Idenix Pharmaceuticals' CEO Presents at Bank of America Merrill Lynch Health Care Conference (Transcript)

May.15.13 | About: Idenix Pharmaceuticals, (IDIX)

Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX)

Bank of America Merrill Lynch Health Care Conference Call

May 15, 2013 2:20 PM ET

Executives

Ron Renaud – President and CEO

Analysts

Rachel McMinn – Bank of America Merrill Lynch:

Ron Renaud

Good morning everyone. Before I begin I just like to remind folks that this presentation will include forward-looking statements about our business. These forward-looking statements include many risks and uncertainties that are detailed in our publicly available filings with the SEC.

For those of you not familiar with Idenix, our company’s engaged in the discovery and development of drugs for the treatment of human viral and other infectious diseases. Currently our focus is almost exclusively on the discovery and development of an all-oral, pan-genotypic regimen to treat and ultimately cure HCV. The lead product candidate in our pipeline is IDX719, which is a once daily holding NS5A inhibitor which is demonstrated pan-genotypic activity and proof-of-concept clinical testing.

We’ll move to next slide here. 719 is part of a non-exclusive collaboration with J&J’s protease inhibitor simeprevir and their non-NUC TMC647055 and the details of this program are a couple of slides ahead. For the best of our knowledge this is the only NS5A that has shown potent antiviral activity across HCV genotypes 1-4. And then early on our pipeline our multiple nucleotide analog candidates with an IND for our lead uridine nucleotide to be filed during this half of 2013. We also have additional candidates currently an IND enabling studies and I’ll share a little bit about our new-NUC in a moment.

As many of you know for folks that are following HCV we’re in the midst of a major shift in terms of how HCV patients will be treated and ultimately cured. We are seeing the same viral responses of cure rate that exceed 90% in certain genotypes with all-oral approaches, and what appears to be a favorable safety profile to the current standard of care. This is great for patients with HCV. And while the next wave of treatment will certainly represent a major step forward at Idenix we still see significant room for improvement. All-oral both toxicity regimens of cure rate over 90% in genotype 1 is now given. We still believe the regimen that can address those patients plus genotype 3 as well as the more difficult to treat patients across all genotypes and in all geographies represent a significant opportunity for us. For example, for genotype 3 there is still significant opportunities for an all-oral approach with a high cure rate. As 8% to 10% of HCV in the United States alone is genotype 3, this represents roughly 250,000 patients to 320,000 patients before initiate or anybody initiates any screening initiatives.

On the next slide we have a graphic of what’s 2013 looks like for us for Idenix our collaboration with J&J is well under way was completed drug interaction studies and the initiation of our combination trial with IDX719 and simeprevir in HCV infected patients expected to get under way very soon. This will be followed by the initiation of a triple combination trial of IDX719, simeprevir and then ritonavir boosted non-nucleoside known as 647 during the third quarter.

And then for our new program our internal program assuming a standard IND filing process we also plan to initiate healthy volunteer and proof-of-concept clinical trials with uridine NUC. And importantly, the trials with J&J should generate an updated data for us to move forward combination studies of our own NS5A and our own uridine nucleotide candidate by the end of this year. So let’s move to our lead program our lead clinical program IDX719. We believe as I mentioned at the outset that this NS5A inhibitor so far has a best-in-class profile. Pre-clinically it demonstrated potent, pan-genotypic activity and this was confirmed in our proof-of-concept studies data for which I will review on the next slide. It has also had a clean pre-clinical safety profile and a low potential for drug-drug interactions. We have three months toxicology studies and formulation were completed and planned to initiate as I mentioned on the previous slide all oral combination studies through our Janssen collaboration very shortly.

And this year is what our proof-of-concept study look like data from the study demonstrated that 719 was well tolerated at once daily doses of up to 100mg and showed potent antiviral activity across HCV genotypes 1 through 4. With Mean Maximum Viral Load Reductions up to approximately 4logs and these data were supported by the (inaudible) findings that I showed you on the previous slide.

A quick snapshot of the Janssen collaboration between us and J&J. In January of this year you might recall that we announcing non-exclusive collaboration with the Janssen for the clinical development of all-oral direct-acting antiviral HCV combination therapies. The mutually agreed upon plans include it is included in the initial drug-drug interaction study which is then completed and the Phase II is expected to first evaluate the two-DAA combination that’s side we’ll get underway shortly. And then a three-DAA combination of 719 other protease inhibitors simeprevir and 055 that trail will be with and without ribavirin and these studies will all be conducted by Idenix.

So a little bit about our new nucleotide program 719 is our lead clinical candidate the most substantial part of our discovery efforts for much of the last 30 months we’ve been focused on nucleotide polymerase inhibitors. Our focus in this area has been to develop nucleotide analog candidates that have the potential for high potency as demonstrated by high liver triphosphate levels and low in Vitro and low in Vivo cytotoxicity. Now given the some of the concerns the leasing concerns we’ve heard and seen around cardiac and mitochondrial toxicity that has been seen with certain NUCs. We conducted significantly more pre-clinical toxicity testing and is generally required for an IND-enabling tox package. And on both fronts mitochondrial toxicity and cardiac toxicity our next candidate appears to be clean with no indications of pre-clinical toxicity.

We also have two additional non-guanosine candidates in ongoing IND-enabling studies these are not 2'Methyl G candidates. So little more about our nucleotide prodrug discovery program, this is among one of our key core competencies and really represents our scientific expertise within the organization. We’ll use this to leverage our - this expertise as well as our intellectual property portfolio to discover multiple novel nucleotide drug candidates. We explored a diverse spectrum of nucleotides we’ve looked at all aspects of the drugs and cells so we’ve looked as the basis we looked at the prodrug we’ve looked at the sugar moieties to try to figure out what makes the best nucleotide prodrug. And what we believe this will enable us to do is to develop a strategy that may allow us to combine NUCs to together that have low doses non-overlapping resistance profiles and very attractive cost to manufacture.

And on top of all this outside a little bit outside of the HCV spectrum we began to screen our chemistry library for non-HCV opportunities and there has been a significant amount of external interest to do the same. There is a focus on nucleosides and nucleotides in not only in other infectious diseases but also in oncology and immunological disorders these are a few interest in therapeutic areas that we started to screen for and as we find things in those areas we’ll let folks know.

With regard to our balance sheet it remains quite strong. For the first quarter we reported a cash balance that was a little bit higher than $200 million and this cash balance will allow us to initiate and complete all the HCV programs that I’ve discussed here. So to close on the presentation for 2013 these are the milestones on this slide that we believe represents the key value drivers for Idenix this year. We believe that the achievement of these milestones will put Idenix on track to play a significant role and treatment and the care of HCV. Thanks for your time.

Question-and-Answer Session

Rachel McMinn – Bank of America Merrill Lynch

Great. Any questions from the audience? Why don’t we start with IDX719 so it sounds like you’re kind of in the full position right now you’re just getting the DAAs complete. Where are you in the process that’s starting the Phase II study and just to be clear this is will be with simeprevir with and without ribavirin for 12 weeks.

Ron Renaud

Yeah this study will be with simeprevir with ribavirin so this initial study will be about 90 patients, genotypes 1b and genotypes 4 or it start to start very, very soon Rachel I would say eminently we’re just getting through some it’s more logistical and administrative issues and we’ll get that underway shortly. And then that study will be in combination with ribavirin. And then the next study the triple combination we’ll look at that with and without ribavirin and then in subsequent studies if we move the collaboration forward we’ll look at combinations with additional combination with and without ribavirin.

Rachel McMinn – Bank of America Merrill Lynch

And I guess what benefit do you see in retaining control over the Phase II program, could you give a pretty clear that you guys were running this program as there, what kind of interaction that you’re having with J&J?

Ron Renaud

We have very good interactions just so far this collaboration is about five months old I would say that it’s gone quite smoothly there is a very open line of discussion open communication. I think for both groups we understand what that’s taken in terms of competitive landscape. So I think for us to be able to control it whereas many of the other studies of the other collaborations that J&J has they control it, we can move very, very quickly a small company like Idenix we can set trials up quickly we can make decisions quickly and we can move quickly. We get their buying on us and they’d been very, very cooperative.

Rachel McMinn – Bank of America Merrill Lynch

So I guess one – as we think about this evolving you kind of – if there is a lot of difference in the way we just kind of have to see how things play out but J&J does not have an installed base they’re not locked in but they sort of sprinkle themselves around working with Presto working with you guys. So if it in your best interest to take I mean obviously you want to de-risk 719 from a safety perspective but do you see any potential for a future Phase III relationship with J&J.

Ron Renaud

Yeah, it’s a very good question I think at the outset that’s why this collaboration was setup to do these two studies the double combination and then the triple combination with no obligation after that on either side to do additional studies. Now if in the close of this collaboration we generate very attractive data that is worthy of going into a pivotal trial we would certainly entertain that we would discuss that it would be in both of our best interest. At the same as you point out we’re generating significant amount of safety for IDX719 as part of this collaboration and as much as we want to generate nice data in this collaboration with J&J we also want to get to that study with our own internal nucleotide prodrug and our own NS5A. And if all goes according to plan that’s the study that we could commence before the end of this year.

Rachel McMinn – Bank of America Merrill Lynch

So I guess I’m not sure how to even ask this question but maybe the right way to say it is you have a certain amount of resources you’re a small company the likelihood is that you’re not going to be able to fund most of all Phase IIIs on your own. And so as you kind of get to this point assuming 719 and the safety look comparable to other NS5A inhibitors we have a pretty and we’re starting to develop a richer kind of drug class safety if you will looks pretty clean.

Ron Renaud

Right

Rachel McMinn – Bank of America Merrill Lynch

So if we kind of leap over and sort of take that as the base cases 719 looks good. Are you going to be in a situation where you just it wouldn’t make sense to start like you would have to like basically offload a lot of those expenses or would you consider partnering part of 719 away like help us think about what Idenix looks like six months from now you are starting that combination study there.

Ron Renaud

Yeah, yeah no I spent a lot of time thinking about what Idenix is going to look like six months from now and I think it will all depend on the kind of data we generate as part of this J&J collaboration but also as part of that proof-of-concept program for our new uridine NUC. So what I would tell you is clearly when we entered this race years ago it was a much different landscape and I think we thought we could do a lot of this on our own just like every participant in the space. It’s clear now you’re not competing on SPRs anymore and why should you have an SPR that’s higher than 90% basically you’re not in the game these regiments now at various phase they have very low toxicities form what we’ve seen so far very convenient to our world so you’re going to be these are going to be competitive environments that where you’re going to be competing on commercial really on commercial strength. So I think we have to strongly consider the need for that kind of access to resources through a bigger partnership but I would rather get to the other side of the value driving data to figure out how we do that before we do it. So this is yes we would strongly consider partnerships.

Rachel McMinn – Bank of America Merrill Lynch

Okay. So there is a possibility here where you retain 719 for your own new combo but then also somehow find a way to partner it up to another company?

Ron Renaud

Yeah I mean I think even with even if our own nucleotide prodrug program in combination with our own NS5A goes very, very well. I think we would still strongly consider having some commercial strength to help us go into the competitive environment that we are going to go into it. We are not going to have there are DAAs out there that are commercially but I would consider what’s about to happen over the next 12 to 18 months is being a new competitive landscape a true all-oral approach with the company that has leadership in other leadership in HCV leadership and HIV. This is going to be a very hotly contested space.

Rachel McMinn – Bank of America Merrill Lynch

And then just to go back to the NUC it’s so early we’re obviously just waiting for just going to the clinical that can you give us an update on what are the gating steps in orders to get into the clinic FDAs been highly actively and how things even letting things into the clinics. So how confident are you feeling now maybe your timeline for advancing into the clinics?

Ron Renaud

I mean as confident as we can be about anything that’s within our control. So clearly with what’s happened with nucleoside in a perception of nucleosides both by the regulatory authorities as well as everybody else. We’ve had a front row seat on that through what‘s happened over the last six to eight months. And as we were designing our free clinical tox programs you have a fairly standard battery or test that you do for an IND to prepare and submit an IND. What we decided to do very early on was figure out how much more we could do to enter proactively asking answer the questions that we thought the FDA would have around nucleoside, nucleotide prodrug. So we did extra assays around mitochondrial tox. We did a lot of extra work around cardiac toxicity. So for example echocardiograms in monkeys looking at proBNPs looking at different cardiac toxicity markers that we wouldn’t otherwise or historically haven’t been looked at.

Rachel McMinn – Bank of America Merrill Lynch

Sure.

Ron Renaud

In these kind of IND packages. So we done all that we’ve got ourselves very comfortable with the outcome of that we, on that perspective the next compound looks very, very clean. So until we hand it over to the FDA we know what we have in front of us what we don’t know is the FDA has a whole field of information in front of it. They get to see everybody’s compound everybody’s data and so how they evaluate our IND remains to be seen. We hope we’ve given them enough information.

Rachel McMinn – Bank of America Merrill Lynch

Have you actually submitted the IND?

Ron Renaud

We said that we would submitted before the end of the first half and that’s how we’ll say for today.

Rachel McMinn – Bank of America Merrill Lynch

Okay. Okay so and just I understand that how mindful once you’ve submitted it’s about 30 days before the FDA like they are going to comment they would comment?

Ron Renaud

Right. Yeah generally what happens is they don’t tell you that you can go ahead they only tell you if you go ahead, right.

Rachel McMinn – Bank of America Merrill Lynch

If you can go ahead. Okay so I mean it sounds like an actual like this is an actual balance from?

Ron Renaud

For us it’s an event yeah.

Rachel McMinn – Bank of America Merrill Lynch

Yeah

Ron Renaud

For us 719 has been a great process so far we are very, very pleased with where we are with 719 as part of the Janssen collaboration but as I mentioned in my comments our core competency is around nucleoside chemistry. So to be able to bring what we think is maybe one of the best nucleotide prodrug we’ve ever worked on inside Idenix into the clinic and then to also have two additional ones in IND enabling testing right now. We think this represents some of the best work we’ve done at the company.

Rachel McMinn – Bank of America Merrill Lynch

And not to be the best because I’m not sure there is much you can say on those that I think with other NUCs that have gone into that were slated to go into the clinic that didn’t actually go into the clinics the FDA responded have like super long letters lots of questions if you got a response like that from the FDA would you come back to investors and say hey we go, we are not going into the clinic right away we got these questions that we are doing all this work and sure it is?

Ron Renaud

Well I mean I think given that we have stated that we planned to file an IND before the end of the first half. I think most people would if we get to the end of July and if folks haven’t heard anything I’m going to get a lot of telephone calls or Terry is going to get a lot of telephone calls. So it would be in our best interest to be very proactive on that. I think Rachael we as a company I’ve try to be very transparent with our especially in the last year more of that the things that have happened with 184 and 36A. So I think you should expect that we could continue to get that same transparency.

Rachel McMinn – Bank of America Merrill Lynch

And then just again I know it’s a little bit of initial but just so I make sure I understood assuming you do go into the clinic we should expect a standard seven day study or would you go into a healthy volunteers first or?

Ron Renaud

Yeah this is I mean it’s going to look a lot like the 719 proof-of-concept program except with nucleoside you can go for seven days. What we are going to do in this study is we’ll at the outside we’ll do PK/PD and healthy volunteers will do quick a quick one day look and healthy and then one day look in HCV infected and then roll over right into seven day healthy and seven day infected will give us a good sense to the PK/PD before we start dosing with seven day infected.

Rachel McMinn – Bank of America Merrill Lynch

And I’m sorry how much pre-clinical tox to use three month data with this compound?

Ron Renaud

We’ve completed the we’ve completed the 28 days GLP tox and the three months GLP tox is underway with where we are doing that one at risk.

Rachel McMinn – Bank of America Merrill Lynch

Okay.

Ron Renaud

And I would also point out that this proof-of-concept study II will also be just like 719 where we’ll go across the four geno types.

Rachel McMinn – Bank of America Merrill Lynch

And one of the things the FDA has been making other companies do that have very early stage. Uses in the clinics is rigorous cardio vascular monitoring is that something you are prepared to is that what are you excepting of?

Ron Renaud

Well I think our hope is that with the amount of preclinical work.

Rachel McMinn – Bank of America Merrill Lynch

Yeah

Ron Renaud

That we done to lay out toxicity or potential toxicity cardiac or mitochondria anything that would is even remotely around what we’ve seen over the last six to 12 months. We try to address that in the preclinical tox program. So the real purpose of that was to head off having to do the cardiac monitoring once we get to the clinic but until the FDA evaluate this I can’t, I can’t say.

Rachel McMinn – Bank of America Merrill Lynch

Right and then from an intellectual property standpoint how should we think about the ongoing patent of GSs around 7977 and how this could potentially impact your uridine because are they similar structures in anyway would it fall under the same IP?

Ron Renaud

This patent interference has no bearings on anything that we are developing any of our nucleotide prodrug that we plan to bring to the clinic. If you think about the interference remember this is this was contrary to public belief we did not instigate the interference. Gillards did not instigate the interference. This was instigated this was brought on and initiated by the KTO.

Rachel McMinn – Bank of America Merrill Lynch

Sure.

Ron Renaud

I just wanted to make that clear for folks. And so this is really around a patent applications that we had that was being assorted against an exciting patents that Gillard has and so it’s really one application against one patent. We still have other patents that cover our intellectual property our, the compounds that we are working on a very vast amount of intellectual property that covers what we are doing in the nucleoside stage. So I would look at I would look at the interference as one small battle and probably what we could end up being a much maybe a much bigger war.

Rachel McMinn – Bank of America Merrill Lynch

Well it’s the reason why I’m asking and maybe you can provide a little bit more granularity on your Novel uridine. How differentiated is that from 7977?

Ron Renaud

Yeah we haven’t said specifically what the structure is for except that is different and we have said it’s a different prodrug approach it’s a different prodrug then anything that’s been used in the clinic or in these current clinical testing.

Rachel McMinn – Bank of America Merrill Lynch

And so your IP would be specific around that?

Ron Renaud

No our IP is our IP I mean our IP that we have right now is it covers buying large too prime modified nucleoside, nucleotide. So that’s about all I say that.

Rachel McMinn – Bank of America Merrill Lynch

Okay. I was going to ask about other things outside of HCV but are there questions from the audience. So I think this was we talked a little bit about this over the past year about your extensive library of NUCs and the potential to go outside of HCV and I feel like this is the first time I’m seeing it an actual presentation. So it sounds like maybe it’s gaining a little bit more traction in the company. Maybe give us some updated thoughts on where you are you mentioned the word external as well so you might be getting some…

Ron Renaud

Right.

Rachel McMinn – Bank of America Merrill Lynch

Inbound calls and how you could again what is Idenix look like in six months or we’re going to be talking about some oncology drugs or some other antiviral drugs outside of hep C?

Ron Renaud

Yeah. So, I think it goes back to our relationship with Novartis I mean if you remember we didn’t get much of a chance to really highlight the importance of restructuring our arrangement with Novartis last summer because that came right before the events with the first found nuc and ultimately what happened with us but when we restructured the relationship with Novartis what it allowed us to do was get our full pipe, access to our full pipeline that with no strings attached Novartis has no right to anything in the Idenix pipeline.

And so, very, very quickly we are working to some of the clinical holders and but very quickly we were starting to get inbound calls from third-parties asking if there was any interest by Idenix for third-parties to come in and screen our library and I think the initial interest was around the nucleoside. And quite frankly we had not really taken a hard look we’ve been so focused on HCV some of our previous work on HPV and HIV that we hadn’t really gone back in and taken a hard look at the library.

So before we would allow any third-party to come in and look at it I wanted to get a sense of what we had in the library ourselves. So we’ve done a significant amount of work over the last six to seven months to really understand we had catalog of library before clearly we worked on nucleoside and nucleotide prodrugs, protease inhibitors, non-NUCs NS5As there is a number of different structure families in the library. And we’ve gone through and we really taken a first hard cut trying to look at things that are more or less in our landscapes of viruses, infectious disease things of that sort.

And we’ll take a look at clearly when you have to in the business of developing nucleosides you’re going to come up with cytotoxic nucleosides and those becomes very interesting for folks developing cancer compounds. So we’re going to take a hard look at that. What this will ultimately means six months down the road I don’t know we have to get HCV right first and that’s our, that is our exclusive focus this is going on in the background and there is a, it’s a meaningful effort but I think if we were to find anything of substance that was outside of our core competency I think these probably represent great partnership opportunities more than us really trying to change the business and go often another direction at least on where we fit today.

Rachel McMinn – Bank of America Merrill Lynch

And I guess we just don’t know until we have more data but is there a possibility of six, twelve months from now where Idenix is to really try to focus on other viral areas, has that already started and are you starting to think more about that or is that really much more of a wait and see?

Ron Renaud

As I said, we’re still focused on HCV but yes, I would say yes we are focused we’re starting to develop a focus beyond HCV clearly we do want to have some diversification in the business we have developed discovered, developed and co-launched in hepatitis B with Novartis we’ve done this before outside of HCV we developed HIV compounds in the past, I'm not saying that those are the areas that we’ll go back to but I think places where we can leverage our strength of virology expertise or biology team back at Idenix has an extensive knowledge across the virology landscape, the chemists are very good at taking a look at compound. So, we’ll I think we’ll try to leverage our expertise and our intellectual property as much as we can in all those areas.

Rachel McMinn – Bank of America Merrill Lynch

Any last question in the last minute or so. Not it’s not I guess we’ll wrap up here.

Ron Renaud

Terrific, thanks Rachel.

Rachel McMinn – Bank of America Merrill Lynch

Thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!