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Infinity Pharmaceuticals (NASDAQ:INFI)

Q3 2013 Earnings Call

November 07, 2013 4:30 pm ET

Executives

Jaren Madden

Adelene Q. Perkins - Chairman of the Board, Chief Executive Officer and President

Julian Adams - President of Research and Development

Lawrence E. Bloch - Chief Financial Officer, Chief Business Officer, Principal Accounting Officer, Executive Vice President, Treasurer and Secretary

Analysts

John Chung - RBC Capital Markets, LLC, Research Division

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Jeremiah Shepard - Crédit Suisse AG, Research Division

Yigal D. Nochomovitz - Morgan Stanley, Research Division

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals Conference Call to discuss the company's financial results for the third quarter of 2013. My name is Kevin, and I'll be your operator for today's call. [Operator Instructions] Please be advised that this call is being recorded at Infinity's request. At this time, I would like to introduce your host for today's call, Ms. Jaren Madden, Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.

Jaren Madden

Thank you, Kevin, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review our third quarter 2013 financial results. With me here today are Adelene Perkins, President and Chief Executive Officer; Julian Adams, President of R&D; and Larry Bloch, CFO and CBO. Following our remarks, we'll open up the call for Q&A. The press release issued earlier today details our results and is available on our website at infi.com.

Please note that during this call, we may make forward-looking statements about our future expectations and plans, including clinical development milestones, the therapeutic potential of our product candidates and financial projections. It's possible that our actual results may differ materially from what we project today due to the considerations described in the Risk Factors section of the Form 10-Q for the third quarter of 2013 filed this afternoon.

While these forward-looking statements represent our views as of today, they should not be relied upon in the future as representing our then current views. We may update the statements in the future but are not taking on an obligation to do so.

And now, I'd like to turn the call over to Adelene.

Adelene Q. Perkins

Thanks, Jaren. Welcome, everyone, and thank you for joining us on the call today. 2013 has been an important year for Infinity as we move closer to our vision of becoming a fully integrated bio-pharmaceutical company that discovers, develops, and ultimately delivers important new therapies to patients.

While we had hoped for positive data from our Hsp90 study, we are benefiting from our balanced approach to building a portfolio of product candidates. In July 2010, we in-licensed IPI-145, our PI3 kinase delta/gamma inhibitor. PI3 kinase delta was a validated target, and we believe the ability of IPI-145 to inhibit both the PI3 kinase delta and gamma could lead to a differentiated clinical profile. Today, IPI-145 is poised to enter Phase III development this quarter. We're also continuing our R&D efforts to further elucidate the potential of IPI-145 and to build a portfolio of PI3 kinase inhibitors targeting delta and gamma.

We are looking forward to presenting preclinical data, as well as additional clinical data from our Phase I study of IPI-145 in patients with hematologic malignancies at the American Society of Hematology, or ASH, annual meeting in December. These abstracts were published online this morning, and Julian will review the data in the abstract shortly.

We continue to be very excited about IPI-145, which we believe has the potential to be the best-in-class PI3 kinase inhibitor for the treatment of hematologic malignancies. We recognize that several of the indications we're studying are part of a competitive and rapidly evolving landscape. With that in mind, we're moving as aggressively as possible. Earlier this year, we initiated a Phase II monotherapy trial in indolent non-Hodgkin's lymphoma and are on track to initiate a Phase III monotherapy study in CLL by the end of this year. Monotherapy offers an important treatment option for patients, and we believe these trials may provide the fastest path to registration and approval.

In addition to our monotherapy study, we are planning for additional trials, including combination approaches designed to continue to differentiate IPI-145 from other agents in development.

As we advance towards the late-stage development and registration, we are continuing to strengthen our clinical development expertise and build our medical affairs function. In September, Dr. David Roth joined Infinity as Senior Vice President of Clinical Development and Medical Affairs. David joined Infinity from Pfizer, where he most recently served as Vice President of Pfizer's Oncology business unit, and he brings over 20 years of experience in hematology and oncology research and development. David holds a distinguished track record and has contributed to the successful regulatory approval of several products, including [indiscernible], Xyntha, ReFacto and BeneFIX. With experience in academia, as well as across the drug development continuum in the industry, we are thrilled to have David on our team. And with that, let me turn the call over to Julian for an R&D update.

Julian Adams

Thank you, Adelene. I'd also like to warmly welcome David, who's a great addition to our team. We're very excited about the upcoming ASH meeting and are pleased to have 5 abstracts representing both clinical and preclinical data accepted for presentation.

Before I review our abstract and summarize the kind of information you can expect to see in our presentations next month, I would like to put our IPI-145 Phase I program in context. We are really encouraged with the data we've recorded to date, which show that IPI-145 is well tolerated and highly active across a range of hematologic malignancies at 25 milligrams BID or twice daily. We believe that IPI-145 has the potential to be the best-in-class PI3 kinase inhibitor for both iNHL and CLL, and we're moving forward with an aggressive development plan in these 2 indications designed to further differentiate IPI-145 from other targeted agents in development for the treatment of these malignancies.

As many of you know, we are continuing to enroll patients in our Phase II study of IPI-145 in indolent non-Hodgkin lymphoma and are on track to start up our Phase III study in CLL later this quarter.

Turning now to our ASH abstracts. IPI-145 continues to show promising signs of efficacy, and the data we are planning to report next month further support our ongoing and planned studies at the 25 milligram BID dose.

We are pleased that our clinical abstract focused on CLL was selected for an oral presentation and for a review at an ASH-sponsored media briefing. It's important to note that the data cutoff for our abstract occurred in July, and therefore, our clinical abstract represents incremental data since ASCO. The actual ASH presentations next month will reflect a more advanced data set than what is represented in these abstracts.

In our clinical abstract describing data from the Phase I study of IPI-145 in patients with CLL, we reported overall response rate, as measured by IWG-CLL criteria, is 52%, which is similar to the response rate reported in June. Notably, we have also now reported our first complete response in CLL, which we believe serves to further differentiate us from other PI3 kinase inhibitors in development, which have not yet shown complete responses as monotherapy.

The abstract states that nodal responses occurred in 79% of patients after 2 cycles of treatment, indicating that IPI-145 has a rapid onset of activity. We also report that 145 continues to be well tolerated with no dose-related increase in frequency or severity of adverse events.

As I mentioned, one of our investigators, insulin [ph], will present updated Phase I CLL data for IPI-145 during an oral session at ASH on Monday, December 9. We expect this presentation to include the following: an update on activity of IPI-145 at 25 milligram BID dose in terms of nodal responses, partial responses and complete responses, as well as an analysis of lymphocytosis in addition to an update on the activity of IPI-145 at 75 milligrams BID; an update on activity of IPI-145 in the patients with advanced CLL, who have p53 mutations or 17 [indiscernible] lesions; our first early analysis of the activity observed in treatment-naïve elderly and high-risk cohort; an early report on the activity of IPI-145 in a small number of patients who progressed while on agglutinin treatment prior to entry in our study; and finally, we also expect to provide a safety update.

Over the course of our presentations, we also expect to provide updated top line Phase I data on the activity of IPI-145 in patients with indolent non-Hodgkin's lymphoma and T-cell lymphoma. For iNHL, we expect to provide an update on response rate and durability at doses less than or equal to 25 milligrams BID. We expect these data to focus on the 25 milligram BID dose, as this is our dose being evaluated in our current Phase II study.

For T-cell lymphoma, we plan to provide top line update on activity. We're planning to submit an abstract for presentation at a medical meeting in January that is focused exclusively on T-cell lymphoma, so we hope to share more comprehensive update on our Phase I experience in T-cell lymphoma at that time.

In addition to our clinical data, we have -- we will have 4 scientific poster presentations, which reflect our commitment to better elucidating the mechanism of action of PI3 kinase delta and gamma across a range of hematologic malignancies. These preclinical and translational presentations will include: data evaluating a range of sero-markers in CLL and indolent lymphoma patients, these data suggest that IPI-145 has a biologic effect on several important cytokines and chemokines necessary for the homing, migration and survival of malignant cells and demonstrate similarities and differences in how these 2 malignancies respond to the inhibition of PI3 kinase delta and gamma; data on the role of combined PI3 kinase delta and gamma inhibition in CLL; data showing the sensitivity of diffused large B-cell lymphoma or DLBCL; cell lines to IPI-145, as well as data showing a potential mechanistic rationale for the combined PI3 kinase delta/gamma and BTK inhibition; and finally, data supporting the clinical potential of IPI-145 in adult T-cell acute lymphoblastic leukemia.

As I mentioned earlier, our initial focus is on 2 monotherapy studies with the potential for registration. Patient enrollment is ongoing in the first of these trials, which is a Phase II open-labeled single-arm study designed to evaluate the safety and efficacy of IPI-145 administered at 25 milligrams twice daily in approximately 120 patients with indolent non-Hodgkin's lymphoma. These patients are refractory to radio-immunotherapy or to both rituximab and chemotherapy and must have progressed within 6 months of receiving their last therapy. The primary endpoint in this study is response rate.

Our second potential registration study, which is on track to begin this quarter, is a Phase III trial in patients with CLL. This is a global randomized monotherapy study designed to evaluate the safety and efficacy of IPI-145 and administered twice -- 25 milligrams twice daily. In this study, approximately 300 patients with relapsed refractory CLL will be randomized to either IPI-145 or ofatumumab. The primary endpoint is progression-free survival, as assessed by central independent radiological review.

In addition, these 2 trials, we are -- in addition to these 2 trials, we are planning for combination studies designed to be -- to further differentiate IPI-145 and enable broader use by physicians and patients. We are supporting an ongoing investigator-sponsored Phase Ib open-labeled dose escalation study of 145 in patients with advanced hematologic malignancies. The study is designed to evaluate the safety, pharmacokinetics and clinical activity of IPI-145 in combination through rituximab, bendamustine or both rituximab and bendamustine. We expect to provide additional details about our combination strategy in the coming months.

Beyond hematologic malignancies, there's a strong biological rationale for developing IPI-145 in inflammation, in which we have 2 clinical trials underway. We are continuing to enroll patients in the ASPIRA study, a Phase II double-blind placebo-controlled trial designed to evaluate the efficacy, safety and pharmacokinetics of 3 different dose levels of IPI-145 given twice daily on the background of methotrexate versus placebo plus methotrexate in more than 300 patients with moderate to severe rheumatoid arthritis. The primary efficacy endpoint measured at 12 weeks is the ACR20 response rate.

We are also conducting a Phase IIa trial of IPI-145 in patients with mild allergic asthma and expect to provide an update on this study by the end of the year.

In summary, 2013 has been an important year for IPI-145. We are excited about the clinical potential for this product candidate and look forward to updating you in our continued progress at ASH.

With that, let me turn the call over to Larry to review our financial results.

Lawrence E. Bloch

Thank you, Julian. Actually looking forward to ASH next month. And on Sunday, December 8, we'll host an investor event in New Orleans with presentations by both management and investigators. Because our clinical presentation was selected for review at the ASH-sponsored media briefing on Sunday morning, we will be able to discuss our Phase I data with you ahead of the oral presentation on Monday evening.

During the investor meeting, we'll also review the preclinical data that will be presented during the Saturday evening poster session. We look forward to discussing our data with you in greater detail on December 8.

With IPI-145 rapidly advancing, more than $250 million in cash investments at the start of the quarter and worldwide commercial rights to our PI3K delta/gamma programs, Infinity is in a very strong position today.

And I'll briefly review our financial results for the third quarter of 2013. We did not receive any revenue during the quarter or the third quarter 2012. R&D expense for the quarter was $26.9 million compared to $21.5 million for the same period in 2012. This increase in R&D expense in the quarter compared to the same period in 2012 reflects costs associated with the continued development of IPI-145, including our ongoing Phase II trial in indolent non-Hodgkin's lymphoma and preparations for our Phase III trial in CLL.

G&A expense was $7.3 million for the quarter compared to $6.3 million for the same period in 2012. The increase in G&A expense for the quarter compared to the same period in 2012 was primarily linked to increased noncash stock-based compensation expense, as well as market research and early pre-commercialization activities as IPI-145 advances in the late-stage development.

Net loss for the quarter was $33.9 million or a basic and diluted loss per common share of $0.71 compared to $18.4 million or a basic earning per common share of $0.57 and diluted earnings per common share of $0.52 in the same period in 2012.

As of September 30, 2013, we had total cash, cash equivalents and available-for-sale securities about $250.9 million compared to $277.2 million as of June 30, 2013.

And with that, I'll turn the call over to our operator for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Michael Yee with RBC Capital Markets.

John Chung - RBC Capital Markets, LLC, Research Division

This is John on behalf of Michael Yee. Julian, I first wanted to clarify in your comments, are we not getting any data on durability of response in the CLL subset?

Julian Adams

We are still crunching through data, and I can't be more specific than the comments I made in the prepared remarks. But obviously, we're looking at all of the aspects of activity for IPI-145.

John Chung - RBC Capital Markets, LLC, Research Division

I see. Then do you think we'll be at least able to kind of tell that -- whether the 6 PRs and the 4 stable disease patients from ASH just 1 year ago are still responding?

Julian Adams

Our hope is to provide as comprehensive a picture on all our patients at the ASH meeting, yes.

John Chung - RBC Capital Markets, LLC, Research Division

Okay. And just lastly, just looking at the abstract today, especially on the 4 new respiratory and infectious adverse events, could you provide any color on whether these occurred in the higher 75 mg cohort, and whether it occurred despite mandating prophylaxis or did that occur before prophylaxis?

Julian Adams

Sorry, I can't comment. Again, we're still crunching through data and I can't comment on patient-specific. But we have instituted prophylaxis as we think this is the best approach, and we will see how that translates. Recall that the prophylaxis is designed to prevent serious bacterial infections and the zoster and CMV infections, but it does not cover necessarily milder infections like rhinovirus. So stay tuned for the full description at ASH.

Operator

Our next question comes from Matthew Andrews with Wells Fargo.

Unknown Analyst

This is Sean calling in for Matthew. My question is, at what point do you think you have enough data to make a decision on whether to pursue high-risk relapsed or refractory CLL as a path to market for 145?

Julian Adams

Well, we're currently examining those very patients, and we will take under advice when we see an abundance of data with -- over time and make appropriate decisions.

Unknown Analyst

Okay. Just to be clear, in the presentation at ASH, will you break out the overall response rate for 25 mg for dual refractory indolent NHL patients?

Julian Adams

We will have an update at the iNHL, and I can't tell you exactly in which presentation it's going to be at the moment. But we promise to have an update on iNHL.

Adelene Q. Perkins

And it will heavily focus on the patients at the 25 mg BID dose, so that's right.

Operator

Our next question comes from Joel Sendek with Stifel.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

[indiscernible] exactly is this presentation going to be that you plan to have enough data in the pilot study?

Julian Adams

Can you repeat the question?

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Sorry, can you hear me?

Julian Adams

Yes, clearly.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Okay, sorry about that. So I kind of have 2 questions. First of all, on indolent, the Phase II, I'm just wondering how enrollment is going there? And with regard to the CLL Phase III that you intend to start, I'm wondering what kind of timeline you would you expect to -- in that study?

Julian Adams

So the study is enrolling well. I'm not providing any numbers on this call. So the Phase II study is enrolling very well. And for the CLL study which is yet to start, I mean the enrollment characteristics, it's just a little too early to call. It is a fairly large study and internationally focused, so it'll be a function of giving all the sites up. And x U.S. sites, we'll take a little longer to get up than U.S. sites. That's just a normal regulatory procedure.

Adelene Q. Perkins

But we are on track, as Julian mentioned earlier, to dose those patients this year.

Joel D. Sendek - Stifel, Nicolaus & Co., Inc., Research Division

Okay. And then just quickly, did I hear you correctly that you won't have any data on T-cell lymphoma at ASH this year?

Julian Adams

No, we'll provide a high-level update, but we'll concentrate on submitting an abstract for a T-cell meeting in San Francisco on the 23rd of January -- 23rd or 24th of January.

Operator

Our next question comes from Jason Kantor from Crédit Suisse.

Jeremiah Shepard - Crédit Suisse AG, Research Division

Jeremiah filling in for Jason. In terms of internal work that you might have done looking at possible combinations with 145, do you have any -- can you maybe shed any light onto the possibility of combining with 145, or do you just want this agent to have broad applicability to multiple tumor size? Or is it going to be more like a very specific combination for a given disease?

Julian Adams

So both, I think. We look -- depending on the mechanism, depending on the disease, we're exploring paralyzed combinations, and will -- they should translate into future clinical trials. We're announcing at ASH that there's data that we've recorded in DLBCL with ibrutinib.

Jeremiah Shepard - Crédit Suisse AG, Research Division

Okay. And then just going back to the prophylaxis that you mandated previously, can you give us any terms of the timeline when that happened? And then roughly, is there like a -- is there a certain set of patients that has started after that, that you could kind of, or at least in what was released in the abstract today or you could provide us an update on that?

Julian Adams

All I can give you is sort of a general sense that it was prior to ASCO. And, of course, there are patients that were enrolled post-ASCO. So I can't give you precise numbers. But there -- I can say that to the extent that we did experience these early infections in patients that weren't prophylaxis, this has taught us a great deal about how to manage patients. So I actually think, for our Phase I study, we're getting a very comprehensive picture of safety and, of course, activity as well. So I think it's all for the better of patients and better knowledge of how to use the drug.

Operator

Our next question comes from Katherine Xu of William Blair.

Unknown Analyst

This is actually John in for Katherine. A couple of quick questions about potential partnerships, given how the space is evolving and maybe try to get some of the IPI-145 out quicker. And the second question I had is other potential studies may be exploiting potential T-cells maybe in Phase III or some sort of pivotal -- other pivotal studies. If you can you comment on that?

Lawrence E. Bloch

Sure. This is Larry. In regards to the partnering question, we've had inbound discussions and interest since we've got the rights back from Purdue/Mundipharma over a year ago. And we've had those ongoing discussions. And the real thing for us was to kicked the tires, make sure that we had the very best plan in place. And to date, we really have been focused, as Julian was giving an overview on, on the speed to market with registration under monotherapy. We're also enabling through IST, as Julian described, a combination therapy. And once we broadly enable combination therapy, there'll be a proliferate of more trials that we could be pursuing. While we're still in monotherapy, it really hasn't been an opportunity for a partner to articulate how things would go faster, better, broader than we can do independently. But we could imagine some time from the time we enable broad combination therapy. So for example, the time we have the RA Phase II readouts, those could be opportunities where our partner could make a compelling case that together we could do things even faster than we're doing independently.

Adelene Q. Perkins

And then, John, your second question was on T-cell and whether we might see that as an opportunity to go to Phase III trial. We're always data-driven, and so as that data mature and our team looks at it, we'll decide whether or not there is a compelling path forward.

Operator

[Operator Instructions] Our next question comes from Yigal Nochomovitz.

Yigal D. Nochomovitz - Morgan Stanley, Research Division

I have a duration question. So from my analysis, it seems that the duration in the 25-milligram pool actually went down a bit. So I just want to understand that a little bit better, given that I was expecting it to go up with another 2.5 months of therapy and the new -- the 3 new patients at 25 milligram doesn't seem to be enough to pull it down, so if you could discuss that. And then given that you've got 43% of the patients still on the study, I'd be curious to know of the patients that have dropped out, where are they coming from? Are they mainly from the PR pool that have progressed or is it coming from nodals that have dropped out?

Julian Adams

So I'd love to give you a more comprehensive answer to the question, which is a pretty detailed and comprehensive question. which you clearly follow our data very closely, Yigal. So it's a very stochastic process. We have also -- we haven't identified specific patients who have had AEs and come off studies and link them to their response rate. So it's not possible with our abstract, and I don't want to comment on patient-specific details. But it's not uncommon for -- to see a fluctuation in time on study in this way. Remember that it is a Phase I study and we're governed by Phase I rules. The patients coming off study for AEs may otherwise be much better managed in a Phase II setting when we have different rules for dose interruptions and continuation on study.

Yigal D. Nochomovitz - Morgan Stanley, Research Division

Okay. Can you say anything more about the one CR? Are they still on the study? Anything about the durability? And I'd particularly be curious to know, based on the ASCO data, there's an 80% chance that they had adverse set of genetics. So it'd be interesting to know if, in fact, they did.

Julian Adams

So I will -- love to tell you that. Come to our ASH presentation, and specifically, we will highlight that for you.

Yigal D. Nochomovitz - Morgan Stanley, Research Division

Okay. And then one question on the safety side. I just was a little confused, because you said in the abstract, you had 20% transient neutropenia. But then in the ASCO poster, you had 39% Grade 3 or 4 neutropenia. And even if you take into account the dilution from the additional 10 patients enrolled, assuming they didn't have neutropenia, that wouldn't be enough to push it down to 20%. So maybe it's something about the definition of transient, which I'm missing. But if you could shed some light on that, that will be great.

Julian Adams

Yes. There -- so neutropenia, which plagued us early and was defined early, we have subsequently learned that it is a function of the background of disease. And so we now know that we can continue to have patients on study with neutropenia. In fact, we have allowed patients with grade 4 neutropenia to enter studies. So there's no restriction to neutropenia and there's no dose interruption in neutropenia. There has really been no [indiscernible] to the neutropenia recorded. But as with all lab values, we record them all and we report them faithfully.

Yigal D. Nochomovitz - Morgan Stanley, Research Division

If I could just sneak in one final question, you mentioned you'd have an update on asthma by the end of the year. So I mean, does that mean that the data is coming then? Or is it, given the dose escalation nature of that study, is it going to be greater?

Adelene Q. Perkins

We are committed to providing just the top line summary. And so you will hear an update by the end of the year.

Operator

And I'm not showing any further question at this time. I'd like to turn the conference back over to Adelene for closing remarks.

Adelene Q. Perkins

Thank you, everyone, for joining us on the call today. We are looking forward to seeing many of you at ASH and to providing further updates on IPI-145 in the coming months. Thanks, operator.

Operator

Ladies and gentlemen, that concludes today's presentation. You may now disconnect, and have a wonderful day.

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