INNOVIVE Pharmaceuticals: Wall Street Analyst Forum Presentation Transcript

TRANSCRIPT SPONSOR

INNOVIVE Pharmaceuticals, Inc. (IVPH.OB)
Wall Street Analyst Forum
May 22, 2007 1:20 pm ET

Executives

Steven Kelly - President and CEO

Presentation

Steven Kelly

Thank you very much and it's a pleasure to be here. I want to thank the host for allowing me to present as well as the people participating via the webcast. During the presentation I will be making some forward-looking statements just want you to be aware of that. Just as a background INNOVIVE is a three year old company, come June 1. We are probably traded on the Bulletin Board as under the ticker IVPH.

We have as a summary management team with a deep background in oncology drug development and commercialization. We have a fairly robust pipeline of oncology products at various stages of development. INNO-406 is our lead compound its a Bcr-Abl/Lyn dual kinase inhibitor that we are developing in chronic myelogenous leukemia, we have Tamibarotene a recent acquisition that we're developing in acute promyelocytic leukemia.

We have INNO-206, which is doxorubicin prodrug. Doxorubicin is a commonly used anticancer agent. And we are developing this in a variety of cancers including small cell lung cancer and looking towards breast and lymphoma.

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We also have as our fourth compound INNO-305, which is WT1 peptide immunotherapy, they were looking at a number of indications the lead would be acute myelogenous leukemia. Our approach is a speed to market approach, where we are looking at driving compounds quickly to development and eventually leading to the market and our plan is to commercialize the product ourselves in the US and to seek partner's ex-US.

In terms of background of the management team, my background is nearly entirely commercial. I start off with Amgen in 1987 with a brief stint in process development and manufacturing, quickly moved to commercialization looking at new product marketing and Epogen marketing. I left there, went to IDEC Pharmaceuticals where I lead the marketing group and launched Rituxan a multi-billion dollar drug in oncology today. Then I left there and went to Sanofi-Synthelabo here in the New York and launched Eloxatin a billion dollar plus compound in colorectal cancer.

Eric Poma, he is our Vice President of Business Development. He has a number of years of experience, including his doctorate as well as strategic planning and business development experience most recently at ImClone Systems.

Adam Craig, he is our Chief Medical Officer, he is a M.D., Ph.D., Pediatric Oncologist by training, moved into the industry, worked in Antisoma, ArQule and Ilex Oncology.

And finally Greg Jester is our CFO, and he has most recently ten and half years experience at Barr Pharmaceuticals, where he was Vice President and Corporate Controller.

So as I said, we have deep experience in oncology drug development and commercialization. We essentially covered everything from investigation on new drug application through NDA or new drug application approval by the FDA and a commercialization at the billion dollar scale.

Going a little bit deeper into our pipeline INNO-406 as you can see is currently in a Phase I study, we had planned to initiate a pivotal Phase II study in the second half of this year leading to an NDA filing in the first half of Q2, 2008 and approval in Q4, 2008 and will be again commercializing our product ourselves in the US.

There will be a second indication coming along, second line CML, which would follow approximately six months after the first approval in third line of CML. Tamibarotene as I said is a recent acquisition that we are developing in acute promyelocytic leukemia. This product we will initiate a pivotal study very shortly. And we anticipate being able to file a new drug application with the FDA in the fourth quarter of next year and launching it in mid 2009.

INNO-206 is about to initiate a Phase II clinical study, that will take approximately nine months to complete where upon we'll drive it into a pivotal study and an NDA filing in early 2009 and an approval in late 2009.

INNO-305 is in a Phase I study right now, we anticipate being able to put it into a pivotal study late this year and an NDA filing in late 2009 and an approval in 2010. So essentially we have four shots on goal, all of them receiving FDA approval within the next three years.

I will go a little bit deeper into each of the products starting with INNO-406. Again this is a Bcr-Abl/Lyn dual kinase inhibitor that we're developing for chronic myelogenous leukemia.

The market in CML is fairly robust, we are talking about patients that are diagnosed with CML in the frontline study; virtually everybody goes on to Gleevec as the primary treatment. It's a very effective drug, was approved about six years ago as Novartis's drug it currently sells about $2.5 billion a year globally.

As good as the product is however there is resistance developing. You can see in the bottom there, a rate of 4% to 13% of patients developed resistance to Gleevec and then they move on to a second-line intervention. The only product approved in second line is the dasatinib (SPRYCEL) from Bristol-Myers Squibb.

Now before I go into each of the products, what I want to talk about is why do patients develop resistance, and there are three potential mechanisms of resistance. The first one is the Bcr-Abl, the target of Gleevec becomes the amplifier. I think Gleevec no longer can have activity. Number two, the target Bcr-Abl develops mutation. So the pocket changes in Gleevec can no longer bind in the pocket, so it no longer works. And finally, there are other pathways to become up regulated. They are bypassing Bcr-Abl. So if you can keep Bcr-Abl located, another pathway will emerge and allow the development and progression of CML.

Again dasatinib is the only product, that's approved. Nilotinib from Novartis is a second product that is expected to get approve sometime this year. There is our product and then Wyeth has a product called SKI-606. We believe that we have a better therapeutic index in any of these agents, we will describe that shortly.

Before I do that, I want to describe third-line CML and an opportunity that present itself. The patients treated under dasatinib and nilotinib often cannot tolerate the therapy. They can get responses to the therapy, but cannot tolerate it. Up to one-third of patients treated with dasatinib come off to the tolerability issues, on nilotinib around 10% to 15% of patients come off. So if you assume 60% market share for the dasatinib, about at weighted average 20% of patients are unable to tolerate therapy. This is a fairly robust market and no one is addressing today and an opportunity for us to receive approval.

Our products for '06 was rationally designed to address Bcr-Abl and Lyn and it's a dual inhibitor and unlikely the competitors, it is specifically designed to overcome these issues. The dasatinib was (inaudible) found to have activity in CML. The nilotinib addresses the two of the resistance factors and only our products addresses all three as designed.

Number two; we look at this product and we expected biologic activity at the 200 to 400 mg dose levels, as you know the FDA requires those dose escalation work. We started off at 30 mg per day, went to 60 mgs per day and we are pleasantly surprised to start seeing activity at that levels. So far sooner than we anticipated we saw activity.

We've had dose escalated up to 240 mg twice daily and reported that at the recent meeting at AACR. I'll describe that data shortly. In addition we've continued to dose escalate and we're looking at 480 mgs twice a day. We believe that this product has a therapeutic index that allows it to be used in all stages of CML, third line as I described, second line that we'll address shortly and first line potentially a high risk CML patient population that we can go into.

It also would address Chronic phase patients, Accelerated phase patients, Blast phase and Ph+ ALL. So the product has an index that allows it to be used everywhere. Phase II data that I was talking about that was presented at AACR. You can see on the left, there are patients that are getting durable remissions after lower doses. We have seen complete hematologic responses in two patients. We have seen molecular responses in one patient. We have also seen other evidence of molecular activity including CRKL dephosphorylation, a marker of Bcr-Abl activity and a 55-fold reduction in the Bcr-Abl transcript levels for the patients.

In addition on the right, you can see pharmacokinetic analysis that demonstrates that we at the 240-dose level have entered the therapeutic threshold, therapeutic window of activity. The bulk of the responses that we've talked about are at the 120 dose levels, so we are very pleased to see that activity, but now with 240 cohort we are up into the therapeutic window.

As we look at the competitive landscape, the two main competitors are the dasatinib and nilotinib. We believe that we are superior product to dasatinib for a number of reasons. First, although it is a very highly active compound, dasatinib is a highly toxic compounds, two-thirds of patients that are treated with dasatinib are dose reduced or dose interrupted. In addition as I said before 30% of patients come off all together due to toxicity. Now the Toxicity events include bleeding and fluid retention or pleural effusion issues. We believe that a more specific molecule such as ours will improve on the side effect profile, while managing to achieve the same level of efficacy.

Nilotinib is the other competitor and is generally regarded as the less active compound. If you look at the molecular responses or the cytogenetic responses, it's about 32% versus dasatinib's 40%. We believe that we have a higher activity and will have a equivalent side effect profile, but importantly we also have the inclusion of the Lyn activity that nilotinib misses all together. So if 100 patients came to the door, we would address more of them and we believe that we would have a higher activity than nilotinib.

There are other competitors in CML; as you can imagine, the $2.5 billion market will attract other companies to the marketplace. SKI-606 is a Src inhibitor very similar to dasatinib. It's currently in a Phase II study. There are number of other compounds in the clinic or pre-clinical stage, MK-0457, which is an Aurora kinase inhibitor from Merck and Vertex. It's in a Phase II. Ceflatonin from ChemGenex is in a Phase II/III and then there are some pre-clinical compounds from SGX and Ariad.

They will be addressing this space. We believe that they are further along or do not have the broad therapeutic index that we possess. Our plan is laid out here on this slide, as you can see that we are currently in a Phase I study. We have reported data on this study at AACR in April and anticipate presenting some additional data at ASCO on June 2.

Once we have established our dose through this Phase I study and have meet with the FDA, we plan on developing the products in two parallel registration paths. The first is a Phase II study looking at the third-line CML. This is the type of patient population that was responsive to dasatinib and nilotinib but cannot tolerate the therapy.

This we anticipate would be 60 to 100 patients in total, and the endpoints of the three months hematology and cytogenetic response. The enrollment will take about six months follow up three months, we will be in position to file our NDA sometime in Q2, 2008. That would lead to an approval by late 2008.

In addition we will be conducting a [farewell] Phase III study, looking at dasatinib as a competitor on, this would be in second line CML. Dasatinib is the competitor, 240 patients in a two to one randomization, the endpoint will probably remain three month hematologic and cytogenetic response.

And we will initiative a bridge very near the initiation of the other one, it should take about 15 months to complete the study. We would be filing a supplemental NDA application upon the approval of the third-line approval. We also believe that this could serve as our confirmatory study for the accelerated filing approval in late '08.

I'll move on to our next product Tamibarotene. Tamibarotene is a synthetic retinoid that we're developing for Acute Promyelocytic Leukemia. APL is a subset of AML fairly small incidence in the US around 1,500 patients in total. The current therapy for APL is ATRA (All-Trans Retinoic Acid) currently a generic drug, it's used in induction and in maintenance in combination with chemotherapy, our resistance is common. Arsenic trioxide is the approved second-line treatment and there are no third-line treatment options available for patients.

Our product Tamibarotene is a synthetic retinoid, has a similar structure and function to ATRA but it has ten folds the potency of ATRA. In addition we believe that we will have higher plasma levels due to the fact that we have a low affinity to cellular retinoic acid binding protein, which is the mechanism of resistance to ATRA.

In addition we don’t bind RAR-g, which should improve its side effect profile including a reduction in retinoic acid syndrome. This product is approved in Japan, we licensed North American rights to it just this last December and are planning to move it forward.

You think about how do we compare against ATRA and arsenic, you could look at Tamibarotene on the left, arsenic in the middle we achieve about approximately the same level of efficacy or 70% complete response rate and have activity in ATRA failures. We have a milder side effect profile versus arsenic, which has QTc prolongation and a risk of sudden death in what a daily oral versus a daily IV for 60 days.

We think that we compare favorably to arsenic. If you look long-term and our goal is to replace ATRA long term, we have a similar mechanism of action, higher potency, higher plasma levels, less resistance can achieve in second line what they are able to achieve in first line. So we think that we'll have a better response rate in first line. And we have a milder side effect profile retinoic acid syndrome of 7% versus 25% and we remain a daily oral.

We went to the FDA and proposed that we would use the Japanese filing as our NDA filing may suggest that we do a study as well. So they've agreed that we could use the Japanese data as our safety database and they would like to see us do a 40 patient study in ATRA and arsenic failures and file that with response rate end point in about two to three month follow up. We will start that study this quarter and we anticipated about 15 months in total to enroll and follow-up the patients and would lead to an NDA filing in the fourth quarter of 2008.

That initial approval will generate sales in the range of $10 million to $20 million as the ATRA and arsenic failures. We believe that some data coming out in Japan as a comparison to ATRA in the maintenance study could help us drive forward. We would take that data and file it as a supplemental NDA and we think that this product could achieve somewhere in the range of $50 million to $100 million sales in the US.

Our next product 206 is an acquisition that we brought in from KTB a free standing research institute in Germany. We brought this in last summer. It’s a doxorubicin prodrug. So what we have done is we have taken doxorubicin a very commonly used cancer agent it has been around for 30 years and still 10% of all cancer patients receive doxorubicin in a wide variety of tumor types.

As good as it is in terms of efficacy it is associated with the number of side effects myelosuppression or decrease in blood counts., GI toxicity, mucositis, stomatitis and most importantly cumulative cardiotoxicity. This cardiotoxicity increases with additional drug levels in the body and is the restriction beyond which you cannot tolerate more drug. The reason no one receives more doxorubicin on their first cycle. There is a heart stop in the package inserted 550 mgs per meter square of drug.

Our drug DOXO-EMCH was designed to improve the toxicity profile and allow an increased dosing of doxorubicin. We will take a native doxorubicin and attach the chemical called EMCH to an acid sensitive link. If you look at this drawing on the next page, you can see we've taken a native doxorubicin and EMCH and upon administration this product finds and binds a free style group on [1634] of circulating albumin.

In that complex, doxorubicin is inactive. So it cannot go to nonspecific sites like the marrow, like the heart, like the gut and cause toxicity. Only when it reaches the site of the tumor, where there is a lower pH due to the hypoxic environment of a lower pH, that link is cleaved between EMCH and doxorubicin leaving doxorubicin in the site of the tumor.

So essentially what we have is a targeted delivery of doxorubicin to the tumor and we've done localization work seen no evidence of doxorubicin anywhere else except in the tumor and in the kidneys where it is excreted. And as well it should allow higher dosing of the drug and amelioration of the side effects associated with doxorubicin.

And that's in fact exactly what played out in the Phase I study done by KTB. They treated patients at range of doses starting in 20 mgs per meter square. A typical doxorubicin dosing is 50 mgs to 60 mgs per meter square and they climbed up to 340 mgs per meter square before seeing toxicity. That toxicity was exactly what you would expect to see with doxorubicin, mucositis and neutropenic fever.

Interestingly no acute cardiac toxicity events were seen. In addition, if you look at the total dose given as again the heart stop and doxorubicin is 550 mg/m2. We have patients receiving up to 3 grams of drug, so six times the doxorubicin dose. They also saw evidence of activity. They saw responses in small cell lung cancer, in breast cancer and in sarcoma.

So the addition of EMCH did nothing to the efficacy of the compound and it allowed increased dosing up to six times. Our plan is to move forward with the 200 mg/m2 dose level which is 4x the doxorubicin dose. We are going into a Phase II study in second line small cell lung cancer. This is a single-arm study designed to look for response rate, approximately 40 patients in total. We have received an allowance from the IND to proceed with this study and anticipate initiating the study some time this quarter and in very short order.

Once we have established the level of response, we think we are prepared to go into a comparative study versus Topotecan. Topotecan is the current standard of care in second line small cell lung. The response rate is 24% on Topotecan; the survival is around 25 weeks and 80% of patients have grade 3 or 4 myelosuppression events. We think it's relatively low hurdle and we should be able to beat them in a head-to-head study. That study would start some time early next year. We have had 16 months study in total, looking at PFS where overall survival is our endpoint and will lead to NDA filing in the second quarter 2009.

And interestingly this would drive, generate revenue in probably $100 million to $200 million range, but the potential of these agents goes beyond that. If we can continue to demonstrate the lack of cardiotoxicity on doxorubicin, we can go some of the larger tumor types like breast cancer and lymphoma. Both are currently treated with the anthracycline and doxorubicin.

We will follow the Phase II study for cardiotoxicity events, and at the end of that study, if we see no cumulative cardiotoxicity we will go into breast in a combination regimen with Herceptin and pilot program and we look at lymphoma as a replacement for doxorubicin in the CHOP regimen as one possibility.

So on those two pathways, this product could generate significantly larger sales under the small cell lung indication. The license that we have is for any anthracycline in combination with acid sensitive link, but in addition we have the first right of refusal for the use of this linker technology with any cytotoxic. So you can think of the products that are coming off patent in the relatively near term. Irinotecan is currently $1 billion in sales. It's a Pfizer's product and use for colorectal cancer primarily. It's going off patent at the end of this year.

We could use this and avoid the primary side effect of Irinotecan which is diarrhea. If they get Gemcitabine $1.5 billion, going off patent in the next three years, Docetaxel over $2 billion, going off patent in the next three years. These are products where we can attach an acid sensitive link and use endogenous albumin as our carrier to the site of the tumor again allow increased dosing potentially if there's a dose response care with the cytotoxic and a reduction in the side effects of those compound. And we are currently doing feasibility work on using the linker technology with these compounds.

Finally INNO-305 is WT1 peptide immunotherapy. This is a peptide approach to cancer vaccines. We have a validated target WT1 antigen. This is Wilms tumor antigen. It is an embryonic transcription factor that disappears at birth. It only present in adults in association with malignancy, highly overexpressed in leukemias and a number of solid tumors, including lung, breast and ovarian cancers. We have selected AML as our lead indication because it is known to be immune responsive. You can use donor lymphocyte infusion to generate a response in AML patients. In addition, we have seen an analogous compounds being used in single peptides where you are able to see an immune response and durable clinical remissions lasting out 38 months.

Finally, this is a short development path we are looking at rather than a typical five to seven year development program. It's a 12-month follow-up. Survival on these patients is relatively poor, medium survival around nine months. So we would be looking at improving that and measuring that at 12 months. This is an off the shelf approach, no customization requires for peptide in a vial and fairly inexpensive to produce again because there is a lack of customization.

We are currently in a Phase I study at the Memorial Sloan-Kettering Cancer Center here in New York. We are looking at AML, MDS (myelodysplastic syndrome), non-small cell lung cancer and mesothelioma. The fixed dose is not a dose finding. Essentially, we are looking for immune response as a study. We started at last July. We anticipate by the end of the third quarter, we will an idea of activity and can enter a Phase II/III design sometime in the second half of this year, comparing to best supported care in AML patients that are in their first complete remission. This would lead to an NDA filing in the second half of 2009 if effective.

In terms of financials; our financing history, we had received capital around $5.5 million. We have done three financings since, most recently closing in April on $15 million pipe. Total capital raised $36 million. We have 15 million shares outstanding fully diluted, 19 million outstanding as of 3/31. Prior to that financing, we had about $0.5 million in cash and cash equivalents and no debt. So now we have the additional of the 15 and wherever the payables were. Our market cap is approximately is $60 million fully diluted around $75 million. Our share price as of today is $4 a share.

In terms of milestones for the company coming out over the rest of the year; in May as I said, we will initiate the Phase II study, an INNO-206. We anticipate initiating a pivotal study on tamibarotene in the May/June timeframe. On June 2nd, we have data coming out at ASCO on INNO-406 including cytogenetic response in idea of our final dose. In mid June we have pre-pivitol meeting with the FDA on INNO-406 leading to initiation of those studies in Q3.

We anticipate in Q3 we can obtain a national exchange listing, initiate those two studies and have INNO-305 results. In the fourth quarter we believe that we will have 406 Phase-I final study results, potentially some preliminary phase third line results the Phase II third line results at ASH and initiation of our pivotal study on INNO-305. Finally we should have Phase-II results on INNO-206.

So in summary INNOVIVE has a proven management team with a good track record of drug development and commercialization. We have products with a non-overlapping portfolio of products in cancer, development plans that emphasize speed to market and actionable end points. We have the retention of commercial rights and value through the approval on each of these compounds and we believe the potential to provide significant and rapid value growth to existing and future shareholders.

Thank you very much and I am happy to answer any questions that people may have.

Question-and-Answer Session

Unidentified Audience Member

[Question Inaudible]

Steven Kelly

Our cash burn is approximately a million dollars a month. We anticipate that climbing as we initiate these other studies, exiting this year at around $3 million a month. Any other questions?

Well thank you four your time and attention and if any one wants to ask one-on-one questions I can be outside for just a few minutes. Thank you.

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