Epizyme, Inc.
Q3 2018 Earnings Call Transcript

Published: 16 Nov 2018

[Operator:]

Hello and welcome to Epizyme's conference call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session after the prepared remarks. Please be advised that this call is being recorded at Epizyme's request. I'd now like to turn the call over to Alicia Davis. You may begin.

[Alicia Davis:]

Thank you and good morning, everyone. On the call with me today is our CEO, Rob Bazemore; Chief Medical Officer, Shefali Agarwal; and Matt Ross, Chief Strategy and Business Officer will join us for the Q&A session. Today's discussion will include forward-looking statements related to Epizyme's current plans and expectations, which are subject to certain risks and uncertainties. Actual results may differ materially due to various important factors, including those described in the Risk Factor section of our most recent Form 10-Q and other SEC filings. These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to publicly update these statements. Now, let me turn the call over to Rob. Rob?

[Rob Bazemore:]

Thank you, Alicia and good morning everyone. All Epizyme, we've made great progress toward achieving our mission of rewriting the treatment of cancer and other serious diseases through the development of novel epigenetic medicines. We are pioneers in this area exemplified by our progress Tazemetostat, our first in class oral EZH2 inhibitor and by our most recent announcement of a research agreement with Boehringer Ingelheim or BI for the development of early stage programs discovered by Epizyme. To-date we have discovered four novel clinical stage epigenetic therapies two of which were brought to the clinic by Epizyme. And as we announced this morning, we're pleased to have established a collaboration with BI. This adds to our roster of productive partnerships that enable us to advance the development of important new treatments for patients, while also focusing our resources on executing our Tazemetostat development program. Since our founding, we have built a strong history of partnerships in the epigenetic space including a collaboration with GlaxoSmithKline for the novel PRMT1 and PRMT5 inhibitors that were discovered internally by Epizyme. Our unique scientific capabilities and insights led us to discoveries beyond histone methyltransferase into new epigenetic target classes including HAT and HeLa cases. In collaboration with BI, we're delighted that two novel small molecule targets will be developed within these important new epigenetic families, further validating the value of epigenetic targets in oncology and our leadership in this field with the aim of bringing important new therapies to patients. This collaboration combines our innovative targeted identification and research capabilities with BI's world-class drug development and commercialization expertise allowing the advancement of potentially transformative programs for patients while sharing the cost of research and clinical development. We will share with BI, the research, development and U.S. commercialization of the HeLa case program. For the HAT program, we will support research with BI having responsibility for global development and commercialization. As part of this agreement, we received an upfront payment of $15 million with an additional $5 million in research funding. We're also eligible to receive more than $280 million in research, development, regulatory and commercial milestones as BI advances these programs as well as tiered royalties on global commercial sales. Importantly in addition to the added financial clinical and commercial capabilities that this deal provides, this collaboration allows us to focus more of our efforts and resources on the most significant value driver for the company today. Tazemetostat. Tazemetostat represents a pipeline and a product opportunity and maximizing its potential is our number one goal. So far, we have identified two near-term opportunities for accelerated approval submission pass for Tazemetostat, one in epithelioid sarcoma or ES and one in follicular lymphoma or FL. As we stated before FL is a difficult to treat cancer and patients need new, safe and effective treatment options. Tazemetostat has demonstrated durable objective responses in patients who have experienced two or more prior lines of systemic therapy including those with EZH2 activating mutations and in patients with wild-type EZH2. In addition, the favorable tolerability has allowed patients to remain on treatment for extended periods which is important for the treatment of indolent diseases like FL. We are highly encouraged by these data and we believe that Tazemetostat can play an important role in this large patient population. We have submitted our revised protocols to all U.S. sites after the partial clinical hold was resolved with the FDA in September. Some sites have already been successful in gaining IRB approvals and they are now open for screening new patients. In countries not affected by the partial clinical hold, investigators remain committed and continued enrolling patients into the trial. This has allowed us to remain on track with our previous guidance that we expect to complete enrollment in our Phase 2 trial by the end of this year. This sets us up well to engage with FDA to refine our registration strategy in FL and we look forward to providing clarity on our registration approach in early 2019. The most near-term opportunity for Tazemetostat approval though is in epithelioid sarcoma an ultra-rare and very aggressive disease for which there are currently no treatments specifically indicated. Updated interim data from the EZ cohort of our Phase 2 study were recently reported at ESMO, demonstrating durable objective responses and encouraging overall survival in both treatment naïve and previously treated patients. The response to these results among the physicians and the key opinion leaders who treat these patients has been very favorable. Based on the strength of these data, we remain confident in our planned NDA submission in the first half of 2019. Achieving this first indication is strategically important for Epizyme. If successful, approval would help build a strong value proposition for Tazemetostat. Marketing authorization in ES would enable the first commercial use by physicians making it the only commercially available easy EZH2 inhibitor. It would provide the opportunity to bring Tazemetostat to a patient population with significant unmet need. It would enhance efficiencies in subsequent filings like the one planned for SL as many of the modules would be the same and already reviewed. This would allow for these subsequent filings to potentially be supplemental NDAs instead of full NDAs. And it would provide positive value for the company. Under the granted Fast Track designation for ES, we have the opportunity for more frequent engagement with the FDA as we prepare the NDA and work towards submission. All of the data required for that submission have been collected and preparation of the NDA modules is well underway and on track for submission in the first half of 2019. In parallel to our NDA efforts, we are conducting appropriate pre-commercial activities and beginning to build our go-to-market strategy to support the launch of Tazemetostat in the U.S. once approved. Looking beyond the U.S., we intend to explore potential partnerships to commercialize Tazemetostat in other geographies. We look forward to providing further details on our commercial strategy as we approach our NDA submission. As I look across the totality of what we've accomplished given an unexpected partial clinical hold this year that we successfully resolved, I'm proud of our team's efforts in getting us to this point which will ultimately lead to our ability to bring new treatments to patients. Following the execution of a meaningful collaboration with BI and with their added support, we are able to strengthen our focus on advancing Tazemetostat in achieving a number of pivotal milestones coming into 2019. We're nearing the completion of enrollment in our FL Phase 2 study and refining our registration strategy with FDA based on these data to bring forward this important program as quickly as we can. We are well on our way to our first NDA submission for Tazemetostat in ES with confidence based on data from our fully enrolled cohort. We're collaborating with our study investigators as well as other epigenetic and oncology leaders to evaluate the potential next indications and combinations for Tazemetostat expanding its potential to reach even more patients in need of safe and effective therapies. We look forward to providing further insights into these extended development plan efforts early next year. And we are advancing our next development candidate, a novel G9a inhibitor towards the clinic for sickle cell disease another indication with a significant need for disease modifying drug. The next 12 months are said to be a transformational period for Epizyme to execute on all of our goals, it's important that we be focused and that our team is aligned on the core drivers for both our science and our value. I stand confident that we have the right team and resources in place to drive execution. Our goal is to make a meaningful difference in the lives of people with cancer and I believe we are well on our way to achieving that mission. With that, we'd be happy to take your questions. Operator?

[Operator:]

Thank you. [Operator Instructions] Our first question comes from Michael Yee with Jefferies. Your line is now open.

[Unidentified Analyst:]

Yes. Thank you. Congrats on the collaboration. This is [indiscernible] on behalf of Michael Yee. Good morning. Just a few questions on our end. We were wondering if you could provide a little bit more color on what are the stages of development for each program. Are we talking about candidate selection IND-enabling work? And I guess also what are the next milestones for each target program. My second question is, could you walk us through some of the evidence for targeting these enzymes for lung cancer and other small -- other tumors. Is it internally developed research or are we talking about academic and that's all.

[Rob Bazemore:]

Certainly. So we're not for competitive reasons the targets that we are talking about aren't being disclosed at this time. We think that they have exciting potential in a number of different tumor types. These are all headed towards development candidate status and since Boehringer Ingelheim will ultimately have responsibility for the clinical development of these molecules once they move into the clinic. We'll defer until that moment until we give more details on that element of the transitions of the programs. In terms of the rationale for the use of HATs or HeLa cases are investigating and these are all internally discovered programs these don't come from academically published information. This is all internal work that we've done. The family of HATs includes over 18 enzymes that add [indiscernible] groups to proteins including histones, chelation along with other modifications like methylation and phosphorylation affect how histones interact with DNA and these changes in the structural support provided to chromosomes influence gene expression. These changes in histones including disregulation to chelation have been associated with multiple types of cancers including lung cancer and other solid tumor cancers. So there is rationale that we developed internally that we believe that they play an important role in certain types of cancers in the work that we've done have identified targets that we think are specifically involved and have patient biomarkers, so that they can be targeted to specific types of patients.

[Unidentified Analyst:]

Thank you for the color.

[Operator:]

Thank you. And our next question comes from David Lebovitz with Morgan Stanley. Your line is now open.

[Unidentified Analyst:]

This is [indiscernible] on for David. Thank you for walking through all of the milestones that you guys have coming up. My questions actually also on the collaboration could you run us through prior failures for HAT and HeLa case and what differs in your approach to make these targets now potentially drugable versus prior year?

[Rob Bazemore:]

So I don't want to speak for prior programs, I can just say that these have been programs they are highly targets of high interest that they've been thought to be undrugable before. This is the first to my knowledge, the first collaboration on a HeLa case program being moved to this stage of development. I know that there's previous work that has been done on at least one HAT inhibitor that has not been successful in moving towards the clinic. But beyond that, I wouldn't want to speak to it. We're very excited about these programs. We're excited about these targets and we're excited about being able to advance these with Boehringer.

[Unidentified Analyst:]

Thanks. And if I may have a quick follow up. Would you be able again to those specifics of what may trigger the [indiscernible] development candidate status is maybe a little bit color there?

[Rob Bazemore:]

Yes. There are a number of milestones. The way this is structured is that we receive $50 million in upfront payment along with $5 million in additional research support and then we're eligible for up to $280 million in pre-specified payments for a number of different milestones and those are both research, preclinical, clinical and commercial milestones. And so these are essentially headed for development candidate status as next milestones. But there are a number of milestones that are specified in the terms of the agreement.

[Unidentified Analyst:]

Great. Thank you.

[Operator:]

Thank you. And our next question comes from Peter Lawson with SunTrust. Your line is now open.

[Peter Lawson:]

Thanks for taking my questions. Robert just -- so how you think about additional partnerships, how are you thinking about that in terms of Tazemetostat geographical partnerships or even disease focused partnerships. And then maybe additional partnerships you're thinking about for the deeper pipeline?

[Rob Bazemore:]

Certainly. So this has always been and we've talked about partnerships have been a very important way that we have managed this business over the long-term collaborations and partnerships of various different types clinical collaborations; we've done preclinical partnerships before obviously with GSK and with Celgene. And we continue to be open to those as a way of moving our programs forward and capitalizing the business. We've had longstanding collaborations and discussions with potential partners -- strategic partners for Tazemetostat. We had a lot of inbound interest on Tazemetostat as you might imagine given the profile of the program and now what we know about the clinical data for Tazemetostat and we evaluate these opportunities as they arise. We think that they're probably core things that potential partners would want to know about Tazemetostat including the path registration in follicular lymphoma. That'll be an important piece of information and so we anticipate that we would be in a better position to explore potential partnerships for Tazemetostat in early 2019 after we have the answer to those questions and are progressing towards our first NDA. We do not anticipate in the near-term any additional collaborations in the preclinical research space.

[Peter Lawson:]

Got you. Thank you. And then just as we think about the combinations for Tazemetostat what's the timeline we should be thinking about to say the PD1 on the R-CHOP, were the kind of frontlines that is getting data around those?

[Rob Bazemore:]

Certainly. I will ask our Chief Medical Officer, Shefali Agarwal to speak to those.

[Shefali Agarwal:]

Yes. So thank you for that question. We are actually working at the moment and looking at a lifecycle management for Tazemetostat, looking at multiple indications as well as combinations including checkpoint combination and as you know that we are working very closely in our lung cancer trial with our Tecentriq as a combination and R-CHOP data has been presented, which is a safety study at ASH. As well as we're looking at other combinations in [indiscernible] and hopefully we'll provide that guidance and other indications early next year.

[Rob Bazemore:]

But in terms of those ongoing collaborations Peter in the combinations that we're evaluating, the safety run and component of R-CHOP study Shefali mentioned will be presented at ASH. You probably saw that as one of the accepted abstracts. That's an important piece of information because it demonstrates the safety of combining Tazemetostat with R-CHOP and the selection of 800 milligrams as the dose that can safely be combined with R-CHOP. In terms of the other collaborations looking at the Tecentriq combination into diffuse large B-cell as well as the Tecentriq combination and non-small cell lung cancer those are ones that we work directly with our partner Genentech on the timing. We expect that the DLBCL study would likely be presented sometime next year and we've not disclosed when the non-small cell lung cancer study would be presented.

[Shefali Agarwal:]

I think in terms of these combinations that can be used in multiple different tumor type. For example. R-CHOP it's used in follicular DLBCL as well as checkpoint combinations to Tecentriq in terms of multiple tumor types. So I think we're hoping also we can look at other indications as well.

[Peter Lawson:]

Maybe just finally on G9a, when could we see that data is that kind of a late 2019 event?

[Rob Bazemore:]

Good question, Peter. And so one thing I'll just specify is the collaboration that we announced this morning with Boehringer Ingelheim in no way impacts the G9a program that's still a wholly-owned program. We are on track with that. We are finalizing the IND enabling studies this year, so that we can move that into the clinic in early 2019 and we'll be presenting accordingly the data from IND enabling work that we've been doing this week -- this year.

[Peter Lawson:]

Great. Thanks so much. Thanks for taking the questions.

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Laura Christensen with Cowen. Your line is now open.

[Laura Christensen:]

Good morning. Thanks for taking my question. I'm just wondering, if you can estimate for us when the first candidate from your collaboration will be entering the clinic?

[Rob Bazemore:]

Because we're partnered with Boehringer and Boehringer will be responsible for clinical development. We'd rather not speak to those now. We'll work with Boehringer to define the timelines for how we announce those upcoming milestones as we get closer to them.

[Laura Christensen:]

Okay. And I'm also guessing that this is something else that you won't be able to disclose too much about. But in terms of the mutation that you expect to be able to target in patients with solid tumor cancers, do you have anything more to say on what those mutations might be?

[Rob Bazemore:]

It would be hard to do that without disclosing more about the targets than we are prepared to do today. But suffice it to say we're very excited about these candidates. We're excited about the molecules that have been created as well as the particular types of patients that we'll be targeting with them. And we'll be prepared to disclose more of those as we get further into the collaboration.

[Laura Christensen:]

Great. Thanks.

[Operator:]

Thank you. And I am not showing any further questions at this time. I would now like to turn the call back over to CEO, Rob Bazemore for any further remarks.

[Rob Bazemore:]

Great. Well, thank you all for joining us today. We're very proud of the progress that we've made both for Tazemetostat as well as our research pipeline and we'll continue to share updates as we advance all of these programs. We appreciate your continued support of Epizyme and look forward to speaking with you in the weeks and the months ahead. Thank you all.

[Operator:]

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