Infinity Pharmaceuticals Inc

OTC:INFIQ

Earnings Call Transcript 2022-Q2

[Operator]

Ladies and gentlemen, thank you for standing by. Welcome to the Infinity Pharmaceuticals Conference Call to discuss the Company's Second Quarter 2022 Financial Results and Business Update. My name is Joseph, 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 this 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, Senior Executive Coordinator]

Thank you, Joseph, and good afternoon, everyone. Welcome to today's call to discuss our recent business progress and review of our second quarter 2022 financial results and company highlights. On the call with me today are Adelene Perkins, Chief Executive Officer and Chair; Larry Bloch, President; and Robert Ilaria, Jr., Chief Medical Officer. We'll open up the call for Q&A following our remarks.

The press release issued today details our financial results and is available on our Web site 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 financial projections.

Our actual results may differ materially from what we project today due to a number of important factors, including the considerations described in the Risk Factors section of our annual report on Form 10-K for 2021 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'd like to turn the call over to Adelene.

[Adelene Perkins, Chair and CEO]

Thanks, Jayne, and thanks to everyone for joining us today to review Infinity's second quarter 2022 business update. Our goal at Infinity has long been to bring eganelisib to patients who need better treatment, especially those who have derived little to no benefit from the first generation of immuno-oncology therapies.

To achieve this goal, as we discussed on our most recent call last May, we are focused on expanding the clinical evaluation of eganelisib in additional solid tumors to maximize its value for patients and thereby for shareholders, and we are pursuing potential partnerships to enable this.

We have two objectives in partnering. First, to expand the development of eganelisib across a broad array of solid tumors with a partner who shares our belief and the magnitude of the eganelisib opportunity and is willing to fund an extensive R&D program, potentially combining eganelisib with prospective partners drugs to create differentiated treatment regimens. Second, to establish a partnership structure that enables the creation of meaningful value for our Infinity shareholders.

Since our last quarterly call, we have completed our midyear strategic review. And we've made the decision that we put a partnership in place prior to initiating new clinical trials for a couple of key reasons. One is that we are in discussions with multiple potential partners. And given the breadth of activity we've seen with eganelisib, we have multiple development options.

As such, collaborating with prospective partners on our eganelisib clinical development strategy so that we can accommodate their input on prioritization and design of new studies, including decisions on which combination drug partners to use is very constructive.

In addition, and importantly given current market dynamics, it has allowed us to increase our 2022 year-end cash guidance and extend our cash runway into 2024. Prior to starting new studies, we are focusing our operational resources on our ongoing clinical trials; MARIO-1, MARIO-3 and MARIO-275.

Clinical and translational data we have presented from these studies show that eganelisib is a unique immuno-oncology therapeutic candidate for three notable reasons. One, we have a first-in-class therapy with on target activity and translational data showing that eganelisib reprograms macrophages in the tumor microenvironment, reduces immune suppression and activates an anti-cancer immune response.

Two, the clinical data with eganelisib have demonstrated prolonged progression-free survival and extended overall survival over current standards of care in multiple indications, including in a randomized controlled trial that allows us to see the distinct contribution of eganelisib over its combination drug partners. Three, and very importantly, eganelisib has been shown to have an acceptable and manageable safety profile in combination with other drugs, including in two and three drug combination regimen.

Reflective of these key attributes, today, we are pleased to report positive updated results from the MARIO-275 two-year overall survival analysis in patients with urothelial cancer, whose tumors progressed after treatment with a platinum-based chemotherapy regimen. We continue to see very encouraging and durable evidence of survival benefit over the standard of care control arm in this study, with no new safety signals during the extended period of treatment, which Rob will review in detail.

By the end of this year, we will also review updated PFS data from our MARIO-3 trial in frontline, triple negative breast cancer patients with both PD-L1 high and PD-1 low tumors, which meaningfully will be a full year more mature since our last data cut in October of 2021. We're increasingly encouraged by the data across a wide range of indications, lines of therapy and combinations, which continue to show a consistent trend of improved outcomes for patients in areas of great unmet need that Rob will now review. Rob?

[Robert Ilaria, CMO]

Thank you, Adelene, and good afternoon, everyone. The strength of our data across multiple indications and treatment setting continues to provide solid evidence that eganelisib, a highly specific small molecule inhibitor of PI3 kinase gamma has the potential to be a transformative therapy in immuno-oncology.

The consistently positive clinical results we have observed with eganelisib paired with the translational medicine data demonstrating eganelisib reprograms macrophages in the tumor microenvironment and enhances immune activation are very encouraging. Important to note that we have observed evidence of clinical benefit in both PD-L1 negative tumors and tumors resistant to immune checkpoint inhibitors to patient populations underserved by checkpoint inhibitors today.

I would now like to review the positive updated results from MARIO-275, the randomized, placebo-controlled study in second line platinum-resistant metastatic urothelial cancer.

Patients were randomized to treatment with either eganelisib plus nivolumab or nivolumab plus placebo. Last year, we provided the one-year landmark survival data demonstrating that 59% of the patients were alive on the eganelisib plus nivolumab treatment arm compared to 32% on nivolumab alone.

We're pleased to share that we continue to see very encouraging and durable evidence of survival benefit in this study. With 45% of patients on the eganelisib plus nivolumab arm alive at the two-year landmark compared to 24% of patients on the nivolumab control arm.

This benefit was also seen in the PD-L1 negative tumor subgroup with 38% of those patients alive at two years on the eganelisib plus nivolumab arm versus only 17% on the control arm. Additionally, there were no new safety signals observed during the extended period on treatment.

These results are important for several reasons. First, survival is the gold standard for treatment benefit on oncology and we are observing durable, long-term survival benefit in a group of patients with few treatment options once their treatments become platinum -- their tumors become platinum resistant.

Second, we are observing this impressive magnitude of benefit in a controlled study in which patients received eganelisib in combination with a highly relevant standard of care nivolumab, allowing us to see the benefit of adding eganelisib over nivolumab monotherapy.

And lastly, the positive data from MARIO-275 in urothelial cancer, mostly PD-L1 negative tumor, is consistent with the positive results in PD-L1 negative TNBC we reported last year in the San Antonio Breast Cancer Symposium.

These updated MARIO-275 results support multiple potential opportunities for eganelisib combinations in urothelial cancer indications and will play an important role in our conversations with potential partners about future development path for eganelisib in urothelial cancer.

Regarding our other important Phase 2 study, we plan to provide an update on MARIO-3 TNBC data later this year. This will be an important update, since it will provide us the opportunity to confirm the continued durability of the encouraging PSF results in both PD-L1 positive and PDL-1 negative TNBC, with a data cut approximately one year later and that used for SABCS 2021.

Now, I'll turn the call over to Larry to review the second quarter financials. Larry?

[Larry Bloch, President]

Thank you, Rob. The team has remained very disciplined in practicing good fiscal stewardship, which has resulted in extending our cash runway into 2024. In the second quarter 2022, Infinity had total cash of $56.6 million compared to $80.7 million at December 31, 2021.

Research and development expense for the second quarter of 2022 was $8.8 million compared to $8 million at the same period in 2021. The increase is primarily related to higher compensation expense, mostly due to new hires during the period and an increase in consulting expense, partially offset by a decrease in clinical development expenses.

General and administrative expense was $3.5 million for the second quarter of 2022 as well as the second quarter of 2021. Net loss for second quarter 2022 was $12 million or basic and diluted loss per common share of $0.13 compared to a net loss of $11.3 million or basic and diluted loss per common share $0.13, also in the same period of 2021.

I will now provide updated financial guidance for 2022. Net loss for 2022 is expected to range from $40 million to $50 million, which is an improvement of $5 million. In 2022, year-end cash is expected to range from $35 million to $45 million, which is an improvement of $10 million.

Infinity's financial guidance does not include additional financing or business development activities. We are well positioned to execute on our strategic initiatives and look forward to continuing to update you on our progress.

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

[Operator]

[Operator Instructions]. Your first question comes from the line of Ed Tenthoff. Your line is open.

[Edward Tenthoff, Piper Sandler]

Great. Thank you very much and thanks for the update. I wanted to get a sense for what remains to be done with respect to preparation for MARIO-4 and whether the partnership is a gating event there just because whether or not you would want buy-in from a potential partner, whether TNBC makes the most sense for the first pivotal indication? Thanks.

[Adelene Perkins, Chair and CEO]

Thanks for the question, Ed. Yes, we have made the decision that a strategic partnership should be in place prior to initiating studies. We continue to advance the preparation for those studies. But as you would imagine, given the number of different settings for which we've had encouraging activity with eganelisib and the number of different partners we're speaking with, there are different views on how different parties might prioritize.

And so we think it's very important to be able to incorporate prospective partners in the ultimate decision of who we partner with such that we're working on the studies that together we've decided should be prioritized first. So partnership comes first, then the initiation of studies, but we are in parallel advancing readiness for the studies.

[Edward Tenthoff, Piper Sandler]

Perfect. Thank you.

[Adelene Perkins, Chair and CEO]

Thank you.

[Operator]

Your next question comes from the line of Robyn Kar. Your line is open.

[Robyn Karnauskas, Truist Securities]

Hi. Thanks for taking my question. So I guess I'll follow up with that. Just first say congratulations on the second year data for MARIO-275. That's impressive. I guess this is three parts, I apologize. So number one, it sounds like the partner will want to have a lot of control and spend a lot of money in multiple different tumor types. Is a buyout rather than a partnership on the table? Because I feel like that's something we've seen more recently.

And a second question would be the discussions you're having with these partnerships, especially since -- what is the gating factor for them? Are they waiting for like a follow-up data set, like for this data set for MARIO-4? What are the things they're looking for to feel more comfortable with their strategy here?

And I think the third, which is sort of tangential, maybe for Larry, is like how do you think about given the new healthcare forum, how are companies thinking about that in terms of bringing things in where you may actually want -- small molecules in where you may actually want to go after frontlines sort of what we're talking about, rather than going late line? I'm trying to put these three things together; so M&A versus partnership, gating factors for a partnership deal, and then how does healthcare reform or price reform factor in? Thanks.

[Adelene Perkins, Chair and CEO]

Thanks, Robyn. So I'll take the first few and then turn it over to Larry. So with respect to what type of a partnership we'd be open to and whether we consider M&A, we really are focused on the two goals that we have. So the two goals are expanding the development of eganelisib. We believe it has -- the data to date have suggested it has potential for very broad impact for patients, and that's our number one goal is to realize that potential.

And number two, to do it in a structure that allows meaningful value creation for our shareholders. And there are a lot of different deal structures that could accommodate that. So we're considering everything and will come down in the final analysis on which of the options that we have we can best achieve those two goals. So we're not taking anything off the table.

With respect to gating, there is nothing that's gating right now. None of our conversations have partners waiting for, for example additional data. We're building -- all of our conversations are building off of the data that we've presented to date. It's nice when it continues to mature nicely, as we found and presented today with MARIO-275. But waiting for additional maturation of the data is not gating, it's just conversations that we're going through with the parties on what clinical development strategies and plans might make sense. And those conversations all have their own cadence. So there's nothing that's a stage gate for those.

And I'll let Larry talk about how healthcare reform might influence this. I'd say in general, we think some of the aspects of reform, like capping out of pocket cost is a plus but are more globally concerned about any government price controls that could limit funds flow into the industry, and therefore limit innovation. And I think you were asking Larry for something more specific about how it might translate into what lines of therapy are of greatest interest. So, Larry?

[Larry Bloch, President]

Yes. Just to emphasize, the fact that we do think there's some benefit and obviously some costs associated with the new legislation. We are focused on first-in-class, best-in-class medications and development of those have gone triple [ph] expense. And so anything that limits reimbursement excessively is going to have a negative impact, at least on the margin on innovative new medicines.

And having just gone through this first couple rounds of COVID, I think we all appreciate how important is to have access to cutting-edge technologies when it comes to medical challenges, and that certainly includes immuno-oncology that we're focused on. It doesn't fundamentally affect our -- is a first order prioritization of our clinical studies, because we really think the most important thing for us is to follow the data.

And so, as Robert said, our data with eganelisib, we started off in the later lines with MARIO-1, with patients who had fourth to 10th line prior therapies and moved towards the second line with MARIO-275 and with MARIO-3 TNBC in the frontline. And while there's -- we think the greatest benefit can be had by having patients getting first access to eganelisib as part of their initial regimen.

We think there's a broad potential across multiple indications and lines of therapy. And so having invested in eganelisib development from the lab through the Phase 2 clinic level [ph] we've had, it's really now about focusing on following the data, which is doing clinical translation as well as the prequels that we generated. And the reimbursement landscape is really a tertiary concern for us.

[Robyn Karnauskas, Truist Securities]

Sorry, can I just ask a quick follow up that I think all of us are wondering. So, obviously, some of the combinations you're talking about, those drugs will go off patent eventually, right? And your pill versus like an antibody therapeutic, so I guess the question becomes, are you seeing in these discussions any changes toward pills versus biologics?

And it's a broader question. It will really give a lot of clarity. We're all asking that question. And then with pills and biologics, you can't go formulate sometimes. So that's another question, like are there any ideas around how you keep that revenue stream longer than a nine-year revenue stream? I'm just curious, because none of us have any insight into those two things. And maybe you don't either. I don't know.

[Adelene Perkins, Chair and CEO]

Well, let me start Robyn with that, because there are a number of advantages to pills. And, Rob, I may ask you to -- I will ask you to follow up as well. The advantages are, of course, especially with eganelisib, it's a very simple once a day oral administration. It's also very helpful for doctors in managing patient care, because if there's any need for dose reduction or a drug holiday, that's much easier to do with small molecules than an antibody. And the cost of manufacturing is, of course, much lower.

So there's a lot of treatment advantages and cost of manufacturing advantages to small molecules. And so we've found that that's a real plus for eganelisib. Rob, do you want to elaborate on why you see as a treating physician advantages to small molecules, and then we can wrap up with any implications for healthcare reform?

[Robert Ilaria, CMO]

Sure, Adelene. You bring in some great points. [Technical Difficulty]

[Adelene Perkins, Chair and CEO]

Rob, you're breaking up a bit.

[Robert Ilaria, CMO]

Sorry. Can you hear me now?

[Adelene Perkins, Chair and CEO]

A little better.

[Robert Ilaria, CMO]

Okay. Sorry. I think that one of the most important factors is patient convenience, particularly patients who have cancer and are struggling to do things at home with their family and work and things like that. I think having the flexibility in an oral drug, you're not having to come into an infusion area, wait hours in line to get your infusion, there's an ability to have very flexible follow up with your physician.

You can make easily dose changes even over the phone. You can call your physician and say, I'm having this and this problem. The physician can say, oh, hold your pills until I see you or something like that. So I think there's a great deal of flexibility with an oral molecule from a patient perspective.

[Adelene Perkins, Chair and CEO]

So that all speaks, Robyn, to the value and there's a lot of value to small molecules. And at the end of the day, pricing should be reflective of value. And then, of course, there are lower costs of manufacturing. So we think those are all pluses in the overall healthcare reform.

[Larry Bloch, President]

And then I think also just in terms the policy level at the federal and even the international level is that small molecules, as Rob was emphasizing about the convenience for patients, in many settings outside of the first world, refrigeration can be a hindrance to patient access. Infusion can obviously be a hindrance to patient access. And so we're talking about global health, including oncology, small molecules are clearly the gold standard.

[Robyn Karnauskas, Truist Securities]

Thank you.

[Operator]

Your next question comes from the line of Kalpit Patel. Your line is open.

[Unidentified Analyst]

Good afternoon. This is Andy [ph] on for Kalpit. Thank you for taking questions. Maybe one on the regulatory side of preparing for registrational studies. You've previously mentioned that it can be beneficial to have one company kind of driving the regulatory process and having this take place in parallel to any potential VD activity. Just to get a sense of where you guys are currently at in terms of aligning with regulatory agencies on the key endpoints of design for registrational studies?

[Adelene Perkins, Chair and CEO]

Yes. Thank you for the question. So in light of our decision to finalize the clinical development strategy, the prioritization of studies and the design of those studies, until we've put a strategic partnership in place, obviously and naturally we will seek FDA feedback after we've received and incorporated potential partner input. So while it's long been our policy that we don't discuss any ongoing regulatory interactions, in this case, I can tell you that we have not yet sought regulatory feedback on a registration study.

[Unidentified Analyst]

That's helpful. Thank you.

[Adelene Perkins, Chair and CEO]

You're welcome.

[Operator]

Thank you. At this time, I'm showing no further questions. I'd like to turn the call back over to Adelene for closing remarks.

[Adelene Perkins, Chair and CEO]

Thank you, Joseph, and thank you to everyone for joining us today. We're very fortunate to be developing a promising therapy with the potential to improve the quality and length of life for people with cancer. We remain committed to realizing the value of eganelisib for the benefit of patients, and as a result bringing value to shareholders.

I'd like to thank the Infinity team, our investigators, our trial sites, as well as our investors, and most importantly, the people participating in our clinical studies and their families who have all played integral roles in advancing our work to bring better treatments to patients.

We look forward to updating you on the progress in the coming months. And thank you for your continued support. Have a nice night.

[Operator]

This concludes the conference call. And you may now disconnect.