Good day, everyone, and welcome to Syndax Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Megan Myers of Argo Partners. Please begin.
Thank you, operator. Welcome, and thank you to those of you joining us on the line and the webcast this morning for a review of Syndax's announced collaboration with Incyte for the development of axitilumab. I'm Megan Myers with Argo Partners. And with me this morning to discuss this collaboration are Doctor. Briggs Morrison, Chief Executive Officer Michael Metzger, President and COO and Daphne Kiritis, Chief Financial Officer.
Also joining us on the call today for the question and answer session is Doctor. Peter Ordentlich, Chief Scientific Officer. 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 10Q as well as other reports filed with the SEC. Any forward looking statements represent our views as of today, September 27, 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 Doctor. Briggs Morrison, Chief Executive Officer of Syndax.
Thank you very much, Megan, and thank you to everyone who's joining us on today's call. We are delighted to be announcing today that Syndax and Incyte have entered into a broad, long term global collaboration that brings together 2 companies with a solid track record of innovation to accelerate and maximize the developments of axitilumab, our potentially best in class monoclonal antibody therapy targeting the CSF1 receptor. As you know, we presented our Phase 1 chronic graft versus host disease data at ASH in December of last year. The reaction to our data was extremely positive. And given our belief in the broad clinical potential of axitilomab, we initiated a process to look for a global partner to collaborate with us on the further development of this exciting molecule.
We are thrilled to announce today that we have entered into a collaborative agreement with Incyte. To briefly summarize, axotilumab is an IgG4 monoclonal antibody that binds to the CSF1 receptor and blocks the interaction with its biGANS, CSF1 and IL-thirty four, thereby decreasing the proliferation and function of CSF1R dependent chronic graft versus host disease, we ran a Phase I of chronic graft versus host disease, we ran a Phase I clinical trial to ask whether axotilumab would be useful in the treatment of this disease. The Phase 1 data we presented at ASH last year showed a 57% overall response rate in very heavily pretreated patients across the various doses tested and show that axotilumab was generally safe while tolerated. Based upon the data being generated in the Phase escalation phase, we chose to open a Phase 2 expansion cohort to further explore the 1 milligram per kilogram dose administered every 2 weeks. As announced earlier this year, we completed enrollment of 23 patients in that single arm Phase 2 trial and have guided that will be presenting a full update of the 40 patients who have been enrolled in our combined Phase I and II trials later this year.
We've also announced the design initiation of our global pivotal trial in chronic graft versus host disease called AGAVE-two zero one. This trial is enrolling patients with chronic graft versus host disease whose disease has progressed after 2 prior therapies. Patients must be at least 6 years of age and have met overall entry criteria. This is a pivotal dose ranging trial in which patients will be randomized to 1 of 3 treatment groups, each investigating 3 distinct doses of vaxitilimab, 2 given every 2 weeks and one dose regimen administered every 4 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 Leigh Symptom Scale. Enrollment to the study is underway, and we are on track to deliver top line data in 2023. As we have noted previously, we have also been working extensively with experts in the field of fibrotic diseases found a strong consensus that the scientific basis for the efficacy of axitilomab in chronic graft versus host disease is likely to extend to a wide variety of fibrotic diseases such as IPF and scleroderma. As we have previously communicated, we obtained orphan drug designation from the FDA for the use of axotilumab in IPS, and we are working with experts and regulators to develop a trial to appropriately test axotilumab in that setting. It is against this backdrop that we today are announcing our collaboration with Incyte to accelerate and maximize the development of axitilomab.
In addition to the potential for sequencing axitilomab and Incyte JAK inhibitors as monotherapy in chronic graft versus host disease, we also have the ability to evaluate combination therapy with these 2 complementary mechanisms of action. The 2 different mechanisms of action could allow for the potential for combination in both the steroid refractory and steroid naive chronic graft versus host disease setting with the potential to arrive at a safe and effective combination that could potentially lead to a steroid free regimen. Before Michael walks you through the details, I just want to note that this collaboration will allow us both to maximize the value of axitilumab in chronic graft versus host disease and will allow us to initiate a Phase II POC trial in idiopathic pulmonary fibrosis. We'll have more to say about the details of the IPF POC trial in the future, but for now, I'd like to turn things over to Michael to summarize the details of the collaboration. Michael?
Thanks, Briggs. I'm personally very excited to be announcing this important collaboration as it marks a critical value enhancing milestone for the program and for the company. As Briggs mentioned, based on the emerging data in chronic graft versus host disease, we realized several months ago that this mechanism, CSF1R, and in particular, our antibody, had significant potential beyond CGVHD and that extensive clinical development in a high number and a number of high value fibrotic indications with high unmet medical need was indeed warranted. To maximize the potential of the drug, we conducted a thorough process in search of the ideal global partner for axitilomab and ultimately concluded that Incyte with its significant expertise in GvHD with ruxolitinib and a track record of success, successful co development and co commercialization partnerships, they would be the best suited to help Syndax build a broad and valuable antifibrotic franchise. Critical to Syndax's long term strategy is to identify and unlock potential value within our pipeline and then find a way to exploit this value globally while retaining major economic value in the U.
S. And we are confident that this global partnership will help us fulfill on all of these ambitions. The deal provides $152,000,000 upfront, dollars 117,000,000 in cash and notably $35,000,000 in equity at a 30% premium, which we believe is a strong endorsement of our company and its overall value proposition. The cash infusion and investment will help to strengthen the company's balance sheet, while enabling us to accelerate and expand on the development of axitilumab and our menin program, both of which will be in registration trials this year. The overall collaboration structure we design is fit for purpose.
In the U. S, Syndax and Insights split profits fifty-fifty. This enables us to retain significant upside while we actively participate both strategically and in the ongoing development of the molecule. There is also cost sharing for development. Syndax is responsible for 45% of costs, limiting our downside and extending our cash.
Finally, we have an opportunity for co commercialization in the U. S. With the option to provide up to 30% of the sales force. This opt in right allows us participate in the launch of an important product alongside a strong commercial partner that has extensive experience across indications, including oncology and immunology. Outside the U.
S, we will rely on Incyte to develop and launch the product in all major markets to maximize its full potential as a global brand. The economics to Syndax over the course of the collaboration are enhanced with key regulatory and sales milestones covering multiple indications throughout the world. The payments total an additional $450,000,000 and Syndax received double digit royalties on ex U. S. Sales.
Also important to highlight is the development plan, which calls for the partners to design novel combinations with axotilumab and Insights JAK inhibitors with the goal of establishing axotilumab in earlier settings within chronic graft versus host disease and expanding its market opportunity. As we previously mentioned, was our intention. Syndax will initiate a Phase II proof of concept trial in IPF, the first expansion outside of establishing chronic graft versus host disease as a beachhead and into other fibrotic diseases where we believe axotilumab could have a significant Successful development in IPF could lead to an additional approval in a very important indication of considerable value and would provide support for axitilumab in other driven diseases that the parties could explore over the course of the collaboration. Now let me turn it back over to Briggs.
Thanks so much, Michael. So let me close the call by again emphasizing our excitement about the broad franchise opportunity for axitilomab and our excitement about maximizing this opportunity through our collaboration with Incyte. We've been very impressed by the thoroughness and thoughtfulness of our Incyte colleagues and look forward to working with them as this collaboration unfolds. As always, I'd like to thank the wonderfully talented team here at Syndax and 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.
Our first question comes from Phil Nadeau with Cowen and Company. Your line is open.
Good morning and congratulations on the deal. A few questions for us. First on the milestones, could you give us some sense of what it will take to trigger those milestones or maybe just a broad breakdown of development versus regulatory versus commercial?
Michael, you want to take that one?
Yes, sure. Hi, Phil. Thank you. Yes, we haven't disclosed the breakdown of the milestones, but I would kind of say that they break down pretty significant approval milestones, late regulatory milestones as well as commercial. They sort of are evenly split.
So, but significant milestones around development as well as commercial.
Got it. Okay. And then second, on the combination with JAK inhibitors, it does seem like that could be differentiating in the marketplace. Can you talk a bit more about when those trials could start and maybe what the development path is?
Yes, Azul, it's Brad Spriggs. Happy to take that. So we're working obviously, we're just announced the deal, so we're working diligently to work through those details with our colleagues at Incyte. I think, of course, could start as early as next year. And as is our practice, once we have a trial design that's agreed to by both parties and agreed to by the regulators and we'll share it with people, the design, the number of patients and the time lines.
Perfect. Thanks for taking our questions and congrats again on the deal.
Thanks, Phil.
Our next question comes from Yigal Nochomovitz with Citigroup. Your line is open.
Great. Thanks for taking the questions. Hi, Briggs and team. I just had 2, one clinical, one commercial. On the clinical question, just could you remind us of any preclinical data and or any early clinical data that support the use of axitilumab to treat IPF?
And then secondly, regarding the development costs where Incyte is responsible for 100% of the costs, Could you quickly clarify what you mean by indications that are specific to ex U. S. Countries? As I wasn't aware of any diseases that have no prevalence in the U. S.
That occur ex U. S. So if you could specify which diseases you're referring to, that would be super helpful. Thank you.
So Michael, you want to take the second question first just to clarify that?
Yes, sure. Thanks Yigal. So I think the way to think about it is, when we were referring to 100% of the cost ex U. S, we were talking about trials that are specifically needed to further regulatory get through regulatory hurdles ex U. S.
They're not specific to any particular indication, but there may be trials for GVHD or IPF or others that are required for ex U. S. Geographies and that's and those are those will be covered by Incyte. But in terms of overall cost structure, which I think I outlined in my remarks, we'll be covering 45%. They'll be covering 55%.
So that's generally how you should think about the breakdown between U. S. And ex U. S.
And Yuval, let me take your question about the scientific rationale for IPF. As you will recall, we licensed the CSF1R antibody from UCB. And UCB has an extensive preclinical package not yet published, but an extensive preclinical package supporting scientific rationale for IPF. That's what we've been using as we've been speaking with commented, some of the responses that we've seen in the chronic GVHD setting, some of the responses that we've seen in the chronic GVHD setting, the biology there is very similar to what you see in IPF and we've seen some very nice pulmonary, not just stabilization of FEC, which is the endpoint people use in IPF trials, but actually improvements in FEC. And then there's additional clinical information from natural history studies of patients with IPF showing that the non classical monocytes predict a poor outcome for patients.
So we think there's quite a bit of both preclinical observations from our GvHD trials and longitudinal data to support the rationale for testing the drug in IPF.
Great. Thank you.
Our next question comes from Joel Beatty with Baird. Your line is
open. Hi, congrats on the deal. The first question is, could you characterize the
level of FUSO concept data that you'd want to show in the next IPF trial to prompt insight on their decision on whether to opt in or not? And then second question is
for the royalties, it looks like the Europe and
Japan are mid teens, while other countries ex U. S. Are low double digits.
Can you just clarify if that
low double digits means lower than the mid teens or could it be higher? Thanks.
So Michael, why don't we have you take the second question again first?
Yes, sure, Joel. So thanks. We didn't break out specifically ex U. S. Milestones where they fell.
We said double digit royalties. So I'm not sure where that comes from. But yes, there are double digit royalties throughout various geographies. And so I think that's the specificity we've provided so far. So you think about it.
And Joel, just in terms of the design of the IPF trial, again, as I mentioned earlier, we'll say more about the details of the design, the sample size and the timing. I guess the one thing I would say as we've been discussing with experts in the field about how to do what people call proof of concept trials, we've come to the conclusion that you really only can get proof of concept if you're using a clinical endpoint. So you can think of the IPF proof of concept trial as sort of a smaller version of what would be considered a pivotal trial using pivotal trial endpoints, where we haven't yet been convinced or I should say the experts we've been consulting have advised us that some of the biomarker driven trials are intermediate kind of endpoints that people use can have both false positive and false negative rates. And so our current thinking and again, we'll say more once the trial design is finalized is that we would use pivotal endpoints like FEC to establish proof of concept.
Got it. Thank you.
Our next question comes from Peter Lawson with Barclays. Your line is open.
Hey, thanks for taking the questions. Just any I guess a question for Daphne, just thoughts around how far this could extend your cash runway?
Sure. Thanks, Peter. So with the
addition of the $152,000,000 again, dollars 100 and $17,000,000 upfront and $35,000,000 in equity investment on the balance sheet, this would take our cash runway to early 2024.
Perfect. Thank you. And then just as we think about fibrotic diseases, there are other drugs in the space that we should be thinking about that you kind of require access to for combination trials or other things that could change the landscape there? Yes.
I think, Peter, so the short answer is yes, of course. I think in GvHD, with Incyte's recent approval in chronic graft versus host disease, it's a and the complementary mechanisms of action. We think that's a very clear and important combination to study. In IPF, there are as you know, there are only 2 approved drugs. And so our back to the question about the IPF trial, we would of course be studying our drug in combination with those 2 approved drugs.
And then as you go into other diseases, scleroderma, liver fibrot diseases, etcetera, there would be additional agents that might be of interest to combine.
Got you. Thank you. And then just a final question, just regards other indications and I guess prior indications, is the door closed for oncology for CSF1R for your molecule?
Well, I wouldn't say the door is closed, but I would say that the data that both we and others have generated testing at CSF1R antibody in combination with a PD-one pathway antagonist have not been particularly promising. Again, we're we continue to monitor that science and there are academic scientists who have suggested to us that there may be a specific patient selection approach there. But at this point, that is not a priority for the program.
Great. Okay. Thanks so much. Thanks for taking my questions.
Our next question comes from Justin Walsh with B. Riley Securities. Your line is open.
Hi, congrats on the deal. So my first question is, so the press release notes that Syndax retains the option to co promote. Can you provide some color on what you expect would dictate your decision to go forward with the co promote or not?
Michael, you want to take that one?
Sure. Well, I think as you know, it's a we have a portfolio of molecules. We'll be hopefully at a similar stage of launch development and launch with our menin program when we get our first approval and have the opportunity to sell the drug in chronic graft versus host disease. I think there are some portfolio questions about how do we want to build a field force and all of that. So I think there is that.
There is also where are we with regard to resources and so forth. So I think there is a number of considerations around how we view our portfolio and what else we may have on tap within our pipeline. But I think that's that it provides us great flexibility to really learn and work with a great partner on the commercial side, especially in Insight. And so we have excellent flexibility to leverage that as we move our portfolio forward.
Got it. Thanks. My next question is on the development cost share. Do you expect that that will include AGAVE 201 or is it more like the combination trials or new trials that are initiated from here?
Yes. So I'll just make a follow-up comment there. The all development is shared in the way that we have presented it. So 4,555 in terms of agave, that's included as well.
All right, perfect. And one more question for me. Are there any specific overlapping toxicities between ruxolitinib and axitilumab that we should be thinking about or keeping an eye on heading into the combination trials?
Justin, thanks for that question. Short answer is no, which is intact what makes it such an attractive combination. Oxitilumab, the data we presented at ASH last year in the drug was quite well tolerated with really just some transient LFT abnormalities, no cytopenias or the kinds of things that occasionally you can run into with a JAK inhibitor. So at this stage of the game, it is that non overlapping toxicity, non overlapping mechanisms of action that make the combination so attractive.
Our next question comes from Avatar Jones with Morgan Stanley. Your line is open.
Hi, this is Abitzar on for David this morning. Just another question regarding the JAK combination. Could you really provide a little color on that scientific rationale and any commentary that you have in regards to the recent discussions of JAK safety and how this approach plays out in the context of that?
Sure. So Peter, do you want to make a couple of comments about the scientific rationale for the combination? Then I can comment on their safety.
Yes, sure. So obviously, the two mechanisms target sort of different components of particularly GvHD in terms of the T cell component and more of the inflammatory reaction where the JAK inhibitors are more effective. And so we think the combination overlaps very nicely in targeting both the monocytes and macrophages that contribute to the fibrosis and more of the T cells which contribute to the inflammatory side.
And I guess I would say in terms of we always think in terms of benefit risk. And so I think the risks that are have been identified with the JAK inhibitor class are potentially of less impact in this patient population where the benefit is sorely needed. These are patients who have life threatening diseases. So obviously, we'll continue to monitor all of the JAK safety issues. But I think in this case, the benefit risk is really a different calculation than it is in some of the autoimmune diseases.
Got it. Understood. Thank you.
There are no further questions. I'd like to turn the call back over to Doctor. Briggs Morrison for any closing remarks.
Great. Thanks very much, operator. And again, thank you everybody for joining us on the call. As you can tell, we're really quite excited. We think this unlocks tremendous value for axitilomab and importantly allows us to maximize the value of that molecule and of our menin program.
So thanks so much for your questions and we look forward to following up with you in the future.
This does conclude the program and you may now disconnect. Everyone have a great