Syndax Pharmaceuticals, Inc. (SNDX) CEO Dr. Briggs Morrison on Q4 2020 Results - Earnings Call Transcript

Syndax Pharmaceuticals, Inc. (NASDAQ:SNDX) Q4 2020 Results Conference Call March 8, 2021 4:30 PM ET

Company Participants

Maghan Meyers - Argot Partners

Dr. Briggs Morrison - Chief Executive Officer

Daphne Karydas - Chief Financial Officer

Michael Metzger - President, Chief Operating Officer

Dr. Michael Meyers - Chief Medical Officer

Dr. Peter Ordentlich - Chief Scientific Officer

Conference Call Participants

Philip Nadeau - Cowen & Company

Bert Hazlett - BTIG

Konstantinos Aprilakis - Stifel

David Lebowitz - Morgan Stanley

Justin Walsh - B. Riley Securities

Peter Lawson - Barclays

Operator

Good day, everyone, and welcome to the Syndax Fourth Quarter and Full Year 2020 Earnings Conference Call. Today's call is being recorded.

At this time, I would like to turn the call over to Ms. Maghan Meyers of Argot Partners. Please begin.

Maghan Meyers

Welcome, and thank you to those of you joining us on the line and the webcast this afternoon for a review of Syndax' fourth quarter 2020 financial and operating results. I'm Maghan Meyers with Argot Partners. And with me this afternoon to discuss the results and provide an update on the Company's progress are Dr. Briggs Morrison, Chief Executive Officer; Daphne Karydas, Chief Financial Officer; also joining us on the call today for the question-and-answer session is Michael Metzger, President and COO; Dr. Michael Meyers, Chief Medical Officer; and Dr. Peter Ordentlich, Chief Scientific Officer.

This call is being accompanied by a slide deck that has been posted to the Company's website, so I would ask you to please turn to our forward-looking statements on Slide 2. Before we begin, I would like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section on the Company's most recent quarterly report on Form 10-Q as well as other reports filed with the SEC. Any forward-looking statements represent our views as of today, March 8, 2021 only. A replay of this call will be available on the Company's website, www.syndax.com, following this call.

With that, I'm pleased to turn the call over to Dr. Briggs Morrison, Chief Executive Officer of Syndax.

Dr. Briggs Morrison

Thanks very much, Megan, and thank you to everyone for joining us on today's call and webcast. Slide 3 provides a high-level summary of our current corporate priorities as we strive to realize a future in which people with cancer live longer and better than ever before. 2020 was a transformational year for Syndax. Over the course of the year, we've made great progress in our two clinical stage programs, both of which are on track to be in registrational programs this year. Thanks to the support of our many committed investors, we ended the year well financed to vigorously pursue both of our existing programs and to aggressively look for additional opportunities to bring target oncology drugs into our pipeline.

Let's now turn to Slide 4 and SNDX-5613, our genetically targeted agent for the treatment of leukemia. As we've noted previously, there's extensive validation of both MLL-r and NPM1 mutations as molecular targets in leukemia and well-established diagnostic tests who daily identify patients with these genetic mutations. Premier publications provide a scientific rationale and preclinical validation of our ongoing clinical trial and historic precedents support a rapid regulatory path for such targeted agents in acute leukemias.

Slide 5 briefly summarizes the ongoing AUGMENT-101 trial, the first-in-human Phase 1/2 trial in the accelerated understanding of Menin or AUGMENT program. Consistent with what we communicated on our last call, we are on track to present the completed Phase 1 portion of the trial in the near future and to start the Phase 2 expansion cohorts soon thereafter. We have received several questions about the upcoming data disclosure, and so I just want to provide some guidance.

Our intent is to present the completed Phase 1 trial. The primary objectives of Phase 1 are to determine the safety, tolerability, the maximum tolerated dose and the recommended Phase 2 dose of SNDX-5613 in patients with relapsed or refractory acute leukemia. We anticipate addressing these primary objectives in our data presentation. We will also have characterized the PK parameters of 5613. We anticipate having data for at least 30 patients with relapsed/refractory leukemia.

There will be patients whose leukemia has an MLL-r axatilimab rearrangement. There will be patients whose leukemia has an NPM1c mutation, and there will be patients whose leukemia has neither of these genetic lesions. Although clinical efficacy is not an objective of the Phase 1 trial, we anticipate summarizing the efficacy that has been observed. We anticipate that the data will be presented by the principal investigator of the AUGMENT-101 trial.

Dr. Eytan Stein from the Memorial Sloan Kettering Cancer Institute, an extremely well-respected international expert in the field of adult leukemias, who has extensive experience developing novel, targeted agents. Dr. Stein's presentation will be similar in content to a typical presentation at a scientific congress such as ASH and the opportunities for Q&A. We are working with Dr. Stein to find a suitable date but anticipate securing a date prior to the end of April.

We have, of course, been busy preparing for the Phase 2 portion of the trial, which will enroll three distinct expansion cohorts each of which consists of a specific, genetically defined, relapsed or refractory acute leukemia, and which is on track to initiate over the next couple of months.

The three cohorts will include patients with MLL-r, acute lymphoid leukemia, ALL, patients with MLL-r, acute myeloid leukemia, AML, and patients with NPM1 mutant AML. The Phase 2 portion will further characterize the safety of 5613 and will provide a robust estimate of the complete response rate as the primary measure of therapeutic benefit.

The Phase 2 portion will enroll both pediatric and adult patients, thereby providing us a potential path to regulatory approval with a broad label, including both adults and pediatrics. I should note that if the results are positive, this Phase 2 portion of AUGMENT-101 could potentially support a regulatory filing given existing regulatory precedents. Over the last period, we've also been conducting extensive research into the broad landscape of clinical opportunities for 5613 beyond the initial approval and relapsed/refractory acute leukemias as illustrated on Slide 6.

While we are not in a position today to lay out the specific next steps in building out the 5613 franchise, I can say that we are using this ongoing analysis to inform specific combination regimens that we anticipate starting the study later this year. Several investigators and leading companies have already reached out to us with novel exciting ideas for future development of SNDX-5613, and we are evaluating those opportunities.

Let me now turn to Slide 7 and axatilimab, formerly known as SNDX-6352, our potentially best-in-class monoclonal antibody therapy targeting the CSF-1 receptor. As you know, we recently presented our Phase 1 chronic graft-versus-host disease data at ASH and have initiated our pivotal trial for axatilimabaxatilimabin chronic graft-versus-host disease. This trial is the axatilimab for graft-versus-host disease trial called AGAVE-201 and is outlined on this slide.

The trial will enroll patients with chronic graft-versus-host disease, whose disease has progressed after two prior therapies. Patients must be at least six years of age and have met overall entry criteria. This is a pivotal dose-ranging trial, in which patients will be randomized to one of three treatment groups, each investigating a distinct dose of axatilimab given either every two weeks or every four weeks.

The primary endpoint is overall response rate using the 2014 NIH consensus criteria for chronic graft-versus-host disease. Secondary endpoints will include duration of response and validated quality of life assessments using the Lee Symptom Scale. Enrollment to the study is underway, and we are on track to deliver top line data in 2023.

We believe that chronic graft-versus-host disease represents a high unmet medical need and an important commercial opportunity with approximately 14,000 patients suffering from chronic graft-versus-host disease in the U.S. today. With the recent positive pivotal results from both insights to Jakafi and Kadmon's KD-025, we may soon see regulatory approvals and commercial launches that will begin to delineate the commercial opportunity in chronic graft-versus-host disease.

Despite recent advances in this area, to our knowledge, axatilimab is the only agent in clinical development that specifically targets the monocyte macrophage lineage. We believe the data generated state with axatilimab suggest it has the potential to play an important role in the treatment of chronic graft-versus-host disease, both as monotherapy and given its safety profile, potentially in combination with complementary medicines.

We've also been working extensively with experts in the field of fibrotic diseases, and they found a strong consensus that the scientific rationale for the efficacy of axatilimab in chronic graft-versus-host disease firmly supports its potential in a wide variety of fibrotic diseases such as idiopathic pulmonary fibrosis and scleroderma. We are actively evaluating options by which to build the axatilimab franchise beyond chronic graft versus host disease and take advantage of what we believe are a significant set of opportunities that could materially enhance shareholder value.

Finally, Slide 8 summarizes the actions that led to the acquisition of the Menin MLL-r and axatilimab programs. We believe that we will be able to continue to expand our pipeline through the acquisition or in-licensing of quality differentiated assets. We believe that we have the necessary skills to evaluate and identify high-quality assets and the clinical development experience to bring these campaigns through valuable inflection points. We expect to remain among preferred partners for such transactions.

I'll now turn the call over to Daphne to review our financial results. Daphne?

Daphne Karydas

Thank you, Greg. The results of our operations for the fourth quarter of 2020 and the comparison to the prior year quarter are included in our press release, so I won't repeat them in these remarks. Additional financial details will be available in our fourth quarter and full year report on Form 10-K, which will be filed later this week. I would like to point out that our net loss for the quarter was $20.4 million or $0.44 per share compared to $14 million or $0.44 per share for the same period last year.

Turning to Slide 9. We ended the fourth quarter with $293.1 million in cash and cash equivalents, including net proceeds of approximately $135 million from our public offering completed in December of 2020 and 51.4 million shares and prefunded warrants outstanding. This cash balance provides us cash runway well into 2023 and importantly, covers the full development cost of both axatilimab and the 5613 registration ready programs as well as provides us flexibility for continued business development.

Looking ahead, I'd like to provide financial guidance for the first quarter and full year of 2021. For the first quarter of 2021, we expect R&D expense to be $25 million to $30 million, and total operating expense to be $30 million to $35 million, including approximately $2 million of non-cash stock compensation.

For the full year of 2021, we expect R&D expense to be $90 million to $100 million and total operating expense to be $110 million to $120 million, including approximately $2 million of non-cash stock compensation expense per quarter. We expect first half expenses to be more heavily weighted than the second half, due primarily to the ramp-up in CMC activities for both programs during the first two quarters of the year.

With that, I would now like to turn the call back over to Briggs.

Dr. Briggs Morrison

Thanks very much, Daphne. Let me close the call by again noting that 2020 was a transformational year for our company and we anticipate that 2021 will be no less exciting. We've begun the registrational trial for axatilimab in chronic graft versus host disease and are eager to present our Phase 1 data from the AUGMENT-101 trial in the coming weeks and to start the registrational program for SNDX-5613 shortly thereafter.

We are also getting increasingly excited about the broad franchise opportunities for both programs beyond their initial registrational indications. We believe that 5613 could have broad utility across a wide range of clinical settings in acute leukemia, and axatilimab could represent a broad franchise opportunity in fibrotic diseases. We are comfortable giving our cash on hand that we have the financial resources to aggressively advance our programs and achieve key upcoming milestones.

We also remain optimistic that we can continue to identify and bring in novel molecules to deepen our portfolio. We have a proven track record of delivering on this pillar of our strategy, and I believe this is a core strength of our company. As always, I would like to thank the wonderfully talented team here at Syndax, our collaborators and most importantly, the patients, trial sites and investigators involved with our clinical programs. In addition, I would like to thank our committed long-term investors who are helping us to build this great company.

With that, I'd like to open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from the line of Philip Nadeau from Cowen & Company. Your line is open.

Philip Nadeau

Congratulations on the progress. And Briggs, there's a few for you, just on some of the parameters you’ve laid out for the data we should expect late this month or next month. In terms of arm A versus arm B, you actually didn't give any color there. Should we have any expectations for relative weighting of those arms?

Dr. Briggs Morrison

Phil, thanks for your question. I don't think you've given any guidance on the relative weighting. I think what we anticipate is that we will have a recommended Phase 2 dose for each of the individual arms.

Philip Nadeau

Got it. Okay. And then second, I'm not sure you want to comment on this either. But in the past, you've suggested that MLL-r should be more heavily represented than NPM1 in light of the history of the trial, particularly at some of the heavier [ph] enrolling centers. Is that still your expectation? Or could MLL-r and NPM1 be more evenly balanced.

Dr. Briggs Morrison

No, that's still our expectation that there'll be more MLL-r, again, just to clarify for people, otherwise known as KMT2A rearrangements, but more of the MLL-r KMT2A than NPM1.

Philip Nadeau

Great. And then just last question on the data. How will you present the safety data? I guess, specifically, will you give us the safety results for all the patients who were enrolled or specifically for the Phase 2 dose?

Dr. Briggs Morrison

Both actually. So, we'll present the full safety profile for the entire population that was enrolled and will break out the safety profile for the recommended Phase 2 doses.

Philip Nadeau

Perfect. Then one question for Daphne. Daphne, you mentioned H1 expenses are going to be more heavily weighted than H2. Do you expect Q2 to kind of look similar to Q1? Or is Q1 really going to be the heaviest expense quarter of the year?

Daphne Karydas

Thanks, Phil. So yes, just to clarify, the comment was, we expect the first half expenses to be more heavily weighted than the second half, and we would expect the first two quarters to be similar in cadence.

Philip Nadeau

Perfect. Thanks for taking my question and congrats again on the progress.

Dr. Briggs Morrison

Thanks Phil.

Daphne Karydas

Thanks Phil.

Operator

Your next question comes from the line of Bert Hazlett from BTIG. Your line is open.

Bert Hazlett

Thanks for the update and taking the question. Could you just describe a little bit more Briggs, please, about -- a little bit more about the Phase 2 expansion part of Augment-101? Do you have any sense for the size and scale of each of the individual arms at this point? Do you have any sense for the potential pace of enrollment or the length of enrollment that, that Phase 2 might take?

Dr. Briggs Morrison

Yes. Thanks for the question, Bert. So, the precise size of each of the independent Phase 2 expansion cohortsaxatilimab, again, will be sort of sized on what the sort of null hypothesis is on response rate and what's the alternative. That's still, I think, a final discussion we have to have with FDA. There's sort of a related question of what's the total number of patients that we need from a safety point of view across the three cohorts, including the Phase 1 data. I will emphasize that each of the three are independent, essentially parallel independent Phase 2 cohorts. We could potentially register one or two or all three, but -- and then the second part of your question?

Bert Hazlett

I guess it's dependent upon the first, but the potential length of time enrollment, it might take.

Dr. Briggs Morrison

Yes. We haven't given guidance on the timing exactly to your point. Until we know the precise numbers, it's a little hard to give precise definition of timing. What I would say is, thus far, at least the Phase 1 trial has progressed very, very nicely. And so, it's really just a question of knowing how many patients we need, and then we'll give you guidance on how long we think it will take to enroll.

Bert Hazlett

Okay. And then just a more strategic question with regard to the slide that has multiple commercial opportunities in acute leukemia, multiple pathways. How are you thinking strategically about potential expansion here? Is this an in-licensing effort, which you've been successful at previously? Is this corporate collaboration at some point? Just a general framework for how you're thinking about prosecuting these additional efforts?

Dr. Briggs Morrison

Yes. So, I think the first part is just to lay out where we believe that the drug can be used. And in some cases, that might entail a combination with established therapies that are generic and available, such as chemotherapy, might require or might be enabled by a corporate partnership with somebody who has a drug that we think makes sense combining. But the strategy is, first, let's lay out where we think the best, where the largest unmet medical need is, where there's a trial that we can get done reasonably quickly, and then decide if there is a corporate partner who would want to work with us on that or is it single agent or is there a combination regimen that we could do ourselves?

Operator

Your next question comes from the line of Konstantinos Aprilakis from Stifel. Your line is open.

Konstantinos Aprilakis

So, for the sake of clarity on the size of the 5613 update, we're looking forward to later this quarter or early next. Does the 30 patients include the six patients presented last year, should we expect 30 additional patients or 30 total patients? And where do the compassionate use patients fit in?

Dr. Briggs Morrison

Yes. Konsti, thanks for your question. So it's -- I said at least 30 patients total, so that includes the six that we presented last year. That's the number of patients from the AUGMENT-101 trial. So that does not include the compassionate use patients, and we're discussing with aton of what's the right -- what's the -- whether we focus completely on the Phase 1 trial or we also present some of the data from the compassionate use patients.

Konstantinos Aprilakis

Okay. Perfect. I and then one more quick one. Just you mentioned in your prepared remarks, 5613 combinations at this juncture, if you had to say, what do you think is sort of most promising? It sounds like we're going to get something on that in the near term, but any thoughts at this juncture would be helpful.

Dr. Briggs Morrison

Yes. Again, relative to Bert's question, I think that the first order of business, from our point of view is just to lay out where is the right place to further develop the drug and then see if that requires a combination. Clearly, I think if you were going to do first-line with this agent, there's the so-called population of patients who can tolerate intensive chemotherapy. And so, there might be a regimen where you combine with standard upfront chemotherapy. And then there's the population of patients, the so-called unfit, where they don't get chemotherapy, they get other agents. And so, combining the agents in that space makes sense as well, so we're looking at both patients who are candidates for intensive therapy in patients who are not.

Konstantinos Aprilakis

All right. Perfect. Congrats on the progress.

Operator

Your next question comes from the line of David Lebowitz from Morgan Stanley. Your line is open.

David Lebowitz

Thank you very much for taking my question. When looking at the 30 patients, we'll be seeing towards the end of this quarter, I know there is going to be a certain number of patients that don't have either the MLL-r or NPM1 as the initial trial did have all-comers with leukemia. And I guess my question is, will there be patients beyond the initial cohort that we saw that were -- did not have mutation? And if so, do you know how many at this point? And can the number of, I guess, non NPM1s and MLL-rs be disclosed at this point? Or I guess, to what extent -- how large is the number of the number should we expect?

Dr. Briggs Morrison

Hi, David, thanks for your question. So as you correctly pointed out, when the trial first started, it was an all-comers trial and the data we presented at AACR last year, three of the patients had neither NPM1 nor MLL-r. And the trial as a continued did allow continued enrollment of that population. I think last summer on our August call, we had mentioned that we had refocused the trial to focus only on enrolling NPM1 and MLL-r. So, there will be patients who have neither -- we haven't said specifically how many of those patients they'll be, but there will be some because of that early design of the trial.

David Lebowitz

Thank you for that. And on the initial description of the call, you were referring to the population as acute leukemias. I know we've seen ALL patients, and we're going to see NPM1 patients. So are we going to also see AML patients in the trial?

Dr. Briggs Morrison

Right. So, the -- we will see both ALL and AML. And as you may remember from our AACR presentation, one of the patients had what is known as mixed phenotypic acute leukemia where the leukemia actually has markers consistent with both AML and ALL. So there'll be ALL, AML and at least one mixed phenotypic.

David Lebowitz

Excellent. And I guess my last question would be. I know that there's a competing Menin inhibitor out there. And would you be able to, I guess, compare and contrast what you know and understand about your molecule with their molecule?

Dr. Briggs Morrison

Yes. I mean I don't think -- I'm not quite sure which competitor you're referring to. But it's -- I don't think we're in the position to do a lot of comparing and contrasting the other molecule that's in the clinic. There's actually very little known about the molecule itself. So, I don't think we can say too much about that at this point.

Operator

Your next question comes from the line of Justin Walsh was from B. Riley Securities. Your line is open.

Justin Walsh

Thanks for taking the and congrats on the progress. The cGVHD opportunity is quite intriguing to me. Can you provide any color on how you view that space evolving over the coming years? Specifically, I'm wondering if you think the opportunities growing with the trend towards increased or stem cell transplants or could it be getting crowded with RUX and other drugs going to approval?

Dr. Briggs Morrison

Yes. I'd like our Head of New Product Planning [indiscernible] take that question.

Unidentified Company Representative

Thanks, Briggs. Thanks, Justin, for question. Yes. I think there's a lot of change in that space. As you mentioned, there's a couple of new drugs that are under review for the FDA for potential approval. But I think there's two parts to that answer with the advent of new leukemia drugs that are very promising and helping patients get to transplant, there could be an increase in overall number of patients, who unfortunately then develop chronic GVHD as a consequence of that transplant.

And there's also, I think a lot of underserved patients that exist today with chronic GVHD, who have been treated with therapies that weren't developed to treat that disease and haven't done as good a job as we think axatilimab could do and maybe perhaps some of the other agents in controlling their disease. So, we think that is really going to be a displacement of some of the non labeled agents used off-label to treat chronic GVHD, and there'll be ways to actually maybe better help these patients, better serve these patients and help them live longer and better with their disease.

Justin Walsh

Got it. And I have one follow-up I know that we aren't expecting the top line AGAVE-201 data until 2023, but should we see any data readouts before that or anything this year or maybe next year for the earlier trial?

Dr. Briggs Morrison

Right. So you may remember, we had started a Phase 2 expansion cohort as part of our Phase 1 trial at 1 mg per kg. And it is -- the team is still allowing that trial to enroll while we get AGAVE up and running. So if a site doesn't yet have AGAVE up and running, but still has patients they want to put on trial, we can put a few more on. And it's not clear yet when we're going to present that data, but there may be data on that updated Phase 2 court at the 1 mg per kg later this year.

Operator

[Operator Instructions] Your next question comes from the line of Peter Lawson from Barclays. Your line is open.

Peter Lawson

Briggs, just on the side effect profile you've seen so far for 5603. Does that preclude or point to any particular combination agent that you'd won in presumably frontline?

Dr. Briggs Morrison

Yes. So obviously, we'll present the safety data, I think somebody asked earlier. From what we've seen, it doesn't preclude combining with any of the agents that we would be interested in combining with.

Peter Lawson

And that applies for both kind of arm A and arm B?

Dr. Briggs Morrison

Well, it applies to the so-called chemo eligible patients and the unfit.

Peter Lawson

Got you. Okay. And then as you move from Phase 1 into Phase 2, do you expect any changes in endpoints? Or how should we think about the, I guess, the inclusion/exclusion and how they potentially change from Phase 1 to Phase 2 or endpoints?

Dr. Briggs Morrison

Yes. No, we don't -- again, obviously, the Phase 1 trial, the primary objective, as I alluded to, were PK, safety and defining a recommended Phase 2 dose. The Phase 2 portion, the primary endpoint is a CR rate for efficacy. But the overall inclusion/exclusion don't change. Obviously, the Phase 1 trial has changed over time. We've amended the protocol many times to allow pediatric patients in to focus on NPM1 and MLL-r. So -- but overall, the general population of patients that we're enrolling in terms of relapsed/refractory leukemia doesn't significantly change from Phase 1 to Phase II.

Peter Lawson

Got you. And then in that kind of third group of patients you mentioned about presenting, so the non MLL-r and the non NPM1 patients. Would you guys expect to see any kind of response in those patients?

Dr. Briggs Morrison

Well, I think that's why the FDA asked the companies to enroll a broader population. So, I think their perspective was, we're convinced that your drug potentially could work in NPM1 and MLL-r. There's been extensive preclinical validation. We are convinced that your drug probably would not work in BCR-ABL, but we've always used that as a negative control in our preclinical models. But there are other forms of leukemia that it might be of interest for you to study. So, I think that was why the FDA asked us to enroll an all comers' population.

Peter Lawson

Okay. And so we could get kind of patient vignettes in that group that could be of interest?

Dr. Briggs Morrison

Well, as I said, I think the FDA asked us to enroll a broad population of patients to begin to look at that. It's obviously not a definitive assessment of that population. We focus much more on the MLL-r and NPM1 for the simple reason that we can diagnose those patients today, and it's clear unmet need in a population of patients that from a regulatory point of view, you can identify and you can get an indication for.

Operator

[Operator Instructions] There are no further questions at this time. I would now like to turn the call over back to Mr. Briggs Morrison, Chief Executive Officer of Syndax.

Dr. Briggs Morrison

Thank you very much, operator. And again, thank you, everybody, for joining us on our call. As I said, I think, 2020 was a transformational year, and we anticipate that 2021 will be no less exciting. And the first piece of news, of course, will be the presentation of our Phase 1 data from the AUGMENT-101 trial. And I think we're really quite excited to present that data and then to take additional questions from everybody, and once you have a chance to see that.

So thanks so much for joining the call.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.