Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) Q4 2023 Earnings Call Transcript
Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) Q4 2023 Earnings Call Transcript February 27, 2024
Syndax Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-1 EPS, expectations were $-0.99. Syndax Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, everyone. And welcome to the Syndax Fourth Quarter and Full Year 2023 Earnings Conference Call. Today’s call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I would like to turn the call over to Sharon Klahre, Head of Investor Relations at Syndax Pharmaceuticals.
Sharon Klahre: Great. Thank you, Operator. Welcome and thank you all for joining us today for a view of Syndax’s fourth quarter and full year 2023 financial and operating results. I’m Sharon Klahre and with me this afternoon to provide an update on the company’s progress and discuss financial results are Michael Metzger, Chief Executive Officer; Dr. Neil Gallagher, President and Head of R&D; and Keith Goldan, Chief Financial Officer. Also joining us on the call today for the question-and-answer session are Dr. Peter Ordentlich, Chief Scientific Officer; and Dr. Anjali Ganguli, Chief Business Officer. This call is accompanied by a slide deck that has been posted on the investor page of the company’s website. You can now turn to our forward-looking statements on slide two.
Before we begin, I’d like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in the company’s most recent annual report on Form 10-K, as well as other reports filed with the SEC. Any forward-looking statements made represent our views as of today, February 27, 2024 only. A replay of this call will be available on the company’s website, www.syndax.com, following its completion. With that, I am pleased to turn the call over to Michael Metzger, Chief Executive Officer of Syndax.
Michael Metzger: Thanks, Sharon, and thank you to everyone joining us on the webcast. 2023 was a year of tremendous progress in execution for Syndax, marked by the delivery of positive pivotal data and regulatory submissions for both revumenib and axatilimab. We look forward to continuing this momentum in 2024 with two potential approvals and commercial launches. Syndax is firmly on the path to distinguishing itself as a commercial-stage smid cap biotechnology company and with opportunities to expand well beyond the initial indications for revumenib and axatilimab, we envision creating long-term value with these franchises for years to come. On slide three, let me take a moment to review some recent accomplishments. With revumenib, our highly selective menin inhibitor, we made significant clinical and regulatory progress in the fourth quarter.
At the 2023 American Society of Hematology Annual Meeting in December, we presented robust data from the Phase 1 and Phase 2 portions of the AUGMENT-101 trial that included a late-breaking oral presentation highlighting pivotal results from the KMT2A acute leukemia cohort, as well as multiple Phase 1 combination trials that demonstrated revumenib’s ability to safely and effectively combine with standards-of-care. In late December, we announced the submission of an NDA filing for revumenib under the FDA’s Real-Time Oncology Review or RTOR program for the treatment of adult and pediatric relapsed or refractory KMT2A rearranged acute leukemia. Submitting the NDA under RTOR ensures early engagement with the FDA throughout the review process, helping to derisk the submission and provide a potentially expedited timeline to revumenib approval.
We expect to receive a PDUFA action date for revumenib this quarter, which should align with a third quarter approval date. For axatilimab, our anti-CSF-1R antibody, I’m excited to announce today that the FDA granted us priority review and a PDUFA action date of August 28, 2024, for the treatment of chronic graft versus host disease or GVHD, after failure of at least two prior lines of systemic therapy. Positive data from the pivotal AGAVE-201 trial presented at a plenary scientific session at ASH in December formed the basis of the BLA submission. And last quarter, we also initiated a Phase 2 double-blind randomized clinical trial for the treatment of idiopathic pulmonary fibrosis or IPF that Neil will later detail in this call. Financially, we are in a very good position.
We strengthened our balance sheet in the fourth quarter with an additional $258 million in cash, and Keith will go into more detail in our financials later in this call. We continue to prepare for commercialization in 2024. Our first-mover advantage is of high strategic importance and we are busy ensuring that we successfully execute two first- and best-in-class drug launches. For revumenib, we are focused on pre-launch activities and we are finalizing our go-to-market strategies for both revumenib and axatilimab that we look forward to communicating in the coming months. In January, we exercised our option under our agreement with our partner Incyte to co-commercialize axatilimab in the United States and provide 30% of the commercial effort, as there is a considerable benefit to promoting two products simultaneously to a highly overlapping and targeted physician-prescriber universe.
2024 is shaping up to be a historical year for Syndax as we prepare to launch two first- and best-in-class products, and I am confident that we have the expertise, resources and determination to achieve our goals. Now let’s turn to slide four and I’ll begin a recap of some recent clinical data for revumenib that investigators presented at the ASH Annual Meeting in December. There was significant excitement for revumenib in the reaction to the data that investigators presented, which clearly demonstrated revumenib’s potential to become a cornerstone for the treatment in NPM1 and KMT2A acute leukemia. The data presentations have translated to continued strong enrollment in our clinical trials through additional engagement from the medical community, as well as additional requests for investigator-sponsored trials that could ultimately expand the use of the drug once approved.
In the late-breaker presentation for the AUGMENT-101 pivotal trial, we indicated that KMT2A acute leukemia patients achieved clinically significant responses to treatment with a high overall response rate of 63% and responses were observed across all major subgroups. Revumenib delivered a high rate of deep responses with a CR/CRh rate of 23%, 70% of which were MRD negative. At the time of the data cutoff, the median duration of CR/CRh response was 6.4 months based on a Kaplan Meier estimate, with 46% or six patients remaining in response. Moving to slide five, in the AUGMENT-101 trial, 39% of the overall responder population proceeded to a stem cell transplant, which is higher than historical benchmarks in this population of less than 5%. Many of these patients proceeded to transplant prior to achievement of a CR/CRh. At the time of the data cutoff, 71% of patients who underwent a transplant had either restarted revumenib or were eligible to restart as maintenance therapy.
A few of these patients had been receiving maintenance treatment for as long as eight months, with several continuing on therapy, highlighting the potential for long-term treatment with revumenib. Physicians with whom we have engaged are impressed by revumenib’s ability to induce rapid tumor clearance in heavily pretreated patients, enabling many of them to undergo a potentially curative bone marrow transplant. Treating physicians have repeatedly told us that they want to use revumenib as early as possible during treatment to bring more patients to transplant and then extend responses by continuing treatment following transplant engraftment. We unanimously heard from KOLs at our ASH investor event and continue to hear from physicians today their belief that continued use of revumenib post-transplant should lead to the best possible outcomes and it is an attractive option for these patients.
Turning to slide six, the final pivotal cohort of the AUGMENT-101 trial continues to enroll relapsed or refractory NPM1 mutant AML patients. It is designed to enroll 64 patients and up to 20 pediatric patients. With multiple presentations highlighting the consistency of menin inhibition across NPM1 mutations and KMT2A rearrangements as a monotherapy agent and in combination with standards-of-care, we continue to see the excitement building for revumenib in NPM1. We are quite pleased with the recruitment in the trial and are reaffirming our guidance of expected completion of enrollment in the late first quarter or early second quarter of this year. We expect to report topline data from the trial in the fourth quarter of 2024, and importantly, we continue to look forward to a potential approval in 2025 based on an sNDA filing for NPM1 following revumenib’s anticipated initial approval in KMT2A acute leukemia.
The Phase 1 NPM1 data that we’ve reported for revumenib supports our conviction that revumenib could be an important treatment for this AML population. Across monotherapy and in combination, we’ve generated consistent results between KMT2A and NPM1 acute leukemia. In the Phase 1 portion of AUGMENT-101, 50% of NPM1 patients achieved an overall response and 36% achieved a CR or CRH, and importantly, all patients with a CR or CRH were MRD negative. Consistent with the KMT2A population, revumenib also enabled a high percentage of NPM1 responders to proceed to transplant, 43%, and responses have been durable. This is despite many of the patients failing prior venetoclax therapy and receiving prior stem cell transplants. It’s worth noting that revumenib has been well tolerated in patients with relapsed or refractory NPM1 AML.
In the Phase 1 results, there were no Grade 4 or 5 QT prolongations, no patients experienced more than Grade 2 differentiation syndrome and no patients discontinued due to treatment-related adverse events. Now turning to slide seven, we believe that revumenib will form the backbone of treatment for patients with KMT2A and NPM1 acute leukemias. Our clinical strategy extends beyond the initial relapse or refractory indications and into the frontline and post-transplant maintenance settings through combinations with approved therapies. In the frontline setting, there are basically two broad categories of patients. Those who are fit and can tolerate intensive chemotherapy, and those who are deemed unfit for intensive chemotherapy and would traditionally receive venetoclax plus azacitidine.
Our frontline strategy is to add revumenib onto standard-of-care treatments to show that revumenib can be used effectively in combination, thereby increasing efficacy without negatively impacting the tolerability or safety profile of those regimens. We started combination development with venetoclax plus azacitidine in frontline unfit AML population in the BEAT-AML trial. The trial is expanding to validate the recommended Phase 2 doses and we expect to have an additional data update for this trial later this year. In parallel, we are planning the venetoclax plus azacitidine pivotal trial that we expect to initiate by year end. To address frontline AML patients fit enough to tolerate intensive chemotherapy, we initiated a Phase 1 dose escalation trial of revumenib in combination with standard-of-care induction therapy known as 7+3.
Here we also anticipate identifying an RP2D for revumenib and initiating a pivotal trial for this combination soon thereafter. On slide eight is the data from the BEAT-AML trial, a Phase 1 trial being conducted by the Leukemia & Lymphoma Society. In this trial, frontline AML patients who are unfit for induction chemotherapy are dosed with a triplet of revumenib, venetoclax and azacitidine in 28-day cycles. In an interim look at data from 13 patients, 100% achieved a complete remission or CRC, and all patients for whom we had an MRD assessment achieved an MRD negative response. This is significantly higher than what would be expected from venetoclax plus azacitidine alone, based on the results of the VIALE-A trial where patients achieved a 66% CRC rate and only 24% achieved an MRD negative response.
Importantly, I’d like to emphasize that there was no impact on the safety or tolerability observed by adding revumenib to this doublet regimen. Turning to slide nine, revumenib was also evaluated in another oral venetoclax combination among patients with relapsed or refractory AML. Interim data from this trial, known as SAVE AML was conducted by investigators from the MD Anderson Cancer Center and presented at ASH. The SAVE trial evaluated the oral combination of revumenib, venetoclax and a fixed-dose combination of decitabine and cedazuridine in relapsed or refractory AML or mixed-phenotype acute leukemias. In the interim presentation, nine patients with either NPM1, KMT2A or NUP98 mutations were enrolled into the trial. These patients had received a median of three prior lines of therapy and over half of them had received prior venetoclax and prior hypomethylating agents.
At the interim assessment, 100% of patients achieved a response and 78% achieved a complete remission. Importantly, responses were observed across all three patient subsets, NPM1, KMT2A or NUP98. This triple combination was also well-tolerated at both active doses of revumenib in the trial, including the current monotherapy RP2D with no new or increased safety signals observed beyond what would be expected with venetoclax and a hypomethylating agent. Now to slide 10. KMT2A and NPM1 acute leukemias represent up to 40% of all AML patients and there are no FDA-approved targeted therapies for this population. Inclusive of the expansion opportunities, there is the potential to address upwards of 12,000 NPM1 and KMT2A acute leukemia patients across various settings.
We believe relapse or refractory KMT2A acute leukemia alone represents a $750 million market opportunity in the U.S. The annual incidence of KMT2A acute leukemia is about 2,600 patients and the majority are refractory to frontline standard-of-care treatments. We estimate a median duration of therapy across the treated population of approximately nine months and we believe the clinical data supports pricing competitively with other targeted therapies in AML, such as the FLT3 or IDH inhibitors. We anticipate that with the only age and disease agnostic label in KMT2A acute leukemia, along with no other treatment options approved in this population and no near-term competition, revumenib should become the treatment of choice for patients with relapse or refractory KMT2A acute leukemia.
We expect that our first-mover advantage and the experienced physicians will gain treating patients with revumenib could extend meaningfully beyond KMT2A and allow us to build a formidable franchise in the next few years, augmented by a second indication in NPM1 AML. Our market research suggests that if approved, oncologists are likely to prescribe revumenib as either their second- or third-line agent of choice for the treatment of NPM1 AML. We estimate that this population would be slightly larger than the relapsed or refractory KMT2A acute leukemia population and based on our Phase 1 results, we also believe overall efficacy and treatment duration will be consistent between the KMT2A and NPM1 relapsed or refractory populations. Having two distinct market segments in acute leukemias available to us, KMT2A and NPM1, would create a total accessible population of somewhere between 5,000 and 6,500 patients in the relapsed or refractory setting and an addressable market opportunity [Technical Difficulty] and we are also investigating the opportunity to expand to solid tumors.
Our proof-of-concept, signal-seeking Phase 1 clinical trial in metastatic colorectal cancer is ongoing. This trial is based on preclinical science that supports the role of menin-KMT2A interaction in beta-catenin driven tumors. We are following these patients and expect to provide an update on the progress of the dose escalation phase of the trial in the second quarter of 2024. We would perceive single-agent activity reflected as responses or prolonged stable disease as encouraging in this third-line patient population. Let me now turn to axatilimab, our monoclonal antibody targeting the CSF-1 receptor beginning on slide 11. As noted earlier, we’re thrilled that the BLA for axatilimab in adult and pediatric patients with chronic GVHD after failure of at least two prior lines of systemic therapy has been given a PDUFA action date of August 28, 2024 by the FDA.
Data from the global pivotal AGAVE-201 trial form the basis for this application. The AGAVE-201 trial, which was showcased during the plenary scientific session at ASH, met its primary endpoint of overall response rate by cycle 7, day 1, using the 2014 NIH consensus criteria for chronic GVHD across all three dose groups. The overall response rate was 74% at a dose of 0.3 milligrams per kilogram administered every two weeks. The responses were durable, with a median duration of response not yet reached at the time of data cutoff and 60% of responders were still responding at one year. Axatilimab was well-tolerated in the trial with a low 6% rate of discontinuation. The most common adverse events were consistent with the on-target effects observed in prior trials.
Axatilimab is differentiated from other approved therapies for chronic GVHD in that it is the first investigational chronic GVHD treatment to target inflammation and fibrosis through the inhibition of disease-associated macrophages. On slide 12, you will note that responses, including CRs, were seen across all organs involved, and notably in fibrosis-dominated organs, including esophagus, joints, fascia and lungs. Over 85% of patients reported a reduction in chronic GVHD-related symptom burden in AGAVE-201, which supports the potentially pronounced impact this mechanism can have on patients suffering from chronic GVHD. These results reinforce its potential as a first- and best-in-class CSF-1R monoclonal antibody in chronic GVHD. I’ll now turn the call over to Neil to speak about the IPF trial that we started in late fourth quarter, as well as the scientific rationale for the use of axatilimab in IPF.
Neil?
Dr. Neil Gallagher: Thank you, Michael. Turning to slide 13, we’re excited about the opportunity to expand the development of axatilimab into fibrotic diseases such as idiopathic pulmonary fibrosis, where the monocyte macrophage cell lineage plays a key role. IPF is a chronic fibrosing lung disease for which there are limited treatment options. Only two drugs have been approved and both have only been shown to slow but not halt or reverse disease progression. The only opportunity for a cure is lung transplant, which is limited to less than 5% of patients. With the estimated U.S. prevalence of IPF growing to over 180,000 people by 2026, there is an increasing need for new, well-tolerated and effective medication. There are several reasons why we are excited to pursue fibrotic disease outside of chronic GVHD and why we have confidence that axatilimab may provide meaningful benefit in IPF.
There is a growing understanding of the important role that macrophages play as a master regulator of the fibrotic process. There’s a wealth of preclinical and clinical data indicating that the CSF-1 signaling pathway may play an important role in the development of pulmonary fibrosis. One such preclinical data set from an in vivo bleomycin pulmonary fibrosis model is shown in the panel on the left. The bleomycin model is commonly used to investigate the potential of therapies to address lung fibrosis, and in this experiment, animals were treated with an anti-CSF-1R antibody or Saline control nine days after the administration of bleomycin. The histological section on the top left shows a normal lung with extensive white airspace. Conversely, the bleomycin treated lung has extensive fibrosis, as indicated by the dark colored material.
Strikingly, the lung treated with bleomycin and then therapeutically with an anti-CSF-1R antibody on day nine has significantly less fibrosis and markedly preserved white airspace. Analysis of the extent of fibrosis using the Ashcroft score indicates that significantly less damage to the lungs occurs in the presence of the anti-CSF-1R antibody. Even more encouraging are the clinical data for axatilimab in patients with pulmonary manifestations of chronic GVHD, where clinically notable improvements in lung function have been observed. The panel on the right shows the data originally presented at the American Thoracic Society meeting last year from patients in the Phase 1/2 chronic GVHD trial of axatilimab who had chronic GVHD-related bronchiolitis obliterans syndrome or BOS.
As you can see, most patients experienced improvement or slowing of decline of pulmonary function, which is very unlikely to occur spontaneously. These data, in conjunction with the organ-specific data from the AGAVE-201 trial presented earlier, strongly support the therapeutic potential of axatilimab in interstitial lung diseases, including IPF. Turning to slide 14, here we lay out the design of a recently initiated multinational Phase 2 trial of axatilimab in IPF. It is a 26-week, double-blind, placebo-controlled and multicenter trial, which aims to include 135 patients randomized 2-to-1 to receive 0.3 milligram per kilogram of axatilimab every two weeks or placebo on a background of standard-of-care. The primary endpoint is the annualized rate of decline in forced vital capacity or FVC.
Key secondary endpoints include disease progression, quality of life specific to patients with destructive airways disease and others. We believe this study is robustly designed to demonstrate proof-of-concept for axatilimab in IPF, thereby enabling us to advance the molecule into phase three pivotal development potentially. Let me now turn the call back to Michael.
Michael Metzger: Thank you, Neil. Turning now to slide 15, which highlights the broad clinical and commercial opportunity for axatilimab. Approximately 14,000 U.S. patients suffer from chronic GVHD, 50% of whom require treatment beyond second-line due to disease progression, inadequate response or disease manifestations that aren’t wholly addressed with current treatment. There are no cures for this advanced population of chronic GVHD patients, and patients who are initially treated with corticosteroids are then cycled through a variety of additional therapies. While patients may be treated with any of the approved therapies, the order in which they are used may depend on the physician’s experience with how a given agent may address specific manifestations of the disease.
Newer entrants, Jakafi and Rezurock, have had successful commercial launches, which speaks to the unmet need in chronic GVHD and the substantial commercial opportunity for a differentiated agent such as axatilimab. Axatilimab suppresses monocyte-derived macrophage activation and proliferation, which may provide more comprehensive control of the disease than currently approved therapies. Addressing inflammation and fibrosis in one mechanism of action is a key differentiator and also supports moving axatilimab earlier in the treatment paradigm to potentially prevent organ damage before it occurs. Because axatilimab is an antibody, drug-drug interactions are expected to be minimal and axatilimab’s unique mechanism of action may offer the benefit of being an ideal combination partner with standard-of-care therapies currently used for the treatment of chronic GVHD.
The opportunity to expand to ex-U.S. markets and into other high-value indications could build significant additional value for axatilimab over the next few decades. We’re looking forward to the insight-led initiation of additional trials of axatilimab, including a Phase 2 combination trial with Jakafi and a Phase 3 combination trial with corticosteroids, which is expected to commence in mid-2024. I’ll now turn the call over to Keith to review our financial results. Keith?
Keith Goldan: Thank you, Michael. Turning to slide 16. As Michael mentioned earlier, in the fourth quarter, we strengthened our balance sheet, adding $258 million, providing strong validation of Syndax’s potential from both existing, as well as new high-quality institutional investors. The $600 million on the balance sheet at year-end is expected to provide cash runway through 2026. Turning to the income statement. Operating expenses for the fourth quarter were $77.9 million, comprised of $55.1 million of research and development expense and $22.8 million of selling, general and administrative expense, in line with guidance. Looking forward, our financial strength enables us to focus on the execution of advancing our pipeline and achieving an exceptional launch of revumenib and axatilimab later this year.
Keeping in mind that we’ve always embraced a disciplined approach to resource allocation, I’d like to provide financial guidance for the first quarter and full year 2024. For the first quarter, the company expense -- expects research and development expense to be $56 million to $62 million and total operating expenses to be $82 million to $88 million. For the full year 2024, the company expects research and development expenses to be $240 million to $260 million and total operating expenses to be $355 million to $375 million including approximately $43 million of non-cash stock compensation expense. With that, let me now turn the call back over to Michael.
Michael Metzger: Thank you, Keith. As you have heard during the call, 2023 was a landmark year for growth and execution. As evidenced by our positive pivotal trial readouts and two regulatory submissions for our two lead drug candidates, both of which are first and potentially best-in-class treatment, this is only the beginning of what’s to come for Syndax. We are in a significant transition into a fully integrated biopharmaceutical company serving multiple patient populations of high unmet need. Both programs offer the potential for broad franchise opportunities beyond their initial registration indications, adding to Syndax’s long-term growth potential. We have ambitious goals and milestones that I’ve set out for 2024 and that are laid out on slide 17.
I’m confident that we have the right plan and team in place to execute on them. As always, I’d like to express my sincere appreciation to the Syndax team, collaborators and most importantly, the patients, trial sites, and investigators involved with our clinical programs. Through your important work, we are getting closer to delivering on our mission of improving the lives of patients with cancer. I’d also like to thank our committed long-term investors who continue to share in our vision and support us in building Syndax. With that, I’d like to open the call for questions. Operator?
Operator: [Operator Instructions] Our first question comes from Peter Lawson with Barclays. Please go ahead. Your line is open.
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