we don't believe would be until 2019. But there are interim looks along the way.

Thanks, that is helpful. And then one additional question on outlook for partnering. You have several -- or three ENCORE trials underway with different partners. Do you anticipate additional potential partners around entinostat?

Maybe I'll let Mike Metzger answer that question.

Thanks, Joel. So I guess you're asking specifically around immuno-oncology -- is that correct?

Yes, that's right.

So we're pretty happy with the partners we have. We're working with the leading companies, and at this point, we're not necessarily prospecting for new partners. That doesn't preclude us from working in a deeper fashion and extending what we're doing with our current partners, in additional indications. And I think we have been pretty clear in the past about how we could look to do that in the future.

Thank you.

(Operator Instructions)

Mike King, JMP Securities.

Good afternoon, guys. Thanks for taking the question. Sorry, I thought I had queued in already. A lot of my questions have been answered. I just was curious, Briggs, on the 2012 study, do you have any sense of how frequently you'll update that? Was this the first update until, you know, second half of 2017? Or do you think you will provide us with continuing updates along the way? And I'm also curious about where you might be in terms of site enrollment, and where you are in that process with regards to 2112?

Sure. So let me let Michael answer the second part of your question about site enrollment and where we are. And then I'll answer your question about periodic updates.

So I think according to ECOG, as Briggs pointed out, enthusiasm about the trial continues to increase. And as a result, site enrollment has increased as well. We have several hundred sites currently involved in the trial. Only a subset of those are actively enrolling at any given time. But that number is over 100, and continues to increase.

And I think, Mike, in terms of updating on timing, as I said, what I'll report to you is whatever ECOG tells us. So at this point, they're still telling us no sooner than the second half of 2017. We anticipate that as the enrollment sort of stabilizes, that they'll be able to, over time, give us a little better estimate of when they think they'll finish enrollment. And whenever they change their assessment, you know, we'll update all of you on that change.

Okay. So investors should not expect a regular quarterly update unless there is some deviation, plus or minus, from ECOG?

Yes, I think that is a good characterization.

Okay, thank you. And then secondly, as long as we're talking about things that are out of your control, when do we expect the next update from Hopkins?

Yes, I'll let Peter Ordentlich answer that question.

Yes, hi, Mike. In discussion with Dr. Brahmer running that study, what she's informed us is that perhaps sometime in the fourth quarter at one of the scientific conferences, we might see something.

Okay, thanks for that. And then finally, there was -- the previous question had to do with additional collaborations. But, you know, if I look at your pipeline chart as far as entinostat combinations, they're mostly with immune modulators. I'm just wondering, besides things like azacitidine and entinostat, are there going to be any other novel combinations, let's say, with hormonal therapies? Or other combinations with -- whatever they may be -- tomoxetine or perhaps enzalutamide, or anything like that, that we might anticipate? Thank you.

Yes, Mike, thanks very much for that question. We do continue to look at both I/O potential, additional I/O molecules we might want to combine with, as well as other agents as you have described. So at this stage of the game, we do have some pre-clinical work that we're doing, looking at other agents, and we can tell you more about that as those progress. At this stage, we don't have a -- we're not planning on starting a clinical trial with one of those other agents at this time. We're still doing a lot of pre-clinical work to try to sort through which ones might be attractive partners.

Right, I get it. Sorry, if I could just squeeze in one more, so Allan feels some love too. Do we have a thought on the cash runway, in terms of number of quarters or into a year in the future -- are you guys willing to commit to something like that right now?

First of all, Michael, I appreciate the love. Secondly, to your question, we believe our cash balances are sufficient to fund our existing development efforts into 2019 and through significant clinical milestones.

Perfect. Thanks very much.

I would now like to turn the conference over to Mr. Briggs Morrison for closing remarks.

Thanks very much, operator. Thank you again, everybody, for calling in for today's -- our first public Company earnings call. We appreciate your questions, and we appreciate your interest in Syndax, and look forward to keeping you updated as our progress continues. Thanks, and have a great afternoon.

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