Syndax Pharmaceuticals Inc (SNDX) 2017 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Syndax Third Quarter 2017 Conference Call. (Operator Instructions) As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, Ms. Melissa Forst of Argot Partners. You may proceed.

Thank you, operator, welcome and thank you to those of you joining us on the line and the webcast this afternoon for a view of Syndax's third quarter financial and operating results. I'm Melissa Forst of Argot Partners, and with me this afternoon to discuss the results and provide an update are Dr. Briggs Morrison, Chief Executive Officer; and Rick Shea, Chief Financial Officer. And also on the call today for the question-and-answer session will be Michael Metzger, the President and Chief Operating Officer; and Michael Meyers, Chief Medical Officer.

The call is being accompanied by a slide deck that has been posted on the company's website, so I would ask that you please turn to our forward-looking statement on Slide 2.

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 the company's most recent quarterly report on Form 10-Q and other reports filed with SEC. Any forward-looking statements represent our views as of today, November 7, 2017, only. A replay of this call will be available on the company's website.

And at (inaudible), please turn to Slide 3, and I'm pleased to turn the call over to Dr. Morrison, Chief Executive Officer.

Great. Thank you very much, Melissa. And thank you to everyone who's joining us on today's call and on the webcast.

This afternoon, I'll share the progress we've made during the third quarter as we continue to execute on our corporate strategy in support of our primary mission, which is to develop innovative therapies that will enable patients with cancer to live longer and better than ever before.

Slide 3 briefly summarizes our corporate pipeline, which includes 2 potential best-in-class molecules, entinostat and SNDX-6352, which are being tested in 5 ongoing clinical trials across 6 different indications. This quarter, we expanded our pipeline with a third set of assets through a license agreement with Vitae Pharmaceuticals, a subsidiary of Allergan, for a portfolio of small molecule inhibitors of the Menin-MLL-r interaction. I'll share more about these assets later in this call.

I'd also like to highlight that Kyowa Hakko Kirin recently dosed the first patient in a pivotal trial of entinostat, which triggered a $5 million milestone payment to Syndax from Kirin. Similar to our ongoing Phase III study, E2112, KHK is running a randomized double-blind placebo-controlled pivotal Phase II trial, testing the combination of entinostat and exemestane versus exemestane monotherapy in Japanese patients with advanced or recurrent hormone receptor positive HER2- breast cancer.

Slide 4 provides an update on the milestones that we've previously communicated to all of you. I'm pleased to see the steady progress against these milestones.

Slide 5 is an in-depth update to our Phase II ENCORE 601 trial. As you saw in the SITC abstracts that were released this morning, we've seen some interesting responses in the PD-1 refractory non-small cell lung cancer patients treated with entinostat and KEYTRUDA in combination. These findings reinforce the results from our PD-1 refractory melanoma cohort that we presented at ASCO earlier this year, adding additional data to support the concept that entinostat can reverse resistance to PD-1 therapies. This data had been well received by our non-small cell lung cancer investigators as it's led to rapid accrual of the second stage of the cohort, which has now reached its target of enrolling a total of 56 patients.

As also noted in the abstracts released this morning, we've met the prespecified objective response threshold to advance into the second stage for the Phase II trial for the non-small cell lung cancer cohort, which is enrolling patients who have not previously received a PD-L1 inhibitor. The goal there was to have at least 4 responses in 17 patients. However, despite this extremely promising data, we've chosen not to progress to the second stage of this cohort at this time.

As you know, there are many pivotal trials reading out over the near term in first line non-small cell lung cancer. We'd like to see the data from some of those trials before we undertake further trials in this population of patients.

This Saturday at SITC, Dr. Leena Gandhi from NYU will deliver an oral presentation covering the safety and efficacy data from the Stage 1 of both the ENCORE 601 non-small cell lung cancer cohorts, the 17 patients in the naïve cohort and the 31 patients in the refractory non-small cell lung cancer cohort.

Slide 6 provides a summary of the target enrollments and current enrollment status for each cohort of the ENCORE 601 trial, which has a Simon two-stage design. I'm pleased to report that enrollment in all cohorts made remarkable progress this quarter with both the first stage of the colorectal cohort and the second stage of the PD-L1 refractory non-small cell lung cancer cohort achieving full enrollment. You will again note that for the cohort of non-small cell lung cancer patients who have not previously been treated with a PD-1 antagonist, we've met that threshold to advance to Stage 2 with at least 4 responses.

As previously communicated, you can expect updates on the clinical data from the refractory non-small cell lung cancer cohort, the full 56 patients; the refractory melanoma cohort, the full 34 patients; and the colorectal cohort, the first 13 patients; all in the first half of 2018.

Let me now make a few comments about our refractory melanoma program. Slide 7 highlights the unmet need for new treatment options for patients who fail a PD-1 antagonist either alone or in combination with a CTLA-4 inhibitor. It's clearly an area of high unmet medical need. And based upon the promising data from our ENCORE 601 trial that we presented at ASCO this year in this population of patients with refractory melanoma, we undertook a series of regulatory consultations, both with the FDA and with European agencies. We anticipate providing an update on our clinical development and registration plans for this indication in the first half of 2018 along with the updated clinical data on the full 34 patients from the refractory melanoma cohort of ENCORE 601.

Turning to Slide 8. I'll just briefly review the status of the remainder of the ENCORE program. Enrollment in 602, which is our Phase Ib/II trial exploring the combination of entinostat with Roche Genentech's anti-PD-L1 antibody TECENTRIQ in women with metastatic triple negative breast cancer who received 1 to 2 prior lines of systemic therapy. This remains ongoing for the randomized Phase II portion of the trial.

We now expect to complete enrollment in the first half of '18 and remain on track to have results in the second half of '18. For ENCORE 603, which is our Phase Ib/II trial testing entinostat in combination with BAVENCIO, the anti-PD-L1 antibody developed by the Pfizer-Merck KGaA alliance, in women with advanced ovarian cancer who have previously received 3 to 5 lines of therapy, enrollment similarly remains ongoing for the Phase II portion of the trial. As previously shared, we expect to complete enrollment in the first half of 2018 and present results in the first half of 2019. For both of these studies, the primary endpoint is progression free survival and the secondary endpoints include overall response rate and overall survival.

Let me now provide an update on E2112, our Phase III breast cancer trial. Slide 9 summarizes the trial design and the endpoints. We've recently learned from the trial sponsor, the ECOG-ACRIN Cancer Research Group, that the Data Safety Monitoring Committee has completed the final PFS analysis and the first interim OS analysis. The results of this analysis are held confidentially by the ECOG-ACRIN study statistician and the Data Safety Monitoring Committee. No communication regarding this analysis will be released until completion of enrollment, which ECOG-ACRIN expects will occur in the first half of 2018.

As you may recall, E2112 represents one of the first Phase III trials involving a novel mechanism of action in this setting since the approval of agents targeting CDK4/6. The trial is 83% enrolled, and we continue to work with ECOG to bring this important trial to completion. We anticipate a potential NDA filing next year if the PFS analysis is positive.

It's our belief that entinostat has blockbuster potential to serve as a second or third line therapy for hormone receptor positive HER2- metastatic breast cancer. As you'll see on Slide 10, we estimate that there are approximately 34,000 patients [through] the launch who receive hormone therapy after failing first-line therapy and who could therefore potentially be eligible to receive entinostat. Based on feedback from ECOG-ACRIN, we also anticipate at least 30% of the patients enrolled in E2112 will have previously received a CDK4/6 inhibitor.

Let me now turn to SNDX-6352, our potential best-in-class monoclonal antibody targeting the CSF-1 receptor. As we've previously noted, SNDX-6352 has demonstrated a unique profile that includes a high affinity and ability to prevent binding of both IL-34 and CSF-1 to the CSF-1 receptor and potential synergistic activity with other therapeutic classes.

As shown on Slide 11, it functions by blocking the ligand binding domains of the cell surface protein receptor CSF-1R, which plays a critical role in regulating proliferation, survival and differentiation of tumor-associated macrophages. These are immuno-suppressive cells found in the tumor microenvironment that inhibits the ability of tumor-infiltrating lymphocytes to attack and kill tumor cells.

We believe that more effective treatment of a variety of cancers will necessitate novel drug combinations to overcome the intense immuno-suppression in the tumor microenvironment. And based on evidence to-date, we also think that SNDX-6352 has the potential for complementary or synergistic activity when used either with checkpoint inhibitors, cell therapies, chemotherapy or radiation therapy. It may also be synergistic with entinostat, which has been shown to inhibit the 2 other critically immuno-suppressive cells in the tumor microenvironment, the myeloid-derived suppressor cells and the regulatory T cells.

We've completed the Phase I single ascending dose trial. This agent in healthy volunteers, during which we noted changes in CSF-1, IL-34 and circulating monocyte levels, all consistent with the mechanism of a CSF-1R inhibitor.

We'll present the detailed results from this study at SITC later this week. Additionally, this past quarter, we initiated the multiple ascending dose trial in patients with various solid tumors, and we've completed enrollment in the first cohort of that trial.

Turning to Slide 12. As I mentioned earlier, we recently entered into an exclusive worldwide license agreement with Allergan for a portfolio of preclinical oral small molecule inhibitors of the interaction of Menin with the MLL protein. These compounds have potential application in the treatment of a genetically defined subset of acute leukemias with chromosomal rearrangements involving the MLL-r gene.

Let me first introduce you to the disease and the biology. MLL-r leukemia generally presents as either ALL or AML and a particularly bad prognosis that represents a well-defined area of high unmet need. It may also meet the guidelines for orphan designation.

Importantly, this patient population is routinely identified in clinical practice today. The leukemias are driven by the fusion protein depicted in the diagram on the right. The fusion protein -- the fusion proteins all retain the amino terminal of MLL1, including the rate -- the region that binds to Menin. But the carboxy terminal consists of a portion of a different gene. This fusion protein thus abnormally links a family of proteins to , thereby causing transformation.

This is diagrammed more fully on Slide 13. You will see on the top panel that the MLL fusion protein binds to and also thereby abnormally brings a large family of proteins to a specific region of DNA, causing abnormal transcriptional activation of a family of genes. You can see on the bottom panel that the inhibitors block the binding of the MLL fusion protein to Menin, and hence, the entire family of abnormally recruited proteins are displaced. This leads to decreases in cell proliferation and induction of both differentiation and apoptosis.

We believe that targeting of a specific genetic fusion protein is an attractive and proven strategy as summarized in Slide 14, as it could potentially allow us to run very focused clinical trials involving a prospectively defined patient subpopulation harboring this genetic marker. This in turn potentially afford us an opportunity for a more rapid regulatory path forward as we have seen with other companies who have developed therapies targeting specific fusion proteins. On the right, we summarize a number of examples of this approach.

This transaction represents another example of how Syndax creates value through in-licensing high potential assets. As summarized in Slide 15, the transaction involved a modest upfront payment of $5 million with downstream contingent development regulatory and sales milestones and tiered royalties on future sales.

Under the terms of the agreement, we are responsible for the development, manufacturing and global commercialization of this portfolio, and we believe we're well positioned to develop this unique product portfolio, which may have therapeutic potential in diseases beyond MLL-r leukemia.

Before I turn the call over to Rick Shea, our Chief Financial Officer, to discuss our financial results and update you on our balance sheet, let me just remind you of our data presentations at SITC later this week, shown on Slide 16. This includes results from Stage 1 of both the non-small lung cancer cohorts of ENCORE 601 as well as initial biomarker analysis from the refractory melanoma cohort and results of the Phase I single ascending dose monotherapy study of SNDX-6352 in healthy volunteers.

And with that, I'll turn it over to Rick for the financial update.

Thank you, Briggs. Turning to Slide 17. For the 3 months ended September 30, 2017, Syndax reported a net loss of $15.1 million or $0.68 per share compared to $15.0 million or $0.84 per share for Q3 2016. Our research and development expenses in the third quarter of 2017 decreased to $12.2 million from $12.3 million for Q3 '16 primarily due to an increase in clinical trial activities of $3.9 million and increased employee compensation expense of $0.9 million offset by a $5 million upfront payment in Q3 2016 related to the in-license of SNDX-6352 from UCS -- UCD.

Our general and administrative expenses were $3.6 million during the third quarter of 2017 compared to $3.3 million for the prior-year period. In G&A, we had an increase of noncash stock compensation of $0.4 million and an increase in salary expense of $0.2 million due to increased headcount offset by decreased legal fees of $0.3 million.

As of September 30, 2017, there were $22.3 million common shares issued and outstanding, and on a fully diluted basis, using the Treasury stock method, we had 23.1 million shares outstanding. Additional financial details will be available in our 10-Q, which we expect to file this week.

Syndax ended the third quarter with a cash balance of $120.6 million, which we believe is sufficient to fund developments into 2019, enabling us to reach key development milestones. In addition, in the fourth quarter, we completed a $25 million registered direct offering of common stock, which further strengthened our shareholder base and extended our financial runway through significant value inflection points further into 2019. Also in the fourth quarter, we earned $5 million from KHK for the achievement of a development milestone, which on a cash basis, will offset the $5 million upfront payment we made to Allergan for the Menin license.

Looking ahead, we expect R&D expenses for the fourth quarter to be in the range of $15 million to $18 million and total operating expenses to fall between $19 million and $22 million. For the year, we expect R&D expenses to be between $47 million to $50 million and total operating expenses to come in between $63 million and $66 million.

I would like to now turn the call back over to Briggs.

Thank you very much, Rick. Looking ahead, we anticipate several key upcoming milestones, all of these summarized in Slide 18.

As you can see, the first half of 2018 is very data rich, and we look forward to sharing this data at appropriate scientific conferences. As always, I'd like to thank the team here at Syndax, our collaborators and, most importantly, the patients, trial sites and investigators involved with our clinical programs.

With that, I'd like to open the call for questions.

(Operator Instructions) And our first question comes from Christopher Marai with Nomura Instinet.

I wonder if you could perhaps provide a little more granularity on some of the data that we might see from your studies of entinostat plus pembro in non-small cell lung cancer at SITC. Obviously, a 10% response rate hit your threshold, but clearly some patient characteristics, particularly prior lines of therapy, what they had received in time since last therapy could be important. Wondering if you're seeing that or you'll provide an update around SITC on that. And then secondarily, just with respect to the regulatory path forward, for entinostat in combination with pembro or anti-PD-1, PD-L1 therapeutic, can you maybe elaborate on where you see those going?

Thanks, Chris. So first, in terms of the non-small cell lung cancer data at SITC, as I said, Dr. Leena Gandhi will do the presentation Saturday afternoon, and then there's also a poster that will outline additional data that she's not able to cover in her 10 -- I think it's a 10-minute presentation. So all the things that you're interested in, in terms of prior lines of therapy, PD-L1 status, probably interval from when they were treated with -- progressed on PD-1 to when they went onto our study, many kinds of questions I think people have about that trial, that data will be available either in Leena's presentation or in the accompanying poster. Your second question was about melanoma?

Yes. The regulatory path forward for entinostat plus pembro across the board, actually. Maybe, when do we get some more details on that path forward from you guys?

Right. So as I said in my prepared comments, we've had now regulatory consultations both with the FDA and with some European regulatory agencies. We have at least one more regulatory consultation. So our guidance would be that in the first half of next year, we'll have consolidated all of that feedback on approaches to the development of melanoma both in terms of accelerated approval approach here in the U.S. and full approval in the U.S. and full approval globally. And so our intent would be to share potentially our -- exactly what we're going to do around the time that we have some update on the full 34 patients in that cohort. We have not yet had any regulatory consultations regarding other indications.

Okay. Great. And then just one quick one while we're on the topic. I mean, any additional data we may see on the specific molecular mechanism behind resensitivation of those patients? That could be interesting. And then finally, I'll just throw one last one in for the Menin. When do we expect that to enter the clinic? And then I'll jump back in queue.

Sure. So there -- as I indicated, there is a poster that looks at the biomarkers pre- and post-biopsies pre- and post-therapy from the melanoma cohort. And again, you'll get a chance to see if we have a fairly broad biomarker search effort there and aspects of that will be presented at SITC. I think your last question was when do you think the Menin inhibitor will enter the clinic. We've guided to the beginning of 2019. We have some additional preclinical work to do to pick amongst the portfolio and some IND-enabling studies.

And our next question comes from Bert Hazlett with BTIG.

Briggs, as we move towards material events with E2112 as ECOG moves forward more rapidly with the enrollment, if you could please just remind us of the -- let's call it the potential decision outcomes with PFS and OS as the data emerges in the middle -- in the beginning of next year?

Sure. Thanks, Bert. So as people may remember, there are 2 endpoints for the trial, PFS and OS. They are not hierarchically tested. They are separately tested. So you can win on either PFS or OS. As I indicated, the final PFS analysis and the first interim OS analysis has been completed. That's held confidentially by the data safety monitoring committee. It will be released when enrollment is completed. I will also note that the additional interim analyses of OS are done every 6 months. The final OS is done once we have 410 overall survival events. And we estimate that, that would occur somewhere between 18 to 24 months after the completion of enrollment. Hope that answers your question.

That does. And just one quick one on -- enrollment has proceeded rapidly in a number of incremental -- or not incremental but another series of indications beyond non-small cell and melanoma. Any particular read into the enrollment -- the rapid enrollment in those studies?

Yes. So I think in the refractory lung cancer population, as I said, I think the fact that we're seeing responses in refractory patients has encouraged our investigators, and they've enrolled quite rapidly, the colorectal cohort -- (inaudible) investigators actually came to us with that suggestion, and they have followed through and enrolled very rapidly. So -- and again, the melanoma cohort based on the positive data we had at ASCO, I think people were encouraged. So I think it's a combination of actual data that they're seeing from the early stages and excitement around the mechanism.

And our next question comes from Hartaj Singh with Oppenheimer.

Just a quick question on the melanoma -- the potential melanoma design. Briggs, you kind of hinted at potentially accelerated approval in the U.S. and then global. How would you sort of structure the patients you're going after because you've shown data in both monotherapy in a PD-1 usage and then combined with CTLA-4. I mean, how are you thinking about those 2 patient types? And then what would be a sort of an endpoint for an accelerated approval here in the United States and kind of read through for the Europeans or a global filing in that regards? And just got a quick question after that.

Right. So, thanks, Hartaj. I mean, as you saw in our ASCO data, about 2/3 of the patients had received both the PD-1 and a CTLA-4. About 1/3 had received PD-1 monotherapy. I think from a usage point of view, there's probably more sequential usage now of PD-1 and then using CTLA-4 in some patients because of the sort of readout of the Phase III trials. I think from our point of view, there -- as long as they have progressed on a PD-1 or PD-1 CTLA-4, those patients would both be eligible for programs that we're thinking about. As you can imagine for accelerated approval in the U.S., most commonly, people use objective response rate with some level -- with an expectation around durability of those responses for randomized pivotal trials, both in the U.S. and Europe. I think regulatory agencies are generally in favor overall survival as their primary endpoint of those trials or at least an assessment of overall survival. But PFS can also be used.

Got it, Briggs. And just on your lung cancer. I know you've just paused the naïve patient cohort. Is there a possibility that when you look in the first half of 2018 and you look at moving your -- at least the second line of the experienced lung cancer patient 4s into a next stage of clinical trials that you could run a clinical trial that has both naïve and PD-1 experienced patients? Or that's not possible. You have to do 2 separate trials.

Yes. So Hartaj, I think it really depends on the question that you're asking in the trial. I think the main reason we wanted to focus our resources on the refractory population at this point is that that's, I think, an area of clear unmet need. Maybe going out a little bit on a limb here, but I think by the time entinostat gets approved in non-small lung cancer, it's probably reasonably likely that most newly diagnosed lung cancer patients will receive a PD-1 as part of their primary therapy, either in monotherapy as we see with KEYTRUDA today for the PD-1 highs in combination with chemotherapy as we see some patients getting today with KEYTRUDA or in combination with CTLA-4. So the common thread there is there's going to be refractory patients, and we think that's an area of unmet need that really there haven't been a lot of advances yet. So that's where we'd like to focus, but for the patients who have not yet received a PD-1, there's certainly potentially biomarkers in subpopulations where there's still significant unmet need, and we're open to seeing how that field plays out.

(Operator Instructions) And our next question comes from David Lebowitz with Morgan Stanley.

This is Vikram on for David. Just one question from our side. Could you run us through the design of the 6352 study? And then also if you could comment on how this molecule compares with Five Prime's CS-1 -- CSF-1R that's going to update (inaudible) this weekend? That would be helpful.

Yes. So the 6352 study that's being presented at SITC was a single ascending dose trial in normal healthy volunteers. The primary intent was to understand PK and PD. So because it's done in normal volunteers, there's really only safety, PK and PD. There's no efficacy data. The multiple ascending dose trial that we have just opened is, again, primarily safety PK/PD study in all comers oncology population where they can be treated with multiple doses of the agent. In terms of how it compares to the Five Prime one, there are many similarities. Both antibodies are IDT-4. Both antibodies block the binding of both CSF-1 and IL-34. And both antibodies are relatively high affinity. So there's significant similarities between our drug and the Five Prime drug.

And our next question comes from Chris Shibutani with Cowen and Company.

I apologize. I had some technical issues earlier, in case this question was asked. But you've had incremental news about a new molecule that you acquired, this MLL-r leukemia [outpatient.] Can you talk about sort of how you're thinking about the overall portfolio? I think a lot of your assets can seem disparate but certainly there is a potential for them to kind of create this mosaic, possibly combine. Where does this fit in? Is there a relationship that would make sense, rather than perhaps was it just opportunistic? Maybe some context for this as well would be helpful.

Sure, Chris. I think, as I sort of joke to my team, the only requirement we have for molecules we liked and finish is that they actually work. That was a joke. So, I think our approach has been to be opportunistic. It's a little hard when you're licensing in molecules to say, "I'll only do this," or "I'll only to do that." So we look for, first off, things where we think the science is particularly strong and then where the molecules that have been invented look like they're going to be great molecules. So I think when we did the CSF-1R deal, we thought that the biology behind tumor-associated macrophages was quite strong, and the antibody from UCB was sort of exactly what we thought we would want in that class. I think the biology around the Menin-MLL-r program is really quite remarkable. It's been evolving now for some time. And we were extremely fortunate that the group from Vitae had some really, really very potent, what looked like really good molecules. So again, we like the science. We like the chemistry that's been applied to it. And as I said in my prepared remarks, we think it has a sort of higher-than-average chances of success given that it's targeting these defined rearrangements that the tumor has essentially told you what the etiology is. So we are open to both solid tumors and liquid tumors and where there's unmet need and good science and good molecules, we'll go after them.

It's helpful sometimes obviously that this target has some validation as you describe in your deck. I believe there's some other players in amongst competitors. Kura has an Menin-MLL inhibitor, I think KO-539. Could you compare and contrast what you've just brought into your portfolio versus the Kura or any other compounds that you think might be kind of a similar stage?

Yes, it's a little hard to compare. Obviously, we're well aware of the Kura compound. Without -- I don't think either company has published structures and so it's kind of hard to do comparative analysis, but from what they've presented in the public domain, it does look like it is a potent molecule that inhibits the interaction, and so we take it as significant competition, and we'd like to make sure that we get ahead of them.

Ladies and gentlemen, this now concludes our Q&A portion of the conference. I would now like to turn the call over to Briggs Morrison, Chief Executive Officer, for any closing remarks.

Great. Thanks very much, everybody, for joining the call. And again, I'll remind you we have 3 different presentations at SITC. For those of you who are attending, we'd be delighted to meet and chat with you. Obviously, there've been some questions about the data, and we'll have -- we'll be available to meet and chat with people after all the presentations are completed at the end of the day on Saturday. Thanks again for attending the meeting.

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