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BIND Therapeutics, Inc. (NASDAQ:BIND)

Q4 2013 Results Earnings Conference Call

March 25, 2014 8:00 am ET

Executives

Paul Cox – Stern Investor Relations

Scott Minick – President, Chief Executive Officer

Andrew Hirsch – Chief Financial Officer & Chief Operating Officer

Analysts

Jason Kantor – Credit Suisse

Joel Sendek – Stifel Nicolaus

Michael G. King, Jr. – JMP Securities

Eric Schmidt – Cowen & Co.

Operator

Welcome to BIND Therapeutics fourth quarter and full year 2013 financial results conference call. At this time all participants are in a listen only mode. This call is being webcast live on the investors and media section of BIND’s website at ir.BINDTherapeutics.com. This call is property of BIND Therapeutics and recordings, reproductions, or transmissions of this call without the express written consent of BIND Therapeutics is strictly prohibited. As a reminder, today’s call is being recorded.

I would now like to introduce Paul Cox, of Stern Investor Relations.

Paul Cox

The press release with the company’s fourth quarter and full year 2013 financial results became available at 7:30 AM Eastern Time today. It can be found on the investors and media section of the company’s website at ir.BINDTherapeutics.com.

Before we begin, I will read BIND Therapeutics’ Safe Harbor regarding forward-looking statements. During today’s call, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about our future expectations, clinical development and regulatory timelines, the potential success of our product candidates, financial projects, 2014 milestones, and upcoming events and presentations.

Actual results may differ materially from those indicated by these statements as a result of various important factors including those discussed in the risk factors section in our quarterly report on Form 10Q filed with the Securities & Exchange Commission on November 5, 2013 and other reports filed with the SEC. Any forward-looking statements represent our views as of today only. We may update these statements in the future, but we disclaim any obligation to do so.

Joining me on the call today is Scott Minick, President and Chief Executive Officer of BIND Therapeutics who will discuss recent company highlights. Following Scott, Andrew Hirsch BIND’s Chief Operating Officer and Chief Financial Officer will provide a brief update on BIND’s 014 clinical development and will then review the company’s financial results for the fourth quarter and full year 2013 after which we will open the call for Q&A.

I would now like to turn the call over to Scott Minick.

Scott Minick

2013 was truly a transformative year for BIND as we continued to make significant progress towards our goal of establishing BIND Therapeutics as the leader in nanomedicine which we and others in the biopharmaceutical industry believe is an important strategic technology. We believe Accurins address a major challenge in treating cancer by leveraging nanotechnology to target therapeutic payloads to disease tissue while reducing exposure to healthy cells.

Just to review, key accomplishments for us in 2013 were first, we completed a successful Phase 1 clinical study with our lead proprietary product candidate BIND-014, a PSMA-targeted Accurin containing docetaxel which was well tolerated and demonstrated promising signs of clinical activity in late stage cancers. Next, we initiated two Phase 2 studies with BIND-014 as second line therapy in patients with non-small cell lung cancer and as first line chemotherapy in patients with metastatic castrate resistant prostate cancer. We also successfully scaled up GMP manufacturing to the multi-kilogram scale of lyophilized BIND-014 for future clinical development in commercial use.

We entered into significant Accurin collaborations with Amgen, Pfizer, and AstraZeneca. These collaborations provide BIND with the opportunity to work with newer classes of molecularly targeted agents with the potential to achieve a total of over $1 billion in upfront and future milestone payments including over $450 million in pre-commercial milestones plus royalties on future commercial sales. We also significantly strengthened our IP portfolio as we are granted 13 new patents and seven notices of allowances from the US Patent & Trademark Office covering BIND-014 and BIND’s medicinal nanoengineering platform including both composition matter and methods of use claims for therapeutic nanoparticle formulation in cancer cell targeting properties. Finally, we strengthened our financial position through our initial public offering in September, raising $76.1 million in gross proceeds to the company.

Based on these significant accomplishments during 2013, we believe we are strongly positioned to continue to build value both in our internal pipeline and collaboration programs. As we announced previously, we have also made important promotions and organizational changes including employing Andrew Hirsch as chief operating officer and Jeff Hrkach as chief technology officer, which we expect will strengthen our ability to execute on the major opportunities for BIND going forward.

We expect to continue building on our clinical development progress and strong financial foundation in 2014 which is a year with several important milestones including at the ACR 2014 Annual Meeting in two weeks we will present clinical results for a Phase 1 dose escalation study on a week based schedule, initial clinical results evaluating PSMA expression in our Phase 1 study, and pre-clinical results of our AstraZeneca collaboration. Andrew will summarize those results later on this call.

We remain on track to complete and report topline data for our two ongoing Phase 2 clinical studies of BIND-014 in metastatic castrate resistant prostate cancer and non-small cell lung cancer in the second half of this year. We plan to advance two additional product candidates from our proprietary Accurin pipeline towards clinical development and we expect our ongoing collaboration programs to meet certain milestones during the year. Based on our accomplishment we believe we are well positioned to further advance both our proprietary pipeline and collaboration programs in 2014.

We appreciate your continued support of BIND and look forward to updating you on our ongoing progress over the year ahead. I will now turn the call over to Andrew to provide more detail on the clinical development of BIND-014, progress on our collaboration programs, and to review the financial results for the fourth quarter and full year.

Andrew Hirsch

First, let me start with BIND-014, our lead Accurin currently in Phase 2 clinical development for non-small cell lung cancer and metastatic castrate resistant prostate cancer. As a reminder, BIND-014 is a prostate specific membrane antigen or PSMA-targeted Accurin that contains docetaxel, one of the most widely used cancer chemotherapy agents. PSMA is a cell surface protein expressed on prostate cancer cells and the abnormal blood vessels surrounding many types of non-prostate solid tumors including non-small cell lung cancer.

During 2013 we completed our Phase 1 clinical study with BIND-014 at two dosing schedules: once every three weeks or Q3 weekly; and once weekly for three weeks over a four week cycle or Q1 weekly. We established our maximum tolerated dose at the Q3 weekly schedule in late 2012 at 60 milligrams per meter squared and those data were presented at the ACR 2013 Meeting by Dr. Daniel Von Hoff.

During the third quarter of 2013, we completed the Q1 weekly arm of the Phase 1 study and reported that the maximum tolerated dose was established at 40 milligrams per meter squared, which on average, represents a 50% increase in dose intensity when compared to the Q3 weekly schedule. In the Q1 weekly portion of the trial, BIND-014 was dosed on days one, eight, and 15 over a 28 day cycle. Dose escalation occurred using the standard 3x3 design with doses ranging from 15 to 45 milligrams per meter squared.

We enrolled 28 patients with a variety of tumor types of which 27 were evaluable. Dose limiting toxicities of a grade three mucositis in one patient and febrile neutropenia in another patient occurred at 45 milligrams per meter squared and as a result maximum tolerated dose was established at 40 milligrams per meter squared. All observed toxicities were docetaxal related and several common docetaxal related toxicities were mild or absent including nail changes and sensory neuropathy. We also saw promising signs of antitumor activity. Confirmed partial responses were seen in two patients, one with breast cancer and the other with gastroesophageal cancer. Stable disease lasting greater than 12 weeks was observed in four patients.

We are excited by the potential of the increasing dose intensity on this schedule and the full data set on this portion of the Phase 1 study will be presented in a poster by Dr. Monica Mita at the upcoming ACR Annual Meeting in San Diego. In the Phase 1 study we also evaluated the cellular distribution and heterogeneity of PSMA expression in solid tumors in this patient population for use as a potential biomarker to potentially select patients that may benefit from PSMA-targeted therapy. The results of the PSMA evaluation will also be presented at the upcoming ACR meeting.

In the third quarter of 2013 we initiated Phase 2 trials of BIND-014 in chemotherapy-naïve metastatic castrate resistant prostate cancer in second line non-small cell lung cancer at the 60 milligram per meter squared dose schedule. Both of these trials are 40 patient open label stable arm trials designed to get further safety data and test for an efficacy signal in these patient populations. In the prostate cancer trial, which I’m pleased to report has completed enrollment ahead of schedule, the primary endpoint is radiographic progression free survival.

In the lung cancer trial, the primary endpoint is objective response rate and as of Friday, March 21st we had enrolled over 80% of the patients in this trial on the Q3 weekly schedule. Once enrollment is complete on the Q3 weekly schedule in the lung trial, we plan to begin enrollment of an additional 40 patients on the Q1 weekly schedule. We expect to complete these studies in the second half of this year and look forward to reporting topline results at that time.

We also continue to make excellent progress with our collaborators on the joint work plan. Additionally, in December, we announced that we extended the option period for our Amgen collaboration agreement to expire on July 7, 2014 rather than the original date of January 7, 2014. This was done to allow us to conduct additional pre-clinical experiments to achieve the goal set out for the collaboration.

Earlier this month, we announced that we and AstraZeneca will be presenting a poster describing the pre-clinical results of our collaboration developing an Accurin based on their assertive, a potent selective inhibitor of the Aurora B kinase. Aurora kinase play a critical role in cell division and are reports to be abnormally expressed in many human cancers. Accordingly, they’re viewed as important targets for cancer therapy and several small molecule aurora kinase inhibitors have entered clinical development. Progress to-date has been noted by on target toxicities such as bone marrow suppression and associated neutropenia as well as various off target toxicities.

The goal of our collaboration with AstraZeneca is to develop Accurins with the active metabolite with their assertive to optimize critical properties for an improved therapeutic index and dosing schedule. In pre-clinical models we were able to demonstrate that the long circulation times, controlled release, and tissue targeting mechanisms of our Accurins were able to optimize those critical properties including an improved therapeutic index with increased drug distribution to the tumor site leading to superior efficacy at half the dose intensity when compared to the current drug.

Importantly, one of Accurins was shown pre-clinically to have minimal impact on bone marrow pathology which has historically been associated with a class effect with inhibition of aurora kinases and has limited the clinical use utility of this class of therapies. The detailed results will be presented in a poster session at the upcoming ACR Meeting. We are excited by the progress we have made with both BIND-014 and our collaboration programs and we look forward to updating you later this year on both these programs and our next proprietary pipeline candidates as we continue to evaluate combinations of targeting [inaudible] and therapeutic payloads that have the potential to improve cancer treatment.

Now, let me turn to our financial results. Earlier this morning we issued a press release detailing our financial results for the fourth quarter and full year of 2013. I’ll review the financial highlights and then speak to our cash balance and our financial guidance. For the fourth quarter of 2013 we reported a net loss of approximately $8.1 million compared to a net loss of approximately $5.1 million for the same quarter in 2012. The year-over-year increase in net loss is due to the increase in clinical trial activity and further development and scale out of our manufacturing process for BIND-014 partially offset by increased revenue from our collaborations with Amgen, Pfizer, and AstraZeneca.

Total revenue for the fourth quarter of 2013 was approximately $2.1 million comprised of $1.6 million of collaboration revenue and $430,000 of grant revenue. That compares to total revenue in the same quarter of 2012 of approximately $224,000 of collaboration revenue and $323,000 from government grants. Research and development expenses in the fourth quarter were $7.4 million, a 114% increase over the prior year. This increase was driven by the initiation of our two Phase 2 trials for BIND-014 as well as our activities under our Accurin collaborations. I will remind you that these collaboration expenses are wholly paid for by our collaborators and included in revenue.

G&A expense for the fourth quarter was $2.7 million representing a 33% increase over the same quarter of 2012. This increase was driven by increased overhead expenses related to operating as a public company. Now, turning to the full year results we reported a net loss of approximately $27.7 million for the year ended December 31, 2013. This compares to a net loss of approximately $19.2 million in 2012. Total revenue for the full year of 2013 was approximately $10.9 million comprised of $10 million of collaboration revenue and $946,000 of grant revenue. That compares to total revenue in 2012 of approximately $1 million.

Research and development expenses in 2013 were $24.4 million an 87% increase over 2012. This increase was primarily due to the initiation of the Phase 2 trials for BIND-014 as well as activities under our collaboration agreements which did not exist in 2012. G&A expense for 2013 was $13.4 million, a 103% increase over 2012 largely driven by $4.3 million of non-cash stock compensation expense.

We ended the year with $77.4 million in cash, cash equivalents, and marketable securities which takes into account the closing of a portion of the underwriter’s over allotment option no October 23rd generating additional net IPO proceeds of $5.2 million. Based on our current operating plans, we expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operations through at least mid 2015 as we have previously guided.

With that, we can open up the call for questions.

Question-and-Answer Session

Operator

(Operator instructions) Your first question comes from Jason Kantor with Credit Suisse.

Jason Kantor – Credit Suisse

I just wanted a little bit of clarification on the expansion of the Phase 2 trials to include the new dosing arm. Is that 40 patients in each lung and prostate, or is that 40 in just one of them or spread across the two? Then, when you talk about having data in the second half would that be from both studies at both dose regimens or if you could just clarify that?

Andrew Hirsch

We’re only going to be expanding the weekly dosing schedule in the lung trial not in the prostate trial. In terms of the second half of the year, that is our plan to have data from all of them.

Jason Kantor – Credit Suisse

Now, is there some reason, from the data that you have from the Phase 1 portion, that would tell you that this would also be a good strategy in prostate cancer or do you just want to test it first in lung?

Andrew Hirsch

I think the prostate cancer positions aren’t, I would say, interested in testing the weekly schedule. I think they tested a weekly schedule with docetaxel earlier and didn’t sort of appreciate the results and I think from a convenience perspective aren’t so interested in that schedule.

Jason Kantor – Credit Suisse

Then how should we think about gaging the results when they come out in terms of what would be considered good in a single arm study for either prostate or lung and what’s your criteria for moving this forward in the various indications?

Andrew Hirsch

From a sort of benchmark perspective the data on docetaxel in lung cancer is a sort of 5% to 9% response rate drug with a three month PFS. That’s across a number of different studies. In prostate cancer the drug works a little bit better it’s about a 45% to 48% response rate with a six to eight month PFS. We haven’t said specifically this is the hurdle, what we’ve said and will continue to say is that it needs to be a clinically meaningful improvement over docetaxel and that can work both on the efficacy as well as the tolerability side.

I think as you know, for example, in prostate cancer about 50% of the patients who are eligible and can benefit from docetaxel use don’t get docetaxel simply because of age or performance status because they can’t tolerate the drug. We’re going to look at the overall total profile once we see the results of the trial and evaluate that with the investigators and our experts and make a decision then. But, we haven’t sort of said and won’t say, this is the right line.

Operator

Your next question comes from Joel Sendek with Stifel Nicolaus.

Joel Sendek – Stifel Nicolaus

It seems to me on the basis of the success you’ve had in the enrollment for the prostate cancer study that that will come out first in the second half of ’14? Since the second half of ’14 is almost three months away, is it likely to be earlier in the second half or later, can you help us on that?

Andrew Hirsch

I don’t have any more specifics. I think that the issue is that as a PFS endpoint it’s a bit longer of an endpoint than the lung trial because I think, as I mentioned, docetaxel has a 6% to 8% PFS and so that endpoint is a bit longer than - month, sorry, bit longer than the lung endpoint so they’ll probably report out around the same time but we haven’t been specific. Still, in the second half of the year, but given we’ve completed enrollment add six to eight months and you can get a sense for when that may be.

Joel Sendek – Stifel Nicolaus

Then on the R&D spend, is the fourth quarter number generally annualizable into 2014?

Andrew Hirsch

Yes, I think what I will say is our burn for the fourth quarter, kind of net burn, was about $6.6 million on the net underlying burn and I think that’s a decent run rate to use. We expect to potentially start additional trials with BIND-014, that may increase that and depending on collaboration work plans that may change but for now that’s probably the best number to use.

Operator

Your next question comes from Mike King with JMP Securities.

Michael G. King, Jr. – JMP Securities

I was curious about how scrupulously you guys are going to be looking at the side effect profile and particularly thinking about neutropenia as well as neuropathy in both lung and in prostate?

Andrew Hirsch

We’re actually looking quite closely. I think, in the Phase 1 trial at the 60 milligrams per meter squared we only saw 53% incidence of grade three and four neutropenia and that was all less than five days, such that we’re actually not even checking mid cycle counts in the Phase 2 trial. We’re looking at it pretty closely, that’s obviously the known toxicity of docetaxel as well as neuropathy which we haven’t seen.

Scott Minick

To add to that, Andrew mentioned earlier on the order of 50% of eligible prostate cancer patients never receive docetaxel treatment the tox you didn’t mention that seems to be largely responsible for that is significant fatigue so that’s another one that we’re looking at closely and hope to see promising results.

Michael G. King, Jr. – JMP Securities

Is there anything changed about the protocols or sites that would tend to introduce any kind of benefit based on provider care versus true reduction in side effects due to improved therapeutic index for 014?

Scott Minick

We aren’t in a position to talk about the Phase 2 results yet to really be able to answer your question. These are experienced trial sites but there are multiple sites for both the lung and the prostate study so in each of those cases you’d expect to see kind of a representative range of care. These are not handpicked to just be high end places.

But in the Phase 1, which was done in Phase 1 centers with late stage and metastatic patients, those are patients that have had a number of prior therapies and are usually in pretty bad shape, even there those data are available now and you’ll see the Q weekly data at ACR might - you can see I think, a much more benign profile and it looks like we have very good tolerability.

Michael G. King, Jr. – JMP Securities

A quick question on Barasertib, are you guys involved in any way at all in terms of shaping the development of the molecule or is that going to all be handed over? I’m talking about clinical development, is that all going to be handed over to AstraZeneca?

Scott Minick

In terms of clinical development, yes AstraZeneca will take the lead. We will remain very involved though in terms of the development of the Accurin form of this product so it really is a true collaboration from that perspective.

Michael G. King, Jr. – JMP Securities

I guess the question is will we see data regarding what Andrew mentioned about the improved therapeutic index in any kind of pre-clinical sense that you guys will be able to publicize? I’d be very curious about whether you got increased inhibition of aurora B or any of the other biomarkers related to blockade of aurora kinases.

Scott Minick

We can’t preannounce the data that we will show at ACR, but I invite you to come to that poster and I think you’ll see your questions answered.

Operator

Your next question comes from Eric Schmidt with Cowen & Co.

Eric Schmidt – Cowen & Co.

On the Phase 2 CRPC study, can you give us a final enrollment number?

Andrew Hirsch

I believe it was 40 patients which was what we targeted.

Eric Schmidt – Cowen & Co.

What kind of biomarker populations might you be looking at in that data set when you release the results I the second half?

Andrew Hirsch

We’re looking at tumor mutational status as one. The other one we’re looking at obviously is PSMA expression by immunohistochemistry and then as well as micro vessel density.

Eric Schmidt – Cowen & Co.

I guess the go or no go decision on future studies will be made more on efficacy than anything else? Historically, at least, you suggested that you’d only move forward if you had a more efficacious version of [tasistaric] is that still the case?

Scott Minick

That’s clearly the goal, is to have superiority versus [tasistaric] and since we haven’t really set specific guidance in terms of what parameters we’re going to look at I’d rather hold the answer to that question until we release those data.

Eric Schmidt – Cowen & Co.

On the AZD 1152 compound, what’s [inaudible] to starting a Phase 1 or what might be a reasonable timeline assumption to getting the drug into a clinic?

Scott Minick

At this point we will go into the traditional pre IMD pharm/tox studies. I can’t speak for AstraZeneca’s specific timeline on that but if you look at the industry norm for those kinds of studies you would expect that to be typically about one year.

Eric Schmidt – Cowen & Co.

On your own internal candidates, when might we hear about a next identified product opportunity?

Andrew Hirsch

Sometime probably in the mid to back half of the year.

Operator

Your next question comes from Mike King with JMP Securities.

Michael G. King, Jr. – JMP Securities

I just wanted to follow up on Eric’s question and ask a little more pointedly, in the S1 you guys talked about an Accurin version of irinotecan. I wonder if that’s still contemplated or are we thinking about shifting in another direction?

Andrew Hirsch

I’m not sure we did talk about an Accurin version of irinotecan. I think we had worked in the past with vinca alkaloid as well as with bortezomib but to my knowledge we haven’t worked with irinotecan.

Operator

I’m showing no further questions. At this time I will now turn the call back over to Scott Minick for closing remarks.

Scott Minick

Thank you everyone for joining us this morning and we look forward to updating you further on our progress throughout the year.

Operator

Thank you ladies and gentlemen. This concludes today’s presentation. Thank you once again for your participation. You may now disconnect.

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