Syros Pharmaceuticals, Inc.
Q3 2018 Earnings Call Transcript

Published: 3 Nov 2018

[Operator:]

Good morning, and welcome to the Syros Pharmaceuticals Third Quarter 2018 Financial Results Conference Call. [Operator Instructions] This call is being webcast live on the Investors & Media section of Syros’ website at www.syros.com. Please be advised that today’s call is being recorded. [Operator Instructions] At this time, I would like to turn the call over to Naomi Aoki, Vice President of Corporate Communications and Investor Relations at Syros.

[Naomi Aoki:]

Thank you. This morning we issued a press release with our third quarter 2018 financial results, along with upcoming milestones and recent accomplishments. This release is available on the Investors & Media section of Syros’ website at www.syros.com. We will begin the call with prepared remarks by Dr. Nancy Simonian, our Chief Executive Officer; Dr. David Roth, our Chief Medical Officer; Dr. Eric Olson, our Chief Scientific Officer; and Joe Ferra, our Chief Financial Officer. Then, we will open the call for questions. Dr. Jeremy Springhorn, our Chief Business Officer, is also on the call and will be available for Q&A. Before we begin, I would like to remind everyone that statements we make on this conference call will include forward-looking statements. Actual events or results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in the Risk Factors section of our annual report on Form 10-Q, as updated in our quarterly reports on Form 10-Q, and any other filings that we make with the SEC in the future. In addition, any forward-looking statements made on this call represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligation to update or revise any forward-looking statements. I would now like to turn the call over to Nancy.

[Dr. Nancy Simonian:]

Thanks, Naomi. Good morning, everyone, and thank you for joining us today. Syros continued to make great progress in the third quarter, marked by the successful accomplishment of two key 2018 objectives. First, we advanced SY-1365 into the expansion portion of our ongoing Phase I study opening cohorts to evaluate the safety and efficacy of 1365 as a single agent and in combination with standard of care therapies in multiple ovarian and breast cancer populations. Second, as we had announced in this morning’s press release, we named SY-5609 a selective and potent oral CDK7 inhibitor as our next development candidate. Together, these achievements speak to our core mission at Syros, leveraging our pioneering platform to develop medicines that control the expression of genes and provide profound benefit for patients. These accomplishments also speak to our belief in and commitment to CDK7 in inhibition as a potentially transformative new approach to treating many difficult to treat cancers. CDK7 inhibition disrupts 2 key processes that cancer cells use to survive and thrive

[Dr. David Roth:]

Thanks, Nancy, and good morning to everyone on the call. I’ll begin today with SY-1425, our first in class, selective RAR alpha agonist that is being evaluated in a Phase II trial as a combination agent for patients with AML and higher-risk MDS, who are positive for our RARA or IRF8 biomarkers. Specifically, we are evaluating 1425 in combination with azacitidine in newly diagnosed unfit AML patients; and with daratumumab in relapsed or refractory AML and higher-risk MDS patients. This clinical strategy to focus on 1425 as a combination agent is based on several factors

[Dr. Eric Olson:]

Thank you, David. Let me start by talking about our oral CDK7 inhibitor program. We set out during earlier phase of the company to create highly selective and potent CDK7 inhibitors that would be suitable for clinical development. And from the get-go, we explored various approaches, including molecules that work both via covalent and non-covalent mechanisms. We had early success getting highly selective molecules with a covalent IV-based approach, which led to 1365. Through this work, we gained additional insights into how to selectively drug CDK7, and we carry that into an oral CDK7 inhibitor program. As a result, we now have a suite of highly selective and potent oral CDK7 inhibitors, and we will be presenting data on these molecules, including the new development candidate for the first time in a presentation at the upcoming Triple Meeting. We selected SY-5609 as the development candidate from the suite of oral molecules based on a number of factors, including selectivity, potency, PK, PD, preclinical efficacy and tolerability. We believe the combination of these attributes make 5609 a strong candidate for clinical development, and we are currently advancing it into IND-enabling studies. Given the broad potential of CDK7 inhibition as a new class of medicine, we believe physicians and patients will seek options across multiple modalities and believe an oral molecule could serve as an important complement to an IV drug like 1365, as we seek to maximize the potential of CDK7 inhibition for patients and build an industry-leading franchise in this space. In a separate presentation at the Triple Meeting, we will highlight some of our ovarian cancer research from our platform. This work represents the largest ovarian cancer enhancer mapping effort to date. Using our platform, we profile super-enhancer landscapes in more than 100 primary tumor samples from ovarian cancer patients as well as in cell lines and patient-derived xenograft models. We then compared these super-enhancer profiles to non-cancer samples from ovarian and fallopian tube tissues. This work has led to the discovery of drug targets and patient segments that would not have been identifiable through conventional genetic sequencing. This work further demonstrates the power of our leading gene control platform to reveal important biological insights, with a promise to yield new approaches for treating cancers that have largely eluded other approaches. With that, I’d like to turn the call over to Joe to review our financial results for the third quarter. Joe?

[Joe Ferra:]

Thank you, Eric. Syros continues to have a robust financial position. Based on our current plans, we believe that our existing cash, cash equivalents and marketable securities will support our continued operations into 2020 allowing us to advance our ongoing clinical programs while continuing to invest in our earlier-stage pipeline and discovery engine. Now for our third quarter 2018 financial results. We ended the third quarter with $113.2 million in cash, cash equivalents and marketable securities. This compares with $72 million on December 31, 2017. We recognized $0.4 million of revenue from our ongoing collaboration with Incyte in the third quarter of 2018. We did not record any revenue for the same period in 2017. R&D expenses were $12.9 million, for the third quarter of 2018 as compared to $10.4 million for the same period in 2017. This increase was primarily due to an increase in 1365’s contract manufacturing costs and professional consulting fees in support for our clinical trials as well as increased employee-related expenses. G&A expenses were $3.9 million for the third quarter of 2018 as compared to $3.6 million for the same period in 2017. Finally, we reported a net loss for the third quarter of $15.7 million or $0.47 per share compared to a net loss of $13.8 million or $0.53 per share for the same period in 2017. With that, I will turn the call over to the operator for questions. Thank you very much.

[Operator:]

[Operator Instructions] Our first question comes from Phil Nadeau with Cowen and Company. Your line is open.

[Phil Nadeau:]

Good morning, thanks for taking my question. Just a couple on the upcoming meetings. So in the prepared remarks, I believe you said that as of today, you have 8 patients evaluable in the azacitidine combo for 1425 and 6 evaluable in the daratumumab combination. Are those the patient numbers that we should expect at ASH with the data presumably relatively seen so with those would likely be the evaluable patients included at the meeting?

[Dr. David Roth:]

Yes. So those are the patients that we have available as of this week, and we look forward to presenting the specific information at ASH. But that’s specifically what we have available at this time.

[Phil Nadeau:]

Got it. Okay. And then second on 1365, again, it sounds like for me your prepared remarks, when we look at the data in the oral presentation, we should really focus on PK, safety and PD target engagement rather than looking for responses given the broad and kind of random range of tumor types in the initial dose escalation?

[Dr. David Roth:]

Yes. I think you’ve got it correctly there. I mean, it’s a Phase I dose-escalation trial, and we’re going to be reporting on the safety, the PK, evidence of proof of mechanism, focused on target engagement and expression changes in gene expression. As you mentioned, yes, there are a wide range of tumor types. The protocol was opened to all histologies of cancer. And as with any typical dose-escalation trial, many of the patients, including the initially enrolled patients, are going to be dosed at low doses, which would be expected to be subtherapeutic. So our focus will be on the safety and then the other parameters you mentioned.

[Phil Nadeau:]

Got it. Okay. And then last question, I apologize, if you mentioned this. I missed it. When do you think the oral CDK7 could be in the clinic?

[Dr. Eric Olson:]

Yes, this is Eric. We’ve, as you know, we’ve just nominated it as a development candidate. And typically, these programs take 12 to 18 months to move from this stage to an IND. So we’ll be working as aggressively as possible to get to an R&D as quickly as possible.

[Operator:]

Our next question comes from Ted Tenthoff from Piper Jaffray.

[Ted Tenthoff:]

I want to particularly thank you for setting clear expectations going into these meetings coming up. My question would be, with respect to the ongoing enrollment in the expansion cohorts with 1365, how is that going, I know it just, kind of just started this summer. But when do you think we might be able to get some preliminary data from those? And I’m looking forward to seeing you at the upcoming meetings.

[Dr. David Roth:]

Yes. So to answer your question, we recently announced that we’ve just began enrolling in those cohorts. And at this time, it’s a little premature to project exactly when data would be reported from those cohort arms.

[Ted Tenthoff:]

That’s right. And then what would be next steps, again, not to actively keep putting things going forward too far. But what would be next steps and potential path forward for 1425?

[Dr. David Roth:]

So 1425 right now is in development in 2 combinations, each of which is distinct

[Operator:]

Thank you. [Operator Instructions] Our next question comes from Konstantinos Aprilakis with JMP Securities. Your line is open.

[Konstantinos Aprilakis:]

So last you discussed your pre-clinical efforts, you mentioned 3 potential programs you might pursue in oral CDK7 and CDK12/13, mAb-initiated I/O program. I’m just wondering if you could provide some insight into the decision to prioritize your oral CDK7 program and whether we can we assume read-through to the 1365 data generated thus far? Also who do you see as competitors in the oral CDK7 inhibitor space?

[Dr. Eric Olson:]

Yes, thanks. We’ve been excited about inhibiting CDK7 from the very beginning when we started the company. Based on the preclinical activity we saw and, with 1365 and moving that into the clinic, we became very bullish on this target and really accelerated our effort to identify an oral molecule, because we think it’s going to be a nice complement to 1365. In terms of other molecules in the clinic, we follow the space very, very closely, and we feel quite confident that we’ve got really attractive molecules to drive through the clinic and eventually in all patients.

[Konstantinos Aprilakis:]

And then maybe a quick one for 1425 sort of a continuation of the questions that have already been asked. So can you help us put these data into context what we’re expecting at ASH, sort of what are you guys thinking of in terms of the historic controls for the, at least for the azacitidine combo. I know dara is a little more difficult. And if I heard correctly in the prepared remarks, not all the patients are biomarker-positive, is that right? And was that intentionally done, maybe a sort of a type of control arm? A little more color there would be helpful.

[Dr. David Roth:]

Sure. Happy to provide more clarity on that. We recently started enrolling biomarker-negative patients with an eye toward using the data to support future development of the commercial companion diagnostic. And then with respect to our presentation at ASH, we’re really focused on the biomarker-positive patients because, as you know, the biomarker negatives are a separate and discrete cohort that was only recently initiated. And with respect to the context for the data, you’re right. It’s a little more challenging to project by now for the daratumumab, where one of the main things we’ll be looking for will be CD38 levels that will increase over time as well as the various clinical parameters. For aza, we’ll be benchmarking to the single-agent activity and seeing if we have improvements relative to that. Historically, in the newly diagnosed population, response rate can range somewhere between 18% and 25% with survival benefits coming up towards about 10 months, 10 to 12 months. So those will be the types of things we’ll look at. We will also be looking at things like time to response and other clinical activity measures that may give us insights into true combination synergy. So we look forward to giving you a more complete picture of what we understand at that time.

[Dr. Nancy Simonian:]

Let me just add that, as you know, earlier this year, we had an investor breakfast with a couple KOLs, Eytan Stein and Rachel Cook. And I think what was really clear at that discussion was the tremendous unmet medical need that still exists for patients with AML and higher-risk MDS, even despite recent approvals of drugs. And I think, for us, the key question is, do we have an active combination that looks better than azacitidine or daratumumab alone? And with a unique mechanism of action, a good tolerability profile, we think that there could be important advances in -- for treatment of these patients that desperately need additional new therapies, despite all the great advancements that have been made.

[Operator:]

Thank you. This concludes the Q&A session for today. I would like to turn the call to Nancy Simonian for final remarks.

[Dr. Nancy Simonian:]

Thank you, operator, and thank you all for your continued interest and support in Syros. I’d like to conclude today’s call by noting just how lucky we feel to be operating from a position of such R&D strength. Since our founding, we have worked hard to build a robust clinical and preclinical pipeline. In addition to advancing 1425, 1365, and now our oral CDK7 inhibitor, we have also generated a deep early-stage pipeline in cancer including I/O approaches and in monogenic diseases. The quality of our pipeline reinforces our confidence in the productivity of our platform, and provides a strong foundation for our longer-term growth into a fully integrated company with medicines that provide profound benefit for patients. I know I speak for our whole team when I say that we are energized and excited by the opportunities ahead. Thank you.

[Operator:]

Ladies and gentlemen, this concludes today’s conference. Thanks for your participation and have a wonderful day.