Epizyme, Inc.
Q4 2014 Earnings Call Transcript

Published:

  • Operator:
    Good day ladies and gentlemen. Welcome to the Fourth Quarter 2014 Epizyme Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session and instructions will follow at that time. [Operator instructions]. As a reminder, today’s call is being recorded. I would now like to turn the conference over to Manisha Pai. Ma’am, you may begin.
  • Manisha Pai:
    Thank you. Good morning. This is Manisha Pai, Head of Epizyme Corporate Communications, and welcome to Epizyme’s 2014 financial results conference call. This morning we issued a press release with our 2014 financial results. We also issued a news release on our amended and restated collaboration agreement with Eisai. Both news releases can be found on our website at epizyme.com. The agenda for today’s call is as follows. Dr. Robert Gould, President and CEO, will provide an overview of the Eisai transaction and update on the company’s progress and plans for 2015. Dr. Peter Ho, Chief Development Officer will review the company’s clinical programs and provide an update on Phase 2 plans for EPZ-6438. Dr. Bob Copeland, President of Research and Chief Scientific Officer will review recent pipeline developments. Andy Singer, Chief Financial Officer will walk through the economics of the Eisai transaction and financials for the year 2014. Robert will then make, closing remarks and open the call for Q&A. Before we begin, I would like to remind you that today’s discussion will include statements about the company’s future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors including those discussed in the Risk Factors section of our Form 10-Q filed with the SEC on November 6, 2014 and in our other filings from time to time with the SEC including our Form 10-K. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change. Now, I will turn the call over to Robert Gould.
  • Robert Gould:
    Thanks Manisha. I’ll start out today by welcoming our new Chief Financial Officer, Andy Singer who is on the call with us this morning. Andy joined us last month and has already hit the ground running. He brings a wealth of strategic and financial experience, most recently as Managing Director, Healthcare Investment Banking, in the Life Sciences Group at RBC Capital Markets where he spent nearly the last 11 years. Andy has chosen a particularly exciting time in Epizyme’s history to join the company. And we’re very glad to have him here. Over the past seven years, we have been deliberately building our design as an independent oncology company. Today, I’m very excited to announce an important milestone in that process. Last night we reacquired worldwide rights to our EZH2 Inhibitor, EPZ-6438 from our partner Eisai. We will assume full operational responsibility for global development, manufacturing and commercialization of 6438 outside of Japan where Eisai will retain rights. We believe that having control of worldwide development manufacturing and commercialization for a targeted therapeutic like 6438 will be transformative for Epizyme. We made the decision to approach Eisai about reacquiring rights based on our enthusiasm for the remarkable early clinical safety and efficacy data we’ve seen with 6438 as a monotherapy. This includes durable complete responses and partial responses in relapse and refractory patients with non-Hodgkin lymphoma or NHL and INI1-deficient tumors. Our decision to approach Eisai was also influenced by the fact we observe these objective responses in a broader patient population than we initially anticipated, NHL patients with wild-type EZH2 and non-germinal center lymphoma patients. As we began to see the quality and duration of the responses in NHL and INI1-deficient tumors, as well as the safety and tolerability of 6438, it was apparent to us that this program should be accelerated and significantly expanded to address as many of the potential opportunities for the compound as possible. We went to our Eisai colleagues to propose that with our expertise in HMT inhibitors, we would be best positioned and strongly motivated to focus resources to move this promising program forward aggressively. Our discussions coincided with Eisai’s decision to focus more of their resources on their late-stage assets across therapeutic areas. Thus, we were able to negotiate a transaction that we believe benefits both companies. Eisai will retain significant economic interest in 6438. They have elected to retain control of development and commercialization of 6438 in Japan with the right of first negotiation in rest of Asia. And they will receive royalties on our global sales outside of Japan. We are very pleased with the terms of the deal. We at Epizyme regained complete control of the program outside of Japan with long-term economics that we believe are very favorable. Andy will walk you through these terms later in the call. We have already begun activities to ensure a smooth transition of responsibility from Eisai to Epizyme. This includes preparation to take responsibility for the ongoing Phase 1 dose escalation study and its expansion cohorts, the clinical pharmacology study, the planned Phase 2 study in NHL and the regulatory dossiers in Europe. We are also transferring inventories of 6438 clinical supplies and the active pharmaceutical ingredient for 6438 from Eisai to Epizyme. Regaining full operational control of 6438 allows us to move clinical development forward aggressively beginning with the initiation in Europe of a planned five-arm Phase 2 portion of the ongoing Phase 1/2 study, evaluating 6438 for the treatment of NHL. Peter will provide more detail about the Phase 2 study design later in today’s call including plans for a Phase 2 study in adults with INI1-deficient tumors including synovial sarcoma and a Phase 1 study in children with INI1-deficient tumors including malignant rhabdoid tumors. INI1-deficient tumors are rare and genetically identifiable and typically have very poor outcomes with currently available treatments. We’ve seen a durable, complete response in one of the two INI1-deficient patients in our Phase 1 study and we believe that with more data, this patient population could represent a potentially accelerated path to regulatory approval. We plan to launch the Phase 2 portion of our 6438 trial in non-Hodgkin B-cell lymphoma in the second quarter of 2015 in the European Union. In the course of our ongoing preclinical safety study for 6438, we observe the development of lymphoma in a single study in Sprague-Dawley rat. We did not observe this finding in our parallel preclinical safety studies for 6438 which were conducted in primates. Additionally, we have not observed any similar findings in our ongoing Phase 1/2 clinical study. We’ve informed the relevant European regulatory authorities and the clinical investigators of this finding. We continue to enroll patients in the expansion cohorts of our Phase 1 study in France, with updated data from the dose escalation patients expected mid-year and data on the expansion cohort patients expected in the second half of 2015. Based on our discussions with the FDA, expansion of trials of 6438 to the United States will require that we address this finding to the satisfaction of the FDA within the context of patient risk benefit and in view of the safety and efficacy data from our ongoing Phase 1/2 clinical study. We’re conducting additional preclinical study to understand this observation more fully prior to submitting our IND. We remain very pleased with the preliminary safety profile, tolerability and durable responses that we’ve seen today in the Phase 1 clinical study of 6438. The responses are particularly exciting given that this is currently being studied as a monotherapy in patients who have been refractory to or relapsed following four or more prior therapies, the safety and tolerability suggests possibilities for combinations with other NHL therapies and we have seen synergy in cell lines with corticosteroids, BTK inhibitors, PI3K inhibitors and other agents. We believe that 6438 has tremendous potential to deliver value for patients, care-givers and healthcare providers. The reacquisition of the global rights to this program allows us greater control to maximize that potential and advance the program rapidly. We are very excited to have been able to regain global responsibility for 6438. And we believe this is an important inflexion point in our growth as an independent oncology company and as a leader in the epigenetic space. With that, I’ll turn it over to Peter to provide an update on our clinical programs. Peter?
  • Peter Ho:
    Thank you, Robert. 2014 was an important year for Epizyme’s pioneering work in Epigenetics. We were the first to validate the clinical potential of EZH2 inhibition in oncology by presenting data on 6438. In November, EORTC Scientific Chair, Jean-Charles Soria, from the Institut Gustave Roussy presented data from the ongoing Phase 1 study of 6438 in a late-breaking oral session at the EORTC NCI AACR meeting in Barcelona. The ongoing Phase 1/2 clinical trial in patients with B-cell lymphomas and advanced solid tumors is designed to assess the safety, tolerability and pharmacokinetics of 6438. The primary objective of the Phase 1 dose escalation portion of the trial is to determine the recommended Phase 2 dose or maximum tolerated dose. Secondary end-points include preliminary assessments of anti-tumor activity. The data from the dose escalation portion of this study were the demonstration of clinical activity associated with EZH2 inhibition and we are very encouraged by the objective responses observed in 6438 in these patients who are heavily pre-treated. Professor Soria presented data from 10 valuable patients with relapsed or refractory NHL as of October 20th data cut-off. Specifically, 305 DLBCL patients achieved a partial response or better including one complete response. And 104 follicular lymphoma patients achieved a partial response. As with the DLBCL patient with the complete response, we have observed the potential for these responses to deepen over time. All of the NHL Patients who are valuable for efficacy were found to have wild-type EZH2. In this study, we have also seen a complete response in one of two INI1-deficient patients. As of the October 20th data cut-off, the responding patient had a malignant rhabdoid tumors or MRT. As Robert mentioned, INI1-deficient tumors are genetically defined. MRTs are caused by genetic alteration that indirectly creates a dependence of cancer cells on EZH2 activity. This alteration exists in nearly 100% of MRT patients and we believe that the response we’ve seen in the MRT patients may serve as a useful analog to what we might expect to see in NHL patients with mutant EZH2. Earlier this month, at the 13th International Congress on targeted anti-cancer therapies, Professor Vincent Ribrag of the Institut Gustave Roussy, presented the following updates to the data that were presented at EORTC using a January 23rd data cut-off. Four of the NHL patients on whom Professor Soria reported in November remained on treatment beyond seven months. The DLBCL patient with complete response remains on study at 14 months. The MRT patient with the complete response remains on study at nearly 9 months. The most recent incremental update is exciting to us because it highlights the durability of the responses we are seeing in patients with either NHL or INI1-deficient tumors. We are very pleased with the safety profile and tolerability we’ve seen in the Phase 1 dose escalation study. As of the October 20th data cut-off, there has been one dose-limiting toxicity of thrombocytopenia at 1,600 mg, which is the highest dose and no treatment related discontinuations. We are enrolling two additional Phase 1 expansion cohorts of six patients each to gain additional clinical experience, one cohort at 800 mg BID which is the dose selected for the planned Phase 2 study and the other at 1,600 mg BID. We’ve already completed enrollment in the 800 mg cohort and have been rolled five of six patients in the 1,600 mg cohort putting us on track to complete enrollment by the end of the month. It is uncommon to see a drug with this kind of safety profile, tolerability and activity as monotherapy in relapsed and refractory cancer patients. We’re looking forward to additional data from this trial in the coming months both updates on the dose escalation patients who remain on study as well as data from new patients enrolled into the expansion cohorts. We expect to present updated data from the dose escalation cohorts in the middle of this year and preliminary data from the expansion cohorts towards the end of the year. As Robert mentioned, we are very excited to take over responsibility of 6438 and we’re working aggressively to move clinical development forward beginning with the initiation of a five-arm Phase 2 study in Europe in the second quarter of 2015. In this study, we will seek to gain additional experience in a broad set of patient populations evaluating five different cohorts. The first arm will enroll germinal center DLBCL patients with wild-type EZH2. The second arm will enroll germinal center DLBCL patients with mutant EZH2. The third arm will enroll follicular lymphoma patients with wild-type EZH2. The fourth arm will enroll follicular lymphoma patients with mutant EZH2. And the fifth and final arm will enroll non-germinal center DLBCL patients. We expect to initiate this study in Europe during the second quarter and we plan to enroll approximately 30 patients per arm for a total of around 150 patients. Due to the estimated frequency of the respective patient populations, the arms will accrue at different rates, with the fastest to enroll expected to be the non-germinal center DLBCL and the germinal center DLBCL with wild-type EZH2. We anticipate presenting data from these two arms in mid-2016, followed by data from the follicular lymphoma wild-type EZH2 arm. We plan to initiate studies in adult and pediatric patients with INI1-deficient tumors in the second half of this year. Our preclinical data as well as other literature led us to expect even more robust activity in patients with EZH2. And with this study design will allow us to prospectively identify these patients with a diagnostic that we’ve developed in partnership with Roche. We can then rapidly assess whether patients with mutant EZH2 will respond differently from patients with wild-type EZH2. Now, beyond non-Hodgkin lymphoma, EZH2 has been implicated as an oncogenic driver in a broad spectrum of other cancers. For example EZH2 and/or other PRC2 subunits have been shown in the literature to be amplified and/or over expressed in the subsets of breast, prostate, melanoma, colorectal, hepatocellular, pancreatic, lung cancer and Glioblastoma. As illustrated by our preclinical studies and the Phase 1 clinical experience with INI1-deficient malignant rhabdoid tumors, genetic alterations in the SWI/SNF chromatin remodeling complex can confer sensitivity to EZH2 inhibition. And recently, the literature has suggested mutations of the SWI/SNF subunit ARID1a may confer sensitivity to EZH2 inhibitors in ovarian clear cell carcinoma. The Epizyme team is actively seeking to validate the utility of 6438 in preclinical models of these various human cancers. And we look forward to exploring the clinical utility of 6438 and additional cancer indications where the foundational preclinical data support such translation. We’re very excited about the progress we’ve made on this program on its future promise. In particular the potential for 6438 to provide durable responses in these patients with such aggressive diseases, we have few treatment options. I’ll now briefly touch on our other clinical program, the DOT1L inhibitor, EPZ 5676, which we are studying in a genetically defined subset of acute leukemias. We saw two complete responses in the Phase 1 adult study which is very unusual in this heavily pretreated patient population. Both of these responses occurred at the 54 mg per meter squared dose escalation cohort. And we are currently enrolling up to 20 additional MLLR patients in a 54 mg per meter squared expansion cohort to better understand the activity we saw at this dose. We expect this expansion cohort to be fully enrolled by the end of 2015 and we will determine the path forward for 5676 after we review these data. In May of 2014, we initiated a Phase 1 study of 5676 in pediatric acute leukemias. This dose escalation study is ongoing and we’re currently enrolling patients between 3 months and 18 years of age in the U.S. We presented pharmacokinetic modeling data from this study at ASH. And we expect to complete enrollment of this study in the second half of 2015. In summary, 2014 was an important year in which we continued to build our leadership in HMT inhibitors. We’re very excited about the progress we’ve made in the clinic to date. And we’re looking forward to the following clinical milestones in 2015. First; initiation of the five-arm Phase 2 study of 6438 in non-Hodgkin lymphoma in Europe during the second quarter. Second; initiation in the second half of 2015 of a Phase 2 study of 6438 in adult patients with INI1-deficient tumors and a Phase 1 study in pediatric patients with INI1-deficient cancers. Updated data from the 6438 Phase 1 dose escalation cohorts will be in the middle of this year. We will have updated data from the 6438 Phase 1 dose expansion cohorts during the second half of the year. And then finally, from the 54 mg per meter squared expansion cohort of the 5676 adult Phase 1 trial, we’ll be doing in the second half of the year. And with that, I’ll now turn it over to Bob for an update on our preclinical pipeline.
  • Bob Copeland:
    Thank you, Peter. As Peter mentioned, we’re very excited to have seen clinical responses with both of our first two programs. And we continue our pioneering work on additional epigenetic targets. At the 2014 ASH meeting, we presented data demonstrating In Vitro and In Vivo activity of our first-in-class PRMT5 inhibitor EPZ015666. This is shown potent activity in preclinical models of mantle cell lymphoma. Our PRMT5 inhibitors are first-in-class potent, selective and orally bio-available inhibitor of PRMT5. These two compounds, has demonstrated potent cellular activity, measured by its ability to block symmetric di-methylation and inhibition of proliferation of mantle cell lymphoma cell lines. It also has displayed robust anti-tumor activity as a monotherapy in xenograft, models of mantle cell lymphoma. PRMT5 is the first of three targets in our collaboration with GlaxoSmithKline. And the literature has shown that PRMT5 is implicated in a variety of solid tumors and blood cancers. Our drug discovery portfolio consists of the significant number of cancer implicated HMT targets for which we are progressing small molecule inhibitors at various stages of preclinical development. At the AACR meeting in Philadelphia next month, we will be presenting preclinical research on a subset of our HMT portfolio, including presentations on CARM1, SETDB1, SmD3 and PRMT6, all of which have been implicated in a variety of cancers. We look forward to sharing more information about these targets in April. Andy will now walk you through the financials for 2014 and expectations going forward. Andy?
  • Andy Singer:
    Thanks Bob. I would first like to say that I’m thrilled to be joining the exceptional Epizyme team, with its leadership position in Epigenetics and its pipeline of first-in-class agents targeting important unmet needs in cancer. We have a lot of work to do and a tremendous opportunity for growth. And I’m looking forward to being a part of it. I will begin with our current cash position and projected cash runway. We began 2014 with $124 million in cash and cash equivalents, and ended the year with $190 million. This position reflects our follow-on offering in February 2014, with $101 million in net proceeds and collaborator non-equity funding of $53 million in 2014. The reacquisition of our EZH2 rights from Eisai represents a significant component of our operating plan for 2015 and beyond. As Robert mentioned, we will now be leading global development of 6438 and solely funding the clinical trials including the five-arm Phase 2 clinical trial that Peter described. As a result, we are closely evaluating our operating plan for 2015 including our pipeline programs in focus and expected levels of investment in each program. We ensure that we are carefully monitoring our spend and providing for appropriate capital to be devoted to the aggressive development of 6438. With this exciting opportunity, including our upfront payment to Eisai, the 5676 expansion cohort and pediatric trial and the continued advancement of programs in our pipeline, we anticipate that our cash, cash equivalents and research funding under our collaborations will fund the company through the first quarter of 2016. This does not include any potential future milestone option or extension payments. We plan on coupling this increase in expenditures with strong cost controls. We will be reviewing our overall spend carefully in the coming months with an aim to extending our cash runway. Now turning to our full year results. Research and development expenses increased in 2014 largely driven by the expansion of our product platform and the advancement of our preclinical pipeline programs. Expenses were $76 million in 2014 compared to $58 million in 2013. We anticipate our research and development expenses will increase significantly in 2015 as we assume responsibility for the clinical trials and related global development of 6438. Now I would like to turn to the terms of the Eisai deal. Under the amended agreement we are assuming full control of global development of manufacturing and commercialization funding 100% of global development costs while Eisai will fund 100% of Japan specific development costs. We will make a $40 million upfront payment to Eisai up to an additional $20 million in potential clinical milestone payments and up to $50 million in potential regulatory milestone payments. We will pay Eisai a royalty at a percentage in the mid-teens on sales outside of Japan. And Eisai will pay us a royalty at a percentage in the mid-teens on sales in Japan. Eisai also has a limited right of first negotiation for Asia licensing rights outside of Japan for the EZH2 program, should we seek to partner those rights in the future. Epizyme has achieved an exciting goal in reacquiring the rights to EZH2 and advancing itself as an independent oncology company. I’m very excited to have joined the company at this transformative time and I look forward to working with the Epizyme team to continue to advance the company, its pipeline and this very promising program. Now I’ll hand it back to Robert to wrap up before Q&A.
  • Robert Gould:
    Thanks Andy. As you’ve heard this morning, we made tremendous strides in 2014 toward our goal of becoming a fully integrated independent oncology company. And we expect 2015 to be a year of even more progress particularly with the reacquisition of rights to 6438. We’re excited about all of the opportunities ahead of us and we will continue our focus on aggressively moving our first-in-class clinical programs and pipeline forwards. We’ll now open the call up for Q&A. Operator?
  • Operator:
    [Operator Instructions]. Our first question is from Mike King of JMP Securities. You may begin.
  • Mike King:
    Congrats guys. Thanks for taking the question first of all, I can attest personally, divorce can be liberating. So I think this is great news for you. Just wondering what - Andy, I know you said you’re considering your spend going forward, but just remind us, to what extent financially Eisai was contributing to the cost of development, maybe in terms of dollars to 6438?
  • Andy Singer:
    Sure. So, Eisai was responsible for full commercialization and development expenses for the program. And they’ve contributed $39 million to date.
  • Mike King:
    Okay. And then maybe a data question on 6438, we’ve had this struggle to - for, greater information about the full data set from all of the patients. I’m just wondering if the policy will change under Epizyme now. And particularly interested in, what you guys will be willing to say regarding correlative studies with respect to genomic profiling, etcetera, in patients treated with 6438?
  • Robert Gould:
    Thanks Mike, this is Robert. As you know, we have had a policy along with our partner Eisai to disclosed information at major clinical meetings. Now that we’ve assumed control of the program, we will continue that policy of providing updates at those major medical meetings because that’s an important way in order to ensure the integrity of the data that we’re presenting. Having said that of course this is a significant program for us as we continue to refocus our activity and focus even more on 6438. And because of the importance that it plays to us at Epizyme, we’ll be committed to providing you with significant updates as we move forward through the clinical development program.
  • Mike King:
    Well, thanks for that answer, Robert. I think it was more the, what than the when, that I was looking for. So as far as more data granularity, either - subsequent to the data that you presented at EANAA last year or perhaps data updates going forward as far as disclosure items?
  • Robert Gould:
    Yes, we’ll be committed to providing more updates on things like prior lines of therapy that the patients received. How long they’ve been on treatment, the distribution of the various patient groups as we forward, for example today you probably heard that four additional studies are - four additional patients - four patients have continued on study for more than half a year now. And we have patients over a year. And we’ll be committed to providing that kind of transparency.
  • Mike King:
    Great. Thanks. I’ll get back in queue.
  • Operator:
    Thank you. Our next question is from Yatin Suneja of Cowen & Company. You may begin.
  • Yatin Suneja:
    Hi guys, thank you for taking my questions. It seems like you approached Eisai about this deal. Could you help us understand at what point did you decide that you wanted this asset back, and what exactly did you see in the data? Just the PRs and the durability of the PRs and CRs that you see or is there anything else you saw in this data?
  • Robert Gould:
    Yes, so we decided to approach Eisai during the fall, as the data as, and winter is the data were emerging. And what impressed us about the data were a couple of things. First of all was the durability of the responses that we were beginning to see as we went through the fall. And the NHL patient population as you know, it’s not only important to assess the responses, the PRs and the CRs but also the durability of those responses. And as patients were tolerating the drugs so well achieving durable responses, we became more and more excited about the opportunity with 6438. In addition, the malignant rhabdoid tumor, the patient with malignant rhabdoid tumor the INI1-deficient patient achieved considerable benefit from receiving 6438. That patient as you heard was reclassified as a complete response based on reanalysis of the scans that that patient had. So what we felt that we had in our - in-hand with this targeted therapeutic was an agent that had potential in solid tumors, INI1-deficient tumors, the significant unmet clinical opportunity in which treatment is surgery and radiation as well as the, a broad NHL population.
  • Yatin Suneja:
    Great. And then in terms of the next update from 6438 at AACR, how many more patient data should we expect at AACR, and do we expect to see data from any new INI-deficient patients there?
  • Peter Ho:
    Right, hi, this is Peter. Thanks for the question. So, just to clarify, I don’t think we’ve said anything about clinical data disclosures at AACR. We are planning to update the patient experience from the dose escalation cohorts at a major medical meeting around mid-year.
  • Yatin Suneja:
    Yes. I’m sorry, I actually meant mid-year at the next presentation. All right, and then in terms of the Phase 2 trial in solid tumor, have you finalized the dose for the solid tumor? I know in liquid tumor you’re going to use the 800 mg dose, but do we know what the dose will be for the solid tumor when you do the trial?
  • Peter Ho:
    Sure. That’s a great question. So, as you may recall for the Phase 1 study, it was included both advanced solid tumor patients and lymphoma patients as well. And so, we did not see any reason to have - to use a different dose between the two populations. So in going forward, in solid tumors, we plan to use the same recommended Phase 2 dose of 800 mg BID going forward.
  • Yatin Suneja:
    Great. Thank you very much.
  • Operator:
    Thank you. Our next question is from Peter Lawson of Mizuho. You may begin.
  • Peter Lawson:
    Just with the changes in control with 6438, I wonder if you could just walk through how you’re thinking about the market opportunity in patient groups you had initially target, if anything has changed there.
  • Robert Gould:
    Yes, thanks Peter. So, what we are doing as we move forward is we continue - the data continues to support a good market opportunity in a broad NHL population. With the Phase 2 study design that we’ve outlined for you, we’ll be particularly interested in identifying and focusing quickly on the EZH2 mutant population because we think that represents a unique opportunity as does the INI1-deficient tumors. And so, we’ll be beginning the Phase 2 in the INI1-deficient solid tumor population as mentioned in the second half of this year as well as the pediatric population. Additionally, we’ve begun to think more extensively about the combination studies that we’ll be doing once we gain more experience with the agent as a - single agent. And so incorporating combination studies earlier will be an exciting opportunity for us.
  • Peter Lawson:
    And then, just with the change in the control, it sounds like you approached Eisai. What was the trigger point from you from Eisai? Was it feeling - I guess dragging their feet, or what kind of helps you push and change with that control?
  • Robert Gould:
    The trigger point for us is really the belief that it’s a rare opportunity to develop an agent when you’re seeing a kind of activity that we’re seeing in a Phase 1 dose ranging study. And we wanted to ensure that we were putting a clinical development program that maximizes the opportunity in NHL in the INI1-deficient solid tumors. And that we had the opportunity to expand into other solid tumors supported by our preclinical data. And for us, this is such unique compound and unique opportunity we wanted to bring all of our experience and resources to bear on it.
  • Peter Lawson:
    Okay. Thank you. I’ll get back into the queue.
  • Operator:
    Thank you. Our next question is from David Nierengarten of Wedbush Securities. You may begin.
  • David Nierengarten:
    Hi, thanks for taking my question. Just couple of quick ones. First, just to make sure, this reacquisition of rights wasn’t part of the original agreement? You came to Eisai separately and negotiated this new partnership, so is that what I’m hearing?
  • Robert Gould:
    That is correct David. It was not part of the original agreement. This is a totally new agreement that replaces the old agreement.
  • David Nierengarten:
    Okay, great. And then you mentioned finding of lymphoma in rats. If I heard that correctly, could you may be give a little bit of background on the pre-clinical animal, was it particularly old rat or, anything like that, or is it something that we should be concerned about?
  • Bob Copeland:
    Thanks for the question, it’s Bob Copeland. So, in the course of ongoing preclinical safety studies with 6438, we reserved in development of lymphoma in a single study in Sprague-Dawley rats. We did not observe it in parallel preclinical study for 6438 that was conducted in primates. And we’ve seen no evidence of this in our ongoing Phase 1, Phase 2 clinical studies. So, we were conducting additional preclinical studies to understand this observation more fully. As we continue to enroll patients in here and in the expansion cohorts of our Phase 1 studies. We remain on track to launch our Phase 2 trial in Europe, having to transition of the clinical program from Eisai to Epizyme. And we were as I said trying to understand this observation more fully. Those were from me, with little to know that Sprague-Dawley rats are commonly used in these preclinical studies. And that is strain that happens to be particularly problem to developing lymphoma. So we’re exploring a number of different hypotheses right now.
  • David Nierengarten:
    So you don’t know if for some reason it might have activated an oncogene or anything like that in the animal or animals? Sorry.
  • Bob Copeland:
    So, we’re looking into a number of different hypotheses that is one hypothesis.
  • David Nierengarten:
    Okay. And then one last question, is there any particular gating mechanism again for beginning combination studies, or now that you have full control, is that expected to accelerate, or do we have the same dates?
  • Peter Ho:
    Hi David, it’s Peter. That’s a great question. We’re very excited by the potential for 6438 to enter into combination regiments. And we talked a bit earlier about the safety as a monotherapy that we’ve seen thus far. And certainly that is one aspect that makes the drug particularly compelling to put into combination. As you’ve also heard, we started generating preclinical data on combinations and it’s very encouraging. So, all that being said, our main focus right now is to get going on the Phase 2 monotherapy studies to better characterize the activity of the drug as a single agent. When we get that off the ground and get some initial data to help us better understand that monotherapy activity. But it is absolutely within our sights to proceed forward with a combination development, we just want to get a better handle on the monotherapy activity though before we jump into that and decide which is the best way to go forward.
  • David Nierengarten:
    And the same decision would apply to helping with any investigator-sponsored studies, I take it?
  • Peter Ho:
    With investigators, sponsors, I mean, we’ve had we’ve already had some interest from investigators for combination studies. I want to be a little careful of course in terms of jumping into that. I mean, in many cases, investigator initiated studies aren’t started until a bit later in development. We certainly want to explore all avenues to understand the breadth of activity for this drug. And certainly that may be part of the strategy going forward.
  • David Nierengarten:
    Great, thanks for taking my several questions. Thanks guys.
  • Operator:
    Thank you. Our next question is from Howard Liang of Leerink. You may begin.
  • Howard Liang:
    Thanks very much. Regarding the dose expansion cohort, you said 12 additional patients that you enrolled by December. Do you know the status, mutation status of these patients? I know you might want to preserve that data for presentation, but can you tell us whether they’re mixed, wild-type and mutant patients?
  • Peter Ho:
    Yes, hi Howard, it’s Peter. So, we are still in the process of analyzing that. As you know in the Phase 1 study, this is done retrospectively. But our plans going forward for the Phase 2 study is to assess EZH2 mutation status prospectively and to assign patients to those cohorts. So, we’re analyzing that and we’ll be able to report it out when we have the data.
  • Howard Liang:
    Is there a commercial assay to measure EZH2 over-expression? Maybe you can also talk about whether - if you will be able to get the data, expression-level data for the Phase 1 patients that you had reported on, and can you talk about your different tumor types? I think from the leukemia on paper, we know it seems to pretty high in DLBCL but help on the other tumors?
  • Robert Gould:
    Thanks Howard, this is Robert. There is no commercially available test for over-expression of EZH2. Our recent publication that correlated over-expression with aggressiveness with NHL was an antibody Immunohistochemical based approach. And as you know, IHC tests are semi-quantitative assessments. In terms of the question of whether we could reanalyze the Phase 1 patients that have responded for their over-expression status, we don’t have fresh, we don’t have fresh biopsy material, it’s a fresh biopsy for not taking from those patients pretreatment. That’s certainly something that we’ll be very excited about looking at as we move forward.
  • Howard Liang:
    Where will the upcoming Phase 2 trial be conducted? Would it be a global study, including U.S. sites?
  • Robert Gould:
    It’s going to be conducted in European Union.
  • Howard Liang:
    Okay. And then, last question on the pipeline compounds that you’re presenting at AACR, can you talk about when might the compounds move to the clinic, and these additional targets, CARM1, SETDB1 and SmD3, are these wholly owned or partnered?
  • Robert Gould:
    So there is a collection of targets that we’re going to be presenting at AACR Howard. I won’t get into what the distribution of partnered and un-partnered is. But I can say that Epizyme retains a significant portion of the HMT target space. And in terms of clinical transition, we’re not giving guidance on that because as you know frequently all sciences, has lots of contingency. So that’s as much as we’re saying.
  • Howard Liang:
    Thank you very much.
  • Robert Gould:
    Okay.
  • Operator:
    Thank you. [Operator Instructions]. Our next question is a follow-up from Mike King of JMP Securities. You may begin.
  • Mike King:
    Thanks for taking the follow-up guys. I just wanted to ask Bob about the PRMT5 program. I just saw some publications in the literature that talked about PRMT5’s role in implantation of I guess, the blastocyst, and there’s two forms, there’s a nuclear, and there’s a cytosolic and I guess the PRMT5 that’s in the nucleus as to do with origination of germ line cells. So I’m just curious about the potential for teratogenicity of that target. Maybe you can talk a little bit about that biology?
  • Bob Copeland:
    Thank you, Mike. I mean, it’s a great question. PRMT5 has been implicated in a number of different solid hematologic cancers. In terms of therapeutic index AP profile, this is too early to answer any of those questions. Our approach is always to do that with small molecules through GLP safety assessment. There’s just a rich literature with genetic knockdowns and things of that sort that doesn’t always reflect the experiences of a small molecule inhibitor.
  • Mike King:
    Sure. Okay. Thanks very much.
  • Operator:
    Thank you. I’m showing no further questions at this time. I would like to turn the call back over to Robert Gould for closing remarks.
  • Robert Gould:
    So, thank you everybody for your time this morning. And I hope you share our exciting for 6438 as we take control of this global development program. It really is changing for Epizyme. And we’re very excited about the future. Thank you.
  • Operator:
    Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. Have a wonderful day.