Syros Pharmaceuticals Inc (SYRS) 2021 Q2 法說會逐字稿

Good morning, and welcome to Syros Pharmaceuticals' Second Quarter 2021 Financial Results Conference Call. (Operator Instructions) This call is being webcast live on the Investors and Media section of Syros website at www.syros.com. Please be advised that today's call is being recorded. Following the formal remarks, we will open up the call for your questions.

At this time, I would like to turn the call over to Naomi Aoki, Vice President of Corporate Communications and Investor Relations at Syros.

Thank you. This morning, we issued a press release with our second quarter 2021 financial results, along with anticipated future milestones and recent accomplishments. This release is available on the Investors and Media section of Syros' website at www.syros.com.

We will begin the call with prepared remarks by Dr. Nancy Simonian, our Chief Executive Officer; Dr. David Roth, our Chief Medical Officer; Gerald Quirk, our Chief Operations Officer. We'll then open the call for questions. Dr. Eric Olson, our Chief Scientific Officer; and Kristin Stephens, our Chief Development Officer, are also on the call and will be available for Q&A.

Before we begin, I would like to remind everyone that statements we make on this conference call will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our annual report on Form 10-K, our quarterly report on Form 10-Q that we filed this morning and any other filings that we may make with the SEC in the future. In particular, the extent to which the COVID-19 outbreak continues to impact our operations and those of the third parties on which we are live will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

Any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements.

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

Thank you, Naomi. The first half of 2021 was very productive for Syros, and I am pleased to provide an update on our recent progress. As we outlined at the end of last year, we are focused on 3 strategic priorities: first, we are advancing a growing portfolio of targeted therapies for hematologic disorders, each with the potential to set a new standard of care; second, we are building on our leadership in selective CDK inhibition for difficult-to-treat cancers; and third, we are continuing to leverage our gene control discovery engine to fuel a robust and sustainable pipeline. Together, we believe these efforts will enable us to build Syros into a fully integrated company with medicines that provide profound benefits for people with cancer and monogenic diseases.

In the second quarter, we made great strides across all our clinical stage programs.

Starting with SY-5609. As we announced this morning, we have entered into an agreement with Roche to evaluate 5609 in combination with atezolizumab, a PD-L1 inhibitor in patients with colorectal cancer. We are very excited to work with Roche to explore this novel combination. There is strong preclinical and mechanistic rationale for combining 5609 with a PD-L1 inhibitor, which David will discuss later in the call. Notably, this marks the first clinical investigation of a selective CDK7 inhibitor with immunotherapy, potentially paving the way for additional combination strategies for 5609 with immunotherapy.

We also announced this morning that data from the dose escalation portion of our Phase I study of 5609 will be highlighted in an oral presentation at the ESMO Congress in September. We remain on track to move into the expansion portion of the Phase I trial in the second half of the year. And at the time of the data readout, we plan to further detail our next steps for advancing the development of 5609 to further explore its potential as a transformative targeted approach for difficult-to-treat cancers.

Turning now to our targeted hematology portfolio. We continue to make progress in SELECT-MDS-1, our Phase III clinical trial of tamibarotene, formerly known as SY-1425, in combination with azacitidine in RARA-positive higher-risk MDS patients. We are also on track to initiate both SELECT-AML-1, our randomized Phase II trial of tamibarotene plus venetoclax and azacitidine, as well as our dose confirmation study of SY-2101 in APL this year. Together, these programs put us on track for 2 potential NDAs in 2024, for tamibarotene in MDS, and for 2101 in APL.

Our recent 3-part KOL webinar series highlighted the opportunities for tamibarotene and 2101 to set new standards of care in MDS, AML and APL, further defining the value proposition for these programs. These 3 webinars featured key opinion leaders who are intimately involved in the treatment of people living with MDS, AML and APL. These were incredibly impactful events for us at Syros. Each physician articulated a tremendous gap in the treatment landscape, highlighting the urgent demand for new therapies that can provide patients with better clinical outcomes or in the case of APL, a dramatically reduced treatment burden. The KOLs describe the potential of tamibarotene and 2101 to address these needs and also shared their views on how tamibarotene and 2101 are distinguished within the current treatment and development landscape.

Beginning with our MDS focused event in May. Dr. Amy DeZern of Johns Hopkins provided an overview of the higher-risk MDS landscape, underscoring the need for tolerable therapies that can improve outcomes while offering quality of life. HMAs, including azacitidine are the current standard of care and offer limited efficacy. Prognosis after HMA failure is very poor. Moreover, most higher-risk MDS patients are elderly and either can't or don't want to undergo the intensive chemotherapy necessary to bridge to a potentially curative bone marrow transplant.

Dr. DeZern highlighted one of the major challenges in MDS drug development. MDS often presents as a polyclonal disease, making it difficult to treat with therapies that target individual genetic mutations. In her view, a combination of factors distinguishes tamibarotene in the current landscape. The fact that it targets a biologic process fundamental to the differentiation of blood cells as opposed to targeting a single genetic mutation; the ability to select for patients most likely to respond; the high complete response rates in AML, which have a reasonable likelihood of translating to higher risk MDS; and a favorable tolerability profile that does not exacerbate neutropenia and other complications when combined with azacitidine.

Turning now to our AML focused event. In June, we were joined by Dr. Daniel Pollyea of the University of Colorado. Dr. Pollyea's presentation focused on the unmet need in AML and the paucity of options available to put people in long-term remission. While ven/aza has emerged as a tremendous option for many patients, 1/3 of newly diagnosed unfit AML patients don't respond and many more relapsed, leaving them with poor options.

Dr. Pollyea explained that these nonresponders tend to be patients with monocytic disease. As we presented at ASH, our translational data suggest that the RARA biomarker enriches for the monocytic disease phenotype associated with venetoclax resistance. Simply put, by selecting for RARA, we believe we may be enriching for the very patients who are in the greatest need for new treatment options.

Dr. Pollyea also highlighted the characteristics of an optimal AML therapy, an oral medicine that will allow us for deep durable remissions with minimal or manageable toxicities and that has rapid impact on disease progression where you can tell quickly if the therapy is working.

Based on our data to date, we believe tamibarotene may offer this product profile. In our Phase II trial, tamibarotene plus aza delivered high CR rates with a rapid onset of action, meaningful durability and a good tolerability profile in RARA-positive newly diagnosed unfit AML. This gives us confidence in our triplet strategy with tamibarotene plus ven/aza.

Like MDS, AML can be a polyclonal disease. By employing the triplet combination upfront, we hope to achieve high initial response rates while reducing the emergence of resistant disease by simultaneously targeting both monocytic and non-monocytic leukemia cells that may be present at diagnosis and lead to a short duration of response and relapse. We look forward to beginning to enroll patients in the SELECT-AML-1 trial later this year.

Our final KOL webinar on APL was just a few weeks ago. APL is a clinically distinct form of AML defined by a RARA gene fusion. We were joined by Dr. Farhad Ravandi-Kashani of MD Anderson Cancer Center, who highlighted how an oral therapy would represent a major advance for patients. While IV ATO plus ATRA, the current standard of care is curative in greater than 80% of patients, it comes with an enormously heavy treatment burden. The regimen involves up to 140 lengthy infusions over nearly a year. 2101, a novel oral form of ATO, has the potential to deliver comparable efficacy while dramatically reducing the treatment burden. We plan to initiate our dose confirmation study this year with a Phase III trial to follow in 2022.

If you are interested in hearing more, a full audio replay of each of these events as well as the accompanying slide presentation is available on our website.

With that, I'd like to turn the call over to David.

Thank you, Nancy. Given the proximity to the data readout for our Phase I dose escalation study, I will focus my comments today on SY-5609 and review the details of our study.

As you've heard us describe before, 5609 is a novel targeted approach that we believe holds great promise for difficult-to-treat cancers. 5609 disrupts 2 important processes that cancer cells use to survive and thrive, transcription and uncontrolled cell cycle progression. Inhibiting CDK7 leads to reductions in cancer driving transcription factors and anti-apoptotic proteins and disrupts critical nodes in the cell cycle attacking cancer in multiple ways and at multiple points.

As part of the dose escalation, we are exploring 5609 in breast, colorectal, lung, ovarian and pancreatic cancer patients, as well as in patients with tumors of other histologies with RB pathway alterations. We chose these specific tumor types because of the strong preclinical data, high unmet need and mechanistic rationale based on either a high prevalence of RB pathway alterations or known transcriptional and cell cycle dependencies.

In keeping with our development philosophy of exploring both single agent and combination strategies early in development, the dose escalation was designed to assess 5609 as a single agent as well as in combination with fulvestrant in HR-positive breast cancer, a combination that we could explore in parallel with the single-agent cohorts. We began enrollment in the dose escalation in January of 2020, and we shared encouraging early data from the dose escalation at the EORTC-NCI-AACR meeting last October. Importantly, those data demonstrated proof of mechanism at tolerable doses and pharmacodynamic activity at levels consistent with antitumor activity in our preclinical models.

At the time, we had established the MTD for continuous daily dosing and had opened cohorts to begin exploring ultimate doses and schedules with the aim of identifying the optimal dose and schedule to take forward into expansion, one that would allow us to deliver 5609 at a dose and schedule that would be tolerated over prolonged periods of time and that could also position us for various additional combination strategies.

At ESMO, we will share a more robust data set from the ongoing dose escalation. This update will include safety, tolerability and initial clinical activity data from patients treated at a range of doses on multiple different intermittent schedules. In addition, we will present 2 preclinical abstracts that complement this clinical readout: one, evaluating antitumor and pharmacodynamic activity of intermittent dosing regimens with 5609 in ovarian cancer models; and one evaluating 5609 and as a single agent and in combination with chemotherapies in models of KRAS mutant cancers.

As we announced in our press release this morning, due to changes in the development landscape with the emergence of oral selective estrogen receptor degraders or SERD therapies, we are no longer exploring the combination with fulvestrant in HR-positive breast cancer patients in our trial. Oral SERDs are expected to become the standard of care in this patient population, making the development path for a combination with fulvestrant less clear. As a result, we prioritized our efforts on the other cohorts in the dose escalation. 5609 has shown preclinical synergy with an oral SERD in HR-positive breast cancer cells, and we continue to believe it has potential in HR-positive breast cancer.

We believe that combination strategies remain key to unlocking the true power of any therapy in cancer. To that end, we are excited to discuss the agreement with Roche to explore 5609 in combination with its PD-L1 inhibitor. Under the terms of this agreement, we will supply 5609 for a combination dosing cohort in Roche's ongoing intrinsic trial, a Phase Ib study evaluating multiple targeted therapies and immunotherapies as single agents or in rational combinations in molecularly defined subsets of colorectal cancer. The cohort evaluating 5609 in combination with atezolizumab is in patients with BRAF-mutant colorectal cancer. We believe there is a strong mechanistic rationale and translational data to support this approach.

Preclinical data show that CDK7 inhibition induces DNA replication stress and genome instability in cancer cells, triggering immune response signals. In animal models, CDK7 inhibition enhances tumor response to anti-PD-1 immunotherapy, prolonging overall survival and increasing immune cell infiltrates. Additionally, our preclinical data shows that 5609 inhibits tumor growth at well-tolerated doses in colorectal cancer models with deeper responses observed more frequently in models with BRAF mutations relative to wild type. We look forward to working with Roche to evaluate the potential of this novel combination.

In parallel, we remain on track to advance 5609 into the expansion portion of the Phase I trial later this year and we look forward to sharing more details on our next steps for 5609 at the time of our data disclosure in September.

With that, let me turn the call over to Gerald to review our second quarter financial results.

Thanks, David. We continue to operate from a position of financial strength. We ended the second quarter with $195.3 million in cash, cash equivalents and marketable securities compared to $174 million as of December 31, 2020. This increase reflects the $75.6 million in gross proceeds from our January 2021 public offering, partially offset by cash used to fund our operations in the first half of 2021. Based on our current plans, we believe we have sufficient capital to fund our planned operating expenses and capital needs into 2023 beyond anticipated data readouts for each of our clinical stage programs.

We recognized revenue of $5.2 million in the second quarter compared to $3.2 million in the second quarter of 2020. This consisted of $3.3 million in revenue under our collaboration with Global Blood Therapeutics and $1.9 million under our collaboration with Incyte. In the second quarter of 2020, we recognized $2.5 million in revenue from our collaboration with GBT and $0.7 million from our collaboration with Incyte.

R&D expenses were $25.8 million in the second quarter of 2021 compared to $14.8 million for the same period in 2020. This increase was primarily due to the advancement of our 3 clinical programs as well as increases in employee-related expenses.

G&A expenses were $5.5 million in the second quarter of 2021 compared to $5.1 million for the same period in 2020. This increase was primarily due to employee-related expenses.

Finally, we reported net loss for the second quarter of $22.5 million or $0.36 per share compared to a net loss of $17.2 million or $0.38 per share for the same period in 2020.

With that, I'll turn the call over to the operator for questions. Thank you.

(Operator Instructions) Our first question comes from Ted Tenthoff with Piper Sandler.

Congrats on the update. I'm excited to hear a little bit more about the Roche collaboration. Can you tell us a little bit more in this potential to ultimately evaluate 5609 beyond colorectal?

Thanks, Ted, for the question. David, do you want to take that?

Sure. Yes. Thanks, Ted. So we're very excited about the potential for SY-5609. And clearly, we've attracted the interest of Roche, who sees the potential not only for advancing this in colorectal patients, but also to advance their immunotherapy and broaden the opportunities that they currently have for atezolizumab. So we see that as a great foundation for moving forward. We also look to our own data where we've been making great progress in our ongoing study. And since the ENA presentation from last fall, we're looking forward to providing updates. And this September at ESMO, we'll be focusing, as we've previously stated, on the safety and tolerability but also on clinical activity.

Obviously, since that time, which dated back to data through last August, we've made progress. So you can expect a more robust data set, which will give us insights into where we may be going. And we'll provide that information to you at that point.

Awesome. Excited to hear more about it and looking forward to progress on the rest of the program, too.

Our next question comes from Phil Nadeau with Cowen.

As we get ready for ESMO, I think the key question on 5609 that people are grappling with is what is the therapeutic window, kind of what's the safety profile and are there signs of efficacy. It sounds like you're going to be providing data across a wide range of tumor types and a wide range of dosing paradigms at the meeting. So I guess how would you suggest that we prepare for that ESMO data? And how will you yourselves evaluate whether there's a therapeutic window for 5609? And therefore, how would you suggest we kind of frame that data as we look at it?

Sure. So again, thanks for that question. I think it's really important to look at the totality of the day that we're going to be presenting. And I just shared with Ted, we've made a lot of progress since our last data update having obviously treated more patients than at the prior presentation.

And so we're going to have a broad data set. We, at the time of the ENA meeting had really been excited to share with you that we achieved proof of mechanism. And so that we were achieving that at doses that were tolerable. I think that at this time, we're going to be looking at parameters that -- and you should help -- to help you frame your way in which you are looking at our data, can we identify a dosing regimen that we can take forward based on the totality of our safety and tolerability?

Also, are we seeing signs of biological activity? Are there early signals of clinical activity at those doses and at that regimen? And then more importantly, what about the specific patients who have been treated? How -- what are they doing prior to coming on to our study? What were the responses like and how long they were lasting versus what they may be experiencing on our trial? And if you can answer yes to those types of questions, we would share with you great enthusiasm about this.

And I also think that it's important to appreciate how the plan's moving forward related to the type of activity we might see, would be interpreted in that broader context. So I just -- I think that it should be a very interesting presentation, and I hope you're looking forward to it.

That's very helpful. Then second question is, as we think about what could happen next, I guess, your corporate presentation says expansion cohorts as a single agent and combination therapy. So it sounds like the range of --- well, you could do ENA first, next or new tumor types or tumor types that you're going to move into as a single agent and then perhaps other combination regimens, anything else I'm missing? Any other potential avenues for further development of 5609?

Well, no, look, I think that it's really important to appreciate, and I believe you do appreciate how in oncology, drugs are often initially tested in a single-agent context. And even when they work well in that context, they're often used in various combinations. And so we acknowledge this at the outset and set the stage for this program at this early point in time to give us opportunities to move forward in various ways. And that was really the critically important reason for looking at alternate schedules that may afford us different doses so that we can take this and unlock the power of this drug in a fit-for-purpose approach.

I do want to share with you an important experience I have in my past professional life when leading the early clinical development of palbociclib, a CDK4/6 inhibitor which at that early stage in its development, parallel to where we may be at this point with our CDK7 inhibitor, had nominal single-agent activity. But based on preclinical evidence and some early signals, it was clear that to truly unlock the power of that drug, a combination with aromatase inhibitor was required, and we all know the successful outcome of that strategy. So anticipating that we may need in many ways in which to maneuver, we've really focused on setting the stage for a robust future approach.

Congrats on the progress.

Thanks, Phil.

Our next question comes from Jason Butler with JMP Securities.

I guess, somewhat of a follow-up on the next steps for 5609. What have been the factors that contributed to your prioritization for the different expansion cohorts that we'll learn about? Is it potential for benefit, unmet need? Obviously, combination strategies have played in. Just if you can help us think a little bit more through how you prioritize, where to invest?

Jason, I'll take that question. One of the, really, the beauties, I'd say, of the 5609 approach is that we know it can work. We believe it can work in many difficult-to-treat cancers just based on the target and the mechanism. And so when we think a little bit about the priorities for what we would do moving forward, we think about several things. We think about preclinical data, the mechanistic rationale, translational data. We think about the clinical data that's emerging from the dose escalation, the safety and tolerability profile.

And then very importantly, we think about unmet medical need, what does the development path look like? What's the competitive intensity, where do we think -- there's a very big unmet medical need that we could potentially serve with this. So it's kind of a combination of all of those factors that go into our decision around what to proceed with. Obviously, beyond what we're doing with Roche with immunotherapy in the expansion portion.

Great. And then in terms of the PD-L1 combo, can you maybe just put into context for us your previous -- your focus on the -- or what you've learned about the drug and RB pathway alterations -- in terms of RB pathway alterations and put that in context of now looking in BRAF mutations?

Yes. Thanks for the question, Jason. We've seen CDK7 inhibition have effects, as you know, both in transcription, but also in sales cycle. And as you mentioned, RB pathway is a critical player in the sales cycle. So -- but what's been published is that when you inhibit CDK7, most likely due to that effect in the cell cycle, you induce a replication stress. And that stress can result in the formation of signals that induce the innate immune signaling.

And in published data, it was shown that, that helps a PD-1 inhibitor in a mouse model. So that was really the basis of kind of this immune signaling upon CDK7 inhibition. And of course, as you know, that colorectal cancer is a place where there's genome instability and there's immune signaling and immune therapies have been shown to have some benefit there. So combined with our -- with really the strong activity of 5609 and BRAF tumors, xenografts that we showed at ASCO last year. Basically, all those things combined, kind of the cell cycle interruption, innate signaling and the activity in the BRAF CRC really make us excited about that combination.

(Operator Instructions) Our next question comes from Mark Breidenbach with Oppenheimer.

I'm just wondering if the collaboration with Roche will have any immediate impact on your planned expansion cohorts for 5609, especially in colorectal cancer. And I'm not sure if you'll be able to answer this or not, but David, I'm wondering if you can point to any clinical precedents where a CDK inhibitor, maybe a CDK4/6 or other, has shown synergy with a PDX1 or PD-L1 checkpoint inhibitor?

Sure. So I think the excitement we have for colorectal cancer, we initially shared that with you last year after ASCO when we had a preclinical presentation showing the range of activity that we saw. And you may remember that we had about 2/3 -- we did, I think, 30 PDXs and 2/3 of those had tumor growth inhibition greater than 50% with about 1/4 having complete regressions or 90% or greater. And the majority of BRAFs were -- BRAF-mutant colorectal cancers were responding relative to those without. And so we were -- we really were excited about that opportunity, and that contributed to our inclusion of those patients in our current study.

So we're very excited about this. It's really a difficult patient population. And the application of a successful checkpoint inhibitor like atezolizumab to our go-forward plan in colorectal is very exciting given the unmet need and the opportunity to address that.

With respect to the underlying mechanism, the -- there has been published data that supports inhibition with CDK7 can lead to DNA damage and replication stress that can induce an immune reaction. There can be associated immune cell infiltrates into the tumors that are exposed to CDK7. And we think that's a clear setup for amplifying the attack with an anti-PD-L1 antibody. So I think it all really makes great sense.

There has been prior work done with CDKs, CDK4/6 in particular, palbociclib and others have been combined with immunotherapies. And the data on those in certain circumstances can support I/O combinations. We think that our unique mechanism, which also involves anti-transcriptional effects with a CDK7 may really potentiate that combination strategy.

Obviously, we attracted Roche to bring our program forward with them. And I think they have a shared view of this opportunity along with us. And so we're really excited and we're happy that it's piqued your interest as well.

Okay. Great. And can you just give us a ballpark number of patients that we should expect in the ESMO update, if you can?

Yes. So at the time we presented at the ENA meeting, which was a year ago, we had enrolled a total of 17 patients. If I recall, 14 were included in the single agent component. So that data cut was back in August of 2020. Here we are about a year later, and obviously, we've made great progress with the trial. There will be certainly a larger number of patients. We haven't specified the details of the actual presentation just yet in terms of patient numbers and things of that nature. But suffice it to say, it will be a more robust data set.

We'll have another focus on safety and tolerability, which is very important. And we also will have more information on various intermittent dosing regimens like the 5-day on/2-day off regimen or the 7-day on/7-day off regimen, which were in progress at the time of the past ENA presentation. So I think it should be very helpful. And of course, clinical activity that we may have seen. And all of this will help us explain our go-forward plan that we're planning to share with you at around the time of the data release.

Our next question comes from Zegbeh Jallah with ROTH Capital Partners.

Just wanted to get a little bit more clarity on the deal with Roche. I think the first one for me is just how much control or how involved are you going to be with the study that they will be running?

Go ahead, David.

Yes, sure. So in terms of the control, so this is the intrinsic trial, and this is their Phase Ib study. Under the agreement, we're going to be providing them with drug. We'll have -- we're obviously collaborating in the development of the study design itself and we'll have access to the information as well as retaining all rights to 5609. But they'll be executing the study and supporting the cost of the actual program itself.

And then does Roche have right of first refusal if you were ever to pursue a combination with an I/O agent in this setting?

Zegbeh, this is Gerald. So we retain all rights to 5609. So we have access to the data and control over 5609. So nothing further than that.

Perfect. And then the last one, just kind of on this, and I think a follow-up to some of the questions that have already been asked. Just wondering, are there any restrictions in terms of where else you kind of go with this program, with this molecule?

No, this is limited to the study, and we have complete freedom to operate to be able to pursue 5609 on our own or with anybody else.

One last one on this one. In terms of decision-making about what is needed to kind of move this program to the next step. Are you guys aligned in terms of what you need to have to move forward? Or is it solely a decision that Roche will be making?

Could you please repeat that? You broke up a bit when I was listening.

Sure. Yes. I was just wondering in terms of what you need to hit to kind of move this program forward. Is it a joint decision? Or is it solely based on Roche in terms of what they want to see to kind of move this to the next step?

So obviously, the protocol has been collaboratively designed. We have mutual input and interest in seeing the future success. We haven't really shared the specific details on some of those technical parameters or future business decisions around the next steps at this time.

Well, very exciting. I know, I've been quite excited about this program. So I think this partnership certainly gives us a lot more visibility.

Thank you, Zegbeh. We too are very, very excited about this opportunity.

And I'm not showing any further questions at this time. I would now like to turn the call back over to Nancy Simonian for any further remarks.

Thank you, operator, and thank you, everyone, for joining us this morning. As always, we are appreciative of your support and look forward to updating you again soon as we continue to execute against our 3 strategic priorities and build Syros into a fully integrated biopharmaceutical company with a deep portfolio of targeted medicines that set new standards of care in cancer and monogenic diseases. Thank you.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.