Good day, everyone, and welcome to the Syndax 4th Quarter 2019 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Claudia Styslinger of Argo Partners. Please begin.
Thank you, operator. Welcome and thank you to those of you joining us on the line and webcast this afternoon for a review of SEDEXA's Q4 and full year 2019 financial and operating results. I'm Claudia Stiflinger with Argo Partners and with me this afternoon to discuss the results and provide an update on the company's progress are Doctor. Briggs Morrison, Chief Executive Officer and Rick Shea, Chief Financial Officer. Also joining us on the call today for the question and answer session are Michael Metzger, President and Chief Operating Officer and Doctor.
Michael Myers, Chief Medical Officer. This call is being accompanied by a slide deck that has been posted on the company's website. So I'd 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 in 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 3, 2020 only. A replay of this call will be available on the company's website, www.syndex.com, following this call. With that, I am pleased to turn the call over to Doctor. Briggs Morrison, Chief Executive Officer of Symvax. Briggs?
Thank you, Claudia, and thank you to everyone joining us on today's call and the webcast. Slide 3 provides a high level summary of current corporate priorities as we strive to realize the future in which people with cancer live longer and better than ever before. We made great progress in 2019 on all three of our programs. Since our last call in November of 2019, we have announced clinical data demonstrating proof of concept for the use of our anti CSF1R antibody axotilumab in the treatment of chronic graft versus host disease. We've announced 2 premier scientific publications that add to the compelling preclinical data supporting the potential of our menin inhibitor to be an effective therapy in acute leukemia, and we announced the addition of $55,000,000 to our balance sheet.
I think 2020 will be a tremendously exciting and transformative year for our company. First, we know that the final overall survival readout of E2112 will occur this year, bringing us closer to a potential near term FDA filing, approval and launch in hormone receptor positive metastatic breast cancer. 2nd, the Phase 1 AUGMENT-one hundred and one trial of our highly selective rationally designed menin inhibitor SNDX-five thousand six hundred and thirteen is underway and we expect meaningful data from that program this year. And finally, we will continue to collect data that will further clarify the potential of our anti CSF1R antibody, axotilumab, to treat chronic graft versus host disease. So let's review each of these opportunities in greater detail.
Slide 4 summarizes the design of the Phase 3 trial of entinostat in hormone receptor positive, HER2 negative breast cancer. Trial randomized 608 patients to exemestane plus placebo versus exemestane plus entinostat and the focus of this trial is now on the final overall survival analysis. Final analysis will be conducted once there are 4 10 events, which based on our modeling and recent discussions with ECOG, we believe will occur in the Q2 of this year. A positive outcome would allow us to file a regulatory approval in the United States based upon the terms of our breakthrough therapy designation in hormone receptor positive metastatic breast cancer and the special protocol assessment process with FDA. Our team is prepared to submit a regulatory filing should the trial be positive within about 6 months of receiving the data from ECOG, which would set us up to launch entinostat in 2021.
Trial has 80% power to detect a hazard ratio of 0.75, The maximum hazard ratio that would yield a statistically significant positive trial is 0.82. Based upon the design assumptions, if E2112 achieved a hazard ratio of 0.82, that would indicate patients receiving the combination had about 5 month improvement in median overall survival from about 22 months in the control group to 27 months in the entinostat arm. Slide 5 emphasizes the potential for the entinostat exemestane regimen to be preferred agent after a first line eramikase inhibitor, which is typically given either as a single agent or in combination with a CDK4six inhibitor. Our current estimate is that between 30% 50% of the patients in E2112 will have received a CDK4six inhibitor prior to entering the trial. Thus, we should have a highly relevant data set in the post CDK4six patient population.
In our opinion, the rapid adoption of CDK4six inhibitors such as Ibrance in the first line setting underscores the desire of physicians and patients to improve the outcomes associated with anti estrogen therapy. In the setting of a positive E2112 result, we would expect entinostat to achieve similar widespread use. This population of patients is substantial with estimated 34,000 patients in the U. S. Each year who go on to receive hormone therapy after failing first line therapy and who could therefore be eligible to receive the entinostat regimen.
Importantly, we will be prepared to launch entinostat in the U. S. On our own. We are actively building out our internal commercial team to ensure we are well positioned for the potential launch of entinostat in 2021, while concurrently entering into discussions with potential rest of world commercial partners. Slide 6 emphasizes the clinical potential of entinostat in hormone receptor positive breast cancer.
In preparation for launching entinostat, we have conducted qualitative market research with community physicians and breast cancer experts. We tested a conservative profile, essentially the minimum benefit that could provide a positive OS result. And we consistently heard from both groups of physicians that there is a high need for novel agents in hormone receptor positive breast cancer and that they find the potential ability of entinostat to resensitize patients to endocrine therapy to be a very attractive feature of the drug. Not surprisingly, they uniformly saw overall survival as the most important efficacy endpoint and believe that an agent that could extend survival and lengthen the patient's time on hormone therapy with minimal impact to their quality of life made a very compelling profile. We remain confident in the potential for E2112 to be a positive trial and are eager to bring this potentially new important medicine to patients.
Let me now turn to Slide 7 and SNDX-five thousand six hundred and thirteen, our genetically targeted agent. Since our last call, 2 premier publications have circulated related to menin inhibition, 1 in cancer cell detailing the preclinical results of one of our molecules in MLLr leukemias and one in science detailing the preclinical results of 1 of our molecules in NPM1 leukemia. These premier publications provide the scientific rationale and preclinical validation of our ongoing clinical trial, which is outlined on Slide 8. The 1st in human trial in the accelerated understanding of menin inhibition or AUGMENT program is AUGMENT-one hundred and one. The 1st in human clinical trial is a combined Phase 1 and Phase 2 trial.
The Phase 1 portion is a dose escalation trial designed to identify the maximum tolerated dose and a recommended Phase 2 dose for SNDX-five thousand six hundred and thirteen. Patients with relapsed or refractory acute leukemia will be enrolled and will take SNDX-five thousand six hundred and thirteen daily by mouth until they experience progressive disease or unacceptable toxicity. The 1st 28 days of dosing will serve as the period in which safety is evaluated for determining dose escalation. As required by the FDA, patients do not need to have specific genetic abnormalities in order to enroll in the Phase 1 study. The first cohorts follow an accelerated dose titration with only one patient required per cohort.
Upon encountering a pre specified level of toxicity, the trial will convert to a standard 3 plus 3 design. We announced in the Q4 of last year that dosing had commenced and the trial is progressing nicely. The PK analysis is a key component of the Phase 1 trial. Our preclinical data indicates that the menin MLR interaction needs to be continuously inhibited in order to achieve optimal efficacy. We believe that safely achieving adequate target coverage in the Phase 1 trial could bode well for establishing efficacy in the Phase II trial.
We have been carefully examining the drug exposure in patients to assess whether we are indeed achieving adequate target coverage. Once the recommended dose is Phase II dose is established, the Phase II trial will proceed to enroll 3 distinct expansion cohorts, each of which consists of a specific genetically defined relapsed or refractory acute leukemia. The 3 cohorts are adults with MLLr, acute lymphoid leukemia, ALL adults with MLLr acute myeloid leukemia, AML and adults with MPM-one mutant AML. The Phase 2 portion will further characterize the safety of SNDX-five thousand six hundred and thirteen and will provide an initial estimate of the complete response rate as a primary measure of therapeutic benefit. We know that a lot of people, patients, physicians and investors are eager to see the initial data from the AUGMENT-one hundred and one trial.
We expect to report initial clinical data from the trial in the Q4 of this year. Given that AUGMENT-one hundred and one is an open label trial, meaningful interim data including PK, PD or efficacy may be available earlier in the year. In addition, we are eager to advance this molecule into the pediatric population. It's a key component of our overall strategy. We'll have more to say about the details of the pediatric timing and approach on a future call.
We know that pediatric leukemias with MLR rearrangements represent a significant unmet medical need and we're eager to work with the pediatric oncology community to bring SNDX-five thousand six hundred and thirteen to their patients. Based upon preclinical data and the underlying biology of the pathway, we are expecting evidence of single agent activity. As a result, there could be a rapid and straightforward clinical development path for 5,613 perhaps like the path taken for agents addressing patients with FLT3 or IVH mutation. As we continue to learn more about the potential of 5,613 in acute leukemia, we see this molecule becoming an additional and important value driver for SYDAC. Let me now turn to Slide 9 and SNDX-six thousand three hundred and fifty two, our potential best in class monoclonal antibody targeting the CSF1 receptor.
Let me first note that we now have a generic name for this molecule, axotiliman. And going forward, we will refer to this molecule with this generic name and retire the SNDX-six thousand three hundred and fifty two designation. We are conducting a trial testing axitilomab as monotherapy in chronic graft versus host disease. Chronic graft versus host disease is a frequent complication of hematopoietic stem cell transplantation, wherein donor derived immune cells contribute to the initiation and development of fibrosis and the myriad manifestations of this disease. In preclinical models blockade of the CSF1, CSF1R pathway with anti CSF1R antibodies can result in the depletion of donor macrophages, thereby preventing and reducing chronic graft versus host disease.
And we believe that chronic graft versus host disease represents an important clinical opportunity. At the end of last year, we released initial data from our Phase 1 trial, which is diagrammed on Slide 10. The Phase 1 portion is a dose escalation trial designed to identify the maximum tolerated dose and a recommended Phase 2 dose of aclotilumab for the treatment of chronic graft versus tostinib. We've released data from the first five patients enrolled in the first three cohorts and have now modified the trial to include a Phase 2 cohort at the 1 milligram per kilogram dose. Will continue the Phase 1 trial to more formally define the recommended Phase 2 dose and may open 1 or more additional Phase 2 dose cohorts as well.
Slide 5 reprises the results in the first five patients as of mid December, only 4 of which of the patients were valuable for response as of that data cutoff. Our investigators are quite excited to see clinical activity at all doses and the initial results suggest good durability of effect. Slide 12 is a picture that brings home the impact this medication is having on the disease. As we've discussed the specific results with experts in fibrotic diseases, they have commented on the improvement in both inflammation, you can see the redness subsiding and the benefit in improving the ulcers as well. We are now considering exploring several additional inflammatory anti fibrotic diseases for axitilumab and we'll have more to say about that on a future call.
Finally, Slide 13 summarizes the transactions that led to the acquisition of the Menin MLLr and the SNDX-six thousand three hundred and fifty two program. 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 clinical development expertise to bring these compounds through valuable inflection points and expect to remain among the preferred partners of such transaction. I'll now turn the call over to Rick to review our financial results.
Thank you, Briggs. The results of our operations for the Q4 2019 and for the full year and the comparison to the prior year quarter year are included in our press release. I won't repeat them in these remarks. Additional financial details will be available in our quarterly our annual report on Form 10 ks, which we intend to file this week. Turning to Slide 14.
We ended 2019 with $59,800,000 in cash and 31,600,000 shares in prefunded warrants outstanding. The net change in cash for the 4th quarter was a decrease of $12,500,000 The net loss for the quarter of $14,000,000 was offset by non cash stock compensation expense of $1,500,000 Looking ahead, I'd like to provide financial guidance for each of the first two quarters of 2020. Our financial guidance for the second half of twenty twenty will be issued after we get the results of the E2112 study. We expect our operating expenses for the 1st two quarters of 2020 to increase over quarterly operating expenses we reported for the second half of twenty nineteen. R and D expenses will increase primarily due to increased development activities for SNDX-five thousand six hundred and thirteen, our menin inhibitor and for acotilumab, our anti CSF1R antibody.
We do expect G and A expenses also to increase primarily due to increased entinostat pre commercial activities. For the first each of the first and second quarters of 2020, we expect R and D expenses to be $12,000,000 to $14,000,000 per quarter total operating expenses to be $17,000,000 to $19,000,000 per quarter. That includes approximately $1,500,000 per quarter of non cash stock compensation expense. Cash at year end was about $60,000,000 And in Q1 2020, we added $35,000,000 through an equity financing and we drew $20,000,000 of debt on a term loan. So our pro form a cash headed into 2020 was $115,000,000 And given our cash operating expense guidance for the first half of twenty twenty, we expect to end Q2 twenty twenty, the first half of twenty twenty with more than $80,000,000 of cash, which gives us the financial flexibility to take advantage of key development milestones well into 2021.
I'll now turn the call back over to Briggs.
Thanks very much, Rick. As I hope you've appreciated from my prepared remarks, 2020 is a busy year for Syndax with several very important and exciting data readouts close at hand. We believe that a positive OS result in E2112 would be transformative for Syndax and create significant shareholder value. We anticipate a final readout in the Q2 of this year. We also believe that SNDX-five thousand six hundred and thirteen, our menin MLLr inhibitor, is well poised for near term proof of concept data.
We believe that safely achieving adequate target coverage in the Phase I trial could derisk this program with single agent activity in patients with either MLLr or NPM1 mutant leukemia, providing clinical proof of concept and enabling early regulatory clarity and planning for next steps. And finally, we're very excited about the early results we are seeing with axitilomab in chronic graft versus host disease and look forward to presenting updated data from this program at the end of this year. With our recent highly successful financing, we are comfortable that we have the financial resources to get us through these key upcoming milestones. Finally, we are optimistic that we will 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 program. In addition, I'd like to thank our committed long term investors who are helping us build this great company and to welcome the new investors who joined in that effort with our recent financing. With that, I'd like to open the call for questions.
Thank
you.
Our first question comes from Madhu Kumar with Baird. Your line is now open.
Hey, guys. Thanks for taking our questions. So thinking about the chronic graft versus host disease program, would you imagine the expansion cohort
will
still require Ibrutinib pretreated patients? Or do you imagine that it will be a kind of wider swath of the graft versus host population?
Yes. Maiduvi will be a wider population of patients. As you recall, we first started the trial, we were acquired maybe post ibrutinib. That inclusion criteria has been softened considerably. So now it is a wider population of patients.
Okay. And then thinking about the menin MLL program, in terms of PK and PD data, would you wait to get to dose limiting toxicity to announce kind of PKPD data? Or would you want to if you saw an activity that looked like we're getting good continual men and MLL inhibition and good kind of pharmacokinetics that you'd want to report that ahead of really completing the dose escalation?
Yes. Again, as I pointed out in my prepared remarks Madhu, I think there's PK, PD and efficacy. If we had a sufficient number of patients that we feel like we've actually adequately characterized the PK and dose proportionality and the ability to cover the target. And let's say we had that in advance of a significant number of patients with efficacy data, we could potentially present that PK data. Okay.
That's it for me. Thank you, guys.
Thank you. Our next question comes from Bert Hazlett with BTIG. Your line is now open. Once again, our next question comes from Bert Hazlett with BTIG. Go on.
My apologies. I'm intrigued by the commercial launch preparation discussions that are underway. Could you just remind us assuming success in 2,112, what the gating items would be for, 1st of all, the filing and then actually commercialization of it?
Right. So Bert, let me first take the filing piece and then I'll turn it over to Michael to talk about some of the commercial work we're doing. So as I said in my prepared remarks, we anticipate that within about 6 months of getting the data from ECOG, we would be in a position to submit the NDA. And then it would depend on FDA decision on whether the timing of how long that review would take. But our base assumption is we'd be in a position to launch the product in 2021.
And then maybe I'll turn it over to Michael just to give a couple of comments on how we're getting ready commercially to be prepared for that. Right. Kurt, so I think
as Briggs mentioned in his prepared remarks, pre commercialization work is a focus for us, has been for some time and we'll continue with that through getting data and then up to a potential launch. Obviously, putting together the commercial team and the leadership around the commercial launch in the U. S. Is important. So we'll be working hard on that.
Hiring the field force in the U. S, we had talked about launching the drug and being prepared to launch the drug on our own in the U. S. So that will require, of course, a focused field force to do that. And lastly, finding a partner for ex U.
S. Will become a priority for us as well. So we can have a global launch of the product and do so optimally. But all those work streams are sort of in process and will be augmented around the time of date.
Can you
remind us how advanced the or excuse me, a breakthrough designation in the U. S, but the path to potential acceptance of the 2,112 data by the EU or other regulatory authorities and how advanced those discussions are for rest of the world?
Right. So let me take that for it. It's Brig. So I think from a regulatory point of view, having a trial that shows improved overall survival relative to a standard second or third line agent, we think is regulatory point of view and our intent would be to do that once we have the results of the trial. As I said, I think we would we will be prepared to launch the drug ourselves in the U.
S, but we are concurrently looking for a commercial partner who can help us with the launch outside the U. S.
S. Okay. Just shifting to 5,613 briefly. Do you expect the low doses to be able to constantly inhibit the menin MLLr interaction?
Yes. So again, as you know, you're always trying to project PK exposures based upon what you saw preclinically. Based upon those projections, it is possible that even at the early dose escalations, we would have sufficient coverage. But I think it goes back to Madhu's question of seeing enough of that PK data to feel comfortable that we can cover the target. But based upon modeling from preclinical work into what we think will be PK in humans, it's possible that one of those early dose levels we should be able to cover the target pretty well.
Terrific. Looking forward to the data. Thanks.
Thank you. Our next question comes from Ed White with H. C. Wainwright. Your line is now open.
Hi, thanks for taking my question. So just a question on acotilimumab. I was just wondering if you had the final the 3rd patient in Cohort 3 was not evaluated yet as of the data update. Will we have to wait to end of the year to see that patient updated? And also, can you tell us how many patients have been enrolled in Cohort 4 and in the Phase 2 and what we should be expecting to see when you do release the data later this year?
Thank you.
Yes. Thanks for your question. Short answer is yes, you will have to wait until the end of the year. We're not we don't think it's that useful for people for us to regularly sort of update the data. So I think in general, what you should think about for the end of the year is the completion of the Phase 1 portion of the trial, studying various doses and dose schedules and some number of patients on the expanded 1 milligram per kilogram dose.
I don't think we really guided yet how many, but I think by the end of the year, we should have a good number of patients on that expanded cohort as well as the completion of the Phase I. We think the best way to update people on the profile, the emerging profile is at an appropriate medical conference. And so that's why we've guided towards the Q4 of this year presenting that updated data.
Okay. Thanks, Bert. Thank you. And our next question comes from David Lebowitz with Morgan Stanley. Your line is now open.
Thank you very much for taking my question. When you look at the Menin program, I guess, what do you see as the step after Phase 2 expansion? Once you select dose in Phase 1, you move to the Phase 2 portion. What do you see as the theoretical step beyond that point?
Yes. Thanks a lot, David. So we think one potential avenue is a single arm registration approach. So if you look at some of the other agents that have targeted agents for acute leukemia, they've been able to register the drug based upon a single arm trial looking at complete response rates and durability of those response. So that is an avenue that we think depending on how active the drug is, that could be a potential.
Obviously, the next step would be to think about how we can combine this agent with standard of care for patients with AML. And so we're giving some thoughts to that both in the MLR population combining it either with induction chemotherapy or at maintenance after transplant. There's a variety of different designs we've thought about. And in the NPM1 space, remember that NPM1 there's about 15% of patients who have just an NPM1 mutation with no other co mutation, but the majority do have other co mutations, some of which there are agents for like FLT3 inhibitors. So you could think about combinations with a FLT3 inhibitor or an IDH inhibitor or integrating it into standard chemotherapy for the other patients.
So I think there's a number of avenues, but the most the one that we would hope we're hopeful for is that we could actually get the drug registered on a single arm trial should their response rate be of sufficient magnitude to allow that. Thank you for that. And what would you, I guess, need to learn from the dose escalation portion before you proceed with moving in the pediatric direction? Actually not that much. So we're working with the pediatric groups now.
As I said, the MLLr, ALL and kids and AML and kids are at high unmet need. So I think if we can even get a little bit of PK data from the adults that may be enough to start the pediatric program. But we'll say more about that in a future call.
Thanks for taking my questions.
Thank you. Our next question comes from Joel Beatty with Citi. Your line is now open.
Hi, thanks for taking the questions. The first one is on the AUGMENT-one hundred and one trial. Can you give a rough sense of how many cohorts of data we might see if the data presentation ends up being in Q4?
Yes. So I think Joel, the reason we sort of guided to Q4 is we are hopeful that we could have finished the Phase 1 portion of the trial and know what the MTD is and know what the recommended Phase 2 dose is. How many cohorts it takes to do that is not entirely clear. If you look at the literature in these dose escalation trials, somewhere around 4 or 5 cohorts to get to your recommended Phase 2 dose. But I think part of the reason we try to guide to the end of the year is we think the Phase 1 we would hope that the Phase 1 portion will be done and that we would have a recommended Phase 2 dose.
The Phase 2 cohorts may have actually already opened by the end of the year, but that's to be determined.
Great. Thanks for that. And then one other question on the CSF1R on the graft versus host program with the CSF-1R. Obviously, it looks really impressive responses, even though it's just small data set so far. Can you help give context of what gives you confidence that these responses you're seeing are due to drug as opposed to other therapies that the patient may be on?
Yes. Thanks for the question. So the way that the trial is designed is the patients have to be stable on their current. As you know, there are a number of different agents that people use, whether it's steroids, calcineurin inhibitors, Ibrutinib, rux, etcetera. So whatever agents they're on, they have to be on that stable regimen for a period of time and so that we can actually evaluate what our drug does.
Once they are treated with our drug, if they have a response, then the investigators are allowed to start tapering off the other drugs that they're on. But there's a requirement that there'll be no change to their existing therapy when we put them on our test therapy.
Great. Thank you.
Thank you. Our next question comes from Christopher Marai with Nomura Instinet. Your line is now open.
Hello. This is Jackson Harvey on for Christopher Marai. My first question is on AUGMENT-one hundred and one. Given that it's an unselected patient population, can you give us some early insight into And then for the PD measurements, how should we expect PD to be reported in patients that do not have the relevant mutations? Thank you.
Yes. Hi, Jackson, thanks so much for the question. So, as I said, they're not required to have either MLLr or NPM1 to go into the Phase 1 portion. Having said that, the investigators who are participating know how the drug works are clearly aware of all the preclinical data and we've gotten certainly feedback from their bias towards putting on patients who have one of those 2 known genetic abnormalities. So we can't say for certain where that's going to end up, but we I think we're optimistic that the patient population will be enriched for patients who have 1 of the 2 known genetic lesions.
Can't tell you exactly how enriched, but I think it will be enriched. The question for pharmacodynamics is one that our team continues to work on. Your question was how do you assess pharmacodynamics in patients who don't have the mutation. To be honest, we're still working hard on pharmacodynamics patients who do have the mutation. So, I think that's why I highlighted in my comments more about PK.
I think we have a really good understanding of PK exposures we need for efficacy. There are some assessments which we can do of having to do with understanding how the transcriptional activation of certain genes by the MLL menin interaction. We can look at changes in menin. We can look at changes in binding of menin to the chromosome. But it's you are correct, it is harder in patients without the mutation where we rely more on PK.
Got it. And if I can sneak in one more question on axotilumab. I'm just curious about the if you're seeing a differential response based on the organ system involved and whether these Phase 2 expansions could be registrational? Thank you.
Yes. I think it's too early to say whether we're seeing different responses. I think the initial data we showed was 5 patients, only 4 of which were valuable. So it's a little hard to say that that's what I think the Phase 2 portion is for us to try to characterize that. So I think it's still a little early to say.
Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Brix Morrison for any closing remarks.
Thanks very much, operator. Thanks everybody for joining us on the call. I guess today is a voting day in part of the country. We just recommend that you wash your hands after you vote. And we look forward to keeping in touch.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.