Infinity Pharmaceuticals, Inc.
Q1 2019 Earnings Call Transcript

Published: 8 May 2019

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals Conference Call to discuss the Company's Financial Results for the First Quarter Of 2019. My name is Sheree and I'll be your operator for today's call. At this time, all participants are in a /listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at Infinity's request. Now, I would like to introduce your host for today's call, Ms. Jayne Kauffman. Please go ahead.

[Jayne Kauffman:]

Thank you, Sheree, and good morning, everyone. Welcome to today's call to discuss our recent business progress and review our first quarter 2019 financial results. With me here today are Adelene Perkins, Chief Executive Officer; Dr. Sam Agresta, Chief Medical Officer; and Dr. Jeff Kutok, our Chief Scientific Officer. We will open up the call for Q&A following our remarks. The press release issued this afternoon details our results and is available on our website at infi.com. Please note that during this call, we may make forward-looking statements about our future expectations and plans, including clinical development objectives, the therapeutic potential of our product candidates, our strategic plans and strategies, and financial projections. Our actual results may differ materially from what we project today due to a number of important factors, including the considerations described in the Risk Factors section of our quarterly report on Form 10-Q for the first quarter of 2019 and in other filings we make with the SEC. These forward-looking statements represent our views only as of today, and we caution you that we may not update them in the future, whether as a result of new information, future events, or otherwise. Now, I would like to turn the call over to Adelene.

[Adelene Perkins:]

Thanks, Jayne and thank you to everyone for joining us. On our fourth quarter call, just under two months ago, we emphasized that 2019 as the year of focus and execution. So, consistent with that theme, we're going to keep today's call very focused. I'll begin by summarizing our progress and executing on key strategic goals that we laid out at the beginning of the year, and then open up the call to questions for which I'll be joined by other members of the Infinity team here with me today. Value creation at Infinity in 2019 and beyond will be driven by compelling clinical data with our first-in-class immuno-oncology therapy IPI-549, together with a keen sensitivity to equity and product right solutions in funding this clinical development. During the first quarter of 2019, we're pleased to have established a clinical collaboration with Roche Genentech to expand the development of IPI-549 into the frontline setting with novel triple combination therapy, in addition to accessing $22.9 million of non-dilutive capital to fund our expanded development program and extend our cash runway. During 2019, we will be initiating trials in four settings with IPI-549 including in earlier lines of therapy, new indications, and novel potentially transformative immuno-oncology indications. We are on track to initiate MARIO-275 by the end of June, our phase 2 study of IPI-549 in combination with Opdivo in patients with immuno-oncology naive, platinum refractory advanced urothelial cancer in collaborations with Bristol-Myers Squibb. We're also on track to initiate MARIO-3 in the third quarter of this year. MARIO-3 is a phase 2 study in collaboration with our partners Roche Genentech and has two main components. The first is evaluating IPI-549 in combination with Tecentriq and Abraxane as a frontline treatment in patients with triple negative breast cancer. And the second evaluates IPI-549 in combination with Tecentriq and Avastin as a frontline treatment in patients with renal cell cancer. In the second half of the year, our collaborator Arcus Biosciences plans to advance IPI-549 in novel triple combination therapy beyond checkpoint inhibitors by combining IPI-549 with Arcus’ adenosine inhibitor AB928 and Abraxane in patients with relapse refractory triple negative breast cancer. These trials are key components of our strategy to generate compelling clinical data with IPI-549 in a range of combinations and settings in collaboration with top-tier partners. Working with established leaders in the field of oncology, like Bristol-Myers Squibb and Roche Genentech and Arcus Biosciences, not only provides access to important resources and expertise but also provides important validation and support from these partners for our development of IPI-549 in combination with current and evolving standards of care to enhance outcomes for patients. Combining IPI-549 with several best-in-class marketed therapies and several cancer indications in lines of therapy represents a significant step toward our goal of generating compelling patient benefit data and we look forward to updating you on these trials as they progress. Importantly, the new trials we are initiating in 2019 have all been informed by clinical and translational data from MARIO-1. MARIO-1 will be fully enrolled this year, and as the data mature and potentially give rise to additional studies with IPI-549, our announcement of any additional studies will be coupled with the supporting data from MARIO-1. We're encouraged by both our clinical and translational data to-date with IPI-549 and by the excitement of the broader scientific community around PI3-kinase gamma inhibition as a promising immuno-oncology approach. At the recent AACR annual meeting in April, Dr. Judy Varner, Professor at the University of California, San Diego School of Medicine, gave a plenary talk entitled taming the beast strategies to target the immune suppressive macrophage to enhance cancer immune therapy. Dr. Varner explained that PI3-kinase gamma signaling in immunosuppressive macrophages, the beasts of the tumor micro-environment, plays a major role in preventing T-cell responses in tumors rendering checkpoint inhibitors in effective. Dr. Varner discussed the promise of PI3-kinase gamma inhibition with IPI-549 in taming these macrophage beasts and presented supporting preclinical evidence as well as clinical and translational data from MARIO-1 study underscoring the importance of this approach. The link to Dr. Varner’s talk is available free of charge on the AACR meeting website. Dr. Varner will be speaking on the same topic at the Frontiers and Cancer Immunotherapy at the New York Academy of Sciences meeting in New York City next week on May 14, at which we’ll also be presenting a poster of the MARIO-1 data presented at the SITC Annual Meeting in November of 2018. Given our 2019 focus on clinical execution and expanding the breadth and depth of our clinical development program, we're pleased to have access to the equivalent of over $60 million of non-dilutive capital during the past two quarters to advance these trials. $42 million of this capital has come from the realization of an approval milestone and the monetization of royalty payments on Copiktra, which we licensed to Verastem. And the remainder has come from the realization of a phase 3 milestone on our hedgehog inhibitor pathway program licensed to PellePharm and meaningful drug supply commitments from top-tier collaborators for the expanded development of IPI-549. Importantly, we’ve accessed this non-dilutive capital to advance development of IPI-549 while also retaining worldwide rights to the program. As of March 31, 2019, we had total cash, cash equivalents, and available for sale securities of $70.5 million compared to $58.6 million at December 31st of 2018. We recognized the $30 million gross proceeds from Copiktra royalty monetization as a liability net of transaction costs on our balance sheet, which is industry standard accounting treatment for royalty monetization. We recorded $2.1 million in revenue for the first quarter 2019 which primarily relates to the achievement of a $2 million milestone from PellePharm for the initiation of a phase 3 study investigating Patidegib in patients with Gorlin syndrome. We did not record any revenue during this period last year. R&D and G&A expense was comparable year over year at $5.8 million and $3.4 million respectively for the first quarter of 2019. Royalty expense for the first quarter of 2019 was $6.8 million, which primarily relates to our sharing a portion of the proceeds from our Copiktra royalty monetization with Takeda. Net loss for the first quarter of 2019 was $13.7 million or a basic and diluted loss per common share of $0.24 compared to a net loss of $9.5 million or a basic and diluted loss per common share of $0.18 for the same period in 2018. We expect 2019 net loss to range from $40 million to $50 million and we expect to end 2019 with the cash and investments balance ranging from $40 million to $50 million. Based on a current operating plans which exclude additional funding our business development activities, we anticipate that our existing cash, cash equivalents, and available for sale securities will provide cash runway well into the second half of 2020. 2019 is off to a strong start, and through the remainder of the year, we look forward to building on the momentum that we've established for our clinical programs, which enabled evaluation of IPI-549 in over 500 patients. We are being driven by the magnitude of unmet need for better treatment options for people with cancer and are proceeding with a great sense of urgency to bring this potentially transformative immuno-oncology therapy to patients. We look forward to updating you on our progress throughout the year. And at this time, we'll open up the call for questions. Sheree?

[Operator:]

[Operator Instruction] Our first question comes from Anupam Rama with JPMorgan.

[Unidentified Analyst:]

Hey guys, this is Matt on for Anupam, thanks so much for taking our question and congrats on the execution. So, just one from us. With MARIO-275 kicking off within the quarter, you've kind of talked about the benchmark for the response rate being 25% is population? So just wondering if you can help us orient around duration of response. Thank you very much.

[Adelene Perkins:]

Sure. And I'll turn that over to Sam, but I'll remind you that our focus with the MARIO-275 is really driven by the data that BMS generated with CheckMate 275 and our design of that trial mirrors that as much as possible, where they showed that patients with high levels of MDSCs did not do as well. And in our phase 1 data, we've shown that we reduced levels of MDSCs in the vast majority of patients. And so that underscores the strategic rationale, and Sam?

[Sam Agresta:]

Yeah, this is Sam Agresta. I don't know off the top of my head the duration of response from CheckMate 275. I think the PFS was between seven and eight months overall in the population but remember, MARIO-275 is designed slightly differently and that we're looking at a ratio of 2

[Unidentified Analyst:]

Okay, and then just to confirm the cut off of 20% I think for MDSC in MARIO-275 that's the same as before?

[Sam Agresta:]

Yes, it's very similar MARIO-275.

[Operator:]

Thank you. Our next question comes from Soumit Roy with JonesTrading.

[Soumit Roy:]

Good afternoon, everyone and congrats on a great progress you've made. Just a quick question on the expectations around the further updated second half of this year on MARIO-1. What -- so the [indiscernible] melanoma cohort, these are being very late line patients. So, what should we expect? So, our expectations are less focused on the response rate but more on potentially any translation data. So, what would we expect to see from that we can extrapolate to better understand when MARIO-275 reads out?

[Adelene Perkins:]

Thanks for the question, Soumit. So, what's important about MARIO-1 and the data that we've generated is it has informed six halves that we have going forward. Two of those are expansions within MARIO-1, so as you asked, you know, we were encouraged by early data from the melanoma cohort, so we increased that from 20 patients to 40 patients, and we were encouraged by activity in patients with triple negative breast cancer, so we expanded that. So we have two expansions within MARIO-1. And then the four settings that we're initiating this year in urothelial cancer with BMS, in triple negative breast cancer with both Roche Genentech and with Arcus and in renal cell with Roche Genentech have all been informed by MARIO-1. And what we will continue to do is as we will be completing the enrollment in MARIO-1 this year, and as those data mature to the extent that it informs an additional path forward. When we announce the initiation of a follow-on trial, we will share the data from MARIO-1 that underscores that. As you mentioned, given that we have done an expansion in melanoma and given that one of the important aspects of MARIO-1 is evaluating the effect of 549 in patients who have progressed on a checkpoint inhibitor as their immediate prior therapy that's one possible pass going forward. But it will all be data driven and tied to a future development.

[Soumit Roy:]

Another question on -- looking at the triple negative breast cancer and also the relapse of factory triple negative breast cancer, do you -- two years from now, how do you -- how do you visualize the treatment regimen will pan out across the different lines of therapy? Do you see -- sorry, not triple negative, I meant to say bladder cancer? Do you see a disease [indiscernible] coming in the front line or in second line before Opdivo plus 549 or how do you seek -- what do you see as the adoption bar to be two years from now, is it going to be response rate of 40% or is it going to be really 20-25% as we have seen with Opdivo monotherapy?

[Adelene Perkins:]

So, I'll start and then turn it over to Sam. You know, right now our focus is on MARIO-275 and we're very excited about that trial design and the potential to show that we can have better outcomes because of the -- our data that shows IPI-549 reduces MDSCs. That's in the second line in platinum refractory patients. With good data there, there's clearly the potential for us to move to the front line in bladder cancer, but right now, we see a great opportunity in the second line.

[Sam Agresta:]

Yeah, I think it's a great question, how -- I wish I could forecast two years in advance what will happen, but I would imagine that front, you know, if you follow the trends in other cancers, Checkpoint inhibitor therapy is moving into frontline with or without chemo and even adjuvant leaving space for other combinations in front line second line. So, really the options for MARIO-275 are -- do we go to frontline? Do we stick to I/O naive? Are there -- is there a subset of patients that could benefit even further than the entire cohort meaning the MDSC highs that we would move into multiple paths with. So, I think there are a lot of options still as the data readouts, as to where we would go with the 275 data.

[Adelene Perkins:]

And there's also you -- before you focus your question on bladder cancer, you know, there is an interesting strategy within our triple negative breast cancer where with Roche Genentech, they've just gotten approval on the frontline of Tecentriq together with Abraxane and we're adding on to that in the frontline. But with Arcus, we're also looking at relapse refractory setting in a regimen that doesn't include a Checkpoint inhibitor. So, we have strategies that could get us to both the front and the relapse refractory.

[Sam Agresta:]

And I think -- this is Sam, to add on to that, I think the -- if you -- if you look at the totality of the Genentech study, the Arcus study, and our MARIO-1 study, we will be able to show potentially the treatment through multiple lines of therapy and in at least one indication with something that IPI-549 that suppresses MDSC. MDSCs could be meaningful. So that could be an interesting read out. It's not -- it will be interesting to look at treatment through multiple lines in triple negative breast cancer and how that plays out.

[Operator:]

[Operator Instructions] Our next question comes from George Zavoico with B. Riley FBR.

[George Zavoico:]

Hi, everyone. Thanks for -- thanks for the update. Much appreciated. With regard to MARIO-275, it's a phase 2 trial, but do you envision this to be potentially registrational?

[Sam Agresta:]

I George, this is Sam. I think any study if it's well conducted could be registrational, really just depends on the data. My experience with the FDA, as a collaborator has been approvals in -- with first in human phase 1. So again, we've designed a way -- designed the study in a way that if the data is compelling, it can potentially be something that we talk to the FDA about. So, that is the goal.

[George Zavoico:]

Okay, and with regard to the high and low cut off for the beasts, as it words you describe them. Is that a fluid boundary? Because, honestly, there's a whole spectrum along there. How do you look at interpreting that data and perhaps expanding into one or the other or practically you would expand into the high? Is that a -- is that a potential strategy for MARIO-275?

[Jeff Kutok:]

George, this is Jeff. I can answer the question on the cut off. Cut off is fixed because we're stratified or randomizing patients, 2

[Sam Agresta:]

The development path, George, we have left it open to looking at both the highs and the lows, so we haven’t eliminated either group as far as the development path. So, we'll just have to look at the data. We did look at the 2

[George Zavoico:]

And are you using the checkpoint 275 cut off in MARIO-275 or is it slightly altered?

[Jeff Kutok:]

We're using the data from checkpoint 275 to help us with the cut off. In the CheckMate 275 retrospective study, they split the patients into tertiles; high, medium, and low. In our study, we're looking just at two groups; high and low. And that is informed by discussions with BMS with regards to making one cut off, not tertiles, three groups.

[George Zavoico:]

Alright. Yeah, that makes it a little bit easier to distribute the patients, I suppose. Okay, that's all for me. Thanks.

[Operator:]

Speakers, I’m showing no further questions in the queue. I'll turn the call back over to you for any closing remarks.

[Adelene Perkins:]

Thank you, Sheree. And again, thanks to everyone on the call. We're very excited about the opportunity we have with IPI-549 and we look forward to providing more updates in the coming months. Have a good evening everyone and thank you for joining us on today's call.

[Operator:]

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