Idenix's CEO Presents at 2014 Barclays Global Healthcare Conference (Transcript)

| About: Idenix Pharmaceuticals, (IDIX)

Idenix Pharmaceuticals Inc. (NASDAQ:IDIX)

2014 Barclays Global Healthcare Conference Call

March 13, 2014 9:30 AM ET


Daniella Beckman – Senior Vice President and Chief Financial Officer


Ying Huang – Barclays Capital, Inc.

Ying Huang – Barclays Capital, Inc.

All right, good morning everyone. So, we’re going to kick off with our next session. My name is Ying Huang. I’m the U.S. biotech analyst here at Barclays. And we’re very pleased to have Idenix Pharmaceuticals here as our next presenting company. And we have from the company presenting here will be Daniella Beckman, the Chief Financial Officer.

So with that, let me just welcome Daniella. Thanks for coming to the meeting [ph].

Daniella Beckman

Thank you. Before I begin, I will review our Safe Harbor statements with you. This presentation may include forward-looking statements about our business that are subject to risks and uncertainties that are detailed in our SEC filings. So, Idenix is currently developing all-oral pan-genotypic regimens for the treatment of hepatitis C. and we’re currently focused on two main programs, our nucleotide prodrug and our NS5A inhibitor programs. Ultimately, we plan to combine the two of these.

We have a long history of discovering and developing nucleotides or nucs. We have intensified these efforts over the last three years by analyzing the different components of a nuc in order to develop a nuc that is fixed, safe and potent.

I want to emphasize here that we believe nucs will be a backbone therapy, a backbone component of any future’s HCV therapies. Nucs are generally pan-genotypic. They have a high barrier to resistance and offer unique mechanism of action versus other classes of drugs.

IDX21437 is our lead nuc that is currently in a Phase I, II clinical trial outside the U.S. and I’ll go into more details on that program a little later in the presentation.

Samatasvir NS5A inhibitor has shown safe and potent activity in the clinic, and it is currently in two Phase II oral clinical trials under the non-exclusive Janssen collaboration with JNJ’s simeprevir and ritonavir boosted non-nucleoside inhibitor TMC647055.

These trials are HELIX-1 and HELIX-2 and have allowed us to generate a substantial safety database for samatasvir, which will enable us to combine samatasvir with IDX21437 in a Phase II pan-genotypic trial in the second of 2014.

So, moving on now to the HCV market, we believe there are several components that contribute to the significant commercial opportunities that exist for HCV. First, the size of the market, with over 150 million people infected with HCV, this generates large market estimates of greater than $200 billion cumulative.

Additionally, the recently approved regimens for hepatitis C have mainly been focused on genotype 1 and some of the regimens also still contain pegylated interferon, which is administered through an injection, as well as ribavirin. We believe that a differentiated regimen that is pan-genotypic and all-oral will allow more patients to be treated in the market.

Of the large population of people that are infected with HCV, a significant portion of these people do not know they have the disease. We believe that this – and some other factors that I’ll detail in a moment will create a long tail in the marketplace, allowing – taking more than a decade for these patients to be treated.

So we believe although, we may not be first in the market; there is ample market opportunity with a long tail for differentiated pan-genotypic regimens. And I’ll spend a few moments now talking about each one of these components over the next couple of slides.

So beginning with why we believe the market opportunity is sustainable and we’ll extend into the year 2030. First, the overall disease paradigm, we acknowledge that the new all-oral regimens will generate an increase in treated patients due to increased screening initiatives, as well as patient awareness program, both funded by the government, government-sponsored programs, as well as the commercialization efforts related to the new drug that will be newly approved or have been approved.

However, we do think these initiatives will take much longer to have an impact than currently expected. Of the 150 million that are infected with HCV, roughly half of these patients do not know they have the disease and an additional 3 million to 4 million people become infected each year.

From medical perspective, these patients are initially asymptomatic and typically take 15 to 20 years to show symptoms of the disease before they are diagnosed. And roughly, half of these patients [indiscernible] not show up on a routine blood test until severe liver damage has occurred.

Another challenge will be the high cost and restrictions that managed care may impose such as limiting, prescribing for specialists or harder-to-treat patient segments especially outside the U.S. Currently, there are patients – there are countries that are limiting treatment to patients with high fibrosis or a significant liver damage.

Another factor is likely to be the capacity constraints. we conducted our own market research of over 300 physicians in the U.S., Europe and Canada this year, and many of the high prescribing physicians, so that they were limited to treating HCV 25% to 35% of the time.

With no near-term opportunity to increase capacity strength or drug budgets outside the U.S., and economic warehousing may be creative from the stringent guidelines and create long waiting lines for patients to be treated.

We believe that treatment of already diagnosed patients at anticipated levels will take more than 10 years creating a long tail in the market. And for those that follow the HVC space, I’m sure you’ve seen some of these numbers, current epidemiology suggests prevalence of 8 million in the U.S., EU5 and Japan, with 3 million people diagnosed and 5 million undiagnosed, that’s roughly 60% of people that are currently undiagnosed.

Additionally, consensus of reporting about $15 billion to $20 billion annual global sales for HCV, peaking in years 2016 to 2018, and as you can imagine from such a large market, there’s many companies competing in order to cure hepatitis C.

I think it’s important that companies have a differentiated regimen, in order to remain competitive in the field. One way that Idenix is targeting a different profile, is looking at pan-genotypic regimens. In our market research that we conducted, we asked physicians what was the most relevant attribute for next generation HCV therapeutics and the most significant answer was pan-genotypic coverage. They also responded with convenience under the one pill once a day co-formulated pill, as well as lack of ribavirin, which they said was of secondary end points.

As I mentioned, most of the regimens that are currently on the market or in development are concentrated on patients with genotype 1. However, from our market research in the chart shown here, roughly a half – more than half of our patients worldwide do not have – are non-genotype 1. Therefore, we think it’s very desirable to have a pan-genotypic regimen that can treat all patients. So knowing that there is a large market for HCV, there is currently several companies competing to cure the disease. And there’s over a dozen all-oral HCV combinations currently in development with projected launch date by 2018.

Now assuming all of these may get to the market that gives physicians a lot of options in order to cure or treat their patients. However this goes back to our market research where the physicians have said that they want something they pull in, but also convenience that can treat all patients.

Additionally, paid doctors will have to evaluate drug-drug interaction. Several HCV infected patients are also on other drugs for high blood pressure, diabetes or other issues and some other regimens currently in development have known drug-drug interaction issues.

So therefore, given what our market research shows us, the options become limited when you are looking for a drug with high cure rates that has one pill, once a day dosing as well as pan-genotypic and low drug-drug interaction. We believe that nucs will be a key component in future hepatitis C regimen.

so going into some details now about our lead uridine nucleotide prodrug, IDX21437, it’s currently in a Phase I/II clinical trial, which I’ll go into more details on the next slide. but I wanted to talk about the preclinical profile now. We have conducted extensive preclinical research specifically in the areas for gene tox, mitochondrial tox, as well as cardiac safety. As these have been known areas for with issues for nucs in the past.

IDX21437 has proven clean in these areas. And have shown good safety margins for doses that we anticipate taking into the clinic. Additionally based on our in vitro and in vivo analysis, we expect IDX21437 to have potent, pan-genotypic activity.

And as I mentioned it’s currently in a Phase I, II clinical trial outside the U.S. We have not filed an IND with the FDA yet. But rather received approval in multiple countries in Europe as well as Canada and New Zealand under CTA filings.

And although we are conducting these trails outside the U.S., we do plan to incorporate U.S. clinical trial designs into our future clinical program. We expect to have conversations and engage the FDA within conversations this year to provide them with our current clinical program for IDX21437 including the seven-day proof-of-concept study in our three months of tox programs. We’ll plan to discuss except next steps as well as clinical trial designs given the new all-oral regimens have currently recently been improved.

Moving onto the clinical trials and details of the Phase I, II study. We will be evaluating approximately a 100 patients. We have completed the single dose portion of the study, which was designed to gives an early look of PK dosing and safety. We have also completed a seven-day cohort and healthy volunteers up to our top dose of 300 mg and have been no safety issues today.

The PK supports one daily dosing and with similar between healthy volunteers and HCV infected patients. And given the safety and the activity in this part of the study, we moved onto a seven-day proof-of-concept study, which is currently underway.

The seven-day proof-of-concept study will evaluate doses of 50, 150 and 300 mg in Genotype 133 patients. We expect to have the proof-of-concept study in the first half of 2014 and hope to report some of this data around the upcoming EASL conference.

So, as I mentioned our primary goal for 2014 is combined our nucs with samatasvir in a Phase II clinical trial. Around the middle of 2014, we will have completed our seven-day proof-of-concept study giving us an early look at the safety and efficacious detail of the nuc.

We would have completed the three-month tox package showing a longer safety profile of the drug as well as completed a drug-drug interaction of the IDX21437 and samatasvir to look at any impact, when the two drugs are given together.

Upon successful completion of those three steps, we have plan to initiate large Phase II clinical trial in multiple genotypes. And as shown in the slide, we have already co-formulated the two drugs in a pill, getting us one step closer to our opening goal of having one pill, once-daily dosing of genotypic regimens.

We believe that nuc NS5A combination has the greatest benefits to cure hepatitis C. Due to the scarcity of the assets the convenience of one bill once-daily dosing the high barrier to resistance and the potential to be safe, potent and have low drug-drug interactions.

Switching now to our NS5A program, samatasvir. Its preclinical profile has shown potent pan-genotypic activity and a favorable safety profile that was confirmed in the clinic. It’s one of the few NS5As that have shown potent pan-genotypic activity in the three-day proof-of-concept study.

And as I mentioned, it’s currently in two Phase II clinical trials under our Janssen collaboration, called HELIX-1 and HELIX-2, which I’ll go into more detail in the next couple of slides.

So, starting with HELIX-1, this is our 2-DAA combination of samatasvir and simeprevir plus ribavirin. Part A is looking at, or evaluating approximately 60 treatment-naïve genotype 1b or 4 patients. We will be looking at three doses of samatasvir and 150 mg dose of simeprevir.

And the overall goal for this study was to build a safety database for samatasvir and the result have concluded that the combination regimen has been well tolerated with no treatment related serious adverse events in the clinical trial to-date.

We also reported SVR4 data from Part A, 85% achieved in SVR4 in the 50, 150 mg group and we are taking forward the 50 mg dose into HELIX-2, which I’ll discuss on the next slide. We have our Part B, the study currently ongoing, which is that looking at some exploratory arms.

HELIX-2 is our 3-DAA combination of samatasvir, simeprevir and then adding Janssen’s ritonavir boost in our nuc TMC647055 with and without ribavirin. This study was initiated in December of 2013 and we expect to have SVR4 data in the second half of 2014.

So, as we do believe there is going to be long-tail in the marketplace. Idenix thinks it’s very beneficial to continue to invest our time and our effort on the discovery and development of nucs as we think that very important for the treatment of hepatitis C as well as other indications.

Our core competencies at Idenix are our nucleotide chemistry and our prodrug expertise. and we do believe that we have strong IP in this position, generated out of all of the discovery of work we have been performing since the founding of our company.

More recently, we have been concentrated on improving the characteristics of nucleotide prodrugs, looking at novel bases, prodrugs and sugars. And through those discovery efforts, we have generated more than 2,000 nucleotide prodrugs.

As I mentioned, IDX21437 is our lead candidate out of this program, we also have additional candidates that are under evaluation for follow-on nucs, as well as our nuc-nuc strategy, which is the combination of two nucs with complementary resistance profile.

Our ultimate goal is to combine our nuc with our NS5A per pan-genotypic regimen. But as you can imagine, from the discovery work that we have generated around nucs, we also want to upside that knowledge to areas outside of HCV. And I’ll go into more details on that in the next slide.

Idenix is one of the broadest programs of any company that we’re aware of to understand the full potential of our nuc platform for HCV and beyond HCV. We have begun to try and carefully understand what is in our compound library. We want to leverage what we – our in-house expertise in these areas around nucleotide, as well as the prodrug technology.

After the initial screening of our library, we have had some hits in other infectious diseases, as well as oncology areas. We have some pilot programs ongoing in these areas and as many of you know, Jacques Dumas has joined us as our Chief Scientific Officer this year, who came from AstraZeneca where he led the development of other infectious diseases, as well as oncology. So we believe that he’ll be a great asset, as we try to target new therapeutic areas. I do want to stress however that, although we have some pilot programs ongoing in these areas, our primary focus does remain on HCV.

So now I want to highlight for you our ongoing legal matters with Gilead. previously, Idenix has been in the position of defending our IP against matters declared by the United States Patent and Trade Office, or USPTO, as well as lawsuits filed by Gilead against Idenix.

However, Idenix has recently gone on the Ascentive to protect our IP. In December of 2013, we filed two patent infringement litigations against Gilead in the U.S., one in Massachusetts and one in Delaware. and in both of those cases, we are claiming that involve the infringes our IP.

We also declared a patent interference in December, in connection with those patent infringement litigations. And in 2012, as well as December 2013, the USPTO declared two interferences between Gilead and Idenix. And an interference is generally declared when the patent office reviews an application that is too similar to an already existing patent. The first interference was declared in favor of Gilead, and we are currently appealing that decision outside the USPTO and in the District Court of Delaware. The second interference is currently ongoing.

Additionally, as early as in June 2012, Gilead has filled invalidity lawsuits against Idenix in Canada, Norway and Australia. This is likely to be a long process as there are several cases ongoing in multiple jurisdictions that all have different rules, procedures and evidence that will ultimately determine which party will prevail.

Some of these cases also involve different patents, as well as subject matters. We are learning a great deal about all of the legal actions and gaining a lot of information across the different jurisdictions that ultimately we believe will cumulatively benefit Idenix. We remain committed to protecting our investment in IP around nucs.

So, turning now to finances, we ended 2013 with $122 million in cash and completed a registered direct offering in January of 2014 for about $107 million. The pro forma amount of $230 million will be sufficient into at least the second half of 2015. And with a strong balance sheet, we’ll be able to complete all of the clinical trials that we – that I discussed today, including the HELIX trials and the POC for IDX21437. Additionally, the cash will allow us to fund a large Phase II clinical trial of the combination of our nuc and our NS5A, as well as fund our legal strategy.

Now I’ll summarize for you the key milestones that we intend to achieve in 2014. after a seven-day of proof-of-concept study for IDX21437 is completed, we intend to initiate a Phase II of the nuc and samatasvir and hope to report SVR 4 data by the end of the year.

Under our Janssen collaboration, we have already reported SVR4 data from HELIX-1 and intend to report SVR4 data for HELIX-2 in the second half of 2014.

Our ultimate goal is to be prepared for the late-stage fixed-dose combinations by the end of the 2014. Thank you.

Question-and-Answer Session

[No Q&A session for this event]

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