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Idenix Pharmaceuticals Inc. (NASDAQ:IDIX)

Barclays Global Healthcare Conference Transcript

March 13, 2013 3:15 PM ET

Executives

David Standring - EVP and Chief Scientific Officer

Analysts

Ying Huang - Barclays

Ying Huang - Barclays

Okay. Good afternoon. My name is Ying Huang. I'm the U.S. Biotech Analyst here at Barclays. With us today here the next presenting company is Idenix Pharmaceuticals, and then I’m very pleased to introduce David Standring. He is the EVP and also Chief Scientific Officer for company.

With that, let me just turn the podium to David. Thanks.

David Standring

So, thank you, Ying for the introduction and thanks to Barclays for the opportunity for Idenix to present here today. So before I begin, this presentation contains forward-looking statements and for a detailing of our risks and uncertainties, I refer you to our SEC findings many of which -- filings many of which can be found on the Idenix website.

So as you know, Idenix is focused on the development of next-generation oral antiviral combination treatments for hepatitis C infection and we are basically pursuing direct acting antivirals or DAAs.

I’m going to start the presentation today by a review of our pipeline, highlights here and I’ll start with IDX719, which is our NS5A inhibitor, which recently completed, last summer basically a three-day proof-of-concept study. And showed favorable safety and potent antiviral activity in different genotypes in HCV infected patients.

So IDX719 was recently as of January the subject of non-exclusive collaboration with Janssen. This basically puts us into a position where we can do all-oral Phase II combination trial, which we expect to begin in the first half of 2013.

And we’ll also be doing a second combination trial with three DAA agents, involving two from Janssen and that will begin later this year we believe. So I’ll go into those details in subsequent slides.

I’ll also be talking about our new work on the HCV Nucleotide Inhibitor Program, the focus of very intensive discovery effort and while we recently announced the discontinuation of the development of 2'-methyl G analogs, IDX184 and IDX19368, due to unfortunate safety incidence seen with the BMS, 2'-methyl G analog BMS-094.

I think on the bright side from this we actually have the opportunity to focus on our next-generation uridine nucleotide analog and analogs. And we have one at the moment in IND enabling studies which we expect to filing in the first half of 2013 and this I think is a very promising molecule. And we also have other efforts seeing that producing nucs in 2013, other IND enabling studies. And I’ll be going into those programs in the few slides at the time.

Then I think very importantly, last summer we restructured our nearly 10-year old agreement with Novartis and we believe that restructuring which amongst other things terminate Novartis’ right to licensing our pipeline candidate, actually enhances our strategic flexibility and gives us an opportunity to develop an optimal DAA portfolio both with internally and externally derived compounds. So this is an important facet for us.

And so, between the restructuring and our internal candidate, IDX719 our new uridine nucleotide analog and with the partnership with -- collaboration with Janssen, which brings in two of their particular DAA agents.

I think 2013 we expect to be a very exciting year in which we'll be able to bring forward multiple paths to evaluate in all-oral combination HCV regimen in the clinic and we’ll have three of those trials ongoing before year end if everything works according to plan.

Before I go into more depth in each of our programs, I just wanted to turn for a moment the HCV landscape and the HCV market, and I’m going to summarize that in three slides.

So I think you’re all aware of the size of the market, more than 170 million people HCV infected by current estimate. And these patients basically cover six different genotypes and I think one thing we tend to think about HCV as a genotype 1 phenomenon that’s because really most of the efforts and many of the drug companies at this point aim the genotype 1.

Now obviously in the 11 million to 12 million HCV infected patients that reside in developed countries, the U.S., the EU and Japan, genotype 1 is indeed the dominant genotype covering about 70% of the patients.

But even within the developed country markets genotypes other than 1 comprise about 30% of the market and worldwide more than about half of the -- roughly half of the 170 million infected individuals are actually genotypes other than 1. And this is quite an interesting distribution of genotypes, genotypes 6 being quite prevalent in China for example and genotype 3 is prevalent in quite a bit of Asia in various forms.

And so in order to really capture the most of these market, we believe that its very important to produce the safe, potent and pan-genotypic regimen, regimen that can actually capture all of the different genotypes without the need for much diagnosis. And so the important things to understand is that everything that Idenix is doing is to -- is directed towards deriving asset with this kind of properties.

It’s also important to realize the market size and the increase in treatment over the next few years. And it’s important to realize that some two-thirds of patients that have HCV at this point or individuals that infected with HCV don’t even know that they have HCV.

And over the next few years I think diagnosis rates will increase quite dramatically and that will increase even further as more effective DAA therapies come along and with increase in diagnosis will come an increase in treatment.

And we estimate and many others too that over the next 15 years or so between 2010 and 2025, the population of treatable HCV patients will essentially double, if not more than double.

And so this gives a tremendous opportunity and while you see that according to the modeling that we’ve been involved with, the number of treated patients reaches a maximum in about 2021. I think an interesting feature of the modeling that we’ve been involved with this is that, although rates drop after that, they don’t drop at a very fast rate. And that we believe is because it will take some time to get all of the patients that are out there diagnosed and into treatment. It will simply take quite a lot of time to get these patients through the system.

And I think this situation is even more marked when you go to the rest of the world, because of the 160 million or so patients who are not within the EU and U.S. and Japan, some 60 million for instance are in Brazil, India and China. And of those it’s estimated that only around 3 million patient, so 5% of the population is actually diagnosed.

So again diagnosis rates will be very important here and again, especially for this market having a pan-genotypic something that safe, potent and pan-genotypic is going to be very important for capturing the most of this global marketplace.

So, obviously, the landscape of HCV is changing very quickly as you will know and very soon the first DAA combinations will come to market sooner than we would have though some time ago.

And clearly, the current DAA combinations that are heading towards market are potent, safe, convenient for the most parts certainly. And they have a high barrier to resistance. But I’ll also note that they are focused for the most part on genotype one and treatment-naïve patients.

And I think that leaves a significant opportunity because in future, we’re going to need a pan-genotypic regimen that actually can treat a lot of patients because those are not really currently, very treatable null responders. They are difficult to treat patients.

Null responders, fibrotic patients, cirrhotic patients, transplant patients, various DAA failure patients and co-infected patients. And all of these properties will be particularly important, I think in the emerging markets.

And so again, pan-genotypic, safe, potent regimen is the best way to approach all of these difficult to-treat patients of different genotypes in the different markets. And again I think sort of -- this is one size, fits all approach and the Idenix drugs fit very well with this kind of patent.

So with that, I'll return back to our pipeline and I’ll start there by outlying what we’re going to do by laying out what we’re going to do basically over this next year. And I think the key thing here is that 2013 will bring some very exciting opportunities for Idenix with multiple paths forward towards DAA combination.

And in particular, I think with the Janssen collobaration, we’ll be able to start fairly early in the year. We’re currently actually doing DAA studies with 719 or NS5A. And with simeprevir and by the first half, we will also go into Phase II combination studies before the end of the first half.

And that will take us into a pretty robust Phase II that will go throughout the rest of the 2013. With simeprevir and also the Janssen, non-nucleotide TMC055, we will actually be able to go into hopefully three DAA combination, plus or minus ribavarin that will take us into Phase II study, that will begin hopefully in the third quarter there.

And then with our internal DAAs, we also have paths forward because we intend in the first half of this year to be at IND with our new uridine nucleotide. And I’ll tell you some more about that in the few slides. That will result in a POC, seven day POC study that will begin early in the second half of the year.

And that will enable us to be in the Phase 2 combination studies with our uridine nuc and 719. And that's a combination we’re very excited about because that really is a pan-genotypic combination of the type that we’re really aiming to do.

And I’ll also be mentioning that we're moving forward with other additional nucs. And we will be at IND before the end of the year with one or two more additional nucs and that’s because it's very important for us to make sure that we get a new nuc in the clinic this year and we’re not going to miss that goal.

So with that, I’ll go into more depth in each of the programs. And I’ll start with 719 and that so far really has the best-in-class profile among the NS5A inhibitors. Good preclinical profile with potent, pan-genotypic activity, if you see in the graph on the right hand side, clean safety today than proof-of-concept studies and preclinical studies and the low potential for drug interaction.

And I’ll walk you through the day during the moment. We completed three day proof-of-concept studies earlier last year in 640 HCV-infected patients and that demonstrated both safety and potent pan-genotypic activity.

And we’ve essentially at this point completed three-month tox studies and solid-dose formulation work that enables us to support the upcoming phase II clinical trials. And so as I mentioned earlier, we expect to begin a Phase 2 all-oral combination clinical trial with simeprevir to the non-exclusive collaboration in the first half of 2013. And in fact, the DAA studies for that are ongoing at the moment.

And so looking at the clinical data, the drug was obviously well-tolerated in the short-term study with no treatment emergent SA events or anything. Potent pan-genotypic activities you see, in genotype 1 as you see on the left of this table, we tested dose as a 25 mgs once a day, 50 mgs once a day, 50 mgs twice a day and a 100 mgs once a day.

And we got responses at all doses of about three logs from 3.2 logs to actually genotype 1b 4.3 logs. We also saw again we tested the higher doses here but we saw very potent activity again in genotypes 3 and 4 upto 3.9 logs in genotypes 4. Again very potent activity and the only place where we saw slightly reduced activity is actually in genotype 2.

And this turns out to be because some patients with an M31 had baseline, actually didn’t respond very well to the drug of the patients. Roughly half of the patients had L31 at baseline in genotype 2 and they had very robust responses with the drug.

We've already developed a diagnostic for this particular baseline mutation if needed. But I think with an effective combination therapy, it's quite likely that we won’t even need to use such a diagnostic and future recoupment studies. So very potent, pan-genotypic activity as you see.

And I think it’s worth looking at this in the context of what others have shown in the clinical setting at this point. And we certainly believe that IDX719 is as potent and safe as any of the NS5As out there for the duration, which it has been tested. But we also note that the pan-genotypic activity is important, differentiating factor here. And that really hasn’t been shown in clinical studies for most of the other molecules out there to our knowledge.

And so while we intend to develop IDX719 all by itself but in combination with other DAAs, I think it’s very important that this actually fits the profile that we’re heading towards. Obviously the pan-genotypic activity of this molecule fits very well with our idea of producing a potent and pan-genotypic combination in the future.

So turning now to the Idenix/Janssen non-exclusive HCV collaboration. We are very pleased to announce that basically earlier this year. The collaboration includes our own NS5A inhibitors, 719 with simeprevir, protease inhibitor and with their non-nuclear side inhibitor. We chose TMC647055 boosted with once -- with low-dose ritonavir. All three drug candidates are actually once daily drug candidates. And again that fits very well with what we’re trying to do here.

The initial drug-drug interaction study involving simeprevir and 719 is already underway with the first Phase II to begin to follow in the first half of this year towards the later in the second quarter basically. And that will be Idenix and simeprevir plus ribavirin for 12 weeks in treatment-naïve patients.

Subsequent Phase II study will actually evaluate three DAAs, simeprevir, 719 and 055 non-nucleoside. With them, we’ve got ritovarin and that study will be 12 weeks again in a broader group of HCV patients, including more difficult to treat patients.

The clinical trials will be conducted by Idenix. J&J will actually supply that clinical trial materials with this. And it’s important to note that both companies retain all rights to their respective compounds under the non-exclusive agreement.

So turning now to our novel nucleotide discovery program. This has been a very intense effort for us over the past three years and especially over the past two and half years. The diverse spectrum of nucleotides that we’ve looked at including purine and pyrimidine basis, known and novel prodrugs, 2’ Methyl sugars but also novel sugars and that’s something we’re very focused on the moment. Because we do believe that there is a very interesting potential for develoing an HCV nuc-nuc strategy analogous to that used in HIV.

And we’re looking for nucs with different types of sugar 2’Methyl and non-2 Methyl nucs with different non-overlapping resistance profile. So that’s a big effort that we’re pursuing at this point.

We put in a lot of work to identify promising compound with both in vitro and in vivo, lead development in assays. And as a result of this, we expect to file additional INDs in 2013 starting with uridine analog which is the first candidate that we've selected in our profile at the moment. But I’d also point out that two additional candidates are already an IND enabling studies because we certainly don’t want to miss the goal of having a non ‘2 Methyl in the clinic.

And so we’re pursuing that very hard. And we’re also looking at the nuc nuc strategy as I mentioned. And I’d just point out to that although we’re obviously pursuing nucs at this point for HCV. It is very obvious that nucs can be used in other areas outside of HCV viruses and even non-viral applications. And I think there is a lot of external interest in this, particularly since we restructured the Novartis agreement.

And this amongst other things, as I pointed out terminates their right to license our pipeline. And so this really allows us flexibility, not only in our HCV but also to explore other indications in the future. And so this is something that we would be looking at this as we go forward.

Just to point out the size of this very intensive effort. In the past two and a half years, we’ve looked at basically more than 2,100 different nucleotide prodrugs, separating out of pretty much close to a 1,000 different diastereomers that this and looking in at liver triphosphate levels for more than 220 prodrugs in the mouse and actually more than 15 prodrugs in the monkey.

And this is what covers many different nucleoside analogues in many, many different types of prodrugs, both known prodrugs and novel prodrugs. And we’ve raised the bar in terms of goals in each molecule that we moved forward and particularly in three areas. We made sure that we have better and higher triphosphate levels in vivo at every stage. We’ve also looked through molecules with improved liver targeting. I think some the compounds that are out there, including BMS-094. It turns out, did not have particularly strong liver targeting we can actually even tubulized in other tissues outside of the liver.

So we look for selectivity in terms of metabolism by the lever. And last but certainly not least, preclinical safety is an important goal for us and I think with each molecule that we are bringing forward, we’ve raised the bar in terms of preclinical safety. So we are actually very excited about these molecules, which I think give us the best opportunity so far, and really could be as good and perhaps better than any molecule that has, is in or has being in clinical development at this point.

And we've selected as I mentioned, our first novel 2′-methyl uridine prodrug. This is potent and pan-genotypic as you would expect for nucleoside -- nucleotide analog, high barrier to resistance again, very much like 7977, for example. We’ve completed on this, a very extensive array of in vitro and in vivo toxicology and toxicities studies. Multiple mitochondrial and cardiac assessments and so far we are very happy with the result, low cytotoxicity to date and the preliminary cardiac assessments were all clean.

As you can imagine, we’ve been in discussions with the FDA about this profile and we're working very hard to make sure that we give them all of the data that they will need to assess this compound. And I think they key characteristic of the uridine analog at this point, very, very high-levels of triphosphate generated in the liver and vivo is certainly higher than we’ve seen for other compounds in the past. And that’s achieved using prodrug technology that we’ve optimized at this point.

What it means for us really is the potential for very high potency of low ones daily doses. We anticipate getting the sort of potency seen with other nucleotides or better at 50 or 100 mg doses in clinic. And this should make it very suitable for fixed dose combination studies with IDX719 and other DAAs as you can imagine.

And as I mentioned, we also have to make sure that we don't miss fiscal. We are putting in new uridine nucleotide in the clinic. We also have two other novel nucleotides and IND enabling studies this year and they're also very promising molecules as well. And here I think this just gives you a little flavor for why we are so excited about the new uridine analog. Basically it gives extremely high triphosphate levels in the liver of mice and monkeys, as you can see over on the hand right-hand side of this slide.

In some of our early studies, when we looked at the competitor molecules from GS-7977, the other competitor is 184. For instance, over on the left-hand side of the molecule, we saw pretty good levels of triphosphate production from those molecules. And in the early stages of our prodrug program, we saw very little triphosphate production by most of the molecules we looked at because frankly, it’s not easy to get high triphosphate levels in liver.

But as you can see with 19368, our g analog that’s now discontinued and with the new uridine nucleotides we can naturally get much, much higher levels of triphosphate than anything that we’ve seen before. And again, I think that implies that we can get potent pan-genotypic at low doses in the clinic.

I want to turn just for a moment to our patent interference, because that has some near-term prospects. And as many of you are probably aware, in about February of 2012, an interference was declared between one particular Idenix patent claim and a Gilead patent claim at that time from a set patent claim. And that patent interference was actually declared by their patent office itself.

So there are two phases to this whole process. And in the first phase, I think one party is determined to be the senior party leader that is the first to file. And at least at the early stage of the whole thing as many of you know, Idenix was declared the senior party. And so basically it’s incumbent on Gilead to show to prove that we were not the first to file at this point.

So that decision according to patent office guidance, it is expected to take around a year. So it could finish basically quite soon in the near-term, perhaps even within this quarter. And I think in the second phase of the interference. One party is then determined to be first to invent. So that stage will -- the first to invent piece will probably take another year.

So by the -- by sometime in the first quarter of 2014, we expect that whole process to come to some kind of resolution. But I'll point out that there are many patents out there and the decisions made were actually appealable to the federal courts. So this process could go on, certainly for quite a long time at this point.

I’ll turn for a moment to our financial highlights and as of this quarter, we reported our financial highlights for the end of 2012. And we finished the year with almost $231 million in cash. It was a very good cash position. And our guidances as we announced at the last earnings call, that this will take us through into the second half of 2014 at the very least. So we are in a good cash position to hit a number of milestones and goals this year.

And so with that I’ll finish by again coming back to our pipeline and the milestones and highlights for 2013. Just to mention again, Idenix 719 or NS5A inhibitor, this is going to be in some pretty robust combination studies. We have 12-week DAA, all-oral combination trials. First of all with simeprevir but subsequently with S-32 J&J DNAs -- DAAs later this year and later in the year, after our filing of the uridine nucleotide analog and the 7-day proof-of-concept, we anticipate the filing again to be in the -- at the end of the first half of 2013.

The 7-day proof of concept study will be -- we hope early in the second half and at that point I think we would be ready before the year to go into 12-week combination studies with the uridine analog and 719. And then we also have coming out the decision in, at least the first phase of the USPTO patent interference filing. And so, I think this is a very exciting year for us and we will have a number of milestones and we will take us, especially as I mentioned in the three different DAA combination studies before the end of the year and will take us through some significant highlights and potential pieces that will add value for our shareholders.

So, with that, I thank you and thanks. I think we are out of time for questions but we have…

Ying Huang - Barclays

We will move to the breakout session for Q&A.

David Standring

Thank you very much.

Question-and-Answer Session

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