U.S. Markets open in 3 hrs 58 mins

Edited Transcript of INFI earnings conference call or presentation 7-May-19 8:30pm GMT

Q1 2019 Infinity Pharmaceuticals Inc Earnings Call

Cambridge May 15, 2019 (Thomson StreetEvents) -- Edited Transcript of Infinity Pharmaceuticals Inc earnings conference call or presentation Tuesday, May 7, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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

Corporate Participants

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

* Adelene Q. Perkins

Infinity Pharmaceuticals, Inc. - Chairman & CEO

* Jayne Kauffman

Infinity Pharmaceuticals, Inc. - Senior Executive Coordinator

* Jeffery L. Kutok

Infinity Pharmaceuticals, Inc. - Senior VP & Chief Scientific Officer

* Samuel Agresta

Infinity Pharmaceuticals, Inc. - Chief Medical Officer

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

Conference Call Participants

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

* George B. Zavoico

B. Riley FBR, Inc., Research Division - Analyst

* Matthew Alexander Bannon

JP Morgan Chase & Co, Research Division - Analyst

* Soumit Roy

JonesTrading Institutional Services, LLC, Research Division - Research Analyst

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

Presentation

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

Operator [1]

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

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals conference call to discuss the company's financial results for first quarter 2019. My name is Sherry, and I'll be your operator for today's call. (Operator Instructions) Please be advised that this call is being recorded at Infinity's request.

Now I would like to introduce your host for today's call Ms. Jayne Kauffman. Please go ahead.

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

Jayne Kauffman, Infinity Pharmaceuticals, Inc. - Senior Executive Coordinator [2]

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

Thank you, Sherry, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our first quarter 2019 financial results. With me here today are Adelene Perkins, Chief Executive Officer; Dr. Sam Agresta, our Chief Medical Officer; and Dr. Jeff Kutok, our Chief Scientific Officer.

We will open up the call for Q&A following our remarks. The press release issued this afternoon details our results and is available on our website at infi.com.

Please note that during this call, we may make forward-looking statements about our future expectations and plans, including clinical development objectives, the therapeutic potential of our product candidates, our strategic plans and strategies and our financial projections.

Our actual results may differ materially from what we project today due to a number of important factors, including the considerations described in the Risk Factors section of our quarterly report on Form 10-Q for the first quarter of 2019 and in other filings we make with the SEC. These forward-looking statements represent our views only as of today, and we caution you that we may not update them in the future whether as a result of new information, future events or otherwise.

Now I would like to turn the call over to Adelene.

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [3]

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

Thanks, Jayne, and thank you to everyone for joining us. On our fourth quarter call, just under 2 months ago, we emphasized that 2019 was the year of focus and execution. So consistent with that theme, we're going to keep today's call very focused.

I'll begin by summarizing our progress in executing on key strategic goals that we laid out at the beginning of the year and then open up the call to questions for which I'll be joined by other members of the Infinity team here with me today.

Value creation at Infinity in 2019 and beyond will be driven by compelling clinical data with our first-in-class immuno-oncology therapy, IPI-549, together with the keen sensitivity to equity and product rights dilution in funding this clinical development.

During the first quarter of 2019, we're pleased to have establish a clinical collaboration with Roche/Genentech to expand the development of IPI-549 into the front-line setting with novel triple combination therapy in addition to accessing $22.9 million of non-dilutive capital to fund our expanded development program and extend our cash runway.

During 2019, we will be initiating trials in 4 settings with IPI-549, including in earlier lines of therapy, new indications and novel potentially transformative immuno-oncology indication.

We are on track to initiate MARIO-275 by the end of June, our Phase II study of IPI-549 in combination with Opdivo in patients with immuno-oncology naïve platinum refractory advanced urothelial cancer in collaborations with Bristol-Myers Squibb. We are also on track to initiate MARIO-3 in the third quarter of this year. MARIO-3 is a Phase II study in collaboration with our partners Roche/Genentech and has 2 main components. The first is evaluating IPI-549 in combination with Tecentriq and Abraxane, as a front-line treatment in patients with triple-negative breast cancer. And the second, evaluate IPI-549 in combination with Tecentriq and Avastin as a front-line treatment in patients with renal cell cancer.

In the second half of the year, our collaborator, Arcus Biosciences plans to advance IPI-549 in novel triple combination therapy beyond checkpoint inhibitors by combining IPI-549 with Arcus' adenosine inhibitor, AB928, and Abraxane in patients with relapsed/refractory triple-negative breast cancer. These trials are key components of our strategy to generate compelling clinical data with IPI-549 in a range of combinations and settings in collaboration with top-tier partners.

Working with established leaders in the field of oncology like Bristol-Myers Squibb and Roche/Genentech and Arcus Biosciences not only provides access to important resources and expertise, but also provides important validation and support from these partners for our development of IPI-549 in combination with current and evolving standards of care to enhance outcomes for patients.

Combining IPI-549 with several best-in-class marketed therapies and several cancer indications in lines of therapy represents a significant step toward our goal of generating compelling patient benefit data, and we look forward to updating you on these trials as they progress.

Importantly, the new trials we are initiating in 2019 have all been informed by clinical and translational data from MARIO-1. MARIO-1 will be fully enrolled this year. And as the data mature and potentially give rise to additional studies with IPI-549, our announcement of any additional studies will be coupled with the supporting data from MARIO-1.

We're encouraged by both our clinical and translational data to date with IPI-549 and by the excitement of the broader scientific community around PI3-kinase-gamma inhibition as a promising immuno-oncology approach.

At the recent AACR annual meeting in April, Dr. Judith Varner, Professor of -- Professor at the University of California at San Diego School of Medicine gave a plenary talk titled "Taming the beast: Strategies to target the immune-suppressive macrophage to enhance cancer immune therapy."

Dr. Varner explained that PI3-kinase-gamma signaling in immunosuppressive macrophages, the beast of the tumor microenvironment, plays a major role in preventing T-cell responses in tumors, rendering checkpoint inhibitors ineffective. Dr. Varner discussed the promise of PI3-kinase-gamma inhibition with IPI-549 in taming these macrophage beasts and presented supporting preclinical evidence as well as clinical translation -- and translational data from our MARIO-1 study underscoring the importance of this approach.

The link to Dr. Varner's talk is available free of charge on the AACR meeting website. Dr. Varner will be speaking on the same topic at the Frontiers in Cancer Immunotherapy at the New York Academy of Sciences Meeting in New York City next week on May 14, at which we'll also be presenting a poster of the MARIO-1 data presented at the Citi Annual Meeting in November of 2018.

Given our 2019 focus on clinical execution and expanding the breadth and depth of our clinical development program, we are pleased to have access the equivalent of over $60 million of nondilutive capital during the past 2 quarters to advance these trials. $42 million of this capital has come from the realization of an approval milestone and the monetization of royalty payments on Copiktra, which we licensed to Verastem. And the remainder has come from the realization of a Phase III milestone on our hedgehog inhibitor pathway program licensed to PellePharm and meaningful drug supply commitments from top-tier collaborators for the standard development of IPI-549. Importantly, we've accessed this nondilutive capital to advance development of IPI-549, while also retaining worldwide rights to the program.

As of March 31, 2019, we had total cash, cash equivalents and available-for-sale securities of $70.5 million compared to $58.6 million at December 31, 2018.

We recognized the $30 million gross proceeds from the Copiktra royalty monetization as a liability, net of transaction cost on our balance sheet, which is industry standard accounting treatment for royalty monetization. We recorded $2.1 million in revenue for the first quarter of 2019, which primarily relates to the achievement of a $2 million milestone from PellePharm for the initiation of a Phase III study investigating patidegib in patients with Gorlin Syndrome. We did not record any revenue during this period last year.

R&D and G&A expense was comparable year-over-year at $5.8 million and $3.4 million, respectively, for the first quarter of 2019.

Royalty expense for first quarter of 2019 was $6.8 million, which primarily relates to our sharing of a portion of the proceeds from our Copiktra royalty monetization with Takeda.

Net loss for the first quarter of 2019 was $13.7 million or a basic and diluted loss per common share of $0.24 compared to a net loss of $9.5 million or a basic and diluted loss per common share of $0.18 for the same period in 2018.

We expect 2019 net loss to range from $40 million to $50 million, and we expect to end 2019 with a cash and investments balance ranging from $40 million to $50 million.

Based on our current operating plans, which exclude additional funding or business development activities, we anticipate that our existing cash, cash equivalents and available-for-sale securities will provide cash runway well into the second half of 2020.

2019 is off to a strong start and through the remainder of the year, we look forward to building on the momentum that we've established for our clinical program, which enables evaluation of IPI-549 in over 500 patients.

We remain driven by the magnitude of unmet need for better treatment options for people with cancer and are proceeding with a great sense of urgency to bring this potentially transformative immuno-oncology therapy to patients.

We look forward to updating you on our progress throughout the year. And at this time, we'll open up the call for questions. Sherry?

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

Questions and Answers

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

Operator [1]

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

(Operator Instructions) Our first question comes from Anupam Rama with JP Morgan.

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

Matthew Alexander Bannon, JP Morgan Chase & Co, Research Division - Analyst [2]

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

This is Matt on for Anupam. Congrats on the execution. So just one from us. With MARIO-275 kicking off within the quarter, you've kind of talked about the benchmark for the response rate being 25% of population. So just wondering if you can help us orient around duration of response?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [3]

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

Sure. And I'll turn that over to Sam, but I'll remind you that our focus with the MARIO-275 is really driven by the data that BMS generated with CheckMate-275, and our design of that trial mirrors that as much as possible where they showed that patients with high levels of MDSCs did not do as well. And in our Phase I data, we've shown that we've reduced levels of MDSCs in the vast majority of patients and so that underscores the strategic rationale. And Sam?

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [4]

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

Yes, this is Sam Agresta. I don't know off the top of my head the duration of response from CheckMate-275. I think the PFS was between 7 and 8 months overall in the population. But remember, MARIO-275 is designed slightly differently in that we're looking at a ratio of 2:1 of the MDSC highs versus lows in each of the arms where that the outcomes in the patients with the MDSC highs was presented at AACR was -- when you look at our OS was about 3 months versus a much higher number in the MDSC OS. So we are targeting the overall population, but we are also powered to look at the MDSC high on population as an unmet medical need within the randomized study.

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

Matthew Alexander Bannon, JP Morgan Chase & Co, Research Division - Analyst [5]

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

Okay. And then just to confirm the cutoff of 20%, I think, for MDSC and MARIO-275, that's the same as before?

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [6]

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

Yes. It's very similar in MARIO-275.

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

Operator [7]

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

Our next question comes from Soumit Roy with JonesTrading.

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - Research Analyst [8]

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

Congrats on the great progress you've made. Just a quick question on the expectations around the further update to second half of this year on MARIO-1. What -- so the TNBC and the melanoma cohort, these are being very late-line patients. So what should we expect? So our expectations are less focused on the response rate but more on potentially translational data? So what would we expect to see from that that we can extrapolate to better understand when MARIO-275 reads out?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [9]

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

So thanks for the question, Soumit. So what's important about MARIO-1 and the data that we generated is it has informed 6 paths that we have going forward. Two of those are expansions within MARIO-1. So as you asked, we were encouraged by early data from the melanoma cohort. So we increased that from 20 patients to 40 patients, and we were encouraged by activity in patients with triple-negative breast cancer. So we expanded that. So we have 2 expansions within MARIO-1. And then the 4 settings that we're initiating this year in urothelial cancer with BMS and triple-negative breast cancer with both Roche/Genentech and with Arcus and in renal cell with Roche/Genentech have all been informed by MARIO-1. And what we will continue to do is as we will be completing the enrollment in MARIO-1 this year and as those data mature to the extent that they then form an additional path forward. When we announce the initiation of a follow-on trial, we'll share the data from MARIO-1 that underscores that. As you mentioned, given that we have done an expansion in melanoma and given that one of the important aspects of MARIO-1 is evaluating the effect of 549 in patients who have progressed on a checkpoint inhibitor as their immediate prior therapy, that's one possible path going forward. But it will all be data-driven and tied to a future development.

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - Research Analyst [10]

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

Got it. Another question on looking at the triple-negative breast cancer and also the relapse/refractory triple-negative breast cancer. Do you -- 2 years from now, how do you visualize the treatment regimen would pan out across the different lines of therapy? Do you see -- sorry, not triple negative, I meant to say bladder cancer. Do you see ADC's Seattle Genetics drug coming in the front line or in second line before Opdivo plus 549? Or how do you see -- what would -- what do you see as the adoption bar to be 2 years from now? Is it going to be response rate of 40%? Or is it going to be really 20%, 25% as we've seen with Opdivo monotherapy?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [11]

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

So I'll start and then turn it over to Sam. Right now, our focus is on MARIO-275, and we're very excited about that trial design and the potential to show that we can have better outcomes because of our data that shows IPI-549 reduces MDSC. That's in the second line in platinum refractory patients. With good data there, there's clearly the potential for us to move to the front line in bladder cancer, but right now, we see a great opportunity in the second line.

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [12]

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

Yes, I think, it's a great question. How -- I wish I could forecast 2 years in advance what will happen, but I would imagine that front -- if you follow the trends in other cancers, checkpoint inhibitor therapy is moving into front line with or without chemo and even adjuvant, leaving space for other combinations in front line, second line. So really options for MARIO-275 are -- do we go to front line, do we stick to I/O naïve? Are there -- is there a subset of patients that could benefit even further than the entire cohort meaning the MDSC highs that we would move into multiple paths with. So I think, there are a lot of options still as the data reads out as to where we would go with the 275 data.

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [13]

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

And there is also -- before you focus your question on bladder cancer, there is an interesting strategy within our triple-negative breast cancer where with Roche/Genentech, they've just gotten approval in the front line of Tecentriq together with Abraxane, and we're adding on to that in the front line. But with Arcus, we're also looking at relapse/refractory settings and a regimen that doesn't include a checkpoint inhibitor. So we have strategies that could get us to both the front and the relapse/refractory.

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [14]

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

And I think, this is Sam, to add on to that I think the -- if you look at the totality of the Genentech study, the Arcus study and our MARIO-1 study, we'll be able to show potentially that treatments for multiple lines of therapy in at least one indication with something that IPI-549 that suppresses the MDSC. MDSCs could be meaningful. So that could be an interesting readout. It's not -- it will be interesting to look at treatments for multiple lines in triple-negative breast cancer and how that plays out.

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

Operator [15]

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

(Operator Instructions) Our next question comes from George Zavoico with B. Riley FBR.

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

George B. Zavoico, B. Riley FBR, Inc., Research Division - Analyst [16]

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

Thanks for the update. Much appreciated. First question about with regard to MARIO-275, it's a Phase II trial, but do you envision this to be potentially registrational?

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [17]

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

George, this is Sam. Again, I'll -- I think any study if it's well conducted could be registrational, really just depends on the data. My experience with the FDA as a collaborator has been approvals in -- with first in human Phase I. So again, we've designed a way -- designed the study in a way that if the data is compelling, it can potentially be something that we talk to the FDA about. So that is the goal.

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

George B. Zavoico, B. Riley FBR, Inc., Research Division - Analyst [18]

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

Okay. And with regard to the high and low cutoff for the beast as it were, you described them. Is that a fluid boundary because honestly, there's a whole spectrum along there. How do you look at interpreting that data and perhaps expanding into one or the other or actually you would expand into the high. Is that a potential strategy for MARIO-275?

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

Jeffery L. Kutok, Infinity Pharmaceuticals, Inc. - Senior VP & Chief Scientific Officer [19]

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

George, this is Jeff. I can answer the question around the cutoff. The cutoff is fixed because we're stratifying or randomizing patients 2:1 prospectively based on the cutoff. So that's fixed.

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [20]

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

The development path, George, we have left it open looking at both the highs and the lows. So we haven't eliminated either group as far as a development path. So we'll just have to look at the data. We did look at the 2:1 ratio here at the highs versus lows, but that doesn't rule -- we haven't ruled out the lows yet, thinking about is it an absolute reduction from a baseline level or is it a reduction from a cutoff? I think it's premature to say, which one is the most meaningful part, but the outcomes data from the CheckMate-275 study presented at AACR clearly show the difference from an absolute baseline level, if you look at highs and lows and outcomes.

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

George B. Zavoico, B. Riley FBR, Inc., Research Division - Analyst [21]

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

And are you using the CheckMate-275 cutoff in MARIO-275? Or is it slightly altered?

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

Jeffery L. Kutok, Infinity Pharmaceuticals, Inc. - Senior VP & Chief Scientific Officer [22]

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

We are using the data from CheckMate-275 to help us with the cutoff. In the CheckMate-275 retrospective study, they split the patients into tertiles, high, medium and low. In our study, we're looking just at 2 groups high and low.

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

Samuel Agresta, Infinity Pharmaceuticals, Inc. - Chief Medical Officer [23]

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

And that is informed by discussions with BMS with regards to making one cutoff, not tertiles, 3 groups.

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

George B. Zavoico, B. Riley FBR, Inc., Research Division - Analyst [24]

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

Oh, Okay. Okay. All right, that makes it a little bit easier to distribute the patients I suppose.

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [25]

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

Okay, thanks George.

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

Operator [26]

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

Speakers, I'm showing no further questions in the queue. I will turn the call back over to you for any closing remarks.

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [27]

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

Thank you, Sherry, and again, thanks to everyone on the call. We're very excited about the opportunity we have with IPI-549, and we look forward to providing more updates in the coming months. Have a good evening, everyone, and thank you for joining us on today's call.

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

Operator [28]

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

Well, ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect, and have a wonderful day.