U.S. markets open in 3 hours 6 minutes

Edited Transcript of INFI earnings conference call or presentation 3-Mar-20 9:30pm GMT

Q4 2019 Infinity Pharmaceuticals Inc Earnings Call

Cambridge Mar 17, 2020 (Thomson StreetEvents) -- Edited Transcript of Infinity Pharmaceuticals Inc earnings conference call or presentation Tuesday, March 3, 2020 at 9:30:00pm 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. - Executive VP & Chief Scientific Officer

* Lawrence E. Bloch

Infinity Pharmaceuticals, Inc. - President & Treasurer

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

Conference Call Participants

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

* Andrew Jacob D'Silva

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

* Anupam Rama

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

* Kevin Michael DeGeeter

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

* Nicholas M. Abbott

Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst

* Soumit Roy

JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst

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

Presentation

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

Operator [1]

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

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals' Corporate Update and Full Year 2019 Financial Results Conference Call. My name is Daniel, 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, Jayne Kauffman, Senior Executive Coordinator at Infinity Pharmaceuticals. Please go ahead.

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

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

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

Thank you, Daniel, and good afternoon, everyone. Welcome to today's call. We are pleased to discuss our recent significant business progress, review our full year 2019 financial results and provide our key milestones for 2020.

With me here today are Adelene Perkins, Chief Executive Officer; Larry Bloch, President; 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 are available at 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 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 annual report on Form 10-K for the full year 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]

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

Thank you, Jon -- Jayne, and thank you to everyone for joining us. This is an exciting time for Infinity Pharmaceuticals. Today, we look forward to providing an overview of our recent corporate highlights, upcoming IPI-549 clinical milestones and financial guidance for 2020.

The most important thing for you to know is that we have 5 significant IPI-549 clinical study readouts that are expected this year through mid-2021. These data readouts all fall within our current cash runway, creating significant near-term value creation potential for our shareholders. Our ability to generate data with IPI-549 in over 500 patients across 5 studies, all of which are now enrolling, was enabled by our announcement earlier this year of a nondilutive $20 million financing with Biotech Value Fund, or BVF, a top-tier investor and also our largest shareholder.

This financing was backed by potential royalty payments due on future sales of patidegib, a hedgehog pathway inhibitor discovered by Infinity and licensed to PellePharm in 2013. With this latest financing, we have accessed over $90 million of completely nondilutive capital and contributions in kind over the past 18 months alone, reflecting our commitment to access the capital necessary to fund the advancement of IPI-549 for patients with the dilution sensitivity necessary to create value for shareholders.

Our upcoming clinical data readouts are significant, given that IPI-549 is a first-in-class oral immuno-oncology product candidate, targeting immune-suppressive macrophages and myeloid-derived suppressor cells, or MDSCs, through selective PI3-kinase-gamma inhibition and is the only PI3-kinase-gamma specific inhibitor in clinical development. M2 macrophages and MDSCs, they are circulating equivalents, which we will refer to interchangeably in today's call, generate a pro tumor immune-suppressive tumor microenvironment, contributing to tumor regrowth and inhibiting antitumor T-cell activity. Research at Infinity and elsewhere shows that the presence of these immune-suppressive MDSCs and M2 macrophages may be a key reason that only a small percentage of patients benefit from checkpoint inhibitors and that most patients who respond initially to checkpoint inhibitors ultimately relapse.

IPI-549 is designed to provide a solution to the problem of tumor immune suppression by reprogramming MDSCs and M2 macrophages from a pro tumor immune-suppressive function to an immune stimulatory antitumor function, characteristic of M1 macrophages. MARIO-1, our Phase I study, has generated clinical and translational evidence of this decreased immune suppression and increased immune activation with IPI-549, both as a monotherapy and in combination with checkpoint inhibitor therapy. These initial data have laid the foundation for and informed our ongoing clinical development. IPI-549 has also demonstrated an excellent safety and tolerability profile, again, as both a monotherapy and in combination with a checkpoint inhibitor, enabling a robust clinical development plan with a number of innovative combination therapies in several tumor types intended to improve upon emerging standards of care as well as approved front and second-line regimen.

These compelling mechanistic safety and activity data have enabled us to attract top-tier partners for the development of IPI-549, resulting in collaborations with Bristol-Myers Squibb, Roche/Genentech and Arcus Biosciences. These partnerships are truly collaborative, enabling us to benefit from the expertise and insight of world-renowned leaders in oncology and are invaluable for the successful development of IPI-549.

Our collaboration with BMS leverages important data from their CheckMate-275 study, which resulted in the approval of Opdivo as a monotherapy in bladder cancer patients following progression on a front-line platinum-based chemotherapy. Translational analysis from the CheckMate-275 study led by Dr. Pam Sharma at MD Anderson demonstrate that with Opdivo monotherapy, there's a stunning correlation between patients with the highest baseline levels of MDSCs and poor outcomes, including a significant sixfold reduction in overall survival compared to patients with low baseline levels of MDSCs.

These findings support the premise that MDSCs are immune suppressive, contribute to tumor regrowth following chemotherapy and limit the effectiveness of checkpoint inhibitors, thus minimizing the patient population that may benefit from these immuno-oncology therapies. The CheckMate-275 findings came at a very interesting and important time as in parallel, Infinity generated data in our MARIO Phase I study showing a rapid and dramatic reduction in MDSCs following treatment with IPI-549. These complementary findings in identifying both a problem and its potential solution served as the inspiration from MARIO-275 and accelerated our path forward in combination with Opdivo in patients with urothelial cancer.

MARIO-275 is the company's ongoing global, randomized, controlled Phase II study in immune therapy naive second-line urothelial or bladder cancer patients in collaboration with Bristol-Myers Squibb. Working closely with BMS, our trial was designed with tremendous fidelity to the design of CheckMate-275 with the primary difference being the addition of IPI-549 to Opdivo with the goal of improving patient outcomes. In MARIO-275, patients are stratified based on starting MDSC levels and then are randomized 2:1 to either the IPI-549 plus Opdivo or Opdivo plus placebo arm regardless of PD-L 1 status.

The primary end point of the study is overall response rate with equally important secondary end point of patient benefit in median progression -- median progression-free survival, overall survival and duration of response, which are particularly important, given the correlation of high MDSC levels with poor time-to-event outcomes most notably, significantly shorter overall survival shown in BMS' CheckMate-275 study. We plan to enroll 160 patients at approximately 50 sites in both the U.S. and Europe, and anticipate completion of enrollment by the end of this year, followed by data in mid-2021, approximately 6 months after the completion of enrollment.

We are also excited about our novel combination studies with IPI-549 in front-line cancer patients in a Phase II study called MARIO-3. MARIO-3 is a 90-patient study being conducted in collaboration with Roche/Genentech, with a cohort of 30 patients with renal cell cancer, or RCC, and 60 patients with triple-negative breast cancer, or TNBC, all of whom we expect to roll this year with initial data also expected later this year. These studies are evaluating IPI-549 in novel triple combinations and are our first applications of IPI-549 in front-line setting.

Importantly, these RCC and TNBC cohorts were designed with great fidelity to the inclusion, exclusion and other key trial characteristics utilized by Roche/Genentech in their evaluation of double combination therapy in each indication, such that we will have a benchmark against which to evaluate the benefit of adding IPI-549 to previously evaluated Roche/Genentech regimen. In front-line RCC, Roche tested Tecentriq plus Avastin in a study called in IMmotion151. In front-line TNBC, Roche received accelerated approval for the combination of Abraxane and Tecentriq in a study called IMpassion130.

In both our RCC and TNBC cohort, half of the patients enrolled will have high levels of PD-L1 expression, and the other half will have low levels of PD-L1 expression, where the checkpoint inhibitors have shown little activity. The primary end point for all MARIO-3 cohorts is complete response rate to improve upon the benchmarks of a complete response rate of 10% or less seen with the Roche/Genentech double.

We are also collaborating with Arcus Biosciences with a checkpoint-inhibitor free novel triple combination regimen of IPI-549 with AB928, Arcus' dual adenosine receptor antagonist and a chemotherapy Doxil in second line or greater advanced TNBC patients. This study is being conducted by Arcus, who completed the dose escalation phase of the study in 2019 and are now enrolling up to 40 TNBC patients in an expansion cohort.

This Phase I/Ib study is adding IPI-549 to a parallel study underway by Arcus evaluating the doublet of AB928 with Doxil in the same patient population of second line or greater TNBC patients. The primary objective is safety and tolerability of IPI-549 and AB928 in combination with Doxil. Secondary objectives include overall response rate to these control rates progression-free survival and pharmacokinetic and pharmacodynamics will also be monitored.

Jeff will describe the scientific rationale for all of these studies in more detail. Finally, we completed enrollment in our MARIO-1 study, evaluating IPI-549 as a monotherapy and in combination with Opdivo in patients with advanced solid tumors at the end of 2019. Data from this clinical study has played a critically important role in substantiating our mechanistic and preclinical findings on the role of PI3-kinase-gamma inhibition with IPI-549 in reducing the number of MDSCs, thereby reducing immune suppression with a corresponding activation of an immune response. We will provide an update on this data, which provides the foundation for our Phase II studies now underway later this year.

Next, a few words on our partnerships. We are delighted to have strong clinical collaborations with Bristol-Myers Squibb, Roche/Genentech and Arcus Biosciences, all of whom are global leaders in developing innovative cancer treatment. Though we have chosen to retain worldwide development and commercial rights to IPI-549 in advance of Phase II data, collaborations are critically important to us as partners bring tremendous insights on unmet patient needs from their previous studies and on specific areas for improvement with future treatment regimens .

Our partners also provide meaningful financial support for our trials through contributions of combination therapies free of charge. In turn, our partners look to leverage Infinity's scientific insights on the role of IPI-549 in reprogramming macrophages and modulating MDSCs to overcome resistance to checkpoint inhibitors as well as Infinity medical insights based on our clinical experience in treating patients with IPI-549 who are no longer responsive to checkpoint inhibitor therapy. Our phenomenal clinical team led by our VP of Clinical Development, Dr. Halle Zhang; and our VP of Clinical Operations, Jennifer Robert are supported by the 70-plus clinical investigators on our trials and the expanded network of clinical advisers and collaborators, some of whom have recently joined our exceptional clinical advisory board.

We are pleased to announce today the additions of Dr. Pam Sharma, co-leader of the MD Anderson Cancer Center's immunotherapy platform and the principal investigator on the BMS CheckMate-275 study that first demonstrated the association of high MDSCs to lower overall survival in patients with urothelial cancer and which provided the inspiration for our MARIO-275 study for which her unique insights will be invaluable.

We are also pleased that Dr. Toni Choueiri, the Director of the Lank Center for Genitourinary Oncology at Dana-Farber Cancer Institute has also joined our clinical advisory board. Dr. Choueiri is a recognized thought leader in the GU field who has done extensive work in the development of better treatments for patients with RCC and will bring his unique insights to the interpretation of our data from MARIO-3 and RCC and the development of next step.

Dr. Michael Postow has also joined our clinical advisory board. He co-leads the melanoma disease management team at Memorial Sloan Kettering Cancer Center and was the principal investigator of a clinical trial, which led to FDA approval of the nivolumab plus ipilimumab combination to treat melanoma, and will bring tremendous insights to the identification of potential future path for IPI-549 in melanoma.

And finally, our clinical advisory board is chaired by Dr. Sam Agresta, Infinity Board member and Chief Medical Officer of Foghorn Therapeutics. Dr. Agresta played a key role in the approval of several important drugs, including TIBSOVO and IDHIFA while at Agios and KADCYLA, which is approved for breast cancer while at Genentech. Dr. Agresta also played a key role in designing the Infinity trials now underway and is actively engaged with the company in advancing these trials.

With our great clinical team, investigators and advisers, 2020 is a very important year for the clinical development of IPI-549 and for the company. We're totally focused on completing enrollment in MARIO-275 and MARIO-3 this year and on generating data from all 5 of our study cohorts, which will be in a total of over 500 patients between now and mid-2021.

Before turning the call over to Dr. Jeff Kutok, our Chief Scientific Officer, I'd like to highlight the announcement we made today that with the advancement of IPI-549 into Phase II development, Jeff has officially passed the baton on development of IPI-549 to our clinical team. With his baton passing, Jeff will be leaving Infinity at the end of March to focus his considerable research talent on leading drug discovery at another life science company and will assume the role of Chair of Infinity's Scientific Advisory Board. In this new capacity, working with internal and external scientists, Jeff will continue to play a critically important role in interpreting new scientific insights on PI3-kinase-gamma specific inhibition and in helping to guide potential future development path for IPI-549.

Jeff played an instrumental role in the discovery of IPI-549 and in its transition into a robust clinical development program, and we are forever grateful for the enormous contribution he's made in bringing IPI-549 to this point and for his ongoing commitment to the program and to Infinity.

It is with profound appreciation that I now turn the call over to Jeff to review the strength of the scientific rationale underlying each of our clinical studies now underway.

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

Jeffery L. Kutok, Infinity Pharmaceuticals, Inc. - Executive VP & Chief Scientific Officer [4]

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

Thank you, Adelene. I'll certainly miss the daily interactions with you and all of my colleagues in Infinity. And despite my upcoming transition, I remain incredibly excited and enthusiastic about the path that IPI-549 is on and the strong scientific rationale that underlies the design of our studies, which I'll now review.

As you just mentioned, our MARIO-1 data has provided important proof of mechanism, supporting the potential of IPI-549 to decrease immune suppression and increase immune activation after treatment with demonstrated clinical activity in patients. We're particularly excited to see activity with the combination of IPI-549 and Opdivo in patients that were not be expected to respond to Opdivo monotherapy. These data have laid an important foundation for our ongoing clinical programs in the future directions, which I'd like to highlight.

Adelene summarized the scientific premise behind MARIO-275, our global, randomized controlled Phase II clinical trial, Opdivo plus 549 in urothelial cancer patients. So I'd like to take a step back and touch on the breadth of the impact that immune-suppressive MDSCs and M2 macrophages have across a number of different tumor types. Broadly speaking, MDSCs and M2 macrophages are rapidly being appreciated as a key mechanism by which tumors create a protective microenvironment and defend against immune attack. Distinct from targeted therapies directed to genetic mutations that drive the growth and survival of specific tumors that harbor those mutations, the macrophages and MDSCs that infiltrate nearly all tumors are fundamental biological mechanism of immune suppression that is relevant across most, if not all, of tumor types.

We've extensive clinical -- a preclinical mechanistic studies that support the key role of PI3K-gamma signaling in the immune-suppressive function of these macrophages and MDSCs, but also clinical and translational data to show that selective inhibition of PI3K-gamma by IPI-549 can overcome their suppressive effects and lead to immune activation in tumors. The mechanism of action of IPI-549 can therefore potentially synergize with many other therapies that either target other aspects of immune suppression in tumors like checkpoint-inhibitors or adenosine pathway or with chemotherapy like Doxil and Abraxane or targeted therapies like Avastin, all of which we are currently pursuing in clinical studies.

There are additional preclinical and scientific rationale for combining with IPI-549 with other therapies, and we look forward to pursuing these in the future. With respect to our existing studies, the data that BMS generated in CheckMate-275, reinforcing association of high levels of MDSCs with poor outcomes in bladder cancer, provided the foundation of our MARIO-275 trial, has been seen in many other settings and tumor types. Their extensive publications on the correlation of high MDSCs with poor prognosis, melanoma, head and neck, lung and other cancer types. As such, our MARIO-275 study serves as an important test of the potential value on reducing MDSCs, which could be much more broadly relevant across many tumor types and settings.

This approach may be representative of the next wave of cancer therapies, which are not tied to tumor histology but rather to fundamental biologic processes along the lines of the recent approval for checkpoint inhibitors based on high levels of microsatellite instability regardless of tumor type.

Against this backdrop, I'd like to describe how the fundamental role of MDSCs drive the underlying biologic rationale of each of our trials beyond MARIO-275. Let's start with MARIO-3, our Phase II study being conducted in collaboration with Roche/Genentech. The study has different cohort -- 2 different cohorts, front-line renal cell carcinoma with IPI-549 in combination with Tecentriq and Avastin, and front-line triple-negative breast cancer with IPI-549 in combination with Tecentriq and Abraxane. And renal cell carcinoma is a strong scientific and biologic rationale for combining Avastin, Tecentriq and IPI-549. Anti-angiogenic combined with checkpoint inhibitors have provided recent meaningful advances in the treatment of renal cell carcinoma. The anti-angiogenic or VEGF inhibitors regardless of whether they're antibodies or tyrosine kinase inhibitors, lead to damage in blood vessels and reduced blood flow to the tumors by design.

In addition, the tumors utilize checkpoints to suppress an immune response such that adding a checkpoint inhibitor like Tecentriq augments the antitumor T-cell response to provide additional patient benefit. But importantly, an additional effect of this treatment regimen, particularly the vascular disrupting agents is the creation of tissue hypoxia or lack of oxygen, leading to the recruitment of macrophages. These macrophages contribute to both vascular and tumor regrowth as well as suppression of antitumor responses of the T-cells. Given the role of IPI-549 in reducing MDSCs and reprogramming immune-suppressive M2 macrophages, the addition of IPI-549 to an anti-angiogenic and a checkpoint inhibitor like Tecentriq shuts down multiple mechanisms that lead to tumor resistance to these agents.

Study with Roche/Genentech in triple-negative breast cancer also has a similar hypothesis based on a trial Roche/Genentech did, combining Abraxane and Tecentriq in front-line TNBC patients. Abraxane leads to tumor cell death and Tecentriq offense an antitumor T-cell response, reducing immune suppression.

Based on the IMpassion130 trial, Roche received the first ever approval of a checkpoint inhibitor in triple-negative breast cancer with accelerated approval, but only in patients with high levels of PD-L1 expression. While this approval was very encouraging, it's clear there's room for improvement, which is where the addition of IPI-549 comes in. We hope to show benefit for both the PD-L1 positive and negative subgroups, with the addition of IPI-549 to Abraxane and Tecentriq, given the fact that chemotherapy like Abraxane can recruit additional macrophages and MDSCs to tumors that will contribute to tumor regrowth and further immune suppression. We're very enthusiastic about these Phase II studies with IPI-549, moving to a front-line combination therapy with real potential to improve upon regimens in renal cell carcinoma and triple-negative breast cancer.

Now let's turn to the Arcus Bioscience collaboration. As opposed to MARIO-3, the Arcus trial is a Phase Ib study as a second line and later therapy in triple-negative breast cancer. Triple combination includes IPI-549 with AB928, a dual adenosine receptor antagonist and Doxil, a chemotherapeutic. There is a strong scientific rationale that should sound familiar at this point, using Doxil, a chemotherapy to induce tumor cell death. The tumor cell death results in accumulation of immune-suppressive adenosine, which is the target of Arcus' dual adenosine receptor antagonist, AB928. But just as in the other mechanisms we reviewed, this tumor cell death also leads to recruitment of pro tumor macrophages, which suppress T-cell responses. So adding IPI-549 to this combination provides a complementary mechanism or helps to stimulate an immune response.

Importantly, the combination with Arcus is a checkpoint-inhibitor free regimen. Given the importance of the suppressive effects of macrophages and MDSCs in most tumor settings and lines of therapy, this will enable us to evaluate the potential of IPI-549 as a treatment backbone across several lines of therapy and distinct combinations. This will be particularly interesting to evaluating triple-negative breast cancer, given that we have TNBC trials now underway with IPI-549 in the front line with MARIO-3, in the second line with Arcus and in the third plus line with BMS.

There are 2 key aspects to the design of all of our trials now underway. We're adding IPI-549 to regimens that provide a clear benchmark upon which we can compare its activity, and we're exploring IPI-549 in settings where the immune-suppressive pro tumor macrophages and MDSCs are an important mechanism of resistance to these regimens.

Finally, I want to recognize the outstanding work of our clinical collaboration partners at BMS, Roche/Genentech and Arcus, as we continue to make great strides in advancing IPI-549 combination clinical programs. I also want to take this opportunity to thank all of my colleagues in Infinity for their years of support, comradery and professionalism. I look forward to remaining involved in the IPI-549 program as Chair of Infinity Scientific Advisory Board.

I'll now turn the call over to our President, Larry Bloch.

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

Lawrence E. Bloch, Infinity Pharmaceuticals, Inc. - President & Treasurer [5]

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

Thank you, Jeff. I'll sincerely miss working with you on a daily basis as part of the Infinity executive team. I am truly gratified that we will continue to collaborate together on development of IPI-549 in your new role as Chair of our Scientific Advisory Board.

Turning to our strategic outlook, we have maintained worldwide rights to IPI-549 with a total net sales royalty burden of only up to 4%. On January 8, 2020, we completed the $20 million nondilutive asset-backed financing with Biotech Value Fund partners with sole recourse and potential royalty payments due on future sales of patidegib, a hedgehog pathway inhibitor discovered by Infinity and licensed to PellePharm in 2013. Infinity is also eligible to receive from BVF an additional $5 million payment upon positive data from PellePharm's Phase III trial in patients with Gorlin Syndrome, which completed enrollment in November 2019.

Even for this potential milestone payment, we have a cash runway to fund all of our ongoing IPI-549 clinical studies to key data readouts expected by mid-2021. At December 31, 2019, we had total cash, cash equivalents and available for sale securities of $42.4 million compared to $58.6 million at December 31, 2018. And then subsequent to our Biotech Value Fund financing at January 8, 2020, we had a cash balance of approximately $62 million.

Revenue for the full year 2019 was $3 million compared to $22.1 million for the full year 2018. And R&D expense for the full year 2019 was $27.1 million compared to $19.8 million for the full year 2018. And this increase in R&D expense was primarily due to an increase in clinical and development activities for IPI-549.

Turning to general and administrative expense for the full year 2019. This was $14.3 million compared to $14.2 million for the full year in 2018. The net loss for the full year 2019 was $47.1 million or basic and diluted loss per common share of $0.83 compared to a net loss of $11.3 million, or basic and diluted loss per common share of $0.20 for the full year 2018. This increased net loss was mostly driven by 2 factors, the $22 million milestone payment received from Verastem in 2018 for the approval of COPIKTRA and $7.3 million royalty expense to Takeda in 2019 for their share of COPIKTRA royalty monetization with Healthcare Royalty Partners in the first quarter of 2019.

Now looking forward, our previously announced financial guidance as of January 13, 2020, remains unchanged. We expect 2020 net loss to range between $40 million and $50 million and to end 2020 with a cash investment balance in the range of $15 million to $25 million. We anticipate that our existing cash, cash equivalents and available for sale securities will be adequate to satisfy the company's capital needs into the second half of 2021.

Our 2020 financial guidance is based upon the company's current operating plans and does not include additional financing or business development activities or the potential $5 million milestone payment from Biotech Value Fund for positive Phase III patidegib data and any milestones from or the sale of the company's equity interest in PellePharm.

At this time, we give up the call for questions. Operator?

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

Questions and Answers

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

Operator [1]

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

(Operator Instructions) Our first question comes from Andrew D'Silva with B. Riley FBR.

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

Andrew Jacob D'Silva, B. Riley FBR, Inc., Research Division - Senior Analyst [2]

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

Congrats on all the progress over the last 12 months. Just a few quick questions for me. One modeling one out of the gate. As far as the BVF financing goes, is that going to be accounted for in the same way as a HCR, Verastem royalty stream? Or will that be recognized as an asset sale? I didn't see a cap amount or reversion carve-out. So it just look more like an asset sale to me.

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

Lawrence E. Bloch, Infinity Pharmaceuticals, Inc. - President & Treasurer [3]

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

Yes. It's a great question. So because of the subsequent event, we're actually working through the accounting with E&Y. And so we'll have that reflected in the first quarter, Q in May. But it is -- although they may look analogous, there's definitely some of the sort of financial components of it that still need to be analyzed to make a final determination.

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

Andrew Jacob D'Silva, B. Riley FBR, Inc., Research Division - Senior Analyst [4]

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

Okay. Okay, great. And then as it relates broadly to the competitive landscape, actually, more specifically to PI3-gamma. Has there been any updates on AstraZeneca's candidate? And have any other development programs emerged as well?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [5]

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

So thanks, Andrew. I'm not aware, and we're not aware of any updates on these programs. They did do an update at AACR last year, and they had data in preclinical models that looked somewhat similar to our program. The only discernible difference was for the preclinical studies, they were dosing twice a day and we're a once a day oral drug. We -- there's no evidence of any PI3-kinase-gamma specific inhibitor in clinical development. So we believe that we remain the only PI3-kinase-gamma specific inhibitor in clinical development.

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

Andrew Jacob D'Silva, B. Riley FBR, Inc., Research Division - Senior Analyst [6]

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

Okay. That's good to hear. And a good segue to my last question, I guess, really 2 parts to it. There has clearly been just an increase in programs targeting macrophages lately. I'm just curious if your enrollment rate to date is keeping up with what you were expecting when you originally gave guidance in January or if some trials are trending behind or ahead of what you would have initially thought? And then when you step back and look at the broader backdrop, I'd love to get your thoughts on how you see 549 or Infinity just fitting into the broader landscape with everything that's evolving lately?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [7]

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

Sure. So it's 2 months into the year. So it's early, but we remain really pleased with the status of the trial enrollment and the site initiation. We just came back from the GU ASCO meeting in San Francisco in mid-February, and there was just a lot of enthusiasm for our investigators -- from our investigators. So I would highlight with our MARIO-275 study with the 500 sites, the majority of those are outside the U.S. and so there's a really compelling rationale for patients to enroll in that study because they will either be receiving the standard of care Opdivo plus placebo or the standard of care plus IPI-549. And in some of the sites that we're studying, the Opdivo is not available to those patients as a second-line therapy. So we've seen great enthusiasm for investigators and our enrollment is off to a good start.

I'll remind you in our MARIO-3 study, we're going into the front line where we're adding, again, when you look at MARIO-3 and triple-negative breast cancer, the Abraxane plus Tecentriq is an approved regimen, and we're all thrilled with that, but it has some shortcomings in that it is not approved in patients with low levels of PD-L1 expression and the complete response rate is low. So we find, as we talk with our investigators, they're keenly aware of the need for better therapies. And the fact that IPI-549 is so well tolerated, enables us to go into those triple therapies. So far, so good.

And with the broader treatment landscape in addition to the fact that we're the only PI3-kinase-gamma specific inhibitor in development, we're not aware of -- while, as Jeff mentioned, there's a lot of excitement about MDSCs and the macrophage compartment. There are no other drugs that we're aware of that reduce the MDSCs or particularly reprogram the M2 macrophages to M1, for which there's any Phase II data to evaluate. So there's a lot of excitement, it's still relatively early days. And so we'll be monitoring and looking carefully at those. But from both our mechanism and preclinical data and where we are in the clinic, we believe 549 still has the potential to be quite differentiated from other approaches.

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

Operator [8]

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

Our next question comes from Kevin DeGeeter with Oppenheimer.

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

Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [9]

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

As we think about the, I guess, 2 primary clinical data readouts in 2020, MARIO-1 and MARIO-3. Is it reasonable to assume that we'll get the MARIO-1 data, that a final update earlier in the year and then MARIO-3 relatively later in the year?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [10]

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

I would expect both of them to be later in the year, Kevin, because we completed enrollment in our MARIO-1 study at the end of 2019. So we have patients who are still waiting to get data from their first scan. So we will be collecting both the clinical and translational data on those patients during the year. We also have to date presented just at major medical meetings. And so we'll most likely, just given that we don't even have first scans on some of those patients, we're looking towards the second half of the year and with abstract submission deadlines that there's a long lead time. So that's the story with MARIO-1. With MARIO-3, truly the same thing. We're in the early days of enrolling patients. So by the time we have a couple of scans and data on those patients, we'll have a more robust set of safety data by the end of the year, but the activity data will still be early and it will be later in the year.

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

Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [11]

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

Got it. Maybe a financial question for Larry, and I have a follow-up. With regards to the cash burn guidance, I mean a reasonably wide delta there. Can you sort of walk us through what some of the puts and takes kind of in that $10 million potential swing on burn might include?

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

Lawrence E. Bloch, Infinity Pharmaceuticals, Inc. - President & Treasurer [12]

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

Yes. So as Adelene said, we're -- it's still early days in terms of our enrollment. And most of our expenses are driven by our clinical expenses. Our G&A expenses are relatively constant year from year, as you can tell from our 10-K. And so we basically want to give a $10 million range because we can't get much more precision than that in a 12-month period of time, and it will be driven by the cadence of our clinical trials.

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

Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [13]

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

And kind of following up on that, I mean with regard to some of the COVID-19 related travel restrictions and other variables. How do you think about the visibility you have on pace of enrollment, I guess, specifically with regard to MARIO-275, given the configuration of where most of those sites are?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [14]

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

Yes, Kevin, it's a great point. We're monitoring it carefully. I think we and the rest of the world are trying to figure out exactly where this is going to go. So I can't say we have any better crystal ball than anyone else. We don't have any issues. I know there's been discussion about drug supply coming from China. We're not -- we don't have any concerns. It really will depend for us because we do have several sites in Europe, what happens with COVID throughout Europe and what it does to travel. So it's really too early to tell, and we're watching the same news you are to try to keep a good sense for where that's likely to go.

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

Operator [15]

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

Our next question comes from Anupam Rama with JPMorgan.

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

Anupam Rama, JP Morgan Chase & Co, Research Division - VP and Analyst [16]

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

I've got a broader strategic question. So over the last year or so there have been some transitions from the medical scientific management team to sort of more advisory roles. But with kind of multiple important data sets coming here in 2020 and 2021, how are you thinking about the scope and sort of the broader management team overall?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [17]

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

Sure. Thanks, Anupam. So as I mentioned, we've got a terrific team. We're very focused on the clinic right now and on the clinical data. So we've got senior leaders of both clinical development and clinical operations and as well as in the translational analysis arena. So we've got a team that's like firing on all cylinders to execute, they're supported by our great investigators. And then the clinical advisory board that we put in place, which was very much by design. These are people who have really unique insights on our trial. So Dr. Sharma ran the CheckMate study. We couldn't have a better adviser as our data comes in to really roll up her sleeves and help us interpret that and determine next steps.

The same thing with Toni Choueiri, he's really a thought leader in renal cell. Dr. Agresta has done a lot of work in breast cancer we -- in MARIO-1, we're studying melanoma patients, and Dr. Mike Postow. We've got truly world-class thought leaders. So we feel like we've got what we need to deliver on the data that we're really excited in the next 15 months, we're going to have a lot of data.

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

Operator [18]

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

Our next question comes from Soumit Roy with JonesTrading.

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [19]

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

Congrats on staying on track on multiple fronts. To get a little granularity on the data, what kind of data we're going to see at the end of this year, possibly fourth quarter on both the MARIO-3 and MARIO-1. Starting with MARIO-3 maybe the TNBC cohort. Should we expect out of the 60 patients, should we expect at least 30-patient data set? And what are we going to see? Are we going to see the standard response rate, possibly PFS of (inaudible) and cycle -- beyond cycle 2, like cycle 2, 3, 4, how the MDSC levels are panning out? Just to get some kind of sense of how much granular data are we going to see?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [20]

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

Yes. So clearly, the data that we'll read out sooner, it kind of goes, as you know, in sequential, the first thing we'll see is safety. The next thing that we'll see is response rates, our primary end point in CR rates. So those will be the first things. It will be unlikely that we'll see time-to-event readout of PFS or overall survival, just given that we're enrolling those patients now. So we wouldn't expect to have the time-to-event end points. Exactly how many patients will have it on -- depends on the cadence of enrollment, as we said, we're 2 months into the year, we've got a lot of excitement, and we've got lots and lots of sites initiations underway and sites that are up already. So we'll -- as we get closer to abstract deadlines when we know how many patients we both have enrolled and how many patients will be reporting on, we'll be able to update that. But we do expect to have data later this year that will be most likely safety and activity measured by response rates.

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [21]

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

Maybe this is a question for Jeff, and I'm kind of blanking off this thing. When you -- have you looked into like a preclinical model where MDSC knockouts like S100A9 mouse model. Do you see if you do xenograft -- TNBC xenograft, do you see them arriving more or less the same as in competent mice or better to get any sense how this might translate?

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

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

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

So Soumit, is your question more around safety in the MDSC?

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [23]

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

Efficacy, in fact, like how much really MDSC is contributing in a TNBC setting. We have a fairly good understanding in the bladder cancer from the CheckMate-275.

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

Jeffery L. Kutok, Infinity Pharmaceuticals, Inc. - Executive VP & Chief Scientific Officer [24]

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

Right. I'm trying to think of the -- other than our own data showing IPI-549's effect on those cells and decreased tumor growth and decreased delay in tumor growth in those models. I'm trying to sit here and think of -- I can't really come up with, off the top of my head, a model that specifically targeted the MDSCs in a genetic way that could answer your question, unfortunately.

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [25]

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

Got it. We can circle back on that.

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

Jeffery L. Kutok, Infinity Pharmaceuticals, Inc. - Executive VP & Chief Scientific Officer [26]

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

And it's a good question.

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

Soumit Roy, JonesTrading Institutional Services, LLC, Research Division - VP & Healthcare Analyst [27]

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

Lastly, just a thought, I mean you guys are kind of pushing forward on combining with the standard of care and -- do you have any thoughts on once you're -- you're trying to target the MDSCs but then there are other factors that are playing a pivotal role in the tumor micro environment like this. M2 macrophages and agents to convert it back to M1 or maybe Tregs agents to block Treg accumulation. Have you done any kind of dose combination, at least in the preclinical setting to see if they are a better combination than just combining with a standard of care IO combo?

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

Jeffery L. Kutok, Infinity Pharmaceuticals, Inc. - Executive VP & Chief Scientific Officer [28]

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

So just to be clear, our IPI-549 does both target MDSCs and blocks their migration as well as converting these immune-suppressive cells to more pro-inflammatory cell types. So you get 549 will do both of those -- serve both of those functions. We've looked at a variety of different models that targeted a number of different pathways specifically Tregs. I think there are fewer models that are specifically targeting Tregs. But we've looked pretty extensively and published most of the data targeting other mechanisms of immune suppression. Arcus has published -- presented at meetings on the combination of an adenosine antagonist and 549, and those are data that have largely been published that we've done.

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

Operator [29]

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

Our next question comes from Jim Birchenough with Wells Fargo.

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

Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [30]

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

It's Nick on for Jim this afternoon. And first off, thank you to Jeff putting up a year of often annoying questions from our group. Maybe just starting with MARIO-1. So the cohorts have now been fully enrolled. Can I just confirm that where we should expect to see data on 10 patients each (inaudible) during the course call, 20 non-small cell lung, squamous head and neck, MDSC high, 29 triple-negative breast, and then 40 in melanoma?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [31]

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

Yes. So Nick, I think our guidance that we've provided for the last years really remains intact, that we will be presenting the data that support trials that we're going forward with, while the data -- while the data is yet still evolving. We will, of course, present on all of the patients at some point when we've completed all the translational analysis. But our current focus will be on those cohorts for which we want to pursue a path forward, while we don't have any other -- there are no other PI3-kinase-gamma specific inhibitors in development today. We know that there are some that will be coming behind. And so we'd like to keep any insights that we have confidential as long as we can until we see a path forward, and that will be clear that we're announcing a new trial and going forward with them.

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

Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [32]

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

Okay. So just to be clear, then the focus is on really the TNBC patients?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [33]

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

Yes, I think you could look at all the hypotheses that we have in our studies today that we're going forward with. The fact that -- and we've already presented some of this that we see reductions in MDSCs that are the cornerstone for the MARIO-275 study. And then anything else that either supports our existing studies or to the extent that we're launching the new study.

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

Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [34]

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

Okay, okay. So -- and that's to be announced the new studies, obviously.

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [35]

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

Correct.

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

Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [36]

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

And then I noticed on the new clinical advisory cohort, there is no TNBC experts. Why is that?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [37]

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

Well, Sam has -- would play a key role at Genentech on the KADCYLA approval, and so while it was in HER2 positive breast cancer, he's done a considerable work in the breast cancer space. But it doesn't suggest that we will limit it to that. We may -- this is the first establishment of a clinical advisory board, and we'll work with them. And if we decide that we want to add an expert in TNBC, we may still do that as well.

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

Nicholas M. Abbott, Wells Fargo Securities, LLC, Research Division - Director & Associate Analyst [38]

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

Okay. And then the final one, and it just goes back to MARIO-3. Are there any early looks at this data for futility?

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [39]

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

No, not really. Given that we're going to be completing enrollment this year. By the time we have -- it's always the timing. We'll probably have completed enrollment by the time we have enough data to look at futility, and we're not going to stop it for that. So we're really powering through so there won't be an interim.

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

Operator [40]

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

At this time, I'm showing no further questions. I'd like to turn the call back over to Adelene for closing remarks.

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

Adelene Q. Perkins, Infinity Pharmaceuticals, Inc. - Chairman & CEO [41]

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

Thank you, Daniel. As you've heard today, all of us at Infinity are very excited about our progress in the near-term IPI-549 milestones that we stated on this call. And in closing, I'd like to briefly reiterate several key points that IPI-549 is a potentially transformative first-in-class agent with promising activity that enables innovative combination treatments. It is today the only PI3-kinase-gamma inhibitor in clinical development, and we have strong support for targeting MDSCs that underscore, particularly our randomized Phase II trial in MARIO-275. So we're excited about the potential of IPI-549 to make current immuno-oncology drugs better, and with 5 ongoing studies, we look forward to providing updates with near-term out -- data readouts, building on a strong financial position. So thanks particularly to our clinical investigators, patients, partners and the team at Infinity, who have contributed to the development and progress of 549 and to all of our investors. Thank you for joining us, and we look forward to keeping you apprised of our continued progress.

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

Operator [42]

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

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