Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) Q3 2017 Results Earnings Conference Call November 7, 2017 8:30 AM ET
Jaren Irene Madden - Senior Director, Investor Relations and Corporate Communications
Adelene Perkins - Chief Executive Officer
Claudio Dansky Ullmann - Senior Vice President, Clinical Development
Lawrence Bloch - President
Jeffery Kutok - Chief Scientific Officer
Katherine Xu - William Blair
Jim Birchenough - Wells Fargo Securities
Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals Conference Call to discuss the Company’s Financial Results for the Third Quarter of 2017. My name is Glenda and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at Infinity’s request.
Now I would like to introduce your host for today’s call, Ms. Jaren Madden, Senior Director of Investor Relations and Corporate Communications at Infinity. Please go ahead.
Jaren Irene Madden
Thank you Glenda and good afternoon everyone. Welcome to today’s call to discuss our recent business progress and review our third quarter financial results. With me here today are Adelene Perkins, Chief Executive Officer; Dr. Claudio Dansky Ullmann, Senior Vice President, Clinical Development and Larry Bloch, President; Dr. Jeffery Kutok, our Chief Scientific Officer is also here to take questions and we’ll open up the call for Q&A following our remarks.
The press release issued this morning details our results and is available on our website at infi.com. Please note that during this call, we may make forward-looking statements about our future expectations and plans including clinical development objectives, the therapeutic potential of our product candidates, our strategic plans and strategies and financial projections. Our results may differ materially from what we project today, due to a number of important factors, including the considerations described in the risk factors section of our quarterly report, on Form 10-Q for the third quarter of 2017 and in other filings, we may make with the SEC. These forward-looking statements represent our views only as of today and we caution you that we may not update them in the future, whether as a result of new information, future events or otherwise.
Now I’d like to turn the call over to Adelene.
Thanks, Jaren. Good afternoon everyone and thank you for joining us. Today, we are pleased to report on our recent progress at Infinity, including advancements we’ve made with IPI-549, our first in class oral selective PI3-kinase gamma inhibitor. The Infinity team is entirely focused on IPI-549 which represents a novel approach within immuno-oncology and is the only selective PI3-kinase gamma inhibitor in clinical development.
As described in two major publications in late 2016 IPI-549 targets and plays a unique role in reprogramming macrophages to reducing new to crack suppressions, promoting an antitumor immune response and overcoming resistance to checkpoint blockade. We are evaluating IPI-549 both as a monotherapy and in combination with our Opdivo a PD-1 immune checkpoint inhibitor, in a multifaceted Phase 1/1b clinical study in approximately 200 patients with advanced solid tumors.
The first two components of the study are monotherapy and combination dose escalation that determine the recommended dose for the second two components of the study for monotherapy and combination expansion. We've made significant progress advancing the clinical trial this year which tests of steady cadence of data readout that starts this Friday and continues through 2018.
As a first in class medicine, the initial and the potential goal of our study was to demonstrate that IPI-549 is well tolerated as a monotherapy at an active dose that can be taken forward in development. To this end we are very pleased to have completed the monotherapy dose escalation portion of the trial with no dose limiting toxicities and no drug related serious adverse events.
Because a maximum tolerated dose with IPI-549 was not reached we declared 60 mg once daily as our go forward monotherapy dose based on both the favorable tolerability profile as well as PK/PD demonstrating complete and sustained suppression of PI3-kinase gamma.
Another important goal for this first portion of the study is to show that IPI-549 induces activation of an immune response particularly meaningful effect given the heavily pretreated and heterogeneous nature of the all-comer solid tumor patient population being treated. We look forward to the presentation of our late-breaking abstract review on the clinical and translational data from the monotherapy dose escalation this Friday November 10, during a call presentation in the new agent session of the Society of Immunotherapy of Cancer or SITC Annual Meeting.
We will also host a reception for analysts and investors Friday morning from 6 a.m. to 8 a.m. Eastern Time. We know it's an start to the day and appreciate you rising early to hear directly from one of our investigators and one of our scientific collaborators. We're encouraged by the data we have generated to date and we look forward to sharing why we, our collaborators and study investigators are enthusiastic about program foundation that's been established.
The execution of the dose escalation portions of the study in 2017 which will enable us to shift our focus to the expansion cohort in 2018 has been made possible by the tremendous effort and support of our investigators, patients, and the Infinity team. We initiated the monotherapy expansion in August and this cohort is already nearly 50% enrolled. We are on track to complete the combination dose escalation this year. And upon declaring the go forward dose for the combination, we will initiate multiple disease specific expansion cohort by the end of 2017.
Our progress with the IPI-549 clinical study in 2017 positions us to our steady flow of data from this trial starting later this week and continuing throughout 2018. First, just be going through the presentation of data from the IPI-549 monotherapy dose escalation especially this Friday, November 10. Second, in the first half of 2018 we expect to report data from the monotherapy expansion portion of the study which importantly will include clinical and translational data compared tumor biopsies.
Third, and also in the first half of 2018 we anticipate data from the completed combination dose escalation of IPI-549 plus Opdivo. Fourth and also in the first half of 2018, we expect to present preliminary data from multiple disease specific expansion cohort evaluating IPI-549 plus Opdivo. And fifth, in the second half of 2018 we expect to update data from the combination expansion cohort with more mature clinical and translational data including insights compared tumor biopsies across multiple types of cancers testing several distinct [indiscernible].
An important feature of our clinical study is the possibility to add additional cohorts in response to evidence of activity so there may also be additional combination cohorts with additional data readouts in 2018. The program has great momentum. We are very pleased with the progress to date and will continue to be driven by the magnitude of the need for better treatment options for patients including for patients who do not respond to existing immunotherapy, could develop resistance to available immunotherapy or who have forms of cancer that typically do not respond well to current immunotherapies. Our experience with IPI-549 suggests that it may have an important role to play in the direct community and warrants the company's continued focus on IPI-549 as we seek to bring better treatments to patients.
And now, I'll turn the call over to Claudio.
Claudio Dansky Ullmann
Thanks Adelene. This morning I will bring first the importance of the progress we have made in our clinical study and outline what we would present at SITC this Friday. IPI-549 is an all new selective PI3-kinase gamma inhibitor in the clinic and represents another approach within the field of immune oncology. Within this field targeting microphages in the new suppressing tumor micro environment is emerging as a compelling approach to reduce immune-suppression. Our preclinical data demonstrates that targeting PI3-kinase gamma with IPI-549 reprograms tumor associated microphages from an M2, or pro-tumor to an M1 or anti-tumor phenotype.
We also demonstrated that IPI-549 overcomes resistance to checkpoint inhibition as well as enhances the activity of checkpoint inhibitors. These preclinical findings provided the rationale for our four-part Phase 1b clinical study. As Adelene mentioned, our study is designed to evaluate the safety, pharmacokinetics and pharmacodynamics of IPI-549 given orally once daily as a monotherapy and in combination with Opdivo in approximately 200 patients with advanced solid tumors.
The monotherapy dose-escalation portion of the trial serves as [indiscernible] for the entire study and we are encouraged that IPI-549 has a strong foundation on which to continue to develop. Our late-breaking abstract is being presented by Dr. David Hong from MD Anderson Cancer Center during the oral session of new agents at SITC on Friday at 2:15 p.m. Eastern Time and will include safety, activity and pharmacokinetics and pharmacodynamics data from 19 patients treated with monotherapy doses of IPI-549 ranging from 10 mg to 60 mg once daily.
Additionally for the first time we will be reporting early translational data from the failed data samples of patients in the monotherapy dose escalation. These studies will serve as an important initial step which will be followed by analysis of two biopsied samples obtained in the expansion cohorts. In addition to their presentation there will be a correspondent clinical and translation poster as well as clinical trends and progress poster presenting the data summary [ph].
Moving on to the progress we are making in the attribution of our study the monotherapy expansion cohort of the trial is enrolling very well and we are nearing completion of the combination dose escalation. Within the combination dose escalation we are currently evaluating IPI-549 dose at 40 mg once daily combined with Opdivo. We anticipate that the last patient currently enrolled in the [indiscernible] class Opdivo cohort will continue the dose limit in toxicity assessment period later this month.
We are looking forward to declaring our recommended combination dose and initiate expansion cohorts because it will enable us to evaluate the activity of IPI-549 plus Opdivo in more homogenous cohorts of patients with specific types of cancer. All our combination expansion cohorts also include mandatory pretreatment and on treatment biopsies. We have selected the fifth specific cohorts to test this hypothesis. For the initial expansion cohorts, non-small cell lung cancer, melanoma, and squamous cell carcinoma of the head and neck, patients must have demonstrated de novo for our [indiscernible] immediate trial anti-PD-1 or anti-PD-L1 therapy. These cohorts represent a direct hit [ph] of our preclinical data which demonstrated that IPI-549 can overcome resistance to check those inhibitors.
Recently in September we expanded our clinical collaboration with Bristol-Myers Squibb to test another hypothesis in our cohort patients with triple negative breast cancer who have not previously received anti-PD-1 or anti-PD-L1 therapy. This cohort enables us to explore the potential of IPI-549 plus Opdivo to improve outcomes for patients with few treatment options that today have shown needed response to checkpoints inhibitor therapy. The addition of market trades, steady approach and success IPI-549 for a tumor that is often infiltrated with large numbers of microphages could promote a more effective anti-tumor response.
This is a very exciting time for the product. The vision of the dose escalation portions of the study is critical to our expansion of the trial to evaluate the IPI-549 in more emerging patient populations with tumor biopsies designed to counteract designs of IPI-549 on the tumor micro environment and correlate the patient benefit with biomarkers of [indiscernible] activation at the tumor level. We look forward to sharing data from the monotherapy dose escalation to first complete result portion of this study with you at SITC on Friday. I hope to see many of you at our Investor Reception that morning.
Now Larry will review our financial results for the quarter.
Thank you, Claudio. The Infinity team is very enthusiastic about IPI-549 which is one of the few oral immune-oncology therapies in the clinic targeting macrophages. Additionally IPI-549 is a first-in-class selective PI3K-gamma inhibitor and we believe this is the only one in clinical development. This has been a foundational year for Infinity and IPI-549. We've made important progress while maintaining strong discipline. We expect to deliver meaningful safety and activity data from all four parts of our clinical study within our current cash runway which extends into the first quarter of 2019.
While this cash flow expectation includes the $6 million payment from Verastem that we received in October following the positive readout from DUO study it does not include the potential $22 [ph] million payment from Verastem upon the first regulatory approval of duvelisib.
I'll now summarize our financial results for the third quarter of 2017. At September 30, 2017 we had total cash, cash equivalents and available for sale securities of $55.6 million compared to $66.2 million at June 30, 2017. This cash balance as of September 30 does not reflect the $6 million payment from Verastem which we received at the end of the third quarter.
Moving on to our income statement, revenue from the quarter were $6 million all of which related to the payment from Verastem for the DUO study meeting the prestats of file criteria. We did not record any revenue during our third quarter 2016. R&D expense for the quarter was $9.3 million compared to $12.8 million for the same period in 2016. The decrease in R&D expense is related to 2016 restructuring activities offset by the $6 million note issued to Takeda in exchange for eliminating our royalty obligation to Takeda for IPI-549.
General and administrative expense was $4.5 million compared to $7.1 million for the same period last year. The decrease in G&A expense was primarily due to 2016 restructuring activities. Net loss for the third quarter of 2017 was $7.1 million for basic and diluted loss per common share of $0.14 compared to net loss of $19.5 million or basic and diluted loss per common share of $0.39 for the third quarter of 2016.
Our financial guidance that we provided in January remains unchanged. We expect 2017 net loss to range from $40 million to $50 million and we expect to end 2017 with a cash and investment balance ranging from $40 million to $50 million. Based on our current operating plans, which exclude additional funding or business development activities, we anticipate that our existing cash, cash equivalents and available for sale securities provide a cash runway into the first quarter of 2019. Importantly, we expect that our cash runway will enable us to generate safety and activity data from all four parts of our ongoing study of IPI-549.
The Infinity team is focused on advancing IPI-549 as we seek to address unmet medical needs in cancer and we are very pleased with the progress we've made so far this year which includes our upcoming SITC presentation of clinical and translational data from the monotherapy dose escalation component of our study.
I hope to see many of you investor in analyst reception Friday morning or have you join us by webcast here, Dr. David Hong will review the data and share his experience in treating patients with IPI-549. Additionally, Dr. Taha Merghoub, a senior author of one of our Nature papers and who serves at the lead laboratory researcher [indiscernible] clinical work at Memorial Sloan Kettering will address the rationale for targeting PI3-kinase gamma signaling and macrophages with IPI-549.
Beyond SITC, our progress this year positions us for data readout throughout 2018 from all components of our study of IPI-549. We look forward to reporting data over the coming year as we seek to meaningfully improve treatment options for patients.
And now, we’re happy to take your questions.
Thank you. [Operator Instructions] And our first question comes from the line of Katherine Xu from William Blair. Your line is now open.
Yes, hi good morning. Thank you for the updates. I’m just curious what kind of data indication that supported the TNBC cohorts initiation and also besides PD-1s what are the sort of the other IO [ph] agents that could be in – to show the current mechanism for 549 whether you could comment on IO [ph] or any other kind of pathway and that will be very helpful? Thank you.
Sure, thanks Katherine. So right now we're focused on the study evaluating IPI-549 with an anti-PD-1m, but we are definitely interested in combining with other immune-therapies. We believe mechanistically and have some preclinical data to show that by virtue of the mechanism on the macrophages that it can be complementary and synergistic with the number of the other checkpoint and co-stimulatory factors.
And so we see 549 as a cornerstone that could be included in the broad range of combination therapies. To your question on the triple negative breast cancer are rationale was that unlike the first cohort which are showing the ability to overcome resistance to checkpoint blockade there are tumor types like triple negative that are [indiscernible] for which responses are not as strong as with other tumor types so that the combination of 549 and a checkpoint inhibitor might increase the response rate in those patient populations.
Thank you and I look forward to seeing you at SITC.
I look forward to seeing your Friday Katherine.
Thank you. And our next question comes from the line of Jim Birchenough from Wells Fargo Securities. Your line is now open.
Hi, thanks for taking the questions this is the [indiscernible] in for Jim. So first question could you give a little more color on what would be the incremental data at the SITC meeting compared with what’s reported last time at AACR?
Sure so at AACR we also provided an update on the monotherapy dose escalation. At that time we had 15 patients who were evaluable. We now have completed the dose escalation, so we have the data on the patients up through the 60 mg once a day. So as Claudio mentioned we have a total of 19 patients, 18 who are evaluable for efficacy and so for all of those 18 patients we will provide an update on the tolerability, the PK/PD, the activity and what we'll be sharing for the very first time is the translational data on all of those patients. And so this is from peripheral blood samples we're looking for evidence of immune activation that's induced by treatment of IPI-545, so that will be the first time we're sharing that data.
Got it. That's very helpful and another question is that I think in the prepared remarks you mentioned for the combination cohorts it will be required that the patient had immediate prior therapy is the PD-1 of which they are resistant to. So just curious for the current dose escalation cohort what would be the proportion of patients who actually fit that criteria?
Yes, so the requirement, the enrollment criteria that patients had immediately progressed on a checkpoint inhibitor applies to the extension cohort. It is not one of the inclusion criteria for the dose escalation, so we have a mix of patients with respect to their prior PD-1 exposure and we will be at presenting at on Friday.
Got it and last question…
Is there anything you want add Claudio? No, okay.
Right, sorry, last question is for the dose, for the combination escalation cohort to start I think before year end is there any really item, for example do you have to see any data from the dose expansion monotherapy cohort to initiate it's a combination escalation study?
No, so the key gating factor to initiating that combination expansion cohort is determining the appropriate dose to take forward and that will come from that combination dose escalation and much like we did with the monotherapy we'll be looking for that sweet spot where we have a combination dose in which it's well tolerated, we have full suppression of PI3-kinase gamma and we have - believe that we have activation 549 induced activation of immune response and that will allow us to declare the right dose to go forward.
Thank you, guys very helpful.
Thank you. [Operator Instructions] And our next question comes from the line of Anupam Rama from JP Morgan. Your line is now open.
Hey guys. It's Eric [ph] in for Anupam this morning. Thanks for taking the questions I'm looking forward to seeing data Friday. I guess it's either we're also going to get some updates for PD-1 combination approach is that also focused on macrophage modulation particularly some CSF-1Rs?
I'm just wondering how you're thinking about potential read through there to the approach being taken with 549 given that you are taking similar tax and much alighting macrophage involvement, but with slightly different mechanistic approaches?
And then secondly, as we think about combination - data from the combination Parts of the trial in 2018 I'm just wondering how we should be thinking about or whether we should be thinking about separate presentations from the dose escalation portion versus the expansion cohorts and whether there are any kind of particular tumor histologies that you're kind of focused on enrolling as we think about initial data from the expansion cohort? Thanks.
Sure, so I'll begin and then if Jeff you have anything to add. IPI-549 is unique in that Jeff work with our collaborators have shown that we reprogram the M2 pro tumor macrophages to the M1 anti-tumor and if unique relative to other macrophages targeted approaches where we see depletion of macrophages from the tumor microenvironment and we believe that the conversions from the M2 to M1 while maintaining a constant number of macrophages is preferable to some of the other macrophage targeting approaches. Jeff is there anything you would add to that?
No, I think that’s right Adelene.
Okay and then on your second question about the data in the first half of 2018 we will have - the difference between the dose escalations and the expansion is that the dose escalation will be completed so it will be completed data set that will be revealing the dose that we're taking forward based on the tolerability, the suppression of PI3-kinase gamma and as reflected through the PK and PD.
The data on the expansions will be in a more homogeneous patient population because the dose escalation is all-comers solid tumors and one of the real values of going into the expansion cohorts is that we will be evaluating patients with the diseases that Claudio highlighted for patients who have become resistant to checkpoint inhibition that will be non-small cell lung cancer, melanoma and head and neck and then patients who are checkpoint naive it will be triple negative breast cancer and those extension cohorts will have the paired tumor biopsy. So we haven’t determined which meetings those will be the presented at. It will be a function of the maturity of the data, but the data sets will be different.
Claudio Dansky Ullmann
Yes, I would like to clarify further to your question. So all the cohorts will be authored simultaneously, so we’re not going to focus on a particular tumor type in our - up from all the sites and our investigators we already are working with them very closely to make sure that we've had a good flow of patients for all the indications and that's what we're trying to achieve together and enroll as many patients in each indication as possible, and then we will see what the data shows and will decide as Adelene was referring to you know what amount of data we will be able to present in the first half of next year.
Got it, great. Thanks for taking the questions.
Thank you. At this time I'm showing no further questions. I would like to turn the call back over to Adelene for closing remarks.
Thank you. We're very excited about the opportunities we have with IPI-549 and our team is working with a great sense of urgency and focus. We report providing new clinical and translational data from our Phase I study later this week and hope you'll join us in person or by the webcast for our review of the data on Friday morning. Have a good day everyone and thanks for joining the call today.