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Edited Transcript of EPZM earnings conference call or presentation 24-Feb-20 1:30pm GMT

Q4 2019 Epizyme Inc Earnings Call

Cambridge Mar 6, 2020 (Thomson StreetEvents) -- Edited Transcript of Epizyme Inc earnings conference call or presentation Monday, February 24, 2020 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Matthew E. Ros

Epizyme, Inc. - Chief Strategy & Business Officer

* Paolo Tombesi

Epizyme, Inc. - CFO

* Robert B. Bazemore

Epizyme, Inc. - President, CEO, Secretary & Director

* Shefali Agarwal

Epizyme, Inc. - Chief Medical Officer

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Conference Call Participants

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* David Neil Lebowitz

Morgan Stanley, Research Division - VP

* Leland James Gershell

Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst

* Lisong Ai

Cowen and Company, LLC, Research Division - Research Associate

* Michael Jonathan Yee

Jefferies LLC, Research Division - Equity Analyst

* Mohit Bansal

Citigroup Inc, Research Division - VP and Analyst

* Alicia Davis;THRUST Strategic Communications;Investor Relations

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Presentation

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Operator [1]

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Hello, and welcome to Epizyme's conference call. (Operator Instructions) Please be advised that this call is being recorded at Epizyme's request.

I would now like to turn the call over to Alicia Davis. You may begin.

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Alicia Davis;THRUST Strategic Communications;Investor Relations, [2]

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Thank you, and good morning. This morning, we issued a press release outlining recent progress and our fourth quarter and year-end 2019 financial results. The press release and slides, to which we'll refer, can be found on our website at epizyme.com.

On the call today is Rob Bazemore, CEO; Matt Ros, Chief Strategy and Business Officer; Dr. Shefali Agarwal, Chief Medical Officer; and Paolo Tombesi, Chief Financial Officer.

Today's discussion will include forward-looking statements related to Epizyme's current plans and expectations, which are subject to certain risks and uncertainties. Actual results may differ materially due to very important factors, including those described in the Risk Factors section of our most recent Form 10-Q and other SEC filings. These forward-looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date. We undertake no obligation to publicly update these statements.

Now let me turn the call to Rob.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [3]

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Thank you all for joining us today. 2020 is already off to an incredible start. We have successfully transitioned into a fully integrated biopharmaceutical company, commercializing our first product in the U.S. and look forward to a potential second approval later this year.

Our top priority is to maximize the clinical and commercial potential of TAZVERIK to further strengthen our ability to create long-term value. TAZVERIK is now the first and only FDA-approved treatment specifically indicated for epithelioid sarcoma patients, and the first and only approved EZH2 inhibitor on the market.

Within a week of approval, we were shipping drug to patients. And since then, we've seen verification of benefits and calls to EpizymeNOW not only for patients with ES, but also for patients with other INI1-negative tumors and with follicular lymphoma, or FL. This speaks to the unmet need in these diseases and the overall favorable profile of TAZVERIK as a new oncology treatment.

We have high expectations for the launch of TAZVERIK for ES. In evaluating our execution, we are particularly looking to see rapid adoption of TAZVERIK across all lines of ES treatment rapid conversion of ES patients who have been preidentified by physicians into prescriptions and an increase in the number of eligible patients as a result of educational efforts aimed at appropriate diagnosis of ES.

Our launch in ES allowed the build-out of a flexible and efficiently sized commercial infrastructure. It has established our presence in the oncology field and is now being scaled up to support the potential launch in FL given the recent acceptance of our FL NDA for filing.

As strategically intended, we were able to leverage modules from our ES NDA for our FL NDA, streamlining both the submission and the review. The FDA has granted TAZVERIK priority review for patients with relapsed or refractory FL, whose disease has progressed following 2 or more lines of systemic therapy. Importantly, the agency designated our application as a supplemental NDA, or sNDA, and granted an earlier-than-expected PDUFA date of June 18, 2020.

Given this timing, we intend to build on our commercial experience with ES to seamlessly launch TAZVERIK for FL upon approval and to achieve rapid market adoption among patients with relapsed or refractory disease. We've nearly completed our FL commercial expansion as well as our market research activities to understand the treatment landscape in order to optimally position TAZVERIK for use in these FL patients. A third line and later approval is only our starting point in FL, and we intend to quickly execute our clinical development plans to generate the data needed to support our goal of making TAZVERIK available to all FL patients in the future.

Our confirmatory trial is optimized to establish the benefit of TAZVERIK in the second-line setting, and it's open for enrollment. The study to evaluate TAZVERIK in the frontline setting, as well as a number of investigator-sponsored trials combining TAZVERIK with commonly used FL agents, will also begin this year and provide meaningful data across all treatment lines.

Based on our clinical and preclinical experience with tazemetostat and our extensive knowledge of EZH2 biology, we believe strongly in its potential to treat an even broader range of cancers than we have explored to date, providing multiple opportunities for label expansion. We are working with investigators and academic collaborators to advance a number of clinical studies for tazemetostat as a monotherapy and as a combination treatment for other hematological malignancies and solid tumors, where we believe it has the opportunity to win.

Today, we find ourselves at a key inflection point, with a successful transition to a commercial enterprise and a robust set of activities planned for the year ahead. I am very proud of how far we've come, and I'm excited for the future of this company.

I'll now turn it over to Matt to provide an update on how the TAZVERIK commercial launch is progressing. Matt?

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Matthew E. Ros, Epizyme, Inc. - Chief Strategy & Business Officer [4]

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Thanks, Rob. I'm delighted to share some early highlights from our commercial launch, which should translate well into the larger opportunity of an FL indication should we be approved. Our intention is to make TAZVERIK available to every appropriate patient in the United States. When we announced TAZVERIK's approval on January 23, we committed to making it available to ES patients within 10 days. Thanks to our great team effort, we completed this ahead of schedule, and our first patient received TAZVERIK on February 1.

In addition, TAZVERIK was added to the NCCN clinical practice treatment guidelines for soft tissue sarcomas, indicating consensus by NCCN that TAZVERIK is an appropriate treatment option for patients with ES. We are very pleased with this inclusion, and in particular, the speed at which the NCCN expert committee convened and recommended TAZVERIK be added to the treatment guidelines.

We estimate that there are about 800 patients in the United States diagnosed with ES, of which approximately 300 are eligible for TAZVERIK. It is a rare cancer that is not well known and is often misdiagnosed initially. A significant part of our commercialization strategy is to help educate physicians on ES, so that they may provide an accurate diagnosis earlier in the patient's journey. Through this effort, we expect to gain a greater understanding of the true prevalence of ES, which we believe is larger than the current estimates.

Our commercial success in ES is based largely on 3 key factors, supporting TAZVERIK's wide adoption by physicians as the standard of care for their patients, reaching all eligible patients and providing them and their prescribers a positive first experience with the brand and ensuring that patients have seamless access to TAZVERIK through our EpizymeNOW patient support program. It's early days into the launch, and we are pleased with the physician enthusiasm and desire to prescribe TAZVERIK so far. EpizymeNOW is fully active and has been facilitating patient access to new TAZVERIK prescriptions.

As we look ahead, there are a number of elements to how we will measure our commercial success, including physicians' adoption of TAZVERIK, lives covered with no barriers to access and time to prescription fill. To support these metrics, our customer-facing team is making a tremendous effort to generate demand and awareness for TAZVERIK; to identify and overcome barriers to treatment; and finally, to collaborate with large community provider networks to build educational partnerships on disease testing and create awareness of the availability of TAZVERIK.

In addition, we have established relationships with key national and regional payers and are striving to ensure formulary access without limitation. We have built a plan designed to ensure that all specialty pharmacy patients, upon receipt of a prescription for TAZVERIK, have their full benefits investigation completed and their prescription filled within 5 business days.

The design of our ES commercial launch strategy and the expertise of our team will enable us to quickly pivot to also support the commercialization efforts for TAZVERIK in FL. Follicular lymphoma is a slow-growing or indolent form of non-Hodgkin's lymphoma and accounts for 20% to 30% of all NHL cases. It is usually not considered to be curable, and patients can live for many years while going through multiple lines of treatment.

Approximately 14,000 patients are diagnosed annually in the United States. And the overwhelming majority of patients have advanced disease at diagnosis. While many patients will respond to their initial therapy, it will usually relapse. And the efficacy/toxicity trade-offs of different regimens are major clinical issues. We conservatively estimate that there are 10,000 to 12,000 patients with relapsed and refractory disease in the United States.

Our ultimate intention is to make TAZVERIK available to all FL patients, starting in the relapsed or refractory third line or later setting and then moving into earlier lines of treatment. We have conducted extensive market research with key opinion leaders and community-based practitioners to understand their perceptions and treatment decision-making process.

FL patients are typically diagnosed in their mid-60s. Once a patient progresses, treatment decisions are influenced by their age, co-morbidities, performance on previous regimens and their desire to preserve their quality of life. They face a difficult decision of potentially stopping further treatment and instead turning to palliative care.

The frustration and anxiety patients face are compounded by the limitations with today's available treatments. They can take something that's been previously prescribed, use an off-label agent or consider an approved therapy that requires proactive and intense side effect management due to black box warnings.

Our insights tell us that patients and physicians would value an alternative treatment with product attributes that demonstrate that it is efficacious, provides durable remissions and is safe and easy to take, offering them new hope. This is why we believe TAZVERIK is uniquely positioned for this indication and will be widely and rapidly accepted.

Operationally, we have initiated our FL launch readiness activities to ensure our field-based team is ready well in advance of our PDUFA date. Our sales leadership team is in place. And we have completed our hiring of our sales representatives, all of whom have significant depth and experience in oncology. We have an important year ahead, and I look forward to sharing more updates as we progress throughout the year.

I'll now turn the call over to Shefali to review our broader development efforts for tazemetostat. Shefali?

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Shefali Agarwal, Epizyme, Inc. - Chief Medical Officer [5]

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Thanks, Matt. The recent approval of TAZVERIK for ES, and the FDA's acceptance for filing of our FL sNDA are incredibly exciting. Successful execution of both our ES and FL programs is imperative.

For ES, this includes the ongoing global confirmatory trial in frontline ES as well as the post-marketing commitments. All of these studies are underway, and we expect to complete the safety portion and move in to the efficacy portion of our confirmatory study later this year. For FL, because many of the modules in our sNDA, including safety, were reviewed for ES, we anticipate this review will focus primarily on the clinical efficacy data.

The indication we submitted is for patients with relapsed or refractory FL who have received at least 2 prior lines of systemic therapy. The data from our Phase II trial demonstrated a treatment with TAZVERIK resulted in clinical benefit as assessed by both investigators and an independent review committee, and has shown to be generally well tolerated in this patient population.

In addition to that study, we have multiple investigator-sponsored studies planned or underway to further support TAZVERIK's use in the third line or later setting by combining with commonly used FL treatments, including rituximab, venetoclax and BTK inhibitors.

We believe that the same profile that makes TAZVERIK attractive for patient in third line setting also make it attractive for patients in earlier settings. We have thoughtfully designed our ongoing global confirmatory trial to compare TAZVERIK plus R-squared versus placebo plus R-squared for patients in the second-line setting.

The study design is supported by data, including the clinical benefit demonstrated by TAZVERIK as monotherapy in relapse or refractory FL, the mechanistic rationale for combining TAZVERIK and R-squared, the preclinical evidence suggesting synergy between TAZVERIK and Revlimid and the activity of TAZVERIK when combined with R-CHOP in our ongoing DLBCL trial.

In addition, we intend to enroll patients who are refractory to Rituxan in their first-line regimen, a population in which we have observed activity in our Phase II trial. Further, we have designed the study to include a maintenance therapy state, allowing us to study the effect of continued treatment on extended progression-free survival and have implemented an adaptive design to help understand the treatment effect early on through interim assessment and adjust the trial based on how TAZVERIK is performing.

For all these reasons, we are confident that this combination and trial are optimally positioned, and if successful, will support full approval and a label in second-line FL. We are actively screening patients in the safety run-in portion of the trial, which we expect to complete this year. To support our intent to demonstrate benefit in the front-line setting, we are expanding our trial combining TAZVERIK with R-CHOP in newly diagnosed high-risk DLBCL patients to also include high-risk FL patients.

Beyond ES and FL, the clinical expansion of tazemetostat is a central effort this year, which we will execute through both in-house and collaborative efforts. We know that EZH2 plays a role in many cancers and have conducted a comprehensive analysis to identify patient populations and treatment setting, where we believe we can demonstrate benefit with tazemetostat.

There are 4 tumor types where we see the greatest opportunity, all of which are based on strong scientific rationale and the need for new, effective and safe treatment options. The first is in hematological malignancies, particularly lymphomas and B-cell malignancies, such as DLBCL, CLL and CML because of the role EZH2 plays in B-cell biology. Regardless of the oncogenic mutations, these cancer cells are governed by EZH2 expression, which enables their growth and proliferation. By inhibiting EZH2, we believe we can inhibit tumor proliferation, leading to antitumor activity as seen in FL patients with wild-type EZH2.

The next area of focus is in mutationally defined solid tumors, such as chordoma, melanoma and tumor with a SWI/SNF alternation or other mutations. In these tumors, a loss of certain proteins or the presence of certain mutations can result in abnormal EZH2 activity or exaggerated dependence on EZH2, which leads to cancer cell growth. By inhibiting EZH2 with tazemetostat, we believe we can inhibit that abnormal function, directly restoring cells to their natural state.

The third type is solid tumors that are resistant to chemotherapy, such a triple-negative breast, small-cell lung, ovarian cancers and mesothelioma. When chemo is given, DNA becomes damaged, resulting in abnormal or overactive EZH2 activity, which is involved in the transcription and reprogramming, that leads to chemo resistance and increased cancer cell survival and growth.

By treating with an EZH2 inhibitor, we believe we can resensitize cells to chemotherapy. We also know that EZH2 plays a role in the resistance to PARP inhibitors. When PARP inhibitors are given, DNA is damaged, which leads to increased EZH2 activity and limits the responsiveness to PARP inhibitor. By blocking EZH2 with tazemetostat, we believe we can also resensitize tumors to a PARP inhibition.

The fourth area for tazemetostat development is in tumors where EZH2 inhibition may augment response to immuno-oncology treatments. Preclinical data suggests tazemetostat may enhance anti-tumor immune response by interfering with multiple EZH2 functions in the cell. By inhibiting EZH2, we can influence biological activity in the tumor microenvironment, which could enable tumors to be more sensitive or resensitized to immune-oncology therapy.

This life cycle development of tazemetostat is strategic to the future value creation of Epizyme. Today, we have 12 clinical investigations underway, which include a global multicenter randomized Phase Ib/II trial, evaluating tazemetostat in combination with enzalutamide or abiraterone plus prednisone in chemo-naive patients with metastatic castration-resistant prostate cancer.

We plan to have additional 4 studies up and running this year, including the planned combination trial with a PARP inhibitor following completion of preclinical work that will guide the design of the study and selection of which PARP inhibitor we'll use.

These are strong preclinical and clinical data supporting the role EZH2 plays in all 4 of these tumor types, and we believe tazemetostat has an opportunity to meaningfully address these areas for patients. We look forward to providing an update on these studies as the year progresses.

I now turn the call over to Paolo to review our financials.

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Paolo Tombesi, Epizyme, Inc. - CFO [6]

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Thanks, Shefali, and good morning, everyone. Earlier today, we issued a press release with both our fourth quarter and full year 2019 financial results. So I will cover just a few highlights.

Throughout 2019, we utilized a number of vehicles to bolster our cash position to ensure we maintain adequate funding to support the full breadth of [exciting] opportunities we have just shared, but also supporting the growth of our pipeline and our organization. This included an equity raise of $172.5 million in March of 2019, followed by funding agreements with Royalty Pharma executed in November.

Royalty Pharma conducted deep due diligence before making an upfront equity investment of $100 million, along with other options. Following these raises and with a diligent focus on financial discipline, we started 2020 in a very strong cash position with $381 million in cash, cash equivalents and marketable securities as of December 31, 2019. Notably, this cash balance does not include additional $50 million raised through the exercise of the equity put option with Royalty Pharma executed in January. As a result, we started this year with more than $430 million of cash and cash equivalents.

Furthermore, under a separate agreement with Pharmakon Advisors, an affiliate of Royalty Pharma, we established a $70 million loan facility with a 3-year interest-only period intended to fund the 4 regulatory milestone we owe to Eisai. This loan is expandable by up to an additional $300 million if we receive approval of TAZVERIK in FL.

Turning to revenue, we will begin reporting product revenues in the first quarter since TAZVERIK was approved in January. We recognized $23.8 million in collaboration revenue in 2019, which reflects milestone payments achieved from Boehringer Ingelheim under our multi-target research collaboration, along with the commission of the development milestone from GlaxoSmithKline for its PRMT1 inhibitor, which was discovered by Epizyme.

Our GAAP operating expenses for 2019 were $201 million. Of that, R&D expenses were $132.6 million, which included the initiation of our 2 global confirmatory trials and early expansion of our tazemetostat development program. Note that this also includes $20 million in milestones paid to Eisai for the ES and FL NDA submissions, which were funded through the loan facility provided by Pharmakon.

SG&A expenses for 2019 were $68.3 million, which included the build-out of our infrastructure to support the launch and commercialization of TAZVERIK for the ES indication, as well as initial expansion to prepare for FL commercialization in the U.S. As we look ahead, we have a robust set of activities planned for 2020, which will impact our expenses for the year.

We expect GAAP operating expenses to be between $300 million and $330 million. This includes $50 million in milestone payments to Eisai for the TAZVERIK approval for ES and the anticipated approval for FL later this year. Importantly, the cash component of our operating expenses is expected to be between $235 million and $255 million, which is almost evenly split between R&D and SG&A.

The year-over-year increase in R&D expenses mainly reflects advancement of our 2 global confirmatory trials, our post-marketing commitment for ES and the greater life cycle expansion of tazemetostat. We anticipate that several of these studies will be sponsored by investigators or conducted through academic collaboration, which will enable us to partially offset our R&D expense while continuing to expand our tazemetostat program to maximize its value.

Our SG&A expenses in 2020 are expected to increase with the recent launch effort for ES, and the scale-up of the organization to support the anticipated launch and commercialization of TAZVERIK for FL. We anticipate that we'll also see an increase in our manufacturing expenses as a result of the commercial inventory discussed and the continued clinical drug supply for our ongoing studies.

We are well financed today, with cash and cash equivalents to support our current operating plans into at least 2022. This runway does not include any milestone that may be achieved through our research partners, any business development activities or any expansion of the credit facility with Pharmakon, all of which we planned opportunities to further bolster our balance sheet. We stand in a great financial position and do not see the need to pursue an equity financing in the foreseeable future.

With that, I'll pass the call back over to Rob.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [7]

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Thank you, Paolo. This is a remarkable time for Epizyme as we execute on our vision. 2020 is off to a roaring start and we have a number of exciting milestones this year, including 2 commercial launches of TAZVERIK in 2 distinct indications. We also have ambitious but deliberate expansion plans for tazemetostat as we believe strongly in its potential to meaningfully impact a broad range of cancers.

I'm confident in our ability to execute these goals so that we may continue to create meaningful new options for the patients we strive to serve and meaningful value for our shareholders.

Thank you all for joining us, and we'll now open the line for Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Mohit Bansal with Citi.

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Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [2]

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Congrats on the progress.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [3]

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Thank you, Mohit.

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Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [4]

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Great. So a couple of questions from my side. So on Slide #10, you do talk about -- you kind of divide the market in, kind of, first line, second line, how the opportunity would increase. Could you provide us some numbers behind -- for the third-line treatment market, which you'll have the initial label for in follicular lymphoma, how many patients are we talking about here? And what's your European strategy there as well?

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Matthew E. Ros, Epizyme, Inc. - Chief Strategy & Business Officer [5]

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Mohit, it's Matt. Thanks for the question. So as we've shared in the call, our goal, of course, is to make TAZVERIK available to all FL patients across all lines of treatment. In the first-line treatment setting, we know that there's roughly 14,000 patients that are newly diagnosed each year. And then for those patients that relapse or have refractory disease, the population is estimated to be between 10,000 and 12,000 patients.

With regard to the third-line opportunity with specific insights that we're continuing to refine as we go through our research, we think that, roughly, there's anywhere between roughly 6,000 patients that we think are reasonable in the context of the third-line space, which is consistent with consensus numbers that are out there right now.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [6]

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But we know, Mohit, that 10,000 to 12,000 number that we cite on the slide, those are patients who move beyond first-line therapy. We think most of these patients, ultimately, because this is a noncurable -- it's an incurable disease, most of those patients do eventually move through multiple rounds of therapies as they continue to relapse to the treatments that they are on.

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Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [7]

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Got it. And then in terms of European strategy, what are the plans there?

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Shefali Agarwal, Epizyme, Inc. - Chief Medical Officer [8]

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So in terms of -- Mohit, this is Shefali. In terms of the European strategy, we wanted to just align on the FDA. Now that we -- as you know, our NDA has been accepted as an sNDA with a PDUFA date of 18 June, we are engaging -- we are in the process in engaging the European regulatory authorities to understand our plan. We have conducted many advisory boards and also trying to understand the path forward for Europe.

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Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [9]

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Got it. And if I may ask one more, on the prostate cancer side, it seems like your competitors -- or Constellations at least has some data in prostate cancer. What we can learn from their data for your own program? As well as how do you -- are there any differences in molecules, which could be eventual differences? How are you thinking about that opportunity set?

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [10]

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Yes. So Mohit, I'll start with just talking about the differences between the molecules. They've not published a lot about the molecule that gives us insights into their PK and pharmacodynamics, things like that. One thing we know about the drug, just in terms of the differences, is just that it's a 3-times-a-day administration compared to twice a day. But I'll let Shefali talk a bit about the way we're doing this, there are specific things that we want to burn as we go through that will help and inform the next stage of the study. And Shefali can talk about what we're hoping to learn from the Phase I component before we move into the Phase II component.

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Shefali Agarwal, Epizyme, Inc. - Chief Medical Officer [11]

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Yes. So the Phase I portion is the safety portion. So we would be studying both abi and enzyme combination and trying to understand the dose. We will also be collecting biomarkers retrospectively and looking at PD markers to understand what specific population the combination would work. And once we have that understanding with preliminary efficacy and the biomarker, we would then move to the randomized portion. So that'll help us guide which population we want to go and have data in the second part of the randomized portion of the study.

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Operator [12]

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And we have a question from Michael Yee with Jefferies.

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Michael Jonathan Yee, Jefferies LLC, Research Division - Equity Analyst [13]

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Congrats on all the progress, guys. I know you're hard -- I know you guys are hard at work on the ES launch. And while that's important, obviously it's a bit of a pregame into follicular lymphoma. Assuming approval in follicular in a broad label, could you maybe talk to how the strategy evolves as you are mostly targeting sort of big cancer centers now where a lot of the ES patients are and then how that transitions or to what importance the transitions are, also to expanding to community centers perhaps where maybe there's a lot of follicular patients? So maybe just talk to the dynamic of a launch in follicular and sort of how it evolves, big centers versus communities.

And then one quick second question is just -- I know there's a lot of different indications you guys mentioned here. Of course, the last question was about prostate cancer. Can you maybe just describe, I guess, what data, if any, we could get this year? Is that Phase I prostate data? Is it DLBCL data? Maybe just what data we should pay attention to this year that we could get.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [14]

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Yes, certainly, Mike. So let me start at a very high level, then I'll let Matt talk about the commercial strategy and how that's going to evolve as we launch into FL, and then Shefali can speak to the data. This is a big year for the starting studies, but we'll also have a lot of big milestones along the way on those trials as they move from one stage to the other.

At really high level on the strategy, we're really pleased that the FDA accepted this follicular lymphoma NDA as an sNDA. Our plan had always been that with the ES NDA that a number of the modules would be cross-referenced such that the review for FL would be -- it would be a much more efficient review. And we had hoped that, that would help pull the review time in and help us achieve a launch earlier in follicular lymphoma. We've achieved exactly that with this now being officially named a supplemental NDA. So our PDUFA date is in June. So we're very pleased about that.

I think the other is, with the launch of ES, many of the programs that we put in place to help ensure patient access, that the patient's first experience with the drug is a positive one, those are all things we're doing right now. As you always expect with a launch, you find that there are a little bit -- there are hiccups and we're having the opportunity to solve for those and make sure everything is streamlined. So that by the time the FL indication is approved, if it's approved by the FDA, all of those things are in place. It then makes payer access so much easier and quicker if we get there. So that was always a part of the strategy of launching in epithelioid sarcoma first.

I'll let Matt talk about how the strategy changes and then how we're evolving the commercial organization, which was built from the beginning anticipating an FL launch, but how it now changes a bit as we prepare for the FL approval.

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Matthew E. Ros, Epizyme, Inc. - Chief Strategy & Business Officer [15]

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Sure. Mike, thanks for the question. As you rightfully point out, follicular lymphoma is a -- more of a community-based disease setting. So as we've talked in the past, the goal around ES was to have those institutions that were responsible for managing the epithelioid sarcoma patients, the field-based structure of around 19 people, were going to ultimately be pivoting this year to get ready for the FL market opportunity, given the fact that we'll be spending more time in the community practice setting.

With regard to that, we've completed all of our sales force hiring. So our sales organization will be expanding. We have actually completed all the hiring, and we're -- I'm happy to share that we've identified 47 very talented individuals that will be coming onboard to join our organization to be prepared well in advance of the PDUFA date. As Rob has referenced, that's in mid-June. But given the fact that we've been able to cross-reference the other modules as it relates to the ES filing, we want to be ready, which is why we've accelerated our FL preparation so these community-based -- the community-based field team will now be in a position to access the high-volume clinics in the community where these patients are treated.

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Shefali Agarwal, Epizyme, Inc. - Chief Medical Officer [16]

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And then, Mike, this is Shefali. Just answering your question in terms of the data. So our focus this year is definitely to execute on these trials, especially the confirmatory trials that we have to do as well as starting other ISTs and company-sponsored trials. Most of these trials, we will have the safety portion of the studies completed, including the 2 ES and FL studies in the second line as well as ISTs and the prostate study, so we expect to have data this year, and then moving on to the expansion portion of the efficacy part of the study. We have not guided on the presentation part. It'll be all dependent on when the study is complete and when it'll be submitted.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [17]

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So I think between all that, Mike, and the other part of the -- I'll sort of wrap it up with a higher-level strategic answer. All of what we described, both the work to expand our commercial organization to be prepared to launch in follicular lymphoma, the increase in the development activity for TAZVERIK, which we believe is very important, ultimately to adding to the value of the company but also value to patients, all of that is now baked into the runway that we've -- that Paolo described, which is at least into 2022. We were fortunate to be able to close on the put option that we had with Royalty Pharma just at the beginning of the year, this year, and so that extends our runway even further. And so our runway now is at least into 2022 as we become a commercial company.

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Operator [18]

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Our next question comes from David Lebowitz with Morgan Stanley.

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David Neil Lebowitz, Morgan Stanley, Research Division - VP [19]

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Piggybacking on the last question, when you look towards a potential launch in FL and going into the community setting, what type of trajectory should we be thinking of going into that population?

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Matthew E. Ros, Epizyme, Inc. - Chief Strategy & Business Officer [20]

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Well, I mean, I think the first thing to think about is, of course, the high level of unmet need that's related to the patients that are living with follicular lymphoma, and particularly in the relapsed and refractory setting, for those who have failed 2 prior lines of therapy. So roughly speaking, we can -- well, actually, we can actually say that it's a highly fragmented marketplace with about 1/3 of the patients that are actually being treated with PI3Ks. The balance of the treatment opportunity is with off-label therapies, recycled chemotherapies or, in fact, clinical trials.

So when you look at the profile of TAZVERIK, we are very confident that there will be meaningful and rapid adoption in the later-line setting. Again, because the attributes the physicians are seeking are those that show that the drug is effective, that the duration of the response that's associated with these patients is meaningful, approaching at least a year and that it's safe. So when we think about uptake, we certainly believe that we'll have meaningful uptake in both the mutated-bearing population of patients as well as the wild-type segment, and we would see that right upon approval.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [21]

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I think just to add on to that, David, maybe one other comment. Just the observation that we've seen. And I -- David, in my opening remarks, that even in the time that we've been approved for epithelioid sarcoma, the hot line that we have made available to patients for access, the verification of benefits that we've seen coming in ranges not just for epithelioid sarcoma, but we've also seen already verification of benefits for patients with follicular lymphoma as well as patients who have other INI1-negative types of tumors.

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Operator [22]

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And our next question comes from Leland Gershell with Oppenheimer.

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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [23]

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And good to see the progress. I actually wanted to ask, based on just taking from the last question, the use of taz in the other tumors, FL, which lines of therapy, which combinations are we seeing. I know it's early days and the approval is only in ES at this point. But just curious to know what you're seeing in terms of use patterns already in some of these other settings. And also any reimbursement challenges that you've run into?

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [24]

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Yes. I'll start at a very high level, then Matt can get into more specifics. I think your point is right, it's very early. We're just a couple of weeks into the launch. I was interested to see that the very first verification of benefit we got after the approval was actually a patient who had second-line follicular lymphoma. So I think that was an indication of what adoption might look like as the drug is now commercially available. But it is early days. I'll let Matt speak a little bit more about what we've seen in the first few weeks.

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Matthew E. Ros, Epizyme, Inc. - Chief Strategy & Business Officer [25]

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Yes. I mean, so with regard to ES, we're really pleased, as we've referenced on the call, from the moment the product was approved to first prescription that came on February 1. So our field-based team has been actively working with the ES treaters, and there's a lot of enthusiasm around TAZVERIK and what it will be able to provide for the epithelioid sarcoma population. As Rob has mentioned, there's certainly been inquiry about the role of TAZVERIK in follicular lymphoma for all the unmet need reasons we've spoken about in the past. And so we would anticipate that that's only going to continue as we get closer to the second approval later in the first half of this year.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [26]

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And we've been pleased. I mean our goal was to -- as Matt said in his opening remarks, to make sure we had drug available within 10 days of the approval. And within a week, we already had the first prescription where we had shipped to a patient. And one of the big metrics that we're following is the time from when we get the initial request to time of shipment, and we're trying to make sure that we're averaging 5 days for that.

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Matthew E. Ros, Epizyme, Inc. - Chief Strategy & Business Officer [27]

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And just a follow-up on the -- any challenges with the payer community. We've not had a challenge with the payers. We're very pleased with the performance and the speed in which they've adopted TAZVERIK into their formularies, and we're just continuing to execute against the plan.

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Leland James Gershell, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [28]

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Thanks. That's helpful. And just a quick question for Shefali. This may have been asked already. But in terms of the prostate cancer data, when might we see the first reveal from the studies in prostate?

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Shefali Agarwal, Epizyme, Inc. - Chief Medical Officer [29]

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Yes. So in terms of the study, the study is ongoing. We actually have enrolled patients, we -- in the safety portion of the study. The safety portion of the study is planned to be completed this year and moving on to the proof-of-concept randomized study. So we would hope or we would expect to get the safety data. We haven't guided on the timing of the data.

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Operator [30]

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(Operator Instructions) We have a question from Yaron Werber with Cowen.

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Lisong Ai, Cowen and Company, LLC, Research Division - Research Associate [31]

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This is Leo Ai in for Yaron Werber. Congrats on the quarter. I just have 2 questions. First, the question is for the -- your guidance in 2020 for the OpEx, the $300 million to $330 million. Can you help us think about the OpEx for the following years? How shall we think about the run rate for R&D and SG&A.? And also the second question, can you help us understand what you are trying to show in terms of the additional benefits by adding taze to R-squared or R-CHOP in the second-line or first-line FL?

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [32]

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Yes. I'll start by having Paolo address your first question and then Shefali can address the second.

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Paolo Tombesi, Epizyme, Inc. - CFO [33]

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Yes. So in terms OpEx, we just announced this morning during the call that for the -- this year, we are expecting a range between $230 million and $255 million. We are not giving direction for following years. I think this year, as we mentioned, there is quite an inflection point for SG&A because we have nearly got organization and the field force to continuing the ES launch and expecting the eventual FL launch, and also for R&D for the confirmatory trials, also the life cycle management. So for this year, we gave these directions. And with this, we also assume a runway with our cash position at the beginning of the year, at least into 2022. But we are not giving the guidance for following years.

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Shefali Agarwal, Epizyme, Inc. - Chief Medical Officer [34]

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And then following up on your question regarding the R-squared. So I think just going on in terms of defining why we are doing the study, this study was very strategically important to us. As you know, R-squared has become the standard of care in second line. Our plan was to actually move in earlier lines with the label expansion. So the plan was to do a confirmatory trial in R-squared in second line. And that trial is important because we really are -- believe in the combination based on the preclinical evidence that we have when we combined with lenalidomide. It is the data with R-CHOP combination in DLBCL that we were able to show preliminary activity.

And so we are doing a very innovative adaptive design where we have an opportunity to look at different interims and adapt the design. Our hope is to provide additive benefit to R-squared -- in combination with R-squared and then compare it with R-squared. We also have a maintenance portion of the study, as you know, that we have shown in third line and beyond that patients continue beyond progression, a logical progression, and we believe that because of the profile that Matt and I have been talking about, because of the safety profile and continued benefit, we believe maintenance can really add benefit in this study and will be important for us.

In terms of following up on your second question with R-CHOP, we had presented the combination with R-CHOP in DLBCL, high-risk DLBCL patients in ASH 2018, where we showed that we could combine, at full dose, tazemetostat and R-CHOP. And so we are going to add an arm with high-risk FL patients as well because, as you know, this R-CHOP is used in front-line FL. And so our plan is to actually provide value of tazemetostat across all lines of FL, starting with front line FL R-CHOP combination, R-squared in second line and then approval in third line and beyond.

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Operator [35]

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And I'm showing no further questions at this time. I'd like to turn the call back to Mr. Rob Bazemore for any closing remarks.

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Robert B. Bazemore, Epizyme, Inc. - President, CEO, Secretary & Director [36]

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Okay. Well, thank you all for your questions and for joining today. As you've heard, this is an incredibly exciting time for Epizyme. We're excited about how we're starting off the year this year. We thank you for your support, your enthusiasm for the company, and we look forward to the many milestones ahead this year. Take care, everyone.

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Operator [37]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.