Q3 2021 Epizyme Inc Earnings Call
Hello, and welcome to <unk> Conference call. All participants are in a listen only mode. There will be a question and answer session. After the prepared remarks. Please be advised that this call is being recorded at <unk> request.
I would now like to turn the call over to Craig West Vice President of Investor Relations you May now begin.
Thank you operator this morning, <unk> issued a press release, providing a business update in addition to third quarter 2021 financial results.
Yes release can be found in the investors section of the company's website at <unk> Dot com.
On the call with me today is grant Bogle, President and Chief Executive Officer, and Dr. <unk> Agarwal, Executive Vice President and Chief Medical and development Officer.
As a reminder, today's discussion will include forward looking statements related to <unk> current plans and expectations, which are subject to certain risks and uncertainties.
Actual results may differ materially due to various important factors, including those described in the risk factors section of our most recent forms 10-Q, 10-K and other SEC filings.
These forward looking statements represent our views as of this call and should not be relied upon as representing our views as of any subsequent date.
We undertake no obligation to publicly update these statements.
At this time I would like to turn the call over to grant Bogle Brent.
Thank you Craig and good morning, everyone. It's great to be here with you to provide an update on our third quarter financial results and share progress we've made against the four pillars of our strategic plan.
As many of you are aware when I joined <unk> as CEO last quarter, we announced a number of strategic and organizational changes to more favorably impact the adoption of <unk> and ultimately intend to establish it as a backbone of therapy in follicular lymphoma or FL.
<unk> sarcoma or E S.
We still have plenty of work to do we believe the changes we've made were the right ones to accelerate growth.
Wanted to see a positive commercial impact.
We have also started to see an impact from the cost savings initiatives announced last quarter.
We remain on track to meet the revised non-GAAP adjusted operating expense guidance of between $220 and $230 million for 2021 with additional cost savings planned in 2022.
During the third quarter, we reported total revenue of $5 2 million from <unk> net product sales.
In the second quarter of 2021, we recorded net product revenue of $8 million or $4 8 million on a non-GAAP basis, which excludes a $3 $2 million sale of <unk>.
Commercial product to a third party pharmaceutical company for us.
Its combination clinical trials.
Importantly, total patient demand for <unk> grew 22% in the third quarter over the second quarter, driven primarily by FL patient sales.
Free goods from our patient assistance program accounted for approximately 25% of total demand for the quarter in line with what we had reported in the second quarter.
During the third quarter, we saw an increase in new accounts prescribing <unk>.
Volume growth among existing accounts, both in the community and academic settings, and this growth was well dispersed across the country.
We've made progress partnering with several large integrated provider organizations.
Prove the integration of <unk> into their systems of care, such as their electronic medical records or EMR.
In a way that makes it has varick and the easy <unk> pest easier to access within the workflow.
This is part of our strategy to focus on system wide integration to augment our efforts to educate individual physicians.
It is important that <unk> incorporated into provider systems and workflows.
I want to provider encounters of relapsed or refractory FL patient has verrucous position consistent with our label and guidelines.
It easier to write a prescription on the physician believes <unk> is the appropriate treatment choice.
For example, one of the large group practices and the southeast <unk> was available in the EMR.
Not tied to the recommended treatment plan for relapsed or refractory FL patients.
During the third quarter. This group practice made the decision to ensure it has very was appropriately positioned as a treatment option for relapsed or refractory FL patients.
In addition, the practice decided and incorporate the application form for the Z H do now test.
Then the same EMR platform to facilitate physician ordering over the past.
Educating provider organizations about the importance of ensuring that <unk> is appropriately positioned within their systems and workflow.
System with our labeling guidelines.
Turning to be a priority for us going forward.
We expect this strategy will help assure that <unk> is considered as an appropriate treatment option.
Providers throughout the health system, when a relapsed or refractory FL patient progresses.
<unk>, a new treatment option.
Our field teams continue to evolve their strategies and tactics to engage customers in person virtually or both according to our customers' preferences.
During the third quarter. This resulted in our field teams, having more in depth discussions some clinics reopen the industry representatives and as our newly created feel rolls allowed us to engage healthcare professionals and other non physician decision makers at a deeper level.
Overall more than 90% of tier one and 75% of tier two accounts were called upon in the quarter. Despite the reduction in reorganization of our field teams in August.
In addition to physician education, we believe we have an opportunity to directly address patients as well.
Our market research shows that physicians frequently respond to patient requests for appropriate treatment options.
Research shows that FL patients only make treatment requests around 15% of the time.
When they do make a request for a therapy. The requests are often granted.
In an effort to educate and empower appropriate patients to participate in their treatment decisions. We've just launched a branded highly targeted direct to patient campaign, which we believe can make a meaningful impact in keeping tabs very top of mind, when a relapsed or refractory FL patient and their physician are considering treatment options.
In addition to the branded campaign, we have been working closely with a group of FL patient advocates and advisors to develop an online disease education tool called in my blood.
People living with FL to proactively engage in their treatment decisions.
This unbranded resource, which we launched last week features a first of its kind interactive tool that provides personalized guidance.
Advice for patient based on where they are in their <unk> journey.
You put out a press release on November one that includes more details on the <unk> program.
Through both of these programs our goal is to educate and activate patients to proactively engage with their physicians.
Select the best available treatment.
All of the commercial initiatives discussed today are helping to advance our vision of transforming the lives of patients living with cancer.
And then helping established <unk> as the foundation of therapy in both FL in Es.
Further advance this vision, we are making great progress on our key clinical trials to provide additional data and evidence of <unk> potential not just as mono therapy.
Combination with standard of care treatments.
Believe the data pertaining has very combinations NFL.
Other heme and solid tumor indications is just beginning to emerge from a.
<unk> trials that are underway.
As Youll hear from <unk> in a moment, we're making good progress with these combination trials for <unk>.
Consistent with the third pillar of our strategic plan. We're excited to have announced last week, a major milestone for <unk>.
We received fast track designation for <unk> and initiated the first in human clinical trial of our first in class oral <unk> inhibitor <unk> hundred one four.
As leaders in pioneering novel epigenetic therapies, bringing <unk> forward to the clinic as an important.
Advancement as we work towards our vision of making this therapy possible treatment option for patients living with devastating cancers, such as <unk> and multiple myeloma.
At this time I would now like to turn the call over to <unk>.
Speak to our clinical development progress for Tazemetostat in ECM O 414 in more detail <unk>.
Good morning, everyone.
As Dan alluded to and a good development across our portfolio of programs remain a top priority for FSA.
Clinical program supporting the expanded potential of <unk> all.
Jim will follow with Askmen and investigator request to sponsor additional studies.
I need to see.
The scientific community's enthusiasm.
So that one segment for the full potential if we can.
I believe it's very promising and just beginning to be understood.
During the third quarter, we advance numerous important clinical programs.
Progressed active tazemetostat clinical trials and received FDA clearance to initiate doing your basket studies evaluating tazemetostat combinations in solid tumors and Hematological malignancies.
Our first patient to be dosed in fourth quarter 2021.
<unk> also shared data from multiple clinical programs during the quarter.
This updated safety data from our prostate cancer trial Hello, one at ESMO in September.
We remain committed to producing a steady cadence of clinical data over the course of the next few years.
In addition to add Tazemetostat studies.
Peter announced today that we have.
R&D clearance from FDA to initiate the first in human study all five Boston plus orders said digital innovator.
I am all for one for multiple myeloma and DCM.
Yes. It has also granted designation for ECM all four one for India. The Bcl.
This is a significant milestone that could provide important diversity.
That portfolio.
Please find a portion of our ECM. All 414 study is open and we are actively screening patients.
Well deeper dive, let's start with the active studies of Tazemetostat in patients with FL.
We have completed the phase one safety zone enforcement of our Symphony one trial.
The FY two as easy as tier two and have submitted the findings with the FDA point of view.
To date, the safety profile observed with Tazemetostat.
Asquith.
With that described in the respective vessel safety information document.
Bigger projects you win.
At the highest dose of 800 milligram.
We plan to share an important data update.
<unk> safety Donlin portion of the card at Ash in December which will include updated safety data.
Follow up duration.
Pharmacology and preliminary safety data.
40 patients now endured.
Remain excited by the response rate and safety profile of the combination of both.
Consistent with what we have previously reported.
And we have great response from the FDA, we have initiated global site activation in the preparation for the phase three portion of the Symphony one trial, including in China is that hirschmann collaboration partner.
To begin enrolling the randomized portion of the study in the fourth quarter.
The phase two portion of the study will include 500 patients across global sites in the U S China and Europe.
You may recall that as part of our discussion with the FDA earlier. This year, we have aligned on an important change to the phase three protocol whereby the second interim analysis include an efficacy evaluation was 65% of progression free survival or PFS events have update.
This allows us to read on efficacy data earlier than previously expected and may provide an opportunity to stop the study early should the pre defined treatment effect will be realized.
We will provide periodic updates on this important study a ski enrolment milestones out east.
Separately, our Symphony <unk> Phase II trial, formerly easiest fortino, one evaluating tazemetostat.
And the last refractory FL.
To move forward Escalade and is actively enrolling.
All sites are currently active including the large oncology netbook account amongst others.
Recently added to accelerate patient accrual.
Additionally, a collaborative study with Liza in frontline FL and diffuse large b cell Bcf at both nearly fully enrolled and we look forward to sharing updates once available.
We remain optimistic about tazemetostat has potential as a backbone of therapy NFL.
Continuing to generate important clinical data to support its potential combination with other therapies.
Neil NFL you plan to generate important tazemetostat combination proof of concept data in new Hematological and solid tumor indications over the next 12 months.
We presented updated safety and activity data from the safety portion of our metastatic castration resistant prostate cancer study Mcf PC as part of the poster presentation during 2021.
<unk> of medical oncology Congress in September.
<unk>, formerly therefore, it is easier at 11 O. One is evaluating tazemetostat in July to Mike compared to <unk> alone.
Notably our median PFS eight has still not been reached as of July 22nd data cutoff, which would have been approximately 21 months and.
Six months PFS was 61, 7%.
Additionally, 11 of 21 or 52% of patient experience of BSA degrees of 50% from baseline with one patient having a decrease and also having a partial response.
Based on the phase one data at <unk> initiated enrollment in the phase II efficacy portion of the study.
Validating the combination of 150 milligram and tools, the mic and 1200 milligram Tazemetostat <unk> PD in 80, Mcf PBC patients.
Primary endpoint of the study is PFS and the study is powered to see PFS difference of six months.
The phase II portion of <unk>, one study is already nearly hoffenberg.
Investor you discontinue to remain enthusiastic tazemetostat potential in this difficult to treat population.
Moving to planned studies.
<unk> analysis that we have received clearance from the FDA.
Jean Pascal study <unk> hundred one.
Mr. Lascar study, but evaluate tazemetostat safety and efficacy across multiple hematologic malignancies.
This approach we plan to study.
Combinations with standard of care <unk> and other therapies with <unk> mechanism of action and fixed.
To expand the potential of Tazemetostat.
With this announcement.
After the fastest studies in heme malignancies, and solid tumors have been cleared to proceed and we plan to initiate enrollment of patients in both studies quite yet Ed.
In addition to our studies discussed to date all of the clinical trials of Tazemetostat.
Goodbye.
All of these studies are intended to provide a steady stream of important data and insights in the coming quarters.
The development of Tazemetostat.
Combined with other active agents in an effort to significantly broaden its therapeutic potential in both metallurgical and solid tumors.
Jan Tazemetostat I'm excited to share that we have.
Progress is our novel first in class orders said, you're doing a beta museum all 414.
We have opened for enrollment and are currently screening patients for Cleveland <unk> Boston Human study.
We expected those the first patient before the end of 2021.
This study is intended to evaluate the safety and optimize the dose and schedule of ECM all for one one for multiple myeloma and <unk> patients.
Our innovative approach to intervention in this economy, which.
It has not been successfully drug to date demand utility and potential of our epigenetic approach to oncology research and the productivity of episodic backhaul.
Thank you for inhibition has been shown to have clinical potential in multiple settings, including high. This Q4, 14, multiple myeloma and <unk> as monotherapy and in combination with existing and emerging therapies, including Tazemetostat.
Once you have optimized the dose the phase one study will it be expanded.
We are patient cohorts.
For 14 multiple myeloma.
90, 414, multiple myeloma and <unk>.
Finally, our partnership with touch is advancing.
We are working collaboratively.
Any one sites activated in China, and Hudson is already working on proposals for additional combination trials with tazemetostat and can produce meaningful new data.
As you can see we continued to execute across our existing and planned clinical trials as we look to develop pathway not just as a foundation of tappin if any yet.
Add on its pipeline in a drug potentially.
These clinical trials are intended to in a steady cadence of clinical data results from ash in December for the coming years.
Look forward to sharing that data update.
At this time I'd like to pass the call back progressed.
Thank you <unk>.
We ended the third quarter with $221 3 million in cash cash equivalents in marketable securities.
This includes $25 million received from Hutch med as part of the upfront payment from our <unk> collaboration in China, which we announced on the Q2 earnings call.
Our total non-GAAP operating expenses for the third quarter 2021 were $61 9 million of which R&D and SG&A accounted for approximately $32 3 million and $28 5 million respectively.
Based on the changes to our operating plan and the structure announced during our second quarter earnings call. We expect our current cash will fund operations into the fourth quarter of 2022.
We believe it is sufficient to sustain operations for at least the next 12 months.
We remain on target with our revised non-GAAP adjusted operating expense guidance of between $220 million to $230 million for 2021.
And we expect the changes previously announced on our second quarter earnings call.
More significant impact on our full year budget for 2022.
As you recall, we reduced our budgeted head count by 20%, including 11% of our current employees, resulting in estimated severance and termination costs of approximately $2 million.
These charges were recorded in the third quarter of 2021.
Overall after reflecting on my first quarter as <unk> CEO I am pleased with the company's receptivity to change.
City with which the team has been willing to take action and the results were already beginning to see from these changes.
Early we expect the changes we have implemented to continue to bear fruit as we move into 2022.
We continue to be guided by the four pillars of our strategy announced during our vision call in March.
We've made important progress against each number one.
<unk> the commercial adoption of Pittsburgh.
The two building that has a rich pipeline and a drug potential and three expanding our pipeline and portfolio and finally number four collaborating to expand our reach to patients and building incremental value.
Yes design team is incredibly dedicated to the patients we serve.
Believe we are on the right track.
Operator, you May now open the line for questions.
As a reminder to ask a question you will need the breadth star one on your telephone.
To your question.
Please standby, while we compile the Q&A roster.
Our first question comes from the line of Peter Lawson from Barclays. Your line is now open.
Hey, Thanks for taking the question.
I guess, maybe on the <unk>.
Just with with.
With the progress you've made there just where do you think that could fit into the landscape in multiple myeloma <unk> and kind of how you think about combination use.
As good candidates for combination use or do you think you could actually see single agent activity. Thank you.
Thank you Peter and good morning, Thanks for joining US I think that's probably best answered by sure Poly social following.
P. J for the question. So as you know subject to as an historic <unk> transferase and one of the strengths of this.
It's actually both.
Gyn surgical inhibitor, there's none in the clinic and what's exciting is that plays an important role in people putting in multiple myeloma, which is a big unmet need.
It has slipped prognosis in that patient population, so although we realize multiple myeloma competitive it is.
<unk> patient population, where we really see based on preclinical data that there's a great effect.
We do see that in non <unk> patients as well so the way. The study is designed is rebuild fluids find the dose and once we have the doors. We will open the study three expansion cohorts the plus expansion cohort is in people putting multiple myeloma.
Second one is a 90 414 multiple myeloma and the third one India WCS our approach would be to first get monotherapy data and then eventually separately test combinations, we have done multiple combinations in multiple myeloma and <unk> in our preclinical models and we plan to evaluate that.
Thank you and then just as we look ahead to ash.
Do you want to see in that data from the 40 patients from the phase one b.
Sure. So I think in terms of.
The Symphony one study, it's a rather big phase one study right. It's about 40 patients. So we're looking at.
Consistent response rate that we have shown if you remember that we showed almost a 100% response in the last earnings. So that does show a consistent response rate. We're looking for more safety clinical pharmacology that we can combine at the highest dose as well as more follow up so it is important because it's a big data.
<unk>.
Other smaller safety studies and I think it's important that we are working.
Really working hard to get a phase three ready globally, including China to start a randomized portion planning this year.
Okay. Thank you and then I may have missed this should probably but.
When do we see the next update for prostate.
So it's an open label study the safety data was presented at ESMO, Peter and it really was encouraging because you saw that we didn't reach median PFS. Even after 21 months of follow up when combined with Enzo and so youll be will provide more updated data for safety and next year, but the other thing that we've been looking.
At the randomized portion of the study we had actively enrolling at nearly half completed that study is an open label study. So we plan to present interim data next year and we'll provide more guidance.
The study enrolled as to when we would be able to do that.
Do you think beginning of this year.
Next year 'twenty, two we'd get a.
Kind of more measured timelines around data.
Data readouts from various trials.
I think so I think as we enroll will be able to provide more update next year early next year, probably because we know we're doing a lot of studies. We are doing a basket study, which is open label with both the heme and solid tumors.
The Liza trial that I said nearly complete in frontline <unk>, we have the updated data for tier two as well as the <unk>, which is also open label and so we are looking forward to providing a constant stream of data in the next couple of years.
Thank you so much.
Thank you. Our next question comes from the line of Michael <unk> from Jefferies. Your line is now open.
Hello. Thank you you have collect sheet degree on for Michael just one question from Us here.
Wondering if you could provide any more color on what's driving organizations to actually optimize our workflow.
With Taz.
Does it occur after a certain number of interactions that particularly health care system has with your sales team.
And I guess if that is the case do you have a sense of how many interactions are needed in order to really drive.
Workflow optimization on that front any color there would be really helpful. Thank you.
Thank you.
That's a great question and.
Each each organization is different but let me let me start at a foundational level number one.
It is important to develop advocates for <unk>.
Within the account and our sales team has been doing that from the start.
<unk>.
Getting physician advocates that really want to optimize the use of <unk> is critical. The next step is then engaging not just with the physicians individually, but then with the leadership both.
Physician leadership and then the operational leadership within these organizations.
This physician advocate, our physician advocates and looking at the workflow and basically.
Helping them understand that there may be opportunities to improve it and in essence.
If the organization comes to that conclusion and of course, we're supporting them.
And helping them get there to that conclusion in an appropriate way then the steps to optimize it vary by organization, but it's not that much work to do once they've made that decision, but I understand that given all the different things that are going on in health care in these organizations.
And so forth unless this becomes a priority.
And someone actually looks it just doesn't always get done.
And so that's really the process. It doesn't it takes several calls and it takes.
Different touch points within the organization. So it's a matter of months probably to get it done it's not something you do in a single call and but they.
They've been very receptive I must say that the organizations want their patients to have access to what they consider very important treatment option and they realize that.
This is a way to help ensure that physicians have all the information available to them. When they are in front of a relapsed refractory patient to help them make the appropriate decision.
Got it thank you very much.
Yeah.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
Draw your question press the pound key.
Our next question comes from the line of Peyton bones that from Cowen. Your line is now open.
Hi, guys. Good morning. This is a patent on for Joe. Thanks for taking our questions I guess I'm just really quick on the basket study and the cooperation with Hudson you mentioned on the call that you're going to do possibly some additional cooperation hatchback will this include the basket studies.
Barrick or are these going to be separate studies I'm, mostly with hatchback.
Other oncology drug portfolio.
I think there is a basket study that talked about that actually have iron declare force vehement project too much.
In U S to begin with of course, we are collaborating with touch, but then we'd see Hollywood.
Seats at the moment, it's U S. Only and we are ready to start the study and get the first patient in as quickly as possible membranes with massive studies, we are doing multiple combinations.
And indications.
Total EBIT to get multiple for concept data in terms of <unk>, we have a big pipeline as you can see domestically are going to do innovative combinations are there more than what we are doing.
In our baskets arms as well so we're excited that we'll be able to get the data not only in what we are doing but also what <unk> will do with multiple different combinations like <unk> and others that are in the pipeline.
Great Awesome. Thank you and then secondly for the <unk>.
<unk> are you guys are doing in the exploratory analysis on Biomarkers like looking at any differences vintage 30, 36 emulation and are there any plan to develop a companion diagnostic test if anything comes out of deep biomarker quicker analysis being conducted.
Yes, that's absolutely it as a company we have very complicated translation medicine, we are actually looking at all of those including <unk> 36.
<unk>, especially in the organization. So we are looking at all those things in our study. The goal is to first find the dose and then eventually when we do the expansion we'd be looking at PK biomarkers.
We also have option biopsy that as well so collect that data and understand in terms of companion diagnostic I think we'd have to see how it goes our goal is to be able to study. This important FIFA 14, and 19 for 14 and depending on how we see the activity we will.
Think about whether we need a diagnostic or not right now will be studying in all the patient population.
Okay.
Hop back in queue.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
Withdraw your question press the pound team.
At this time I am showing no further questions I would like to turn the call back over to grant Bogle for closing remarks.
Thank you operator.
Just want to say on behalf of all of US here at Uptime, we're excited about the progress we're making and.
Look forward to continuing to report.
Steady steps to improve.
Improve the lives of patients that are that are facing many of the devastating disease.
Disease in poker, Palma, and myeloma and other areas that we're exploring I also want to thank you all for joining US This morning, and I look forward to further interactions in the months ahead. Thank you operator.
This concludes today's conference call. Thank you for participating you may now disconnect.
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