Idera Pharmaceuticals, Inc. (NASDAQ:IDRA)
Q2 2014 Earnings Conference Call
August 12, 2014 8:30 a.m. ET
Jim Baker - Executive Director of Corporate Affairs
Sudhir Agrawal - Chief Executive Officer
Lou Arcudi - Chief Financial Officer
Lou Brenner - Chief Medical Officer
Kath Haviland - Vice President of Rare Diseases
Ted Tenthoff - Piper Jaffray
Boris Peaker – Cowen and Company
Good morning, and welcome to the Idera Pharmaceuticals’ second quarter 2014 conference call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open up the call for your questions. Please be advised that the call is being recorded at the company's request. At this time, I'd like to turn the call over to Jim Baker, Executive Director of Corporate Affairs at Idera Pharmaceuticals.
Thank you, Darren. Good morning and welcome to Idera’s second quarter 2014 conference call. You can listen to a live webcast or a replay of today’s call by going to the investors section of the company’s website at iderapharma.com.
Joining me for today’s call from Idera are Dr. Sudhir Agrawal, our Chief Executive Officer; Lou Arcudi, our Chief Financial Officer; Dr. Lou Brenner, our Chief Medical Officer and Kath Haviland, Vice President of Rare Diseases.
I would like to remind you that today’s discussion will include statements about the company’s future expectations, plans and prospects, that constitute forward looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factors section in Idera’s quarterly report on Form 10-Q for the three months ended June 30 2014. In addition, any forward looking statements represent our views only as of today and should not be relied upon as representing our views at any subsequent date. While we may elect to update these forward looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views change.
With that, let me pass the call over to our Chief Executive Officer, Dr. Sudhir Agrawal.
Thank you very much, Jim. Good morning everyone. Thank you for joining us on today’s conference call. Last quarter we provided a comprehensive overview of our business strategy and the foundational elements for value creation based on upon Idera’s proprietary technology platforms. Today we are very pleased to report significant progress across all programs executing on this strategy. In addition, we are building a world-class team that will continue to drive momentum towards delivering advances in treatment for patients with serious unmet medical needs.
Before we begin our presentation, on recent corporate developments let me request Mr. Lou Arcudi, our Chief Financial Officer to briefly review our financial results for the second quarter.
Thank you Sudhir and good morning everyone. In this morning’s press release, we reported a net loss applicable to common stockholders for the second quarter of 2014 of $8.4 million or $0.10 per diluted share, compared to the net loss applicable to common stockholders of $5.6 million or $0.15 per diluted share for the same period in 2013.
For the six months period, we reported a net loss applicable to common stockholders of $17.6 million or $0.22 per diluted share, compared that to our net loss applicable to common stockholders of $9.7 million or $0.30 per diluted share for the same period in 2013.
Turning to our operating expenses. First, R&D expenses for the second quarter of 2014 totaled $5.6 million compared to $2 million for the same period in 2013. For the six months period, R&D expenses totalled $12.6 million compared to $4.3 million for the same period in 2013.
Our G&A expenses for the second quarter of 2014 totaled $2.7 million compared to $1.6 million for the same period in 2013. For the six months period, G&A expenses totalled $4.8 million compared to $3.1 million for the same period in 2013.
If we look at our cash position, we ended the second quarter with cash, cash equivalents and investments totaling $64.7 million compared that to $35.6 million at the end of December of 2013. Overall we have made significant progress and continued to build out the operational and clinical infrastructures to support our ongoing planned clinical and pre-clinical initiatives. We believe we are well capitalized and have the resources in place to execute on our current business objectives.
I will now turn the call back to Sudhir.
Thank you, Lou. And again thank you all for joining us. The first half of 2014 has been a very productive period for Idera. As you know, our business strategy is to develop and potentially commercialize drug candidates for rare diseases with serious unmet medical needs. As we are executing this business strategy, we have accelerated phase 2 clinical programs with our lead product candidate IMO-8400 in two genetically defined forms of B-cell lymphoma. These programs are being conducted by world renown US based clinical research institutions.
In addition, we are very pleased to have secured new partnership with Myositis and GvHD communities which are critical to our success of clinical programs in rare diseases. All of these works laid the foundation of value driving clinical data generation towards the end of this year into 2015.
As we highlighted last quarter, pillars of our business strategy are our internally developed nucleic acid technology platform. The first platform involves Toll-like receptors, referred to as TLRs antagonism and now our approach to the treatment of wide range of diseases in which immune system is dis-regulated due to over-activation of TLRs.
The second platform involves gene silencing oligonucleotides or GSOs which represented third generation antisense technology. Based on our pioneering work over many years in the antisense field, we have developed the GSO platform to address important limitations associated with earlier generation antisense technologies. Ultimately our goal is to leverage these technologies to discover, develop and commercialize novel and proprietary drug candidates for rare diseases characterized by serious unmet medical needs. With these technologies, we believe we are well positioned to deliver meaningful advances in treatment for patients and generate significant value for our shareholders.
I am now going to turn the call over to Lou Brenner, our Chief Medical Officer to review recent developments with our B-cell lymphoma clinical programs. Lou?
Thank you, Sudhir and good morning everyone. We’re very excited to report progress across our clinical development activities. Our first in class TLR antagonist candidate IMO-8400 is the cornerstone of our efforts to build the business and provide benefit to patients.
Our lead indications for IMO-8400 include two forms of B-cell lymphoma, Waldenström’s Macroglobulinemia and diffuse large B-cell lymphoma, or DLBCL in which the MYD88 L265P oncogenic mutation is present. We believe IMO-8400 offers a potentially personalized and targeted therapeutic approach for patients with these serious diseases.
Recently new observational data published in the journal Leukemia dramatically highlights the four prognosis of DLBCL patients with the MYD88 L265P mutation. Overall survival was markedly impaired in these patients when compared to wild type DLBCL patients who did not have the mutations, including importantly in patients who received standard of care our job [ph] as first-line chemotherapy. These data identify a high-risk population, unresponsive to current therapies and support our mutation targeted approach using IMO-8400.
Over the last quarter we have significantly expanded our clinical programs in Waldenström’s and DLBCL. First, the ongoing open label phase 1/2 study in Waldenström’s is progressing nicely. As a reminder, this study includes a 3x3 dose escalation design whereby patients with relapsed or refractory Waldenström’s will be treated for up to 24 weeks at escalating doses of IMO-8400 administered subcutaneously. We are excited to partner with committed group of global experts in the treatment of Waldenström’s to conduct this study.
This quarter we activated multiple new clinical sites at leading cancer centers throughout the United States, including Sloan-Kettering, MD Anderson, Mayo Clinic, Stanford University and several other institutions. We expect to share initial data from a limited number of patients by year end with additional data expected in 2015.
We've also made tremendous progress towards executing a clinical trial in patients with DLBCL who harbored the MYD88 L265P mutation. This progress has included securing FDA concurrence on screening and enrollment strategy based on the MYD88 L265P mutation. We’ve opened two clinical sites and initiated patient screening.
Similar to the Waldenström’s study, this trial includes a 3x3 open label dose escalating design. In addition, we are excited about our collaboration with Abbott Molecular as progressing ahead of expectation such that we expect to incorporate Abbott’s PCR based screening test into our clinical program in the third quarter. The development and utilization of this companion diagnostic represents a major milestone for our mutation targeted development program.
While we continue to advance these proof-of-concept clinical studies in Waldenström’s and DLBCL, we're also engaging the medical scientific communities on the potential role of TLR antagonism in the treatment of patients affected by these serious diseases.
Yesterday we presented new pre-clinical data at the American Society of Hematology Meeting on Lymphoma Biology in Colorado Springs which showed that IMO-8400 inhibited MYD88 L265P oncogenic mutation mediated signalling and cell growth, leading to cell death. In addition, later this week, we will present new preclinical data at the 8th International Workshop on Waldenström’s Macroglobulinemia in London. This presentation will include data showing that IMO-8400 induces dose dependent inhibition of cell growth and lead to cell death in the Waldenström’s [mouse tumor model]. These presentations will be made available through our website.
Collectively, we believe this data support our development efforts in Waldenström’s and DLBCL and enable us to engage scientists and treating physicians regarding the potential role of TLR antagonism as a novel treatment approach for these serious diseases.
I’d now like to introduce Kath Haviland, our Vice President of Rare Diseases who will speak about our strategy and recent progress in myositis and other rare auto-immune diseases. Kath?
Thank you, Lou and good morning everyone. Earlier this year, we outlined the strategic review process we underwent to prioritize rare auto-immune diseases for near-term clinical development with IMO-8400. We prioritized myositis and graft versus host disease known as GvHD, because in both data showed TLRs play an important role in propagating the disease and there are significant unmet medical needs and the need for new treatment options. We are very excited about the progress we've made over the last quarter towards initiating clinical programs in these indications.
As a reminder, myositis is a rare disease characterized by muscle inflammation leading to muscle weakness and considerable disability impacting the patients’ quality of life and putting them at risk for increased risk for premature death.
GvHD is a life threatening complication of allogeneic stem cell transplantation with frequently severe clinical manifestations on the skin, in the liver and in the gastrointestinal tract. Data show that steroid treatment is effective in only about 50% of GvHD patients with a high rate mortality and a steroid refractory population. [indiscernible] data demonstrating of role of TLRs and the disease pathogenesis of myositis in GvHD, we believe these indications represent scientifically validated opportunities for Idera’s TLR antagonism technology platform. They also represent an important commercial opportunities for Idera.
As rare diseases with well defined patient population, myositis and GvHD have the potential to support the efficient and value driving business model demonstrated in other rare diseases. In both cases, current treatment options are primarily limited to corticosteroid and other immune suppressive drugs often with significant side effects, and there is high unmet medical need for new treatment option. In addition, patients typically follow – are followed by a limited number of clinicians at expert academic centers, which will likely require a small commercial infrastructure to effectively market and approve products.
We are excited to announce that in support of our myositis clinical program the formation of a myositis expert advisory board comprised of key opinion leaders from major academic and clinical centers around the world, with significant experience in the carrying for myositis patients and in conducting clinical studies.
We’re thrilled to partner with these experts to help us advance IMO-8400 as a potential treatment for patients with myositis. Currently we are working with this esteemed group to obtain advice from the design and execution of our upcoming clinical study.
In addition, last week, we announced an important collaboration with The Myositis Foundation, the leading US based patient advocacy organization serving all patients with inflammatory myopathies. Under the collaboration, Idera and The Myositis Foundation will develop educational programs and resources for patients and healthcare providers, including online interactive chat on TLR antagonism and on opportunities to participate in the IMO-8400 clinical study.
In recent months, we’ve also established collaborations with key experts in GvHD at Ohio State, Washington University in St. Louis and the University of Minnesota to conduct preclinical studies to further validate our therapeutic approach in GvHD. In concert with these efforts, discussions are ongoing with key opinion leaders to design and execute on GvHD clinical study. Together we believe these partnerships with key experts and leading patient advocacy groups demonstrate the growing enthusiasm in the patient and clinical communities for the upcoming IMO-8400 studies in myositis and GvHD, and we look forward to working with these stakeholders to develop an innovative therapy that may improve outcomes for patients with these diseases.
With that, I would like to turn the call back over to Sudhir.
Thank you, Lou and Kath. In addition to the progress Lou and Kath highlighted with our TLR antagonism technology platform, we are continuing to advance our gene silencing oligonucleotide platform with the goal of moving our GSO drug candidate into clinic in the second half of 2015.
Pre-clinical data show that unique GSO structure induces length-dependent gene silencing mitigating immunotoxicity and limit this accumulation when compared to earlier generation technologies. Furthermore in preclinical studies performed to date, the company’s GSOs have shown improved potency against a number of clinically relevant targets when compared to other current antisense technologies. Just last week, we announced the publication of a new preclinical data in animal models showing that GSOs can inhibit specific microRNAs leading to improved neovascularization, a process involving the proliferation of blood vessels crucial to recovery following a cardiovascular event. These data were generated with academic collaborators from Leiden University in the Netherlands and are now available in the current online additional circulation research.
We are currently focused on the next steps in advancing this potentially transformational technology, which is to identify novel GSO drug candidates directed against prioritized genetically defined diseases.
In summary, our team at Idera has made remarkable progress in all fronts. This quarter, we took very important steps towards translating our world class science in the clinic across multiple therapeutic carrier all of these were to lay the foundation for value driving clinical data for multiple programs. We expect these data to become available as early as year end and during 2015. Above all, our company is committed to developing meaningful advances in treatment for patients affected by rare diseases and we look forward to keeping you updated on our progress.
Operator, we would like to open call for questions.
(Operator Instructions) First question is from the line of Ted Tenthoff from Piper Jaffray.
Ted Tenthoff - Piper Jaffray
I guess my first question has to do with just timing of the start of the DLBCL study and when we could expect data from both the Waldenström’s cohort and the DLBCL patients?
Good morning, Ted, good to have you on the call. I will request Lou Brenner to respond to the question.
Yes, thanks Ted. So take Waldenström’s first, so we are enrolling patients in that study. As you know it is an open label study and our open expectation is to be able to share a data update around the end of this year for that study and the enrolment is ongoing. The DLBCL trial has been initiated, we have opened clinical sites and begun screening process. As you know the mutation is less common in the DLBCL setting at about 30% ABC sub-type or about 15% of all DLBCL patients. With that enrollment we think will take a moment to get started but we expect to be able to share data on enrolled patients in 2015.
Ted Tenthoff - Piper Jaffray
Fantastic. Looking forward to those updates and progress from the rest of the pipeline. Thanks so much.
Thank you. Sir you have no more questions at this time. (Operator Instructions) Ted Tenthoff from Piper Jaffray, your line is open.
Ted Tenthoff - Piper Jaffray
So you started to go through some of the orphan autoimmune indications and it was nice to hear your voice on the call. Can you go into a little bit more detail on sort of the decision process in choosing those indications and just a little bit more detail on how the TLR mechanism could work there?
Sure, hi Ted, thanks for the question. So the team went through a very comprehensive review of numerous orphan in rare auto-immune diseases, and criteria were developed including the role of TLRs and the pathogenesis – the propagation of the disease, the level of unmet need and the commercial potential of what these indications could provide. And I think in both GvHD and myositis we see that TLRs play a significant role in the propagation of the disease process through pro-inflammation response to PAMPs or DAMPs that are developed as part of the initial disease install. So there is a number of publications that we were able to review and in talking with key opinion leaders to understand the TLR pathway is important in the continued disease process in both disease areas. So we look forward to moving into the clinic and further understanding the clinical utility of our TLR antagonism approach.
Thank you. The next question is from the line of Boris Peaker from Cowen.
Boris Peaker – Cowen and Company
Good morning. I just wanted to follow up on a prior question, specifically in terms of mechanism myositis and GvHD. I am just curious in the TLR mechanism what are possible escape mechanisms, at least what do we know from early preclinical data and how could that be addressed in the clinic?
So I think this is very question, Boris. This is Sudhir. So Toll-like receptors are part of the immune system receptors and there is no sort of escape mechanism per se. So in case of muscle damage or in case of cell transplant, this leads to generation of what we call damage-associated molecular patterns and since they are up-regulated they engage toll-like receptors to over-induce or over-activate immune system and this cycle continues as Kath said, that this is the cycle and we are trying to interfere into the cycle. So having seen this earlier in auto-immune diseases for example, psoriasis and these diseases are multi-factorial and we are working upstream by targeting toll-like receptors thereby blocking the inflammation, cascade upstream before any cytokine is induced. And as we have discussed this scientific literature and the clinical data to date, with the key opinion leaders in GvHD and in myositis and an example is that The Myositis Foundation is agreeable to work with us and as you can see key opinion leaders we have put together in myositis, are very excited to be working with us. So we are seeing actually very broad support from the key opinion leaders and clinical community to help us in advancing these to clinical proof of concept.
Boris Peaker – Cowen and Company
And is there any concern I guess mechanistically potentially having infection or increased rate of infection?
That is the theoretical concern for any drugs that work on the immune system, because the redundancy as Sudhir mentioned toll-like receptors, we think that is a low risk, thus far in the clinical studies that we’ve had including healthy volunteer study and also a study in psoriasis patients, we have not seen any increased rate of infection. Thus far we’ve dosed approximately 75 patients for up to 12 weeks and not seen any risk of infection, and that is something obviously though that we will continue to monitor as part of the ongoing clinical studies.
Thank you. With no further questions, I would now like to turn the call over to Jim Baker for closing remarks.
Well thank you very much for joining us on today’s call. We look forward to updating you further as we advance our program. Thanks, again, bye.
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