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Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX)

Update on IDX184 and IDX19368 Development Programs Conference Call

February 4, 2013 4:30 am ET

Executives

Teresa Dahlman – Director-Corporate Communications

Ronald C. Renaud Jr. – President, Chief Executive Officer and Director

Douglas Mayers – Executive Vice President - Clinical Development and Chief Medical Officer

David N. Standring – Executive Vice President and Chief Scientific Officer

Analysts

Katherine Xu – William Blair & Co.

Alethia Young – Deutsche Bank

Heather Behanna – JMP Securities

Ying Huang – Barclays Capital

David Friedman – Morgan Stanley & Co. LLC.

Operator

Good day, ladies and gentlemen, and welcome to your conference call to provide an update on IDX184 and IDX19368. At this time, all participants will be in a listen-only mode. But later, there will be an option to ask questions and instructions will be given at that time (Operator Instructions). And as a reminder, today's conference is being recorded.

And now, I would like to introduce your host for today, Teri Dahlman.

Teresa Dahlman

Thank you. Good afternoon and welcome to Idenix's conference call to provide an update on IDX184 and IDX19368 development programs. With me today are Ron Renaud, President and Chief Executive Officer, Daniella Beckman, Chief Financial Officer; David Standring, Chief Scientific Officer; and Doug Mayers, Chief Medical Officer.

Before we begin I will review our Safe Harbor statement. Today's discussion contains statements that are forward-looking under the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations and assumptions that are subject to risks and uncertainties and involve a number of factors that could cause actual results to differ materially.

Additional information concerning these factors is contained in our filings with the SEC, which are available on the investor section of our website. While we may elect to update forward-looking statements in the future, we specifically disclaim any obligation to do so even if our estimates or assumptions change. You should not rely on these forward-looking statements as representing our estimates of any date subsequent to today. On today's call, Ron will provide an update on the IDX184 and IDX19368 programs, and then we’ll open the call for Q&A.

I will now turn the call over to Ron.

Ronald C. Renaud Jr.

Thanks a lot, Teri. Today, Idenix announced that we have elected not to continue our IDX184 and 19368 HCV development programs. As a reminder, IDX184 and IDX19368 are two prime methylguanosine-based nucleotide polymerase inhibitors. IDX184 is in Phase II testing and for IDX19368 we had filed an IND but had not initiated patient dosing. In August 2012, the FDA placed IDX184 on partial clinical hold and IDX19368 on clinical hold due to severe cardiac adverse events seen in the Phase II clinical trial of BMS986094, also a two prime methylguanosine-based nucleotide inhibitor, previously being developed by Bristol-Myers Squibb.

In December, we completed the submission of requested cardiac safety data for IDX184 to the FDA. These data included cardiac safety measurements from the ongoing Phase II study of IDX184 in combination with pegylated interferon and ribavirin, in which we observed no clinical evidence of severe cardiac findings. On Friday after reviewing our response package, the FDA verbally communicated to us that both programs will remain on clinical hold. After our discussion with the FDA, we could not define a viable path forward for either IDX184 or IDX19368.

We have agreed to two additional cardiac safety visits for the patients in the IDX184 Phase II study at 6 and 12 months following the echocardiograms we obtained when the clinical hold was initiated. Our decision to discontinue IDX184 and IDX19368 development was difficult but made a bit easier knowing that Idenix will continue to have a strong presence in HCV with additional uridine-based nucleotide prodrugs.

Our intense focus on nucleotide prodrugs over the last two years has generated some very promising preclinical candidates and the first uridine nucleotide candidate is on track to file the IND in the first half of 2013. We plan to have additional next-generation non-guanosine nucleotide prodrug candidates at IND-ready stage by the end of this year. The goal of our nucleotide discovery program was not just to find another nuke to treat HCV but to develop a better one.

We've looked at over 280 different nucleoside analogs and more than 30 different prodrug types, which has resulted in the generation of more than 2100 nucleotide prodrugs. We set out to understand how changes to the prodrug, the sugar, and the base would lead to increased triphosphate production, better liver targeting, and improved safety. This led to a target product profile with some very high thresholds for taking our current and future candidates forward.

The results of this intense effort has generated compounds that will put us in a position of nucleotides in the clinic that we believe will be highly competitive with those currently in clinical development. Further, we are pleased with the progress of IDX719, our potent and pan-genotypic NS5A inhibitor for HCV. Recently, we announced that we entered into a nonexclusive collaboration with Janssen Pharmaceuticals for the development of all oral direct-acting antiviral or DAA HCB combination therapies incorporating IDX719.

Following an initial drug- drug interaction study to begin in the first quarter of 2013 and pending approval from regulatory authorities, we expect to begin the first Phase II study under this program of a 2DAA regimen including IDX719 simprevir in the near term. We believe the ongoing work with our new uridine nucleotide prodrug as well as our NS5A inhibitor IDX719 and the ongoing collaboration with Janssen put Idenix in a very good position to explore a number of different combinations that may ultimately lead to a superior regimen to cure HCV. We will continue to evaluate additional collaborations for our programs as we move forward.

Our goal remains fixed on a safe, potent, low-dose pangenotypic regimen to treat as many HCV-infected patients as possible. We will continue to leverage our core medicinal chemistry and specifically our nucleoside chemistry expertise, as well as a strong intellectual property portfolio to maintain our presence in HCV for the foreseeable future.

With that, I will now open the call for Q&A. Operator, any questions?

Question-and-Answer Session

Operator

(Operator Instructions) So, we’ll take our first question from Geoff Meacham from JP Morgan. Please go ahead.

Unidentified Analyst

Hi. This is actually (inaudible) in for Geoff Meacham. Thanks for taking the call. A quick question about your uridine nucleotide analog is there any gating factors that you may foresee or anything?

Ronald C. Renaud Jr.

No. In fact, we actually initiated a dialog with the FDA already to find out what they will be looking for in terms of preclinical work as we prepare for the IND. So, we are in communication with the FDA on that, we have already received some feedback and are acting on that.

Unidentified Analyst

Great. Thank you, very much.

Ronald C. Renaud Jr.

Thanks.

Operator

Thank you. And we’ll take our next question from Katherine Xu from William Blair. Please go ahead.

Katherine Xu – William Blair & Co.

Yeah. Hi, good afternoon. I am just wondering what did the FDA say, you cited – let's say what did they cite as a reason for not removing the holds? It's just not enough data or they just don't feel comfortable or – they need the 6 and 12 months echoes? I mean, what exactly did they?

Ronald C. Renaud Jr.

Yeah. Katherine, I think, we are not going to get too much into the details of the specific dialog we had with regulatory authorities, but Doug is here. I'll let him give you his high-level thoughts on that.

Douglas Mayers

Hi, Katherine the key issues were that we really haven’t worked out a mechanistic basis for the toxicity that was seen with 094 and we have been able to definitively work out whether it was the prodrug, whether it was high exposure to 2 methyl G what the basis for that was in the programs. And the other, I think the key stumbling block is we really don’t have a biomarker for this process in the clinic other than echocardiograms, which obviously you would already have injury if you saw changes on those.

Katherine Xu – William Blair & Co.

All right. And then, apparently you guys have accumulated a lot of experience with regards to preclinical safety and how predictive they are to the clinic based on your – the clinical holds and development over the past few years. I'm just wondering for the upcoming uridine-based nuke, looking at the profile so far, how predictive do you think the clinical safety that you observed so far with that compound would be to reflect the clinical safety?

David N. Standring

Yeah, I mean, that’s – this is David Standring, Katherine, that’s a difficult question to answer in the sense that we don’t exactly know what the – the issue is with the BMS compound and therefore there's a certain amount of this that we don't know and we can't really follow. All I can tell you is that we have been increasing in a very big program the intensive effort on nucleotides.

We have been increasing the bar in terms of triphosphate formation levels of that in terms of the specificity or selectivity of tissue targeting and in terms of the safety bar per se. And we've also learned a lot from what we’ve done with the 184 and 368 programs in terms of addressing the issues with BMS. So, we’ll bring all of that to bear, we will be doing a lot of additional safety assessments and so far I think so good, we are obviously not at the end of the program there. And as Ron mentioned earlier, we have also initiated dialog with the FDA and so we have a certain amount of feedback there and we are being very careful to implement that. There will be a lot of extra safety checks and data that we are doing to give ourselves as much reassurance and leeway as possible.

Katherine Xu – William Blair & Co.

Thank you.

Operator

Okay. Thank you. And we’ll take our next question from Alethia Young from Deutsche Bank. Alethia, please go ahead.

Alethia Young – Deutsche Bank

Hey guys, thanks for taking my questions. One is just kind of I wanted to get a little of feel around like kind of what are the lessons that you kind of learned from the hold that could be leveraged for the uridine program? And then, also I just wanted to get your thoughts on like I know the FDA kind of is moving somewhat conservatively with a lot of early-stage nuke programs, but can you just kind of talk about how you might – like have you had any experience with them over the past year or so that may help with those timelines?

Ronald C. Renaud Jr.

So Alethia, this is Ron. I think lessons learned, I don't think there's anything incredibly incremental here, this is part of drug development and unfortunately, I think as Doug and David have just pointed out in some of their responses, this was a very difficult one to predict if not impossible. This is a toxicity that the mechanism for which is completely not understood at this point, I think, a standard battery of GLP preclinical toxicity assays and tests largely unable to predict this specific toxicity, so I think for us you've got to pick up the pieces.

You got to move on. And what we’ve learned through this process is to make sure that we dot the I’s and cross the T's going forward in terms of concerns around this cardiac tox risk. So I think if there's anything we're doing differently on a go forward basis, it’s really trying to make sure we characterize the best as we can the cardiac or the potential cardiac profile of this compound, which is probably something neither us or other sponsors were doing prior to the events of last summer precipitated by what happened. I don't know, Doug or David, if you have anything you'd want to add to that.

Douglas Mayers

Yeah, this is Doug. I think that the big thing you are going to see is we’ve added a battery of cardiac safety evaluations to both the preclinical and clinical programs that will be conducted early on using the new molecules.

Alethia Young – Deutsche Bank

And can I ask one quick follow-up? Just are the guys, are the people at the FDA you are working with similar or different than like when you moved forward in the preclinical program? Just trying to see if there's any overlap in kind of the staff there or if you can disclose that?

Douglas Mayers

Each drug has its own team that works, but there is a significant overlap especially at the senior levels of the division and the people who are overseeing all of these drugs.

Ronald C. Renaud Jr.

I think, Alethia, I would add thing to your first question and it’s clear to watch that there is a concern here with the two prime methylguanosines specifically. I think beyond that the agency, it certainly feels like there is still, they will continue to look at each compound on a case-by-case basis. So, I think it’s – I would caution, I would strongly, strongly caution against trying to apply one principle to the whole cast of nucleotide prodrugs that are in clinical development. I think outside of the two prime methylguanosines, my belief is that they will continue to look at these on a case-by-case basis.

Alethia Young – Deutsche Bank

That's very helpful, thanks.

Douglas Mayers

You bet.

Operator

Okay. Thank you. And we’ll take our next question from Heather Behanna from JMP Securities.

Heather Behanna – JMP Securities

Hi guys, thanks for taking my question. I think most of my questions have already been answered. Just if you can give any color if the prodrug strategies, I know you have looked at a lot of them, but if you – if the uridine nuke is in the same class as 184 or if you're bringing a new prodrug strategy forward?

Ronald C. Renaud Jr.

Yeah. We haven’t specified exactly what the strategy is, but I will tell you it’s a different prodrug strategy than IDX184.

Heather Behanna – JMP Securities

Great. Thank you.

Ronald C. Renaud Jr.

Sure.

Operator

Thank you. And our next question is from Ying Huang from Barclays. Please go ahead.

Ying Huang – Barclays Capital

Hey, thanks for taking my questions as well. I kind of like have a philosophical question here, maybe for Ron. Given where Gilead is in terms of (inaudible) development, they just unveiled the Phase III data this morning and they've given, there's another new from Vertex in Phase II. How many news do you think the markets can accommodate? And I was wondering do you think your emphasis going forward will be discovering new nukes or probably putting more money behind that, I mean, and trying to monetize that asset? Thanks.

Ronald C. Renaud Jr.

So, look Ying, nothing is across – in the way of nucleotide or nucleotide prodrugs, nothing is across the finish line at this point, I think the furthest along is the data that we saw this morning, we see opportunities in the data that was revealed this morning, as I mentioned, we looked at a number of different potential prodrugs over the last two years. And as I said, we generated more than 2100 nucleotide prodrugs with a goal of not just coming up with a better nuke.

But or one that's as good as what's out there, but what we're were truly looking for something that was better, something with better liver targeting, something with better triphosphate generation. So we, until the last gun is fired, we believe there is a significant opportunity in the HCV space. I think with other competitors that are out there, we're not that far behind relatively speaking.

And as we think about the fact that this is going to be a combination approach, 719 so far looks to be a best in class NS5A inhibitor, by the end of this year, we are hopeful that we’ll have a proof of concept study wrapped up with our new uridine compound, so we think will be very well positioned to be very competitive. We won’t be the first to the market, but we will be disruptive when we get there.

Ying Huang – Barclays Capital

Thank you.

Operator

Okay. Thank you. And I'm showing just one more question in the queue. Coming from David Friedman from Morgan Stanley.

David Friedman – Morgan Stanley & Co. LLC.

Hi, thanks for taking the question. Just on the collaboration with JNJ, can you just, I know you guys have laid out some initial timelines in the press release that announced that. But can you give any updated timelines about A, whether there's going to be any enrollment sort of pacing issues like we've seen with the nukes or whether since this is a non-nuke regimen there is – it's just go as fast as you can? And then given that you guys are in control of the trial, will we be seeing RVR data at some point either by the end of the year or otherwise?

Ronald C. Renaud Jr.

Yeah. So, David all good questions and I don't think we are going to give much more of an update than what we said when we put out the release a week ago. What I would tell you is it was important to us here at Idenix that we run the trial in terms of being able to move quickly, and our feedback from the KOLs and from the potential investigators is that there is a still a good amount of patients out there ready to go on clinical trials. So we really don’t see any gating factors in terms of enrollment as we move forward here, so I think once we get going, things will go as quickly as we can possibly make them go. Doug, our Chief Medical Officer, can add some color to that.

Douglas Mayers

Yes, at this point, we think the enrollment will not be a major issue for us. I would remind you, though because this is the first time we have gone from three days to three months. We will be doing a 30-patient cohort of three doses, looking at that data at one month, and then enrolling the rest of the patients into the study. So there is a pause as we look at the safety and efficacy data from the first 30-patients at one month, but we don’t think this will slow the trial down very much, because we can continue screening and get the remaining patients lined up and ready to go as soon as we’ve had the safety review.

David Friedman – Morgan Stanley & Co. LLC.

Great, so is it possible, just as a quick follow-up, that we would, that you guys would show the first 30-patient data as a sort of little mini data set or is that just going to be held until the full trial enrolls?

Ronald C. Renaud Jr.

Yeah. Dave it’s a good question. I think, look, we would have to discuss that, we may be running the trials, but would also want to have that discussion with the folks at Janssen before we make any decisions at this point on how the data is going to be released. The only thing I can say on that is stay tuned.

David Friedman – Morgan Stanley & Co. LLC.

All right. Thanks very much.

Douglas Mayers

You bet.

Operator

Okay. Thank you. I would now like to turn the call back to Teri Dahlman for any closing remarks.

Teresa Dahlman

Thank you for joining us on the call today. Please feel free to call if you have any questions.

Ronald C. Renaud Jr.

Thank you.

Douglas Mayers

Thank you.

Operator

Ladies and gentlemen, this does conclude your conference. You may now disconnect and have a great day.

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