Ambit Biosciences Corp. (NASDAQ:AMBI)
Q4 2013 Earnings Conference Call
March 20, 2014 05:00 PM ET
Marcy Graham - Executive Director, IR
Mike Martino - President and CEO
Athena Countouriotis - CMO
Alan Fuhrman - CFO
Bob Armstrong - VP, Preclinical Biology
Chris Raymond - Robert Baird
Howard Liang - Leerink
Welcome to the Fourth Quarter 2013 Earnings Conference Call. My name is Sherry, and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct question-and-answer session. Please note that this call is being recorded.
I would now like to turn your call over to Marcy Graham. Marcy, please go ahead.
Thank you Sherry, good afternoon and welcome to the Ambit Biosciences’ Conference Call to discuss financial and operating results for the fourth quarter and full year 2013. Joining me today on the call are Mike Martino, CEO; Alan Fuhrman, CFO; and Athena Countouriotis, our Chief Medical Officer.
Before we proceed, I would like to remind everyone that statements made during this call regarding matters that are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement.
To learn more about these risks and uncertainties, please read the risk factors set forth in our most recent filings with the Securities and Exchange Commission. All forward-looking statements made during this call speak only as of the time they are made. We are under no obligation to update these statements.
I will now turn the call over to Mike Martino, President and CEO of Ambit. Mike?
Thank you Marcy. Good afternoon everyone thank you for joining us. Today we’ll provide a brief discussion on our operating and financial results for the fourth quarter and our accomplishments in 2013. We’ll also provide a strategic overview of our plans for 2014 including an update on the Quizartinib Phase 3 trial and other ongoing trials. 2013 was a pivotal year for us, most markedly due to the completion of our IPO last May which provided the capital to continue the development of Quizartinib.
Of course the development of Quizartinib continues to be our primary focus in 2013. We had completed enrollment in our Phase 2b trial and presented these results at ASH. ASH was another outstanding conference for us with Quizartinib featured in four oral presentations.
In addition to the data from the Phase 2b study, data was presented for the first time from two studies on the use of Quizartinib in the treatment of newly diagnosed patients in combination with chemotherapy. As we enter 2014 the Phase 3 trial is a central focus for the team and our plan is to initiate the trial in the second quarter. Based on this start we anticipate the interim analysis in the second half of 2015 and top line data as anticipated in the first quarter of 2016. I would remind everyone that both of these are event driven and this is our best forecast given what we know today.
Our Phase 3 trial is a huge undertaking and the details matter. Our team has shown a great deal of commitment throughout the process of preparing to initiate this study and I'm very proud of their efforts. Their dedication and focus have been important factors in getting us to this point and will be key drivers of our success.
In 2013 we also supported a number of additional studies to develop Quizartinib in other clinical settings including post transplant maintenance therapy and in combination with chemotherapy in front line treatment.
These efforts will continue in 2014 with the goal to expand the clinical utility and market potential of Quizartinib beyond the relapsed refractory setting. Athena will elaborate on the Phase 3 trial and ongoing trials in a moment.
I have to say we remain bullish about the potential of our pipelines and are determined to make progress on its development in 2014. AC410 is a potent selective, orally administered small molecule inhibitor of JAK2, which intermediates important cytokines including IL-5 and IL-13. AC410 has potential utility for the treatment of autoimmune and inflammatory diseases or has immunotherapy and oncology. AC708 is a potent and selective small molecule inhibitor of colony stimulating factor 1 receptor or CSF1R which is thought to play a key role in the proliferation of macrophages, which are involved in oncology, autoimmune and inflammatory diseases. We plan to further provide updates on our pipeline in future earnings calls.
We continue to explore strategic partnerships as a means to accelerate development and maximize the potential of Quizartinib and our other pipeline assets. The goal for Quizartinib remains to retain commercial rights in U.S. and enter into collaborative arrangements for development and commercialization in other markets such as Europe and/or Asia.
With that overview, I'll now turn the call over to Athena Countouriotis, our Chief Medical Officer to provide us with additional detail on the Phase 3 study and an overview of other ongoing studies. Athena?
Thank you, Mike and hello everyone. We are excited to begin the year in preparation to initiate our Phase 3 study and are making progress on our plans to begin this randomized controlled trial in the second quarter. As a reminder, the Phase 3 clinical trial will compare Quizartinib as monotherapy to one of three chemotherapy regimens with a 2 to 1 randomization of Quizartinib to chemotherapy. The trial will be conducted in FLT3-ITD positive patients over the age of 18 who have relapsed from or are refractory to frontline chemotherapy, including those patients relapsing following a stem cell transplant. The trial is expected to enroll approximately 326 patients in the United States, Western Europe, Canada and Australia. The primary endpoint for the Phase 3 clinical trial will be overall survival.
In our Phase 3 trial, only the patients in the Quizartinib arm who proceed to transplant can reinitiate Quizartinib following their transplant. We believe Quizartinib given as continuous maintenance therapy following a transplant has the potential to increase duration of remission and overall survival. An interim analysis will be conducted and includes an adaptive design allowing the Data Safety Monitoring Board to recommend an increase in the number of patients if warranted. Enrollment is expected to be completed in the second half of 2015, assuming there is no increase in the number of patients following the interim analysis.
We are excited about starting the Phase 3 trial and believe that this trial can support approval for Quizartinib based on its current statistical design. We collected data from historical databases, from well-known AML treatment centers as well as utilized recently published data from a similar Phase 3 study to support the assumptions on overall survival of the chemotherapy option in the study.
Additionally we have over 480 patients treated in Phase 1 and Phase 2 monotherapy studies with Quizartinib that support out overall survival assumptions. As stated previously, we believe the opportunity for maintenance therapy only for those patients who were initially randomized to Quizartinib could lead to an improvement in duration of response and overall survival.
Mike highlighted that we continue to expand the clinical development of Quizartinib beyond its application in relapsed/refractory FLT3-ITD positive AML patients. Last year we initiated a Phase I clinical trial to evaluate Quizartinib as a maintenance therapy for patients with AML. The goals of this trial are to evaluate the safety and tolerability of Quizartinib as maintenance therapy. We expect data from this trial to be presented at a future medical conference.
Additional studies of Quizartinib in investigator-sponsored trials are ongoing. I will now highlight three of these studies. First a Phase 1, 2 clinical trial referred to as AML 18 which is evaluating Quizartinib in combination with conventional chemotherapy in newly diagnosed AML patients over the age of 60, regardless of FLT3-ITD status. Preliminary data from this study was presented at the 2013 Annual Meeting of ASH. The study determined a maximum tolerated dose that can be given sequentially after high dose chemotherapy in older patients with newly diagnosed AML. A follow-on investigator-sponsored Phase 3 clinical trial is planned.
Second, the LI-1 study which is an ongoing investigator-sponsored Phase 2/3 clinical trial evaluating Quizartinib in combination with low dose cytarabine in previously untreated patients with AML or MDS over the age of 60 who were not suited for standard induction chemotherapy. A total of 50 patients are planned to be enrolled prior to an analysis that will determine whether or not the clinical trial continues with additional patients.
And third, an investigator-sponsored Phase 1/2 dose escalation clinical trial currently evaluating Quizartinib in combination with either 5-azacitidine or lower dose cytarabine for patients 18 years or older who have relapsed AML or MDS. Pending completion of the dose escalation phase, the clinical trial is expected to expand and evaluate both previously untreated FLT3-ITD positive AML patients aged 60 or older and FLT3-ITD positive patients 18 years of age and older in first relapse. Approximately 50 patients are planned to be treated in this clinical trial.
As Mike mentioned previously, 2013 was a pivotal year for Ambit given the upcoming Phase 3 trials and our expanded clinical development plan outside of relapsed/refractory AML. We look forward to 2014 and the ability to expand Quizartinib access to many AML patients through participation in these clinical trials.
With that I will now turn the call over to our CFO, Alan Fuhrman, to discuss financial results. Alan?
Thank you, Athena. Revenues were $1.3 million for the fourth quarter and $27.1 million for the full year 2013. The quarter-over-quarter decrease of $1.7 million was primarily due to the termination of our collaboration with Astellas which occurred in September of 2013. This decrease was partially offset by 1 million milestone we received from Teva Pharmaceuticals.
For the full year 2013 there was a $9.5 million year-over-year increase in revenue resulting primarily from the acceleration of the license fee revenues related to the termination of the collaboration with Astellas.
Research and development expenses for the fourth quarter and full year 2013 were $6.1 million and $26.3 million. This represents a decrease of $480,000 and $10.4 million from the same periods in 2012 respectively and was primarily due to lower Quizartinib research and development expenses resulting from a reduction in the number of patients being treated and followed in our Phase 2 clinical trial. Going forward, we expect research and development expenses to increase as we conduct our Phase 3 clinical trial of Quizartinib and in support of the development of our other pipeline assets.
General and administrative expenses for the fourth quarter and full year 2013 were $3.3 million and $10.3 million respectively. The increase of $1.3 million in the fourth quarter and $3.8 million for the year was primarily due to increased costs related to stock based compensation expense, personnel expense and public company related expenses.
Other income was $6.1 million for the three months ended December 31, 2013, an increase of $6.4 million over the same period in 2012. This was primarily due to the change in fair value of the company’s stock warrant liabilities which is driven by the change in fair value of the underlying securities. Other expenses were $4.2 million and $3.9 million for the year ended December 31, 2013 and 2012 respectively.
At December 31, 2013, the Company had cash and cash equivalents of $71.2 million compared to $17.5 million at December 31, 2012. The increase of $53.7 million was primarily due to the completion of our IPO and concurrent private placement that raised $83.2 million in net proceeds less cash used to fund operations.
Based on our current plan, we anticipate an average quarterly burn rate of between $9 million and $11 million per quarter as we proceed with the Phase 3 trial and develop our pipeline assets. At the end of the fourth quarter 2013 we had 17.9 million shares of common stock outstanding and 21.2 million shares on a fully diluted basis.
Now, I’ll turn the call back over to Mike for his closing comments.
Thanks Athena and Alan. So we made great progress during 2013 and aspire to making even more positive strides in the development of Quizartinib and our additional pipeline assets in 2014. In fact I want to share with you that I really view 2014 as the year where we have the potential to change the strategic trajectory of Ambit.
I think it’s fair to say we’re viewed today primarily as a Company with a lead asset, Quizartinib, and development for the treatment of salvage therapy in FLT3-ITD positive AML. Our vision is based on the belief that Quizartinib has the potential to be a work horse therapy with broader application in AML from front line to salvage, including maintenance therapy and potentially including ITD negative as well as positive patients.
However, our vision is also based on the belief that our pipeline assets, AC410 and AC708 are highly selective and potent compounds with the potential to be developed in market indications much larger than AML. Achieving this vision is an area of major focus for the team and we look forward to sharing updates with you as the year progresses.
That concludes our prepared comments. Operator, please open the line for questions.
Thank you. We will now begin the question and answer session. (Operator Instructions) And our first question comes from Chris Raymond of Robert Baird.
Chris Raymond - Robert Baird
Just on the Phase 3 in the maintenance phase, I know you guys have talked about this for a little while; but just trying to get a ballpark here of the kind of population we should be expecting. Can you just remind us what you’re thinking about in terms of expected percentage of patients going on to a transplant? And I know you mentioned that it’s -- patients have a choice but are there any triggers that sort of drive that choice in terms of deciding to go on maintenance in terms of talents or whatever other measures?
Our experience from the Phase 2 and 2b trials is that 35% to 40% of patients in those trials went to a potentially curative stem cell transplant. I think in general that is really a decision that is taken between the physician and the patient and it will be hard for us to insert ourselves in that decision on either arm of the trial. With that quick background I’d ask Athena to add any specific comments related to other triggers.
Yes, I would agree to what Mike just said, Chris. The first thing that we iterated, the Phase 3 sites were selected based on the Phase 2 experience. So the majority of sites for Phase 3 did come from our Phase 2 programs. So I do feel confident that the numbers that Mike just quoted will be repeated in the Phase 3, if not even higher because remember those numbers were from a later line setting. And yes, there are some criteria in regards to count recovery but the maintenance component we think will be triggered in most patients within 30 to 100 days post-transplant.
Chris Raymond - Robert Baird
Great, and then I think you mentioned that the Phase 1 that you have ongoing, the Company sponsored maintenance trial, I thought I remembered you guys hoping to have it by ASCO potentially. Can you sort of give us anymore color as to if that will happen or if it’s -- if we should be thinking about a later meeting?
Well I won’t speculate on it. I’d offer two philosophical comments that I'm sure you’ll find unfulfilling Chris but it’s the best we can do for you today. The first is that we believe that data should be presented at appropriate scientific conferences and the three noteworthy ones for us would include ASCO in June, EHA following shortly thereafter and ASH at the end of the year.
Second as a matter of policy we don’t announce abstracts submitted. We’ll announce abstracts accepted. So with that, I think Athena would agree with me that we continue to be highly encouraged by the data that we see from that trial and we’re eager to present it.
And our next question comes from Howard Liang of Leerink.
Howard Liang - Leerink
Regarding the initiation study in the second quarter, can you give us some color on whether it will be early in the second quarter and also thinking longer -- whether anything has changed with regards to the [admission of cytarabine] [ph], that you have to do regarding [inaudible]?
We’re not going to share more granular guidance than Q2. I think as you know and everyone well knows, a Phase 3 trial is a very large undertaking. With this one we expect to enroll in over 100 sites and more than 10 countries and the external cost of the trial is in the neighborhood of $40 million. So with something this large the details really do matter.
As I said in the prepared comments. I will tell you that with an undertaking like this we had a project plan that projected scenarios for start dates. The start date that we’re looking at is a bit later than the earliest scenario that we had anticipated, but not by much. And I think when we’re in a position to announce initiation of the call, it would be clear that it could have been much later as well.
So I would say in terms of our planning scenarios, we are earlier in our planning scenarios than we’re later, but that’s the best I can give you at this point. In terms of and of course we’ll press release initiation of the trial.
In terms of the work that’s ongoing, I would tell you in general that the team is working very hard on a lot of dimensions and I’ll just let Athena give you a quick couple of headlines on that activity and the progress.
I think reiterating what Mike has just mentioned Howard, obviously starting a Phase 3 trial is a very big undertaking and we have been very selective in the countries as he mentioned; approximately 10 countries again based on the experience that we have with the Phase 2; knowing that we want to be consistent in Phase 2 with what we’ve done previously. So that said, our primary focus is obviously starting here in the U.S. and we hope that that will be relatively sooner, in the second quarter.
Howard Liang - Leerink
Just a follow up on Chris’s question early on, the transplant rate, you mentioned it will probably be 35% to 45% maybe higher in the Quizartinib arm. What would be the expected rate of transplant in the chemo arm?
We said 35% to 40% from the Phase 2 -- that was in second salvage patients. Athena mentioned we had expected to be a little bit higher, the Phase 3 trials in first salvage patients. Athena, in terms of the transplant arm, what would our expectations be?
I think there is one thing to consider remembering is there’s few different populations coming into this trial as patients who have relapsed within essentially six months of having a first remission, patients who are refractory and patients who have actually received a prior transplant. So the percentages will be different based on the bucket. Having said that, we have estimated somewhere between 15% and no higher than 20% in the chemotherapy arm.
Howard Liang - Leerink
Okay, great. And then just on the interim analysis resizing, can you give us a little bit color mechanically how it works? I know DSMB can recommend their pre-specified numbers that they will follow. How does it work? Or how we will reach the number, a new size, if it’s comes to that?
Sure. So, the interim analysis will require a decision by DSMB on the few different decisions; i.e. either continue the trial as planned, recommend a sample size increase and/or stop hopefully for efficacy. Having said that, the sample size increase will be driven on pre-defined criteria that will not be disclosed to us and we will also not be disclosing. That will be information that's shared between the independent statistician and the DSMB.
Our next question comes from Jim Birchenough of BMO Capital Markets.
This is Nick standing in for Jim. I just had a question on the Phase 3. I guess I'm just a little unsure about how you handle statistically the patients who go into transplant versus not. Are you censoring patients at the time of transplant, but obviously you're going to collect data on them?
No, they are not censored patients. The endpoint here is overall survival and we will be tracking all patients in both arms towards that endpoint, both those that have been on transplant and those who have not.
In patients that are not receiving Quizartinib as part of their induction therapy, are they eligible to receive Quizartinib maintenance?
No, there is not a crossover design. So patients in the control arm are not eligible to receive Quizartinib as part of maintenance therapy.
Okay. And you mentioned partnership. Can you provide any data on what sort of discussions you are having or had? Could you have signed somebody if you are willing to give up more rights? How interested are third parties in the asset?
I would say there is a high level of interest in the asset and as you can imagine, it varies. We have a fairly high level of conviction in our strategy to retain strategic rights in the United States. And I think that I'm highly optimistic that we will be able to execute our strategy here but that’s all the guidance we're giving at this point.
Okay. Then maybe just one, final one. There was a recent publication I think from folks at Eagle Tech, who were looking for phosphoproteome in patients who receive Quizartinib coming up with a [indiscernible] signature they felt was a good way to further find the patient population and they also mentioned LM and 1-protein -- I'm actually not that familiar with -- as another way that you might be able to further refine a sensitive population. So, as part of the Phase 3 trials, are you going to be looking at markets beyond just FLT3-ITD that might help tease out a low sensitive population?
Yes Nick, that question gives me a great opportunity to let everyone know that we're also joined by Dr. Bob Armstrong, our VP of Preclinical Biology and I'm happy to announce that question to him.
Thanks Mike. And I think the very short answer to that question is yes. We are collecting a battery of samples that we will be able to retrospectively determine whether there is a better and more concise biomarker for responsivity to Quizartinib.
Thank you. And then at this time I would like to turn the call back to Marcy Graham for closing remarks.
Great. Thank you for joining us today on the call and for your interest in Ambit. We look forward to speaking with you again soon and meeting with many of you at upcoming conferences and roadshows throughout the country. Meanwhile, if you have further questions or need additional information, please feel free to contact our Investor Relations department at 858-334-2125. Thank you.
Thank you, ladies and gentleman. This concludes today’s conference. Thank you for participating. You may now disconnect.
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