Infinity Pharmaceuticals, Inc.
Q4 2014 Earnings Call Transcript

Published: 25 Feb 2015

[Operator:]

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals Conference Call to discuss the Company's Year End 2014 Financial Results. My name is Candice, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. There will be question-and-answer session to follow. Please be advised that this call is being recorded at Infinity's request. At this time, I would like to introduce your host for today's conference, Ms. Jaren Madden, Director of Investor Relations and Corporation Communications at Infinity. Please go ahead.

[Jaren Madden:]

Thank you, Candice. And good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our full year 2014 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer; and Larry Bloch, Executive Vice President and Chief Financial Officer and Chief Business Officer. Julian Adams, our President of R&D, is traveling and unable to join us today. Following our remarks, we will open the call for Q&A. The press release issued earlier today details our results and is available on our website at www.infi.com. Please note that during this call, we may make forward-looking statements about our future expectations and plans, including clinical development milestones, the therapeutic potential of our product candidates and financial projections. It is possible that our actual results may differ materially from what we project today due to the considerations described in the Risk Factors section of the Form 10-Q of 2014. While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then current views. We may update the statements in the future, but are not taking on an obligation to do so. Now, I'd like to turn the call over to Adelene.

[Adelene Perkins:]

Thanks, Jaren. Good afternoon, everyone, and thank you for joining us. At Infinity, we are working to realize our vision of developing better treatments for patients with blood cancer. Our lead molecule duvelisib has demonstrated a high level of clinical activity across a broad range of hematologic malignancies. Entering 2015, we have four important pillars in place to help further advance our goal of bringing duvelisib to patients. These include

[Larry Bloch:]

Thanks, Adelene. We continue to be in a strong financial position to execute on our strategic development plan and to explore the broad potential of duvelisib. As part of our global collaboration with AbbVie to develop and commercialize duvelisib in oncology, we received an upfront payment of $275 million and are eligible to receive up to $530 million in additional payments for the achievement of development, regulatory, and commercial milestones. Of this $530 million in milestone payments, $405 million are related to milestones through the first commercial sale of duvelisib, including a $130 million milestone payment associated with the completion of patient enrollment in either DYNAMO or DUO. The remaining $275 million of the $405 million in potential regulatory filing and approval milestones to the first commercial sale are designed to fund Infinity's continuing investment in duvelisib development program up to commercialization. Now I'd like to provide an overview of our financial results for the fourth quarter and year-end 2014. December 31, 2014, Infinity had total cash investments of $333.2 million compared to $214.5 million at December 31, 2013, and $379.5 million at September 30, 2014. Revenue during 2014 was $165 million, which was composed of a one-time license fee of $159.1 million associated with the strategic collaboration with AbbVie and $5.9 million in R&D services. Infinity did not record any revenue in 2013. R&D expense for full-year 2014 was $143.6 million, compared to $99.8 million for 2013. The increase in R&D expenses in 2014 compared to 2013 was primarily due to higher clinical development expenses related to duvelisib. General and administrative expense was $29.3 million for the full-year 2014 and $27.9 million for the full-year 2013. Net loss for full-year 2014 was $17.4 million, or a basic and diluted loss per common share of $0.36, compared to $126.8 million, or a basic and diluted loss per common share of $2.64 for 2013. In January, we provided financial guidance for 2015 which remain unchanged. We set revenue for 2015 to range from $105 million to $125 million based upon the anticipation of the $130 million milestone payment for AbbVie associated with the completion of enrollment for the first occur of either DYNAMO or DUO. We set net loss for 2015 to range from $190 million to $210 million. And we expect to end 2015 with a yearend cash and investment balance ranging from $145 million to $165 million. This yearend cash investment forecast is based on the company's current upgrading plan and exclusive of any business development activities. Our financial strength is important and we are pleased to have a global strategic partnership designed to help fund development of duvelisib while also providing opportunity to accelerate and expand the development program. Registration enabling phase moving towards enrollment completion this year a validated path to regulatory approval and strong IP protection in 2030, we are well positioned to advance our vision of becoming a fully integrated biotech company that can deliver best in class medicine and making meaningful difference in patients' lives. With that we will open the call up for Q&A.

[Operator:]

[Operator Instructions] And our first question comes from the line of Michael Yee of RBC Capital Markets. Your line is now open.

[John Chung:]

Hi, thanks. This is John on behalf of Michael Yee. Just wondering if you could just provide a little more color on the pending combination study with venetoclax? Have you indicated the specifics, and also any details on whether it is in a sequence one after the other or used in combination together? And who makes the primary decision how these drugs are combined? Thanks.

[Adelene Perkins:]

So thanks, John. Important part about studying of combining duvelisib and venetoclax is that we've got strong preclinical data that we presented at AACR; the details of the exact clinical trial will disclose at the time of that trial is being started. And we are working collaboratively with AbbVie in designing the right trial; of course the first trial will be focused on safety. So that's our primary objective is demonstrating that the two drugs can be safely combined, and we are still working with them on exactly what that patient population will be and we will describe that as the trial gets started.

[John Chung:]

And also just on maybe the potential combination approaches, whether sequence or combined on top of each other?

[Adelene Perkins:]

Again, that's a detail that we will disclose at the time that trial is actually initiated.

[Operator:]

Thank you. And our next question comes from the line Mike King of JMP Securities. Your line is now open.

[Mike King:]

Thanks for taking the question guys and congrats on all the progress. Just a couple of quick detailed questions on some of the trials, I am just wondering in follicular and the combination with Gazyva since my recollection is Gazyva is only approved in conjunction with chlorambucil, how do we envision enrolling patients with newly diagnosed disease?

[Adelene Perkins:]

So I am not sure Mike I understand your question. The trials that we have is, as you said, a newly diagnosed disease, it is duvelisib patients will be enrolled either on duvelisib plus Gazyva or duvelisib plus Rituxan, and it will allow us to see which of these anti-CD 20s are better in this patient population, and then from that we will go forward and design the control trial. Right now, we are just assessing both of these two agents.

[Mike King:]

No. I understand, but Gazyva is only indicated for relapsed refractory setting. Isn't it with in combination with chlorambucil?

[Adelene Perkins:]

Yes. We don't need -- it doesn't need to have a label for the patient population that we are studying it now, no we are enrolling this trial now.

[Mike King:]

Okay, all right.

[Larry Bloch:]

We thought what was important about the study was there is interesting data about Gazyva and obviously a lot of data out there on Rituxan, but we really thought it to be rigorously data driven to basically have a head-to-head study to determine which is best in this patient population.

[Mike King:]

Right, okay. All right, thanks for the clarification on that. And then with regard to both the studies you have got, one study specifically for patients with CLL that relapsed after treatment with Imbruvica and then you also have -- the registration strategy in the relapsed refractory setting, I am just wondering if someone would -- how you differentiate the randomization to DUO versus -- I don't know if it has an acronym for the BTK failures, but how are you going to stratify those patients into one trial versus another?

[Adelene Perkins:]

So, the DUO trial, which is now enrolling is for relapsed refractory patients, who have not previously been treated with the BTK inhibitor, so there is a very clear delineation, those are non overlapping trials. And then the trial that we most recently announced is for patients who have already progressed on any BTK inhibitor, it doesn't have to be just ibrutinib, and they will be put on the duvelisib plus Gazyva.

[Mike King:]

Okay, and in that population, will you be undertaking genomic analyses to see what mutations they may have?

[Adelene Perkins:]

Absolutely, yes. We have very extensive translational medicine effort that we’re looking to understanding exactly which of those patients respond. As we have even in our Phase 1 data where we treated patients who have progressed on ibrutinib, we have extensively profiled those patients.

[Operator:]

Thank you. And our next question comes from the line of Jason Kantor of Credit Suisse. Your line now is open.

[Jason Kantor:]

Great. Can you hear me? So I just was curious on the DYNAMO study, you made the statements that you are hopeful that it is going to establish as kind of best in class. What do you think you need to show both in terms of safety and efficacy in order to feel like you hit that bogey?

[Adelene Perkins:]

Sure. So we have a benchmark now with the data that has most recently been presented on idelalesib, and we are encouraged by the Phase 1 data that we’ve generated which had higher overall response rate and higher complete response rate than has been reported, and so we think that gives us a cushion anywhere between what the response rate that we thought in our Phase 1 study and the response rate that were the basis for the approval of idelalesib, we think anything in that range on the efficacy and then anything that might show a better tolerated treatment profile.

[Jason Kantor:]

Right. I mean I guess given -- it is hard to compare trial to trial, different patients and all that, but do you think with these number of patients you have potentially power to say the lower end of your confidence interval could be above what's been seen for idelalesib to be able to more strongly make the case, but there could be superiority there given it is not a comparative study?

[Adelene Perkins:]

Yes, no. Jason, you are absolutely right. I mean we have to be very careful with trials that are not head to head. That we don't over extrapolate the data. I think it provides you general reference point of what we are looking for and with the design DYNAMO as a monotherapy single arm trial is reflective of the fact that there are no drug that have been -- have a full approval in this patient population. So it's still being that there are no fully proof treatment options for these patients and we need to show that there is a benefit over what would be the typical course of progression in those patients. But we are careful not to go too far on direct comparison across trials. What I can tell you is of course we power the study such that we are comfortable with the 120 patients we have, if we see the kind of response rate and complete response rate that we are hoping to see, it would be and we have the discussion with regulatory agencies that with the responses we hope to see it could be the basis for an accelerated approval.

[Jason Kantor:]

And then finally I think you guys mentioned that you are now planning to take the inflam [ph] program forward without a partner, could you speak to what sort of interest there might be out there for these assets of those indications? Thanks.

[Larry Bloch:]

This is Larry, Jason. So we are -- we have initiated some discussions at the conference beginning of the year and there is certainly interest that we have had inbound calls about in the same information and we think in this case probably the optimal way to for a partner that we want to have to perceive would be probably through the inhaled formulation routes to deliver it directly to lung [ph]

[Operator:]

Thank you. And our next question comes from the line of Anupam Rama of JPMorgan. Your line is now open.

[Eric Stein:]

Hey, guys, this is Eric in for Anupam. Can you hear me? Great, just wondering if there any updated thoughts on the potential development pack T -cell informant with duvelisib. I know you guys have mentioned attending a small T-cell forum last month, and just wondering if there is new -- anything new in your -- that could help shift off some potential path forward. And I have a follow up.

[Adelene Perkins:]

Yes. So thanks, Eric. You are right. We had contingent of the Infinity counsel team at the T- cell meeting in San Francisco recently and lots of interesting conversations with lots of investigators and lot of ideas, we are just not in a position yet to describe what that path forward will be.

[Larry Bloch:]

Yes. It will be bringing that feedback from the T-cell forum conference back to our joint development committee and in the context of our collaboration with AbbVie that would be the decision making for all additional trials.

[Eric Stein:]

Okay, great. And maybe kind of following on Mike's question about the BTK failure trial, just looking at the trial on clintrials.gov and some of the dosing information that's listed there is a little bit confusing with both 25 mg and 5 mg dose being listed. I am just wondering if it means that there is potential for patients to be possibly dose escalated above 25 mg BID. I am wondering if you can try and clarify that. Thanks.

[Adelene Perkins:]

The current plan is not to go with the 25 mg twice a day dose for duvelisib and the approved dose for Gazyva, so that's -- we don't currently have any plans to go above that.

[Operator:]

Thank you. And our next question comes from the line of Brian Klein of Stifel. Your line is now open.

[Brian Klein:]

Hi, guys, thank you. Adelene you highlighted the Phase 1 data in NHL. And just wondering if you think will have mature PFS and survival data available at this year's ASCO?

[Adelene Perkins:]

So we presented the Phase 1 data at ASH and that's for maturity of that dataset. When the study is completely finished we will have probably wrap up publication but we do not anticipate continuing to report on that data. We have gotten everything out of that we need to dictate the strategy going forward. And the next data that we plan to present in indolent non-Hodgkin lymphoma will be from the DYNAMO trial and we expect to have that data from DYNAMO at the end of this year.

[Brian Klein:]

Okay, great. And then just to follow up who is responsible for submitting the NDA and any sort of interactions with the FDA? Is it a joint process between you and AbbVie or just one or other company lead that effort? Thanks.

[Adelene Perkins:]

So Infinity is responsible for filing the NDA. Yes, at the same time we are working very collaboratively, we have great working group meetings and governance groups with AbbVie but Infinity is responsible for filing the NDA. AbbVie is responsible for filing the MAA outside the US. And our regulatory and other teams are working collaboratively on that effort.

[Operator:]

Thank you. And our next question comes from the line of Katherine Xu of William Blair. Your line is now open.

[Katherine Xu:]

Great and good afternoon. I am just wondering after the failure of duvelisib in asthma, RA and what sort of trigger the decision to discontinue IPI443 as well? And is it scientific or resource related type of decision? And another question for Larry, what are you going to do with the Deerfield financing at this moment?

[Larry Bloch:]

Sure. So first question I think Kath is regulated to the 443, that was up surely scientific data driven analysis, the data from asthma study and our RA study were getting input to our determination of the best path forward IPI443 and information and because we think that the best way to move forward is to inhale group now to get the type of response we saw the 25 mg dose in asthma but not with systematic route since we don't have inflammatory expertise nor we do intend to develop it. We think the best approach forward going now is to have a partner who already has these capabilities to take the 443 forward information. Your second question regarding Deerfield is that the Deerfield option is going to lapse because we think that there are alternative financing resources that we can tap in the future if and when we need them.

[Katherine Xu:]

Do you still believe that 443 is potentially advantageous over duvelisib?

[Adelene Perkins:]

No. 443 and duvelisib have very similar profiles of being inhibiting both the delta and gamma isoforms of PI3 kinase .We don't see the need to take two molecules with similar profiles forward in hemalignancies or oncology because we are really very pleased with what we are seeing with duvelisib. So we don't see a role for 443 in oncology. We really referring that forward in the events that we wanted to develop that in information I think our conclusion is that it is going to be require some more work and information because we believe that it will most likely require inhale delivery for asthma and that's not something that is in Infinity's core area of strength and so we believe it is better for our partner to develop it there. But we really like what we are seeing with duvelisib and oncology and we see no reasons for a second delta gamma in oncology.

[Katherine Xu:]

I understand that. I was referring to the auto- immune area whether that increased activity in 443 against gamma what really make a difference scientifically in the auto-immune disease?

[Larry Bloch:]

I understand.

[Adelene Perkins:]

Okay, I would say yes. We don't know. I mean that's something for our partner will have to determine and it is a combination of both is 443 better than duvelisib information and or would a different delivery route, in short that it would be more application in asthma, so that something our partner will determine.

[Operator:]

Thank you. [Operator Instructions] And our next question comes from the line of Eun Yang of Jefferies. Your line is now open.

[Eun Yang:]

Hi, thank you. Question on the regulatory side. So is it fair to assume that at least in the US, you do file for iNHL first for on accelerated basis and still that is one of the normal usual regulatory filing?

[Adelene Perkins:]

Yes. Our current plan is with -- to seek accelerated approval for the DYNAMO trial. We haven't yet guided on whether the relative timing of filing in iNHL for DYNAMO and CLL and DUO are but we will be moving both of those in filing on both of those as quickly as possible. But DYNAMO would be accelerated approval; DUO would be seeking full approval because it is randomized trial against obinutuzumab.

[Eun Yang:]

Okay. How long in the EU, the iNHL, the filing would be potentially you have to file for DYNAMO study or do you need have DYNAMO+R data in order to file?

[Adelene Perkins:]

So the driver of the filing in Europe will be the DUO study. And the way the approvals work in Europe, duvelisib and could be approved for both CLL and indolent on the basis of the DUO study.

[Eun Yang:]

I see, okay. And then last question is DYNAMO+R study they risk into the December last year, how long do they take to enroll all 400 patients?

[Adelene Perkins:]

Eun, we haven't yet provided guidance on the completion of enrollment in the DYNAMO+R study. What we typically do is the year in which we expect to complete enrollment we provide that in our guidance so that you can infer that we don't expect completion of the DYNAMO+R in 2015 and then in the year in which we think it will complete, it will be part of our guidance.

[Operator:]

Thank you. And our next question comes from the line of Mike King of JMP Securities. Your line is now open.

[Mike King:]

Thanks for taking the follow up. Can you hear me? Just a quick follow up question about -- sorry -- now it is gone out of my head, you know what if we can may talk offline because I have back in the queue and I forgo what --

[Larry Bloch:]

We will give you call back after.

[Operator:]

Thank you. And our next question comes from the line Michael Yee of RBC Capital Markets. Your line is now open.

[John Chung:]

Hi, thanks. This is John here again. Just one follow up. I am just thinking there is good chance you partner AbbVie -- reach the market first before duvelisib based on their data from the GP population, so just curious given they maybe out in the market with a price tag, how much would you ask for price of duvelisib and who make that decision? Is it a joint decision with AbbVie? Thanks.

[Adelene Perkins:]

Thanks, John. You tucked a little bit but I think I got the jest of the question. The way we structure our relationship with AbbVie is we hope that through our joint commercialization committees and joint committees that we will make decision collaboratively. We also did divide if there were dispute certain decisions that either party would have the equivalent of trump vote and so Infinity has the final decision making with respect to the pricing strategy for duvelisib. AbbVie has to leverage their contracting organization, they will be having a final say on any final contracting so we have gone through a number of important decisions and each of us has that final say where necessary. And on pricing strategy that belongs to Infinity.

[Operator:]

Thank you. And our next question comes from the line of Mike King of JMP Securities. Your line now is open.

[Mike King:]

It is a miracle, it came back to me.

[Larry Bloch:]

I didn't doubt you for a minute, Mike.

[Mike King:]

Yes, it is getting old stuff for the birds. Just wanted to ask you if we could get a sense of what the longest term on therapy now if you have got anybody on duvelisib? Sort of picks up on an earlier question about comparisons to idelalisib in terms of the GI talks they have seen and I am just wondering if you have enough of treatment experience with duvelisib to figure out if the side effect profile, the GI side effect profile is going to be any different?

[Adelene Perkins:]

Right. So with respect to the first question about what's the longest that someone has been on study, that would be the data that we had presented at ASH and so it is iNHL -- let's see where that data is, we had a patient that was out 32 months which was the longest patient on our Kaplan Meier curve and you can see obviously there are fewer patients that are out that long. We had 12 patients that were out to 20 months and to your question absolutely, we will learn more and the longest patients are on study in terms of the side effect profile were --as we've seen so far the AE sort of been reported our grade 1 grade 2 they are manageable so we are not seeing a safety signal but alarming at this point but of course that's a number one priority and we will continue to monitor that as we have more patients who have been on study for longer and particularly in the DYNAMO study where we just have larger group of patients.

[Operator:]

Thank you. And I am showing now further question at this time. I'd like to turn the conference back over to Ms. Perkins for any further remarks.

[Adelene Perkins:]

Well, thank you everyone for joining us today. And we look forward to talking with you throughout the rest of the year. Bye.

[Operator:]

Ladies and gentlemen, this concludes Infinity's conference. You may now disconnect. Have a great day everyone.