Synta Pharmaceuticals (SNTA) Q1 2014 Results - Earnings Call Transcript

Synta Pharmaceuticals (SNTA) Q1 2014 Earnings Call May 8, 2014 10:00 AM ET

Executives

Steven Bernitz - Senior Vice President of Corporate Development

Keith R. Gollust - Executive Chairman of The Board, Chairman of Executive Committee, Member of Audit Committee and Member of Compensation Committee

Vojo Vukovic - Chief Medical Officer and Senior Vice President

Keith S. Ehrlich - Chief Financial Officer, Principal Accounting Officer and Vice President of Administration & Finance

Iman El-Hariry - Vice President of Clinical Research

Ilker Yalcin - Vice President of Biostatistics & Data Management

Analysts

Thomas Wei - Jefferies LLC, Research Division

Michael G. King - JMP Securities LLC, Research Division

Daniel Brims - Brean Capital LLC, Research Division

Graig C. Suvannavejh - MLV & Co LLC, Research Division

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

Operator

Good day, and welcome to the Synta Pharmaceuticals First Quarter 2014 Earnings Conference Call. Today's conference call is being recorded and webcast.

At this time, for opening remarks, I will turn the call over to Steve Bernitz, Senior Vice President of Corporate Development at Synta Pharmaceuticals. Please go ahead, sir.

Steven Bernitz

Good morning, and thank you, all, for taking the time to join us today. With me are Keith Gollust, Chairman of the Board of Directors and Executive Committee; Vojo Vukovic, Chief Medical Officer; and Keith Ehrlich, Chief Financial Officer.

This morning, we issued a press release that reported results for the first quarter 2014. We also issued a press release announcing the final results of the GALAXY-1 trial and have prepared a slide set summarizing these results. Both releases and the slide set can be found on our website.

Before we begin, I would like to point out that we will be making forward-looking statements based on our current intent, belief and expectations, which are subject to certain risks and uncertainties. Additional detail can be found in related SEC filings also available through our website at www.syntapharma.com.

I will now turn the call over to Keith Gollust.

Keith R. Gollust

Thank you, Steve, and thank you, all, for joining us today. All of you who follow development stage biotech companies know that it's a long and financially challenging road that must be followed before success can be obtained. Our experience at Synta has been consistent with that. However, with today's announcement of GALAXY-1 final results, we are one important step closer to attaining that success.

The results we announced today demonstrate a significant benefit in a randomized population of chemosensitive patients with previously treated non-small cell lung adenocarcinoma. This is a very challenging cancer to treat and the survival benefit observed in this final analysis of the data is very encouraging. I want to point out that this benefit in a subpopulation of 177 patients out of 253, while a prespecified analysis was not a prespecified endpoint. However, our review of early GALAXY-1 data in 2012 provided such a strong signal that we began planning a Phase III trial at that time with overall survival in chemosensitive patients as the primary endpoint.

As the data matured, the signal was confirmed and our decision to start the Phase III in 2013 was validated. In light of these results, the operational experience gained from GALAXY-1, the incorporation of regulatory feedback into our Phase III protocol, the increase in study size announced in March and the positive feedback we have gotten from key opinion leaders, we believe that the Phase III GALAXY-2 trial has excellent prospects for success.

Given the financial commitment required to conduct a large Phase III trial, we have undertaken a comprehensive review of our budget for 2014 and beyond to make certain that our cash burn is manageable and is consistent with our available resources. Our philosophy is to treat every dollar like a best friend that we don't want to say goodbye to unless absolutely necessary. An example of this philosophy in action is the decision, which was announced this morning, to close the ENCHANT-1 study. The promising data from that study provided the basis for our inclusion in the I-SPY 2 study, which will explore ganetespib in combination with standard-of-care therapy in a large randomized proof-of-concept trial.

Transition to the I-SPY 2 TRIAL renders continued investment in ENCHANT unnecessary. Controlling the burn rate is only 1/2 of balancing the budget. The other half is attracting the capital we need. So far this year, we have added over $32 million through the issuance of equity. Our plan for the balance of 2014 is to combine an opportunistic use of the ATM that we have put in place with other forms of financing in order to end the year with the cash resources necessary to take us through the final analysis of GALAXY-2 in the first half of 2016.

In addition, it is our intention to broaden our partnership discussions under the leadership of a new CEO, which if successful, would further strengthen our balance sheet.

I'd now like to turn the call over to our Chief Medical Officer, Vojo Vukovic, who will discuss the results of the final analysis of GALAXY-1.

Vojo Vukovic

Thank you, Keith, and good morning. I'm pleased to present today a summary of final analysis results from GALAXY-1, a large Phase IIb international randomized study of ganetespib and docetaxel versus docetaxel alone.

We locked the database last week, and the data is still hot off the press. Today, we will present a top line summary of key efficacy and safety data. A more comprehensive set of results will be published later this year.

The top line summary is posted temporarily at the company website as a slide set at www.syntapharma.com.

I will start here with Slide 3. Ganetespib is a next-generation Hsp90 inhibitor that has shown synergy with taxanes and the ability to inhibit angiogenesis and metastasis, both preclinically and clinically.

Ganetespib has shown single-agent activity in several types of tumors, including non-small cell lung cancer and breast cancer and has been well-tolerated, both as monotherapy and in combinations.

The next slide, Slide #4, is discussing the concept of chemo-sensitivity in non-small cell lung cancer. Patients who responded to first-line treatment are more likely to respond to second-line treatment and generally have a better prognosis than refractory patients who fail first-time treatment or relapse quickly following first-line treatment.

To ensure balance in clinical trials, patients are often stratified by chemo-sensitivity. In GALAXY-1, for operational reasons, we have used time since diagnosis of advanced disease as a surrogate for chemo-sensitivity. We could have used another surrogate, such as tumor response in first-line, but we decided on time since diagnosis because operationally, it's easier to track and verify.

That brings us to Slide 5, which lists the key populations for GALAXY-1. Elevated LDH and Mutant KRAS populations have a strong sensitive rationale, supported by preclinical and/or clinical data. The chemosensitive population showed the strongest signal of activity, and is supported by preclinical data showing further sensitization of cancer cells that are chemosensitive via their own regulation of key proteins in the mitochondrial apoptosis pathway.

The GALAXY-1 study design is shown on Slide #6. Patients with advanced non-small cell lung cancer of adenocarcinoma histology and 1 prior systemic therapy were randomized 1:1 to receive the docetaxel alone or docetaxel in combination with ganetespib. Patients were stratified by 4 prognostic factors: ECOG performance status, time since diagnosis of advanced disease, baseline serum LDH, and smoking status.

Co-primary endpoints of the study were PFS in elevated LDH and PFS in mutated KRAS patients. Key secondary endpoints were PFS and OS in adenocarcinoma patients.

Slide 7 shows baseline characteristics of the adenocarcinoma population. As you can see, the 2 study arms were well-balanced with respect to the key demographic and prognostic factors listed here, including age, gender, ECOG status, smoking status, LDH and others. A good balance of prognostic effect is as critically important for a valid trial. One thing to note is that approximately 40% of patients come from Western Europe or the U.S.A. and Canada.

Slide 8 shows that the chemosensitive patient population is also well-balanced. This is a large group of patients totaling 177 patients or approximately 70% of the total adenocarcinoma population. Thus, we see numerical differences in some parameters. We have utilized a standard approach to adjustments for imbalances, the Cox proportional hazards model. We'll talk a bit more about adjustments when we discuss accidents to resolve in the next couple of slides.

As in the adenocarcinoma population, approximately 40% of chemosensitive patients are from Western Europe or North America.

Slide 9 shows 1 of the 2 efficacy summary tables. Here you see duration and comparisons of median OS and PFS for the 4 key populations, elevated LDH, Mutant KRAS, chemosensitive patients and adenocarcinoma patients.

Data maturity ranges from 75% to 83%. So we're looking at the mature robust data set. Differences in medium PFS and OS are most substantial in the adenocarcinoma and chemosensitive populations and are likely clinically meaningful.

For example, a 2-month increase in medium PFS, along with a 3.6 months increase in median OS, in the chemosensitive population is clearly clinically meaningful in second-line advanced non-small cell lung cancer.

In the adenocarcinoma population, both medium PFS and OS were improved in combination patients, but improvements were smaller, 1.3 months' increase in PFS, 1.8 months' increase in median OS.

Slide 10 shows OS and PFS hazard ratios for key patient populations, elevated LDH, Mutant KRAS, chemosensitive and adenocarcinoma. As in the previous table, the strongest signals of efficacy were seen in the chemosensitive and adenocarcinoma populations.

Unadjusted OS hazard ratios were 0.71 and 0.87 for chemosensitive and adenocarcinoma patients, respectively. Adjusted OS hazard ratios were 0.69 and 0.84. PFS hazard ratios were similar, 0.75 and 0.85 unadjusted, and 0.74 and 0.82 after adjustment.

To summarize, these results confirm results from proceeding to interim analysis, indicating the strongest signal of efficacy in the chemosensitive population.

On Slide 11, you can see the capital [indiscernible] for overall survival in the chemosensitive population. While some patients are still in follow-up, the data maturity is 75%. The OS curves are nicely separated, and the hazard ratio, 0.71 or 0.69 after adjustment, along with a P-value of 0.019, is clearly very encouraging.

Slide 12 shows the capital [indiscernible] for progression-free survival for the chemosensitive population. The unadjusted hazard ratio is 0.75 or 0.74 after adjustments, consistent with the OS results and confirms that there's an efficacy signal in chemosensitive patients.

Slide 13 shows the forest plot of subgroup analysis for the chemosensitive population. The first visual impression is that virtually all subgroups benefit from combination treatment. Rather than going through the entire set on this slide, I would like to highlight 2 important points: First, at the top of the first block, you can see OS results in patients with and without KRAS and EGRF mutations. While the patient numbers are small, this data suggests the combination works in chemosensitive patients irrespective of KRAS and EGRF mutation status.

Secondly, at the bottom of the slide, you can see OS results broken down by region. Consistent with previous analysis, the OS results in Western patients are very encouraging. Slide 14 shows the table with key adverse events. In summary, the safety profile in GALAXY-1 is consistent with early observations and reports. The most frequent adverse events are in gastrointestinal tract and include diarrhea, nausea, vomiting and stomach pain. You see a slight increase in the number of AEs or adverse events in patients treated with the combination. In most cases, those adverse events are mild to moderate and can be effectively managed or prevented with standard supportive care.

At the bottom of the table, we have listed medically significant adverse events for this patient population, which include mucositis, neutropenia and hemoptysis, pulmonary embolism and febrile neutropenia. As with general adverse events, we see a slightly higher frequency of adverse events in patients treated with the combination.

You should also keep in mind that combination patients are in treatment approximately 50% longer than control patients. Considering the higher drug exposure and treatment duration, some increase in adverse events is expected.

Finally, consistent with prior reports, visual impairment frequency is very low. Only one case of mild and transient visual impairment was reported thus far.

Moving on to the next slide, Slide #15. These are the conclusions of the GALAXY-1 study. The combination of ganetespib and docetaxel improved overall survival and progression-free survival in the chemosensitive patient population. We did not see evidence of activity in KRAS mutation patients. There was a positive trend in the overall survival in patients with elevated LDH.

Overall, ganetespib in combination with docetaxel was well-tolerated. And finally, final results from GALAXY-1 validates the selection of chemosensitive patient population for the GALAXY -- for the Phase III GALAXY-2 study.

Going forward, our emphasis is on the execution of Phase III GALAXY-2 trial, which is shown on Slide #16. The GALAXY-2 study incorporates all lessons learned in GALAXY-1. Final results from GALAXY-1 confirm the key elements of GALAXY-2 designs, such as the choice of patient population, the choice of optimal certification factors and the choice of primary endpoint.

GALAXY-2 is active and enrolling, and we remain on track regarding the interim analysis in the second half of 2015 and final analysis in the first half of 2016.

This concludes the top line summary presentation of the final GALAXY-1 results. I will now turn the call over to Keith Ehrlich for financials.

Keith S. Ehrlich

Thank you, Vojo, and good morning, everyone. There were no revenues recognized in the first quarters of 2014 and 2013. Research and development expenses were $17.6 million for the first quarter of 2014 compared to $16.4 million for the same period in 2013.

General and administrative expenses were $5.3 million for the first quarter of 2014 compared to $3.9 million for the same period in 2013, the difference being substantially accounted for by the separation agreement with our former CEO.

The company reported a net loss of $23.6 million or $0.28 per basic and diluted share in the first quarter of 2014 compared to a net loss of $20.7 million or $0.30 per basic and diluted share for the same period in 2013.

As of March 31, 2014, the company had $78.8 million in cash, cash equivalents and marketable securities compared to $91.5 million in cash, cash equivalents and marketable securities as of December 31, 2013.

During March and April 2014, the company sold approximately 6.6 million shares of common stock under its at-the-market sales agreement for $27.3 million in net proceeds. In April 2014, the company sold approximately 1.25 million shares of its common stock for $5 million in net proceeds and registered a direct offering to an affiliate of a director who is our largest shareholder.

In May 2014, the company entered into a new at-the-market issuance sales agreement with MLV, under which the company, at its option, may issue and share -- sell shares of common stock having an aggregate offering price of up to $40 million from time to time through MLV as its sales agent. The shares would be sold pursuant to the company's effective shelf registration statement on Form S-3.

Based on current operating levels, the company expects its cash resources of approximately $78.8 million at March 31, 2014, plus the $23 million in net proceeds from common stock sales during April 2014, will be sufficient to fund operations at least into the first half of 2015. This estimate assumes no additional funding from new partnership agreements or equity financing events, and that the timing and nature of certain activities contemplated for the remainder of 2014 and 2015 will be conducted subject to the availability of sufficient financial resources.

I will now turn the call back over to Steve.

Steven Bernitz

Thank you, Keith. This concludes our prepared remarks. Operator, we will now open the call to questions.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Thomas Wei with Jefferies & Company.

Thomas Wei - Jefferies LLC, Research Division

Just a couple of follow-ups on some cuts of the data that you've shown us before in the past. First, just on -- if you took out the Eastern European countries that you spoke about at World Lung, what would the final numbers look like on over analysis -- on the overall survival there? And then also, I know it would be small patient numbers but if you looked at just the not-chemosensitive subgroups, so those with the shorter than 6-month window from diagnosis, can you share with us what the median overall survival was in each arm of that subgroup?

Vojo Vukovic

Okay. I'll take that question. Hi, Thomas, this is Vojo. The data represented today is the data that we have currently in hand. As we mentioned, the data base lock occurred last week, and we will complete additional analysis in the coming days. So we can't really comment on your question about the exact hazard ratios in Western patients versus Eastern patients. Also, more detailed analysis of the other subgroups are not completed yet. The one thing that I know and I can share with you is the adjusted hazard ratio for survival in the less than 6 months population is now exactly one.

Thomas Wei - Jefferies LLC, Research Division

That's very helpful. Maybe just a couple more then. If you had completed the HER2-positive cohort in ENCHANT-1, how much would that have cost? And then just when you made the comment about 50% longer treatment duration in the ganetespib arm in GALAXY-1, did you mean 50% higher docetaxel intensity or is that really the same docetaxel intensity in both arms with some extra ganetespib in the treatment arm?

Keith R. Gollust

Thomas, this is Keith, Keith Gollust. I'll answer the first question, and Vojo will answer your second question. Our budget for this year for ENCHANT study was $2.4 million. Some of that has been incurred, but the majority of that amount will be eliminated from our budget this year. Vojo?

Vojo Vukovic

Okay. So when we refer to 50% longer duration of treatment. What we meant by that is the median number of cycles for the control arm is 4 and the median number of docetaxel-containing cycles for the combination is 6. In addition to that, a proportion of the combination patients has also received ganetespib monotherapy maintenance.

Operator

And our next question comes from line of Mike King with JMP Securities.

Michael G. King - JMP Securities LLC, Research Division

The first question I wanted to ask would be for Vojo. If you could remind us what powering assumptions are again for GALAXY-2, and if you feel that given the data -- the final data of GALAXY-1, with hazard ratios in the final stats on survival and PFS, that you've got enough headroom for the inevitable statistical deterioration that you typically get when you go to larger study sizes?

Vojo Vukovic

Okay. So I'm going to try to answer the question the best we can. The powering assumptions for GALAXY-2 assume approximately 87% power to detect the hazard ratio of 0.75. That means that we are considering recurrent final GALAXY-1 data, which points to an approximate hazard ratio of 0.7 range. We feel that we have some margin there. In addition to that, I'll just remind you, Mike, that the power of 87% affects hazard ratio of 0.75, also means that we have a considerable amount of power to affect the higher hazard ratio. And then finally, as you will probably remember from our last call, the total number of patients for GALAXY-2 is estimated to be approximately 850, thus, giving us a minimum of 700 patients that meet the EGFR [indiscernible] double-negativity criteria. And that's a minimum. We actually expect to see more than 700 patients. And the more patients we have over 700, the higher the power is of the study. So these are the factors that give us some good comfort level about the powering assumptions for GALAXY-2.

Michael G. King - JMP Securities LLC, Research Division

And remind me, Vojo, that the stipulation of exclusion of Eastern European centers was made before GALAXY-2 started?

Vojo Vukovic

It was made actually after the GALAXY-2 started. So we do have a small proportion of patients. We currently estimate this to be less than 10% of the overall patient number at the end of the study from Eastern Europe.

Michael G. King - JMP Securities LLC, Research Division

Okay. And -- but those will be part of the database analysis, the final database analysis?

Vojo Vukovic

That's right. And when I say Eastern Europe, I just want to clarify, it's really Russia and Ukraine. Because in GALAXY-1, it was in Russia and Ukraine where we had detected some differences between those patient populations and other patients in the study.

Michael G. King - JMP Securities LLC, Research Division

Right. And then just on the interim analysis at the end of '15, that will be after what proportion of events?

Vojo Vukovic

So the time -- let me just remind the timing for the 2 interim analyses, they're projected for the second half of 2015, not necessarily the end of 2015. Actually, the first one will happen closer to midyear, second half but closer to midyear, and the other will happen later in the second half. I don't believe that we have previously guided on the exact number of events that are needed. We have actually -- what I can say here is that we have discussed this in detail with the regulatory agencies, including the FDA. And they've actually exceeded what the FDA requires as a minimum number of events. Typically, the FDA requires 50% [indiscernible]. We have exceeded that number. So the power for this first interim analysis will be quite good, more than what the FDA number requires. And consequently, the power for the second interim will be even higher than that.

Michael G. King - JMP Securities LLC, Research Division

Okay. And then just further on that, the filing -- an NDA filing would be done when -- or is that -- will that depend upon the outcome of these interim analyses or would you prefer to file on the final analysis?

Vojo Vukovic

Well, the interim analysis had been decided and agreed upon with the FDA to be efficacy interim analysis. They're fully powered. And should they exceed the prespecified threshold of activity, we can immediately stop the study based on the DMC recommendation, consult with the agency and file immediately. And we will get ready to file immediately. You can trust me.

Michael G. King - JMP Securities LLC, Research Division

Right. All right. And then one -- let me switch quickly to breast cancer and then I'll get off. The -- obviously, there's a -- it's commendable that you're going to be saving money by discontinuing ENCHANT to focus on I-SPY. However, the market opportunity and potential for what you might have achieved in ENCHANT is pretty different than that of I-SPY. So I just wonder if you might comment about kind of the strategic implications of that pivot in addition to the financial savings?

Iman El-Hariry

Hi, Mike. This is Iman. I think it's -- we're already all very excited about what we have achieved so far in the ENCHANT trial. And besides that, we have achieved the objective of this study, and it was an enabler to start the I-SPY 2. I think this is our immediate strategic focus in breast cancer. Clearly, there are very interested investigators who are keen to explore other avenues for ganetespib in different investigative initiatives and trials. So we will continue to keep open-minded, but certainly, I totally agree with you that the evidence that we have generated in the ENCHANT trial so far is an opportunity for ganetespib for subsequent clinical development.

Keith R. Gollust

Yes, I was going to add to that, Mike, that as a practical matter, we think that the greatest benefit of the use of ganetespib is in combination therapy. And ENCHANT was a monotherapy study. So while the market opportunity that you're referring to is still there, I think at some point in the future, we should be able to explore that through a combination study.

Vojo Vukovic

And maybe just another addition to that regarding market opportunity, the I-SPY 2 is set in the neo-adjuvant treatment setting, which is a very substantial market segment in breast cancer.

Michael G. King - JMP Securities LLC, Research Division

Yes, I know, I realize that, and pathologically a complete response could be a quick route to market, but it is relatively small compared to metastatic disease. That's all I'm saying.

Operator

The next question comes from the line of Daniel Brims with Brean Capital.

Daniel Brims - Brean Capital LLC, Research Division

So winding down ENCHANT-1, wouldn't you see that being completed? And when would we probably be seeing the data, the complete data from that study?

Iman El-Hariry

Yes, we are in the process of clearly winding down, and we would expect to present the final data towards end of this year.

Daniel Brims - Brean Capital LLC, Research Division

Okay. And will the -- will GALAXY-1 be at ASCO this year, or is it going to be at a later meeting?

Vojo Vukovic

GALAXY-1 data, the final data will not be presented at ASCO. Our plan is to publish this data very quickly in a scientific journal and then we'll decide at a later point about presentation at scientific meetings. Perhaps, later this year.

Operator

And our next question comes from the line of Graig Suvannavejh with MLV.

Graig C. Suvannavejh - MLV & Co LLC, Research Division

I just wanted to get a sense just on the current CEO search and any comments you could make as an update on how that process goes?

Keith R. Gollust

So what I can say about that is that the search is proceeding as planned. And as soon as we have a new CEO, there will be an announcement. Other than that, we're not going to attempt to characterize actual discussions.

Graig C. Suvannavejh - MLV & Co LLC, Research Division

And then if I could ask another question, just I think many of us left the AACR Conference very enthusiastic about the HDC platform that you have, and I was wondering if you could give us -- if there were any updates with respect to the progress you're making with your HDCs?

Vojo Vukovic

The HDC platform is certainly scientifically very interesting and we continue to maintain the strong interest, and we have plans for developing HDC. But as Keith has mentioned in his opening remarks, we are focusing a lot of effort, a lot of attention within the company making sure that the GALAXY -- we do everything we can to lead Galaxy-2 to success.

Graig C. Suvannavejh - MLV & Co LLC, Research Division

Great. And my last question, I realize that you have kind of -- you feel comfortable with the timing around the interim analyses in GALAXY-2, but is there any comments about the speed of enrollment and whether there are anything that could potentially make that enrollment go faster or slower?

Vojo Vukovic

We have traditionally not given specific guidance in terms of operational activities. I think all I can say right now is that as we confirmed our guidance regarding the data readouts -- but what that also means is that we remain on track operationally to recruit the trial. We want to make sure that we, first and foremost, do a really good job in working with the right size and selecting the right patient so that we really maximize the probability of technical success for the study. That's our #1 priority. And I think we're very well on track on that. We're also on track with patient recruitment, doing very well on that. And so that's really all I can say about operational activities right now.

Operator

And our next question comes from the line of George Zavoico with H.C. Wainwright.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

I have a question about the, perhaps the -- about the financing. Taken together, you have about a little over $100 million at the end of the quarter. And your R&D expense presumably reflects mostly GALAXY -- GALAXY-2 and you projected to somewhere between a year to 1.25 years to go from now. What portion of that is actually the GALAXY-2 budget?

Keith R. Gollust

Well, the -- it's hard to break it down because the GALAXY-2 budget is extended over a period of years. As a rough estimate, the total cost of GALAXY-1 is in the neighborhood of $100,000 per patient. And -- but that expenditure is spread out over a period of almost 3 years. So as we project our cash needs between now and final analysis of GALAXY-2, which would be expected to occur in the second -- in the first half of 2016, you can take a look at our current burn rate and project it out over that period of time to get a pretty rough idea of how the numbers will work out.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

Okay. And you didn't talk at all in this presentation about the rationale for excluding the ALK patients. Could you go over the data you have in support of that decision? Vojo, please?

Vojo Vukovic

Sure. The rationale to exclude ALK and EGFR mutation-positive patients has really not so much to do with the activity of the drug or the combination, I should say. Because we believe that the activity of the combination is comparable in this patient population relative to other patients. The reason why we decided to exclude these patients has really occurred after discussion with regulatory agencies who, for one, insisted that such patients are identified and have received standard-of-care treatments prior to entering our study, so for example, ALK inhibitors or EGFR inhibitors. Now in global settings, that's obviously a complication because these standards of care are not universally applicable. So what standards of care in the U.S. may not be standards-of-care in the Czech Republic. And so in order to get to the common denominator, we decided to exclude these 2 patient populations. Another additional benefit of that decision is that we will increase the homogeneity of the patient population because patients with ALK and EGFR mutations have different prognosis compared to other lung cancer patients. And so for that reason, I think increased homogeneity is definitely a good thing for GALAXY-2 and gives us, actually, a better shot at getting a positive result.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

Okay. And then in that regard, you're talking about the differences in different countries. Is the lead-in, the first-line therapy the same across the whole -- all the countries that are involving GALAXY then?

Vojo Vukovic

Yes. So for GALAXY-2, we have an inclusion criteria that a patient must have received platinum-based chemotherapy in first-line. So we really want to make sure that the patient population for GALAXY-2 is very homogeneous.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

But the -- well, the platinum-based -- often -- that's given also in combination, isn't it? So is the combiner with the platinum-based going to be consistent, or is there some variability there, as well? Or is someone going to get monotherapy?

Vojo Vukovic

Yes. So platinum is the backbone and then to platinum you add different drugs. And there's a seminal paper by Joan Schiller in the New England Journal of Medicine, which has actually shown equivalency of 4 different commonly used platinum regimens. So as long as you have platinum as a combo that's given to patients, they achieve all very comparable outcomes.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

Okay. And last question, about AML-18 and AML-19, what is the difference? AML-18, I see it compares ganetespib with 2 other agents in combination. And I know most of the funding for this trial is going to be external to Synta. But what's the design of AML-18 and AML-19 and the rationale there?

Vojo Vukovic

Yes. So the series of the AML trial, actually there's 3 of them. One is called AML-LI-1 and then there's 18 and then the third one is 19. The design is very similar. These are all trials in patients with AML in the first-line treatment setting. What's different is the patient population. In the LI-1 study, that's approaching a go-no-go decision midyear, the patient population are elderly patients unfit for induction chemotherapy. In the AML-18, the patient population are elderly patients fit for induction chemotherapy. And then in AML-19, it's younger patients that are fit for induction chemotherapy. So we are basically, with these trials, 3 trials, the entirety of the AML indication set.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

For LI-1, you're in combination with a low-dose Ara-C. Is that the same for 18 and 19 or...

Vojo Vukovic

No, no. Induction chemotherapy is different. They will be using doxorubicin. They're also using other drugs, as well. And ganetespib is added to that regimen.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

Okay. All right. And all these are run by -- it's Alan Burnett, right?

Vojo Vukovic

Alan Burnett is the most senior person there. He works with the team. And for the individual studies, different people are the PIs. But Alan Burnett is really the person who has orchestrated this whole thing. And his institution acts as a sponsor. I should just mention that these trials are entirely funded by third parties. And all Synta is doing is really just providing the drug.

Operator

And our next question comes from the line of Brian Klein with Stifel.

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

I wanted to dig into the data a little bit further. On Slide 9, I noticed that between the entire adenocarcinoma population versus the chemosensitive population, you have a significant decline in overall survival. But the PFS seems to be consistent. I was just wondering if you could give a little bit more clarity on what you suspect is driving that drop when you move from the all-comer population to the chemosensitive population?

Vojo Vukovic

Well, I think the simplest way, I think, how to explain the difference between adenocarcinoma in chemosensitive is the fact that when we look at the 2 subpopulations with adenocarcinoma, one is chemosensitive, the other is refractory, defined as less than 6 months since diagnosis. All of the effects that we see in adenocarcinoma, is really contained in the subpopulation of chemosensitive, which represents 70% of the patients. And in the refractory patients, as I mentioned before, the OS hazard ratio is exactly one. That means in the 30% of that adenocarcinoma population, the refractory patients, there's basically no effect of the combination. And so in chemosensitive, you have a pure signal. And in adenocarcinoma, you have a signal mixed with 30% of patients, which experienced no benefits.

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

Right. I'm referring to the placebo arm -- or they are not placebo, but the docetaxel-alone arm. If the thing is true...

Vojo Vukovic

You mean the difference in median, 7.4 and 8.4?

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

Correct. Yes, why do you see that drop?

Vojo Vukovic

When you study in detail the Kaplan-Meier plot, you see that that's just basically by chance. The 7.4 number, if you analyze it, that's 55% instead of 50%, or at 60%, it will be a different number. It's just a random fluctuation. When you look at the -- well, actually you can't see here. But when we look at the confidence intervals, we see that the confidence intervals for the control in the chemosensitive for the control in adenocarcinoma almost completely overlapped.

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

Okay. I guess, one interpretation would be that if you use the 8.4 months for the Taxotere-alone arm instead of 7.4, you might not have reached statistical significance. And if your claim that there is no benefit from the rapid progressors, it just seems a little strange to me that you would see that decline. But I guess, my second question is in regards to the adjusted versus the unadjusted, obviously, it looks like there is a benefit in the chemosensitive arm when you adjust the numbers. And if I look back at the baseline characteristics on Slide 8, it looks like the docetaxel-alone arm was actually a more advanced or more diseased population in terms of both stage at initial diagnosis. If you look at the percentage of patients that received prior chemotherapy, and if you look at elevated LDH, all of those numbers are skewed towards the Taxotere-alone arm. So I'm wondering, if you adjust the patient populations, I would assume at least that the Taxotere-alone arm would actually improve, and your adjusted number would actually decline. But here, you're showing a benefit. So I'm just wondering if you could explain that, as well?

Vojo Vukovic

Yes. So what we show on Slide 7 and 8 are the baseline -- some of the baseline characteristics of the adenocarcinoma and the chemosensitive populations, not all. And when you look at Slide #10, you see in the footnotes, we show you the details which parameters are used to do the adjustments using the Cox model. And I think in a simplified version, the way how it works with testing all these parameters individually, determine which one carry prognostic or predictive value, and those remain in the multi-variant analysis. So this analysis has been used for 40 years is the standard in academic and industry trials, and it's used exactly for this purpose that you have mentioned, when there's some numerical differences in between the treatment arms, it is a very precise, widely adopted method to adjust for such imbalances.

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

Right. I guess I'm just wondering why if the docetaxel-alone arm seem to have worse patient characteristics. When you adjust them, when you just try to balance those 2 arms, at least I would expect that the adjustment would lead to a closer or a hazard ratio that approaches one as opposed to going the opposite direction once you make those adjustments. So that's what I'm trying to understand.

Vojo Vukovic

Yes. So, okay. So I'll turn this question over to Ilker. But before I do that, you see here 4, 5 parameters in the table, but there's additional parameters that we analyze that are part of the model. So, Ilker, if you want to maybe just walk us through this?

Ilker Yalcin

Yes. It's hard to explain, a technical concept over the phone. But I'll try my best. First, the adjustment in the Cox regression uses multiple variables. So you cannot think of like very simply one factor. Assume that treatment has more normal LDH patients. Those patients have better prognosis, we think. Right? But what if all those patients are smokers? So you cannot really look at one factor and say this is imbalanced in the one group. And the second thing is that it's not only the number of patients, but also what are those -- what the prognosis for those patients are. Let me give you an example. Let's say the treatment group ends up with more normal LDH patients than control group. So the LDH patients -- normal LDH patients have better -- better prognosis right? So since it has more LDH -- normal LDH patients, you may think the treatment group has an unfair advantage over the control group because of those extra normal LDH patients. But what if those normal LDH patient treatment group live much shorter, meaning have worse prognosis than the ones in control? The imbalance in this case will cancel out, right? Because you more normal LDH patients. But like I said before, if they're all smokers, it's going to cancel out. So, the Cox regression looks at all these things and adjusts accordingly.

Brian Klein - Stifel, Nicolaus & Company, Incorporated, Research Division

Okay. And then just the last question, please. The value that you show for the hazard ratios and the P-values are all one-sided. So I just want to confirm that in the GALAXY-2 Phase III study, they're going to be 2-sided analyses?

Vojo Vukovic

Yes, absolutely. I mean, we should not forget GALAXY-1 is a large randomized Phase II study, and the stats around that is designed accordingly. GALAXY-2, on the other hand, is a fully powered, very large Phase II trial and, of course, it will use two-sided analyses. And again, the statistical details of the planned analyses have been discussed and agreed upon with the agencies.

Operator

And our next question comes from the line of Thomas Wei with Jefferies.

Thomas Wei - Jefferies LLC, Research Division

I guess I just wanted to see if you were willing to provide any more granularity on when you might complete enrollment in GALAXY-2? And then, also, if based on what you've seen so far from enrollment, anything that you would point out that looks different from the GALAXY-2 patients relative to the GALAXY-1, things like the geographic breakdown, whatever you think might be notable?

Vojo Vukovic

Hey, Thomas, again, unfortunately, we are not providing details of the operational activities. All I can reiterate is that we feel highly confident that we'll complete the enrollment in time to generate the data for interim analyses. And we gave you some guidance on when those are. When it comes to enrollment patterns, we are very happy and very confident in what we have seen so far, operationally, in terms of opening up the number of sites. And then also, of course, the enrollment of patients themselves are actually going slightly ahead of our plans. We are trying to really use the lessons learned from GALAXY-1 in terms of patient selection and all the study procedures to optimize the process, and I think it's working. We see, I think, pretty good recruitment in Western countries but it's quite similar to what we've seen in GALAXY-1. In GALAXY-1, just to remind you, we had approximately 40% of patients from the West. So overall, I think we're very happy with the way how the operational aspect of GALAXY-2 is progressing.

Operator

And our next question comes from the line of Mike King with JMP Securities.

Michael G. King - JMP Securities LLC, Research Division

I just a had a quick question on the AML trials. Is there any possibility that any part of that data could be presented at this year's ASH, or is that too aggressive a timeline?

Vojo Vukovic

Yes, that's a very good question, Mike. We have guided to the AML-LI-1 go-no-go decision point for midyear. And the timeline for ASH submissions is traditionally the second week of August. So there's a possibility, obviously, if we have the data set, but because this is trial that's not run by us, it's run by the academic consortium, this decision about publication rests with them. If you can, we will encourage them, but we obviously don't know the outcome of that.

Operator

That concludes the question-and-answer session. I would now like to turn the call back over to Mr. Gollust for closing remarks.

Keith R. Gollust

I'd like to thank everyone on the call today for your time. If you do have follow-up questions, we're all here and we're available to take your calls. And I look forward to speaking with many of you in the future. Thank you.

Operator

Ladies and gentlemen, this concludes today's call. You may now disconnect your lines.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!