Syndax Pharmaceuticals Inc (SNDX) 2016 Q2 法說會逐字稿

Good day, everyone, and welcome to Syndax second quarter 2016 earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Barbara Ryan. Please begin.

Thank you, Kat. Welcome and thank you to those of you joining us on the line and the webcast this morning for a review of Syndax second quarter 2016 financial and operating results. I'm Barbara Ryan, Syndax's Head of Investor Relations. And with me this morning to discuss the results and provide an update on our progress are Dr. Briggs Morrison, Chief Executive Officer; and Allan Shaw, Chief Financial Officer. Also joining us on the call today for the question-and-answer session is Michael Metzger, President and Chief Operating Officer of Syndax.

I would ask you to turn to slide two. Before we begin, I would like to remind you that any 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 factors section in our most recent quarterly report on Form 10-Q and other reports filed with the SEC. Any forward-looking statements represent our views as of today, August 9, 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 website.

Now, I would like you to turn to slide three. And I'm pleased to turn the call over to Dr. Briggs Morrison, Chief Executive Officer of Syndax.

Thank you, Barbara. Good morning 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 again reminding 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 at Syndax to come to work every day. Our mission has also guided us as we have developed and executed on our corporate strategy.

On slide four, that corporate strategy is summarized briefly. The foundation of our strategy is of course to have adequate financing and to continue to attract to retain the best talent to successfully achieve our mission. Following our IPO in early March, Syndax ended the second quarter with $125.5 million in cash, which we believe is sufficient to fund key clinical milestones for entinostat. Our obligation's related to the UCB license agreement to which we licensed SNDX-6352 and SNDX-6352's initial development while also enabling us to continue to effectively expand our pipeline.

We've also continued our efforts to bring in talented individuals to help us excuse our vision, which includes the recent appointments to our Scientific Advisory Board. The Scientific Advisory Board is chaired by Dr. Ron Evans, a distinguished professor at the Salk Institute for Biological Studies and the Syndax co-founder. And its members include six additional world-class physician scientists covering various aspects of oncology.

As of today, we have 26 outstanding fulltime employees dedicated to delivering on our strategy. There are three pillars of our strategy that rest on this foundation. The first is the Phase three trial of entinostat in hormone receptor positive for HER2- breast cancer, second to the development of entinostat in immuno-oncology. And the third is the identification, acquisition and development of new molecule. In fact, we now have four clinical programs evaluating combination therapies in multiple cancer indication for entinostat ranging from a late stage to Phase three study in breast cancer to multiple Phase one studies in immuno-oncology.

By year-end 2016, we expect to have a fifth clinical program underway when we initiate the single-dose ascending study for our newest asset SNDX-6352 and the anti-CSF-1R monoclonal antibody which we will discuss in more detail later. We believe that our success in acquiring this asset is a testament to our ability to leverage our advantage as a nimble development-focused company with deep development expertise and long tenured industry relationship. We believe that we have the right team in place to grow the business and continue expanding our pipeline with the right molecules to have potential to add significant value to Syndax.

As we look for these additional product candidates consistent with our mission, one of the questions we ask is whether the molecule has potential to improve the lives of people with cancer. That may seem obvious and yet it's an important scientific hurdle. In furthering this goal, Michael Metzger is leading our systematic business development effort. We have a broad network of scientific and clinical experts who help us in assessments of novel molecules, many of whom now sit on our Scientific Advisory Board. We're specifically looking for molecules that are either close to IND-ready like SNDX-6352 or have some initial clinical data. And we're currently focused more on solid tumors than [hematological ones].

Let me now turn to slide five to review our program in hormone receptor positive breast cancers. I'd like to first remind you that entinostat in combination with exemestane was granted breakthrough therapy designation by the US Food and Drug Administration for the hormone receptor positive breast cancer indications based upon positive results from our Phase two B clinical trial, ENCORE 301, which demonstrated approximately an eight-month improvement in overall survival.

On slide five is a brief summary of the current design of the Phase three trial called E2112. This trial is a randomized Phase three trial in which patients with advanced hormone receptor positive HER2- breast cancer have randomized to receive exemestane or exemestane plus weekly entinostat. The trial anticipates 600 patients in total, 300 patients per arm. It has two primary end points -- progression-free survival and overall survival.

We are pleased to report that enrollment for the E2112 has exceeded 50% of the target, according to ECOG, and the enrollment continues at an accelerated pace. The E2112 trial is being run in collaboration with ECOG and the National Cancer Institute under a special protocol assessment with the FDA.

Let me now turn to the second pillar of our strategy, our development of entinostat in immuno-oncology. On slide six, we briefly summarized the Syndax-sponsored trial either ongoing or planned in immuno-oncology. The first, termed ENCORE 601 is a Phase one B/two trial of entinostat in combination with pembrolizumab from Merck in patients with either non-small cell lung cancer or melanoma. The second, termed ENCORE 602 is a Phase one B/two trial of entinostat in combination with atezolizumab from Genentech in patients with triple-negative breast cancer. And the third, termed ENCORE 603 is a Phase one B/two trial of entinostat in combination with avelumab from the Merck KGaA-Pfizer alliance for patients with ovarian cancer.

So its escalation stage or ENCORE 601 has been completed as has patient enrollment at a five-milligram dose for the dose confirmation stage. We began dosing the first patients in ENCORE 602 in June of this year, and we anticipate starting to dose patients in the ENCORE 603 trial in the fourth quarter of this year.

Turning to slide seven, let me briefly summarize the ENCORE 601 trial in a little more detail. You can see from the slide that the Phase one B portion was divided into a dose escalation stage and a dose confirmation stage. At the time of our first quarter 2016 results in May, we reported that we had completed the initial dose escalation stage of ENCORE 601. And based upon those results, the study investigators had recommended moving into the dose confirmation stage at the five-milligram dose, which is the same dose of entinostat we're using in our Phase three hormone receptor positive HER2- negative breast cancer [file].

Indeed enrollment in the dose confirmation stage of ENCORE 601 has now been completed, and we have reviewed the safety data. And along with the study, investigators have made the decision to proceed to the Phase two portion of the trial. Screening of patients for the Phase two portion has begun, and we anticipate dosing the first patient in the third quarter of 2016. An abstract has been submitted for presentation at the Society for Immunotherapy of Cancer, referred to as SITC for their annual meeting in November, which includes safety, biomarker data, and initial efficacy data from the completed Phase one B portion of ENCORE 601 in patients with non-small cell lung cancer. Additional detail on the Phase two design can be found on slide 8, and I won't cover that in detail right now, but I can take questions.

Turning to slide nine, let me briefly summarize the ENCORE 602 trial. You can see from the slide, this is a Phase one B/two clinical trial evaluating patients with triple negative breast cancer. Consistent with our prior guidance, we did indeed dose our first patient in June of 2016 at the five-milligram dose in the open label Phase one B portion, an abstract describing the trial had been submitted for presentation to the trials in progress track at the San Antonio Breast Cancer Symposium in December, we now anticipate presenting data from the Phase one B portion during the first half of 2017.

Our business strategy for IO collaborations relies on common core principles. All of our partners provide study drug. It's a very important scientific insight and collaboration, including a provision of certain proprietary assays. But Syndax runs these studies as the sponsor, which we believe is important for driving study progress.

In addition to the partnerships in clinical trials that I have just discussed, we are continuing to generate clinical and pre-clinical data through our academic collaborations and our creative with the NCI through which we continue to evaluate Entinostat potential when combined with multiple immunotherapies. We except to generate substantive incremental data from our immuno-oncology clinical collaborations over the next 12 to 24 months and of course look forward to updating you on our progress.

Turning now to slide ten, we'll talk about our newly licensed antibody UCB 6352, which we refer to as SNDX-6352, a potential best in class IND-ready anti-CSF-1R monoclonal antibody. We've previously reviewed with you the preclinical signs that indicate that entinostat can suppress the function of both myeloid-derived suppressor cells and regulatory T-cells. The third immunosuppressant cell type in the tumor micro environment is tumor suppressant macrophage, which is depleted by the CSF in our antibody. We believe the combination of entinostat plus SNDX-6352, so therefore potentially address many, if not all of the immune suppresser cell type in the tumor micro environment.

Turning to slide 11, we feel very fortunate to have been chosen by UCB to develop this potentially best in class molecule. There's a high affinity [IGD] for antibody that locks both CSF-1R [logins], [CSF-1 and IO-34]. We believe that SNDX-6352 has the potential to be used to treat a wide variety of cancer in patients in combination with other oncology agents including immune checkpoint inhibitors, radiotherapy, chemotherapy, and entinostat. We have clinical supplies ready and anticipate initiating a single ascending dose trial by year-end 2016. We have submitted an abstract with more details around this antibody to the Citi meeting for 2016. 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 12 for the three months ended June 30, 2016, Syndax reported a net loss attributable to common stockholders of $8.4 million or $0.47 per share, versus a net loss attributable to common stockholders of $26.3 million or 440.52 per share for the comparable year period. The net loss per share calculations for the three months ended June 30, 2015 included the impact of dividends in accretion on the convertible preferred stock, which converted into common stock upon the completion of the initial public offering in March 2016. Hence, does not impact orderly loss calculations in this quarter.

The net loss for the three months ended June 30 of 2016 included a noncash stock-based compensation expense of $800,000 related to the issuance of stock option awards to employees and non-employees. Our research and development expenses in the second quarter of 2016 increased by $3.8 million to $6.1 million when the comparable prior year period primarily due to increased clinical activities.

At general administrative expenses, we're at $2.8 million during the second quarter of 2016, and we're below the comparable prior year period of $3.3 million primarily due to nonrecurring 2015 restructuring charges which was possible offset by increased costs of operating as a public company in 2016.

A total common share issued an outstanding as of June 30, 2016 with 17,782,150. We also had 3,073,268 common stock equivalent outstanding for a total of 20,855,418 shares of common stock and common stock equivalent outstanding as of June 30, 2016.

Additional financial details will be available in our Form 10-Q for the second quarter 2016, which is expected to be filed no later than August 15, 2016. Furthermore, Syndax ended the second quarter with cash/cash equivalents and short-term investments of $125.5 million, which we believe is sufficient to fund developmental efforts into the middle of 2018, which we expect will encompass key clinical milestones. We believe that we are in a strong financial position as a result of our recent IPO and shall receive financing, both of which were anchored by participation of several leading institutional investments. We will continue to make appropriate and measured investments in building our company as evidenced by our capital efficient end license of SNDX-6352. I would like now to turn the call back over to Briggs.

Thank you, Allan. Before we open the lines for questions, I'd like to turn to slide 13 and make a few summary remarks. I believe we have assembled a strong leadership team with good experience in development of oncology agents and in building successful companies. Following our IPO, we believe that we have the funds to develop the development of entinostat multiple indications as well as the development of SNDX-6352. We are actively pursuing additional business development opportunities to expand our pipeline. We're pleased with our continued progress in the Phase three trial for entinostat hormone receptor positive, HER2- breast cancer, as well as the collaborations we've entered into with leading companies with checkpoint inhibitors to explore the synergistic effects of entinostat with other immunotherapy. Our ability to successfully end license SNDX-6352, an anti-CSF-IR strategic asset with the potential to be best in class is a testament to our strong leadership team.

These opportunities collectively form the basis of our optimism 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 our stockholders. I'll note that in September of 2016, the Syndax management team plans to participate in the investor conferences hosted by Citi, Morgan Stanley, Rodman and Renshaw, and Ladenburg Thalmann. We look forward to seeing many of you at one or more of those conferences. Thank you and I'd like to now open the call for question.

Thank you. Ladies and gentlemen, if you have a question at this time, please press star then one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Our first question comes from the line of Matthew Harrison, with Morgan Stanley. Your line is open.

Good morning. This is [Dave Lee Woodson] for Matthew. A quick question on ENCORE 601. Was there any efficacy bar that needed to be exceeded to go to Phase two?

Thanks for your question, Dave. No, there's no efficacy bar. It was a Phase one B. It's a safety assessment to pick a dose that goes to Phase two, so all that was required was for the investigators to pick a dose that could be safely combined with pembro.

Sure. Were the [AEs] seen typical of [AEs] from the past?

Generally speaking, yes.

If I may, but what were the types of [AEs] seen?

So that's in the abstract that we'll be presenting at Citi, so perhaps we can wait for that.

Okay, fair enough. Was there any biopsies taken that perhaps might shed some light on the synergies between the [age tack] and the checkpoint?

Right, so there are pretreatment biopsies in all patients. There's, to my knowledge, only one patient had a post-treatment biopsy as well to look at what happened to the tumor in the combination therapy.

Okay, fair enough. And one more question. On the new compound, what types of studies might we be looking at to begin in the fourth quarter?

So in the fourth quarter study, will be a single ascending dose trial in healthy volunteers. And then we do have planned and we're making efforts to get started a multiple ascending dose trial in patients with cancer that would potentially start early in 2017, but we haven't talked about any further development plans at this point.

Okay. Fair enough. Thanks for taking my questions.

Thanks, Dave.

Thank you. Our next question comes from the line of Mike King with JMP Securities. Your line is open.

Thanks for taking the question, and congratulations on the progress. You guys have really made quite a different company out of the -- since the IPO. I'm just wondering, another question on ENCORE 601, just in light of the findings in [checkmate 026], I guess a couple of questions from a strategic commercial perspective, Briggs, do you think about any openings or opportunities that may result for you guys presuming success in combination? That's the first question.

And then the second question is what does it -- does it tell us anything about surrogate end-points short of overall survival such as PFS, or does one really need to run trials out completely to overall survival data before determining the clinical success of combination therapy?

Yes, thanks for your questions, Mike. So I think the first question about opening up strategic commercial opportunities, I mean, obviously, we have partnerships with three of the leading firms who have collaborated with us to do the trials that we have ongoing. And so we're very pleased with those partnerships and would continue to leverage those.

I think the question about -- I think we all have to just wait again and see the full dataset from the [CMS] trial before we make any conclusions. But I think if you look across the IO landscape in general, there have been cases where PFS and OS have sort of disconnected. Remember the renal cell trials [at CMS] where there was no difference in PFS, but a big difference in OS. And that has been seen with other sort of IO active agents in the past. So -- and, again, I think what -- the end-point that probably matters the most to everybody is OS. And so that's why for example our hormone receptor positive breast cancer trial is primarily an OS trial -- the thing that led to break the designation with the OS improvement. So we do believe that OS is critical and this question of what are the intermediate points that predict overall survival, I think, there have been times where PFS has been challenging the IO space.

Okay, fair enough. I guess I was looking more for an angle from Merck's perspective since it's sort of a two-person battle right now.

We have a collaboration with Merck. We're doing our Phase one/two trial with their agent, and we look forward to as the data accumulates, sharing it with them and having discussions with them.

Okay. Great. And then just on 2112, congrats on the success and enrollment. I'm just wondering if you can help us understand what factors contributed to the aggressive enrollment. And secondly, is there any chance that you might be able to actually -- I know you don't control it, but is it possible that the target enrollment timelines could be beaten? Thank you.

Yes, thanks, Mike. So again, some of these large trials often take a little bit of activation energy before they hit their stride. We do think that there were a couple of -- one primary change to the protocol, an amendment that was put in last summer where we allowed patients who had had previous [casodex] to come into the trial. That was not in the original design. And that definitely has helped -- as we hear from ECOG, that's definitely helped enrollment.

We refer to the trials continuing at an accelerated pace. When the trial was designed, there was an assumption around what the monthly enrollment rate would be. And for the past probably six months, we've been exceeding that target enrollment rate. So it is progressing very nicely. We hope that by our next earnings call, we can give you a little clearer guidance on when ECOG thinks they'll finish enrollment.

Thanks for taking the questions.

Thank you. Again, ladies and gentlemen, if you have a question, please press star, then one on your touchtone telephone. Our next question comes from the line of Joel Beatty with Citi. Your line is open.

Good morning and thanks for taking the questions. For Syndax-6352, if you compare that to the other CSF-IR agents in development at several other companies and how the profile looks differentiated to you?

Yes. Yes, so thanks for the question, Joel. If you look at just the sort of chemistry the molecule, it's mostly like the [five point] molecule and that is what the [five point molecule] is also an [ICG4] high affinity [blocks] for [BIO 34] and CSF1. So I think most is like that one. The other antibodies that the -- the main difference from the Roche's antibody is the Roche antibody blocks the [diamortization domain] -- doesn't block the ligand-binding domain, and that's sort of what I would say. I think both the Anthem and Lilly molecules are different IgG isotype, which clinically we'll have to see whether that matters or not.

So I think from a chemistry point of view, that it's mostly like the [five prime one]. We'll see as we get into the clinic and as the other molecules progress through the clinic, whether those chemical differences can translate into either efficacy, safety, or combine ability differences.

Okay. Great. And then one more follow-up question. If you were to bring in additional agents to the company, how would you anticipate that affecting your cash on hand and cash burn?

I'll let Michael Metzger take that question.

Thanks, Joel. So yes, I think we, as Briggs mentioned in his remarks, we are actively looking for additional molecules. And at this stage, I think we have room in the budget to accommodate other activities in that regard to the extent that we find something that changes our cash guidance upon acquisition. That's something we'll update, but at this point we feel like we have some flexibility in what we're doing with the cash we have on hand to accommodate additional molecules.

Great. Thank you.

Thank you. Our next question comes from the line of Michelle Gilson with Oppenheimer. Your line is open.

Hi, guys. Congratulations on the quarter. I was wondering if you could tell us a little bit about the end licensing process for 6352 and maybe the competitive nature of that process. And then I also have a follow-up.

Okay. I'll let Mike Metzger take the question about the end licensing process.

Sure. Thanks for the question. So as you might imagine, it's always competitive when you're looking at additional molecules of interest, so we did face competition in the process. We had received the opportunity to bid on the project with UCB. Briggs actually has some connections with the company in the sense that he's on their Scientific Advisory Board, so we did have some knowledge of their desire to no longer develop the molecule in oncology, so we were able to move quickly.

The way we typically process opportunities internally is it's pretty typical. We do look as a team at a variety of opportunities, and we have scores of them at any given time as we if go through a systematic approach to the targets of interest that we have, as well as trying to remain focused on solid tumor opportunities versus hematological ones. And this fits into the profile at both the stage and the target and [metal] of our screens, as well as a competitive process that we were able to prevail, and mostly from the standpoint of being a very focused and nimble development organization that companies have come to appreciate as we move entinostat through clinical development and show that we can develop other molecules. So we feel very fortunate to have received the opportunity. And we do expect through a variety of means and the management team is looking at other opportunities coming out of pharma, coming out of smaller companies that don't have the opportunity to develop them.

All right. Great. And then from what you're seeing in safety-wise in ENCORE 601, does it look like you guys could add another agent such as 6352 to that combination?

Yes, thanks for the question, Michelle. So as I sort of highlighted in my answer to Dave's question, the safety is the combination of [five of] entinostat with 200 pembro is well-tolerated, and it's what we're taking into the Phase two portion. You could always add another agent to that contingent upon what toxicities might appear when you put all three of them together. So it's more of a theoretic question that we'd have to do the experiment to find out. If you look at the known toxicities so far described for the CSF-1R antibodies, they don't overlap with the ones that have been seen with either entinostat or pembro. So in theory, that could be practical. We would really need to do the experiment to see whether that as we did with the entinostat that they would enhance the frequency or severity of any of their currently-described adverse experiences.

Okay, great. Thank you guys and congratulations again.

Thanks, Michelle.

Thank you.

Thank you. And I am showing no further questions at this time. I'd like to turn the call back over to Dr. Briggs Morrison, CEO of Syndax, for any closing remarks.

Great. Thank you very much, everybody, again, for attending the webcast and for your interest in Syndax. As I noted, we'll be at a number of conferences in the month of September and we hope to see some of you there. Thanks very much. Have a good day.

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