Infinity Pharmaceuticals, Inc.
Q3 2018 Earnings Call Transcript

Published: 6 Nov 2018

[Operator:]

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 third quarter 2018. My name is Crystal, and I'll be your operator for today's call. [Operator Instructions] Please be advised that this call is being recorded at Infinity's request. Now I would like to introduce your host for today's conference, Jayne Kauffman. Please go ahead.

[Jayne Kauffman:]

Thank you, Crystal, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our third quarter 2018 financial results. With me here today are Adelene Perkins, Chief Executive Officer; Larry Bloch, President; 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 operational plans and strategies and financial projection. 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 annual report on Form 10-Q for the third quarter of 2018 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'd like to turn the call over to Adelene.

[Adelene Perkins:]

Thanks, Jayne, and thanks to everyone for joining us today. We're excited to provide an update on Infinity's activities this quarter and on our plans for the remainder of this year as we approach key milestones for the company. We continue to make important progress with IPI-549, our first in class oral selective PI3-kinase-gamma inhibitor. By inhibiting PI3-kinase-gamma signaling within immunosuppressive macrophages and myeloid derived suppressor cells or MDSCs, IPI-549 plays a unique role in reprogramming them from a pro-tumor antitumor function, thus reducing immune suppression and increasing immune activation. Our robust MARIO-1 Phase 1b study contributes to the existing body of knowledge suggesting that macrophages and MDSCs play an important role in eliminating the effectiveness of many immunotherapies, including checkpoint inhibitors. We are currently evaluating IPI-549 in combination with nivolumab, a PD-1 immune checkpoint inhibitor in approximately 200 patients with advanced solid tumors. It is our hope that by advancing the development of IPI-549, we can work to address the unmet needs of patients who either do not respond to existing immunotherapies or who initially respond and ultimately relapse. As reported at ASCO, objective responses have been seen in patients with advanced solid tumors treated with IPI-549, both as a monotherapy and in combination with nivolumab. The clinical and translational data we have shared to date demonstrate that IPI-549 is well tolerated, clinically active and on mechanism with data from peripheral blood and paired tumor biopsies, indicating that IPI-549 reduces immune suppression and increases immune activation. These compelling data support the scientific rationale for the selection of our seven distinct cohorts in the combination expansion portion of our Phase 1b trial. Five cohorts are directed to patients for whom single-agent nivolumab is not expected to result in clinical activity. In the first three of these cohorts, we are seeking to reverse intrinsic or acquired resistance to checkpoint inhibitors by evaluating the combination in patients refractory to immediately prior checkpoint inhibitor therapy. These three cohorts are in patients with non-small cell lung cancer, melanoma and squamous cell carcinoma of the head and neck. The fourth cohort evaluates the combination in patients with triple negative breast cancer, a tumor type with intrinsic resistance to checkpoint inhibitor therapy. And the fifth cohort is in patients prospectively selected for high baseline blood level of MDSCs, which are associated with intrinsic or acquired resistance to checkpoint inhibitors. These five cohorts are each designed to confirm two key findings from our preclinical work. The first is that treatment with IPI-549 benefits patients known to be refractory to checkpoint inhibitors in settings where checkpoint inhibitor therapy has shown little to no activity. The second is that treatment with IPI-549 can help overcome acquired resistance to checkpoint blockade in patients that initially respond and ultimately relapse to a checkpoint inhibitor therapy. By design, these settings establish a very high bar for IPI-549 activity in patients for whom there is a significant unmet need. In addition, we are following signals of activity from our dose-escalations in patients with mesothelioma and adrenocortical cancer, two very difficult to treat solid tumor types in which we saw responses to IPI-549 as a monotherapy and in combination with nivolumab. We're pleased by the ongoing progress in these combination expansion cohorts, and we look forward to sharing an update at the Society for Immunotherapy of Cancer, or SITC, Annual Meeting this coming Saturday, where we've been accepted for a late-breaking poster presentation. These encouraging data support the expanded clinical development of IPI-549. This morning, we announced our plans to initiate a global randomized Phase 2 study of IPI-549 called MARIO-275. And approximately 150 checkpoint inhibitor naive patients with advanced urothelial cancer in collaboration with Bristol-Myers Squibb. We appreciate BMS' collaboration and support in advancing the development of IPI-549, and our shared efforts to improve treatment options for patients suffering from urothelial cancer. We also continue our work with Arcus Biosciences to investigate IPI-549 in two triple combination therapies in triple negative breast cancer and ovarian cancer. These are novel combinations, which include two first-in-class therapies with complementary mechanisms of action. We will be able to assess IPI-549's contribution to these triplet by comparing them to the data from the Arcus' doublets in the same patient population. We're also pleased to have Dr. Sam Agresta joining us on today's call. As a reminder, Sam joined us in August as our Chief Medical Officer, and brings to Infinity a wealth of experience in innovative oncology and precision medicine drug development from his past roles. Most recently, at Agios, Sam led the development of IDHIFA and TIBSOVO, both first-in-class orally available targeted medicines for cancer patients with AML harboring IDH mutations. Sam has already made tremendous contributions to our clinical development and regulatory affairs work, including working with BMS to finalize the Phase 2 study in urothelial cancer that we announced this morning. With that, I'll turn the call over to Sam.

[Sam Agresta:]

Thanks, Adelene. I first want to say that I'm so excited to be a part of this incredible team at Infinity and to work on IPI-549, a potentially transformative drug in immuno-oncology. I joined Infinity for many reasons, primarily because I was impressed by the quality of the science and the team's rigor and testing that in the clinic. In addition, I was impressed by the initial clinical and translational data that was presented earlier this year. What is unique about the Phase 1b study now underway is the high bar for signal detection that we have set. This allows for a clear assessment of IPI-549's activity in the trial. We are evaluating patients who are not responsive to checkpoint inhibitors, so that we can have a clear understanding of IPI-549's contribution to this combination therapy. For example, in several cohorts of this trial, we are evaluating the effectiveness of IPI-549 in combination with nivolumab in patients who are actively progressing on checkpoint inhibitors with the intention of resensitizing them. Here, the goal is not simply to see incremental improvements in response rates, but to see clinical activity in a setting where patients are progressing on checkpoint inhibitor therapy so that any observed responses are clinically meaningful. In other cohorts, we are evaluating the combination of IPI-549 and nivolumab in checkpoint inhibitor naive patients not expected to respond to nivolumab alone, such as patients with triple negative breast cancer. In addition, we have a biomarker defined cohort evaluating IPI-549 in combination with nivolumab in patients with high baseline levels of MDSCs, a biomarker that identifies patients who typically don't respond to checkpoint inhibitor therapies. In the context of this rigorous study design, Infinity's data percentage to date has shown meaningful clinical activity and a favorable safety profile, both as a monotherapy and in combination with nivolumab. In addition, this activity and the associated translational findings demonstrate that IPI-549 is working on mechanism and supports that we have achieved proof of concept. The totality of the data lays a strong foundation to advance IPI-549 into a broader phase of development, including the initiation of a randomized Phase 2 study in a checkpoint inhibitor naive study. This morning, we announced MARIO-275, a global randomized Phase 2 study to evaluate nivolumab plus IPI-549 following platinum-based therapy in approximately 150 checkpoint inhibitor naive advanced urothelial cancer patients. MARIO-275 is following the science observed in the CheckMate-275 study in which nivolumab was approved for use by the FDA as a single agent in advanced urothelial cancer based on durable responses. In exploratory analysis of the CheckMate-275 study, high levels of MDSCs were associated with a shorter overall survival in patients treated with nivolumab. And importantly, data from Infinity's MARIO-1 trial demonstrated a reduction in MDSC levels in a majority of patients treated with IPI-549. Based on these findings, MARIO-275 is intended to evaluate the benefit of adding IPI-549 to nivolumab compared to nivolumab alone in patients with advanced urothelial cancer. The hypothesis is that targeting the immunosuppressive MDSCs with IPI-549 will enhance the activity of nivolumab, particularly in the MDSC-high patients. The primary efficacy objective is overall response rate. In addition, we will evaluate response rate, progression-free survival and overall survival in subsets of patients with high and low baseline levels of MDSCs. I look forward to providing more details on this study design and the current MARIO-1 Phase 1 data at SITC at the end of the week. With that, again, I want to say I'm very excited to join Infinity, and I would like to turn the call over to Jeff.

[Jeff Kutok:]

Thanks, Sam. As Adelene and Sam have detailed, the remainder of this year will be an exciting time for Infinity. We continue to work to develop IPI-549 as a first and best-in-class drug candidate in the clinic, and at the same time, remain committed to optimizing our understanding of the biology of IPI-549, both as a monotherapy and in combination with both immune checkpoint inhibitors as well as other agents. By following science, we will further inform our plans for the future clinical development of IPI-549, later-stage trials and new scientific insights will come from two major sources. First, the in-depth analysis of translational data from our existing MARIO-1 study will further support us through the later-stage development of IPI-549. This has already led to the initiation of new trials that we plan to develop both independently and through strategic collaborations. Our translational findings in MARIO-1, which demonstrated a reduction in circulating MDSC levels has triggered us to initiate the MARIO-275 study that Sam just outlined. In data presented on exploratory studies from CheckMate-275 this past AACR, a median OS of overall survival of less than four months was observed in patients with urothelial cancer and high MDSCs treated with nivolumab compared to a median OS of 22 months in a similar patient population who had low levels of MDSCs. Given this association of reduced survival with high baseline MDSC levels and a Phase 1 data demonstrating the ability of IPI-549 to reduce MDSC levels, we're very optimistic that the addition of IPI-549 to nivolumab will result in improved activity in urothelial cancer, particularly in patients with high levels of MDSCs. We’re continuing to advance our collaboration with Arcus Biosciences investigating triple combinations of IPI-549 with Arcus' AB928, a dual adenosine receptor antagonist, AB122, Arcus' anti-PD-1 antibody and chemotherapy in triple negative breast cancer and ovarian cancer. We believe the effects of IPI-549 on targeting the myeloid compartment, we have seen in our Phase 1 patients, which has led to a reduction in immune suppression and increasing immune activation, will combine well with targeting the adenosine pathway, another independent mechanism that suppresses antitumor immune responses. This is especially true in the post chemotherapy setting, where high numbers of anti-tumor macrophages in MDSCs are seen, as well as very high levels of adenosine. The second source of exploration of IPI-549 biology comes from the numerous ongoing preclinical investigations we have. These preclinical studies include exploring the effectiveness of IPI-549 alone and in combination in tumors that are specifically associated with high levels of infiltrating immune suppressive macrophages and MDSCs. These studies may provide support for future trials in these macrophage-rich tumor types. Additionally, other preclinical collaborations are ongoing in a variety of tumor models to explore the combination of IPI-549 with other mechanisms of immune suppression or immune activation. These studies will establish the best targets to further and expand the clinical development of IPI-549 in a scientifically rational way. Our strategy is to follow the science and develop rigorous clinical trials, and we look forward to providing additional insights at SITC Annual Meeting this weekend and as preclinical studies mature. With that, I'll turn it over to Larry.

[Larry Bloch:]

Thank you, Jeff. We are very pleased with our progress to date and eager for the year ahead. Our consistent fiscal discipline ensures that we have the key resources in place to execute on the full IPI-549 development plans. At September 30, 2018, we had total cash, cash equivalents and available-for-sale securities of $42.2 million compared to $49.2 million at June 30, 2018. Revenue for the quarter was $22 million, all of which related to the amount due from Verastem for the approval by the U.S. FDA on September 24, 2018 of duvelisib, the treatment of adult patients with relapsed refractory chronic lymphocytic leukemia or a small lymphocytic lymphoma after at least two prior therapies, as well as adult patients with relapsed or refractory follicular lymphoma after at least two prior systemic therapies. We received the $22 million in cash on November 2. The cash as of September 30, 2018, did not include the $22 million duvelisib FDA approval milestone payment. Revenue for the prior year of $6 million was related to the amounts due from Verastem for the duo study being the prespecified criteria at completion. R&D expense for the third quarter 2018 was $5.4 million compared to $9.3 million for the same period in 2017. Decrease in R&D expense was largely related to the convertible note issued to Takeda in July 2017. General and administrative expense was $3.4 million for the third quarter 2018 compared to $4.5 million for the same period in 2017. The decrease in G&A expense was primarily due to reduction in stock compensation. Net income for the third quarter 2018 was $13.4 million, or a basic and diluted earnings per common share of $0.23 compared to net loss of $7.4 million or a basic and diluted loss per common share of $0.14 for the same period in 2017. Let me now finish by reviewing the key 2018 goals we set for ourselves at the beginning of this year, our execution against them and our goals for the remainder of 2018. Our IPI-549 objectives for the first half of the year would report data from the monotherapy expansion in combination dose escalation portions of our MARIO-1 Phase 1b trial, an initial data from the disease specific combination expansion cohorts of the same trial. We successfully met these objectives by reporting these data at ASCO in Q2 this year. Our objectives for the remainder of the year are to present additional data on the combination expansion portion of the trial. There will be an update to the initial data we shared at ASCO and to meet our 2018 financial goals, which we revised following the achievement of the Verastem FDA approval milestone. They're as follows

[Operator:]

Thank you. [Operator Instructions] And our first question comes from Jim Birchenough from Wells Fargo Securities. Your line is open.

[Joseph Civello:]

Hi, guys. It’s Joe on for Jim today. Maybe just two for me. First, can you provide any further detail on the collaboration with Bristol in terms of royalty rates for milestones? And maybe second on progress with the Arcus collaboration. When in 2019 should we expect first data for TNBC and ovarian?

[Adelene Perkins:]

Sure. Thanks Joe. The first, in terms of the relationship with Bristol-Myers Squibb, it's a relationship in which they're supplying us nivolumab for the study both for the treatment and the control arm which is a very significant contribution as that represents a significant share of the cost of the study. But it's not a license agreement in which there are rights or therefore milestones or royalties to IPI-549. It's part of a strategy that we've put in place to work in more of an arms-length way with several parties so that we are able to partner with both BMS and Arcus and get data to know which of the combinations with IPI-549 are most synergistic. What we've provided for guidance on the Arcus data is that there will be some data in 2019. We can't provide any more detail on that. But we will as we go into the new year.

[Joseph Civello:]

Great, thanks guys.

[Adelene Perkins:]

Thank you.

[Operator:]

Thank you. Our first question comes from Katherine Xu from William Blair. Your line is open.

[Unidentified Analyst:]

Hi, Infinity team. This is Roland on for Katherine. Congratulations on the progress. Could you talk about the rationale for choosing urothelial cancer first? And what additional indications you may look to add later? And additionally, can you provide any more detail on data that will be presented at conferences beyond SITC? Thank you.

[Adelene Perkins:]

Sure. So I'll turn it over first to Sam and then if Jeff wants to add anything on why we chose the urothelial cancer as we are always very data-driven and so with the data-driven decision. In terms of additional – before Sam answers that additional data presentations in 2019, we always have to wait until we submit and are accepted for presentation. What we would expect given the data that we'll have from MARIO-1 and – that we're presenting at SITC, that data is still maturing. And so we would expect to have an additional data presentation as that data matures in 2019. We just can't say where until we've submitted and had an abstract accepted. But let me go back to Sam in terms of the rationale for urothelial cancer.

[Sam Agresta:]

Yes, it's a good question. If you look at the sort of the rationale as to urothelial cancer. If you look at the data from BMS' CheckMate-275 study and most recently the data from AACR where they presented time-to-events outcomes with – based on MDSC levels, you'll see that patients with the highest levels of MDSCs show the poorest outcomes with – in terms of OS less than four months. So to that effects, CheckMate-275 is really a great benchmark for us with respect to what MARIO-1 is showing in that. In almost all patients, we see a reduction in MDSC level. So the compilation of those two pieces of data within, quite frankly, six months of work has led both BMS and Infinity to put together a great randomized study to look at what IPI-549 can add to nivolumab with regards to helping patients with urothelial cancer. Jeff, do you have anything to comment or add to that?

[Jeff Kutok:]

Yes. I mean it's a terrific data set that BMS and researchers at MD Anderson presented at AACR, provided this tremendous benchmark in urothelial cancer for us to follow up on. But the – there's nothing unique about the urothelial cancers with respect to MDSCs preventing or inhibiting responses to the checkpoint inhibitors. In fact, there is a considerable body of data to support that MDSCs can inhibit or decrease outcomes in patients with other cancer types, including melanoma, for instance. So we don't think that there's anything unique about urothelial cancers. There's this tremendous benchmark for us to work on – work against. But I think it opens up the potential for looking at a variety of different cancer types in patients with high MDSCs.

[Adelene Perkins:]

One thing that I would add that makes this an attractive clinical setting is that given the data from CheckMate-275 and the huge difference between the outcomes for patients with low and high levels of MDSCs, where the patients who had high MDSCs had a median overall survival of less than four months versus those with low MDSCs that had a median overall survival of 22 months, this is a trial for which we could have a data readout six months after the last patients enrolled on both – on a response rate and a time to progression or survival event. So that we're starting the trial in the first half of 2019. As we begin to enroll, we'll provide an update on expected enrollment. But it's attractive that we could have a data readout as quickly as six months after the completion of enrollment.

[Operator:]

Thank you. And our next question will come from Anupam Rama from J.P. Morgan. Your line is open.

[Tessa Romero:]

Hi, guys. This is Tessa on for Anupam this evening. Thank you for taking our questions and also congratulations on all the progress. Interested to hear anymore granularity on the scope of the combination data we will see this weekend at SITC, number of patients that we will have mature data for. I think you said you have enrolled about 37, range of duration of treatment and tumor type, should we expect only mesothelioma or other tumor types to be included? And then, maybe further relatedly and thinking about the benchmarks, how should we be thinking about a clinically meaningful response rate, maybe specifically in mesothelioma? And then maybe finally, what we should be looking for as a win scenario in terms of the translational data? Thanks so much, guys. Appreciate it.

[Adelene Perkins:]

Sure, Tessa. We're not able to speak to the specific data that we'll be presenting until the abstracts have been published. But what might be useful, and I'll turn it over to Sam, he can put the data that we will be sharing in the context of our two primary objectives from the MARIO-1 study.

[Sam Agresta:]

Right. So thank you for the question. So again, to put it in context and I'm not going to share the data. But the goals of the study is to show that, one, IPI-549 is safe and active. And focusing in on settings, where we can clearly discern that the clinical activity can be attributed to 549, and therefore, clinically meaningful responses. This includes monotherapy activity with 549, combination data with nivolumab, and the context of a very high bar, where in the combination expansion cohorts, the patients either have to be progressing on checkpoint inhibitors or intrinsically resistant to it. So the bar is high with regards to activity. The data is an early snapshot of the trial. The trial was still enrolling, not all patients have had their first scans. But still any activity that we see, given the high bar that we set, will be clinically meaningful given the rigor of the study. So we look forward to providing that for you. Importantly, based on the safety and activity that we're seeing today, both we are – we and BMS are confident in moving forward into a checkpoint naïve setting, i.e. earlier line of treatment with the MARIO-275 randomized studies – randomized study in urothelial cancer. So that's an important aspect of advancement based on data that we are seeing. The second objective of the study is to assess whether there are additional paths of development based on the combination expansion cohort, where we're testing whether 549 can literally reverse the acquired or intrinsic resistance to checkpoint inhibitions. That data is still evolving, and we're still – we'll have to wait and see what the next steps are with regards to that aspect of the study in the future.

[Tessa Romero:]

Okay, great. Thank you so much. Appreciate it guys. Looking forward to the data.

[Sam Agresta:]

Thank you.

[Operator:]

Thank you. And that does conclude our question-and-answer session for today's conference. I'd like to turn the conference back over to Adelene Perkins for any closing remarks.

[Adelene Perkins:]

Thank you, Crystal. We're very excited about the opportunity we have with IPI-549, and we look forward to updating everyone at SITC. Have a great day, and thank you again for joining us on today's call. Good night.

[Operator:]

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