Constellation Pharmaceuticals, Inc.
Q4 2020 Earnings Call Transcript

Published: 24 Feb 2021

[Operator:]

Ladies and gentlemen, thank you for standing by. And welcome to the Constellation Pharmaceuticals Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference to your speaker today, Kia Khaleghpour, Vice President of Investor Relations and Communications. Please go ahead ma'am.

[Kia Khaleghpour:]

Thank you operator. Welcome to this conference call to discuss Constellation's fourth quarter 2020 financial results and operational performance. Please turn to Slide 2. Before we begin, I want to point out that our presentation today will include forward-looking statements, which are subject to certain risks and uncertainties. Actual results may differ materially due to various important factors, including those described in the Risk Factors section, as well as discussions of potential risks, uncertainties and other important factors in the company's most recent filings with the Securities and Exchange Commission, including the company's annual Form 10-K for the fourth quarter and year ended December 31, 2020, which we filed earlier this morning. Please turn to Slide 3. And now, I'll turn the call over to Jigar.

[Jigar Raythatha:]

Thank you Kia, and good morning everyone. I'm pleased to announce that several members of our leadership team are joining me on the call today. First, Brendan Delaney, our new Chief Commercial Officer will discuss our vision and positioning of pelabresib. Next, you'll hear from Jeff Humphrey, our Chief Medical Officer; and Patrick Trojer, our Chief Scientific Officer to describe the work that our team is doing to support pelabresib formerly known as CPI-0610 as the backbone of future MF treatment, our progress on CPI-0209, as well as an introduction of our newest development candidate CPI-482. And you'll also hear from Emma Reeve, our Chief Financial Officer, who will review the financials. Please turn to Slide 4. Constellation's vision is to become a leading hematology and oncology commercial and R&D organization. Today we are focused on executing on the pivotal trial that is now underway for pelabresib. Our goal is to transform the standard of care for patients with myelofibrosis and to make pelabresib the backbone of MF therapy. You'll hear more about how we are moving forward towards that vision in the coming months. In addition, we are planning to explore additional indications that we may be able to pursue with pelabresib, such as essential thrombocythemia and others. We believe that a broad development program could position pelabresib as a cornerstone hematology product in the future. We also intend to demonstrate best-in-class potential for CPI-0209, our EZH2 inhibitor, which is currently in the dose escalation portion of a Phase 1/2 study. The lifeblood of Constellation is our discovery platform and all of our product candidates have originated from our internal discovery efforts. Today, Patrick will describe CPI-482 the newest development candidate that we identified.

[Brendan Delaney:]

Thank you for the kind introduction, Jigar. Please turn to slide 7. It is an exciting time to join Constellation. I was attracted to Constellation because of the opportunity to build a commercial organization that has the potential to help advance the treatment of myelofibrosis patients with pelabresib, a product with game-changing potential. Since joining the team in January, I've been very impressed with the talented people who form the fabric of this dynamic company and I look forward to attracting top-tier commercial talent who will only add to the special culture that has been created at Constellation. In my experience, commercial success always starts with a well-differentiated product and I believe that pelabresib has the differentiated profile necessary to become a foundational therapy not only in myelofibrosis, but across hematologic malignancies where BET inhibition may play a role. Within a myelofibrosis landscape that is rapidly evolving, pelabresib is a first-in-class oral BET inhibitor that could provide hematologists with a new mechanism of action and the potential to realize disease-modifying treatment effects beyond symptom control. More importantly, a growing body of data and clinical experience with this product candidate show preliminary evidence of efficacy and tolerability both as a single agent and in combination with other therapies including ruxolitinib. Moving to slide 8. Our recent market research with US hematologists has confirmed the high unmet need that currently exists in the myelofibrosis market. Above and beyond the primary goal of achieving an overall survival benefit, most hematologists surveyed who manage myelofibrosis patient state that the ability to treat with a therapy that is able to modify the underlying disease is the largest unmet medical need in myelofibrosis. Moreover, if disease modification was achievable many hematologists stated that they would consider treating patients earlier in order to normalize bone marrow and prevent cumulative damage that could change the course of disease. Additionally, reduction in transfusion dependence and improvement in anemia are also seen as significant unmet needs.

[Jeff Humphrey:]

Thanks Brendan. Please turn to Slide 11. As a reminder myelofibrosis is a complex disease with four hallmarks. Patients typically present with a large spleen, a high symptom burden progressive anemia and they frequently become transfusion dependent. The disease originates in the bone marrow where abnormal myeloid cells lead to bone marrow fibrosis and reduced hematologic function. As Brendan stated Constellation's goal is to develop pelabresib as a novel therapy for myelofibrosis that affects all four hallmarks and can potentially be a disease modifying therapy.

[Patrick Trojer:]

Thank you, Jeff. As we are moving forward with our Phase III study, we are also working on completing the non-clinical data package to ultimately support marketing applications for pelabresib. For instance, we have now completed all the studies to assess the genotoxic potential of pelabresib. On our last earnings call, we disclosed that one of our preclinical studies provided positive genotoxicity results, while two additional studies did not. We had previously shared these results with the FDA and the line on updating the patient's informed consent form, while continuing our clinical development activities. We also proposed to conduct two additional preclinical studies to reconcile the initial observations and we have now conducted these follow-up studies. The results show that pelabresib has genotoxic potential. Based on our previous discussions with the FDA, we currently do not believe that these findings will impact the development path of pelabresib in myelofibrosis. In the oncology setting, it is not unusual for therapies to have these types of findings. Beyond that, we are making good progress in completing other non-clinical studies needed to support NDA submission. Please turn to slide 14. As Jeff mentioned, our translational data from our recent ASH update are intriguing and we continue to collect additional data from our Phase II MANIFEST study. We plan to provide an expansive update of our translational data midyear, followed by a clinical update by year's end, where we will update on clinical responses and the encouraging depth and durability of response to pelabresib. In our attempt to provide novel therapeutic options for patients with myelofibrosis, we are engaged in exploring additional mechanisms that could help to expand the opportunity. One of these efforts has led us to declare CPI-482, as our next development candidate, for which we are now focused on completing IND-enabling studies. CPI-482 is an internally discovered product candidate that I would like to turn your attention to on slide 15. We're excited about developing CPI-482, a potent and selective inhibitor of the LSD1 demethylase enzyme. LSD1 commonly referred to as an epigenetic eraser, removes modifications from chromatin and thereby functions in the regulation of gene expression. Importantly, LSD1 functions in blood cell development and is required for the maintenance of hematopoietic stem cells, as well as for the proper differentiation of erythroid and megakaryocytic cell lineages. In the context of myelofibrosis, we believe that CPI-482 may interfere with the ability of malignant stem cells to replenish the pool of aberrant blood cells. Moreover, CPI-482 may prevent differentiation of megakaryocytes, a cell population that is a key driver of various disease features of myelofibrosis, including the overproduction of inflammatory cytokines. As shown on the right-hand side, CPI-482 has shown encouraging spleen volume reduction and survival benefit in a post MPN mouse model in which CPI-482 outcompeted ruxolitinib. CPI-482 has a profile different from other LSD1 inhibitors and we believe that our differentiated clinical development strategy is aimed to expand the range of opportunities in myelofibrosis. I would also like to update you on our efforts in developing CPI-0209, our second-generation EZH2 inhibitor for hematologic malignancies in solid tumors. Please turn to slide 16. You will recall that we designed CPI-0209 to improve on first-generation EZH2 inhibitors in a number of ways, including increased potency, long residence time and maintaining exposure levels by not inducing its own metabolism. As discussed on our last earnings call, with that type of profile CPI-0209 may extract the full therapeutic potential of EZH2 biology. Please turn to slide 17. We are currently conducting a Phase I/II study with CPI-0209 for patients with advanced hematologic and solid tumors. We have completed multiple dose cohorts and have seen a dose-dependent increase in exposure with no evidence of induction of compound metabolism. We have also seen dose-dependent increases in target engagement as measured by the assessment of multiple pharmacodynamic markers. Shown here a gene expression profiling data from the blood of patients in the first four dose cohorts, whereby, we compared baseline gene expression with expression of genes at day 22 of the first treatment cycle of once-daily CPI-0209 treatment. The heat map on the left shows EZH2 target gene expression, whereby, low and high expression are indicated by blue and red colors respectively. It is encouraging to see that the magnitude of gene expression increases with increasing doses of CPI-0209. We believe that the performance of CPI-0209 with respect to modulation of pharmacodynamic markers is consistent with our aspirations for a compound with best-in-class potential. Please turn to slide 18. I would like to leave you with a reminder of some of the context that we are interested in for the initial development of CPI-0209. The illustration on the left shows molecular context where genomic aberrations create a functional dependence on EZH2 such as gain of function mutations in EZH2 itself as observed in certain subsets of lymphoma or loss-of-function mutations in chromatin regulatory proteins such as ARID1A or BES-1 as observed in several solid tumor indications. We also continue to be interested in the exploration of prostate cancer as an indication for CPI-0209 based on functional cooperation of our EZH2 inhibitors with AR or the androgen receptor targeted agents in prostate cancer models. After establishing safety and determining RP2D, we plan to move rapidly into the Phase 2 portion of the trial to test CPI-0209's therapeutic effects in this well-defined cancer context. And now I will turn over the call to Emma.

[Emma Reeve:]

Thank you, Patrick, and good morning everybody. Moving on to the financials on slide 19, we had a net loss of $37.4 million, or $0.79 per share in the fourth quarter out of $126.4 million or $2.81 per share for the full year in line with our expectations. Our cash, cash equivalents and marketable securities at year end were $421.4 million, sufficient we believe to fund our operations into mid-2023. We plan to use these resources to fund MANIFEST-2, the Phase 3 clinical trial for pelabresib and to start building the commercial organization needed to launch the product candidate, as well as to explore the utility of pelabresib in other indications. In addition, we have sufficient funds to complete the Phase 1/2 clinical trial for CPI-0209, as well as to progress our discovery and preclinical pipeline of compounds and fund our general corporate operations. Turning to slide 20, to summarize we believe Constellation is well-positioned to execute and maximize the value to patients. We have multiple clinical stage assets including our Phase 3 asset pelabresib. All of our programs are wholly-owned with significant IP protection. The loss of exclusivity for pelabresib extends beyond 2035 and for CPI-0209 beyond 2040. We also believe we have a pipeline opportunity within these product candidates with the potential to expand into multiple indications and we have a robust discovery engine to fuel long-term success of the company. Lastly and importantly, we're well-capitalized, which will allow us to execute on our product development plan. Overall, we're very pleased with the position that we're in. Please turn to slide 21. Our corporate milestones for 2021 are listed here. These include further updates from our Phase 2 clinical trial MANIFEST with a translational update in the midyear timeframe and a clinical update by the end of the year. We also aim to provide an update on the new expansion indications by the end of the year. For CPI-0209, we plan to provide an update from the Phase 1 portion of the study by midyear. As Patrick said, we expect to move into the Phase 2 expansion cohort shortly after determining the dose and expect to provide an update from those cohorts by the end of the year. That concludes our prepared remarks this morning, so I'll turn things back over to the operator. Operator, could you please open the line for questions?

[Operator:]

Our first question comes from the line of Anupam Rama with JPMorgan. Your line is open. Please go ahead.

[Anupam Rama:]

Hi, guys. Thanks so much for taking the question. For 0610 update in additional indications here by the end of the year, is this going to be more of a strategic update or will there be any sort of clinical data involved? What are the indications on the table here? I think you've previously talked about ET. Yes. Thanks so much.

[Jigar Raythatha:]

Hey, Anupam, thanks for your question. It's good to hear you. So, as you know, we're trying to get going in ET and that's an area that we think that there's good rationale for it based on some of what we've seen in the MANIFEST study. And it's possible that, we may have some early data by the end of this year, although, I think the lion's share of the data that would be pivotal trial enabling is more of a 2022 event. And then in terms of additional indications, we're not quite ready to go into the details of them, but I think some of the translational data that we've generated in the MANIFEST study, particularly pointing to the red blood cell biology kind of points in the direction of diseases where anemia is an issue as well as transfusion's an issue. So, more on that as we finalize those plans and get those studies up and running.

[Anupam Rama:]

Thanks so much for taking our question.

[Operator:]

Thank you. And our next question comes from the line of Marc Frahm with Cowen and Company. Your line is open. Please go ahead.

[Marc Frahm:]

Hey, guys. Thanks for taking my question. Maybe just on the confirming, the genotoxicity. Can you remind us of the doses that that was being seen in, in these preclinical assays and how that exposure compares to what you're achieving in patients? And then related to that, do you think it's possible that that genotoxicity is actually feeding some of the efficacy signal that you see given that that is the mechanism of action of some chemotherapies?

[Jigar Raythatha:]

Patrick, do you want to take this one?

[Patrick Trojer:]

Sure. Happy to. So obviously, you're required by carrying out these studies to go to very high concentrations that exceed concentrations that you're using in the clinic. But regardless, whether you see it at a higher dose or at the lower dose, any kind of positivity in these studies is determining a study drug as having genotoxic potential. And we – on the second part, we do not believe that the genotoxicity that we have seen mutes some of the efficacy. Actually, we believe that we are having more a positive impact on red blood cell biology rather than a cytotoxic impact. Does that answer your question?

[Marc Frahm:]

Yeah. That's helpful.

[Jigar Raythatha:]

Maybe, if I can also just jump in. Marc thanks for noting some of the kind of other agents that have genotoxic potential. But I think, it kind of in the context of malignant diseases like this as you noted, several chemotherapeutic agents, cisplatin quite a few dox, these are all positive in these assays. But even more targeted therapies like niraparib and idelalisib, bortezomib even Gleevec, and importantly, even hydroxyurea which is very commonly used in – throughout MPNs and even in benign hemes. And we've also found some non-oncology diseases bupropion and even some triptans for migraine that have these findings. So it's not uncommon to see these types of results in drug development and particularly in malignant diseases.

[Marc Frahm:]

Okay. Great. That is helpful. And then with your guidance to have data from MANIFEST-2 likely by the end of next year is that assuming the resizing mechanism is triggered or is that assuming this trial stays as originally designed?

[Jigar Raythatha:]

Yeah. That -- I'm not sure there's going to be a huge impact either way, if we did decide to upsize it, but the base guidance is based on the currently designed study of 310 patients.

[Jeff Humphrey:]

That's right.

[Marc Frahm:]

Okay. Thank you.

[Operator:]

Thank you. And our next question comes from the line of Srikripa Devarakonda with Truist Securities. Your line is open. Please go ahead.

[Srikripa Devarakonda:]

Thank you so much. Congrats on all the progress last year guys. So these are early stages of enrollment for the Phase 3 trial, but I was wondering if you can tell us a little bit about what you're hearing from your investigators about enrollment. One of -- on your ASH investor call, one of the KOLs had talked about how he has a bolus of patients ready to enroll for the trial. Do you expect this bolus to impact the trajectory of enrollment in any way? Thank you.

[Jigar Raythatha:]

Jeff, did you want to comment on

[Jeff Humphrey:]

Yeah. Thank you for the question. We have -- we're in the early days of opening the MANIFEST-2 trial. Our investigators have shown a lot of enthusiasm and are anxious to get started. We have identified sites that do have these boluses of patients. Enrollment as you know typically is slower in the beginning ramps up and reaches a maximum and I think we'll see that play out with MANIFEST-2. We put in place a medical affairs team to really capitalize on the investigator enthusiasm and identify these sites with patients waiting for treatment. Thank you.

[Srikripa Devarakonda:]

Great. And if I can ask a follow-up. Just curious if the patients you expect to be enrolled for the trial, are these considered at-risk patients? And like how does COVID vaccination play into the trial?

[Jeff Humphrey:]

Yeah, thank you. The average age for myelofibrosis is in the 70s. So it is a population that's at risk. This is the population that's likely to be vaccinated first early in the wave of vaccinations. But how it actually plays out is something that we'll have to follow over time.

[Srikripa Devarakonda:]

Okay. Thank you.

[Operator:]

Thank you. And our next question comes from the line of Mike Ulz with Baird. Your line is open. Please go ahead.

[Mike Ulz:]

Hey, guys. Thanks for taking the question. Just a quick one on pelabresib. You guys mentioned providing some translational update midyear. Just maybe if you can talk about some of the data you plan to share there. And will there be -- should we expect it to be sort of similar to what we've seen previously at ASH or will you have additional endpoints and analyses to sort of share as well? Thanks.

[Jigar Raythatha:]

Mike, thanks for the question. So I think it will be a data heavy kind of translational update at the kind of midyear update picking up on some of the findings. But maybe Patrick, do you want to go into more about kind of how you're anticipating that rolling out and as well as kind of the later year update as well?

[Patrick Trojer:]

Yeah sure. Happy to. So we definitely want to build on what we disclosed at ASH with respect to the bone marrow findings that we reported on and to increase that data set. But we definitely have planned to also report on additional molecular endpoints and how they relate to the DCs and the clinical endpoints.

[Mike Ulz:]

Great. Thank you.

[Operator:]

Thank you. And our next question comes from the line of Do Kim with BMO Capital Markets. Your line is open. Please go ahead.

[Unidentified Analyst:]

Hey, good afternoon, everyone. Thanks for taking the question. This is E.K. on for Do. First one is on pelabresib. In terms of the MANIFEST-2 enrollment, are you guys capturing patients that would essentially fall under that too cytopenic and anemic, the star brooks to kind of help expand that addressable population that Brendan was kind of discussing early on the call? And then my next questions are about the 482.

[Jigar Raythatha:]

Yes. I can take that question. So within MANIFEST, we did have enrollment criteria that permitted anemia and in fact the median hemoglobin for patients enrolled on the MANIFEST study was 9.1. We also permitted patients to enroll with platelet counts to 100 and the criteria for MANIFEST-2 are slightly more liberal than that. So I think the answer to your question is yes, we'll be seeing patients with both anemia and thrombocytopenia that's – I believe that's your question.

[Unidentified Analyst:]

Yes. No you had. I appreciate the clarity. And then for 482, can you kind of discuss a little bit about the actual molecule in terms of if it's an irreversible or reversible inhibitor and potentially what the drawbacks are for either approach. In addition to that, can you potentially contrast your molecule to some of these other LSD1s we've seen in the clinic, more specifically IMAGO, which is going down that clinical development path of MPN with its trials in ET and MF?

[Patrick Trojer:]

Yes, I'm happy to take that one. So, like I said before, I think we have reasons to believe that CPI-482 is different. At this point, we haven't disclosed really the properties of the compound or our clinical development strategy. We plan on doing this at one point down the road. We are definitely aware of other LSD1 inhibitors in the clinic and we're intrigued by the clinical data and the clinical benefit that was shown and that helps us to inform our development path. I think, we our group, we have repeatedly shown that with our work on the BET inhibitor and the EZH2 inhibitors, we are able to deliver best-in-class molecules with a differentiated development path in a highly competitive environment. And we hope that this could be the same here for CPI-482 and LSD1.

[Unidentified Analyst:]

Okay. Sounds good. I'm looking forward to that additional information in the future. Thank you.

[Patrick Trojer:]

Welcome.

[Operator:]

And our next question comes from the line of Jay Olson with Oppenheimer. Your line is open. Please go ahead.

[Jay Olson:]

Hey, thanks for taking the question. Could you maybe talk a little more about how you intend to prove disease modification for pelabresib? And do you ultimately expect to have a disease-modifying claim in the FDA-approved label for pelabresib? Thank you.

[Jigar Raythatha:]

Patrick, do you want to take that one and then maybe Jeff, you can tag on?

[Patrick Trojer:]

Yes. So obviously, what you have seen at the ASH conference, we have disclosed some really intriguing observations in the bone marrow of the patients treated for about 24 weeks with pelabresib, either alone or in combination with ruxolitinib. So I think this is an evolving data set. We definitely want to put ourselves in contention to be able to capitalize on, improving bone marrow topography and function. But it's too early for us to kind of delineate, how that would impact our regulatory strategy.

[Jigar Raythatha:]

Yeah. But maybe just to, kind of add on, I think the effects that we see and kind of again what we hear from physicians is that that bone marrow result is really exciting. So similar to in a solid tumor, when you can tell a patient that their tumor is shrinking, if you can tell a patient who has diseased bone marrow that it's healing, that's potentially very powerful. And then, when you can connect the dots between that and some of the clinical findings like, hemoglobin increases, that starts to kind of form the picture for how you can start to message around disease modification. And that's really a lot of what we plan to be able to do with the data that we are continuing to mine from the MANIFEST study. And importantly Jay, as you kind of asked how do we, think about that MANIFEST-2 that could potentially lead to kind of regulatory discussion. So, it's a little early for us to kind of comment on that in totality. But certainly, part of what we intend to do as the registration strategy unfolds.

[Jeff Humphrey:]

Yeah, if I could add just, …

[Jay Olson:]

It's very helpful.

[Jeff Humphrey:]

Yeah, if I could add just, briefly that bone marrow fibrosis is an independent predictor of overall survival, independent even of the IPS or DIPS risk classification. But -- and we have seen this reduction in bone marrow fibrosis at six months which is important. And beyond that we've also seen the effects on megakaryocyte histotopography and changes in red cell precursor that we also feel represents a drug impact on the cell of origin for this disease. So that really does give us reason to believe this could be disease modifying. Thanks.

[Jay Olson:]

Thank you.

[Operator:]

Thank you. And I'm showing no further questions at this time. And I would like to turn the conference back over to Jigar, for any further remarks.

[Jigar Raythatha:]

Well, thank you so much to all of our investors, who took the time to dial in and listen here. We really appreciated giving you the update on our 2020, which was a very transformational year for us. And we look forward to continuing to execute in 2021. And deliver on what we think could be a potential game-changing therapy in pelabresib. And also the unfolding pipeline, which provides multiple opportunities for us to deliver novel treatments to patients. So thanks everyone again. And talk to you all soon.

[Operator:]

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