Infinity Pharmaceuticals, Inc. (INFI) CEO Adelene Perkins on Q2 2019 Results - Earnings Call Transcript

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Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) Q2 2019 Earnings Conference Call July 30, 2019 8:00 AM ET

Company Participants

Jayne Kauffman - Senior Executive Coordinator

Adelene Perkins - CEO

Lawrence Bloch - President

Sam Agresta - Chief Medical Officer

Jeff Kutok - Chief Scientific Officer

Conference Call Participants

Matthew Bannon - J.P. Morgan

Kevin DeGeeter - Oppenheimer

Soumit Roy - JonesTrading

George Zavoico - B. Riley FBR

James Molloy - Alliance Global Partners

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals Conference Call to discuss the Company's Financial Results for the Second Quarter 2019. My name is Amanda and I'll 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 the call is being recorded at Infinity's request.

Now, I would like to introduce your host for today's call, Jayne Kauffman. Please go ahead.

Jayne Kauffman

Thank you, Amanda, and good morning, everyone. Welcome to today's call to discuss our recent business progress and review our second quarter 2019 financial results. With me here today are Adelene Perkins, Chief Executive Officer; Lawrence Bloch, President; Dr. Sam Agresta, our Chief Medical Officer; and Dr. Jeff Kutok, our Chief Scientific Officer.

We will 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 actual results may differ materially from what we projected today due to a number of important factors, including the considerations described in the Risk Factors section of our Annual Report on Form 10-Q for the second quarter of 2019 and in other filings we 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 would like to turn the call over to Adelene.

Adelene Perkins

Thanks, Jayne and thank you to everyone for joining us today. At the beginning of this year, we highlighted that 2019 as a year of execution. As we expand the development of IPI-549 into earlier lines of therapy, new indication and novel potentially transformative immuno-oncology combination.

Today, I’m pleased to report that we’ve made important progress in initiating new trials over the last quarter, keeping this fully on track to achieve these objectives. In the past few months, we’ve worked diligently to ensure the successful and timely execution of our two Phase 2 combination trials of IPI-549. Yesterday, we announced that we have initiated MARIO-275 with our partner Bristol-Myers Squibb.

MARIO-275 is a Phase 2 trial of IPI-549 in combination with Opdivo in immuno-oncology naïve platinum refractory advanced urothelial cancer patients. In addition, we are initiating MARIO-3 with our partner Roche Genentech this quarter. MARIO-3 is a Phase 2 study of IPI-549 in combination with Tecentriq and Abraxane as a frontline treatment in patients with triple negative breast cancer and in combination with Tecentriq and Avastin as a frontline treatment in renal cell cancer. These are significant milestones for positioning us to generate compelling clinical data in a range of setting in combination with several best-in-class emerging standards of care and with validation and support from industry leaders in immuno-oncology drug development and commercialization.

Our Phase 2 clinical development strategy and our specific trial design were informed by our existing IPI-549 clinical and translational data from area one as well as from clinical data and exploratory analyses of our partners data. With these data, we identified and prioritized the best clinical development we have for IPI-549, which are represented by the new Phase 2 trials we are now initiating in areas where there is both a critical unmet need and data that suggest IPI-549 has the potential to offer a meaningful benefit for patients.

We expect to complete enrollment in MARIO-1 this year and we will provide any further interim update on the trials as they give rise to additional development path before presenting the final data assumes the clinical and translational analyses are complete. In addition to the trials we're conducting at Infinity, our partner Arcus Biosciences plans to initiate development of IPI-549 in novel triple combination therapy with their adenosine inhibitor AB928 and Doxil in patients with relapse refractory triple negative breast cancer in the third quarter of this year.

We're encouraged that we've been able to expand our development of IPI-549 into new indications and earlier lines of treatment and are pleased by the excitement we’ve seen building in the scientific and medical communities about the potential of the immunosuppressive macrophage approach to I/O treatment, particularly in light of recent clinical progress in the field including our own. We're committed to following the science and developing IPI-549 in the indications where it can improve upon the current standard of care and where we believe it can provide the most profound benefit to patients.

We are building on the trial initiation momentum we established in the first half of the year as we now turn our focus to trial execution in the second half of this year. We are keenly aware that patients are waiting and were driven by the magnitude of the unmet need for better treatment options. The more clinical experience we gain with IPI-549, the more confident we are that it can play an important role in improving patient outcomes.

With that, I'll turn the call over to Sam to speak to the status of our clinical development plan in more detail.

Sam Agresta

Thanks, Adelene. Bristol-Myers Squibb and Roche Genentech has been fantastic collaborators in expanding the development of IPI-549, particularly with regards to sharing data and strategic insights. Armed with these insights, we moved with a great sense of urgency in initiating MARIO-275 and MARIO-3. MARIO-275 is now open. This is our Phase 2 study of IPI-549 in combination with Opdivo in patients with immuno-oncology naive, platinum refractory advanced urothelial cancer in collaborations with Bristol-Myers Squibb.

The goal of MARIO-275 is to address the unmet medical need for bladder cancer patients with high baseline levels of MDSCs. Bladder cancer patients with high baseline levels of MDSCs had a shorter overall survival when treated with Opdivo as a single agent based on a retrospective analysis of BMS's approval study CheckMate-275. Data from MARIO-1 demonstrated that the combination of IPI-549 and Opdivo treatment is associated with a reduction in blood MDSC levels. And therefore, our hypothesis is that adding 549 to Opdivo can potentially improve outcomes for these bladder cancer patients.

MARIO-275 is a global randomized study of 150 patients being conducted in approximately 45 sites in both the U.S and Europe. The primary endpoint is the object of response rate in the MDSC high cohort of the study comparing IPI-549 plus Opdivo to Opdivo plus placebo. The study will enroll all patients regardless of PDL-1 status and will stratify the patients by MDSCs status at a ratio of 2 to 1, high to low in both arms of the study.

Importantly, we are also evaluating the benefit of the combination in bladder cancer patients in those study independent of both MDSC and PDL-1 status. MARIO-3 remains on track and will open this quarter. This is our Phase 2 study, which includes two cohorts of frontline patients. 160 patient cohort in frontline triple negative breast cancer evaluating IPI-549 in combination with Tecentriq and Abraxane and a second cohort of 30 patients in frontline renal cell cancer evaluating IPI-549 in combination with Tecentriq and Avastin. This study is being conducted in collaboration with Roche Genentech.

The goal of MARIO-3 is to address the unmet medical needs for both patients with triple negative breast and renal Cell Cancer. Tecentriq and Abraxane was approved for frontline treatment of PDL-1 positive triple negative breast cancer patients based on the IMpassion130 study. Tecentriq and Avastin was evaluated in frontline renal cell cancer patients in the IMmotion151 study.

The safety profile of IPI-549 enables the evaluation of triple therapies, so we are evaluating healthy addition of 549 to these doublet regimens and improve upon the benefit for frontline patients. We're initially evaluating the benefit of combination, independent of the MDSC and PDL-1 status. However, we will carefully -- we will be currently evaluating these parameters and how they relates to clinical activities throughout the course of the study.

MARIO-3 is a multi-cohort study of 90 patients being conducted in approximately 25 sites in the U.S. The primary analysis will be a complete response rate in both components of the study, which were less than 10% in the IMpassion and IMmotion studies. As I mentioned, the study will enroll all patients agnostic of PDL-1 status and the MDSC level.

MARIO-1 is our Phase 1b study evaluating IPI-549 plus Opdivo in combination expansion cohorts of the -- of advanced solid tumor patients. These cohorts include patients with checkpoint inhibitor refractory melanoma non small cell lung and head and neck cancer. This study is on track to complete enrollment by the end of this year. In addition, Arcus Biosciences is on track to initiate the evaluation of IPI-549 in novel triple combination therapy with their adenosine receptor inhibitor AB928 and Doxil in patients with relapsed and/or refractory triple negative breast cancer this quarter.

This is a checkpoint inhibitor free Phase 1 study, which will evaluate the safety of the triplet in approximately 15 patients. I’m very excited with the progress we've made over the course of the last year. The team at Infinity has done a tremendous job in keeping MARIO-1 on track executing on MARIO-275 and 3 and working with BMS, Roche Genentech and Arcus. Because of their hard work, IPI-549 is well-positioned to be evaluated in treatment through multiple lines of therapy, which includes frontline standard of care and Novel/Novel combinations, and in indications which include bladder cancer, triple negative breast cancer and renal cell cancer.

We expect to provide guidance on the anticipated completion of enrollment of these studies in early 2020, at which point we'll have a better sense of the timing around potential data readouts for both trials.

With that, I'll turn the call over to Larry.

Lawrence Bloch

Thank you, Sam. As you can tell, we are working hard to prepare for the initiation of our Phase 2 study for IPI-549 building on the foundation of the clinical and translational results for MARIO-1 Phase 1b study. We maintain worldwide rights to IPI-549, while also ensuring that we have the resources in place for the expanded next stage of its development, including for our clinical collaborations with Bristol-Myers Squibb, Roche Genentech as well as Arcus.

As of June 30, 2019 we’ve total cash, cash equivalents and available for sale securities of $63 million compared to $70.5 million at March 31, 2019. R&D expense in the second quarter of 2019 was $6.1 million compared to $3.7 million for the same period in 2018. The increase in R&D expense was largely related to an increase in clinical and development activities for IPI-549. General and administrative expense was $3.8 million for the second quarter 2019 compared to $3.4 million for the same period in 2018.

In the first quarter of 2019, Infinity recognized $30 million in gross cash proceeds received from the Copiktra royalty monetization and recorded it as a liability on the balance sheet in accordance with accounting guidance for royalty monetization. The company is amortizing the liability to non-cash interest expense on a quarterly basis. And for the second quarter of 2019, this non-cash interest expense was $1.1 million.

Net loss for the second quarter of 2019 was $10.5 million, or a basic and diluted loss per common share of $0.18, compared to a net loss of $7 million, or a basic and diluted loss per common share of $0.12 for the same period in 2018. Our financial guidance remains unchanged.

We expect 2019 net loss to range from $40 million to $50 million and we expect to end 2019 with the cash and investment balance ranging from $40 million to $50 million.

Based on our current operating plans, which exclude additional funding our business development activities, we anticipate that our existing cash, cash equivalents, and available for sale securities will provide cash runway well into the second half of 2020. 2019 continues to be a very strong year focused on execution on all IPI-549 clinical studies and we look forward to updating you on our continued progress in the balance of the year.

At this time, we will open the call for questions. Operator?

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question is from the line of Anupam Rama of J.P. Morgan. Your line is open.

Matthew Bannon

Hey, guys. This is Matt on for Anupam. Thanks so much for taking our question and congrats on all the execution this quarter. Just two quick ones from us. On the Phase 1 trial with Arcus, when do you think we might see some potential data from this non-checkpoint triple and will these announcements come jointly from both you and Arcus? And then, on MARIO-275, I think you mentioned this can be 40 global sites. Can you just remind us how many of these are currently up and running? Thanks so much.

Adelene Perkins

Sure. Thanks, Matt. With Arcus, like all of our Phase 2 studies, we will wait until they’ve been up and running for a little while so that we have really good information on the enrollment cadence, so that we can provide more accurate guidance on both the completion of enrollment and data presentations. And so we would expect with our 2020 goals that we announced at New York conference at the beginning of the year, we will probably provide -- we expect to be providing guidance on both completion of enrollment and potentially for data readout timing on all of our Phase 2 studies as well as the Phase 1 with Arcus. And on MARIO-275, we don't usually go into the detail of exactly how many sites are open. We -- what we have announced today is that the study has been opened and we will be continuing to add to the sites that are opened until we get to the full 40.

Matthew Bannon

Okay. Sounds good. We will stay tuned.

Adelene Perkins

Great. Thanks, Matt.

Operator

Thank you. Our next question comes from the line of Kevin DeGeeter of Oppenheimer. Your line is open.

Kevin DeGeeter

Hey, great, guys. Thanks for taking my question and congrats on the progress as well. Just maybe two for me. We did see some interesting data earlier this week from the key note 522 study. You’re looking at [indiscernible] neoadjuvant that incur for triple negative breast cancer. Can you just talk more generally, if we do see a positive read out in MARIO-3 kind of where the potential opportunity is to expand 549 triple negative breast cancer could go next, whether that’s with Roche or with other partners?

Adelene Perkins

Sure. I will start it and then turn it over to Sam. So, our MARIO-3 study combining Tecentriq and Abraxane with IPI-549 is in frontline triple negative breast cancer patients. So it's really designed to build upon the IMpassion130 data where they got approval in frontline, and as Sam mentioned in his remarks, had a complete response rate of less than 10%. So we're -- our primary endpoint is complete response rate to see if we can increase the number of complete responders. And if so, the natural place to go would be in the frontline building on that exact data set. Sam, you can elaborate further.

Sam Agresta

Sure. This is Sam. Thanks for the question. I think that MARIO-3 also includes both PDL-1 positive and negative patients. So the goal where we can go with that data is we can -- the intent would be to expand the label to include PDL-1 negative patients, that’s different from most indications -- well, from this indication with Tecentriq and Abraxane. I think how that can translate into other indications is can we look at more broader indications with regard to PDL-1 status as we look at triple therapies in frontline. If there is -- I’m not concerned about adjuvant use of checkpoint inhibitors and frontline use of checkpoint inhibitors, given typically when you give adjuvant therapy you have to wait quite some time for patients to progress and then retreat in frontline, therefore they will still be -- checkpoint inhibitor regimens will be useful in frontline breast cancer -- frontline triple negative breast cancer even with the [indiscernible] data, if that makes sense.

Kevin DeGeeter

That was extremely helpful. And then maybe just one more for me, and maybe more directed to Larry. The company has been very effective at monetizing various assets, royalties here across the board. Can you just kind of maybe walk through for us what opportunities may still be out there to bring additional capital into the company, short of geographic licenses for 549?

Lawrence Bloch

Sure. So as you pointed out, we’ve -- maybe quantitatively we’ve raised less than $10 million in equity since the end of 2012 by leveraging partnerships access to the debt facilities and monetizing assets, such as the recent monetization of the -- deal with the royalty stream. And as you pointed out, there's potential for nonstrategic geographic licenses and we additionally have license in 2013, a hedgehog program for growing syndrome to company called PellePharm, who has recently started there Phase 3 study in a genetically defined patient population. And so that’s another opportunity for non-dilutive financing as you pointed out. And in meantime, we’ve been able to expand as Sam just reviewed, [indiscernible] IPI-549 investments to include four clinical studies encompassing now approximately 500 total patients to be enrolled. So we really feel like we're making really extremely robust investment in 549, while also being very physically prudent.

Kevin DeGeeter

Great. Thanks for taking my questions.

Operator

Thank you. Our next question comes from the line of Soumit Roy of JonesTrading. Your line is open.

Soumit Roy

Good morning, everyone and congrats again on the execution. Just have -- not sure if I missed it. Are we still on track to see some of the MARIO-1 detail second half of this year, maybe later this year. And if we are, can you provide any more clarity on what we're going to see there in terms of I assume these are all very late line patients. So rather than the response rate focusing on the response rate are we going to be able to see, [indiscernible] BFS or more detailed translation data [indiscernible] things like that?

Adelene Perkins

Sure. Thanks, Soumit. So as you correctly point out, our MARIO-1 study was designed to treat patients with the combination of 549 and Opdivo in patients that would not be expected to respond to Opdivo mono-therapy cell. So the global really was looking for any responses which would be a good reflection of activity of IPI-549. And that data to date has informed the studies that were now initiated. What we’ve said regarding the additional analyses, if we do any additional interim, it will be associated with a new trial that we're starting to share the rational for any additional trials that we add to the current portfolio of trials underway. If -- in the absence of that, we will present the final analysis study once we have all the clinical and translational data complete. We are expecting to complete the enrollment of MARIO-1 this year. So we will certainly be presenting the final analysis once we’ve it. But if possible, we will do some interim updates if we decide to start new trials out of that study data.

Soumit Roy

Just to be clear, so when should we expect any update like when will we know if there will be any interim updates later this year or not in the 3Q earnings or …?

Adelene Perkins

That’s possible. Yes, Q3 maybe a time if we’re going to be presented by data by the end of the year knowing that timeframe.

Soumit Roy

Got you. Thank you so much and congrats again.

Adelene Perkins

Okay. Thanks, Soumit.

Operator

Thank you. Our next question comes from the line of George Zavoico of B. Riley FBR. Your line is open.

George Zavoico

Hi. Thanks and good morning everyone. Nice to see the trials taking off. And I just have a couple of questions. Could you just review a little bit how the [indiscernible] the combination trials of version BMI [ph] are going to be shared? Are they just providing drug or they providing also resources and other resources in logistics? Thank you.

Lawrence Bloch

Thanks, George. This is Larry. So, all of our trials to date have been designed with really two intents. One is to follow the preclinical signal that Jeff laid out in the [indiscernible] articles and then that Sam has been delineating to MARIO-1. And the business intent is being to retain a 100% of worldwide rights to 549. So consistent with that, we have certain place these arms length collaborations. So with Roche Genentech and BMS, it's really they’re providing two critical assets. One is access to their lead programs. And then, secondly, the confidential information from the development of those programs has really enabled us to -- and Sam's team to design these studies in the most -- with most insight and it was an efficient execution. And then Arcus collaboration were co-funding those -- that trial with the triple combination. So that’s enabled us again to a very cost efficient way, enabled 500 patients of [indiscernible] studies, while retaining all [indiscernible] to 549.

George Zavoico

Can you leverage the previous experience with Tecentriq and Opdivo by using some of the same clinical sites that ran those previous trials that informed these current ones?

Sam Agresta

Yes. George this is Sam. Yes, we can.

George Zavoico

Okay. That’s helpful.

Adelene Perkins

In essence it's been very helpful in lots of details about both the design of the study, which helped Sam and team on the stats and the powering of the study as well as the execution and site collection.

Sam Agresta

As well as Genentech.

George Zavoico

Wonderful. And then as a follow-up to that, with the Tecentriq do you have the same sort of, I guess [indiscernible] data that was provided with Checkpoint 275 and then [indiscernible] internal paper that showed a big difference in response rates and survival whether there were MDSC higher, MDSC lower, is that kind of data also available for Tecentriq trials.

Sam Agresta

Wait, I’m -- George this is Sam. I’m not going to comment on the specifics of why Genentech or BMS is provided with us. But the caveat is that they’ve been strategically very helpful in the designs based on the data they both have presented and what is confidential to them.

Jeff Kutok

Yes. So are we’ve been able to refer directly to the CheckMate-275 retrospective data is because that was published by [indiscernible] at ACR last year. But we absolutely respect the confidentiality of the information that we’ve been [indiscernible] regarding their programs that have not yet been made public.

George Zavoico

I didn’t see that. So I figure that what’s probably what the case is and I respect, obviously your intent to keep that confidential until those -- probably decide to publish if they do. And finally with regard to your finances, you ended -- you’re saying you’re going to end the year with $40 million to $50 million and your net loss is $40 million to $50 million, but you ended this year with $63 million. So there's a little bit of a difference there that is accounted for. Do you have some other revenue stream that you’re anticipating in that period before the end of the year?

Lawrence Bloch

No, we are -- our guidance is that we -- at the end of Q2, we’ve $53 million and the year was $40 million to $50 million and our guidance does not presume any additional financing or development activity.

Adelene Perkins

But, George, in the first quarter as you know, we did received $30 million from monetization of our Copiktra royalty stream. So that's how we can have a loss of $40 million to $50 million and still finish the year with $40 million $50 million.

George Zavoico

Okay. Okay. Thank you for that. Okay. Looking forward to the next data readout. Good luck.

Sam Agresta

Thank you, George.

Adelene Perkins

Okay. Thank you.

Operator

Thank you. And our next question comes from the line of James Molloy of Alliance Global Partners. Your line is open.

James Molloy

Hi. Thanks for taking my question. I had a question, we were discussing the last time we chatted about expectations for an FDA whitepaper here on sort of immuno-oncology clinical trials coming out here at some time in the second half of this year. Could you speak a little bit to what you guys anticipate the scene in that whitepaper and how it may impact -- how you’ve designed your trials or maybe some of the trial designs across the competitors [ph] in general?

Sam Agresta

Sure. This is Sam. Thanks for the question. I believe the whitepaper you’re speaking to is the effort with the FDA and -- a melanoma group of PIs defining what it means to be checkpoint and -- checkpoint inhibitor refractory. With the intent of setting some guidelines for drug developers not only ourselves in defining a regulatory standard for an unmet medical need in patients who are checkpoint inhibitor refractory given all of the studies that have been going on in the space. So, I -- what I don't want to do is common around the details of the whitepaper, because I haven't seen it. I know that what I would expect to see by the end of the year is guidelines around that and I think that will augment -- that will help not only us, but others in defining more clearly from a regulatory perspective what it means to be checkpoint inhibitor refractory. My feelings and these are my feelings around MARIO-1 is -- our bar is likely higher given we've required patients to be refractory with documented [indiscernible] for a vast line of therapy prior to coming on MARIO-1 with a checkpoint inhibitor. That part to me, I can't expect -- I don't expect the whitepaper to define higher bar, but I do think that would be very specific with regards to that, how much checkpoint inhibitor therapy the patients will have received and other inclusion criteria. So drug developers like ourselves can look at our studies and future studies and align with the FDA expectations.

Jeff Kutok

Jim, to your point that, we think that having this regulatory clarity that we anticipate that don't have any direct knowledge of exactly how it's being formulated will be really helpful in forming our thinking, for example, of how we might leverage going forward basis the melanoma data that Sam's team has been generating in MARIO-1, because as he said, we think that has been generated under arguably the highest possible standards for refractoriness and future studies it would be very helpful for us to be able to align those with the regulatory standard.

James Molloy

Great. And I know you guys are very clear that, you’re the -- you’re coming on with IPI-549 on immediate prior checkpoint inhibitor failure and its obviously in a number of studies out there that’s [indiscernible] some are not. Do you think that will become the standard, the gold standard for an actual checkpoint failure?

Jeff Kutok

So what -- I’m sorry, that the guidance with the whitepaper will provide?

James Molloy

Yes. Would you think the guidance will be -- it has to be in an immediate -- yes.

Jeff Kutok

Yes, I think that will provide insight into what it means to be checkpoint inhibitor refractory from a regulatory standard to run studies in late line cancers. Think it about where checkpoint inhibitors are ending up i.e. frontline and most likely very late line. So we will provide a lot of insight for us not only melanoma, but non small cell lung and that’s where we’re also looking at checkpoint inhibitor refractory patients.

James Molloy

Okay. Any thoughts on the timing on the [indiscernible]?

Jeff Kutok

I really don’t want to comment. I mean, hopefully by the end of the year what dovetail nicely with us and data and complete enrollment for MARIO-1, that I don't want to comment on FDA and …

Sam Agresta

[Indiscernible] FDA will do it for us, for our convenience, but they’re looking from a industry-wide perspective, but we will be certainly very interested observers as it becomes available.

James Molloy

Understood. Thanks for taking the questions.

Sam Agresta

Thank you.

Adelene Perkins

Thank you.

Operator

Thank you. And at this time, I’m showing no further questions. I would like to turn the call back over to Adelene for any closing remarks.

Adelene Perkins

Thank you, Amanda. We are very excited about the opportunity we’ve with IPI-549 and we look forward to providing additional updates as our trials progress. So thank you for joining us today and hope everyone enjoys the rest of your summer.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.

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