U.S. Markets open in 1 hr 9 mins

Edited Transcript of AGIO earnings conference call or presentation 1-Nov-17 12:00pm GMT

Thomson Reuters StreetEvents

Q3 2017 Agios Pharmaceuticals Inc Earnings Call

Cambridge Nov 2, 2017 (Thomson StreetEvents) -- Edited Transcript of Agios Pharmaceuticals Inc earnings conference call or presentation Wednesday, November 1, 2017 at 12:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Andrew Hirsch

Agios Pharmaceuticals, Inc. - CFO

* Christopher Bowden

Agios Pharmaceuticals, Inc. - Chief Medical Officer

* David P. Schenkein

Agios Pharmaceuticals, Inc. - CEO, President & Director

* Kendra Adams

Agios Pharmaceuticals, Inc. - Senior Director of Investor & Public Relations

* Scott A. Biller

Agios Pharmaceuticals, Inc. - Chief Scientific Officer

================================================================================

Conference Call Participants

================================================================================

* Alethia Rene Young

Crédit Suisse AG, Research Division - Research Analyst

* Anupam Rama

JP Morgan Chase & Co, Research Division - VP and Analyst

* Eric Thomas Schmidt

Cowen and Company, LLC, Research Division - MD and Senior Research Analyst

* Jason Jakoby

Goldman Sachs Group Inc., Research Division - Research Analyst

* Kennen B. MacKay

RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research

* Michael Werner Schmidt

Leerink Partners LLC, Research Division - MD, Biotechnology and Research Analyst

* Yatin Suneja

SunTrust Robinson Humphrey, Inc., Research Division - Director and Senior Research Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning, and welcome to the Agios Third Quarter 2017 Conference Call. (Operator Instructions) Please be advised that this call is being recorded at Agios' request.

I would now like to turn the conference over to Kendra Adams, Senior Director, Investor and Public Relations.

--------------------------------------------------------------------------------

Kendra Adams, Agios Pharmaceuticals, Inc. - Senior Director of Investor & Public Relations [2]

--------------------------------------------------------------------------------

Thank you, Shannon. Good morning, everyone, and welcome to Agios Third Quarter 2017 Conference Call. You can access slides for today's call by going to the Investors section of our website, agios.com. With me on the call today are Dr. David Schenkein, our Chief Executive Officer, who will review key business updates and milestones for 2017; Dr. Chris Bowden, our Chief Medical Officer, who will provide an update on our clinical development activities; Andrew Hirsch, our Chief Financial Officer, who will summarize Agios third quarter 2017 financial results; and Dr. Scott Biller, our Chief Scientific Officer, who'll join for Q&A.

Before we get started, I'd like to remind everyone that statements we make on this call will include forward-looking statements. Actual events and 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 most recent Form 10-Q filed with the SEC and any other filings that we make with the SEC. 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.

With that, I'll turn the call over to David.

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [3]

--------------------------------------------------------------------------------

Thanks, Kendra. Good morning, everybody and thanks for joining us today. Our third quarter accomplishments demonstrated focused execution across our IDH and PKR development programs as well as IND preparations for AG-270, our most advanced research program. We're on track to achieve all of our remaining 2017 milestones, including the NDA submission for our wholly-owned IDH1 inhibitor, ivosidenib. The August approval and launch of IDHIFA for patients with IDH2-mutant relapsed/refractory AML validates our precision medicine approach and completes the speed component of our speed and breadth strategy for IDHIFA. Our team is incorporating important learnings from the IDHIFA regulatory review process into the ivosidenib NDA, including a combined CR/CRh endpoint and transfusion data. Next month at the American Society of Hematology meeting in Atlanta, we will present new data in relapsed/refractory AML patients from the expansion cohort of the Phase I trial that support the NDA.

In addition, we are excited to share ivosidenib and enasidenib frontline AML combination data for the first time at ASH. Early data from these Phase I trials reinforce ongoing efforts at Agios and Celgene to advance the IDH inhibitors into the newly diagnosed setting. In total, 3 Agios led abstracts from our IDH program and 1 from PKR have been accepted for presentation at ASH. The abstracts will be available online later this morning, and Chris will highlight key components of our planned presentations in his remarks.

Turning now to our ongoing development of AG-348 in pyruvate kinase deficiency. With the AG-348 pivotal design finalized, the team is focused on global operational preparations to begin enrolling patients in the first half of 2018. In addition, we are planning to initiate a global patient registry in pyruvate kinase deficiency to increase understanding of the long-term disease burden from this chronic anemia. Chris will outline our plans in further detail later in the call.

As we head into year-end, we remain on track to submit the IND for AG-270, our molecule for the potential treatment of MTAP-deleted tumors. The necessary preclinical work is complete and supportive of our IND submission. If accepted, AG-270 will represent the sixth IND to come from the Agios research labs in less than 9 years.

I'll now turn it over to Chris to provide an update on our clinical programs.

--------------------------------------------------------------------------------

Christopher Bowden, Agios Pharmaceuticals, Inc. - Chief Medical Officer [4]

--------------------------------------------------------------------------------

Thanks, David. I'm excited to highlight several important clinical data sets from our IDH and PKR programs that have been accepted for presentation at ASH next month. I'll start by reviewing the 3 ivosidenib abstracts.

First, updated clinical data from the Phase I trial in relapsed/refractory AML will be featured in an oral presentation. We are pleased that the single-agent ivosidenib data you will see in the abstracts this morning, are consistent with data we have presented on the IDH inhibitors to date. With significantly more patients and longer follow-up, ivosidenib continues to demonstrate durable remissions for IDH1-mutant patients with advanced AML. The efficacy analyses will focus on 125 relapsed/refractory AML patients from both the dose escalation and expansion portions of the Phase I trial. All 125 patients were treated at a dose of 500-milligrams once daily, with a minimum of 6 months follow-up prior to the May 2017 data cutoff. A combined CR/CRh endpoint, where h stands for hematological improvement, is included in our efficacy analyses in order to capture the clinical benefit patients are deriving outside of a pure CR.

These data form the core of the efficacy analysis for our planned NDA submission. At ASH, we will present additional data from the Phase I trial using the same May 2017 data cutoff. These include transfusion independence, overall survival, mutational burden data and preliminary efficacy and safety data in treatment-naïve AML in MDS patients. Both Phase 1 frontline trials combining ivosidenib or enasidenib with 7+3 or VIDAZA have also been accepted for oral presentations. The primary objective of these studies is to establish the safety and tolerability combining full dose ivosidenib or enasidenib with full dose 7+3 or VIDAZA. The early data is encouraging and validate our existing and planned late-stage efforts in the frontline settings.

As we disclosed earlier this year, we cleared the safety hurdle to combine full dose ivosidenib with azacitidine, which led us to initiate the AGILE Phase III trial comparing ivosidenib and VIDAZA to VIDAZA alone. We are also in the planning stages of a Phase III study combining ivosidenib and 7+3 for patients eligible for induction-consolidation chemotherapy. And we expect to update you on that study earlier next year.

Moving to the solid tumor setting. I will now review our ongoing work in cholangiocarcinoma and then provide an update on next steps for our glioma program. Translational data for ivosidenib in cholangiocarcinoma was presented last week at the AACR-NCI-EORTC triple meeting. The data demonstrated that treatment with ivosidenib induces morphologic and molecular changes in a subset of IDH1-mutant cholangiocarcinoma patients and appears to be associated with increased progression-free survival. We expect to further explore the biological and clinical significance of these findings in future studies. We continue to open new trial sites and enroll additional patients in the Phase III ClarIDHy study in previously treated IDH1-mutant cholangiocarcinoma and one that remains on track to complete in 2019.

Turning now to glioma. You have heard us mention this is an indication where we have the potential to help a large number of patients who are diagnosed at a relatively young age and currently rely on surgery, radiation and chemotherapy as treatment options. Today, we are sharing the next step for this program, a perioperative study, which I will describe shortly. The decision to conduct this study prior to designing a pivotal trial is based on the data we have to date on our 2 potential molecules in this indication: ivosidenib; and AG-881. The first AG-881 preclinical data were presented last week at the triple meeting and demonstrated the molecule can suppress 2HG in brain tissue in animal models. As we previously mentioned, we observed a dose-limiting toxicity with AG-881 in the Phase I solid tumor study. We have now completed additional dose expansion and exploration work and have selected a dose to bring forward. We plan to present the Phase I data in 2018.

For ivosidenib, updated Phase I glioma data will be presented at the SNO Meeting later this month and will focus on the subset of low-grade glioma patients with non-enhancing disease that we presented at last year's meeting with longer follow-up and additional volumetric imaging data. The data demonstrates that ivosidenib continues to be well-tolerated in this patient population, and the median treatment duration has increased meaningfully since our last update. In order to finalize our glioma pivotal trial plan, including molecule selection, we will conduct a perioperative or window study with both ivosidenib and AG-881 to further investigate their effects on brain tumor tissue. The study is designed with the following objectives: to determine the amount of drug penetration in the brain; to confirm the magnitude of IDH2 target engagement as measured by 2HG levels in brain tumor tissue; to assess the impact of IDH inhibition on differentiation in epigenetic profiles in tumor tissue; and to assess the safety of both molecules. The study will include approximately 45 low-grade glioma patients with progressive disease. Patients will be randomized to either ivosidenib or AG-881 and treated for 4 weeks prior to surgery and additional 5 patients will serve as a control arm.

We expect to initiate the study in the first half for 2018 and will provide additional details at the time. Celgene has informed us that they will not be sharing the cost for the AG-881 component of the perioperative study. Celgene continues to co-funding ongoing Phase I development. In conjunction with this work, we will also seek regulatory input next year that will help us design a pivotal trial in glioma.

I'll close by reviewing our progress in pyruvate kinase deficiency. Updated data on all 52 patients enrolled in the DRIVE PK study will be presented in a poster session at ASH. The ASH presentation will focus primarily on additional follow-up now that the 6-month core dosing period is complete for all patients. Updated data from the natural history study conducted by Boston Children's Hospital will also be at ASH. With the natural history study fully enrolled, our team has been preparing to launch a global patient registry to develop a greater understanding of the long-term clinical implication of pyruvate kinase deficiency, including natural history of this chronic anemia, current treatments and associated outcomes, variability of clinical care and disease burden. In addition, a patient-reported outcome tool will be implemented for the registry.

The pyruvate kinase disease registry is set to open in the first half of 2018 and will include approximately 60 sites in 20 countries. Adult and pediatric pyruvate kinase deficiency patients are eligible and will be followed for at least 2 years. We are also finalizing the trial protocols and patient recruitment efforts for the global AG-348 pivotal program. We will update you with additional details around timelines once these trials have initiated in the first half of next year.

I will now turn the call over to Andrew to cover our financials.

--------------------------------------------------------------------------------

Andrew Hirsch, Agios Pharmaceuticals, Inc. - CFO [5]

--------------------------------------------------------------------------------

Thanks, Chris. I'll start by summarizing our third quarter financial results, which you can find in the press release we issued this morning. More detail will be included in our 10-Q filing later today.

The IDHIFA launch is off to a strong start, and I'm pleased that for the first time, we're reporting revenue from an approved product that was discovered and developed by Agios.

Revenue for the third quarter of 2017 was $11.4 million, which includes $10.7 million of collaboration revenue and $715,000 of royalty revenue from net sales of IDHIFA. Revenue for the comparable period in 2016 was $9 million, all of which was collaboration revenue. The third quarter year-over-year increase in collaboration revenue was due to approximately $900,000 in reimbursement by Celgene for the Agios U.S. co-commercialization effort for IDHIFA and approximately $800,000 in progress against existing deliverables under our Celgene research collaboration.

Research and development expense during the third quarter of 2017 was $73 million compared to $61 million for the same period in 2016. The growth in R&D expense was primarily driven by increased costs related to the ivosidenib program, including NDA submission cost and clinical trial activity. Third quarter R&D expense also increased on a year-over-year basis as a result of IND enabling activities for AG-270 and ongoing research efforts across our discovery platform.

General and administrative expenses were $17.5 million for the third quarter of 2017, an increase of approximately $6 million from 2016, driven by increased expenses to support our growing commercial infrastructure for the launch of IDHIFA and potential launch of ivosidenib in 2018.

Turning to our cash position and runway guidance. We ended the third quarter with cash, cash equivalents and marketable securities of approximately $642 million. In our press release this morning, we reiterated our cash guidance with our current run rate through at least the end of 2019.

With that operator, please open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first question comes from Eric Schmidt with Cowen and Company.

--------------------------------------------------------------------------------

Eric Thomas Schmidt, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [2]

--------------------------------------------------------------------------------

Maybe just starting with the ASH updates on the frontline indications for IDHIFA and ivosidenib. What sort of response rate would you point us to as sort of standard of care response rate for either 7+3 or VIDAZA in these respective populations?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [3]

--------------------------------------------------------------------------------

David here. Thanks for your question. I'm going to have Chris walk you through that, and then we could talk further about it.

--------------------------------------------------------------------------------

Christopher Bowden, Agios Pharmaceuticals, Inc. - Chief Medical Officer [4]

--------------------------------------------------------------------------------

Eric, this is Chris Bowden here. I think when you think about 7+3 and that's in patients who are eligible for induction-consolidation therapy, you want to think about it in the perspective of relatively younger patients and older patients. And in the younger patients you can see CR rates is high, somewhere in the 60% to 70% range. I'll give you another reference, which is the midostaurin approval where you're adding midostaurin with 7+3 in a flip 3 positive population and there the CR rate was 54% for the 7+3 for the control group. VIDAZA, one of the best controls -- historical controls is a study called 001 study that was conducted in Europe, and there VIDAZA was compared to -- the investigators had a choice of standard of care to give and the CR rate there was 19.5%. So I think that gives a general sense in the 2 populations what one can expect with current standards. And we think that one of the reasons why we added 122, both of these approaches is we think there is a significant unmet need there and a way to improve outcomes in the purpose of the trials that we're going to be presenting are really to understand feasibility.

--------------------------------------------------------------------------------

Eric Thomas Schmidt, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [5]

--------------------------------------------------------------------------------

And at the time of the ASH meeting will you be able to talk about a path forward, including a registrational design?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [6]

--------------------------------------------------------------------------------

So Eric, as you know -- this is David, we have the ongoing VIDAZA Phase III study, the AGILE study, and certainly at ASH, we will have an event and we'll give you an update. As you know, we've said that, we're in the planning stages for a potential 7+3 registration study, and we'll try and give you an update there.

--------------------------------------------------------------------------------

Eric Thomas Schmidt, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [7]

--------------------------------------------------------------------------------

Okay. And maybe just one more question, if I may. Just on IDHIFA, I don't know what you're able to say given you are not controlling the commercialization. But can you speak to the Q3 sales figure? Did it include any stocking? Do you have a sense of the slope of the adoption curve going forward? And whether maybe you've learned anything that you're going to apply to ivosidenib in the future?

--------------------------------------------------------------------------------

Andrew Hirsch, Agios Pharmaceuticals, Inc. - CFO [8]

--------------------------------------------------------------------------------

Yes, Eric, this is Andrew. I'll take that one. So it's a little bit early in the launch to comment. As you probably pointed out, Celgene is the commercial leader. Really it'll be up to them to determine what to communicate, so we're not really going to communicate much around that. We'll be guided by their communications.

--------------------------------------------------------------------------------

Operator [9]

--------------------------------------------------------------------------------

Our next question comes from Anupam Rama with JPMorgan.

--------------------------------------------------------------------------------

Anupam Rama, JP Morgan Chase & Co, Research Division - VP and Analyst [10]

--------------------------------------------------------------------------------

With the pivotal trial designs for PKD program outline, can you talk a little bit about the JV factor through which you are initiating the trial? And if regulators have provided any sort of geographic breakdown in terms of enrollment that they'd like to see?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [11]

--------------------------------------------------------------------------------

Yes, Anupam, David here. As we've said on the last call or so, we're really pleased that the regulatory input we've had on both sides of the pond has allowed Chris and his team to complete the design of the 2 pivotal studies. And really at this point, as Chris said in his prepared comments, it's really operational now, where we're getting all the sites identified and all the operational aspects to open up 2 pivotal studies. I think it's fair to assume the regulators will not dictate what sites we open in what parts of the world. But these will both be global studies and enrolling patients around the world. So right now, the teams are crank and moving forward, and we're looking forward to get these opened as quickly as we can.

--------------------------------------------------------------------------------

Operator [12]

--------------------------------------------------------------------------------

Our next question comes from Kennen MacKay with RBC Capital Markets.

--------------------------------------------------------------------------------

Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [13]

--------------------------------------------------------------------------------

Congrats on the progress over the year as well as in the last couple of years and the recent launch of IDHIFA. Just wanted to, I guess, start quickly with a question on the sort of gating factor for launching a trial of IDHIFA in combination with VIDAZA. You've mentioned getting to sort of a safe and -- to really sort of a safe dose in combo with VIDAZA enabling the start of the Phase III trial there for ivosidenib. But is that the gating factor for IDHIFA as well?

--------------------------------------------------------------------------------

Andrew Hirsch, Agios Pharmaceuticals, Inc. - CFO [14]

--------------------------------------------------------------------------------

Hey, Kennen, it's Andrew. So if you recall, Celgene is now the lead with IDHIFA and they control all commercialization development. So that's really something that they'll have to comment on what their plans are.

--------------------------------------------------------------------------------

Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [15]

--------------------------------------------------------------------------------

Got it. Okay. And then thinking about the trial in combination with 7+3, again, is safety sort of the gating factor for starting the Phase III there? Are you waiting really to see more what kind of improvements you can have on top of the response rates and CR rates there? And then, also just wanted to get your perspective if there is any consideration for combining with Vyxeos in the frontline? And I know it's sort of an early launch from Jazz there, but they guided to sort of a $10 million to $20 million 2017 number for that product. And so it seems like it could be off to a pretty strong start, just wanted to get your perspective there.

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [16]

--------------------------------------------------------------------------------

Thanks, Kennen, David. I'll start with the first question and have Chris take on the Vyxeos and maybe other novel therapy questions. So there is no question that if you look historically at combining novel therapies with aggressive chemotherapy like 7+3 followed by consolidation, safety is clearly the key initial gating factor. And as you know, on our previous call, we announced that we had shown that we can combine full-dose ivosidenib with full-dose 7+3, and so that is an important gating factor. Again that is primarily the gating factor. There were a lot of operational issues. And so we'll give an update when we're ready to talk about how that moves forward. But if you look at the midostaurin trial, there was no impact on the CR rate with the addition of midostaurin, but you saw survival advantage. So safety really is critical. Obviously, we look at the early efficacy as well. And then the other important factor is given the compelling single-agent data we've seen with both ivosidenib and enasidenib, so now you're combining active 7+3 with another active drug and that makes us very optimistic about -- thinking about planning that study. Let me have Chris talk about novel combinations.

--------------------------------------------------------------------------------

Christopher Bowden, Agios Pharmaceuticals, Inc. - Chief Medical Officer [17]

--------------------------------------------------------------------------------

So Kennen, I think that the way I think about this is, we've talked about speed and breadth, and part 1 of breadth is standard of care combination approaches. Part 2 is now thinking about how we can combine IDH inhibitors with what is really exciting to us at Agios for patients, which is the number of new drugs that we see coming into the armamentarium for patients with AML, whether it's venetoclax or Vyxeos as you mentioned, midostaurin now. So that's going to be really interesting challenge for us. And we're certainly thinking about various ways of how we approach this both from not just a clinical development scenario, but also in terms of how you operationalize the trials because you can do these from investigator-sponsored trials. You can work with the cooperatives groups. You can do company-sponsored studies. So these are the things that we're considering as we get ready to -- as we are in the planning stages of thinking about how to activate this phase of clinical development. So more to come there.

--------------------------------------------------------------------------------

Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [18]

--------------------------------------------------------------------------------

Got you. And if I can squeeze in just one more question on the perioperative glioma study. I guess this probably would solve some of the brain penetration challenges of AG-120, which historically could have given AG-881 sort of an advantage there. But I just wanted to hear a little bit more sort of the rationale for the head-to-head trial of AG-120 versus AG-881. Why not -- if you're paying for the trial, why not trial 120 essentially against the placebo there?

--------------------------------------------------------------------------------

Christopher Bowden, Agios Pharmaceuticals, Inc. - Chief Medical Officer [19]

--------------------------------------------------------------------------------

So Kennen, Chris again. I would think about this a little bit, if you will, about our cholangiocarcinoma data. So we've got over the years we presented safety and efficacy data and then recently -- initially, we presented a little bit of molecular data and then recently, we presented more molecular data at the triple meeting in cholangiocarcinoma. We like to do the same thing with both drugs in glioma. And it's not so easy to -- we can't measure 2HG in the plasma of patients with glioma. So in order to make a molecule selection, which is the important component, because we want to bring the best molecule forward that has the highest probability of improving outcomes for patients with the disease. So using a placebo of one drug, what might cause us to put one drug aside. So now AG-881 has been optimized for brain penetration clinically, we really want to understand the 2 drugs in the scenario of the clinical setting where we're going to test them ultimately in a pivotal trial. So that's why it's important to do that comparison to understand what their impacts are on 2HG epigenetic profiles and some of the other components that I spoke to in my remarks. Because I think that there is a lot of questions around brain penetration. And we really need to understand how 881 and 120 maybe differentiated from each other.

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [20]

--------------------------------------------------------------------------------

Kennen, let me just add one thing. So as Chris said in his prepared remarks, there will be some patients in that trial who are not getting either drug, that will be used essentially as control.

--------------------------------------------------------------------------------

Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [21]

--------------------------------------------------------------------------------

Got you, okay. And that's just IDH1-mutant patients? Or is IDH2-mutant patients eligible for the 881?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [22]

--------------------------------------------------------------------------------

It's 1 only, IDH1. That's the vast majority of patients who have glioma.

--------------------------------------------------------------------------------

Operator [23]

--------------------------------------------------------------------------------

Our next question comes from Alethia Young with Crédit Suisse.

--------------------------------------------------------------------------------

Alethia Rene Young, Crédit Suisse AG, Research Division - Research Analyst [24]

--------------------------------------------------------------------------------

Maybe two from me. Just can you talk a little bit about your expectations around PKD enrollment to get to 80 to 100 patients, maybe there's some sort of precedence we should think about. And then also on MTAP program, just curious kind of dive a little bit more into the scientific hypothesis around what tumors this should work in just so that we could kind of frame how to think about maybe over the next 12 to 18 months when you start to generate data from that program?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [25]

--------------------------------------------------------------------------------

Yes. So maybe I tackle the PKD because we really can't say too much about enrollment at this time obviously. And then I'll turn it over to Scott to talk about MTAP. Obviously, this is a rare disease. We have a lot of experience which DRIVE PK. The key initial factor is getting these sites around the world through the regulatory authorities in getting these sites open. Obviously, as Andrew has mentioned previously, we have colleagues now working for us around the world identifying patients. We have the natural history study. So we're going to do everything we can to enroll this as effectively as we can. But this is a rare disease, and we need to make sure that we find these patients. And we will do that. Scott, maybe you can talk little bit about MTAP.

--------------------------------------------------------------------------------

Scott A. Biller, Agios Pharmaceuticals, Inc. - Chief Scientific Officer [26]

--------------------------------------------------------------------------------

Sure. So the MTAP program is basically deleted tumors, tumors that have this gene deleted in both the alleles, and they're susceptible to the inhibitors we've created. And they're found in about 15% -- these deletions are found in about 15% of all tumors, not evenly distributed. For example, a very high percentage of glioblastoma has MTAP deletions. And some of the tumors we're very interested in is esophageal cancer, lung cancer, DLBCL as well as pancreatic cancer, they have a high percentage of deletions of MTAP. So we haven't discussed at all what the initial trials will look like. But suffice it to say, we will focus on -- only on patients that have this MTAP deletion in both alleles.

--------------------------------------------------------------------------------

Operator [27]

--------------------------------------------------------------------------------

Our next question comes from Terence Flynn with Goldman Sachs.

--------------------------------------------------------------------------------

Jason Jakoby, Goldman Sachs Group Inc., Research Division - Research Analyst [28]

--------------------------------------------------------------------------------

This is Jason Jakoby on for Terence. For the PKD program, can you talk a little bit about your plans to address the younger population? Is there a plan to take forward a lower dose of 348? Or maybe develop a second gen drug?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [29]

--------------------------------------------------------------------------------

Yes, thanks, Jason. David here. As we've talked about before, obviously, our first goal is to get AG-348 approved around the world for adults and that's the majority of the patients with this disease. But we do have a commitment to try and move this into pediatrics and help these children as well. As you know, in the pivotal study, we're exploring a much lower dose of AG-348 than we did in DRIVE PK. The initial dose is 1/10 of what we've used in DRIVE PK. And so we'll need to understand what the aromatase data looks like, which, as you know, is pretty mild in adults. And the question is, what will it look like if there's much lower does and will that allow us to move into pediatrics? If not, do we bring another molecule forward given the strengths we've had in our chemistry portfolio around this target. So more to come over time. But our focus right now is to get the pivotal studies up and running in adults.

--------------------------------------------------------------------------------

Jason Jakoby, Goldman Sachs Group Inc., Research Division - Research Analyst [30]

--------------------------------------------------------------------------------

All right. And then just a quick follow-up on the OpEx cadence. So with the IDHIFA launch, you have a little ramp in OpEx for maybe -- for this year. But is the 4Q OpEx run rate something that we could maybe use going forward for 2018?

--------------------------------------------------------------------------------

Andrew Hirsch, Agios Pharmaceuticals, Inc. - CFO [31]

--------------------------------------------------------------------------------

Yes, this is Andrew. I mean, we typically -- we haven't provided guidance. So I think we will, obviously, be expanding our commercial effort right now, where our size to just co-promote, which is about 1/3 of the field effort. When we move to launch ivosidenib obviously, we'll have complete ownership of that commercialization effort. So we would -- I would expect that to increase over 2018 when that comes into place.

--------------------------------------------------------------------------------

Operator [32]

--------------------------------------------------------------------------------

Our next question comes from Michael Schmidt with Leerink.

--------------------------------------------------------------------------------

Michael Werner Schmidt, Leerink Partners LLC, Research Division - MD, Biotechnology and Research Analyst [33]

--------------------------------------------------------------------------------

I just had one more on the Phase I trial of the IDH inhibitor in combination with 7+3 in AML. And I guess my question is, I was wondering if you could comment some more on the considerations around dosing? Just asking because the chemotherapy standard of care is a very complex dosing schedule including consolidation -- induction-consolidation maintenance phases, potential transplant. I was just wondering how you see the IDH inhibitors potentially used in combination. And what the Phase I trial result would tell you around that?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [34]

--------------------------------------------------------------------------------

So Michael, we -- as we've articulated before, our goal, and you will see that in the abstract shortly, was to combine full doses of the IDH inhibitors with full doses of 7+3 in consolidation. And the way the trial is designed, patients get both drugs for the induction with 7+3. Some patients, as you know, get a second induction. They stay on the IDH inhibitor. They go through their cycles of consolidation and then will go on a maintenance phase of their IDH inhibitor unless they go to transplant. And so our goal is to combine full doses of the IDH inhibitors with full doses of aggressive chemotherapy consolidation and maintenance.

--------------------------------------------------------------------------------

Michael Werner Schmidt, Leerink Partners LLC, Research Division - MD, Biotechnology and Research Analyst [35]

--------------------------------------------------------------------------------

And how should we think about potential treatment duration in the frontline setting?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [36]

--------------------------------------------------------------------------------

Well, obviously, it's too early to comment on that. But if you look at the protocol that we -- that Chris and his team designed, that you'll see the abstract for shortly, patients potentially are on drug depending on how many cycles of induction and consolidation they have. They may be on drug for between 1 and 2 years because of the maintenance phase and the variable length of induction-consolidation, et cetera. And then obviously, as we move forward to later stages of development, then Chris will articulate, when we're done, what the design looks like for late-stage trial.

--------------------------------------------------------------------------------

Operator [37]

--------------------------------------------------------------------------------

Our next question comes from Yatin Suneja with SunTrust.

--------------------------------------------------------------------------------

Yatin Suneja, SunTrust Robinson Humphrey, Inc., Research Division - Director and Senior Research Analyst [38]

--------------------------------------------------------------------------------

Maybe on the low-grade glioma, I think you mentioned you might seek for regulatory input maybe some time next year. So could you maybe tell us what sort of a bar you are looking to meet or maybe exceed before you could move into a pivotal. So what the expectations are? And I do have another one.

--------------------------------------------------------------------------------

Christopher Bowden, Agios Pharmaceuticals, Inc. - Chief Medical Officer [39]

--------------------------------------------------------------------------------

Yatin, it's Chris here. So it's a great question. And I guess, it's not just the question of the treatment effect you'd be looking at, but what are the endpoints. So when we engage with health authorities next year, it'll be a combination of things that we want to discuss. We want to show them the data that we have, what the forward plan looks like, outline the unmet need, and then have some discussions around trial designs and endpoints and get their feedback, because they'll be thinking about this disease much the same way we are from a clinical perspective. As we think there is a case to be made for a high unmet need, and there is some considerations in designing a trial given the relatively non-long natural history that we'll need to discuss with them. So more to come there. And I -- while I can't talk about the specifics of what we'll be doing in at this point, we know that those parameters of a high unmet need and a data -- considerable data set, we'll have to discuss with them what will be the things that will be on the table at the time.

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [40]

--------------------------------------------------------------------------------

And remember, Yatin, that we'll show more ivosidenib Phase I single-agent data at the SNO Meeting in San Francisco later this month.

--------------------------------------------------------------------------------

Yatin Suneja, SunTrust Robinson Humphrey, Inc., Research Division - Director and Senior Research Analyst [41]

--------------------------------------------------------------------------------

Got it. And then on ivosidenib, so the U.S. NDA is on track for later this year. How should we think about the European regulatory strategy? What the update is? Or when should we anticipate an update there? And how are you thinking or pursuing that? And maybe if you could comment on IDHIFA's similar perspective, if you could give on the European side as well?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [42]

--------------------------------------------------------------------------------

Yes. So obviously, we're really pleased. Chris and his team are getting ready. We're looking forward to submitting the NDA for ivosidenib by the end of the year and that's very much on track. As we've said earlier in the year, both Celgene and Agios are seeking European regulatory input and we've been doing that and that's an ongoing effort between the 2 organizations to crystallize the regulatory strategy. Obviously with the approval of IDHIFA, the full regulatory approval, and so we're encouraged and we look forward to the conversations in articulating to you when we completed those discussions with EU regulators about what the path forward is there. Obviously, the 2 options are filing on the same data set that we used for the U.S. regulators or whether we need to have additional data from later stage trial by Phase III trials. So more to come. We have to complete those discussions before we can talk about that with Celgene. I'm assuming we'll do the same.

--------------------------------------------------------------------------------

Yatin Suneja, SunTrust Robinson Humphrey, Inc., Research Division - Director and Senior Research Analyst [43]

--------------------------------------------------------------------------------

Got it. Maybe just one final question. On IDHIFA, could you -- on the commercial front, could you maybe comment on the gene panel testing that you -- the rates that you are seeing maybe at the community setting versus the academics? And then for, Andrew, are you going to disclose the royalty tiers at some point?

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [44]

--------------------------------------------------------------------------------

Yes. So let me just take the first question. I think, nothing specific on testing as it relates to IDHIFA that we can share. What we've said and what we expected is that the testing rates in the academic centers are meaningfully higher than the community and that's really proves to be the case. And that's really the focus of the field team where one of the focus is, is really improving that testing rate. In the community, as we pointed to, if you look at analogs like BRAF or ALK inhibitors where there is a contained diagnostic that typically takes 2 to 3 years to get those testing rates up to the 90% range. And so we'll work on that over the course of the next couple of years.

--------------------------------------------------------------------------------

Andrew Hirsch, Agios Pharmaceuticals, Inc. - CFO [45]

--------------------------------------------------------------------------------

As it relates to tiers, right now, we're not able to disclose the tiers, but as we kind of get closer to one, we'll likely to do that.

--------------------------------------------------------------------------------

Operator [46]

--------------------------------------------------------------------------------

I'm showing no further questions at this time. I'd like to turn the call back over to David Schenkein for closing remarks.

--------------------------------------------------------------------------------

David P. Schenkein, Agios Pharmaceuticals, Inc. - CEO, President & Director [47]

--------------------------------------------------------------------------------

Thank you. And we appreciate your support as we launch our first product to advance our late-stage pipeline and bring additional novel compounds from our productive research engine into the clinic. As always, I want to thank all the Agios employees and all the patients and their caregivers who've participated in our clinical trials. And we're looking forward to a very busy end of the year. And hope to see many of you at the ASH. And with that, that will conclude today's call.

--------------------------------------------------------------------------------

Operator [48]

--------------------------------------------------------------------------------

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