Idenix Pharmaceuticals Inc. (NASDAQ:IDIX)
32nd Annual JPMorgan Healthcare Conference Call
January 15, 2014 2:00 pm ET
Ronald C. Renaud, Jr. - President and Chief Executive Officer
Geoff Meacham - JPMorgan
Geoff Meacham - JPMorgan
Good morning. Welcome to day three of the 32nd Annual JPMorgan Healthcare Conference. My name is Geoff Meacham. I'm senior biotech analyst here at JPMorgan. It's my please to introduce Idenix Pharmaceuticals, an emerging leader in Hepatitis C space, and speaking on behalf of Idenix is CEO, Ron Renaud. Ron?
Ronald C. Renaud, Jr.
Good morning, Geoff, and thanks to you and JPMorgan for having Idenix here today. Before we begin, I'd just like to remind folks that this presentation includes forward-looking statements about all aspects of our business, subject to important risks and uncertainties that may cause our actual events to be possibly differ materially from our current expectations for a number of reasons. These are outlined in our filings with the Securities and Exchange Commission.
So with that, a little bit about Idenix. We are currently focused on developing all-oral pan-genotypic regimens to treat patients with Hepatitis C with one goal and that's to cure these patients. We have two areas of focus right now in that area. Our Nucleotide Prodrug Program, which represents a significant core competency of our Company and leverages much of the scientific foundation upon which Idenix, our Company, was founded.
IDX21437 is our lead candidate from the nucleotide prodrug discovery program and is currently in a proof-of-concept state, and I'll talk a little bit more about that later in the presentation. We also have additional nucleotide prodrug candidates at various stages of preclinical evaluation.
Our other program that you've heard us talk about in the past is more advanced and is led by our NS5A inhibitor called samatasvir, formally known as IDX719. Samatasvir has demonstrated pan-genotypic activity in the clinic and is currently in a broad-based new program with J&J's protease inhibitor called simeprevir recently approved and ritonavir-boosted non-nuc. And as I mentioned, our primary focus at Idenix is to cure HCV and we want to do this by combining our own nucleotide prodrug with our own samatasvir, our own NS5A inhibitor, with the goal of a pan-genotypic once daily treatment for HCV.
Now I think a lot of folks at this meeting and in past meetings have been following the HCV marketplace pretty closely, it gets a lot of coverage, it gets a lot of media coverage, and I think most people are aware that the market opportunity in HCV is significant. That said, many believe the greatest market opportunity here will exist in the near term or over the next few years, a very quick spike and then it goes away. We see it a little bit differently and that's for a number of reasons. It's not because we're behind sensible leaders, but it's because we've done some significant market research here, not only looking at this area but looking at the past history of launches in some other therapeutic areas and we've got some interesting slides here that show why we believe this is a long-tail marketplace.
There's no doubt that the first movers are going to leverage the pent-up demand that's out there with better cure rates, improved safety profiles and more convenient regimens, but these regimens are still primarily focused on one genotype and right now still have pegylated interferon and ribavirin as part of their backbones and this is going to limit the number of patients that can actually go on these treatments. Even the initial advances into all-oral approaches will not be pan-genotypic. They are still going to be largely focused on genotype-1. So we believe that a second mover with a pan-genotypic nucleotide prodrug based all-oral regimen can garner significant market share, and I'll walk through a couple of slides how we get there.
The first thing we need to do is take a realistic look at the current pool of patients with HCV. You've heard this many time but vast majority of the patients in the U.S. and Europe that have HCV today don't know that they actually have HCV. Many people who are infected with HCV are asymptomatic for upwards of 15 to 20 years before blood test or other symptoms become apparent. So, the new and more potent in all-oral regimens will certainly drive I think very aggressive screening initiatives. We're seeing some of these screening initiatives get underway driven by the government, but I think as we see big pharmaceutical companies come into the next launching all-oral approaches, they will also drive a big part of that screening initiative. But there comes some other hurdles, particularly in geographies where healthcare costs are already under significant pressure.
And we also need to consider at least at the outset that there are likely to be capacity constraints. In our own market research of over 300 physicians, these are highest prescribing physicians that we could find in a data set, they state that they are limited to treating HCV about 25% to 30% of the time. So you can tell right there there's going to be just a limit of how many patients can actually come through – come to the office or the proverbial pipeline so to speak.
And with the number of already diagnosed patients, we estimate it would take at least 10 years to work all these patients through the system or through the treating doctors' offices. So right there we see a significant market opportunity with just the patients that are currently diagnosed with HCV. We do acknowledge that things will accelerate, especially with improvements in treatment and increased cure rates, but we think for now this represents a significant extended opportunity.
So we kind of put this a little bit in the context of street expectations. I think we all have seen a lot of the forecasts that are out there, and forecasts point towards somewhere in the order of 15 billion to 20 billion in annual sales for the global HCV market beginning in 2016. And keeping in mind that in the U.S. alone, the peak peg riba base – so if you think about what the standard of care has been over the last 10 to 15 years, it's been pegylated interferon and ribavirin based treatment paradigm – the number of patients, the peak number of patients with that regimen has been somewhere in the order of 160,000 to 180,000 patients.
So it was pretty easy to see how we can get back to at least that number of patients, and with the current pricing of some of the newer regimens and the newer therapies that are coming along at 12 weeks of oral therapy, you can see how these forecasts become very, very easy to accept. And the epidemiology actually points to much larger numbers given that, as I mentioned, most of patients with HCV are currently undiagnosed and even for those that are diagnosed many are still untreated for a whole host of reasons.
So there's no doubt when we talk to the participants in our market research and the surveys that we run, they are keen to use the newly approved all-oral therapies or the new oral components and getting to the all-oral approaches, but there remains a strong desire for an effective pan-genotypic and all-oral approach. As I mentioned, genotype-1 remains a major focus of the market industry but we continue to see the non-genotype-1 opportunity as highly significant on a global basis. It's likely that more than half the global population that has HCV or has been infected with HCV are not genotype-1 and we're even seeing as recently as in the last couple of weeks new genotypes within the HCV or the Hepatitis C virus are being identified. So having the safe convenient pan-genotypic all-oral approach is strongly desired.
So we look at the number of programs right now that are in the marketplace looking at an all-oral approach and there's at least a dozen. I haven't counted exactly how many are on here but there's at least 12 of them on here. And some of these regimens, if not most of them, have demonstrated very impressive SVR, sustained viral responses or cure rates, in certain genotypes. Most of these are genotype-1 focused. And overall there's no doubt, with everything that's going on right here, this has been terrific for patients with HCV. In fact, if you look at this, I think we probably could make a good estimate that in the last five to six years, more patients have been cured on clinical trials than on commercially available approaches over the last 10 years. I think that would be a very fair estimate.
So this has been a – if you have HCV, you've been infected with HCV, a good time to be getting treated. But the treating physicians need to evaluate many factors before they start treating these patients. They are looking at genotypes, they're looking at cure rates and they look at which regimens. There's a lot of these regimens that contain more than one drug obviously, combinations of two drugs and in some cases three and four drugs, and that obviously lends itself to the possibility for drug-drug interactions and this is something that physicians, prescribing physicians, will have to consider. And then one thing that we don't really have a good sense of right now in how this will play out within managed care is the cost of these compounds.
So these are just a few things that we see as on the horizon as hurdles to a quick rise in the number of treated patients. But we think it can be easier and we have to try to understand what we can bring to the marketplace that can compete with everything up here but be a lot more simpler, be a little bit of a better mousetrap, if you will, compared to what everybody else is developing. And so, if we want to look at what could make this the easiest, we really want to get to a place where if the patient shows up in the prescribing physician's office, the question should be, do you have HCV or not. The genotyping, the tracking of the viral will as always continue to happen, but we want to make the decision as quickly as possible but as easy as possible.
And one of the ways we think we can do that is getting to an all-oral approach and a pan-genotypic approach and we believe at Idenix that there has to be a nucleotide prodrug based approach and that's one we want to do with our own, as I mentioned, with our own NS5A inhibitor. And if we think of all the opportunities that are out there or the competitors that are out there that are able to do that, the potential choices become quickly limited and as I mentioned we believe that the nucleotide prodrug is the key backbone component to treating these patients as easy and as quickly as possible.
So with that, we'll focus a little bit on our nucleotide prodrug program. IDX21437 is currently the lead candidate from our prodrug discovery program, and as I mentioned, we've gone through extensive amount of preclinical safety. This toxicity analysis has included an extensive focus on cardiac, mitochondrial, genotoxicity and many assessments made part of our GLP preclinical toxicity program. We got good safety margins based on these results, and based on our in-vitro and in-vivo analyses we also expect a potent and pan-genotypic compound here.
We began in one-day healthy volunteer in HCV infected patient study during the fourth quarter of 2013 and we also evaluated the highest dose in this study which was 300 milligrams in healthy volunteers for seven days with a look at safety and did not see any safety issues. So based on the safety and activity we saw in the one-day study, we recently moved into a seven-day study.
As I mentioned, safety is always an issue, especially with the nucleotide prodrugs. We've seen a lot of press, a lot of things over the last 12 to 18 months around the nucs in the HCV setting. So the safety hurdles here are very, very high. We believe that these hurdles have to be exceeded before going to clinical trials and so for that reason we've conducted a significant number of safety analyses even above and beyond what you would see in a standard battery of GLP based preclinical testing. We've done significant cytotoxicity analyses and we've seen minimal toxicity in a large panel of these mammalian cell types and have not noted any mitochondrial toxicity, which historically has been the toxicity that is most attributed to the nucs and the nucleotide prodrugs.
So the current clinical program is shown here on this slide, and as I mentioned the single-dose portion was designed to give us an early look at safety and PK. The seven-day portions will gain an early view of the antiviral activity, and as I mentioned, we've completed the single-dose portion and moved into the seven-days and healthy volunteers. The PK that we saw in the one-day support – the PK we've seen preclinically has supported one-day daily dosing and was similar between the healthy volunteers and the HCV infected patients in the one-day study. So as I mentioned, the study is underway and we're looking forward to data from this program in the first half of 2014.
So a big part of, as I mentioned, the goal here is to have this one pill once a day all-oral and pan-genotypic regimen, and to that end we've developed a co-formulated pill, as you can see here in the picture, that combines IDX21437 and samatasvir, our NS5A inhibitor. We expect to begin testing this co-formulated pill once we know the best effective dose of each of these compounds. So as much as we'd like to get started with this as quickly as possible, we really have to understand the doses of our nucleotide prodrug on its own and then we'll have to evaluate the doses of our NS5A inhibitor in combination with this. So this will take a little bit of work.
I think what we're excited about those is that we know from a formulation perspective, these two compounds are very easy to co-formulate. It is likely that we'll probably take this co-formulation into the clinic once we get some more advanced trials or the pivotal trials.
So I move on to the NS5A inhibitor program we have at Idenix, which I mentioned is called samatasvir, and we've been very encouraged by what we've seen to-date. The preclinical profile has been supported in the clinic, we demonstrated safety and pan-genotypic activity, it's currently a component of two ongoing 12-week Phase II all-oral combination studies, they were actually shown on one of the previous slides, in collaboration with Janssen Pharmaceuticals, a subsidiary of J&J, and these studies are called HELIX-1 and HELIX-2 and I'll talk a little bit about each of these.
HELIX-1 is a dual combination, a double combination of samatasvir and simeprevir, the recently approved protease inhibitor from J&J, and these are done, this study is being done in combination with ribavirin. We reported on preliminary results from the HELIX-1 program earlier this week. I'll recap that data in just a minute.
HELIX-2 is a triple combination study of samatasvir, simeprevir and then a ritonavir-boosted non- nucleoside polymerase inhibitor called TMC647055, we just call it 055, which is boosted with ritonavir. And this study is going to look at the regimen both with and without ribavirin, and we've now seen initiation of the HELIX-2 study just this past December.
So, a little bit about the study and the data that we just announced earlier this week. HELIX-1 is a combination of two DAAs, samatasvir and simeprevir with ribavirin, patients with genotype-1b and genotype-4 HCV infection. We look at three doses of samatasvir with 150 milligrams of simeprevir, and the primary objectives of this study was safety, tolerability, efficacy, and we also looked at PK/PD. So the data is here, as I mentioned disclosed on Monday, and I think the most important thing we take away from this data is that it is a demonstration of safety for samatasvir in an all-oral regimen for 12 weeks.
Patients received 50 milligrams of samatasvir, or the patients that did receive 50 milligrams of samatasvir in combination with simeprevir, were the best performing cohort and this informed us on the best dose for HELIX-2. And I think everybody can see on the slide here, the data showed us that as the dose of samatasvir increased, the SVR rates declined. This is a result that was not, absolutely not predicted by the DDI studies, the drug-drug interaction studies, that we completed before the study. So we're working with J&J to get a better understanding of what happened here. But easily we see that the 50 milligram dose was the best dose and that's what we'll take into the ongoing HELIX test, what we have taken into the ongoing HELIX-2 study.
This as I mentioned adds another direct acting antiviral in the form of a non-nuc 055 boosted with ritonavir. So I think with an 85% SVR4 with samatasvir and simeprevir, we're expecting that the addition of another potent direct acting .antiviral will give us a good result, and this study will likely add additional arms, exploratory arms, as we look at going beyond the current genotypes and the study beyond genotype-1 and we'll probably amend this study as the program moves forward. And we expect to have results from this program probably sometime in the second half of this year.
So I spent some time talking about the market taking a little bit longer to play out and I think many expect and we remain focused on a very aggressive nucleotide prodrug discovery effort, and reason for this is we continue to believe that there's room for improvement within nucleotide prodrugs. Even with the leading nucleotide prodrugs, the ones that's on the market today, there's still some weaknesses across the genotypes or at least in one genotype specifically. This is still going to be a marketplace that's going to require combinations of drugs. So the ability to get nucleotide prodrugs that provide very, very good triphosphate exposures but can do this at lower doses continues to be a major goal for us at Idenix.
We are also looking at trying to take an innovative approach to treating these patients. I say innovative because it would be innovative for HCV but it's not innovative in virology and that is by putting two nucleotide prodrugs together or new nuc strategy, and we've seen that work very, very well in HIV. Not sure if it will work in HCV but given that nucleoside chemistry is our core competency, it's something we believe very strongly in and we think it's worth pursuing.
We also have additional nucleotides beyond IDX21437. These are at various stages of preclinical evaluation and we'll talk more about them as they become closer to clinical reality, but we still have a focus on the nuc NS5A and the once-daily pan-genotypic approach. And I think what's important about all this work that we focus on, we've synthesized well over 2,000 nucleotide prodrugs over the last two years, we've separated them out into their individual isomers, we really have a good understanding of what we have in the library, but it's also enabled us to discover or to evaluate how our discovery efforts could be leveraged and in fact to think about how we could focus in areas beyond HCV.
And so to that end, we've begun to try and carefully understand what we have in the compound library. It's well understood I think for a lot of folks that are familiar with nucleosides and nucleotide prodrugs that these compounds are involved in several cellular processes such as DNA and RNA synthesis, cell signalling, enzyme regulation and metabolism. So, much of the focus with nucs and nucleotide analogues have been around modifications and developments to make the nucs work like they are the natural counterparts of the physiological counterparts that exist naturally in humans to take advantage of the cellular metabolism and get them incorporated into DNA and RNA to inhibit cytodivision and in the case of HCV or HIV viral replication.
So, given the mechanism of these compounds, there's a lot of areas where we could go down, at least a lot of therapeutic opportunities, for example in the inhibition of cancer cell growth, inhibition of viral replication as you can see here what we're doing with HCV, and other indications.
So we have a very early effort at Idenix right now, it hasn't consumed a significant amount of human or financial resources but it's been a very early effort to understand how to best leverage our compound library beyond HCV. And we ran some screens against some anti-bacterial targets, I don't have that data here, but we also looked at some antiviral targets which is what's up on this slide, and the initial data against the selected group of flaviviruses as well as other RNA and DNA viruses have yielded some very interesting data.
So you can see here, we have a number of viruses where compounds from our library, we selected just under 3,000 compounds, that at very, very low concentrations, we're able to inhibit a number of well-known viruses out here. So, the ability or the jumping off point to have a pan-flavivirus or other antiviral therapeutic pathways is very real for us and we're going to currently – we're currently trying to figure out how to jump off and move down some of these pathways.
Beyond infectious disease, we also wanted to leverage our prodrug and targeting capabilities. We've developed a handful of early-stage prodrugs that we put through an ex-vivo screen of leukemia cells from patients and it has given us some pretty interesting data as you can see up here on this slide. At this slide, it's very early, it's very basic, it's an ex-vivo screen. These are compounds that have been unoptimized, we have not spent a lot of time trying to optimize these compounds or doing any kind of structural activity relationship type work with these, but very early data comparing some Idenix prodrugs against currently marketed cytotoxic nucs that are out there show that we have very nice activity, in some cases better activity than the currently marketed nucs in this area.
And I think what's important here is with targeting with prodrugging, we can probably – we hope to get to much lower doses, high exposures, much lower doses and potentially minimizing the off-target toxicities, and perhaps in some cases where you have chemo resistance, overcoming that chemo resistance. So this is something that is very early stage. We don't have the capabilities internally, we don't have the oncology expertise for this, so this is as we move through some of these areas, we'll look to collaborate with academic or industrial partners to help us better understand what we may have here, but an interesting early look.
So moving out of the clinic and out of the lab and into the courtroom, we've got a lot of things going on with some folks down the road here in Foster City. This is a summary of the ongoing cases here and these represent what we view as many battles and a much larger war, and there's likely to be more battles and more skirmishes here, much beyond what's described here. And I think we spend a lot of time, we've been in one-on-ones at this meeting, we spend a lot of time on the phone with people and folks trying to understand where this comes to a resolution and we're a small company, we certainly understand that the market cap of Gilead, well over 100 times that of Idenix and it's probably pretty easy math, they generate our entire legal budget in one day of sales, but that's not going to even remotely deter us from protecting this intellectual property that we've developed for a long, long time. We're going to aggressively, diligently defend and protect our nucleoside and overall IP portfolio.
And I would caution folks too, this is going to be a long and tedious process, but in each one of these actions we're learning a great deal about how this all came to be and we're looking very forward to getting these cases in front of a judge and a jury. We filed two infringement cases just last month, one in Massachusetts and one in Delaware. So I think our shareholders expect nothing less than a full defense of our IP and that's how we're going to stay on this one.
We just announced also that we finished 2013 with $122 million in cash. So we have the cash to move through the programs that I just outlined here as well as executing on our legal strategy. And I want to close with this slide which shows what we plan to accomplish this year. I'm not going to walk through each one of these milestones in a detail, but the bottom line is, we want to be in position at the end of this year to move into later stage all-oral and fixed-dose combination studies. So with that, thank you for your time.
[No Q&A session for this event].
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