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Idenix Pharmaceuticals, Inc. (NASDAQ:IDIX)

UBS 2012 Global Life Sciences Conference Call

September 20, 2012 11:00 am ET

Executives

Ronald C. Renaud – President, Chief Executive Officer and Director

Analysts

Matthew Roden – UBS

Matthew Roden – UBS

Good morning everybody, and thanks for joining us at the UBS Global Life Science Conference. I am Matt Roden, Biotech Analyst here at UBS, and it's my pleasure to introduce Idenix Pharmaceuticals for its formal presentation. As a reminder, the breakout will, session will follow this in the Uris room one floor below. And speaking on behalf of Idenix is its President and Chief Executive Officer, Ron Renaud, Ron?

Ronald C. Renaud

Thanks, Matt, before we begin the customary Safe Harbor statement, we’ll be making forward-looking statements and these statements are all detailed in our filings with the Securities and Exchange Commission. So little bit about Idenix, as most of you know, we’re focused on the development of next-generation, antiviral, oral combination treatments, right now focus singularly on the treatment of Hepatitis C. Our lead compound is IDX184, this is an HCV nucleotide polymerase inhibitor, which is currently in Phase IIb trials. We’ve recently reported Interim SVR4 data, as well as 12-week cEVR data which demonstrated safety and promising antiviral activity.

I’ll talk a little bit more about the clinical hold, as some of you may know we filed an 8-K this morning, which details some of the information, we’ve received informal letters from the FDA and I’ll spend a little bit of time talking about that.

Our next nucleotide prodrug is IDX19368 this is a lead candidate from our next-generation HCV nucleotide prodrug series. We filed an IND on this earlier this year and we haven’t dosed any patients and that program is also on a clinical hold. Both of these related to the toxicities noted in the Bristol Myers program.

And behind that and then as we continue with the theme of nucleotide prodrugs, we also have a very robust nucleotide discovery program that’s been ongoing for a better part of the last 18 months and in this program, we’ve really tried to take a strong look at what makes a good nucleotide prodrug for the treatment of Hepatitis C, we’ve looked at the prodrug itself, we’ve looked at the sugar and at the base, and I’ll talk a little bit more about that later in my comments.

And then finally, and shouldn’t be forgotten, in the midst of all the clinical hold news is IDX719, this is our HCV NS5A inhibitor, which was recently completed a three-day proof-of-concept study and unlike any other NS5As that are in the clinic, this is demonstrated favorable safety, but also potent pan-genotypic activity in HCV infected patients, and also we’ll talk a little bit about our restructured agreement with Novartis, which basically gives us an enhanced strategic flexibility to develop our portfolio without them having any onerous rights to compounds in the pipeline.

So just a little bit about what our strategy is and our strategy remains the same despite the clinical holds, we are still focused on the exact same strategy, and this is not incredibly out of line with what a lot of other folks in the HCV space are doing, but we’ve got a couple of differences. Clearly, everybody is going after potency, they’re going after safety, safety means more now than ever in all world, clearly, getting interferon out of the mix is important.

But really as you move up these peers getting to the next level it gets a little more difficult convenient, so if we can get it down to once or twice daily, low dosage if you look at the combination regimens that we have out there right now that are in late stage clinical testing, we’re talking about combinations of drugs, that are 200, 300, 400 milligrams and in combination there’s going to be more than a gram of drug substance in these regimens.

So we’re really trying to focus on getting that limited and then ease of administration, we believe that despite a lot of the discussion on whether this is a disease that can be cured in 12 weeks or is it going to be 24 weeks, we still strongly believe that with the right combination of drugs this is actually a 12 week or less treatment period.

But I think what will ultimately set Idenix apart from everybody else that’s in this HCV space is our focus continues to be on developing regimens that are pan-genotypic. So a lot of the strategies out there are focused on genotype 1 and clearly that’s the biggest market in the industrialized world, but you got to think about going globally, and we also think about what as you roll in the ease of administration, we would like to be in a situation where we have a regimen that has a low dosage formulation, potentially co-formulated, and basically, you walk-in if you have HCV, the doc, the patients will still continue to get genotype, but regardless of genotype, you could get an Idenix regimen, that’s something we’re focused on and we think it will set us apart from any of the other regimens that are out there.

So a little bit of our pipeline right here, IDX184 and IDX368 on either side of this table, those are both our nucleotide prodrugs and IDX719 in the middle are NS5A inhibitor, what we’ve shown here is from an efficacy perspective cEVRs of 93% with IDX184, and our initial look at the SVR4s and the 12 plus 12 cohort of patients.

We had a very nice response, those were obviously our best responders and we’ll have more from this program, when the study completes in the first half of next year.

IDX719 very much has impressed us and impressed the folks who’re working with, in terms of up to nearly four logs of activity in our three-day proof-of-concept, it was well tolerated and we’re looking at this compound as doses of 50 milligrams to 100 milligrams. So again, if you look at what our strategy is, we’re looking at very potent compounds at low dosage formulations that could be minimal to the co-administration and potentially co-formulation.

So, I’ll spend a little bit of time talking about probably, what everyone is interested in as it relates to Idenix today. As most of you know in the middle of last month the FDA placed 184 in a partial clinical hold and 368 on a full clinical hold, due to serious cardiac related adverse events with the Bristol compound and that’s the Bristol nucleotide prodrug.

We’ve been working with the FDA, we’ve also been working in a very transparent fashion with Bristol-Myers to resolve the clinical holds and really try to understand the genesis of this toxicity.

We were informally notified or verbally notified by the FDA as to the clinical holds and we reported that a few weeks back, very recently, we received the formal letters related to both IDX184 and to IDX19368. As it relates to IDX184, from a clinical perspective and in fact for most of the letter there weren’t too many surprises in our opinion.

From a clinical perspective, they wanted the Echocardiograms we’ve talked about that in the past, the ECGs, the cardio biomarkers which includes the pro-BNP's, CK, and the ultra sensitive troponins.

We’ve done most of this, I would say, we have better than 90% of this done, we’ve been submitting some of this on a rolling basis, but of course, we’re going to have to aggregate this internally, have an external expert review of all this data and see what kind of conclusions an outside panel draws on this. What I can’t say about, what we’ve seen so far as we look at all of these we know, we don’t have the toxicity that Bristol has seen.

We clearly can see a distinction between the two datasets, but again we need to pull this together, this will be a pretty extensive exercise, we’ll have to do a lot of analytical work to really layer all of these on top of each other, there will be a lot of multi varied analysis, lot of statistical analysis to really try to understand here what’s going on with our compound and we work with Bristol as we move through all of this to understand what their toxicity and what they’re seeing and how it relates to us.

From a non-clinical perspective, there is certain requested data that’s already been performed and there is a lot of additional testing that’s underway. Fortunately, for us, we had started a six and nine months GLP toxicity program earlier this year, so we were in the middle of this program, when this happened. So what we’re able to do is to go into this GLP tox program and start to insert additional assays and additional testing to look at some of the concerns that are being raised by the issues that have come from Bristol.

So we’re in the process of doing that right now, that’s going to take us a little bit more time, but we’ve looked at some in vitro cytotoxicity studies already including the human cardiomyocytes, we don’t see toxicity with IDX184 on those human cardiomyocytes, but we still have to do some additional work there, and as I mentioned the in vivo studies continue to move forward.

And then the last thing, and importantly, one of the things that the FDA has asked us for in this letter is if we were to move forward a risk management plan for cardiac monitoring in future clinical trials. So before we can actually assess what we might do in terms of assessing the future risk, we got to understand what the risk actually is and that’s a big part of the work that we have currently ongoing.

As it relates to 368 remember we had only filed an IND on that, so we hadn’t treat, we had not treated any patients with 368 the IND was in front of the FDA and so that one is a little bit of, it has a little bit of a different flavor than the IDX184 letter in that they want additional toxicology and metabolism preclinical work, and that largely relates to what we’re learning from the Bristol program and what we’ve learned from IDX184.

So we’re going to use the information that we get from Bristol on our own programs to help us understand what we need to look at here for IDX19368. So that really encaptures what we’ve heard formally from the FDA, we’ll work through all these issues, we’ve been working through all of these issues, since we first heard from the agency last month, our guess in terms of a timeline right now it’s going to take us at least the next couple of months to pull this off together and we’ll keep folks up-to-date as we learn more from these programs.

Again just a little bit of a comparison here between IDX184, 368 and BMS-094, there is a lot of questions what is that, that cause the tox, what’s different about your compound versus the other ones, I can tell you at least from a clinical perspective, we do not had a single cardiac SAE in our IDX184 program. In fact, we’ve only had two SAEs in the overall program and they were not cardiac related.

As I mentioned no patients exposed to IDX368, and so as we look at the differences, there are differences on the prodrug, there are, there is a amide that hangs up the prodrug itself, the approach that is being used by the Bristol compound to get into the liver, and then on the base itself or on the actual of the nucleoside part is also a slightly different chemical change there that confers some different toxicities and different characteristics of the compound, so I would characterize these compounds is more different than they are like, and that's something, we're going to have to continue to work through.

So little bit about what we’ve seen with IDX184 so far, as I mentioned we are in the midst of a Phase IIb study, we had a DSMB meeting in July, we did not see any safety or efficacy concerns there, and the study continues on, right now we don't have any patients that are actively being treated with IDX184, the patients that remain on this study right now have all completed their IDX184 portion of the study and are moving through the peg/riba part.

And we’ll have the complete SVR data sometimes next year, when we have the patients that complete the full peg/riba part. This was a 12-week study, randomized, double-blind parallel group, we looked at two doses 50 milligrams and 100 milligrams randomization was response guided Peg-Interferon extension for 12 or 36 weeks with an endpoint of safety and tolerability and a 67.

And what we saw from that study so far at an interim look is from an RVR perspective, we had 63% of our patients achieve in RVR, which is the measurement of four weeks and 73% at four weeks in the 100 milligram arm, where we’ve got even more excited is the patients continued on the therapy at the 12-week mark with the cEVR with 81% of our patients achieve undetectability in the 50 milligram group, while 93% in the 100 milligram group.

And then in the first snapshot, which are the patients that were randomized to the 12 plus 12, which is the 12 weeks of IDX184 peg/riba followed by another 12 weeks of pegylated interferon and ribavirin. Patients in our 100 milligram group four of that were randomized to that and we completed all four of those had achieved an SVR4 and 80% in the 50 milligram group.

So this is very encouraging, but early data and I would make sure that I caveat the fact that those 12 plus 12 patients remember to be randomized you had to have an RVR, so these are extensively are our best performing patients. So that’s not a big surprise there.

So shifting to IDX368, this is the first next-generation program to come out of our extensive program, where we’re looking at the synthesis of a number of new compounds trying to understand the best prodrug, the best sugar and the best base.

And we weren’t setting out to bring another guanosine forward, this is the base that’s used in this compound really IDX368 was the best of what we saw when we looked at preclinical toxicity and the balance of replicon activity. And this had very potent activity pre-clinically, we saw triphosphate generation that looked about as good as we’ve seen with any compound better than anything we’ve seen with any compound currently in clinical development.

And we had very high expectations for this program, obviously, here with the clinical hold, we’ll have to work through some of these non-clinical and pre-clinical issues that the FDA’s ask about, before we can think about what that might look like in the clinic. That being said, we have many new non-G potential clinical candidates that are under evaluation, some of these are not that far behind, where IDX368 was.

So we’re looking, as I mentioned at a very diverse spectrum of these nucleotides. And we’ll have additional INDs throughout the course of next year and these again will be non-2'Methyl G compounds.

So the other program, we have in the clinic right now that has been quite, has been working quite well for us is IDX719, this is our NS5A inhibitor. And pre-clinically, this is a slide that we had, we’ve been showing for the better part of the last six to eight months with genotype, broad genotypic activity in the replicon at somewhere on the order of 2 to 24 (inaudible) across the genotypes. And so I think in HCV, we’ve seen a lot of preclinical data, where you see broad pan-genotypic activity, but when you get to the clinic you see something that’s a little bit different. We were quite happy here to see the drug work in the clinic much like it did in our preclinical assays.

In our three-day proof-of-concept trial in 64 HCV-infected patients, we saw a very nice responses, we also had genotype patients with the genotype 2, 3 and 4 in there. And as you can see we had nice activity across all the genotypes, genotype 2 you’ll see it looks a little bit different than the others and that’s skewed by the fact that about half of the patients in the genotype 2 patient population, we believe there is a preexisting polymorphism there or change in the sequence of the virus that confers resistance of the compound.

And so that’s something, we’ll have to work through, we expect that this exist in about half of the patients with genotype 2 HCV. For the patients in genotype 2 that did respond it’s better than a four log response. So this clearly has a standalone compound, it’s something we pay attention to, but our belief is that this gets rolled into combination therapy that will be less relevant.

Our goal is to combine this with the PI and ribavirin early next year. And we’ll also consider what we need to do here is get IDX719 to a 12-week, in a 12-weeks base, we’ll do that either with the PI or with pegylated interferon and ribavirin, and if we do it with pegylated interferon and ribavirin it could be an interesting study because that’s the situation where again we can go across all of the genotypes and get that information pretty quickly.

Something that’s been lost in the noise of the clinical holds over the last month and a half are the changes to our collaboration with Novartis. In a lot of ways, I think this is may be probably the most important thing for Idenix this year, and that’s that we regain the pipeline rights to all of our compounds in any therapeutic area from Novartis.

So as you remember this was a relationship that we’ve had with them since May of 2003, they do maintain some non-exclusive HCV combination rights and in exchange for our rights back on the entire pipeline, they now the royalties from our HBV program revert back to them, these royalties were running on the order of about $1 million a quarter of about $4 million a year, so not a big give up right there, and I think importantly from a corporate governance perspective, they’ll now have one boards fee, they relinquished all other rights including approval of changes in capital structure and any other strategic decisions, we may need to make and currently have 25% ownership.

From a financing perspective, we finished the second quarter with just under $80 million, and fortunately right on the heels of that of the end of the second quarter, we had a successful capital raise, where we had net proceeds of $190 million, close to $191 million, so this leaves us with a cash balance pro forma at the second quarter of about $260 million, $270 million.

So it puts us in probably from a balance sheet perspective, one of the best cash positions, we’ve been in as a company and so we’ll continue to focus on our HCV strategy moving IDX719 forward and bringing our new Novel next-generation nucleotide prodrugs forward.

And with that, I think we’re going to the Uris room for the breakout, thank you.

Question-and-Answer Session

[No Q&A session for this event]

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