Infinity Pharmaceuticals, Inc.
Q3 2015 Earnings Call Transcript

Published: 6 Nov 2015

[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 of 2015. My name is Tanya, and I will 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. [Operator Instructions] 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 call, Ms. Jaren Madden, Senior Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

[Jaren Madden:]

Thank you, Tanya, and good morning, everyone. Welcome to today’s call to discuss our recent business progress and review our third quarter 2015 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer; Julian Adams, President of R&D; and Larry Bloch, EVP, Chief Financial Officer and Chief Business Officer. Following our remarks, we’ll open up the call for Q&A. The press release issued earlier today 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 milestones, the therapeutic potential of our product candidates and financial projections. It’s 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 Quarterly Report on Form 10-Q for the second quarter of 2015. 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 view. We may update the statements in the future, but are not taking on an obligation to do so. Now, I would like to turn the call over to Adelene.

[Adelene Perkins:]

Thanks, Jaren. Good afternoon, everyone, and thank you for joining us on today’s call. During the quarter, we continue to focus on advancing duvelisib, our dual inhibitor of PI3 kinase-delta and PI3 kinase-gamma. Duvelisib is the most advanced PI3 kinase-delta/gamma inhibitor in clinical development. And we expect it to play an important role in the future treatment of patients with hematologic malignancies. There are three components to our duvelisib development strategy. The first is to rapidly bring duvelisib to patients through our monotherapy registration focused study and relapsed/refractory indolent non-Hodgkin lymphoma or iNHL and relapsed/refractory chronic lymphocytic leukemia or CLL. The second is to improve upon chemotherapy and to bring chemo-free options to patients. And the third, our ultimate aspiration is to offer patients with hematologic malignancies the potential for a cure. With respect to building the foundation for duvelisib through our monotherapy registration focus study, we made important progress over the last quarter. In iNHL, this past September we announced the completion of enrollment in DYNAMO, our Phase 2 study in patients with refractory indolent non-Hodgkin lymphoma. As a result of enrollment completion we earned $130 million milestone, which we have since received from AbbVie, our global development and commercialization partner for duvelisib in oncology. We also recently received Fast Track designation for duvelisib for patients with follicular lymphoma, the most common form of iNHL, who have received at least two prior therapies. A Fast Track designation provides a number of benefit, including the ability to file a rolling submission and the potential to accelerate the regulatory review of our NDA. In CLL, DUO our Phase 3 study in patients with relapsed/refractory chronic lymphocytic leukemia is now more than 95% enrolled. We remain confident in our ability to complete enrollment this quarter. We also have a Fast Track designation for duvelisib for the treatment of patients with CLL who have received at least one prior therapy. These Fast Track designations underscore our belief and the potential of duvelisib to fulfill an unmet need while also providing us with additional opportunities to advance our regulatory filings and review. Julian will review additional studies directed to the second and third components of our duvelisib development strategy, designed to approve upon and replace chemotherapy and ultimately to achieve curative outcomes for patients. In September, we were very pleased to announce the expansion of our portfolio with a novel immuno-oncology development candidate IPI-549. Pre-clinical research suggests that IPI-549, they play an important role in anti-tumor immunity by selectively inhibiting PI3-kinase-gamma. We are on track to initiate a Phase 1 of IPI-549 in solid tumors in the first quarter of 2016, which represents an important extension of our oncology portfolio to include candidates directed to both hematologic malignancies and solid tumors. As we move closer to our goal of delivering novel medicine to patients we continue to build a talented team of Citizen-Owners in preparation for potential registration and launch. Last month, Bill Bertrand joined Infinity as Executive Vice President, General Counsel. Bill was most recently the General Counsel and Chief Operating Officer at Salix and before that was the General Counsel at MedImmune, where he played a key leadership role in transitioning MedImmune to a successful commercial organization. We also continue to expand our commercial capability to prepare for the potential launch of duvelisib. In this quarter, Leslie Tiransa [ph] joined Infinity as Vice President, Access Distribution Patient Services and Pricing. Leslie most recently served in a senior leadership role on Genzyme’s MS market access team and brings extensive experience in patient access, reimbursement and government affairs. In summary, we made important progress this quarter and expect to achieve significant milestones in the fourth quarter, advancing all three components of our duvelisib development strategy. Achievement of these milestones positions us for a transformational 2016 in which we expect to file for regulatory approval for duvelisib while advancing trials designed to approve upon and place chemo-therapy and to advance our pursuit of curative outcomes for patients. At the same time, we are building our portfolio as we move our immuno-oncology development candidate IPI-549 into the clinic and we’re continuing to build our team to realize our vision of brining important new medicines to patients. With that, I’ll turn the call over to Julian to review our clinical programs in more detail.

[Julian Adams:]

Thank you, Adelene. Our vision is to establish duvelisib as the best-in-class PI3-3-kinase inhibitor, with the ultimate goal of curing patients with hematologic malignancies in combination with other novel therapies, while minimizing or even obviating the need for chemo-therapy. We are advancing this vision with studies now underway and with clinical trials we expect to start by the end of the year that addresses the three components of our development strategy which Adelene reviewed. In indolent non-Hodgkin lymphoma we have made important progress with our first goal of bringing the duvelisib to relapsed/refractory patients. In September, we completed patient enrollment in DYNAMO, our single arm Phase 2 monotherapy study designed to evaluate safety and activity of duvelisib in approximately 120 patients with double refractory iNHL. The primary endpoint is overall response rate. We expect to report top find data for this study early in the third quarter of 2016. If the data are strong, we believe we will have a compelling rationale to seek an accelerated approval. As Adelene mentioned, we received Fast Track designation for duvelisib in patients with follicular lymphoma, which provides us with additional opportunities to advance our regulatory filing and review. The second component of our strategy in iNHL is to improve upon and replace chemotherapy. The BRAVURA study addresses the improved upon part of our development plan. This is a Phase 3 double-blind placebo controlled study in patients with relapsed iNHL and is expected to begin by the end of the year. This study is designed to evaluate the safety and efficacy of duvelisib plus rituxan and bendamustine, compared to placebo plus RB in approximately 600 patients with a two-to-one randomization in favor of the experimental treatment. The primary endpoint is progression free survival. Our FRESCO study addresses our goal of eliminating chemotherapy for certain patients and is also expected to begin this year. This is a Phase 2 study in approximately 200 patients with relapsed follicular lymphoma evaluating the safety and efficacy of duvelisib plus rituxan versus rituxan plus CHOP, a chemotherapy cocktail broadly used for the treatment of follicular lymphoma. The primary endpoint is progression-free survival. The FL patients we are enrolling in this study have a documented progression within 24 months after start of an alkylator based chemotherapy. Our recent study by GAZYVA had published in the Journal of Clinical Oncology reported that 22% of patients, experienced progression within two years upon initial diagnosis and treatment with R-CHOP. And that early progression is associated with short-term survival. Given the unique biological mechanism of action of Duvelisib, we are testing whether we can address and important medical need for these patients. CONTEMPO, another study design for evaluate chemotherapy regime is continuing to enroll. This is a Phase 1b/2 study, in treatment may particularly in pharma patient. This study is designed to evaluate the safety and activity of duvelisib plus Rituxan and duvelisib plus GAZYVA and next generation Rituxan. Turning to CLL, our Phase 3 DUO study represents the fast path trial of registration, and potential approval in this indication. DUO is Phase 3 randomized open label monotherapy study and approximately 300 relapsed/refractory patients and it’s design to evaluate the safety and efficacy of duvelisib compared to ofatumumab, an anti-CD20 antibody approved in the study. The primary endpoint for this study is progression-free survival. DUO is now over 95% enrolled and we remained confident in our ability to complete enrollment before the end of this year. While they have been significant advances in the treatment of CLL, there are still no cures. In particular, patients who relapse on ibrutinib therapy appear to have in more aggressive form of disease. And we believe duvelisib playing a treatment of this patient population. We have responded to the submerging need with SYNCHRONY, a Phase 1b study of DUO risk in combination with GAZYVA and patients with CLL was these has progressed following treatment with BTK inhibitor. Our vision for cure, includes the potential for DUO receipt to be administrated with other novel therapy. We expect our colleagues would happy initiate the first clinical study of duvelisib and venetoclax, a selective first-in-class selective BCL2 inhibitor before the end of the year. This Phase 1b/2 of duvelisib and venetoclax is design to evaluate the safety and activity of the combination. Our enthusiasm for the study is based on the synergy we’ve reported between these two agents in preclinical models. In our aspiration to seek it your, we are encouraged by data from a Phase 1b/2 investigator responsive study led by Dr. Matthew Davids at Dana-Farber Cancer Institute, testing duvelisib in combination with FCR and previously untreated and previously untreated younger patients with CLL. FCR remains the goal standard for this patient population, yet only about 20% of patients will achieve a complete response with minimal residual disease for MRD negativity in the bone marrow. While the patient numbers are small, we are encourage to see 100% overall response rate, and 89% MRD negativity reported in the bone marrow with duvelisib FCR combination. These data was reported for the first time of the IWCLL meeting this past September and we’ll be reviewed and updated at Roche next month. As of further preview of Roche data from preclinical and translational research conducted in collaboration with scientists in Dr. Nicholas Chiorazzi’s lab at The Feinstein Institute for Medical Research will be presented show a dual integration of PI3-kinase delta and gamma, with duvelisib blocks the ability of the human CLL cells to proliferate and surviving nice. Updating Phase 1 data from an investigator investigator-sponsored study led by Dr. Ian Flinn at Sarah Cannon Research Institute will also be presented. This study is evaluating duvelisib in combination with bendamustine and these data support our trials of duvelisib in combination with bendamustine and rituximab or mainly BRAVURA and FRESCO. Moving from duvelisib to our newest development candidate IPI-549, we are very excited about broadening our oncology portfolio into the treatment of solid tumors with new approach with immuno-oncology. While checkpoint inhibitors address tumor immune tolerant by activating T-Cell, the tumor microenvironment still remain a barrier to tumor immunity. IPI-549 or oral PI3-kinase gamma selective inhibitor, inhibits tumor-suppressive macrophages within the microenvironment, potentially enabling and enhance anti-tumor response. We are excited about the potential of 549 is monotherapy and also believe it potentiate the activity of checkpoint inhibitor. At the recent AACR immunotherapy conference in New York, we presented data demonstrating dose-dependent, single-agent, anti-tumor activity with IPI-549 in multiple solid tumor model, including murine models of lung, colon and breast cancer. Additionally, mice treated with 549 in combination with checkpoint inhibitors showed greater tumor growth inhibition than either treatment as a monotherapy. Tomorrow, Infinity researchers will review IPI-549 preclinical data at the AACR-NCI-EORTC international conference and molecular targets and cancer therapeutics, which is taken place here in Boston. We are all on track, who initiate the first clinical study IPI-549 early in 2016. This Phase 1 study is designed to evaluate the safety and activity in 549 and includes a dose escalation phase, testing 549 as monotherapy as well as in combination with an anti–PD-1 antibody therapy. Once those escalation phase is completed we are planning and expansion phase in patients with selected solid tumors, including non-small cell lung cancer and melanoma. Our hope is combination IPI-549 and checkpoint inhibitor to distinct mechanisms of action will enhance activity in solid tumors. In summary, 2015 is an important year for R&D programs. We are pleased with the progress we’ve made this quarter and look forward to sharing top line clinical data with you in 2016. With that, let me pass the call over to Larry.

[Lawrence Bloch:]

Thank you, Julian. I’ll now provide overview of our financial results for the third quarter of 2015. Total revenue during the third quarter was $90.7 million, this included a $75.2 million license fee associated with the $130 million milestone for DYNAMO enrollment completion, and $15.5 million in R&D services associated with collaboration with AbbVie. By comparison total revenue during the third quarter of 2014 was $160.6 million, all of which was related to licensing fees in R&D services associated with $275 million upfront fee from AbbVie. Turning to expenses, R&D expense for third quarter was $37.7 million, compared to $44.9 million the same period last year. The change was primarily due to $5 million option fee payment to Takeda in third quarter of 2014 as well as lower clinical development expenses for duvelisib. G&A expense for the quarter was $9.8 million, compared to $8 million for the same period last year. The increase in G&A expense was primarily related to the continued build-out of the company’s commercial capabilities and the functional support related to those activities. Net income for the quarter was $42.5 million, or a basic earnings per common share of $0.85 and a diluted earnings per common share of $0.84 in the same period last year, which we recognized the significant portion of $275 million of upfront payments from AbbVie. We reported net income of $103.2 million or basic earnings per common share of $2.08 and diluted earnings per common share of $2.03. As of September 30, 2015, we had total cash, cash equivalents and available-for-sale securities of $163 million compared to $199.5 million at June 30, 2015. At September 30, cash position is not included the $130 million milestone payment earned for completion of enrollment in DYNAMO, which AbbVie have paid in September. Including receive to $103 million milestone we continue to expect in 2015 with cash investment balance ranging between $230 million and $250 million. As remainder, we are eligible to receive up to $400 million, the additional payments for the achievement of development, regulatory and commercial milestones. And of this $400 million $235 million are related to milestones through the first commercial sale of duvelisib and are designed to fund Infinity’s continuing investment in the duvelisib development program. The 2015 financial guidance which provided a R&D day in October remains unchanged. In closing, with a committed team and a global strategic partner for duvelisib in oncology, parallel paths to registration in both indolent hodgkins and CLL, the potential to support regulatory filings in 2016, for our desire to potentially offer a cure to patients in IPI-549 positioned for the start of Phase 1 early next year, we are confident that we have the elements in place to make a meaningful difference in the lives of people with cancer. Now, we’ll open the call for Q&A. Operator?

[Operator:]

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

[Jue Judy Liu:]

Hi, good afternoon, this actually Judy Liu on for Mikey here at RBC. First of all, congratulations on the progress you’ve made this quarter and thanks for taking the question. First question is on your commentary with AbbVie, you said you’re planning to initiate the study by year-end. I was just wondering if you could give us an estimate of when you expect to have data for us and what kind of data you might be expecting. And also, could you remind us what indications you’re pursuing for that trial. Thanks.

[Julian Adams:]

Sure, first, I’d like to remind everyone that the combination of venetoclax and duvelisib, is a combination of two investigational drug. So it’s a very bold move by AbbVie and Infinity to take this pair of medicines into experimental trials prior to any approvals. We’ve been working very hard on the protocol and we think we’ve outlined an excellent protocol which has two components. First is a Phase 1B which assesses the pharmacokinetics and safety and drug tolerability of both drugs together to establish a dose pair that we could into a Phase 2 setting. In the Phase 2 setting we’ll test a broad range of hematologic malignancies. And we’re very encouraged that our AbbVie partners are moving ahead with this protocol.

[Jue Judy Liu:]

Thanks. Just to clarify that. So when do you think would be reasonable to expect an update on any potential data for that trial.

[Julian Adams:]

So a Phase 1B as you know is very dependent on analyzing pharmacokinetics. And it’s initially starting at low doses and escalating to a dose-pair that is then deemed acceptable. So there’s a - the 1B component is the slow element of this. But we’re proceeding as quickly as and safely as possible with safety being paramount for patients.

[Jue Judy Liu:]

Thank you.

[Operator:]

Your next question comes from the line of Anupam Rama with J.P. Morgan. Your line is open.

[Eric Joseph:]

Hi, guys, it’s Eric in for Anupam actually. I just had a quick question on the DYNAMO+R study. And I think at the Analyst Day you mentioned, you were saying kind of slower-than-expected recruitment due to some reluctance about the Rituxan alone arm. I’m just wondering maybe how you’re now thinking about timelines with the ability to fully accrue that study and whether you’d anticipate some impact in the new chemo comment - new chemo comparison trials coming online, also perhaps whether BRAVURA might actually also serve as a confirmatory study, because I don’t know. Thanks.

[Adelene Perkins:]

Thanks, Eric. We are going to have discussions with the FDA to determine if BRAVURA could serve as a confirmatory study. We have designed that as we mentioned at R&D Day with the advances in the treatment of follicular lymphoma and iNHL, we have found that DYNAMO+R is difficult to enroll, because rituxim is increasingly being used less a monotherapy. And so, the BRAVURA study, we think has the potential to enroll more quickly because of adding on to the existing standard of care with RV. And our hope is to show that we enhance the efficacy by adding on to the current standard of care.

[Eric Joseph:]

Okay. Great. Thanks for taking the question.

[Operator:]

Your next question comes from the line of Matthew Andrews with Wells Fargo Securities. Your line is open.

[Matthew Andrews:]

Hey, good evening. Thanks for the opportunity to ask a question. At your R&D Day in early October, you guided to the potential for DUO to be stopped early based on the preplanned interim PFS analysis. I was just curious what motivated you to provide that potential timeline considering you’ve said very little about the study itself, its initiation. Is there something with the long-term follow-up that has encouraged you to think that PFS will be superior compared over to ofatumumab? Thanks.

[Julian Adams:]

Well, at the outset, we wouldn’t have run the study if we didn’t believe the duvelisib would outperform ofatumumab, and as you know that with many Phase 3 studies there are planned interim analyses. However, I would point out this is an event driven trial since the endpoint is progression-free survival. So we’re accumulating events. We cannot predict we will have the requisite number of events to trigger the Independent Response Committee and an IBMC to review the data. And so an interim analysis is planned and the expectation is if there is overwhelming efficacy this trial could conceivably stop early. But we’re not making any projections into that. We’re blinded to the outcomes of these data.

[Matthew Andrews:]

Okay. Great. Thank you.

[Operator:]

[Operator Instructions] There are no further questions at this time. I turn the call back to Adelene for closing remarks.

[Adelene Perkins:]

Thank you, Tanya. Thanks, everyone, for joining us on the call today and for your support and be sure to attend our poster presentations upcoming at ASH. Have a good night.

[Operator:]

This concludes today’s conference call. You may now disconnect.